DROP defenders' objectivity questioned

As City Council heads toward hearings on the city's DROP retirement benefit, Philadelphia's municipal unions have been lobbying to keep the program.

But the heads of two of the city's four unions have already collected their DROP payments.

Herman "Pete" Matthews Jr., president of District Council 33 of the American Federation of State, County, and Municipal Employees, the blue-collar union, collected a DROP payment of $163,415 in 2007. He retired from city employment at that time but continued as union president.

He earns $235,605 in that job. His union has 10,000 members. Matthews has been a union official for more than two decades. He had been a security guard for the city Water Department.

Cathy Scott, president of District Council 47, the 6,000-member white-collar union, collected a DROP payment of $216,992, also in 2007. She, too, ended employment with the city, as the DROP program requires, but continued as head of that union.

She earns $126,551 in her job. Scott also has worked for the union for many years, and she had been a social worker for Philadelphia's welfare and prisons departments.

The two union leaders were simply taking advantage of the Deferred Retirement Option Program, or DROP, which allows city workers to collect a lump-sum payment in exchange for a lower pension benefit over the long run.

The program has become controversial in part because of a study, commissioned by Mayor Nutter, that estimated the extra cost of DROP as $258 million over the last 10 years. Nutter has called for an end to DROP.

Unions and others say the study, by researchers at Boston College, is flawed and point to other estimates that say DROP's cost is minimal and may even save the city money.

Matthews' and Scott's unions have been among the prominent voices in the debate, which Council is expected to take up later this year.

Their participation raises the question of how well they can evaluate the program, said Zack Stalberg, head of the watchdog group Committee of Seventy.

"It's a bit of a conflict of interest in their case because they've received the benefit, and I'd be concerned whether they could make an impartial judgment on behalf of the union about what should happen now," Stalberg said.

He noted that Matthews and Scott simply took advantage of a perk offered to employees of retirement age and so did nothing "improper." He just questions whether they can be objective.

Matthews and Scott did not return calls seeking comment.

Bob Bedard, a spokesman for Scott, noted that her decision to enroll in DROP was approved by the union's delegate assembly and was done openly.

He also said Philadelphia employees don't get benefits that many other government workers do, such as cost-of-living adjustments in their pensions.

"It may be sexy to print gross amounts of dollars as though that was inherently bad with no basis for making any informed judgment - but it's not good journalism. Or, fair," Bedard said in an e-mail. "Why not just wait for the Council hearings instead of attacking the unions who are simply trying to protect members in their old age?"

The head of the firefighters' union, Bill Gault, 52, said he had not enrolled in DROP because he could not afford to retire and he needed his health-care benefits.

John McNesby, head of the Fraternal Order of Police, is 44 and too young to be eligible for DROP.