A. In the event a permit is issued by the city council under the terms of this chapter for the drilling of a well, or installation of a trunkline pipeline or installation of a water flooding project or gas injection project, no actual operations shall be commenced unless the permittee shall file with the city administrator a bond and certificate of insurance as follows:
1. A bond in the principal sum of twenty-five thousand dollars or such amount as may be determined by the city council and the bond shall be executed by a reliable company authorized to do business in the state, as surety, and the applicant as principal, running to the city for benefit of the city and all persons concerned, under the condition that the permittee shall comply with the terms and conditions of the trunkline pipelines, water flooding project or gas injection project. In addition to the bond, permittee shall obtain policy or policies of commercial general liability in policy limits of five million dollars, naming the city as additional insured and waiving all rights of subrogation against the city.
2. Such bond shall become effective on or before the date it is fded with the city administrator and remain in force and effect for at least a period of six months subsequent to the expiration of the term of the permit issued; and in addition, the bond will be conditioned that the permittee will promptly pay all legally imposed fines, penalties, attorney's fees and other assessments imposed upon permittee by reason of his breach of any of the terms, provisions and conditions of this chapter and that the permittee will promptly restore the streets and sidewalks and other public property of the city, which may be disturbed or damaged in the operations, and will after abandonment, or completion, grade, level and restore such property to the same surface conditions, as nearly as possible, as existed when operations were first commenced, and that the permittee will indemnify and hold the city harmless from any and all liability growing out of or attributable to the granting of such permit. If at any time the city council shall, after a hearing thereon, deem any permittee's bond to be insufficient for any reason, it may require the permittee to file a new bond.
3. If, after the completion of a producing well, the permittee has complied with all the provisions of this chapter, he may apply to the city council to have the bond reduced on each well unit the well is plugged. During reworking operations, the amount of the bond shall be increased to the original amount.
B. In addition to the bond, required in subsection A of this section, the drilling contractor shall obtain policy or policies of commercial general liability, including explosion, collapse, underground and pollution hazards at policy limits of five million dollars underwritten in class codes 98157 or 98158 whichever is applicable. Pulling unit, work over rigs or other servicing contractors shall obtain commercial general liability coverages including the explosion, collapse, underground and pollution hazards at policy limits of one million dollars in appropriate class codes respective to city limits. All coverages of any contractor shall name the city as an additional insured, and waive all rights of subrogation against the city.
C. The permittee shall file with the city administrator a certificate of such insurance together with a full and complete copy of the policy. The insurance policy shall not be canceled without written notice to the city administrator at least fifteen days prior to the effective date of such cancellation. If such insurance policy is canceled, the permit granted shall terminate, and the permittee's right to operate under such permit shall cease until permittee files additional insurance. If after the completion of a well, or other project, the permittee has complied with all provisions of this chapter, such as removing any derrick, completion of the pipeline, clearing of the premises, etc., he may apply to the city council to have such insurance policy reduced. During reworking operations, the amount of the insurance coverage shall be increased to the original amount. (Ord. 418 (part), 1998; Ord. 415 Exh. A (part), 1998)