Chapter 1
Overview of County Appraisal District1.1
County History and DemographicsAccording to the Handbook of Texas, Nueces County was formed from San Patricio County in 1846 and organized in that same year. Corpus Christi, which was incorporated in 1846, became the county seat.
Nueces County is on the Gulf of Mexico southeast of San Antonio. It is bounded on the north by the Nueces River and on the east by the Laguna Madre, Corpus Christi Bay, and Redfish Bay. San Patricio County is on the north border, Jim Wells County on the west, and Kleberg County on the south. The county seat and largest city, Corpus Christi, is 210 miles southwest of Houston and 145 miles southeast of San Antonio. Two major highways serve the county, Interstate 37 and U.S. Highway 77. Two railroads, the Missouri Pacific and the Texas-Mexican, cross the county.
Nueces County comprises 847 square miles of the Coastal Prairies region. The terrain is generally flat. The elevation ranges from sea level to 180 feet above sea level. In the central part of the county the soil varies from very dark loams to gray or black cracking clayey soils. In the west the soils are light to dark with loamy surfaces and clayey subsoil. In the coastal region the soils are sandy; in marsh areas the soils are also very dark with clayey subsoil. Vegetation varies from cord grasses, salt grasses, and marsh millet along the coast to tall grasses, oak, prickly pear, acacias, and mesquite trees in the central and western parts of the county. Between 61 and 70 percent of the land in the county is considered prime farmland. The Nueces River drains the northern and western portions of the county, Oso Creek the central portion, and San Fernando and Petronila creeks the southern portion.
According to the U.S. Census Bureau, the population of Nueces County as of the 2000 census is 313,645 residents. The median estimated per capita income in 2003 is $19,363 with 16.2 percent of the population living below the poverty level.
Leading industries included tourism, agribusiness, general and heavy construction, oil and gas field services, meat packing, soft-drink bottling and canning, commercial printing, petroleum refining, ship building and repairing, and zinc refining. Also important were manufacturers of dairy products,qv bakery products, men's and women's clothing, plastics and resins, cement and ready-mix concrete, prefabricated metal buildings, oilfield machinery, and electronic components. Leading attractions in Nueces County include Padre Island National Seashore, Mustang Island State Park, the Texas State Aquarium, the Art Museum of South Texas, and the USS Lexington, a World War II aircraft carrier-museum in Corpus Christi Bay.
The county has twelve independent school districts including Agua Dulce Independent School District, Bishop Independent School District, Calallen Independent School District, Corpus Christi Independent School District, Driscoll Independent School District, London Independent School District, Port Aransas Independent School District, Robstown Independent School District, Tuloso-Midway Independent School District, Banquete Independent School District, Flour Bluff Independent School District and West Oso Independent School District.
1.2
Appraisal District Organization and StaffingThe appraisal district was formed in 1981 and became active in 1982. At the time of this review, Nueces CAD had a total of 62 full time staff with 12 supervisory positions and no part time positions. According to the chief appraiser, there are currently five clerical vacancies. Twenty-nine of the positions are full time appraisers. The district contracts with Thos. Y. Pickett for professional appraisal services on mineral, utility, and industrial appraisals.
Exhibit 1 shows the Nueces CAD organization.
Exhibit 1
Nueces County Appraisal District Organization
Board of Directors Eloy H. Salazar, Chairman Paul S. Grivich, Vice-Chairman Rudy Garza,Jr, Secretary Ramiro Canales Fred Greenberg Paul Altheide Anna M. Flores John Sendejar
Source: Nueces CAD, March 2005.
Note: Refer to Exhibit 4 for more information on who the board members represent and when they started with the CAD.Scope of Office
The Board of Directors has no authority to set values or appraisal methods. The chief appraiser carries out the appraisal district's legal duties, hires the staff, makes the appraisals and operates the appraisal office.
