#33: Financial transfers/funds
Financial transfers between different levels of government are crucial tools for bridging the funding gap in water policy. Fiscal transfers from central budgets are also a source of investment capital in some countries.
Well-designed intergovernmental transfers can create incentives for improved financial . The 3Ts (taxes, tariffs and transfers), including inter-governmental transfers, are the main sources of finance. Financial transfers may include grants, funding programmes and specific agreements that can be included in contracts.
Example: Small Drinking Water System Fund in Arizona
The Small drinking water system fund in Arizona covers funding of small public water systems in need of water quality upgrades and infrastructure repairs. The budget is provided by the Water Infrastructure Finance Authority. This funding is essential to ensuring that necessary upgrades can occur, resulting in restoration of a clean and safe water supply. The Arizona Department of Environmental Quality (ADEQ) is managing the grants for small water companies.