REPORT OF FINDINGS - Iowa Department of Natural Resources

REPORT OF FINDINGS

ON IMPROVING THE TECHNICAL , FINANCIAL

AND MANAGERIAL CAPACITY OF IOWA’SPUBLIC WATER SYSTEMS

VIABILITY ASSESSMENT ADVISORY GROUP TOTHE WATER SUPPLY SECTION ,

ENVIRONMENTAL PROTECTION DIVISION

SEPTEMBER 1999

T A B L E O F C O N T E N T S

Executive Summary ..................................................................................................................................................... i

Glossary of Terms and Acronyms Used in This Report....................................................................................... v

Introduction to Capacity Development: Safe Drinking Water Act (SDWA).................................................... 1

About Iowa’s Drinking Water Systems.................................................................................................................... 2

Table I 1: Iowa Water System Classifications by Population ...................................................................................... 2

Iowa’s Viability Assessment Advisory Group ........................................................................................................ 3

Section A: Identifying Systems In Need of Technical, Financial, and Managerial Assistance........................ 5

Table A 1: IDNR Identification and Prioritization Ranking Schematic.................................................................... 7

Table A.2: Iowa’s 1420(c)(2)(A) Criteria Definitions .............................................................................................. 8

Section B: Factors that Encourage or Impair Capacity Development ............................................................... 9

Section C: Recommendations on How the State Can Use Its Authority and Resources to Help WaterSystems Improve Capacity ....................................................................................................................... 19

Section D: Measuring the Success of Iowa’s Capacity Development Strategy................................................ 23

Section E: Public Involvement in Preparing the Iowa Capacity Development Report of Findings................. 24

Appendix A: Viability Assessment Advisory Group Meeting Highlights........................................................ 25

Appendix B: Intradepartmental Impairments to TFM Capacity ....................................................................... 28

Iowa Report of Findingsi

EXECUTIVE SUMMARY

During 1998 and 1999, the Viability Assessment Advisory Group to the Iowa Department of NaturalResources (IDNR) considered the challenge of improving the technical, financial and management(TFM) capabilities of public water systems. This Report of Findings presents the work of the AdvisoryGroup for consideration by the general public and IDNR management. Guidance for the AdvisoryGroup in preparing this report came generally from the Safe Drinking Water Act (SDWA) Amendmentsof 1996. At the heart of this report are the Advisory Group’s recommendations regarding the programsthat the IDNR Water Supply Section could strengthen or establish that would assist water systems inbuilding capabilities to achieve compliance with the requirements of the SDWA.

The body of the report is presented in five sections, labeled alphabetically. This is an intentionalcorrespondence with the language in the SDWA, which lays out the five elements that a state mustconsider when preparing a capacity development strategy.

SECTION A: IDENTIFYING WATER SYSTEMS IN NEED OF TECHNICAL, FINANCIALAND MANAGERIAL ASSISTANCE

A multi-level ranking scheme was proposed, in which compliance with the drinking water regulations wasa primary factor. Water systems failing to comply with regulations are more likely to lack financial,technical, or management capacity. Non-complying systems will be assessed to determine the seriousnessof the capacity-related problems they are experiencing. These problems will be ranked as critical, serious,minor, potential, and those that request assistance. Water systems in the five classes will be rankedadditionally by their willingness to work with IDNR in achieving solutions.

SECTION B: FACTORS THAT ENHANCE OR IMPAIR WATER SYSTEM CAPACITYDEVELOPMENT

Factors operating at the Federal, State, and local level that enhance or impair water system capacity arepresented in this section of the report. These factors were drawn from the experience of AdvisoryGroup members, and from knowledge gained by the IDNR in administering the drinking water program.

The Advisory Group identified 82 factors at the Federal, State and local levels that are eitherenhancements or impairments to public water system TFM capacity. Enhancements and impairmentswere further divided into six categories: Institutional, Regulatory, Financial, Tax, Legal and Other. Theseare displayed in Table E1. The largest number of impairments, (24), occurred at the State level. Of theState impairments, the seven (7) financial impairments were the most significant group.

Iowa Report of Findingsii

Table E1: Federal, State and Local Factors that Affect Water System Technical, Financial, and ManagerialCapacity

Factors Enhancements ImpairmentsInstitutional 6 18Regulatory 8 11Financial 7 17Tax 3 5Legal 1 3Other 1 2Total 26 56

SECTION C: RECOMMENDATIONS ON HOW THE STATE CAN USE ITS AUTHORITYAND RESOURCES TO HELP WATER SYSTEMS IMPROVE CAPACITY

In developing the conclusions drawn from analysis of the enhancements and impairments noted inSection B, the Advisory Group discovered eight recommendations for how the resources of the State andother stakeholders could be used to help water systems improve TFM capabilities. The eight ideas arenoted briefly below and in more detail in this Report of Findings:

1. The Advisory Group recommends the systematic collection of supplemental informationthat describes the TFM conditions of public water systems and that the information shouldbe shared with operators and management boards.

2. The Group recommends programs and methods for improving the knowledge of drinkingwater protection rules among operation and management personnel.

3. Communication among important stakeholders needs improvement. The Advisory Grouprecommends several communication mechanisms for information sharing between US EPA,IDNR and the regulated water systems.

4. Customer knowledge of water system performance and financing is important to the long-term success of public water facilities. The Advisory Group recommends actions that canimprove customer knowledge of and involvement in the performance of their water systems.

5. The Advisory Group has offered six ideas designed to improve the partnerships andnetworking between governmental agencies and among water systems.

6. Inter-departmental and intra-departmental communications are essential to the efficient useof public resources to improve the TFM capabilities of public water systems. The AdvisoryGroup offers six themes for consideration by the IDNR.

7. The Advisory Group recommends that the IDNR sponsor a meeting or a series of meetingsto foster the discussion of innovative techniques for financing capital improvements of smallpublic water systems.

8. Finally, the overall success of the State’s Capacity Development Strategy will depend in parton the Water Supply Section’s acquisition of appropriate financial and personnel resourcesto design, promote and deliver TFM assistance programs. The Advisory Group offerssuggestions on how it could assist in this process.

Iowa Report of Findingsiii

SECTION D: MEASURING THE SUCCESS OF IOWA'S CAPACITY DEVELOPMENTSTRATEGY

In fashioning its capacity development strategy, the Advisory Group noted in Section D how the IDNRmight assess the performance of capacity building efforts. Four general measures of success weredeveloped. First, the IDNR could note changes in compliance performance, both statewide and on asystem-specific basis. Second, the IDNR could track the number of site visits and enhanced sanitarysurveys conducted by program personnel. The number of water systems that complete self-assessmentsof capacity could also be recorded. Third, by conducting “customer surveys” to obtain feedback fromwater systems that receive assistance under the strategy, the IDNR could learn more about theeffectiveness of its programs. Finally, the IDNR could keep track of the number of water systems thatprepare capital facility management plans, water system plans, emergency plans, and other activities thatcontribute directly to enhanced capacity.

SECTION E: PUBLIC INVOLVEMENT IN PREPARING THE IOWA CAPACITYDEVELOPMENT REPORT OF FINDINGS

The final section of the Advisory Group’s Report of Findings provides a description on how the ViabilityAssessment Advisory Group was formed and describes how the broadest possible involvement bycitizens and stakeholders was obtained.

Iowa Report of Findingsiv

Iowa Report of Findingsv

GLOSSARY OF TERMS AND ACRONYMS USED IN THISREPORT

AWWA: American Water Works Association – An organization of water professionals dedicatedto providing leadership to the drinking water profession in the areas of drinking waterquality, water resource policy, and water related planning.

Capacity: Refers to the capabilities required of a public water system in order to achieve andmaintain compliance with the drinking water rules. It has three elements:

Technical: Technical capacity or capability means that the water system meets standards ofengineering and structural integrity necessary to serve customer needs. Technicallycapable water systems are constructed, operated, and maintained according to acceptedstandards.

Financial: Financial capacity or capability means that the water system can raise andproperly manage the money it needs to operate efficiently over the long term.

Managerial: Managerial capacity or capability means that the water system’s managementstructure is capable of providing proper stewardship of the system. Governing boardsor authorities are actively involved in oversight of system operations.

CCR: Consumer Confidence Report – An annual water quality report required by the 1996SDWA amendments, which summarizes information on source water, levels of any detectedcontaminants, compliance with drinking water rules, and educational material.

CEU: Continuing Education Unit – Formal credit for participation in education and trainingprograms, often necessary for maintaining certification or licensing status.

DWSRF: Drinking Water State Revolving Loan Fund - Congress authorized this fund in 1996.The Iowa Department of Natural Resources administers the DWSRF.

EFC: Environmental Finance Center at Boise State University - An organization that operatesunder a US EPA charter to provide assistance to States and communities on mattersconcerned with financial management and access to financial assistance.

