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THE WOODLANDS TOWNSHIP

Board of Directors Meeting

PUBLIC HEARING ON PROPOSED TAX RATE

August 25, 2021

MINUTES

THE STATE OF TEXAS   §

COUNTIES OF HARRIS & MONTGOMERY   §

             The Board of Directors of The Woodlands Township met in regular session, open to the public, on August 25, 2021, posted to begin at 5:00 p.m. The meeting was held in the Board Chambers at the office of The Woodlands Township, 2801 Technology Forest Boulevard, The Woodlands, Texas, within the boundaries of The Woodlands Township.

             
STANDARD ITEMS
             
   1. Invocation / Pledge of Allegiance;

No invocation was provided. Chairman Gordy Bunch led the Pledge of Allegiance to the United States flag and the Texas State flag.
             
   2. Call meeting to order;

Chairman Gordy Bunch called the meeting to order at 5:05 p.m. and declared that notice of this meeting was posted 72 hours in advance inside the boundaries of The Woodlands Township at the office building located at 2801 Technology Forest Boulevard, The Woodlands, Texas, and posted online at www.thewoodlandstownship-tx.gov. The roll was then called of the duly elected members with three members being absent at the time the roll was called.
Present: Chairman Gordy Bunch; Vice Chairman Bruce Rieser; Secretary Shelley Sekula-Gibbs; Director Bob Milner; Director Ann Snyder
Absent: Treasurer John Anthony Brown; Director Jason J. Nelson
Staff Present: Jeff Jones, Monique Sharp, John Powers, Karen Dempsey, Robin Cross, Todd Stephens, Nick Wolda, Palmer Buck
             
   3. Receive, consider and act upon adoption of the meeting agenda;
             
  Motion by: Vice Chairman Bruce Rieser moved to adopt the agenda.
  Second by: Director Ann Snyder 



Passed: Chairman Gordy Bunch YES
Vice Chairman Bruce Rieser YES
Secretary Shelley Sekula-Gibbs YES
Treasurer John Anthony Brown ABSENT
Director Bob Milner ABSENT
Director Jason J. Nelson ABSENT
Director Ann Snyder YES
 
             
   4. Recognize public officials;

There were no public officials in attendance.
             
   5. Public comment;

There were no individuals who provided public comment.
             
REGULAR AGENDA
             
   6. Receive a presentation on the Proposed 2021 Property Tax Rate;

Note:
Director Bob Milner arrived at 5:08 p.m., as this presentation was beginning.

Monique Sharp, Assistant General Manager of Finance and Administration, reported that the current tax rate is $0.2231, the certified no-new-revenue rate is $0.2169, and the voter-approval Rate is $0.2314. She reported that the proposed tax rate approved by the Board of Directors was $0.2231, which includes a maintenance and operations rate of $0.2085 and a debt service rate of $0.0146. She presented a chart showing a difference of $0.0062 between the current tax rate of $0.2231 and the no-new-revenue rate of $0.2169. She reported that for an average value home of $459,000, the tax difference between the proposed tax rate and the no-new-revenue rate is $28.46, or $2.37 monthly. This rate reduction would equate to a $1.3 million reduction in Township revenue.

Ms. Sharp provided information regarding the property tax rate from the Township's inception through 2022, which reflects a 47% decrease, from 42 cents to the currently proposed tax rate of 22.31 cents.

Ms. Sharp related that the taxable property values for 2022 are $21.7 billion, an increase from 2021 values of $21.1 billion, for a total increase of  3.4%, of which 2.3% is contributed to revaluation and 1.1% is contributed to new properties. These values translate to 2022 property tax revenues of  $48.6 million.

Ms. Sharp then shared information regarding the consolidated budget, which includes the combined operating revenues and expenditures of the general fund, capital projects fund, debt service fund, special revenue fund (Economic Development Zone), Visit The Woodlands, and the transportation fund. The projected 2022 consolidated budget includes $132.8 million in revenues, which is a $5.4 million, or 4.3% increase, from 2021.  She also shared the breakdown of 2022 expenditures, which include $113.9 million in operating expenditures, $9.9 million in reserves, $6 million in debt service, $1.9 million in capital expenditures and $884,290 in undesignated funds. She shared charts showing revenue sources by type, with sales tax and hotel tax making up about 50% of the budget.

Ms. Sharp reported projected sales and use tax revenues of $57.9 million for 2022 based on a 3% growth factor. She also pointed out the Township experienced lower revenues in 2020 due to the COVID-19 pandemic, and the strong recovery in 2021, exceeding the amount budgeted for 2021.

Ms. Sharp reported a budget of $7.3 million for 2022 hotel tax revenues, which is an increase over the 2021 forecast of $5.8 million. She advised that, on a nationwide level, hotel taxes are rebounding at a slower pace than sales tax revenues. She stated that the Township's hotel tax revenues are sufficient to fund all debt service on revenue bonds and Visit The Woodlands operating expenses and that any excess funds are allocated to the hotel tax reserve and do not affect operations or cash flow.

