HOAs struggle to pay for private dam repairs

By Deborah Goonan, Independent American Communities

Summertime is high season for enjoying activities on the lake. But, in many private communities across the U.S., deteriorated dams can no longer safely contain waters of manmade recreational lakes.

Most private lake communities are governed by recreation or lake associations through club memberships. Homes in many of these communities are also subject to covenants and restriction of a homeowners’ or condominium association. Assessments or fees to maintain the lake, beach, docks, and boat access may be either voluntary or mandatory.

The dam that controls the water level in the lake is probably the most important piece of infrastructure under the responsibility of private homeowners or members of a lake club. As a dam ages, it begins to break down, especially if the lake community doesn’t keep up with maintenance or structural upgrades.

Additionally, state regulations usually require unsafe or breached dams to be rebuilt to modern engineering specifications.

Many private dams are at least 50 years old, and are at increasing risk for failure during major storm events. Indeed, over the past several years, major named storms have overtopped or eroded thousands of privately owned dams, resulting in rapid drainage of lakes and dangerous downstream flooding.

In response, most state health, environmental, and conservation agencies have stepped up their efforts to inspect dams before they fail. As a result, members and homeowners’ of lake community associations have been required to reduce water levels or even drain their lakes entirely, until they have successfully repaired or rebuilt their dams to today’s higher engineering safety standards.

But here’s the hitch: It’s quite expensive to repair or replace a broken down dam. The price tag often exceeds $100,000, and can approach $1 million or more, depending on the size of the lake and the volume of water it is designed to contain.

For smaller or less affluent lake communities, the cost to rebuild can be too costly for members to bear.

But many communities will attempt to find a workable solution to keep or bring back their lake.

Public domain photo of Lake, location unknown

One such community is West Leigh II, Virginia. Their lake’s future is at risk, unless they make costly repairs required by state regulations. 

The owners of thirty-seven homes in the lake community are learning that the required pre-construction inspections alone cost thousands of dollars, before the HOA can even consider hiring a contractor to complete the work of rebuilding their dam.

According to a report in The Daily Progress, the community’s earthen Clover Dam has been out of compliance with safety standards since 2015. Like most small lake communities, West Leigh II HOA does not have sufficient money in reserve to repair Clover Dam.

Homeowners agreed to contribute $500 per home, per year for a decade, in order to raise $185,000 for repair. But Virginia Department of Conservation and Recreation (DCR) might not allow the association to delay repairs for up to ten years. And since engineering evaluations are still in progress, the actual cost to rebuild could be even higher than currently anticipated.

While DCR provides some grants to assist dam owners with the costs of up front evaluation, Virginia offers no other grants or financial assistance for actual reconstruction costs.

Essentially, state regulations are little more than unfunded mandates upon private property owners.

Regulations complicate repairs to storm-damaged Albemarle dam

BY ALLISON WRABEL

Jun 16, 2018
A neighborhood in Ivy is struggling with fulfilling necessary requirements before receiving state approval to repair a dam that was overtopped after heavy rains.

Thirty-seven homeowners in West Leigh II are responsible for the Clover Dam, which sits on Emerson Drive at the end of Clover Lake.

“We need to be able to make some emergency repairs to this dam so that it doesn’t continue to erode,” Steven Hiss, a board member of the property owners association, said last week. “We can work on compliance down the road, unless somebody’s going to cough up the money right now and we’ll get all this done at once. But I’m not holding my breath.”

According to the Virginia Department of Conservation and Recreation, the Clover Dam has been out of compliance since 2015 and will need to be inspected and meet other requirements before any repairs can be made.

A preliminary engineering report for the dam was completed in 2015, but the neighborhood did not have the funds for the additional reports and repairs that would’ve brought it into compliance.

Earlier this year, the neighbors voted to contribute to the dam fund at $500 per household per year for 10 years.

