The project responds to the need of smaller towns and municipalities to comprehensively address water management and improve the quality of life in accordance with the principles of Smart City and the principles of circular economy in municipalities up to 10 thousand. residents. The benefit of the project will be better management of resources, energy and some waste. Specifically, the recycling or energy use of treated wastewater and rainwater and gray water will be optimized. Furthermore, the methods of material utilization of sewage sludge and construction recyclates will be improved and the possibilities of their use in green roof substrates or in other elements of urban green infrastructure will be explored.