The district provides appraisal services for thirty taxing units: Nueces County, Agua Dulce Independent School District, Bishop Independent School District, Calallen Independent School District, Corpus Christi Independent School District, Driscoll Independent School District, London Independent School District, Port Aransas Independent School District, Robstown Independent School District, Tuloso-Midway Independent School District, Banquete Independent School District, Flour Bluff Independent School District and West Oso Independent School District, City of Agua Dulce, City of Bishop, City of Driscoll, City of Port Aransas, City of Corpus Christi, City of Robstown, Nueces County Drainage District #2, Nueces County Drainage District #3, Nueces County Hospital District, City of Corpus Christi Junior College District, Port of Corpus Christi Authority of Nueces County, Nueces County WCID #4, Nueces County WCID #5, Nueces County Fire Prevention District #1, Nueces County Fire Prevention District #2, Nueces County Fire Prevention District #3, and Nueces County Fire Prevention District #4, Nueces County Fire Prevention District #5.
Exhibit 2 presents the types of properties appraised by Nueces CAD in tax year 2003. In-house staff handles all property categories except Category G (minerals), Category J (utilities), and part of Category F2/L2 (industrial - real/personal), which is appraised by Thomas Y. Pickett. The CAD does not contract out the appraisal of cable television companies (Category J7). The 11 cable companies doing business in Nueces County are worked by in-house appraisers.
Exhibit 2
Nueces CAD Property by Category Summary with Assigned Responsibility
Tax Year 2003
Property Category Account Type Description Responsible for Appraisal Category A Residential In-House Staff Category B Multi-Family In-House Staff Category C Vacant Lots In-House Staff Category D/E Farm/Ranch Land w/Impr. In-House Staff Category F1 Commercial Real In-House Staff Category L1 Commercial Personal In-House Staff Category G Minerals Contract Appraisal Firm Category J Utilities Contract Appraisal Firm (J7 in-house) Category F2 Industrial Real In-house & Contract Appraisal Firm Category L2 Industrial Personal In-house & Contract Appraisal Firm Source: Nueces County Appraisal District, March 2005. Most appraisal districts contract out some of its appraisal to contract appraisal firms. PTD does not track parcel counts appraised by external appraisers in appraisal districts. Appraisal district contracts with external appraisers routinely do not include a parcel count for the number of appraisals an external appraisal company will perform. In assessing the staff to parcel count ratio in each appraisal district, PTD uses parcel counts reported in the district's 2003 appraisal district self report, Comptroller form 50-105, County-Report on Property Value, to calculate the parcels per appraisal district staff. The calculation does not include rural real land, since the majority of these properties are appraised by using a productivity schedule rather than an appraisal by parcel. PTD does include all of the commercial real and personal property parcels in the calculation, since PTD is unable to determine exactly how many parcels are assigned to in-house staff versus a contract appraisal firm. The total parcels appraised in-house are calculated by summing the total number of parcels reported in Categories: A, single family residential; B, multifamily residential; C, vacant lots; D, rural land; E, rural improvements; F1, commercial property; L1, personal property; M1, mobile homes; O, residential inventory; and S, special inventory, as shown in Exhibit 3 below.
PTD estimated that Nueces CAD staff are responsible for appraising about 143,292 parcels. The International Association of Assessing Officer (IAAO) Standards state that small taxing units run from 1,500 to 1,700 parcels per staff member and large taxing units run from 3,000 to 3,500 parcels per staff member with an average of 2,500.
Comparable districts in size to Nueces are Jefferson, Brazoria and Bell. The number of parcels per staff member for Nueces CAD was 2,139. Jefferson CAD was 3,093, Brazoria CAD was 3,615 and Bell was 2,605. Of course workloads in appraisal districts may vary, sometimes drastically, due to any number of considerations other than parcel count. Geography or the size of an appraisal district may have a significant impact on the time required to work all parcels. The types of properties may also have an impact. More complex commercial and sometime even residential properties may require more staff to appraise. The data given here is meant to give the reader at least some comparison to other appraisal districts with similar parcel counts.
Exhibit 3 includes reported data concerning CAD and state and group averages.
