There have been some isolated problems with L.A. Basin water, over the past five or so years. Specifically water from wells in the San Gabriel Valley (above common accepted levels of carcinogens).

A lot of water in L.A. comes from the Owens Valley (Sierra Nevada Mtn's run-off) up toward Lake Tahoe. This is generally considered to be high quality water. Some areas though, are fed by local wells. The taste of well water vs. Owens Valley is night and day.