Compliance Planning
                       for Small Systems
                                        1*
                   Sponsored by:
          U.S. Environmental Protection Agency
        Office of Ground Water and Drinking Water
            Drinking Water Protection Division
              Drinking Water Utilities Team
                   Washington, DC
In cooperation with:
Association of State Drinking Water Administrators
American Consulting Engineers Council
American Water Works Association
National Association of Regulatory Utility Commissioners
U.S. Dept. of Agriculture - RUS
National Association of Water Companies
National Drinking Water Clearinghouse
National Rural Water Association
Rural Community Assistance Program

-------
                         Opening Remarks
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 Workshop Format
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Agenda

Presentations
   •  Internal assessment


   •  External assessment


   •  Identifying options & determining optimum solutions


Facilitated  Questions and Answers

-------
  Introductions
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         Mr. Peter Shanaghan
         Dr. Ralph Jones
         Mr. Dan Fraser
         Mr. Fred Pontius
         Mr. Ian Kline
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         - 1-800-426-4791
         - email: hotline-sdwa@epamaii.epa.gov
         Web Page
         - http://www.epa.gov
         - http://www.epa.gov/safewater/
         Documents (e.g.)
         - Strategic SDWA Compliance Planning: A
           Comprehensive Handbook
         - Guidance and Information Documents

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Water System Strategic Planning
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 The Planning Imperative:  Need to
 Rehabilitate or Replace Basic Infrastructure
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    •  Public Water Systems (PWSs)

       - Serve:
         • 15 connections or 25 people per
           day at least 60 days per year
       - There are currently 172,000
         PWSs
         • Community Water Systems
           (CWSs)
         • Non-Community Water Systems
            - Non-Transient, Non-Community
              Water Systems (NTNCWSs)
            - Transient, Non-Community Water
              Systems (TNCWSs)

      85% of US Households Are
      Served by PWSs
TNCWS
 97,000
  CWSs:
  Size Distribution by Population Served
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 Ownership Profile of CWSs by Population
 Size Category Served
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                          D Surface Water

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         25-500  501-   1001-  3301-
               1000   3300   10k
                    10k+

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  The Planning Imperative: Drinking Water
  Utilities Are Facing Unprecedented and
  Increasing Competitive Pressure
                           CHANGING
                         \VATER UTILITY
  The Planning Imperative:  Emphasis on
  Source Water Protection & Difficulty in
  Developing New Supplies
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  The Planning Imperative: SDWA
  Compliance
  •00     •«!    '02    -03     -04    'OS    -06

       IESWTR    _.
     Stage 1 DBPR
             Radon
          Filter Backwash Rule
             LT1ESWTR
           Radionuclides
              Arsenic
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                       LT2ESWTR
                       Stage 2 DBPR
                                         •07
   Period during
   which systems
 achieve compliance
     with rule
  Additional period
which State may grant
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  through capital
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  The Planning  Imperative: Public
  Expectations Have Never Been  Higher
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  The Customer Expects
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Service at Lowest Reasonable Cost
Aesthetic Quality
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  To Produce Fundamental Decisions and
  Actions

  That Shape and Guide
   - What an organization is
   - What it does
   - Why it does it

  With a Focus on the Future.
                                                 12

-------
  Focus of Strategic Planning
          PRESENT
                          FUTURE  9
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                 external pressures, and internal
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               • Evaluate and revise strategic
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                        -Governance
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    Generalized Water System Strategic
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                    Governance
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         Technical. Financial, ana Managerial Capacity     11
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                     Social, Political, & Economic Environment
                                                 SDWA
                                               OBJECTIVE:
                                               Public Health
                                                Protection
                                        External
                                      Assessment
                                         Internal
                                        Assessment
                                                          16
                                                                         8

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System "Capacity"
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   - Challenges
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     • Competition
     • Source quality &
       availability
   - Opportunities
     • Partnerships
     • Source protection
     • Resources
     • Public awareness

-------
A Utility's Service Horizon
Strategic Planning in the 21st Century
Role
Governance
Management
Operations

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Water I Distribution
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 Governance,

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  Implement & Evaluate


                Strategic Management


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Planning Imperatives

Consumer Expectations

What is the Focus of Strategic Planning?

