1

United

Environmental Protection Office of Water EPA 816-R-98-010

Agency 4606 July 1998

 _____________________________________________________________________________

Hypothetical State Programs for

Ensuring that All New Community

Water Systems and Non-Transient

Non-Community Water Systems

Demonstrate Technical, Managerial

and Financial Capacity
2

This document describes four hypothetical State programs that meet the requirements of

§1420(a) of the 1996 Amendments to the Safe Drinking Water Act as outlined in the Guidance

for States on Ensuring that All New Community Water Systems and Nontransient, Noncommunity

Water Systems Demonstrate Technical, Managerial, and Financial Capacity. The approach of

each hypothetical State program is uniquely suited to its governmental and legal structures. The

purpose of this document is to demonstrate the variety of alternative approaches that States might

adopt, emphasizing the significant flexibility inherent in the statutory requirement and EPA's

guidance on this subject. Text boxes throughout the hypothetical program descriptions identify

key points that reviewers might note regarding each program submission.
 The four hypothetical States in this document will be named using the first four letters of the 1

alphabet: State A, State B, State C, and State D.

3

Case One

Background

State A has a large number of public water supplies and a large land area. In 1994, our 1

State developed a program to ensure that all new public water supplies demonstrate technical,

managerial, and financial capacity. Until 1994, our State had faced a rapidly growing inventory of

new, small water systems. Also, we had experienced significant increases in non-compliance with

our drinking water regulations, particularly by these new, small systems. As a result, the

legislature gave the State Department of Environmental Protection (DEP)—the State’s primacy

agency—the authority to prevent the creation of new public water systems that did not have the

wherewithal to comply with our regulations. 

Synopsis

• Basis of Authority. The 1994 Amendments to the State’s statutes on water supply

gave DEP the authority to require that all new public water systems demonstrate

technical, managerial, and financial viability before being awarded a construction

permit or an operating permit. 

• Demonstration of Control Points. Our program has two control points. The first

is a construction permit. No system can be constructed until the system owners

have completed an application that demonstrates all three aspects of capacity. Any

developer who tries to construct without a permit is subject to legal action by the

DEP. The second control point is an operating permit which ensures that systems

are built according to the plans and specifications approved for the construction

permit.

• Plan for Implementation and Ongoing Evaluation. In terms of implementation,

we describe our ongoing efforts to hire and train staff for the program, and educate

developers of new systems. For the ongoing evaluation, our plan will emphasize

verification of program implementation. We also discuss our plan for data

collection and analysis that will be used in program evaluation in future years.

Basis of Authority
4

A reviewer should note that since this

legislation covers all public water supplies,

it exceeds the requirements of the SDWA,

which apply only to community and

nontransient, noncommunity systems.

The drinking water statutes in our State were amended 4 years ago to address the problem

of "non-viable" new public water systems. Traditionally, the State had reviewed only the

technical aspects of a proposed new system’s infrastructure (its plans and specifications) in

conjunction with county commissions (which issued construction permits). There was no review

of the managerial or financial aspects of capacity. Also, while the State had authority to issue

operating permits to water systems, these permits were very limited in nature. Specifically, there

was no provision to ensure that construction was completed in accordance with the approved

plans and specifications. 

The 1994 legislation, however, broadened

the scope of State review of proposed new

systems. As codified in Chapter 46, Section 4 of

the State’s General Laws, this new law covered

all public water supplies (both community and

noncommunity systems) and required the

following: 

No public water supply shall be awarded a construction permit or an operating permit

unless such public water supply demonstrates technical, managerial, and financial

viability to provide potable water that meets the primary drinking water standards

described in (Chapter 46, Section 1 of the General Laws). The Environmental Protection

Board shall promulgate amendments to the Administrative Code, Section 247, to

incorporate these changes in permitting requirements and take such action as necessary

to enforce these requirements. 

