Chapter 1
Overview of County Appraisal District
1.1
County History and Demographics
According to The Handbook of Texas, the Texas Legislature created Concho County in 1858 and it organized 21 years later, in 1879. The county took its name, which is Spanish for "shell," from the Concho River, so named because of the large number of freshwater mollusks found in that waterway.
Concho County, located in north Central Texas, is encircled by the counties of Tom Green to the west; Runnells on the north; Coleman and McCulloch on the east; and Menard to the south. The county is about 30 miles east of San Angelo and 150 miles northwest of Austin. Paint Rock, located on U.S. Highway 83, is the county seat.
The county's terrain is mostly rolling land in its north, with some steep slopes and benches. The vegetation in the northern region includes grasses, oak, juniper and mesquite. The Edwards Plateau dominates the southern part of Concho County. It is mostly flat with a number of deep creek beds crisscrossing the terrain. Oak, juniper and mesquite dominate the plateau's vegetation. Two major rivers, the Concho and Colorado, and a number of creeks drain the county.
Concho County is one of Texas' leading sheep-producing counties; more than 90 percent of its land is farmland.
According to the Texas State Data Center, the county had 3,883 residents in 2005, most of them living in the city of Eden, which had 2,479 residents. Another 315 persons made their home in the city of Paint Rock; the county's remaining population resides on farms, ranches and in other unincorporated areas.
The county includes the Eden Consolidated, Brady and Paint Rock Independent School Districts (ISDs).
1.2
Appraisal District Organization and Staffing
Concho CAD was formed in 1981 and became active in 1982. As of December 2006, Concho CAD has a total of four full-time staff positions, with one supervisory position and no part-time employees. None of the positions are full-time appraisers. Concho CAD contracts with Lisco Appraisal Services (LAS) and Capitol Appraisal Group Inc. (CAG) for professional appraisal services.
Exhibit 1 presents Concho CAD's current organization chart. The chief appraiser reports directly to the board of directors. The office manager reports to the chief appraiser, while the bookkeeping and collections positions report to the office manager. The chief appraiser also manages the outside appraisal consultant.
The Concho CAD board of directors 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, performs appraisals and operates the appraisal office.
Concho CAD provides appraisal services for nine taxing units (Exhibit 2).
Exhibit 2
Concho CAD Taxing Units
| Concho County |
|---|
| Paint Rock Independent School District |
| City of Paint Rock |
| Concho County Hospital District |
| Eden Consolidated Independent School District |
| City of Eden |
| Lipan-Kickapoo WD |
| Hickory Underground Water Conservation District #1 |
| Concho County Lateral Road |
Source: Concho CAD 2006.
PTD uses parcel counts reported in the appraisal district's 2005 self-report and school district self-reports to calculate parcels per employee. PTD does not track appraisals performed by external appraisers.
PTD includes commercial real and personal property parcels in its calculation of appraisal workloads, since it cannot determine how many parcels the CAD assigns to the in-house staff versus contracted firms. PTD determined the number of parcels appraised by CAD staff by adding the number of parcels reported in Categories A, Single-Family Residential; B, Multifamily Residential; C, Vacant Lots and Tracts; D1, Qualified Agricultural Land; D2, Non-qualified Land; E, Farm and Ranch Improvements; F1, Commercial Real Property; L1, Commercial Personal Property; M1, Mobile Homes; O, Residential Inventory; and S, Special Inventory.
Exhibit 3 compares Concho CAD parcel counts by property category to the state and group averages. For analytical purposes, PTD groups appraisal districts according to the number of parcels they appraise; Concho CAD is included with appraisal districts that have 5,000 - 9,999 parcels.
Based on this comparison, Concho CAD appraised 1,700 parcels-per-full-time employee–but this number is misleading. The parcel-per-staff calculations are based on information the CAD provided on its 2006 staffing levels; however, the information provided has since changed. When the data was submitted, the CAD had four employees; it now has three, making the calculation 2,399 parcels-per-staff. Since the CAD has contracted for private appraisals of a third of its properties through Lisco Appraisal Service, the category for estimated local parcels per staff count does not accurately reflect the number of parcels per staff member. The chief appraiser indicated that the CAD's staff appraises any new properties, business personal property and any requested reappraisals not assigned under the contract with Lisco Appraisal Service. Capitol Appraisal Group Inc. is contracted for the appraisal of oil and gas, wells, public utilities, telephone companies, pipelines, railroad systems, television and broadcast towers and other items. Lisco Appraisal Service appraises about a third of the CAD's properties. CAD staff members appraise any new properties, business personal property and any requested reappraisals not assigned under the contract with Lisco Appraisal Service.
