A case study in public-private partnerships that transfer community resources to private developers while forcing existing residents to subsidize the arrangement.
The Infrastructure Cost Allocation
Prescott residents face rising water bills to pay for infrastructure they can’t use, while developers get guaranteed water for their projects. The Big Chino Water Ranch project, with costs now exceeding $261 million [1], splits expenses in a revealing way: twenty percent gets charged to existing residents through higher utility bills, while eighty percent falls to new home buyers through impact fees and infrastructure costs built into home sales [2]. The profit value of being able to develop thousands of tracts goes entirely to the developers.
This cost structure creates a fundamental unfairness. Existing residents pay approximately $52 million for infrastructure that actually limits community-wide water access while enabling massive private development. New residents pay market home prices that include the value of guaranteed water access funded by public infrastructure investment. Developers capture the increased land values created by public water allocation while recovering infrastructure costs through development sales.
Arizona Eco Development receives water allocation sufficient for 850 homes plus resort development, while all other development in Prescott receives limited annual allocations. The numbers reveal the wealth transfer: one private developer receives substantially more water than all other development projects in Prescott combined, while longtime residents fund twenty percent of the infrastructure making this possible without getting additional water allocation themselves.
This analysis supports productive profit from legitimate development and construction. The issue documented here is not profit itself, but extraction mechanisms that transfer publicly-created value to private interests while forcing communities to bear the costs.
Who Pays the Bills • Who Gets the Water • Community Burden • Environmental Destruction • Captured Government & Rejected Science • State-Enabled Extraction • Conclusion
Water Allocation Disparities
Current water policy shows systematic preference for large private developments over community-wide access. The city allocates just 50 acre-feet every six months for all residential projects and 25 acre-feet every six months for all commercial projects—totaling 150 acre-feet annually for all development except projects with existing contracts [3].
An acre-foot equals about 326,000 gallons, enough water for a typical American family for an entire year. To put this in perspective, Prescott’s total annual allocation of 150 acre-feet could serve about 150 families.
Prescott and Prescott Valley together have authorization from the Arizona Department of Water Resources to import 8,068 acre-feet per year from the Big Chino aquifer—that’s enough for over 8,000 families annually. They also have potential for an additional estimated 3,600 acre-feet per year [4]. The City of Prescott holds a 54.1% partnership while Prescott Valley holds 45.9% in water from the Big Chino Water Ranch [5].
Meanwhile, state legislation has systematically weakened the impact fees that should require new development to pay infrastructure costs. Arizona imposed impact fee moratoriums in 2008 and eliminated whole categories of impact fees in 2012, reducing cities’ ability to collect adequate funding from growth [6]. Cities responded by shifting infrastructure costs to existing residents through utility rate increases rather than limiting development to match available revenue.
This policy setup creates conditions where existing residents subsidize infrastructure for new development while receiving limited access to the water resources they help fund. The arrangement transfers wealth from longtime community members to private developers and new residents who benefit from infrastructure investment without bearing fair costs.
Impact on Residents
Longtime residents experience a double burden: rising utility costs and limited community water access, while families who have lived in Prescott for decades or generations built the community’s tax base, civic institutions, and social infrastructure that makes the area attractive for development. Their investment in community building now gets used to fund private development deals that reduce rather than expand local water access.
The cost burden hits hardest on residents with fixed incomes, older community members, and families with long-term ties to the area. These residents can’t easily relocate when costs rise, making them a captive revenue source for infrastructure deals they didn’t approve and don’t benefit from.
Rising water bills represent more than increased household expenses. They constitute a systematic transfer of wealth from community members who built local institutions and maintained environmental stewardship to private interests extracting value through politically connected development arrangements.
The social infrastructure that longtime residents created—volunteer organizations, local business networks, civic engagement, environmental conservation—enabled the community development that now works against their economic interests. The extraction mechanism treats community-building investment as a resource to be consumed rather than capacity to be preserved and enhanced.
