Muncie Star Press: BSU’s Michael Hicks on Lessons of Mounds Lake downvotes

Overall, an excellent summary of the critical points, although Professor Hicks neglected to give due recognition to the hard-working coalition of grassroots folks (comprised mostly of politically-powerless “average citizens”, environmentalists, etc.) who, for 2.5 years, painstakingly organized and educated their communities and elected officials about the dam plan.  Their efforts, in addition to those of “many prominent local business leaders”, were key.

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Hicks: Lessons of Mounds Lake project downvotes

 

Two town council votes this month ended any realistic chances that Mounds Lake would ever be built. The very timely demise of this proposed 2,100 acre reservoir in Madison and Delaware County offers some useful lessons.

The lake, which would submerge portions of the City of Anderson and extend up the White River to Yorktown was first proposed as an economic development panacea. Without any supporting analysis (or apparent legal advice), the supporters of the project approached the Army Corps of Engineers and the EPA with the plan. They also requested state funds to perform the first round of a feasibility study. Funding analysis of regional economic development efforts is a wise and appropriate use of state dollars. Without that support, many problems would not have surfaced.

The preliminary feasibility study was underway when the Corps of Engineers and EPA walloped the initial plans. As any novice environmental lawyer can attest, it is illegal to dam the waters of the United States for local economic development. So, upon release of the feasibility study the purpose of the dam miraculously changed from economic development to water supply.

A singular problem with this approach is that the potential buyers of water in central Indiana publicly stated they neither needed nor wanted the water. A second problem was that the preliminary feasibility study either omitted or assumed away key features that would have hurt their effort. So, this study didn’t tell residents whether they’d have lakefront or swamp front property. The study neither conducted any core drilling of a known landfill nor provided a realistic assessment of the costs of wetland reclamation. Now, I don’t fault the consultants for not doing these things. Consultants are paid to answer questions. The problem was that the reservoir proponents wanted the study for reasons similar to why a drunk wants a lamppost—for support, not illumination. These questions could’ve been addressed for less money than was spent on marketing the reservoir.

The myriad problems with the proposal came to light in a democratic process that spanned several months. Experts on hydrology, geology, archeology, biology, environmental law, economics and others weighed in on the project. In the end, analysis and fact—much of it uncovered in this study—doomed the project. But it was concerned citizens, including many prominent local business leaders, who led the opposition. This is a great lesson in civics, but it isn’t the most important lesson from the project.

Anderson, Indiana has most of the ingredients of economic success. It has many good neighborhoods and a downtown that is pregnant with commercial opportunity. Most importantly, Anderson sits in the spreading footprint of one of the most rapidly growing cities in the world. Like many communities around it, Anderson should be experiencing significant population growth. It has not for the simple reason that its schools have long been among the worst performing in Indiana.

If the wise folks in Anderson had spent half the effort at crafting a top flight school system that they spent on Mounds Lake, their economic woes would be behind them. That is the real lesson of Mounds Lake.

Michael Hicks is the George and Frances Ball Distinguished Professor of Economics and the director of the Center for Business and Economic Research at Ball State University.

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