Water is big issue in the Rio Verde Foothills, as it is across the Southwest, and it is only going to become more so as the area continues to develop.
The Rio Verde Foothills area does not have city water services so residents have to make due with either well water or pay a service to truck water in and fill holding tanks.
Although the Rio Verde master planned communities (Rio Verde, Tonto Verde and Vista Verde) are also unincorporated areas, they enjoy water and sewage service from Rio Verde Utilities Inc. but there are no stated plans for this service to extend to the greater foothills area at the higher elevations, as the current economics make that impractical.
According to the US Drought Monitor, Central Arizona is currently in a Severe Drought (shown in orange in latest graphic shown below) which has become significantly worse over the last year.
Depending on where they live, and the land-owners means to pay for a well deep enough to reach water , Rio Verde residents are serviced either with a well, hauled water or a combination of both.
For the residents lucky enough to have access to a well, they will either have a dedicated well or a shared well. If it is a shared well, Maricopa County must typically approve a Well Share Agreement before granting a permit to build a residence. This agreement can be considered a mini-HOA and basically binds all users of that well under a contract that relates to the well use. The main points of well share agreement typically involve the following:
- Assignment of a well administrator (equivalent to an HOA board).
- The specific parcels of land which share the well
- Allowed uses of water
- Prohibited uses of water
- Definition and treatment of operating expenses
- Definition and treatment of maintenance expenses
- Ability to put a lean on parcel members if they don’t pay their fair share, etc.
Use Within Parcels. The owners of each Parcel shall have the right to take water from the Well for their reasonable domestic use on each respective Parcel only and only so long as the obligations created herein are performed in a timely manor. No Owner shall provide water to any other owner on or off the subject property, not to cause to be divided in any manner or assign the rights of this Agreement without the express written consent of all other Owners of the Parcels.
Domestic Use. The Owners agree that no water shall be used for commercial purposes, but only for their private domestic use including vegetable gardens and livestock maintenance. Domestic use may include maintenance of ponds or swimming pools, which are constructed with an impervious liner to prevent leakage. However, initial filling of lined ponds or swimming pools with a capacity larger than 500 gallons shall be with water delivered by water truck from a separate source.
Operating Costs. The responsibilities for payment of Well "Operating Costs" shall fall only to those Parcel Owners who are active water users. Such Operating Costs shall include, but not be limited to, electrical service to the well pump.
Many wells are either going dry due to dropping ground water levels and/or excessive water use by land owners. This typically requires well administrators to purchase hauled water to supplement the domestic water use of the members. The question is how should a well share administrator treat the expense of hauled water for a partially producing well?
Here is a detailed analysis of just such an issue for some actual Rio Verde Foothills residents who share a well. The names of the parcel owners have been changed to protect their identifies but the actual data for water usage and costs are real. The issues should be relevant to everyone who has a producing well but still needs to purchase hauled water to supplement their use.
In this example, there are four parcel owners who actively share the well. We will refer to them by their fictitious last names of Napp, March, Fletcher and Ziff.
Cost Sharing Method 1:
Each month, they pay a water company to fill the holding tank of the well if the water level drops below a certain value. The well share members then split the expense for the hauled water based on their potion of usage as an operating expense (based on monthly meter readings) as well as other operating expenses such as electrical. If the well were to break and require repair, then that would be a maintenance expense and divided equally between the members.
The graph below shows the water usage for each member in gallons / month through the beginning of the record ( July/07).
Fletcher is consistently has the highest water use followed by Ziff, March and then Napp as shown by the table and pie chart.
By looking at the usage graph (below), it may come as no surprise but Fletcher and Ziff both has swimming pools and Fletcher has a negative edge pool. This is a pool which has a portion of the wall which lets water spill over it so as to create the illusion of having no edge. While elegant, it also promotes the evaporation of water which explains Fletchers higher usage. The seasonal fluctuation in Fletchers usage can further be explained by the summer time temperatures which can exceed 110 degrees in Rio Verde and greatly accelerate evaporation.
