United States
Environmental Protection
Agency
vvEPA              National
                    Capacity
                    Development
                    Strategic Plan

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Office of Water
EPA816-K-07-003
www. epa.gov/safewater
January 2008

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Contents
  Executive Summary	iii

  Background of the Capacity Development Program	1
  Statutory Creation of the Capacity Development Program	2
  Purpose of the Capacity Development Strategic Plan	2
  Five Key Attributes Needed to Promote Capacity Development	3

  National Capacity Development Goals	4
  Goal 1: Maintain Effective Oversight of State Capacity Development Programs	4
    Objective 1.1	4
    Goal 1 Outputs	4
    Goal 1 Outcomes	5
  Goal 2: Assist Public Drinking Water Systems with Acquiring and Maintaining TMF	5
    Objective 2.1	5
    Objective 2.2	6
    Goal 2 Outputs	6
    Goal 2 Outcomes	6
  Goal 3: Elevate Awareness of Capacity Development Activities within EPA's Sustainable
  Infrastructure Initiative	7
    Objective 3.1	7
    Objective 3.2	7
    Objective 3.3	7
    Objective 3.4	7
    Goal 3 Outputs	7
    Goal 3 Outcomes	8
  Implementation of the Strategic Plan	9
  Strategic Plan Activities	9
   Activities to Support Goal 1	9
   Activities to Support Goal 2	10
   Activities to Support Goal 3	11

  Challenges to Plan Implementation	11

  Appendices
   Appendix A: Goal-Outcome Flow Chart
   Appendix B: Major Roles and Responsibilities in Implementation of the Capacity
   Development Strategic Plan
   Appendix C: Capacity Development Strategic Goals as Reflected in the PWSS Logic Model
   Appendix D: National Capacity Development Strategic Plan Summary Chart

  References
National Capacity Development Strategic Plan

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National Capacity Development Strategic Plan

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   National Capacity Development Strategic Plan
Safe, reliable drinking water is essential to the protection of public health.  Because of
this, the U.S. Environmental Protection Agency (EPA) identified Water Safe to Drink as
a key sub-objective in its Strategic Plan for 2006-2011. The nation's drinking water
systems face a wide array of challenges in meeting the public health protection standards
aimed at ensuring safe drinking water.  The National Capacity Development Program is
designed to focus available resources toward assisting public drinking water systems
(PWSs) in acquiring and maintaining the technical, managerial, and financial (TMF)
capacity to meet these challenges.
This plan provides a roadmap identifying how EPA's National Capacity Development
Program will support the Office of Water's strategic  goal to improve PWS performance.
Furthermore, this plan explains how the National Capacity Development Program
provides,  promotes, and protects public health through safe drinking water. Through
proactive communication and outreach, in collaboration with States, partners, and other
stakeholders, EPA will seek innovative approaches and new technologies to help ensure
that nationally, water systems have the TMF capacity to demonstrate long-term
sustainability.

This plan consists of three goals for EPA's National  Capacity Development Program:

    1.   Maintain Effective Oversight of State Capacity Development Programs

   2.   Assist Public Drinking Water Systems with Acquiring and Maintaining Technical,
       Managerial, and Financial Capacity

   3.   Elevate Awareness of Capacity Development Activities within EPA 's Sustainable
       Infrastructure Initiative
In order to demonstrate full accountability of EPA's  efforts in the National Capacity
Development Program, EPA intends to develop an internal National Capacity
Development Program Update Report on a triennial schedule. This report will be
initiated in FY08.  It is not EPA's intent to specifically identify any individual State or to
conduct State-to-State comparisons or analysis. It is, however, EPA's intent to utilize
this information in an effort to identify trends and further target resources. EPA will
update this strategy to incorporate new information and activities on an as-needed basis.

The Capacity Development Program is a key component of the Public Water System
Supervision (PWSS) Program. EPA has developed the PWSS Program Logic Model to
link the activities of the  Drinking Water Program to the overall outcomes of EPA's
Strategic Plan. The Model will be used extensively to assist in guiding the goals of the
Capacity Development Program Strategic Plan. The Capacity Development Program
Strategic Plan is an extension of the Logic Model and provides a higher level of detail in
specific areas, as identified in Appendix C. The specific logic for the Capacity
Development Program can be found in Appendix D of this plan.

National Capacity Development Strategic Plan                                           iii

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National Capacity Development Strategic Plan

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Background of the Capacity Development Program

Public drinking water systems serving 10,000 or fewer customers represent over 97 percent of
the nation's PWSs (Safe Drinking Water Information System (SDWIS) Data, 2005).  Smaller
systems often have more challenges in TMF resources than their larger counterparts.  Many
small systems were created when regulatory standards were less protective and less demanding.
These systems provided a simple and expedient way for small communities or subdivisions to
obtain a supply of drinking water. Some of the challenges, for both large and small systems, are:

   •   The need to upgrade or replace aging infrastructure with inadequate funds.

   •   The availability of an adequate and safe  supply of source water.

   •   The need to protect the water source.

   •   The public's increasing demands for lower utility costs.

   •   The establishment of more enhanced and protective regulatory requirements or rules.
In recognition of the challenges facing these smaller PWSs, Congress established several
provisions  of the 1996 Safe Drinking Water Act (SDWA) Amendments with a small system
focus, including implementation of the Capacity Development Program.  This provision places a
significant  emphasis on assisting PWSs of all  sizes in acquiring and maintaining their TMF
capacity. TMF capacity is the ability to plan for, achieve, and continually provide safe and
affordable drinking water to customers. Figure  1: TMF Capacity Elements outlines the key
elements of TMF capacity and illustrates the crucial  role of planning for,  achieving, and
maintaining TMF capacity.

                            Figure 1: TMF Capacity Elements
                       Technical Capacity
                            Managerial Capacity
                                                    Ownership Accountability
                                                    Staffing and Organization
Source Water Adequacy
Infrastructure Adequacy
                       Implementation of
                       Technical
                       Knowledge
                             Effective External
                             Linkages
                                      Short-Term &
                                       Long-Term
                                        Planning
                                     Financial Capacity
                                       Revenue Sufficiency
                                       Credit Worthiness
                                       Fiscal Management
                                       and Controls
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Statutory Creation of the Capacity Development Program

Congress established broad direction for the development and implementation of the National
Capacity Development Program in the 1996 SDWA Amendments with the following statutory
provisions. In order to avoid Drinking Water State Revolving Fund (DWSRF) withholding:

   •   States must ensure that all new community water systems (CWSs) and nontransient
       noncommunity water systems (NTNCWSs) demonstrate technical, managerial, and
       financial (IMF) capacity (§1420(a)).

