A new report issued by the GAO determines the cumulative cost of federal water requirements to comply with the Clean Water Act, and identifies some major methodological challenges to developing complete and reliable cost information. This report "provides information on (1) key federal water requirements that local communities are subject to under the Safe Drinking Water Act and the Clean Water Act, (2) the extent to which existing studies provide information on the cumulative cost of such requirements to communities, and (3) the methodological challenges to developing reliable cumulative cost estimates attributable to federal water requirements.

In the report, GAO recommends that "any estimate of the cumulative costs of federal water regulations should be viewed in light of the following challenges and consequent data limitations."

• "Local communities often lack the institutional knowledge or historical records on the costs of treatment technologies or other operational changes. As a result, local officials may not be able to provide information on the costs associated with installing new treatment technologies or making other operational changes, when such changes occurred, or why they were made.
• Even when data on the costs of treatment technologies or other operational changes are available, local officials often have trouble allocating costs attributable to federal water requirements partly because accounting systems generally track costs by project rather than by federal requirement. Cost allocation is especially difficult when costs are shared by multiple, overlapping jurisdictions or when communities make system or program changes for multiple reasons, such as installing a new treatment technology that both meets federal requirements for safe drinking water and improves the water's aesthetic quality.
• Establishing a causal link between community investments and federal water requirements is also problematic in developing cost estimates. First, in some instances, there is no good measure of what communities would have done in the absence of federal water requirements that can be used as a baseline in developing cost estimates. Second, some investments are made in anticipation of potential federal requirements rather than in response to finalized ones. Consequently, because of the subjective judgments that would have to be made, it is difficult to reliably determine how far in advance of a requirement an investment can be made and still be attributed to that requirement. Third, because some states or regional entities may exercise their authority to establish requirements that are more stringent than the federal standards, some community investments may include costs beyond those fairly attributable to federal requirements. Identifying the federal portion of the costs is often not feasible because the authority and requirements of the multiple levels of government overlap."

"Information on the cumulative cost of federal water requirements is critical in determining the nature and extent of the financial burden on local communities. However, given the methodological challenges of obtaining accurate and complete cost data, accurately allocating costs, and establishing a causal link between community investments and federal water requirements, researchers face formidable obstacles in developing a reliable cumulative cost estimate."

Click here to read the letter from John Stephens to the Senate Committee on Environment and Public Works.

Click here to view the full report.