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StatutoryRequirement =LWVVV?%2A`Arial?   1452and1420:BeginningEVVV?%2A`Arial?   inFY99,EPAshallwithholdbuXVVV?%2A`Arial?   20percentunlesstheStateb4VVV?%2A`Arial?   hasmettherequirementsofDzVVV?%2A`Arial?   1420(a)(whichrelateto:]+]|VVV?%2A`Arial?   ensuringnewsystemcapacityZn8J_]VVV?%2A`Arial?    Issue ո{pIVVV?%2A`Arial?   HowwillEPAdecideifthe4VVV?%2A`Arial?   20percentwithholdingis,8q VVV?%2A`Arial?   required?ϿP) 3, VVV?%2A`Arial?    Proposal LF6 VVV?%2A`Arial?   GuidancetoStatesonQwC VVV?%2A`Arial?   EnsuringthatAllNewCWSsCS7 VVV?%2A`Arial?   andNTNCWSsDemonstrate1VVV?%2A`Arial?   Technical,Financialand+ZVVV?%2A`Arial?   ManagerialCapacityHB0RQ <3SmVVV?%2A`Arial?    CoreRequirementsof VVV?%2A`Arial?    Guidance _0FVVV?%2A`Arial?   PageII-6V#G&.n'Rj%L(VVV?%2A`Arial?    StatutoryRequirement $VVV?%2A`Arial?   1452and1420Statemust.!$cnVVV?%2A`Arial?   bedevelopingandimplementing.C$VVV?%2A`Arial?   capacitydevelopmentstrategiesGv%VVV?%2A`Arial?   orfaceSRFwithholdingV#K t .CC(YVVV?%2A`Arial?    Issue zE$ٯVVV?%2A`Arial?   HowwillEPAdetermine(forD%Y{VVV?%2A`Arial?   purposesofupdatingitsMq$VVV?%2A`Arial?   decisionsonSRFwithholding)(2%|rVVV?%2A`Arial?   whetherornotaStateis@}$B^VVV?%2A`Arial?   developingandimplementingN%1JVVV?%2A`Arial?   acapacitydevelopment 'I6VVV?%2A`Arial?   strategy?#K.X'.o'  'I VVV?%2A`Arial?    Proposal R%Gh5 VVV?%2A`Arial?   GuidanceforStateson$b" VVV?%2A`Arial?   MinimumRequirementsfor$ VVV?%2A`Arial?   StateCapacityDevelopmentڤw'VVV?%2A`Arial?   Strategies೻#ɭ,.y(u%BVVV?%2A`Arial?    CoreRequirementsof }qt'zVVV?%2A`Arial?    Guidance  ~':eVVV?%2A`Arial?   PageIV-6e5"BVVV?%2A`Arial?   Aug.'96=LCVVV?%2A`Arial?   Aug.'97 )p\) )p%Ee LCVVV?%2A`Arial?   Aug.'98BLCVVV?%2A`Arial?   Sept.'99{\){%vLCVVV?%2A`Arial?   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WPWin61[0]ࡱWPCm9G $v "pXXXX,,,,519-+ 1!#o &- "!p to -+1$UY-+ 1}qc?? @r*t ߀YN ~ < Ԅ„  T4'r*flr `.@pWP Draw 3.0 Drawing Embed SourceWPDraw30.Drawingࡱ; ࡱ; `      ----$   ---- BOlePartOlePres000! -----C V ࡱ; ࡱ;  METAFILEPICT]h      ----$   ---- ! -----C V 4#,2Quick A.9  .0 9((3$ !      0  (#$  0    $'    & &XXԢNDWACSmallSystemsWorkingGroupDiscussionDraft"DoNotCiteorDistribute#XX &&-#& &XX   #XX &&˿#&0 d dTABLE AWPC& ^"pXXXX,,,,519V+ 1**! }v  L`6`65Pq 0 @jJLP saPSpR l L6DPU^ f&w 8FV?&;WrGvSfv t3>n~.;~4 6n`7RPfXplfPj&_ >?%f'f& t.vȨu$u=f8%fxwF&O gߊN> %=<%FVf~tDt>;t @]$    Z  1n  /%'"F#%G,W.fğs‹&?!p@(12Ń.n%HZQ-.h jh*TB:DG0G/1AoG W eG~W u(C"f+@XG /( ǃ] V&*_#b 0K [YpvKiD_#7FoIT$[n*jrV&0AT 5Ɂp-JzW#[%[[[2BA\@<]]]茽?]]~t_ V ~ k C|EIzkCDQ+N&O Fk GJz](]]^u%0f $ L*Ht,HI2b0Quick 0 WPC\j"pXXXX,,,,519@4-+ 1!jj.- "*!7r{BEB 7r{GAG-+1, 7r{AGWGWAG-+ 1WPWin 6.0/OLE 1.0 Prefix Information MarkerWPDraw30.Drawingࡱ; Root Entry`.@p/CHOle 9WPG20CompObj^ )F! WPWin61[6]ࡱWPC\j"pXXXX,,,,519@4-+ 1!jj.- "*!7r{BEB 7r{GAG-+1, 7r{AGWGWAG-+ 1 `.@pWP Draw 3.0 Drawing Embed SourceWPDraw30.Drawingࡱ; ࡱ; b!4`   4b!   D ----$?141 ?---- BOlePartOlePres000!8----ࡱ; ࡱ;  METAFILEPICTb!hb!4   4b!   D ----$?141 ?---- !8----OP*OLE*WPC\j"pXXXX,,,,519-+ 1!jj.- "*!7r{BEB 7r{GAG-+1, 7r{AGWGWAG-+ 1<,<"|+|,|M~.WPWin 6.0/OLE 1.0 Prefix Information MarkerWPDraw30.Drawingࡱ; Root Entry`.@p urHOle 9WPG20CompObj^ )F! WPWin61[6]ࡱWPC\j"pXXXX,,,,519-+ 1!jj.- "*!7r{BEB 7r{GAG-+1, 7r{AGWGWAG-+ 1<,<"|+|,|M~. `.@pWP Draw 3.0 Drawing Embed SourceWPDraw30.Drawingࡱ; ࡱ; b!4`   4b!   D ----$?141 ?---- BOlePartOlePres000!8----ࡱ; ࡱ;  METAFILEPICTb!hb!4   4b!   D ----$?141 ?---- !8----WPWin 6.0/OLE 1.0 Prefix Information MarkerWPDraw30.Drawingࡱ; Root Entry`.@p|jOle 9WPG20CompObj^ )F! WPWin61[2]ࡱWPC& ^"pXXXX,,,,519V+ 1**! }v  L`6`65Pq 0 @jJLP saPSpR l L6DPU^ f&w 8FV?&;WrGvSfv t3>n~.;~4 6n`7RPfXplfPj&_ >?%f'f& t.vȨu$u=f8%fxwF&O gߊN> %=<%FVf~tDt>;t @]$    Z  1n  /%'"F#%G,W.fğs‹&?!p@(12Ń.n%HZQ-.h jh*TB:DG0G/1AoG W eG~W u(C"f+@XG /( ǃ] V&*_#b 0K [YpvKiD_#7FoIT$[n*jrV&0AT 5Ɂp-JzW#[%[[[2BA\@<]]]茽?]]~t_ V ~ k C|EIzkCDQ+N&O Fk GJz](]]^u%0f $ L*Ht,HI `.@pWP Draw 3.0 Drawing Embed SourceWPDraw30.Drawingࡱ; ࡱ; w9%   %w9  m- -%Ap#a1RAES8f-|" 1Lf "BOlePartOlePres000-8ERap#()(##0;FOVf\L`1cdc`\VO|Ff;S0A#1#-fvjF^S&&_hfv&\0ࡱࡱ;  METAFILEPICTw9aw9%   %w9  m- -%Ap#a1RAES8f-|" 1Lf "-8ERap#()(##0;FOVf\L`1cdc`\VO|Ff;S0A#1#-fvjF^S&&_hfv&\0Table_A C"    N:` hp x (#%'0*,.XN TechnicalCapacity  Xp$XXXS#XX$XXp#  " C"  C # $#CT@` hp x (#%'0*,.XT2"3  0 , Ownershipaccountability, ,  2"3  0 , Staffingandorganization, ,  2"3  0 , Effectiveexternallinkages, ,   C"    N:` hp x (#%'0*,.XN FinancialCapacity  $ ZD:\SMALLSYS\GUIDANCE\FINAL3\GRAPHICS\PIE2.WMF3 ShadowdZdWPC'j*" j*" 9!$j*" ƚh'^m Q ^ +'h'^ --h'^ j 3 j j- -$ j <A'OL3 j  j%G j j-$ j G%xaj  j %G j j-$j G%j  j   j j-"$j %  <D [ nZ m [ 1 j  j   j j///-$j   j  j   j j-$j   j  jk  j j-$j kG j  j 3k j j-.$j 3 /J "  } (x7c"vO]$<.kj 1"Arial[- --2 }Investor Owned:rgsg:rD9srs 2 M18.1%rs9r (2 Homeowners AssociationrrsrsDg9ghrh.r:.rs 2 {12.1%rs9r '2 8Other Privately Owned9rrD:D.hr:r.h9srr  2 X 4.4%r9s 2 wMobile Home Parkrs..s9sr:rDh 2 (22.3%rs9r 2 S Institution9rh9.:r9.sr  2 "3.5%r9s 2 Other Ancillary:rrD9rh./.rDh  2 4.8%s9r 2 o Special Districtrrh.s.9/g9D/g9  2  5.7%s9r 2 HXOther Government9rrD:rhrDrrr: 2 \29.1%sr9r"Arial- Q2 +1Ownership of Systems Serving Population 101 - 500ddydx@ddeexdeexe"Arials- %2 ;(Percent of Systems)NNtAAAAttAtN^&^  -%^&Z&Z$-%Z& uu u -%u u  %    %   HH H%H H l % l  %  "k" "%" "k rr r%r r  %  ~ % ~ FF F%F F s % s   %  = =b= % =b= J % J}< }}< %< }} \ % \( ( %( Z ZSZ % ZSZg g %g @ @@ % @@ D % D   %    D %  D ] ] H] % ] H]    %    6 % 6 6  6 6  % 6 6  >  $  > %> $ - Courier-``1`j*" , \ }l MR&kSY_ %x\;`x?}VZ4QEcHVnl }l 1T }l P}@xJ waVd5VdrvaHlMR&k}l 1,}l ),SEP}@}l |}l  W p W  jޜ R̘ 3}m P j] l cp T% f^ RN % 8 I * )}l 1///,}l g v i W p }l 1,}l z` D# Eg v}l 1,}l '7׭qiPz` D}l 1}l HVnl i*`: [ $l_ 6 NV /3#c3%7qKS_cW^c}ViP&?gÏb{aQ VRS{SwO>l'7׭}l aKJ###?%2A`Arial?   InvestorOwnedK[###?%2A`Arial?   18.1%lNU###?%2A`Arial?   HomeownersAssociation* ###?%2A`Arial?   12.1%bC_###?%2A`Arial?   OtherPrivatelyOwned_M" ###?%2A`Arial?   4.4%#n###?%2A`Arial?   MobileHomeParkMy%###?%2A`Arial?   22.3%u###?%2A`Arial?   InstitutionX} ###?%2A`Arial?   3.5%&b###?%2A`Arial?   OtherAncillary= r###?%2A`Arial?   4.8%p/ ###?%2A`Arial?   SpecialDistrictl &###?%2A`Arial?   5.7% oC###?%2A`Arial?   OtherGovernmentZ.###?%2A`Arial?   29.1%XBe|||?%2A`Arial?    OwnershipofSystemsServingPopulation101-500 ej?%2A`Arial?   (PercentofSystems)eP۔),$$``2)2,  ' 'Np0G 0G^{~8J 8J"["X "XpI pI9 9<Vd <S+Krm Kr%}X9 XrO. O. *,Vd ,OA?]"0 A?]}Dy{ k'>>k'O+ KJKJF p7 p7FO Np NpRN t|at2 fYfCK Wj c+Wj8 6TI6cp E#BE a ۼe N N d{ D  e ` _` ?  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WPWin61[2]ࡱWPC& ^"pXXXX,,,,519V+ 1**! }v  L`6`65Pq 0 @jJLP saPSpR l L6DPU^ f&w 8FV?&;WrGvSfv t3>n~.;~4 6n`7RPfXplfPj&_ >?%f'f& t.vȨu$u=f8%fxwF&O gߊN> %=<%FVf~tDt>;t @]$    Z  1n  /%'"F#%G,W.fğs‹&?!p@(12Ń.n%HZQ-.h jh*TB:DG0G/1AoG W eG~W u(C"f+@XG /( ǃ] V&*_#b 0K [YpvKiD_#7FoIT$[n*jrV&0AT 5Ɂp-JzW#[%[[[2BA\@<]]]茽?]]~t_ V ~ k C|EIzkCDQ+N&O Fk GJz](]]^u%0f $ L*Ht,HI `.@pWP Draw 3.0 Drawing Embed SourceWPDraw30.Drawingࡱ; ࡱ; w9%   %w9  m- -%Ap#a1RAES8f-|" 1Lf "BOlePartOlePres000-8ERap#()(##0;FOVf\L`1cdc`\VO|Ff;S0A#1#-fvjF^S&&_hfv&\0ࡱࡱ;  METAFILEPICTw9aw9%   %w9  m- -%Ap#a1RAES8f-|" 1Lf "-8ERap#()(##0;FOVf\L`1cdc`\VO|Ff;S0A#1#-fvjF^S&&_hfv&\0`a*OLE*WPC& ^"pXXXX,,,,519V+ 1**! }v  L`6`65Pq 0 @jJLP saPSpR l L6DPU^ f&w 8FV?&;WrGvSfv t3>n~.;~4 6n`7RPfXplfPj&_ >?%f'f& t.vȨu$u=f8%fxwF&O gߊN> %=<%FVf~tDt>;t @]$    Z  1n  /%'"F#%G,W.fğs‹&?!p@(12Ń.n%HZQ-.h jh*TB:DG0G/1AoG W eG~W u(C"f+@XG /( ǃ] V&*_#b 0K [YpvKiD_#7FoIT$[n*jrV&0AT 5Ɂp-JzW#[%[[[2BA\@<]]]茽?]]~t_ V ~ k C|EIzkCDQ+N&O Fk GJz](]]^u%0f $ L*Ht,HIWPWin 6.0/OLE 1.0 Prefix Information Marker WPDraw30.Drawingࡱ; Root Entry`.@pjOle 9WPG20CompObj^ )F! WPWin61[2]ࡱWPC& ^"pXXXX,,,,519V+ 1**! }v  L`6`65Pq 0 @jJLP saPSpR l L6DPU^ f&w 8FV?&;WrGvSfv t3>n~.;~4 6n`7RPfXplfPj&_ >?%f'f& t.vȨu$u=f8%fxwF&O gߊN> %=<%FVf~tDt>;t @]$    Z  1n  /%'"F#%G,W.fğs‹&?!p@(12Ń.n%HZQ-.h jh*TB:DG0G/1AoG W eG~W u(C"f+@XG /( ǃ] V&*_#b 0K [YpvKiD_#7FoIT$[n*jrV&0AT 5Ɂp-JzW#[%[[[2BA\@<]]]茽?]]~t_ V ~ k C|EIzkCDQ+N&O Fk GJz](]]^u%0f $ L*Ht,HI `.@pWP Draw 3.0 Drawing Embed SourceWPDraw30.Drawingࡱ; ࡱ; w9%   %w9  m- -%Ap#a1RAES8f-|" 1Lf "BOlePartOlePres000-8ERap#()(##0;FOVf\L`1cdc`\VO|Ff;S0A#1#-fvjF^S&&_hfv&\0ࡱࡱ;  METAFILEPICTw9aw9%   %w9  m- -%Ap#a1RAES8f-|" 1Lf "-8ERap#()(##0;FOVf\L`1cdc`\VO|Ff;S0A#1#-fvjF^S&&_hfv&\0hD:\SMALLSYS\GUIDANCE\FINAL3\GRAPHICS\PIE3.WMF  C"  C # $#CT@` hp x (#%'0*,.XT2"3  0 , Sourcewater  adequacy ,, 2"3  0 , Infrastructure  adequacy(includingsource,treatment,storage,distribution) ,, 2"3  0 , Technicalknowledge  andabilitytoimplementit C"    ShortandLongtermPlanning   XX) 2# )z##XX [# TABLE A D$    2    ݀,XXThetermcapabilityissynonymouswithcapacityforthepurposesofthisprovisionoftheAct.#XX,D#WPC'j*" j*" 9!$j*" ƚh'^m <T ^ +'h'^ --h'^    - -$  Y )( W  g    -$ g  g$      _ g   -$ _ R g     _   - $  _       ///-$ 4         - $     @    -$ @    @   -F$! bRZ6E  - h M' DFA,v 3L? @ 1"Arial- --2 ` Investor Owned9rhrh9rD9rsr 2 uI 13.9%sr9s (2 4Homeowners AssociationssrsrDg:hgrh.s9.rs  2 H9.1%r9r '2 9Other Privately Owned9srD9D.hr9s.g:rsr  2 N 3.6%r9s (2 C Mobile Home Park 2.9%rr/.r:rr9rDh99r:r %2  Other Ancillary 1.7%9srD9rh../rDh9r9s (2 .Special District 5.3%rsg.s.9.g:D.g:99r9s 2 Other Government9rrD:rhrDrrr: 2 !63.4%rs9r"Arial- T2 +3Ownership of Systems Serving Population 501 - 3,300eexey?eeddydddyde"Arialo- %2 ;(Percent of Systems)NNtAAAAttAtN^&^  -%^&Z&Z$-%Z&1"Arial- -!2 < Institution 0.2%9rh9.:r9.sr99s9r &  &  -%&     %  A  ] A %A ] P n P P n %n P P  __ _%_ _v%vV%V>2(2>2%2>2(}}}%}}ss%s   %  \\\%\\D $ D % D $q  q % q - Courier- % J}1`j*" , \ f"Z (ȓ G21^sa=>9!..p0P{=sW4 9z<fMf"Z 1<f"Z 2 Q| Y 헰 P(ȓ Gf"Z 1,f"Z ) t  "Z 2 f"Z $f"Z Nk ^9 ) t f"Z 1///<f"Z &! u M{ ~ĉ & ՘ Nk ^9 f"Z 1$f"Z  ī &! u f"Z 1,f"Z  Iw  ī f"Z 1 !f"Z fM-J˵@ǻz*W<T/80'4z]$cBWeM, "Z S% A B_ g |B-i Y8 fF8$L:mN_k-%ul-ZxFC/ծ9[<i qfё6Fw;\% If"Z ̡k d)###?