RISING SUN -- For more than 30 years, the residents of Octoraro Lakes have played in and around the picturesque 7 1/2 -acre lake that is the centerpiece of the former vacation resort.

But the lake's days may be numbered, and the Cecil County community faces an identity crisis. Residents must come up with hundreds of thousands of dollars to save their signature landmark, or watch it turn into a marsh -- "a mosquito pit," as one homeowner says.

The Maryland Department of the Environment has announced that by year's end it plans to drain the largest body of water at the heart of Octoraro Lakes because its 30-foot-high earthen dam is unsafe. The news has rocked the community's 120 families since it reached them a couple weeks ago.

"If that lake gets drained, part of me gets drained," says Gandhi Hurwitz, whose family has owned a vacation home here since 1974. The office supply salesman said his 5-year-old daughter cried when she heard that the lake was in jeopardy.

State officials say they have no choice. The community has been on notice for decades that the dam that created the lake needs repairs, they say. Now a house has been built right below the dam, where it could be washed away if the impoundment breaks.

"If the dam were to fail, [it might] kill somebody," says Hal Van Allen, a dam safety engineer with the environmental agency. "We do not want to see it go through the winter and have storms without having done this work."

About 60 residents gathered at a county library branch here Thursday evening to consider their options. Some carried hand-lettered signs protesting the lake's impending demise, and they set up a save-the-lake chant for a TV news crew.

"It's not called Octoraro Lakes for nothing," says Eric Washburn, president of the community association. "Without the lake, we'd be Octoraro Swamp or something."

Residents say they swim in the lake in summer, catch largemouth bass and bluegill and enjoy watching beavers, Canada geese, ducks and even a bald eagle drawn to the water.

"For a lot of people, it's just a quiet, peaceful place to sit and meditate, or just enjoy the view," Washburn says.

State officials say the dam was improperly built when the original developer converted a couple of farm ponds into the two lakes -- the 7 1/2 -acre centerpiece and a much smaller pond -- that define the community. The structure's spillway isn't large enough to release sufficient water when storm runoff overfills the lake, says Ken Pencyl, an environment department official.

Wrangling since 1968

The state has been trying to get the dam fixed since 1968 but has been stymied by legal wrangling between the developers and property owners over who must foot the bill.

Three years ago, the Cecil County Circuit Court ruled that all property owners in the 64-acre subdivision are responsible for the dam's repair. The community association then settled out of court, agreeing to take ownership of the lakes and fix them.

Washburn says the community had been working with state officials for the past three years to make the repairs. But work has been delayed by confusion over exactly what is needed and what it will cost homeowners.

"We were naive," he says. "We'd never done anything like this before."

$330,000 for repairs

An engineering consultant recently came up with a $330,000 repair plan, and the state was prepared to finance the project with a low-interest loan. Homeowners would have to pay about $1,500 each to repay the loan, which the majority seemed willing to do, Washburn says.

Until a few weeks ago, state officials had been patient with the community, even though it was two years late starting the work required by the court settlement. Officials figured the worst that could happen -- if the dam broke -- was a washout of Octoraro Creek, which flows past farms and woods on its way to the Susquehanna River.

The house below the dam

But a few weeks ago, inspectors discovered that a house was being built on one of four vacant lots at the base of the dam. Inspectors found muskrat burrows in the embankment near the house. They fear that the animals' tunneling has weakened the dam enough that it might rupture, releasing a 10-foot-high torrent of water down the hill toward the dwelling.

Residents are angry that a house could be built endangering its occupants and jeopardizing their lake.

"It doesn't take a rocket scientist," says Charles Davidson, a wastewater treatment plant operator who moved his family into a house with a lake view two years ago. "I don't know how it got zoned or approved."

State officials say they assumed the lots were unbuildable. But Al Wein, Cecil's planning director, said the lots were recorded properly, and there are no county regulations prohibiting building below an unsafe dam. Nor, apparently, is there any state restriction.

The owner, Alan McLoughlin, says he had no idea the dam was deemed unsafe when he signed a contract to have the house built. Neither the real estate agent nor the builder, who owns several lots in the community, told him anything about it, he says.

"The main selling feature for us was this lake," says McLoughlin, a surveyor. "It's certainly blown up in our faces," he adds, with nasty messages left on his telephone answering machine from angry residents.

Now, state officials say, the dam may need more extensive -- and more costly -- work, especially if more homes are to be built on any of the other vacant lots at its base. The community association has contracted a $3,000 study of the dam's breach risk, which could indicate how much more homeowners would need to pay to save the lake.

But that study won't be finished for at least three weeks. State officials say they plan to begin draining the lake by then, leaving the community little time to decide what to do. If the community does not go ahead with repairs, then the state will remove the dam and bill homeowners for the cost.

A wetland alternative

As an alternative, environmental officials have offered to convert the drained lake into a freshwater wetland, and they sweetened the proposal by telling homeowners it would not cost them anything. The project would be financed by the state's wetlands compensation fund, into which developers must pay when they choose not to replace marshes they bulldoze.

Residents who enjoy fishing and swimming in the lake don't seem enthusiastic over the wetland proposal, which would shrink the lake to a one-acre pond barely one foot deep. "I think it will smell," says Hurwitz, who lives next door to the newly built house. "It will breed mosquitoes."

But Washburn, noting that only about 20 homeowners have lakefront lots, says many others may agree to the state's wetland plan because they wouldn't have to pay. "Quite frankly, it's going to be difficult to convince people to up the ante and save the lake when not everyone wants to save it," he says.

Pub Date: 11/18/98

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