FTE: Full Time Equivalent – A unit of work-time for a person equal to 2080 hours per year.

HUD: Housing and Urban Development – A federal agency that provides assistance forhousing and community development.

IAMU: Iowa Association of Municipal Utilities – A non-profit trade association that representsthe interests of 551 cities, which operate electric, gas, water, or telecommunications utilities.All IAMU member cities operate water utilities.

IAWA: Iowa Association of Water Agencies – A professional organization representing watersystems serving greater than 10,000 people.

ICN: Iowa Communications Network – A fiber optic resource for distance education anddistance learning.

Iowa Report of Findingsvi

IDED: Iowa Department of Economic Development – A State agency that helps water systemsand companies with economic assistance.

IDNR: Iowa Department of Natural Resources – The agency responsible for administering thedrinking water standards in Iowa through a primacy agreement with US EPA.

IRWA: Iowa Rural Water Association – A non-profit membership organization that providessupport and technical assistance to water and wastewater utilities throughout the State.

SDWA: Safe Drinking Water Act – Passed by the US Congress in 1974 and amended in 1986and 1996.

TFM: Technical, Financial, and Managerial capacity – An abbreviation used to save space in thereport and avoid frequent repetition of these terms, defined previously as “capacity.”

US EPA: The US Environmental Protection Agency - A federal agency that oversees Stateprimacy programs and provides financial support. One of US EPA’s functions is todetermine when a State’s capacity development program is in compliance with the SafeDrinking Water Act.

USDA - RD: US Department of Agriculture – Rural Development – A federal agency that helpsrural communities by providing economic and technological assistance.

Iowa Report of FindingsIntroduction

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INTRODUCTION TO CAPACITY DEVELOPMENT: SAFE DRINKINGWATER ACT (SDWA)

Water system capacity is the ability to plan for,achieve, and maintain compliance with applicabledrinking water standards. Based upon theresearch and technical assistance efforts of waterworks professionals, capacity is known to havethree components: technical, financial, andmanagement. Adequate capability in all threeareas is necessary for a successful public watersystem.

Capacity development is the process of watersystems acquiring and maintaining adequatetechnical, financial, and managerial capabilities toassist them in providing safe drinking water. The1996 Amendments to the Safe Drinking WaterAct (SDWA) added capacity developmentprovisions which provide a framework for Statesand water systems to work together to help ensurethat systems acquire and maintain the technical,financial, and managerial capacity needed to meetnational public health protection objectives.

The 1996 SDWA Amendments includerequirements for States to obtain authority toassure that new systems are viable, to develop astrategy to address the capacity of existingsystems, and to ensure that potential DrinkingWater State Revolving Fund (DWSRF) recipientshave sufficient technical, financial and managerial(TFM) capacity prior to receiving loan funds (orthat the loan funds will allow them to attain thecapacity they require). The SDWA outlinesseveral items to include in States’ capacitydevelopment strategies for existing systems;however it is not mandated that States mustinclude each of these items, but rather that theymust consider each of the items in developing thestrategy. Clearly, including each of the requiredelements produces a comprehensive capacitydevelopment program for the State and addressesall of the necessary issues. However, each Statemust examine each of the issues and determinethose elements that best fit the needs of the State.

SDWA §1420(c)(2) addresses the requirements ofstrategies developed by each State to improve the

technical, financial, and managerial capacity ofpublic water systems under their jurisdiction. Thedevelopment of the State’s strategy is directlyrelated to the level of financial resources availableto help pay for water system improvements. AState that does not develop and implement acapacity development strategy will receive only 90percent of the DWSRF allotment it wouldotherwise receive in FY 2001, 85 percent of itsscheduled allotment in FY 2002, and only 80percent of its scheduled allotment in eachsubsequent federal fiscal year.

In developing and implementing a capacitydevelopment strategy, SDWA §1420(c)(2) (A-E)requires States to “consider, solicit publiccomment on, and include as appropriate” fiveelements:

• Methods or criteria to prioritize systems[§1420(c)(2)(A)]

• Factors that encourage or impair capacitydevelopment [§1420(c)(2)(B)]

• How the State will use the authority andresources of the SDWA [§1420(c)(2)(C)]

• How the State will establish the baseline andmeasure improvements [§1420(c)(2)(D)]

• Procedures to identify interested persons[§1420(c)(2)(E)]

The Iowa Viability Assessment Advisory Group(Advisory Group) chose to prepare acomprehensive Report of Findings that includesconsideration of all SDWA-required capacitydevelopment strategy elements.


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ABOUT IOWA’S DRINKING WATER SYSTEMS

The Iowa Department of Natural Resources(IDNR) regulates all public water systems in Iowa.Public water systems serve at least 15 serviceconnections or serve an average of at least 25people daily at least 60 days per year. The IDNRwas formed in 1986 with the merging of theDepartment of Water, Air and WasteManagement, the Iowa ConservationCommission, the Iowa Geological Survey, and theEnergy Policy Council. The EnvironmentalProtection Division of IDNR encompasses theWater, Air, and Land Quality Bureaus, which arefurther divided into sections. The Water SupplySection regulates public drinking water suppliesthrough a primacy agreement with US EPA.

The state is divided into six geographical regions.Each region contains a field office staffed withenvironmental specialists to perform complianceinspections, investigate complaints, and providetechnical assistance in the field. A central office islocated in Des Moines, Iowa, and consists ofenvironmental specialists, engineers, and thesection supervisor. The central office issuesconstruction, operation, and water use permits,and monitors compliance for all public watersystems. Private water systems serveapproximately 10% of the State’s population andare governed by the county health departments.

There are approximately 1,930 public drinkingwater systems in the State of Iowa, the majority ofwhich are classified as small systems. The USEPA considers systems serving populations of lessthan 10,000 to be medium or small systems.Using this definition, 1,260 of Iowa’s 1,294community and nontransient non-communitywater systems are considered medium or smallsystems, leaving only 34 Iowa water systemsclassified as large systems. An additional 636transient non-community systems are categorizedas small systems.

Beyond the US EPA classification, Iowadifferentiates its small systems into the categoriesof very small, small, and medium systems.Statistics for these systems are summarized inTable I 1: Iowa Water System Classifications byPopulation.

Table I 1: Iowa Water System Classifications byPopulation (Community and Nontransient Non-Community Supplies)*

SystemClassification

Number ofSystems

PopulationServed

Very Small 761 <500Small 420 501-3,300Medium 79 3,301-10,000Large 34 >10,000Total 1,294

*There are an additional 636 transient non-community water systems that are classified assmall systems, bringing the total number of Iowapublic water supplies to 1,930.


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IOWA’S VIABILITY ASSESSMENT ADVISORY GROUP

The Iowa Viability Assessment Advisory Group(Advisory Group), an important assembly ofdrinking water stakeholders, began work towarddeveloping this Report of Findings in December of1998. The Advisory Group was comprised ofmembers from the Iowa SDWA Advisory Group,who frequently assist the IDNR in developingrules and strategies for public drinking watersystems; as well as parties whose opinions werenot normally sought by the IDNR, but whodesired representation in the development of theState’s Viability Strategy. An extensive mailingwas conducted to solicit interest in serving withthe Advisory Group. The purpose was to form astakeholder Advisory Group that would representthe broadest possible spectrum of interestedparties while at the same time respecting the needto keep the Advisory Group small enough tofunction efficiently. Provisions were made toexpand the public involvement process by thefollowing means:

• A mailing list of persons or organizations wasdeveloped so that periodic updates could beprovided.

• A decision was made to present the initialrecommendations of the Advisory Group tothe public through a series of publicworkshops.

• Organizations that publish newsletters wereasked to convey information about theAdvisory Group’s activities.

These measures, taken together, helped to ensurethat the public would have multiple opportunitiesto learn about and provide input to the viabilityassessment activities. A record of the AdvisoryGroup’s work is found in Appendix A.