Exhibit 3
Reported Data On Parcels, Categories Staffing, Training and Operations
Comparison to State and Group Averages
General Information Nueces State Avg. Group Avg. Parcel Size Group (by number of locally appraised parcels) 75,000 - 149,999 Estimated # Locally Appraised Parcels 143,292 55,463 105,380 # Taxing Units 30 15 23 Locally Appraised Parcels to Staff 2,139 3,404 2,980 2003 Composition by Percentage of Value (Self Report): Residential Value 54.2% 52.6% 52.2% Non-Residential, Non Mineral 43.5% 43.6% 45.0% Non-Residential, Mineral 2.3% 3.7% 2.8% 2003 Composition by Account Category Type (Operations Survey): Real Property 134,782 45,804 88,673 Mineral Property 8,689 13,536 18,638 Business Personal Property 15,540 4,689 7,462 Individual Personal Property 2,509 1,342 2,501 Total Accounts 161,520 65,372 117,274 2003 Composition by Locally Appraised Parcel Category (Estimated from Self Report): Parcel Type # Parcels % of Parcels A 90,787 63.4% 44.1% 47.0% B 1,725 1.2% 1.0% 1.1% C 20,851 14.6% 13.1% 17.6% D 6,266 4.4% 24.7% 16.3% E 1,179 0.8% 4.5% 3.9% F1 7,056 4.9% 3.1% 3.5% L1 12,693 8.9% 5.7% 6.1% M1 2,508 1.8% 2.2% 2.7% O 0 0.0% 1.4% 1.7% S 227 0.2% 0.1% 0.1% Total 143,292 100.0% 100.0% 100.0% 2003 Budget $4,336,803 $1,079,695 $2,340,418 2003 Surplus $130,000 $71,620 $116,479 2003 Surplus as % of Budget 3.0% 6.6% 5.0% 2004 Budget $4,165,300 $1,104,961 $2,398,762 % Change in Budget -4.1% $0 2.5% 2004 Budget per Total Parcel $29.07 $17.41 $20.79 Staffing Full Time 67 18 39 Part Time * 2 2 Supervisory 12 3 7 Programmers * 2 2 Supervisory to Staff Ratio 1:6 1:5 1:6 Chief Appraiser Performs Appraisals? No 2004 Total Compensation $103,863 $53,564 $82,056 Appraisers Full - Time 29 8 13 Part - Time * 0 2 Salary Range: Low $25,000 $24,504 $24,534 High $26,472 $37,521 $51,026 Training Budget $21,500 $8,832 $15,546 # Registered with BTPE (1) 33 9 17 Types of BTPE Certification: RPA (2) RTA (3) RTC (4) All 21 0 0 0 General Information Nueces State Avg. Group Avg. Reappraisal Last Year of Reappraisal 2003 Next Year of Reappraisal 2004 Type of Appraisal: Complete Method of Appraisal: Protests 6,150 3,131 4,601 Protests per Parcel 3.8% 4.7% 4.0% Consolidated Collection No Collection Budget $0 Geographic Information System (GIS)? Yes Percent GIS Complete 85% 80% 89% Board of Directors Members 8 6 6 Tax Assessor Votes? Yes Elected Members 2 3 2 Note: An asterisk (*) is shown where data was not reported.
Source: Nueces CAD 2003 Self Report and Comptroller 2003-2004 Appraisal District Operations Report and Comptroller comparative data for state and group averages from district self reports and the Appraisal District Operations Report.
Notes (1) BTPE - Board of Professional Tax Examiners. (2) RPA - Registered Professional Appraiser.
(3) RTA - Registered Tax Assessor-Collector. (4) RTC - Registered Texas Collector1.3
Self Evaluation QuestionnaireIn preparation for the Appraisal Standards Review, Nueces CAD was requested to complete the IAAO's Self Evaluation Questionnaire. This instrument allows an appraisal district to assess their compliance with acceptable procedures, standards and organization. Each district receives an electronic version of the question and the complete IAAO manual explaining each question with information on how to answer each question. Each district undergoing an appraisal standards review is requested to perform the self assessment, with the goal of assisting the district in determining how well it is performing.
