For California's wealthy, drought a problem money can't fix

California's punishing drought is entering its fourth year, with reservoirs a mere 36 percent full.

One area running out of water is Montecito, an upscale community home to celebrities like Oprah Winfrey, Tom Cruise and Ellen DeGeneres.

Now, those who lack for nearly nothing are coping with a problem money can't solve, reports CBS News correspondent Ben Tracy.

"The real impact is that we've invested a lot of money in our lawns and our shrubbery and our flowers and so forth," resident Pat Nesbitt said. "That's all going to have to be replaced at some point."

Nesbitt's front yard is a full-sized polo field. But the grass is now dead and his ponds empty.

Montecito cut Nesbitt's water allotment by 90 percent. He now tracks his water use every day.

If he uses too much, he's fined.

"Most people are working hard as hell to get below their allocations so they don't get fined," Nesbitt said. "And those that can are importing water."

Tom Mosby heads the Montecito Water Authority. Faced with running out of water, he imposed drastic water cuts on the area's 10,000 residents.

He's already handed out $2 million in fines to people who use more than they're allowed.

"It's been difficult," Mosby said. "We've had many people come to us with appeals asking us for more water."

Montecito has almost no ground water access. Eighty-five percent of its supply comes from nearby Lake Cachuma. It is now just 30 percent full -- part pond, but mostly prairie. If the drought continues, it could be empty next year.

"Without Lake Cachuma, we're going to definitely have to be looking at an alternate water supply that currently does not exist," Mosby said.

Larry Reiche's water allotment was cut by 60 percent. He's spent nearly $200,000 ripping up his landscape and installing drought-tolerant plants and trees. All of his grass is now artificial.

He admits, in retrospect, he may have been using more water than he needed to.

"We know there is a limited amount of water, but yet we all used water like there was an unlimited supply," Reiche admitted.

He's praying for rain and that Montecito does not become a paradise lost to the drought.