Capacity Development Program - Strategy Report

Improving The Technical, Managerial, and Financial Capabilities of Public Water Systems in New York

Table of Contents

• Executive Summary
• Glossary of Terms
• Section 1 - Safe Drinking Water Act Requirements
• Section 2 - New York State Public Water System Demographics
• Section 3 - Capacity Development Strategy Preparation Process
• Section 4 - Methods or Criteria to Identify and Prioritize the Public Water Systems in Need of Technical, Managerial and Financial Assistance
• Section 5 - Factors that Encourage or Impair Capacity Development
• Section 6 - Bringing Assistance to Water Systems in Need
• Section 7 - Establishing a Baseline and Measuring Improvements in Capacity
• Section 8 - Public Involvement and Outreach
• Section 9 - Conclusions and Recommendations
• Section 10 - Implementation Plan
• Appendices A-F can be obtained by calling Charles Amento at 518-402-7650
  • Appendix A - Steering Committee
  • Appendix B - Stakeholder and Working Groups
  • Appendix C - Technical, Managerial, and Financial Evaluation Criteria
  • Appendix D - Factors That Encourage or Impair Capacity Development
  • Appendix E - Capacity Enhancement Resource List and User Guide
  • Appendix F - Regional Workshops

Executive Summary

One of the primary goals of the 1996 Amendments to the Federal Safe Drinking Water Act (SDWA) was to focus the country's drinking water programs on protecting public health by preventing problems in drinking water systems. One of the centerpieces was the provision for a capacity development program. The capacity development program calls for states to develop a strategy to ensure that all public water systems acquire and/or maintain the technical, managerial, and financial abilities needed to properly operate, manage and finance their systems.

The 1996 SDWA Amendments require that each State develop and implement a strategy to help public water systems improve their capacity. To meet this challenge and to comply with the five capacity strategy elements outlined in the SDWA, the New York State Department of Health (NYSDOH) convened a steering committee as well as stakeholder and working groups to help develop the required strategy. The groups met on a regular basis over the past year, diligently preparing the components of the strategy and making strategy recommendations to the NYSDOH. This Capacity Development Program Strategy Report is the result of that effort.

The report describes the strategy preparation process, details the manner in which the five capacity strategy elements were considered, and outlines the plan for strategy implementation. The report is divided into ten sections and a brief summary of each section follows:

• Section 1 provides a general introduction to the SDWA and the capacity development program. There are three capacity development provisions through which a public water system's technical, managerial, and financial capabilities will be evaluated. The new system provision requires all new community water systems and all new nontransient, noncommunity water systems that begin operation after October 1, 1999 to demonstrate adequate capacity. The Drinking Water State Revolving Fund provision prohibits states from providing Drinking Water State Revolving Fund assistance to public water systems that lack adequate capacity. The existing system provision requires that states develop and implement a strategy to assist existing public water systems acquire and maintain the necessary capacity. This report has been prepared to satisfy the existing system provision and considers the five capacity strategy elements, required by the SDWA, in sections 4 through 8;
• Section 2 defines the meaning of public water systems, community water systems, and nontransient noncommunity water systems as they apply in New York State. Demographic information for public water systems in New York is also presented;
• Section 3 describes the process of strategy preparation. Initially, a steering committee was convened to define the strategy preparation process and to identify those groups and/or individuals with an interest in capacity development issues and who might want to participate as a stakeholder in strategy preparation. A stakeholder and three working groups were then convened and asked to help prepare the various components of the capacity development strategy, based upon the five capacity strategy elements found in the SDWA;
• Section 4 begins the description of how the stakeholder and working groups considered each of the five capacity strategy elements. In this section, the methods used to identify and prioritize public water systems in need of technical, managerial, and financial assistance are detailed. Criteria for evaluating the technical, managerial, and financial capabilities of a public water system are proposed. The "triggers" that identify which public water systems need to improve their capacity and a five-step method of prioritizing public water systems are presented;
• Section 5 identifies and describes the institutional, regulatory, financial, tax, or legal factors at the Federal, State, and local levels that encourage or impair capacity development. An extensive list of 320 factors, 155 factors that encourage capacity development and 165 factors that impair capacity development, was compiled into twenty-seven tables. Those factors that impair capacity development are prioritized and possible solutions for overcoming these barriers are presented. In addition, some long-range goals for overcoming some of the more difficult capacity development barriers are discussed;
• Section 6 describes how the State will use the authority and resources of the SDWA to bring assistance to public water systems in need. The programs, services, tools, and other resources that are available to assist public water systems acquire, maintain, and build upon their technical, managerial, and financial capabilities are identified and compiled in a "capacity enhancement list." Recognizing that an extensive list of resources might not be useful for people who are unfamiliar with the operations of a public water system, a user guide that directs people to the appropriate resource was also developed. Further, several recommendations are made for encouraging cooperative arrangements or restructuring among public water systems;
• Section 7 describes the manner in which a baseline measure of the capacity of public water systems will be established and how measures of improvements to the capacity baseline will be made. The baseline measure of capacity for each public water system is based upon its compliance record, results from a sanitary survey or comprehensive performance evaluation, and results from a capacity evaluation. Measures of improvements to a public water system's capacity baseline are based upon the same three factors and are outlined in this section;
• Section 8 describes the process of identifying and involving interested parties in strategy preparation, providing education and training about the capacity development program and the capacity development strategy, and conducting statewide outreach activities and soliciting public comments on the capacity development strategy;
• Section 9 summarizes how implementation of the five SDWA program elements can constitute a comprehensive strategy to address the capacity challenges faced by public water systems in New York to ensure that systems can achieve the necessary technical, managerial, and financial capacity. Also, the recommendations for encouraging partnerships between systems are summarized; and
• Section 10 provides the plan for implementing the capacity development strategy, including the roles and responsibilities of the State agencies and their partners. In addition, the manner in which New York State will report to the United States Environmental Protection Agency is described.

Glossary of Terms

Community water system (CWS) is a public water system with at least five service connections used by year-round residents or regularly serves at least 25 year-round residents.

Drinking Water State Revolving Loan Fund (DWSRF) was created in 1996 as a result of New York State's enactment of Chapter 413 of the Laws of 1996 (Clean Water/Clean Air Bond Act) and passage of the 1996 Amendments to the Safe Drinking Water Act by the U.S. Congress.

New York State Department of Health (NYSDOH) is the agency responsible for administering the drinking water program in the state.

Noncommunity water system (NCWS) is a public water system that provides water to people in places other than their residences.

Nontransient, noncommunity water system (NTNCWS) is a public water system that does not serve a resident population but serves at least 25 of the same persons, four hours or more per day, for four or more days per week, for 26 or more weeks.

Public water system (PWS) is a community, noncommunity, or nontransient noncommunity water system that provides piped water to the public for human consumption. The system must have at least five service connections or regularly serve an average of at least 25 individuals daily at least 60 days out of the year.

Safe Drinking Water Act (SDWA) is the federal law passed by the U.S. Congress in 1974 and amended in 1986 and 1996, which authorizes the United States Environmental Protection Agency and the States to oversee public water systems and set standards for drinking water to protect public health.

Significant noncomplier (SNC) is a public water system that persistently violates drinking water standards specifically defined in USEPA policy.

United States Environmental Protection Agency (USEPA) is the federal agency responsible for overseeing the state drinking water programs.

Section 1

Safe Drinking Water Act Requirements

1.0  Introduction

One of the focuses of the 1996 Safe Drinking Water Act (SDWA) Amendments is to ensure that public water systems have the ability to provide safe drinking water to the public. The Amendments seek to prevent compliance problems and associated health risks by ensuring that public water systems have the capability to produce safe drinking water now and in the future. To achieve these goals, the Amendments include provisions for several prevention programs – one of which is the capacity development program.

