ORDINANCE AN ORDINANCE AUTHORIZING THE SAFETY -SERVICE DIRECTOR TO ENTER INTO A WATER LEASE AGREEMENT WITH THE STATE OF OHIO.

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1 ORDINANCE AN ORDINANCE AUTHORIZING THE SAFETY -SERVICE DIRECTOR TO ENTER INTO A WATER LEASE AGREEMENT WITH THE STATE OF OHIO. WHEREAS, the City of Celina and the State of Ohio are negotiating a fifteen-year Agreement for a lease to operate and maintain a water withdrawal facility in Grand Lake to withdraw water for public water supply; and WHEREAS, said Agreement shall give the City the right to withdraw raw water from Grand Lake for public water supply in amounts not to exceed an annual withdrawal of 420 million gallons; and WHEREAS, the annual lease amount shall be $28,406.82, payable in advance in semi-annual installments of $14,203.41; and WHEREAS, if the amount of water withdrawn is greater than 420 million gallons for each calendar year within the contract, the City agrees to pay an adjustment in the payment in accordance with the State's rate structure in effect at the time payment is due. NOW, THEREFORE, BE IT ORDAINED by the Council of the City of Celina, County of Mercer, State of Ohio: SECTION ONE THAT, the Safety-Service Director be and is hereby authorized to enter into a Water Lease Agreement, in a form substantially similar to the draft which is hereto attached as, with the State of Ohio for withdrawal of raw water from Grand Lake for public water supply, commencing January 1, 2012 and ending December 31, SECTION TWO NOW, therefore, this Ordinance shall take effect and be in force from and after its passage and approval by the Mayor at the earliest perio~ allowed by I~A PASSED this J2d:flday of IV \ avch

2 MIAMI & ERIE CANAL WATER LEASE BETWEEN THE STATE OF OHIO AND THE CITY OF CELINA This is a lease of water from the Ohio and Erie Canal between the State of Ohio, through its Department of Natural Resources (hereinafter referred to as STATE), and the City of Celina, its successors or assigns whose address is 426 West Market Street, P.O. Box 297, Celina, Ohio (hereinafter called LESSEE); and pursuant to the provisions of Section of the Ohio Revised Code. Whereas, the Director, Department of Natural Resources is authorized, pursuant to Section of the Ohio Revised code, to lease water from any canal or reservoir that it operates and maintains to the extent that the water is in excess of the quantity that is required for navigation, recreation, and wildlife purposes; and WHEREAS, pursuant to Section of the Ohio Revised Code, all moneys received by the Director, Department of Natural Resources are deposited in the Canal Lands Fund for the purposes of administering and enforcing Chapter 1520 of the Ohio Revised Code; and WHEREAS, the Department of Natural Resources is responsible for the care and control of the Miami and Erie Canal; and WHEREAS, LESSEE applied to STATE for a lease to operate and maintain a water withdrawal facility in Grand Lake St. Marys (hereinafter RESERVOIR), to withdraw water for public water supply; and WHEREAS, the Director, Department of Natural Resources has found that the leasing of water for the purposes stated herein will not materially injure or interfere with the navigation, recreation, and wildlife purposes of any of the canals or canal reservoirs of the STATE. NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, STATE hereby grants this Lease to LESSEE for the above stated purposes, under the following terms and conditions: Section 1. This lease shall be for a period of fifteen (15) years, commencing January 1, 2012 and ending December 31, 2027, unless otherwise terminated in accordance with the termination provisions herein Section 2. In consideration of the payments to be made to STATE by LESSEE and subject to the provisions set forth herein, LESSEE shall have the right to withdraw raw water from RESERVOIR for public water supply in amounts not to exceed an annual Page 1 of 6

