Monthly Meeting of the Prairie Meadows Board of Directors July 22, :00 p.m.
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1 Monthly Meeting of the Prairie Meadows Board of Directors July 22, :00 p.m. The Monthly Meeting of the Prairie Meadows Board of Directors was called to order by Mr. Myers in the James Rasmussen Board Room at Prairie Meadows in Altoona, Iowa at 2:00 p.m. Roll Call. Mark Cooper - Arrived during Public Comment Diana Ewing E. J. Giovannetti Linda Grandquist Mark Hedberg Michael Knapp - absent Bob Myers Jack Peters Also in attendance were: Gary Palmer, President/CEO Ann Atkin, Vice President/COO Brian Wessels, Vice President/CFO Paul Rogness John Rowen - absent Karen Novak Swalwell Lisa Moody-Tunks Martha Willits Gene Meyer - absent Michael Helak Tom Flynn, Legal Counsel Nancy Winget, Its Recording Secretary Members of the Press, Public, and Staff Approval of the Minutes. A motion was made by Mr. Giovannetti to approve the Minutes of the monthly meeting of the Prairie Meadows Board of Directors held on June 24, 2015 as written. The motion was seconded by Mr. Helak and passed on a voice vote. Public Comment. Maggi Moss. Ms. Moss noted she was on the Board several years ago, was a lawyer for 20 years, has owned race horses since 1997; has been the leading winner for thirteen years and is the top winning female owner in the country; she sits on many boards and one is the rescue of race horses; she spends $100,000 a month on the industry; Prairie Meadows is her home track and is the only place she can see her horses run, but she s not coming back she s not happy here, it s a depressed atmosphere, and no one has ever thanked her. Mr. Palmer has said Prairie Meadows is not doing well due to other entertainment, the foal crop, etc.; it s important to tell the truth agriculture started gaming; there are hundreds of farms, breeders, etc. and 800 people on the Backside that bring economy to this area. There is no kitchen on the Backside, so there s nowhere for workers to eat; PM is the only track with no kitchen; workers can t cook in the dorms; the kitchen was closed because it didn t make money; PM put money into a new restaurant, etc. and is a non-profit why not take care of these people; there is a food truck. Prairie Meadows does not promote racing and it is a gem of a racetrack; racing is not in trouble around the country; the Festival of Racing in June was the biggest weekend and no one knew about it there was one radio ad and it wasn t on the Top 10 Sports Events list. If PM does not want racing and is trying to kill it, tell the truth; if that s not the case, then promote it; Sunday racing and simulcast is not good; families want to spend time together on Sundays; Mr. Palmer wants Sunday racing and has said Monday and 1
2 Tuesday are not good days, simulcast only makes 20 on the dollar. Bettors want to see the horses and there is no betting stand nearby (the Paddock), they have to go to the 4 th floor which is a bad area and hasn t been touched in ten years. Churchill and Saratoga welcomes her, she s not wanted here she s eaten the same food for 15 years. If PM wants racing, it needs to be promoted and people need to be treated with respect; the Racing office wants to do a good job, but are always telling her there are budget cuts and the track doesn t want to do this or that; the track is getting killed by management; there are no festivities on the Apron. You can read about Canterbury it s an entertainment destination. Speaking to this Board is the hardest thing she s had to do you are killing a great sport, there s no food (on the Backside) and no water in the barns - it s hurting the farms. Mr. Myers thanked Ms. Moss for her comments and said the Board is aware she s been racing here for many years. Mr. Myers thanked her for her participation at PM and wished her the best in the future. Jonathan Moss. Mr. Moss is the Executive Director of the IAHBPA, which represents owners and trainers; he recognized Sandra Rasmussen and the fact that this room is named for her husband; this is a controversial and emotional situation and Maggi Moss, Sandra Rasmussen, and Jack Peters have been around PM for a long time; the IAHBPA represents Gary Kirke, who is a competitor to PM. Prairie Meadows and the horsemen walk hand in hand one doesn t exist without the other and this is recognized by the legislature; PM and the horsemen work together