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For the Osage Nation

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For the Osage Nation AGENDA ITEM REPORT Meeting Date: May 11, 2021 Staff Contact: Carol Lahman, City Attorney Department: Legal Subject: Approve the Execution of the Forbearance Agreement entered into by The Osage Nation, the City of Enid and the Enid Municipal Authority, and authorize payment in the amount of $1,000,000.00. Background: To allow the Kaw Lake Water Supply Project to proceed, the City of Enid has been in negotiations with The Osage Nation to find an accommodation for the City project that would not affect The Osage Nation’s or the State of Oklahoma’s interest, rights or position as to natural resources, property, or water. The Forbearance Agreement, if approved, would resolve the issues between the City of Enid and The Osage Nation without either party resorting to lengthy and expensive litigation that would delay the start of the construction of the Kaw Lake pipeline. The negotiations have taken place over the last four years. If approved, the Enid Municipal Authority will pay $1,000,000.00 to The Nation within 30 days, as part of the consideration for the agreement. The City will also reserve a certain amount of the capacity in the pipeline for the Nation. This does not compromise the ability of the City to carry the full OWRB permit amount of water from Kaw Lake to Enid. The agreement provides that if the Nation, at some point, decides to make use of the capacity, that the Nation will construct and pay for the improvements necessary, and will pay for the cost of maintenance and operation attributable to this use. If at some point, it is determined that the City needs to obtain right of way from the Bureau of Indian Affairs, the payment under this agreement will be considered by the Nation as compensation for the right of way for a period of fifty years with a right of renewal for an additional fifty years. Attachments: Osage Final Forbearance Agreement Resolution ONCR 21-11 of The Osage Nation Congress Exhibit A - Kaw Lake Project - Principal Features Exhibit B - Kaw Lake Project Service Area Exhibit C - Kaw Lake Project - Arkansas Riverbed Crossings Exhibit D Osage Nation Service Access Points Exhibit E - Osage Forbearance Agreement Forbearance Agreement This Forbearance Agreement (“Forbearance Agreement” or “Agreement”) is entered into by the Osage Nation (“Nation”) and the City of Enid and the Enid Municipal Authority (collectively, “Enid”), on this __ day of ________, 2021. RECITALS WHEREAS, the Nation has contended it is the beneficial owner of the surface estate of the bed and banks of the Arkansas River forming the western and southern boundary of the territory of the Osage Nation (“Riverbed Surface Estate Lands”); and WHEREAS, the Nation has also asserted claims to, and authority over, water in Osage County in the State of Oklahoma, including water in the Arkansas River along the western and southern boundary of Osage County; and WHEREAS, Enid and the Nation disagree as to whether the Nation is the beneficial owner of the Riverbed Surface Estate Lands and as to the nature and extent of the Nation’s claims to and over water in Osage County (including water in the Arkansas River); and WHEREAS, the Enid Municipal Authority holds a permit from the Oklahoma Water Resources Board for the use of up to 20,000 acre-feet per annum from Kaw Lake which is located in Kay County and Osage County and impounds water from the Arkansas River; and WHEREAS, Enid is in the process of developing a project for the diversion and conveyance of 20,000 acre-feet per annum of water from Kaw Lake for distribution and use by Enid to meet current and future municipal water demand within and surrounding the City of Enid, as described in Section 3 of this Agreement and in Exhibits A and B to this Agreement; and WHEREAS, Enid has committed significant financial and other resources to development of the above-referenced Kaw Lake project in order 1 to meet the City’s demands for municipal, domestic, commercial, and industrial water; and WHEREAS, because the Nation’s claims described above remain unresolved, the Nation currently objects to the above-described Kaw Lake project, and the Parties acknowledge the Nation’s claims cannot be resolved in a time frame commensurate with Enid’s need to start construction of the project; and WHEREAS, the Parties desire to avoid litigation and address their differences with regard to the above-described Kaw Lake project in a manner that will allow Enid to timely complete and implement the project without prejudicing either Party’s respective rights and positions vis-à-vis the Nation’s claims to water and the bed and banks of the Arkansas River. NOW THEREFORE, in consideration of the mutual promises and covenants contained herein, the