As we know the total water usage for each member from the monthly meter readings we just need to subtract the total amount provided by the water company to get the actual (ground water) well production. Using the number of drops (loads) along with the total gallons per load we can calculate that and come up with the graph below. This is a stacked graph which shows the portion of total water use that is naturally produced by the well (in blue) along with the portion of use that is covered by hauled water (in yellow).
Further analysis shows that the well produces an average of 21,038 gallons / month over the last 27 months. Some months it is more an some months it is less.
If the total monthly water use was kept below this number (21,038 on average) then the cost of hauling water could be avoided or at least significantly reduced. So, in effect, the low capacity users are paying a portion of the higher capacity water bill since if all users were below their share of the natural well production, there wouldn’t be an additional charge for hauling water.
Now the question becomes, given this data, what is the equitable distribution of costs for the supplemental hauled water.
Cost Sharing Method 2:
One approach is to allocate each member a quarter share of the natural production (in this case, 5,259 gallons). We see that Napp and March are well below this number while Ziff is slightly above it and Fletcher is significantly above it for the reasons stated above.
If we use 5,259 gallons as the baseline fora quarter share of the natural well production and grant each member an allotment based on that, we can calculate the amount that each user goes over that allotment and then distribute the costs of the hauled water based on those overages. In doing so, we come up with the overages graph below:
This is graph may seem a little tricky to interpret but really it is quite simple. It is a stacked graph which shows how much each user was either over or under their baseline allotment. Members that are below the zero line used less than their allotted share by the amount shown. Members who’s color is above the zero line exceeded their allotment by the amount shown. As it is a stacked graph, it should be interpreted as Fletcher being the largest user even though Ziff’s color (yellow) is sometimes at the top of the graph. It is the area of the color which shows the usage rather than it’s vertical position in the stack. The graph below shows the same thing but in a traditional bar graph that is not stacked, which may be easier to understand.
Using this graph, we can then calculate the percentage of liability for the operating costs for all members who have exceeded their allotments based on excess rather raw usage. In doing so we come up with a new payment schedule where the higher users pay a majority of the water charges and the lower users only pay when they go over their allotment. This seems a more equitable distribution of the water charges.
The main challenge with the above analysis Chart 5. is that the baseline well production of 21,038 gallons will vary month-to-month (as shown in Chart 3) so even if everyone is well bellow that number, some months there will be a water charge and we need a way to distribute those charges.
Cost Sharing Method 3:
A better approach may be to calculate the well production each month, rather than an annual baseline, and then charge members for their share of the excess usage. This may be a little more involved but it really uses the simple number of total well usage for the month minus hauled water to get natural production, divided by four. Then each members usage above that number is what is used to calculate charges. If a member is not above their share, then they don’t get charged for water (but still pay for standard expenses such as electrical meter and any required maintenance).
Using this method we come up with the following numbers which measure the water overages. You will notice more variation as we are measuring against the additional variable of natural well production (Chart 3) which is ultimately fairer.
So, we have three approaches to sharing the cost of the hauling supplemental water for a producing well.
Cost Sharing Methods:
- Pro rata share of expenses based on raw water consumption.
- Pro rata share based on excess above an average baseline of water consumption.
- Pro-rata share based on excess above the month-to-month natural well production.
Comparing the financial impact of the different approaches to each of the members shows a significant variation in how much each member is charged over the life time of the well. Here is a break down of how much each member would have paid out of the total charges of $7,800 over the 27 months of records we have for this well.
From this was can see that there are a number of ways to approach the equitable distribution of operating costs for a shared well. The important thing is that the well share members have accurate data to base any decision off of as well as an open and positive dialog between them to agree on the best arrangement for all members.
If you would like professional assistance doing this type of analysis on your well, whether you have the raw data or not, we can help you do that for a very reasonable fee. Contact me at email@example.com and we can outline the process.