Martha, I'm not sure I understand - usually packaged in plastic bags, were your bags open where the water saturated the contents? If so, I'm not sure I know of a good way to make it sterile other than heating...the PH of household bleach is somewhere in the neighborhood of 10 or 11 and that wouldn't seem good for a sowing medium. The amount recommended for flood cleanup is 1 C bleach to 1 Gal water so surely quite alkaline, even if the water wasn't oily looking it can carry all kinds of bacteria (flood water cleanup is making all the papers in this part of the country too, we've had water in places it's never been seen! :))

Are they large bags (expensive)? If the contents were wet, I might be tempted to use them for amending outdoor potting mixes and just start fresh at the store to save time and work.

I assume the mix was soaked or you would not be concerned. If you dry it out it should be ok for most seed starting. If you are doing exotics I would buy a new bag for those. Al

I would douse it with hydrogen peroxide from the drugstore, then dry quickly. No residue.