   •   States must develop and maintain implementation of a strategy to assist public water
       systems in acquiring and maintaining technical, managerial, and financial (TMF) capacity
       (§1420(c)(l)(C)).

Congress provided States with the flexibility to devise their own individual strategies to meet the
1996 requirements. While States have flexibility in developing and implementing their Capacity
Development Programs, they must ensure the basic requirements are met. EPA annually
assesses State Capacity  Development Program implementation, which is compared to program
reporting guidance and approved State programs.  States that fail to meet their Capacity
Development Program implementation responsibilities are subject to withholding of a portion of
their annual DWSRF allotment.
Purpose of the Capacity Development Strategic Plan

The Capacity Development Strategic Plan is comprised of goals, objectives, sub-objectives,
strategic targets, capacity development activities (outputs), and outcomes. All of these elements
are intended to directly support the Water Safe to Drink sub-objective and the broader goals of
EPA's Strategic Plan for 2006-2011 (see Figure 2: Linkage Between EPA 's 2006-2011
Strategic Plan and Capacity Development Strategic Plan)1 This strategic plan was developed in
consultation with EPA Regions and States.
1 Taken from the 2006-2011 EPA Draft Strategic Plan Architecture.


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     Figure 2: Linkage Between EPA's 2006-2011 Strategic Plan and Capacity Development
                                      Strategic Plan
                               EPA Goal 2: Clean and Safe Water
                            EPA Objective 2.1: Protect Human Health

               By reducing exposure to contaminants in drinking water (including protecting
                    source waters), in fish and shellfish, and in recreational waters.
                           EPA Sub-objective 2.1.1: Water Safe to Drink
                           PWSS Program Implementation Logic Model
                          National Capacity Development Strategic Plan
Five Key Attributes of Capacity Development

The Capacity Development Program is designed to better position water systems to provide,
promote, and protect public health through safe drinking water. EPA will strive toward the most
effective utilization of stakeholder resources, reducing the funding gap, and sustaining the
nation's water infrastructure for the future.  This will be accomplished  through the proactive use
of effective and innovative approaches and technologies, and a commitment to long-term
stewardship of drinking water resources, systems, and operators.  This  can only be performed
through the use of open communication, collaboration, and coordination with all stakeholders.
The effective promotion of capacity development depends on the program being:

    •   Flexible so that EPA and States can maximize the use of available resources and
       capabilities to implement capacity development processes that meet the unique needs of
       each State.
    •   Proactive in identifying and targeting assistance to water systems most in need of
       improving their TMF capabilities.

    •   Integrated so the resources of all Federal and State drinking water programs are
       considered.

    •   Accountable by demonstrating that capacity development helps water systems provide
       safe water to customers.

    •   Collaborative to the extent that all entities, agencies, groups, and associations act
       together to support one another.
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EPA is committed to using existing sources of data to support each goal and to measure progress.
If it is determined that additional information is necessary to ensure accuracy and completeness,
EPA will work closely with States to minimize any additional reporting burden.  EPA recognizes
that there are a number of critical factors that have the potential to affect the outputs and
outcomes associated with each goal. Further discussion on each of these factors can be found in
the Challenges to Implementation section of this document (p.  11). The goals of this program
and their related outputs and outcomes are summarized in Appendix A.

Goal 1: Maintain Effective Oversight of State Capacity Development Programs
It is EPA's responsibility to ensure that State capacity development strategies are implemented
as intended. It is through this oversight activity that EPA will support State efforts in obtaining a
solid program foundation to help ensure that systems have the TMF capacity to demonstrate
long-term sustainability.

   Objective 1.1:  Ensure State implementation of Capacity Development Programs.

      Strategic Target 1.1: Annually assess and respond to State Capacity Development
      Program Reports.

Goal 1 Outputs
The data for these output indicators may come from a number of sources, including the Capacity
Development Program Evaluation Tool (CDPET), SDWIS, DWSRF reviews and reports,
Sanitary Surveys, Triennial Governor's Reports, and the State's Annual Capacity Development
Implementation Reports.

       1.  State Capacity Development Programs assessed
      One critical function of the Federal Capacity Development Program is to assess State
      Capacity Development Programs. This quantitative indicator will capture Federal
      government efforts in reviewing State programs.

      2.  New water systems assessed for capacity
       State Capacity Development Programs are designed to ensure that all new CWSs and
      NTNCWSs have adequate capacity.  Therefore, an output from this Capacity
      Development Program is the number of capacity assessments of new water  systems (or
      proposed water systems) completed by the State primacy agency program, expressed as a
      percentage.

      3.  Existing systems assessed for capacity
      One of the key tasks for a State Capacity Development Program is to identify existing
      water systems that have inadequate capacity and are most in need of assistance.  The
      flexibility provided to States by Congress in the implementation of these programs allows
      discretion for frequency and method of assessments. The quantitative indicator of this
      output, percent of existing water systems annually that have been assessed for capacity,
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       will capture the portion of water systems that States have reviewed in identifying systems
       that need to build additional capacity.

Goal 1 Outcomes
The data for these outcome indicators are dependent on State Primacy information, both
collected and provided.  Main sources of information will be compiled from SDWIS, DWSRF
National Information Management System (NIMS), State DWSRF Intended Use Plans (HJPs),
and State's Annual Capacity Development Implementation Reports.

