GW,
Most of the ponds in my neighborhood are designed that way, mine being one of the few exceptions. I didn't understand what the digger was trying to tell me so I just said no. Not the best decision. My water level varies up to 40 inches from the wet season to the dry. If I ever get around to another pond it will be as you describe. I have a a legume ground cover that grows fast enough to keep up with the receding water and the fish eat it as the water rises.
