KSHB 41 reporter Rachel Henderson covers neighborhoods in Wyandotte and Leavenworth counties. Share your story idea with Rachel.
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Unified Government County Administrator David Johntson is standing by his decision to attempt to enforce the county’s charter ordinance after directing the Board of Public Utilities to remove the PILOT fee from bills on Oct. 1.
That deadline was not met, and customers are clearly upset.
This week was KSHB 41's Rachel Henderson's second in a row back at city hall to ask government leaders what caused this broken promise.
We conducted Friday's interview from the city hall lobby once again, despite the Johntson being nine floors above.
A Q&A with KSHB 41's Rachel Henderson and Wyandotte County/Kansas City, Kansas, County Administrator David Johnston is below:
Rachel: Who all did you talk to before you made the announcement or the directive at the August 1 meeting about removing the PILOT fee from the bill?
Johntson: I talked to our legal department, I talked with the mayor, I talked with a few other people. To give you exact names, I don’t recall that.
Rachel: Did you talk with any members of the Board of Public Utilities?
Johntson: We had conversations with Bill Johnson that we’re looking at this.
Rachel: What exactly was the goal? Did this always start out as an idea to remove the PILOT fee? Or was it initially a reduction?
Johntson: A lot of this discussion started when the BPU requested that we separate bills. I don’t know if you’re familiar with that. I want to say Summer of ’23 maybe.
We don’t have a system to collect bills. That’s why years ago, the commission authorized that the BPU would be our bill collector for wastewater, stormwater, and trash. And BPU was getting complaints from citizens saying that their services were being cut because they weren’t paying their entire bill.
We’re having this discussion as if we separate the bills — can something be done about that? So we don’t have a system, we’ll investigate what it would take for us to have a system.
For us to have our own billing system, it would cost us between $3-5 million a year. As we were going into billing, we were probably going into discussion of revenue neutral, and we were still using reserves to balance our budget; we are in no position to undertake that extra expense. Eventually, we said we are not going to do that.
During those discussions was this idea, 'Well, people also don’t understand or want to pay what the PILOT is.' And we said, 'Well, it’s been on the books for years and so, and it generates funds to help fund general fund services,' and so, that’s where the discussion stopped. Then internally during that time, we were actually reading again the ordinance, the charter ordinance.
Rachel: Which one was this, which charter ordinance was this?
Johntson: The UG’s charter ordinance.
Rachel: Is there a specific number? 'Cause I know there’s a lot of them listed online.
Johntson: Let me see if I can find something real quick.
Rachel: I know that you referenced not wanting to go against what the charter said about how you all do your collection, what about it was off? ‘Cause I’m curious about what maybe the BPU or UG was doing wrong as outlined in that charter.
Johntson: When you read the ordinance, it says that BPU, the PILOT is supposed to be "x" percentage of gross operating revenues.
That’s very clear in the ordinance, and what you see on the bill is a charge to the consumer. That’s not from gross operating, it’s on top of gross operating revenues. If you understand what I mean.
Rachel: Yeah, so you’re saying that fund for the PILOT is for the UG’s gross operating revenues? Or the BPU’s gross operating revenues.
Johntson: BPU’s operating revenues.
Rachel: I’m curious too — what’s the penalty for not following the charter? When you all read that and you saw that was off, what’s that penalty supposed to look like?
Johntson: What do you mean penalty?
Rachel: Well, if you’re not going with the charter ordinance, if you’re going against the charter ordinance?
Johntson: There’s no penalty, you just have to make sure that whatever is done is legal. Now I also want to let you know that the process that BPU follows by allowing it to be viewed as a rider, that’s what they call it, is legal from the Kansas Corporation Commission who governs kind of the legal arena of utilities. So it’s done both ways around here.
What the contention is, is there should be consistency with our charter. And so it’s one of things I think was discussed at our Thursday meeting last week which I think you were at, that we’re gonna discuss this and make sure that everybody’s on the same page.
Both approaches are viewed as legal, but our charger recognizes one thing very directly — it’s a percentage of the gross operating revenue of the utility.
[It’s] charter ordinance CO-3-02, section 18.
Rachel: Who were you expecting, when you made this directive, to enforce that directive and get that done?
