The Joliet City Council, which serves as the city’s liaison to the Rialto Square Theater, also has the theater’s insurance business.
Councilman Pat Mudron’s firm, Mudron Kane Insurance, sold a Cincinnati insurance policy to the Rialto in April at a premium of $247,000.
Mudron’s firm got the deal without a public call for proposals, although the chairman of the Rialto board said there was a “competition process” between Mudron Kane and the agent who previously handled the theater’s insurance.
“They both went out and spoke to a number of insurance companies,” said Rialto CEO Robert Fillotto.
Filotto said the Rialto is looking at a $446,000 premium for a competing policy without being fully covered and once faced the prospect of having no insurance at all. The Rialto had paid a $75,000 premium for commercial real estate, general liability, umbrella insurance and other coverages, Filotto said. He said the policy obtained through Mudron Kane offered the same coverage as the Rialto previously did.
“When we began hearing earlier this year that our coverage was unlikely to be renewed or would be renewed with a significant premium increase, I reached out to Pat and said, ‘Pat, can you help us?’ said Filotto.
Mudron has been the Council’s liaison to the Rialto since his first election to the Council in 2015.
He attends Rialto board meetings but does not vote. He advises the board and minutes of past meetings show that Mudron attended discussions about the insurance issue in January when Filotto told the board that his policy might not be renewed as the theater does not have a sprinkler system.
Although Mudron does not vote on the Rialto board, he does vote on the city budget, which includes an annual contribution to theater that has ranged from $375,000 to $475,000 in recent years. The city votes on the budget in December, and Mudron said there hasn’t been a vote involving the Rialto since April.
Mudron also provides the council with information on Rialto matters and acts as an intermediary with the city on matters affecting both entities.
“I did not inquire about this business. They asked me out,” Mudron said when asked about the policy. “I feel like I have no conflict.”
But Mudron said he has referred the Rialto matter to his son Shamus to deal with. Mudron and his son are two of the owners of Mudron Kane Insurance.
“I felt like I shouldn’t be so practical with it,” he said.
Mudron acknowledged that as a co-owner of Mudron Kane, he shares in the financial benefits even though he didn’t personally handle the Rialto deal.
He would have to withdraw from City Council votes involving the Rialto and disclose why, Mudron said.
While the insurance issue came to a head in January, prior to the COVID-19 pandemic, the Rialto knew it could eventually lose coverage because the theater doesn’t have a sprinkler system, Filotto said.
“COVID hit, and we went dark for 18 months, and it kind of became a non-issue,” Filotto said.
There is a chance Rialto policies will change again before current coverage is extended, Filotto said.
The theater sought professional services for improvements planned at the Rialto through a public application for qualification procedures, and one of the firms that responded had indicated it could help with insurance.
“We can cancel the (Cincinnati) policy and get another policy,” he said. “I have no idea if this will work.”