Findings of the Appraisal Standards Review
This chapter of the report addresses the findings, commendations and recommendations from the appraisal standards review of the Coryell County Appraisal District in five sections:
The quality of the property tax system depends on the appraisal district's board of directors (board). Individuals serving on the board bring knowledge, judgment and expertise in establishing policies and procedures for the district's organization and operation.
The appraisal district was formed in 1981 and became active in 1982. The CAD board consists of six members. Members of the board are listed in Exhibit 4.
Board of Directors Members
Board Member Represents Starting Date Annabelle Smith, President County at Large 1/2002 Jay Manning County at Large 1/2002 Larry Smart County at Large 1/2004 Bob Weiss, Secretary County at Large 1/2005 Jeff Carswell County at Large 2005 Barbara Thompson, Non-voting County Tax Assessor 1/1998 Source: Coryell CAD Staff, November 2005.
Barbara Thompson, Coryell County Tax Assessor-Collector, is an elected official.
Members to the board are nominated every two years (during odd years); they are elected at-large by the taxing entities. At the first meeting following their election, the board elects its officers (President and Secretary).
The board has the following primary responsibilities:
- establish the appraisal district's appraisal office;
- adopt the appraisal district's annual operating budget;
- contract for necessary services;
- hire a chief appraiser;
- hire a taxpayer liaison officer (districts in counties having a population of over 125,000);
- appoint appraisal review board members; and
- make general policy on the appraisal district's operation.
The board received a written survey about board activities. Two of the five board members responded. The survey was broken down into board policies and procedures, chief appraiser and staff, property appraisals, appraisal review boards, and budgeting and financial management. The board generally gave itself, the chief appraiser, and staff high marks for running the district. On the majority of questions, the board agreed or strongly agreed that the district was operating effectively. Both board members agreed with the statements that "the board maintains a comprehensive set of policies and procedures to guide the operation of the appraisal district; and "all board policies in my district are reviewed and updated at least every two years." The board members indicated they did evaluate the chief appraiser annually, and stated they did have a written job description and a performance plan for the chief appraiser. The two board members agreed with the statement that "the external audit contract is periodically bid and the auditors are rotated periodically." One member strongly agreed and the other disagreed with the statement "the board regularly monitors the performance of contracts after a contract is signed."
The board hires a chief appraiser as the chief operating officer of the district.
Coryell CAD's budget lacks a breakdown of benefits for each staff position. The 2003, 2004, 2005 and 2006 budgets contain the information for employee benefits but only in total dollar amounts rather than in a breakdown by staff position as required in Tax Code Section 6.06(a). The budget does contain a salary budget schedule that lists each budgeted position and a budgeted salary amount. The listing as presented does not tell the reader what benefits are being provided or the cost of the benefits, by position.
The code does not require names of the individual employee in a particular position and can be omitted in the proposed budget presentation. This provision of the tax code is designed to give the public and participating taxing units information about total compensation, including benefits, for each proposed staff position included in the proposed budget.
Exhibit 5 presents the budget for 2006.
Coryell CAD 2006 Budget
Salaries and Payroll Burden 2006 Percent
Chief Appraiser $65,000 Assistant Chief Appraiser 43,350 Appraiser IV 42,126 Appraiser IV 40,188 GIS/911 Addressing* 39,780 Appraiser IV 28,662 Appraiser III 27,132 Appraiser I/II (New Position) 30,000 Appraisal Technician 28,662 Records Technician 21,420 Administrative Assistant (New Position) 20,400 Part Time Assistance 1,800 Merit Increases 3,728 Subtotal, Salaries $392,248 Benefits Health Insurance $40,000 Medicare Expense 5,400 Retirement 39,200 FUTA Fed Unemployment 2,950 TWC State Unemployment 2,600 Workers Comp 6,400 Part-Time 1,800 Subtotal, Benefits $98,350 Total, Salaries and Benefits $490,598 70.6% Contractual Board Liability Insurance $4,400 Copier Lease 6,000 Municipal Lease 43,300 Contracted Services 18,000 Total, Contractual $71,700 10.3% Office Expenditures Rent/Payment $7,000 Utilities 8,400 Telephone Expense 11,800 Repairs 3,000 Office Insurance 3,400 Janitorial 3,120 Internet 1,500 Total, Office Expenditures $38,220 5.5% Capital Expenditures Capital Expenditure 0 Furniture & Equipment 5,400 Total, Capital Expenditures $5,400 0.8% Supplies Computer Supplies $2,000 Copies 800 Office Supplies 5,000 Total, Supplies $7,800 1.1% Professional Services Accounting Fees $3,900 Attorney 4,800 Auditing 3,500 Total, Professional Services $12,200 1.8% Other Expenses Advertising $2,300 Appraisal & Map Supplies 1,300 Board of Review 3,000 Chief Appraiser Expense 500 Directors Expense 2,100 Dues & Subscriptions 5,000 Mileage/Auto Allowance 24,300 Postage 11,000 Printing 2,000 Schools & Seminars 8,500 Contingency Reserve 8,500 Total, Other Expenses $68,500 9.9% Total 2006 Budget $694,418 100.00% Source: Coryell CAD, November 2005. *The budget includes the full salary of 911 and is adjusted with revenues received to net half of the expense.
