Findings of the Property Value Study and Summary
Overview of Property Value Study
The annual PVS estimates the total taxable property value in each school district in Dickens CAD. With a few notable exceptions, the law requires all CADs and PTAD to appraise property at market value. Market value, in essence, is the price a willing buyer would pay a willing seller for the property under normal conditions. Agricultural land and timberland, however, are appraised according to the productivity value of the land's category.
The CAD determines the local appraisal roll value and certifies it to each school district; these values become the school districts' tax roll values. Each school district must submit an annual self-report of its property values to PTAD, which audits the reports for accuracy.
PTAD's estimate of the total taxable value in a school district, called the state value, is made by estimating 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. PTAD then deducts the school district's self-reported, state-mandated homestead exemptions, disabled veterans exemptions, value limitations, reinvestment zones, freeport exemptions, the loss between market value and productivity value of qualified agricultural lands, the school tax ceiling for homeowners over age 65 or with a disability and other state-mandated exemptions.
PTAD issues a preliminary and a final PVS each year. School districts and CADs may protest the findings of the preliminary PVS through an administrative hearings process. This process requires the protester to file a written protest with supporting documentation within 40 days of the issuance of the preliminary PVS. PTAD may amend the findings of the preliminary PVS based on the submission of a written protest, a conference between PTAD and CAD representatives or a formal hearing. A hearings examiner appointed by the Comptroller's general counsel holds the formal hearing; this person is not a PTAD employee. A school district that disagrees with the hearing examiner's final decision may appeal it to Travis County district court.
When conducting the property value study, PTAD assigns property to various categories, such as residential, commercial and rural property, so like property can be studied together.
In general, a ratio indicates the percentage of market value, as determined by PTAD, at which a CAD appraises a property or group of properties. A ratio of 1.0 indicates appraisal at market value – the legal standard. Generally, appraisals with ratios that are close to the standard, for instance between 0.95 and 1.05, are considered reasonably accurate for a property group.
Eligible School District
The PVS identified Patton Springs ISD as an eligible school district when its local value fell outside of the confidence interval limit determined by the 2006 PVS. There were two property categories tested in Patton Springs ISD: Category D, Rural Real property and Category J, Utilities.
Rural real property made up 96 percent of the total test value and 86 percent of the school district's value.
Rural property includes two subcategories: Subcategory D1, Productivity Value of Qualified Acres, which is primarily farm and ranch land that qualifies for the special productivity appraisal; and Subcategory D2, Non-Qualifying Acres and Farm and Ranch Improvements, which are primarily rural homes and land that do not qualify as farm, ranch or timberlands. The differences in value between qualified and non-qualified rural land are wide since qualified land is appraised using a special statutory method to determine the land's productivity value, and non-qualified property is based on what the land would sell for in an open-market transaction.
Subcategory D1 made up 58 percent of the total test value and 52 percent of the school district's value. The category ratio of qualified rural land tested was 0.8869.
Subcategory D2, Non-Qualified Acres and Farm and Ranch Improvements, made up 38 percent of the school district's PVS sample test value and 34 percent of the school district's value. The CAD appraised non-qualified and rural improvements from as low as 84 percent to a high of 109 percent of market value, with a weighted mean ratio of 0.9810.
Category J, Utilities, made up 4 percent of the total PVS sample test value and 6 percent of the school district's value. A review of Category J sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 97 percent to a high of 103 percent of market value, with a weighted mean ratio of 0.9879.
While these ratios show the minimum and maximum property ratios in Dickens CAD, a clearer measure of appraisal performance includes how many of these ratios were within 10 and 25 percent of the median ratio. The median ratio is the ratio in the middle of all the other ratios when sorted by size.
These figures, in conjunction with the coefficients of dispersion (CODs) outlined below, measure the consistency of a CAD's property appraisals at the same percentage of market value, without regard to value. A low COD combined with high percentages indicates uniform appraisals; while a high COD paired with low percentages indicatea poor uniformity of appraisals.
The median ratio for Subcategory D2, Non-Qualified Acres and Farm and Ranch Improvements, in Patton Springs ISD was 98 percent, with 77 percent of the ratios within 10 percent of the median and 100 percent within 25 percent of the median.
The median ratio for Category J, Utilities, in Patton Springs ISD was 100 percent, with 100 percent of the ratios within 10 percent of the median.
Dickens CAD Summary
Dickens CAD's overall median ratio was 1.01.
In Category A, Single-Family Residential, sample ratios ranged from 0.70 to 1.46. The median ratio was 1.11.
In Subcategory D2, Non-Qualified Acres and Farm and Ranch Improvements, sample property ratios ranged from 0.58 to 1.52. The median ratio was 0.98.
In Category G, Oil, Gas and Minerals, sample property ratios ranged from 0.79 to 1.75. The median ratio was 1.01.
In Category J, Utilities, sample property ratios ranged from 0.97 to 1.03. The median ratio was 1.00, but only two sample property ratios were used in Dickens CAD.
Coefficient of Dispersion
The COD, the primary measure of appraisal uniformity, measures the average percentage by which individual ratios vary from the median ratio. According to IAAO in Property Appraisal and Assessment Administration, a low COD indicates appraisals within a category of property are uniform and a high COD indicates inconsistent appraisal of properties as a percentage of market value. A very low COD, however, could indicate sales chasing, which is the practice of using the sale of a property to trigger a change in appraised value of that property to (or near) the property's selling price. In contrast, the appraised value of unsold property is not changed. The practice of sales chasing may cause invalid findings in ratio studies like the PVS. In addition, in the IAAO's Standard on Ratio Studies, Category A, Single-Family Residential, should generally be 15 or less, and for new and homogeneous areas, 10 or less. For Category C, Vacant Lots and Tracts, the COD should be 20 or less, and for income-producing property, the COD should be 20 or less. For other real property and personal property, CODs should reflect the nature of the property, market conditions and the availability of reliable market indicators.
These are the 2006 Dickens CAD CODs:
- single-family residential property was 12.81;
- rural real property was 8.97;
- oil, gas and minerals sample property was 10.65; and
- the COD in utilities was not determined because only two samples were taken.
This is the COD from the 2006 PVS in Patton Springs ISD:
- Rural real property was 5.21.
These CODs indicate relative uniformity in appraisal in these sample property categories in the CAD and ISD.