Houston City Council approves deal that blocks future annexation of The Woodlands

HOUSTON, Texas (KTRK) -- Houston is set to receive $50 million from The Woodlands over the next several years as the two municipalities move to end a regional partnership agreement that also prevents the city from annexing The Woodlands in the future.

Houston City Council voted on Wednesday to terminate the Regional Partnership Agreement with The Woodlands Township.

Under the agreement, Houston and The Woodlands contributed portions of tax revenue to a regional fund intended to pay for projects such as toll roads and airport infrastructure.

More than $20 million remains in the fund. Under the new agreement, that money will come under Houston's control.

The Woodlands will pay Houston about $22.5 million this year, followed by payments of at least $9 million through the end of 2029, bringing the total value of the agreement to $50 million.

In exchange, Houston will give up any future ability to annex The Woodlands, even if state law were to allow it.

Houston Mayor John Whitmire said the agreement provides the city with additional funding at a time when officials are seeking ways to address budget challenges.

"We better be responsible and accept this $50 million because we may never see it again, and Lord knows we need it," Whitmire said before the vote.

Whitmire said he was surprised The Woodlands agreed to the $50 million payment.

"I was surprised, quite frankly, they came and agreed to the $50 million," he said. "They didn't really have to."

The agreement has drawn criticism from Houston City Controller Chris Hollins, who called the deal short-sighted.

"This is not a deal any CFO would make," Hollins said. "This is not a deal you would make with your own money, and we shouldn't do it with taxpayer dollars, either."

Council member Joe Panzarella, the only member to oppose the agreement, said he was concerned about changing the restrictions on how the funds can be used.

"My major concerns were that these funds were originally for infrastructure and park improvements," Panzarella said. "Now we are moving to have them unrestricted, and I believe we're leaving money on the table for future infrastructure projects."

Whitmire has cited several areas where the city could use additional funding, including the Houston Health Department, infrastructure, public safety and homelessness. He has not specified how the $50 million will be allocated.

The Woodlands Township Chairman Brad Bailey described the agreement as a win-win for both communities.

"Being able to keep those funds home and back into our community is a really big deal and something everyone in The Woodlands is excited about," Bailey said.

Bailey said The Woodlands plans to continue working with Houston on future projects even after the regional partnership agreement ends.

Whitmire said he will continue looking for ways to generate additional funding as Houston works to address its budget deficit.