Hiss said he’s sympathetic to DCR staff because they are just responsible for enforcing policies, but he blames the legislature and the DCR for imposing onerous requirements.

“I know they have good intentions … but they’ve just put these requirements on so many private owners without necessarily thinking about how it’s going to actually get done when it comes to a couple of lot owners or just a small [property owners association] actually making these changes,” he said.

Read full article:

http://www.dailyprogress.com/news/local/county/regulations-complicate-repairs-to-storm-damaged-albemarle-dam/article_beddbe90-71b3-11e8-a9c1-6f3c584de709.html

 

Flood creek

In North Carolina, Devonwood-Loch Lomond Lake Association, the Arran Lake Homeowners Association, the Strickland Bridge Road Homeowners Association, and the Rayconda Homeowners Association, and eight residents of those HOAs, are suing the city of Fayetteville, in an attempt to force the city to pay for repairs to dams for their community lakes.

Plaintiffs in the lawsuit argue that the City of Fayetteville has used their community lakes to collect storm water drainage from upstream neighborhoods, by way of easements to lay storm water pipes which ran through dams and into their lakes.

The City claims that, the community lakes are privately-owned, and that, when filled to maximum levels, they provide no empty space to accept water volume from City neighborhoods upstream.

Thus, the City has refused to pay for dam repairs, insisting that they are on private  property.

Critics say that’s a rather weak argument. Why would the City find the need to establish storm water easements, and go to the trouble of installing pipes through earthen dams, if there were no anticipated benefit for the greater public?

Plaintiffs also point out that the City approved significant upstream development which spilled silt into their community lakes.

Notice that the Plaintiffs’ attorney invokes the Fifth Amendment of the U.S. Constitution, with regard to unlawful taking of HOA property without just compensation.

Residents sue Fayetteville to fix hurricane-damaged dams

Paul Wooverton, Fayetteville Observer

Posted June 14, 2018 5:40 P.M.

Updated June 14, 2018 8:16 P.M.

Homeowners from four Fayetteville neighborhoods filed a federal lawsuit against the city last week to try to force the city to rebuild dams in their communities that were damaged or destroyed in Hurricane Matthew.

Although the dams are privately owned, the residents contend the dams and the lakes that once were in their neighborhoods had become part of Fayetteville’s stormwater and flood-control infrastructure. And as such, they say, the city should replace them.

A lawyer for the city declined on Thursday to comment on the litigation.

The lawsuit was filed on June 8 by the Devonwood-Loch Lomond Lake Association, the Arran Lake Homeowners Association, the Strickland Bridge Road Homeowners Association, the Rayconda Homeowners Association and eight residents of those neighborhoods.

The homeowners argue that the lakes were already helping the city as a whole, lawyers Woody Webb and Matthew Van Horn of Raleigh said on Thursday.

The city obtained easements to pipe stormwater across residents’ property and piped it to the lakes, the lawyers said. That made the lakes become part of the city’s stormwater infrastructure, Van Horn said.

Further, Van Horn and Webb said, the city approved upstream development that caused silt to end up in the lakes.

As a result, the city has illegally taken the residents’ land without just compensation, the lawsuit says.

Read more:

http://www.fayobserver.com/news/20180614/residents-sue-fayetteville-to-fix-hurricane-damaged-dams

 

Drained Lake
A dry lake, location unknown. (Morguefile.com)

Meanwhile, in Pennsylvania, HB 431 has been introduced as a way to help private owners, including HOAs, to rebuild their dams.

HB 431 proposes a self-funding mechanism for private dam owners, requiring participants to contribute annually to a state-level bond fund that can be accessed by communities as needed, when the fund exceeds $1.5 million.

Of course, there’s no guarantee that most owners of private lakes, including many HOAs, will choose to participate in this type of program. One requirement of eligibility for the program is that the private dam owner must “be in compliance with related DEP regulations and inspections, including a current approved emergency action plan.”

