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ORD 2003-11 P&ZTOWN OF TROPHY CLUB, TEXAS ORDINANCE NO. 2003-11 P&Z AN ORDINANCE OF THE TOWN OF TROPHY CLUB, TEXAS REPEALING ORDINANCE NO. 2003-05 OF THE TOWN REGULATING THE DEVELOPMENT OF OIL AND GAS WELLS WITHIN THE CORPORATE LIMITS OF THE TOWN OF TROPHY CLUB; AND ADOPTING A NEW ORDINANCE AMENDING ORDINANCE NO. 2000- 06 P&Z OF THE TOWN, THE SAME BEING THE COMPREHENSIVE ZONING ORDINANCE, BY AMENDING ARTICLE 5, ENTITLED "SUPPLEMENTARY DISTRICT REGULATIONS" TO ADD SECTION 43.1 TO ADOPT PROVISIONS FOR "OIL AND GAS WELL DRILLING AND PRODUCTION WITHIN THE CORPORATE LI [ITS OF THE TOWN OF TROPHY CLUB"; PROVIDING FOR THE INCORPORATION OF PREMISES; ESTABLISHING A PURPOSE; PROVIDING DEFINITIONS; PROVIDING CRITERIA FOR OIL AND GAS WELL DRILLING AND PRODUCTION `BY SPECIFIC USE PERMIT (SUP)"; PRESCRIBING SPECIFIC USE PERMIT APPLICATION REQUIREMENTS; ESTABLISHING STANDARDS FOR RECOMMENDATIONS FOR SPECIFIC USE PERMITS; PROVIDING OIL AND GAS WELL PERMIT REQUIREMENTS; PRESCRIBING CRITERIA FOR THE REVIEW OF APPLICATIONS FOR OIL AND GAS WELL PERMITS; PROVIDING FOR INSURANCE AND INDEMNIFICATION; PROVIDING FOR SECURITY; ESTABLISHING PROVISIONS FOR PERIODIC REPORTS; PROVIDING FOR NOTICE OF ACTIVITIES; ESTABLISHING PROVISIONS FOR ABANDONMENT OF WELLS AND PIPELINES; SETTING FORTH CRITERIA FOR AMENDED OIL AND GAS WELL PERMITS; PROVIDING FOR THE TRANSFER OF OIL AND GAS WELL PERMITS; ESTABLISHING REMEDIES OF THE TOWN; PROVIDING FOR ENFORCEMENT, RIGHT OF ENTRY; PROVIDING A PENALTY NOT TO EXCEED THE SUM OF TWO THOUSAND DOLLARS {$2,000.00} FOR EACH OFFENSE AND A SEPARATE OFFENSE SHALL BE DEEMED COMMITTED EACH DAY DURING OR ON WHICH A VIOLATION OCCURS OR CONTINUES; PROVIDING A SAVINGS CLAUSE; PROVIDING A CUMULATIVE REPEALER CLAUSE; PROVIDING A SEVERABILITY CLAUSE; PROVIDING FOR PUBLICATION; PROVIDING FOR ENGROSSMENT AND ENROLLMENT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Town of Trophy Club, Texas, (the "Town") has the authority and power to adopt regulations governing the use of land in the interest of the public health, safety and welfare of its citizens and providing for the orderly development of land within the Town; and WHEREAS, safety, aesthetic, land use and other concerns create the need to enact provisions reg dating the operation and impact of oil and gas wells; and 1 of 20 WHEREAS, on March 17, 2003, the Town adopted Ordinance No. 2003-05, regulating the development of oil and gas wells within the corporate limits of the Town of Trophy Club; and WHEREAS, the Planning & Zoning Commission and the Town Council now deems it necessary for the safe, orderly and healthful development of the Town, and in the best interest of the Town of Trophy Club, Texas, to repeal Ordinance No, 2003-05, and adopt new provisions; and WHEREAS, the adoption of such new provisions has been reviewed by the Town's Planning & Zoning Commission, and after holding the required public hearing, the Planning & Zoning Commission recommends approval of such provisions through this Ordinance by amending Ordinance No. 2000-06 P&Z, the same being the Comprehensive Zoning Ordinance, Article 5, by adding Section 43. 1, entitled "Oil and Gas Well Drilling and Production within the Corporate Limits of the Town of Trophy Club" (herein after referred to collectively as the "Drilling Ordinance"); and WHEREAS, all legal notices, required public hearings and other conditions required by law having been complied with, the proposed Drilling Ordinances was considered by the Planning & Zoning Commission and the Town Council; NOW, THE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF TROPHY CLUB, TEXAS: SECTION Z. INCORPORATION OF PREMISES The above and foregoing premises are true and correct and are incorporated herein and made a part hereof for all purposes. SECTION 2. FINDINGS After due deliberations and consideration of the recommendation of the Planning & Zoning Commission and the information and other materials received at the public hearings, the Town Council has concluded that the adoption of this Ordinance is in the best interests of the Town of Trophy Club, Texas, and of the public health, safety and welfare and is consistent with the Town's Comprehensive Land Use Plan. SECTION 3. AMENDMENT Ordinance No. 2000-06 P&Z, of the Town of Trophy Club, Texas, the same being the Town's Comprehensive Zoning Ordinance, is hereby amended in the following particulars, and all other articles, chapters, sections, paragraphs, sentences, phrases and words are not amended but are hereby ratified and affirmed: 2of20 A. Purpose: The exploration, development and production of oil or gas in the Town is an activity which necessitates reasonable regulation to ensure that all property owners, mineral and otherwise, have the right to peaceably enjoy their property and its benefits and revenues. It is hereby declared to be the purpose of this article to establish reasonable and uniform limitations, safeguards and regulations for present and future operations related to the exploring, drilling, developing, producing, transporting and storing of oil or gas and other substances produced in association with oil or gas within the Town to protect the health, safety and general welfare of the public, minimize the potential impact to property and mineral rights owners, protect the quality of the environment and encourage the orderly production of available mineral resources. B. Definitions: All technical industry words or phrases related to the drilling and production of oil and gas wells not specifically defined shall have the meanings customarily attributable thereto by prudent operators in the oil and gas industry. For the purposes of this Ordinance, the following definitions shall apply unless the context clearly indicates or requires a different meaning. Abandonment: "Abandonment" as defined by the Railroad Commission and includes the plugging of the well and restoration