Inquiry of the Week (11/30/99)

Question

May a code city require a franchise from a sewer district for sewer lines placed in the city right-of-way?

Answer:

Yes, a code city can require a franchise and a franchise fee for sewer lines in the public right-of-way even for publicly-owned sewer districts. RCW 35A.47.040 provides authority for code cities to require a franchise for use of the public right-of-ways for water, sewer and other private and publicly owned and operated facilities for public service. The use of the term publicly-owned would seem to include special sewer districts.

There is a statute, RCW 35.21.860, that restricts the ability of a city to charge a franchise fee on certain utilities. However, a sewer utility or a water utility is not one of the utilities restricted from imposing a franchise fee. Since those utilities are not restricted, the presumption is that a reasonable franchise fee could be imposed.

A franchise fee arguably is not a tax under the analysis in Teter v. Clark County, 104 Wn.2d 227 (1985) but rather a valid regulatory fee. Since it is a fee and not a tax, the holding in Algona v. King County, 101 Wn.2d 789 (1984) does not seem to apply and does not limit the authority of the city to impose the fee. A franchise is a contract that is mutually negotiated between the parties and the franchise fee is also a part of the contract negotiations. The franchise is a regulatory contract and the franchise fee is a part of this regulatory scheme.

Such a fee is valid if reasonable and a part of a regulatory scheme.