Most places get freshwater from rivers or acquifers, sometimes lakes, use it for whatever, some large amount of that used water is collected as sewage, treat the sewage and discharge it downstream/into large bodies of water/the ocean.

Many systems also output reclaimed water; it's clean, but not up to environmental standards for discharge or drinking; typically excess clorination. This is often used for municipal irrigation sometimes toliet flushing, etc; uses where water below drinking standards is fine.

A handful of systems discharge treated water into their reservoirs or into acquifer recharge ponds. But there's an ick factor, even when discharge water is often held to higher standards than drinking water, so it's only done when the situation outweighs the ick.