The smallest city in Mendocino County is grappling with some of its biggest economic challenges, as city officials weigh budget cuts and federal funding uncertainties that could impact local operations.
During a recent city council meeting, City Manager Peggy Ducey presented a mid-year budget review that highlighted both fiscal progress and looming financial hurdles. While Point Arena reduced costs significantly in the first half of the fiscal year—saving $269,000 in salaries and $46,000 in operations—Doocey warned that such savings came from unsustainable cuts.
“We saved hard costs on the budget, $316,000,” Ducey said. “Staff has worked very hard, both in the field as well as here in the administrative offices. But these cuts are not a long-term solution.”
Adding to the city’s concerns is the potential loss of federal funding. Ducey expressed uncertainty over the future of several grants, including those from the U.S. Department of Justice for law enforcement, as well as Housing and Urban Development (HUD) and Community Development Block Grants (CDBG), which support affordable housing projects.
“Over the weekend, the administration talked about eliminating HUD grants,” Ducey said. “FEMA also recently pulled funding from New York City, and we have about $150,000 in storm-related reimbursements tied up at the federal level. While most of that funding has been approved, $50,000 is still uncertain.”
Another major concern is a no-interest loan the city had hoped to secure from the U.S. Department of Agriculture to finance the Windy Hollow road repaving project, estimated to cost between $700,000 and $800,000. With federal funding in question, Point Arena will need to explore alternative financing options.
Looking ahead, Ducey said the city will need to tighten spending while seeking new revenue sources. One option under consideration is restructuring business license fees to ensure that larger companies, such as delivery services and internet providers, contribute their fair share.
“We have a lot of mom-and-pop stores that I don’t want to impact,” she said.
Residents at the meeting praised Ducey’s leadership while urging action on revitalizing Point Arena’s deteriorating downtown.
“I just went up the coast up to Oregon and I just, you know, it's really obvious from all the different businesses that are closed that the coast is really in a depressed economic state,” said Jennifer Smallwood. “But I gotta say, Point Arena really stands out in that. I mean, the way the way that we present ourselves compared to the rest of the coast is really embarrassing.”
Kevin Harrison echoed the call for change, advocating for stricter code enforcement to improve the city’s appearance and maintain public safety.
“The community rightfully expects its members to voluntarily conform with rules that serve public safety, health, and welfare,” Harrison said. “But some need additional encouragement, and that’s what we’re after with our code enforcement.”
As 2025 approaches, city leaders are bracing for difficult decisions while searching for innovative ways to sustain Point Arena’s economy and improve its public spaces.