Advisory Group Members

Becky Alhelm*, Midwest Assistance ProgramMerlin Bartz, State SenatorSue Behrens, Iowa Waste Reduction Center,

University of Northern Iowa

Leonard Boswell, 3rd District CongressmanJames Boyt*, Iowa Water Quality AssociationDon Brazleton*, Iowa Association of County

Conservation BoardsKen Choquette, Department of Public HealthJane Clark*, Sierra ClubSue Cosner*, Des Moines Water WorksMark Dickey*, Iowa Rural Water AssociationMark Duben*, Howard R. Green, Iowa

Consulting Engineer’s CouncilRobert Dunlevy*, US EPA Region VIIK. B. Earnhardt*, Iowa American Water Co.Laurie Elliott, Associated Builders &

Contractors, Inc.William Fink, State SenatorAndrea Fogue*, Iowa League of CitiesDavid Fox*, Fox Engineering Associates,

AWWA Past PresidentDawn Goodrich*, Des Moines Water Works,

Large System RepresentativeCharles Grassley, U.S. SenatorBob Green*, Dubuque Water Works, AWWA

Water Utility CouncilJames Hahn, State RepresentativeSusan Heathcoate, Iowa Environmental CouncilCathy Heldt*, Iowa Water Well AssociationScott Hemingway*, Iowa Rural Water

AssociationBob Jester, Jester Insurance ServicesSteve Jones*, Iowa State University, Operator

EducationLinda Kinman*, Iowa Association of Water

AgenciesBill Knopf, Associated General Contractors of

IowaMary Kramer, Wellmark/Blue Cross-Blue ShieldTom Latham, 5th District CongressmanJim Leach, 1st District CongressmanWayne Lueders, Association of School BoardsJon Martens*, Atlantic Municipal UtilitiesChad Mason*, H.R. GreenCharles Moench, Lobbyist, AARPMike Mohon, Sunset HomesBill Monroe, Iowa Newspaper AssociationBob Morby, US EPA Region VIIJohn Moreland, Senator Tom Harkin’s Office


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Bob Mulqueen, Iowa State Association ofCounties

Karen Nachtman*, Iowa Association ofMunicipal Utilities

Tom Neumann*, City of Ames, IowaGroundwater Association

Scott Norvell, Master Builders of IowaJim Nussle, 2nd District CongressmanDorman Otte, USDA Rural Economic &

Community DevelopmentLane Palmer, Iowa Department of Economic

DevelopmentBob Renaud*, Senator Charles Grassley’s OfficeTim Robbins, Kirkwood Community CollegeDarlene Robertson, Home Builders Association

of IowaCarter Robinson*, City of Polk CityRick Robinson, Iowa Farm Bureau FederationLuke Roth, Greg Ganske, 4th District

Congressman’s OfficeDave Rotschafer*, Mount Vernon Public Works,

Water Environment Federation Iowa WaterPollution Control Association

Brian Schultz, CFM Environmental, Inc.David Scott, Executive Director, AWWA Iowa

SectionElliott Smith, Iowa Association of Business &

IndustryKevin Stocker*, Iowa Association of Municipal

UtilitiesTom Thorpe*, Thorpe Water DevelopmentBrooke Timmons*, Des Moines Water Works,

Large System RepresentativeJessica Vanden Berg*, District Representative

for Congressman Leonard BoswellRandy Van Dyke, Clay Regional Water SystemCharles Wasker, Home Builders Association of

IowaDale Watson*, Fox Engineering AssociatesPeter Weyer, Center for Health Effects of

Environmental ContaminationWilliam Witt, State Representative

* Attended at least one meeting and/or providedinput.

Iowa Department of Natural Resources Participating Staff

Dennis Alt, IDNR, SupervisorMike Anderson, IDNR, EngineerMike Klinefeldt, IDNR, SpecialistJanet Ott, IDNR, Parks and RecreationBrent Parker, IDNR, Private Well Program,

EngineerJennifer Simons, IDNR, EngineerJim Stricker, IDNR, Field Office

Iowa Viability Strategy Facilitators

Bill Jarocki, Environmental Finance CenterSymantha Zeimet, Environmental Finance

Center

Iowa Report of FindingsSection A

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SECTION A: METHODS OR CRITERIA TO PRIORITIZE SYSTEMS INNEED OF TFM ASSISTANCE

Background

The key issue in designing the State's capacitydevelopment strategy is identifying andprioritizing those public water systems that aremost in need of improving TFM capacity todeliver safe drinking water to the public. At thecore of this discussion is this question; "whatinformation about water systems does the IDNRor other stakeholders have that helps identifyproblems that need to be addressed?" Care wastaken to identify and consider the variety ofsources for information about the TFMconditions of water systems. Ultimately, theAdvisory Group determined the following:

• The best and most current information(consistent and verifiable) for providing anindication of the capabilities of public watersystems is the technical complianceinformation maintained by the IDNR. Somefinancial and management capacityinformation is maintained by the IDNR. TheIowa Public Utilities Commission maintainsfinancial and management information fortwo regulated systems.

• The drinking water program already has welldefined mechanisms in place for dealing withacute risks to public health. Publicnotification, boil water advisories whereappropriate, and immediate corrective actionsare all undertaken when pathogenic organismsor high levels of chemical contaminants aredetected in a water supply. Consequently, thecapacity development strategy will not beexpected to deal with these emergencysituations.

• A pattern of non-compliance will often serveas an indication that a water system lacksTFM capacity. Failures to monitor, frequentrecurrences of coliform bacteria in thedistribution system, variations in water qualityleaving treatment facilities and othersymptoms of this nature should trigger anassessment of a water system's TFMcapabilities.

• Overwhelming majorities of violations of thedrinking water rules occur in very smalldrinking water systems (serving less than 500persons). Concern that prioritizing systemson the basis of population would result in anoverall neglect of small water systems wasalleviated by the knowledge that this sizecategory would nearly always be the onechosen for assistance.

• The purpose of the prioritization scheme wasnot to decide which systems would or wouldnot receive assistance, but was aimed more atdetermining the order in which systems wouldbe given attention. Because the capacitydevelopment strategy will become an ongoingelement of the State's drinking water program,it should be possible to eventually serve allsystems that truly need capacity assistance.

• There is a need to collect additionalinformation about the water systems todetermine TFM capacity in order to deliverspecific assistance to meet T, F or M capacitydeficiencies.

Identification and Prioritization

The Advisory Group deliberated the issue of howcurrent information could be used to identify andprioritize systems needing TFM capacity building.Discussions occupied portions of two meetings.As a result of the considerations identified abovethe ranking scheme illustrated in the flowchart onthe following page (Table A1) was developed.Systems would be chosen for attention under thestrategy based on their compliance record as a first


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screening. A hierarchy of violation types, basedon public health risk, was developed by the WaterSupply Section staff (Table A2, Items 2-6). Thishierarchy will be used to assign complianceproblems to critical, serious, minor, potential,or request assistance categories. Systems will beranked according to the relative seriousness of thesystem’s problems. A final consideration indetermining which systems to assist would be thewillingness of the water system to cooperate withthe State in addressing its problems.

The nature of the assistance offered under thecapacity development program should bedetermined only after an assessment of thetechnical, financial, and managerial capacity of thewater systems that are ranked highest. TFMcapacity review could be accomplished by a self-assessment, by an “enhanced” sanitary surveycarried out by the State, or by a third partyevaluation conducted on site with the system'scooperation. Section C of this report discussesseveral of these assessment tools.


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Table A1: IDNR Identification and Prioritization Ranking Schematic


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Table A2: Iowa’s 1420(c)(2)(A) Criteria Definitions

1. Compliance – Conformance to the requirements of the Safe Drinking Water Act.

2. Critical Problem – Continued exceedance of an acute health based standard, or lack ofmonitoring for an acute contaminant. An acute contaminant is defined as a compound that, ifingested, may rapidly induce a severe and unacceptable impact on drinking water consumers.Health based standards are promulgated by the Environmental Protection Agency for bothregulated and unregulated contaminants. System is chronically out of compliance.

3. Serious Problem – Continued exceedance of a non-acute health based standard, or chronic lackof monitoring for a non-acute contaminant. A non-acute contaminant is defined as a compoundthat, if chronically ingested, may induce a gradual unacceptable impact on drinking waterconsumers. Health based standards are promulgated by the Environmental Protection Agencyfor both regulated and unregulated contaminants. System is chronically out of compliance.

4. Minor Problem – Minor problems are defined as sporadic or one-time violations of compliancestandards. (i.e. A system is temporarily out of compliance.)

5. Potential Problems – Potential problems are defined as problems that may lead to critical orserious problems in the future, or circumstances that may culminate in a problem due totightening of current regulations. System is not out of compliance at this time, but mayexperience difficulties in the future.

6. Willingness of Resolution – Systems that are willing to take action to resolve inadequatetechnical, managerial, or financial capacity.

7. Enforcement Action – An action against a public water supply initiated by the Department orthe attorney general to enforce the provisions of Iowa Code Chapter 455B or rules adoptedpursuant to the chapter. Enforcement actions include such things as: notification of a violation,requirements for public notice, issuance of an administrative order, referral to the attorneygeneral, attorney general proceedings, etc.

8. TFM Analysis – Analysis, via the Self-Assessment Manual for Iowa Water System Viability, ofa system’s technical, financial, and managerial capability to produce safe drinking water at areasonable cost for the foreseeable future.

9. TFM Assistance – Assistance related to the technical, financial, or managerial capacity of apublic water system provided by the Department or a third party technical assistance provider.

