BANGOR – City officials met over the weekend to initiate steps to protect the city’s interests in regard to a proposed racetrack casino expected to be the first of its kind in Maine.

Topics of discussion included the ramifications of the imminent change of ownership for Bangor Historic Track Inc., the company that operates city-owned Bangor Raceway, and city revenue decreases that could result from emergency legislation proposed by Gov. John Baldacci.

LD 1820 would allow the state to collect millions more in administrative costs beginning in fiscal year 2004, based on a variable percentage determined each year by state financial officers.

“Our share erodes as the state’s goes up,” City Manager Edward Barrett noted in his brief recap of the law and some of its implications. As things stand, the city is slated to receive a percentage of the racino’s gross revenues based on a sliding scale.

In other practical matters, the governor’s proposal could lead to complications for area vendors and service providers, gaming and nongaming alike, seeking to do $10,000 or more in business with the racino by requiring licensing and fees, Barrett observed.

“I think that’s a potential issue for the business community,” Barrett said, noting that the requirement could affect such entities as the Bangor Water District, Bangor Hydro-Electric Co., local fuel companies and the city’s sewer department.

At the end of their three-hour session Saturday, two hours of which were spent discussing legal issues in executive session, city councilors authorized staff to hire a lobbyist to protect Bangor’s interests. The city must act quickly to that end, given the speed at which Baldacci’s emergency bill is making its way through the Legislature.

Hiring a lobbyist, a measure proposed by Councilor John Cashwell, is expected to cost about $150 an hour, unless the city works out a package deal.

In addition, City Manager Edward Barrett said that by Monday he would express the city’s concerns about the governor’s bill to Rep. Patricia Blanchette, a Bangor Democrat serving on the Legislature’s Legal and Veterans Affairs Committee.

As the result of an effort initiated by entrepreneur Shawn Scott and his development firm, Capital Seven LLC, city-owned Bangor Raceway is poised to become a racino, a multimillion-dollar entertainment complex that would combine harness racing with year-round entertainment, including up to 1,500 slot machines.

Scott began the process of acquiring Bangor Historic Track, the company that operates the city’s historic half-mile oval, more than a year ago, and completed the purchase last month.

Under pressure from the Maine Harness Racing Commission to meet licensing suitability requirements, Scott last week agreed to sell BHT for an undisclosed price to Penn National Gaming Inc., a Pennsylvania-based company that holds gaming licenses in seven states and Ontario.

The transfer of ownership is expected to be complete by Wednesday. Once that occurs, Penn National will submit an amendment racing license application reflecting its ownership of BHT, upon which the racing commission likely will grant a conditional license for 26 days of racing at Bangor in 2004. A permanent license and race dates will be issued if Penn passes the required background check.

The Penn purchase is predicated on its ability to obtain a racing license, as well as a development deal with the city of Bangor.

City Solicitor Norman Heitmann said last week that the city’s agreement with Capital Seven allows Scott to transfer its development rights to a third party. The city, he said, cannot unreasonably withhold those rights.

Maine voters approved slots for Bangor Raceway and Scarborough Downs during a statewide referendum Nov. 4. That legislation takes effect next month; however, alternate legislation crafted by the Baldacci administration could bring about stricter regulations, including the creation of a five-member gambling control board and tightened slots regulations. A public hearing on Baldacci’s bill was held last week and a work session is set for Wednesday.

While Bangor voters authorized slots in June, Scarborough Downs has been unable to obtain the necessary local approval after referendum elections in Scarborough, Saco and Westbrook by the Dec. 31 deadline. Its owner, Sharon Terry, is seeking a deadline extension as well as an expansion of the 5-mile radius within which she can relocate and develop a racino, under the current slots law.

The governor’s 39-page bill essentially would replace the 15 pages of legislation approved by voters in a November referendum that allowed slots at the state’s two harness racing tracks. It also would establish a gambling regulatory board with expanded powers to fine slot operators and revoke gambling licenses.

The original legislation provided 25 percent of the revenue from slot machines to the state, but state officials said the 1 percent dedicated to administrative costs didn’t begin to cover the state’s expenses.

The state’s Office of Fiscal and Program Review estimated that oversight of the new industry in fiscal year 2004 would cost the state more than $3 million, more than five times the amount provided in the original bill. The governor’s proposed bill does not change the amounts of slot revenues dedicated for other purposes, including 10 percent to the Fund for Healthy Maine and 7 percent to supplement harness racing purses.