3 withdrawal of five hundred fifty (550) million gallons. Annual withdrawals shall not exceed five hundred fifty (550) million gallons without written STATE approval. Section 3. In consideration of LESSEE s right to withdraw said water, LESSEE agrees to pay STATE an annual amount of $28, payable in advance in semi-annual installments of $14, LESSEE s payment is based upon an annual withdrawal of no more than four hundred twenty (420) million gallons per year. If the amount of water withdrawn is greater than four hundred twenty (420) million gallons for each calendar year within the contract, LESSEE agrees to pay an adjustment in the payment in accordance with the STATE s rate structure in effect at the time payment is due. Payment shall be due upon the receipt of a statement from the STATE. Section 4. In consideration of LESSEE s right to withdraw said water, LESSEE agrees to pay STATE $28, annually in accordance with the following cost equation: C = [ (M-1).75 ]x(1.201) Where C= Annual payment M=Water usage in millions of gallons Semi-annual payments of $14, shall be due on the first day of January and July in each and every year thereafter. Pursuant to Section of the Ohio Revised Code, the STATE promulgated rules effective on March 10, 2003 that permit the STATE to increase the rate structure for water leased from the Ohio and Erie Canal. The LESSEE agrees to pay the STATE annually in accordance with the rate structure that is in effect at the time payment is due. STATE will notify LESSEE sixty (60) days prior to any rate change. If payments are not made by LESSEE to STATE within 45 days after payment is due, the payment may be considered late whether or not a demand for payment is made. Late payments shall bear interest, from the day on which payment was due at the base rate per annum for advances and discounts to member banks in effect at the federal reserve bank in the second federal reserve district. Payments shall be made to the Treasurer of State, Fund 430, and delivered to the Ohio Department of Natural Resources, Division of Soil and Water Resources, 2045 Morse Road, Columbus Ohio The volume of water withdrawn by LESSEE shall be measured and recorded by LESSEE, by a method agreed upon by STATE. Authorized representatives of STATE may inspect these records at any reasonable time. LESSEE shall supply STATE with an annual summary of water withdrawals no later than March 1 of the following calendar year, on a form provided by the Chief of the Ohio Department of Natural Resources, Division of Water, pursuant to Section of the Ohio Revised Code which shall include monthly amounts withdrawn by LESSEE. Page 2 of 6

4 Section 5. The STATE does not warrant the fitness or quality of water supplied under this Lease for any purpose or use and LESSEE assumes all responsibility and liability for any and all consequences of the withdrawal or use of said water. Section 6. STATE shall not be held liable in any claims, demands, actions, or causes of action, together with any and all losses, costs, or related expenses asserted by any person or persons for bodily injury, death, or property damage during the term of this Lease, ensuing from LESSEE s use of water from the RESERVOIR. LESSEE agrees and understands that LESSEE is accepting all risk of being deprived of water during any time water is drawn down for repairing any portion of the RESERVOIR or for any other purpose the water supply is interrupted. Section 7. LESSEE shall be responsible for the construction, maintenance, and operation of its intake facilities. Any structures or other improvements placed in RESERVOIR by LESSEE during the term of this Lease shall be at LESSEE s expense. Written approval is required from STATE before LESSEE may initiate any construction activities on STATE property. LESSEE shall maintain and manage their facilities in a responsible manner, keeping them clean, sanitary, and free from any debris. LESSEE shall not deposit any debris on the adjacent STATE lands or do anything that would interfere with the maintenance or operation of any part of the RESERVOIR. LESSEE agrees that in the event of a breach of an embankment or dam or of injury to the RESERVOIR due to LESSEE s activities, LESSEE shall immediately repair said breach or injury at its sole cost or be liable for the cost of said repair if conducted by the STATE or at the STATE S direction. LESSEE shall be responsible for all damages and claims that may result from said breach or injury. LESSEE is responsible for obtaining any licenses or leases from the Director, Department of Natural Resources for the lease of any lands owned by the STATE. LESSEE is responsible for obtaining any other approvals, licenses, or leases from local, state and/or federal authorities. Section 8. STATE shall have access to RESERVOIR at all reasonable times to make such changes and improvements as the Director, Department of Natural Resources may deem necessary. STATE shall have access to LESSEE s withdrawal facilities at all reasonable times to determine LESSEE s compliance with the terms of this Lease. LESSEE shall notify STATE as soon as possible in the event of any damage or injury to RESERVOIR caused by LESSEE or other emergency situation with RESERVOIR at the following location: Page 3 of 6

