and went through drought and water restrictions a few times, so I understand the need to water your foundation. I would not worry about the plants around the foundation----they are not as important as your foundation, although if it is that dry, you probably have no problems since the plants will not be really be sitting in water all the time with how dry everything is.
I did not worry about my grass. With several years of drought, keeping the grass in good shape just isn't going to happen. When (if) the drought breaks, work on the grass at that time. Seeding grass at this point is a waste of money. If it were me, I would be thinking of minimizing the grassy areas and moving toward drought-resistance plantings and rock gardens.....this water problem seems to be something that you will have to deal with more often than not. There are so many interesting things you can do instead of grass lawns.
As to the trees, I trenched around the drip line (the outermost area of the branches), then I watered into the trenches. This was advised by a tree specialist, and it seemed to work well at focusing the water where the trees could use it without just throwing water all around the trees.
Here's hoping that this drought situation doesn't continue much longer.