Chapter 1
Overview of County Appraisal District
1.1
County History and Demographics
According to The Handbook of Texas Online, the Texas Legislature carved Bandera County out of portions of Bexar County on Jan. 25, 1856, and shortly thereafter, on March 10, 1856, the new county was formally organized. The county takes its name directly from the Spanish word for "flag."
Bandera County, surrounded by Bexar County on the east, Kerr and Kendall counties on the north, Real County on the west and Medina and Uvalde counties to the southern border, is located in southwest Texas. The city of Bandera, the county seat, is located at the intersection of State Highways 16 and 173 and lies approximately 25 miles northwest of San Antonio.
The watershed system of the western portion of Bandera County drains into the Sabinal River, and the Medina River drains the eastern portion. Along the many streams in the county grow cedar, post oak, Spanish oak, live oak, pecan and cypress trees. Alkaline but shallow topsoil covers limy subsoil throughout most of the county and supports a variety of grasses such as bluestems, buffalo, winter and wild ryes.
The 2004 county population, according to the Texas State Data Center, was 19,935.The city of Bandera has 1,016 residents. The unincorporated community of Lake Hills has 5,116 residents. The town of Medina has 3,592 residents. The county's remaining population resides in rural areas.
The county includes the Medina, Bandera and Utopia Independent School Districts.
1.2
Appraisal District Organization and Staffing
Formed in 1981, Bandera CAD became active in 1982. As of April 2006, Bandera CAD had nine full-time staff positions. Two of the positions are supervisory positions, and three are full-time appraisers.
Exhibit 1 presents the CAD's current organization structure.
The Bandera CAD board has no authority to set values or determine appraisal methods under Property Tax Code Section 6.05(a). The chief appraiser carries out the CAD's legal duties, hires its staff, makes appraisals and operates the appraisal office.
Bandera CAD provides for an Appraisal Review Board and an Agricultural Advisory Committee as part of its organizational structure (Exhibit 1). The chief appraiser supervises the deputy chief appraiser and a secretary/receptionist. The deputy chief appraiser oversees the work of three field appraisers, an abstractor, the GIS Operator and a receptionist/secretary to the ARB. Bandera CAD provides appraisal services for seven taxing units (Exhibit 2).
Exhibit 2
Bandera CAD Taxing Units
| Name of Taxing Entity |
|---|
| Bandera County |
| Medina Independent School District |
| City of Bandera |
| Bandera River Authority |
| Bandera Independent School District |
| Utopia Independent School District |
| Flying 'L' Ranch Public Utility District |
Source: Bandera CAD, 2006.
Most appraisal districts contract out some work to private firms. Bandera CAD appraises all categories of properties in-house with the exception of utilities, which it contracts with a vendor. PTD does not track appraisals performed by external appraisers because contracts with external appraisers generally do not include a parcel count for the number of appraisals performed. In assessing the staff-to-parcel count ratio in each appraisal district, PTD uses parcel counts reported in the CAD and the independent school districts' 2004 self-reports.
PTD includes commercial real and personal property parcels in the calculation, since it cannot determine the number of parcels assigned to in-house staff versus private firms. The total parcels appraised in-house are calculated by summing the total number of parcels reported in Category A, Single Family Residential; Category B, Multifamily Residential; Category C, Vacant Lots; Category D, Rural Land; Category E, Rural Improvements; Category F1, Commercial Property; Category L1, Personal Property; Category M1, Mobile Homes; Category O, Residential Inventory; and Category S, Special Inventory.
Exhibit 3 contains Bandera CAD parcel counts by categories of properties. It compares the CAD's data to the state and group averages. For analytical purposes, PTD groups appraisal districts according to the number of parcels. The Bandera CAD is included with appraisal districts that have 35,000 - 49,999 parcels.
