Attending a MUD Meeting in The Woodlands

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As clear as Woodlands Texas MUD?  Attending a MUD (Municipal Utility District) meeting isn’t that bad! Yes, there are some technical parts of the discussions and yes, there are financial parts of the discussions, and yes, it is not the most exciting thing a person could do.  I can say there were very few things I did not understand, but then again I have a background in drilling wells and finance.

Anyone can attend a MUD meeting. It is healthy to experience one, for both the board of directors and you.  Showing interest connects the board to its customers and its customers to the district. I sure don’t advocate going to every meeting, but I do recommend that every resident attends at least one, preferably for the district providing water service to their home.

The MUD #60 meeting I attended this month addressed a resident’s issue with soil erosion and received reports from the various agencies affecting MUD business. Of high interest to us, is the implementation of the San Jacinto River Authority Groundwater Reduction Fee. This will be fully communicated to all Woodlands residents by Jim Stinson and staff in the JPA. Residents will likely incur an additional fee of $0.50/1000 gallons of water used, starting with their October bill. Concurrently, all the MUDs need to develop a higher well contingency fund for replacing a well, should that be needed. The cost of a well has increased substantially since the last raise of contingency fund collections.

An hour spent at a meeting can be an eye opener. Minutes for a Woodlands MUD are not as accessible as those for the county or the township. They are available per the Texas Open Records Act. A copy can be acquired at a meeting or from the district’s secretary. Current agenda is posted at the utility district office near Grogan’s Mill and Lake Robins.

Operations of a MUD

Each MUD has its own budget to manage.  Each has its own assets to manage. Each district has authority over a defined geographic area. Here in The Woodlands, for efficiency purposes, maintenance and financial services are aggregated and shared among the districts. This practice helps them to keep operating costs down. Each MUD is responsible for its entire service process. All MUDs here have an interlocal contract for those shared services to the Joint Powers Agency (JPA), a nonprofit created for this purpose. The district scope of authority is limited to the reclamation, drainage, acquisition, and distribution of water.  It includes the streams and ditches associated with water runoff, as well as the infrastructure required to provide those services.  A MUD has no limit on capital investment. The Board of Directors consist of five elected residents of the district. Every even year (e.g., 2000, 2002, … 2010), there can be an election on the first Saturday of May. If there are no challenging candidates, incumbents are automatically elected and there is no election. Each board elects representatives to serve on the Joint Powers board. Taxation is by the MUD. Those elected represent the tax dollars paid by residents in the MUD district. Taxation is driven by capital expenses, i.e., sewage facilities and wells. Bi-monthly water bills are for sewage, water and cost of operation. Now we head into a new era, where surface water will begin to play an increasing role in our potable water supplies, raising the cost of water to the district. For many people, watering lawns likely will eventually be cost prohibitive.     

Some but not all resident issues with drainage or water supply can be addressed by the board. Sometimes, residents work directly with the JPA to resolve problems. For example, I recently assisted a resident, to resolve a long standing serious problem with sewage flooding in her home. The JPA came up with a solution that should fix that problem.

In 2010, there were no challengers to the board in this district. To challenge an incumbent, one must follow a procedure outlined in the charter. Contact your local MUD representative for timing detail and procedure.

References  

1.    The Woodlands Joint Powers Agency

2.    San Jacinto River Authority

Budget Police Proposal 2010

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The new policing plan proposal of the Township will provide consolidated service for the entire community. It appears to be a cost effective program and accomplishes the goal to merge all resources into one package. Let me start by saying I endorse the proposal, because while reading this article, one might think otherwise. I do question if the proposed operating unit is sized properly. My focus is on the metrics and doing the right thing for the right goal. This proposal adds 0.9 cents to the budget. What is a $200,000 homeowner asked to pay for this service? I choose to use a $200,000 assessment because it is easily scalable - only $18 per year or $1.50 per month. I can see some political or psychological value of the proposal and logical value to the community, but am not convinced that we actually need the number of deputies in the proposal. People respond, “Can’t you see all the crime here?” I do not take a position because of the media, nor out of reaction to a short-term problem. Managing a business has been a long-term task for me. I’ve been here many years and talked to many people about the police manpower in this community. Personally, I do not like to invest in intangibles unless there is measurable value to them. Why would anyone do so when they can invest in tangibles, which have cumulative and long lasting value? So I will outline the plan, as I understand it, and outline what little portion of it that bothers me. Basically, I am concerned about the derivation of the proposal.

