During the township’s budget workshop meetings in mid-August, the board voted to place $2.5 million into an incorporation reserve with four directors in favor of the motion, two abstained and one against at that time.
However, directors voted 4-3 Wednesday to remove the reserve before giving final approval to the budget. Township Directors Gordy Bunch, John McMullan and Laura Fillault were against the removal of the fund, while Ed Robb, Jeff Long, Mike Bass and Ann Snyder were in favor of removing the reserve.
As a result, Bunch, McMullan and Fillault did not vote in favor of the overall budget.
“I’m going to oppose [this budget] because we did not set forth an incorporation reserve,” McMullan said. “I think it’s far past time we should have done so.”
Bunch said planning and setting aside funding to mitigate the future expenses of incorporation is prudent.
“If you fail to plan, you plan to fail,” he said. “It’s a certainty this community will become a city, under what we know today. It will either become part of Houston or Conroe, or it will be locally controlled by The Woodlands residents.”
“I’m going to oppose [this budget] because we did not set forth an incorporation reserve. I think it’s far past time we should have done so.”
—Township Director John McMullan
Although Long made the motion during the August workshop to establish the $2.5 million incorporation reserve, he voted against it Wednesday.
“[After] we added the transportation funding portion to this and set up a reserve there, I’m not so sure I’m in favor of that amount any longer with that other reserve in place,” Long said.
When the board voted to remove the incorporation reserve, the $2.5 million was transferred to the township’s capital contingency fund, which now has a balance of approximately $3.7 million.
The establishment of a $2 million road and bridge fund was also factored into the FY 2016-17 budget to help with the cost of maintaining roads should The Woodlands incorporate.
Snyder, who said she believes The Woodlands needs to have the infrastructure and legislation to ensure that when the township does incorporate everything is in place, stood by her vote in August against the reserve.
"Predominantly, it's because the residents have not shared if they are or are not in favor of incorporation," she said.
Bass said there will be rocky paths ahead for The Woodlands if it does not figure out how to incorporate responsibly and clarify some of the legislative cloudiness that may exist today surrounding the topic.
“What I object to is putting money aside into a slush fund that has no purpose,” Bass said. “No one said what we’re going to use $2.5 million for … that’s why I object to the $2.5 million and have since the beginning.”
Fillault—who along with Bunch said the capital contingency fund is the true definition of a slush fund—also said she was not OK with the budget.
“I think it’s shortsighted to consider removing [the incorporation reserve] now, because later we are going to pay,” Fillault said. “I’m ready to set ourselves up for success in the future.”
The Woodlands has until 2057 to incorporate until it risks becoming annexed by the cities of Houston and Conroe, but no timeline has been set. Residents of The Woodlands will have the final say over whether or not to incorporate if the board of directors chooses to call an election in the future.
Tax rate
The township’s property tax rate for 2017 will remain the same from this year at 23 cents per $100 valuation. All members of the board voted in favor of the rate.
However, the rate is 1 cent higher than the effective tax rate of 22 cents per $100 valuation, meaning the township will collect an additional 4.55 percent in revenue from properties on the previous year’s tax roll.
Since the township’s inception in 2010 it has lowered the tax rate every year since, due in part to rising taxable property values in the community. Just over the past year, taxable value in The Woodlands has risen by more than $1 billion because of revaluation of existing properties and new construction, said Monique Sharp, assistant general manager for finance and administration.
Taxes on the average home worth approximately $439,000 in The Woodlands will increase by roughly $29 next year under the sustained 23-cent tax rate.
The board of director’s next regularly scheduled meeting is 9 a.m. Sept. 22.
