Why six small WA cities left thousands in federal relief unclaimed

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About a block long, Brier’s main commercial strip consists of a pizza restaurant, hair salon, coffee hut and convenience store. Sales tax revenue for the city actually increased during the pandemic as online ordering surged. (Lizz Giordano for Crosscut)

By. Liz Giordano, March 29, 2022


Sifting through the reporting requirements to receive federal pandemic recovery dollars, Brier Mayor Dale Kaemingk just didn’t think his staff had the time to deal with the extra paperwork that came along with the money.

For Brier, a city of about 7,000 people, the decision meant missing out on $1.9 million, equivalent to a little more than half of the city’s general fund expenditures for 2021, which pays for things such as police, fire and other city staff.

Brier isn’t alone. As hundreds of cities in Washington soaked up the federal recovery money, six left their portion unclaimed, walking away from roughly $279 per resident. Some of these small towns said they refused the money because they had not racked up any COVID-19 expenses or the necessary paperwork wasn’t worth the hassle for the funding.

But for two towns, the money — very much needed and wanted — went overlooked amidst a change in leadership in the town.

Part of the American Rescue Plan, the direct fiscal recovery money was intended as a lifeline for cities to respond and rebound from the pandemic. It can be used for things such as public health, replacing lost tax revenue, providing hazard pay to essential workers and household assistance to residents — including rent and mortgage payments. And it could go toward making sewer, water and broadband infrastructure improvements or awarding loans or grants to small businesses.

The six Washington cities passed up a total of almost $2.4 million, representing a tiny portion of what was sent to other towns with residents of fewer than 50,000. In total, 241 other small towns in Washington received nearly $443 million in direct COVID recovery money from the federal government.

About $1.5 billion in federal COVID relief went to the state’s 39 counties. All accepted the money, according to Eric Johnson, executive director of the Washington State Association of Counties.

Brier, the largest city in the state to pass up the federal money, sits in Snohomish County’s southwest corner, sandwiched between Mountlake Terrace and Bothell. The one-store and one-restaurant town is mostly composed of single-family homes. A sleepy commercial strip runs about a block long and hosts a convenience store, pizzeria, hair salon and coffee hut.

“It was my choice to not choose to pursue the relief funds,” said Kaemingk, the part-time mayor and retired structural engineer. “We have very limited staff. I’m always concerned about adding to their workload.”

And the city didn’t have any COVID-related expenses, added Kaemingk. “I’m not sure what we would have used it for,” he said.

During the pandemic, Kaemingk reached out to local businesses in the city, and those that responded were doing OK, he said. “To my knowledge none were interested in receiving the federal funds,” he said.

As in Washington state, around the U.S. few small towns declined their COVID relief money. A study of 11 states by the National League of Cities found less than 1% of funds allocated to the smallest towns went unclaimed, citing limited staff capacity and lack of experience with federal programs as likely contributing factors for declining the money.

Politics may play a small role in rejections of federal recovery dollars across the country. One Arizona county refused $1.9 million in COVID relief, joining a handful of others that turned down the money after raising doubts about the safety of the vaccines without evidence or as public repudiation of vaccine mandates.

Brier City Council members and citizens clashed in February after the new police chief proposed filling long-vacant police department positions with officers who lost their previous jobs over refusing to abide by vaccine mandates. Brier, like many other cities, has struggled to fully staff its police force. Some residents supported the choice to hire the officers. Others wanted the city to look for different recruits.

Kaemingk said declining the federal relief money had nothing to do with vaccine mandates or the federal government’s response to the pandemic.

Fully staffed, the city of Brier has just 19 city employees, eight of whom are its police officers. Clerk-Treasurer Paula Swisher said the city mostly relies on property taxes and actually saw higher than expected sales tax revenue as online ordering spiked during the pandemic. Many local residents continued working from home.

“We didn’t have a bunch of places shut down,” Swisher said. “If the idea of the money was supposed to help citizens and businesses that were out of work — we didn’t have a lot of that here.”

Swisher noted that the city rarely takes money from the federal government.

“We tend to shy away from federal funding. It needs the extra bodies to process that stuff and we don’t have that,” Swisher said. “More money doesn’t hurt. At the same time, depending on hoops and red tape, it’s not always worth it.”

Approximately 100 miles to the southeast, South Cle Elum’s clerk-treasurer listed similar reasons for not taking the $156,000 in fiscal recovery funds allotted to the town of about 560 people.

“We didn’t need anything, we had no COVID expenses,” said the clerk-treasurer, who declined to give her name after answering the phone at the city’s town hall. “We just continued on as usual.”

The required reporting and tracking of the funds also factored into the decision to decline the money. The clerk-treasurer said the decision was made in conversation with the mayor and council, but not formally brought before the elected body for a vote. Interview requests with South Cle Elum’s mayor went unanswered.

In response to widespread concerns about the complexity of the reporting requirements, the federal government broadened the uses of the funds and eased accounting rules earlier this year in an effort to provide greater flexibility to the towns. This included establishing a standard allowance for replacing lost tax revenue and allowing the money to be used for road maintenance and staff retention.

This loosening of restrictions would not have changed matters in Creston, a town of about 230 people roughly 60 miles west of Spokane.

“We didn’t need it because we weren’t impacted,” said Kim Wagner, the clerk-treasurer for the town. “We didn’t have a high rate of COVID in our town.”

The council turned down the $64,000 in a unanimous vote on June 24, she said.

The biggest impact the pandemic had on the town was a bit of lost late fee revenue after a handful of people stopped paying their city water and sewer bill, Wagner said, but in the end everybody paid their bills.

“It’s not that we were opposed to federal money,” said Wagner, pointing to the federal grant money the town is currently using to  improve its sewer system.

In Central Washington, phone messages left at the town hall of Krupp, also known as Marlin — a tiny town of just 52 residents — went unreturned. The state’s smallest town left $14,500 unclaimed.

Mayors in Mesa and Kahlotus said they were unaware the towns missed out on $142,000 and $54,000, respectively, in federal support.

Mesa Mayor Merlin Giesbrecht said the previous clerk-treasurer failed to bring it to his attention.

“We never had a conversation. We always need money,” said Giesbrecht, who became mayor of the town in early 2021.

Giesbrecht listed street maintenance, utility payment assistance and replacing lost tax revenues as just a few areas where the city could have spent federal dollars.

He said the clerk-treasurer resigned last May as the town, about 30 miles north of the Tri-Cities, was undergoing an audit, and the replacement was still learning. Giesbrecht planned to ask the new clerk to look into the federal money.

But that’s unlikely to result in the town receiving any of this COVID relief money. According to U.S. Treasury requirements, cities that didn’t claim the first round of funding are ineligible for the second round.

Janelle Romeike, who has been mayor of Kahlotus for about six months, said she would have taken the money, had she known about it.

“We could definitely use it in our town,” said Romeike, who often comes to town hall after her shift in the human resource department of a potato factory; one of three main employers of the town’s 193 residents.

A lot of people in the town, located about an hour and half west of Pullman, couldn’t pay their city water, sewer and garbage bills, and many lost their jobs after refusing to get the COVID-19 vaccine, Romeike said.

“The whole last two years has been horrible for the whole town,” Romeike said. “Our town is struggling as it is, and COVID did not help.”

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