Iowa Report of FindingsSection B

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SECTION B: FACTORS THAT ENCOURAGE OR IMPAIR CAPACITYDEVELOPMENT

Considerable attention was given to addressingSection 1420(C)(2)(B) of the SDWA Amendmentsof 1996. The Act requires each State to identifythe factors that either encourage or impair thetechnical, financial, & managerial (TFM) capacityof public water systems. States are required toidentify institutional, regulatory, financial, tax, andlegal factors. A sixth factor category, "other," wasadded to capture issues outside of the prescribedcategories.

The factors operating at the Federal, State, andlocal level that impair or enhance water systemcapacity are presented in this section of the report.By definition they are:

• Institutional – Intergovernmental, cultural, proceduralor relationship issues that either enhance or impair theability of water systems to acquire and/or maintainTFM capabilities

• Regulatory – Federal, State or local rules andregulations that affect TFM capacity

• Financial – Financial practices, policies or conditionsthat affect TFM capacity

• Tax – Federal, State or local taxation practices,policies or attitudes that affect TFM capacity

• Legal – Federal, State or local statutes,interpretations of laws and court decisions that affectTFM capacity

These factors were drawn from national studies,from the experience of Advisory Group membersand from knowledge gained by the IDNR inadministering the drinking water program over theyears. The Advisory Group identified 82 factorsat the Federal, State and local levels that are eitherenhancements or impairments to public watersystem TFM capacity. Table B.1 itemizes thefactors by major category.

Table B1: Federal, State, and Local Factors that AffectWater System TFM Capacity

Enhancements to Capacity

Other4%

Regulatory

31%

Tax11%

Legal4%

Financial27%

Impairments to Capacity

Other4%

Regulatory

20%

Tax9%

Legal5%

Financial30%

Institutional23%

Institutional32%


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1. Federal Factors that Enhance or ImpairPublic Water System TFM Capacity

A. Federal Enhancements to TFM Capacity

Institutional Enhancements:

• US EPA funding to States for the PublicWater Supply Section program and to othertechnical assistance organizations providesexcellent support for building TFM capacityat the water system level.

Regulatory Enhancements:

• The Safe Drinking Water Act has provided animportant common ground for the protectionof public health for 25 years. SDWA providesthe statutory and regulatory basis for whatStates and local water systems must do at aminimum to provide safe drinking water.

• Depth and detail of research and thecommitment to work with the regulatedcommunity and States in determining nationalstandards is an enhancement to TFM capacity.

• Regulations force systems to meet (address)the issues that are most relevant to providingsafe drinking water to the public.

Financial Enhancements:

• Water suppliers that meet DWSRFrequirements may have capital improvementsand source water protection efforts fundedwith low interest loans.

• US EPA designating DWSRF set-asides forcapacity building programs and technicalassistance is an important enhancement tocapacity building.

• Continued funding for State programs (PublicWater Supply Section) is an importantenhancement to creating State capacity forTFM programs.

Tax Enhancements:

• Federal tax code has been changed in regardsto “Contribution in Aid of Construction”resulting in reduced tax liability for investorowned utilities.

Legal Enhancements: None identified forinclusion in Findings.

Other Enhancements: None identified forinclusion in Findings.

Table B2: Federal Factors that Affect Public WaterSystem TFM Capacity

Factors Enhance-ments

Impair-ments

Institutional 1 6Regulatory 3 5Financial 3 6Tax 1 1Legal 0 0Other 0 0Total 8 18

B. Federal Impairments to TFM Capacity

Institutional Impairments:

• While considerable funding is provided,demand for oversight, assistance programsand capital expenditures outpaceCongressional appropriations andadministrative budget levels.

• Occasionally US EPA Regional Office and USEPA Headquarters programmaticinterpretations differ, creating confusion forStates and the regulated community.

• Even though US EPA’s regional officestructure is designed to accommodate regionalpreferences, the US EPA Headquarters isperceived to be institutionally remote(removed) from the issues that are relevant torural Iowa; especially less populated countiesin the State.


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• US EPA has tremendous responsibility inassisting States in protecting public healththrough the provision of safe drinking water.However, there is a lack of coordinationbetween federal agencies that also haveresponsibility for participating in the missionof providing safe water. (E.g. USDA-RD, USArmy Corps of Engineers, HUD).

• Federal officials are perceived to be beholdento bureaucratic structures that reduceflexibility in assisting States and the regulatedcommunity in meeting national drinking waterprotection goals.

• Federal performance measures drive Stateprogram operations – focus should be onoutcome, not process.

Regulatory Impairments:

• Science vs. Politics/cost-benefit analysis.Although recent progress has been made incrafting drinking water standards that are costeffective and efficient in protecting the publichealth, more work needs to be done in thearea of providing common-sense informationon the standards that are being promoted.Congress is concerned about theimplementation of health-based regulations.Senate Bill 746 is one example of legislationdesigned to improve regulatory development.Introductory language from S. 746 is offeredbelow:

Regulatory Improvement Act of 1999 (Introduced inthe Senate)

SECTION 1. SHORT TITLE.

This Act may be cited as the `RegulatoryImprovement Act of 1999'.

SEC. 2. FINDINGS.

Congress finds the following:

(1) Effective regulatory programs provide importantbenefits to the public, including improving theenvironment, worker safety, and public health.Regulatory programs also impose significant costs onthe public, including individuals, businesses, andState, local, and tribal governments.

(2) Improving the ability of Federal agencies to usescientific and economic analysis in developingregulations should yield increased benefits and moreeffective protections while minimizing costs.

(3) Cost-benefit analysis and risk assessment areuseful tools to better inform agencies in developingregulations, although such analyses and assessments donot replace the need for good judgment andconsideration of values.

(4) The evaluation of costs and benefits must involvethe consideration of the relevant information, whetherexpressed in quantitative or qualitative terms,including factors such as social values, distributionaleffects, and equity.

(5) Cost-benefit analysis and risk assessment shouldbe presented with a clear statement of the analyticalassumptions and uncertainties, including anexplanation of what is known and not known andwhat the implications of alternative assumptions mightbe.

(6) The public has a right to know about the costs andbenefits of regulations, the risks addressed, the risksreduced, and the quality of scientific and economicanalysis used to support decisions. Such knowledge willpromote the quality, integrity and responsiveness ofagency actions.

(7) The Administrator of the Office of Informationand Regulatory Affairs should oversee regulatoryactivities to raise the quality and consistency of cost-benefit analysis and risk assessment among allagencies.

(8) The Federal Government should develop a betterunderstanding of the strengths, weaknesses, anduncertainties of cost-benefit analysis and riskassessment and conduct the research needed to improvethese analytical tools.


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• Rules and regulations are promulgated by USEPA without complete consideration of theability of States and local water systems toultimately implement them. Although theUnfunded Mandates legislation attempts toaddress this concern, significant costs ofimplementing rules still exist. Mandated rulesshould be implemented with regard to thecharacteristics of the States. Risk basedassessment of need for rule implementation ineach State should be considered.

• Increased number of federal regulations(which are often viewed as unfundedmandates) and continuous changes inregulations and rules create difficulties forboth State regulators and regulated systems.

• State and local officials must often deal withthe uncertainty associated with or arising fromthe process for adoption of drinking waterrules and standards. An extended time periodfor completion of the prescribed steps (initialproposal stage, public review and comments,final adoption, etc.) is probably unavoidable.However, the process will often generate anawareness of a pending standard orrequirement but will not necessarily providethe information needed to allow compliancein a timely and/or cost effective manner. Forexample, needed improvement projects maybe delayed pending final adoption of a rule orstandard and clarification about itsramifications or compliance requirement(s).

• Federal regulations should be written tobalance the technical requirements forestablishing rules with the capability of watersystems to assimilate the requirements intotheir operations and management. Size andcomplexity of regulations is a problem whenresources are devoted (wasted) to interpretrules to overcome the way they are written.

Financial Impairments:

• While the establishment of the DWSRF andthe capitalization funding provided by USEPA are definite enhancements to capacity,DWSRF “Red Tape” and proceduralrequirements are impairments to TFMcapacity building. Systems will look toDWSRF as a funding source after “easier”financial services are explored.

• It would enhance TFM capacity if the federalgovernment would take a stronger intra-governmental approach to coordinatingfinancing programs for drinking watersystems. Since this coordination is notapparent today, the lack of coordination is animpairment to TFM capacity building efforts.

• The federal government should considersupporting vouchers or other incentives fortraining that would make best use of a varietyof training and technical assistance programsthat could be offered in a free marketenvironment. This would be an enhancementto capacity, but the lack of this type ofprogram is viewed today as an impairment.

• The US EPA drinking water needs surveyindicates a significant need for capitalfinancing resources. The current fundinglevels requested by the US EPA and approvedby Congress are inadequate to meet fundingneeds. Both grant and DWSRF loanprograms should be enhanced and given alonger authorization/appropriation period bythe Congress.

• Set-asides for capacity development andimprovement (TFM) programs are tied toDWSRF capitalization. There is a need formore permanent federal funding to States fortechnical assistance activities for TFM.

