Columbus, Georgia

MINUTES OF THE

BOARD OF TRUSTEES MEETING OF THE

COLUMBUS GEORGIA EMPLOYEES' PENSION PLAN



August 4, 2004





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

Plan was held August 4, 2004 at 2:00 P.M. in the Mayor?s Conference Room.





PRESIDING: Morton Harris, Trustee



PRESENT: Angela Cole, Morton Harris, Jack Nowell, Mary Strozier-Weaver,

Alan Rothschild, Harvey Milner and Joe Smith



ABSENT: Mayor Robert Poydasheff, Carmen Cavezza, Dan Gray, and Capt John

Starkey



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

Swift, (Salomon Smith Barney), Mike Reed (Columbus Water Works), Denise Baxter

(Revenue Division), Joe Riddle (Financial Planning Division)









Mr. Morton Harris, Trustee, called the meeting to order. Julia Rasch,

Recording Secretary, gave the attendance.





MINUTES OF THE PREVIOUS MEETING:



A motion was made and the board voted unanimously to accept the minutes from

the July14, 2004 as submitted.





INVESTMENT UPDATE:



Mr. Henry Swift stated that he wanted to go over the Asset Allocation briefly.

At the end of June there was 168 million dollars in the total fund. In cash

there is 7% which 95% of that belongs to the fixed income managers, if the cash

is added to the fixed income the equities are at about 43%, if the

international is added to the domestic equities the total is about 57%. That

puts it a little bit over the usual asset allocation of 55/45, however, by the

time the meeting is over and Richard gives his report on what has happened in

the month of July the equities will have come down in the month of July and

fixed has gone up a little bit. Therefore no asset allocation changes need to

be made at this time. By the next meeting the board will probably need to

reevaluate the asset allocation.



Next he handed out some material to back up his effort to explain why the

equity managers under performed their indexes for the last 12 months. Included

in this material was an excerpt from the investment policy statement that

demonstrates that the managers are asked to primarily invest in large cap

stocks. This was followed with several graphs showing the comparison between

high quality stocks and low quality stocks. Beginning on page one, the

investment policy statement states that the largest percentages of each

portfolio should be in the large cap companies, that?s been the philosophy

since day one and when the large cap stocks are out of favor obviously, the

fund is going to be hurt on a relative basis to the index. The next page is a

graph that shows the returns to risk ratio for various quality of stocks. What

is shown here is that the stocks that are rated A+, A and A- have had

substantially better returns since 1986 to 2003 than the lower quality stocks

when it comes to looking at returns to risk ratio. So over time, the important

message is that with the investment policy statement, we are postured properly

because we are postured in large cap, low risk stocks. But when they are out

of favor, it definitely has an impact on the comparisons with the index.



The next page shows the P/E ratio on the ?A? rated stocks, at the end of the

second quarter of 2004. The P/E ratio on the ?A? stocks, the P/E ratio on the

?B? stocks and on the ?C? and where all the money has been going for the last

year is in the ?C? stocks, because those were the stocks that got killed the

worse in the bear market so that?s where people went to, first, coming out of

the recession was into the ?C? rated stocks and they are the ones that have

performed the best. The problem is that as of right now they are probably the

least comparing stocks to own because they?ve done so well and their P/E?s have

gone up so much.



The next page shows the best performing large-cap stocks during the first six

months of 2004. Stocks like Biogen with a total return of 72.3% and a ?C?

rating is a big winner, Yahoo, total return of 61.7% not rated, Ebay, a return

of 42.3% not rated. The point is that the stocks that have been doing the best

are not the stocks, generally speaking, our equity managers are going to be

buying because they are low rated and that?s the price we pay for being in high

quality long term growth stocks.



The next page gives the best performing largest stocks in the S&P for the first

six months 2004. There are names like General Electric, Pfizer, Entel and

Wallmart. Their returns are substantially less than the stocks on the previous

page and their P/E ratios are substantially less, but their ratings are much

higher, so what this is saying is that the low quality stocks have led the way

for the last twelve months, but they are awfully vulnerable right now because

their price to earnings ratios are so high and they have done so well.



