United States
        Environmental Protection  Office of Water           EPA 812-B-93-005
        Agency          (WH-550)              March 1993
wEPA  TRIBAL WATER UTILITY
        MANAGEMENT

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• US EPA - Office of Drinking Water
                      Tribal Water
                             Utility
                     Management
 Sponsored By:
 Indian Health Service
 Environmental Management Branch
 Contact: Mr. Don Vesper
 (505)262-6318

 California State University, Sacramento
 Office of Water Programs
 Contact: Mr. Ken Kerri
 (916)278-6142
 Presented By:
 ETC. Inc.
 PO Box 2097
 Corvallis, Oregon 97339
 Contact: Mr. Mike Chemiak
 (503) 754-7677
TEC. Inc.
921 Monument Peak Drive
Gardnerville. Nevada 89410
Contact: Mr. Tom Crawford
(702) 265-2490

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 Primacy
 EPA  Regional
 Contacts:
EPfl Project Manager
Chief, Drinking Water Branch
U.S. EPA, Region I
Office of Water Supply (2103)
JFK Building
Boston, MA 02203
Phone: (617)565-3610
                           Chief, Drinking Water Branch
                           U.S. EPA, Region H
                           26 Federal Plaza, Room 853
                           New York, NY 10278
                           Phone: (212)264-1800
                           Chief, Drinking Water Branch
                           U.S. EPA, Region IV
                           345 Courtland Street
                           Atlanta, GA 30365
                           Phone: (404)347-2913
                           Chief
                           Safe Drinking Water Branch
                           (5W-TUB-8) U.S. EPA
                           Region V
                           230 S. Dearborn
                           Chicago, IL 60604
                           Phone: (312)353-2650
                           Chief
                           Water Supply Branch
                           UA EPA, Region VI
                           1445 ROM Avenue, Suite 1200
                           Dallas, IX  75202-2733
                           Phone: (214) 655-7150
Roger Barnes (WH 550E)
Office of Drinking Water
U.S.EPA
401M Street, SW
Washington, DC 20460
Phone:  (202)475-8997
Or. (202) 245-4194
Chief, Drinking Water Branch
Water Management Division
(DRNK) U.S. EPA, Region VU
726 Minnesota Avenue
Kansas City, KS 66101
Phone:  (913)551-7032
                              Chief, Drinking Water Branch
                              (8WM-DW) U.S. EPA
                              Region VD3
                              99918th Street, Suite 500
                              Denver, CO 80202-2405
                              Phone: (303)293-1430
                              Chief, Drinking Water Branch
                              U.S. EPA, Region EX
                              Water Supply Section (W-6-1)
                              1235 Mission Street
                              San Francisco, CA 94105
                              Phone: (415)705-2111
                              Chief, Drinking Water Branch
                              UJS. EPA, Region X
                              Mail Stop WD-132
                              1200 Sixth Avenue
                              Seattle, WA 98101
                              Phone: (206)442-4350
Page 16

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                                                                          Primacy
How  Much
Money is
Available?
 EPA funds are extremely limited. Current funding levels are listed below.
Funding for Tribes
PWSS
UIC
FY89
$669,000
$525,000
FY90
$786,000
$558,000
                             EPA will allocate these funds for Tribal primacy development grants and
                             for Tribal primacy program grants. A Tribe could receive an annual
                             primacy program grant from EPA to maintain its primacy program, but
                             states currently receive less than 50% of their primacy program funding
                             from the EPA. The total amount of funds available from the EPA is not
                             expected to increase significantly in the future. This means that available
                             funds from the EPA will not be enough to cover Tribal program costs.
                             New regulations are currently being developed by the EPA that will
                             significantly add to the costs of administering a Tribal primacy program in
                             the future. Also, the SDWA regulations are becoming more
                             comprehensive and strict, and will require a greater effort for a Tribe to
                             develop regulations at least as stringent as EPA regulations.  In addition,
                             the number of Tribes competing for funding for development grants and
                             for primacy program grants is going to increase. This means that Tribes
                             may receive smaller and smaller amounts of funds from the EPA at the
                             same time that the demands for stricter levels of compliance will come
                             into effect.
What  Are The
Responsibilities
After Gaining
Primacy?
Continuation of primacy for a Tribe, as in the case of all states, is
dependent upon: maintaining an adequate program that complies with
new and revised EPA rules; system oversight; and also supervision and
enforcement of violations of the requirements. The EPA now regulates 30
contaminants, and is scheduled to regulate 53 more over the next two to
three years. In addition, the EPA has been mandated by Congress to add
25 additional contaminants to the list every three years. Within five years
the list will contain over one hundred regulated contaminants. A Tribe
with primacy will be responsible for monitoring all regulated
contaminants. If a Tribe does not fulfill its primacy obligations, the EPA
will be forced to revoke a Tribe's primacy status and take over the
program's supervision and enforcement responsibilities.  This means a
high standard of performance will be placed on Tribes who are granted
primacy. This is the same standard that is applied to states.

It is the Tribe's responsibility to assure that sufficient funds are available
to maintain a  primacy program, regardless of EPA's year-to-year funding.
This could be a serious drain on a Tribe's financial resources.

When a Tribe attains primacy, it should consider this to be a permanent
status. A Tribe should not consider applying for primacy on a "trial"
status. It should be 1 00% certain that it is willing to, and capable of,
running the program indefinitely.
                                                                                    Page 15

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 Primacy
What fire The
Uses/Restrictions
of Grant  Funds?
Development grant funds may be used for expenses directly related
to developing a primacy program. They may be used for:

   •  hiring an attorney to review drinking water statutes or codes
      developed by a Tribe in order to qualify for primacy

   •  consultants' fees to help set up a record-keeping system

   •  office expenses such as telephone charges for calls to get
      assistance from EPA, IMS, etc.

   •  expendable office supplies: paper, copier supplies, postage used in
      preparing for primacy

   •  travel expenses to consult with EPA or other agencies about PWSS
      or UIC matters

   •  training costs to develop needed technical expertise.

Development funds may not be used for such things as:

   •  expansion of a public water supply system

   •  purchase of new equipment

   •  salaries of operators

   •  ongoing operating and maintenance expenses

   •  funding a Tribal utility authority.
Page 14

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                                                                         Primacy
 What Will  EPA
 Expect  In A
 "Treatment-As-
 A-State"
 Application?
 (continued)
 The four criteria that a Tribe must meet to qualify for "treatment-
 as-a-state" are:

    1.  The Tribe is recognized by the Secretary of the Interior.

    2.  The Tribe has a governing body carrying out substantial
       governmental duties and powers over a defined area.

    3.  The Tribe has jurisdiction to perform the functions necessary to
       regulate the public water supplies and/or injection wells which
       are the subject of its application.

    4.  The Tribe is "reasonably expected to be capable" of administering
       the federal drinking water regulations and providing an effective
       Public Water System Supervision (PWSS) program and/or
       Underground Injection Control (UIC) program.

 Another very important factor is to document the Tribe's fiscal
 procedures and status. This can be done by submitting procurement and
 accounting procedures, audit reports, or results of audits.
What  Is A
Development
Grant?
 In order for a Tribe to receive development grant funds, it first must
 obtain "treatment-as-a-state* designation. A Tribe is then expected to
 make a commitment to achieve primacy within three years of the
 application for development grant funds for the PWSS program and
 witfiin four years of the application for the UIC program.
•;..••_- .--'-- "      v     _...,~-*££SK  "•'.._
 The commitment to achieve primacy takes the for|K-of a development
 plan. In its plan, a Tribe most determine what it needs to do to meet the
 primacy requirements, and then indicate how and when each step will be
 accomplished. After developing its plan, the Tribe should have a
 reasonably good understanding of what the cost of achieving primacy will
 be, and at that point the Tribe would apply for a grant

 A development grant applieatjBihould contain a reasonably complete
 description of what the Tribe"Sspes to accomplish during each of the years
 of the development period.  Each application will be different, because no
 two Tribes start out with the same set of circumstances.  Each Tribe needs
 to study the primacy requirements, compare them with its present
 capabilities, and then prepare a plan to develop a primacy program.
 Remember be realistic.  Each year EPA will evaluate the Tribe's progress
 in meeting its objectives and make a determination of whether to continue
 funding support for the next year. These evaluations are performance-
 based and are both intensive and extensive, covering a broad variety of
 areas in considerable depth.

                                                       Page 13

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 Primacy
 What  Is
 "Trcatmcnt-fis-
 fi  State"?
If an Indian Tribe wishes to gain primacy, it must first apply for and
obtain "treatment-as-a-state" status. With this status, the Tribe can apply
for a development grant to develop its primacy program.

Whenever the federal government gives a state authority to
enforce a federal law, administer a program, or in some way act on
behalf of the federal government, it requires the state to have certain
legal and political structures in place that enable the governing body
to promote and protect the health, safety and welfare of its citizens.

Unlike states, Tribal governmental structures vary widely among
Tribes. The duties and powers exercised by these governments also vary
widely. Therefore, before assigning enforcement powers, or primacy, to a
Tribe, it is necessary for each Tribe to present evidence that it:

   1. Is a federally recognized Tribe,
   2. Does promote and protect the health, safety and welfare of its
      citizens,
   3. Has legal jurisdiction over a certain population and area, and
   4. Has or could develop the ability to carry out the program it is
      asking for authority to administer on behalf of the federal  .
      government

When a Tribe demonstrates all of this, it receives EPA recognition and
is eligible for "treatment-as-a-state".

In simpler terms, "treatment-as-a-state" status means the federal
government (through the EPA) agrees that the Tribe has the same right
as any state to apply for enforcement authority in the Public Water
System Supervision Program  and the Underground Injection Control
Program.
What Will ThQ
EPfl  Expect In  ft
"Tr«atmcnt-fl$-
fl-State"
Application?
Page 12
In presenting an application, the EPA requires that a Tribe submit
various kinds of "core" information. The Tribe is asked to provide copies
of documents, Tribal organization charts with lines of authority, and
maps defining the Tribal lands. In many cases a Tribe may also be asked
to provide written explanations or descriptions of how the Tribe operates.
The EPA allows fairly wide flexibility in the format of the presentation,
and will consider Tribal applications on a case-by-case basis.

                                                    (continued)
                                                                I

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                                                                            Primacy
B. Underground
   Injection Control
   (CJIC) Program
 The underground injection control (UIC) program is essential to protect
 underground sources of drinking water (USDW) from contaminants and
 hazardous wastes that are injected underground. Specific examples that a
 UIC program may control include: regulating underground injection by
 petroleum companies on Tribal lands; controlling septic tank subsurface
 leaching wells; and the locating and plugging of abandoned injection
 wells. Under no circumstances are injected fluids to cause USDW to
 exceed drinking water maximum contaminant levels (MCLs) in
 groundwater.

 To be granted primacy for the underground injection control (UIC)
 program, a Tribe must demonstrate to the EPA that its program contains
 the following provisions:
    1.   Prohibition of unauthorized injections
»*        .
    2.   Prohibition of endangering drinking water sources

    3.   Prohibition of movement of fluid into a USDW (Underground
        Source of Drinking Water)

    4.   Authority to issue permits or rules

    5.   Authority to impose conditions on authorized injection activities

    6.   Authority to impose compliance evaluation requirements

    7.   Authority to take enforcement actions

    8.   Authority for public participation in permit processing

•    9.   Authority to apply technical criteria and standards for the control
      '•  of underground injection

    10.  Classification of injection wells

    11.  Elimination of Class IV wells (wells used to dispose of hazardous
        and radioactive wastes)

    12.  Authority to identify aquifers that are underground sources of
        drinking water (USDW) and to exempt certain aquifers

    13.  Authority over federal agencies and persons operating on
        federally owned or leased property

    14.  Authority to revise underground injection control programs

    15.  Authority to make and keep records and make reports on its
        program activities as prescribed by the EPA

   16.  Authority to make available to the EPA upon request, without
        restriction, any information obtained or used in the
        administration of the program, including information claimed by
        permit applicants as confidential.

                                                         Page 11
                                                                                                   I

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 Primacy
 How Can  fl
Tribe  Attain
Primacy?
  There are three steps. First, an Indian Tribe needs to achieve
  "treatraent-as-a-state" designation. Then the Tribe will spend up to three
  or four years developing its program. Finally, a Tribe will apply for
  primacy when its program is developed. When an Indian Tribe
  demonstrates that it has the ability to protect the public health by
  regulating public water supplies and/or groundwater, the EPA may
  assign enforcement authority to that Tribe. When this occurs, the Tribe is
  granted primacy: the role of primary or main enforcer of the Tribal
  regulations (as strict as federal) concerning safe drinking water and/or
  protection of reservation groundwater.

  Primacy brings regulatory control closer to home in the sense that
  a Tribe is closer than the EPA to the systems being regulated. At
  the same time, however, the Tribe is still required to adopt and enforce
  Tribal safe drinking water regulations and codes which are at least as
  strict as EPA regulations. The Tribe's regulatory actions will still be
  closely monitored by the EPA via semi-annual and annual program
  reviews.
How Does  A
Tribe
Demonstrate It
Is  Ready For
Primacy?

A.Publk Water
   System
   Supervision (PWSS)
   Program
To be granted primacy for the public water system supervision
(PWSS) program, a Tribe must demonstrate to the EPA that it meets five
basic requirements:

    1.  The Tribe has adopted drinking water regulations at least as
       stringent as EPA drinking water regulations under the SDWA.

    2.  The Tribe has adopted and implemented procedures to enforce
       these regulations.

    3.  The Tribe has established a record-keeping system and will
       provide the reports required by law.

    4.  The Tribe can demonstrate that if it might grant variances or
       exemptions from drinking water standards, it will do so in a
       manner that protects public health.

    5.  The Tribe can demonstrate that it has adopted and implemented a
       plan to provide safe drinking water in emergency circumstances.
Page 10

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                                                                          Primacy
When Not to
Seek  Primacy
A Tribe may decide not to seek primacy after it has
carefully considered all the ramifications of seeking and attaining
primacy. The costs and resources required to achieve and maintain a
regulatory program may far exceed the benefits from achieving primacy.

A major consideration for many Tribes is the availability of financial
resources to develop and maintain a regulatory and enforcement
program.  The establishment and staffing of an effective, independent
enforcement/regulatory agency could have a seriously adverse impact on
Tribal funds, and possibly divert funds from other essential Tribal
programs. The costs of operating a primacy program are always greater
than the grant funds available from the EPA. If the Tribe U
experiencing difficulties providing adequate funding for the
Tribal water utility, then primacy would definitely be very
difficult for a Tribe  to attain. Primacy is not an opportunity to
obtain additional EPA funds to construct* operate and maintain a
Tribal water utility  or underground injection control facilities or
equipment.

The decision to not seek primacy could depend on where a Tribe is
located and the level of public health and environmental protection
offered by existing agencies. If this level is deemed adequate to protect
the drinking water delivered to Tribal consumers, ensure the
groundwater quality, and protect the overall reservation environment,
then the Tribe could save money under the existing regulatory
arrangement.
                                                                                    Page 9

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  Primacy
 7.  IHS Programs
Advantages/Benefits

•  IHS technical assistance can
   be utilized to help develop
   primacy applications and
   programs.
                                  IHS may be able to assist the
                                  Tribe in seeking matching
                                  funds for a Tribal regulatory/
                                  enforcement agency.

                                  IHS will continue to provide
                                  technical assistance and
                                  funding for water system
                                  improvements after a Tribe
                                  obtains primacy.
Limitations/Problems

•  The availability of IHS
   technical capability and
   assistance may not satisfy
   primacy requirements for
   in-house staff expertise.

•  IHS funds cannot be used to
   support a Tribal regulatory/
   enforcement agency.
                                •  If the Tribe adopts standards
                                    tougher than EPA standards,
                                    the scope of IHS services may
                                    drop because of increased
                                    construction costs to meet the
                                    higher standards. Also, IHS
                                    may no longer be able to
                                    perform some of the activities
                                    that would now be deemed
                                    regulatory, such as plan
                                    reviews and sanitary surveys.

The Indian Health Service (IHS) is a service agency and not a regulatory
agency. IHS has construction funds for water systems on Indian
reservations, but most of these funds can only be used to serve new
housing. These funds cannot be used to support the operation/
maintenance of Tribal water systems or support Tribal regulatory
programs. However, subject to the availability of IHS staff, IHS will
provide technical assistance to all Tribes regarding most environmental
health matters.
When to  Seek
Primacy
PageS
 A Tribe should seek primacy only if it has carefully considered all of
 the issues regarding seeking and attaining primacy and has determined
 that attaining primacy is in the best interests of the Tribe and its future
 generations. Important considerations include the desire and ability to
 enhance Tribal autonomy and self-determination, to strengthen Tribal
 government, and to play a stronger role in the protection of the public
 health and environment on Tribal lands. The decision to seek primacy is
 a proper strategy if a Tribe is willing to develop and maintain the
 necessary components of successful primacy:

   1) organizational structures and programs,
   2) technical expertise, and
   3) financial resources.
                                                                 I

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                                                                          Primacy
    EPfl Assistance
    Programs:

    B. Funding/Grant
        Programs
Advantages/Benefits

•  Available funding for Tribes:

   Public Water System
   Supervision:

   FY 89—$669,000
   FY 90-4786,000

   Underground Injection
   Control:

   PY 89—$525,000
   PY 90—$558,000
Limitations/Problems


•  Tribes must provide at least
   10% matching funds.  (In-kind
   services may be used.) Costs
   can escalate and require a
   Tribe to spend a great deal to
   get its program  started.  In the
   future, the new  SDWA
   regulations will increase the
   total funding requirement for
   everyone significantly. The
   amount of money available
   from the EPA will not be
   enough to cover Tribal program
   costs. Total available funding
   must be shared by
   participating Tribes.
 5. Environmental
    Protection
    Concerns:
   Development of data useful to
   long-term natural resource
   management decision-making.
                                 Employment of Tribal
                                 membership in natural
                                 resource inventories, sampling
                                 and environmental protection.

                                 Enhancement of Tribal self-
                                 determination and its link to
                                 environmental protection;
                                 enhancement of Tribal
                                 government's role in regional
                                 environmental management
                                 decisions.
   Cost of sampling, data
   acquisition, data management
   and reporting above the level of
   EPA grant assistance.

   Cost of technical expertise and
   staff development
                                  Possible litigation through the
                                  assertion of Tribal jurisdictional
                                  authority over land and water
                                  resources.
6. Regulatory
   Enforcement:
   Tribal agency will be
   responsible for regulating and
   enforcing compliance violations
   by water utilities and owner/
   operators of underground
   injection wells.
   EPA will require the Tribal
   agency to perform regulating
   and enforcing duties. If the
   Tribe does not perform its
   enforcement duties, the EPA
   must rescind primacy and
   conduct enforcement actions.
                                                                                     Page?

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 Primacy
 3. Political/Legal
    Considerations
Advantages/Benefits


•  Enhancing/strengthening
   Tribal government and
   authority.

•  Enhancing recognition of
   Tribal government by non-
   Indian interests and
   governments.

•  Enhancing Tribal code
   through the development of
   Tribal environmental laws
   specifically designed to meet
   reservation needs.
Limitations/Problems


•  Potential legal fees for ensuring
   jurisdictional authority,
   including costly court cases.

•  Successful implementation of a
   program requires careful
   development of internal Tribal
   administrative capabilities.

•  General lack of knowledge and
   information regarding
   environmental problems on a
   reservation may stall or delay
   program development unless a
   public education campaign is
   launched.
4. EPA Assistance
   Programs:

   A. Technical
      Assistance
   Assistance in preparation of
   a development grant:

   (1) Development plan
   (2) Commitment to
      program and
      budget from Tribal
      Council

   Provision of technical
   assistance in the .
   development of programs,
   conducting surveys,
   developing regulations, and
   organizing data-gathering
   and data-storage procedures.
   Limited EPA assistance is
   available to primacy Tribes,
   due to budget and resource
   limitations.

   There are time-consuming
   procedures that often require
   EPA approval.

   There are monetary
   considerations for hiring
   professional staffs and services
   to carry out these programs.
Page6

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                                                                         Primacy
1. Sovereignty and
   Self-Determination
   Considerations
   (continued):
Advantages/Benefits

•  This is an opportunity for
   government-to-government
   relations in developing
   uniform, comprehensive
   regulations (for example,
   Tribal-State cooperative
   agreements).
Limitations/Problems

•  Most Tribes own and operate
   their public water systems.
   This could be a potential
   problem when applying for
   primacy, because the Tribe
   would be regulating itself. This
   potential conflict between the
   Tribe's water utility group and
   enforcement group must be
   resolved to  EPA satisfaction,
   usually by establishing the
   regulatory program as an
   agency of the Tribal
   government which is
   independent of Tribal
   enterprises.
2. Tribal
   Administrative and
   Organizational
   Capacities:
   Strengthening of Tribal
   governments.

   Development and improvement
   of Tribal administrative
   procedures.
                                Tribal governments would
                                provide more direct services to
                               Tribal members.
   Possible regulator-regulatee
   conflict.

   Development of additional
   administrative structures and
   programs may pose both
   organizational and monetary
   problems, especially for small
   Tribes.

   Total cost of program
   development may be too
   expensive for Tribal
   government
                                                                                   PageS

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 Primacy
 1. Sovereignty and
    Self-Dettrmlnation
    Considerations:
Aavantages/Benefits

 Tribe establishes drinking
 water and/or underground
 injection control rules and
 regulations for Tribal lands.
                                 Tribe establishes procedures
                                 for regulations and
                                 enforcement
                                 Smaller Tribes can band
                                 together to form a consortium
                                 of Tribes for self-
                                 determination goals
                                 (formation of inter-Tribal
                                 councils).
                                 Strengthening of Tribal
                                 government and ability of
                                 Tribes to express civil
                                 regulatory jurisdiction over
                                 the actions of non-Tribal
                                 members violating Tribal
                                 environmental protection
                                 laws and regulations.
                                 Development of a program
                                 limits state attempts to
                                 regulate and to influence
                                 resource development
                                 decisions on reservation.
 Limitations/Problems

I  Tribe must keep rules and
  regulations as strict as, or
  stricter than, the U.S. EPA
  rules and regulations.
                                 Tribe must establish an
                                 independent Tribal regulatory
                                 organization consisting of a
                                 professional staff that must
                                 enforce drinking water and/or
                                 underground injection control
                                 rules and regulations. It is
                                 costly to form and fund a
                                 separate Tribal agency for
                                 enforcement

                                 Costs will vary depending on
                                 the type of organization
                                 established, the number of
                                . participating Tribes forming
                                 the consortium, and the
                                 amounts contributed by each.
                                 Consortium must be
                                 recognized as having
                                 enforcement capabilities on
                                 all member reservations.

                                 Tribe must establish an
                                 administrative procedure for
                                 civil enforcement against non-
                                 Indians. Likely opposition
                                 from state and county
                                 governments may lead to legal
                                 challenges regarding the
                                 Tribe's authority to regulate
                                 the behavior of non-Tribal
                                 members on lands held in
                                 trust for the Tribe.

                                 Conflicting environmental
                                 programs between states and
                                 tribes on adjacent land may
                                 pose practical administrative
                                 problems; the lack of
                                 uniformity of regulations and
                                 procedures may create conflict
                                 between states and Tribes
                                 (and possibly even between
                                 Tribes).
Page 4

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                                                                    Primacy
What flre Th«
Advantages  and
Limitations  Of
Primacy?
A Tribe considering primacy must carefully evaluate many issues. The
major issues include:

   L  Sovereignty and plans for self-determination
   2.  Tribal administrative and organizational capacities
   3.  Political/legal considerations
   4.  EPA capacity to provide assistance (technical assistance
      and funding/grant programs)
   5.  Reservation environmental protection concerns
      (environmental/resource inventories, water quality
      sampling, and protection and land use planning)
   6.  Regulatory enforcement
   7.  TPS programs
   8.  Continuing Tribal program responsibilities and costs after
      primacy is achieved.

The implications for Tribes from each of these issues must be fully
explored as a Tribe decides whether or not to seek primacy. Each issue
has both advantages/benefits and limitations/problems associated with it
Typical concerns that a Tribe should consider are listed on the following
pages.
                                                                              PageS

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 Drinking  Water Primacy
 Whom  Can I
 Contact For
 Information?
 This Primacy newsletter is designed to assist Indian Tribes in
 understanding what primacy involves under the Safe Drinking Water Act
 (SDWA) program of the Environmental Protection Agency (EPA). It
 describes some of the advantages and limitations of the primacy program.
 Tribes may want to take these into account as they consider applying for
 primacy.

 This newsletter is funded by the Office of Drinking Water of the U.S.
 EPA. Another part of this project is to develop a Public Water System
 Supervision (PWSS) and Underground Injection Control (UIC) primacy
 procedures handbook for Indian Tribes and to conduct primacy workshops
 for Tribes. If you would like to attend an informational workshop
 regarding further details on the advantages and limitations of seeking
 primacy and the steps and procedures necessary to achieve primacy,
 contact your EPA Regional Drinking Water Section Chief. The addresses
 and  phone numbers of the Regional Chiefs are listed on the last page of
 this  newsletter.
What  is
Primacy?
Primacy is a provision of the Safe Drinking Water Act (SDWA). It
allows Indian Tribes the opportunity to assume principal responsibility
for the enforcement of federal drinking water supply and/or underground
injection control (UIC) regulations in areas within the Indian Tribe's
jurisdiction. Currently this enforcement is performed by the Regional
Office of the U.S. EPA.  A Tribe with primacy must have drinking water
regulations which are at least as strict as EPA regulations, and must have
an independent agency or organization within the Tribal government that
has the power to enforce the Tribe's regulations.

Primacy has serious economic and political implications for Tribes.
Deciding to seek or not to seek primacy requires that a Tribe review its
environmental protection plans, evaluate its governmental/administrative
organization, and consider its sources of revenue. The formation and
administration of an independent Tribal enforcement agency to enforce
Tribal drinking water codes and regulations can be very costly. EPA
funds are available, but they are very limited and are not sufficient to
cover all Tribal program costs.