%2A`Arial?   InvestorOwned`9 U,###?%2A`Arial?   13.9%&###?%2A`Arial?   HomeownersAssociation!####?%2A`Arial?   9.1%<4O###?%2A`Arial?   OtherPrivatelyOwnedEvER###?%2A`Arial?   3.6%] ###?%2A`Arial?   MobileHomePark2.9%x ###?%2A`Arial?   OtherAncillary1.7%w###?%2A`Arial?   SpecialDistrict5.3%B?!S ###?%2A`Arial?   OtherGovernment{#ae ###?%2A`Arial?   63.4%لe|||?%2A`Arial?    OwnershipofSystemsServingPopulation501-3,300 ej?%2A`Arial?   (PercentofSystems)eP۔),$$``2)2Gi: ###?%2A`Arial?   Institution0.2%, 출 f m Gn vu Gn b0   i: ;^- n;^- x xUHd _*d -H1H uDhu}Qx1ֆ6ʹֆ2;v2D+Uv2  t tCY tS S9 C  (  $     & &XXԢNDWACSmallSystemsWorkingGroupDiscussionDraft"DoNotCiteorDistribute #XX &&H#& &XX  #XX &&#  kD:\SMALLSYS\GUIDANCE\FINAL3\GRAPHICS\PIE4.WMFWPC'j*" j*" 9!$j*" 8 ƚh'^m X ^ +'h'^ --h'^\ 1%% %1\ 1\ 1- -$ 1\ % % kz\\91%1\ \ 1. %% \ 1\ 1-$1\ .Y 5% %1\ \ 1 . \ 1\ 1-$1\   .1\ \ 1@ ~ \ 1\ 1-$1\ @ ` X ~1\ \ 1x @ \ 1\ 1-$1\ x h \ @1\ \ 1%1x \ 1\ 1-J$#1\ 1%"/(a{hHL4,V\ I D >idFrYt%Ko`3> O   2 q x 1\ 1"Arial- --2 ('Investor Owned9rhrh9rD9rsr 2 =12.8%sr9s 12 Homeowners Association 4.0%rrrrrDh9ghrh.r9/rr:9r9s 02 _Other Privately Owned 4.6%9rrD:D.hr9s.h9srr9:r9r !2 Institution 0.1%9sg9/9r9/rr:9r9s '2 JqOther Ancillary 0.4%:rrD9rh./.rDh99r:r 2 ( ]Special Districtsrg/r.:.h9D.h9  2 = 6.2%r9s 2 @ Other Government9srD9sgrDssr9 2 U "71.9%sr9r"Arial- X2 +6Ownership of Systems Serving Population 3,301 - 10,000eeydy?edddyddeexee"Arial- %2 ;(Percent of Systems)NNtAAAAttAtN^&^  -%^&Z&Z$-%Z&$ kk$ k -%k$ k  % %6>>6>%>6>m%m%PP%PhChh%hhC   %  (  ( % ( - Courier->2 1`j*" , L mM J&)T2wvԨU+>@mM 1,mM ;u "~J FFJ&mM 1,mM x  I(;u "~mM 14mM tGg Vm 5y̡k pWu u}mM 1,mM tGg qhn rnzwD mM M7 M% ú qz e"S[<tRȔp(/e5Xn;A6"ʭ@W ݑ-A߶P ]nWw =f4 G h) tGg v ###?%2A`Arial?   6.2%(D" ###?%2A`Arial?   OtherGovernment褞$ ###?%2A`Arial?   71.9%Le|||?%2A`Arial?    OwnershipofSystemsServingPopulation3,301-10,000 ej?%2A`Arial?   (PercentofSystems)eP۔),$$``2)2, ](%IIóhULthUVZV_Z*Rye!y#(k}k*[?*[?r1JMցLMցlDm}Dm) o) "TABLE BoD:\SMALLSYS\GUIDANCE\FINAL3\GRAPHICS\PIE5.WMFWPC'j*" j*" 9!$j*"  ƚh'^m T ^ +'h'^ --h'^ G= ( G G- -$G = / N(G  G =  G G- $G = G  GD~   G G- $G ~ D G  GH 6w  G G-$G H ~  $ 1w 6G  G(H  G G-T$(G (!SnHzLei8   Qt]Rw 9D0f6{ 5   z O4 9 H G 1"Arial- --2 , Investor Owned 9sgrh9sC:rsr99  2 L 9.8%r9s 12 (Homeowners Association 1.0%rrrrrDh9hhrg/r9/rr9:r9r 02 ,(Other Privately Owned 1.4%:rrD9D.hr9s.g:rsr99s9r !2 0Institution 0.1%:rg:.9r:.rs99r9s "2 "Special District srh.r/9.h9D/g99:  2 8 9.9%r:r 2 Other Government:rrD9sgsDrrr9 2  77.8%rr9s"Arial- O2 +O0Ownership of Systems Serving Population > 10,000ddydx@ddeexeede"Arial- %2 ;(Percent of Systems)NNtAAAAttAtN^&^  -%^&Z&Z$-%Z& d   -% d  \t\ \%\ \tt%tp%p:L::%::L%%D%D]]]%]]    %  i  i % i - Courier-E 1`j*" , < {, '0^4eIB(,|M:} 1$ e{,  1$ ^ Gܕ e 1D +t $ QK od[ " CDL m[W < 1D( |M:}vU:K"pʩoIzq;"~>ULc0$la]<胕 /u/yB(2 8~E *N=\ {.O u ̀' Q &Q 꾠hK|vYAIբUwbǓTt xnSQn%t1? 9JUXXCY78~ǒ _: C :} Gs3 X +t $  j ####?%2A`Arial?   InvestorOwned( 5###?%2A`Arial?   9.8%HHÞ###?%2A`Arial?   HomeownersAssociation1.0%?>$###?%2A`Arial?   OtherPrivatelyOwned1.4%}ieD###?%2A`Arial?   Institution0.1%W]6###?%2A`Arial?   SpecialDistrict|:###?%2A`Arial?   9.9%{&! ###?%2A`Arial?   OtherGovernmentu\#/ ###?%2A`Arial?   77.8%-|e|||?%2A`Arial?    OwnershipofSystemsServingPopulation>10,000 ej?%2A`Arial?   (PercentofSystems)eP۔),$$``2)2, gggi$$]Y[(CuM#kMIlM?ėå/X>4  (vqD:\SMALLSYS\GUIDANCE\FINAL3\GRAPHICS\PIE1.WMFWPC'j*" j*" 9!$j*" ƚh'^m g O ^ +'h'^ --h'^ j 3 j j- -$ j &,VE3 j  j j j-$ j .Y+{j H},j  j  j j-$j  j  j0  j j-"$j 0RKG A s E e  }'   j  j*0 j j///-$j *S0j  jT* j j-$ j TvO`8b*j  jDT j j- $j DTj  j 3D j j-$ j 3 3 0X $   Dj 1"Arial- --2 }Investor Owned:rgsg:rD9srs 2 M17.8%rs9r (2 Homeowners AssociationrrrrrDh9hhrg/r9/rr 2 16.4%sr9r '2 e$Other Privately Owned9srD9D.hr9r/g9rsr  2 zD5.3%s9r 2 Mobile Home Parkrs..s9sr:rDh 2 (33.3%rs9r 2 $ Institution9rh9.9s9.rs  2 84.1%r9r 2 wOther Ancillary9srD9rh../rDg 2 215.4%rr:r 2 Special Districtrsg/r.9.h9D.h9  2 0.7%r:r 2 & Other Government9srD9sgsDrsr9  2 ; 7.0%r:r"Arial- O2 +|0Ownership of Systems Serving Population 25 - 100deydy@dddeydeexe"Arial- %2 ;(Percent of Systems)NNtAAAAttAtN^&^  -%^&Z&Z$-%Z& tt t -%t t   %    %  GG G%G G { % {  %  !s! !%! !s qq q%q q  %  2 % 2 EE E%E E < % <   %  $  $ %$  S S S % S Sg g %g % % %% 0 0e0 % 0e0{ {T{ % {T{  ? % ?   & %  & ] ] Y] % ] Y]   : % :   & % & 3  3 3  % 3 3 z D z z D %D z z   %      %  Wc WWc %c WW  %  w % w-Z -U-Z %Z -U-x]x>x]%]x>x"%"- Courier-"+"YB1`j*" , \ }l )V!-R t om^-c`RW+\HVnl }l 1l }l A%fPWVqZog2N:I`}Vd9VdI`{[5y38)V}l 1,}l ? \ >\E t.b t Y2 xخxW m^CK Y.ͥYˌ ???Pk ĆĆZc n 출n ޗ_ N uN _x 5 $5  s[ 출s[ u H yH ^ _3 5g_3 ` p ~Hp 5 Vd)VdA [7 [$B BLBL{ O]83O]Z2_PݳPHuvv&UɄ&U  C"  C # $#CT@` hp x (#%'0*,.XT2"3  0 , Revenuesufficiency, ,  2"3  0 , Creditworthiness, ,  2"3  0 , Fiscalmanagementandcontrols, ,    (   & &XX  NDWACSmallSystemsWorkingGroupDiscussionDraft"DoNotCiteorDistribute #XX &&!#  (     & &XXNDWACSmallSystemsWorkingGroupDiscussionDraft"DoNotCiteorDistribute #XX &&-#  (   & &XX  NDWACSmallSystemsWorkingGroupDiscussionDraft"DoNotCiteorDistribute #XX &&!#            !!""##$$%%&&''(())**++,,--..//00112233445566778899::;;<<==>>??@@TABLE C!8!!!!!!!!!!!! ! ! ! ! ! !!!!!!!!!!!!!!!!!!!!!!! !!!"!"!#!$!%!&!'!'!(!)!*!+!,!-Table_A!)H HHH?HH@HH@H0@H@HH@HTABLE AHc ccc?cc@cc@cTABLE Acl lll?ll@ll@lTABLE Bl p C"    Technical,  Managerial,andFinancialCapability    & &XX NDWACSmallSystemsWorkingGroupDiscussionDraft"DoNotCiteorDistribute #XX && #   '  I  6     F$.bullet6,34 bullet0  "0` (#(# !  ݛxxXX   EPA ` 0 GuidanceforStateson  ImplementingtheCapacityDevelopmentProvisionsoftheSafeDrinkingWaterAct @  (# (# #XXxx#O7XXIncludes:0  R O7GuidanceforStatesonEnsuringthatAllCommunity   WaterSystemsandNontransient,NoncommunityWaterSystemsDemonstrateTechnical,Managerial,andFinancialCapacity  (# (# 0  0` (#(#0 ` (#` (#GuidanceforStatesonMinimumRequirementsforStateCapacityDevelopmentStrategies(toAvoidSRFWithholding)#O7  RY#  (# (# 0  0` (#(#0 ` (#` (# R O7GuidanceforStatesonAssessmentofCapacityforthe | PurposesofAwardingSRFAssistance#O7  Rl#  (# (# ?S' xdEx?   R O7PreparedfortheSmallSystemsWorkingGroupNationalDrinkingWaterAdvisoryCouncilRevisedFINALDRAFT̀Donotciteordistribute#O7  R# Y(#  R O7 _ July19,1997!  #O7  R# '+w&  g,'     R O7SmallSystemsWorkingGroupMembers#O7  R9#  (z Xz (#(#(XXO7KevinBrown ~ DivisionofDrinkingWaterUtahDepartmentofEnvironmentalQualityJackBryckDayton&Knight,Ltd.JudyChambersBoroughManager,Mercersberg,PA̢MaryGaiskiPennsylvaniaManufacturedHousingAssociationJasonGrayVirginiaWaterProject,Inc.RobertHintonPublicStaffNorthCarolinaUtilitiesCommission  >  DianeKieslingCommissionerFloridaPublicServiceCommissionTedMichaelsNaturalResourcesGroupNationalGovernorsAssociationDavidMonieSBWaterCompany,NJGaryMorganRuralUtilitiesServices,USDABridgetOGradyAssociationofStateDrinkingWaterAdministrators  ,^') &   YvettedePeizaDivisionofWaterSupplyMass.Dept.ofEnvironmentalProtection'~ TeresaRissmillerMountJoyTownshipAuthority,PAPeterE.ShanaghanOfficeofGroundwaterandDrinkingWater,U.S.EPAJimSheldonCedarKnoxRuralWaterProject,NEJohnP.SheltensCityofHotSprings,SDDonnaShellEnvironmentalInformationCenter,VARichSiffertDrinkingWaterDivisionWashingtonDepartmentofHealthGeraldSmithDrinkingWaterProtectionMinnesotaDepartmentofHealthWilliamA.VanDeValkLamont,VanDeValkEngineers,P.C.JulieWardGreatLakesRuralCommunityAssistanceProgramRitaWaycoU.S.EPA,Region4  >)$M (z Xz **(XXXX R XX 'STableofAcronyms  X XX  R XX(XX%X%(*}27,ddd Xdd Xdd XXX},dd ,/ dd +  $  $Acronym 4*d "G 4Meaning 0&$d "  G 0AHERA  T AsbestosHazardEmergencyResponseAct  T AMHI   AdjustedMedianHouseholdIncome    AMWA  <   AssociationofMetropolitanWaterAgencies  <   ASDWA   ,  AssociationofStateDrinkingWaterAdministrators   ,  AUC   t  AnnualUserCharges   t  AWWA    AmericanWaterWorksAssociation    BAT  \  BestAvailableTechnology  \  CCE  L  ComprehensiveComplianceEvaluation  L  CCN   CertificatesofConvenienceandNecessity   CCP  4 CompositeCorrectionProgram  4 CCR  |$ ConsumerConfidenceReport  |$ CERCLA  l ComprehensiveEnvironmentalResponse,Compensation,andLiabilityAct  x  CFR  h CodeofFederalRegulations  h  CG  ! CapitalizationGrant  " CIP  P# CapitalImprovementPlan  P$ CPE  @% ComprehensivePerformanceEvaluations  @& CWS  ' CommunityWaterSystem  ( DEP  () DepartmentofEnvironmentalProtection  (* DOH  p+ DepartmentofHealth  p, DWRSF  `- DrinkingWaterStateRevolvingFund  `. EDU  !/ EquivalentDwellingUnit  !0 EPA  H"1 EnvironmentalProtectionAgency  H"2 EWS  #8!3 EarlyWarningSystem  #8!4 FVT  $"5 FinancialViabilityTest  $"6 G&A    GeneralandAdministrative    GODebt  h'%9 GeneralObligationDebt  h'%: IRS  (X&; InternalRevenueService  (X&< IUP  )'= IntendedUsePlan  )'> LIHEAP  @+(? LowIncomeHomeEnergyAssistanceProgram  @+(@ MABEL  ,0*A MunicipalitysAbilitytoPayModel  ,0*B MCL  -x+C MaximumContaminantLevel G -x+D MHI )G/,EG )MedianHouseholdIncome 7GG&/,FG 7Acronym ;GG*d G"GG ; Meaning 0&$d H"  GG 0MOU  TI MemorandumofUnderstanding  TJ NARUC  K NationalAssociationofRegulatoryUtilityCommissioners  PM NAWC   N NationalAssociationofWaterCompanies   O NCWS  8 P Noncommunitywatersystems  8 Q NDWAC   ( R NationalDrinkingWaterAdvisoryCouncil   ( S NETA   p T NationalEnvironmentalTrainingAssociation   p U NPDWR   V NationalPrimaryDrinkingWaterRegulations   W NRRI  XX NationalRegulatoryResearchInstitute  XY NRWA  HZ NationalRuralWaterAssociation  H[ NTNCWSorNTNC  D] Nontransient,NoncommunityWaterSystem  ^ O&M  _ Operationsandmaintenancecost  ` OGWDW  ,a OfficeofGroundWaterandDrinkingWater  ,b PACNIF  tc afinancialcapabilitiesmodelusedbyPENNVEST  td PIPPS  de Percentageofincomepaymentplans  df POTW  g PubliclyOwnedTreatmentWorks  h PUC  Li PublicUtilityCommission  Lj PWS  <k PublicWaterSystem  <l RCAP  m RuralCommunityAssistancePrograms  n RCRA  $o ResourceConservationandRecoveryAct  $p RCW  l q RevisedCodeofWashington  l r RUS  !\s RuralUtilityService  !