Appraisal Standards Review
Coryell County Appraisal District Follow-Up Report
July 2007
Introduction
In July 2004, Oglesby Independent School District (ISD) in Coryell County was identified as one of 54 school districts in Texas meeting the criteria that initiate an Appraisal Standards Review (ASR) of the county appraisal district (CAD) that serves them. In December 2005, the Comptroller’s Property Tax Division (PTD) released the results of the ASR of Coryell County Appraisal District.
The report made 13 recommendations to improve Coryell CAD’s appraisal practices and operations. ASRs are intended to determine why the local values were deemed invalid and to recommend changes in operations and management to improve appraisal practices. The Coryell CAD review evaluated five functional areas: the board of directors; appraisal district policies, procedures and operations; information processing systems; staffing, personnel qualifications and positions; and generally accepted appraisal practices, equality and uniformity of appraisal standards.
At the time of the review, challenges facing Coryell CAD included managing office operations; documenting and implementing procedures; and reappraising regularly and consistently.
Texas Property Tax Code Section 5.102(d) requires that, if the appraisal district fails to comply with the ASR’s recommendations and the Comptroller finds that the CAD board of directors failed to take remedial action before the first anniversary of the date the report was issued, the Comptroller must notify the judge of each district court in the county for which the appraisal district is established. The judge(s) must appoint a five-member board of conservators to implement the recommendations. The board of conservators exercises supervision and control over the operations of the appraisal district until the Comptroller determines, under 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 shall bear the costs related to the supervision and control of the district by the board of conservators.
For the one-year follow-up report, an appraisal district is in compliance with the statute if it takes remedial action to implement the recommendations in the ASR. Remedial action means that 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 the recommended actions, the Comptroller continues to work with the CAD to achieve full compliance. CADs that have completed all recommendations by the one year anniversary have met their statutory obligations and will not require additional monitoring.
PTD conducted an onsite follow-up audit of Coryell CAD in December 2006 to assess its progress in implementing its recommendations. The review team found that the CAD had completed seven of the 13 recommendations.
PTD sent the CAD board members surveys soliciting their views and comments on the ASR. None responded.
PTD believes that Coryell CAD’s efforts to date meet the state’s legal requirements for seven of 13 recommendations. PTD will continue to monitor the CAD’s progress toward completing the six remaining recommendations. This report outlines specific steps the CAD should take.
History and Significant Events
PTD performed its ASR of Coryell CAD because the 2003 Property Value Study (PVS) found that the CAD was appraising single-family and rural residences inconsistently. The PVS also found that local property values of two of the CAD’s five school districts, Oglesby and Jonesboro ISDs, were outside the study’s statistical margin of error. PTD did not identify Jonesboro ISD as eligible to receive the grace period because it also received invalid values in the 2002 PVS.
Oglesby ISD was identified as eligible for the “grace period” provided in Section 403.3011 of the Government Code. Within Oglesby ISD, sample property ratios contributing to the overall finding of invalid value included Category A, Single-Family Residential, with a weighted mean ratio of .8809; and Category D, Rural Real Land, with a weighted mean ratio of .9226.
The Comptroller released the ASR in December 2005. In 2006, the CAD’s chief appraiser implemented or began to implement all recommendations in the ASR, including the development of policies and procedures such as a personnel manual and performance evaluation systems for the chief appraiser and employees. The chief appraiser also has developed and implemented strategies to improve appraisal accuracy and effectiveness such as improving appraisal staff skills; retaining the agricultural advisory board; developing the CAD’s reappraisal plan for 2007 and 2008; and calculating productivity values for agricultural land.
The CAD’s efforts to improve appraisals throughout 2004, 2005 and 2006 produced positive results, as all five of the CAD’s school districts received local value in the final 2005 PVS as well as the preliminary 2006 study. Jonesboro ISD’s value was found to be invalid, but its local value was certified because it was higher than the state’s value.
What Remains to Be Done
The Appendix lists the ASR’s 13 recommendations and summarizes actions taken to date. The Comptroller acknowledges the work Coryell CAD has performed over the last year. The seven fully completed recommendations have assisted the CAD in improving its staffing, management and appraisal practices.
The six recommendations that remain in progress, Recommendations 1, 3, 5, 6, 11 and 12, need the following efforts:
Recommendation 1: Expand the budget to comply with the Tax Code.
The chief appraiser expanded the detail included in the 2006-07 CAD budget by adding a paragraph under the personnel section entitled “Employee Benefits.” The paragraph explains what benefits each employee receives and the formula used to calculate benefits. It does not, however, provide the actual calculations for the benefits.
Section 6.06 of the Tax Code states that the chief appraiser shall prepare a proposed budget for district operations that includes a list showing each proposed position and the proposed salary and benefits for each.
In preparing the 2008 budget, the CAD should ensure that the budget contains the required detail, including the actual calculation of benefits. The CAD should provide PTD with a copy of the amended budget and board minutes indicating its approval.