Primacy can allow a Tribe to more fully exercise its sovereign powers by
assuming the federal (EPA) program of establishing and enforcing
drinking water and/or underground injection control rules and regulations
for water utilities. This can afford a Tribe an increased role in regulation
of the reservation environment
Page 2

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Prinking Water  Primacy
The Safe Drinking Water Act (SDWA) provides the opportunity for
Indian TribQS to take an active role in the enforcement of public
drinking water supply regulations within Indian reservations.
                   Whom Can I Contact for More
                   Information?
                   What Is Primacy?
                   What Are the Advantages and
                   Limitations of Primacy?
                   When to Seek Primacy?
                   When Not to Seek Primacy?
                   How Can A Tribe Attain
                   Primacy?
                   What Is "Treatment As A
                   State"?
                   What Is A Development Grant?
                   How Much Money Is Available?
                   What Are the Tribe's
                   Responsibilities After Gaining
                   Primacy?
                                               w

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                                   SEMINAR AGENDA
      1 •  Today, all attendees will jointly participate in a session dealing with common topics. Primacy issues
          will be openly discussed. We will also review the most relevant pans of the Safe Drinking Water Act
          and what it means to you and your system. Finally, we will review Administrative roles of Utility
          programs and give you a method to self-evaluate your sums.
          Primacy Program
          • What is Primacy?
          • Advantages & Disadvantages
          • Treatment as a State
          • Grant Applications and Funding
          Sate Drinking Water flct
          • Sampling Requirements
          • Coliform Standard
          • Public Notification
          • Surface Water Treatment Rule Impacts
          • UIC and Wellhead Protection Programs
          • Lead/Copper Rule
          Water Utility Management
          • How do we evaluate our Utility Program?
          • Who's responsible?
          • What is the Board and Tribal Council Role?
Day 2 •  Tomorrow, attendees may choose to participate in one of two sessions. Those in the process of organiz-
          ing their utility programs and who need to develop an ordinance. O&M program or firmer financial base
          should attend the session Organizing a Utility Structure. Attendees who would like to learn more detail
          about financial management should attend the Utility Financial Management seminar. Topics for each
          session include:
          Organizing a Utility Structure
          • How do we Develop a Water Ordinance?
          • Who is our Staff and what do they do?
          • How do we Communicate with each other?
          • Operation and Maintenance Programs
          • What Financial Issues do we face?
          • How do we Handle Customers?
Utility Financial Management
• How do we Develop, a Budget?
• How do we Structure Rates?
• Developing a Collections Policy
• Monthly Financial Monitoring
• Water Conservation & Loss Control
• Selling your Program to Administrators

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                      TRIBAL WATER CJTILITY MANAGEMENT
What Will Be
Covered?
Welcome to the two day Tribal Water Utility Management course presented by
EPA, IHS and California State University. The course is designed to provide
Administrators and Managers with practical information about Primacy,
sampling, water ordinances, rate structures, staffing and communications. The
two day outline is presented on the next page.
Who Should Attend?
The course is designed to address your concerns and issues regarding Utility
Management and Administration. All participants will attend a combined
session on the first day. The topics of Water Primacy, Safe Drinking Water Act
changes and Utility Management responsibilities will be reviewed. Discussions
and questions are encouraged. Tomorrow, attendees will have a choice of
participating in a "developing" seminar or in a more "advanced" discussion on
financial issues.
What Will It Cost Us?
There is no fee to attend. In fact, as you are probably already aware, your
room will be paid for if necessary and you will receive a $30 per diem
payment for food. The per diem will be given out each day prior to the lunch
break. You must sign a form acknowledging receipt of the money.  Should you
have any questions or problems with room arrangements, please let either Tom
or I know immediately!
Who Are the
Instructors?
Tom Crawford is a member of the Washoe Tribe and President of TEC, Inc. of
Gardnerville, Nevada.  Tom is a system utility consultant and is currently
working with over 20 tribes in the Western region of the United States. He is the
former Utility Manager for the Washoe Tribe and also served on the Washoe
Tribal Council.

Michael Chemiak is Vice President of Environmental Training Consultants of
Corvallis, Oregon. Over the past 5 years. Mike has provided training and
technical assistance to operators and managers from more than 45 tribal water
systems in the Southwest. Northwest and Alaska.
Anything Else We
Should Know?
You should know that EPA, IHS. California State University, ETC and TEC
have organized and funded this program with your concerns in mind. Small
tribal water systems currently face all kinds of legitimate concerns.  Our goal is
to provide you with some ideas and tools to improve the Operation and Man-
agement of your systems. The seminar will also give you an opportunity to meet
with other managers facing similar problems. We hope you will take advantage
of this opportunity by sharing your frustrations and successes!

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  Community Water Bulletin's
       SMALL SYSTEM
       GUIDE TO THE
SAFE DRINKING WATER ACT
  Community Resource Group, Inc.
         Southern RCAP
          2705 Chapman
        Springdale, AR 72764
          (50D-756-2900
                                               I

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                         Table of Contents


Chapter I: An Overview of the Safe Drinking Water Act	1-4

      The Players in the Pyramid	1
      The Chain of Responsibility	2
      Water Quality Standards	3
      The Rules are Changing	3

Chapter D: Board Responsibilities Under SDWA	5-8

      Your Four Responsibilities	5
      Hiring an Operator	5
      Water Quality Testing	7
      Sanitary Surveys	7
      Public Notification	7

Chapter m: The Standard Monitoring Framework	9-12

      The Monitoring Framework	10-12

             The Nine-Year Monitoring Cycle	10
             Effective Dates of EPA Rules	11
             Base Monitoring	11
             Repeat Monitoring	11
             Increased Monitoring	11
             Decreased Monitoring	11
             Vulnerability Assessments	12

Chapter IV: The Total Coliform Rule	13-18

      About Coliform Bacteria	13
      Summary of the Rule	13
      Key Provisions of the Total Coliform Rule	14

             Number of Samples	14
             Written Sampling  Plan	14
             Repeat Sampling	IS
             If Repeat Samples are Coliform Positive	15
             Sampling the Month Following Detection of Coliform	IS
             Types of Violations and Notifying the State	16
             Public Notification	16
             Sanitary Survey	16
             Total Coliform Rule Check List	17

Chapter V: The Surface Water Treatment Rule	19-24

      How Surface  Water Gets  Polluted	19
      The Water Treatment Process	20-23

             Raw Water	20
             Intake and Screening	20
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 Table of Contents,  continued
             Prechlorination	21
             Coagulation	21
             Flocculation	21
             Sedimentation	22
             Filtration	22
             Disinfection	22
             Corrosion Control	23
             Water Storage	23

Chapter VI: Filtration, Turbidity, and Disinfection Rules	25-30

       Disinfection Requirement	    26
       Filtration Requirements	26
       What to Do if You Can't Avoid Filtration	27
       If You Must Filter	28
       Reporting Requirements	29
       Operator Requirements	   30
       Public Notification	30
       Variances and Exemptions	30
       Timetable for Implementation	30

Chapter VII: Primary Drinking Water Contaminants	31-36

Chapter V1H: Public Notification	37-40

       Tier 1  Notification Process	38
       Tier 2 Notification Process	39
       Public Notice Contents	39
       Mandatory Health Effects Information	40
       Proof of Notice	40
       Notification for Unregulated Contaminants	40
       Special Public Notice for Fluoride	40

Chapter DC: When Contamination Happens	41-44

       First of All	41
       What to Do Right Away	42
       What to Do Next	43
       Educating Yourself	•  •   43
Community Resource Croup, Inc. /Southern RCAf

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Chapter I: An Overview of the Safe Drinking Water Act


Tastes okay to me. Smells all right. Looks fine. It must be safe to drink .  . .

Maybe, maybe not. When it comes to bacteria, viruses, and chemical contamination,
what you can't see, smell, or taste, in your drinking water can hurt you!

We take for granted that we're getting a constant and safe supply of drinking water when
we pay our water bill and turn on the tap.

Your community selected you to act on their behalf and ensure the water they receive is safe.
As a member of the system's Board you've accepted that responsibility.

The pyramid below shows the local responsibility at the top with the state, federal agen-
cies and federal law acting to support local small water system Boards in their efforts to
bring safe water to their customers.



                          Local Board
                           State Agency
                   Environmental Protection
                         Agency  (EPA)
                          U.S.  Congress
                   Safe Drinking  Water Act
                             (SDWA)

The Players in the Pyramid

In most states, the State Departments of Health provide support for community water sys-
tems through special water and wastewater divisions.  Your State Department of Health
develops regulations for you to follow to ensure safe drinking water for your community.

State agencies keep track of water sample results, conduct detailed inspections called sani-
tary surveys, and enforce the law by imposing fines and penalties when necessary.
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State Departments of Health also provide technical assistance to help public water systems
comply with the regulations. When you have questions, call them. They can help.  You'll
usually find them listed in your telephone book white pages under State Government.

EPA., (the Environmental Protection Agency) is the federal agency responsible for setting
the National Drinking Water Standards and writing the regulations that each state follows.
National standards  assure us we'll be drinking safe water no matter where we travel in the
U.S.

Setting standards and writing regulations is a difficult and time-consuming process:

    • EPA must determine the health dangers of various contaminants. Once a contaminant
      has been determined a risk, EPA sets the Maximum Contaminant Level (MCL).

    • The MCL is the largest amount of a contaminant that can be present in drinking water
      without causing a risk to human health.

    • EPA consults with people in public health, science, the water industry, and people
      with environmental concerns. Before a regulation can go into effect, the public has
      a chance to comment.

The U.S. Congress passed the Safe Drinking Water Act (SDWA) in 1974. The purpose of
the Act is to make  sure that drinking water suppied to the public is safe.

In 1986 Congress amended  SDWA. This amendment strengthened the Act and was a re-
sponse to concerns  about the growing number of threats to the safety of our nation's drink-
ing water.

The Chain of Responsibility

The chain of responsibility is clear:

    • You and the other members of your Board art responsible for ensuring that
       your community's water is safe to drink.

    •  You carry out your responsibility by making sure that your system is in
       compliance with state water quality standards and regulations.

    • The state standards are based on national standards set by EPA to implement
       the Safe Drinking Water Act.

   :  As a Board member, how can you be sure you 're carrying out your responsibility to
     provide safe drinking water?
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A:  You've carried out your responsibility to provide safe water for your community if
     your water system consistently meets state water quality standards.
  :  How do you ensure that your system meets the standards ?

A."  You can meet the standards by doing what the regulations require in a timely way.

 Water Quality Standards

• The water quality standards include water testing methods such as the number of
  times to test and the place to test at.

• State standards specify what contaminants you need to test for.

• State water quality standards (in most states) require that you have a certified opera-
  tor to run your system.

• According to the standards, you must notify your customers if your water samples
  show that your water is unsafe. The standards tell you exactly what, when, and how
  you must tell customers.

• State water quality standards set the penalties, such as fines, for systems that don't
  meet them.

The Rules are Changing

SDWA (Safe Drinking Water Act) Amendments are making it necessary for water systems
to test for new contaminants. In the future, your responsibility to provide safe water will
become tougher and tougher.

Things are changing. Even though we have almost eliminated typhoid and cholera as water
problems, other viruses and disease-causing organisms continue to be threats.

• Increased use of chemicals by our industrial society produces new contaminants as
  well.

• Better scientific methods make it easier to detect contaminants and predict their effect
  on human health.

Below are some sources of contamination we now know can make our drinking water
unsafe:

   • bacteria and viruses

   • naturally occuring radioactive materials

Community Resource Croup, Inc. /Southern RCAP                                          3
                                                                                              i

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    • naturally-occuring metals like arsenic and chromium

    • legally and illegally discharged waste from industry

    • runoff of agricultural pesticides and fertilizers

    • faulty septic tanks

    • seepage from landfills

Even water treatment and  distribution can be potential sources of contamination. Rusty
pipes, lead solder and lead lines, and the chemicals we use in treating water can cause con-
tamination.

NOTES:
                                            Community Resource Group. Inc./Southern RCAP

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 Chapter II: Board Responsibilities Under SDWA
 What do small water system decision-makers really need to know to keep their water safe?

 More information is available about the Safe Drinking Water Act than you'd ever want or
 need to know. In response to our question, however, we believe there are four general
 areas of responsibility, and that if you know and understand these four areas, you'll be
 better able to make the decisions that will keep your system successful.

 Your Four Responsibilities

 • The Board is responsible for employing a certified operator with the correct level or clas-
  sification of certification for your system.

 • The Board is responsible for assigning the responsibility for testing water, making sure
  it's done at the right time, and reviewing the test  reports monthly.

• The Board is responsible for understanding the results of Sanitary Surveys.

• The Board is responsible for  knowing about the process for public notification if the
  system's water is unsafe.

Your State Department of Health officials can give you the answers to any questions you
may have about these topics in your state.

 Hiring an Operator

 As a Board member, it is not your responsibility to take the water samples, repair the pipes,
or put the chemicals in the water. It is your responsibility to hire someone who can, and
 make sure they're doing the job.

Most states require that operators be certified by the State Department of Health or some
other accrediting agency. This is to assure that anyone who supervises the system is com-
petent.

There are some important things you need to think about when you hire an operator:

 • If you have a good operator, your water system will be more likely to fulfill its re-
  sponsibility for providing safe water.

This means customers will have confidence in their water and be supportive. Once your sys-
 tem fails to comply with water quality standards, customers may lose confidence.
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We encourage you to hire the best qualified operator you can find.

• // costs a little money and time for an operator to become and stay certified —
  training,  licenses ($20-$30), etc.  We think it's money well spent.

A well-trained operator knows how to maintain the system, how to use chemicals the right
way, and many other things that will save money.

Encourage your operator to get all the training he can, and reimburse him for his expenses.
Your investment in operator training will save you money in the long run.

• Review the salary you pay your operator. One of the biggest problems small systems
  have is keeping good operators.

As soon  as they have the valuable experience they need, they get a better paying job and
leave.  You have to start all over again.

Try to  offer your operator a salary that's competitive with other systems like yours. It will
probably save you time, worry, and money in the long run.

• The  Board is responsible for making policies and procedures the operator should
  follow. Written procedures tell your operator what you expect him to do and make
  it possible for you to determine tf the job's being done.

• Support your operator by making sure there's enough money to make repairs and
  cover emergencies.  Your operator can't keep the system in good shape and the water
  safe without adequate funds.

Here are some important questions to ask your Health Department drinking  water official
about operator certification:

• What level of certification is required for a system the size and type of ours? How much
  does a  license cost?

• Is certification from other states accepted? If so,  under what conditions?

• Who does operator certification testing?

• Where do operators get training? How much does training cost?

• Is there "temporary" certification? If so, under what circumstances? What are the con-
  ditions of temporary certification? For how long can a system use a temporarily certified
  operator?

• Do operators have to renew their licenses? How often? Do they need extra training? If
  so, how much? How much does it cost to get  a license renewed?

• When  new regulations are passed, how do operators get up-to-date  information?

6                                         Community Resource Croup. Inc./Southern RCAP

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 Water Quality  Testing

 Your operator is responsible for taking water samples correctly and sending them to an ap-
 proved lab for analysis. He's also responsible for keeping the Board informed about the re-
 sults of water quality tests.

 The Board is responsible for making sure the operator is doing his job. Always have the
 operator report the  results of water samples at the monthly Board meeting.

 Here are some questions to ask your State Department of Health that will help you do your
job as a Board member:

 • Who should take the samples?

 • How often must samples be taken?

 • Who gets the report?

• How long do you  have to keep test reports in your records?

Sanitary Surveys

The Safe Drinking Water Act requires that states provide "Sanitary Surveys" to local water
systems. These surveys include information about the type of system you have, the
condition your operating plant is in, any potential sources of pollution near it, and many
other things. The Board should understand the results of these surveys and try to follow any
suggestions the Health Department people make as a result of the inspections.

Ask your Health Department the following questions:

• How often is a Sanitary Survey done?

• Can our system request one?

• Is the system notified before a survey is conducted?

• How do we get the results?

Public Notification

If water samples are bad, the Safe Drinking Water Act requires you to notify your customers
so they can take precautions to avoid getting sick.

The small system Board is responsible for knowing  what to do if public notification is
needed. This usually doesn't happen until several retests have been made. Your State Health
Department will always let your system know if notification is necessary and how to do it.
We'll talk more about Public Notification in Chapter VIII.
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Let's Review . . .

The small system Board is responsible for the following:

• Employing a certified operator;
• Water quality testing;
• Sanitary Surveys; and
• Public notification

The operator you hire will be expected to know these four major aspects of small system
operation in much more detail. However, the Board needs to know about them in general
terms so you can  supervise the operator effectively.

The operator makes the day-to-day decisions. The Board of Directors is responsible for
setting the policies of the system, the procedures for carrying them out, and the success of
the system over the long haul.

NOTES:
                                           Community Resource Croup. Inc./Southern RCAP

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Chapter III: The  Standard Monitoring Framework


Having your customers take their drinking water for granted -- day in and day out — is one
of the best compliments the Board and staff of a water system can get.

When people in your community don't have to think twice about water, it means you're
doing your part to protect the public health by providing them with an uninterrupted supply
of safe, fairly priced water. Your customers can visit almost any one of the 58,000
community water systems in the United States,  turn on a faucet and drink the water without
stopping to think — Should I drink this?  Will it make me sick?

It didn'tyitfr happen that you can drink safe water anywhere you go in the U.S. Thousands
of people — Board members like you, operators, bookkeepers, managers, sanitarians, en-
gineers, lawyers, regulators, researchers, hydrologists, equipment manufactures, and a
host of others, work hard every day so customers can take safe drinking water for granted.

We urge all of you to take some time out from balancing the budget and repairing the break
in the water main down on 4th Street, or whatever you're doing, to celebrate the contri-
bution  you make to providing safe drinking water to your community. It's a tough job:
Take five minutes; grab some coffee; put your feet up; celebrate your success! Providing
safe drinking water is work worth doing, and  you do it well.

Enough celebrating. Time to get back to work. The way things are changing in the public
drinking water industry, if you take more than a five minute break you'll have to run to catch
up!

One of the most significant changes we're seeing, is how we define the term "safe" drinking
water. There was a time when "safe" meant, safe from bacteriological contamination. But
times have changed.

During the last fifty years, our population has grown  from 1.32 to 246.1 million. More
people  mean more pollution,  and more potential for our water to get polluted. The same
industries  that provide our jobs  and produce the incredible variety of goods that contrib-
ute to our standard of living, also produce chemical and hazardous waste as by-products
during  the manufacturing process. Of course, agriculture, service industries, and individu-
als — you and I — also contribute to the problem. When waste, whatever its source, gets
in the water, it can contaminate.

Significant research advances have also taken  place in the scientific community's under-
standing of the long-term effects waterbome contaminants can have on humans. Techno-
logical  advances have improved our ability to  consistently detect even minute concentra-
tions of contaminants at the parts per million and parts per billion level in water.
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 Many of the chemical contaminants that are currently or soon will be regulated, are the kind
 you can't see, smell, or taste. But they can hurt you when you drink them over an aver-
 age lifetime — even at very, very low concentrations.

 Until 1986, only 22 contaminants out of over 700 contaminants found in drinking water
 were regulated under the Safe Drinking Water Act.*

 In 1986, Congress passed amendments to the Safe Drinking Water Act that directed the En-
 vironmental Protection Agency (EPA) to significantly increase drinking water regulations
 in order to protect the public health from drinking  water contaminants.  Among other
 things, the amendments called for the number of regulated contaminants to be increased
 from 22 to 83 by 1990. In addition, EPA was directed to issue new regulations on an ad-
 ditional 25 contaminants every three years, starting in 1991.

 On January 30, 1991, EPA issued the final Phase II regulations. These cover 33 Organic.
 Inorganic, Synthetic Organic, and Volatile Organic Chemicals and compounds. And  of
 course,  there are more to come.

 Every time new drinking water regulations go into effect, the definition of "safe" water
 changes and your job gets tougher. New regulations do mean more work and higher water
 quality monitoring costs for local water systems, but they also mean you can be even more
 confident that the water you're providing to your community is safe.

 The Monitoring Framework

 In an effort to simplify monitoring (testing) for all the new contaminants that will be regu-
 lated as time goes by, EPA has  developed a Standard Monitoring Framework to help
 simplify and coordinate when each water system will be required to have water samples
analyzed for specific regulated contaminants.  The framework works like this:

 1. EPA has established a 9 year monitoring cycle made up of three, 3-year compliance
   periods. The dates of the 3 compliance periods are:
                            9 Year Monitoring Cycle

           1st compliance period:  January 1, 1993, to December 31, 199S

           2nd compliance period:  January 1, 1996, to December 31, 1998

           3rd compliance period:  January 1, 1999, to December 31, 2001
               The next 9-year monitoring cycle starts January 1, 2002.
*DrinJdng Water: a community action guide. Concern. Inc. Washington . DC  1986


10                                        Community Resource Croup, Inc. /Southern KCAP

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2. From time to time, EPA will finalize regulations on one or a group of contaminants and
   publish the final rule in the Federal Register.

3.  Individual states have  18  months  to adopt  state  regulations covering the same
   contaminants. State regulations must be at least as  strict as the EPA final rule.  For
   individual water systems, the effective date of an EPA Final Rule is 18 months after it
   is published in the Federal Register.

4. Base Monitoring: Following the effective date of an EPA rule, community water sys-
   tems will be required to do initial (base) monitoring for a newly regulated contaminant
   during the next full 3-year compliance period. For example: for contaminants covered
   in the EPA January 30, 1991 Final Rule,  the effective date is July 30, 1992.

   Thus, base (initial) monitoring for contaminants covered by this Rule must take place
   in the 1 st 3-year period of the 9 year monitoring cycle (see # 1, page 10). Your state water
   regulatory agency will schedule which year during the 3-year period your system will
   be required to carry out base (initial) monitoring for those contaminants.

5. Repeat Monitoring: With  some exceptions, you'll be required to repeat monitoring
   (testing) for this same group of contaminants, once during every 3-year period (annu-
   ally for surface water systems). Repeat monitoring will take place in the same year of
   each succeeding 3-year compliance period.

6. Increased Monitoring: If water quality monitoring shows that a regulated contaminant
   exceeds the Maximum Contaminant  Level (MCL) established for that contaminant,
   you'll be required to immediately begin monitoring every 3 months for that contaminant
   until your state agency determines that the level of that contaminant in your  water is
   reliably and consistently less than the MCL.

   You'll probably also be required to install  additional treatment to reduce the amount of
   the contaminant in the water  to a level  below the  MCL. For some contaminants,
   increased testing will also be required if monitoring reveals that the contaminant exceeds
   a defined "trigger" level. Trigger levels are set at the level at  which the contaminant
   can be detected, or as a percent of the MCL.

7. Decreased Monitoring: States may issue  waivers reducing how often a system has to
   monitor for a particular contaminant or group of contaminants // it can be shown that
   a particular water system is not susceptible to that contaminant.

   Waivers must be based on either a review  of criteria established by the state, or a
   "vulnerability assessment" conducted by the system. That information will be used by
   the state as the basis for granting the waiver. Waivers must be renewed for each new 3-
   year compliance period.
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8. Vulnerability Assessments: To receive a waiver eliminating or reducing monitoring
   requirements for a particular contaminant, a community water system will have to prove
   that its water supply is not vulnerable to contamination by that contaminant.

   During the 18 months prior to the Phase II regulations taking effect in July, 1992, most
   state drinking water agencies will be issuing vulnerability assessment procedures and cri-
   teria for granting waivers to monitoring requirements. If you believe that your system
   is not susceptible to one or a group of chemicals being regulated — and can prove it by
   doing a vulnerability assessment — you may be able to save the cost of some expensive
   water quality testing and still protect your customers!

   Timing is important. Unless you're able to get a waiver before the beginning of the year
   in which you are scheduled to monitor  for that  contaminant, you'll be  required  to
   complete the base monitoring requirements. Contact your state drinking water agency
   for more information on how monitoring waivers will be handled in  your state.

NOTES:
12
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 Chapter IV: The Total Coliform Rule


 Diarrhea, cramps, nausea, possibly jaundice, and associated headaches
 and fatigue . . .

 These are some of the disease symptoms often associated with drinking contaminated water.

 As a Board member of your community's water system, you share responsibility for
 protecting your community's water supply by seeing that your system consistently meets
 state/federal water quality standards.

 On December 31,1990, water quality testing for public water supplies changed. The
 Total Coliform Rule revised the testing for microbiological contaminants that can
 cause waterborne disease.

 The Total Coliform Rule was developed under the 1986 Safe Drinking Water Amendments.
 It's one of many water quality Rules being put in place over the next several years to insure
 the water from your system is as safe as possible.

 As a Board member, you need to be familiar with the Total Coliform Rule since you're
 responsible for seeing that your system consistently meets the requirements of this new law.
 Compliance with the law provides your customers with added protection against water-
 borne disease.

About  Coliform Bacteria

 Coliform bacteria are fairly common. They're found in the intestines of warm blooded ani-
 mals (including humans), in plants, soil, air, and water. Coliform bacteria are not gener-
 ally  harmful themselves, but when found in water they indicate the water is polluted and
 may contain disease carrying organisms.

 Fecal coliform and £.  coti are two of the many different types of coliform bacteria. Their
presence in water is serious because they're usually associated with sewage or animal
 waste which may contain disease causing organisms.

 Summary of the  Rule

 Under the Total Coliform Rule, your system is required to collect monthly water samples.
 The samples must be analyzed by the state or in a state certified laboratory to determine the
 presence or absence of coliform bacteria in your water.

 Please Note: The information in this Chapter is based on the federal regulations. Implementation of the Total
 Coliform Rule in your state  may vary slightly from the information presented here. You'll need to follow the
 specific rules developed by  your state. For further information contact the state agency in charge of public
 water supplies.

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If no coliform bacteria are found in the water sample, it's passed the coliform test. Continue
performing routine monthly tests.

If coliform bacteria are found in your water sample, you're required to take additional
samples. If repeat samples are also  positive, your  water may be contaminated. You're
required to notify your state drinking  water regulatory agency and your customers. In
addition, you'll want to take immediate action to eliminate the cause of contamination.

Key Provisions of the Total Coliform Rule

Number of Samples: The number of water samples a system must take each month is based
on its size. The table below shows how  many monthly samples your system needs to take:

                       Routine Sampling Requirements

                 Population Served     Minimum Samples per Month

                 less  than 1000                1
                 1,001 to 2,500                2
                 2,501 to 3,300                3
                 3,301 to 4,100                4
                 4,101 to 4,900                5
                 4,901 ...

Remember: population served and number of customers are not the same. A system with
300 customers may  well have a population served of over 1000.

Written Sampling Plan: The Total Coliform Rule requires a written Sampling  Plan
showing that routine monthly water samples will be collected at sites which are represen-
tative of the water throughout your system. The plan is subject to review by the state agency
responsible for public water supplies.

The Sampling Plan must include:

1. The number of monthly samples required, based on system size (see table).

2. A list of sampling sites throughout the distribution system. Number each sampling site
   and provide:
      a. address and location of site;
      b. water main size at the sampling point;
      c. water pressure at  the sampling point.
3. A county road map or map of your system identifying each site.

Note: If your system uses surface water (from a lake, river, etc.) or groundwater under di-
rect influence of surface water (spring, shallow well, etc.) special monitoring requirements
apply. Contact your state regulatory  agency for information.
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Repeat Sampling: If a routine monthly sample is total coliform-positive (coliform bacteria
are present in the water sample), you must collect a set of repeat samples within 24 hours
of being notified of the positive result. Meanwhile, the laboratory will further analyze
your coliform-positive routine sample to see if fecal or E. coli bacteria are present.

The number of repeat samples you must collect depends on how many routine samples you
take each month:

• If you collect two or more routine sample per month. you're required to collect a minimum
of 3 repeat samples for each routine water sample testing coliform-positive:

1. One must be at the original sampling tap where the coliform-positive sample was taken,
2. one must be taken within 5 connections upstream from the original sampling site, and
3. one must be taken within 5 connections downstream.

• If you collect only one routine sample per month, you're required to collect a minimum
of 4 repeat samples:

1. One must be at the original sampling tap where the coliform-positive sample was taken,
2. one must be taken within 5 customer service connections upstream from the original sam-
  pling site,
3. one within 5 connections downstream, and
4. one from elsewhere in the distribution system.

If Repeat Samples are Coliform Positive: If any repeat samples are coliform-positive, your
system is in violation of the Total Coliform Rule, and must notify the state drinking water
regulatory agency according to the timetable set out in the  Violations section  below.
Meanwhile to protect your customers, you need to:

1. Determine the cause of contamination and correct the problem immediately;
2. Continue to take repeat samples every 24 hours at the same sites where the initial repeat
  samples were taken until one complete set of repeat samples is free of coliform.

