Monthly Meeting of the Prairie Meadows Board of Directors May 27, :00 p.m.

Transcription

1 Monthly Meeting of the Prairie Meadows Board of Directors May 27, :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 2:05 p.m. Roll Call. Mark Cooper Diana Ewing E. J. Giovannetti Linda Grandquist Mark Hedberg Michael Knapp Bob Myers Jack Peters Paul Rogness John Rowen arrived during Lobbyist Report Karen Novak Swalwell Lisa Moody-Tunks Martha Willits Gene Meyer Michael Helak Also in attendance were: Gary Palmer, President/CEO Ann Atkin, Vice President/COO Brian Wessels, Vice President/CFO 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. Cooper to approve the Minutes of the monthly meeting of the Prairie Meadows Board of Directors held on April 22, 2015 and the Special Meeting held on May 1, 2015 as written. The motion was seconded by Mr. Hedberg and passed on a voice vote. Public Comment. None Financials. Mr. Wessels reviewed the April 2015 YTD financials: Net Revenue above plan 4.3%; Total Expenses below plan 0.9%; Net Income before Community Betterment above plan 21.7%. Licensee Comparisons Property Net Win 2014 vs Slot Hold YTD PMRC +.05% 8% Council Bluffs Market -2.0% n/a (Horseshoe, Harrah s and Ameristar) Horseshoe/Harrah s n/a 10.70% / 10.45% Ameristar n/a 9.71% Lakeside n/a 9.58% State as a whole* +2.6% n/a St. Louis market +1.6% n/a Kansas City market +3.6% n/a *if Sioux City is taken out, the state growth is+ 0.5% 1

2 Hotel Occupancy PM vs. Market DM Market Competitive Set April YTD 73.5% 58.2% 66.3% Performance Goals April 2015 Year-to-Date Exceeds/Below Plan Casino Revenue +2.5% Total Revenue +3.5% Net Revenue +4.3% Operating Expenses -2.3% Lobbyist Report. Troy Skinner said the session is four weeks over the schedule; most legislators are home; the leaders are here working on the budget education and Human Services. Some things of interest to PM: Promotion Tax Credit Bill they propose to cap the tax at $27 million, it s unclear if this bill will move or not, it may pass the House, it s unclear what the Senate will do; the Greyhound group is trying to undo the IRGC decision on how to allocate the soft landing funds, this is going to a Conference Committee; the Fantasy Sports bill is dead for this year, the IGA is working on this, it most likely will be reintroduced next session. Racing Update. Derron Heldt, Director of Racing, gave the following report: Memorial Day marked the twenty second day of Racing, the Thoroughbred Meet is 1/3 over. We have 1,122 horses on the Backside; an Oklahoma track ended on Memorial Day and we re expecting about 40 horses to arrive from that track. The field size this year is 7.22 and last year it was Handle on-track is up $3,400 and off-track is up $435,000. May 2 was the Kentucky Derby and we had a great crowd. Handle for the Kentucky Derby: on-track was up over 2014, live was down, off-track was up; American Pharaoh was the favorite and he won. May 16 was the Preakness it was an eight horse field and American Pharaoh won; we had a light crowd; handle was down, on the Preakness, over live on-track was down, live off-track was up. June 6 is the Belmont it will be a horse field, American Pharaoh will run and could be the first Triple Crown winner in over 20 years, Marketing is working on advertising to get people to come out. June is the Festival of Racing we ll run two prep races this weekend - one race with 10 horses and one race with 12 horses. getting ready for the Festival of Racing. Staff Report. Renee Montgomery, Director of Casino Finance, reported: She has been in the casino industry for 24 years and has been at PM for twelve of those years. Her department is a cash handling department and is divided into two main departments Cash Operations and Gaming Revenue; Cash Operations works closely with guests cashing checks, paying out jackpots, etc. 2

