Columbus, Georgia

MINUTES OF THE

BOARD OF TRUSTEES MEETING OF THE

COLUMBUS GEORGIA EMPLOYEES' PENSION PLAN



January 5, 2005





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

Plan was held January 5, 2005 at 2:00 P.M. in the Mayor?s Conference Room.





PRESIDING: Mayor Robert Poydasheff, Chairman



PRESENT: Isaiah Hugley, Angela Cole, Morton Harris, Jack Nowell, Mary

Strozier-Weaver, Alan Rothschild, Harvey Milner, Joe Smith, Jr., and Capt John

Starkey



ABSENT: Dan Gray



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

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

(Financial Division)









Mayor Poydasheff, Chairman called the meeting to order. The attendance was

taken by passing around the attendance and having everyone present check off

their name.





MINUTES OF THE PREVIOUS MEETING:



The minutes from the August, September, October and November meetings were

presented for approval. These minutes had been delayed due to the absence of

the recording secretary who has been on leave due to the illness of her

husband. A motion was made and seconded to approve the minutes as submitted.

The vote was ratified.





INVESTMENT UPDATE:



Mr. Richard Swift presented the interim report for the period from November 2,

2004 through the close of January 5, 2005. The stock market had a nice move

during that 60-day period going from 1130 to 1189. Next is the yield on the

Ten Year bonds, rates rose slightly from 407 to 428.



In the performance report the fixed managers, Synovus, First Union and Madison

went from a combined fixed of $72,790 to $72, 621, a decline of 0.23 basis

points. The growth managers, Eagle and Rittenhouse went from $25,949 to

$27,181, up 4.75%, a nice move for the growth managers. Pension Board Meeting





Value managers, Deutsche Asset and Victory went from a combined value of

$36,449 to $37,951 for a combined increase of 4.12%, a nice move also for the

value managers. The core managers, Trusco and National went from $23,492 to

$24,306, an increase of 3.46%. The international manager, Lazard, combined,

went from $95,523 to $100,845 a real nice increase of 7.28%.



Mr. Henry Swift addressed the board at this time. Back in September or

October, the board approved the change of the large cap growth international

portion of the mutual funds to an independently managed account. That action

was delayed until after December 15th because there was a large $140,000

capital gains distribution to the fund. After that distribution was captured

the shares of the fund were moved into an independently managed account. That

was done by actually taking the fiscal shares from the fund and simply

journeying them into the individual managed accounts. There was zero cost to

the city to do this and now there are two parts to that international account.

One is a large cap growth international individually managed account and the

other is about 1.5 million dollars in a small cap international fund.



Mr. Richard Swift resumed with his report. The combined equity ended with an

increase of 4.48% for the aforementioned period. The total city account was up

2.45%.



Mr. Smith asked how hard it would be to add a column showing the index against

which each manager is measured for the particular period that is being reported

upon. Mr. Swift responded that it could be done easily.



Mr. Henry Swift made note to the board that even though the stock market is

probably going to come in at 7% to 9% for the year, the bond market has not

done well and that is going to cause the fund to come in probably somewhere

around 5% to 6% for the fiscal year which is substantially below the actuarial

assumption, which presents a problem, especially for the Finance Director.



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

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

is available for review upon request.







PRESENTATION:



Mr. Vincent McNichols of Rittenhouse, who is here to present their annual

report, was introduced by Mr. Henry Swift.



The report followed the Agenda listed below:



Statement Of Purpose



Rittenhouse?s primary goal is to increase and protect the portfolio value over

time. This is accomplished by focusing on a time-tested philosophy of

concentrating on high-quality, large-capitalization, conservative growth

stocks. Over a full market cycle, they participate in rising markets while

avoiding the complete impact of down markets.



Investment Gains



A summary of the investment gain beginning with the initial investment in 1993,

showing the net contributions, net investments to date and the ending market

value as of 12/31/04.



Equity Analysis



Portfolio Characteristics (December 31, 2004)

Equity Sector Analysis (December 31, 2004)

Equity Portfolio Characteristics

Equity Analysis (November 30, 2004)

Top Ten Holdings (December 31, 2004)

Sector Performance (December 31, 2004)

Top Performers (December 31, 2004)



Portfolio Review and Outlook



Outlook: High Quality works long term

Rittenhouse portfolio trading at 10-year relative low valuations

Solid, steady growers will look more attractive as profits

slow

Portfolio Review: Asset Allocation

Portfolio Holdings



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

was dismissed from the meeting.







OLD BUSINESS:



a. Investment Policy Statement Signatures:



The last investment policy statement update was passed around so that the

Trustees could sign the signature page.



b. Investment Manager Search Update By Committee



Mr. Swift began by stating that the first thing to discussed is the

investigation into Synovus Securities, one of the fixed income managers. He

deferred to one of the members of that committee to report to the board. Mr.

Morton suggested that Mr. Swift report what the final results have been as a

result of the meetings by the sub-committee.



Mr. Swift began by stating that Synovus has been under performing for quite a

long time and as a result of their performance have been on the watch list.