The proposed plan is to reorganize the Montgomery County law enforcement districts such that The Woodlands becomes its own district. Currently it is part of the large district 2. Having our own district, limits the trips outside of our area, except in dire situations. It makes the reporting easier and customization of services easier. What is more important is that it provides a captain over the Township, commanding the force – a single point contact accountable for costs, services and processes used for enforcement, directly reporting to the Sheriff and the Township, managing the personnel issues, and performing the reporting and administrative functions. District 2 is funded by the county and provides proportional police service to us because of our percentage of population in the county. In this plan, the workforce assigned to us from District 2 would be merged into the current Woodlands deputy force funded by the Township, forming one operational entity. We have known for some time that the merger has an opportunity to consolidate the resident patrols with the Town Center patrols. So we put all of this into one pot and call it The Woodlands District. This will enable an organization that essentially performs like a police force for a municipality. It conforms to the processes of the county, but it is flexible enough to tend to the needs of the community. Additionally, we pay for the cooperative policing in the I45 corridor with Shenandoah and Oak Ridge. That is an additional and debatable cost being phased out in the plan over the next two years. In the new plan, we would grow our contracted deputy staff by 27%. I have not yet seen all the details of the proposed Woodlands District plan, but the million-dollar price tag is staggering, and therefore my concern for metrics behind the proposal. I am certainly not alone in this, as I have had a few people express their similar concerns. It is still early in the budget process. I hope to hear from more of you on this and other issues.

Since we cannot execute the full plan in 2010 due to the county being under economic constraints, funds to hire the additional deputies to execute this plan are not available. In the first part of the two-year plan, 2010 would be a transition year, adding a patrol for the village centers. So you see, this will be part of the long term solution as well. Part of our taxes will go to commercial use, guarding businesses (and shoppers) in the village centers and their immediate surrounding area, perhaps snagging a bank robber or two near or in the centers. I see recent robberies playing a role here, even though the banks have elected to have insurance policies instead of guards. Currently, normal resident deputies serve the centers. So theoretically they would be more available to respond to resident calls or traffic issues, and the new deputies would provide a specialized service to all the commercial centers outside of Town Center. The cost for this part of the plan is $360,000, or 1/3 of the total. Commercial patrols would be divided into two zones. The north would serve Alden Bridge, Cochran's Crossing, Windvale and College Park. The south zone would serve Grogan's Mill, Panther Creek, Indian Springs, Walmart/2978, and Sterling Ridge. Coverage would be 80 hours per week by one officer in each zone.¹

Emotions are running high with some people in The Woodlands as a result of the number of bank robberies and other crimes, but we need just plain common sense to prevail. What alternatives were rejected in this proposal? It seems no one yet is presenting how we got here. This budget project proposal sounds good on the surface, but the details and history will tell the full story. I have not seen any metrics yet that drive the proposal nor have I seen metrics that tell us how many deputies we should have for the size of community we have and based on the workload of this force. For example, we need quick response when we call 911 and fairly quick response sometimes even when we call the non-emergency number. One stated goal of the project is to improve response. What is the current response? What do we need it to be? What can we expect different with the service level in the new plan? Those numbers are not (yet) published. What is the number of officers we have out on the streets on an average? I would think we should know the equivalent people on the streets for each given hour. (FTE patrolling). Accountability to operational metrics might also include a diversity of street presence. Instead, I see the metrics of the criminals. How many robberies, how many thefts, etc etc. Maybe one can staff based on the number of reported crimes, but that is not really a good way to staff, is it? The criminals, not the police force, determine that metric. That makes the criminals the drivers of our taxes. One can argue that the number of cars present will deter crime. I am betting that it would make little difference. One can call the number of crime incidents “the workload”, and it is just that to some extent, but it is certainly not clear that we have a handle on the number of officers needed for our community. Maybe the plan has too few, maybe too many. Metrics should be able to guide us through decisions that can be measured for effectiveness.

I know this could be considered a controversial article. It is intended to bring some resident issues to the table to stimulate thought. I know there are other residents here who have the same value system as I do, although they may have bigger pocket books than I. All good big capital project managers have value-driven metrics. Operational managers too will tell you they need meaningful metrics to make meaningful decisions. So when someone wants to spend our money on additional police, I have to ask, what will that money do for us and how was that number derived? Someone might say it buys you protection. I don’t think so. Read everything you can about policing and find out where the police have actually protected someone in neighborhoods. They are not guards, as we employ them. They are responders to help people when called. Then and only then do they normally provide something of measurable value.

We asked for additional law enforcement a few years back because we had serious issues on our streets. Several residents were killed in car accidents. Who is responsible for improving accidental death statistics on the roads? Injuries still occur. Maybe the additional staffing has had no effect, and we have just been lucky. We remain with many drivers doing crazy things on our roads. If we are going to throw dollars at the problem, let's do it cautiously with measurable results. Perhaps the biggest impact is to go door to door and get people to seek change in the community - to lock their doors. The Sheriff's office has told us over and again the same story - residents are contributing heavily to the crime problem.

We don’t have local ordinances to enforce. Local ordinances generate additional work. Our police work is standard for the laws of the county and state. Having higher police visibility is also a goal of this project program. I am not sure how to measure that and am wondering if it should even be a goal. Police presence in a neighborhood is negative to some people. In my opinion, the best deterrent in not presence but reputation. If our police force has a reputation of being johnny-on-the-spot and likely to apprehend anyone committing a crime here, that will deter criminals. If residents have a front line of defense and are known to not be easy picking, then that will deter criminals as well. I see those as two focus points for effectiveness. Newspapers advertise our crime. Maybe we should counter advertise with our successes.

