This post has a water themed Birthday party including this relay: The first kid starts with a full cup of water, then pours it over his head and the second kid catches it and repeats and they keep doing this to see who can fill up a jar the fastest.
Great list for Outdoor Summer Fun. Some new and amazing ideas I haven't seen yet to keep kids busy this summer. Worth a look for the links alone! 30 out of the box ideas (and awesome links to support you in doing them.