EPA Regional Capacity Development
Coordinator's Handbook
Information for EPA Regional Evaluation of State Public Water
System Capacity Development Programs
TECHNICAL
financial
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Office of Water (4606M)
EPA 810-B-20-003
May 2020
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Table of Contents
Top Ten Regional Capacity Development Coordinator Tasks i
Purpose of the Handbook 1
1. Why is Capacity Development Important? 1
2. Capacity Development Reporting 5
2.1 Annual State Report 5
2.2 Triennial Report to the Governor 7
3. EPA Regional Support for States Revising Their Capacity Development Strategy 8
3.1 Prioritization Methods 9
3.2 Institutional Concerns 9
3.3 State Resources 9
3.4 Baseline Indicators 9
3.5 Stakeholders Identification 10
3.6 Program Analysis 10
3.7 Encouraging State Program Collaboration 10
3.8 Enforcement 12
3.9 Operator Certification 13
4. Key Resources 15
4.1 List of Links to Program Documents and Tools 15
4.2 Using the SharePoint Site 17
Appendix A: History of the Capacity Development Program 18
A.l The Safe Drinking Water Act 18
Appendix B: Capacity Development Program Overview 25
B.l Statutory Requirements 26
B.2 Capacity Development Program Features 26
B.3 Assessing New and Existing Systems 27
Appendix C: How Strategies Were Developed 29
C.l Where should states begin as they start to develop effective and feasible strategies? 29
C.2 Developing State-Level Strategies 30
C.3 Implementing State-Level Strategies 32
Appendix D: Example Desk Guide to Review Capacity Development Program Annual Reports 36
EPA Region 7's Desk Guide to Review Capacity Development Program Annual Reports 37
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Objectives: 37
Timeframe and Overall Determinations of Annual Report Review: 37
Appendix E: Capacity Development (CD) Tracker Instructions 48
Appendix F: Glossary of Terms 54
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Top Ten Regional Capacity Development Coordinator Tasks
1. Review states' annual reports (Section 2.1).
Maintaining effective oversight of state programs for both new and existing systems is a key goal
of the EPA Regional staff involvement in the Capacity Development program. The EPA Regional
coordinators receive Annual Implementation Reports from states and use them to ensure that
states are working to build and maintain technical, managerial, and financial (TMF) capacity.
2. Receive Governor's report every 3 years (Section 2.2).
States prepare a triennial report to the Governor which explains their increases in TMF capacity,
highlights the progress made in improving water systems, and addresses the efficacy of their
Capacity Development strategy. The EPA Regional Capacity Development coordinators receive a
copy of the report.
3. Be a resource to state coordinators (Section 3).
Regional coordinators support state programs during the continual process of implementing,
assessing, and revising Capacity Development programs, and to review and approve any
proposed changes to the development strategy. The EPA Regional coordinators help states to
determine the TMF capacity of their systems and to strategize how best to implement the
Capacity Development program in the context of each individual state.
4. Complete Capacity Development Tracker (CD Tracker) entries (Section 3.6.1).
A key tool in assessing the program's performanceฆ, the CD Tracker database documents Drinking
Water State Revolving Fund (DWSRF) withholding determinations, identifies successful state
practices, and demonstrates improvements in water systems brought about by the Capacity
Development program.
5. Coordinate with other drinking water programs (Section 3.7).
Depending on how the program is implemented in the individual EPA Regions, Regional
coordinators may work directly with other Regional drinking water programs including those that
do oversight on the state Public Water System Supervision program. Capacity development is
most effective when the process is collaborative, and all parties support one another.
6. Coordinate with the EPA Regional Operator Certification team (Section 3.7).
Regional coordinators must work closely with the EPA Regional Operator Certification
coordinators at the EPA to exchange information on operator certification and training
opportunities as well as the status of both programs.
7. Coordinate with the EPA Regional DWSRF team (Section 3.7).
Regional coordinators must inform the EPA Regional DWSRF coordinators when a 20 percent
withholding is required to enforce capacity development eligibility restrictions.
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8. Quarterly review of Enforcement Targeting Tool (ETT) lists (Section 3.8).
The ETT assesses program compliance and TMF capacity for all water systems. The EPA
headquarters and the EPA Regions meet quarterly to review any system that the ETT identifies as
an enforcement priority.
9. Coordinate with technical assistance (TA) providers (Section C.2.5).
The knowledge and perspectives ofTA organizations offer Regional coordinators a critical tool in
establishing effective development programs and can assist in designing capacity-building
activities.
10. Coordinate with other federal agencies (Section C.2.5).
Regional coordinators are best equipped to support the needs of states when they develop
partnerships with other federal agencies, such as the United States Department of Agriculture
(USDA), which may have goals that align with or complement those of the Capacity Development
program.
Keep an eye out for this icon throughout the document. Whenever this appears it indicates that section
is in support of one of the Top Ten Regional Capacity Development Coordinator Tasks.
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Purpose of the Handbook
The EPA Regional Capacity Development Handbook summarizes the capacity development provisions of
the Safe Drinking Water Act (SDWA), including state responsibilities, tools that states can use to help
public water systems (PWSs) develop technical, managerial, and financial (TMF) capacity, and links
between Capacity Development programs and other SDWA initiatives.
Click "Safe Drinking Water Act" to review that section of the document and
learn more about the capacity development provisions and history of
SDWA.
Safe Drinking
Water Act
State responsibilities are included in this document to provide context for the kinds of assistance and
guidance state staff may request from the EPA Regional coordinators. In addition to the roles and
responsibilities discussed in this handbook, the EPA is also involved in providing resources, tools, and
trainings internally (EPA Regions) and to the states. The EPA is also responsible for confirming that the
states are continuing to implement their Capacity Development strategies and ensuring that all new
community water systems (CWSs) and non-transient non-community water system (NTNCWSs)
demonstrate adequate capacity.
1. Why is Capacity Development Important?
Capacity development is important because it protects public health. Capacity development focuses on
resolving the challenges that many water systems (and particularly small systems) face. Such challenges
include, but are not limited to, the following:
Regulatory compliance: Changes to regulations can introduce potential changes to treatment,
monitoring, and reporting. Changes to regulatory requirements can also lead to the need to
update operator knowledge.
Infrastructure needs: Long-operating water systems may need to replace aging infrastructure
and changing regulations or population sizes can also result in the need for new or additional
infrastructure.
Insufficient revenue: Year-to-year differences in state, national, and local funds can lead to
shortfalls in the funding needed to keep a PWS in compliance.
Aging workforce: Retirements can lead to staffing shortages and subsequently greater training
needs.
Training needs: Changing PWS workforce compositions and regulations can introduce the need
for additional training so that operators maintain the knowledge base needed to stay compliant.
Water security: Preparation for natural disasters, cyber threats, and malevolent acts need
appropriate planning, training, and infrastructure.
Declining populations: Population loss can lead to personnel/staffing issues, fiscal constraints
through the loss of tax revenue, and a loss in economies of scale.
Ultimately, building capacity can improve a water system's capabilities to achieve and maintain
compliance with drinking water standards, which can result in more effective provision of safe and
affordable water.
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At the state level, Capacity Development programs help states to improve drinking water quality
by providing a framework within which PWSs and the state can work together and cooperatively assess
the current strength of the system and consider how the water system might address upcoming
challenges. Capacity Development programs provide an additional opportunity for states to gain a more
complete understanding of the extent to which PWSs are meeting the public health protection
objectives of SDWA.
At the system level, Capacity Development programs allow water systems to obtain more robust
TMF capacity which helps them provide safe drinking water. This comes through increased:
Technical capacity, which pertains to source water protection, infrastructure improvement,
or operator training and can help to ensure that the PWS provides water of adequate
quality and quantity.
Managerial capacity, which can include accountability programs, staffing plans, and external
linkages, helps PWSs treat water efficiently and effectively.
Financial capacity, which addresses revenue, credit, and fiscal concerns, ensures that PWSs
have the funds they need to implement effective programs at the water system. Examples
may include loan guarantee or grant programs, responsible rate setting, maintaining
adequate operating and emergency cash reserves, and periodically reviewing budgetary
projections.
Each of the three elements of TMF capacity contributes to safe drinking water. In addition, systems with
TMF capacity are prepared to meet challenges to drinking water quality and quantity. Adequate TMF is
central to a water system's ability to achieve the public health protection objectives of SDWA.
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Federal
Agencies
State Agencies
Program Collaboration
Public Health
Organizations
Environmental
Organizations
Local
Governments
Technical
Assistance
Organizations
Water Systems
Capacity
Development
Collaboration
Click on the boxes in the Capacity Development Collaboration diagram to see examples of these
programs.
Capacity development brings together a variety of stakeholders and programs to facilitate cooperation
across local, state, regional, and national offices. Key roles and responsibilities of some key federal and
state agency staff are reviewed in further detail on the next page.
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Key Roles & Responsibilities
Capacity Development programs seek input from a variety of stakeholders and programs. Soliciting input
from relevant stakeholders through workshops, mailings, and meetings, is crucial to achieving a
successful Capacity Development program. Key roles and responsibilities of some federal and state
agency staff are reviewed in further detail below.
Regional DWSRF
Coordinator
Regional Capacity
Development
Coordinator
Regional OpCert
Coordinators
I
State DWSRF
Coordinator
State Capacity
Development
Coordinator
I
/
State
Administrator
and Governor
State OpCert
Coordinator
I
Water Systems
Please note that while a useful visual, this graphic does not represent all Drinking Water program roles that make
for successful program collaboration. For more information about roles and how to interact, see the Tabletop
Exercise.
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2. Capacity Development Reporting
Top
10
A major goal of the EPA's national Capacity Development program is to maintain effective oversight of
state Capacity Development programs. To maintain effective oversight, EPA's Capacity Development
program assesses state Capacity Development programs for both new systems and existing systems.
Each year, state Capacity Development coordinators must provide reports to their EPA Regional
Capacity Development coordinators. These reporting requirements help the EPA Regions ensure that
states are taking steps to demonstrate that all new CWSs and NTNCWSs have adequate TMF capacity
and confirm the states' assistance to existing systems to build and maintain capacity.
Click "Key Roles & Responsibilities" to review that section of the document
and learn more about specific roles.
Key Roles &
Responsibilities
2.1 Annual State Report
States must send an Annual Implementation Report to the EPA that documents that their Capacity
Development programs are effectively implemented. The annual implementation reporting period must
consistently reflect either the state or federal fiscal year; only one of the two is used for the reporting
period. States must send an Annual Implementation Report to the EPA documenting ongoing
establishment of a fully functioning Capacity Development program within 90 days of the end of the
reporting period. The EPA Regional Capacity Development coordinators can refer states to the EPA's
"Reporting Criteria for Annual State Capacity Development Program Implementation Reports" memo for
guidance on the development of the report.
The EPA Regions are responsible for reviewing the state's Annual
Implementation Report. The EPA Regional Capacity Development
coordinators review the annual reports and complete Annual Regional
Capacity Development Program Evaluation Forms that include state-by-
state information for new and existing systems. Click on "Assessing New
and Existing Systems" to read definitions of new and existing systems.
Each year, the EPA Regions compile information into the Capacity
Development Tracker (CD Tracker) database. The EPA Regional staff are
responsible for uploading Regional CD Tracker information and
uploading state capacity development reports on the EPA national
program SharePoint site. Click on CD Tracker to learn more about the
database.
Assessing New and
Existing Systems
CD Tracker
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2.1.1 Information on New Systems for the Report
The annual state report should include the following new systems information (click on each of the four
boxes below):
Changes to
critical control
ฆ
List of new
points
1
systems
Changes to state
legal authority
\ #
w
List of new
systems that are
Enforcement
Priorities
Enforcement Priorities List
The EPA previously identified systems facing compliance challenges through a Historical Significant Non-
Compliers (SNC) List. Today, the EPA uses an Enforcement Priorities list that identifies systems with an
Enforcement Targeting Tool (ETT) score of 11 points or more as systems that need to be prioritized.
