NYRA Defends Raises; Others Question Timing

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The New York Racing Association board of directors the week of Dec. 6 awarded raises to several hundred non-union employees—a day after threatening bankruptcy if a controversial bill involving New York City Off-Track Betting Corp. was approved by state legislators.

A top state lawmaker called the move “imprudent” and bad timing given the financial crisis the industry might experience with the NYCOTB closure. But NYRA president Charles Hayward said the raises were long overdue; the workers haven’t see a pay hike since January 2008.

“The reality is there are a lot fewer people doing a lot more work,” Hayward said in a Dec. 11 interview.

The board Dec. 8 voted to give non-union administrative employees an average raise of 3%. In addition, the top 10 executives of the racing entity were awarded average races of 5.5%; eight were merit-based, Hayward said, and two were based on promotions.

The raises will cost NYRA about $600,000 more in payroll expenses next year.

NYRA opposed a counter-measure to a NYCOTB reorganization bill that would have provided more revenues to other OTB corporations in the state. NYRA, which backed the NYCOTB reorganization bill, said the alternative plan pushed by Senate Republicans would have cost NYRA $20 million in new revenue payments, forcing it back into bankruptcy.

Neither bill was approved, and NYCOTB shut down early Dec. 8.

With NYCOTB’s shutdown, NYRA and others in the industry have been warning the past several days of revenue cuts—some dramatic, such as to the Thoroughbred breeding program—because of bets no longer being made at the OTB parlors and through advance deposit wagering accounts. NYCOTB accounted for 40% of the state’s horse racing wagers.

“In light of their statement because of the demise of New York City OTB claiming that they’re going to experience a cash shortage, I think it’s imprudent on their part to authorize increases for individuals at a time when fiscal restraint should be the norm now,” said Assemblyman Gary Pretlow, chairman of the Assembly racing committee.

Pretlow noted the raise was given the day after 1,000 people lost their jobs at NYCOTB.

“I think it is more or less a stick in the eye to people at DC 37,” Pretlow said of the union representing NYCOTB workers, “who are losing their jobs, that NYRA, whose payroll has been known to be bloated already, is now looking to increase their payroll expenditures.”

Hayward said the timing was wrong for raises in the past couple years. In 2009, NYRA was just coming out of bankruptcy with a new franchise to run its tracks. In early 2010, NYRA had a cash crunch and was threatening to close without state intervention. But Hayward said the $600,000 for the new raises has been budgeted for and is affordable.

The NYRA chief said employees have seen their health insurance premiums jump the past couple years at a time when they did not get annual raises. He also said NYRA has seen its full-time staff, union and non-union, drop from 1,189 people in 2009 to a projected 927 workers in 2011—a level Hayward said has already been “virtually” reached.

“We’re asking a smaller group of people to do more,” he said.

The unionized workforce has dropped from 759 people to 600 workers, while the administrative side—from customer service agents to senior managers—is down to 327 people from 430 workers in 2009.

The raises affect only non-union employees. Hayward said NYRA’s workers covered by 21 different unions have, in general, gotten “small increases” over the past couple years when non-union employees went without raises. In the case of the administrative employees, the board approved creation of a “merit pool” so that some workers could get more or less than the average 3% raise.

The raise was not unanimously approved. Bennett Liebman, founder of a racing think tank at Albany Law School and a NYRA board member, voted against the increase but declined comment.