A study published by the Public Policy Institute of California (PPIC), "Building Drought Resilience in California's Cities and Suburbs," recommends improvements in drought resilience that can help urban areas better prepare for future droughts.

The report reviews how California’s cities and suburbs fared during the 2012–16 drought. The report says that although droughts are recurring features of California’s variable climate, this one was unusual in its severity—including the driest four-year stretch in 120 years of record keeping. It has was marked by record-high temperatures, which reduced water stored in the Sierra Nevada snowpack and intensified drought conditions.

"This combination of dry, hot weather makes it a harbinger of the kinds of droughts California can expect more often as the climate changes," the report says.

The report was supported with funding from California Water Service, the S. D. Bechtel, Jr. Foundation, and the U.S. Environmental Protection Agency.

The report says the 2012-2016 drought was also unusual in the types of policies the state adopted for the urban sector. California’s urban water supply system is highly decentralized, with more than 400 local retail suppliers—along with some two dozen wholesalers—supplying 93% of the state’s residents.

In past droughts, mandatory rationing decisions were made by local authorities while the state focused on supporting better local drought planning and increasing water system flexibility, such as through water trading. The report says that this time, state officials—concerned that urban utilities were moving too slowly for a drought of this severity and the possibility it could continue for several more years—took the "unprecedented step" of ordering an across-the-board curtailment of urban water use in April 2015. Its action mandated 25% average savings compared to 2013.

The report says that following the 1976–77 and 1987–92 droughts, California utilities invested in drought resilience, including diversifying supplies with new surface and underground storage, interconnections with neighboring suppliers, recycled wastewater, and water transfer agreements, as well as freeing up supplies by reducing indoor water use.

As a result, urban water suppliers "generally believed they were prepared as the state entered a five-year drought in 2012," the report says.

The state also worked to build urban drought resilience since the late 1970s by strengthening local water planning requirements, providing financial assistance, and fostering voluntary water trading to help move supplies to areas experiencing the worst shortages.

Concerns about the most recent drought’s severity prompted the state to intervene in new ways, the report says. In particular, it adopted a more hands-on approach to short-term demand management, a part of drought resilience strategies that had traditionally been left to local authorities. And in 2015, the state took the step of ordering an across-the-board mandate for urban water conservation.

Although California’s residents "overwhelmingly" responded to the mandate, the report says the policy generated "significant discord" between the state and local water suppliers. "Perhaps more importantly, it muddied the waters in terms of state and local roles and responsibilities going forward." If left unaddressed, the report warns that this uncertainty could undermine effective planning and response to future droughts.

The report recommends that actions in five areas can clarify this process and improve urban drought resilience:

Coordinating water shortage contingency planning and implementation: The misalignment between state and local views on local drought preparedness reflects an information gap. The state should avoid the “better safe than sorry” approach it took with the mandate and rely instead on a “trust but verify” policy. The stress test the state adopted toward the end of the drought—which allowed local utilities to drop mandated conservation if they could demonstrate drought-resilient supplies—is a good model.

Fostering water system flexibility and integration: Priorities include continued local and state investment in cooperative regional approaches to water supply management and greater attention to the regulatory context in which planning and investment decisions are made.

Improving water suppliers’ fiscal resilience: Utilities can improve their ability to weather future droughts by being more proactive on drought pricing and communication with their customers. The state can also help by offering utilities guidance in navigating constitutional requirements regarding water pricing.

Addressing water shortages in vulnerable communities and ecosystems: Simply saving water in cities is not enough to provide meaningful assistance to at-risk rural communities and ecosystems. The state needs to take the lead in improving drought preparation and response for these vulnerable sectors.

Balancing long-term water use efficiency and drought resilience: As water managers look to make long-term gains in conservation, they need to recognize that reducing water used by urban landscapes will make it harder to cut water use quickly during future droughts. Utilities can address these trade-offs by explicitly considering them in their drought planning—for instance, by allocating some long-term savings to a reliability reserve. The state can help by updating urban water management planning requirements.