\t S&P  " u Standard&Poors  " v SDWA  D$!w SafeDrinkingWaterAct  D$!x SDWIS  %4#y SafeDrinkingWaterInformationSystem  %4#z SRF  &|${ StateRevolvingFund  &|$| TNCsorTNCWS  (x&~ TransientNoncommunityWatersystems  (% TNRCC  *' TexasNaturalResourceConservationCommission  *' TSC  `+) TargetServiceCharge  `+) WAC  ,P* WashingtonAdministrativeCode  ,P* WQS  -+ WaterQualityStandards  -+ WUFS  8/, WaterUtilityFinancingStudy 8/, @ #XX _ # 0- 'SX  XX(X(O7XX TableofContents #XXO7##  Chapter1:0 ` IntroductiontoTechnical,Managerial,n` (#` (#    ` andFinancialCapacityofWaterSystems@"@"H(#.PP;I1 ^ Chapter2:0 ` GuidanceforStatesonEnsuringthatAll >` (#` (#    ` CWSsandNTNCWSsDemonstrateTechnical,   ` Managerial,andFinancialCapacity!!G(#.6II1   Chapter3:0 ` GuidanceforStatesonMinimumRequirements ` (#` (#    ` forStateCapacityDevelopmentStrategies   ` (ToAvoidSRFWithholding)!!F(#..III1 b  Chapter4:0 ` GuidanceforStatesonAssessmentofCapacityB ` (#` (#    ` forPurposesofAwardingSRFAssistance!!G(#.;IV1  2 Т֣    xxXXCHAPTER1:  #XXxx%(#xxXXIntroductiontoTechnical,Managerial, ` andFinancialCapacityofWaterSystems#XXxx(#  D  AS) xdEcxA d   R XXPreparedforthe c  SmallSystemsWorkingGroupNationalDrinkingWaterAdvisoryCouncilRevisedFINALDRAFTDonotciteordistribute#XX  R)# _  R XX _ July19,1997!  #XX  R*# S   c 7XXdd7 B.Xxp 0 hXXBINTRODUCTION     The1996AmendmentstotheSafeDrinkingWaterAct(SDWA)placestrongemphasisontechnicalcapacity,managerialcapacity,andfinancialcapacityasintegralcomponentsoftheimplementationstrategiesoftheAct.TheAmendmentscreateafocusonenhancingandensuringthetechnical,financial,andmanagerialcapacityofwatersystemstocomplywithNationalPrimaryDrinkingWaterRegulations(NPDWRs).ToavoidreductioninitsDrinkingWaterStateRevolvingFund(DWSRF)allotment,eachStateisrequiredtoobtainlegalauthorityorothermeanstoensurethatnewsystemshaveadequatecapacity,andtodevelopandimplementastrategytoassistexistingsystemsinacquiringandmaintainingcapacity:  .0  "0(#(#  Section1420(a): STATEAUTHORITYFORNEWSYSTEMS-AStateshallreceiveonly80 fP  percentoftheallotmentthattheStateisotherwiseentitledtoreceiveundersection1452(relatingtoStateloanfunds)unlesstheStatehasobtainedthelegalauthorityorothermeanstoensurethatallnewcommunitywatersystemsandnewnontransient,ϢnoncommunitywatersystemscommencingoperationafterOctober1,1999,demonstratetechnical,managerial,andfinancialcapacitywithrespecttoeachnationalprimarydrinkingwaterregulationineffect,orlikelytobeineffect,onthedateofcommencementofoperations...݌(#(# Ќ    10  "0(#(#  Section1420(c): CAPACITYDEVELOPMENTSTRATEGY-(1)INGENERAL-Beginning  4yearsafterthedateofenactmentofthissection,aStateshallreceiveonly--(A)90percentinfiscalyear2001;(B)85percentinfiscalyear2002;and(C)80percentineachsubsequentfiscalyear,oftheallotmentthattheStateisotherwiseentitledtoreceiveundersection1452(relatingtoStateloanfunds),unlesstheStateisdevelopingandimplementingastrategytoassistpublicwatersystemsinacquiringandmaintainingtechnical,managerial,andfinancialcapacity.12݌v`(#(# Ќ    TheActalsoprovidesthattheEnvironmentalProtectionAgency(EPA)willassistStatecapacitydevelopmenteffortsbyprovidinginformationandguidance:  50  "0(#(#  Section1420(d): FEDERALASSISTANCE-(1)INGENERAL-TheAdministratorshall &# supporttheStatesindevelopingcapacitydevelopmentstrategies.(2)INFORMATIONALASSISTANCE-(A)INGENERAL-Notlaterthan180daysafterthedateofenactmentofthissection,theAdministratorshall--(i)conductareviewofStatecapacitydevelopmenteffortsinexistenceonthedateofenactmentofthissectionandpublishinformationtoassistStatesandpublicwatersystemsincapacitydevelopmentefforts...(4)GUIDANCEFORNEWSYSTEMS-Notlaterthan2yearsafterthedateofenactmentofthissection,theAdministratorshallpublishguidancedevelopedinconsultationwiththeStatesdescribinglegalauthoritiesandothermeanstoensurethatallnewcommunitywatersystemsandnewϢnontransient,noncommunitywatersystemsdemonstratetechnical,managerial,andfinancialcapacitywithrespecttonationalprimarydrinkingwaterregulations. 55݌,p&)(#(#    v-`'*   Enhancingandensuringthetechnical,financial,andmanagerialcapacityofsmallwater systemsiswidelybelievedtooffergreatpotentialforcorrectingandpreventingnoncompliancewithNPDWRsandforensuringreliablysafedrinkingwater.ThecapacitydevelopmentprovisionsintheActofferasimpleandflexibleframeworkwithinwhichStatescanorganizetheireffortstoaddressthechallengesfacingsmallsystems.Statesareprovidedthelatitudetodesignandimplementsystemsthataretailoredtotheiruniqueneedsandcircumstances.  ThischapterpresentsthebackgroundinformationnecessarytounderstandtheGuidancedocumentsthatareprovidedinChapters2through4toassiststatesinimplementingthecapacitydevelopmentprovisionsintheAct.Includedinthischapterare:1)atimelinedescribingtheissues,purposes,anddeadlinesforeachoftheGuidancedocuments;2)adiscussionofthedemographicsofsystemsaffectedbytheprovisions;and3)workingdefinitionsoftechnical,managerial,andfinancialcapacitythatwillbeusedthroughoutthisdocument. CAPACITYDEVELOPMENTGUIDANCETIMELINE  &   ThisvolumecontainsthreeGuidancedocumentstoassistthestatesinimplementingthecapacitydevelopmentprovisionsofSDWA.Thosedocumentsare:  0  GuidanceforStatesonEnsuringthatAllNewCWSsandNTNCsDemonstrateTechnical,  Managerial,andFinancialCapacity (#(#   0  GuidanceforStatesonMinimumRequirementsforStateCapacityDevelopmentStrategies  (toAvoidSRFWithholding) (#(#   0  GuidanceforStatesonAssessmentofCapacityforthePurposesofAwardingSRF  Assistance (#(#   Figure2outlinesforeachGuidancetherelatedstatutoryrequirement,theimplementationissueraisedbytherequirement,theproposedGuidance,thecorerequirementsoftheGuidance,andthestatutorydeadlineforpublishingtheGuidance. SYSTEMDEMOGRAPHICS & E#  1      ף $    ThecapacitydevelopmentprovisionsofSDWAapplytoseveraltypesofpublicwatersystems.Severalprovisionsapplytoallpublicwatersystems(PWS),whichinclude:1)communitywatersystems(CWS);2)nontransient,noncommunitywatersystems(NTNCWS);and,3)transient,noncommunitywatersystems(TNCWS).Othersapplyonlytocommunitywatersystemsandnontransient,noncommunitywatersystems.  *$'   Apublicwatersystemisa systemfortheprovisiontothepublicofpipedwaterforhuman consumption,ifsuchsystemhasatleastfifteenserviceconnectionsorregularlyservesanaverageofatleasttwentyfiveindividualsdailyatleast60daysoutoftheyear.(40CFR141.2)Theyincludecommunitywatersystems;nontransient,noncommunitywatersystems;andtransient,noncommunitywatersystems.Approximately172,000publicwatersystemsexistnationwide.  Acommunitywatersystemisdefinedasa systemfortheprovisiontothepublicofpipedwaterforhumanconsumption,ifsuchsystemhasatleastfifteenserviceconnectionsorregularlyservesanaverageofatleasttwentyfiveindividualsdailyatleast60daysoutoftheyear.(40ϢCFR141.2)Thereareapproximately55,000communitywatersystemsservingover246millionpeople.Oftheroughly55,000systems,approximately20percentofsystems(servingover157millionpeople)useasurfacewatersourceorgroundwaterunderthedirectinfluenceofsurfacewater.Theremaining80percentofsystems(servingalmost89millionpeople)receivetheirwaterfromagroundwatersource.  Intermsofsystemsize,slightlyover86percentofcommunitywatersystemsareclassifiedas verysmallor small.AlthoughtheycompriseasignificantmajorityofCWSs,theyservejustover10percentofthepopulationservedbycommunitywatersystems.Roughly8percentofcommunitywatersystemsareclassifiedas mediumsystems;thesesystemsalsoserveapproximately10percentofthepopulationservedbyCWSs.Theremaining6percentofcommunitywatersystemsareclassifiedas largeor verylarge,butthesesystemsservecloseto80percentofthepopulationservedbycommunitywatersystems.Most verysmall, small,and mediumcommunitywatersystemsusegroundwaterastheirprimarysource,whileamajorityof largeand verylargesystemsdrawfromsurfacewatersourcesastheirprimarysupply.  Communitywatersystemscanbeclassifiedintotwomajorownershiptypes"privatelyownedandpubliclyowned.Withintheprivatelyownedcategory,asubstantialnumberofsystemsare ancillarysystems,i.e.,theyprovidewaterasanancillaryfunctionoftheirprincipalbusinessorenterprise.Anexampleismobilehomeparks(Figure1).LikeNTNCWSs,theyprovidewatertotheircustomers,butprovisionofwaterisnottheirprincipalbusiness.Theincidenceofancillarysystemsvariessignificantlybysystemsize.InsmallCWSsservingbetween25and100persons,overhalf(53percent)areancillarysystems.InlargerCWSsservingmorethan10,000persons,only0.1percentareancillarysystems.  Anontransient,noncommunitywatersystemisdefinedas apublicwatersystemthatisnotacommunitywatersystemandthatregularlyservesatleast25ofthesamepersonsover6monthsperyear."(40CFR141.2)Examplesofestablishmentsservedbynontransient,noncommunitywatersystemsincludeschools,factories,office/industrialparks,andmajorshoppingcenters.Mostareprivatelyowned,althoughsomearepubliclyowned(e.g.,schools).Approximately20,000NTNCWSsexistacrossthenation,servingapproximately6millionpeople.Over96percentofnontransient,noncommunitywatersystemsusegroundwaterastheirprimarysource.Theytypicallyaresmallsystems;99percentofNTNCWSsareclassifiedas verysmallor small. z.d(, D   Figure1  OwnershipbySystemSize op;+'`|0 Xpn3' Enx!6e#Vo    (#(#                     (#(#SoX;+'`|0 pn3' Ex!6euVo (#(#                     f.P(+ ob;+'`|0 pn3' Ex!6eVo (#(#                     (#(#oj;+'`|0 0pn3' Ex$/e{Po   on;+'`|0 C pn3' Ex!6eVo (#(#                     (#(#DEFININGCAPACITY     Theconceptofwatersystemcapacitysuggeststhecapabilitytoperformasawatersysteminaccordancewithacceptedperformancecriteria.Capacityencompassesthetechnical,managerial,andfinancialcapacityofthewatersystemtoachieve,maintain,andplanforcompliancewithapplicabledrinkingwaterstandardsgivenavailablewaterresourcesandthecharacteristicsoftheservicepopulation.  