The regulations issued by the State DEP pursuant to the 1994 legislation required that the

following items be part of an application for a construction permit:

Technical

• A description of the proposed new system’s service area, and a description of the

service area(s) of any nearby system(s).

• A description of the proposed source(s) of water for the new system and a

description of the treatment processes that will be used to ensure that the water is

potable and meets all State standards.

• Plans and specifications for the design and construction of the system. 
5

A reviewer should note that the State’s

1994 statute, plus the regulations

implementing that statute, demonstrate the

State’s authority.

• An estimate of current and

future water demands for the

system.

Managerial 

• Descriptions of the experience

and expertise of all proposed

managerial and operational personnel for the system.

• An organizational chart of the system and identification of a responsible party.

Financial

• A 5-year financial plan for the system, showing estimated receipts and 

expenditures, including provision for a fund to cover the cost of repairs and capital

replacement.

The regulations implementing the 1994 statute also enhanced the State’s authority to use

an operating permit to ensure the technical capacity of new water systems. The legislative

history showed that many of the problems in State A occurred because developers of new systems

failed to construct the system in accordance with the approved plans and specifications. 

Therefore, the State also has the authority to refuse to give an operating permit until the system

provides as-built plans and a certification by a professional engineer that the system was

completed in accordance with the State-approved plans and specifications. The regulations also

require an inspection of the system after construction and prior to issuance of an operating permit.

Our State Attorney General has certified that the State has the necessary authority to meet

the requirements of Section 1420(a) of the Safe Drinking Water Act. Her opinion is based on an

analysis of both the statutory authority and the implementing regulations described above. Her

opinion states, in part: “. . . the state has the statutory authority to require a demonstration of

technical, managerial, and financial capacity from all proposed new public water systems in the

state. The regulatory basis for implementing this authority resides in Administrative Code,

Section 247, . . .”

Demonstration of Control Points in the New System Development Process

There are two key control points where the State can affect the development of proposed

new water systems: the construction permit and the operating permit. 
6

A reviewer should note that the State has

two control points: the construction permit

and operating permit. 

The construction permit is the first

control point. The 1994 legislation

fundamentally changed the process for new

system development and moved authority from

the counties to the State. The State DEP now

has the final say on whether to issue a permit to

construct. Equally important, its review process requires that the proposed new system

demonstrate all aspects of capacity—technical, managerial, and financial—before the permit is

issued. 

The second control point is the operating permit. After the permit to construct is

issued, the State reviews the system again before issuing an operating permit. This enables the

State to ensure that developers of new systems have constructed those systems in accordance

with the approved plans and specifications.

Both control points are implemented by the State DEP. It has staff with adequate

qualifications to evaluate all aspects of new system capacity. The most comprehensive analysis

takes place during the construction permit process. As shown on the previous page, systems are

required to document technical, managerial, and financial capacity with their applications for

construction permits. The operating permit review (as applied to new systems) is less

comprehensive. Its basic purpose is to ensure that the system was constructed in a manner that is

consistent with the designs and plans that were reviewed and accepted by the State during the

construction permit process. 

Plan for Implementation and Ongoing Evaluation of the New System Capacity Program

Regulations pursuant to the 1994 statute were promulgated during FY97. Therefore, the

program is operational. To verify that our program is being implemented, we plan to collect and

submit the following data during FY99 and for each future year of program implementation:

• Data on the implementation of our new program. This will include statistics on the

number of applications for construction permits, the number of these permits that

were denied, and the number of permits that were amended prior to submission in

response to DEP comment. It also will include statistics on the issuance of

operating permits to new systems. 

- Denial of permit applications, or amendment of those applications to ensure

that systems had technical, managerial, and financial capacity, is one way to

demonstrate that the DEP implemented the regulations. 
7

A reviewer should note that the plan

focuses initially on a verification of

program implementation. The State also

will propose a longer term plan for

evaluation of the effectiveness of the

program. 

