That's a good description of the problem. I don't know many people who would be happy to see the price of an InNOut burger jump by $5 when their locally sourced ingredients are in short supply.
We're going to pay for water around here, one way or another.
There are some great models of water recycling and responsible water management in southern California. The small city of Poway incorporated essentially to handle their own water. They now have a well-managed water recycling/reservoir system (Including sewer recycling). Many of the larger cities around here have started incorporating the waste water recycling practices Poway has used for a few decades.
Building the desalination plant may seem like an extreme step, but building out recycling to the 24 water agencies that make up the local district and the 1000 square miles or so covered by the district would also be pretty extreme. They've been digging up the old 1940s era sewer and stormdrains in my small neighborhood for the last 3 years to modernize it. I don't know that it's practical to drastically speed up sewer modernization, but I'd be happy to see an additional $5 on my water bill to try.