of the drill site as required by this Ordinance. Applicant/Permittee: A person to whom a permit or certificate for the drilling, operation and production of a well, or the installation or operation of a pipeline, is issued under this Ordinance, including, but not limited to, his or her heirs, legal representatives, successors or assigns. Drill Site: The area used for drilling, completing, or re -working a well. Drilling: Any digging or boring of a new well to develop or produce oil or gas or to inject gas, water, or any other fluid or substance into the earth. Drilling means and includes the re-entry of an abandoned well. Drilling does not mean or include the re- entry of a well that has not been abandoned. Exploration: Geologic or geophysical activities, including, but not limited to surveying and seismic exploration, related to the search for oil, gas, or other sub -surface hydrocarbons. Fire Code: The Fire Code adopted by the Town of Trophy Club, as amended. Gas: Gas or natural gas, as such terms are used in the rules, regulations, or forms of the Railroad Commission. Gas Well: Any well drilled for the production of gas or classified as a gas well under the ------ Texas Natural Resources Code or the Railroad Commission. 3 of 20 Gas Well Permit: A Gas Well Permit applied for and issued or denied under this Ordinance authorizing the drilling, production, and operation of one or more gas wells. Gathering Station: Specific Use site where the gathering lines for all the wells converge. Hazardous Materials Management Plan: The hazardous materials management plan and hazardous materials inventory statements required by the Fire Code. New Well: A new well bore or new hole established at the ground surface and shall not include the re -working of an existing well that has not been abandoned unless the rework intends to drill to a deeper total depth, which shall require a new well permit. Oil: Oil, as such terms are used in the rules, regulations, or forms of the Railroad Commission. Oil & Gas Well Manual: Adopted by Town Council of the Town of Trophy Club, Texas. Oil Well: Any well drilled for the production of oil or classified as an oil well under the Texas Natural Resources Code or the Railroad Commission. Oil Well Permit: An Oil Well Permit applied for and issued or denied under this Ordinance authorizing the drilling, production, and operation of one or more oil wells. Operation Site: The area used for development and production and all related operational activities of oil and gas after drilling activities are complete. Operator: For each well, the person listed on the Railroad Commission Form W-1 or Form P-4 for an oil or gas well. Person: Includes both the singular and plural and means an individual person, corporation, association, partnership, receiver, trustee, guardian, executor, administrator, and a fiduciary or representative of any kind. Petroleum Specialist: A person familiar with and educated in the oil and gas industry who has been retained by the Town. Pipeline Easement Map: A map indicating all gathering line easements. The easements must be located separately from the utility easements. Railroad Commission: The Railroad Commission of Texas. Structure: Any building intended for shelter, occupancy, housing or enclosure for persons, animals, cattle or storage. Town: The Town of Trophy Club, Texas. 4 of 20 Town Designee: Qualified oil and gas consultant as determined by the Town Manager. Town Staff: Employees and independent contractors performing services for the Town of Trophy Club, including but not limited to the Fire Marshall. Well: A hole or bore to any horizon, formation, or strata for the purpose of producing oil, gas, or other liquid hydrocarbons. C. Oil and Gas Well Drilling and Production "Sy Specific Use Permit (SUP)" The drilling and production of oil and gas within the corporate limits of the Town shall be permitted by Specific Use Permit provided that the property line of any residential structure or public building, institution or school is a minimum of one - thousand feet (1,000') from the wellhead and provided that the drilling and production of oil or gas meets the following requirements: a. All applicable standards set forth in this Ordinance and the Oil & Gas Well Manual, Standards for Oil and Gas Well Drilling and Production; b. An approved Oil and Gas Well Development Site Plan and a Road Repair Agreement are on file with the Town; and C. An Oil or Gas Well Permit has been issued by the Town. 2. The drilling and production of oil and gas within the corporate limits of the Town shall be permitted by Specific Use Permit as close as two hundred fifty feet (250') from the wellhead to the property line of a property with a residence located on it if all property owners agree in writing and provided that the drilling and production of oil or gas meets the requirements of this Ordinance and a Specific Use Permit. Upon request of a property owner, operator, or other applicant for SLIP (collectively referred to herein as "Applicant"), the Town Council, upon recommendation by the Planning and Zoning Commission, shall hear and shall seriously and fairly consider a request for a waiver from the requirement for a one -thousand foot (1,000') setback specified in subparagraph 1 of this Section. A waiver may be authorized and will not be contrary to the public interest, where, owing to special conditions, the literal enforcement of the provisions of the setback requirement will result in unnecessary hardship, including a substantial economic hardship; or the setback requirement would prevent an Applicant from accessing his/her mineral interest. Applicant may make such request for waiver as a part of his/her SUP application. 5 of 20 D. Specific Use Permit Application Requirements 1. No person, acting for himself or acting as an agent, employee, independent contractor, or servant for any person, shall engage in drilling or production of an oil or gas well within the corporate limits of the Town without first obtaining a Specific Use Permit. 