Item Number: 24
City Council / Board of Directors
Written Communications
Meeting of: June 18, 2024
Submitted By:
Keith C. Metzler, City Manager
Subject:
National Opioid Settlement Agreements
Recommendation:
That the Honorable City Council:
(1) Adopt Resolution No. 24-072, amending the annual budget for Fiscal Year 2023-2024; approving an increase in revenue and expenditures related to the National Opioids Settlement Agreements; and
(2) Authorize the City Manager to use all Opioid Settlement Fund Disbursements, including future funds, in accordance with the List of Opioid Remediation Uses provided in the Opioid Settlements.
Fiscal Impact:
Adopting Resolution No. 24-072 will increase the City’s Fiscal Year 2023-2024 revenue budget by $39,633.56 (2654020-47415-42006) and increase the expense appropriations by $39,633.56 (2654020-52300-42006). All future Opioid Settlement Fund Disbursements will be used in accordance with the List of Opioid Remediation Uses.
Strategic Plan Goal:
This item aligns with Goal D, Reduce Homelessness, focusing on implementing effective solutions to reduce homelessness.
Background:
On December 7, 2021, a Closed Session item was presented to the City Council relating to the National Prescription Opiate Litigation Settlements with opioid manufacturer Janssen Pharmaceuticals (parent company of Johnson & Johnson) and the “big three" distributors, McKesson, AmerisourceBergen, and Cardinal Health (“the Distributors") and authorized the City Manager as the City's authorized representative to take all reasonable and necessary actions related to the settlements. Since the initial settlements with Janssen and Distributors, additional National Opioid Settlements have been reached with 3 6
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Teva, Allergan, Walmart, CVS, Walgreens, and Kroger, which the City has elected to participate in.
The National Opioid Settlement Agreements will provide substantial funds to states and eligible local governments for the abatement of the opioid epidemic across the country.
The settlement totals approximately $47 billion ($21 billion from the Distributors, $21 billion from Teva, Allergan, Walmart, CVS, Walgreens, and Kroger, and $5 billion from Janssen Pharmaceuticals). Of this potential $47 billion, approximately $45 billion in settlement proceeds are payable to state and local governments. Funds from each settlement will be distributed to the City for a period of up to eighteen (18) years.
The National Opioid Settlements will be distributed as follows:
•Distributors will pay a maximum of $21 billion over 18 years; •Teva is to pay up to $3.34 billion over 13 years and to provide either $1.2 billion of its generic version of the drug Narcan over 10 years or $240 million of cash in lieu of product, as each state may elect;
•Allergan to pay up to $2.02 billion over 7 years;
•Walmart to pay up to $2.74 billion in 2023, and all payments to be made within 6 years;
•CVS to pay up to $4.90 billion over 10 years;
•Walgreens to pay up to $5.52 billion over 15 years;
•Janssen will pay a maximum of $5 billion over no more than nine years; and •Kroger up to $1.4 billion over 11 years
The settlement proceeds to be paid to state and local governments are proportional to the number of state and local governments that approve the settlements. Based on the allocation formula for the states, the maximum amount California will receive will be approximately $2.05 billion from the Distributors and Janssen Agreements, and the multistate settlements with Teva, Allergan, Walmart, CVS, Walgreens, and Kroger are currently pending. Victorville will receive approximately $415,000 over 18 years.
Discussion:
Thus far, the City has received $100,886.31 from the National Opioid Settlements. These settlement funds are restricted on how they can be expended and must align with the List of Opioid Remediation Uses shown in Attachment B. The City has expended $9,915.93 of the settlement funds on Naloxone to allow staff the ability to assist with a medical emergency of an opioid overdose should one occur. Certain employees in Code Compliance, Animal Control, Community Services, Water, Public Works, and Planning are participating in the voluntary program and have completed the City’s mandatory training.
After reviewing the qualified opioid remediation uses from the Opioid Settlements, staff recommends that the funds should be used for the following:
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1. Additional training for the Wellness Center and City staff. Training will include topics such as resilience, motivational interviewing, Cognitive-Behavioral Therapy (CBT), transtheoretical model of behavioral change, integrity, fidelity, skill enhancements, trauma-informed care, interactive journaling, opioid overdose first aid, and life-saving CPR/First Aid/AED training.
2. Naloxone or other FDA-approved drug to reverse opioid overdoses.
3. Comprehensive wraparound services to individuals in recovery, including housing, transportation, and job placement/training at both the Wellness Center and through community outreach. Support the shelter and wraparound services at the Wellness Center and the City’s outreach services related to opioid remediation uses.
4. Providing awareness of the opioid crisis through potential campaigns.
5. Any other expenditures in accordance with the List of Opioid Remediation Uses.
Staff anticipates the continued need for substance abuse services at the Wellness Center and through community outreach. Evidence-based psychoeducation, awareness, staff training, and wraparound services already exist at the Wellness Center. Enhancing the wraparound services will help support the wellness of those individuals in need and address the opioid crisis by improving staff's ability to provide impactful and appropriate services. This will also broaden the scope of recovery services to solidify a heightened approach that would best benefit the client.
Staff recommends that the Honorable City Council adopt Resolution No. 24-072 and authorize the City Manager to use all Opioid Settlement Fund Disbursements, including future funds, in accordance with the List of Opioid Remediation Uses provided in the Opioid Settlements. Staff remains available for any questions the City Council may have.
Attachments: A. Resolution No. 24-072
B. List of Opioid Remediation Uses