Environmental Consequences
The Big Chino Water Ranch project threatens the Verde River, Arizona’s last major free-flowing waterway.
U.S. Geological Survey research shows that approximately eighty percent of the Verde River’s base flow (the minimum water that keeps it flowing year-round) comes from Big Chino aquifer groundwater [7]. Legal permits authorize extracting up to 18,000 acre-feet annually from the aquifer—more water than the river’s current base flow of approximately 14,500 acre-feet annually [8].
When extraction reaches authorized levels, Verde Springs will stop flowing and the upper twenty-five miles of the river will become intermittent, flowing only after storms. This represents permanent environmental loss affecting ecosystems, recreation economies, and water supplies serving over two million Phoenix-area residents downstream [9].
The environmental destruction extends beyond immediate ecological damage. The Verde River system provides natural water storage, flood control, and groundwater recharge that would cost hundreds of millions to replace with engineered infrastructure. Converting the river system to a dry wash eliminates these natural services while requiring expensive technological substitutes.
Climate change and prolonged drought make the environmental stakes even higher. Arizona faces permanent reductions in Colorado River allocations [10], making sustainable management of remaining water resources essential for long-term community survival. The Big Chino extraction represents water mining rather than sustainable development, depleting aquifer resources faster than natural recharge rates.
Government Capture Mechanisms
Private development interests gain unfair political access through business organization leadership and strategic civic participation.
Multiple special study sessions with the Prescott City Council provide extended presentation opportunities to development companies, while ordinary residents get three minutes of public comment [11]. This access gap enables private interests to shape policy discussions and negotiate favorable arrangements unavailable to community members with limited civic participation time.
Local Rejection of Federal Science
During 2007–2009, Mayor Jack Wilson declined to participate in the regional, federally backed Central Yavapai Highlands Water Resources Management Study (CYHWRMS) process and withdrew from the Verde River Basin Partnership’s science-driven workstreams [12][13]. The CYHWRMS effort was created to provide a shared appraisal of current and future water supply and demand and to evaluate alternatives—its early findings showed that by 2050, potential future demands could exceed supplies by tens of thousands of acre-feet [14]. By stepping away, Prescott cut itself off from the only impartial regional framework quantifying those projected shortfalls.
Instead, Wilson and the city leaned on reports promoting the so-called “clay plug” theory—claiming a geologic barrier separates the Big Chino aquifer from the Verde River—despite hydrologists having already discredited it [15][16][17]. Publicly, Wilson argued that a mitigation plan for Big Chino pumping was unnecessary, citing the city’s internal modeling to assert no harm to the river [18]. The substitution of conflicted local consultants and internal models for independent federal science locked Prescott into a denialist position that justified extraction while isolating the city from collaborative planning with neighboring communities.
This episode shows capture does not rely only on lobby access or money; it also operates through control over which science becomes “official.” By discarding inconvenient federal research and legitimizing a debunked theory, city leadership structured public understanding around a false narrative that served development interests over community sustainability.
The charter amendment requiring public votes on expenditures exceeding $40 million was specifically enacted to address the Big Chino situation. Yet city officials claim the requirement doesn’t apply because the project started before the amendment [19]. This interpretation sidesteps the democratic accountability mechanism residents established through direct voting.
State-Level Enablers
Arizona state government systematically created the framework that makes extractive arrangements like Prescott’s predictable. This represents a chronic, decades-long campaign to remove community control over water and development decisions.
The Preemption Infrastructure
Since 2016, any single Arizona legislator can threaten to withhold millions in state funding from cities through SB 1487 complaints filed with the Attorney General [20]. Cities like Bisbee and Tucson have repeatedly capitulated to state demands rather than risk bankruptcy, creating a pattern where communities cannot effectively resist extraction projects [21].
The architect of much of Arizona’s water policy exemplifies the systematic conflicts driving this extraction. Rep. Gail Griffin has served as Chairman of the Natural Resources, Energy and Water Committee while working as a real estate broker for over 40 years [22]. Griffin sits on the Water Banking Authority and sponsors legislation systematically weakening community water protections while her real estate business directly benefits from development-friendly policies.