2. An application for a Specific Use Permit for the drilling and production of an oil or gas well shall be filed by the person having legal authority. That person is presumed to be the record owner, mineral owner, or the duly authorized agent of either the record owner or the mineral owner. The applicant shall submit information evidencing his/her authority to file an application with the Town. 3. All applications to be considered for. Oil and Gas Drilling and Production under these regulations shall be submitted to the Town Planning & Zoning Coordinator, along with a completed application and fees, and must be in accordance with all Ordinance requirements. An application for Specific Use Permit may be submitted but shall not be considered as being filed with the Town until it has been determined to be administratively complete. An application for approval shall be considered administratively complete when Town staff determines that it meets all requirements of applicable Town Ordinances so that it may be reviewed by the Planning and Zoning Commission, has been placed on the agenda for the Commission, and the agenda has been posted as required by law. An incomplete application shall not be considered "filed" with the Town as defined in this Ordinance, but shall be returned to the applicant for completion and re -submittal. E. Recommendations for Specific Use Permits 1. The Planning & Zoning Coordinator shall forward all applications for Specific Use Permits to the Planning & Zoning Commission for review. An application may be submitted but shall not be considered as being filed with the Town until it has been determined to be administratively complete. The Planning & Zoning Commission shall review each application within thirty (30) days after fling and shall make recommendations regarding the applications to the Town Council. A copy of all recommendations shall be provided to the operator. The Planning & Zoning Commission may make recommendations regarding any aspect of the proposed oil or gas well development including, but not limited to, recommendations with respect to the standards set forth in this Ordinance. 2. In connection with its review of an application for a Specific Use Permit for the drilling and production of gas wells, the Planning & Zoning Commission may determine that it is necessary to hire a petroleum specialist to assist the Commission in reviewing the application. If such a determination is made, the Planning & Zoning Commission will provide the operator a written "scope of work" that the Commission proposes for such specialist. The Planning & Zoning Commission and the operator will attempt to agree upon the "scope of work"; 6 of 20 however, the decision of the Commission shall control. If required by the specialist, the operator will provide a retainer; otherwise, the operator will pay for the services of the specialist after they are rendered. All work performed by the specialist shall be itemized on a daily basis (including a description of the work and the amount of time spent), and such itemization shall be provided to the operator with each request for payment. 3. The Planning & Zoning Commission has the authority to establish guidelines to use in making recommendations for a Specific Use Permit. Guidelines shall be placed in the Oil and Gas Well Manual. 4. A public hearing shall be conducted for all applications for SUP pursuant to Article 5, Section 44.1 of the Town's Comprehensive Zoning Ordinance. Notice thereof shall be given in the manner and form required for amendments as set out in Section 53 of the Comprehensive Zoning Ordinance, entitled Amendments, and as required by State law; provided however, that notice of such public hearing shall be given to each owner, as indicated by the most recently approved municipal tax roll, of real property within five hundred feet (500') of the property line or one -thousand feet (1,000') from the wellhead, upon which an SUP application for oil and / or gas well drilling and production is being considered. If, because of the location of the proposed well site, the application of the notice requirements herein would result in notice being sent only to a sparsely populated area, including, but not limited to only a portion of a subdivision, the Town Manager may, at her discretion require additional notice at the applicant's expense. F. Oil and Gas Well Permit Required 1. Any person, acting for himself or acting as an agent, employee, independent contractor, or servant for any person, shall not engage in the drilling and production of oil or gas wells within the corporate limits of the Town without first obtaining an Oil and Gas Well Permit issued under this Ordinance. An operator may apply for and obtain separate permits covering each well or a "blanket" permit covering multiple wells within a Specific Use Permit. 2. When an Oil and Gas Well Permit has been issued covering a well, the permit shall constitute authority for drilling, operation, production, gathering of production, maintenance, repair, re -working, testing, site preparation consisting of rigs or tank batteries, plugging and abandonment, and any other activity authorized by this Ordinance associated with drilling or production by the operator and their respective employees, agents, and contractors. An Oil and Gas Well Permit shall also constitute authority for the construction and use of all facilities reasonably necessary or convenient in connection therewith, including gathering lines and discharge lines, by the operator and its respective employees, agents, contractors and subcontractors. 7 of 20 An Exploration Permit shall be required for exploration for oil or gas. Exploration for oil or gas means geologic or geophysical activities, including, but not limited to surveying and seismic exploration, related to the search for oil, gas, or other sub -surface hydrocarbons. 