State officials are putting DeKalb on notice: The county may be required to buy new park land to compensate for building a YMCA on property bought with federal money meant for outdoor recreation.

In addition, DeKalb was effectively disqualified from competing for a $98,000 grant to fund a trail because the county government hasn't resolved the issue with the YMCA at Wade Walker Park, located south of Stone Mountain. The foul-up is also jeopardizing DeKalb's plans to build a new library at the park.

The commissioner and her family and staff received more than $25,000 in free YMCA memberships.

Earlier this week it became clear that the county’s misuse of the land won’t be as easy to resolve as Interim DeKalb CEO Lee May’s administration had thought.

Terry West of the Georgia Department of Natural Resources told county government leaders Thursday that they may have to acquire park land. The county’s plan to simply designate existing park land as undevelopable park land won’t satisfy the state.

Building the YMCA was the wrong move because “you can’t have any building erected that’s not directly associated with outdoor recreation,” West told DeKalb commissioners during a committee meeting. “Outdoor is the key when they say ‘outdoor recreation.’”

Some DeKalb commissioners said they were baffled over the county administration's failure to address the problem when the state first brought it up a year ago. They also said county officials overseeing the grant should have known that the land was reserved for outdoor use before the Wade Walker Family YMCA was built in 2011.

“We’ve had our heads in the sand,” said Commissioner Jeff Rader. “By not addressing these issues, we’ve put ourselves out of the running for Department of Natural Resources grants.”

May has said he’s investigating why the issue wasn’t brought to his attention sooner. DeKalb Parks Director Roy Wilson, who received a letter from the state about problem last April, recently announced he is retiring in August. A spokesman for May said Wilson’s retirement has been planned for months and isn’t related to the letter.

The county government will work with the state to address its concerns, said spokesman Burke Brennan.

“The state seemed to be very willing to help us in our endeavor to return to compliance and get this thing straightened out,” he said.

Parts of Wade Walker Park were bought and developed using $715,000 in federal grants through the Land and Water Conservation Fund. The county contributed an equal amount in matching funds.

Federal rules require that parks acquired or developed with those grant funds must remain usable park land forever.

It’s unclear whether all 177 acres of Wade Walker Park are covered by the restriction. The county will have to consult land surveys and other documents to make that determination, West said.

If parts of the park aren't committed to outdoor use, the Wade Walker Library could be built in those areas.

Commissioner Sharon Barnes Sutton, who pushed for the allocation of $4 million for the library, said she believes it can still be built on unrestricted land in the park.

“What’s important to me is we do what’s necessary to support thousands of people who want a new library,” Sutton said. “I’d like for us to follow the procedures to rectify any issues we see and move forward with building a new library.”

But for now, the state has put DeKalb “on notice that the proposed library building construction should not proceed prior to receiving approval,” according to a Tuesday letter from West to the county government.

DeKalb spent $15 million to build the Wade Walker YMCA, which opened in 2012. The YMCA is leasing the facility from the county for $1 a year, and the YMCA is responsible for its operations and maintenance.

The $98,000 in lost grant funding would have helped pay for the South River Water Trail and building two canoe and kayak launch facilities in southeast DeKalb.

"This is a real problem," Commissioner Nancy Jester, who opposes the library's construction at Wade Walker Park, said in a YouTube video to constituents. "People need to be held accountable for this mistake, and the administration needs to explain itself on why it chose to withhold this information and how it was that the YMCA was even built years ago."