Nueces CAD answered 110 out of 110 questions. The district gave concise responses to each question rather than providing a simple yes or no answer. The majority of the responses were in the affirmative, with one not applicable. The district's gave careful consideration to each question and their answers are included in Appendix 15.
In Chapter 1, on legal issues and assessment cycles, the district noted that it has adequate staff to perform its duties.
In Chapter 2, on resource management, the district noted its office funding is sufficient, it runs a well organized and well managed operation, and the district stated its staff are quality conscious concerning their work.
Chapter 3, on computerization, and Chapter 4, mapping, the district answered all but one question in the affirmative, noting its geographic information system is integrated with its appraisal system, but only in the metropolitan areas of the county. And unlike many Texas appraisal districts, the district has a website.
In Chapter 5, data collection, the district noted it did not use hand held computers for data collection. The district noted it collects data in various ways, including an annual rental survey and office rental data collected during the appeals process.
Land Evaluation, Chapter 6, the district noted they use finished project cost of lots when applying a percentage complete as of January 1. In Chapters 7, 8, and 9, on residential property valuation, commercial property valuation, and sales data, respectively, the district uses extensive sales data to set values and that its market analysis staff are learning statistical modeling that the district plans to use in evaluating values.
In Chapter 10, on personal property assessment, the district uses are variety of methods to discover personal property, including canvassing of the county by appraisers, reviewing alcohol beverage license applications and renewals, reviewing police tow truck lists, and searching for ads in the local newspapers.
In Chapter 11, on assessment administration, the district administers assessment effectively. The district noted in Chapter 12, defense of values, that it obtained independent reviews when litigation is involved but otherwise did not use independent reviews.
In public relations, Chapter 13, the district has a taxpayer liaison officer who handles media press releases.
1.4
Findings of the Property Value Study and Summary WorksheetsThe Property Value Study (PVS) determines the total property value in each school district in the Nueces CAD. With a few notable exceptions, all CADs and the Property Tax Division (PTD) are required by law to appraise property at market value. Agricultural land and timberland are appraised according to productivity value. Market value, in short, is the price that a property would transfer from a willing seller to a willing buyer. For it to be a market transaction, neither party may be under duress to buy or sell, the sale must be on the market for a reasonable time and the parties to the sale are not related.
Local tax roll value, or local value, is determined by the county appraisal district and submitted to PTD on its annual self-report. The PTD staff estimates the total taxable value in a school district, referred to as state value, by determining market value or by accepting the local appraised value in each property category (see Exhibit 2) in the district and then adding these category values for an overall school district value. PTD then deducts state-mandated homestead exemptions, disabled veterans' exemptions, value limitations, reinvestment zones, freeport exemptions, the loss between market value and productivity value appraisal of qualified agricultural lands, the school tax ceiling for homeowners over age 65 or disabled and other state-mandated exemptions.
PTD issues a preliminary and final PVS each year. School districts and county appraisal districts may protest the findings of the preliminary PVS through an administrative hearings process with the Comptroller, and school districts may protest the findings of the final PVS in district court. The administrative hearings process requires the protester to file a written protest with supporting documentation within 40 days of the issuance of the preliminary PVS. The PTD may amend the findings of the preliminary PVS based on the submission of the written protest, an informal hearing or a formal hearing. Formal hearings are held by a hearings examiner, appointed by the Comptroller's General Counsel, and reporting directly to the Comptroller. The hearings examiner is not an employee of the PTD.
When conducting the property value study, PTD assigns properties to various categories, such as residential, commercial and rural property. Properties are divided into categories so that like properties are assessed together. PTD does not test all property categories in all school districts. Total value is the total value in the school district. Tested value is the value tested in the school district.
