Mike Bass, Guest Editorialist to The Golden Hammer
I received some feedback and several questions as a result of my last comments regarding the Tuesday, June 25, Special Incorporation Planning Meeting, which I would like to share and provide my perspective.
Will the Senate Bill 2 3.5% Property Tax Cap have any Impact on the proposed maximum tax rate that must be proposed as part of an Incorporation Election?
A question was raised:
So- if in the future, The Township Board decided to put “Incorporation” on the ballot for the residents to vote “yes” vs. “no” as to Incorporation – it must also show on the ballot what the tax cost would be if the residents approved incorporation.
I think that this means…. let’s say the Incorporation ballot showed a tax rate of – say 38 cents/$100, a 73% tax increase. Why would any voter agree to pay more than the 3.5% protected tax amount? Said another way; if you want to keep the current benefit of the 3.5% tax cap…………. then vote “no” on incorporation.
My answer is…. In the Tuesday night meeting, Monty Akers explained that Senate Bill 2 would not apply to the initial tax rate of a newly incorporated city. The increase in tax rates between the current Township tax rate and the proposed tax rate of a new city will not be affected by SB 2.
Due to the County transition agreements, the initial Year 1 tax rate will be lower than what will be ultimately required. The Board has said it will probably set the maximum tax rate at what will be required in Year 5. This will result in a buildup of cash reserves over the initial five-year life of the new city.
Monty Akers went on to explain that he knows of no incorporation election that included a proposed tax rate. The requirement to vote on a maximum tax rate is unique to The Woodlands given our 2017 enabling legislation. The above question does pose a separate issue- why would anyone vote for incorporation when faced with a significant tax increase, a question separate from the issue of the 3.5% tax cap. What benefit will accrue from this increased cost?
Many of you asked what are the driving reasons behind incorporation?
Fear of annexation is not a reason to incorporate in the foreseeable future or perhaps ever. Given our RPA agreements and the 2017 and 2019 Legislative changes negating “forced annexation,” it is now very clear that no one within the Woodlands should ever fear annexation. If we wish to be annexed, it will be solely our choice. I agree with Chairman Bunch that the fear of annexation is not a rationale for becoming a city. It was also not a rationale on February 22, 2017 when the Board decided to embark on the current study. Chairman Bunch confirmed this fact again in the Tuesday planning meeting last week. Yet, as Amy Lecocq pointed out in her recent Public Comments, the Board has allowed the consultants and others to continue to use annexation as a “Pro” for incorporation and to instill unnecessary fear in the minds of our residents. As part of its existing incorporation education campaign, The Board needs to clearly state that annexation is not a risk we face.
So, what are the reasons for becoming a new city? I think the rationale for justifying incorporation anytime in the foreseeable future is still very muddled and continues to change as Chairman Bunch seeks to prop up his agenda to become a city. But here is what has been put forward so far:
- The initial trigger for the incorporation study was concern over The Woodlands Parkway Extension and turning Gosling Road, and Branch Crossing into thruways heading to Conroe, North, and West County. I am against creating major thoroughfares though our community. But this is not going to happen. The rational that these sort of road extensions are a reason to incorporate have all gone up in smoke.
- I still hear people talking about the need to fight The Woodlands Parkway extension. Have they not been listening? The intersection of a new road connecting 249 and FM 2978 has now been moved south of The Woodlands to Manson Way, completely outside the territorial limits of The Woodlands?
- The new anti-development legislation for Jones Forest will prevent any extension of Gosling to the north. So, the rational that these sort of road extensions are a reason to incorporate have all gone up in smoke.
The need for other road expansions will be driven by the need to accommodate growth within and outside The Woodlands, something over which we will have little control. What The Township can control is to work with the Counties to ensure our roads keep pace with growth, so our residents are not bogged down in traffic. Today, The Township needs a transportation strategy.
- A more recent rational for incorporation is Flood Mitigation. This again is “Fake News.” Regardless of whether we incorporate or not, the shared responsibility for flood mitigation rests with our MUDs, SJRA and the Harris County Flood Control District. This will not change if we become a city, unless the new city annexes the MUDs- a whole other issue.
The Township could do more today to partner with the entities that have statutory responsibility for drainage and flood mitigation. The Township has $16 million sitting in its Incorporation Reserve. Why can’t a portion of these funds be reallocated to flood mitigation? The Harris County Flood Control District has $90 million allocated for flood mitigation in the Spring Creek watershed. But it still needs at least $16 million in matching funds. The Woodland’s MUDs have been willing to put up $400,000. Where is the Township’s check?
- Another justification for incorporation is that as a city we will be more successful in obtaining grants. What grants? From who? At a recent meeting, one of our Commissioners put it very simply- you do not need to be a city to have a seat at the table and being a city will not improve your chances in obtaining grants. He went on to say, that for many grants, The Woodlands does not meet the income demographics required.
- Another justification for incorporation is that we control our own destiny. What does this mean? Cities realize that there is no such thing as absolute control. As we should be doing today, our new city needs to work with a number of state and local entities to accomplish our goals. This collaboration could be done today. How much control do we achieve if, as proposed, our new city would continue to rely on the County for law enforcement and road maintenance services, something they can terminate with only 180 days’ notice.
- Lastly, another rationale for incorporation being voiced by some residents is the ability to enact planning and zoning regulations to exercise more control over the developer and future development. In the June 21 edition of the Golden Hammer, Paul Lazzaro, opined as to whether Incorporation was still necessary (see article that follows). Mr Lazzaro has long advocated incorporation. His rationale is all built around the need to control our own destiny, to slow new development and prevent road expansions. Mr Lazzaro’s comments will resonate with some uninformed residents that would prefer The Woodlands remain as it was when they move here in the 1980’s and 1990’s. His argument regarding achieving more control over future development is contrary to what a new city can do or what is allowed under the Local Government Code.
- A city has a choice to either adopt planning and zoning regulations or enforce covenants. They cannot do both! The choice is made by the City Council, not the voters.
- Our covenants and deed restrictions are private contracts that go with the land. They do not go away with incorporation. The only question is who will be responsible for enforcing them- The Township or a new HOA? If a new city council should decide to adopt planning and zoning, we would be required to return to the days of HOAs and assessments, a big step backwards.
- In 2008, The Township agreed, as part of the dissolution of our three HOAs, to continue to enforce our covenants and deed restrictions. However, as part of the recent incorporation study, The Township Attorneys have advised, that in their opinion, the provisions of this agreement are not completely enforceable. This provides a future city council an option to step away from the current obligation to enforce our convents. This is in spite of the 2017 incorporation enabling legislation that required the new city to assume all the obligations of the old Township for it to be dissolved.
- Another key factoid is that we are a Master Planned Community. This has “real meaning” in that the bulk of The Woodlands has been planned out, and in effect been legally zoned as to its use. The application of planning and zoning regulations is not retroactive but only looks to the future. Thus, the existing land use designations would all be “grandfathered” if planning and zoning regulations were adopted. In addition, any overly restrictive zoning regulations could be deemed a “taking,” requiring the new city to compensate the landowner for any loss in market value.
Today, The Woodlands has a highly effective covenant model that has served us well for over 40 years. It ensures that a high-quality community is maintained and protects our property values. Incorporation will put this model at risk. We need to stay with what has worked.