Nutter can expect a difficult journey in his next four years as mayor

IT'S NOT easy at the top.

Maybe Mayor Nutter didn't know that four years ago, when he ascended to the city's highest office, promising government reform and a "new way" of leadership. But he certainly does now.

Many of Nutter's lofty plans were delayed or downsized due to fiscal crisis. Balancing the budget required three years of tax hikes. His political relationships have faltered as some former friends have become foes. And he's been hit with epic snowstorms, a hurricane and an earthquake.

But Nutter - who yesterday handily won a second term - says he's proud of the gains he's made, like keeping the city financially afloat, tackling crime and taking a strong anti-corruption stance in City Hall. Now, he says, he's more than ready for another round.

"I'm going to bring the same can-do, gotta-get-stuff-done attitude to work," said Nutter, 54, during a lengthy interview last month. "I expect the same thing from the rest of the team."

The question now is just how much can Nutter - or any mayor - accomplish in a lame-duck second term?

Nutter has tough issues to deal with - improving city schools, revamping the city's troubled property-tax system, tackling the underfunded pension fund and reforming the city's contracts with its workers.

"If this was the end of his administration, you'd have to [ask] what's his legacy, and I don't think that story's been written," said former Managing Director Phil Goldsmith. "He has the benefit of having another four years to make his mark."

A hopeful Philadelphia ushered Nutter into office on a blustery morning in January 2008, after the former councilman won a rigorous seven-way Democratic primary and breezed through the general election. He promised safer streets, better schools and ethical government.

But less than a year into his first term, he was walloped with an economic recession that set the tone for the subsequent three years. A stock-market crash in 2008 wiped out 20 percent of the city's pension fund and forced wide-ranging budget cuts and tax hikes that angered citizens.

"It did feel like a war. It felt like the administration under his leadership was being guided through a tsunami," said former spokesman Doug Oliver, now senior vice president for marketing and corporate communications at the Philadelphia Gas Works.

During 2008 and '09, Nutter drew public ire for a proposal to close 11 libraries, ultimately abandoned. He was criticized for three years of tax hikes - including two property-tax increases.

His supporters say Nutter did the best he could and avoided widespread layoffs or cuts.

"He solved the fiscal crisis about as well as anybody could have," said Philadelphia NAACP President Jerry Mondesire. "Taxes have been raised and nobody likes that, but I think most people understand that."

Still, Nutter has not made significant progress on a huge issue facing the city - the massively underfunded city pension fund, which has just 47 percent of assets needed to pay projected benefits.

To win changes to the way the the pension is funded, Nutter needs to resolve contracts with the four municipal unions. So far he's reached deals with police officers and firefighters through binding arbitration that calls for some pension concessions, although the city is appealing the fire contract for other reasons. Negotiations continue with the city's blue- and white-collar workers, whose previous deals expired more than two years ago.

Nutter argues he has won savings from the nonuniform workers by not paying out raises for two years. But some question whether he should have pushed for long-term contracts that included pension concessions in his first year in office, when he had the most clout and public goodwill. Instead, Nutter negotiated one-year contracts that didn't deal with the pension issue.

"In retrospect, I think Michael Nutter today would say if he had known the bottom would fall out of the economy [he probably wouldn't] make that call," said Comcast executive vice president David L. Cohen, former chief of staff to Mayor Rendell. "But nobody knew. Who knows how much progress he would have made?"

Despite the budget challenges, Nutter has overseen public-safety gains. The homicide count is running even this year with last year, but down compared with 2006 and '07. He has put new ethics rules in place for most city workers and has successfully dismantled the Board of Revision of Taxes, long criticized for political cronyism.

"I think we have restored a significant amount of integrity to the government," Nutter said. "We've virtually eliminated this pay-to-play culture around here and I think that whether it's a businessperson or a regular citizen, they actually believe the place is run in a more honest fashion than some of the incidents in recent years."

A surprising hallmark of Nutter's first term has been his difficulty in managing the day-to-day retail politics required of the job. That's been evident with City Council, where he spent 14 years as a member but has been unable to maintain a reliable bloc of votes for his initiatives.

This year alone, Nutter failed to win support to kill the controversial DROP retirement perk, or to start levying a soda tax to help fund the cash-strapped school district.

And former friendships have frayed. Last month, Nutter vetoed a bill to lower the parking tax proposed by Councilman Jim Kenney, a longtime ally. Early in Nutter's term, Kenney was a vocal supporter. But over time, he said, he grew weary of carrying Nutter's water on tax hikes or DROP, while feeling that he was getting little support from or access to the administration.

"It's frustrating because I've sensed that the vast majority of people around him disdain politicians and the political process," Kenney said last month. "There's a difference between politics and corruption."

Nutter said he had a "tremendous amount of personal and professional respect" for Kenney, but sometimes has to make decisions that upset friends. In recent weeks that relationship has improved as the two joined forces - along with Council members Bill Green and Maria Quinones-Sanchez - to pass a package of business tax-reform bills that aim to provide relief to local small business.

Nutter said that life with Council would probably have been easier if he had more money to spend. He also noted that Council passed tax increases, even if they weren't the exact increases he wanted.

Still, Nutter said he hopes to be more thoughtful in managing those relationships in his second term, when there will be six new Council members.

"I've learned some lessons and I will certainly be more strategic in how we interact with folks," the mayor said.

Nutter's gotten mixed reviews for his handling of the scandals at the school district.

Reports surfaced in the spring that state Rep. Dwight Evans and Robert Archie, Nutter's School Reform Commission appointee, had held secret meetings in an effort to guide a charter-school contract to a politically connected nonprofit.

Nutter called for an investigation by Chief Integrity Officer Joan Markman. That report was a damning indictment of both men, but Nutter has been careful not to publicly criticize either and has no plans to pass the findings to law enforcement.

"He wants to have it both ways," said former Councilman Dan McElhatton, a onetime Nutter supporter. "I think the expectation that his administration was going to be transformative, that it was going to make this a different kind of city and government, there hasn't been a delivery on that."

Nutter said the report speaks for itself and that he is focused on moving forward with plans to improve education in Philadelphia.

"All of the adults involved in education need to be focused on one thing, kids," Nutter said.

So, how long before Nutter is a lame duck?

Some say he's lame from Inauguration Day. Others say he has at least three more years to push his agenda. Either way, time is not on his side.

"The second term is very tough. You do become a lame duck on Day 1," said political consultant Larry Ceisler. "One thing you have to know in your second term, you only have so many bites at the apple."

Nutter says he has big plans, citing further gains in crime-fighting, job creation and education as his priorities.

He hopes to pump more money into the 3-1-1 call system and pursue development on the Delaware Waterfront and North Broad Street.

There's also work he'll have to finish. An effort to reform the property-tax assessment system is still under way, which could prove controversial. And without municipal contracts that make pension changes, Nutter will have placed the city's financial future in jeopardy.

"I think the ticking time bomb is the pension situation," said Goldsmith. "I think the other major issue is the assessment problem. If he can make major inroads in pensions and assessments, that will be an excellent legacy."

Beyond his second term, many are already speculating on whether Nutter may have his eye on another elected position - in Harrisburg or Washington - or if he has hopes of a cabinet job in a second President Obama administration.

Nutter has boosted his national profile through a leadership role in the U.S. Conference of Mayors and is a regular commentator on national news programs, typically speaking on urban issues.

But he says he's not entertaining any plans beyond four more years in City Hall.

"I have not given any thought to what I might do next," Nutter said. "I do not want thoughts about what I might do next to interfere with what I'm supposed to do right now, which is run the city. I love what I do and this is all I want to do and all I think about."