Buyouts and Layoffs Loom As OTB Readies Staff Cuts

BARBARA REDA: Painful, unavoidable cuts coming. The New York City Off-Track Betting Corporation will be forced to make serious cuts in staff as it scales down operations as part of a bankruptcy reorganization, the president of the union representing its managers said Nov. 13. She said the cuts are scheduled to occur by next March, although they might be delayed a bit.

Barbara Reda, who heads Teamsters Local 858, said she could not address a story in the New York Post stating that up to half of the 1,100 OTB employees would have to retire or be laid off while up to two-thirds of the 68 branch offices were shuttered.

Retirement Incentives, Severance

But she said the cuts would be painful, remarking, “In these times, it’s just heartbreaking that any of them will lose their job.” Her local, which also represents managers at Nassau County OTB, has 167 city members.

LEONARD ALLEN: Members would be hit hardest. Early-retirement incentives and severance payments are being offered to help cushion the blow, she said. Retirement eligible employees will receive one month of additional pension credit for every year of service, up to a maximum of three years’ extra credit. Those who do not have enough service to qualify for retirement will receive severance payments of $15,000 if they are full-time workers and $10,000 if they are part-timers, she said.

An OTB spokeswoman declined to discuss either the Post story or other aspects of the reorganization, instead issuing a statement about the restruc- turing that concluded, “When the plan is completed, it will be presented to the board for approval, and once approved, we will share it with the public.”

Leonard Allen, who as president of Local 2021 of District Council 37 represents the bulk of the employees, did not return calls seeking comment.

Leaking Red Ink

Governor Paterson had the state take control of OTB 17 months ago, after Mayor Bloomberg was poised to shutter the 39-year-old horse-betting operation because it was on the verge of needing an infusion of city money to remain solvent.

It had been losing money since early in the decade as the result of a change in the revenue-sharing formula. The shift forced OTB to give a greater share of its handle to state harness-racing tracks in return for being allowed to take bets on night thoroughbred racing, which has failed to produce the revenue anticipated by OTB President Raymond Casey.

That problem has been compounded by the faltering national economy that has been reflected in reduced betting on horses throughout the country, with OTB hit harder than most tracks. The Post article quoted sources as saying that the state had filed a tax lien against OTB to freeze $17 million in funds that it owes two harness tracks, Yonkers and Monticello raceways, and it is supposed to owe all its creditors a total of $75 million.

Weighing Consolidation

In early September, Governor Paterson announced the plan to seek a bankruptcy reorganization aimed at streamlining operations so that New York City OTB could once again become profitable. There have been discussions about consolidating it and some or all of the other six OTB corporations statewide under the control of a single operator, with the New York Racing Association—which operates the Aqueduct, Belmont and Saratoga thoroughbred tracks—mentioned as one possibility.

Ms. Reda said that because her members generally have more seniority than the Betting Clerks represented by Local 2021, a greater percentage of them will be eligible to retire and less likely to face layoff. She declined, however, to state how many positions she expects will be lost from her bargaining unit.

She also said there was no court action that could be feasibly taken to head off the job losses, given the greater damage that would be done if OTB was unable to reorganize in a slimmed-down form.

“We don’t have options,” Ms. Reda said. “We just have to do the best that they can.” Referring to OTB’s management, she added, “They have been, I don’t want to say labor-friendly, but they have been decent to work with and reasonable” on the cutback plan.