Water contract with Sunrise Coal up for vote

HOMER — The Homer village board plans to vote Monday night on an agreement to provide Sunrise Coal’s proposed Bulldog mine with up to 8,000 gallons of treated water the first two years and up to 20,000 gallons of treated water thereafter, all at virtually no cost to the village, according to the final draft of the contract that’s posted on the village website.

After months of discussion and negotiation, the village and Sunrise Coal have a final 13-page proposed agreement for the village board to vote on at its regular meeting at 7 p.m. in the village hall, 500 E. Second St., Homer. 

Here is a copy of the proposed contract and attorney's memo to the village board.

Mayor David Lucas said the village board will be voting on an ordinance that will authorize the village to sign the contract with the Terre Haute, Ind.-based coal company, and a proposed ordinance requires four votes for approval. One village board member may be absent, and that board member did not vote in favor of a treated water and sewer agreement in last month’s straw poll, which was not an official vote but an attempt to gauge the board members’ positions at that time. The six board members voted 3-3 in the straw poll, and Lucas cast a “yes” vote, breaking the tie and making it a 4-3 vote in the affirmative. 
 
Lucas said if there are only three “yes” votes from among the village board members tonight, he can cast the fourth “yes” vote, approving the ordinance, regardless whether there is a tie or not among the village board members. Lucas said an ordinance requires four votes for approval from the seven elected officials, and he is one of the seven — six village board members and Lucas.
 
Besides the amount of water that would be provided to the coal mine, the highlights of the agreement include the following.
 
— The contract is contingent upon Sunrise obtaining approval to operate its coal mining operations and getting the necessary easements, rights-of-way and approvals to construct the approximately 5 miles of water and sewer lines from Homer to the mine’s surface operation southwest of the village in Vermilion County.
 
— The term of the contract is 30 years, but if the coal mine is not operating in five years, the village or Sunrise can terminate the agreement.
 
 If there’s a water shortage, documented by a hydrologist, the village can prioritize service to its customers within the village. 
 
— Sunrise’s water and sewer rates will be 125 percent of the village’s residential or commercial rate, whichever is higher, and when those rates are increased, the rate to Sunrise will also increase.
 
— In building the sewer and water lines and other infrastructure, Sunrise must provide plans to the village for review and approval. 
 
— Sunrise will pay the village up to $10,000 for engineering costs associated with the review, inspection and approval of the infrastructure and up to $5,000 for legal review of the easements or right-of-way agreements. 
 
— Sunrise will maintain ownership of the water and sewer lines from the coal mine to the village limits, but in 2016, the issue of ownership of the lines will be reviewed and may be renegotiated. If the village assumes ownership, it can negotiate a higher rate for water and sewer services, and at any time during the term of the contract, the village can request transfer of the lines, and the points of connection, or vaults and meters, will be relocated with costs split equally.
 
— Sunrise may assign the contract to another entity in only two situations: to an affiliate or another company that will continue mining operations, or as security or collateral for a commercial loan.

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