Overview of County Appraisal District
County History and Demographics
According to the Handbook of Texas, Duval County was formed in 1858 from parts of Nueces, Live Oak and Starr counties.
Duval County is in south central Texas surrounded by McMullen, Live Oak, Webb, Jim Wells, Brooks and Jim Hogg counties. Duval County was named for Burr H. Duval, who fought in the Texas Revolution and was killed in the Goliad Massacre.
Mineral resources include caliche, clay, salt domes, sandstone, uranium, oil and gas.
The population of the county for 2003, according to the County Information Project, was 12,616 residents. The county comprises 1,795 square miles of nearly level to undulating terrain covered with brush, small trees, shrubs and cacti.
According to the County Information Project, the median per capita income is $23,545, and 27.5 percent of the population lives at or below the poverty level.
San Diego, the county's largest town and the county seat, is in the north central part of the county at the intersection of state highways 44 and 359.
The county has four school districts: Benavides Independent School District, Freer Independent School District, Ramirez Common School District and San Diego Independent School District.
Appraisal District Organization and Staffing
The appraisal district was formed in 1981 and became active in 1982. The district contracts with Thos. Y. Pickett and Company, Inc. (TYP) for professional appraisal services on mineral, utilities, personal property and industrial appraisals.
Exhibit 1 outlines the district's organization.
Scope of Office
The Duval CAD Board of Directors has no authority to set values or appraisal methods. The chief appraiser carries out the appraisal district's legal duties, hires the staff, makes the appraisals and operates the appraisal office.
The district provides appraisal services for seven taxing units: Duval County, Ramirez Common School District, Benavides Independent School District, San Diego Independent School District, Freer Independent School District, Duval County Vocational District, and Duval County ESD #1.
Exhibit 2 presents the types of properties appraised by Duval CAD in tax year 2003. In-house staff handles all property categories except Category G (minerals), Category J (utilities), and part of Category F2/L2 (industrial - real/personal), which are appraised by TYP.
Duval CAD Property by Category Summary with Assigned Responsibility
Property Category Account Type Description Responsible for Appraisal Category A Residential In-house staff Category B Multi-Family In-house staff Category C Vacant Lots In-house staff Category D/E Farm/Ranch Land w/Impr. In-house staff Category F1 Commercial Real In-house staff Category L1 Commercial Personal In-house staff Category G Minerals Contracted Appraisal Firm Category J Utilities Contracted Appraisal Firm Category F2 Industrial Real Contracted Appraisal Firm Category L2 Industrial Personal Contracted Appraisal Firm Source: Duval CAD, 2005.
Most appraisal districts contract out some appraisals to contract appraisal firms. PTD does not track parcel counts appraised by external appraisers in appraisal districts. Appraisal districts contracts with external appraisers routinely do not include a parcel count for the number of appraisals an external appraisal company will perform. In assessing the staff to parcel count ratio in each appraisal district, PTD uses parcel counts reported in the district's 2003 self report and the county's independent school districts' self reports to calculate the parcels per appraisal district staff. PTD does include all of the commercial real and personal property parcels in the calculation, since PTD is unable to determine exactly how many parcels are assigned to in-house staff versus a contract appraisal firm. The total parcels appraised in-house are calculated by summing the total number of parcels reported in Categories: A, single family residential; B, multifamily residential; C, vacant lots; D, rural land; E, rural improvements; F1, commercial property; L1, personal property; M1, mobile homes; O, residential inventory; and S, special inventory, as shown in Exhibit 3.
Reported Data On Parcels, Categories Staffing, Training And Operations Comparison to State and Group Averages
General Information Duval State Avg. Group Avg. Parcel Size Group (by number of locally appraised parcels) 15,000 - 19,999 Estimated # Locally Appraised Parcels 17,170 55,463 17,647 # Taxing Units 7 15 9 Locally Appraised Parcels to Staff 2,453 3,404 3,021 2003 Composition by Percentage
of Value (Self Report):
Duval State Avg. Group Avg. Residential Value 9.8% 52.6% 26.8% Non-Residential, Non Mineral 60.1% 43.6% 58.7% Non-Residential, Mineral 30.1% 3.7% 14.5% 2003 Composition by Account Category Type (Operations Survey): Real Property 18,541 45,804 17,054 Mineral Property 12,599 13,536 8,362 Business Personal Property 265 4,689 935 Individual Personal Property 291 1,342 457 Total Accounts 31,696 65,372 26,809 2003 Composition by Locally Appraised Parcel Category (Estimated from Self Report): Duval State Avg. Group Avg. Parcel Type # Parcels % of Parcels A 3,685 21.5% 44.1% 29.6% B 27 0.2% 1.0% 0.3% C 1,509 8.8% 13.1% 18.7% D 9,397 54.7% 24.7% 30.3% E 1,495 8.7% 4.5% 10.5% F1 400 2.3% 3.1% 3.3% L1 299 1.7% 5.7% 4.1% M1 357 2.1% 2.2% 2.5% O 0 0.0% 1.4% 0.6% S 1 0.0% 0.1% 0.0% Total 17,170 100.0% 100.0% 100.0%
PTD estimated that Duval CAD staff are responsible for appraising about 17,170 parcels. 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 large taxing units run from 3,000 to 3,500 parcels per staff member with an average of 2,500.
