| A
Guide to Carrying Out |
| Water
Supply/Wastewater |
| Service
Negotiations |
Prepared
By
Georgia
Water Management Campaign
A
Collaborative Effort of the Association County Commissioners of Georgia,
Georgia Environmental Protection Division, Georgia Environmental Facilities
Authority, and Georgia Municipal Association
September
1998
Acknowledgments
This report was prepared by the Carl Vinson Institute of
Government, The University of Georgia, for the Georgia Water Management
Campaign to assist local government officials negotiate their water supply
and wastewater services required by the Georgia Service Delivery Strategy
Act of 1997. Authors of the report are Dr. Jim Kundell, Deanna Ruffer,
Terry DeMeo, and Frank Sherrill. Assisting the authors was an advisory
committee composed of state agency personnel, staff from regional development
lefts, and city and county officials who generously gave of their time
to ensure that this document was accurate and would be helpful to local
officials across the state. Members of the advisory committee include
the following.
| Mr.
Al Crace |
Mr. Nap Caldwell |
| Athens-Clarke
County Manager |
EPD Water Resources
Management |
| |
|
| Mr.
Billy Edwards |
Mr. Joe Pritchard |
| City
Manager - Hinesville |
Ware County Manager |
| |
|
| Honorable
W. Al Gainey, Jr. |
Mr. Paul Bryan |
| Hall
County Chairman |
Screven County
Manager |
| |
|
| Ms.
Lisa Hollingsworth |
Mr. John Bennett |
| Chattahoochee-Flint
RDC |
City Manager -
Rome |
| |
|
| Ms.
Linda Kuller |
Mr. Mike Gleaton |
| Southwest
Georgia RDC |
DCA |
| |
|
| Honorable
Billy Trapnell |
Mr. Harry Hayes |
| Mayor
- City of Metter |
Carl Vinson Institute
of Government |
| |
|
| Mr.
Al Outland |
Mr. Bill Thornton |
| Georgia
Municipal Association |
Georgia Municipal
Association |
| |
|
| Mr.
Mork Winn |
Mr. Jim Grubiak |
| EPD
Water Resources Management |
ACCG |
| |
|
|
|
| Mr. Ed
Urheim |
| EPD Drinking
Water Program |
|
CONTENTS
INTRODUCTION
1
The
Service Delivery Strategy Act: House Bill 489
The
Service Delivery Strategy Act and Growth
CURRENT
AND FUTURE WATER SUPPLY
AND
WASTEWATER SERVICES
WHAT
Water-Related Services Are Currently Provided and Which
Ones
Will Be Provided in the Future?
WHERE
Are Water-Related Services Provided and Where Will
They
Be Provided in the Future?
HOW
Are Water-Related Services Provided and How Will They
Be
Provided in the Future?
HOW
Are Water-Related Services Financed and How Will They
Be
Financed in the Future?
ALTERNATIVE
SERVICE DELIVERY CONSIDERATIONS
Managerial
Capacity
Technical
Capacity
Financial
Capacity
STATE
AND FEDERAL POLICIES AND PROGRAMS INFLUENCING
WATER
SUPPLY/WASTEWATER DELIVERY STRATEGIES
Safe
Drinking Water Act
Clean
Water Act
EPD’s
Water Withdrawal Permit Program
Georgia
Planning Act Part V Requirements
Development
of Regional Reservoirs
MOVING
TOWARD COMPREHENSIVE
WATER
RESOURCES MANAGEMENT
APPENDICES
A.
Information Sources and Resources
B.
Capacity Development Key Questions
REFERENCES
BOXES
1.
Water Supply Components
2.
Wastewater Collection and Treatment Components
3.
Stormwater Management Components
EXHIBITS
1.
Incorporation of Private Systems [City of Toccoa Case Study Excerpt]
2.
Wholesale Authority [Cobb County-Marietta Water Authority Case Study Excerpt]
3.
Multijurisdiction Water System, Jointly Owned and Operated [City of Thomson
- McDuffie County Case Study Excerpt]
4.
Contracted O&M System [City of Hinesville Case Study Excerpt]
5.
Satellite Water Supply/Wastewater Treatment Systems [City of Savannah
Case Study Excerpt]
6.
Intergovernmental Watershed Protection Study [Big Haynes Creek Case Study
Excerpt]
INTRODUCTION
Water-related services are among the dozens of services that city and
county officials are to negotiate under the Service Delivery Strategy
Act. This guide is designed to help local officials in these negotiations
by discussing policy-level options relative to water supply/wastewater
service delivery strategies. In the context of this guide, the phrase
water supply/wastewater service is intended to include all of those service
components that draw on or impact water resources. These include the sources
used for water supply and the water production and distribution system,
as well as the wastewater collection and treatment infrastructure and
operations, and the management of stormwater. Since water-related services
are only one of many types of services that may be negotiated under the
Service Delivery Strategy Act, they must be viewed in the context of the
overall services provided by the county and cities.
There are many challenges associated with providing a clean, safe water
supply. Water quantity and water quality are now inextricably interwoven;
decisions affecting one affect the other. In addition, implementing both
existing and anticipated state and federal regulations will demand significant
financial resources, as well as a wide variety of technical expertise
and management skills. Determining the most effective way to ensure financial,
technical, and managerial capacity to carry out water supply/wastewater
service delivery should be a major factor of the service delivery negotiations.
Even if no water supply/wastewater services have to be modified, this
guide can be useful to local decision makers. It provides an overview
of delivery and funding strategies and briefly describes how some of these
options have been implemented in Georgia through selected case studies.
Evaluating water-related service options can be an opportunity to explore
alternatives which may result in better coordination, efficiency, and
improved water supply/wastewater services to citizens.
The water-related services negotiated at this time may only be the starting
point in an effort to meet changing water-related needs in the future.
This guide introduces some of the challenges and forces influencing future
water supply/wastewater service decisions. Comprehensive water resource
management planning is critical for determining the future of the community.
The
Service Delivery Strategy Act: House Bill 489
The Service Delivery Strategy Act requires local elected officials in
each county and the cities within the county to develop and to adopt a
Service Delivery Strategy by July 1, 1999. The locally developed strategy
is intended to be a plan of action to minimize service duplication, overlap,
and competition. The strategy will define service delivery responsibilities
and funding sources among the various local governments and authorities
in each county. Strategies must also eliminate conflicts between city
and county land-use plans and ensure that water and sewer extensions are
consistent with local land-use plans. This includes establishing responsibility
for delivery of current and anticipated water, fire, police, and emergency
management services, among others. The strategies adopted for water provision
will affect the day-to-day operation of the water utility system, the
future management of the water resources available to the community, and
the future viability of the community itself.
This document does not attempt to explain the Service Delivery Strategy
Act requirements in-depth, nor does it provide guidance on the process
to be used to develop a service delivery strategy. Documents to assist
local governments in these areas were developed as a joint effort of the
Association County Commissioners of Georgia, Georgia Municipal Association,
Georgia Department of Community Affairs and Carl Vinson Institute of Government,
The University of Georgia. These are: Charting a Course for Cooperation
and Collaboration, An Introduction to the Service Delivery Strategy Act
for Local Governments and HB 489 Information Bulletin #1, Drafting
a Service Delivery Strategy: Getting Started -- Some Ideas and Suggestions.
