[ goose chases ]
Mayor Michael Nutter has waited four months for a Boston College study of the city's Deferred Retirement Option Plan (DROP). Now, both labor and city managers are panning an early version of the study, raising doubts that the whole exercise may have been a waste of time.
Last week, The Philadelphia Inquirer got hold of a preliminary version of the report on the city's DROP program published online. The preliminary report said DROP had resulted in a "substantial increase in pension cost." Not exactly a news flash, but more damaging was the reaction. The Inquirer quoted a "clearly perturbed" city finance director Rob Dubow saying the report was "very preliminary" and not "the product we asked them for, and we still don't have a final version of that product." Bill Rubin, a labor representative who is vice president of the city pension board, termed the report "woefully inadequate" because it sought to analyze employee behavior without talking to any employees.
The city is spending $79,989 on the DROP study — which doesn't get you much in the financial world. (Boston College's Center for Retirement Research initially wanted $126,168 for the study, but settled for the lesser sum.) It costs at least $300,000 to do an annual audit of the city pension plan, says Joe Boyle, the Philadelphia actuary who analyzed DROP for City Paper [Cover Story, "The Billion Dollar Boondoggle," Ralph Cipriano, April 22].
"I don't think Boston College is going to tell us anything we didn't already know," Boyle says. "I question why the city had to do this in the first place."
Last week, city officials released hundreds of pages of documents, e-mails and contracts between Boston College and Philadelphia officials, in response to a Right to Know request from City Paper.
The documents shed some light on reasons for the delay of the DROP report, which was supposed to be finished by April 1. The documents also show that city officials felt pressured by the media — particularly, this newspaper's investigation of DROP.
On May 3, two weeks after City Paper's investigation of the city's DROP program was published, Lauren M. Vidas, assistant to the city finance director, wrote an e-mail to Timothy J. Garufi of Boston College's Center for Retirement Research. "Tim: When can we expect the revised draft incorporating the latest data re: personnel ratings? Could you please send me a revised project timeline? We are getting a ton of media inquiries due to an article that appeared in one of our local weeklies about the DROP program."
On June 10, Garufi's boss, professor Anthony Webb, wrote back, "Lauren: I understand the pressure you are under. I assure you that we are making it our top priority."
The contract between the city and Boston College was supposed to go into effect May 12, 2009, but because of disagreements over several key issues, the contract did not get signed until Dec. 18. Initially, city officials wanted Boston College to be liable for gross negligence or willful misconduct up to $1 million, but wound up settling for a liability cap of $500,000. The college professors doing the study also sought performance evaluations from the city of Philadelphia employees — such as satisfactory and superior — so they could study DROP's effect on each category of worker, but the city was unable to provide such records.
According to a "scope of services" document, Boston College said it needed those records because, "We seek to understand the human behavior behind the decisions individuals make so that we can focus on solutions that work in practice, not just in theory. ... Once we have identified who is actually working longer due to the DROP, we can then analyze whether or not the program is achieving its goal of retaining highly valued employees."
On March 11, Webb e-mailed Garufi about a "slight misunderstanding" with city officials. "We asked for the historical performance assessments," Webb wrote. "Philadelphia took this to mean the pension plan returns. What we were looking for was historical data on employee performance — whether each employee was 'satisfactory,' 'superior,' and so on."
On June 9, Webb, the Boston College professor, sent Garufi another e-mail: "Everything is complete, with the exception of the analysis of the question of whether the DROP program differentially induces high performers to delay [retirement]. We planned to do this using the performance assessments. But the data wasn't usable. We ended up having to identify superior performance by means of an ... analysis of pay increases. We have now completed the analysis and identified the differential effect of the DROP program on high performers. ... Barring anything completely unforeseen, we should be able to deliver the product first thing Monday morning."
According to the front-page story the Inquirer published Sunday, the city expects to release its DROP report sometime this week, nearly two months after that e-mail was sent. Asked about the delay, Maura Kennedy, a spokeswoman for Nutter, replied in a July 22 e-mail, "We are still finalizing the draft. I will let you know as soon as it is available."