Making the Right Choice: No Frac Driling in Highland Heights Community Park

My message to Council last week: the Right Choice isn’t necessarily the Easy Choice when it comes to deciding what to do in the Bass Energy lawsuit.

BASS ENERGY: The Backstory and Timeline

-On  September 26, 2006, Mayor Scott Coleman told Council that  he and Law Director Tim Paluf met with Bass Energy to discuss Bass’s “interest in digging natural gas wells on city owned property.”

http://www.highlandhts.com/docs/city_council/minutes/2006/09-26-06_council_minutes.htm

-On January 23, 2007 Council adopted Resolution 63-2006, authorizing Mayor Coleman to execute two drilling leases with Bass Energy, one covering a frac gas well at the municipal complex property and one allowing two frac gas wells to be drilled in the Community Park.

 Resolution 63-2006 imposed an express limitation on the mayor’s power to execute the drilling leases. It read:

“Section 2. This Resolution is contingent upon the approval of the three sites by the City of Highland Heights and the commitment of Bass Energy to drill the wells on all three sites.”

This contingency was never met. The city never approved 3 drilling sites. 

http://www.highlandhts.com/docs/city_council/minutes/2007/01-23-07_city_council_minutes.htm

-On March 6, 2007, Mayor Scott Coleman executed a drilling lease allowing Bass Energy to drill two frac gas wells in the park. The city hadn’t approved of any specific drilling sites when he signed the lease.

Section 8 of the drilling Lease explicitly stated that Bass had to obtain the city’s written approval of the drilling sites before any drilling could begin. It read, in part:

Lessee (Bass) shall receive written approval from the  Lessor (the city) of the location of the well, well surface equipment, pipelines, and fencing material prior to commencing drilling operations...”

Significantly, the mayor did not tell Council that he had signed a drilling lease when he met with them the following week.

 http://www.highlandhts.com/docs/city_council/minutes/2007/03-13-07_city_council_minutes.htm

-Late March 2007. Bass Energy hired the city’s then-engineer Andy Blackley to select well sites for it.  Bass Energy paid for Blackley’s services and used his April 20, 2007 plat map to obtain state drilling permits in July 2007.
Council was unaware of this arrangement, and Blackley did not share the plat map with them until late fall, several months after Bass obtained drilling permits for the park.  

-On October 29, 2007, Blackley sent a letter to Bass Energy reminding it that Council’s formal approval of the well sites was required before any drilling could begin.

-November 12, 2007. Bass Energy appeared at a Planning & Zoning Commission hearing.  Several council members attended that meeting and learned, for the first time, about Blackley’s plat map and that Bass had used that map to obtain drilling permits the previous summer.

-November 13, 2007. The minutes from the  November 13, 2007 council meeting state:

"Council President (Cathy) Murphy said....it was apparent that there has been miscommunication and that the agent for Bass Energy has no understanding of the City’s approval process as outlined in Section 733 of the Codified Ordinances... In response to Mrs. Murphy’s  inquiry if the City, being the landowner of the park, has authority on approval, Law Director Paluf replied yes.
Council agreed that Bass Energy should meet with Council to discuss alternative drilling sites and for Council to determine if any of those sites are acceptable locations..”

http://www.highlandhts.com/docs/city_council/minutes/2007/11-13-07_city_council_minutes.htm

-Chapter 733 of the Codified Ordinances deals with gas and oil wells in the city. 
Ordinance 733.10 reads:

"The City’s adoption of these regulations shall be supplementary to and read in conjunction with (state) standards and regulations as they relate to drilling...of any oil or gas well within the limits of the city...”

Ordinance 733.20 states:

“Regardless of whether an appropriate permit has been obtained (from the state)....no person, firm or corporation shall ...(d) a gas or oil well within 500 feet of a...public park or playground...or any other public building used as a place of public assembly.”

Law Director Tim Paluf told Council that although the state had sole control over the permitting process, Ordinance 733.20 was binding on the city in its capacity as property owner of the Community Park and Municipal Center complex.  Pursuant to Ordinance 733.20, the city was prohibited from drilling gas wells on any city-owned property.

-January 22, 2008. Council rescinded Resolution 63-2006, thereby revoking Mayor Coleman’s authority to sign drilling leases with Bass Energy. The mayor had not yet signed the second anticipated drilling lease for the Municipal Complex.

http://www.highlandhts.com/docs/city_council/minutes/2008/01-22-08_city_council_minutes.htm

 -July 18, 2008. Bass Energy sued the city, claiming that it had breached the drilling lease for the park. Bass later argued that it was entitled to arbitrate its breach of contract claim (instead of litigating in court).