Instead of reporting SNCs, states indicate which new CWS and NTNCWSs have, at any point during their
first three years of operation, incurred an ETT score of greater than or equal to 11. Compliance data
helps states identify whether there are noncompliance patterns during the first three years of a new
system's operation. The ETT list provides an additional resource for identifying systems possibly in need
of state or EPA assistance in the areas of Capacity Development and sustainability.
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2.1.2 Information on Existing System for the Report
The annual state report also includes the following existing system information (click on each of the four
boxes below):
Prioritization
methods
Statewide
capacity
Description of
programs
\ #
Existing
Systems
Reporting
Strategy
update
2.2 Triennial Report to the Governor
In addition to the annual reporting to the EPA, every three years states must also provide a report to the
Governor (RTG) conveying the status of the Capacity Development program. These reports are made
publicly available and include an explanation of the progress made towards improving the TMF capacity
of the PWSs in the state. The report must also address the efficacy of the Capacity Development
strategy and progress made toward water system improvements. A copy of the report must also be
sent to the EPA Regional Capacity Development coordinator.
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3. EPA Regional Support for States Revising Their Capacity
Development Strategy
A continuous step in the capacity development
process is for the states to observe the
effectiveness of capacity development efforts to
make improvements. States should be in a
continuous cycle of development,
implementation, observation, and revision.
As in the other steps of developing and
implementing state-level strategies, the following
five elements can help states to organize their
revision efforts by considering:
1. The methods or criteria used to prioritize
systems,
2. The factors that encourage or impair
capacity development,
3. The way the state will use authority and
resources of the SDWA,
4. The way the state will establish the
baseline and measure improvements, and
5. The procedures used to identify
interested persons.
Because revision is a process of asking questions,
these five elements can help states to ensure that
they are asking the right questions to improve
their plan.
Throughout the revision process, it is
recommended that states continue to
communicate with systems frequently to ensure
that both sides' concerns are addressed. The EPA
Regional Capacity Development coordinators
serve as a resource for states during the process and review and approve any changes to the strategy; it
is vital that the EPA Regional Capacity Development coordinators understand state strategies to inform
guidance they provide to states.
States with Recently Revised Capacity
Development Programs
Many states have revised their Capacity
Development programs to improve access to
safe drinking water. Some examples are
provided below.
Alaska updated its state-level strategy in 2011 to
prioritize systems with the greatest risk.
California makes regular revisions to its state-
level strategy. In 2015/2016, for example, it
combined and simplified two of its strategies.
Connecticul updated its state-level strategy in
2008 and again in 2017 to change the strategy's
emphasis.
Iowa revised its strategy in 2010 to include
optimization activities, which dictate most of the
state's current capacity development activities.
New Jersey revised the scoring process in its
strategy in 2010. New Jersey reevaluates the
strategy on an ongoing basis.
New Mexici revised their strategy in 2014 in
part to establish programs that provide capacity
development beyond the minimum
requirements.
Virginia revised their strategy in 2014 to
improve flexibility and target programs that
were not included in the strategy before.
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3.1 Prioritization Methods
It is recommended that states reexamine the ways in which they are prioritizing systems. The EPA
Regional Capacity Development coordinator can provide the following questions to states to help
them evaluate the effectiveness of their prioritization methods:
~ Are the systems that are receiving assistance the ones that need it most?
~ Is our ranking scheme fair to all systems?
~ Are there particular systems that may be at a disadvantage in our ranking scheme?
~ How can we improve our system prioritization methods in a way that increases fairness and
transparency but does not abruptly change standards?
3.2 Institutional Concerns
It is recommended that states reevaluate the institutional environment in which their Capacity
Development program operates. The EPA Regional Capacity Development coordinator can provide
the following questions to states to help them reconsider key institutional concerns:
~ Have any new laws or statutes been passed that affect TMF capacity?
~ Does the state's Capacity Development program take advantage of positive factors?
~ Does the state's Capacity Development program effectively mitigate negative factors?
~ What additional tools could the state use to mitigate negative factors?
3.3 State Resources
It is recommended that states refine the way that they incorporate the SDWA authority into their
state-level strategies and the extent to which they are meeting their goals. The EPA Regional Capacity
Development coordinator can provide the following questions to states to help them evaluate their use
of state resources:
~ Is the state effectively assisting PWSs in complying with NPDWRs?
~ Is the state effectively encouraging the development of partnerships between PWSs to enhance
their TMF capacity?
~ Is the state effectively assisting PWSs in the training and certification of operators?
~ In what ways could the state improve its progress toward each goal?
3.4 Baseline Indicators
Just as states evaluate the effectiveness of their prioritization methods, it is recommended that they
evaluate the effectiveness of their measurements. The EPA Regional Capacity Development
coordinator can provide the following questions to states to help them evaluate whether their chosen
baseline indicators are effective:
~ Is the volume of activity being measured accurately? As programs change, is the state taking
those changes into account when tallying those programs?
~ What additional types of data would it be useful for the state to have? How can the state gather
these data?
~ Have technology, system size, treatment techniques, or regulations changed? How do these
changes affect the ways in which the state can evaluate compliance data?
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3.5 Stakeholders Identification
It is important for states to evaluate ways to improve their stakeholder community. The EPA Regional
Capacity Development coordinator can provide the following questions to states to help them address
stakeholder involvement:
~ What potential stakeholders are not included in the community but could give an important
perspective?
~ Are all stakeholders being heard?
~ What forums could increase stakeholder engagement?
These and other questions can help states to revise their state-level strategies.
3.6 Program Analysis
3.6.1 Capacity Development (CD) Tracker
In response to the Office of Inspector General's September 2003 Impact of EPA and State Drinking
Water Capacity Development Efforts Uncertaii report, the EPA's Office of Water made a commitment to
establish consistent reporting criteria for the annual state reports. Recommendations within this
evaluation also suggested that the EPA develop a process to help assess the performance of the Capacity
Development program on a national level. The CD Tracker was developed to store state information for
this purpose.
CD Tracker is a database that contains data from state's Annual Capacity Development Reports. This
data is entered by the EPA Regional Capacity Development coordinators into a form fillable word
document titled "Annual Regional Capacity Development Program Evaluation" and uploaded into a
Microsoft Access database by the EPA headquarters (HQ) staff. This information is used to:
Assess the performance of the state Capacity Development program.
Provide documentation on annual EPA Regional decisions regarding Drinking Water State
Revolving Fund (DWSRF) allotment withholding determinations.
Identify successful activities and models initiated by states to further PWS sustainability and
show progress made through the Capacity Development program in improving the capability of
small systems to deliver safe water to the public.
Click on "CD Tracker Instructions" to view suggested information in Appendix B about what to consider
when completing the CD tracker document.
3.7 Encouraging State Program Collaboration
State drinking water programs manage and oversee a variety of programs and activities that support
PWSs, including: Capacity Development, Operator Certification, enforcement, and the DWSRF.
Collaboration among these programs will help ensure the greatest public health protection for the
American public.
Each state has a Capacity Development program to help PWSs, especially small PWSs, build and
maintain TMF capacity. Each state also has an Operator Certification program to help ensure operators
are qualified for the PWS they serve, a DWSRF program to provide financial assistance to water systems
and, if the state has primacy, an enforcement group responsible for enforcing compliance with the
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SDWA. Capacity Development program staff can team up with staff and mangers in other drinking water
programs (such as enforcement, funding, regulatory, operator certification, and more) to address small
system issues.
State staff can hold in-person meetings, conduct
conference calls, correspond electronically, or
use discussion boards to communicate regularly
about the status of PWSs and to analyze PWSs
that are not attaining or maintaining TMF
capacity or compliance. These individuals can
work together to develop ideas to assist
struggling PWSs and to ensure that the PWSs can
maintain capacity after assistance has ended.
This collaboration allows team members to
share their department's expertise and
perspectives to develop new potential solutions
for small system concerns. Furthermore,
discussions among the different individuals and
departments responsible for assisting struggling
or noncompliant PWSs can help everyone
develop a more comprehensive understanding
of these PWSs' unique situations.
3.7.1 TMF Capacity and Key Program Collaborations
Program TMF Capacity
EPA'S Table Top Exercise
The EPA Table Top Exercise: Collaborating across
State Drinking Water Programs to Support
Sustainable Systems (all materials for the exercise
are included in the .zip file.) is an exercise to
enhance understanding of state drinking water
program roles and to emphasize the importance
of collaboration between programs. In this
exercise, participants (state staff who oversee or
assist PWSs, either directly or indirectly) are
asked to take on one of the roles in a state
program, and then to collaborate as a group to
evaluate the needs of example water systems
and to prioritize state assistance. Further details
on background and instructions are provided in
the "Facilitator Packet" document.
Funding and
DWSRF Set-
asides
The DWSRF set-asides provide the states with flexibility to help PWSs
achieve and maintain TMF capacity. The availability of set-aside funds also
provides necessary financial support to help PWSs implement projects,
such as rate studies, that improve system sustainability.
Enforcement
Enforcement activities can highlight compliance challenges that PWSs
face. Enforcement personnel have valuable information on the current
state of compliance issues and challenges throughout the state. This
information can be used to develop policies that help with capacity
building projects that most directly impact the greatest challenges.
Operator
Certification
The Operator Certification program oversees that water system operators
perform their technical duties, which improves the technical capacity of
systems. Systems with adequate managerial and financial capacity
understand the importance of having a certified operator and can afford
to obtain and keep qualified operators.
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3.7.2 Funding Collaboration
Funding collaboration involves the deliberate coordination and careful targeting of available funding
sources to achieve maximum efficiency and derive the most benefit from each dollar spent. Efficient use
of available funds can help state programs to maximize long-term performance of drinking water
systems, helping them to achieve their public health protection goals.
States have found innovative ways to use the DWSRF and its set-asides to fund projects that help
systems achieve and maintain TMF capacity. The EPA Regional coordinators can promote this creativity
by providing guidance on prioritizing projects, potentially providing additional subsidies, and sharing
innovative projects across the EPA Region. This innovation allows states to directly support PWSs in
addressing capacity and sustainability challenges. States can assign priority points for projects that that
will help systems achieve and maintain capacity and they can also coordinate funding with other
departments and agencies to diversify funding sources and fund more projects overall. States have
come up with many simple and innovative ways to coordinate funding. For example, some states hold
quarterly meetings to utilizing statewide pre-application forms. While states have had to invest time to
establish these coordinated activities, many have found that they are highly rewarding. The EPA's
Funding Collaboration Factsheet includes more information and examples from states.
3.7.3 DWSRF Set-Asides
Collaboration between the state Capacity Development and DWSRF coordinators can help identify and
fund projects that help PWSs achieve and maintain TMF capacity. It allows states to directly support
PWSs in addressing capacity and sustainability challenges. When the DWSRF and Capacity Development
programs communicate about shared challenges and solutions, the state can improve access to funding
in a way that helps PWSs to build capacity.
South Dakota: Using the DWSRF to Promote Community Planning and Rate Analyses
Many of South Dakota's small systems were under-charging their customers because they did not
have a method to determine what their appropriate rates should be. Many small systems would also
apply for funding from the DWSRF without ever contacting an engineer to evaluate the system.
Without a preliminary engineering report (PER), the state did not have a sense of whether the
proposed projects were based on sound engineering principles which experienced engineers could
recommend. South Dakota now requires systems to have an engineering firm complete a PER for the
system to be eligible for any loans from the DWSRF. Small communities (serving 2,500 or fewer
people) can also receive financial assistance to complete this PER through the Small Community
Planning Grant (SCPG) Program, which utilizes the Small System Technical Assistance Set-Aside.
There have been 72 DWSRF loans for infrastructure improvements awarded to communities that
received SCPGs. All communities that have completed a rate analysis reimbursed through the SCPG
Program have raised their water rates to more appropriate amounts.
