201 S. Anaheim Blvd.
Tenth Floor
Anaheim, CA 92805
Tel: (714) 765-4300
Fax: (714) 765-4360
www.anaheim.net
CITY COUNCIL AGENDA REPORT
City of Anaheim
HOUSING & COMMUNITY DEVELOPMENT
DEPARTMENT
DATE: NOVEMBER 18, 2025
FROM: HOUSING AND COMMUNITY DEVELOPMENT DEPARTMENT
SUBJECT: APPROVE THE FIRST AMENDMENT TO THE OPIOID
SETTLEMENT FUNDING PROFESSIONAL SERVICES
AGREEMENTS TO INCREASE CONTRACT AMOUNTS WITH
ACTION ALLIANCE FOUNDATION, KTMV INVESTMENTS, LLC,
AND THE COMMON HOUSE, INC.
ATTACHMENT (Y/N): YES ITEM # 09
GOVERNMENT CODE § 84308 APPLIES: YES
RECOMMENDATION:
That the City Council, by Motion:
1. Approve the First Amendment to three Professional Services Agreements (Opioid Settlement Funding Agreement), substantially in the form attached, for temporary recovery housing services on a pay-per-stay basis, by and between the City of Anaheim and:
Action Alliance Foundation, increasing the annual compensation from $100,000 to $360,000, for a one year term with the option to renew for two additional one-year terms, for a maximum compensation amount of $1,080,000;
KTMV Investments, LLC, increasing the annual compensation amount from $50,000 to $278,280, for a one year term with the option to renew for two additional one-year terms, for a maximum compensation amount of $834,840;
The Common House, Inc., increasing the annual compensation amount from $150,000 to $255,564, for a one year term with the option to renew for two additional one-year terms, for a maximum compensation amount of $766,692;
2. Authorize the City Manager, or designee, to execute the amendments and all related documents necessary to administer and implement the agreements, provided that the maximum compensation amounts do not increase, and authorize de minimis changes that do not substantially change the terms and conditions, as determined by the City Attorney’s Office.
Approve the First Amendment to the Opioid Settlement Funding Agreements November 18, 2025
BACKGROUND:
The City of Anaheim is one of more than 3,000 original plaintiff jurisdictions comprised of states, cities, and counties in a class action lawsuit alleging that pharmaceutical manufacturers, major distributors, and pharmacies caused the national opioid crisis. The opioid crisis, described by the Centers for Disease Control and Prevention (CDC) as the “opioid epidemic” due to its rapid escalation, high mortality rates, and sustained nationwide impact, is considered one of the most devastating public health emergencies in U.S. history. From 1999 to 2020, the epidemic caused over 564,000 deaths from opioid overdoses and affected more than 10 million Americans, with millions developing opioid use disorder (OUD). Underserved communities have been disproportionately affected, facing higher addiction rates and fewer treatment resources.
This litigation resulted in an estimated settlement of $54,000,000,000 ($54 billion) to be distributed to plaintiff jurisdictions and other participating subdivisions over an 18-year period beginning in 2022. In California, Opioid Settlement Funds (OSF) are monitored by the Department of Health Care Services (DHCS) and restricted to opioid abatement activities as defined by the terms of the settlement agreement, with California Government Code, Title 2, Division 3, Part 2, Chapter 6, Article 2, Section 12534 designating additional High Impact Abatement Activities (HIAA) in California.
Anaheim is projected to receive approximately $13,783,114 over 18 years and, to date, has received $6,078,788 of those funds. The Anaheim Housing and Community Development (HCD) Department is designated to receive and oversee the city's OSF.
DISCUSSION:
The opioid epidemic has exacerbated homelessness both nationally and locally, creating an increased need for recovery housing in Anaheim (National Alliance to End Homelessness, 2024; Johns Hopkins Bloomberg School of Public Health, 2024). Individuals with opioid use disorder (OUD) often face job loss, family disruption, and financial hardship, all of which heighten the risk of housing instability (Lifestyle Sustainability Directory, 2025; NIH, 2013).
Without stable shelter, recovery becomes even more difficult, as access to healthcare and supportive services is limited (Johns Hopkins Bloomberg School of Public Health, 2024; NIH, 2025).
Between 2017 and 2021, opioid-related deaths in Orange County nearly tripled from 7.9 to
23.2 per 100,000 residents, and fentanyl has since driven a 50% rise in deaths among people experiencing homelessness between 2020 and 2023.
