Every person, firm, or corporation who contracts with the city for work or materials exceeding $500 shall, before his contract shall be binding upon the city, execute (in addition to the indemnifying bond hereinbefore required) a performance bond, with good and sufficient security in such penal sums of 10% of the contract price or $10,000, whichever is greater, conditioned for the faithful performance of the same and observance of all the ordinances of the city. Such performance bond shall remain in full force and effect for a year after completion and acceptance of the work done and/or material used.
(`79 Code, § 33.025)