• The US EPA does not provide adequatefinancial resources (in the form of the PublicWater Supply Supervision grant) to the WaterSupply Section to completely implement thestate's expanded responsibilities under theSDWA.


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Tax Impairments:

• Federal tax code limitations on privatefacilities financing through the use of privateactivity bonds are an impairment toacquisition of capital for neededimprovements. Private activity bonds areused either entirely or partially for privatepurposes and are given federal tax-exemptstatus.

Private activity bonds are advantageousbecause; they offer private entities lowerinterest rates than they would otherwise beable to obtain, a government can use private-activity bonds to give economic incentives totargeted activities or geographic areas.

The Advisory Committee recognizes thatwhile private activity bonds have certainadvantages, federally imposed volume capslimit the availability of private activity bonds.Each state's cap is determined by a formulacomputed as the greater of either $50 percapita or $150 million. The Committeesuggests that state volume caps bereconsidered in light of the need for publicwater system capital improvements and theneed for diverse sources of capital.

Legal Impairments: None identified for inclusionin Findings.

Other Impairments: None identified for inclusionin Findings.

2. State Factors that Enhance or ImpairPublic Water System TFM Capacity

A. State Enhancements to TFM Capacity


• IDNR is helping to create networks amongsystems for technology transfer and technicalassistance.

• Information, education and training forcommunity leaders from a variety of sources(IAMU, IRWA, AWWA, IDNR, etc.). Theseprovide for, or enhance the communicationand education of community leaders.

• ICN training – Excellent educationalopportunities via AWWA, CommunityCollege system, Iowa State University, andothers. Allows for training without travel onthe part of operators.


• The 1986 SDWA Amendments allowed thecreation of State-authorized programs forissuing monitoring waivers to public watersystems. Iowa’s monitoring waiver program,funded in part by system user fees has createdsignificant cost savings for public watersystems.

• Enhanced coordination of water monitoringand protection programs is essential. Providefor the funding, collection and interpretationof water monitoring data into a centralizeddatabase, and making it accessible, retrievable,and understandable. The primary focus ofwatershed protection should be to utilize localagencies and individuals for coordinated,sustainable programs (regional or statewide).Monitoring and protection programsdeveloped using this approach would havemore scientific validity and would provideinformation and resources that would be trulybeneficial to State leadership, water systemofficials and the general public in makinginformed decisions.

• The State needs to become pro-active inassisting systems and/or communities inidentifying the problem areas and outline whatoptions are available to make the necessarychanges and/or improvements. Facilitatingthe long range planning which may includecapitalization, consolidation, privatization, etc.

• Operator certification – Iowa has a strongoperator certification program, whichenhances capacity.


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• Multiple funding sources provided by thefederal and state governments [e.g., DWSRFand Department of Economic Development(USDA-RD, HUD), etc.] are available tomake difficult financing challenges moreviable.

• Iowa Department of Revenue and FinanceReview. For public water systems subject toState oversight, the financial oversight of theDepartment of Revenue creates a standard formaintaining financial capability whileprotecting the rights of water systemcustomers.

• IDNR's Water Supply Section receivesrevenues from State-imposed yearly operatingfees paid by regulated water systems. This feerevenue partially supplements Legislativeappropriations for Water Supply Section(WSS) program activities.

Tax Enhancements:

• Tax exempt bonds are available to fundinfrastructure projects in municipalities.

• Exemption of state sales taxes for purchasingmaterials and exemption of property taxationfor publicly owned and rural water systems.


Other Enhancements: None identified forinclusion in Findings.

Table B3: State Factors that Affect Public Water SystemCapacity


Impair-ments


B. State Impairments to TFM Capacity


• Duplication of services provided throughState agencies for utilities or other Stateagencies – many departments have the sameofferings/layers of bureaucracies.

• Lack of overall resources to provide technicalsupport and training.

• Many very small systems. Approximately97% of Iowa water supplies meet the US EPAdefinition of a small water system and 58% ofIowa systems serve populations of less than500. See “About Iowa Water Systems” in theintroduction to this document for furtherdetails.

• Confusion about use of State discretion. Dueto low funding availability, the State providesminimal services. The State needs to be moreproactive. For example, there is a need tomove to a “Technical Assistance” mode.Current Drinking Water Program activitiesreflect regulatory enforcement pattern ofoperation.


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• Interdepartmental and intradepartmentalissues are impairments to capacity buildingactivities. Intradepartmental issues relative toheadquarters office control and field officediscretion make programmaticimplementations difficult. Also, coordinationneeds to be improved between water andwastewater sections of the agency. (SeeAppendix B.)

• Some water system compliance areas areregulated by Health Dept. (fluoride, backflowprevention programs) and others by IDNR orboth. This institutional “disconnect” isconfusing for the regulated community andinefficient for the State.


• For small systems, the ability to understandcomplex regulations and requirements islimited by lack of management capacity.

• Currently in Iowa there is a lack of incentivesand regulatory flexibility that could encouragegreater sharing of managerial and technicalresources between neighboring communities.

• Programmatic implementation of regulationsthat allow the approval of sub-optimal systemplans, the lack of enforceable designstandards, and the reluctance of the DrinkingWater Program to enforce conservation ofwater are all impairments to system capacity.

• Inconsistency of enforcement.


• The perception that there is inadequatefunding for resources to enable the Statewater supply program to provide flexibility indealing with systems on a case-by-case basisand provide more frequent visits by fieldoffice staff.

• Lack of communication and coordinationamongst funders – enhanced commitment ofState dollars and the coordination betweendepartments for funding like projects isneeded.

• State legislature not appropriating matchingDWSRF funds (bonds have to be sold formatching funds) so there are no grant fundsor zero interest loans.

• No uniform governmental accountingrequired of systems. Other financialmanagement standards and requirements(such as periodic audit requirements) areneeded.

• Public water systems do not trust IDNR useof drinking water fees and therefore do notsupport increases in the fees.

• DWSRF audit requirements by the bondholders are a disincentive to potentialapplicants.

Tax Impairments:

• Imposition of the 5% Iowa sales tax on watertends to increase the likelihood thatconsumers will perceive their water rates to beonerous.

• Property taxes should not be assessed onwater mains and equipment for small investorowned utilities. This creates a disincentive toupgrade, expand and replace capital facilities.

• Lack of State regulation allows for co-mingling of municipal taxes and utility ratesrevenues.

• Heavy taxation of investor owned utilities.Current Iowa tax policies create tax liabilitiesfor privately owned public water systems thatare profit-making entities. These added costsof operation should be analyzed to determineif the tax revenues generated to the Stategeneral fund are more valuable than levelingthe playing field among water systems.


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Legal Impairments:

• There is an increasing use of lawsuits to getstates to enforce drinking water regulations.

• Pending urban sprawl legislation could limitannexations and therefore limit the ability of amunicipality to grow and expand territories.This will create a legal barrier to systemconsolidation goals expressed in SDWA.

Other Impairments:

• Public water supplies are sometimes identifiedincorrectly as private systems by some countysanitarians.

3. Local Factors that Enhance or ImpairPublic Water System TFM Capacity

A. Local Enhancements to TFM Capacity


• The current regional and statewide meetingsof various stakeholder groups (AWWA,IRWA, IAWA, IAMU) provide excellentopportunities for TFM capacity building.

• Funding for programs and activities thatprovide training and education at the locallevel (non-regulatory programs) areenhancements to capacity.


• Municipal governments have the authority toregulate and control or to prohibit cross-connections.


• Elected officials or Utility Board membersappointed by locally elected officials have theauthority to initiate financing for capitalprojects.

Tax Enhancements: None identified for inclusionin Findings.


Other Enhancements:

• Local water systems exhibit characteristics forcooperation with other communities,agencies.

Table B4: Local Factors that Affect Public Water SystemTFM Capacity


Impair-ments


B. Local Impairments to TFM Capacity


• Lack of public awareness of the costs of waterproduction, treatment and distribution.Generally, customers do not realize that wateris a limited natural resource and thatconsiderable financial resources are needed toproduce and deliver it safely. The AdvisoryGroup agrees that the public expectation isthat water be inexpensive although it is anessential product. Local policy-makers oftenseem to share this delusion and price waterservice inappropriately (in terms of meetingthe full costs of delivering this commodity).There is a lack of public knowledge specific tothe SDWA or the water industry as a whole.

• Inherently, the smaller water systems willalways face a greater challenge since they lackthe economy of scale or resources available tothe larger utility systems. The continuedprovision of an ample supply of safe drinkingwater at an “affordable price” will only bepossible through increased cooperation orcollaborative efforts among the utilities.


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• Long-term viability of a water system isenhanced when communities and theirrespective governing boards recognize themost critical element to accomplishing thisgoal – a professional staff with the access tonecessary resources and funding. Smallcommunities often do not posses theresources for sustainability. In addition, thereis high turn over in management. Amanifestation of a commitment to long-termviability would be the development andfunding of an ongoing capital improvementsprogram.

