Committee of Seventy Explains DROP Program
The Committee of Seventy continues to do our job for us with a succinct explanation of the city’s embattled Deferred Retirement Option Plan (DROP). Simply put, DROP is a way for city workers to both collect salary and accumulate pension money over the last four years of their employment. DROP was originally introduced as a revenue neutral management tool, and largely flew under the radar until last week when Mayor Nutter announced that revenue neutral really means it costs $22 million a year.
It has the making of a fine controversy. Nutter is calling for the end of the program– he has to, as a supposed reform mayor, in time of fiscal crises, who already gets flack for being soft on the city’s unions. The unions, of course, want DROP to stay– it’s a great little retirement perk, with four years of pension payments plus interest averaging about a cool hundred grand per member. Stuck in the middle are the only people who have the power change the situation (cue ominous music): City Council. Presented with the evidence that the program has cost the city pension fund $258 million since 1999, our fearless leaders have decided to act boldly– by stalling for time.
Seventy explains why:
So what does City Council say?
That’s the intriguing part. By and large, they have reacted cautiously, saying they need more time to think about the study. One member, Frank DiCicco, has called for a special session this summer to end DROP (interesting, perhaps, since he is one of six Council members signed up for DROP), but the others don’t seem to be in any hurry to deal with the issue until they get back from vacation in mid-September, at the very earliest.
How many elected officials have signed up?
Several dozen, including Council President Anna Verna, who will get $584,777 from DROP at the end of 2012 whether she retires for real or runs for a new term. Besides DiCicco and Verna, council members Jack Kelly, Donna Reed Miller, Frank Rizzo, and Marian Tasco are in DROP. Register of Wills Ron Donatucci is enrolled in DROP, as is Sheriff John Green, who says he will retire soon and collect his $331,744 DROP payment. Former Mayor John Street enrolled in the program before he left office too.
The really obscene part about it comes from two elected officials who already collected big DROP payouts: Councilwoman Joan Krajewski took home $288,136, and City Commissioner Marge Tartaglione reeled in $308,625 on retirement. Wait, aren’t they still working? Right, they retired for a day, took the cash, and returned to office. A handful of other “high-value” non-elected employees were allowed to do the same thing. It got so bad that the state of Pennsylvania, which is about the opposite of a paragon for good government, had to step in and tell the city to quit allowing politicians to sign up– but not before six additional Council members got their names in the hat.
So we have a verrrry awkward situation for Council right now. They just raised taxes two years in a row, no sign of fiscal relief is on the horizon and elections are coming up next year– but they have the perfect sacrificial lamb in the form of an unpopular and expensive retirement program. Only a bunch of them are enrolled in it. Good luck talking your way out of this one, guys. Tasco has said she will introduce a bill to kill DROP– but didn’t say if she’d vote for it.
If it’s any kind of bellwether, city workers sure seem to think the program is on its way out. Like rats abandoning a leaky ship, 397 employees have signed up for DROP since Nutter’s announcement. On the plus side, that means a great opportunity to sharply reduce the city payroll in four years when everybody retires.
Photo: Committee of Seventy President Zack Stalberg