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DROP Action Delayed; Watchdog Group Sees Stalling

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PHILADELPHIA (CBS) — It’s been more than three months since Philadelphia mayor Michael Nutter called on City Council to abolish the controversial retirement program known as “DROP.”   The end of the year is fast approaching, but it is still not clear when Council will act.

So far, no hearing has been scheduled on a bill that would eliminate DROP — the Deferred Retirement Option Plan.  A spokesperson for Council president Anna Verna says she’s still waiting for a report that Council requested on the cost of DROP, and there is no specific timeline as to when that report will be finished.

All this means that the elimination of DROP could be pushed into next year.

In the meantime, more and more city workers are rushing to sign up for the program.  Since August, 1,368 workers have applied, well above the normal enrollment rate, say officials with the Board of Pensions.

“I would have hoped we would have had this wrapped up one way or the other before the end of the year.  That’s an outside chance we can get there,” said Councilman Frank DiCicco (D, 1st Dist.) when asked about DROP on Tuesday. “I think we’re going to get there.  The question is when.”

“I wish we could get rid of it sooner rather than later,” said Councilman James Kenney (D, At-Large). “I’m not privy to those discussions about who’s dragging what feet.  All I know is the public at large wants the program gone.”

DROP lets city workers collect up to four years of their pension in a lump sum payment in exchange for providing the city advanced notice of retirement.  It was supposed to provide a way to manage the retirements of city workers, especially highly skilled employees.

But a report from Boston College economists, released by Mayor Nutter on August 3rd, show the program has cost the city pension fund $258 million over the last decade (see related story).

What has really outraged the public, though, is learning that several politicians — including six sitting City Council members — have taken part in the program.  Those councilmembers –- Verna, DiCicco, Donna Reed Miller, Frank Rizzo, Jack Kelly and Marian Tasco — are due to collect a combined $2.1 million when they retire at the end of next year.

Those councilmembers can retire for a day, collect their lump sum payment, and return to work should they be re-elected.

In September, apparently not satisfied with the Boston College report, Council decided to hire the accounting firm of Bolton Partners out of Baltimore to review the report.  At the time, councilmembers had hoped Bolton would be finished with its assessment by the end of October or beginning of November (see related story).

That, however, has been delayed.

Anthony Radwanski, spokesman for Council President Verna, says the delay is because Bolton has not received all the information it needs from the Boston College economists.

“We can’t afford it any more. I’ve said that a million times now. I’ll say it a million and one times,” said Mayor Nutter when asked about the delay.  He wants Council “to eliminate the DROP program, to drop the DROP program, to kill it off dead,” before the end of the year.

“It feels to me like the classic stall,” said Zack Stalberg, of the government watchdog group Committee of Seventy. “I think they’re going to try and push this off until after the primary election.”

Stalberg says the advantage of that approach is that Council will not anger the city unions.

“They really need that vote.”

Reported by Ben Simmoneau, CBS3

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