How old is the baby using these bottles? I guess if he/she is a newborn, or has immuno-deficient problems, I'd be concerned about sterilization, but after a few months, isn't it OK to just wash the bottles, etc, like you would anything else?
I mean, it's actually beneficial for the infant's developing immune system to be exposed to things, so that the immune system actually gets to be stimulated. Children living in extremely sterile environments end up with whacked-up immune systems.
If you're going to brush your teeth with tap water, wash with it, take a shower in it, it's definitely safe enough to wash bottles in. And unless they use an entirely separate water system for the toilet, the water going into the toilet is just as safe! It all comes from the same place! (as CEDmom stated)
Besides, we all have to eat our "pound of dirt" before we grow up, as my mom used to say, LOL!