On Tuesday the Half Moon Bay City Council formally approved a $3,150,000 settlement to conclude its arbitration claim against Insurance Company of the West (ICW). The latest recovery is in addition to the $10,000,000 arbitration award against ICW that the City obtained in September 2012 for liability coverage, and brings the total amount recovered from insurance carriers related to Beachwood litigation to $18,150,000.
Representatives from the City and ICW negotiated terms of a tentative settlement at a mediation conference on January 28, 2013. A settlement agreement was formally ratified by the City Council at its March 5th meeting.
“The City Council’s decision to pursue and ultimately win additional damages from ICW is continued evidence of Half Moon Bay’s positive trajectory,” stated Mayor Rick Kowalczyk in a prepared press release. “With the latest agreement, the City has recovered a total of $18,150,000 from its insurance carriers over the Beachwood litigation. These funds will never fully reimburse the City for bond-related costs and legal expenses, but they will have a major impact on our ability to close the book on the Beachwood episode by substantially reducing the related debt burden.”
Over the past few months, third party legal and bond experts analyzed options to determine the most financially beneficial way for the City to utilize the initial $10 million award. With the additional multi-million dollar settlement, the City will complete an even more comprehensive debt reduction analysis, in time for the upcoming budget cycle.
Performing a thorough analysis will provide the City with vital data to inform decisions that will optimize use of the funds. The community is invited to participate in the process of reviewing the options to pay down the City’s bond debts during a public meeting on March 13 at 6:00 PM at 537 Kelly Avenue.
While the additional funds will significantly affect how the City pays down its bond obligations, the bond agreements and applicable regulations will limit the range of available options. The debt reduction analysis that will be presented will clearly detail the various options available to the City.
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