4. An Oil and Gas Well Permit shall not, however, constitute authority for the re- entering and drilling of an abandoned well. Re-entry and drilling of an abandoned well shall require a new Oil and Gas Well Permit. S. Applications for Oil and Gas Well Permits shall be in accordance with the following: a. Shall be submitted in writing, on forms provided by the Town. b. Shall include a copy of the applicable Pipeline Easement Map indicating the gathering station site. Shall be signed by the operator. d. Shall include the information required by the Oil and Gas Well Manual unless such information has been previously provided to the Town. G. Review of Applications for Oil and Gas Well Permit 1. All applications for Oil and Gas Well Permits shall be filed with the Planning & Zoning Coordinator who shall immediately forward all applications to the Town Designee for review. Incomplete applications shall be returned to the applicant, in which case the Town shall provide a written explanation of the deficiencies if requested by the applicant. The Town shall retain a processing fee determined by the Town's Fee Schedule, adopted by Ordinance. The Town may return any application as incomplete if there is a dispute pending before the Railroad Commission regarding the determination of the operator. 2. The Town Designee shall review each application within thirty (30) days after filing and shall determine whether the application includes all of the information required by this Ordinance, whether the application is in conformance with the applicable Oil and Gas Well Development Site Plan, the applicable Specific Use Permit, and whether the application is in conformance with the insurance and security requirements set forth in this Ordinance. The Town Designee shall forward a written report regarding its determination to the operator. The Town Designee shall review the application and the written report of the Fire Marshall and shall issue the Oil and Gas Well Permit within ten (10) days after receiving the Fire Marshall's report unless it is determined that the application is incomplete or that the application is not in conformance with the applicable 8 of 20 Development Site Plan and applicable Specific Use Permit. The Town Designee may employ a technical advisor. d. The Town Designee may condition the release of the approved Oil and Gas Well Permit upon the operator providing the security required by this Ordinance and upon the operator entering into a Road Repair Agreement that will obligate the operator to repair damage excluding ordinary wear and tear, if any, to public streets, including but not limited to bridges, caused by the operator or by the operator's employees, agents, contractors, subcontractors or representatives in the performance of any activity authorized by or contemplated by the approved Oil and Gas Well Permit. 5. The failure of the Town Designee to review and issue an Oil and Gas Well Permit within the time limits specified above shall not cause the application for the permit to be deemed approved. 6. Each Oil and Gas Well Permit issued by the Town shall: a. Identify the name of each well and its operator; b. Specify the date on which the Town issued each permit; C. Specify the date by which drilling must commence on at least one (1) well covered by the permit, otherwise the permit expires (such date shall not be less than one [1] year after the date of issuance). A one (1) year extension of time may be granted if existing conditions are the same; d. Specify that if drilling is commenced on at least one (1) well covered by the permit before the permit expires, the permit shall continue until the wells covered by the permit are abandoned and the site(s) restored; e. Incorporate, by reference, the insurance and security requirements set forth in this Ordinance; f. Incorporate, by reference, the requirement for periodic reports and for Notice of Activities set forth in this Ordinance; g. Incorporate the full text of the release of liability provisions set forth in this Ordinance; h. Incorporate, by reference, the conditions of the applicable Development Site Plan and applicable Specific Use Permit; i. Incorporate, by reference, the information contained in the permit application; 9 of 20 j. Incorporate, by reference, the applicable rules and regulations of the Railroad Commission, including the applicable "field rules"; k. Specify that no drilling operations (including the construction of internal private access roads) shall commence until the operator has provided the security required by this Ordinance; 1. Contain the name, address, and phone number of the person designated to receive notices from the Town, which person must be a resident of Texas, that can be served in person or by registered or certified mail; and M. Incorporate by reference all permits and fees required by the Town. n. The decision of the Town Designee to deny an application for an Oil and Gas Well Permit shall be provided to the operator in writing within 10 days after the decision, including an explanation of the basis for the decision, if requested by the operator. The operator may appeal any such denial to the Town Council. o. If the Town denies an application for an Oil and Gas Well Permit, nothing herein contained shall prevent a new permit application from being submitted to the Town for the same well. H. Insurance and Indemnification: The operator shall provide or cause to be provided the insurance described below for each well for which an Oil and Gas Well Permit is issued, such insurance to continue until the well is abandoned and the site restored. The operator may provide the required coverage on a "blanket basis for multiple wells". The operator shall provide an affidavit from the operator's insurance company certifying that the insurance provided complies with the requirements of