3.8 Enforcement
The EPA Regional Capacity Development coordinator meets with the EPA Regional drinking water
enforcement lead quarterly to review any systems that the ETT identifies as an enforcement priority.
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The 1996 Amendments streamlined processes for administrative compliance orders and penalties of up
to $5,000, raised the administrative and emergency penalty caps, made enforceable many SDWA
provisions and requirements implemented by the EPA or states, and gave up to a 2-year enforcement
moratorium for violations being remedied by a specific plan to consolidate with another system. These
measures have facilitated more effective enforcement, encouraging compliance while keeping
safeguards for systems. In coordination with Capacity Development programs, enforcement efforts can
help prioritize systems that have the greatest need of capacity development assistance. The EPA's
Program Collaboration Factshee provides additional information and examples.
New Hampshire: Collaborating to Identify and Prioritize System Assistance
New Hampshire has always provided close TA to its public water systems so when the new Arsenic
standard was implemented in 2006, Capacity Development program staff worked closely with
Monitoring Program staff to assist over 200 small public water systems to achieve compliance as
quickly and cost-effectively as possible. Compliance timelines were established and met by
implementing innovative strategies such as blending, point-of-use, and side-stream treatment
options. Technical expertise from the state's participation in the EPA's Arsenic Demonstration
Technology projects was critical in assisting the small systems to implement viable solutions. The
DWSRF, including principal forgiveness, provided funding to disadvantaged communities where
needed. These strategies have also been applied for compliance with other standards such as
radionuclides and disinfection byproducts, such that the state has seen reductions in the number of
PWSs on the EPA's quarterly ETT violations.
3.9 Operator Certification
Maintaining TMF capacity and having a properly certified operator are key components of a well-run
drinking water system. Ensuring the knowledge and skills of PWS operators is widely considered one of
the most important, cost-effective means to ensure safe drinking water. Each state has an Operator
Certification program that either meets the guidelines established by the EPA or equivalently meets the
overall public health objectives of the EPA guidelines. The objective of the program is to ensure that
every water system has (directly, under contract, or in conjunction with other systems) an operator to
perform certain key compliance functions, and who is trained and certified to the level that each state
determines is appropriate for the functions, facilities, and operations of that system.
Click on "SDWA and Operator Certification History" to go to that section of
the document and learn more about the program.
SDWA and Operator
Certification History
State Capacity Development and Operator Certification programs both
aim to ensure the provision of safe drinking water. Drinking water system performance depends on
many factors, including adequate infrastructure to effectively and efficiently manage and maintain
operations. Close communication and cooperation between the Capacity Development and Operator
Certification programs can help determine gaps in operator skills and knowledge, promote appropriate
training, assist PWSs with obtaining a qualified, certified operator, and improve system performance to
protect public health. The EPA Regional Capacity Development coordinators play a large role in
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facilitating this cooperation; the EPA's Capacity Development and Operator Certification Collaboration
Factsheet provides examples of how the programs operate together.
Colorado: Targeting Operator Training to Boost PWS Performance
In the past, many of Colorado's small drinking water systems did not have properly trained or
certified operators. The state determined there had been a lack of coordinated, targeted, high
quality training for operators and other personnel. Colorado employed a systematic planning process
for evaluating and responding to training needs for PWS personnel. The process included evaluating
system failures and root causes, preparing a Baseline Assessment Report, conducting a 1-day PWS
training roundtable, and developing a 5-year strategic plan. Colorado also provides TA to PWSs
through a highly-trained "Coaching" unit. Furthermore, the Capacity Development and Operator
Certification programs meet monthly as part of the "Drinking Water Advisory Team." From 2005 to
2012, CWSs and NTNCWSs with certified operators in charge increased from 89 percent to 98
percent. There has been a measurable improvement in compliance in the areas of disinfection
operations and management, and in the overall development of water quality monitoring plans.
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4. Key Resources
Regional Capacity Development coordinators can provide the following resources from the EPA and
other organizations to state coordinators. These resources can be used by state or water system
personnel to increase understanding about capacity development, to build a Capacity Development
program, and to help improve communication and collaboration.
4.1 List of Links to Program Documents and Tools
Websites Capacity Development
1996 SDWA Amendments
The EPA's Capacity Development
The EPA's Information for States about Building the Capacity of Drinking Water Systems
The EPA's TMF Capacity Resources for Small Drinking Water Systems
Documents on Capacity Development
Reporting Criteria for Annual State Capacity Development Program Implementation Reports
General Information on National Capacity Development Program Trends, including
Re-Energizing the Capacity Development Program: Findings & Best Practices from the
Capacity Development Re-Energizing Workgroup
Public Water System Historical Significant Non-Compliers: National Trends Report
National Capacity Development Strategic Plan
Multiple Barrier Approach to Public Health Protection
Capacity Building Program Management, including
Assessing Water System Managerial Capacity
State Programs to Ensure Demonstration of Technical, Managerial, and Financial Capacity of
New Water Systems
Guidance on Implementing the Capacity Development Provisions of the 1996 SDWA
Amendments
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16
Capacity Building Program Collaboration, including
Capacity Development and Operator Certification Collaboration: An Essential Partnership to
Promote Small System Capacity
Analysis of the Use of Drinking Water State Revolving Fund Set-Asides: Promoting System
Sustainability
Analysis on the Use of Drinking Water State Revolving Fund Set-Asides: Promoting Capacity
Development
Using Technical, Managerial, and Financial Capacity to Improve System Security - Suggestions
for States
The EPA's Asset Management Resources
Asset Management Resources for Small Drinking Water Systems, including
o Successfully Protecting Your Investment in Drinking Water Infrastructure: Best
Practices from Communities and Local Experts
o Reference Guide for Asset Management Tools
o Asset Management Switchboard
o Asset Management: A Best Practices Guide
o Asset Management for Local Officials
o Building an Asset Management Team
Asset Management: A Handbook for Small Water Systems One of the Simple Tools for
Effective Performance (STEP) Guide Series
Taking Stock of Your Water System: A Simple Asset Inventory for Very Small Drinking Water
Systems
Implementation of Capacity Development Program - Related Safe Drinking Water Act
Amendments in the America's Water Infrastructure Act - Memo
Asset Management 101 Training
Trainings & Tools on Capacity Development
Table Top Exercise: Collaborating Across State Drinking Water Programs to Support
Sustainable Systems
Capacity Development 101 Trainings
Additional Resources
America's Water Infrastructure Act of 2018 (AWIA)
Find an EPA Capacity Development Contact
Partners providing assistance to states and small systems
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17
4.2 Using the SharePoint Site
File sharing sites like the EPA internal SharePoint allow
the EPA staff to share materials with one another
seamlessly and without the limitation of file size. The
EPA maintains a SharePoint site where the EPA Capacity
Development coordinators can contribute and
download materials. To download pertinent files,
navigate to the site, select the file, and "Download a
Copy." If the EPA Regional Capacity Development coordinators are adding content to the site, ensure
that they have permissions to add to the site. With the appropriate permissions, the EPA Regional
Capacity Development coordinators should be able to drag and drop files directly from their local drive.
Please note that the SharePoint site referenced is an internal EPA tool and not available to those outside
of the EPA.
The EPA SharePoint Site Link
https://usepa.sharepoint.eom/sites/OW/D
WPB/SST/capacitydevelopment/SitePages
/Home.aspx
{This is an internal EPA tool and not available
to those outside of the EPA.}
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18
Appendix A: History of the Capacity Development Program
A.l The Safe Drinking Water Act
The SDWA was passed in 1974 to address public health
concerns by regulating drinking water. The SDWA
authorizes the EPA to set national health-based
standards to protect consumers from both naturally-
occurring and man-made contaminants that may be
present in drinking water, as well as work with states
and PWSs to ensure that those standards are met.
Originally, the SDWA focused on treatment as the
primary means of providing safe drinking water. The
1996 SDWA Amendments established stronger
prevention programs (e.g., source water protection),
increased state flexibility, provided more in-depth
information to consumers, and strengthened the EPA's
regulatory development process. The 1996
Amendments also included initiatives to improve
communication with the public, employ better science
for risk assessment, and provide funding to systems,
tribes, and states to achieve the public health
protection objectives of the SDWA through the DWSRF
program.
The next page depicts the timeline of how the U.S. prot
how the SDWA is involved.
public health and drinking water including
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Timeline
State public health
programs are created to
protect public water
supplies.
The EPA was established to consolidate
federal research, monitoring, standard-
setting and enforcement activities to
ensure environmental protection.
Congress passed the national
interim primary drinking water
regulations and amendments,
further protecting drinking water
from contamination.
The WIIN Act revised SDWAto
improve drinking water
infrastructure.
1965
ฉ
Early
1900s
1974
0 ^ ฎ
Efforts to help small systems
aimed to replace the concept of
"viability" with "capacity
development."
1986
1996
2018
1970
Water Quality Act requires
states to review, establish,
and revise water quality
standards.
^ 0 0 ฎ
1977 & 1979
Late 1980s/
Early 1990s
Major SDWA Amendments strengthened the
pace of regulatory development and
regulation of microbial contaminants.
2016
America's Water Infrastructure Act
(AWIA) amended SDWA to improve
drinking water and enhance
infrastructure investment.
Congress Passed SDWA, authorizing
EPA to set national health-based
standards for drinking water
contaminants and to work with states
to ensure standards are met.
Major SDWA amendments created the
DWSRF, Capacity Development, and
Operator Certification programs.
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A.1.1 The 1996 SDWA Amendments
The 1996 Amendments provided the framework from the Capacity Development program, DWSRF,
primary enforcement authority, and Operator Certification program. Capacity development was
introduced as part of the 1996 Amendments' as a stronger approach to preventing drinking water
contamination. The 1996 Amendments created a national program through which states demonstrate
their water systems' TMF capacity to deliver safe and reliable drinking water.
Capacity Development
Capacity development is the process through which water systems acquire and maintain the TMF
capabilities necessary for them to continuously provide safe, reliable drinking water. The SDWA's
capacity development provisions (outlined in Section 1420) provide a framework for states and water
systems to work together to build capacity and meet the SDWA public health protection objectives. The
1996 Amendments focus on capacity development through two major provisions; both of which are
associated with the DWSRF (the DWSRF provisions are outlined in Section 1452 of the SDWA).
First, for states wishing to receive the full amount of DWSRF capitalization to which they are
entitled, states must develop and implement programs for new and existing systems. Through
these programs, new water systems must demonstrate capacity, while existing water systems
must build and maintain capacity. States failing to develop and continue implementing such
programs face having 20 percent of their annual DWSRF capitalization grant withheld.
Second, the SDWA ties a water system's eligibility to receive assistance under the DWSRF to the
system's TMF capacity. In short, providing DWSRF assistance to a system which, in the
judgement of the state, lacks the TMF capacity to ensure ongoing compliance with SDWA
requirements is prohibited.
Drinking Water State Revolving Fund
All 50 states and Puerto Rico are authorized to receive grants from the EPA to help capitalize their
DWSRF. The District of Columbia and U.S. territories receive their share of DWSRF appropriations as
grants to their water systems. States enjoy flexibility in establishing and managing their DWSRF in a
manner most suitable to their circumstances.
Each year, as part of the application to receive its capitalization grant, each state develops an Intended
Use Plan (IUP). lUP's describe how the state intends to utilize its DWSRF resources for the year. The IUP
contains a Project Priority List (PPL) of projects which have requested assistance from the state DWSRF.
Priority for receiving DWSRF assistance must be given to those projects that:
Address the most serious risks to human health.
Are necessary to ensure compliance with the SDWA.
Assist systems most in need according to state affordability criteria.
The state must fund projects in the order they appear on the PPL except that projects which are not
ready to proceed to construction may be skipped over to reach the next most highly ranked project that
is ready to proceed. States may include provisions for funding emergency projects in the IUP. For more
information, the i/VSRF Elig bi ^ is a one-stop-shop manual for DWSRF eligibility questions
for states and interested stakeholders.
