Baldwin Park City Council
March 15, 2023

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the use of Opioids or Opioid Products (but shall not be responsible for how the trade group ultimately uses the support provided because it is outside of Allergan’s control).

6. Allergan shall not enter into any contract or agreement with any person or entity or otherwise attempt to influence any person or entity in such a manner that has the purpose or foreseeable effect of limiting the dissemination of information regarding the risks and side effects of using Opioids or Opioid Products.

7. No officer or Vice President -level employee of Allergan may concurrently serve as a director, board member, employee, agent, or officer of any entity that primarily engages in conduct that Promotes Opioids or Opioid Products. Nothing in this provision shall preclude an officer or Vice President -level employee of Allergan from concurrently serving on the board of a hospital.

8. Allergan shall play no role in appointing persons to the board, or hiring persons to the staff, of any Third Party that primarily engages in conduct that Promotes Opioids or Opioid Products. For avoidance of doubt, nothing in this paragraph shall prohibit Allergan from fully and accurately responding to unsolicited requests or inquiries about a person’s fitness to serve as an employee or board member at any such Third Party.

F. Lobbying Restrictions

1. Allergan shall not Lobby for the enactment of any federal, state, or local legislative or regulatory provision that:
a. Encourages or requires Health Care Providers to prescribe Opioids or Opioid Products or sanctions Health Care Providers for failing to prescribe Opioids or failing to treat pain with Opioids; b. Has the effect of limiting access to any non-Opioid alternative pain treatments; or
c. Pertains to the classification of any Opioid or Opioid Product as a scheduled drug under the Controlled Substances Act.

2. Allergan shall not Lobby against the enactment of any federal, state, or local legislative or regulatory provision that supports:
a. The use of non-pharmacologic therapy and/or non -Opioid pharmacologic therapy to treat chronic pain over or instead of Opioids or Opioid Products, including but not limited to Third Party payment or reimbursement for such therapies;

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b. The use and/or prescription of immediate release Opioids or Opioid Products instead of extended-release Opioids or Opioid Products when an Opioid or Opioid Product is initiated, including but not limited to Third Party reimbursement or payment for such prescriptions;
c. The prescribing of the lowest effective dose of an Opioid or Opioid Product, including but not limited to Third Party reimbursement or payment for such prescriptions;
d. The limitation of initial prescriptions of Opioids or Opioid Products to treat acute pain;
e. The prescribing and other means of distribution of naloxone to minimize the risk of overdose, including but not limited to Third Party reimbursement or payment for naloxone;
f. The use of urine testing before starting use of Opioids or Opioid Products and annual urine testing when Opioids or Opioid Products are prescribed, including but not limited to Third Party reimbursement or payment for such testing;
g. Evidence-based treatment (such as using medication-assisted treatment with buprenorphine or methadone in combination with behavioral therapies) for OUD, including but not limited to Third Party reimbursement or payment for such treatment; or
h. The implementation or use of disposal systems when solely related to Opioids or Opioid Products (versus of general applicability to all pharmaceutical medications, for example).

3. Allergan shall not Lobby against the enactment of any federal, state, or local legislative or regulatory provision expanding the operation or use of Prescription Drug Monitoring Programs (“PDMPs”), including but not limited to provisions requiring Health Care Providers to review PDMPs when Opioid Product use is initiated and with every prescription thereafter.

4. Notwithstanding the foregoing restrictions in Sections II.F.1-3, the following conduct is not restricted:
a. Challenging the enforcement or interpretation of (including, but not limited to, suing for declaratory or injunctive relief) any laws, rules, or regulations;
b. Communications by Allergan in response to a law, rule, regulation, or order requiring such communication;

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c. Communications by an Allergan representative appearing before a federal or state legislative, administrative, or regulatory body, committee, or subcommittee as a result of a mandatory order or subpoena commanding that person or Allergan’s designee to testify; d. Responding, in a manner consistent with this Exhibit P, to an unsolicited request for the input on the passage of legislation or the promulgation of any rule or regulation when such request is submitted in writing specifically to Allergan from a government entity directly involved in the passage of that legislation o r promulgation of that rule or regulation; or
e. Lobbying for or against provisions of legislation, rule, or regulation that address subjects other than those identified in Sections II.F.1-3, so long as Allergan does not support specific portions of such legislation, rule, or regulation covered by Section II.F.1 or oppose specific portions of such legislation, rule, or regulation covered by Sections II. F.2-3. Allergan may Lobby for or against any legislation, rule, or regulation that may be covered by Sections II.F.1-3, if such legislation, rule, or regulation has general or specific provisions that affect medications beyond Opioids or Opioid Products, so long as Allergan’s intent and purpose of doing so is not to Promote Opioids or Opioid Products.

G. Ban on Prescription Savings Programs

1. Allergan shall not directly or indirectly offer any discounts, coupons, rebates, or other methods which have the effect of reducing or eliminating a patient’s co-payments or the cost of prescriptions (e.g., free trial prescriptions) for any Opioid Product (except to the extent a pre -existing contractual or legal requirement exists related to Opioid Products sold by Allergan before 2021).

2. Allergan shall not directly or indirectly provide financial support to any Third Party for discounts, coupons, rebates, or other methods which have the effect of reducing or eliminating a patient’s co-payments or the cost of prescriptions (e.g., free trial prescriptions) for any Opioid Product (except to the extent a pre-existing contractual or legal requirement exists related to Opioid Products sold by Allergan before 2021).

3. Allergan shall not directly or indirectly assist patients or Health Care Providers with the claims and/or prior authorization process required for third-party payors to approve payment for any Opioid Product.

4. Allergan may directly or indirectly provide financial support or In-Kind Support for non-Opioids to any Third Party that provides patient assistance

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or support services for the purposes of helping patients afford and gain access to the medications prescribed to them.

H. General Terms

1. Allergan shall not make any written or oral statement about Opioids or any Opioid Product that is unfair, false, misleading, deceptive or unconscionable as defined under the law of the Settling States. For purposes of this paragraph, “Opioid Product” shall also include methadone, buprenorphine, and other substances when used exclusively to treat opioid abuse, addiction, or overdose.

2. Allergan shall not represent that Opioids or any Opioid Product(s) have approvals, characteristics, uses, benefits, or qualities that they do not have.

For purposes of this paragraph, “Opioid Product” shall also include methadone, buprenorphine, and other substances when used exclusively to treat opioid abuse, addiction, or overdose.

3. This Exhibit P shall not be construed or used as a waiver or limitation of any defense otherwise available to Allergan or any Released Entity in any action, and nothing in this Exhibit P is intended to or shall be construed to prohibit Allergan or any Released Entity in any way whatsoever from taking legal or factual positions with regard to any Opioid Products in prosecution or defense of litigation or other legal proceedings.

4. Upon the request of the Attorney General of any Settling State, Allergan shall provide the Attorney General with copies of the following, within forty-five (45) days of the request:
a. Any litigation or civil or criminal law enforcement subpoenas or CID relating to Allergan’s Opioid Product(s) that Allergan received after the Effective Date of the Agreement; and
b. Warning or untitled letters issued by the FDA regarding Allergan’s Opioid Product(s) and all correspondence between Allergan and the FDA related to such letters that Allergan received after the Effective Date of the Agreement.

5. Nothing in this Exhibit P shall be construed to limit or impair Allergan’s ability to:
a. Communicate its positions and/or respond to media inquiries concerning litigation, investigations, or other proceedings or matters relating to Allergan or its Opioid Products.
b. Maintain a website explaining its litigation positions and responding to allegations concerning Allergan or its Opioid Products.

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I. Compliance with All State Laws and Regulations Relating to the Sale, Promotion, and Distribution of Any Opioid Product

1. Allergan shall comply with all applicable State laws and regulations that relate to the sale, Promotion, distribution, and disposal of Opioids or Opioid Products in the Settling States, provided that nothing in this paragraph requires Allergan to violate federal law or regulations, including but not limited to:
a. State Controlled Substances Act, including all guidance issued by the applicable state regulator(s);
b. State Consumer Protection Laws; and
c. State laws, regulations, and guidelines related to the prescribing, distribution, and disposal of Opioid Products.

J. Clinical Data Transparency

1. Allergan agrees to make available to an independent Third-Party data center or platform owner (e.g., Vivli) anonymized clinical data generated from Allergan-sponsored Phase II-IV interventional clinical studies—regardless of whether that data was submitted to a regulatory authority (e.g., FDA) — for branded opioid drugs that are Opioids or Opioid Products that have received an initial marketing authorization from a regulatory authority to the extent Allergan conducts a reasonable, good faith investigation to locate any such data and it is in Allergan’s possession. Anonymized clinical data includes:
a. Full analyzable data set(s) (including individual participant -level data de-identified);
b. The clinical study re port(s) redacted for commercial or personal identifying information;
c. The full protocol(s) (including the initial version, final version, and all amendments); and

2. Full statistical analysis plan(s) (including all amendments and documentation for additional work processes); and Dataset Specifications, which describe the available dataset variables (such as age, race, blood pressure, lab values, etc.).

3. The independent Third Party will facilitate the disclosure of such clinical data to qualified researchers with a bona fide scientific research proposal as reviewed and approved by an independent review panel for scientific merit consistent with the panel’s assessment criteria and pursuant to an agreed upon data use agreement.

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4. Allergan shall not interfere with deci sions made by the staff or reviewers associated with the independent Third-Party data center or platform owner.

5. Allergan shall bear all costs for making clinical data available pursuant to Section II.J.1 of this Exhibit P.

III. DOCUMENT DISCLOSURE
A. Documents Subject to Public Disclosure
The following documents must be provided to each Settling State and are subject to public disclosure in perpetuity, except for the redactions authorized by section B:

1. All Allergan-produced documents admitted as trial exhibits in In re Opioid Litigation, Index No. 400000/2017 (N.Y. Sup. Ct., Suffolk County), The City and County of San Francisco, California and the People of the State of California, acting by and through San Francisco City Attorney David Chiu v. Purdue P harma L.P., et al. , Case No. 3:18 -cv-07591 (N.D. Cal.), The State of West Virginia ex rel. Patrick Morrisey, Attorney General v. Teva Pharmaceutical Industries Ltd., et al., Civil Action No. 19-C-104 BNE (W.

Va. Cir. Ct., Boone County), or The People of the State of California, acting by and through Santa Clara County Counsel James R. Williams, Orange County District Attorney Tony Rackauckas, Los Angeles County Counsel Mary C. Wickham, and Oakland City Attorney Barbara J. Parker v. Purdue Pharma L.P., et al., Case No. 30-2014-00725287-CU-BT-CXC (Cal. Super.

Ct., Orange County), together with complete trial transcripts.

2. All Allergan deposition transcripts, and exhibits from or produced in the matters identified in subsection III.A.1, as well as in In re Nat’l Prescription Opiate Litig., No. 1:17-md-02804 (N.D. Ohio).

3. All summary judgment filings, proposed findings of fact and law, and expert reports relating to the claims against Allergan that were filed in the matters identified in subsections III.A.1 and III.A.2, together with related exhibits.

4. All documents provided under this provision must be provided in an appropriate electronic format with appropriate metadata.

5. In addition, Allergan shall not object to public disclosure of the following documents, withou t further redaction: Acquired_Actavis_00000001 - Acquired_Actavis_02689490.

B. Information That Allergan May Redact

1. The following categories of information are exempt from public disclosure:

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a. Information subject to trade secret protection. A “trade secret” is information, including a formula, pattern, compilation, program, device, method, technique or process, that (a) derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure and use; and (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Even if the information falls within the definition, “trade secret” does not include information reflecting sales or promotional strategies, tactics, targeting, or data, or internal communications related to sales or promotion or information in documents dated more than five (5) years before the disclosure required by this section.
b. Confidential personal information. “Confidential personal information” means individual Social Security or tax identification numbers, personal fin ancial account numbers, passport numbers, driver license numbers, home addresses, home telephone numbers, personal email addresses, and other personally identifiable information protected by law from disclosure. “Confidential personal information” does no t include the names of Allergan’s officers, directors, employees, consultants, agents, or attorneys or of prescribers or of officials of a government agency.
c. Information that is inappropriate for public disclosure because it is subject to personal privacy interests recognized by law (e.g., HIPAA), or contractual rights of third parties that Allergan may not abrogate.
d. Information regarding Allergan employees’ personal matters unrelated to Allergan, including emails produced by Allergan custodians discussing vacation or sick leave, family, or other personal matters.
e. Information that is protected by the attorney–client or attorney work product privilege.
f. Financial documents designated as “Highly Confidential” or “Highly Confidential Information” under Case Man agement Order No. 2 in In re Nat’l Prescription Opiate Litig. , No. 1:17-md-02804 (N.D. Ohio) and produced in response to the April 3, 2019 Ruling Regarding Jurisdictional Discovery on Defendants Allergan, Teva, and Mallinckrodt, including tax returns inclu ding all schedules and attachments, policies regarding accounting, and annual reports.

C. Redaction of Documents Containing Protected Information

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1. Whenever a document contains information subject to a claim of exemption pursuant to section B, Allergan will provide the document in redacted form.

Such redactions must indicate that trade secret and/or private information, as appropriate, has been redacted. Redactions are limited to the minimum redactions possible, consistent with section B.

2. Allergan must provi de to each Settling State a log noting each document redacted. The log must also provide fields stating the basis for redacting the document, with sufficient detail to allow an assessment of the merits of the assertion. The log is subject to public disclo sure in perpetuity. The log shall be provided by the production deadline.

3. In addition to the redacted documents, Allergan shall, upon any Settling State’s request, also produce all documents identified in subsection III.A above in unredacted form to such Settling State at the same time, but only to the extent the document was produced by Allergan in an unredacted form in the underlying litigation, and only for the purpose of permitting a merits assessment and potential challenge of the redaction pursuant t o Section IV herein.

D. Public Disclosure Through a Document Repository

1. Each Settling State may publicly disclose all documents covered by this section through a public repository maintained by a governmental, non - profit, or academic institution. Each Settling State may specify the terms of any such repository’s use of those documents, including allowing the repository to index and make searchable all documents subject to public disclosure, including the metadata associated with those documents.

E. Timeline for Production

1. Allergan shall produce all documents required by Section A within nine months from the Effective Date.

F. Support Payment

1. Within thirty (30) calendar days of the Effective Date, Allergan will make one-time payments totaling $1,375,000 to the University of California, San Francisco Foundation (UCSF Foundation) and The Johns Hopkins University, to be used to support a public repository of documents subject to this section.

IV. ENFORCEMENT
A. For the purposes of resolving disputes with respect to compliance with Exhibit P, should any of the Settling States have reason to believe that Allergan has violated a provision of Exhibit P, then such Settling State shall notify Allergan in writing of the specific objection, identify with particularity the provisions of Exhibit P that

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the practice appears to violate, and give Allergan thirty (30) days to respond to the notification (“Response Period”).

B. Upon receipt of written notice from any of the Settling States, Allergan shall provide a written response to the Settling State’s notification, containing either a statement explaining why Allergan believes it is in compliance with Exhibit P, or a detailed explanation of how the alleged violation occurred and a statement explaining how and when Allergan intends to remedy or has remedied the alleged violation. Allergan may request a reasonable amount of additional time to cure any violation through such rem edial measures (“Cure Period”) and the Settling State shall not unreasonably withhold approval of such request.

C. The Settling State may not take any action concerning the alleged violation of Exhibit P during the Response and Cure Periods. Nothing shall p revent the Settling State from agreeing in writing to provide Allergan with additional time beyond the thirty (30) days to respond to the notice. However, the Settling State may take any action, including, but not limited to legal action to enforce compliance with the Consent Judgment, without delay if the Settling State believes that a threat to the health or safety of the public requires immediate action.

D. The Settling State may bring an action against Allergan to enforce the terms of Exhibit P , but only after providing Allergan an opportunity to respond to the notification and, if agreed upon, a period to cure any violation, as described above, or within any other period as agreed to by Allergan and the Settling State.

E. Nothing in this Consent Judgment shall be interpreted to limit any Settling State’s Civil Investigative Demand (“CID”) or investigative subpoena authority, to the extent such authority exists under applicable state law.

F. Nothing herein shall be construed to exonerate any failure to comply w ith any provision of Exhibit P after the Effective Date, or to compromise the authority of any Settling State to take action for any failure to comply with Exhibit P, consistent with this section.

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EXHIBIT Q
[Intentionally Omitted]

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EXHIBIT R
Agreement on Attorneys’ Fees, Costs, and Expenses
This Agreement on Attorneys’ Fees, Expenses, and Costs (“Fee Agreement”) is entered between Teva, Allergan, and the Plaintiffs’ Executive Committee appointed in the multidistrict litigation in the Northern District of Ohio, In re National Prescription Opiate Litigation, No. 1:17- md-02804 (“MDL PEC”), in connection with the Teva Global Opioid Settlement Agreement (“Teva Agreement”) and the Allergan Public Global Opioid Settlement Agreement (“Allergan Agreement”). This Fee Agreement becomes effective on the Effective Date of the Teva Agreement and Allergan Agreement or the date that the Consent Judgments anticipated under the Teva Agreement and Allergan Agreement become final in 25 Settling States (whichever is later).

I. Definitions
A. This Fee Agreement incorporates all defined terms in the Teva Agreement and Allergan Agreement, unless otherwise defined herein, and shall be interpreted in a manner consistent with the Teva Agreement and Allergan Agreement.

B. “Allergan.” Allergan Finance, LLC (f/k/a Actavis, Inc., which, in turn, was f/k/a/ Watson Pharmaceuticals, Inc.) and Allergan Limited (f/k/a Allergan plc, which, in turn, was f/k/a Actavis plc). Allergan does not include Teva Pharmaceuticals Industries Ltd. ( “Teva Ltd.”), Teva Pharmaceuticals USA, Inc. ( “Teva USA” ), Cephalon, Inc. (“Cephalon”), Actavis LLC (f/k/a Actavis Inc.) ( “Actavis LLC”), Watson Laboratories, Inc. ( “Watson”), Actavis Pharma, Inc. (f/k/a Watson Pharma, Inc.) (“Actavis Pharma”), Actavis Elizabeth LLC (“Actavis Elizabeth”), Actavis Kadian LLC ( “Actavis Kadian” ), Actavis Laboratories FL, Inc. (f/k/a Watson Laboratories, Inc. - Florida) (“Actavis Labs FL” ), Actavis Laboratories UT, Inc. (f/k/a Watson Laboratories, Inc. - Utah) (“Actavis Labs UT” ), Actavis Mid Atlantic LLC (“Actavis Mid”), Actavis South Atlantic LLC (“Actavis South”), Actavis Totowa LLC (“Actavis Totowa”), or Anda, Inc. (“Anda”).

C. “Applicant.” Any Attorney or MDL Participating Counsel who seeks an award of attorneys’ fees from the Attorney Fee Fund pursuant to the procedures established by the MDL Court and the Fee Panel.

D. “Attorney.” Any of the following retained through a legal contingency fee or hourly fee contract: a solo practitioner, multi -attorney law firm, or other legal representative of a Participating Subdivision or MDL Participating Counsel. This does not include Subdivision in-house attorneys.

E. “Attorney Fee Fund.” An account consisting of funds allocated to pay attorneys’ fees approved pursuant to Section III of this Fee Agreement established by Order of and under the ongoing jurisdiction of the MDL Court, as provided below.

F. “Common Benefit .” Work performed for the benefit of all Participating Subdivisions or Tribal Nations, including, but not limited to, pretrial matters ,

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discovery, trial preparation, trial, settlement negotiations, and all other work that advances the interests of the Participating Subdivisions.

G. “Common Benefit Fund .” The sub fund of the Attorney Fee Fund described in subsection III.E.

H. “Contingency Fee Fund.” The sub fund of the Attorney Fee Fund described in subsection III.F.

I. “Cost and Expense Fund Administrator.” The administrator appointed by the MDL Court on August 12, 2021 (MDL Docket No. 3828), to administer the Cost Fund and its sub funds as provided in the Fee Agreement.

J. “Court Common Benefit Fund .” The Common Benefit Fund established by the MDL Court in its orders of July 22, 2021, MDL Docket No. 3794, and May 9, 2022, MDL Docket No. 4428.

K. “Fee Entitlement.” Any right, entitlement, or expectation, including but not limited to a fee contract, contingent fee contract, agreement, referral arrangement, co - counsel arrangement, State Back -Stop agreement, or any other arrangement by which counsel could receive compensation or other consideration. Fo r the avoidance of doubt, the scope of Fee Entitlement under subparagraph III.G.3.a does not include any Attorneys’ fees associated with representation of a State.

L. “Fee Panel.” The three-person panel appointed by the MDL Court on August 12, 2021 (MDL Docket No. 3828), to administer and make recommendations for the allocation and distribution of the Attorney Fee Fund and its sub funds as provided in the Fee Agreement.

M. “Later Litigating State.” A State that first files a lawsuit bringing a Released Claim against a Released Entity after the Preliminary Agreement Date.

N. “MDL Court .” United States District Court for the Northern District of Ohio Eastern Division, Case No. 1:17-md-02804, Judge Dan Aaron Polster.

O. “MDL Direct Cost Fund.” The cost fund described in subparagraph II.A.3.a below.

P. “MDL Participating Counsel.” MDL Participating Counsel includes an attorney or firm authorized by MDL 2804 Lead Counsel to perform work for the Common Benefit of Participating Subdivisions. By way of example, it would i nclude insurance counsel and appellant counsel.

Q. “MDL PEC.” The Plaintiffs’ Executive Committee appointed by the MDL Court.

R. “Non-Participating Litigating Subdivision.” A Litigating Subdivision that is not a Participating Subdivision.

S. “Non-Participating State.” A State that is not a Participating State.

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T. “Participating Litigating Subdivision .” A Litigating Subdivision that is also a Participating Subdivision.

U. “Participation Agreement .” An agreement executed by an Attorney that acknowledges the obligation to pay an appropriate MDL Common Benefit Assessment.

V. “Qualified Tribal Representation.” Representation by an attorney of a Participating Tribal Government regarding Released Claims against Released Entities. Such counsel are eligible for Common Benefit Fee consideration. The Teva Tribal Global Settlement and the Allergan Tribal Global Settlement will provide for the contribution to the Common Benefit Fund as determined by the MDL Court.

W. “Qualifying Representation .” Legal services provided for representation of the MDL PEC or Participating Litigating Subdivision regarding Released Claims against Released Entities.

X. “State Back -Stop Agreement .” Any agreement by a Settling State and private counsel for Participating Subdivisions in that State (or legislation enacted in that State) to provide, adjust, or guarantee attorneys’ fees and costs, whether from the Attorney Fee Fund or any other source recognized in the agreement or legislation.1 Y. “Subdivision Cost and Expense Fund.” The fund created to pay approved Subdivision and Tribal Nations costs and expenses as set forth in subparagraph II.A.3.b.

Z. “Teva” means (i) Teva Pharmaceutical Industries Ltd. and (ii) all of its respective past and present direct or indirect parents, subsidiaries, divisions, affiliates, joint ventures, predecessors, successors, assigns, including but not limited to Teva Pharmaceuticals USA, Inc., the Actavis Generic Entities, and Anda Inc.

II. MDL Direct Cost Fund and Subdivision Cost and Expense Fund (“Cost Fund”) A. The total Cost Fund shall be $30 million dollars funded as set forth below.

1. Total cost to be paid by Teva in each of the relevant Payment Years2 under this Agreement shall be up to the following a mounts, subject to the provisions set forth below:

Cost Fund

1 Nothing herein shall be understood to indicate approval for additional State Back -Stop Agreements or modifications of existing State Back-Stop Agreements.
2 Payment Year shall have the same meaning for Teva as set forth in the Teva Agreement and Teva Exhibits M -1 and M-3. Payment Year shall carry the same definition for Allergan as set forth in the Allergan Agreement and Allergan Exhibits M-1 and M-2.

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Payment
Year 1 $9,000,000.00
Payment
Year 2 $9,000,000.00

2. Total cost to be paid by Allergan in each of the relevant Payment Years under this Agreement shall be up to the following amounts, subject to the provisions set forth below:

Cost Fund
Payment
Year 1 $6,000,000.00
Payment
Year 2 $6,000,000.00

3. The Cost Fund shall be split into the MDL Direct Cost Fund and the Subdivision Cost and Expense Fund.
a. The MDL Direct Cost Fund shall be Seven Million Five Hundred Thousand Dollars ($7,500,000), payable 50% in Year One, and 50% in Year Two. The MDL Direct Cost Fund shall make payment without any delay to reimburse the MDL PEC for an agreed -to portion of the expenses incurred, provided the costs have been approved by the Cost and Expense Fund Administrator appointed by the Court. The MDL Direct Cost Fund w ill be paid directly to the MDL Opiate Capital Account. The Cost and Expense Fund Administrator may include costs incurred by the MDL PEC in furtherance of litigation, mediation, implementation, and management of the Settlements.
b. The Subdivision Cost and Expense Fund shall be Twenty -Two Million Five Hundred Thousand Dollars ($22,500,000), payable 50% in Year One and 50% in Year Two.
c. It is the intention of the Parties that the Cost Fund shall be administered by the Cost Fund and Expense Fund Administrator (MDL Docket No. 3828), who will be governed by the provisions of this Agreement and shall design the process and procedures for the allocation of costs pursuant to this Agreement and the MDL Court’s Order.
d. The costs of the Cost and Expense Fund Administrator shall be paid from the Cost Fund and allocated by the Cost and Expense Fund Administrator between the MDL Direct Cost Fund and the

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Subdivision Cost and Expense Fund to fairly charge each fund the cost incurred in implementing and supervising the specific fund. e. The Cost and Expense Fund Administrator shall set the process and procedures for submission of and criteria for applications for payment of Subdivisions’ and Tribal Nations’ costs and expenses.

The Cost and Expense Fund Administrator shall receiv e and evaluate applications from Participating Litigating Subdivisions and litigating Tribal Nations , whether filed in Federal Court or State Court, to seek reimbursement for eligible costs in pursuit of claims against Allergan or Teva. The process shall require a showing that the costs or expenses sought were reasonably incurred in furtherance of active litigation of a designated state or federal bellwether trial - set case, or Common Benefit. The Cost and Expense Fund Administrator shall require transpare ncy from all applicants as to any other sources for compensating Attorneys for Subdivisions and Tribal Nations for costs incurred. If funds remain after the reimbursement of approved out -of-pocket costs, the Cost and Expense Fund Administrator may conside r reasonable and appropriate payment for client time, costs, or expenses incurred by recognized trial bellwether plaintiffs. At the conclusion of the process, any funds not allocated by the Cost and Expense Fund Administrator shall be transferred to the C ommon Benefit Fund established in this Exhibit R.

4. In the event that States and Subdivisions enter into an additional global settlement with a party or parties other than Teva or Allergan that is (a) under the jurisdiction of the MDL Court in MDL No. 2804 , (b) creates a separate cost fund, and (c) unless the parties agree to another date, such agreement has an effective date prior to June 30, 2023, the Cost and Expense Fund Administrator shall have the authority to aggregate the Cost Fund with the cost fund created under that global settlement agreement. The Cost and Expense Fund Administrator shall have the authority to address the appropriate procedures and required information to allow the costs to be funded from the appropriate cost fund or shared by two or more cost funds.

III. Attorney Fee Fund
A. An Attorney Fee Fund shall be paid in the following amounts and years:

Teva Shall Pay Allergan Shall Pay
Payment
Year 1 $ 46,215,837.93 $ 40,778,855.53
Payment
Year 2 $ 46,215,837.93 $ 40,778,855.53
Payment
Year 3 $ 55,215,837.92 $ 46,778,855.53

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Payment
Year 4 $ 55,215,837.92 $ 46,778,855.53
Payment
Year 5 $ 55,215,837.92 $ 0.00
Payment
Year 6 $ 55,215,837.92 $ 0.00

B. The Attorney Fee Fund shall consist of the Contingency Fee Fund and the Common Benefit Fund.

2. It is the intention of the Parties that the Contingency Fee Fund and the Common Benefit Fund shall be administered by the Fee Panel (MDL Docket No. 3828), which w ill be governed by the provisions of this Fee Agreement and shall design the process and procedures for the allocation of fees pursuant to this Fee Agreement and the MDL Court’s Order.

C. The fees to be paid under this Fee Agreement are available for Attorn eys engaged in Qualifying Representations and Qualified Tribal Representations only. Fees to be paid under this Fee Agreement are not available prior to the Effective Date of the Teva Agreement and Allergan Agreement or if the Teva Agreement does not proceed past Teva’s determination in subsection XI.A of the Teva Agreement or if the Allergan Agreement does not proceed past Allergan’s determination in subsection X.A of the Allergan Agreement. Fees to be paid under this Fee Agreement are not available for representation of States, Non -Participating Subdivisions or Non -Litigating Subdivisions and are not available for representation of private hospitals, third -party payors, NAS claimants, personal injury/wrongful death claimants, or any entity other than Par ticipating Litigating Subdivisions. In addition, fees under this Fee Agreement are not available for representation of any individual or entity in matters other than those claims against Released Entities, but may include a reasonable share of representat ions that involve development of facts for pursuit of opioid -related claims against multiple defendants in the pharmacy, manufacturing, and distribution chain.

D. Attorney Fee Fund and Sub Funds.

1. There shall be a split of the Attorney Fee Fund into the Contingency Fee Fund and the Common Benefit Fund. The split shall be 40% to the Contingency Fee Fund and 60% to the Common Benefit Fund.

2. In no event shall Teva or Allergan be required to pay more into the Attorney Fee Fund in any Payment Year than the maximum amount specified for that Payment Year in subsection III.A., which amounts are reflected in Exhibit M to the Teva Agreement and Allergan Agreement. The amounts allocated to the Contingency Fee Fund and the Common Benefit Fund set by the Fee Panel shall be subject to the reductions and offsets set forth below.

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3. Awards of fees from the Contingency Fee Fund shall be available to Attorneys with Qualifying Representations of Participating Litigating Subdivisions eligible to receive an allocation under the Teva Agreement and Allergan Agreement, as set forth in Exhibits F -2 and G to the Teva Agreement and Exhibits F and G to the Allergan Agreement, and shall be made applying the Mathematical Model attached as Exhibit “A” to this Fee Agreement. The collection of the data and calculations for the Mathematical Model has been a cooperative effort among private couns el for a large number of Litigating Subdivisions. The analysis has been spearheaded by Joseph Tann and Andrew Arnold. The Fee Panel is encouraged to continue working with those counsel in application of the Model. The Fee Panel shall oversee the applica tion of the Model and resolve any questions or disputes concerning the eligibility of a Counsel to participate as required in subsection III.G. The Panel is empowered to hear disputes concerning and ensure the accuracy of the mathematical calculation.

4. As to awards from the Contingency Fee Fund, there shall be no right of appeal.

5. Any appeal of an award of the Fee Panel from the Common Benefit Fund will be made to the MDL Court and be reviewed under an abuse of discretion standard.

