Strange. Sounds like one Department not knowing what another is doing!
We sometimes have "hosepipe bans" in Britain, with pleas not to use hoses to water lawns, fill paddling-pools and wash cars. I think fines can be levvied.
Lawns will cope. Outdoor fun pools are not necessary. You can usually wash a car reasonably well with one bucketful of water and don't normally need more than clean its windows and lamps anyway.
Parts of England at least are presently facing possible water shortages as we have had generally very little rain for months. Grazing meadows are bleaching, harvests are already under way, the blackberries are aready ripe if not going over, brown leaves show many trees are suffering.
However, we do not fine anyone for letting the grass turn yellow - indeed advice from professional gardeners is that the best action for a lawn is no action.
Basically keep off the dried grass; and it will usually recover once the ground has received enough rain again. It's a remarkably hardy plant!
