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PG&E agrees to $70 million reparation settlement after San Bruno fire

By Stephanie Soderborg | 20 Mar 2012

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Memorials for those lost and injured during the fire still stand at the construction sites where the houses burnt down in San Bruno. (Photo: Stephanie Soderborg/ Peninsula Press)

The City of San Bruno’s strong stance in dealing with PG&E after the Sept. 9, 2010 natural gas pipeline explosion finally paid off last Monday, when the company agreed to pay a $70 million reparation settlement for civic damage.

The explosion’s resulting fire destroyed 38 homes, damaged another 70 and killed eight people. Fifty-eight individuals suffered serious injuries.

The reparations announcement came less than a month after San Bruno Mayor Jim Ruane announced the city’s dissatisfaction with the slow pace of negotiations over the amount of money PG&E would pay to help the city recover from the tragedy.

“It got to the point a few weeks ago where we were a little frustrated in what was happening and what was not happening,” Mayor Ruane said in a phone interview. “So we decided to go to the press.”

City Manager Connie Jackson elaborated saying, “We felt that our timeline for the discussions was more urgent than it appeared PG&E’s was, so we took a different approach in the way that we handled public communication regarding our relationship with PG&E — essentially encouraging them in a very public way to come back to the deliberative negotiations.”

From the beginning of the PG&E discussions, San Bruno city representatives said they knew they had to fight to ensure that the company addressed more than just the physical damage.

City council member Rico Medina compared the situation to “David and Goliath.” Ken Ibarra, another council member, said dealing with PG&E reminded him of Erin Bockovich, who played a major role in building a legal case against PG&E in 1993 for contaminating water in Hinkley, CA. The city decided it had to make sure it did not simply accept whatever company line P&E gave but rather ensure that the company did what was best for the citizens of San Bruno, Ibarra said.

“We have that in the back of our mind, that we have to stay a step ahead because they are so big,” Ibarra added.

Now with the $70 million in reparations, the city says it can begin to heal from the disaster.

“We committed the night of the tragedy and continue to commit that we will help the victims and the community heal and rebuild,” PG&E President Chris Johns said in a statement the morning of settlement. Monday’s announcement “is another step in that process,” he added.

City council members and other city employees credit Mayor Ruane, saying he was a strong leader in the PG&E negotiations

“PG&E was not giving us any kind of answers,” City Clerk Carol Bonner said. “Jim finally came forward and said, ‘You need to do something.’”

This money is separate from what PG&E will pay to rebuild city infrastructure that was destroyed or damaged in the fire and other direct costs for restoring the neighborhood — approximately another $50 million. PG&E will also have to pay fines for negligence and perhaps even more resulting from lawsuits some residents filed. .

Negotiating reparations with PG&E, however, was not the only way the city supported the citizens of San Bruno after the fire.

Beginning immediately after the incident, San Bruno organized a number of town hall meetings so citizens could keep abreast of relevant information related to the disaster.

“Each meeting was very informative, kept us up to date,” Nellie Bishop said. The Bishops’ house backed up onto the canyon where the blast took place. The fire destroyed the surrounding houses, and while her house was sparred, it suffered  significant damage. “We’ve been very well taken care of,” she added.

The city has also helped fund mental-health counseling services, a serious need for the community after the fires. The disaster’s psychological effects have been lasting, and many residents are still seeking help.

“This is a generational issue for us,” Ruane explained. “One dad told me his son gets a little excited when he lights the barbeque. We have some kids, where three out of four are sleeping at night and one is still having trouble.”

The city has also helped residents deal with insurance companies and provided guidance on any tax issues related to receiving damage payouts from PG&E.

Over the past 18 months, the Glenview neighborhood where the fire occurred is slowly beginning to recover. Construction projects occupy the blocks surrounding the epicenter of the explosion as houses that burned down are rebuilt.

“All this hammering and stuff, it is a good thing,” said Bill Bishop, Nellie Bishop’s husband. “We couldn’t wait to hear the hammers going,” his wife added. “Because then we knew they were coming back.”

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