HomeMy WebLinkAboutOlele Point Water System Franchise Agreement PresentationFranchise Agreement
Public Hearing
Olele Point Water System
Jarred Swalwell / Megan Kogut
October 13, 2025
Josh Thornton
Real Property Specialist
Jefferson County Public Works
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Agenda
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Franchise Agreements
Olele Point Water System
Public Process
Questions
Next Steps
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Franchise
Agreements
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Franchise Agreements – What are they & why do we have them?
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•RCW 36.55.010 authorizes BOCC to grant franchises:
“Any board of county commissioners may grant franchises to persons or private or
municipal corporations to use the right-of-way of county roads in their respective
counties for the construction and maintenance of waterworks, gas pipes, telephone,
telegraph, and electric light lines, sewers and any other such facilities.”
•JCC 13.56.070 (1) To the extent permitted by law, a franchise shall be required of any
utility provider who currently occupies or desires in the future to occupy rights-of-way
and to provide utility services to any person or area in the county.Utility provider shall
pay all the fees and/or taxes as provided herein and in the franchise agreement.
A franchise is a formal, legally binding agreement between the county, and utility or service
provider. The agreement grants the franchisee (the provider) the non-exclusive right to install,
maintain, and operate its infrastructure, such as pipelines, cables, conduits, and poles, within the
public land designated for roads, streets, and highways—known as the public right-of-way. It acts as
a long-term contractual permission, outlining specific terms, conditions, and responsibilities for the
company's use of public space to deliver services.
Counties have right-of-way franchises primarily to manage and control the use of their public
infrastructure for the benefit of their residents. These agreements allow essential services like
electricity, natural gas, water, internet, and cable television to be delivered throughout the county
by providing a legal framework for utility companies to access and utilize public land. Without such
franchises, counties would lack the necessary authority to regulate the placement and maintenance
of critical infrastructure, potentially leading to haphazard development, safety hazards, and
disputes over public space.
Furthermore, right-of-way franchises enable counties to ensure public safety, protect their assets,
and recover costs associated with managing the rights-of-way. They often include provisions for
proper construction standards, restoration of disturbed areas, and the ability to require relocation
of facilities if road improvements are necessary. For certain services like cable television, federal
and state laws also permit counties to collect franchise fees, providing a revenue stream that can
help offset the administrative and oversight costs of managing these essential public corridors.
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Franchise Agreements – Exemptions
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JCC 13.56.070(1)(a) Franchises will not be required for the
construction and maintenance of utility facilities serving one
single-family residence where such facilities will cross the rights-
of-way perpendicular to the rights-of-way line, plus or minus 10
degrees. Persons who fall under this franchise exemption shall enter
into an indemnification agreement before a utility permit will be issued.
This Jefferson County Code provision is a good thing for small single-user providers whose
improvements in the public right of way are minimal and it streamlines the process for
connecting individual residences to utilities. By exempting them from the lengthy and
complex franchise application process, it saves both them and the county significant time,
money, and administrative burden. The indemnification agreement still transfers risk from
the county to the provider for losses or damages. This exemption makes it much simpler
and quicker to get single-family service connected across a right-of-way.
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Types of Franchise Agreements
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Types of Franchise Agreements
•Telecommunications
•Cable TV
•Basic Telephone Service
•Small Cell Wireless Facilities / Traditional Wireless Communication Facilities
•Other Telecommunications (Internet or enhanced services operating on telephone or cable)
•Utility
•Water Provider – irrigation or potable water
•Sewer / Septic / Effluent Transport
•Electric Power
•Natural Gas
•Drainage
•Learn More: MRSC - Franchising -An Essential Tool for Right-of-Way Management
Federal and Washington State laws treat cable TV, telephone, and traditional utility
providers differently. Cable TV franchising requirements and fees are regulated under the
federal Cable Act. Some legacy telephone companies (for example successor to Pac Bell),
are exempt from needing a county granted franchise due to a statewide "grant" stemming
from RCW 80.36.040. Other utility providers such as power, water, sewer & gas as well as
enhanced telecommunications services offered by telephone & fiber companies have the
least amount of state and federal restrictions when it comes to county negotiated franchise
agreements.
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Franchise Fee Legal Background
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Prior to the 2019 WA State Supreme Court decision in King County vs. King County Water Districts, 194 Wn.2d 830, 453 P.3d 681 (2019), non-cable TV provider franchise fees were limited to only the administrative costs for developing, negotiating & finalizing franchises. This was because the legal interpretation at the time often viewed attempts to charge more than administrative costs as an unauthorized tax or an overreach of county authority.
In King County vs. King County Water Districts, the Supreme Court ruled franchise fees are not a tax but rather a bargained-for amount allowing a utility to make use of right-of-way (“a valuable property right”) for the operation of the utility.
JCC 13.56.150, JCC 13.72.100, and JCC 13.88.050 specifies the BoCC may establish fair and reasonable compensation to be paid for use of public right of way by a franchised utility provider. Newly negotiated franchise agreements incorporate a provision allowing the exercise of this right.