this Ordinance. General Requirements: Indemnification and Express Negligence Provisions a. Each Oil and Gas Well Permit issued by the Town shall include the following language: Operator does hereby expressly release and discharge all claims, demands, actions, judgments, and executions which it ever had, or now has or may have, or assigns may have, or claim to have, against the Town of Trophy Club and/or its departments, its agents, officers, servants, successors, assigns, sponsors, volunteers, or employees, created by, or arising out of personal injuries, known or unknown, and injuries to property, real or personal, or in any way incidental to or in connection with the performance of the work performed by the operator under an Oil and Gas Well Permit and the operator caused by or arising out of, that sequence of events which occur from the operator under the Oil and Gas Well Permit and work performed by the operator shall fully defend, protect, indemnify, and hold harmless the Town of Trophy Club, Texas, and/or its departments, agents, officers, servants, employees, successors, 10 of 20 assigns, sponsors, or volunteers from and against each and every claim, demand, or cause of action and any and all liability, damages, obligations, judgments, losses, fines, penalties, costs, fees, and expenses incurred in defense of the Town of Trophy Club, Texas, and/or its departments, agents, officers, servants, or employees, including, without limitation, personal injuries and death in connection therewith which may be made or asserted by Operator, its agents, assigns, or any third parties on account of, arising out of, or in any way incidental to or in connection with the performance of the work performed by the Operator under an Oil and Gas Well Permit, and the Operator agrees to indemnify and hold harmless the Town of Trophy Club, Texas, and/or its departments, and/or its officers, agents, servants, employees, successors, assigns, sponsors, or volunteers from any liabilities or damages suffered as a result of claims, demands, costs, or judgments against the Town and/or, its departments, it's officers, agents, servants, or employees, created by, or arising out of the acts or omissions of the Town of Trophy Club, occurring on the drill site or operation site in the course and scope of inspecting and permitting the gas wells INCLUDING, BUT NOT LIMITED TO, CLAIMS AND DAMAGES ARISING IN WHOLE OR IN PART FROM THE SOLE NEGLIGENCE OF THE TOWN OF TROPHY CLUB OCCURRING ON THE DRILL SITE OR OPERATION SITE IN THE COURSE AND SCOPE OF INSPECTING AND PERMITTING THE OIL AND GAS WELLS. IT IS UNDERSTOOD AND AGREED THAT THE INDEMNITY PROVIDED FOR IN THIS SECTION IS AN INDEMNITY EXTENDED BY THE OPERATOR TO INDEMNIFY AND PROTECT THE TOWN OF TROPHY CLUB, TEXAS AND/OR ITS DEPARTMENTS, AGENTS, OFFICERS, SERVANTS, OR EMPLOYEES FROM THE CONSEQUENCES OF THE NEGLIGENCE OF THE TOWN OF TROPHY CLUB, TEXAS AND/OR ITS DEPARTMENTS, AGENTS, OFFICERS, SERVANTS, OR EMPLOYEES, WHETHER THAT NEGLIGENCE IS THE SOLE OR CONTRIBUTING CAUSE OF THE RESULTANT INJURY, DEATH, AND/OR DAMAGE. LIABILITY FOR THE SOLE NEGLIGENCE OF THE TOWN IN THE COURSE AND SCOPE OF ITS DUTY TO INSPECT AND PERMIT THE GAS WELL IS LIMITED TO THE MAXIMUM AMOUNT OF RECOVERY UNDER THE TORT CLAIMS ACT. b. All policies shall be endorsed to read "This policy will not be cancelled or non -renewed without 30 days advanced written notice to the owner and the Town except when this policy is being cancelled for nonpayment of premium, in which case 10 days advance written notice is required". C. Liability policies shall be written by carriers licensed to do business in Texas and with companies with A: VH1 or better rating in accordance with the current Best Key Rating Guide, or with non -admitted carriers that have 11 of 20 a financial rating comparable to carriers licensed to do business in Texas, and approved by the Town. d. Liability policies shall name as "Additional Insured" the Town and its officials, agents, employees, and volunteers. Waivers of subrogation be provided in favor of the Town. ation shall e. Certificates of insurance must be presented to the Town evidencing all coverage's and endorsements required by this Ordinance, and the acceptance of a certificate without the required limits and/or coverage's shall not be deemed a waiver of these requirements. f. Claims made policies will not be accepted except for excess policies or unless otherwise provided by this Ordinance. Required Insurance Coverage: a. Commercial General Liability Insurance: (1) Coverage should be a minimum Combined Single Limit of One Million Dollars ($1,000,000) per occurrence for Bodily Injury and Property Damage. This coverage must include premises, operations, blowout or explosion, products, completed operations, blanket contractual liability, underground property damage, broad form property damage, independent contractors protective liability and personal injury. (2) Environmental Impairment (or Seepage and Pollution) shall be either included in the coverage or written as separate coverage. Such coverage shall not exclude damage to the lease site. If Environmental Impairment (or Seepage and Pollution) Coverage is written on a "claims made" basis, the policy must provide that any retroactive date applicable precedes the effective date of the issuance of the permit. Coverage shall apply to sudden and non - sudden pollution conditions resulting from the escape or release of smoke, vapors, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste material or other irritants, contaminants or pollutants. Coverage shall be a minimum combined single limit of One Million Dollars ($1,000,000.00), per occurrence. b. Automobile Liability Insurance: Minimum Combined Single Limit of Five Hundred Thousand Dollars ($500,000) per occurrence for Bodily Injury and Property Damage. Such coverage shall include owned, non -owned, and hired vehicles. C. Worker's Compensation