Wednesday, January 28, 2009

Legislation for The Woodlands Township

postscript at bottom added 01/30/09
I don't know about you, but I for one, have been concerned about the ability of the Woodlands Township to fully transition in 2009. There are a few basic legal hurdles that need to be leaped for us to pull through the transition by 2010. Our township board has most of them, if not all, outlined in a legislative wish list and prioritized. 1
  1. Tax Abatement - this is a very important item and is considered essential by the board to proceed as planned. There are about eight businesses with abatement contracts here. What is our contingency if we cannot honor these by law? I have not heard of any. The township must be able to continue to provide the abatement contracts by law. Otherwise, we would not be able to execute our taxation plan. We would be on hold until the next session of the Texas State Legislature. The urgency is quite apparent.
  2. Quorum of the board - in May, 2010, we will fill the last of the elected board members and go to a seven member board. It will be very difficult to have all board members there for every meeting. This is also considered an essential change to be able to operate.
  3. There is another essential item, but perhaps we can manage without it. We cannot directly employ fire fighters because of its union and the legal requirement for a vote among the citizens served prior to doing so. Right now we have a separate legal entity employing our fire fighters (our fire department). There may be federal legislation trumping the state law on this soon, so its importance could be reduced, yet we cannot depend on anything outside of our control. Waiting an additional two years for exception legislation would not be a great idea.
  4. Covenant Administration - The lack of legal definition on this matter will likely force the association to remain in place, yet it is considered to be a non-essential item in the draft documents provided to the board of directors from the Governance and Nomination Committee. The Township will need to take over this function if the association dues are to be levied by the township in the form of an ad valorem tax. It apparently does not have authority to perform this function yet. This could be a sticky issue.
  5. There are a few minor ratifications that would be helpful but not necessary. The one area I wonder about is the conditional exclusion of the Harris County parcel. It is in the non-essential section. I am unsure how this falls out but it certainly sounds urgent.
  6. Also, there are a few financial issues that should be clarified/included, but are probably of minor consequence.
  7. A very important issue is the dissolution of the Township and enabling a replacement government. We know that we should not depend on legislation in any given session. The legislature always has its hands full. One cannot predict where Texas politics will go on any issue. Any one session can be full of politics, and we may not have the leverage to get what we need out of it. We must have legislation to be able to prepare a municipal charter. Without it, we will have to wait until 2011 or 2013. Our political leverage may be over by 2011. This needs to be brought forward now in my opinion. We need to have the option to go forward with planning municipality in 2011 and know that we can do it, before we spend a large amount of time on a final form of government project and discover we cannot get the appropriate legislation passed. We should have learned enough lessons in the current government change, to ensure that we plan far ahead next time, leaving sufficient time to correct issues we find along the way. We also know that the strategy in leveraging our representation in the Senate and House should be to utilize our strength while we have it. The session is short and only comes every two years!
  8. Additional legislative issues include tax exemption authority. This is an important item for certain groups of residents. Shenandoah has asked to play a role also. Delinquent assessment authority by the county has not been settled either. Whether we can legally act on delinquency or not, needs to be settled to avoid the cost of lawsuits and to enforce our covenants.
From my seat, we need all of this taken care of in this session, but then again, I am not a lawyer nor pretend to be. I hope we get all township gears engaged in 2010. The legalities of all this is like spaghetti. It seems to get all tangled up in the pot.

Postscript: What is missing? We cannot levy ordinances nor have a court system. Therefore, we must use county ordinances. Since we have two counties, The Woodlands will live under two sets of legal rules until we become a municipality or we get legislation to be one. This limits what we can do to achieve the quality of life we all expect. For one, we need a noise ordinance for barking dogs, loud cars and trucks. I am sure we can come up with other issues needing an ordinance. Adjoining cities have such ordinances and here we are allowing about anything, as if we were out in the country, and of course we are not. Yes, we can have rules, but that does nothing for the more needful situations.
1Draft 2009 Legislation Agenda for The Woodlands Township

Saturday, January 24, 2009

Vision of The Woodlands Future depends on scope

Just like any government, the township is now embarking on establishing a new vision, to drive future policy and strategy. We as residents or as proprietors of businesses in the township should pay close attention to this activity. This past week, the executive committee voted to recommend consultants be hired to facilitate the development of such a future vision.

