City leaders in Phoenix have moved to shore up legal expertise as they assess how to respond to a federal plan that outlines options for operating the Colorado River after the current rules expire in 2026. The city has retained two law firms — Culp & Kelly, LLP, and O'Melveny & Myers LLP — to advise on potential legal strategies tied to the river, which supplies roughly 40 percent of Phoenix’s water. The Phoenix City Council met in a closed executive session to receive legal advice and discuss options in the wake of the federal government’s release of a final environmental impact statement for post‑2026 Colorado River operations; the city, however, has not announced any intent to file a lawsuit. Mayor Kate Gallego said elected officials and city staff are working to assess both legal and regulatory avenues. "We want to understand how we can best influence this process," she said, adding that city leaders are determined to keep water bills as low as possible while evaluating how to challenge decisions they view as harmful to local water supply and affordability.
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The federal framework released as part of the post‑2026 planning process lays out a menu of approaches for managing the drought‑stricken Colorado River system, with a more detailed record of decision to follow that will determine how future reductions are implemented. Gallego said Phoenix accepts the reality that the basin is shrinking and that cuts will be necessary, but she criticized how those cuts are structured in the proposal. "It is deeply disappointing that the federal government set up a framework where they can’t cut the Upper Basin," she said, arguing that the distribution of potential reductions could leave Arizona carrying a heavier load. The basin is traditionally divided into an Upper Basin, made up of Colorado, Wyoming, Utah and New Mexico, and a Lower Basin, which includes Arizona, California and Nevada; Gallego called on all seven basin states to share the burden of shrinking supplies rather than placing a disproportionate share on Arizona.
A Colorado River reservoir with a visible 'bathtub ring' from low water levels — Phoenix has retained law firms as it considers legal options to fight proposed federal cuts to river allocations.
Phoenix officials say the city relies on the Colorado River for about 40 percent of its water — a supply the mayor described as among the city’s cleanest and most cost‑effective. That dependence has city leaders considering replacement options if allocation reductions move forward, but those alternatives are expected to carry much higher price tags. Desalinated ocean water is one potential alternative that Gallego noted, pointing out that coastal regions such as San Diego County already receive desalinated supplies. Bringing desalinated ocean water to Phoenix, however, would require new agreements and costly infrastructure, and Gallego stressed the financial implications. "Think about it: how much more desalinated water that would have to come from California would cost versus Colorado River water?" she asked, warning that striking replacements for current Colorado River allocations would be a "really difficult pill to swallow." The mayor emphasized that the issue is not an immediate disruption to service but a looming cost challenge.
Visitors overlook a major Colorado River dam and reservoir — scenes like this underscore why Phoenix says it is preparing legal action over post‑2026 water allocation plans.
City officials have repeatedly told residents not to expect an immediate loss of water service as the negotiations play out. Phoenix has spent years building resiliency into its system through investments in water recycling, conservation programs, underground storage and a network of wells. The municipality also draws supplies from surface sources outside the Colorado River system; the Salt and Verde rivers together represent the city's largest water source and operate independently of Colorado River deliveries. "We are prepared," Gallego said, seeking to reassure customers. "Don’t worry about turning on your faucet tonight or this year. We are working very hard to prepare for a drought, but we do need to think about the cost impacts of what the federal government is doing."
Even if deliveries continue without interruption in the near term, city leaders say the financial toll of replacing or supplementing Colorado River water could filter through to consumers. Gallego pointed to rising costs for electricity, treatment chemicals and other inputs that have already increased operating expenses, and warned that moving to more expensive replacement supplies would add another layer of cost pressure. Those increases could ultimately be reflected in water bills, she said, underscoring why Phoenix is evaluating every available mechanism to protect the affordability of service. City staff are examining regulatory and legal options in parallel with participation in the federal decision‑making process, seeking to influence how cuts would be allocated and implemented in coming years.
The potential for steeper costs also has implications for growth and development in Phoenix. The city requires developers to help cover the cost of the additional water a project will require; impact fees and similar charges are designed to fund acquisitions, partnerships or other measures needed to secure new supplies. That model will remain in place even if the price of sourcing new water increases, Gallego said, but she cautioned prospective homeowners and builders that those costs may rise. "New development would pay a fee that would help us go out and secure that water," she noted, explaining that while growth can continue, the economics of securing new supplies are becoming more challenging as the broader system shrinks and federal policy shifts.
For now, Phoenix is maintaining a two‑track approach: continue to engage in the federal process that will shape post‑2026 operations while pursuing legal counsel to understand what judicial or administrative challenges might be available. Gallego urged the Upper Basin states and the federal government to return to negotiations and told basin partners that a negotiated settlement remains possible if all sides approach the table in good faith. "We can come to a good solution if we all come to this table and act in good faith," she said, adding that she would like to see a more active federal role in convening those talks and ensuring cuts are distributed across the basin. City officials say the legal teams were retained to provide options and advice as Phoenix decides how best to protect its water supply and financial interests; no lawsuit has been filed as the city continues to weigh its next steps.
Arizona Gov. Katie Hobbs hired the law firm Sullivan & Cromwell back in March 2026 to prepare for potential litigation if a negotiated settlement could not be reached, per reports from Phoenix New Times and E&E News. The governor described the federal plan as containing "unacceptable options" that force "draconian" cutbacks disproportionately on Arizona.
The U.S. Bureau of Reclamation published the Draft Environmental Impact Statement for Post‑2026 Colorado River operations on January 9, 2026, accepted public comments through March 2, 2026, and has said it intends to issue a decision governing post‑2026 operations by October 1, 2026.
In a City of Phoenix briefing to the council dated April 28, 2026, city staff requested authority for the city manager to pursue mutual "Aid Agreements" and transactional agreements with partners including the City of Tucson, the Town of Cave Creek and the Central Arizona Water Conservation District to coordinate emergency support and water transactions if shortages deepen.
That same Phoenix briefing noted that some scenarios analyzed in the federal materials could mean Central Arizona Project reductions on the order of about 1.1 million acre‑feet per year or more under certain alternatives — a scale of loss the city says it is planning around.