Chapter 2
Findings of the Appraisal Standards ReviewThis chapter of the report addresses the findings, commendations and recommendations from the appraisal standards review of the Duval County Appraisal District in five sections:
The quality of the property tax system depends on the appraisal district's board of directors. Individuals serving on the board of directors bring to the board 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 district board of directors consists of six members. Members of the board are listed in Exhibit 4.
Exhibit 4
Board of Directors Members
Board Member Represents Starting Date Carlos Montemayor, Jr., Tax Assessor-Collector Duval County 2004 Irma Garza Duval County 2003 Prax Guerra, Jr., Chair San Diego ISD 1993 Ida H. Perez Freer ISD 1989 Romeo Ramirez Benavides ISD 2003 Source: Duval CAD, April 2005. Carlos Montemayor, Jr. is the Duval County Tax Assessor-Collector. Romeo Ramirez is a Benavides ISD board of trustee and is an elected official.
The Board of Directors 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 to act as chief operating officer of the district;
- 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 of directors received a written survey about board activities from the PTD. The survey was broken down into board policies and procedures, chief appraiser and staff, property appraisals, appraisal review boards, and budgeting and financial management. None of the board members responded.
FINDING
The district's budget lacks the detail necessary to comply with Section 6.06 of the Tax Code.Section 6.06 requires a listing of each proposed position including the salary and benefits for the position and each proposed capital expenditure and an estimate of the amount of the budget allocated to each taxing unit. Taxing units are also required to maintain a copy of the budget for public inspection at its principal administrative office.
Copies of the budgets for 2003, 2004 and 2005 were reviewed. Each budget contained detailed listings of proposed capital expenditures, as well as the required budget allocations to each taxing unit. No budget, however, contained a listing of each position showing salary and all benefits for each position. Additionally, the budget contained single line items for capital expenditures and did not outline what the expenditures were, as required by the Tax code. A summary of the 2003, 2004 and 2005 budgets is in Exhibit 5.
Exhibit 5
2003 through 2005 CAD Budgets
Expenditure 2003 Percent of Budget 2004 Percent of Budget 2005 Percent of Budget Chief Appraiser $49,299 11.95% $50,038 11.75% $51,539 11.61% Administrative Secretary $20,944 5.08% $21,896 5.14% $22,553 5.08% Deputy Chief Appraiser $30,437 7.38% $31,820 7.47% $32,775 7.38% Appraiser II $23,847 5.78% $24,930 5.85% $26,063 5.87% Map Man $20,302 4.92% $21,225 4.98% $21,862 4.93% Appraiser Assistant $17,507 4.24% $18,304 4.30% $18,853 4.25% Data Entry Clerk $19,960 4.84% $20,867 4.90% $21,493 4.84% Retirement & Social Security $0 0.00% $0 0.00% $29,600 6.67% Retirement $13,300 3.22% $13,700 3.22% $0 0.00% Social Security $14,500 3.52% $15,000 3.52% $0 0.00% Health & Hospitalization $42,750 10.36% $46,750 10.98% $53,300 12.01% Appraisal engineers $80,000 19.39% $80,000 18.78% $80,000 18.02% Auditing and Accounting $5,200 1.26% $5,200 1.22% $6,700 1.51% Bank Charges $100 0.02% $100 0.02% $100 0.02% BOD expenses $500 0.12% $500 0.12% $500 0.11% Board of Review Expense $1,500 0.36% $1,500 0.35% $1,500 0.34% Books and Subscriptions $600 0.15% $600 0.14% $600 0.14% Capital Outlay $2,000 0.48% $1,200 0.28% $1,200 0.27% CA car allowance $5,400 1.31% $5,400 1.27% $5,400 1.22% Copier Supplies $1,200 0.29% $1,200 0.28% $1,200 0.27% Dues and Memberships $1,150 0.28% $1,150 0.27% $1,150 0.26% Electronic Data Processing $24,000 5.82% $24,000 5.63% $30,000 6.76% Forms and Printing $1,000 0.24% $500 0.12% $500 0.11% Bldg Insurance $3,500 0.85% $3,500 0.82% $3,500 0.79% Janitorial Services $4,000 0.97% $4,500 1.06% $4,500 1.01% Legal Notices and Ads $250 0.06% $450 0.11% $600 0.14% Linen and Laundry $1,100 0.27% $1,100 