I am sort of questioning the necessity of this project based on what not has been presented. The goals and metrics are not well defined publicly. I have been questioning it for the past year. It seems to me that we need to look at efficiency. This may only be a communication issue, but no metrics have been presented. How many deputies are in the office vs. on the street? How spread out are the deputies in the community? Do they have sufficient backup? What is their response time to emergency calls or those that that need immediate attention? How many false alarms are they servicing or missing? How long are they at a crime site? Metrics have not been used to present the case for the project. How many deputies are enough? What can we do to free the deputies up? Doing an efficiency and work process study could save us millions over the next five years. I don't think we have done that over the past 3 years, since we switched to the Sheriff's services. We continue to use the original study. Since then, our experience with policing this community has grown in size and complexity. If we take my neighborhood as an example, my neighbors can testify to their current level of service. But how about system-wide? My neighborhood has generally received acceptable police response to emergencies and non-emergencies. In contrast, our fire response has not been acceptable, yet our service level will probably remain the same until 2012 in this budget plan. That is measured and published. True, we are not having major fires here (yet) to raise our level of concern like the crime incidents that we read about in the newspaper.

What can we do to help reduce the number of police required and make our force more cost effective? There are several views to this. The statistics that people use now to show the crime rate has a mixture of what I call “forced crime” where the criminal breaks the law no matter the obstructions or difficulties and “accommodated crime” where the criminal breaks the law with no obstructions, or basically where the community or homeowner allows the crime to easily occur. We are told that the bulk of our crime is the latter case, committed by young people, who live here or in nearby communities, seeking easy fast targets so they are not detected. Their goal is to move quickly and get what they can as fast as they can and perhaps even use a stolen car (probably not locked) so that their identity is unknown. So the way I see it, if we are indeed driven by the number of incidents for staffing our police force, we who take precautions are paying for someone else’s negligence. Residents and businesses and the community have an obligation to protect their assets with alarms and locks. I do. Why can’t others? Some people say we need more presence on the streets. I say that would help just a little. Apprehension is the key to success, but if you look at when residents typically report an incident, it is too late to apprehend the criminal. A swarm of police at the time of the incident helps the apprehension process significantly. Otherwise, the incident becomes a report, not an engagement and an unlikely apprehension. The first line of defense is not the police but the resident, the storekeeper and store owner, and the community. They are the first responders; they are the eyes of the community. That will be the case no matter how many officers we have on contract (or employed for that matter, if that was an option). If they are not reporting the incident while it is happening, it is often too late to do much about it.

Why don’t we advocate conservative approaches in our governing body as it transitions to a consolidated entity? Maybe the first year we could have another look at the concepts behind our policing strategies. We need to lower our taxes if we can, but more importantly, we need to be right sized in police force and we need service levels based on the right measurements. If we have to, and it can be rightly justified, then we have to reorganize and deploy more officers on the streets. I just do not see yet that we have to fund this size of a police force. Is it too large or too small or just right? If we don't know that, we don't know the budget. Given the appropriate numbers to drive staffing levels, we could be convinced we need this exact number of deputies and administrative staff, but establishing a tax levy for this is simply does not seem right, given the current information available and economic climate. Maybe all of this has already been considered. I asked if efficiencies were considered and board member took notes, but maybe a better question would have been “what were the rejected alternatives to this proposal?”

Asking a few residents in our neighborhood how they feel about this, the response has been positive but conditional. One person responded: "There has been a lot of money wasted in the associations and it just continues. This would be more important than some of those expenses." Another said, "I would not mind paying the additional cost as long as it produces notable results." Asked if police response to recent calls has been satisfactory, the reply has been overwhelmingly "yes" from those who have needed and used the service with one exception. A resident noted that the response was good, the apprehension occurred, but the law breaker was released. "If the law is not enforced, why should I pay for law enforcement?"

In general, I am for right-sizing tax assessments to fit the needs of the community. Expectations are different among residents. Some have a 30-cent mentality, others a 32-cent expectation and still others a 34-cent expectation. Many people would like to drive down the cost of living here. Almost everyone I talk to wants to be taxed on need, not want or false perception. The desire for responsible and transparent spending is the trend of thought from about everyone I speak to. Personally, I want to see excellence here and live in a safe place. I do not believe it is possible to keep crooks out. It is possible to protect ourselves and get excellent response from law enforcement officials when we need it. Maybe we already have sufficient response. Perhaps an education program and resident participation program should be part of the budget. Yes, we have the awareness program, but it needs a tune-up. I believe it is a weak program needing a complete overhaul.

As you are probably aware, this program is one of four that raises the tax rate from an operational base of 25.3 to 32.8 cents per $100. The policing project costs $2mm over two years or 0.9 cents per $100. The table below from the presentation in the town hall meeting demonstrates the major add-on costs in the budget best. I have added tax payer dollars to it.

