Yep, and if the rain would work on it enough, it would start an erosion channel.
If that area settled more than the rest of the dam, to me that means that it wasn't compacted as well as the rest of the dam. With the anti-seep collars on the pipe, I'm not concerned about water following the pipe thru the dam, but if they weren't there, I would be.
Have the deer been active in checking out their new watering hole?
