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I may be wrong but I think due to Prop 218, it's illegal for municipalities in California to charge more than the "actual cost". For one thing, this means that tiered water pricing will always get challenged.

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No, I think san Ramon anticipated the drought and drew up pricing schemes to disincentivize waste, Livermore is following suit.

Other municipalities tried to implement tiered pricing and had it shot down, however.

http://www.sacbee.com/news/state/california/water-and-drough...

There seems to be a pretty easy workaround for that, stealing a page from the private enterprise playbook. Municipal water districts could sell their water rights to another entity. The water-rights-holding entity can then charge the municipality an arm and a leg for the water, which can then charge their customers for that cost.

To further drive the Howard Jarvis people up a wall, make sure the rightsholding entity is a secretive private company based offshore with no corporate records of any kind.

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