PAYSON - The East Verde River gurgled to life near the foot of the Mogollon Rim a few weeks ago, cutting a wet path toward the Mazatzal Wilderness the way it does in the early spring when the snow is still deep.

Except this was late April and the snow, what little had accumulated during a dry winter, was long gone.

Payson's water supply gets boost

The source of the water was C.C. Cragin Reservoir, a small storage project built by a mining company in the mountains 25 miles north of Payson. It had sat largely unused for years as the company's needs changed, even as towns in the reservoir's shadow scrimped and saved to stretch their shrinking water supplies.

The gurgling water was the first hint that change was coming, that the reservoir would become more than a good place to fish. Salt River Project, which provides water to cities and farms in metro Phoenix, acquired Cragin in February 2005 and began $13.3 million worth of renovations.

The water will be added to SRP's existing resources and will allow the utility to expand its base of water users. It signed as its first Cragin customer the town of Payson, which will build a 15-mile delivery pipeline with enough capacity to someday serve other towns in the area.

For the next few months, the East Verde will carry water out of the reservoir and down into Phoenix, lowering water levels by about two-thirds so SRP crews can reach a subsurface tunnel and finish the upgrades on the 45-year-old infrastructure.

More important, the river will carry the promise of a renewable water supply for thirsty downstream communities that have never had one, easing some of the intense pressure on Arizona's depleting rural groundwater.

"I don't know of anyone in rural Arizona that will have an assured water supply like ours," said Buzz Walker, Payson's assistant public-works director for water. "I don't think a lot of people thought that a small town could do something like this."

An engineering feat

Payson's pipeline will cover some rugged country, but as an engineering feat, it barely compares with the Rube Goldberg mechanics of Cragin Reservoir, which seems almost free of straight lines, from its gently curved dam to its delivery system to its very reason for being.

In the early 1960s, Phelps Dodge needed water for its copper mines at Morenci, 200 miles southeast of Payson in Greenlee County. The company wanted to use water from the Black River, near its Morenci mine, but the Black was part of the Salt River system, whose water rights SRP owned.

The company proposed a swap: It would take the Black River water and replace it with water from a source outside SRP's service area. The source: East Clear Creek, a tributary to the Little Colorado River. Phelps Dodge agreed to build a reservoir on the creek and find a way to deliver the water to SRP as long as the company needed the Black River water.

What was then called Blue Ridge Reservoir filled behind a dam above the Mogollon Rim. Phelps Dodge had to move the water down the Rim into the East Verde River, which empties into the main-stem Verde, one of SRP's primary water sources and a conduit to Horseshoe Lake north of Phoenix.

The company started work on a tunnel, but the ground was too unstable, so a slightly less-direct solution was devised. Water would flow from the reservoir through a 3,500-foot tunnel. Eight electric pumps would draw the water up a 435-foot shaft in the rocks and then through a pipeline to the East Verde.

Before emptying into the river, the water would turn the turbines of a small hydroelectric-generating plant that would produce enough electricity to operate the pumps at the top of the system. The plant's output is sent back uphill to the pumps on a dedicated power line that allows the water to, in effect, move itself.

The project was completed in 1965 for a final cost of $7.2 million. Included in the final agreements was a section that allowed SRP the option to buy the project if Phelps Dodge decided to sell it.

"The system Phelps Dodge left us is incredible," said Tom Sands, an SRP engineer and the Cragin project manager. "The equipment right now is working better than it ever has. We feel very good that this system will be as reliable as it's ever been."

Fixing the system

As a water source, Cragin has long been unusually reliable. The high elevation, about 6,700 feet above sea level, and favorable geography help produce a steady source of runoff, even when winters are dry elsewhere.

"It gets a lot of snow on the backside of Baker Butte," Sands said. "It's amazing how often it fills."

That's bubbling music for a water provider and one of the things that made Cragin so attractive to SRP. The fact that the project is already connected to SRP's Verde River system added to its value when the opportunity arose to purchase it.

Phelps Dodge had not regularly used the reservoir or its water for 10 years or more, having secured other sources and agreed in 2005 to sell the project to SRP, which renamed it after a former executive.

SRP officials knew the dam, reservoir and waterworks would require upgrades and renovations, and the work started almost as soon as the ink had dried on the agreement by SRP to take it over, which required congressional approval and amendments to state water rights, a process that was completed late last year when Payson acquired its water rights.

The dam was in good shape and required minor work. A gently curving concrete arch, it sits wedged between steep canyons littered with scrub and rocks. The reservoir's horseshoe wraps around a pine-studded mountain landscape; the views are jumbo-size picture postcards.

SRP plans work on the tunnel that carries water out of the reservoir, but most of the rehab action has been on the intricate system of pumps, pipelines and the powerhouse, located off a gravel road about 13 miles northeast of Payson.

The 10-mile, 33-inch steel pipeline that moves water from the reservoir to the East Verde required $5.4 million in repairs, including replacement of 22 above-ground segments. The pumping plant needed about $2 million in repairs, including replacement of three of the eight pumps. The hydropower system cost about $2.5 million to renovate.

Payson agreed to pay a percentage of the upgrade costs based on its share of water from the reservoir, and any other towns or water providers that tap into Cragin will do the same. SRP will cover the remaining costs as the price of supplementing its water resources.

"Phelps Dodge hadn't done much with it for about 10 years," Sands said. "Our priority has been fixing the pipelines. Now, the priority is running the system and getting it ready for Payson to take the water."

More to be done

Payson will start its work where SRP leaves off, at the East Verde River near Washington Park. The plan is to hook into the existing system and string 15 miles of 18-inch pipeline down to a yet-unbuilt water-treatment plant.

Walker said work will start at the connecting point this fall, with a construction schedule that should allow the first water to be delivered to residents in mid-2015. The projected cost is $33 million. The town will pay for the project using federal loans and grants to supplement water impact fees and money from water rates.

Payson's agreement with SRP includes the right to take an average of 3,000 acre-feet a year, a number that could fluctuate if the reservoir fails to fill. An acre-foot is 325,851 gallons, enough to serve two average households for one year.

That's more than enough water to cover Payson's anticipated needs through at least 2030, a luxury for a town that has struggled on a more meager groundwater supply. The limits have turned Payson into a model of water use: Residents use about 79 gallons a day each, less than one-third the most water-efficient cities in metro Phoenix.

Walker and the town's other leaders achieved those results with some of the strictest conservation rules in the state. Few homes have lawns or pools, and businesses install stingy fixtures, including waterless urinals. The town has no plans to ease its conservation rules once the Cragin water is available.

"We've had no problems at all with our conservation efforts," Walker said. "There just isn't a big demand here for people to have grass yards or pools."

Walker said a few residents have questioned the need for such an expensive project, worrying that it will encourage new growth. But, he said, doing nothing could push Payson closer to water shortages and would create uncertainty for new businesses.

"If we were to become a water-short town, the value of the existing homes would go down," he said.

So far, only Payson has signed on to take Cragin water, but other communities are in talks with SRP and with Payson, which will have room in its pipeline to help move additional water.

SRP has set aside 500 acre-feet initially for other customers, said Dave Roberts, manager of SRP's Water Resource Management division. He said the water could be moved through Payson's pipeline, taken directly from the East Verde River, or SRP could agree to an exchange not unlike what it did with Phelps Dodge.