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Set-Asides
The 1996 Amendments established a process through which up to 31 percent of a state's capitalization
grant can be used in "set-aside" programs. Set-asides are a unique and important feature of the DWSRF
program and states have the option to take some, none, or all of the authorized set-aside amounts. The
set-asides give states the flexibility through a wide range of activities to help PWSs address compliance
challenges, including those which do not require capital investment to resolve. The EPA's State-bv-State
Analysis explores different ways in which the 50 state drinking water programs and Puerto Rico use
DWSRF set-asides to support PWSs.
This set-aside may be used to cover the costs of administering the
Administration DWSRF program and to provide TA to water systems of all sizes.
(See text box at the bottom of the page for additional explanation.)
TA to Small
Systems
State Program
Management
Local Assistance
and Other State
Programs
This set-aside may be used to provide TA exclusively to systems
serving 10,000 or fewer persons.
This set-aside may be used to: develop and implement an Operator
Certification program, develop and implement a Capacity
Development program, administer or provide TA through source
water protection programs, and administer the state PWSS
program.
This set-aside may be used to develop local drinking water
initiatives, including Capacity Development programs. However, no
more than 10 percent of the state's capitalization grant may be
used for either of the following eligible activities: to provide
assistance to any PWS as part of a state Capacity Development
program or to make expenditures to establish and implement
Wellhead Protection Programs under Section 1428 of the SDWA.
In Focus: 2016 WIIN Act & Looking Forward
The Water Infrastructure Improvements for the Nation (WIIN) Act increased infrastructure funding. It
also changed the "4-Percent Set-Aside" to be the greatest of either $400,000, one-fifth percent
(0.002%) of the current valuation of the fund, or an amount equal to 4 percent of all grant awards to
the fund for the fiscal year.
Today, SDWA and DWSRF are established programs that help water systems finance critical
infrastructure improvements. Since the 1996 SDWA Amendments, SDWA has had a new emphasis on
preventing contamination problems through source water protection and enhanced water system
management.
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Other SDWA Provisions Related to Capacity Development
Operator Certification
Ensuring safe drinking water requires knowledgeable and skilled PWS operators. To ensure that
operators are well-trained, Section 1419 of the 1996 Amendments required all states to establish an
Operator Certification program that meets guidelines developed jointly by the EPA and the states in
1999. Before the SDWA and the Operator Certification Guidelines, the Surface Water Treatment Rule,
promulgated in 1989, required that surface water systems were operated by qualified operators. In
1998, the regulatory requirement for operators to be qualified was added for systems that disinfect. The
Operator Certification Guidelines published in 1999 specified the minimum standards for certification
and recertification of operators of CWSs and NTNCWSs. Water system operators can be qualified based
on their work experience and education, but they are certified according to each state's application and
examination process. States may use a DWSRF set-aside to implement an Operator Certification
program. The EPA is required to withhold 20 percent of a state's DWSRF funds if the state fails to
implement a program that meets the published Operator Certification Guidelines. The withholding
requirement ensures that states have both a public health and an economic motivation to implement an
Operator Certification program.
The objective of the Operator Certification program is not to require that every water system operator
be certified. Instead, the program is to ensure that water systems have (directly, under contract, or in
conjunction with other systems) an operator who is trained and certified to the level that each state
determines appropriate for the functions, facilities, and operations of that system to perform certain
key compliance functions. Operator Certification programs may vary between states but must meet the
nine Operator Certification baseline standards outlined in the idelines for Operator Certification.
The EPA Regions oversee state Operator Certification programs by conducting annual reviews of state
Operator Certification annual reports. Using the annual reports the EPA Regions evaluate if a state
Operator Certification program meets the baseline standards set forth in the final guidelines. If the
program meets the requirements, the EPA Region determines that the DWSRF grant should not be
withheld.
A.1.2 Technical, Managerial, and Financial Capacity
A Capacity Development program is a key element of a state's Drinking Water program. Capacity
development involves TMF which is necessary for water systems to achieve and maintain long-term
sustainability and compliance with National Primary Drinking Water Regulations. TMF is defined as:
Technical (T): Technical capacity is the physical and operational ability of a water system to meet the
SDWA requirements. Technical capacity refers to the physical infrastructure of the water system,
including the adequacy of source water and the adequacy of treatment, storage, and distribution
infrastructure. It also encompasses the ability of system personnel to adequately operate and maintain
the water system and to implement requisite technical knowledge.
Managerial (M): The ability of a water system to conduct its affairs in a manner that allows them to
achieve and maintain compliance with the SDWA requirements, including institutional and
administrative capabilities. Managerial capacity includes identifying system ownership, ensuring
appropriate staffing and organization, and communicating regularly with customers.
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Financial (F): The ability of a water system to acquire and manage sufficient financial resources to
allow the system to achieve and maintain compliance with the SDWA requirements. Financial capacity
includes setting responsible loan rates, ensuring revenues exceed costs, maintaining financial records,
and establishing good credit.
All three elements of capacity development are closely related. Many aspects of water system
operations involve more than one kind of capacity. Infrastructure replacement or improvement, for
example, requires technical knowledge, management planning and oversight, and financial resources. A
deficiency in any of the three areas could disrupt the entire effort.
Capacity Development and DWSRF programs are also closely related. PWSs are not eligible to receive
DWSRF loans unless they have sufficient TMF capacity, and DWSRF funding may be withheld from states
that do not comply with the capacity development requirement.
Click on "Statutory Requirements" to go to the Statutory Requirements
section of this document.
Statutory
Requirements
The SDWA's focus on capacity development continues to lay the
foundation for the drinking water sector's evolving focus on sustainability.
This has led small systems to focus more on self-assessment and long-term planning. In addition,
Capacity Development programs created a framework for states to explore integrated resource
planning, which has helped to resolve conflicts over drinking water quality and management issues. The
Capacity Development program also emphasizes and supports the goals of a separate effort, the
Effective Utility Management (EUM) initiative. The EUM initiative provides a common framework for
water systems to evaluate strengths, areas of improvement, set priorities, and measure progress. EUM
practices are key to long-term sustainability.
Click on "1996 SDWA Amendment" to review that section of this document
in order to learn more about the 1996 Amendments. .
1996 SDWA
Amendment
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How do Technical, Managerial, and Financial capacity relate to each other?
managerial
support
planning
inputs
financial
support
Technical and managerial capacity considerations depend on financial resources. Likewise, technical
and managerial capacity evaluations inform and affect financial resources and considerations. Similarly,
technical inputs are required to build managerial capacity, while managerial support is required to build
technical capacity.
Isolating any of the capacity components is counter-productive, as they are an inter-related set of
knowledge, skills, and resources that must be employed together for a water system to be successful
into the future. Often a technical or managerial shortcoming may be due to poor financial capacity;
sometimes a water system may have strong financial capacity and still lack strong managerial and/or
technical capacity. It is important to keep all three categories in mind when assessing a water system.
In Focus: TMF Example
A PWS exceeds the maximum contaminant level (MCL) for arsenic. How the PWS proceeds is
dependent on its TMF capacity: it requires the knowledge on the contaminant's BATs, which may
be appropriate for the system, and the implementation of treatment (T); local decision makers
need to understand and explain to the consumers why the treatment is needed (M); and the PWS
must be able to afford the treatment option the it chooses (F).
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Appendix B: Capacity Development Program Overview
Each state has a Capacity Development program whose mission to implement the state's program. The
1996 Amendments' provisions for capacity development provide a framework for the EPA, states, tribes,
and PWSs to work together to ensure that PWSs attain and maintain the TMF capacity needed to
achieve the SDWA's objectives for short- and long-term capacity.
Systems with a lack of TMF often face challenges such as:
Aging infrastructure, and inadequate funds to upgrade or
replace it.
Lack of availability of an adequate and safe supply of source
water.
The need to protect the water source.
Public demands for lower utility costs.
Declining population.
The establishment of more enhanced and protective regulatory requirements or rules.
The Capacity Development program requirements offer flexibility and the opportunity to develop
creative, state-specific solutions to achieve and maintain TMF capacity across the different states to
address their own unique challenges (e.g., issues of scale, unregulated contaminants) while ensuring
accountability to the provisions of the SDWA. Since the state Capacity Development programs were
developed independently by each state they vary in their approach and implementation creating
diversity between programs. The EPA's contribution to the state Capacity Development programs
includes guidance and tools, rather than regulation. There are many acceptable approaches to meeting
the minimal requirements outlined in the SDWA.
To address the challenges facing small systems, Congress established several provisions of the 1996
Amendments that focused on small systems. This included the provisions that implemented the Capacity
Development program, provisions that emphasized assisting small PWSs in acquiring and maintaining
TMF capacity.
Each state has an
approved program for
ensuring TMF capacity
in PWSs.
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B.l Statutory Requirements
Congress established the goals of the Capacity Development program in 1996 with the
following statutory requirements:
"[States must] ensure that all new CWSs and NTNCWSs demonstrate technical, managerial, and
financial capacity for each NPDWR"; [ง1420(a)]
"[States must] develop and implement a strategy to assist PWSs in acquiring and maintaining
technical, managerial, and financial capacity"; [ง1420(c)]
"No assistance shall be provided to a PWS that does not have the technical, managerial, and
financial capability to ensure compliance with requirements of this title [SDWA]"; and
[ง1452(a)(3)(A)(i)]
"No assistance shall be provided to a PWS that is in significant noncompliance1 with the
requirements of this title [SDWA]." [ง1452(a)(3)(A)(ii)]
"A public water system [without TMF capacity or in significant non-compliance] may receive
assistance under this section if the use of the assistance will ensure compliance; and if [the
system lacks TMF capacity] the owner or operator of the system agrees to undertake feasible
and appropriate changes in operations (including ownership, management, accounting, rates,
maintenance, consolidation, alternative water supply, or other procedures) if the State
determines that the measures are necessary to ensure that the system has the technical,
managerial, and financial capability to comply with the requirements of this title [SDWA] over
the long term." [ง1452(a)(3)(B)(i-ii)]
B.l.l Financial Implications for Capacity Development and DWSRF/Operator
Certification Programs
To avoid DWSRF withholding, states must:
1. Ensure that all new CWSs and NTNCWSs demonstrate TMF capacity [ง1420(a)].
2. Develop, maintain, and implement a strategy to assist public water systems to acquire and
maintain TMF capacity [ง1420(c)(l)(C)].
3. Meet operator certification requirements [ง1452(a)(l)(G)(ii)].
Click "1996 Amendments" to review that section of this document to learn
more about the 1996 Amendments.
1996 SDWA
Amendments
B.2 Capacity Development Program Features
Capacity development implies a process, not a static endpoint. Capacity Development programs are
designed to better position water systems and states to ensure the provision, promotion, and protection
1 The terms "historical significant noncompliance" and "significant noncompliance" are no longer used (starting in
FY 2013). Instead of discussing these systems once every three years, EPA and the EPA Regions meet quarterly and
review any system with an Enforcement Targeting Tool (ETT) score greater than or equal to 11 (identified as
enforcement priorities). The EPA Regional and state Capacity Development coordinators work together to identify
whether PWSs in the priority list lack TMF capacity before approving the state's Annual Capacity Development
Report.
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of public health through safe drinking water. The effective promotion of capacity development depends
on the program being:
Flexible so that the EPA and states can maximize the use of available resources and capabilities to
implement capacity development processes that meet the unique needs of each state.
Proactive in identifying and targeting assistance to water systems most in need of improving their
TMF capabilities.
Integrated so the resources of all federal and state drinking water programs are considered.
Accountable by demonstrating that capacity development helps water systems provide safe water to
customers.
Collaborative to the extent that all entities, agencies, groups, and associations act together to
support one another.
B.3 Assessing New and Existing Systems
Under Section 1420 of the 1996 Amendments, states must establish programs to assist in developing the
TMF capacity of PWSs, which is considered the Capacity Development Framework. To do this, PWSs are
categorized into "new" and "existing."
