Washington Horse Racing
Commission
Meeting Minutes
July 12, 2007
Present were: Carol Smith-Merkulov, Chairperson;
Jeff Colliton, commissioner; Paul George, Commissioner;
Bud Hallowell, DVM, Commissioner; Hartly Kruger, Commissioner;
Cindy Evans, Assistant Attorney General; Heather Polz,
Assistant Attorney General; Robert M. Leichner, Executive
Secretary; Patty Sorby, Confidential Secretary.
Item #1. Approval of the meeting minutes of June
14, 2007.
Commissioner Hallowell moved to approve the minutes
for June 14, 2007. Commissioner George seconded the
motion. Unanimously approved.
Item #2. Chairperson’s report.
Chairperson Smith-Merkulov said she had nothing new
to report.
Commissioner Colliton said the orientation he attended
in Minneapolis was worthwhile. There were sixteen
attendees from several states. The networking, full
agenda work sessions and activities were very informative.
Commissioner Colliton also said he had received a
call from someone who was interested in bidding for
barn “coveralls” and Commissioner Collition
had given him the names of the Class C contacts and
also Mr. Leichner’s number.
Commissioner Kruger gave a progress report regarding
the National Racing Compact (NRC) financial situation
and announced that Ohio was now a participant. He
also said he had attended the Equine art show and
was very impressed.
Ralph Vacca gave a report on the proceeds from the
art show sales.
Commissioner Colliton asked Mr. Leichner if there
were discussions about the National Racing Compact
becoming the federal agency for horse racing. Mr.
Leichner said he had not heard any discussions regarding
that subject.
Item #3. Emerald Downs’ report.
Mr. Ron Crockett, President, NW Racing Associates
said after forty-three days, had very favorable information
to report. Projections were right on target, with
marketing doing very well; partnering with Lottery
and TVG purse enhancement for the Longacres Mile race.
He also reported Washington Bred horses were receiving
purse money slightly more than fifty percent of the
time.
Susie Sourwine, Marketing Director, Emerald Downs,
reported on the marketing strategies in place for
the next few weeks at Emerald Downs. She was very
excited about the opportunity to have a “Latino
Day” activity. Ms. Sourwine explained the marketing
activities through direct mail, email, radio and television
ads. She reported all were very successful.
Item #4. Discussion of proposed 2008 license fees.
Mr. Leichner said Revised Code of Washington (RCW)
67.16.020 requires Washington Horse Racing Commission
(WHRC) to collect fees to recover the costs associated
with licensing and Washington Administrative Code
(WAC) 260-36-085 requires the WHRC to review license
and fingerprint fees annually. Mr. Leichner presented
the license fee history from 1989 to 2004. The license
fee study completed in October 2003 revealed that
prior fees only recovered about one-fourth of the
costs of the licensing process. The objectives of
the fee study were to be fair in analyzing the costs
basing the fees on actual costs, keep costs and fees
at reasonable levels and to avoid subsidies. The costs
can only be raised according to the fiscal growth
factor as outlined in Chapter 43.135 RCW. The WHRC
requested and was approved to exceed in the last legislative
session an exception to the fiscal growth factor.
Mr. Leichner offered four options to be considered
by the WHRC. Option one was to increase the fees by
the maximum allowed by the fiscal growth factor at
5.53 percent. Option two was to increase to the maximum
amount of the fiscal growth factor rounded down to
the nearest whole dollar. Option three was comprehensive
adjustments, increasing fees by at least $6.00 for
those under $50.00; adjust fees over $40.00 to twenty
percent plus $1.00. Option four was to make comprehensive
adjustments less $2.00, and eliminate the multiple
license discount.
Staff recommendation was to adopt option four.
Chairperson Smith-Merkulov asked for any public comment.
MaryAnn O’Connell, Executive Director, Horsemen’s
Benevolent & Protective Association (HBPA) stated
her membership felt it was very important to retain
the multiple license and encouraged the WHRC to adopt
option three which would keep the license fee cap
in place. She stated that even if it meant raising
the fees the HBPA would still want the cap left in
place.
