Our primary concern in this paper is to determine to what extent small communities have difficulty meeting the new stricter 2001 standard for arsenic levels in their drinking water. To do this we survey water users in rural Minnesota communities that had arsenic levels in their water supply exceeding 10 μg/L during 2001-2006. Our survey results show that after obtaining complete information concerning the arsenic levels in their drinking water consumers with relatively low levels of arsenic were willing to pay $8-9 annually, while those with high levels of arsenic are willing to pay $15-17 annually. We also found that consumer’s willingness to pay (WTP) didn’t vary by community size. Thus, we conclude that compared to compliance costs ($58-327 per capita annually) small rural communities were likely to find it difficult to cover the cost of compliance through increased water charges. Since many of the communities have to cover these costs of compliance by raising water charges, we ask the basic question: are there better treatment options for these rural communities that will lower the cost to consumers? One option might be to encourage individual householders to use household water treatment devices for communities serving fewer than 500 people. The devices could be made available by the local entity supplying the community’s water possibly at a subsidized rate along with complete information about the arsenic level in the water supply.