This vision must be all inclusive. It cannot be short-sighted; I do not personally believe our township leaders would allow it to be such. The vision must include certain priorities of the residents. I will list a few possible priorities that readily come to mind.

  • Township must have a vision that includes an option for being a municipality.
  • Ordinance capability must be a part of its vision.
  • Court capability must be part of its vision.
  • Role of the village associations and resident representation.
  • Policing the community.
  • Fire protection.
  • Traffic expectations within the boundaries of the community.
  • Tax regimes - retirement and elderly tax breaks plus controls on spending.
  • Property value and assessments - relates to resident's worries about being able to live here or not in the future.
  • Development and zoning.
  • Assumed roles of county vs roles of the interim and long term government.
This is a start to consider the definition of the scope of this project as I see it. Of course I have not addressed the business issue list in this. I know some shop owners; they have issues that need to be addressed as well.

So perhaps you have something to add to this or to contest with this list? I can safely say that I am not interested in doing away with Walmart, as the recent study suggested that is high on the resident's list. That is not on my list. I am still reeling with total dismay over that conclusion!

Woodlands Government Bonds for Refinancing Payment to Houston

Well, as the board promised, we have now refinanced the payment to Houston by way of government bonds. This was an extensive effort that was initiated months ago. The bond issue report is very large and has a great deal of data supporting the strength of the community and the rationale for the timing of the bonds. Right on its heels is a bond decision by the Conroe ISD to issue new bonds and refinance existing ones to save some money. Now was the time to act and the township was ready.

As it turned out, over the week before the sale, things changed fairly significantly, showing the need to act quickly in the market. For one thing, some of the wholesale brokers decided not to buy the bonds. Citibank and Merrill Lynch both dropped out. However, Edward Jones came to the plate swinging and bought in to the full near-$18-mil value. As it is, the retail structure that Edward Jones offered saved 0.2 points over their competitors, but fees more than make up the difference according to our consultant

The community fared well in the outcome by using the consultant Drew Masterson of First Southwest. He has been working with us for months on this; we have been poised with great detail, to act on his queue to do so. Although we did not get the bonds sold at the lowest market price of the week, we did manage to get a 4.96+% All-in-True rate, just 0.3 points off of the low. Reviewing the trends of the bond market, revealed a downward trend until this past week when it turned around indicating a probable bottoming of the rate. Using what I believe to be an institutional means, a local MUD did better this past week at 0.5 points below us. The yield map of our bonds ranges from 1.25% at one year to 4.5% over 11-12 years. The bonds mature in 2022(50%)and 2023(50%). For a 10 year bond commitment, a yield of 4% is achieved.

I tried to sort out the rationale of the ratings. This is what I heard and I believe to be near correct. Although we are rated at A+ by S&P, the bonds are priced with the Moody index of A3, because of a technical issue with an assessment technique.

To fully execute, the loan to Woodforest bank will be paid next week on receipt of the payment by Edward Jones. There will be no overlap of interest. This waiting period for lower bond rates and financing the payment to Houston by a temporary loan from Woodforest Bank has proven to be a good strategy by the township board. Had we issued bonds in the fall, the bond rate would have been about 6.5%. That is a $1.0+ million dollar saving over the maturity period. I would like to congratulate the board for their prudent management of our money.

I called Edward Jones on Friday to purchase some bonds, while they were still available. One-half of these tax exempt 10-year bonds were already sold by the time I called. I have now invested in our community. Why would I do this at this low rate of return? Because I believe in the economy of this area, that it will be a stable and secure investment during the current economic crisis. I can put money out there for ten years and so I did. Tax free income will be generated, making this an equivalent to a 6.0+% taxable bond yield. Short term bonds likely have cash flow advantages also, depending on your own personal situation.

The contract is found at the township website : Edward Jones 2009 issue. You will find a table on the rate of return for each year at the end of the document.