Washington Horse Racing Commission
Meeting Minutes
May 11, 2006

Present were: Hartly Kruger, Chair; Paul George, Commissioner; Dr. Bud Hallowell, Commissioner; Judi Roland, Commissioner; Carol Smith-Merkulov, Commissioner; Susan Carlson, Assistant Attorney General; Robert M. Leichner, Executive Secretary;
Patty Sorby, Secretary.

Item #1. Approval of the meeting minutes of April 6 and 7, 2006.

Commissioner Roland moved to accept the minutes as submitted. Commissioner George seconded the motion. Unanimously carried.

Chairman Kruger requested out of state travel authority to attend a meeting in Kentucky with regard to the National Racing Compact.

Commissioner George moved to approve the request for out of state travel to Kentucky. Commissioner Hallowell seconded the motion. Unanimously approved.

Item #2. Emerald Downs’ report.

Mr. Jack Hodge, Vice President, Northwest Racing Associates, LP, updated the members on the first eight days of racing at Emerald Downs’. He reported that even though some unusual circumstances had occurred with the electricity going out and a day of racing cancelled, they had been able to make up the lost day, and reported 8.1 starters per race. He reported 1,288 horses in the stables. The handle is up approximately thirteen percent over last year and wagering on Emerald Downs’ races is up eighteen percent. Satellites sites are down seven percent and out of state is up thirty-six percent.

Item #3. Emerald Downs’ requests:

a. Handicapping tournament rules.

Mr. Adrian Buchan gave the members an overview of the handicapping tournament that Emerald Downs’ was offering to the public beginning May 17, 2006. An entry fee of $100 is required to participate with the entrant potentially able to participate in a national tournament in Las Vegas.

Mr. Leichner said staff had reviewed the contest regulations and recommend approval.

Commissioner Smith-Merkulov moved to approve as proposed the handicapping tournament as requested by Emerald Downs. Commissioner Roland seconded the motion. Unanimously approved.

b. Advance wagering on the Kentucky Derby.

Mr. Leichner stated Emerald Downs had requested to offer advance wagering on the Kentucky Derby on May 6, 2006.

On Friday, May 5, 2006, Cliff Schellinger of Sun Downs’ called and requested that advance wagering not be allowed at the satellite sites located near their racetrack in Kennewick. It would harm their race meet because Sun Downs was offering simulcast of the Kentucky Derby to have bettors come out to the racetrack. Mr. Leichner granted Mr. Schellinger’s request and denied advance wagering for the Kennewick and Walla Walla satellite facilities.

c. Change post time for May 6th.

In response to the cancellation of races on April 29th due to electrical problems, Emerald Downs’ requested to change the post time from 2:00 P.M. to 1:30 P.M. Mr. Leichner had granted the request and was informing the members of the change.

Commissioner Roland asked if Mr. Leichner would inform her of any future changes.

Commissioner Smith-Merkulov suggested Mr. Leichner email the members when these types of decisions have been made.

d. Refund of Emerald Downs’ $500 Daily Fee.

Mr. Leichner explained the daily license fee required to be paid in advance by a racing association. Emerald Downs’ was unable to operate on April 29 due to a power outage. Emerald Downs’ had already paid the daily fee for this day and statute provides that if the association cannot continue, all or a portion of this fee can be waived. The Commission must approve the refund of this daily fee.

Commissioner George moved to waive the daily fee collected for April 29 from Emerald Downs because of the inability to race and refund the fee collected. Commissioner Roland seconded the motion. Unanimously approved.

Item #4. Emerald Downs’ policy regarding advertising on jockey’s pants.

Mr. Leichner explained that Emerald Downs had established a policy regarding advertising on jockey’s pants, but this was not a regulatory issue. Ms. Susie Sourwine of Emerald Downs stated they had established some requirements and wanted to advise the members that there was a policy when jockeys consider advertising on their pants.

Item #5. Honorary license applications:

a. Frank Beard
b. Don Pfau

Mr. Leichner stated two applications had been received requesting honorary licenses. Pending receipt of their criminal history, staff recommends approval of the honorary license applications.

Commissioner George moved to approve the honorary license for Mr. Frank Beard. Commissioner Smith-Merkulov seconded the motion. Unanimously approved.

Commissioner George moved to approve the honorary license for Mr. Don Pfau. Commissioner Hallowell seconded the motion. Unanimously approved.

Mr. Ralph Vacca asked why the honorary license was treated differently than any other license. Mr. Leichner said the rules provide that only the Commission members can approve honorary licenses. Chairman Kruger directed staff to begin the process to change the rule so that approval of honorary license does not have to come before the commission. Although, as in this case, Chairman Kruger noted that it is appropriate to honor or recognize the achievements of long time supporters of horse racing.

Item #6. Hearings:

a. Thomas C. Dahlquist.

Mr. Leichner said that he had received a call from Mr. Dahlquist who was unable to attend the hearing today, due to illness and requested a continuance. Mr. Tribble requested that the continuance be to the August 10, 2006 meeting as he would be unavailable for the July meeting.

Commissioner Smith-Merkulov moved to grant Mr. Dahlquist’s request for a continuance to the August 10, 2006 meeting and that there would be no further continuances granted. Commissioner Roland seconded the motion. Unanimously approved.

Item #7. Jeffery A. Jones request to be granted a modification hearing.

Mr. Leichner said that a letter had been received from Mr. Jeffery Jones requesting the Commission review their Washington Horse Racing Commission Order from April 1995.

