Carefree v. Cave Creek Settlement Accepted
March 15, 2021
In January, the Town of Cave Creek received the Decision by a panel of arbitrators in the case of Carefree v. Cave Creek. On March 12, 2021, the Town agreed to a Settlement of the Decision.
The case stems from a 2005 Intergovernmental Agreement (IGA) for Cave Creek to serve water to Carefree customers through the Cave Creek water system. In 2018, Carefree decided it wanted to detach from the system and the IGA. Cave Creek sought just compensation for its significant debt and investment in its Carefree customers, water supply and distribution infrastructure which led to a disagreement of the terms of the IGA and eventually, this lawsuit.
Over the past two years, Cave Creek vigorously defended its entire customer base within the written intent of the Agreement with Carefree. While we would have preferred a different outcome, the Town has chosen to abide by the ruling, which allows for Cave Creek to be compensated $1.47 million for fixed assets in the Carefree neighborhoods served by the Cave Creek water system. After significant and specific negotiations, the Town believes it can now move forward in the best interests of both communities.
Since purchasing the Cave Creek Water System in 2008, the Town of Cave Creek has maintained a safe and reliable water system for its customers. After our initial purchase, the Town has invested close to $30 million to improve the safety and reliability of the water system for all its customers. In the past two years the Town has completed agreements with the City of Phoenix to allow Phoenix to treat and deliver a portion of Cave Creek’s CAP water supply to the Town. These collaborations will lead to an even more reliable and sustainable system with stable water rates for our customers.
According to Cave Creek Mayor Ernie Bunch, “We have stated all along and continue to believe that our actions in this case were necessary to defend the integrity of our complex water system and the rights of our customers. The loss of our Carefree customers will have a major economic impact on our Town’s revenues, but we must now turn to taking the financial steps necessary to accommodate this Decision. One portion of the Decision is that Carefree is responsible for physically separating the equipment. We ask for the patience and understanding of all of our customers as we go through the physical separation process with the Town of Carefree.”
“We are proud to have planned for smart retail growth in our eclectic Town Core and the Cave Creek Road/Carefree Highway Corridor. Because of the vision of our “White Paper” volunteer committee in 2009 and Mayors/Councils since then, Cave Creek continues to see growth in our sales taxes in part due to new retail developments and many wanting to move into our desirable community. Council has already approved the development of a strategic financial plan for utilities, capacity fees and other fee analyses, and utility rate modification studies.
In 2020 alone, we permitted over $47,000,000 in new construction project valuations which include more than 200,000 square feet of new homes and 114,000 square feet of new commercial building including the new Sprouts Center that celebrated its Grand Opening in February. Other new businesses include Dutch Brothers Coffee, Chase Bank, Sun Devil Auto, and Abrazo Micro Hospital, which is still under construction.
Cave Creek is our home and our community that we love. We will remain good neighbors and support Carefree in time of need. It is time to begin fresh in 2021 and that is what I intend to do as an individual, and as your Mayor. My Council and I are working on the 2021 General Plan, the FY2022 Budget, a long-term water infrastructure program, and a plan to ensure wildfire safety for our community, among so many other important projects and programs for Cave Creek. We look forward to our work ahead and appreciate our community’s support.”