Chapter 1
Overview of County Appraisal District1.1
County History and DemographicsAccording to The Handbook of Texas Online, El Paso was part of Santa Fe County, which was organized in 1848. Two years later Santa Fe County was split into four counties, including present day El Paso County. The county's name, which is Spanish for "the pass," comes from the name early Spanish explorers gave the area where the Rio Grande River cut through the mountains to form a natural passageway.
El Paso County is located in the westernmost part of Texas on the Rio Grande River. It is bordered by Mexico to the south, New Mexico to the west and north and Hudspeth County to east. El Paso and Hudspeth counties are the only two counties in Texas that are in the Mountain Time Zone. The city of El Paso, the county's largest city serves as its county seat. The city of El Paso is located on Interstate Highway 10, 544 miles northwest of San Antonio.
El Paso County is comprised of 647,808 acres consisting mostly of semi-arid desert in the east, northeast and a small portion to the west. The Franklin Mountains bisect the county from the north to the south. Separating El Paso from Mexico along its southerly boundary and New Mexico along its westerly boundary is the Rio Grande River. The Rio Grande River provides above ground irrigation to farm land adjacent to the El Paso side of the river for the production of cotton, pecans and alfalfa with small amounts of vegetables and fruits also being grown.
The 2004 county population, according to the Texas State Data Center and Office of the State Demographer, was 711,559, with the city of El Paso having 588,452 residents. The population of the other communities in the county was: Fabens, 8,174; Tornillo, 1,624; Clint, 981; San Elizario, 11,640; Socorro, 28,857; Horizon City, 7,757; Canutillo, 5,257; Vinton, 2,035; and Anthony, 4,117.
In September 2005, the El Paso County labor force totaled 299,360, of which 22,049, or 7.4 percent of the labor force, were without work. Exhibit 1 shows the breakdown of the major employment categories in the El Paso Metropolitan Statistical Area. The county has a diverse labor force base, with the government sector leading the way.
Exhibit 1
El Paso Metropolitan Statistical Area
Industry Employment Categories
September 2005
Industry Employment Local Government 42,391 Retail 34,880 Education and Health Services 31,339 Professional Business Services 30,455 Leisure and Hospitality 24,956 Manufacturing 22,633 Transportation and Utilities 13,072 Construction 12,056 Financial Activities 11,935 Wholesale 10,167 Federal Government 9,012 State Government 8,420 Other Services 7,972 Information Services 4,696 Total 263,984 Source: Texas Comptroller of Public Accounts. The total wages during 2004 were $7.1 billion, which translates to average annual individual wages of $27,991, a 10.4 percent increase over the previous five years. The median income in the county, as of 2003, was $20,875, a 16.7 percent increase over a five-year period.
As demonstrated by Exhibit 2, home sales in El Paso County have been steadily increasing during the last five years. From 2000 to 2004, the number of annual home sales saw an increase of 14.3 percent and the average price of these sales has increased 15.6 percent. Property values in El Paso County rose 15.9 percent during the same period. Residential properties saw a 20.5 percent increase from 2000 to 2004 (Exhibit 3).
