The structure of urea is H2N-C(=O)-NH2. If a proton (H+) were extracted from one of the nitrogen atoms, the resulting urea anion would not be stabilized by delocalization. So it is not acidic.
The two nitrogen atoms of urea both have unpaired electrons, which are available for interactions with free protons as a base. However, these unpaired electrons are not as basic as amines because the carbonyl carbon already carries a partial positive charge. (In general, molecules with the same charge on adjacent atoms are energetically unfavored). But, the two nitrogen atoms are basic enough to make urea a weak base.
As the name implies, urea is found in urine, so the ultimate source of urea in wastewater is our kidneys.
Urea is changed to nitrates not by a chemical process, but by a biological process. First, the urea is spontaneously hydrolyzed to ammonia and carbon dioxide (this is why cat litter boxes smell like ammonia). If the surroundings are acidic, ammonium ions are produced:
H2N-C(=O)-NH2 → 2NH3 + CO2(g)
NH3 + H+ → NH4+
The ammonium ions are changed to nitrate in two steps by two different organisms. A bacterium called “Nitrosonoma” first oxidizes the ammonium to nitrite (NO2-, which is poisonous). A second bacterium called “Nitrobacter” oxidizes the nitrite to nitrate (NO3). I’m afraid I could not find a mechanism by which these bacteria do this or if it is even known. To find out more about turning ammonium into nitrate, look up “bacterial nitrification” in google or ask about it in Yahoo Answers in the Biology section.