We suggest you ask your state regulatory agency for guidance and assistance with the
problem at this time if you haven't already done so.

Sampling in the Month Following Detection of Coliform in a Sample: If you're required
to collect less than five routine samples per month and if any one of your samples tests
positive for coliform, but all repeat samples are free of coliform bacteria, no more samples
are required that month.

However, the next month you're required to collect 5 routine samples based on your
sampling plan unless the  state visits your system and determines that whatever caused the
coliform-positive sample has been corrected.
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 Types of Violations and Notifying the State: There are two types of violations under the
 Total Coliform Rule. Violations are either Non-Acute or Acute. If you violate the rule
 you 're required by law to notify your state drinking water regulatory agency.
            Type of Violation
     Timetable for Notifying State
Non-Acute (possible health risk):

•failure to take required samples or repeat  within 10 days after discovering violation
 samples, or                       	

•more than  one routine or repeat water  by the end of the next business day following
 sample is coliform-ppsitive, but neither is  receipt of lab report
 fecal or E. co//-positive
Acute (possible serious health risk):

•a repeat sample is fecal or E. co//-positive,
 or
•a routine sample is fecal or E. co//-positive
 and the repeat sample is coliform-positive
by the end of the next business day following
receipt of lab report
If your system is guilty of a Non-Acute Violation, you're required to notify customers by
newspaper within  14 days and provide notice by direct mail or hand delivery within 45
days.

Public Notification: Any time you violate the Total Coliform Rule, you're required to
notify your customers so they can take necessary precautions to protect themselves against
possible waterborne disease.  If your community is not served by a newspaper of general
circulation, you're required to provide notice by hand delivery or posting of notice within
14 days.

If your system is guilty of an Acute Violation involving possible serious risk to human
health, you're required to notify customers by broadcast media (radio or TV) within 72
hours and by general circulation newspaper within 14 days and provide notice by direct
mail or hand delivery within 45 days. If your area is not served by a newspaper of general
circulation, you're required to provide notice by hand delivery or posting within 72 hours
of the violation.

Sanitary Survey: All community water systems are required to have a Sanitary Survey of
their systems completed by June 29,1994. Only the state, or an agent approved by the state,
can conduct the survey. Your state will let you know how it plans to handle this requirement.

The Total Coliform Rule is complicated, as you can see. If you have any questions, contact
your  state public water regulatory agency for assistance.
16
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                .   Community Water Bulletin
               Total  Coliform Rule Check List
Compliance with the Total Coliform Rule is an important step toward ensuring that your
system's customers won't suffer the symptoms of waterborne disease. Use this checklist
to ensure your system is or will be in compliance with the new Total Coliform Rule:
   1
  3
  5
  7
  9
Do you have a copy of the regulations your state adopted to
implement the Total Coliform Rule? If not, write or call
your state regulatory agency for a copy. Discuss the Rules
with your operator at a Board meeting.
           2
         Have you developed and adopted a written sam-
         pling plan?
Has the state reviewed and approved your sampling plan?
           4
         Does  your operator understand how to properly take
         the samples, the number of samples required, when to
         take the samples, and where to send them for testing?
Does  your operator have the necessary containers and
packaging for sending the samples to the testing laboratory?
           6
         Do you require your operator to report monthly to the
         Board 1) that the samples were taken according to the
         sampling site plan, and 2) what the laboratory test
         results were?
Is your operator requried to immediately contact the Board
president if a routine sample is coliform-positive?
            8
          Is the Board president notified by the operator when
          re-sampling is necessary, that it was done according
          to the sampling site plan, and the results of the re-sam-
          pling when received from the laboratory?
 Has your Board developed a plan for how you will notify the
 public if necessary and who'll be responsible for carrying
 it out?
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 NOTES:
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Chapter V: The Surface Water Treatment Rule
If your system uses water from a lake, reservoir, or river (surface water) as its water source,
or if your system's well is directly influenced by surface water, you need to be familiar with
the new requirements that will be phased in over the next several years.

The new surface water rules mean additional protection for your customers, but they also
mean additional work for the Board. As a Board, you're responsible for protecting your
community from waterborne disease.  You carry out this responsibility by making sure
your system is operating in a businesslike manner and in compliance with the various state
and federal regulations.

If your system uses surface water, compliance with the new rules may require improve-
ments to your surface water treatment plant. Planning, engineering design, financing and
constructing all take time. The time to start is now. The place to start is understanding why
treatment is often necessary and the basics of how surface water is treated. In this Chapter,
we'll  explore how the water gets polluted and basic treatment processes. In the next
Chapter, we'll talk about the regulations.

How Surface Water Gets Polluted

Water for community water systems comes from either groundwater (wells) or surface
water — such as a river or lake.  Surface water is easily polluted. Rain washes soil, fertil-
izers, pesticides, and animal waste from farming into nearby rivers and lakes. In cities and
towns, rain washes oil, gasoline and dirt off the streets and into local bodies of water.

Chemical pollution is also a problem. Even the  most sophisticated treatment processes used
by industry and municipalities can fail to remove toxics in water discharged into our rivers.
Finally, naturally occurring harmful bacteria, and disease carrying viruses and organisms
can also contaminate surface water used as a water source by community water systems.

Groundwater is also at risk because polluted surface water can seep through the soil into
groundwater and contaminate it. Community water systems using groundwater from im-
properly constructed wells, shallow wells, or  springs may find that their water quality is
directly influenced by nearby surface water and  may be classified as surface water.

Because surface water is easily contaminated, it generally requires more treatment than
groundwater. If your system uses surface water, good decision-making requires an under-
standing of the  basic process.

On the next pages we'll talk about the Water Treatment Process step-by-step as outlined on
the Chart on page 20.
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                 The Water Treatment Process

A. Raw Water
       B. Intake and Screening
             C. Prechlorination
                    D.  Coagulation
                        (Flash Mix)

                            . Flocculation
                                 F. Sedimentation
                                 X   G. Filtration
                                             H. Disinfection
                                                   I.  Corrosion Control
                                                         J. Water Storage
Note: Not all systems use all the steps in the Water
Treatment model shown here. If you have ques-
tions ask your certified operator to explain the
process used by your system.
 A. Raw Water

 The water in the river, lake or reservoir that serves as a source for your water system is
 called raw water. Often raw water looks cloudy rather than clear, has tiny particles floating
 in  it (turbudity*),  has some color, and some degree of contamination. The treatment
 process is a series of steps designed to turn raw water into safe and pleasant tasting drinking
 water.

 B. Intake and Screening
                                                       *.
 Think of the intake structure as a giant straw in a glass of ice tea. The tea is the raw water,
 the glass is the reservoir or lake, and you're the suction pump. Raw water enters the
 treatment plant through an intake structure. The intake opening is usually located at the level
 in the reservoir or river that produces the best water, and has an adjustable level control so
 water can be pumped into the treatment plant even during periods of drought when water
 levels are low. The intake opening has screens to keep out fish and trash. Pumps are used
 to deliver raw water to the treatment plant.
 *Turbidity is measured by looking at a light through a water sample and measuring how
 much light is cut off. Turbidity is measured in Nephelometric Turbidity Units (NTU).
 20
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Every treatment facility should have some kind of accurate flow meter to measure the
amount of watef entering the plant at any moment and the total quantity entering the plant.
In order to determine the proper amount of chemicals to add during the treatment process,
the operator must have accurate information about how much water is entering the plant.

C. Prechlorination
(Pre-CLOR-in-A-shun)

The chemical chlorine is often added to the raw water as it enters the treatment plant. At
the proper dosage, chlorine acts as a disinfectant to kill disease causing micro-organisms
in the water. It also helps control the growth of algae (pronounced AL-g) and slime in the
treatment plant, reduces some bad tastes and odors, and improves other treatment processes
such as coagulation. Chlorinating the water as it enters the plant means the chlorine is  in
contact with the water the entire time it's moving through the treatment process. This added
contact time may  contribute to better disinfection.

Raw water is full of tiny impurities. Some are heavy enough that they settle to the bottom
when the water movement is slowed down. Other particles, such as bacteria, silt, and tiny
clay particles, don't naturally  settle to the bottom. These are called suspended solids.  A
two part treatment process  called Coagulation and Flocculation is used to remove sus-
pended particles from the water.

D. Coagulation
(co-AGG-u-LAY-shun)

Coagulation is the process of using chemicals to attract the tiny particles to each other  to
form larger particles. For the  chemicals to work they must come in contact with each  of
the suspended particles.  This is accomplished by rapidly mixing the chemicals and water
together in a basin using paddles, propellers, or an area of rapid turbulence. This is called
Flash Mixing.

Coagulant chemicals used include: Aluminum Sulfate, Ferric Sulfate, and Ferric Chloride.
Additional coagulant aids, called polymers, are often used to improve coagulation.

E. Flocculation (flock-u-LAY-shun)

Flash mixing of water and coagulant chemicals results in particles that are still quite small.
These must be gathered together to form larger, denser, tougher particles called floe (like
sheep bunched together form a flock) that can be easily removed in the sedimentation and
filtration processes. Flocculation is accomplished by slow, gentle mixing of the water in
a basin over a period of time (usually 30 - 45 minutes) which causes the small coagulated
particles to collide and form the floe. To insure adequate time (called retention time) for
flocculation, basins are often divided into three compartments. By the time the water passes
through the third  compartment, sizable floe .has formed.
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 F. Sedimentation (sed-ah-men-TAA-shun)

 The floe-filled water from the flocculation basin then flows into a sedimentation tank where
 perforated baffle walls slow the water until it's only moving 1 to 3 feet per minute. Usu-
 ally it takes the water 2-6 hours to move from the inlet to the outlet of the sedimentation
 tank. This retention time allows the floe and other suspended matter to settle to the bottom.

 The layer of material that settles on the bottom of the sedimentation tank is called sludge.
 Sludge is removed from the basin using a scraper and vacuum device on a regular basis.
 The sedimentation tank outlet is designed to allow only water at the surface (where it's
 clearest) to flow through V-shaped notches into troughs and then out of the tank for further
 filtration.

 G. Filtration (fill-TRAY-shun)

 When water leaves the sedimentation basin, all but the smallest suspended particles should
 have been removed.  The filtration process is designed to remove additional very small sus-
 pended solids and floe not removed during sedimentation. It also helps remove potentially
 harmful living organisms such as bacteria, protozoa (pro-tuh-ZO-uh) viruses and cysts.

 Water enters the top of the filter tank and flows down through 18"  to 30" (or more) of filter
 material. The filtered water is collected in a series of perforated  water pipes laid under a
 bed of graded gravel which supports the filter material.

 When the filter material becomes clogged with the suspended solids removed from the
 water, the media has to be cleaned by a process called backwashing. Backwashing is done
 by pumping clean water back through the perforated water pipes on the bottom of the filter
 bed and up through the filter material. This causes the individual grains of the filter ma-
 terial to separate, bump against each other, and knock the built-up dirt loose to be carried
 away through drain troughs located near the top of the filter beds.

 Filtration is the process of passing water through a bed made up of one or more porous
 granular materials such as fitter sand or anthracite (AN-thra~site) coal.

 This process, carried out in either open filter beds or in closed tanks under pressure, is
 called rapid sand or mixed media filtration. The filtration method described above is used
 in about 90 % of the surface water treatment plants in the U. S. The other 10 % use slow sand
 filters or diatomaceous earth filters.

 H. Disinfection

 All surface  water must be disinfected  to insure that it's free of all harmful organisms.
 Coagulation, flocculation, sedimentation, and filtration all help by physically removing
 potentially harmful organisms  from the water. Disinfection completes  the job.  Ozone,
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iodine, and ultraviolet radiation are used occasionally, but most water supplies use the
chemical chlorine for disinfection.

The effectiveness of chlorine as a disinfectant is determined by the concentration of the
chlorine, the length of time it's in contact with the water, the pH of the water, water tem-
perature, clarity of water, and how completely the chlorine is mixed into the water. A chlo-
rine feeder is used to inject it into the water after it's left the filter bed and is on its way to
the clear well.

Chlorine residual

Most water will contain some microscopic amounts of substances such as manganese, iron,
sulfides, and organic matter. When chlorine is added to the water, it reacts first with these
substances and is not available for effective disinfection.

When enough chlorine is added to meet the chlorine demands of all these substances in the
water, any remaining chlorine in the water is available to act as an effective disinfectant and
is called free available chlorine residual. Public water supplies normally try to add enough
chlorine to maintain a free available chlorine residual in the water.

I. Corrosion Control

If you've ever seen a rusted pipe, you've seen what water often does when it comes in
contact with metal.  The corrosion (rust) is  the result of an electro-chemical reaction
between water and metal that can slowly dissolve the metal storage tanks and pipelines in
your water system and affect the quality and taste of your water.

The first line of defense against corrosion is to use materials throughout the system that are
resistant to corrosion such as plastic, copper, and coated materials.

The second line of defense is to use chemicals such as lime, soda ash, and caustic soda, to
adjust the pH. This helps reduce the corrosiveness of the water. These chemicals are usu-
ally dissolved in water and injected into the water as a solution.

Corrosion control chemicals are added after the filtration because they tend to clog the filter
and interfere with the coagulation and flocculation processes by raising the pH of the water.

J. Water Storage

Treated surface water is stored at the treatment plant in a clear well. The clear well is sim-
ply a reservoir for storing the filtered water. Water usage in your system varies through-
out the day. The clear well is drawn down during periods of high demand and refilled dur-
ing periods of low demand by water coming through the filtration system. This allows your
filtration system to operate efficiently at a constant rate, despite varying demand for water
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 by your custome'rs. The clear well also allows you to continue providing water while
 backflushing your filters or making repairs to the treatment plant. Water is pumped from
 the clear well directly into the distribution system or elevated storage.

 Summary

 In this Chapter, we've given you a quick overview of the basic processes used to filter and
 disinfect surface water. If your system uses surface water and operates a surface water treat-
 ment plant, we'd recommend that you spend some time with your operator becoming
 familiar with how coagulation, flocculation, sedimentation, filtration, and disinfection is
 carried out at your treatment plant. It'll  help you  make better decisions  regarding the
 filtration, turbidity, and disinfection rules which are the subject of the next Chapter.

 NOTES:
24
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 Chapter VI:. Filtration, Turbidity, and Disinfection Rules
 If your community water system uses water from a lake, reservoir, or river as its water
 source, or if you get your water from a well that's directly influenced by surface water, you
 need to be familiar with the requirements for surface water flit ration, disinfection, and
 turbidity monitoring. These EPA rules became final on December 31, 1990, and will be
 phased in over the next several years.

 You need to start now to determine if your system will need to install or improve filtration,
 disinfection, and turbidity monitoring to meet the requirements. Planning, engineering de-
 sign, financing, and constructing all take time. This Chapter can help you determine what
 your system will need to do to be in compliance with the regulations.

 First, some words you'll need to know:

 Disinfection: A water treatment process that uses chlorine or similar agents to kill harmful
 organisms that may be in water.  To insure adequate disinfection, a very small, or residual
 amount of the disinfectant should be detectable in the water throughout the distribution
 system.

 Giardia lamblia:  Waterborne parasites  that can cause  serious reoccurring  intestinal
 problems including diarrhea, nausea, vomiting,  fever, fatigue, and cramps.

 Legionella:  A type of bacteria, some species of which cause a type of pneumonia called
 Legionnaires Disease.

 Turbidity: Tiny panicles suspended in the water that make it look muddy or cloudy.
 Turbidity is measured by looking at a light through a water sample and measuring how
 much light is cut off. Turbidity is measured in Nephelometric Turbidity Units (NTU).

 Virus: a virus of fecal  (animal waste) origin and which is infectious to humans.

 Groundwater Wells: Systems using groundwater (wells) under the direct influence of sur-
face water are also covered by these regulations. Between now and June 29, 1994, your
 state will determine, for each water system served by a groundwater source, whether that
 source is under direct influence of surface water. If the state determines your well is directly
 influenced by surface  water,  you'll be required to comply  with all the  surface water
 regulations.  Things that may indicate that groundwater is directly influenced by surface
 water include:

 • occasional insects or  algae in the water
 • significant occurrence of microorganisms or harmful bacteria such as Giardia lamblia
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 • rapid shifts in-water characteristics, such as turbidity, temperature, or pH similar to
  what's happening to nearby surface water
 • use of shallow wells, springs, cisterns,  hand-dug or poorly constructed wells

 If you suspect that your well is directly influenced by surface water, do the following:

 1. Contact your state regulatory agency and ask if they feel your groundwater source
   might be under the direct influence of surface water. If so, ask them for guidance so
   you can start planning for necessary improvements.

 2. If your groundwater is determined by the state to be under the influence of surface
   water, start planning, NOW!

 Disinfection Requirement

 All surface water systems and systems using groundwater sources under the direct influ-
 ence of surface water, will be required to provide disinfection treatment.

 Filtration Requirements

 Avoiding Filtration: Constructing surface water filtration isn't cheap. To avoid filtration
 you need to have very clean and protected source waters, low coliform levels and low
 turbidity, along with an effective  watershed protection program.

 You must be able to meet ALL the following or you'll be required to install filtration:

 1. On an ongoing basis and prior to disinfection, your system must have a fecal coliform
   count in the source water that's less than 20/100ml in 90% of the samples, ora total coli-
   form concentration of less than 100/100ml in at least 90% of the water samples; and

2. Your system must consistently  have a turbidity of less than 5 NTU based on continuous
   sampling (maximum 4 hour intervals). Under certain conditions, a system may exceed
   5 NTU occasionally and still avoid filtration; and

 3.  Your system must have its disinfection practices approved by the state, and

 4. Your system must maintain a disinfection residual in water entering the distribution sys-
   tem  of at least 0.2  mg/1; and

 5. The system must demonstrate that its disinfection practices consistently remove and/or
   inactivate 99.9 % of Giardia cysts and 99.99 % of viruses. If your system fails to achieve
   the required inactivation any  two or more days in a month, it's in violation of the
   treatment requirement. Two violations in a 12 month period require filtration; and
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 6. The system must maintain a detectable level of disinfectant in at least 95 % of monthly
   water samples taken from throughout the distribution system; and

 7. The system must establish and maintain an effective, state approved, watershed control
   program; and

 8. The system must have an annual, on-site inspection by the state of its watershed control
   program; and

 9. The system can't have been identified as the source of any waterbome disease outbreak;
   and

 10. The system must have been in compliance with the MCL for Total Coliforms for 11
    of the last 12 months it served water, and

 11. The system must sample for Total Coliforms, within 24 hours, at or before the first cus-
    tomer, each day the turbidity exceeds 1 NTU; and

 12. Your system must be able to meet all of the above criteria by June 29, 1993. If, after
    this date, your system fails to meet any of the above criteria,  you'll have 18 months
    from the time of the failure to install the required- filtration.

 What to Do if You Can't Avoid Filtration

 Meeting the above criteria for avoiding filtration won't be easy for small systems.  EPA
 estimates that only about 16% of currently unaltered surface water systems will be able to
 meet the requirements for avoiding filtration. If you're currently an  unfiltered system, and,
 after reviewing the above criteria, you determine you probably won't be allowed to
 continue as an unfiltered system,  what should you do?

 Actually, there are a number of alternatives you should compare in order to find the least
costly solution. When you compare costs, be sure to consider both the initial capital cost
 (construction cost) and the long-term operating costs (electric power use, equipment repair
 and maintenance, and  highly skilled operators can make for a very expensive solution in
 the long run!) Some alternative solutions to consider are listed below:

 A. Purchase water from a nearby system. This solution could save you money, time, and
   effort. If purchasing water is an option, be sure the system you're planning to buy from
   is well-run and financially sound. Be sure the system has a history of complying with
   water quality regulations. Insist that future cost increases be based fairly on increased
   costs of producing treated water.
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 B. Switch to a groundwater source. If groundwater of reasonable quality and quantity is
    available in your area, it may be less costly to construct and operate wells than install
    appropriate surface water treatment. Groundwater that's not directly influenced by
    surface water generally  requires less treatment than surface water.  Talk  to nearby
    groundwater  systems to get an idea of the costs and problems involved. Obtain
    professional help in evaluating potential groundwater sources and their capacity to meet
    existing and future needs.

 C. Install a slow sand filtration system. This method is simple to design, and capital and
    operating costs are generally lower. Gravity forces the raw water to flow slowly (one
    pint or less per minute/per square foot) through a 15" to 48" deep bed of filter sand. The
    particles are  removed by straining, adsorption, and  biological action. The filter is
    cleaned by  removing the top l/i" of sand when it becomes clogged.

 D. Install a package treatment plant. A package plant is a manufactured unit engineered
    to all of the conventional treatment processes including coagulation, flocculation, sedi-
    mentation, and filtration needed to treat your specific source water to the required water
    quality standards. They're generally reliable if they're properly  operated and  main-
    tained, and take  a fairly short time to install.

 E. Install a diatomaceous earth filter. (DY-uh-tow-MAY-shuss) A very fine sand-like
    material made from the silica skeletons of microscopic algae. Diatomaceous earth is
    added as a thin,  watery mud  (slurry)  to water being treated in  pressurized or
    unpressurized tanks. "Earth" collects on screens or finely perforated pipes and water is
    strained as it passes through the diatomaceous earth coating the screens. They're small,
    easy to operate,  and relatively inexpensive.

 F. Install direct  treatment. Direct filtration treatment uses the same processes as conven-
    tional treatment, omitting only sedimentation. Direct  treatment is feasible only when
    levels of turbidity, color, and coliform organisms are low in the source water. Chemical
    filter aids are often used.

 G. Install conventional  treatment. See Chapter V for  information about conventional
    filtration.

// You Must  Filter

 If you must filter, your surface water treatment system must be able to meet the following
 criteria to insure that your water is being treated adequately to protect against  illness:

 1. Treatment must be optimized to achieve the lowest turbidities possible at all times, and

 2. You must be able to maintain a disinfection residual in water entering the distribution
    system of at least 0.2 mg/1, and
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3. Your surface water treatment must be able to achieve removal and/or inactivate 99.9%
    of Giardia cysts and 99.99% of viruses, and

4. Your system must maintain a detectable level of disinfectant in at least 95% of monthly
    samples taken from throughout the distribution system, and

5. You must monitor turbidity every four hours if you serve more than 500 people (approxi-
    mately  150 customers or more). If you use technologies other than conventional treat-
    ment, direct filtration, slow sand filtration, or diatomaceous earth filtration, the state
    may reduce monitoring requirements to one per day. For systems serving fewer than
    500 people, the state may reduce turbidity monitoring to once a day regardless of the
    type filtration used, and

6. Depending on the type of filtration treatment used, your filtered water turbidity  level
   must be  equal to or less than 0.5 NTU in 95% of the samples taken every month, and

7. Any time turbidity exceeds 5 NTU, your system is required to notify the state, not later
   than the end of the next business day. (The state may allow turbidity up to 1 NTU, if
   it determines a system  is achieving the required 99.9% inactivation  of Giardia and
   viruses at the higher turbidity level and after considering certain other factors), and

8. If you use slow sand filtration or diatomaceous earth filtration, you're required to main-
   tain a turbidity of 1 NTU, or less, in 95 % of the samples. The state may allow a turbidity
   value of between 1 and 5 NTU in 95% of the samples of these systems if it determines
   that these higher turbidity levels don't interfere with disinfection.

Whether you filter or not, your system will also have to meet these requirements:

Reporting Requirements

Reporting requirements are different for filtered and unfiltered systems. If your system is
required to filter, you'll be required to report monthly on:

1. filtered water turbidity,
2. disinfection residual in water entering the distribution system,
3. disinfection residual concentrations in the distribution system,
4. outbreaks of waterbome disease,
5. turbidity measurements over 5 NTU, and
6. any period over four hours that you failed to maintain a disinfectant residual of 0.2
   mg/1 at the point of entry to the distribution system.

If your system is not required to filter, check with your state agency  about reporting
requirements.
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 Operator Requirements

 All systems covered by the Surface Water Treatment Rule must be operated by personnel
 that meet qualifications specified by the state. Qualifications will vary depending on the size
 and type system.

 Public Notification

 Violations of the Surface Water Regulations are subject to the Public Notification Require-
 ments outlined in Chapter  VIII. Violations of a treatment technique requirement are
 classified as Tier  1 Violations. Violations of testing procedures and monitoring require-
 ments are Tier 2 Violations under the Public Notification  Requirements.

 Variances and Exemptions

 No variances are allowed under the filtration and disinfection requirements. No exemptions
 are allowed from the requirement to provide disinfection for surface water systems.
 Exemptions may be granted to reduce the degree of disinfection required. Exemptions from
 the filtration rule are also available under certain circumstances for limited periods of time.

 More regulations are coming ...

 Don't be fooled into thinking you can wait a couple more years before thinking about how
 these  rules will affect your system. Will you need to construct a water filtering system?
 Improve disinfection? Install turbidity monitoring equipment? Upgrade operator qualifica-
 tion and reporting methods?  Now is the  time to start planning for  necessary system
 improvements to protect your  community's drinking water.

 Note: This chapter is based on  information published by EPA in the June 29,  1989 Federal
 Register, pages 27486-27541. Any questions about  specific points should be directed to
 your state drinking water primacy agency.

               Timetable  for Implementation of the Surface Water
               Filtration, Disinfection, and Turbidity Requirements

 December 31, 1990  EPA Final Rule on Surface Water Filtration, Disinfection and
                    Turbidity goes  into effect
June 30, 1992
State must adopt regulations implementing Final Rules on Surface
Water Filtration, Disinfection and Turbidity
June 30, 1993       State must determine which systems using surface water must filter

December 31, 1994  Systems required to filter must have filtration system installed

December 31, 1995  State must determine which community water systems are using
                    groundwater sources that are under the direct influence of surface
                    water and will be required to comply with these regulations.
30
                      Community Resource Croup. Inc./Southern RCAP

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 Chapter VII: Regulated Chemical Contaminants


 Water = 2 parts hydrogen + 1 part oxygen +  ???
            V
 The big "?" in the equation above is any of 700 known contaminants of drinking water.
 It means that, unless you're paying careful attention to water quality, the water you're pro-
 viding your customers could be contaminated. Some contaminants have immediate effects.
 Others show up after people have been exposed to them for a long time. An important part
 of your job is to protect your community from health hazards in your water.

 Modern technology makes it possible to identify many dangerous chemical contaminants
 and to test water supplies for them. These contaminants can be harmful to the long-term
 health of human beings. We know how to test for them and how to treat water to remove
 them  from drinking water.

 Testing is the key to providing safe water to your customers.  In Chapter III, we told you
 about EPA's Standard Monitoring Framework — the testing schedule for contaminants
 your system will follow in the future. When you look at the charts on the next pages, you'll
 begin to understand why testing is so critical. Compliance with testing schedules means
 doing your job as a small system Board  member. It's the best way to protect the public
 health.

 You can fulfill your responsibility to assure your customers safe drinking water by com-
plying with testing requirements and the Monitoring Framework timetable.

 Study the  list  of chemicals on  the next pages,  and notice  the possible sources  of
 contamination and what effects they can have on health. Think about whether these sources
 of contamination exist in your community. Maybe you don't have a fertilizer manufacturer
 nearby, however, you and your neighbors are the "end users"  of these products. Toxic
 chemicals can leach into the soil and eventually contaminate groundwater when you dis-
 pose of them in landfills or use them improperly.