The State has identified several areas where

further implementation will be undertaken

during FY99. These include:

• Continuing to hire staff. 

Initially, we did not have staff

with adequate training to

evaluate all components of

capacity. During FY97 and

FY98, we relied on contract personnel with expertise in these areas. During FY98,

we received authority to change position descriptions and hire personnel who met

our needs. This process is ongoing.

• Training all staff. During FY97, we produced a rudimentary guidance for all staff

associated with the new program. In FY99, we plan to revise this guidance

document to incorporate lessons learned in the first two years.

• Educate developers. During the first two years of implementation, developers

were given our regulations. In FY99, we will issue a guidance document that

helps explain the program to them.

For the longer term, we propose our plan for evaluating the success of our new system

capacity program. Our primary objective in evaluation is to show that the new statute and

regulations accomplished their objective. We intend to show that all new systems that have been

given construction and operating permits under the new program meet our requirements for

technical, managerial, and financial capacity. 

We will begin with the collection of baseline data. The first data element would be an

assessment of the capacity of new systems created and approved under the old procedures prior

to the 1994 statute. The elements of technical, managerial, and financial capacity will be the same

as those evaluated under the new construction permit and operating permit requirements. The

next data element would be an assessment of all systems that have received construction and

operating permits after the 1994 statute was implemented. Our expectation is that the capacity of

new systems has substantially improved as the 1994 statute was implemented, particularly in the

managerial and financial areas that were not required for construction permits prior to 1994.

We also intend to collect information that may be helpful to the State as it implements the

new program. This evaluation exceeds the scope specified in the Safe Drinking Water Act

Amendments, but we believe it will improve our program. We wish to assess, for example,

whether the implementing regulations were clear, whether the guidance documents issued to
8

applicants were helpful, and so forth. This may require a small survey of new system owners. 

The results of this survey could then be used to amend future versions of regulations or guidance

documents.
9

Case Two

Background

State B has two distinguishing characteristics that affect its new system capacity program. 

First, our State historically has had large county governments that perform many functions that

might have been performed at the municipal level in other States. Authority for approval of all

land development has been vested in the counties for over 40 years. Second, our State has

adopted state-wide legislation authorizing growth management and regional planning. This

legislation has been tied closely to legislation requiring state-wide planning for public water

supplies.

Synopsis

• Basis of Authority. State B draws its legislative authority from two sources: the

Growth Management and Regional Planning Act and the Public Water Supply

Planning Act. The Water Supply Planning Regulation ties the two pieces of

legislation into one process that uses a water supply plan requirement as a means

of assessing capacity.

• Demonstration of Control Points. Approval of a water supply plan is the State’s

control point. A system cannot initiate construction until both the county planning

commission and the State Department of Health have approved the water supply

plan. The water supply plan provides information on all three aspects of capacity.

• Plan for Implementation and Ongoing Evaluation. The program for State B has

been in operation for several years. The State has developed a plan for verifying

effective implementation. We have also created a process for evaluating the

effectiveness of the program in the context of both the state Public Water Supply

Planning Act and the SDWA.

A Basis of Authority

Our legislative authority is drawn from the Public Water Supply Planning Act and from the

Growth Management and Regional Planning Act. The Growth Management and Regional

Planning Act requires counties to submit and enforce Regional Plans for all land use and

development within their jurisdiction. The Public Water Supply Planning Act requires the

counties to ensure that all proposed public water supplies correspond to the Regional Plan. The

Public Water Supply Planning Act also requires the State to ensure that all proposed public water

supplies demonstrate adequate capacity. This legislation states:
10

A reviewer should note that State B has

clear legislative and regulatory authority to

implement a program for ensuring capacity

in new community and nontransient,

noncommunity water systems. The

program relies on a well-defined

relationship between the county

governments and the State Department of

Health.

