HomeMy WebLinkAbout022321 ORD - 08/15/1995AN ORDINANCE
AMENDING THE CODE OR ORDINANCES, OIL AND GAS SECTION 35-
80, INSURANCE AND BONDS, TO REQUIRE THAT WELL PERMITTEES
"LETTERS OF CREDIT" BE FROM BANKS IN CORPUS CHRISTI,
TEXAS; TO AUTHORIZE THE CASHING OF SURETIES IF
REPLACEMENT SURETIES ARE NOT PROVIDED BY SUCCESSOR
WELL OPERATORS WITHIN 30 DAYS OF OWNERSHIP TRANSFERS;
AND TO REQUIRE BONDING COMPANIES TO REDEEM BONDS WHEN
THE CITY ENCOUNTERS THE OBLIGATION TO EXPEND FUNDS TO
IMPLEMENT THE CITY CODE.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF CORPUS CHRISTI:
SECTION 1. That the Code of Ordinances, Section 35-80 be amended as follows:
Sec. 35-80. Insurance and bonds.
(a) The holder of any well permit issued hereunder shall obtain and maintain in force insurance
required as determined in accordance with the provisions of ordinance no. 19277, as amended.
(b) The holder of any permit to drill and/or operate a well issued hereunder shall be responsible
for all environmental pollution caused by its well(s). The permittee's responsibility shall include, but
not be limited to, paving for or doing all clean up and remediation of environmental pollution,
paying all fines and penalties levied by any governmental agency, and any other actions required by
governmental agencies.
(c) 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 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. Such bond shall
secure the city against all costs, charges and expenses I..e"..Ld by it by tease.. of related to the
failure of the principal to fully comply with the provisions of the permit and of this chapter,
regardless of whether the city has incurred any costs. 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 dollars
($200,000.00) bond for any number of well permits required by this chapter. A bond issued under
this provision must be valid for six (6) months or more and require as sole documentation for
AG5000.680
022321
MICROFItME )
payment a statement in writing from the petroleum superintendent setting forth the circumstances
giving rise to the call on the bond, or a statement of the failure to furnish proof of renewal or
replacement of the bond, no less than thirty (30) days prior to the expiry of the then current bond.
Such bond must be renewed upon expiration, and proof of such renewal must be received by the
city's petroleum superintendent or successor official "petroleum superintendent" at least thirty (30)
days prior to expiration. If no renewal is received, or cash or other approved substitute security in
lieu thereof, the city may, after ten (10) days prior written notice mailed to the permittee at the
address listed on the permit, call the bond for failure to timely renew. If the bond is called for failure
to timely renew, the money will be held in an account as if cash had been posted in lieu of a bond.
The city shall not be liable for any interest on any bond so called.
(d) 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.
An irrevocable letter of credit under this provision must be issued by a financial institution with
offices located within the City of Corpus Christi. by one of its Corpus Christi offices Statc of Tcxaa,
be valid for six (6) months or more, and require as sole documentation for payment 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, or a statement of the failure to furnish proof of renewal or replacement of the letter of credit,
no less than thirty (30) days prior to expiry of the then current letter of credit. Such letter of credit
must be renewed upon expiration and proof of such renewal must be received by the petroleum
superintendent at least thirty (30) days prior to expiration. If no renewal is received, or cash in lieu
thereof, the city may, after ten (10) days prior written notice mailed to the permittee at the address
listed on the permit, call the letter of credit for failure to timely renew. If the letter of credit is called
for failure to timely renew, the money will be held in an account as if cash had been posted in lieu
of a letter of credit. The city shall not be liable for interest on any letter of credit so called.
(e) In lieu of the above-described bond, a permittee may be allowed to submit a certificate of
deposit, in face value equal to that of the bond as described above. A certificate of deposit under this
provisions must be made out jointly to the customer and the city, endorsed by the customer and
physically held by the city, issued by a financial institution with offices located within the City of
Corpus Christi. by one of its Corpus Christi offices Statc of Tcxaa, be valid for six (6) months or
more, and require as sole documentation for payment a statement in writing from the petroleum
superintendent setting forth the circumstances giving rise to the draft, or a statement of the failure
to furnish proof of renewal or replacement of the certificate of deposit, no less than thirty (30) days
prior to expiry of the then current certificate of deposit. Such certificate of deposit must be renewed
on expiration and proof of such renewal must be received by the petroleum superintendent at least
thirty (30) days prior to expiration. If no renewal is received or cash in lieu thereof, the city may,
after ten (10) days prior written notice mailed to the permittee at the address on the permit, call the
certificate of deposit for failure to timely renew. If the certificate of deposit is called for failure to
timely renew, the money will be held in an account as if cash had been posted in lieu of a certificate
of deposit. The city shall not be liable for interest on any certificate of deposit so called.
