Residents around Lake of the Ozarks upset by order to move homes

CAMDENTON, Mo. -- Nearly every year, Patsy Riley has gotten unsolicited offers for her house on Missouri's Lake of the Ozarks with its spectacular views of tree-lined bluffs and its ample shoreline, but she never wanted to leave. Now, she and hundreds of her neighbors wonder what will become of their homes after a federal agency declared that many structures built close to the lake may have to go.

The Federal Energy Regulatory Commission, citing restrictions on private developments around dams, says thousands of residences, decks, patios and boathouses appear to encroach on land belonging to the hydroelectric project in violation of federal regulations.

The announcement has triggered panic in the area's lakefront communities and led to a growing battle among regulators, a utility company, land attorneys and the state's congressional delegation. Officials say they are searching for a way to settle the issue without mass evictions.

"We are mad as hell and we're not going to take it anymore," said Riley, who has lived at the lake for more than 30 years and estimates about half of her neighborhood is threatened.

The dispute pits the government's rules for hydroelectric projects against the potential vagaries of land records and private transactions that go back more than 80 years. Riley and other property owners say they have legal deeds to their land that permitted construction. The agency says it has regulations protecting the lake's recreation, scenery and environment against development.

The winding, 93-mile-long Lake of the Ozarks was created in 1931 by the Bagnell Dam and Osage hydroelectric project, and has become a playground for water sports enthusiasts and vacationers. The thickly wooded shores and hills are dotted with houses, resorts and weekend cottages.

Patsy Riley stands Oct. 31 on the dock behind her family's central Missouri lakefront home, where she has lived for three decades, on the Lake of the Ozarks near Camdenton, Mo.

The problem with the lakefront property arose when Ameren Missouri, the power company that owns the project, applied to the Federal Energy Regulatory Commission for a new 40-year license to operate the dam. A required shoreline plan noted that some structures had been built over time on some of the utility's property for the dam, in many cases when Union Electric Co., an earlier form of Ameren, was the owner. How the property was sold was not clear. But the utility had no problem with many of the structures.

FERC objected, however. "In the majority of cases, the existing non-conforming structure/encroachment should be removed in a timely manner and the site restored to its pre-existing conditions," the agency's ruling last summer said. For hardship cases, regulators said Ameren could propose allowing some homes to remain temporarily or could seek an adjustment in the property's boundaries.

Property now worthless

Homeowners say the ruling leaves their property worthless.

Riley, a retired special education teacher, said the ranch-style house she bought 32 years ago was valued at about $350,000 but now would be impossible to sell. No matter what happens, Riley said, she is not leaving.

Other residents were so alarmed that, rather than watch a critical sixth game of the World Series featuring their beloved St. Louis Cardinals, hundreds turned out for a community meeting that lasted for hours.

The utility has proposed shifting the project's property boundaries to get many of the residences out of danger.

"It is difficult to understand how this collective drain on socioeconomics resources in this region -- financial and otherwise -- is justifiable, especially given current economic and housing market conditions," Ameren officials said in a brief filed recently with the federal agency.

A FERC spokeswoman declined to comment to The Associated Press. Previously, the agency told The Kansas City Star in a written statement that "FERC's role is to ensure that the licensee is following the terms of the license."

Missouri's members of Congress have insisted that the agency reverse itself.

"It's outrageous, it's infuriating and it has got to be stopped," said Rep. Vicky Hartzler, whose district includes part of the lake.

Glenna Hulett, who has lived at the lake since 1958, said she loves her panoramic view but worries that her condo will be worthless unless FERC relents.

"We're basically sitting on an investment that you can't sell. It doesn't have any value," Hulett said. "It's an awful lot of uncertainty."