Frank McDonald, President, HBPA said he also supported
adopting option three. He had spoken with HBPA members
and agreed the cap was very necessary.
Ralph Vacca, General Manager, Washington Thoroughbred
Breeders Association (WTBA) asked if any consideration
had been to reduce expenses by limiting time the licensing
office is open or raising the fingerprint fees, if
that would have any impact.
Ms. O’Connell wondered if the WHRC could publish
some type of information providing the numbers quantifying
dollars to fees on the WHRC webpage. She also asked
about internet licensing.
Mr. Leichner explained internet licensing was not
possible when paying for L&I fees. The cost associated
with the transaction cannot be supported by the trust
account in which the payments are deposited.
Commissioner Kruger moved to adopt option three as
outlined in the proposal. Chairperson Smith-Merkulov
seconded the motion.
Commissioner George recognized it was illegal to
subsidize the licensing program, he still felt that
there must be some way to assist the licensees by
picking up the fiscal growth factor within the operating
budget.
Mr. Crockett suggested diverting a percentage of
the portion Emerald Downs pays to the Commission to
support the licensing subsidy.
Commissioner Hallowell echoed Commissioner George’s
comments and felt there must be some way to fix the
shortfall.
Chairperson Smith-Merkulov said that was certainly
something to think about and possibly make some adjustments
between now and the adoption hearing, but the Commission
needs to move the process along to meet the time frames
required to implement the fees for 2008.
Chairperson Smith-Merkulov called for the vote on
the motion to adopt option three.
Chairperson Smith-Merkulov, Commissioners Colliton,
Hallowell and Kruger voted yes. Commissioner George
voted no.
Commissioner George moved to look at the WHRC budget
to find some way to subsidize the licensing process
to include picking up the fiscal growth factor to
keep the annual license fees as low as possible. Commissioner
Hallowell seconded the motion.
Commissioner Colliton said the $34,300 shortfall
would obviously increase every year, but staff has
to look at some way to offset or doing away with that
shortfall and would probably come back in September
with some ways to offset the shortfall. Mr. Leichner
said yes.
Commissioner Kruger said the fees remained the same
for years, the jockey fee will go up $11.00, some
go up $6.00 and some will remain the same.
Chairperson Smith-Merkulov said she agreed with Commissioner
Kruger and costs are down as low as possible. She
is not in favor having staff utilized to address a
problem that can only be dealt with by the legislature.
Commissioner Colliton echoed the Chairperson’s
comments and would amend the motion to pursue this
legislatively.
Commissioner Hallowell asked if this was the Commission’s
job to pursue this or someone else.
Chairperson Smith-Merkulov said staff could look
into doing this.
Commissioner Hallowell withdrew his second to Commissioner
George’s motion.
BREAK. (11:00 A.M.) RECONVENED (11:45 A.M.)
Item #5. WHRC Information Technology audit report.
Robert Lopez, Deputy Secretary, informed the Commission
on the information technology audit report that is
required by the Information Services Board every three
years and our report is due in August 2007. The WHRC
contracted with Technology Solutions Group an independent
IT consulting firm to update the agency’s IT
portfolio, IT security plan and IT disaster recovery
plan and simultaneously conduct the audit. The cost
of the review was $2,175.
In May 2007 the consultant provided the WHRC with
updated plans and found the WHRC to be in compliance
with all ISB requirements.
The auditor identified three minor areas the WHRC
had to complete. 1. Encryption of our wireless network
at Olympia, Emerald Downs and the Class C tracks.
2. Issue hardened passwords that expire every sixty
days. 3. Mirror the two WHRC servers to ensure no
loss of data in the event of a disaster (or similar
data back-up). With the exception of the encryption
of the wireless network at the Class C race meets
these have been accomplished.
Item #6. Proposal by Dr. Russell Tucker regarding
histomorphology analysis of collected tissues. Moved
to later in the agenda.