• Distrust of regulatory and stakeholderorganizations.

• Currently there is no shared planning orsharing of information among water serviceentities to ensure proper planning and toavoid competing for customers. Duplicationof utility services and dollars spent needs tobe prevented. Duplication of effort is not costeffective and is an impairment to overallcommunity sustainability.

• In many cases there are excellent countyhealth departments available to assist publicwater systems through the work of countysanitarians. However, county healthdepartments and IDNR have not fullydeveloped a good working relationship.IDNR does not have the capacity to help traincounty staff nor to effectively coordinate toenhance TFM capacity. Due to currentcounty budget restraints, county healthdepartments cannot be involved in the SDWAactivities.


• Long range planning of water service needsshould be shared by all entities affected by lawto prevent duplication and proliferation ofpublic water systems. Local land use planningentities must be active partners with theIDNR in promoting system consolidation andexpansion of existing systems whereverpossible versus promoting the establishmentof new water systems.

• Small systems lack knowledge regardingregulation interpretation and lack resourcesnecessary to carry out requirements.


• There is a lack of appropriate fundingmechanisms for small systems. For example,low cost financing for small projects.

• Numerous public water systems in Iowa failto adequately finance their full costs ofoperations and capital investment (bothexpansion and replacement). Inappropriateuser fee mechanisms result fromunderestimating system revenue needs. Thisprevents PWSs from keeping up withincreases in operating expenses, maintainingadequate reserve funds and properly investingin the capital facilities; thus creating apremature demand for state and federalcapitalization grants and loans. Citizenpressure to “hold the line” on taxes (and userfees) is placed on PWS board members whoare then reluctant to raise user charges toappropriate levels.

• Economies of scale are lacking for many smallwater systems.

• Small water systems in Iowa lack financialresources and the knowledge of financialresource management. This currentimpairment to capacity could be overcomethrough training and technical assistanceprograms.

Tax Impairments: None identified for inclusion inFindings.

Legal Impairments:

• Lack of land use regulation contributes to theproliferation of water systems. Zoningauthority (which could be used to fosterconsolidation and efficient expansion ofsystems) is often unclear.


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Other Impairments:

• Specific geologic conditions (radionuclides,arsenic, and sulfate) create special complianceproblems for Iowa’s public water systems.

Iowa Report of FindingsSection C

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SECTION C: RECOMMENDATIONS ON HOW THE STATE CAN USE ITSAUTHORITY AND RESOURCES TO HELP WATER SYSTEMS IMPROVECAPACITY BACKGROUND

Following its work of identifying and discussing the factorsthat encourage or impair capacity development, theViability Assessment Advisory Group directed itsattention to forming a set of recommendations for programelements designed to address the need for improving theTFM capabilities of regulated public water systems. TheAdvisory Group's recommendations take into considerationthe following:

• The program elements are suggested inresponse to significant TFM enhancementsand impairments identified in Section B ofthis Report of Findings. These programelements represent efforts the State of Iowa,its cooperating local governments and public,not-for-profit and private partners canundertake to improve TFM capabilities.

• Generally, the impairments to TFM areproblems that need to be addressed by publicwater system regulators and the regulatedcommunity. The eight programs listed in thissection of the report are suggested toovercome TFM capacity problems in publicwater systems.

• The suggested program elements arepresented without specific schedules forimplementation or ranking. The purpose ofthis section of the report is to presentprograms for improving TFM capabilitieswithout regard to implementation demands.The program elements presented do notinclude specific recommendations regardingresponsibility for implementation by theIDNR Drinking Water Program or otherstakeholders. Ultimate responsibility forimplementation of selected program elementsremains with the IDNR as the primacy agencyfor the State of Iowa. However, it is expectedthat the IDNR will seek assistance from otherstakeholders and service providers inimproving the TFM capabilities of publicwater systems.

Program Recommendations: Eight Elementsfor Improving the Technical, Financial andManagement Capabilities of Public WaterSystems

1. Currently, information is routinely collectedrelative to the technical capabilities of publicwater systems. There is a need to beginsystematically collecting supplementalinformation regarding the financial andmanagement capacity of systems. TheAdvisory Group not only recognized the needfor collection of TFM information by theIDNR, but also felt that the informationshould be shared with the individualsresponsible for the technical, financial, andmanagerial aspects of running the system. Inaddition, the group felt that a summary of theTFM information in the form of a TFM scoremight be helpful to the systems in attractingindustry, quality operators, and recognitionfrom the public. The group suggested thefollowing items as possible responses to thisrecommendation:

• An enhanced sanitary survey would beused to collect TFM information fromthe systems for later review by IDNR andother partners with expertise in financialand managerial areas.

• The IDNR representative would attend aboard of directors or city council meetingto go over the survey and answer anyquestions, and to encourage themanagement to consider long-termplanning for the system.

• A TFM “scorecard” would be developedand provided to the system following thesurvey. The score would be relative, butwould allow for comparison betweensystems.


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2. A significant theme identified in the processof discovering the impairments to TFMcapacity of public water systems was the needto improve the knowledge of drinking waterprotection rules among operation andmanagement personnel. Often rules andregulations are produced in forms that aredifficult for small system operators andmanagers to digest. The Advisory Group feltthat information provided to operatorsregarding current rules and future regulationdevelopment should be improved.Additionally, water systems that have limitedmanagerial capabilities have difficulty intracking regulatory changes from theirinception as proposed rules, to their adoptionas actual State standards. The following itemswere suggested as possible responses to thisrecommendation:

• Offering Continuing Education Units(CEU) for operator attendance at ruleshearings or meetings.

• Development of an automatic e-mailservice to keep operators updated on ruledevelopment or modification.

• Provision of a toll-free telephone serviceupdate on rule development ormodification, for example an “1-800-DNR-RULE” telephone service.

• Mailing of an annual rules status updateto all water system operators.

• An effort to improve managementcapacity through on-site board membertraining. Special focus would be placedon long-term planning for the system,financial management and full costfinancing for the system, and regulatoryenvironmental and financial controls.

3. The Advisory Group felt that communicationand trust between US EPA, IDNR, and thewater systems were lacking. As a result, theysuggested the creation of a periodicnewsletter. The newsletter would be providedto each water supply by the IDNR. Currently,IDNR provides a State Annual Report to USEPA, the SDWA Advisory Group and the

governor. In addition to periodic informationtransfer, the Advisory Group has suggestedthat the IDNR provide a concise CCR-stylereport that would include an accounting ofhow the annual water supply fees were spentin addition to a summary of annualcompliance data and IDNR activities. TheAdvisory Group has also suggested that theUSEPA provide the IDNR Water SupplySection with an annual CCR-style report on itsperformance in overseeing SDWAimplementation for the State of Iowa. Thereport would help the Water Supply Sectionidentify opportunities for improving theintergovernmental relationship betweenUSEPA and the IDNR and possible ways toenhance the effective expenditure of limiteddrinking water protection resources.

4. The majority of Iowans are provided safedrinking water on a consistent basis. Oftencustomers take this essential public service forgranted and are not completely knowledgeableof the technical or financial requirements forproviding safe water. Customers andpoliticians carry the perception that theprovision of safe water should be enjoyed atlittle or no cost to consumers, which makes itdifficult for water suppliers to charge thewater rates necessary to operate the system ina viable manner for the long-term. The grouprecognized that public education related to thewater supply industry would be beneficial.The following ideas were suggested asmethods of educating the public:

• Development of a public relationscontest, where a cash prize would begiven for the best public water supplymarketing strategies; for improving publicawareness of the IDNR Water SupplySection, assisting systems with the localmarketing of their product and services,and raising the awareness of the generalpublic with regard to the costs ofproviding safe drinking water.

• Incentives for schools to include watertreatment and supply as a curriculumtopic.

• Accessing USEPA environmentaleducation grant funding for these ideas.


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5. Several group members identified the need toencourage partnerships between agencies andamong systems. For examples localnetworking of water system operators andboard members could result in the sharing ofideas on how to solve common problems,informal mutual aid agreements for use ofequipment and personnel, and reduce theneed for regulatory agency intervention. Thefollowing suggestions were made with regardto this recommendation:

• The use of ICN training sessions or peerreview forums targeted to operators andboard or city council members should beencouraged. Attendance at these sessionswould allow operators and board/citycouncil members to get together andnetwork before and after the sessions.

• The Iowa State University extensionservice could be used as a source oftechnical assistance for operators.

• Partnerships between technical assistanceproviders such as IAWA, AWWA,IRWA, and IAMU should be encouragedthrough joint planning meetings withIDNR.

• US EPA should be encouraged to workmore closely with USDA in providingfunding for water system improvementprojects and working on issues related towater and agriculture.

