The meeting was called to order by Chairman John Edwards at 12:20 p.m. Roll call was taken and quorum was confirmed.

After introduction of new Board members, the minutes of the Board of Trustees meeting on June 23, 2004 were approved by consensus, and the minutes of the Executive Committee meeting on November 3, 2004 were presented for the members’ review.

FY 2004 Financial Audit Report
Mr. White, the Authority’s Treasurer, introduced Phil Windschitl and Ethan Cook of Foti, Flynn, Lowen & Co., who presented their firm’s audit of the Authority’s FY 2004 financial records. A significant change in the audit report for FY 2004 was the determination that Roanoke Higher Education Center, Inc. (RHEC, Inc.) qualifies as a foundation/component unit of the Authority according to GASB 39. As a result, RHEC, Inc.’s audited financial statements are included discretely with the Authority’s for the first time.

Mr. Windschitl and Mr. Cook reported that, in the auditors’ unqualified opinion, the Authority’s financial statements for FY 2004 fairly represent the Authority’s financial position. The audit disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.

In the audit report, the auditors noted no matters involving the internal control over financial reporting and its operation that they consider to be material weaknesses. However, the auditors presented a letter to management suggesting opportunities for strengthening internal controls and operating efficiency, specifically recommending:

1.) Accounts payable be recorded by Authority personnel prior to audit of the financial statements.

2.) A section specifically addressing ethical behavior and business practices be added to the Authority’s employee handbook.

Board members were encouraged to refer to the Management Discussion and Analysis section of the audit for the Authority’s management analysis of the financial statements.

Mr. White moved to receive the FY 2004 audit report and Mr. Dalhouse seconded the motion. The motion passed by unanimous vote.

Mr. White gave the financial report as represented on the attached financial statements prepared through October 2004.

Personnel Policies
On behalf of the Board’s Personnel Committee, Mr. Lanford recommended to the Board for its approval a Business Ethics policy which had been developed in response to the auditors’ recommendation mentioned above. After some discussion, the Board approved the policy by unanimous vote. The policy will be added to the Authority’s Employee Handbook.

Procurement Policies
During the above discussion, the question was raised concerning the Authority’s procurement policies. The Authority, as a political subdivision, is subject to the Virginia Public Procurement Act, but not to the state’s procurement policies and procedures. The Authority’s Board has adopted procurement policies in conformity with the VPPA.

In November, the Board’s Executive Committee approved procurement of the Center’s custodial contract by competitive negotiation rather than low bid, competitive sealed bidding. This is similar to the procurement policy approved previously for the Center’s security contract.

Roanoke Higher Education Center, Inc. Board of Directors
Dr. McKeon explained that the Roanoke Higher Education Authority Board of Trustees appoints the Board of Directors of the Roanoke Higher Education Center, Inc. annually. For continuity sake, he suggested that the current RHEC, Inc. Board consisting of the following five members be reappointed: John Edwards, David Burdette, Stan Lanford, Jr., Wayne Markert and Tom McKeon. Mr. White so moved, Mr. Dalhouse seconded the motion, and the motion carried by unanimous vote.

Executive Director’s Report

Water Intrusion Remedies and Funding:
Dr. McKeon reported on the staff’s efforts to solve the water intrusion situation which continues to cause problems for the Center staff and members. A four-part plan to redirect the water on the roof using a revised drainage system and drilling weep holes along the base of the roof parapets, sealing the porous brick exterior of the building with a waterproof sealant, and repairing interior damage is estimated to cost $282,900. In November, the Board’s Executive Committee approved obtaining a loan to pay for the work to begin without delay. A line of credit for $283,000 has been obtained from Wachovia Bank, a contractor has been procured, and work has begun on cleaning and sealing the brick.

Meanwhile, the Authority has requested emergency funding in the amount of $282,900 be included in the Governor’s budget amendment for consideration by the 2005 General Assembly to cover the cost of the water intrusion remedies. The Secretary of Education approved and forwarded the request to the Governor.

A separate request was submitted to the Secretary of Education for $200,000 in additional ongoing operating funds for FY 2006. The Secretary did not endorse this request.

Library:
Usage of the Center’s library and demand for its services continues to increase. While there are rare times when the library must close due to staffing situations, the library is committed to meeting the demand for its services as much as funding and staffing will allow.

First Street Development Project:
The project to acquire and renovate additional buildings on First Street for the culinary arts program proposed by Virginia Intermont College is in the fundraising stage. Several grant proposals have been submitted. Two foundations have denied the Authority’s requests for this year’s grant cycle; others will make their determinations before the end of the year. The City of Roanoke will consider making a Community Development Block Grant in the amount of $300,000.

Dr. Greiner, president of Virginia Intermont College, reported that bringing the culinary arts program to the Roanoke Valley is Virginia Intermont’s highest priority and best opportunity for expansion of the program. The program as it currently exists is self-supporting. The academic aspects have been separated from the operational aspects with respect to management and funding.

Art Museum of Western Virginia Education Program:
Dr. McKeon and Center members are collaborating with the Art Museum to develop summer institutes to train teachers to more effectively use visual materials to teach subjects across the curriculum. Board members expressed apprecation for the Center’s involvement in efforts to enhance the educational impact of the arts community in the Roanoke and New River Valleys

WiFi Project:
Staff IT personnel have been intensely involved in the City of Roanoke’s and Downtown Roanoke Inc.’s expansion of wireless internet connectivity in downtown Roanoke to include Elmwood Park, kiosks in the Market Building and the Convention and Visitors Center. IT staff also supplied technical assistance to the Greenfield Center in Botetourt County regarding its wireless system.

Equipment Trust Fund:
The Authority has been allocated approximately $55,000 from the 2004-2005 Higher Education Equipment Trust Fund for purchases of technology hardware in support of the Center’s education programs.

Virginia Western Community College’s Biotechnology Program:
Virginia Western Community College, in partnership with Novozymes, the Roanoke Higher Education Center and Blue Ridge Technology Academy, has developed a biotechnology certificate program to train workers in the manufacturing dimension of the biotechnology industry. The program will use the laboratory on the first floor of the Center, shared with the Blue Ridge Technology Academy.

New Initiatives:
Under the direction of its new director, Jackie Scruggs, Ferrum College began offering courses at the Center in August 2004 in Business Administration and Criminal Justice.

Susan Short, director of Virginia Tech’s Roanoke Center, announced that she is collaborating with other Center members to develop programs of special interest to people who are age 55 years and older. Also, Virginia Tech and the Hotel Roanoke will be planning a celebration in 2005 of the hotel’s 10th anniversary of its renovation and re-opening.

Virginia Results:
The Authority’s strategic plan and performance measures are available to the public via the state’s Virginia Results website. A copy of the Authority’s Virginia Results report was made available to Board members. Dr. McKeon invited the members to review the report and make comments and/or recommendations.

Center’s 5th Anniversary:
In August 2005, the Center will celebrate the fifth anniversary of its opening. Dr. McKeon plans to produce a high quality, glossy, multi-color Annual Report to help commemorate the event and welcomes suggestions and comments. Ms. Zomparelli recommended that articulation of the Center’s vision for the future be included along with a report of the Center’s past five years.

Chairman Edwards announced that the next meeting of the Board will be held on June 22, 2005.

There being no further business, the meeting was adjourned at 1:25 p.m.

Respectfully submitted,

Secretary