‘Burden’ or ‘benefit’? KCK Mayor Garner floats selling the BPU to address cost concerns
Kansas City, Kansas, Mayor Tyrone Garner is calling on city leaders to join him in taking a critical look at Wyandotte County’s publicly owned utility — suggesting the local government should consider selling its nonprofit electric and water provider.
Citing concerns over the cost of utility bills, the mayor says he’s heard from some Wyandotte County residents who think owning the Board of Public Utilities is “a burden” and “should be more of a benefit” than it is.
“I think it’s time that we take a hard look at that,” the mayor told The Star by phone Friday, “to see what the options are that are out there.”
Reasons for such an evaluation, the mayor said, align with his broader goal of finding ways to cut costs for Wyandotte County residents. The mayor plans to host a more detailed public presentation on the matter in City Hall next week, and is advocating for staff to study what selling the utility could look like.
“There have been cries to me from residents that I’ve heard that want to sell it in whole or in part, or to bring it under the umbrella of the Unified Government,” the mayor said, adding:
“I just want to make sure that we have this conversation so we can deliver on the commitment that I know our commissioners and our staff members and myself have in regards to making sure that we’re providing the best level of service to our residents.”
Other ideas the mayor wants to explore include effectively absorbing the Board of Public Utilities — currently governed by a six-member elected panel — as a department of the Unified Government, or increasing the involvement of county and city officials in BPU policy decisions.
Founded in 1909, the BPU provides electricity to 67,000 and water to 53,000 households. As of this year, the nonprofit — among the top 50 largest publicly owned utilities in the country — had roughly $1.1 billion in assets and carried $829 million in debt, according to figures from BPU.
The public utility is no stranger to complaints over cost. Over the years, tensions between the BPU and Unified Government officials have spilled into public view, especially over fees charged on utility bills, including a Payment in Lieu of Taxes, or PILOT, that funds city and county operations.
Selling the public utility would be easier said than done.
Utilities are highly regulated by the state and federal governments. And a merger or acquisition involving a private entity may require approval from the Kansas Corporation Commission.
The local landscape could make Evergy, the Kansas City metropolitan area’s largest provider of electricity, a potential buyer if a sale were to take shape. A spokesperson for the company declined to comment on a speculative sale or merger involving BPU.
Kansas City, Kansas, leaders have toyed with the idea of selling the utility in the past. In 1988, the city — before its unification with the county — put the publicly owned utility on the market along with a proposal to use those monies to offset property taxes for 30 years, The Star previously reported.
Two bids were offered, one from Kansas City Power & Light and the other from a group of BPU employees and managers. Six months after debate started, city leaders rejected both bids, saying neither met a minimum requirement of $650 million in cash desired to close the deal.
Mayor Garner’s call to consider changes came shortly after BPU officials provided an overview of the utility’s operations during a joint meeting with the Unified Government’s Board of Commissioners on Thursday.
Bill Johnson, BPU’s general manager, said the public utility gives residents more say on the management of their electric and water provider than they had when private companies ran them. He also boasted the BPU’s financial position and its rates compared to others.
“There’s a lot about what we return back to the community that an investor-owned (utility) does not,” Johnson said. “They are more concerned about their stockholders, we’re more concerned about our community. And that shows up in many different things we do.”
In response to a request for comment Friday, a BPU spokesman provided a statement that says the “BPU and the Unified Government share the common goal of working to meet the public needs of Wyandotte County residents, while simultaneously contributing to the overall quality of life in the community we serve.”
“BPU welcomes the opportunity to showcase the service, commitment, and contribution it has, and continues to bring to the community,” the public utility said in its statement.
Two elected board members reached by The Star on Friday pointed to a need for increased communication between leaders of the Unified Government and BPU.
Tom Groneman, the board’s president, said Friday he’d yet to hear the ideas raised by the mayor. As discussions progress, Groneman hopes elected leaders will have the chance to sit down and talk about a future for the utility that will “be for the betterment of the whole community.”
Rose Mulvany Henry, first elected to the board in 2019, also wishes to see greater communication between leaders in the Unified Government and BPU, saying that has been lacking during her tenure. As conversations come up around dissolution of the governing body or selling the utility, she noted roughly 500 employees work under BPU and call Wyandotte County home.
“They live here, they work here, they pay taxes here,” she said. “Let’s not lose sight of those folks.”
Meanwhile, some commissioners are also wary of selling BPU.
Commissioner Bill Burns, 2nd District, said he would be “totally against it.” He believes the mayor has good intentions but may be misguided on that idea.
“In any organization, there’s ways to improve things. But to sell it? I think we need to get that off the table right away,” Burns said. “I know that sounds a little strong, but that’s just the way I feel.”
Commissioner Melissa Bynum, 1st District At-Large, said in an email, “we are at the very beginning of this process and much, much more information is needed.” She has questions that include the long-term costs versus benefits of selling the utility.
“I believe such a major change requires a lot more information than we currently have,” she wrote.
