On Tuesday, January 28, 2025, the Cle Elum City Council approved a motion authorizing Mayor Lundh to file for Chapter 9 municipal bankruptcy and to retain John Kaplan of Stoel Rives LLP as counsel for that purpose.

The City of Cle Elum filed for Chapter 9 municipal bankruptcy on June 24, 2025, in the U.S. Bankruptcy Court for the Eastern District of Washington. The case is In re City of Cle Elum, Case No. 25-01128-WLH9.

The filing followed a $25.9 million arbitration award in favor of City Heights Holdings, LLC, arising from a development agreement dating to 2011. According to the City, the award was accruing interest at 12%, and City Heights had begun garnishing City bank accounts after settlement negotiations failed.

On July 14, 2026, Bankruptcy Judge Whitman L. Holt ruled that Cle Elum had filed in good faith and was eligible for Chapter 9 relief, allowing the bankruptcy to proceed over City Heights’ objection.

WeHeartCleElumRoslyn, SPC is exploring the legal, financial, operational, and community implications of a possible change in Cle Elum’s form of government, including the differences between the mayor-council and council-manager structures.

No political action committee or ballot committee has been formed, and no petition or ballot campaign is currently underway. This exploratory initiative is not presently organizing support for or opposition to any candidate, recall, or ballot proposition.

All funds contributed to date were personally provided by Karl Ohlemann. No third-party donations have been received. The funds remain held in the WeHeartCleElumRoslyn, SPC account and are separately tracked.

Before undertaking any petition, ballot-measure, recall, candidate-support, or other election-related activity—or accepting outside funds for such activity—the appropriate organizational, legal, accounting, and public-disclosure requirements will be determined.

Learn more about Washington municipal government structures through the Municipal Research and Services Center.

Additional community information is available at https://weheartcleelumroslyn.com/.

For the community,

Karl Ohlemann

WeHeartCleElumRoslyn, SPC