Despite projected losses in taxable property value across Montgomery County, The Woodlands Township board of directors approved its fiscal year 2024 budget Aug. 22 with an emphasis on completing needed capital improvement projects.

The board adopted a no-new-revenue tax rate of $0.1714 per $100 valuation for 2024, meaning the township will not collect more revenue from property taxes. However, growth in hotel and sales tax have helped balance budgetary needs for the township’s long-term planning, township President and CEO Monique Sharp said.

Efforts to increase reforestation, rebuild fire department facilities, renovate area parks and even considering funding a performing arts center in the future all came forward as priorities for the board in 2024. The fiscal year begins Jan. 1.

Two-minute impact:

With $29.7 million in capital improvement projects scheduled for 2024, The Woodlands Township board members said they are looking to do more with less money over the next year.

The Woodlands Fire Department will rebuild Fire Station No. 5 due to structural issues with the existing building. The Emergency Training Center, which provides training grounds for local fire departments, will also see improvements such as additional bathrooms and showers.

Restroom replacement and construction is also planned in a number of the parks, including Alden Bridge Sports Park.

The park is ready to enter a new phase of development over the next five years for revamped fields, lighting and capacity expansion, Chief Operating Officer Chris Nunes said.

“We will probably run out of some money as we get into [building] the bathrooms because we wanted to get a lot of these projects underway,” Nunes said.

In addition to those projects, funds are being directed to community services projects, such as additional recreation and public works facilities, and increased reforestation efforts aiming to replace trees lost to drought or other causes.

2024 major capital improvements in The Woodlands include:

The Woodlands Fire Department projects ($13M):
  • Rebuild of Station No. 5 on McBeth Way
  • Renovation of Emergency Training Center
Comprehensive Community services ($4M):
  • Supplemental funding for Town Center maintenance
  • Cofunding recreational facilities with The Woodlands Development Corporation
  • Use of 24 acres of Bear Branch Park for public works
Park needs assessment ($3.5M):
  • Alden Bridge Sports Park field expansion and renovation
  • Public restrooms in area parks
  • Additional lighting and safety provisions
Reforestation ($1M):
  • Efforts doubling to 6,000 trees a year
  • Township will track trees cut and trees planted

A closer look:

A record number of property value lawsuits against the Montgomery Central Appraisal District in 2022 and 2023 along with homestead exemptions withheld by MCAD caused a $2.3 billion loss in property tax value that will cause budget issues in fiscal years 2024-25 for local taxing entities, county Tax Assessor-Collector Tammy McRae said.

However, township officials said the value loss will not have as large an impact on the township as it will other taxing entities.

“We have ... accounted for all of the [lawsuits] that have been settled, and we have allowed for an uncollectable rate for the ones that are pending,” Sharp said.

The no-new-revenue rate of $0.1714 per $100 of home valuation approved by the township board allows it to collect the same amount of property tax revenue as the previous year.

The projected growth of hotel and sales tax revenues have also been a boon to the township, Sharp said. Sales tax revenue grew from $55.06 million to $75.69 million from 2019 to 2024, and hotel property tax revenue grew by $3 million.
Some context:

The township has $113 million in total reserve funds; however, the majority is predesignated to various projects.

Sharp said a portion of the township’s capital improvement fund, which is replenished by the capital replacement reserve annually, is set to be spent over the next five years starting in 2024.

The township maintains a capital improvement fund each year for routine maintenance and replacement projects. Sharp said it prevents the township from needing to use bond funding for capital projects. However, the 2024 planned projects will reduce the general capital improvement fund from $70.5 million to $48.4 million by 2025.

The capital replacement reserve of $31.5 million will help to maintain the ongoing improvement fund, Sharp said. Sharp informed the board Aug. 22 that funding for projects, such as a potential performing arts center, could not be officially budgeted until the 2025 budget cycle.
What they're saying:
“Alden Bridge Sports Park is not fully funded. We did the best we could with the $19 million that was available last year, but it’s just like Bear Branch Park," Sharp said. "Somewhere in all of those projects, that $3.5 million is needed in order to advance those highest priority projects that were identified.”

“You get your money, and then you figure out how to spend it," said Kyle Watson, vice chair, The Woodlands Township board of directors. "My preference is you find what your [tax] rate is, and then you have a finite amount of money that we can find out where our priority in these initiatives should fall.”

What's next:

An indoor performing arts center for live music and theater near the Cynthia Woods Mitchell Pavilion in The Woodlands has been a topic of interest since before the pandemic. However, the project was put on hold in 2020 due to economic conditions, and the township did not extend an agreement to explore the possibility with the Pavilion.

The board unanimously agreed Aug. 22 to put a center back on the table as a funding priority starting in 2025. Sharp said the township has $8 million available to create site development plans and then leverage funding for potential debt to build the center. A potential cost for the center has not been released.