All community water systems and nontransient, noncommunity water systems shall have

an approved water supply plan as defined in Chapter 32, Section 9 of the Annotated

Code. All persons proposing to construct a community water system or a nontransient

noncommunity shall submit water supply plans as part of their application for a

construction permit as required in Chapter 32, Section 6 of the Annotated Code. The

Secretary of Health shall prepare regulations implementing this requirement. Such

regulations shall be promulgated no later than 24 months after the effective date of this

Act.

The regulatory authority promulgated by the State is SBAC 222-333-000. It establishes a

process that formalizes the relationship between the State and the counties in implementing both

the Growth Management and Regional Planning Act and the Public Water Supply Planning Act. 

The regulation (SBAC 222-333-000) states:

A proposed community water system or proposed nontransient, noncommunity water

system may not initiate construction before completing an approved water supply plan.

To ensure consistency with Regional Plans, the water supply plan must be submitted to

the appropriate county planning commission. If the water supply plan is found to be

inconsistent with the Regional Plan, the county planning commission must reject the

water supply plan pending revision. If the water system plan is found to be consistent

with the Regional Plan, the county planning commission must forward the water supply

plan to the State Department of Health. The State Department of Health must review the

water supply plan to ensure that the proposed system demonstrates adequate technical,

managerial, and financial capabilities at present and over the long-term. If the water

supply plan does not demonstrate adequate capacity, the State Department of Health will

return the water supply plan to the water system for further clarification. If supplemental

information also proves inadequate, the State Department of Health must reject the water

supply plan. Water supply plans that are determined by the county planning commission

to be consistent with the Regional

Plan and are determined by the State

Department of Health to demonstrate

adequate capacity will be approved to

initiate construction. 

The State Attorney General has

certified that the legislative and regulatory

authority described above provides the State

with the necessary authority to implement the

State program for ensuring capacity in new

community water systems and new

nontransient, noncommunity water systems as

required under the Safe Drinking Water Act Amendments of 1996. Her opinion states:
11

A reviewer should note that in State B, no

water system can begin construction until

their water supply plan has been approved. 

The water supply plan provides a

consolidated approach for assessing

technical, managerial, and financial

capacity in proposed systems.

The State B Water Supply Planning Act and SBAC 222-333-000 provide State B with the

statutory and regulatory authority necessary to ensure technical, managerial, and

financial capacity in all new community water systems and all new nontransient,

noncommunity water systems.

The implementing regulation cited above (SBAC 222-333-000) has been further clarified

with two additional implementing documents: 1) a Memorandum of Understanding between the

counties and the State Department of Health outlining a Standard Operating Procedure for

coordinating approval of water supply plans; and 2) a Guide to Systems for Preparing Water

Supply Plans. These documents are not included in this submission, but can be provided for

review upon request.

The State has developed several additional programs that do not directly address the

capacity of proposed systems, but do serve to limit the number of new systems that are ultimately

developed. As part of the overall growth management program for the State, our legislature has

provided counties with financial incentives to reject applications for construction of new standalone systems. Specifically, the legislature authorized planning grants for counties that were

willing to deter creation of new stand-alone public water systems by extending service from

existing water systems, including (if necessary) the county’s own water system. Also, in its

Intended Use Plan for the Drinking Water State Revolving Fund (DWSRF), the State announced

its intention to give high priority to projects that are consistent with this overall approach. 

Demonstration of Control Points in the New System Development Process 

The control point in State B’s program is water supply plan submission and approval. 

New systems cannot be developed without approved water supply plans. Approval must be

granted by both the county and State Department of Health before construction of the water

system can be initiated. If a system begins construction prior to approval of its water supply plan,

the State will stop construction until the water supply plan is approved. If a new water system

completes construction and begins operation prior to completing an approved water supply plan,

the county will be required to take over operation of the system until the water supply plan has

been approved (using its authority under SBAC 222-333-005).

The elements reviewed by the State

Department of Health are outlined in the Guide

to Systems for Preparing Water Supply Plans. 