Policy makers are encouraged to refer to these documents for information
on these topics. In addition, a list of information sources is included
in Appendix A.
The
Service Delivery Strategy Act and Growth
Some local governments will find developing water supply/wastewater service
delivery strategies more complex than others. The nature of growth and
development occurring at the local level will affect the type and degree
of changes required for water supply/wastewater services delivery. Areas
experiencing no growth or population declines, for instance, may find
that continuing current operational practices is sufficient. Areas undergoing
expanding growth and development, however, may want to consider immediate
and future needs and how these needs differ from current services.
Rapidly developing counties exhibit the highest rates of population growth.
Fifty-five counties, the 16 largest counties in the state together with
the 39 most rapidly growing counties, currently contain three-quarters
of the state's total population. Over the past 25 years, the population
of the 16 largest counties increased by 51 percent while that of the 39
rapid-growth increased by 138 percent. Together, these gains accounted
for about 90 percent of all population growth in the state. It is estimated
that these trends will continue. By 2010, these 55 counties alone are
projected to have a combined population in excess of 6.7 million people,
more than Georgia's total population in 1990.
Growing numbers of citizens means an increasing demand for water supply/wastewater
services. In these localities, service needs and/or delivery arrangements
will not be static and development of new or additional water supply/wastewater
services must be anticipated to meet future demand. If current capabilities
will not meet the anticipated service demand, local governments may want
to determine alternative mechanisms for providing, either by itself or
in cooperation with other jurisdictions, expanded water-related services.
Policy makers in rapidly developing areas may want to respond to the current
and anticipated increases in service delivery responsibilities by changing
operational practices and envisioning new financing sources for both capital
and operation and maintenance requirements.
There are three general situations that will bear significantly on local
governments’ water-related service delivery.
- Situation
1: Neither the county nor the cities within the county provide
water-related services and there is no need for the county or cities
to consider providing these services in the near future.
- Situation
2: Water-related services are provided by the county and/or the
cities. Both the county and the cities are satisfied with the current
relationship and satisfied that the current arrangement will meet
future needs.
- Situation
3: There is potential for duplication or a void in water-related
services, or there is an identified need for expansion of one or more
water-related services, or a need to designate water-related service
areas for different governments or geographic areas to avoid disputes
and unnecessary competition.
In situations one and two, city and county officials may be comfortable
with the current level of services and, as a result, the service delivery
strategy document may simply describe the existing situation and state
the jurisdictions’ satisfaction with the current service delivery
arrangements. If situation three describes the state of service delivery
facing a county and the cities, however, changes will likely be required.
Consequently, negotiations will need to focus on what service(s) might
change, who will provide the service, where it will be provided, and how
that service will be paid for.
CURRENT
AND FUTURE WATER SUPPLY / WASTEWATER SERVICES
WHAT
Water-Related Services Are Currently Provided and Which Ones Will Be Provided
in the Future?
Under the Service Delivery Strategy Act, counties and cities are to inventory
the services that they currently provide and to identify those services
that will be needed in the future. Assessing the current water-related
service arrangements by describing how services have been provided to
date may be a good starting point in discussing strategies for future
levels of operation.
Water utilities can encompass entire water supply/wastewater service systems
that are made up of discrete service components. These water-related service
components include water supply, treatment, and distribution; wastewater
collection, treatment, and discharge; and stormwater management activities.
The components may be provided by a single government or authority or
they may be provided by different jurisdictions or the private sector.
Considering water provision in terms of service components provides policy
makers with the flexibility to negotiate the most economic and efficient
delivery strategies for each service component.
Boxes 1 -3 provide a breakdown of the components of a water supply, wastewater,
and stormwater management systems. These Boxes can serve as a checklist
of water supply/wastewater services that may be discussed during the negotiation
process.
Box
1. Water Supply Components
| Water
Supply - Current |
| Groundwater |
|
|
|
|
| Surface
Water |
|
|
|
|
|
|
| Conservation
Measures |
| Water
Supply - Future |
| Countywide
Water Supply Plan |
| Groundwater |
|
|
|
|
| Surface
Water |
|
|
|
|
|
|
| Conservation
Measures |
| Water
Supply/Withdrawal Permits |
| Withdrawal
Permit |
| Operational
Permit (Safe Drinking Water) |
| Water
Withdrawal Treatment |
| Intake/Collection
Infrastructure |
|
|
- Surface
Water Intake Structure
|
| Current
Treatment Capacity |
| Potential
Treatment Capacity |
| Water
Delivery/Distribution System |
| Current
Service Provision |
| Potential
Expansion of Service Provision |
| Storage
Capacity |
| Fire
Suppression Distribution |
- ISO
Rating (Insurance Service Office)
|
Most likely, not all of the service components shown in
Boxes 1 - 3 will be under negotiation in the service delivery discussions.
Which services will be negotiated depends largely on the specific situation
facing the county and the cities within the county. To assist policy makers
in these negotiations, it might be helpful to create a technical advisory
committee of employees who have a working knowledge of the components
of the water supply and wastewater systems.
Box
2. Wastewater Collection & Treatment Components
| Sewage
Collection |
| Current
Service Provision |
| Potential
Expansion of Service Provision |
| Infiltration/Inflow |
| Sewer
Systems Overflows |
| Sewage
Treatment |
| Industrial
Pretreatment Program |
| Facility
Capacity |
|
|
|
|
| Discharge
Permit |
| Land
Application System Facility |
| Industrial
Pretreatment Program |
| Facility
Capacity |
|
|
|
|
| Storage
Facility |
| Spray
Fields (acreage) |
|
|
| Land
Application System Permit |
| Sludge
System |
| Facility
Capacity |
| Agriculture
Permits |
| Sludge
Only Permits |
Box
3. Stormwater Management Components
| Watershed
Management |
| Assessment |
| Plan |
| Monitoring/Enforcement
Activities |
| Erosion
& Sedimentation Control |
| Plan/Ordinance
Adopted |
| Permitting
Process |
| Monitoring/Enforcement
Activities |
| Stormwater
Permit |
| Currently
Required |
| Permitting
Process |
| Monitoring/Enforcement
Activities |
| Required
in Future |
| Current
Stormwater Collection |
| Built
Service System |
|
|
|
|
|
|
|
|
| Natural
Service System |
|
|
|
|
|
|
| Landuse
Practices |
| Potential
Expansion of Stormwater Collection |
| Built
Service System |
| Natural
Service System |
| Landuse
Practices |
In
addition, the service delivery strategy discussions can be guided by considering
the:
-
current
status of the water supply/wastewater infrastructure and services;
-
who
the responsible jurisdiction is for the infrastructure and services;
-
where
the infrastructure is located or the services are provided;
-
how
the service and capital costs are financed;
-
alternatives
to the current situation; and
-
strategies
for the future
Not all of these factors can be applied to all of the components of the
water supply, wastewater, and stormwater management systems appearing
in Boxes 1 - 3. However, it may be helpful to consider them for all applicable
components before entering into detailed negotiations.
At the same time that current services provided by the local governments
are being inventoried, it may also be beneficial to inventory the existing
privately owned water supply/wastewater systems. This should include defining
where these privately owned systems are located, who owns and operates
the systems, and the customer base served.
