HomeMy WebLinkAboutWALMARTDocuSign Envelope ID: B15AAEBD-74AB-4EFF-B97F-0776E33BOD86 A-2023-060-01
INSURANCE NOT REQUIRED
Proposed California State -Subdivision Agreement
WORK MAY PROCEED Regarding Distribution and Use of
Settlement Funds — Walmart Settlement
CLERK OF THE COUNCIL
1. Introduction
DATE:
Pursuant to the Walmart Settlement Agreement, dated as of November 14, 2022, and any
revision thereto (the "Walmart Settlement Agreement'), including Section V and Exhibit O, the
N State of California proposes this agreement (the "CA Walmart Allocation Agreement') to
govern the allocation, distribution, and use of Settlement Fund payments made to California
G pursuant to Sections IV and V of the Walmart Settlement Agreement. For the avoidance of
¢ doubt, this agreement does not apply to payments made pursuant to Sections VIII or IX of the
W ]mart Settlement Agreement.
O: CAoC�o1w�. (31A)Q-
Pursuant to Exhibit O, Paragraph 4, of the Walmart Settlement Agreement, acceptance of this
CA Walmart Allocation Agreement is a requirement to be a Participating Subdivision.
2. Definitions
a) CA Participating Subdivision means a Participating Subdivision that is also (a) a
Plaintiff Subdivision and/or (b) a Primary Subdivision with a population equal to
or greater than 10,000. For the avoidance of doubt, eligible CA Participating
Subdivisions are those California subdivisions listed in Exhibit C (excluding
Litigating Special Districts) and/or Exhibit I to the Walmart Settlement Agreement.
b) Allergan Settlement Agreement means the Allergan Settlement Agreement
dated November 22, 2022, and any revision thereto.
c) CVS Settlement Agreement means the CVS Settlement Agreement dated December 9,
2022, and any revision thereto as well as any modification thereto entered into by the
State of California and CVS.
d) Distributor Settlement Agreement means the Distributor Settlement Agreement
dated July 21, 2021, and any revision thereto.
e) Janssen Settlement Agreement means the Janssen Settlement Agreement dated
July 21, 2021, and any revision thereto.
i) Teva Settlement Agreement means the Teva Settlement Agreement dated
November 22, 2022, and any revision thereto.
g) Walgreens Settlement Agreement means the Walgreens Settlement Agreement
dated December 9, 2022, and any revision thereto.
h) CA Litigating Special District means a Litigating Special District located in
California. CA Litigating Special Districts include Downey Unified School District,
Elk Grove Unified School District, Kern High School District, Montezuma Fire
Protection District (located in Stockton, California), Santa Barbara San Luis Obispo
Regional Health Authority, Inland Empire Health Plan, Health Plan of San Joaquin,
San Leandro Unified School District, Pleasant Valley School District Board, and LA
Care Health Plan.
1 0.
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i) Plaintiff Subdivision means a Subdivision located in California, other than a CA
Litigating Special District, that filed a lawsuit, on behalf of the Subdivision
and/or through an official of the Subdivision on behalf of the People of the State
of California, against one or more Opioid Defendants prior to October 1, 2020.
j) Opioid Defendant means any defendant (including but not limited to Teva
Pharmaceutical Industries Ltd., Allergan Finance, LLC, Allergan Limited, CVS
Health Corporation, CVS Pharmacy, Inc., Walgreen Co., Walmart Inc., Johnson &
Johnson, Janssen Pharmaceuticals, Inc., Purdue Pharma L.P., Cardinal Health, Inc.,
AmerisourceBergen Corporation, and McKesson Corporation) named in a lawsuit
seeking damages, abatement, or other remedies related to or caused by the opioid
public health crisis in any lawsuit brought by any state or local government on or
before October 1, 2020.
3. General Terms
This agreement is subject to the requirements of the Walmart Settlement Agreement, as well as
applicable law, and the Walmart Settlement Agreement governs over any inconsistent provision
of this CA Walmart Allocation Agreement. Terms used in this CA Walmart Allocation
Agreement have the same meaning as in the Walmart Settlement Agreement unless otherwise
defined herein.