In response, the City issued a Request for Proposals (RFP) in November 2024 to secure recovery housing and sober living placements for individuals affected by OUD. The City sought to utilize existing licensed beds across Orange County to: 1) support the expansion of the ACCESS program’s and its participants, 2) increase access to services for underserved sub-populations, 3) assist people experiencing homelessness and those at risk of falling into homelessness who are not justice involved, but unable to obtain beds on their own, and 4) support the recovery journeys of those exiting medically assisted detoxification treatment.
Approve the First Amendment to the Opioid Settlement Funding Agreements November 18, 2025
Following a competitive selection process, on April 8, 2025, City Council approved four agreements:
Action Alliance Foundation, KTMV Investments, LLC, The Common House, Inc., and The Eli Home, Inc., totaling $1,050,000. Each agency offers specialized services addressing distinct subpopulations, including women undergoing reunification, individuals exiting treatment, and justice-involved participants referred through ACCESS.
Since the execution of these agreements, the expansion of ACCESS and an overall increase in referrals from Anaheim Police Department (APD) Homeless Assessment Liaison Officers (HALO), street outreach teams, and health clinicians have produced a higher-than-anticipated demand for recovery housing. As of October 2025, ACCESS participation has grown significantly: 278 individuals have completed ACCESS evaluations, a 61% increase from the same period last year. Of those, 208 participants have been accepted into the program (up 73% from last year), and 52 individuals have graduated, marking a 206% increase from last year. The increase in ACCESS participation and direct street placements has accelerated expenditures, creating the need for additional funding to sustain services and preserve the capacity needed to achieve lasting recovery.
Recovery housing is a critical bridge that provides a stable, substance-free environment with accountability, peer support, and case management. This service reduces relapses and reliance on emergency services. It further improves court compliance and employment readiness, and lessens the impacts of substance use and homelessness on public spaces.
APD’s HALO unit has demonstrated success by placing individuals directly from the street into recovery housing when safe and appropriate, even if they are not ACCESS participants.
This low-barrier pathway shortens time to placement, reduces cycling through shelter or emergency rooms, and speeds engagement with services.
The Housing and Community Development is in the process of securing residential treatment services so participants can step down from detox/residential to sober environments to permanent housing rather than returning to shelter or street-level homelessness, where substance use is prevalent. For participants who are ready and able to work, the program integrates employment navigation and job placement partnerships to support self-sufficiency.
The proposed amendments to the existing contracts with Action Alliance Foundation, KTMV Investments, LLC, and The Common House, Inc. will be funded by the City’s allocation of the National Opioid Settlement Fund. Eligible uses of these funds are restricted to opioid abatement activities, ensuring that all expenditures directly support prevention, treatment, recovery, and harm-reduction efforts related to OUD. These amendments will ensure continued access to recovery housing, promote long-term stability for participants, and maintain program capacity to meet the ongoing demand for treatment and recovery services.
The table below summarizes the proposed contract amendments and revised funding allocations.
Revised Funding Summary
Original 1-Year Allocation Revised 1-Year Allocation
Original Maximum Compensation (3-Year Term)
Maximum Compensation (3-Year Term) Source Participants Housed per Month (Beds) Action Alliance Foundation $100,000 $360,000 $300,000 $1,080,000 OSF 30*KTMV Investments, LLC $50,000 $278,280 $150,000 $834,840 OSF 30*The Common House, Inc. $150,000 $255,564 $450,000 $766,692 OSF 4* *Actual number of persons served depends on the length of stay.
Approve the First Amendment to the Opioid Settlement Funding Agreements November 18, 2025
The request aligns with California’s High-Impact Abatement Activities (HIAA) and the City’s Strategic Plan Goal B: Enhance Livability – Maintain and expand services to address homelessness and its impacts.
IMPACT ON BUDGET:
The Housing and Community Development Department’s FY2025/26 budget includes funds for the proposed activities..
Respectfully submitted, Concurred by,
Grace Ruiz-Stepter Robert Fabela
Housing and Community City Attorney
Development Director
Attachments:
1. First Amendment to Opioid Settlement Funding between the City of Anaheim and Action Alliance Foundation
2. Exhibit – Original Agreement with Action Alliance Foundation
3. First Amendment to Opioid Settlement Funding between the City of Anaheim and KTMV Investments, LLC
4. Exhibit – Original Agreement with KTMV Investments, LLC
5. First Amendment to Opioid Settlement Funding between the City of Anaheim and The Common House, Inc.
6. Exhibit - Original Agreement with The Common House, Inc.