Monthly Meeting of the Prairie Meadows Board of Directors November 18, :00 p.m.

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1 Monthly Meeting of the Prairie Meadows Board of Directors November 18, :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 2:10 p.m. Roll Call. Mark Cooper Diana Ewing E. J. Giovannetti Linda Grandquist Mark Hedberg Michael Knapp 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 Karen Novak Swalwell Lisa Moody-Tunks arrived during 2016 Budget Martha Willits Gene Meyer 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. Rowen to approve the Minutes of the monthly meeting of the Prairie Meadows Board of Directors held on October 28, 2015, as written. The motion was seconded by Mr. Cooper and passed on a voice vote. Public Comment. None Announce Appointments to the Board from Polk County and the Taxpayers Association. Mr. Myers reported that Polk County reappointed Martha Willits and the Taxpayers Association reappointed E. J. Giovannetti. Action Item Recommendation from the At-Large Committee and election for two (2) At-Large Members. Ms. Grandquist said the committee met a few weeks ago and requested Mr. Rowen make the report. Mr. Rowen said the committee interviewed three applicants for the two open positions (Paul Rogness for a second term and he is completing his last term); the candidates were Paul Rogness, Kurt Rasmussen, and Jason Shanks; the interviews were short; the committee unamimously voted to recommend Paul Rogness be reappointed and Kurt Rasmussen be the new At-Large member. Mr. Rowen moved the Board accept Paul Rogness and Kurt Rasmussen for the two At-Large positions; the motion was seconded by Ms. Grandquist, and passed on a voice vote. Mr. Hedberg said Mr. Shanks was a good candidate and we should encourage him to reapply next year. 1

2 Financials. Mr. Wessels reviewed the October 2015 YTD financials: Net Revenue above plan 3.9%; Total Expenses below plan 2.7%; and Net Income before Community Betterment above plan 52.6%; the 2015 budget factored in the opening of Jefferson and the exit closure and neither has had the impact we had anticipated - Jefferson s impact was predicted to be 5-5½% and it is in the 1-1½% range. Licensee Comparisons Property Net Win 2014 vs Slot Hold YTD PMRC -.3% 7.99% Council Bluffs Market -2.2% n/a (Horseshoe, Harrah s and Ameristar) Horseshoe/Harrah s n/a 10.76% / 10.47% Ameristar n/a 9.61% Lakeside n/a 9.66% Jefferson n/a 8.11% State as a whole +2.4% n/a State as a whole removing Sioux City and Jefferson +0.2% n/a Hotel Occupancy PM vs. Market DM Market Competitive Set October YTD 76% 66% 72% Performance Goals October 2014 Year-to-Date Exceeds/Below Plan Casino Revenue +2.0% Total Revenue +2.9% Net Revenue +3.9% Operating Expenses +4.3% Lobbyist Report. Troy Skinner handed out and reviewed the Legislative Update, dated November 2015, noting Linda Upmeyer is the first female Speaker of the Iowa House and Zach Nunn was elected as the Assistant Leader. Fantasy Sports Iowa is one of five states where fantasy sports is not legal; New York wants to outlaw fantasy sports; we will continue to watch this. Timetable for this Session it s a 100 day session, but will most likely run longer. The Gambling Casino Restricted License Study notes this is for a smoke-free casino in Cedar Rapids - no action was taken. 2

