HOUSTON — Houston City Controller Chris Hollins called a proposed agreement that would give the city $50 million in exchange for not annexing The Woodlands a “bad deal,” as City Council prepared to vote on the measure Wednesday.
Under the proposed agreement, The Woodlands Township would pay Houston $50 million over four years if the city affirms that it has no intention of annexing the suburban community, which has more than 110,000 residents.
The agreement would also end the township’s obligation to contribute part of its sales tax revenue to a restricted fund that supports projects jointly approved by Houston and township officials.
Hollins’ office estimated that ending those contributions could cost Houston as much as $173 million in revenue through 2057, when the existing obligation would otherwise expire.
“It’s a bad deal for Houston,” Hollins told Houston Public Media. He said the agreement would give up future revenue to address the city’s immediate budget needs rather than resolve its spending problems.
Mayor John Whitmire rejected Hollins’ projection and accused the controller of manipulating the numbers for political reasons.
Whitmire said the city must focus on funding current services rather than projecting revenue decades into the future. His finance department has not produced an exact estimate of how much revenue Houston could lose over the next 30 years, he said.
Finance Director Melissa Dubowski said the $50 million payment would help address the gap between city revenue and spending. The city faces an estimated $26 million deficit in the current fiscal year, while the agreement would provide nearly $23 million to Houston in 2027.
The restricted fund has financed road repaving and improvements at Lake Houston Park and Hermann Park, according to the mayor’s administration.
City Council member Edward Pollard delayed the measure’s vote last week to allow further discussion. The council is scheduled to consider it Wednesday.
The Woodlands Township Board approved its side of the agreement unanimously last week. Township officials estimate the deal would save the community an average of $4.5 million annually over the next 30 years.
The dispute comes as annexation remains a contentious issue in Houston’s suburbs. Houston annexed Clear Lake in 1977 and Kingwood in 1996 despite opposition from some residents.
Texas later prohibited cities from carrying out forced annexations without voter approval from residents in affected areas.
Whitmire said Houston and The Woodlands have discussed the proposed settlement and said he expects the City Council to approve it.