Nueces CAD did not appeal the findings of the preliminary study. Banquete ISD and Robstown ISD did not appeal the findings of the preliminary study. Flour Bluff ISD hired Ray, Wood & Bonilla, LLP to protest the findings of the study. Four Bluff ISD protested Categories A, C and F. In Category A, the district requested and received changes on 36 percent of the properties it requested changes on. Staff decisions favored the district 57 percent of the time in Category C and 100 percent in Category F. The district went to a formal hearing in May 2004.
Despite the changes, the Flour Bluff school district was unable to get into the confidence interval and was certified an eligible district in June 2004.
A review of the school districts in the county indicates that Nueces CAD is inconsistently appraising the single-family residence properties as determined by the PTD. In the 2003 PVS, Port Aransas, Robstown, Banquete, and Flour Bluff school districts fell outside the study's statistical margin of error. Single-family residences (category A) is the primary reason that the school's values are not within the acceptable range determined by the study.
There are five property categories tested in Port Aransas ISD: (1) category A, Single-Family Residences, making up 66.9 percent of the districts value with a weighted mean ratio of .9293; (2) category C, Vacant Lots, making up 7.6 percent of the districts value with a weighted mean ratio of .9793; (3) category D, Rural Real, making up 5.4 percent of the districts value with a weighted mean ratio of 1.0004; (4) category F1, Commercial Real, making up 7.5 percent of the districts value with a weighted mean ratio of .9793; and (5) category G, Minerals, making up 5.4 percent of the districts value with a weighted mean ratio of 1.013. In general, a ratio of between .95 and 1.05 in any property category makes it more likely that the district is appraising property within the margin of error, or that it is appraising property at or near market value, according to the PVS.
Port Aransas ISD's category A makes up 76 percent of the tested value. The appraisal district is placing a value on the category A single-family residences below their market value by a weighted mean ratio of .9293. The primary value range of under appraisal appears to be single-family residences between $50,000 and $200,000. The other tested categories in the school district are within the margin of error. The district under appraised the category A properties by almost $39,400,000. The low ratio in category A drops the district outside the margin of error causing the school district to be identified as eligible.
There are five property categories tested in Robstown ISD: (1) category A, Single-Family Residences, making up 50.8 percent of the districts value with a weighted mean ratio of .9198; (2) category D, Rural Real, making up 9.5 percent of the districts value with a weighted mean ratio of .9605; (3) category F1, Commercial Real, making up 12.6 percent of the districts value with a weighted mean ratio of .9233; (4) category J, Utilities, making up 8.9 percent of the districts value with a weighted mean ratio of .9348; and (5) category L1, Commercial Personal, making up 8.4 percent of the districts value with a weighted mean ratio of .9792.
Robstown ISD's category A makes up 59 percent of the tested value. The appraisal district is placing a value on the category A single-family residences below their market value by a weighted mean ratio of .9198. The primary value range of under appraisal appears to be single-family residences between $15,000 and $40,000. The district under appraised the category A properties by about $11,300,000. There are two other tested categories in the school district below the margin of error. Category F1, Commercial Real, makes up 12.6 percent of the tested value and received a weighted mean ratio of .9233 resulting in a difference of about $2,700,000. Category J, Utilities, makes up 8.9 percent of the tested value and received a weighted mean ratio of .9348 resulting in a loss of about $1,600,000. The low ratio in category A drops the district outside the margin of error causing the school district to be identified as eligible.
There are four property categories tested in Banquete ISD: (1) category A, Single-Family Residences, making up 32.4 percent of the districts value with a weighted mean ratio of .9291; (2) category D, Rural Real, making up 16.6 percent of the districts value with a weighted mean ratio of .955; (3) category G, Minerals, making up 28.9 percent of the districts value with a weighted mean ratio of .9461; and (4) category J, Utilities, making up 10.2 percent of the districts value with a weighted mean ratio of 1.0084.
