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Conroe, Willis ISD Settle Water Rate Dispute

**Conroe, Willis ISD Settle Years-Long Water Rate Dispute, Agree to New Non-Profit Rate and Significant Refund**

CONROE, TX – After a legal battle spanning more than six years, the City of Conroe and the Willis Independent School District (Willis ISD) have reached a final settlement in their long-running dispute over water rates and tax exemptions. The agreement, signed on June 11, 2024, establishes a new rate structure for the school district and includes a refund of hundreds of thousands of dollars in overpayments made by Willis ISD since 2018.

The conflict originated in 2017 when Conroe annexed land that included several Willis ISD properties. Prior to annexation, Willis ISD paid a lower, tax-exempt water rate as an entity outside the city limits. Following the annexation, the City reclassified these accounts, seeking to charge the school district standard commercial water rates, which are significantly higher. Willis ISD quickly challenged this change, asserting its status as a governmental entity that should not be subject to city property taxes or commercial utility rates.

The disagreement quickly escalated into a complex legal fight. In January 2018, Willis ISD initially protested to the Montgomery County Appraisal District, which sided with the school district by confirming its tax-exempt status. Conroe, however, disagreed with this ruling and filed a lawsuit in March 2018 to contest the decision.

The case wound its way through the Texas court system. A state district court initially ruled in favor of Conroe in May 2019. However, that decision was reversed in March 2021 when the 9th Court of Appeals sided with Willis ISD. Conroe then sought to appeal the appellate court’s decision to the Supreme Court of Texas, but the high court denied the petition for review in May 2022, effectively upholding the appeals court’s ruling in favor of Willis ISD.

During the ongoing litigation, the City of Conroe took proactive steps in 2021 by passing a new ordinance. This ordinance created a specific “Non-Profit Rate” for organizations like school districts and other non-profit entities operating within city limits. This new rate was designed to be lower than the commercial rate while still covering the cost of service provided by the city.

Under the terms of the newly signed June 11 settlement, Willis ISD will now pay this established Non-Profit Rate for all its accounts located within Conroe city limits. A crucial aspect of the agreement is the confirmation that Willis ISD will not be required to pay city property taxes, aligning with its long-held position as a governmental entity.

Furthermore, the City of Conroe has agreed to refund any overpayments Willis ISD made under the higher commercial rate since 2018. This refund is reportedly in the hundreds of thousands of dollars, a significant financial recovery for the school district. The settlement also stipulates that all outstanding lawsuits related to this dispute will be concluded, with each party responsible for their own legal fees incurred during the extensive litigation.

City and school district officials expressed relief at finally resolving the prolonged dispute, emphasizing the importance of moving forward constructively. The settlement brings an end to a contentious chapter, solidifying Willis ISD’s financial standing regarding utility rates and tax obligations within Conroe city limits, and providing clarity for other non-profit entities operating in the city.

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