       1.  Fewer systems with long-term health-based violations
       The collective capacity development efforts of Federal and State partners should improve
       the TMF capabilities of water systems, which should result in fewer water systems failing
       to meet all health based National Primary Drinking Water Regulations (NPDWRs) (See
       Goal 2, Outcome 1). This quantitative outcome indicator, percent of systems that are in
       compliance with all health-based NPDWRs, captures this benefit and provides a direct
       link to the strategic targets of EPA's PWSS Program. Additional support for this
       indicator will come  from the compliance rate of PWSs by analyzing:

          A. The annual percentage of health-based Significant Non Complier (SNC) PWS, by
             size and violation type.

       2.  Reduction of new systems with inadequate capacity
       The intent of this outcome is to demonstrate the effectiveness of the new system
       programs nationally as it relates to the number of new water systems that exhibit
       inadequate capacity. This is reflected through system compliance  as reported in SDWIS.
       The quantitative indicator of this outcome will come from the compliance rate of PWSs
       by analyzing:

          A. The annual percentage of SNC New PWSs, by size and violation type.

       3.  Maintain a proactive working relationship with State co-regulators
       One immediate benefit generated by Federal and State Capacity Development Program
       efforts is the continuous efforts of both parties in maintaining their existing open,
       proactive working relationship.  This qualitative outcome indicator is created by the
       cooperative efforts of Federal staff, State staff, and water system staff working towards
       the same goal, which is to make water systems more self-sufficient in support of long-
       term goals.

Goal 2: Assist Public Drinking Water Systems with Acquiring and Maintaining
Technical, Managerial, and Financial Capacity
Increasing the number of PWSs that achieve and maintain TMF capacity will provide PWSs with
the tools and knowledge to  provide drinking water that meets all health-based drinking water
standards.

   Objective 2.1: Coordinate with States to ensure that drinking water systems acquire and
   maintain the capacity to consistently provide safe drinking water to the public.

National Capacity Development  Strategic Plan                                            5

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       Strategic Target 2.1: Identify compliance trends and coordinate with States in addressing
       the potential causes for non-compliance.

   Objective 2.2: Annually obtain input and feedback on SDWA training needs from EPA
   Grant Recipient Technical Assistance Providers, regional EPA Capacity Development
   Coordinators, and State primacy agency capacity development staff.

       Strategic Target 2.2: Identify training needs and develop or improve tools for training.
       This effort is targeted towards assisting PWSs in the areas of technical, managerial, and
       financial  system capability.

Goal 2 Outputs
The data for this output indicator will come from a number of sources, including the State's
Triennial Governor's Reports, EPA Webcasts, DWSRF NIMS, SDWIS, PWSS Grant reports,
technical assistance grantee reports, and National Service Center for Environmental Publications
(NSCEP) Inventory System Distribution for Publications.

       1.  Systems receiving TMF assistance
       Once States have identified PWSs with inadequate capacity, the intended role of the State
       Capacity Development Program is to provide assistance to those systems to help them
       acquire capacity. This assistance can take many forms and is often broadly termed as
       technical assistance and is not limited to outputs generated from the States. The
       quantitative indicator of this output, number of systems that have received assistance, will
       capture the efforts of States and other stakeholders to help water systems improve their
       capacity.

Goal 2 Outcomes
The data for this outcome indicator will come from the triennial Historical Significant Non-
compliers (HSNC) report and SDWIS.

       1.  Fewer systems with long-term health-based violations
       The collective capacity development efforts of Federal and State partners should improve
       the TMF capabilities of water systems, which should result in fewer water systems failing
       to meet all health based NPDWRs (See Goal 1, Outcome 1). This quantitative outcome
       indicator, percent of systems that are in compliance with all health-basedNPDWR,
       captures this benefit and provides a direct link to the strategic targets of EPA's PWSS
       program. Additional support for this indicator will come from the compliance rate of
       PWSs by analyzing:

          A. The annual percentage of health-based SNC PWSs, by  size and violation type.

       2.  Reduced number of Historical Significant Non-compliers
       In addition to the overall improvements in compliance with NPDWRs, the Capacity
       Development Program should improve the capacity of water systems as identified
       through an HSNC trends analysis. This quantitative outcome indicator, number of
       systems that are on State HSNC lists, will capture the reduction in the  number of systems

National Capacity Development Strategic Plan                                            6

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       nationally with chronic compliance problems.  The focus for this indicator will come
       from the compliance rate of PWSs by analyzing:

          A. The annual number of HSNC PWSs, by size and violation type.
Goal 3: Elevate Awareness of Capacity Development Activities within EPA's
Sustainable Infrastructure Initiative
As more PWSs increase their awareness of sustainable practices, challenges affecting
programmatic success can be identified, addressed, and overcome.

   Objective 3.1: Identify Federal funding programs that focus on public drinking water
   systems and update this information as needed.

       Strategic Target 3.1.1: Promote the DWSRF Program by providing program assistance
       and training to States.

       Strategic Target 3.1.2: Coordinate, research, compile, disseminate, and maintain a list of
       Federal drinking water funding programs available for public drinking water systems.

   Objective 3.2: Support Operator Certification Programs.

          Sub-objective 3.2: Assist States in operator training and certification initiatives
          through active coordination and participation with various training and certification
          organizations and initiatives, and support of operator training programs.

       Strategic Target 3.2: Annually assess State Operator Certification Program management.

   Objective 3.3: Promote better management of public water systems.

       Strategic Target 3.3: Develop, promote, and distribute tools (CUPSS, etc.) in support of
       asset management activities.

   Objective 3.4: Promote new and current rule implementation activities into Capacity
   Development Program implementation.

       Strategic Target 3.4: Incorporate information into training and guidance on new and
       current Safe Drinking Water Rule implementation issues.

Goal 3 Outputs
The data for this output indicator will come from the DWSRF NIMS, State DWSRF lUPs,
EPA's Community Water System Survey, and trends identified within the Drinking Water
Infrastructure Needs Assessment.
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       1.  Identify States' use of capacity development DWSRF set-asides
       A significant source resource for State Capacity Development Programs is the DWSRF
       set-asides that are available to all States. These funds can be used to pay for the staff and
       technical assistance efforts of State programs. The quantitative indicator of this output
       will be the percent of DWSRF set-aside dollars expended for capacity development
       purposes.

       2.  Provide effective guidance on new and current SDWA rule implementation
          issues
       This is performed by EPA taking a lead role in assisting its partners in rule
       implementation initiatives for public drinking water systems through the development of
       rule-related guidance, training, and information materials.

