FERC's overreach creates anxiety, outrage among Lake homeowners

CAMDENTON, Mo. -- Blue sky, bright sunshine, a warm breeze, ducks on the water and waves lapping at the seawall.

Perfect -- this is why people live at Lake of the Ozarks.

So why are the people along Screech Owl Circle mad as hell?

Fighting mad. And scared and worried and not sleeping. They've been told that the homes they bought, some with the bulk of retirement savings, and have lived in for years sit on buffer land owned by the utility company that operates Bagnell Dam.

And now a federal agency has ordered those homes to be torn down or removed.

It's not just the Screech Owl homeowners on the Big Niangua arm.

Over the past 75 years, more than 1,200 homes were built within the utility project boundary, according to Ameren Missouri, which runs the Osage Hydroelectric Project.

Some of these houses have been in families for generations.

Screech Owl homeowner Dale Thompson can't believe what she's hearing, that the Federal Energy Regulatory Commission (FERC), the ultimate authority at the lake, says the homes have to go.

"We bought these houses, got all the permits, did what we were supposed to do, paid the taxes all these years, and now we're the ones being threatened," she said.

Russell "Sparky" Sharp jumped in. "If they (Ameren) own it, why haven't they been paying the taxes all these years?"

As pontoon boats puttered by, his wife, Joyce, added: "None of us want to believe that the federal government would let this happen."

The discovery happened when Ameren filed a new shoreline management plan as part of its license to operate the dam. The purpose of the plan is to ensure that development does not impede hydroelectric operations.

The buffer zone, required for lakes under federal supervision, is for purposes of safety, flood control and protection of natural resources.

Screech Owl residents received letters from Ameren, saying in part:

"While at present we do not plan to take any adverse action respecting your residence, we can give you no assurances as to the future," the letter said.

It's unclear why these homeowners got the notices first. But other affected homeowners will learn soon of the problem and when they do, who knows what could happen?

"In 26 years of practicing law, I've never seen anything like this," said Timothy Sear, an Overland Park attorney and lake property owner. He represents no one on this issue, and his property is not in violation.

Some think it could lead to one of the biggest squatter rights cases in the history of the country. That's another name for adverse possession, the legal provision that says if you live in a place for 10 years and nobody's objected, it's yours.

But these people don't want "squatter" labels. They paid for their houses.

Sear said the situation cries for a "political resolution" -- one encompassing action instead of thousands of lawsuits that could take years.

In the meantime, the affected property owners would be unable to sell their homes or leave them to their children. Should they pay taxes? Should they fix the roof? The lake economy could be greatly harmed, he said.

No question, said Chris Black, a Lake Valley resident.

"This will be a ghost town here," he said.

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So how did this thing happen over decades -- homes built where they shouldn't have been?

Seemingly, nobody noticed. Or if they did, they didn't care. Too much lake development was taking place. Too much building, too much money, too much swimming, boating, fishing and partying in the coves for anybody to get their trunks in a bind over lines on a plat book.

And here's another reason, a phrase not often used: too little red tape.

But however it developed, FERC, after receiving Ameren's proposed shoreline plan, ordered that all non-conforming structures -- 4,000 total, including homes, gazebos and docks -- be identified and "removed in a timely manner."

Homeowners' outrage came swiftly.

Ameren, under fire from both sides, quickly filed a motion asking FERC to reconsider the order, saying the commission's action was "arbitrary and capricious" and would cause hardship to hundreds of homeowners.

As to The Star's inquiries about what could happen to lake homeowners, FERC last week issued this brief statement:

"FERC's role is to ensure that the licensee is following the terms of the license, and approve shoreline management plans. It is the responsibility of the licensee to carry out the terms and conditions of the license, including the shoreline management plan."

The licensee is Ameren, which took over in 1997 after a merger of Union Electric and Central Illinois Public Service Co.

Jeff Green, the company's shoreline management supervisor, blamed the mess on 50 years of development with little oversight. He also tossed the issue back into the lap of FERC, which oversees the project because the dam generates electricity.

"Our hope is they strongly consider our request and do the right thing," Green said.

Homeowners think the utility is merely trying to deflect blame for the debacle that was likely its doing in the first place.

