Wow, 1.3 gal/hour? Most drillers would call that a dry hole. I generally round down to a gallon per foot for 6" casing but that's in Imperial gallons. I think the bore hole has to be bigger than the casing so US gallons would be about 1.5 even with what the pipe and wire displaces.
Anyway, I had a similar problem where the low yeild was challenging whereby I could not pump continuously. To get more wash time, I was dumping the water into a large barrel and syphoning the water back down the hole to reuse. The fines and cuttings would settle in the bottom of the barrel. I would alternate between recycling the water and drawing it down as it's the drawdown that really opens up the aquifer. A few days of that and I increased the production to the point the well produced as fast as the pump could draw full 1" bore at the wellhead, no house plumbing involved. I'm not suggesting you can get that sort of results, just that recycling water might beat hauling so much town water.
You did not mention shocking the well. Yes you dumped city water down it and presumably it had traces of chlorine but I think you should shock it.
I think if you shock it and then pump it long enough, it will eventually clear up. I think you should also throttle back that 20 GPM pump so it doesn't draw down your borehole storage so fast.