Council adopts 35-year franchise with Kootenai Electric Cooperative, keeps 5% fee dedicated to roadway maintenance

The Coeur d'Alene City Council approved a 35-year franchise agreement with Kootenai Electric Cooperative (KEC) that renews long-standing terms dating back to a 1978 agreement, including a 5% franchise fee on KEC’s gross operating revenue.

City staff explained the prior agreement’s history and the legal basis for the 5% fee. The original 25-year grant dated to 1978; the city raised the fee to 5% in 1993 and later extended the term to 35 years. The previous 35-year term expired in 2013 without formal renewal, but KEC continued to pay the fee. KEC’s new counsel recently noted the lapsed ordinance, and staff presented a new ordinance renewing the franchise for 35 years with largely the same terms.

Why it matters: Under Idaho statute staff summarized, a city ordinarily may charge up to 1% of a utility’s gross operating revenue unless the utility consents to a higher rate; an existing franchise agreement with a higher percentage may be continued if the utility agrees. KEC consented to the 5% rate. The council discussed that the extra 2 percentage points historically were dedicated to street and roadway maintenance, including prior projects such as Ramsey Road.

Council discussion and clarification: Councilmembers asked whether the 5% fee was a percentage of gross operating revenue rather than a yearly increase; staff clarified it is 5% of gross operating revenue. Staff also confirmed the city intends to reserve the portion of the fee that has historically been dedicated to roadway maintenance. The ordinance grants KEC a nonexclusive franchise to construct and maintain poles, wires, conduits and related equipment in public right-of-way and reserves city rights on standards, service and rates.

Vote and next steps: The council read the ordinance by title and adopted it in a roll-call vote. The ordinance includes standard language granting a 35-year, nonexclusive franchise, a 5% franchise fee, and a provision reserving city authority over service and rates.

Ending: With the ordinance adopted, the city and KEC move forward under the renewed franchise terms; the agreement will guide utility placement and franchise-fee payments for the next 35 years.