Appraisal Standards Review
Brewster County Appraisal District Appraisal Standards Review Follow-Up Report
June 2007
Introduction
In July 2004, Marathon Independent School District (Marathon ISD), in Brewster County, Texas, was identified as one of 54 school districts in the state meeting the criteria that initiate an Ap-praisal Standards Review (ASR) of the county appraisal district that serves them. In December 2005, the Comptroller’s Property Tax Division (PTD) released the results of its ASR of Brewster County Appraisal District (Brewster CAD).
The report made 10 recommendations to improve Brewster CAD’s appraisal practices and operations. ASRs are intended to determine why the Comptroller’s Property Value Study (PVS) found local values invalid and to recommend changes in operations and management that would improve appraisal practices. The Brewster CAD review evaluated five functional areas: board of directors (governance and management); appraisal district policies, procedures and operations (assessment administration); information processing systems (information processing and data collection); staff-ing, personnel qualifications and positions (resources and management); and adherence to generally accepted appraisal practices.
At the time of the review, challenges facing Brewster CAD included documenting its board and administrative policies; hiring qualified staff; documenting its appraisal practices; and improving its appraisal tools and reappraisal methods.
Texas Property Tax Code Section 5.102(d) requires that if the appraisal district fails to comply with the recommendations in the report and the Comptroller finds that the board of directors of the appraisal district failed to take remedial action before the first anniversary of the date the report was issued, the Comptroller must notify the judge of each district court in the county for which the appraisal district is established. The judge(s) must appoint a five-member board of conservators to implement the recommendations. The board of conservators exercises supervision and control over the operations of the appraisal district until the Comptroller determines, under Section 403.302 of the Government Code, that in the same year the taxable value of each school district for which the appraisal district appraises property is the local value for the school district. The appraisal district shall bear the costs related to the supervision and control of the district by the board of conservators.
For the one-year follow-up report, an appraisal district complies with the statute if it takes remedial action to implement the recommendations in the ASR. Remedial action means that the CAD has corrected or intends to correct, remedy or improve the deficiencies identified in the ASR. The CAD demonstrates remedial action by having implemented or nearly completed most of the recommendations by the first year anniversary of the release of the report. The Comptroller recognizes that some recommendations included in ASRs will require more than a year to implement. Some ASRs include more recommendations than a CAD with limited resources can implement within a year. As long as the CAD is working to implement the recommendations, the Comptroller continues to work with the CAD to achieve full compliance. CADs that have completed all recommendations by the one-year anniversary will not require additional monitoring.
The PTD team returned to Brewster CAD in December 2006 to assess its progress in implementing the report recommendations. The review team found that eight of the 10 recommendations have been completed and the remaining two are in progress.
PTD sent the CAD’s board members surveys soliciting their views and comments on the ASR. None of the board members responded.
PTD believes that Brewster CAD’s efforts to date generally meet the state’s legal requirements, but will continue to monitor its progress toward full implementation. The following pages outline specific steps that the CAD should take to complete the ASR recommendations.
History and Significant Events
Brewster CAD received an ASR because the 2003 PVS found that the CAD was inconsistently appraising in every category where a sampling of properties was tested. The PVS found that local property values in three out of the CAD’s four school districts—Marathon, Alpine and San Vicente—were outside the study’s statistical margin of error. The fourth district (Terlingua CSD) was within the statistical margin of error.
Marathon ISD was identified as eligible for the “grace period” provided in Section 403.3011 of the Government Code. Within Marathon ISD, sample property ratios that contributed to the overall finding of invalid values included Category A, Single-Family Residential, with a weighted mean ratio of .8785; and Category D, Rural Real Land, with a weighted mean ratio of .8856.
The Comptroller released the ASR in December 2005. In 2006, the chief appraiser implemented or partially implemented all recommendations, including developing and implementing multiple policies and procedures such as the appraisal district board’s policies and procedures; an administrative manual; exemption and 1-d-1 agriculture use procedures; job descriptions and employee evaluation formats; and appraisal and sales data manuals. The chief appraiser also has initiated strategies to improve appraisal staffing and develop a reappraisal plan for 2007 and 2008.
The CAD’s efforts to improve appraisals throughout 2004 and 2005 produced positive results. Most property categories in all of the school districts improved, and all four of the CAD’s school districts received local value in the final 2005 PVS. Preliminary 2006 PVS results, however, indicate that Marathon ISD received invalid findings. Again, Category D is outside the confidence interval, with a weighted mean ratio of .8680. The CAD may appeal these findings.
