I don't know the specifics of their systems but I suspect jbog's analysis is correct. The only caveat I'd add is that if their design takes advantage of gravitational flow rather than working against pumps, then it might not be a perpetual motion scam. In that case the system is effectively operating like a hydroelectric generator in a dam.
Just because some cities have signed on doesn't legitimize the concept. There was, and may still be, a company called Blacklight Power that was scamming Philadelphia and others for many years in the 1990s using another 'free energy' scheme.