Cities across the country are crying foul against the Environmental Protection Agency, arguing that regulations designed to prevent sewer runoff into lakes and rivers have the potential to cause financial stress for local governments and their residents.

In recent years, cities across the country have increasingly been saddled by "consent decrees" from the EPA that order them to overhaul their waste water systems, often at substantial cost. In Omaha, Neb. the price tag is $1.7 billion. In Kansas City, Mo. it’s $2.5 billion, and in St. Louis, Mo. it’s $4.7 billion.

The money is spent to make upgrades to systems known as combined sewer overflows, which collect both sewage and storm water in the same pipe system and delivers them to wastewater treatment plants. The advantage of the systems, known as CSOs, is that through a relatively simple valve system they can prevent sewage from discharging back into homes and businesses when the pipes are overwhelmed. The downside is that during heavy rain, when the systems exceed their capacity, both storm water and sewage gets discharged into rivers and streams, often in violation of the Clean Water Act.

Illustration from EPA

According to the EPA, combined sewer systems serve about 40 million people in 772 communities concentrated mostly in the Pacific Northwest, the Great Lakes region, and the Northeast.

Since 1994, the EPA has worked to bring cities in compliance with the law, often using an aggressive legal framework to force local governments to spend millions or even billions of dollars to reform their systems. In the 1970s and 1980s, during the Clean Water Act's early days, the federal government typically provided sizable grants to localities for overhauling both water and wastewater systems.

Today, that’s not the case, and the feds’ primary financial role is capitalizing state revolving loan funds, currently at about $2.4 billion per year. Local leaders say that money is insufficient to help with the largest projects, and it only helps with financing -- not providing capital. "We remember those grants fondly and wish we still had them," said Tom Cochran, executive director of the U.S. Conference of Mayors, at a recent event.

The EPA’s approach has frustrated mayors because, in order to pay for the mandated reforms, they’re essentially forced to raise water and wastewater rates on residents. Mayors say they don’t want to increase financial hardships on their citizens while they’re still suffering from the downturn in the economy.

"No one can argue this is not unreasonable," said Mayor David Berger of Lima, Ohio, which is negotiating with the EPA to perform upgrades that he believes will cost the city more than $100 million in capital costs. Most, if not all, of that will be passed along to citizens and businesses in the area in the form of higher utility rates. In Lima, a third of residents live below the poverty line, and the median household income is half the national average.

On a more practical level, there’s also a huge political cost to raising those rates. Citizens often treat utility rate hikes with the same ire as tax increases, and they make mayors vulnerable. Chattanooga, Tenn. Mayor Ron Littlefield, for example, was targeted for a recall election in part because of a proposed increase in sewer rates following an EPA order.

The EPA has acknowledged the financial challenges the orders cause localities, writing in a recent notice in the federal register that state and local governments' "ability to finance improvements by raising revenues or issuing bonds has been significantly impacted during the ongoing economic recovery."

Mayors have been working with the EPA to develop a framework that could offer more flexibility in terms of how they address the clean water regulations. That framework was developed over the course of five workshops between local officials and the EPA. But it’s unclear how much flexibility it would offer, and it has not yet been released. In a statement, EPA officials said the new program would be announced "shortly."

"No American wants raw sewage or other harmful pollution flowing through the waterways in their communities," the EPA said in a statement. "EPA has worked closely with many local governments to identify innovative and cost-effective solutions to these issues, including additional use of green infrastructure, that acknowledges the budgetary challenges they face while ensuring that every community's water is clean and safe."

Meanwhile, mayors are calling for increased federal grant funding -- like they had in previous decades -- to help upgrade their system. But that could prove to be controversial. Essentially, communities that enjoyed the relatively low utility rates that came with older, polluting sewer systems are seeking aid from taxpayers outside their community to avoid fully paying for upgrades themselves.

But Berger, of Lima, says the federal government might not impose such inflexible standards if it had to share in the cost. "Once the federal government stopped having skin in the game… all the balance was lost," Berger said.

Cochran conceded it’s unlikely new grant funding would come for the projects anyway, given the federal government’s focus on spending reductions.