Water system capacity is the ability to plan for, achieve, and maintain compliance with all applicable drinking water standards. There are three components to capacity: technical, managerial, and financial. Technical capacity refers to a water system's ability to operate and maintain its infrastructure. Managerial capacity refers to the expertise of the water system's personnel to administer the system's overall operations. Financial capacity refers to the financial resources and fiscal management that support the cost of operating the water system. Adequate capability in all three areas is necessary for the successful operation of a public water system.

Capacity development is the process by which water systems acquire, maintain, and build upon their technical, managerial, and financial capabilities to enable them to consistently provide safe drinking water to their customers in a reliable and cost-effective manner. As written in the SDWA, the capacity development program provides a framework for state agencies, local governments, stakeholder groups or organizations, water systems and the public to work toward ensuring that drinking water systems acquire and maintain the technical, managerial and financial capacity needed to achieve public health objectives (i.e. compliance with applicable State and Federal drinking water regulations).

1.1  Capacity Development Provisions in the SDWA

The 1996 SDWA Amendments include several capacity development provisions under which new and existing water systems are to be evaluated for their technical, managerial, and financial capabilities and through which existing water systems can acquire, maintain, and build upon their technical, managerial, and financial capabilities.

The Amendments prohibit States from providing Drinking Water State Revolving Fund (DWSRF) monies to a system that lacks the capacity to comply with applicable State and Federal drinking water regulations. The Amendments also require that States obtain the legal authority to ensure that new systems demonstrate adequate capacity, and that States develop and implement a strategy to assist existing systems in acquiring, maintaining and building upon their capacity.

1.1.1  New Systems Provision

Section 1420(a) of the SDWA, the new systems provision, applies to all new community water systems (CWSs) and all new nontransient, noncommunity water systems (NTNCWSs) that begin operations after October 1, 1999. Under this provision New York State was required to demonstrate that it has the legal authority to ensure that all new CWSs and all new NTNCWSs have the technical, managerial, and financial capacity to comply with all applicable State and Federal drinking water regulations in effect, or likely to be in effect, on the date of commencement of operations. On February 26, 1999 the United States Environmental Protection Agency determined that New York State met the guidance and statutory requirements under Section 1420(a). On October 1, 1999 New York State began implementing the new systems provision of the SDWA.

1.1.2  DWSRF Applicants

Section 1452(a)(3) of the SDWA applies to those public water systems that seek assistance from the DWSRF. Under this provision, states are prohibited from providing DWSRF assistance to a public water system that lacks the technical, managerial, and financial capability to ensure compliance with the SDWA or that is in significant noncompliance with applicable State and Federal drinking water regulations. However, states are allowed to provide DWSRF assistance to such a public water system if the use of the assistance will assure compliance, or if the owner or operator of the system agrees to undertake feasible and appropriate changes to acquire and maintain the system's technical, managerial, and financial capabilities over the long term. Each DWSRF applicant must demonstrate that its water system possesses adequate technical, managerial, and financial capacity prior to receiving DWSRF assistance from New York State. The State's review criteria are detailed in each year's Intended Use Plan issued under the DWSRF program.

1.1.3  Existing Systems Provision

Section 1420(c)(2) of the SDWA requires that New York State develop and implement a capacity development strategy to assist public water systems acquire and maintain technical, managerial, and financial capacity.

Under this provision, New York State must "consider, solicit public comments on, and include as appropriate" the following five elements:

• Methods or criteria to identify and prioritize the public water systems most in need of improving their technical, managerial, and financial capabilities [§1420(c)(2)(A)]
• The institutional, regulatory, financial, tax, or legal factors that encourage or impair capacity development at the Federal, State, or local level [§1420(c)(2)(B)]
• How the State will use the authority and resources of the SDWA to assist public water systems in need, to encourage cooperative arrangements between public water systems, and to assist in the training and certification of operators [§1420(c)(2)(C)]
• How the State will establish a capacity baseline and measure of improvements in capacity [§1420(c)(2)(D)]
• An identification of those persons that have an interest in and are involved in the preparation and implementation of the capacity development strategy [§1420(c)(2)(E)]

The SDWA allows each state to consider each of the five elements and determine which, if any, of those elements best fit the needs of the state. The capacity development program stakeholder group recommended that the New York State Department of Health consider and include each of the five elements, to ensure a comprehensive capacity development strategy for New York State.

Section 2

New York State Public Water System Demographics

2.0  Program Demographics

In New York State, there are over 10,000 public water systems (PWSs) of which over 9,000 have their own sources of water. A water system that provides piped water to the public for human consumption is regulated as a public water system if it has at least five service connections or regularly serves an average of at least 25 individuals daily for at least 60 days out of the year. These 9,000 PWSs systems are served by approximately 14,000 sources of water in New York State. The source waters serving a public water system may consist of ground water, surface water, or a combination of both ground and surface water.

There are several different types of PWSs in New York State: community water systems, noncommunity water systems, and nontransient noncommunity water systems. There are about 3,400 CWSs in New York State. A community water system is a public water system that serves at least five service connections used by year-round residents or regularly serves at least 25 year-round residents. Some examples of CWSs include: municipal water systems (about 1,200 systems in New York State), investor owned water companies that serve residential populations (about 350 systems), county authorities and major wholesalers, and mobile home parks, apartment complexes and permanent residential institutions such as nursing homes (about 1,700 systems). It is estimated that approximately 151 CWSs serve 87 percent of the population of New York State.

There are about 6,600 noncommunity water systems in New York State. These noncommunity systems are further divided into whether they serve regular (nontransient) or variable (transient) consumers. A nontransient noncommunity water system (e.g., schools, and commercial/industrial facilities) maintains its own drinking water sources and regularly serves at least 25 of the same people, four or more hours per day, for four or more days per week for 26 or more weeks per year. There are about 750 NTNCWSs in New York State. All other types of noncommunity water systems are transient, noncommunity water systems (e.g., restaurants and motels). There are about 5,850 such systems in New York State that maintain their own source and provide water to transient populations.

In 1974, the New York State Department of Health was granted authority (primacy) for implementation of the Public Water System Supervision Program established in the SDWA. While being centrally administered, the regulatory oversight of the public water supply program in New York State is provided through 46 local health departments (36 county health departments, one city health department, and 9 state district offices) located throughout the state. Under the SDWA and its amendments, national limits on contaminant levels in drinking water have been established to ensure that public drinking water is safe for human consumption. In New York State, drinking water standards are established in the State Sanitary Code, 10 NYCRR Section 5-1.

Section 3

Capacity Development Strategy Preparation Process

3.0  Role of the New York State Department of Health

The New York State Department of Health (NYSDOH), as the SDWA primacy agency, is responsible for developing and implementing a capacity development strategy for New York State. From the beginning, the NYSDOH recognized that a coordinated effort among state agencies, local governments, stakeholder groups or organizations, water systems and the public was necessary to ensure the successful preparation of a comprehensive capacity development strategy. In addition, the NYSDOH recognized that it was important for stakeholders to participate fully and freely in discussions. Therefore, the NYSDOH enlisted the assistance of the Maxwell Environmental Finance Center located at Syracuse University to host and facilitate the steering committee meetings and the stakeholder group meetings as well as facilitate the statewide workshop sessions.

3.1  Steering Committee

A steering committee was formed from a small group of individuals with some background in capacity development issues. The NYSDOH recognized that some knowledgeable groups and individuals were not included in the steering committee. However, the intent was to keep this committee small because of the need to act quickly and efficiently to get the process started. All stakeholders had ample opportunity to participate in the full stakeholder's process. The individuals invited to participate on the steering committee, along with the organization that they represent, can be found in Appendix A.

