It seemed like a sweet deal.
When Paul and Deborah Malone bought an old campground northeast of Decatur in 1998, the seller threw in the 30-acre lake for $1.
In its heyday the lake, up an embankment off County Road 200 East in Adams County, had been a destination for many. Boats rented for $2 a day, campsites with electricity for $6.50. The camp offered fishing and swimming, with a lifeguard on duty from noon to 8 p.m. There was an amusement park, too.
Three decades later, all that remains are an old cinderblock building surrounded by overgrowth, a scattering of mobile homes and a row of seven or eight houses built atop that 15-foot embankment.
Its that bank – an earthen dam, actually – that has the Malones wanting to give back their $1.
The houses, some of them decades old and one with a basement, should never have been built on the dam, classified by the state as high hazard capable of causing death if breached. The dam could be compromised; the last official inspection 12 years ago found problems, and remedies could be costly.
Perhaps most remarkable is that the dams spillway, the area that is supposed to let excess water out, runs under one of the houses.
Citing that and other safety concerns, the Indiana Department of Natural Resources won a court judgment in June against the Malones and the owner of the house built over the spillway, Paul R. Hammond, demanding repairs.
The Malones say they have no money and dont own the dam, anyway, just the water next to it. Several people own property on the crest, including Hammond, who said he is working with the DNR to find a solution, though nothing has been resolved.
Its been one headache after another, Paul Malone said.
Built in the early 1940s by the Depression-era Works Progress Administration that put people to work, Saddle Lake has also been known as Clems Lake and Shroyer Lake through the years. The DNR wields authority over it and other dams based on water capacity.
About 75 percent of the embankment crest was lowered 4 feet in 1954 without state approval, according to both a 1980 inspection for the U.S. Army Corps of Engineers and the last official state inspection in 2000. Construction of the houses followed.
While not specifically prohibited by state and federal laws, building on a dam goes against common practices, according to the DNR.
Normal activities associated with home construction – basements, crawl spaces, footers, buried utility lines, water and sewer lines, septic systems – can contribute to weakening a dams structural integrity and create possible seepage flow pathways that add to the risk problems if a home is built on an earthen embankment, DNR spokesman Phil Bloom said in an email.
Because the lawsuit remains open, the DNR declined to answer questions specific to the Saddle Lake Dam.
Paul Malone said he believes the first house on the crest was built in the early 1960s. County building permits continued to be granted for more houses. Most recently, a new house was noted in the 2000 dam inspection, and a pole barn was built after 2005.
Neil Ogg, Adams County building commissioner, acknowledges the pole barn was a mistake.
In retrospect, that permit probably should not have been issued, Ogg said.
But Ogg, who referred to the dam as more of a non-threatening dike, said the county was unaware of the states issues with Saddle Lake until they arose while the county compiled a comprehensive building plan in 2003.
While maintaining the shallow lake doesnt appear to pose much of a threat, Ogg said the county recognizes the need for a building moratorium.
We know now we cant allow this to go on, he said.
Just how much of a threat the dam poses is unclear.
The 1980 inspection found the dam in generally good condition but its spillway inadequate and deteriorating. Earth tremors could cause minor damage, it stated, but the inspection found, no evidence of excessive settlement, cracking or slope instability.
The spillway under the house, represents a potentially hazardous condition, according to the inspection. And In the event the dam were overtopped and erosion of the downstream slope occurred, there is a possibility that the dam could fail depending upon the depth and duration of the overtopping flow.
The inspection in 2000 found the dam in conditionally poor shape, the middle grade in a five-grade scale. It also noted problems with the spillway similar to those identified 20 years earlier.
The inspection asked for trees to be cleared on the entire embankment, the spillway repaired and an emergency plan written in case the dam failed.
But in the 12 years since that report, little if anything has been done to repair the dam, according to the DNRs recent lawsuit. While state law requires owners of high-hazard dams to submit professional inspections every two years, none have been done since 2000.
In meetings with the Malones and Hammond in 2007 and 2008, the DNR told them to upgrade the dam and spillway. The alternative would be to lower the lake level and excavate an emergency spillway to remove the dam from DNRs jurisdiction, according to DNRs violation notice sent to the owners last year.
Together the owners face fines of up to $10,000 a day for violating state law. The Malones and Hammond say the DNR would prefer not to have jurisdiction, and so far no fines have been issued.
The Malones, who live across the lake from the dam, own the lake bottom, the upstream slope of the dam and the spillway inlet, according to the DNR. The Malones contend they own the few acres of land their mobile home sits on and lots of water, nothing more.
Because it is shallow, lowering the lake to satisfy the DNR would leave nothing but mud, Paul Malone said. Besides, the spillway seems to be working properly because it survived a 100-year flood in 2003, he added.
If it didnt do anything with a 100-year flood well have to have something more than that, Malone said, and I dont think well get something more than that.
Malone said he has heard it could cost as much as $50,000 to repair the dam. Disabled and on a fixed income, Malone said the state should target those with property on the dam crest or even the county, which allowed the houses to be built.
If they want to fight me all I can say is, Hey, its yours. Do what you want with it, he said.
The DNRs Bloom said the agency has intentionally dealt only with owners of Saddle Lake property where reconstruction likely will be needed.
In addition, we know that sometime in the 1990s, the federal Soil Conservation Service – now called the Natural Resources Conservation Service with the U.S. Department of Agriculture – met with many property owners and encouraged them to form a lake association, he added.
Whatever happens is likely to affect Hammonds house over the spillway.
Joe McAlhaney, 32, who rents the house from Hammond, said he wasnt aware the spillway conduit went from the back of the house, under the garage, under the road in front of the house and then into a farm field across the road. But hes not concerned.
Im just kind of surprised theyre worried about it, he said. It doesnt seem like its going to be too big of a worry.
Hammond also doesnt seem too worried. The lawsuit, he said, is on hold, just to figure out what to do with that spillway.
He expects a settlement with the DNR to be reached next year. While it could mean an expense for him, money hasnt been a factor in discussions so far, he said.
I think its going to cost a little, he said. But $1,000 or $2,000 to get it out of jurisdiction is fine by me.