I found an iPhone 5 while snorkeling in the Lake. What should I do with it?

There's a local tie-up at the lake and some friends and I went snorkeling to see what kind of treasures we could find. Typically it amounts to beer cans and sunglasses, but this time I found an iPhone 5.

It was in a lifeproof case, but water did get inside. I dried it out for a few days, and somehow it comes on. The screen is kind of blurry from water damage and home button does not work.

Suggestions on what I should do with it?

Repair it and keep it as a trophy

Using this phone can make troble for you go your neerest police station and hand over it to them.

If you can see the screen call a relevant contact and let them know. Of course chances are the owner has already bought a new phone. If there's a passcode there's nothing you can do but put it in DFU mode and restore it in iTunes which will erase everything.

Whoever uses the phone will need to repair it (replace screen and home button). Save money and go the DIY route. A quality company I recommend is:
http://www.GadgetMenders.com

They carry all the replacement parts and tools and provide great video tutorials.