The steering committee met on two occasions, December 4, 1998 and January 11, 1999, and was able to successfully accomplish its specific goals. The members of the steering committee were asked to define a process through which strategy preparation could take place and to identify those groups and/or individuals that should participate as stakeholders in the strategy preparation. The steering committee determined that the process should involve three working groups within an overall stakeholders group. The three working groups, made up of interested individuals, would be asked to work on various pieces of the capacity development strategy, based upon the five elements described in the SDWA. The broader stakeholder group, made up of working group members and any other interested individuals, was asked to review work group strategy components and provide strategy recommendations to the NYSDOH. The individual meeting agendas, attendance sheet, meeting summaries, the process for strategy preparation, and the stakeholder governance structure can also be found in Appendix A.

Lastly, the steering committee identified an extensive list of potential stakeholders and interested parties who should be invited to participate in the preparation of a capacity development strategy. The list included representatives from government agencies, local government and organizations, the drinking water industry, the financial community, consumer advocates, and many other groups who were considered likely to have an interest in or be affected by the capacity development program. The list of potential stakeholders can be found in Appendix A.

3.2  Stakeholder and Working Groups

3.2.1  Stakeholder Group

Using the list of potential stakeholders and interested parties prepared by the steering committee, the NYSDOH contacted and invited a diverse group of individuals to the initial capacity development stakeholder meeting on March 2, 1999. The stakeholders were provided with a general overview of the capacity development program; informed of the accomplishments of the steering committee, including the outline of tasks and objectives for the stakeholder and working groups; and asked to participate in the stakeholder process and on the working group of their choice. The list of invitees, meeting agenda, and meeting summary, including the attendance list, can be found in Appendix B.

The stakeholder group was convened periodically to receive updates from each working group, to review and comment on the progress of each working group, and to provide recommendations to the NYSDOH. In addition to the meeting on March 2, 1999, stakeholder meetings were held on June 3, 1999, May 5, 2000, and June 22, 2000. The meeting agendas, attendance sheets, and meeting summaries can also be found in Appendix B.

3.2.2  Working Groups

Based on the five capacity elements found in the SDWA, three working groups were formed to work on the various pieces of the capacity development strategy. The three working groups are Criteria and Assessments, Barriers and Incentives, and Capacity Enhancement. The Criteria and Assessments working group established criteria to identify and prioritize those water systems in need of improving their capacity. This working group also recommended a method for establishing a baseline of system capacity and means for measuring improvements in system capacity. The Barriers and Incentives working group identified institutional, regulatory, financial, tax, and legal factors that encourage or impair capacity development at the Federal, State, and local levels. The Capacity Enhancement working group identified resources available to water systems and described how the State and its partners could bring those resources to systems in need. The fifth capacity element, identifying interested parties and soliciting public input required involvement from all stakeholder and working group members and, therefore, was assigned to the overall stakeholder group. Sections 4 through 8 of this document are devoted to the five capacity elements as they pertain to water systems in New York State.

Section 4

Methods or Criteria to Identify and Prioritize the Public Water Systems in Need of Technical, Managerial and Financial Assistance

4.0  Technical, Managerial, and Financial Evaluation Criteria

The Criteria and Assessments working group was asked to identify and prioritize the public water systems most in need of improving their technical, managerial and financial capacity. Compliance requirements and survey results provide a good deal of technical information about systems. In comparison to technical information, there is a limited amount of financial and managerial information. The working group recognized that additional information was needed from public water systems to fully evaluate their operations and to determine their technical, managerial, and financial strengths and weaknesses. Therefore, the working group developed criteria for evaluating technical, managerial and financial capacity that can be applied to all public water systems. The evaluation criteria can be found in Appendix C.

Once the evaluation criteria were established, the working group then discussed how and when these evaluations should be applied. The evaluations are comprehensive in nature to enable the State and system to identify the type of assistance needed as well as the resources offered under the capacity development program. The work group recommended a method for establishing priorities for determining which systems have technical, managerial, and financial capacity needs and therefore, should be evaluated.

4.1  Identifying Systems in Need

The Criteria and Assessments working group identified certain "triggers" or criteria to use to determine which public water systems are in need of improving their technical, managerial, and financial capacity and should receive a capacity evaluation. The items identified as "triggers" for the capacity evaluation of a water system include:

• significant non-compliance;
• violation(s) of a maximum contaminant level, treatment technique, or major monitoring requirement (major monitoring violations are defined in USEPA policy);
• violation(s) of significant sanitary code requirements, such as lack of any reporting;
• potential MCL violation(s) due to pending regulatory changes or to trends in contaminant levels;
• a source water assessment that identifies the need for source water protection;
• applications for DWSRF assistance;
• recent sanitary surveys which identify significant deficiencies;
• an annual financial reporting statement that has identified fiscal concerns;
• applications to create a new water system within a municipality that already has one or more existing districts;
• repeated emergency outages or when a system demonstrates an inability to adequately respond to a specific emergency; and
• formal requests for a capacity evaluation from a system.

After establishing the criteria to identify water systems in need of assistance, the working group proceeded to set up a ranking system to prioritize those systems in need.

4.2  Prioritizing Systems in Need

The Criteria and Assessments working group recommended a five-step method of prioritizing those systems identified as needing assistance with their technical, managerial, and financial capacity, as well as all other public water systems. The following ranking scheme or hierarchy of public water systems was recommended.

1. The highest priority level was assigned to those systems having a critical need. Systems with a critical need include those identified as a significant non-complier, having maximum contaminant level violations, or experiencing repeated emergency outages.
2. The second priority level was assigned to those systems having a serious need. Systems with a serious need include those having treatment technique or major monitoring requirement violations, having significant sanitary code requirement violations, facing significant potential violations, or receiving poor sanitary survey results.
3. The third priority level was assigned to those systems demonstrating a need, although not critical or serious, for a capacity evaluation. Systems that fall into this category include those applying for funding under the DWSRF, needing source water protection, identifying potential fiscal concerns, or forming a new water district in a municipality where one or more districts already exist.
4. The fourth priority level was assigned to those systems that request a capacity evaluation.
5. A fifth priority level was assigned to all other public water systems.

Section 5

Factors that Encourage or Impair Capacity Development

5.0  The Factors that Affect Capacity Development

The Barriers and Incentives working group was asked to describe the institutional, regulatory, financial, tax, or legal factors at the Federal, State, and local levels that encourage or impair capacity development. In order to conduct a thorough review and produce a comprehensive list of factors, the working group divided its review into technical, managerial, and financial components. They recommended that each component be further divided to consider the key issues associated with each component. Therefore, the working group described the factors at the Federal, State and local levels that encourage or impair source water adequacy, infrastructure adequacy, and technical knowledge under the technical component of capacity development. Under the managerial component of capacity development, the working group described the factors at the Federal, State, and local levels that encourage or impair ownership accountability, staffing and organization, and effective linkages. Under the financial component of capacity development, the working group described the factors at the Federal, State and local levels that encourage or impair revenue sufficiency, credit worthiness, and fiscal controls. The comprehensive list of factors was compiled into twenty-seven (27) tables, which can be found in Appendix D.

The working group identified 320 factors at the Federal, State, and local levels that either encourage or impair capacity development. There were 155 factors listed as encouraging capacity development and 165 factors listed as impairing capacity development. For those factors that encourage capacity development, the working group felt that there was no reason to make any recommendations to change them at this time. Instead, the working group decided to address the factors that impair capacity development.

5.1  Overcoming Barriers to Capacity Development

5.1.1  First Year Priorities

The Barriers and Incentives working group identified 165 factors at the Federal, State, and local levels that impair capacity development. The working group recognized that recommending methods to address all identified barriers would not be a meaningful way in which to overcome those barriers. Therefore, the Barriers and Incentives working group, in partnership with the Capacity Enhancement working group, focused on ranking and prioritizing solutions to a number of barriers that could be realistically impacted over the next year. The working groups identified three barriers that should be considered a priority over the next year. Those barriers, along with recommendations for overcoming the barriers, are listed below.

