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<br />" <br /> <br />Stratus Consulting <br /> <br />Private Nonprofit Water Systems in Colorado <br /> <br />Figure 2.2 shows that the majority ofPNPWSs in Colorado are groundwater systems. The maps <br />also reveal clusters ofPNPWSs in locations such as Otero County, La Plata County, and Garfield <br />County into neighboring Pitkin County. <br /> <br />2.4 How Sustainable Are Private Nonprofit Water Systems? <br /> <br />Most PNPWSs are small systems, and PNPWSs face the same difficulties as small governmental <br />systems. Small systems must meet the same standards of providing safe drinking water as larger <br />systems, but have a smaller base of customers over which to spread the often capital-intensive <br />costs of ensuring that a water system can keep up with increasingly stringent drinking water <br />standards, replace aging infrastructure, or keep up with rapid changes in population. Small <br />systems also often have a smaller pool of skilled labor to drawn from for operations, <br />management, and financial expertise. Often, employees who gain experience and demonstrate <br />competency are quickly hired away by larger communities that can afford to pay more for their <br />services. As a result, small water systems often face capacity deficiencies in the TMF capacity <br />necessary to sustainably operate a water system. Most often, capacity deficiencies in technical <br />functions can be traced to insufficient financial capacity, often accompanied by insufficient <br />managerial capacity. <br /> <br />In addition to general small system concerns, water engineers, technical assistance providers <br />(from organizations such as Colorado Rural Water and the RCAC and DOLA), and funding <br />providers that work with PNPWSs have identified some concerns about their ability to <br />sustainably operate in the long-term. First, PNPWSs dissolve more frequently than other types of <br />systems. Second, poor financial management is common - especially with respect to setting up <br />reserve accounts to keep up with repair and replacement and being prepared for emergency <br />expenses. Third, it is often difficult to find a licensed operator and to keep paying that operator <br />as costs increase. Some systems do not have the financial resources to commit to maintaining a <br />licensed operator. <br /> <br />PNPWSs in areas with higher incomes and other resources are generally more likely to be stable. <br />In addition to having financial resources, these communities often have professionals with skills <br />to donate toward effectively maintaining the system and planning for the future. However, if a <br />community has all second-home owners, it can be difficult to find someone to commit to running <br />and maintaining the water system. Another problem for PNPWSs in higher income locations is <br />that they do often do not qualify for reduced rate loans from the USDA Rural Development and <br />therefore face higher interest costs for funding for capital improvement projects. <br /> <br />PNPWSs in lower income areas face the full range of capacity development limitations. Systems <br />that were inherited from the developer are common, as are inherited problems from lesser grade <br />materials chosen for essential infrastructure. IfPNPWSs cannot access grants or low-income <br /> <br />Page 2-5 <br />SCll199 <br /> <br />