Former City Councilman Michael Nutter - the reformist policy wonk with a ferocious work ethic - was elected mayor of Philadelphia yesterday.

Nutter, 50, was widely expected to easily wallop weak Republican opponent Al Taubenberger and he did. With 96 percent of the vote counted, Nutter won 82.5 percent of the vote, compared with 17 percent for Taubenberger.

Soon Nutter will be packing his boxes for City Hall's room 215. In January he's taking over a city battling a devastating homicide rate, weakened by underfunded schools and facing a looming budget crisis.

Be careful what you wish for, eh?

Now that he's stuck with the job, Nutter must rapidly develop his policy plans, hire staff and manage a transition into office. And given that he's probably a little overworked, we thought we'd help him set his priorities.

So listen up, Mike. Here are the Top Five Challenges Facing the Next Mayor :

1) Crime

2) The rising cost of city pensions and health benefits

3) Neighborhoods

4) Philadelphia Gas Works

5) Restoration of civic pride


Talk about a no-brainer.

By far the most urgent problem facing the city is the horrifying rise in homicides and shootings. Just last week three Philadelphia police officers were shot, one fatally.

Starting today, the pressure is on Nutter to find ways to stem the blood.

"There won't be a honeymoon time for him," said Patrick Carr, a sociology professor at Rutgers University. "This is a problem that has festered for so long, he's in the unenviable position of having to deal with it very quickly and having very little margin of error."

Some of Nutter's initial moves are clear.

First, he needs to appoint a police commissioner. That choice is expected to come soon, perhaps in the next few weeks. The jury is still out on whether he'll pick a Philly cop for the job, or an outsider.

"Everyone is expecting he'll appoint someone new, but who knows," said Ralph Taylor, a criminal-justice professor at Temple University.

But getting a guy - or gal - in the top job is only the beginning. Nutter has spoken extensively about changing the culture of policing in Philadelphia and attacking violence head-on.

Nutter's plans include declaring crime emergencies in the city's worst neighborhoods, which could allow cops to close streets or set curfews. And he has said he will encourage cops to use "stop and frisk" police tactics to seize illegal guns.

But Carr also stressed that Nutter will have to work with residents to fight crime.

"Job number one will be winning the trust of the citizenry," Carr said.

Taylor agreed that Nutter will have to be inclusive as he develops crime-fighting plans.

"He has obviously already chatted pretty diligently with the folks with the pointy-headed hats," said Taylor. "I would hope that he's really getting input from a broad group of folks, and not just academic folks."

That kind of input will be key as Nutter moves forward, Taylor said.

"Michael Nutter has said very clearly what he's going to do on day one," Taylor said. "It will be very interesting to see what happens on day one, day two, day 30."

Regardless, a rapid turnaround in homicides seems unlikely.

"It's going to be one of these incremental things. We're not going to see a dramatic falloff," Carr predicted. "They have to constantly monitor what is working and look at the underlying trends."

Pension & health-care costs

Say what you will about leadership and vision, a Philadelphia mayor can't achieve his goals if he can't pay the bills. And in recent years, two of the city's most significant expenses have been growing explosively: pensions and health care for its 30,000 employees.

Although Nutter said little on the campaign trail about negotiating contracts with municipal workers, there's no doubt that pensions and health benefits will be the biggest items on the table when talks begin on contracts to take effect July 1.

This year, the city is paying about $430 million to the pension fund, a $4.1 billion pot of money jointly managed by the city and the four municipal unions. That's more than double the amount that the city paid into the fund when Mayor Street took office in 2000.

That's the crux of the problem. Present and past mayors - not only Street, but also Ed Rendell, Wilson Goode, Bill Green and Frank Rizzo - chronically underpaid the pension fund, leaving it with barely half the money it ought to have to meet obligations.

The city's actuaries - statisticians who work over city payroll figures, life-expectancy estimates, investment-performance reports and other data to calculate the city's pension needs - reported in May that the city's retirement system is underfunded by $3.9 billion.

The city has a plan to make up for those underpayments. It will require record contributions over the next 20 years, but less if the pension fund's investments are unusually successful, or if the unions agree to reduced pension benefits in the future, perhaps for newly hired city employees, if not those already on the payroll.

Union leaders say they're not to blame for past underfunding of the pension, so it shouldn't be taken from their hides. But private employers throughout the country have been moving away from defined-benefit plans like the city's, which guarantee certain payments to retirees, and toward defined-contribution plans in which the employer makes a payment up-front and workers invest the money themselves.

Like everyone else's, the city's health-insurance costs have mushroomed in recent years, up 60 percent from the beginning of the Street administration through mid-2006. A study by the Pennsylvania Intergovernmental Cooperation Authority (PICA), comparing health benefits in seven big cities, found that Philadelphia's expenses - an average of $12,623 per employee - were exceeded only by Detroit's.

