New Brighton and the Defense Department have drawn legal battle lines over a 1988 court settlement that requires the Army to pay for treating groundwater that was contaminated over several decades at the nearby Twin Cities Army Ammunition Plant.

U.S. Army and New Brighton officials met last month to try to settle the long-brewing dispute after the city filed a motion in U.S. District Court in May accusing the Army of reneging on the terms of the settlement.

The sides will meet on Aug. 22, though the city has told the Army that it plans to ask a federal judge to decide on its motion to enforce the agreement at a Sept. 30 hearing.

“We’re cautiously optimistic” that a resolution will be reached, said Dean Lotter, New Brighton’s city manager, who said some progress was made in the meeting last month. “I think the magistrate judge did a great job of getting the Army and the Department of Defense to look at this as something that needs to be solved, and not just say ‘No, no, no’ to everything.”

Under the settlement, reached after years of litigation in the mid-1980s, the Army agreed New Brighton residents would not be obligated to pay for treating contaminated water. It also stipulated the city would control the treatment system just like any other municipality and that it would be run under state law, not federal laws or Defense Department rules. It also required that the Army maintain a three-year advance reserve fund for the water cleanup operations.

The settlement, in turn, has been enforced with a series of agreements for how those payments are made. Those contracts recognized the need for both parties to have some flexibility, since it’s expected that the Army will be involved with water cleanup in New Brighton for at least 50 years, and likely much longer.

In 1992, the Army agreed to pay a $17 million lump sum to cover the city’s costs for 20 years. That agreement was extended until July 2015. Now the Army says federal law no longer allows for such long-term funding commitments. It wants to instead make payments annually when the current agreement expires.

The city argues that changes in statutes have no bearing on the settlement agreement; the Army disagrees.

“Making those long-term payments has been a cornerstone element of the agreement,” Lotter said. The Army has signaled some willingness to see the city’s side, he added.

Alan Greenberg, a Denver attorney representing the Army, declined last week to comment on the case. But in court documents, the Army makes it clear it has no intention of breaking its promise to pay for keeping New Brighton’s water safe. The water was contaminated by industrial waste when ammunition was made at TCAAP from the 1940s to the 1980s.

“The negotiations have been frustrating for both parties,” the Army said in a court document. “But the Army’s position in those negotiations is not a breach of its already fulfilled current obligations.” The Army also disputes the city’s use of reserve funds to pay for its legal costs, estimated at $1 million this year, documents show.

The city, however, argues that the Army wants to do much more than just change the payment plan. Not only is the Army trying to rewrite the settlement agreement terms, and its legal protections for the city, but it also wants to force Defense Department regulations on New Brighton’s water supply operation, Lotter said.

U.S. Rep. Betty McCollum, D-Minn., tried unsuccessfully to broker a settlement last winter.

“It would be my hope that an alternative solution could be found,” McCollum told the sides. “Litigation would be very costly to taxpayers, and there is no guarantee of an outcome better than the one that could be achieved through negotiations.”