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: 7 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 16, 2025
SUBJECT:
Fiscal Year 2025-26 General Liability and Property Insurance — Purchase Authorization RECOMMENDATION:
Authorize a staff committee comprised of the City Manager, the Finance Director, and the City Attorney to select the most cost-effective program to insure the City's general liability, property risks, and Library; and authorize the City Attorney to execute all required documents to purchase the selected insurance for fiscal year 2025-26.
BACKGROUND:
For the past five years, the City Council has authorized a staff committee comprised of the City Manager, the Finance Director, and the City Attorney to select the most cost-effective program to insure the City’s general liability and property risks and authorized the City Attorney to execute all required documents to purchase the selected insurance. The request for Council to authorize a committee in fiscal year 2020-21 was to allow the City to enroll in an organization called Public Risk Innovations, Solutions, and Management (PRISM), formerly known as the California State Association of Counties (CSAC) Excess Insurance Authority. PRISM is a joint powers authority comprised of dozens of government agencies that provides coverage up to $25 million above a $1 million Self-Insured Retention (SIR) per occurrence, and a $1 million Individual Member Corridor Deductible (IMCD) that erodes over the course of the fiscal year in exchange for a premium discount for the excess liability insurance policy.
This remains a challenging insurance market. On the one hand, the property insurance market has improved such that its premium for property insurance will change this year by an estimated -0.4 percent to 4.8 percent, versus the 11.94 percent increase that occurred in 2024. However, the premium increase for excess liability coverage is estimated at 35.8 percent to 46.1 percent, primarily due to the state of the insurance market. As always, the fluid circumstances of property coverage and cyber excess renewal are currently under review by the staff committee.
City of San Mateo 2025-2026 Insurance Budget Estimates
Coverage Expiring
Premium
Renewal
Premium
2025-2026
Budget
Low
Estimate
2025-2026
Budget High
Estimate
% Change
Low
Estimate
% Change
High
Estimate
Library DIC $84,030 $84,030 $89,996 $98,567 7.1% 17.3% Excess Liability $1,696,283 $2,391,000 $2,303,000 $2,479,000 35.8% 46.1% Property, Boiler &
Machinery,
Environmental &
Cyber (APIP)
$1,147,186 $1,099,777 $1,142,139 $1,202,251 -0.4% 4.8%
Crime Insurance $10,003 $10,629 $10,503 $11,003 5.0% 10.0%
CITY OF SAN MATEO
CITY OF SAN MATEO
Property
(Bridges)
$151,530 $177,745 $177,745 $177,745 17.3% 17.3%
SAM $19,501 $20,964 $20,476 $21,451 5.0% 10.0%
San Mateo-Foster
City Public
Financing
Authority
(Liability)
$23,578 $25,935 $24,756 $27,114 5.0% 15.0%
Total: $3,132,111 $3,810,080 $3,768,615 $4,017,131 20.3% 28.3% In February 2025, the City Attorney’s Office received the fiscal year 2025-26 Insurance Budget Estimates and PRISM Premium Estimates, followed by updated estimates in May 2025. Generally, the estimates are provided as a range rather than an exact number. For the purposes of this staff report, the renewal premiums listed above represent an average of the low and high budget estimates. Except however, the premium for the APIP property renewal is $1,099,777 ($72,428 less than the estimate), the crime insurance premium is $10,629 (marginally less than the estimate) and this year's premium for the Library's DIC insurance coverage was renewed in March 2025 for $84,030. The renewal premium estimates currently total $3,810,080, which is below the budget high estimated total of $4,017,131. Regardless, the staff committee is given broad authority to obtain insurance coverage even if the estimate is somewhat more than the budget high estimate.
The staff committee is recommending that Council authorize the committee to select the most cost-effective solution continuing into fiscal year 2025-26 as circumstances remain challenging and unusual. The City Attorney would then execute all of the documents necessary to obtain that insurance. Included in this evaluation would be liability insurance and property insurance (including insuring the City’s critical bridges), and excess cyber liability, if deemed necessary.
In addition, the Main Library's Difference in Conditions (DIC) including Flood and Earth Movement/Building Ordinance/ICC/Demo coverage is renewed annually in March. This year's premium for the Library's DIC insurance coverage was renewed in March 2025 for $84,030 as noted above. The budget high estimate for this coverage is $98,567, which will be renewed in March 2026.
BUDGET IMPACT:
The City paid approximately $3.11 million for general liability and property insurance (including bridges, cyber, and crime) for fiscal year 2024-25. The renewal premium for 2025-26, including Library DIC is estimated to be $3,810,080. The proposed fiscal year 2025-26 budget assumed $4.1 million for insurance premiums, therefore no modifications to appropriations are required.
ENVIRONMENTAL DETERMINATION:
This item is not a project subject to CEQA, because it can be seen with certainty that it will not cause a physical change in the environment. (Public Resources Code Section 21065.)
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
None
STAFF CONTACT
Prasanna W. Rasiah, City Attorney
[email protected]
(650) 522-7020