Among the options: requiring city employees to contribute toward their health-insurance costs and reducing their premiums if they participate in fitness or wellness programs to help them lose weight or lower their cholesterol, for instance.

Regardless of the pressure that pension and health benefits put on the city budget, Nutter's aides say, the new mayor will not abandon his plans to continue incremental cuts in business and wage taxes.

"Cutting taxes is the only way we're going to make the city stronger in the long run and create jobs," said adviser Terry Gillen.

Philadelphia Gas Works

When Nutter moves into City Hall, he'll have to deal with one nasty fiscal leak - the Philadelphia Gas Works.

The city-owned utility has almost $1.3 billion in debt and is unable to earn enough money to pay for its own capital improvements.

But on election eve, Nutter wasn't promising to sell the utility, nor was he saying it's on the verge of collapse.

Rather, he noted that the recent $25 million base-rate boost approved by the state Public Utility Commission was not enough. The company had sought $100 million.

"Clearly, the company needs the money, and yes, we're all very concerned about rates, but you can't run a place with no money," he said. "I want to entertain ideas from the private sector about the company's future operations. Certainly, the PUC's rate relief has not helped the financial picture of PGW."

In fairly rapid order, Nutter wants to see the most recent analyses of what's going on at PGW. He said any solution to PGW's fiscal woes will, of necessity, involve the state, "and we will have to look at the private sector to see what we can do to stabilize the company."

He plans to work with state Rep. Dwight Evans, who is pushing legislation that would give the PUC new authority to merge a troubled gas utility with another company - Exelon, for example. A hearing on the legislation is set for Friday.

When Street took over in 2000, PGW was in much deeper crisis, but over the last eight years, the management team has improved the bill-collection rate and the customer-service operation.

Company execs are hiring a consultant to guide the utility to dramatic cost savings, in the range of $35 million a year. Its labor contract expires in May 2010.


If John Street had four more years as mayor, he'd have borrowed more money to keep perhaps his most successful program, the Neighborhood Transformation Initiative, going and going.

But Michael Nutter flatly rejects that approach to neighborhood renewal, at least for the next four years.

Asked whether he'd support an NTI II bond issue, Nutter said in an election-eve interview:

"I'm not going to sit here and say we're going to borrow more money. The city is rapidly reaching its debt-service limit."

For Street, the first $296 million NTI bond issue, later supplemented with $65 million to spur redevelopment in neighborhood commercial corridors, became the centerpiece in an effort to attract private- sector investment and attack generations of blight and abandonment in residential neighborhoods.

Nutter says he wants to increase the production of affordable housing, in part by changing the terms of the successful 10-year tax-abatement program and directing 10 percent of the tax savings to the Housing Trust Fund, which supports new housing for low-and moderate-income residents.

He also wants to shorten the abatement in neighborhoods with strong real-estate markets and increase the abatement to 15 years in neighborhoods that have weak private investment.

Nutter says he also wants to carry through on an unrealized pledge of NTI to move vacant property to a city land bank and on to new owners far faster than can be done now.

"We have an increase in the homeless population because we aren't investing enough in transitional housing and low- and moderate-income housing," Nutter said. "I want to work on getting the private real-estate market energized around the development of more low- and moderate-income housing."

Restoring civic pride

We need our mayor to do more than pave the streets and balance the budget.

We need him to tell us the truth, to build our confidence, sometimes express our grief, and yes, inspire us.

Nutter can learn good and bad lessons from his predecessors about this.

While Mayor Street can be an effective public speaker, he lacks an intuitive sense of communication and has never grasped the importance of the public-relations side of the job.

That's one reason why a recent Daily News Keystone poll found 73 percent of voters believe the city is on the wrong track.

Rendell earned a reputation as a master salesman and cheerleader for the city, but there was more to it than pep talks at ribbon cuttings.

He made tough, honest speeches about the city's problems and created images that projected change and optimism - including memorable photos of the mayor scrubbing a bathroom floor at a City Hall cleanup and leaping with kids into a city swimming pool that was opening on time for a change.

Former press secretary Kevin Feeley said good public relations won't cover up bad governing, but they matter.

"We did these symbolic things, like the City Hall cleanup, that said there would be a new way of doing business," Feeley said. "And they helped create the public spirit that allowed the substantive work to get done."

"Michael Nutter has to find a style that's suited to his personality," said Paul Levy, director of the Center City District. "We're a city that's easily fragmented, and we need a mayor who's candid with us about our challenges but appeals to the best in us. We want to see our mayor out there, in the press, on TV, representing the city."

The lesson for Nutter: A mayor can't just walk the walk. He has to talk the talk, too. *