The Woodlands Township will start discussing fiscal year 2016-17 budget initiatives during a series of workshops beginning Aug. 15. At the forefront of these discussions is a funding request from The Woodlands Area Economic Development Partnership, which is under review because of public political positions the organization took in 2015.
Monique Sharp, assistant general manager for finance and administration, told the board of directors during a July 27 meeting that collections from sales and hotel taxes over the past six months are lower than budgeted, and further declines are expected.
“When we get into our budget initiatives, there’s going to be a lot of things requested of us,” township Director Jeff Long said. “Some of them we may not be able to afford this year. As a board, we have a greater responsibility to prioritize what’s important to this community.”
Every year, the township receives funding requests from outside organizations in the community. For the upcoming FY 2016-17 budget, requests from Interfaith of The Woodlands and South County YMCA and the EDP and Senior Rides amount to a combined $355,000. The decision to fund the organizations will be made during the budget process.
During the July 20 board of directors meeting, township Director John McMullan asked The Woodlands Area EDP CEO Gil Staley if the organization took a position on the two Montgomery County road bonds on the ballot in 2015. Although Staley initially said the organization did not, he later provided the township two letters of support for both the May and November bond elections after researching the EDP’s records.
“It’s our position, the business leaders here, that we are to look at all the issues that affect economic development,” Staley said. “Again, the purpose was not to divide this community. It was to try and move forward with mobility; the No. 1 issue we [hear] from our employers and the people who work here is about mobility.”
The proposed Woodlands Parkway extension from FM 2978 to Hwy. 249 has been a divisive issue in Montgomery County since early last year when the May 2015 road bond election included funding for the project. In The Woodlands, 9,825 votes were cast during the election, 86 percent of which were against the bond. Voter turnout was 16 percent in The Woodlands. However, the November county road bond received voter approval after the extension was removed from the list of proposed projects.
McMullan said it is his opinion the road extension may have been a good development for the business community but not for residents of The Woodlands.
“I’m interested to know what’s going to happen moving forward if we continue to fund the EDP,” McMullan said.
McMullan requested a decision from the EDP regarding the organization’s plans to take political positions against the will of residents in the future before a decision is made regarding the budget request.
“Economic development is part of The Woodlands, that is unquestionably true,” McMullan said. “Our taxes are all lower because we have these first-rate businesses in The Woodlands. The issue is whether the EDP—and other organizations that use taxpayer money—if we should let them take political positions against residents.”
Staley said the EDP has received money from The Woodlands for years, even prior to when the community became The Woodlands Township in 2010.
“As a nonprofit, and specifically a 501(c)(6), funding at every level is important and key to us,” Staley said. “It’s the only way we have the ability to perform as an economic development organization. The Woodlands Township, as it stands today, represents 21 percent of our overall funding.”
“How could they know they were taking action against us?” Snyder said. “The Woodlands Township board voted not to support the November 2015 [bond], yet the residents voted for it and it passed.”
Staley said the EDP board of directors agreed it will always consider the stance of the township’s board of directors as a whole.
“As we’ve always done, we look at the official stance of the township board and have strong consideration when we issue any proclamation,” he said. “The township does have two positions on our board of directors, so their voice is always there in any form of operation that we have. They are the only member that has two board seats.”
Long said he wants the board to be fair and reasonable in its decision rather than singling out just one agency with which it funds or does business and suggested the board look at a list of agencies that supported the road bonds.
“Many of those [agencies] supported the road bond in May, and a lot of them, contrary to our vote, supported it in November,” Long said. “I think for fairness, we need to figure out who those folks are and treat them like we would treat the EDP. There’s no difference, whether they put out a resolution or give money, it’s obvious what their position is and it may be contrary to how a vote may turn out.”
Sharp said the township forecasted a $3 million decline for FY 2015-16 in sales tax collections. For the six months ending June 30, the dip in sales tax revenue was offset by favorable property tax revenue, but hotel tax transfers are also down.
“These numbers are clearly lower, meaning that revenue numbers are clearly lower than we forecasted,” McMullan said. “If the trend is any indication, it may well continue through the year.”
The township’s hotel tax collections were $4 million, which is $115,000 more than the same period in 2015. In terms of what was budgeted, it is $600,000 lower, Sharp said.
“We see further declines that we know are coming in construction and things like that,” Sharp said.
However, even with a $3 million unfavorable variance in the budget, the township’s operations, capital or contributions to the reserve will not be affected, Sharp said.
“The only thing being impacted is how much money goes into the capital contingency reserve,” she said. “That’s the good news out of this.”