The Santa Barbara City Council has a newly created drought fund.
The fund with more than $7.5 million, will allow for better tracking of drought-related costs and projects.
That includes desalination, drilling additional wells and for purchasing water.
"So we're going to be tracking those, separate from our normal operations in hopes that if we do get additional either grants or loans, it's very clear what that money was used for," said Joshua Haggmark, the acting water resources manager.
The city could be reimbursed for some of the costs through a federal or state declared emergency.
The money in the fund is from water capital projects and from money the city council approved for purchasing water during the drought.