Districts comparable in size to Duval are Callahan, Gray and Bee. The number of parcels per staff member for Duval CAD was 2,453. Callahan CAD was 3,312, Gray CAD was 2,065 and Bee CAD was 4,940. Of course, workloads in appraisal districts may vary due to any number of considerations other than parcel count. Geography or the size of an appraisal district may have a significant impact on the time required to work all parcels. The types of properties may also have an impact. More complex commercial and sometime even residential properties may require more staff to appraise. The data given here is meant to give the reader at least some comparison to other appraisal districts with similar parcel counts and the standards outlined by IAAO.
Exhibit 3 includes reported data concerning CAD and state and group averages.
Reported Data On Parcels, Categories Staffing, Training and Operations Comparison to State and Group Averages (continued)
Financial and Staffing
Information (Operations Survey)
Duval State Avg. Group Avg. 2003 Budget $416,500 $1,079,695 $379,748 2003 Surplus $7,154 $71,620 $26,419 2003 Surplus as % of Budget 1.7% 6.6% 7.0% 2004 Budget $425,980 $1,104,961 $390,830 % Change in Budget 2.2% $0 2.9% 2004 Budget per Total Local Parcel $24.81 $19.92 $22.15 Staffing Full Time 7 18 7 Part Time * 2 2 Supervisory 2 3 2 Programmers * 2 1 Supervisory to Staff Ratio 1:4 1:5 1:4 Chief Appraiser Performs Appraisals? Yes 2004 Total Compensation $50,038 $53,564 $44,059 Appraisers Full - Time 2 8 2 Part - Time * 0 2 Salary Range: Low $24,930 $24,504 $23,317 High $31,820 $37,521 $31,236 Training Budget $1,500 $8,832 $5,994 # Registered with BTPE (1) 3 9 4 Types of BTPE Certification: RPA (2) RTA (3) RTC (4) All 3 0 0 0 Operations Information
Duval State Avg. Group Avg. Reappraisal Last Year of Reappraisal 2003 Next Year of Reappraisal 2004 Type of Appraisal: Cyclical Method of Appraisal: Combination Protests 48 3,131 159 Protests per Parcel 0.2% 4.7% 0.6% Consolidated Collection No Collection Budget $0 Geographic Information System (GIS)? * Percent GIS Complete * 80% 69% Board of Directors Members 5 6 6 Tax Assessor Votes? No Elected Members 1 3 2 Note: An asterisk (*) is shown where data was not reported.
Source: Duval CAD's and ISDs' 2003 self reports and Comptroller 2003-2004 Appraisal District Operations Report and Comptroller comparative data for state and group averages from district self reports and the Appraisal District Operations Report.
Notes: (1) BTPE - Board of Tax Professional Examiners. (2) RPA - Registered Professional Appraiser. (3) RTA - Registered Texas Assessor-Collector. (4) RTC - Registered Texas Collector.
Self Evaluation Questionnaire
In preparation for the Appraisal Standards Review, Duval CAD was requested to complete the IAAO's Self Evaluation Questionnaire. This instrument allows an appraisal district to assess their compliance with acceptable procedures, standards and organization. Each district receives an electronic version of the questionnaire and the complete IAAO manual explaining each question with information on how to answer each question. Each district undergoing an appraisal standards review is requested to perform the self assessment, with the goal of assisting the district in determining how well it is performing.
Duval County answered 110 out of 110 questions. The district's answers are included in Appendix 15.
In Chapter 1, on legal issues and assessment cycles, the district noted it has the size, resources and fiscal capacity to perform appraisals effectively.
In Chapter 2, on resource management, the district noted it did formal planning, had adequate facilities, and sufficient staff.
