DATE: October 7, 2026
TO: Honorable Mayor and City Councilmembers
FROM: Human Resources Department
TITLE: APPROVAL OF AGREEMENT WITH SPRING HEALTH FOR THE CITY OF OCEANSIDE’S EMPLOYEE ASSISTANCE PROGRAM (EAP)
RECOMMENDATION
title
Staff recommends that the City Council approve a three-year Professional Services Agreement (PSA) with Spring Health for a not to exceed amount of $180,000 for the City’s Employee Assistance Program (EAP), with two additional one-year renewal options that may be administratively approved, subject to annual funding availability. The annual cost for the fourth and fifth years may increase by up to five percent (5%) annually, resulting in a maximum potential cost of $63,000 for Year 4 and $66,150 for Year 5, for a total potential five-year amount not to exceed contract amount of $309,150. Staff further recommends that the City Council authorize the City Manager, or designee, to execute the agreement upon receipt of all required supporting documents.
body
BACKGROUND AND ANALYSIS
The City currently provides Employee Assistance Program (EAP) services to full-time employees and their eligible dependents through Anthem EAP. The EAP is an important component of the City’s employee benefits program, providing confidential counseling, support, and resources to assist employees and their families with personal, family, emotional, and other life challenges. The City has experienced high utilization of its EAP services, demonstrating a significant need for these resources. In 2025, the City conducted a competitive Request for Proposals (RFP) process to evaluate EAP service providers and identify opportunities to enhance the program. Due to the timing of the RFP process in relation to the City’s budget cycle, implementation of a new EAP provider was deferred and the City continued its existing arrangement with Anthem for the 2026 plan year. With an increase to the EAP budget approved as part of the Fiscal Year 2026/27 budget, the City is now positioned to implement the results of that evaluation. For the 2027 plan year, staff is proposing to transition EAP services from Anthem to Spring Health to enhance accessibility and increase the level and specialization of services available to employees and their families.
Spring Health offers an enhanced EAP model that would increase the number of counseling sessions available to employees and their eligible dependents each year. Spring Health offers same day appointments, providing employees and eligible dependents with more timely access to support when it is needed; provides access to specialized care for a broad range of mental health needs, including trauma, substance use disorders, eating disorders, severe mood and anxiety disorders, and neurodivergent conditions; and, provides access to providers with training and experience addressing the unique mental health needs and occupational stressors associated with first responder work. This specialized support is an important enhancement for the City’s public safety workforce and would provide care designed to address issues that may be particularly relevant to first responders.
Staff recommends entering into a five-year Professional Services Agreement (PSA) with Spring Health for EAP services commencing January 1, 2027. The agreement provides guaranteed rates for the three-year initial term at an annual cost of $60,000, followed by two optional one-year renewal terms, subject to the rate adjustments and other terms specified in the PSA. Although the agreement provides for a potential five-year term, the City may terminate the agreement after the initial 36-month period in accordance with the terms and conditions of the PSA. This structure provides the City with flexibility to continue the services through the renewal terms or select an alternate benefit provider, while securing guaranteed rates during the initial three-year term. Based on the City’s high utilization of EAP services and the enhanced counseling, specialized care, first responder resources, and improved access to care offered by Spring Health, staff recommends approval of the proposed PSA.
FISCAL IMPACT
The Fiscal Year 2026-2027 PSA cost of $60,000 will be charged to the Employee Assistance Program account 250253817.5483.0004, which has an approved FY 2026-2027 budget of $60,000. Therefore, sufficient funds are available and have been budgeted for the first year of the agreement. The PSA provides guaranteed rates of $60,000 annually for the initial three-year term. The two optional one-year renewal terms may include an annual rate increase of up to five percent (5%), resulting in a maximum potential cost of $63,000 for Year 4 and $66,150 for Year 5. The total potential five-year contract amount is $309,150. Funding for subsequent fiscal years will be subject to City Council approval through the annual budget process.
COMMISSION OR COMMITTEE REPORT
Does not apply
CITY ATTORNEY’S ANALYSIS
The referenced documents have been reviewed by the City Attorney and approved as to form.
end
Prepared by: Sarah Curtis, Senior HR Analyst
Reviewed by: Chelsea Phebus, Director of Human Resources and Risk Management
Submitted by: Jonathan Borrego, City Manager
ATTACHMENTS:
1. Agreement