Technical,managerial,andfinancialcapacityarethreegeneralbuthighlyinterrelateddimensionsofwatersystemcapacity:   0   Technicalcapacity referstothephysicalinfrastructureofthewatersystem,includingbutnot $  limitedtothesourcewateradequacy,infrastructureadequacy(source,treatment,storage,anddistribution),andtheabilityofsystempersonneltoimplementtherequisitetechnicalknowledge. (#(#    0   Managerialcapacity referstothemanagementstructureofthewatersystem,includingbut ("% notlimitedtoownershipaccountability,staffingandorganization,andeffectivelinkages. (#(#    0   Financialcapacity referstothefinancialresourcesofthewatersystem,includingbutnot +%( limitedtotherevenuesufficiency,creditworthiness,andfiscalcontrols. (#(#   v-`'*   Capacityfocusesattentiononthewatersystemsabilitytotransformsourcewaterintowater thatcomplieswithsafedrinkingwaterstandards.AsillustratedinFigure3,externalfactorsmayimpactasystemsabilitytoachieveandmaintaintechnical,managerial,andfinancialcapacity.Byaffectingcapacity,thesefactorsinfluenceasystemsabilitytoprovidesafedrinkingwatertoitscustomers.Thesefactorscanbegroupedbroadlyintoinstitutionalfactors(suchasregulatoryandpoliticalissues)andsocioeconomicfactors(suchashouseholdincomeofcustomers).Theseexternalfactorsmayhavepositiveornegativeinfluenceonwatersystemcapacityandtheendresultofcompliantdrinkingwater. KEYQUESTIONS  v`    Technical,managerial,andfinancialcapacityareindividualyethighlyinterrelateddimensionsofsystemscapacity,asillustratedinFigure4.Asystemcannotsustaincapacitywithoutmaintainingadequatecapabilityinallthreedimensions.Indicatorsofcapacitywithineachoftheseareascanbeframedbykeysetsofissuesandquestions,includingbutnotlimitedtothefollowing: &  Technicalcapacity     j0  "0(#(#  Sourcewateradequacy.DoesthefinishedwatermeettheprovisionsoftheSDWA?Does  thesystemhaveaccesstoareliablesourceofsafedrinkingwater?Isthesourceadequatelyprotected?jj݌ (#(# Ќ  'j  Cl0  "0(#(#  Infrastructureadequacy.Isthesystemcapableofprovidingwaterthatcomplieswith  ТSDWAstandards?Whatistheconditionofthesystemsinfrastructurecomponents,includingwell(s)and/orsourcewaterintakes,treatment,storage,anddistribution?Whatisthelifeexpectancyofthesystemsinfrastructurecomponents?Doesthesystemhaveacapitalimprovementplan?Cl^l݌ (#(# Ќ    pn0  "0(#(#  Technicalknowledgeandimplementation.Doesthesystemhaveacertifiedoperator?Is 6"  thesystemoperatedwithtechnicalknowledgeaboutapplicablestandards?Arepersonnelabletoimplementthistechnicalknowledgeeffectively?Dotheoperatorsunderstandthetechnicalandoperationalcharacteristicsofthesystem?pnn݌ (#(# Ќ    Managerialcapacity  & #   p0  "0(#(#  Ownershipaccountability.Arethesystemowner(s)clearlyidentified?Cantheybeheld ("% accountableforthesystem?pp݌ (#(# Ќ    q0  "0(#(#  Staffingandorganization.Arethesystemoperator(s)andmanager(s)clearlyidentified? +%( Isthesystemproperlystaffedandorganized?Dopersonnelunderstandthemanagement aspectsofregulatoryrequirementsandsystemoperations?Dopersonnelhaveadequate v-`'* expertisetomanagewatersystemoperations?Dopersonnelhavethenecessarylicensesandcertifications?qq݌ (#(#     t0  "0(#(#  Effectiveexternallinkages.Doesthesysteminteractwellwithcustomers,regulators,and  otherexternalentities?Isthesystemawareofavailableexternalresources?tt݌ (#(# Ќ  Financialcapacity      u0  "0(#(#  Revenuesufficiency.Dorevenuescovercosts?Areratesandchargesforwaterservice   adequatetocoverthecostofservice?uu݌ (#(# Ќ    v0  "0(#(#  Creditworthiness.Isthesystemfinanciallyhealthy?Doesithaveaccesstofinancial fP  capitalthroughpublicorprivatesources?vv݌ (#(# Ќ    w0  "0(#(#  Fiscalmanagementandcontrols.Areadequatebooksandrecordsmaintained?Are 6  appropriatebudgeting,accounting,andfinancialplanningmethodsused?Doesthesystemmanageitsrevenueseffectively?ww݌ (#(# Ќ    Table1providesalistofgeneralindicatorsoftechnical,managerial,andfinancialcapacityofwatersystems.Thislistisnotmeanttobecomprehensive,butrathertoserveasageneralguideforidentifyingkeyissueswithineachdimensionofcapacity.Theindicatorsofcapacityarebroadlyapplicableregardlessofthesizeortypeofsystem.Verysmall,simplesystemscandemonstratecapacityinlesssophisticatedwaysthancanlarger,morecomplexsystems.  Many,ifnotmost,aspectsofwatersystemoperationsinvolvemorethanonekindofcapacity.Aprogramofinfrastructurereplacementandimprovement,forexample,requirestechnicalknowledge,managementplanningandoversight,andfinancialresources.Inotherwords,awatersystemwithadequatecapacitydrawsonstrengthswithinallthreecapacitydimensionstechnical,managerial,andfinancial.  AsnotedinFigure4,combinedtechnical,managerial,andfinancialcapacityisparticularlyrelevantintermsofshortandlongtermplanningbywatersystems.Shortandlongtermplanningwillfacilitatecompliancewithapplicabledrinkingwaterregulations,aswellasbetterserviceforcustomers.Allwatersystems,regardlessofsizeorownershipstructure,shouldbeguidedbyaplanforthesystemsfutureoperationsoverareasonableplanninghorizon.  Methodsofshortandlongtermplanninggrowincomplexitywithsystemsizeandexpertise.Basicbusinessplanningbysmallersystemsisanindicatorofcapacity,aswellasacapacitydevelopmentstrategy.Shortandlongtermplanningisnotlimitedtostandaloneoptions,butmayincludeaplanforrestructuring.Shortandlongtermplanningbylargerwatersystemsmayalsoaddresstheneedsofproximatesmallersystems.Inallcases,itisessentialthatshortand +%( longtermplanningandcapitalfacilitiesplanningbegroundedinrealisticcostestimates. f.P(+  CONCLUSIONS     Theconceptsoftechnical,managerial,andfinancialcapacityfigureprominentlyinthe1996ϢSDWA.InaccordancewiththeAct,theStateswillhavesubstantialflexibilityindesigningandimplementingcapacitydevelopmentprogramsthatbestsuittheneedsoftheircitizensandwatersystems.Theframeworkprovidedhereisdesignedtoassistthatendeavorbyidentifyingseveralkeycriteriaforassessingwatersystemcapacity.    TRP'3 Letter Landscape3''3 Letter Landscape3'T c u  o ;+'`|0 +zpA' E<0*.*T*3o ..                            ..Figure2.ContextforCapacityDevelopmentRelatedGuidances  f@  TRY 3' LetterP'3 Letter Landscape3' Letter'3 Letter LandscapeTuTable1:IndicatorsofTechnical,Managerial,andFinancialCapacityofWaterSystems  ,XX*f!RdA,ddd / dd 2(#(#f, ee, ee+  6#  Y$d6TechnicalCapacity M>%' Y$ d Y$dM Sourcewateradequacy B/-l V$mmd BAdequatesourcewaterquality(meetsprovisionsofSDWA) G8l V Y$  Y$G .X B .Adequatelongtermsourcewaterquantity G8  Y$  Y$G .  .Sourcewaterprotectionplan D5  Y$  Y$dD Infrastructureadequacy B/-; %$//Ed BConditionofwell(s)and/orsourcewaterintakes 4*; %  Y$  Y$4 ! '  ! Conditionoftreatment,storage,anddistribution 4*j  Y$  Y$4 ! lV  ! Currentandprospectiveadequacyofinfrastructure(source,   treatment,storage,anddistribution) G8w  Y$  Y$G .yc  .Emergencypreparedness G8  Y$  Y$G .  .Infrastructurereplacementprogram G8  Y$  Y$G .  .Infrastructureimprovementprogram G8\F Y$  Y$G .H2 .Capitalimprovementplan D5 Y$  Y$dDImplementationoftechnicalknowledge B/-$Ld BCertifiedOperator G8 Y$  Y$G . .Operationandmaintenanceexpertise G8+ Y$  Y$G . .Understandingoftechnicalaspectsofregulatoryrequirements ?0pZ Y$  Y$d? 4!\Fd 4Understandingofsystemstechnicalandoperationalcharacteristics H5}g Y$  Y$dH ManagerialCapacity M>% Y$ d Y$dMOwnershipaccountability B/-$Pd BClearownershipidentity G8 Y$  Y$G . .Managementinformationsystems D5L6 Y$  Y$dDStaffingandorganization B/- {$77Sd BClearidentificationofoperator/manager G8 { Y$  Y$G .}!g .Trainingandcontinuingeducation 4*! Y$  Y$4 ! " !Sufficientstaffwithappropriateexpertiseandexperience 4*# Y$  Y$4 ! $ !Staffwithappropriatelicensesandcertifications 4*`$J  Y$  Y$4 ! L%6  !Proceduresandpoliciesforsystemmanagementandoperation I8m&W " Y$  Y$I .Y'C!" .Understandingofmanagementaspectsofregulatoryrequirementsandsystemoperations >/z(d"$ Y$  Y$> Effectivelinkages <)')#%$RRY <Awarenessofavailableexternalresources G8)#& Y$  Y$G .*$& .Communicationwithothersystems G8+$' Y$  Y$G .+%' .Communicationwithcustomers G8I,3&( Y$  Y$G .5-'( .Communicationwithregulators B/-x') Y$  Y$BFinancialCapacity I8oY Y$  Y$dI Revenuesufficiency B/-AA]d BRevenuescoverexpenditures G8 Y$  Y$G . .Appropriateratesandcharges G8 Y$  Y$G .  .Billingandcollectionspractices G8> ( Y$  Y$G .*  .Revenuesfordepreciationandreserves I8 m Y$  Y$I .o Y .Costofservicestudies A2  Y$  Y$A Creditworthiness    ?,' $iic ?Positivecreditrating G8   Y$  Y$G .  .Accesstofinancialcapital throughpublicandprivatesources G8R<  Y$  Y$G .>(  .Healthyfinancialratios G8  Y$  Y$G .m  .Bondsandassurances I8  Y$  Y$I .  .Appropriatedebt/equityratios @/!  Y$  Y$@ Fiscalmanagementandcontrols fP  <)'$hhh <Adequatebooksandrecords G8fP Y$  Y$G .R< .Annualbudgetingandreporting G8 Y$  Y$G . .Appropriateaccountingpractices G8 Y$  Y$G . .Valuationofutilityassets G85 Y$  Y$G .!  .Capitalfacilitiesplanningwithrealisticcostestimates 4*zd Y$  Y$4 $ fP $ Appropriatemanagementofrevenues G8 Y$  Y$G . . Financialinvestmentstrategy,"  Y$ -  ,   qY;+'h|c    `E1 t`Ki2 qq5Y;+'h|t D  `E$Z ti`\2 q?YM=9l|   ` ddE ti`2 m:<9)%`|0e `9G E ee<t ] my:@E51`|0`9G E2. yqY;+'h|   `EA1 tiQyi# qqY;+'h|f=   `ES tibN4 qm:9)%`|0  `En # ;. mm:N9 )%`|0 C `E>CCm 9(#9(#(#(# 7(#7(#9(#9(# }N}N7(#7(# }N}N   }N}N }N}N (#(# (#(#(#(# (#(#(#(##XX,y# XX Figure3 $x' FactorsImpactingTechnical,Managerial,andFinancialCapacity #XX ̭#,XX %( #XX,q#  Note:Thisfigureidentifiesexternalfactorsthatimpactasystemsabilitytoachieveand '!* maintaintechnical,managerial,andfinancialcapacity.Byaffectingcapacity,thesefactorsinfluenceasystemsabilitytoprovidesafedrinkingwatertoitscustomers.  )t#, hX  XTRP'3Y 3' Letter'3 Letter Landscape3' LetterTc+ 4 <DL!Xxp 0 hXc4s:%?/+b|02  `&@Ez2 2 R/ 4sU EAz|p p @ H@EpppWUEAz|: p @ H@Es:[?/+b|0S `&@ETSS rss:^?/+b|0 1J%E `&@E( %E%Er :&sVUEAz|  p @ H@E     eUEAz|X S p @ H@ER S R SdUEAz|7f p @ H@E `pp `pTUEAz|4c p @ H@E9 4c49 4cUEAz|0X p @ H@E| "0,0,| "0,,XXrUEAz|  p @ H@E   #XX,=#   XXh*X, XX* ,XXTRY 3' LetterP'33' Letter'3 Letter LandscapeT  CHAPTER2:  GuidanceforStatesonEnsuringthatAllNewCWSsandNTNCWSsDemonstrateTechnical,Managerial,andFinancialCapacity #XX,l# H  ?S' cxdE+x? ,   R XXPreparedfortheSmallSystemsWorkingGroupNationalDrinkingWaterAdvisoryCouncilRevisedFINALDRAFTDonotciteordistribute w  _ July19,1997!  #XX  R# { ,XX     #XX,9#TRP'3 Letter LandscapeY 3' Letter'3 Letter Landscape3' LetterT / SUMMARYOFREQUIREMENTS  &   Tocomplywiththeprovisionsof1420(a),StatesmustsubmittoEPAthefollowingitems.Eachoftheseminimumfederalrequirementsisdescribedindetailinthediscussionabove.,XX  #XX, # *f)*d.d ee ee!R..f,dT ,dd +  -   X,-,XXCriteria =**  =Requirements#XX,=#,XX M>**  d, X  x,M#XX,#,XX1.ABasisofAuthority#XX,_#,XX =* \  =#XX,#,XX0 j TheStatemustdemonstratethatithasthe legalauthorityorothermeansto  \  ensurethetechnical,managerial,andfinancialcapacityofnewcommunitywatersystemsandnewnontransient,noncommunitywatersystems,includingtheauthoritytopreventcreationofanewsystemthatdoesnotdemonstratetechnical,managerial,andfinancialcapacity. N?+| j-j- d, x  ,N2.DemonstrationofControlPointsintheNewSystemDevelopmentProcess =*  =0 j TheStatemustdemonstratethatithasoneormoreclearcontrolpointsinthe   newsystemdevelopmentprocessduringwhichitcanexerciseitslegalauthorityorothermeanstoensurethecapacityofnewsystems P?+d j-j- d,   <P3.PlanforPeriodicEvaluationoftheNewSystemCapacityAssuranceProgram =* =0 j TheStatemustpresentaplanforprogramevaluationaspartoftheirinitial  demonstrationofauthorityfornewsystemsunder1420(a)thatmustoutline:1)ameansofverifyingprogramimplementation;and2)ameansofevaluatingtheprogram.;1/:j-j- d<    ;#XX,8#  > TRY 3' LetterP'3 Letter Landscape3' Letter'3 Letter LandscapeT4INTRODUCTION     TheSafeDrinkingWaterAct(SDWA)Amendmentsof1996(Pub.L.104182)authorizeaDrinkingWaterStateRevolvingFund(DWSRF)toassistpublicwatersystemstofinancethecostsofinfrastructureneededtoachieveormaintaincompliancewithSDWArequirementsandtoachievethepublichealthobjectivesoftheAct.Section1452authorizestheAdministratoroftheU.S.EnvironmentalProtectionAgency(EPA)toawardcapitalizationgrantstotheStates.Section1420(a)oftheActdirectstheAdministratortowithholdaportionofaState sallotment   under1452unlesstheState hasobtainedthelegalauthorityorothermeanstoensurethatallnewcommunitywatersystemsandnewnontransient,noncommunitywatersystems...demonstratetechnical,managerial,andfinancialcapacitywithrespecttoeachnationalprimarydrinkingwaterregulationineffect,orlikelytobeineffect,onthedateofcommencementofoperations.Section1452(a)(1)(G)(I)providesdetailedinformationontheprocessofwithholdingfundsundertheActsprovisionsrelatedtonewsystemcapacity.  Section1420(d)(4)instructstheEPAAdministratortopublish guidancedevelopedinconsultationwiththeStatesdescribinglegalauthoritiesandothermeanstoensurethatallnewcommunitywatersystemsandnontransient,noncommunitywatersystemsdemonstratetechnical,managerial,andfinancialcapacitywithrespecttonationalprimarydrinkingwaterregulations.Thisguidanceanditsappendicesfulfillthisrequirement.  Thisguidancedocument"developedinconsultationwithStatesandotherstakeholders"providesthecriteriathatEPAwilluseinevaluatingStateauthorityfornewsystemsforpurposesofimplementingtherequirementsof1420(a)oftheAct.Thecriteriainclude:1)abasisofauthority;2)demonstrationofcontrolpointsinthenewsystemdevelopmentprocess;and3)aplanforevaluatingtheprogramonanongoingbasis. THESTATUTORYBACKGROUND  V @    GeneralIssues. TheSDWAAmendmentsestablishanintegratedenvironmentallaw.There 6"  arelinkagesamongdifferentpartsofthelawwhichcreateatapestryofprovisions;preventionprogramsareintegratedwith,andessentialtothesuccessof,newregulatoryflexibilities.Forexample,oneofthepreventionprogramsiscapacitydevelopment.Fornewsystems,theAmendmentsrequireStatestoensurethatallnewcommunityandnontransient,noncommunitysystemsdemonstratetechnical,managerial,andfinancialcapacity.Ensuringcapacity,whichinturnwillpreventcostlynoncompliance,willfacilitatetheregulatoryflexibilityintheAmendments.  ReadinthecontextoftheAmendmentsasanintegratedwhole,thestatutorybasisforthecriteriathatarepresentedbelowisclear.First,whenthestatutesaysaStatemusthavethe legalauthorityorothermeanstoensurethecapacityofnewsystems,itmeansthattheStatemusthavetheauthoritytointerveneintheprocessofnewsystemdevelopmenttoobtainthenecessarydemonstrationoftechnical,managerial,andfinancialcapacity.Theconferencecommitteereport f.P(+ makesclearthatthephrase legalauthorityorothermeansmeansthatStatesmusthavethe actualauthoritytoensurethecapacityofnewsystems.  Inotherwords,asdescribedmorefullyinthecriteria,theStatesmustbeabletodemonstratethattheyhave,andcanexercise,authoritytopreventthecreationofanewcommunityorϢnontransient,noncommunitysystemthatdoesnothavetechnical,managerial,andfinancialcapacity.Thisimpliesthattheremustbesome controlpointatwhichtheStatecansay notothedevelopmentofanewsystemthatdoesnothaveadequatecapacity.  Second,theguidancerecognizesacentralthemethatrunsthroughouttheAmendments"anapproachtoStateprogramsthatisflexibleandrecognizesthediversityofStateapproachestoachievetheobjectivesoftheAmendments.Inprogramstodealwithnewsystemcreation,StatesmayinvolveavarietyofdifferentagenciesattheStateandlocallevelsofgovernment.Thisguidanceacceptsthediversityofapproaches.Itrequiresonlythattherebeaclear,unambiguousdemonstrationofStateauthoritytoensurethatnonewcommunityandnontransient,Ϣnoncommunitysystemwillbecreatedifitlacksadequatecapacity.Section1420(a)ofthestatuteemphasizesthispointwhenitsaysthattheAdministratorwillwithholdaportionofaStatesallotmentunlesstheStatehasobtainedthelegalauthorityorothermeans toensurethe  intendedresult.  HowthisstatutorymandateisachievedisuptotheState.ThestatutedoesnotrequirethataparticularStateagency(e.g.,theprimacyagency)beresponsible;itsimplyrequiresthatsomeStateagencyberesponsible.Itdoesnotprecludedelegationofresponsibilitytootheragenciesortolocalgovernments.Thestatutedoes,however,requirethattherebeclearStateauthoritytoensurethatnewsystemshaveadequatetechnical,managerial,andfinancialcapacity.  Third,thestatutoryemphasisonallthreeaspectsofcapacity"technical,managerial,andfinancial"requiresacomprehensiveviewofcapacity.Tocomplywiththisrequirement,itisnotsufficientforStatestofocusononlyoneaspect,e.g.,technicalcapacity.Chapter1definesandeachofthethreedimensionsofcapacity.  Finally,itisimplicitin1420thatthedefinitionofsystemcapacitybeforwardlooking.Todemonstratecapacity,thesystemmusthavetechnical,managerial,andfinancialcapacityonthefirstdayofoperationandovertime.Thus,whenstatesevaluatethecapacityofnewsystems,theymustassessbothcurrentandforwardlookingcapacity. CRITERIA  ("%  1.ABasisofAuthority  *$'   Under1420(a),theStatemustdemonstratethatithasthe legalauthorityorothermeanstoensurethecapacityofnewcommunitywatersystemsandnewnontransient,noncommunitywatersystems.ThisauthoritymustprovidetheStatewiththecapabilitytointerveneinthe f.P(+ processofnewsystemdevelopmentinordertoobtainnecessaryassurancesoftechnical,managerial,andfinancialcapacity.Asexplainedintheintroduction,thephrase legalauthorityorothermeansmeansthatStatesmusthavethe actualauthoritytoensurethatnewsystemshaveadequatecapacity.Tomeettherequirementsofthisprovision,Statesmustidentifyanddemonstratethisauthority.Examplesof legalauthorityorothermeansareprovidedintheEPAdocument,InformationforStatesonEnsuringthatAllNewCWSsandNTNCsDemonstrate   Technical,Managerial,andFinancialCapacity.     Implicitinthisrequirementarethefollowing:  0  TheStatemustspecifywhichagencyofStategovernmentisresponsibleforpurposesof v`  demonstratingthattheStatemeetsthisstatutoryrequirement.ThisagencycouldbetheStateSDWAprimacyagency.TheState,atitssolediscretion,maydecidewhichagencyisresponsible,buttheremustbearesponsibleagency. (#(# 0  0(#(#TheStateagencyresponsibleformakingdeterminationsoftechnical,managerialand & financialcapacityneednotalwaysbetheSDWAprimacyagency.Certificationauthorityfornewinvestorownedsystems,forexample,mayrestwiththeStatepublicutilitycommission.Collaborativearrangementsamongagenciesforcontrollingnewsystemdevelopmentmustbedocumentedthroughstatutoryorothermeans(suchasmemorandaofunderstanding). (#(# 0  0(#(#TheresponsibleStateagency(orcombinationofagencies)mustpossessanddemonstrate  whennecessarythe actualauthoritytopreventthecreationofanewsystemonthebasisofaninadequatedemonstrationoftechnical,managerial,andfinancialcapacity. Actualauthoritymaytaketheformofstatutoryauthority,regulations,orothereffectiveanddemonstrablemeansofpreventingthecreationofanewsystemduetoaninadequatedemonstrationofcapacity. (#(#   0  Activeinvolvementoflocalandcountyentitiesinaddressingcapacityconcernsisone F!0 meansofaddressingnewsystemcapacity.Thebasisofauthorityforobtainingthenecessaryassurancesoftechnical,managerial,andfinancialcapacitymaybeplacedinitiallyatthelocallevel,butthestateisultimatelyaccountableformeetingthecapacityrequirementsoftheActandmusthavethefinalauthoritytoensurenewsystemcapacity. (#(#  2.DemonstrationofControlPointsintheNewSystemDevelopmentProcess  '!$   AcontrolpointisdefinedasapointatwhichtheState(orotherunitofgovernment)canmakeanauthoritativedecisionastotheadequacyofanewsystem,intermsofitstechnical,managerial,andfinancialcapacity.EachStatemustdemonstratethatithasoneormoreclearcontrolpointsatwhichitcanexerciseitslegalauthorityorothermeanstoensurethecapacityofnewsystemsbyprovidingthemwiththeopportunitytopreventthecreationofasystemthatlackstechnical,managerial,andfinancialcapacity.Manycontrolpointsareavailableatboththe f.P(+ Stateandlocallevelsofgovernment.Whileactionsbylocalgovernmentscanbeanimportantpartoftheprocess,theStatemusthaveatleastonecontrolpointthatallowsittoexerciseitsauthoritydirectly.TheexistenceofthisauthoritydoesnotprecludetheStatefromprovidingadviceortechnicalassistancethatcouldhelptoensurethatasystemhasadequatecapacity.  ExamplesofgenericcontrolpointsinthenewsystemdevelopmentprocessaredescribedintheEPAdocument,InformationforStatesonEnsuringthatAllNewCWSsandNTNCs   DemonstrateTechnical,Managerial,andFinancialCapacity.    3.PlanforPeriodicEvaluationoftheNewSystemCapacityAssuranceProgram  v`    Statesmustdevelopaplanforperiodicevaluationoftheirnewsystemcapacityassuranceprogram.TheEPAAdministratormustmakecontinuingyearbyyeardeterminationswith F0  regardtowithholdingunder1452(a)(1)(G)(i).Attheoutset,Stateprogramswillbeassessedprospectively;butevaluationsofprogramimplementationandeffectivenesswillbecomemoreimportantinsucceedingyears.Statesmustthereforepresentaplanforprogramevaluationaspartoftheirinitialdemonstrationofauthorityfornewsystemsunder1420(a).Theplanmustoutlineameansofverifyingprogramimplementationandevaluatingtheprogram.