Life Time Wins $1.73M Mpls. Contract Despite Concerns

The Minneapolis City Council voted 9 to 4 to award a $1.73 million contract to Life Time Fitness despite the fact that the Chanhassen-based company doesn't meet a city requirement to offer domestic partner benefits to its employees.

The Minneapolis City Council on Friday voted to extend a $460,400-per-year contract with Life Time Fitness even though the company doesn't offer its employees domestic partner benefits.

A current city ordinance requires vendors that have $100,000-plus contracts to offer their employees benefits for domestic partners that are equal to the ones they offer to married couples.

Chanhassen-based Life Time doesn't offer such benefits, and that fact prompted city officials to carefully consider whether to grant an exemption. After the city's budget committee approved an exemption on March 29, the issue went before the City Council on April 1 for final approval. The council voted 9 to 4 in favor of the exemption.

Councilman Don Samuels, who voted in favor of the contract, said that his vote reflected the urgency of the situation-the previous contract expired March 31-and the fact that Life Time was the only fitness provider, among those that responded to a city request for proposal, that met all other city requirements.

“This was basically the only option unless we wanted to get into trouble,” Samuels told Twin Cities Business on Monday morning.

Since 2006, the city has paid Life Time to provide memberships to its police officers and firefighters in order to encourage fitness-and Life Time's predecessor provided them before that. The parties renewed the contract in 2007 and the domestic partner benefits issue didn't surface at that time, which city officials can't explain.

The just-approved contract began April 1 and is set to run through December 31, 2014-giving it a total value of about $1.73 million.

As the city mulled the contract extension, Life Time spokesman Jason Thunstrom said that the company had no plans to immediately change its benefit offerings to meet city requirements, adding that “our human resources benefits will not be dictated by a vendor agreement with a third party.”

He said that employees hadn't expressed interest in such benefits through an annual survey, and the cost of extending them would be high. Thunstrom added that 60 percent of Fortune 1,000 companies don't offer domestic partner benefits to employees-and neither does the City of Minneapolis.

A 1995 Minnesota Court of Appeals ruling struck down the city's attempt to offer such benefits, but Samuels agrees that the city should uphold the benefits policy with its own employees and wants the city to work with state legislators to gain the necessary approval to do so. He said that the item is on the city's current legislative agenda.

Life Time spokeswoman Karen Jayne Leinberger said the company was pleased with Friday's vote. “We've long had the support of most of the City Council, including the mayor as well as the fire [and] the police,” she told Twin Cities Business on Monday morning. “They want to come to Life Time. It is the club they are choosing to go with, whether or not the domestic partner benefits are there.”

Prior to the City Council vote, the city's police and fire officials both recommended an exemption for Life Time, contending that it has the best facilities and amenities.