Just over a year ago, the City of Point Arena was teetering on the edge of financial collapse. Today, it's making a fragile recovery—thanks largely to the dogged determination of interim City Manager Peggy Ducey.
[Peggy Ducey:]
"When I came in, in February of 2024, as the interim city manager, our city accountant resigned in March and told me I needed to hire an attorney to file for bankruptcy for the city. And he took the bookkeeper with him."
[Narrator:]
Ducey didn’t take that advice. Instead, she rolled up her sleeves.
[Peggy Ducey:]
"At the end of March, I opened our bank account, and we had $28,000. But I made a determination that before I was forced to file for bankruptcy, I would try and dig the city out of this hole."
[Narrator:]
One year later, the city’s cash balance has risen to over half a million dollars, with an additional reimbursement from FEMA expected to push it even higher.
But Ducey says the recovery came at a steep cost—particularly to city staff.
[Peggy Ducey:]
"It's been a long, hard process. And a lot of that money was saved on the backs of our staff—both in the field and here in the office."
[Narrator:]
Ducey presided over layoffs and restructured operations. The city now shares employees across departments and relies on volunteers and local businesses to help maintain public spaces.
[Peggy Ducey:]
"I had to lay off another employee, and then combine street work with wastewater duties for one staff person, and pier operations for another. So we’ve not only cut spending to the bone—we’ve restructured to become much more efficient."
[Narrator:]
Along with the better financial outlook, there’s a renewed sense of pride in Point Arena.
[Peggy Ducey:]
"I think the council would agree—the city looks better. Downtown, people have been out cutting weeds. The other morning, I saw a gentleman from the liquor store sweeping the sidewalk and the gutter. It was great—because we can’t always get to everything as fast as people need."
[Narrator:]
Despite improvements in sales and property tax revenues, Ducey cautioned that the city still needs to live within its means.
[Peggy Ducey:]
"The city's not out of the woods yet. When we spent down to $28,000, we ate through all of our restricted funds and our general fund. So now, part of what we’re doing is rebuilding those balances—like the gas tax fund and other accounts that are legally restricted."
[Narrator:]
Much of the revenue coming in is earmarked for specific services—like road repairs, wastewater treatment, or planning—and can’t be used freely.
[Peggy Ducey:]
"Grant revenues are always targeted. They don’t infuse much into our general fund. Our franchise fees, business licenses, rents and concessions—they help. The senior center rents part of City Hall and pays a portion of the utilities. But revenue from the pier and wastewater are part of enterprise funds. Those can’t be used for general services."
[Narrator:]
Ducey says the city needs to build a financial cushion—a reserve it’s never had.
[Peggy Ducey:]
"The Government Finance Officers Association recommends at least a 25% reserve—25% of your general fund. For Point Arena, that’s about $250,000 in a savings account."
[Narrator:]
She also pointed to the city’s $300,000 mortgage on the firehouse as a long-term liability. Paying it down, she said, would improve Point Arena’s credit and help it borrow money when needed—for example, to fix Windy Hollow Road, a project that’s been delayed for years.
[Peggy Ducey:]
"When most cities file for bankruptcy, it's because they have millions in debt—retirement obligations, big liabilities. But for a tiny city like Point Arena, $300,000 feels like a few million."
[Narrator:]
As she prepares to step down next month, Ducey says she’s finally confident the city is on stable footing.
[Peggy Ducey:]
"I made a commitment that I wouldn't leave until I felt like we were stable and moving forward. So—we are. I'm leaving."
[Narrator:]
With the next city budget due in June, Ducey says Point Arena’s careful financial management could soon pay off. If the city keeps its momentum, lenders might offer a line of credit—a safety net it currently lacks.
Previous coverage
Federal Cuts Could Hit Mendocino's Smallest City Hard
City of Point Arena Confronts Fuel Theft, Financial Implosion
