Columbus, Georgia

MINUTES OF THE

BOARD OF TRUSTEES MEETING OF THE

COLUMBUS GEORGIA EMPLOYEES' PENSION PLAN



May 4, 2005





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

Plan was held May 4, 2005 at 2:00 P.M. in the Mayor?s Conference Room.





PRESIDING: Mayor Robert Poydasheff, Chairman



PRESENT: Isaiah Hugley, Angela Cole, Morton Harris, Franklyn Lambert,

Mary Strozier-Weaver, Dan Gray, Capt. John Starkey, and Joe Smith



ABSENT: Alan Rothschild, Jr.



GUESTS: Henry Swift, Vice President (Salomon Smith Barney), Richard

Swift, (Salomon Smith Barney), Denise Baxter, (Revenue Division), Pam Hodge,

(Finance Director?s Office) and Tom Barron, (Human Resources Department)







Mr. Dan Gray, Vice Chairman called the meeting to order. Julia Rasch,

Recording Secretary, gave the attendance.





MINUTES OF THE PREVIOUS MEETING:



The motion to accept the minutes from the April 13, 2005 meeting was made by

Mr. Franklyn Lambert and seconded by Mr. Joe Smith. The vote to accept the

minutes as submitted was unanimous.



Mayor Poydasheff and Mr. Hugley joined the meeting just before the start of the

Investment Update.





INVESTMENT UPDATE:



Mr. Swift addressed the board by asking if anyone had any questions regarding

the report that had been mailed to each of the board members. He pointed out

that the total portfolio was down about 1.5%. The index was down about 1.59%,

so a little ground was lost in the quarter ending in March, but it?s been very

difficult quarter all around for the managers.



The meeting in April was a late meeting because of spring break and various

activities like that, but looking at the chart, back on 4/12/05 at the last

meeting, the S&P 500 which is the proxy used for the equity market was about

1187. Since that time, until May 3, 2005, the market had declined to 1161 so

during this three or four week period the stock market had declined which will

be reflected in the assets of the fund.



The next chart is the 10 Year Treasury Bond which shows the bond market has

gone from 4.35% on April 12, 2005 to 4.18% on May 3, 2005, a definite decline

in the rates, which means that bond prices have gone up slightly.



The next report is the valuation report as of May 3, 2005. This shows the

status of the money managers at this particular time. The fixed income

managers were up slightly, 0.76%. The combined fixed account went from

$72,196,563 million to $72,746,832 million.



The growth managers were down slightly, -2.06%. They dropped from 26.5 million

dollars to 26.0 million dollars, lost about a half million dollars.



The value managers dropped a little more than the Growth managers, but down

slightly, -2.16%. Dropping from $38,458,621 million to $37,628,274 million.



The committee has replaced Eagle Asset in the growth category and replaced

Victory Capital in the Value space. All the paperwork has been signed and the

committee is going through the process of getting those two managers replaced

with two new managers.



The Core managers was down slightly also, -2.64%. The combined core account

dropped from $23,893,694 million to $23,261,815 million.



Lazard International, combined, went from $11.4 million to $11.2 million, down

-1.98%.



The bottom line is there was less than a 1% drop over this period of time in

the overall City Account which was due primarily to the decline in the equity

market.



A copy of the evaluation reports and the other information presented to the

board is retained by the Board Secretary in the Finance Director=s Office and

is available for review upon request.



One of the new managers that has been hired is Santa Barbara Asset Management a

Growth Manager. Mr. Swift suggested that the board members read the report that

Smith Barney has issued on them.



Last, Mr. Swift stated that with the knowledge and frustration over the

performance of the equities, he wanted to present an analysis of what would

have happened to the portfolio if the board had not gone to equities back in

June of 1987 but had decided to stay in bonds. The pension plan size in June

1987 was approximately $35-$40 million. If all the funds had remained in a

fixed income portfolio and the index that is use for the fixed income managers,

which is the Lehman Brothers Intermediate Government Corporate had been applied

to the $35 million from June of 1987 to December of 2004, the portfolio would

have grown to $123,992,305.



