Paperwork procrastination kept problems from being discovered

Prescott, AZ - June 22, 2011 - The Yavapai County Farm & Agriculture Association has delayed completing numerous reports that might have brought financial issues at the Yavapai Downs horse racing track to light much earlier.

For example, the association apparently has no state racing permit from the Arizona Department of Racing, which requires financial reviews before the Racing Commission grants three-year racing permits.

The Yavapai County Fair Association applied for a racing permit renewal from the Arizona Department of Racing in August 2009, according to documents the Department of Racing provided to The Daily Courier.

But the Fair Board already had handed over all its assets to the new Yavapai County Farm & Agriculture Association in June 2009, including the racetrack facilities, so the track could get a new federal loan.

The Department of Racing concluded in September 2009 that the application was complete.

But then a month later, the department sent a request for dozens more documents, including tax returns, financial statements, business plans, revenue forecasts, debt obligations and a description of the track's competitive environment. The letter was addressed to Gary Spiker, then the track general manager.

The letter also asked if the track had followed the recommendations listed in a 2007 report from a Department of Racing contractor involved in the last permit renewal process. That was the most recent comprehensive state review of the track, based on information the track provided in 2006.

The letter asked for information about the new Yavapai County Farm & Ag Association that indicated the agency was unsure whether the Farm & Ag Association would be owning and operating the track.

A year later in October 2010, the department sent Yavapai County Farm & Ag Association Chair Jeff Wasowicz a reminder that the department still was waiting for most of the information it requested a year before. The letter gave Yavapai Downs a deadline of Dec. 6, 2010, to comply with the follow-up request.

That is the newest document the Department of Racing provided to The Daily Courier late Friday in response to the newspaper's request for documents relating to the permit application. Subsequent attempts to talk with Department of Racing officials about whether Yavapai Downs ever complied with the request were unsuccessful.

State racing permits remain in effect while the state requests more information about permittees. However, the permit that is in effect for Yavapai Downs apparently is registered with the former owner.

Department of Racing Director Lonny Powell has not responded to numerous requests for comment since May 25, when racetrack officials announced Yavapai Downs would not open this year for the first time since the summer-long meet began in 1960.

It is unclear to The Daily Courier whether the Department of Racing has ever conducted any background checks on the new Farm & Ag Association board or its current top employees.

Spiker, who quit the GM job in the fall of 2010, said he was unaware that the racing permit application had not been completed.

Wasowicz said he was unsure whether the Farm & Ag Association ever provided the documents that the state requested in the 2009 and 2010 letters.