"New" systems i nclude all CWSs and NTNCWSs commencing operations after October 1, 1999 (this
includes water systems becoming a CWS or NTNCWS through physical expansion of their infrastructure).
New systems must demonstrate TMF capacity before they can provide water to the public.
"Existing" systems include all PWSs [CWSs, NTNCWSs, and TNCWSs], Existing systems must
continue to build and maintain TMF capacity through a Capacity Development program necessary for
them to provide safe, reliable drinking water and to be eligible for DWSRF funding from their states.
State-specific program strategies are used to identify and prioritize existing systems in need of capacity
development assistance.
New Systems Existing Systems
Section 1420(a) of the SDWA, the new systems
provision, requires the EPA Regions and states
to ensure that all new CWSs and NTNCWSs have
the TMF capacity to comply with federal
drinking water regulations.
Success is measured in terms of the number of
capacity assessments of new water systems (or
proposed water systems) completed by the
state primacy agency program, expressed as a
percentage of total new CWSs and NTNCWSs.
State Capacity Development programs
must identify existing water systems that
have inadequate capacity need
assistance.
Success is measured in terms of the
annual percentage of existing water
systems that have been assessed for
capacity.
States must consider five elements as
they develop programs (see list below).
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While establishing their Capacity Development programs, states are required to consider, solicit public
comment on, and include the following five elements:
1. The methods or criteria used to prioritize systems;
2. The factors that encourage or impair capacity development;
3. The way the state will use authority and resources of the SDWA;
4. The way the state will establish the baseline and measure improvements; and
5. The procedures used to identify interested persons.
Click on "How Strategies Were Developed" to go to the section of this
document that provides additional information on developing strategies.
How Strategies
Were Developed
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Appendix C: How Strategies Were Developed
This section provides background information from guidance provided in the 1999 Handbook for
Capacity Development. The 1999 Handbook provided an overview of capacity development, guidance
on developing water system capacity, and information and tools for implementing a state Capacity
Development program including developing a state Capacity Development strategy. The EPA Regional
Capacity Development coordinators can use this information to provide guidance to state Capacity
Development programs, particular if the state is looking to revise their program or strategy.
C.l Where should states begin as they start to develop effective and
feasible strategies?
The EPA recommends that states consider each of the five elements of a Capacity Development
program. These elements can help states to conduct effective administration of the tasks for assessing
new and existing system capacity, which can:
Decrease the number of systems with long-term health-based violations,
Reduce the number of new systems with inadequate capacity, and
Help to develop a proactive working relationship with state co-regulators.
Following this recommendation, the five elements would be incorporated in each step of the capacity
development process, including development, implementation, and revision. The five elements are:
States can be creative as they consider each of these elements. For example, instead of considering each
PWS in a vacuum, it is recommended that states evaluate ways in which PWSs can cooperate with each
other on a regional and state-wide scale. Similarly, instead of focusing on short-term strategies, states
are recommended to address both short- and long-term ways to improve PWSs.
Each of the five elements has an important role to play in state-level strategy development.
Prioritization methods: The methods or
criteria used to prioritize systems.
Stakeholders Identification:
The procedures used to identify
interested persons.
Institutional Concerns: The
factors that encourage or impair
capacity development.
Baseline Indicators: The way the state will
establish the baseline and measure improvements.
State Resources: The way the state will
use authority and resources of the SDWA.
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C.2 Developing State-Level Strategies
Developing smart and comprehensive state-level strategies can increase a state's water system TMF
capacity. States develop a comprehensive strategy that enables the water systems to allocate resources
effectively and ensure safe drinking water is provided.
C.2.1 Prioritization Methods
The first element of developing a state-level strategy is prioritization [ง1420(c)(2)(A)]. The element
includes the methods or criteria that states will use to evaluate PWSs so that the water systems that
need assistance can receive it.
Prioritizing systems will help states to maximize the benefit of a limited amount of funding. Deciding the
ways in which states will prioritize systems will help states to develop a sound Capacity Development
strategy. States may consider the following in developing their methods and criteria:
~ Do the proposed methods or criteria for prioritizing systems permit the consideration of all
systems in the state?
~ Do the methods or criteria for prioritizing systems provide the state with a ranking scheme?
~ Are the methods or criteria for prioritizing systems easy to implement? (This question will also
come into play in the next step, Implementation.)
~ What are the data requirements of the prioritization procedure? Does the state have an existing
database, can an existing database be modified, or can a new data system be developed, given
available resources?
C.2.2 Institutional Concerns
The second element of a developing a state-level strategy is addressing institutional concerns that could
encourage or impair capacity development. Under Section 1420(c)(2)(B) of the SDWA, states must
consider developing a description of the "institutional, regulatory, financial, tax, or legal factors at the
federal, state, or local level that encourage or impair capacity development." A broad spectrum of
factors can influence capacity development.
Factors that can affect capacity development efforts within a state could include the following items
which are important for states consider as they develop their Capacity Development strategies.
Positive Factors
Negative Factors
Statutes dealing with mergers and
acquisitions, including statutes that
encourage consolidation by allowing rate
base adjustments.
A state's lack of legal (or regulatory) authority
or existing institutional barriers to develop
and implement a Capacity Development
program.
Statutes dealing with privatization or
procurement to allow systems to contract for
operations and maintenance or other
services more easily.
Legal and financial issues associated with
water rights.
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Positive Factors
Negative Factors
Statewide growth-management legislation to
limit the growth of poorly-planned systems.
Insufficient state or local funding.
Statutes that require renewable operating
permits for water systems, certificates of
convenience and necessity (CCNs), or
periodic sanitary surveys.
Barriers that preclude systems from obtaining
variances or exemptions reasonably.
TA programs that provide help to small
systems.
State statutes or regulations that hinder
consolidation, regionalization, or
interconnection or reciprocity for operator
certification.
In its Capacity Development strategy, Illinois included consumers' perceptions about drinking water as
an institutional concern that could have a negative effect on capacity development. States must use
effective communication to explain the reasons that capacity development is necessary.
C.2.3. State Resources
The third factor that for states to consider when developing a state-level strategy is state resources.
States can use SDWA resources and authorities to help PWSs comply with the National Primary Drinking
Water Regulations (NPDWRs), to encourage the development of partnerships between water systems
that increase TMF capacity for all involved water systems, and to assist with operator certification and
training.
Under Section 1420(c)(2)(C), states must describe the ways in which they will use the authority and
resources of the SDWA to improve capacity in PWSs. Specifically, the states are asked to describe how
they will accomplish three goals central to a sound Capacity Development strategy:
1. Assist PWSs in complying with the NPDWRs.
2. Encourage the development of partnerships between PWSs to enhance their TMF capacity.
3. Assist PWSs in the training and certification of operators.
The authority and resources that can be used to enhance a state's Capacity Development program are
provided throughout the SDWA and the programs must be carefully coordinated and with the use of the
state authority and resources create the most effective Capacity Development program. This
coordination of state and federal programs is vital to developing capacity, just as the development of
greater TMF capacity through compliance is essential for the efficient functioning of other important
sections of the SDWA.
C.2.4 Baseline Indicators
States are encouraged to identify baseline indicators that can measure capacity development.
Establishing a baseline to measure improvements is crucial to fulfilling state responsibilities under
Sections 1420(b)(2) and 1420(c)(3), which require states to report the success of their Capacity
Development program to the EPA Administrator and the Governor. Because TMF capacity is difficult to
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measure, especially in the short term, states may use a combination of the following approaches to
measure TMF capacity:
Volume of activity: A state could assess its program based on its effectiveness in reaching water
systems, using as a measure the number of sanitary surveys, comprehensive performance evaluations
(CPEs), water system plans, or self-assessments conducted; amount of TA provided.
Operator certification: States could base their assessment on the prevalence of certified
operators who have the training necessary to improve the capacity of the PWSs they operate, using as a
measure the number of certified operators.
Planning mechanisms: States could use to measure improvements in capacity, the results of
water system self-assessments, business plans, annual financial reports, and budgeting worksheets. This
process would require a baseline measure of all PWSs at the time when the capacity development
efforts began and a method to regularly update the PWSs assessments.
Compliance data: Since the SDWA explicitly mentions capacity with respect to NPDWRs,
compliance data could be a useful way to analyze compliance trends, such as measuring the number of
systems with an ETT score greater than or equal to 11, exceedances, monitoring and reporting
Top
10 violations, and time required to achieve compliance.
C.2.5 Stakeholders Identification
The final factor that states are recommended to consider when developing a state-level strategy is
identify individuals who are involved in the development and implementation of the Capacity
Development program. This includes people from all appropriate agencies of federal, state and local
governments, PWSs, and PWS customers who can provide input on the state-level strategy.
One approach to identifying stakeholders is to use Operator Certification advisory boards. Operator
Certification advisory boards can be key resources in disseminating capacity information. States might
work with Operator Certification boards to develop a certification curriculum that would help ensure
capacity.
As they identify stakeholders, states are encouraged to include representatives from CWSs as well as
NTNCWSs such as public schools, day care centers, offices, and factories. It is also recommended that
states reach out to organizations that represent
TNCWSs, such as the American Automobile Association
which has an interest in water quality at highway rest
stops, and tourism organizations, which have a keen
interest in avoiding water related issues in the
destinations that they represent.
Potential interested parties for outreach programs incli
and Operator Certification advisory boards.
C.3 Implementing State-Level Strategies
Once states have crafted sound state-level strategies, the next step is to begin to implement a Capacity
Development program to improve TMF capacity. Although the SDWA requires that a state consider each
In states that rely on tourism (e.g., Colorado,
Florida, and California) the tourism industry
has focused public attention on water
quality in highway rest stops.
advisory panels for new system development
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of the five programmatic elements for inclusion in its Capacity Development program, it does not
require the state to use specific tools to implement the selected elements. Each state is unique and
should make policy decisions based on its unique characteristics and circumstances. The SDWA provides
states with the flexibility to tailor their strategies to maximize the opportunity that they have to meet
the public health protection goals. Several tools, listed below, may help states implement their Capacity
Development program.
C.3.1 Prioritization Methods
The following sources of information can help state Capacity Development programs prioritize PWSs.
This list is meant to serve only as a starting pointdepending upon their unique circumstances, states
may be able to take advantage of additional tools to help prioritize PWSs.
Annual Financial Reports
Capital Improvement Plans
Compliance Data
Comprehenisve Performance Evaluations
Consumer Confidence Reports
DWSRF Loan Applications
Operator Certification Programs
Permitting Requirements
Sanitary Surveys
Self-Assessments
Source Water Assessment Programs
State/Federal Surveys of Infrastructure Needs
Statewide Water Quality/Quantity Studies
Water system plans or Business Plans
C.3.2 Institutional Concerns
It is encouraged for states to implement state-level strategies in a way that takes institutional concerns
into account. States' reports to their legislatures or governors on the subject of capacity development
may prove useful in the creation and implementation of a Capacity Development program. Many of
these reports include discussions of the factors that encourage or impair capacity development. States
have several tools at their disposal that address the factors that impair TMF capacity at water systems.
The following list is meant only as a starting point. As states build their Capacity Development programs,
they are likely to find other tools to address factors that impair capacity efforts.
Washington State has developed a
successful method to identify and
prioritize those systems most in need of
capacity development assistance.
Washington tracks the performance of
all systems in terms of their compliance
histories, their water system plans, and
the financial component of their
business plans. Systems are then
classified according to their compliance
history and capacity.
Capital Improvement Plans
Comprehenisve Performance Evaluations
DWSRF Resources
Permitting Requirements
Cooperation with Nongovernmental
Organizations (NGOs)
Coordination with Other Agencies
Water Conservation Plans
Operator Certification Programs
Rate Reviews and Approvals
Regional Plans
Restructuring Programs
Sanitary Surveys
Satellite Management Programs
Source Water Assessment Programs
Training and TA Programs
Variances and Exemptions
Water System Plans or Business Plans
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C.3.3 State Resources
The activities set forth in in the state resources part of the state-level strategy are at the heart of the
linkages between the Capacity Development program and other sections of the SDWA. States have
several tools that may permit them to exercise the authority and resources of the SDWA. This list is
meant only as a starting point as states build their Capacity Development program.
