title
Settlement of Insurance Claims for MGP Clean-Up USF&G and St. Paul (NB)
explanation
Through the good work of outside insurance counsel (Eisenstein Malanchuk, LLP) utility staff located a number of insurance policies which provided coverage to Gainesville Gas Company which we believe may be used as the basis to recover environmental clean-up costs associated with the manufactured gas plant (MGP) site. Discussions toward resolution of the City's claims against USF&G and St. Paul have been conducted by the Utilities Attorney and insurance counsel over the last 6 months, culminating in an agreement in principle for settlement. Pursuant to the agreement the City is expected to receive net recovery of approximately $300,000 after payment of legal fees and expenses, in exchange for a complete release of USF&G and St. Paul from further claims. The General Manager, City Attorney, Utilities Attorney and outside counsel all concur as to the appropriateness of the settlement.
recommendation
The City Commission authorize the General Manager to execute such documents as are approved by the City Attorney as to form and legality to implement the settlement of any and all claims the City may have against United States Fidelity and Guaranty Company (USF&G) and St. Paul Marine Insurance Company (St. Paul) arising out of the former manufactured gas plant.
fiscal impact
Net funds from the settlement will be applied to MGP site clean-up expenses.
drafter
Prepared by: Raymond O. Manasco, Utilities Attorney
Submitted by: Michael L. Kurtz, General Manager