The final page takes the first six months and tells you what the S&P mid-cap

400, which is the index for smaller companies and the Russell 2000 which is the

middle index of smaller companies, what it has done compared to the S&P 500 and

the Dow Jones. For the first six months, those two small cap, mid-cap indexes

have doubled the performance of the S&P 500. The point is that the money has

been flowing into the low quality, low earnings or no earning stocks. Our

money managers have not been in that space, they have been in the large cap

growth stocks and that, to a degree, helps explain why there was a dispersion

in the last year in terms of our managers and the index.



Following a brief discussion, Mr. Swift stated that the board may want to look

at this section of the investment policy statement and consider a modification

of the policy statement to be more flexible.





The final thing is the total account, for the trailing twelve months, the total

account was up 9.4%, the index was up 9.25%, a little bit of relief for the

Finance Department in terms of being a good 200 basis points ahead of the

assumed rate of return for actuaries. For the year ending in 2004 of June we

did it and it will be a helpful part of the analysis for the actuaries when

they start looking at it. The problem is this needs to be accomplished every

year.



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.





PRESENTATION:



Mr. Swift introduced Mr. Brad Erwin and Mr. Jas Short of Eagle Asset Management

to present their annual report.



The report followed the Agenda listed below:



Management Organization

Long History & Established Infrastructure

+Focused, Entrepreneurial Culture

=Production Excellence



Objectives: A,B,C

A. Generate Alpha (out performance vs. benchmark) consistently over long

periods of time.



B. Maintain a Beta policy (level of market risk relative to benchmark) that is

neutral to moderately positive through multiple market cycles.



C. Deliver Consistent long-term performance that place them at the top of their

peer group on an absolute and risk-adjusted basis.



Portfolio Philosophy

Wealth creation is best achieved by building a diversified portfolio of growing

companies that represent America?s participation in the global economy, and

demonstrating a willingness to adjust for changing market conditions.



Investment Process



Buy Discipline

Size Criteria

Quantitative Criteria

Qualitative Criteria









Adding Alpha By Expanding The Universe

The primary stock universe for the portfolio is the Russell 1000 Growth Index.

However, attractive and appropriate investment opportunities can often be found

outside this index.



Sell Discipline

Trim on Valuation; Exit on Fundamental Deterioration



Institutional Growth

What has worked

What has not worked



Investment Policy

In accordance with code section 16A-13.11, the primary investment objective is

maximizing investment potential.



Market Value

Total Market Value = $7,526,087



Performance Percentages



Top Contributors/Detractors



Portfolio Characteristics



Sector Weightings



Representative Holdings



Recent Transactions



Growth Market Review and Outlook



Appendix





Mr. Bill J. Stewart and Mr. David B. Chick from Invesco-Nam presented the

second report. The following the agenda for their report:



Core Multiple Attribute Philosophy

Blend Value and Growth

Multiple Attribute Diversification

- Low P/E

- Yield

- Growth

Manage Portfolio Risk





Performance Overview

Performance for periods ending June 30, 2004



Core Multiple Attribute Preliminary Performance as of June 30,

2004



Equity Characteristics



Market Outlook



Equity Holdings





OLD BUSINESS:



Mr. Richard submitted the interim report at this time for the period since the

last meeting on 7/13/04. The S&P 500 went from 1115 to 1099, which is a very

small move but it amounts to about 1.4% and came down almost 1.5%. Next is the

report on the bond market, which is really highlighted the yield on the 30-year

Treasury. The yield dropped from 5.22% on 7/13/04 to 5.16% on 8/3/04.



The fixed manager, Synovus was down .28%; Tattersal up 1.03% and Madison was up

.75% giving a total combined fixed of up .54%.



The combined growth was down 1.85% for the period.



Deutsche Asset and Victory, the value managers had a combined value down 1.06%.



The core equity managers, Trusco and National Asset were down 2.17% for the

combined total.



Lazard International was down 2.43%.



The combined equity was down 1.69% and the S&P 500 for this period was down

about 1.43%. The total city account for the period was down .73%. Not a lot

of movement in the short period of time.



NEW BUSINESS:



The new meeting calendar for the year 2004-2005 was submitted for approval. It

was accepted and ratified by the board.



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

adjournment.



The next meeting is scheduled for September 15, 2004 at 2:00 p.m. in the Mayor=

s Conference Room. Deutsche Asset Management will be here for their annual

report.





_____________________________

Julia A. Rasch

Recording Secretary