City Council
Report
City Council Meeting: December 16, 2025
Agenda Item: 4.F
1 of 4
To: Mayor and City Council
From: Dana Brown, Human Resources Director, Human Resources Department Subject: Approval of Second Modification of Agreement with USMD Direct Inc. for OnSite Occupational Medical Testing Services Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines; and
2. Authorize the City Manager to negotiate and execute a second modification to agreement #11001 in the amount of $76,000 with USMD Direct Inc. for on-site Occupational Medical Testing Services for the Human Resources Department.
This will result in a 6-year, and 1-month amended agreement with a new total amount not to exceed $476,000, with future year funding contingent on Council budget approval.
Summary
USMD Direct Inc. provides on-site Occupational Medical Testing Program (OMTP) services for current employees and new hires. Staff recommends extending the contract for an additional six months through June 30, 2026, to allow for time to complete a Request for Proposals (RFP) process and award contracts for future OMTP services.
Background
USMD Direct Inc. provides on-site Occupational Medical Testing Program (OMTP) services to protect employees from on-the-job health and safety risks through physicals, testing, and preventative health measures.
The Finance and Human Resources Departments manage the On-Site Occupational Medical Testing Services with assistance from operating departments and rely on 2 of 4
private medical providers to carry out the testing required by the program. To comply with state and federal regulations, the City of Santa Monica (City) is required to provide employees in certain classifications with the following services: commercial driver medical examinations, tuberculosis screenings, and various vaccinations. In addition, as part of the OMTP program, DOT new hires receive commercial driver medical certification testing on-site at the Department of Transportation (DOT) Yard, providing a more efficient hiring process and increasing the capacity to hire more Motor Coach Operators.
On October 17, 2019, staff issued a Request for Proposal (RFP 244) for an operator of mobile medical unit(s) to provide on-site occupational medical testing services to City Employees. RFP was awarded to the only bidder, USMD Direct Inc. On February 25, 2020, the Santa Monica City Council authorized the City Manager to negotiate a contract with USMD Direct Inc. in an amount not to exceed $400,000. Based on the financial climate in May 2020, staff only chose to execute an agreement that did not exceed $300,000.
On March 14, 2025, the City of Santa Monica and USMD Direct Inc. modified the original agreement extending the term of the original agreement to December 31, 2025, and increasing funding to $400,000 as originally authorized by City Council.
Discussion
The Human Resources Department recommends a modification to the agreement #11001 in the total amount not to exceed $476,000, which provides for an additional $76,000 in funds to be used through June 30, 2026. The estimated additional expenditure is based on past monthly cost experience with the highest monthly spend at $11,502 and adding a 10% contingency. The proposed amendment will allow for additional time to complete a RFP process and award associated contracts.
Environmental Review
The agreement for ongoing classification and compensation 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 3 of 4
may have a significant effect on the environment. The agreement would provide medical exams and would not result in physical effects. Therefore, it can be seen with certainty that the contract would not result in adverse physical impacts on the environment, and as such, is exempt from CEQA.
Past Council Actions
Meeting Date Description
02/25/2020
(attachment A)
Staff Report for Award Request for Proposal and enter into Agreement with USMD Direct Inc. for On-Site Occupational Medical Testing Services
05/21/2020
(attachment B)
Professional Services Agreement No. 11001
03/14/2025
(attachment C)
First Modification of Agreement No. 11001
Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the Self-Insurance, Workers’ Compensation Fund to increase the amount of the contract with USMD Direct Inc. to provide on-site Occupational Medical Testing Program services. Although the SelfInsurance, Workers’ Compensation Fund incurs the initial charges, it is subsequently reimbursed by the other funds through their annual insurance premiums.
Contract/Agreement/Purchase Order Modification Request
Agreement
#
Current
Authorized
Amount
FY 2025-26
Modified
Request
Amount
Dept Account # Total Revised
Contract
Amount
11001 $400,000 $76,000 74800002.552010 $476,000
Future year funding is contingent on Council budget approval. 4 of 4
Prepared By: Jennifer Garcia, Benefits Administrator
Approved Forwarded to Council
Attachments:
A. A - USMD 2020 Staff Report
B. B - USMD 2020 PSA signed
C. C - USMD 2025 1st Mod signed
D. OAKS INITIATIVE FY 2025-26
E. Levine Act Disclosure Form 11252025