Id leave households out of such a system, they need water to drink, and pay more than 'free' + externalities anyway. I don't think you need to change ownership

Id leave households out of such a system, they need water to drink, and pay more than 'free' + externalities anyway. I don't think you need to change ownership of the water, a tax to cover the externalities would suffice. But I agree, it would probably never happen.