Chapter 3, on computerization, and Chapter 4, mapping, the district noted it does not provide web access to the public and does not have a geographic information system. The district noted it has partial maps, but they are not computerized.
In Chapter 5, data collection, the district noted its computer records contain information on property use, legal uses, and highest and best use.
In Land Evaluation, Chapter 6, the district does not use software to help develop land values. In Chapters 7, 8, and 9, on residential property valuation, commercial property valuation, and sales data, respectively, the district noted it does use all three approaches to value to determine market value, including the sales comparison approach. The district uses the sales comparison method the most because of lack of income data provided to the district. The district uses the confirmed sales provided by property owners in determining improved, vacant lots and rural land values. The district noted that it does not maintain automated income data and does not use sales to determine capitalization rates. The district also noted it cannot run ratio studies by user-selected combinations of property characteristics.
In Chapter 10, on personal property assessment, the district uses several methods to discover taxable business property, although it did not elaborate on what these methods are.
In Chapter 11, on assessment administration, the district noted it updates ownership and legal descriptions of property within 30 days of a property transfer. The district noted in Chapter 12, defense of values, that the district will use an independent appraisal in difficult appraisal cases if necessary.
In public relations, Chapter 13, the district noted it has an active public relations program for reaching out to the public, but did not elaborate.
Findings of the Property Value Study and Summary Worksheets
The Property Value Study (PVS) determines the total property value in each school district in the Duval CAD. With a few notable exceptions, all CADs and the Property Tax Division (PTD) are required by law to appraise property at market value. Agricultural land and timberland are appraised according to productivity value. Market value, in short, is the price that a property would transfer from a willing seller to a willing buyer. For it to be a market transaction, neither party may be under duress to buy or sell, the sale must be on the market for a reasonable time and the parties to the sale are not related.
Local tax roll value, or local value, is determined by the county appraisal district and submitted to PTD on its annual self-report. The PTD staff estimates the total taxable value in a school district, referred to as state value, by determining market value or by accepting the local appraised value in each property category (see Exhibit 2) in the district 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 homeowners over age 65 or disabled and other state-mandated exemptions.
PTD issues a preliminary and final PVS each year. School districts and county appraisal districts may protest the findings of the preliminary PVS through an administrative hearings process with the Comptroller, and school districts may protest the findings of the final PVS in district court. 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. The PTD may amend the findings of the preliminary PVS based on the submission of the written protest, an informal hearing or a formal hearing. Formal hearings are held by a hearings examiner, appointed by the Comptroller's General Counsel, and reporting directly to the Comptroller. The hearings examiner is not an employee of the PTD.
When conducting the property value study, PTD assigns properties to various categories, such as residential, commercial and rural property. Properties are divided into categories so that like properties are assessed together.
Duval CAD and San Diego ISD did not appeal the findings of the preliminary study. Benavides ISD, however, did appeal the preliminary study. Neither school district was able to get into the confidence interval and both school districts were certified as eligible in July 2004.
A review of the school districts in the county indicates that Duval CAD is inconsistently assessing the native pastureland that qualifies for the special productivity appraisal. Duval CAD is also inconsistently assessing the producing oil and gas minerals as determined by the PTD. In the 2003 PVS, San Diego and Benavides ISDs fell outside the study's statistical margin of error. The under appraising of primarily farm and ranch land that qualifies for the special productivity appraisal is the primary reason that the school's values are not within the acceptable range determined by the study. Other school districts in the county are Freer and Ramirez ISDs.
In general, a ratio of between 0.95 and 1.05 in any property category makes it more likely that the district is appraising property within the margin of error, or that it is appraising property at or near market value, according to the PVS.
Eligible School District
San Diego ISD was identified as an eligible district with value outside of the confidence interval limit. There are four property categories tested in San Diego ISD:
(1) category A, Single-Family Residences, making up 26.7 percent of the district's value with a weighted mean ratio of 0.9902;
(2) category D, Rural Real, making up 22.8 percent of the district's value with a weighted mean ratio of 0.8465;
(3) category G, Minerals, making up 21 percent of the district's value with a weighted mean ratio of 0.9923; and
(4) category J, Utilities, making up 16.7 percent of the district's value with a weighted mean ratio of 0.9960.
Category A has 33.6 percent of the tested value. The appraisal district is placing a value on the category A single-family residences near market value with a weighted mean ratio of 0.9902.