• Training in partnership issues could betied to CEUs.

• Reimbursement for these types ofactivities should be sought from the USEPA operator certification trainingprogram.

6. The Advisory Group felt that theimprovement of inter-departmental and intra-departmental communications was necessaryto improving the funding for TFM relatedprograms. Inter-departmentalcommunications are those among differentagencies. Intra-departmental communicationsare those that occur within agencies. Servicesand missions of State agencies frequentlyoverlap or are disjointed, with one agencyproviding support for portions of the watersupply program, and another agencyproviding support for other portions. Inaddition, relationships between agencies aremore a function of informal aspects of theorganizations; that is, often personalities ofpersons interacting on behalf of their agenciescan directly affect cooperation – both to the“good and bad of the order”. The groupsuggested that the following items mightimprove inter-agency communications:

• Increased contact with legislators andother agencies, i.e. a regular meetingscheduled with interested State legislatorsand State agencies to report on anyactivities related to drinking water orsource water.

• Increased communication with theDepartment of Public Health to discussdrinking water program responsibilitiesand activities.

• A description of potential linkages shouldbe formulated to look at how or whatcould be done to better serve the publicin the area of drinking water provisionthrough inter-agency comprehensiveplanning.

The following Advisory Group suggestionsapply to the improvement of intra-agencycommunications:

• The establishment of meaningfulorganization performance measureswould provide for increased confidence inthe Department and would foster a highersense of accountability for intra-agencyperformance.


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• Field office personnel should be underthe supervision of the water supplysupervisor to standardize enforcementbetween central office and fieldpersonnel, or the compliance andenforcement bureau chief should, at aminimum, attend the regularly scheduledmeetings between central office and fieldoffice staff. See Appendix B for a moredetailed discussion of this proposal.

• The currently configured Water QualityBureau is comprised of three separatesections (including the Water SupplySection) that have responsibility for waterquality and quantity issues. Drinkingwater protection, the mission of theWater Supply Section, is not and cannotbe isolated from the missions of theWastewater Section or the WaterResources Section. The advisory grouprecommends that the IDNR managementaddress this issue of intra-Bureaucommunications and sub-organizationalinteraction. This would improve theeffectiveness of the Bureau inimplementing the Safe Drinking WaterAct.

7. Small systems face the challenge of acquiringcapital resources for improving or replacingwater system infrastructure. This is especiallytrue for non- governmental systems that donot have access to traditional government-sponsored capital financing programs (e.g.,Community Development Block GrantProgram, USDA Rural Development). Evenwith the traditional funding options, smallsystems may have difficulty accessing capitalfinancing. The advisory group recommendsthat the IDNR sponsor a meeting or series ofmeetings where capital financing agencies,public finance specialists and public watersystem stakeholder groups could discussinnovative techniques for financing smallsystem capital improvements. The meetingswould not only identify opportunities forinnovative financing instruments to bedeveloped, but would also identifyinstitutional, legal and financial barriers to theuse of those tools.

8. For a number of years, the Water SupplySection of IDNR’s Environmental ProtectionDivision has been burdened with having todeliver a State drinking water protectionprogram with limited resources. The scope ofthe drinking water protection program hasbeen dramatically increased because of the lasttwo amendments to the Safe Drinking WaterAct in 1986 and 1996. The perception of theAdvisory Group is that personnel resourceshave not kept pace with the newresponsibilities of the State program. TheAdvisory Group recommends that a third-party assessment of current and futureprogram resource needs provide informationneeded to overcome this perception and allowthe Advisory Group and other stakeholders tosupport the financial and staffing resourceneeds in the Drinking Water Program.

The Advisory Group recognizes that theproper implementation of a TFM capacitystrategy is tied directly to the availability ofprogram resources. The Group, as concernedstakeholders, believes that it (as well as thepublic) should be involved in examiningexisting program resources and whatsupplements might be needed to implementthe strategy. Additionally, the AdvisoryGroup could work on behalf of the publicwater systems that would benefit from TFMprograms to help persuade policy makers toprovide appropriate resources for strategysuccess. While the public review of the State’simplementation plan for the strategy isexpected at some point, the Advisory Groupbelieves that its early involvement in theprocess is important.

Iowa Report of FindingsSection D

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SECTION D: MEASURING THE SUCCESS OF IOWA’S CAPACITYDEVELOPMENT STRATEGY

This Report of Findings offers the Advisory Group’ssuggestions about how the Iowa Department ofNatural Resources might develop a strategy forimproving the technical, financial and managerialcapabilities of public water systems. In developingthat strategy, the Advisory Group suggests thatIDNR measure the success of its capacitydevelopment efforts in three ways:

1. Compliance Tracking

In accordance with the prioritization schemepresented in Section A, the first criterion inselecting water systems for attention under theCapacity Development Strategy is compliancehistory-- the assumption is that a history of non-compliance reflects a lack of capacity. IDNRshould consider tracking the compliance ofsystems that are chosen for assistance under theStrategy. Statewide trends in compliance, such asmight be indicated by the triennial report to USEPA on systems with a history of non-compliance, are complicated by a large number ofcontributing factors which may not relate tosystem capacity. System-specific compliancetracking will more accurately measure theeffectiveness of the capacity building effortscarried out under the Strategy

2. Outreach and Assistance

The IDNR should keep careful records ofassistance programs aimed at assisting watersystems in improving capacity. The AdvisoryGroup has recommended a range of efforts of thiskind in Section C of this report. Examplesinclude, but are not limited to:

a) Number of enhanced sanitary surveys orcomprehensive performance evaluationsconducted.

b) Site visits for technical assistance (number andtype of assistance rendered).

c) Number of water systems that complete self-assessments of capacity. Comparison ofassessments taken before and after receivingassistance would be particularly useful.

A count of the activities carried out under theStrategy is an indicator of the magnitude of theeffort, but only indirectly a measure ofeffectiveness. Whenever possible, IDNR shouldfollow capacity assistance efforts with some typeof system specific assessment at a later date todetermine if the assistance was effective and theresults that were obtained had lasting value.

The US EPA State Drinking Water InformationSystem would be a good place to track capacityassessments, assistance, and follow-up efforts. Aconsumer survey could be developed for use insoliciting feedback from systems that havereceived assistance under the CapacityDevelopment Strategy. This survey would bemailed to the system within a few weeks of thetime that assistance was given. Results from thesesurveys, and from other tracking activities, wouldbe used to modify the Strategy over time, placingemphasis on those elements that are successfuland trimming activities that prove to be lessuseful.

3. Planning Activities

The number of water systems that prepare capitalfacility management plans, water system plans,emergency plans, business and/or financial plansor complete capacity self-assessments each yearwould be a good indicator of the success of theStrategy because it would reflect growingknowledge about, and interest in, capacity issueson the part of public water systems in the State

Iowa Report of FindingsSection E

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SECTION E: PUBLIC INVOLVEMENT IN PREPARING THE IOWACAPACITY DEVELOPMENT REPORT OF FINDINGS

The IDNR called upon its Viability AssessmentAdvisory Group to provide a sounding board onissues for developing a set of findings forimproving capacity that could then be presentedto the general public. Advisory Group members,by combining their varied backgrounds anddifferent perspectives deliberated to ensure thatthe group’s Report of Findings would be balancedand comprehensive.

However, the Advisory Group could not possiblyencompass in its membership all organizationsand individuals within the State who might havean interest in this subject. In its first meeting, theAdvisory Group examined the question of whoelse should be involved in the process ofpreparing a drinking water capacity developmentstrategy. They concluded that certain key interestgroups, beyond those already represented, shouldbe encouraged to participate with the AdvisoryGroup if at all possible. Additionally, otherinterested persons and organizations were invitedto provide information regarding their positionthrough an interview process or in writing.Finally, the public at large was engaged to thegreatest extent possible through a series of publicinvolvement initiatives. A Questionnaire wasdeveloped to facilitate public input.

Other Public Involvement Initiatives

The Advisory Group agreed that theirrecommendations should be presented to thepublic at large, with an opportunity for commentsand suggestions. Various methods wereconsidered, including training, publications, pressreleases, and public meetings. The IRWA, IowaAccess, IAWU, Iowa Association of Counties,AWWA, Iowa League of Cities, IowaGroundwater Association and Iowa Well WaterAssociation will all publish relevant information intheir newsletters. The information will beavailable through the Web Sites of the IDNR,IRWA, IAMU, US EPA, EFC, AWWA, IowaLeague of Cities, Des Moines Water Works, IowaAccess, and the Iowa Association of Counties.

