Two Cave Creek homes listed at similar prices can get their water in completely different ways. One may be on the Town's treated Colorado River supply. Another may be on a Town-owned system outside town limits whose wells now produce about half what they did 20 years ago. Others run on a private well, a well shared with neighbors, or water trucked from a standpipe that only some owners can use. A listing doesn't say which, so buyers usually find out during the inspection period. This fall there is a second question. The Town of Cave Creek is deciding whether to sell its water and wastewater utilities.
The town's water system isn't the town's only water system
Cave Creek runs two separate water systems. The Cave Creek Water System serves the town and some nearby unincorporated land. It covers about 14.5 square miles and has more than 2,500 metered accounts. The Town bought it from the private Cave Creek Water Company in March 2007. Its main supply is Central Arizona Project water, which travels through a 16-inch, 12-mile raw-water pipeline to the Town's 3-million-gallon-per-day treatment plant. The system's eight historic well sites are inactive. In a November 3, 2026 FAQ, the Town said nearly 95% of its supply comes from the Colorado River through CAP.
The Desert Hills Water System sits west of the town boundary in unincorporated Maricopa County. The Town bought it from the private Desert Hills Water Company in September 2006. As of June 2026 it served about 1,850 accounts across roughly 7.5 square miles, mostly on 1- to 5-acre residential lots. It runs on three groundwater wells plus CAP water piped over from the Cave Creek system, and CAP has supplied more than half its water since 2007. Town officials told the Arizona Republic in November 2025 that the Desert Hills wells produce about half what they did at the 2006 takeover. Cave Creek sends roughly 20% of its Colorado River water to Desert Hills.
That arrangement shows up in the bills.
What the two systems charge in 2026
The Town Council adopted the current rates through Resolution R2026-01 on January 6, 2026, and they took effect February 5, 2026. These are the residential charges for the most common meter sizes, 5/8-inch to 1-inch:
| 2026 residential charge | Cave Creek Water System | Desert Hills Water System |
|---|---|---|
| Monthly base charge, not boosted | $65.04 | $80.76 |
| Monthly base charge, boosted | $80.75 | $82.72 |
| Per 1,000 gallons, 0 to 4,000 | $2.80 | $4.40 |
| Per 1,000 gallons, 4,001 to 10,000 | $3.50 | $5.94 |
| Per 1,000 gallons, above 40,000 | $20.53 | $29.07 |
The top tier matters most for horse property and large irrigated lots. The Town's January rate presentation projected 6% annual revenue increases for both systems through fiscal 2027–28, with the steepest increases on high use. A buyer moving from city service elsewhere in the Valley can't estimate a Cave Creek water bill until they know which column the house is in. The adopted rate resolution also lists the published 2027 and 2028 rates.
Desert Hills has also faced capacity limits. The Arizona Republic reported that the Town temporarily stopped new Desert Hills hookups in 2021 and limits development that lacks water certificates.
Homes that aren't on either system
Within the Cave Creek system's own service area, the Town says many homes and businesses use private wells and aren't connected to Town water. The Arizona Republic also reported that residents in unincorporated areas drill exempt wells.
Hauled water is the narrowest option. The Cave Creek standpipe at the Water Reclamation Facility serves property owners in West Cave Creek Water LLC, an area north of Tanya Road, east of the 24th Street alignment, south of Rockaway Hills Road and west of 34th Street. Seventeen of those accounts were active in June 2026. Desert Hills has three standpipe accounts. Its bulk-filling system failed in 2022, so users now call 24 hours ahead to meet staff at the site. Neither standpipe gives the public a general right to haul water.
Off-system homes come with paperwork that city-water homes don't have. The Arizona REALTORS® Domestic Water Well/Water Use Addendum to the seller's property disclosure statement asks for:
- the well's registration number and the seller's ownership share
- how many households share the well, and whether there is a recorded or written agreement
- storage tanks, known contamination testing, yield and recovery
- any history of inadequate supply or equipment problems
The Arizona Department of Water Resources adds three points buyers often don't expect. Shared-well agreements are civil matters that ADWR doesn't regulate or resolve. Its well registry isn't a legal determination of ownership, may still list prior owners, and may miss unregistered wells. And it doesn't track which parcel gets water from which well or provider. When ownership changes on a property with a registered well, ADWR's process is Form 55-71A with a $30 fee, a parcel map and the deed.
