As the only township in the state of Texas, The Woodlands has found itself in a unique position in recent months of weighing the pros and cons in becoming a city.

As a result, The Woodlands Township is now halfway through a study on what it would take to incorporate into a city to protect itself from annexation by surrounding cities.

In January, the township entered into an $842,500 contract with two consulting firms—Matrix Consulting Group and The Novak Group—to complete studies on how The Woodlands could take control of services, such as law enforcement and road maintenance, as well as how incorporation would financially affect residents.

As part of the studies, the township held the first of two public forums Sept. 25 to allow residents to hear the results of the study drafts and provide feedback on incorporation. Results so far included draft reports on law enforcement, road and pavement, and the relationship between covenants and ordinances.

With about 300 residents in attendance at the forum, concerns ranged from increases in taxes to what long-term effects becoming a city would have on the community. However, during the forum, many residents asked why The Woodlands has seemingly moved so quickly toward incorporating. The board had last studied incorporation in 2011-12 with another firm, Partners for Strategic Action, Inc.

Township officials said they are still learning what effects incorporation may have for residents.

“I look at the process, I understand it’s complicated,” township Chairman Gordy Bunch said. “There are things that we’ve learned over the last seven years that make it materially different from what the discussion was last time.”

Why now?
In 2007, the township entered into a regional participation agreement with the cities of Conroe and Houston. The Woodlands pays a portion of its property tax in exchange for a moratorium on annexation from both cities until 2057. Up until that time, the community could choose to incorporate, removing the risk of annexation, according to township documents.

While the township has just less than 40 years until that contract is up, township officials said there are other reasons to consider incorporation sooner rather than later.

Bunch said following the 2011-12 study, the township board discussed what could trigger an incorporation election. The township found its trigger when Montgomery County commissioners placed an extension of Woodlands Parkway on its thoroughfare plan in 2015. The project would have extended the roadway west of The Woodlands, connecting to Hwy. 249.

“Our community was very vocal and had the highest turnout in its history during the 2015 road bond where the Woodlands Parkway extension became a very contentious issue,” Bunch said.

Bunch said if the township were to incorporate, land needed for the extension would fall within the boundaries of The Woodlands, giving the township jurisdiction to oppose the project.

“Our community is excluded from all these local and regional decisions that have to do with our infrastructure, and as a municipality, that would change,” Bunch said.

Local control
In addition to gaining control of roadways, Bunch said he believes other factors, such as being able to directly receive disaster aid and vote on regional boards­—like the Houston-Galveston Area Council—are valid reasons to incorporate. As an association of local governments, H-GAC organizes programs for economic development, disaster planning and mobility in the Greater Houston area. Because the township is not a city, it can provide input but does not have voting power, Bunch said.

However, becoming a city also comes with obligations to provide services to residents, such as developing building codes, providing municipal court services and maintaining roads.

One major aspect of the study addresses law enforcement, currently provided through contracts with Harris and Montgomery counties. The Woodlands pays for the majority of officers who patrol the community and owns the police vehicles, according to the township budget.

Alan Pennington, vice president of Matrix Consulting, said The Woodlands has three options for law enforcement: keep contracts with the counties, develop an in-house department or combining the two.

During the Sept. 25 public forum, Pennington said the township board has suggested it would likely develop contracts with Harris and Montgomery counties to retain some of their existing agreements, which cost the township about $11.6 million annually.

“The board has indicated the desire to stay with the contract as it moves to a general law city,” he said.

Pennington previously said during the first draft of the law enforcement substudy in August startup costs for creating a new department could total $8.1 million to cover costs of additional staff, remodeling existing buildings and hiring additional staff.

To continue services with Montgomery County, the township would likely have to negotiate new contracts. During a Montgomery County Commissioners Court meeting Sept. 25, Precinct 3 Commissioner James Noack said the county and First Assistant County Attorney B. D. Griffin are already working with township staff.

“There are a lot of conversations we’ve had as to contracting with the county for services from law enforcement all the way to road maintenance, signal maintenance,” Noack said. “And so we need everybody to be on the same page as far as gauging what the willingness would be from both entities, and what fees would we charge if that were a possibility.”

While the cost of incorporation is still being determined, the township’s previous study estimated incorporation would cause property tax rates in The Woodlands to rise 70 percent. However, Bunch said the study made several incorrect assumptions, including that the township would be required to absorb the community’s municipal utility districts in its boundaries.

“If we were to absorb the MUDs, by state law, we would have to spread the costs equally across the entire community,” Bunch said. “So, the older villages in The Woodlands would be adversely impacted by absorbing the cost for the newer villages that had not quite paid down their debt.”

Bunch said through working with Matrix and municipal experts, the board learned the MUDs would be able to continue to provide water and wastewater services independently of the city, a concept not studied in 2011-12.

City challenges
Should incorporation be placed on a ballot, in addition to voting to become a city, residents would also vote to set a maximum tax rate for its first year as a city. Township residents brought up concerns about the long-term financial implications during the forum.

Former township Director Mike Bass, who served on the township board from 2012-16 in the aftermath of the first study, said while the tax rate would be known for the first year, it could increase in the future.

“I’m not opposed to incorporation. I just want to make sure that we know what we’re going to face when we go into it because the maximum tax rate is only a one-year tax rate,” Bass said during the forum. “If you’re wrong, we could have high taxes in the subsequent years.”

Bunch said while there are concerns about tax rate increases, there are some actions a city could take to protect residents from spikes in property tax bills, such as freezing the property tax rate for residents age 65 or older. To help offset initial costs, the township has already allocated more than $16 million in an incorporation reserve, according to budget documents.

In addition to financial concerns, the idea of incorporation has not been historically popular. According to the 2011-12 study, a survey of 400 residents showed more than 80 percent of residents opposed incorporation or were unconvinced the township needed to incorporate in the near future.

A 2016 resident survey with a sample size of 1,553 residents showed 70 percent of residents believed The Woodlands should not incorporate in the next five years.

“The feedback from the residents is that no one saw any need to incorporate any time soon,” Bass said. “There needed to be a great deal more education of the residents.”

Next steps
Pennington said the incorporation study is expected to wrap up in the spring and will have a financial model of expected costs. In addition to determining the overall cost of incorporation and its effects on the property tax rate, the study still needs to address final contracts and costs for law enforcement, infrastructure—such as signal and road maintenance—and municipal court services.

The study is also expected to include a new survey to gauge how residents feel about incorporation in the next few months as well as another public forum, a date for which has not yet been announced.

While the township could call for a measure to incorporate to be placed on a ballot in May or November 2019, board members said during the forum they have not yet made decisions on if they would make that call in the future.

“I have not made any decision whether or not I’m going to vote on incorporation,” township Director John McMullan said. “One thing that is vitally important to me throughout this process is that we overcommunicate information to give as much information as we possibly have. What we are trying to do is give the community the best information possible to make their determination.”