• Institutional barrier. The working groups identified the lack of formal coordination among funding organizations and the need to bring representatives of the different funding organizations together periodically to discuss general and project-specific funding issues. The recommendations for overcoming this barrier include:
  • Working through a statewide organization to sponsor semi-annual forums/meetings for the funding organizations;
  • Forming a broad, permanent committee to hold meetings for the funding organizations and affected parties; and
  • Having the applicable funding organizations and governmental agencies agree to a unified approach for providing the same information, guidance, and/or interpretation of rules and regulations that apply in financing specific system projects.
• Institutional barrier. The working groups identified the lack of knowledge at the community level regarding capacity issues pertaining to water systems in general, capacity development strategies, and in understanding how the capacity development of a water system ties into a community's overall well being. The recommendations for overcoming this barrier include:
  • Providing outreach, education, and training for local officials, water system owners and operators, and local health department staff; and
  • Offering incentives to local officials to attend training sessions about capacity development, water system operations and management, and other drinking water programs.
• Financial Barrier. The working groups identified the lack of upfront money for project engineering and planning purposes. The recommendations for overcoming this barrier include:
  • Making short-term grants or loans available through the DWSRF; and
  • Support efforts to provide short-term financing for projects that are likely to be funded.

5.1.2  Long Range Goals

The Barriers and Incentives and Capacity Enhancement working groups identified two barriers that will likely take more than one year to overcome. However, the working groups agreed that activities to overcome these barriers should be initiated in the first year. Those barriers, along with recommendations for overcoming the barriers, are listed below.

• Regulation barrier. The working groups agreed that rules and regulations are more burdensome for small government and small private systems than they are for larger municipal and private systems. Also, pending regulations required by the 1996 SDWA Amendments will present a compliance problem for some small systems. The recommendations for overcoming this barrier include:
  • Working to streamline or simplify the regulations; and
  • Providing training and assistance, especially to small governments and small private systems to help them understand the rules and regulations that are applicable both now and in the future.
• Institutional and Legal barriers. The working groups identified the lack of rate review at the local level and the lack of rate setting authority at the State level for the historically low and under priced customer costs for drinking water. A water system that is not able to raise the necessary revenues to support its operating expenses, places an undue burden on its technical, managerial, and financial capabilities and its ability to produce safe drinking water. The recommendations for overcoming these barriers include:
  • Encouraging public water systems to review their rates periodically and adjust them as necessary;
  • Reviewing a community's annual financial statement and targeting "fiscally stressed communities" for fiscal management training;
  • Reviewing the rate structure for those projects seeking funding under the DWSRF program; and
  • Preparing guidelines for water systems to use when reviewing their rate structure and for setting the appropriate rates for their customers.

5.2  Future Determination of Factors That Affect Capacity Development

On an annual basis, the NYSDOH and stakeholders should review the institutional, regulatory, financial, tax, and legal factors at the Federal, State, and local levels that encourage or impair capacity development. They could update the list of factors as necessary and evaluate the progress that was made in overcoming the previous year's prioritized barriers. They would then select a new priority list of barriers that can be realistically impacted over the next year. In this manner, the NYSDOH will have an ongoing mechanism to identify factors that affect capacity development and to evaluate the efforts made in overcoming barriers to capacity development.

Section 6

Bringing Assistance to Water Systems in Need

6.0  Identifying Resources to Assist Systems Improve Their Capacity

The Capacity Enhancement working group was asked to identify the programs, services, tools, and other available resources that the State and its partners can use to assist public water systems acquire, maintain, and build upon their technical, managerial, and financial capabilities. The working group started to prepare a list of available resources and realized that the New York State Legislative Commission on Rural Resources had published a similar guide to assistance programs called "Keeping New York's Waters Pure." Rather than duplicating efforts, the working group requested permission from the Commission to use their publication as the basis for its list of available drinking water resources. The New York State Legislative Commission on Rural Resources graciously agreed to the working group's request, and the result is the "capacity enhancement list" of available drinking water resources that can be found in Appendix E. The Capacity Enhancement Resource List identifies and describes the programs, services, tools, and other resources that are available to assist public water systems improve their capacity.

The working group compiled an extensive list of resources that are available to assist systems improve their capacity. However, the working group agreed that the Capacity Enhancement Resource List might not be useful to people who are unfamiliar with the manner in which a water system operates. To rectify that situation, the working group prepared a User Guide to accompany the Capacity Enhancement Resource List. The User Guide directs those who are seeking assistance and are unfamiliar with water system operations, to the appropriate resource in the Capacity Enhancement Resource List. The User Guide can also be found in Appendix E.

It should be noted that improving a community's public water system capabilities through the capacity development program is one important piece of a community's long-term planning efforts. Some of the resources, services, and tools identified in the capacity enhancement list may also be used by local officials to assist them in understanding the broader picture of community-wide planning and development.

6.1  Encouraging Partnerships Between Systems

The Capacity Enhancement working group was asked to identify programs or recommend ways to encourage the development of cooperative arrangements between public water systems. The cooperative arrangements could result in the restructuring of the systems involved in the cooperative arrangement. Restructuring is defined as changing the operational, managerial, or institutional structure of a water system in order to meet the increasing costs and responsibilities of the SDWA while still providing water at an affordable price. The cooperative arrangements, or restructuring, between systems can include partnerships, mergers, consolidations, and sharing of operators, laboratory services, billing, and administrative responsibilities to name a few examples. These cooperative arrangements can enhance the technical, managerial, and financial capability of a public water system that entered into the arrangement. The working group made the following recommendations:

• The NYSDOH should review the law that encourages the merger of school districts in New York State. This law may provide useful information for modeling or encouraging water system mergers. At the very least, however, it is likely that New York State may need to offer incentives to municipally owned and privately-owned water systems to promote the restructuring of the more troubled water systems. It should be noted that the SDWA provides incentives for capable systems to consolidate with systems in significant noncompliance. Section 4141(h) provides States with the opportunity to target systems for which consolidation may help build technical, managerial, or financial capacity with the promise of additional time to remedy compliance problems before enforcement action is taken;
• The State should provide systems with financial assistance in the form of grants or low interest loans, through the DWSRF technical assistance set-aside to help fund short-term, non-routine costs. This financial assistance could be used by systems to pay for planning needs, engineering and/or other preliminary studies, and legal costs associated with the formation of a partnership; and
• The NYSDOH and its partners can assist systems to form cooperatives. Systems may join together to buy or share goods and services. By joining together, the systems can achieve greater economies of scale and reduce the unit prices of their purchases. Examples of goods and services that may be purchased more cheaply include operation and maintenance services, lab services, chemicals, and equipment. Cooperatives may be able to share equipment, such as construction machinery that is not in continual use. Systems may also opt to join together under common management so that the same people perform all managerial functions (e.g. billing, collection, operations, etc.). These cooperatives should specify the activities and role of each system and state how the financial responsibilities are addressed. The majority of the work in drawing up one of these cooperatives can often be done by a technical service provider, which could save legal fees. However, an attorney representing each system should review the cooperative before it is made final.

6.2  Training and Certifying Operators

New York State has benefited from the existence of an operator certification program since the 1930's. In addition, New York State was one of the first States to have a certification renewal program, requiring operators to attend ongoing training sessions in order to maintain their certification. The NYSDOH is currently updating its regulations to reflect the minimum guidelines required under the SDWA Amendments of 1996.

Section 7

Establishing a Baseline and Measuring Improvements in Capacity

7.0  Baseline Measure of Capacity

The Criteria and Assessments working group was asked to work on a baseline measure of public water system capacity and a means to measure improvements in the capacity of public water systems. The working group agreed that the approach to measuring capacity needed to apply to all public water systems in a way that was fair and, yet, meaningful. The working group recommended that an individual system evaluation, using criteria that is available for each system and applies specifically to that system, was the best approach to measuring capacity.