 Notice the MCL's* in the chart for the various contaminants. These are very small amounts
 — as small as 1 milligram per liter (mg/1).  A milligram is one thousandth of a gram. A gram
 is about 1/3rd of an ounce. A liter is a little bigger than a quart. These tiny amounts can
 contaminate your water supply and be hazardous to human health!  That's why these
 chemicals are hidden dangers. For the most part, you won't be able to taste,  see, or smell
 them.

 Your state drinking water agency will notify you when you need to begin testing. Make
 compliance with testing schedules a top priority of your system.
* Maximum Contaminant Level; If a regulated contaminant exceeds the MCL, your system is in violation
of SOW A regulations.

Community Resource Croup. Inc./Southern RCAP                                         31

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U)
K>
                                 Primary  Drinking  Water Contaminants'
Contaminant    MCL
                                                       Health Effects
                                                                                                    Possible Sources of Contaminal ion
?
I
       Microbiological
       Total cdliforms
       (coliform hacleria.
       fecal colifumt and
       other bacteria)

       Turbidity

       Inorganics
       Arsenic
Asbestos


Barium

Cadmium


Chromium


Copper

Fluoride

Lead


Mercury



Nitrite

Nitrate
                          I per 100 not necessarily disease producing, but can be indicators of organisms   human and animal fecal matter
                            mL    thai can cause various gastroenteric infections; dysentery, hepatitis,
                                   typhoid fever, cholera and others. Interferes with disinfection process
                           l-STu  interferes with disinfection
 0.05   dermal and nervous system


7 MFL  benign tumors


  1.0    circulatory system damage

 0 005.  chokjng,  vomiting, abdominal pain, kidney damage, chest pain,
 mg/l   diarrhea,  possibly brochopneumonia; severe pain in joints

  0.1    severe irritation of the gastrointestinal tract, liver & kidney damage,
        damage to the circulatory system; possible carcinogen

  *    gastrointestinal effects

  4    skeletal damage

  ••    central nervous system damage, kidney effects, highly toxic to infants
        and pregnant women

 0.002   severe nausea, vomiting, diarrhea, kidney damage, muscle tremors
        and spasms, personality changes, depression, irralibilily, nervous-
        ness

   I     Blue babies (melhemoglobinemia)

  10    Blue babies (methemoglohinemia)
                                                                                      erosion, runoff, discharge


                                                                                      geological; pesticide residues; industrial waste; smeller
                                                                                      operation

                                                                                      heal resistant insulators; furnace and hot pipe coverings;
                                                                                      brake linings; fireproof clothing

                                                                                      geological

                                                                                      sofl solder for aluminum; electroplating; photoelectric
                                                                                      cells; NiCd storage batteries; fillings in dentistry

                                                                                      chrome-steel or chrome-nickel-steel (stainless steel);
                                                                                      chromeplating of other metals

                                                                                      geological; pipes

                                                                                      geological; additive to drinking water, toothpaste

                                                                                      leaches from lead pipe and lead based solder pipe joints
                                                                                               barometers, thermometers; flourescenl lamps, pharma-
                                                                                               ceuticals; agricultural chemicals; watch batteries
                                                                                               fertilizers; as preservatives in meals and other foods

                                                                                               fertilizers; as preservatives in meals and other foods

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o
i
f
r»
!
   Contaminant

Total Nitrite/Nitrate

Selenium



Silver

Organic!
Alachlor (Lasso)

Atrazine

Carbofuran

Chlordane
                              MCL                       Health Effects

                                10    Blue babies (melhemoglobinemia)
                                                                                                            Possible Sources of Contamination

                                                                                                      fertilizers; as preservatives in meats and other foods
                              0.05    nervousness, depression, gastrointestinal disturbances (has produced   processing photographs; colored glass, electrical instru-
        liver damage in laboratory animals)


0.005   skin discoloration (argyria)

                           4
0.002   probable carcinogen

0.003   damages reproductive and cardiac systems

 0.04   damages reproductive and nervous systems

0.002   probable carcinogen
        Dibromochloropropane 0.0002   probable carcinogen
       2.4-D

       2,4.5 TP(Silvex)

       Endrin

       Epichlorohydrin
                              0.07   damages liver, kidneys, nervous system

                              0.01   damages liver, kidneys

                             0.0002  numerous system/kidney effects

                            0.01 % @ damages liver, kidneys, lungs; probable carcinogen
                            20 mg/l
        Elhylene Dibromide   0.00005  damages liver, kidneys, probable carcinogen
        Heplachlor
                             0.0004  probable carcinogen
        Meplachlor epoxide    0.0002   probable carcinogen

        Lindane
                                                                                                      ments; as a vulcanizing agent in processing rubber;
                                                                                                      mixed with other metals to form alloys

                                                                                                      geological, mining
herbicide

herbicide

insecticide, nemalocide

banned since 1975; formerly used as an insecticide

soil fumiganl, nemalocide

herbicide

herbicide

insecticide used on cotton, small grains, orchards

solvent for natural and synthetic resins, gums, paints,
nail enamel; as a flocculant to reduce turbidity

fumiganl; component in anti-knock gasolines; use was
recently restricted

banned since 1988; formerly used to control termites

residue found in vegetation treated with heptachlor
                             0.0002  damages nervous system, liver, kidneys, causes dizziness, tremors,   insecticides
                                      nausea, vomiting
        Melhoxychlor
                              0.04   damages nervous system, liver, kidneys
            I List includes Phase II contaminants
            2 Million fibers per liter
            3 Milligrams per liter
                                                        4 Can cause cancer
                                                        • 10% of samples exceed 1.3 mg/l requries treatment
                                                       •• 10% of samples exceed .015 mg/l requires treatment
insecticide to control mosquito larvae, horse flys, other
insects on cattle and horses

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   Contaminant    MCL                        Health Effects

                      0.0005   probable carcinogen


Total Trihalomethanes   0.10    pooible carcinogen
Polychlorinated
Biphenyls (PCBs)
Toxapbene            0.003   probable carcinogen; causes tremors, convulsions

Volatile Organic!
Benzene
                      0.005   carcinogen
Carbon letrachloride   0.005   possible carcinogen


o-Dichlorobenzene       0.6    damages nervous system, lungs, liver and kidneys

para Dichlorobenzene  0.07S   possible carcinogen



cis- 1 .2 dichloroeihylene 0.07    damages nervous system and circulatory systems, liver

trans- 1 ,2 dichloroeth-    0. 1    damages nervous and circulatory systems, liver
ylene

1 .2 Dichloroethane    0.005   possible carcinogen

I . I Dichloroethylene  0.007   liver/kidney damage

1,2 Dichloropropane  0.005   probable carcinogen**', damages lungs, liver, kidneys
 Elhylbenzene
                        0.7    damages kidney, liver, nervous system
 (Mono)chlorobenzene    0. 1    damages kidneys, liver, nervous system
 Slyrene
                        0. 1    damages liver, nervous system
      Possible Sources of Contamination

pesticides; as transformer fluid


primarily formed when surface water containing organic
matter is treated with chlorine

insecticide used against worms, boll weevils,  cotton
aphids, stink bugs, thrips

fuel;  solvent in manufacture of industrial chemicals,
Pharmaceuticals, pesticides, paints, plastics

cleaning agents; industrial wastes from manufacture of
coolants

solvent  for  waxes, gums, tars, resins, rubbers, oils,
asphalt; insecticide for termites; degreasing agent fur
metals, leather & wool; ingredient in metal polishes

used in insecticides, moth balls, air deodorizers

solvent for fats, phenol, camphor; to retard fermentation

mixed with other chemicals for various solvents


used in manufacture of insecticides, gasoline

used in manufacture of food wrappings, synthetic fibers

component of soil fumigants; solvent for fats, oils; dry
cleaning; degreasing

gasoline

solvent for paints, waxes, polishes

plastics, polystyrene, styrofoam, synthetic rubber, res-
ins
 1.1,1 Trichlorothane   0.20   nervous system damage
                                                                                               used in manufacture of food wrappings; synthetic fibers

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r
^
ir
   Contaminant

Tetrachloroelhylene

Trichloroeihylene


Toluene


Vinyl chloride



Xylenes

Radionuclides
Gross alpha particle
activity

Gross beta particle
activity
                              MCL                       Health Effects

                              0.005   probable carcinogen, vomiting, diarrhea

                              0.005   possible carcinogen
     Possible Sources of Contamination

dry cleaning, degreasing metals, solvents

waste from disposal of dry cleaning material and manu-
facture of pesticides, paints, waxes, varnishes
                                I      headache, nausea, impairment of coordination and reaction lime,    explosives (e.g. TNT);  to make dyes; as solvent for
                                      damages kidneys, lungs, nervous system                           extraction of substances  from plants
                              0.002   possible carcinogen



                                10    damages liver, kidneys, nervous system


                             IS pCi/l* cancer risk
                             4 mrem/  cancer risk
                              year**
        Radium 226 & 228    5 pCi/L   bone cancer risk
polyvinyl pipes (PVC) and solvents used to join them;
industrial waste from manufacture of plastics and syn-
thetic rubber

solvent; to manufacture polyester fibers; dyes
radioactive waste; uranium deposits
radioactive waste; uranium deposits
                                                                                              radioactive waste; geological
         * picoCuries per liter
        •* millirems per year

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 What You  Can Do . .  .

 • Review water quality test results at your monthly Board meetings.

 • Be sure your operator is trained to meet your state's certification requirements for your
  size system.

 • Call the toll-free EPA Drinking Water Hotline at 1-800-426-4791 for more information
  about the chemicals listed in the chart.

 • Carefully dispose of any toxic chemicals you have in the garage or storage shed so they
  don't end up contaminating your water source.

 • Educate your customers about chemical contaminants and the cost of additional testing
  so they'll understand if you need a rate increase and be prepared  to support them.

 NOTES:
36
Community Resource Croup, Inc./Southern RCAP

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 Chapter VIII: Public Notification


 What if you ate at a restaurant and found out later they didn't bother to tell you their
 refrigerator had been broken for several days and some of the food might be slightly
 spoiled?

 Even if you didn't get sick, you'd probably be angry they didn't bother to tell you, as soon
 as they knew, so you could take steps to protect your family's health.

 While the restaurant owner would be reluctant to let you know about the problem for fear
 of losing business, most would agree that protecting the public health is more important than
 the restaurant's reputation. And what about the owner's liability if some customers did get
 sick and found out later that the owner knew, but didn't bother to notify them?

 When you agreed to serve on the Board of yourcOTimunity's wateir_systetn, you accepted
 responsibility for helping protect the families in your community from waterborne disease.
 Anytime there's even a slight chance the water you supply could cause a health hazard for
 your customers, you have an obligation to let them know as soon as possible what the
 problem is, and what customers can do to minimize the health hazard to their families. Isn't
 protecting your customers' health more important then your system's reputation? Besides,
 your system's reputation won't suffer much if customers know you're doing the best you
 can, and they can trust you to notify them when there's a problem with the water.

 How would your customers feel if they got sick and found out later that you knew, but didn't
 bother to notify them?

 When Congress amended the Safe Drinking Water Act in 1986, they included public noti-
fication as an important responsibility of public water systems. Pubtic Notification Regu-
 lations went into effect on April 28, 1989. Systems failing to provide proper and timely
 Public Notification are subject to civil penalties not to exceed $25,000.

 As a practical matter, the state agency (primacy agency) responsible for regulating public
 water supplies will work with your system to help you comply with the Public Notification
 requirements. The type and amount of help provided varies from state to state. If you have
 specific questions about Public Notification, contact your state primacy agency — they're
 there to help. This Chapter is designed to give you a quick overview of your system's re-
 sponsibilities under the Public Notification Regulations.

 First, some definitions:

 National Primary Drinking Water Regulations (NPDWRs): These are the standards set
 by EPA for drinking water quality. Each NPDWR contains a Maximum Contaminant Level
 (MCL) or treatment technique, and monitoring and reporting requirements for a particular
 contaminant.

 Community Resource Group, Inc. /Southern RCAP                                          37

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 Maximum  Contaminant  Level (MCL):  The maximum amount of a  contaminant
 permitted in water delivered by a public water system. When a contaminant exceeds the
 MCL, that system is in violation of the National Primary Drinking Water Regulation for
 that contaminant.

 Violations requiring Public Notification  by your system are divided into two groups, or
 tiers, based on the seriousness of the health  risk.

 Tier 1 Violations are the most serious violations and include:

 1 . Exceeding a Maximum Contaminant Level (MCL)
 2. Failure to comply with required water treatment techniques
 3. Failure to meet variance or exemption schedules or requirements

 Tier 1 violations are further divided into Acute and Non-Acute violations:
                                                          ''     '
Acute: Currently, EPA defines violation of the nitrate standard, or Total Coliform Rule
violations involving the presence of fecal or E. coli bacteria, as acute  violations.   In
addition, any violations specified by the state agency as posing an immediate and potentially
serious risk to human health are also considered to be acute.

Non-acute: Violations that involve a slightly  less immediate, but potentially serious risk
to human health.

Tier 2 Violations are less serious violations and include:

1 . Failure to comply with water quality monitoring requirements
2. Failure to comply with a required water testing procedure
3. Operating under a variance or exemption from a regulation

Tier 2, are violations that don't pose an immediate health threat, but Public Notice is re-
quired to alert the public that certain monitoring or exemption violations have taken place.

The man serious the health risk, the tougher the Public Notification requirements. The
timing, required wording, and delivery of public notices vary depending on the seriousness
of the health risk involved.

Tier 1  Public Notification Process

Public Notification for Tier 1 violations is a 3-step process. Read carefully:

Step 1:  (applies only to Tier 1 Acute Violations.)
Deliver notification to principal TV and radio stations serving the area within 72 hours fol-
lowing the violation,  and
38                                         Community Resource Croup, Inc./Southern KCAP

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Step 2: Provide notice within 14 days of the violation to the daily or weekly, general cir-
culation newspaper serving your area, and

Step 3: Provide notice to all customers by direct mail (mail with water bill if possible) or
hand deliver to each customer within 45 days of the violation. Repeat Step 3 every three
months for as long as violation continues.  The state can grant a written waiver of the Step
3 notice if the problem is corrected within 45 days of the violation.

Tier 1 Alternate Public Notification: This Alternate Public Notification Procedure may
only be used if there  is no newspaper serving your area. If no daily or weekly newspaper
serves your water system's area, provide notice by posting or hand delivery within 72 hours
for Tier 1 Acute violations and, within 14 days for all other Tier 1 violations. Repeat hand
delivery of notice every three months for as long as the violation continues, or provide
continuous posting for the duration of the violation.

Notice  to new customers: Any time your  system  has  existing Tier 1 violations, new
customers must be given a copy of the most recent public notice at the time water service
begins.

Her2 Public Notification Process-

Public Notification for Tier 2 violations is a 2-step process:

STEP 1: Provide notice through a daily or weekly general circulation newspaper serving
your area, within 3 months of the violation.

STEP 2: Provide notice by direct mail or hand delivery within three months of the origi-
nal notice.  Repeat Step 2 every three months for as long as violation continues.

Tier 2 Alternate Public Notification: This Alternate Public Notification Procedure may
be used only if there  is no newspaper serving your area. Instead of following the Tier 2,
process, provide notice by hand delivery or posting within 3 months of the violation. Repeat
hand delivery every 3 months, or provide for continuous posting at City Hall or the water
system office for as long as the violation lasts.

Public Notice Contents
                                                                 c^
Check your Public  Notice using the  following list to be  sure it meets the federal
requirements for General Public Notification. Each Public Notice must provide a clear and
readily understandable explanation of:

a the violation
a any potential negative health effects (see mandatory health effects language below)
a the population at risk
a steps the system is taking to correct the violation
o necessity of seeking alternative water supplies (if any)
a preventive measures the consumer should take until the violation is corrected

The  notice must:

a be clear and conspicuous in design
a contain non-technical language
a use print that's easily read

Community Resource Group. Inc./Southern RCAf                                         39

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 a not defeat the purpose of public notification
 a contain the telephone number of a knowledgeable person at the water system who can
   provide additional information
 a contain multi-lingual information, where appropriate

 Mandatory Health Effects Information

 Federal regulations require that specific language be used, word for word, in public notices
 involving particular violations. Your state water regulatory agency (primacy agency) will
 provide your  system with the exact wording at the  time of the  violation. If you have
 questions, contact them.

 Proof of Notice

 Within 10 days of completing each public notification, your system is required to submit
 to the state primacy agency, a copy of each type notice distributed, published, posted or
 made available to customers or to the newspapirst radHfancPIV stations.

 Notification for Unregulated Contaminants

 Notice for unregulated contaminants is not the same as for regulated contaminants.  For
 unregulated contaminants, all you're required to do is send customers a Notice of Availa-
 bility of Monitoring Results within three months after receiving the test results for the un-
 regulated contaminants. The notice must also contain the name and telephone number of
 a contact person who can answer customer questions.

 Special Public Notice for Fluoride

 Public Notification for fluoride is slightly different than for other contaminants. The
 primary MCL for fluoride is 4 milligrams per liter of water (4mg/l). When fluoride exceeds
 this level, it can cause a crippling bone disorder. However, a special Public Notice is also
 required when fluoride exceeds 2 mg/1 but is less than the MCL of 4 mg/1 because exposure
 at this level can discolor and pit the teeth, especially of children under 9 years old. If your
 system has high fluoride ask your state primacy agency about pubk'c notification require-
 ments.

 Yes, it's a bit complicated. But when you think about the possiblity of someone's child
 getting sick (maybe even your own), it just makes good sense to let people know when they
 face a possible health risk. Your state regulatory agency is there to help you  fulfill your
 responsibilities for Public Notification and help you get your system back to producing safe,
 dependable water. Just call on them whenever you have a question.
40                                        Community Resource Croup, Inc. /Southern RCAP

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Chapter IX:  When Contamination Happens .  . .


Mercury, heptachlor, styrene, and other potential contaminants! We know they can get into
drinking water and pose threats to our long-term health. With more people and increased
industrialization, the likelihood of pollution gets greater. Scientific methods get better at
determining the effects of chemicals on our health. Government regulations get stricter and
more complicated in response to the new scientific information.

In Chapter VII, we talked about the contaminants you're presently or going to have to test
for. In this chapter, we'll talk about what you should do if water quality testing shows your
water is contaminated.

First of all. . .

I. Don't panic.                     ; .*•-•-  -          ,
2. Don't feel guilty.             —' - — '-""••   ~-"' "-' -f        ; -•
3. Don't try to hide  it.

1. Don'tpanic. If you have a regulated contaminant in your water, there's a way to remove
it. By "remove" it, we mean lower the concentration of the contaminant in the water so it's
below the MCL. MCL's (Maximum Contaminant Level) are set by EPA based on criteria
such as the availability of treatment processes to remove the particular contaminant, the cost
of treatment, as well as the seriousness of the human health risk.

The treatment processes EPA recommends are called "Best Available Technologies" or
BATs. BATs are effective and commercially available methods of removing contaminants.
However, they're not necessarily cheap! There are different BATs for different kinds of
contaminants. Some BATs remove several contaminants at the same time. BATs will vary
depending on the type and amount of contamination you have  in your water. Don't panic.
There is a way to reduce contamination in your drinking water and get back into compli-
ance.

2. Don 'i feel guilty.  Many of the regulated contaminants (inorganics) occur naturally. In
other words, they're pan of our environment already. Others are used in manufacturing
processes (usually synthetic organic chemicals), and many are used in agriculture (usually
pesticides and herbicides called volatile organic chemicals). Often contamination of a water
supply is the result of poor waste disposal practices, and many times the  exact source is
unknown.

As a Board  member, you have little or no control over the source of pollution, whether it's
from nature (like radium), or from industry or agriculture (like styrene or alachlor ).Any
system can  become contaminated. Don't waste energy feeling guilty — use that energy to
start correcting the situation.
Community Resource Croup. Inc./Southern RCAP                                         41

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 3. Don't try to hide it. Your first obligation is to protect your customers' health. Customers
 will support your efforts if they feel they can trust you to notify them if there's a health
 hazard in their water.

 It's your responsibility as a Board member to tackle the problem immediately and
 publicly.

 What to Do Right Away . . .

 1. Notify your state drinking water regulatory agency (the primacy agency). Whether you
 have your water tested by a commercial laboratory or it's  done by your state primacy
 agency, make sure you report the violation to an official in the department that deals with
 drinking water. Lab reports may not indicate there's a violation. Compare the level of each
 contaminant with the MCLs on the contaminant charts in Chapter VH. If the level on the
 lab report for a particular contaminant is higher than the MCL, you're in violation and need
 to take immediate action. Remember, the law sayflhe system is responsible for recognizing
 and reporting it's in violation.

 2. Notify the public. Whenever your system is in violation of SDWA standards, you're re-
 quired to notify the public about the possible health hazard. When you notify your primacy
 agency that you're in violation, they'll give you instructions about how to notify your cus-
 tomers. (For information about Public Notification requirements, see Chapter VIII).

 The primacy agency will tell you the specific language you'll need to include in press re-
 leases and other customer notification activities and the timetable for doing it. They'll also
 require a confirmation that you've actually done the notification.

 You'd be angry if a restaurant owner knew the chicken salad was spoiled but let you  get
 sick because he didn't want to harm the reputation of his restaurant. Your customers will
 feel the same way if you don't immediately notify them about contaminated water so they
 can take precautions to protect  their health. Chances are, you had no control over  the
 pollution. Keep your customers' confidence by supplying them with the legally required
 information about the contamination as soon as possible.

 3. Make a plan to correct the violation. Your state primacy agency will ask you for a written
 commitment that your system is going to take action to get back into compliance. It's your
 responsibility to develop a plan and timetable that tells:

 • when you're going to hire an engineer,
 • when they can expect a report from the engineer describing what technology you've
  decided to use to remove the contaminant,
 • when and where you're  going to get the financing to do the project, and
 • how long it will take to  get back into compliance.
42                                         Community Resource Croup, Inc. /Southern RCAP

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             POSITIVE  COLIFORM  SAMPLING   RESULT

                            Public Notification Letter
February 1, 1992


To:    Tribal System Users
From: Tom Crawford, Water Chairman
Re:    Total Coliform MCL Violation for January


Through our last system sampling effort on January 24, we were notified by our water lab of
the presence of coliform bacteria in the distribution system.  By this notice, I want to inform
everyone of the nature of this problem and fulfill notification requirements as set out by the
State and Federal EPA.

What's a "coliform" ?

Coliforms are another name for a family of bacteria that may grow in the soil, on pipes, on
the walls of a storage tank or be otherwise found in nature. While they are not normally
found in water system pipes because of chlorination practices, unchlorinated systems like
ours are always subject to their general entry while repairing leaks, filling and drawing
storage tanks, etc. Their presence simply serves to draw attention as to where they could
have come from  and what it means.  Further testing for "fecal coliforms" confirms possible
danger or pollution. Our coliform samples were further tested by our lab for the presence
of the "fecal" organisms.  None were found.


What is "public notification" ?

Under these circumstances, the State and EPA require that we notify all users of the sampling
results.  While we may have our own language to explain our findings, we are obligated under
the new Safe Drinking Water Act to include the following mandatory language in this note:

"The Environmental Protection Agency (EPA) sets drinking water standards and has
determined that the presence of total coliforms is a possible health concern. Total coliforms are
common in the environment and are generally not harmful themselves. The presence of these
bacteria in drinking water, however, generally is a result of a problem with water treatment or
the pipes which distribute the water and indicates the water may be contaminated with
organisms that can cause disease. Disease symptoms may include diarrhea, cramps, nausea
and possible jaundicel, and any associated headaches and fatigue. These symptoms, however,
are not just associated with disease-causing organisms in drinking water but also may be
caused by a number of factors other than your drinking water. EPA has  set an drinking water
standard for total coliforms to reduce the risk of these adverse health effects. Under this
standard, no more than 5% of the samples collected during a month can contain these bacteria,
except those systems collecting fewer than 40 samples/month that have one total coliform
positive sample per month are not violating this standard.  Drinking water which meets the
standard is usually not associated with a  health risk from disease-causing bacteria and should
be considered safe."
                                                                                                   i

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Has anything been done?

In order to be on the safe side, the system was flushed and chlorinated on Monday,
January 27 in a method to kill off any stray bacteria. Some of you may have smelled the
chlorine in the water on this day or on January 28.  Five additional samples were drawn
from various locations in the system on Tuesday, January 28. These test results were
negative, that is, no further bacteria were found.

Also, the well source was specifically tested for the presence of any bacteria.  The test was
negative.  Our source is fine.


What now?

For now, our plans are to simply to keep providing water to everyone. Coliform finds are
the exception to the rule with our system. However, I have directed our operators to flush
the lines through the hydrants more frequently.  This tends to keep the water moving and
doesn't allow any type of organism to multiply in one place for too long.


What if I have a question?

Should you have any question regarding this issue or any other water concern, please feel
free to contact my office at 754-7677.  Ask for either Mike Chemiak or Tom Crawford.
They will be happy to answer your questions.


Thanks for your patience and support. It is appreciated.
Tom Crawford

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    WATEH UTILITY MANAGEMENT ISSUES
    Elements of a Quality Water Utility System
            •Water board established
            •Tribal council (Authority to operate)
            •O&M organization
            •Financial systems
Why is it important to establish a water board?

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   WATER UTILITY MANAGEMEI*T ISSUES
  Elements of a Quality Water Utility
  System (cont.)	

           •User rate structure

           •Fee collections/policies

           •Staffing

           •Communication/Public education
What does financial self-sufficiency mean?

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     WATER UnLFTY MANAGEMENT ISSUES
     Management Responsibilities
             •Provide adequate supply of potable
             water to users
             •Safe Drinking Water Act compliance
             ' Recordkeeping
What are key components to SDWA "compliance"?

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  WATER UYIUTY MANAGEMEffT ISSUES
  Management Responsibilities (cont.)
          •Manage utility in an efficient manner
          •Billings and collections
          •Insure safe working conditions
           Personnel actions
What does it mean to manage efficiently?

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     WATER UTILITY MANAGEMENT ISSUES
    Management Responsibilities (cont.)



            •Utility board/Tribal council reports
             Prepare budgets/Operational plans
            •Contact with system users
Who must managers communicate with?  Why?

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   WATER U1IUTY MANAGEMENT ISSUES
   Water Board and Tribal Council Roles

           •Provide citizen representation/Users
            on board


           • Develop operating by-laws


           •Adopt operating policies


           • Set goals and objectives
Why is citizen representation so important?

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     WATER irnt-ITY MANAGEMENT ISSUED
     Water Board and Tribal Council
     Roles (cont.)         	

             • Draft and submit utility budgets

             •Support O&M structure

             •Set up seperate financial system
How can the Board "support" the O&M structure?

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     WATER UTiUTY MANAGEMENT ISSUES
    Water Board and Tribal Council
    Roles (cont.)	

             •Staffing

             •Authorize operational authority

             • Provide monthly, semi-annual,
             annual status reports
Who should be on "the staff"? What kind of skills
are required?
                            8

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  WATER U flUTY MANAGEMENT ISSUES
 Tribal Utility Ordinances/Operating Policies
         •Do they meet current needs?
         •Will they meet future needs?
         •Are they consistent?
         •Utility board/Tribal council approved
Write down an example of an ordinance.

