“…Similarly, Litke and Day (1998) suggested that a lack of financial resources can reduce the capacity of agencies, organizations, and citizens to complete effective watershed planning. In this paper, financial capacity is defined in terms of the ability to generate and access funding (Goodman et al, 1998;de Loe¨et al, 2002); the presence of adequate resources to meet operating expenses and manage water supplies (Shanaghan et al, 1998;de Loeë t al., 2002); the sustainable and prudent use of financial resources including the use of market mechanisms to influence behavior and reduce demand for water supplies (Hamdy et al, 1998); and financial flexibility, which affects the ability of local governments to adapt to changing circumstances (Mead, 1986). Specific indicators of financial capacity are provided in Table 1.…”