Right, the fines don't matter.

What should have happened in the original agreement is that the fed pays for the sewers at a very cheap rate and the municipality does the work and owns it for eg 10-20 years.

That's actually a really common agreement. I don't know why DOJ had such a derp moment here and instead demanded billboards about health risks for people who don't have the money for basic medical care much less exploratory lab testing.