Columbus, Georgia

MINUTES

BOARD OF TRUSTEES

EMPLOYEES' PENSION PLAN

February 5, 2003



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

Plan was held February 5, 2003 at 2:00 P.M. in the Mayor?s Conference Room.



PRESIDING: Mayor Bob Poydasheff, Chairman



PRESENT: Carmen Cavezza, Kay Love, Jack Nowell, Mary Strozier-Weaver,

Dan Gray, Alan Rothschild, Jr., Saundra Hunter, Michael Majure, and Capt. John

Starkey



ABSENT: Morton Harris



GUESTS: Henry Swift (Robinson-Humphrey), Denise Baxter, Investment

Manager (CCG)







Mayor Bob Poydashef, Chairperson, called the meeting to order. Kay Love,

Secretary/Treasurer, gave the attendance.



MINUTES OF THE PREVIOUS MEETING:



The motion was made and seconded that the minutes from the January 8, 2002

meeting be accepted as submitted. The vote was unanimous.



INVESTMENT UPDATE:



Mr. Swift reminded the board that he had sent a lot of information to them, but

had felt that with what was happening in both the bond market and the stock

market in the quarter ending in December, that some backup data would be

helpful to clarify what had happened. The bond market with the Lehmann Bros.

High yield bond index was up 6.7%. Basically that meant that the lower quality

bonds during the quarter had the greatest rise in values. Because our

investment policy statement requires that all Bonds have an ?A? or better

rating, we did not participate in the rally in the high yield market during the

quarter. Consequently, all fixed income managers under performed their index

for the quarter. From time to time we will pay this price for requiring only

high quality bonds be bought in our portfolios, but over time quality

investment have been a excellent policy



As for the stock market, all the managers missed the benchmark with the

exception of the international manager. This under performance by the equity

managers was also due to the lower quality stocks being the best performers

during the quarter. It was the stocks rated C and D and those selling for less

than $5.00 per share that had the best performance for this period. Once

again, our investment policy statement calls for quality stocks and thus we did

not participate when the low

Pension Board Minutes

February 5, 2003





quality stocks did so well. Furthermore, during the fourth quarter the telecom

sector was up 35% and our equity managers had been avoiding this sector due to

its? very poor performance over the past few years.



Next, using charts, Mr. Swift showed the performance summary of all the

managers for the quarter ending 12/31/02. The fixed income managers combined

were up 1.13% versus the index at 1.69% and since inception the fixed income

managers have outperformed the index by 10 basis points.



The second item was Synovus Securities. Mr. Swift stated that as he had

indicated in the information previously sent to the board members there is

reason for concern with Synovus. During the past year Synovus was up 6.6%

compared to the Lehmann Bros. Govt/Corp the index against which they are

measured was up 9.8%, a 300 basis point difference. This is rarely, if ever,

seen but due to the volatility in the market it has been seen both in fixed

income and in equities, which causes a concern.



With this concern Mr. Swift stated that he has asked the Mayor to appoint a

sub-committee to evaluate why this year has been so bad.



The Mayor stated that there was real cause for concern not only with Synovus

but also National and Victory and was appointing a sub-committee to evaluate

the problem. Serving on the committee would be Henry Swift, Morton Harris,

Mike Majure and Kay Love. He stated that he would like for them to come to the

board in a month with a report.



Victory was hired about 18 months ago and has not performed well from the

beginning. For the last quarter they had roughly a 7% return versus 9.2% on

the index. What is more alarming is the last 12 months and since inception,

both show some 500 basis points behind the index. Mr. Swift stated he felt

that the board could not afford to let this go by and should step in and do

some diligent evaluations this manager.



National Asset Management was hired in September 2000 to be the other core

manager and has also had a rough time, not as bad as Victory, but still

somewhat of a concern. Each of these managers is on the watch list and will be

asked to come down for a meeting with the sub-committee. As a note of interest

National and Victory have already called and requested an audience.



The next chart depicted all the equity managers. The total equities were up

about 5.6% versus 7.6% on the composite. For the year, which was encouraging,

the equity managers were down less than the market. Since inception, when all

the managers were reconstructed, they were up 8.7% versus 9.0% for the

composite.



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

managers. It?s encouraging that since 6/30/93 there?s been a return of 8.3%

per year and in light of all the turmoil and problems not only in the stock

market but, also, in the world since inception, it?s really been a



Pension Board Minutes

February 5, 2003





good return versus an 8.39% return for the index which is probably acceptable

over that period of time.



A copy of the evaluation report is maintained by the Board Secretary in the

Finance Director=s Office and is available for review upon request.

PRESENTATION:

Mr. Fred Gaskin, Director and Mr. Jerry Thimme, Managing Director for Deutsche

Asset Management (Value) presented today?s report:



? Investment Process

? Conservative

? Risk Averse

? Value Oriented

? Contrarian Execution

? Market & Performance Review

? Investment Results

? Relative Performance as of 12/31/02

? Portfolio Structure

? Contrarian Value

Performance vs. Large Cap Value Style

Cumulative Performance

Historical Performance

Rolling 5 Year Annualized Performance

Performance in S&P Down Quarters

? US Contrarian Value Equity Composite

? Fourth Qtr. 2002 Commentary

? Fourth Quarter 2002 Market Overview

? Standard & Poor?s 500 Stock Index

Capital Appreciation: Calendar Years 1950-2002

? Bull and Bear Markets

? Past Crises

Pension Board Minutes

February 5, 2003







? The Economy

? Consumer Trends

? Short-term Interest Rates and Equities

? S&P 500 Stock Index: 1945-2002

? List Of Stock Owned Companies

? Portfolio Appraisal as of 12/31/02

This concluded their presentation; they were thanked by the board and

subsequently dismissed.



OLD BUSINESS: None





NEW BUSINESS: None



Mr. Swift said he would like to give an update on the balances in the account

as of 02/04/03. Referring a chart on the S&P 500 he explained the from January

7, 2003 the S&P 500 had dropped from 922.93 down to 848.20, a drop of 8.1% in

30 days. This indicating just how bad the stock market has been since the last

meeting. The next chart was a depiction of how the asset allocation stood as

of 12/31/02. Mr. Swift then reminded the board that at the last meeting it was

established that a process of moving monies over the next four months would

take place to rebalance the account in accordance with the investment policy

statement. The valuation of portfolio report as of 02/04/03 showed how the

monies were moved and redistributed on January 15, 2003 including the first

$500,000 that was given to the city to pay benefits. This process will be

repeated each month on the 15th for February, March and April. He stated that

due to the condition of the market at this time that this is a very

conservative way to accomplish this task.



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

meeting will be April 2, 2003 at 2:00 p.m. and will be held in the Mayor=s

Conference Room.







_______________________

Julia A. Rasch,

Recording Secretary