Exhibit 3
Reported Data on Parcels and Categories;
Comparisons of State and Group Averages
Parcel Size Group (by number of locally appraised parcels): 5,000 - 9,999
| Parcels and Categories | Concho |
State Average |
Group Average |
|---|---|---|---|
| Estimated Number Locally Appraised Parcels | 7,197 | 51,112 | 7,195 |
| Number Taxing Units | 8 | 15 | 7 |
| Estimated Local Parcels per Staff | 1,799 | 2,971 | 2,261 |
Composition by Percentage of Value (Self Report)
| Parcels and Categories | Concho |
State Average |
Group Average |
|---|---|---|---|
| Residential Value | 12% | 47% | 11% |
| Non-Residential, Non-Mineral | 6% | 4% | 36% |
| Non-Residential, Mineral | 82% | 48% | 52% |
Composition by Locally Appraised Parcel Category (Self Report)
| Parcels and Categories Parcel Type | Concho Number of Parcels | Concho Percent of Parcels |
State Average |
Group Average |
|---|---|---|---|---|
| A - Residential | 1,029 | 14% | 50% | 24% |
| B - Multi-Family | 0 | 0% | 1% | 0% |
| C - Vacant Lots | 1,042 | 14% | 14% | 11% |
| D - Agricultural | 3,261 | 45% | 14% | 43% |
| E - Farm and Ranch Improvement | 1,397 | 19% | 5% | 12% |
| F1 - Commercial Real | 206 | 3% | 3% | 4% |
| L1 - Commercial Personal | 202 | 3% | 7% | 4% |
| M1 - Mobile Homes | 59 | 1% | 3% | 2% |
| O - Residential Inventory | 0 | 0% | 2% | 0% |
| S - Special Inventory | 1 | 0% | 0% | 0% |
| Total | 7,197 | 100% | 100% | 100% |
Parcel per staff calculations are based on 2006 staff totals provided by Concho CAD.
State and group averages calculated by the Property Tax Division.
Sum of data reported in ISD Self Reports of Value in the CAD.
Totals may not add to 100% due to rounding.
Source: Texas Comptroller of Public Accounts, Appraisal District Operations Report (2054 and 2006 Data), September2006; and Appraisal District Self Report of Value, 2005.
Exhibit 4 compares Concho CAD's financial and staffing data with those group and state averages.
Exhibit 4
Reported Budget, Staffing and Training Data
Versus State and Group Averages
Financial Information
| Financial and Staffing Information | Concho |
State Average |
Group Average |
|---|---|---|---|
| 2005 Budget | $214,780 | $1,144,025 | $165,597 |
| 2005 Surplus | $2,782 | $95,915 | $15,776 |
| 2005 Surplus as a Percent of Budget | 1% | 8% | 10% |
| 2006 Budget | $212,100 | $1,200,084 | $170,755 |
| Percent Change in Budget | -1% | 5% | 3% |
| 2005 Budget per Total Parcel | $28.85 | $21.96 | $20.92 |
| 2005 Budget per PTD Estimated Locally Appraised Parcel | $29.84 | $22.38 | $23.02 |
Staffing - 2005 Budget
| Financial and Staffing Information | Concho |
State Average |
Group Average |
|---|---|---|---|
| Full Time Equivalent (FTE) Employees | 4 | 17.20 | 3.18 |
| Supervisory (includes chief appraiser) | 2 | 3.33 | 1.18 |
| Supervisor to Staff Ratio | 1:2 | 1:6 | 1:3 |
Chief Appraiser
| Financial and Staffing Information | Concho | State Average | Group Average |
|---|---|---|---|
| Performs Appraisals? | Yes | Not Applicable | Not Applicable |
| 2005 Compensation (excluding benefits) | $41,200 | $52,766 | $35,013 |
Appraisers - 2005 Budget
| Financial and Staffing Information | Concho | State Average | Group Average |
|---|---|---|---|
| Appraiser Full-Time-Equivalent (FTE) Employees | 1 | 6.42 | 0.96 |
| Salary Range Low | $32,570 | $25,687 | $24,130 |
| Salary Range High | $32,570 | $39,505 | $27,288 |
| Training Budget | $2,500 | $9,267 | $3,613 |
| Number Registered with Board of Professional Tax Examiners (BTPE) | 3 | 9 | 3 |
Staff information is based on 2006 staff totals provided by Concho CAD. The CAD currently has three employees of whom one is in supervisory capacity.