Pursuant to Section V(D)(1) of the Walmart Settlement Agreement, (a) all Settlement Fund
payments will be used for Opioid Remediation, except as allowed by Section V(B)(2) of the
Walmart Settlement Agreement; and (b) at least seventy percent (70%) of Settlement Fund
payment amounts will be used solely for future Opioid Remediation.
4. State Allocation
The Settlement Fund payments to California,' pursuant to the Walmart Settlement Agreement,
shall be allocated as follows: 15% to the State Fund; 70% to the Abatement Accounts Fund; and
15% to the Subdivision Fund. For the avoidance of doubt, all funds allocated to California from
the Settlement Fund shall be combined pursuant to this CA Walmart Allocation Agreement, and
15% of that total shall be allocated to the State of California (the "State of California
Allocation"), 70% to the California Abatement Accounts Fund ("CA Abatement Accounts
Fund"), and 15% to the California Subdivision Fund ("CA Subdivision Fund").
I For purposes of clarity, use of the term "California" refers to the geographic territory of
California and the state and its local governments therein. The term "State" or "State of
California" refers to the State of California as a governmental unit.
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A. State of California Allocation
Fifteen percent of the total Settlement Fund payments will be allocated to the State and used by
the State for future Opioid Remediation.
B. CA Abatement Accounts Fund
Allocation of CA Abatement Accounts Funds
a) Seventy percent of the total Settlement Fund payments will be allocated to the CA
Abatement Accounts Fund. The funds in the CA Abatement Accounts Fund will be
allocated based on the allocation model developed in connection with the proposed
negotiating class in the National Prescription Opiate Litigation (MDL No. 2804), as
adjusted to reflect only those cities and counties that are eligible, based on population or
litigation status, to become a CA Participating Subdivision. The percentage from the CA
Abatement Accounts Fund allocated to each CA Participating Subdivision is set forth in
Appendix 1 in the column entitled abatement percentage (the "Local Allocation"). For
the avoidance of doubt, CA Litigating Special Districts and California towns, cities, and
counties with a population less than 10,000 are not eligible to receive an allocation of
CA Abatement Accounts Funds.
b) A CA Participating Subdivision that is a county, or a city and county, will be allocated its
Local Allocation share as of the date on which it becomes a Participating Subdivision,
and will receive payments as provided in the Walmart Settlement Agreement.
c) A CA Participating Subdivision that is a city will be allocated its Local Allocation share
as of the date on which it becomes a Participating Subdivision. The Local Allocation
share for a city that is a CA Participating Subdivision will be paid to the county in which
the city is located, rather than to the city, so long as: (a) the county is a CA Participating
Subdivision, and (b) the city has not advised the Settlement Fund Administrator that it
requests direct payment at least 60 days prior to a Payment Date. A Local Allocation
share allocated to a city but paid to a county is not required to be spent exclusively for
abatement activities in that city, but will become part of the county's share of the CA
Abatement Accounts Funds, which will be used in accordance with Section 4.B.ii (Use
of CA Abatement Accounts Funds) and reported on in accordance with Section 4.B.iii
(CA Abatement Accounts Fund Oversight).
d) A city within a county that is a CA Participating Subdivision may opt in or out of direct
payment at any time, and it may also elect direct payment of only a portion of its share,
with the remainder going to the county, by providing notice to the Settlement Fund
Administrator at least 60 days prior to a Payment Date. For purposes of this CA Walmart
Allocation Agreement, the Cities of Los Angeles, Oakland, San Diego, San Jose and
Eureka will be deemed to have elected direct payment if they become Participating
Subdivisions.
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e) The State will receive the Local Allocation share of any payment to the Settlement Fund
that is attributable to a county or city that is eligible to become a CA Participating
Subdivision, but that has not, as of the date of that payment to the Settlement Fund,
become a Participating Subdivision.
f) Funds received by a CA Participating Subdivision, and not expended or encumbered
within five years of receipt and in accordance with the Walmart Settlement Agreement
and this CA Walmart Allocation Agreement shall be transferred to the State; provided
however, that CA Participating Subdivisions have seven years to expend or encumber CA
Abatement Accounts Funds designated to support capital outlay projects before they must
be transferred to the State. This provision shall not apply to the Cost Reimbursement
Funds, which shall be controlled by Appendix 2.
ii. Use of CA Abatement Accounts Funds
a) The CA Abatement Accounts Funds will be used for future Opioid Remediation in one or
more of the areas described in the List of Opioid Remediation Uses, which is Exhibit E
to the Walmart Settlement Agreement.