They include:

Technical

• A description of the service area

for the system.
12

• A description of the water sources, treatment in place, and proposed treatment

systems.

• An estimate of total water demand, and a projection of future water demand for

the next 10 years. These demand projections must be based on residential,

commercial, and agricultural plans for land use in the service area.

Managerial

• A management plan that describes current operating procedures and identifies the

personnel responsible for operation and management of the system. 

Financial

• A financial plan, linked to the 10-year projection of demand, that shows how the

system will meet its projected maintenance and capital investment needs. This

financial plan must be based on the most recent audited financial statement

prepared by the system and submitted to the State Department of Health (an

annual requirement of the Department).

Plan for Implementation and Ongoing Evaluation of the New System Capacity Program

The program in State B is already implemented. The State has 20 years of experience

with its Public Water Supply Planning Act. The Growth Management and Regional Planning Act

is newer, but has been fully integrated in a comprehensive program for new system capacity. The

program is fully staffed, personnel are trained, and all documents necessary for implementation

have been published.

Verification of program implementation will be provided by submitting:

• Summary statistics on the implementation of the two Acts during FY99. This will

include data on the number of water supply plan submissions and the disposition of

these submissions. As we will show in our evaluation plan, these statistics will not

only help to verify program implementation, they also will show that our program

works. For each future year of program implementation, we will submit the

summary statistics.

• A selection of implementation documents including job descriptions for staff

implementing the program, guidance documents, and related materials.

We also plan to complete a more thorough, long-term evaluation of the program, which

will focus on program outcomes. The scope of this evaluation may exceed the requirements of
13

the Guidance, but the State believes the evaluation will improve program effectiveness. We will

design this evaluation to be consistent with the evaluation objectives specified in the Act that

initially created the program. The Public Water Supply Planning Act used water supply planning

as a method of ensuring that new public water supplies had the wherewithal to meet all of the

State’s drinking water regulations. Today, particularly after the Growth Management and

Regional Planning Act, we have refined our requirements to focus on technical, managerial, and

financial capacity. The basic question for our evaluation, therefore, is whether the water supply

plans (on file in the Department of Health) meet those requirements. To evaluate the outcomes of

our program, we will select a random sample of new systems approved during FY99 and provide

a detailed review of the water supply planning process to determine whether all of these systems

truly demonstrated technical, managerial, and financial capacity. 
14

Case Three

Background

State C is relatively small in both land area and population. Traditionally, our Public

Water System Supervision (PWSS) program has reviewed all proposals for the creation of new

public water systems. County governments have the authority to approve new land development,

but they defer to the State on drinking water issues. The Drinking Water Administrator has used

his statutory and regulatory authority to implement a program to ensure that all new community

water systems (CWSs) and nontransient, noncommunity water systems (NTNCWSs) could

comply with the State’s primary drinking water regulations. 

Synopsis

• Basis of Authority. Using a broad legislative mandate to “protect the quality of

drinking water,” State C has promulgated an implementing authority in its

regulations that requires proposed systems to demonstrate technical, managerial,

and financial capacity before a construction permit will be granted.

• Demonstration of Control Points. A construction permit is the primary control

point. State C requires detailed documentation demonstrating adequacy in all

components of capacity at the control point. Systems attempting to proceed

without the construction permit will be stopped by the State until adequate

demonstration of capacity has been provided.

• Plan for Implementation and Ongoing Evaluation. The program for State C is

fully implemented. State C has kept records of permit actions for over 20 years. 

The State will continue to collect information that can be used to track permit

approval rates, permit denial rates, and the performance of systems for whom

approvals were granted. The State’s documented history of its review of

applications for construction permits will provide a basis for quantitative

evaluation of program implementation and effectiveness.