Presentations will be given at the IRWAConference in September 1999, the IAMUConference in November 1999, AWWA RegionalMeetings, the Annual AWWA and IRWAMeetings in February and March of 2000. Threepublic meetings will occur throughout the Statebetween October and November 1999. Ameeting in Western Iowa will take place in earlyOctober 1999 corresponding with the AWWACouncil Bluffs evening session. Central Iowa willbe represented in late November 1999 inconjunction with the AWWA Des Moines shortcourse. A meeting in Eastern Iowa will be held inmid-November 1999 in either Cedar Rapids orIowa City. A joint meeting of the Iowa StateAssociation of Counties and County Sanitarians isalso being planned. Public comments will bereceived through December 15, 1999. Review ofthe comments will take place in December, and beincorporated in to a final Report of Findings.

Iowa Report of FindingsAppendix A

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APPENDIX A: VIABILITY ASSESMENT ADVISORY GROUP MEETINGHIGHLIGHTS

The Iowa Viability Assessment Advisory Groupmet 7 times in 1998-1999 to consider developing acapacity strategy for public water systems. Duringthe month of July 1999 the draft of the IowaCapacity Development Report of Findings wasprepared using input from Advisory Groupmembers, IDNR management, and publiccomments. There is a public record associatedwith these meetings. Persons wishing to obtain amore detailed record of the proceedings may doso by contacting the IDNR at 515-281-5130.

Highlights of the Viability AssessmentAdvisory Group

December 9, 1998

Bill Jarocki of the EFC gave a presentation on theSDWA requirements for capacity development.The Advisory Group began work on Section1420(c)(2)(E), identifying a list of stakeholdersthat should be part of the strategy process. Thelist was divided into three categories. “TypicalParticipants” are those participants who frequentlyassist the IDNR in developing rules and strategiesfor public drinking water systems; “TypicalParticipants Not In Attendance” are thoseparticipants who were invited to the meeting butdid not attend, and/or those who had been askedto serve on the SDWA Advisory Group but hadsince stopped attending; and “Non-TypicalParticipants” are those participants whoseopinions are not normally sought by the IDNRbut might desire representation in thedevelopment of the Iowa Viability Strategy.Together, these three groups comprise the“Viability Assessment Advisory Group.” Atentative timeline was established as follows:

• January through April, 1999 – Work on1420(c)(2)(A-E)

• May, 1999 – Staff Prepare Report of Findings

• June, 1999 – Review/Approve Report ofFindings

• July/August, 1999 – Public Hearings,Comments

• September, 1999 – Approve Final Report ofFindings, Submit to IDNR

January 13, 1999

Bill Jarocki gave a review of the SDWArequirements for viability assessment. TheAdvisory Group then began work on Section1420(c)(2)(A), the methods or criteria that theState will use to identify and prioritize those publicwater systems most in need of improvingtechnical, financial, and managerial capacity. TheAdvisory Group discussed a model developed bythe State of Missouri and proposed some changesto adapt the model to fit Iowa’s State drinkingwater program. The Advisory Group thenproduced a draft Decision Model, usingcompliance as the primary factor in determiningwhich systems should receive TFM assistance.The systems will then be broken down intoCritical Problems, Serious Problems, and MinorProblems. Systems with no problems would alsobe allowed to ask for assistance. Systems that arewilling to solve the problem will go through TFManalysis and will then be eligible for TFMassistance. Systems that are not willing to fix theproblem will be routed to legal enforcementaction. A discussion as to how to define thedifference between TFM analysis and TFMassistance took place. Analysis is used to assessthe areas in which a system needs assistance,whereas assistance will help build systems’capacity. The Advisory Group felt it wasappropriate to keep analysis and assistanceseparate on the flow chart. The flow chart thatwas developed is only a working model, and opento future review and editing. The Advisory Groupthen began discussing Section 1420(c)(2)(B), adescription of the institutional, regulatory,financial, tax, or legal factors at the Federal, State,or local level that encourage or impair capacitydevelopment. Bill Jarocki provided a matrix


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relating to this item and requested each AdvisoryGroup member to provide information in thetables before the next meeting.

February 17, 1999

The Advisory Group reviewed their previouswork on Section 1420(c)(2)(A), the methods thatthe State will use to identify and prioritize thepublic water systems most in need of improvingTFM capacity. The model was revised to includethe category “Minor Problem” in addition toCritical, Serious, and Potential Problems. Minorproblems would be classified as sporadic or one-time exceedances of a health based standard orlack of contaminant monitoring. “LegalEnforcement Action” was changed to“Enforcement Action,” and the definition wasrevised to include monitoring violations andpublic notification procedures since these areenforceable. The flow chart is still a workingmodel, and changes can be made in the future ifneeded. The Advisory Group then moved on toSection 1420(c)(2)(B), a description of theinstitutional, regulatory, financial, tax, or legalfactors at the Federal, State, or local level thatencourage or impair capacity development. Eachmember shared the impairment/enhancementfactors that he or she had identified since theprevious meeting. Factors that impair or enhancecapacity development at the Federal and Statelevel were compiled into a comprehensive list.There was insufficient time to address the localfactors.

March 17, 1999

The Advisory Group completed its work onSection 1420(c)(2)(B), identifying institutional,regulatory, financial, tax, or legal factors at thelocal level that encourage or impair capacitydevelopment. The Advisory Group then wentthrough each set of summary sheets regardingfactors that enhance or impair capacity at theFederal, State, and local levels and decided as anAdvisory Group those factors that should beincluded in the Strategy. Bill Jarocki committed towriting a narrative description of each of theselected factors. The original timeline was revisedas follows:

• May, 1999 – Section 1420(c)(2)(C)

• July, 1999 – Advisory Group Review of DraftReport of Findings

• September, 1999 – Public Review of DraftReport of Findings

• October/November, 1999 – Final AdvisoryGroup Report of Findings to IDNRManagement

• February/March, 2000 – IDNRImplementation Plan

• April, 2000 – Final Public Review of Strategy

• May/June, 2000 – Submit Strategy to US EPA

• August 6, 2000 – Statutory Deadline

Bill Jarocki was chosen to develop a descriptionfor how the State will establish a baseline andmeasure improvements in capacity with respect tonational primary drinking water regulations andState drinking water law – Section 1420(c)(2)(D)of SDWA.

May 5, 1999

The Advisory Group continued its discussion ofSection 1420(c)(2)(B), the institutional, regulatory,financial, tax, or legal factors at the Federal, State,or local level that encourage or impair capacitydevelopment. From a list of factors compiledduring previous meetings, Advisory Groupmembers determined which factors should beaddressed specifically in the Strategy. TheAdvisory Group than began a discussion ofSection 1420(c)(2)(C), a description of how theState will use the authorities and resources of theSDWA or other means to assist public watersystems in compliance efforts, encouragepartnerships between suppliers to enhance theTFM viability of the systems, and assist supplies inthe training and certification of operators. TheAdvisory Group began discussing thedevelopment of ideas for programs to address theimpairments and enhancements identified inSection 1420(c)(2)(B).


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June 4, 1999

The Advisory Group continued its discussion of1420(c)(2)(C), identifying programs that will beused to assist systems in complying with nationalprimary drinking water regulations, encourage thedevelopment of partnerships between public watersystems, and assist systems in the training andcertification of operators. The Advisory Groupdetermined eight areas for discussion: 1) TFMScorecard, 2) Improve information to operatorson rules/regulations, 3) US EPA and IDNR issueConsumer Confidence Reports to systems, 4)Lack of inter-/intra-departmentalcommunications, 5) Educate the public, 6)Encourage partnerships, 7) Money for capitalprojects, and 8) FTE/Agency resources. Thediscussion closed with the question of how to getthe Report of Findings to the public.

August 25, 1999

The Advisory Group discussed section1420(c)(2)(E), public involvement initiatives topresent the information to the public at large. TheDraft Report of Findings was discussed in great detail.

Iowa Report of FindingsAppendix B

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APPENDIX B: INTRADEPARTMENTAL IMPAIRMENTS TO TFMCAPACITY

Central Office [A]

Field Offices [B]

Iowa Report of FindingsAppendix B

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The Advisory Group identified two importantinstitutional issues as probable impairments to theTFM capabilities of public water systems.

1. The first issue is the need to improve theworking relationships between the threeoperational units within the Water QualityBureau. One reason is that each of the unitshas a role in some aspect of drinking waterprotection. Another is that field office staff isresponsible for serving one or more of thesections. Implementation of a TFM strategydepends upon good working relationshipsbetween the sections and a completeunderstanding of each unit’s role in improvingcapacity of systems.

2. The second issue concerns the organizationalrelationship between the Water SupplySection [A] and the Field Offices [B]. Fieldoffice personnel who are responsible forcertain PWS oversight report directly to FieldOffice supervisors, not the supervisor of theWater Supply Section. In addition, the fieldoffice staff has other environmentalprotection functions that could supercedeTFM Strategy goals and objectives. Thiscould lead to uneven implementation of thestrategy within the State as the field officesdeal with periodic competing demands forstaff services

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Documents

REPORT OF FINDINGS - Iowa Department of Natural Resources