Exhibit 3
Reported Data on Parcels and Categories:
Comparison to State and Group Averages
Parcel Size Group: 35,000 - 49,999
| Parcels and Categories | Bandera | State Average | Group Average |
|---|---|---|---|
| Estimated Number Locally Appraised Parcels | 35,380 | 49,497 | 41,134 |
| Number Taxing Units | 7 | 15 | 15 |
| Estimated Locally Appraised Parcels per Staff | 3,931 | 2,985 | 3,478 |
Composition by Percentage of Value (Self Report):
| Parcels and Categories | Bandera | State Average | Group Average |
|---|---|---|---|
| Residential Value | 45.5% | 51.3% | 37.9% |
| Non-Residential, Non Mineral | 54.5% | 45.0% | 54.0% |
| Non-Residential, Mineral | 0.0% | 3.7% | 8.1% |
Composition by Locally Appraised Parcel Category (Self Report):
| Parcel Type | Number of Bandera Parcels | Percent of Bandera Parcels | Percent of State Parcels | Percent of Group Parcels |
|---|---|---|---|---|
| A - Real Property: Single-Family Residential | 6,384 | 18.0% | 50.0% | 29.9% |
| B - Real Property: Multifamily Residential | 13 | 0.0% | 1.2% | 0.3% |
| C - Real Property: Vacant Lots and Tracts | 12,937 | 36.6% | 14.7% | 22.1% |
| D - Real Property: Acreage | 8,508 | 24.1% | 14.4% | 26.0% |
| E - Real Property: Farm and Ranch Improvements | 3,883 | 11.0% | 5.1% | 9.8% |
| F1 - Real Property: Commercial | 617 | 1.7% | 3.4% | 2.8% |
| L1 - Personal Property: Commercial | 868 | 2.5% | 6.8% | 4.2% |
| M1 - Mobile Homes and Other Tangible Personal Property | 1,005 | 2.8% | 2.5% | 3.1% |
| O - Real Property: Residential Inventory | 1,165 | 3.3% | 1.8% | 1.6% |
| S - Special Inventory | 0 | 0.0% | 0.1% | 0.1% |
| Total | 35,380 | 100.0% | 100.0% | 100.0% |
3 Totals may not add to 100.0%, due to rounding.
Source: Texas Comptroller of Public Accounts, Appraisal District Operations Report (2004 and 2005 Data), March 2006 and Appraisal District Self-Report of Value, 2004.
Sources: Appraisal District Operations Report (2004 and 2005 Data), March 2006 and Appraisal District Self Report of Value, 2004.
Exhibit 4 provides financial and staffing data for the Bandera CAD and shows how it fares with other appraisal districts throughout the state and in its group.
Exhibit 4
Reported Staffing and Training Data:
Comparison to State and Group Averages
Financial Information
| Financial Information | Bandera | State Average | Group Average |
|---|---|---|---|
| 2004 Budget | $437,741 | $1,108,158 | $690,977 |
| 2004 Surplus | $200,000 | $48,656 | $41,477 |
| 2004 Surplus as Percent of Budget | 45.7% | 4.4% | 6.0% |
| 2005 Budget | $439,414 | $1,150,302 | $712,193 |
| Percent Change in Budget | 0.4% | 3.8% | 3.1% |
| 2004 Budget per Total Parcel | $12.69 | $9.33 | $11.94 |
| 2004 Budget per PTD Estimated Locally Appraised Parcel | $12.37 | $22.30 | $16.80 |
Staffing
| Staffing - 2004 Budget | Bandera | State Average | Group Average |
|---|---|---|---|
| Full-time | 9 | 17 | 12 |
| Part-time | 0 | 1 | 1 |
| Supervisory | 2 | 3 | 3 |
| Programmers | 0 | 1 | 3 |
| Supervisory to Staff Ratio | 1:4.5 | 1:5 | 1:4.5 |
Chief Appraiser
| Chief Appraiser | Bandera | State Average | Group Average |
|---|---|---|---|
| Does Chief Appraiser Perform Appraisals? | Yes | ||
| 2004 Total Compensation - Actual | $50,852 | $52,557 | $58,186 |
Appraisers
| Appraisers - 2004 Budget | Bandera | State Average | Group Average |
|---|---|---|---|
| Full-time | 4 | 6 | 5 |
| Part-time | 0 | 0 | 0 |
| Salary Range: Low | $21,000 | $25,476 | $24,719 |
| Salary Range: High | $28,000 | $38,313 | $38,029 |
| 2004 Training Budget | $8,800 | $9,140 | $8,043 |
| Appraisers Registered with Board of Tax Professional Examiners | 5 | 8 | 6 |
Source: Texas Comptroller of Public Accounts, Appraisal District Operations Report (2004 and 2005 Data), March 2006.
Source: Appraisal District Operations Report (2004 and 2005 Data), March 2006.
Exhibit 5 provides operations information for the Bandera CAD, state and group.
