Kansas City, Kansas residents pay some of the highest electric rates in the region to the city-owned Board of Public Utilities, and their utility bills fund hefty salaries for staff.

An Open Records request from the Sentinel’s parent company, Kansas Policy Institute, for 2019 pay revealed a total payroll in excess of $52 million.

According to data from the records request, General Manager Donald L. Gray’s total pay was $419,814.  Gray retired mid-year according to Chief Communications Officer David Mehlhaff, who said Gray’s pay included a ‘final payout.’

New General Manager William Johnson made over $266,000 last year and Mehlhaff says Johnson’s 2020 salary is $292,005 — and CFO/CAO Lori C. Austin made $279,211 in 2019.

More tellingly, total pay for many employees is several times the state average and, indeed, several times the average of high-cost-of-living states like New York.

One lineman brought in more than $185,000 in 2019; ZipRecruiter puts the average pay in Kansas at about $53,000 a year and $63,000 per year in New York. One apprentice lineman made well over $150,000 in 2019, where the state average is about $48,000. A cable splicer made nearly $160,000 in 2019, but — according to Indeed — the national average is about $55,000 per year.

The Board of Public Utilities had 246 employees who earned more than $100,000 last year, including positions like Trouble Call Clerk, Carpenter, Leak Detector, and Mechanic.

The complete $52 million payroll list is available at KansasOpenGov.org.

Mehlhaff says Board of Public Utilities employees enjoy fully-paid health insurance and pensions that are more generous than the Kansas Public Employees Retirement System (KPERS).  A KCK BPU retiree hired before 2010 with 35 years of service and whose final average pay is $100,000 would get a pension of about $77,000

Who pays?

How does the Board of Public Utilities pay these salaries? By charging the consumers significantly higher electric rates than surrounding utilities.

The KCK BPU in 2019 charged a residential rate of 14.36 cents per kilowatt-hour for electricity, according to research from Kansans for Lower Electric Rates. Other municipal utility companies charge less, including Independence Power and Light in Independence, Mo., at 13.70 c/kWh, and McPherson, Kansas, sits at roughly half of KCK BPU at 7.17 c/kWh.

Investor-owned utilities also have lower residential prices. Evergy (formerly Westar and KCP&L) was at 12.72 c/kWh but rates in other states are even lower.  Southwestern Electric in Arkansas was at 8.41 c/kWh, Oklahoma Gas & Electric charged 9.64, the rate at MidAmerican Energy in Iowa was 10.35, and Ameren Missouri charged 10.35 c/kWh.

KCK BPU commercial and industrial customers also pay exorbitant rates.  The commercial rate of 11.68 c/kWh is 79% higher than charged in McPherson, 77% higher than Southwestern in Arkansas, 61% higher than Oklahoma Gas & Electric, and 26% higher than Evergy.  The industrial rate of 8.30 c/kWh is higher by 65%, 51%, 67%, and 10%, respectively.

Kansans in general pay much higher rates than in other neighboring states, but the rates charged by the KCK Board of Public Utilities are particularly egregious.

Former state senator and KCK resident Chris Steineger says the Board of Public Utilities is taking advantage of Kansas City residents for the benefit of government.

“BPU over-hires, over-pays and passes those costs onto the poor and working class of eastern and central KCK.   Many pay more for utilities than they do for property taxes.  The black community is especially hard hit by BPU rates because they often live in older homes that are less energy efficient.”

Little oversight or recourse for customers

The KCK Board of Public Utilities can charge whatever it wants because publicly-owned utilities like KCK BPU are outside of the jurisdiction of the Kansas Corporation Commission, which must approve any rate increases by investor-owned utilities.

Instead, rates — both water and electric — are set by a six-person elected board, which has the authority to increase those rates without oversight by the KCC.

An investor-owned utility that wishes to make a rate increase must first file a case with the KCC explaining why the increase is required, inform the consumers of the prospective increase and the KCC must then hold public hearings prior to making a determination on any increase. Additionally, any consumer with a problem with their utility has recourse to the KCC if the utility does not resolve the complaint.

Publicly-owned utilities have no such oversight, and consumers have recourse only to the board of directors, not the State of Kansas.  Senator David Haley (D-Kansas City) in the past introduced legislation to put KCK BPU under the jurisdiction of the Kansas Corporation Commission, the city’s lobbyists shut it down.

Next: An overview of KCK BPU water rates in Wyandotte County, with compelling insight from Senator Haley.

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