With about 70 percent of the budget going to wages and benefits, the taxing units and the public need the detail required by state law to be assured the number of staff in the district is sufficient to perform the work and that the staff is correctly compensated.
Expand the budget format to comply with the Tax Code.
The board does not have a written process for evaluating chief appraisers, nor is there evidence of any informal review process for assessing performance. Exhibit 6 presents a historical summary of chief appraisers with the corresponding length of service.
Historical Coryell CAD Chief Appraisers and Length of Service
Chief Appraiser Length of service Darrell Lizenbee 1982 to 11/03 - 21 years Barbara Davis-Kyle, interim 12/2003 to 03/2004 - 4 months Brett McKibben 04/2004 - 03/2005 - 12 months Barbara Davis-Kyle, interim 04/2005 - 05/2005 - 2 months Jerry Hogg 06/2005 - present Source: Coryell CAD, October 2005.
The CAD does have a written chief appraiser job description. The reviewers found no evidence of any informal or formal review process for assessing chief appraiser performance. According to the chief appraiser, as of November 2005 the CAD has developed an objective set of chief appraiser evaluation measures that are being presented to the board of directors for approval at the December 2005 meeting.
The two board members who returned the survey agreed, however, that the board evaluates the chief appraiser annually, that the chief's appraisal is formally documented with measurable criteria and that there is a job description for the chief appraiser and a performance plan for measuring the chief appraiser's performance. Both board surveys agreed that the board has confidence in the chief appraiser and the chief appraiser is doing the job.
Chief appraisers are responsible for ensuring that competent staff is hired, procedures are documented, appraisals are performed, employees are evaluated and all other functions performed by an appraisal district. Having a qualified chief appraiser is important to effective district operations.
Without written guidelines for the chief appraiser to follow, an objective evaluation of the chief appraiser's performance is impossible. No documentation on previous chief appraisers' performance was provided to the reviewer.
Without an objective system in place to ensure that the board and the chief appraiser are in agreement as to what is expected of the chief appraiser, performance evaluations may be subjective and based on emotion rather than actual performance.
In Nueces CAD, for example, the board has developed a well-defined job description for the chief appraiser and constructed an objective evaluation tool for measuring the chief appraiser's job performance. The job description clearly defines the role of the chief appraiser and lays the groundwork for an objective evaluation. The chief appraiser receives an annual performance evaluation on the anniversary date of his/her hire. The board uses an instrument that allows for input from all board members, and affords the chief appraiser an opportunity to address his/her own goals and objectives during the evaluation period. In addition, the evaluation sets up goals and objectives for the next twelve months. Having an objective evaluation system in place ensures that the board and the chief appraiser are in agreement as to what is expected of the chief appraiser, and eliminates performance evaluations that may be subjective and based on emotion rather than actual performance.
Evaluate the chief appraiser annually based on an objective set of evaluation measures.
Coryell CAD does not centrally maintain or monitor its contracts/agreements. According to the budgets, the district had contracts/agreements for appraisal services, legal services, auditing services, computer services, internet services and rent to name a few. When asked to provide copies of any or all contracts/agreements, the district was not able to provide copies except for a recently executed software license agreement and an old acknowledgement of the extension of the agreement for appraisal services. In November 2005 the chief appraiser noted that written procedures for monitoring CAD contracts are in development, and all contracts have been reviewed for terms and are available for inspection at any time.
Without centrally maintained contracts/agreements or any written contract monitoring procedures for appraisal district staff for reference, new and temporarily, or permanently, reassigned district staff may not be aware of the informal guidelines for ensuring that the contractor is delivering the contracted goods or services on time and that the quality and quantity are in accordance with the contract. A good procedure identifies the contract monitor and the duties that the contract monitor is to perform for each contract. Without formal contract monitoring, the district has not confirmed that it received the quality or quantity of services specified for delivery, as rendered by the contractor. Without dates for specific deliverables, the district would have no recourse to compel the vendor to perform the services within a prescribed timeframe.
