Trustee for 2017 North Bay Fire Victims Trust speaks out about funding shortfall and public criticism

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The trust’s new liaison with state lawmakers is Darby Kernan, who previously lobbied for the California State Association of Counties.

Like McCallum, Kernan worked on wildfire legislation following the catastrophic fires of 2017 and 2018. Trotter declined to say if the goal was still a $1.5 billion loan, but said that the trust had applied for financial assistance from the state.

Senate Majority Leader Mike McGuire, D-Healdsburg, and Sen. Bill Dodd, D-Napa, are the two lawmakers who have called for McCallum’s removal. This week, the two senators said they wanted to help the victims but had not taken a position on a loan.

Throughout its lifespan, the trust has been criticized by fire victims and officials for its high administrative expenses — it spent $93 million on those costs in 2021 and paid out $1.69 billion to victims. The largest expenses relate to administrative expense claims, but the trust also spent nearly $10 million on legal fees, nearly $5 million on financial professionals and $782,849 on consultants.

Trotter received $1.5 million in 2021. His salary was set by the court, he said, and justified by his experience and the scale of the task given to him.

In its first year, as the trust administrators worked to make the trust work, it spent $51 million on attorneys’ fees, claims administrators and financial professionals, while paying out only $7 million in claims, according to a May 2021 report from Bay Area NPR-affiliate KQED that sparked widespread outrage among victims, lawmakers and others.

Critics fail to understand the scope of the trust’s work, Trotter said. The attorney’s fees were used to defend the fund in two expensive lawsuits, he said. They also paid for a series of lawsuits filed by the trust against vegetation management companies and former PG&E directors, and damages from those lawsuits could strengthen the trust’s ability to compensate victims, Trotter said. .

“We’re talking billions and billions of dollars (to be distributed) and all the issues the trust is facing,” he said.

Operating costs are high, but trust is working as expected, said Amy Bach, executive director of a consumer group called United Policyholders. Bach sits on the trust’s oversight committee. Trust administrators “work really hard trying to get money for people in a deal that wasn’t great from the start,” she said.

“I’m not saying there couldn’t have been more frugal decisions,” she said, but large-scale bankruptcies in the United States are notorious for incurring large attorney fees.

“That’s how it goes,” she said, “even though I don’t like it.”

But many victims, and the politicians who represent them, are frustrated with the expense after years of financial loss from the fires. Last week, the Butte County Board of Supervisors sent a letter to Trotter asking for more information about the trust’s trajectory and expenses.

“This fund was intended to compensate the survivors of the fires for the losses they suffered, not to become high-paying work for massive legal teams,” the supervisors wrote.

Trotter responded with a voicemail to a county official where he dismissed the letter as an “offensive and misinformed political statement.” The voicemail was later published in a scathing editorial in the Chico Enterprise-Record.

“My team of 400 claims processors, assessors and experts work hard every day to bring some justice to those affected by the fires,” Trotter wrote in a response posted on the trust’s website. “My frustration is fueled by the fact that the information sought by this letter was and is readily available. All they had to do was ask.”

Abrams, the Tubbs Fire victim turned activist, asked — via a bankruptcy court filing that seeks more detailed accounting than the seven-line budget breakdown in the trust’s annual report.

He also seeks answers from the trust about how it selected McCallum as the trust’s lobbyist, and a court hearing where he and other victims can question Trotter about spending and hiring practices.

“My motion proposes a process for victims to ask and have their questions answered by the trust and to ensure that contracts and other activities performed on our behalf are shared for our review,” Abrams said.

You can reach editor Andrew Graham at 707-526-8667 or [email protected] On Twitter @AndrewGraham88.

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