This is one challenge that ''governator'' Arnold Schwarzenegger may have a tougher time dealing with than bashing a multitude of gun-toting bad guys and wryly saying ''I'll be back'' while chomping on  a cigar; the prevailing situation in California where below average rain and snow falls for two consecutive years have left water reserves at dangerously low levels.

Governor Schwarzenegger made it official by proclaiming a statewide drought yesterday. The executive order directs state officials to speed water transfers to the hardest hit areas and help local water districts with conservation efforts. Although it doesn't mandate water rationing by residents, the governor has urged them to do their bit.

It was the first official drought declaration since 1991 and came after the state experienced its driest summer months on record. California relies largely on melting snow run off in the Sierra Mountains to fill its network of reservoirs and waterways, but the almost complete absence of snow in the late winter and spring left the snow pack at just 69 per cent of normal.

''We must recognize the severity of the crisis we face,'' said Schwarzenegger as he made the formal declaration. ''We are very cautious. We want to make sure we all work together,'' adding that he wanted to avoid drastic measures like compulsorily limiting the amount of water each resident can use. However, he urged water districts across the state to push customers harder to save even more of the precious fluid.

He called for a 20 per cent reduction in water use statewide, urging local agencies to seek federal money for water conservation programs and shift the timing of water deliveries in the Southern California to help free up supplies for San Joaquin Valley Farms. He also ordered state agencies to begin setting up a water bank for the transfer of water to areas facing shortages.

Some East Bay area water districts already have imposed water rationing and threatened to fine or reduce water supply to customers who violate the restrictions. The East Bay Municipal Utility District, which serves 1.3 million people in Contra Costa and Alameda counties, last month declared a drought emergency and imposed mandatory water rationing. The city of Long Beach and the Westlands Water District in the San Joaquin Valley are also rationing.

Caution also is the watchword among San Diego County water officials. They welcomed the governor's strategy, saying stepped-up conservation has to be given a chance to work before imposing mandatory rationing.

''We're taking it very cautiously here,'' said Fern Steiner, chairwoman of the San Diego County Water Authority. ''We would like (water-use habits) to be changed forever. We'd like lifestyle changes.'' Rationing is highly unlikely for 2008, Steiner said, but added, ''We'll have to take 2009 as it comes.''

Water users also are bracing for increases in rates as agencies are forced to implement expensive conservation, buy higher-priced water from Northern California farmers - if they have any - and shore up local storage.
 
Steiner said the county water authority will try to minimize rate increases. But with water becoming more expensive, there's little question ratepayers will be hit. ''It is a very safe assumption that rates will continue to go up,'' she said.

Schwarzenegger also urged adoption of his $11.7 billion plan to issue bonds to upgrade the state's water management system. This plan intends to build dams, construct a more efficient method of delivering water through the Delta region and a host of water use efficiency and environmental improvements.

"This drought is an urgent reminder of the immediate need to upgrade California's water infrastructure," said the former action hero. "There is no more time to waste because nothing is more vital to protect our economy, our environment and our quality-of- life. We must work together to ensure that California will have safe, reliable and clean water not only today but 20, 30 and 40 years from now."

California is the third largest American state by land area and the most populous, home to approximately 37 million people. Home of Hollywood and Silicon Valley, the state accounts for 13 per cent of the US GDP (gross domestic product) and is richer than all but eight countries in the world.