Strategic Planning Framework

 - Assess internal and external capacity

 - Define the "service horizon"

 - Implement the strategic plan
                                                  22
                                                                11

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     •  Not All Needs Are Obvious
     •  An Assessment Must Be Made
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       - Treatment
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        Water Use Records
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Corrosion History
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Emergency Storage

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                                                           18

-------
  Storage Capacity (Hydropneumatic)
         Frequency of Pump
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         Auxiliary Power
         Pumping Rate vs.
         Treatment Capacity
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       •  Meter Reading Equipment
       •  Billing and Revenue Collection
       •  Hardware and Software
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 The Cost of Inadequate Planning
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Poor or Variable Water
Quality
Regulatory Violations
Periodic or Chronic
Water Shortages
Loss of Revenue Due
to Inaccurate Meters or
Leaks
                                                     23
                                                                   121

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             Technical, Managerial, and
                     Financial Capacity
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                     'Management —
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 Technical Capacity
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  Managerial Capacity
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Dimensions Of Capacity Are Distinct But
Interrelated
             \   PLANNING

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Assessment of Internal Capacity
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Elements of Capacity
Source Water Adequacy
Strengths

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External Linkages ;
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Controls


Weaknesses

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Examples Of Capacity Assessment Tools
     • NRWA Self-
       Assessments
     • State Self-Assessments
       {e.g., CA, PA, IA)
     • The "Dozen Questions"
       (AWWA)
     • Financial Viability
       Assessments
       Developed by PUCs
     • Sanitary Surveys
     • Permit Application Data
     • Criteria  Used by
       Lenders

-------

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          Radon    Revisions

                  Stage 2 D/DBP


                      CCR   CCL


  Stage 1 D/DBP         LT IESWTR

 IESWTR      ^       ,

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Phase II       $<^   V°Cs

  NIPDWRs     Fluoride   phase V

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  Existing Rules Reduce Risk
            Microbial Risk
            SW     GW
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MCLG = zero
Feasible Level = 3 ug/L
Proposed MCL = 5 ug/L
- Comments requested at 3, 10, and 20 ug/L
- Proposed MCL was adjusted upward to where
  the cost is justified by the benefits
Best Available Technology
Compliance Monitoring and  Reporting

-------
  Proposed Arsenic Rule - System Impacts
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                           16,981  ,'0<5ug/l

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Proposed November 2, 1999

Final Rule Expected Fall 2000

Goal
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  drinking water

Applies to All Community Water Systems
Using Ground Water or Mixed Ground
Water and Surface Water

-------
  Radon Proposed  Requirements
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    MCLG = Zero
    MCL = 300 pCi/1
     - Alternative MCL (AMCL)
       = 4,000 pCi/1
    MMM Program
    Assistance Document
    to Be Provided With
    Final Rule
    BAT, Compliance
    Monitoring, Reporting
     Option 1
      - State Develops
        Multimedia Mitigation
        (MMM) Program for
        indoor Radon (to
        Achieve •$ Risk
        Reduction)
      Option 2
      - No State MMM Program
4000
       pCi/L
300 pCi/L that
                                      chose to mitigate
                                15,930
Systems with all sources  '
    <300 pCi/L
Systems with 1 or more sources >300 pCi/L !
   that panicipate in a MMM program   i

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GWR Proposed Requirements


      •  Sanitary Surveys by State to Identify
        Significant Deficiencies
      •  Corrective Actions
      •  Compliance Monitoring for Systems That
        Disinfect
      •  For Systems That Do Not Disinfect
        - Hydrogeologic sensitivity assessments
        - Source water monitoring from sensitive aquifers
          or by systems that have detected fecal
          indicators in the distribution system
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          157,000  157,000
                               108,000
           PWSs
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Monitoring
Compliance
Monitoring
 Routine
Monitoring
                                                    20,000
Actions