+,-/   #+,-/# n   TRP'3Letter LandscapeY 3' Letter'3 Letter Landscape3' LetterT.0   i F xxXXTRY 3' LetterP'3Letter Landscape3' Letter'3 Letter LandscapeTCHAPTER3:  #XXxxy#U5XXGuidanceforStatesonMinimum ` RequirementsforStateCapacityDevelopmentStrategies(toAvoidSRFWithholding)#XX5U/#   r  AS) xdExA h   R XXPreparedfortheSmallSystemsWorkingGroupNationalDrinkingWaterAdvisoryCouncilRevisedFINALDRAFTDonotciteordistribute 7  _ July19,1997!  #XX  Rf# ;   K    TRP'3 Letter LandscapeY 3' Letter'3 Letter Landscape3' LetterTt.  SUMMARYOFREQUIREMENTS  &   Tocomplywiththeprovisionsof1420(c),StatesmustcompleteandsubmittoEPAthefollowingitems,discussedindetailabove.*fHIdddT dd )*..f, dd ,dd +     ,XXCriteria ':  'Requirements :  #XX,#,XX1.SolicitationandConsiderationofPublic  p ЀComment#XX,\#,XX  ^ 8  #XX,#,XX0  TheStatemustcertifythatitengagedinaproactiveprocessofsolicitingpubliccommentsonthe  p  listedelements. o,o, 0  TheStatemustdescribeallsignificantpubliccommentsanditsresponsetothem.#XX,B#,XX   o,o, #XX,#,XX2.Considerationof1420(c)(2)(AE)   J$  0  TheStatemustdescribetheissuesconsideredbytheStaterelativetoeachofthelistedelements J$  andexplainwhyeachelementwasincludedorexcludedfromtheStatescapacitydevelopmentstrategy.#XX,#  o,o, ,XX3.CapacityDevelopment Strategy  6  0  #XX,#,XXTheStatemustshowarationalbasisforconcludingthattheelementschosenbytheState"when 6  takentogetherandconsideredasawhole"arelikely toassistpublicwatersystemsinacquiringandmaintainingtechnical,managerial,andfinancialcapability(1420(c)(1))bydescribingthemannerinwhichtheselectedelementsfittogetherandachievethestatutoryobjective.#XX,#,XX ho,o,  0  TheState#XX,#,XXԀmustdescribeitsplanforassessingprogresstowardimprovingthetechnical,  managerial,andfinancialcapacityofpublicwatersystemsintheState.#XX,}# o,o, ,XX4.StrategyImplementation#XX,#  B ,XX0  TheStatemustdescribehowitintendstoimplementitsstrategy.#XX,# Bo,o, ,XX5.SystemsinSignificantNoncompliance#XX, #  x ,XX0  Everythreeyears,theStatemustprepare,update,andsubmittotheAdministratoralistof x communitywatersystemsandnontransientnoncommunitywatersystemsthathaveahistoryofsignificantnoncomplianceand,totheextentpracticable,thereasonsfornoncompliance. o,o, 0  TheStatemustsubmitwithinfiveyearsofenactmentofthissectionareporttotheAdministrator ! onthesuccessofenforcementmechanismsandinitialcapacitydevelopmenteffortsinassistingcommunitywatersystemsandnontransient,noncommunitywatersystemstoimprovetechnical,managerial,andfinancialcapacity.#XX,/ ##$o,o,  #   $ TRY 3' LetterP'3 Letter Landscape3' Letter'3 Letter LandscapeTt INTRODUCTION     TheSafeDrinkingWaterAct(SDWA)Amendmentsof1996(Pub.L.104182)authorizeaDrinkingWaterStateRevolvingFund(DWSRF)toassistpublicwatersystemsinfinancingthecostsofinfrastructureneededtoachieveormaintaincompliancewithSDWArequirementsandinachievingthepublichealthobjectivesoftheAct.Section1452authorizestheAdministratoroftheU.S.EnvironmentalProtectionAgency(EPA)toawardcapitalizationgrantstotheStates.1420(c)oftheActdirectstheAdministratortowithholdaportionofaStatesallotmentunderSection1452unlesstheStateis developingandimplementingastrategytoassistpublicwatersystemsinacquiringandmaintainingtechnical,managerial,andfinancialcapacity.  ThisdocumentprovidesthecriteriathatEPAwilluseinevaluatingStatecapacitydevelopmentstrategiesforpurposesofimplementingthewithholdingrequirementsin1420(c)oftheAct.EachStatewillhaveconsiderableflexibilityinpreparingitscapacitydevelopmentstrategy.OnlyminimumcriteriawillbereviewedtoensurethattheStatemeetstheprovisionsof1420(c).Thefivecriteriainclude:1)solicitationandconsiderationofpubliccomments;2)considerationof1420(c)(2)(AE);3)descriptionofthecapacitydevelopmentstrategy;4)strategyimplementation;and,5)systemsinsignificantnoncompliance.ThesourcesofthisguidancearetheAdministratorsauthoritytoissueguidanceandregulationsundertheSDWAandthespecificprovisionsof1420oftheAct.   BenefitsofaStateCapacityDevelopmentStrategy. TheSDWAAmendmentsintroduceda  newfocusonprevention.TheAmendmentsseektopreventnewproblemsbyensuringthatwatersystemshavethecapacitytoprovidesafewaterandbyaddingprogramstoprotectoursourcesofdrinkingwater.Achievingincreasedtechnical,financial,andmanagerialcapacitycanavertcomplianceproblemsthatcostmoretoaddressthanwouldimplementingacapacityimprovementprogram.  ThenewpreventionapproachintheAmendmentshastwokeyelements:  0  AclearStatelead,withflexibilityandresourcestoachieveresults.6" (#(#   0  Astrongefforttoprovideinformationtothepublicandinvolvestakeholdersindecision $  makingprocesses. (#(#   Theintegrationofincentivesandregulatoryflexibilityappliesintheareaofcapacity.TheAmendmentsseektoimprovetheabilityofwatersystemstoprovidesafewaterreliablybyrequiringStatestoensureadequatecapacityinnewsystemsandtopreparecapacitydevelopmentstrategiesforpublicwatersystems.ThesestrategiesareintendedasaplanforaStateprogramtoimprovethetechnical,managerial,andfinancialcapabilityofwatersystemstodeliversafedrinkingwaterreliably.ThetoolsandapproachesthatStatesdevelopaspartoftheircapacitydevelopmentstrategywillmaketheimplementationofthelawmoreworkable,consistent,andeffective.FordescriptionsoftoolsandapproachesavailabletoStates,seeEPAsInformation v-`'* forStatesonPreparingCapacityDevelopmentStrategies.  f.P(+ Ї CRITERIA    1.SolicitationandConsiderationofPublicComment     TheActprovidesthattheStates,inpreparingtheircapacitydevelopmentstrategies, shall   consider,solicitpubliccommenton,andincludeasappropriatetheelementslistedinSection1420(c)(2)(AE).    Tomeetitsstatutoryobligationswithregardtopubliccomment,aStatemust:  0  Certifythatitengagedinaproactiveprocessofsolicitingpubliccommentsonthelisted fP  elements;V@ (#(# 0  0(#(#Certifythattheproactiveprocessofsolicitingpubliccommentonthelistedelements 6  occurredaspartof(notinresponseto)thepreparationofitscapacitydevelopment & strategy;and, (#(#   0  DescribeallsignificantpubliccommentsandtheStatesresponsetothosecomments.(#(#    Definitions .Forthepurposesofthisrequirement,severaltermsmustbedefined.  Aproactiveprocessisdefinedasaprocessthathasthefollowingcharacteristics:    0  TheStatenotifiedthegeneralpublic"throughappropriatelyvisiblechannels"ofthe p opportunitytoprovidecommentonelementsAEaspartofthepreparationoftheStatescapacitydevelopmentprogram. (#(#   0  TheStateidentified,beforesolicitingpubliccomment,thegroupsthatmightbeinterested F!0 inthepreparationofacapacitydevelopmentstrategy.Thesearelikelytobethesametypesofgroupsidentifiedin1420(c)(2)(E). (#(#   0  TheStateensuredthateachoftheidentifiedgroupsreceivedarequestforpublic %! commentonthelistedelements. (#(#   0  TheStateprovidedanaccessiblemechanismforreceivingpubliccomment.'!$(#(# Significantpubliccommentreferstoanypubliccommentthatcontributestooraddressesina )#& substantivemannerthedevelopmentofacomprehensiveStatestrategy.SignificantpubliccommentincludesthosecommentssuggestingchangestoorsupportofanyStateposition.ResponsetosignificantpubliccommentreferstotheStatesresponsibilitytodescribethemanner v-`'* inwhichitusedordidnotuseallsignificantpubliccommentinthepreparationofitscapacity f.P(+ developmentprogram.TheresponsemustoutlineclearlythereasonsforandprocessbywhichtheStatedecidedtouseornottousesuchcomments.   StateswithExistingStrategies. SomeStateshaveimplementedorpresentlyare  implementingcapacitydevelopmentstrategies.HavingastrategydoesnotexemptaStatefromtheresponsibilitytosolicitandconsiderpubliccommentonthatstrategy.EachStatewithastrategymustsolicitandconsiderpubliccommentontheStatestreatmentofthelistedelementsinitsexistingstrategy.OnemeansofdoingthisisbyincludingtheexistingstrategyaspartoftheIUP.Specifically,eachStatewithanexistingstrategymustcertifythatitusedaproactiveprocesstosolicitpubliccomment,andtheStatealsomustdescribeallsignificantpubliccommentsandtheStateresponsetoeachofthem.̀ 2.Considerationof1420(c)(2)(AE)   F0     Section1420(c)(2)providesthattheState shallconsider,solicitpubliccommenton,and & includeasappropriatethelistedelementsAthroughE.TherequirementisthattheStateconsidereachofthelistedelements.Thesefiveelements,whicharelistedin1420(c)(2)(AE)ofthestatute,requiretheStatetoconsiderthefollowing:0  0(#(#Methodsorcriteriatoprioritizesystems[1420(c)(2)(A)](#(# 0  0(#(#Factorsthatencourageorimpaircapacitydevelopment[1420(c)(2)(B)](#(# 0  0(#(#HowtheStatewillusetheauthorityandresourcesoftheSDWAtoassistpublicwater  systems[1420(c)(2)(C)] (#(# 0  0(#(#HowtheStatewillestablishthebaselineandmeasureimprovements[1420(c)(2)(D)](#(# 0  0(#(#Procedurestoidentifyinterestedpersons[1420(c)(2)(E)]p(#(#   Tocomplywiththisrequirement,theStatemustdescribetheissuesconsideredbytheStaterelativetoeachofthelistedelementsandexplainwhyeachelementwasincludedorexcludedfromtheStatescapacitydevelopmentstrategy. 3.CapacityDevelopmentStrategy  $    EPAmustreviewtwoaspectsoftheStatecapacitydevelopmentstrategy.First,aStatemustdevelopastrategy.Thismeansthattheremustbearationalbasisforconcludingthatthe & # elementschosenbytheState"whentakentogetherandconsideredasawhole"arelikely toassistpublicwatersystemsinacquiringandmaintainingtechnical,managerial,andfinancialcapability(1420(c)(1)).AStatemustdescribethemannerinwhichtheselectedelementsfittogetherandachievethestatutoryobjective.EPAwillnotevaluatethedesirabilityorpotentialeffectivenessofeachelement.Itwill,however,evaluatewhetherthereisarationalbasisforconcludingthatthereisastrategy.  v-`'*   Second,aStatemustdescribeitsplanforassessingprogresstowardimprovingthetechnical, managerial,andfinancialcapacityofpublicwatersystemsintheState.Further,1420(c)(3)requiresatriennialreportfromtheStateagencyresponsibleforcarryingoutthecapacitydevelopmentstrategytotheGovernoron theefficacyofthestrategyandprogressmadetowardsimprovingthetechnical,managerial,andfinancialcapacityofpublicwatersystemsintheState.TheStatewillnotmeetthisrequirementifitsstrategywillnotproduceanassessment. 