Tools to Help States to Implement SDWA Authority
Enforcement Records
Public Education Programs
Capital Improvement Plans
Rate Reviews and Approvals
CCNs
Regional Plans
Compliance Data
Restructuring Programs
CPEs
Bond Issue Review
Cooperation with NGOs
Reviews of Audit Reports
Cooperation with Industry Groups
Sanitary Surveys
Coordination with Other Agencies
Satellite Management Programs
DWSRF Loan Applications
Self-Assessments
Emergency Response Plans
Statewide Water Quality/Quantity Studies
Big Brother and "Buddy System" Programs
Training and TA Programs
Operator Certification Programs
Water system plans or Business Plans
Permitting Requirements
Water Conservation Plans
C.3.4 Baseline Indicators
Implementation of Capacity Development programs depends on states' ability to measure those
programs' effectiveness. State Capacity Development programs are recommended to evaluate PWSs,
based on the state-level indicators they identified during the development phase. It should be noted
that because capacity building is an incremental process, it may take years before improvements are
measurable. Even highly effective Capacity Development programs may not show immediate
improvements in the actual capacity of water systems.
C.3.5 Stakeholders Identification
As states implement state-level strategies, they are
encouraged to cast a wide net to ensure that all
potential stakeholders are involved. The following
tools can help states to identify additional
stakeholders as they implement their plans:
Regional plans. Regional planning can promote
communication and information sharing between
water systems. Memorandum of
Understandings (MOUs) with Public
Utility Commissions (PUCs). Some state
PUCs are involved in regulating public water
districts or authorities and, on occasion, municipal
Tennessee: Planning Promotes Partnerships
In conjunction with Drought Management
planning, Water Resources Technical Advisory
Committee (WRTAC) and Tennessee
Department of Environment and Conservation
partnered with the U.S. Army Corps of
Engineers and other regional planning experts
to initiate a water resources planning pilot
program in two regions: North Central
Tennessee and Southern Cumberland. The pilot
study was conducted to establish a statewide
process for regional water supply planning
process and to identify potential
interconnections.
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water systems. The statutory authority for the PUCs' actions are defined in the statutes that authorize
them to promote the public interest (e.g., safe and reliable service at reasonable cost) by regulating the
way some services are provided. These statutory authorities make PUCs logical partners in capacity
development. Permitting requirements. The permitting process alerts permittees to capacity
development and helps the state identify stakeholders.
Cooperation of industry groups,
lenders and NGOS. Developing relationships
with these important groups helps ensure their
participation in the capacity development process.
Coordination with other agencies.
Coordinating with all involved agencies helps
ensure that the capacity development process runs
smoothly. This is particularly important in states
where the primacy agency is not the only agency
participating in the DWSRF process.
States Supporting Small Systems
Several state commissions have adopted more
expanded roles in small water system capacity
by: opening formal proceedings on the matter
and requesting public comment (New York);
developing and issuing a new policy statement
adopted by the commissioners (California,
Connecticut); and drafting MOUs that state the
broad objectives of small system capacity
development and itemize specific commission
responsibilities (Connecticut, Pennsylvania,
North Carolina).
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Appendix D: Example Desk Guide to Review Capacity
Development Program Annual Reports
This section provides an example of how a Region can approach reviewing annual reports. The process
included is from the "Desk Guide to Review Capacity Development Program Annual Reports" developed
by EPA Region 7.
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EPA Region 7's Desk Guide to Review Capacity Development Program
Annual Reports
Objectives:
The objectives of this desk review guide are to:
1. Provide a consistent way for the DRWM to review the R7 State's Capacity Development Annual
Reports;
2. Communicate any identified issues with management and the State and
3. Provide a timeline for review and program determination completion.
Timeframe and Overall Determinations of Annual Report Review:
There is an expectation that EPA receives the annual report for Kansas and Nebraska before October 1
and Missouri and Iowa before January 1. In addition, as part of the capacity development strategy, all
the states must provide a report to the Governor beginning in 2002 before October 1, and every three
years thereafter, and have quarterly discussions with states about community and nontransient
noncommunity water systems with scores of 11 or greater. At the completion of the annual report
review process, the implementation of the State's Capacity Development Program will be determined as
one of the following conclusions: acceptable, acceptable with deficiencies or not acceptable.
Acceptable program means:
1. State demonstrates full ongoing implementation of a fully functioning new systems program for
CWS and NTNCWS.
2. The state must provide documentation showing the ongoing implementation of the capacity
development strategy for all PWS:
a. Historical Significant Noncompliance for CWS and NTNCWS (ETT quarterly
discussion/report) and
b. Requirements for the Report to the Governor (once every 3 years).
Acceptable
The annual report documents ongoing full implementation of the State's New
Systems Cap Dev program and ongoing implementation of an Existing
Systems Strategy.
Acceptable
with
deficiencies
Acceptable with deficiencies means that the state is not able to report the
information required to complete CD Tracker and new system's spreadsheet.
EPA cannot determine ongoing implementation of a fully functional new
systems program and documentation showing the ongoing implementation of
the capacity development strategy.
Not
acceptable
The State has decided not to implement or repeatedly fails to demonstrate
ongoing implementation of a fully functional new systems program and
documentation showing the ongoing implementation of the capacity
development strategy. Grant conditioning has failed to achieve desired
results. A withholding is recommended.
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Capacity Development Program Annual Reports Review Process:
1. Cap Dev coordinator receives the State Annual Capacity Development Report and date received
is documented (Review process starts).
2. The Cap Dev coordinator distributes the Annual Report and last year's recommendations, and
the Report to the Governor if necessary, via email (Attachment 2) to the appropriate State
Coordinator(s). The annual report is placed on the DRWM SharePoint site (within 1 day of
receiving). Included in the email are specific dates identified for the review process including:
o The review start date,
o Completion date of the New System's spreadsheet (3 days, 3 days cumulative),
o Completion of the CD Tracker/PET templates (19 days, 22 days cumulative) and
o Discussion of templates and develop recommendations (7 days, 29 days cumulative).
3. Reports are reviewed in the order received with the first starting no later than 2 working days
after the end of the Federal Fiscal year or five working days after returning from the
December/January holiday break.
4. The Cap Dev Coordinator takes the previous year's state CD Tracker/PET form and new systems
spreadsheet to populate with current year state capacity development report information on
the DRWM SharePoint site, and shares with the state coordinator (2-3 weeks depending on
complexity).
o The Cap Dev coordinator will complete the new system spreadsheet first and provide to
the State Coordinator for review (3 days). The Cap Dev coordinator will use the ETT
Scores Tracker, the most recent ETT list, Envirofacts database, and the State Drinking
Water Watch to evaluate violations and confirm the new systems provided in the
report.
o The Cap Dev coordinator will populate the CD Tracker/PET and provide to state
coordinator for review (7-12 days). The Cap Dev/State coordinator should always read
the most current version of the State's capacity development strategy during the
review. Other documents which can be used are the Report of Findings, which helped
develop the state strategy, Annual Compliance Report, State DWSRF Annual Report, ETT
information from quarterly meetings, can use a variety of other reports as necessary or
available.
o Should any questions arise during the review process, the Cap Dev coordinator should
contact the state.
5. A State coordinator should focus the review from the unique perspective of the overall state
PWSS program implementation and enforcement, including trends, with respect to the
technical, managerial and financial capacity successes and challenges throughout the year. State
coordinators are encouraged to ask questions to the Cap Dev coordinator as they arise during
the review of the annual report and information in the new system's spreadsheet and the CD
Tracker/PET (consider using latest program review for information).
6. Should any questions from either the Cap Dev Coordinator or the State Coordinator arise during
the review for which there is a concern about withholding, both must immediately discuss and
bring to the Branch Chief.
7. Five days after the Cap Dev coordinator has sent the completed form to the State Coordinator,
both will meet to review the completed documents from the state report to identify trends,
discuss any questions and share these comments to each other to develop recommendations or
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suggestions to be added directly to the CD Tracker/PET form during the discussion (Refer to #6 if
necessary).
8. At this point, the process will follow one of the three paths, acceptable, acceptable with
deficiencies (grant condition), not acceptable (withholding).
Acceptable:
State demonstrates full, ongoing implementation of its new systems program and is developing and
implementing a strategy to assist PWSs in acquiring and maintaining technical, managerial, and financial
capacity.
Within 1 day after meeting with State Coordinator, the Cap Dev coordinator uses Attachment 3 and
includes the recommendations and suggestions listed in the CD Tracker/PET form and provides to the
Branch Chief for review (1 day, 30 days cumulative). Address changes to email and send to state with
copy to Branch Chief and State Coordinator, and at the same time, use Attachment 5 to develop
acceptance memo to provide to DWSRF program (1 day, 31 days cumulative).
Acceptance memo: Suggest pick 3-5 highlights and mix activities in the report with recommendations,
make copy for State Coordinator.
Follow-up of recommendations will be part of the quarterly meetings with the state.
Acceptable with Deficiencies
EPA cannot complete the CD Tracker and new system's spreadsheet. EPA cannot determine ongoing
implementation of a fully functional new systems capacity development program and documentation
showing the ongoing implementation of the capacity development strategy. Situations can occur where
a state cannot meet the requirements under the statute in a timely manner. Grant conditioning is
recommended until deficiencies are corrected. EPA and the State will coordinate to set a schedule to
provide the necessary information to meet the grant condition. EPA HQ capacity development
coordinator should be contacted and provided information since this action has the potential to cause a
withholding determination. Additional protocols in conjunction with the delegations of authority should
be reviewed (9-67).
Should the information provided from the state be insufficient, the following would be the process to
get that information before conditioning the grant becomes a withholding decision:
1. EPA has a discussion with the state about deficiencies.
2. EPA sends email to state agency documenting the deficiencies and developing a timetable to
correct deficiencies (Attachment 4).
3. Internal memo to DWSRF to recommend conditioning the grant and requesting final date for
which the grant condition needs to change to a decision to withhold (Attachment 6).
4. Receive response from the State to correct deficiencies.
5. State sends information to satisfy the grant condition and now has an acceptable report or
move to not acceptable.
Not Acceptable
The State has decided not to implement or repeatedly fails to demonstrate ongoing implementation of a
fully functional new systems program and documentation showing the ongoing implementation of the
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capacity development strategy. Grant conditioning has failed to achieve desired results. A withholding is
recommended.
1. Communication with the state has already been occurring.
2. EPA sends letter to state agency addressing the withholding recommendation (No Template).
3. Internal memo to DWSRF recommending withholding (Attachment 7).
4. Should the DWSRF program agree with the recommendation, a decision document is developed
for the Division Director.
5. Should Division Director agree to withhold, require concurrence memo from the Assistant
Administrator for Water (OW).
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Attachment 1. Drinking Water State Revolving Funds Annual Report Review Process for Capacity Development
Reports
State Submits
Annual Capacity
Development
Report
Complete Annual
Cycle
Regional and state
representatives review
comments and discuss any
decisions regarding withholding
Discussion with State
Finalize and Deliver Memo
and Update CD tracker
Memo is finalized, signed, and
distributed to necessary parties
The Regional CDC updated the
Capacity Development tracker
and sends the update to EPA HQ
Regional Capacity Development
Coordinator (CDCs) confirms
receipt of report with State
Coordinators
File gets post to a shared
network (e.g. SharePoint)
Distribute Report
Regional and State CDCs discuss
comments internally
Final comments are compiled by
the Regional CDC
Internal Discussions
Regional CDC drafts memo about any decisions to withhold
The memo is also reviewed by the State Coordinators
Develop Withholding Decision
Recommendation Memo
Regional CDC reviews New Systems portion of the Report
Regional CDC communicates to the state about any issues
regarding New Systems
Regional CDC reviews Existing Systems portion of the Report
Regional CDC communicates to the state about any issues
regarding Existing Systems
State Coordinators review comments and feedback from the
Regional CDC
Review
Report
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42
Attachment 2. Example of email to State PWSS Coordinators with instructions after
receiving an initial State Capacity Development annual submittal.
