PURPOSE: This rule establishes minimum technical, managerial and financial capacity requirements for community and nontransient noncommunity water systems commencing operation after October 1, 1999. The rule also includes technical and financial capacity recommendations.

1. (1) Applicability. This rule applies to community and nontransient noncommunity water systems commencing operation after October 1, 1999.

2. (2) General Requirements.

   1. (A) Community and nontransient noncommunity water systems commencing operation after October 1, 1999, shall show, as part of their permit application, that the public water system will meet the requirements of this rule. The department will not issue a permit to dispense water until requirements of this rule are met.
   2. (B) Public water systems commencing operation after October 1, 1999 shall show as part of their application that the public water system will meet the minimum technical, managerial, and financial capacity requirements of this rule. The department will not issue a written construction authorization until it determines that the proposed water system will meet the requirements of this rule.
   3. (C) Community and nontransient noncommunity water systems shall maintain compliance with this rule and shall provide the department with information during sanitary surveys and upon written request for the department’s use in assessing their compliance with this rule.
   4. (D) Community and nontransient noncommunity water systems subject to this rule shall consider and plan for the potential impact of future regulations on their technical, managerial and financial capacity.

3. (3) Minimum Technical, Managerial, and Financial Capacity Requirements.

   1. (A) Minimum Technical Capacity Requirements.

      1. 1. All community water systems subject

to this rule must conform to the department’s “Standards for Community Public Water Supplies.”

1. 2. All nontransient noncommunity

water systems subject to this rule must conform to the department’s “Standards for Non- Community Public Water Supplies.”

1. 3. All public water systems subject to

this rule shall have a sufficient number of operators certified as required in 10 CSR 60- 14 to provide proper operation and maintenance of all source, treatment, storage, and distribution facilities so that the public water system meets all requirements of sections 640.100–640.140, RSMo and regulations promulgated thereunder. These operators shall be properly trained and be provided all equipment needed, including safety equipment, to perform all tasks in their job duties.

1. 4. All public water systems subject to

this rule shall have and maintain an updated distribution system map showing, at a minimum, the size and location of all waterlines, valves, hydrants, storage facilities, pumping facilities, treatment facilities, and water sources and shall make the map available to the department on request.

1. (B) Minimum Managerial Capacity Requirements.

   1. 1. Community and nontransient non-

community water systems subject to this rule shall have an organization chart that shows every position that provides any drinking water function with the position title, name, business address, and telephone number of the person filling that position. This chart shall show clear lines of authority and supervision. Elected officials and managers that have overall jurisdiction shall also be shown on this chart. The chart shall state the name(s) of the persons or legal entity who own the public water system along with the business address and telephone number of the owner(s). This chart shall be publicly displayed and shall be updated within thirty (30) calendar days of any changes. An updated copy of the organization chart shall be made available to the department.

1. 2. Community and nontransient non-

community water systems subject to this rule shall designate a person or persons who will receive customer complaints and shall have a written procedure for receiving, investigating, resolving, and recording customer complaints. The name, title, business address, business telephone number and office hours of the person(s) designated to receive complaints shall be publicly displayed, along with the written complaint procedure. Complaint records shall be kept for a minimum of five (5) years and shall be made available to the department upon request. Results of investigations shall be used as part of the planning process for future improvements.

1. 3. Community and nontransient non-

community water systems subject to this rule shall have a written rate structure and service fees, and the rate structure and service fees shall be publicly displayed and shall be made available to the department upon request.

1. 4. Community and nontransient non-

community water systems subject to this rule shall hold at least one (1) public meeting prior to changing the rate structure or service fees and shall notify the customers in advance of the public meeting by posting notice in the principal business office and providing notice in the area served, unless the rate increase procedure is regulated by other state or federal regulations. Records of customers’ notice and summary of the public meeting shall be kept for a minimum of five (5) years and shall be made available to the department upon request.

1. 5. Community and nontransient non-

community water systems subject to this rule shall designate a person to deal with compliance-related issues in accordance with the public drinking water regulations in 10 CSR 60, including reporting and public notice requirements. This person shall be trained in public drinking water regulation requirements and shall act as liaison with the department on drinking water issues. The department will refer compliance actions to this person. The name, position title, business address, business telephone number, and office hours for this person shall be made available to the department and the department shall be notified within thirty (30) calendar days of any change.

1. (C) Minimum Financial Capacity Requirements.

   1. 1. Community and nontransient non-

community water systems subject to this rule shall adhere to standard accounting practices in accordance with the Generally Accepted Accounting Principles and Practices, or the National Association of Regulated Utility Companies Uniform System of Accounts, as appropriate.