Insurance: In addition to the minimum statutory requirements, coverage shall include Employer's Liability limits of at least 12 of 20 One Hundred Thousand Dollars ($100,000) for each accident, One Hundred Thousand Dollars ($100,000) for each employee, and a Five Hundred Thousand Dollars ($500,000) policy limit for occupational disease, and the insurer agrees to waive rights of subrogation against the Town, its officials, agents, employees, and volunteers for any work performed for the Town by the operator. As an alternative to worker's compensation the operator may provide the equivalent to employer's liability insurance meeting the requirements of this section. d. Excess (or Umbrella) Liability Insurance: Minimum limit of Ten Million Dollars ($10,000,000) covering in excess of the preceding insurance policies. e. Control of Well Insurance: (1) Minimum limit of Five Million Dollars ($5,000,000) per occurrence. (2) Policy shall cover the Cost of controlling a well that is out of control, Re -drilling or Restoration expenses, Seepage and Pollution Damage. Damage to Property in the Operator's Care, Custody, and Control with a sub -limit of Five Hundred Thousand Dollars ($500,000) may be added. I. Security 1. A security instrument that covers each well must be delivered to the Town before the issuance of the Oil and Gas Well Permit for the well. The instrument must provide that it cannot be cancelled without at least thirty (30) days prior written notice to the Town and, if the instrument is a performance bond, that the bond cannot be cancelled without at Ieast ten (10) days prior written notice for non- payment of premium. The instrument shall secure the obligations of the operator related to the well to: a. Repair damage, excluding ordinary wear and tear, if any, to public streets, including but not limited to bridges, caused by the operator or by the operator's employees, agents, contractors, subcontractors or representatives in the performance of any activity authorized by or contemplated by the Oil and Gas Well Permit; b. Comply with the insurance and security provisions set forth in this Ordinance. 13 of 20 C. Pay fines and penalties imposed upon the operator by the Town for any breach of the Oil and Gas Well Permit. d. The security instrument may be in the form of an irrevocable letter of credit or payment bond issued by a bank or surety approved by the Town. The instrument shall run to the Town for the benefit of the Town, shall become effective on or before the date the Oil and Gas Well Permit is issued, and shall remain in effect until the well is abandoned and the site restored. C. A certificate of deposit may be substituted for the letter of credit or payment bond. The certificate shall be issued by a bank in the Town of Trophy Club, Texas, shall be approved by the Town, shall be payable to the order of the Town to secure the obligations of the operator described above, and shall be pledged to the bank with evidence of delivery provided to the Town designee. Interest on the certificate shall be payable to the operator. f. The security instrument may be provided for individual wells or on a "blanket" basis for multiple wells. The amount of the security shall be a minimum of Fifty Thousand Dollars ($50,000) for any single well and a minimum of One Hundred Thousand Dollars ($100,000) for multiple wells on a "blanket" basis. g. In the event that the Town determines that the operator's insurance is insufficient, the security will terminate when the Oil and Gas Well Permit is transferred, with respect to the operator -transferor and if the operator - transferee provides replacement security that complies with this section, when the well is abandoned and the site restored, and when the Town Designee and/or Town Staff consents in writing to such termination. h. An appeal of the determination of the amount of security required under this Ordinance may be made to the Planning and Zoning Commission for recommendation to the Town Council for final determination of the amount of security. J. Periodic Reports 1. The operator shall notify the Planning & Zoning Coordinator of any changes to the following information immediately, within one (1) business day after the change occurs. a. The name, address, and phone number of the operator; b. The name, address, and twenty-four (24) hour phone number of the person(s) with supervisory authority over drilling or operations activities; 14 of 20 C. The name, address, and phone number of the person designated to receive notices from the Town, which person must be a resident of Texas that can be served in person or by registered or certified mail; and d. The operator's Emergency Action Response Plan including "drive -to - maps" from public rights-of-way to each SUP site. e. The operator shall provide a copy of any "incident reports" or written complaints submitted to the Railroad Commission or any other state or federal agency within thirty (30) days after the operator has notice of the existence of such reports or complaints. f. Beginning on December 31" after each well is completed, and continuing on each December 315` thereafter until the operator notifies the Town that the well has been abandoned and the site restored, the operator shall prepare a written report to the Town identifying any changes to the information that was included in the application for the applicable Oil and Gas Well permit that have not been previously reported to the Town. K. Notice of Activities I. Any person who intends to re -work a well using a drilling rig, to fracture stimulate a well after initial completion, or to conduct seismic exploration involving explosive charges shall give written notice to the Town at least ten (10) days before the activities begin. The notice shall identify where the activities will be conducted and shall describe the activities in reasonable detail, including but not limited to the duration of the activities