You might try the old bureaucrat switcheroo.

Create a proposal for a sediment settling pond at the very upper end of your community lake. Figure out where to place the small dam to get the big lake below the 500 acre-feet limit.

There is a chance you could get approvals AND do that project for $20,000. It might actually be a win-win situation. A settling pond would keep your big lake cleaner following storm events and would slow your silting rate.

It would also be marginally safer. If the big dam fails in a flood, then the 50 acre-feet (or whatever) above the settling pond dam would not go rushing downstream.

Might as well make a good plan for submission. Create a design to have the capability to dredge or excavate the silt out of the settling pond in the original proposal and argue that you are significantly extending the life of your community lake.

Good luck on your big project!

Rod