During the 1980s the primary responsibility for environmental infrastructure began to shift to state and local governments. In addition, complying with increasingly stringent and complex environmental regulations has become a local responsibility, even in small and rural communities. These communities lack the technological information and expertise, and the financial and human resources to respond to the myriad prescriptive statutes and regulations set forth by the federal and state governments to achieve compliance. Examples of small community infrastructure needs specific to wastewater treatment and disposal include:

• 32,000 of the nation's 39,000 local governments serve populations of less than 5,000.
• The need for effective wastewater facilities in very small communities and rural areas remains high. According to EPA estimates $13.4 billion is needed for for wastewater treatment and collection systems in small communities alone.
• State and local governments continue to have to assume more responsibility for financing, building, and operating municipal sewage treatment systems.
• The need for technical, financial and management information on wastewater systems appropriate for small communities has increased during the 1990s as cited in EPA's Small Towns Task Force Report.

According to the U. S. Environmental Protection Agency publication, A Preliminary Analysis of the Public Cost of Environmental Protection: 1981-2000, EPA's Construction Grants Program, the largest source of federal aid to build wastewater treatment plants, ended in 1991. Beginning in 1989, federal grants helped to capitalize State Revolving Funds (SRF's) in place of construction grants. However, in many states even if SRF payments are reinvested or leveraged, SRF programs are not expected to meet financing needs. Small communities need viable, lower cost alternatives to comply with federal requirements and protect the public health.

Community Environmental Conditions:

The following five environmental criteria will serve as a basis for community selection :

• Areas where no wastewater treatment facilities exist.
• Failing systems -Factors such as poor site conditions, inappropriate technologies, poor design, poor construction and lack of maintenance can contribute to the failure of onsite systems.
• Ecologically/geologically sensitive areas - Conditions that typify ecologically/geologically sensitive areas include sensitive receiving waters such as freshwater lakes and saltwater inlets. Special geological formations such as fractured limestone or gypsum are also a concern. Excess nutrients may be a problem in the first case, and excess permeability in the latter.
• Rapidly developing areas - Threats to the performance of onsite systems in rapidly developing areas include inadequate planning, political/financial constraints to the provision of services, and pressure for rapid development often lead to improperly planned, designed, and constructed systems.
• Subdivisions on marginal land -The development of subdivisions on marginal land without proper planning can result in failed systems and an unhealthy environment. Poor soils, high water tables, and other site constraints limit the practicability of onsite wastewater treatment. Larger lot sizes can increase the likelihood of achieving successful onsite sewage disposal. However, such development is costly due to the expense of providing ancillary services, such as electricity, telephone, water, etc.