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(I) In lieu of bond and insurance for permits, a permittee may be allowed to post an indemnity
agreement, in a form acceptable to city, 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).
(g) The city manager reserves the right to adjust 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.
Permittee agrees to adjust its insurance policy(ies) as directed at its next renewal date or within one
year from notice of the adjustment whichever occurs sooner.
(h) If a company sells or transfers a well, and the company to whom the well is sold or
transferred does not furnish proof of a bond, or other approved substitute security, or cash, in the
required amount to the City within thirty (30) days after the earlier of the date the well was sold or
transferred or the operatorship was changed at the Texas Railroad Commission, or successor agency
there is a rebuttable presumption that the new owner of the well does not intend to furnish a bond
or otherwise comply with the well permit ordinances, and the City may call the bond from the
company who has the current permit for the well. The sole documentation for payment is a
statement in writing from the petroleum superintendent that the new company did not furnish the
required bond within thirty (30) days of the time specified above. A failure to timely provide such
a new bond other as .roved substitute securi or cash shall be .resumed to cause the cit dama_•
in the full amount of the bond or other approved substitute security, or cash.
es
(i) A failure to timely renew insurance or a bond other approved substitute security or cash shall
be presumed to cause the city damages in the full amount of the bond or other approved substitute
security or cash.
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That the foregoing ordinance was read for the first time and passed to its second reading on this the
Day of aa , 19.flty the following vote:
Mary Rhodes
Dr. Jack Best
Betty Black
Melody Cooper
Tony Heldenfels
te-
Betty Jean Longoria
John Longoria
Edward A. Martin
Dr. David McNichols
eSid
That the foregoing ordinance was read for the second time and passed finally on this the (5 Day
of CU, 19 n°j, by the following vote:
Mary Rhodes
Dr. Jack Best
Betty Black
Melody Cooper
Tony Heldenfels
PASSED AND APPROVED this the
ATTEST:
City Secretary
I5
Betty Jean Longoria
John Longoria
Edward A. Martin
Dr. David McNichols
Day of
''` t/kj Ll 19 (:IL-) .
MAYOR
THE CITY
, 1995 :
APPROVED:.- DAY OF .c t-`.
JAMES R. BRAY, JR., CITY ATTORNEY
By:
Alison Gallaway
Assistant City Attorney
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022321
F CORPUS CHRISTI
PUBLISHER'S AFFIDAVIT
State of Texas, } CITY OF CORPUS CHRISTI
County of Nueces } ss: Ad 59699
PO#
Before me, the undersigned, a Notary Public, this day personally came Darrell G. Coleman,
who being first duly sworn, according to law, says that he is Vice -President and Chief Financial
Officer of the Corpus Christi Caller -Times, a daily newspaper published at Corpus Christi in
said County and State, generally circulated in Aransas, Bee, Brooks, Cameron, Duval, Hidalgo,
Jim Hogg, Jim Wells, Karnes, Kenedy, Kleberg, Live Oak, Nueces, Refugio, San Patricio,
Victoria, and Webb Counties, and that the publication of NOTICE OF PASSAGE OF
ORDINANCE NO. 022321 which the annexed is a true copy, was published in the Corpus
Christi Caller -Times on the 21ST day(s) of AUGUST. 1995.
ONE (11 Time(s)
$ 42.50
Vice -President and Chief Financial Officer
Subscribed and sworn to before me this 30TH day of
AUGUST. 1995.
Notary Public, Nueces County, Texas
CONNIE HARALSON
Print or Type Name of Notary Public
My commission expires on 5/14/97.
C12/Monday, August 21, 1995
N•TI
ORDINANCE
Amending the
naives, O6 ant Section
35-80, Ins US $on0a, to
require that we pamtips.'let-
ters of credr bs MYS:EI1Ns In
Corpus Christi, Texas; to autho-
rize the oohing of sureties if
replacement sureties are not
provided by ou0comes *s l op-
erators within 30 days of
ownership transfers; and to re-
quire bondMrymnsman to
redeem bonds when tMdty en-
counters the otp(s nt to
expend funds to the
City Code. TNS ottinan0a: was
passed and approved Sy the
City Council of the Qty of Cor-
pus Christi on the te9yday of
August, 1996.
hr Armando Chapa
City $acratary
City of Corpus Christi