New Costs Outweigh New Revenue in Incorporation Study's Estimates
At a recent special planning session, The Woodlands Township Board accepted estimates of new costs and revenue that The Woodlands would take on if it were to incorporate into a city. In addition to a first-year one-time capital expense of $16,700,000, a City of The Woodlands would take on $6,376,000 in new annual expenses (not including the yet to be determined expense of potentially creating a Woodlands Police Department) and $966,000 in new annual revenue. The estimates were prepared by The Novak Consulting Group as part of an ongoing study of the costs and benefits of incorporation and will be used in calculating the maximum initial property tax rate The Woodlands would need to adopt if its voters one day choose to incorporate into a city.
New expense assumptions:
As a Township, The Woodlands roads are currently constructed and maintained at the expense of Montgomery County. A City of The Woodlands would be required to fund its own public works department to handle the construction and maintenance of The Woodlands roads.
· Public Works Department: First year capital expenditure of $16,700,000 and a $4,600,000 annual expense that will increase 2% per year
A City of The Woodlands would be required to pay for the repair of its roads, shoulders, and bridges, which are currently an expense for Montgomery County. This would require new expenses for a City of The Woodlands to fix roads within its boundaries that currently need repair and to save for future anticipated road repair costs.
· Fund concrete and asphalt maintenance backlog for five years from general fund, and after five years dedicate funding toward future pavement repairs; $1,125,000 annual expense
· Shoulder maintenance funding expense: $200,000 annual expense that will increase 2% each year
· Bridge maintenance funding expense: $50,000 annual expense that will increase 2% each year
A City of The Woodlands would also be required to hire additional government personnel.
· City Secretary Position: $192,000 in anticipated annual personnel expenses
· Risk Manager position: $118,000 in anticipated annual personnel expenses
· Legal Support/Paralegal position: $91,000 in anticipated annual personnel expenses
New revenue assumption:
A City of The Woodlands would receive mixed beverage taxes from the state.
· Mixed beverage tax: $966,000 revenue
Potential additional new expense:
One additional new expense for a City of The Woodlands still being evaluated by the Township’s incorporation study consultants is that of a potential Woodlands Police Department. Currently, The Woodlands’ police services are provided by the Montgomery County Sheriff’s office at the expense of Montgomery County and The Woodlands. (The county provides the services and pays for most of the expenses, but The Woodlands contracts to pay for extra police officers.)
The Township Board will hear from The Novak Consulting Group on policing in an October 17th special planning session and make decisions on which cost assumptions to accept for policing in an October 23rd special planning session.
The consultants will then utilize the approved cost and revenue assumptions to estimate the maximum initial property tax rate The Woodlands would be required to adopt following a potential incorporation, and finalize a tax rate calculator to show The Woodlands residents how much their individual property taxes will increase if The Woodlands incorporates into a city. These will be presented in a December 11th special planning session.