§ 13-1502. Blanket bond, blanket irrevocable letter of credit, or cash required.

(a)

Prior to the issuance of any permits, any person who drills or operates any well for the exploration, development or production of oil or gas, or as an injection or disposal well, with this City shall furnish on forms approved by the City's Legal Department and maintain at all times a blanket bond, blanket irrevocable letter of credit or provide a cash payment in the principal sum of at least twenty-five thousand dollars ($25,000.00). Said bond or letter of credit must be executed by a reliable insurance company or bank authorized to do business in the state, as surety or creditor, and with the applicant/permittee as principal or debtor, running to the City for the benefit of the City and all persons concerned, conditioned that the applicant/permittee shall comply with the terms and conditions of this chapter in the drilling and operation of oil wells drilled or operated within the City. Said bond, letter of credit, or cash payment deposited must become effective on or before the date the same is filed with the City and remain in full force and effect for at least twelve (12) months subsequent to the expiration of the permit term and, in addition, the bond, letter of credit, or cash payment must be conditioned that the applicant/permittee must promptly pay all fines, penalties and other assessments imposed upon the applicant/permittee by reason of his breach of any of the terms, provisions or conditions of this chapter, and that the applicant/permittee must promptly restore the streets, sidewalks and other public property of the City which may be disturbed or damaged during the applicant/permittee's operations to their former conditions; that the applicant/permittee must promptly clear all premises of all litter, trash, waste and other substances and must, after plugging and abandoning, grade, level and restore said property to the same surface condition, as far as possible, as existed prior to commencing operations or a condition agreed to by the property owner in writing; further that the applicant/permittee shall indemnify and hold harmless the City from any and all liability attributable to granting the permit; that the applicant/permittee shall promptly pay all sums with respect to deductibles on covered losses under insurance policies required by this chapter; and that the applicant/permittee shall comply with all of the terms of this chapter concerning the plugging and abandoning of all such wells. Each bond, letter of credit, or cash payment submitted shall cover all wells drilled or operated by said person within the City.

(b)

For good cause, the Oil and Gas Inspector, after consulting with and receiving approval from the City's Legal Department, may require the filing of a blanket bond, letter of credit, or cash payment in an amount higher than twenty-five thousand dollars ($25,000.00), but not to exceed one hundred thousand dollars ($100,000.00) by the permittee. "Good cause" shall include, but shall not be limited to, a showing that the operator or permittee has previously violated any of the provisions of Chapter 13, Article 15 of this Code.

(c)

The blanket bond, letter of credit, or cash payment required by this section shall be submitted and maintained in full force and effect at all times by all persons drilling, completing, operating, maintaining and/or producing any well located within the limits of the City.

(d)

Upon noncompliance with the above-listed conditions, the cash amount or the blanket bond or blanket irrevocable letter of credit shall be forfeited and shall provide for the plugging of the well and/or restoration of the land's surface.

(Ord. No. 0-8283-69; Ord. No. 0-9091-21; Ord. No. 0-9091-30; Ord. No. 0-9394-43; Ord. No. 0-0203-54; Ord. No. 0-1415-7, § 2)

Editor's note

Section 2 of Ord. No. 0-1415-7, adopted July 14, 2015, changed the title of § 13-1502 from "Blanket bond or blanket irrevocable letter of credit required" to read as herein set out.