With the primary election out of the way, City Council is finally poised to make a move on the unpopular DROP program.
But it looks as if members are leaning toward modifying rather than killing the Deferred Retirement Option Plan. City Hall sources say Council leaders have drafted legislation that would adjust the interest rate that participants earn and would require city workers to wait two more years before enrolling.
That bill is expected to be introduced Thursday, followed by a June 6 hearing that will also review Mayor Nutter's legislation to eliminate DROP. But many Council members - some of whom made promises to labor leaders who want to keep the program alive - favor amending DROP to reduce the cost.
"We want to bring the DROP issue to an end by making it cost-neutral and at the same time providing predictability for the work force," said Councilwoman Maria Quinones-Sanchez.
Nutter has repeatedly called on Council to eliminate DROP. A study he commissioned from Boston College found that the program had cost $258 million since its inception in 1999. But a follow-up review by Council's consultant, Bolton Partners Inc., put the cost at $100 million.
DROP allows city employees to set a retirement date up to four years in the future, at which point they start accruing pension payments in an interest-bearing account while still on the payroll. When the employees retire, they collect a lump sum, then start receiving pension payments.
Public anger has been stoked in reaction to elected officials' participation in DROP - including a few who signed up for it, then ran for and won re-election, "retired" for a single day, collected six-figure DROP payments, then resumed collecting city paychecks. New elected officials cannot enter DROP.
In Tuesday's primary, two DROP participants - Councilman Frank Rizzo and City Commissioner Marge Tartaglione - lost their re-election bids. Five other City Council members enrolled in DROP chose to retire rather than run again.
City Hall sources said that under the Council plan to amend DROP, employees would not be able to enter DROP until two years after they hit retirement age - which varies by job. And the interest rate, now set at 4.5 percent, would be adjusted based on U.S. Treasury rates.
The intent would be to make the program cost-neutral. Of course, the current DROP program was billed as "revenue-neutral" when Council first approved it in 1999.
Council President Anna Verna, who will collect a $585,000 DROP payment when she exits office at the end of this year, said yesterday that she didn't see why the public would care if DROP stays as long as the program wasn't costing anything.
"If it's revenue-neutral, I don't see how it bothers anybody," Verna said.
Still, Councilman Jim Kenney said yesterday that he wanted DROP gone.