Public Policy Institute of California (Spetember 10, 2014) - The California Water Resources Control Board adopted a statewide policy last month requiring local agencies to implement drought plans, including restrictions on outdoor water use. Local agencies have responded in a variety of ways. Last month, Jay Lund—a professor of civil and environmental engineering at UC Davis and an adjunct research fellow at PPIC— outlined some of the factors that might cause local agencies to shy away from mandatory restrictions. One important factor is that when conservation measures work, agencies sell less water and their revenues fall. But the costs of providing water services do not decrease as much, so agency balance sheets can end up in the red.