Title
Recommendation to Approve Two Amendments Totaling $270,000 for a Three-Year Extension Period as Follows: 1) Authorize the Acting City Manager to Execute a First Amendment with Kaiser Permanente Medical Center for Three Years in an Amount Not to Exceed $230,000 for City of Alameda Occupational Medical Services; and 2) Authorize the Acting City Manager to Execute a First Amendment with Preferred Alliance, Inc., for Three Years in an Amount Not to Exceed $40,000 for Drug Testing Services in Conjunction with Services Provided by Kaiser Permanente Medical Center. (Human Resources 2510)
Body
To: Honorable Mayor and Members of the City Council
From: Elizabeth D. Warmerdam, Acting City Manager
Re: Recommendation to Approve Two Amendments Totaling $270,000 for a Three-Year Extension Period as Follows: 1) Authorize the Acting City Manager to Execute a First Amendment with Kaiser Permanente Medical Center for Three Years in an Amount Not to Exceed $230,000 for City of Alameda Occupational Medical Services; and 2) Authorize the Acting City Manager to Execute a First Amendment with Preferred Alliance, Inc., for Three Years in an Amount Not to Exceed $40,000 for Drug Testing Services in Conjunction with Services Provided by Kaiser Permanente Medical Center.
BACKGROUND
The City of Alameda hires approximately 45-50 full-time employees as well as a number of part-time staff each year. Depending on the classification or position the City may require candidates, after the conditional offer of employment, to participate in a medical examination prior to hire. These medical examinations ensure the candidate can safely perform the essential functions of their position. Certain classification are also required to have medical examinations during employment in order to be compliant with United States Department of Transportation (USDOT) regulations.
Additionally, candidates in a limited number of classifications must pass a drug screen prior to hire. Employees who drive commercial vehicles for the City are required by the USDOT to be subject to drug and alcohol screens during employment on the basis of random selection, reasonable suspicion and post-accident.
In 2014, the City issued a request for proposal for occupational medical services. After a comprehensive review process Kaiser Permanente and Preferred Alliance were selected. On September 1, 2015, the City Council awarded two separate three-year contracts with up to two optional three year extensions to Kaiser Permanente Medical Center (Kaiser) in an amount not to exceed $200,000 for City of Alameda Occupational Medical Services and to Preferred Alliance, Inc. (Preferred Alliance) in an amount not to exceed $30,000 for Drug Testing Services in conjunction with services provided by Kaiser Permanente Medical Center.
DISCUSSION
Based on trends in actual utilization and increasing health care costs, the City staff is recommending that the City Council approve a three-year contract extension with both Kaiser Permanente Medical Center in an increased amount of not to exceed $230,000 for the extension period, and with Preferred Alliance, Inc., in an increased amount of not to exceed $40,000 effective September 1, 2018 through August 31, 2021. However, the actual amount expended will be determined by the number of occurrences requiring service under the contracts.
Kaiser is a full service occupational medicine provider that includes pre-employment physicals, drug and alcohol testing, fitness for duty exams, medical treatment for a workers compensation program, and other services.
Kaiser outsources its drug and alcohol testing services to a third party administrator, Preferred Alliance, Inc. Preferred Alliance is a Workplace Compliance Drug Alcohol Testing Administrator that has substantial experience administering drug and alcohol programs pursuant to USDOT regulations. As a result, if the City awards the contract to Kaiser, the City is also required to separately contract with Preferred Alliance. Preferred Alliance contracts with a licensed laboratory that meets the requirements of USDOT regulations, and also contracts with a Medical Review Officer (MRO) that will work closely with the City in the event of positive drug or alcohol tests.
This separate contract with Preferred Alliance will cover the administration and testing of our USDOT-regulated employees. Preferred Alliance also offers a variety of USDOT-related training workshops to managers, supervisors and USDOT covered employees.
FINANCIAL IMPACT
Existing vendor services are charged to the Alameda Fire Department and Alameda Municipal Power for services provided to those departments. The Human Resources Department pays for services provided to all other city departments. Under the current contracts and recommended contract extensions, the funds are budgeted in the respective City departments and charged to the professional services account. The total contract amounts for the three-year contract extensions are $230,000 to Kaiser Permanente Medical Center and $40,000 to Preferred Alliance, Inc. (for a total expenditure of $270,000); however, the actual amount expended will be determined by the number of occurrences requiring service under the contracts.
The cost of services under the recommended contract extensions will remain in effect for the three-year period effective September 1, 2018 through August 31, 2021. If the City decides to exercise the option of the second three-year extension, the cost for future services may escalate, depending on utilization and cost trends. In that case, to Kaiser Permanente Medical Center and Preferred Alliance, Inc. will provide a revised service fee schedule to the City in advance, allowing Human Resources staff to evaluate costs for reasonableness and affordability.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action does not affect the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
This activity is not a project and is exempt from the California Environmental Quality Act (CEQA) pursuant to section 15378(b)(4) of the CEQA guidelines, because it involves governmental fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.
RECOMMENDATION
Approve two amendments totaling $270,000 for a three-year extension period as follows: authorize the Acting City Manager to execute a first amendment with Kaiser Permanente Medical Center for three years in an amount not to exceed $230,000 for City of Alameda Occupational Medical Services; and authorize the Acting City Manager to execute a first amendment with Preferred Alliance, Inc., for three years in an amount not to exceed $40,000 for Drug Testing Services in conjunction with services provided by Kaiser Permanente Medical Center.
Respectfully submitted,
Nancy Bronstein, Human Resources Director
By,
Chris Low, Senior Human Resources Analyst
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibits:
1. Kaiser Agreement
2. Kaiser First Amendment
3. Preferred Alliance Agreement
4. Preferred Alliance First Amendment