0.26% $1,100 0.25% Maps and Supplies $900 0.22% $700 0.16% $300 0.07% Motor Vehicles Expense and Travel $2,200 0.53% $2,000 0.47% $2,000 0.45% Office Equipment Repairs and Maintenance $4,000 0.97% $4,000 0.94% $4,000 0.90% Offices Supplies $2,000 0.48% $2,000 0.47% $2,000 0.45% Postage $2,500 0.61% $2,750 0.65% $2,750 0.62% Records Microfilming $250 0.06% $3,300 0.77% $300 0.07% Reserve for contingencies and legal fees $6,000 1.45% $6,000 1.41% $6,000 1.35% School tuition for appraisers $1,500 0.36% $1,500 0.35% $1,500 0.34% Security Alarm $350 0.08% $300 0.07% $300 0.07% Telephone $3,750 0.91% $3,000 0.70% $3,000 0.68% TWC & Payroll taxes $700 0.17% $900 0.21% $600 0.14% Utilities $3,150 0.76% $3,150 0.74% $3,150 0.71% Workers Compensation $850 0.21% $900 0.21% $1,400 0.32% Total $412,496 100.00% $425,930 100.00% $443,888 100.00% Salary and Benefits total $252,846 61.30% $264,530 62.11% $278,038 62.64% Source: Duval CAD Budgets. The board of directors is required by law to hold a public hearing on the budget. The hearing for the 2003 budget was held on September 11, 2002. The notice was posted with the county clerk's office on August 14, 2002 and a notice was placed in The Picture on August 7, 2002. For 2004, the budget hearing was held on August 19, 2003, with a notice placed in the paper on August 6, 2003. For 2005, the budget hearing was held on August 11, 2004, with a notice placed in the paper on August 4, 2004.
The budget summarized above does not give sufficient detail for a member of a taxing unit or a member of the public to understand how district employees are compensated. With more than 59 percent of the budget going to wages and benefits, both 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.
RECOMMENDATION 1
Expand the detail of the budget presented to the board of directors for adoption to include the benefits for each employee and a detailed list of each capital expenditure.FINDING
The district contracts with Thos. Y. Pickett & Company, Inc. (TYP) for appraisal services and data processing services, but the contracts lack standard contract provisions and do not provide for effective contract monitoring.The contract for professional appraisal services with TYP does not include the dates when services will be delivered. The contract does list several appendices with properties the appraisal firm needs to appraise. The contract was signed by the board chairmen, sometime in 2003, with the day and month not included in the form contract. The contract covers services for tax years 2004 and 2005. The contract expires on December 31, 2005 unless the parties agree to extend it.
TYP is to provide appraisals for oil and gas properties, utilities, railroads and pipelines and defines these terms in the contract. The company will make sufficient staff available for ARB hearings at no additional charge. TYP will also not charge the CAD for expert testimony as required in any civil litigation arising from its appraisals.
The district agreed to pay TYP $80,000 in 2004 and $80,000 in 2005. The payments are due in February, August and November of each year, with one quarter of the contract costs due in February and November and one half of the contract cost in August. The contract does not tie the payments to any deliverables. The contract states the deliverables for the entire year are: copies of appraisals and supporting data; a tabulation of technical data and appraised values pertaining to any and all such properties. The deliverables are not defined and there is no listing of the actual properties to be appraised.
Except for a clause concerning legislative changes, there are no termination clauses in the contract or a venue clause, which are routine clauses in governmental contracts.
For invoices on contracts, the chief appraiser reviews and approves each invoice. There is no written procedure for invoices and no status reports of work progress are provided by the contractor.
The district has several other contracts, letter agreements or letter of proposals including ones for bookkeeping, legal services and copying services.