M b) In addition to this requirement, no less than 50% of the funds xecoived-by a CA
Participating Subdivision from the Abatement Accounts Find in each calendar year
will be used for one or more of the following High Impact Abatement Activities:
(1) the provision of matching hands or operating costs for substance use disorder
facilities within the Behavioral Health Continuum Infrastructure Program;
(2) creating new or expanded Substance Use Disorder ("SUD") treatment infrastructure;
1' (3) addressing the needs of communities of color and vulnerable populations (including
sheltered and unsheltered homeless populations) that are disproportionately
impacted by SUD;
(4) diversion of people with SUD from the justice system into treatment, including by
providing training and resources to first and early responders (sworn and non -sworn)
and implementing best practices for outreach, diversion and deflection,
employability, restorative justice, and harm reduction; anti/or. ' ..
(5)interventions to prevent drug addiction in vulnerable youth;
c,) The California Department of Health Care Services ("DHCS") may:add to this list (but
not delete from it) by designating additional High Impact Abatement Activities. DHCS
will make reasonable efforts to consult with stakeholders, including the CA
Participating Subdivisions, before adding additional High Impact Abatement Activities
to this list. -
d) For the avoidance of doubt, and subject to the requirements of the Walmart: Settlement
Agreement and applicable law, CA Participating Subdivisions may form agreements or
ventures, or otherwise work in collaboration with, federal, state, local, tribal or private
mW1'==;: sector entities in pursuing Opioid Remediation activities funded from the CA Abatement `
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Accounts Fund. Further, provided that all CA Abatement Accounts, Funds are used for
Opioid Remediation consistent with the Walmart Settlement Agreement and this CA
Walmart Allocation Agreement, a county and any cities or towns within the county may
agree to reallocate their respective shares of the CA Abatement Accounts Funds among
themselves, provided that any direct distribution may only be to a CA Participating
Subdivision and any CA Participating Subdivision must agree to their share being
reallocated.
in. CA Abatement Accounts Fund Oversight
a) Pursuant to Section 5.below, CA Participating Subdivisions receiving settlement funds
must prepare and file reports annually regarding the use of those funds. DHCS may
regularly review the reports prepared by CA Participating Subdivisions about the use of
CA Abatement Accounts Funds for compliance with the Walmart Settlement•
Agreement and this CA Walmart Allocation Agreement.
b) If DHCS determines that a CA Participating Subdivision's use of CA Abatement
Accounts Funds is inconsistent with the Walmart Settlement Agreement`or this CA'
Walmart Allocation Agreement, whether through review of reports or information
from any other "sources, DHCS shall send a request to meet and confer with the CA"'
Participating Subdivision The parries shall meet and confer in an effort to resolve the
concern.
c) If the parties .are unable to reach a resolution, DHCS may conduct an audit of the -
Subdivision's use of the CA Abatement Accounts Funds within one year of the request to
meet and confer, unless;the parties. mutually agree in writing to'extcnditbe:meet and:
confer time frame.
d) If the concern siill•canriot be resolved, the State may bring a motion of 9ction in the court
where the State has filed its Consent Judgment to resolve the coneeirror othcrwise
enforce the requirements of the Walmart Settlement Agreement or this CA Walmart
Allocation Agreement. However, in no case shall any audit be conducted" or motion be
brought, as to a specific expenditure of funds, more than five years after the date on
which the expenditure of the funds was reported to DHCS, in accord0ce,with this`,
agreement.
