City Council
Report
City Council Meeting: October 14, 2025
Agenda Item: 4.J
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To: Mayor and City Council
From: Dana Brown, Human Resources Director, Human Resources Department Subject: Approval of Professional Services Agreement with P&A Administrative Services, Inc. for Administration Services to Support City Employee and Retiree Benefit Plans
Recommended Action
Staff recommends that the City Council
1. Adopt a finding of no significant effect pursuant to Section 15061(b)(3) of the California Environmental Quality Act (CEQA) Guidelines;
2. Award RFP to P&A Administrative Services, Inc. for the administration of the City’s Flexible Spending Account, Dependent Care Account, Section 125 Cafeteria Plan, COBRA, and Retiree Billing for the Human Resources Department;
3. Authorize the City Manager to negotiate and execute a professional services agreement with P&A Administrative Services, Inc. in the amount not to exceed $230,000 (including a 15% contingency) for a total amount of $230,000 over a five-year period, with two one-year renewal options with future year funding contingent on Council budget approval.
Summary
The City of Santa Monica seeks to engage P&A Administrative Services, Inc. to provide third-party administrative services supporting employee and retiree benefit programs.
P&A Administrative Services, Inc. offers comprehensive management of Flexible Spending Accounts (FSAs), COBRA continuation coverage, and retiree direct billing services. Their platform streamlines benefit administration through secure, user-friendly portals and mobile access, ensuring timely communication, accurate billing, and regulatory compliance. In addition, P&A Administrative Services, Inc. maintains the Section 125 plan document and completes annual regulatory testing for the dependent care flexible spending accounts ensuring adherence to Section 125 rules. 2 of 5
P&A Administrative Services, Inc.’s COBRA administration includes fulfillment of all federally mandated notices, premium collection, and termination tracking, helping the City maintain full compliance with COBRA regulations. Their retiree billing services accommodate complex plan structures and automate invoicing and payment processing, reducing administrative burden and improving transparency.
Discussion
The City currently offers Flexible Spending Account, Dependent Care Account, Section 125 Cafeteria Plan, COBRA services, and Retiree Billing services as part of City’s employee benefit plans. P&A Administrative Services, Inc. is our current provider, and the current contract terminates December 31, 2025. Alliant, a fee-based insurance brokerage, acts as the City’s agent in assisting with the administration of the City’s benefit plans and negotiating associated rates for the City. Alliant is also responsible for conducting an annual analysis of the premium costs and going out to bid when appropriate. The City asked Alliant to administer a Request for Proposal (RFP) process in August 2025 to be responsive to City procurement requirements. Alliant prepared the bid specifications and conducted the procurement on the City’s behalf.
Provider Selection
Bidder Recommendation
Best Qualified
Person/Firm
P&A Administrative Services, Inc.
Evaluation Criteria
(include all that apply)
Competence/skill, capacity/ability to perform services
promptly, sufficiency of financial/other resources, and ability to provide future services as needed and price.
Municipal Code SMMC 2.24.190
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RFPs Received
Alight IGOE Navia WEX
P&A Admin.
Services, Inc.
RFP Data
Posted On Posted On
Advertised In
(City Charter & SMMC)
Vendors
Downloaded
Date Publicly
Opened
06/24/2025
Broker
outreach
Benefit broker-initiated
solicitation to established
vendors.
5 06/24/2025
Justification to Award
Staff then interviewed 5 shortlisted firms. Based on this criteria and criteria in SMMC
2.24.190, staff recommends P&A Admin. Services, Inc. as the best qualified firm to provide administration of the City’s Flexible Spending Account, Dependent Care Account, Section 125 Cafeteria Plan, COBRA, and Retiree Billing based on overall cost and their ability to provide the full scope of requested services. P&A Administrative Services, Inc.’s quoted rate is projected to result in an overall savings to the City of
7.8% annually over a five-year period, and the rate is guaranteed for the first five years.
Additionally, P&A Administrative Services, Inc., currently provides such services without issue for the City.
Environmental Review
The agreement for ongoing benefit services is exempt pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines, which states that CEQA does not apply, where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. The agreement would provide administrative services to the City and would not result in physical effects. Therefore, it can be seen with certainty that the 4 of 5
contract would not result in adverse physical impacts on the environment, and as such, is exempt from CEQA.
Past Council Actions
Meeting Date Description
12/18/2018
(attachment
A)
P&A Administrative Services, Inc. – New Vendor for Flexible Spending Account Administration Staff Report
Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the General Fund to award a contract with P&A Administrative Services, Inc. to provide third-party administrative services supporting the City’s employee and retiree benefit programs.
Contract Request
FY 2025-26
Amount
Future Years’
Amount Department Account #
Total
Contract
Amount
$46,000 $184,000 01130001.534590 $230,000
Future year funding is contingent on Council budget approval.
Prepared By: Jennifer Garcia, Benefits Administrator
Approved Forwarded to Council
Attachments:
A. Oaks Initiative 2024-25- Expires 12-8-25
B. CSM P&A FY25-26 Living Wage Certification_Fillable_$21.01 C. 2018-12-18 City Council - Public Minutes-1184
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D. PA Levine Act 2025