200 S. Anaheim Blvd.
Suite #733
Anaheim, CA 92805
Tel: (714) 765-5094
Fax: (714) 765-5164
www.anaheim.net
CITY COUNCIL AGENDA REPORT
City of Anaheim
CITY MANAGER’S OFFICE
DATE: AUGUST 9, 2022
FROM: CITY MANAGER’S OFFICE
SUBJECT: RATIFY DECISION TO BE THE DIRECT RECIPIENT OF
OPIOID SETTLEMENT FUNDS
ATTACHMENT (Y/N): NO ITEM # 05
RECOMMENDATION:
That the City Council, by Motion, ratify and authorize direct receipt of settlement funds, in the anticipated approximate amount of $12 million over 18 years, with the first year partial amount anticipated at $300,000, to be used for approved opioid abatement purposes.
DISCUSSION:
In 2019, the City Council authorized participation with other public entities in litigation against the manufacturers and distributers of prescription opiates that have contributed to the current opioid epidemic. The case was initiated in California, and later consolidated with national litigation pending before a federal judge in the Northern District of Ohio.
Multiple California public entity plaintiffs, including the City, are represented in the lawsuits by Robins Kaplan LLP.
Late last year, the State of California and the California public entities’ counsel reached an agreement to resolve all opioid related claims against three large opioid distributors (McKesson Corporation, Cardinal Health, Inc., and AmerisourceBergen Corporation)(the “Distributor Settlement”) and opioid manufacturer Janssen Pharmaceuticals (the “Janssen Settlement”).
The Council approved the City’s participation in those settlements in December, 2021.
The total settlement amount is allocated among a large number of public entities. Funds received from settlements can only be used for approved abatement uses, such as opioid abuse treatment services, services for opioid addicted pregnant people, opioid treatment for incarcerated people, etc.
Pursuant to its participation in the settlements, Anaheim can elect whether to receive its allocated funds directly, or have the funds directed to the county for use on opioid abatement activities. Direct receipt of the funds allows the City to decide how to spend the money on approved abatement expenses (for which there are detailed descriptive lists in the settlement documentation), but obligates the City to undertake the related expenditure and reporting requirements.
Opioid Settlement Funds
August 9, 2022
We recently received notice from our outside counsel that the decision regarding direct receipt of funds in the Distributor Settlement needed to be made by August 5, and we anticipate that the same decision for the Janssen Settlement may arise soon on similar short notice. We are seeking Council authorization for ratification of the City Manager’s decision to elect direct receipt of funds from the Distributor Settlement (given the unexpected deadline of August 5, 2022), and authorization to elect direct receipt of the funds from the Janssen Settlement, a decision which we anticipate will need to be made on short notice in the near future. The City’s anticipated share of the Distributor Settlement in year one is approximately $300,000, and we will be working on a program to allocate the funding to one or more programs that qualifies under the settlement terms.
IMPACT ON BUDGET:
Eligible program costs in the Housing & Community Development and/or Police Departments will be funded by the settlement revenues. It is expected that the departments will have sufficient appropriation to absorb applicable expenses.
Respectfully submitted, Concurred by,
Jim Vanderpool Robert Fabela
City Manager City Attorney