Hotels want out of health plan

Friday, June 7, 2002 | 11:03 a.m.

Downtown Las Vegas hotels, saying they're strapped for cash, are proposing to pullout of the Culinary Union's health plan and switch employees to company medical insurance to save millions of dollars.

Seven of the downtown properties -- Binion's Horseshoe, Four Queens, Fitzgeralds, Union Plaza, Las Vegas Club, El Cortez and the Western -- and the Castaways on Boulder Highway planned to make that offer today during a presentation to union members showing they can't afford the rich five-year Strip deal.

Attorney Sal Gugino, who represents the Castaways, said this morning that turning to company insurance is a strong option for the hotels.

"The union's health and welfare plan is so expensive that we have to look at alternatives," Gugino said. "The increase in contributions over the five-year period are so high that they would completely eliminate the profits of most of the casinos in the downtown area."

Gregory Kamer, who represents the seven downtown hotels, declined to comment on the proposal to switch plans.

But he said: "It's my true belief that the employees will see that we are not in a position to grant increases at this time.

"If you look at the proposal and the dollar cost, my clients would be writing checks for money they don't have in the bank."

Casino sources said the companies together believe they could save millions over the length of a new five-year contract by moving employees to the company health plans and avoiding the expensive union-sought hikes in employer contributions. About 65 percent of the workers at the properties, those who don't belong to the union, already are on company plans.

The proposal is not expected to go over well with the Culinary Union, which has been insisting the downtown hotels provide union members with the same health benefits as the Strip megaresorts.

Union members at 18 megaresorts owned by the major Strip operators Thursday ratified, by a vote of 2,003 to 35, new five-year deals giving them their largest ever increase in wages and benefits, during a vote at Cashman Center.

Those agreements, involving some 36,000 union members, provide for a nearly $3.24 hourly increase in wages and benefits for each employee over five years. A major portion of the new money will be poured into the union's struggling $300 million health and welfare fund.

"This is just affirmation of the fact that workers see this as the best contract in the history of the union," Glen Arnodo, the union's political director, said after the overwhelming vote.

The downtown hotels, however, were prepared today to show the deal would cost them millions they don't have.

An analysis of the four downtown casinos owned by Jackie Gaughan -- Union Plaza, Las Vegas Club, El Cortez and Western -- shows the new contract would add more than $30 million for 1,509 employees to his payroll over five years.

Binion's Horseshoe would have to shell out another $16.7 million for its 828 employees, the Four Queens an extra $8.7 million for 430 union members and Fitzgerald's $8.2 million for 407 workers. The new deal would cost the Castaway's an extra $8.9 million for 441 union employees.

Kamer said there's an "enormous difference" in operations between downtown and the Strip.

For every dollar spent on the Strip, 27 cents goes to labor, Kamer said. But for every dollar spent downtown, 65 cents goes to labor.

"The costs of labor have a more serious impact on operations downtown than on the Strip," he said.

The plight of the downtown casinos, meanwhile, did not dampen the spirits of union members coming out of Thursday's Strip ratification vote.

Most said they were pleased with the new agreement.

"I think it's a good contract," said Philip Brenner, a Golden Nugget bartender. "I'm very happy with it."

Mike Johnson, a Las Vegas Hilton bartender, added: "I've been in the union 22 years, and I've never gotten a better contract than this."

Mirage cook Ray Novak said he was happy the contract will allow union members to continue to receive free medical coverage.

"We got our health benefits, and that's what we wanted," he said.

Bellagio housekeeper Betty Ramsey said the contract will give her a much-needed lighter workload.

"This is the best contract we've ever had," she said.

All of the workers interviewed said they intended to stand behind the downtown workers if they're forced to strike July 1.

"I feel for them," Novak said. "I hope they don't have to go out on strike, but I'll be supporting them. If they need help on the picket line, I'll go down there and walk too."

Johnson said: "We've all got to stick together. We're brothers and sisters. We've got to fight that one fight."

Ramsey said she also plans to back the downtown workers.

"We went into this saying we weren't going to be satisfied until everybody had a contract," she said.