Exhibit 2
El Paso County Yearly Home Sales
2000-04
2000 2001 2002 2003 2004 Homes Sales Dollar Value Homes Sales Dollar Value Homes Sales Dollar Value Homes Sales Dollar Value Homes Sales Dollar Value Jan 306 $31,525,000 327 $34,190,000 411 $41,360,000 383 $42,705,000 435 $48,330,000 Feb 346 $32,300,000 351 $35,830,000 354 $38,655,000 355 $38,205,000 441 $48,215,000 Mar 492 $47,505,000 441 $42,450,000 437 $46,940,000 577 $61,185,000 551 $60,105,000 Apr 382 $37,915,000 402 $41,400,000 569 $54,015,000 503 $54,185,000 579 $64,980,000 May 459 $43,335,000 495 $50,430,000 416 $44,530,000 557 $58,245,000 576 $68,890,000 Jun 486 $47,880,000 479 $57,990,000 449 $50,530,000 540 $66,375,000 586 $72,925,000 Jul 422 $42,925,000 464 $49,740,000 469 $54,775,000 551 $65,955,000 619 $77,745,000 Aug 538 $53,800,000 478 $50,295,000 506 $54,035,000 584 $66,400,000 462 $54,045,000 Sep 382 $36,775,000 415 $45,305,000 453 $47,495,000 602 $66,640,000 294 $29,910,000 Oct 392 $40,535,000 443 $46,120,000 558 $63,565,000 551 $62,140,000 484 $56,625,000 Nov 412 $41,830,000 381 $39,455,000 401 $45,815,000 427 $46,840,000 470 $55,690,000 Dec 492 $45,465,000 381 $39,040,000 411 $44,880,000 609 $71,320,000 467 $56,610,000 5,109 $501,790,000 5,057 $532,245,000 5,434 $586,595,000 6,239 $700,195,000 5,964 $694,070,000 Average Home Value $98,217 $105,249 $107,949 $112,229 $116,377 Source: Real Estate Center at Texas A&M University. Exhibit 3
El Paso County
Total Property and Residential Property Values
2000-04
Total Market Value
(Less Totally Exempt
Property Value)Single-Family/Residential
Market Value2000 $20,271,011,438 $10,217,912,398 2001 $21,464,784,707 $10,662,938,163 2002 $21,846,482,751 $11,002,504,245 2003 $22,230,940,435 $11,461,881,146 2004 $24,095,882,650 $12,859,311,889 Source: Texas Comptroller of Public Accounts. The county includes the Clint, El Paso, Fabens, San Elizario, Ysleta, Anthony, Canutillo, Tornillo and Socorro independent school districts.
1.2
Appraisal District Organization and StaffingEl Paso CAD was formed in 1980 and became active in 1981. It has a total of 137 full-time staff positions, with 16 supervisory positions and no part-time positions. Thirty-four positions are full-time appraisers. The district contracts with Capital Appraisal Group for professional appraisal services on utility and industrial appraisals.
Exhibit 4 presents the current organization chart.
The El Paso 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 its staff, makes appraisals and operates the appraisal office. The board of directors appoints Appraisal Review Board members and provides funding for the board's activities.
El Paso CAD provides appraisal services for 30 taxing units, not all of which levy a tax (Exhibit 5).
Exhibit 5
El Paso Central Appraisal District Taxing Units
Name of Taxing Entity El Paso County City of Vinton Clint Independent School District Homestead Municipal Utility District #1 El Paso Independent School District Horizon Regional Municipal Utility District Fabens Independent School District El Paso County Municipal Utility District #1 San Elizario Independent School District Paseo Del Este Municipal Utility District #1 Ysleta Independent School District Paseo Del Este Municipal Utility District #3 Anthony Independent School District Hacienda Del Norte Water District Canutillo Independent School District Lower Valley Water District Tornillo Independent School District Tornillo Water District Socorro Independent School District R. E. Thomason General Hospital District Town of Anthony El Paso Community College District City of El Paso El Paso CountyWater Control and Improvement District #4 Town of Clint City of San Elizario City of Socorro El Paso Emergency Services District #1 City of Horizon El Paso Emergency Services District #2 Source: El Paso CAD, 2005. Exhibit 6 includes reported data concerning appraisal district and state and group averages.