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  Filter Backwash Recycling Rule (FBRR)
Incorporated in Proposed
LT1ESWTR/FBRR
Goal
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  recycling on surface water plants
Applies to all Surface Water and GWUDI
Systems
  FBRR Proposed Requirements
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FBRR Anticipated  Requirements
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     1,600 -
     1,400 -i
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       200
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                                                      1,899
           Systems Subject
            to Direct Recyle
           Self Assessment
               Report
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                       to Direct Filtration to Modify Recylce    the FBRR
                         Reporting    Return Location
Identify Potential Compliance Actions
RULE
MONITORING
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:SWTR
Phase 1/2/5
. Lead & Copper
IESWTR
LTIESWTR
FBRR
; LT2ESWTR
GWR
Stage 1 DBPR
Stage 2 DBPR
Radon
Radionuclides
Arsenic
X
X
X
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X
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X
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X
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OCR
PN
EXISTING
TREATMENT
PROCESS
OPTIMIZATION OR
ENHANCEMENT

NEW TREATMENT
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INSTALLATION

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MANAGEMENT
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  Plan Strategically
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               Small System Treatment
                 Technology Selection
    Does the System Really Want to Be in the

          Water Treatment Business?

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 Alternatives to Treatment


      •  Improve Source Water Protection
      •  Improve System Operation and
        Maintenance (0 & M)
      •  Switch to Higher Quality Source
      •  Purchase Water
      •  Consolidate
                      o
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      Go Forward with Treatment Selection if
     No Practical and Economically Attractive
     Alternatives to Treatment of a Current or
            New Water Source Exist

-------
  Factors Influencing  Treatment Selection


        •  System Characteristics
        •  Impact of Upcoming Rules
        •  Characteristics of Proposed Treatment(s)
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  •00     '01     '02    '03     '04    '05    '06

       lESWTR    _.
                                          •07
                                                •08
                                                     •09
     Stage 1 DBPR
             Radon
      t Filter Backwash Recycling Rulg

        _     LT1ESWTR
            Radionuclides
             Arsenic
              GWR
                       LT2ESWTR

                       Stage 2 DBPR
 Period during which
  systems achieve
 compliance with rule
Additional period which
 State may grant an
 individual system to
 achieve compliance
  through capital
  improvements

-------
  Characteristics of Proposed Treatment(s)
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Costs (Capital, O&M, Waste Disposal)
Complexity and Flexibility
Environmental Compatibility
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  Case Study
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System Characteristics
 - CWS, surface water,
   serves 2,500
 - Conventional filtration
   with chlorine
   disinfection
 - Raw TOC averages 3.2
   mg/l
 - Alkalinity averages 95
   mg/l
• Compliance Concerns
   - TTHMS average 0.085
     mg/l
   - Treated TOC averages
     2.3 mg/l
   - Turbidity is not less than
     0.3NTU95%ofthe
     time
   - Turbidity excursions on
     individual filters
• Observations
   - Must reduce finished
     water TOC
   - Address turbidity

-------
 Treatment Options Analysis -
 Case Study
                       Chlorine,
                     Coagulant Aid,
                       Poiymer
   Water
 Source(s)
Mixing, Flocculation
  Sedimentation
                                       PH
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                                 Final
                              Disinfectant
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 Case Study
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                    Coagulant Aid,
                      Polymer
  Water
 Source(s)
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                                       PH
                                    adjustment
  Final
Disinfectant
           Distribution
            System
                                                              10

-------
Treatment Options Analysis -
Case Study
  Water
 Source(s)
  Chlorine.
Coagulant Aid,
  Polymer

   Mixing,
 Flocculation,
Sedimentation
                                               Final
                                       ph    Disinfectant
                                    adjustment
                    Distribution
                      System
                                                              11
Treatment Options Analysis -
Case Study
 Water
Source(s)
  Chlorine,
Coagulant Aid,
  Polymer

  Mixing,
 Flocculation,
Sedimentation
adjustment

Filter
                                               Rna!
                                             Disinfectant
Distribution
 System
                                                              12

-------
 Treatment Options Analysis -
 Case Study
 Water
Source(s)
  Chlorine,
Coagulant Aid,
  Polymer
     I
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   Mixing,
 Flocculation,
 Sedimentation
                                                Final
                                       p"    Disinfectant
                                    adjustment
Distribution
 System
                                                              13
 Treatment Options Analysis -
 Case  Study
                      Chlorine,
                    Coagulant Aid,
                      Polymer
                                               Final
                                       pM     Disinfectant
                                    adjustment
                                                        Distribution
                                                         System
     ym

