City, County: how to spend opioid settlement funds

The City of Las Cruces and Doña Ana County are looking at how best to use opioid settlement funding to address drug use in the community.

In the aftermath of the opioid epidemic – when communities nationwide saw increased hospitalizations and deaths due to opioid abuse – states and local governments across the country sued manufacturers, retailers and distributors. This resulted in a multi-billion settlement.

The county and city will receive about $24 million from distributors, manufacturers and retailers of opioid medicines through 2038. Some of that funding will come through one-time payments while other parts of funding will come over the course of a few years to many years. 

Already the county has received about $5 million and is expecting a total of approximately $14 million, meanwhile, Las Cruces has received $3.7 million and expects just under $10 million in opioid settlement funds.

The City Council and County Commission heard a presentation about this funding during a joint work session last week. During the meeting, Jamie Michael, director of the county’s Health and Human Services Department, provided an overview of the nine areas where the county and city might invest the opioid settlement funds. These nine areas are outlined in the settlement agreement and include overdose reversal drugs such as Naloxone, medication-assisted treatment, pregnancy and postpartum care, neonatal abstinence syndrome, recovery services, treatment of incarcerated people, prevention programs, syringe service programs and data collection or research.

“They can be very broad and we can’t fund all nine of them or we wouldn’t do a very good job at anything,” she said.

Instead of focusing on all nine strategies, an advisory council has four recommended strategies: medication assisted treatment, recovery services, prevention programs and data collection and research.

“We want to use the money to save lives,” Michael said. “That’s at the core of this investment. We want to use it on things that are evidence-based, so not just a great idea that I had, but really something that has some evidence behind it so the investment is going to have a proven outcome. We want to invest in youth [drug use] prevention so we can kind of stop perpetuating some of the impact that opioids have in our community. We want to focus on racial equity and we also want to be fair and transparent in the process.” 

During the meeting, Las Cruces Chief Administrative Officer Barbara Bencomo said the advisory council also discussed creating a trust for some of the settlement funds.

“This is essentially what the state has done with their funds where they are setting aside a large portion of the funds and then allocating a portion every year to be expended,” she said.

The state received 45 percent of the settlement funds while local governments like Las Cruces and Doña Ana County are splitting the remaining 55 percent.

Bencomo said New Mexico is expected to receive about $310 million and, so far, has received more than $90 million.

By setting some of the funds aside in a trust structure, Bencomo said New Mexico is ensuring there is a “stream of funds that can be spent years into the future once the distributions from the settlements cease.”

“One consideration whether to establish a trust is to think about what you want to address now and what is the magnitude of the problem, what is the magnitude of the expenditure that would be necessary to address the problem in your community,” she said.

She provided a couple of scenarios including investing all of the funds into a trust and spending $540,000 of the money from that trust annually for ten years or placing half into trust and using the other half for up-front investments in addressing addiction.

“Over time, trusts tend to grow. That’s the purpose of establishing a trust, to have a source of funds into the future,” Bencomo said.

Even if the county and city choose not to go with a trust, they will continue receiving funds over a period of 17 years through the settlement.

Michael said the next steps include determining the role of each local government. Additionally, she said another future step is “looking at some specific activities and programs and what associated outcome measures we want for the initial funding.”

Michael said another step is to develop a scope of work and determine the process for distributing the money, monitoring the investment and reporting back.

“We want to, throughout this process, make sure we’re seeking approval from both the [city] council and the [county] commission,” she said.