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Council hears staff concerns about insurance and indemnity language in PSA with Granite Construction
Summary
Staff said the city insurer flagged 'primary noncontributory' language in the PSA and related documents with Granite Construction as potentially exposing the city's insurer to first-responder obligations; staff will confer with the trust, the insurer and Granite's counsel to clarify whether the endorsement would be limited to due diligence.
Council received an extended briefing from staff about a draft purchase and sale agreement and related contracts with Granite Construction. Staff reported the city's insurer raised concerns that primary noncontributory endorsements and some indemnity provisions could require the city's insurance to respond first and potentially limit the trust's recovery options against contractors.
Staff said they had asked Granite's counsel to identify contract sections that reasonably allocate responsibility and that the city would follow up with the insurer and the trust to seek more balanced contractual language. Councilors emphasized the need to preserve the city's ability to recover damages caused by Granite's operations and noted several interlinked agreements that require careful review. Staff also said some mitigation provisions (for dust and slope restoration) are included in the draft and that quarterly oversight meetings with the pit operator were anticipated after contracts are finalized.
