Scottsdale adds new layer of water security with Harquahala credit purchase

Scottsdale is taking another step to strengthen its long-term water future.

The Scottsdale City Council approved the purchase of 15,000 acre-feet of Long-Term Storage Credits during its June 23 meeting, adding to the city's reserve of water assets and further diversifying its water portfolio. The $8.25 million acquisition will increase Scottsdale's inventory of stored water credits to nearly 293,000 acre-feet.

The credits represent water stored underground that can be recovered for future use or retained indefinitely as part of Scottsdale's drought preparedness strategy. The credits were generated through the storage of Central Arizona Project water and are located in Arizona's Harquahala Valley.

The purchase comes as Arizona communities continue planning for ongoing uncertainty in the Colorado River Basin and future reductions in river supplies.

"Scottsdale has never taken a wait-and-see approach to water," City Manager Greg Caton said. "For decades, we've planned ahead, diversified our resources and invested in strategies that protect our community from future uncertainty. This purchase not only adds to our long-term reserves, but it also expands the diversity of our water portfolio by securing additional assets in a different part of the state."

Long-Term Storage Credits, often referred to as LTSCs, function much like a water savings account. When water cannot be immediately used, it can be stored underground through authorized recharge programs. The Arizona Department of Water Resources tracks those stored supplies as credits that can later be recovered, transferred or sold. Once recovered, the credit is redeemed and removed from the account.

Scottsdale currently maintains approximately 277,691 acre-feet of Long-Term Storage Credits, making it one of the region's largest holders of stored water reserves. While the purchase increases the city's overall inventory of stored water credits, its significance extends beyond the additional volume. Because the credits are located in the Harquahala Irrigation Non-Expansion Area west of Phoenix, they further diversify Scottsdale's water portfolio by adding stored supplies outside the metropolitan area and align with the city's existing water rights in the region.

"Long-Term Storage Credits provide flexibility, resilience and additional protection against future supply challenges," said Interim Senior Director of Water Resources Thyra Ryden-Diaz. "These credits never expire and can be held indefinitely, giving Scottsdale another valuable tool to manage its water resources strategically while preserving options for future generations."

The credits are located in the Harquahala Irrigation Non-Expansion Area west of Phoenix. Under Arizona law, groundwater associated with those credits may be transported into an Active Management Area, creating opportunities for Scottsdale to diversify its water portfolio beyond traditional supplies within the Phoenix metropolitan area.

The purchase aligns with Scottsdale Water's long-range planning efforts and the city's Water Strategic Plan, which calls for continued diversification of water resources and preparation for a range of future shortage scenarios.

Scottsdale's water portfolio currently includes supplies from the Central Arizona Project, Salt River Project, groundwater wells and water reuse programs.

The purchase price of $8.25 million equates to $550 per acre-foot. Funding will come from the Water Fund Capital Improvement Program contingency and will be transferred to a newly created capital project dedicated to the acquisition.

"Water reliability is foundational to Scottsdale's quality of life and economic vitality," Caton said. "By continuing to expand our options today, we're helping ensure Scottsdale remains resilient and prepared for whatever challenges the future may bring."