The water tower supplies the system pressure (generally speaking). This is determined by gravity and cannot go higher. The max flow you can get out of the tower is if you open the bottom of the tower to atmosphere so that all the water flows out. This is because there is almost no resistance to water flow. Now add a few kilometers of pipe to the tower and have the water run out the end of this pipe, the flow will be less because the pipe adds resistance to water flow (smaller pipes have higher resistance and faster flow also results in higher losses). Now add a turbine in this pipe which will add more resistance and the maximum flow from the tower drops more. As you move further down the system the pressure keeps dropping, and you will see a small drop over this turbine. The end result is that at your house the pressure will be lower and your water flow will drop.