Item #7. Rules of Racing: Adoption hearings:
a. Chapter 260-14 Rules Related to Commissioner/Employees.
Mr. Lopez said these rules were being amended to
place them into clear and understandable language
and to update several sections.
WAC 260-14-040 Wagering. This section is being amended
to prohibit any commissioner or spouse or employee
or spouse from placing a wager at any facility under
the jurisdiction of the commission and making a wager
on the outcome of any horse race under the jurisdiction
of the commission.
WAC 260-14-050 Ownership interests in racehorses.
This section amendment is to add commissioners to
the existing prohibition already in place for employees,
and that is to have no ownership interest in any racehorse
running at any race meet under the jurisdiction of
the commission.
WAC 260-14-070 Violations. This section is being
amended to indicate how violations of the chapter
will be handled.
Mr. Lopez said these rules were initially filed in
January 2007, proposed language was shared with stakeholders
in March 2007 and in April 2007 the original filing
was withdrawn and a supplemental filing was done in
May 2007. Staff received comments from Mr. Jack Hodge
and all his comments were incorporated into the proposal.
These rules changes have been reviewed by the WHRC
assistant attorney general. Staff recommends adoption
of the proposed amendments to WAC 260-14-040; 050;
and 070.
Chairperson Smith-Merkulov asked for public comment.
None was received.
Commissioner Kruger moved to adopt the amendments
to WAC 260-14-040; WAC 260-14-050; and WAC 260-14-070.
Commissioner Hallowell seconded the motion. Unanimously
approved.
b. WAC 260-36-010 License Required.
Mr. Lopez said this section was being amended to
allow class 1 racing associations to hire temporary
mutuel clerks, licensed in another recognized jurisdiction,
for high volume race days such as the Longacres Mile.
The amendment of subsection two of this rule adds
the following list of persons not required to obtain
a license: persons employed by an out-of-state racing
jurisdiction and holding a valid license from a recognized
racing jurisdiction working for a class A or B racing
association as a parimutuel clerk for a period not
to exceed eight days in any calendar year.
Mr. Lopez said the initial filing of the amendment
occurred in March 2007 and the proposed language was
shared with stakeholders in May 2007. No public comments
were received except after the proposed language was
filed Emerald Downs requested staff to change the
proposal from four days to eight days per calendar
year. Staff agreed to this change and it is included
in the current proposal. Staff recommends adoption
of the proposed amendment to WAC 260-36-010. Chairperson
Smith-Merkulov added the word “total”
to read “…eight days total per calendar
year.”
Chairperson Smith-Merkulov asked for public comment.
None was received.
Commissioner Colliton moved to adopt the amendment
to WAC 260-36-010. Commissioner George seconded the
motion. Unanimously approved.
c. Policy/Interpretive Statement 2007-03 Random Drug
and Alcohol Testing.
Mr. Lopez said in March 2007 the commission adopted
a policy/interpretive statement (2007-03) regarding
random drug and alcohol testing. This policy/interpretive
statement allows six names to be drawn each week.
It was discovered the same names were being selected
over and over. This prompted a review on how many
licensees fit the testing category. Only sixty-seven
names fit the criteria of violations within the past
five years. Staff is requesting the commission consider
amending Policy/Interpretive Statement 2007-03 to
allow for testing of two persons with a documented
history of drug or alcohol violations per week.
Mr. Lopez stated the policy/interpretive statement
was shared with employees and in July 2007 the language
was shared with stakeholders. Staff recommends adoption
of Policy/Interpretive Statement 2007-03 as amended.
Commissioner Hallowell moved to adopt the changes
to Policy/Interpretive Statement 2007-03. Commissioner
Colliton seconded the motion.
Chairperson Smith-Merkulov asked for public comment.
Frank McDonald, HBPA, if there was a limit on testing
on a person who has tested clean.
Mr. Lopez said no, that every person on horseback
was subject to random testing. It was strictly a safety
program.
Chairperson Smith-Merkulov called for the vote. Unanimously
approved.
