I have to design a sustainable city with a river running through it. Would I put both my water treatment plant and seweage plant on the river. Water up and sewer plant downstream?
You don't have to, as water treatment plants are designed to outlet into drinking water. But most folks like to deposit the waste downstreams. But keep in the back of your mind, what SanFrancisco outlets San Jose drinks.
And, of course, if you are looking to reuse the water, it could be cycled into a lake for recreation. All that depends on the rainfall, climate, and topology you create.