IAAO's Standard on Contracting for Assessment Services, Section 4, requires contracts have specific provisions, including the timeframes when services or goods will be delivered.
Good procedures identify the contract monitor and the duties that the contract monitor is to perform for each contract. Without contract monitoring, the district cannot make a decision on the quality of services rendered by the contractor.
IAAO's Standard on Contracting for Assessment Services, Section 5, requires monitoring contract performance.
Complete written procedures for developing, maintaining and monitoring professional services contracts.
Until the September 2005 board meeting, Coryell CAD did not have an agricultural appraisal advisory board.
Section 6.12 of the Tax Code states that the chief appraiser, with the board of directors' consent, shall appoint an agricultural appraisal advisory board (Ag board) and that one of the members is to be a representative of the county agricultural stabilization and conservation service. The statute states the board is to meet at least 3 times a year at the call of the chief appraiser. Its function is to advise the chief appraiser on the valuation and use of land designated for agricultural use.
According to the chief appraiser, Ag board recommendations were submitted and approved by the board at the September 2005 meeting, so the Ag board has been officially established since then.
In the 2003 Property Value Study (PVS), Oglesby Independent School District received an invalid finding due in part to its low agricultural use values. An agricultural advisory board benefits the district by providing expertise on subjects such as different agricultural land type and management costs. Having current data will improve the district's agricultural values and provide a better opportunity for the school district to receive a valid finding in the PVS.
Permanently retain an agricultural appraisal advisory board.
In organizing and administering an appraisal district, the chief appraiser is responsible for hiring, firing, and training personnel, for ensuring compliance with a wide range of legal requirements and for the maintenance of policies and procedures for effective appraisal district office operations. The district is also required to comply with Comptroller rules concerning application forms and appraisal records.
The chief appraiser is required by law to prepare and certify an appraisal roll for each taxing unit participating in the district. Certification of the appraisal roll for the 2003 tax year by the district was completed according to the law.
Coryell CAD lacks well documented policies and procedures to guide the day-to-day operations of the district in areas such as payroll processing, accounting, purchasing and the like. In November 2005, the chief appraiser noted that written procedures are being developed and the manual is planned for presentation and approval at the December 2005 board meeting.
Instead, long time employees of the district have a series of memos, notes or long term memory to guide them through the day-to-day processes. Policies adopted by the board are recorded in board minutes, but it is unclear how certain policies are translated into practice in the district, nor is it clear that the chief appraiser or any other employee is responsible for monitoring day-to-day operations to insure that policy decisions of the board are carried out.
A policy tells a person, department, group of individuals what they must do, whereas as procedure enumerates how it can be accomplished.
Well-written and organized procedures:
- implement and assure compliance with board policies as well as documenting the intent of those policies;
- protect the institutional knowledge of an organization, so that as experienced employees leave, new employees have the benefit of the others' years of experience;
- provide the basis for training new employees; and
- offer a tool for evaluating employees based on their adherence to procedures.
In the absence of well documented procedures and policies, the work of the appraisal district may come to an abrupt stop if key personnel leave a position as a result of sudden illness, death or other personal tragedies. Other examples abound of whole departments without trained back-ups for critical positions like payroll, and of poor training techniques that show new employees how to perform a task, but not why.
To be effective, policy and procedure manuals should be updated and kept current at all times. This means setting up a system for regular updates and distribution, as well as periodic reviews to ensure that all old policies are removed when no longer needed.
The Jefferson County Appraisal District, recently reviewed by the comptroller's office, maintains a current and comprehensive policy and procedure manual detailing procedures for payroll, accounting, purchasing, budget, travel, bank reconciliations and similar procedures.
A policy and procedures manual needs to be in place for the staff to follow for district operations. A procedures manual helps taxpayers and staff understand the steps the appraisal district follows to accomplish the tasks of the appraisal district. Procedures for granting and administering exemptions ensure exemptions are granted correctly.
Maintain a board-approved, up-to-date written procedure manual for district operations.
Appraisal districts use information technology to provide detailed records that are easily accessible to staff and the public. Information technology systems allow staff to effectively manage large amounts of data on individual properties and make the appraisal process more efficient.
Coryell CAD uses a highly sophisticated information technology system for appraising property in the district. Its Property Appraisal Collection and Software (PACS) allows the district to exceed the requirements of Section 23.01 of the Tax Code, which requires that all appraisals must consider the individual characteristics of the subject property. The system also can analyze sales data, perform ratio studies, display pictures of all properties and keep historical appraisal data on each property for 10 years.