Exhibit 6
Reported Data on Parcels, Categories Staffing, Training and Operations Comparison to State and Group Averages
Appraisal District Name: El Paso State Avg. Group Avg. General Information Parcel Size Group
(by number of locally appraised parcels)Equal to or Greater Than 300,000 Estimated # Locally Appraised Parcels 341,594 74,792 562,926 # Taxing Units 25 15 40 Locally Appraised Parcels to Staff 2,512 4,500 3,151 Composition by Percentage
of Value (Self Report):Residential Value 58.4% 51.3% 57.8% Non-Residential, Non Mineral 41.6% 45.0% 42.2% Non-Residential, Mineral 0.0% 3.7% 0.0% Composition by Locally
Appraised Parcel Category (Estimated from Self Report):El Paso Parcel Type # Parcels % of
ParcelsA - Residential 172,504 50.50% 33.17% 67.8% B - Multi-Family 7,159 2.10% 0.77% 2.3% C - Vacant Lots 19,690 5.76% 9.75% 7.9% D - Agricultural 99,480 29.12% 43.22% 6.8% E - Farm and Ranch Improvement 1,081 0.32% 3.36% 0.3% F1 - Commercial Real 8,924 2.61% 2.28% 3.4% L1 - Commercial Personal 17,987 5.27% 4.51% 8.5% M1 - Mobile Homes 7,331 2.15% 1.68% 1.7% O - Residential Inventory 7,008 2.05% 1.19% 1.1% S - Special Inventory 430 0.13% 0.07% 0.1% Total 341,594 100.00% 100.00% 100.00% Financial and Staffing Information (Operations Survey) El Paso State Avg. Group Avg. Financial Information 2004 Budget $9,563,018 $1,110,254 $13,759,491 2004 Surplus $601,193 $48,630 $441,139 2004 Surplus as % of Budget 6.3% 4.4% 3.2% 2005 Budget $9,980,041 $1,152,465 $13,955,208 % Change in Budget 4.4% 3.8% 1.4% 2004 Budget per Total Parcel $26.63 $11.86 $23.48 2004 Budget per PTD Estimated Locally Appraised Parcel $29.22 $15.35 $24.79 Staffing Full Time 136* 17 179 Part Time 0 1 8 Supervisory 16 3 25 Programmers 1 1 13 Supervisory to Staff Ratio 1:8 1:5 1:7 Chief Appraiser (CA) (CA) Performs Appraisals? No 2004 Total Compensation $115,035 $52,642 $126,625 Appraisers Full - Time 34 7 64 Part - Time 0 0 0 Salary Range: Low $22,400 $25,451 $28,123 High $60,125 $38,355 $62,636 Training Budget $68,660 $9,173 $83,255 # Registered with BTPE 35 8 76 Source: El Paso CAD and ISDs 2004 Self Reports (Report of Property Value) and Comptroller 2004-2005 Appraisal District Operations Report data and Comptroller comparative data for state and group averages from district self reports and the Appraisal District Operations Report. *Reported by CAD for 2004-05. Current number of positions is 137. Exhibit 7 presents the types of properties appraised by El Paso CAD. In-house staff handles all property categories except Category J (utilities) and part of Category F2/L2 (industrial - real/personal), which are appraised by Capital Appraisal Group.
Exhibit 7
El Paso CAD Categories Appraised
Property Category Appraised By Account Type Description Number of
Items AppraisedValue of
Appraised ItemsCategory A In-house Residential 172,504 $12,859,311,889 Category B In-house Multi-Family 7,159 1,035,412,595 Category C In-house Vacant Lots 19,690 501,026,986 Category D1/D2* In-house Qualified Ag/Non-qualified Land 99,480 340,859,669 Category E In-house Farm and Ranch Improvements 1,081 78,477,586 Category F1 In-house Commercial Real 8,924 4,134,898,390 Category F2 Contract Industrial Real 238 538,956,989 Category G3 Contract Non-producing Minerals 8 1,020 Category J Contract Utilities 672 575,370,568 Category L1 In-house Commercial Personal 17,987 2,279,619,873 Category L2 Contract Industrial Personal 351 1,371,267,592 Category M1 In-house Mobile Homes 7,331 95,393,106 Category S In-house Special Inventory 430 108,521,212 Category O In-house Residential Inventory 7,008 176,765,175 Total In-house appraisals 341,594 21,610,286,481 Total Contract appraisals 1,269 2,485,596,169 Total appraisals 342,863 $24,095,882,650 *Based on parcels reported by individual school districts.