Recommendation 3: Complete written procedures for developing, maintaining and monitoring professional services contracts.
The chief appraiser is developing the procedures and as of December 2006 had prepared an outline of the document. The chief appraiser estimates the document is about one-third completed.
The chief appraiser indicated he is using International Association of Assessing Officers (IAAO) standards as a basis for the procedures. The CAD has compiled a list of contracts and deliverables and maintains them for staff reference. The CAD should submit a copy of contract procedures to PTD when complete.
Recommendation 5: Maintain a board-approved, up-to-date written procedure manual for district operations.
As of December 2006, the chief appraiser said the CAD has individual written procedures, but these are not yet organized or compiled into a complete manual. The chief appraiser began developing the procedures in January 2006, but work on them has been sporadic.
The chief appraiser should complete and submit these procedures for board approval by August 2007. The procedures manual should clearly describe the steps needed to complete day-to-day tasks for administrative functions such as payroll processing, accounting and purchasing. A copy of the approved manual should be submitted to PTD when complete.
Recommendation 6: Complete the contracted implementation plan to bring the Coryell CAD maps into compliance with Comptroller Rule 9.3002.
Many of the CAD’s maps have been updated and are current. The chief appraiser stated that about 7,000 to 8,000 parcels remain to be mapped, and these are the most problematic because they require research of historical records to identify the locations of deeds, plats and past splits. The CAD was using a contractor to perform the map updates, but after monitoring the vendor’s performance, the appraisal district terminated the contract. The chief appraiser is now in charge of the project. He stated that the CAD is considering a new contract with another vendor. The chief appraiser expects the remaining maps to be complete by December 2007.
To complete this recommendation, the chief appraiser should provide PTD with confirmation by the new vendor that all maps are complete.
Recommendation 11: Maintain board-approved, up-to-date appraisal procedures manuals.
The chief appraiser began developing appraisal manuals in fall 2005. He was unable to complete the manual in 2006 due to the pressure of daily operational and appraisal issues. The chief appraiser resumed work on the manual in October 2006.
To complete this recommendation, the chief appraiser should complete the manual. The completed manual should address deficiencies identified in the original ASR, including:
- providing guidance for the CAD’s cost-based model;
- developing a residential classification guide to promote consistency in appraisals;
- developing guides for appraising non-residential properties such as agricultural land;
- developing procedures for reviewing and assessing the reasonableness of personal property renditions; and
- tailoring the Marshall & Swift Valuation Service guidebook for Coryell County.
In addition, the manual should include procedures for incorporating Uniform Standard Professional Appraisal Practice mass appraisal standards into local practice. A copy of the manual should be submitted to PTD upon completion.
Recommendation 12: Produce a written manual for gathering and analyzing sales data.
The chief appraiser began developing sales procedures in October 2006. Until that time, he directed CAD staff in gathering and analyzing sales data. He also subscribed to a multiple listing service to assist in this analysis.
To complete this recommendation, the chief appraiser should complete the manual. The completed manual should describe the appraisal district’s processes for obtaining sales information from various sources and the steps and procedures needed to confirm sales information. A copy of the manual should be submitted to PTD upon completion.
Appendix
Coryell 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 | Expand the budget to comply with the Tax Code. | In Progress | August 2007 |
The chief appraiser expanded the budget detail in the 2006-07 CAD budget by adding a paragraph under the personnel section entitled “Employee Benefits” that explains what benefits each employee receives and the formula used to calculate the benefit. The actual calculations are not provided. The 2004 budget consisted of one page. The 2005 and 2006 budgets have 16 pages of comparison and detail. In preparing the 2008 budget, the CAD should ensure the budget contains the detail required. A copy of the amended budget and board minutes showing approval should be provided to PTD. |
| 2 | Evaluate the chief appraiser annually based on an objective set of evaluation measures. |
Complete |
According to the chief appraiser, the new evaluation format was developed in November 2005 and approved by the CAD board in December 2005. The board used the new evaluation format for the chief appraiser’s evaluation in August 2006. |
|
| 3 | Complete written procedures for developing, maintaining and monitoring professional services contracts. |
In Progress | August 2007 |
The chief appraiser is using IAAO standards as the basis for preparing the procedures. He has compiled a list of contracts and deliverables for staff use. The completed procedures should be submitted to the board for approval. A copy of the procedures should be submitted to PTD when complete. |
| 4 | Permanently retain an agricultural appraisal advisory board. |
Complete |
The CAD board of directors appointed the agricultural appraisal advisory board at its Sept. 15, 2005, meeting based on recommendations from the chief appraiser. According to the chief appraiser, the board has been very beneficial in providing advice on agricultural valuations. The chief appraiser indicated that the board met three times in 2006, although no meeting minutes were available. |