Program	Tax  in cents/$100 assessment	Tax for $200,000 home
Base Operations and debt - current service level	23.5	$470
New Police program	0.9	$18
Existing major capital projects on books (ISV fire station , Creekside station) plus replace Central Station	3.1	$62
Other capital projects - New parks and pathways - Village of Creekside Park and new developments	3.5	$70
Total	32.8	$756

Resources
¹ Public Security Plan by Vice President of Operations & Public Safety - Steve Sumner
²Township Budget Initiatives, page 2

Woodlands town hall meeting August 2009

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The second town hall meeting, since the Township was formed, was directed at the 2010 budget. Residents did participate in comments after the budget proposal prepared by the township and association staff was presented. Like usual, some were ultra critical and others who had special concerns. The Township continues to have a few people totally submerged in their quest for a city government. Most residents don't really care, so long as their quality of life is maintained or improved and they don't have to spend their hard earned money for something they can get otherwise. There remain issues in the community as we regularly discuss here on this website, but where is there any place without issues? So what said the people in this meeting? The responses are cataloged, but I can't say that I captured all of the concerns expressed.

1. Swimming pools are not open at convenient times for working residents who want to enjoy the amenity with their families. Suggestion - open later, close later (8pm). I suspect Parks and Recreation will be looking into this suggestion. People do use the pools early in the summer, but the need to be open later is probably a valid point for some pools, maybe not all.
2. Seniors need help with the rising cost of living here. We need a senior tax exemption. The Township has been working on this issue. Tom Campbell has been a very big proponent. I too hope for relief!
3. We have a problem with crime here. Let's have a surge in law enforcement, similar to the Iraqi surge. Get it fixed now! This was in response to the two year plan in the budget. I will write an article specifically on this subject soon. It is much more complicated than this, and we need to have a detailed plan to deal with the recent and future issues.
4. Stolen car in driveway. "I moved away from a place that had crime and came here to get away from it. I bought a new car, and it was stolen out of my driveway here. I thought this was a safe place." This is of course a valid concern, and we all are on board in concert with this gentleman; however again, the issue is complicated and needs discussion and planning. Residents have a role in this too. It is not just a problem for policing or for the Township.
5. Another concern about policing budget. We don't want to overspend on the issue. Shouldn't we be looking at efficiencies of our current deputies first? There may be improvements that would not require so many deputies. For example, reporting using our park WIFI installation, or working to reduce false home alarm calls, or working to have our citizens take on some responsibility themselves for the rash of crimes such as locking their home and cars. I will address policing issues in a coming article.
6. Unnecessary Spending - playground equipment was recently changed in Capstone Park. New equipment is not as durable as the old equipment, and the old equipment did not need replacement. This appears to be a waste of money. We don't need to replace equipment just to replace it. Make it last for its lifetime.... I have been a bit concerned about this also. However, as Claude Hunter responded, equipment is often changed out for safety or regulatory reasons. The reason for this particular instance was unknown.
7. Another concern stated for lack of tax exemptions for the elderly. We have lived here a long time and want to stay but there is no tax exemption for those of us over 65 (over 70).
8. Museum and cultural amenities. the Township is lacking in its effort to bring a museum here. Can't we have funds allocated to that effort? A teacher and long time resident brought this issue to the table. There were several women who seemed to come together to express their concern at this meeting. Nelda Blair asked them to return to the podium to discuss it further; another lady did that later. A clothing store is going to occupy the place in the mall where the museum is currently located. The Houston Museum of Fine Arts will cease operation at that location in September. The Woodlands will no longer have a museum. There is no plan to find a place for it. Nelda responded that the mall operates separately and the Township has no influence on its business. "We cannot get to Houston to visit the museum there. We need a museum here." For sure, in my opinion, there is a need to have a satellite museum north of Houston, more accessible to residents here. Something more may come of this during the budget process.
9. Understanding of bonds. You are proposing a 32 cent tax and a bond of $45mm. That is a huge tax! This was just a misunderstanding of the purpose of a bond election proposal. The statement may help the Township to sell the bonds to the public. Bonds are used to finance the investment over a long period of time, keeping taxes low. The items in the bond are mostly what would have happened if we had remained as associations instead of a taxing government. The difference is that these projects would have been financed through loans, or taken out of accumulated treasuries. The Township has to follow government regulations and must seek the least cost solutions for capital projects so that taxes can be kept flat. The bonds will allow us to pay the debt over about 20 years instead of 4 or 5. An assumption that the bonds will pass is included in the 32 cent tax rate. There will be no added tax for the bonds.
10. Not a municipality. If we were a municipality, we probably would not be having these problems. Why are we reinventing the wheel? Let's be a city!!! Renegotiate the agreement with Houston! Well, there is a plan to study and formulate a proposal for a long term governing body. What will be done will be for the benefit of the community, not blindly do something because everyone else does it. We have a schedule and have appropriated funds in the budget for the study. 2014 is the earliest in the agreement when we can be incorporated. Personally, I do not see this gentleman's point. let's go forward and not backward. Everyone is on-board to look at this issue, and everyone knows there are pros and cons. Are we not a community of intelligent people? Let's move forward with our plan. Everyone understands the issues with policing. We will probably not have lower taxes when we become a city, more likely higher taxes. The Township has made great progress and now we have a proposal to reduce taxes with more policing. I don't know what more to ask for that being a city would solve.
11. Not sufficient financial reserves. We need to raise the tax one cent to obtain sufficient financial reserves. I have been in city governments and seen much better reserve plans. We have significant assets here and must be able to protect and replace them. Personally, I hope the plan is sufficient. I do not want higher taxes. This will no doubt be discussed in future budget meetings.
12. Ice Rink. We had two views. (1) Lessen the priority. It is not required. Let's instead promote private enterprise to take on the challenge. It has not been a profitable venture in the past. (2) Keep the priority. We could do a great deal to promote the sport of ice hockey in the area. Make the rink full size capable for sports competition. Rinks are a premium in the Houston area. We have to travel across the city for one. Area sports clubs will want to use it. It can be profitable. Personally, I can see both views. Before the township sets out on this, the project has to be properly sized and framed so that we don't end up with a problem. We should stay out of business ventures ourselves and find private money for them. It could be considered just another park amenity. We do need such facilities for our children. We don't need to be the recreational facility for North Houston. Why can't there be other places in North Houston with a rink? Is this really something the Township should invest in? It would be a draw for business in Town Center and would produce sales tax money though. Should residents be footing the bill? This is controversial, so make an excellent business plan for a well thought-out project, and I would support it.
13. Law enforcement - We have a serious crime problem here. Consider immediate measures to fix the problem. No additional comment from me. I will address seperately.
14. Veterans Park - we have taken this issue to the associations several times before. This is an opportunity for the Township. We do not have a place to go here to honor our veterans. Please plan a park in the budget for us to have a veterans park! Don't you think this is a reasonable request? I do.
15. Can't we finance the assets longer than 20 years, more along the line of the life of the asset, say 30 years? Don Norrell responded, "yes but investors need more security at the General bond rates. We would have to pay more interest for a higher risk bond."