Exhibit 5
Reported Operations Data: Comparison to State and Group Averages
Reappraisal
| Operations Information | Bandera | State Average | Group Average |
|---|---|---|---|
| Last Year of Reappraisal | 2004 | Not Applicable | Not Applicable |
| Next Year of Reappraisal | 2005 | Not Applicable | Not Applicable |
| Type of Reappraisal: | Other | Not Applicable | Not Applicable |
| Method of Reappraisal: | Combination | Not Applicable | Not Applicable |
Protests
| Operations Information | Bandera | State Average | Group Average |
|---|---|---|---|
| Protests (2004 tax year) | 1,356 | 3,164 | 803 |
| Protests per Estimated Locally Appraised Parcel1 | 4.0% | 6.0% | 0.0% |
Collections
| Operations Information | Bandera | State Average | Group Average |
|---|---|---|---|
| Consolidated Collection | No | Not Applicable | Not Applicable |
| Collection Budget | $78,881 | Not Applicable | Not Applicable |
Geographic Information System (GIS)
| Operations Information | Bandera | State Average | Group Average |
|---|---|---|---|
| Appraisal District Has or Plans to Purchase GIS? | Yes | Not Applicable | Not Applicable |
| Percent GIS Complete | 90.0% | 80.0% | 77.0% |
Board of Directors - 2004
| Operations Information | Bandera | State Average | Group Average |
|---|---|---|---|
| Members | 7 | 6 | 6 |
| Does the Tax Assessor vote? | No | Not Applicable | Not Applicable |
| Number of Elected Members | 1 | 3 | 0 |
Source: Texas Comptroller of Public Accounts, Appraisal District Operations Report (2004 and 2005 Data), March 2006.
Based on this comparison, the Bandera CAD appraised 3,931 parcels per full-time employee. The IAAO's Property Appraisal and Assessment Administration, Chapter 16, Staffing Patterns, states that the ratio of parcels per full-time employees for a small appraisal district is between 1,500 and 1,700. For a large appraising entity, these numbers are between 3,000 and 3,500.
Workloads in appraisal districts can vary due to any number of considerations other than parcel count. The geographic size of an appraisal district, for instance, may have an impact on the time required to work all parcels, as can the types of properties involved. Complex commercial and some residential properties may require more staff work to appraise. The data given here give the reader some basis for comparison with other appraisal districts with similar parcel counts.
1.3
Self Evaluation Questionnaire
In preparation for this ASR, the Bandera CAD completed IAAO's Self Evaluation Questionnaire, which asks the CAD to assess its compliance with acceptable procedures, standards and organization. The CAD received an electronic version of the questionnaire and an IAAO manual that explains questions and how to answer them. PTD asks each appraisal district undergoing an ASR to perform the self-assessment.
The Bandera CAD answered most of the 111 questions, providing concise responses when necessary. A summary of the self-assessment follows.
In responding to the self-assessment, the CAD pointed to certain strengths. These are some of the identified strengths:
- diligence in obtaining documents indicating qualification for tax relief, such as identification, letters of disability from the applicable agency, and affidavits of use and other available means;
- invaluable mapping system used in assigning properties to the correct taxing jurisdiction;
- encouragement of owners and taxpayers to discuss concerns and complaints with the assessment office before lodging a formal appeal; and
- capability to create reports specific to the CAD's needs.
The CAD also indicated some areas of concern:
- lacking the size, resources and fiscal capacity to perform the assessment functions effectively and efficiently;
- trying to retain trained staff; and
- competing with neighboring appraisal districts on salaries and benefits.
In Chapter 1, on legal issues and assessment cycles, the CAD indicated its understanding and current compliance with legal issues but stated that it lacks the size, resources and fiscal capacity to effectively perform the assessment function.
In Chapter 2, on resources and management, the CAD indicated that it lacks sufficient resources but said it adequately manages what it has.
In Chapter 3, on computerization, the CAD indicated it has sufficient computer capabilities to meet required activities.
In Chapter 4, on mapping, the CAD indicated it has sufficient mapping capabilities to meet required activities, with the exception of noting parcel splits and combinations on maps within one month of a deed's recordation.
In Chapter 5, on data collection, the CAD indicated that it has ample data collection resources, but it indicated that it is considering appraising some properties using the income approach, an approach it has not used in the past.
In Chapter 6, on land valuation, the CAD indicated efficiency in all but one area. It does not use the cost-of-development method in the appraisal of large tracts of land awaiting development.