Legislative Warfare Against Municipal Authority
Arizona’s legislature destroyed municipal tools for making development pay its costs through a systematic campaign:
- HB 2008 (2009): Retroactive 3-year impact fee moratorium during recession [23]
- 2012 legislation: Eliminated categories of impact fees entirely [24]
- SB 1525 (2014): Weakened remaining municipal impact fee authority [25]
This forced cities like Prescott to choose between limiting growth and shifting infrastructure costs to existing residents – exactly the cost-shifting pattern seen in the Big Chino deal.
Restricting Community Resistance
When communities attempt to protect themselves through ballot initiatives, the legislature systematically restricts those tools:
- Proposition 134 (2024): Signature distribution requirements making statewide initiatives nearly impossible [26]
- 2017 law: Banned pay-per-signature for initiative petition circulators [27]
- Proposition 129 (2022): Single-subject rule limiting initiative scope [28]
Financial Capture of Water Policy
The state now controls over $1 billion in public funding for “water infrastructure” through the Water Infrastructure Finance Authority, which often serves private development projects while residents pay utility rate increases [29]. Meanwhile, the same legislators who weakened impact fees ensure state water funding flows to extraction projects rather than community capacity building.
Regional Extraction Context
Prescott’s water deals serve broader metropolitan growth needs while extracting resources from rural communities. Yavapai County had the fastest rural population growth in the United States, with projections showing population doubling by 2050 [30]. This growth serves Phoenix metropolitan area expansion limited by urban water restrictions and Colorado River allocation cuts.
In 1999, Arizona declared Prescott was “mining” groundwater, which would have restricted new subdivisions. During the legal window between tentative and final declarations, Yavapai County issued plats for 32,106 homes—enough to double the management area’s population. About two-thirds were approved in just four months to beat the water restrictions, creating enormous development pressure that drives current extraction projects like Big Chino.
The Verde River watershed supplies clean drinking water to over two million Phoenix-area residents, making rural water sources strategically valuable for metropolitan development [31]. Arizona maintains strict groundwater rules in urban Active Management Areas while leaving eighty percent of the state—primarily rural areas—without groundwater regulation. This different-rules-for-different-areas approach enables extraction flows from unprotected rural communities to water-constrained urban areas through infrastructure projects and state-enabled arrangements like Prescott’s.
This systematic state-level framework makes local resistance to extraction nearly impossible while ensuring private developers can capture public water resources with minimal costs. Prescott’s residents fund infrastructure they cannot use because Arizona state law is designed to enable exactly these arrangements.
Conclusion
Prescott’s water arrangements demonstrate how wealth extraction operates through seemingly routine municipal infrastructure projects. The combination of cost-shifting to residents, preferential allocation to private developers, rejection of federal science, and state policies that weaken local control creates a systematic transfer of community resources to private interests.
These mechanisms follow patterns documented across American communities, where government officials partner with private interests to socialize costs while privatizing benefits—a systematic approach analyzed in “The Great Transfer: American Government as a Wealth Extraction Machine” [32]. The deals also illustrate how extraction undermines productive capacity by consuming natural resources and community wealth to serve short-term private profits rather than building long-term prosperity, as detailed in “Assault on America: Dismantling the Productive Economy” [33].
The arrangements consume rather than build community capacity. Environmental destruction, rising costs for existing residents, and reduced democratic control weaken the foundations that originally made Prescott attractive for development. The deals extract value from decades of community investment while limiting future water access and environmental sustainability.
Prescott’s case reveals the specific techniques used to accomplish wealth transfer: splitting infrastructure costs to burden existing residents, creating allocation disparities that favor connected developers, controlling scientific narratives to justify environmentally destructive projects, and using state policy frameworks that systematically advantage private development over community interests.