As of January 1, 1998, several new rules became effective concerning the
permitting of new privately owned water supply systems. These new rules
provide an opportunity for cities and counties to work together to avoid
duplication of services. The rules also discourage the development of
small systems in situations that may be better served by a large regional
system and/or expansion of an existing publicly owned system. To comply
with a new regulation, the private owners of a proposed community water
supply system must approach the local government in which the system will
be located in order to obtain a written certificate of concurrence.
Local governments with publicly owned water supply/wastewater systems
are likely to be in the best position to evaluate the technical, financial,
and managerial capability of proposed private systems and assess the compatibility
of the proposed system with future plans for the provision of government-owned
or government-controlled water supply/wastewater services. A local government
that does not currently own or operate a community water supply/wastewater
system may find it advantageous to either work with or refer the private
developer to an adjacent local government that does own a community water
supply/wastewater system. In this case, although the proposed system is
not within its jurisdiction, the needed service might be provided by the
adjacent local government, thus eliminating the development of a new system.
WHERE Are Water-Related Services
Provided and Where Will They Be Provided in the Future?
Delineating current and future water supply/wastewater service areas involves
policy considerations aimed at eliminating service duplication and establishing
areas of future development based on local government plans. Strategy
discussions offer opportunities to guide development toward service areas
that require the least investment in infrastructure, bring the greatest
economic return, and protect or enhance natural and cultural resources.
Delineating service territories should be linked to the local comprehensive
plan and must be supported by compatible future land-use plans. In addition,
regional entities, private sector service providers, and the Environmental
Protection Division (EPD) have a role in decisions about the water-related
service system. An agreement among all relevant public and private partners
regarding where services will be provided can be in the form of a memorandum
of understanding or a joint resolution. Relevant agreements must be listed
on the Service Delivery Strategy forms.
While the Service Delivery Strategy Act focuses on services provided by
cities and counties, as suggested earlier, when inventorying services
local governments might benefit from identifying those areas that are
served by privately owned water supply/wastewater systems and then assessing
whether or not the governments intend to continue to rely on private systems
in the future. In some instances, the planned expansion of a local public
water supply/wastewater system could result in the need to transfer ownership
of existing privately owned systems to the local government when tie-in
becomes feasible. In others, it may be beneficial for one governmental
entity to seek input from another governmental entity prior to concurring
with the proposed development of a privately owned system. Planning for
these types of arrangements can be a valuable part of the process of developing
the Service Delivery Strategy.
Exhibit
1. Incorporation of Private Systems
In 1986, the City of Toccoa and Stephens County began a cooperative ten-year
program to extend water supply distribution lines to unincorporated areas
of the county. By the middle of 1998 as the city and county approach the
end of the contractual program, which has cost approximately $20 million,
about 98% of the county citizens have received access to water supply
services. Although the county has been responsible for the SPLOST funding
and locating the placement of distribution lines, the city owns the water
supply system and provides service to the county. This arrangement was
based on the city’s access to adequate water sources, its ownership
of an existing system that could be expanded, and its managerial and technical
capabilities to manage the water supply service.
Over the course of the project, water lines were run to three private
water supply systems resulting in the incorporation of two of the systems.
The city consolidated the service area of a failing private system when
the owner/operator died. Another owner/operator voluntarily closed a second
private system and the service area united with the city when water lines
provided a higher level of customer service including fire protection.
The third private system is still operating with parallel private and
city lines in the service area.
As a result of county-wide water supply service, the county and city have
realized tremendous economic development opportunities. The City of Toccoa
has been able to attract sixteen sizable industries some of which are
located outside its jurisdiction. In addition, fire protection capability
has been increased county-wide. Benefits of the county-wide water supply
service include reduced fire insurance rates in some areas and enhanced
quality of life for the citizens of the City of Toccoa and Stephens County.
[City
of Toccoa contact: Mr. Bill DeFoor, 706/282-3311]
HOW
Are Water-Related Services Provided and How Will They Be Provided
in the Future?
Water supply/wastewater service components may be provided as a package
by one local government or authority, or individually by different jurisdictions,
authorities, or private interests. In addressing who provides water supply/wastewater
services, each local government will face a policy decision as to what
extent, if at all, it will enter or remain in the water utility business.
The Service Delivery Strategy process is not intended to encourage or
discourage local governments to enter into the water utility business.
However, it does encourage governments to select a service provider with
the managerial, technical, and financial capabilities to carry out the
water supply/wastewater service responsibilities.
Local governments exploring alternatives to public ownership should consider
factors such as who can provide quality service, who should be held accountable
for that service, and at what cost the service can be provided. There
are some additional important considerations when selecting a service
provider. One is a prospective provider’s history of compliance with
the law in regard to seeking and holding permits. Another is a requirement
of the Service Delivery Strategy Act that the provider of water supply/
wastewater service to another jurisdiction must coordinate services with
that jurisdiction’s local comprehensive plan, land-use plan, and
existing ordinances, regulations, and other land-use controls.
Exhibit
2. Wholesale Authority
The Cobb County-Marietta Water Authority (Authority) is a public utility
providing drinking water on a wholesale basis. The Authority was formed
by an Act of the General Assembly in 1951, later becoming the first multi-source
water system in the State. It has no taxing power and no legal right to
obtain appropriations from any governmental body. It is governed by a
seven member Board that appoints a General Manager to run the day to day
operations.
The Authority has entered into long-term (usually 50-year) contracts to
supply treated water under pressure at wholesale rates to thirteen retail
customers for distribution through their water systems. Customers include:
Cobb, Cherokee, and Paulding counties; Marietta, Austell, Kennesaw, Powder
Springs, Smyrna, Mountain Park, and Woodstock municipalities; the Douglasville/Douglas
County Water and Sewer Authority; the Lockheed Corporation; and the Southern
College of Technology.
The early decision to take water service provision out of ‘city hall’
and place it in an independent organization has been key to the success
of the Authority. The simplicity of the Authority, in particular the make-up
of the seven member Board, has also contributed to its success. The Board
is comprised of the Chairman of the Cobb County Board of Commissioners,
one member selected by the City of Marietta, and four members (residents
of Cobb County) selected by a caucus of legislators whose districts are
wholly or partially within Cobb County. Five retail customers follow a
formula to select the remaining member on a rotating basis. The Board
is politically responsible and responsive to the local governments but
has enough distance to be visionary. This unique structure has allowed
the Authority to become renown, winning the EPA Region IV 1996 Safe Drinking
Water Act Excellence Award for Public Water Supply.
[Cobb
County-Marietta Water Authority contact: Mr. A. Roy Fowler, 770/426-8788]
HOW
Are Water-Related Services Financed and How Will They Be Financed
in the Future?
Some state funding, such as water and sewer loans, is available to creditworthy
local governments and authorities to implement portions of a service delivery
strategy. Revenue bonds, grants, state revolving loan program funds and
other Georgia Environmental Facilities Authority (GEFA) loan program funds,
a special-purpose local option sales tax, and special-service district
fees have been used also to pay for capital costs of new facilities. Policy
makers, however, should take into account that the Service Delivery Strategy
Act does not provide general state funds for service delivery strategy
implementation. It would be prudent, therefore, to select a service provider,
either a local government or other entity, that is self-sufficient and
can take responsibility for funding capital and operating costs.
Although rates and related financial issues can be complex, information
on rate structures and various types of funding mechanisms can help policy
makers during their strategy discussions on how services will be financed.