E. Common Benefit Fund (60% of the Attorney Fee Fund).

1. Funds in the Attorney Fee Fund shall be allocated to the Common Benefit Fund according to the schedule set forth below, subject to the adjustments described in paragraph III.E.6. The payments are to be made on the following yearly schedule, subject to the adjustments set forth below:

Teva Shall Pay Allergan Shall Pay
Payment
Year 1 $ 27,729,502.76 $ 24,467,313.32
Payment
Year 2 $ 27,729,502.76 $ 24,467,313.32
Payment
Year 3 $ 33,129,502.75 $ 28,067,313.32
Payment
Year 4 $ 33,129,502.75 $ 28,067,313.32
Payment
Year 5 $ 33,129,502.75 $ 0.00
Payment
Year 6 $ 33,129,502.75 $ 0.00

2. The Common Benefit Fund shall be available to compensate Attorneys engaged in Qualifying Representations of Participating Litigating

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Subdivisions and Qualified Tribal Representation of Tribal Participating Governments who:
a. have performed work for the Commo n Benefit of all Participating Subdivisions and/or Tribal Nations consistent with the provisions to the guidelines established by Judge Polster set forth in MDL 2804 and the May 1, 2018 Order, under docket number 358, which is incorporated herein by reference; and
b. satisfy the eligibility criteria set forth in subsection III.G.

3. For purposes of Common Benefit Fund distribution, Attorneys representing Tribal Nations litigating against Teva or Allergan have also reached a settlement for Released Claims with Teva and Allergan. These settlements shall be the subject of separate agreements with Teva and Allergan.

Attorneys representing Tribal Nations are eligible for Common Benefit consideration, provided such agreements with Teva and Allergan bec ome effective under their terms. Such Attorneys must meet the eligibility criteria in subsection III.G.

4. For purposes of Common Benefit Fund distribution, MDL Participating Counsel not engaged in Qualifying Representations of Participating Litigating Subdivisions but who performed work for the Common Benefit pursuant to authorization from the MDL Co -Leads and meet the eligibility criteria in subsection III.G shall be eligible.

5. The Common Benefit Fund shall be overseen by the Fee Panel, which shall determine the allocation of funds to eligible Attorneys consistent with this Fee Agreement and the May 1, 2018 Order.

6. In assessing the benefits that an Applicant has conferred to Participating Subdivisions (including non -Litigating Subdivisions) and/or Tribes for purposes of any compensation decision, the Fee Panel shall give significant weight to the extent to which (i) the Applicant and his or her clients have contributed to increasing (or reducing) the Initial Participation in the Teva Agreement or the Allergan Agreement, and (ii) the Applicant and his or her clients have contributed to increasing (or reducing) the amounts achieved under Incentive Payments A -D through participation in the Teva Agreement, including the Teva Tribal Agreement, or the Allergan Agreement, including the Allergan Tribal Agreement. The Fee Panel shall also consider additional fee recoveries the Applicant may potentially obtain, including, but not limited to, from attorney fee funds under other settlement agreements, State Back -Stop Agreements, repres entations of States or Tribal Nations, representations of other clients in opioids -related matters, or through the representation of Subdivision clients, whether they participated in the Teva Agreement or Allergan Agreement or not. It is the intent of thi s provision to recognize that the goal of the Teva Agreement

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and Allergan Agreement is to provide for maximum participation by the Subdivisions, maximum abatement funding for all Subdivisions nationally, and the maximum peace for Released Entities. Therefore, representing one or more Non -Participating States or Non-Participating Subdivisions does not further the goal of the Teva Agreement or Allergan Agreement, and should not be considered Common Benefit because it does not increase funds available to Part icipating Subdivisions’ abatement programs.

Representing one or more Later Litigating States or Later Litigating Subdivisions is antithetical to the Teva Settlement and the Allergan Agreement and detracts from Common Benefit. The Fee Panel shall consider this concept of “common detriment” set forth in this paragraph in all of its decision making with respect to the allocation of the Attorney Fee Fund among Applicants, as well as, in its discretion, any offsets provided to Teva or Allergan as set forth in subsection III.H. The Fee Panel shall consider the totality of the Applicant’s Participating Litigating Subdivisions as compared to the Applicant’s Non -Participating Litigating Subdivisions; the Parties recognize that, although the goal is for 100% partic ipation, Applicants with a greater number of clients have a greater probability of having one or more Non-Participating Litigating Subdivisions. As used in this paragraph, “client” or “representing” a Subdivision shall include any Litigating Subdivision as to which the Applicant has a Fee Entitlement.

7. As set forth in subsection III.H, the Fee Panel must consider the factors described in paragraph III.E.6 to determine how and whether to reduce the amounts to be paid by Teva or Allergan under this Fee Agreement and to determine how to allocate funds among Applicants. They may also, at their discretion, consider other factors. Any reduction in payment obligation or credit to be given Teva or Allergan in this Fee Agreement shall be applied against the l ast Payment Year for that defendant and working backwards.

Any reduction to an Applicant not credited to Teva or Allergan shall be allocated to attorneys whose Litigating Subdivision clients participated in the settlement by the Initial Participation Date.

8. The MDL PEC will seek, and the Attorneys General for Settling States, Teva, and Allergan, will not oppose, a Common Benefit Fee Order requiring an assessment of 7.5% on the gross recovery (by judgment or settlement) of any Non -Participating Subdivision t hat is subject to the federal court jurisdiction, represented by a MDL PEC firm, represented by any Attorney receiving fees from the Common Benefit Fund, represented by any Attorney that signed a Participation Agreement or paid in a case otherwise under the jurisdiction of the MDL Court.

9. If Teva and Allergan agree to go forward with their respective Agreements under subsections [XI.A and X.A] of their respective Agreements, they shall pay the full Common Benefit (60%) Fee into the Common Benefit Fund without regard to the number of Settling States or Participating Subdivisions. Should Teva and/or Allergan pay a judgment to, or settle

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with, a Non -Participating Sta te or a Non -Participating Litigating Subdivision subsequent to the Reference Date, and such settlement or judgment results in a common benefit fee assessment paid into the Common Benefit Fund or the Court Common Benefit Fund, the following shall apply:
a. Teva or Allergan shall be credited dollar -for-dollar for the amount paid for the fee assessment up to 7.5% of the abatement amount derived from the application of the State Global Allocation Percentage as set forth in Exhibit F -1 or the abatement amount derived from the application of the Subdivision and Special District Allocation Percentage as set forth in Exhibit G that the Non - Participating State or Non -Participating Litigating Subdivision would have received if it had participated in the Settlement Agreement;
b. Except as set forth below in subparagraph III.E.9.c, for any settlement or judgment that meets the requirements of paragraph III.E.9 that exceeds the abatement amount derived from the application of the State Global Allocation Percentage as set forth in Exhibit F-1 or the abatement amount derived from the application of the Subdivision and Special District Allocation Percentage as set forth in Exhibit G , no credits shall be taken against Teva or Allergan’s obligation to make payments into the Common Be nefit Fund for that portion of the settlement or judgment in excess of the abatement amount derived from the application of the State Global Allocation Percentage as set forth in Exhibit F-1 or the abatement amount derived from the application of the Subdivision and Special District Allocation Percentage as set forth in Exhibit G; c. For any settlement or judgment that meets the requirements of paragraph III.E.9 that exceeds the abatement amount derived from the application of the State Global Allocation Percentage as set forth in Exhibit F -1 or the abatement amount derived from the application of the Subdivision and Special District Allocation Percentage as set forth in Exhibit G that the Later Litigating State or Later Litigating Subdivision would have receiv ed if it had participated in the Settlement Agreement, where the Later Litigating State or Later Litigating Subdivision is represented by any member of the MDL PEC or that member’s law firm, Teva or Allergan shall be credited dollar-for-dollar for the full amount of the 7.5% common benefit fee assessment paid into the Common Benefit Fund or the Court Common Benefit Fund;
d. If a credit is made to Allergan or Teva pursuant to subparagraph III.E.9.c., then that amount shall be calculated as a direct reduction to any common benefit fee award made under this Fee Agreement

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to the MDL PEC firm(s) that represented the Later Litigating State or Later Litigating Subdivision;
e. Any credits shall be taken first against Teva’s or Allergan’s payment to the Common Benefit Fund in Teva’s or Allergan’s respective final Payment Year as set forth in paragraph III.E.1 (for Teva Year 6; for Allergan Year 4), up to the full amount of Teva’s or Allergan’s final year payment obligation, then from the next -to-final Payment Year’s payment obligation, and so on;
f. Teva and Allergan shall not be entitled to any credits against the Common Benefit Fund for settlements or judgments paid after Teva’s or Allergan’s final fee Payment Year.

F. Contingency Fee Fund (40% of the Attorney Fee Fund).

1. Funds from the Attorney Fee Fund shall be allocated to the Contingency Fee Fund on the following yearly schedule, subject to the adjustments set forth below:

Teva Shall Pay Allergan Shall Pay
Payment
Year 1 $ 18,486,335.17 $ 16,311,542.21
Payment
Year 2 $ 18,486,335.17 $ 16,311,542.21
Payment
Year 3 $ 22,086,335.17 $ 18,711,542.21
Payment
Year 4 $ 22,086,335.17 $ 18,711,542.21
Payment
Year 5 $ 22,086,335.17 $ 0.00
Payment
Year 6 $ 22,086,335.17 $ 0.00

2. The Contingency Fee Fund shall be available to compensate Attorneys engaged in Qualifying Representations of Participating Litigating Subdivisions that meet the criteria set forth in subsection III.G. a. The Contingency Fee Fund shall be available to Attorn eys who represent Litigating Subdivisions that are Participating Subdivisions, whether their actions are filed in state or federal court, and meet the eligibility criteria of subsection III.G.
b. Participation in the Contingency Fee Fund by counsel that have a case that is not subject to the jurisdiction of the MDL Court shall not create, provide, or waive jurisdiction of the MDL Court over that Litigating Subdivision, that case or Attorneys, other than to oversee

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the fairness of the distribution process, and enforcement of this Fee Agreement.
c. Under the terms of the Teva Agreement and Allergan Agreement Litigating Subdivisions must become a Participating Litigating Subdivision under both Agreements to be eligible to participate.

Therefore, Exhibit R applies jointly to Teva and Allergan with the Attorneys’ Fee Fund and MDL Cost Fund to include the combined payment from Teva and Allergan.

3. Teva and/or Allergan shall each be entitled to a pro-rata reduction to their own portion of the Contingency Fee Fund payment(s) in accordance with subsection III.F.4., unless, by the Payment Date for the Initial Year Payment, (i) 41 states are Settling States for Teva or 43 states are Settling States for Allergan, (ii) 98% of all Litigating Subdivisions are Participating Subdivisions and/or Subdivisions Subject to a Bar, Case -Specific Resolution, and, (iii) 97% of all Non -Litigating Subdivisions with Populations over 10,000 as listed in Exhibit I are Participating Subdivisions and/or Subdivisions Subject to a Bar, Case -Specific Resolution, in which case no offset shall be applied.

4. If the participation conditions in paragraph III.F.3 are not met, then the amounts owed by Teva and/or Allergan to the Contingency Fee Fund shall be reduced as follows:
a. For Non-Settling States, the Contingency Fee Fund payments shall first be reduced by the amounts identified by the Fee Panel, pursuant to paragraph III.H.7, that would have been owed to counsel for Litigating Subdivisions in Non-Settling States, had those States and those Litigating Subdivisions been Settling States and Participating Subdivisions.
b. Following the calculation in subparagraph III.F.4.a., the Contingency Fee Fund payments shall be reduced to reflect the non- joinder of Litigating Subdivisions in Settling States by subtracting the amounts identified by the Fee Panel, pursuant to paragraph III.H.7, that would have been owed to counsel for Non-Participating Litigating Subdivisions in Settling States had such Litigating Subdivisions been Participating Subdivisions.

5. In the event that after the date of the Settlement Agreement Teva, prior to the Effective Date of the Teva Agreement, or Allergan, prior to the Effective Date of the Allergan Agreement, settles with any Litigating Subdivision that would have been eligible to participate in the defendant’s Agreement, and, under such settlement agreement pays attorneys’ fees, the Fee Panel shall treat those Litigating Subdivisions as Participating Litigating S ubdivisions and, applying the same criteria applicable to all Attorneys for Participating

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Litigating Subdivisions, determine what amount they would have been paid from the Contingency Fee Fund if they had become Participating Subdivisions under the Teva Agreement or the Allergan Agreement without such prior settlement. That sum, rather than being paid to the Attorney for the previously settling Litigating Subdivision, shall be credited and/or returned to Teva or Allergan as if determined under (a)(ii) abov e, except that such credit shall not be greater than the amount paid to the Attorneys under the Litigating Subdivision’s prior settlement agreement and credits apply equally over the Fee Payment Years.

6. During the period between the Preliminary Agreement D ate and the Effective Date, the MDL PEC, as well as Litigating Subdivisions’ Attorneys, shall make best efforts to cease litigation activity against Teva and Allergan, including by jointly seeking stays or severance of claims against Teva and Allergan, where feasible, or postponements if a motion to stay or sever is not feasible or is denied, so long as such actions are not otherwise detrimental to the Litigating Subdivision.

G. Eligibility.

1. It is the intention of all parties participating in the Fee Panel pr ocess that there should be total transparency to the Fee Panel and to all fund participants. In connection with the process to be developed by the Fee Panel, any and all monies in attorney’s fees received or awarded, including prior or future Contingency Fees, Common Benefit Fees, referral fees, expenses paid, promises for payment, or any other Fee Entitlement, to any Applicant in any opioid litigation shall be disclosed to the Fee Panel as a condition of participating in the Attorney Fee Fund and prior to an award from the Fee Panel. Any payment, expectation of payment or perceived entitlement to participate in a State Back -Stop Agreement or any other agreement reached with a Settling State or any Subdivision or any other source regarding payment of fees must be disclosed to the Fee Panel.

Similarly, any right to payment from any other fund, for example a fund for payment to lawyers representing Settling States or Tribal Nations or Subdivisions shall be disclosed to the Fee Panel. Because it is anticipat ed that there will be multiple firms listed on contingent fee agreements with Litigating Subdivisions, the Fee Panel shall establish procedures, with input from Attorneys for Participating Litigating Subdivisions, for who should petition for fees from such groups and to whom the fee shall be paid and thereafter distributed to co -counsel in accordance with applicable agreements. For the avoidance of doubt, all Attorneys that are part of such groups must meet the eligibility criteria in paragraph III.G.3, mu st be subject to the criteria set forth in subsection III.C, and must be disclosed to the Fee Panel.

2. An Applicant may apply for and recover attorneys’ fees from the Common Benefit Fund, the Contingency Fee Fund, and any fund created by a past or

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future St ate Back -Stop Agreement, provided the Applicant satisfies the requirements relevant to each such fund and requirements for disclosure to the Fee Panel.

3. An Attorney may not receive any payment from the Attorney Fee Fund (which includes both the Contingency Fee Fund and the Common Benefit Fund) unless the following eligibility criteria are met and annually certified by the Attorney:
a. The Attorney must expressly waive the enforcement against the Litigating Subdivision client of all Fee Entitlements (other than under State Back-Stop Agreements) arising out of or related to any or all Qualifying Representations of any Participating Litigating Subdivision prior to applying for attorneys’ fees from the Attorney Fee Fund. All applications for attorneys’ fees under this Fee Agreement shall include an affirmation by the Attorney of such waiver and notice to the client(s) of such waiver. Such waiver shall not preclude the Attorney from submitting such Fee Entitlements to the Fee Panel as a factor for consideration in allocating payments from the Attorney Fee Fund or in connection with a State Back-Stop Agreement. For the avoidance of doubt, no Attorney may recover fees under this Fee Agreement unless the Attorney expressly agrees not to enforce Fee Entitlements as to each and every Participating Litigating Subdivision represented by that Attorney, but such Attorneys may participate in and receive funds from a State Back - Stop Agreement.
b. The Attorney must represent that s/he has no present intent to represent or participate in the representation of any Later Litigating Subdivision or Later Litigating State with respect to Released Claims against Released Entities.
c. The Attorney must represent that s/he has not and will not engage in any advertising or solicitation relat ed to Released Claims against Released Entities where such advertising or solicitation relates to a representation of a Subdivision eligible to be a Participating Subdivision after the Reference Date unless the Attorney is recommending participation in the Agreement.
d. The Attorney must represent s/he will not charge or accept any referral fees for any Released Claims brought against Released Entities by Later Litigating Subdivisions or Later Litigating States.

This representation shall not prohibit Attorne ys from receiving allocated shares of any future common benefit assessments arising out of settlements or judgments with Later Litigating Subdivisions or Later Litigating States that are the result of the MDL Court’s Common Benefit order.

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e. The Attorney may not have and must represent that s/he does not have a Fee Entitlement related to a Later Litigating Subdivision or Later Litigating State, other than a potential Common Benefit Fee. f. The Attorney must fully disclose the participation, or the anticipation of participation, in any agreement with a Settling State or Participating Subdivision concerning fees arising out of or related to the Teva Agreement or Allergan Agreement, including any fees paid or anticipated to be paid or any State Back-Stop Agreement. g. The Attorney must identify for the Fee Panel whether s/he utilized state litigation work product or MDL work product, including but not limited to ARCOS data, document repositories, experts developed in the MDL, trial transcripts, or deposition transcripts.

The Attorney must identify whether s/he signed the MDL
Participation Agreement.
h. Any Attorney who applies for fees from one or both Funds must represent that, having exercised his/her independent judgment, s/he believes the Teva Agreement and the Allergan Agreement to be fair and will make or has made best efforts to recommend both Agreements to his or her Subdivision clients in Settling States. For avoidance of doubt, each Attorney is expected to exercise his or her independent judgment in the best interest of each client individually before determining whether to recommend joining the settlement.

All applications for attorneys’ fees or costs under this subsection shall include an affirmation by the Attorney in compliance with the foregoing subparagraphs.

4. No Attorney receiving fees under this Fee Agreement may apply for or recover from the Attorney Fee Fund fees arising from representing a Non - Participating Subdivision except Common Benefit Fees as described in paragraph III.E.2. All applications for attorneys’ fees under this subsection shall include an affirmation by the Attorney of compliance with this paragraph.

5. An Attorney who has filed an application under this subsection and received an award of attorneys’ fees shall provide a certification of compliance with the requirements of this Fee Agreement annually during the years upon which they are still entitled to receive attorneys’ fee payments under this Agreement. This certification will be done as directed by the Panel.

6. If, at any time, the Attorney is unable to make the representations set forth in this subsection, such representations become untrue, or the A ttorney falsely represents compliance with the eligibility criteria, the Attorney shall cease to be eligible to receive funds from the Attorney Fee Fund until further

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review by the Fee Panel of the Attorney’s eligibility under and compliance with this subsection.

7. If an Attorney has a Fee Entitlement with a Later Litigating Subdivision or Later Litigating State or otherwise becomes unable to reaffirm compliance with the eligibility criteria set forth above, the Attorney shall notify the Fee Panel. For the avoidance of doubt, any Attorney who undertakes any new representation of, or has a Fee Entitlement with, a Later Litigating Subdivision or Later Litigating State shall be prohibited from receiving any future funds from the Attorney Fee Fund. If an Attorney fails to notify the Fee Panel of such Fee Entitlement with a Later Litigating Subdivision or Later Litigating State, the Attorney shall be required to refund amounts previously paid. The Fee Panel shall notify Teva and Allergan when it receives notification.

8. To the extent an Attorney who has received compensation from the Attorney Fee Fund based on Qualifying Representations of Participating Litigating Subdivisions under the Teva Agreement or the Allergan Agreement, represents a Later Litigating Subdi vision or Later Litigating State, such Attorney shall be obligated to refund su ch amounts received as compensation from the Attorney Fee Fund to Teva or Allergan. Teva, Allergan, or such Attorney may bring any dispute as to whether such Attorney shall be obligated to refund such amounts received from the Attorney Fee Fund to Allergan or Teva to the Fee Panel. Nothing herein shall require a multi-attorney law firm that has received compensation from the Attorney Fee Fund to refund such amounts if an attorney of the firm that is no longer affiliated with such law firm, after such departure, represents a Later Litigating Subdivision or Later Litigating State, provided that (a) neither the law firm nor any of its other attorneys have any contractual or financial arrangement regarding, stand to benefit directly or indirectly from, or directly or indirectly provide financial or other support of any kind to, the former attorney’s representation of the Later Litigating Subdivision or Later Litigating State and (b) if the former attorney was a partner or owner of the multi -attorney law firm at the time that the law firm received compensation from the Attorney Fee Fund, the former attorney shall be obligated to refund such amounts as the former attorney earned as a re sult of the compensation that the law firm received from the Attorney Fee Fund.

9. In the event that an Attorney is deemed ineligible by the Fee Panel (whether based on its initial application or subsequent recertification), the Fee Panel shall provide notice to the Attorney and give the Attorney 30 days to provide additional information such that the Fee Panel could re -consider the Attorney’s eligibility.

10. To the extent that an Attorney has a Fee Entitlement with a Participating Subdivision and is authorized t o bring Released Claims against Released Entities, but such authorization is, in scope, less broad than the category of

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Released Claims set forth in the Teva Agreement or Allergan Agreement, such Attorney may participate fully in both the Contingency Fee F und and the Common Benefit Fund, without any reduction imposed by the Fee Panel due to the scope of the authorization, so long as the Participating Subdivision fully releases all Released Claims against Released Entities.

11. Attorneys applying to the Attorney Fee Fund knowingly and expressly agree to be bound by the decisions of the Fee Panel, subject to the limited appeal rights set forth in this Fee Agreement, and waive the ability to assert the lack of enforceability of the allocation reached through the pr ocedures outlined herein.

12. Applicants are under an ongoing obligation to inform the Fee Panel in writing of any additional fees earned, expected, or received related to any Opioid litigation throughout the period of the Fee Panel’s operation.

H. Calculation of Amounts Due.

1. The Fee Panel shall be solely responsible for determining the amount of fees to be paid to each Applicant. None of the Released Entities shall have any responsibility, obligation, or liability of any kind whatsoever with respect to how attor neys’ fees are calculated under this subsection, except that the Fee Panel may receive information from Teva or Allergan as to (a) the identity of Participating, Non-Participating, Litigating, Later Litigating, and Non-Litigating Subdivisions; (b) the impa ct of non -participation by a Litigating Subdivision as is relevant to the Fee Panel’s determination in paragraph III.E.6; and (c) such other information as Teva or Allergan may voluntarily elect to provide.

2. The Fee Panel shall establish procedures for maki ng determinations under this Fee Agreement consistent with this Fee Agreement and orders of the MDL Court. Such procedures may include submission of documentary and/or other evidence, interviews with Applicants and/or other counsel (including counsel for Teva and Allergan) that the Fee Panel deems appropriate, and/or other means of creating a record upon which fee awards will be based.

3. In making determinations under this Fee Agreement, the Fee Panel must apply the eligibility criteria set forth in subsect ion III.G of this Fee Agreement and the criteria set forth in paragraph III.E.2. In addition, the Fee Panel will give consideration in regard to Common Benefit Fund awards to the Johnson factors, as well as the following factors (which factors may be appl ied and given relative weight in the Fee Panel’s discretion):
a. The Applicant’s contemporaneously recorded time and labor dedicated to Qualifying Representations along with the Applicant’s

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financial commitment to such Qualifying Representations. Claimed “time” will not be automatically accepted by the Fee Panel but will be critically reviewed and given substantially more weight and consideration if such time was subject to the audit process described in any Pretrial Order(s) governing the collection of common benefit time;
b. The novelty, time, and complexity of the Qualifying
Representations;
c. The skill requisite to perform legal services properly and undesirability of the case;
d. The preclusion of other employment by the Applicant due to time dedicated to Qualifying Representations;
e. The Common Benefit, if any, alleged to have been conferred by the Applicant and whether such Common Benefit work product by that Applicant was used by others in parallel litigations against Released Entities whether within or outside the MDL, provided that any Applicant claiming that s/he substantially benefited cases other than those in which s/he entered an appearance as counsel must substantiate such claims by proffering factual support, such as proper supporting affidavits or other documents as determined by the Fee Panel with input from Attorneys for Participating Litigating Subdivisions;
f. Any “common detriment,” as set forth in paragraph III.E.6. g. Any contingent fee agreement or other Fee Entitlement with Participating Subdivisions, enforcement of which, except for State Back-Stop Agreements, are waived in conjunction with the application, the nature and extent of any work for those Participating Subdivisions, whether such Participating Subdivisions actively litigated and, if so, the nature and procedural history of such case(s); h. The experience, reputation, and ability of the Applicant; i. Whether the Applicant’s clients brought Released Claims against Released Entities;
j. The status of discovery in cases primarily handled by the Applicant; k. The nature of any work by the Applicant on “bellwether” cases or cases that were similarly active in litigation;

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l. Any pressure points successfully asserted by the Applicant in cases against Teva or Allergan or any risk for Teva or Allergan created by the Applicant in cases against them;
m. Any risk for defendants created by Applicants in cases against Teva or Allergan;
n. Successful and unsuccessful motion practice in cases worked on by the Applicant;
o. The date of filing of any cases filed by the Applicant; p. Obtaining consolidation of the litigation in the Applicant’s jurisdiction;
q. The number and population of entities represented by the Applicant and the fees that would have been awarded under extinguished contingent fee arrangements;
r. Whether the Applicant’s clients brought claims against Teva or Allergan;
s. Whether the Applicant has had a leadership role in the litigation, whether in state or federal court;
t. Whether the Applicant has had a leadership role in any negotiations aimed at resolving the litigation;
u. Whether the Applicant’s cases have survived motions to dismiss; v. The extent to which the Applicant contributed to the work product used for the common benefit of opioids litigants, including, without limitation, work on ARCOS data, Pr escription Data Monitoring Programs, IQVIA data, depositions, document production and analysis experts, motions, briefs and pleadings, trial preparations, and trials;
w. The extent to which litigation was done prior to and contributed to completion of settlement negotiations, as distinct from litigation that was done litigating after the announcement of the Teva Agreement or Allergan Agreement, such latter litigation both being of less value and potentially resulting a common detriment to the settlement process; and
x. Any other factors that the Fee Panel finds to be appropriate to consider after input from Applicants to the Attorney Fee Fund.

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4. In the event that States and Subdivisions enter into an additional global settlement with a party or parties other than Teva or Allergan that is (a) under the jurisdiction of the MDL Court in MDL No. 2804, (b) creates a separate common benefit fund to be administered by the Fee Panel, and (c) unless the parties agree to another date, such agreement has an effective date prior to June 30, 2023, the Fee Panel may:
a. Consolidate the Common Benefit approval process to include evaluation of all Common Benefit Applications for all settlements entered after November 14, 2022;
b. Determine the fair and equitable allocation of the Aggre gate Common Benefit Fees that come after November 14, 2022;
c. Give consideration to the amount and timing of each settlement, including the amount and timing of Common Benefit Fees; d. The Fee Panel shall abide by the applicable Attorney Fee Agreement in each of the Settlements in Allocating the Common Benefit Fees provided for in the Settlement; and
e. Be guided in their work by the Orders of the Court related to Fees and Costs.

5. The Fee Panel shall develop procedures for receiving a single application, which may be updated or amended based on new information (such as participation by additional Litigating Subdivisions) from each Applicant seeking compensation from each sub fund of the Attorney Fee Fund pursuant to processes and procedures developed by the Fee Panel, which shall not be inconsistent with this Fee Agreement . Any request for attorneys’ fees not included on the single application or through the updating/amendment process designed by the Fee Panel shall be deemed waived. For purposes of transparency and to permit the Fee Panel to conduct its work, the application from each Applicant shall, at a minimum, require each Applicant to:
a. Identify all Litigating Subdivisions for which s/he is seeking payment from the Attorney Fee Fund;
b. Identify all Subdivisions in both Settling and Non -Settling States (and, where appl icable, Tribal Nations) with respect to which s/he has a Fee Entitlement with respect to Relevant Claims against Released Entities, and identify all co-counsel in such cases; c. Identify which of those Subdivisions are Participating Subdivisions and which are not (with similar information for Tribal Nations, where applicable);

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d. Specify the specific fund or funds within the Attorney Fee Fund from which the Attorney is seeking compensation;
e. Demonstrate his or her eligibility for compensation from the relevant sub funds within the Attorney Fee Fund pursuant to the criteria set forth for the relevant sub fund;
f. Identify any and all Fee Entitlements from representations of States, Tribal Nations, or other plaintiffs related to Released Claims against Released Entities or in opioids-related matters;
g. Notwithstanding “a -f” above, the Panel may consider a supplemental application if the Applicant shows good cause why circumstances exist that will lead to consideration for additional Common Benefit award. Examples would in clude, but are not limited to, an Applicant having Non -Participating Litigating Subdivision clients that subsequently become Participating Subdivisions, a Bar Date passes that increases participation or the Participation Tier, or an Allocation Agreement is reached.

6. With respect to the Common Benefit Fund, the Fee Panel shall (subject to any applicable MDL Court Order):
a. Review the applications of all Applicants seeking compensation from the Common Benefit Fund, including determining eligibility for each Applicant as set forth in subsection III.G.
b. Reduce, on an annual basis, Teva’s or Allergan’s payment obligations, as set forth in paragraph III.E.7. The Panel shall inform Teva or Allergan, and the MDL PEC of all such amounts and adjust payment obligations accordingly.
c. Using criteria set forth in subsections III.E and III.H, allocate amounts from the Common Benefit Fund to eligible Applicants, including payment amounts for each Payment Year. In making such allocations, the Panel shall apply the principles set forth in paragraph III.E.6 and shall allocate any reduction in t he payments specified in paragraph III.E.7 to the amounts paid to Applicants with a Common Benefit Fee Entitlement.

7. With respect to the Contingency Fee Fund, the Fee Panel shall:
a. Review the applications of all Attorneys seeking compensation from the Litigating Subdivision Fee Fund, including determining eligibility for each Attorney as set forth in subsection III.G. b. Apply the Mathematical Model in Exhibit A to this Fee Agreement.

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c. Use such allocations to reduce on an annual basis the payment obligations of Teva or Allergan to the Attorney Fee Fund as set forth in paragraph III.F.4, and distributions therefrom, and inform Teva or Allergan and the MDL PEC of all such adjustments.

8. To the extent that there is a dispute about the calculations of the Fee Panel related to the amounts that Teva or Allergan is required to pay (including application of any reductions or offsets under this Fee Agreement), such disputes shall be presented to the Fee Panel and any disputed funds be paid into/held in escrow. The Fee Panel shall resolve such disputes expeditiously, with either Party having the right to seek review from the MDL Court.

9. For purposes of determination of fee or cost awards, allocations, reductions, and possible reversions under this Fee Agreement, unless specified otherwise a Subdivision will be considered a Non-Participating Subdivision if it is not a Participating Subdivision as of the deadline for the application for the fee at issue (or, if the determination does not involve a specific application, the date on which the record for such determination closes).

10. In the event that the Fee Panel, through the use of the Mathematical Model set forth in Exhibit A, allocates funds from the Con tingency Fee Fund for an Attorney based on a Qualifying Representation of a Participating Litigating Subdivision and that Subdivision is in a Settling State in which the Consent Judgment has not been approved, such funds shall be placed into escrow until the Consent Judgment is approved, after which time they shall be released.

I. Miscellaneous.

1. The Fee Panel shall charge an hourly rate approved by the Court. The Pre- Effective Date costs associated with the Cost and Expense Fund Administrator shall be paid from funds in the Cost Fund. Post -Effective Date, the cost of the Fee Panel shall be charged against the applicable Fee Fund based on allocation by the Fee Panel and shall not be otherwise funded by Teva and Allergan.

2. The MDL PEC shall provide to Teva and Allergan information they have that identifies Attorneys who represent Litigating Subdivisions who are not Participating Subdivisions and who have an obligation to pay a common benefit assessment, either due to the MDL Court’s orders or pursuant to a Participation Agreement.

3. Participating Subdivisions agree to instruct their counsel to treat information, work product and expert materials as confidential under Rule

1.6 of the ABA Model Rules of Professional Conduct. Accordingly, an Attorney shall not share information or work product with, or experts or

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materials to, non-participants (other than the Attorney’s own current clients or their lawyers, consultants, experts or other representatives or agents).