       3.  Conduct and analyze customer satisfaction surveys for EPA provided training
          and tools
       EPA, in accordance with the Information Collection Rule (ICR), will conduct customer
       satisfaction surveys with stakeholders that obtain EPA services, products, and training.
       This will assist EPA in obtaining its goals and identifying better use of its outputs.

Goal 3 Outcomes
The data for this outcome indicator will come from EPA's Community Water System Survey
and trends identified within the Drinking Water Infrastructure Needs Assessment, DWSRF
NEVIS, Capacity Development Reports to the Governor, and PWSS work plans.

       1.  Better targeting of resources because systems have increased capacity
       As the capacity of water systems across the country improves over time, water systems,
       especially small water systems, should become more self-sufficient. This change should
       allow Federal and State regulators to shift their focus away from triage of struggling
       systems to long-term planning and compliance efforts.  The qualitative indicator for  this
       outcome can be identified through increased compliance rates, any noticeable shifts in
       primacy agency workload or programmatic focus as identified in state reporting, trends in
       system consolidation, and position papers from stakeholder represented associations.
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EPA, States, systems, and stakeholders have key roles to exercise in the successful
implementation of the National Capacity Development Strategic Plan and, ultimately, in
ensuring public health protection. Appendix B identifies the various areas of implementation
and the role each party can play in making this strategic plan a success.

EPA anticipates aligning the Capacity Development Program with other ongoing program
assessment efforts.  EPA has developed the PWSS Logic Model to link the activities of the
drinking water program to the overall outcomes of EPA's Strategic Plan.  The Model will be
used extensively to assist in guiding the goals of the Capacity Development Program Strategic
Plan.  The Capacity Development Program Strategic Plan is an extension  on the Logic Model,
and provides a higher level of detail in specific areas, as identified in Appendix C.  The specific
logic for the Capacity Development Program can be found in Appendix D of this plan.

An internal EPA National Capacity Development Program Update Report will be developed on a
triennial schedule based on available data. This report will be initiated in FY08, allowing
enough time for initial and second year national program data entered into the CDPET to be
analyzed for trends and successes. It is not EPA's intent to specifically identify any individual
State or to conduct  State-to-State comparisons or analysis. It is, however, EPA's intent to utilize
this information in an effort to identify trends and further target resources.

In carrying out this strategy, EPA will adopt the Plan, Do, Check, Act approach associated with
continuous-improvement programs. EPA will update this strategy to incorporate new
information and activities on an as-needed basis. Likewise, the strategic approaches for the three
goals will be considered living documents that will be revised on an ongoing basis.

It is anticipated that discussions of progress towards achieving capacity development goals may
be included in Agency reporting to Office of Management and Budget (OMB) and Congress, and
may be reflected in external reports, such as the Drinking Water Needs Surveys and SNC
Reports.



The following are some of the  Capacity Development Program activities that support the
National Capacity Development Strategic Plan goals.

Activities to Support Goal 1: Maintain Effective Oversight of State Capacity
Development Programs

   •   Capacity Development Program Evaluation Tool (CDPET): EPA will implement
       CDPET, a Web-based program evaluation tool that will  compile information on and help
       EPA regional staff in assessing State capacity development activities.
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   •   Communication with primacy agency staff: EPA regional staff is encouraged to
       continue open communication with State primacy agency staff in response to
       implementation reports and assessment findings.

Activities to Support Goal 2: Assist Public Drinking Water Systems with
Acquiring and Maintaining Technical, Managerial, and Financial Capacity
   •   Expanding Communication: Provide opportunities that promote open communication
       between States, technical assistance providers, water systems,  and EPA. This activity
       includes open discussion forums between EPA and its numerous stakeholders during
       various workshops, meetings, and conference calls to assist States with Capacity
       Development Program implementation issues and to identify training needs for all
       stakeholders.

   •   Programmatic Assistance: Provide programmatic assistance  for the Capacity
       Development Program implementation through Webcast trainings, tool and document
       development, and grant program management and development. Continue, as needed,
       providing through EPA's Drinking Water Academy and other  venues, training courses
       for States and water systems designed to enhance TMF capacity knowledge and
       capabilities.

   •   Feedback: Obtain feedback from operators and owners on their current training and
       assistance needs in all areas of capacity development.

   •   Compliance Trend Analysis: Perform compliance trends analyses to identify capacity
       needs of small PWSs.

   •   Technical Assistance Centers (TACs)  and Environmental Finance Centers (EFCs)
       Involvement: Continue working with the EFCs and the Small System TACs to provide
       assistance in improving the capacity of water systems.

   •   Tool Development: Continue development, as needed, of the  Simple Tools for Effective
       Performance (STEP) Guides and other targeted tools and documents that provide TMF
       capacity development support to small systems.

   •   SDWA Rule Implementation:  Provide support for rule implementation by developing,
       as needed, rule-related information and training materials such as guidebooks, Quick
       Reference Guides, and classroom and Webcast training sessions.

   •   Capacity Development Workshops: Conduct, as needed, capacity development training
       workshops for EPA, State, and technical assistance providers to address the training
       needs of Capacity Development Program management personnel while providing a forum
       for information exchange.
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Activities to Support Goal 3: Elevate Awareness of Capacity Development
Activities within EPA's Sustainable Infrastructure Initiative

   •   Program Promotion: Promote programmatic tools and technical assistance in multiple
       program areas.

   •   Participation: Continue active participation with all appropriate stakeholders.

   •   Program Oversight: Continue to provide program oversight to EPA regions and States
       for the Operator Certification Program.

   •   DWSRF: Provide program assistance and information to States through the promotion of
       the DWSRF strategic plan initiatives.

   •   Sustainable Infrastructure  Initiative: Engage stakeholders through proactive dialogue
       and face-to-face meetings to  determine how to effectively promote long-term
       sustainability of systems through better management, full-cost pricing, water efficiency,
       and watershed protection.

   •   Tool Development: Continue development, as needed, of the STEP Guides and other
       targeted tools and documents that provide TMF capacity development support to small
       systems.