Ms. Sharp then reported that the consolidated expenditures for 2022 are $132.3 million, which is a $1.6 million, or 1.2%, decrease from the previous year. She advised that the $1.6 million decrease is made up of several different components, including a $2.7 million decrease in capital expenditures, which was partially offset by a $1.1 million increase in operating expenses, which only increased by a total of 0.8%. Ms. Sharp shared a chart of consolidated expenditures by department, which depicted that the Fire Department, Parks & Recreation, Community Services and Law Enforcement are the largest components, making up about 75% of the budget. She then shared a chart showing the components of the $1.6 million decrease in expenditures by various departments.

Ms. Sharp advised that the Township's capital projects fund totals $12.2 million. She shared the various components of the fund by department and reported that, because of the reserves established by the Board and the policy of funding a capital replacement reserve on an annual basis, almost all capital purchases are funded from the reserve as opposed to current year tax dollars.  She shared that this Board policy ensures that there is always a funding source available to fund capital replacements and repairs on a timely basis and is significant in terms of the Township's credit rating. 

Ms. Sharp provided information regarding the Township's credit rating, which was recently upgraded by Standard & Poors to AA+, the highest rating of any special purpose district in the State of Texas. She reported that the Township maintains an AA bond rating from Moody's. She then shared highlights of the Township's recent credit agency comments.

Ms. Sharp shared that the Township's total outstanding debt is $39.8 million, which is made up of bond issuances for the convention center and for parks and recreation and fire department assets. Both bonds have been refinanced over the past four to five years, achieving a reduction in annual debt service payments of about $1.5 million. She shared a chart of the outstanding debt from 2013 to present, showing a $72.7 million, or 65%, reduction in debt.

Ms. Sharp provided a chart showing the Township's reserve/fund balances at year-end 2022 totaling $89.9 million. She reported that annual allocations are made to the capital replacement reserve and the operating reserve, which are looked at and carefully monitored by the credit rating agencies. The capital replacement reserve is maintained at a balance at or above the amount recommended by the reserve study conducted by a third party.  The operating reserve is maintained at a balance equal to 20% to 25% of the general fund operating expenditures.  She reported that the incorporation reserve has a balance of $20 million, which was funded by favorable variances in the budget and not by annual tax allocations.

Ms. Sharp shared a chart showing the Township's "Other Reserves", some of which are legally required, totaling $10.6 million for year-end 2021. She reported that at the Board's direction during the recent budget workshops, the capital contingency reserve for year-end 2021 of $2.2 million was allocated to the transportation fund in 2022, in order to have funding available for the Township's cost share of the Spring Creek Greenway trails. Ms. Sharp then shared a chart showing a 2022 beginning balance in the transportation initiatives fund of $2.3 million and a year-end 2022 balance of $5.1 million.

Board discussion followed.
             
  Motion by: Director Ann Snyder moved to accept the presentation.  
  Second by: Secretary Shelley Sekula-Gibbs 


Passed: Chairman Gordy Bunch YES
Vice Chairman Bruce Rieser YES
Secretary Shelley Sekula-Gibbs YES
Treasurer John Anthony Brown ABSENT
Director Bob Milner YES
Director Jason J. Nelson ABSENT
Director Ann Snyder YES
 
             
   7. PUBLIC HEARING on the Proposed 2021 Property Tax Rate;

Note:
The Board recessed to a Public Hearing at 5:26 p.m.

The following individuals provided comments on this item:
  • Claude Hunter - Expressed his concerns regarding public safety, pathway safety and the proposed tax rate should the Township become an incorporated city.
  • Kent Maggert - Expressed his concerns regarding the proposed tax rate should the Township become an incorporated city.
Note: The Board reconvened the regular meeting of the Board of Directors at 5:33 p.m.
             
CLOSED MEETING (if applicable)
             
   8. Recessed to Executive Session at 5:33 p.m. to discuss matters relating to real property pursuant to §551.072, Texas Government Code; deliberation of economic development negotiations pursuant to §551.087, Texas Government Code; discuss personnel matters pursuant to §551.074, Texas Government Code; discuss IT network or critical infrastructure security pursuant to §551.089, Texas Government Code; and to consult with The Woodlands Township’s attorney pursuant to §551.071, Texas Government Code;

Chairman Gordy Bunch informed the Board that it would be necessary to recess to executive session.
             
   9. Reconvened in public session at 6:07 p.m.;

Chairman Gordy Bunch shared that it would not be necessary to take action on matters discussed in executive session.

Note: Prior to adjourning the meeting, Director Ann Snyder recognized Claude Hunter for his commitment to The Woodlands Township and the Alden Bridge Residential Design Review Committee.
             
   10. Adjournment.
             
  Motion by: Director Bob Milner moved to adjourn the meeting at 6:08 p.m.
  Second by: Director Ann Snyder 

Passed: Chairman Gordy Bunch YES
Vice Chairman Bruce Rieser YES
Secretary Shelley Sekula-Gibbs YES
Treasurer John Anthony Brown ABSENT
Director Bob Milner YES
Director Jason J. Nelson ABSENT
Director Ann Snyder YES
 
_____________________________________
Shelley Sekula-Gibbs
Secretary, Board of Directors

    

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