The Woodlands Township on Aug. 26 voted 7-0 at a special meeting to approve the third amendment to the Regional Participation Agreement between the township and the city of Houston following a Houston City Council meeting held earlier that day.
Houston officials had delayed their vote on an agreement that would permanently eliminate the possibility of Houston annexing The Woodlands Township and provide for $50 million in payments from The Woodlands to Houston by 2030.
The agreement will take effect if it is approved by Houston.
What happened
Houston City Council delayed voting by one week, but The Woodlands went forward with its 4 p.m. meeting to discuss the plan.
Earlier in the day, Community Impact reported that Brad Bailey, chair of The Woodlands Township board of directors, said the deal would be a “win-win” for both Houston and the township.
He explained that the deal will provide funds for Houston, but in the long term it would allow The Woodlands to keep its sales tax revenue within the township. The township has had a deal in place since 2007 to send one-sixteenth of 1% of sales tax revenue to Houston annually for regional public works projects "of mutual benefit" in exchange for annexation being off the table until 2057.
“We are in a good financial position to better our community and to advocate for our community," Bailey said at the township meeting. "And that's why we're in this situation, but that's how the urgency question that we've got from a few people, the urgency is on the city of Houston's part, more so than on our part, because they need short-term money, but we're looking at the long-term possibilities."
Vice Chair Craig Eissler said there is urgency from The Woodlands as well, noting the agreement would end the sales tax payments that otherwise do not have a stated end date.
“The sooner we do this, the sooner we can stop paying the city of Houston and keep that money for ourselves. That's the urgency in my mind,” Eissler said.
According to discussion at the meeting, the agreement would not remove The Woodlands from Houston's extraterritorial jurisdiction.
The details
The amendment would end the long-term Regional Participation Fund payment structure between Houston and The Woodlands, providing for a total of about $27.4 million in payments from The Woodlands Township to the city over the next three years, as well as releasing restrictions on the $22.6 million currently in the RPF to make those funds available to the city of Houston.
The payment schedule to Houston for the $50 million is proposed as:
- $22.63 million by Dec. 31 this year
- $9 million by the end of 2027
- $9 million by the end of 2028
- $9.37 million final payment by Dec. 31, 2029
The funding structure to pay out those amounts, according to information from the township, is:
- $22.6 million to be paid from the RPF balance by Dec. 31 this year
- $7.9 million in payments to city of Houston as part of the existing sales tax agreement from 2027-29
- $19.5 million to be funded from township cash reserves
According to the township
Township President and CEO Monique Sharp said under the current agreement, the township stands to pay an average of $4.5 million annually through 2060.
If approved by the city of Houston, the agreement would also eliminate the possibility of future annexation by the city of Houston.
Among the residents who spoke during public comment, several stated they felt they had not received enough information before the meeting. Resident Adam Cohen said he felt it was important to consider the amount of money already leaving the township through the sales tax agreement.
“It’s important that we keep our sales tax local," Cohen said. "I think there's a lot of emphasis on this headline number of $50 million, but as it was pointed out, $2.5 million plus this year alone is leaving The Woodlands for projects that don't necessarily benefit directly to The Woodlands."
Secretary Linda Nelson said she felt the amendment benefits both Houston and The Woodlands.
“Houston is getting something from this," Nelson said. "They really are [strapped] for money right now, and if somebody can hand them $50 million where they can move forward with some of their really important initiatives, I would hope that they would say ... [let's] move forward with that. So The Woodlands is definitely getting some great benefits, but Houston is too,” Nelson said.
The city of Houston will host the next City Council meeting next Wednesday, Sept. 2. The agenda can be found on the website here.