State and group averages calculated by the Property Tax Division.
Source: Texas Comptroller of Public Accounts, Appraisal District Operations Report (2005 and 2006 Data), September 2006.
Exhibit 5 compares operations information for Concho CAD with state and group averages.
Exhibit 5
Other Reported Data Versus State and Group Averages
Reappraisal
| Operations Information | Concho |
|---|---|
| Last Year of Reappraisal | 2004 |
| Next Year of Reappraisal | Not Determined |
| Type of Reappraisal | Cyclical |
Protests
| Operations Information | Concho | State Average | Group Average |
|---|---|---|---|
| Protests (2005 tax year) | 13 | 3,435 | 66 |
| Protests per Estimated Locally Appraised Parcel | 0.00 | 0.07 | 0.02 |
Collections
| Operations Information | Concho |
|---|---|
| Consolidated Collection | Yes |
| Collection Budget | $38,400 |
Geographic Information System (GIS)
| Operations Information | Concho | State Average | Group Average |
|---|---|---|---|
| District Has or Plans to Purchase GIS? | Yes | ||
| Percent GIS Complete | 0% | 50% | 26% |
State and group averages calculated by the Property Tax Division.
Source: Texas Comptroller of Public Accounts, Appraisal District Operations Report (2005 and 2006 data), September 2006.
According to the International Association of Assessing Officers (IAAO), in its Property Appraisal and Assessment Administration, Chapter 16, Elements of Administration, Staffing Patterns and the Effect of Computers, the ratio of parcels per full-time employees for a small appraisal district should be between 1,500 and 1,700. For a large appraising entity, these numbers should be between 3,000 and 3,500. It is difficult to compare Concho CAD, given the amount of outside contract appraisal work performed.
It should be noted that appraisal district workloads can vary due to considerations other than parcel count. The geographic size of an appraisal district, for instance, can affect the time required to work all parcels, as can the types of properties involved. Complex commercial properties and some residential properties may require more staff work to appraise. The data given here is meant only to provide the reader with some basis for comparison with other appraisal districts with similar parcel counts.
1.3
Self Evaluation Questionnaire
In preparation for this performance audit, the Concho CAD was asked to complete the IAAO's Self Evaluation Questionnaire, which asks it to assess its compliance with acceptable procedures, standards and organization. The CAD received an electronic version of the questionnaire and a manual that explained the questions and how to answer them.
The Concho CAD answered all 111 questions, providing specific and concise responses where asked. In responding to the self-assessment, Concho CAD pointed to its integrated appraisal and GIS computer software as a strong point. The CAD also said that it lacks the resources, specifically the personnel, to carry out its functions effectively and efficiently. A summary of the self-assessment follows.
In Chapter 1, which discusses legal issues and assessment cycles, the CAD indicated that it understands the legal framework, value standard and assessment cycles required to appraise property in Texas. Management and staff attend seminars each year to stay current with new laws and court decisions. In addition, professional organizations and the CAD's law firm provide current information on tax legislation and case law. The CAD uses the Internet to obtain current data on property tax issues. It indicated that it does not have the resources it needs to perform its responsibilities effectively and efficiently, resulting in tardy notices and certification.
In Chapter 2, dealing with resources and management, the CAD stated that it conducts planning semiannually, primarily through the budget process. The CAD includes all resources in the annual budget. Concho CAD indicated that taxing entities denied full funding for the budget because values were not certified in the time required by statute. It said that it has adequate space for its staff, although the top floor of the building the CAD occupies is shared with Concho County and a bank. The CAD also indicated that its salaries are comparable to other CADs of similar size.