e) Notwithstanding the foregoing, this Agreement does not limit the statutory or
constitutional authority of any state or local agency or official: to; conduct audits,
investigations, or. other oversight: activities, or to pursue administeativey civil,.or ,
criminal enforcement actions:
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C. CA Subdivision. Fund
Fifteen percent of the total Settlement Fund payments will be allocated to the CA
Subdivision Fund. All funds in the CA Subdivision Fund will be allocated among the
Plaintiff Subdivisions that are Participating Subdivisions. The funds will be used, subject
to any limits imposed by the Walmart Settlement Agreement and this CA Walmart
Allocation Agreement, to fund future Opioid Remediation and reimburse past opioid-
related expenses, which may include fees and expenses related to litigation, and to pay
the reasonable fees and expenses.of the Special Master as set forth in Appendix 2,
The CA Subdivision Funds will be allocated as follows:
a) First, fiends in the CA Subdivision Fund shall be used to pay the Special Master's
reasonable fees and expenses in accordance with the procedures and limitations
set forth in Appendix 2 to'this document;
b) Second, funds will be allocated to Plaintiff Subdivisions that are Participating
Subdivisions that have been awarded Costs, as defined by and in accordance with the
procedures and limitations. set.forth in Appendix 2 to this document.
c) Funds remaining 'in the CA ,Subdivision Fund, which shall consist of no less than
50% of the total CA Subdivision Fund received in any year pursuant to Appendix 2,
Section 2.e.v, will be distributed to Plaintiff Subdivisions that are Participating
Subdivisions, in. relative proportion to the Local Allocation. These funds shall be used
to fund future opioid-related projects and to reimburse past opioid-related expenses,
which may include fees and expenses related to litigation against any Opioid
Defendant.
D. Provision for State Ba&l Stop Agreement
On August 6, 2021, Judge Dan Polster of the U.S. District Court, Northern District of Ohio,
Eastern Division, issued an order (ECF,Docket Number 3814) ("MDL Fees Order") in the
National Prescription Opiate Litigation (MDL No. 2804) "cap[ping] all applicable contingent fee
agreements at t5%." Private counsel representing Plaintiff Subdivisions should seek its
contingency fees and costs from the Attorney Fee Fund or Cost Funds under the Walmart
Settlement Agreement, and, if applicable, the Allergan Settlement Agreement, CVS Settlement
Agreement, Distributor Settlement Agreement, Janssen Settlement Agreement, Teva Settlement
Agreement, and Walgreens Settlement Agreement.
A Plaintiff Subdivision may separately agree to use its share of the CA Subdivision Fund to pay
for fees or costs incurred by its contingency -fee counsel ("State Back -Stop Agreement"),
pursuant to Exhibit R, section I(W), of the Walmart Settlement Agreement and the MDL Fees
Order, so long as such contingency fees do not exceed a total contingency fee of 15% of the total
gross recovery of the Plaintiff Subdivision pursuant to the Walmart Settlement, inclusive of
contingency fees from the national Attorney Fee Fund and this State Back -Stop Agreement.
Before seeking fees or litigation costs and expenses from a. State Back -Stop Agreement, private
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counsel representing Plaintiff Subdivisions must first seek contingency fees and costs from the
Attorney Fee Fund or Cost Funds created under the Walmart Settlement Agreement. Further,
private counsel may only seek reimbursement for litigation fees and costs that have not
previously been reimbursed through prior settlements or judgments.
To effectuate a State Back -Stop Agreement pursuant to this section, an agreement in the form of
Appendix 3 may be entered into by a Plaintiff Subdivision, private counsel, and the California
Office of the Attorney General. The California Office of the Attorney General shall, upon the
request of a Plaintiff Subdivision, execute any agreement executed by a Plaintiff Subdivision and
its private counsel if it is in the form of Appendix 3. The California Office of the Attorney
General will also consider requests from Plaintiff Subdivisions to execute and enter into
agreements presented in other forms.
For the avoidance of doubt, this agreement does not require a Plaintiff Subdivision to request or
enter into a State Back -Stop Agreement, and no State Back -Stop Agreement shall impose any
duty or obligation on the State of California or any of its agencies or officers, including without
limitation the Attorney General.
