To: Mark R. Hafner, City Manager
From: Sarah Hensley, Administrative Services Manager
Subject:
Title
Consider a resolution approving the Texas Opioid Abatement Fund Council and Settlement Allocation Term Sheet (Term Sheet) in its entirety, as provided by the State of Texas, through the Office of the Attorney General; and adopting the allocation method for opioid settlement proceeds as set forth in said Term Sheet; and authorizing the City Manager to execute all documents relating thereto on behalf of the City of Keller, Texas.
Background:
Texas, along with a broad coalition of states and subdivisions, has reached final agreements with four companies to resolve legal claims against for their role in the opioid crisis. One agreement is with opioid manufacturer Johnson & Johnson (J&J). The other is three major pharmaceutical distributors: AmerisourceBergen, Cardinal Health, and McKesson.
The two agreements provide for $26 billion in payments over 18 years, with $23.9 billion available for opioid abatement and significant amounts front loaded. Funding will be distributed to states according to the allocation agreement reached among the Attorneys General. Subdivisions can only participate in the agreement if their state participates. Texas’ combined share is almost $1.5 billion: $1.17 billion from the distributors and $268 million from J&J. Distribution within Texas is handled through an intrastate agreement between the state and litigating subdivisions. The funding must be used to support any of a wide variety of strategies to fight the opioid crisis. Separate provisions exist to compensate attorneys who have pursued opioid litigation on behalf of states and local governments. Once the state agrees to participate, then the more subdivisions that join, the more money everyone in Texas will receive. Future opioid litigation may result in suspension and reduction of payments. Even without full resolution of claims, states and subdivisions can still receive substantial payments by resolving a significant portion of current and future claims.
Financial Impact:
If the City Council adopts the proposed resolution, and Texas receives maximum funds from the distributors and Johnson and Johnson, the City of Keller will receive up to $96,659.81.
Citizen Input/Board Review:
N/A
Legal Review:
The City Attorney has reviewed and approved the proposed resolution.
Alternatives:
City Council has the following alternatives:
- Approve as submitted
- Approve with changes
- Denial