§ 638. Blanket bond or blanket irrevocable letter of credit required.

A.

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, within this City shall furnish on forms approved by the Inspector and maintain at all times a blanket bond or blanket irrevocable letter of credit in the principal sum of at least One Million Dollars ($1,000,000.00). 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 title in the drilling and operation of oil wells drilled or operated within the City. Said bond or letter of credit 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 or letter of credit 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 title, 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 condition; and that the applicant/permittee must promptly clear all premises of all litter, trash, waste, and other substances and must, after abandonment, grade, level, and restore said property to the same surface condition, as far as possible, as existed prior to commencing operations; and further that the applicant/permittee shall indemnify and hold harmless the City from any and all liability attributable to granting the permit; and that the applicant/permittee shall promptly pay all sums with respect to deductibles on covered losses under insurance policies required by this title; and that the applicant/permittee shall comply with all of the terms of this title concerning the abandonment and/or plugging of all such wells. Each bond or letter of credit submitted shall cover all wells drilled or operated by said person within the City.

B.

For good cause, the Inspector, after notice to and hearing for a permittee, may require the filing of a blanket bond or letter of credit in an amount higher than One Million Dollars ($1,000,000.00) but not to exceed Two Million Dollars ($2,000,000.00). "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 Title 42-A.

C.

The blanket bond or letter of credit 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, whether drilling operations were commenced on, prior, or subsequent to adoption of this title.

(Ord. No. 22189, § 1, 1-14-2010)