Source: Texas Comptroller of Public Accounts. 2004 Appraisal District Report of Property Value. El Paso CAD.Most appraisal districts contract out some of their work to private firms. PTD does not track appraisals done by external appraisers on industrial property. Contracts with external appraisers generally do not include a parcel count for the number of appraisals to be performed. In assessing the staff-to-parcel count ratio in each appraisal district, PTD uses parcel counts reported in the CAD's 2004 self-report and the independent school district self-reports to calculate parcels per appraisal district staff. 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.
The International Association of Assessing Officer (IAAO) Standards state that the ratio of parcels per full-time employees for a large appraising entity is between 3,000 and 3,500. Across all organizations, IAAO says one full time employee per 2,500 parcels is typical. Small jurisdictions average 1,500 to 1,700.
Of course, workloads in appraisal districts may vary, sometimes drastically, due to any number of considerations other than parcel count. The geographic size of an appraisal district, for instance, may have a significant impact on the time required to work all parcels. The types of properties involved also may have an impact. More complex commercial and residential properties may require more staff to appraise. The data given here is meant only to give the reader some basis for comparison with other appraisal districts with similar parcel counts.
1.3
Self Evaluation QuestionnaireIn preparation for the ASR, the El Paso CAD was asked to complete the IAAO's Self Evaluation Questionnaire. This instrument asks the CAD to assess its compliance with acceptable procedures, standards and organization. Each CAD receives an electronic version of the questionnaire and an IAAO manual explaining each question, and providing information on how to answer them. PTD asks each CAD undergoing an ASR to perform the self-assessment.
The El Paso CAD answered all 110 questions, providing concise responses where necessary. The CAD's answers are included in Appendix 7. A summary of the self-assessment follows.
A member of the El Paso CAD Board of Directors serves on the Texas Association of Appraisal Districts (TAAD) Legislative Committee. The CAD's legal counsel as well as key administrative staff track proposed legislation through the Internet and then attend a TAAD Legislative update seminar after the Legislative Session ends. Subsequently, the El Paso CAD implements any applicable legislative changes into its procedures and computer software programs.
The El Paso CAD engages in formal planning using both administrative and senior staff members. It operates on a performance-based budget and funding is considered adequate. The CAD provides each new employee on the job training, classroom instruction and an annual evaluation. All appraisers are registered with the Board of Tax Professional Examiners (BTPE) and are scheduled for mandatory courses.
All staff members have a workstation at or near their desks and access to high-speed or laser (shared) printers, with optional specialized printers for certain purposes, such as color printing and complete document production. Data is backed-up every night and the most current backups are stored offsite.
All workstations have Microsoft Office, including Word, Excel, Access and Outlook. All staff members have internal email accounts and select personnel have external email and Internet access as necessary to perform their duties.
Access to applications programs is password-controlled. Only data entry operators are able to update values and characteristics. PC network access is controlled by passwords, network address translation, a firewall, authentication control lists and PC port filtering. Public web access is provided through TaxNetUSA. Assessment and property characteristic information is available, as well as a link to the printable electronic forms from the Texas Comptroller of Public Accounts.
The Plat/Subdivision/GIS department has developed and maintains a system of cadastral property tax maps. All maps are appropriately annotated and updated. The current tax map system is comprised of both a master and working copies that convey the entire Area of Responsibility (AOR) of the CAD's taxing units countywide. The Geographic Database is a digital coordinate-based representation of the Public Land Survey System (PLSS). The metadata depicting the projection system is deployed with the shape file. This master shapefile geodatabase coordinates portray the legal land parcels of the PLSS and tie land description, records, parcel information and resource data to positions within the El Paso County.
The El Paso CAD periodically schedules special reviews of the county by location or by property type. Because of these reviews sections of the county are physically inspected every four to six years. Personal property is inspected every year and appraisers not only review the personal property account but also check for any changes in the real estate. These measures help the El Paso CAD maintain up to date information on all accounts.