1. 2. Community and nontransient non-

community water systems subject to this rule shall develop and implement a system of collection of water fees that includes disconnection of service for nonpayment or other measures for obtaining payment. The total of uncollected fees and the percentage of uncollected fees compared to sum of collected and uncollected fees shall be recorded monthly. These records shall be made available to the department upon request.

1. 3. Community and nontransient non-

community water systems subject to this rule shall develop an annual budget showing public water system revenues and expenditures, shall prepare a report at the end of each fiscal year showing public water system revenues and expenditures for that year and a comparison with the annual budget prepared for that year, and shall prepare a five (5)-year capital improvement budget and capital improvement plan that will be updated annually. The capital improvement plan shall include the potential financial impacts of future regulations. These records shall be kept for a minimum of ten (10) years and shall be made available to the department upon request.

1. 4. Annual revenues shall cover all pub-

lic water system costs for the system including operating costs, maintenance costs, debt service costs, operating reserves, debt service reserves, emergency equipment replacement reserves, and revenue collection costs.

1. 5. Community and nontransient non-

community water systems subject to this rule and not subject to state regulation of rates for water service, in addition to all other financial capacity requirements, shall have and maintain—

1. A. An operating reserve equal to or

greater than one-tenth (1/10) of the annual operations and maintenance budget. The public water system must establish this reserve in at least annual payments not to exceed ten (10) years. Funds from the operating reserve shall be used for operating and maintenance expenses only and shall be replaced within ten (10) years from the date of use. This reserve shall be invested in an account with ready access to the funds. Records of this reserve shall be made available to the department upon request. Other private, state, or federal reserves may be applied to meet this requirement;

1. B. An emergency equipment replace-

ment reserve equal to or greater than the replacement cost of the most expensive mechanical equipment item needed for operation. The public water system must establish this reserve in at least annual payments over a minimum of ten (10) years. Funds from the reserve shall be used for emergency equipment replacement expenses only and any funds so used shall be replaced within ten (10) years from the date of use. This reserve shall be invested in an account with ready access to the funds. Records of this reserve shall be made available to the department upon request. Other private, state, or federal reserves may be applied to meet this requirement; and

1. C. If there is debt on the public water

system facilities, a debt service reserve no less than ten percent (10%) of the principle and interest or the amount required in the bonding agreement. Funds from the debt service reserve shall be used only for debt service expenses and for purposes agreed to in the bonding agreement and shall be replaced no less than as required in the bonding agreement. Records of this reserve shall be made available to the department upon request.

1. (4) Recommendations. This section includes recommendations for further enhancing managerial and financial capacity. These recommendations will not be used to determine if minimum regulatory requirements are met for issuance of permits to dispense water.

   1. (A) Managerial capacity recommendations include the following:

      1. 1. All public water systems should des-

ignate a person to be liaison with other public water systems and officials of entities that may impact drinking water systems. This person should be trained in water resource planning and general public drinking water system issues; and

1. 2. All public water systems should have

management with sufficient expertise to ensure that all public drinking water facilities are properly operated, maintained and in compliance with department regulations; 10 CSR 60-3

improvements needed for future population and commercial growth are properly planned and that these plans are financed and executed; all personnel providing drinking water functions continue to be trained to achieve professional expertise in their field; the personnel are organized and motivated to provide good customer service, good interaction with the department and other regulatory agencies, good interaction with other regional water systems and water users including participating in long-term strategic planning for management of regional water resources; and that the supply finances are fiscally sound.

1. (B) Financial capacity recommendations include the following:

   1. 1. Revenues from drinking water sales

should cover all public water system costs for the system including operating costs, maintenance costs, debt service costs, operating reserves, debt reserves, emergency equipment replacement reserves, and revenue collection costs. Capital improvement funding for facilities needed for upgrading the existing system should come from revenue from water sales or other sources of capital. Rates should be set accordingly;

1. 2. New connection fees, development

fees, and other funding sources should cover all public water supply capital improvements costs for facilities needed for expanding the system for new customers. Fees should be set accordingly; and

1. 3. All drinking water generated revenues

should be used for drinking water purposes. For public water systems owned by entities that provide other services in addition to drinking water, drinking water purposes should include equitable share of administrative costs for the entire entity.

AUTHORITY: sections 640.100 and 640.115, RSMo Supp. 1998.* Emergency rule filed Sept. 20, 1999, effective Sept. 30, 1999, expired March 27, 2000. Original rule filed July 1, 1999, effective March 30, 2000.

*Original authority: 640.100, RSMo 1939, amended 1978, 1981, 1982, 1988, 1989, 1992, 1993, 1995, 1996, 1998, 1999; and 640.115, RSMo 1939, amended 1949, 1978, 1998.