s a crucial arbitration case with Carefree over a water dispute continues, the town of Cave Creek is starting to look at a rate change.
At its November 16 meeting, Cave Creek Town Council will consider approving $56,000 for a utilities financial plan update and $25,400 for a water rate modification study by Willdan Financial Services and Walker Consulting.
According to an agenda summary, water rates for both the Cave Creek and Desert Hills system include a base charge and a tiered volume rate. The tiers and volume rates are the same regardless of class—with no distinction between residential and commercial.
The proposed study is “to ensure that the costs associated with utility operations are allocated equitably to each customer class.”
Though council did not vote on them, the items were discussed at the November 2 town council meeting.
Kevin Burnett from Willdan gave an overview of the proposals.
“When the new rates were adopted in June, we really focused on a one-year snapshot of what those rates need to be with an intent to take a look at it later this year,” Burnett said.
He said a previous cost of service analysis “struggled a little bit (over) do we have customer classes correct?”
With the proposed study, Burnett said, “We’ll present some different options, ways of designing rates.”
Meanwhile, closed-door meetings continue in the arbitration to settle the Cave Creek and Carefree battle over water.
Carefree filed a complaint in condemnation January 29, 2019, stating it wanted to exercise the right to take over a portion of the Cave Creek Water Company. The dispute is over how much Carefree will pay to take back the 554 Carefree residents Cave Creek serves.
Cave Creek announced May 14 it values what Carefree must pay at $17.1 million.
Carefree’s valuation was far less than that: $1.47 million.
After Carefree’s 2019 complaint, Cave Creek filed a counter complaint two months later, asking the court for a judgment regarding the assets to be included in the condemnation and the compensation formula to be used to value the assets.
But Judge Cynthia Bailey ordered the two towns to go to arbitration, as Carefree requested.
Since the September ruling and the beginning of arbitration, both towns have had multiple executive session meetings with attorneys.
Asked for an update, Carefree Mayor Les Peterson said, “Still in arbitration.”
He said Carefree expects a decision “in about 30 days.”