P.S. I am a landlord too and pay the water bill. That irrigation works well and is quite affordable.
You've receive excellent answers before.Typically for the single family homes the tenant pays all utilities ( except garbage), a good solution that was offered below make sure you'll put the condition of the lawn in your check list. Charge them a larger deposit and let them know they have to maintain the lawn.
If you pay for the water, who's to know how much water the tenants will use when they know it's free to them? How many times and how many loads of laundry will they run? Will they always be conscious of water conservation? On the other hand, if they know they're paying, they may turn off the sprinkler system and your lawn will get brown. And that will cost more in the long-run to bring it back to life.
If this is a house, they should maintain it like it's their own, and alert you if something needs to be fixed so that you can address it. Make sure you have something in your lease to state that they are responsible for maintaining the yard, which includes making sure the sprinkler system is allowed to run on a timer.
AND: Include the condition of the yard on the move in-move out checklist so that this is very clearly spelled out.
As an FYI: I have a duplex. I live in one unit, and rent out the other. I pay for the entire water bill. You can't believe how many loads of laundry they run a week. At the same time, I have a very lush garden that all of us enjoy. So...it's a wash. Literally.
However, you might want to put something in the lease agreement to make sure the tenant keeps the lawn in good condition (or at least the same condition as you turned the house over). This is especially important just in case the tenant does not want to incur a huge water bill (yes, it's drought season, and our water company is charging us premium if we use more than a certain amount of water) so they don't stop watering the lawn and destroy the landscaping.
If you split the water bill, then you might risk paying for somebody;s waster of water also.