Appraisal Standards Review
Cooke County Appraisal District Follow-Up Report
May 2007
Introduction
In July 2004, the Lindsay Independent School District (ISD), Callisburg Independent School District and Valley View Independent School District in Cooke County, Texas, were identified as three of 54 school districts in the state meeting the criteria that initiate an Appraisal Standards Review (ASR) of the county appraisal district that serves them. In January 2006, the Comptroller’s Property Tax Division (PTD) released the results of the ASR for Cooke County Appraisal District (CAD).
The report made 11 recommendations to improve Cooke 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 would improve appraisal practices. The Cooke CAD review evaluated five functional areas: board of directors; appraisal district policies, procedures and operations; information system process; staffing, personnel qualifications and positions; and generally accepted appraisal practices and the equality and uniformity of appraisal standards.
At the time of the review, Cooke CAD faced a number of challenges, including:
- managing financial operations;
- documenting policies and procedures; and
- evaluating appraisal activities and managing reappraisals.
Texas Property Tax Code Section 5.102(d) requires that if the appraisal district fails to comply with the recommendations in the report and the Comptroller finds that the board of directors of the appraisal district failed to take remedial action before the first anniversary of the date the report was issued, the Comptroller must notify the judge of each district court in the county for which the appraisal district is established. The judge(s) shall appoint a five-member board of conservators to implement the recommendations. The board of conservators exercises supervision and control over the operations of the appraisal district until the Comptroller determines under Section 403.302 of the Government Code, that 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 must 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 they take 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 implemented or nearly completed most of the recommendations by the first year anniversary of the release of the report. The Comptroller recognizes that some recommendations included in ASRs will require more than a year to implement. Some ASRs include more recommendations than a CAD with limited resources can implement within a year. As long as the CAD is working to implement recommendations 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.
In November 2006, the PTD reviewed the progress made by Cooke CAD in implementing the recommendations found in the original report. Cooke CAD has fully implemented nine of the 11 recommendations, and is nearing completion of the other two.
PTD sent the Cooke CAD’s board members surveys soliciting their views and comments on the ASR. None of the board members responded.
PTD believes that Cooke CAD’s efforts to date have met the state’s legal requirements and commends the CAD board and staff for their efforts so far. PTD will continue to monitor its progress toward full implementation of the remaining two recommendations. This report outlines specific steps that remain to complete the ASR recommendations.
History
Cooke CAD received an ASR because the 2003 PVS found the Lindsay ISD, Callisburg ISD and Valley View ISD property values were invalid, or outside the confidence interval. The school districts also were eligible for the “grace period” provided in Section 403.3011 of the Government Code. The 2003 PVS indicated that the primary reasons for the invalid findings involved Category A (single-family residential) and Category D (rural real) being valued inconsistently. For instance, the Lindsay, Callisburg and Valley View ISDs’ Category A ratios for the 2003 PVS were .9220, .9312 and .9562, respectively.
In the 2004 PVS, published in July 2005, all ISDs in Cooke County, including Lindsay ISD, Callisburg ISD, and Valley View ISD were within the PVS confidence interval. The CAD improved the Category A ratios as follows: Lindsay ISD - 1.0039; Callisburg ISD - .9937; and Valley View ISD – 1.0077.
The 2005 PVS also indicated all ISDs in the Cooke CAD jurisdiction were within the confidence interval.
What Remains to Be Done
Appendix A lists the 11 recommendations identified in the original report with a summary of actions to date. The CAD has completed nine of the recommendations and is working toward completing the remaining two. The following outlines what remains to be done.
Recommendation 3: Establish written procedures for monitoring professional services contracts and revise current contracts as they expire to include venue clause, deliverables and deliverable dates.
The CAD provided a copy of the 2006-07 appraisal services contract with Pritchard & Abbott, Inc. The revised contract includes provisions for deliverables, payments and a listing of accounts serviced by the firm.
To complete this recommendation, the CAD should develop and implement written procedures for monitoring professional service contracts. By establishing a contract monitoring process, the CAD can ensure that critical deliverable dates are met, service performances are evaluated and budget requirements are met.
Recommendation 7: Conduct a staff needs analysis and establish staffing allocation guidelines that will insure that the number and type of staffing is appropriate and annually adjusted to meet reappraisal plan goals each year.
The CAD currently has one vacant position that is likely to remain vacant for the near future, according to the chief appraiser. The chief appraiser stated that staff levels have remained the same since 1989, but employees have shifted to different areas of responsibility due to changes in technology use that have allowed staff to perform some processes more efficiently, creating new job positions. For example, the CAD had five employees in the collections department and now has three. The mapping department had three positions and now has one as manual mapping functions are now automated. The chief appraiser felt the CAD was staffed correctly and stated that discussions were held informally with the board. At the time of this draft, the chief appraiser was in the process of completing staff allocation guidelines and documenting the most recent analysis.
By completing and providing to the Comptroller the staffing allocation guidelines and the most recent staff analysis, this recommendation will be complete.