This figure does not include the withdrawals that the City has made over this

period of time to pay retiree benefits. Denise Baxter went back as far as 1999

to get the numbers for the withdrawals made by the City, which total

$13,766,586. If the ?known? withdrawals ($13,766,586) is subtracted from the

end result of $123,992,305, the net value is $110,225,719, which is what the

overall City pension fund would be worth today if the board had not elected to

go to equities. Which means the fund would be $59,774,281 worse off than where

it is today.





PRESENTATION:



There are two presentations, Lazard International and Synovus Securities. Mr.

Frank Sposato from Lazard International was introduced to the board and made

the first presentation.





The report agenda was as followed:



Investment Philosophy



Philosophy -



- Focus on those companies that are financially productive and inexpensively

valued

- Add value through stock selection and portfolio management



Objectives ?



- Outperform relevant benchmark over a full market cycle

- Preserve capital in falling markets

- Outperform our investment competitors

- Generate consistent results



Performance & Portfolio Composition



Market Performance ?

Sector Review ?

Performance Review ?



- Portfolio Composition as of April 30, 2005

- Statement of Changes 2004



The Return To Fundamentals



- Changing Phases from 1998 to the Present



Parallels to 1994



Relative Performance of Profitable vs. Unprofitable Companies

Relative Value Outperforms Over the Long-Term

Finding Value Among Larger Stocks



Portfolio Characteristics



Small Cap market Performance

Lazard International Small Cap Portfolio by Country

Lazard International Small Cap Portfolio by Sector

Lazard International Small Cap Equity Portfolio vs. MSCI EAFE Small Cap

Index

Holdings By Country



Mr. Sposato was thanked for his presentation and with no further questions, was

dismissed from the meeting.



The next presentation was made by Ms. Megan L. Busby, VFA, CFP from Synovus

Investment Advisors, Inc.



Performance History



Income and Expenses



Unrealized Gains and Losses



Purchases and Sales



Fixed Income Holdings



Fixed Income Strategy





OLD BUSINESS:



New Manager Search Update:



Mr. Joe Smith advised the board that one of the managers that is under review

to be replaced is National Asset Management. He also advised the board that

the National Asset Management Investment team that was being used was being

replaced by another Invesco team.



The transaction has not been completed as of the date of this meeting, but

under these circumstances Mr. Smith made recommendation to the board that the

funds in this portfolio be transferred to Trusco on a temporary basis until a

new investment manager can be selected and the funds then be transferred to the

manager.



Mr. Swift explained that he has spoken with Trusco about this and they are

willing to take the money until a new manager is found and the monies can be

moved to the new manager.



Following several minutes of discussion, Mr. Smith made the motion to move the

funds from National Asset Management to Trusco Capital on a temporary basis.

Mr. Harris seconded the motion.



The board voted to move the funds from the National Asset Manager to Trusco

Capital on a temporary basis until a new Core Manager is found to replace

National Asset Management.





NEW BUSINESS:



Mr. Tom Barron reported that the Columbus Metropolitan Airport have twelve

employees that they designate as Public Safety Officers. They are involved in

a combination job that is security, law enforcement, and fire fighting. The

Columbus Airport Administration would like to move those individuals into the

public safety pension plan. William M. Mercer has evaluated the cost of that

migration, $121,000, for them and they are willing to pay the cost and want to

make that transfer.



Ms. Cole explained that in the information that Mercer has outlined, they are

basically spreading out their cost over 20 years. Ms. Cole and Mr. Barron both

agree that the funds should be paid up front and not over a 20 year period to

time.



Ms. Cole is to check out the proposal and the issue will be discussed at next

month?s meeting.



With no further business for discussion, the motion was tendered for

adjournment.



The next meeting is scheduled for June 2, 2005 at 2:00 p.m. in the Mayor=s

Conference Room. There will be presentation at the June meeting.



_____________________________

Julia A. Rasch

Recording Secretary