One comment stood out this week in a story about the latest DROP controversy — a record-setting payout of $655,000 for PPA executive Richard Dickson when he retires in four years.
“The first rule of government is, nothing ever goes away,” observed David Thornburgh, head of the Committee of Seventy, a good-government watchdog group.
The Deferred Retirement Option Plan, after 18 years and four mayoral administrations, is like a gargoyle perched on the ledge of City Hall. Gargoyles, like some city programs, are hard to move, intentionally grotesque, and only popular with small groups of people.
As William Bender reported, Dickson’s payoff will be sweetened with a $149,760 annual pension. His DROP money alone would pay for 25 years of on-street parking at the PPA’s current highest metered price of $3 per hour.
City employees in the program pick a day to retire four years in the future and then have their pension payments deposited in an account with a guaranteed rate of interest while they remain on the city payroll. They collect that money in a lump sum upon retirement and then started receiving a pension, pegged to what they would have collected if they had retired four years earlier.
DROP was created in 1999 to address a wave of retirements coming in places like the police and fire departments, giving the city time to train replacements. But since then, it’s been exploited by elected officials and public employees that the city doesn’t need time to replace.
The Pennsylvania Intergovernmental Cooperation Authority (PICA), which keeps an eye on Philadelphia’s finances, on Tuesday said the total estimated costs for DROP since 1999 were between $236.9 million and $277.2 million (depending on investment returns).
That’s roughly enough money to have funded City Council’s annual budgets for the last 18 years.
DROP served a purpose once. But it has since calcified into a very expensive and hard-to-budge gargoyle. And DROP isn’t the only monster looming over City Hall.
Consider the 10-year tax abatement, born around the same time as DROP, created to spur development in a stagnant city surrounded by booming suburbs.
And it worked. Development is thriving in the city. But at what cost?
City Council President Darrell Clarke says the abatement cost the city $420 million in property taxes from 2014 to 2016. The Philadelphia School District would have received 55 percent of that, $231 million it could certainly use.
The abatement, popular with developers and the building trades unions, isn’t going away.
Neither is the Mayor’s Fund for Philadelphia, a 38-year-old nonprofit created to raise money for city programs and projects. City Controller Alan Butkovitz last year claimed the fund, which manages about $12 million in grants, became a “slush fund” exploited for inappropriate spending during Mayor Nutter’s administration, including hundreds of Uber fares, expensive dinners and department store purchases.
Mayor Kenney’s administration has promised changes, rather than just ending it.
DROP, tax abatement and the mayor’s fund: It’s time for Mayor and Council to push these gargoyles off the ledge.