by Mary Rupert
A proposal that would create a new classification for the PILOT fee moved forward at Monday night’s Unified Government Economic Development and Finance Committee.
In a unanimous vote during committee meetings that lasted for almost seven hours, the EDF committee approved creating a residential category, along with a business-industrial category, for the PILOT (payment in lieu of taxes) fee.
Next, the proposal moves to the full UG Commission for approval. The committee requested that it be placed on the nonconsent agenda at a commission meeting.
As described by UG staff, if there were two classes for the PILOT fee, which is placed on customers’ BPU bills, then the UG Commission could set a separate fee for each class. It could lead to an opportunity later to lower the PILOT fee for residents.
Currently, there is an 11.9 percent PILOT fee on BPU bills that is voted on each year by the UG Commission.
Kathleen von Achen, UG chief financial officer, said this proposal was a means of reducing the tax burden on residents. She also presented a plan to expand the senior citizen utility tax rebate to include persons of all ages making $25,000 or less per year.
Von Achen said the PILOT fee on BPU bills makes up 20 percent of the Kansas City, Kansas, general fund.
There were slight reductions in the amount of money the PILOT fee collected in 2020 and 2021 because of the effects of COVID on businesses and industries here, as some were shut down for months.
The residential portion is $8.8 million for electricity and $1.7 million for water. Von Achen said the PILOT fee currently collects $28.4 million for electricity and $5.6 million for water, for a total of $34 million.
She said if, for instance, the UG decides to reduce the PILOT from 11.9 percent to 6 percent on residential bills, it would cut the residential revenues in half, collecting $4.4 million for electricity and $800,000 for water.
Although some hypothetical situations were discussed, the committee did not approve any cuts on Monday night that would affect the PILOT fee. According to commissioners, they might consider cuts in August during the UG budget discussions.
Patrick Waters, UG deputy chief counsel, said that the UG’s charter ordinance would have to be amended to add another classification fee. The amendment would take a two-thirds majority, or eight votes of the commission, to pass. Then, under Kansas law, citizens would have 61 days after publication to submit a petition and hold a referendum on it, if they choose.