     T
  Mixing,
 Flocculation.
Sedimentation
                                                              14

-------
  Treatment Options Analysis -
  Case Study
                     Chlorine,
                    Coagulant Aid,
                     Polymer
                                            Final
                                          Disinfectant
                                                   Distribution
                                                    System
                     I
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                  Flocculation,
                 Sedimentation
                                                         15


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Conventional Treatment

      •  Pros:
         - Removal
           capabilities
         -Ability to treat
           source waters of
           low or inconsistent
           quality
      •  Cons:
         - Advanced operator
         - Adequate land
         - High costs
         - Sludge disposal
                                                         16
                                                                        8

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Membrane Filtration

     •  RO, NF, UF, MF
     •  Pros:
        - Removal capabilities
        - Size and flexibility
        - Intermediate operator
     •  Cons:
        - Water rejection
          (RO & NF)
        - Pre-treatments
        - Waste disposal
          (RO & NF)
        - High costs
                                                       17
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        - High removal rates
        - Low cost
        - Intermediate
          operator
       Cons:
        - Co-contaminants
        - Brine disposal
                                                       18

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  Disinfection
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                             I.  Type
                              - Chemical
                                 • Chlorine
                                    » Chloramines
                                 • Chlorine Dioxide
                                 • Ozone
                              - Non-chemical
                                 • uv
                                 • Membranes
                             II.  Purpose
                              - Primary
                              - Secondary
                                                             19
  Chemical Disinfection
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Pros:
 - Compliance with GW and
   TC rules
 - Low cost (chlorine,
   chloramines)
 - Oxidation
Cons:
 - DBF formation (especially
   chlorine, chlorine dioxide)
 - Additional disinfectant
   (ozone, chioramines)
 - Handling dangerous
   chemicals
                                                             20

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  Ultraviolet Light Disinfection
• Pros:
   - No THM precursors
   - Easy & safe operation
   - Generally low cost
• Cons:
   - No residual disinfectant
   - Not appropriate for
     waters high in TSS or
     turbidity
   - High doses required for
     cyst inactivation will
     increase costs
                                                         21
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    Pros:
    - Effective removal of SOCs, VOCs, Radon
    - Improved aesthetic quality
    - Relatively low cost
    Cons:
    - Co-contaminants may interfere with adsorption
      of selected  contaminants
    - GAC must be replaced periodically
                                                         22
                                                                        11

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      • Pros:
         - Generally more cost
           effective for very
           small systems
      • Cons:
i
         - Significant
           maintenance,
           oversight, and
           customer education
           required
         - Not approved for
           microbial removal
                                                       23
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        Pros:
        - Generally more cost
          effective for very
          small systems
        Cons:
        - Significant
          maintenance,
          oversight, and
          customer education
          required
        — Some states may
          restrict disposal
          options for certain
          devices
                                                       24

-------
                     External Challenges:
                             Other Issues
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                        Source Water Supply

               Achieving Competitive Efficiency
 New Source Development




       • Surface Sources

         - Many environmental, regulatory, and social
           barriers

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         - Aquifers are limited and may be overdrawn
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 Where Do Residential Customers Use
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  Indoor Leaks
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         Conservation Potential
          - 10% of homes responsible for 58% of leaks
          - AWWA estimates households can reduce daily
            per capita water use by about 30% by installing
            more efficient water fixtures and regularly
            checking for leaks.
  Distribution System Leak Detection
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         Leak Detection and
         Repair Saves Water
         and Expenditures Over
         the Long Run
         Water Accounting Is
         the First Step
         If >10% Unaccounted-
         for Water, Leak
         Detection Is
         Recommended
         Investment Pays off
         Over Time to Repair
         Leaks

-------
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Foreign Companies
- British (Thames)
- French (Vivendi)
Energy Companies (subsidiaries)
Converged Utilities
Non-utilities -- Vendors

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 The Public Sector Responds
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        Re-engineering
        Improved Efficiency
        "Publicization"
 implications for Small Systems




      • Performance Expectations for Industry as a

        Whole Will Rise

      • Shift in Focus to Water Supply as a

        Business (Especially Efficiency)

