There's a bunch of climate change-related, fear-mongering news going around these days, but some of it is honestly kind of difficult to care about. What does an increase in sea level really mean for your life, anyways? But with hotter drier climates come water shortages, and this piece of news will succeed in grabbing your attention: California is set to increase its water supplies by "water recycling," and that means drinking your own pee. Thirsty yet?
Basically California faces two options in response to decreased rainfall and climbing demand for water. Because just restricting usage wouldn't help enough, they would need to desalinate ocean water (remove the salt) and/or start recycling more water. Although a desalination plant will soon open in San Diego County, it can only provide a relatively small amount of water at a relatively high cost (the water must be transported in from the ocean, and then processed heavily).
So more recently, California has been considering implementing more water recycling. This means exactly what you think: keeping wastewater local, for processing and immediate redistribution back into even the potable (i.e., drinking!) water supply. This water is cheaper to transport and process than ocean water.
Unfortunately, the "ick" factor is hard to dispel. Disgust is an extremely powerful human emotion, and studies have long shown that people can't help but continue to think of juice poured into even a totally sterile bedpan as contaminated by waste materials. It's good that dangerous things disgust us, but sometimes the disgust goes too far. Remember how Portland recently almost wasted millions of gallons of still-totally-safe reservoir water just because one man was caught peeing in it? In this case, disgust would again be irrational if it kept California from developing cost-effective, environmentally-friendly water treatment plants.
And anyways, has everyone forgotten their elementary-school science? The water cycle means that, at some point, it's virtually certain that all water has been urine... and probably contained in feces, vomit, pus, blood, and so on, too. Water coming out of a state-of-the-art treatment plant is leaps and bounds cleaner and safer than water even in, for instance, a clean lake, despite its recent history. So learn to love technology and drink up!