CITY OF SAN MATEO
CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 17 Section Name: {{section.name}} Account Number: 10-1711 File ID: {{item.tracking_number}} TO: City Council
FROM: Prasanna W. Rasiah, City Attorney
PREPARED BY: City Attorney's Office
MEETING DATE: June 17, 2024
SUBJECT:
Partial Excess General Liability Insurance Settlement Offer for Covid-19 Business Interruption for Parks and Recreation - Authorization
RECOMMENDATION:
Authorize the City Attorney to take all necessary steps and execute appropriate documents to accept a partial excess general liability settlement offer from the City’s excess general liability insurance carrier, McLarens, for fiscal year 2019- 2020, in the amount of $54,878, for loss of revenue and other expenses related to COVID-19 for the Parks and Recreation department. In addition, authorize the City Attorney to execute all required general liability insurance documents to recover the loss for all future settlement offers related to this claim.
BACKGROUND:
On March 16, 2020, the City Council adopted Resolution No. 25 (2020) and proclaimed the existence of a local emergency to protect the safety of persons and property due to the threat caused by the spread of Covid-19. A shelter-in-place was declared and the Parks and Recreation facilities were closed and activities were cancelled. As a result, the Parks and Recreation department experienced a loss of revenue, from March 13, 2020, to May 3, 2020, in the amount of $827,540.35.
Total Revenue Loss March 13th through to May 3rd.
Recreation Registration Cancellations $ 424,353.46
Facility Reservations King $ 51,833.75
Facility Reservations Seniors $ 5,403.75
Facility Reservations Beresford $ 10,669.50
Facility Reservations Fields $ 4,062.00
Golf - Rounds $ 307,751.82
Golf - Pro Shop $ 3,466.08
Golf - Restaurant Lease $ 20,000.00
$ 827,540.35
In August 2020, the City Attorney coordinated with the City’s insurance broker, Alliant, to notify and file a claim with the City’s excess general liability insurance carrier, McLarens. The claim was filed on behalf of the City’s Parks and Recreation department which experienced a loss in revenue. The claim was classified as a ”Business Interruption“ as a result of the loss of revenue that occurred between March 13 - May 3, 2020, for the shut-down and cancellation of Parks and
CITY OF SAN MATEO
Recreations facilities and activities.
McLarens, one of the City’s excess general liability insurance carriers for fiscal year 2019-2020 sent a letter to the City Attorney in May 2024 informing them of a partial excess general liability insurance settlement available due to the business interruption that occurred in 2020. The partial settlement is for the amount of $54,878. McLarens and their underwriters agreed that the claim qualifies for a pro-rata share of the $10.0 million sublimit. McLarens reported that there were roughly 100 claims that qualified for consideration with perhaps 10 additional claims still outstanding. The City’s insurance underwriters for the claim year 2019-2020 have agreed to issue a partial payment in the amount of $54,878 to the City. McLarens requests that a Partial Master Proof of Loss be signed by an authorized representative of the City of San Mateo and returned for handling.
Until all claims close, McLarens will not be in a position to undertake a final accounting. There is a possibility that further settlement funds may be available in the future as a result of this claim.
Staff is recommending that Council authorize the City Attorney to execute the Partial Master Proof of Loss and return to McLarens so that the City may receive $54,878 for this partial settlement offer. In addition, staff is recommending that Council authorize the City Attorney to execute any future general liability insurance settlement documentation related to the business interruption claim for the fiscal year 2019-2020 and loss of revenue for the Parks and Recreation department.
BUDGET IMPACT:
Budget impact would be positive for the Parks and Recreation department as the partial settlement of $54,878 would be deposited into a Parks and Recreation fund available for future revenue count.
ENVIRONMENTAL DETERMINATION:
This approval is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
None
STAFF CONTACT
Prasanna W. Rasiah, City Attorney
[email protected]
(650) 522-7020