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       RULES AND REGULATIONS






                AND






          GENERAL BY-LAWS






GOVERNING OPERATION AND MAINTENANCE






               OF THE






  COMMUNITY ENVIRONMENTAL SERVICES

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                  UTILITY AND ENVIRONMENTAL SERVICES ORDINANCE



                               TABLE OF CONTENTS

ARTICLE  I:  GENERAL REVISIONS

     Section 1.01.      Title and Date	.1
     Section 1.02.      Purpose  	  1
     Section 1.03.      Policy   	  1
     Section 1.04.      Jurisdiction	1

ARTICLE  II:  DEFINITION OF TERMS

     Section 2.01.      General  	  2
     Section 2.02.      Appurtenances 	2
     Section 2.03.      Customer	2
     Section 2.04.      Customer Lines	2
     Section 2.05.      Garbage	2
     Section 2.06.      Distribution System Lines	2
     Section 2.07.      Collection Lines	.2
     Section 2.08.      Meter	2
     Section 2.09.      Manager	2
     Section 2.10.      Operator	2
     Section 2.11.      On-site Sewage Treatment and Disposal Systems ....  3
     Section 2.12.      Off-Reservation	.  .  3
     Section 2.13.      Regulation	3
     Section 2.14.      Sewage Disposal System Cleaner	3
     Section 2.15.      Tribal Community	3
     Section 2.16.      Contractor  	  3
     Section 2.17.      Utilities and Environmental Service	3
     Section 2.18.      Utility Authority	3
     Section 2.19.      Utility and Environmental Services Department ....  3
     Section 2.20.      Department	3
     Section 2.21.      Vendor	3
     Section 2.22.      Shan, May	3


ARTICLE  III:  UTILITY AND ENVIRONMENTAL SERVICES DEPARTMENT AND UTILITY
              AOTHCKFTY

     Section 3.01.      Establishment of Utility and Environmental Services
                        DqjAitaifcmt	4
     Section 3.02.      Utility Authority	4
     Section 3.03.      Utility Authority - Operating Organization	4
     Section 3.04.      Utility Authority - Powers and Responsibilities ...  4
     Section 3.05.      Utility Authority - Membership	5
     Section 3.06.      Term of Office	5
     Section 3.07.      Utility Authority - Method of Appointment	5
     Section 3.08.      Utility Authority - Vacancies	5
     Section 3.09.      Officers  	  5
     Section 3.10.      Duties of Officers	6
     Section 3.11.      Meetings	6
     Section 3.12.      Quorum and Voting 	  6
     Section 3.13.      Meeting Agenda	7
     Section 3.14.      Compensation	  7
     Section 3.15.      Public Hearings 	  7

                                      TC.I

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ARTICLE  IV:  MANAGEMENT AND FINANCES

     Section 4.01.      Management Personnel	3
     Section 4.02.      Annual Budget  	 8
     Section 4.03.      User Fee Schedule	8
     Section 4.04.      Fiscal Year	8
     Section 4.05.      Depository	8
     Section 4.06.      Investments	8
     Section 4.07.      Disbursements and Receipts	8
     Section 4.08.      Records and Accounts   	 9
     Section 4.09.      Exclusive Use of Funds	9
     Section 4.10.      Audit and Reports 	 9
     Section 4.11.      Bonding 	 9
     Section 4.12.      Insurance	9
     Section 4.13.      Petty Cash	9
     Section 4.14.      Regulations and Policy  .	9
     Section 4.15.      Regulation; Policy Suspension, Alteration	.10
     Section 4.16.      Amendments	10
     Section 4.17.      Grievances	10
     Section 4.18.      Non-Waiver of Sovereign Imunity	10

ARTICLE V:  UTILITY. AND ENVTROMiENTAL SERVICES - OPERATION

     Section 5.01.      Services Provided	11
     Section 5.02.      Water Service	11
     Section 5.03.      Sewerage Services	11
     Section 5.04.      Garbage Service	 .11
     Section 5.05.      Roads and Appurtenances	11
     Section 5.06.      Future Services	11
     Section 5.07.      Maintenance Schedule	11
     Section 5.08.      Personnel	11
     Section 5.09.      Purchasing  .	12
     Section 5.10.      Equipment	12
     Section 5.11.      Inventory	12
     Section 5.12.      Public Relations	12
     Section 5.13.      Emergency Notification	12
     Section 5.14.      Staff Training	13
     Section 5.15.      Limits of Responsibility	13
     Section 5.16.      Right of Entry - Inspections	13
     Section 5.17.      Disruptions of Service	13
     Section 5.18.      Permits	14
     Section 5.19.      Water Shortage - Service Preference	14
     Section 5.20.      Unnecessary Waste of Water	14
     Section 5.21.      Conservation of Resources 	14
     Section 5.22-      New custcmRr Services	14
                                     TC.II

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ARTICLE VI:      CUSTOMER OBLIGATIONS

     Section 6.01.       Conditions for Service; Payments	15
     Section 6.02.       Maintenance; Repairs; Liability	15
     Section 6.03.       customer Termination of Service;  Abandonment ....  15
     Section 6.04.       Water Shortages   	  15
     Section 6.05.       Inspections  	  ...  15
     Section 6.06.       Permits	15
     Section 6.07.       Cross-connections	15
     Section 6.08.       Solid Waste Facilities	16
     Section 6.09.       Use of Sewerage System	16
     Section 6.10.       Unauthorized Disposal	16
     Section 6.11.       Toxic Waste Disposal	16

ARTICLE VII:     FEE SCHEDULE  AND BILLING

     Section 7.01.       Fee Schedule Establishment	17
     Section 7.02.       Public Hearing	17
     Section 7.03.       Notice to Customers	17
     Section 7.04.       Billing Responsibility	17
     Section 7.05.       Monthly Statements	17
     Section 7.06.       Due Date 	  17
     Section 7.07.       Payments Past Due	17
     Section 7.08.       Delinquent Accounts	17
     Section 7.09.       Notice of Delinquency	18
     Section 7.10.       Advance Deposits	18

ARTICLE VHI:    ENFORCEMENT;  PENALTIES; SANCTIONS

     Section 8.01.       Authority and Enforcement	19
     Section 8.02.       Attachment of Customers Property	19
     Section 8.03.       Penalty Schedule	19
     Section 8.04.       Sanctions Authorized	19
     Section 8.05.       Sanctions Guidelines	19

ARTICLE DC:     MISCELLANEOUS PROVISIONS

     Section 9.01.       Validity Severability	21
     Section 9.02.       Amendments	21
     Section 9.03.       Suspension of Ordinance	21
                                    TC. Ill

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                        ORDINANCE NUMBER:
                                TRIBAL BUSINESS COUNCIL

                  TRIBAL UTILITY AND ENVIRONMENTAL SERVICES ORDINANCE


                                   ARTICLE I

                               GENERAL PROVISIONS


SECTIONS 1.01. TITLE AND DATE:  This ordinance shall be titled;  the
Tribal Utility and Environmental Services Ordinance.  The ordinance shall
become effective immediately upon adoption by resolution by the      .    Tribal
Business Council.

SECTION 1.02 PURPOSE;  The purpose of the         Tribal Utility and
Environmental Service Ordinance is to define the policies,  establish an
organization and identify the necessary rules and regulations for:   (1)  the
operation, maintenance and management of the various public utilities located
on the        . Indian Reservation; and (2) management for the provision of
essential environmental services within the Reservation Ccranunity.

SECTION 1.03. POLICY;  It shall be the policy of the         Indian Tribe to
operate, maintain and manage the public utilities and essential  environmental
services on the    .     Indian Reservation so that the community residents are
provided with a high level of environmental services designed to minimize
exposure to adverse conditions which could negatively impact the physical and
environmental health of any individual or the community.  It shall  also be the
policy of the         Indian Tribe that the operation, maintenance  and
management of the public utilities and environmental services shall be carried
cut through an efficient program and in a financially responsible,  cost
effective, and self-sufficient manner.

SECTION 1.04. JURISDICTION;  The authority to establish a Tribal Utility and
Environmental Services Organization and to levy appropriate user fees to all
residents and organizations operating on the        . Indian Reservation is
provided in Articles	and Section	of the         Tribal Constitution.
                                      -1-

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                                    ARTICLE II

                               DEFINITION OF TEtfrlS

SECTION 2.01.  GENEBAL:   Unless the context specifically indicates otherwise,
the meaning of terms used in this Ordinance shall be set forth in this Article
II.

SECTION 2.02.  APPURTENANCES;   "Appurtenances" are the real and personal
property owned by the Utility and Environmental Services Department or the
Tribe  located  on,  near  or under the roadways and streets, such as fire
hydrants, valves,  manhole covers and drains.

SECTION 2.03.  Q3STCMER;   "Customer" means  a person, business, agency or other
organization that uses,  is entitles to use, or is obligated to pay for the use
of or  provision of services from the Utility and Environmental Services
Department.

SECTION 2.04.  OJSTCMER  LINES;   "Customer lines11 are the potable water lines
and sanitary sewer lines located immediately adjacent to, inside of,  or under
a customer's residence  or other building or property, which are either
connected to utility service lines or are maintained by the customer
separately  from utility services lines.

SECTION 2.05.  GARBAGE;   "Garbage" shall mean all degradable and non-degradable
refuse and solid waste without economic value that is generated through the
course of normal living by the residents and organizations in the community.

SECTION 2.06.  DlglRIBLfi'lON SYSTEM LINES:   "Distribution system lines" are
those potable  water lines maintained by the Utility and Environmental Services
Department by  which water utility services  are provided to customers.

SECTION 2.07.  COUECnON LINES;   "Collection Lines" are those sanitary sewer
lines maintained by the Utility and Environmental Services Department by which
sanitary sewage collection and «^gprig*i services are provided by customers.
SECTION 2.08. METER;  "Heter" is a device, owned by the Utility and
Environmental Services Department, for measuring the amount of water provided
to a
SECTION 2.09. MANAGER;   "Manager" shall mean an individual hired by or
appointed by the Utility Authority to oversee and manage the operation of the
Utility and Environmental Services Department.

SECTION 2.10. omRATGR;  "Operator" shall mean an individual hired by or
appointed by the Utility Authority or manager to provide direct day to day
preventive maintenance and operational service for the public water and
sanitary newer utilities.

SECTION 2.11. OH-STTE SEWAGE TREATMENT AND DISPOSAL SYSTOC;  "On-site sewage
treatment and di*^*^^'l systems" shall mean individual or community septic
tanks and subsurface drainfields and associated appurtenances that collect,
treat and di«qpnfie of liquid waste generated by customers.
                                      -2-

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 SECTION 2.12.  OFF-RESERVATION:   "Off-reservation" is any area located outside
 of  the exterior boundaries  of the        . Indian Reservation.

 SECTION 2.13.  REGUIATION;   "Regulation"  is a rule of law or procedure duly
 adopted by the Utility Authority for purposes of inplementing the requirements
 of  this ordinance.

 SECTION 2.14.  SEWAGE DISPOSAL SYSTEM CIZANER;  "Sewage disposal system
 cleaner" shall mean any  individual, firm, contractor or organization who the
 Utility Authority contracts with, to pump out on-site sewage treatment and
 disposal systems and dispose of  the waste material and/or to repair the
 on-site sewage treatment and di«^rxe^l systems located on the Spokane Indian
 Reservation.

 SECTION 2.15.  TRIBAL aMUNTTY;  "Tribal Community," for the purposes of this
 ordinance,  shall include, but not necessarily be limited to enrolled Spokane
 Tribal  members.

 SECTION 2.16.  CONTRACTOR;   "Contractor11 shall mean any individual, firm or
 organization who contracts  to provide environmental services or utility
 repairs,  design,  inspection, reconstruction or operation.

 SECTION 2.17.  UTILITIES AND ENVIRONMENTAL SERVICES;  "Utilities and
 Environmental  Services" are those basic services necessary for supporting
 residential and commercial  development, including, but not limited to, water,
 sewer and garbage collection.

 SECTION 2.18.  UTILITY AUTHORITY;  "Utility Authority" is the agency
 responsible for,  and authorized to manage, the Utility and Environmental
 Services Department of the       , Indian Tribe, as established by this
 ordinance.

 SECTION 2.19.  UTILITY AND ENVIRONMENTAL SERVICES DEPARTMENT;  "Utility and
 Environmental  Services Department" is a governmental department of the
 Indian Tribe authorized to  operate the utility services provided by the Tribe.

 SECTIONS 2.20.  DEPARTMENT;  "Department" shall mean the Utility and
 Environmental  Services Department of the         Indian Tribe.

 SECTION 2.21.  VENDOR:  "Vendor" is any individual firm, contractor or
 organization who supplies parts, equipment, supplies and/or services to the
Utility and Environmental Services Department.

 SECTION 2.22.  SHALL. MAY;   "Shall" is mandatory; "nay" is permissive.

 SECTION 2.23.  SEWAGE;  "Sewage" shall mean all water carried wastes.

 SECTION 2.24.  PUBLIC UTHJTIES;  "Public Utilities" shall mean all utilities
 owned, operated,  or Tmivj0^ by the         Indian Tribe or its designated
 authority,  on  and for the         Indian Reservation.

 SECTION  2.25.  ESSENTIAL ENVIRONMENTAL SERVICES;  "Essential Environmental
 Services" shall mean water, sewer and solid waste servic
                                      -3-

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                                  ARTICLE III

                  UTILITY AND ENVIRONMENTAL SERVICES DEPARIMPrT

                                      AND

                               UTILITY AUTHORITY


SECTION  3.01. ESTABLISHMENT OF UTILITY AND ENVIRONMENTAL SERVICES DEPARTMENT:
There  is hereby established the  '       Tribal Utility and Environmental
Services Department having the responsibility for operating and maintaining
the tribal public utilities and providing essential conrunity environmental
services directly or by contract.

SECTION  3.02. UTILITY AUTHORITY;  There is hereby established the
Tribal Utility Authority to serve as the advisory, administrative and
management authority for the      ._ Tribal Utility and Environmental Services
Department.

SECTION  3.03.  UTILITY  AUTHORITY - OPERATING ORGANIZATION;   The Utility
Authority shall operate as a subordinate unit of tribal government independent
in its daily operation,  but responsible to the Tribal Business Council  for its
actions.  The methods of appointment, terms of office, and operating
procedures of the Utility Authority shall be set forth in this ordinance  and
in regulations adopted  by the Utility Authority.

SECTION  3.04.  UTILITY  AUTHORITY - POWERS AND RESPONSIBILITIES;   The  Utility
Authority shall ^p*y  the public utilities of the Tribe,  and obtain  and
disburse funds as required for operation, maintenance and expansion of  the
tribal public utilities.

To fulfill these  responsibilities, the Authority shall have the power to:

     (1) Levy and collect reasonable fees for utility services, including but
         not limited to monthly service charges, connection fees,  penalties,
         construction permits, and other awyawmpnts deemed necessary by  the
         Utility Authority and approved by the Tribal Business Council.

     (2) Provide  for the hiring and compensation of appropriate management and
      (3) Adopt appropriate regulations to implement the requirements of this
         Ordinance;

      (4) author \T* disbursement of funds for operation,  maintenance and repair
         of utility services.

      (5) Cunt-tact with vendors and contractors to assure that safe and
         reliable environmental services are available to  and utilized by the
         residents of the         Indian Reservation.
                                      -4-

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      (6)  Authorize investment of Utility and Environmental Service Departnent
          funds.

      (7)  Impose  sanctions on customers in accordance with Article VTII Section
          8.04 of this ordinance.

 SECTION 3.05. UTTUTY AUTHORITY - MEMBERSHIP:  The Utility Authority shall be
 composed of five persons appointed by the Tribal Business Council.  One person
 shall be selected from the Tribal Council, and four persons selected from the
 general tribal community.

 The Council shall appoint at least three of  the five members from among the
 on-reservation users of  the  Tribal Public Utilities.  Members of the Utility
 Authority shall  be known as  Utility Commissioners.

 SECTION 3.06 TERM OF OFFICE;   Except  for the initial Authority membership, all
 Commissioners will serve two-year terms,  except for the representative from
 the Tribal Council who shall serve a  one-year term.  Initial Commissioners of
 the Authority shall serve terms as follows;

          Council Representative (Position 1)   -  1 year
          At large Representative (Position 2)  -  2 years'
          Community Representative (Position  3)-  1 year
          Community Representative (Position  4)-  2 years
          Community Representative (Position  5)-  1 year

Terms shall expire upon  the  swearing  in of newly appointed Commissioners.

 In the event that the Council Representative Commissioner loses or resigns his
position  on the  Council, his appointment  to  the Utility Authority shall expire
 immediately,  and the Council shall fill the vacancy by appointment of a new
Commissioner at  the next regular meeting  of  the Tribal Council.

SECTION 3.07. UTILITY AUTHORITY - METHDD  OF APPOINTMENT;  The Tribal Council
shall annually appoint a council person to serve on the Utility Authority.
For the Commissioner positions  to be  filled by tribal cx.iinur.ity members, the
Council shall advertise  for  fifteen (15)  days  in the tribal newsletter or by
other public notice,  soliciting interested persons for nomination.  For all
Commissioner positions,  the Council shall choose persons capable and willing
to perform the duties of the Authority.  After receiving nominations, the
Council shall appoint Commissioners by a majority vote.

SECTION 3.08. UTTLTTY AUTHCKETY VACANCIES;   If a Commissioner resigns, moves
from the  local area,  dies, or is found guilty  of a felony or major crime in
any court of law,  the Tribal Council  shall declare the Commissioner position
vacant.   If any  Commissioner missestwo consecutive Utility Authority meetings
without a valid  excuse,  the Tribal Council shall declare the position vacant.
All vacancies shall be filled within  one month in accordance with this Section.

SECTION 3.09. OFFICERS;  Within ten days  after appointment of the initial
Commissioners, there shall be an organizational meeting of the Utility
Authority to elect a Chairman, Vice Chairman and a Secretary^Treasurer
                                      -5-

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 from among the Utility Authority Commissioners.  The Officers shall be elected
 annually  thereafter,  immediately following the appointnent of the new
 Commissioners by the Tribal Council.

 SECTION 3.10.  DUTIES OF OFFICLKS;  Officers of the Utility Authority shall
 assume the following duties:

     1.        Chairman - Shall  preside at all meetings; call and arrange all
               meetings; be responsible for all general management of the
               Utility Authority's affairs; and perform all duties incidental
               to the office.

     2.        Vice-chairman - Shall perform all of the Chairman's duties in
               the absence of the Chairman; and shall assist the Chairman as
               required in handling the Utility Authority's affairs.

     3.        Secretary-Treasurer - Shall keep or cause to be kept a complete
               and accurate record of all meetings and shall maintain all
               correspondence, notices and records of the Utility Authority:
            "?  Shall be_resEonsible_for maintaining financial records of the
               Utility and Envirci^ental^SeryiQesJpepartiTient;  Shall report the
               Department's financial status at each_ regularly scheduled
               Utility Authority meeting and shall present Jbo the Cornmissioners
               for their action  ail requests for funds to meet the Department's
               financial obligations.  Shall prepare an annual financial
               statement for submission to the Tribal Council for the general
               membership meeting.  Further, the Treasurer shall make all
               investanents for the Utility Authority in accordance with
               appropriate sections of this ordinance.

SECTION 3.11.  MEETINGS;   The Utility Authority shall meet when business
fU»nanric and requires  attention,  but in no case less than once per month.
Regular and special meetings shall be called by the Chairman.  Any two
Connissioners  nay request the Chairman, in writing, to schedule a special
meeting of the Utility Authority.  If the Chairman fails to schedule a meeting
within five days after receipt  of a written request, any other two
Commissioners  nay «*T1  such a meeting.
Meetings shall be held in public places, and the Utility Authority shall
provide at least  5 days public notice of special Authority meetings.
Emergency meetings  may be convened with less than five days notice, in cases
of anenyaicy where loss of life, linb or pujpeiLy is threatened, where the
continued operation of fiscal  capability of the Tribal public utilities may be
in jeopardy.  All meetings shall be open to members of the tribal community
and to users of the Tribal Public utilities.

SECTION 3.12. QUCRM AND  VOTING:  A minimum of three Commissioners is required
to establish a quorum  and conduct Utility Authority business.  Any action
taken by the Utility Authority must be approved by a majority vote of those
Commissioners present  at  a Utility Authority meeting.  Each Commissioner of
the Utility Authority, except  the Chairman, shall be entitled to vote on each
matter coming properly before  the Utility Authority.  The Chairman shall vote
only in the event of a tie.

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SECTION  3.13. MEETING AGENDA:  Regular meetings of the Utility Authority shall
be conducted according to the following agenda outline:

     1.       Call to Order
     2.       Roll call
     3.       Reading of minutes of previous meeting
     4.       Report of Treasurer
     5.       Report by Manager and/or Operator
     6.       Unfinished business
     7.       New business
     8.       Miscellaneous business
     9.       Adjournment

SECTION  3.14. OCMPENSATIOK;  Oaranissioners of the Utility Authority shall
serve without monetary compensation, except as determined by the Tribal
Council.  The Council shall establish prevailing government rates for mileage,
per diem, or other costs, consistent with tribal policy, and shall direct the
Business Manager to approve such expenditures; provided that funds are
available within the Utility and Environmental Services Department budget
approved by the Utility Authority and ratified by the Tribal Business Council.

SECTION  3.15. RJBLIC HEARINGS;  The Utility Authority shall convene public
hearings to Higr>«a« changes in utility rates assessed to users of tribal
public utilities.  All users of tribal public utilities shall be afforded five
days written notice of such hearings, and adequate notices shall be posted at
appropriate places within the community and/or in the tribal newspaper.    •.
                                      -7-

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                                   ARTICI£ IV

                            MANAGEMENT AND FINANCES


SECTION  4.01. MANAGEMENT PERSONNEL:  The Utility Authority shall manage the
business and operating affairs of the Utility and Environmental Services
Department.  The Utility Authority may provide for hiring and contracting
personnel for the care and maintenance of the Tribal Public Utilities
(provided that hiring shall be in accordance with tribal personnel policies),
and shall establish compensation rates consistent with the Utility Department
approved budget.  The Utility Authority may delegate only those management
duties that are not specifically designated as duties to be performed
exclusively by the Utility Authority.

SECTION  4.02. ANNUAL BUDGET:  The Utility Authority shall establish an annual
budget enumerating the necessary costs of Utilities and Environmental Services
operation, maintenance, administration, personnel, liability and other
insurance, equipment replacement, and a reserve for major repairs and capital
expenditures.

SECTION  4.03. USER FEE SCHETCJIE;  The annual budget shall be used to determine
a fee schedule to be assessed to the users of Tribal Public Utilities.   The
budget and fee schedule shall be approved by the Utility Authority and
ratified by the Tribal Council.

SECTION  4.04. FISCAL YEAR;  The fiscal year for the Utilities and
Environmental Services Department shall be the sane as the fiscal year of the
Tribal Council.

SECTION  4.05. DEPOSITORY;  The depository of the Department shall be a
separate commercial account or accounts in any bank selected by the Utility
Authority.  Said account shall be in the name "        Tribal Utility
Authority".

SECTION  4.06.  RECORDS AND ACCOUNTS;  Suitable financial records shall be
maintained for all expenditures, receipts from payments for services,
investments and returns on investments, and any other financial matters
    ssary for operation of the Utility and Environmental Services Department.
The separate accounting records for the Department shall be maintained in an
appropriate business like manner.  The records of accounts shall be made
available to the Tribal Council upon request.

SECTION 4.07.  EXCLUSIVE USE OF FUNDS;  The funds accrued by the Utility
Authority and kept on deposit are for the exclusive use of the Utility and
Environmental Services Department for the necessary operation, maintenance,
and management of the Tribal public utilities and environmental services.
Utility Authority funds shall not be transferred or loaned to the Tribal
General Fund or any other accounts of the Tribe or other Tribal departments,
except to pay for services provided to the Utility Authority or Department oy
other Tribal Departments.
                                      -8-

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SECTION 4.08.   AUDIT AND REPORTS;  The accounts of the Utility Authority will
be  audited annually at the close of the fiscal year at the expense of the
Department.  Annual and periodic reports will be submitted by the Utility
Authority to .the Tribal Council.

SECTION 4.09.   BONDING:   Officers of the Utility Authority and any other
person (s)  designated to handle funds for the Utility and Environmental
Services Department,  shall be bonded for amounts of $100,000 or more.

SECTION 4.10.   INSURANCE:  Fire and other insurance on property owned or used
by  the Department or on property in which the Department has an insurable
interest shall  be in amounts and type of coverage specified  by the Utility
Authority.   Insurance nay be part of the Tribal insurance policies,  with the
expenses thereof pro-rated to the Department if so directed by the Tribal
Council.

SECTION 4.11.   PETTY CASH;  A petty cash fund is authorized to be established
in  the amount of $500.00.  This fund nay be used to pay snail expenses,  when
necessary, and  to pay small obligations when it is not feasible to pay by
check  on the official depository.  The fund may be reimbursed periodically
from the official depository of the Utility Authority in the amount of and
upon the submittal of receipts, vouchers, and statements signed by the payees,
of  their proof  of expenditure.  Petty cash reimbursement vouchers shall  be
certified by the Treasurer.

SECTION 4.12.   REGULATIONS AND POLICY:  The Utility Authority shall have the
authority to adopt appropriate regulations and policy as needed to implement
the provisions  contained in this ordinance.  Any proposed regulation or  policy
shall be submitted to the Tribal Council for review at least two weeks prior
to  its pimxmed effective date; provided, however, that emergency regulations
may be adopted,  and shall take effect immediately, without prior Council
review.  Emergency regulations shall be transmitted to the Tribal Council
within 48 hours after adoption.  Any regulation nay be rescinded or approved
by  the Tribal Council at its discretion.

SECTION 4.13.   REGULATION; POLICY SUSPENSION AIinBATION;  No regulation  duly
adopted by the  Utility Authority nay be suspended or altered by any person
without prior written authorization of the Utility Authority.

SECTION 4.14.   AMENDMENTS;  The Utility Authority shall recommend amendments
to  this ordinance that it believes necessary to promote the efficient, cost
effective and self-sufficient operation of the Utility and Environmental
Services Department,  and shall pmsait such amendments to the Tribal Council
for approval*

SECTION 4.15.   GRIEVANCES;  Any 
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All decisions by the Utility Authority on matters that have been submitted fc:
grievance under the Department's grievance procedures shall be considered
final.  Final decisions of the Utility Authority may be appealed to Tribal
court by an aggrieved party only on the basis that the Deparbnent's grievance
procedures were not followed, or that due process was denied.

SECTION 4.16.  NON-WMVER OF SOVEREIGN IMMUNITY;  The Utility and
Environmental Services Department is an agency of the         Indian Tribe,
and thereby retains all rights of sovereign immunity of the Tribe.  By
providing services and entering into service agreements, the Department shall
not waive the sovereign ianunity of the         Indian Tribe or any of its
officers, agents, attorneys or enployees, or any one else acting at the
direction of and on behalf of the         Indian Tribe.
                                      -10-

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                                    ARTICLE V

                  UTILITY AND ENVIRONMENTAL SERVICES - OPERATION

 SECTION 5.0J.   SERVICES PROVIDED:   The services provided by the Utility and
 Environmental  Services Department  shall include domestic water, sewer, garbage
 and appurtenances.   Additional services may be provided upon approval by the
 Utility Authority and ratification by the Tribal Council.

