Last spring, as city revenue projections began to look shaky, Mayor Nutter met privately with Harold Sorgenti, chairman of the Philadelphia Orchestra Association, and agreed to provide a $250,000 unscheduled grant to the city's premier music ensemble.

No announcement of the gift was made, and no funds had been previously budgeted for the orchestra. Where would the money come from, officials wondered. They decided that the city's allocation for the Philadelphia Cultural Fund could be tapped without a problem.

It's a decision that has riled some members of the fund's board, who argue that the Nutter administration, while generous to the arts, has now undermined the integrity of an arts-funding process that was explicitly designed to steer clear of the muddying influence of politics.

"My understanding is that the amount of money decided on for the orchestra was a decision that the City of Philadelphia made," said Cheryl McClenney-Brooker, president of the board of the Cultural Fund, which is an independent nonprofit entity.

"That was outside of our process," she said. "We were told about it, and there were board members who took exception with that."

Indeed, the board drafted a letter to Nutter expressing concern about the grant, though the letter was not sent. Several board members, who asked not to be named because they were speaking as individuals said they feared the administration would react negatively to any protest. "There's been a hesitation to take action," said one board member.

Another, however, characterized the debate as "so silly," adding, "The big picture is that the mayor is so supportive of the entire cultural community."

Gary Steuer, the city's chief cultural officer, expressed regret at the series of events, saying that the decision to provide the orchestra with a grant from the Cultural Fund pot was made relatively early in Nutter's term and has since become "a lesson learned."

The Philadelphia Cultural Fund was established in 1991 as a vehicle for the city to provide equitable arts funding. It is not a city agency, and its funds - all provided by the city - are disbursed after rigorous peer review and on the basis of a complex mathematical formula. The largest grants are in the $15,000 range and provide general operating support. Mayoral or political agendas are not a part of the grant-making process.

Prior to 1991, city money found its way to cultural organizations through what were known as Class 500 grants, a multimillion-dollar pot of cash distributed annually through City Council, without benefit of process or review.

Unwittingly or not, Nutter's decision to give $250,000 to the orchestra raised the ghosts of those Class 500 grants past.

Former and current members of the Cultural Fund board say no money has ever been distributed through the fund that has not gone through its rigorous review process. When Terry Gillen, now executive director of the Philadelphia Redevelopment Authority, and Andrew Altman, deputy mayor of commerce, approached the Cultural Fund on behalf of Nutter and the orchestra in August, they were told that the fund could not be used for the orchestra gift.

The administration then decided that the money could be taken out of the Cultural Fund appropriation before it was actually disbursed to the fund, thus avoiding the fund's review process. The money is contained in the Commerce Department budget under the heading "contributions to other government agencies and nonprofit organizations, not educational or recreational."

That line item has been exclusively used for the Cultural Fund. But "the wording," said Steuer, who took up his position in October, was considered "broad enough to allow for granting of funds prior to their going to" the Cultural Fund.

The orchestra intended to use the money, he said, to provide free concerts in city neighborhoods. Wachovia Bank was the lead sponsor for one such concert, at City Hall, in September.

"This was a fairly unique situation," Steuer said. "I don't think it's something that would become common practice." He added that Nutter "had no intention of returning to the old days of Class 500 grantmaking. This was a special circumstance, a unique circumstance."

Steuer added, however, that there could be future "unique opportunities" that the mayor might want to take advantage of through the use of Cultural Fund money. Such situations "should be clear from the beginning, and clearly that was not the case this time."

Beyond that, Steuer added that, while he wasn't certain that the fund should be the only repository for city arts and culture money, an independent Cultural Fund board was important to maintain because of "past history."

Fund president McClenney-Brooker noted that Nutter initially had increased the fund's budget from $2.2 million to $4.2 million; even after the $1 million reduction announced in the wake of the fiscal crisis and the $250,000 diverted to the orchestra, the budget stands at $2.95 million.

"They've been very generous," she said.

Contact culture writer Stephan Salisbury at 2315-854-5594 or ssalisbury@phillynews.com.