Title
Recommendation to Authorize the City Manager to Execute Two Contract Amendments Totaling $300,000 as follows: 1) Second Amendment with Kaiser Permanente Medical Center, Substantially in the Form of Exhibit 3, for Three Years in an Amount Not to Exceed $260,000 for City of Alameda Occupational Medical Services; and 2) Second 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
EXECUTIVE SUMMARY
The City of Alameda (City) hires approximately 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 classifications are also required to have medical examinations during employment in order to be compliant with United States Department of Transportation (USDOT) regulations.
Candidates in a limited number of classifications must also pass a drug screen prior to hire. Additionally, employees who drive commercials vehicles for the City are also required by the USDOT to be subject to drug and alcohol testing during employment on the basis of random selection, reasonable suspicion, post-accident, and potentially, follow-up.
In 2015 City Council approved three year contracts with Kaiser Permanente Medical Center to perform the medical examinations and with Preferred Alliance, Inc. to support the drug and alcohol testing service. These contracts allowed for two additional three year terms. In 2018, City Council approved an amendment extending the term of both the Kaiser Permanente Medical Center and Preferred Alliance contracts by an additional three years. With the terms of both contract now set to expire, staff is requesting a second set of amendments to the contracts with Kaiser Permanente Medical Center, and Preferred Alliance, Inc. (Preferred Alliance) which would extend the terms through August 31, 2024.
BACKGROUND
The City is in the sixth year of an Agreement with Kaiser Permanente Medical Center to provide medical examinations associated with onboarding employees and ongoing medical screening. Compensation averages approximately $76,600 annually. Staff is recommending that the City Council authorize the City Manager to execute a second amendment to the Agreement to extend the term by an additional three years at cost not to exceed $260,000.
The City is in the sixth year of an Agreement with Preferred Alliance, Inc. to provide drug screening services during employee onboarding and any required ongoing screening. Compensation averages approximately $13,300 annually. Staff is recommending that the City Council authorize the City Manager to execute a second amendment to the Agreement to extend the term by an additional three years at a cost not to exceed $40,000.
DISCUSSION
On September 1, 2015, City Council approved contracts with two vendors to support the City’s employee onboarding and ongoing medical examination program. The contractors were Kaiser Permanente ($200,000) and Preferred Alliance ($30,000). Both contracts were for three years with two optional extensions of up to three years each.
On July 10, 2018, the Human Resources Department presented a recommendation to City Council to extend the contracts, from September 1, 2018 through August 31, 2021, with Kaiser Permanente Medical Center in an amount not to exceed $230,000 and Preferred Alliance in an amount not to exceed $40,000. City Council approved this recommendation.
Kaiser is a full service occupational medicine provider that includes pre-employment physicals, drug and alcohol testing, fitness for duty exams, and other services.
Kaiser outsources its drug and alcohol testing services to a third party administrator, Preferred Alliance, Inc., which is a Workplace Compliance Drug and Alcohol Testing Administrator that has substantial experience administering drug and alcohol testing programs pursuant to USDOT regulations. As a result, 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 a positive drug or alcohol test.
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.
Both contractors have performed to the City’s satisfaction over the last six years. Staff is now recommending a second extension of the terms for both contracts. The cost of the Kaiser Permanente Medical Center for onboarding employee medical examinations and follow up is not to exceed $260,000. The cost of the Preferred Alliance, Inc. for drug testing services is not to exceed $40,000. If approved both contracts would run from September 1, 2021 through August 31, 2024.
ALTERNATIVES
• Authorize the City Manager to execute the second amendment for both Kaiser Permanente Medical Center and Preferred Alliance, Inc. at the recommended amount.
• Authorize the agreements and reduce the amount the City is authorized to spend on each contract.
• Require the City to complete a request for proposal (RFP) for these services to identify a different vendor. This would require approval of a short-term contract with the current vendors in order to ensure the City could continue to meet the legal requirements fulfilled by these contracts for pre- and post-employment medical and drug screens during the RFP period.
FINANCIAL IMPACT
Existing vendor services are charged to the 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 three City departments and charged to the medical examinations account.
The total contract amounts for the three-year contract extensions are $260,000 to Kaiser Permanente Medical Center and $40,000 to Preferred Alliance, Inc. (for a total expenditure of $300,000); 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, 2021 through August 31, 2024. Staff evaluated the revised service fee schedules of Kaiser Permanente Medical Center and Preferred Alliance, Inc. for reasonableness and affordability prior to recommending the agreement.
|
Kaiser Permanente Contract |
Approval Date |
Authorized Amount |
Expended to Date |
|
Original Contract - Kaiser Permanente |
September 1, 2015 |
$200,000 |
$198,500 |
|
1st Amendment |
July 10, 2018 |
$230,000 |
$110,000 |
|
Total |
|
$430,000 |
$308,500 |
|
|
|
|
|
|
Preferred Alliance |
Approval Date |
Authorized Amount |
Expended to Date |
|
Original Contract - |
September 1, 2015 |
$30,000 |
$17,000 |
|
1st Amendment |
July 10, 2018 |
$40,000 |
$24,000 |
|
Total |
|
$70,000 |
$41,000 |
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is consistent with the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) applies to projects that have the potential for causing a significant effect on the environment. This action is not a project pursuant to Public Resources Code section 21065 and CEQA guidelines section 15378.
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Authorize the City Manager to execute a Second Amendment to the contract with Kaiser Permanente Medical Center, substantially in the form of exhibit 3, for Three years in an amount not to exceed $260,000 for City of Alameda Occupational Medical Services; and
Authorize the City Manager to execute a Second Amendment to the contract 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.
CITY MANAGER RECOMMENDATION
The City Manager recommends authorization of the City Manager to execute a second amendment to the contract with Kaiser Permanente Medical Center for three year in an amount not to exceed $260,000 for City Alameda Occupational Medical Services.
Respectfully submitted,
Nancy Bronstein, Human Resources Director
By,
Chris Low, Senior Human Resources Analyst
Financial Impact section reviewed,
Annie To, Finance Director
Exhibits:
1. Contract with Kaiser Permanente Medical Center
2. First Amendment with Kaiser Permanente Medical Center
3. Second Amendment with Kaiser Permanente Medical Center
4. Contract with Preferred Alliance
5. First Amendment with Preferred Alliance
6. Second Amendment with Preferred Alliance
cc: Eric Levitt, City Manager.