The working group recommended that a baseline measure of capacity be established using information that is available from compliance data and system surveys and assessments, along with new information about the technical, managerial, and financial (T, M, &F) capabilities of a system gathered from a system capacity evaluation. Therefore, a system's baseline measure of capacity can be established using three pieces of information: compliance data, results from a recent (within five years) sanitary survey or comprehensive performance evaluation (CPE), and results from a system capacity evaluation. In combination, these three pieces of information will provide a fair and meaningful measure of capacity for each individual system. The baseline measure of system capacity is represented by the equation

Baseline

=

Compliance Information

+

Sanitary Survey and CPE Information

+

T,M,&F Information

where each piece of the equation is described below:

• Compliance information demonstrates the system's record of compliance with Federal and State drinking water regulations. Compliance information can be gathered by reviewing the significant non-complier list and the system's compliance record, including maximum contaminant levels, treatment techniques, monitoring and reporting, and other sanitary code requirements;
• Sanitary survey and comprehensive performance evaluation results can provide information regarding a system's specific condition. Sanitary surveys and comprehensive performance evaluations identify infrastructure, operational and managerial deficiencies where corrective actions are deemed necessary; and
• A thorough understanding of a system's technical, managerial, and financial capabilities can be gathered by using the capacity evaluation criteria found Appendix C. The results of the capacity evaluation, unique to each system, identify the strengths and weaknesses of the system and provide the information required to complete the baseline measure of system capacity.

A baseline measure of capacity cannot be established if one of the pieces of the equation is missing. Therefore, compliance information must be gathered, a sanitary survey or comprehensive performance evaluation must be performed, and a capacity evaluation must be conducted on each system prior to establishing the baseline measure of capacity.

7.1  Measuring Improvements in Capacity

The Criteria and Assessments working group, using the same three pieces of information that established the baseline measure of system capacity, proceeded to identify an approach to measuring improvements in system capacity. The working group recommended that the success of capacity development efforts for each individual system be measured in the following manner:

• Compliance information – a public water system can show improvement to their capacity by correcting previous violations, not being cited for any new violations, and complying with applicable regulations;
• Sanitary survey and comprehensive performance evaluation results – a public water system can show improvement to their capacity by taking corrective actions in those areas of deficiency identified by a sanitary survey or comprehensive performance evaluation; and
• Capacity evaluation criteria – a public water system can show improvement to their capacity by demonstrating that the system has acquired or is building upon their technical, managerial, and financial capabilities when compared to a previous evaluation.

The working group concluded their efforts by indicating that capacity development, as the name implies, is an incremental process that may take years to show measurable improvements. If program success is measured through actual system improvements, then patience will be necessary because immediate improvements in system capacity may not be readily visible even in the most effective capacity development programs.

Section 8

Public Involvement and Outreach

8.0  Strategy Preparation

It was necessary to identify groups or individuals with an interest or involvement in the capacity development of public water systems to ensure the successful preparation of a comprehensive capacity development strategy. The process of forming a steering committee and the identification of stakeholders to participate in the preparation of the strategy is documented in Section 3 of this report. The diverse group of stakeholders provided a wealth of information and different perspectives on key issues. The participation of the stakeholders on the three working groups led to a thorough consideration of each of the five capacity development elements as they pertain to public water systems in New York State. As the tasks and objectives of each working group were completed, the stakeholders reviewed the working group activities and came to a consensus regarding any recommendations. Stakeholder and working group activities can be found in Appendix B.

8.1  Education and Training

Much of the effort in producing a successful capacity development strategy is in educating and training water system owners, managers and operators, Federal, State, and local government officials, and consumers about the principles and goals of the capacity development program. This education and training can include formal and informal meetings, speaking engagements, articles in newsletters or magazines or presentations to those groups or individuals with an interest or involvement in the capacity development of public water systems. Staff from the NYSDOH and its partners have provided this education and training in the past and will continue to do so as the capacity development strategy is implemented.

8.2  Outreach

The capacity development stakeholder group agreed that the draft capacity development strategy should be presented to the general public for comments and suggestions. The stakeholders recommended that a series of seven regional workshops be held at the following locations around the state: Southern Tier west, Southern Tier east, upper Finger Lakes, Tug Hill, eastern Adirondacks, lower Hudson River, and rural Capital District.

In May 2000, the NYSDOH announced a series of workshops to be held in June 2000. The purpose of the workshops was to provide information about the capacity development program and solicit input on the Capacity Development Program Draft Strategy Report. A mailing was sent to over 4,000 potentially interested parties to invite their participation in the workshops. In addition, stakeholders, involved in the development of the strategy, were asked to contact and invite individuals and groups who may be potentially impacted by the capacity development program to the workshops. Some stakeholders did mailings of the workshop announcement to their constituents and/or posted the announcement on their web site.

Over a three-week span in June 2000, a total of 14 workshops were held in the following locations: Binghamton, Newburgh, Salamanca, Farmington, Utica, Boonville, Lake Placid, and Claverack. At most locations, NYSDOH hosted two sessions (2 - 4 p.m. and 7 - 9 p.m.) to provide flexibility and encourage the greatest possible participation. The workshops were structured in an identical manner. A total of 156 people attended the workshops.

Workshop participants were provided with an information packet which included a copy of the workshop agenda, the program coordinator's business card, the Capacity Development Program Draft Strategy Report (without the appendices), the Capacity Enhancement Resource List and User Guide (Appendix E of the Capacity Development Program Draft Strategy Report), a copy of the workshop presentation, a list of acronyms used in the presentation, and a comment form for participants to provide written comments on the draft report. Many workshop participants took additional information packets for co-workers. Copies of the packets were mailed to people who had registered for the workshops but were unable to attend.

Following the workshops, the NYSDOH prepared a summary of comments and responses from the questions asked by workshop participants and written comments submitted to the NYSDOH. The summary of comments was distributed to the workshop participants and the stakeholder group.

The workshop agenda, attendance lists and summary of public comment and responses on the capacity development program and the Capacity Development Program Draft Strategy Report can be found in Appendix F.

Section 9

Conclusions and Recommendations

9.0  Conclusions

The SDWA Amendments of 1996 establish a strong new emphasis on protecting public health by preventing problems in drinking water systems. The Amendments create a capacity development program which requires states to assist public water systems acquire and maintain their technical, managerial, and financial abilities to properly operate, manage, and finance their systems. This Capacity Development Program Strategy Report describes the manner in which the NYSDOH and its partners will help public water systems improve their technical, managerial, and financial capabilities.

In order to ensure that a comprehensive capacity development strategy exists in New York State, the capacity development program stakeholder group recommended that the NYSDOH consider and include each of the five SDWA program elements in the strategy. Therefore, the Capacity Development Program Strategy Report: (1) provides the methods to identify and prioritize public water systems in need of technical, managerial, and financial assistance; (2) includes an extensive list of resources available to assist systems in need; (3) establishes a method for creating a baseline measure of capacity for each system and measures of improvements to a system's baseline capacity (which will serve as a basis to demonstrate the progress made toward improving the technical, managerial, and financial capabilities of public water systems in New York); (4) lists 165 factors that impair capacity development in New York and possible solutions for overcoming a prioritized number of barriers; and (5) documents stakeholder involvement throughout the strategy's preparation. The five SDWA program elements when taken as a whole, combine to form a comprehensive strategy that should address the challenges of those public water systems in New York State that need improvement in their technical, managerial, and financial capacity.

