This article proposes a multiobjective optimization model for the design of a macroscopic water system of a Mexican city that solves simultaneously the planning and scheduling of water storage and distribution tasks. The model, which considers rainwater harvesting and reclaimed water reusing as alternative water sources, maximizes the revenues from water sales and minimizes simultaneously the water consumption and land use. A case study based on the city of Morelia in Mexico was solved. It was found that the use of alternative water sources (such as harvested rainwater) along with an appropriate planning and scheduling of storage and distribution tasks have the potential to reduce the pressure over natural reservoirs significantly. Our approach considers simultaneously economic and environmental concerns, thereby contributing to the implementation of more sustainable alternatives in urban water distribution. (c) 2015 American Institute of Chemical Engineers AIChE J, 61: 2428-2446, 2015