3 Action Item Lobbyist for Mr. Myers recommends retaining Troy Skinner for 2016; the 2015 contract was $77,250.00, and he s recommending a 3% increase to $79, for Mr. Rowen moved to retain Mr. Skinner at $79,567.50, the motion was seconded by Ms. Ewing, and passed on a voice vote. Action Item 2016 Budget. Mr. Wessels noted the budget was ed to the Board and he reviewed the highlights of the budget the budget shows a net revenue growth of 2.1% over 2015 and a casino operations growth of 2% over 2015; Jefferson opened in July and we won t have a year over year comparison until July; TCE construction goes into February 2016; increase of 3.8% in Wages and Benefits; Health insurance increase of 5.0%; Purses and supplements are based on forecasted 2015 gaming revenues and are expected to decrease $0.1 million; Marketing and promotional expenses are expected to increase $0.5 million and the remaining operating expenses are expected to increase $0.7 million due to additional new slot machine leases and upgrades and contract services; contractual contributions are projected to increase $0.4 million due to increased gaming revenues; discretionary board contributions total $1.1 million; Legacy and Community Betterment Grants are not in the 2016 budget the decision will be made after the audit is completed, along with deciding on a maintenance reserve and a reserve for upcoming projects; the Finance Committee has reviewed the 2016 budget a couple of times. Mr. Knapp moved approval of the 2016 Budget, the motion was seconded by Mr. Peters, and passed on a Roll Call Vote (13 yes, 0 no). President s Report. Mr. Palmer reported: KIOA radio held a RadioThon at Prairie Meadows on Veterans Day, Vets for Valor, to raise money for the American Legion; sponsors were the American Legion, Community Choice Credit Union, KIOA, and Prairie Meadows; the RadioThon raised $20,000 last year and $61,000 this year; radio guests included Governor Branstad and Senator Grassley; KIOA did a wonderful job and is making plans to hold the RadioThon at Prairie Meadows again next year; Prairie Meadows offered veterans a free breakfast from 7:00 a.m. 11:00 a.m. The December 16 Board Meeting will start at 3:00 p.m., followed by dinner in The Café social hour at 5:00 p.m. and dinner at 6:00 p.m. Thanksgiving Buffet is open from 9:00 a.m. 10:00 p.m. and the price is $23.95; AJ s will be open from 11:00 a.m. 8:00 p.m. December 2 The Buckinghams and The Grass Roots concert. December 12 Frank Fritz from the American Pickers will be here. Committee Reports. Finance. Mr. Helak said the committee met on Monday and reviewed the financial results (revenue is up and expenses are down) and the 2016 Budget (Mr. Wessels scheduled a time to meet with Board members and answer questions about the budget); assessed the adequacy of the Charter and determined there are no recommended changes; reviewed the performance of the committee and determined it is on track to meet the criteria in the Charter; discussed the YMCA and recommended Mr. Palmer get a formal update. o Mr. Hedberg is disappointed not to be told why the pool is not getting done and that we had to read about it in the newspaper; this was also discussed in the Executive 3

4 Committee meeting and he has a motion for the Board to consider For the reason that Prairie Meadows was induced to make a pledge of $1,000,001 to the Des Moines YMCA in exchange for naming rights on the swimming pool, and the swimming pool has not been built to date and it is uncertain whether it will ever be built, I move that we suspend our annual $200,000 pledge installment until such time as we receive satisfactory evidence from representatives of the YMCA that the swimming pool will be built and, if so, when. The motion was seconded by Mr. Peters and passed on a Roll Call vote (13 yes, 0 no), after the following discussion. Mr. Knapp said it would be appropriate to hear from the Y; Mr. Helak said that is the thought of the Finance Committee; Mr. Hedberg understands stumbling blocks, but we need an explanation and we need to be pro-active. Mr. Helak asked if there were any restriction to the donation and Mr. Flynn said PM would have naming rights to the pool, and if there s a breach and there s no pool, PM could suspend payment until the pool is built. Mr. Helak said we need an explanation, not conclusions from a newspaper article; Mr. Myers said the vote is to suspend payment until our concerns are adequately satisfied we ve made two $200,000 payments. Mr. Rogness noted Grants has rules and requirements and we abide by them sometimes we ve taken the money back. Mr. Hedberg just wants to pressure the Y for an explanation; suspending the payment shouldn t stop the project; it s a great facility and staff is friendly and courteous; the article didn t explain anything; the Y wants to sell US Citizenships they get a green card and a Y membership. Mr. Rowen noted this is outside of a normal Legacy Grant; Mr. Hedberg said the motion is to suspend payment and we can take action later. Mr. Knapp said the support is based on construction for the Y and we were asked about naming rights to the pool for $1,000,001 we bargained for naming rights; they owe us an explanation and we want to continue to support the Y it is a great project. Mr. Hedberg said the check is due December 1 and he d like someone to come to the January meeting and explain what s going on. Mr. Knapp said there s been an increase in membership; Mr. Helak said it s a great project, but there is a funding shortfall. Mr. Giovannetti said this was discussed in the Finance Committee meeting he would like the Executive, Finance, or Grants Committee to put in place a policy using the Grants Committee process consider adopting a policy for all money given out, whether its grants or outside of grants, going forward. Ms. Ewing said this is a good project, but they re not building the pool and the Board needs to further discuss this. Mr. Rowen called to question and the Board voted on the motion. Facilities. Mr. Knapp reported the committee met on Monday o Mr. VandeWeerd, Director of Facilites, gave the committee an update on AJ s and TCE the projects are going well and are ahead of schedule and are on budget; AJ s will open this Friday, a week earlier than planned; the committee toured AJ s it is a nice, updated area and fits well with the casino and hotel look. They are making great progress in TCE. 4