Banquete ISD's category A makes up 38 percent of the tested value. The appraisal district is placing a value on the category A single-family residences below their market value as reflected by a weighted mean ratio of .9291. The primary value range of under appraisal appears to be single-family residences between $20,000 and $70,000. The district under appraised the category A properties by almost $4,500,000. Category G, Minerals, is also below their market value and makes up 36 percent of the tested value and received a weighted mean ratio just under the margin of error of .9461 resulting in a loss of almost $3,000,000. The low ratio in categories A and G drops the district outside the margin of error causing the school district to be identified as eligible.
There are four property categories tested in Flour Bluff ISD: (1) category A, Single-Family Residences, making up 74.3 percent of the districts value with a weighted mean ratio of .9203; (2) category C, Vacant Lots, making up 7.2 percent of the districts value with a weighted mean ratio of .8863; (3) category D, Rural Real, making up 1.5 percent of the districts value with a weighted mean ratio of .997; and (4) category F1, Commercial Real, making up 4.8 percent of the districts value with a weighted mean ratio of .9474.
Flour Bluff ISD's category A makes up 86 percent of the tested value. The appraisal district is placing a value on the category A single-family residences are below market value by a weighted mean ratio of .9203. The primary value range of under appraisal appears to be single-family residences between $65,000 and $250,000. The district under appraised the category A properties by $81,000,000. Category C, Vacant Lots, is below their market value and makes up 8 percent of the tested value and received a weighted mean ratio of error of .8863 resulting in a loss of about $11,600,000. Category F1, Commercial Real, is also below their market value and received a weighted mean ratio just under the margin of error at .9474 resulting in a loss of about $3,300,000. Again, the low ratio in category A drops the district outside the margin of error causing the school district to be identified as eligible.
Besides Port Aransas, Robstown, Banquete, and Flour Bluff ISDs, the other school districts in the county are Agua Dulce, Bishop, Calallen, Corpus Christi, Driscoll, London, Tuloso-Midway, and West Oso ISDs.
Agua Dulce ISD is within the confidence interval limit. Although category A tested outside the margin of error limits with a ratio of .925, it is only 18 percent of the school districts value. In category A, the single-family residences assessed below $75,000 and under appraised.
Bishop ISD is within the confidence interval limit. Category A is within the margin of error limits with a ratio of .9895, and represents 15 percent of the school districts value. Category D, Rural Real, is just below the margin of error with a ratio of .9483 and is only 8 percent of the school districts value.
Calallen ISD is just within the confidence interval limit. The category A properties tested outside the margin of error limits with a ratio of .9459. The single-family residences make up 73 percent of the tested value and 47 percent of the school districts value. The single-family residences in the value range of $46,308 to $80,334 are under valued at 90.38 percent of market value. This one group of properties resulted in a value loss of $13,000,000 in the school district.
Corpus Christi ISD is within the confidence interval limit. Category A is just within the margin of error limits with a ratio of .954, and represents 51 percent of the school districts value. The low ratio in the single-family residences resulted in a value loss of almost $225,000,000. Category F1, Commercial Real, is just below the margin of error with a ratio of .9352 and represents 16 percent of the school districts value. The low ratio in the commercial properties resulted in a value loss of almost $100,000,000.
Driscoll ISD is also within the confidence interval limit. The category A properties tested outside the margin of error limits with a ratio of .9084. The single-family residences make up 18 percent of the tested value and 12 percent of the school districts value. The single-family residences assessed below $70,000 are under valued. Category D, Rural Real also tested outside the margin of error limits with a ratio of .9384. The rural properties only represent 15 percent of the tested value and 10 percent of the school districts value.
London, Tuloso-Midway, and West Oso ISDs, are also within the confidence interval limit, and all categories of property tested within the margin of error limits.
In summary, the Nueces CAD needs to focus its energies on category A valuation of single-family residences. This is the major factor causing the PTD to assign Port Aransas, Robstown, Banquete, and Flour Bluff school districts an invalid value finding. The appraisal district needs to review their appraisal procedures and methodology primarily in the single-family residences to determine why it is under appraising this category of property. For a statistical explanation of why the district was selected as eligible, see Appendix 18.