In Chapter 7, on residential property valuation, the CAD indicated that it has sufficient resources and performs adequately in all areas, except that it only partially bases depreciation schedules on sales analysis.
In Chapter 8, on commercial property valuation, the CAD indicated that the assessment office does not use the income approach to appraise business properties. It does not make a comprehensive effort to collect local income and expense data, and it does not use available sales to help derive capitalization rates and income multipliers to help calibrate depreciation schedules, to develop benchmark per-unit values or build market models.
In Chapter 9, on sales data, ratio studies and stratification, the CAD indicated it has sufficient resources and performs adequately in all areas, except that the assessment office has not stratified residential properties by market area and sub-area (neighborhood).
In Chapter 10, on personal property assessment, the CAD indicated it has sufficient resources and performs adequately in only one-half of the areas. The assessment office coordination of real and personal property field inspections to ensure identification and proper classification of the fixtures, trade fixtures and leasehold improvement needs attention. Also, due to staff limitations, the assessment office does not audit all returns and inspect businesses to ensure complete and accurate reporting; does not employ all appropriate approaches to value in appraising personal property; does not maintain separate cost trend and depreciation indexes for each class of personal property; and does not use the income approach to value leased equipment.
In Chapter 11, on assessment administration, the CAD indicated that it has sufficient resources and performs adequately in all areas.
In Chapter 12, on defense of values, the CAD indicated it has sufficient resources and performs adequately in all areas.
In Chapter 13, on public relations, the CAD indicated that it has sufficient resources and performs adequately in all areas. The CAD indicated that it is not required to submit information to a regulatory body for approval.
1.4
Findings of the Property Value Study (PVS)
The PVS determines the total property value in each school district in the Bandera CAD. With a few notable exceptions, the law requires all CADs and PTD to appraise property at market value according to Government Code Section 403.302 and Property Tax Code Section 23.01. Productivity value is the basis for appraising agricultural land and timberland. Market value, in short, is the price for which a property would sell under normal conditions, as defined by Property Tax Code Section 1.04(7).
The CAD determines local tax roll value, or local value, and submits it to PTD by the CAD and each school district on their annual self-reports. 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 in the school district, then adding these category values for an overall school district value. PTD then deducts 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 CADs may protest the findings of the preliminary PVS through an informal administrative hearings process. School districts may also 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. PTD may amend the findings of the preliminary PVS based on the submission of the written protest, an informal hearing or a formal hearing. A hearings examiner, who is appointed by the Comptroller's General Counsel, who reports directly to the Comptroller, holds formal hearings. The hearings examiner is not an employee of PTD.
When conducting the PVS, PTD assigns properties to various categories, such as residential, commercial and rural property. PTD divides properties into categories in order to appraise like properties together.
Bandera CAD and Bandera Independent School District (ISD) appealed the findings of the preliminary 2004 PVS. In July 2005, the final PVS declared Bandera ISD an eligible school district because it fell outside of the statistical margin of error. In general, a ratio of between 0.95 and 1.05 in any property category makes it more likely that the CAD is appraising property within the margin of error, or that it is appraising property at or near market value, according to the PVS.
A review of the school districts in the county indicates that the Bandera CAD Single-Family Residential (Category A) and Rural Real Property (Category D) are the primary reasons that the school district's values are not within the acceptable range determined by the study.
Eligible School District
PTD tested four property categories in Bandera ISD: Category A, Real Property: Single-Family Residential; Category C, Real Property: Vacant Lots and Tracts; Category D, Real Property: Acreage (D1 and D2); and Category F1, Real Property: Commercial.
Category A had 50.8 percent of the tested value and makes up 47.1 percent of the school district's value. A review of the Category A sample properties indicates that the CAD appraised from as low as 48 percent to a high of 137 percent of market value with a weighted mean ratio of 0.9366.
Vacant lots are 8.7 percent of the school district's sampled value and tested with a weighted mean ratio of 0.9773. The CAD appraised vacant lots from as low as 48 percent to a high of 274 percent of market value.
