Columbus, Georgia

MINUTES

BOARD OF TRUSTEES

EMPLOYEES' PENSION PLAN



August 7, 2002





A meeting of the Board of Trustees for the Columbus Georgia Employees= Pension

Plan was held August 7, 2002 at 2:00 P.M. in the Mayor=s Conference Room.





PRESIDING: Mr. Dan Gray, Co-Chairperson



PRESENT: Carmen Cavezza, Kay G. Love, Morton Harris, Jack Nowell, Alan

Rothschild, Saundra Hunter, Michael Majure and Capt. John Starkey



ABSENT: Mayor Bobby G. Peters, and Mary Strozier-Weaver



GUESTS: Henry Swift (Salomon Smith Barney) and Denise Baxter, Investment

Officer (Revenue Division)







Mr. Dan Gray, Co-Chairperson, called the meeting to order and Julia Rasch, the

recording secretary, took the attendance.



As the first order of business a welcome was extended to the new board members,

Mr. Morton Harris, who is returning as a trustee, and Mr. Jack Nowell,

representative of the city retirees.





MINUTES OF THE PREVIOUS MEETING:



The motion was made by Saundra Hunter and seconded by Alan Rothschild that the

minutes from the May 1, 2002 meeting be accepted as submitted. The vote was

unanimous.





INVESTMENT UPDATE:



Mr. Swift began by telling the board members that the equities are at 49% and

the fixed income is at 51%. The board needs to consider rebalancing the

portfolio by shifting some funds from fixed to equities. Also a decision

should be made on whether to redistribute the assets amongst the managers to

keep it in balance with the requirements of the investment policy statement;

35% in value, 30% in growth, 25% in core an 10% in international. This balance

is not terribly out of line but could stand some adjustments.











Pension Board Meeting

August 7, 2002





Mr. Swift went through the report presenting a brief description of the

performance of each group of managers.



For the second quarter that just ended, the three fixed income managers had an

average return of 3.64% versus 3.55% for the index. Since inception their

average returns have been 6.7% versus 6.4% of the index, a good job in both

time periods.



The fixed income managers have been the source that has held the portfolio

together for the last two years and it has been tremendously beneficial to have

a high percent of the money with fixed income managers.



The quarter for the growth managers showed them down 15% with the Russell

Growth index being down 18% and since inception the ratio is 9.2% versus 8.9%

for the index. So overall the growth managers have had a really good

performance.



Next are the value managers. There is some concern for Victory Asset

Management who has only been with the fund for a year but their returns are

certainly lagging the index and warrant some watching. The combination of the

two managers show a return average of -8.2% versus -9.5% for the index and

since inception the average return is 11.54% versus 11.87%. Doing better than

the growth managers, but slightly behind the index.



Trusco Capital and National, the core managers, are where they would usually be

which is right between growth and value, coming in at a loss for the quarter

ending in June at 11% versus a loss of 13.5% on the index, since inception,

they?re at 11.14 versus 11% for the index.



Even though this has been a very difficult time for investments to be making

any positive returns, the managers are beating the index over time and doing it

fairly well over the quarter.



As for the international manager, those funds were down .62% versus down 2.12%

for the index and since they started which was in February 1998 the fund is

down 1.7% versus down 2.2% for the index.



Finally, the combined equity managers for the second quarter were down 10.3%

versus the index being down 12.1% beating the index nicely for the quarter.

Under the inception period they?re slightly behind the index with 10.7% versus

11.2%.



The last summary is a combination of the fixed income managers and the equity

managers. Remembering that this last quarter, the DOW was down 13%, the S&P

was down 15% and the NASDAQ was down 19%, one of the worst quarters in the

history of the market, third worst ever for the S&P and the absolute worst

since the NASDAQ started. During this quarter the portfolio was down just over

4% versus down 5.2% for the index. Mr. Swift stated that as hard as it is to

handle negative numbers, this is really a great number because there are other

portfolios that are down from 20% to 35% particularly if they were overloaded

in technology or telecom stocks. Going back to the beginning in 1993 the total

fund has returned 9.3% versus 9.1% for the index so the portfolio is slightly

ahead of the index over that nine-year period of time.