Johntson: We expected that the utility would follow our ordinance and deal with it.
Rachel: It sounds like what you mentioned about the contention between technically the rider being legal with the Kansas Corporation Commission, but also having your ordinance say something different, did you think that there would be any problems with the execution? Were there any red flags about, 'Hey, maybe this might not get done?'
Johntson: Initially, no, because of the things that we all fall under, even BPU to a point, since they’re an agent of the UG, they have to follow our ordinances. So again, it’s like I was saying, practices were set up years ago, and now it’s like, we really need to get back to what the ordinance says.
Rachel: I know that you were also copied on that email that Bill Johnson sent out on [September] 13th saying that there was some uncertainty about that October 1st deadline. When you read that, what was kind of going through your mind? Were you thinking, ‘OK, we need to sit down and figure out if we can actually do this?’ What were your thoughts?
Johntson: There were attempts to meet and unfortunately, the time that we could meet was shortly after October 1. And Bill reiterated the challenges that BPU faces on this. One, they would probably have to put it into the rates — the BPU PILOT amount from the rates, they would have to increase their rate structure, and that would require them to go through a rate study, which is required by all utilities when it comes to adjusting rates. That takes time, and usually costs a few $100,000 to do. And I said, 'OK, I’ll talk with the commission about this,' but that was right before I went on vacation, I said, 'I can’t talk to them until I get back.'
Rachel: I know that the mayor has since apologized about the roll out maybe not happening on time, do you have an apology to BPU customers who are upset that they didn’t see this PILOT fee off their bills?
Johntson: I’m not going to apologize for following our ordinances that were set in the public process years ago, that’s my directive, I have to enforce those and follow those policies that are in place. I will apologize that if there was any expectation other than this not being done, I do apologize for that. But, I think there’s also a reality that needs to be stated that there was never an intention that the PILOT amount would not be collected. So, if that misconception happened, I apologize that it led to that, for some folks in our community.
Rachel: Where do you feel like things went wrong in your eyes when you look back at the situation, and when I say that I mean, where did things go wrong in terms of the fee not coming off as promised by October 1?
Johntson: I think what happened is it unfolded that it’s a far more complicated situation than anyone envisioned, and that’s all I can say.
Rachel: And I know too, at last Thursday’s meeting, you mentioned doing some further research into the charter ordinance and being able to come up with some conclusions after October 1, do you regret making that announcement on August 1? Do you wish you would have waited and researched more?
Johntson: I can’t turn back the clock. So, I can’t answer that question.
Rachel: I want to know too, are you all still going to try to enforce this directive? I mean, it’s still on the charter that you say it’s being collected improperly? Are you still going to go after that, can residents still expect that fee removal?
County Administrator: I think what, if you heard during our meeting, that we are going to be doing a fairly quick assessment of the options that are out there and come back to the commission with those options, and we’ll move forward then.
Rachel: Who do you report to? Because I know the mayor mentioned getting a lot of his intel from you. Do you have someone who you’re reporting to? With your management position, I know that you’re listed as the highest level of management. How does that work?
Johntson: I report to the mayor and 10 commissioners.
Rachel: Was it your responsibility to set up meetings or make attempts to set up meetings, or was that something that you were looking to someone else to do throughout this 2-3 month process?
Johntson: We have a lot of people involved. We had our legal counsel involved, had me involved, so there’s a lot of players that are involved in this.
Rachel: Does the BPU and Unified Government share legal counsel?
Johntson: Because they are an agent of the UG, yes they do. It’s in our charter ordinance.
Rachel: You mentioned being on vacation. This was before the October 1 deadline happened. How long was that time frame?
Johntson: A week.
Rachel: What were those dates? If you remember. Or what month?
Johntson: I don’t remember that ma’am.
Rachel: I was just curious too because I don’t know if before going on vacation you were thinking, 'Hey, this is still getting done,' or was that something you thought was handled before you left?
Johntson: Bill Johnson and I had an agreement that I couldn’t get to it ‘till I returned and that I would discuss it with the commission and get back to him.
Rachel: I know that this was also a question posed by a commissioner of who dropped the ball? How would you answer that question?