What Remains to Be Done
The Appendix that follows lists the 10 recommendations identified in the ASR, with a summary of the actions taken to date. The Comptroller acknowledges the work Brewster CAD has performed over the last year. The eight completed and two in progress recommendations helped the CAD improve its staffing, management and appraisal practices.
The two recommendations remaining in progress require the following efforts to complete:
Recommendation 2: Revise the mineral, utility and industrial professional appraisal services contract to comply with IAAO standards.
As of December 2006, the chief appraiser contacted the CAD’s appraisal services vendor, Thos. Y. Pickett & Company Inc., about revising the contract. The contractor provided a copy of a proposed draft on December 20, 2006. The proposed draft, however, does not address the original ASR findings related to specifying due dates for deliverables.
For example, section 16 of the contract lists the following four items as a deliverable:- the tax roll showing taxpayers and appraised values;
- the supporting data for the appraisals pursuant to Tax Code, Section 25.01 (c);
- a copy of information that is confidential or proprietary, including without limitation any taxpayer information protected under Tax Code, Section 22.27; and
- the table of technical data.
It does not give a due date for delivery of these items.
Section 9 of the draft contract specifies that payments will be made on the first day of January through June of each year, with the balance due upon completion of the work and after final action of the Board of Review. The amounts, however, are not identified in the draft, making it impossible to determine whether a substantial payment can be withheld pending successful completion of all deliverables.
The chief appraiser noted that the CAD would like to implement these changes at the time of contract renewal in mid-2007. Before renewal, the CAD should ensure that the deliverable items identified above have a specific due date or are linked to a specific event, such as 10 days following completion of ARB hearings. The CAD also should ensure that the contract payment section allows it to retain sufficient funds or to link payments to specific deliverables to ensure contractor performance.
Recommendation 5: Update the Brewster County Appraisal District mapping system and integrate the mapping and appraisal systems.
In 2006, the CAD updated ownership maps for large ranches and also added that information to the CAD’s paper maps. The CAD also reorganized its map room and put maps into labeled tubes. The chief appraiser decided not to expend staff time on manually updating maps, but to seek an automated solution instead. The chief appraiser added funds to the 2007 budget for GIS/Mapping.
In November 2006, the board directed the chief appraiser to issue a request for proposals (RFP) for mapping solutions. The chief appraiser sent the RFP to four firms and received two proposals. The chief appraiser sent these to the board of directors for evaluation. The two firms responding to the RFP made presentations to the board at its December 2006 meeting.
A contract was awarded at the February 2007 board meeting. The contract allows nine to 12 months for complete implementation; accordingly, the system should be fully integrated by March 1, 2008.
Appendix A
Brewster County Appraisal Standards Review Implementation Status Report
2.1 Board of Directors
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 1 | Implement required appraisal board policies and procedures. | Complete |
The CAD board chair led the board of directors’ effort to develop written policies and procedures in July 2006. The board approved the draft manual at its August 2006 meeting. |
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| 2 | Revise the mineral, utility and industrial professional appraisal services contract to comply with IAAO standards. | In Progress | July 2007 |
In December 2006, the chief appraiser contacted the CAD’s appraisal services vendor, Thos. Y. Pickett & Company Inc., about revising the contract. The contractor provided a copy of a proposed draft on December 20, 2006. The proposed draft did not address the original ASR findings related to specifying due dates for deliverables. The chief appraiser noted that the CAD wishes to implement proposed changes at the time of contract renewal in mid-2007. |
2.2 Appraisal District Policies, Procedures and Operations
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 3 | Develop a complete, written administrative procedures manual. | Complete |
The chief appraiser developed the manual in summer 2006. The manual contains general office policies; customer service procedures; administrative appraisal procedures such as processing ownership transfers, sales letters and exemptions; and payroll, accounts receivable and accounts payable procedures. The chief appraiser initially submitted the manual for board discussion and approval at its September 12, 2006, meeting. The board suggested revisions to be incorporated into the initial draft and approved the final manual at its November 2006 meeting. |
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| 4 | Establish district policies and procedures for granting or denying exemptions and administering 1-d-1 open space agricultural land values. | Complete |
