As the studies into possibly incorporating The Woodlands continue, many residents and others following the issue have pondered the possibly of the township being annexed by either the city of Houston or the city of Conroe, which cannot occur until at least 2057. During the most recent incorporation planning meeting on Oct. 23, township President and General Manager Don Norrell provided residents a clarification on the issue.
Norrell read from notes he had compiled on the legal analysis of regional participation agreements, also known as RPAs, that The Woodlands entered into with both Houston and Conroe in 2007, which prevented the township from being annexed until 2057.
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Under the agreements, The Woodlands agreed to pay about $16 million to Houston as well as 1/16th of a penny of the township’s general sales tax revenue — which amounts to about $1.3 million per year — for 99 years.
The issue of whether or not The Woodlands can be annexed has vexed residents for the past several years, with some critics of the incorporation studies stating there is no need for the township to rush into incorporation — which first must be placed on a ballot by township directors before possibly being approved, along with a tax rate, by community residents before it could become reality — because the township in their view could not be annexed by Conroe or Houston until 2057.
However, Norrell said that township officials believe that under the RPA agreements signed by The Woodlands in 2007, legally the township has already agreed to possibly being annexed after 2057. Norrell also went into a lengthy explanation of issues related to state laws, extra territorial jurisdiction rights and scenarios if parts of the township were annexed by Conroe and Houston in the far-off future.
“The RPA really came about in 2006 and it was a discussion between The Woodlands community, and the city of Houston and (state) Senator (Tommy) Williams,” Norrell explained. “In the 2007 state legislative session, there was a provision created in state law that created the regional participation agreement. The legislation that was enacted did not automatically create this provision.”
Norrell continued to explain the legal aspects of the legislation, noting that it allowed for the expansion of the Town Center Improvement District from 2-square miles to 44 square miles of The Woodlands; and the creation of one entity — The Woodlands Township — by combining the existing community associations and the Town Center Improvement District. Then it allowed for the creation of the current seven-member board of directors.
“That was put to the voters in November of 2007 and there was a substantial majority of the voters that approved that RPA. The RPA was then entered into with two cities: the city of Conroe and the city of Houston,” Norrell added. “Once we entered into the agreement, it basically said that The Woodlands and the city of Houston, and also Conroe in this respect, agreed to defer annexation for a 50-year period. That started in 2007, so do the math, it is 2057 that is the annexation deferral period. Equally as important, though, in the state of Texas, we have what is called the ETJ of cities — the extra territorial jurisdiction of cities — once you are in an ETJ, that means you belong to them. They hold you in their territory. This agreement provided a plan that basically said if at such as a time if The Woodlands voters would decide to incorporate, the cities of Houston and Conroe would release us from their ETJs. Unless you can be released from those ETJs, you cannot (incorporate).”
Norrell continued by explaining other details of the RPA for agreement on mutually beneficial projects, how the township agreed to pay the $16 million initial fee and then the 1/16th of one cent of general sales tax for 99 years —about $1.3 million per year in payments. In the 2017 and 2019 Texas legislative sessions, laws were approved that tweaked the annexation process, requiring voters to approve any annexation.
“We have a very strong need to maintain that regional participation agreement. Again, it gives us that window should The Woodlands try to incorporate in the next 38 years. But more importantly, keep in mind how many times state law changes. Every two years, you can see laws in all the legislative categories changing. a change in annexation could really impact you in the future if you do not have this (RPA) agreement in place,” Norrell added. “This agreement is a solid agreement, it provides those benefits of annexation deferral and the ability to get out of those ETJs. In my estimation, this is where we should be. It is an assurance that we need for this community in the long-term.”
Addressing the possibility that The Woodlands does not incorporate by 2057, Norrell said that after the 50-year annexation deferral period ends without the township incorporating, then it could be legally feasible that Conroe and Houston could annex parts of The Woodlands. He also said there are questions about hotel occupancy taxes, sales tax property taxes and if they could be collected and allocated by The Woodlands if some parts of the community are annexed.
“Under the terms of that (RPA) agreement, it can be argued that they could annex us. There is a scenario where you basically could end up where a portion of our township annexed be annexed by one of those communities. We also have the requirements that we enforce our covenants, which was one of the areas we took over from the community associations,” Norrell added. “We believe the township will remain as an entity or could remain in placer for the long-term. We have a 38 years left on an agreement that allows us to incorporate, we know exactly what those conditions would be and we have the ability to make those changed we need to under state law. I am not saying that incorporation is the way to go, but what I am saying that the RPA we have in place gives our residents the ability to feel assured that they have decisions points over the next 38 years that cannot be taken away from them by either changes in legislation or other actions as long as we stay within that agreement and meet those conditions.”
Township board Chairman Gordy Bunch told members of the Novak Consulting Group that township officials had been reviewing the RPA agreements, which played a large part in the creation of the official The Woodlands Township in 2007.
“We are going to work on an RPA discussion piece as part of the incorporation process. We think we have not done a good service to the community in explaining in detail how that contract works. We have spent a lot of time talking about how do you go from a township to a general law city to a home rule city,” Bunch explained. “We did not do a good enough amount of time on what happens at the end of our deferral period if we do nothing. Because, there are consequences of doing nothing. We have a pros and cons kind of questionnaire on the (incorporation information website), but we’ve completely omitted what occurs at the end of our deferral period. there is a lot of talk about waiting 38 year period to take any action. We’ve learned more going through the RPA agreements. It is really good information and also critical to understanding how does our model play out versus what happens down the road.”
Bunch also stressed that Conroe and Houston can still annex The Woodlands in the future, after 2057, which would lead to those two cities taking on some responsibilities such as policing, fire and other services. If that did happen, township officials could not guarantee the same level of services or other elements such as covenant enforcement, he added.
“I don’t believe many people understood that annexations rights still exist for Conroe and Houston. Those have not been eliminated. There is a sense that annexation is completely wiped out and no possibility exists,” Bunch added.
The next incorporation planning session is planned for sometime in December, when the consultants from the Novak group will return with more information on the law enforcement model that was put on hold during the Oct. 23 meeting.