The El Paso CAD inspects properties that are under construction, using city building permits, county septic permits, sales and rechecks. The CAD maintains data necessary in valuation or the support of values along with other data. The current system is a component-in-place classification guide. The new system is a Marshall & Swift type segregated cost system guide.
The El Paso CAD does not own or use hand held computers for field data collection because they found them to be lacking in functionality, design, cost and compatibility with its current system.
All land sales are reviewed, confirmed and maintained in a sales file. A team of appraisers reviews vacant land sales. Characteristics such as size, shape, use, zoning, topography and road frontage and access is reviewed and updated. It is the responsibility of the appraiser analyst to determine if sales are qualified arms-length transactions. Land sales are analyzed in terms of value per unit and are plotted on digital maps and are expressed as price per square foot. Both positive and negative value adjustments are made for any factor, which can be recognized to either increase or decrease value.
The El Paso CAD uses spreadsheets and statistical software to develop land values. Land models are tested against land sales by determining the appraisal to sale ratio and the coefficient of dispersion.
The CAD places primary emphasis on the sales comparison approach in the appraisal of subdivision homes, condominiums and townhouses. Regardless of the approach used, the CAD performs ratio studies based on major value determinants and price range to ensure consistency in estimated values.
Comparable sales are available and used as they provide the best means of evaluating and supporting individual values. This is accomplished by preparing presorted sales listings. Cost tables are verified with newly constructed properties and local builders in addition to the Marshall & Swift Cost Handbook.
The El Paso CAD considers the three approaches to value in appraising business properties. The income approach is given greater weight when appraising rental type properties such as apartments, offices, retail and warehouses. The cost approach is considered when appraising special purpose properties such as hospitals, nursing homes, banks and auto centers. The comparable sales approach is always considered; however, few commercial sales are reported to the CAD. The availability of comparables is limited; therefore, the results from the comparable sales approach have proven unreliable, according to the CAD.
The CAD routinely sends out sales questionnaires, has access to the multiple listing service and information provided by local builders. All sales are reviewed to determine if the transaction is an arm's length transaction. Sales that are collected during current year are reviewed to determine if all like type properties must be adjusted for the January 1 appraisal date. The office performs a paired sales analysis to determine if properties are appreciating or depreciating.
Property values can differ dramatically across a city or county. The various property types are grouped into real estate "market" areas for valuation and administrative purposes. In addition, market areas are divided into sub-areas or neighborhoods.
The El Paso CAD uses ratio studies in planning and determining reappraisal priorities. Preliminary ratio studies are done from November through December to determine areas of concern. Ratio studies compare appraisals to independent indicators of market values, usually sales prices. By measuring the level and uniformity of existing appraisals relative to current market values, these studies become a valuable planning tool for determining reappraisal priorities and allocating resources. The CAD supplements the ratio study analyses with tests to ensure that unsold properties have been appraised similarly to properties that have been sold.
The El Paso CAD Personal Property Department employs several methods to discover taxable personal property. Personal property is typically discovered during field inspections; primary and secondary streets are field checked yearly. Personal property is also discovered utilizing newspaper listings of new businesses, Commercial Recorder listings of assumed names and Texas Department of Transportation listings of registered vehicles. All appropriate approaches to appraisal are considered in valuing personal property. Due to time and information constraints the replacement cost less depreciation is the most common approach used.
The CAD is online with the El Paso County Clerk's Office and makes a concerted effort to obtain ownership and legal description information as soon as it is available. The CAD also contacts hundreds of property owners every week through mail, phone calls and walk-in customers.
Property owners are required to supply the CAD with proper documentation supporting exemption applications. The CAD uses newspaper obituaries, death certificate records, probated wills and affidavits of heirship filed with the county clerk to manage possible changes in exemption eligibility.
The El Paso CAD encourages property owners to attend informal meetings with appraisers to resolve assessment concerns. Property owners are prompted to file their formal protest to secure their rights to a hearing in the event the informal hearings provide no satisfaction for the property owner. The CAD operates an automated hearing tracking system. Protests can be tracked through the informal and formal hearing process including the generation of the Final Order Determining Protest from the Appraisal Review Board.