-July 2, 2009. Common Pleas Court Judge Eileen T. Gallagher issued an opinion sustaining Bass Energy’s arbitration claim. In her opinion Judge Gallagher wrote,

“...Section 2 of Resolution 63-2006 states that the resolution is ‘contingent upon the approval of the three (well) sites by the City of Highland Heights and the commitment of Bass Energy to drill the wells on all three sites.’ Pursuant to Resolution 63-2006, Defendant’s mayor (Mayor Scott Coleman) had no power to enter into the Lease until three locations were selected. Despite the fact that three locations were not selected or approved in writing , the parties signed the Lease agreement.”

“The parties agreed that Defendant would have the right to select three well locations prior to drilling...At no time prior to the submission of well locations to the ODNR (Ohio Dept. of Natural Resources) did Defendant’s Mayor or City Counsel (sic) approve, in writing, the well locations as specified in Section 8 of the lease or in Resolution No. 63-2006.”

So, there you have it.

Local ordinances prohibited gas wells from being drilled in the park, the mayor had “no power” to execute a drilling lease with Bass Energy when he signed it in March 2007, and no written approval was ever given for the drilling sites, as required by Resolution 63-2006 and the lease----but Bass Energy sued the city for breach of contract anyway.  

The Easy Solution is not the Right Solution

I spoke to Council last week, concerned that they were leaning towards letting Bass Energy drill instead of choosing the harder road of protecting our community and keeping frac gas wells out of our Community Park.

This is what I said:

"I wanted to talk to you about the Bass Energy lawsuit.
 You have 3 obvious choices are at this point: go to arbitration and fight Bass’s breach of contract claim; negotiate a financial settlement; or cave in and let Bass drill frac gas wells in the park.
 I suspect some of you view the last option as the easiest—and perhaps---best choice.

 But, to paraphrase the late Republican senator, Margaret Chase Smith, “the right way is not always the easy way.”

 Drilling might seem like the easy choice, but it’s not the right choice for our community.

 Last month, a member of the city’s Economic Development Committee declared: “We are not a lifestyle city.” I disagree.
 I think Highland Heights is a “lifestyle city” in part because of the high quality of residential life that it offers. That’s important to me, and judging by the political literature I received last fall, I know that’s important to you too.  Look at these:
 

--Re-elect Mayor Scott Coleman. The first bullet reads:  “As mayor, Scott Coleman and the city of Highland Heights have: Been named the 30^th best place to live in America by Money Magazine in August 2011.”

--Re-elect Frank Legan. The first bullet reads: “Since Frank Legan has been a member of City Council, the city of Highland Heights has: Earned the ranking as the 30^th best place to live in America by CNN/Money Magazine.”

--Re-elect Ed Hargate: “CNN Money Magazine—We were recently honored by Money Magazine as one of the best places to live in the country…Our unique residential nature has made Highland Heights a desirable place to live and work. I will continue to protect our neighborhoods and property values.”

--the September 2011 Highland Highlights magazine. On the cover, the first bullet under “From the Desk of Mayor Coleman”: “Money Magazine Names Highland Heights 30^th Best Small City.” Inside, the mayor comments, “This is the third time in as many rankings that Highland Heights has made the top 100 (best places to live).” He notes that Money Magazine “highlight(ed) our newly renovated community park and pool area...as a …reason why our city is so desirable.”

Clearly the city's top ranking by CNN/Money Magazine means alot to many of you. One of the major contributors to that ranking is our park. 

If you allow gas wells and frac drilling in the park, you might as well kiss our top ranking goodbye.

Because you were elected to sit at the Council table, you might think that it’s okay to make a decision based on your own political views or personal opinions about drilling---but you’d be wrong.

The only opinion that really counts is the opinion of the residents that elected you---and they have spoken quite clearly and decisively on the issue of gas wells in the park.
 In 2008 Highland Heights voters overwhelmingly approved amending our city Charter to ban gas wells from the park.  Charter section 14.07 begins:
 “City parks in Highland Heights are a valued natural resource that significantly contribute to, and enhance, the quality of life in our City.  “
 For that reason:
“… commercial exploitation of the parkland’s natural resources, including gas or oil wells…shall be strictly prohibited
 

You can have no doubt where residents stand on the issue.  As elected officials, you are obligated to follow their direction and obey their wishes.
 

One last thing to keep in mind: You won’t make the best decision if your decision is based on a best case scenario instead of a worst case scenario.
 Once you drill a gas well in the park you can never go back. You can never undo what has been done.
Are you really willing to risk our city becoming another Bainbridge or Youngstown or Medina? Really?
 

Like I said, the easy solution isn’t always the right one.

 I end by sharing this Russian proverb:
 Do not dig a hole for somebody else; you yourself will fall into it.
 Words to the wise, my friends, words to the wise."