Houston City Council voted 13-1 on Wednesday, Sept. 2, to approve a deal that blocks the city from annexing The Woodlands.
The vote completes a decades-long effort to settle The Woodlands' governance future. The Woodlands Township Board of Directors had unanimously approved the same agreement on Aug. 26, and Houston's vote makes the Third Amendment to the Regional Participation Agreement (RPA) official.
"This is a huge win for The Woodlands and a day worth celebrating," Township Chairman Brad Bailey said in a statement after the vote.
Under the amended agreement, The Woodlands will pay Houston a total of $50 million over the next three years. In return, the Township keeps its sales tax revenue starting in 2030, an estimated $4.5 million per year over the next 30 years based on conservative projections, according to the Township.
The deal also eliminates Houston's annexation rights over The Woodlands for as long as the community remains in Houston's extraterritorial jurisdiction. The original 2007 RPA had set annexation protections to expire in 2057.
The Township noted that while current state law requires voter approval before annexation, that law could change. The amendment removes that vulnerability.
How the money works
The $50 million breaks down this way, according to the Township:
- $22.6 million already sitting in the Regional Participation Fund, with spending restrictions now lifted
- $27.4 million in new payments, of which $7.9 million was already owed under the original agreement and $19.5 million comes from Township cash reserves
The payment schedule runs through 2029. The Township owes $22.63 million by Dec. 31, 2026; $9 million by the end of 2027; $9 million by the end of 2028; and $9.37 million by Dec. 31, 2029.
Houston's finance director, Melissa Dubowski, told the city's Budget and Fiscal Affairs Committee on Sept. 1 that the initial $22 million would help cover a $25 million budget shortfall, the Houston Chronicle reported.
Not everyone agreed
The deal was not without opposition. As we reported Sept. 2, Houston Controller Chris Hollins called it a "bad deal" and urged the council to vote against it. Hollins argued that under the original agreement, The Woodlands would have paid Houston nearly $200 million by 2057.
Houston Councilmember Ed Pollard had delayed the original Aug. 26 vote by one week so council members could review the financial implications, according to ABC13.
Houston Mayor John Whitmire called the agreement "a win-win for both of our great communities," according to the Township's statement.
What it means locally
The original RPA, signed in 2007, required The Woodlands to send one-sixteenth of 1% of sales tax revenue to Houston for regional capital projects. The Township's 2025 budget included about $2.3 million for that payment alone.
Starting in 2030, that money stays in The Woodlands.
The agreement does not affect the community's ability to consider incorporation in the future. Voters rejected an incorporation measure in 2021 by 67%.
