Public Employee Press

OTB deal protects members

As NYC betting agency reorganizes, tentative pact would raise wages and reduce staff through retirement incentives and a voluntary severance package.

By DIANE S. WILLIAMS

District Council 37 and Off-Track Betting Employees Local 2021 reached a tentative agreement with management Dec. 3 to protect members in the OTB Corporation’s plan to restructure under Chapter 9 of the federal bankruptcy law. The pact would include wage increases and offer employees voluntary separation through retirement and severance incentives.

Local 2021 President Lenny Allen and OTB Chairman Meyer “Sandy” Frucher worked out the handshake deal after 10 weeks of intense negotiations. Local 2021 members are scheduled to vote on the pact at 8 p.m. Jan. 6 in a meeting at DC 37 where union leaders will present details of the settlement and lead a question-and-answer session.

“This agreement, once ratified, would protect the jobs, benefits and pensions of OTB civil servants and retirees in Local 2021 and avoid mass layoffs,” said Allen. The agreement is contingent on the judge’s approval of the OTB restructuring plan, which requires OTB to raise $250 million through bond sales, and will require legislation from Albany to take effect.

In Sept., Gov. Paterson issued an executive order that let OTB file for restructuring under Chapter 9 law. If the judge approves, the restructuring would create a new business model to turn around the beleaguered corporation and make it profitable, with the corporation positioned for future growth by raising the $250 million to fund benefits and negotiated wage hikes and modernize flagship branches with new technology.

Legislation needed

The plan also asks for changes in the state racing laws that govern payments to the racing industry.

While day-to-day operations at OTB would continue uninterrupted, OTB’s plan would cut its payroll through voluntary retirement and severance packages for Local 2021 members. Severance is a likely option for employees with low seniority. The plan includes workforce reductions in all OTB unions and management. A recall list for DC 37 members would follow the general guidelines of the Citywide Contract. “Our contract is intact. We maintained all the pension, health care and wage provisions of our citywide and economic agreements,” said Allen.

DC 37 Executive Director Lillian Roberts and Allen led a negotiating team that included Research and Negotiations Director Dennis Sullivan and Associate Director Evelyn Seinfeld, General Counsel Mary O’Connell, Political Director Wanda Williams, White Collar Division Director Mike Riggio, Sr. Assistant General Counsel Steve Sykes, Local 2021 Vice President Paulette Sher and Sr. Analyst David Moog.

“Implementing the OTB plan will take place gradually over the coming months and could not happen without the interest and input of Gov. Paterson, Assembly Speaker Sheldon Silver and other state lawmakers,” said Roberts.

Part of the deal involves creating several new, broadbanded titles that would protect the wage scales of staff in betting titles, said Sullivan. Slated for broadbanding as Wagering Representatives are Restaurant Hotel Betting Clerk, Betting Clerk and Telephone Agent. OTB clerical titles will be broadbanded to Clerical Associates Levels 1 through 4. No DC 37 member will lose salary in the broadbanding.

Although it has generated hundreds of millions of dollars to sustain vital public services, NYC OTB currently operates at a $220 million deficit, due in part to a distribution formula that was mandated decades ago. “The losses were caused by structural problems that had no easy cure,” said Sullivan, “but unfortunately the impact will hurt the workforce as OTB cuts its staff. Under the circumstances we negotiated successfully to protect our members.”

OTB’s fiscal hemorrhaging prompted former Mayor Rudolph Giuliani to try to privatize the operation, and in 2008 Mayor Bloomberg threatened to shutter OTB. DC 37 and Local 2021 fought back with public pressure and by lobbying City Council members and Albany lawmakers.

74 percent to racing interests

In June 2008, Roberts convinced Gov. David Paterson and the Legislature to have the state take over NYC OTB and save 1,500 members’ jobs. But the Legislature stopped short of recalculating the distribution formula that gives 74 percent of OTB’s $125 million in annual profits to various racing interests, although NYC OTB handles half the bets in the state. And the current recession has cut NYC OTB’s betting handle to an estimated $850 million in 2009 from $1.3 billion in 2006.

“We’ve reached the most critical point in a very real and serious crisis,” Allen said. “We are facing a last-chance option of fewer employees versus no employees. For their own best interests, our members need to ratify this agreement on January 6.” Allen and Frucher expect the agreement to foster growth in OTB’s handle and workforce in future years.