However, nothing herein shall prevent MDL Leadership or PEC Counsel from fulfilling their obligations in any MDL and the MDL Court Order.

IV. Miscellaneous
A. Termination. If the Teva Agreement or Allergan Agreement does not proceed past the Reference Date, whether because Teva and Allergan do not determine t o proceed or for any other reason, this Fee Agreement shall be null and void, neither Teva nor Allergan shall have any obligation to make any payments under this Fee Agreement other than Fee Panel costs advanced, and Teva, Allergan, and the PEC shall take such steps as are necessary to restore the status quo ante.

B. MDL Court Consideration. This Fee Agreement shall be attached as an exhibit to the Teva Agreement and Allergan Agreement. This Fee Agreement shall also be submitted by Teva, Allergan, and the MDL PEC to the MDL Court for approval pursuant to the motion and order that shall be a ttached, prior to the Preliminary Agreement Date of the Agreements, as Exhibit B.

1. In the event that the MDL Court, through an order, makes any change to the amounts potentially to be paid by Teva and Allergan under this Fee Agreement, makes any change to the Fee Panel’s consideration of the factors set forth in paragraph III.E.6, or any other material change to the draft Order attached as part of Exhibit B or the terms of this Fee Agreement, Teva, Allergan, and the MDL PEC shall meet and confer concerning such changes.

2. If Teva, Allergan, and the MDL PEC are unable to reach agreement and revisions to this Fee Agreement, this Fee Agreement shall be null and void, Teva and Allergan shall have no obligation to make any payments under this Fee Agreement, and Teva, Allergan, and the MDL PEC shall take such steps as are necessary to restore the status quo ante.

C. Amendment. Once the MDL Court has entered an order implementing this Fee Agreement, this Fee Agreement can only be amended by (1) written agreement of Teva, Allergan, and the MDL PEC and (2) approval by the MDL Court.

D. Jurisdiction and Enforcement. The MDL Court shall have exclusive and ongoing jurisdiction over the enforcement and implementation of this Fee Agreement as set forth herein. The MDL PEC shall be the Authorized Party to enforce this Fee Agreement, as to the payment obligations of Teva and Allergan as set forth in this subsection and as to Attorneys making application to the Funds under this Fee Agreement. Solely for purposes of assessing or allocating common benefit fees, the MDL Court will continue to have jurisdiction over the work product developed in the MDL Court by and under the direction of the MDL PEC with respect to claims against Teva or Allergan, including data and documents, depositions, expert

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reports, briefs and pleadings; and the MDL Court’s protective orders, management orders, and other decisions regarding such discovery and other work product, including but not limited to, conditions on its use, will continue in full force and effect. Nothing in this subsection authorizes the MDL Court to act contrary to this Agreement or provides the MDL Court with jurisdiction over the Teva Agreement or Allergan Agreement.

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EXHIBIT S
Agreement on the State Outside Counsel Fee Fund for Manufacturer Settlements

1. Definitions.

a. “Manufacturer” means any of Teva and Allergan, and “Manufacturers” means all of the foregoing.
b. “Multistate Manufacturer Settlement Agreement ” means This Settlement Agreement along with the separate settlement of opioids -related claims among 30 or more states and the other Manufacturer.
c. “This Settlement Agreement” means the settlement agreement between the Settling States and the Manufacturer t o which this Agreement is attached as an Exhibit.
d. “Settling Manufacturer” means the Manufacturer that is a party to This Settlement Agreement.
e. “Settling States ” has the meaning given such term in the relevant Multistate Manufacturer Settlement Agreement.

2. Creation of a State Outside Counsel Manufacturers Fee Fund. The Settling States have agreed to the creation of a state outside counsel fee fund to pay reasonable attorneys’ fees of Settling States which have retained outside counsel in connection with litigation against one or more Manufacturers (such fund, the “ State Outside Counsel Manufacturers Fee Fund”).

3. State Outside Counsel Manufacturers Fee Fund Administration. The State Outside Counsel Manufacturers Fee Fund shall be administered separately from any other funds for the payment of attorney ’s fees or costs in connection with This Settlement Agreement, including any common benefit fund, contingency fee fund for subdivision counsel, state cost fund, or MDL expense fund. If necessary, a committee of Attorneys General shall be convened to oversee the State Outside Counsel Manufacturers Fee Fund (the “ Manufacturers Fee Fund Committee”). The Manufacturers Fee Fund Committee shall be appointed by the Settling State Members of the Enforcement Committee and shall be comprised solely of Attorneys General of Settling States that engaged outside counsel to pursue litigation against one or more Manufacturers. The Settlement Fund Administrator (the “ Fee Fund Administrator ”) shall administer the State Outside Counsel Manufacturers Fee Fund according to this Exhibit and, if convened, the guidelines and directives of the Manufacturers Fee Fund Committee.

4. State Outside Counsel Manufacturers Fee Eligibility.

a. To receive any amount from the State Outside Counsel Manufacturers Fee Fund, both of the following must be true:

1. an outside counsel to a Settling State must have filed and maintained an action in the name of a Settling State or its Attorney General against a Manufacturer in a state or federal court as of November 1, 2022; and

2. the State must become a Settling State for each Multistate Manufacturer Settlement Agreement for which it is eligible.

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b. No Settling Stat e (or its outside counsel) shall receive funds from both the State Outside Counsel Manufacturers Fee Fund and any “Additional Restitution Amount” as may be provided for in This Settlement Agreement. c. In addition to the eligibility criteria set forth in Paragraph 4.a, above, and for the avoidance of doubt, only Settling States under This Settlement Agreement are eligible to receive any funds paid into the State Outside Counsel Manufacturers Fee Fund as a result of This Settlement Agreement.

5. State Outside Counsel Manufacturers Fee Fund Amount. The Settling Manufacturer shall pay funds into the State Outside Counsel Manufacturers Fee Fund in an amount equal to, and on the schedule identified in, Exhibit M (the “ Contribution”). The Settling Manufacturer’s Contribution shall be subject to a reduction as described in Paragraph 8, below.

6. State Outside Counsel Manufacturers Fee Fund Availability and Calculation of Amount.

a. The State Outside Counsel Manufacturers Fee Fund shall be available to compensate private outside counsel for Settling State Attorneys General for approved fees arising out of representation of the Settling State pursuant to the schedule attached to this agreement as Schedule I (the “Fee Schedule”). b. The Fee Schedule is intended to reflect the fee calculation in subparagraphs

6.c and d, below (the “Fee Calculation”). Subject to adjustments required by Paragraph 8, below, in the event of any discrepancy between the Fee Schedule and the Fee Calculation, the Fee Schedule shall control. Each Settling State, by becoming a Participating State in This Settl ement Agreement, agrees that the Fee Schedule reflects the Fee Calculation and waives any right to contest the accuracy of the Fee Schedule, absent manifest error, the exclusion of a Settling State, or the inclusion of a Non -Settling State. The version of the Fee Schedule reflecting any necessary adjustments shall be the “Final Fee Schedule.”
c. Except as provided in Paragraph d, below, fees shall be aggregated across the Multistate Manufacturer Settlement Agreements and be calculated by adding two components: (a) a fixed amount consisting of fifty percent (50%) of the amount of remediation funds allocated to a Settling State and its Subdivisions pursuant to the Multistate Manufacturer Settlement Agreements multiplied by 4.5% (or, if lower, the applicable contingency fee percentage in the Settling State’s outside counsel contract) ; and (b) a proportional percentage of the remaining fee due under that Settling State’s contract with its outside counsel assuming that fifty percent (50% ) of the Settling State’s recovery is allocable to a Settling State (rather than allocable to the Settling State’s Participating Subdivisions) so that the fees of all eligible Settling States (minus the fixed amount that would have been allocated to any No n-Settling States had they become Settling States) exhausts the State Outside Counsel Manufacturers Fee Fund. The proportional share percentage will be the same for each Settling State

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included in the State Outside Counsel Manufacturers Fee Fund. Except as set forth in Paragraph 6.c, fees shall be split proportionally among each Multistate Manufacturer Settlement Agreement, as set forth on the Fee Schedule.
d. Notwithstanding the foregoing, fees for the State of Oklahoma, if it becomes a Settling State under the Multistate Manufacturer Settlement Agreement with Allergan, shall be limited to Oklahoma’s share of the State Outside Counsel Manufacturers Fee Fund derived from Allergan’s Contribution.

Oklahoma’s share of the State Outside Counsel Manufacturers Fee Fund derived from Teva’s Contribution shall be reallocated proportionally among the other Settling States eligible to receive payments from the State Outside Counsel Manufacturer Fee Fund.
e. All amounts paid will be less the following:

1. Any costs or fees of the Fee Fund Administrator. The Fee Schedule reflects a holdback amount of $50,000 for such administrative expenses of the Fee Fu nd Administrator, the remainder of which shall be disbursed proportionally to States receiving monies from the State Outside Counsel Manufacturers Fee Fund at the conclusion of such administration.

7. Payment by the Fee Fund Administrator.

a. The Fee Fund Administrator shall hold the Contribution in escrow until the earlier of (1) both Multistate Manufacturer Settlement Agreements become effective or (2) when instructed by the Settling State Members of the Enforcement Committee.
b. Subject to eligibility pursua nt to Paragraph 4, above, a Settling State’s outside counsel may receive funds from the State Outside Counsel Manufacturers Fee Fund in the following scenarios (“Payment Scenarios”):

1. The Settling State’s outside counsel agrees that the amount listed for such state on the Final Fee Schedule either satisfies in full or exceeds the amounts owed to all such Settling State’s outside counsel and such counsel has provided written notice waiving all entitlement to additional fee in respect of any Multistate Manufacturer Settlement Agreement.

2. The Settling State and its outside counsel enter into a signed writing establishing the amount owed to the counsel , which includes an agreement on the payment of the amount listed for such state on the Final Fee Schedule and waives any right of the State or its outside counsel to additional amounts from the State Outside Counsel Manufacturers Fee Fund.

3. A final judgmen t is entered that is no longer appealable, which judgement adjudicates the amount owed to the Settling State’s counsel in respect of This Settlement Agreement and directs the Manufacturers Fee Fund Committee how to pay the amount listed on the Final Fee Schedule for such State.

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If no Payment Scenario is applicable with respect to a Settling State, then the Settling State’s share shall be placed in an interest -bearing escrow account (less reasonable expenses of the Fee Fund Administrator) and held unless and until a Payment Scenario is applicable.
c. Upon the applicability of a Payment Scenario 1 with respect to a Settling State, the Fee Fund Administrator shall pay that Settling State’s outside counsel the amount identified on the Final Fee Schedule for such st ate or such lesser amount that satisfies the Settling State’s obligation to its outside counsel in full. Any remaining allocation to such State shall be paid to the Settling State.
d. Upon the applicability of a Payment Scenario 2 or 3 with respect to a Settling State, the Fee Fund Administrator shall release monies from the State Outside Counsel Manufacturers Fee Fund in either the amount held by the Fee Fund Administrator, if the amount of the agreement or judgment is equal to or more than the amount held, or the amount indicated in the agreement or in the final judgment, if the amount in the agreement or judgment is less than the amount held.
e. Nothing herein, including the amounts listed in Paragraph 5 above or on any Fee Schedule, shall prevent a Settling State from arguing in any proceeding with its outside counsel that (i) its recovery was le ss than fifty percent (50%) of the recovery in the settlement agreement down to and including fifteen percent (15%) of the total recovery; (ii) any payment should be discounted by an appropriate discount rate commensurate to the risk of the settlement agre ement and the timeline that the Settling State is receiving its payments; (iii) the settlement amount should be lower because the amount a Settling State receives was reduced because such Settling State’s outside counsel failed to obtain joinder from a Set tling State’s Subdivision(s) that the outside counsel also represented; or (iv) any limitation placed by the Settling Manufacturer bars payment of a higher fee to outside counsel. f. In the event the amount due to the Settling State’s outside counsel from an escrow account is less than the total amount of funds escrowed on the account of the Settling State, the balance shall be paid to the Settling State. In no event, other than a State becoming a Non-Settling State, shall funds revert to a Manufacturer.

8. Non-Settling States; Reversion and Redistribution. Amounts owed by the Settling Manufacturer to the State Outside Counsel Manufacturers Fee Fund shall be reduced by amounts allocated to the fixed amount for such State under This Settlement Agreement in the event that a listed State becomes a Non-Settling State. The payments for the other Settling States reflected in the Fee Schedule shall be adjusted by the Fee Fund Administrator to reflect a recalculated proportional percentage under the Fee Calculation.

9. Interpretation.

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a. This Agreement shall be an Exhibit to each Multistate Manufacturer Settlement Agreement and shall include the Fee Schedule setting forth the presumptive payment calculations for each eligible Settling State. By joining This Settlement Agreement, each State agrees on the presumptive accuracy of the Fee Schedule, absent manifest error, the inclusion of a Non -Settling State, or the exclusion of a Settling State.
b. It is the intent of all parties that the State Outside Counsel Manufacturers Fee Fund function in a similar manner, with similar calculations and mechanics, as the “State Outside Counsel Fee Fund” established in Exhibit S of that certain settlement agreement dated as of July 21, 2021 setting forth the terms of settlement between an d among McKesson Corporation, Cardinal Health, Inc., and AmerisourceBergen Corporation, on the one hand, and certain settling states and certain participating subdivisions, on the other hand.

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Schedule I
Fee Schedule

State
Total Fee

Allergan Share Teva Share
Alaska $1,252,625.36 $424,966.99 $827,658.36
Delaware $2,194,254.56 $744,425.11 $1,449,829.45
Georgia $6,557,324.06 $2,224,644.65 $4,332,679.41
Hawaii $1,272,349.43 $431,658.60 $840,690.83
Idaho $1,413,869.58 $479,670.88 $934,198.70
Kentucky $5,087,998.16 $1,726,159.60 $3,361,838.56 Mississippi $1,737,202.53 $589,365.16 $1,147,837.38 Nevada
$6,279,564.47 $2,130,411.64 $4,149,152.83
New Mexico
$5,218,189.24 $1,770,328.36 $3,447,860.88
Ohio $6,831,882.94 $2,317,791.78 $4,514,091.16
Oklahoma $1,470,349.73 $1,470,349.73 $-
Puerto Rico $4,823,581.25 $1,636,453.24 $3,187,128.01 South Dakota $673,251.45 $228,408.00 $444,843.46

Admin Expense
Holdbacks
$18,047.03 $31,952.97
Total $16,192,680.76 $28,669,762.00

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EXHIBIT T
Agreement on the Joint State Cost Fund

1. Definitions.
a. “Opioids Defendant ” means Teva, Allergan, or such other defendant in opioids-related litigation that enters into a Multistate Settlement after November 1, 2022, and “Opioids Defendants” means all of the foregoing. b. “Multistate Settlement ” means this Settlement Agreement along with any other settlement of opioids -related claims among 30 or more states and an Opioids Defendant.
c. “Settlement Agreement ” means the settlement agreement between the Settling States and the Opioids Defendant to which this Agreement is attached as an Exhibit.
d. “Settling Opioids Defendant” means the Opioids Defendant that is a party to the Settlement Agreement.
e. “Settling States ” has the meaning given such term in the Settlement Agreement.

2. Creation of a State Cost Fund. The Settling Opioids Defendant and the Settling States agree to the creation of a fund to pay costs and expenses associated with litigation and investigations related to the opioids litigation (such fund, the “ State Cost Fund ”). The State Cost Fund shall be administered separately from any other funds for the payment of attorneys fees or costs in connection with the Settlement Agreement, including any common benefit fund, contingency fee fund for subdivision counsel, subdivision cost fund, or MDL expense fund.

However, the State Cost Fund shall be administered jointly with similar “State Cost Funds” created in other Multistate Settlements after November 1, 2022; any state cost funds jointly administered in this manner shall be referred to as the “ Joint State Cost Fund.” To the extent permissible and feasible, the Joint State Cost Fund may also be jointly administered with any fund for reimbursement of states’ litigation and investigation costs established by a bankruptcy plan, including the Mallinckrodt bankrupt cy plan, any plans that may emerge from the bankruptcies of Purdue and Endo, and any similar bankruptcies of opioids defendants. To the extent feasible, the Joint State Cost Fund may also be jointly administered with the State Cost Funds established pursuant to the Distributors Multistate Settlement and the Janssen Multistate Settlement.

3. State Cost Fund Amount. The Settling Opioids Defendant shall pay into the State Cost Fund in the amount listed on, and on the schedule set forth in, Exhibit M (the “Settling Opioids Defendant’s Contribution”) for the purpose paying States’ costs and expenses associated with to the opioid litigation.

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4. Joint State Cost Fund Committee. A committee of Attorneys General or their designated representatives (such committee, the “ Joint State Cost Fund Committee ”) shall oversee the Joint State Cost Fund. The committee shall be appointed by the Settling State Members of the Enforcement Committee, who shall aim to (i) have equal representation between states that retained contingency fe e outside counsel and states that did not retain contingency fee outside counsel with respect to opioids -related litigation, and (ii) maintain consistency of committee membership across state cost funds that compose the Joint State Cost Fund. The Settling State Members of the Enforcement Committee may by majority vote add to or change the composition of the Joint State Cost Fund Committee.

5. Joint State Cost Fund Administrator.
a. The Joint State Cost Fund Committee may select an administrator (the “Joint State Cost Fund Administrator”), who shall administer the Joint State Cost Fund and direct payments to Settling States according to the guidelines and directives of the Joint State Cost Fund Committee. While the expenses of the Joint State Cost Fund Administrator shall be reimbursable pursuant to the principles and guidelines listed below, the Joint State Cost Fund Administrator shall first rely on any separate funds that may be set aside for such purpose in any Multistate Settlement.
b. The Joint State Cost Fund Administrator shall be responsible, under the direction and supervision of the Joint State Cost Fund Committee, for receiving and reviewing applications for reimbursement from the Joint State Cost Fund. This may include the creation of an audit process to ensure the integrity of submissions, as well as reimbursement rules to incentivize accurate submissions.

6. State Cost Fund Guidelines and Principles.
a. Monies in the State Cost Fund shall be released without any delay to reimburse Settling States for documented costs incurred or paid in connection with litigation and investigation related to the opioid litigation. b. In allocating the Joint State Cost Fund, the Joint State Cost Fund Committee shall seek to comply with the following principles:

1. Each State Cost Fund should be used to reimburse costs incurred by States that are Settling States in the Multistate Settlement from which funds are paid. (However, the foregoing sentence does not preclude a Non -Settling State that joins a separate Multistate Settlement from participating in the Joint State Cost Fund with respect to contributions made by other Opioids Defendants.)

2. Funds in any State Cost Fu nd shall be primarily used to reimburse

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costs incurred prior to the date on which the relevant Multistate Settlement was first made available for participation to eligible States. Regardless of other factors considered in prioritizing payments, all costs incurred prior to January 1, 2023, shall be paid before any costs incurred after that date are paid.

3. The Joint State Cost Fund shall prioritize the reimbursement of the following over reimbursement of any State’s litigation or investigation costs:
• the reas onable costs of the Joint State Cost Fund
Administrator;
• repayment of National Association of Attorneys General grants made in connection with opioid investigations and litigation, without regard to when the grants were made; • repayment of state -attributable costs of any mediator in connection with negotiations of a Multistate Settlement;

4. The Joint State Cost Fund shall seek to prioritize costs in the following order:
• litigation-related costs; then
• investigation-related costs; then
• settlement and negotiation related costs; then
• cost shares.

5. Costs incurred by a State’s outside counsel that the State is contractually obligated to reimburse shall be treated as costs incurred by a State.

6. As between similar categories of costs (e.g., defendant -specific litigation-related costs), the Joint State Cost Fund shall first reimburse costs incurred by a State’s outside counsel that the State is contractually obligated to reimburse out of its recovery, and then reimburse costs directly incurred by States.

7. The Joint State Cost Fund shall be available to reimburse only those costs which have not yet been reimbursed to a State from any other source, including any other fund set aside in a Multistate Settlement or bankruptcy plan for the reimbursement of costs or any individual

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state settlements.

8. The Joint State Cost Fund should not reimburse expenses that are expected to be reimbursed from another source, such as a bankruptcy debtor, unless such expected reimbursements do not come to fruition within a reasonable amount of time. This includes cost shares paid by states.

9. When coordinating among different state cost funds that each could be used to reimburse a given expense, the Joint State Cost Fund Committee may set guidelines to equitably distribute
reimbursements across all state cost funds in a manner that prioritizes costs unlikely to be otherwise reimbursed to a similarly situated State.

10. The Joint State Cost Fund may deny reimbursement of costs, on either an individual basis or a categorical basis, that a supermajority (75%+) of the Joint State Cost Fund Committee determines to be unreasonable.

11. After all costs identified in the foregoing have been reimbursed, the remaining funds in the Joint State Cost Fund shall be distributed to states in proportion to their allocation of remediation payments in the Mallinckrodt bankruptcy plan. Such distribution shall be treated as a reimbursement for States’ unenumerated costs of administering the Multistate Settlements and no subdivision shares shall be carved out of such disbursement, nor shall any attorney’s fees be assessed against such distribution (unless individually agreed to by a State). c. In applying the foregoing principles, the Joint State Cost Fund Committee shall have the discretion to vary their application in order to ensure equity among similarly situated states and to facilitate the ease and speed of administering the Joint State Cost Fund. The Joint State Cost Fund Committee may also apply percentages to approximate costs attributable to a particular Opioids Defenda nt (or categories of Opioids Defendants) in a manner that seeks to treat similarly situated states equitably. d. The Joint State Cost Fund Committee shall establish guidelines for the submission and approval of expenses eligible for reimbursement from the Joint State Cost Fund, which guidelines may be coordinated and consolidated with any similar cost funds in other state opioid settlements for purposes of joint administration and efficiency.
e. Unless waived by the Joint State Cost Fund Committee, the Joint State Cost

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Fund Administrator shall, in accordance with such guidelines, receive from Settling States records sufficient to demonstrate the incurrence and payment of each expense.
f. Where the Joint State Cost Fund Committee determines by a supermajority vote (75%+) that outside counsel for a Settling State has failed to exercise reasonable diligence in reviewing submitted costs for allowability, and such failure has resulted in the reimbursement of unallowed costs to such outside counsel, the Committee shall have the discretion to reduce or recover payments made to such outside counsel in an amount calculated to incentivize the exercise of reasonable diligence.

7. State Undertakings. Each State submitting for reimbursement of costs from the Joint State Cost Fund agrees:
a. to only submit costs allowable under this Joint State Cost Fund Agreement; b. to provide all back-up documentation that may be requested with respect to any submitted cost and to make itself available for any questions related to such costs;
c. to exerci se reasonable diligence to ensure that all submitted costs are allowable under (i) this Joint State Cost Fund Agreement, (ii) the State’s contract with its outside counsel, if relevant, (iii) state law, and (iv) the policies and procedures applicable to the State’s retention of outside counsel, if relevant; and
d. to promptly return any excess payments made to the State or its outside counsel from the Joint State Cost Fund, including payments made for costs that were reimbursed from another source or are not allowable hereunder.

1 Proposed California State-Subdivision Agreement
Regarding Distribution and Use of
Settlement Funds – Distributor Settlement

1. Introduction

Pursuant to the Distributor Settlement Agreement, dated as of July 21, 2021, and any revision thereto (the “Distributor Settlement Agreement”), including Section V and Exhibit O, the State of California proposes this agreement (the “CA Distributor Allocation Agreement”) to govern the allocation, distribution, and use of Settlement Fund payments made to California pursuant to Sections IV and V of the Distributor Settlement Agreement.1 For the avoidance of doubt, this agreement does not apply to payments made pursuant to Sections IX or X of the Distributor Settlement Agreement.

Pursuant to Exhibit O, Paragraph 4, of the Distributor Settlement Agreement, acceptance of this CA Distributor Allocation Agreement is a requirement to be an Initial Participating Subdivision.

2. Definitions

a) CA Participating Subdivision means a Participating Subdivision that is also (a) a Plaintiff Subdivision and/or (b) a Primary Subdivision with a population equal to or greater than 10,000. For the avoidance of doubt, eligible CA Participating Subdivisions are those California subdivisions listed in Exhibit C (excluding Litigating Special Districts) and/or Exhibit I to the Distributor Settlement Agreement. b) Janssen Settlement Agreement means the Janssen Settlement Agreement dated July 21, 2021, and any revision thereto.
c) Litigating Special District means a school district, fire protection district, health authority, health plan, or other special district that has filed a lawsuit against an Opioid Defendant. Litigating Special Districts include Downey Unified School District, Elk Grove Unified School District, Kern High School District, Montezuma Fire Protection District (located in Stockton, California), Santa Barbara San Luis Obispo Regional Health Authority, Inland Empire Health Plan, Health Plan of San Joaquin, and LA Care Health Plan.
d) Plaintiff Subdivision means a Subdivision located in California, other than a Litigating Special District, that filed a lawsuit, on behalf of the Subdivision and/or through an official of the Subdivision on behalf of the People of the State of California, against one or more Opioid Defendants prior to October 1, 2020.

1 A parallel but separate agreement (the “CA Janssen Allocation Agreement”) will govern the allocation, distribution, and use of settlement fund payments under the Janssen Settlement Agreement. An eligible Subdivision may elect to participate in either the Distributor Settlement or the Janssen Settlement, or in both.

2 e) Opioid Defendant means any defendant (including but not limited to Johnson & Johnson, Janssen Pharmaceuticals, Inc., Purdue Pharma L.P., Cardinal Health, Inc., AmerisourceBergen Corporation, and McKesson Corporation) named in a lawsuit seeking damages, abatement, or other remedies related to or caused by the opioid public health crisis in any lawsuit brought by any state or local government on or before October 1, 2020.

3. General Terms

This agreement is subject to the requirements of the Distributor Settlement Agreement, as well as applicable law, and the Distributor Settlement Agreement governs over any inconsistent provision of this CA Distributor Allocation Agreement. Terms used in this CA Distributor Allocation Agreement have the same meaning as in the Distributor Settlement Agreement unless otherwise defined herein.

Pursuant to Section V(D)(1) of the Distributor Settlement Agreement, (a) all Settlement Fund payments will be used for Opioid Remediation, except as allowed by Section V(B)(2) of the Distributor Settlement Agreement; and (b) at least seventy percent (70%) of Settlement Fund payment amounts will be used solely for future Opioid Remediation.

4. State Allocation

The Settlement Fund payments to California,
2 pursuant to the Distributor Settlement Agreement,
shall be allocated as follows: 15% to the State Fund; 70% to the Abatement Accounts Fund; and 15% to the Subdivision Fund. For the avoidance of doubt, all funds allocated to California from the Settlement Fund shall be combined pursuant to this CA Distributor Allocation Agreement, and 15% of that total shall be allocated to the State of California (the “State of California Allocation”), 70% to the California Abatement Accounts Fund (“CA Abatement Accounts Fund”), and 15% to the California Subdivision Fund (“CA Subdivision Fund”).

A. State of California Allocation

Fifteen percent of the total Settlement Fund payments will be allocated to the State and used by the State for future Opioid Remediation.

B. CA Abatement Accounts Fund

i. Allocation of CA Abatement Accounts Funds

a) Seventy percent of the total Settlement Fund payments will be allocated to the CA Abatement Accounts Fund. The funds in the CA Abatement Accounts Fund will be

2 For purposes of clarity, use of the term “California” refers to the geographic territory of California and the state and its local governments therein. The term “State” or “State of California” refers to the State of California as a governmental unit.

3 allocated based on the allocation model developed in connection with the proposed negotiating class in the National Prescription Opiate Litigation (MDL No. 2804), as adjusted to reflect only those cities and counties that are eligible, based on population or litigation status, to become a CA Participating Subdivision. The percentage from the CA Abatement Accounts Fund allocated to each CA Participating Subdivision is set forth in Appendix 1 in the column entitled abatement percentage (the “Local Allocation”). For the avoidance of doubt, Litigating Special Districts and California towns, cities, and counties with a population less than 10,000 are not eligible to receive an allocation of CA Abatement Accounts Funds.

b) A CA Participating Subdivision that is a county, or a city and county, will be allocated its Local Allocation share as of the date on which it becomes a Participating Subdivision, and will receive payments as provided in the Distributor Settlement Agreement.

c) A CA Participating Subdivision that is a city will be allocated its Local Allocation share as of the date on which it becomes a Participating Subdivision. The Local Allocation share for a city that is a CA Participating Subdivision will be paid to the county in which the city is located, rather than to the city, so long as: (a) the county is a CA Participating Subdivision, and (b) the city has not advised the Settlement Fund Administrator that it requests direct payment at least 60 days prior to a Payment Date. A Local Allocation share allocated to a city but paid to a county is not required to be spent exclusively for abatement activities in that city, but will become part of the county’s share of the CA Abatement Accounts Funds, which will be used in accordance with Section 4.B.ii (Use of CA Abatement Accounts Funds) and reported on in accordance with Section 4.B.iii (CA Abatement Accounts Fund Oversight).

d) A city within a county that is a CA Participating Subdivision may opt in or out of direct payment at any time, and it may also elect direct payment of only a portion of its share, with the remainder going to the county, by providing notice to the Settlement Fund Administrator at least 60 days prior to a Payment Date. For purposes of this CA Distributor Allocation Agreement, the Cities of Los Angeles, Oakland, San Diego, San Jose and Eureka will be deemed to have elected direct payment if they become Participating Subdivisions.

e) The State will receive the Local Allocation share of any payment to the Settlement Fund that is attributable to a county or city that is eligible to become a CA Participating Subdivision, but that has not, as of the date of that payment to the Settlement Fund, become a Participating Subdivision.

f) Funds received by a CA Participating Subdivision, and not expended or encumbered within five years of receipt and in accordance with the Distributor Settlement Agreement and this CA Distributor Allocation Agreement shall be transferred to the State; provided however, that CA Participating Subdivisions have seven years to expend or encumber CA Abatement Accounts Funds designated to support capital outlay projects before they must be transferred to the State. This provision shall not apply to the Cost Reimbursement Funds, which shall be controlled by Appendix 2.

4 ii. Use of CA Abatement Accounts Funds

a) The CA Abatement Accounts Funds will be used for future Opioid Remediation in one or more of the areas described in the List of Opioid Remediation Uses, which is Exhibit E to the Distributor Settlement Agreement.

b) In addition to this requirement, no less than 50% of the funds received by a CA Participating Subdivision from the Abatement Accounts Fund in each calendar year will be used for one or more of the following High Impact Abatement Activities:

(1) the provision of matching funds or operating costs for substance use disorder facilities within the Behavioral Health Continuum Infrastructure Program;

(2) creating new or expanded Substance Use Disorder (“SUD”) treatment infrastructure;

(3) addressing the needs of communities of color and vulnerable populations (including sheltered and unsheltered homeless populations) that are disproportionately impacted by SUD;

(4) diversion of people with SUD from the justice system into treatment, including by providing training and resources to first and early responders (sworn and non-sworn) and implementing best practices for outreach, diversion and deflection, employability, restorative justice, and harm reduction; and/or

(5) interventions to prevent drug addiction in vulnerable youth.

c) The California Department of Health Care Services (“DHCS”) may add to this list (but not delete from it) by designating additional High Impact Abatement Activities. DHCS will make reasonable efforts to consult with stakeholders, including the CA Participating Subdivisions, before adding additional High Impact Abatement Activities to this list.

d) For the avoidance of doubt, and subject to the requirements of the Distributor Settlement Agreement and applicable law, CA Participating Subdivisions may form agreements or ventures, or otherwise work in collaboration with, federal, state, local, tribal or private sector entities in pursuing Opioid Remediation activities funded from the CA Abatement Accounts Fund. Further, provided that all CA Abatement Accounts Funds are used for Opioid Remediation consistent with the Distributor Settlement Agreement and this CA Distributor Allocation Agreement, a county and any cities or towns within the county may agree to reallocate their respective shares of the CA Abatement Accounts Funds among themselves, provided that any direct distribution may only be to a CA Participating Subdivision and any CA Participating Subdivision must agree to their share being reallocated.

