Carefree water rates and fees set to increase

Carefree Water Company customers will see an estimated $5 monthly increase in their bills after the organization’s board of directors approved its budget.

The board OK’d the Arizona Utilities Community Facility District budget on May 3, instituting an over 4.4% increase in base price and commodity fees. A $20 acquisition fee will be charged, too, for customers who come under the Carefree Water Company umbrella from the Cave Creek system, according to Greg Crossman, Carefree Water Company general manager. 

Total expenditures for the Carefree Water Company for fiscal year 2022/23, which runs from July 1, 2022, through June 30, 2023, are projected to be $21,834,304. This would leave $130,531 of funds available.

The current average monthly residential bill is $114.76. With these changes, the new average monthly residential bill would be $119.81. This is based on the average residential water use of 12,000 gallons per month. In addition, the residential base fee is set to increase by $2.22 to $52.66.

Crossman said the rates and fees are consistent with a five-year plan that was recommended by Willdan Financial Consultants to support the repayment of water revenue bonds issued to finance the Carefree Water Consolidation Project.

According to Crossman, water costs are increasing by about $200,000 this fiscal year due to several factors, the largest of which being related to water shortages.

“CAP (Central Arizona Project) charges for our untreated surface water that comes from the Colorado River are going to go up considerably — by about 14%. That’s a reflection of the tier one water shortage on the Colorado River,” Crossman said. 

“Essentially, the CAP has a significant amount of fixed costs that get distributed over the amount of water they deliver. When we’re in a shortage condition, there’s less water to spread those costs over so the cost per acre foot goes up. That’s why this cost is going up this year, because of the terrible water shortage.”

Other factors include increased usage, increases in Scottsdale Treated Water Costs, increased general and administrative costs and adjustments for inflation.

The replacement and maintenance costs are up 37%, according to Crossman. That accounts for 7% of the total water company budget.

“We are seeing significant increases in our material costs that we use to maintain a repair system,” he explained.

“That’s just a reflection of the supply chain issues that everybody in the country is experiencing. We are also seeing a significant increase in our contractual maintenance costs.”

This is a bigger hit than expected because the water company is working on several improvements, Crossman said.

Meters are being replaced at $50,000. Valve replacements are another $50,000, and technology improvements for the supervisory control and data acquisition system will cost $30,000. 

In addition to the slight increase in base and commodity fees, the Carefree Water Company implemented a $20 acquisition fee and a new water supply fee for certain new developments. Crossman said the acquisition fee will be a recurring monthly fee “at least through the end of the bonding period, which is 30 years.” The water supply fee runs under the premise that new development should pay its way, he said, and that the burden of new development should not fall on existing ratepayers or citizens. 

“What the water supply fee accomplishes is that it repays our customers for past expenditures and also develops a pool for funding in the future such as the water supplies that we might need to generate to support future development,” Crossman said.

For single-family residential units, the supply fee is set at $1,4455 per dwelling unit. For multifamily residential units, the fee is $722.50 per dwelling unit. For all other future water uses, such as commercial, irrigation or recreational facilities, the fee is $2,890 per acre foot, which Crossman said is a reasonable rate when looking at the market. 

Mayor Les Peterson brought up the Aug. 2 vote that could both halt and reverse any construction on the underground water storage reservoir along Tom Darlington Road. Peterson asked if the vote were to pass and the project was halted, if those changes could be accommodated and what the budget would allow for. Crossman said no, that could not be accommodated. 

“We anticipate removing the reservoir that would be completed at that site and replacing it somewhere else is probably going to cost anywhere from $8 million to $10 million,” Crossman said. “We do not have that amount of budget.”

More information about the Carefree Water Consolidation Project can be found at