on issues racing days, Advance Deposit Wagering, Wagering Exchange, etc.; the article mentioned some things previously presented to the Board and we continue to work on them the Track Kitchen is one of the items; the Board asked the IAHBPA to think about what it needs to do to bring horses and families to PM and it would be good to revisit the response letter. Sometimes the press takes things out of context for sensationalism. The IAHBPA talks to Mr. Palmer and we work things out; we are working on a joint response to the newspaper article; management and the horsemen meet every other week to talk about issues, maybe some Board members or staff Directors might want to attend, and we may want to create a committee to discuss the big issues. The horsemen and PM are tied together and we want to move together to create a positive atmosphere. Financials. Mr. Wessels reviewed the June 2015 YTD financials: Net Revenue above plan 4.5%; Total Expenses below plan 0.7%; and Net Income before Community Betterment above plan 36.3%. Hotel Occupancy PM vs. Market DM Market Competitive Set June YTD 75% 63.8% 70% Performance Goals June 2015 Year-to-Date Exceeds/Below Plan Casino Revenue +$2.3 million Total Revenue +$3.6 million Net Revenue +$4.2 Million Operating Expenses +1.1 million 2
3 Licensee Comparisons Property Net Win 2014 vs Slot Hold YTD PMRC +1.6% 8% Council Bluffs Market -1.4% n/a (Horseshoe, Harrah s and Ameristar) Horseshoe/Harrah s n/a 10.71% / 10.47% Ameristar n/a 9.59% Lakeside n/a 9.62% State as a whole +2% n/a State as a whole removing Hard Rock +0.2% n/a in Sioux City St. Louis market -0.6% n/a Kansas City market +1% n/a Action Item Audit Committee Charter. Ms. Willits said the committee held its quarterly meeting Monday and recommend some changes to the charter (page 3 - articulation of what we do and page 4 add cybersecurity verbiage) and hiring an external auditor to assist us with cybersecurity. Mr. Peters asked if the committee is recommending the fees be paid to the external auditor prior to starting the work; Ms. Willits said the committee would bring the RFP and recommendation to the Board; Mr. Myers believes the wording is not right the intent is the proposed fees would be brought by the Audit Committee to the full Board and would not be paid until the work is done. Ms. Willits moved to approve the Audit Committee recommendations, subject to changing the external auditor sentence, and the motion was seconded by Mr. Peters. Mr. Myers requested the language be sent out after the fact; Mr. Flynn said there are also some other minor things, but the Charter can substantially be approved. The motion passed on a Voice Vote. Racing Update. Derron Heldt, Director of Racing, reported: Thoroughbred Meet Sunday was the 55 th day of racing, with 12 days left; we have 1,015 horses on the Backside, more than last year; field size in and field size in ; handle, on-track is up.05%; YTD off-track handle is up $3.8 million (19%). The Festival of Racing was held on June 26-27; we had quality horses and jockeys and a good crowd; the Cornhusker was won by Golden Lad - his trainer is Todd Pletcher, the second leading trainer in the country by wins, and his jockey was Javier Castallano, the leading jockey in the country by wins. Carl Brober, the leading trainer in the country by wins, had 15 horses here this year and plans to send more next year. Toby Keith, country singer and owner of Dream Walkin Farms, entered Ghost Locket who won his race; Mr. Keith flew in to watch the races and graciously signed autographs. The Iowa-bred Open Stakes races for two years olds has the strongest program in 15 years, they won early in the meet and continue to win that s a credit to the breeders. The Hall of Fame is August 7 and the inductees are Chuck Schott who was the Horsemen s Liaison for about 15 years and Jack Peters, Board member and horse owner. August 8 is Iowa Classic Night with seven stakes races and it is also the last day of Thoroughbred racing this year. 3