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Olele Point Water System
Jarred Swalwell / Megan Kogut
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Franchise Agreement with Mason County PUD No. 1
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•Utility Water System Franchise Agreement
•Located along Olele Point Road in the South
West Quarter of Section 28 Township 29
North, Range 1 East, W.M.
•Key Provisions Include:
20 Year Term
Relocation of Facilities
Indemnification
Insurance
Dispute Resolution
Termination / Assignment of Franchise
System Map & Coordinated Excavations
20 Year Term: Franchise is granted for a 20 years term and has option to renew at the sole
discretion of the board.
Relocation: Franchisee will relocate or modify facilities to accommodate public
improvement projects at their own expense. County reimbursement related to failure to
timely relocate or modify. If subsequent relocation for public improvement project within 5
years the County will bear cost or relocation or modification.
Indemnification: the County is protected from financial liability, including legal fees, for any
issues arising from the provider's operations within the franchise, unless caused solely by
the county's own negligence. In cases of concurrent negligence of both County and
provider, providers liability is limited to extent of negligence attributable to provider its
agents, employees, representatives, lessees, contractors, and subcontractors.
Insurance: Commercial general liability of at least 2 Million required with the County, its
elected and appointed officers, officials, employees, agents, and representatives shall be
named as additional insureds with respect to activities occurring within the Franchise Area.
Dispute Resolution: Multilevel dispute resolution language. First level consists of County
Engineer or designee & provider’s manager or designee. If unsuccessful at level one after
15 days option to move to level two consisting of County Administrator or designee &
provider’s manager or designee. If unsuccessful at level two after 15 days option to move
to terminate franchise or institute a legal proceeding.
Termination: County may terminate franchise for failure to cure material breaches of the
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agreement within 60 days of notification of breach or for disputes after going through
dispute resolution stage 1 & 2 outlined previously. Board has option to grant extension to
cure material breaches for an additional period of 30 days in certain circumstances.
Assignment of Franchise: Franchisee may not assign franchise to another party without
approval of County. Assignee must agree to perform all terms and conditions of franchise
agreement.
System Map & Coordinated Excavations: Franchisee agrees to provide facility map for import
as a GIS layer. County and provider agree to best reasonable effort to provide notification for
coordination on excavations occurring in franchise area.
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Public Process
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Franchise Agreement Procedural Process Requirements
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RCW 36.55.040
Application—Notice of hearing.
On application being made to the county legislative authority for franchise, it shall fix a time and place for hearing the same, and shall cause the county auditor to give public notice
thereof at the expense of the applicant, by posting notices in three public places in the county seat of the county at least fifteen days before the day fixed for the hearing. The
county legislative authority shall also publish a like notice two times in the official newspaper of the county, the last publication to be not less than five days before the day fixed for the hearing.The notice shall state the name or names of the applicant or
applicants, a description of the county roads by reference to section, township and range in which the county roads or portions thereof are physically located, to be included in the
franchise for which the application is made, and the time and place fixed for the hearing.
[1985 c 469 s 49; 1963 c 4 s 36.55.040. Prior: 1961 c 55 s 3; prior: 1937 c 187 s 38, part; RRS s 6450-38, part.]
State Law RCW 36.55.040 requires a public hearing take place and details that notices must
be posted in three public places at least 15 days before the hearing date. Another
requirement is that the public hearing notice be published two times in the county's official
newspaper. The last publication must be no less than five days before the hearing.
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Franchise Agreement Procedural Process Requirements
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RCW 36.55.050
Hearing—Order.
The hearing may be adjourned from time to time by the order of the board of county
commissioners. If, after the hearing, the board deems it to be for the public interest
to grant the franchise in whole or in part, it may make and enter a resolution to that
effect and may require the applicant to place his or her utility and its appurtenances in
such location on or along the county road as the board finds will cause the least
interference with other uses of the road.
[2009 c 549 s 4094;1963 c 4 s 36.55.050. Prior:1961 c 55 s 4; prior: 1937 c 187 s 38,
part; RRS s 6450-38, part.]
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Franchise Agreement Public Process Timeline
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•Public Hearing Notice – Consent Agenda (September 15, 2025)
•Publication in The Port Townsend & Jefferson County Leader on October 1, 2025 and
October 8, 2025
•Hearing Notice Posted on Jefferson County’s Website (September 15, 2025)
•Hearing Notice Posted in 3 Public Locations (September 23, 2025)
Courthouse
Public Library
Port Townsend Post Office
•Public Hearing (October 13, 2025)
Jefferson County, WA |
Official Website
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Next Steps
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Franchise Agreement Public Process
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•After closing the public hearing, the Board may:
•grant the franchise without revision;
•request Public Works compile and respond to comments from hearing & develop
recommended revisions to submit to BoCC & Applicant for consideration; or,
•deny franchise for cause (for example, no or insufficient public benefit, safety
concerns, failure to meet application requirements, applicants inability to perform
or environmental impact).
•If Board approves the agreement, Public Works will forward to Jarred Swalwell and
Megan Kogut for acceptance within 60 days along with a bill for any costs exceeding
application fee if applicable.
•Agreement will be recorded with signed copies distributed to BoCC, Public Works &
Applicant.
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Questions?
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