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SR 10-10-2017 3G City Council Report City Council Meeting: October 10, 2017 Agenda Item: 3.G 1 of 5 To: Mayor and City Council From: Gigi Decavalles-Hughes, Director, Finance Department, Risk Management Donna Peter, Director, Human Resources Department Subject: Expansion of the Pre-Employment Physical Program to Include Functional Capacity Evaluation Testing Recommended Action Staff recommends that the City Council: 1. Award RFP #112 to Integrated Injury Management Services, Inc., a California- based company, for functional evaluation testing services for City employees; and 2. Authorize the City Manager to negotiate and execute an agreement with Integrated Injury Management Services, Inc. for five years in an amount not to exceed $350,000, with future year funding contingent on Council budget approval. Executive Summary The Finance and Human Resources Departments are proposing to expand the City’s Pre-Employment Physical Program to include a “functional” evaluation testing component. Functional evaluation testing allows the City to assess a job candidate’s ability to safely perform the actual tasks of a given classification prior to being placed in the position (e.g., a Motor Coach Operator candidate is tested to determine whether he/she can board and secure a wheelchair passenger or manually deploy the handicap ramp on a Big Blue Bus; a Tree Trimmer candidate is tested to determine if he/she can safely complete such tasks as lifting up to 75 pounds, climbing a tree, or operating a chainsaw, etc.). This type of testing has been proven to lower employee injury rates and, over time, help control employers’ workers’ compensation costs. In order to pursue the expansion proposal, staff solicited RFPs from vendors who specialize in providing functional evaluation testing services. Based on this process, staff recommends that the City enter into an agreement with Integrated Injury Management, 2 of 5 Inc. in an amount not to exceed $350,000 over a five-year period. Funding for the agreement will be provided out of the Workers’ Compensation Self-Insurance Fund. Background As part of the City’s efforts to create a safe workplace, all job candidates offered positions that involve physical demands in excess of a typical sedentary office worker are required to undergo a pre-employment physical exam. This includes such job classifications as police officers, firefighters, street crew workers, solid waste equipment operators, and code enforcement officers. The physicals are conducted by the City’s contract occupational medical doctors and include a battery of job-specific medical exams (e.g., treadmill tests, eye exams, hearing exams, etc.) that allow the doctor to assess whether a candidate has any health conditions that could affect his/her ability to safely perform a job classification’s essential functions (i.e., key job tasks). This type of testing helps to ensure that employees hired into physically demanding jobs are medically fit to perform their assignments and, therefore, less likely to get injured. Staff is now proposing to add a functional evaluation testing component to the pre- employment physical process. Functional evaluation testing, considered an industry best practice, assesses whether a candidate possesses the requisite strength, stamina, and flexibility to safely perform the essential functions of a job. Details of the proposal follow. Discussion Functional evaluation testing occurs after the pre-employment medical exam and requires job candidates to undergo a series of tests designed and validated by a certified functional evaluation testing vendor that either simulate or replicate the key tasks an incumbent in the job is required to perform. This two-step testing process allows an employer to confirm that a candidate is both medically and physically capable of safely performing the essential functions of a given classification prior to job placement. Industry data from certified vendors in this field assert that functional evaluation testing significantly reduces the number and severity of employee injuries and, over time, can 3 of 5 lower participating employers’ workers’ compensation costs by as much as 50%. These findings were of great interest to staff in light of the City’s ongoing efforts to identify innovative methods for keeping its ever-rising workers’ compensation costs in check. Staff felt it prudent, however, to pursue a small-scale pilot program in the Transit Services Department to test and validate the industry data before recommending a formal program to Council. Pilot Program The pilot program was conducted between FY 2014-15 through FY 2016-17 using Big Blue Bus Motor Coach Operators (MCOs). Staff hired a certified vendor to design and validate a functional evaluation test for the MCO job classification that included actual job tasks (e.g., boarding and securing a wheelchair passenger, manually deploying a wheelchair ramp, completing a pre-trip inspection, etc.), and simulated exercises to confirm lifting and push/pull force capabilities. The vendor tested 286 candidates at its facility during the pilot period. The results of the pilot were very encouraging. During the three-year period, the annual injury rate for all MCOs hovered at 25 injuries per 100 employees. This compares to an injury rate of 9.9 per 100 employees for the MCOs who underwent functional evaluation testing. Further, average “total lost days” per injured MCO who underwent functional evaluation testing was 2.4 days; this compares to 76 days for all MCOs. It is still too early to precisely calculate the savings of the pilot program. However, if Big Blue Bus could sustain the results achieved during the pilot, it is safe to project the City could save millions of dollars in workers’ compensation expenses over the long-term. Implementation Based on industry data and pilot program results, the Finance (Risk Management Division) and Human Resources Departments concluded that functional evaluation testing could favorably impact the City’s injury rate and workers’ compensation costs and, therefore, is worthy of pursuing. As proposed, the City will contract with a certified vendor to design, validate, and administer functional evaluation tests. Staff from Risk 4 of 5 Management and Human Resources, in turn, will jointly oversee program implementation. Vendor Selection Results On April 3, 2017, the City published an RFP for pre-employment functional evaluation testing services. The RFP was posted on the City’s online bidding site and notices were advertised in the Santa Monica Daily Press in accordance with City Charter and Municipal Code provisions. 199 potential firms were notified of the RFP; 13 firms downloaded the document. The following four firms submitted a response: WorkSTEPS, Inc.; Impact Medical, Inc.; Unify Health Services, LLC; and Integrated Injury Management Services, Inc. All four RFP responses were evaluated by a panel of staff from the Departments of Finance, Human Resources, and Big Blue Bus using criteria from SMMC Section 2.24.073 including experience, results, value-added, and cost. The panel used the criteria to narrow the field to two firms who were invited to make presentations. The interviews confirmed that both firms were capable of competently fulfilling the RFP’s scope of work and offered competitive pricing. Integrated Injury Management, Inc.’s willingness and ability to conveniently provide the functional testing services on City premises (as opposed to a clinic in a nearby city). Therefore, staff recommends Integrated Injury Management, Inc. as the best-qualified firm to provide the functional testing services requested in the RFP. Financial Impacts and Budget Actions The agreement to be awarded to Integrated Injury Management Services, Inc. is for an amount not to exceed $350,000 over a five-year period. Funds are available in the FY 2017-18 budget in the amount of $70,000 in the Finance Department. Agreement expenses will be charged to the account 59235.555060. Future year funding is contingent on Council budget approval. 5 of 5 Prepared By: Deb Hossli, Risk Manager Approved Forwarded to Council Attachments: A. IIM Oaks Agreement REFERENCE:    AGREEMENT NO. 10561  (CCS)