 SECTION 5.02.   WATER SERVICE;   The Utility Authority is responsible to provide
 safe,  adequate water for a fee to  those houses connected to the mainlines of
 the conrunity  water system.  Responsibility for maintenance will include water
 sources,  storage tanks, controls,  mainlines, valves, hydrants, and service
 lines  to the curb stops only.   The service line from the curb stop to the
 house  and interior house plumbing  are the responsibility of the customer.  The
 individual household water meters  are owned by the Utility Authority and it is
 the responsibility of the Department to maintain the meters.

 SECTION 5.03.   SEWERAGE SERVICE;   The Utility  Authority is responsible to
 provide sanitary disposal  of domestic liquid waste for a fee to those houses
 connected to the mainlines of  community sewerage systems.  Further, the
 Utility Authority may,  for a fee,  provide maintenance and repair of individual
 on-site sewage disposal systems.   Responsibility for maintenance will include
 treatment facilities,  pumping  stations,  mainlines and manholes, and service
 lines  to the property lines.   For  individual on-site sewerage treatment and
 disposal systems responsibility for maintenance extends from the inlet of the
 septic tank  to and including the subsurface drainfield.  The service line from
 the property line to the house or  the septic tank inlet to the house and
 interior house plumbing are  the responsibility of the customer.

 SECTION 5.04.   GARBAGE SERVICE;  Garbage collection and disposal  service shall
 be provided  by the Utility Authority for a fee for the houses, businesses and
government agencies located  in the reservation community.  The Utility
 Authority may  enter into a contract with a nearby solid waste collection
 contractor in  order to provide this service to the community.

 SECTION 5.05.   FUTURE SERVICES;  At some future date the Utility Authority may
 assume responsibility to provide electrical, gas, telephone, cable TV, road
maintenance  or other utility services.

 SECTION 5.06.   MMHUNANCE SCHEDULE;   The Utility Authority shall develop and
 follow a regular schedule of maintenance service for each water and sewerage
 system, and components thereof.  A  record shall be kept of all routine
 maintenance  and noocfcxi repairs performed.

 SECTION 5.07.   PERSONNEL:  The Utility Authority shall have the full authority
 to nine,  evaluate and discipline or fire if necessary the personnel required
 to manage, operate  and maintain the Public Utilities.  Basting Tribal Staff
 may be used  and employed by  the Utility and Environmental Services Department
                                      -11-

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 to provide necessary maintenance and management services through agreements
 approved by the Tribal  Council  and the Utility Authority.  The specific
 personnel policies of the Tribe shall be  followed.  Job descriptions for all
 employees will  be developed and followed.

 SECTION 5.08.   HJRCHASING;   The Utility system-operator may make or approve
 purchases from  the petty cash fund for amounts up to $500.00.  .Above_£his_
 amount,  the Utility Authority Treasurer must give approval and disburse funds
 according to appropriate sections of this ordinance.  An accurate account and
 receipts of all expenditures will be kept. .„'-•     ,,,  ..        _. . .., .

 SECTION 5.09.   EgJUMEKT;   All  utilities  equipment shall be maintained
 according to the established maintenance  schedule and quickly repaired when
 necessary so that disruptions in service  are minimized.

 Utility tools and equipment are not for personal use.  Equipment shall not be
 loaned  to other Tribal  Departments.  A record of tools and the individual to
 whom they were  assigned shall be maintained.

 Individuals will be held responsible for the security of tools and supplies
 that are assigned to them.

 SECTION 5.10.   INVEMIERy;   An accurate inventory of tools, equipment, and
 supplies will be kept up to date.

A reserve supply of repair parts and regularly used supplies will be
maintained by the Department.

A listing shall be kept of local suppliers of repair parts, replacement
 equipment and expendable supplies.

SECTION 5.11.   PUBLIC RELATIONS:  Any person filing a complaint or seeking
 information shall be given assistance in a courteous manner.  Complaints may
be presented verbally or in writing to any Department Staff member for
 resolution and  action.   Complaints that cannot be resolved within ten days
 should be referred  to  the Utility Authority in writing.  The Utility
Authority will  resolve  such complaints at the next regularly scheduled meeting
of the Authority.   The  Chairman may call a special meeting of the
Commissioners to resolve complaints as deemed necessary.

SECTION 5.12.   EMERGENCY MOQTFICATICN;  An emergency notification plan will be
developed by the Utility Authority and reviewed annually for notifying
residents and visitors  of:

     A.   Discontinued service for more than eight (8) hours.

     B.   Substandard conditions in water quality.  This includes
          bacteriological, chemical  or physical quality deficiencies.

     C.   Changes in scheduling  of refuse pick-up and septic tank pumping.

     0.   Any other conditions which may adversely affect the health of the
          community residents or visitors.
                                      -12-

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 SECTION 5.13.   STAFF TRAINING;  All employees that are newly assigned to
 operate .the Utility systems shall receive instruction from an experienced
 operator.   A minimum of 32 hours of instruction should be received before the
 new employee, assumes responsibility for operations.

 Regular operators should receive up to 40 hours of formal instruction per
 year.   The Utility Authority will assure that operators maintain current
 knowledge  of water sewage and solid waste system operation techniques.

 A training plan for the operators shall be developed which will provide for
 upgrading  of knowledge and skills in water,  sewage, and solid waste utility
 operations,  maintenance and management.  The goal of the training program
 shall be Washington State certification as Water Distribution Manager.
         5.14.   LOUTS OF RESPONSIBILITY;  The Deparbnent shall not be
responsible for,  nor shall it maintain or repair, any private or domestic
water or sewer system, garbage,  roads or  lighting except by specific agreement
establishing fair rates of compensation to the Department, and that is
approved and signed by the Utility Authority and owner of such facilities.
The Department shall not be liable for any loss or damage beyond its control
resulting from any defect in,  or damage to, a customer's water or sewer lines
or fixtures, garbage storage facilities,  driveways or parking lots, hydrants
or lighting.

sJg.MU.ON  5.15.   RIGHT OF ENTRY -  INSPECTIONS;  The Department, or its
authorized representative,  is hereby authorized to make limited, reasonable
inspections, at reasonable times,  of any  grounds, building or residence served
by the Utility Department to the extent necessary to insure that customer
utility  fixtures,  lines, and equipment are not being operated in a manner that
would likely disrupt or interfere  with utility services.  Except in cases of
emergency where life, limb,  or property are threatened, or in cases of
immediate water shortages,  the Department shall give the customer at least 24
hours notice prior to requesting permission to enter and inspect.  If
permission to  enter and inspect  is denied or impprtafl in any way, the
Department shall  obtain a court  order authorizing such entry and inspection.
Where the permission to enter and  inspect is unreasonably withheld, the
Department may assess court costs  and related expenses and add them to the
affected customer's bill*

SECTION  5.16.   DISRUPTION OF SERVICE:  The Departnent may shut off water or
sewerage service,  or disrupt traffic on the public right-of-way to perform
repairs,  provided that advance notice has been given to affected customers.
Provided,  however, that in cases of  pmRryncim where loss of life, limb or
property is threatened, or in cases  of immediate water shortage, service may
be disrupted without advance notice.  The Department shall not be responsible
for consequent damage as a result  of lack of water or sewerage during
authorized disruptions of service.

The Department shall not be liable for any associated damages or delay caused
by the breaking or leaking of any  pipe, valve, fixture or other contrivance as
a result of the lack of water or sewerage to or from any mains, services,
hydrants,  lines or reservoirs during authorized disruptions of service.
                                       -13-

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 SECTION 5.17.   PEffrHTS;   No connection, 're-connection with, disconnections
 from,  or other private use of  any  Department water or sewer systen, road,
 appurtenance or other utility  service or  facility shall be made without
 written permission of the Utility  Authority.  No construction of any private
 water or sewer system, or other private utility is authorized without written
 permission fron the Utility Authority.  The Utility Authority may require such
 plans from the permit applicant as it determines are necessary to decide
 whether or not a permit  should be  issued.  The Utility Authority may also
 require and establish a  fee for construction permits.

 SECTION 5.18.   HATER SHORTAGE  - SERVICE PRElr'KHENCE:  In cases of a water
 shortage proclaimed by the Utility Authority, the Department shall regulate
 the amount of  water any  customer may be allocated.  The Utility Authority also
 may give preference to the customers and/or amounts of water to be allocated,
 provided the Utility Authority allocates water according to public necessity
 of convenience,  and provides for fair allocations between customers.  Any
 customer violating a legal allocation may have his water service
 discontinued.   Service shall be resumed only upon payment of the approved
 reconnection fee and any penalties.

 SECTION 5.19.  UNNECESSARY WASTE OF WATER;  The Utility Authority reserves the
 right to terminate customer's  service when the customer has repeatedly, and
 unduly wasted water.  Such undue waste is evidenced by the fact that hydrants,
 taps, hoses and other fixtures are permitted to run continuously without
 specific prior approval  of the Authority.  Where such conditions have been
 observed, the Utility Authority having been notified of the condition, may
 terminate water to the premise if  the condition is not corrected within 48
 hours after receipt of the notice.  Service shall be resumed only after
 correction  of the condition causing a wastage of water and payment by the
 customer of the approved reconnection fee, penalties and any other accounts in
 arrears to  the Utility Authority.

 SECTION  5.20.  CONSERVATION OF RESOURCES:  The Department shall conduct
 operation,  maintenance and repair  services in a manner that will maximize the
 conservation of natural,  financial, and property resources.  Customers of the
 Department  shall be encouraged to  conserve water resources.  The Department
may offer assistance and serd.ce  to customers for water conservation and
 other material resources conservation and recovery as determined to be
 feasible by the  Utility Authority.

SECTION 5.21.  NEW CUSTOMER SERVICES;  Any building within the service area of
the Utilities shall be eligible for services, provided all of the following
conditions  are net:

     1.  Facilities as determined by the Utilities and Environmental Services
         Department, with assistance from the Indian Health Service, are
             uate to meet the  additional load.
     2.  HM customer agrees to adhere to this Ordinance.
     3.  Approval by the Utility Authority and the Tribal Council.
                                      -14-

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                                    ARTICLE VI

                               CUSTOMER OBLIGATIONS

 SECTION 6.01.  CONDITIONS FOR SERVICE.  PAYMENTS;  As a condition for receiving
 utility services from the Utility and Environmental Services Department, the
 customer shall comply with all provisions of this Ordinance, and any
 regulations duly adopted by the Utility Authority ?.s well as any other
 applicable cnrtes or regulations, including being current in the payment of all
 fees,  penalties, costs,  damages, or other charges assessed by the Department.

 SECTION 6.02.  MAINTENANCE; REPAIRS; LIABILITY:  The customer shall be
 responsible for maintaining and repairing water and sewer lines located on or
 in the customer's grounds, building or residence in compliance with applicable
 regulations.   The customer shall notify the Department in advance of major
 maintenance or repairs planned for water or sever lines.  The customer shall
 permit the Department to inspect the work for compliance with applicable
 regulations.   The customer shall be liable for any damage to the Department's
 lines,  equipment or other property caused by the customer, his family,  guests,
 invitees,  tenants,  agents, employees,  contractors, licensees or permitees, or
 other  persons  under the  customer's control or authority.

 SECTION 6.03.  OJSTCMER TEHCNATION OF  SERVICE; ABANDOKMENT;  A customer
 planning to vacate any grounds,  building or residence served by the Department
 shall  notify the Department in writing one week prior to the date the customer
 plans  to either vacate or terminate service, whichever is later.  A customer
 who fails  to give notice is responsible for all charges accrued up to one week
 after  notice is received by the  Department,  or up until service is terminated,
 whichever  comes first.

 SECTION 6.04.  WATER SHCKEAGESt   During water shortages declared by the Utility
 Authority,  the customer  shall limit his use of water according to allocations
 established by the Utility Authority.

 SECTION 6.05.  INSPECTIONS:  The  customer shall not unreasonably withhold
 permission for the Department to enter and inspect the Department's and
 customer's fixtures,  line and equipment when necessary to insure that they are
 operating  in a manner that would not likely disrupt or interfere with utility
 services.   The customer  shall be liable for any costs or related expenses
 caused by his  unreasonable withholding of permission.

 SECTION 6.06.  PERMITSt   The customer shall obtain written permission from the
Utility Authority prior  to making any  connection, re-connection, with,
disconnection  from,  or other private use of any Department water or sewer
 system,  road,  appurtenance, or other utility service or facility.  The
 custcner shall obtain written permission from the Utility Authority prior to
 constructing any private water or sewer system, or other private utility.  All
 fees afffwqnftrt  by the Utility Authority shall be paid by the customer prior to
 construction.

 SECTION 6.07.  GRJSS-CJNNECTIOKS:  The  customer shall not make a cross-
 connection with the Tribal Public Water supply.  A cross-connection is defined
 as any physical connection between the Tribal Public Water system and another
 piping system,  either water or waste.   Any individual source must be totally
 disconnected from the household  plumbing  prior to connection to the Tribal
 Public Water Supply.   "Disconnection"  done solely by a valve shall not be
 allowed.
                                       -15-

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SECTION  fi-08. SOLID WASTE  FACILITIES:  Itte customer shall provide his own
refuse containers and shall maintain the cans and holding facility in a manner
that prevents the harborage of rodents and vermin.  There shall be no
excessive accumulation of  refuse, garbage or solid waste in the community or
around individual honesites.  The refuse containers shall be placed at a
location accessible by the refuse collection personnel.

SECTION  6.09. USE OF SEHEBAGE SYSTEM;  The customer shall use the sewerage
collection, treatment and  disposal system only for the disposal of normal
liquid waste including waste from toilet facilities, shower and bathing
facilities and kitchen facilities.

SECTION  6.10. UNAUTHORIZED DISPOSAL;  The customer shall not dispose of any
material into the sanitary sewer which nay cause the collection lines or
subsurface drainfield to become blocked or excessively loaded with solids,
including but not limited  to garbage, disposable diapers, sanitary napkins,
paper material other than  toilet paper, cigarette waste, cat litter,  etc.
SECTION 6.11. TOXIC WASTE DISPOSAL;  No customer shall rijgpns** of any toxic,
radioactive, or otherwise hazardous waste into any Utility Department or
private sanitary or storm sewerage system or solid waste disposal facility.
All hazardous wastes must be ^jgp-«M>H of off the ^•pv Indian Reservation at
a sanitary landfill approved for the disposal of toxic wastes.  Toxic and
hazardous waste include but are not limited to:  oil, pesticides, gasoline,
organic solvents, paint, poisons and other manufactured chemical compounds.
                                      -16-

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                                   ARTICLE VII

                            FEE SCHEDULES  AND BILLING

SECTION 7.01J  FEE SCHEDULE ESTABLISHMENT;  The schedule of fees for utility
services shall be set annually by the Utility Authority.  The fee schedule
shall  be based on the estimated average annual costs for operation of all
utility services.   The fee schedule shall include a basic rate for all
services, payment of which shall be required of each customer regardless of
whether,  or the extent to which, the customer uses any of the services, and;
other  fees,  charges,  penalties and assessments which the Utility Authority is
authorized  to  levy as provided under various section of this Ordinance.  The
fee schedule may be adjusted as needed to meet utility operating expenses.
The fee schedule nay include, user fees; meter fees; construction permit fees;
connection  disconnection or ^connection  fees; inspection fees; penalties or
late payment charges; and other assessments  determined by the Utility
Authority and  approved by the Tribal Business Council.

SECTION 7.02.  EUBLIC HEARING;  THe Utility Authority shall hold a public
hearing whenever a revised fee schedule is proposed for adoption.   At least
five days in advance of the hearing,  the proposed fee schedule shall be sent
to each ^ig^rm^r and shall be posted in appropriate places.  Following the
public hearing the Utility Authority shall set a fee schedule, taking into
consideration  ccnraents received at the hearing.

SECTION 7.03.  NOTICE TO CUb'ilfityS;   A copy of the fee schedule adopted by the
Utility Authority  shall be sent to each nistrmpr at least 30 days prior to the
date the established fees take effect.

SECTION 7.QA-  KTTT.T>C RESKMSIBnJTY;   Ihe Utility Authority and/or Utility
and Environmental  Service Department is responsible for billing customers for
Utility and Environmental Services.  The billing service, however,  may be
contracted to  the  Tribe,  Housing Authority,  other agency or firm at the
discretion of  the  Utility Authority and Tribal Council.
SECTION 7.05. MONTHLY STATEMENT;  Each month the Department shall mail to all
utility customers a statement detailing the following information:

     1.  The customer's name  and account number;
     2.  The types and  levels of service used in the current month;
     3.  The billed cost of the current north's service, plus an accounting of
         bills or charges past due, if any;
     4.  The date that  payment is due; and
     5.  The location to mil or deliver payment.

SECTION 7.06. DUE DATE; The  monthly date on which payment will be due shall
be established by Utility Authority regulation.

SECTION 7.07. PAYMENTS  PAST DUE;  Iteyments not received within 10 days after
the established due date are  considered past due.  The Department shall issue
a notice of payment past due  to the .lyrtrmpr, detailing the payment owed and
the consequences for failure  to pay.  The notice shall be sent no later than
the date the next billing is  sent out.

SECTION 7.08. DELINQUENT ACCOUNT;  If the payment past due is not paid within
10 days after the next  regular monthly due date, the account shall be declared
delinquent.
                                      -17-

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SECTION 7.09. NOTICE OF DELINQUENCY:  The Department shall immediately net if-/
the custcner in writing once his account has been declared delinquent, and
list the sanctions that may be imposed without further notice.  Notice of
delinquency shall be made by certified mail or such other means to provide
proof of reoe3j3tj^jfoe_custciner. ,   •

SECTION 7.10. ADVANCE DEPOSITS:  The Utility Authority may require each new
custcner to pay an advance deposit equal in amount to the basic monthly r?.te
fees for the first month of service, prior to receiving services.  The
deposits shall be retained by the Utility Authority no longer than one year.
The deposits, with interest compounded at passbook rates, shall be credited to
the individual customer's utility account balance at the end of the deposit
period, providing that the customer's account is not delinquent and in
arrears.  Any renaming deposit funds will be returned to the customer.
                                       -18-

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                                     ARTICLE VIII

                          ENFORCEMENT;  PENALTIES; SANCTIONS

   SECTION 8.01.  AI7IHORTTY AND ENFORCEMENT;  The Utility Authority is hereby
   authorized by the Tribal Council to  collect established fees for service and
   to inpose sanctions and penalties for non-payment.  The Utility Authority
   shall enforce its regulations,  fee collections and provisions of this
   ordinance by shutting off water service of any and all violators and
   delinquent bill-payers or imposing other penalties and sanctions as authorized.
  SECTION 8.02. ATTACHMENT OF CUSICMERS HHumKiY;  The Utility Authority shall
  not seek to attach customer's property, nor seek to have fines assessed by
  Tribal Court, except in limited cafys of blatant or continued abuses or
  destruction of property.

* SECTION 8.03. FPOUJY SCHEDULE;  The Utility Authority shall develop and adopt
  a penalty schedule which outlines specific penalties, fines and assessments
  for violation and non-compliance with the provisions of this ordinance.  The
  penalty schedule shall be reviewed for appropriateness annually by the Utility
  Authority.

x SECTION 8.04 SANCTIONS AUTHORIZED:  The following sanctions nay be imposed by
  the Utility Authority for failure of the customer to comply with any
  provisions of this ordinance or with any duly adopted regulation of the
  Utility Authority:

        (1) Termination of service (s)
        (2) Assessment of penalties based on a penalty schedule adopted by
           regulation of the Utility Authority;
        (3) Assessment of late  charges based on a schedule adopted by regulation
           of the  Utility Authority;
        (4) Assessment of damages resulting from the customer's non-compliance;
        (5) Forfeiture of all or part of a deposit and any accumulated interest;
        (6) Filing  of a lien against the customer's property after the account is
           declared delinquent;
        (7) Enforcing a lien by seeking judgment, and satisfaction from the
           customer's property fT¥m a court of competent jurisdiction;
        (8) Filing  suit for dnrrpHjps in a court of competent jurisdiction; and
        (9) Referring violations that may involve criminal conduct to the police
           or prosecutor*

  SECTICK 8.05. SAHOTCKS GUIDELINES;  The Utility Authority shall use the
  following guidelines when considering the appropriate sanctions to be imposed
  in any giwn case:

        (1) Vtoether the sanction is required by this ordinance or other
           applicable lav,  or  whether imposition is discretionary;
        (2) The *< «<*••" sanction noortcri to effect compliance;
        (3) The irreparable harm to operation of the Department, and to the
           Tribe,  if the sanction is not imposed;
        (4) The customer's past record of compliance or non-compliance, or good
           faith efforts to achieve compliance;
        (5) The irreparable harm to other persons or property if the sanction is
           not imposed; and
        (6) The effectiveness of similar sanctions in securing compliance in
           other cases.
                                        -19-

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                                   ARTICIZ IX

                            MISCELLANEOUS PROVISIONS

         SK^i-
SBCTION gJE. VALIDITY,, SEVERABILTIY;   The invalidity of any section, clause,
sentence jKJpovisian of this ordinance shall not affect the validity of any
part of th& ordinance which can be given effect without such invalid part or
parts.

SECTION 9.02. AMBCMPnS:  The       .  Tribal Business Council has the power
to amend this ordinance at any time. The Tribal Council shall act upon
proposed amendments to this ordinance,  submitted for  action by the Utility
Authority, by approval or disapproval of such proposed amendments.

SECTION 9.03 SDSTOBICN OF CRDINRHCE;   No employee, officer, contractor or
agent of the         Indian Tribe is authorized to suspend or alter any of the
provisions of tills ordinance without the formal approval of the         Tribal
Business Council.
                                                                         •••*
1019P


                                      -20-

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WATER UTILITY MANAGEMENT ISSUES
Utility Personnel/Incentives
        'Are operators qualified/certified?



        'Adequate staffing?



        'Adequate compensation?
        > Benefits
  What is adequate compensation?
                     10

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   WATER UTILITY MANAGEMENT ISSUES
  Utility Personnel/Incentives (cont.)
          •Are training opportunities offered?
           Encouragement/Appreciation
          •Staff participation in management
How can staff participate in management?
                         11

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      WATER UTILITY MANAGEMENT I!
     Interagency Communication
             'Utility chain of command
              Defined roles and responsibilities
             1 Routine staff meetings
Create a sample water system chain-of-command.
                          12

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     WATER UTILITY MANAGEMENT ir
     Interagency Communication (cont.)

             •Finance/Expenditures/Collections


             • Management goals


             • Board meetings

             •Operator presentations
What kind of items should be discussed at board
meetings?
                           13

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WATER UTILITY MANAGEMENT ISSUEf
Importance of Recordkeeping
        •Management reviews
        •Cost analysis/Expenditures
        > Rate studies
        'Budget preparation
        'Compliance (SDWA requirements)
 How is a cost analysis conducted?
                      14

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     WATER LT-IUTY MANAGEMENT ISSUES
     Importance of Recordkeeping (cont.)

             • Action justification

             • Future planning efforts

             •O&M/Preventive Maintenance
             programs

             •Customer/User inquiries
What kind of records would help us justify a user
rate increase?
                          15

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     WATER UTILITY MANAGEMENT ISSUES
    Indian Health Service Role
            • Provide assistance In the planning
             and development of water utility
             by-laws
            •Assist in the development of plans
             of operation and maintenance
             manuals
Identify an example of how IMS helped you with
your system.
                          16

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     WATER UTILITY MANAGEMENT ISSUES
     Indian Health Service Role (cont.)

             •Assist in the development of user
              rate studies


             •Conduct annual sanitary surveys


             •Troubleshooting assistance to
              correct system problems
What information is gained from a sanitary survey?
                           17

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    WATER inUTY MANAGEMENT ISSUES
   Indian Health Service Role (cont.)	

           •Conduct engineering studies and
            monitor field construction projects
            •Identify unmet tribal water system
            needs
            > Plan, coordinate and deliver training
            programs to utility staff
Do your operations staff participate in training
opportunities?  When?  How?
                          18

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    WATER UTILITY MANAGEMENT ISSUES
    System Finances
          • Direct/Indirect costs

          • Expenditures/Income

          • Emergency /replacement reserves

          •Billings and collections

          Financially independent of tribal
          reserves?
Describe a strong point of your financial system.
Describe a weakness.
                          19

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WATER UTILITY MANAGEMENT ISSUES
User Rates and Self-sufficiency	


         •Are current user fees sufficient to
          operate the utility?
                          20

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     WATER UTILITY MANAGEMENT ISSUES
     User Rates and Self-sufficiency (cont.)
            •Actual cost rate studies vs flat rate
             in setting user rates
What are advantages and disadvantages of each
approach?
                          21

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   WATER UTILITY MANAGEMENT ISSUES
  User Rates and Self-sufficiency (cont.)

          •Connection fee policies
          'Annual rate reviews
          >Short and long term self-sufficiency
           issues?
What do you feel is a short and a long-term
self-sufficiency issue for your program?
                       22

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WATER UTILITY MANAGEMENT ISSUES
Fee Collections (Policies and Delinquent
Accounts)
    •Customer agreements
    •Payment structures
    •Consistent and enforced collection policies
    •Service disconnect policies (Non-payment)
    • Payback agreements
                       23

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     WATER UTILITY MANAGEMENT ISSUES
     Incentives for Consumers
             • Flexible payment plans

             • Payment reductions (Consistent
             payments)

             • Reduced rate for senior citizens

             • Fixed income users (Rate
             adjustment)
What works or doesn't work for you?  Why and/or
why not?
                          24

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     WATER UTILITY MANAGEMENT ISSUES
     Public Relations
             >Meet the community users

             •Address complaints in a
             positive/timely manner

             •Informative bill stutters?
What kind of information would benefit the user as
a "stuffer"?
                           25

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   WATEH U riLITY MANAGEMENT ISSUES
  Public Relations (cont.)
          'Community/Service group
           presentations
          • Utility system tours
          • Newsletters
          •Videos/Slide shows
Describe a PR program that might help your
community.
                        26

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  Community Water Bulletin's
      SMALL SYSTEM
         GUIDE TO
 FINANCIAL MANAGEMENT
* «'
-Jt"
  Community Resource Group, Inc.
         Southern RCAP
          2705 Chapman
        Springdale, AR 72764
          (50D-756-2900

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                         Table of Contents

 Chapter I: An Overview of Financial Management	1-4
       Planning for the Future	2
       The Annual Expense Budget	    2
       The Revenue Budget	    3
       Record Keeping	4

Chapter II: Small System Planning	5-8
       A Plan for Small Systems	5
       Strengths and Weaknesses	6
       Emergency Plans	6
       External Changes	7
       Goal Setting	7
       Timetables	    8
       Budgeting for Your Goals	8
       Assigning Responsibility	8

Chapter HI: The Annual Budget Process	9-12
       Annual Budget Process Activity Chart	   10
       Financial Revenues Worksheet	12

Chapter IV: Developing Your ExpenSe Budget	13-18
       Establishing Expense Categories	13-15
      Expense Budget Worksheet	16
Chapter V; TMiiiitliii System Revenue and Balancing the Budget  .  .  .   19-22
      Estimating System Revenue	19
      System Operating Revenue Worksheet	20
      Balancing the Budget	21
      Balancing the Budget without Raising Rates	21-22
Community Resource Croup, Inc./Southern RCAP

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 Table of Contents,  continued
Chapter VI: Monitoring the Budget	23-26
       Monthly Financial Report Worksheet	24
       Past Due Account Summary Worksheet	25
       Revising the Budget	26

Chapter VII: Developing  and Implementing a Collections Policy  ....   27-30
       Collections Policy Checklist	28-30
       Putting the Policy into Practice	30
       Monitoring Your Policy's Effectiveness	30

Chapter VTO: Establishing Internal Controls	31-34
       General Controls	32
       Cash Receipt Controls	32
       Cash Disbursements Controls	32
       Bank Account Controls	33
       Payroll Controls	33
       Financial Report Controls	34
Community Resource Croup. Inc./Southern RCAP

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Chapter I: An Overview of Financial Management
A community water system is a business. To be successful, it must be run like one. Even
if you don't have experience running a business, most of you take care of your personal
finances. You have certain expenses to pay each month like food, utilities, and house
payments. You usually know how much money you'll earn each month. You try to balance
your expenses and income so you at least break even.

