• In 1998, an agreement between the City of Prescott and the Mountain Club was reached. This agreement is in effect today. 

  • • The City provides water, reads meters, and bills individual Mountain Club residents for their water use.

    • The Mountain Club installs, relocates, and maintains water meters to City standards.

    • The Mountain Club owns, installs, and maintains all water lines in its water service area.

• In 2005, the Mountain Club hired CivilTech Engineering to create a detailed Master Plan for renovation of the Mountain Club water system.

  • • No action was taken on that plan for a variety of reasons.

    • This plan will serve as the foundation for a multi-phase, multi-year improvement program.

    • The estimated cost for these improvements in current dollars is approximately $6+ million.

• Costs are accounted for in the annual Mountain Club budget and paid for with property owner annual assessments.

• Water system costs have historically comprised 39%-59% of the Mountain Club annual budget, rising markedly over the past three years.

• The Mountain Club’s water system is currently managed by hard-working volunteers. Outside contractors are hired to perform repairs on the system.

• In 2022, with no serious issues and minimal repairs, the water system costs totaled just under $100,000 and comprised 56% of the total Mountain Club expenses.

• Starting in the Fall of 2023, and most recently in September 2024, the City has periodically sent utility “statements” indicating the amount of water loss and cost for this loss for Mountain Club’s water service area. The total water loss from July 2023 – July 2024 is purported to be 3,924,280 gallons, which the City values at $79,366. 

After months of study, information-gathering and community meetings, the Water Solutions Committee and the Mountain Club Board recommend that we form a Domestic Water Improvement District, or DWID.  

• The DWID’s purpose is to acquire, construct, reconstruct or repair waterworks for delivery of water within the District.

• The DWID is governed by its own Board of Directors comprised of and elected by Mountain Club property owners.

  • • The Board will be responsible for overseeing development, operation, and maintenance of the District’s water system.

    • The Board sets water rates and establishes an annual budget to cover the costs of operation and maintenance.

    • Oversight is provided through Open Meeting laws and annual audits.  Construction is required to be done through a public bidding process.

• Financing of the DWID will come from water usage charges and acquisition of government grants and low-interest, long-term loans. To pay for such financing, assessments and/or property taxes may be levied. See “What Will A DWID Cost Property Owners?” below.

The reasons for forming a DWID are numerous and include:

• The current Mountain Club water system is aging and in need of costly repairs. Three of the most urgent issues facing the Mountain Club today are:

  • • A failing service line crossing private property on Lazy Ln that needs to be relocated to the right of way. Planning for this repair is in progress; the project’s total cost is estimated to be $200,000.

    • A service line on Walnut Rd that is constantly breaking, resulting in costly repairs and significant water loss. The Mountain Club needs to replace 200 feet of 1.5” PVC pipe with 2" ductile iron pipe at the appropriate depth.

    • A service line on Hill Pl that crosses private property and is installed at insufficient depth. The homeowner reports that their line is freezing during the winter. The Mountain Club needs to relocate the service line to the right of way at the appropriate depth.

    • These three repairs, if performed this year, would likely bankrupt the Mountain Club.

• DWIDs are eligible for many grants and low-cost loans that the Mountain Club does not qualify for. Funding available to DWIDs will enable us to pay for long-term improvements to our water system, which will help us:

  • • Have a more reliable water supply - should a significant section of our infrastructure fail, such that repair costs exceed Mountain Club’s available funding, homes may lose water service and water will need to be trucked in as discussed in “What Will A DWID Cost Property Owners?” below.

    • Maintain home values and salability - a reliable water system is good for home values and brings confidence to potential home buyers.

    • Improved safety - the majority of Mountain Club service lines consist of 2" supply lines, which are insufficient to supply a community, let alone a fire hydrant. There are currently only 4 fire hydrants within the Mountain Club water service area, located along the main 6" supply line serving the community. We are on the edge of the Prescott National Forest and fire safety is a high priority. This community needs at least 35 more fire hydrants and supply lines of sufficient size to supply them. In addition, although our water is safe now, we don’t know what the future holds. Water users risk water shut off for health reasons if water lines cannot be properly maintained.

    • Avoid financial catastrophe – helping to prevent a large system failure which could easily exceed Mountain Club’s entire budget and reserves.

    • Avoid paying for water loss – embarking on a major water improvement plan shows that Mountain Club is working to meet the terms of the 1998 agreement with the City. As mentioned previously, the City of Prescott has sent the Mountain Club communications which suggest that they may begin billing the community for water loss.

    • Lower repair costs - once a DWID is formed, water service maintenance will be more efficient and less costly (per linear foot of repair) than if projects are done piecemeal or on an emergency basis.

    • The DWID will provide the lowest cost of operation with the least regulatory oversight (as compared to a water system under the Arizona Corporation Commission).

    • The Mountain Club will no longer need to rely on volunteers to manage the water system.

    • Open Meeting Laws apply to DWIDs, which means full transparency for its members.

    • A DWID will very likely have a better working relationship with the City regarding our water agreement. The city, county, and the Arizona Corporation Commission have all encouraged us to form a DWID.

At this point, we can only make an educated guess based on information available from other DWIDs in Yavapai County.

• The most likely source of funding for water system improvements is through the Water Infrastructure Finance Authority (WIFA). Districts are eligible for grants and substantial subsidized long-term (up to 30 years), low-interest loans (rates between 1.25% - 3.15%, sometimes no interest). Additionally, portions of these loans may be forgivable.

• WIFA example: In 2023, the Town of Florence received a $5,059,900, 20-year loan with an interest rate of 1.739%. If the Mountain Club were to obtain a similar loan, the monthly payment to WIFA would be about $24,000 or $66 per property per month.

• Improvements to the water system will occur over many years. As a result, costs to repay the associated loans will be phased in over many years as well.

• The additional cost would be offset by a reduction in yearly Mountain Club dues, as all water operations costs would be transitioned from the Mountain Club to the newly formed DWID. Assuming a reduction in dues of 50%, that would result in yearly savings to homeowners of $322.

• The total monthly cost of water will almost certainly be higher under a DWID, but the intent is to keep it in a reasonable range. Also, think of the cost as an investment in a secure water delivery system.

Consider a situation in which a large section of the water distribution system in the Mountain Club needed immediate attention and the funds were not available to cover repairs. Residents in that section would need to purchase or haul water until funding became available.  Hauling would require a storage tank, ~$3,000, pump, ~$2,000, and the cost of water delivered by a water hauling company, ~$500/month for about 3,300 gallons (not to mention the cost to connect the storage system to your home). While this scenario may be unlikely, it is possible.