New water systems must meet the following criteria in order to obtain a certificate of approval:

1. (1) Technical capacity criteria:

   1. (a) Finished water meets all required drinking water standards;
   2. (b) Personnel operate the system effectively; and
   3. (c) A valid water right is obtained;

2. (2) Managerial capacity criteria:

   1. (a) The system owner or owners are clearly identified;
   2. (b) The system meets all of the operator certification requirements in accordance with chapter 74:21:02 or have a plan to do so if the system is not yet required to have a certified operator;
   3. (c) A system or method is in place to effectively maintain all required records, distribution system histories, maps, and compliance information; and
   4. (d) An operating plan is completed in accordance with subsection 74:04:09:08(2)(b);

3. (3) Financial capacity criteria:

   1. (a) Revenues are greater than costs;
   2. (b) A financial audit of the water system is completed every three years;
   3. (c) The water system produces and utilizes an annual budget;
   4. (d) The operating ratio is greater than 1.0;
   5. (e) The coverage ratio is greater than 1.0;
   6. (f) Customers are metered; and
   7. (g) An emergency/replacement reserve is created and funded.

Source: 25 SDR 75, effective November 18, 1998.

General Authority: SDCL 34A-3A-25.

Law Implemented: SDCL 34A-3A-25.