One of the sculptures in the new City Hall art gallery consists of rather rowdy dogs and other small animals in party hats, lounging around a table; toppled chairs serve as evidence of the raucous time they've had.

A few nights ago, Gary Steuer, the city's chief cultural officer, was working late in his office when he heard noises from the gallery.

Peeking in, he saw a worker setting the table and chairs aright.

"No! No!" Steuer exclaimed to the startled worker. "You can't do that - it's art!"

Indeed it is, a whimsical sculptural installation called Surprise Party, by Darla Jackson - part of the inaugural exhibition mounted in Room 116 of City Hall, a highly visible space, once home to the Mayor's Action Committee, with innumerable cubicles and a dreary paint job.

The Art Gallery at City Hall - now its official name - formally opened at a Wednesday evening reception. An open house for the public is scheduled from 10 a.m. to 4 p.m. Thursday.

Arrayed around the new gallery, on the ground floor of City Hall's east side, are new offices for various cultural and arts programs - Steuer and his staff, plus the staff of the reinvigorated Cultural Fund. Before this week, Steuer's offices were lodged in an obscure and dingy suite of rooms on the seventh floor of City Hall.

Art and its agents, for the first time, are now united in one public, accessible location (no sign-in sheet or security check required) - tangible evidence of Mayor Nutter's insistence on bringing the arts into the larger policy-making arena.

Nutter promised to resurrect the city's Office of Arts and Culture, which he has done. Steuer argues that his own presence makes good on the mayor's promise and that the opening of the new gallery "is not just another PR move."

Rather, the gallery and the now-centralized cultural offices - the Cultural Fund offices had been at 1515 Arch St. - are "a reflection of the mayor's commitment to arts and culture as central to the city."

The Office of Arts and Culture was shuttered in a budget squeeze in 2004, during the Street administration. Arts organizations urged its revival, and Nutter campaigned on a promise to do so.

"I'm here," noted Steuer, "and that's a major thing. The fact that my office, my position is at the cabinet level is very important, and that wasn't the case even in the Rendell administration."

What that means, Steuer said, is that the perspective of arts and cultural organizations - what Nutter calls the "creative economy" - gets plugged into the thinking of other city agencies at the highest levels.

One result of this new arrangement can be found in the city's decision to use some federal stimulus money for redevelopment and conversion of various buildings into art-related facilities. That came about because of Steuer's discussions with deputy mayors, Housing Authority and Commerce Department chiefs, and officials at the Philadelphia Redevelopment Authority - discussions made possible because of the authority vested in his own position.

In another instance, the city is in the running for a substantial federal grant that will bring a design focus to "connector streets" leading down to the Delaware River. Steuer's talks with the Streets Department and the Delaware River Waterfront Corp., the successor to the Penn's Landing Corp., led to that possibility.

"The planning process is a reflection of what comes down from the mayor," Steuer said. "Arts and culture is part of how we think about the city, how we think about education, how we think about transportation."

The new gallery, he said, is another instance of the city's cultural focus and willingness to work with outside funders (PNC Arts Alive, Chuck Block, and the Block Family Foundation helped finance the renovation, and InterfaceFLOR provided "environmentally friendly" flooring).

Three artist-run organizations were asked to curate the show - Philadelphia Sculptors, InLiquid, and the Center for Emerging Visual Artists. A dozen artists are featured in the exhibition, dubbed "On the Rise," which is open 9 a.m. to 5 p.m. Monday through Friday until Aug. 6. It will be followed by exhibitions related to citywide festivals, such as Design Philadelphia, in the fall.

The city's budget woes - in the past, almost certain to devastate public arts funding - are proving more manageable. Steuer said the Cultural Fund just had $240,000 cut from its $3.2 million fiscal 2011 budget, part of $20 million in citywide reductions made by Nutter.

Even so, the fund is moving forward with $357,000 in "Youth Arts Enrichment Grants," created to support projects and programs focused on young people in and out of school.

"This office has become a place where people can go for help," he said. "We've become a portal for the arts in working with the city."

Contact culture writer Stephan Salisbury at 215-854-5594 or ssalisbury@phillynews.com.