Here’s the relevant excerpt from the bill, as introduced:

Eligibility.–Financial assurance assistance through the program shall be made available to an owner provided that the owner:
(1) Demonstrates compliance with the Dam Safety and Encroachments Act and the regulations promulgated under that act, as determined by the Department of Environmental Protection, including annual inspection reporting, payment of registration fees and compliance with an approved emergency action plan.

So, in other words, the private owners most in need of financial assistance to bring their dams into compliance, will likely not be eligible for the revolving loan. As currently drafted, HB 431 ensures that the state will never have to play a role — no matter how small — in helping private owners of dam infrastructure that is in serious need of repair.

Furthermore, those private owners, including HOAs, that do meet standards for financial assistance can only receive a 10-year loan for 50% of the total funding needed, up to a maximum of $500,000.

The fund balance cannot dip below $1 million, so the only way it will work as intended is if the vast majority of private owners and HOA choose to participate in self-funding. And, even then, the program might not be sufficient to motivate private owners to make necessary repairs to, or removal of, unsafe dams, putting public safety at risk.

 

Brown’s Bill to Help Private Dam Owners Included in the Fiscal Code of the 2018-19 Budget

JUNE 26 · PUBLIC

HARRISBURG – Rep. Rosemary Brown’s (R-Monroe/Pike) legislation to create the Private Dam Financial Assurance Program was included in the 2018-19 fiscal code.
Through this self-funded program, a one-time $1,000 fee, and an annual fee of 1 percent of the bond amount required by the Department of Environmental Protection (DEP) will be deposited into the fund. This will establish a revolving loan program to provide maintenance and repair assistance once the fund’s balance is equal to, or greater, than $1.5 million.

According to new DEP regulations, private dam owners are required to have a financial responsibility tool in place in the event their dam would need to be breached. Although this protects the state, it is not possible for many private dam owners to obtain these extremely costly bonds based on the makeup of their organizations, which often include homeowners’ associations (HOAs). And oftentimes, financial institutions do not consider these organizations to be stable enough to receive bond coverage.

“I have been working with private dam owners from across the state, DEP officials and other related departments for the last two years to gain a full understanding of the issue and develop solutions to comply with regulations,” Brown explained. “This legislation, House Bill 431, provides financial assurance for the private dam owners so they can meet the financial obligations imposed under the Dam Safety and Encroachment Act and makes it financially more manageable for the private dam owners. We want to maintain the beautiful lakes we have.”

Participants in this program will be required to be in compliance with related DEP regulations and inspections, including a current approved emergency action plan.

Read more:

https://m.facebook.com/notes/pa-state-rep-rosemary-brown/browns-bill-to-help-private-dam-owners-included-in-the-fiscal-code-of-the-2018-1/2038005366233924/

 

Read HB 431:An Act establishing the Private Dam Financial Assurance Program and the Private Dam Financial Assurance Fund

Track HB-431 here:
http://www.legis.state.pa.us/cfdocs/billInfo/billInfo.cfm?sYear=2017&sInd=0&body=H&type=B&bn=0431

 

 

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One Reply to “HOAs struggle to pay for private dam repairs”

  1. We, the residents of Holiday Lake Estates, in Goodrich TX, are currently living this nightmare. Harvey destroyed a great deal of our waterway systems and this is a low income neighborhood that reflects this fact in the property owner association accounts. There is no money to fix it all and we are being told, by our local connections, that we, as a POA, do not qualify for any FEMA, Community Block Grant, or TDEM (Texas Dept. of Emergency Management) funding. Over 65 homeowners in this subdivision had water in their homes during Harvey and a great many of them are still trying to rebuild their homes. Some residents, just picked up and walked away. They could not afford the expenses. Honestly, I have to ask myself, why rebuild if the dam system is going to fail? It is a horror story that was not expected. Harris county seems to be getting help, but our county, not so much….

    Liked by 1 person

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