Queen Creek spent nearly $37 million to buy Queen Creek Water Co. but now taxpayers are on the hook for millions more to fulfill developer agreements the private company used to expand the system.

The company entered into "mainline extension agreements," which allowed developers to come to town, put in water infrastructure needed for their projects and recover a small fraction of their costs, said Paul Gardner, Queen Creek water director.

"At the end of the day, because of where the rate structures are, the developer gets back 25 to 40 percent of what they put in," Gardner said.

The agreements generally last 10 years, with the developer being paid from a percentage of water proceeds coming from their project.

There are 130 agreements in place right now, Gardner said.

"We are required to pay the developers back what the company owes them," said Assistant Town Manager Patrick Flynn. "It was a good deal for the company when they did this - they got millions in infrastructure and what they pay back is ultimately less than that."

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