In Chapter 3, on computerization, Concho CAD indicated that its current system meets its needs. It provides for multiyear processing; has adequate mechanisms for data security and integrity; and works in concert with the CAD's geographic information system (GIS). The CAD also indicated that its appraisal system manages photos and document images and can maintain a Web site, although the CAD does not currently operate one.
In Chapter 4, regarding mapping, Concho CAD indicated that it is in the second year of a four to six-year computerized mapping project to establish a uniform set of electronic maps. The CAD indicated that it also maintains a hard-copy mapping system. It plans to integrate the completed computerized mapping system with the mapping systems for the city, county and school district entities in a cooperative effort to fill public and governmental needs.
In Chapter 5, which covers data collection, the CAD indicated that it collects and uses all relevant data in the assessment process; physically inspects property; and does not collect building and occupancy permits, but receives copies of utility connections, changes and transfers. It also indicated that it has computerized edit checks; collects income data on commercial property; contracts for appraisals of industrial properties; and does not use handheld computers in the field.
In Chapter 6, on land valuation, the CAD indicated that it receives and confirms land sales through multiple sources. It stratifies land by use and location, and analyzes sales in terms of value per unit. The CAD indicated that it has mostly rural areas, where highway frontage is the determining factor in value. Allocation is used when vacant land sales are not available.
In Chapter 7, concerning the valuation of residential property, the CAD uses market analysis. It receives cost schedules from Marshall and Swift and compares them with limited local new construction. According to the chief appraiser, the CAD does not perform ratio studies as routinely as it should in the valuation process. Cost schedules are fully computerized and depreciation tables are basic age-life models with effective age and outside influence adjustments.
In Chapter 8, concerning commercial property, the CAD bases its valuation on all three approaches. It makes every effort to collect income and expense data, but receives few responses to its requests for information. The CAD further stated that "insufficient sales are available to develop business property categories, but are used to check the tables and schedules for accuracy and adjustments as necessary." The CAD observes the property's physical condition at time of inspection and notes functional and economic obsolescence during the review process.
In Chapter 9, which deals with sales data, ratio studies and stratification, the CAD stated that "sales are verified through comptrollers' letters, information gathered from buyers and sellers as well as deed records." The CAD indicated that the ratio studies are a primary component of its reappraisal plan and that it most commonly stratifies by school district, class, area and influence categories. When the GIS is completed, the CAD will be able to produce maps with plotted sales information.
In Chapter 10, dealing with personal property assessment, Concho CAD stated that it discovers personal property through physical inspection, renditions, written and verbal media, bills of sale and word of mouth. The CAD sends annual renditions and notices to every personal property account, using state-recommended forms, and assesses penalties on those that fail to render. The CAD uses the cost approach to value leased equipment.
In Chapter 11, regarding assessment administration, the CAD indicated that it updates ownership and legal descriptions until just before tax statements are calculated. Eligibility for exemptions and other tax relief is verified, and address changes, obituaries, voter registrations and drivers licenses also are checked as appropriate. It notifies taxpayers by mail of any changes, and stores assessment rolls electronically, printing them upon request.
In Chapter 12, regarding defense of values, the CAD indicated that it encourages communication with taxpayers to resolve appeals. The CAD forwards appeals to the appraisal review board when resolution is unsuccessful, and uses software to track protests through the appeals process.
In Chapter 13, concerning public relations efforts, the CAD stated that it publishes quarter-page notices for exemptions and renditions. Comptroller publications, mailouts and newspaper notices are used to provide taxpayers with information about property values and their rights and responsibilities. The CAD instructs employees to provide taxpayers with all allowable public information. It is in the process of developing a Web site.
1.4
Findings of the Property Value Study and Summary Worksheets
The PVS determines the total property value in each school district in Concho CAD. With a few notable exceptions, the law requires all CADs and PTD to appraise property at market value as defined in Government Code Section 403.302 and Property Tax Code Section 23.01. (Agricultural lands and timberland are appraised according to productivity value.)
The CAD determines the local tax roll value, or local value, and submits it to PTD in its annual self-report. PTD staff estimates the total taxable value in a school district, called the state value, by determining market value or by accepting the local appraised value in each property category, 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 disabled homeowners and those over age 65; and other state-mandated exemptions.
When conducting the property value study, PTD assigns properties to various categories, such as residential, commercial and rural property, so it can appraise like properties together.