Pension Board Meeting

August 7, 2002





In response to a question by Mr. Gray, Mr. Swift stated that the value of the

fund was at $154 million as of the 6/30/02 but because of the drop in the

market in July it is currently at about $146 million.



Mr. Swift proceeded to explain to Mr. Nowell that in addition to the

performance evaluation as of June, the interim report is presented to bring the

board up to date as of close of business the night before the board meeting.

The fixed income manager accounts since the middle of July are actually up a

little less than 1% but all the equity managers are going to be down because

July has been such a horrendous month. The growth managers during this

one-month were down 1.3%, the value managers, down 3.8%, core managers, down 5%

and international manager, down 5%, so the fixed income and the equities,

combined were down 1.4%. This is during a time when the DOW, for instance, has

dropped 1,000 point. The hope is that the situation in the market is near the

bottom.



A copy of the performance synopsis and the valuation report are maintained by

the Board Secretary in the Finance Director=s Office and is available for

review upon request.



At this time a brief discussion ensued between Mr. Harris, Mr. Swift and Mr.

Majure regarding the asset allocation and the new law governing the equity

exposure percentage of 60%.



Next Mr. Swift presented the new proposed meeting calendar to the board for

approval. A motion was made Mr. Majure and seconded by Capt. Starkey to accept

the calendar as presented. The motion was approved unanimously.



Finally, Mr. Swift updated the board on the manager search process to replace

Campbell Newman. At the current time the committee is looking at three more

possibilities. Of the first three managers that were interviewed none

presented themselves to be the quality managers that the committee felt would

be profitable to the fund. Campbell Newman is aware that the board is not

happy with their performance that the committee is doing a search that could

lead to replacing them.



PRESENTATION:



Ms. Mary Brown and Mr. Burton Bartlett of Campbell Newman were introduced and

asked to make their annual report to the board of Trustees.



The report was presented in the following outline:



I Summary of Investment Results

Portfolio Reconciliation from 10/31/93 to 07/31/02

?Historical Performance as of 07/31/02

?Timely Sales











Pension Board Meeting

August 7, 2002





II Equity Review

Portfolio Characteristics

?Sector Weightings



III Outlook and Strategic Direction

Strategic Direction

?Emphasis on potential growth and valuation

?Focus on financial stability ? cash flow/balance sheet strength

?Expand number of holdings in greater number of industries for increased

diversification

?Measured buying and selling techniques

?Target prices for all stocks in the portfolio



Points For Strategy

?The firm and upgrades made by CNAM

?Improving performance on an absolute and relative basis

?Reinvestment of cash if the markets start to turn higher

?What attributes and fundamental characteristics the research team is reviewing



Foundation Of Investment Philosophy

?Investment in quality growth stocks, which have proven to be successful over

time.



IV Appraisal as of 07/31/02

?Summary of portfolio and the stocks currently held by CNAM



They were dismissed following their presentation.



The discussion was directed back to the Asset Allocation. At this time Ms.

Love stated that one consideration to be made is that a withdrawal of a million

dollars needs to be made to cover benefit expenses for the next two months and

that would affect the percentage depending on how and from whom the money is

taken. Discussions continued for several more minutes and then the motion was

made and seconded to move the money to bring the fixed and equities to 50/50

percent. Allow for the withdrawal that is needed to fund the expenses for the

next two months. Adjust the withdrawal in such a way to bring the value part

down a little and the growth up a little, closer in line. The vote was

unanimous.



OLD BUSINESS:



a. None









Pension Board Meeting

August 7, 2002





NEW BUSINESS:



a. None





There being no other business for discussion, the meeting was adjourned. The

next meeting will be September 4, 2002 and will be held in the Mayor=s

Conference Room.









________________________________

Julia A. Rasch, Recording Secretary