Agenda - 09-17-2024; 6-b - Opioid Settlement Funding Discussion

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1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: September 17, 2024 Action Agenda Item No. 6-b SUBJECT: Opioid Settlement Funding Discussion DEPARTMENT: County Manager ATTACHMENT(S): INFORMATION CONTACT: 1. Current County Opioid Programs Kirk Vaughn, (919) 245-2153 2. Orange County Funding Dashboard PURPOSE: To review the cashflow analysis of the Opioid Settlement Funds by County staff and discuss different strategies for spending these funds, and provide direction to staff and the Opioid Advisory Committee. BACKGROUND: The County is a recipient of the NC Opioid Settlement Funds and will receive $12,296,286 over the course of eighteen (18) years. The structure of these funds is unique based on the specific repayment plans in each defendant's settlement (See Attachment 2). Because of the unique frontloaded structure, the County is faced with two distinct facts that it must balance over the coming fiscal years. The first is that the County has a significant reserve of funds on hand, $2.3 million, that could be allocated directly to nonprofit agencies or to County programs that provide high impact opioid abatement services this fiscal year. The second is that as settlement payments decline in future years, the Settlement Fund will not be able to sustain the five (5) existing County programs. By the last three (3) years of the Opioid Settlement Fund, FY 2036-39, the cost of the five (5) programs would exceed new annual payments by over$1 million. Therefore, the County will need to have a general plan to either end those five (5) programs (See Attachment 1), or transition those programs into the General Fund. Those programs currently support seven (7) time-limited positions. Based on the realities of this funding trend, County staff recommends removing the County programming from the Opioid Advisory Committee's awards. The County programs would be reviewed annually based on performance during the annual budget process. The exact timing of this transition or termination of programs would be determined by the allocation of funds for other initiatives. These could represent funding allocated to nonprofit organizations or to provide annual support for the operating subsidy of the new Behavioral Health Crisis Diversion Facility. Once completed, the Crisis Diversion Facility will require an estimated $2.8 million annual County tax supported subsidy based on current assumptions. The County can use Opioid Funds to offset some of that subsidy. In addition, the annual community meeting identified the Recovery Housing Support as the most critical need. The County could pursue this type of resource in partnership with Alliance Health using Opioid Settlement Funds.