Wyandotte County walks back on promise to remove PILOT fees from October utility bills
Reality Check is a Star series holding those with power to account and shining a light on their decisions. Have a suggestion for a future story? Email our journalists at
Two months ago, as the Unified Government of Wyandotte County and Kansas City, Kansas capped off a tough budget process largely defined by cost-cutting, the local government's top administrative official offered a bit of news expecting applause.
County Administrator David Johnston told commissioners and the public a long-hated PILOT surcharge, short for Payment in Lieu of Taxes, would no longer appear on local utility bills . He said that he had directed the Board of Public Utilities, a century-old nonprofit provider of electric and water service, to discontinue the charge come October.
"No one will be disconnected because they do not pay their PILOT," Johnston declared at the time. "Because it won't be on the bill."
But, as utility bills arrive to customers this month, the familiar line item remains in place. The Unified Government now says the August announcement was "premature," and officials are continuing to work to remove the fee from customer bills.
In a statement Friday, a Unified Government spokesperson said Johnston continues to work with the Board of Public Utilities General Manager Bill Johnson "to develop options regarding the PILOT charges on the BPU bill."
For now it seems Johnston could not remove the fee unilaterally, and the county commission will need to be part of finding a solution.
"Prior to implementation, the UG Board of Commissioners will need to discuss and agree to support a path forward," Krystal McFeders, the Unified Government's spokesperson, said. "Although the announcement to implement changes by October 1 was premature, the Unified Government leadership is working to address the issue in a timely manner."
The PILOT charge exists because the public utility doesn't pay property taxes on its county-owned facilities. Money from it goes into the Unified Government's coffers and is used for operational expenses. Along with the PILOT, the BPU also collects fees for trash pickup and stormwater management on its bills, which are services the Unified Government manages.
Some area activists have long criticized the PILOT fee, as well as those other charges lumped into the utility bill, as a regressive collection method that has led to utility shutoffs, especially among those struggling to pay bills.
Unified Government commissioners said they're working to lower the fee. Next year, the residential PILOT fee will drop by a single percentage point, from 11.9% to 10.9%, as leaders seek to appease cost concerns within the community.
While the Unified Government says it aims to remove the fee from the bill, the local government will continue to depend on the money the fee generates each year. In the city's $354 million spending plan for 2025, the general fund relies on a projected $37.1 million raised through the collection of PILOT.
Johnston has said the BPU is not supposed to collect the money through individual charges to consumers, saying the current process is incorrect. Instead, he contends, the money should come from BPU's gross revenues, which come from the utility rates customers pay for electric or water service.
Covering the cost of the PILOT fee
Over the past two months, BPU has found some unlikely defenders from frequent critics of the fee. Activists and residents worry that the BPU would just increase utility rates to make up the difference from eliminating the fee as a line item on bills, effectively concealing the money collected for the PILOT.
The BPU administration has remained largely silent on the issue publicly. Amber Oetting, a spokesperson for the public utility, told The Star in a statement this week that BPU "acknowledges the interest in our discussions" with the Unified Government.
"At this time, no new updates have been made available pending further discussions," Oetting said in response to The Star's inquiry about the directive to remove the fee. "We are committed to transparency and will keep the public informed by promptly communicating any new details as they emerge."
Meanwhile, letters between the county administrator and the BPU's general manager obtained by The Star demonstrate a slightly more candid assessment of the situation, in many ways confirming fears that the cost would still fall to customers.
In a September letter addressed to the county administrator, Johnson of the BPU expressed concern over comments Johnston and Mayor Tyrone Garner made publicly about removing the fee from utility bills, questioning the feasibility of such a move.
He said taking the charge off BPU's bill page "would require significant system reprogramming," among other things.
"It would take several months to accomplish this task. The complexity and extent of these changes would require time and additional resources. It is unrealistic to expect that BPU can accomplish this task by October 1st."
Further, the utility's general manager warned that BPU is a "cost-of-service entity," saying its current rates and financial reserves could not support paying the PILOT fee.
"To accomplish removing the PILOT, another rate hearing would be required to embed the PILOT into the rates. Otherwise, a separate line item on the bill is the only way for us the [sic] collect this pass-through and remain financially solvent."
During the public comments portion of BPU's regularly scheduled meeting Wednesday, a resident asked if the charge would be coming off the bill.
"The conversation we're having publicly is, BPU is still having conversations with the Unified Government about the PILOT fee," Johnson replied. "So, we haven't arrived at that conclusion yet as to when anything would change related to the PILOT being on the bill."
Asked again whether it would change, Johnson said: "We are continuing having conversations with the Unified Government about the PILOT charge."
