Council flags insurance, indemnity and dust-mitigation issues in Granite Construction agreement

City staff and councilors discussed contractual and insurance concerns tied to the purchase-and-sale agreement (PSA) with Granite Construction during the May 28 Willard City Council meeting.

A staff member told the council that the city's insurance trust raised concerns about "primary noncontributory" language in the PSA and related agreements. Staff said the endorsement could require the city's insurance to respond first and could limit the city's trust from pursuing recovery against the contractor, even when another party is at fault. Staff noted that indemnity clauses are interlinked among several agreements and that the trust requested copies of specific endorsements and policy language so the city's insurer could complete its review and provide coverage endorsements naming Granite Construction as an additional insured.

Council members sought clarity on whether the primary/noncontributory endorsement applies only to the city's limited due-diligence access or would extend through the life of the agreements. Staff said they would review the PSA sections that allocate indemnity, forward those sections to the trust, and arrange a follow-up discussion with the trust and Granite counsel; staff reported Jeremy had already requested a meeting to discuss the insurer's questions.

Separately, the council discussed dust from the pit operation. Staff said the draft agreement includes mitigation measures and substantially higher restoration bonding than the county's prior bond; a council member cited an informal figure for potential restoration bonding of about $1,000,000. Staff also described plans for quarterly meetings with the pit operator to address dust and other operational concerns and said the operator had committed to address identified mitigation items as they arise.

No formal council action was taken on the PSA at the May 28 meeting; staff will pursue the requested insurance endorsements and meet with the trust and Granite representatives to negotiate clearer contractual language and assurances on mitigation and bonding.