5 o The committee discussed the Track Remodel - it includes refinishing the hallway by AJ s, reconfigure the restrooms by AJ s and update the restrooms by the track doors, and update Hop s Lounge; the Facilities Committee thinks this is a good idea; the Committee recommends doing a RFQ so it doesn t look like Weitz gets all our business Mr. VandeWeerd will send out the RFQ with a short return time. o Convention Center Remodel is in the 10 Year Plan after several attempts, staff came up with a plan they think will work; work starts in December 2017 and runs through September 2018; construction will be done in three phases as we want to keep some of the area open and available to sell; Phase 1, November 2017 January 2018 will be the main casino entrance hallway to the Events Center; Phase II, June July 2018 will be the Skinner Ballroom, The Meadows entrance, and the pre-function corridor; Phase III, July-September 2018 will be the Bishop Ballroom and The Meadows common; there s no design yet, but it will mostly be cosmetic work (carpet, paint, vinyl); it s a $6 million project and the timeframe is close to the end of the lease and it will be hard to borrow money, so we ll need to set aside funds. Mr. Helak asked if the plan is the least disruptive template and Mr. VandeWeerd said yes, and Mr. Willey, Director of Hospitality, was involved in the planning the phases - he reviewed what was already on the books and worked around those events. Mr. Palmer said this remodel will be a logical nightmare, we don t want to interrupt business, but it needs the remodeling needs to be done 2018 is probably the latest we should do the project; we ll use the Sales staff during Racing and will encourage them to take vacation. Mr. Myers asked the approval process, finances, and budget and Mr. Palmer said it s a $6 million project, the area is 58,000 sq. ft.; we ll be close to the end of the lease and we need to plan and save for this project; there are a lot of moving parts and we need to start planning two years in advance; this is not major construction, it s just cosmetic work (wallpaper, carpet, vinyl, millwork) along with some electrical work in the Ballroom; we ll keep the existing partitions to save on costs. o They re working on the new Tote Board this week. Audit. Ms. Willits said the committee did not meet. Human Resources. Mr. Hedberg said the committee did not meet. Grants. Mr. Peters said the committee did not meet. Executive. Mr. Myers said the committee covered all the items on the Board Agenda; Ms. Moody-Tunks was the guest; and there was a lengthy discussion regarding the Y. Other. Wreaths Over America. Mr. Palmer noted Prairie Meadows and Casey s have supplied wreaths for the Iowa Military Cemetery in Van Meter for several years; Mr. Knapp and Mr. Kenyon donated the land; the price is going up every year due to more deaths and we ve asked them to find other sponsors to help; it s 100 acres with 80,000 lots they re at 29,000 lots now and with 5

6 50% of the veterans being cremated, there will be more lots available. Mr. Myers said this program goes across the US and it s gaining momentum; the wreaths are not cheap and Prairie Meadows and Casey s needs help to keep this going. Recognition for Retiring Board Member John Rowen. Mr. Myers presented Mr. Rowen with a token of appreciation for his service on the Board and dedication to PM. Mr. Rowen appreciates the gift and said he s had a blast serving on the Board - when he started, there was no hotel or Fishbowl there s been a lot of remodeling and construction during his six years; the 10 Year Plan has undergone several changes; he loves horse racing and was here on Opening Day; wished the Board well with the lease and charitables; he s learned a lot; thanked Mr. Palmer and staff it s a great team. Closed Session Evaluate Gary Palmer s Job Performance, Iowa Code 21.5(1)i. Ms. Grandquist moved to go into a Closed session under Iowa Code 21.5(1)i to evaluate Mr. Palmer s Job Performance, the motion was seconded by Mr. Cooper, and passed on a voice vote after Mr. Palmer requested a Closed Session. The Board went into a Closed Session at 3:10 p.m. Open Session. Mr. Rowen moved to go back into an Open Session at 3:54 p.m., the motion was seconded by Ms. Grandquist, and passed on a voice vote. Adjournment. Mr. Cooper moved to adjourn the meeting, the motion was seconded by several Board members, and passed on a voice vote. There being no further business, the meeting adjourned at 3:55 p.m. Respectfully submitted, R. Michael Knapp, Its Secretary 6