Complex sentence: The Irvine Ranch Water District (IRWD) was the first water district in California to receive an unrestricted use permit from the state for its recycled water; such a permit means that water can be used for any purpose except drinking.
Split into simpler sentences: The Irvine Ranch Water District, IRWD, was the first water district in California to receive an unrestricted use permit from the state for it's recycled water. This means that water can be used for any purpose except drinking.