   •   Integration: Link activities of EPA's regional enforcement groups, capacity
       development coordinators, operator certification program managers, and State program
       managers through active communication and updates of each groups' activities relative to
       capacity development.

               to
A number of critical factors have the potential to affect the means and strategies for meeting the
objectives and sub-objectives of the  Capacity Development Strategic Plan, including:

   •   Limited control over implementation: While EPA has oversight responsibility, States
       and other stakeholders, such  as associations and third-party contractors are primary
       partners in implementing the Capacity Development Program.  EPA may have to
       consider pursuing, with stakeholder cooperation, ways in which to obtain more
       measurable information in support of the outcomes identified by this strategic plan.

   •   Operation and maintenance costs: Rising water  system operation and maintenance
       costs make maintaining effective financial capacity challenging.

   •   Water system operator staffing: The retention of current operators and recruitment of
       new trainees is becoming more difficult due to the low national average salary of $30,843
       (based on EPA's Community Water System Survey 2000 [2002]).
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   •   Local-level leadership changes: Board members, municipal leaders, owners, town
       managers and other PWS decision makers often change resulting in learning curves, new
       approaches, and changes in priorities.

   •   Federal and State fiscal pressures: Federal and State budget shortfalls may affect
       progress toward program goals.

   •   Natural disasters/terrorist attacks: Programmatic focus and priorities temporarily shift
       during these types of national events, as was demonstrated during Hurricanes Katrina and
       Rita.

   •   Lack of comparability due to variability in approaches: Congress gave the States
       great flexibility in designing and implementing capacity development. As a result,
       capacity development activities at the State level can be  so variable there is little
       commonality in outputs.  Finding elements that EPA can measure to provide a "national"
       picture is challenging under the circumstances.

   •   Difficulty showing periodic progress: The length of time required for capacity
       development activities to produce outcomes makes it difficult for EPA to report progress
       annually. Long-term outcomes may take years to manifest themselves, and capacity
       development is generally a long-term sustainability process.  In addition, external factors
       can make it difficult to show a direct relationship between a specific program goal and
       the activities or outputs that caused the eventual outcome.

   •   States' concerns over data collection burden and accuracy: The time and cost of
       collecting comprehensive data also are obstacles to developing performance indicators.
       The Government Accountability Office (GAO) has indicated that the following
       challenges with data collection as identified by Federal managers: using data collected by
       others; ascertaining the accuracy and quality of performance data; and acquiring data in a
       timely manner.

   •   Challenge of keeping  up with new program requirements: The number of new rules
       recently promulgated may have a short-term drag effect on meeting performance targets.
       Water systems typically take additional steps to comply with the new requirements,
       which ultimately lead to overall improvements in drinking water quality. However, in
       the short-term, performance may actually appear to deteriorate, due to the challenges of
       coming up to speed with new rule requirements.
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                A:
                 Goal 1:

    Maintain Effective Oversight ofState
      Capacity Development Programs
             Goal 1 Outputs:

    3.   State Capacity Development
         Programs Assessed

    4.   New Water Systems Assessed
         for Capacity

    5.   Bxisting Systems Assessed for
         Capacity
            Goal 1 Outcomes:

    1.    Fewer systems with long-term
         heahh-based violations

    2.    Reduction of new systems
         with inadequate capacity
         being permitted

    3.    Maintain a proactive working
         relationship with State co-
         regulators
Appendix A: Goal-Outcome Flow Chart
              Goal 2:

 Assist Public Drinking Water Systems
   with Acquiring and Maintaining
 Technical, Managerial, and Financial
          (T:\-fF) Capacity
          Goal. 2 Outputs:

         Systems Receiving TMF
         Assistance
         Goal 2 Outcomes:

    L   Fewer systems widi long-
         term health-based violations

    2.   Reduced number of
         Historical Significant Non-
         compliers
All Outcomes Support EPA Strategy for
              2006-2011

EPA Sub-objective 2.1.1: Water Safe to
               Drink
                Goal 3:

Elevate Awareness of Capacity Development
    Activities within EPA. 's Sustainable
         Infrastructure Initiative
            Coal 3 Outputs:

   1.   Identify States use of Capacity
        Development DWSRF Set-Asides

   2.   Provide Effective Guidance on
        New and Current Safe Drinking
        Water Rule Implementation Issues

   3.   Conduct and analyze customer
        satisfaction surveys for EPA
        provided training and tools
              Goal 3 Outcomes:

   1.   Better targeting of resources because
        PWSs have increased capacity

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                B:                                                      in

Activity

Develop Triennial
National Program
Update Report



EPA

Headquarters
Analyze national program
data for trends and successes;

Develop Report


Regions
Collect and submit
State capacity
development (CD)
data; review draft
Report and provide
feedback

States

Submit annual CD
implementation reports
and data to regions;
review draft Report and
provide feedback

Pnhlir Wntpr
f UUUV VT ulC&
Systems
Submit CD data to
States, where
required




Other Stakeholders

Association of State
Drinking Water
Administrators (ASDWA)
- Review draft Report and
provide feedback

Goall
Implementation of the
Capacity Development
Program Evaluation
Tool

Facilitate open
communication between
EPA and States










Finalize development of
Tool; implement and
maintain Tool infrastructure:
monitor data entered by
regions; analyze data reports
Organize and attend various
workshops, meetings, and
conference calls to assist
States on CD implementation
issues; identify training
needs







Provide feedback
on final draft Tool.

Input State CD data

Organize and
attend various
workshops,
meetings, and
conference calls to
assist States on CD
implementation
issues and identify
training needs




Submit annual CD
implementation reports
and triennial HSNC
reports and data to EPA
regions
Attend various
workshops, meetings,
and conference calls
with EPA to identify
and describe CD
implementation issues
and training needs






Submit CD data to
States, where
required


n/a










Communication with EPA
regarding needs and
concerns


As invited, attend various
workshops, meetings, and
conference calls with States
and EPA and provide input
regarding CD
implementation issues and
training needs. ASDWA
will collaborate with its
membership to ensure
timely information
exchange; share
information and ideas as
appropriate
Appendix B: Major Roles and Responsibilities in Implementation of the Capacity Development Strategic Plan

-------


Activity

EPA


Headquarters
Regions


States


Public Water

Systems


Other Stakeholders

Goal 2
Facilitate open
communication between
EPA and water system
operators










CD implementation
Webcast trainings, tool
and document
development, and grant
program management
and development


