Nassau Regional Off-Track Betting Corp will consider layoffs for the first time in recent memory after fewer employees than expected accepted a voluntary retirement incentive to trim expenses amid declining racing revenue, officials said.
Nassau OTB President Joseph Cairo said 12 full-time employees and 8 part-timers took the incentive, which will pay them 1 percent of their base salary for every year of service with the agency or every year in the State Retirement System — whichever figure is higher.
OTB would save $1,035,000 in salaries from the retirements but after paying $234,000 in incentive payments and outstanding personal and vacation days, Cairo expects about $800,000 in total agency savings for the remainder of the year.
Cairo had hoped to trim OTB’s 193-person workforce by about 50 employees to save an estimated $2 million.
Faced with steadily declining revenue and rising agency debt, Cairo said OTB will decide within the month whether to implement layoffs.
“We will meet with the union in the next few weeks to come up with a plan that advances our goals to help cut our losses and put us on a path to a break even point,” Cairo said. “And yes, layoffs are possible.”
Suffolk Legis. Kevin McCaffrey (R-Lindenhurst), the president of Teamsters Local 707, which represents Nassau OTB employees, contends there are provisions in the labor contract that would make it difficult to layoff employees.
“The goal is not to lay anyone off and to find efficiencies elsewhere,” said McCaffrey, who would expect cuts to also come from nonunion ordinance employees. “We would fight any layoffs but look forward to working with OTB leadership to avoid that.”
OTB is considering cutting back on the hours at its less trafficked branch locations, Cairo said. In recent months, OTB cut costs by selling its Farmingdale branch building to a church for $3.2 million and refinancing the Green Acres branch building in Valley Stream.
OTB offered a similar incentive in March 2015, expecting 40 employees to take the deal but only a dozen staffers departed, saving $192,000 in 2015 and $800,000 in 2016.
The incentive comes as OTB works to improve its lagging finances after securing approval from the state last year for a deal transferring its authority to operate 1,000 video slot machines to Genting New York LLC, which operates Resorts World Casino at Aqueduct.
The deal stipulated that Genting pay OTB $9 million last year; $9 million again in 2017/2018 and $25 million every year thereafter.
OTB, which is prohibited by state law from keeping any profits, gave the county $3 million in late-December, Cairo said. It will give Nassau $3 million in 2017/2018 and $20 million every year thereafter.
The plan, Cairo said, should allow OTB to break even in seven years. OTB has $7.5 million in total debt, officials said.