Wednesday, November 19, 2008

Woodlands Townhall Meeting - Nov 18, 2008

This quarterly meeting is well worth the time to attend. It is one component of the recent changes to provide more opportunities for the public to be informed and engaged in local government activities. Although there was the usual politicking and emotional comment, at the heart of the event was a true town hall meeting agenda. A presentation was made by the new president Don Norrell, formerly of the Woodlands Association, and a discussion by Joel Deretchin (The Woodlands Association President and Jeff Long (Woodlands Community Association President). Residents were given the opportunity to ask questions and there were many. The questions were fielded by the panel of Jeff Long, Joel Derechin, Don Norrell, Nelda Blair; legal issues were fielded by Mike Page. Residents are showing concerns for the future of the community and their pocket books. It was apparent that some folks share common ideals and others are waving political banners. More than anything, I believe residents just want to hear the story direct from those involved in the daily affairs and leadership of the community. All the newspapers in the world don't substitute for face-to-face communication.

Of the more interesting topics from my viewpoint were discussions on cash reserves, taxes, financial management and community services.

We can expect tax rates to be a little higher than we anticipated back in the elections. Instead of the $0.30-0.33 per $100 valuation, we can expect more like a $0.34-0.35 rate. With the rising assessments of homes in a tough economic era, this is of course a concern to the community. So a home with a valuation of $400,000 computes to as much as 400*$.05 = $200, or as little as $.01*400 = $40 more than anticipated. This is only a ballpark number right now since there has not been a thorough study of the issue yet. That won't come until next year.

Cash reserves sit at about $10 million. It is unclear how much is needed for capital and operating contingencies, so part of the tax rate will have this issue integrated until enough cash reserves are in the bank. The decision of WCA to give residents a tax break in 2008 and 2009 has affected this reserve. Combined with operating savings opportunities and with the economy and its associated risks to the community, we are making rough estimates now which cannot be very exact until the budget is put together for 2010 next year. That first year finalized budget by the way, must be sent to the county by September 1st next year so that Montgomery county can plan their 2010 tax collections and send out notices to property owners. Although the community leaders are optimistic about our economy in The Woodlands, should the economy turn sour, there is no contingency plan and if we need higher taxes to get the same services as now, "we have not considered cutting services!" (Nelda Blair).

The TWA (The Woodlands Association) debt has been decreased by $3mm through some book keeping methods. The $8mm debt will be amortized over 8-10 years to spread out the cost to residents. One cent ad valorem tax produces about $1mm annually. Bond financing to pay the 1/16th cent sales taxes to Conroe and Houston brought out some interesting discussion. Residents want to invest in their community but a privately held bond prevents that. This bond is short lived however and designed to provide the opportunity to obtain a better rate for a long term bond later, when the bond demand is lower. Right now, the rates are too high because of demand. In the Spring, we anticipate lower rates and then the conversion of the bonds should be more timely. Residents at that time should consider investing. Our bond rating is very high, A+.

The plan to proceed towards a future permanent governance model is stated to begin in 2012. That would give the community two years to study, propose, educate and vote when the earliest opportunity to vote for the future model comes on May 29, 2014. However, that tosses out a full year of opportunity to get it right. My take on this is to give this very important matter time to develop properly. Start in 2011 instead of 2012. The community wants to understand the issues to their fullest and make the right decision and not be pushed into it by the leaders her who may (in the residents' eyes) have other agendas. Of course at this time, who knows if we will want to change? Many are adamant on the outcome but cannot back their views with true substance, both financially and physically. Aligning community values to government alternatives must be the educated method to achieve what is right for the community. We have to take out the emotional factor.

In 2010, the community associations will be dissolved. The village associations will not. Interactions and representation with the Township are still ill defined. It is relatively certain that each village will continue to have a liaison representative with the service company to work on issues of the village. What is unclear is on how the village associations will formally operate relative to the Township. The presidents of the village associations have decided to have quarterly meetings but they do not want to be legally accountable for what transpires in those meetings. So the meetings are invitational and not open to the public, not subject to the Open Meeting law. If the presidents or president designates play a formal role in the government starting in 2010, they will likely be required to conform to the open meeting act. This communication/service model needs to be fully developed. Although the Town Center is not officially designated as a village, it will in the future also have a place in this process

Of additional interest to us all was a comment by the water authority on our future requirements for surface water. By 2016, we will begin a program to convert to surface water. This will cost residents of Montgomery County $500,000,000. The Woodlands will have to foot 1/3 of that cost. One way or another, that will have an impact on taxes, whether we are a special tax district or a municipality. We are depleting the underground water rapidly and are now under a mandate to reduce that depletion by 30%.

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