In February 2005, Coryell CAD management decided to upgrade the district's existing capabilities by contracting with True Automation for hardware, software, and professional services.
True Automation has provided Coryell CAD with the following: 11 desktop PC's, 1 database server, 1 system printer, 2 report printers, firewall protection for 25 users, and communication rack & accessories. They have also provided the following third-party software: 1 MS SQL 200 server and media on CD, 11 server licenses, and 9 ESRI Map Objects for Arc Info.
The software can also show pictures of properties from different views. For example, an appraiser can enter pictures of each view of a house along with the measurements of the structure, into the system. This helps the district in the reappraisal process by showing improvements that existed at the last inspection of the property. In addition, the PACS system can assess appraisal trends over time since it retains 10 years of data.
Appraisal districts with successful appraisal programs use systems that meet or exceed Tax Code requirements to ensure equity and uniformity in property appraisals.
The district has an automated appraisal system that exceeds Tax Code requirements.
The district has an effective disaster recovery and delivery plan for its appraisal data and rolls. Concerning computerized appraisal data, Monday through Thursday's work is backed up and stored in a fireproof box in the office. Each Friday the entire weeks work is backed up and stored in the bank's vault.
Until three year ago, appraisal rolls were kept as hard copies in the Gatesville office. Since that time, the appraisal rolls have been generated and stored electronically, while appraisal cards are available in both paper hard copy and electronically on Coryell CAD's computer system. With these changes, the district has been able to supply a legible, electronic copy of the appraisal roll to the Comptroller's office.
Coryell CAD has implemented an effective storage and disaster recovery process for its appraisal roll and data.
Coryell CAD's maps do not yet comply with Comptroller Rule 9.3002. Parcel or property identification numbers are in the process of being integrated into the district's mapping system. The CAD contracted with A.I.M.S. Company and Associates in December 2004 for a year-long, three- phase process to bring Coryell CAD's maps into compliance. In November 2005 the chief appraiser noted that phase two was complete and the phase three December deliverables are on target with the agreement.
Maps are an integral part of any appraisal process. The lack of current, up to date maps makes the appraisal process difficult and inefficient. Maps are critical to any reappraisal process. Not having the ability to identify those properties or areas that need to be appraised violates Comptroller Rule 9.3002.
Section 9.3002 of the Texas Comptroller's Property Tax Rules addresses mapping as follows:
(a) All appraisal offices and all tax offices appraising property for purposes of ad valorem taxation shall develop and maintain a system of tax maps covering the entire area of the taxing units for whom each office appraises property.
(b) Each tax map system shall be drawn to scale and delineated for lot lines or property lines or both, with dimensions or areas and identifying numbers, letters, or names for all delineated lots or parcels.
(c) Each tax map shall be divided into sections drawn at a scale large enough to serve the purposes of property assessment. Developed or subdivided areas may be drawn at a different scale than undeveloped or unsubdivided tracts.
(d) The tax map, each section thereof, and each parcel thereon shall be assigned numbers in accordance with a parcel identification numbering system. Such numbers shall be recorded on the tax map, section, and parcel. The identifying number for each parcel as recorded on the tax map shall also be recorded on the appraisal card maintained for that parcel.
(e) The tax map system shall be annually updated to incorporate any new subdivisions or property transfers as indicated by the filing of subdivision plats or deeds with the county clerk's office of the county or counties in which the taxing units for whom each office appraises property are located.
(f) Any information required by these sections may be maintained in electronic data processing records rather than physical documents.
(g) Development of tax map systems (or substantial progress toward development) shall be completed by January 1, 1983.
(h) Appraisal offices and tax offices failing to establish a tax map system as required in this section may be judged to be in compliance upon a showing to the [Comptroller] that a tax map system substantially equivalent to that required in this section has been established.
Outdated maps make it difficult to locate property, making the reappraisal process less accurate.
Complete the contracted implementation plan to bring the Coryell CAD maps into compliance with Comptroller Rule 9.3002.
Personnel and human resources management are a critical function of appraisal districts. Successful management of personnel includes efficient recruiting, hiring, classification and compensation, benefit administration, training and development, and performance evaluation. Compliance with equal employment opportunity statutes and other applicable federal and state laws and the establishment of fair and workable policies, procedures and training are important for the recruitment and retention of competent staff.
The Coryell CAD staff is organized as outlined in Exhibit 7.