It is generally accepted that the rate structures should cover operating
costs and repayment of capital costs, thus allowing the service to be
operated as a financially independent and self-sustaining entity. If discussions
include assumptions about future water supply/wastewater service needs,
the rate structure(s) and service delivery strategy should reflect those
assumptions.
The Service Delivery Strategy Act requires that water and sewer rates
not be arbitrarily or unreasonably different among the locations served.
Local governments charging different water and sewer rates to customers
outside their boundaries than they charge customers within, must be able
to justify the reason for such differentials. For instance, a differential
rate structure might be based on a wide variance in the density of users
within the service districts. Another justification might be the decision
to link hook-up, line extension, and other charges to the real costs of
providing the service rather than averaging costs system-wide. Looking
at the entire water supply/wastewater system and considering what rate
structure(s) would cover the cost of operating the utility as a business
is another approach to be considered. Ultimately, the objective is to
have a rate structure that is equitable and meets operating costs and
debt service.
ALTERNATIVE
SERVICE DELIVERY CONSIDERATIONS
In identifying alternatives for service delivery, policy makers can first
consider who is currently in the business and who has demonstrated the
managerial, technical, and financial capability to provide safe and reliable
water supply/wastewater service. Combining resources with other water
providers might benefit both systems. A local government might discover,
however, that additional information will be necessary in order to make
a decision on how to best achieve some of the service components. In such
case, the need for an outside study or the development of a comprehensive
water resource management plan could be listed as a strategy in the service
delivery document.
Service delivery alternatives can be divided into three categories: (1)
managerial structures, (2) technical/operational arrangements, and (3)
financial arrangements. Together, managerial, technical, and financial
capabilities can optimize provision of high quality, cost-effective water
supply/wastewater services; ensure proper and responsible management;
and increase the ability of the local jurisdiction(s) to remain in compliance
with regulations.
Exhibit
3. Multijurisdictional Water System, Jointly Owned and Operated
A multijurisdiction water supply and wastewater system, jointly owned
and operated by the City of Thomson and McDuffie County, was formed in
1990 through adoption of a fifty-year contract. The drought of the 1980s
raised alarm over access to adequate water supplies as many private wells
began to go dry and the City of Thomson’s water supply, Usry’s
Pond, was at half capacity. The city and county combined resources in
a joint strategy to acquire additional sources of potable water, expand
water services to the county and establish financing that would prevent
long-term debt. A joint Water Commission was established to guide the
development of the multijurisdiction system’s infrastructure and
expanding water services.
A Commission which is advisory to the elected bodies was selected rather
than an Authority to maintain local governmental control. Composition
of the Commission includes: the Mayor and a Councilman from the City of
Thomson; the Chairman and a Commissioner from McDuffie County; the Mayor
of Dearing; and two citizens, one selected by the city and one by the
county.
The City of Thomson has managerial oversight of operation and maintenance
to maximize the efficiency of a single department providing this service
and to take advantage of its existing managerial and operational capabilities.
The initial contractual arrangements required that the rate differential
in the county and the city be levelized. Since 1990, the water rates have
twice increased to residents of the city while remaining the same in the
county; one more increase will equalize rates to all customers.
The establishment of the multijurisdiction water supply/wastewater system
and the expansion of services county-wide has occurred. The success of
the joint system has been based on the personal commitment of the elected
officials to remain dedicated and determined to serve the collective needs
of their constituents.
[City
of Thomson contact: Mr. Dewayne Patrick, 706/595-1781. McDuffie County
contact: Ms. Joyce Blevins, 706/595-2100]
The 1996 Amendments to the Safe Drinking Water Act (SDWA) place strong
emphasis on the technical, financial and managerial capability of water
supply systems. Enhancing and ensuring the capabilities of a water system
is widely believed to be fundamental to ensuring that system’s ability
to provide reliable safe drinking water. Appendix B lists key questions
local policy makers can use to assess the managerial, technical, and financial
capacity development of potential service providers.
Managerial
Capacity
Managerial capacity involves the personnel expertise required to administer
overall water supply/wastewater system operations. It includes clear ownership,
directorship, and accountability; capable personnel and adequate personnel
policies; understanding of regulations, rules, ordinances, and professional
practices; customer responsiveness and outreach; contingency planning
and insurance; and appropriate management information systems. For more
information on key managerial capacity considerations, see Appendix B.
The previously mentioned publication, Charting a Course for Cooperation
and Collaboration, provides examples of managerial structures that
can be considered as service provider options. They are presented as alternatives
to a local government acting as sole service provider, although in many
cases that will be the selected option.
- Create
a service jointly owned and operated by the county and city governments.
- Contract
with another government or a private entity for the delivery of the
service but maintain the ultimate responsibility for providing the
service.
- Turn
over responsibility for providing the service to one government in
the county: either a city or the county.
- Create
a countywide, intergovernmental, or regional water authority or commission
to deliver services.
One managerial tool used by many water supply/wastewater systems is a
business plan. A water supply/wastewater system business plan is a comprehensive
and forward looking document, which attempts to capture the true cost
of building and operating the system and projects costs and revenues over
time. Local officials can use the business plan to obtain a comprehensive
review of the condition of the system, including the physical condition
of the system’s water source, infrastructure and operations as well
as the managerial and financial condition of the system. Because it is
a forward-looking document it can also be a useful tool when evaluating
and planning for future service delivery arrangements.
Consideration of the above options may include an evaluation of the ‘privatization’
of water supply/wastewater services. Frequently, the term refers to a
number of different arrangements, some of which are an administrative
compact under which the government shifts some of its responsibilities
to a private entity. For example, the term ‘privatization’ has
been used to describe: (1) systems which are privately owned; (2) publicly
owned systems which are operated by a private entity under contract to
the governmental owner; and (3) special-purpose governmental institutions,
such as authorities and commissions, which are independently operated
through contractual arrangements with one or more local governments. In
actuality, only the first is true privatization. The second and third
are more accurately referred to as contract services and consolidation
or regionalization, both of which are discussed below in more detail under
Technical Capacity.
Although privatization can be a valuable means of management, it is by
no means the only approach. The decision to privatize or contract for
services depends heavily on the needs of the community and the types of
services to be considered. In some cases it is the most logical approach;
in others it is inappropriate. The key is understanding needs, evaluating
needs against current and future capabilities, and developing a strategy
to meet needs in a manner that protects public health, safety and welfare.
Most importantly, privatization or contracting for services does not eliminate
the local government’s responsibility. Although private involvement
can help carry out a service, the ultimate responsibility for the public
health, safety, and welfare of a community remains in the hands of its
local government. Even if the local government develops a relationship
where all services are handled privately, it must, at a minimum, ensure
that the services are being provided to meet the needs of the community.
Technical
Capacity
Technical capacity refers to the ability of a water supply/wastewater
system to operate and maintain its infrastructure now and in the future.
Technical capacity involves the existence and maintenance of appropriate
infrastructure and technologies; compliance with all applicable standards
and codes including consistency with professional standards, emergency
equipment, reliable and quality water source(s); and awareness of quality/quantity
linkages. For more information on key technical capacity considerations,
see Appendix B.
The following represent some of the technical options policy makers can
consider. All of these examples increase economies of scale and access
to technical expertise but vary in availability and degree of local control.
In addition, there are certification requirements for water supply and
wastewater facility operators and laboratory personnel in order to meet
quality assurance standards.