Say you plan to buy a new car at the end of the summer. You've got to figure out how much
it'll cost and set aside money each month so that when it comes time to buy the car, you'll
have enough money to pay for it. If you're already spending all the money you earn each
month, you can't really save for that new car.

So, you need  to make some decisions:

• Should you  get a second job to earn extra money?
• Cut monthly expenses?
• Borrow money?
• Forget about buying the new car and  fix the old one when it breaks down?

Your water system is much the same, except many more people depend on its financial sur-
vival. It has monthly expenses, monthly income, and long range needs.

A small water system needs to be self-supporting, just like you and your family. It must
at least break even. Successful systems do more than just break even. They charge enough
to set aside money for the system's future needs, like equipment replacement, line repairs,
and emergencies.

As a Board member, you're responsible for helping your water system's finances run
smoothly. Let's look at some of your financial responsibilities.

You 'n responsible for

   • planning A€ system's financial future,

                  d approving the system 's annual expense budget,
   • making sun the system 's revenue covers aU its expenses, and

   • making sure adequate financial records are kept and reviewing those records
     monthly.

Financial management is more than hiring a bookkeeper who collects and pays bills. It's
planning for the future, estimating expenses and needed revenues, and keeping records.
Community Resource Croup, Inc. /Southern RCAP

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 Planning for the Future

 Your fiat responsibility is planning for your system's future operation. So your Board
 can successfully plan, you have to decide what improvements, major repairs, and expansion
 you'll need to make over the next several years to keep providing safe, dependable, and
 fairly priced water to your customers.

 Ask:

 • What are the current and future needs of the system?

 • What parts of our system will we need to repair or replace in the next five years? (Water
   storage tank? sections of line? pump? chlorinator?)

 • Will we need to serve additional customers?

 • Do we have enough employees to operate and maintain the system?

 The answers to these questions will help you develop your system's plan.

 The Annual Expense Budget

 Carrying out your plan will cost money. Your second responsibility is to develop an annual
 expense budget for your system.

 The expense budget is the list of expenses you expect to have during the year plus any special
 items in your plan. Check your system's budget to see if it includes the following expenses:

   • utility bills
   • chemicals
   • insurance premiums
   • any debts you owe
   •emergencies
   • future repairs or replacements
        IT-

 If you hat an expense budget last year, use it as a starting point. If you didn't, be sure to
 include all items you plan to spend money on.

 Estimate the cost of each item as closely as possible. The expense budget is a tool to help
your Board manage the finances of the system. It's all right to revise the budget during
 the year as things change (such as costs of utilities).
                                          Community Resource Croup. Inc. /Southern RCAP

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 The Revenue Budget

 If you followed the first two steps, you'll know what you need to do (the Plan) and how
 much it will cost (the Expense Budget). Next, you'll need to know where the money will
 come from to cover all the costs in your budget.

 This is called the Revenue Budget, and it's your third responsibility  of financial
management.

Most of the money (revenue) to cover the expense budget comes from user fees. User fees
are the money you collect from your customers for providing water to them.

The big question is:

    Will the money (revenue) you expect to collect match or exceed the amount you
    expect to spend?

If not, you'll have to increase revenues or decrease expenses.

It's all right to cut expenses. No one likes to raise water rates. Many systems, though, are
finding that customers are willing to pay a little more to guarantee long-term supplies of
safe, dependable drinking water — especially if they know they're paying their fair share
of the costs.

Small system Boards aren't doing their customers a favor by keeping  rates too low to
properly operate the system now and in the future. Your customers won't thank you for
keeping the rates low when the pump goes out and they don't have water because there's
no money in the bank to cover the emergency.

Expense and Revenue Budgets are estimates you make at the beginning  of the year. The
Board manages the system's finances throughout the year by:

• checking each month to see if the actual expenses are higher or lower than  the estimated
  budget;

• checking to ^g if actual  revenues are higher or lower than expected;
              **••'
• finding out why expenses or revenues are different from the estimates; and

• making necessary adjustments in  either expenses or revenues to ensure the continued
  operation of the system.
Community Resource Group, Inc./Southern RCAP

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Record Keeping

Your fourth financial management responsibility is making sure adequate records are
kept. A water system must have an efficient accounting and record-keeping system.

If you don't know how much money you're spending compared to how much you've budg-
eted, your system could be headed for trouble.

Make sure your bookkeeper presents a written report of the revenues and expenses at each
monthly Board meeting. Compare these figures with the ones in your budget.

Check your Board's current handling of your system's finances by asking the following
questions:

• Do we make an annual Expense Budget?

• Do we make an annual Revenue Budget?

• Does our Board plan for repairs, improvements, equipment replacement, and expansion?

• Do we take in enough revenue to cover the expenses included in our budget?

• Do we need to adjust our water rates or reduce our expenses  to break even?

NOTES:
                                         Community Resource Group, Inc. fSouthern RCAP

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Chapter II: Small System Planning
Does your small water system struggle from one crisis to the next?

Is it possible that as you read this, your water system is headed for a crisis? Maybe the op-
erator is about to quit, the pump went out, or you can't make a loan payment. Sound fa-
miliar?

Crises happen in all businesses. Constantly dealing with emergencies is called "crisis man-
agement," and it isn't fun. Constant emergencies can make you forget that the purpose of
the system is to provide safe, dependable, and fairly priced water for your neighbors.

It does take some work to stay ahead of the crises. To do this, your Board needs to take
an "active" rather than  "reactive''approach to managing the system. This means tak-
ing action before something goes wrong instead of responding to each emergency as it hap-
pens.

Take action. Plan ahead. Stay ahead. Anticipate crises before they happen. Know what
you're going to do when the operator quits, the pump goes out, or the loan payment comes
due.

Planning ahead is knowing where you 're going, thinking about what could happen along
the way,  and taking action now, so you're ready when it does happen.

Sure, things can happen you haven't planned for, but you cut  your chances of crises
occurring if you've planned for as many as possible.

A Plan for Small Systems

Every small water system should develop a written three-year plan. The plan needs to be
updated at least once a year. It should include the four pieces of information listed below:

1. a list of the system's strengths and weaknesses and a strategy for correcting weaknesses

2. a list of ezQJFnal changes taking place in the community and state that may affect your
  water  systtfe, along with a strategy for responding to these changes

3. "What if" emergency  plans

4. goals,  budgeting, timetables, and those responsible
Community Resource Croup, Inc./Southern RCAP

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 Strengths and Weaknesses

What does your system do well? Is it bookkeeping? Maintaining water quality? Customer
relations? List here the three things your system does best:
 1.
2.
3.
Check with other Board members. Do their lists agree with yours? Take time to discuss the
differences.

Once you've agreed on what your system does best, take time to applaud your system's suc-
cesses! Celebrating what you do well helps you keep a positive attitude.

Next, consider what your system doesn't do so well. Maybe you're not collecting bills, or
locating leaks, or getting Board members to all the meetings. List three things here that need
improvement:

1.
2.
3.
Combine your list with those of other Board members. Discuss each weakness on the list
so everyone clearly understands the problem.

Correcting Wtatoiessts: Discuss possible ways to solve the problem. Agree on a goal so
you'll know when you've accomplished what you set out to do (see Coal Setting on page
7). Make a list of steps you need to take to achieve the goal. Use the list to guide your efforts
as you address each problem.

               Plans

Expect the unexpected. Make a "what if" list of all the unexpected things that could jeop-
ardize your ability to provide water. For example, what if your main pump went out? a
major transmission line went out? you're placed under a boil order?
1.
3.
2.
4.
                                          Community Resource Group. Inc./Southern RCAP

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 External Changes

 Your water system is part of the larger community. Changes affecting your system often
 take place at the community or state level. Although these changes will often be beyond your
 control, it's important that you stay aware of them so your system doesn't get caught
 unprepared.

 These changes include population growth or decline; demand for a sewer system; a new
 school; contaminated ground water; new SDWA regulations.

Addressing External Changes: Board members need to stay aware of what's happening in
 the larger community. Make a list of external situations that could have an impact on your
 system's stability during the next three years. Discuss how your system can best respond
 to the external changes you've identified. List probable external changes below:

 1.
2..

3..

4..

5.
Goal Setting

If you don't know where you're going, how will you know when you get there? A goal is
simply a statement of what you plan to achieve. The first step in developing a strategy for
correcting a weakness or preparing for an emergency or some outside change is to agree
on what you want to achieve. Here are some examples of water system goals:

   Our goal Is to collect at least 75% of all water bills that have been past due more than
   60 days.

   Our goal lip increase system income by 15 % from the sale of water to cover the
   cost of needed improvements.

In the spaces below, write out the goals your Board agrees to:

Goalfl	
Goal 12
Goal #3
Community Resource Group. Inc./Southern RCAP

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 Timetables

 People work best when a deadline for completing a task has been set. Each major step in
 your stategy for solving a problem should have a deadline for completion.

Budgeting for Your Goals

 It usually costs money to accomplish goals. An important part of setting a goal is deciding
 how much it will cost and where the money will come from to pay for it. Don't set yourself
 up for failure by setting goals you're not willing to pay for.

Assigning Responsibility

Things don't get done unless someone accepts responsibility for doing them! Each activ-
ity listed in your strategy for reaching a goal should include the name of the person who
agrees to be accountable for making sure that it gets done on time.

An efficient way to approach your system's planning responsibility is to form a Planning
Committee.  Include members of the community. Look for people who want to serve. It's
their system too. Let them help make it better.

Remember that planning is an ongoing Board responsibility. Done carefully,  it will
improve the operation of your system and make your job easier now and in the future.

NOTES:
                                         Community Resource Group. Inc. /Southern RCAP

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Chapter IE:.The Annual Budget Process
Budgets are like opinions. Everybody has one. Some are more valuable than others.

Chances are your system has a budget. Or maybe it doesn't. Do you prepare your budget
just so you have one in order to meet some requirement? Do you have one and never use
it? Sound like your system?

If you're not using your budget every month to monitor revenue and control spending, your
budget isn't very valuable. Likewise, if you prepare next year's budget by looking only at
last year's revenue and expenses, your budget won't be very valuable. (It's tough to guide
your system forward while onfy looking backward.)

As a Board member, you 're responsible for insuring your system has the financial sta-
bility necessary to provide dependable supplies of safe, fairly priced water.

Having a budget is just not enough. For the budget to be valuable, the Board must be
involved.  Members need to prepare it, understand it, and use it to monitor and control
spending.

Our equation for success is:

     prepare the budget
    +understand the budget
    +use  the budget
    =financial stability

Carefully prepared, and properly used, the annual budget is one of the small system Board's
most powerful tools for carrying out its financial responsibility for the system.

Think of the annual budget as a financial road map. Prepare it with care. Make it as accurate
as possible. Examine it at every monthly Board meeting during the year, and you'll always
know where your system is financially.

To be of valuttlbe annual budget must be prepared by the Board, one step at a time. It's
important to »&ve your bookkeeper and operator in the development of the budget, but
the Board HUM take the lead and assume responsibility for preparing,  approving, and
using it throughout the year.

Stan the Budget Process by determining the beginning and end of your fiscal year. Chances
are your fiscal year is established by law or set out in your system's charter or bylaws.

Our system's fiscal year starts the first day of	and ends the last day of	. This
is your annual budget period.

Community Resource Group. Inc./Southern RCAP                                         '

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Begin work on next year's budget four months before the start of the new fiscal year. The
chart below outlines the Annual Budget Process.
        MONTH
        CumntYotr
            month 9
            month 10
ANNUAL BUDGET PROCESS

              ACTIVITY
            month 11
            month 12
             Yotf
            ,_ _ _ afc  «
            flMJVIDI  »
         Budget committee appointed
         Required Debt Service Reserves determined
         System Financial Reserves determined
       n Cost of operating system next year without making any changes is es-
         timated (initial Operating Expense ***iiP*tB)
       a Cost of planned changes in system operation •*i*>*t»A (additions)
       a Final draft of Expense Budget created (cost of reserves + cost of
         planned changes+initial expense estimate*final  Expense Budget
         estimate)
       o Expense Budget reviewed and approved by Board
       o System revenues from sale of water for current and past years reviewed
         by committee
       a If revenues are inadequate to meet •«*«"«•*«'* expenses, method pro-
         posed by committee for adjusting revenues
         Balanced Revenue and Expense Budget reviewed and approved by
         Board
       a Start of new fiscal year. Board monitors actual revenues and expendi-
         tures B^*ifltt approved budget
                             a Financial Audit of previous year begins
                                                hly monitoring of revenues and expenses against
                               approved budget
                             Q Board amends-approved budget as necessary if actual revenues or ex-
                               penses are substantially different from approved budget
                             a Annual Budget Process for next year started
10
                        Community Rtsourtx Group* t*c./Southern RCAP

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Budget development has five parts:

1. Establishing required Debt Service Reserve levels
2. Establishing Sjratwn Financial Reserve levels
3. Estimating tot full cost of operating your system next year
4. Estimating system revenue from the sale of water
5. Adjusting revenues to cover estimated expenses

1. Debt Service Reserves. If you borrowed money to build your system, chances are your
   system obligated itself to place money in a Debt Service Reserve until an agreed upon
   dollar amount is reached. The Debt Service Reserve is in addition to your loan
   repayment. The Debt Service Reserve helps insure you can make your payments on time
   even if you have a financial emergency.

   If required by your loan agreement, having a Debt Service Reserve is a legal and binding
   obligation of your system. Dig out all your loan papers and see if you've lived up to your
   agreement. If you haven't, determine how much you need to budget for next year in
   order to start meeting your obligation.

2. System Financial Reserves. Your system started wearing out the day they turned the
   water on. Pumps and other equipment  are going to wear out, and emergencies will
   happen. The only way to insure your customers an uninterrupted supply of safe drink-
   ing water in the future is to set aside money each month to cover these costs. If you
   haven't set up adequate reserves, your system is heading for a financial crisis.

We recommend setting up a single Financial Reserve Account at a bank.  Make sure it's
earning interest. Write a check to it each month.

The Financial Reserve Account is used for three purposes. Following each purpose is a sug-
gested method for calculating how much to budget for each:

A. Planned Equipment Repair & Replacement. Review the source, treatment, storage,
   and distribution parts of your system and  make a list of major equipment. Work with
   your operator to estimate the time* between breakdowns and the remaining life expec-
   tancy and l^hoement cost of each piece of major equipment.

B. Emergenqql^airs. Review what emergencies took place in the last 12-24 months and
   how much each cost to resolve. Think about the  age of your system and the condition
   it's in. Involve your operator. This estimate calls for your best judgement.

C. Planned System Expansion and Improvements. Estimate the cost of each future ex-
   pansion or upgrade the Board has agreed  to do.  How much will you set aside toward
   the project, and how much will you finance?
Community Resource Group, Inc. /Southern RCAP                                         11

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 Using the worksheet below, determine how much to include in next year's budget for each
 purpose. Added together, they tell you how much to budget for Financial Reserves.
WORKSHEET il: FINANCIAL RESERVES
PART A: Calculating
Annual Budget Amoui
Major Equipment:
1.
2.
3.

PART B- r«Litl*riM

Potential Emergency:
1.
2.
3.

PART C: Calculating
Annual Budget >^pord\
Planned Equipment Repair md RfpUtflWilt
*t~replacement cost* yean remaining life
Yean Remaining Lif* : Rfpjacrmnit Cost
~ Estimate*
$
$
$
Total






Total

M of cost to be te{f-Jlnaneed + number of yean until st

Proposed Capital Projects: Yean 'til start Portion to be
of project: sdf-financed:
1.
2.
3. . t
*
$
$
S
Total

Annual Amount to
Budget:
$
$
$
$

Estimated Cost:
$
$
$
$
vt of project
Annual Amount
to be Budgeted:
$
S
$
$
NOTES:
12
Community Resource Group, Inc. /Southern RCAP

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Chapter IV: Developing Your Expen$e Budget
In the last chapter we talked about the importance of the Budget as a powerful tool for
achieving financial stability. We suggested adopting a five step Budget Development
Process and discussed how to establish your Debt Service Reserve and System Financial
Reserve as the first two steps in creating the budget. In this chapter we'll explore step three:
Estimating the full cost of operating your system next year.

Before we start estimating expenses, we'd like to make two recommendations. First, make
sure you have a single Board member who's responsible for coordinating the budgeting
process. The full Board needs to be involved in all decision-making, but you need one
person to organize the activities and collect information.

If you offer both water and sewer service, our second recommendation is that you develop
separate budgets for each service even if you operate them together. Separate budgets al-
low you to determine the real cost of each service. Divide shared costs, such as.employ-
ees, between the two budgets.

Establishing Expense Categories

The first step in creating an Expense  Budget is to determine what your Expense Catego-
ries are. Expense Categories are simply the major types of expenses your system has each
year.

Check to see tfyour state law requires use of specific budget categories. If it does, use the
required categories, and follow the process outlined here for determining how many dollars
to budget in each category.

If you have a budget, review the categories it contains. If you don't have a budget, work
with your bookkeeper and make a list of the major expenses your system has each year. The
list below should help.

Typical Expense Budget Categories:

a Annual
a
a Salaries or Personnel Costs
a Office Utilities
a Operating Utilities
o Operating Supplies
o Office Supplies
a Contract System Repairs
a Transportation Expenses
a Equipment Leases

Community Resource Croup, Inc./Southern RCAP                                         13

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 o Insurance
 a Office Rental
 o Accounting, Auditing, Legal, Engineering
 o Postage
 a Telephone
 a Licenses, Dues, Subscriptions
 a Out-of-town Travel
 a Taxes (except payroll taxes)

 Always make Annual Debt Service your first budget category  (your loan repayment on
 borrowed funds). This is a legal requirement in many states. Your creditors made it pos-
 sible for your system to be built. Budgeting to pay them back on time protects your com-
 munity's reputation and will improve your chances of being able to borrow again, should
 the need arise.

 In order to keep your budget manageable, try to limit the number of expense budget cate-
 gories to between 8 and 12. You may need to combine some of the categories. For example,
 Office Rental and Office Utilities might be combined to form a single category called Office
 Costs.

 Try to create categories that clearly describe what expenses are included in each category.
 For example, the category Operating Supplies is more descriptive than just Supplies. Per-
 sonnel Costs is better than Salaries if the category includes fringe benefits as well as
 salaries.

 Once you* ve decided on your categories, work with your bookkeeper and agree as to exactly
 what types of expense* win be included in each budget category.

 This can be done by writing a particular budget category at the top of a sheet of paper and
 then making a list of all the specific types of expenses that will be combined in the category.
 Your list might look something like this:

 Types of Expenses in each Budget Category:
           _
    a Afltiul Payment on Bonds
    a Annual Payment on Loans (principal and interest)

a Personnel Costs:

    ° Employee Salaries
    o Payroll Taxes
    a Employee Health Insurance Premiums
    ° Workman's Compensation

14                                        Community Resource Group. Inc. /Southern RCAP

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 ° Operating Supplies:

    o Small Tools
    a Pipe
    a Repair Puts
    a Chemicals

 a Insurance:

    a Liability Insurance
    <=> Physical Damage Insurance
    a Vehicle Insurance
    a Bonding of Employees
    a Board Liability Insurance

 Agreeing on what specific type of expenses make up each Budget Category is critical if the
 budget is to be of use to the Board. The bookkeeper will use the list to place items in the
 right category when reporting expenses to the Board each month.

After you've agreed on your budget categories (and what's included in each category) use
Worksheet #2 on the next page and list your categories under the Budget Category column.
Community Resource Group, Inc./Southern RCAP

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    WORKSHEET #2: EXPENSE BUDGET
We've created this Expense Budget Worksheet for your Board to use as you develop your yearly Expense
Budget. Just follow the instructions on the next pages to fill in each column. You may want to make
photocopies of the Vbrksheet so you can do initial drafts and later update your Budget throughout the
year.
Column A Column B Column C Column D
Budget
Category
1. Annual Debt
Service
2.
3.
4.
5.
6.
7.
8.
9.
10.
Last Year's
Actual Expenses
$
$
$
$
$
$
$
$
$
$









Current Year's
Expenses

















Total
Changes in Next
Year's Budget










-





Operating Expenses !
Next Year's
Estimated
Expenses








t
DEBT SERVICE RESERVE (See Chapter III)
Debt
1.
2.
3.
- *

Totaltobe
Accumulated


Current Amount in
Reserve Fund


Annual
Installment


Total amount budgeted for all Debt Service Reserves $
FINANCIAL RESERVES (See Chapter III)
1. Equipment Repair and Replacement
2. Emergency Repairs
3. Planned Expansion and Improvements
$
$
$
Total amount budgeted for all
1 Financial Resc


rvesS
Total all Expenses $
16
Community Resource Group. IncJSouthern RCAP

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Instructions, for completing Worksheet #2

1. Column A (La* Year's Actual Expenses): Have your bookkeeper calculate how much
was spent last year on each of your proposed budget categories. This information should
be available from last year's monthly income and expenditure statements or the closing fi-
nancial statements. It'll take some work to fit last year's expenses into your new budget cate-
gories but in future yean the job'll be much easier.

Once you've calculated last year's expenses according to your new budget categories, list
them  on your Worksheet, in Column A, next to the appropriate budget category.

2. Column B (Current Year's Expenses): Current year expenses equal the actual expenses
to datep/us an estimate of expenses for the remaining months of the year. Have your book-
keeper calculate how much you've spent so far this year in each budget category.

If you're in month ten of your fiscal year, divide the total expenses to date in each category
by ten to get the monthly average expense. Multiply this number by twelve to get the current
year expenses. Write your current year expenses in Column B.

3. Column C (Changes in Next Year's Budget): If you compare last year's and the current
year's expenses you'll see changes in various categories. Chances are that next year's ex-
penses will be different from this year's. Some expenses will go up, others down. Overall,
the budget will probably increase slightly.

To complete Column C, think about all  the expenses in each category that are likely to
increase or decrease and by how much. For example, what changes are likely to occur in
Personnel Costs?

Costs likely to change:

    a postage for mailing bills
    a employee raises
    o increased employee hours
    a new employees
    a utilities
    a pipe
    a
    a
    a equipnl&f teases
    o health insurance premiums
    a purchased water
    a chemicals
    a frequency of repairs as equipment gets older
    ° professional services such as audit, legal, engineering
    a vehicle insurance
    a gasoline
    a cost/frequency of water quality testing
Community Resource Croup, Inc. /Southern RCAP

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 Often it's difficult to estimate how much a particular expense will change. Completing
 Column C calls  for careful  discussion  and  the best judgement of the entire Budget
 Committee.

 4. Column D (Estimating Next Year's Expenses): If you've taken the time to carefully
 complete Columns A, B, and C on the worksheet, you should have a pretty good idea what
 expenses were last year and what they're running this year. You've also looked at what
 changes are likely to occur in each category next year.

 Estimating next year's budget will come down to your best judgement based on current and
 previous year costs and any likely changes you're able to identify. Develop next year's cost
 re*«nvrtr one category at a time. Keep your bookkeeper and operator involved. Try to
 estimate each category of expense as accurately as possible.

 Resist both over- and under-estimating. The more accurate the budget is, the more useful
 it will be. Complete Column D of the Worksheet

 To arrive at the TOTAL estimated cost of operating your system next year, don't forget to
 include the Debt Service Reserves and System Financial Reserves from the worksheet on.
page 12.

 A final word:

 We believe you can develop a workable and extremely useful budget without using some
 standard, but confusing, accounting conventions.

 For example, we've chosen to ignore depreciation as an unfunded expense. Also, we treat
principal repayment on debt as an expense, and don't include uncollectable accounts as an
expense. If you want to learn more about the above-mentioned items, talk with your auditor
and decide whether/how to treat them in your budget.

Again, check your state'* laws to see what budget categories may be required.

              thing is to develop a budget that your entire Board understands and can use
                  and  monitor revenue.
NOTES:
18
Cammiuuty Retource Group, Inc./Southern RCAP

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Chapter V: Estimating System Revenue and Balancing the Budget


Estimating System Revenue

We've looked at the overall budget process, how to calculate the debt service and finan-
cial reserves, and how to estimate expenses. In this chapter we'll look at Estimating System
Revenue and Balancing the Budget.

Most systems have two types of income — operating revenue and non-operating revenue.

Operating Revenue is system income from:

   • the  sale of water or sewer service
   • connection fees
   • late payments, penalties and reconnection fees
   • forfeited meter deposits

Non-Operating Revenue is income from:

   • interest on checking accounts
   • interest on reserve accounts
   • meter deposits

When estimating revenues, we recommend you ignore non-operating revenues and only count
on Operating Revenues to cover the expense of operating your system next year.

Estimating Revenues is very similar to the process for estimating operating expenses. Start
by having your bookkeeper make a Worksheet like the one on the following page.

Instructions for completing Worksheet #3 on page 20:

1. Column B (Last Year's Revenue): Complete Column B by filling in the operating reve-
nues for each month of your last* fiscal year.
2. Column GmKrrent Year's Revenue): To complete Column C, fill in operating reve-
nues for each flam you've completed in the current year. Add up the total revenues for
all months completed so far, then divide the answer by the number of months added together
in Column C.  This win give you the Average Monthly Revenue for the current year. Use
this average monthly revenue figure to complete the remaining months in the current year.
Add the total revenues to get a twelve month total.

3. Column D (Change): For each month, subtract last year's revenue from the current year's
revenue (Column C minus Column B). Write the answer in Column D.
Community Resource Croup, Inc. /Southern RCAP                                        19

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WORKSHEET #3: SYSTEM OPERATING REVENUE
Column A
Month
1.
2.
3.
4.
5.
6.
7.
8.
9.
w. jr
11.
12.
TOTAL
Column B
Last Year's
Revenue
$
$
$
$
$
$
$
$
$
$
$
$
5
Column C
Current Year's
Revenue
$
$
$
$
$
$
$
$
$
$
$
$
*
Column D
Change
(C minus B)
$
$
$
$
$
$
$
$
$
$
$
$
*
Column E
Next Year's
Estimated
Revenue
$
$
$
$
$
$
$
$
$
$
$
$
$
20
Community Resource Group. Inc./Southern RCAP

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5. Column E (Next Year's Estimated Revenue): The Budget Committee needs to look at
the figures for each month in Columns B and Cand the amount of revenue change each month
from last year to this year. This is the figure in Column D. Try to figure out why the revenue
for the month changed from one year to the next.  Some things that affect revenue are:
               • rate increases              • drought
               • new customers              • temperature
               • losing customers            • uncollected bills

What do you think will happen to revenue for the same month next year? Will it continue
to go up or down? By the same amount? By a different amount? Will the month's revenue
be closer to this year's or last year's revenue? WHY? Discuss it carefully with your entire
Budget Committee. The estimated revenue that's finally written in Column E must repre-
sent the best judgement of the entire Budget Committee.

