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1 1 BEFORE THE 2 TEXAS RACING COMMISSION 3 AUSTIN, TEXAS 4 5 6 7 8 9 COMMISSION MEETING 10 MARCH 20, 2007 11 12 13 14 15 16 17 18 19 Reported by: SHERRI SANTMAN FISHER 20 Job #9-61909 21 22 23 24 25 2 1 BE IT REMEMBERED that the above entitled matter 2 came on for hearing on the 20th day of March, 2007, 3 beginning at 9:02 A.M. at 6100 Guadalupe, Building E, 4 First Floor Auditorium, Austin, Travis County, Texas, 5 and the following proceedings were reported by SHERRI 6 SANTMAN FISHER, Certified Shorthand Reporter for the 7 State of Texas. 8 9 10 APPEARANCES 11 12 Commissioners: R. DYKE ROGERS 13 MICHAEL G. RUTHERFORD 14 JESSE R. ADAMS 15 TREVA J. BOYD 16 G. KENT CARTER 17 CHARLES L. "SONNY" SOWELL 18 DAVID G. CABRALES 19 ERNEST ANGELO, JR. 20 JIMMY ARCHER 21 22 23 24 25 3 1 CHAIRMAN ROGERS: If we can call this to 2 order, please. 3 Ms. Giberson, would you call the roll? 4 MS. GIBERSON: Jesse Adams? 5 COMMISSIONER ADAMS: Here. 6 MS. GIBERSON: Treva Boyd? 7 COMMISSIONER BOYD: Here. 8 MS. GIBERSON: Dr. Kent Carter? 9 COMMISSIONER CARTER: Here. 10 MS. GIBERSON: Ernest Angelo? 11 MR. ANGELO: Here. 12 MS. GIBERSON: Mike Rutherford? Sonny 13 Sowell? 14 COMMISSIONER SOWELL: Here. 15 MS. GIBERSON: Jimmy Archer? 16 MR. ARCHER: Here. 17 MS. GIBERSON: David Cabrales? 18 COMMISSIONER CABRALES: Here. 19 MS. GIBERSON: Dyke Rogers? 20 CHAIRMAN ROGERS: Here. 21 Okay. There's a quorum present, so we 22 will begin. 23 Is this echoing out there as bad as it's 24 echoing up here? 25 MR. FENNER: We're going to keep an eye 4 1 on it here. I don't hear any echo out here. 2 CHAIRMAN ROGERS: It's coming back here 3 really strong. 4 COMMISSIONER SOWELL: It did a minute 5 ago. I think it quit. 6 CHAIRMAN ROGERS: Okay. Let the record 7 show that Commissioner Rutherford has arrived. 8 This is going to be a rather long meeting 9 today, or at least we anticipate one. We will be 10 breaking for lunch and we will take a couple of other 11 breaks as Commissioners request. So if you have a 12 reason to take a break, well, say so and we will -- 13 we'll do that at any time. 14 We'll begin today with public comment. 15 Is there anyone turned in a card for 16 public comment, Mr. Fenner? 17 MR. FENNER: Chairman Rogers, no one has 18 turned in a card for public comment that is not tied 19 directly to an agenda item; so it's your option whether 20 to delay that or to take it now. 21 CHAIRMAN ROGERS: Okay. No, we will -- 22 unless we have any legislators or other folks that need 23 to be leaving that want to make a public comment now, 24 we'll hold it until we get to the agenda item. 25 Okay. So we don't have? 5 1 Okay. We will begin with discussion, 2 consideration, and possible action on the following 3 matters: Budget and finance update. 4 Ms. Curtsinger? 5 MS. HARRIS-CURTSINGER: Good morning, 6 Commissioners. We are, as of January 31st, 41.67 7 percent through the fiscal year. Budgetary-wise, we 8 are on track with our budget, right where we expect to 9 be. And I would be happy to take any questions or 10 answer any questions if you have any. 11 CHAIRMAN ROGERS: The only question I had 12 really was about this cash flow statement that we 13 have. 14 MS. HARRIS-CURTSINGER: Yes, sir. 15 CHAIRMAN ROGERS: And we are showing 16 still in '07 the 358,000 short. 17 MS. HARRIS-CURTSINGER: That is correct. 18 CHAIRMAN ROGERS: Will that be 19 accommodated in this next fee round or -- 20 MS. HARRIS-CURTSINGER: With this fee 21 structure, it should be taken care of, yes. 22 CHAIRMAN ROGERS: Okay. So this is not 23 where we expect it to be after the fee structure. This 24 is before. 25 MS. HARRIS-CURTSINGER: This is before, 6 1 yes. That is correct. 2 CHAIRMAN ROGERS: Any other questions, 3 Commissioners? 4 Thank you. 5 MS. HARRIS-CURTSINGER: Thank you. 6 CHAIRMAN ROGERS: Okay. A report on 7 racetrack inspections. 8 Ms. Goscha? 9 MS. GOSCHA: Good morning, 10 Commissioners. I'm here on behalf of Mr. Neely who's 11 out of town this week. 12 In your packet you have the report on the 13 racetrack inspection activities. 14 CHAIRMAN ROGERS: Yes. It's under Tab 1, 15 the very back page of Tab 1. 16 MS. GOSCHA: 1-6 is what I show. 17 CHAIRMAN ROGERS: 1-6. It's hidden. 