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: 9 Section Name: CONSENT CALENDAR Account Number: 10-1711 File ID: 26-11284 TO: City Council
FROM: Prasanna W. Rasiah, City Attorney
PREPARED BY: City Attorney's Office
MEETING DATE: June 15, 2026
SUBJECT:
Fiscal Year 2026-27 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 ensure 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 2026-27.
BACKGROUND:
For the past six 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 ensure 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.
The property insurance market has improved such that the premium for property insurance will likely be reduced by an estimated 19.1 percent. However, the premium for excess liability coverage will likely increase by an estimated 40.1 percent to 54.4 percent, primarily due to the challenging insurance market.
City of San Mateo 2026-2027 Insurance Budget Estimates
Coverage Expiring
Premium
Renewal
Premium
2026-2027
Budget Low
Estimate
2026-2027
Budget High
Estimate
% Change Low
Estimate
% Change High
Estimate
Library DIC $82,227 $110,678 $84,694 $90,450 3.0% 10.0% Excess Liability $2,206,808 $3,408,000
$3,092,000 $3,408,000 40.1% 54.4%
Property, Boiler &
Machinery,
$1,506,581 $1,264,711 $1,264,711
$1,506,581 -19.1% 0.0%
CITY OF SAN MATEO
Environmental &
Cyber
Crime Insurance $10,629 $11,214 $10,629 $11,160 0.0% 5.0% Property (Bridges) $174,261 $188,463 $179,489 $188,463 3.0% 8.2% SAM $19,501 $21,451 $20,476 $21,451 5.0% 10.0%
San Mateo-Foster
City Public
Financing
Authority
(Liability)
$25,354 $29,157 $26,622 $29,157 5.0% 15.0%
Total: $4,025,361 $5,033,674 $4,769,832 $5,255,263 18.5% 30.6% In February 2026, the City Attorney’s Office received the fiscal year 2026-27 Insurance Budget Estimates and PRISM Premium Estimates, followed by updated estimates in June 2026. 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.
The premium for the APIP property renewal is $1,264,711 (the same as the budget low estimate), the crime insurance premium is $11,214 (marginally more than the budget low estimate) and this year's premium for the Library's DIC insurance coverage was renewed in March 2026 for $110,678. Additionally, the significant increase in the Excess Liability premium is at least partly attributable to the 12.8% increase in payroll. The Property, Boiler & Machinery, Environmental & Cyber premium also now includes the new Waste Water Treatment Plant (WWTP).
The renewal premium estimates currently total $5,033,674, which is below the budget high estimated total of $5,255,263.
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 2026-27 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 2026 for $82,227 as noted above. The budget high estimate for this coverage is $90,450, which will be renewed in March 2027.
BUDGET IMPACT:
The City paid approximately $4,025,361 for general liability and property insurance (including bridges, cyber, and crime) for fiscal year 2025-26. The renewal premiums for 2026-27, including Library DIC, is estimated to be $5,033,674. The proposed fiscal year 2026-27 budget assumed $5 million for insurance premiums. While no modifications to appropriations are likely to be required, staff will return to the Council for a supplemental appropriation if necessary.
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.)
CITY OF SAN MATEO
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
None
STAFF CONTACT
Prasanna W. Rasiah, City Attorney
[email protected]
(650) 522-7020