The growing need for infrastructure improvements to local water systems is pervasive and urgent in the U.S. There are nearly 250,000 water main breaks a year and sewage overflows threaten drinking water. This leads to increasing costs for both governments and consumers. However, budgets are constrained, and increasing taxes and water rates on similarly stressed taxpayers and rate-payers are an unpleasant option. So how do states and municipalities pay for these much-needed projects with money so tight? To help answer this question, in June 2013, GOVERNING hosted a meeting of local government leaders, experts and private sector executives to discuss the future of water management. During the “Transforming Water Management: Building a Future Leveraging Existing Resources” event, many leaders returned to the same conclusion on the best way forward: public-private partnerships (P3s). This GOVERNING Institute issue brief discusses why P3s are popular now, and details the many benefits they can bring state and local governments.