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inflows, making this the most critical period of record. For purposes of illustration, it was assumed the reservoir at Lake Cachuma has a capacity of 308,000 acre-feet, rather than its current 205,000 acre-foot capacity. The irrigation model was modified to better recognize longer term effects that drought periods have on avocados and citrus fruits. Contact with area horticulturalists and water district personnel indicated that, when expecting a water shortage, avocado growers will cut back acreage to give a full irrigation to remaining acres rather than attempt to practice deficit irrigation. Additionally, a full two year post-drought recovery period is needed before a yield can be expected from avocados. Citrus can be deficit irrigated and the recovery period for non-irrigated acreage is a single year. The next cheapest single purpose alternative for acquiring M&I supplies appears to be reclamation of wastewater. The recycled water would mainly be used for irrigation of parks and golf courses in Santa Barbara. A per acre-foot cost of reclamation was estimated to be approximately $240. In addition to baseline operating criteria, 6 other reservoir operation strategies are considered, encompassing a range of shortage triggers and shortage criteria. Table 1 summarizes the strategies for the two subareas of the irrigation component and the M&I component. Each strategy is designated by a letter, with Strategy A serving as the baseline operating criteria. Strategy A favors M&I uses by declaring a smaller shortage trigger (50,000 acre-feet, compared to 90,000 acre-feet for irrigation users), and a lower shortage criteria (20 percent reduction in deliveries in shortage situations, as opposed to a 50 percent reduction to irrigators). Strategies F and G are of interest because they treat all water users equally in terms of the shortage trigger and shortage criteria. However, Strategy F is conservative in the sense that shortages are imposed when there is still a significant volume of water remaining in the reservoir (125,000 acre-feet). In contrast, Strategy G does not define either a shortage trigger or criteria. Incorporating the above operating criteria into the modeling system over the period of record 1945-1974 yielded the results summarized in Table 2. From the perspective of an M&I water user, only operating strategies D and G would be preferred to the baseline strategy. South Coast irrigators would prefer all strategies, except F, over the baseline: Santa Ynez irrigators would prefer alternatives B, D, and F. Only strategies D and F- increase benefits to all water use groups. However, cumulative results summarized in the last column of Table 2 indicate that from a project-wide perspective, all operating strategies except F result in higher overall economic benefits. The results for alternatives B, C, D, and G indicate that an operating strategy which raises the relative priority of use for a component, or lowers their shortage trigger, will tend to be favored For instance, Santa Ynez irrigators would likely support alternative B because they are put on equal footing with M&I users. They would also support D because it lowers the shortage trigger and leads to increased average annual net income. For the same reasons, South Coast irrigators would favor either of B, C, or D, and the M&I component would favor D. Ironically, the alternative which maximizes economic benefits, and benefits all components, is Strategy G. This strategy states that maximum benefits are achieved when full deliveries are maintained until the reservoir runs dry, implying that reservoir operators may not need a drought strategy at all. It should be noted, however, that