Cave Creek, Arizona, is negotiating water exchange agreements with neighboring cities and pursuing other backup supply options as the federal government has proposed major cuts to Central Arizona Project allocations that could take effect as early as January 2027. The town of about 5,000 people on the outer edge of the Phoenix metropolitan area gets roughly 95% of its water from the Colorado River.

Cave Creek receives that water through the Central Arizona Project, a 336-mile canal that transports Colorado River water from Arizona's western border to the Phoenix and Tucson areas. The town is expected to be among the first communities to have its supply reduced under the proposed cutbacks, which the federal government has said are intended to protect the nation's largest reservoirs. Negotiations among states on sharing Colorado River allocations are at an impasse.

Three booster pumps deliver nearly all of Cave Creek's Colorado River water to residents' taps. Without them, no Colorado River water would reach the town.

Cave Creek utilities director Shawn Kreuzwiesner said planning has been complicated by the shifting scale of the proposed reductions. "Not knowing what the cuts will be is very stressful because we've been trying to plan for 20%, 25% cuts, and now all of a sudden this number of 50-plus percent came up," he said. "That's a game changer for everybody."

"Other agencies I've worked for in the Valley have had the luxury of that more diverse water portfolio. I hate to use the term, but we're sort of the sharp end of the stick or the spear here. We're the first one that's going to feel the impact," Kreuzwiesner said.

Cave Creek hired independent consultant Brad Hill, who worked for over 30 years in the municipal water sector, including positions with Flagstaff and Peoria, Arizona, to find new supply sources. Groundwater development is not an option because the town sits on the edge of the Phoenix-area aquifer, which has a bathtub shape with deeper water in the center.

The town participates in an aquifer recharge program that stores excess Colorado River water underground and pays an annual fee for storage rights. Cave Creek has extraction rights to the stored water but cannot directly access it because the aquifer is far from town and constructing a pipeline would be prohibitively expensive and time-consuming.

The town is negotiating water exchange agreements with Phoenix, Peoria, and Surprise that would allow those cities to use more groundwater and leave their CAP water in the canal for Cave Creek. Phoenix is also working to connect Cave Creek to its water treatment system to provide a backup supply.

Max Wilson, a water resources management advisor, said regional reputation is a factor in the cooperation. "Everybody, when they move to Arizona, the first question they get from their family is, are they going to run out of water?" he said. "I think anything that undermines the confidence that the nation has in sustainable lives here in the Valley would be negative for all of us who live here."