(A) Every permittee shall, either before or at the time of securing his or her permit, deliver to the Agency a bond approved as to form by the City Attorney and as to surety by the Secretary, payable to the city in an amount as provided in this chapter indemnifying and insuring the city against any loss or injury which it or any persons may suffer and against any damage occurring to any public property of the city or to any public street, avenue, alley, way or place within the city or to any private property resulting directly or indirectly from:
(1) The drilling or redrilling of, and/or the existence of the operation, the abandonment of the well referred to in the permit;
(2) The violation of the terms and conditions of the permit;
(3) The failure of the permittee to remove a derrick or its appurtenances; or
(4) Any wrongful conduct or acts or omission to act by the permittee or any of his or her agents, employees or contractors whose activity is related to the well referred to in the permit.
(B) The bond or bonds as provided in this chapter shall be kept in full force and effect at all times by the permittee and shall cover each and every well for which the permittee has been granted a permit, until the activity for which the permit was granted has been completed and a written consent to the permittee’s release from the bond obligation has been granted by the Council. If a permittee does not keep such bond in full force and effect, as provided in this section, the Council may declare any such permit forfeited, and all rights of the permittee therein and named thereunder shall cease and terminate.
(`78 Code, § 14.12.030.)
Bonds shall be in the form generally used by the State of California Oil and Gas Industry and shall be in the amount and contain provisions as provided in this section.
(A) Single bonds. A corporate surety bond shall be in the sum of $5,000 and shall be executed by the operator as principal and by the authorized surety company as surety. It shall provide that the principal named in the bond shall faithfully comply with all the provisions of this title as to drilling or redrilling and maintaining all production facilities until property abandoned in conformity with the provisions of this title. The bond shall secure, indemnify and insure the city against all costs, charges, claims, causes of action, damages and expenses brought against it or incurred by it by reason of the failure of the principal to fully comply with the provisions of this title. The bond shall include the correct name or number of the well and such other information as may be necessary to readily identify the oil well. Any operator may, at the discretion of the Agency, furnish negotiable securities in a form prescribed by the Agency or cash in lieu of a corporate surety bond.
(B) Blanket bonds. The following provisions shall apply to blanket bonds:
(1) Any operator may, in lieu of filing a single bond for each well as required by §§ 14.12.010 and 14.12.020, file a bond covering all his or her oil operations within city in the amount of $10,000 if the oil operator has ten or fewer wells, $20,000 if he or she operates 25 or fewer wells and $25,000 if he or she operates more than 25 wells;
(2) Individual operators may collectively pool their wells for the purpose of obtaining a blanket bond. If they do so, they may provide a bond under the conditions of this subsection.
(`78 Code, § 14.12.040.)
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