Obtain feedback from
operators and owners on
their current training
and assistance needs in
all areas of CD

Organize and/or attend
various workshops.
meetings, and conferences
that will be attended by water
system operators









Develop and conduct CD
implementation Webcast
trainings; develop and
distribute CD tools and
documents; manage grant
programs


Solicit feedback from
operators and owners on
their current training and
assistance needs in all areas
of CD

Organize and/or
attend various
workshops,
meetings, and
conferences that
will be attended by
water system
operators






Provide feedback
on CD
implementation
Webcast training,
tool, and document
development; assist
in grant program
management
Solicit feedback
from operators and
owners on their
current training and
assistance needs in
all areas of CD
Inform water system
operators of various
workshops, meetings,
and conferences that
will be attended by EPA









Attend CD
implementation
Webcast trainings;
utilize CD tools and
documents; utilize grant
programs


Pass on feedback from
operators and owners on
their current training
and assistance needs in
all areas of CD to EPA

Attend various
workshops.
meetings, and
conferences that will
be attended by EPA









Communicate needs
and concerns to other
stakeholders in
support of future
resource allocation
decisions


Provide feedback on
current training and
assistance needs in
all areas of CD


National and State Rural
Water Associations
(NRWA), Rural
Community Assistance
Program (RCAP),
Technical Assistance
Centers (TAC),
Environmental Finance
Centers (EFC) -
Inform/educate water
system operators at various
coordinated or co-
sponsored workshops.
meetings, and conferences.
ASDWA - Provide
feedback on CD
implementation Webcast
training, tool, document
development, and grant
program development


NRWA, RCAP, TAC, EFC
- Pass on feedback from
operators and owners on
their current training and
assistance needs in all areas
of CD to EPA
Appendix B: Major Roles and Responsibilities in Implementation of the Capacity Development Strategic Plan

-------


Activity

Perform compliance
trends analysis to
identify CD needs of
small PWS

Continue working with
the EFC and TAC to
provide assistance in
improving the capacity
of water systems


Continue development
of the Simple Tools for
Effective Performance
(STEP) Guides and
other tools and
documents that provide
TMF CD support to
small systems, as
needed



EPA


Headquarters
Compile compliance data
from SDWIS and perform a
trends analysis


Provide guidance to the EFC
and TAC on assistance needs
of small systems from the
perspective of the national
program; manage grant
program

Identify and develop
additional STEP Guides and
other tools and documents
that provide TMF CD
support to small systems







Regions
Conduct Quality
Assurance review
of SDWIS
compliance data
with the States
Provide guidance
to the EFC and
TAC on assistance
needs of small
systems from the
perspective of the
region
Identify needs for
and provide
feedback to EPA
HQ on the
development of
additional STEP
Guides and other
tools and
documents that
provide TMF CD
support to small
systems


States

Provide compliance data
to EPA



Provide suggested
guidance to the EFC and
TAC on assistance
needs of small systems
from the State
perspective

Identify needs for and
provide feedback to
EPA on the
development of
additional STEP Guides
and other tools and
documents that provide
TMF CD support to
small systems




Public Water

Systems
n/a




Provide suggestions
for recommended
activities guidance to
the EFC and TAC on
assistance needs of
small systems from
the PWS perspective
Provide guidance to
States and EPA on
needs for additional
STEP Guides and
other tools and
documents mat
provide TMF CD
support






Other Stakeholders

n/a




EFC and TAC - Obtain
guidance from EPA, States,
and systems on and
develop products, trainings,
and other resources that
address assistance needs of
small systems
ASDWA, NRWA. RCAP,
TAC, EFC - Identify needs
for and provide feedback to
EPA on the development of
additional STEP Guides
and other tools and
documents that provide
TMF CD support to small
systems



Appendix B: Major Roles and Responsibilities in Implementation of the Capacity Development Strategic Plan

-------


Activity

Provide support for
Rule Implementation by
developing rule-related
information and training
materials such as
guidebooks. Quick
Reference Guides, and
direct and Webcast
training sessions








Continue providing
training courses for
States and water
systems that are
designed to enhance
IMF capacity-
knowledge and
capabilities



Conduct capacity
development training
workshops for EPA,
State, and technical
assistance providers to
address training needs
EPA


Headquarters
Identify' needs for and
develop rule-related
information and training
materials such as
guidebooks, Quick Reference
Guides, and direct and
Webcast training sessions;
conduct direct and Webcast
training sessions








Identify needs to develop and
conduct training courses for
States and water systems mat
are designed to enhance
TMF capacity knowledge
and capabilities





Develop and conduct
capacity development
training workshops for EPA,
State, and technical
assistance providers to
address training needs of
Regions
Identify needs for
and provide
feedback to EPA
HQ on the
development of
rule-related
information and
training materials
such as
guidebooks. Quick
Reference Guides,
and direct and
Webcast training
sessions; assist in
the coordination of
direct and Webcast
training sessions
Identify needs for
and provide
feedback to EPA
HQ on training
courses for States
and water systems
that are designed to
enhance TMF
capacity
knowledge and
capabilities
Attend training
workshops.
Provide feedback
to training provider
to improve
outcome of future


States

Identify needs for and
provide feedback to
EPA on the
development of rule-
related information and
training materials such
as guidebooks, Quick
Reference Guides, and
direct and Webcast
training sessions; assist
in the coordination of
and participate hi direct
and Webcast training
sessions



Participate and provide,
when possible, training
courses. Obtain attendee
feedback to training
provider to improve
outcome of future
training initiatives




Attend training
workshops. Provide
feedback to training
provider to improve
outcome of future


Public Water

Systems
Participate in
classroom and
Webcast training
sessions. Provide
feedback to training
provider to improve
outcome of future
training initiatives









Participate in
training courses.
Provide attendee
feedback to training
provider to improve
outcome of future
training initiatives




n/a







Other Stakeholders

ASDWA, NRWA, RCAP,
TAG, EFC - Identify needs
for and provide feedback to
EPA on the development of
rule-related information
and training materials such
as guidebooks, Quick
Reference Guides, and
direct and Webcast training
sessions







ASDWA, NRWA. RCAP,
TAC. EFC - Identify needs
for and provide feedback to
EPA on training courses
for States and water
systems that are designed
to enhance TMF capacity
knowledge and capabilities