The district provided an engagement letter from its bookkeeper signed by the chief appraiser. The letter contains a scope of work, and a deliverable with an approximate date that the work will be done. The bookkeeper is responsible for posting coded transactions, proposing adjustments or corrections to journal entries, preparing trial balances, and preparing state and federal sales and payroll tax returns on a monthly basis. On an annual basis, the bookkeeper is also responsible for proposing adjustments or corrections to journal entries, state and federal income tax returns, and year-end sales and payroll tax returns for the state and federal government. The letter also specifies that the bookkeeper is also responsible to answer any inquires on specific tax matters and that the engagement will continue month to month until cancelled by either party. The letter does not contain a venue or dispute clause or explain where the bookkeeper will provide services, in the district office or the bookkeeper's office.
The district also provided a letter proposing representation by an attorney. The letter contains hourly and travel rates and a retainer fee arrangement for the year 1997. The letter does not contain a detailed scope of work or services, a dispute or venue clause, district responsibilities, grounds for termination or acceptance and is not signed by the chief appraiser
The district has a contract with South Tech Copier Service Inc. that covers copying services for the district.
IAAO's Standard on Contracting for Assessment Services, Section 4, requires contracts to have specific provisions, including a detailed scope of work, deliverable, due dates, etc.
RECOMMENDATION 2
Develop a procedure for creating, managing and monitoring contracts, put deliverables and due dates in all future contracts and tie payments to all deliverables.2.2
Appraisal District Policies, Procedures and OperationsIn 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.
FINDING
The Duval CAD does not have well documented written policies and procedures to guide the day-to-day operations of the district in areas such as payroll processing, accounting, purchasing and the like.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, and it is not 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.
For checks, for example, a clerk types the check and the chief appraiser and the board chair sign each check. The board then approves a list of checks that have been sent out each month. The district does not use purchase orders. The appraisal contract has not been competitively bid in four years, although the cost of the contract has remained the same at $80,000 annually. The district does not have written purchasing procedures.
A policy tells a person, department, or group of individuals what they must do, whereas procedures 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 reasons. 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.
For example, the Jefferson CAD, 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.
RECOMMENDATION 3
Develop a comprehensive policy and procedures manual for district operations.FINDING
The district is using outdated Comptroller forms for personal property and real estate renditions, notice of protest, appointment of agent for property taxes, homestead exemptions, and other functions. Exhibit 6 shows the name of the forms, date of the form district is using and the current date of the form.Exhibit 6
Forms Used by Duval CAD
Form Name Form Number Comptroller Form Date District is Using Current Form Date General Real Estate Rendition of Taxable Property 50-141 12-99 12-03 Property Tax - Notice of Protest 50-132 9-95 4-03 General Personal Property Rendition of Taxable Property 50-142 8-97 12-03 Application for Homestead Exemption 50-114 12-89 3-04 Application for Disabled Veterans or Survivors Exemptions 50-135 12-97 3-04 Application for Charitable Organization Property Tax Exemption 50-115 12-97 3-04 Application for Religious Organization Property Tax Exemption 50-117 12-97 3-04 Source: Duval CAD, copies of forms. Other forms used by the district are also out of date. All of the forms listed in Exhibit 6 have changed as the result of changes in the law. The district therefore is not collecting some or all of the correct information it is required to collect according to statute.
If the district uses Comptroller forms, it must use the most current version of the form available. Some locally developed forms, such as personal property rendition forms, must also be approved by the Comptroller prior to the district using the forms (TAC Rule 9.3031).
The chief appraiser said that the CAD now has the current forms that the Comptroller provided in 2003 and 2004. Examples given to the reviewer were either old forms that were not discarded or computer generated forms that had not been updated by their software vendor, even after it was brought to the vendor's attention. The district is going to acquire a new software system for the 2006 tax year and the updated forms will be added to the district's computer program.
RECOMMENDATION 4
Audit all district forms and immediately begin using all updated Comptroller forms or develop local forms that comply with statutory requirements.2.3
Information Processing SystemsAppraisal 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.
FINDING
Duval CAD uses only paper maps and has no electronic mapping system or geographic information system. Currently, the district relies on paper maps, some which have been unchanged since the inception of the district. The chief appraiser noted in the self assessment questionnaire that it only had partial maps of the county. The district does have some aerial photographs of portions of the county, in addition to the paper maps.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.