The comments above came from residents in almost every village. I was happy to see so many people participate. It sounded like the voice of the community, and as one resident put it afterward, "we speak out and all ideas are respected and considered even though some of us disagree on some issues." This is the way it should be. Where there is one nugget, there is likely others. A I stated in a prior article, this presentation revealed a great deal of work and thought. Everything I see is logical. There is tweaking to do, and I for one, hope to see a few things changed but nothing dramatic.

Resources
¹Proposed Annual Budget Fiscal Year 2010 presented by Norrell
²2010 Budget proposal from Commentary viewpoint

2010 proposed budget

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The Woodlands Texas residents have passed yet another milestone. At the town hall meeting last night, the first budget proposal of the complete township was presented by Don Norrell. I will give you my take on it.

First and foremost, the staff of the Township and the Woodlands Service Company has put together an excellent summary! The five-year plan is as Don Norrell stated, “never totally accurate but has the known requirements in it at the time of publication. Things always change over the course of even one year.” Timing of projects is partially driven by the need to keep the tax rate consistent and predictable. When a financial plan is developed, one must predict the income and the cost of providing services.

Bottom line is that the proposed tax rate is 32.8 cents per $100 county property assessment. There will be no exemption for disabled veterans, or over-65 residents, or for homesteads. In perspective and comparison, the county is proposing a tax rate on the identical property assessments of 48.38 cents. For a $200,000 home the township tax would be $656 and the county $967 for a total of $1,623. This would be the bulk of your tax bill for 2010. For a complete picture, you will have to also add the school tax and the community college tax to it. Put the township tax in a historical context: in 2007, the association rate was 45.5 cents for TWA, 42 for WCA and 39 for WCOA. So TWA will save 13.5 cents ($270 for $200,000 home), WCA 9.2 ($184), and WCOA 6.2 ($124 on $200,000 assessment).

The base operating requirement has been established at 23.5 cents. That is, to keep the same amenities, not build anything, just keep things as they are, and pay off debt, it would cost the taxpayer 23.5 cents on every $100 assessed. So that means for the $200,0000 homeowner, a tax of 7.5 ($150 per year) per year pays for the following over the next five years:

• Expansion and reorganization of police services
• Two additional fire stations and the replacement of the central fire station
• New parks, renovated parks, ponds and recreational improvements.
• Firefighting and policing equipment
• Computers, hardware, software
• Accumulating financial reserves
• Emergency fund
• Trolley expansion
• Waterway taxi operations
• Probably more that I have not captured
• Study for government office construction

We continue to be a community being developed, so we continue to build parks and amenities to make The Woodlands, “The Woodlands”. Unfortunately, the Township inherits a 50/50 partnership with the developer to fund the construction of parks and pathways in new neighborhoods. The TWA debt obligations, because of that agreement, must also be paid by all of us. That debt would have been paid off by TWA association assessments over the next four years, had we not consolidated and formed a new government. We also inherit the capital investments of several new parks and pathways as a result of the development of Creekside Park Village and other new neighborhoods.

