Investigative Post: OTB's Board Members' Gold-plated Perks

by / Dec. 7, 2018 11am EST

The workload is modest, as is the pay.

But, oh, the benefits.

The public service corporation that manages off-track betting operations in western and central New York provides free health insurance to its board members in exchange for showing up for meetings two days a month.

And the perks aren’t limited to health coverage.

Board members are eligible for dental and vision insurance, too.

The coverage was described by one health insurance expert as “literally the richest plan available.”

Indeed, board members have access to plans that feature a $5 copay for generic prescription drugs, a $15 copay for routine doctor visits and no copay for routine dental work.

And if board members stick around long enough, they continue to enjoy this coverage right into retirement.

All this, despite a ruling a decade ago by the state attorney general that concluded OTB operations can’t provide health insurance for their board members.

Henry Wojtaszek, president and chief executive officer of the Western Regional OTB, defends the health insurance board members enjoy on top of stipends that top out at $4,000 a year for attending meetings two days a month.

“The benefits they receive are hard-earned and well-deserved,” he said.

Wojtaszek said he wasn’t aware of the attorney general’s ruling until Investigative Post brought it to his attention and maintains it does not apply to the Western OTB.

“We’re going to ask for our own opinion from the attorney general that would be binding,” he said.

Thirteen of OTB’s 17 active board members and three retired directors were enrolled in the the organization’s health insurance program last year. Fourteen received dental and vision coverage. The collective value of this coverage was $229,800.

The value of that insurance in 2017 ranged from $30,969 for Michelle Parner-Garner, who represents Buffalo, to $6,264 for Allan Hendrickson of Chautauqua County.

“Equity dictates that people should be paid and their benefits should be appropriate to the kind of work they do,” Wojtaszek said. “Our board is a very excellent board … and you can see the fruits of their labor in the success we’ve had here.”

Sprawling operation

New York authorized the creation of off-track betting organizations in the early 1970s to counter illegal bookmakers and provide revenue for local and state governments. Six OTBs were established around the state as public benefit corporations, subject to many of the rules and regulations that govern state entities. The OTB in New York City went bankrupt in 2010.

The Western Regional OTB began operations in 1974. It is owned by 15 counties in western and central New York, plus the cities of Buffalo and Rochester. Its initial operations were limited to betting parlors, 15 of which are currently in operation.

The OTB added EZBets betting kiosks in 2004 and operates them in 30 bars and restaurants. The Western OTB took over Batavia Downs in 2000 and opened a casino at the harness racing track in 2005 that currently includes 860 video slot games, an 84 room hotel and four restaurants.

The casino has proved to be the Western OTB’s financial salvation. The betting parlors last year lost about $2 million, the race track about $1 million. The casino, on the other hand, cleared about $6 million.

The OTB is required to dispense its profits to its 17 government owners, divided up based on population. The total last year was $2.9 million. Erie County received the biggest cut, $709,280, Buffalo’s share was about $281,749, Niagara County’s, $227,016.

Insurance a rare perk

It’s rare for authorities to provide board members with medical coverage. For example, the New York Power Authority and Metropolitan Transportation Authority, which runs the bus and subway system in New York City, do not provide coverage to board members.

In fact, not one of the 473 authorities and public benefit corporations that filed annual disclosures in 2017 with the state Authorities Budget Office, which oversees public authorities, reported health, dental or vision benefits for board members.

Three of four other OTBs that operate around the state also don’t provide board members with health insurance coverage. And the one that does – which covers the Albany region – provides health insurance to only two of its 17 members. Eight receive dental coverage; six, vision.

Albany OTB officials did not return phone calls seeking their comment.

The OTB based in Suffolk County asked the attorney general in 2008 whether it could provide health insurance to its board members. The answer was an emphatic “no.”

“The OTB is not authorized to provide health insurance benefits to members of its board of directors,” the attorney general stated in his ruling.

Wojtaszek, who served as OTB’s legal counsel for six years before taking the top job in June 2016, initially told Investigative Post he wasn’t aware of the attorney general’s ruling. He now maintains the ruling applies only to the OTB in Suffolk County and that the Western OTB is a much larger operation that should be treated differently.

“I’ve been assured by legal experts it does not apply to us,” he said.

Nevertheless, he said the Western OTB will ask the attorney general for a ruling specific to its operation.

The attorney general’s opinion is based on the law that created all OTBs, as well as general municipal and civil service statutes. The laws do not differentiate regional OTBs based on their size or scope of operation.

Employees pay towards their coverage

Wojtaszek defended the terms of the health, dental and vision benefits, noting that board members have access to the same plan options as OTB employees.

There’s a big difference, however.

Coverage for board members is free, while employees have to cover a portion of their premiums.

Full-timers hired before July 2012 pay $400 annually for single coverage, $1,000 for family. Those hired after July 2012 also pay $400 annually for single coverage. Those requiring a family policy also pay $400 and must cover the difference in premiums between single and family coverage.

Wojtaszek noted that his OTB’s coverage is self-insured, meaning expenses incurred by OTB are based on actual payments for services, as opposed to premiums. Thus, it is impossible to determine precisely how much the coverage for board members is costing OTB.

Investigative Post calculated that if the active and retired board members incur expenses at the average of plan participants as a whole, their costs would total an estimated $238,000 annually.

That’s money that otherwise might be available to disburse to the 17 counties and cities.

Jim Heaney is founder and editor of Investigative Post, a nonprofit investigative journalism center focused on issues of importance to Wesrtern New York.