A. Bond Requirements; Amounts; Conditions:
1. In the event a permit is authorized by the City under the terms of this chapter for the drilling and operation of a well, no actual drilling operations shall be commenced until the permittee files with the City Clerk a bond in the principal amount of at least two hundred thousand dollars ($200,000.00) on all wells operated by a single operator.
2. Said bond shall be executed by a reliable insurance company authorized to do business in the State as surety with the permittee as principal, said bond running in favor of the City for the benefit of the City and all persons concerned, conditioned that the permittee will comply with the terms and conditions of this chapter in the operation of the well for either natural or artificial production, injection or disposal.
3. Said bond shall become effective on or before the same is filed with the City and remain in force and effect for a period of at least one year after the expiration of the term of the permit issued.
4. In addition, the bond will be conditioned that the permittee:
a. Will promptly pay all fines, penalties and other assessments imposed upon the permittee by reason of the breach of any other terms, provisions and conditions of this chapter;
b. Will promptly restore to their former condition the streets, sidewalks and other public property of the City, which may be disturbed or damaged by the operations;
c. Will promptly clear the premises of all litter, trash, waste, and the substances used, allowed or occurring in the drilling or production operations;
d. Will (after drilling operations are complete) grade, level, and restore said property to the same surface condition as nearly as possible, as existed when operations for the drilling of the well was first commenced;
e. Will comply with every applicable Federal and State law, Municipal ordinance, rule, regulation, standard or directive relating to the maintenance of the safe and beneficial physical, chemical, and biological properties of any waters of the City or lands within the City;
f. Will bear all the costs necessary and incidental to the correction of any pollution to the waters of the City or lands within the City caused by the permittee or his agents, servants, employees, subcontractors, or independent contractors; and
g. Shall indemnify and hold the City harmless from any and all liability attributable to granting the permit.
B. Commercial Liability And Excess Liability Insurance; Conditions: In addition to the bond required above, the permittee shall carry a policy or policies of standard comprehensive public liability insurance, and such policies shall:
1. Contain coverage for contamination or pollution of surface or subterranean streams, watercourses, lakes, or public or private water supplies.
2. Be conditioned for payment of all damages due to injury to persons or damage to property resulting from the drilling, operation, or maintenance of the proposed well or any structure, machinery, equipment, pipelines, or appurtenances used in connection therewith.
3. Name the permittee and the City as additionally insured.
4. Be issued by an insurance company authorized to do business within the State, and said policy or policies shall provide for minimum coverage of:
a. Bodily Injury And Property Damage: Coverage should be a minimum combined single limit of one million dollars ($1,000,000.00) per occurrence for bodily injury and property damage. This coverage shall include premises, operations, blowout or explosion, products, completed operations, blanket contractual liability, underground property damage, broad form property damage, independent contractors protective liability and personal injury.
b. Environmental Impairment: Environmental impairment (or seepage and pollution) shall be either included in the coverage or written as separate coverage, and shall be a minimum of two million dollars ($2,000,000.00). Such coverage shall not exclude damage to the lease site. If environmental impairment (or seepage and pollution) coverage is written on a "claims made" basis, the policy shall provide that any retroactive date applicable precedes the effective date of the issuance of the permit. Coverage shall apply to sudden and non-sudden pollution conditions resulting from the escape or release of smoke, vapors, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste material or other irritants, contaminants or pollutants.
c. Excess Liability (Umbrella): Excess liability insurance policy with limits of liability of not less than five million dollars ($5,000,000.00) over the above required general liability insurance policy. Excess policy must follow the form of the underlying liability policy.
C. Certificates Filed With City; Notice Of Cancellation:
1. The permittee shall file with the City Clerk, certificates of said insurance or bond.
2. Said insurance policy or policies, or bonds shall not be canceled without actual written notice received by the City Clerk at least thirty (30) days prior to the effective date of said cancellation. In the event said insurance policy or policies are canceled, the permit granted shall terminate immediately, and permittee's rights to operate under said permit shall cease immediately until permittee files additional insurance as provided herein. Further, if said insurance policy or policies are canceled or allowed to expire, the building official shall notify the electric company of the violation, and service to all wells not conforming shall be discontinued immediately. For other wells (not electric) an injunction will be filed immediately.
D. Cash Bond And Agreement: The permittee may satisfy the bond requirement as set out in subsection A of this section by furnishing the City with a two hundred thousand dollar ($200,000.00) cash bond which shall be governed by an agreement between the permittee and the City. Said agreement and cash bond shall be conditioned by all the terms of this section. (Ord. 2018-04, 1-4-2018)