5. State and Subdivision Reporting
a) DHCS will prepare an annual written report regarding the State's use of funds from the
settlement until those funds are fully expended and for one year thereafter. These reports
will be made publicly available on the DHCS web site.
b) Each CA Participating Subdivision that receives payments of funds from the settlement
will prepare written reports at least annually regarding the use of those funds, until those
funds are fully expended and for one year thereafter. These reports will also include a
certification that all funds that the CA Participating Subdivision has received through
the settlement have been used in compliance with the Walmart Settlement Agreement
and this CA Walmart Allocation Agreement. The report will be in a form reasonably
determined by DHCS. Prior to specifying the form of the report DHCS will confer with
representatives of the Plaintiff Subdivisions.
c) The State and all CA Participating Subdivisions receiving CA Abatement Accounts
Funds will track all deposits and expenditures. Each such subdivision is responsible
solely for the CA Abatement Accounts Funds it receives. A county is not responsible for
oversight, reporting, or monitoring of CA Abatement Accounts Funds received by a city
within that county that receives direct payment. Unless otherwise exempt, Subdivisions'
expenditures and uses of CA Abatement Accounts Funds and other Settlement Funds
will be subject to the normal budgetary and expenditure process of the Subdivision.
d) Each Plaintiff Subdivision receiving CA Subdivision Funds will track all deposits and
expenditures, as required by the Walmart Settlement Agreement and this CA Walmart
Allocation Agreement. Among other things, Plaintiff Subdivisions using monies from
the CA Subdivision Fund for purposes that do not qualify as Opioid Remediation must
identify and include in their annual report, the amount and how such funds were used,
including if used to pay attorneys' fees, investigation costs, or litigation costs. Pursuant
to Section V(B)(2) of the Walmart Settlement Agreement, such information must also Ca
be reported to the Settlement Fund Administrator and Walmart.
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e) In each year in which DHCS prepares an annual report DHCS will also host a meeting
to discuss the annual report and the Opioid Remediation activities being carried out by
the State and Participating Subdivisions.
6. Miscellaneous
a) The State or any CA Participating Subdivision may bring a motion or action in the court
where the State has filed its Consent Judgment to enforce the requirements of this CA
Walmart Allocation.Agreement. Before filing such a motion or action the State will meet
and confer with any CA Participating Subdivision that is the subject of the anticipated
motion or action, and vice versa.
b) Except as provided in the Walmart Settlement Agreement, this CA Walmart Allocation
Agreement is not enforceable by any party other than the State and the CA Participating
Subdivisions. It does not confer any rights or remedies upon, and shall not be
enforceable by, any third party.
c) Except as provided in the CA Walmart Allocation Agreement, if any provision of this
agreement or the application thereof to any person, entity, or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this agreement, or the application
of such provision to persons, entities, or circumstances other than those as to which it is
invalid or unenforceable, will not be affected thereby, and each other provision of this
agreement will be valid and enforceable to the fullest extent permitted by law.
d) Except as provided in the Walmart Settlement Agreement, this agreement shall
be governed by and interpreted in accordance with the laws of California.
Ell :o
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The undersigned, Santa Ana city, ACKNOWLEDGES acceptance of this Proposed California State -
Subdivision Agreement Regarding Distribution and Use of Settlement Funds — Walmart Settlement
is a requirement to be an Initial Participating Subdivision in the Walmart Settlement and
ACCEPTS this Proposed California State -Subdivision Agreement Regarding Distribution and Use
of Settlement Funds — Walmart Settlement. EXECUTED on
Signature:
Name: Kristine Ridge
Title: City Manager
Date: �GLZ65,
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EXHIBIT K
Subdivision Participation Form
Will your subdivision or special district be signing the settlement participation form for the Walmart
Settlement at this time?
[X] Yes [ ] No
Governmental Entity: Santa Ana city State: CA
Authorized Official: Kristine Ride City Manager
Address 1: 20 Civic Center Plaza
Address 2: P.O. Box 1988
City, State, Zip: Santa Ana CA 92702
Phone: 714-647-5222
Email:
The governmental entity identified above ("Governmental Entity"), in order to obtain and in
consideration for the benefits provided to the Governmental Entity pursuant to the Settlement
Agreement dated November 14, 2022 ("Walmart Settlement"), and acting through the undersigned
authorized official, hereby elects to participate in the Walmart Settlement, release all Released Claims
against all Released Entities, and agrees as follows.
