HE'S STILL STANDING.

It's nearly one year into Michael Nutter's first term as mayor. In January, the former city councilman rode into office on a wave of goodwill. In his first months in office, he promised major reform, opened up City Hall to shake hands with the public, barnstormed the state with U.S. Sen. Hillary Clinton's presidential campaign and passed a budget packed with goodies.

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Then the economy began its nosedive.

Despite joyful moments, most notably the Phillies' World Series win, the fall has been a grim march to massive budget cuts for Nutter.

Facing a more than $1 billion shortfall over five years, Nutter announced plans in November to close libraries, fire companies and pools, to delay tax cuts and to lay off city workers.

"It is a game-changing event by any measure," said Zack Stalberg, chief executive of the government-watchdog group Committee of Seventy. "My hunch is he wishes he got a couple more wins on the board before it happened."

To say that the cuts have been unpopular would be a wild understatement. At Kingsessing Recreation Center last week, Nutter was booed so loudly at a town-hall meeting to discuss the cuts that he had a hard time speaking.

But Comcast executive David L. Cohen, once chief of staff to former Mayor Ed Rendell, who faced a similar financial crisis when he was in City Hall, said Nutter was going about this the right way.

"If the Ed Rendell lesson applies here, it is that in the long run you do the right thing, and you right the ship [and] this relatively loud minority, their negativism will be dwarfed by the overwhelming approval," Cohen said.

The Daily News sat down with Nutter last week for a wide-ranging interview on his first year in office. Here is an edited transcript of the conversation:

Q: In his first year in office, Ed Rendell fought a historic battle with the unions and turned the budget around. John Street removed 40,000 abandoned cars and cleaned up vacant lots. What would you say was your signature accomplishment of 2008?

A: I think we've restored a sense of hope and leadership and promise that city government can work. We've focused on the fundamentals of making this city work, of systems and processes. I'll certainly admit they're not necessarily the most exciting things in the world, but that's kind of the global picture . . . I had 117 really great days. The 118th day was very different. That was May third, the day that Sgt. Stephen Liczbinski was shot and killed. Never had an experience like that and unfortunately, I've had at least three others.

Q: In terms of crime-fighting, you and Police Commissioner [Charles] Ramsey laid out an ambitious goal to reduce homicides by 25 percent this year. Obviously you haven't hit that goal. Do you think that your efforts so far have been a success?

A: Yeah, we're 15-16 percent down in shootings and homicides, even more so in the initial nine targeted districts, which was expanded to 12. That was a goal, you know. You know you might have a goal as an adult to be a millionaire. The fact that you don't become a millionaire doesn't mean you're a failure in life.

Q: One of your campaign pledges was that you would not run again if the homicide rate was above 288 in 2010. Do you still stick by that pledge?

A: I made the pledge, I stick to the pledge. But you know, I will say to you that the only two times I've ever thought about that is the two times that you've asked me . . .

And you know, I do what I do because of my passion for Philadelphia. We're going to continue to drive the crime rates down because we need to. Not because of some commitment or pledge or run, not run, whatever.

Q: The goal of dropping the [school] dropout rate in five to seven years, is that still a realistic goal?

A: Absolutely. And we have one of the great leaders of education. I said back at the time, even before coming into office that we would do a national search to find the best superintendent that we could. We did that in Arlene Ackerman.

Q: You've been pretty clear that tougher financial times are ahead. Should Philadelphians expect more cuts and more layoffs?

A: They're going to get regular updates from us. We don't know how bad things are going to get. Yes, Philadelphians should at least be prepared for the potential that we may have to take even more action with regard to future budgets, but as I've also said, we're not going to be able to cut our way out of this.

Q: What have you learned from doing the town-hall meetings, and have they caused you to rethink any of you budget proposals or plans moving forward?

A: Certainly, I've learned the passion of Philadelphians about their city, that regular communication is critically important, that we clearly could have done a better job at trying to get more information out, trying to explain more to the citizens about the challenges they face. That was my mistake.

At the same time, we were in a situation where, whatever analogy you want to use, it was kind of like being in a flood situation where the water keeps rising, you're looking for help and quite frankly you don't necessarily have time to convene a neighborhood meeting to figure out how to deal with it.

