Oh boy....not good to use tap in this hobby. You can usually get rodi from your lfs, or distilled water from walmart. The algae could be a result from using tap.
And you're correct, if the rocks and sand were from an established tank, you will have little to no cycle. There will be some die off, but your cycle should go faster.
I'd really suggest not using tap...you'll find it's going to cause more problems in the long run. You're in for a lot of water changes using rodi or distilled.