I gotta think removing the flagpole will cost more that $300 and there will be no more vandalism on an empty pole than it receives now. Spending dollars to save pennies ... gotta be the gubermint.
Might also have to do with liability. In construction, we recommend removal of scaffolding by a certain date during the construction (i.e. within 15 days of completion of tuckpointing) so other subcontractors can’t use it for their purposes. Often, the sub who specified the scaffolding asks to be indeminified.
Since the town of Clearwater can’t get everyone to hold the town harmless or indemnify it, removal was likely a cheap option. Whether the town is self-insured or uses a commercial company, somebody probably told them the unmaintained poles would be a liability issue.