Title
SUBJECT: Update on Opioid Settlement Funding
REPORT IN BRIEF
Provide an update to the City Council of revenue and expenditures of Opioid Settlement Funding.
RECOMMENDATION
City Council - Information Only.
Body
DISCUSSION
On April 7, 2025, Council Member Xiong requested an update on revenue received and expenditures from Opioid Settlement.
In 2021, nationwide settlements were reached to resolve all opioids litigation brought by states and local political subdivisions against the three largest pharmaceutical distributors, McKesson, Cardinal Health, and AmerisourceBergen (“Distributors”) and against manufacturer Janssen Pharmaceuticals, Inc. and its parent company Johnson & Johnson (collectively, “J&J”). These National Settlements were finalized, and the distributors will pay up to $21 billion over 18 years, and J&J will pay up to an additional $5 billion over no more than nine years.
Under both the 2021 and 2022 National Settlements, at least 85% of the funds going directly to participating states and subdivisions must be used for abatement of the opioid epidemic, with the overwhelming bulk of the proceeds restricted to funding future abatement efforts by state and local governments.
In 2022, the City Council elected to receive allocated distributions of these settlement funds to be used to combat the opioid epidemic. The City started to receive settlement payments in FY 2022-23 from the opioid settlement and opioid bankruptcies. The City is required to report to the state each year how much we have received, expended, and how we intend to use the settlement funds (see reports attached). We are required to expend and/or encumber funds within 5 years of receipt or 7 years for capital outlay projects.
To date the City has received $483,836.54 in opioid settlement funding and expensed $15,948.80. We have also allocated interest totaling $25,592.99. Expenditures have been for two state approved activities:
1. Drug Awareness Campaign
2. Purchasing and Distribution of Fentanyl Test Strips
|
Opioid Abatement Settlement & Bankruptcy Summary |
|
|
|
|
|
|
FY 22/23 |
FY 23/24 |
FY 24/25 |
TOTAL |
|
Settlement Distributions |
$ 108,366.88 |
$ 67,212.33 |
$ 285,005.75 |
$ 460,584.96 |
|
Interest |
4,559.49 |
18,980.49 |
872.79 |
24,412.77 |
|
Opioid Settlement Total |
112,926.37 |
86,192.82 |
285,878.54 |
484,997.73 |
|
Bankruptcy Distributions |
5,489.82 |
6,458.62 |
11,303.14 |
23,251.58 |
|
Interest |
- |
1,141.39 |
38.83 |
1,180.22 |
|
Opioid Bankruptcy Total |
5,489.82 |
7,600.01 |
11,341.97 |
24,431.80 |
|
Total Revenue |
118,416.19 |
93,792.83 |
297,220.51 |
509,429.53 |
|
Expenditures |
|
12,756.98 |
3,191.82 |
15,948.80 |
|
Balance Remaining |
$ 118,416.19 |
$ 81,035.85 |
$ 294,028.69 |
$ 493,480.73 |
As we continue to evaluate how to best tackle this epidemic, we are continuously looking for ways to best utilize these funds. We are actively negotiating a possible contract with a technology company that can be used to track data and help identify the source of the Fentanyl through a county wide dashboard. This data will be available not only to law enforcement but to our county mental health BHRS partners as well. This software could be vital in sharing information throughout our community.
We are also looking to expand our partnership with the Pathways program to assist in their outreach efforts to keep youth away from drugs. As part of our continued outreach, we are looking at the potential of funding an outreach specialist to be a non-sworn outreach specialist trained in addiction outreach to help officers in the field assist those they encounter experiencing addiction. This position would be fully funded through the grant and available to deploy in the field when needed and can assist us in helping individuals navigate the medical system when treatment is an option.
As an agency we will always be looking at ways to continue our outreach efforts and have also investigated the possibility of paying for a well-known or influential speaker to come as part of a youth outreach event that could speak to kids about the dangers of drugs.
The Police Department has been working with the California Department of Health Care Services to use the funding appropriately under the State’s strict guidelines. Attached to this report is expenditure guidance for California’s cities and counties that receive funding through the Opioid Settlements.
ATTACHMENTS
1. FY 22-23 California’s Opioid Settlements Expenditure Report
2. FY 22-23 California’s Opioid Bankruptcy Expenditure Report
3. FY 23-24 California’s Opioid Settlements and Bankruptcy Expenditure Report
4. California Opioid Settlements Allowable Expenditures
5. Presentation