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City Solicitor Shelley Smith told the Committee of Seventy that she agrees with her predecessor that the ordinance that enacted the Deferred Retirement Option Plan for employees of city government does not disqualify elected officials.
The DROP program, as it is called, is paying out for some elected officials in a couple of years. As we reported last month in an edition of Yo, Philly, we mentioned that in two years there will be a DROP payout of over $2M to six City Council members.
City Solicitor Smith, and former solicitor Romulo Diaz, are right: there is nothing illegal about elected officials participating in the program. It might not be something you'd admire your councilperson for doing. But it's not a crime.
The problem is simple: the ordinance was created with civilian—non-elected—city employees in mind. The idea is that you set you retirement date in advance, and start putting the money that usually goes into your pension in an interest-bearing account. When you retire, you get the pre-DROP pension and an all-at-once payout from that other account, plus interest. It's a great retainment method, used to squeeze some more time out of experienced workers.
But elected officials can claim "retirement" for one day at the end of their term, collect their DROP dough, get re-elected, and go back to work. Councilwoman Joan Krajewski successfully excuted this maneuver. And there's nothing stopping everyone else with a Council seat and a DROP account from doing it. Like we said, there's nothing admirable about it.
Except, of course, more legislation.
Councilman Jim Kenney is sponsoring a bill, currently in committee, that would amend the 10-year-old DROP ordinance to disqualify elected officials (full-text PDF here). This sounds like a good idea. After all, as City Paper reported back in 2003, in an in-depth and impressive article, many assumptions were made when DROP was first instituted—assumptions that began to prove incorrect well before the current financial crisis hit.
But total disqualification may not be necessary.
If elected officials want to get their DROP on and then actually, finally, permanently retire, we say go for it. It's the combination of DROP and continued salary and pension that may start to wear the city's purse so thin. In fact, Councilman Frank DiCicco plans to collect his nearly-$400,000 DROP payment but return his salary to the city's coffers if re-elected.
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