TO:
Honorable Mayor and Members of the City Council
THROUGH:
Bruce Moe, City Manager
FROM:
George Gabriel, Assistant to the City Manager
SUBJECT:Title
Consideration of a Resolution Approving an Agreement with Beach Cities Health District Allocating Opioid Settlement Agreement Funds in the Amount of $82,733 and Approving an Appropriation of $105,653 in the General Fund (City Manager Moe).
A) ADOPT RESOLUTION NO. 23-0117
B) APPROVE APPROPRIATION
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Recommended Action
RECOMMENDATION:
Staff recommends that the City Council adopt Resolution No. 23-0117:
1. Approving the agreement with Beach Cities Health District in the amount of $82,733 to provide substance abuse and opioid remediation services;
2. Approving an appropriation of $105,653 in the General Fund for expenditures related to Opioid Settlement Projects and adjusting revenues accordingly.
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FISCAL IMPLICATIONS:
Following opioid settlement agreements the City Council authorized the City Manager to join, the City has received approximately $85,600 from various opioid manufacturers. The amount Manhattan Beach could receive over the course of 18 years is currently estimated at $500,000 based upon a complicated allocation formula. This approximate amount does not include additional manufacturers Teva and Allergan and chain pharmacies CVS, Walgreens, and Walmart. The City is awaiting additional information from the State of California to approximate the amount. Therefore, the funds associated with proposed agreement are only three years’ worth of settlement dollars received by the Distributors and Janssen settlements.
An appropriation of $105,653 in the General Fund is required to establish the expenditures for Opioid Settlement projects and reflects the amount the City anticipates to receive from Opioid Settlements by the close of Fiscal Year 2023-2024. Revenues in the General Fund will be adjusted accordingly.
BACKGROUND:
States and cities across the United States have filed thousands of lawsuits against companies involved in marketing, manufacturing, or distributing opioids to recover costs associated with the opioid overdose epidemic. Some of these lawsuits have led to nationwide settlement agreements with payouts to states and local political subdivisions for the purpose of funding opioid abatement activities. The Distributors Agreement and the Janssen Agreement (“2021 National Settlements”) were the first two in which the City had the option of participating.
At the December 7, 2021, meeting, City Council adopted Resolution No. 21-0114 authorizing the City Manager to execute all necessary documents to approve the proposed settlement agreements with distributors of opioids, AmerisourceBergan, Cardinal Health, and McKesson, and opioid manufacturer Janssen, owned by Johnson & Johnson.
At the April 18, 2023, meeting, City Council adopted Resolution No. 23-0039 opting in and authorizing settlement agreements with manufacturers Teva and Allergan and chain pharmacies CVS, Walgreens, and Walmart; and authorizing the City Manager to participate in future opioid settlement agreements.
DISCUSSION:
The City began receiving opioid settlement funds in November 2022 but had awaited on additional guidance from the State of California regarding allowable expenditures of the funds and reporting requirements associated with expenditures. Since then, the City’s Police and Fire Department analyzed the allowable expenditures. Following a review of allowable settlement fund uses, the City’s public safety departments determined they do not have uses for the funds given the restrictions present in the allowable settlement fund uses. Thereafter, the City identified a substance abuse treatment provider, Beach Cities Health District (BCHD), as a viable recipient of the funds. Following discussions on the framework of any agreement, the City and BCHD drafted an agreement centered around the following services on a fee reimbursement basis:
1. Counseling and Referral Services. Counseling, screenings and referral services provided to youth, young adults and/or parents of youth or young adults that reside in the City of Manhattan Beach and provided through Allcove Beach Cities through one of Allcove Beach Cities’ licensed providers. These services will specifically address substance use and those with, or at risk of developing, opioid use disorder and any co-occurring substance use disorder or mental health conditions. Depending on the level of service needed, these services will serve as a transition program to direct people to recovery services through the process of Screening, Brief Intervention and Referral to Treatment (SBIRT).
2. Naloxone Distribution and Training. BCHD will purchase Naloxone, an antagonist medication used to reverse and opioid overdose. Additional services for Naloxone distribution may include, but are not limited to, printing costs for education materials, additional supplies for naloxone kits, and any event fees associated to training and distribution.
3. Substance Abuse Education and Prevention Programs. BCHD will conduct education and training to prevent the misuse of opioids. Services may include, but are not limited to, speaker fees, venue fees, printing collateral, promotion, supplies, and activities related to coalition building.
4. Opioid Use Disorder Support for Unsheltered Homeless Individuals. BCHD will provide services to individuals experiencing homelessness within the City of Manhattan Beach with opioid use disorder and any co-occurring substance use disorder/mental health conditions. Services may include counselling services, medication-assisted treatment, and detox services.
Additionally, the Agreement specifies that services billed for direct counselling services, screening, referrals, and wrap-around services for individuals in recovery will be limited to residents of Manhattan Beach. Programs/Activities billed for Substance Use Prevention efforts and Naloxone distribution and training will either specifically target residents/staff of Manhattan Beach or be available to the general public where Manhattan Beach residents/staff can participate and benefit. If not taking place specifically in the City of Manhattan Beach, these Substance Use Prevention programs and activities will be located within the Beach Cities of Hermosa Beach, Manhattan Beach, or Redondo Beach.
Another aspect of the agreement that is important to staff was administrative support in reporting requirements. Under the agreement, BCHD will support the City of Manhattan Beach in preparing the reporting requirements for the settlement. This includes record keeping and reporting of the expenditures by program/activity, narratives of how each program correlates with allowable uses, and background on the purpose of each program/activity.
POLICY ALTERNATIVES:
While the City has identified BCHD as the best equipped to provide services allowed by the settlement funds, the City may consider giving the funds to other government organizations or non-profits.
ALTERNATIVE #1:
Establish a local or regional grant program where the City can give the funds to local non-profits that may benefit from offering substance abuse treatment services.
PROS:
- Greater distribution of the funds to various non-profits, instead of one government organization.
CONS:
- Staff time required to draft and implement a program.
- Ongoing staff time required to comply with reporting requirements by the State of California.
ALTERNATIVE #2:
Delegate the funds to the County of Los Angeles.
PROS:
- Best equipped for providing substance abuse and opioid remediation services given existing County social service programs.
CONS:
- Minimal local impact to the City of Manhattan Beach as services will be provided to entire County.
CONCLUSION:
Staff recommends that the City Council adopt Resolution No. 23-0117:
1. Approving the agreement with Beach Cities Health District in the amount of $82,733 to provide substance abuse and opioid remediation services; and
2. Approving an appropriation of $105,653 in the General Fund for expenditures related to Opioid Settlement Projects and adjusting revenues accordingly.
LEGAL REVIEW:
The City Attorney has approved the agreement as to form.
ATTACHMENTS:
1. Resolution No. 23-0117
2. Agreement - Beach Cities Health District
3. Schedule of Opioid Settlement Funds