(1) No garage, other than a garage operated by the City or by any public agency shall be designated as an official towing station unless the owner, lessee or operator has entered security with the Department in the amount of ten thousand (10,000) dollars in form approved by the Law Department, for the faithful performance and discharge of its duties as an Official Towing Station, as bailee of impounded vehicles, and to indemnify owners of vehicles against loss, injury or damage to such vehicles while in the custody of the Official Towing Station.