4.StrategyImplementation      EPAwilldefertoeachStatesdeterminationofthemannerofimplementationofaStateplan.StatesmustonlysubmittoEPAadescriptionofthemannerinwhichtheyintendtoimplementtheircapacitydevelopmentstrategy. 5.SystemsinSignificantNoncompliance  &   Asrequiredby1420(b),eachStatemustprepare,periodicallyupdate,andsubmittotheAdministratoralistofcommunitywatersystemsandnontransient,noncommunitywatersystemsthathaveahistoryofsignificantnoncompliance.Statesmustalsoindicate,totheextentpracticable,thereasonsfornoncompliance.Tosimplifythisstep,Statesmayselectone standardizedreasonfornoncompliancethatbestdescribesthesystem.Thestandardizedreasonsare:C,    C,c99A  .0    ShorttermtrainingproblemsC,c999ی(#(# Ќ  C,    C,F:9B  .0    ShorttermfinancingproblemC,F:m:9یp(#(# Ќ  C,    C,);9C  .0    Longtermtechnical,managerial,financialcapacityproblemC,);P;9یv`(#(# Ќ  C,    C,+<9D  .0    RecalcitranceC,+<R<9یfP(#(# Ќ  C,    C,<9E  .0    DataerrorC,<&=9یV @(#(# Ќ  C,    C,=9F  .0    UnknownC,==9یF!0(#(# Ќ    Thislistofcommunitywatersystemsandnontransient,noncommunitywatersystemsthathaveahistoryofsignificantnoncomplianceservesasatooltohelpinform,andtoalimitedextentfocus,thepreparationofthestatescapacitydevelopmentstrategy.Thelistisnotintendedasanenforcementtrackingtool.Rather,itshouldbeusedasameansofidentifyingthenumberofsystemswithahistoryofsignificantnoncompliancethathavelongtermtechnical,managerial,andfinancialcapacityproblemsversusthosethathaveshorttermproblemsandofillustratingprogressinthisarea.  EachStatemustalsosubmitwithinfiveyearsofenactmentofthissectionareporttotheAdministratoronthesuccessofenforcementmechanismsandinitialcapacitydevelopmenteffortsinassistingcommunitywatersystemsandnontransientnoncommunitywatersystemstoimprovetechnical,managerial,andfinancialcapacity.BothrequirementsmustbemetaspartofaStatescapacitydevelopmentstrategy. f.P(+ Ї   Definitions. Forthepurposesofthisrequirement,severaltermsmustbedefined.  Periodicallyupdate,forthepurposesofthisrequirement,isdefinedasonceeverythree(3)  years.ThefirstlistmustbepreparedandsubmittedtotheAdministratorwithinone(1)yearoftheenactmentof1420,andeachsubsequentlistmustbesubmittedtotheAdministratortriennially.Ahistoryofsignificantnoncomplianceisdefinedasbeingfoundinsignificantnoncompliance   during(atleast)anythree(3)quartersduringthepreviousthree(3)years.     MinorityOpinion  NOTE:Thefollowingminorityopinionwaswrittenandsubmittedby2membersoftheGroup(JimSheldonandTheresaRismiller).   ItisourconcernthattheproposalincludesGuidanceforStatesonMinimumRequirementsforStateCapacityDevelopmentStrategies(toAvoidSRFWithholding).Itisourpositionthatthelawisveryclearrelativetotherequirementsforstatestrategy.WhiletheSDWAAmendmentsof1996,Section1420,includesauthorityforEPAguidanceforsubsection(a)NewSystemsitdoesnotincludesuchauthorityforsubsection(c)StateStrategies.Tothecontrary,1420(d)FederalAssistancestates, TheAdministratorshallsupporttheStatesindevelopingcapacitydevelopmentstrategies.ThissubsectionfurtherstatesthatEPAshallpublishinformation toassistStatesandpublicwatersystemsincapacitydevelopmentefforts.  ItisthereforeourpositionthatSection1420clearlystatesthatEPAshouldprovideinformationpertainingtostatestrategiesbutnotguidance.Weunderstandthatthemajorityoftheworkgroupfelttherewasconsensustorequireguidanceforstatestrategies(Section1420).However,themajorityoftheworkgroupfeltthatEPAdidhaveauthoritytopublishguidanceundertheSRFsection(Section1452(g)(3))whichwastheircontrollingfactorfortheestablishmentofthisguidance.WesupportEPApublishing informationforstatestousefordevelopingstrategiesbutnotguidance.  WhetherthefinaldecisionoftheNationalDrinkingWaterAdvisoryCouncilistoprovideguidanceorinformationforStateCapacityDevelopmentStrategies(toAvoidSRFWithholding),weofferthefollowinglanguagetobeutilizedforthecontentofsaiddocument.ThisstillpreservesthestateflexibilityintendedintheSDWAof1996.StateCapacityDevelopmentStrategies(toAvoidSRFWithholding)  Toavoidwithholding,aStateshallconsider,solicitpubliccommenton,andincludeasappropriatetheelementslistedintheActincluding:  0  104(#(#Methodsorcriteriatoprioritizesystems$ 4(#4(#   0  204(#(#Factorsthatencourageorimpaircapacitydevelopment%!4(#4(#   0  304(#(#AdescriptionofhowtheStatewillusetheauthority,resources,andothermeans%"4(#4(#   0  404(#(#Establishabaselineandmeasureimprovementsincapacity& #4(#4(#   0  504(#(#Identifyinterestedpersons/parties'!$4(#4(#   StatesmustsubmittoEPA(1)thattheStatehasconsideredtheelementsofSection1420(c)(2)(AE),asdirectedand(2)adescriptionoftheStatesstrategybasedonitsconsiderationoftheseelementsandotherelementsitfeelsappropriate.ItisrecognizedthatStatestrategiesdevelopedunderthissectionwillbediverseandEPAshouldgivedeferencetoa StatesdeterminationastocontentandmannerofimplementationofaStateplan,solongasthe v-`'* Statehassolicitedandconsideredpubliccommentonthelistedelementsandhasadoptedastrategythatincorporatesappropriateprovisions.   Thisproposaltracksmorecloselywiththeintentoftheamendmentasmadeclearby(1)ConferenceCommitteeReportand(2)SenatorKempthornesremarksontheConferenceagreement.(1)0  Report104741August1,1996,CapacityDevelopment(sec.119) (#(#   Thephrase legalauthorityorothermeansisintendedtorequireaStatetohavetheactualauthoritytoensurethatallnewcommunitywatersystemsdemonstratethetechnical,managerialandfinancialcapacitytocomplywiththeSafeDrinkingWaterAct.Thesecouldincluderegulations,training,andbondingrequirements.Statesarealsotoadoptandimplementacapacitydevelopmentstrategy.ThisisintendedtoencourageStatestocontinuetofocusresourcesoncapacitydevelopmentinitiatives.Statesarerequiredtoconsider,solicitpubliccommenton,andincludeasdeemedappropriatebytheState,anumberofelementsandcriteria.TheConfereesdonotexpectthateveryStatewilladoptthesamecapacitydevelopmentstrategyanddonotexpectStatestoincludeelementsinsection1420(c)thattheStatesdeterminearenotappropriate.ItisnotexpectedthateveryStatewillgivethesameconsiderationtoeachoftheelementslistedinsection1420(c).Rather,theConfereesexpectthat,assuggestedbyexistingStatecapacitydevelopmentprograms,StatecapacitydevelopmentstrategiesdevelopedunderthissectionwillvaryaccordingtotheuniqueneedsoftheState.TheConfereesencouragethisdiversityandindicatethatEPAshouldgivedeferencetoaStatesdeterminationastocontentandmannerofimplementationofaStateplan,solongastheStatehassolicitedandconsideredpubliccommentonthelistedelementsandhasadoptedastrategythatincorporatesappropriateprovisions.(2)0  SenatorKEMPTHORNE,AuthoroftheAct,excerptsfromConferenceReportSenators fP FloorStatement. (#(#   ThebillalsogivesStatesthesoleauthoritytodesignandimplementcapacitydevelopmentstrategiestoensurethatdrinkingwatersystemshavethefinancial,technicalandmanagerialresourcestheyneedtocomplywiththislaw.Undertheoldregulatoryapproach,wewouldhaverequiredStatestoadoptastrategyandsubmitittoEPAforreviewandapproval.Butwedonotdothathere.OnceaStateadoptsacapacitydevelopmentstrategy,EPAhasnoauthorityunderthislawtosecondguessitorpenalizetheStatebywithholdingFederalfunds.  WebelievestronglythatCongresshassignaledanewapproachforregulating,atboththefederalandstatelevels,whichshouldnotbecompromisedbywellmeaningstakeholdergroupsrecommendinghigherlevelsofcontrolthanthatcontemplatedbyCongress.WeurgetheϢNDWACtorespectCongressionalintentinthismatter.  +%(   xxXXCHAPTER4:  GuidanceforStatesonAssessmentofCapacityforPurposesofAwardingϢSRFAssistance#XXxx^#  D  AS) xdEcxA d   R XXPreparedfortheSmallSystemsWorkingGroupNationalDrinkingWaterAdvisoryCouncilRevisedFINALDRAFTDonotciteordistribute#XX  R_# 3  R XX _ July19,1997!  #XX  R`# c       TRP'3 Letter LandscapeY 3' Letter'3 Letter Landscape3' LetterT n z" SUMMARYOFREQUIREMENTS  &   Tocomplywiththeprovisionsof1452(a)(3)(A)and1452(a)(3)(B),StatesmustcompleteandsubmittoEPAthefollowingitems,discussedindetailabove.,XX6X(x XX, X6*fcfdd dd dd HI..f,m dd , dd +     Criteria '  'Requirements   1.0  ProceduretoAssessTechnical, n H Managerial,andFinancialCapacity 6   Tomeetitsstatutoryobligationsunderthisprovisioninthe firstyear ofimplementation,aStatemust: n H  "0  0q>0>0ProvideaspartofitsIUPanassurancethatitwillassessthetechnical,managerial,andfinancialcapacityofwater 6   systemsandabriefdescriptionoftheprocedurethatwillbeusedtoconducttheassessmentofcapacityboth at    presentandfortheforeseeablefuture .  q>0q>0 Tomeetitsstatutoryobligationsunderthisprovisioninsubsequentyears,aStatemust:"0  0q>0>0Summarizeaspartofitsoperatingplantheresultsofitsassessmentfromthepreviousyearanddescribeanychanges   toitsprocedureforassessingcapacityboth atpresentandfortheforeseeablefuture .  q>0q>0 2.0  ProcedureforAssessingWhether B  ТDWSRFAssistanceWillHelptoEnsureCompliance(ifasystemisnotpresentlyincompliance) t Tomeetitsstatutoryobligationsunderthisprovisioninthe firstyear ofimplementation,aStatemust: B  "0  0q>0>0ProvideaspartofitsIUPanassurancethatitwillassesswhethersuchassistancewillhelptoensurecomplianceanda    briefdescriptionoftheprocedurethatwillbeusedtoconducttheassessment. q>0q>0 Tomeetitsstatutoryobligationsunderthisprovisioninsubsequentyears,aStatemust:"0  0q>0>0Summarizeaspartofitsoperatingplantheresultsofitsassessmentfromthepreviousyearanddescribeanychanges * toitsprocedureforassessment. q>0q>0 3.0  ProcedureforAssessingWhetherthe N( SystemHasaLongTermPlantoDevelopAdequateTechnical,Managerial,andFinancialCapacity(ifasystemlackscapacity) nH! Tomeetitsstatutoryobligationsunderthisprovisioninthe firstyear ofimplementation,aStatemust: N(" "0  0q>0>0ProvideaspartofitsIUPanassurancethatitwillassesswhetherthesystemhasalongtermplantoundertake # feasibleandappropriatechangesinoperationsnecessarytodevelopadequatecapacityandabriefdescriptionoftheprocedurethatwillbeusedtoconducttheassessment. q>0q>0 Tomeetitsstatutoryobligationsunderthisprovisioninsubsequentyears,aStatemust:"0  0q>0>0Summarizeaspartofitsoperatingplantheresultsofitsassessmentfromthepreviousyearanddescribeanychanges ( toitsprocedureforassessment.