The relevant law regarding a landlord's obligation to provide a habitable premise is California Civil Code section 1941.1, which says
a) A dwelling shall be deemed untenantable for purposes of Section
1941 if it substantially lacks any of the following affirmative
standard characteristics or is a residential unit described in Section
17920.3 or 17920.10 of the Health and Safety Code:...
(3) A water supply approved under applicable law that is under the
control of the tenant, capable of producing hot and cold running
water, or a system that is under the control of the landlord, that
produces hot and cold running water, furnished to appropriate
fixtures, and connected to a sewage disposal system approved under
applicable law.
This does not say that water must be drinkable fresh from the tap (what has to be approved is the water system, not the water coming through the system).
These legal professionals imply that a landlord is obligated to take care of the problem, but that could be advertising.
Although there isn't a clear requirement to provide bacteria-free water, you might prevail in a lawsuit. However, it still isn't possible under §1941 to compel the landlord to fix the problem, according to the Cal. Consumer Affairs blurb. In case it turns out that the condition of the water does put the landlord in violation of the habitability standards, a standard remedy is to give written notice of the "dilapidation" of the premise which renders it untenantable and which the landlord should repair, and after a reasonable time the landlord neglects to repair the dilapidation, they you can fix it yourself and deduct the cost up to one month's rent. Or, you can terminate the lease (not much use with a month-to-month). This is under §1942.
