COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON LABOR AND CIVIL SERVICE - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, March 10, 2010 9:20 a.m. - - - PRESENT: COUNCILMAN BILL GREEN, CHAIR COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN WILLIAM GREENLEE COUNCILMAN CURTIS JONES, JR. COUNCILWOMAN MARIA QUINONES-SANCHEZ BILL 100095 - An ordinance amending Section 22-310 of The Philadelphia Code, entitled "Deferred Retirement Option Plan (DROP)," by conforming the City's DROP program to the requirements of Pennsylvania Act 44 of 2009 (H.B. 1828), which restricts the DROP eligibility of elected officials. - - - 2
This is the Committee on Labor and Civil Service. We're holding a hearing on Bill No. 5 100095. Will the Clerk please read the title.
An ordinance 9 amending Section 22-310 of The Philadelphia Code, entitled "Deferred Retirement Option Plan (DROP)," by conforming the City's DROP program to the requirements of Pennsylvania Act No. 44 of 2009, (House Bill 1828), which restricts the DROP eligibility of elected officials. (Witness approached witness table.)
Good morning, Chairman Green and members of the Committee. I'm Rob Dubow, the Director of Finance, and I'm here to testify on 3 3/10/10 - LABOR & CIVIL SERVICE - BILL 100095 Bill No. 100095, which would exclude elected officials who take office after September 18th, 2009 from entering the DROP. This change is required by the state law that passed last September that also allowed the City to impose a temporary one percent sales tax and make certain pension funding changes. The Administration supports this legislation. I'd be happy to answer any questions.
Just for the record, where do DROP payments come from, what fund in the City's budget?
From the pension fund. So whether or not anybody received a DROP payment, it would not affect general City services that impact citizens?
DROP payments are pension payments that people have earned through their years of service, 4 3/10/10 - LABOR & CIVIL SERVICE - BILL 100095 whether -- entering the DROP changes when you start getting those payments, and so there's a question as to what that does to the pension fund's liability --
-- which then may have an impact on what the City has to put in -- the General Fund has to put into the pension fund, but you have to actually do -- and we're looking at doing this -- a detailed study of behavior to figure out what that impact is.
My understanding the initial purpose of the DROP is to encourage employees who are of retirement age to stay longer before they leave service.
Wasn't it also about getting people to retire who were in the J Plan and replacing them with people who are in less expensive 5 3/10/10 - LABOR & CIVIL SERVICE - BILL 100095 plans so that we weren't accruing liability under the most expensive plan for a longer period of time?
It could have been. I wasn't one of the people who helped bring it in, but my understanding always was part of it was to make sure long-tenured civil service employees stayed longer, and part of it too would be you have some knowledge of when they might leave, so you'd be able to do succession planning. So there were a couple of reasons for it.
That concludes the public hearing on Bill No. 20 100095. We'll now move into a public meeting. I'm sorry. I'm going to go back into the public hearing on the bill 24 and put a letter from the Committee of Seventy on the record. And that will 6 3/10/10 - LABOR & CIVIL SERVICE - BILL 100095 conclude the public hearing on the bill 3 and we'll go into the public meeting for Bill No. 100095. I'll entertain a motion from Councilman Goode.
Thank you, Mr. Chairman. I move that Bill No. 9 100095 be reported out of Committee with a favorable recommendation and the rules of Council be suspended so as to permit first reading at our next Council session. (Duly seconded.)
I'd like to note for the record that Councilman Jones has joined us. There's been a motion and a second. All in favor? (Aye.)
The bill is passed out of the Committee. (Committee on Labor and Civil 7 3/10/10 - LABOR & CIVIL SERVICE - BILL 100095 Service concluded at 9:25 a.m.) - - - 8 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on March 10, 2010, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)