-
Operation
and Maintenance (O & M) Contract: This option, also called
turnkey operation or a service contract, allows a private company
or a large water system in another jurisdiction to provide operation
and maintenance services under contract. For example, a local government
contracts with another government or private entity for the delivery
of the service but maintains the ultimate responsibility (and liability)
for providing the service. This option allows continued local control
and flexibility of service while potentially increasing economies
of scale and technical expertise. The O & M service may not
be available everywhere and, in itself, it cannot remedy water system
problems.
Exhibit
4. Contracted O&M System
The City of Hinesville has entered into an operation and maintenance (O&M)
contract with a private firm, OMI, to operate the city owned water supply/wastewater
treatment facilities. In 1984, the city found it lacked technical expertise
in-house to operate a new regional wastewater treatment facility and furthermore
discovered it would be less costly to contract services with a reputable
firm. The city engaged in a process that estimated the cost of services
and selected a contract operator that could partner with the local government
to provide service at a competitive rate. In 1992, the scope of the O&M
contract was expanded to include all of the city’s public works functions
including public safety services such as drinking water supply and highly
visible services like street cleaning and mosquito spraying.
The City of Hinesville developed a budget establishing an operations and
management baseline for the regional wastewater facility. The city used
its projected budget and a set of criteria to screen O&M contract
operator proposals. Although OMI was not the lowest bidder, the city entered
an agreement with the firm in August 1984 to operate the regional wastewater
facility and master pumping station. The selection criteria included a
firm with a large number of employees that could provide an extensive
expertise base, a firm with long-standing relationships under other contracts,
and an estimated cost that was less expensive than the city’s projected
budget.
In 1992 when the scope of contracted services was expanded to incorporate
all of the city’s public works including its water supply service
and the balance of its wastewater collection and transportation operations,
OMI was again selected based on the established relationship of mutual
respect and trust. In the first 12 months of the public works contract,
the city realized a $125,000 savings over its 1992 baseline budget. The
City of Hinesville has received high levels service, expertise, and financial
management through an O&M contract operator service provision strategy.
[City
of Hinesville contact: Mr. Billy Edwards, 912/876-3564]
-
Satellite
Management or Shared Services: The satellite management option
is a form of the O & M contract in which the contractor is the
owner/operator of a large neighboring water or wastewater system
that takes over management, and perhaps ownership, of a small system,
but the systems are not physically connected. A satellite water
system functions independently but benefits from the managerial,
technical, and financial capability of the larger utility. Shared
services may consist of buying water wholesale from a larger system,
pumping into the local government's distribution system and selling
to jurisdictional customers. Shared services may also involve physically
hooking up to the large neighboring system and buying water and
system management from it. Wastewater collection systems may also
be connected with treatment occurring at the other jurisdiction’s
wastewater treatment facility. In addition, a water supply/wastewater
service could be created that is jointly owned and operated by the
county and city governments; or groups of small systems could buy
and share specific services in a cooperative arrangement. An example
of this option would be several small systems sharing one certified
operator. These options allow for local control and provide flexibility
of service.
Exhibit
5. Satellite Water Supply/Wastewater Treatment Systems
Since the 1960s, the City of Savannah, at the request of private developers,
has been purchasing private water supply systems. It is now the primary
purveyor of water supply and wastewater services in Chatham County. Six
of the eight systems it owns and operates are satellite systems, located
outside its municipal boundaries, which operate completely isolated from
and physically unattached to the city’s main system. As with its
two water systems, the city is responsible for the maintenance and upgrade
of the satellite systems to meet existing and future water supply needs.
In-depth financial analyses were undertaken prior to the acquisition of
the satellite systems. Each potential satellite system was examined to
compare the quality of the built system to specifications, to determine
its capacity and possible system neglect, to evaluate the cost of upgrades
and maintenance, and to determine the possibility of system expansion.
The consolidation of satellite systems under one jurisdiction that has
efficient operational and technical capabilities and the financial wherewithal
to expand services has increased the assurance of safe drinking water
and the level of service to the citizens of Chatham County.
[City
of Savannah contact: Mr. Harry Jue, 912/651-4241]
-
Consolidation
or Regionalization: This option describes the merger or purchase
of small systems to a large system. The connection to the large
service provider could be either physical or not, but the responsibility
for providing the service would be turned over to one government
in the county: either a city or the county. Regionalization is the
merger and connection of small systems to a large public water supply
or wastewater system on a regional scale in which a countywide,
multicounty or multijurisdictional authority or entity is created
to deliver services. This option could help solve systemwide problems
and increase access to capital, including eligibility for public
funding. However, the development of an interlocal agreement or
formation of a regional public system may be complex and lengthy.
Furthermore, there may be financial issues to be addressed, such
as a restriction of existing franchise or service areas and inadequate
compensation for acquisitions.
Financial
Capacity
Financial capacity refers to the monetary resources that support the water
supply/wastewater system. Elements of financial capacity include the ability
to meet current and future capital and operating cost needs; rates and
revenues; bonds, guarantees, and assurances; depreciation expenses and
reserves; financial ratios and ratings, credit record, and access to credit;
and financial books and records. For more information on key financial
capacity considerations, see Appendix B.
Selecting an appropriate financial option, along with establishing efficient
managerial and technical arrangements, can lead to creative resolution
of some of the complexities of water supply/wastewater service delivery.
The following are meant to represent some, but not all, of the financial
options local policy makers may want to consider.
-
Local
System Improvement Contract: In this option, the local government
enters into a contract with a private company or large water system
for specific system improvement services such as equipment maintenance
and repair, material purchasing, or water quality monitoring. This
option allows for complete and continued local control of water
provision services but must be funded through local revenues such
as general obligation or water revenue bonds.
-
Operation
and Maintenance Contract with Financing: This option is a variation
of the above but includes contracting costs for installation of
the system or for working capital for operations. Although this
alternative increases access to capital and can solve more severe
water system problems, it allows for limited local control and the
availability and cost of these services may vary considerably by
location.
-
Private
Takeover or Acquisitions: This option is a variation of public
merger or regionalization but may be driven by an emphasis on financial
considerations. It involves ownership and management by a privately
owned, profit-making entity. Benefits include a reduction in the
size of the regulated community, increased access to capital, and
remedies for severe system problems. However, it also represents
a loss of local control and creates ineligibility for public funds.
As well, it could involve a complex and lengthy process to form
the new system. There may also be financial disincentives and issues
related to compensation for acquisitions.
STATE AND FEDERAL POLICIES AND PROGRAMS INFLUENCING WATER SUPPLY / WASTEWATER
DELIVERY STRATEGIES
There are a number of state and federal policies and programs that will
influence the decisions made by cities and counties about the future provision
of water supply and wastewater services. Some of these have been referenced
throughout this document. Others, while not directly related to today
s decisions regarding service delivery, may have a significant influence
on local government’s future role in the management of water resources.
The following discussion describes some of these policies and programs.
Safe
Drinking Water Act
Local jurisdictions are facing shifting responsibilities stipulated by
the 1996 Amendments to the Safe Drinking Water Act. For example, the Amendments
require most water systems to provide annual Consumer Confidence Reports
beginning in 1999. The reports must tell consumers where their water comes
from, results of tests for contaminants in the water supply, likely causes
of any contaminants, and provide information on health concerns. Before
1999, states will adopt matching regulations requiring water systems to
provide these reports at the minimum standards set by EPA or to provide
information that exceeds the national requirements. In addition, the Safe
Drinking Water Act source water assessment process will require local
governments to analyze and plan for the protection of their water sources.
