Northallerton was beaten by a single point in the town category of the Yorkshire in Bloom spring judging - and a poor show at council buildings is being blamed.
It was a blow for the town, which is anxious to regain a place in the all-Britain finals.
The town's entry lost marks because of a poor show at Stone Cross, headquarters of Hambleton District Council. Baskets outside were full of brown, dead plants. The judges said: "The new office block at Stone Cross would have benefited from more attention."
Coun Jack Dobson is mayor of the town and chairman of its Yorkshire in Bloom bid. "We are not picking on people, but it is a shame to miss out," he said. "The judges have said that Stone Cross let us down."
The environmental action group committee behind the bid meets next week and is expected to raise the issue with Hambleton.
Peter Simpson, Hambleton chief executive, said: "If the implication is that Stone Cross is responsible, then we are sorry."
The town council's charge hands have already started work on Northallerton's entry in the summer round of the contest, to be judged in July.
Coun Dobson remained upbeat. "Coming second really showed them what the town can do "
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