Understanding Marana’s $3.7M water purchase

Marana plans to spend more than $3.7 million to secure water for its residents in 2027, approving a one year contract to lease 4,800 acre feet from the Fort McDowell Yavapai Nation. The purchase is intended to strengthen the town’s water supplies as Colorado River shortages threaten Central Arizona Project deliveries and as the cost of developing new water sources continues to rise. Although the contract is paid through Marana’s water resources development fee rather than regular water rates, the expense is still connected to the cost of building homes and businesses in the community.

Under the agreement, Marana will pay $778 for each acre foot, with transportation included. An acre foot is the amount of water needed to cover one acre to a depth of one foot, and is a standard measurement for municipal water supplies. The full purchase will provide 4,800 acre feet for the year. Fort McDowell Yavapai Nation offered the water through a request for bids issued in May, and Marana submitted the proposal that was ultimately accepted.

The water comes through the Central Arizona Project, the 336 mile canal and aqueduct network that carries Colorado River water to central and southern Arizona. CAP supplies water to more than 6 million people. Tribal nations in Arizona hold long term CAP contracts that resulted from settlements resolving claims to water. Together, those tribal contracts account for nearly half of CAP’s total capacity. Fort McDowell’s lease gives Marana access to water held by the tribe but not needed for its own use during the one year term.

For Marana property owners and businesses, the financial effect is tied primarily to development rather than a direct charge on monthly water bills. Builders and developers pay one time impact fees when constructing in town. Those payments are designed to help cover the costs associated with growth, including the acquisition of water supplies. Marana uses its water resources development fee for purchases such as this one, meaning the $3.7 million contract is funded through the development system rather than the rates charged for everyday water service.

Residents and commercial tenants can still feel the cost indirectly. Developers commonly account for impact fees by raising home prices, mortgage payments or commercial rents. In that sense, people purchasing new homes or occupying new business space help cover the cost of Marana’s water purchases. The fee is specifically intended for water resource development, however, and using it for the Fort McDowell lease helps keep the town from placing the entire expense into regular water rates.

That distinction matters because Marana has already approved substantial increases in its ongoing utility charges. In early 2026, the town ratified a multiyear plan that raises water rates by 10.5 percent each year through 2030. Water reclamation rates are scheduled to increase by 2.5 percent annually during the same period. Those charges pay for daily operations, inflation, infrastructure and other routine expenses. State law prevents impact fees from being used for those purposes, so the separate water rate increases remain necessary even when development fees fund water purchases.

Marana has a more varied water portfolio than some Arizona communities, and currently relies on CAP water for about 15 percent of its supply. That position offers some protection as the state faces a 50 percent reduction in its CAP allocation. Other communities are much more exposed. Cave Creek, for example, depends on the Colorado River for 95 percent of its water. Marana’s lower CAP reliance does not make its water future secure, though, particularly as alternative supplies become more expensive and long term shortages continue to affect planning across the region.

At a Sept. 15 town council meeting, water resources administrator Jerry Huerstel estimated that Marana could be fully dependent on the Central Arizona Groundwater Replenishment District by 2043. CAGRD rates have risen sharply and are continuing to increase, making that scenario costly for the town and its customers. Huerstel described purchases of tribal water with priority rights as a less expensive alternative and a critically important way to reinforce Marana’s portfolio. The Fort McDowell agreement therefore serves two purposes: it provides water for 2027 and builds a relationship with a community that has water available to lease. The immediate contract does not resolve Marana’s longer term supply challenges, but it gives the town another tool as growth, higher rates and Colorado River uncertainty shape its water decisions.