Clean
Water Act
There may be further shifts in anticipated state and federal regulations.
The federal Clean Water Act is up for reauthorization which might result
in more stringent federal requirements. Regardless of the actions of Congress
on the Clean Water Act, the Georgia Environmental Protection Division
(EPD) is now requiring watershed assessments for new or expanded wastewater
discharge permits under the Georgia Water Quality Control Program. In
addition, the recent Total Maximum Daily Loads (TMDLs) program activities
will also trigger watershed inventory and assessments linked to the National
Pollutant Discharge Elimination System (NPDES) permitting process.
EPD's
Water Withdrawal Permit Program
EPD's Water Withdrawal Permit Program is now requiring water supply planning
in areas facing water supply issues. The 24 coastal counties are currently
responding to a state requirement for water supply management plans due
to overdraft of the Upper Floridan Aquifer and resulting saltwater contamination
problems. This issue is a good example of the inextricable link between
water quality and water quantity inherent in water supply and resource
management. Although the issue is one of using too great a quantity of
water, the result is a water quality problem (i.e., saltwater contamination
of wells).
Exhibit
6. Intergovernmental Watershed Protection Study
The Big Haynes Creek Watershed includes portions of Gwinnett, Newton,
Rockdale, and Walton Counties and the cities of Grayson, Loganville, and
Snellville. These local jurisdictions along with regional and state agencies
organized to develop and implement a plan to maintain a high quality water
supply source for the Big Haynes Creek Reservoir while allowing continued
economic and population growth in an area facing significant development
pressure.
In 1992, governments in the watershed began cooperating to conduct and
finance a joint watershed study with the objective to produce flexible
development standards while providing protection for the water supply
watershed. The local governments have remained the primary decision-makers,
responsible for the direction of the study, throughout the consensus driven
process.
The watershed study resulted in recommendations to which the local jurisdictions
have made long-term commitments in good faith. Following the study’s
completion, the participating governments signed an intergovernmental
agreement creating a Watershed Council and a supporting Technical Advisory
Committee. These bodies coordinate the development and enactment of the
local ordinances and amendments necessary to implement the study recommendations
and monitor and review their effectiveness. In addition, the Watershed
Council and Technical Advisory Committee meet on issues of mutual concern
regarding the watershed.
As part of the intergovernmental agreement, the local governments in the
watershed agreed to goals limiting the amount of impervious surface which
would be allowed within each jurisdiction. The participating governments
also agreed to common best management practices for controlling stormwater
runoff and erosion and sedimentation control as well as the implementation
of a cooperative water quality monitoring program.
Unexpected benefits of this multijurisdiction effort include reduced costs
of meeting state and federal requirements, better flood control, improved
surface water quality, and higher recreational value of the reservoir.
Furthermore, Gwinnett, Rockdale and Walton county officials are discussing
the benefits of constructing shared water treatment facilities.
[Big
Haynes Creek contact: Mr. Jim Santo, 404/364-2583]
Georgia
Planning Act Part V Requirements
Another factor prompting long-term water resource planning is the recent
shift in the Georgia Planning Act Part V Requirements. The previously
voluntary environmental planning criteria for source water protection
are now mandatory in revisions to local comprehensive plans. The environmental
criteria categories that must now be addressed include: water supply watersheds,
significant groundwater recharge areas, wetlands, stream corridors, and
higher elevation and steep slopes of the Georgia mountains. (See EPD Rules
for Environmental Planning Criteria; Chapter 391-3-16).
Development
of Regional Reservoirs
The development of regional reservoirs in North Georgia is requiring local
governments to consider watershed protection measures. Water-quality impacts
to the reservoir may originate in one or several counties within the watershed.
Regional reservoirs necessitate cooperative multijurisdictional arrangements
to ensure protection of the entire watershed. Water does not respect jurisdictional
boundaries and those living downstream depend upon the efforts of their
upstream neighbors for their supply of clean, safe water. Protection and
provision of an adequate supply of clean water, therefore, requires cooperation
of those sharing the resource and comprehensive watershed approaches including
inventories, assessments, and management. In addition, land-use planning
is a critical and inseparable component of providing wholesome water.
This can only be accomplished through comprehensive water resources planning
coupled with the directed use of local land-use control authority to protect
water resources.
The challenges of meeting new regulatory requirements and of providing
water supply/wastewater services will require an investment of both time
and money. Smaller systems with limited resources may be required to meet
the same water-quality standards as large systems with many employees
and a broad customer base. The task of providing safe, affordable water
is becoming more complex and difficult even for the largest of public
water systems that are not expected to serve rapidly growing populations.
MOVING
TOWARD COMPREHENSIVE WATER RESOURCE MANAGEMENT
The value of a community's water resources is tied to its quality of life,
economic development, and environmental quality. As local governments
go through the service delivery discussion and negotiation process, it
may be advantageous to consider if they should undertake developing a
comprehensive water resources management plan. Planning for a safe, affordable
water supply and effective wastewater treatment and collection system
for the future is a natural extension of the Service Delivery Strategy
Act discussions because water supply/wastewater service provision will
guide future growth.
Fortunately, comprehensive water resources management at the local and
regional level is consistent with and complementary to EPD's River Basin
Management Planning activities. The River Basin Management Planning program
will support local and regional comprehensive water resources management
by providing inventory and assessment data. The River Basin Management
Planning activities will also provide a framework and process to support
watershed-level resource planning and management.
As suggested here, cities and counties that are comprehensively examining
their water supply and wastewater management programs may find it important
to look beyond their borders--to get a regional perspective. Activities
occurring outside a jurisdiction can have profound impacts on water and
water-related decisions within the jurisdiction.
Consequently, local governments may find it advantageous, or even necessary,
to think regionally in undertaking water supply and wastewater planning.
It is also important to bring all the stakeholders to the table when undertaking
comprehensive water supply and wastewater management planning. This is
particularly true in dealing with nonpoint source pollution problems.
Stakeholders become more committed to problems such as controlling nonpoint
source pollution when they are included in the process of finding a solution.
Furthermore, an inclusive approach provides a forum for communication
and coordination of efforts.
This document has presented water supply/wastewater service components
for consideration during the Service Delivery Strategy Act discussions.
Local governments are encouraged to consider alternative ways to effectively
and reliably provide water supply/wastewater services at an equitable
cost. Negotiations resulting from the Act should also consider future
water-related needs; such deliberations underscore the value of comprehensive
water resources planning. A proposed future publication will look more
closely at management tools that will be needed for such comprehensive
long-term planning.