1. The Governmental Entity is aware of and has reviewed the Walmart Settlement, understands
that all terms in this Election and Release have the meanings defined therein, and agrees that
by this Election, the Governmental Entity elects to participate in the Walmart Settlement and
become a Participating Subdivision as provided therein.
2. The Governmental Entity shall promptly, and in any event within 14 days of the Effective
Date and prior to the filing of the Consent Judgment, dismiss with prejudice any Released
Claims that it has filed. With respect to any Released Claims pending in In re National
Prescription Opiate Litigation, MDL No. 2804, the Governmental Entity authorizes the
Plaintiffs' Executive Committee to execute and file on behalf of the Governmental Entity a
Stipulation of Dismissal With Prejudice substantially in the form found at
https://nationalopioidsettlement.com/.
3. The Governmental Entity agrees to the terms of the Walmart Settlement pertaining to
Subdivisions as defined therein.
4. By agreeing to the terms of the Walmart Settlement and becoming a Releaser, the
Governmental Entity is entitled to the benefits provided therein, including, if applicable,
monetary payments beginning after the Effective Date.
5. The Governmental Entity agrees to use any monies it receives through the Walmart
Settlement solely for the purposes provided therein.
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6. The Governmental Entity submits to the jurisdiction of the court in the Governmental
Entity's state where the Consent Judgment is filed for purposes limited to that court's role
as provided in, and for resolving disputes to the extent provided in, the Walmart
Settlement.
7. The Governmental Entity has the right to enforce the Walmart Settlement as provided
therein.
8. The Governmental Entity, as a Participating Subdivision, hereby becomes a Releasor for all
purposes in the Walmart Settlement, including but not limited to all provisions of Section X
(Release), and along with all departments, agencies, divisions, boards, commissions, districts,
instrumentalities of any kind and attorneys, and any person in their official capacity elected
or appointed to serve any of the foregoing and any agency, person, or other entity claiming
by or through any of the foregoing, and any other entity identified in the definition of
Releasor, provides for a release to the fullest extent of its authority. As a Releasor, the
Governmental Entity hereby absolutely, unconditionally, and irrevocably covenants not to
bring, file, or claim, or to cause, assist or permit to be brought, filed, or claimed, or to
otherwise seek to establish liability for any Released Claims against any Released Entity in
any forum whatsoever. The releases provided for in the Walmart Settlement are intended by
the Parties to be broad and shall be interpreted so as to give the Released Entities the broadest
possible bar against any liability relating in any way to Released Claims and extend to the
full extent of the power of the Governmental Entity to release claims. The Walmart
Settlement shall be a complete bar to any Released Claim.
9. In connection with the releases provided for in the Walmart Settlement, each
Governmental Entity expressly waives, releases, and forever discharges any and all
provisions, rights, and benefits conferred by any law of any state or territory of the
United States or other jurisdiction, or principle of common law, which is similar,
comparable, or equivalent to § 1542 of the California Civil Code, which reads:
General Release; extent. A general release does not extend to claims that the
creditor or releasing party does not know or suspect to exist in his or her favor at the
time of executing the release that, if known by him or her, would have materially
affected his or her settlement with the debtor or released party.
A Releasor may hereafter discover facts other than or different from those which it knows,
believes, or assumes to be true with respect to the Released Claims, but each Governmental
Entity hereby expressly waives and fully, finally, and forever settles, releases and discharges,
upon the Effective Date, any and all Released Claims that may exist as of such date but which
Releasors do not know or suspect to exist, whether through ignorance, oversight, error,
negligence or through no fault whatsoever, and which, if known, would materially affect the
Governmental Entities' decision to participate in the Walmart Settlement.
10. Nothing herein is intended to modify in any way the terms of the Walmart Settlement, to
which Governmental Entity hereby agrees. To the extent this Election and Release is
interpreted differently from the Walmart Settlement in any respect, the Walmart Settlement
controls.
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I have all necessary power and authorization to execute this Election and Release on behalf of the
Governmental Entity.
Signature:
Name:
Kristine Ridge
Title: City Manager
Date: M67