The utility sale and how it would proceed
On July 10, 2026, the Town issued an Invitation for Bids to sell the Desert Hills Water System, the Cave Creek Water System and the Cave Creek Wastewater System. All three must go to a single buyer, and bids were due September 10, 2026. The wastewater system serves 947 accounts inside town limits. Its reclamation plant at 44th Street and Carefree Highway sends A+ reclaimed water to the Rancho Mañana golf course.
The Town listed three objectives: get the highest value, reduce its need to buy new water resources, and limit future rate increases for residents and businesses. Under the bid document, the next steps depend on what the systems' real property is worth:
- If that real property is valued at $15 million or more, the sale needs voter approval. The Town would then auction the systems by open bid against a term sheet the buyer must satisfy.
- If it is valued below $15 million, the Town Council can approve the sale after public notice and a hearing.
- Either way, the buyer has to get Arizona Corporation Commission approval and submit a plan for setting rates after the sale.
As of the Town's November 3 FAQ, the Council had held two executive sessions on the bids, and no decision had been made. The Town plans public information sessions in early 2027. The same FAQ says:
"The Town Council is considering key elements of a proposed sale of the utilities, including rate impacts and concerns from private well-owners and other residents who are not yet hooked up to the Town's water system."
The FAQ also says the ACC wouldn't let a private water company sell Cave Creek's water resources to another service territory, or approve a sale to a buyer that can't show adequate water resources. Consultants are also studying a different option: expanding the new Phoenix Interconnect so that the City of Phoenix handles 100% of the town's water treatment. Not everyone supports a sale. According to the September 15, 2026 council meeting minutes, resident Bill Basore spoke against a sale, citing local control of water as a founding reason for the town's incorporation.
Why the town is weighing a sale now
The sale is tied to supply. According to the Town's FAQ, Arizona's Colorado River allocation was expected to drop 20% in 2027, but CAP and the Arizona Water Banking Authority have firmed up Cave Creek's supply for that year. The Town expects reductions are likely by 2028, depending on Lake Mead and Lake Powell. It also says it has enough water banked underground for 3 to 5 years.
The Phoenix Interconnect is the nearest new piece of infrastructure. It can deliver up to 1.4 million gallons per day of treated water. The Town's October 28 notice said contractor MGC was modifying the 16-inch line on Cave Creek Road, with one lane closed each way for about two weeks starting October 26. The Town expected treated Phoenix water to start arriving in early November.
Some areas aren't connected yet. The bid document describes a planned 230-lot development, Cahava Springs, with two off-site booster stations and an on-site reservoir booster. It also describes an adjacent 24th Street area expected to form a Domestic Water Improvement District to connect to a planned 12-inch line.
What this means when you compare two Cave Creek homes
Taken together, the water source works like a hidden line item in the price. A home on the Cave Creek system has a known 2026 rate, a mostly CAP supply, and an owner that could change through a public process with an ACC review. A Desert Hills home pays higher rates and depends on a declining set of wells plus water piped in from Cave Creek. A home on a well carries its own records, any sharing agreements, and an ADWR filing at closing, and the Town FAQ names private-well owners as a group the Council is hearing from.
This post is general information, not legal, tax or financial advice. Confirm the water arrangements for a specific property with the right professionals, such as a well inspector, the title company and your own attorney.
FAQ
Does the sale affect homes on private wells? The bid document covers the Town's two water systems and its wastewater system. The Town's FAQ says the Council is weighing concerns from private-well owners and residents not yet connected.
Will residents get to vote? Only if the systems' real property is valued at $15 million or more. Below that, the Council can approve a sale after public notice and a hearing.
How do I find out which system serves a house? Ask the seller for the water disclosures and the current utility bill, then check with the Town of Cave Creek utility office. ADWR doesn't track which parcel gets water from which well or provider.
If you're comparing Cave Creek homes and want to know each one's water source, rates and disclosure paperwork before you write an offer, Kayla Kerulis can help you sort that out early and stay current as the Town's decision develops. Request a complimentary market consultation.