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 in other words, that it is appraising property at or near market value.
PTD issues a preliminary and final PVS each year. School districts and CADs may protest the findings of the preliminary PVS through an informal conference and an administrative hearing. 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 conference or a formal hearing. A hearings examiner appointed by the Comptroller's general counsel holds formal hearings. The hearings examiner is not a PTD employee. School districts may protest the findings of the final PVS in district court.
2005 Concho CAD Summary
In 2005, Concho CAD's overall median ratio was 0.96.
- In Category A, Single-Family Residential, the sample ratios ranged from 0.44 to 2.03, with a median ratio of 0.97;
- In Category C, Vacant Lots, the sample ratios ranged from 0.74 to 1.02, with a median ratio of 0.89;
- In Category D2, Non-qualified Land, the sample ratios ranged from 0.44 to 1.28, with a median ratio of 0.94;
- In Category F1, Commercial Real Property, the sample ratios ranged from 0.79 to 1.35, with a median ratio of 0.98;
- In Category G1, Oil, Gas & Minerals, the sample ratios ranged from 0.85 to 1.49, with a median ratio of 1.01; and
- In Category J, Utilities, the sample ratios ranged from 1.00 to 1.09, with a median ratio of 1.02.
2005 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's Property Appraisal and Assessment Administration, a low COD indicates that appraisals within a category of property are uniform, while a high COD indicates properties are being appraised at inconsistent percentages of market value. According to IAAO's Standard on Ratio Studies, the COD for Category A, Single-Family Residences, generally should be 15 or less, and for new and fairly homogeneous areas, 10 or less. For Category C, Vacant Lots, the COD should be 20 or less, and for income-producing properties, 20 or less. For other real and personal property, CODs should reflect the nature of the properties, market conditions and the availability of reliable market indicators.
The 2005 COD for Concho CAD Category A was 11.55; for Category C, 5.71; for Category D, 13.46; for Category F, 8.67; for Category G, 12.76; and for Category J, 2.16.
The 2005 COD for Eden Consolidated ISD Category A was 13.35; for Category D2, 11.93; for Category F1, 8.67; for Category G, 12.25; and for Category J, 1.00.
The 2005 COD for Paint Rock ISD Category A was 6.93; for Category C, 5.71; for Category D2, 15; and for Category J, 2.94.
These numbers indicate uniform appraisals in these categories.
2006 Concho CAD Summary
In 2006, Concho CAD's overall median ratio is 1.00.
- In Category A, Single-Family Residential, the sample ratios range from 0.57 to 1.23, with a median ratio of 0.99;
- In Category C, Vacant Lots, the sample ratios range from 0.92 to 1.36, with a median ratio of 1.00;
- In Category D2, Non-qualified Land, the sample ratios range from 0.48 to 1.60, with a median ratio of 1.01;
- In Category F1, Commercial Real Property, the sample ratios range from 0.59 to 1.15, with a median ratio of 0.98;
- In Category G1, Oil, Gas & Minerals, the sample ratios range from 0.68 to 1.21, with a median ratio of 0.99;
- In Category J, Utilities, the sample ratios range from 0.97 to 1.09, with a median ratio of 1.04.
2006 Coefficient of Dispersion
The 2006 COD for Concho CAD Category A was 6.67; for Category C, 4.88; for Category D2, 15.67; for Category F1, 7.62; for Category G, 7.28; and for Category J, 4.60.
The 2006 COD for Eden Consolidated ISD Category A was 6.40; for Category D2, 13.00; for Category F1, 7.51; for Category G, 7.40; and for Category J, 5.83.
The 2006 COD for Paint Rock ISD Category A was 6.94; for Category C, 4.88; for Category D2, 18.03; for Category G, 7.19; and for Category J, 3.90.
These numbers indicate uniform appraisals in these categories.
Eligible School Districts
In the 2006 preliminary PVS, Paint Rock ISD fell outside the confidence interval of .95 to 1.05. A confidence interval provides one measure of whether the state's estimate of value in a school district is statistically significantly different from the self-reported appraisal roll value (i.e. "local value"). Category D, Rural Real, was the primary reason for this. While the preliminary PVS found that taxable value in Paint Rock ISD was invalid, the CAD protested the findings and Paint Rock ISD was awarded local value in the final determination.