Operationally, we will be hit by a very large operational increase in the fire department. For the township as a whole, salaries and benefits go up a whopping 7.4%! Township employees will receive improved benefits from the merger by assuming some of the benefits from the Woodlands Service Company. Combined, this 7.4% equates to $1.7 million. Contracted services will also go up by 4.1% equating to $1.0 million. This primarily provides additional police protection. These two expenditure types comprise 62% of the operating budget. Elsewhere in the budget, it is difficult to see the changes simply by numbers, because of the capital spending in the last two years of the WCA when projects were accelerated. There are also some savings from consolidation and redistribution of duties among staff.

By the number to note: Policing program $1.1mm, Savings by consolidation $1.24mm, 2010 capital for construction & renovation & improvements $11.0mm, 2010 total revenues $77.7mm, 2010 total expenses $77.6mm, Debt service $7.65mm, Paths and walkways Town Center $1.8mm.

Can we expect some tuning to this initial budget proposal? I think so, but the rate will not likely go down much if any. I would like to see it capped here though and not allow it to rise above 33. Preferably, the board can add value by lowering the rate to 32 (where I really want it capped long term). It is expensive to live in The Woodlands. We face water bonds added to all of this. Much work has gotten us to this point. Refinement and fine-tuning is needed. We are, after all, in a recession. The county cut back 5% to accommodate some of the stress on everyone. It would be better to start the township lower if we can, and consider the plight of those who are under budget stress.

Financing Woodlands Township Capital 2010-2014 Bonds

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The Woodlands Township Executive Committee voted today to send a bond proposal strategy for a long-term debt management plan to the Woodlands Township Board, for consideration at the July 22nd meeting.

The Township five-year plan will include a number of projects requiring long-term financing. The proposed construction of a new office facility for The Woodlands Township operations is purposely not included in this list, but does not indicate that the project will be neglected in the plan. The project planning and review of facility options and alternatives is still underway and financing options will be considered at a later date.The plan is to reduce the cost of financing Township projects in this time of low cost money, and does not address the 21 million debt of the Economic Development Zones (EDZ) 1-3, which funded the construction of Town Green Park and partially funded the construction of Market Street, among others. These debts are addressed in separate funding programs.

Construction projects in the plan and the refinancing of existing debt include:

Bond Proposal for financing major capital projects in five year plan	Amount $mm
Total estimated Capital Budget 2010-2014	47.6
Refinance TWA and WFD debts	8.0
Refinance WFD Station #6 and Fire Training Facility debts	11.6
Construct Creekside Fire Station	3.4
Construct Indian Springs Fire Station	3.7
Reconstruct Grogans Mill Central Fire Station	6.4
Purchase fire trucks and equipment for new stations	2.5
Construct new parks and pathways in five year plan (Creekside and Town Center)	12.0

The most viable financing option requiring long-term financing, with voter approval, is the issuance of General Obligation bonds (“GO bonds”). GO bonds are backed by the issuing party and carry an irrevocable commitment - the authorizing body (Township) will levy a property tax sufficient to fund the annual debt service requirements for the life of the issued bonds. This enables large projects to be carried for many years, committing but reducing the immediate tax impact of the projects.

GO bonds are typically tax-exempt bonds issued for a period of 20 years or less. They are rated by national rating agencies and are eligible for municipal bond insurance. Considering the Township’s large property tax base and the relatively low outstanding debt, The Woodlands Township should receive a favorable rating and qualify for municipal bond insurance.

Projects and refinancing will be discussed as part of the 2010 budget and five year plan. The first 2010 Budget Workshop is scheduled for 9 a.m. Wednesday, July 29, 2009, and the plan will be presented at the Town Hall Meeting on July 29, 2009. The final decision on the debt management plan will be considered by the Board in late August.

Woodlands Township Townhall Meeting July 29, 2009

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Today, the township announced a township meeting at The Woodlands Waterway Marriott Hotel and Convention Center in Town Center. The meeting will be open to the public. Residents and businesses are encouraged to attend. Of particular interest will be the budget. A Presentation of the 2010 Budget will allow residents and businesses of The Woodlands Township the opportunity to hear a presentation of the proposed 2010 Operating Budget and provide feedback to The Woodlands Township Board of Directors.

“The transition into one government called The Woodlands Township is well underway,” said Chairman of the Board Nelda Blair. “The process is complicated and intricate, and involves uncharted territory in Texas history. This is the first budget in this process that provides a significant opportunity for our 90,000 residents and 2,000 employers to determine their future form of governance.”

Residents have been patiently (and some nervously) anticipating this for some time. Although the economy here has been flourishing even in the depressed national economy, a number of residents remain in a more cost conscious state than in the past. It is the time to step to the plate to make opinions and needs known, if residents want to be heard by the Board of Directors. This will be an evening meeting, especially timed for daytime working residents interested in contributing to their future here, starting at 7PM.