Basis of Authority

While State C has a broad statutory mandate to “protect the quality of drinking water

provided to residents of the State,” the implementing authority for the state program for

ensuring capacity in new community water systems and new nontransient, noncommunity water

systems resides in regulation in the state’s Administrative Code. State Code R. 555-5555 states:
15

A reviewer should note that State C

possesses a clear implementing authority

that allows the State to deny a construction

permit for a new system if that system lacks

adequate technical, managerial, and

financial capacity.

All proposed community water systems and nontransient, noncommunity water systems

must submit an application and supporting documentation when requesting a permit for

the construction of a new system. Upon receipt of a complete application and

appropriate fees, proposed systems will be evaluated. Proposed systems must

demonstrate technical, managerial, and financial capabilities to reliably meet

performance requirements on a long term basis and be self-sustaining. If review of the

application shows deficiencies, a formal request for clarification will be made to the

applicant. Upon failure to receive clarifying information, or if the supplemental

information is unsatisfactory, the permit will be denied. 

Our State Attorney General has certified that the legislative and regulatory authorities

described above provide us with the necessary authority to meet the requirements of the capacity

development provisions of the Safe Drinking Water Act Amendments of 1996. His opinion

states:

. . .the Public Health Protection Act provides adequate statutory authority to promulgate

State Code R. 555-5555. This regulation provides the State with the authority to require of all

proposed new community water systems and new nontransient, noncommunity water systems a

demonstration of adequate technical, managerial, and financial capacity . . .

For the past 20 years, our Drinking

Water Administrators have aggressively used

this authority to enforce stringent requirements

on those who propose new drinking water

systems. Believing that all public water systems

should have the wherewithal to provide safe

water, and believing that new systems that are

poorly designed, constructed, and operated often

lead to non-compliance with the State’s drinking

water regulations, these Administrators have

consistently used their authority to deny construction permits to proposed new systems with

inadequate capacity. 

Our implementing authority for ensuring capacity is further strengthened by additional

regulations that inhibit the development of new, poorly-planned systems:

• Because most proposed systems in the State rely on ground water sources, we

have adopted some of the most stringent well construction standards in the nation. 

The resulting cost of well construction deters financially unsound proposals. 

• No applicant can receive a construction permit if the proposed system is within 1

mile of a distribution main of an existing system. While exemptions can be
16

A reviewer should note that State C

has a demonstrated record of using

its control point to ensure adequate

capacity since the implementation

of the authority. The control point

allows the State to evaluate all

aspects of capacity thoroughly.

granted, the mere existence of this regulation also encourages connection to

existing systems.

The State’s Public Water System Supervision (PWSS) program is located in the

Department of Health. The regulations described above are implemented exclusively by that

Department. Given the emphasis that the State Drinking Water Administrator has placed on this

issue of new system viability for the past 20 years, he has been successful in creating job

descriptions for personnel in the State PWSS program so that these personnel have the training to

evaluate technical, managerial, and financial aspects of drinking water systems. Since all expertise

is available in-house, and since no responsibilities are delegated to other agencies, there is no need

for collaborative arrangements.

Demonstration of Control Points in the New System Development Process

As shown in citation provided above, the construction permit is our primary control point. 

We have clear authority to deny a permit to a system that does not demonstrate that it has the

necessary technical, managerial, and financial capacity. To implement this authority fully, we

require each system to submit information concerning capacity as part of the permit application. 

We evaluate this information to assess system capacity. The following information is required for

submission in the regulations:

Technical

• An engineering report providing a description of the proposed service area,

proposed sources, a description of treatment processes to be employed, and an

estimation of maximum and future water demands.

• Plans and specifications bearing the seal of a licensed professional engineer.

Managerial

• A certification of ownership signed by the responsible owner or authority.

• A description of the system’s compliance

with the state’s operator certification

regulations.

• A chart of the organizational structure

showing all aspects of water system

management and operation, with detailed

descriptions of major responsibilities for
17

A reviewer should note that the

State’s documented history of its

review of applications for

construction permits will provide a

basis for quantitative evaluation of

program implementation and

effectiveness.

each management position shown on the organizational chart and a description of

the water system’s legal basis.

