A generalized hierarchical approach with a water balance function is introduced to simulate stream-flow depletion in a complex groundwater system in Osceola County. The groundwater flow system at the site, because of the complex interaction between ambient streams, exhibits a unique multi-scale pattern that proves to be difficult to simulate using standard modelling tools. The hierarchical modelling system was first calibrated to water level measurements collected from monitoring wells. Afterwards, systematic hierarchical simulations and integrated water budget analyses were performed to evaluate the adverse resource impact of the ongoing water withdrawal. The multi-scale process-based results from this generic hierarchical modelling system provided critical storage and flux information that can be used to comprehensively assess the pros and cons of water resource development and management, such as artificial water withdrawal.