"Capture a Lake Bonnie memory," the flier reads. Tucked away "in the heart of the Eastern Shore," the wooded campground in northern Caroline County offered swimming, fishing and boat rentals on a 28-acre man-made lake. It was, says owner Gail Litz, a "home away from home" for dozens of families, many from Baltimore.

Memories are all that's left now of Lake Bonnie Campsites. The lake, the heart of the campground, was declared unfit for swimming or wading in 1996 because of sewage leaking from failing septic systems in Goldsboro, about a mile away. The Maryland Department of the Environment ordered the town to build a public sewer system or come up with an alternative to stop the pollution. The town agreed to pay fines of $100 per day if it didn't meet the deadlines or requirements of the state's consent order.

Fourteen years later, the pollution continues unchecked. No fines have been collected. The lake remains contaminated.

"You can smell it in the summer; it's horrible," said Litz, 61. "It's really heartbreaking."

Litz has filed suit in Caroline County Circuit Court, seeking an injunction that would require the town and the county to halt the seeping sewage that is fouling her lake. She's seeking $7 million in compensatory damages from the town, the county and the state for the harm their inaction has done to her livelihood. She closed the campground four years ago, after watching business dwindle since the lake was put off limits to swimming, and now faces foreclosure.

"I think it's really unbelievable that the government identified the problem and then failed altogether to pursue it," said Philip W. Hoon, her lawyer.

The inaction is all the more remarkable, Hoon adds, because Lake Bonnie drains into the Choptank River, a Chesapeake Bay tributary that is in worse shape than the bay.

Most of the nutrient pollution fouling the river comes from fertilizer and animal manure washing off farmland, scientists say. But some evidently is coming from failing septic systems.

Town, county and state officials insist that they have doggedly pursued a solution to the town's leaking septic tanks over the years but say they have been stymied by a lack of funding and a remedy the community can afford. What's needed, they say, is a sewer system to pipe the waste to a treatment plant, where disease-causing bacteria can be eliminated and nutrient pollution greatly reduced. But with just 216 residents in about 84 households, the community is too small to be able to pay to run, much less build a wastewater plant, they say.

"It hasn't been for lack of trying to find a solution," said Virginia Kearney, the MDE's deputy water management director. "It's lack of being able to come up with a viable solution. ... It's a tough one."

Grappling with enforcementEnvironmental activists acknowledge that the problem is complicated by the town's small size and lack of affluence; Caroline is among the state's poorest counties. But they say it's another example of Maryland's failure to protect its waters and its residents from polluters.

"It's on MDE's back," said Scott Edwards, director of advocacy for the Waterkeeper Alliance, an international coalition of water-quality watchdog groups. "The fact that they've sat and done nothing for 14 years, that's outrageous."

The environmental group, which is not a party to Litz's suit, petitioned the Environmental Protection Agency late last year to strip the state of authority to enforce federal clean-water laws, complaining that the Department of the Environment was lax in its oversight of permits to discharge pollution into streams, rivers and the bay.

State officials say they've kept the pressure on water polluters, despite shortages of staff and funds. The agency's operating budget has shrunk by nearly one-third in the past three years. But the number of enforcement actions taken last year increased by 7 percent overall, according to the agency's 2009 report, while water and wastewater actions increased by 47 percent.

Even so, activists note that the Goldsboro case isn't the first of the state's cleanup orders that has dragged on for years without resolution. Last year, the Chesapeake Bay Foundation and the Baltimore Harbor Waterkeeper threatened to sue the state and the owners of the steel mill at Sparrows Point, accusing them of failing to live up to a 1997 consent decree that required remediation of soil, water and groundwater contamination there. MDE officials have said the cleanup has been complicated by the steel mill's revolving-door ownership.

MDE is enforcing nearly 200 consent orders, decrees or agreements, 55 of them involving water cleanups, according to agency spokesman Jay Apperson. Last year, in defending lack of progress on another consent decree, MDE spokeswoman Dawn Stoltzfus said that with limited staff and resources, the agency gave priority to cases that pose threats to public health.

In the Goldsboro case, MDE declared in its 1996 consent order that "numerous private septic systems" in and around the town "are or could become prejudicial to health or the environment" by releasing pollution into surface or groundwater.