• An Emergency Management Plan that includes identification of known and

potential natural and human-caused risks to the water system. It must also identify

personnel responsible for actions and describe notification procedures and means

for implementation.

• A description of the training and/or experience of new owners/management in

managing a public water system; include description of proposed plans for

assuring on-going training.

Financial

• A budget developed prospectively for a 5 year period that includes revenues,

operating expenses, reserves, and capital improvements.

• A description of budget/expenditure control procedures and reports to assure

adequate budget control.

Any system that attempts construction without a permit will be stopped by the State until

the necessary demonstrations are made. Legal action may be taken against the responsible party. 

We have a demonstrated record of using our authority and control point to stringently review all

applications. We have required supplemental information from over 60 percent of our applicants. 

We ultimately denied construction permits to just under 30 percent of those applicants. The

remaining applicants made sufficient changes to warrant approval. 

Plan for Implementation and Ongoing Evaluation of the New System Capacity Program

Our program for ensuring capacity in new

community and new nontransient, noncommunity water

systems is currently functioning effectively. Because our

PWSS program has been committed to new system

capacity, and because we have documented our experience

for 20 years, our plan for ongoing evaluation of our new

system capacity assurance plan is comprehensive. We can

not only verify that our program has been implemented, but

we also can evaluate the program’s success and compare

each year’s performance with those of previous years.

Our database enables us to demonstrate, on an annual basis, that:
18

• We have reviewed all applications for construction permits, and that no system

was constructed without the appropriate permit. 

• We have denied construction permits, and required changes in other applications,

so that every approved application demonstrates compliance with our new

system capacity assurance program.

We can present this evaluation quantitatively, comparing previous years to demonstrate

how our program has improved over time. For example, we have longitudinal data on:

• the number of construction permit applications

• the number denied

- the reasons for denial

• the number changed before approval

- the types of changes that were required.

Our past evaluations of these longitudinal data will show that developers of new systems

have learned about our requirements. Over time, the rate of denials has slowed as system owners

and operators better understand our regulations. Over time, we have better compliance with the

financial and managerial components of capacity (which were a difficult subject for systems when

they were first introduced). These, and other results from our evaluations assist our program in

making improvements in implementation.
19

Case Four

Background

State D is a predominantly rural state with few large population centers. Historically,

towns in the state grew up around industrial centers and mining operations. The State recently

has attracted a number of factories and assembly plants for high-tech operations, including

computer manufacturing. As a result, the State is experiencing a new influx both of skilled

laborers and white collar professionals. New development has been of two types: high-end

residential developments and manufactured housing communities. Many of these new

developments build their own water systems. Over the past two years, systems serving these

communities have made up the vast majority of new community and nontransient, noncommunity

water systems in the State.

Synopsis

• Basis of Authority. The State legislature has recently enacted legislation giving the

Department of Environmental Protection statutory authority to implement a

capacity assurance program for new systems. The Department is currently

developing draft regulations to implement the program.

• Demonstration of Control Points. The final program, when fully implemented, will

employ an operating permit as its control point. Each system will be required to

submit for approval a Capacity Development Assessment Package as part of the

application for the operating permit.

• Plan for Implementation and Ongoing Evaluation. The State will verify program

implementation by tracking key implementation statistics, including number of

permit applications, number of permits denied, and number of permits modified as

a result of Department comment. The State will evaluate program success by

comparing initial assessments of capacity against assessments of capacity after two

years of operation. 

Basis of Authority

The State legislature recently enacted legislation giving the State Department of

Environmental Protection statutory authority to implement a program to ensure capacity in new

community water systems and new nontransient, noncommunity water systems. In part, the

statute reads:
20

A reviewer should note that State D

possesses the statutory authority to

implement a program to ensure capacity in

new community and nontransient,

noncommunity water systems. Although the

State has not yet promulgated regulations

implementing the program, regulations are

being developed and are scheduled for

promulgation in February, 1999. The

State’s schedule is realistic based on their

past performance.