Appendix A
Cooke County Appraisal District
Appraisal Standards Review Implementation Status
2.1 Board of Directors
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 1 | Develop and expand the budget document that is distributed to taxing units to include the salary and benefits for each position. | Complete |
The board approved an expanded budget format that includes a detailed listing of the salaries and benefits for each position at its August 11, 2006 meeting. The chief appraiser stated all future budgets will contain salaries and benefits for each position. |
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| 2 | Develop procedures for responding to notes on the financial statement and management letter findings. | Complete |
The chief appraiser discussed how the CAD has handled and addressed some of the notes in the 2002 Annual Financial Report that are mentioned in the ASR finding and deals with Recommendation 2. At the December 2006 board meeting, a motion passed to amend the board policy manual to specify how the CAD will address and respond to any future auditing notes and management letters. |
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| 3 | Establish written procedures for monitoring professional services contracts and revise current contracts as they expire to include venue clause, deliverables and deliverable dates. | In Progress | August 2007 |
The CAD provided a 2006-07 contract for appraisal services with Pritchard & Abbott, Inc. dated August 3, 2006. The contract includes sections on performance with dates for deliverables and payment dates for 2006 and 2007. The chief appraiser stated that this is the main contract that required revision. The CAD also provided lease agreements with Pitney Bowes and True Automation. At the December 2006 board meeting, a motion passed to amend the board policy manual to include reviewing and amending all contracts every January; however, no formal written procedures were presented. |
| 4 | Develop written board policies to guide the CAD to effectively manage the district operation. | Complete |
The CAD provided a General Policies and Procedures Manual, revised in August 2006. The chief appraiser stated that revisions were made to the original manual, which was last revised in 1996. Bound minutes reflect the board considered policy updates at the May 11, 2006 meeting with the CAD's attorney. At the August 3, 2006 meeting, the board adopted policies relating to public access to the board, public comments, interpreters and access by persons who have physical, mental or developmental disabilities. |
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| 5 | Use the evaluation tool and establish an annual written evaluation process for the chief appraiser. | Complete |
The board performed a written evaluation of the chief appraiser at its October 12, 2006, meeting. The board used a written evaluation to evaluate the chief appraiser in the following areas: administration and office climate; board-chief appraiser relations; district improvement; fiscal and facilities management; personnel management; community relations; and professional growth and development. Each area includes a statement relating to the topic and indicators the board considered in evaluating that functional area. The board of directors policy manual includes a section defining the annual evaluation process and requiring that future evaluations will take place in December of each year. |
2.2 Appraisal District Policies, Procedures and Operations
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 6 | Develop a comprehensive written policy and procedures manual for district administrative operations. | Complete |
The chief appraiser provided various procedures the CAD has updated over the last year. The policies and procedures are kept in the departmental policy and procedures manuals and include items such as banking and bill paying, daily batch balancing and report retention, bank depositing procedures, daily balancing, refunds, accounts payable, tax certificates and payroll. For purchasing, the CAD obtained its credit card last year. Only the chief appraiser and one other person are authorized to use it. The board established credit limits for the card and documented them in the board minutes. No other policies for purchasing exist. The CAD also provided mapping procedures. The chief appraiser stated that the CAD also uses the appraisal and collection software to track changes and the software creates an event log that allows supervision and review of various operations. |
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 | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 7 | Conduct a staff needs analysis and establish staffing allocation guidelines that will insure that the number and type of staffing is appropriate and annually adjusted to meet reappraisal plan goals each year. | In Progress | August 2007 |
The CAD has one vacant position that is likely remain vacant. The chief appraiser stated that staff levels remain the same as in 1989, but that employees have shifted to different areas, due in part to changing technology that has allowed staff to perform some processes more efficiently. For example, the CAD had five employees in the collections department and now has three. The mapping department at one time had three positions and now has one. The chief appraiser felt CAD staffing is adequate and stated that he held informal discussions with the board. At the time of this draft, the chief appraiser was in the process of completing staff allocation guidelines and documenting the most recent analysis. |
| 8 | Develop the job descriptions and adopt an annual personnel performance evaluation system to use in evaluating all district staff. | Complete |
The chief appraiser stated that he and supervisors from each department revised and updated the job descriptions between June and November 2006. The CAD provided an example of employee evaluations conducted in July and August 2006 and copies of updated job descriptions. Employees are rated annually on 12 criteria, overall performance and general skills. Categories are rated from one to five, with each number assigned specific written criteria to help in scoring. |
2.5 Generally Accepted Appraisal Practices; Equality and Uniformity of Appraisal Standard
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 9 | 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 |
At the September 14, 2006 board of directors meeting, the board held a public hearing and adopted the Cooke CAD 2007-08 reappraisal plan. The CAD provided a copy of the plan that includes details of the reappraisal and a comprehensive outline of activities by month. The plan includes the requirements outlined in Tax Code Section 25.18. |
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| 10 | Establish comprehensive written ratio study procedures that allow proper reappraisal and maintenance planning. | Complete |
The CAD provided a sample of a ratio study produced by the district's computer assisted mass appraisal (CAMA) system and provided procedures for reviewing sales to check cost and classification schedules, entitled "Using the Sales to Check and Verify Classification Value Schedules." The reappraisal plan also includes a section on how the district uses sales and ratio studies. The procedures to check and verify schedules include the use of an Excel spreadsheet; a person-performing ratio studies enters specific data and follows specific steps to perform in order to complete the ratio studies. The chief appraiser stated that the process also is included in the appraisal procedures manuals. |
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| 11 | Prepare and issue to each appraiser detailed appraisal procedures manuals that provide local procedures and practices for each type of property the staff appraises. | Complete |
The CAD reworked existing appraisal procedures manuals over the last three months and made 13 copies of the procedures for all appraisers and the office staff. A taxpayer copy is available for viewing in the CAD's offices. The CAD will update the manuals as necessary. Dated sections allow staff to track revisions and update sections, as necessary. The manual is comprehensive and includes sections on improvement classification, Uniform Standards of Professional Appraisal Practice, various residential and land schedules, agricultural information, various procedures and other information pertinent to appraisal district staff and taxpayers. |