Drought is common in July and August … and so are municipal or state watering restrictions! The best way to avoid problems with your plants (and with the powers that be!) is to apply up to 3 or 4 inches of organic mulch (wood chips, shredded leaves, etc.) over the soil in flowerbeds and vegetable patches as well as over the roots of trees and shrubs. Mulch reduces evaporation, so the soil will remain moister, even in the heat of summer. Even mulch applied when your garden is already suffering from drought can help, but it is more efficient to mulch your garden before the drought begins, thus stopping evaporation before it starts.
As for lawns, just let them go into summer dormancy. Yes, they will become completely yellow, but will green up again with the return of fall rains. So simply don’t bother watering your lawn during a drought.