One of the most critical issues facing the United States today is the proper management of our water resources. Water availability and quality are changing due to increasing population, urbanization, and land use and climate change. Despite the fact that overall water use in the U.S. has remained relatively constant since about 1980, shortages in water supply have been increasing in frequency in many parts of the country, and water quality is also declining in some areas. The National Science Foundation (NSF) has proposed the Water and Environmental Research Systems (WATERS) Network as one possible initiative whereby NSF could provide the advances in the basic science needed to respond effectively to the challenge of managing water resources. In its interim report, Preliminary Review of the Draft Science, Education, and Design Strategy for the WATER and Environmental Research Systems Network, the committee comments on the WATERS draft design strategy and provides advice in several key categories related to the WATERS plan: science questions; observatory design; sensors; cyberinfrastructure; education and outreach; and governance and management.