Once integrated, the mapping system would have many benefits including expanded public and staff access to more information and more current, timely integration of data between the mapping and recently purchased automated appraisal systems.
RECOMMENDATION 5
Implement a complete automated mapping system and integrate the mapping and appraisal systems and acquire the proper hardware for all staff.2.4
Staffing, Personnel Qualifications and PositionsPersonnel 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 Duval CAD staff is organized as outlined in Exhibit 7.
Exhibit 7
Duval County Appraisal District Positions,
Certifications, Years with Duval CAD and Salaries
Position BTPE Certification Years with
Duval CADSalary Chief Appraiser RPA-CTA 24 $51,539 Admin. Secretary - 23 $22,553 Deputy Chief Appraiser PA-CTA 23 $32,775 Map Man - 1 $21,862 Appraiser RPA-CTA 17 $26,063 Clerk - 14 $18,853 Clerk - 24 $21,493 Source: Duval CAD, 2005. Appraisal district 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 Class II and Class III. In addition, RPAs must re-certify five years from the date of first certification and every five years while registered.
FINDING
Duval CAD has a personnel policy manual that has not been updated since 1992.The personnel policy manual is 28 pages in length and has a five-page table of contents. It addresses the district's hiring practices, such as individual employment contracts, nepotism and probationary employment. The manual is divided into eight sections including hiring, probationary employees, temporary employees, regular employees, benefits, separation, personnel records, and complaints.
The manual is out of date and does not address recent changes in personnel law, or older changes, such as the American with Disabilities Act and the Family Medical Leave Act.
RECOMMENDATION 6
Update the personnel policy manual.FINDING
Duval CAD has a personnel policy manual explaining that employees are evaluated annually, but the district is not evaluating its staff.Page 10 of the manual, section III K, states that regular employees will receive an annual written performance evaluation by the chief appraiser on the most recent anniversary of date of employment. The personnel evaluation form provides the employee the opportunity to comment on his or her evaluation and all evaluations are to be kept in the employees personnel file.
The district did not provide any copies of written evaluations or any evidence the district is evaluating staff.
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 are informed of the criteria on which they will be evaluated. Evaluation and performance appraisal ratings are based on the evaluation instrument and cumulative performance data gathered by supervisors throughout the year.
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.
RECOMMENDATION 7
Evaluate staff in writing according to district policy.2.5
Generally Accepted Appraisal Practices; Equality and Uniformity of Appraisal StandardsThere 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 chief appraiser must also follow the law and Comptroller rules when determining special use values such as productivity values.
FINDING
The Duval 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 Property Tax Code. The chief appraiser said that Duval CAD does not send out any farm or ranch surveys to collect agriculture information for the development of local agriculture values. The district collects no information on leases and has no written procedures for collecting data on agricultural activity in the county. The district's agricultural advisory board meets once or twice a year, rather than the required minimum of three times a year, and is not active in providing the chief appraiser information on agricultural conditions in the district.In the 2003 Property Value Study, San Diego ISD received an invalid finding due in part to its productivity values. The weighted mean ratio was 0.7399, far below the lower margin of error of 0.9500. The Comptroller found the school district's productivity values to be low - clearly a result of the appraisal district's lack of current data. The 2004 PVS also established that the district continued to under-appraise land set aside for agriculture use. The chief appraiser provided a manual of information in which a few pages contained values on agriculture.
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).
RECOMMENDATION 8
Annually calculate productivity values for land designated for agricultural use as required by Section 23.41 and Section 23.51 of the Property Tax Code.FINDING
Duval CAD does not have a comprehensive reappraisal plan. The chief appraiser said the districts reappraisal plan is included as a part of the CAD's appraisal procedures. The procedures do not specifically identify the information as a reappraisal plan. The document the district provided as its procedures/reappraisal plan stated that document was "prepared and published to provide the Duval County appraisal district citizens and taxpayers with a better understanding of the appraisal district's responsibilities and activities."The district's procedures/reappraisal plan does not give any details as to the steps to be performed, staffing levels, workflow or the costs associated with plans and goals. The procedures/reappraisal plan does not list specific procedures for determining how the sales are to be used in reappraising property in each market area, or how the district's internal ratio study is used to determine the need for reappraisal in each market area. The report does not discuss how market areas might be grouped to provide sufficient sales for appraisal model analysis and development.
