Council: DROP cost half of mayor's estimate

February 22, 2011 3:00:01 PM PST
A new report released by Philadelphia City Council claims that the city's Deferred Retirement Option Plan, or DROP, costs less than half of the mayor's estimate.

The Council's report claims DROP will cost the city only $100 million over 11 years. Mayor Michael Nutter earlier attacked DROP with a study claiming the price tag for taxpayers will be $258 million over the same time period.

Despite the lower figure, Nutter said it's time to scuttle DROP no matter what the tab.

"We have a report, they have a report. The reports both agree on one big thing," Nutter said. "It needs to end. That's the bottom line."

DROP allows city employees who are eligible for retirement to collect both a salary and a pension for up to four years after joining the program. The pension payments go into an escrow account earning four-and-a-half percent interest, payable to the employee in a lump sum when he or she leaves the city payroll.

There is a loophole for elected officials like Councilman Frank DiCicco, allowing them to return to the payroll after collecting the lump sum payment. DiCicco is eligible to pick up his DROP check of more than $400,000 even as he runs for re-election. He's taking a lot of flak and feeling the heat.

"I've been making some efforts to either try to get out of it, give the money back, or, as I said two years ago when I decided to run and changed my mind about retiring, that I would contribute my salary back to the City of Philadelphia," DiCicco said.

DiCicco's primary challenger, Joe Grace, has been hammering his opponent on the campaign trail, claiming it is an issue of integrity and greed during a time of fiscal crisis at City Hall.

"This is an irrevocable commitment to retire when you enter the program, and every other city employee who has made that irrevocable decision to retire, has retired and they can't come back.. You can't have two sets of rules," Grace said.

Two other city council veterans who are running for re-election are collecting DROP checks this year: Democrat Marian Tasco and Republican Frank Rizzo.