Federal grant programs created disincentives for local communities to comply with water treatment standards, since failure of the federal government to provide funds was an acceptable excuse for noncompliance. Moreover, grant regulations slowed the process of constructing or upgrading facilities to comply with wastewater treatment standards, adding an average delay of two to four years. Finally, the process made it difficult to identify and hold accountable those responsible for provision of inaccurate or improper advice. However, the SRF program still inhibits efficient investment in municipal wastewater treatment plants capable of meeting effluent standards. Like the CGP, SRF funding discourages local governments from developing self-sufficient, efficient, and effective wastewater treatment programs.
Privatization offers an alternative means of funding and operating wastewater treatment facilities.
Accountability provided in privatization contracts ensures that a private operator will either meet the contract standards established by the local government or face penalties such as fines or contract termination. Clear assignments of responsibility are linked to accountability through the privatization contract. Although various forms of privatization have been pursued in hundreds of communities throughout the United States, numerous factors restrict the ability of communities to fully capture the advantages provided by private sector participation in the provision of wastewater treatment. At the state level, regulators should allow communities maximum flexibility in designing the best partnership to meet their needs under EPA's Partnerships Rebuilding America privatization program, and eliminate any state restrictions on use of SRF loans to help finance privately owned facilities.