In a rare bit of good news for the city's prison system, the inmate population has dropped steadily for the first time in six years.

Just a year ago, officials feared what seemed the inevitable: a jailed population greater than 10,000.

But the count has declined each month since January, when the prisons housed an average of 9,787. The average this month is 9,342.

"Unlike the stock market, the trend is really good," Common Pleas Court President Judge Pamela Pryor Dembe said.

City officials discussed the shrinking figure yesterday at a meeting of the Criminal Justice Advisory Board. Chaired by Dembe and Deputy Mayor Everett Gillison, the board of a dozen or so criminal-justice officials focuses on coordinating multiagency efforts to encourage efficiency in the courts and reduce crime.

Compared with the two previous years, however, Philadelphia's jail count was higher each of the last five months. The average in March was 9,501, up from 9,142 in March 2008 and 8,652 in March 2007.

Nevertheless, the month-to-month declines this year defy annual trends.

"Usually winter is a little bit lower, so it is unusual we would be below the winter numbers at the end of May," said Bob Eskind, spokesman for the Philadelphia prison system. "Typically, the population rises right up through October, drops through winter, and picks up again in spring. Right now, we're not seeing that."

While there appear to be several reasons for the drop, the main factor is an agreement between the District Attorney's Office and the state Department of Corrections that has resulted in the transfer, to the state prison at Graterford, of 173 Philadelphia inmates sentenced to two or more years.

At the same time, judges are sending fewer inmates with sentences of at least two years to Philadelphia jails: 118 such prisoners were sent to a city facility in the first four months of 2008, but just 51 in the same period this year.

Additionally, Philadelphia jail admissions this year are 425 below what they were last year through this date.

"There's reason for good optimism here," said Sarah Hart of the District Attorney's Office.

She also noted two court-related programs recently implemented, one focused on processing technical violation hearings earlier, and another aiming to consolidate criminal cases with possible violations of probation, with a goal of reducing jail time as defendants wait for trial.

Still, Prison Commissioner Louis Giorla cautioned that despite the decline, jails tended to grow more crowded beginning in early summer.

Eskind, the prison spokesman, agreed. The reduction "has not been sustained long enough to say these approaches are working," he said, "but it looks good."

In a related matter, District Attorney Lynne M. Abraham, a member of the criminal-justice board, disclosed yesterday that the administration had lost an opportunity to receive $3 million to help released prisoners readapt to society with jobs, housing, and educational programs.

The idea was to use the donation to get more companies to hire ex-offenders in a public-private venture.

The source of the money was the Lenfest Foundation, led by philanthropist Gerry Lenfest. The proposal was for $1 million a year for three years, with a stipulation that the city match the grant.

Given deep budget cuts facing nearly every city agency this year, Gillison said, "it was foolhardy to say we could do the match."

Yet a few weeks ago, he figured out a way to secure most of the $3 million match, including by applying for a federal grant, Gillison said.

But it was too late. The offer was withdrawn.

"The foundation was interested in supporting some reentry initiatives in the city but decided to go in another direction," said Keith Leaphart of the Lenfest Foundation. It is now considering giving money to support alternative sentencing programs.

Gillison isn't giving up. "The mayor is meeting with Mr. Lenfest, and I want to keep it at that."

Contact staff writer Marcia Gelbart at 215-854-2338 or mgelbart@phillynews.com.