Q: Even understanding it was an emergency situation, you did run a campaign based on a more open and transparent City Hall and have gotten a lot of criticism at the town-hall meetings from people saying they felt this was done behind closed doors. How does it feel to hear that?

A: I mean, we learned a big lesson. It wasn't that we were trying to keep anything from anyone, but it was a situation where it also kept changing on a daily basis . . .

We kept saying that everything is on the table. I think in some ways the public and others are kind of stunned that we meant what we said.

Q: Do you think your initial budget was too optimistic in terms of revenue projects and too generous in terms of spending?

A: No. During the course of the fiscal year '09 budget process, we actually revised our real-estate-transfer-tax process. We ran the numbers past PICA [the Pennsylvania Intergovernmental Cooperation Authority], some folks at the Federal Reserve. Everyone felt that they were reasonable. There has been some issue made of the fact that there has been a slight increase to spending. A lot of it was in critical service areas.

Q: On casinos, for a long time you've said you don't like the two riverfront locations. Now, obviously, Foxwoods appears to have a new location [at the Gallery Mall] so you're perhaps halfway there in terms of moving them. Do you think a move is in the cards for SugarHouse?

A: They've not identified any sites. I've continued to push them and say that my preference is, of course, that they move. At the same time SugarHouse has revealed that they are reviewing and revising their design plans for the current site to be more in conformance with the ideas and proposals laid out by Penn Praxis, an urban planning affiliate of the University of Pennsylvania School of Design.

You really kind of have two things going on at the moment on parallel tracks. We'd like you to move, but if you have ideas about redesign, we'll listen to you.

Q: You've launched a lot of stuff this year. Would it be fair to say you have started things that we haven't seen results from yet? Like the promised Penn's Landing overhaul or the ex-offenders [jobs] program?

A: Well, I guess what I would say in a general way, there's always going to be something you didn't get done in the first year of your term. That's why they give you four years. I think we've laid a lot of groundwork, taken over some things that were already in place. I didn't create Penn's Landing, I didn't create the re-entry office [the program for ex-offenders]. And often you find that you do have to make some rather significant changes.

Q: You've had a big year in terms of publicity and public acclaim - from the cover of the New York Times [Magazine] to barnstorming with Hillary Clinton, to doing the weather on TV news, appearing on Sunday talk shows. Do you think all of that has ever clouded your perceptions or taken time away from governing?

A: No, none of those items ever kind of either trumps or interfere with my day-to-day responsibilities. We figure out a way to fit them in . . .

My job, my main absolute what-I-ran-for job is to focus on running this city and make sure that its components work well. At the same time, I think a big mistake for any executive is to be a recluse or a captive of the building . . . .

Citizens have a right to expect that they're going to see their leadership from time to time.

Q: Is it hard to go from appearing with Barack Obama before 20,000 cheering people in West Philadelphia to the Kingsessing Recreation Center, where a crowd of people boo and hiss at you for three hours?

A: I said that every day is not going to be a party and a parade. I know within myself that I care. So when people stand up at meetings and say you don't understand, you don't care or you don't see . . . it's one of the reasons, often why I respond: 'One, yes I care; two, I'm from here; three, I went to that rec center, that library.'

Yes, I really do know and understand what you're talking about. But I'm in a job that requires me to make certain decisions. I cannot run out of money.

Q: Looking forward, do you think all of your Cabinet members will be here a year from now?

A: I would certainly hope so. But again, having been in government a while, we have some tremendously talented and really skilled people around here. There's nothing to say that any one of them wouldn't get approached to do something else.

Q: Personally, what has the transition from councilman to candidate to mayor been like for you and your family?

A: Lisa and Olivia [his wife and daughter] know and understand that I love them both very much, but they also know that I am very committed to what I am doing. They both really appreciate the commitment I have made. This has certainly been a family experience . . .

This job of course is very different from my time in City Council. The big issue is still always time. For the most part, for legislators, time is pretty much your friend. You work on what you want to work on . . .

For the executive, time more often times than not is your enemy. You have multiple things coming at you all at the same time. You have to make a series of decisions every day that have short-, medium- and long-term implications. It's a thinking, breathing, functioning, decision-making job. *