Sorry for the delay. I finally spoke with Dal Wayment from the South Davis Sewer District (Manager).
1) He says they never have to add water during the treatment. He clearly stated we should be looking to save water, as it really is wasted once it goes down the drain. So running your RO line out to the garden is a good use for it.
2) For the water that does go down the drain, it is surely insignificant compared to the tens of thousands of gallons they get per day. He wasn't at all concerned.
3) The real water they don't want is your salt water. In order for them to process the waste they must filter the water to a certain level of TDS. Our salt water going down the drain just makes their job more difficult. Then again he didn't have any good alternatives on what to do with our old salt water.
Adam