5 iii. CA Abatement Accounts Fund Oversight

a) Pursuant to Section 5 below, CA Participating Subdivisions receiving settlement funds must prepare and file reports annually regarding the use of those funds. DHCS may regularly review the reports prepared by CA Participating Subdivisions about the use of CA Abatement Accounts Funds for compliance with the Distributor Settlement Agreement and this CA Distributor Allocation Agreement.

b) If DHCS determines that a CA Participating Subdivision’s use of CA Abatement Accounts Funds is inconsistent with the Distributor Settlement Agreement or this CA Distributor Allocation Agreement, whether through review of reports or information from any other sources, DHCS shall send a request to meet and confer with the CA Participating Subdivision. The parties shall meet and confer in an effort to resolve the concern.

c) If the parties are unable to reach a resolution, DHCS may conduct an audit of the Subdivision’s use of the CA Abatement Accounts Funds within one year of the request to meet and confer, unless the parties mutually agree in writing to extend the meet and confer time frame.

d) If the concern still cannot be resolved, the State may bring a motion or action in the court where the State has filed its Consent Judgment to resolve the concern or otherwise enforce the requirements of the Distributor Settlement Agreement or this CA Distributor Allocation Agreement. However, in no case shall any audit be conducted, or motion be brought, as to a specific expenditure of funds, more than five years after the date on which the expenditure of the funds was reported to DHCS, in accordance with this agreement.

e) Notwithstanding the foregoing, this Agreement does not limit the statutory or constitutional authority of any state or local agency or official to conduct audits, investigations, or other oversight activities, or to pursue administrative, civil, or criminal enforcement actions.

C. CA Subdivision Fund

i. Fifteen percent of the total Settlement Fund payments will be allocated to the CA Subdivision Fund. All funds in the CA Subdivision Fund will be allocated among the Plaintiff Subdivisions that are Initial Participating Subdivisions. The funds will be used, subject to any limits imposed by the Distributor Settlement Agreement and this CA Distributor Allocation Agreement, to fund future Opioid Remediation and reimburse past opioid-related expenses, which may include fees and expenses related to litigation, and to pay the reasonable fees and expenses of the Special Master as set forth in Appendix 2.

6 The CA Subdivision Funds will be allocated as follows:

a) First, funds in the CA Subdivision Fund shall be used to pay the Special Master’s reasonable fees and expenses in accordance with the procedures and limitations set forth in Appendix 2 to this document;

b) Second, funds will be allocated to Plaintiff Subdivisions that are Initial Participating Subdivisions that have been awarded Costs, as defined by and in accordance with the procedures and limitations set forth in Appendix 2 to this document.

c) Funds remaining in the CA Subdivision Fund, which shall consist of no less than 50% of the total CA Subdivision Fund received in any year pursuant to Appendix 2, Section 2.c.v, will be distributed to Plaintiff Subdivisions that are Initial Participating Subdivisions, in relative proportion to the Local Allocation. These funds shall be used to fund future opioid-related projects and to reimburse past opioid-related expenses, which may include fees and expenses related to litigation against any Opioid Defendant.

D. Provision for State Back-Stop Agreement
On August 6, 2021, Judge Dan Polster of the U.S. District Court, Northern District of Ohio, Eastern Division, issued an order (ECF Docket Number 3814) (“MDL Fees Order”) in the National Prescription Opiate Litigation (MDL No. 2804) “cap[ping] all applicable contingent fee agreements at 15%.” Private counsel representing Plaintiff Subdivisions should seek its contingency fees and costs from the Attorney Fee Fund or Cost Funds under the Distributor Settlement Agreement and, if applicable, the Janssen Settlement Agreement.

A Plaintiff Subdivision may separately agree to use its share of the CA Subdivision Fund to pay for fees or costs incurred by its contingency-fee counsel (“State Back-Stop Agreement”), pursuant to Exhibit R, section I(R), of the Distributor Settlement Agreement and the MDL Fees Order, so long as such contingency fees do not exceed a total contingency fee of 15% of the total gross recovery of the Plaintiff Subdivision pursuant to the Distributor Settlement, and if applicable, the Janssen Settlement, inclusive of contingency fees from the national Attorney Fee Fund and this State Back-Stop Agreement. Before seeking fees or litigation costs and expenses from a State Back-Stop Agreement, private counsel representing Plaintiff Subdivisions must first seek contingency fees and costs from the Attorney Fee Fund or Cost Funds created under the Distributor Settlement Agreement and, if applicable, the Janssen Settlement Agreement. Further, private counsel may only seek reimbursement for litigation fees and costs that have not previously been reimbursed through prior settlements or judgments.

To effectuate a State Back-Stop Agreement pursuant to this section, an agreement in the form of Appendix 3 may be entered into by a Plaintiff Subdivision, private counsel, and the California Office of the Attorney General. The California Office of the Attorney General shall, upon the request of a Plaintiff Subdivision, execute any agreement executed by a Plaintiff Subdivision and its private counsel if it is in the form of Appendix 3. The California Office of the Attorney

7 General will also consider requests from Plaintiff Subdivisions to execute and enter into agreements presented in other forms.

For the avoidance of doubt, this agreement does not require a Plaintiff Subdivision to request or enter into a State Back-Stop Agreement, and no State Back-Stop Agreement shall impose any duty or obligation on the State of California or any of its agencies or officers, including without limitation the Attorney General.

5. State and Subdivision Reporting

a) DHCS will prepare an annual written report regarding the State’s use of funds from the settlement until those funds are fully expended and for one year thereafter. These reports will be made publicly available on the DHCS web site.

b) Each CA Participating Subdivision that receives payments of funds from the settlement will prepare written reports at least annually regarding the use of those funds, until those funds are fully expended and for one year thereafter. These reports will also include a certification that all funds that the CA Participating Subdivision has received through the settlement have been used in compliance with the Distributor Settlement Agreement and this CA Distributor Allocation Agreement. The report will be in a form reasonably determined by DHCS. Prior to specifying the form of the report DHCS will confer with representatives of the Plaintiff Subdivisions.

c) The State and all CA Participating Subdivisions receiving CA Abatement Accounts Funds will track all deposits and expenditures. Each such subdivision is responsible solely for the CA Abatement Accounts Funds it receives. A county is not responsible for oversight, reporting, or monitoring of CA Abatement Accounts Funds received by a city within that county that receives direct payment. Unless otherwise exempt, Subdivisions’ expenditures and uses of CA Abatement Accounts Funds and other Settlement Funds will be subject to the normal budgetary and expenditure process of the Subdivision.

d) Each Plaintiff Subdivision receiving CA Subdivision Funds will track all deposits and expenditures, as required by the Distributor Settlement Agreement and this CA Distributor Allocation Agreement. Among other things, Plaintiff Subdivisions using monies from the CA Subdivision Fund for purposes that do not qualify as Opioid Remediation must identify and include in their annual report, the amount and how such funds were used, including if used to pay attorneys’ fees, investigation costs, or litigation costs. Pursuant to Section V(B)(2) of the Distributor Settlement Agreement, such information must also be reported to the Settlement Fund Administrator and the Distributors.

e) In each year in which DHCS prepares an annual report DHCS will also host a meeting to discuss the annual report and the Opioid Remediation activities being carried out by the State and Participating Subdivisions.

8 6. Miscellaneous

a) The State or any CA Participating Subdivision may bring a motion or action in the court where the State has filed its Consent Judgment to enforce the requirements of this CA Distributor Allocation Agreement. Before filing such a motion or action the State will meet and confer with any CA Participating Subdivision that is the subject of the anticipated motion or action, and vice versa.

b) Except as provided in the Distributor Settlement Agreement, this CA Distributor Allocation Agreement is not enforceable by any party other than the State and the CA Participating Subdivisions. It does not confer any rights or remedies upon, and shall not be enforceable by, any third party.

c) Except as provided in the CA Distributor Allocation Agreement, if any provision of this agreement or the application thereof to any person, entity, or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this agreement, or the application of such provision to persons, entities, or circumstances other than those as to which it is invalid or unenforceable, will not be affected thereby, and each other provision of this agreement will be valid and enforceable to the fullest extent permitted by law.

d) Except as provided in the Distributor Settlement Agreement, this agreement shall be governed by and interpreted in accordance with the laws of California.

APPENDIX 1

DISCLAIMER: The allocation percentages herein are estimates only and should not be relied on for decisions regarding legal rights, releases, waivers, or other decisions affecting current or potential legal claims. Percentages shown in the Plaintiff Subdivision Percentage column may change pursuant to Section 4.C. of the California State-Subdivision Agreement Regarding Distribution and Use of Settlement Funds—Distributor Settle ment, whereas the percentages shown in the Abatement Percentage column should not change. Participating Subdivisions, underlying calculations, and the calculated allocation percentages are subject to change. Regarding the column herein entitled “Abatement Percentage,” pursuant to Section 4.B.e., the State of California will receive the Local Allocation share of any payment to the Settlement Fund that is attributable to a county or city that is eligible to become a CA Participating Subdivision, but that has not, as of the date of that payment to the Settlement Fund, become a Participating Subdivision.

Regarding the column herein entitled “Plaintiff Subdivision Percentage,” payments allocated to a Plaintiff Subdivision, which is not an Initial Participating Subdivision, will be re-allocated among the Plaintiff Subdivisions that are Initial Participating Subdivisions.

Regarding the column herein entitled “Abatement Percentage,” the annotation of “100%” refers to one-hundred percent (100%) of the California Abatement Account Funds received, pursuant to Section 4.B. Regarding the column herein entitled “Plaintiff Subdivision Percentage,” the annotation of “100%” refers to one-hundred percent (100%) of the California Subdivision Funds received, pursuant to Section 4.C. Regarding the column herein entitled “Weighted Allocation Percentage,” the annotation of “100%” refers to one- hundred percent (100%) of the combined and weighted allocation of the Abatement Percentage and the Plaintiff Subdivision Percentage.

APPENDIX 1
100.000% 100.000% 100.000%
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
County Alameda County Alameda 2.332% 2.853% 2.4237952%
City Alameda Alameda 0.069% 0.0570162%
City Albany Alameda 0.013% 0.0107768%
City Berkeley Alameda 0.152% 0.1249656%
City Dublin Alameda 0.033% 0.040% 0.0338810%
City Emeryville Alameda 0.023% 0.0185765%
City Fremont Alameda 0.108% 0.0888576%
City Hayward Alameda 0.117% 0.0966218%
City Livermore Alameda 0.054% 0.0446740%
City Newark Alameda 0.026% 0.0217626%
City Oakland Alameda 0.486% 0.595% 0.5055601%
City Piedmont Alameda 0.014% 0.0114064%
City Pleasanton Alameda 0.067% 0.0554547%
City San Leandro Alameda 0.039% 0.0321267%
City Union City Alameda 0.043% 0.0352484%
County Amador County Amador 0.226% 0.277% 0.2349885%
County Butte County Butte 1.615% 1.975% 1.6783178%
City Chico Butte 0.216% 0.264% 0.2246499%
City Oroville Butte 0.079% 0.0646595%
County Calaveras County Calaveras 0.226% 0.277% 0.2351644% County Colusa County Colusa 0.059% 0.0489221%
County Contra Costa County Contra Costa 2.102% 2.571% 2.1844585% City Antioch Contra Costa 0.037% 0.0301879%
City Brentwood Contra Costa 0.026% 0.0215339%
City Clayton Contra Costa 0.002% 0.0018060%
City Concord Contra Costa 0.055% 0.0456676%
City Danville Contra Costa 0.010% 0.0082255%
City El Cerrito Contra Costa 0.023% 0.0189024%
City Hercules Contra Costa 0.010% 0.0078273%
1 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
City Lafayette Contra Costa 0.006% 0.0046030%
City Martinez Contra Costa 0.012% 0.0098593%
City Moraga Contra Costa 0.004% 0.0031007%
City Oakley Contra Costa 0.010% 0.0079416%
City Orinda Contra Costa 0.005% 0.0038157%
City Pinole Contra Costa 0.013% 0.0110909%
City Pittsburg Contra Costa 0.053% 0.0436369%
City Pleasant Hill Contra Costa 0.013% 0.0106309%
City Richmond Contra Costa 0.146% 0.1201444%
City San Pablo Contra Costa 0.018% 0.0148843%
City San Ramon Contra Costa 0.021% 0.0176459%
City Walnut Creek Contra Costa 0.026% 0.0212132%
County Del Norte County Del Norte 0.114% 0.140% 0.1189608% County El Dorado County El Dorado 0.768% 0.939% 0.7980034% City Placerville El Dorado 0.015% 0.0127642%
City South Lake Tahoe El Dorado 0.081% 0.0665456%
County Fresno County Fresno 1.895% 2.318% 1.9693410%
City Clovis Fresno 0.065% 0.0536211%
City Coalinga Fresno 0.012% 0.0098554%
City Fresno Fresno 0.397% 0.3270605%
City Kerman Fresno 0.005% 0.0042534%
City Kingsburg Fresno 0.008% 0.0066167%
City Mendota Fresno 0.002% 0.0019387%
City Orange Cove Fresno 0.004% 0.0035607%
City Parlier Fresno 0.008% 0.0069755%
City Reedley Fresno 0.012% 0.0098804%
City Sanger Fresno 0.018% 0.0146135%
City Selma Fresno 0.015% 0.0127537%
County Glenn County Glenn 0.107% 0.131% 0.1116978%
County Humboldt County Humboldt 1.030% 1.260% 1.0703185% 2 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
City Arcata Humboldt 0.054% 0.0447660%
City Eureka Humboldt 0.117% 0.143% 0.1216284%
City Fortuna Humboldt 0.032% 0.0266837%
County Imperial County Imperial 0.258% 0.315% 0.2679006% City Brawley Imperial 0.011% 0.0087986%
City Calexico Imperial 0.019% 0.0152799%
City El Centro Imperial 0.158% 0.1302522%
City Imperial Imperial 0.006% 0.0048791%
County Inyo County Inyo 0.073% 0.089% 0.0754413%
County Kern County Kern 2.517% 3.079% 2.6159145%
City Arvin Kern 0.006% 0.0046425%
City Bakersfield Kern 0.212% 0.1747198%
City California City Kern 0.009% 0.0070820%
City Delano Kern 0.030% 0.0249316%
City McFarland Kern 0.003% 0.0025644%
City Ridgecrest Kern 0.015% 0.0120938%
City Shafter Kern 0.013% 0.0103417%
City Tehachapi Kern 0.009% 0.0073580%
City Wasco Kern 0.008% 0.0069861%
County Kings County Kings 0.293% 0.2413469%
City Avenal Kings 0.007% 0.0056335%
City Corcoran Kings 0.013% 0.0107032%
City Hanford Kings 0.027% 0.0226038%
City Lemoore Kings 0.016% 0.0131900%
County Lake County Lake 0.795% 0.6545389%
City Clearlake Lake 0.041% 0.050% 0.0426253%
City Lakeport Lake 0.021% 0.026% 0.0222964%
County Lassen County Lassen 0.319% 0.391% 0.3320610%
City Susanville Lassen 0.027% 0.0219295%
County Los Angeles County Los Angeles 13.896% 16.999% 14.4437559% 3 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
City Agoura Hills Los Angeles 0.005% 0.0040024%
City Alhambra Los Angeles 0.042% 0.0343309%
City Arcadia Los Angeles 0.033% 0.0267718%
City Artesia Los Angeles 0.001% 0.0005100%
City Azusa Los Angeles 0.026% 0.0210857%
City Baldwin Park Los Angeles 0.027% 0.0218520%
City Bell Los Angeles 0.008% 0.0068783%
City Bellflower Los Angeles 0.002% 0.0014485%
City Bell Gardens Los Angeles 0.014% 0.0114301%
City Beverly Hills Los Angeles 0.065% 0.0534897%
City Burbank Los Angeles 0.100% 0.0823132%
City Calabasas Los Angeles 0.006% 0.0048948%
City Carson Los Angeles 0.019% 0.0159805%
City Cerritos Los Angeles 0.005% 0.0039682%
City Claremont Los Angeles 0.010% 0.0082584%
City Commerce Los Angeles 0.000% 0.0002971%
City Compton Los Angeles 0.044% 0.0361882%
City Covina Los Angeles 0.028% 0.0229127%
City Cudahy Los Angeles 0.001% 0.0006020%
City Culver City Los Angeles 0.055% 0.0449894%
City Diamond Bar Los Angeles 0.001% 0.0006993%
City Downey Los Angeles 0.052% 0.0429994%
City Duarte Los Angeles 0.003% 0.0027261%
City El Monte Los Angeles 0.031% 0.038% 0.0318985%
City El Segundo Los Angeles 0.033% 0.0268020%
City Gardena Los Angeles 0.034% 0.0278088%
City Glendale Los Angeles 0.166% 0.1366586%
City Glendora Los Angeles 0.016% 0.0134411%
City Hawaiian Gardens Los Angeles 0.005% 0.0040549%
City Hawthorne Los Angeles 0.050% 0.0407833%
4 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
City Hermosa Beach Los Angeles 0.018% 0.0145307%
City Huntington Park Los Angeles 0.023% 0.0190667%
City Inglewood Los Angeles 0.059% 0.0489195%
City La Cañada Flintridge Los Angeles 0.003% 0.0025565% City Lakewood Los Angeles 0.005% 0.0039971%
City La Mirada Los Angeles 0.010% 0.0081572%
City Lancaster Los Angeles 0.045% 0.0369689%
City La Puente Los Angeles 0.002% 0.0012999%
City La Verne Los Angeles 0.024% 0.0194190%
City Lawndale Los Angeles 0.002% 0.0017731%
City Lomita Los Angeles 0.004% 0.0031940%
City Long Beach Los Angeles 0.439% 0.3614151%
City Los Angeles Los Angeles 2.715% 3.321% 2.8218811%
City Lynwood Los Angeles 0.016% 0.0134345%
City Malibu Los Angeles 0.002% 0.0019269%
City Manhattan Beach Los Angeles 0.032% 0.0260686%
City Maywood Los Angeles 0.004% 0.0035528%
City Monrovia Los Angeles 0.031% 0.0254455%
City Montebello Los Angeles 0.030% 0.0250670%
City Monterey Park Los Angeles 0.031% 0.0256677%
City Norwalk Los Angeles 0.031% 0.0258228%
City Palmdale Los Angeles 0.046% 0.0375827%
City Palos Verdes Estates Los Angeles 0.006% 0.0053102% City Paramount Los Angeles 0.011% 0.0091483%
City Pasadena Los Angeles 0.146% 0.1200524%
City Pico Rivera Los Angeles 0.022% 0.0183333%
City Pomona Los Angeles 0.111% 0.0911933%
City Rancho Palos Verdes Los Angeles 0.002% 0.0012645%
City Redondo Beach Los Angeles 0.062% 0.0506992%
City Rosemead Los Angeles 0.003% 0.0028260%
5 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
City San Dimas Los Angeles 0.003% 0.0022016%
City San Fernando Los Angeles 0.013% 0.0104837%
City San Gabriel Los Angeles 0.018% 0.0147726%
City San Marino Los Angeles 0.009% 0.0073791%
City Santa Clarita Los Angeles 0.022% 0.0178167%
City Santa Fe Springs Los Angeles 0.031% 0.0257531%
City Santa Monica Los Angeles 0.158% 0.1298513%
City Sierra Madre Los Angeles 0.006% 0.0048646%
City Signal Hill Los Angeles 0.010% 0.0084884%
City South El Monte Los Angeles 0.005% 0.0039603%
City South Gate Los Angeles 0.020% 0.0166272%
City South Pasadena Los Angeles 0.012% 0.0095334%
City Temple City Los Angeles 0.005% 0.0039498%
City Torrance Los Angeles 0.112% 0.0919820%
City Walnut Los Angeles 0.006% 0.0047305%
City West Covina Los Angeles 0.049% 0.0404521%
City West Hollywood Los Angeles 0.013% 0.0108517%
City Whittier Los Angeles 0.032% 0.0260581%
County Madera County Madera 0.349% 0.427% 0.3630669%
City Chowchilla Madera 0.012% 0.0097332%
City Madera Madera 0.039% 0.0318441%
County Marin County Marin 0.564% 0.690% 0.5861325%
City Larkspur Marin 0.015% 0.0124697%
City Mill Valley Marin 0.020% 0.0168401%
City Novato Marin 0.028% 0.0229824%
City San Anselmo Marin 0.009% 0.0078062%
City San Rafael Marin 0.089% 0.0729823%
County Mariposa County Mariposa 0.084% 0.103% 0.0876131% County Mendocino County Mendocino 0.439% 0.536% 0.4558394% City Ukiah Mendocino 0.039% 0.0317153%
6 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
County Merced County Merced 0.551% 0.674% 0.5724262%
City Atwater Merced 0.024% 0.0195846%
City Livingston Merced 0.006% 0.0045873%
City Los Banos Merced 0.020% 0.0165142%
City Merced Merced 0.061% 0.0500762%
County Modoc County Modoc 0.065% 0.080% 0.0678250%
County Mono County Mono 0.023% 0.029% 0.0242606%
County Monterey County Monterey 0.908% 1.111% 0.9437083% City Greenfield Monterey 0.006% 0.0050552%
City King City Monterey 0.005% 0.0037355%
City Marina Monterey 0.017% 0.0144098%
City Monterey Monterey 0.041% 0.0336540%
City Pacific Grove Monterey 0.009% 0.0074842%
City Salinas Monterey 0.094% 0.0776576%
City Seaside Monterey 0.023% 0.0191772%
City Soledad Monterey 0.007% 0.0060870%
County Napa County Napa 0.288% 0.352% 0.2994325%
City American Canyon Napa 0.017% 0.0136869%
City Napa Napa 0.078% 0.0642783%
County Nevada County Nevada 0.441% 0.539% 0.4579827%
City Grass Valley Nevada 0.024% 0.0197805%
City Truckee Nevada 0.003% 0.0023843%
County Orange County Orange 4.364% 5.339% 4.5363576%
City Aliso Viejo Orange 0.014% 0.0113841%
City Anaheim Orange 0.554% 0.678% 0.5759282%
City Brea Orange 0.086% 0.0708897%
City Buena Park Orange 0.087% 0.0714352%
City Costa Mesa Orange 0.124% 0.152% 0.1288366%
City Cypress Orange 0.033% 0.0271937%
City Dana Point Orange 0.001% 0.0005560%
7 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
City Fountain Valley Orange 0.055% 0.0455980%
City Fullerton Orange 0.137% 0.168% 0.1425744%
City Garden Grove Orange 0.213% 0.1752482%
City Huntington Beach Orange 0.247% 0.302% 0.2568420%
City Irvine Orange 0.139% 0.170% 0.1442350%
City Laguna Beach Orange 0.047% 0.058% 0.0493043%
City Laguna Hills Orange 0.014% 0.0115457%
City Laguna Niguel Orange 0.001% 0.0007071%
City Laguna Woods Orange 0.001% 0.0006546%
City La Habra Orange 0.060% 0.073% 0.0621049%
City Lake Forest Orange 0.012% 0.0101249%
City La Palma Orange 0.012% 0.0095439%
City Los Alamitos Orange 0.008% 0.0069190%
City Mission Viejo Orange 0.014% 0.0117560%
City Newport Beach Orange 0.179% 0.1470134%
City Orange Orange 0.150% 0.1231320%
City Placentia Orange 0.029% 0.035% 0.0298912%
City Rancho Santa Margarita Orange 0.001% 0.0006296%
City San Clemente Orange 0.008% 0.010% 0.0086083%
City San Juan Capistrano Orange 0.008% 0.0065510%
City Santa Ana Orange 0.502% 0.614% 0.5213866%
City Seal Beach Orange 0.020% 0.0165891%
City Stanton Orange 0.035% 0.0291955%
City Tustin Orange 0.073% 0.0600341%
City Westminster Orange 0.104% 0.127% 0.1082721%
City Yorba Linda Orange 0.044% 0.0362223%
County Placer County Placer 1.045% 1.278% 1.0861002%
City Auburn Placer 0.017% 0.0141114%
City Lincoln Placer 0.031% 0.0255599%
City Rocklin Placer 0.076% 0.0625485%
8 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
City Roseville Placer 0.196% 0.1616559%
County Plumas County Plumas 0.205% 0.251% 0.2128729%
County Riverside County Riverside 4.534% 5.547% 4.7128296% City Banning Riverside 0.017% 0.0143848%
City Beaumont Riverside 0.021% 0.0171135%
City Blythe Riverside 0.012% 0.0096714%
City Canyon Lake Riverside 0.000% 0.0001761%
City Cathedral City Riverside 0.067% 0.0553614%
City Coachella Riverside 0.021% 0.0173054%
City Corona Riverside 0.147% 0.1207083%
City Desert Hot Springs Riverside 0.024% 0.0200433%
City Eastvale Riverside 0.000% 0.0002747%
City Hemet Riverside 0.051% 0.0421792%
City Indio Riverside 0.056% 0.0457794%
City Jurupa Valley Riverside 0.001% 0.0008991%
City Lake Elsinore Riverside 0.021% 0.0172949%
City La Quinta Riverside 0.063% 0.0516732%
City Menifee Riverside 0.032% 0.0260909%
City Moreno Valley Riverside 0.137% 0.1130348%
City Murrieta Riverside 0.048% 0.059% 0.0497423%
City Norco Riverside 0.016% 0.0134542%
City Palm Desert Riverside 0.083% 0.0682465%
City Palm Springs Riverside 0.076% 0.0629862%
City Perris Riverside 0.009% 0.0076774%
City Rancho Mirage Riverside 0.052% 0.0431098%
City Riverside Riverside 0.268% 0.2206279%
City San Jacinto Riverside 0.010% 0.0085936%
City Temecula Riverside 0.022% 0.0180086%
City Wildomar Riverside 0.008% 0.0062500%
County Sacramento County Sacramento 3.797% 4.645% 3.9465887% 9 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
City Citrus Heights Sacramento 0.057% 0.0465312%
City Elk Grove Sacramento 0.130% 0.1066994%
City Folsom Sacramento 0.108% 0.0890850%
City Galt Sacramento 0.017% 0.0143704%
City Rancho Cordova Sacramento 0.008% 0.0067679%
City Sacramento Sacramento 0.721% 0.882% 0.7496530%
County San Benito County San Benito 0.106% 0.130% 0.1101417% City Hollister San Benito 0.027% 0.0225355%
County San Bernardino County San Bernardino 3.259% 3.987% 3.3878124% City Adelanto San Bernardino 0.008% 0.0066640%
City Apple Valley San Bernardino 0.025% 0.0207360%
City Barstow San Bernardino 0.015% 0.0122056%
City Chino San Bernardino 0.064% 0.0525893%
City Chino Hills San Bernardino 0.001% 0.0006388%
City Colton San Bernardino 0.031% 0.0253443%
City Fontana San Bernardino 0.112% 0.0920543%
City Grand Terrace San Bernardino 0.006% 0.0051051%
City Hesperia San Bernardino 0.035% 0.0291522%
City Highland San Bernardino 0.004% 0.0029061%
City Loma Linda San Bernardino 0.009% 0.0071188%
City Montclair San Bernardino 0.039% 0.0322108%
City Ontario San Bernardino 0.179% 0.1472934%
City Rancho Cucamonga San Bernardino 0.084% 0.0689431%
City Redlands San Bernardino 0.057% 0.0469150%
City Rialto San Bernardino 0.073% 0.0603206%
City San Bernardino San Bernardino 0.178% 0.1461880%
City Twentynine Palms San Bernardino 0.002% 0.0012605%
City Upland San Bernardino 0.052% 0.0424460%
City Victorville San Bernardino 0.033% 0.0269400%
City Yucaipa San Bernardino 0.016% 0.0128772%
10 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
City Yucca Valley San Bernardino 0.003% 0.0021228%
County San Diego County San Diego 5.706% 6.980% 5.9309748% City Carlsbad San Diego 0.128% 0.1050485%
City Chula Vista San Diego 0.189% 0.231% 0.1961456%
City Coronado San Diego 0.044% 0.0359095%
City El Cajon San Diego 0.113% 0.0933582%
City Encinitas San Diego 0.061% 0.074% 0.0630289%
City Escondido San Diego 0.145% 0.1192204%
City Imperial Beach San Diego 0.014% 0.0118283%
City La Mesa San Diego 0.055% 0.068% 0.0575593%
City Lemon Grove San Diego 0.022% 0.0183911%
City National City San Diego 0.080% 0.0656808%
City Oceanside San Diego 0.213% 0.1753428%
City Poway San Diego 0.062% 0.0511040%
City San Diego San Diego 1.975% 2.416% 2.0531169%
City San Marcos San Diego 0.089% 0.0733897%
City Santee San Diego 0.033% 0.0268401%
City Solana Beach San Diego 0.017% 0.0138564%
City Vista San Diego 0.052% 0.0425144%
Consolidated San Francisco San Francisco 3.026% 3.702% 3.1457169% County San Joaquin County San Joaquin 1.680% 2.055% 1.7460399% City Lathrop San Joaquin 0.009% 0.0075394%
City Lodi San Joaquin 0.053% 0.0439484%
City Manteca San Joaquin 0.054% 0.0443454%
City Ripon San Joaquin 0.013% 0.0104219%
City Stockton San Joaquin 0.313% 0.383% 0.3256176%
City Tracy San Joaquin 0.084% 0.0692047%
County San Luis Obispo County San Luis Obispo 0.816% 0.999% 0.8484126% City Arroyo Grande San Luis Obispo 0.024% 0.0199053%
City Atascadero San Luis Obispo 0.029% 0.0240680%
11 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
City El Paso de Robles (Paso Robles) San Luis Obispo 0.043% 0.0353456% City Grover Beach San Luis Obispo 0.017% 0.0137881%
City Morro Bay San Luis Obispo 0.020% 0.0160922%
City San Luis Obispo San Luis Obispo 0.077% 0.0637841%
County San Mateo County San Mateo 1.074% 1.313% 1.1159599% City Belmont San Mateo 0.021% 0.0169860%
City Burlingame San Mateo 0.019% 0.0152537%
City Daly City San Mateo 0.044% 0.0363880%
City East Palo Alto San Mateo 0.013% 0.0103982%
City Foster City San Mateo 0.020% 0.0166101%
City Half Moon Bay San Mateo 0.004% 0.0031638%
City Hillsborough San Mateo 0.013% 0.0110029%
City Menlo Park San Mateo 0.015% 0.0126209%
City Millbrae San Mateo 0.013% 0.0105836%
City Pacifica San Mateo 0.016% 0.0130625%
City Redwood City San Mateo 0.056% 0.0463511%
City San Bruno San Mateo 0.021% 0.0172161%
City San Carlos San Mateo 0.013% 0.0108885%
City San Mateo San Mateo 0.052% 0.0425841%
City South San Francisco San Mateo 0.043% 0.0353943%
County Santa Barbara County Santa Barbara 1.132% 1.385% 1.1768968% City Carpinteria Santa Barbara 0.001% 0.0008938%
City Goleta Santa Barbara 0.004% 0.0028969%
City Lompoc Santa Barbara 0.047% 0.0389379%
City Santa Barbara Santa Barbara 0.122% 0.1004559%
City Santa Maria Santa Barbara 0.058% 0.0479179%
County Santa Clara County Santa Clara 2.404% 2.941% 2.4987553% City Campbell Santa Clara 0.014% 0.0112566%
City Cupertino Santa Clara 0.008% 0.0066824%
City Gilroy Santa Clara 0.025% 0.0202891%
12 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
City Los Altos Santa Clara 0.013% 0.0103338%
City Los Gatos Santa Clara 0.013% 0.0103220%
City Milpitas Santa Clara 0.036% 0.0298120%
City Morgan Hill Santa Clara 0.015% 0.0124619%
City Mountain View Santa Clara 0.041% 0.0334608%
City Palo Alto Santa Clara 0.039% 0.0323080%
City San Jose Santa Clara 0.294% 0.360% 0.3054960%
City Santa Clara Santa Clara 0.067% 0.0549723%
City Saratoga Santa Clara 0.004% 0.0034161%
City Sunnyvale Santa Clara 0.053% 0.0434069%
County Santa Cruz County Santa Cruz 0.783% 0.957% 0.8135396% City Capitola Santa Cruz 0.020% 0.0168191%
City Santa Cruz Santa Cruz 0.143% 0.1180348%
City Scotts Valley Santa Cruz 0.015% 0.0126525%
City Watsonville Santa Cruz 0.063% 0.0520136%
County Shasta County Shasta 1.095% 1.339% 1.1380191%
City Anderson Shasta 0.024% 0.0198896%
City Redding Shasta 0.284% 0.2334841%
City Shasta Lake Shasta 0.004% 0.0031993%
County Siskiyou County Siskiyou 0.228% 0.279% 0.2373393% County Solano County Solano 0.760% 0.6260795%
City Benicia Solano 0.031% 0.0253903%
City Dixon Solano 0.016% 0.0130849%
City Fairfield Solano 0.109% 0.0897317%
City Suisun City Solano 0.021% 0.0176183%
City Vacaville Solano 0.119% 0.0976497%
City Vallejo Solano 0.167% 0.1373644%
County Sonoma County Sonoma 1.218% 1.490% 1.2661290%
City Healdsburg Sonoma 0.032% 0.0266929%
City Petaluma Sonoma 0.081% 0.0667507%
13 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
City Rohnert Park Sonoma 0.041% 0.0340759%
City Santa Rosa Sonoma 0.184% 0.1519070%
City Sonoma Sonoma 0.022% 0.0183438%
City Windsor Sonoma 0.016% 0.0129298%
County Stanislaus County Stanislaus 1.722% 1.4182273%
City Ceres Stanislaus 0.041% 0.0340260%
City Modesto Stanislaus 0.217% 0.1788759%
City Newman Stanislaus 0.006% 0.0046964%
City Oakdale Stanislaus 0.018% 0.0145531%
City Patterson Stanislaus 0.015% 0.0126590%
City Riverbank Stanislaus 0.010% 0.0085699%
City Turlock Stanislaus 0.065% 0.0531966%
County Sutter County Sutter 0.306% 0.374% 0.3179548%
City Yuba City Sutter 0.074% 0.0606242%
County Tehama County Tehama 0.213% 0.261% 0.2216654%
City Red Bluff Tehama 0.014% 0.0117771%
County Trinity County Trinity 0.082% 0.101% 0.0855476%
County Tulare County Tulare 0.809% 0.990% 0.8410949%
City Dinuba Tulare 0.014% 0.0116929%
City Exeter Tulare 0.004% 0.0032479%
City Farmersville Tulare 0.003% 0.0027879%
City Lindsay Tulare 0.007% 0.0057111%
City Porterville Tulare 0.021% 0.0171845%
City Tulare Tulare 0.037% 0.0302273%
City Visalia Tulare 0.066% 0.0545872%
County Tuolumne County Tuolumne 0.486% 0.594% 0.5047621% County Ventura County Ventura 2.192% 2.681% 2.2781201%
City Camarillo Ventura 0.002% 0.0012815%
City Fillmore Ventura 0.002% 0.0020294%
City Moorpark Ventura 0.008% 0.0067337%
14 of 15
APPENDIX 1
Participating
Subdivision
Classification
Participating Subdivision County Abatement
Percentage
Plaintiff
Subdivision
Percentage
Weighted
Allcation
Percentage
City Oxnard Ventura 0.156% 0.190% 0.1617338%
City Port Hueneme Ventura 0.021% 0.0174145%
City San Buenaventura (Ventura) Ventura 0.085% 0.0702181% City Santa Paula Ventura 0.014% 0.0119072%
City Simi Valley Ventura 0.065% 0.0533043%
City Thousand Oaks Ventura 0.022% 0.0179902%
County Yolo County Yolo 0.357% 0.437% 0.3713319%
City Davis Yolo 0.055% 0.0451747%
City West Sacramento Yolo 0.066% 0.0544321%
City Woodland Yolo 0.058% 0.0477904%
County Yuba County Yuba 0.214% 0.262% 0.2225679%
City Marysville Yuba 0.014% 0.0112079%
15 of 15