3 Main Bank keeps the money and is responsible for taking and receiving money from120 banks throughout the facility. Hard and Soft Count collects money from 2,049 slot machines, 40 table games, and 11 poker tables, verifies the money against the machines, and takes the money to the Main Bank to either send to the bank or send back to the floor. Gaming Revenue audits all the paperwork from the facility, ensures Federal and State rules and regulations are followed, and recertifies 600+ employees annually on Title 31 (a Federal regulation). Action Item External Auditor for Ms. Willits said the Finance Committee met yesterday and the Audit Committee met by phone to discuss this; Deloitte is our audit firm now and it s time to renew the contract; Deloitte does our main audit and several other audits, it is the leading audit firm in the world, and we received a good price; the Finance Committee received and accepted the recommendation from the Audit Committee to continue with Deloitte. Mr. Helak, Chair of the Finance Committee, reaffirmed the recommendation. Mr. Rowen moved to approve Deloitte as our audit firm, the motion was seconded by Ms. Willits, and passed on a voice vote. President s Report. Mr. Palmer reported: June 6 is the Belmont and we could see a Triple Crown winner. July 3 fireworks. July 19 Camel, Zebra, Ostrich Races. There are jackets, with the names attached, on the table by the door for those who didn t receive one at the last meeting. Construction He s met with three of the five Polk County Supervisors and they are in favor of the remodeling of AJ s and TCE; he ll meet with the fourth Supervisor on Friday and then request to be on the Supervisors agenda in the next few weeks to ask for approval for the remodeling and the external auditor for Handed out a copy of the letter received from the IAHBPA with several items of concern; we have a five year contract with the Thoroughbreds and the Quarter Horses and some items of concern are in the signed Ancillary contract; staff meets bi-weekly with the horsemen; the only pressing item listed is food service for the Backside we closed the kitchen and put in vending machines, and are trying to get a food truck the food truck is trying to get a certificate of insurance and if they can t, we ll go to Plan B; the Executive Committee discussed the letter and if anyone has questions, please call Bob Myers or Gary. Mr. Helak asked about help is it the horsemen can t find qualified help or just can t find help and Mr. Palmer said the horsemen can t find help. Mr. Myers said the labor pool has dried up since we can t have illegals on the Backside; Mr. Peters has insight and the Board can also call him with questions; there may be some things PM can do and we will work on food as it is the major issue; this letter shouldn t have been sent to the Board. Committee Reports. Finance. Mr. Helak said the committee met on Tuesday and had a good discussion on the April financials the committee is pleased to see the trends in the top line; discussed the AJ s and TCE $3.1 million remodeling project; discussed and approved cancelling the $9 million revolving/reducing line of credit which will save us money we have a $10 million 3

4 line of credit for operations if we need to borrow money; discussed and supported continuing to retain Deloitte as our audit firm; there s nothing to report on the IRS audit. Facilities. Mr. Knapp said the committee met by a telephone conference call on April 28 and discussed the need to reconstruct the lobby and bar area of AJ s and a portion of TCE; it s a $3.15 million project; the committee approved moving forward with the project; a Board conference call was scheduled on May 1, the Board received information, and approved the project; there will be a tour of the areas after the Board Meeting. Audit. Ms. Willits said the report was covered earlier in today s meeting this committee meets quarterly. Human Resources. Mr. Hedberg said the committee did not meet. Grants. Mr. Peters said this committee did not meet. Other Business Executive Committee. Mr. Myers said the committee met today and the Board has heard most of what was discussed; the committee agenda is similar to the Board agenda, but it s a more in-depth discussion; Ms. Willits joined the committee meeting today and, to alleviate any misconception, we may rotate Board members and ask them to attend a meeting. The Executive Committee Agenda consisted of the Financials, Construction Update, and Other; under Other, the committee received information about the External Auditor recommendation, slot hold, entertainment, and the IAHBPA letter. Mr. Myers asked Mr. Palmer to discuss these items. o Mr. Palmer said in the beginning of PM, the Board philosophy was to keep the hold low to keep people here and play longer; traditionally, PM has the lowest hold in Iowa; staff wants to continue with that philosophy; with a high hold, money is spent faster and there s no enjoyment for the player. Mr. Knapp noted some properties are in the 9%-10% range and Mr. Palmer said some in Iowa are in the 11% range. o Mr. Palmer said we re always looking for new ways to bring people to PM two things we re looking at are: Fantasy Sports the bill died in the legislature this year, but it will come back; we formed a think tank committee to discuss how we can get people to come here to select their teams and then stay, watch the games, eat, play, etc.; how state could receive something; we want to be ready if/when this is approved; we have a space in mind. Entertainment we want to have something fun and exciting and the team is working on a way to get national entertainment here at a reasonable price; we ve been in contact with an Iowa company to help us with this and would pay them only when they produce; we would use the Finish Line Show Lounge on non-racing nights; we need to figure out the ROI before we sign a contract; we will keep the Board informed when we have the details. IHBPA letter we take the letter seriously; some of the items are not under the purview of PM; Security on the Backside is mandated by law; the letter is something we can look at and work with to improve things; the letter does not rise to a level of Board concern. Mr. Myers said the Board received a Schedule of Capital Improvements in the Board packet we ve talked about these items before and the schedule is updated yearly. Mr. Palmer said the schedule hasn t been handed out and he would like this to come out of the Facilities 4

5 Committee; it s a 10 Year Capital Improvement Plan and is updated according to the current time. Adjournment. Mr. Cooper moved to adjourn the meeting, the motion was seconded by Ms. Grandquist, and passed on a voice vote. There being no further business, the meeting adjourned at 2:45 p.m. Respectfully submitted, R. Michael Knapp, Its Secretary The tour of AJ s and TCE was conducted by Clay Willey, Director of Hospitality, and Dustin VandeWeerd, Director of Facilities. 5