UPDATE: Liberty University will not pay for upgrades to Bedford County lake

The future of state policy could hinge on what happens at Ivy Lake in Forest.

State regulators believe the lake's dam is insufficient and needs improvement.

"Those regulations are really bad policy and they may be illegal," said David Corry, general counsel for Ivy Lake's owner, Liberty University.

LU officials have sent a letter to the Virginia Department of Conservation and Recreation, challenging the state's findings and stating the school will make no plans to upgrade the dam.

"The cost of (making the upgrades) is greatly out of proportion with the value that lake has to the university," said Corry.

It would cost roughly $2 to $3-million dollars to make the state mandated repairs.

When the issue first came up last year, Liberty offered to split the cost with Ivy Lake homeowners.  Last week a group of lake residents contacted Liberty, saying they believe it's the school's responsibility to pay the entire bill.

No one from the homeowner's group wanted to go on camera with WDBJ7 Tuesday.  One person we spoke with off camera believes Liberty, with nearly a billion dollars in net assets, can easily afford the repairs.

Corry disagrees.

"Two to three million dollars is a lot of money, no matter who and no matter what," Corry said.  "There are other places we can invest that money a little closer to campus."

State regulators could force the lake to be lowered or drained, if the repairs are not made.  Liberty has no plans to take those steps on its own.

Original Story June 5:

Clean water and peaceful surroundings have led hundreds of people to make Ivy Lake in Bedford County their home.

"We've enjoyed the beauty of it and the wildlife associated with it," said David Roberson, who has lived at the lake since it was constructed nearly 30 years ago.

It wasn't until last year that Roberson learned his beloved waterway was a hazard.

"I would have to say we were not pleased at all about that," Roberson said.

Not pleased, because fixing the safety risk carries a hefty price tag: nearly $3-million.

"To find out that was a possibility was something that really upset us," said Roberson.

The dam that holds back Ivy Lake is made of dirt.  State regulators believe a concrete spillway should be installed, to maintain the flow of water in the event of flooding.

When Roberson learned about that requirement, he did a little research.  He's a retired engineer and felt the state's regulations were unnecessary.

"It's a huge burdon being placed on one particular capital asset, which I think is not justified," Roberson said.

State officials believe the dam should be able to withstand a large scale weather event: more 30-inches of rain falling at one time.  That happened in 1969 when Hurricane Camille devastated Nelson County, but that was a rare event that experts say only occurs once every 1-thousand years.

"It's really a highly unlikely event," said Lee Beaumont, vice president for auxillary services at Liberty University, which owns the lake.

LU has spent more than $100,000 dollars to study the Ivy Lake dam.  It believes the structure is safe and that the state is taking its rules too far.

"It's very a unreasonable expectation that we're going to receive that amount of rain in that short of a time," Beaumont said.

"You really can't plan or prepare for every possible environmental situation that might arise," said Roberson, who joined his fellow homeowners in penning a letter to Governor Bob McDonnell.

The Ivy Lake group is asking the Governor to repeal the safety regulations or make an exception for existing dams.

"We're hoping the Governor will come in and instruct people to do things that make sense," Roberson said.

Ivy Lake isn't the only one effected by these regulations.  At least 15 others around the state are facing the same issue right now.

Roberson says changing the regulations would save around a billion dollars, by avoiding costly repairs to dams that are currently out of compliance.

Click here to read a letter to Governor McDonnell about dam regulations.