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More savings from merged Crowns

Higher than expected, but CEO pushes for single HQ

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The union of Manitoba Lotteries and the Manitoba Liquor Control Commission will save taxpayers $6.1 million in the first two years of being merged by the NDP.

That's slightly more than what the Selinger government claimed would be saved when it surprised approximately 3,000 Lotteries and MLCC employees 18 months ago with news they'd be brought under a single agency.

But it's less than what taxpayers could save if the new Manitoba Liquor and Lotteries (MLL) was brought under one roof, president and CEO Winston Hodgins said in a recent interview.

"There is work that is continuing," Hodgins said. "I think that there are opportunities for us to achieve additional savings."

The majority of Lotteries employees are still working in the former Crown's four locations and the former MLCC office at Buffalo Place in Fort Garry also still serves as office space. It is also the main distribution centre for liquor outlets around the province.

"There hasn't been a final decision yet, but I would hope that we would be able to relocate into a new head office where we could bring all of the staff together," he said. "There will be additional efficiencies that we'll be able to achieve once the head-office staff is relocated into a new head office."

When the Selinger government announced the consolidation in April 2012, it said it would save the province about $3 million annually.

There has also been discussion that MLL would eventually move into a redeveloped downtown Bay department store, but Hodgins would not comment.

"I would suspect if we were to consolidate all of our head-office functions, it would probably be in the downtown area somewhere," he said, adding there is no timeline for such a move. "We've been very busy with other things other than worrying about the head office. That will come in due course."

Hodgins and Marilyn Robinson, MLL vice-president for integration, said in the absence of moving into a single head office, the new Crown opted for the next best thing -- co-location. Last May long weekend, 420 staff co-located between Buffalo Place and the main Lotteries office on Empress Street.

Among the moves, the finance division for the new Crown is now at Buffalo Place and communications is now at the Empress Street office.

"It was a huge undertaking," Hodgins said. "There were very few hiccups."

Hodgins added a private consultant, hired shortly after the merger was announced, identified 21 common areas that could be co-located. Nine senior management positions, where there was duplication, are also to be eliminated.

"The bulk of the positions are vacant so we are in fact achieving saving through those particular positions," Hodgins said.

During the next 12 to 18 months, the new Crown will harmonize human resources such as benefits packages and hours of work, Robinson said. Also in the works is unifying the electronic records-management system.

The other challenge is blending the cultures of the two organizations.

"They had their way of doing business. Lotteries had their way of doing business," Hodgins said. Now we're a new entity and we have to do things in a new way."

Meanwhile, the bill making the merger legal is winding its way through the legislative approval process. It will likely be passed in December.

"But we really don't have any idea what the regulations will look like," Progressive Conservative MLA Cliff Cullen, the Tory critic for MLL, said. "That's what's going to impact the public and that's what's going to impact the hotel business and the restaurant business and the whole gaming industry. We're kind of going into this thing blind."

Cullen also said he's wary of how much money is actually being saved through the amalgamation or the likelihood of the new Crown having a single head office.

"It's pretty clear they're not sure where it's headed," he said. "Ultimately, we want this new organization to run efficiently. There's no use going through an amalgamation process if it's not going to be running more efficiently."

Cullen added the only real benefit to date of the merger is putting the regulatory and licensing functions of the MLCC and Lotteries under one roof with the new Liquor and Gaming Authority of Manitoba.

Manitoba Government and General Employees Union president Michelle Gawronsky added there has been little effect on the 1,300 unionized liquor commission workers represented by the MGEU. Bargaining for a new collective agreement is to start in March.

"Workers feel there's a lag in communication to all the employees," Gawronsky said. "It's a much bigger organization now than what it was. Management is over in another building so it does take longer for their concerns to be answered."

Besides the MGEU, there are four other unions representing MLL employees and seven collective agreements.

Republished from the Winnipeg Free Press print edition October 30, 2013 A8

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