APPENDIX
A
INFORMATION
SOURCES AND RESOURCES
| Association
County |
Water
Resources Branch |
Program
Coordination Branch |
| Commissioners
of Georgia |
Environmental
Protection Division |
Environmental
Protection Division |
| 50
Hurt Plaza, Suite 1000 |
Suite
1362 East |
745
Gaines School Road |
| Atlanta,
Georgia 30303 |
205
Butler Street, .S.E |
Athens,
Georgia 30605 |
| 404/522-5022 |
Atlanta,
Georgia 30334 |
706/369-6376 |
| |
404/656-6328 |
|
| Georgia
Municipal Association |
|
Northwest
Regional Office |
| 201
Pryor Street, S.W. |
Water
Protection Branch |
Program
Coordination Branch |
| Atlanta,
Georgia 30303 |
Environmental
Protection Division |
Environmental
Protection Division Suite 114 |
| 404/688-0472 |
Suite
1058 East |
4244
International Parkway |
| |
205
Butler Street, S.E. |
Atlanta,
Georgia 30354 |
| Office
of Planning and Budget |
Atlanta,
Georgia 30334 |
404/362-2671 |
| 270
Washington Street |
404/656-4708 |
|
| Atlanta,
Georgia 30334 |
|
Southeast
Regional Office |
| 404/656-3820 |
Middle
Georgia Regional Office |
Program
Coordination Branch |
| |
Program
Coordination Branch |
Environmental
Protection Division |
| Georgia
Environmental Facilities Authority |
Environmental
Protection Division |
One
Conservation Way |
| 100
Peachtree Street, N.W. |
2640
Shurling Drive |
Brunswick,
Georgia 31520 |
| Suite
2090 |
Macon,
Georgia 31211 |
912/264-7284 |
| Atlanta,
Georgia 30303 |
912/751-6612 |
|
| 404/656-0938 |
|
Satellite
EPD Office |
| |
Department
of Community Affairs |
6555
Abercorn Street |
| Southwest
Regional Office |
Department
of Industry, Trade & Tourism |
Suite
130 |
| Program
Coordination Branch |
Region
3 |
Savannah,
Georgia 31405 |
| Environmental
Protection Division |
60
Executive Park, South, N.E. |
912/353-3225 |
| 2024
Newton Road |
Atlanta,
Georgia 30329 |
|
| Albany,
Georgia 31701 |
404/679-4947 |
Department
of Community Affairs |
| 912/430-4144 |
|
Department
of Industry, Trade & Tourism |
| |
Department
of Community Affairs |
Region
7 |
| Department
of Community Affairs |
Department
of Industry, Trade & Tourism |
1054
Claussen Road |
| Planning
Program |
Region
4 |
Augusta,
Georgia 30907 |
| 60
Executive Park, South, N.E. |
31
B Postal Parkway |
706/667-4860 |
| Atlanta,
Georgia 30329 |
Newnan,
Georgia 30263 |
|
| 404/679-4947 |
|
Department
of Community Affairs |
| |
Department
of Community Affairs |
Department
of Industry, Trade & Tourism |
| Department
of Community Affairs |
Department
of Industry, Trade & Tourism |
Region
8 |
| Department
of Industry, Trade & Tourism |
Region
5 |
119
W. Forsyth Street |
| Region
1 |
1180
East Broad Street |
Americus,
Georgia |
| 527
Broad Street |
Athens,
Georgia 30602 |
|
| Rome,
Georgia 30162 |
706/542-9967 |
Department
of Community Affairs |
| 706/802-5490 |
|
Department
of Industry, Trade & Tourism |
| |
Department
of Community Affairs |
Region
9 |
| Department
of Community Affairs |
Department
of Industry, Trade & Tourism |
1825
Veterans Boulevard |
| Department
of Industry, Trade & Tourism |
Region
6 |
Dublin,
Georgia 31021 |
| Region
2 |
400
Corder Road, Suite B |
|
| 500
Jesse Jewell Parkway |
Warner
Robins, Georgia 31088 |
Department
of Community Affairs |
| Gainesville,
Georgia 30501 |
912/329-4830 |
Department
of Industry, Trade & Tourism |
| 770/538-2751 |
|
Region
10 |
| |
Georgia
Mountains RDC |
265
North Main Street |
| Department of
Community Affairs |
P.O.
Box 1720 |
Blakely,
Georgia 31723 |
| Department
of Industry, Trade & Tourism |
1310
West Ridge Road |
912/724-2075 |
| Region
11 |
Gainesville,
Georgia 30501 |
|
| 101
North Peterson Avenue |
770/536-3431 |
Heart
of Georgia - Altamaha RDC |
| Douglas,
Georgia 31533 |
|
501
Oak Street |
| 912/389-4195 |
McIntosh
Trail RDC |
Eastman,
Georgia 31023 |
| |
P.O.
Drawer A |
912/374-4771 |
| Department
of Community Affairs |
408
Thomaston Street |
|
| Department
of Industry, Trade & Tourism |
Barnesville,
Georgia 30204 |
Middle
Flint RDC |
| Region
12 |
770/227-6300 |
228
West Lamar Street |
| 305
MLK Jr., Blvd. |
|
Americus,
Georgia 31709 |
| Savannah,
Georgia 31401 |
Central
Savannah River Area RDC |
912/931-2909 |
| 912/651-7590 |
P.O.
Box 2800 |
|
| |
2123
Wrightsboro Road |
Coosa
Valley RDC |
| Atlanta
Regional Commission |
Augusta,
Georgia 30914 |
P.O.
Box 1793 |
| 3715
Northside Parkway |
706/737-1823 |
Jackson
Hill Drive |
| 200
Northcreek - Suite 300 |
|
Rome,
Georgia 30163 |
| Atlanta,
Georgia 30327 |
Coastal
Georgia RDC |
706/295-6485 |
| 404/364-2500 |
P.O.
Drawer 1917 |
|
| |
127
F. Street |
Lower
Chattahoochee Area RDC |
| Chattahoochee-Flint
|
Brunswick,
Georgia 31521 |
P.O.
Box 1908 |
| Regional
Development left |
912/264-7363 |
1428
Second Avenue |
| P.O.
Box 1600 |
|
Columbus,
Georgia 31902 |
| 13273
Highway 34 East |
Southeast
Georgia RDC |
706/649-7468 |
| Franklin,
Georgia 30217 |
3395
Harris Road |
|
| 706/675-6721 |
Waycross,
Georgia 31503 |
Southwest
Georgia RDC |
| |
912/285-6097 |
P.O.
Box 346 |
| Middle
Georgia RDC |
|
30
West Broad Street |
| 175-C
Emery Highway |
Northeast
Georgia RDC |
Camilla,
Georgia 31730 |
| Macon,
Georgia 31201 |
305
Research Drive |
912/336-5616 |
| 912/751-6160 |
Athens,
Georgia 30605 |
|
| |
706/369-5650 |
South
Georgia RDC |
| North
Georgia RDC |
|
P.O.
Box 1223 |
| 503
West Waugh Street |
|
327
West Savannah Avenue |
| Dalton,
Georgia 30720 |
|
Valdosta,
Georgia 31601 |
| 706/272-2300 |
|
912/333-5277 |
| |
|
|
| |
|
|
APPENDIX
B
CAPACITY
DEVELOPMENT KEY QUESTIONS
(Reprint
from METHODS OF ASSESSING CAPACITY
U.
S. Environmental Protection Agency)
The Safe Drinking Water Act does not define "technical, managerial,
and financial capability," but the following ideas may help states
and local government think about what is generally meant by the term when
applied to water supply systems.
Technical capacity. Technical capacity
generally refers to a water system’s ability to operate and maintain
its infrastructure now and in the future. When assessing a system’s
technical capacity, the following might be considered:
- Appropriate
infrastructure and technologies ("hardware"). Are the
entire water system and its various components appropriately sized,
constructed, and appropriately operated for the needs of the service
population?
- Compliance
with all applicable standards and codes (federal, state, and local).
