Appraisal Standards Review
Archer County Appraisal District Follow-Up Report
September 2007
Introduction
In July 2004, Holliday Independent School District (ISD) in Archer County was identified as one of 54 school districts in Texas meeting the criteria that initiate an appraisal standards review (ASR) of its county appraisal district (CAD). Holliday ISD is one of four school districts in the appraisal district. In January 2006, the Comptroller’s Property Tax Division (PTD) released the results of its ASR of Archer CAD.
The report made eight recommendations to improve Archer CAD’s appraisal practices and operations. ASRs are intended to determine why the local value is invalid and to recommend changes in operations and management that could improve appraisal practices. The Archer CAD review evaluated five functional areas: the board of directors; appraisal district policies, procedures and operations; information processing systems; staffing, personnel qualifications and positions; and generally accepted appraisal practices, equality and uniformity of appraisal standards.
At the time of the review, the challenges facing Archer CAD included managing district operations; documenting procedures and appraisal methods; and planning reappraisals.
Property Tax Code Section 5.102(d) requires that, if the appraisal district fails to comply with the ASR’s recommendations and the Comptroller finds the CAD board of directors 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 Government Code Section 403.302 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 is in compliance with the statute if it takes remedial action to implement the recommendations in the ASR. Remedial action means the CAD has corrected or intends to correct, remedy or improve the deficiencies identified in the ASR. Remedial action generally is demonstrated by having im-plemented or nearly completed most of the recommendations by the first year anniversary of the release of the report. The Comptroller recognizes 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 recommended actions, the Comptroller continues to work with the CAD to achieve full compliance. CADs that have completed all recommendations by the one year anniversary have met their statutory obligations and will not require additional monitoring.
PTD returned to Archer CAD in January 2007 to assess its progress in implementing the report recommendations. Seven recommendations are complete and one recommendation is in progress.
PTD sent the CAD’s board members surveys soliciting their views and comments on the ASR. Two of the board’s six members responded. In a number of instances, these respondents disagreed significantly on the value and usefulness of the ASR. Both agreed that the chief appraiser brought the recommendations before the board and kept the taxing units apprised of the progress of the CAD’s response to the ASR recommendations. One agreed and one disagreed that the ASR fairly portrayed exemplary programs and challenges facing the CAD; contained background information and suggestions useful to the appraisal district; and that the CAD’s business operations have improved since the release of the ASR.
Both board members disagreed that the board and taxing units have been supportive of the ASR recommendations; that the ASR provided focus and direction for the CAD; and that the board and administration are more aware of the challenges they face as a result of the ASR. One board member felt the consultants were professional and courteous during the review; but the other board member disagreed and stated that the reviewers were “incompatible” with one another and that one “had a chip on her shoulder.” One respondent stated the most difficult decision he faced as a board member as a result of the ASR was documenting CAD procedures, because he feared they may never be read.
The Comptroller takes this feedback seriously. At the time of the review, the Comptroller’s office discussed the problem associated with the consultant and, based on this feedback, made changes to the original ASR. The consultant was also removed from further work on the project. An expanded training and responsibilities plan has been created for all new consultants on ASR projects.
As noted in the original ASR, while the CAD has an experienced chief appraiser, it has struggled to hire and maintain an adequate staff. The chief appraiser noted, in the finding on employee evaluations, that employees had not been evaluated annually because “most have not lasted a year.” The district also struggled with higher parcel-to-staff ratios and lower salaries than in its peer districts, making it difficult to hire, train and retain employees. Documenting procedures is one means of guaranteeing that the staff can perform its duties consistently in a high-turnover environment.
History and Significant Events
Archer CAD received an ASR because the 2003 PVS found that Holliday ISD’s property values were invalid and that the school district was eligible for the “grace period” provided in Government Code, Section 403.3011. The Property Value Study (PVS) found that appraised values within Holliday ISD among Category A, Single-Family Residences, and Category D, Rural Real, fell outside the state’s acceptable value range.
