STAFF REPORT
Meeting Date:
December 9, 2025
CONSENT
16 SUBJECT: REIMBURSEMENT TO ORANGE COUNTY FIRE AUTHORITY FOR RANCHO
FIRE COSTS AND APPROPRIATION OF FUNDS
RECOMMENDATION: It is recommended that the City Council:
1. Authorize the Finance Director to reimburse the Orange County Fire Authority $115,905.40 for costs incurred for the Rancho Fire incident that occurred in July 2025;
2. Appropriate $115,905.40 from the available fund balance in the City’s Disaster Contingency Fund (#140);
3. Confirm that this expenditure satisfies the requirements of City Council Resolution No. 23.045, including the requirement for four affirmative votes and the intent to replenish the fund balance within 36 months; and
4. Determine that this action is not subject to the California Environmental Quality Act pursuant to Section 15378 of the CEQA guidelines.
SUMMARY OF THE MATTER
This report recommends that the City Council authorize reimbursement to the Orange County Fire Authority (OCFA) in the amount of $115,905.40 for specialized services and equipment provided during the Rancho Fire, which occurred in Laguna Beach from July 7–9, 2025. Under the City's automatic mutual aid agreement with OCFA, the City is responsible for reimbursing the cost of specialized services, such as helicopters and retardant tankers, used in the incident.
The reimbursement will be funded from the City’s Disaster Contingency Fund (Fund 140), which currently has an available balance of $7,129,627. Pursuant to City Council Resolution No. 23.045, this appropriation requires four affirmative votes and a commitment to use best efforts to replenish the fund within 36 months.
DISCUSSION
The Rancho Fire Incident occurred in the City of Laguna Beach between July 7, 2025, and July 9, 2025.
This event activated the automatic mutual aid agreements the City has in place with the State of California (CalFire) and the OCFA. OCFA invoiced the City $115,905.40 for reimbursement for this event (Attachment 1). Staff is recommending City Council approval to reimburse OCFA and appropriate the funding from the Disaster Contingency Fund’s available fund balance.
The City entered into an automatic aid agreement with OCFA in 2014 (Attachment 2). Under the agreement, OCFA agreed to provide personnel and equipment at no cost such as: engines, trucks, battalion chiefs, and medic units. Specialized services and equipment such as: water tenders, helicopters, heavy rescue, heavy equipment, and Type VI Patrols, must be reimbursed to OCFA for these specialty services.
Specialized equipment was necessary in order to respond to the Rancho Fire, including four tankers that dropped retardant, which also required additional supervisory resources by OCFA and rotating helicopters
REIMBURSEMENT TO ORANGE COUNTY FIRE AUTHORITY FOR RANCHO FIRE COSTS
AND APPROPRIATION OF FUNDS
December 9, 2025
to continuously drop water over the area to extinguish the fire. These drastic measures allowed the City to respond to the Rancho Fire in such a way that resulted in no loss of life or structures. OCFA has requested reimbursement from the City in the amount of $115,905.40. These costs are primarily to reimburse OCFA for the specialized equipment (and related personnel resources) that were used during the extraordinary response to the Rancho Fire. incident. This requested reimbursement includes costs from other mutual aid agencies and thus, the City does not expect any other requested reimbursements from the other agencies that assisted in the City’s response to the Rancho Fire.
The City is continuing its efforts to seek restitution from the individual(s) responsible for the Rancho Fire, and that process is ongoing. That process includes the above OCFA invoice amount as well as other costs.
However, staff believes that due to the services provided by OCFA and other agencies, the requested reimbursement is appropriate at this time. Requiring OCFA to wait until the City’s restitution efforts are complete, may be seen as an undue hardship to an agency that was responsive and helpful during the Rancho Fire.
FINANCIAL ANALYSIS
An appropriation of $115,905.40 is requested from the City’s Disaster Contingency Fund as permitted by City Resolution No. 05.107 (Attachment 3). The current fund balance available in the Disaster Contingency Fund is $7,129,627. These funds may be reimbursed when the litigation matter pertaining to this incident is resolved.
Per City Council Resolution No. 23.045, any expenditure from the Disaster Contingency Fund requires four affirmative votes of the City Council. The same resolution also requires that the City use its best efforts to replenish the Disaster Contingency Fund to its preexisting balance within 36 months of the expenditure, subject to the annual budget process.
This reimbursement represents a non-recurring, emergency expenditure that aligns with the intended purpose of the Disaster Contingency Fund, specifically, emergency protection of public and private property and life during natural disasters. The Rancho Fire qualified as such an emergency.
The Finance Department will track this expenditure and include it in future budget planning efforts to ensure the replenishment of the fund, consistent with the Council’s fiscal policy should the City not receive restitution from the responsible party.
ENVIRONMENTAL ANALYSIS
This action is not subject to the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15378 because it does not qualify as a “project.” The recommended action involves the reimbursement of funds related to emergency response services and does not authorize any physical development or changes to the environment.
ATTACHMENTS
1. OCFA Invoice (Pgs. 4-9)
2. Automatic Aid Agreement with OCFA (Pgs. 10-22)
REIMBURSEMENT TO ORANGE COUNTY FIRE AUTHORITY FOR RANCHO FIRE COSTS
AND APPROPRIATION OF FUNDS
December 9, 2025
3. Resolution No. 23.045 (Pgs. 23-25)
Submitted By: Michelle Bannigan Approved: .David A Kiff Michelle Bannigan, Finance
Director Dave Kiff, City Manager
Report Prepared By: Coordinated With:
Michelle Bannigan, Finance Director Niko King, Fire Chief