Not to mention grandfathered reserves. Redlands University has a contract with the city that it gets an allotted amount of water per year, so long as they use that much. So they do things like run the sprinklers all the time to use as much water as possible to keep their yearly allotment high in case of an influx of students.
If this fairly small college has this deal, I can only imagine what other schools and businesses have similar ones.