Drawing the distinction between municipal drinkable water and agricultural water is useful. But in the Central Valley, my understanding is that farms are heavily reliant on well water, and their use pushes the level of the aquifer down in a way that disrupts the supply of drinking water. In some cases, there is a direct competition between agricultural use and residential use, but not necessarily "urban" use.
Well water is even harder to regulate, because anyone can sink their own well whenever they want to. There’s no state owned tap to which you can attach a meter and send a bill for.
https://www.theguardian.com/environment/2020/feb/28/californ...