Parking is available at the Town Center Garage at The Cynthia Woods Mitchell Pavilion. The fourth floor of the garage is connected via skywalk to The Woodlands Waterway Marriott Hotel and Convention Center. The meeting will begin promptly at 7 p.m. and will conclude by 9 p.m.

Related articles
1. Woodlands Budget Considerations
2. Newly developed Strategic Plan

Private vs Government Enterprise

The Woodlands has been moving in a dangerous direction. Government enterprise! There seems to be a trend these days, started by participation in the financing of the expansion of the pavilion. Collection of taxes was the rationale for the Pavilion; the facility was disabled by hurricane Ike, and there was a shortage on financial support. As a contractual agreement with the Pavilion for financing part of the renovation of the Pavilion, the township gained the right to have a rink on its property. The Township is now taking bids on building an ice rink.

Will this reduce our taxes? It seems to be piling on! An ice rink has limited usefulness. Normally, such facilities are financed and operated by private enterprise. Why should we be engaged in government enterprise? Is this part of the new era of taxation? Are we watching our finances carefully? I am uncertain that the payback on the Pavilion will be as advertised. Will we get a bond for this and then have to pay out of our pocketbooks? Remember the tax relief we were going to get with the Township? Perhaps this is a way to reduce our taxes or not.

Decison-making in The Woodlands - part 2

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The seven phases of a project are:

1. Proposal: overview of a proposed budget item, defining the problem, a solution, estimated cost and expected benefit. On large projects, this consists of substantial analysis and networking with people.
2. Defining the alternatives and selecting the preferred alternative. Refine cost estimate. Produce general plan. Select contractors for contracts needed in detailed planning.
3. Detailed Planning: define schedules, resources, contracts, execution plan with tasks, milestones, cash flow and other resource consumption. Refine cost estimate. Bidding and selection for execution contracts. Financing.
4. Execution: construction or development phase. Monitor cost and resources, manage contracts. Report progress and issues routinely. This is where the highest costs occur and what many people believe is project management.
5. Implementation: bringing the deliverables into their useful state to realize anticipated benefits. This is where success is usually defined, so that the next step can be executed at the appropriate time or times in the future. Measuring tools are put into place to monitor expected benefits. Project documentation for operation is generated. What went right, what went wrong, abstractly develop learning experience. This is where the project team learns from each other.
6. Operation: Start-up processes are executed, staff trained, operational budget is monitored. Benefits delivered to stakeholders.
7. Look-back: measuring success. This is where promises meet reality. It is where project manager and stakeholders can learn how to do the job better. It usually occurs months or even a year or two later, depending on the nature of the project.

A project can be effectively managed amidst other projects by a management team by using a gated approach. Between each phase of the project, stop at the gate to discuss progress and decide to proceed to the next phase or if more preparation is required first. The execution phase can be divided up into two separate sub-phases or even more, if the project is very expensive. All this sounds like excess overhead and it is sometimes, but it saves a lot of money and time in large capital projects. In small projects, one must decide what is appropriate for the value to be derived, not necessarily on the cost alone.

So why go through all this trouble in a government? Because the process allows stakeholders to participate and guide the results. It is a logical process where the stakeholders know where the project stands and where it is going at what speed. Even in a small community, the process should not the allowed to be lax. The community has few dollars and wants the results of their selected projects to have highest value, just like a large corporation. Due process does not to have to be terribly constraining so that nothing gets done. It just needs to be logical and able to be replicated.

This will be continued in part three.

Woodlands Payment to Houston - Where is that money going anyway?

These are the projects that we are helping to fund with the capital provided by the recent bond sale and probably with this year's sales tax payment to Houston. I have wondered about these projects ever since we signed the agreement with Houston, so I have done some research to share with you. Chime in if you have additional information to share. I ask myself the question, how will we and the region benefit as a whole from our investments?

You know, there is no guarantee that residents of The Woodlands will benefit in any way from these payments, but to be fair about it, Houston is willing to put our money exclusively into projects that benefit the region's shared use of facilities. You can see the rationale when you peruse the projects below. These are included as part of the infrastructure improvement program of the City of Houston. They are considered to have regional benefit, including Houston proper. In simple terms, for now, our money is targeted to benefit the users of the medical center and major parks. These projects were included in the original agreement between The Woodlands and Houston and have been programmed into Houston's 2009-2014 Capital Improvement Program (CIP). All the project names below are in the Houston Capital Improvement Plan and were included in an attachment to their agreement with us. In 2008, Houston asked the township to approve them in a separate memo, according to the process of the agreement, which we did.

The Agreement with Houston; these are the exact project names in the agreement

1. Herman Park - $200,000
2. Memorial Park Pedestrian Bridge - $500,000
3. Lake Houston Park improvements - $4,500,000
4. Holcolme Reconstruction ² - $3,723,000
5. N McGregor Way Reconstruction - $2,600,000
6. Cambridge Paving - $400,000
7. Bayou Drive - $3,800,000 (apparently a new road)

In addition, there is another project not listed but already underway.