Commissioner Smith-Merkulov asked of Ms. Carlson if it were possible for the Commission to modify their own order. Ms. Carlson responded that the Commission could modify their order.

Commissioner Smith-Merkulov moved to deny Mr. Jones request. Commissioner Hallowell seconded the motion. Unanimously approved.

Chairman Kruger requested Mr. Leichner to inform Mr. Jones by letter.

Item #8. Backside veterinarian needed for the Dayton Days meet.

Mr. Leichner stated that a letter had been sent to him from Dr. Colette Bergam, DVM, state veterinarian for the Class C meets, stated that Dr. Curt Golden who normally is the association veterinarian who administers the pre-race medication would be unavailable for the 2006 Dayton meet. Dr. Bergam also asked whether the fees could be waived if they could find a veterinarian to work.

Commissioner Smith-Merkulov moved to authorize the executive secretary with the assistance of the assistant attorney general work to solve the problem in a lawful manner.

Mr. Leichner commented that one option might be to have the association hire the veterinarian to do the medication injections and pay the licensing fee.

Commissioner Roland seconded the motion. Unanimously approved.

Item #9. Executive Secretary’s report.

a. Accountant’s April 2005/2006 recap.

Mr. Leichner said that the accountant had prepared two reports one for year to date and the second is wagering period to date. The year to date comparison shows up .06 percent while the wagering period 2005/2006 comparison shows down 9.48 percent.

b. 05-07 budget.

Mr. Leichner explained that even though April and May are the biggest expense months, the WHRC continues to show a positive cash flow, the fund balance increased $20,000 to $1.023 million. He said that if the WHRC disbursed the $300,000 from the operating fund as allowed by the statute, the fund balance would go down to $700,000 still showing good financial condition.

c. Agency strategic plan.

Mr. Leichner said the strategic plan must be submitted to the Office of Financial Management by June 1. Mr. Leichner went over the agency mission, goals and strategies for the 07-09 Biennium. The agency had accomplished several of its 05-07 strategic plan goals.

Commissioner Hallowell asked if the contact information for the Commission offices could be placed on the website. Mr. Leichner said that was one of the items on the list that will be done.

Chairman Kruger said that he felt the Commission was doing well in communicating with stakeholders. Mr. Leichner said that he felt we should hold a meeting at least once a year in eastern Washington.

Commissioner George asked about accommodating non-English speaking licensees. Mr. Leichner said that the Commission had translated some of its information into Spanish, but there was a need to do more.

Mr. Leichner said the jockey incentive program should be in place with distribution of funds at the end of racing at the Class C meets this fall. Some of the agency goals are repeated again for the next biennium. He said the agency would commit to improve efforts to protect the health of equine participants, expand the post mortem program, enhance research and modernize the rules of racing.

Commissioner Hallowell would like to do research on the virus that appears at the race track every year. He hoped this could lead to identifying the virus and being able to respond to it before it becomes an epidemic.

Mary Ann O’Connell commented on a workshop she had attended on contagious diseases that occur at the track. She agrees with Commissioner Hallowell that there is a need to identify the disease and control the outbreak.

Jack Hodge said that the Equine Safety Committee might deal with this at the association level. Washington lacks a history on researching equine anomalies.

Chairman Kruger asked stakeholders to send Mr. Leichner any thoughts to consider for inclusion in the plan.

Commissioner Roland moved to approve the submittal of the Strategic Plan. Commissioner Hallowell seconded the motion. Unanimously approved.

d. Discussion – L&I Premium meetings.

Mr. Leichner asked for recommendations on how to hold meetings for discussing changes to the Labor & Industries premiums.

Commissioner Roland suggested holding the meetings at the track with a couple of the members present to accommodate the owners, trainers, etc.

Commissioner Smith-Merkulov volunteered to attend the meetings. Chairman Kruger asked Commissioner Smith-Merkulov to chair the meetings.

Mary Ann O’Connell asked who would take the feedback from the stakeholders and compile that information. She commented that asking for options in an open meeting does not get anywhere.

Mr. Leichner suggested forming a work group which would develop a couple of plans and then have the stakeholders select their preferred plan. This plan must be submitted by September.

e. Licensing list.

Mr. Leichner, in response to a request from commissioners, submitted a list of association categories that require a license and those that do not.

f. Emerald Downs’ 2006 Import/Export list.

The Emerald Downs import/export list was submitted to the WHRC for review as a follow-up to the February 9, 2006 meeting.

g. HRMS update.

The state is implementing a new payroll system, HRMS. Mr. Leichner said the new system included major changes to the way personnel information is processed and payroll is submitted. One of the changes is deadlines for personnel to submit their time. If time is not submitted timely, the employee may not be paid in a timely manner.

Mr. Leichner commended the entire staff on their exceptional work this year and stated he is very pleased with the progress that has been made.

Mr. Leichner said that on May 24th a joint House and Senate legislative work session on gambling policy of the state of Washington will be conducted from 1-5PM.

On April 11th Mr. Leichner submitted to the Governor the annual report for 2005 and it is on our website.

Ethics training will be conducted on June 15, 2006 for those who would like to attend.

A publication regarding identification of horses by microchip was provided to the Commissioners for their information.

Item #10. Any other business that may be properly brought before the Commission.

No business.

Meeting adjourned at 11:52 a.m.

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Robert M. Leichner, Executive Secretary