'A kick in the stomach': Federal government nixes $20M grant for Butte wellness center

The federal government canceled a $20 million grant for Butte-Silver Bow to build a community recreation and wellness center, only hours after county officials were given the OK to start drawing and spending the money.

J.P. Gallagher, Butte-Silver Bow’s chief executive, said Monday the Environmental Protection Agency sent a cancellation notice late Friday afternoon. The decision is part of the U.S. Department of Government Efficiency’s spending cuts nationwide under the Trump administration, he said.

County officials knew the funding was in jeopardy, but Gallagher had previously expressed optimism it would still come through and the center would be built near the Civic Center in the next three years.

“The crazy part about the termination was we were just given authorization to start drawing down funds from the grant Friday morning,” Gallagher told The Montana Standard early Monday.

He said Butte-Silver Bow is considering a legal challenge to the decision, saying the county had signed a contract for the grant. He noted that numerous lawsuits have been filed across the country in response to DOGE cuts.

“It’s a kick in the stomach for sure,” he said.

He elaborated on his frustration later Monday, saying the EPA’s decision was a “devastating setback for Butte and the future of the Butte-Silver Bow Community Hub.”

The Dennis and Phyllis Washington Foundation announced in March that it was giving a $15 million grant to support construction of the so-called Butte CommUNITY Hub in Butte.

That and the potential for another $2.5 million in foundation money is still on the table in case the federal grant is reinstated, Gallagher said. But it was “matching” money to supplement the project and provide more programs at the center, he said, not to fund it outright.

County and EPA Region 8 officials announced in January that the facility would receive a $20 million grant from the agency’s Environmental and Climate Justice Community Change Grants Program.

As planned, the center would serve a host of functions, ranging from providing recreation and wellness programming and facilities to a shelter during times when wildfire smoke diminishes air quality and threatens health.

The cancellation notice came late Friday afternoon in an email letter from Sarah Hulstein, an EPA award official.

“This EPA Assistance Agreement is terminated effective immediately on the grounds that the remaining portion of the Federal award will not accomplish the EPA funding priorities for achieving program goals,” she said in the letter.

The priorities include “ensuring that the Agency’s grants do not conflict with the Agency’s policy of prioritizing merit, fairness, and excellence in performing our statutory functions,” the letter said.

“In addition to complying with the law, it is vital that the Agency assess whether all grant payments are free from fraud, abuse, waste, and duplication, as well as to assess whether current grants are in the best interests of the United States,” it said.

The letter said Butte-Silver Bow had 30 days to appeal the decision to the EPA.

Gallagher suggested an appeal might come in the form of a lawsuit.

“This project was designed to provide safe shelter, create opportunities, and strengthen our economy,” he said in a statement Monday afternoon. “Thanks to the Dennis & Phyllis Washington Foundation, we formed a public-private partnership, securing $15 million with an additional $2.5 million in matching funds.

“Losing federal support now threatens a carefully planned, deeply backed vision,” he said. “We will continue fighting to ensure Butte receives the investment it rightfully deserves."

President Donald Trump created DOGE through an executive order on the day he was inaugurated on Jan. 20, saying it was needed to combat “massive waste and fraud” in government spending amid a $36 trillion national debt.

Trump put billionaire Elon Musk in charge of the effort and the agency said last week it had cut at least $160 billion so far. The cuts have sparked protests across the country and an anti-Trump rally in Butte last week drew an estimated 200 people, but the agency says it has no intentions of slowing down.

Gallagher said county staff had spent a "ton of time" on the wellness center project, including applying for the grant, and the center would have benefited "everyone from toddlers to seniors."

Gallagher knew for weeks in late 2024 the grant was a possibility and on Jan. 10, at a ceremonial announcement at the Civic Center, he and federal officials declared it a done deal.

In February, even as DOGE cuts and other Trump administration actions gained steam, Gallagher was hopeful the grant wouldn’t be affected.

“The funding has been appropriated by Congress, and while there were concerns about the potential for the award to be retracted, it appears that this is unlikely,” Gallagher said then.

He said Monday that “everything was a go” as of Friday morning, when he received an email from an EPA grants office in North Carolina saying the county could start drawing the money in seven to 10 business days.

Gallagher said Butte-based Water and Environmental Technologies had been chosen to oversee the construction project and a contract for the work was to go before commissioners in a week.

That all changed late Friday afternoon when he received the cancellation notice, he said.

He said the event on Jan. 10 was more than announcing a grant, it was announcing a legal contract. That made Friday's cancellation even more frustrating, he said.

“We believe we have really good legal standing” to challenge the decision, he said.

Democratic presidential candidate Kamala Harris won Butte-Silver Bow County by 7 percentage points in the November election, 51% to 44%, and she won Anaconda-Deer Lodge County by a single point, 49% to 48%. She also won Gallatin, Glacier and Missoula counties.

But Trump won all of Montana’s 51 other counties, won the state by 20 percentage points and won the presidency with 312 electoral college votes. Harris got 226.