LUNCH BREAK. (12 Noon) RECONVEDED (1:00 P.M.)
Item #8. Hearings:
a. Cleveland Hammonds.
Chairperson Smith-Merkulov opened the hearing for
Cleveland Hammonds and introduced the WHRC members
present. Michael S. Tribble, Assistant Attorney General
represented staff. Mr. Hammonds was present and not
represented by an attorney.
Mr. Tribble introduced eleven exhibits and Chairperson
Smith-Merkulov admitted them. Richard Smith, Investigator,
WHRC gave testimony. Mr. Hammonds gave testimony.
After considering the evidence the Commission unanimously
upheld the decision of the board of stewards and revoked
Mr. Hammonds’ license.
b. Francisco J. Hernandez-Perez.
Chairperson Smith-Merkulov opened the hearing for
Francisco J. Hernandez-Perez and introduced the WHRC
members present. Michael S. Tribble, Assistant Attorney
General represented staff. Mr. Hernandez-Perez did
not appear.
Mr. Tribble introduced eight exhibits and Chairperson
Smith-Merkulov admitted them. Walter E. Roderick,
Investigator, WHRC gave testimony. Mr. Tribble recommended
revocation of the license of Mr. Hernandez-Perez and
make him ineligible to participate in racing.
After considering the evidence Mr. Hernandez-Perez’s
license was revoked.
Hearings closed.
Item #6. Proposal by Dr. Russell Tucker regarding
histomorphology analysis of collected tissues.
Mr. Leichner received correspondence from Dr. Tucker
regarding the cost estimates for the histomorphology
analysis of collected tissues at Washington State
University. Commissioner Hallowell suggested this
be a part of the WHRC Necropsy Program. Mr. Leichner
said that he would be looking at the budget to determine
adjustments needed to allow the examination of saved
tissues collected by WSU for further examination.
Dr. Tucker estimated the costs to be between $200
and $300 per horse on most cases. This would result
in an expenditure of approximately $6000-$9000 for
the 2007 race season.
Commissioner Hallowell said this is important to
try and identify potential injuries by histomorphologic
analysis. Commissioner Hallowell said this estimate
on cost was virtually free even though it was $200-$300
per slide. He strongly urged the WHRC to go on with
this program.
Chairperson Smith-Merkulov said she felt the WHRC
should go ahead with the program even though it meant
cutting costs in other areas.
Mr. Leichner said he would adjust the budget to allow
for these costs.
Item #9. Executive Secretary’s report.
Mr. Leichner said in addition to the regular meeting
date of August 9, he would like to schedule several
hearings that would be held on August 8 and 9 and
asked the Commissioners to check their calendars for
availability.
Mr. Leichner said a Stewards Continuing Education
seminar will be hosted by the WHRC on October 8 and
9 at the Peppertree Auburn Inn and invited any commissioner
that wished to attend. He said Dr. Stanley from UC
Davis Toxicology Lab is presenting and Dr. Barry Logan,
State Toxicologist WSP Crime Lab is presenting. Chairperson
Smith-Merkulov will present.
a. Accountant’s recap June 2006-2007.
Mr. Leichner explained the accountant’s comparison
recap of wagering for June 2006 and 2007 and the comparison
of wagering periods June 2006 to June 2007.
b. 2005/2007 Budget update.
Mr. Leichner provided the Commissioners with the
budget expenditures and revenues. The fund balance
is $841,430.
c. 2008 Proposed Commission meeting dates.
Mr. Leichner proposed the 2008 meeting dates including
one meeting in Eastern Washington on Friday, May 24,
2008. The Commissioners approved the 2008 meeting
dates and locations.
Item #10. Any other business that may be properly
brought before the Commission.
Commissioner Colliton asked if any comments had come
back from the Breeders. Mr. Leichner said he hadn’t
had any and staff is on track in collecting the necessary
data. He is working with the Office of Financial Management
to make sure the data transfers without problems.
Meeting adjourned.
____________________________________
Robert M. Leichner, Executive Secretary
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