To address water scarcity, cities are pursuing options for augmenting groundwater recharge with recycled water. Ozone-based treatment trains comprising ozone and biologically activated carbon potentially offer cost-effective alternatives to membrane-based treatment, the standard process for potable reuse in numerous countries. However, regulations in multiple states effectively limit the extent to which ozone-based treatment alone can produce recycled water for groundwater recharge. To investigate the trade-offs between treatment costs and regulatory constraints, this study presents methods for modeling and optimizing designs for (1) producing recycled water using membrane-based treatment, ozone-based treatment, and hybrid treatment trains comprising ozone-based treatment with a membrane sidestream, and (2) delivering that water to stormwater spreading basins. We present a case study of Los Angeles, CA, to demonstrate the model’s application under realistic conditions, including regulations that limit spreading recycled water based on its concentration of total organic carbon and the extent of dilution. While the membrane-based treatment train exhibits economies of scale, we demonstrate how regulatory constraints create a diseconomies of scale effect for hybrid treatment systems because larger scales necessitate a higher proportion of recycled water undergo membrane treatment. Nevertheless, relative to membrane-based treatment, we identify opportunities for ozone-based or hybrid treatment trains to reduce treatment costs and energy use by up to 62% and 59%, respectively, for systems with up to 1 m3/s (23 million gallons per day) mean water recycling rate, potentially lowering the barrier for decentralized water recycling systems. This modeling approach could inform planning and policy regarding recycled water projects for groundwater recharge through spreading basins and, with additional modification, other potable reuse applications.