The sub-committee has met with them and



discussed with them the under performance and the fact that they have not been

up par with the other managers nor with the index. Their under performance has

finally reached a point that some fairly drastic steps need to be taken by the

board. A sub-committee was formed to look into Synovus. The sub-committee met

with them again to discuss their performance and the consensus of the group was

that something different needs to be done with respect to Synovus Securities if

they are to continue as one of the fixed income managers. At the last meeting

with them, they brought in Mark Brown, the senior fixed income manager and head

of all fixed income investments. He made part of a presentation to the

committee about what was going on with Synovus. At the conclusion of that

meeting, the decision by the sub-committee was made that going forward, if

Synovus was to continue as a manager that Mark Brown would be the lead

portfolio manager for Synovus. Mr. Swift called Mr. Van Mallard, Len Sexton?s

boss to ask them to come back for another meeting. At this meeting they were

told the problems the board had with Synovus and the conditions of going

forward. Mr. Swift was advised that Mark Brown would be leaving Synovus and

therefore would not be available. The committee regrouped again to try to

decide what to do going forward. Synovus was asked to come back with their

people and explain how they planned to go forward. At that meeting Synovus,

told the committee that the account had been assigned to a lady named Megan

Busby who works for a different firm than Synovus Securities, Synovus Asset

Investment. She is going to work in tandem with Len Sexton on the account and

they are going to co-manage it, but she will be the person responsible for it.



Alan Rothschild stated that those were the statements of facts and his

understanding was that the recommendation was to give them a probationary

period of time that was perhaps a year because it?s a new group of people and

hopefully there will be a different level of attention than before. The

comment was made at both committee meetings that if the committee did not know

who was be discussed and saw the performance and had the presentations that

have been presented that the decision to reallocate the money would have been

made a long time ago.



Mayor Poydasheff stated that his personal feelings was to give them a year with

the proviso and it be sent to them in writing and a copy to Jimmy Blanchard so

that there is no question in their minds, no question in the minds of the

board, that they have one year to see what they can do, if they fall below

standards they will be terminated.



Morton Harris stated that in essence where they wound up and it was less than

unanimous, but the unanimity was not that no one was there saying that this

should be ignored. The discussion ranged from immediate termination to 2.5

years of probation. But because Synovus has been so involved, not only with

this plan, but involved with community activities that they didn?t want to put

the Council on the spot of coming forward with a recommendation that they be

summarily terminated so that somebody might say that we didn?t ?give them a

chance?. He feels that what is happening is they are being given a third

chance to try and come up with something so that we don?t embarrass the Council

or create any unnecessary enmity with the Synovus crowd.



Alan Rothschild stated that they haven?t carried their part of the bargain up

to this point and they have let the city pension group down. But it?s all new

people with a new commitment and everyone of us wants it to work, but there is

no way we would have extended this much road to anybody else in making our

recommendation.



Morton Harris moved that recommendation be carried.



Ms. Cole asked that one thing be added? At the end of two quarters, there

would be a review period during that period.



Henry Swift stated that he has asked Megan Busby, going back to October of ?04,

to present a monthly report on Synovus? performance and how the index

performed. It will be good to see every month how they?re doing and he will

send that report to the members of the sub-committee.



The Mayor asked that Angela get with Henry and compile the letter for his

signature and it will be presented to the board at the next meeting. When he

gets the letter he will send it out to all the board members and if he receives

no response, then he will proceed to send the letter to Synovus.



The vote was taken and ratified to accept the recommendations of the

sub-committee.



Mr. Swift continuing, stated that the Mayor had appointed another

sub-committee, Joe Smith as Chairman, Alan Rothschild, Angela Cole and Dan Gray

to look at some of the equity managers who have been behind the index. The

committee is in the process of conducting a search for a new value manager to

replace Victory Capital. Victory has been with the fund for about four years,

they have under performed, they have not done their job as they should and the

committee recommends they should seriously look at replacing them. The search

is being conducted; RFP?s are coming in from eight different managers. Those

will be sent to the committee members, it will be their charge to cut that

group down to about four and have them come in, make their presentations and

make a recommendation to replace Victory Capital.



Second is grave concern about Eagle Asset Management?s performance. They had a

good report for the last sixty days but nevertheless over the inception period

they have been some 600 to 700 basis points behind the index and that is simply

unsatisfactory. There will be a meeting on January 26, 2005 to narrow the

field down to a couple of managers from that meeting the sub-committee will

arrive at a replacement for Eagle if the decision is made at that point to

replace them. What probably will happen is a decision will be made on who is

the most likely candidate to hire and then look at the numbers that come in for

quarter ending in December. All the work will be done on who would be selected

and then make a decision if it?s time to terminate Eagle.



Third is concern for National Asset Management, a Core manager. The decision

was made to wait and see what the fourth quarter, 2004 shows in terms of

National and then to tackle the National problem once the value manager search

is completed and the growth manager is selected.

Mayor Poydasheff asked if it would be possible to transfer the assets from

Eagle to Rittenhouse? Some fee cost would be saved because Eagle?s fees are a

little higher than Rittenhouse. Mr. Swift stated that the reason that there

are two managers in every classification is purely for diversification, if one

manager does badly, that the other perhaps picks up the slack.







NEW BUSINESS:



None





With no further business for discussion, the meeting was adjourned.



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

Conference Room. The actuaries will be here for their annual report.









_____________________________

Julia A. Rasch

Recording Secretary