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The greatest obstacle to reducing wastewater pollution in southwest Minnesota is money.

Failing sewer and individual septic systems in small communities are causing raw or improperly treated sewage to discharge directly into waterways, said Forrest Peterson, public information officer for the Minnesota Pollution Control Agency.

Meanwhile, government funding for sewer systems is dwindling, he said.

"All of these nutrients getting into the water are really reducing water quality," Peterson said. "They create too much algae growth and that's what makes the lakes and ditches green. Then the algae die off and decompose, which reduces the dissolved oxygen levels, and that kills off fish and other aquatic life."

Construction of many of the existing systems took place in the early to mid seventies with generous federal grants that no longer exist. Age, stricter regulations and in some cases industrial development now demand system rehabs, extensions and expansions, Peterson said.

"A lot of these smaller communities are in a bind because they're faced with needing to upgrade their facilities and at the same time they're facing an aging population and a tax base that's not growing or is even declining," Peterson said.

Systems with stabilization ponds serve most small communities, said Brad Gillingham, pollution control specialist with the pollution agency's Marshall Regional Office.

"We've got some that are in real bad shape and we've got some that are in great shape and then we've got a lot of them that are somewhere in between," Gillingham said.

Last year, MPC inspected 55 plants and visited another 26 plants in the region, Gillingham said. The agency issued 30 letters of noncompliance, 11 violation notices, four stipulation agreements (out-of-court monetary settlements for violations) and three fines. Some of the actions resulted from inadequate monitoring and reporting practices rather than pollution problems.

Counties are responsible for policing individual septic systems. Some counties catch polluting systems during inspections when property changes hands.

Aging pipes with cracks allow storm and ground water to infiltrate sewer systems, which causes ponds to fill too fast, particularly during floods, Gillingham said. Overloaded ponds discharge into waterways before proper treatment.

Pond linings also deteriorate with age. Additionally, some communities are wrestling with added industrial waste.

"Small towns that are dwindling in population welcome in these industries because they need them for economic growth and vitality of the community," Gillingham said. "But in some instances there wasn't enough research done on what type of load the industry would be discharging to the (treatment) plant."

Correcting the problem after the fact is expensive and time consuming, Gillingham said.

The agency administers a revolving loan fund of state and federal money earmarked for smaller sewer system projects. The fund is a primary source of financing. Larger facilities that pump more than one million gallons daily are excluded from the loan program.

This year's loan roster lists 203 communities known to need improvements, 36 of them in southwest Minnesota, Peterson said. Not all residential areas that need sewer improvements are on the list.

Of the 36 communities, only nine are in line for loans this year: Appleton, Chandler, Benson, Mountain Lake, Dawson, Litchfield, Lamberton, Dassel and Wood Lake. A project's impact on the quality of the receiving water and on the general use and condition of the receiving water determines its priority ranking, Peterson said.

The estimated cost of the 36 projects combined comes to nearly $76 million. The nine priority projects alone will cost a combined total of about $30.2 million to rehab and expand existing systems, according to agency data.

Among the other 27 projects, 10 must expand and rehab existing systems and 17 lack community systems.

"A lot of people think you can build a plant and exist on it forever, but that's not the case," David Bovee, Dawson city manager said. "And when the government steps away from helping you that makes it really tough."

Dawson expects to begin rehabbing and doubling the size of its system in fall at an estimated cost of up to $2 million, Bovee said.

"We're getting low interest loans, but no grant money," Bovee said. "Over the years, funding is slowly disappearing to the point now, if you're going to get a grant from the federal government or the state, your community almost has to be bottomed out."

Grants paid for a considerable portion of the original plant, he said.

The Southwest Regional Development Commission in Slayton is working with Currie, Dovray, Avoca, Iona, Woodstock and Magnolia to secure some grant money for their projects, said Barb Kirchner, project planner for the southwest Minnesota Housing Partnership. In the last few years, the commission also aided sewer projects in Wanda, Alpha, Ihlen, Jasper, Leota and Beaver Creek, she said.

Funding sources include the USDA's Rural Development Program and the Department of Trade and Economic Development's Small Cities Development Grant Program, State Revolving Loan Program and Public Facilities Authority Drinking Water Revolving Fund, she said.

Even with grants, communities pitch in some of the cost based on a formula tied to median household incomes, Kirchner said. Typically, each household in a project area pays a monthly sewer rate of $25 to $35 over a period of about 20 years to cover debt service and the system's operation, maintenance and future replacement.

"It's harder for our smaller communities to secure the financing -- it takes about two to three years," Kirchner said. "The sad thing is -- I'll just use Avoca for an example, if they had to put the system in without any help, it would probably cost each household like $5,000 a year.

"Some of the houses in the smaller communities might have a market value of $14,000, and then you put in a system that's going to cost more than the house. It's frightening. If they don't get a portion of grant funding, then they're not going to be able to afford to put the system in."

Without funding, communities simply limp along as usual, Kirchner said.

"Some of the properties aren't big enough to even put in a new septic system," Kirchner said.

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