(R7 State PWSS Coordinato ):
Attached is the annual Capacity Development program report submittal from the ( :ate ageno ) and the
previous year's program recommendations (add Report to the Governor if necessan ). I would
appreciate if you would review the annual report and the previous year's recommendations during the
time I work to complete the new system's and existing system's templates.
I will start the (State)review on (dati ) beginning with updating the new systems program spreadsheet
then CD Tracker/PET. A link to the completed new system's spreadsheet will be provided on ( late) and
the completed CD Tracker/PET template on ( at ).
I will make an appointment for (five working days after providing links to completed templates) to
discuss the report and make recommendations for the Branch Chief to review. Should any issues occur
during the review which suggests a possible withholding of DWSRF funds, a discussion on the issue
needs to occur with the Branch Chief as soon as possible.
Please contact me if you have any questions or comments any time during the review of the report or
completed templates.
Thanks
(Cap Dev Coordinator)
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43
Attachment 3. Example of email to the Primacy State Cap Dev Coordinators found
acceptable (No major concerns) with recommendations and suggestions for future
reports.
(State Cap Dev Coordinator):
We have reviewed the (State agenc ) Drinking Water Capacity Development program annual submittal
provided to us on ( ate of annual program submitt ). The (State agenc\) Capacity Development
program was fully implementing an acceptable new systems capacity development program, and was
implementing an existing systems capacity development strategy for the (State, Federal) Fiscal Year
(Date).
We do have additional comments to the annual submittal ( ind the Report to the Governc ). We are not
expecting any changes to the current annual submittal, but have recommendations and suggestions for
improvements for future annual submittals ( id the Report to the Governo ).
Our recommendations and suggestions for the new and existing systems, ( ind the Report to the
Governc ) review is as follows:
[Comments, Suggestions and Questions]
We look forward to the discussion.
Please contact me if you have any questions.
Thanks
(Cap Dev Coordinator)
Send to State Cap Dev Coordinator, EPA State Coordinator, (Others as necessary)
Work with the state to have a conference call and send out invitations to everyone.
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44
Attachment 4. Example of email to Primacy State Cap Dev Coordinator with
comments for discussion on the State Capacity Development annual report (Major
concerns).
(State Cap Dev Coordinator and State PWSS Program Manager):
We appreciate the discussion about the issues we have with the review of the ( tate) capacity
development annual report and the inability to complete the CD Tracker form and/or new systems
spreadsheet. We are recommending to the Drinking Water State Revolving Loan Fund Program that the
(State agency) not receive the full allotment of the ( ear State) Drinking Water State Revolving Loan
fund capitalization grant until the information to address these concerns has been provided.
EPA cannot determine ongoing implementation of a fully functional new systems program and
documentation showing the ongoing implementation of the capacity development strategy. The
following are what we require to address the implementation issues:
[List of Concerns/Issues]
We will work with ( tate agenc ) to develop a time table to provide the necessary information before
the grant condition becomes a withholding decision.
If you have questions, you can contact { lsert name of Cap Dev Coordinator} at (Cap Dev coordinator's
phone numbc ).
Thanks
{Supervisor of Cap Dev Coordinator)
Send to State Cap Dev Coordinator, R7 State Coordinator, DRWM Manager (Others as necessary)
(Work with the state on communications as necessary)
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45
Attachment 5. Sample of annual Capacity Development Program determination
memo (acceptable)
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
2 Q Vu REGION 7
| I 11201 Renner Boulevard
Lenexa, Kansas 66219
<-<>
^1- PRO"!4-
MEMORANDUM
SUBJECT: [Year] [State] Drinking Wate Capacity Development Annual Evaluation for [Year] SRF
Grant
FROM: [EPA R7 Capacity Development Coordinator]
Drinking Water Management Branch
TO: [EPA R7 SRF Coordinator]
Wastewater and Infrastructure Management Branch
We have reviewed the [ :ate Agency] [Year] Drinking Water Capacity Development Program Annual
Report submitted [Date], Based on our review of the report, discussions at meetings and conference
calls, the State Agency Drinking water Capacity Development program] has provided documentation to
show (State) was fully implementing an acceptable (approved?) new systems capacity development
program, and was implementing an existing systems capacity development strategy for the (State,
Federal) Fiscal Year (Date) for the reporting period of Time frame],
[Summary of highlights or suggestions from the report submittal]
We would like to thank [if applicable, State of XX Capacity Development Program Manager Name] and
his/her staff for their protection of public health through the drinking water Capacity Development
program.
Questions regarding this matter can be directed to me.
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Attachment 6. Sample of annual Capacity Development Program determination
memo (acceptable with deficiencies)
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
0 REGION 7
. j \ 11201 Renner Boulevard
Lenexa, Kansas 66219
^1- PRO"!4-
MEMORANDUM
SUBJECT: [Year] [State] Drinking Wate Capacity Development Annual Evaluation for [Year] SRF
Grant
FROM: [EPA R7 Drinking Water Branch Chii ]
Drinking Water Management Branch
TO: [EPA R7 SRF Branch Chief]
Wastewater and Infrastructure Management Branch
We recommend conditioning the [ tate, Dat ] Drinking Water State Revolving Fund Capitalization Grant
allotment. The [ itate Agency] has failed to demonstrate full, ongoing implementation of its new systems
program and/or document ongoing implementation of the strategy. We are working with the [ tate
Agenc\ ] to develop a time table to provide the necessary information to complete our report.
The following are the issue(s) for which the [ :ate Agenc } needs to correct:
[Summary of issue(s)]
Please provide us a date which the recommendation to condition the grant needs to change to a
withholding decision so that we may add it to the time table developed with the [ itate Agenc\].
We will keep you informed should the status of this recommendation change.
Questions regarding this matter can be directed to me.
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47
Attachment 7. Sample of annual Capacity Development Program determination
memo (unacceptable)
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
0 REGION 7
. j \ 11201 Renner Boulevard
Lenexa, Kansas 66219
^1- PRO"!4-
MEMORANDUM
SUBJECT: [Year] [State] Drinking Wate Capacity Development Annual Evaluation for [Year] SRF
Grant
FROM: [EPA R7 Drinking Water Branch Chii ]
Drinking Water Management Branch
TO: [EPA R7 SRF Branch Chief]
Wastewater and Infrastructure Management Branch
We recommend 20% withholding of the [ tate, Dat ] Drinking Water State Revolving Fund Capitalization
Grant allotment. The State Agency] has failed to [ emonstrate full, ongoing implementation of its new
systems program and/or document ongoing implementation of the strategy]. The [State Agency] has
said they will not provide the necessary information or reports.
The following are the issue(s) for which the [ :ate Agenc ] has decided not to implement or repeatedly
fails to demonstrate ongoing implementation of a fully functional new systems program and
documentation showing the ongoing implementation of the capacity development strategy and grant
conditioning has failed to achieve desired results:
[Summary of issue(s)]
We will keep you informed should the status of this recommendation change.
Questions regarding this matter can be directed to me.
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Appendix E: Capacity Development (CD) Tracker Instructions
The Annual Regional Capacity Development Program Evaluation is filled out by Regional Capacity
Development coordinators based on data from state Annual Capacity Development Reports. The data
from this evaluation is entered into an access database by the EPA HQ. The CD Tracker enables the
EPA to establish consistent reporting criteria for annual state reports and assess the performance of
the Capacity Development program on a national level. This appendix contains instructions and
further explanation for Regional Capacity Development coordinators filling out the evaluation.
SECTION 1: GENERAL INFORMATION
Under section 1, the form will request basic information about your state and fiscal reporting dates.
Questions include:
1. Select a state for this evaluation.
EXPLANATION: Select the name of the state being evaluated from the drop-down
menu.
2. Does this state use the state fiscal or federal fiscal reporting year? Enter state date for state
fiscal year or federal fiscal year.
EXPLANATION: If the state uses the state fiscal year for the reporting period, enter
the start day of that state fiscal year. If the state does not use the state fiscal year for
the reporting period, leave blank. If the state uses the federal fiscal year for the
reporting period, select the fiscal year from the drop-down menu. If the state does
not use the federal fiscal year for the reporting period, leave blank.
3. Date report was received
EXPLANATION: Enter the date the EPA Regional Capacity Development coordinator
received the Capacity Development Annual Report from the state. If only the month
and year is known, enter "1" as the date. For example, if the report was received in
September 2017 enter 09/01/2017.
4. Date report was approved
EXPLANATION: Enter the date the date the EPA Regional Capacity Development
coordinator approved the report
SECTION 2: NEW SYSTEMS
Under section 2, the form will request information on the implementation, documentation, and
effectiveness of new systems. Questions include:
1. Has the state's legal authority (statutes/regulations) to implement the new systems program
changed within the previous reporting year? If yes: please explain and identify how this has
affected or impacted the implementation of the new systems program. Additional
documentation, including an Attorney General (AG) statement or a statement from a
delegated department attorney, may be required.
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Explanation: If the state's legal authority to implement has not changed, select "no"
from the drop menu. If the State's legal authority to implement has changed, please
explain. Information provided may include programmatic changes or approaches as
well as statute and/or regulation modifications, which can affect the implementation
of the new systems program.
2. Control points: For each control point, indicate which factors (Technical (T), Managerial (M)
and/or Financial (F)) are influenced by the control point.
Explanation: Each state's new systems program identified a set of Control Points,
which is an integrated feature of a state's program. A control point identifies a place
where the primacy agency (or other unit of government) can exercise its authority to
ensure the demonstration of new system capacity. In the column titled "Control
Points" enter a brief description of the state's control points. In the column titled
"Factor Name, select the technical, managerial, and/or financial factors associated
with each control point. You may select multiple Factors for each Control Point (see
the "How to Use this Document" section on the CD Tracker document for instructions
on selecting multiple Factors). If any modifications were made to the Control
Point/Factor during the reporting period, enter a brief description of the change and
the impact made by the change in the third and fourth column, respectively. If no
modification were made during the reporting period, leave blank.
3. Formal documentation on the state's implementation of its new systems program
Explanation: Based on the report provide information that demonstrates that the
state is successfully implementing its new systems program. Information provided
may include a brief discussion on the number of new systems that accumulated a
score of 11 higher the ETT list, the number of new systems permits issued/being
reviewed and any programs/activities the regarding the new system program.
4. Are you satisfied that the state is adequately implementing its new systems program? If no:
please explain why you are not satisfied that the state is adequately implementing its new
system program.
Explanation: Based on the report and communication between the state and the EPA
Regional Capacity Development coordinator during the reporting period, if the EPA
Regional Capacity Development coordinator is satisfied that the state is adequately
implementing its new systems program, select "yes." If not, please explain.
5. Are there trends in new system noncompliance within the past 3 years? If yes: please identify
the trends and how the EPA Region will assist the state in addressing the trends.
Explanation: An examination of any trends may trigger the need to make adjustments
to the state's new system program implementation. Based on the report provide
information that showcase trends in new system compliance during their first three
years of commencement. Information provided may include sanitary survey results,
capacity assessments results, trends in non-compliance with the NPDWRs, etc.
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SECTION 3: EXISTING SYSTEMS
Under section 3, the form will request information on the programs, strategies, and overall success of
existing systems, as well as states' effort in identifying systems in need. Questions include:
1. Existing systems programs/tools/activities: In referencing the state's approved existing
systems strategy, which programs, tools, and/or activities were utilized in acquiring and
maintaining Technical (T), Managerial (M), and Financial (F) capacity?
