Franchise Compensation Rule Update

Jan 18, 2018

Updated through August 8, 2018

“Court Rules on Rent to Utilities for Use of Rights-of-Way       By: VOICE of the Valley      August 2, 2018

On August 1, 2018, King County Superior Court Judge Samuel Chung issued an oral ruling granting summary judgment to water, sewer and electric utilities that King County cannot charge the utilities rent for the use of county roads and rights-of-way. A formal order reflecting the Court’s decision will be prepared and presented to the Court in the near future.

On November 7, 2016, the King County Council adopted Ordinance 18403 purporting to authorize the imposition and collection of “rent” from water, sewer, gas and electric utilities using county roads and rights-of-way. The County anticipated the Ordinance would generate $10,000,000 per year for the County’s general fund. On December 29, 2017, King County’s Facilities Management Division adopted Rules for Determining Franchise Compensation intended to implement the Ordinance. The Rules went into effect on January 29, 2018.

On January 25, 2018, King County filed a lawsuit in King County Superior Court (Case No. 18-2-02238-0 SEA) against 21 water-sewer districts that had opposed the County’s adoption of the Ordinance and Rules. The County sought a declaratory judgment that the Ordinance and Rules were valid. The water- sewer districts filed counter-claims against the County challenging the validity of the Ordinance and Rules, including a claim that water-sewer districts have the right to locate their facilities in county roads and rights-of-way without having to pay rent to the County. A group of non-profit water associations and an electric utility intervened in the lawsuit and also challenged the County’s ability to charge rent for their use of county roads and rights-of-way. The Court granted the motions for summary judgment filed by the water-sewer districts and the intervenors and ruled that the County cannot charge rent for the use of county roads and rights-of-way.”

BELOW IS BACKGROUND INFORMATION AND LINKS RELATED TO THE FRANCHISE COMPENSATION RULE

PLEASE TAKE NOTE THAT King County adopted the Final Franchise Compensation Rule effective January 29, 2018.

For information on this Rule, including related policies and guidelines, please see our Current Issues box on this website and click on the Utility Franchise Compensation category — or simply click here:  Franchise Compensation Rule .  Detailed information, including reports and applications, may be found on our webpage or may generally be found on the agency website that may be accessed by a clickable link.

King County and several Special Purpose Districts are currently engaged in litigation to determine the validity and/or applicability of this new Rule. King County Superior Court Case No. 18-2-02238-0.  Several water associations have been added as intervenors.  Summary Judgment hearing is currently set for July 27, 2018, before Judge Samuel S. Chung, Courtroom W-1060, Seattle Courthouse.  GMVUAC will endeavor to keep you posted with information regarding this important matter as such becomes available.

Following is the King County Superior Court docket information regarding the Franchise Compensation Rule litigation (essentially a declaratory judgment action testing the validity of this Rule):

Case Number: 18-2-02238-0
Plaintiff: King County
Defendants: Cedar River Water & Sewer District; Coal Creek Utility District; Covington Water District; Fall City Water District; Highline Water District; King County Water District No. 20; Lakehaven Water & Sewer District; Midway Sewer District (dismissed); NE Sammamish Sewer & Water District; Sammamish Plateau Water & Sewer; Skyway Water & Sewer District; Southwest Suburban Sewer District; Valley View Sewer District; Vashon Sewer District; Woodinville Water District.
Intervenors include: Ames Lake Water Assn; Dockton Water Assn;  Foothills water Assn; Sallal Water Assn; Tanner Water Assn; and Union Hill Water Assn.