2.2 Appraisal District Policies, Procedures and Operations.
| Rec. # | Recommendation | Implementation Status | If not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 5 | Maintain a board-approved, up-to-date written procedure manual for district operations. | In Progress | August 2007 |
As of December 2006, the chief appraiser indicated that the CAD had individual written procedures, but these are not organized or compiled into a complete manual. The chief appraiser did not provide PTD with copies of the individual pages. The chief appraiser began developing the procedures in January 2006, but work on the procedures has been sporadic. The chief appraiser indicated that various procedures have been developed as issues arose. The chief appraiser stated that procedures will be completed and submitted for board approval. A copy of the completed procedures should be provided to PTD. |
2.3 Information Processing Systems.
| Rec. # | Recommendation | Implementation Status | If not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 6 |
Complete the contracted implementation plan to bring the Coryell CAD maps into compliance with Comptroller Rule 9.3002. |
In Progress | December 2007 |
In November 2005, the chief appraiser estimated the mapping project would be completed in December 2005. Many of the CAD’s maps have been updated. The chief appraiser estimates about 7,000-8,000 parcels remain to be mapped, but added that these are problematic parcels requiring significant research of historic documents. The parcels that are mapped include parcel and property identification numbers. The CAD was using a contractor to perform the map updates, but after monitoring the vendor’s performance, the appraisal district terminated the contract. The chief appraiser is now in charge of the project. He stated that the CAD is considering a new contract with another vendor. The chief appraiser expects the remaining maps to be complete by December 2007. |
2.4 Staffing, Personnel Qualifications and Positions
| Rec. # | Recommendation | Implementation Status | If not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 7 |
Monitor the 2005-06 staffing changes for positive results, with adjustments as needed. |
Complete |
The CAD budgeted for two new positions in its 2005-06 budget. When the current chief appraiser was hired in June 2005, he determined that the problem was not in the number of positions, but in the skill level of the individual employees. He eliminated one appraiser position in the 2007 budget. According to the chief appraiser, employees in appraisal positions were not versed in basic appraisal practices. This was partially a result of the previous practice of promoting internal staff without requiring proper registration and training. Since his hiring, the chief appraiser has recruited through external advertisements rather than internal promotion in order to attract qualified and trainable individuals. He has registered the appraisal staff with the Board of Tax Professional Examiners and has expanded the training budget to get the staff trained properly. The chief appraiser wants to evaluate the effects of training in 2007 and may request an additional position in 2008, if warranted. |
|
| 8 |
Maintain a board-approved, up-to-date personnel manual. |
Complete |
The chief appraiser developed the manual in February 2006 and submitted it for board action. The board proposed revisions and adopted the manual with revisions at its March 23, 2006, meeting. The chief appraiser indicated he has discussed certain personnel manual topics informally with the CAD’s legal counsel, but the counsel has not officially reviewed the manual. |
|
| 9 |
Adopt and apply an annual personnel performance evaluation system for all district staff. |
Complete |
The chief appraiser developed the evaluation format for employees in April 2006. The development of new evaluation formats occurred after annual employee evaluations were conducted in March 2006, so the CAD has not yet used them to evaluate its employees. According to the chief appraiser, the CAD used the new formats for employee evaluations conducted in January 2007. |
2.5 Generally Accepted Appraisal Practices; Equality and Uniformity of Appraisal Standards
| Rec. # | Recommendation | Implementation Status | If not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 10 |
Adopt and follow a complete reappraisal plan. |
Complete |
The chief appraiser developed the CAD’s reappraisal plan and submitted it for board approval in August 2006. The board formally approved the plan at its August 31, 2006, board meeting. No public hearing was held to discuss the plan. The CAD mailed copies of the plan to its taxing entities and to the Comptroller’s office on Nov. 28, 2006. |
|
| 11 |
Maintain board-approved, up-to-date appraisal procedure manuals. |
In Progress | August 2007 |
The chief appraiser began developing appraisal manuals in fall 2005. He took what existed and added some detail to address minimum requirements. The chief appraiser was unable to complete the manual during 2006 because he was addressing daily operational and appraisal issues. He resumed developing the manual in October 2006. To complete this recommendation, the chief appraiser should complete the manual and submit a copy to PTD. |
| 12 |
Produce a written manual for gathering and analyzing sales data. |
In Progress | August 2007 |
The chief appraiser began developing sales analysis procedures in October 2006. Until that time, the chief appraiser directed CAD staff in gathering and analyzing sales data. The chief appraiser also subscribes to a multiple listing service to assist in analyzing sales. According to the chief appraiser, the manual is about 25 percent complete as of December 2006. The chief appraiser did not produce a copy of the completed portion, however. To complete this recommendation, the chief appraiser should complete the manual and submit a copy to PTD. |
| 13 |
Annually calculate productivity values for land designated as agricultural use as required by the Tax Code. |
Complete |
In February and March 2006, the chief appraiser worked with the agricultural advisory board to develop productivity values for 2006. The chief appraiser plans to meet with the agricultural advisory board in February 2007 to review preliminary calculations to finalize the 2007 values by April 2007. |