You don't find it in a city. You find it in the Ice Path.
You can find it in the Dark Cave.
at the middle border between kanto and joto
the waterfall entrance of mt mortor
Most water type Pokemon can learn the move Waterfall.
squirtlewarturtleblastoisepsyduckgolduckpoliwagpoliwhirlpoliwrathtentacooltentacruelseeldewgonghorseaseadragoldeen seakingstaryustarmiegyradoselaprasvaporeonomanyteomasterkabutokabutopsmewchinchoulanturnmarillazumarillpolitoedquagsireslowkingqwillfishremoraidoctillareekingdrasuicune My Lapras and Gyrados Know the move waterfall
all of them
You get waterfall (HM07) in the Ice Path after Mahogany Town.
in Azalea town you can find and little pond with a rock waterfall. if you surf in it you can find poliwirls, which evolve into fighting types.
on the ice path
you need to beat the 8th gym leader in blackthorn city. glad to be of service.
cianwood city
not all Pokemon can learn it, only some can learn that move. i can't seem to find a list of what Pokemon are able to, but ill post it if i find one.