City water officials briefed the City Council on Tuesday, outlining a plan they say is necessary but not a sign that taps will run dry. Max Wilson, the city's water resource management advisor, said the river situation is grave.

"We're looking at very significant cuts starting next year. Those cuts could get much worse," Wilson said. "We don't mean you're going to go to your faucet and no water is going to come out. We mean that we are going to have to start changing our operations."

Phoenix has been in Stage 1, a Water Alert, since June 2022. Stage 2, a Water Warning, is activated when normal supplies become insufficient and the city needs additional resources or demand-reduction measures. Water Services Director Brandy Kelso also addressed the council session.

The immediate driver is a new federal operating framework for the Colorado River that will cut deliveries to Lower Basin states by 1.25 million acre-feet annually in 2027 and 2028. Under a proposed sharing agreement, Arizona would absorb 760,000 acre-feet of those reductions. Phoenix draws about 40% of its drinking water from the Colorado River, and the city says those deliveries could fall by roughly 30%.

Recent heavy rainfall has boosted storage in the Salt and Verde River system, but city officials say that does not erase the Colorado River reductions. Wilson said Phoenix has been building backup supplies and pursuing new water sources, though many long-term projects will take years to fully come online.

To manage demand in the near term, the city plans a temporary drought surcharge on customers who use higher amounts of water. Bills are charged by units, with one unit equal to 748 gallons. The surcharge would be $2.10 per unit above monthly thresholds: 20 units for residential customers, 300 units for commercial customers and 15,000 units for industrial customers. It would apply only to usage above the threshold, not to a customer's entire bill, and would take effect only if Stage 2 is declared.

Wilson said most households and businesses would not be affected. "For the average homeowner or renter or business owner, the answer is this isn't going to mean anything for you," he said.

Based on current usage, the city estimates the surcharge would hit about 16% of residential monthly bills, 7% of commercial bills and 1% of industrial bills. Preliminary modeling suggests it could generate roughly $40 million, money the city says would fund conservation programs and additional water supplies, including the Bartlett Dam expansion.

The Stage 2 plan also calls for residents and businesses to voluntarily cut water use by 5%, while city departments would reduce their own use by 10%. The city is expanding no-cost water-efficiency consultations and increasing conservation incentives: the grass-removal rebate would rise from $2 to $4 per square foot, the smart irrigation controller incentive from $75 to $150, and a new leak-repair incentive of $100 per year would be created.

Mayor Kate Gallego framed the move as a continuation of long-term planning. "We've spent decades preparing for the challenges we're facing today, and those investments have put us in a good position," she said. "But the cuts from the federal government require us to take further action. Phoenix is stepping up its own conservation efforts, and we're asking residents and businesses to join us."

The city's strategy rests on three pillars: using backup supplies, developing new water resources and reducing demand. Backup supplies include renewable supplies, stored one-time-use water, groundwater recovery infrastructure and regional partnerships, but officials caution those reserves are finite.

"Stored water and other backup supplies give Phoenix important flexibility as Colorado River deliveries decline," Wilson said. "But those reserves are not unlimited."

The Bartlett Dam expansion, a regional effort to enlarge Verde River storage, would help capture flood flows in wet years like this one, Wilson said. The project will take years and require financial participation from other Valley cities. Phoenix is also pursuing additional storage along the Salt and Verde rivers and advancing Pure Water Phoenix, with advanced water purification facilities planned at Cave Creek Road, North Gateway and 91st Avenue. The city is also participating in the Secure Water Arizona Program.

Residents and businesses can find water-saving tips and conservation program details at phoenix.gov/savewater, with drought information at phoenix.gov/drought.