Coryell County Appraisal District Positions, Certifications, Years with Coryell CAD and Salaries
Position BTPE Certification Years with Coryell CAD Salary Chief Appraiser- RPA ** $65,000 Assistant Chief Appraiser - Administration Management RPA & CTA 23 years $43,350 Commercial Appraiser RPA 23 years $42,126 Residential Appraiser RPA 16 years $40,188 Residential Appraiser* Appraiser I/II Vacant $30,000 Rural Land Appraiser RPA 14 years $28,100 Records/Sales Analysis none 12 years $28,662 Personal Property Appraiser Appraiser III 4 years $27,132 Data Mgt GIS and 911 N/A 8 years $19,890 1/2 time position Customer Service Tech N/A ** $21,420 Data Entry and Customer Service* N/A Vacant $20,400 Source: Coryell CAD, November 2005.
*New positions in the 2006 budget.
**Employed less than one year.
Appraisal district's staff who appraise property are required to be Registered Professional Appraisers (RPA) or to be working towards certification as an RPA. Staff must be certified within five years of their hire date. Interim certifications include Appraiser II and Appraiser III. In addition, RPAs must re-certify five years from the date of first certification and every five years while registered.
Coryell CAD management identified and implemented a more efficient alternative to the Copperas Cove (Cove) satellite office while improving communication with Cove residents. The satellite office, located in the largest population center in Coryell County, no longer effectively supported Coryell CAD operations. Change was effected through the 2006 budget process with the chief appraiser presenting the pros and cons of keeping the office open, and alternatives.
According to the previous chief appraiser, the satellite office, established in 1989 and closed October 1, 2005, had no clear informal or formal operating guidelines. The satellite office's appearance confirmed that building maintenance and janitorial services had not been routinely performed.
The satellite office, which had two staff, also received little oversight from the main office. There was no indication of clear lines of authority or coordination between offices. The budget did not provide separation detail for this office to determine operating costs, but salaries for the two satellite office staff comprised more than 25 percent of budgeted district salaries. Job descriptions tied to the budget for satellite staff were vague; as the budgeted position of Cove Office Manager was associated with an Appraiser I job description, reporting directly to the chief appraiser for assignments. Coryell CAD's Web site showed that the Copperas Cove Office Manager was also a personal property appraiser. The other position was the regional deputy chief appraiser.
According to CAD staff, about 10 visitors came by the satellite office daily, for information and help with various types of government assistance, not limited by the scope of appraisal district operations. The reviewers did not observe any citizens visiting the satellite office for public assistance and no visitor's sign-in book or records were kept. During interviews, the regional deputy chief appraiser indicated that property appraisals were also part of his job duties but there was no set schedule or priorities for the public assistance and appraisal duties. So, staff property appraisal assignments and completion deadlines were not being coordinated between the offices.
Closing the satellite office and adopting the chosen alternative is providing improved communication with Cove residents through the following changes:
- more frequent and detailed information is being published in the Cove newspaper, reaching more taxpayers timely,
- expanded web access and information on Web site,
- expanded phone access/timely assistance with roll over telephone lines and
- onsite "person to person" assistance at Coryell County Tax Office annex on Fridays.
Adopting the chosen alternative has also eliminated staff being based in two separate locations, removed the need for a separate building in another town and facilitated staff coordination, supervision and management support.
Coryell CAD management improved communication with taxpayers located in its largest population center while increasing overall appraisal district operating efficiency.
In 2003 and 2004 Coryell CAD appeared understaffed for appraisal purposes while reporting a large increase in locally appraised parcel counts in 2003 and a corresponding large decrease in 2004. There were also no significant changes in the scope of contracted appraisals or full time staff count.
In November 2005 the chief appraiser noted that the parcel count inconsistencies were resolved in February 2005, as part of the conversion to the True Automation software system. Staffing evaluation and changes were addressed by the board and chief appraiser through the 2006 budget process, which resulted in two new positions and shifted some non-appraisal duties away from appraisers, allowing them to focus on property appraisal full time.
Exhibit 8 presents the estimated number of locally appraised parcels, number of full time staff, the average number of locally appraised parcels per full time staff and IAAO recommended guidelines for appraised parcel to staff counts. 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 the large taxing units run from 3,000 to 3,500 parcels per staff member with an average of 2,500.
Locally Appraised Parcel Counts and Per Staff Counts 2003-04, 2004-05 and Approved 2005-06
Year Number of Locally Appraised Parcels Number of Full Time Staff Parcels Per Full Time Staff IAAO Recommended Parcels Per Full Time Staff 2003-04 50,679 8 6,335 1,500-1,700 (2,500 avg.) 2004-05 32,705 8 4,088 2005-06 32,705* 11* 2,973* Source: Coryell County 2003 and 2004 parcel and full time staff counts from Property Tax System Reports and International Association of Assessing Officers (IAA0).
