County of Sonoma, City of Santa Rosa Part of $415 Million Settlement to Resolve North Bay Local Governments 2017 Fire Claims

Today, the City of Santa Rosa and the County of Sonoma, together with seven other counties and cities, announced that they and PG&E have accepted a mediator’s proposal of $415 million to resolve the collective cities’ and counties’ North Bay Fires claims. The mediator’s proposal is exclusive of and does not affect the claims of any residents, individuals, or businesses. The collective amount of $415 million will be allocated among each of the nine public entities in an allocation process yet to take place.

The payment is to be incorporated into a proposed plan of reorganization to be filed by PG&E in its pending Chapter 11 case. The entire plan of reorganization is subject to confirmation by the Bankruptcy Court. The settlement announced today with respect to the North Bay Fires is part of a total settlement of $1 billion proposed to be paid to local government entities in connection with recent wildfires.

Mediator Judge Jay Gandhi (Ret.) presided over several days of in-person mediation sessions held in San Francisco, California. Participants in the various phases of the mediation included 14 public entities with various claims from the 2015 Butte Fire, the 2017 North Bay Fires, and the 2018 Camp Fire. Judge Gandhi’s global proposal included a total payment of $1 billion to be made pursuant to PG&E’s proposed plan of reorganization. PG&E and all 14 public entities accepted the proposals. The proposal is intended to compensate public entities for damages not covered by insurance or governmental assistance programs.

"Our commitment since day one of this legal matter has been to protect the interests of our residents and taxpayers.” said City of Santa Rosa Mayor Tom Schwedhelm. “This agreement, if approved, will not only help to support Santa Rosa’s recovery, but also to aid in our ability to invest in resiliency measures that may better protect our community from future disasters.”

“This agreement, which must receive Bankruptcy Court approval, allows us to recover financial losses and repair fire damages to roads, infrastructure, and watersheds while protecting taxpayers,” said Sonoma County Board of Supervisors Chair David Rabbitt.

In January of 2019, PG&E filed for bankruptcy. A bankruptcy judge will decide how PG&E’s obligations and liabilities, including wildfire claims, will be resolved through a reorganization plan. There is no guarantee of funding until the bankruptcy proceedings are complete, which is not anticipated until mid-2020.

  For more information, please contact Baron & Budd Attorney John Fiske at (619) 261-4090, or Fiske@BaronBudd.com, who is representing the public entities in the litigation.

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