9.1  Recommendations

The capacity development stakeholder and working groups considered each of the five SDWA program elements as part of the preparation of the capacity development strategy. The capacity development stakeholder group recommended that a comprehensive strategy include the following:

• the method for determining which systems have technical, managerial, and financial capacity needs;
• the method for prioritizing those systems identified as needing assistance with their technical, managerial, and financial capacity;
• a prioritized number of barriers to capacity development with suggestions for overcoming each barrier;
• a prioritized number of barriers to capacity development that will likely take more than one year to overcome, along with suggestions for overcoming the barriers;
• a list of programs, services, tools, and other available resources that the State and its partners can use to assist public water systems acquire and maintain their technical, managerial, and financial capacity;
• methods for encouraging partnerships between systems through cooperative arrangements or restructuring;
• a method for establishing the baseline measure of capacity for each public water system;
• a method for measuring improvements in system capacity;
• identification of groups or individuals with an interest or involvement in the capacity development of public water systems; and
• the manner in which the draft capacity development strategy should be presented to the public.

Section 10

Implementation Plan

10.0  Introduction

The successful implementation of the statewide capacity development strategy will require increased efforts by the NYSDOH, its sister State agencies, and the State's partners. This implementation plan is based on the stakeholders' recommendations for a comprehensive strategy. In most cases, one or more agencies or organizations will play a role in addressing each recommendation. The recommendations made by the stakeholder group, along with specific roles and responsibilities for the successful implementation of each recommendation are outlined in this section.

10.1  Implementation

10.1.1  Establish Criteria to Evaluate Technical, Managerial, and Financial Capacity

The NYSDOH will adopt criteria for evaluating the technical, managerial, and financial capacity of public water systems. The stakeholders developed criteria that are found in Appendix C. These criteria establish a comprehensive method to evaluate public water system operations; determine technical, managerial, and financial capacity needs of public water systems; identify the type of assistance required by public water systems; and identify the resources available to public water systems through the capacity development program. The NYSDOH in conjunction with the County Health Departments, State agencies, and the State's partners should use these criteria to evaluate the capacity of public water systems. Any information that is gathered by the evaluating party should be provided to the NYSDOH to assist with the coordination of capacity development activities.

10.1.2  Establish a Baseline Measure of Capacity for Each Public Water System

The stakeholders recommended an individual system evaluation, using criteria that is available for each system and applies specifically to that system, as the best approach for measuring capacity. The NYSDOH in conjunction with the County Health Departments will establish a baseline measure of capacity for each public water system by following the recommendations of the stakeholders. The stakeholder group recommended that a system's baseline measure of capacity be established using compliance data, results from a recent sanitary survey or comprehensive performance evaluation, and results from a system capacity evaluation. The NYSDOH and local health departments will establish the baseline measure of capacity for each public water system because they have ready access to the information used in establishing the baseline. However, the Public Service Commission (PSC), Environmental Facilities Corporation (EFC), Office of the State Comptroller (OSC), Department of State (DOS), Department of Environmental Conservation (DEC), and the State's partners may collect sanitary survey or system capacity evaluation information and, if so, provide that information to the NYSDOH and City and County Health Departments.

The NYSDOH may issue a Request for Proposals (RFP) to fund a data collection effort to compile existing data, to gather data where none exists, or to update data that is more than five years old on small water systems.

10.1.3  Identify and Assess Systems in Need

The NYSDOH will adopt the criteria for identifying systems in need that were recommended by the stakeholders. The stakeholders developed eleven criteria for identifying which public water systems are in need of improving their technical, managerial, and financial capacity. They recommended that a public water system that meets any one of eleven criteria should receive a capacity evaluation. The eleven criteria that "trigger" the capacity evaluation of a water system include significant non-compliance; violation(s) of a maximum contaminant level, treatment technique, or major monitoring requirement (major monitoring violations are defined in USEPA policy); violation(s) of significant sanitary code requirements, such as lack of any reporting; potential MCL violation(s) due to pending regulatory changes or to trends in contaminant levels; a source water assessment that identifies the need for source water protection; applications for DWSRF assistance; recent sanitary surveys which identify significant deficiencies; an annual financial reporting statement that has identified fiscal concerns; applications to create a new water system within a municipality that already has one or more existing districts; repeated emergency outages or when a system demonstrates an inability to adequately respond to a specific emergency; and formal requests for a capacity evaluation from the system itself. The NYSDOH, City and County Health Departments, State agencies, and the State's partners can all identify those systems with inadequate capacity using these "triggers."

The NYSDOH in conjunction with the City and County Health Departments will have the primary responsibility for identifying which public water systems are in need of improving their technical, managerial, and financial capacity. The NYSDOH in conjunction with the City and County Health Departments can make that determination using criteria that includes significant non-compliance; violation(s) of a maximum contaminant level, treatment technique, or major monitoring requirements; violation(s) of significant sanitary code requirements, such as lack of any reporting; potential MCL violation(s) due to pending regulatory changes or to trends in contaminant levels; applications for DWSRF assistance; recent sanitary surveys which identify significant deficiencies; applications to create a new water system within a municipality that already has one or more existing districts; repeated emergency outages; or when a system demonstrates an inability to adequately respond to a specific emergency.

The PSC could identify investor owned systems in need using criteria that includes applications for DWSRF assistance; annual financial reporting statements; repeated emergency outages; or when a system demonstrates an inability to adequately respond to a specific emergency.

The EFC could help identify systems in need by reviewing applications for DWSRF assistance.

The OSC could consider procedures to identify systems in need by reviewing a community's annual financial reporting statements.

The DOS could identify systems in need by reviewing applications to create a new water system within a municipality that already has one or more existing districts.

The DEC could identify systems in need by reviewing applications for Public Water Supply Permits submitted pursuant to the Environmental Conservation Law.

The New York State Association of Regional Councils (NYSARC), New York Rural Water Association (NYRWA), Rural Community Assistance Program (RCAP), Tug Hill Commission and other similar regional organizations, and the United States Department of Agriculture Rural Development (USDA RD) could all identify systems in need when they assist systems applying to the DWSRF program; find deficiencies during the performance of a sanitary survey; note fiscal concerns after reviewing an annual financial report or statement; assist in the creation of a new water system within a municipality that already has one or more existing districts; or note repeated emergency outages at a system or a demonstrated inability by a system to adequately respond to a specific emergency.

Finally, any State agency or one of the State's partners can accept a formal request for a capacity evaluation from a public water system.

Once a system is identified as lacking specific technical, managerial, or financial capacity, the NYSDOH should be notified. The NYSDOH and local health departments will coordinate system assessments using the evaluation criteria established in Section 10.1.1. The NYSDOH will also coordinate any activities designed to assist systems achieve adequate capacity.

The NYSDOH may issue an RFP to fund a third party to develop and provide the NYSDOH with a listing of systems in need of technical, managerial, or financial capacity improvements.

10.1.4  Set Priorities for Systems in Need

The NYSDOH will set priorities for assisting systems with their technical, managerial, and financial capacity needs based on the recommendations of the stakeholders. The stakeholder group suggested a five-step method for prioritizing those systems identified as needing assistance with their technical, managerial, and financial capacity, as well as all other public water systems. The five priority levels are defined as follows.

• The first priority level is assigned to those systems having a critical need. Systems with a critical need include those identified as a significant non-complier, having maximum contaminant level violations, or experiencing repeated emergency outages.
• The second priority level is assigned to those systems having a serious need. Systems with a serious need include those having treatment technique or major monitoring requirement violations, having significant sanitary code requirement violations, facing significant potential violations, or receiving poor sanitary survey results.
• The third priority level is assigned to those systems demonstrating a need, although not critical or serious, for a capacity evaluation. Systems that fall into this category include those applying for funding under the DWSRF, needing source water protection, identifying potential fiscal concerns, or forming a new water district in a municipality where one or more districts already exist.
• The fourth priority level is assigned to those systems that request a capacity evaluation.
• The fifth priority level is assigned to all other public water systems.

The ranking scheme establishes a clear hierarchy of public water systems based on the criteria used to identify systems in need. The NYSDOH in conjunction with the City and County Health Departments will assign those systems needing assistance to a specific priority level.