*Estimate using 2004-05 parcel count, and 2005-06 approved staffing level.
Coryell CAD exceeded the IAAO highest recommended parcel per staff assignment by more than 4,600 parcels in 2003 and 2,500 parcels in 2004. In practice, these parcel counts are excessive as compared with the IAAO standard. CAD actions taken for 2005-06 predict comparative improvement with the parcels per full time staff benchmark.
Exhibit 9 presents a five year history of the parcel composition by locally appraised parcel category and the associated value, for 2000 through 2004. The 2003 parcel counts data appear to be in error. According to CAD staff, the chief appraiser position was vacated and temporarily filled with a different staff person near the time the 2003 submission was due. If someone unfamiliar with the reports prepared the submittal, this may explain the large increase in 2003 and corresponding decrease the following year, aligning the 2004 parcel counts with the historical submittals.
Parcel Composition by Locally Appraised Parcel Category 2003 and 2004
2000 2001 2002 2003 2004 A 12,609 13,016 13,114 26,123 13,149 B 739 738 740 1,497 760 C 3,616 3,453 3,529 3,775 4,013 D 7,696 7,435 7,600 7,859 7,292 E 4,201 4,230 4,394 8,026 4,638 F1 824 793 788 1,617 858 L1 1,232 1,295 1,166 1,148 1,243 M1 534 595 606 590 710 O 0 0 0 0 0 S 43 0 43 44 42 Total 31,494 31,555 31,980 50,679 32,705 Value, Billions* $1.408 $1.585 $1.678 $1.932 $2.083 Source: Coryell CAD Self Reports for 2003 and 2004 in Property Tax System.
*Value includes only categories shown in table.
Without accurate parcel counts, CAD management has difficulty determining the appropriate staffing level and resources needed to complete appraisal district goals. Successful appraisal districts monitor parcel counts in all categories to ensure all properties within district boundaries receive the appropriate property appraisal treatment using adequate appraisal resources, ensuring accurate property assessments for school and other tax purposes.
Monitor the 2005-06 staffing changes for positive results, with adjustments as needed.
Coryell CAD's personnel manual is out of date and needs to be updated. In November 2005 the chief appraiser noted that the personnel policy manual has been updated and is scheduled for review and approval at the December 8, 2005 board meeting.
The CAD has a descriptive personnel policy manual that explains the district's policy as an at-will employer and the district's mission. The handbook also describes guidelines for employee behavior in dealing with customers. It did not address policies concerning certain forms of harassment, the Americans with Disabilities Act, the Family Medical Leave Act or any of the many changes in personnel law over the last decade.
Having an outdated or narrowly written personnel policy that fails to adequately inform employees of their rights and responsibilities places both the employee and district at risk. Districts with current personnel manuals mitigate the risk for both employees and employers being informed of their rights and responsibilities.
Maintain a board-approved, up-to-date personnel manual.
The Coryell CAD personnel policy does not include a systematic approach for employee evaluation. The reviewers found no documentation that staff are evaluated formally, in writing or informally through discussions. The CAD's personnel manual did not have any information on employee evaluations. When asked, the previous chief appraiser was unable to provide any recent staff performance appraisals. In November 2005 the chief appraiser noted that evaluation procedures are included in the written procedure manual scheduled for board review and approval in December 2005.
IAAO's Property Appraisal and Assessment Administration in Chapter 16, "Administration," states, "Although employees may improve their skills by their own efforts and the help of peers, managers have organizational responsibility for employee development. They use training, education, counseling, and performance reviews to identify talents and help employees grow."
The employee's performance of assigned duties and other job-related criteria provides the basis for an annual (at a minimum) employee evaluation. Employees need to be informed of the criteria on which they will be evaluated. A detailed job description is essential. Evaluation and performance appraisal ratings are based on the evaluation instrument and cumulative performance data gathered by supervisors throughout the year. Coryell CAD has detailed job descriptions available for all staff positions.
Each employee needs to have at least one evaluative conference annually to discuss the written evaluation and may have as many conferences about performance of duties as the supervisor deems necessary. Evaluation records and forms, reports, correspondence and memoranda may be placed in each employee's personnel records to document performance. All records that support appraisal ratings need to be maintained for at least two years. Official appraisal records are then maintained throughout a person's employment with the district and for two years after an employee ceases to be employed with the district. All employees need to receive a copy of their annual written evaluation.
A proper personnel evaluation process is essential to employee development and high morale.
Adopt and apply an annual personnel performance evaluation system for all district staff.