Try to estimate next year's revenues as accurately as possible. If you're in doubt, estimate
revenue low and expenses high. It's safer that way.

Balancing the Budget

Systems that underestimate expenses or overestimate revenues just to make the budget
balance consistently wind up in financial trouble. Don't do it!

Start the budget balancing process by comparing your estimated revenues with your esti-
mated expenses. Will your estimated revenues cover next year's estimated expenses? Don't
be surprised if your estimated expenses are higher than your estimated revenues.

When was the last time you had a rate increase? No one likes to raise rates. Every year your
system is growing older and requires a little more  maintenance and repair. Inflation con-
tinues to push up the price of utilities, chemicals, repair parts and labor. New regulations
have to be met. Everything's going up but the water rates!

Raising  rates is a last resort Let's look at some things you can do now to help balance the
budget without raising rates. By now we mean things you can start planning and working
on to help balance the budget even before the new fiscal year starts.
       THINGS TO HELP BALANCE THE BUDGET WITHOUT RAISING RATES

Collect overdue Accounts: If your collection and shutoff policies aren't being strictly enforced,
your system is losing revenue and the majority of your customers are subsidizing stow payers!
Is the penalty for not paying high enough to make people want to pay on time? Divide the
overdue accounts among Board members for collection. Let people know you're serious!
Community Resource Group, Inc./Southern RCAP                                          21

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 Get serious about leak detection: Subtract the number of gallons you billed customers for
 last month from the number of gallons you produced or purchased last month. Most of the
 difference is lost revenue for your sytem. If you produce your own water, your water loss
 should be less than 15% of all water treated. If you're buying treated water, water loss should
 be under 10%.


 Make sure your cash registers are working: Water meters are your system's cash reg-
 isters. If you don't have meters, install them. If you're only partially metered,  finish the
 job. Old meters often slow down and fail to register all of the water being used. Set up a
 program to test residential meters for accuracy every 8-10 years. Larger commercial  me-
 ters should be tested more frequently. Increase your revenues by replacing inaccurate meters.

 Update your fees, deposits and service charges: Are they out of date? Does your fee struc-
 ture cover the extra cost for night and weekend work? Consider a fee structure that pays
 the full cost of providing the service plus a surplus. Make sure your policies are in writ-
 ing and insist that all customers be treated the same.

 Improve customer billing: Read your meters and get your bills out in a timely manner.
 Examine the efficiency of your current billing system or the possibility of going to a com-
 puterized system. Be sure everyone who's receiving water is getting a bill.

 Get tough on cheaters! There's no such thing as Free Water from a public water system.
 ff'someone's not paying for water, the rest of your customers are paying more dun they should!
 Establish stiff penalties for people who tamper with meters, make illegal taps, by-pass meters,
 take water from hydrants, or use other means to cheat the system.

 Pot your money to work: When money is collected, is it getting in the bank right away?
 Are your bank accounts drawing the highest interest possible?  Shop around for banking
 services. Use more than one bank. Place Reserves in high interest Certificates of Deposit
 or money market accounts. Non-profit water associations can and should be earning inter-
 est on their accounts.
                         t
 Buy in qpMptity: Consider purchasing chemicals and supplies in bulk to save money. Ask
 for bidjAihigh cost items. Compare prices. Consider getting together with nearby systems
 to buy m§pa quantities or purchase equipment that can be shared.

 Add new customers: Are you serving everyone you can reasonably serve? Are there people
 living along or near your lines who could be hooked up at little or no cost to the system?
 Start a campaign for new customers.

 As you can see,  n^ere is a variety cftnmgs a system can do to iricrease revenue
 When you're balancing the budget, a. donor saved is worth just as much as an additional
 doBar of revenue!
22                                          Community Resource Group. Inc./Southern RCAP

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Chapter VI: Monitoring the Budget


You've worked hard to prepare the budget. Expenses and Revenues have been estimated
as accurately as possible. You've carefully adjusted revenues or reduced expenses to
produce a balanced budget. Now it's time to make the budget work for you! No matter how
good your budget is, it won't stop financial crises and it won't help you achieve financial
stability for your system unless you use it every month.

For the Board to adequately monitor the budget, your bookkeeper must gather and report
financial information to the Board every month. No one can make decisions without infor-
mation. To monitor your budget and measure the financial performance  of your system,
we suggest that financial information be presented in the form of the Monthly Financial
Report in this chapter.

The Monthly Financial Report form on the following page will provide your Board  with
the information they need to monitor your system's financial condition each month.  In
order to do your job as  a responsible Board member,  you'll need all  the information
contained on the form every month!

It will take your bookkeeper until at least the 10th of each month to complete the Monthly
Financial Report for the previous month. It's a good idea to have the Report mailed to each
Board member for review before the monthly Board meeting.

Instructions for completing  Worksheet #4 on page 24:

1. Column A: Column A has Sections numbered I through VI. In Sections 1 and II, change
or add any items to match the Revenue and Expense line items you used in preparing  your
budget, or have your bookkeeper consolidate your budget line items into those listed on the
form when preparing this report

Section III. Think of your reserves as an expense and write a check monthly to each Re-
serve Account equal to at least I/12th of the budgeted amount.

Section TV. If jMr Revenues exceeded your Expenses and payments to Reserves, you had
an Operation CMK If Expenses and payments to Reserves exceeded Revenues, you had an
Operation LodS

Section V. This section provides information about actual cash on hand. Dollar amounts
shown in this section will include interest earned on bank accounts and should be taken from
your monthly bank statements.

Section VI. This section shows the total of past due amounts customers owe your system.
Have your bookkeeper complete a Past Due Account Summary (page 25) and attach it to
each monthly report.

Community Resource Group, lite. /Southern RCAP                                        23

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     #4:  MONTHLY FINANCIAL REPORT FOR   	MONTH OF FY
      •	  .                 	number
                             B.
C.
D.
Budget Category
                                        E.          F.
                                     Projected     Percent of
   Actual       Actual                Performance     Budget
Current Month  Year-to-Date Annual Budget (C+mont* x 12)    (G+Oi
I.  REVENUES
   Water Sales
   Connection Charges
   Customer Deposits
   Other

     SUBTOTAL SECTION I

D. EXPENSES
     SUBTOTAL SECTION U
   TRANSFERS TO
   Customer Deposits
   Debt Service Reserve
   Financial
    SUBTOTAEjKTION in -

IV. OPERATHJTOAIN (LOSS).
            t- Svcflbn t + SwttoM m
                           V. RESERVE ACCOUNTS STATUS (Seepage 16)
                                      Checking
         Deposits    Debt Service    Flmandal
                      Beguming of Period.
                          End of Period.
                             CHANGE
VL TOTAL PAST DUE AMOUNT OWED (From Past Due Account Summary on page 25) $.
      24                                      Community Resource Croup. Inc./Southern RCAP

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                          Past Due Account Summary
         Date Prepared:

             Days Past
             Due:

             0-30

             31-60

             61-90

             Over 90
By:
 Number of
 Accounts:
Amount
Due:
                                           Total $
2. Column B: Report in Column B money the system actually received and actually spent
during the month item by item.

3. Column C: Report here what has happened in all previous months of the current fiscal
year, including the current month.  For the first month of the fiscal year, Column C will
equal Column B. For the rest of the year, Column C will equal Column C from ^tit previous
month's report phis Column B on this month's report.

4. Column D: Use this column to record the budget adopted by your Board prior to the start
of the fiscal year. Figures in this column do not change unless a revised budget is officially
adopted by the Board during the fiscal year.

5. Column E: If this report is, for example, for the 7th month of the fiscal year, divide each
line item in Ootomn C by 7 to calculate the monthly average. Then multiply the monthly
average by iJJfcestimate the Annual Projected Performance of each line item. In Section
II, Expensea$M$Ht projections appropriately for any annual, semi-annual, or quarterly
expenses you*ve paid (such as one-time or quarterly insurance premiums).

6. Column F: Divide Column C by Column D to see how your actual performance com-
pares to your budget estimate. If, for example, you are 6 months into your fiscal year, you
should be at approximately 50% of the amounts budgeted in Column D.
Community Resource Group, Inc./Southern RCAP
                                               25

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 Using the monthly Financial Report information, ask your bookkeeper to include a brief
 written report summarizing unusual changes or anything the Board should pay special at-
 tention to when reviewing the report. Study the report carefully.

     • Do revenues exceed expenses for the month? If not, why not?
     • How do actual revenues and expenses compare with the annual budget?
     • If things continue as they're going, will you have a surplus or deficit at the end of
       the year?
     • Are the transfers to reserves being made?
     • Which line items are exceeding budget estimates? Why?
     • If certain expenses are higher than budgeted, what can be done to reduce them?
     • What about uncollected amounts from past due water bills?

 Revising the Budget

 Resist revising the annual budget  unless it becomes clear that estimated revenues  and
 expenses are significantly different than actual revenues and expenses.  Instead, use the
 Monthly Financial Report to guide your effort to reduce expenses and maximize revenues.
 If you find it necessary to increase water rates in order to increase revenues, then you'll need
 to formally revise the budget.

 Study the Monthly Financial Report:

    • Ask questions
    • Discuss what's happening
    • Try to figure out why
    • Take action to control expenditures and increase revenues

 NOTES:
26
Community Resource Group. Inc./Southern RCAf

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Chapter VII:  Developing and Implementing a Collections Policy
Need additional revenue?

Don't want to increase water rates?

Want to treat your customers fairly?

One of the best ways to increase revenue without raising water rates is to have and enforce
a fair "collections" policy. Getting tough on collections in a small system isn't much fun.
Your customers are friends and neighbors. You know who's having trouble making ends
meet financially, who's been sick lately or laid off from work. It's hard to tell people, "Pay
your bill or we'll shut off your water."

On the other hand, each gallon of water you supply costs the system a certain amount to
provide. If one customer doesn't pay his or her bill, your other customers eventually wind
up paying their share. It's not fair to ask prompt paying customers to subsidize those who
don't pay or are always late.

Your revenue budget was based on estimated monthly collections. Past due accounts that
are uncollected make it harder to balance your budget, pay into your reserve accounts, and
pay your monthly bills. Past due accounts, if allowed to multiply, weaken your system's
financial foundation.

Don't let poor collection practices jeopardize your system '$ ability to provide safe,  de-
pendable, and fairly priced water to your customers!

A good collections policy must protect the rights of both the system and the customers, be
easy for customers to understand, and fairly enforced.

There are three elements in attacking the problem of past due accounts. Your Board has to
commit to all three:

1. Establish gjjftten collections and termination (shut-off) policy.
2. Put your BJHg into practice.
3. Monitor tuCTBeOiveness of your policy each month.

Review the checklist on the next page. The examples in italics comprise a basic collections
policy you can implement for your system if you don't already have one.
Community Resource Croup, Inc. /Southern KCAP                                         27

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                        COLLECTIONS POLICY CHECKLIST
1. Customer Hilling
 a Does your policy say that customers will be billed each month according to the system's
   water rate schedules?
 a Does the policy state the dates customers' meters will be read each month?
Example: Water meters will be read between the 20th and 25th of each month.
 o Does it state when bills will be mailed?
Example: Bills will be mailed on or about the 1st of each month.
 Q Does it specify that water use and sewerage will be separate items on the bill?
2. Payment Terms
o Does the policy state the date by which bills have to be paid by each month?
Example: Payment is due by the 15th of each month.
a Do you specify the amount of the late charge people will have to pay if they pay after
   the due date?
Example: Payments made for service after the 15th of the month and before the last day of
          the month will incur a penalty equal to 10% of the water bill or $15.00, which-
          ever is less.
3. Termination of Water Service for Non-Payment
a Does your policy specify when a customer's service will be shut off for non-payment?
Example: Failure to pay the entire amount due by the last day of the month will be subject
          to termination of water service by the 5th of the following month.
a Do you provide for a written shut-off notice?
Example: A shut-off notice will be mailed to customers no lour than 10 days prior to shut-
 o Does fpv policy specify how customers can avoid having their service terminated?
 Example: Customers may avoid termination of water service by:
           1. Paying the amount in arrears at the system office before the scheduled shut-
              ^date.
           2. Receiving a hardship deferment and signing a deferred (time) payment plan
            specifying payment terms before the scheduled shut-off date.
28                                         Community Resource Group. Inc./Southern RCAP

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4. Deferred (Time) Payment Plan for Hardship Cases

a Does your policy state how a customer may apply for a time payment plan based on hard-
   ship?

Example: A customer may apply for deferred payment before the shut-off date by claiming
         a hardship by going to the system office and filing with the bookkeeper. If the
         hardship qualifies, the customer will sign a deferred payment plan.

a Does your policy state eligibility criteria for hardship cases?

Example: Hardships eligible for time payment plans are:

             loss of job
             medical emergency
             excessive bill (such as one resulting from large leaks)
             extraordinary financial difficulties

a Does your policy specify the maximum length of time for which a time payment plan can
  be set  up?

Example: The maximum length of a deferred payment plan shall be 90 days unless the
         approved plan specifies otherwise.

a Does your policy set minimum payments for time payment plans?

Example: Minimum monthly payment amounts shall be not less than one-third the total
         amount due unless the approved plan specifies otherwise.

o Does your policy specify that deferred payments will be paid in addition to the customer1 s
  regular service bill?

5. Appeal of Shut-Off Notice

a Does your policy specify who is designated by the Board to hear customer appeals and
  what they have the power to do?

Example: If the system bookkeeper determines the customer is not eligible for a time
         payment plan or the customer is dissatisfied with the terms  of the repayment
         agreement, the customer may appeal to the Board member designated by thefiill
         Board to resolve appeals.

a Does your qffera's policy make provision for a written record of all applications for
  hardsnip-bajfltf time  payment plans and appeals?

Example: A written hearing record will be prepared and maintained on file by the system
         representative.

o Does your policy specify that a customer may appeal to the full Board and under what
  conditions?
Example:
         customer has followed the above'administrarive procedures. Service will be shut
         off as scheduled regardless of a customer's intent to appeal.


Community Resource Group, Inc./Southern RCAP                                          29

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 5. Reconnectioo of Water Service after Termination for Non-Payment

 a Docs vour policy state specifically how customers can get their water service restored
   after it's been terminated?

 Example: Customers desiring restoration of water service after termination for non-pay-
          ment must:

          1. pay arrears in the full amount, and
          2. pay additional deposit in accordance with the fee schedule of the system, and
          3. pay the service fee far reconnection in accordance with the fee schedule of the
          system.

 Important Note: Collection practices are regulated by federal laws. Make sure your policy
 follows the legal requirements for your state.

 Putting the Policy Into Practice

 The most important part of a written collections policy is putting it into practice — imple-
 menting it. There's no one right way to implement a policy. But, however you do it, it needs
 to be clearly stated in writing, available and understandable to everyone,  and fairly
enforced. Board members, in particular, must not make exceptions to the policy.

If your system presently has a lot of past due accounts or some customers who owe very
large amounts, your Board needs to take some personal action to get things moving. Board
members should divide up the problem accounts and call or visit the customers to collect
the past due amounts or set up time-payment schedules.

 Your Board, however, should set a limit on their involvement. For example, the Board can
decide to assist for 120 days, or until past due accounts have been lowered to a manage-
able level.

 Monitoring Your Policy's Effectiveness

The easiest way to monitor your policy's effectiveness is to have your bookkeeper present
a Past Doe Accounts Summary, like the one on page 25, at every monthly Board meeting.
Set a gotfio always keep past due accounts below a specific dollar amount.
Getting lough on collections may be the revenue increase your system needs to maintain
financial stability. Boards are reluctant to develop and practice tough collections policies
because they mink customers will be unsupportive. If your collections policy is clear and
administered fairly, customers will support your businesslike approach to running the
system and your efforts to protect their rights to dependable water and fair treatment.

A final suggestion: Why not give your customers the opportunity to voluntarily add an extra
dollar to their payments to be used for a "Good Neighbor Fund"  to assist  elderly or
temporarily unemployed customers who are having trouble paying their water bills?


30                                        Community Resource Croup, lite. /Southern RCAP

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Chapter VHI: Establishing Internal Controls


$5,000 Missing from Water System!

IRS Files Lien against System Directors!  -

Citizens Call for State Audit of System!

These are newspaper headlines your water system can do without.

But this couldn't happen to your system ... or could it? Unfortunately, it does happen to
small systems throughout the country who thought it couldn't happen to them.

Most people are honest. But even good, honest people forget, make unintentional errors,
and waste time correcting mistakes. Inefficiency. Waste. Mistakes. Fraud. Theft. Any one
of these problems can hurt your system's ability to provide an uninterrupted supply of safe,
fairly priced water to your customers — even if it doesn't make the newspaper headlines!

As volunteer Board members you can't (and shouldn't) be at the water system office every
day checking on things. But your Board is responsible for insuring that your system's
money and records are properly safeguarded.

Well run systems use written Internal Financial Controls to help safeguard their money
and records.

While no method is failure-proof, used properly, a good set of internal financial controls
will help increase efficiency, and, at the same time, minimize waste, errors, fraud, and
theft.
Does your system have adfquafr Internal Financial Controls? When was the last time you
reviewed them? If it's been more than a year, it's time to take another look at them.

Good internal control systems have certain things in common. The Internal Control
Review Questions on me following pages are designed to make you aware of the basics of
internal finaggjaf control. Use them as a guide to begin discussing and reviewing your
system's iot|flB
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             INTERNAL CONTROL REVIEW QUESTIONS

 General Controls

 1. Are your employees competent? Are the authority, responsibility, and duties of each
   employee clear? Your employees are your most important internal control. Employees
   can't work efficiently when they're unsure about what to do. Assigning responsibility
   promotes care and efficiency.

 2. Are your management policies and procedures in writing? Clear policies help employees
   handle routine matters efficiently. They provide workers with the security of knowing
   exactly what the Board expects.

 3. Are the people handling money or signing checks insured (bonded)? Fidelity insurance
   (bond) is generally inexpensive. The amount of the bond should cover the maximum
   amount of money a person would have in their control at any one time.

 4. Does your auditor include a review of internal controls during the Annual Audit? Do
   you act on die auditor's recommendations?

 Cash Receipt Controls (money coming into the system)

 1. Is a written receipt given for every payment received whether by check or cash?

 2. Are all receipts recorded immediately in a daily cash journal showing the person's name,
   check number, amount, and purpose of payment?

 3. Are all funds received deposited promptly? The same or next day?

 4. Can each payment received be traced from (a)receipt to (b)joumal entry to (c)the bank
   statement and,  finally, to (d)the general ledger posting?

 5. Are all checks immediately stamped "For Deposit Only*?

                prohibited from cashing checks or paying for things out of receipts so
             received can be deposited exactly as it comes in?


 Cash Disbursements Controls  (money paid out by the  system)
 1. Do you have a system for reviewing and approving purchases and payments in writing
   before they are made?

 2. Do you require two signatures on all checks, or checks over a certain dollar amount? Are
   check signers designated by the Board?
32                                      Community Resource Group. Inc./Southern RCAP

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3. Can paid invoices be readily retrieved from the filing system by the bookkeeper?

4. Does the person preparing checks attach documentation (such as an invoice or timesheet)
   to each check before presenting them for signatures?

5. Are invoices marked "PAID," along with the date paid and the check number written
   on the invoice before being filed?

6. Is the person who prepares the checks and safeguards the checkbook prohibited from
   signing checks?

Bank Account Controls

1. Are all bank accounts authorized by the Board? Do you know how many you have? Do
   you need all those you have?

2. Is the Bank Statement reconciled every month against deposit slips and cancelled checks?
   Is this balance verified with the general ledger?

3. Does the person making deposits get a receipt from the bank for each deposit?

4. Are deposit slips filled out completely with enough information (names and amounts of
   individual checks included in the deposit) to determine the source(s) of the checks being
   deposited?

5. Does another responsible individual review the monthly bank account reconciliation?

6. Are the names on file at the bank of all persons authorized by the Board to sign checks
   or withdraw money from each account up-to-date?

Payroll  Controls

1. Are all employees required to turn in signed timesheets before getting paid?

2. Is the pnqgrjKnount for income tax and social security being withheld from each em-
   ployee's*
3. Is the amount withheld for income tax and social security being sent to the appropriate
   authorities on time in order to avoid penalties and IRS liens? Are the withholding reports
   reviewed from time to time by someone other than the person preparing them?

4. Does the payroll register contain the name of each employee, their gross pay, amount
   withheld, net pay, and the payroll check number?
Community Resource Group. Inc. /Souther* RCAP                                         33

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 5. Are pay. changes for employees approved in writing by the Board and given to the
   bookkeeper as authorization to change the amount a person is paid?

 6. Is a record of vacation and sick leave earned, taken, and the balance remaining kept on
   each employee?

 Financial Report Controls

 1. Do you receive a written monthly financial report such as the one suggested in Chapter
   VI?

 2. Does the Board review it carefully each month and ask the bookkeeper questions?

 Some Final Questions  . . .

 1. As a Board member, do you  have a clear sense of how your system is doing financially
   from month to month?

 2. Are you satisfied that your internal financial controls are adequate?

 3. Is your Board working to correct any weaknesses identified?

 4. Have you set up a schedule for reviewing internal controls from time to time?

 Think of internal controls as preventive maintenance for your financial system. It's easier
 than reading headlines you can do without!

 NOTES:
34
Community Resource Group, Inc./Southern RCAP

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   UTILITY FINANCIAL MANAGEMENT
  Whose Responsibility?
          •Operator




          • Manager




          • Utility Board




          • Tribal Council
Notes:
                          27

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  Identify Utility Expenditures (wampus)
           > P«rsonn«l Costs
           > Utllttlss/Tsstlng
           - Operating Supplies
           > Offlcs Suppllss
           ' Contracted Labor
           ' Vshlcto Expanses
Notes:
                             28

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   UTILITY FiriANCIAL MANAGEMENT
  Identify Utility Expenditures (com d>
           • Equipment Maintenance
           • Accounting
           •Postage
           • Telephone
           • Training Costs
           • Travel/Per Diem
Notes:
                             29

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  Captlal Expenditures
           Do w« hav» to Replace or Repair?



            Pumps         Hydrants



            Storags Tanks    Valves



            Watsr Mains      Pumphouss



            Vehlclas        Equipment
Notes:
                            30

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   UTILITY FINANCIAL MANAGEMENT
  System Financial Reserves
           • Separate Account



           • Reserve Payments



           • Equipment Repair/Replacement



           • Emergency Repairs



           • Planned System Expansions/Improvement
Notes:
                             31

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  How Do We Structure Rates?

           • Did Revenues exceed system expenses each
            of the last thrM years?

           • Art you In Compliance wtth the SOWA?
           • Do you cover Emergency and Preventive
            Maintenance costs as needed?
           ' Have you had a Rat* Increase In the last three
            years?
Notes:
                             32

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   UTILITY FINANCIAL MANAGEMENT
  Your Rates must cover.,
           • Costs of:



              Production



              Treatment




              Storags



              Distribution
Notes:
                          33

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  Your Rates must be...
            > Fair • Enough to cover Full Costs of system
            operation.


            > Equitable - Customers pay Fair Share of the
            costs.


            ' Easy to Understand.


            • Reviewed Annually.
Notes:
                             34

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   UriLIFY FTIANCIAL MANAGEMENT
  Types of Rate Structures
            • Flat Rat* - Customers charged same monthly
             fee regardless of usage.
            • Single Block Rate • Customer charged a fixed
             price per gallon used.
            • Decreasing Block Rate - Price of water
             decreases as the amount used Increases.
            • Increasing Block Rate - Price of water
             Increases as the amount used Increases.
Notes:
                                35

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   Developing a Collection Policy
            Establish s Wrtttsn Policy for collections
            and Ssrvlcs Terminations

            Trfeal/Lsgal Council rsvfsw
Notes:
                            36

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   UTILITY FINANCIAL MANAGEMENT
   Developing a Collection Policy (com-d)


            • Tribal Council adopts Ordinance/Policy

            • Tribal Council adopts Ordinance/Policy Into
             Tribal Law and Order Codes
            • Utility Board monitors collections policy
             enforcement
Notes:
                               37

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  Tribal Utility Collection Policy
  Should Include

          • Customer Billing Info

          • Billing Ritts

          • Billing Schtduto
Notes:
                          38

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  UTILITY FINANCIAL MANAGEMENT
  Customer Payment Schedule
          Due Dates



          Late Charges



          Penalties
Notes:
                        39

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  Termination of Service for
  Non-Payment
           • Termination of Sarvlca Policy


           • Tim* Framas


           • Writtan Notfctt


           • Cuatomara may avoid aarvlca shut-off by?


           • Raconnact Faaa
Notes:
                           40

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   UTILITY FINANCIAL MANAGEMENT
  Payment Plans/Past Due Accounts
          • What Is Utility Policy?
          • What Is the Time Pram* to repay?
          • Appeals/Hearings?
Notes:

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  Monthly Financial Monitoring
           - Utility Board, Manager, Operators review
            at monthly Board matting

           > Review Budgat Una Ham expenditure*
            Ara axpanaaa In Una with ravanua?
Notes:
                             42

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   UTILITY P'lANCIAL MANAGEMENT
  Monthly Financial Monitoring
            • Review Revenue from user fees, new
            connections, etc. Are Revenues supporting
            expenditures? Is there Revenue for Reserve
            Fund?
            Budget Revisions?
Notes:
                             43

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  Review Past Due Accounts
           • Notices of Termination of Service
           • Hardship/Past Due payment plans
           • Appeals/Hearings of Service Disconnection
Notes:
                            44

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  Termination of Water Service
         • wtioM responsibility?
         •Enforcement
Notes:
                         45

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  What Is Conservation?
          • Using Only the Watar you naad and
           saving tlw rast for another tlms.
Notes:
                          46

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   UTILITY rin/UJCIAL I
  Why Conserve Water?
           • Emargancy Situations



           • Largar Population? Sama small Watar Systam



           • Protection of Watar rasarvas
Notes:
                            47

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  Why Conserve Water? (cont-d)
           • Less Production Costs means lower rates (or
            customers

           • Lass wear on Pumping and Treatment
            equipment

           • Fewer repairs/replacements
Notes:
                            48

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  Consumer Education
          ' Conservation Notices
          ' Pamphlets
          ' Group Presentations
Notes:
                         49

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     ILIFY PfJANCIAL
   Leak Detection Program
            • Compart water production against watar
             uaaga. Is thara a Difference?

            • Laak Datactlon programs ahow your
             cuatomara that you ara alao conaarvf ng and
             cutting waatad production coata by repairing
             those leaks.
Notes:
                               50

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  Leah Detection Program (com 


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   Water Meters
             • Customers more accurately billed for actual
              usage.


             • You'll be better able to detect leaks.


             • Customers will be able to track their water
              conservation from their monthly bills.


             • Utility can consider Implementing a water rate
              structure that encourages conservation.
Notes:
                                52

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  Selling your Program to Administrators


           • What Is ths Importance of a sound Utility
            Program?


           • What positive Impact doss ths Utility haw In
            ths Community?


           • Doss sound management of ths Utility have a
            financial Impact on ths Trios?

           • Health Impact In ths Communities.
Notes:
                             53

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   Selling your Program to
   Administrators (coord)
            • Can proper O&M aava tha Utility and tha
            Trlba monay?


            • Ragulatory Conaidaratlona


            • Public Watar Syatam/EPA Complianca


            • Can tha Triba afford not to hava a sound
            Utility?
Notes:
                             54

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