ROCK SPRINGS -- Wyoming officials are close to signing an agreement that will allow state engineers to reinspect more than a dozen downtown homes that were damaged here two years ago in a controversial ground-pounding subsidence project.

Residents of the "Tree Street" neighborhood have been battling the state's Abandoned Mine Lands Division over the ill-fated mine subsidence project, and the state's first settlement offers to repair the damage.

AML officials were hesitant to talk about the ongoing negotiations with attorneys for the homeowners during a meeting here Tuesday night.

The meeting centered on the preliminary findings from an investigative drilling project in the neighborhood that resumed last month. Engineers are trying to determine the extent and cause of subsidence under the Tree Street area.

The study showed continued movement in the old mine workings beneath the neighborhood and that the subsidence risk in the area remains high.

AML administrator Rick Chancellor said the agency hopes to have a negotiated agreement soon with the homeowners, which should lead the way to new inspections.

"The (state) attorney general is working with the (homeowners') attorneys to put down in writing ... how that process would proceed," Chancellor told residents. "So we're waiting on that to happen ... but I think we're close, I really do."

Nearly two dozen homes were damaged during the reclamation project, which aimed to free vacant lands in downtown Rock Springs for much-needed housing development.

The subsidence project -- conducted on a tract of land adjacent to the Tree Street neighborhood -- involved the use of a pilot technique known as dynamic compaction.

For three weeks beginning in July 2007, cranes pounded the ground with 25-ton and 35-ton weights to collapse the underground mine voids and tunnels beneath the site known as Tract H.

But days into the project, residents began complaining that the shock waves from the dropped weights were shaking houses, cracking driveways and foundations, accelerating ongoing subsidence and severely damaging homes in the area.

State officials suspended and then halted the dynamic compaction portion of the project in early August 2007. Shortly after, top AML administrators pledged to residents that the agency would pay for repairs to homes damaged by the dynamic compaction.

The AML hired engineers to evaluate and investigate each homeowner's subsequent damage claim. In December 2008, the agency made a settlement offer to each of the 19 homeowners who submitted claims.

Most of the homeowners rejected the state's initial offer, however, which they contended would not adequately compensate them for the needed repairs.

At the behest of state lawmakers, AML officials agreed to redo the engineering inspections of the damaged homes, with an eye toward making new compensation offers to residents at a later date.

Once the agreement with homeowners is in place, the agency will select a new engineering firm to conduct inspections, officials said.

Homeowners upset

Homeowners said Tuesday they continue to be frustrated with the slow pace of the process.

Several Tree Street residents said they eagerly await the new inspections by structural engineers, which they hope will reveal the true extent of damage caused by the state's project.

"We're not just frustrated ... we're way beyond frustrated at this point," said resident Donna Maynard, who lives in one of several homes on Ash Street that sustained damaged during the project.

Maynard's house, which sits directly across the street from the Tract H site, was literally split apart by the dynamic compaction. A 2-foot wide, 12-foot deep sinkhole also opened behind her house shortly after the project was halted. The sinkhole was later filled by subsidence contractors.

"We're coming up on the third winter now since that project ... and we still don't know how long it's going to take before the state does something about this," Maynard said.

"Clearly I'm still upset about this," said Bill Spillman, whose modest home -- located on Converse Court bordering the south side of the project area -- was extensively damaged, he believes, as a result of the dynamic compaction.

"They wrecked my house and I still want them to fix it. ... I've been waiting two years now," Spillman said.

Residents and local state lawmakers also pushed for the agency to schedule a meeting in the near future to discuss the dynamic compaction issue with homeowners.

"I definitely see a need to meet with the attorney general in Rock Springs about dynamic compaction," Rep. Stan Blake, D-Green River, said.

Blake and Rep. Bernadine Craft, D-Rock Springs, co-sponsored a budget amendment during February's legislative session that would have allocated $2.8 million to provide relief to the beleaguered homeowners.

The amendment passed the House on a unanimous vote, but failed in the Senate. The agency decided, however, to redo the engineering inspections if an agreement could be reached with homeowners.

AML officials have said the process is taking longer than expected, in part because a 2006 federal AML guidance document had to be amended first. The document says the state may not settle a claim for damages to property adjacent to an AML reclamation project without first consulting the federal Office of Surface Mining.

The dynamic compaction project was spurred by the city's long search for affordable housing.

City officials have been working for years to free vacant lands in the city that could not be developed for housing in the past because they were located over unsafe, abandoned underground coal mines.

Because AML rules prevent the agency from conducting subsidence mitigation work on undeveloped land, the city had to get special permission from Gov. Dave Freudenthal to conduct the project.

Coal companies contribute 35 cents for every ton of coal extracted from surface mines and 15 cents per ton from underground mines to fund mine reclamation projects in states such as Wyoming that have been affected by past coal mining activities.

Over the past 20 years, Wyoming's AML program has spent more than $80 million on various grouting and excavation-and-backfill mine reclamation projects across Rock Springs, according to agency data.

Contact southwest Wyoming bureau reporter Jeff Gearino at 307-875-5359 or gearino@tribcsp.com