In appraisal there are generally three approaches to value - cost, income, and market - that a chief appraiser must consider in determining the market value of property. The chief appraiser must consider all three and use the method most appropriate in appraising a particular property.
The appraisal district's contract appraiser appraises Coryell CAD's minerals, utilities, and some industrial properties. Minerals are appraised using the income approach, which involves estimating the income likely to be generated by selling the minerals. Utilities are appraised using the unit value technique. The unit value technique requires the appraiser to determine the market value of the entire utility and apportion the value to each taxing unit within the appraisal district. Industrial properties are appraised using cost and/or income approaches to value.
Coryell CAD uses cost-based schedules to appraise real property improvements. The cost-based schedules the appraisal district uses are purchased as a subscription service from Marshall & Swift.
Coryell CAD lacks a detailed reappraisal plan to ensure the execution of timely and accurate reappraisals. In November 2005 the chief appraiser noted that the need for a plan was recognized and a reappraisal plan has been drafted, which is scheduled for board review in January 2006.
A copy of the Coryell CAD's reappraisal plan was requested in late 2004 but not provided. The previous chief appraiser indicated that all properties are reappraised annually based on sales data, with physical inspections of all properties every three years. The previous chief appraiser also acknowledged that annual inspections are done on all new properties and properties with physical changes.
Lack of a detailed reappraisal plan could cause the execution of the plan to go awry, and result in property values that deviate from market value. This market value deviation could cause any of Coryell County's school districts to receive an invalid finding in the state's property value study.
Section 25.18, Tax Code, requires appraisal districts to implement a plan for reappraisal. The plan for reappraisal shall provide for reappraisal of all real property in the district at least once every three years. A reappraisal plan is a roadmap for performing the work. It is also a communication tool that shows the appraisal district board of directors how the appraisal district staff plans to accomplish its appraisals, and if the board chooses to require the chief appraiser to submit the plan for approval, the board can direct the appraisal activities by amending the plan.
According to USPAP Standard 6, a functional reappraisal plan includes the following activities:
- identifying properties to be appraised;
- identifying and updating in the appraisal records the relevant characteristics of each property to be appraised;
- defining market areas;
- identifying property characteristics that affect property value in each market area;
- developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area;
- calibrating the model to determine the contribution of the individual property characteristics affecting value;
- applying the conclusions reflected in the model to the characteristics of the properties being appraised; and
- reviewing the appraisal results.
A reappraisal plan also provides for a physical inspection of the properties being appraised. Alternatively, the plan can include reliance on reliable sources of property information instead of physical inspections. Such sources include, but are not limited to, deeds or other legal documentation, aerial photographs, land-based photographs, surveys, maps and property sketches. A complete plan would indicate instances or types of properties that will be appraised using sources of information other than physical inspection.
The primary function of every appraisal district is to appraise all taxable property equally and uniformly at market value. The chief appraiser and appraisal district staff are responsible for the day-to-day operations of the appraisal district, but the Board of Directors must adequately plan to accomplish these objectives and establish policies that serve as clear directives to the chief appraiser and staff. As representatives of the member taxing units, the Board of Directors is responsible for ensuring that the appraisal district produces an appraisal roll that reflects market value for all taxable properties.
A thorough reappraisal plan discusses in detail how and when the district plans to perform each of the activities mentioned above. A detailed reappraisal plan, if executed properly, would help ensure that values in each school district are valid in the PVS, thereby avoiding the possibility of a school district receiving less than the expected amount of funding from the state. A detailed and properly executed plan would also ensure that taxpayers are treated uniformly in the payment of property taxes.
Adopt and follow a complete reappraisal plan.
Coryell CAD lacks written appraisal procedure manuals for appraisal staff. The appraisal district's computerized appraisal system provides staff capability for appraisal analysis through ratio studies within and among property classifications. In November 2005 the chief appraiser noted that written appraisal procedure manuals are being updated and are scheduled for review and approval at the January 2006 board meeting.
According to IAAO's Property Appraisal and Assessment Administration, a ratio study is a study of the relationship between appraised or assessed values and market values. Indicators of market values may be either sales or independent "expert" appraisals. Of common interest in ratio studies are the level and uniformity of the appraisals or assessments.
Most appraisals are accomplished by entering the accumulated property characteristics into the computerized valuation model. The model, when directed, produces a market value for each property based on the property's characteristics that the appraiser then reviews for reasonableness and accuracy.
Coryell CAD's valuation model generally appears to follow the Marshall & Swift procedure but no clear guidance exists for their cost-based model. The district has not developed a residential classification guide to promote consistency among the appraisers in the way they classify residential properties. No guides exist for non-residential properties, such as agricultural land.