NRWA, RCAP, TAC, EFC
- Attend training
workshops



Appendix B: Major Roles and Responsibilities in Implementation of the Capacity Development Strategic Plan

-------
Activity
of capacity development
program management
personnel
EPA
Headquarters
capacity development
program management
personnel; have EPA HQ
staff attend training
workshops as necessary
Regions
training initiatives
States
training initiatives
Public Water
Systems

Other Stakeholders

Goal3
Promote programmatic
tools and technical
assistance in multiple
program areas
Continue active
participation with all
appropriate stakeholders
Continue to provide
program oversight to
EPA regions and States
for the Operator
Certification Program
Coordinate with EPA
program management staff in
developing and promoting
tools and technical assistance
addressing the goals and
outcomes of various drinking
water programs
Continue active participation
with all appropriate
stakeholders
Continue to provide program
oversight to EPA regions and
States for the Operator
Certification Program
Promote tools and
technical assistance
addressing the
various drinking
water programs
Continue active
participation with
all appropriate
stakeholders
Continue to
provide program
oversight to States
for the Operator
Certification
Program
Promote and utilize
tools and technical
assistance addressing
the various drinking
water programs
Continue active
participation with all
appropriate stakeholders
Manage and implement
State specific Operator
Certification Programs
Utilize tools and
technical assistance
addressing the
various drinking
water programs for
utilities
n/a
Operators are
required to maintain
training for
recertification
requirements
ASDWA - Coordinate with
EPA HQ to develop and
promote tools and technical
assistance addressing the
security of drinking water
utilities
ASDWA, RWAs, RCAP,
TAG, EFC - Promote tools
and technical assistance
addressing the various
drinking water programs
ASDWA - Continue active
participation with all
appropriate stakeholders
RWA, RCAP, TACs. etc.,
to provide training for
operators
Appendix B: Major Roles and Responsibilities in Implementation of the Capacity Development Strategic Plan

-------

Activity

Continue to provide
direct grant program
management oversight
for the Operator
Certification Expense
Reimbursement Grants
(ERG) Program
Provide program
assistance and
information to States
through the promotion
of the Drinking Water
State Revolving Fund
(DWSRF) strategic plan
initiatives


Engage stakeholders
through proactive
dialogue and face-to-
face meetings to
determine how to
effectively promote
long-term sustainability
of systems through
better management full-
cost pricing, water
efficiency and
watershed protection.
EPA

Headquarters
Continue to provide direct
grant program management
oversight for the ERG
Program



Provide program assistance
and information to States
through the promotion of the
DWSRF strategic plan
initiatives





Attend various workshops
and conferences to promote
and distribute various
Sustainable Infrastructure
Initiative training tools







Regions
Continue to
provide direct grant
program
management
oversight for the
ERG Program

Provide program
assistance and
information to
States through the
promotion of the
DWSRF strategic
plan initiatives and
DWSRF Grant
management

Attend various
workshops and
conferences to
promote and
distribute various
Sustainable
Infra structure
Initiative training
tools




States

n/a






Identify specific
DWSRF program
assistance and
information needs.
Manage DWSRF funds
in accordance with work
plans



n/a












Public Water
Systems
n/a






Apply for
loans/grants as
offered through
DWSRF programs.
Request assistance
from State primacy
agencies where
needed in the form of
circuit riders.
training, etc.
n/a












Other Stakeholders

n/a






ASDWA - Identify specific
DWSRF program
assistance and information
needs of States and provide
these to EPA





n/a











Appendix B: Major Roles and Responsibilities in Implementation of the Capacity Development Strategic Plan

-------
Appendix C: Capacity Development Strategic Goals as
Reflected in the PWSS Logic Model
This appendix demonstrates how various capacity development goals support the PWSS
Program Logic Model. It is not intended to provide comprehensive discussion of the
PWSS Program Logic Model. For further information go to
http: //www. epa. gov/safewater/dwa/el ectroni c/emateri al s. html#P W S S.

               Capacity Development Strategic Goals as reflected in
                       the PWSS Program Logic Model
Inputs
1 Activities 1
r^ *7T" ^™-
p™ Stale Program
Funding
FTE
EPM Funds
\ PWSS Grants
r Exponsf
Reimbursement
Grants (ERGs)
SRF Set-asides
SDW1S/SOWIS-
Stata
Reto
jf Toots and
p Guidance
DW Regulations
Partner
Organiza tians
L_ Research
-^ 	 _ 	 1
At.
• Oufreacft and 1
^1 Education 1 	
| fGo«(s2.3; |
O 	 	 -I
* Technical
1 assfsfa/ice 1
{ (Goal!) 1
?~ ~ ~|
— K Training 	
| fGoa/s Z,3> I
1 EPA and primacy 1
—^ agency \
1 administration
and evaluation of 1
(primacy programs *
and authorities •
,
__W " ~S. "
^ Sanitary surveys (Goats 1,3) •
A6.
	 Enforcement and Compliance I 	
'f Assistance (Goal 3)
	 I Monitoring for compliance.
^"l special sampling and
/ y^_ jwsessmen ^^ j
	 J AS.
Engineering Review of Plans I —
I and Specifications (Goal 1) \
r— 7
V A,. 1
	 >J Licensing and Certification 	
• (Goal 3)
J " "AID. ~
Dala Management
| Outputs | an
f 	 57. 	
information about
drinking water
	 ' quality, regulatory i 	 i — *>
programs, expertise
AvaltabJe
Q fGoa/5 % 3)

O2.
PIVS trained and
assisted in building
managerial and *~~> *~~*
financial capacity
-** fGoa>2>

.-.,----.-.--
03.
~^ PWS (railed and , .
assfsfed /n technical ' — * — >
capacity building
(Goal 2)
O- 	 ^7
CM
— ^* Prirnacy agency « 	 ^
Informed of actions
needed 10 maintain
adequate auihcrittes (40
CFR I42subpane)


O5.
i Primacy agency informs PWS
	 |f of noncompliance. or of
\ potential for nonctxnpliance
±
r a*-
	 ^ Ptimacy agency notiTes PWS
J of formal enforcement
response

07
1 — ^* Infrastiucturo projects meat
Jvwrfjjstry sfanderds (Goa' t>
V—
J f 	 oV 	
	 ^ PWS operators rece/ve State

I 09,
	 ^» Certified laboratories implement
! approved analytical methods
«. 	

