Resources for Recovery – Cities Use State’s Opioid Settlement Funds to Address the Epidemic

By Suzy Frisch

Duluth was coming into a significant amount of money from Minnesota’s state and local government opioid settlement fund, and the city needed to decide the best approach for distributing it. Police Chief Mike Ceynowa strongly believed that Duluth couldn’t arrest its way out of the deeply rooted problem. The city set out to develop a multifaceted strategy.

During the next decade, a total of $3.56 million will head to Duluth to help people struggling with opioid addiction and support those responding to the crisis. The funds stem from Minnesota’s participation in a $26 billion multistate settlement with opioid manufacturers, pharmaceutical distributors, and retail pharmacy chains. The state and its local governments expect to receive $535 million during the next 18 years, targeting an epidemic that has been impacting communities big and small since the 2000s.

To complement the city’s existing efforts to hold drug traffickers and large-quantity dealers accountable, Duluth will allocate settlement dollars to continue funding for its Substance Use Response Team. These staffers, called peer recovery specialists, do outreach and seek to build connections with people after an overdose. Duluth also will devote money to hiring a homeless encampment coordinator.

In addition, settlement funds will pay for two new vehicles during the next 10 years, plus wound care kits and hygiene supplies. Duluth plans to direct funds to support community organizations that address opioid addiction and its effects, as well as victim services specialists who connect people with programs and other care.

“As a city, we’re not a social services provider but we are a gateway,” Ceynowa said. “We know there is no one solution for every person and that people have found recovery in different ways. We want to support people on their journey to recovery by guiding them to a path and supporting that choice.”

Opioid settlement fund allocations

Cities and counties across Minnesota are having similar conversations about the best ways to spend the settlement funding. Work began in 2021 when the state brought together city and county governments to determine how Minnesota would allocate its share of the funds. The final agreement resulted in 75% of the money going to cities and counties and 25% to the state. Drilling down further, cities that were parties in the national litigation, plus those with populations over Smaller communities can access funds through their counties and the state, said Patricia Beety, general counsel for the League of Minnesota Cities.

“I’m proud to say that we had 100% sign-on from cities and counties to the distribution and allocation terms, and that was a heavy lift,” Beety said. “That didn’t happen in every state.”

It’s critical to get local governments involved statewide because the epidemic is an entrenched problem that has continued to grow in recent years. In fact, the number of opioid-involved overdose deaths has more than doubled since 2019, with 1,002 people dying in 2022. Black Minnesotans are dying at more than three times the rate as white Minnesotans, while Native American Minnesotans are dying at more than nine times the rate, according to the office of Gov. Tim Walz.

State guidance and resources

Minnesota’s state and local government allocation agreement provides guidelines for spending the settlement funds, stressing that distributions should focus on public health, public safety, and human services. Governments should direct allocations to evidence-based interventions that save lives and mitigate lifelong harms from drug use. In addition, governments should align with other available resources and collaborate with each other or other organizations. Strategies can include prevention, harm reduction such as Narcan, treatment, and recovery services like peer recovery specialists, reports Jeremy Drucker, director of the Minnesota Office of Addiction and Recovery.

Minnesota set up a dashboard for participants to report how they are spending the settlement funds. The intention is to ensure that they are distributed in the most impactful way while also providing inspiration to local governments. Another key resource is the state’s Opioid Epidemic Response Advisory Council, which is developing a statewide strategy and priorities to address the addiction and overdose epidemic in Minnesota.

In 2023, cities and counties started populating the dashboard. However, a number of allocations are not yet listed. That’s because many governments were fact-finding and considering how to generate the most impact in their communities, Beety said. Governments have options: they can distribute funds annually or pool funds over several years for larger projects. Cities also can designate that their county will receive their allocated funds.

Cities that are too small to receive direct funding should know that “no matter what size they are, they are still part of this,” Beety added. “The allocation agreement specifically provides that they have a seat at the table with their counties. An annual strategy meeting attended by all local governments in a county is required to discuss fund priorities and impacts.”

Cities develop plans, get to work

In Mankato, the city decided to devote its total settlement resources of $1.3 million to prevention and treatment, said City Manager Susan Arntz. Mankato created its Opioid Remediation Community Grant, which provides grants of up to $25,000 each annually to nonprofits based in the city.

After talking with community leaders in Mankato, “we made the conscious decision that we wanted to get the money upstream as far as possible in the hands of the people who could help others make change,” Arntz said. “We thought we should get the money back out into the community through partners that are helping to address opioid addiction. We want to do as much as we can to prevent as much as we can now instead of managing the outcomes later.”

Mankato set some parameters, including that the nonprofit applicants must not deny benefits or exclude anyone from participating in their programs. Grant recipients also must report how they spent the funds each year. In addition, nonprofits cannot use the funds to pay off a debt, and other governments are not eligible. Finally, if an application involves a collaboration between two or more organizations, all participants must sign a letter of intent showing their commitment to the project.

Representatives from city staff and public safety, with support from the Mankato City Council, set the strategy to focus mostly on prevention. Then it took time to shape the grant program and publicize the opportunity to the community. It was important to find the right audiences for publicity, such as reaching out to a consortium of nonprofits in Mankato, and helping applicants develop their ideas for grant proposals, Arntz said.

In Duluth, it was essential to evaluate existing resources and community partners to consider what role they might play. Duluth also encouraged collaborations between city departments and nonprofits to develop potential solutions. Another step involved listening to people with lived experience in addiction and recovery to learn what worked for them, according to Ceynowa. “Cities need to look at what they can handle and what they’re willing to try and experiment with, because no one has the exact answer yet,” he said. “We wouldn’t see this [epidemic] on a state and national level if someone had figured it out.”

Mankato’s first grant in 2023 went to the Mankato Area Public Schools for $125,000 over five years. It will pay for a mental health navigator who serves five elementary schools. The service started as a pilot program with the United Way, and its success in elementary and middle schools prompted the effort to secure grant funding for a second navigator.

About 200 students were referred for mental health services, and the grant funding paved the way for 120 to receive care. “These are our little kids that need help getting access to mental health resources,” Arntz said. “This program allowed them to get access and assistance sooner and faster than if they tried to get it on their own.”

This summer, Mankato issued a second grant to Mankato’s MY Place, the community’s version of a Boys & Girls Club. It works with youth and families, providing education about mental health and opioid addiction. The program received $1,800 initially for a summer mental health pilot program. It will ultimately receive a total of $7,200 to increase mental health referrals and to help youth with social and emotional skill development.

Arntz and other city leaders hope that the grants’ early achievements will breed even more successes as other organizations and community stakeholders see the funding in action. “We can continue to build success with the things we’re doing. We also have flexibility to be nimble with the grant program we created and change things if needed,” Arntz said. “It’s important to remember that this isn’t money for the city. It’s money to get out into the community to make a difference in the lives of others.”

Suzy Frisch is a freelance writer.