The "zero" is not zero water level, it is a supply and demand gauge. So the first gauge is saying that your water supply is equal to your water demand. You don't have any excess, and you don't have a deficit (because you're purchasing only what you need). The second one is titled as a water pollution level monitor, which is saying that your water is clean. If it were tainted or polluted, it would move the gauge level across the bar to the right. The bottom tells you where you're buying your water, and how much is available in the region for you to purchase. Keep an eye on the available water, because as all of the cities grow, they will use more water, so you can easily reach a point where there won't be enough available for you to supply your city.
The water icon will probably stay yellow as long as you purchase water, because it alerts you when you don't have any excess (which would mean you have to increase your water supply). It will turn red if the region runs out of water and you have none.