10.1.5  Provide Direct Assistance

The NYSDOH, City and County Health Departments, State agencies, and the State's partners can all provide technical, managerial, and financial assistance directly to public water systems in need. The goal of assisting troubled systems is to enable such systems to achieve and maintain compliance with applicable State and Federal drinking water regulations. It will be through this assistance component of the implementation plan that the State will assist systems to acquire the capacity that they lack and improve any capacity that they currently possess.

The NYSDOH in conjunction with the City and County Health Departments provide direct technical assistance to systems in need through the following programs.

• Sanitary Survey Program - This program provides a complete and detailed assessment of a public water system's physical plant, maintenance and operations, and administrative abilities. The goal of the program is to review and evaluate the capabilities of existing facilities to determine if they can assure compliance with current and future drinking water standards and regulations.
• Small Water System/Self-Help Program - This program provides guidance to communities in considering project alternatives, calculating alternative project costs, preparing budgets for selected projects and reviewing existing operation and maintenance practices. Also, the program assists communities in developing criteria for consultant selection, determining project priorities, selecting the most sensible project, using inexpensive labor and materials, improving purchasing practices, using volunteers, avoiding duplication of services and conducting technical assessments to determine the overall needs of the community.
• Comprehensive Performance Evaluation Program – This program provides a detailed structural, operational, and administrative assessment of water filtration plants. The primary goal of the program is to review and evaluate the capabilities of existing treatment facilities to determine if they are meeting current standards and performance goals. Based upon the facility evaluation, an optimization plan for each facility is developed to assure compliance with current and future standards and regulations.
• Source Water Assessment Program – This program will delineate the boundaries of the assessment area(s) for the approximately 14,000 raw water sources that serve the State's public water systems, identify significant potential sources of contamination within the assessment area, and assess the susceptibility of the public water system(s) to contamination within the assessment area.
• Wellhead Protection Program – This program shares similar program elements as the Source Water Assessment Program. The program provides technical assistance to water suppliers for identifying areas of source water vulnerability to contamination and for focusing source water protection efforts at the local level.
• Enforcement Activities – Prior to taking enforcement action on a public water system that persistently fails to comply with State and Federal drinking water regulations, the NYSDOH engages in activities designed to assist the troubled system come into compliance. These activities include engineering support, training, and establishing compliance schedules.

The EFC provides direct assistance to community drinking water projects regarding financial management and funding coordination. EFC's Self-Help/Community Assistance Section assists small communities to develop project-funding strategies, coordinates hardship determinations and tracks sources, status, terms and amounts of funding assistance. EFC staff help communities coordinate with a multitude of funding sources, including the DWSRF, USDA RD, Environmental Bond Act, and others.

The PSC provides direct technical, managerial, and financial assistance to those public water systems that they regulate. The types of assistance provided by the PSC are similar to those previously mentioned in this section.

The DOS could provide opportunities for training of municipal officials in the oversight and management of drinking water systems.

The State's partners also provide direct technical, managerial, and financial assistance to public water systems. The types of assistance provided by the State's partners are found in Section 10.1.6.

10.1.6  Utilize Other Resources

There are many programs, services, tools, and other available resources that the State and its partners can use to assist public water systems acquire, maintain, and build upon their technical, managerial, and financial capabilities. Examples of resources and types of assistance that the State's partners provide are listed below. The NYSDOH in conjunction with the City and County Health Departments will coordinate the needs of each system with the appropriate resources to ensure compliance with applicable State and Federal drinking water regulations.

• Capacity Enhancement Resource List - An extensive list of drinking water resources that are available to assist public water systems improve their capacity can be found in Appendix E of this report. Any State agency or State's partners can use this list or provide it to a water system upon request. It should be noted that improving a community's public water system capabilities through the capacity development program is one important piece of a community's long-term planning efforts. Some of the resources, services, and tools identified in the Capacity Enhancement Resource List may also be used by local officials to assist them in understanding the broader picture of community-wide planning and development.
• Training - The NYSDOH, DOS, EFC, PSC, DEC, Association of Towns, NYCOM, NYSARC, NYRWA, RCAP, Tug Hill Commission, and USDA RD can provide education and training on a variety of drinking water topics, including capacity development.
• Direct Assistance – The NYSARC, NYRWA, RCAP, Tug Hill Commission, and USDA RD can provide direct technical, managerial, and financial assistance similar to the services and programs mentioned in Section 10.1.5. A description of the specific services that each partner can provide is found in the Capacity Enhancement Resource List. The NYSDOH is in the process of issuing an RFP to fund a "circuit rider" assistance program to help operators of noncommunity and small community water systems.
• Regional Assistance – DOS should assist community officials in their community economic development and municipal management efforts and consider creation of regional community economic development positions to advance this goal.
• Funding – Financial assistance in the form of grants and loans is available to eligible systems from a variety of sources. A list and description of funding sources, types of available financial assistance, application procedures, and eligibility requirements are provided in the Capacity Enhancement Resource List.

10.1.7  Measure Improvements in System Capacity

The same criteria used to establish the baseline measure of capacity will be used to measure improvements in system capacity. The NYSDOH will measure improvements to the technical, managerial, and financial capacity of each public water system by following the recommendations of the stakeholders. The stakeholder group recommended that the success of capacity development efforts for individual systems be measured by system efforts in correcting violations, correcting identified deficiencies, and demonstrating improvements in their technical, managerial, and financial capabilities. The NYSDOH in conjunction with the County Health Departments will measure improvements in system capacity because they have ready access to the information provided by the assessment criteria. If the PSC, EFC, OSC, DOS, DEC, and State's partners collect updated information on a system, they should provide that information to the NYSDOH.

10.1.8  Identify Barriers to Capacity Development

The stakeholder group identified 165 factors at the Federal, State, and local levels that impair capacity development. The stakeholders recognized that it was not feasible to address each barrier. Therefore, the stakeholders prioritized a number of barriers and made recommendations for overcoming the selected barriers. The stakeholders categorized the selected barriers as having short-term (within a year) solutions or long-term (likely to take more than a year) solutions.

10.1.8.1  The Short-term List of Prioritized Barriers

Lack of formal coordination among funding organizations

The lack of formal coordination among funding organizations was identified as an institutional barrier to capacity development. The stakeholder group suggested that a broad, permanent committee be formed to address this barrier. The NYSDOH and DOS should create a group consisting of funding organizations, government agencies and affected parties, whose task will be to provide a forum for the various drinking water funding agencies and their review processes and to discuss drinking water topics, including funding issues.

The stakeholder group suggested that a statewide organization sponsor semi-annual forums or meetings to address this barrier. The New York State Rural Development Council, Association of Towns, New York Conference of Mayors (NYCOM), or NYSARC could host forums/meetings for funding organizations to coordinate their activities. In addition to hosting the forum/meeting, these organizations along with other State agencies and State's partners that are involved in funding drinking water projects and other types of drinking water assistance, will be invited to participate in the coordinating committee envisioned above.

The stakeholder group also suggested that the funding organizations and government agencies develop a common application process as another means for overcoming this barrier. The NYSDOH, EFC, DOS, Empire State Development, Governor's Office for Small Cities, New York State Energy Research and Development Authority (NYSERDA), and USDA RD should participate in this process through the coordinating committee envisioned above.

Lack of knowledge at the community level

The lack of knowledge at the community level regarding capacity issues in general, capacity development strategies, and in understanding how the capacity development of a water system ties into a community's overall well being, was identified as another institutional barrier to capacity development. The stakeholder group suggested that outreach, education, and training for local officials, system owners and operators, and local health department staff be implemented to address this barrier. The NYSDOH, EFC, DOS, PSC, OSC, DEC, Association of Towns, NYCOM, NYSARC, NYRWA, RCAP, Tug Hill Commission, and USDA RD can all provide outreach, education, and training that could raise the community awareness level on a variety of drinking water topics, including capacity development. The outreach, education, and training can take the form of focus sessions involving a small number of participants (5 to 20), focusing on a specific issue; educational meetings or training sessions involving a greater number of participants (25 to 75), discussing several related issues; regional forums or workshops involving a large number of participants (100 or more), receiving hands on training on a variety of topics; presentations to a statewide gathering of individuals.; or discussions with individual system officials, owners, and operators on a case-by-case basis.

