Unincorporated King County revenue stream down 37% below projections of $12M
(The Center Square) – King County is estimating a 37% drop from the projected collection of franchise compensation revenue in unincorporated King County.
Franchise compensations are one of the county’s more recent revenue sources. They are payments by water, sewer, gas and electric utilities for using road rights-of-way in unincorporated areas of the county.
King County is expecting franchise revenues to reach $7.6 million for 2023 and 2024. That is 37% below projected revenues of $12 million. According to a county audit, it collected $5 million in franchise revenue in 2021 and 2022 combined, which was 46% lower than the projected $9.2 million budgeted.
The county blames limited staff capacity for actual revenues being well below projections since 2021. Currently, the county has a backlog of 104 franchise agreements with 89 utilities.
According to Real Estate Services workload estimates, which began managing franchises this year, it may take until 2027 to negotiate compensation with all 89 utilities.
The extent to which the county collects franchise revenue over the next few years will depend on how the county staffs and monitors the program, as well as how RES organizes its backlog.
The King County Auditor’s Office recommends RES hire temporary staff to work on the backlog, clarify program priorities and targets, increase efficiency and improve processes.
The office also recommends Real Estate Services conduct an equity analysis to identify and mitigate potential inequalities in franchise compensation.
The drop in revenue comes amid a projected $50 million shortfall in the county’s general fund in 2025.
Revenue collected from franchise compensations could be used to provide services the county might otherwise reduce or eliminate, according to the audit.
“Rather than issuing an invoice based on set prices, the county must negotiate compensation one-on-one with water, sewer, gas, and electric utilities operating in the rights-of-way of unincorporated King County,” the audit states.
