Title
Colorado River, Phoenix Water Supply and Demand Update - Citywide
Description
This report presents the City Council with an update on the City of Phoenix’s water resources planning efforts regarding current drought conditions. Staff seeks authorization for the City Manager, or designee, to enter into Mutual Aid Agreements, as well as any necessary amendments and associated agreements (collectively, “Aid Agreements”), with the City of Tucson, the Town of Cave Creek, the Central Arizona Water Conservation District (CAWCD), relevant Arizona and federal governmental entities, and various on- and off-river Colorado River/Central Arizona Project water entitlement holders in Arizona. These agreements will support participating parties (“Parties”) in addressing water needs arising from future Colorado River shortages.
Further, approval is requested to authorize the City Manager, or designee, to execute water transactional agreements (“Transactional Agreements”) designed to advance the objectives of the Aid Agreements, pending subsequent Council approval of all agreements. Additionally, staff requests that the City Council grant an exception pursuant to Phoenix City Code 42-20, allowing the inclusion of indemnification and assumption of liability clauses within transaction-related documents that would typically be prohibited under Phoenix City Code 42-18.
THIS ITEM IS FOR DISCUSSION AND POSSIBLE ACTION.
Report
Summary
The Colorado River is currently over-allocated and projected to be unable to meet future demand. Water levels at both Lake Mead and Lake Powell have reached critically low points. Notably, this winter’s snowfall was the lowest on record, which will affect water availability in subsequent years. The City of Phoenix relies on Colorado River water to meet approximately 40 percent of its annual customer demand.
The United States Bureau of Reclamation (“Reclamation”) is expected to implement new Post-2026 Colorado River Operating Guidelines (“Post-2026 Guidelines”) effective January 1, 2027. In early 2026, Reclamation released a Draft Environmental Impact Statement outlining multiple decision alternatives, each resulting in significant reductions to water supplies available to the Central Arizona Project (“CAP”) and the State of Arizona. Some scenarios include annual CAP reductions of 1.1 million acre-feet or more. Accordingly, Phoenix Water Services continues to prepare for a range of possible reductions in water allocations from the Colorado River system.
Phoenix’s Preparedness
Phoenix has secured supplemental water sources from the Salt and Verde rivers to offset potential shortages in areas typically served by Colorado River water. Additionally, the City has stored surplus water underground in both the Phoenix and Tucson regions.
Recent infrastructure projects have enhanced resiliency and reliability within the water system. Notable initiatives include the construction of the drought pipeline, enabling flexible distribution of various water sources to northern Phoenix, and the development of new groundwater wells providing access to allocated and stored groundwater.
Beyond expanding water supplies, storing water, and infrastructure investments, Phoenix has consistently promoted water conservation. The City offers multiple conservation programs, including incentives for residential and commercial grass removal, efficiency consultations, and rebates for high-efficiency toilets and irrigation controllers. Moreover, Phoenix departments have developed drought management plans to conserve water while maintaining exemplary municipal services.
Ongoing Preparations
Phoenix Water Services has established strategies to maintain water delivery throughout the next decade, accounting for various potential reductions from the Colorado River. These strategies involve renewable backup supplies from the Salt and Verde river systems, underground water reserves, and groundwater allocations. However, continued program development is required to ensure Phoenix’s long-term sustainability.
New initiatives will include expanded partnerships, such as collaborations with Salt River Project (SRP) and others, to construct the planned enhancement of storage capacity on the Verde River through modifications to Bartlett Dam. Phoenix has also initiated a project to integrate Advanced Purified Water via the Cave Creek Road Water Reclamation Facility. Ongoing refinement of the Drought Management Plan will further strengthen conservation efforts and public education regarding water use.
Collaboratively, Phoenix and other Arizona entities are developing Aid Agreements as frameworks for collective action in response to anticipated reductions. These voluntary arrangements may include regulatory agencies (e.g., Reclamation, Department of Water Resources), water organizations (such as Central Arizona Water Conservation District, Central Arizona Groundwater Replenishment District, SRP, and Arizona Water Bank), tribal communities, municipal water providers, and agricultural entities holding Colorado River and/or CAP entitlements. Some Aid Agreements may be intergovernmental, while additional affiliated agreements may permit participation by private sector stakeholders. Collectively, these agreements may be referred to as the Secure Water Arizona Program.
It is anticipated that Transactional Agreements under the umbrella of the Aid Agreements will enable voluntary movement of water resources among Parties. These agreements aim to address emergency water needs, develop and store water supplies to replace lost Colorado River and CAP water, and promote innovative solutions suitable for the current era of limited CAP water resources.
Phoenix remains committed to ongoing planning, investment, and conservation to ensure uninterrupted provision of safe, reliable water services for customers while advancing sustainability goals. The City will continue proactive measures to address deepening shortages on the Colorado River including planning, acquiring additional water supplies, and constructing infrastructure to facilitate water supply distribution.
Contract Term
The Aid Agreements may have terms of up to 10 years, with authority to approve two five-year extensions. Each Transactional Agreement may span up to 25 years, with similar extension authorization.
Financial Impact
Funding is available from the Water Services Department Water Fund. Council approval for Transactional Agreement expenditures will be sought on a case-by-case basis as agreements are finalized.
Request for Action
Staff respectfully requests City Council approval to enter into water Aid Agreements with partner agencies to further address water needs that may arise from future Colorado River shortages.
Department
Responsible Department
This item is submitted by Assistant City Manager Ginger Spencer and the Water Services Department.