Green told The Star on Wednesday that the utility would be fine with most of the offending properties being grandfathered into compliance. That said, he added:

"I think at end of day, there will be some that will still fall onto our property" and have to be removed.

While the possibility of removing lake homes valued at a $1 million or more seems unimaginable, Jim Thompson, Dale's husband, says it could happen.

"Because of bureaucratic ineptitude, this thing can go south in a hurry, and we all lose our homes," said Thompson, or ...

"They can deed it back to us -- they can do that. But will they? Maybe not."

The U.S. senators from Missouri, Claire McCaskill and Roy Blunt, wrote a joint letter to FERC asking that a solution be found that doesn't punish homeowners.

Bruce Mitchell, executive director of the Camdenton Area Chamber of Commerce, called FERC's action a huge government intrusion. He doubted any of the structures impede Ameren's ability to produce power.

"Really, what right do they have to do this -- after all these years?" he asked.

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To find the beginning of where this went wrong, you have to go back to a time when there was no lake.

Back to the 1920s, when hundreds of engineers and surveyors set off into the rich bottom land of the Osage and the Big and Little Niangua rivers, an area that routinely flooded in springtime.

That made it ideal for a hydroelectric dam.

When the workers determined what land would be under water, they set about buying ground from farmers. But farmers didn't want to sell only what the project needed. Mainly because that bottom land was the best acreage they had.

Buy it all, farmers insisted.

Union Electric Land & Development did just that in most cases to avoid taking hundreds of farmers to court in condemnation procedings.

"So they ended up with virtually thousands of acres they didn't need for this lake," Sear said.

When the dam was completed in 1932, the land company deeded what would be under water -- and the buffer zone above -- to its sister company, Union Electric Light & Power. The top of the buffer was set by elevation above sea level.

Which gets us back to Lake Valley at the 14-mile marker on the arm of the Big Niangua. The lowest elevation where building was allowed was determined to be 670 feet, meaning that everything below that contour belongs to the utility company.

Here's something about a lake most people probably don't know: Water "stacks" behind a dam, leading to different levels across the lake.

Here's something about lake people: They don't like steps. Screech Owl residents walk out their back door and to the water's edge. Flat. Nice.

Not so nice anymore.

"The person who got a deed for that property got a piece of land that doesn't exist because it's all below 670 elevation," Sear said.

According to the July order from FERC, the encroachments can be found along much of the shoreline, which, at 1,150 miles, is longer than the California coast.

"You would think Union Electric or Ameren would have been paying attention, but there's probably plenty of blame to go around," Sear said.

Donnie Snelling, recorder of deeds for Camden County, said much of the early development occurred with little oversight.

"Corners were cut, banks weren't asking for surveys, nobody asked about setbacks," Snelling said. "A lot of stuff got built where it shouldn't have, and nobody noticed.

"Now we've got a hell of a mess down here. Families -- second and third generations -- all of a sudden don't have clear title.

"Yes, they're mad and worried. I don't blame them."

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The folks on Screech Owl say Jeff Green is a hard man to get on the phone. Sparky Sharp has even called a weekly radio show that Green appears on.

"I've called in so many times they know my voice and always say he's not there," Sharp said.

It was on Sharp's deck that homeowners met last week to vent about what's going on with Ameren and FERC.

Dale Thompson asked: "How are we impeding their ability to generate power?"

"I can't sell my house," Joyce Hudson said.

"We can't sell, we can't leave it to our children," Sharp added.

Actually, they can sell, but they would have to disclose the ownership flap.

"Who's going to buy it then?" Sharp asked.

They worry mortgage companies could call their notes.

"This is how we're living -- days of worry and sleepless nights," Hudson said.

Barb Lowtharp wrote a letter to President Barack Obama.

On a boat ride, Sharp, Fred Lowtharp and Chris Black pointed out houses that fall into the buffer zone.

"Look at that one," Lowtharp said. "That's a million dollar house and 670 (elevation) would put water up to the windows."

Black shakes his head at the whole thing, particularly the part of the order that talks about "cleaning up" and returning the lots to pre-existing conditions.

"Really? Knocking down these houses and seawalls and letting the cattails grow 20 feet high? Is that cleaning up?

"It's insane."

To reach Donald Bradley, call 816-234-4182 or send email to dbradley@kcstar.com.

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