1 APPENDIX 2

Cost Reimbursement Procedure

1. Additional defined terms:

a) Costs means the reasonable amounts paid for the attorney and other City Attorney and County Counsel staff time for individuals employed by a Plaintiff Subdivision at the contractual rate, inclusive of benefits and overhead, together with amounts paid for court reporters, experts, copying, electronic research, travel, vendors, and the like, which were paid or incurred (i) prior to July 21, 2021 in litigation against any Opioid Defendant and/or (ii) in negotiating and drafting this CA Distributor Allocation Agreement. Costs does not include attorneys’ fees, costs, or expenses incurred by private contingency fee counsel. No part of the CA Abatement Accounts Fund will be used to reimburse Costs.

b) First Claims Date means October 1, 2023 or when all applications for reimbursement of Costs, in whole or in part, from funds available under Section X and Exhibit R of the Distributor Settlement Agreement or Section XI and Exhibit R of the Janssen Settlement Agreement, have been finally determined under the provisions of those agreements, whichever comes first.

c) Special Master means a retired judicial officer or former public lawyer, not presently employed or retained by a Plaintiff Subdivision, who will aggregate, review, and determine the reasonable Costs to be awarded to each Plaintiff Subdivision that submits a claim for reimbursement of Costs. The Special Master will be selected by a majority vote of the votes cast by Plaintiff Subdivisions, with each such subdivision having one vote.

d) Plaintiff Subdivision Committee means the committee of Plaintiff Subdivisions that will review and approve the invoices submitted by the Special Master reflecting his or her reasonable time and expenses.

2. Cost Reimbursement to Plaintiff Subdivision

a) Purpose. Substantial resources have been expended to hold Opioid Defendants accountable for creating and profiting from the opioid crisis, and this effort has been a significant catalyst in creating a National Opioid Settlement with Distributors, Johnson & Johnson, and others.

b) Claims Procedure.

i. If a Plaintiff Subdivision is eligible to seek reimbursement of Costs, in whole or in part, from funds available under Section X or Exhibit R of the Distributor Settlement Agreement or Section XI or Exhibit R of the Janssen Settlement Agreement, it must first make a timely application for reimbursement from such funds. To allow sufficient time for determination of those applications, no claim for

2 Costs to the CA Subdivision Fund under this Agreement may be made before the First Claims Date.

ii. A Plaintiff Subdivision that wishes to be reimbursed from the CA Subdivision Fund must submit a claim to the Special Master no later than forty-five (45) days after the First Claims Date. The Special Master will then compile and redistribute the aggregated claim totals for each Plaintiff Subdivision via email to representatives of all the Plaintiff Subdivisions. A claim for attorney and staff time must list, for each attorney or staff member included in the claim, the following information: name, title, total hours claimed, hourly rate (including, if sought, benefits and share of overhead), and narrative summarizing the general nature of the work performed by the attorney or staff member. For reimbursement of “hard” costs, the subdivision may aggregate across a category (e.g., total for travel costs). It is the intention of the Plaintiff Subdivisions that submission of documents related to reimbursement of Costs does not waive any attorney-client privilege or exemptions to the California Public Records Act.

iii. The Special Master may request, at his or her sole option, additional documents or details to assist in the final award of Costs.

iv. The Special Master will review claims for reasonableness and will notify each Plaintiff Subdivision of the final determination of its claim, and will provide a list of all final awards to all Plaintiff Subdivisions by email or, upon request, via First Class U.S. Mail. Any Plaintiff Subdivision may ask the Special Master to reconsider any final award within twenty-one (21) days. The Special Master will make a final determination on any such reconsideration request within thirty (30) days of receipt.

v. Any decision of the Special Master is final and binding, and will be considered under the California Arbitration Act, Code of Civil Procedure section 1280 et seq. as a final arbitration award. Nothing in this agreement is intended to expand the scope of judicial review of the final award for errors of fact or law, and the Parties agree that they may only seek to vacate the award if clear and convincing evidence demonstrates one of the factors set forth in Code of Civil Procedure, section 1286.2, subdivision (a). Plaintiff Subdivisions will have fourteen (14) days after all final awards are made, together with any final determination of a request for reconsideration, to seek review in the Superior Court of California, pursuant to Code of Civil Procedure, section 1285, where the State has filed its Consent Judgment.

vi. The Special Master will prepare a report of Costs that includes his or her fees and expenses at least ninety (90) days before the Payment Date for each Annual Payment. The Special Master’s preparation of a report of Costs does not discharge a Plaintiff Subdivision’s reporting requirement under Section V.B.2 of the Distributor Agreement.

vii. A member of the Plaintiff Subdivision Committee, which is a CA Participating Subdivision, will submit to the Settlement Fund Administrator and the Distributors a

3 report of the fees and expenses incurred by the Special Master pursuant to Section V.B.2 of the Distributor Agreement.

c) Claims Priority and Limitation.

i. The Special Master will submit invoices for compensation of reasonable fees and expenses to the Plaintiff Subdivision Committee no later than ninety (90) days prior to the Payment Date for each Annual Payment. The Plaintiff Subdivision Committee will promptly review and, if reasonable, approve the Special Master’s invoice for compensation. The Plaintiff Subdivision Committee will submit approved invoices to the Settlement Fund Administrator for payment. The Special Master’s approved invoices have priority and will be paid first from the CA Subdivision Fund before any award of Costs, subject to the limitation in Section 2.c.v below.

ii. Final Awards of Costs that do not exceed seventy-five thousand dollars ($75,000.00) will be paid next in priority after the Special Master’s approved invoices.

iii. Final Awards of Costs in excess of seventy-five thousand dollars ($75,000.00) will be paid proportionally from the funds remaining in that year’s Annual Payment.

iv. Any claim for Costs that is not paid in full will be allocated against the next year’s distribution from the CA Subdivision Fund, until all approved claims for Costs are paid in full.

v. In no event will more than 50% of the total CA Subdivision Fund received in any year be used to pay Costs or the Special Master’s approved invoices.

vi. In no event shall more than $28 million of the total CA Subdivision Funds paid pursuant to the Distributor Settlement Agreement and the Janssen Settlement Agreement be used to pay Costs.

d) Collateral Source Payments and Third-Party Settlement.

i. In the event a Plaintiff Subdivision is awarded compensation, in whole or in part, by any source of funds created as a result of litigation against an Opioid Defendant for its reasonable Costs, it will reduce its claim for Costs from the CA Subdivision Fund by that amount. If a Plaintiff Subdivision has already received a final award of Costs from the CA Subdivision Fund, it will repay the fund up to the prior award of Costs via a payment to the Settlement Fund Administrator or notify the Settlement Fund Administrator that its allocation from the next and subsequent Annual Payments should be reduced accordingly. If the Plaintiff Subdivision is repaying any prior award of Costs, that repayment will occur as soon as is feasible after the Plaintiff Subdivision’s receipt of Cost funds from the collateral source, but no more than 90 days after its receipt from the collateral source. The Settlement Fund Administrator will add any repaid Costs to the CA Subdivision Fund.

4 ii. In the event a Plaintiff Subdivision reaches a monetary settlement or compromise against any Opioid Defendant outside of the National Opioid Settlement, the monetary portion of such settlement, net of fees paid to outside contingency fee counsel and of funds earmarked strictly for abatement, will be credited against its Costs and the subdivision will be ineligible to recover those credited Costs from the CA Subdivision Fund. Plaintiff Subdivisions negotiating monetary settlements or compromises against any Opioid Defendant outside of the National Opioid Settlement will negotiate for funds to repay any Costs it previously received from the CA Subdivision Fund or for Costs it otherwise might be eligible to claim from the CA Subdivision Fund. If such a settlement is paid after all final approved claims for Costs by all Plaintiff Subdivisions are satisfied in full, the settling subdivision will reimburse the CA Subdivision Fund in that amount by making payment to the Settlement Fund Administrator to add to the CA Subdivision Fund in a manner consistent with the repayments described in section 2.d.i above.

APPENDIX 3

CALIFORNIA-SUBDIVISION BACKSTOP AGREEMENT

On August 6, 2021, Judge Polster of the US District Court for the Northern District of Ohio issued an Order (the Order), docket number 3814, in In Re National Prescription Opiate Litigation, MDL 2804, addressing contingent attorney fee contracts between political subdivisions eligible to participate in the Distributors Settlement and their counsel.

In light of the Order, and at the request of [SUBDIVISION], the [SUBDIVISION], its counsel [COUNSEL], and the California Attorney General, on behalf of the State of California, are entering into this California-Subdivision Backstop Agreement (Backstop Agreement).

[SUBDIVISION] and [COUNSEL] intend this Backstop Agreement to constitute a State Back- Stop Agreement as that term is used in the Order and in Exhibit R (Agreement on Attorneys’ Fees, Expenses and Costs) of the Distributor Settlement Agreement.

Pursuant to this Backstop Agreement, [SUBDIVISION] may, subject to the limitations of the Distributor Settlement Agreement and CA Distributor Allocation Agreement, as well as any other limitations imposed by law, use funds that it receives from the Distributor Settlement CA Subdivision Fund to pay a contingent fee to [COUNSEL]. Any such payment from [SUBDIVISION] to [COUNSEL], together with any contingency fees that [COUNSEL] may receive from the national Attorney Fee Fund, will not exceed a total contingency fee of [PERCENTAGE NOT TO EXCEED 15%] of the total gross recovery of [SUBDIVISION] from the Distributors Settlement.

[COUNSEL] certify that they first sought fees and costs from the Attorney Fee Fund created under the Distributor Settlement Agreement before seeking or accepting payment under this backstop agreement. [COUNSEL] further certify that they are not seeking and will not accept payment under this backstop agreement of any litigation fees or costs that have been reimbursed through prior settlements or judgments.

The Attorney General is executing this agreement solely because the definition of “State Back- Stop Agreement” in Exhibit R of the Distributor Settlement Agreement requires such agreements to be between “a Settling State” and private counsel for a participating subdivision. Neither the California Attorney General nor the State of California have any obligations under this Backstop Agreement, and this Backstop Agreement does not require the payment of any state funds to [SUBDIVISION], [COUNSEL], or any other party.

[DATE] [SUBDIVISION SIGNATURE BLOCK]

[DATE] [COUNSEL SIGNATURE BLOCK]

[DATE] [ATTORNEY GENERAL SIGNATURE BLOCK]

SAMPLE

EXHIBIT G
Subdivision and Special District Settlement Participation Form Will your subdivision or special district be signing the settlement participation forms for the Allergan and Teva Settlements at this time?
[ ] Yes [ ] No
Governmental Entity: State: CA
Authorized Signatory:

Address 1:

Address 2:

City, State, Zip:

Phone:

Email:

The governmental entity identified above (“Governmental Entity”), in order to obtain and in consideration for the benefits provided to the Governmental Entity pursuant to the Agreement dated November 22, 2022 (“Allergan Settlement”), and acting through the undersigned authorized official, hereby elects to participate in the Allergan Settlement, release all Released Claims against all Released Entities, and agrees as follows.

1. The Governmental Entity is aware of and has reviewed the Allergan Settlement, understands that all terms in this Election and Release have the meanings defined therein, and agrees that by this Election, the Governmental Entity elects to participate in the Allergan Settlement as provided therein.

2. Following the execution of this Settlement Participation Form, the Governmental Entity shall comply with Section III.B of the Allergan Settlement regarding Cessation of Litigation Activities.

3. The Governmental Entity shall, within fourteen (14) days of the Reference Date and prior to the filing of the Consent Judgment, file a request to dismiss with prejudice any Released Claims that it has filed. With respect to any Released Claims pending in In re National Prescription Opiate Litigation, MDL No. 2804, the Governmental Entity authorizes the MDL Plaintiffs’ Executive Committee to execute and file on behalf of the Governmental Entity a Stipulation of Dismissal With Prejudice substantially in the form found at https://nationalopioidsettlement.com.

4. The Governmental Entity agrees to the terms of the Allergan Settlement pertaining to Subdivisions and Special Districts as defined therein.

5. By agreeing to the terms of the Allergan Settlement and becoming a Releasor, the Governmental Entity is entitled to the benefits provided therein, including, if applicable, monetary payments beginning after the Effective Date.

6. The Governmental Entity agrees to use any monies it receives through the Allergan Settlement solely for the purposes provided therein.
1 SAMPLE

7. The Governmental Entity submits to the jurisdiction of the court in the Governmental Entity’s state where the Consent Judgment is filed for purposes limited to that court’s role as provided in, and for resolving disputes to the extent provided in, the Allergan Settlement.

8. The Governmental Entity has the right to enforce the Allergan Settlement as provided therein.

9. The Governmental Entity, as a Participating Subdivision or Participating Special District, hereby becomes a Releasor for all purposes in the Allergan Settlement, including, but not limited to, all provisions of Section V (Release), and along with all departments, agencies, divisions, boards, commissions, Subdivisions, districts, instrumentalities of any kind and attorneys, and any person in their official capacity whether elected or appointed to serve any of the foregoing and any agency, person, or other entity claiming by or through any of the foregoing, and any other entity identified in the definition of Releasor, provides for a release to the fullest extent of its authority. As a Releasor, the Governmental Entity hereby absolutely, unconditionally, and irrevocably covenants not to bring, file, or claim, or to cause, assist in bringing, or permit to be brought, filed, or claimed, or to otherwise seek to establish liability for any Released Claims against any Released Entity in any forum whatsoever. The releases provided for in the Allergan Settlement are intended to be broad and shall be interpreted so as to give the Released Entities the broadest possible bar against any liability relating in any way to Released Claims and extend to the full extent of the power of the Governmental Entity to release claims. The Allergan Settlement shall be a complete bar to any Released Claim.

10. The Governmental Entity hereby takes on all rights and obligations of a Participating Subdivision or Participating Special District as set forth in the Allergan Settlement.

11. In connection with the releases provided for in the Allergan Settlement, each Governmental Entity expressly waives, releases, and forever discharges any and all provisions, rights, and benefits conferred by any law of any state or territory of the United States or other jurisdiction, or principle of common law, which is similar, comparable, or equivalent to § 1542 of the California Civil Code, which reads:

General Release; extent. A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.

A Releasor may hereafter discover facts other than or different from those which it knows, believes, or assumes to be true with respect to the Released Claims, but each Governmental Entity hereby expressly waives and fully, finally, and forever settles, releases and discharges, upon the Effective Date, any and all Released Claims that may exist as of such date but which Releasors do not know or suspect to exist, whether through ignorance, oversight, error, negligence or through no fault whatsoever, and which, if known, would materially affect the Governmental Entities’ decision to participate in the Allergan Settlement.

12. Nothing herein is intended to modify in any way the terms of the Allergan Settlement, to which the Governmental Entity hereby agrees. To the extent this Settlement Participation Form is interpreted differently from the Allergan Settlement in any respect, the Allergan Settlement controls.
2 SAMPLE
I have all necessary power and authorization to execute this Settlement Participation Form on behalf of the Governmental Entity.

Signature:

Name:

Title:

Date:
3 STAFF REPORT
ITEM NO. _____11_____

TO: Honorable Mayor and Members of the City Council

FROM: Ron Garcia, Director of Community Development
DATE: March 15, 2023
SUBJECT: Approve Possessory Tax Reimbursement to B Diamond Infra LLC (“Diamond”), for Wireless Facility Located at Morgan Park

SUMMARY
This item requests the reimbursement approval of possessory real estate tax attributable to the wireless facility being leased at 4100 Baldwin Park Boulevard (Morgan Park).

RECOMMENDATION
It is recommended that the City Council authorize the Director of Finance to make necessary budget amendments to cover the possessory tax reimbursement.

FISCAL IMPACT
The tax liability is expected to cost $36,240.18. Staff is requesting to use General Fund to cover the tax liability, which will be included in the midyear budget amendment.

BACKGROUND
On April 8, 2015, the City of Baldwin Park (“City") entered a purchase agreement with WCP III, LLP (Diamond). Under the purchase agreement, the City is required to pay all applicable real estate property taxes.

The total real estate tax liability is $36,210.48 as specific in the attached invoice dated August 5, 2022. Diamond will continue to pay the real estate tax liability and any future real estate taxes attributable to the premises being leased and will submit reimbursement from the City in accordance with the terms of the purchase agreement.

ALTERNATIVES
The City Council may decide not to approve the possessory tax reimbursement; in which case, the City would be in violation of the agreement and would be exposed to future litigation.

LEGAL REVIEW
This report has been reviewed and approved by the City Attorney as to legal form and content.

ATTACHMENTS

1. Reimbursement Invoice Dated August 5, 2022

STAFF REPORT
ITEM NO. _____12_____

TO: Honorable Mayor and Members of the City Council

FROM: Ron Garcia, Director of Community Development
DATE: March 15, 2023
SUBJECT: Baldwin Park HOME-ARP Allocation Plan

SUMMARY
The City of Baldwin Park is slated to receive $1,128,360 in American Rescue Plan (ARP) funds through the federal HOME Program. In order to receive the funding, the City is required to submit a HOME-ARP Allocation Plan that describes how funds will be distributed to qualifying populations.

RECOMMENDATION
It is recommended that the City Council conduct a public hearing to consider approving the City’s HOME-ARP Allocation Plan due to HUD by March 31, 2023.

FISCAL IMPACT
There is no fiscal impact to the General Fund. However, approval of the HOME -ARP Allocation Plan will provide HOME-ARP funds to the City in the amount of $1,128,360.

BACKGROUND
On March 11, 2021, President Biden signed the American Rescue Plan (ARP) into law, which provides over $1.9 trillion in relief to address the continued impact of the COVID-19 pandemic on the economy, public health, State and local governments, individuals, and businesses. To address the specific need for homelessness assistance and supportive services, Congress appropriated $5 billion in ARP funds to be administered through the HOME program to perform four activities that must primarily benefit qualifying individuals and families who are homeless, at risk of homelessness, or in other vulnerable populations. These activities include:

(1) development and support of affordable housing,
(2) tenant-based rental assistance (TBRA),
(3) provision of supportive services; and
(4) acquisition and development of non-congregate shelter units

The ARP defines qualifying individuals or families as those that are:

(1) homeless,
(2) at risk of homelessness ,
(3) fleeing, or attempting to flee domestic violence, dating violence, sexual assault, stalking, or human trafficking,

(4) part of other populations where providing supportive services or assistance would prevent a family’s homelessness or would serve those with the greatest risk of housing instability, or (5) veterans and families that include a veteran family member that meet the criteria in one of (1)-(4) above.

HUD announced that the City of Baldwin Park would receive HOME -ARP funds in the amount of

$1,128,360 on April 8, 2021. Before Baldwin Park can award or spend these funds, it must have an approved HOME-ARP Allocation Plan, which identifies needs and sets priorities for the use of the funds.

The Plan is due to HUD no later than March 31, 2023.

The writing of this plan included consultation with stakeholders in Baldwin Park who work with the qualifying populations and who were able to provide data to inform the development of HOME -ARP program. Additionally, staff analyzed homeless and housing data provided by the 2022 Greater Los Angeles Point in Time (PIT) Count, the Comprehensive Housing Affordability Strategy (CHAS), the American Community Survey, and the Regional Housing Needs Allocation (RHNA).

Overall, City staff is recommending that HOME-ARP funding in the amount of $959,106 be utilized on supportive services for the unhoused. The City will also allocate the statutorily maximum amount of 15%, or $169,254, for program administration.

ALTERNATIVES
No alternatives are required. This public hearing is conducted approve the HOME-ARP Allocation Plan and submit it to the U.S. Department of Housing and Urban Development by the deadline of March 31, 2023.

LEGAL REVIEW
No Legal Review is necessary at this time.

ATTACHMENTS

1. Baldwin Park HOME-ARP Allocation Plan

CITY OF BALDWIN PARK

HOME-AMERICAN RESCUE PLAN (ARP)

ALLOCATION PLAN
FY 2021/22

Draft for Public Comment
February 27 – March15, 2023

COMMUNITY DEVELOPMENT DEPARTMENT

HOUSING DIVISION
14403 PACIFIC AVENUE
BALDWIN PARK, CA 91706

CITY OF BALDWIN PARK
FY 2021/22 HOME-ARP ALLOCATION PLAN

TABLE OF CONTENTS

Consultation .................................................................................................. 1

Public Participation ........................................................................................ 4

Needs Assessment and Gap Analysis .............................................................. 6

Proposed HOME-ARP Activities .................................................................... 17

HOME-ARP Production Housing Goals ......................................................... 19

Preferences .................................................................................................. 20

Referral Methods ......................................................................................... 21

Limitations in HOME-ARP Rental Housing/NCS Project ................................ 22

HOME-ARP Refinancing Guidelines .............................................................. 23

1 CITY OF BALDWIN PARK
HOME-ARP Allocation Plan

CONSULTATION

Describe the consultation process including methods used and dates of consultation.

The City of Baldwin Park conducted an extensive consultation process that included the distribution of a HOME-ARP questionnaire where responses from 11 non-profit agencies and 31 Baldwin Park homeless residents were received . Questionnaires requested the respondent’s opinion on the various activities eligible for HOME -ARP funding. The table below outlines all agencies consulted and their feedback.

List the organizations consulted.

Agency/Organizations
Consulted
Type of
Agency/Organization
Method of
Consultation Feedback
East San Gabriel
Valley Coalition for
the Homeless
(ESGVCH)
Emergency Shelter Questionnaire ESGVCH has been at the forefront of helping homeless persons since 1994. They’re goal is to offer four programs that will assist people to find permanent housing and assist them with becoming self-supporting. The ESGVCH
reported that rental housing, non -congregate housing,
food, mental health, outpatient health, street outreach, substance abuse, and homeless prevention are among the
most needed services for the clients they serve.

Baldwin Park
Housing Authority
Public Housing Agency Questionnaire Four questionnaires were received from Baldwin Park Housing Authority staff. Overall, they agreed that the
main needs in Baldwin Park are for rental housing, tenant based rental assistance, landlo rd/tenant liaison services, homeless prevention, and housing financial services.

Teri H. Muse Family
Service Center
Supportive Services
Provider for Homeless,
Victims of Domestic
Violence, and Low -
and Moderate -Income
Households
Questionnaire The mission of the Teri G. Muse Family Service Center is to provide a central facility for non -profit agencies
offering social, health, and human services to the residents of Baldwin Park. Services include various types of
counseling and health programs for individuals and
families. Representatives from the Family Service Center identified rental housing, tenant based rental assistance, case management, ho using financial assistance, and
homeless prevention as the most critical needs in Baldwin Park for homeless and other qualifying populations.

Oath to Country
Foundation (OTCF)
Supportive Service
Provider for Veterans,
Questionnaire OTCF’s objective is to increase access to mental health services for veterans and first responders throughout
Southern California, as well as fight against homelessness

2 Seniors and First
Responders
in the veteran population. Mental health, substance abuse, transportation, and mediation are much needed services
among their clientele. Approximately 6 Baldwin Park
residents currently receive services from the OTCF.

Baldwin Park Police
Department
Police Agency Questionnaire Two BPPD staff persons responded to the City’s HOME - ARP Provider Questionnaire due to their experience
serving homeless, victims of domestic violence, seniors, and low- and moderate-income households in Baldwin
Park. Food, housing search and counseling, mental health, substance abuse, and homeless prevention are among the
greatest need in the community.

City Net Emergency Shelter Questionnaire CityNet aims to end street-level homelessness through the provision of street -outreach, case management, housing navigation, bridge -housing, shelter operation,
reunifications, census coordination, and more. City Net also works to mobilize community resources, including
meals, volunteers, donations and advocacy, to coordinate care in emergency shelters, parks, and other public areas where homeless neighbors live. These efforts seek to
reduce wasteful duplication and fill missing gaps in the continuum of care, with the long -term g oal of ending
homelessness by providing homeless neighbors a stable
context in which their emergency needs are met, so they can work on long -term housing plans. CityNet responded to the questionnaire and said that rental housing, tenant based rental assistance, life skills, substance abuse , street outreach, case management, and homeless prevention
services were the greatest needs for the qualifying
populations.

St. John the Baptist
Catholic Church
Faith Based Provider Questionnaire St. John the Baptist Catholic Church serves all of the qualifying populations with a free food basket program
and identified non-congregate shelter as a significant need in the community.

Various Residents Various Residents Questionnaire 31 Baldwin Park homeless residents completed the HOME-ARP questionnaire where it was recorded that
tenant based rental assistance, rental housing, financial assistance, housing search and counseling, and food
ranked as the top five needed programs in the C ity for qualifying populations. The residents surveyed belonged to overlapping qualifying population groups including
victims of domestic violence, veterans, sheltered and
unsheltered homeless, and persons dealing with various
medical conditions.

Summarize feedback received and results of upfront consultation with these entities.

A total of 42 questionnaire responses were received by the City of Baldwin Park including from 11 Baldwin Park agencies and 31 persons experiencing homelessness. Collectively, the results show that top needs for the qualifying populations are the following: additional rental housing, housing financial assistance, tenant based rental assistance, housing search services, housing counseling, and homeless prevention.

3 Finally, consultation with Baldwin Park Community Development staff confirmed the need for funding of supportive services for the unhoused. The two tiny home communities currently offer many of the supportive services eligible under the HOME -ARP program. HOME-ARP funding could be directed to these two homeless housing facilities, others like it, or stand-alone programs offered by non-profit organizations throughout Baldwin Park. Homeless persons benefit from case management, housing search, housing counseling services , life skills, job training , childcare, transportation, and services aimed at moving them from homelessness to independent permanent housing.

4 Public Participation

Describe the public participation process , including information about and the date s of the public comment period and public hearing(s) held during the development of the plan:

• Date(s) of public notice: 2/24/2023
• Public comment period: start date - 2/27/2023 end date - 3/15/2023 • Date(s) of public hearing: 3/15/2023

Describe the public participation process.

The City of Baldwin Park provided two opportunities for the public to participate in the HOME - ARP planning process. The City published a public hearing notice in the Baldwin Park Press on February 27, 2023 to notify the public of the Plan’s availability for review and comment thr ough March 15, 2023 , and also to invite interested persons to the public hearing to approve the Plan scheduled for March 15, 2023. The public notice provided the following information to the public:
description of the HOME-ARP program; amount of funds allo cated to the City of Baldwin Park; eligible activities; and the proposed use of funds.

Describe efforts to broaden public participation.

