Capacity Development is a process for water systems to acquire and maintain adequate technical, managerial, and financial capacity. This capacity enables water systems to have the capability to provide safe, clean, and reliable drinking water.
Capacity development is a fundamental component of the 1996 Safe Drinking Water Act (SDWA) Amendments. The SDWA Amendments provide a framework for states and water systems to work together to protect public health. Every state has developed a Capacity Development Program to assist public water systems in building their capacity, and you can view South Dakota's capacity development strategy here.
The Safe Drinking Water Act requires that a system applying for a DWSRF loan must demonstrate that it has technical, managerial, and financial capacity. If it is determined that your system does not have the required capacity, you may still qualify for a DWSRF loan if it is going to be used to ensure that your system will have the necessary capacity or your system develops a plan to gain the needed capacity. What exactly does technical, managerial, and financial capacity mean?
The physical infrastructure of the system, including but not limited to the source water adequacy, infrastructure adequacy, and technical knowledge. In other words, does your treatment system work the way it is supposed to? Are you providing the safest and cleanest water possible and required by law to your customers right now, and will you be able to in the future?
The management structure of the system, including but not limited to ownership accountability, staffing and organization, and effective linkages. In simpler terms, do you have a capable and trained staff? Do you have an effective management structure?
The financial resources of the water system, including but not limited to the revenue sufficiency, credit worthiness, and fiscal controls. Basically, does your system have a budget and enough revenue coming in to cover costs, repairs, and replacements?
Amendments to the SDWA as mandated by America's Water Infrastructure Act of 2018 encourages incorporation of asset management into capacity development to help build technical, managerial, and financial capacity. What is Asset Management? Asset management is maintaining a desired level of service for what you want your assets to provide at the lowest life cycle cost. Water systems need asset management to address aging water infrastructure, make sound investment decisions to maximize limited financial resources, and make costs transparent to support financial decisions. With a proper plan for asset management, a system can improve service and reliability, reduce risk and unexpected costs, and enhance communication with customers and stakeholders while realizing many additional benefits.
Worksheets have been developed for the applicant to complete and are linked below. If you have questions while completing the worksheets, please call the Drinking Water Program at (605) 773-3754 and we will be happy to help.