Communities elsewhere face similar arrangements presented as economic development or infrastructure modernization. Corpus Christi residents successfully defeated a comparable $1.2 billion desalination project through organized resistance, demonstrating that these deals can be stopped when communities understand the extraction mechanisms and coordinate effective opposition.
Prescott’s 2025 city council elections demonstrate that extraction arrangements face growing political resistance. Jay Ruby, campaigning on water protection with the slogan “Vote for Water,” advanced to the November runoff along with all other candidates after none received the required majority in the August primary [34]. The general election will test whether voters choose candidates with authentic water conservation commitments or those whose campaign promises may contradict their past positions [35].
Prescott’s water deals show both the systematic nature of state-enabled extraction and the potential for organized community resistance to challenge these arrangements.
Sources and Further Reading
[1] Daily Courier. “Updated Big Chino Water Ranch cost projections in $261.6M range.” April 24, 2024. https://www.dcourier.com/news/updated-big-chino-water-ranch-cost-projections-in-261-6m-range/article_9a8b9d5a-01d6-11ef-bda3-8f8f03183531.html
[2] Citizens Water Advocacy Group. “Big Chino Water Ranch.” https://cwagaz.org/index.php?option=com_content&view=article&id=172&Itemid=457
[3] City of Prescott. “Water Policy.” July 2, 2025. https://prescott-az.gov/water-resource-mgmt/water-policy/
[4] Citizens Water Advocacy Group. “Big Chino Pipeline.” https://cwagaz.org/index.php?option=com_content&view=article&id=381&Itemid=849
[5] City of Prescott. “Big Chino Water Ranch Project.” November 7, 2024. https://www.prescott-az.gov/water-sewer/water-management/big-chino-water-ranch-project/
[6] City of Prescott. “Mayor Monthly Letter for August 2024.” October 15, 2024. https://prescott-az.gov/mayor-monthly-letter-for-august-2024/
[7] Friends of the Verde River. “Geologic Framework of Aquifer Units and Ground-Water Flow Paths, Verde River Headwaters, North-Central Arizona.” February 1, 2018. https://verderiver.org/geologic-framework-aquifer-units-ground-water-flow-paths-verde-river-headwaters-north-central-arizona/
[8] Citizens Water Advocacy Group. “Big Chino Water Ranch.” https://cwagaz.org/index.php?option=com_content&view=article&id=172&Itemid=457
[9] Arizona Public Radio (KNAU). “The Battle Over Big Chino Water Continues.” April 1, 2010. https://www.knau.org/knau-and-arizona-news/2010-04-19/the-battle-over-big-chino-water-continues
[10] High Country News. “Arizona faces a reckoning over water.” March 20, 2025. https://www.hcn.org/articles/water-arizona-faces-a-reckoning-over-water/
[11] Center for Biological Diversity. “Analysis: Prescott’s Water Plan Promotes Sprawl, Threatens Arizona’s Upper Verde River.” February 24, 2020. https://biologicaldiversity.org/w/news/press-releases/analysis-prescotts-water-plan-promotes-sprawl-threatens-arizonas-upper-verde-river-2020-02-24/
[12] U.S. Bureau of Reclamation, Phoenix Area Office. “Central Yavapai Highlands Water Resources Management Study (CYHWRMS).” Summary page. https://www.usbr.gov/lc/phoenix/programs/CYHWRMS/CYHWRMSStudy.html
[13] Arizona Law Review 51(1):175. “The Battle to Save the Verde: How Arizona’s Water Law Could Destroy One of Its Last Perennial Rivers.” https://arizonalawreview.org/pdf/51-1/51arizlrev175.pdf
[14] Citizens Water Advocacy Group. “Central Yavapai Highlands Water Resources Management Study — Phase 1 results.” https://cwagaz.org/videos/cyhwrms