4 Quarter Horse Meet. Staff is working on the transition from Thoroughbred racing to Quarter Horse racing; there are approximately 150 Thoroughbreds that want to stay during the Quarter Horse Meet and pay stall rent; stall applications were due on July 8 and we received over 800 applications; we expect 600 horses for the 26 day meet. Mr. Palmer said Mr. Heldt and his staff are doing a great job - keep up the good work; attendance, handle, and revenue are up this year: 2015 Attendance Opening Night Saturday, April 18 14,000+ Kentucky Derby Day Saturday, May 2 18,000+ Festival of Racing Friday, June 26 12,000+ Festival of Racing Saturday, June 27 13,000+ Mr. Myers asked how the numbers relate to a year ago and Mr. Heldt said, race by race, we re up on five of the six Festival Races we ran the big races earlier on the card to get people to stay and see the horses and for the simulcast signal. Mr. Helak asked the stall capacity on the Backside and Mr. Heldt said we have 1,419 stalls and 27 barns 16 stalls for the Outriders; 26 stalls in the ship-in barn, stalls for the commercial ponies we have 1,350 stalls for the Thoroughbreds; some Quarter Horses want to start shipping in and we may use the extra stalls for them. Mr. Myers noted there s an uptick in racing at PM this year; Mr. Heldt said visually, attendance compared to last year, and the numbers on and off track are strong. Staff Report. Clay Willey, Director of Hospitality, said he started in April 2008 at Iowa s biggest and best casino; the expectation is to exceed guest expectations and the competition; Hospitality has 15 P&L s totaling $21 million; Hospitality has approximately 400 employees including 10 Managers and 18 Supervisors; Hospitality never closes and he s proud of the pride we offer to our guests; the hotel has been very busy since it opened and the Events Center is having a record year. Sunday racing is popular with families, we had 281 for the Mother s Day buffet and 357 for the Father s Day buffet, Sunday buffets are averaging 500 guests. In 2014, the dessert area was expanded and the buffet on the 4 th floor was remodeled; The Paddock was remodeled; we added Prairie Coffee Company and will add fudge to the menu in August; the Starting Gate received a facelift; and the Finish Line Show Lounge was remodeled it has the first smoke-free bar in the facility and it s a popular space for entertainment and Marketing events. In 2015, AJ s bar area will be remodeled and 40 seats added - this project starts in September. We ll also remodel TCE starting in October after Racing and be done January 2016 with expanded offerings and to better serve our guests; the buffet will be moved to the 4 th floor during remodeling; we expect 3,000 for the Thanksgiving buffet and will use the Ballroom; Christmas and New Year s Eve buffets will be held on the 4 th floor. 4
5 President s Report. Mr. Palmer said most of his report has been covered by Mr. Heldt and Mr. Willey. The buffet and steakhouse will be renovated - the areas are 10 years old. July 26 Family Day at the Races August 7 Hall of Fame Induction and races. August 8 Iowa Classic Parade and Iowa races. August no meeting. Committee Reports. Finance. Mr. Helak said the committee met on Monday and reviewed the financials; the trends are improving and PM is doing better than the gaming trends in Iowa; started discussion on the 2016 budget assumptions and the impact of Jefferson; scheduled the October budget calendar meetings. Facilities. Mr. Palmer gave the report for Mr. Rowen The committee met on Monday and was given an update on the progress of TCE and AJ s remodeling project the contract was awarded to Weitz as it submitted the lowest bid; reviewed the Bullpen and Valet restroom situation and the solution. Audit. Ms. Willits said the committee met on Monday and reviewed the year s work plan, heard an IT security presentation, and worked on the Audit Committee Charter. Human Resources. Mr. Hedberg said the committee did not meet. Grants. Mr. Peters said the committee will meet after this one concludes; we ll be reorganizing as term limits are up and the calendar has been moved back. Ms. Moody-Tunks asked if the structure will be communicated and Mr. Peters said yes. Executive. Mr. Myers said the committee covered the items on the Board Agenda Financials, Construction, and Other. Other Business. Mr. Myers recognized those who will be inducted into the Hall of Fame Jack Peters and Chuck Schott and said this is a notable event and everyone should have received an invitation. Adjournment. Mr. Cooper moved to adjourn the meeting and the motion was seconded by Ms. Grandquist. There being no further business, the meeting adjourned at 2:50 p.m. Respectfully submitted, R. Michael Knapp, Its Secretary 5
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