Category D, Rural Real has 30.2 percent of the tested value with a weighted mean ratio of 0.8465. Subcategory D1 consists of 49.3 percent of category D's value and 14.9 percent of the tested value. D1 tested primarily in native pastureland appraisals with a weighted mean ratio of 0.7398. Subcategory D2, has 50.7 percent of category D's value and 15.3 percent of the school district's total tested value. D2 tested near market value with a weighted mean ratio of 0.9844. Category G, Minerals property is 21 percent of the district's value and tested near market value and with a weighted mean ratio of 0.9923. The district valued the minerals property from as low as 76 percent to a high of 152 percent of market value. Category J, Utility property is 16.7 percent of the district's value and tested near market value with a weighted mean ratio of 0.9960.
Other School Districts
Benavides ISD is outside of the confidence interval limit. There are four property categories tested in Benavides ISD:
(1) category A, Single-Family Residences, making up 9.9 percent of the district's value with a weighted mean ratio of 0.9733;
(2) category D, Rural Real, making up 16.9 percent of the district's value with a weighted mean ratio of 0.8079;
(3) category G, Minerals, making up 34.4 percent of the district's value with a weighted mean ratio of 0.8804; and
(4) category J, Utilities, making up 22.2 percent of the district's value with a weighted mean ratio of 0.9836.
Category A has 12.8 percent of the tested value. The appraisal district is placing a value on the category A single-family residences slightly below market value with a weighted mean ratio of 0.9733. Category D, Rural Real has 22.9 percent of the tested value with a weighted mean ratio of 0.8079. Category D represents rural properties and contains two subcategories: D1 and D2. Subcategory D1, Productivity Value of Qualifying Acres, is primarily farm and ranch land that qualifies for the special productivity appraisal. Subcategory D2, Non-Qualifying Acres and Farm and Ranch Improvements, is primarily rural homes and land that does not qualify for farming or ranching or timberlands. The differences in value between qualified and non-qualified rural land are often wide since D1 land is appraised using a special statutory method to determine the lands productivity value and D2 is based on what the land would sell for in an open market transaction.
Subcategory D1 consists of 69.7 percent of category D's value and 15.9 percent of the tested value. D1 tested primarily in native pastureland appraisals with a weighted mean ratio of 0.7552. Subcategory D2, has 30.3 percent of category D's value and 6.9 percent of the school district's total tested value. D2 tested somewhat below market value with a weighted mean ratio of 0.9625. Category G, Minerals property is 34.4 percent of the district's value and tested below market value with a weighted mean ratio of 0.8804. The district valued the minerals property from as low as 73 percent to a high of 125 percent of market value. Category J, Utility property is 22.2 percent of the district's value and tested near market value with a weighted mean ratio of 0.9836.
Freer ISD is just within the confidence interval limit. Category A has 12.1 percent of the district's value, and 17 percent of the tested value. The appraisal district is placing a value on the category A single-family residences near market value with a weighted mean ratio of 0.9897. Category D, Rural Real has 8.6 percent of the district's value and tested with a weighted mean ratio of 0.7789. Subcategory D1 consists of 56.6 percent of category D's value and 7.2 percent of the tested value. D1 tested primarily in the native pasture appraisal with a weighted mean ratio of 0.6789. Subcategory D2, however, has 43.4 percent of category D's value and 5.5 percent of the school district's total tested value. D2 tested below market value with a weighted mean ratio of 0.9647.
Ramirez ISD is just within the confidence interval limit. Category A has only 0.8 percent of the district's value, and was not tested in this school district. Category D, Rural Real has 41.4 percent of the district's value and tested below market value with a weighted mean ratio of 0.9106. Subcategory D1 consists of 67.4 percent of category D's value and 33.5 percent of the tested value. D1 tested primarily in the dry cropland appraisal with a weighted mean ratio of 0.8862. Subcategory D2 has 32.6 percent of category D's value and 16.2 percent of the school district's total tested value. D2 tested somewhat below market value with a weighted mean ratio of 0.9655. Category G, Minerals property is 31.7 percent of the district's value and tested very near market value with a weighted mean ratio of 1.0165. The district valued the minerals property from as low as 96 percent to a high of 102 percent of market value. Category J, Utility property is 22.9 percent of the district's value and tested near market value with a weighted mean ratio of 0.9904.
Duval CAD Summary
In summary, the Duval CAD is inconsistently valuing oil and gas properties (category G) from as low as 73 to a high of 271 percent of market value. The productivity value of qualifying acres, primarily farm and ranch land (category D1), is consistently under valued in native pastureland. Although the dry cropland is also consistently being under appraised, it is only a small portion of the district's value.
For a statistical explanation of why the district was selected as eligible, see Appendix 18.