Johntson: I think once it was revealed that it was far more complicated, I don’t think there was any ball dropped. Then we have to work to rectify the situation, and I think that’s where we’re at now.
Rachel: So what does that look like? In addition to, 'cause I know there’s a meeting coming up next week, will you be a part of that joint meeting?
Johntson: I’m always at them, yeah.
Rachel: Even from there too and having these conversations, are there any actionable steps that you think can really be taken, or what do you think the solution is?
Johntson: I think what the commission and the mayor agreed to is a quick assessment to provide options to rectify the situation, and we will work with BPU staff and board when we do this assessment.
Rachel: I know that BPU technically predates the UG in terms of how it was set up before the UG was consolidated. So what is that role supposed to look like in terms of, is everything that you direct towards the BPU something that they have to follow? Or can they make some decisions on their own?
Johntson: There’s some things they get to do on their own, there are some things that they don’t. So this ordnance that I referred to earlier is one that they should be following.
Rachel: And again, with that too, ‘cause I know that you mentioned sharing legal counsel and that there’s two different things at play going on with the ordinance, but also the BPU’s rider. There’s nothing illegal about them not taking the PILOT fee off, is that correct?
Johntson: That’s my understanding.
Rachel: Gotcha. So even with this promise being made, is it something that would just be ideal for these customers? I think what I’m trying to understand is if you’re not following the ordinance, what happens?
Johntson: Well, we get people to work to follow the ordinance.
Rachel: And the responsibility for enforcing that, that falls on you?
Johntson: Yeah, and you know, we haven’t really looked at this ordinance until we were in the middle of the bill separation issue.
Rachel: Did this change anything about how often you all are planning on looking at your ordinances in the future?
Johntson: That’s a good question to ask because lots of times, you think you’re rolling along and there’s no problem, and then when you find one, you address it, that’s a reactive approach. You’re asking if we’re going to be more proactive, I think yes.
We’ll do regular reviews to make sure that what the ordinance says and what the organizations are doing match.
Rachel: What’s your working relationship like with the Board of Public Utilities?
Johntson: They have their own elected officials, and they have their own management structure, and so to appoint, they have certain amount of independence, but when it comes to certain policy guides like this, they are governed by the UG.
It’s kind of a mixed bag. But they don’t have total autonomy. Let’s put it that way.
Rachel: How do you think that people’s trust can be restored in the Unified Government after something like this happens?
Johntson: I think we just be honest and finally come to a fair conclusion and remedy of the situation and move forward.
Again, I’ll apologize if people thought that they wouldn’t have to pay the PILOT. That was not the intention because when I made my statement about removing it from the bill, I also said we are going to reduce our PILOT rate on the residential side from 11.9 to 10.9 percent. So there was no statement that the PILOT was going away and not being collected.
Rachel: I think what people were referencing was the August 1 meeting of.
Johntson: I know what you’re saying. But I also said when I made that statement about removing it from the bill, I also said immediately after that that we are going to reduce our PILOT requirement on the residential side from 11.9 percent to 10.9 percent. Which meant we were still going to get revenue. But the amount of the gross operating revenue is going to go from 11.9 percent to 10.9 percent for residential customers.
Rachel: So residents were misunderstanding your statement?
Johntson: I can’t speak for them.
Rachel: But you think that delivery got misconstructed about what you meant?
Johntson: Again, I can’t speak for them, but if there was a misconception, I apologize for that.
Rachel: If you had the opportunity to set the record straight, what’s the public missing. What information aren’t they understanding about how everything went down?
Johntson: I think what’s missing is that BPU is not following our charter ordinance that they have to follow and in our effort to correct things, realized it was far more complicated and needs more time to get taken care of.
Rachel: Is there anyone in place who can make sure you all are enforcing what you’re saying is going to be enforced? Is there a checks and balance system like that for you all?
Johntson: We do have a legislative auditor that’s within the chief judge’s direction.
Rachel: How does that role affect your roles? Is that someone who checks in on you guys, what does that look like?
Johntson: If an issue comes up, they do an objective review that we’re doing what we’re supposed to be doing.
Our 22-minute conversation ended there.
There will be an upcoming special meeting between the UG Board of Commissioners and BPU board members on Oct. 30 at 5 p.m.
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