The State Department of Environmental Protection has the authority to promulgate all

regulations necessary to ensure that all new community water systems and new

nontransient, noncommunity water systems commencing operation after October 1, 1999,

demonstrate technical, managerial, and financial capacity with respect to each drinking

water regulation in effect, or likely to be in effect, on the date of commencement of

operations.

The State Attorney General certifies that: “State D possesses the statutory authority to

ensure that all new community water systems and new nontransient, noncommunity water systems

. . . demonstrate technical, managerial, and financial capacity . . .”

Because this statutory authority was not enacted until July 1998, the Department of

Environmental Protection has not yet promulgated regulations implementing the program. 

Currently, the Department is drafting language to amend existing regulations that require all new

community water systems to receive an operating permit prior to commencing operations. At

present, the operating permit functions essentially

as a fee program and requires systems to submit

nothing more than a simple application identifying

the name of and contact information for the system

owner and/or manager. The amended regulation

will extend the requirement to all new nontransient,

noncommunity water systems and will require the

submission of a Capacity Development Assessment

Package as a supplement to the existing application. 

The exact contents of the Assessment Package will

be included in the amended regulation. It will

cover all aspects of capacity and will include:

Technical

• a complete system description;

• as-built plans and a certification by a professional engineer that the system was

completed in accordance with the State-approved plans and specifications;

• an infrastructure replacement plan

• an operations plan;

Managerial

• certification of ownership;
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A reviewer should note that State D

has a plan for verifying

implementation and for evaluating

the success of the program. The

State plans to use the evaluation of

program success to make

adjustments to its program.

• an organizational chart that includes an explanation of responsibilities for all

personnel;

Financial

• a budget developed prospectively for a 7-year period; and

• a plan for developing an emergency reserve fund.

Because the language of the draft amended regulation has not yet been reviewed by the

Department’s internal review committee, it can not be provided in this program description. The

amended regulation will be provided for USEPA review as soon as it has been promulgated by the

Department. The schedule is as follows:

• September 1, 1998--complete draft regulation amendment language

• October 1, 1998--complete review by internal review committee and complete all

revisions required by the committee

• October 15, 1998 to January 15, 1999--public comment period 

• February 15, 1999--promulgate amended regulation

This schedule provides more than ample time to respond to any unforseen delays and fully

implement the regulatory program prior to October 1, 1999. This schedule is realistic based upon

our State’s past performance. Two (2) years ago the legislature mandated changes in our sanitary

survey regulations. We developed and promulgated those revised regulations in six (6) months. 

That sanitary survey regulation was at least as complex as this new systems capacity regulation.

Demonstration of Control Points in the New System Development Process

The primary control point exercised by State D will be the operating permit requirement. 

It will be implemented as discussed above.

Plan for Implementation and Ongoing Evaluation of the New System Capacity Program

The first step in our program evaluation process will

be to verify program implementation. To do this, State D

will collect and track the following information:

• Copies of all submitted Capacity

Development Assessment Packages and the

Department’s written evaluation of each

submission.
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• Implementation data, including statistics on the number of applications for

operating permits, the number of these permits that were denied, and the number

of applications/Assessment Packages that were amended prior to re-submission in

response to Department comment on the original Capacity Development

Assessment Package submission. The State is currently developing a database that

will allow the Department to use and analyze this data.

The second step is to evaluate the effectiveness of the State program for ensuring capacity

in new community water systems and new nontransient, noncommunity water systems. This will

be accomplished by specifically evaluating compliance and sanitary survey results for newly

created systems. If consistent weaknesses or inaccuracies are identified, the Department will

make appropriate changes to its new system program.