      • More Opportunities for Partnerships
CA

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  Assessing System Partnership Potential
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                 Source Water
                                 - Governance-

                                 Management-

                                 - Operations-
                             Treatment
                                       Storage &
                                       Distribution
                                                   Retail Services
          Offer
       Acquire
 Alternative Spatial Boundaries
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  Distance to the Next Closest CWS
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86% of Small Systems

Are within 5 Miles of

Another System



Nearly 100% of Small

Systems Are within 20

Miles of Another

System
                    Weighted Average of 17 States
  Potential Partnerships Based on Distance
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 Potential Partnerships Based on
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Public - Local Government
Public - Special Purpose District
Private - For Profit
Private - Not-for-Profit

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assessing Organizational Structures

System
1
System
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Current Strengths Weaknesses Interest in
Organizational Partnering
Structure ,
;
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System
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9
CASE STUDY
Kitsap Public Utility District, WA
                   •KPUD is a municipal corporation
                      •Elected board
                      •Incorporated boundaries = county
                      •Formed in 1940's
                         •Assumed operation of several systems
                         in 1970's
                   •Serves:
                      •55 systems (1/2 are Group B)
                      •30,000 people
                      •8,000 service connections
                                                    10

-------
Kitsap Public Utility District, WA
Services Offered
 •UTILITY OPERATIONS
     •Satellite management
        KPUD         System Owner
      Operations         Financing
  Preventive Maintenance    Rate Setting
 Water Quality Monitoring   Legal Liability
  Emergency Response
     Record keeping

    •Direct ownership
        •Physical interconnection
        •Satellite operation
•CONTRACT & DATA SERVICES
   •Wholesale supply
   •Planning
   •Management & monitoring
   •Information services & TA
 •SUPPORT ASSISTANCE
    •Bulk purchase
    •Training
    •Source protection &
    resource studies
    •Public education
                                                                11
Kitsap Public U
RATES


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Itility District, WA
•Consolidated (Postage Stamp) rates
•All systems owned by KPUD pay the same
rate
•Customer charges
•$14/month Basic Service Charge (Fixed
Costs)
•Increasing block rate (Commodity Charges
cover Marginal Costs)
•S0.75-$1.05/100ft3









•Assessment for newly acquired systems
•If needed
•S2,000-$5,000 / connection
•Payable over 20 years

< 12

-------
  CASE STUDY
  Hansvilie Water District, WA
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  CASE STUDY
  Central Iowa Water Association
                •Serves 8,400 customers; 2.4 MGD
                •Water purchased from Newton,
                Marshalltown, and Pella Water Works
                •Provides service to 12 counties
                   •Plans to expand to serve 6 more
                •Provides direct retail service in 5
                incorporated towns & 11 unincorporated
                communities
                •18 towns purchase bulk water
                •7 towns have emergency connections
                •CIWA provides contract operation for 1
                town's water and wastewater system
                                                      15
  CASE STUDY
  Sully, IA
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City of Sully
•Provides water to 841 people
•Concerns about condition and adequacy of:
   •Treatment
   •Storage
   •Distribution
•In 1997 city commissioned consulting
engineer to prepare study of water system
facilities
                                                      16
                                                                    8

-------
                 City of Sully.  1A - Facilities Condition
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•1 well
•2,300 ft deep
•110 gpm
•Average demand 58
gpm
•Semi-annual inspection
and preventive
maintenance program
•No backup well
•Emergency connection
with CIWA
                          Treatment
•Iron & Manganese
removal
  •Iron filters
  •Capacity 120 gpm
•RO Membrane
Filtration for radium
removal & softening
  •Capacity 110 gpm
  •Actual yield 80 gpm
  •Operating 20-22
  hours/day
•Chlori nation
                                           Storage &
                                           Distribution
                                                                  Retail Services
                                          •Elevated tower
                                          •30,000 gal
                                          •IDNR recommends
                                          75,000 gal for 1,000
                                          people
                                             •Emergency
                                             connection with
                                             CIWA
                                          •Water loss 26%
                                          •Low fire flows -
                                          mains need looping
•840 people in 1996
•Expected to
increase to 1,000
people within a few
years
  Major  Issues and  Options for City of
  Sully,  IA
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Adequate Water Supply and Storage
Capacity
•Need backup supply and additional storage
    •Options:
        •Renew emergency contract with
        C!WA (CIWA serving other
        permanent demands)
        •Upgrade supply and storage
             •New well
             •New elevated tank
        •Full-Service connection with CIWA
 Distribution System Improvement
 •Connect dead-end mains to improve water
 quality
 •Loop mains to improve fire flow.
                                                 Upgrading Water Treatment System
                                             •Replace and upgrade iron filters, and
                                             •Provide higher capacity radium removal
                                                  •Add additional RO unit, or
                                                  •Install lime softening, or
                                                  •Install ion exchange
                                             •OR, Full-service connection with CIWA
                                                                                18