Personal property inspections are done at least once every three years. Personal property values, however, are largely based on taxpayer renditions. The personal property appraiser reviews the renditions for reasonableness by comparing the rendered values to the personal property value schedule in the Comptroller's field appraiser's guide and also comparing values of similar businesses. Coryell CAD does not have a manual to guide their appraisers in the review of renditions, or in the reasonableness determination. According to the personal property appraiser, personal property is discovered by reading the newspaper, word of mouth, and by driving around the district. Rendition forms are mailed to all business owners every year.
The Marshall & Swift Valuation Service guidebook is helpful but not specifically tailored for Coryell County. In addition, the valuation guidebook does not contain local procedures and directives for completing appraisals. The district refers to the USPAP mass appraisal standard as its appraisal standard, but appraisers do not have a procedures manual that incorporates the standard with local practices.
Lack of detailed appraisal procedures manuals could cause inconsistent appraisals and result in property values that deviate from market value. This market value deviation could cause any of Coryell County's school districts to receive an invalid finding in the state's property value study. As mentioned previously, Oglesby ISD received an invalid finding in the Comptroller's 2003 Property Value Study, and an invalid finding, if uncorrected, could eventually cause the school district to receive less funding from the state than expected. Further, if the level of appraisal (percentage of market value) varies from school district to school district, or from taxpayer to taxpayer, some taxpayers could be bearing more than their fair share of the local tax burden.
Section 23.01, Tax Code, mandates that property be appraised by applying generally accepted appraisal methods and techniques. This section also requires appraisal districts to comply with the USPAP and requires similar appraisal methods and techniques be applied to the same or similar properties, while taking care to account for the contributions of individual property characteristics on value. A comprehensive appraisal procedures manual would help ensure that these standards and requirements are attained.
Maintain board-approved, up-to-date appraisal procedure manuals.
Coryell CAD does not have a documented process for analyzing and gathering sales data. In November 2005 the chief appraiser noted that all staff has been trained in sales management and implementation with the True Automation software system and written instructions for the integrated process are being developed for presentation at the January 2006 board meeting.
The CAD researches deed recordings to identify property transactions and sends sales confirmation letters to buyers and sellers as recorded in the deed to confirm and verify the transaction and the amount of the transaction. Appraisal district staff also research building and sewer permits to gather information about new construction or construction on existing property.
The district's confirmation and verification procedure is one that most appraisal districts use. However, the appraisal district's procedure for gathering and analyzing sales and market data is not written or contained in a procedures manual.
Written procedures ensure the market analyses are done consistently, regardless of changes in personnel. Knowing what analysis needs to be done, when to perform the analysis, and how to actually perform it is key to maintaining continuity and a high level of appraisal performance.
Produce a written manual for gathering and analyzing sales data.
Coryell CAD's method of determining productivity values for land designated for agricultural use does not comply with Section 23.41 and Section 23.51 of the Tax Code. In November 2005 the chief appraiser noted that the CAD appointed an agricultural appraisal advisory board in September 2005, is now computing productivity values as specified in the Tax Code and intends to annually review all productivity values with the agricultural appraisal advisory board.
The previous chief appraiser was unable to provide copies of the productivity calculations for the current or prior years. He indicated that the district has not performed the calculations since 2002 because of the lack of verified income information. The district does mail agricultural surveys to land owners each year, but according to the previous chief appraiser the response rate is very low and many of the surveys are returned incomplete. The previous chief appraiser said he mailed out 1,000 surveys each year and gets about 30 returned as undeliverable. The previous chief appraiser also noted that many landowners feel that their income information is confidential and fear their taxes will increase if they provide the CAD with this data. According to the previous chief appraiser, he has approached the county extension agent and the local U.S. Farm Service Agency for lease and expense information, but these agencies have also been reluctant to provide information.
Sections 23.41 and 23.51 state that land designated for agricultural use should be valued based on the land's capacity to produce agricultural products. The land's productivity value is found by capitalizing the average net income the land would have yielded under prudent management during the five years preceding the current year.
Section 23.51(4) states that the chief appraiser shall calculate the average net income by considering the income that would have been due a land owner under cash lease, share lease, or whatever lease is typical for the area. Expenses directly attributable to the land's agricultural use are to be deducted and the resulting net income is to be capitalized using a rate established annually by the Farm Credit Bank of Texas (rate plus 2 and one half percent) or 10 percent whichever is greater (Section 23.53 Tax Code).
Annually calculate productivity values for land designated for agricultural use as required by the Tax Code.