Public relations are an active and on-going project for the El Paso CAD; the CAD uses both television and radio, mass mailings and maintains information boards on each floor of the CAD building. Since a majority of the El Paso population is Hispanic, the CAD maintains all services including the Speakers Bureau and publications in English and Spanish.
1.4
Findings of the Property Value StudyThe Property Value Study (PVS) determines the total property value in each school district in the El Paso CAD. The PVS also determines performance measures for the appraisal district as a whole. When conducting the PVS, the Comptroller's Property Tax Division (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.
With a few notable exceptions, all CADs and 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 property must be on the market for a reasonable time; and neither buyer nor seller are in a position to take advantage of the other.
Local tax roll value, or local value, is determined by the CAD 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 in the school 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 CADs may protest the findings of the preliminary PVS through an administrative hearings process with the Comptroller. School districts also 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.
The El Paso CAD and some individual school districts informally or formally appealed some study findings of the 2004 preliminary study. All school districts' values were within the confidence interval and their local values were certified as valid in July 2005. El Paso CAD performance measurements are found in Exhibit 8.
Exhibit 8
El Paso CAD Performance Measures by Property Category
Property Category Median Level of Appraisal (Ratio) Coefficient of Dispersion % Ratios within +/- 10% of Median % Ratios within +/- 25% of Median Price Related Differential Single-Family Residential .98 9.99 70.18 91.90 1.02 Multi-family Residential .98 9.12 67.70 94.79 1.01 Vacant Lots 1.00 8.47 72.91 94.44 1.02 Rural Real Estate .98 9.56 65.21 93.47 .98 Commercial Real Estate .99 10.59 65.40 91.94 1.05 Overall .98 9.57 70.69 92.73 1.03 Source: Comptroller of Public Accounts, Final 2004 Property Value Study. A review of the appraisal district performance measures indicates that for the property categories included in the appraisal district study, El Paso CAD is appraising property at an overall median ratio of 98 percent of market value. This includes single family residential, multi-family residential, vacant lots, rural real estate (not qualified for productivity valuation) and commercial real estate. The medians for these property categories range from 98 to 100 percent of market value.
The coefficients of dispersion (CODs) for each property category tested in the study and for all tested property categories combined meet the IAAO standard. The coefficient of dispersion is a measure of appraisal uniformity that indicates how widely the individual property percentages of market value are dispersed around the median percentage. The overall COD is 9.57 and the individual property category CODs range from 8.47 to 10.59.
The IAAO standard is a COD of 10 or less for single family residences in areas of newer or fairly similar houses and 15 or less in other areas. CODs for other kinds of property should be 20 or less. El Paso CAD met all COD factors for all tested categories.
The single family residential COD is 9.99, very close to the limit of 10 for areas of newer or fairly similar houses. A review of the percentage of properties in the PVS sample within plus or minus 10 percent of the median indicates that almost 30 percent of single family residential properties are appraised more than 10 percent above or below market value.
A review of the price related differentials (PRDs) shows that El Paso CAD is outside the IAAO standard of .98 - 1.03 in the commercial real property category and at the upper limit for all property. The PRD for commercial real property is 1.05 and the overall PRD is 1.03. The IAAO Standard on Ratio Studies, Section 7.6, explains that a high PRD indicates but does not prove appraisal regressivity, a situation in which low-value properties are appraised at a higher percentage of market value than high-value properties.
El Paso CAD commercial real property has values in the PTD sample that ranged from 59 to 260 percent of market; 59 to 160 percent of market after excluding one outlier. Seventy-one percent of the sampled properties were at market percentages within plus or minus 10 percent of the median. The commercial real property category includes 17 percent of the CAD's value. This is second only to single-family residences with 54 percent of the CAD's value.
According to the 2004 PVS, El Paso CAD farm and ranch land (Category D1) is primarily in irrigated cropland valuations. This category tested at 83 percent to 91 percent of market value.