and the time of day they will be conducted. The notice must also provide the address and twenty-four (24) hour phone number of the person conducting the activities. The person conducting the activities will post a sign on the property giving the public notice of the activities, including the name, address, and twenty-four (24) hour phone number of the person conducting the activities. If the Town determines that an inspection by the Town Designee and/or Town Staff is necessary, the operator will pay the Town's customary charge for the inspection. L. Abandonment of Wells and Pipelines 1. Abandonment of Wells: Upon abandonment of a well or well site, within sixty (60) days, the well shall be plugged in accordance with the Texas Railroad Commission standards, the site shall be cleaned and cleared of all equipment, holes or excavations filled, and the land graded and returned to its original condition including replanting of vegetation to match the surrounding area. All well casings shall be cut and removed to a depth of at least 10 feet (10') below the surface. 15 of 20 2. Abandonment of Pipelines: Upon abandonment of a pipeline, within (two months) sixty (60) days of abandonment, a pipeline must be purged and plugged in accordance with the rules and regulations of the State of Texas in effect at that time. M. Amended Oil and Gas Well Permits 1. An operator must submit an application to the Planning & Zoning Coordinator to amend an existing Oil and Gas Well Permit, to commence drilling from a new drill site that is not shown on (or incorporated by reference as part of) the existing permit, to relocate a drill site or operation site that is shown on (or incorporated by reference as part of) the existing permit, or to otherwise amend the existing permit. 2. Applications for amended Oil and Gas Well Permits shall be in writing, shall be on forms provided by the Town Designee, shall be signed by the operator, and shall include the following: a. The application fee as set by Town ordinance; b. A description of the proposed amendments; C. Any changes to the information submitted with the application for the existing Oil and Gas Well Permit (if such information has not previously been provided to the Town); d. Such additional information as is reasonably required by the Town Designee or Town Staff to demonstrate compliance with the applicable Development Site Plan and applicable Specific Use Permit; and C. Such additional information as is reasonably required by the Town Designee or Town Staff to prevent imminent destruction of property or injury to persons. 3. All applications for amended Oil and Gas Well Permits shall be filed with the Planning & Zoning Coordinator. The application shall be immediately forwarded to the Town Designee for review. Incomplete applications may be returned to the applicant, in which case the Town shall provide a written explanation of the deficiencies; however, the Town may retain a processing fee as determined by the Town Designee. The Town may return any application as incomplete if there is a dispute pending before the Railroad Commission regarding the determination of the operator. 4. If the activities proposed by the amendment are not materially different from the activities covered by the existing Oil and Gas Well Permit, and if the proposed ZD activities are in conformance with the applicable Development Site Plan and 16 of 20 applicable Specific Use Permit, then the Town Designee shall approve the amendment within ten (10) days after the application is filed. S. If the activities proposed by the amendment are materially different from the activities covered by the existing Oil and Gas Well Permit, and if the proposed activities are in conformance with the applicable Development Site PIan and applicable Specific Use Permit, then the Town Designee shall approve the amendment within thirty (30) days after the application is filed. If, however, the activities proposed by the amendment are materially different and, in the judgment of the Town Designee, might create a risk of imminent destruction of property or injury to persons that was not associated with the activities covered by the existing permit or that was not otherwise taken into consideration by the existing permit, the Town Designee may require the amendment to be processed as a new Oil and Gas Well Permit application. 6. The failure of the Town Designee to review and issue an amended Oil and Gas Well Permit within the time limits specified above shall not cause the application for the amended permit to be deemed approved. 7. The decision of the Town Designee to deny an amendment to an Oil and Gas Well Permit shall be provided to the operator in writing within ten (10) days after the decision, including an explanation of the basis for the decision. The operator may appeal any such denial to the Town Council. N. Transfer of OR and Gas Well Permits 1. An Oil and Gas Well Permit may be transferred by the operator with the consent of the Town if the transfer is in writing signed by both parties, and the transferee agrees to be bound by the terms and conditions of the transferred permit, if all information previously provided to the Town as part of the application for the transferred permit is updated to reflect any changes and if the transferee provides the insurance and security required by this Ordinance. The insurance and security provided by the transferor shall be released if a copy of the written transfer is provided to the Town. The transfer shall not relieve the transferor from any liability to the Town arising out of any activities conducted prior to the transfer. O. Remedies of the Town 1. If an operator (or its officers, employees, agents, contractors, subcontractors or representatives) fails to comply with any requirement of an Oil and Gas Well Permit (including any requirement incorporated by reference as part of the permit), the Town Designee and/or