In an effort to broaden public participation in the development of the HOME-ARP Allocation Plan, the City followed ci tizen participation steps outlined in its Citizen Participation Plan. For public review, the Plan was made available at the following locations Monday through Thursday (except for legal holidays) from 7:30 a.m. to 6:00 p.m., or otherwise during the Departm ent’s normal business hours:

Baldwin Park City Hall
Community Development Department
14403 E. Pacific Avenue
Baldwin Park, CA 91706
Baldwin Park City Hall
City Clerk’s Office
14403 E. Pacific Avenue
Baldwin Park, CA 91706

Baldwin Park Public Library
Reference Department
4181 Baldwin Park Boulevard
Baldwin Park, CA 91706

The Plan was also available for citizen review on the City’s website at www.baldwinpark.com .

Finally, the public was invited to participate in the March 15, 2023 public hearing in person or virtually via Zoom.

Summarize the comments and recommendations received through the public participation process either in writing, or orally at a public hearing:

To be completed at the end of the public comment period and public hearing.

5 Summarize any comments or recommendations not accepted and state the reasons why:

To be completed at the end of the public comment period and public hearing.

6 Needs Assessment and Gaps Analysis

Housing Needs Inventory and Gap Analysis Table
Non-HOMELESS
Current Inventory Level of Need
# of Units # of Households
Total Rental Units 7,795
Rental Units Affordable to HH at 30% AMI
(At-Risk of Homelessness) 2,595
Rental Units Affordable to HH at 50% AMI
(Other Populations) 1,800
0%-30% AMI Renter HH w/ 1 or more
severe housing problems
(At-Risk of Homelessness)
2,195
30%-50% AMI Renter HH w/ 1 or more
severe housing problems
(Other Populations)
1,580
Current Gaps
Suggested Data Sources: 1. American Community Survey (ACS); 2. Comprehensive Housing Affordability Strategy (CHAS)

Describe the size and demographic composition of qualifying populations within the PJ’s boundaries:

Homeless as defined in 24 CFR 91.5

The U.S. Department of Housing and Urban Development (HUD) requires that all Continuum of Care jurisdictions across the country complete a biennial unsheltered count and an annual sheltered count of all individuals experiencing homelessness in the communit y on a single point in time during the last ten days of January. The Greater Los Angeles PIT was rescheduled to the last days of February 2022 due to the COVID -19 pandemic. The Greater Los Angeles 2022 Point in Time (PIT) Count, therefore, took place on February 22-24, 2022. Specifically, the PIT was conducted on February 22, 2022 for the San Gabriel Valley that included the City of Baldwin Park. According to the Los Angeles Homeless Services Authority (LAHSA), the number of people experiencing homelessness rose just over 4% in Los Angeles County from 2020 counts. This was a stark difference from prior year increases such as a near 26% jump in homelessness from 2018 to 2020. LAHSA attributes the “flattening” of the homelessness curve to government programs t hat were in place during the pandemic that kept families and individuals housed which prevented further homelessness. Policies such as eviction moratoriums and programs such as rental assistance and economic stimulus grants could have played a vital role in preventing additional homelessness between 2020 and 2022.

City of Baldwin Park

The February 2022 PIT count enumerated 275 homeless individuals in the City of Baldwin Park including 102 sheltered persons, and 173 persons that were found to live in pla ces not

7 designed for , or ordinarily used as , a regular sleeping accommodation for human beings, including a car, park, RV’s or campers, tents, makeshift shelters, or the street. The unsheltered homeless count fell by 382 persons from 2020 when the count was 555 persons; however, the number of sheltered homeless grew from 0 in 2020 to 102 in 2022.

Service Planning Area (SPA) 3 Homeless Statistics

Baldwin Park is one of 22 cities that make up Service Planning Area (SPA) 3 in the Greater Los Angeles Area. These cities include:

Alhambra
Altadena
Arcadia
Azusa
Baldwin Park
Claremont
Covina
Diamond Bar
Duarte
El Monte
Glendora
Irwindale
Monrovia
Monterey Park
Pasadena*
Pomona
San Dimas
San Gabriel
San Marino
Temple City
Walnut
West Covina

*Pasadena is excluded from the boundaries of the Los Angeles Continuum of Care, therefore the number in the analysis below for SPA 3 do not include Pasadena.

According to the latest full homeless census (2022 Point in Time Count), there were 4,661 homeless persons in SPA 3 , up 2% from the 2020 PIT . Of this total 2,985 (64%) were unsheltered, and 1,676 were sheltered ( 36%). Hispanic/Latino persons made up 56% of the total homeless population, 25% were White, 17% were Black, and 2% fell within the other race categories (Asian, American Indian/Alaska Native, or Other) . Additionally, 1,535 were considered to be chronically homeless, 1,732 were victims of domestic violence , 882 said they had a substance use disorder, 96 had AIDS/HIV, over 2,000 suffer from some form of medical disability (mental, physical, or developmental), and 258 were veterans.

At Risk of Homelessness as defined in 24 CFR 91.5

To account for persons at‐risk of becoming homeless, the most recent (2015‐2019) Comprehensive Housing Affordability Strategy (CHAS) data was analyzed. This data contains three particular characteristics of households that meets the definition of “at r isk of homelessness” found in 24 CFR Part 91.5. First, the CHAS data breaks down occupied housing units by HUD Area Median Family Income (HAMFI), including 30% and below of HAMFI.

Next, the CHAS data provides information on occupied housing units with households that are severely cost burdened; that is, they are spending more than 50% of their income on housing related expenses. For renters, that includes rent and utilities. For homeowners, it includes the mortgage payment, utilities, association fees, insurance, and real estate taxes. And finally, the CHAS data contains information on housing units in which there resides more than 1.5 people per room, which is considered to be severely over-crowded.

The CHAS data shows that of the 7,795 renter households in the City of Baldwin Park, 2,595, or 33%, are occupied by households earning 30% or less of the HAMFI. Further, of these

8 households, 85% (2,195) have one or more housing problems, defined as housing units that:
1) lack complete kitchen facilities; 2) lack complete plumbing facilities; 3) are over overcrowded; and 4) are cost burdened. A household is said to have a housing problem if they have any one or more of these four problems. The CHAS data shows that Hispanic households make up an overwhelming share of households that meet both criteria (earn 30% or less of HAMFI and have one or more housing problems) at 84%, with Asian households ranked second at 11%, and White households third just under 3 %. Black or African American households constitute under 2% of these households.

With regard to age, 75% of renter households earning less than 30% of the HAMFI and with one or more housing problems fall under the non -elderly category, which represents persons between the ages of 18 and 61. Thi s is the City’s working -class households and families.

Seniors (62+ years of age), on the other hand, represent the remaining 25% of renter households that are both extremely low-income and have one or more housing problems. This category of seniors has a higher risk of homelessness due to the ever-increasing cost of living in California (rising housing, utility, food, and gas prices) while at the same time living on fixed incomes.

Finally, the CHAS data revealed that of the 2,195 renter households earning less than 30% HAMFI and experience one or more housing problems , 59% (1,285 households) are, in fact, severely cost-burdened, and 11% (250 households) are severely overcrowded. Severely cost burdened households are spending more than 50% of their income on housing related expenses, leaving the remaining 50% or less of their income available for other daily necessities such as food, gas, child and healthc are. Together, these make up 1,535 households that specifically meet the definition of “at risk of homelessness” at 24 CFR Part 91.5.

Renter-Occupied Housing Units with Households Earning <= 30% HAMFI 2,595
One or More Housing Problems* 2,195 85%

Race/Ethnicity White 55 3%
Black or African American 35 2%
Asian 250 11%
American Indian or Alaska Native 0 0%
Pacific Islander 0 0%
Other Race/Multiple Races 5 <1%
Hispanic 1,850 84%

Age Non-Elderly 1,655 75%
62-74 Years Old 340 16%
75+ Years Old 200 9%

Housing
Problems Households with No Kitchen or Plumbing Facilities 65 3% Households with 1.5+ Persons per Room 250 11%
Households with 1 – 1.5 Persons per Room 350 16%
Households Over 50% Cost Burdened 1,285 59%
Households 30-50% Cost Burdened 240 11%
* 1) lack complete kitchen facilities; 2) lack complete plumbing facilities; 3) are over overcrowded; and 4) are cost burdened

9 Fleeing, or Attempting to Flee, Domestic Violence, Dating Violence, Sexual Assault, Stalking, or Human Trafficking, as defined by HUD in the Notice

The City has seen a steady decline in domestic violence‐related calls for assistance to the Baldwin Park Police Department. From 201 2-2016, there was an average of 181 domestic violence‐related calls per year while the most recent data ( 2017-2021) shows an average of 143 calls per year, a decrease of over 26%, according to the State of California Department of Justice Statistics Center (CJSC) (https://openjustice.doj.ca.gov/exploration/crime- statistics/domestic-violence-related-calls-assistance ).

The 2022 Greater Los Angeles Point in Time count reported 1,732 persons who had experienced domestic or intimate partner violence. Of this number, 153 reported said that they were homeless due to fleeing domestic or intimate partner violence.

The 2022 Los Angeles Continuum of Care Housing Inventory Count (HIC) shows five housing projects in Service Planning Area 3 of which Baldwin Park is part that serve persons affected by domestic or intimate partner violence. Collectively, the projects offer 92 beds for households with children and 22 units for households with chil dren. During the HIC Point in Time Count, the units designated for domestic or intimate violence victims had a utilization rate of just over 30%, leaving 64 beds available.

Other populations requiring services or housing assistance to prevent homelessnes s and other populations at greatest risk of housing instability, as defined by HUD in the Notice

Other Families Requiring Services or Housing Assistance to Prevent Homelessness

The HOME ARP Notice (CPD Notice CPD -21-10) describes Other Families Requiring Services or Housing Assistance to Prevent Homelessness as previously homeless, but currently sheltered, households that will become homeless if not for the assistance they are currently receiving. This could include temporary or emergency assistance, housing services, temporary rental assistance, or some other type of assistance to allow the household to be housed.

While it is unclear if these households were homeless previously, it is worth mentioning that 119 Baldwin Park households currently receive Section 8 vouchers from the Baldwin Park Housing Authority, including 38 that are elderly/disabled, 42 large families, and 77 small family households. Hispanics make up majority of the households receiving vouchers at 86%.

The average monthly housing assistance payment is $1,134. Many, if not all , of these households could experience homelessness if not for the temporary rental assistance they are receiving.

At Greatest Risk of Housing Instability

Persons at greatest risk of housing instability are those that: 1) are earning 30% or below the HAMFI and are severely cost-burdened (paying 50% or more on housing); or 2) are earning 50% or less of HAMFI and meet one of the following conditions:

10 1. Has moved two or more times in the two months immediately preceding their application for homelessness prevention assistance.

2. Is living in the home of another because of economic hardship.

3. Has been formally notified of eviction within 21 days after the date of application for assistance.

4. Lives in a hotel or motel and the cost of staying at the hotel or motel is not borne by a federal, state, or local government program.

5. Lives in an over -crowded (more than one person per room) single -room occupancy (SRO) or efficiency apartment units, or lives in a severely overcrowded (more than 1.5 persons per room) larger housing unit.

6. Is exiting a publicly funded institution, or system of care (health care facility, mental health facility, foster care or other youth facility, or correction program or institution).

7. Otherwise lives in housing that has characteristics associated with instability and an increased risk of homelessness, as identified in the recipient’s approved Consolidated Plan.

For the first group of persons/households at greatest risk of instability, that is, they earn less than or equal to 30% of HAMFI and are severely cost-burdened, the 2015-2019 CHAS data reports that there are 2,440 owner and renter households that meet this criterion. Of these, 74% or 1,810, are households that rent, making them more vulnerable to housing instability and homelessness.

Information on each of the conditions listed above for the second category of persons at greatest risk of housing instabili ty is not readily available, with the exception of data on overcrowding. The 2015-2019 CHAS data described 1,025 households earning 50% or less of HAMFI living in overcrowded conditions, 75% of which were renter households. Worse, the data showed an additional 505 households experiencing severe overcrowding, and 88% of them were renters.

Veterans and Families that Include a Veteran Family Member

According to the 2021 American Community Survey (ACS), Baldwin Park currently has a population of 796 veterans in the city. Information on the number of veterans that are homeless was not available as part of the 2022 Greater Los Angeles Point in Time Count. However, in Service Planning Area 3 of which Baldwin Park is part, a total of 252 homeless veterans were counted, all but one not belonging to a homeless family. Review of the 2022 LAHSA Housing Inventory Count listed no specific housing for veterans in Baldwin Park.

Identify and consider the current resources available to assist qualifying populations, including congregate and non -congregate shelter units, supportive services, TBRA, and affordable and permanent supportive rental housing.

The City of Baldwin Park is a recipient of the annual Community Development Block Grant (CDBG) and HOME Investment Partnership Act Program (HOME). Together, the City receives approximately $1.24 million from these entitlement programs to address affordable housing and low- and mo derate-income community development needs. The City also received a special

11 allocation of CARES Act CDBG in 2019 as a response to the COVID-19 pandemic in the sum of almost $1.16 million.

Baldwin Park uses it’s federal funding on a variety of projects an d programs that serve the qualifying populations already. For example, the CDBG program funds some supportive services for qualifying populations . The Church of the Redeemer Food Bank is provided CDBG public service funds every year to assist homeless and persons at risk of homelessness with baskets of free food on a monthly basis. The Food Bank serves more than 600 individuals and over 500 households each month.

Homeless persons are also being assisted through the East San Gabriel Valley Coalition for the Homeless which provides three major services for Baldwin Park homeless residents. First, they offer an Emergency Assistance Center (EAC) to see to the emergency needs of the homeless and those at risk. This could be a hot bowl of soup, a sack lunch, hygiene kits, bus cards (on approval), motel vouchers for families w/ minor children and advocacy for those who need help. Second, the organization offers a Bridge Housing Program that helps get homeless families back on their feet with life skills education, counseling and financial assistance by housing families in motels for a period of 1 to 6 months, transitioning them back to permanent housing. Professi onal case management is offered to assist family members to set goals, monitors their progress and connects them with other social service agencies and physical and mental health care providers. A mentoring program with designated Coalition members then pr ovides moral and psychological support as well as resources for maintaining a budget and building a mandatory savings account. And finally, the East San Gabriel Valley Coalition for Homeless offers a Winter Shelter Program.

Approximately 30 Baldwin Park homeless persons are assisted each year.

CDBG also helps to fund the Family Service Center which offers a variety of social service assistance to residents of Baldwin Park. The FSC is centrally located and is easily accessible to all the residents. The ser vices offered at the FSC include, but are not limited to medical access referrals, food bank referrals, emergency shelter vouchers, emergency food vouchers, employment counseling, homeless prevention referrals, mental health referrals, emergency transportation, case management referrals, tutoring and educational services assistance.

Next, the City of Baldwin Park has supported a Domestic Violence (DV) and Victim Advocate Program with CDBG funding. The advocate works hand in hand with domestic violence and sexual crimes detectives to provide emergency assistance to victims, guiding them as their cases go through the criminal justice system. The DV Advocate is a coordinator for police, health, social and shelter services available. The DV Advocate conducts on-going community outreach and education, providing services and training to police officers, detectives, schools, and other community groups.

The City’s HOME program has historically been used for the development of affordable housing and residential rehabilitation. In the last ten years, the City has invested HOME funds in one first time homebuyer project and has developed 12 units of affordable rental housing.

Future projects that the City is currently working on include the Habitat for Humanity CHDO Homeownership Project, the Cesar Chavez Foundation Downing Street Project, and the

12 Retirement Housing Foundation ’s Central Metro Place” project. In total, the City has allocated, and will soon award, $1.2 million towards the development of these projects that will be leveraged with tax credit and grant funding. Though not being funded with HOME -ARP, these projects nonetheless will serve q ualifying populations including seniors and low - and moderate-income households at risk of homelessness.

The third federal funding source was a one-time special allocation of CDBG funding from the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Baldwin Park received $1. 16 million which was used for a range of services to assist households affected by COVID -19. The City funded programs such as the St. John’s Food Bank, Redeemers Food Basket Program, the Baldwin Park Senior Meals Delivery Program, the Baldwin Park Food Vouch er Program, and a COVID-19 community testing program.

The City of Baldwin Park is also the recipient of two State -funded housing revenue sources: the Supplemental Educational Revenue Augmentation Fund (SERAF) and the Permanent Local Housing Allocation (PHLA).

The California Legislature approved Senate Bill 2 (SB 2), known as the Building Homes and Jobs Act (Act), which established a $75 recording fee on real estate documents to increase the supply of affordable housing. The Act established the Permanent Local Housing Allocation (PLHA) program administered by the California Department of Housing and Community Development (HCD). The PLHA provides a permanent source of funding to cities and counties to help meet the unmet need for affordable housing and i ncrease the supply of affordable housing units. Baldwin Park receives approximately $310,000 annually from this source of funding.

Finally, the City of Baldwin Park has an Affordable Housing Program consisting of multifamily apartment complexes throughout the City that include affordable units. The City has agreements with the owners of these units to maintain rents at levels below regular market rent rates. In total, the City currently has a portfolio of 447 rental units affordable to family households.

Affordable and permanent supportive housing developments in Baldwin Park have long wait lists for entry. The LAHSA Coordinated Entry generally assesses thousands of people each year, and offers housing to a small fraction. With 275 people experiencing homelessness and thousands more experiencing rental cost burden, additional affordable and permanent supportive housing is desperately needed for all of the qualifying populations. The 2021-2029 Regional Housing Needs Allocation (RHNA) for the City of Baldwin echoes this sentiment. The RHNA quantifies the housing need in Baldwin Park as 2,001 housing units. From this allocation, the RHNA designates:
• 576 units affordable to extremely to very low-income households • 275 units affordable to low-income households
• 263 units affordable to moderate-income households
• 887 units affordable to above moderate-income households Describe the unmet housing and service needs of qualifying populations:

Homeless as defined in 24 CFR 91.5

13 Many factors contribute to homelessness including poverty, unemployment, and the lack of affordable housing. Compounding this are personal challenges such as mental and substance abuse disorders, trauma and violence, domestic violence, serious illness, divorce, death of a family member, or disabilities. The 2022 Point in Time reports that the City of Baldwin Park has 275 homeless in the City , including 173 unsheltered and 102 sheltered persons . To meet the need for homeless housing and the supportive services to assist them, the City spearheaded the development of Esperanza “Hope” Villa, a tiny home community, in partnership with the San Gabriel Valley Regional Housing Trust and the San Gabriel Valley Council of Governments. Esperanza Villa, located at 14173 Garvey Avenue, consists of 25 heated and air-conditioned tiny homes with a bed, desk, and outlet to charge devices. The 64-square-foot units are intended to provide bridge housing for about three months before residents are placed in permanent housing, allowing up to 100 people a year to be served. Volunteers of America Los Angeles o perates the site and provide s on-site supportive services including case management, three daily delivered meals, secured site access and 24 -hour security, and connections to health and mental health services. Additional site amenities include restrooms, laundry and shower facilities, and a dog run.

The City also participated in the development of a second tiny home community, Serenity Homes. This site accommodates larger homeless and provides tenants with wraparound homeless services operated by CityNet. Despite the se efforts, there remains at least 173 unsheltered homeless in Baldwin Park that could benefit from outreach services, housing, and wraparound supportive services.

At Risk of Homelessness as defined in 24 CFR 91.5

According to the 2015-2019 Comprehensive Housing Affordability Strategy (“CHAS”), of the 7,795 renter households in the City, 47% (3,645 households) are paying the normal or expected 30% or below of their income on housing related expenses; however, that means that the remaining 53% of all renter households are experiencing some level of cost burden. The cost burdens are more serious for households with the lowest incomes (at or below 30% of Area Median Income). Of the 2,595 renter households earning less than or equal to 30% AMI, 2,180 of them ( 84%) are cost burdened (paying more than 30% of their income toward rent), and 70% of them are severely cost burdened (paying more than 50% of their income toward rent) making them more at risk of homelessness. These significant housing cost burdens affect thousands of Baldwin Park residents; and with an inventory of only 447 affordable units in the City, there exists an exponential shortage of housing options for those at risk of homelessness.

It is critical that the City continue developing new affordable h ousing for people with the lowest incomes in the community. Free supportive services in the areas of childcare, transportation, and food could greatly relieve those at risk of homelessness by making more of their income available for rising rental costs. Additional funding towards tenant based rental assistance could also be of considerable benefit to those cost burdened households at risk of homelessness.

Fleeing, or Attempting to Flee, Domestic Violence, Dating Violence, Sexual Assault, Stalking, or Human Trafficking, as defined by HUD in the Notice

14 As stated earlier in this report, the number of domestic violence related calls has decreased in the last five years to an average of approximately 143 calls per year. And while there are no Point in Time statistics pertaining specifically to Baldwin Park, the report does show that there were 1,732 homeless persons in SPA 3 that had experienced some form of domestic or intimate partner violence, 153 of which were fleeing because of it. To keep these victims safe, it is imperative that there be sufficient programs and housing shelters available to help them.

The 2022 Housing Inventory Count maintained by LAHSA shows no housing projects dedicated to persons fleeing, or attempting to flee, domestic violence, dating violence, sexual assault, stalking, or human trafficking in Baldwin Park; however, in SPA 3 there were 92 beds available in four housing developments that accept those experiencing domestic violence.

Serving Baldwin Park residents fleeing or attempting to flee, domestic violence, dating violence, sexual assault, or human trafficking is the Domestic Violence Advocate, funded annually with local CDBG funds. The Domestic Violence Advocate provides assistance with court visits, restraining order requests, and other services needed to manage critical issues in victim’s lives.

Other populations requiring services or housing assistance to prevent homelessness and other populations at greatest risk of housing instability as defined by HUD in the Notice.

Persons/households at greatest risk of instability, that is, they earn less than or equal to 30% of HAMFI and are severely cost-burdened, total 2,440 owner and renter households, according to the 2015-2019 CHAS. Of these, 74% or 1,810 are households that rent, making them more vulnerable to housing instability and homelessness. The 2015-2019 CHAS data also described 1,025 households earning 50% or less of HAMFI living in overcrowded conditions, 75% of which were renter households. Wors e, the data showed an additional 505 households experiencing severe overcrowding, and 88% of them were renters.

Veterans also fall within the “Other Qualifying Population s” category. While the number of homeless veterans in Baldwin Park is not available, the American Community Survey does report 795 veterans in the City; however, review of the 2022 Housing Inventory Count listed no specific housing for veterans in Baldwin Park. However, the City does fund annually the East San Gabriel Valley Coalition for the Homeless which provides transitional housing, counseling, and case management to families at risk of homelessness, including veterans.

When paired with financial counseling, career coaching and other available case management services, the agency makes certain that families are ready to succeed in their transition to permanent housing.

With the thousands of severely cost burdened, overcrowded, severely overcrowded, and veteran households in the City, a priority need for additional affordable rental housing exists.

Supportive services such as childcare, transportation, food, employment training, and tenant based rental assistance could benefit these households as well.

15 Other persons that may fall in this group of qualifying populations, are households that may become homeless again if financial assistance that prevents homelessness is cancelled. As stated earlier in this report, Baldwin Park currently assists 119 Baldwin Park households including 38 that are elderly/disabled, 42 large families, and 77 small family households with Section 8 vouchers. Still, there remains thousands of residents on the waiting list to receive a voucher.

Identify any gaps within the current shelter and housing inventory as well as the service delivery system:

As presented earlier in this Plan, the number of individuals and families that meet the criteria of a qualifying population under the HOME -ARP guidance exceeds the number of available units to house them. The City has 275 homeless individuals when last counted in 2022, 63% of which are unsheltered. The number of homeless reveals the need for additional housing units, along with services to support them. Moreover, the thousands of renter households that are both living in poverty and are severely cost burden ed or severely overcrowded are indications of the serious deficit of homes affordable and available to all of the qualified populations, including victims of domestic violence and veterans. This housing shortage in Baldwin Park demonstrated above by the CHAS and RHNA data, shows the dire need for additional homeless housing opportunities such as emergency shelters, permanent supportive housing, and non -congregate shelter options, including through opportunistic acquisitions of existing multifamily buildings, hotels, and motels.

The City’s two tiny home communities were developed precisely for this purpose. Residents of the communities receive wrap around services that address the many issues that have led to their housing instability.

Under Section IV.4.2. ii.G of the HOME -ARP Notice, a PJ may provide additional characteristics associated with instability and increased risk of homelessness in their HOME - ARP allocation plan. These characteristics will further refine the definition of “other populations” that are “At Greatest Risk of Housing Instability,” as established in the HOME - ARP Notice. If including these characteristics, identify them here.

Not applicable.

Identify priority needs for qualifying populations:

Without a doubt, analysis of the 2022 Greater Los Angeles Point in Time Count, CHAS data, American Community Survey data, and consultation with the various agencies conducted as part of this Plan reveal the need for more affordable housing and housing -related supportive services.

People without homes, need homes. The high and rapidly escalating housing costs combined with the COVID -19 pandemic and economic displacement in Los Angeles County creates harmful instability for the qualified populations. Personal needs and challenges become exponentially difficult if you are in poverty, or worse, homeless. Investing in any kind of housing (transitional, permanent, non -congregate shelter) which the City has done and is continuing to do, allows services to be accessed and for individuals to begin to recover.

16 Explain how the PJ determined the level of need and gaps in the PJ’s shelter and housing inventory and service delivery systems based on the data presented in the plan:

The City of Baldwin Park analyzed several data sources to determine the needs and gaps in the City’s shelter and housing inventory and in the service delivery systems. First, the City extracted Baldwin Park-specific data and Service Planning Area 3 data from the 2022 Greater Los Angeles Point in Time Count. The PIT provided valuable data on the number of sheltered and unsheltered homeless, families and individual homeless persons, and transitional aged youth, senior, and veteran homeless persons. Further, data on the number of hom eless persons fleeing domestic violence was provided on a service planning area basis.

Next, the City accessed data from the Comprehensive Housing Affordability Strategy (“CHAS”).

CHAS data is provided annually from the U.S. Department of Housing and Urba n Development (HUD) and includes custom tabulations of American Community Survey (ACS) data from the U.S. Census. The data demonstrates the extent of housing problems and needs, particularly for low-income households. CHAS data was used by Baldwin Park to determine housing tenure by the various income levels, the number of households experiencing cost burden and/or overcrowded conditions, race and ethnicity statistics of extremely low -income households, and other data needed to characterize households at risk of homelessness.

Third, the City retrieved data from the City’s 2020-2024 Consolidated Plan, the Regional Housing Needs Allocation (RHNA), and the Housing Inventory Count from the Los Angeles Continuum of Care to gather information on housing needs, current housing available in Baldwin Park, and current service programs offered with federal and State funding.

Finally, the City consulted with various stakeholders via a community meeting in late February, and collected information on needs as perceived by the non -profit community, Baldwin Park departments, and homeless persons themselves via a homeless questionnaire. Overall, the City found that the highest need for the qualifying populations in Baldwin Park was for additional affordable housing with wrap -around supportive services. A decent and affordable place to live, coupled with supportive services, helps homeless and those at risk of homelessness by freeing them from such physical and mental hardships and placing them on a path of new opportunity and increased confidence and self-reliance. This finding was determined by review of statistical data that reveals a significant shortage of rental housing for homeless persons and those at risk of homelessness. The results of the questionnaires completed by non -profit agencies that work directly with the qualifying populations found that homeless prevention, mental health, and housing search and counseling services were of greatest need, along with additional rental housing and other housing financial assistance. Residents of Baldwin Park ranked tenant based rental assistance, rental housing and other housing financial assis tance, housing search and counseling services, and food as the top five priorities in the community.

17 HOME-ARP ACTIVITIES

Describe the method(s)that will be used for soliciting applications for funding and/or selecting developers, service providers, subrecipients and/or contractors:

The City of Baldwin Park is proposing to utilize HOME-ARP funding on supportive services for unhoused Baldwin Park residents. These supportive services could be carried out by CityNet who is currently the contracted operator at both tiny home communities within the City – Esperanza Villa and Serenity Homes – or could be carried out by non-profit organizations solicited through a Notice of Funding Availability (NOFA) process. Either way, Baldwin Park intends to see tha t HOME-ARP funding is used to support the unhoused with selected supportive services consistent with the HOME-ARP Notice.

Describe whether the PJ will administer eligible activities directly:

The City of Baldwin Park will provide oversight of any service provider contracts; however, implementation of supportive services will be carried out by an experienced organization.

If any portion of the PJ’s HOME-ARP administrative funds are provided to a subrecipient or contractor prior to HUD’s acceptance of the HOME -ARP allocation plan because the subrecipient or contractor is responsible for the administration of the PJ’s entire HOME -ARP grant, identify the subrecipient or contractor and describe its role and responsibilities in administering all of the PJ’s HOME-ARP program:

The City of Baldwin Park does not propose to allocate any administrative funds from the HOME- ARP grant; administrative funds will be retained by the City to help administer the supportive services contracts.

In accordance with Section V.C.2. of the Notice (page 4), PJs must indicate the amount of HOME-ARP funding that is planned for each eligible HOME -ARP activity type and demonstrate that any planned funding for nonprofit organization operating assistance, nonprofit capacity building, and administrative costs is within HOME-ARP limits.

Use of HOME-ARP Funding
Funding Amount Percent of the
Grant
Statutory
Limit
Supportive Services $ 959,106
Acquisition and Development of Non-Congregate
Shelters $ #
Tenant Based Rental Assistance (TBRA) $ #
Development of Affordable Rental Housing $ #
Non-Profit Operating $ # # % 5%
Non-Profit Capacity Building $ # # % 5%
Administration and Planning $ 169,254 # 15% 15%
Total HOME ARP Allocation $ 1,128,360

18 Describe how the PJ will distribute HOME -ARP funds in accordance with its priority needs identified in its needs assessment and gap analysis:

The City of Baldwin Park will distribute HOME-ARP funds to the priority need of supportive services to the City’s unhoused. Just how many supportive service contracts will be implemented is still unknow n at this time. The City will distribute a Notice of Funding Availability to sol icit proposals from local non-profit organizations that carry out services outlined in the HOME-ARP Notice.

Another option is to use HOME-ARP to support the services being provided at the two tiny home communities in Baldwin Park . Esperanza Villa, located at 14173 Garvey Avenue, assists 25 homeless individuals with three months of housing and supportive services to prepare them for more permanent housing. Serenity Homes has 16 larger units to accommodate households up to three persons. This community, located at 13167 Garvey Avenue, offers six m onths of housing and supportive services. Case management, job training, mental health, substance abuse, food, and other services necessary to stabilize the tenants and get them ready for permanent housing may be considered for HOME-ARP funding.

Describe how the characteristics of the shelter and housing inventory, service delivery system, and the needs identified in the gap analysis provided a rationale for the plan to fund eligible activities:

The City continues to make a considerable e ffort to increase its inventory of affordable housing units. However, the demand for available units far outstrips the supply as shown in the tables above. Based on the Greater Los Angeles Point in Time Count, there were 275 total homeless persons in Baldwin Park in 2022, 173 of them unsheltered despite the efforts of the City, County, and non-profit industry to house and provide needed support services to them. Additionally, there are over 2,000 renter households at risk of homelessness. They are reportedl y making equal to or less than 30% HAMFI while at the same time, spending over 50% of their incomes on housing related expenses. The RHNA further indicates a need for 576 units for very low-income families, and 275 units for low-income households.

Further, new affordable housing developments typically take at least 3‐6 years from concept to occupancy. However, the City of Baldwin Park hosted the very first tiny home bridge housing community in the San Gabriel Valley which was up and running in under six mont hs. Esperanza Villa opened in November 2021 . Serenity Homes , another tiny home bridge housing site for families experiencing homelessness in Baldwin Park opened in September 2022. Both communities provide additional housing units for homeless persons on an immediate basis, and may be eligible to utilize HOME-ARP to provide wrap around supportive services to give them the help they need to become stable and transition to more permanent housing. Any individual who has experienced time living on the streets unhoused is likely to have struggled with a variety of challenges. These challenges may include mental and/or physical health issues, substance use problems, trauma or abuse, lack of employment, or contact with th e criminal justice system.

