Council members will wait to discuss DROP

At City Hall (from left) firefighters union chief Bill Gault, police union chief John McNesby, retired Detective Ron Stagliano, former police union head Rich Costello listen to Mayor Nutter.
At City Hall (from left) firefighters union chief Bill Gault, police union chief John McNesby, retired Detective Ron Stagliano, former police union head Rich Costello listen to Mayor Nutter.
Posted: August 05, 2010

Don't expect quick action on Mayor Nutter's call to abolish the city's DROP pension perk. City Council members on Wednesday said they wanted time to analyze a new report that said the program has cost the city $258 million in the last 10 years.

And union representatives said they would fight to keep the Deferred Retirement Option Plan.

The program lets city employees pick a retirement date four years in the future. That decision freezes their pension benefits and prompts the city to start putting their pension payments into an interest-bearing account. When employees enrolled in DROP retire, they get the money in the account as a lump sum and start collecting their monthly pension payments.

DROP was supposed to help the city plan for turnover at little or no extra cost.

But on Tuesday Nutter announced the results of a report by Boston College economist Anthony Webb. It said DROP had increased payouts from the pension fund by about $22.3 million yearly, mostly because the program allowed workers to start collecting their pensions early.

Webb's report prompted Nutter to call on Council to kill DROP, but Council members said they preferred a little more talk and a little less action.

Several Council members pointed out that a 2003 DROP study put its cost at $7 million yearly.

Councilman Frank DiCicco, who on Wednesday called for Council to hold a special session to discuss DROP, said he wanted to know why the Boston College numbers differed dramatically from earlier estimates.

DiCicco, one of six Council members enrolled in DROP, has said he thinks the city should kill it. On Wednesday, he asked Council leadership to plan a special session "as soon as can be scheduled" to discuss the program so members would not have to wait until the regular session, which starts Sept. 16.

"We're going to need a lot of facts and figures," DiCicco said.

Council President Anna C. Verna, however, said in a news release that Council leadership had decided to wait until September.

"It is too important an issue to rush," said Verna, who also is enrolled in DROP.

Council Majority Leader Marian B. Tasco - also enrolled in DROP - promised on Tuesday to introduce a bill on Nutter's behalf and schedule a hearing when she and her colleagues return next month.

Other Council members agreed that they want to study DROP further.

"I don't think it's prudent for us to act on a document commissioned by the administration without our own analysis," Councilman Darrell L. Clarke said. "Council should do its due diligence."

Clarke also said he wanted Council to hire its own actuary to provide an independent evaluation of the Boston College report.

Councilman Frank Rizzo, also enrolled in DROP, said he would rather wait until Council's regular session in September so he could have enough time to gather information.

Clarke and other Council members also said they wanted to hear from the city's four municipal unions before deciding whether to support Nutter's proposal to end the program or to take some other course of action.

"I don't think, frankly speaking, it's fair to not have the municipal unions as party to the discussion given the fact that its members are the primary focus of this conversation," he said. "Hopefully, we will have some level of consensus."

The president of the police union, John McNesby, said he believed there may be legal obstacles to ending DROP because it provides at least some of the basis for two provisions - one concerning residency and the other covering furloughs - in the five-year police contract awarded in December.

Bill Gault, the firefighters union president, has expressed equal skepticism, as has Pete Matthews, president of District Council 33, which represents nearly half of all unionized city workers. Matthews said his union members found the report "flawed" in a cursory review.

Bob Bedard, a spokesman for Cathy Scott, leader of District Council 47, said, "Until we analyze the report, we have no response."

Also on Wednesday, the watchdog group Committee of Seventy said Council should eliminate DROP.

"Given the city's continuing financial crisis, and the severely underfunded pension fund, this is a tough pill to swallow," said Zack Stalberg, the group's president. "City officials have a responsibility to the taxpayers to make sure that DROP doesn't continue to make these problems worse."

He added: "How can you save the program and look residents in the eye and ask them to pay 9.9 percent higher property taxes?"


Contact staff writer Miriam Hill at 215-854-5520 or hillmb@phillynews.com.

comments powered by Disqus
|
|
|
|
|