TO: Mayor and City Council
THROUGH: Kristin Retherford, Interim City Manager
FROM: Dan Atchison, City Attorney
SUBJECT:
title
Opioid Settlement Funds Disposition.
Ward(s): All Wards
Councilor(s): All Councilors
Neighborhood(s): All Neighborhoods
Result Area(s): Good Governance; Safe Community.
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SUMMARY:
summary
The City of Salem is set to receive approximately $250,000 as the City’s first installment payment of the National Opioid Litigation Settlement. Under the terms of the settlement, the City has the option of receiving the settlement funds directly, or to direct the funds be paid to Marion and Polk counties. Use of the funds are limited to Opioid remediation, such as prevention, treatment and education. The City does not directly provide opioid addiction treatment and recovery services, and staff recommends that the City directly receive the funds, and issue a Request for Proposals for a local provider to provide those services within the city.
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ISSUE:
Shall the City Council authorize the City Manager to direct that the City’s allocation of National Opioid Litigation Settlement funds be paid directly to the City?
RECOMMENDATION:
recommendation
Authorize the City Manager to direct that the City’s allocation of National Opioid Litigation Settlement funds be paid directly to the City
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FACTS AND FINDINGS:
In late 2021 the 1,000’s of state and local governments involved in the national opioid litigation reached a settlement agreement with manufacturers and distributors of opioids. Non-litigating governments like the State of Oregon, Marion and Polk counties, and Salem will receive a share of the settlement proceeds. Cities, like Salem, have the option to receive the funds directly, or elect to have the funds distributed to their home counties. Of the approximately $400 million statewide Oregon allocation, the State will receive 45% and local governments (both litigating and non-litigating governments) will receive 55%.
The settlement funds will be paid in installments over, potentially, the next 18 years. Salem’s anticipated total allocation is approximately 3% of the local government allocation less reductions for litigation administrative expenses and attorney fees. Salem’s first allocation, expected later this year, will be approximately $250,000.
The National Opioid Litigation Settlement Agreement and Oregon Allocation Agreement restrict the uses of the settlement funds to Opioid Remediation Uses and require extensive annual reporting.
Opioid Remediation Uses include: Treatment, Recovery, Training, Prevention, Research and Education related to Opioid abuse and addiction. Eligible uses within those categories including acquisition of FDA-approved drugs to treat the affects of Opioid overdose and addiction and other treatment programs, education and training to prevent Opioid addiction and abuse, and recovery services.
Under the allocation agreement with the State of Oregon, local governments must comply with reporting requirements on the use of settlement funds and could potentially lose access to settlement funds if there is misuse.
Staff recommends that the City directly receive those funds. The City does not directly provide Opioid Remediation services, and staff is not recommending that the City do so. Instead staff recommends that the City issue an RFP for Opioid Remediation Services for a local provider to provide those service directly within the city.
BACKGROUND:
Over 3,000 federal court lawsuits were filed by cities and counties across the country against opioid manufacturers, distributors, and marketers of opioid drugs. These cases were consolidated within a single litigation in federal district court in Ohio. The City of Salem did not file a separate lawsuit. Ten local governments in Oregon, including Lane County, Multnomah County and the City of Portland did file suit. Salem has been cooperating with the Oregon litigating jurisdictions and the State of Oregon (which did not file suit) to achieve a settlement in the litigation and provide for a settlement award for the State and local Oregon governments, including Salem.
In total the State of Oregon and local governments in Oregon are set to be awarded approximately $400 million through the settlement agreements. These funds will be allocated to the State and local jurisdictions pursuant to an allocation agreement between the State of Oregon and local jurisdictions. The agreement provides that the State will receive approximately 45% of the overall Oregon award and local governments will receive 55%. A portion of the State’s award may be used directly by the State and the remainder of the State’s award will be awarded to local communities through a State-lead program to treat Opioid addiction and abuse.
The settlement funds will be distributed annual for up to 18 years. Salem’s allocation of the funds is 3%, or approximately $250,000 for the first annual payment. The allocation for each local government was determined through the settlement agreement and is based on population and incidence of opioid addiction and abuse as well as overall distribution of opioids in the community. For purposes of comparison, Portland will receive an 8.2% share, Eugene 2.76%, Keizer 0.19%, Marion County 4.1%, and Polk County 0.7%.
In addition, a percentage of the overall settlement proceeds will be used to pay a portion of the Oregon litigating jurisdiction’s attorney fees. That amount has been capped by the Court. Approximately 1/7 of Oregon’s first installment payment will be held in reserve until the award of attorney fees is determined.
Dan Atchison
City Attorney
Attachments:
None.