Nation and Enid agree as follows: AGREEMENT SECTION 1. PURPOSE OF AGREEMENT. A. IN GENERAL The purpose of this Forbearance Agreement is to facilitate Enid’s goal to construct, operate, and maintain the Kaw Lake project, as described in Section 3 of this Agreement and in Exhibits A and B to this Agreement, in a way that— 1. meets current and future municipal, domestic, commercial, and industrial water demand within and surrounding the City of Enid; 2. does not interfere with or otherwise limit or affect the Nation’s rights, through the Osage Mineral Council, to, interests in, and/or authority over the Osage Mineral Estate; 2 3. is consistent with the Nation’s goals to protect and conserve water and other natural resources in and around Osage County for the benefit of the Osage people and their future generations; 4. provides immediate and future tangible benefits to the Nation and its citizens; 5. reserves, and does not directly or indirectly prejudice, limit, or otherwise affect any and all claims, rights, interests, or positions of the Nation in and to, or regarding— (a)water and/or water rights or priorities (including but not limited to surface and ground water in and around Osage County and the Arkansas River), and/or (b)the Riverbed Surface Estate Lands; and 6. through mutual forbearance and an agreed-to dispute resolution process, provides the Nation and Enid with the opportunity to avoid litigation over the development, construction, and/or operation of the Kaw Lake Project. B. SCOPE AND EFFECT. This Forbearance Agreement is between the Osage Nation and Enid only. With respect to any matter or issue addressed or not addressed in this Agreement, this Forbearance Agreement does not apportion or allocate any surface water or groundwater within the State of Oklahoma and does not bind or purport to bind, limit or purport to limit, or otherwise affect or purport to affect in any manner, any rights, claims, authority, or legal positions of any other entity or any person, including but not limited to— 1. the State of Oklahoma, or any agency, officer, or political subdivision of the State of Oklahoma, other than Enid; or 3 2. the United States or any department, agency, or officer of the United States, whether acting as the trustee of the Nation or its citizens or otherwise. Notwithstanding the foregoing, nothing in this subsection (B) waives the sovereign immunity of any Party to this Agreement. SECTION 2. DEFINED TERMS. In this Agreement, and solely for the purposes of this Agreement, the term— 1. “Agreement” or “Forbearance Agreement” means this Agreement, including Exhibits A through E to this Agreement, entered into by and between the Nation and Enid on the date set forth above; 2. “City” or “City of Enid” means the City of Enid, a municipal corporation and political subdivision of the State of Oklahoma; 3. “Enid” means, collectively, the City of Enid and the Enid Municipal Authority; 4. “Enid Municipal Authority” means the Oklahoma public trust by that name, the sole beneficiary of which is the City of Enid; 5. “Enid OWRB Permit” means that certain permit (No. 2014-047) issued by the Oklahoma Water Resources Board to the Enid Municipal Authority on January 20, 2015, for Enid’s use of up to 20,000 acre-feet per annum of water from Kaw Lake; 6. “Kaw Lake Project” or “Project” means the project described in Section 3 including the features identified in Exhibit A and the service area depicted in Exhibit B; 7. “Kaw Lake Project Pipeline” means the single, up to 36-inch pipeline and related appurtenances, equipment and facilities that will be constructed, operated, and maintained by or for Enid to transport water from Kaw Lake to the water treatment plant located within or 4 near the City of Enid pursuant to, and as part of, the Kaw Lake Project; 8. “Kaw Lake Project Service Area” means the area identified in Exhibit B; 9. “Kaw Lake Project Water Supply” means the 20,000 acre-feet per annum and associated yield that Enid is permitted to divert and use from Kaw Lake and the Kaw Lake Project by the Enid OWRB Permit; 10. “Osage Nation” or “Nation” means The Osage Nation, a federally recognized Indian tribe; 11. “Party” means the Nation or Enid, and “Parties” means both of the foregoing; 12. “Riverbed Crossings” means the two locations where the Kaw Lake Project Pipeline crosses the Riverbed Surface Estate Lands, having a width of fifty (50) feet as generally depicted in Exhibit C with final “as built” locations to be provided to the Nation by Enid upon completion of the Project; and 13. “Riverbed Surface Estate Lands” means the surface estate of the bed and, up to the mean highwater mark, banks of that segment of the Arkansas River establishing the western boundary of the Osage Reservation described in the Act of June 5, 1872 (17 Stat.
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