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Modesto money trouble is opportunity, challenge

Greg Nyhoff's first week on the job as Modesto city manager looked deceptively easy in early June 2008.

The City Council was about to pass a $120 million budget for its general fund, a sum that recognized a steady but slight decline in tax revenue from the previous year.

It didn't take long for that negligible drop to turn into a gush of red ink.

Nyhoff, 49, spent the next 11 months getting to know Modesto while trying to shore up a $15 million deterioration in the city's general fund revenue, a crisis that compelled a round of early retirements and layoffs that claimed roughly 100 jobs in City Hall.

Modesto's economic emergency remains Nyhoff's most pressing challenge. More cuts are expected because of the state's inability to balance its budget.

"When you're a new city manager, you want to come in and make things better. That's not what happens when you're out $19 (million) or $20 million," he said.

But money trouble is an opportunity for Nyhoff to leave his mark on City Hall much more quickly than he imagined.

Depleted coffers provide momentum to consider partnerships with private groups just as they enable Nyhoff to hire a roster of executives in the top ranks of city government.

In coming months, he's expected to hire a police chief, parks director and human resources director.

He's also pursuing shake-ups that will result in a couple more executives answering directly to him by creating a budget office and a Public Works planning department.

Those hires will leave Nyhoff's fingerprints all over City Hall.

"I have a challenge," he said. "I know it's a hard time for the people suffering with unemployment and crime.

"I have a chance to make a big difference with the city of Modesto. I'm very excited about the challenge."

His goals center on improving accountability, community partnerships and economic development.

Small, steady adjustments

Council members have noticed him making small changes toward his priorities, such as demanding clear reports on city business for public meetings and encouraging a customer-friendly approach when residents and businesses come to their local government.

Observers say those relatively minor adjustments contribute to bigger shifts in the top floor of Tenth Street Place, such as Nyhoff's frank relationships with union leaders and the tough budget proposal he advanced last week at a series of public hearings.

"He says he's going to do something and he does it. He follows up," Mayor Jim Ridenour said.

Nyhoff is eager to tackle Modesto's perennial black eyes: its status as the nation's car theft capital, gangs, graffiti and high unemployment.

"We will not stop our pursuit of losing some of those rankings," he said.

Some think he can make headway despite the recession.

"He's very perceptive, he's very sensitive and he's very decisive, all of which are critical traits at this historic time," said PMZ Real Estate President Mike Zagaris.

Nyhoff came to Modesto by way of Colorado Springs, Colo., where he was an assistant city manager. He impressed Modesto council members with what they perceived as a direct manner of communicating and an openness to looking at obstacles in new ways. His competition for the job was Parks, Recreation and Neighborhoods Director Jim Niskanen, whom council members praised for years as a creative and efficient leader.

It wasn't an easy choice, but the council opted for Nyhoff by a unanimous vote. Some council members were drawn to the idea of bringing in someone from the outside to take a fresh look at city government.

Nyhoff is "not status quo. He's the guy who wants excellence," Councilman Brad Hawn said.

Nyhoff gave himself a flexible schedule to become acquainted with Modesto: three months dedicated to meeting Modesto employees and learning about city government and three months getting out on the town to meet with businesses and community groups.

After that, he planned to begin making changes in local government.

"He took it upon himself to learn as much as he could. Even when we don't agree with him, he's honest. He really is," said Jan Marie Ennenga, executive director of the Manufacturers Council of the Central Valley, which lobbies for large industrial companies around Modesto.

Tom McCarthy, president of Modesto's largest public employee union, said Nyhoff followed through on commitments he made in that time.

"I just can't express enough how nice it's been for MCEA to have someone in upper management who has done what he said and been honest with us about the difficult choices that lay ahead," said McCarthy, of the Modesto City Employees Association, which has struggled to reach contracts with the city in recent years.

'Stressful moments'

Nyhoff remembers his most difficult moments as times when he had to ask department leaders for increasingly steep shares of their budgets.

"One of the first things I had to do was tell (Community and Economic Development Director) Brent Sinclair, 'I need 28 percent of your budget,' and he says, 'I already gave you 12.'

"There were a lot of very stressful moments at this table," Nyhoff said in his office.

He puts the cuts in perspective, usually spending a few hours out of BlackBerry contact with his family every night. He likes to visit the Gallo Center for the Arts, or drive along the orchards and dairies that ring Modesto.

One more big perk for a guy who spent most of his life in the Rockies:

"For the first time in my life I don't have to shovel snow," he said.

Bee staff writer Adam Ashton can be reached at or 578-2366.