Is the system in compliance with federal and state drinking
water regulations? Does it meet additional state and local codes and
ordinances regarding water pressure, pipe sizing, and fire protection?
- Consistency
with professional standards. Do the system and its operator comply
with industry and professional standards established by relevant technical,
professional, and trade organizations?
- Reliable
water source(s) of reasonable quality. Does the system
have access to a reliable source of water (including purchased water,
if applicable)? Is source water of a quality that can be treated with
available technologies to meet drinking water standards?
- Infrastructure
maintenance. Does the system maintain the water delivery infrastructure
and related equipment to assure performance?
- Appropriate
technical redundancy. Does the system have cost-effective redundancies
to ensure reliable water service?
- Emergency
equipment. Does the system have access to emergency or backup
equipment in case of natural or other emergencies or disasters?
- Awareness
of quality/quantity linkages. Are technical personnel aware of
the linkages between water quantity and water quality. Are those linkages
adequately managed by the system?
Managerial Capacity. Managerial capacity
involves the personnel expertise required to administer overall water
system operations. In assessing managerial capacity, the following elements
may be considered:
- Clear
ownership identity. Is the ownership of the system known to the
service population, the local community, and regulators? Is the owner
responsive to inquiries about ownership?
- Clear
directorship and accountability. Is the system’s management
governed by and accountable to an appropriate governing board? Can
management be held accountable?
- Capable
personnel and adequate personnel policies. Does the management
retain and compensate personnel with training and expertise appropriate
to the needs of the system? Are adequate personnel procedures in place?
- Understanding
of regulations, rules, ordinances and professional practices.
Is the water system’s management aware of applicable regulations,
rules, ordinances, and professional practices in the water supply
area?
- Awareness
of legislative and regulatory processes. Does the management follow
legislative and regulatory processes affecting the system and the
industry and become involved as appropriate?
- Involvement
with professional groups. Does the management participate in local
meetings and technical forums or professional associations? Does the
management benefit from the training opportunities, information resources,
and policy-related activities of membership groups?
- Customer
responsiveness, outreach, and service orientation. Is the system
oriented to customer service and responsive to customer needs? Does
it use outreach and educational methods, including information to
water customers about the cost of service?
- Contingency
planning and insurance. Are managers prepared for emergencies
and other contingencies? Does the system have adequate insurance?
- Appropriate
management information systems. Do managers have appropriate information
systems to monitor operations, personnel, and other areas of performance?
Financial Capacity. Financial capacity
can be understood in terms of the monetary resources that support the
cost of water system operations. Selected elements of financial capacity
include:
- Ability
to meet current and future capital and operating needs. Does the
system have the required resources (or access to resources) for current
and future operations in accordance with other relevant performance
criteria?
- Adequate
rates, charges, and revenues. Are rates and charges, along with
other system revenue sources, adequate for supporting the cost of
service? Do the system’s rates and charges send appropriate signals
about the cost and value of water service?
- Bonds,
guarantees, and assurances. Can the system and the entities responsible
for it provide appropriate legal assurances that system operations
will be financially sound?
- Depreciation
expense and adequate reserves. Does the system recognize the service
life of assets through accounting and rate-making means? Has a reserve
system been established to help pay for replacements and contingencies?
- Healthy
financial ratios and ratings. Do key financial ratios indicate
adequate cash flow, liquidity, leverage, and profitability (for privately
owned systems)? Are bond ratings for the system or its owners adequate
for attracting financial capital?
- Credit
record and access to credit. Does the system have a good credit
record? Does it have credit or access to credit for operations and
contingencies? Can the system pass a market test of establishing a
line of credit?
- Appropriate
debt/equity ratio (for privately owned systems). Does the system
have an appropriate ratio of debt to equity in the eyes of financial
and economic regulators?
- Appropriate
valuation of rate base (for privately owned systems). Does the
system have a rate base? Is the value of the rate base appropriately
established and documented?
- Financial
books and records. Does the system maintain appropriate financial
books and records for auditing and financial planning purposes?
Technical/Managerial Capacity. Technical
capacity involves the physical performance and condition of the water
system. Managerial capacity can be understood very broadly in terms of
the personnel expertise required to administer overall water system operations.
The following elements of capacity have both technical and managerial
aspects:
- Infrastructure
an capacity planning. Does the system have a plan to meet future
infrastructure and capacity needs?
- Source
protection and management. Is the source water protection area
properly delineated? Does the system have a plan for source protection
and management?
- Monitoring
and testing. Does the system comply with all applicable monitoring
and testing requirements for assuring safe drinking water?
- Operator
certification and knowledge ("software"). Do technical
personnel have the credentials and knowledge to operate the system?
- Continuing
education. Does management provide opportunities for continuing
education for technical personnel?
- Use
of available technical assistance. Is management aware of available
technical assistance? Are managers willing to explore technical assistance
options?
Technical/Financial Capacity. Elements
that deal with a system’s ability to develop and execute a plan for
the system’s infrastructure are in the overlap between technical
and financial capacity. Some of these overlapping elements include:
- Infrastructure
replacement and improvement strategy. Does the system follow a
plan for replacements and improvements as components of the infrastructure
end their useful life? Can the cost of replacements be supported?
- Water
leakage and loss. Does the system have a program to address water
that is lost due to leakage? Does the system understand loss control
as both a financial and technical issue?
- Investment
in technical personnel. Does the system invest appropriately in
expert personnel through in-house or contractual arrangements? Are
the costs of certification and training recognized?
Managerial/Financial Capacity. Some elements of a water system’s
capacity concern both its managerial and it’s financial capabilities.
Basically, these questions assess management’s ability to identify
and implement sound financial planning:
- Appropriate
accounting standards, practices, and audits. Does the system follow
accepted accounting standards and practices? Does it conduct audits
or perform well in audits conducted by others?
- Financial
and business planning. Can the system prepare a financial and
business plan? Does the system make use of available planning models?
- Annual
budgeting and reporting. Does the system prepare an annual budget,
as well as other periodic financial reports as required by regulatory
agencies?
- Cost-of-service
studies and analysis. Does the system establish the cost of service
and use this information in rate design? Are managers aware of cost
drivers?
- Financial
investment strategy. Does the system have a relationship with
a financial institution and an appropriate investment strategy for
its funds?
- Billing
and collections procedures. Does the system maintain an appropriate
billing and collection process? Does it receive payments in a reasonable
manner?
- Awareness
of grant/loan programs. Are managers aware of available grant
and loan programs, including State Revolving Fund loans?
REFERENCES
Association
County Commissioners of Georgia, Georgia Municipal Association, Georgia
Department of Community Affairs, and Carl Vinson Institute of Government,
The University of Georgia. Charting a Course for Cooperation and
Collaboration, An Introduction to the Service Delivery Strategy Act
for Local Governments. June 1997.
Association
County Commissioners of Georgia, Georgia Municipal Association, Georgia
Department of Community Affairs, and Carl Vinson Institute of Government,
The University of Georgia. HB 489 Information Bulletin #1, Drafting
a Service Delivery Strategy: Getting Started --Some Ideas and Suggestions.
December 1997.
Iowa
Association of Municipal Utilities. Safe Drinking Water, A Promise
for Your Community's Future. A Road Map for Water System Management
in Iowa. No date.
Schretter,
Howard. A Classification of Georgia's Counties by Population Growth
Trends. Unpublished bulletin. No date.
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