Explanation: It is recommended that states describe the broad range of programs and
activities employed in their approved strategies and discuss what role those programs
and activities played in building or maintaining capacity of existing systems. In the
column titled "Program Name", enter the name/ brief description of the program. In
the column titled "Category, select from the list the category from the list provided in
the drop menu that best describes the program. More information regarding each
category is provided below. In the next column, provide a brief description on how
the program improves the capacity of drinking water systems. If the program
improves technical, managerial, and/or financial capacity select "yes" or "no" in the
corresponding columns. In the column titled "Program Characterization" select
"Successful" from the drop-down menu if the program has proven success. If the
program has been challenging, Select "Challenging" from the drop-down menu. In the
final column titled "Target Audience" select the targeted audience for the described
program form the drop-down menu. You may select multiple audiences.
Based on the report provide information on existing programs, tools, and activities in
the following categories:
i. Asset management: Information provided may include asset management
trainings, grants/ funding incentives for asset management, or any activities
to promote asset management programs in water systems.
ii. Coordinating Funding: Information provided may include grants or funding
opportunities created using multiple funding sources.
iii. Energy Management: Information provided may include grants/funding
incentives for energy management, or any activities identified to promote
energy management.
iv. Program Collaboration: Information provided may include programs
involving coordination among staff in different programs, divisions or
organizations to achieve a common goal.
v. Rate Setting: Information provided may include grants/funding incentives for
rate setting, number of conducted rate studies, trainings on rate setting
vi. Water Efficiency: Information provided may include leak detection surveys,
grants/funding incentives for water efficiency, or any activities that promote
reducing water wastage.
vii. Water Reuse: Information provided may include initiatives to increase water
reuse.
viii. Water System Partnerships: Information provided may include system
consolidations, operator sharing, etc.
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ix. Workforce: Information provided may include operator trainings, number of
certified operators, initiatives to increase workforce development
x. Other: Information provided may include
2. Based on the existing system strategy, how has the state continued to identify systems in
need of capacity development assistance?
Explanation: This question refers to the method(s) prescribed within the state
strategies for identifying, selecting or prioritizing PWS's in need of assistance.
Information provided may include priority points systems, sanitary survey result, ETT
list, or any methods used to identify and prioritize systems in need of capacity
development assistance.
3. How did the state provide assistance based on systems most in need?
Explanation: Based on the report, provide information on the methods the state uses
to provide assistance to systems in need. Information provided may include
assistance provided by state staff or a third-party TA provider, grant funding through
the DWSRF, or any other methods state use to provide assistance.
4. Describe any changes the state has made from previous years regarding how it identifies
systems in need. Does the state need to change its existing system strategy to reflect those
changes?
Explanation: Based on the report, describe any changes or updates the state has
made from the previous year regarding identifying systems in need. If no changes
were made, leave blank.
5. Did the state perform a review of the existing systems strategy during the reporting period?
Explanation: Based on the report, if the state performed a review of the existing
select "yes" from the drop-down menu and answer. If no, select "no" and leave all
subsequent questions blank.
6. Did the state make any modifications to the existing systems strategy? If yes: describe the
modifications to the existing systems strategy.
Explanation: Based on the report, if the state has made modification to the existing
strategy during the reporting period select "yes" from the drop-down menu and
provide a brief description of the modifications.
7. During the reporting period, were any statewide PWS capacity concerns or TMF capacity
development needs identified? If yes: please enter concern(s) or need(s) below.
Explanation: Based on the report, list all of the concerns identifying in the
"Concern/Need" column of the table. In the "Is this concern/need a continuing
issue?" select yes of the concern is ongoing and select no if the concern has been
addressed during the reporting period. If the concern impacts technical, managerial,
and/or financial Capacity select yes or no in the corresponding column. Next in the
column titled "How was the concern/need identified?", provide a brief description of
methods used to identify the needs. In the final column provide information.
8. Provide formal documentation on the state's implementation of its existing systems strategy.
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Explanation: Based on the report provide information that demonstrates that the
state is successfully implementing its existing systems program. Information provided
may include compliance rates among PWSs, capacity assessments, assistance from
stakeholders, etc.
9. Are you satisfied that the state is adequately implementing its existing systems strategy? If
no: please explain why you are not satisfied that the state is adequately implementing its
existing systems strategy.
Explanation: Based on the report and communication between the state and the EPA
Regional Capacity Development coordinator during the reporting period, if the EPA
Regional Capacity Development coordinator is satisfied that the state is adequately
implementing its existing system strategy, select "yes." If not, please explain.
10. Are there trends in existing system noncompliance within the past 3 years? If yes: please
identify the trends and how the EPA Region will assist the state in addressing the trends.
Explanation: An examination of any trends may trigger the need to update the state's
existing system strategy. Based on the report provide information that showcase
trends in existing system compliance during the past three years. Information
provided may include trends in data from the ETT list, noncompliance rates among
PWSs, etc.
11. List of the documentation used in this assessment of the state's Capacity Development
implementation report for this year
Explanation: List the titles of documents used to assess the state's capacity
development implementation during the reporting period. If possible, include the
state Annual Report and the ETT List in this list.
12. Describe how the state measures the success of the program and indicate how the state will
respond to these measures. This discussion could also include discussion about goals and
measures that are being used in the state.
Explanation: Based on the report provide a brief description of how the state
measures the success of the program and any noteworthy successes during the
reporting period.
SECTION 4: REGIONAL PERSPECTIVES
Under section 4, the form will request information on the states' Triennial Report to the Governor
and the ETT. Questions include:
1. Date of most recent Report to the Governor
Explanation: Enter the date of the most recent Report to the Governor.
2. Describe your thoughts on the Report to the Governor.
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Explanation: Based on the most recent Report to the Governor, provide a brief
description of your thoughts on the quality/content of the report. This section only
needs to be updated triennial.
3. What feedback on the Report to the Governor did the EPA Region provide to the state?
Explanation: Based on the most recent Report to the Governor, provide a brief
description comments made to the states regarding the report. This section only
needs to be updated triennial.
4. Date range (by quarter) of the latest ETT list derived from the ETT Tracker Report (ideally
encompasses a three-year timeframe)
Explanation: Enter the date range of the latest ETT list. This list should include new
and existing systems.
5. Discuss the EPA Regional analysis of the ETT list (this list includes systems that have a score
greater than or equal to 11 at least once during any three-year time period).
Explanation: Based on the ETT data from the date range in question 25, provide a
brief overview. Information provided may include a brief discussion of systems that
have accumulated a score of 11 or higher during the given timeframe, and what was
done to bring those systems back into compliance.
6. What feedback on the ETT list did the EPA Region provide to the state?
Explanation: Based on your communication with the state during the reporting
period, provide a brief overview of feedback on the ETT list. Information provided
may include quarterly calls held with the state, etc.
7. Discussion on identification of Regional trends and how those trends are being addressed.
Explanation: Based on all of the state reports in the EPA Region. Provide an analysis of
any Region wide commonalties seen in the state report. Information provided may
include compliance with new regulations.
SECTION 5: STATE CONTACT INFORMATION
Under section 5, the form will request contact information. Questions include:
1. Contact information for the state's Capacity Development coordinator, Operator Certification
coordinator, and Drinking Water Administrator.
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Appendix F: Glossary of Terms
Term
Definition
Appropriations
The right to withdraw water from its source.
Capital improvements
Fixed outlays needed for the initial design and construction of water
system infrastructure and equipment, such as pumps, pipes, treatment
facilities, etc.
Community water
system (CWS)
According to the Safe Drinking Water Act, a drinking water conveyance
system serving at least 15 service connections used by year-round
residents of the area served by the system or regularly serving at least
25 year-round residents.
Control point
The point in a new system's development at which a state (or other
unit of government) can exercise its authority to ensure the new
system's capacity.
Consolidation
The physical interconnection of two or more water systems without a
transfer of ownership. This is an example of a water system
partnership.
Contaminant
Any physical, chemical, biological, or radiological substance or matter
that has an adverse effect on air, water, or soil.
Contamination
The introduction into water of microorganisms, chemicals, toxic
substances, wastes, or wastewater in a concentration that makes the
water unfit for its next intended use.
Cost-effectiveness
A comparison of costs required for achieving the same benefit by
different means. Costs are usually expressed in dollars, but benefits can
be expressed in another unit (such as a quantity of water).
Distribution system
A network of pipes leading from a treatment plant to customers'
plumbing systems.
Drinking Water State
Revolving Fund
(DWSRF)
State loan fund for drinking water systems established under the Safe
Drinking Water Act.
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Term
Definition
Exemption
Relief from an MCL, treatment technique, or both. A state with primacy
may grant an exemption if the following conditions exist: 1) the system
cannot comply with an MCL or treatment technique due to compelling
factors which may include economic factors; 2) the system was in
operation on the effective date of the MCL or treatment technique
requirement; and 3) the exemption will not result in an unreasonable
public health risk.
Financial Capacity
The ability of a water system to acquire and manage sufficient financial
resources to allow the system to achieve and maintain compliance with
SDWA requirements. Part of a state's Capacity Development Program.
Integrated resource
planning
An open and participatory planning process emphasizing least cost
principles and a balanced consideration of supply and demand
management options for meeting water needs.
Managerial Capacity
The ability of a water system to conduct its affairs in a manner enabling
the system to achieve and maintain compliance with SDWA
requirements, including institutional and administrative capabilities.
Part of a state's Capacity Development Program.
Maximum contaminant
level (MCL)
The maximum permissible level of a contaminant in water which is
delivered to the free-flowing outlet of the ultimate user of a public
water system, except in the case of turbidity where the maximum
permissible level is measured at the point of entry to the system.
Contaminants added to the water under circumstances controlled by
the user are excluded from this definition, except those contaminants
resulting from the corrosion of piping and plumbing caused by water
quality.
Non-community water
system (NCWS)
A public water system that is not a community water system. A non-
community water system is either a transient, non-community water
system or a non-transient non-community water system.
Non-transient, non-
community water
system (NTNCWS)
A public water system that is not a community water system and that
regularly serves at least 25 of the same persons over 6 months per
year. Examples include schools, day-care facilities, and factories.
Primacy
The responsibility for ensuring that a law is implemented, and the
authority to enforce a law and related regulations. A primacy agency
has primary responsibility for administrating and enforcing regulations.
Public water system
(PWS)
A system for the provision to the public of piped water for human
consumption, if such system has at least fifteen service connections
that regularly serves at least 60 days out of the year.
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Term
Definition
Restructuring
Changing the operational, managerial, or institutional structure of
water systems in order to meet the increasing costs and
responsibilities. It is an example of a water system partnership.
Safe Drinking Water
Act (SDWA)
Federal drinking water quality legislation administered by the U.S.
Environmental Protection Agency through state primacy agencies;
amended in 1986 and 1996.
Technical Capacity
The physical and operational ability of a water system to meet SDWA
requirements, including the adequacy of physical infrastructure and the
technical knowledge and capability of personnel. Part of a state's
Capacity Development Program.
Transient non-
community water
system (TNCWS)
A non-community water system that does not regularly serve at least
25 of the same persons over six months per year. Examples include
hotels, restaurants, and campgrounds.
Variance
A mechanism through which a state with primacy may relieve a public
water system from a requirement with respect to an MCL if certain
conditions exist. The conditions are: 1) the system cannot meet the
MCL despite the application of best available treatment technology,
treatment techniques or other means (taking costs into consideration),
due to the characteristics of the raw water sources which are
reasonably available to the system, and 2) the variance will not result in
an unreasonable public health risk. A system may also be granted a
variance from a specified treatment technique if it can show that, due
to the nature of the system's raw water source, such treatment is not
necessary to public health.
Water System
A series of interconnected conveyance facilities owned and operated by
a drinking water supplier.
Water System
Partnerships
Collaborative agreements between water systems to help systems
address challenges, share costs, and improve technical, managerial, and
financial capacity with options ranging from informal arrangements,
such as sharing equipment, to transferring ownership of a system
through consolidation.
Withholding
An irreversible and permanent decrease in DWSRF funding that will
occur by failing to implement a variety of programs (e.g., operator
certification).
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