Although The Woodlands has until 2057 to incorporate before it can potentially be annexed by the city of Houston, local officials have begun evaluating the process to become a city.

The topic of incorporation has come up in regard to the Montgomery County Thoroughfare Plan, which includes several road projects The Woodlands opposes. However, several township directors believe there are additional reasons for the informal discussion on the subject.

“I think it has less to do with roads than the frustration of not having a seat at the table where decisions are being made by others which may adversely impact us,” township Director Mike Bass said. “This is a bigger issue than the Woodlands Parkway extension.”

Township Director John McMullan said The Woodlands will receive better, more responsive and more accountable governance when it becomes a city.

“Montgomery County’s stubborn insistence on routing non-Woodlands-bound traffic through our community against the will of our residents certainly plays a role in increased interest in incorporating,” he said. “The desire to have greater control over roadways is one of the reasons why there has been increased interest in incorporating.”

Governance history

Founded in 1974 by George Mitchell, The Woodlands is a master-planned community that encompasses 25,000 acres in a wooded area formerly used by the Grogan Cochran Lumber Company. Mitchell developed the community with a $50 million loan from a federal Housing and Urban Development program, and it has since become home to 110,000 residents although it is not a city.

After its inception, several community associations were established to provide services to Woodlands residents along with a Town Center Improvement District that promoted economic development. All the organizations were merged in 2010 under what had become the township’s umbrella.

The Woodlands Township is a special-purpose district that was created in 2007 through legislation, a referendum and regional participation agreements with the cities of Houston or Conroe. These agreements also released The Woodlands from potential annexation by Houston and Conroe until 2057 in exchange for a portion of the community’s sales tax.

“The township was created through enabling legislation that was focused around giving us not all powers that a city has, but certain powers, and to avoid annexation,” Bass said.

The push to avoid annexation by Houston does differ from Mitchell’s original vision for The Woodlands. He envisioned the community would one day be annexed by Houston, according to Roger Galatas’ book, “The Woodlands: The Inside Story of Creating a Better Hometown.”

Although The Woodlands sits in a different county than the city of Houston, cities in Texas can have extraterritorial jurisdiction outside their boundaries, which is land that can be annexed by the city in the future. Prior to the opening of The Woodlands, Mitchell asked Houston City Council to extend its extraterritorial jurisdiction to encompass The Woodlands’ boundaries, according to Galatas’ book.

However, over time the community’s view on annexation by Houston changed—partially in response to the controversial annexation of neighboring master-planned community Kingwood in 1996—and the 2007 agreements took that risk off the table for 50 years.

Ultimately, voters in The Woodlands will decide if the community should incorporate if the township board calls for a vote to place the item on the ballot. There is no concrete timeline at this point, but the topic is on the board’s mind.

“It could be in five years, it could be in three years or it could be in 10 years,” township Director Laura Fillault said. “None of the board members want to be rash about how we’re pursuing this. I think we all acknowledge we have to keep moving in that direction because we will have to incorporate someday. There are too many unknowns right now, but we don’t want to let it sit on the sidelines.”

Pathway to incorporation

There are two types of cities in the state of Texas: general law and home rule.

“The basic difference between the two is that in a general law city, your only authority is that granted to you in the statutes,” Bass said. “In a home rule city, your authority is anything your [city] charter provides as long as it’s not in conflict with [state] statutes.”

The Texas Constitution only allows communities to incorporate as general law cities which have populations of 5,000 or less. However, The Woodlands has a population of roughly 110,000 people.

“If you think about the fact that you can only incorporate as a general law city and statutes say they are for cities of 5,000 or less, how do we get incorporated?” Bass said. “There’s some gray area that someone could ultimately challenge an election as valid … We need to have legislation that clearly shows how you can have a safe election for a general law city given these ambiguities.”

The assets and personnel of the township would also need to be transferred to the new city, much like what happened when the Town Center Improvement District merged with the township.

Bass said the township’s enabling legislation from 2007 did not provide a path to incorporation, which is why additional laws and research are needed. Furthermore, McMullan suggested during the April board of directors meeting that the township’s resident survey, which is conducted every two years, include several incorporation-related questions on it this year to find out resident attitudes on the topic.

McMullan said he believes The Woodlands should incorporate once the benefits of doing so outweigh the costs.

“Based on what I know today, we have probably reached the point where the benefits exceed the costs,” he said. “That being said, the township board should solicit input from a variety of advisers with the goal of obtaining a better understanding of the expected benefits and costs of incorporating.”

If the township places incorporation on a future ballot a simultaneous election may be held to select a mayor and council members. A general law city has a mayor and four council members—two fewer positions than the existing township board of directors.

The Woodlands could then start down the path of becoming a home rule city by drafting a city charter that would also need approval from residents.

“These are not simple documents,” Bass said. “They have a lot of political ramifications and lots of differences that are philosophical in terms of how residents want to run their cities.”

Costs to incorporate

The township last completed a study and gathered resident feedback on the topic of incorporation in 2011-12, at which time a majority of residents opposed it.

Township board chairman Ed Robb said he has no doubt The Woodlands will incorporate, but it is just a question of timing.

“[The] study conducted in 2011 indicated residents did not support incorporation at that time as they felt the existing form of government served their needs at a low cost,” Robb said. “The final decision of when to incorporate will be made by our residents at such a time that they determine is right.”

However, several directors believe the study was flawed—primarily in regard to the projected tax rate after incorporation—which stated taxes would increase by 70 percent. Township Director Gordy Bunch said the projected increase would only affect the township’s tax rate of 23 cents per $100 of property valuation, not the total tax bill.

“We’re talking hundreds of dollars, not thousands of dollars,” Bunch said. “There’s no indication that being locally governed [as a city] would come anywhere close to costing as much as being annexed by Conroe or Houston.”

Other ambiguities relate to several special powers the township was granted during its creation that cities do not have. One example is no restrictions on 1 cent of sales tax the township collects for economic development purposes.

“[The township’s] 1 cent tax has no restrictions; we can use it any way we want to,” Bass said. “If you lose the 1 cent of sales tax, what’s the impact on property tax? It goes up.”

Additionally, the township has no restrictions on its hotel occupancy tax collections as opposed to incorporated cities.

“[These ambiguities] are ignored in the 2012 study,” Bass said. “Their assumption was that we would retain all that. Now, when you talk to lawyers and political advisers, some of this won’t be easy or doable at all.”

Although they recognize there will be challenges on the road to incorporation and do not want to speculate on timing, directors said they want to keep moving in that direction in a measured way.

“I don’t want to leave this to future generations to resolve when those of us who were here at the beginning can see it through, especially if we have eminent threats to quality of life in our community,” Bunch said.