They appear to be a Dimmsdale based military group that centres around protecting Dimmsdale from Sea Monsters. The squadron consists of several tanks, fighter jets, ships and at least one large blimp. They constantly have to convince people that they are not a waste of money.
Background
Several people who work for the team on Dimmsdale Beach are present. They do not help Timmy Turner when he asks for help stopping Francis from bullying people on the beach, because they say that they only safeguard the beach from sea monsters, and that they are not a waste of money. Later on, when Timmy becomes a huge muscle-bound monster as a result of a wish, he gets covered in seaweed and the response team members mistake him for a real sea monster. They radio for back up, and a huge military force with blimps, helicopters, and tanks lands on the beach and starts wreaking havoc. Timmy destroys a lot of them while trying to reclaim Cosmo and Wanda's wands.
The incorrect spelling on the Response Team's flag.
After he is returned to normal, the response team confronts Timmy who is now a wimpy little boy again, and he calls them a waste of money. They disappointingly walk away, but get their chance to chase a sea monster again when Timmy points them in the direction of a seaweed-covered Francis.
Trivia
The blimp the commander flies is shown to literally run off burning money.
The flag the life guard shows Timmy is incorrectly spelled "Dimmsdale Sea Monster Repsonse Team".
