Rosalia on list of struggling locations

ROSALIA, Wash. – An antique green clock stands in the middle of this old farming town, its hands frozen in time.

Residents say this is a far different town than it was in the 1970s, when trains and traffic rumbled through. In 1975, the state highway bypassed the town and the population gradually dwindled.

 “We had two grocery stores, six churches, three taverns, a clothing store, two hardware stores, a doctor, a dentist, a tax accountant, a lawyer and jewelry store,” said Karren Wallace, manager of the Rosalia branch of the Whitman County Library.

Today, Rosalia is one of 28 Washington cities and towns showing “declining financial conditions,” according to a report last year by the state auditor’s office. In 2007, only six towns were designated as facing such economic troubles, which can threaten their ability to serve residents and taxpayers, according to the auditor’s office.

(Video by Stevee Chapman)

The report highlighted the challenges facing such towns, which also include Sprague, Springdale, Port Townsend and Long Beach. In addition, hospital districts, school districts, counties and fire districts made the list; in total, 88 of the state’s 2,190 public entities face declining financial conditions, the report found.

The recession – coupled with a reliance on sales and property taxes, as well as unfunded state mandates – has led to economic woes for many of the state’s small towns, according to Michael McCarty, CEO of the Association of Washington Cities, a nonprofit that educates and trains the state’s cities in governing.

 Still, “the likelihood of cities going bankrupt or dissolving is relatively small,” McCarty said. Mostly, “it’s the recession that’s catching up to them.”

In Rosalia, a cultural and economic shift has added to the struggles, some residents say. The farm town’s appeal to young people isn’t as strong as the pull of bigger cities. In the 2000s, the town’s population dropped by nearly 100 people to 550, according to the U.S. Census Bureau.

“As people retired and closed their businesses, other people would just drive to Spokane for those same services, and so no new businesses were being built to replace them,” said Wallace.

 State auditors reported that the town had cut its reserve fund for the police department and a fund to replace city equipment.

 Rosalia Mayor Jim Stenhouse acknowledged the town has struggled in the current economy, but said overall it has been doing fine.

 Rosalia Councilmember Nanette Konishi, who criticized the audit, believes the town has a future.

 “This area is going to be a big tourist destination,” Konishi said. “Rosalia is the gateway to the Palouse byway.”