Some $415 million will be divided by other jurisdictions and agencies hit by the wildfires in 2017: Sonoma, Mendocino, Lake, Napa, Yuba and Nevada counties; the cities of Napa and Santa Rosa; and the town of Clearlake.
The communities' lawsuits sought to recover damages for loss of natural resources, loss of public parks, property destruction and fire suppression costs.
Paradise Mayor Jody Jones said the settlement funds -- which must be approved by the San Francisco court handling PG&E's bankruptcy case -- will be crucial in helping to rebuild the town and restore people's faith that the community has a future.
"It gives us a lot of resources that we did not have before that are going to help in so many ways with recovery and rebuilding," Jones said Tuesday. "And I think it’s going to help people’s confidence a lot because they know the town’s not going to go bankrupt."
The money will help physical reconstruction of facilities like streets, water systems and sewers. The town, which in the current fiscal year had a budget of about $12 million, also needs cash for more basic needs.
"In general, it will be used to make sure that we can pay our policemen and our firefighters and our other town employees, since we lost our entire tax base," Jones said.
The money could also help the town deal with a major hazard the fire left behind.
"We've got a lot of dead trees on private property that people don't have the resources to clear," Jones said. "So I'm hoping that it can maybe help us do that."
The mayor also pointed to one other benefit that comes from resolving the case now.
"We didn't have to go through multiple years of trial," she said. "Assuming that the bankruptcy court approves it, it saved a lot of time, it saved a lot of money in attorney's fees, and I think it's fair."
Jones and town attorney Dwight Moore said it could take 12 to 18 months for Paradise to see cash from the agreement.
The proposed settlement does not cover claims filed by individuals or businesses that were victims of the fires.
Steve Campora, a Sacramento attorney who is part of the consortium of lawyers representing the thousands of individual clients in the PG&E wildfire cases, said he believes the newly announced settlement is "actually good for the plaintiffs, the victims."
He said that's because attorneys for other groups of plaintiffs who are also negotiating settlements with PG&E have a sort of benchmark to work with.
"It will help knowing what the public entities are willing to take," Campora said. "This is one step along the way, and it's progress."
PG&E filed for bankruptcy protection in January. State fire investigators concluded in May that PG&E's transmission lines were to blame for the 2018 Camp Fire, the deadliest and most destructive in California history. The fire killed 85 people and burned nearly 14,000 homes.
The settlement is "an important first step toward an orderly, fair and expeditious resolution of wildfire claims," PG&E said in a statement after the settlement was announced. "We remain focused on supporting our customers and communities impacted by wildfires and helping them recover and rebuild."
