Retired financial adviser among five seeking post

Charles McPherson, the veteran city employee known as "the 18th councilman" for his unmatched clout with City Council, may be headed for a well-paid encore as Council's top adviser under an outside contract.

McPherson, 60, retired from the city in April 2009 after 36 years, taking with him a $528,000 lump-sum payment from the city's deferred retirement option plan, or DROP, and beginning to collect his $113,500 annual pension.

Friday was the deadline for applicants seeking a contract of up to $150,000 to provide Council with financial consulting. At least five applications were in before the 5 p.m. deadline - McPherson said he applied but Council's chief accounting officer, Anne Kelly King, would not immediately identify the other four.

He is not guaranteed the job, but word in City Hall for months has been that McPherson has the inside track. He is Council leadership's most trusted adviser and arguably unrivaled in his knowledge of city finances.

"He fits the role perfectly, but we don't know who else is going to be filing," said Council President Anna C. Verna, who has final say on Council contracts.

Though Verna insisted the process was open, she also has said she would gladly take him back. Former budget director and deputy finance director under Mayor W. Wilson Goode Jr., McPherson was hired by then-Council President John F. Street in 1991 and has been Council's chief financial officer since.

"He has more institutional knowledge than anyone I know in City Hall," Verna said in January. "The door's been open ever since he left and I don't want to close it on him."

In fact, McPherson never left. He kept his office and his role, and has worked without a salary for the last 14 months. He was integral to Council's rejection of Mayor Nutter's proposed citywide trash-collection fee and sweet-drinks tax this year. Council instead raised property taxes 9.9 percent and hiked the commercial-property trash-collection free from $150 to $300.

McPherson's salary was $175,776, the seventh-highest in city government and about $63,000 more than the pay of most Council members, when he retired.

City law barred him from working as a contract consultant for Council for a year after his departure.

Though the city pension fund has been making payments to him, McPherson has been saving the city well over $100,000 that would have been paid to a replacement.

Council put out a request May 17 for proposals to fill the post. It is not required to award contracts to the lowest bidder when it comes to professional services.

Not all Council members will be pleased if McPherson gets the contract, because of the public appearance of one person making more than $200,000 in city pension and fees in tight times, if nothing else. Some have wondered about the public-relations effect of what one called "an oinkfest."

City Controller Alan Butkovitz was critical of Council's failure to train a replacement, which was supposed to be what DROP enabled departments to do.

DROP was begun in 1999, at least in part to encourage veteran employees to stay in their jobs by allowing them to amass four years of pension payments to be paid in a lump sum when they left. In exchange, the employees freeze their pension level and choose a specific retirement date, essentially giving four years of notice of their impending departure.

"It's incredible to think that the entire budget armory on City Council reposes in one person," Butkovitz said. "Council should be developing more than one person who can be the analyst and the voice on budget matters.

"Everybody eventually dies and there needs to be a farm team," Butkovitz said in an unsubtle nod to the fact that Council members and their staff are known to hold their jobs until their final breath.

Former Deputy City Controller Brett Mandel, a critic of the DROP program who unsuccessfully challenged Butkovitz in the Democratic primary in May 2009, suggested that McPherson's enthusiasm for volunteering should continue.

"Philadelphia is on a losing streak when it comes to policy decisions that goes back decades," Mandel said. "Institutional memory should be the last thing that qualifies you for a job to help solve the city's problems."

McPherson would not comment about this contract, but he has always maintained that those qualified to fill his shoes generally come from the Finance Department, under the mayor. He said Peggy Van Belle, former deputy finance director, would have been a natural, but she left the city and did not apply.

McPherson has been perhaps city government's most ardent advocate for DROP, which he says keeps valuable employees in government. He is adamant that he would have left his post in 2005 if DROP had not been available to him. Council members who have joined DROP - drawing public outrage at their large payments - have often echoed McPherson's argument that the DROP payments represent their money.

Though Butkovitz is critical of Council's failure to train a replacement, he would not say that McPherson should not be rehired.

"The problem is that McPherson is essentially irreplaceable. Without McPherson, City Council is reduced essentially to a nonparticipatory role in the budget," Butkovitz said.

"I don't think it's double-dipping," he said. "When somebody's career in city government comes to an end, they still have a productive work life . . . The city shouldn't be limited to only hiring people who don't know very much about the issue they're being hired to deal with."