In the throes of a budget crisis, the Philadelphia School District is not implementing cost-cutting measures quickly enough, and needs a complete restructuring including new personnel and a vastly different way of operating, Mayor Nutter said in an interview.

Fresh from a trip to Denver to examine that city's school system - a model Philadelphia is looking to emulate - Nutter is announcing his concern. He put Philadelphia's public school system at the top of his priority list in his second-term inaugural speech last week.

"We have to seriously look at it as an organization that must be turned around," Nutter said. "Clearly, there is a need to replace much of what exists at the School District - both by function and, I believe increasingly, by personnel."

Asked if he were speaking about acting Superintendent Leroy Nunery II, who has led the district since August and has expressed interest in the permanent job, Nutter demurred.

"Ultimately, that's a decision that the [School Reform Commission] has to make," said Nutter.

Commission Chairman Pedro Ramos - who accompanied Nutter on the Denver trip, along with Commissioner Wendell Pritchett and the city education secretary, Lori Shorr - did not comment on Nunery. But he did reiterate that the SRC was working closely with City Hall.

"We have an SRC that is all together with the mayor, and together with the [Pennsylvania] secretary of education," Ramos said.

Nunery did not travel to Denver. He did not return requests for comment Monday.

Nutter, in the interview, emphasized the "reform, restructure, replace" plans for the district that he raised before his trip last week. He said the SRC was now evaluating the district's organizational chart and the people who fill the jobs.

"Unfortunately, the district at the moment is way behind in terms of implementing some of the changes - the cost-saving measures - that need to be taken," Nutter said. "The SRC is rightly looking at the overall structure at the district and personnel to more fully evaluate just where things are, and if changes are to made, where do they need to be made?"

The district has had to make deep cuts in personnel and programs to bridge a shortfall of more than $629 million, though it is unclear how much of a gap remains and which gap-closing measures have yet to be implemented. Nutter was critical of former Superintendent Arlene C. Ackerman's handling of the district's financial troubles, a split that hastened her departure in August.

Shortly after Ramos took his seat, the SRC created a committee of senior staff to monitor the gap-closing plan. Sources say the chairman is dissatisfied with the pace of implementation and is expected to address the SRC's concerns at its next voting meeting on Jan. 19.

But financial issues are not the only ones on the table.

Spurred by Philadelphia's newly signed "Great Schools Compact," Nutter, Ramos and others traveled to Denver last week to learn about its progress with a similar document, signed about a year ago.

Denver and Philadelphia have received grants from the Bill and Melinda Gates Foundation because of their compacts. Both districts hope to win more Gates funding.

Philadelphia's compact promises increased cooperation between district and charter schools and aims to shut 50,000 seats in low-performing schools and replace them with "high-quality" options, whether in district or charter schools.

The district has already laid some groundwork, targeting its most troubled schools, some as internally managed turnarounds and others as charter-run turnarounds.

Nutter said he was impressed with Denver's management - particularly former Superintendent Michael Bennet, now a U.S. senator, and current schools chief Tom Boasberg.

"It's interesting that both previous Superintendent Bennet, as well as current Superintendent Boasberg, came from the private sector, both with basically merger and acquisition turnaround firm experience," Nutter said.

The group was particularly interested in Denver's push to decentralize school operations.

"They start off with a lot more discretion and responsibility and power at the principal level," said Ramos, who joined the SRC in November. "But it's a very accountability-driven system."

In Denver, the operating assumption is that schools have authority over their own destinies, and lose it with bad performance. In Philadelphia, it is assumed that the central office dictates how a school is run, and strong schools can earn the right to some autonomy.

Pritchett, also new to the SRC, said in Denver, "I thought they had a lot more clarity about what was the school's function and what was the central administration's function than we do. That was the thing that I appreciated we need to work on."

Shorr, who has recently been working as an executive adviser to the district, said the decentralized model made sense.

"We have a central administration that was built to support a certain type of public education, which was all district-managed schools," she said. "We've got to think of how to support schools when you have a portfolio of school options out there. You have to rethink how you do things."

The group also seemed impressed with Denver's "universal application" system. As part of its compact, Denver moved from separate enrollment processes and timetables for public and charter schools to one streamlined process.

Also promising, Nutter and others said, was the way services are shared among district and charter schools. Not only business functions, but also special education and other services are shared, exchanged, traded and even sold, they said.

"When you knock down that wall between charter and district, you open up a larger field from which you can negotiate things," Shorr said. "Who can do what for less? Who does what better?"

While Denver is similar in many ways to Philadelphia, it also has key differences - it has no budget crisis but does have a divided, elected school board. And its district is growing while Philadelphia's is shrinking.

But, Pritchett said, Denver was downsizing a few years back.

"The changes they have made increased the demand for public education in Denver," Pritchett said. "That's an exciting thing. You do good reforms, and if they work out, you really see improvements."

Though they found Denver "eye-opening," there are no magic bullets, the officials said.

"I don't want people to come away from our visit to Denver and think that we're going to wholesale bring everything we learned and implement it back in Philadelphia," Shorr said.

Mark Gleason, executive director of the Philadelphia School Partnership and a member of the delegation that traveled to Denver, said that district wasn't "blowing our socks off academically. They haven't figured it out."

But, said Gleason, whose group aims to raise $100 million to expand access to seats in all types of high-quality schools, "there was a sense that charter schools are seen as public schools. There was less talk about district schools and charter schools, and more talk about public schools with a lot of different models."