HomeMy WebLinkAbout02 PARTIAL NAVY REIMBURSEMENT PAYMENT
Agenda Item_______
Reviewed:
City Manager _______
AGENDA REPORT
Finance Director _______
MEETING DATE:JANUARY 9, 2024
TO: NICOLE BERNARD, ACTING CITY MANAGER
FROM:JENNIFER KING, FINANCE DIRECTOR/CITY TREASURER
SUBJECT: REQUEST TO INCREASE REVENUE BUDGET AND APPROPRIATIONFOR
PARTIAL NAVY REIMBURSEMENT PAYMENT RELATED TO THE NAVY
NORTH HANGAR FIRE INCIDENT
SUMMARY
The City has received $11 million in reimbursement under a Cooperative Agreement with
the U.S. Department of the Navy (Navy). Staffis requesting the City Council’sapproval
to increase revenue budget and related appropriation by the Navy’s reimbursement
amount while staff continues to explore all available reimbursement funding opportunities
at local, state, and federal levels.
RECOMMENDATION
It is recommended that the City Council increase revenue budget and related appropriation
by $11 million, the amount of the reimbursementreceived from the Navy.
FISCAL IMPACT
The $11 million appropriation will be funded from the Navy’s partial reimbursement.
BACKG
ROUND
On November 7, 2023, a fire broke out at the Navy’s North Hangar at the former Marine
Corps Air Station, Tustin. The fire caused asbestos-containing debris and other matter
from the Navy North Hangar to be released and to spread into surrounding private and
public properties. The debris impact zone covers approximately 6.5 square miles around
the Navy North Hangar.
Some of the impacts of the Navy North Hangar fire include:
City Council Agenda Report
January 9, 2024
Supplemental Appropriation – Navy North Hangar Fire Incident
Page 2
• Over 1,500 homes and 14,000 people have been impacted. The assessment and
debris collection effort continues and will take weeks, if not months, to complete
on a house-by-house basis.
• 29 Tustin Unified School District schools were closed for weeks. Each needed to
be individually assessed, tested, cleaned and analyzed, but all have reopened.
• 12 City and private parks were closed. Each needed to be individually assessed,
tested, cleaned and analyzed, but all have reopened.
• Several public roads were closed for weeks, and railroad lines were impacted
with debris, but all have been cleared.
• A Tustin Police substation was closed but has reopened.
• A South Orange County Community College District campus was closed but has
reopened.
Since the start of the Navy North Hangar fire, City staff, the Orange County Fire Authority,
and multiple emergency service providers retained to assist the City in handling and
managing this unprecedented emergency have worked closely with Federal, State and
local health and environmental agencies to take all necessary and appropriate emergency
measures to protect public health and safety.
DISCUSSION
Navy North HangarFinancialImpacts
To date, the City has incurred over $54 million in contracted costs for this incidentcomprised
of debris clearance, air monitoring, hangar door deconstruction, consulting and project
management, supplies and equipment, and City/agency costs. Staff expects the total
response cost to continue to escalate. However, the true fiscal impact on the City, County,
and region remains unknown at this time and will continue to be assessed.
Reimbursement and Recovery Funding Sources
During the City Council’s November 10, 2023 meeting, the City Council approved a
Cooperative Agreement with the Navy pursuant to which the Navy authorized the City to
take all appropriate emergency measures necessary to protect against the imminent and
substantial endangerment to human health or the environment related to the Navy North
Hangar fire. To date, the City has received $11 million from the Navy.
City Council Agenda Report
January 9, 2024
Supplemental Appropriation – Navy North Hangar Fire Incident
Page 3
The City, along with the County of Orange, continue to request a Governor’s Proclamation
of a State of Emergency, a Governor’s recommendation to the President for a Presidential
Declaration, approval of California Disaster Assistance Act (CDAA) funding, and access to
other appropriate federal disaster relief programs in response to the catastrophic Navy North
Hangar fire.
Supplemental Appropriation
As the City has now received $11 million from the Navy, it is recommended that the City
Council increase the revenue budget and related appropriation by $11 million. Future
reimbursements will require a similar action by the City Council.
_____________________________
Jennifer King
Finance Director/City Treasurer