Supportive services that address these and many other issues are key in assisting any individual experiencing homelessness.

19 HOME-ARP Production Housing Goals

Estimate the number of affordable rental housing units for qualifying populations that the PJ will produce or support with its HOME-ARP allocation:

Baldwin Park proposes to use $959,106 in HOME -ARP funding on supportive services for the unhoused in Baldwin Park. No funding will be used to create or develop affordable rental housing for any of the qualifying populations in Baldwin Park.

Describe the specific affordable rental housing production goal that the PJ hopes to achieve and describe how the production goal will address the PJ’s priority needs:

Not applicable. The City intends to use HOME-ARP funds on supportive services.

20 Preferences

Identify whether the PJ intends to give preference to one or more qualifying populations or a subpopulation within one or more qualifying populations for any eligible activity or project:

Baldwin Park intends to utilize HOME -ARP funding on supportive services to persons experiencing homelessness in the City. It is important to note that while homeless persons are given a preference, many recipients of supportive services could potentially be eligible as other qualifying populations as well . For example, an unhoused person could also be fleeing from domestic violence, be a veteran, or be a senior.

If a preference was identified, explain how the use of a preference or method of prioritization will address the unmet need or gap in benefits and services received by individuals and families in the qualifying population or subpopulation of qualifying population, consistent with the PJ’s needs assessment and gap analysis:

Not applicable.

21 Referral Methods

Identify the referral methods that the PJ intends to use for its HOME -ARP projects and activities. PJ’s may use multiple referral methods in its HOME-ARP program. (Optional):

HOME-ARP funding will be used for supportive services and referrals for such services can come from various sources including the City’s Police Department and CityNet who is contracted to operate the two tiny-home facilities in the City. Additionally, the non-profit community that serves this population undoubtedly already have referral methods in place to reach the unhoused.

If the PJ intends to use the coordinated entry (CE) process established by the CoC, describe whether all qualifying populations eligible for a project or activity will be included in the CE process, or the method by which all qualifying populations eligible for the project or activity will be covered. (Optional):

Baldwin Park’s HOME-ARP fund ing will be used to support homeless services to be more specifically identified once the City issues a Notice of Funding Availability . It is very likely that the City could utilize the local Continuum of Care operated by the Los Angeles Housing Services Authority (LAHSA).

If the PJ intends to use the CE process established by the CoC, describe th e method of prioritization to be used by the CE. (Optional):

Not applicable.

If the PJ intends to use both a CE process established by the CoC and another referral method for a project or activity, describe any method of prioritization between the two referral methods, if any. (Optional):

Not applicable.

22 Limitations in a HOME-ARP Rental Housing or NCS Project

Describe whether the PJ intends to limit eligibility for a HOME -ARP rental housing or NCS project to a particular qualifying population or specific subpopulation of a qualifying population identified in section IV.A of the Notice:

Not applicable. The City of Baldwin Park will not be funding any rental housing to non-congregate shelter projects with HOME-ARP funding.

If a PJ intends to implement a limitation, explain why the use of a limitation is necessary to address the unmet need or gap in benefits and services received by individuals and families in the qualifying population or subpopulation of qualifying population, consi stent with the PJ’s needs assessment and gap analysis:

Not applicable.

If a limitation was identified, describe how the PJ will address the unmet needs or gaps in benefits and services of the other qualifying populations that are not included in the limitation through the use of HOME-ARP funds (i.e., through another of the PJ’s HOME -ARP projects or activities):

Not applicable.

23 HOME-ARP Refinancing Guidelines

If the PJ intends to use HOME -ARP funds to refinance existing debt secured by multifamily rental housing that is being rehabilitated with HOME-ARP funds, the PJ must state its HOME- ARP refinancing guidelines in accordance with 24 CFR 92.206(b) . The guidelines must describe the conditions under with the PJ will refinance existing debt for a HOME-ARP rental project, including:

• Establish a minimum level of rehabilitation per unit or a required ratio between rehabilitation and refinancing to demonstrate that rehabilitation of HOME-ARP rental housing is the primary eligible activity

Not applicable. The City of Baldwin Park does not intend to use HOME -ARP funds on refinancing any existing debt secured by multifamily rental housing.

• Require a review of management practices to demonstrate that disinvestment in the property has not occurred; that the long -term needs of the project can be met; and that the feasibility of serving qualified populations for the minimum compliance period can be demonstrated.

Not applicable.

• State whether the new investment is being made to maintain current affordable units, create additional affordable units, or both.

Not applicable.

• Specify the required compliance period, whether it is the minimum 15 years or longer.

Not applicable.

• State that HOME -ARP funds cannot be used to refinance multifamily loans made or insured by any federal program, including CDBG.

Not applicable.

• Other requirements in the PJ’s guidelines, if applicable:

Not applicable.

STAFF REPORT
ITEM NO. _____13_____

TO: Honorable Mayor and Members of the City Council

FROM: Ron Garcia, Director of Community Development
DATE: March 15, 2023
SUBJECT: Public Hearing to Consider Resolution Setting Cannabis Permit Application Fees & Resolution Setting the Maximum Number of Commercial Cannabis Cultivation, Distribution & Manufacturing Permits

SUMMARY
The purpose of this staff report is to introduce for consideration two Resolutions that would: (1) amend the City’s Planning Fee Schedule to set the fees that will be charged to commercial cannabis permit applicants; and (2) set the maximum number of commercial cannabis cultivation, distribution and manufacturing permits at no more than twenty-one (21).

RECOMMENDATION
It is recommended the City Council open the public hearing and consider any testimony concerning the adoption of the administrative fees, close the public hearing and adopt the following Resolutions: 1. A

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDW IN PARK, CALIFORNIA,

ADOPTING ADMINISTRATIVE FEES RELATING TO COMMERCIAL CANNABIS APPLICATIONS BASED ON TIME AND MATERIALS; and 2. A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF BALDWIN PARK ESTABLISHING THE MAXIMUM NUMBER OF COMMERCIAL CANNABIS

PERMITS RELATED TO MANUFACTURING, CULTIVATION AND DISTRIBUTION

FISCAL IMPACT
There are no fiscal impacts related to the adoption of these Resolutions. Adoption of the Resolution setting the application fees will allow the City to recover its actual costs for processing cannabis permit applications.

BACKGROUND

1. Resolution Adopting Administrative Fees.

In January, 2022 the City received a ballot initiative known as “The Baldwin Park Marijuana Retail Sales Regulation and Taxation Measure” (“Measure”). The stated purpose of the Measure is to: (a) accommodate the needs of medically-ill persons in need of cannabis for medicinal purposes and adults over the age of twenty-one (21), and (b) to impose a general tax applicable to cannabis retailers for the purpose of funding any and all governmental purposes. The Measure allows retail cannabis businesses pursuant to a retail cannabis business permit issued for the ownership or operation of a retail cannabis business. The cannabis retail business permit is in addition to any other permits, licenses, and approvals which may be required by the City to conduct business therein.

With the Measure’s passage, the City needs to update its fee schedule to provide for the review and processing of these applications, including: (1) Cannabis Application (Manufacturing, Cultivation, Distribution), (2) Cannabis Application (Retail), (3) Cannabis Amendment Location Application, and (4) Cannabis Amendment Ownership Application. The City contracts for these services (including professional legal review) to provide them for applicants and operators. Additionally, because of the complexity and size of applicants and permittees, the cost of these services vary widely. Therefore, the City’s approach to levying and collecting these fees is to pass them on directly to applicants on a time and materials basis, subject to an initial deposit based on an estimate of the fees that will be expended. Applicants pay for the services based on the same incremental fee charged to the City by contractors for them.

The City’s procurement of those services requires a competitive process. The City currently has open contracts to provide these services but will be initiating new procurement cycles to cover the expanded services it expects that the Measure will generate.

Public Hearing Needed.

In order to adopt the administrative fees proposed in the Resol ution, the City Council will need to conduct a duly noticed public hearing and receive public testimony concerning the proposed fee structure. After the conclusion of the public hearing, the City Council may adopt the Resolution establishing the proposed fees.

2. Resolution Setting Maximum Cultivation, Manufacturing & Distribution Permits.

On March 1, 2023, the City Council conducted the first reading of an ordinance re- codifying all of the City’s cannabis regulations into sequential chapters in the municipal code (Re- Codification Ordinance). The Re-Codification Ordinance is scheduled for second reading and adoption on March 15, 2023 and will become effective thirty (30) days thereafter. The Re-Codification Ordinance made one change to the current cannabis regulations that would allow the City Council to set the maximum number of cultivation, manufacturing and distribution permits by separate Resolution.

The attached Resolution would set the total number of cultivation, manufacturing and distribution permits at twenty-one (21), pursuant to the direction provided by the City Council at the regular meeting of March 1, 2023. That number can be revisited and increased/decreased at any time by simply adopting a new Resolution. Since the authority to establish the maximum number of permits by separate Resolution of the City Council is contained in the Re- Codification Ordinance (Ordinance No. 1501), and that ordinance will become effective 30 days from March 15, 2023, this proposed Resolution will also become effective on that date.

ALTERNATIVES

1.) Fee Resolution. The City Council may decide that an alternative fee structure is appropriate or subsidize cannabis permit fee applications.

2.) Maximum Permit Resolution. The City Council may decide to set the maximum permit fees for cultivation, distribution, manufacturing permits at higher (or lower) limits.

3) Provide alternative direction to staff.

CEQA REVIEW

THE CITY COUNCIL FINDS THAT THESE RESOLUTIONS ARE NOT SUBJECT TO THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) PURSUANT TO SECTIONS 15060(C)(2) (THE ACTIVITY WILL NOT RESULT IN A DIRECT OR REASONABLY FORESEEABLE INDIRECT PHYSICAL CHANGE IN THE ENVIRONMENT), AND 15060(C)(3) (THE ACTIVITY IS NOT A PROJECT AS DEFINED IN SECTION 15378) OF THE CEQA GUIDELINES, CALIFORNIA CODE OF REGULATIONS, TITLE 14, CHAPTER 3, BECAUSE IT HAS NO POTENTIAL FOR RESULTING IN PHYSICAL CHANGE TO THE ENVIRONMENT, DIRECTLY OR INDIRECTLY.

LEGAL REVIEW
This report has been reviewed and approved by the City Attorney as to legal form and content.

ATTACHMENTS

1. Fee Resolution (with Attachment)

2. Maximum Number of Permits Resolution
65431.00101\41080039.1

RESOLUTION NO. 2023-011

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

BALDWIN PARK, CALIFORNIA, ADOPTING

ADMINISTRATIVE FEES RELATING TO COMMERCIAL

CANNABIS APPLICATIONS BASED ON TIME AND

MATERIALS

WHEREAS, at the November 8, 2022 General Municipal E lection, a majority of Baldwin Park voters approved Measure CB, “The Baldwin Park Marijuana Retail Sales and Taxation Measure (“Measure CB”) and
WHEREAS, Measure CB contains (1) a statement of Purpose of Intent and (2) findings, which are incorporated i n this Resolution by this reference as if fully set forth herein; and
WHEREAS, on March 1, 2023 and on March 15 , 2023 the City Council introduced for first reading then adopted an Ordinance of the City Council re -codifying certain provisions of the Munic ipal Code relating to cannabis production and sales and implementing Measure CB as part of the Baldwin Park Municipal Code (“Re-Codification Ordinance); and
WHEREAS, Measure CB and the Re -Codification Ordinance contemplate various permits, licenses, and o ther City approvals and ongoing monitoring necessary for the establishment and operation of commercial cannabis businesses; and WHEREAS, the City Council determines that the costs of providing these City services should be borne by such applicants and commercial businesses; and WHEREAS, the City maintains a Planning Fee Schedule pursuant to its authority under Article XI, Section 7 of the California Constitution and Government Code Section 66000, et seq ., imposing and establishing fees, charges and rates for certain City services;
WHEREAS, under the Planning Fee Schedule, many application-related costs , including those for cannabis business applications, are billed on a time and materials basis to the City and passed on to the applicant , with the applicant paying an initial deposit against which initial charges are billed, and the applicant ultimately owing the full cost of processing the application;
WHEREAS, Measure CB contemplates the provision of several new City services relating to applications for and monitoring of cannabis businesses; and WHEREAS, given these considerations, as contemplated in the Municipal Code and Measure CB, the City Council directed that s taff prepare an amended Planning Fee Schedule to provide for recovery of costs of reviewing cannabis business applications on a time and materials basis as direct recoupment of the City’s costs of contracting for these services;
65431.00101\41080039.1

WHEREAS, Article XXXI C, S ection 1, subdivision (e) of the California Constitution provides that a “tax” does not in clude: (1) a charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege, (2) a charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product, (3) a charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, and the administrative enforcement and adjudication thereof, (4) a charge imposed fo r entrance to or use of local government property, or the purchase, rental, or lease of local government property, and (5) a charge imposed as a condition of property development; and

WHEREAS, Government Code, S ection 66018 provides that prior to adopti ng certain fees the City must provide notice and conduct a public hearing; and

WHEREAS, the City complied with Government Code, S ection 66018 prior to imposing the application fees set for in this Resolution.

WHEREAS, the City Council finds that amendi ng the Planning Fee Schedule to provide for these pass -through fees is in the best interest of the City to promote its continued financial stability by having businesses that benefit from these services bear the City’s costs of providing them.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BALDWIN PARK,

CALIFORNIA, DOES HEREBY RESOLVE, DETERMINE, FIND AND ORDER AS FOLLOWS:

SECTION 1. Incorporation of Recitals. The foregoing recitals are true and correct and are hereby incorporated and made an operative part of this Resolution.

SECTION 2 . Fee Schedule Amendment. The City’s Planning Fee Schedule is hereby amended to read as shown in Attachment “A” hereto.

SECTION 3. Accounting of Costs. City staff shall maintain an account of actual costs of time and mat erials associated with the services subject to time and materials fees to be charged against the deposits indicated in the Schedule, with deposits replenished as City staff sees fit. In the event actual costs to the City are less than the deposit paid, the City shall refund any excess costs to the applicant.

SECTION 4. CEQA. The City Council finds that this Resolution is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a dir ect or reasonably foreseeable indirect physical change in the environment), and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly.
65431.00101\41080039.1

SECTION 5. Severability. The provisions of this Resolution are severable and if any provision of this Resolution is held invalid, that provision shall be severed from the Resolution and the remainder of this Resolution shall continue in full force and effect, and not be affected by such invalidity.

SECTION 6. Certification & Effective Date. The Mayor shall sign this Resolution and the City Clerk shall certify to the adoption thereof. The fees set forth in Attachment “A” are hereby adopted and effective upon adoption.

PASSED, APPROVED AND ADOPTED this 15th day of March, 2023.

EMMANUEL J. ESTRADA
MAYOR

ATTEST:

STATE OF CALIFORNIA
COUNTY OF LOS ANGELES SS.

CITY OF BALDWIN PARK

I, CHRISTOPHER SAENZ , City Clerk, of the City of Baldwin Park, do hereby certify that the foregoing Resolution No. 2023-011 was duly and regularly approved and adopted by the City Council of the City of Baldwin Park at a regular meeting thereof, held on the 15th day of March 2023 by the following vote:

AYES: COUNCIL MEMBERS:___________________________________

NOES: COUNCIL MEMBERS:___________________________________

ABSENT: COUNCIL MEMBERS:___________________________________

ABSTAIN: COUNCIL MEMBERS:___________________________________

_________________________________

CHRISTOPHER SAENZ

CITY CLERK

65431.00101\41080039.1

ATTACHMENT A

EXHIBIT A
FY 2021-22 Fee (Existing)
FY 2022-23 Proposed Fee
Change
Change-Increase (Decrease)
Comments
ADMINISTRATIVE ADJUSTMENT $600
AMENDMENT TO ZONING CODE/GEN.PLAN/ZONE CHANGE
FBHR of staff time + actual cost of City
Attorney.
($3,400 deposit required per case)

DEVELOPMENT PLAN/AGREEMENT
FBHR of staff time + actual cost of City
Attorney.
($2,915 deposit required per case)

SPECIFIC PLAN
FBHR of staff time + actual cost of City
Attorney.
($2,915 deposit required per case)

CONDITIONAL USE PERMIT/ ZONE VARIANCE
FBHR of staff time + actual cost of City
Attorney.
($1,750 deposit required per case)
ACCESSORY DWELLING UNIT (ADU) REVIEW $1,000
URBAN LOT SPLIT / SECOND UNIT DEVELOPMENT (SB9)
FBHR of staff time + actual cost of City
Attorney.
($1,000 deposit required per case)
SIDEWALK VENDING APPLICATION $120
CANNABIS APPLICATION (Manufacturing, Cultivation,
Distribution)
$2,972.29
+ CCA Admin Fee
FBHR of staff time + actual cost of
City Attorney and hourly cost of
consultant per hour.
($50,000 deposit required per case)FLAT RATE FEE to DEPOSIT BASED FEE CANNABIS APPLICATION (Retail)
FBHR of staff time + actual cost of City
Attorney and hourly cost of consultant per
hour.
($50,000 deposit required per case) NEW FEE
CANNABIS AMENDMENT LOCATION APPLICATION $2,259.30
FBHR of staff time + actual cost of
City Attorney and hourly cost of
consultant per hour.
($30,000 deposit required per case)FLAT RATE FEE to DEPOSIT BASED FEE CANNABIS AMENDMENT OWNERSHIP APPLICATION $2,259.43
FBHR of staff time + actual cost of
City Attorney and hourly cost of
consultant per hour.
($15,000 deposit required per case)FLAT RATE FEE to DEPOSIT BASED FEE TREE REMOVAL PERMIT $90 + $50 for each additional tree
COVENANT PREPARATION $118

MODEL HOME MARKETING COMPLEX PLAN
FBHR of staff time + actual cost of City
Attorney.
$1,000 deposit required per case)

LANDSCAPE PLAN REVIEW -RESIDENTIAL
FBHR of staff time + hourly cost of consultant
per hour
($1,250 deposit required)

LANDSCAPE PLAN REVIEW -COMMERCIAL
FBHR of staff time + hourly cost of consultant
per hour
($2,500 deposit required)
Negative declaration
Actual Consultant Cost plus FBHR of staff time
($10,000 deposit required)
Mitigated negative declaration
Actual Consultant Cost plus FBHR of staff
time ($10,000 deposit required)

ENVIRONMENTAL IMPACT REPORT REVIEW
Actual Consultant Cost plus FBHR of staff
time ($10,000 deposit required)

ENVIRONM'L IMPACT RPT PROCESSING
Actual Consultant cost plus FBHR of staff time
($10,000 deposit required)
MAP COPY SERVICE $11.22 per hard copy

APPEAL TO ZONING ADMINISTRATOR
FBHR of staff time + non-refundable $951
filing fee

APPEAL TO PLANNING COMMISSION
FBHR of staff time + non-refundable $951
filing fee

APPEAL TO THE CITY COUNCIL
FBHR of staff time + non-refundable $951
filing fee
TIME EXTENSION $612

SIGN PROGRAM REVIEW
FBHR of staff time + actual cost of City
Attorney.
($1,170 deposit required per case)
TEMPORARY SIGN PERMIT $21
PERMANENT SIGN PERMIT $70
ZONING CONFORMANCE LETTER $325.00
OUTDOOR DISPLAY REVIEW $175.00
< 5,000 sq.ft. $367
> 5,000 sq.ft. $610
OUTDOOR DINING REVIEW $175

GENERAL PLAN SURCHARGE
< $100,000 0.75% of value
> $100,000 $750+0.50% of value over $100,000
Minimum amount $26
BUSINESS LICENSE REVIEW $11
PLANNING PLAN REVIEW SURCHARGE (% of the building
valuation) 0.23% of value ($45 minimum)
Commercial/Industrial
Residential

PLANNING DESIGN REVIEW
Combined and see above

CITY OF BALDWIN PARK

PLANNING FEE SCHEDULE
Planning Entitlement
1 of 2

EXHIBIT A CITY OF BALDWIN PARK

PLANNING FEE SCHEDULE

TENTATIVE PARCEL MAP
FBHR of staff time + actual cost of City
Attorney.
($3,500 deposit required)

TENTATIVE TRACT MAP
FBHR of staff time + actual cost of City
Attorney.
($4,080 deposit required)
PRELIMINARY PLAN REVIEW $1,749

PRELIMIARY PLAN REVIEW (DOWNTOWN)
FBHR of staff time + hourly cost of consultant
per hour
($2,000 deposit required)

PRELIMINARY PLAN REVIEW (MIXED-USE)
FBHR of staff time + hourly cost of consultant
per hour
($2,500 deposit required)
PLANNING DESIGN REVIEW**
Industrial/Commercial/Office No. of Residential Maximum Industrial / Commercial / Office New Construction - Square Footage Dwelling Units Remodel Value 1-1,000 1 $100,000 $428
1,001-3,000 2-4 $200,000 $611
3,001-6,000 5-6 $400,000 $823
6,001-10,000 7-10 $700,000 $1,065
10,001-15,000 11-15 $1,000,000 $1,490
15,001-20,000 16-20 $1,500,000 $1,793
20,001-27,000 21-25 Over $1,500,000 $2,095
27,001-35,000 26-35 $2,401
35,001-45,000 36-45 $2,763
45,001-60,000 46-60 $3,156
60,001-100,000 61-100 $3,612
100,001-150,000 101-150 $4,068
Over 150,000 Over 150 $4,674
* FBHR is the fully burdened hourly rate of a position that includes salary, benefits, and applicable overhead (for operational and administrative support). ** Fee, Plus FBHR of staff time after the first two plan reviews Fee

BILLBOARD REVENUE FEE VARIES BY DA
COMMERCIAL CANNABIS AGREEMENT ADMIN FEE (CCA) $15,000 Removal of Existing Admin Fee Cannabis PD Mitigation Impact Fee $50,000 Removal of PD Fee COMMERCIAL CANNABIS ANNUAL FEE VARIES BY DA VARIES BY CCA Revised from DA to CCA FLOOD CONTROL DEV. IMPACT FEE VAIERIES BY SQ.FT. OF ROOF AREA LAW ENFORCEMENT DEV. IMPACT FEE VARIES BY PROJECT

PARKLAND IN LIEU FEE VARIES BY PROJECT

PUBLIC ART FEE VARIES BY PROJECT

TRAFFIC CONGRESTION RELIEF VARIES BY PROJECT

GENERAL PLAN SURCHARGE
< $100,000
> $100,000 $750+0.50% of value over $100,000
Minimum amount $26
PLANNING PLAN REVIEW SURCHARGE (% of the building valuaƟon) 0.23% of value ($45 minimum) Commercial/Industrial Combined and see above
Residential
2 of 2
RESOLUTION NO. 2023-012

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

BALDWIN PARK ESTABLISHING THE MAXIMUM

NUMBER OF COMMERCIAL CANNABIS PERMITS

RELATED TO MANUFACTURING, CUL TIVATION AND

DISTRIBUTION

WHEREAS, the City Council of the City of Baldwin Park (“City”) initiated its Cannabis Program in August of 2017 with the adoption of two ordinances , summarized below:

1. Ordinance No. 1400 to add Chapter 127 to the Baldwin Park Municipal Code establishing medical and adult use cannabis business regulati ons; and

2. Ordinance No. 1401 to amend the City’s zoning regulations to allow medical and adult use cannabis cultivation, dist ribution and manufacturing uses; and

WHEREAS, O n November 3, 2021, the City Council adopted Ordinance Nos. 1460 and 1461 to amend various provisions of the City’s cannabis regulations to require that cannabis businesses obtain a development agreement issued pursuant to California Government Code, Section 65864 et. seq. and limit the total number of cannabis permits issued; and

WHEREAS. Baldwin Park Municipal Code, Section 153.170..120(D) provided that:
“(D) Maximum number of commercial cannabis permits. No more than 25 permits, each with a maximum of 22,000 square feet of permitted commercial cannabis activity may be allowed, maintained, or operated in the city at any time; except that, distribution only, shall be allowed a maximum of 40,000 square feet.”

WHEREAS, In November of 2022, Baldwin Park voters approved Measure CB - a ballot initiative that amended the Baldwin Park Municipal Code to authorize the sale and delivery of medical cannabis and cannabis products to persons 18 years and older and adult-use cannabis and cannabis products to persons 21 years or older if a person obtains a retail cannabis business permit and meets certain additional conditions; and

WHEREAS, Measure CB also imposed a general tax on cannabis retailers; and

WHEREAS, on March 1, 2023, the City Council passed first reading of an ordinance to recodify, re -order and amend its adopted cannabis regu lations to make them consistent with each other and organize them in a manner that promotes ease of administration (Re-Codification Ordinance); and

WHEREAS, the Re-Codification Ordinance also amended Baldwin Park Municipal Code, Section 153.170.120(D) to read, in part, as follows:

“(D) Maximum number of commercial cannabis permits. The maximum number of commercial cannabis permits shall be established by separate resolution of the City Council...” and

WHEREAS, as part of the consideration of the Re -Codification Ordinance, the City Council directed staff to prepare a Resolution establishing the maximum number of commercial cannabis permits for purposes of manufacturing, cultivation and distribution; and

WHEREAS, the purpose of this Resolution is to es tablish the maximum number of permits for manufacturing, cultivation and distribution pursuant to the amendments made by the Re-Codification Ordinance; and

WHEREAS, the Resolution does not amend any provision related to Measure CB; and

NOW, THEREFORE, TH E CITY COUNCIL OF THE CITY OF BALDWIN PARK DOES HEREBY RESOLVE, FIND, DETERMINE AND ORDER AS FOLLOWS:

SECTION 1. The above recitals are true and correct and are incorporated herein by this reference.

SECTION 2. The City Council hereby determines that:

1. The maximum number of commercial cannabis permits for manufacturing, cultivation and/or distribution shall be set at a maximum of twenty-one (21) permits.

2. The limitation in subsection 1 (above) shall not apply to commercial cannabis retailers established pursuant to the provisions of Measure CB.

SECTION 3. CEQA. The City Council finds that this Resolution is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment), and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for re sulting in physical change to the environment, directly or indirectly.

SECTION 4. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provision s o r applications, and to this end the provisions of this Resolution are declared to be severable.

SECTION 5. Effective Date . This Resolution shall become effective upon the effective date of Ordinance No. 1501.

PASSED AND APPROVED this 15th day of March 2023.

______________________________________
EMMANUEL J. ESTRADA
MAYOR

ATTEST:

STATE OF CALIFORNIA
COUNTY OF LOS ANGELES SS.

CITY OF BALDWIN PARK

I, CHRISTOPHER SUAREZ, City Clerk, of the City of Baldwin Park, do hereby certify that the foregoing Resolution No. 2023-012 was duly and regularly approved and adopted by the City Council of the City of Baldwin Park at a regular meeting thereof, held on the 15th day of March 2023 by the following vote:

AYES: COUNCIL MEMBERS:___________________________________

NOES: COUNCIL MEMBERS:___________________________________

ABSENT: COUNCIL MEMBERS:___________________________________

ABSTAIN: COUNCIL MEMBERS:___________________________________

_________________________________

CHRISTOPHER SUAREZ

CITY CLERK

STAFF REPORT
ITEM NO. _____14_____

TO: Honorable Mayor and Members of the City Council
FROM: Enrique C. Zaldivar, City Manager
DATE: March 15, 2023
SUBJECT: Adoption of Resolution No. 2023 -006 for City Council Appointments of Official Representatives and Alternates to Various Agencies/Organizations.

SUMMARY
City Council official representation in several agencies and organizations where the City is a Member by action of the City Council where representatives and alternates are appointed by the City Council by Resolution. The 2023-2025 resolution is herein presented for approval.

RECOMMENDATION
It is recommended that the City Council nominate and appoint by a roll-call vote the official designated representatives and alternates and adopt Resolution No. 2023- 006, the names of selected delegates will be added to the Resolution in a final format with the certified votes and appropriate signatures.

FISCAL IMPACT
None.

BACKGROUND
Maintaining an active and participatory engagement in regional government affairs is paramount to the furtherance of the business interest of the City. Sharing and learning of best practices in city government is part and parcel of the participation in the many organizations that the City is a member in good standing. The City is a member of regional government districts like the LA County Sanitation Districts and the San Gabriel Valley Mosquito and Vector Control District where our membership is obligatory.

DISCUSSION
One new organization is added to the list of organizations: the Community Collaborative Committee, a joint committee made up of the City of Baldwin Park and the Baldwin Park Unified School District (BPUSD). In previous years, this group had been unofficially referred to as the 2 plus 2 Committee. It had been mostly dormant for the last three years, it is the intent of both entities to fully reactivate it with so many areas of collaboration and mutual interests at hand, under the official name of the Community Collaborative Committee (CCC). While the City had participated in it in the past, the official designation of the City Council delegates had not been included in the resolution, until now. This Committee is itemized as Section 14., the listed appointees, Councilmember Damian as Representative and Mayor Estrada as Alternate were approved and appointed as Resolution No. 2023-003 at the March 15, 2023 City Council meeting by a 4-0 Vote.

LEGAL REVIEW
This report has been reviewed and approved by the City Attorney as to legal form and content.

ATTACHMENTS

1. Resolution No. 2023-006 Official Representatives and Alternates for 2023-2025.

RESOLUTION NO. 2023-006

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN

PARK, CALIFORNIA, APPOINTING REPRESENTATIVES AND

ALTERNATES AS OFFICIAL REPRESENTATIVES OF THE CITY
WHEREAS, it is the Council’s desire to review and/or amend the existing appointments; and
WHEREAS, Resolution No. 2020-065 adopted December 16, 2020 and all other Resolutions inconsistent herewith are hereby repealed and rescinded. Resolution No. 2023-003 Section 14 was adopted February 15, 2023.

NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF BALDWIN PARK HEREBY RESOLVES AS FOLLOWS:

Section 1. The City Council of the City of Baldwin Park does hereby appoint the following persons as representative and alternate members of the San Gabriel Valley Water Association – Quarterly luncheon held in various locations (MEMBERS RECEIVE A STIPEND – NO)
Existing Appointees New Appointees
Representative: Council Member Paul C. Hernandez
Alternate: Mayor Emmanuel J. Estrada
Section 2. The City Council of the City of Baldwin Park does hereby appoint the following persons as representative and alternate members of the Los Angeles County Sanitation District Nos. 15 & 22 – 4 th Wednesday at 1:30 p.m.; Joint Administration Office
(MEMBERS RECEIVE A STIPEND – $125 per meeting)
Existing Appointees New Appointees
Representative: Mayor Emmanuel J. Estrada
Alternate: Council Member Monica Garcia
*Appointment of Mayor required by Sanitation District
Section 3. The City Council of the City of Baldwin Park does hereby appoint the following persons as representative and alternate members of the League of California Cities – Los Angeles County Division – 1st Thursday at 6:00 p.m.; various locations (MEMBERS RECEIVE A STIPEND – NO)
Existing Appointees New Appointees
Representative: Council Member Alejandra Avila
Alternate: Council Member Daniel Damian
Section 4. The City Council of the City of Baldwin Park does hereby appoint the following persons as representative and alternate members of the Civil Defense Area “D” General Membership Meeting – 3rd Thursday at 8:30 a.m.; Area D Office (MEMBERS RECEIVE A STIPEND – NO)

Existing Appointees New Appointees
Representative: Chief of Police Chief of Police
Alternate: Mayor Emmanuel J. Estrada
Section 6. The City Council of the City of Baldwin Park does hereby appoint the following persons as representative and alternate members of the Independent Cities Association – 2nd Tuesday at 7:00 p.m.; rotating Council Chambers (MEMBERS RECEIVE A STIPEND – NO)
Existing Appointees New Appointees
Representative: Council Member Paul C. Hernandez
Alternate: Council Member Alejandra Avila
Section 7. The City Council of the City of Baldwin Park does hereby appoint the following persons as representative and alternate members of the Independent Cities Association Lease Finance Authority – As Needed Basis in various times/locations (MEMBERS RECEIVE A STIPEND – $150 per meeting)
Existing Appointees New Appointees
Representative: Council Member Daniel Damian
Alternate: Chief of Police Chief of Police
Section 8. The City Council of the City of Baldwin Park does hereby appoint the following persons as representative and alternate members of the Los Angeles County – City Selection Committee – As Needed Basis in various times/locations (MEMBERS RECEIVE A STIPEND – NO)

Existing Appointees New Appointees
Representative: Mayor Emmanuel J. Estrada
Alternate: Council Member Monica Garcia
*Appointment of Mayor required by State Law
Section 9. The City Council of the City of Baldwin Park does hereby appoint the following persons as representative and alternate members of the Southern California Association of Governments – Annual Conference in the month of May (MEMBERS RECEIVE A STIPEND – NO)
Existing Appointees New Appointees
Representative: Council Member Monica Garcia
Alternate: Council Member Paul C.

Hernandez
Section 10. The City Council of the City of Baldwin Park does hereby appoint the following persons as representative and alternate members of the Foothill Transit Zone – Last Friday of the Month at 7:45 a.m.; Foothill Transit Administrative Offices (MEMBERS RECEIVE A STIPEND – $161 per meeting)
Existing Appointees New Appointees
Representative: Council Member Daniel Damian
Alternate: Mayor Emmanuel J. Estrada
Section 11. The City Council of the City of Baldwin Park does hereby appoint the following persons as representative and alternate members of the California Contract Cities Association (CCCA) – 3rd Wednesday at 6:00 p.m. in various locations (MEMBERS RECEIVE A STIPEND – No)
Existing Appointees New Appointees
Representative: Council Member Monica Garcia
Alternate: Mayor Emmanuel J. Estrada
Section 12. The City Council of the City of Baldwin Park does hereby appoint the following persons as representative and alternate members of the Governing Board of the San Gabriel Valley Mosquito and Vector Control District–2 nd Friday at 10:00 a.m. in the District Office
(MEMBERS RECEIVE A STIPEND – $100 per meeting)
Existing Appointees New Appointees
Representative: Mayor Emmanuel J. Estrada
Alternate:
*Not required
Section 13. The City Council of the City of Baldwin Park does hereby appoint the following persons as representative and alternate members of the San Gabriel Valley Council of Governments – 3rd Thursdays at 4:00 p.m. at the Foothill Transit Office (MEMBERS RECEIVE A STIPEND – $75 per meeting)
Existing Appointees New Appointees
Representative: Mayor Emmanuel J. Estrada
Alternate: Council Member Danny Damian
Section 14. The City Council of the City of Baldwin Park does hereby appoint the following persons as representative and alternate members of the Community Collaborative Committee – City of Baldwin Park and the Baldwin Park Unified School District – Meets on As Needed Basis (MEMBERS RECEIVE A STIPEND – NO) Existing Appointees New Appointees
Representative: Reactivate Committee Councilmember Daniel Damian Alternate: Reactivate Committee Mayor Emmanuel J. Estrada *New Appointees were appointed and adopted at the February 15, 2023 Council meeting by a 4-0 Vote.

Section 15. That the City Clerk shall certify to the adoption of this Resolution and shall forward copies hereof to said committees and organizations.

PASSED, APPROVED, AND ADOPTED this 15th day of March, 2023.

_______________________________
EMMANUEL J. ESTRADA
MAYOR
ATTEST:

STATE OF CALIFORNIA
COUNTY OF LOS ANGELES SS:

CITY OF BALDWIN PARK
I, Christopher Saenz, City Clerk of the City of Baldwin Park do hereby certify that the foregoing Resolution No. 2023-006 was duly adopted by the City Council of the City of Baldwin Park at a regular meeting thereof held on March 15, 2023 and that the same was adopted by the following vote to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

CHRISTOPHER SAENZ

CITY CLERK

STAFF REPORT
ITEM NO. ____15_____

TO: Honorable Mayor and Members of the City Council
FROM: Enrique C. Zaldivar, City Manager
Karina Rueda, Human Resources/Risk Manager
DATE: March 15, 2023
SUBJECT: Consideration of First Amendment to Chief of Police Employment Agreement - Robert A. Lopez

SUMMARY
The purpose of this staff report is to authorize an amendment to the Chief of Police Employment Agreement to amend the annual compensation provided to the Chief of Police.

RECOMMENDATION
It is recommended that the City Council approve the First Amendment to the Chief of Police Employment Agreement.

FISCAL IMPACT
The current base salary for the Chief of Police is $17,535.28 monthly or $210,424.55 annually (Step 1). Approval of the First Amendment will increase the annual salary by $21,568.51 which equates to $19,332.76 monthly or $231,993.06 annually (Step 3), effective January 8, 2023.

BACKGROUND
On February 17, 2021, the City entered into an Employment Agreement with Robert A. Lopez to serve as Chief of Police. The Employment Agreement memorialized the terms and conditions of his employment and set his base salary at $16,690.82 monthly or $200,289.88 annually. The salary corresponded to Step 1 of the City’s Salary Schedule.

The City Council recently completed a performance evaluation of the Chief of Police’s performance. As part of that evaluation, the City Council considered certain changes to the current salary and benefit package and provided direction to the Chief Executive Officer to discuss these changes with the Chief of Police. Those discussions have culminated in the attached changes to the Chief’s Employment Agreement.

Specifically, the attached First Amendment would amend the Chief’s annual salary by increasing t he amount by $21,568.51 annually, which equates to $19,332.76 monthly or $231,993.06 annually. This new annual salary corresponds to Step 3 of the City’s Salary Schedule. The City Council approves a salary range for every classification in the City staff . The annual salary range for the Chief of Police, as of the date of this report is $210,424.55 at Step 1 and $255,772.35 at Step 5. The three most recent previous Chiefs of Police were placed at either Step 3 or Step 5 when initially appointed. Chief Lopez was placed at Step 1 when initially appointed. Thus, this salary increase would be consistent with those initial salaries. No other changes to the Employment Agreement are proposed.

SB 1486 (2016) requires the City Council/City to orally report a sum mary of a recommendation for a final action on the salaries, salary schedules, or compensation paid in the form of fringe benefits of a

local agency executive during the open meeting in which the final action is to be taken. Thus, we will be providing a brief staff report summarizing the terms prior to taking action.

ALTERNATIVES
Provide alternative direction to staff.

LEGAL REVIEW
This report has been reviewed and approved by the City Attorney as to legal form and content.

ATTACHMENTS

1. First Amendment to Chief of Police Employment Agreement

STAFF REPORT
ITEM NO. ___16____

TO: Honorable Mayor and Members of the City Council

FROM: Manuel Carrillo Jr., Director of Recreation & Community Services
DATE: March 15, 2023
SUBJECT: Request Direction for the Baldwin Holiday Parade

SUMMARY
This report requests City Council to provide direction for the Baldwin Park Holiday Parade scheduled to take place on Saturday, December 2, 2023.

RECOMMENDATION
It is recommended that the City Council;

1.) Select Option for Baldwin Park Holiday Parade or provide an alternative direction; and

2.) Authorize the Recreation & Community Services Director to secure adjudication services for the Baldwin Park Holiday Parade.

FISCAL IMPACT
There is no fiscal impact to the General Fund at this time.

BACKGROUND
On Saturday, December 3, 2022, the City hosted its First Baldwin Park Holiday Parade. The parade kicked off the Holiday season with a breakfast, parade, and holiday boutique. At the event City Council expressed an interest to enhance the event with other activities and possibly an evening parade.

Subsequently, staff has identified the following options:

Option AM
Time Activity Location
8:00am-11:00am Breakfast with Santa Community Center
11:00am-4:00pm Winter Fest (snow play areas) Morgan Park 4:45pm-6:45pm Holiday Parade Baldwin Park Blvd. to Morgan Park 7:00pm-7:45pm Parade Awards Ceremony Cesar E. Chavez Amphitheater

Option PM
Time Activity Location
7:30am-10:00am Breakfast with Santa Community Center
10:00-12:00pm Holiday Parade Baldwin Park Blvd. to Morgan Park 12:00pm-5:00pm Winter Fest (snow play areas) Morgan Park 1:30pm-2:15pm Parade Awards Ceremony Cesar E. Chavez Amphitheater

The budget will be included during the FY23/24 Budget process for City Council’s consideration.

ALTERNATIVES
The City Council may elect not to approve the Baldwin Park Holiday Parade at this time.

LEGAL REVIEW
Not Applicable.

STAFF REPORT
ITEM NO. _____17_____

TO: Honorable Mayor and Members of the City Council
FROM: Enrique C. Zaldivar, City Manager
DATE: March 15, 2023
SUBJECT: Approval and Adoption of Resolution No. 2023 -007 and Consideration of a Memorandum of Understanding (MOU)
with Goodwill Southern California to Re -Establish the
NextGen Youth Workforce Program.

SUMMARY
The purpose of this staff report is to consider a Memorandum of Understanding (MOU) for a term of one year with Goodwill Southern California (GSC) to continue the NextGen Youth Workforce Program (NextGen) for Summer 2023. The program is intended to provide Baldwin Park youth with paid employment opportunities, including at -risk youth. It will be implemented in coordination and in partnership with the Baldwin Park Unified School District and the Baldwin Park Business Association.

RECOMMENDATION
It is recommended that the City Council: 1. Approve Resolution No. 2023-007 and the proposed MOU with the GSC; and 2. Authorize the Mayor to execute the MOU; and 3. Confirm the appropriation of $68,507 of American Rescue Plan Act (ARPA) funds carried over from 2022 for Summer 2023; and 4.

Authorize the CEO to make technical adjustments as may be necessary to carry out the direction of City Council.

FISCAL IMPACT
There is no General Fund fiscal impact with the approval of this MOU. Funding for the program will be provided primarily by GSC as part of the LA County’s Youth@Work Program. Last year the City Council approved appropriating $127,000 from the American Rescue Plan Act (ARPA) Community Assistance programs, (account 275-25-719-51101-17518) to cover the cost of the program for the month of June 2022. This was due to students finishing in early June but GSC fiscal budget not re- starting until July.

Of this, $58,493 were utilized, leaving approximately $68,507 available for this year’s program. For this year, GSC has advised that they will also need gap funding for the month of June, for which the $68,507 will be allocated. Any available remaining balance of $68,507 will be available as a backup beyond just the month of June and used as the funding source when other GSC programs restrictions limit job opportunities, such as traveling restrictions.

BACKGROUND
On May 18th, 2022, the City Council approved a one year MOU with GSC to establish the NextGen Youth Workforce Program. The purpose of the program is to provide employment opportunities for local youth, including at -risk youth that offered constructive options while on summer break and also assisting employers with hiring needs. The program targeted the 14-24 age group and proved to be a success with 71 youth going through the program. GSC’s year-round ongoing efforts through all their multiple funding programs have successfully on-boarded a total of 335 Baldwin Park residents for 2022-

23 (See Attachment 3).

GSC proved to be instrumental in this success as it is the primary workforce services provider in the area and was able to provide pay to participating youth for 120 hours, 20 of which would be for job readiness training.

Staff is now working to implement the program once again for summer 2023, which would require a new MOU. The MOU would facilitate data sharing and establish roles and responsibilities, including once again establishing the city as a job site for the program.

Goals for this second year include the following:

· Hold a city-wide job fair in May 2023.
· Start youth recruitment earlier this year.
· Expand employment opportunities beyond the City.
· Expand efforts to reach the 18–24-year-old youths not in school. · Expand placement in other City departments other than Recreation and Community Services. · Enlist a partnership with Kaiser Permanente.

GSC will act as the Program Administrator and employer of record for all the youth hiring related to the NextGen Program. As the employer of record GSC will provide participating youth with their pay and provide all appropriate insurance.

ALTERNATIVES
The City Council may decide not to pursue this MOU.

LEGAL REVIEW
This report has been reviewed and approved by the City Attorney as to legal form and content.

ATTACHMENTS

1. Resolution No. 2023-007

2. Memorandum of Understanding (MOU)

3. GSC’s Baldwin Park Residents Served Data

RESOLUTION NO. 2023-007

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN

PARK APPROVING A MEMORANDUM OF UNDERSTANDING (MOU)

BETWEEN THE CITY OF BALDWIN PARK AND GOODWILL
SOUTHERN CALIFORNIA (“GSC”) FOR THE PURPOSES OF RE-

ESTABLISHING THE NEXTGEN YOUTH WORKFORCE PROGRAM
WHEREAS, the City of Baldwin Park has identified the need for employment opportunities for at-risk youth that offer them constructive options; and

WHEREAS, the City of Baldwin Park acknowledges the collaborative benefits of partnering with GSC on re-establishing the NextGen Youth Workforce Program; and

WHEREAS, GSC is contracted to provide workforce programs in the area and is able to provide pay to participating youth for 120 hours; and WHEREAS, GSC will recruit program participants, provide initial assessment of potential participants, provide job readiness training, provide supportive services such as work clothing and transportation assistance, employment referrals, overall program monitoring; and
WHEREAS, the City of Baldwin Park will participate in implementing the program by assisting in outreach to youth and employers, assisting in promoting the program through the use of city resources, providing access to city facilities, providing employment opportunities in various city departments and promoting program successes.

NOW THEREFORE BE IT HEREBY RESOLVED, by the City Council of the City of Baldwin Park as follows:

1. That based upon the acknowledged need of an at-risk youth employment program that would benefit City of Baldwin Park residents. The City Council finds and determines that an MOU between the City of Baldwin Park and GSC that would formalize the re-establishment of the NextGen Youth Workforce would assist in addressing this need.

2. That the MOU between the City of Baldwin Park and GSC, a copy of which is attached as Attachment 2, is hereby approved. This authorization confers upon the Mayor or his designee the authority to sign the MOU on behalf of the City and to take such other and further actions as may be necessary and proper to carry out the terms of the MOU and the purpose of this Resolution.

3. This resolution shall become effective immediately upon its approval.

4. The City Clerk shall certify as to the adoption of this City Council Resolution.

PASSED, APPROVED, AND ADOPTED this 15th day of March 2023.

EMMANUEL J. ESTRADA
MAYOR
ATTEST:

STATE OF CALIFORNIA
COUNTY OF LOS ANGELES SS:

CITY OF BALDWIN PARK
I, CHRISTOPHER SAENZ, City Clerk of the City of Baldwin Park do hereby certify that the foregoing Resolution No. 2023-007 was duly adopted by the City Council of the City of Baldwin Park at a regular meeting thereof held on March 15, 2023 and that the same was adopted by the following vote to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

CHRISTOPHER SAENZ

CITY CLERK
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Memorandum of Understanding 1

MEMORANDUM OF UNDERSTANDING

PURPOSE: The purpose of this Memorandum of Understanding (hereafter referred to as “MOU”) is to enter into an agreement between Goodwill Southern California (hereafter referred to as “GSC”) and the City of Baldwin Park, a public body, corporate and politic (“City”). GSC and the City are referred to as “Party” or “Parties”.

1. This MOU is entered into in a spirit of cooperation by the signatory agencies in order to maximize utilization of resources in serving youth in general, and at-risk youth job seekers and employers. It is understood that the development, implementation and ultimate success of GSC and the establishment of the NextGen Youth Workforce Program requires mutual trust and teamwork between agencies working together to accomplish common goals. The intent of this MOU is to establish the operational collaboration between GSC and the City.

2. PARTIES: The Parties to this MOU are:

Goodwill Southern California
342 N. San Fernando Road
Los Angeles, CA 90031
323-539-2049
Attn: Patrick McClenahan
President & CEO

And

City of Baldwin Park
14403 E. Pacific Avenue
Baldwin Park, CA 91706
Attn: Enrique C. Zaldivar
Chief Executive Officer

3. DURATION OF AGREEMENT: This MOU shall become effective March 15, 2023 and terminate May 1, 2024.

A. Modification: This MOU may be modified with the approval of both Parties, provided both Parties sign the revised MOU. A modification request must be presented in writing, 30 days prior to effective date.

B. Termination: For non-mandated partnerships, either Party may terminate its participation in this MOU without cause by providing 30 -day written notice by a nationally recognized overnight delivery service with delivery to, personal service at, or mail to, the addresses in Section 2. The 30 days will begin on the date of personal service, the date placed with the overnight delivery service or the date of mailing as applicable.

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Memorandum of Understanding 2

C. Extension: This MOU may be extended by written agreement between both Parties, provided such agreement is signed by both Parties prior to the termination date and contains the following:

(1) A statement of intent to continue the provisions of the MOU; (2) Revised effective and termination dates and
(3) Dated signature of the signatory’s designee.

4. INDEMNIFICATION PROVISIONS:

A. GSC agrees to protect, save, defend, indemnify and hold harmless, with legal counsel of the City’s choosing, the City, its directors, officers and employees and each of them, from any and all claims, demands, liens, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death (collectively “Claims”), in any manner arising out of or incident to any act, negligence or misconduct of GSC, its directors, employees, agents and volunteers, or of any third parties, regardless of whether or not GSC or any of its agents (whether authorized or unauthorized) has allowed such third parties to act in furtherance of, or arising out of or in connection with this MOU, and including without limitation the payment of reasonable attorneys’ fees and other related costs and expenses. GSC shall reimburse the City, its governing board, officials, employees, agents and volunteers for any and all legal expenses and costs incurred by each of them in connection with any Claims subject to indemnification by GSC, or in enforcing the indemnity herein provided. GSC’s indemnification obligations shall not be restricted by the amount of insurance proceeds, if any, received by any indemnitee. GSC’s indemnification obligations shall survive any termination of this MOU or revocation of the MOU. The sole limitation on GSC’s indemnity obligation above is for Claims, attorneys’ fees and costs arising due to the sole negligence or willful misconduct of the City, its governing board, of ficers, employees, agents or volunteers.

B. GSC further agrees to indemnify, defend and hold harmless the City, its directors, officers and employees and each of them, from any claim or cause of action arising out of or related to the legality or legal interpretation of this MOU, including without limitation, the City’s authority to enter into this MOU.

C. GSC further agrees to indemnify, defend and hold harmless the City, its directors, officers and employees and each of them, from any claim or cause of action arising out of or related to liability resulting from violation of any applicable Federal, State or local statute, ordinance, order, requirement, law or regulation that may adversely affect participants of the NextGen Youth Workforce Program, including, without limitation, any applicable labor laws and/or regulations.

D. GSC further agrees to indemnify, defend and hold harmless the City, its directors, officers and employees and each of them, from any claim or cause of action arising out of or related to any personal property of GSC caused by any participants of the NextGen Youth Workforce Program.

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Memorandum of Understanding 3

E. The provisions of this Section shall survive the termination or expiration of this MOU.

5. PARTNERSHIP PROVISIONS: Both GSC and the City have certain rights an d responsibilities as outlined below:

A. Scope of Services: Both Parties agree to perform during the term of this MOU, the task, obligations, and services set forth in the “Scope of Services” attached to and incorporated into this MOU as Exhibit “A”.

B. Compensation: City shall pay for the services performed by GSC pursuant to the terms of this MOU at the time and manner set forth in the “Schedule of Compensation” attached to and incorporated into this MOU as Exhibit “D”.

C. Dispute Resolution: All Parties shall first attempt to resolve disputes informally.

Any Party may call a meeting to discuss and resolve disputes. All dispute resolutions must be approved by GSC’s Regional Impact Officer – Los Angeles to be binding on GSC and Chief Executive Office of the City. If the dispute is not resolved, it shall be referred to GSC’s President & CEO who will work cooperatively with the City’s executive management to resolve the issue. While informal dispute resolution is preferred, it shall not be a condition precedent to filing a lawsuit.

D. Governance: GSC consists of various partners representing the various facets of the community served. Therefore, the governance of GSC requires cooperative involvement of all partners. The GSC’s Executive Leadership shall endeavor to see that all contractual, fiscal and legal provisions are adhered to and that GSC remains fully operational. The City Executive Leadership shall ensure that their staff provides services outlined in Exhibit A and participate in GSC operations as outlined in the “Scope of Services”.

E. Political Activity/Lobbying Certification: GSC may not conduct any activity, including any payment to any person, officer, or employee of any governmental agency or body or member of Congress in connection with the award ing of any federal contract, grant, loan, intended to influence legislation, administrative rulemaking or the election of candidates for public office during time compensated under the representation that such activity is being performed as a part of this MOU.

6. OPERATIONALPROVISIONS:

A. Both GSC and the City will be committed to health and safety requirements and to providing equal access to services by persons with disabilities.

B. Both GSC and the City will support each other’s Mission, Vision and Values. It is understood that each organization has specific performance goals that they are striving to meet and that supporting each other through training and teamwork will result in increased achievement by all partners.

C. Both GSC and the City will take an active role in promoting the services of the Next Gen program to be provided by GSC and the City. Each shall provide current marketing materials for programs and services that indicate the nature of services 65431.00101\41037209.1

Memorandum of Understanding 4

offered, cost (if any), schedule, contact information, eligibility for services and other pertinent information.

7. INSURANCE AND SUBROGATION:

A. Both GSC and the City will maintain at least $2,000,000 aggregate General Liability Insurance with a reputable insurance provider and each Party shall name the other as additional insured on said policy. Both GSC and City will provide proof of insurance to the other.

B. Proof of Coverage.

The City is self-insured, will provide adequate evidence of financial viability of such self-insurance coverage and such evidence must be updated annually. If GSC reasonably determines that the City’s finances do not sustain self-insurance, the City shall be required to obtain third-party coverage from a reputable insurance company.

C. GSC and the City each agree to provide a waiver of subrogation for the other in the event of any property or liability loss or damage caused to GSC or the City, by the other.

8. CONFIDENTIALITY:

A. Subject to any limitation imposed on the City by law, information regarding persons served will be shared amongst the City through a variety of methods, including but not limited to case management, referrals, electronic systems (such as Skills Match, email and local area network), subject to any limitations imposed by law with regard to student records. Exhibit B further outlines the data sharing arrangement between the Parties.

B. All staff of both GSC and the City will respect confidentiality of all persons served.

C. All Parties agree to adhere to legal requirements set forth by the Welfare & Institutions Code, the Rehabilitation Act, Health Insurance Portability and Accountability Act (HIPAA) and other legal statutes or requirements to ensure the protection and privacy of persons served, as it pertains to this particular MOU.

9. RELATIONSHIP OF THE PARTIES:

A. It is the intention of the Parties to create a relationship wherein the City is a local government agency. Notwithstanding any term(s) or terminology used in this MOU (i.e. the reference to the City as “Partner”), nothing in this MOU shall be construed as creating the relationship of employer-employee or establishing any trust, partnership or joint venture arrangement between GSC and the City. Nothing in this MOU shall deprive or otherwise affect the right of either Party to conduct business activities which may be competitive with the services to be provided hereunder.

B. GSC and the City shall each be responsible, respectively, for the assessment, qualifying, hiring, management, compensation and/or termination of employment of 65431.00101\41037209.1

Memorandum of Understanding 5

their respective employees who may provide any of the services contemplated by this MOU. Nothing in this MOU is to be construed to create any co-employment of any GSC and/or the City employee by the other.

10. NON-DISCRIMINATION: Both GSC and the City agree to comply with all Federal and State statues that prohibit discrimination. The Parties certify that all persons employed by and customers served by the GSC, the City, or affiliates shall be treated equally without regard to race, religion, ancestry, national ori gin, sex, age, disability, marital status, political affiliation or beliefs.

11. CODE OF CONDUCT: Both Parties agree to uphold each other’s code of conduct/ethics and maintain the highest levels of integrity when serving as a representative of their organization.

12. FACILITIES USE: It is agreed that the City will provide GSC with the use of City facilities as outlined in Exhibit A “Scope of Services”.

13. GOVERNING LAW AND VENUE: This MOU shall be governed by the laws of the State of California. The venue shall be in Los Angeles County.

14. AUTHORITY: The individuals signing below have the authority to commit the Party they represent to the terms of this MOU and its attachments and do so commit by signing. This MOU is not in effect until it is signed by representatives of both GSC and The City. 65431.00101\41037209.1

Memorandum of Understanding 6

SIGNATURES

Signature: __________________________________________________________________

Printed Name & Title: Patrick McClenahan, President & CEO

Agency: Goodwill Southern California

Address: 342 N. San Fernando Rd, Los Angeles, CA 90031

Telephone: (323) 539-2049

Signature: ________________________________________________________________

Printed Name & Title: Emmanuel J. Estrada, Mayor

Agency: City of Baldwin Park

Address: 14403 E Pacific Ave., Baldwin Park CA 91706

Telephone: (626) 813-5204
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Memorandum of Understanding 7

Attachments: Exhibit A: Scope of Services
Exhibit B: Data Sharing Agreement
Exhibit C: Universal Release of Information Form
Exhibit D: Compensation

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Memorandum of Understanding 8

EXHIBIT A

SCOPE OF SERVICES
NextGen Youth Workforce Program
Goodwill Southern California and the City of Baldwin Park March 15, 2023
Under this Memorandum of Understanding agreement Goodwill Southern California (GSC) and the City of Baldwin Park (City) shall agree to the following related to the NextGen Youth Workforce Program:
• GSC will provide the following, as appropriate:
o For youth
▪ Streamlined employee outreach, recruitment intake and orientation to services; ▪ Initial assessment of skills, aptitudes, abilities and supportive services; ▪ Job search and placement assistance including career counseling; ▪ Supportive services (interview/work clothing, transportation assistance, work items based on need & funding); ▪ On-going intensive career assessment, counseling and planning. ▪ Occupational classroom training;
▪ Skills upgrading and retraining;
▪ On-the-Job Training;
▪ Job readiness training;
▪ Soft-skills training;
▪ Fund required screenings for employment such as fingerprinting services, medical exams, and testing for Tuberculosis;
▪ Industry-based, customized training based on employer need with up front agreement to hire based on established conditions;
▪ Employment referral and follow-up services for customers attaining employment for not less than 12 months after the first known day of employment.
o For the City
▪ Periodic updates to include progress on agreed to goals and data to verify progress ▪ Agree to share information regarding youths that are participating; ▪ Agree to meet periodically to discuss program progress, potential improvements or recommendations; ▪ Periodically provide program progress updates to city council; ▪ Provide updates on specific cases;
▪ Participate in promoting program successes through public relations effort. o For employers
▪ Participate in recruitment efforts;
▪ Provide program informational seminars;
▪ Respond to employer inquires;
▪ Work site assessment;
▪ Execute Youth Work Site Agreements;
▪ Assist in completing Worksite Expectation Reviews;
▪ Assist in completing Work Performance Evaluations.
• The City will provide the following:
▪ Assist with outreach and recruitment of youth;
▪ Assist with the promotion of the program including the use of the city’s website, local BPNow newspaper, city events such as Concerts in the Park and the Farmers Market, billboard advertising, city related social media platforms, bus stops, the placement of informational material in city facilities and announcements at city council meetings;
▪ Provide employment opportunities in various city departments for youth participants; ▪ Complete all requirements for hired youth including Work Performance Evaluations and Worksite Expectation Reviews;
▪ Assist with the recruitment of employers, including employers in and outside the city by providing information directly to businesses, business associations, other public entities and other city partners; ▪ Provide GSC with the use of city facilities to conduct informational seminars; ▪ Promote program successes through public relations efforts. 65431.00101\41037209.1

Memorandum of Understanding 9

Exhibit B

Data Sharing Agreement

GSC is an agency designed to help meet the vocational goals of customers. Data is one of the Center’s most valuable resources and requires responsible and ethical use. GSC relies heavily on its electronic data processing systems and data stored in them to meet its educational, informational and operational needs. It is essential that these systems be protected from misuse.

Further, data and computer systems will be maintained to ensure the highest levels of confidentiality and privacy as required by legal and regulatory requirements (including, but not limited to Welfare & Institutions Code, HIPAA, etc.). All documentation shall be maintained in a systematic way and in a secure environment. To maintain the highest quality and to protect the trust given to us by the community, it is essential that we collectively demonstrate adherence to ethical and legal standards and ensure that these standards are enforced.

Standards of Professional Data Sharing Practice:

1. Notwithstanding anything in this Memorandum of Understanding or its Exhibits, participant information will only be shared by GSC subject to limitations imposed by law.

2. Customer information may be shared with the City and collaborative agencies of the GSC to determine and tailor services based on the needs of the customer and to reduce redundancy of information asked of the customer;

3. In that the City and its employees are exposed to sensitive information on a regular basis, each shall use discretion when and to whom they shall disclose such information. the City and its employees shall not disclose privileged and/or confidential information to unauthorized parties;

4. The City and its employees shall not discuss in public areas privileged and/o r confidential information as pertains to GSC clients.

5. Usernames and passwords may be assigned to each individual City employee and GSC employee to ensure security of our information systems. All information exchanged between parties authorized to use the information systems, shall b e processed in such a way that unauthorized persons cannot retrieve such information by any means;

6. Each user name and password is unique to the individual and shall not be shared with others at any time;

7. Data shall be disseminated in cooperation with organizational policies on confidentiality and HIPAA;

8. Reports or any information contained in our information systems is not for release to the general public without approval of the person served and the authorization of the Regional Impact Officer – Los Aneles of Workforce and Career Development for Goodwill Southern California.

Definitions:

Privileged: Access due to status or association.

Confidential: Information that has a legal implication.

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Memorandum of Understanding 10

Exhibit C

Universal Release of Information Form
(To be used with all Job Seeker customers)

Name: Date of Birth:

Prior Name(s): Social Security #:

Address:

City, State, Zip:

Home Phone: Cell Phone: Other Phone:

I hereby authorize GSC, its staff and the City of Baldwin Park to engage in verbal, written, facsimile or computerized communication of information for the express purpose of determining my eligibility for services and/or for identifying services or agencies to assist me.

All pertinent records and information can be released, including those regarding past, present or future information or records that may be needed for eligibility determination, monitoring or follow up purposes. This information may include, but shall not be l imited to, income records, employment information, public assistance records, educational records, credit history, health/physical status records, vocational rehabilitation assessment and other assessments or evaluations. It is my understanding that any information obtained by any agent or partner of the GSC will hold this information in strictest confidence. Further I acknowledge that any information shared will be used in my best interests and to provide ease of access to services. This agreement is time-limited to 12 months while I am receiving services and a new agreement shall be signed for services extending beyond that point.

______________________________ ______________________________ Customer Name Customer Signature & Date

______________________________ ______________________________ Witness Name & Title Witness Signature & Date

cc: customer
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Memorandum of Understanding 11

Exhibit D

Compensation

For purposes of this Agreement, Goodwill (GSC) shall serve as the employer/administrator of record for all the youth hired under the NextGen and other related programs under this agreement.

The City shall provide gap funding in the amount of up to $68,507 which will cover funding primarily for the month of June and in other instances as agreed by the parties. GSC shall submit invoices to the City accordingly. All other funding in relation to the payroll funding shall be provided by GSC.

STAFF REPORT
ITEM NO. _____18_____