[15] High Country News. Tony Davis. “The Battle for the Verde: Will a new pipeline dry up one of the West’s last free-flowing streams?” May 14, 2007 (republished Jan. 24, 2024). https://www.hcn.org/issues/issue-346/the-battle-for-the-verde/
[16] Citizens Water Advocacy Group. Bulletin #2 (July 8, 2009): “Claim #3: A geologic barrier (‘clay plug’)…” https://cwagaz.org/images/Reports/CWAG/Bulletin2.pdf
[17] Citizens Water Advocacy Group. “Expert opinion on pumping groundwater and the Verde River.” https://cwagaz.org/images/Reports/RefLib/Expert-PumpingGW-Verde.pdf
[18] Daily Courier (via Center for Biological Diversity archival PDF). “Prescott-area officials discuss Big Chino pipeline mitigation plans.” Mar. 12, 2009. https://www.biologicaldiversity.org/news/media-archive/PrescottWater_DailyCourier_3-12-09.pdf
[19] Citizens Water Advocacy Group. “Big Chino Water Ranch.” https://cwagaz.org/index.php?option=com_content&view=article&id=172&Itemid=457
[20] Yale Journal on Regulation. “State Preemption: Arizona vs. Local Control.” September 5, 2016. https://www.yalejreg.com/nc/state-preemption-arizona-vs-local-control/
[21] Arizona Agenda. “The most anti-city law, five years later.” March 18, 2022. https://arizonaagenda.substack.com/p/the-most-anti-city-law-five-years
[22] Ballotpedia. “Gail Griffin.” https://ballotpedia.org/Gail_Griffin
[23] Arizona Free Press Institute. “Prescott’s ‘Kick the Can’ Game with Development Impact Fees.” https://azfpi.org/growth/prescotts-kick-the-can-game-with-development-impact-fees/
[24] City of Prescott. “Mayor Monthly Letter for August 2024.” October 15, 2024. https://prescott-az.gov/mayor-monthly-letter-for-august-2024/
[25] Arizona Free Press Institute. “Prescott’s ‘Kick the Can’ Game with Development Impact Fees.” https://azfpi.org/growth/prescotts-kick-the-can-game-with-development-impact-fees/
[26] Ballotpedia. “Arizona Proposition 134, Signature Distribution Requirement for Initiatives Amendment (2024).” https://ballotpedia.org/Arizona_Proposition_134,_Signature_Distribution_Requirement_for_Initiatives_Amendment_(2024)
[27] Ballotpedia. “Laws governing the initiative process in Arizona.” https://ballotpedia.org/Laws_governing_the_initiative_process_in_Arizona
[28] Ballotpedia. “Laws governing the initiative process in Arizona.” https://ballotpedia.org/Laws_governing_the_initiative_process_in_Arizona
[29] Office of the Arizona Governor. “Governor Ducey Signs Legislation to Secure Arizona’s Water Future.” July 6, 2022. https://azgovernor.gov/governor/news/2022/07/governor-ducey-signs-legislation-secure-arizonas-water-future
[30] U.S. Geological Survey. “Aquifer storage-change monitoring in the Big Chino Subbasin, Yavapai County, Arizona.” https://www.usgs.gov/centers/arizona-water-science-center/science/aquifer-storage-change-monitoring-big-chino-subbasin
[31] Arizona Public Radio (KNAU). “The Battle Over Big Chino Water Continues.” April 1, 2010. https://www.knau.org/knau-and-arizona-news/2010-04-19/the-battle-over-big-chino-water-continues
[32] The Great Transfer: American Government as a Wealth Extraction Machine. https://dittany.com/the-great-transfer-2025-government-wealth-extraction/
[33] Assault on America: Dismantling the Productive Economy. https://dittany.com/assault-on-america-dismantling-productive-economy/
[34] Ballotpedia. “Jay Ruby (Prescott City Council At-large, Arizona, candidate 2025).” https://ballotpedia.org/Jay_Ruby_(Prescott_City_Council_At-large,_Arizona,_candidate_2025)
[35] Arizona Free Press Institute. “Behind the Curtain Part II: Prescott’s Election.” https://azfpi.org/water-conservation/behind-the-curtain-part-ii-prescotts-election/