-------
Assessing External Opportunities

c_
^<"
\ - Scenarios Evaluated
EMERGENCY CONNECTION
UPGRADE SUPPLY
REPLACE IRON FILTERS
RO
* Replace
* Upgrade
UPGRADE STORAGE


X ; X j
: !
X X
x ; x
X
X
X
FULL-SERVICE BULK CONNECTION WITH CIWA



X
X
X
X |




$119,230-




i
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19
Sully,  IA - Option Selected
                            •Full-service bulk connection
                            partnership with CIWA

                               •Suily focuses on distribution
                               and retail services

                               •CIWA offers economies of
                               scale

                               •Sully gets out of treatment
                               business - avoids future costs

                               •Sully avoids costs associated
                               with further developing its own
                               water supply
                                                          20
                                                                         10

-------
 CASE STUDY
 Aurora, SD
                             Population 600
                             System
                             - Installed 1972
                             - One 150 gpm Well
                             - Disinfection & Fluoridation
                             - One 50,000 gal elevated tower
                             - Flow: Average 100 gpcd; Max 150 gpcd
                             issues
                             - Nitrate contamination
                             - Hiring Certified Operator
                             - 20%-30% Unaccounted for water
                                                       21
 Aurora, SD - Alternatives Considered
        New Well Field & Treatment Owned by City
      New Well Field & Treatment Jointly Owned by
         City and Big Sioux Rural Water System
•
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     Interconnect With & Purchase
     Water Wholesale From City of
    	 Brookinqs	
   Interconnect With & Purchase Water
Wholesale From the Brookings-Deuel Rural
             Water System
                                                       22
                                                                      11

-------
 Aurora, SD
 Capacity Perspective on Alternatives
O)
                     New Well &  i New Well St. . Interconnect & • Interconnect &
          Treatment - '•  Treatment -
          City Owned  Jointly Owned
           I Nitrate
           : Compliance
i
'
                                       Wholesale
                                       Purchase-
                                       Brooktngs
           . Certified
           j Operator
           Access !o
           i Technical &
           Managerial
           Assistance
$71000 gal     4.67     3.75
                                        3.21
                        Wholesale
                        Pure base -
                        Brookings-
                         Deucl
Control of i i
Rates ' '
Liability for
Future ~ ""
Treatment
!
+ ; +
                         3.30
               + = Advantage    - = Disadvantage
                                                              23
 CASE STUDY
 Cohasset, MA
                             •  System serves 7,000 people.
                             •  3 MOD SW Treatment Plant.
                             •  Board of Water Commissioners
                                - Part-time, volunteers
                                - Were focused on managing day-
                                  to-day system operations
                                - Could not find replacement for
                                  water system superintendent
                                - Wanted to focus energy on
                                  planning; not on daily oversight
                                                              24
                                                                              12

-------
  Cohasset, MA
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Board decided to contract out system operation.

First 3-Year contract to a joint venture.

Second 3-Year contract with American Water Services, Inc.

 - Full-Service management, operation, & maintenance

   contract.


      AWS Responsibilities      Town Responsibilities

       Treatment Facilities     Capita| |mprovement Decisions
      Distribution Facilities

    Cross Connection Program           Funding

         Meter Reading        Construction Contracting
         Meter Repair &

         Replacement

       Customer Services

      Accounting & Reporting

     Personnel Administration
                                                           25
  Benefits of Privatization - Cohasset,  MA
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Board Now Focuses On Long-Range

Planning.