Category D has 28.8 percent of the school district's value and has a weighted mean ratio of 0.8761. Category D represents rural properties and contains two subcategories D1 and D2. Subcategory D1, Real Property: Qualified Agricultural Land is primarily farm and ranch land that qualifies for the special productivity appraisal. Subcategory D2, Real Property: Non-Qualified Land is primarily rural homes and land that does not qualify for farming or ranching or timberlands. The differences in value between qualified and non-qualified rural land are often wide since the CAD appraises D1 land using a special statutory method to determine the land's productivity value and appraises D2 on what the land would sell for in an open market transaction. Subcategory D1 consists of 4 percent of Category D's value and 1.32 percent of the tested value. D1, primarily in native pastureland, tested with a weighted mean ratio of 1.0542. Subcategory D2, however, makes up 96 percent of Category D's value and 31.4 percent of the school district's total tested value. The CAD appraised sampled rural homes from as low as 55 percent to a high of 141 percent of market value with a weighted mean ratio of 0.8699.
Category F1 properties are 6.6 percent of the school district's value and tested with a weighted mean ratio of 0.9760. The CAD valued sampled commercial real property from as low as 85 percent to a high of 117 percent of market value.
Other School Districts
Medina ISD is within the limits of the confidence interval. There are two property categories tested in Medina ISD: Category A, Real Property: Single-Family Residential and Category D, Real Property: Acreage.
Category A has 15.2 percent of the tested value and makes up 14.5 percent of the school district's value. A review of the Category A sampled properties indicates that the CAD appraised from as low as 86 percent to a high of 110 percent of market value with a weighted mean ratio of 0.9565. Category D, Real Property: Acreage has 76.9 percent of the school district's value and has a weighted mean ratio of 0.9475.
Subcategory D1 consists of 9.5 percent of Category D's value and 8.1 percent of the tested value. D1 tested with a weighted mean ratio of 0.9576. Subcategory D2, however, makes up 90.5 percent of Category D's value and 76.7 percent of the school district's tested value. The CAD appraised sampled rural homes on average over a range from as low as 69 percent to as high as 120 percent of market value, with a weighted mean ratio of 0.9464.
Utopia ISD fell between the confidence interval limits. The PVS tested the same two property categories in Utopia ISD as it did in Medina.
Category A has 16 percent of the tested value and makes up 14.1 percent of the school district's value. A review of the Category A sampled properties indicates that the CAD appraised sampled properties from as low as 74 percent to as high as 120 percent of market value, with a weighted mean ratio of 0.9691 in this category. Category D, Real Property: Acreage has 74.3 percent of the school district's value and has a weighted mean ratio of 0.9595. Subcategory D1 consists of 14.4 percent of Category D's value and 12.1 percent of the tested value. D1 tested with a weighted mean ratio of 0.9402. Subcategory D2, however, makes up 85.6 percent of the Category D value and 71.9 percent of the school district's total tested value. The CAD appraised sampled rural homes on average over a range from as low as 78 percent to as high as 108 percent of market value with a weighted mean ratio of 0.9628.
Bandera CAD Summary
The CAD appraises sampled single-family residences from as low as 48 percent to as high as 137 percent of market value and the sampled rural residential (Category D2) from as low as 55 percent to as high as 141 percent of market value. Combined, the single-family and rural residences represent 76 percent of Bandera CAD's property value.
The sampled vacant lot values (Category C) in the Bandera CAD range from 48 percent to 274 percent of market value.
Coefficient of Dispersion
The coefficient of dispersion (COD), the primary measure of appraisal uniformity, measures the average percentage by which individual ratios vary from the median ratio. According to IAAO in Property Appraisal and Assessment Administration, a low COD indicates that appraisals within a category of property are uniform and a high COD indicates the CAD appraises properties at inconsistent percentages of market value.
IAAO recommends in the Standard on Ratio Studies, Category A, Real Property: Single-Family Residential should generally be 15.0 or less and for new and homogenous areas, 10.0 or less, for Category C, Real Property: Vacant Lots and Tracts, the COD should be 20 or less and for income producing properties the COD should be 20.0 or less. For other real property and personal property, CODs should reflect the nature of the properties, market conditions and the availability of reliable market indicators.
The 2004 COD for Bandera ISD for single residential properties was 4.51, which is extremely rare and can be indicative of sales chasing. Sales chasing is the practice of using the sale of a property to trigger a change in appraised value of that property to (or near) the property's selling price. In contrast, the appraised value of unsold property is not changed. The practice of sales chasing may cause invalid findings in the PVS, since sold properties will have a ratio close to 1.00.
For vacant lots and tracts the COD was 21.59 and for farm and ranch land with improvements, the COD for Bandera ISD was 16.82. These numbers would indicate some lack of uniformity in appraisal for these categories.