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(A) In the event a permit shall be issued by the city, no actual operations shall be commenced until the permittee shall file with the city a bond and insurance certificates as follows:
(B) The permittee shall file with the city certificates of the insurance, as stated below, and shall obtain the written approval thereof of the City Manager or his or her designee who shall act thereon promptly after the date of the filing.
(C) The insurance policy or policies shall not be canceled without written notice to the City Manager or his or her designee at least 30 days prior to the effective date of the cancellation. In the event the policy or policies are canceled, the permit granted shall immediately thereupon terminate without any action on the part of the City Manager or his or her designee, and permittee’s rights to operation under the permit shall cease until permittee files additional insurance as provided herein.
(1) 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 city and maintained at all times as a blanket site restoration bond or a blanket site restoration irrevocable letter of credit in the principal sum of $25,000. The 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, with the permittee as principal or debtor, running to 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 article in the drilling and operation of all oil or gas wells drilled or operated within the city. The bond or letter of credit must become effective on or before the date same filed with the city and remain in full force and effect for at least 12 months subsequent to the expiration of the permit term, and in addition, the bond or letter of credit must be conditioned that the permittee must promptly pay all fines, penalties and other assessments imposed upon the permittee by reason of his or her breach of any of the terms, provisions or conditions of this article, and that the permittee must promptly restore the streets, sidewalks and other public property within the city which may be disturbed or damaged during the permittee’s operations, to their former condition; and that the permittee must promptly clear all premises of all litter, trash, waste and other substances, and must, after plugging and abandonment, grade, level and restore the property to the same surface condition, as far as possible, as existed prior to commencing operations; and further that the permittee shall indemnify and hold harmless the city from and all liability attributable to granting the permit; and that the permittee shall promptly pay all sums with respect to deductibles on covered losses under insurance policies required by this article; and that the permittee shall comply with all of the terms of this article concerning the plugging and abandonment of all wells. Each bond or letter of credit submitted shall cover all wells drilled or operated by the person within the city as specifically described all wells covered by name, legal description and oil and gas permit number, if any. For good cause shown, the city, after notice to a permittee and opportunity for hearing, may require the filing of a blanket bond or letter of credit for all wells within the city in an amount higher than $25,000, but not to exceed $100,000. “Good cause” shall include, but shall not be limited to a showing that the operator or permittee has previously violated the provisions of this article, or that the operator has multiple wells that in the exercise of ordinance prudence, the City Council shall require an additional amount.
(2) In addition to the bond required in division (C)(1) above, the permittee shall obtain $1,000,000 seepage and pollution insurance per well for the benefit of the city and all persons concerned, conditioned that the permittee will comply with every applicable federal and state law, rules, regulations, standard or directive relating to the maintenance of the safe and beneficial physical, chemical and biological properties of any natural waters of the city. The permittee shall obtain the necessary permits from the city and state with regard to any operations which have the potential of rendering the waters harmful or detrimental or injurious to the public health, safety and welfare. The permittee shall bear all the cost necessary and incidental to the correction of any pollution to the waters caused by the permittee or permittee’s agents, servants, employees, subcontractors or independent contractors; that the permittee shall pay all fines, penalties, assessments or judgements resulting directly or incidentally from the permittee’s activities and which result in pollution of city waters. The permittee shall indemnify and hold harmless the city from any and all liability attributable to granting the permit where the liability results from the pollution of city waters.
(3) In addition to the bond and insurance required in divisions (C)(1) and (2) above, the permittee shall carry a policy or policies of standard comprehensive public liability insurance, including contractual liability covering bodily injuries and property damage, naming the permittee and the city, issued by an insurer authorized to do business within the state, the policy or policies in the aggregate of $1,000,000 per occurrence.
(Ord. 2991, passed 7-19-94)