010.
— ^{ Drinking waler data system
• capable of accepting compliance
;::;:::;5;::::::;
Oil.
Primacy agency implements
reporting and recordkeeping
system
ort and Medium-Term
Outcomes
[Long-term Outcomes
	 _ 	 ,
( 	 ^T
'• Consumefs served by PWS 1 ildMlton In
• instance of safe dnnklng 1 l^SS™
1 walBflooubltaheallh fl "' '•*' !

! 	 i 	 1
' PWS improves knowledge •
! of managerial and \ 	
* financial capacity building .
(Goal 2)

!" S3. j
| PWS improve knowledge .
of PWSS program | 	
i requirements (Includes .
technical capacity) i
| {Goa/ 2J

.
: S4. i
•« Primacy agency
' maintains adequate N 	 '
1 program capacity
' (Goals 1,2,3) I


•~ sr " !
J PIVS roma/ns in 1
|comp/iance, or rafcesl
J corrective action to | — '
'return to compliance.
-^j ivrf/;, ruJe |
' requirements
j (includes WR and i
PW;
	 j fGoa/z; i^
1
h j^
i-U: .
Hi.
PWS maintains 1
' financial ami •
•--"
/
XpwssN
1 Feedback I
V Loop J

\
L2. Human health
protected via safe
water from PWS
(Goals 1,2,3)

'managerial capacity'
' to provide safe 1
	 1 1 drinking water
' (Goals 2. 1)
	 Designed by EPA Logic Model
Work Group
                         S  /       (Jssaf
                             /        P-
Appendix C: Capacity Development Strategic Goals as Reflected in the PWSS Logic Model

-------
                                              D:
                          INPUTS
               Program Distribution
                       EPA Headquarters and
                       Regional Program
                       Oversight per §1420
                       Numerous State
                       Implemented CD
                       Program Strategies
                       Federal funding
                       identified as PWS
                       assistance grants
               Assigned staff
                       EPA Headquarters &
                       Regional Staff
                       State Primacy Agencies
                       Utilizing DWSRF Funds
                       EPA Grantees


               Legislative Intent
                       To enhance and ensure
                       technical, managerial,
                       and financial capacity of
                       public drinking water
                       systems.
                                                       ACTIVITIES (Process)
                                                         EPA HQ & Regions
        Conduct oversight activities
        of National CD Program
        implementation
        To provide information,
        training, and technical
        assistance when needed to
        all stakeholder parties
        Integration of CD with
        Grant Environmental
        Results
                                                         Communicating regularly
                                                         with Stakeholders
        Improving leveraging and
        coordination of Federal,
        State, and local agencies'
        financial resources
State Programs
        Implement individual State
        Strategies through local
        Legislative authority in
        support of Congressional
        Intent
                                                         Provide information,
                                                         training, and technical
                                                         assistance opportunities for
                                                         PWS
                                                 EPA Grantees:
                                                         Providing information,
                                                         training, and technical
                                                         assistance in the areas of
                                                         technical, managerial, and
                                                         financial capacity of PWS
                                                                                                   OUTPUT
                                                                                               State Capacity
                                                                                               Development Programs
                                                                                               assessed
                                                                                               New water systems
                                                                                               assessed for capacity
Existing water systems
assessed for capacity
PWS receiving technical
assistance
                                              Identify States Use of CD
                                              related DWSRF Set-
                                              Asides
                                                                                               Provide effective guidance
                                                                                               on new and current SDWA
                                                                                               rule implementation issues
                                                                                                                              SHORT TERM OUTCOMES
                                                                                  Maintain a proactive
                                                                                  working relationship with
                                                                                  State co-regulators
                                    Reduction of new
                                    systems with inadequate
                                    capacity
                                                                                                                                   Reduced number of
                                                                                                                                   Historical Significant
                                                                                                                                   Non-compliers(HSNC)
                                                                                                                                                                    LONG TERM OUTCOMES
                                                                         Fewer systems with long-
                                                                         term health based
                                                                         violations
Better targeting of
resources because
systems have increased
capacity
Appendix D: National Capacity Development Strategic Plan Summary Chart

-------
References
General Accounting Office Report No. GAO/T-RCED-00-298, Drinking Water Spending
Constraints Could Affect States' Ability to Meet Increasing Program Requirements.
September 19, 2000. Available online at http://www.gao.gov/archive/2000/rc00298t.pdf

General Accounting Office Report No. GAO/RCED-99-31, Safe Drinking Water Act:
Progress and Future Challenges in Implementing the 1996 Amendments. January 14,
1999. Available online at http://www.gao.gOv/archive/l999/rc99031 .pdf

National Academy of Public Administration. Strategic Plan. Spring 2005.  Available
online at http://www.napawash.org/about_academy/StrategicPlan2005.pdf

Office of Management and Budget. Program Assessment Rating Tool (PART):
Assessment of Federal Programs. Available online at
http://www.whitehouse.gov/omb/expectmore/perform.html

U.S. Environmental Protection Agency. 2000 Community Water System Survey.
December 2002. Available online at http://www.epa.gov/safewater/cwssvr.html

U.S. Environmental Protection Agency. Draft 2006-2011 EPA Strategic Plan
Architecture, Public Review Draft. February 14,  2006. Available online at
http://www.epa.gov/ocfo/plan/06draftarch.pdf

U.S. Environmental Protection Agency. National Water Program Strategic Plan and
Guidance, 2003 - 2008. Available online at http://www.epa.gov/water/waterplan.

U.S. Environmental Protection Agency. Strategic Plan, 2003 - 2008. September 30,
2003. Available online at http://www.epa.gov/ocfo/plan/2003sp.pdf.

U.S. Environmental Protection Agency, Office of Inspector General. Impact of EPA and
State Drinking Water Capacity Development Efforts Uncertain. September 30,  2003.
Report No. 2003-P-00018. Available online at
http://www.epa.gov/oig/repoils/2003/2003-p-00018-20030930.pdf
References

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