It has nothing to do with tap water, they provided false information. It is pulling cold water from the lake, running it through heat exchangers throughout the system, then the cold liquid at each system is used to cool the buildings, etc. The slightly warmer water goes back into the lake, not into the drinking water system.
It is not used for drinking water, and the link you shared also doesn't mention that, but it is an interesting system that should be used in more places.
Takes a little load off the water heater I do have to admit. Unless you have a heat-pump based system, which is the trend…