water resources appears to be over (Worster, 1985; Reisner, 1986; NRC, 1996), and attention has shifted to management of existing systems. A key motivation behind many contemporary watershed programs is watershed restoration to reverse some of these detrimental impacts caused by water development and urbanization. However, restoration is a relatively new goal in most watersheds and financing for it is not well defined.
Current funding mechanisms for water resource management activities can occur at the local, regional, and country levels, as well as by agricultural district, by state, by interstate efforts, and by various specific federal agencies.
Local water management activities can be funded at either city or multi-city levels.
Many local water-related institutions are funded as utilities or service districts. At the municipal level, separate utilities may exist for water and wastewater systems. In recent years, many communities have also established storm-water management utilities. Funding is based on assessing charges for services rendered. Water utilities, for example, typically assess charges for hooking up to the system, for fixed administrative costs, and for the quantity of water used. Most wastewater utilities charge in a similar manner, with the wastewater flow being estimated by the indoor water use. Wastewater utilities may also vary their charges based on the strength of the sewage. Stormwater charges can be based on the amount of impervious area associated with each customer. These charges usually are a fixed monthly rate. Although many utilities do not adhere to a zero net revenue goal, it is generally considered good practice to base charges on cost recovery so that utilities neither subsidize their services nor provide surplus revenues for other areas of government. Nelson (1995) provides a current overview of utility financing in the water, wastewater, and stormwater areas. Local water, wastewater, and stormwater utilities can fund restoration activities as part of their charters if they are responsible for causing some of these impairments.
Another popular local funding model is to form area-wide districts or utilities to serve specific purposes, like water supply, wastewater treatment, and stormwater management (e.g., the Denver Urban Drainage and Flood Control