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 (7 to 10 cm) 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 acts as a barrier against water loss through evaporation, so the soil will remain moister, even in the heat of summer. Plus it keeps the soil cooler, upping its water retention. Even mulch applied when your garden is already suffering from drought can help, but it’s 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 may 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.
More information on mulching here: The Benefits of Mulching.