Board Developed Comprehensive Capital

Improvement Plan.

 - Water Main Improvements

 - Treatment System Upgrades

 - SCADA System Installed

 - New Storage Tank Constructed

Rates Have Not Increased.
                                                          26
                                                                          13

-------

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External Opportunities:
          Other Issues
  Protecting Source Water

      Financial Resources

        Public Awareness
  Source Water Protection



       •  Prevent Future Contamination

       •  Reduce Current Contamination
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  Elements of a Local Source Water
  Protection Program
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       1) Assess Source
       2) Assemble Project Team
       3) Choose Management Tools
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  2) Assemble Local Project Team
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Assemble Committed
Team to Guide
Process
Bring Together
Appropriate
Stakeholders
Recruit Volunteers
Establish Partnerships
 -  Local authorities
 -  Citizen groups
 -  Neighboring
   communities
 -  State regulators
 -  Federal land
   management agencies
 -  Businesses
  3) Regulatory Management Tools
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Zoning Ordinances
(Prohibition of Various
Uses, or Permit
Conditions)
Performance
Standards
Health Regulations
(Septic Systems, Floor
Drains)
"55

-------
CO
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(A
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      • Public Education

      • Citizen Involvement

      • Best Management Practices (BMPs)

      • Land Acquisition and Protection

      • Water Conservation
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Assessing External Opportunities
g >
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ilications
Option
1
Financing
Cost Source

2
N



Rates

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 Water Rates




   • Rates=f(cost,cost allocation, rate design...)



   • Cost=f(system organization, roles, technology...)
i
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     Choosing Economically Efficient Solutions Will

     Lead to Lower Rates

-------
  Water System Cost Allocation and Rate
  Design
         Fixed Charge -Capital
         Variable Charge - O&M
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  Sustainable Pricing
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Sustainable
Water Rate
  ($/unit)
   Low enough to be
affordable for customers
so that the system can be
  supported over time
     High enough to cover the cost
      of service and send efficient
         price signals to guide
       consumption and product
              decisions
      " Adapted from EPA, Sustainable Pricing.- A Long Term Capacity Development Strategy

-------
  Single-Tariff Pricing
         Stand Alone Pricing
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  Major Funding Sources for Small
  Systems
        Grants
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EPA Drinking Water
State Revolving Fund
(DWSRF) principal
forgiveness
HUD Community
Development Block
Grant (CDBG) Program
USDA Rural Utilities
Service (RUS) Water
and Waste Disposal
Program
Loans
 - DWSRF
 - CoBank Rural Utility
   Banking Group
 - State Programs
 - Private Capital Markets
 - USDA Rural Utilities
   Service (RUS) Water
   and Waste Disposal
   Program

-------
  New Hampshire Case Study
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                        Forgiven
                        Principal
                         6%
Town of Bristol

2,860 Served

Disadvantaged
Project to Install New
Secondary Well

Estimated Cost:
$358,000
Total Funding:
$358,000
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                         Public Awareness
             Your Customers... Friends or Foes?

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 Interactions with the Public




      • Public Relations

      • Public Education

      • Public Involvement
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 As Part of Your Strategic Plan...
        What Specific Actions Will You Take to

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  Strategic, Functional Water System
  Model
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                        Governance

                        Management
                        Operations  —
         Technical, Financial, and Managerial Capacity
 Assessing Interactions with the Public
          Utility      Steps to Build and Maintain Public
     I   Function    j             Support

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     i Storage &
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     Retail Services
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  Annual Household Expenditures for
  Utilities
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              Fuel oil & gas   Telephone
    Source: U.S. Bureau of Labor Statistics, Consumer Expenditures in 1995
  Summary
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Getting the Public Involved can:
 - Increase public understanding of true cost and
   value of water
 - Increase customer willingness to pay and to act
 - Increase public support for changes in
   infrastructure and administration
 - Enhance water service through public
   involvement in decision-making, source water
   protection
                                                                           11