Town Staff shall give written notice to the operator specifying the nature of the alleged failure and giving the operator a reasonable time to cure, taking into consideration the nature and extent of the alleged failure, the extent of the efforts required to cure, and the potential impact on the health, safety, and welfare of the community. In no event, however, shall 17 of 20 the cure period be less than thirty (30) days unless the alleged failure presents a risk of imminent destruction of property or injury to persons or unless the alleged failure involves the operator's failure to provide periodic reports. The Fire Marshall may issue a Stop Work Order under the Fire Code, 2. If the operator does not cure the alleged failure within the time specified by the Town Designee and/or Town Staff, the Town Designee and/or Town Staff may notify the Railroad Commission and request that the Railroad Commission take appropriate action (with a copy of such notice provided to the operator), and the Town may pursue any other remedy available under this Ordinance. 3. If the operator does not cure the alleged failure within the time specified by the Town Designee and/or Town Staff, the Town Designee and/or Town Staff may recommend: a. The Town Council to suspend the Oil and Gas Well Permit until the alleged failure is cured; or, b. The Town Council to revoke the Oil and Gas Well Permit if the operator fails to initiate and diligently pursue a cure. 4. The decision of the Town Designee and/or Town Staff to recommend suspension or revocation of an Oil and Gas Well Permit shall be provided to the operator in writing at least ten (10) days before any action by the Town Council. 5. If an Oil and Gas Well Permit is revoked, the operator will be given a hearing in front of the Town Council. P. Enforcement, Right of Entry L The Town Designee and/or Town Staff is authorized and directed to enforce this Ordinance and the provisions of any Oil and Gas Well Permit. Whenever necessary to enforce any provision of this Ordinance or a Gas Well Permit, or whenever there is reasonable cause to believe there has been a violation of this Ordinance or an Oil and Gas Well Permit, the Town Designee, Town Staff or their designated representatives, may enter upon any property covered by this Ordinance or an Oil and Gas Well Permit at any reasonable time to inspect or perform any duty imposed by this Ordinance. If entry is refused, the Town shall have recourse to every remedy provided by law and equity to gain entry. Q. Penalty 1. It shall be unlawful and an offense for any person to do the following: a. Engage in any activity not permitted by the terms of an Oil and Gas Well Pern-it issued under this Ordinance; 18 of 20 b. Fail to comply with any conditions set forth in an Oil and Gas Well Permit issued under this Ordinance; or C. Violate any provision or requirement set forth under this Ordinance. 2. Any violation of this Ordinance shall be punished by a fine of not more than Two Thousand Dollars ($2,000.00) per day, subject to applicable State law. Each day a violation occurs constitutes a separate violation. SECTION 4. SAVINGS That all rights and remedies of the Town of Trophy Club are expressly saved as to any and all violations of the provisions of any Ordinances affecting oil and gas drilling and/or development which have accrued at the time of the effective date of this Ordinance; and, as to such accrued violations and all pending litigation, both civil and criminal, whether pending in court or not, under such Ordinances, same shall not be affected by this Ordinance but may be prosecuted until final disposition by the courts. SECTION S. CUMULATIVE REPEALER That this Ordinance shall be cumulative of all other Ordinances and shall not repeal any of the provisions of such Ordinances except for those instances where there are direct conflicts with the provisions of this Ordinance. Ordinances or parts thereof in force at the time this Ordinance shall take effect and that are inconsistent with this Ordinance are hereby repealed to the extent that they are inconsistent with this Ordinance. Provided however, that any complaint, action, claire or lawsuit which has been initiated or has arisen under or pursuant to such Ordinance on the date of adoption of this Ordinance shall continue to be governed by the provisions of that Ordinance and for that purpose the Ordinance shall remain in full force and effect. SECTION 6. SEVERABILITY If any section, article, paragraph, sentence, clause, phrase or word in this Ordinance or application thereof to any person or circumstance is held invalid or unconstitutional by a Court of competent jurisdiction, such holding shall not affect the validity of the remaining portions of this Ordinance, and the Town Council hereby declares it would have passed such remaining portions of this Ordinance despite such invalidity, which remaining portions shall remain in full force and effect. 19 of 20 SECTION 7. PUBLICATION The Town Secretary of the Town of Trophy CIub is hereby directed to publish, the Caption, Penalty and Effective Date of this Ordinance as required by Section 52.011 of the Texas Local Government Code. SECTION S. ENGROSSMENT AND ENROLLMENT The Town Secretary of the Town of Trophy Club is hereby directed to engross and enroll this Ordinance by copying the exact Caption, Penalty and Effective Date in the minutes of the Town Council and by filing this Ordinance in the ordinance records of the Town. SECTION 9. EFFECTIVE DATE That this Ordinance shall be in full force and effect from and after its date of passage, in accordance with law, and it is so ordained. PASSED AND APPROVED by the Town this 4'h day of August, 2003. / �r Effective Date: August 13, 2003 ATTEST: -1- Town Secretary Town of Trophy Club, T xas APPROVED TO AS FORM: 1 �C�LN V Town Attorney Town of Trophy Club, Texas 20 of 20 of the/Town of Tj.ophy Club, Texas of TronKy C-lub, Texas z 00 o