Results of the 2004 and 2005 PVS show the CAD made steady progress in improving its appraisal practices, with all school districts in the CAD receiving valid findings. However, the results of the 2006 PVS show Holliday ISD to have invalid values in Category A, Single-Family Residences, and Category G, Oil, Gas, Minerals.
What Remains to Be Done
The Appendix lists PTD’s eight ASR recommendations and a summary of actions taken in response to date. Seven of the recommendations are complete, and one is in progress. PTD will continue to monitor the CAD’s progress toward full implementation to meet the state’s legal requirements. The following outlines specific steps the CAD still needs to take to comply. The Comptroller acknowledges the work the CAD has performed over the last year and encourages it to remain on task to implement all recommendations.
Recommendation 3: Revise all contracts to include detailed description of the work to be performed, deliverable dates and establish contractual provisions and procedures for monitoring contracts.
The CAD has updated its contract with a professional appraisal services firm to include dates and deliverables. All other contracts for professional appraisal services, online data processing and mapping were approved in September 2005, before the January 2006 release of the ASR. Each contract covers the two-year period of 2006 through 2007. These contracts do not contain dates for deliverables or monitoring provisions, and the contract for professional ap-praisal services does not contain a list of properties to be appraised.
The chief appraiser stated contracts for tax years 2008-09 will be updated in August 2007 and awarded in September 2007. All new contracts will follow the International Association of Assessing Officers’ (IAAO’s) Standard on Contracting for Assessment Services.
To complete this recommendation, the board should revise all contracts to include detailed descriptions of the work to be performed, deliverable dates and establish contractual provisions and procedures for monitoring contracts. Copies of the revised contracts and the CAD’s monitoring procedures should be mailed to PTD by October 2007.
Appendix
Archer County Appraisal District Appraisal Standards Review Implementation Status Report
2.1 Board of Directors
| Rec. # | Recommendation | Implementation Status | Date Completed or Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 1 | Expand the detail of the budget to include the benefits proposed for each position and a list of each proposed capital expenditure as required by Section 6.06 of the Tax Code and post notice of public hearing on the proposed budget as required by Section 6.062. |
Complete |
|
On June 21, 2005, the chief appraiser presented the board with the CAD’s proposed 2006 budget. The budget contained a list of all proposed positions, including salaries and related benefits for each position. The budget also contained descriptions for capital expenditures. On Sept. 1, 2005, the CAD published a notice of a public hearing on the proposed 2006 budget in the Archer County News. On Sept. 14, 2005, the board held a budget hearing for the proposed 2006 budget and approved the budget in the regular session that followed. |
| 2 |
Develop a job description and an objective set of evaluation measures for the chief appraiser position and establish an annual evaluation process based on objective measures. |
Complete |
In June 2006, the CAD amended its Archer County Appraisal District Personnel Policy Manual to include a policy on employee evaluations. In addition to annual staff evaluations, the policy states that the chief appraiser will receive an annual evaluation in December. The chief appraiser has a written job description and a performance evaluation form using a five-point rating scale developed several years ago by a former chief appraiser. The chief appraiser was not evaluated in December 2006 because of the board chairman’s absence. The evaluation was performed at the board’s March 2007 meeting. |
|
| 3 |
Revise all contracts to include detailed description of the work to be performed, deliverable dates and establish contractual provisions and procedures for monitoring contracts. |
In Progress | October 2007 |
This recommendation was issued in January 2006. The current contracts for professional appraisal services, data processing and mapping support were approved on Sept. 14, 2005 and cover the two-year period of 2006-07. The contracts do not include due dates for deliverables or monitoring provisions and the appraisal services contract does not include a list of property to be appraised. The chief appraiser stated contracts for appraisal services, data processing and mapping support for 2008 and 2009 will be awarded in September 2007. She stated all contracts will be required to comply with IAAO’s Standard on Contracting for Assessment Services. |
2.2 Appraisal District Policies, Procedures and Operations
| Rec. # | Recommendation | Implementation Status | Date Completed or Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 4 |
Develop a comprehensive written policy and procedures manual for administrative operations. |
Complete |
|
In June 2005, the chief appraiser developed written policies and procedures for accounts payable and receivable, payroll, bank reconciliations and purchasing. The documents were distributed to staff and the master copies are kept in the chief appraiser’s administrative manual. |
