More than 500 small Minnesota cities opted not to take federal COVID aid

‘To be honest, we have no need for it’ one city clerk said

By: - January 5, 2022 6:00 am

The town of Vermilion, Minnesota, is one of more than 500 small towns and cities across the state that chose not to take federal pandemic stimulus funds. Photo by Nicole Neri/Minnesota Reformer.

Solway, Minnesota, population 73, is so small it doesn’t have police officers, just a handful of elected officials.

There’s City Clerk Jennifer Trammell, her husband (a city councilman) and other council members who get paid to meet monthly, primarily to maintain the city.

“It’s a very small, simple city,” Trammell said. “We have like three paved streets within our city.”

Solway leaders decided not to accept money that the federal government offered to help it cope with the COVID-19 pandemic.

“There would’ve been no way for us to use any of the money,” Trammell said.

Solway is not alone. It’s one of 506 small Minnesota towns and cities that opted not to take a piece of a nearly $20 billion federal stimulus pie set aside for small towns across America.

About all they would have had to do is say “yes” — no lengthy application, no competitive bidding — but they said no. Or more accurately, they didn’t say yes.

They’re all small towns, with populations ranging from five to 2,329 people, and their average payment would have been about $23,000, according to Amy Jorgenson, director of Minnesota’s COVID-19 Response Accountability Office, which administers the federal funds. Another 2,100 Minnesota cities and towns did request the money.

ARP Money for Every Town

In 2020, about one-third of small U.S. towns got left behind by the $2.2 trillion economic stimulus CARES Act signed by President Donald Trump. So when Congress passed another $1.9 trillion pandemic stimulus package last year, the American Rescue Plan Act, it included money for every city, town and village nationwide, if they wanted it.

About $2 billion was set aside for cities and towns with fewer than 50,000 residents.

In Minnesota, nearly $12 million was not claimed and was redistributed to other cities.

Some small towns (although none in Minnesota) even formally rejected the aid. In 12 states with complete data, 175 small communities rejected the funds, according to the National League of Cities. Those cities had a median population of 348, and the median amount they could have gotten was about $77,000, according to Martin Brown, program manager in the Center for City Solutions at the National League of Cities.

“Fifty-thousand can get you maybe two streetlights,” Brown said.

The deadline for smaller Minnesota cities to say yes to the largesse — $377 million in ARP funds — was Oct. 11. Half of the money has been distributed so far.  

Even though the cities didn’t have to apply for the funds, Brown said many of them probably don’t have the workers to manage the money. The funds can be used for administration, so the League encouraged small towns to take a shot at it or partner with neighboring towns or counties on a project.

“These places are unbelievably small,” Brown said. “A lot of these small towns and villages have never received federal funds.”

For Burial Service, Call John

Like McGrath, Minnesota, with a population of 80, up from 70 in 1970. It’s a city whose largest employer is the city, with five employees — one more worker than the four employed over at Pour Lewy’s Saloon, according to the city website.

Or Bena, Minnesota, population 116, where the city hall voicemail says if you’re looking for cemetery burial information, call John at another number.

Or Watson, a city in Chippewa County that calls itself the “Goose Capitol of the USA,” due to the large number of Canada geese that migrate through every fall. Call the city clerk and you get a voicemail that says, “If this is a water or sewer emergency, call Byron.”

Or Chickamaw Beach, which is 30 miles north of Brainerd on the shores of Norway Lake. It has a population of 128 and is “growing rapidly,” according to City Clerk Edward Henk.

He’s one of two full-time city employees; the other is the town treasurer. The city council and mayor get paid by the meeting, but the city has no businesses, schools, fire department or police department.

“It’s basically maintaining our neighborhood,” Henk said. “It’s pretty quiet.”

Henk knew about the ARP funds, and city officials thought about taking the money, but decided against it.

“To be honest, we have no need for it,” he said.

They were planning to build a city hall, but those plans fell through, so they had no project for the funds, which can be used for everything from expanding broadband service to upgrading water infrastructure.

In Solway, Trammell said it would “take us 20 years to spend” $77,000.

Also, she added, “it just seems like a ton of paperwork” and being city clerk is just a side gig for her.

“I do have a job,” she said.

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Deena Winter
Deena Winter

Deena Winter has covered local and state government in four states over the past three decades, with stints at the Bismarck Tribune in North Dakota, as a correspondent for the Denver Post, city hall reporter in Lincoln, Nebraska, and regional editor for Southwest News in the western Minneapolis suburbs.