#)q>0q>0  #   `* #XX,c#TRY 3' LetterP'3 Letter Landscape3' Letter'3 Letter LandscapeTz INTRODUCTION    ( TheSafeDrinkingWaterAct(SDWA)Amendmentsof1996(Pub.L.104182)authorizeaDrinkingWaterStateRevolvingFund(DWSRF)toassistpublicwatersystemsinfinancingthecostsofinfrastructureneededtoachieveormaintaincompliancewithSDWArequirementsandtoachievethepublichealthobjectivesoftheAct.Section1452authorizestheAdministratoroftheU.S.EnvironmentalProtectionAgency(EPA)toawardcapitalizationgrantstotheStates.TheStates,inturn,provideassistancetoeligiblewatersystems.Under1452(a)(3)(A),aStatemaynotprovideassistancetoasystemthatlacksthetechnical,managerial,orfinancialcapabilityg E#  2      ׀tomaintainSDWAcomplianceorisinsignificantnoncompliancewithany p  requirementofanationalprimarydrinkingwaterregulationorvariance.Twoexceptionstothisrequirementareprovidedin1452(a)(3)(B).ThisprovisionallowsStatestoprovideassistancetoasystemthatlackstechnical,managerial,orfinancialcapacityif:0 ( "0((#((#TheuseofthefinancialassistancefromtheDWSRFwillensurecompliance;and6 (#(# 0 ( "0((#((#Thesystemlacksadequatecapacity,theowneroroperatorofthesystemagreestoundertake  feasibleandappropriatechangesinoperationtoensuretechnical,managerial,andfinancialcapacitytocomplywithSDWAoverthelongterm. (#(#  ( AspartofaCapitalizationGrantApplication,eachStatemustagreetoreviewthetechnical,managerial,andfinancialcapabilityofallsystemsthatreceiveassistance.ThepurposeofthisguidanceistoprovidedirectiontothestatesindevelopingamethodforassessingsystemcapacityforthepurposesofAwardingSRFassistance.Thisisarequirementseparatefromthecapacitydevelopmentstrategyrequiredunder1420(c)oftheAct.ThesourceofthisguidanceistheAdministratorsauthoritytoissueguidanceunder1452(g)(3)oftheAct. ( Thisguidancedocument"developedinconsultationwithStatesandotherstakeholders"providestheminimumrequirementsforStateassessmentofasystemstechnical,managerial,andfinancialcapacityforthepurposesofdistributingSRFfunds.Toensuretheimplementationof1452(a)(3)(A),aStatemustdescribeitsproceduresfor:Kb  0 ( Kb|0((#((#  0(#(#assessingtechnical,managerial,andfinancialcapacityatthepresentandfortheforeseeable $  future;Kb||݌ (#(# Ќ  Kb   ( Kb}0    0(#(#assessingwhetherSRFassistancewillhelptoensurecompliance(ifasystemisnotin %" compliance);andKb}}݌ (#(# Ќ  Kb   ( Kb~0    0(#(#assessingwhetherthesystemhasalongtermplantodevelopadequatecapacity(ifasystem '!$ lackscapacity).Kb~ ݌ (#(# Ќ   ( EPArecognizesthattheassessmentofsystemcapacityisaniterativeprocessthatmaychangeasaStatepreparesitscapacitydevelopmentstrategyandevaluatesthesuccessofthestrategy. +%( ThisguidanceprovidesforaphasedapproachforStatestodevelopanddescribetheirassessmentprocedures.Inthefirstyearofimplementation,Statesmustprovideaprospectivedescriptionoftheprocedurestheywillusetoassesssystemcapacity.Insubsequentyears,Statesmustsummarizetheresultsfromthepreviousyearsassessmentanddescribeanychangestotheproceduresforassessingtechnical,managerial,andfinancialcapacity.ThisprovidesStateswiththeopportunitytochangetheirassessmentprocedurestomeettheneedsoftheircapacitydevelopmentstrategies.FortoolsandapproachesthatStatescanusetoassesssystemcapacity,seeInformationforStatesonAssessmentofCapacityforthePurposesofAwardingSRF   Assistance.    ( Indevelopingproceduresforassessingsystemcapacity,StatesshouldrecognizethattheseassessmentsaretobeusedaspartofasystematicprocessthatwillbetterenabletheStatetocarryoutothertasksrequiredbyorvitaltothelawandthedrinkingwaterprogram.ItisthroughexaminationofthebroadgoalsoftheprogramandofitsstrategythataStatecanselectthetoolsandapproachestoassessmentthatwillmosteffectivelybenefititsoverallprogram.Viewingeachcomponentofthecapacitydevelopmentprocess"includingthemethodforassessingsystems"asonepartofanintegratedwholewillenableStatestodevelopacomprehensive,integratedstrategyforcapacitydevelopmentthatwillmaketheimplementationofthelawmoreworkable,consistent,andeffective. CRITERIA    1.ProceduretoAssessTechnical,Managerial,andFinancialCapacity    ( Section1452(a)(3)(A)oftheAmendmentsprovidesthataStatemaynotprovideassistancetoasystemthatlacksthetechnical,managerial,andfinancialcapabilitytoensureandmaintain v` ТSDWAcompliance.Tocomplywiththisprovision,aStatemusthaveaproceduretoassessthetechnical,managerial,andfinancialcapacityofwatersystemsatpresentandfortheforeseeablefuture. ( Tomeetitsstatutoryobligationsunderthisprovisioninthe firstyear ofimplementation,a &# Statemust: ( "0  ProvideaspartofitsIUPanassurancethatitwillassessthetechnical,managerial,and %" financialcapacityofwatersystemsandabriefdescriptionoftheproceduresthatwillbeusedtoconducttheassessmentofcapacity atpresent .'!$(#(# 0 ( "0((#((#ProvideaspartofitsIUPanassurancethatitwillassessthetechnical,managerial,and )#& financialcapacityofwatersystemsandabriefdescriptionoftheproceduresthatwillbeusedtoconducttheassessmentofcapacity fortheforeseeablefuture .+%((#(#   ,p&) &    ( Tomeetitsstatutoryobligationsunderthisprovisioninsubsequentyears,aStatemust: ( "0  Summarizeaspartofitsoperatingplantheresultsofitsassessmentfromthepreviousyear  anddescribeanychangestoitsprocedureforassessingcapacitybothatpresentandfortheforeseeablefuture. (#(# ' 2.0  ProcedureforAssessingWhetherDWSRFAssistanceWillHelptoEnsureCompliance   (ifasystemisnotpresentlyincompliance)  (#(#  ( Section1452(a)(3)(B)permitsStatestoprovideassistancetosystemsdescribedin1452(a)(3)(A):0 ( "0((#((#IftheuseofthefinancialassistancefromtheDWSRFwillensurecompliance;andF0 (#(# 0 ( "0((#((#Ifthesystemlacksadequatecapacity,theowneroroperatorofthesystemagreesto 6  undertakefeasibleandappropriatechangesinoperationtoensuretechnical,managerial,andfinancialcapacitytocomplywithSDWAoverthelongterm. (#(#  ( Todeterminewhichsystemsareeligibleforassistanceunder1452(a)(3)(B),Statesmustdevelopaprocedureforassessingwhethersuchassistancewillhelptoensurecomplianceinasystemthatisnotpresentlyincompliance. ( Tomeetitsstatutoryobligationsunderthisprovisioninthe firstyear ofimplementation,a  Statemust: ( "0  ProvideaspartofitsIUPanassurancethatitwillassesswhethersuchassistancewillhelpto p ensurecomplianceandabriefdescriptionoftheproceduresthatwillbeusedtoconducttheassessment. (#(#  ( Tomeetitsstatutoryobligationsunderthisprovisioninsubsequentyears,aStatemust: ( "0  Summarizeaspartofitsoperatingplantheresultsofitsassessmentfromthepreviousyear &# anddescribeanychangestoitsprocedureforassessment. (#(#  3.0  ProcedureforAssessingWhethertheSystemHasaLongTermPlantoUndertake & # FeasibleandAppropriateChangesinOperationsNecessarytoDevelopAdequateCapacity(ifasystemlackscapacity) ("%(#(#  ( Section1452(a)(3)(B)permitsStatestoprovideassistancetosystemsdescribedin1452(a)(3)(A): 0 ( "0((#((#IftheuseofthefinancialassistancefromtheDWSRFwillensurecompliance;andv-`'*(#(# 0 ( "0((#((#Ifthesystemlacksadequatecapacity,theowneroroperatorofthesystemagreesto   undertakefeasibleandappropriatechangesinoperationtoensuretechnical,managerial,andfinancialcapacitytocomplywithSDWAoverthelongterm. (#(#  ( Todeterminewhichsystemsareeligibleforassistanceunder1452(a)(3)(B),Statesmustdevelopaprocedureforassessingwhetherthesystemhasalongtermplantoundertakefeasibleandappropriatechangesinoperationsnecessarytodevelopadequatecapacity(ifasystemlackscapacity). ( Tomeetitsstatutoryobligationsunderthisprovisioninthe firstyear ofimplementation,a p  Statemust: ( "0  ProvideaspartofitsIUPanassurancethatitwillassesswhetherthesystemhasalongterm V@  plantoundertakefeasibleandappropriatechangesinoperationsnecessarytodevelopadequatecapacityandabriefdescriptionoftheproceduresthatwillbeusedtoconducttheassessment. (#(#  ( Tomeetitsstatutoryobligationsunderthisprovisioninsubsequentyears,aStatemust: ( "0  Summarizeaspartofitsoperatingplantheresultsofitsassessmentfromthepreviousyear  anddescribeanychangestoitsprocedureforassessment. (#(#    TRP'3 Letter LandscapeY 3' Letter'3 Letter Landscape3' LetterTF i  MinorityOpinion  NOTE:Aminorityopinionwasofferedby2membersoftheGroup(WilliamVanDeValkandDonnaShell)duringthediscussionofthecontentforthisguidancedocument.AttheWorkingGroupsrequest,thefollowingtablesummarizestherequirementsfortheguidanceasproposedbytheminorityopinion.,XX *flmddm dd dd cf..f,m dd , dd +    x Criteria '  'Requirements   1.0  ProceduretoAssessTechnical, N 8  Managerial,andFinancialCapacity   Tomeetitsstatutoryobligationsunderthisprovisioninthe firstyear ofimplementation,aStatemust: N 8  "0  0q>0>0ProvideaspartofitsIUPa comprehensivedescription ofitsproceduresforassessingcapacitybothatpresentand   fortheforeseeablefuture. q>0q>0 Tomeetitsstatutoryobligationsunderthisprovisioninsubsequentyears,aStatemust:"0  0q>0>0Summarizetheresultsofitsassessmentfromthepreviousyearanddescribeanychangestoitsprocedurefor 6  assessingcapacityboth atpresentandfortheforeseeablefuture .  q>0q>0 2.0  ProcedureforAssessingWhether ZD  ТDWSRFAssistanceWillHelptoEnsureCompliance(ifasystemisnotpresentlyincompliance)  Tomeetitsstatutoryobligationsunderthisprovisioninthe firstyear ofimplementation,aStatemust: ZD  "0  0q>0>0ProvideaspartofitsIUPa comprehensivedescription ofitsassessmentprocedures." q>0q>0 Tomeetitsstatutoryobligationsunderthisprovisioninsubsequentyears,aStatemust:"0  0q>0>0Summarizetheresultsofitsassessmentfromthepreviousyearanddescribeanychangestoitsprocedurefor zd assessment. B,q>0q>0 3.0  ProcedureforAssessingWhetherthe  SystemHasaLongTermPlantoDevelopAdequateTechnical,Managerial,andFinancialCapacity(ifasystemlackscapacity)   Tomeetitsstatutoryobligationsunderthisprovisioninthe firstyear ofimplementation,aStatemust: ! "0  0q>0>0ProvideaspartofitsIUPa comprehensivedescription ofitsassessmentprocedures.fP"q>0q>0 Tomeetitsstatutoryobligationsunderthisprovisioninsubsequentyears,aStatemust:"0  0q>0>0Summarizetheresultsofitsassessmentfromthepreviousyearanddescribeanychangestoitsprocedurefor % assessment.#p&q>0q>0  ##XX,#