Preparation for incorporation and enhanced amenities dominated discussions regarding The Woodlands Township budget for fiscal year 2016-17, which will be up for adoption Sept. 14.

There is no concrete timeline for incorporation, but The Woodlands has until 2057 to do so before it risks becoming annexed by the cities of Houston or Conroe. In preparation, the board voted to place $2 million in the new budget to establish an ongoing road and bridge fund and also set aside $2.5 million in an incorporation reserve fund.

The board of directors also set aside $6 million for construction of future communitywide projects during the budget initiative process. Proposals include an Olympic-size pool, the potential purchase of the Creekside YMCA facility and construction of a soccer office building at Bear Branch Park.

“I think you get better government when you have robust discussions of these issues,” township Director John McMullan said. “[It’s my opinion] that there is quite a bit of alignment on this board that we preserve and enhance our first-rate amenities. Where there are disagreements [are] primarily transportation matters. It’s my hope those disagreements don’t bleed over into over items where, if I’m reading the tea leaves correctly, there is agreement.”

Budget details

The proposed budget, which includes $124 million in revenue and $121 million in expenditures, maintains existing service levels and accommodates for growth and changing economic factors, said Monique Sharp, assistant general manager for finance and administration. Compared to the FY 2015-16 budget, projected revenue is approximately $2 million less, and projected expenditures are about $9 million less. The proposed tax rate is 23 cents per $100 valuation, which remains unchanged.

In The Woodlands, taxable values have risen steadily over the last five years, up from $12.6 billion in 2012 to a projected $19.5 billion in 2017, resulting in lower property tax rates.

“As those taxable values have increased over time, the township board has made the decision to lower the property tax rate in conjunction with those increases and with increases in sales tax,” Sharp said.

The township’s tax rate has dropped nearly 10 cents since its inception in 2010 when it was at 32.80 cents per $100 valuation. Only about one-third of the $124 million in projected revenue for FY 2016-17 will come from property tax revenue. The remaining 64 percent comes from grants, bus fares, sales tax and hotel occupancy taxes, the latter two of which have been flat in FY 2015-16. However, sales tax still makes up the largest percentage of revenue in the budget at 40 percent.

“The factors that have contributed to the decrease [in hotel taxes] from the 2016 budget projections are two new hotels that opened later in 2016 than anticipated,” Sharp said. “There is also a saturation of hotel rooms due to the new ones, not only in the township but in neighboring communities.”

Regardless of the flat sales and hotel tax collections, the board agreed the proposed budget is still fiscally conservative.

“I think we’re in a good spot going into 2017, and I think we’re being prudent given economic conditions,” township Director Gordy Bunch said.

Incorporation preparation

The combined $4.5 million set aside for incorporation efforts—in the road and bridge and reserve funds—will help mitigate immediate expenses that may be related to incorporation. All members of the board—with the exception of board Chairman Ed Robb—voted in favor of the road and bridge item.

“We have not had our [resident] survey come back telling us the appetite of the people for any quicker incorporation,” Robb said. “I’d rather have that information before I know how much money we’re just throwing into this.”

Township Director Mike Bass said when The Woodlands does incorporate, it will need a significant amount of money in a road and bridge fund.

“That is going to be primarily one of the biggest areas we’re going to have to deal with,” he said. “I don’t see this as just a 2017 initiative, I see it as an ongoing strategy to prepare to incorporate no matter when we do it.”

However, the true cost of incorporation is not yet known. The last study completed on the topic was in 2012, which several directors believe was flawed.

McMullan also spoke in favor of the reserve.

“I think, irrespective of the date of when we incorporate, with the benefit of hindsight, I think we would have been better served if years ago we started putting away $1 million a year [for incorporation costs] or something like that,” he said.

Ultimately, residents of The Woodlands will have the final say over whether or not to incorporate through a communitywide election if the board of directors chooses to call one.

Enhanced amenities

New amenities may be in the future for The Woodlands as well. The board of directors took another step forward regarding a proposal for a 50-meter Olympic-size pool at Bear Branch Park by setting aside $6 million for that proposed project and other communitywide park projects.

Township Director Ann Snyder said she believes a 50-meter swimming pool is something the community does need.

“Some of us who have not lived here for a long time may not remember the incredible opportunity when the [Woodlands Athletic Center] was here and had Olympians and people come [to The Woodlands],” she said. “It was amazing, and I would like to see us bring that back.”

The projected cost for the pool is a capital investment of $6.8 million, and local swim teams have indicated they would contribute $1.5 million of the total cost. A $5.3 million capital investment would be left for the township.

There are a number of issues still in flux regarding the proposal, including issues like parking spaces and a balance between recreational and competitive uses, both brought up by township Director Laura Fillault.

Township Director Jeff Long said he is warming up to the concept of a 50-meter pool, but said he hopes the township would be creative in bringing together the needs of both standard recreational and competitive users.

“I’m sure this will be a difficult task, but I’m in favor of trying to figure this out and move forward,” he said.

Additionally, although the township has not purchased the YMCA at Creekside, it did place $100,000 in the 2017 budget for operations in case it decides to purchase the facility.

EDP funding agreement

The Woodlands Township is drafting changes to a funding agreement with The Woodlands Area Economic Development Partnership in response to political positions the organization took in 2015.

During its budget process, the township provides $175,000 to the EDP annually, which is approximately 20 percent of the nonprofit’s budget.

However, the funding request has been under scrutiny since it was brought up during a July meeting by township Director John McMullan that the EDP supported both county road bonds last year. The township board as a whole did not take an official stance on the May road bond, but it officially oppose the November bond.

“The point here is to provide public scrutiny where there is public funding,” McMullan said. 

The new agreement is meant to clarify that the EDP board cannot take public political positions, such as resolutions, against the official will of the board.

“If we were just a member of the EDP and not 21 percent of the total budget, I would agree we have no reasoning to apply [restrictions],” township Director Gordy Bunch said.

If the township board approves the changes to the service agreement, the EDP’s board of directors will also have to approve the new agreement.