The procedures/reappraisal plan does not link the appraisal district's budget, training, contracting, market analysis, field inspections and data processing in one document. The appraisal district board of directors has not adopted a plan that includes documentation of how the appraisal district staff will implement the reappraisal plan. In addition, the board of directors has not adopted or reviewed a work plan that staff would follow to accomplish the reappraisal policy.
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 Duval County's school districts to receive an invalid finding in the state's property value study.
Section 25.18 of the Property Tax Code requires appraisal districts to implement a plan for reappraisal, which provides for the reappraisal of property within the district once every three years. A comprehensive reappraisal plan is critical to the success of the district in many ways including: budgeting, market analysis, continuity of district performance during staff changes, as well as a directive for current staff.
The chief appraiser said the last reappraisal was in 2002. The chief appraiser reported in the 2003-2004 Appraisal District Operations Survey, however, that the district reappraised in 2003 and planned to reappraise in 2004
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 inspections.
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.
RECOMMENDATION 9
Draft and adopt a comprehensive reappraisal plan.FINDING
The district does not have comprehensive appraisal manuals for valuing all types of property in the district.The district uses portions of the Comptroller's 2001 Field Appraiser guide as its appraisal manual. The 2001 Field Appraiser guide was replaced by the 2003 Field Appraiser guide more than two years ago, and not adapted to local conditions in Duval County.
Section 23.01, Property Tax Code, mandates that appraisal districts appraise property by applying generally accepted appraisal methods and techniques. This section also requires appraisal districts to comply with 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 to value.
A comprehensive appraisal procedures manual can provide staff information regarding local procedures for performing fieldwork for each type of property the staff appraises as well as directions for gathering and processing property characteristics and for reviewing and evaluating appraised values.
RECOMMENDATION 10
Develop an appraisal procedures manual that includes typical Duval County properties and comprehensive instructions on how to perform an appraisal.FINDING
Duval CAD did not perform ratio studies in 2003 and 2004, although the chief appraiser says he is performing ratio studies in 2005. The district computer system was down at the time of the review team's visit and the district did not provide the review team with copies of the ratio studies. The chief appraiser said ratio studies on user selected combinations of properties were limited due to software limitations. The chief appraiser also said this problem is being addressed with the new vendor.The appraisal district's automated appraisal system will produce ratio studies statistics. The chief appraiser provided a sales report with some sales ratios on it, subsequent to the review team's visit, but it was a two-page report and it was unclear how or if the district was using ratio studies to adjust property values.
Appraisal districts use ratio studies to plan appraisal maintenance programs. The ratio study results indicate those market areas in the appraisal district where values no longer reflect the market. If the ratio study in a market area shows the appraised values do not reflect the market, the appraisal district appraises the available sales to determine the market adjustment factor. The market adjustment factor is the percentage the appraisal district uses to adjust the appraisal schedules to reflect the market value.
Frequent ratio studies and the appraisal maintenance that follows enable an appraisal district to keep its values at or near the market. Ratio studies are also used to determine actual appraisal performance of the district.
RECOMMENDATION 11
Use ratio studies to make effective reappraisal decisions and use the results in the appraisal process.FINDING
Duval CAD does not have written procedures for gathering and analyzing sales. The district does send out sales verification letters. There is no MLS in Duval County. Sales are typically discovered by the district's field appraisers. The chief appraiser said they look for sales in the San Diego newspaper, talk to realtors, collect building permits and drive the county.Section 5.07 of the Property Tax Code requires appraisal districts to submit sales data to the Comptroller's office twice a year beginning June 2005. Currently, the CAD provides the Comptroller's field appraiser with a list of confirmed sales. The CAD does not submit warranty deed data to the Comptroller's office. The Comptroller's office mails sales questionnaires based on deed transfers and shares the responses with the appraisal districts. By providing the state with sales and deed information, the district would have another source of confirmed sales data.
The chief appraiser said the district will develop written guidelines for gathering and analyzing sales.
RECOMMENDATION 12
Establish written procedures for gathering and analyzing sales.
