74:04:09:05Technical, managerial,

and financial capacity criteria. New water systems must meet the following criteria in order to obtain a certificate of approval: (1) Technical capacity criteria: (a) Finished water meets all required drinking water standards; (b) Personnel operate the system effectively; and (c) A valid water right is obtained; (2) Managerial capacity criteria: (a) The system owner or owners are clearly identified; (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; (c) A system or method is in place to effectively maintain all required records, distribution system histories, maps, and compliance information; and (d) An operating plan is completed in accordance with subsection 74:04:09:08(2)(b); (3) Financial capacity criteria: (a) Revenues are greater than costs; (b) A financial audit of the water system is completed every three years; (c) The water system produces and utilizes an annual budget; (d) The operating ratio is greater than 1.0; (e) The coverage ratio is greater than 1.0; (f) Customers are metered; and (g) An emergency/replacement reserve is created and funded.

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