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Home My WebLink About020903 ORD - 04/03/1990AN ORDINANCE AMENDING THE CODE OF ORDINANCES, CHAPTER 35, OIL AND GAS WELLS, SECTION 35-80, INSURANCE AND BONDS, BY DELETING SAID SECTION IN ITS ENTIRETY AND SUBSTITUTING THEREFOR THE FOLLOWING SECTION 35-80. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1. That the Code of Ordinances, Chapter 35, Oil and Gas Wells, Section 35-80, Insurance and bonds, is hereby amended by deleting said section in its entirety and substituting therefor the following Sec. 35-80, to read as follows: Sec. 35-80. Insurance and bonds. The holder of any well permit issued hereunder shall obtain and maintain in force a policy or policies of comprehensive general liability insurance, including explosion, collapse, underground and environment pollution endorsements, or comprehensive well control insurance, issued by a reliable insurance company or companies authorized to do business excellent or better and a in Texas and having a policyholder financial rating of BBBB or better rating of according to the ratings issued by the Best Insurance Guide. Said insurance shall provide coverage for the permittee, and the city as an additional named insured, against claims for bodily injury or property damages which might be sustained by any member of the public or by the city by reason of any operations conducted under said well permit, with minimum limits of one million dollars ($1,000,000.00) for bodily injury per occurrence and in the aggregate, and one million dollars ($1,000,000.00) property damage per occurrence. The aforesaid limits may be obtained through any combination of specific, excess, or umbrella coverages. All of said policies shall require that the insurers provide the city written notice of cancellation of any such ORD-RES\90024 1 MICROFILMED policies not less than thirty (30) days prior to the date of cancellation. In the sole discretion of the city, a permittee may be allowed to operate, but not drill, with the foregoing minimum insurance limits reduced to five hundred thousand dollars ($500,000.00) if said permittee substantially meets the following criteria: (1) The permittee has no more than two (2) producing wells under permit from the city. (2) All well and tank battery loctions are remote from developed areas. (3) All wells are operating by artificial lift or have a shut-in pressure of fifty (50) pounds per square inch or less. (4) Fences, fire wall capacity, and other safety features of all wells are acceptable. (5) All wells are located inland. (6) The permittee can show that the pumper/gauger can be readily available in cases of emergency. In the event a reduction in the minimum liability limits is granted, all of the other requirements pertaining to the types of insurance coverage and policy provisions described above shall remain applicable. The holder of any permit to drill and/or operate a well issued hereunder shall post a corporate surety bond, executed by the permittee as principal and by a corporate surety acceptable to the city, as obligee, and conditioned that the principal named in the bond shall faithfully comply with all of the provisions of this chapter and ORD-RES\90024 2 of the permit until the permit shall have been released by the principal and the release shall have been approved by the city as provided herein. For each bond or letter of credit, provided hereunder, documentation of the renewal or substitution of a bond or letter of credit shall be received by the Petroleum Superintendent no less than ten (10) days prior to expiry of the then current bond or letter of credit. Such bond shall secure the city against all costs, charges and expenses incurred by it by reason of the failure of the principal to fully comply with the provisions of the permit and of this chapter. The bond for any well permit with a surface location in a bay area that is accessible only via marine vessel shall be fifty thousand dollars ($50,000.00) per permit, the bond for any number of well permits with surface locations on land and accessible by a land vehicle shall be twenty thousand dollars ($20,000.00) and the bond for any well permit with a surface location in the Gulf of Mexico shall be two hundred thousand dollars ($200,000.00). No permit holder shall be required to post more than a two hundred thousand dollar ($200,000.00) bond for any number of well permits required by this chapter. In lieu of the above described bond, a permittee may be allowed to submit an irrevocable letter of credit, naming the city as beneficiary, in face value equal to that of the bond as described above. Drafts on such letter of credit shall be issued based on a statement in writing from the petroleum superintendent, setting forth the circumstances giving rise to the draft, and accompanied by a properly drawn draft in an amount not to exceed the face value of the letter of credit. The letter of credit format shall be approved by ORD-RES\90024 3 the City Attorney's office and shall require annual pre -expiry renewal, and be subject to call for non -renewal as set out above. In lieu of bond and insurance for permits, a permittee may be allowed to post an indemnity agreement with the city conditioned in the same manner as bond and insurance required hereunder if such permittee files a balance sheet and financial statement certified by a recognized firm of certified public accountants reflecting the net worth of permittee to be in excess of twenty million dollars ($20,000,000.00). The city reserves the right to increase the limits and types of coverages required and will provide sixty (60) days notice of intent to change coverages or limits to the permit holders. (Ord. No. 18177, Sec. 1, 4-11-84; Ord. No. 18842, Sec. 1, 5-21-85) SECTION 2. If for any reason any section, paragraph, subdivision, clause, phrase, word or provision of this ordinance shall be held invalid or unconstitutional by final judgment of a court of competent jurisdiction, it shall not affect any other section, paragraph, subdivision, clause, phrase, word or provision of this ordinance for it is the definite intent of this City Council that every section, paragraph, subdivision, clause, phrase, word or provision hereof be given full force and effect for its purpose. SECTION 3. Publication shall be made one time in the official publication of the City of Corpus Christi by publishing the caption stating in substance the purpose of the ordinance, this ordinance to become effective upon such publication. ORD-RES\90024 4 fiat the foregoing ordinance was read for the first time and passe its second reading on this the day of 19 , by the following vote: Betty N. Turner Cezar Galindo Leo Guerrero Tom Hunt Edward A. Martin Joe McComb Clif Moss Mary Rhodes Frank Schwing, Jr. That the foregoing ordinance was read for the second time and to its third reading on this the —i day of INV(CI) 19 jc , by the following vote: Betty N. Turner (Lt f passed Edward A. Martin /' Cezar Galindo (LI* Joe McComb I_ Leo Guerrero 6(1 5- Clif Moss (ILL / , Tom Hunt 70 C. Mary Rhodes 4y (jj/iG i . LA Frank Schwing, Jr. Iti, That the foregoing or finance was re for he third tim and passed finally on this the day of �t )1111 , 19 C , by the following vote: //yt Betty N. Turner (t (1l L1(iLt. Edward A. Martin /t Cezar Galindo(Joe McComb (i_ (L /fit Leo Guerrero (i,( L Clif Moss ('I, Tom Hunt (L1 � Mary Rhodes (IL ' / l / �, rr Jr. (,?f/l. Frank Schwing, PASSED AND APPROVED, this the day of ATTEST: Aikx,,rt4 J c, , City Secretary APPROVED: DAY OF jl:a “A , 19'x' HAL GEORGE, CITY ATTORNEY BY 1CLjtA Assistant City Attorney ,; 044 L-4 19 r_ YOR 1 THE CITY OF CORPUS CHRISTI azLz tri al- , z o-. 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