(A) A security instrument that covers each well must be delivered to the city before the issuance of the gas well permit for the well. The instrument must provide that it cannot be cancelled without at least 30 days’ prior written notice to the city.
(B) As to each well, the instrument shall secure the obligations of the operator to:
(1) Comply with the road repair agreement and the insurance provisions set forth in this chapter; and
(2) Pay fines and penalties imposed upon the operator by the city for any breach of the gas well permit, this chapter or the applicable specific use permit.
(C) The security instrument may be in the form of an irrevocable letter of credit issued by a bank located in the City of Mansfield, Texas and approved by the city or a payment bond issued by a surety approved by the city. The instrument shall run to the city for the benefit of the city, shall become effective on or before the date the gas well permit is issued, and shall remain in force and effect for a period not less than six months after the expiration or termination of the gas well permit or after the well is plugged and abandoned and the site restored.
(D) A certificate of deposit may be substituted for the letter of credit or payment bond. The certificate shall be issued by a bank located in the City of Mansfield, Texas and approved by the city, shall be payable to the order of the city to secure the obligations of the operator described above, and shall be pledged to the city with evidence of delivery provided to the city and an appropriate control agreement signed by the issuing bank sufficient to perfect the city's interest in the deposit. Interest on the certificate of deposit shall be payable to the operator.
(E) The amount of the security shall be $100,000 for any single well and $200,000 for multiple wells on a "blanket" basis under the same gas well permit.
(F) The form and substance of the documents evidencing the security instruments described above must be acceptable to the city within its sole discretion.
(Ord. OR-1942-15, passed 3-23-15) Penalty, see § 114.99