(CBS4) -- The City of Colorado Springs has agreed to pay $13 million in restoration and improvements to its drainage system to resolve a lawsuit brought against it by federal and state agencies and its downstream neighbor to the south.

The lawsuit was filed in 2016 by the Environmental Protection Agency and the Colorado Department of Public Health and Environment. Pueblo County joined it in 2017, as did the State of Colorado and the Lower Arkansas Valley Water Conservancy District.

By consent decree, no guilt is admitted by any of the parties involved in the litigation. However, the agreement announced Thursday includes a $1 million fine against the City of Colorado Springs for violations of the Clean Water Act.

The complaint alleged that the City of Colorado Springs violated its permit for municipal stormwater management by failing to require the installation and maintenance of stormwater management structures at residential and commercial developments. The complaint also alleged that the city failed to enforce requirements to prevent polluted stormwater from running off active construction sites.

"The EPA appreciates the hard work and cooperation from all the parties, including the City of Colorado Springs, to reach this comprehensive agreement that will avoid further litigation and hasten the actions needed to improve water quality in Fountain Creek and its tributaries," said EPA Assistant Administrator Susan Bodine for the Office of Enforcement and Compliance Assurance. "This innovative settlement, developed through creative problem solving by engineers and scientists with the EPA, the state and the city, will provide the city with the flexibility it needs to attack the problems that have plagued its storm sewer system for two decades in a way that minimizes the burden on its rate payers."

The improvements are aimed at reducing the discharge of pollutants such as sediment, oil and grease, heavy metals, pesticides, fertilizers, and bacteria, into Fountain Creek and its tributaries.

Fountain Creek originates in the foothills west of Maniou Springs and parallels Interstate 25 as it flows south toward Pueblo where it joins the Arkansas River.

The EPA stated Arkansas River Valley communities will see significantly better water quality from the improvements in Colorado Springs.

"Today's action is the successful culmination of several years of hard work and collaboration between EPA, State and local officials to protect Fountain Creek, Monument Creek and other regional waterways for the benefit of the residents of Colorado Springs and downstream communities," said EPA Regional Administrator Greg Sopkin. "This settlement will reduce contaminated runoff and protect these waters as sources of recreation, irrigation and drinking water for many years to come."

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The announcement follows other action already promised by the city as part of a intergovernmental agreement with Pueblo County. That IGA requires Colorado Springs spend $460 million on its stormwater program and construct over 70 stormwater capital improvement projects.

Pueblo County Commissioner Terry Hart said, "It has been a tough struggle to get to this point and our efforts go back well over a decade."

A press release from the county stated the county "will remain vigilant to ensure that there are no future threats from its upstream neighbors on Fountain Creek."

The City of Colorado Springs' storm sewer system serves a population of more than 460,000 people and comprises approximately 250 miles of storm water ditches and channels throughout the city of Colorado Springs. The storm sewer system discharges to Monument Creek, Fountain Creek, Camp Creek, Cheyenne Creek, Shooks Run, and other waters within the Arkansas River watershed.

The EPA and the Colorado Department of Public Health and the Environment, working in partnership, discovered the violations through inspections.