By Ray Paulick
UPDATED 9 P.M.
(NOTE: Several hours after the following story was published, the Paulick Report received a press release from the group known as California Horsemen for Change in reaction to the email distributed by the California Thoroughbred Trainers to some of its members. Click here to read the press release from California Horsemen for Change.)
The civil war that broke out recently among California trainers has escalated as a result of the following email that warns horseman what could happen if California Thoroughbred Trainers is decertified. A group calling itself California Horsemen for Change is staging a palace revolt to either replace all nine members of the CTT's current board of directors through a special election or get enough signatures from trainers to have the CTT decertified.
Click here for a previous Paulick Report story providing background on the war between the California trainers and here for a press release from the California Horsemen for Change.
Following is the warning email distributed by the California Thoroughbred Trainers to its members:
An organization has been formed that is attempting to eliminate the CTT. That group plans to ask the CHRB to make it the representative of all the trainers. Be aware that:
YOUR SUPPORT OF A NEWLY FORMED TRAINER GROUP COULD HAVE SERIOUS NEGATIVE FINANCIAL AND POLITICAL IMPLICATIONS
WE URGE YOU NOT TO SUPPORT THE ELIMINATION OF THE CTT
WE URGE YOU NOT TO SIGN ANY PETITION TO DECERTIFY THE CTT
Joining that group or signing a petition to decertify the CTT could have the following consequences:
· IT COULD THREATEN THE CTT / CHSA WORKERS' COMPENSATION INSURANCE PROGRAM, RESULTING IN HUGE INCREASES IN YOUR PREMIUM
· IT COULD LEAD TO TERMINATION OF THE CURRENT INSURED PENSION PLAN AND REQUIRE THAT YOU BE LIABLE FOR BENEFITS DUE TO YOUR EMPLOYEES UNDER ANY NEW INSURED PLAN
· IT COULD KILL INDUSTRY EFFORTS TO PURCHASE SANTA ANITA AS A HORSEMEN'S NON-PROFIT
· IT COULD PUT AN END TO CURRENT DISCUSSIONS BETWEEN THE CTT AND THE TOC REGARDING UNIFICATION OF THE ORGANIZATIONS
· IT COULD LEAD TO A LOSS OF REPRESENTATION ON THE RACING MEDICATION & TESTING CONSORTIUM (RMTC)
If your desire is to change the management, directors, and direction of the CTT while bringing the industry new leadership, there is a much easier, faster, and sensible way to do so without creating these risks.
WHY COULD A DECERTIFICATION PETITION COST ME MONEY?
Simply put, AIG could refuse to continue with the current workers' compensation program. This program was built on personal relationships with AIG and trust in the CTT management of the program. The program could not be replaced. There are no other insurers out there that will provide such low-cost coverage. Your only option would be State Fund at three to four times what you are now paying. In the current environment, AIG is being very careful about the way they do business. In July of each year, they are owed $11 million in premiums from the organization. They have faith in the fact that the CTT will make sure they are paid and the program will be managed honestly and efficiently. If they see turmoil and a new group being responsible for the program, they could well decide not to offer coverage. That would cost individual trainers thousands or tens of thousands each month out of their respective pockets.
WHY COULD DECERTIFICATION LEAD TO ME BEING PERSONALLY LIABLE FOR THE PENSION BENEFITS OF MY EMPLOYEES?
When the CTT Backstretch Pension Plan was created, it was allowed to become part of a federal insurance plan that did not require that each employer be individually liable for the benefits due to his/her employees. The rules have since been interpreted to provide that a plan may not obtain federal insurance unless each individual employer is liable for his/her employees' benefits. Currently, the CTT Plan remains federally insured even though federal administrators have again raised the question of its eligibility. If the CTT were to be disbanded, the regulators could declare the plan ineligible to continue with the individual liability exception that we now enjoy. The Plan would then become uninsured.
By way of information, the Plan under current CTT management has seen its value INCREASE 42% over the past ten years. That increase in value has taken place in spite of the fact that the leading stock market index has actually DECREASED 9.4% in that same period. The current value is approximately $34 million. Approximately 760 people are currently collecting monthly benefitsand there are over 2,400 combined trainers and their employees who are registered to one day collect benefits from the Plan. The success of the CTT Pension fund is due to the dedication of a volunteer management committee that includes three professional money managers. Should a battle break out over decertification of the CTT, those volunteers are unlikely to want to continue to be involved.
WHY WOULD A DECERTIFICATION PROCESS ELIMINATE THE POSSIBILITY OF A HORSEMEN'S NON-PROFIT GROUP OWNING SANTA ANITA?
The people putting together this non-profit group have advised that any turmoil within the industry at this time would make such a project impossible to finance. The investment bankers are not going to put up funds for a project when the industry is involved in a battle over horsemen's representation.
WHY WOULD THE THREAT OF A NEW TRAINERS GROUP END ANY POSSIBILITY OF CURRENT CTT-TOC UNIFICATION?
One of the major concerns of the TOC in dealing with trainers has always been that certain dissidents would take seats on its Board. The TOC even fashioned rules to prevent that. A takeover movement by the newly formed group would again fuel those fears and cause a breakdown of current talks.
WHY WOULD THE ELIMINATION OF THE CTT AS THE TRAINERS' REPRESENTATIVE LEAD TO A LOSS OF THE CTT'S DIRECTORS SEAT ON THE RMTC?
The RMTC is the source of almost all new medication rules and penalties in California. The CTT was one of the original members of the RMTC and is on the board of directors of that organization. If a new organization were to become the representative of the California trainers, that seat could be lost. The TOC also holds a seat on that Board and the RMTC Board may feel that no other state has duel seats and, therefore, the TOC is sufficient representation.
THERE ARE SIMPLER, FASTER, AND LESS DEVICIVE WAYS OF MAKING YOUR VOICE HEARD AND CREATING POSITIVE CHANGE IN THE HORSE RACING INDUSTRY.
The CTT is a democratic organization owned equally by YOU and each licensed trainer in California. It has a nine person Board of Directors who are all trainers, with three directors being replaced each year by an election in which each trainer is allowed to vote.
Three directors' seats will be up for election in less than nine months. Another three directors were elected just 3 months ago, with two of them likely to be appointed by the newly formed group to its board. By electing three new directors of your choice, you can change the make-up and direction of the CTT Board.
Given that option, ask yourself, why would I choose to use a process that requires obtaining signatures from about 1/3 of the membership, approval by the CHRB, followed by a vote of all trainers, and the time and expense of creating and funding a new organization? Why would I choose to risk the resultant damages that are described above? Why would I choose to take sides in such an angry battle that is likely to create acrimony at my workplace for years to come?
Do not support that new organization called the CHC. Do not sign any petition to decertify the CTT. You do have other more effective and less destructive options. To promote change in the industry, become active, call (626-447-2145), email to [email protected], or visit a CTT office and voice your concerns. Volunteer to join or create CTT committees of your choosing.
If you think you might have signed a petition to decertify the CTT and you wish to withdraw your signature, please complete the below and return to the nearest CTT office. You may also fax to the CTT at (626) 446-0270.
I hereby withdraw my name from any petition to decertify the CTT.
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