Tap water is fine in my experience but I have a well, not city water. They say you should let it sit out for a day or two so the chlorine will evaporate if that is what you have available. RO is best. Any mycorrhizae should work but I have only ever used Great White. The most important part of the tea are the beneficial bacteria that grow and multiply in the compost brewing process. The fungi is just a little extra protection.