2.3 Information Processing Systems. The report had no findings or recommendations in this section.
2.4 Staffing, Personnel Qualifications and Positions
| Rec. # | Recommendation | Implementation Status | Date Completed or Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 5 |
Adopt a policy to be incorporated into the personnel manual providing for annual written employee performance evaluations for all employees of the appraisal district and develop written procedures for evaluating staff. |
Complete |
In June 2006, the CAD amended its Archer County Appraisal District Personnel Policy Manual to include a policy on employee evaluations. The policy states each employee will receive an evaluation in March of each year. Staff job descriptions and an employee evaluation form were revised in June 2005. The CAD has two staff members, an appraiser and an office/appraisal clerk. The chief appraiser evaluated both employees in March 2006, before amending the personnel manual. |
|
| 6 |
Conduct a staff needs analysis and establish staffing allocation guidelines that will ensure that the number and type of staffing is appropriate and annually adjusted to meet reappraisal plan goals each year. |
Complete |
The chief appraiser said staffing needs are reviewed each year during budget preparation and funds are appropriated as needed. While Archer CAD’s staff-to-parcel ratio may exceed IAAO recommendations and some peer district levels, the chief appraiser feels staffing is adequate since the CAD continues to meet its appraisal obligations in a timely manner. The 2006 and 2007 budgets contain appropriations for three full-time employees. The CAD’s reappraisal plan, which was approved on Sept. 6, 2006, states that the CAD will conduct a general reappraisal of all property every year using two full-time appraisers, and will allocate appraisal responsibilities among its staff. Contract appraisers appraise mineral and technical properties. |
2.5 Generally Accepted Appraisal Practices; Equality and Uniformity of Appraisal Standards
| Rec. # | Recommendation | Implementation Status | Date Completed or Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 7 |
Adopt a detailed reappraisal plan that, at a minimum, includes the vital steps in the process, explains exactly how and when the steps will be executed, and explains how sufficient resources will be allocated to follow the plan. |
Complete |
|
On Sept. 6, 2006, the Archer CAD board of directors approved the Archer County Appraisal District 2007-2008 Reappraisal Plan. The reappraisal plan calls for the CAD to conduct a general reappraisal of taxable properties every year and contains an explanation of appraisal activities for each type of property the CAD appraises. The plan includes a description of personnel and work responsibilities as well as technology, budget and data resources available to the CAD for completing annual reappraisals. The plan calls for the CAD to perform ratio studies to evaluate the effectiveness of the plan’s reappraisal performance, with the study results used to update and modify appraisal activities each year. Property Tax Code Section 25.18 requires the CAD to prepare a reappraisal plan every two years. |
| 8 |
Prepare and issue to each appraiser detailed appraisal procedures manuals that provide local procedures and practices for each type of property the staff appraises and tie these local procedures to the existing Marshall & Swift procedures. |
Complete |
The CAD’s appraisal manual was developed over several years and is updated annually. In January 2006, the manual’s residential cost schedules were updated and the pages were placed in ringed binders with plastic jackets for use in the field. Each appraiser has a copy of the manual. Archer CAD’s appraisal manual has written descriptions of various local property classifications, depreciation tables and building cost schedules. The building cost schedules are based on Marshall & Swift’s (M&S) cost tables, adjusted to reflect market conditions in Archer County. For example, in 2006, residential cost schedules for below-average-quality homes were reduced by 30 percent from M&S base schedules. Average-quality home cost schedules were adjusted by 25 percent, while cost schedules for above-average-quality homes were adjusted by 20 percent. Commercial and personal property represent a small percentage of Archer CAD’s appraised values, and sales information is virtually non-existent. The CAD relies on adjusted M&S cost schedules and neighboring counties for appraisal information. M&S provides detailed descriptions of commercial construction types and classification guides for commercial and personal property. Each appraiser has a copy of the CAD’s commercial and personal property schedules. Archer CAD’s reappraisal plan states that all appraisal schedules should be tested and revised annually to reflect current market conditions. |