5 Ohio Department of Natural Resources Division of Parks and Recreation 834 Edgewater Drive St Marys, Ohio (419) Section 9. This Lease may be terminated by STATE if the RESERVOIR, or any part thereof, is needed for any public or quasi-public use or purpose or if, at any time, STATE is unable for any reason to furnish water to LESSEE. STATE shall use its best efforts to give LESSEE at least sixty (60) days notice prior to such termination. LESSEE shall have no claim against STATE for the value of any unexpired term of this Lease, or for any costs related to the removals referred to in Section No. 9. Section 10. Except as provided in Section No. 3 of this Lease, if LESSEE defaults on any of the terms or conditions of this Lease, and if the default is not remedied within thirty (30) days after written notification of the default by STATE, STATE may terminate this Lease. STATE shall give LESSEE written notice of such termination. Upon termination of this Lease pursuant to this section or Section 8, and at the request of STATE, LESSEE shall remove all improvements that are in RESERVOIR made by LESSEE and restore RESERVOIR to a condition satisfactory to STATE without expense to STATE. If such removals and restoration are not performed within thirty (30) days of the date of expiration or termination, STATE may restore the RESERVOIR or cause same to be restored at LESSEE s expense. Section 11. LESSEE agrees to comply with all applicable state and federal laws and regulations. Section 12. Except as each party may otherwise subsequently advise the other, any invoice or other communication under this Lease by either party to the other shall be sufficiently given if it is dispatched by certified U.S. Mail or delivered personally and: In the case of the STATE is addressed or delivered personally at: Ohio Department of Natural Resources Division of Soil and Water Resources 2045 Morse Road, Building B Columbus, Ohio Page 4 of 6

6 And in the case of LESSEE is addressed or delivered personally at: City of Celina 426 West Market Street Celina, Ohio Section 13. This Lease shall be binding upon and inure to the benefit of the parties hereto and to any person, officer, board, department, agency, municipal corporation, or body politic and corporate succeeding by operation of law to the powers and duties of either of the parties hereto. LESSEE shall not assign or transfer this Lease or any rights acquired by this Lease without prior written consent of STATE. Any successor to rights and privileges granted herein will be subject to these provisions. In the event that any lending agency(s) or other successor to LESSEE should desire to assign its interest in this facility it shall first seek and obtain written approval from the STATE. Section 14. This Lease shall commence as of January 1, 2012, and shall continue in full force and effect under the conditions set forth herein and shall terminated on December 31, Obligations of STATE are subject to the provisions of Section of the Ohio Revised Code. Section 15. The LESSEE, by signature on this document, certifies that LESSEE: (i) has reviewed and understands the Ohio ethics and conflict of interest laws as found in Ohio Revised Code Chapter 102 and in Ohio Revised Code Sections and , and (ii) will take no action inconsistent with those laws. The LESSEE understands that failure to comply with Ohio s ethics and conflict of interest laws is, in itself, grounds for termination of this Agreement and may result in the loss of other contracts or grants with the State of Ohio. Page 5 of 6

7 In WITNESS WHEREOF, the parties hereto have caused this contract to be executed by their respective duly authorized officers as of the day and year first herein above written. City of Celina State of Ohio Department of Natural Resources THOMAS J. HITCHCOCK Safety Service Director Date JAMES ZEHRINGER Director Date JEFFREY S. HAZEL Mayor Date GLENN COB, Deputy Director Acting Chief Division of Parks and Recreation KARL R. GEBHARDT, Chief Division of Soil and Water Resources APPROVED AS TO FORM: MIKE DEWINE Attorney General By Daniel Martin Assistant Attorney General Page 6 of 6