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Home My WebLink About2021-12-14 - AGENDA REPORTS - NATIONAL OPIOD SETTLEMENTO Agenda Item: 5 1. CITY OF SANTA CLARITA AGENDA REPORT CONSENT CALENDAR CITY MANAGER APPROVAL: AI1 A11�44_1) DATE: December 14, 2021 SUBJECT: RESOLUTION TO OPT -IN TO A NATIONAL OPIOID SETTLEMENT AGREEMENT AND ELECT THAT THE CITY DIRECTLY RECEIVE LOCAL FUNDING ALLOCATION DEPARTMENT: City Manager's Office PRESENTER: Masis Hagobian RECOMMENDED ACTION City Council adopt a resolution opting -in to national settlement agreements with distributors of opioids, AmerisourceBergan, Cardinal Health, and McKesson, and opioid manufacturer Janssen, and elect to receive a direct funding allocation, as a result of opting -in to the settlements. BACKGROUND On July 21, 2021, the National Prescription Opiate Litigation Multi -District Litigation Plaintiffs' Executive Committee, several State Attorneys General, and four major defendants announced an agreement on terms of two proposed nationwide settlements to resolve all opioids litigation brought by various states and local governments against the three largest pharmaceutical distributors: AmerisourceBergen, Cardinal Health, and McKesson (Distributors), and manufacturer Janssen Pharmaceuticals, Inc., and its parent company, Johnson & Johnson. The proposed settlement requires the Distributors to pay up to $21 billion over an 18-year period and Janssen to pay up to $5 billion over a 7-year period for a total amount of up to $26 billion. California is estimated to receive approximately $2.26 billion, of which approximately 70 percent or $1.58 billion will be allocated to cities and counties. The final funding allocation to each city will be established following the settlement deadline, as the participation of cities will ultimately determine Final funding amounts. However, if all cities in the state were to opt -in, the City of Santa Clarita (City) is estimated to receive approximately $342,853, of which approximately $274,282 will be distributed over an 18-year period and the remaining $68,571 will be distributed over a 7-year period. Local governments must opt -in to the settlement by January 2, 2022, to receive funds from the Page 1 Packet Pg. 38 O settlement. Following opting -in to the settlement, cities have the option to elect to receive the funds directly to use for local purposes or to have the funds directed to their respective county. Counties are not required to spend the funds exclusively within a city, if a city chooses to redirect their allocation to the county, rather, the city share is absorbed into a countywide account and the use of the funds is under county discretion. Eligible use of the funds includes providing education to school based and youth -focused programs that discourage or prevent the use of opioids, media campaigns to prevent opioid misuse, and support for mobile intervention for persons with an opioid use disorder. The City has the ability to use the funds received through this settlement to support existing drug prevention and intervention programming, including Drug Free Youth in Santa Clarita Valley (DFY-SCV) and the Juvenile Intervention Team (J-Team). ALTERNATIVE ACTION Other direction, as provided by the City Council. FISCAL IMPACT No additional resources beyond those contained within the adopted Fiscal Year 2021-22 budget are required for implementation of the recommended action. ATTACHMENTS Resolution for Opting -in to National Opioid Settlement Page 2 Packet Pg. 39 5.a RESOLUTION NO. 21- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, DIRECTING THE CITY MANAGER OR DESIGNEE TO TAKE ALL NECESSARY ACTIONS TO JOIN IN THE SETTLEMENT OF THE NATIONAL OPIOID LITIGATION (IN RE: NATIONAL PRESCRIPTION OPIATE LITIGATION (U.S.D.C. CASE NO. 1:17-CV-2804)) AND AUTHORIZING THE CITY MANAGER OR DESIGNEE TO EXECUTE SETTLEMENT AGREEMENTS RELATING TO LITIGATION WHEREAS, on July 21, 2021 the National Prescription Opiate Litigation Multi - District Litigation (MDL) Plaintiffs' Executive Committee, several State Attorneys General, and four major defendants announced agreement on terms of a proposed nationwide settlements to resolve all Opioids litigation brought by various states and local political subdivisions against the three largest pharmaceutical distributors: McKesson, Cardinal Health and AmerisourceBergen ("Distributors"), and manufacturer Janssen Pharmaceuticals, Inc. and its parent company Johnson & Johnson (collectively, "J&J"). The lawsuit is referred to as In re: National Prescription Opiate Litigation (U.S.D.C. Case No. 1:17-CV-2804); and WHEREAS, the settlement requires the Distributors to pay up to $21 billion and Janssen to pay up to $5 billion, and that roughly $2.6 billion of this settlement is to be directed to the State of California and its subdivisions, subject to the State Attorney General and political subdivisions reaching an allocation agreement to determine how to apportion and distribute the settlement funds directed to California; and WHEREAS, In October 2021, an allocation agreement was reached, whereby 85 percent of the total settlement funds sent to California will be allocated to local governments of the State who elect to participate in the settlement and, consequently, release their own potential claims against the defendants; and WHEREAS, in order for the City of Santa Clarita to participate the City must elect to participate by January 2, 2022, by completing a participation agreement; and WHEREAS, in participating, if the entity elects to participate and wants to receive direct payments, it must notify the Settlement Distributor Administrator, otherwise, the funds will be directed to the County. NOW, THEREFORE, the City Council of the City of Santa Clarita, California, does hereby resolve as follows: SECTION 1. The Santa Clarita City Council finds the foregoing recitals are true and correct, and they are hereby incorporated by reference into this resolution. SECTION 2. Authorize the City Manager or Designee to take all necessary actions to join in the settlements in the National Opioid Litigation (In Re: National Opiate Litigation (U.S.D.C. Case No. 1:17-CV-2804 and to release any potential claims against the identified Page 1 of 2 Packet Pg. 40 5.a defendants, Distributors, and J&J and accept payment based on the terms and conditions set forth in the Settlement Agreements, which are available in the City Clerk's Office. SECTION 3. Authorize the City Manager or designee to execute the Settlement Agreements and any other necessary documents, in a form approved by the City Attorney, required to join the Settlement Agreements. SECTION 4. Authorize the City Manager or designee to keep the settlement monies for City use, consistent with the eligible activities issued as part of the terms included in the settlement agreement. SECTION 5. If any term, provision, or portion of these findings or the application of these findings to a particular situation is held by a court to be invalid, void or unenforceable, the remaining provisions of these findings, or their application to other actions related to the Project, shall continue in full force and effect unless amended or modified by the City. SECTION 6. The City Clerk shall certify to the adoption of this resolution. PASSED, APPROVED, AND ADOPTED this th day of 2021. MAYOR ATTEST: CITY CLERK DATE: STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF SANTA CLARITA ) I, Mary Cusick, City Clerk of the City of Santa Clarita, do hereby certify that the foregoing Resolution No. 21- was duly adopted by the City Council of the City of Santa Clarita at a regular meeting thereof, held on the th day of 2021, by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: CITY CLERK Page 2 of 2 Packet Pg. 41