Many cities rely on local water projects for all or a portion of their supplies. These projects typically were built and are operated by local public water districts, county water departments, city water departments or other special districts. Nearly 600 special purpose local agencies in California provide water to their areas through local development projects and imported supplies. A number of local agencies may also operate flood control and wastewater treatment facilities in addition to providing drinking water. Local water agencies usually are formed by a vote of the community, operate as public organizations, are governed by elected directors and fund their projects through bond issues.

In some communities, water is provided by private companies. Approximately 6 million Californians are served by these investor-owned utilities, which are regulated by the California Public Utilities Commission. The PUC monitors operations and service, sets water rates, and enforces water quality standards set by state and federal regulators.