18 Go ahead, Ms. Goscha. 19 MS. GOSCHA: Thank you. 20 There are some unsatisfactory items 21 reported regarding pari-mutuel. Those are issues 22 related to ongoing ticket cancellations which will be 23 resolved with the new rule adoptions. 24 Regarding unsatisfactory veterinary 25 practices, at Valley, it's related to maintenance in 7 1 the kennels. Gulf Greyhound Park was resolved on 2 3-14. 3 Regarding the judges, it's related to 4 starting gate maintenance. And relating to 5 enforcement, that's from Manor Downs related to 6 security furnishing fingerprint persons. 7 All other issues have been resolved. 8 CHAIRMAN ROGERS: Any questions, 9 Commissioners? 10 Thank you, Ms. Goscha. 11 MS. GOSCHA: Thank you. 12 CHAIRMAN ROGERS: Okay. We will now move 13 to proceedings on racetracks, discussion, 14 consideration, and possible action on the following 15 matters: Approval of a change in ownership for Valley 16 Race Park. 17 Is there anybody here to testify on 18 that? 19 MR. VANMIDDLESWORTH: Yes, Your Honor. 20 CHAIRMAN ROGERS: I like that word. 21 MR. VANMIDDLESWORTH: It's habit. And I 22 hope you come to get used to it. 23 CHAIRMAN ROGERS: That's as good as it 24 gets. 25 MR. VANMIDDLESWORTH: All of you all are 8 1 Your Honors. I hope you'll excuse me for that 2 formality. I'll try to be less formal throughout the 3 rest of this. 4 I advised Mr. Fenner that we had not 5 completed a signed agreement. We have worked since the 6 meeting seven weeks ago to try to reach agreement. We 7 had further discussions with Mr. Fenner, with the 8 principals, in an attempt to reach an agreement on 9 revised sale terms that would address all of your 10 concerns and we had hoped to present that. 11 Unfortunately, we're not able to present 12 that today. We do not have a final agreement. And 13 accordingly, we're not asking you to take any action 14 today. I set forth that statement in a letter that I 15 was able to prepare last night and I'll distribute at 16 this point. 17 When I told Mr. Fenner, he appropriately 18 asked what does that mean for the other items on the 19 agenda; and I told him our view on that; and I've set 20 that out in this letter, which also includes a letter 21 from the Attorney General that was issued last night on 22 the interpretation of Article 6.06(h) of the Racing Act 23 that sets out the Attorney General's interpretation of 24 that act. It includes also -- which we incorporate and 25 adopt. 9 1 And let me make sure I have that 2 attachment with that, the letter from the Attorney 3 General. I'm sorry. I meant that to be attached, 4 along with a letter from Senator Ellis that was the 5 letter that precipitated the Attorney General letter 6 that came out last night. 7 I anticipate -- I understand that Senator 8 Ellis is forwarding that to the Commission's attention 9 himself for the Commission's consideration. But we did 10 not get it until last night. I got it late last 11 night. And I wanted to provide that to you and submit 12 it not only as the Attorney General's position on that 13 but as our position on that issue. And I think we'll 14 be talking about that at some length on the next agenda 15 item. 16 CHAIRMAN ROGERS: We probably will 17 because I think we're going to have to reach a decision 18 on whether this will actually affect your application 19 on this -- on the next part, whether you'll be eligible 20 for consideration or not. 21 I'm not real sure what's the proper way 22 for us to take a moment to read this because without -- 23 without having a little time to digest this, I'm not 24 sure exactly where we go here. 25 Mr. Fenner, do you have a suggestion? 10 1 MR. VANMIDDLESWORTH: I wish it had been 2 here earlier, but I just got it last night. 3 MR. FENNER: Chairman Rogers, I suggest 4 we just take a few minutes to read it. 5 CHAIRMAN ROGERS: Okay. We'll just -- 6 ladies and gentlemen, just take a minute and figure it 7 out. 8 There's not enough copies of the -- oh, 9 Senator Ellis. 10 (Discussion off the record) 11 CHAIRMAN ROGERS: Commissioners, shall 12 we -- are we close? Okay. 13 Mr. Fenner? 14 MR. FENNER: Chairman Rogers, the issue 15 that is contained within the letters, both from 16 Mr.
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