The chief appraiser and staff developed the exemption and 1-d-1 open space agriculture procedures in summer 2006. The chief appraiser initially submitted the procedures for board discussion and approval at its September 12, 2006, meeting. The board suggested revisions to the initial draft and approved the final procedures at its November 2006 meeting. The exemption procedures describe the processes for homesteads and persons over 65 or disabled. It also provides a complete index of exemption information from the Property Tax Code. The 1-d-1 procedures describe general criteria and methods to determine the eligibility of land and exceptions. They also describe application procedures and actions to be taken by the chief appraiser in assessing the application. |
2.3 Information Processing Systems
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 5 | Update the Brewster County Appraisal District mapping system and integrate the mapping and appraisal systems. | In Progress | March 1, 2008 |
In 2006, the CAD updated ownership maps for large ranches and relayed those items onto the paper maps. The CAD also reorganized its map room and put maps into labeled tubes. The chief appraiser decided not to expend a lot of staff time in manually updating maps, but to seek and implement an automated solution. The chief appraiser added funds for GIS/Mapping to the 2007 budget. In November 2006, the board directed the chief appraiser to issue a request for proposals (RFP) for mapping solutions. The chief appraiser sent the RFP to four firms and received two proposals. The chief appraiser sent the proposals to the board of directors for evaluation. The two firms responding to the RFP made presentations to the board at its December 2006 meeting. The contract was awarded at the February 2007 board meeting. The contract allows nine to 12 months for implementation. Accordingly, the system should be fully integrated by March 1, 2008. |
2.4 Staffing, Personnel Qualifications and Positions
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 6 |
Hire or contract with enough qualified and certified appraisers to effectively manage the district’s parcel count. |
Complete |
At the time of the ASR, Brewster CAD had three appraisers. When the current chief appraiser was selected in November 2005, he determined that converting existing administrative staff to appraisal staff would be the best way to increase coverage of parcels, since the CAD could not easily recruit appraisers. The 2007 budget includes six full-time appraisal positions. The chief appraiser has registered all long-term administrative staff with Board of Tax Professional Examiners, and they are currently pursuing certifications. In January 2007, one appraiser/ data entry position was vacated with the promotion of an existing staff to deputy chief appraiser. The chief appraiser anticipates hiring a replacement. The converted positions are performing fieldwork – measuring properties and taking pictures. The chief appraiser is reviewing their work to ensure its accuracy and consistency and makes final judgments on valuations. With the converted positions, the CAD now has the equivalent of five full-time appraisers, plus quality control provided by the chief appraiser. The conversions have reduced the number of parcels per actively employed appraiser by more than half, from 9,000 in tax year 2005 to about 4,000 in tax year 2007. |
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| 7 |
Develop complete job descriptions and expectations for all Brewster County Appraisal District employees and perform employee evaluations. |
Complete |
The chief appraiser developed job descriptions in the summer of 2006. The job descriptions include general duties, specific duties, minimum qualifications and preferred qualifications. After the chief appraiser developed the job descriptions, staff members reviewed them for accuracy. All job descriptions were approved by the board at the February 2007 meeting. Concurrent with the development of the job descriptions, the chief appraiser also developed new evaluation formats. The chief appraiser used these formats to evaluate employees in November 2006. The evaluation process consisted of the employee and chief appraiser each completing the evaluations separately and then jointly discussing the results. |
2.5 Generally Accepted Appraisal Practices; Equality and Uniformity of Appraisal Standard
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 8 | Produce a comprehensive appraisal procedures manual by updating the existing property classification and appraisal procedures. | Complete | The chief appraiser developed the appraisal procedures manual during summer 2006. In November 2006, the chief appraiser revised the property classifications and the board adopted the manual. |
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| 9 | Produce a written manual for gathering and analyzing sales. | Complete |
The chief appraiser developed the sales procedures in summer 2006. He has been revising the manual and submitted it for final board adoption in February 2007. |
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| 10 | Adopt and follow a complete reappraisal plan. | Complete |
The chief appraiser developed the CAD’s reappraisal plan and submitted it for board approval in September 2006. The board formally approved the plan on September 12, 2006, after a public hearing. The CAD mailed copies of the plan to its taxing entities and the Comptroller’s office on October 23, 2006. According to the chief appraiser, the CAD contacted other appraisal districts to obtain examples of reappraisal plans to use as models in preparing its own plan. |