KSHB 41 reporter Rachel Henderson covers neighborhoods in Wyandotte and Leavenworth counties. Share your story idea with Rachel.
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On Aug. 1, Unified Government of Wyandotte County and Kansas City, Kansas, Mayor Tyrone Garner told residents to celebrate news that officials had worked to remove a fee on bills paid by Kansas City Board of Public Utilities customers.
That celebration appears to have been premature.
Public records obtained by KSHB 41 reveal a BPU leader warned Mayor Garner and other local leaders that removing the fee was "unrealistic." BPU's general manager sent the email about two weeks before the promised date to remove the PILOT fee - payment in lieu of taxes.
After BPU customers started receiving their October statements with the PILOT fee still included, Garner issued a press release he was "completely caught off guard" the fee was still on the bill.
What is the PILOT fee and why did officials want to change it?
The PILOT fee is a fee made to compensate the Unified Government for the property tax revenue not collected because the BPU is tax-exempt. The fee is assessed on monthly BPU bills. The UG sets this charge at a rate between 5% and 15% and is used to fund city and county operations. Right now, that rate is 11.9%.
On Aug. 1st, County Administrator David Johnston announced at a budget proposal meeting that the fee would be removed from customer bills by Oct. 1. In the same meeting, Mayor Garner backed this announcement and encouraged taxpayers to celebrate the news.
“We heard you on PILOT,” Garner said. "Not only is there a PILOT reduction, but then also the PILOT is coming off your bill. So those individuals that suffer and are impacted the most by the PILOT being on the bill and may have gotten cut off, that will not be an issue for you any longer.”
On Sept. 13, BPU General Manager Bill Johnson emailed a letter to Garner to “follow up and again request a joint meeting between our BPU Board of Directors and the Unified Government Commissioners.”
Johnson's letter specifically referenced the PILOT fee and the Oct. 1 deadline:
“During this week’s Wyandotte County Economic Development Council meeting you stated that the PILOT BPU collects for the Unified Government will come off the bill effective October 1, 2024. I will reiterate that this presents an unrealistic timeline for us. The BPU and UG never formally met to discuss this and we cannot accomplish this without a thorough vetting of all the options available.”
Johnson then added “to accomplish removing the PILOT from the bill, another rate hearing would be required to embed the PILOT into the rates.”
The other alternative, Johnson wrote, would be to create a separate line item on the bill to collect those “pass-through” fees and allow the utility to remain “financially solvent.”
Garner responds to email, explores next steps
On Sept. 16, Garner responded to the email saying, "Yes, just inquired about the status this morning, staff is working to solidify dates."
The next day KSHB 41 News reporter Rachel Henderson met with Garner. Their interview focused on the status of the PILOT fee's removal and about customers' concerns about the deadline and where that make-up money would come from.
Garner was asked if there would be a need to cut back on other services due to the loss of PILOT fee revenue.
"That's yet to be determined," Garner replied. "The information I've gotten so far is 'no'."
As the calendar turned to October, the PILOT fee was still on customer bills, prompting UG officials to release a statement on Oct. 4, describing the previous deadline as "premature".
On Oct. 9, Garner released a "statement of apology" expressing shock at the news the PILOT fee was still on bills.
“I join the ranks of residents that are alarmed and troubled by this turn of events, specifically to what appears to be an ongoing conversation about how to proceed with a path forward that was not communicated to myself or the public in a manner that would have brought about a clear understanding as to the rational (sic) for what appears to be a pause on implementation,” Garner's statement read. “As the visible head of the Unified Government of Wyandotte County, I would like to send a sincere public apology for any lack of transparency and shortfalls in communication from your municipal government on this issue.”
Garner and the UG's Board of Commissioners have called a special session for 5:30 p.m. on Oct. 17 to discuss the status of the PILOT fee. The meeting agenda also allows commissioners to meet in executive session to discuss non-elected personnel matters.
On Wednesday, KSHB 41 requested an in-person or phone interview with Garner to gain clarity on what he knew about the Oct. 1 deadline. Garner initially agreed to speak over the phone Wednesday morning, but later decided to wait until after Thursday's special session.
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