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AGENDA ITEM REVIEW FORM

6.E.

Regular City Council Meeting

Meeting Date:: 10/13/2021
Department Head:: Kay Macuil
Submitted By:: Kay Macuil, City Attorney, Attorney's Office

Action Requested:

Motion
Order

ITEM:

Discussion and possible action on any and all matters regarding Order No. 2021-10. An order of the Mayor and City Council of the City of San Luis, Arizona, authorizing and directing the entering into the “One Arizona Distribution of Opioid Settlement Funds Agreement” regarding a plan to allocate potential global settlement funds in the multidistrict litigation case titled “In Re National Prescription Opiate Litigation” and authorization to opt into the Distributor Settlement and the Janssen Settlement. (Kay Marion Macuil, City Attorney)

SUMMARY:

Plan for Allocation of Funds
The "One Arizona Distribution of Opioid Settlement Agreement" ("Distribution Agreement") is a plan, not a settlement of the class action titled "In Re National Prescription Opiate Litigation" ("Class Action"). The Distribution Agreement formalizes the MOU that Council approved on December 9, 2020. It creates a plan to allocate funds from a potential global settlement of the Class Action and other litigation outside the class action. It uses the model allocation devised by the Negotiation Class Counsel in the Class Action, which allocates to the local governments their proportionate share of the impact of the opioid crisis based on data reported to the Federal Government. The allocation model does not use population.

Settlement
Four (4) of the thirteen (13) opioid pharmaceutical supply chain defendants have settled. However, the amount of money that is paid out depends upon participation.

What it means for San Luis
If there is full participation in the settlement across the nation, then San Luis could receive in the range of $291,000.00 over an 18-year period.

Next Steps
If the decision is to join in the plan for allocation, the signed Distribution Agreement is due to the Arizona Attorney General by Wednesday, November 10, 2021.

There is an online opt-in process due January 2, 2022, to join the two (2) national settlement agreements the Distributor Agreement and the Janssen Agreement.

Attachments
1. Proposed Order No. 2021-10 to Adopt the Distribution Agreement.
2 the Distribution Agreement
3. Exhibit A, the approved uses of the fund to combat the opioid crisis.
4. Exhibit B, "Regions" Allocations (A Region is a County plus its constituent cities and towns)
5. Exhibit C, "Local Government Allocations (A Local Government is either a county, city or town)
6. Exhibit D Sliding scale for county allocations if not all 91 cities in Arizona adopt the Distribution Agreement (90 signed the MOU).
7. The Arizona Attorney General's September 20, 2021, Cover Letter to the Distribution Agreement.
8. The Notice of Settlement from the national settlement administrators.
9. The Distributor Settlement Agreement.
10. The Janssen Settlement Agreement

San Luis City Council Prior Action
11. November 13, 2019, San Luis Order No. 2019-10 authorizing joining the class action.
12. December 9, 2020, San Luis Order No. 2020-19 joining the MOU for the allocation plan
13. PowerPoint Slides

RECOMMENDATION / SUGGESTED MOTION:

I MOVE TO APPROVE AND ADOPT ORDER NO. 2021-10 TO JOIN THE ONE ARIZONA DISTRIBUTION SETTLEMENT FUNDS AGREEMENT AND TO OPT INTO THE NATIONAL OPIOID SETTLEMENTS AS PRESENTED.

Fiscal Impact

IS THERE FISCAL IMPACT ASSOCIATED WITH THIS ITEM:: Yes
CITY/STATE/FEDERAL FUNDS:: Possible Future City
TOTAL:: N/A
BUDGETED AMOUNT:: N/A
AVAILABLE AMOUNT TO TRANSFER:: N/A
ACCT NAME & GL#/REMAINING BALANCE BEFORE PURCHASE:: N/A

FISCAL IMPACT STATEMENT (IF THIS IS A BUDGET TRANSFER, YOU MUST ATTACH THE BUDGET ADJUSTMENT FORM):

The city's participation in the settlements will increase revenue for the city to address the opioid crisis. However, the dollar amount is unknown. It is dependent upon participation nationwide.