In City of Palmdale v. Palmdale Water Dist. (2011) 198 Cal.App.4th 926, a water district obtained its water from two basic sources: 60 percent from a reservoir and the state water project, and the 40 percent balance from the district's own area groundwater wells. Most (about 72 percent) of the water went to single-family residences, with irrigation users accounting for 5 percent of the distribution. (Palmdale, supra, 198 Cal.App.4th at p. 928.) For the previous five years, the district had spent considerable money to upgrade its water treatment plant ($56 million) but revenues suffered from a "'decline in water sales,'" so its reserves were depleted. The district wanted to issue more debt for "future capital projects." (Id. at pp. 928-929.) Relying on consultants, the water district adopted a new, five-tiered rate structure, which progressively increased rates (for the top four tiers) for three basic categories of customers: residences, businesses, and irrigation projects. The tiered budgets for irrigation users were more stringent than for residential and commercial customers. (Id. at p. 930.) The way the tiers operated, all three classes of customers got a tier 1 budget, but irrigation customers had less leeway to increase usage without progressing to another tier. Thus, for example, the tier 2 rates for residential customers did not kick in until 125 percent of the budget, but tier 2 rates for irrigation customers kicked in at 110 percent of the budget. The tiered rate structure was itself based on a monthly allocated water budget. (Ibid.)