Cataract Dam, one of Macarthur's main sources for water, has fallen to just 26.2 per cent of its capacity and was taken offline for drinking water last week.
The other dams used by Macarthur residents are running low as well, with Cordeaux at 41.2 per cent of storage capacity, Avon at 48.5 per cent and Nepean at 42.3 per cent.
Three weeks ago, when Cataract was at 29 per cent, a WaterNSW spokesman told the Illawarra Mercury this was a similar level to that during previous droughts.
"Cataract is currently offline with supply to Macarthur water filtration plant and the Upper Canal being provided from Nepean Dam, which in turn is receiving water transfers from the Shoalhaven," he said.
A WaterNSW spokesman said they had "taken Cataract Dam offline in recent weeks to allow for maintenance and upgrade works at Pheasants Nest weir".
NSW water minister Melinda Pavey refused to personally comment on the issue despite the Advertiser's repeated attempts to find out what would happen if the dams servicing Macarthur continued to fall.
A Department of Planning, Industry and Environment spokeswoman said the dams were managed as an integrated system so water could be redirected to address pressure points.
"The current drought is more severe than the Millennium drought, however, these systems have a high level of interconnectivity, so Macarthur can be supplied from any of the four Upper Nepean dams (Avon, Cordeaux, Nepean and Cataract)," she said.
"The government will continue working with WaterNSW, Sydney Water and the Department of Planning, Industry and Environment on options to secure Sydney's water supply should the drought worsen."
"Water restrictions can have financial and social impacts on the community. Therefore, we are very careful about when and how to impose restrictions.
"We have a range of strategies in place...for securing supply across greater Sydney from a variety of sources."
Macarthur also cannot access any water supplies from Warragamba Dam or Sydney's desalination plant.
The NSW Government recently suspended a water agreement which controls when and how much water can be pumped out of Shoalhaven's Tallowa Dam.
Tallowa is a back-up resource for the Sydney and Upper Neapean Dam systems.
Minister Pavey passed a bill in Parliament last week to suspend the section of the Water Sharing Plan for the Greater Metropolitan Region Unregulated River Water Sources 2011 which restricted the transfer levels from Tallowa to the Upper Nepean and Warragamba dams.
Now these dams can access three meters of water below the full level of Tallowa Dam even though Sydney is not considered to be in extreme drought.
Dry conditions have worried residents, local drought organisations and politicians across the region for several months.
Campbelltown MP Greg Warren was scathing of the government's 'inaction'.
"A couple of years ago I highlighted this issue and considered it to be a serious concern. It then became a crisis, now it is dangerous," he said.
"There can be no confidence in this government or minister to either have a plan of water security for our growing region, or to even sustain existing residents.
"I don't known what more needs to happen.
"The rivers are running dry, Cataract Dam looks like a forgotten creek, and the Premier or minister won't even come out here to take a look at it firsthand.
"I've done everything I can - I've moved motions in Parliament, made formal representations, I've exhausted every possible avenue.
"Whatever it is, rail, roads, schools, hospitals - or water - this government continues to impose new residential areas without the appropriate level of services or infrastructure."
Camden MP Peter Sidgreaves said he understood the community's concern about Cataract Dam and would write to the minister.
"I will seek to find out at what point individual dams - such as Cataract - trigger regional water restrictions...[in relation to] the Sydney average which has just fallen below 50 per cent," he said.
Mr Sidgreaves has not raised the topic in person with the minister, but said she had been discussing the matter in Parliament from a regional and city perspective.
He said he was confident the government was only approving local housing estates capable of being well-supplied by water, citing the "staffing and experts they have access too".
Wollondilly MP Nathaniel Smith said he was also concerned about the current water supply situation.
"The NSW Government recognises this issue and is taking some practical measures to assist households with some simple water saving methods," he said.
"The current situation means that we will all need to be vigilant in our water use.
"The broader issue relating to water storage is one which requires long-term solutions and the NSW Government is working through a range of options to ensure the best outcome for all NSW residents.
"There is no short term fix to the situation but we are working to be innovative and proactive in this important matter.
"Government needs to work with the community in coming up with long term solutions and strategies for better and more efficient storage and use of water."