The stakeholder group also suggested that incentives be offered to local officials to attend training sessions on drinking water topics. The DOS should develop and conduct a focused training program for local officials and develop incentives to encourage local official participation. Legislation that would encourage such training for specific municipal and private owners should also be considered.

Lack of upfront money for engineering and planning purposes

The lack of upfront money for project engineering and planning purposes was identified as a financial barrier to capacity development. The stakeholder group suggested that grants or short-term loans be made available through the DWSRF to address this barrier. The NYSDOH and EFC should develop a short-term financing program to overcome this barrier. The NYSDOH and EFC should offer short-term loans to qualified systems to assist with project engineering and start-up costs and a short-term grant program to assist qualified economically distressed communities complete pre-planning efforts, including project development, source exploration and facility planning.

The stakeholder group also suggested that there be support for efforts to provide short-term financing for projects that are likely to be funded. The NYSDOH, EFC, DOS, Empire State Development, NYSERDA, and USDA RD should review options and coordinate the development and delivery of such a program through the coordinating committee envisioned above.

10.1.8.2  The Long-term List of Prioritized Barriers

Burdensome rules and regulations

The burden of rules and regulations, especially for small government and small private systems, was identified as a regulatory barrier to capacity development. The stakeholder group suggested that the regulations be streamlined or simplified in order to overcome this barrier. Each State agency should review their regulations and recommend and implement changes for streamlining their regulations where possible.

The stakeholder group also suggested that training and assistance be provided to small governments and small private systems to help them understand applicable drinking water rules and regulations. The NYSDOH, along with the DOS, DEC, and PSC should develop and implement a training program to assist small governments and private systems understand current and future drinking water rules and regulations. The Association of Towns, NYCOM, NYSARC, NYRWA, RCAP, Tug Hill Commission, and USDA RD should coordinate the development and implementation of this training program with the State agencies. Staff within the NYSDOH should be specifically assigned the responsibility for developing and coordinating this training effort.

Lack of rate review and appropriate rate structure

The lack of rate review and the inability to adjust water rates were identified as institutional and legal barriers to capacity development. A public water system that is unable to raise the necessary revenues to support its operating expenses, places a burden on its ability to produce safe drinking water. The stakeholder group suggested that appropriate rate review and rate setting are needed to overcome this barrier. Legislation, regulations, and/or incentives that will encourage public water systems to review their water rates periodically and adjust them as necessary need to be considered. Any of the State's partners, including NYSARC, NYRWA, RCAP, Tug Hill Commission, and USDA RD, can assist systems review their rate structure as part of the service provided with any drinking water project.

The stakeholder group suggested that the annual financial statements from private water systems and municipally-owned CWSs be reviewed to identify the lack of financial capacity. The State should review the financial information from private water systems and municipally-owned CWSs respectively, develop the criteria to identify financial need, and make recommendations, such as attending fiscal management training, to those lacking financial capacity.

The stakeholder group suggested that the rate structure for systems seeking funding under the DWSRF program be reviewed. The EFC could conduct reviews of proposed water rates for DWSRF projects.

The stakeholder group also suggested that guidelines be prepared for water systems to use for reviewing their rate and for setting the appropriate rate. The NYSDOH, in consultation with EFC, PSC, and OSC, should prepare such guidelines and develop a training program to assist public water system owners and operators.

Incentives to promote restructuring of water systems

Restructuring is defined as changing the operational, managerial, or institutional structure of a water system in order to meet the increasing costs and responsibilities of the SDWA while still providing water at an affordable price. Cooperative arrangements, or restructuring, between systems can include partnerships, mergers, consolidations, and sharing of operators, laboratory services, billing, and administrative responsibilities. These cooperative arrangements can enhance the technical, managerial, and financial capability of public water systems. The stakeholder group suggested that New York offer incentives to public water systems to promote the restructuring of troubled water systems. The NYSDOH will review the law that encourages the merger of school districts in the State to determine whether the Education Law provides useful information for modeling or encouraging water system mergers. Legislation to fund a study law to explore the possibility for incentives to promote water system mergers should be considered.

The stakeholder group suggested that financial assistance be provided to systems to pay for planning needs, engineering and/or other preliminary studies, and legal costs associated with the formation of a partnership. The NYSDOH, EFC, and USDA RD, should review the possibilities for a short-term financial program to assist systems with restructuring costs. Such costs should also be considered for funding under the short-term funding program to be developed under the DWSRF.

The stakeholder group also suggested that systems join together to buy or share goods and services. The NYSDOH, EFC, PSC, Association of Towns, NYCOM, NYSARC, NYRWA, RCAP, Tug Hill Commission, and USDA RD can assist public water systems to form cooperatives to achieve greater economies of scale and reduce the unit prices of their purchases.

10.1.9  Public Participation

The NYSDOH recognized that a coordinated effort among state agencies, local governments, stakeholder groups or organizations, water systems and the public was necessary to ensure the successful preparation of a comprehensive capacity development strategy. Therefore, the NYSDOH formed a steering committee from a small group of individuals with some background in capacity development issues and asked the committee to identify those groups and/or individuals that should participate as stakeholders in the strategy preparation. The steering committee identified an extensive list of potential stakeholders and interested parties who should be invited to participate in the preparation of a capacity development strategy. Based on the steering committee recommendations, the NYSDOH contacted and invited a diverse group of individuals to the initial capacity development stakeholder meeting on March 2, 1999. This diverse group of stakeholders provided valuable information and different perspectives on key issues throughout the strategy preparation. Stakeholder involvement and participation will continue as the strategy process moves to implementation.

The capacity development stakeholder group agreed that the draft capacity development strategy should be presented to the general public for comments and suggestions. In May 2000, the NYSDOH announced a series of workshops to be held in June 2000. The purpose of the workshops was to provide information about the capacity development program and solicit input on the Capacity Development Program Draft Strategy Report. A mailing was sent to over 4,000 potentially interested parties to invite their participation in the workshops. In addition, stakeholders, involved in the development of the strategy, were asked to contact and invite individuals and groups who may be potentially impacted by the capacity development program to the workshops. Some stakeholders did mailings of the workshop announcement to their constituents and/or posted the announcement on their web site. Section 8.2 of this report provides additional details of the public outreach effort.

10.2  Reporting Requirements

Section 1420(c)(3) of the SDWA requires that the NYSDOH submit a report to the Governor, as well as make the report available to the public, on the efficacy of the capacity development strategy and the progress made toward improving the technical, managerial, and financial capacity of public water systems in New York State. The report is due not later than two years after the date on which the capacity development strategy is adopted and every three years thereafter.

The NYSDOH will use the capacity baseline and measure of improvements in capacity (see Section 7), as the basis for demonstrating the efficacy of the capacity development strategy and for showing progress toward improving the technical, managerial, and financial capacity of public water systems in New York State.

As part of the capacity development strategy, section 1420(b)(2) of the SDWA requires that the NYSDOH report to the USEPA Administrator on the success of enforcement mechanisms and initial capacity development efforts in assisting public water systems in significant noncompliance status acquire, maintain, and build upon their technical, managerial, and financial capacity. The report is due in 2001. The NYSDOH must also prepare and submit to the USEPA Administrator a list of CWSs and NTNCWSs that has a history of significant noncompliance and, to the extent possible, the reasons for their noncompliance. The NYSDOH has been preparing and submitting such lists on an annual basis since 1997.