Septic systems neutralize disease-causing bacteria in human waste. An underground tank collects what goes down the toilet and sink, where it partly decomposes. Then the wastewater seeps into the soil, where pollutants are filtered out.

But in northern Caroline, the water table is so near the surface that many household septic systems do not work properly. As a result, bacteria- and nitrogen-laden wastewater has been seeping into drainage ditches and nearby streams, which flow into Lake Bonnie.

A search for solutions Town officials have been talking about what to do about their residents' failing septic systems since the 1970s, records indicate, when up to half the community's systems were either known or suspected to be polluting. Another survey in 1985 found 79 percent of the systems failing, improperly functioning or completely lacking sanitary facilities.

According to a 1988 county health department letter obtained by Litz's lawyer, the town's engineer drew up a plan in 1985 to build a sewage facility, but residents rejected it. Officials suggest that the cost was daunting and that it might have been difficult to convince some residents that they could be causing the problem, since much of the pollution was not visible, seeping into the streams via groundwater.

But the county environmental health director at that time, Lester W. Coble, warned that many drinking-water wells also were showing "significant nitrate levels," probably as a result of contamination from failing septic systems. Coble urged development of a public water system as well as a sewage system. Nitrate-rich water is dangerous for infants less than 6 months old - it can cause shortness of breath and "blue-baby syndrome," which can sicken or kill.

Earlier this decade, a developer offered to provide the town with a sewage treatment facility if he could build 500 homes there. The town annexed land for the development, but the county blocked the plan. John W. Cole, president of Caroline County's Board of Commissioners, said he doubts whether the proposed facility would solve Goldsboro's problems.

County, state and town officials say they've continued to search for a solution, but that with three other nearby small towns - Henderson, Marydel and Templeville - also suffering septic system failures, they are attempting to craft a regional remedy. A water and sewer authority was formed for the northern part of the county, and last year an engineering firm proposed building a sewage treatment plant in Goldsboro and piping wastes from the other towns there. The project would cost $21 million.

But Cole said Caroline County cannot afford to underwrite a project that large.

"We're hard-pressed. We don't have a spare nickel. Our capital budget is nonexistent," he said.

So, officials are looking to fix the towns' problems in phases, with Goldsboro first. This year, the county submitted a plan to the state Department of the Environment to hook the town's homes to a sewer system and pipe their waste to a treatment plant in Greensboro, six miles away. That would cost an estimated $4.7 million, which local officials hope would be covered by state and federal grants. The town and county would put up nothing.

"We just have to be reliant on some type of funding agency," said Cheryl Lewis, Goldsboro's part-time town manager. "We already know it is not possible to do something for under several million dollars. Divide that by 84 [households] and it's obvious it's something they cannot pay for."

A family's struggle Litz's lawyer said he feels some sympathy for Goldsboro's residents, and he faults the state for not stepping up sooner.

"How these things are paid for, that's a tough question," Hoon said. "But there's been hundreds of millions of dollars spent on the bay ... and it's like nobody ever cared for little old Goldsboro."

Cole, the county commissioner, and Kearney, the state environmental official, expressed confidence that a solution would be found, though each said it could take time. Cole said he doubts Litz's lawsuit will help.

Litz, who grew up in the area, said she was reluctant to sue and stir up controversy. But with the campground closed and unable to generate enough income from other pursuits, she's facing foreclosure on her family's property, having fallen behind on a bank loan. She said she tried reviving the campground a couple of years ago with a "water play park," proposing to put in a swimming pool with slides and a wave machine. But she said she couldn't afford the soil testing that the lender demanded upon learning that the lake was contaminated. She's tried to sell the property, without success.

"It's been one thing after another," she said. "This was my children's inheritance."

Even if Goldsboro fixes its leaking septic systems, Hoon said, Litz and her family deserve compensation for the damage the pollution caused their business and their property.

A consultant said that to clean the lake, it would have to be drained and dredged to remove bacteria-laden sediment, at an estimated cost of more than $2 million.

Litz's son, Travis Butler, isn't apologetic about seeking damages.

"They won't do anything to help us," said the 28-year-old landscaper, who moved back to the campground recently with his wife and three children. "They caused us to lose our lake, which was our recreation and our business. ... It's in our Constitution: You have a right to protect your own property."