• Hardy Toll Road Extension - $300,000,000 (We expected to contribute $5,000,000 during the project execution. This is a multi-year project, and was targeted for completion in 2011, but more likely in 2012. There is a lot to it, including the permanent closing of streets.⁴

What I have been able to discern from research:

Herman Park
There are several projects underway for this park according to the City of Houston's website.¹ Our money is designated for one particular planned project. Supporting the park is worthwhile to us. Our residents do visit the zoo and other facilities in and around Herman Park and many of their projects do affect our residents, although I would think in a small way. The park's capital improvements over the 2009-2013 plan amount to $2.5 million, with The Woodlands contributing some $700,000 to that plan for 2009-2014 through our initial payments.
Memorial Park
Memorial Park is used extensively in the region, but not likely by most residents of The Woodlands. It is shared regionally. We are not a very big part of the benefactors of this large park. Memorial Park Pedistrian Bridge is found in the Houston capital budget for $4,158,000. We fund $500,000 of that. Ground breaking occurred just recently. The scenic bridge will be covered in greenery and is intended for safe pedestrian passage.
Lake Houston Park
Lake Houston Park Improvements - $4,703,000. Some of us could be users of this 5000 acre park over time. It is the closest to us of all Houston's major parks. It has no frontage to Lake Houston, so there are no boating ramps to or on the lake. There is access to Peach Creek and Caney Creek, both of which empty into Lake Houston just north of Kingwood. It is close enough for a pleasant day trip from here, offering fishing, canoeing, horseback, biking and a nature center. George Mitchell funded the nature center. "The first phase of our development of Lake Houston Park will be an entry gate, roads, visitor center, parking, cabins and more campsites" to be completed in late 2010. This is one of the more interesting projects to me. Lake Houston Wilderness Park is part of Houston's Capital Improvement Project program supporting the Kingwood area. Now you see the story. Kingwood annexation by the City Of Houston was the primary reason we organized to fight annexation. So our payment to not be annexed is in a large part going to help the Kingwood area. How do you like "them apples"? This park became part of the Houston parks system in 2006.^7,8
Holcombe Reconstruction
This medical center project will provide better drainage and traffic flow on Holcombe Avenue. At the beginning of 2009, the project was in phase 3 of 4. At the end of this, the street will be repaved with a better mobility configuration. The last stage will be to improve water transmission to the medical center. 57 trees of 283 will need to be removed, but the project will plant 80 seven-foot trees in their place. ⁵
N MacGregor Way Reconstruction
There is no project by this name in the Houston capital improvement plan. However, there is one named N MacGregor Way Realignment, which is safely assumed to be the one referenced. The Houston Zoo web page shows the two names synonymous. This project was budgeted for 2008 but continues to be a work in progress. It realigns the roadbed with S MacGregor Way to make 10 acres of valuable unused parkland available to the public and also makes the roadbed available for a wide path or riding trail. It has a beautiful archway of trees along both sides of the roadway. This $2.6 million investment is tagged as a mobility project to improve traffic flow to the medical center and Hermann Park.⁶
Cambridge Paving
The capital improvement plan has this as "Cambridge Paving: Holly Hall to IH 610", a $2.1 million dollar project, $400,000 of which is budgeted in 2009 (our payment), to be completed in 2011. Scope is approximately 1,600 feet of Cambridge Street to a four-lane concrete roadway with curbs, sidewalks, street lighting, and necessary underground utilities. This is also a mobility project, to provide less congested access from Loop 610 to Herman Park and the Medical Center. It widens the narrow Cambridge road to four lanes.
Bayou Drive
Tagged as "Bayou Drive: From South Street at Myrtle to Quitman" in the capital improvement plan, this 5.9 million dollar project begins in 2009 and ends in 2010. I was drawing blanks on defining this project until I found myself physically at the Medical Center, where I noticed a sign advertising the project. I will update this article when I find out more. It was a 3.8 million dollar black hole of Woodlands money until I discovered the sign where the road will connect. I could not find this project on Houston's website or any other source. It has to be out in internet-land somewhere.

Hardy Toll Extension
This $300,000,000 project is four miles of railyard, residential area and integration with Elyssian. It is being designed in 2009 and construction should begin in 2009-2010. Houston has tagged $5,000,000 of our dollars for this project, but it is not listed in the regional project list they sent us. This one has high relevance to resident commuters traveling into the Houston downtown area. I may be out of date on this one. Funding seems to be as a toll road, not as a public sector financed road. I am seeking clarification of this as well.

I noted a lack of recognition that The Woodlands is funding some of these projects. I am not sure why, perhaps political.

References:
¹ 2009-2013 Capital Improvement Plan City of Houston, Parks and Recreation, form "E"
² 2002 study "Transportation Master Plan for The Greater Texas Medical Center Area"
³ City of Houston Mobility Capital Projects ⁴ Houston: Hardy toll road extension gets final approval
⁵ Holcombe Blvd with drainage map
⁶ 2007 City Council Notes, p 11-12.
⁷ Kingwood The Observer "CIP meeting in Kingwood discusses future projects", Feb 2009
⁸Lake Houston Wilderness Park - official site

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%.