Investigating the highest incorporated town claim
(Waterville), I set up a DEM of Washington state with Waterville's elevation and above set as gray and areas below Waterville's elevation as green.
Waterville is marked with the small red star
The result shows that there is a lot of area in Washington State that is higher than Waterville. Much of the higher ground is mountainous and the mountains are mostly steep and rugged. Another factor is that Washington State does not have any incorporated ski resort towns despite, or perhaps because of, the large amount of snow fall (Mount Baker Ski area holds the world record annual snowfall).
The north central portion of the state is also mountainous with deep valleys, but also has areas of high country that are moderately sloped with numerous county roads as well as State and US highways crossing the high country. The area has been (and some hope will be) an ore mining area with some mine sites at over 5,000 feet in elevation. Indeed there are a numerous town sites in this area from the long mining history.
Several of these town sites exceed Waterville's elevation, but none of them are incorporated.
Molson, near the Canadian border is over 1,000 feet higher than Waterville; Molson is at an elevation of 3,718 feet. However, Molson was a short lived incorporated town associated with a mining boom in the area and is now a ghost town. Several buildings remain as well as an open air outdoor museum.
Wauconda, is another unincorporated ghost town that is higher than Waterville. Wauconda does have a post office that covers the large geographic area around the former town, but there really is not much to call a town anymore.
The southeast corner of the state consists of the Blue Mountains another area of elevation exceeding Waterville. The Blues in Washington State are a high plateau rising up a steep western slope east of Walla Walla with very deep and very steep river valleys. However, the back, eastern part of the Blues has a broad area of high country with fewer deep canyons.
Anatone is a small town with a post office in the wheat growing area and comes in well above Waterville. Anatone is at 3,571 feet. However, Anatone is not incorporated.
Note on the DEM above there is a very narrow and discontinuous band of higher ground on the very eastern edge of the state. This area is the highest area of the rolling hills of the Palouse that extends into Idaho. Exploring that band of ground on the eastern edge of state, I came across the
Town of Farmington. Farmington is incorporated and the town notes on its home page that it is at an elevation of 2,626 feet. That is higher than the 2,622 feet elevation that Waterville has on its city page. Farmington does not make any claims about being the highest incorporated town - perhaps a missed tourist opportunity.
The elevations cited by both Waterville and Farmington are from the USGS topographic maps bench marks assigned to the towns. The towns are not flat. Waterville has a spot elevation on the map on the north edge of town at 2,645 feet. And the southeast corner of the incorporation boundary is just short of the 2,720-foot contour. Farmington's northeast boundary touches the 2,700-foot contour.
If one relies only on the topo map assigned elevation, Farmington is the highest incorporated town in Washington State. That said, Waterville has more area above the elevation of Farmington and its highest point is above Farmington's high point. That said there are parts of Waterville that are lower than the lowest point in Farmington. Perhaps it could be called a tie?