-------

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         Identifying Options & Determining
                      Optimum Solutions
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Assess
 - Internal - strengths &
   weaknesses
    • Existing infrastructure
    • Technical, financial, &
     managerial capacity
 - External challenges
    • New regulations
    • Treatment for compliance
    • Source water supply
    • Competition
 - External opportunities
    • Partnerships
    • Source water protection
    • Financial resources
    • Public awareness
                                     Define
                                     Identify
                                     Analyze
                                     Implement
                                     Evaluate
  Simplified 6-Step Framework
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to
                           Assess
                           Define
                           - Service Horizon
                           Identify
                           Analyze
                           Implement
                           Evaluate
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1 ;
SOURCE ! STORAGE & j RETAIL
WATER I1 TREATMENT DISTRIBUTION jj SERVICES ;
5
Options and Solutions 1
1 rn 1
ervice Horizon Matrix

SOURCE
TREATMENT
STORAGE &
DISTRIBUTION
RETAIL SERVICES
GOVERNANCE




MANAGEMENT




OPERATIONS





6

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  Defining the Service Horizon
    Framework for Filling in the Cells of the Service Horizon
                          Matrix

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                    DON'T WANT TO DO IT
  Simplified 6-Step Framework
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Assess
Define
Identify
 - Options for
  Fulfilling
  Desired Service
  Horizon
Analyze
Implement
Evaluate
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 What Will It Take To Fulfill The Desired
 Service Horizon?	
                     Governance
                     Management
                     Operations
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 Technical, Financial, and Managerial Capacity
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                         Assess
                         Define
                         Identify
                         Analyze
                          - Identify
                            "Optimum"
                            Solution
                         Implement
                         Evaluate
                                                 10

-------
  Identify & Analyze Options
                      "Optimum"
                       Solution
         Source,
     Infrastructure &
       Technology
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                              Operations
       OPTIONS FOR FULFILLING DESIRED
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  • Least Cost
  • Political Acceptability
  • Best Service
  • Water Quality
  • Economic Growth

Each System Is Unique - One Criterion Does
    Not Fit All - Key Is To Ensure A Full
 Understanding Of Tradeoffs & An Informed
                 Decision
                                           12

-------
 Simplified 6-Step Framework

-------
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CASE STUDY: Des Moines Water Works
(DMWW)
v         ' -Municipal Utility
           •Serves 350,000 people
           •Provides "contract" services to 20
           communities
              •Iowa Code § 28E
              •4 Basic levels of service offered
                 •Level 1 - Special Projects
                 •Level 2 - Wholesale Water
                 -Level 3 - Wholesale Water + Billing &
                 Customer Service
                 •Level 4 - Total Service Contract
                                                    15
 Town of Panora, IA & DMWW (Level 1)
                        •Panora, IA
                           •Serves 1,100 people
                           •Surface Water
                           •Exceeds Nitrate MCL
                        •Panora contracts with DMWW for:
                           •Nitrate Study
                           •Employee Classification
                           System
                           •Rate Study
                        •DMWW charges fee based on time
                        and materials
                                                    16
                                                                 8

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Xenia, IA Rural Water District & DMWW
(Level 2)
                     >Xenia Rural Water District
                        •Completed in 1983 - served 700
                        •Today serves 5,000
                        •Treatment plant at capacity
                        •Purchasing water is least-cost solution
                        to demand growth
                     'DMWW
                        •One of 5 wholesale suppliers to Xenia
                        •Agreement includes:
                           •Initial connection fee based on
                           anticipated demand
                           •Metered wholesale supply
City of Waukee, IA & DMWW (Level  3)
          •City of Waukee provides water to 3,400 people
         •City obtains wholesale treated water from DMWW
   •City analyzed its in-house meter reading and billing operation
    •City determined that they could contract this function to DMWW
                          and save 40%
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 Annual cost of
 meter reading
  and billing
           SI 20.000
                    City in-House
                                   Contract with DMWW
                                                            18

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  City of Windsor Heights, IA & DMWW
  (Level 4)
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             •City of Windsor Heights provides water to 5,000
             people
             •Since 1963 city has purchased entire supply
             wholesale from DMWW
             •In 1989, to streamline its operations, the city
             contracted with DMWW for "total service":
                •Water supply
                •Meter reading and billing
                •Inspections, preventive maintenance, & repair
                •Annual engineering analysis
                •Automated mapping/facility management data
             •City receives significantly better service for the
             same cost
  Summary
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