OVERVIEW OF COUNTY APPRAISAL DISTRICT
County History and Demographics
According to the Handbook of Texas, Hamilton County was formed in 1856 and named for James Hamilton, a South Carolina governor who invested some $216,000 in gold to finance the Texas struggle for independence from Mexico.
Hamilton County, in Central Texas, is bounded on the north by Comanche, Erath, and Johnson counties, on the west by Mills County, and on the south by Lampasas and Coryell counties, about 114 miles north of Austin.
The county covers 844 square miles wooded with pecan, live oak, elm, cedar, and post oak. Soils range from the sandy loams and sands and the dark, limy, crumbly, clays of the prairie, to the rich alluvial bottoms of the river valleys. Except for the northwestern part, which lies in the Western Cross Timbers region, the county is rolling prairie marked by numerous flat-topped buttes that rise abruptly to stand on the divides between the county's many streams. The county is drained by the Leon, Lampasas, and Bosque rivers. Many of its deep, wide stream valleys are bordered by limestone cliffs that abut the intervening flat divides.
Crops include sorghums, small grains, cotton, hay, and pecans; irrigated land totals about 5,000 acres. The county's agribusiness also includes more than 40 dairies.
According to the County Information Project, Hamilton County had 8,115 residents in 2004. The city of Hamilton had 2,938 residents with the rest of the county residents living in smaller cities, towns and rural areas.
The school districts in Hamilton County include Hamilton Independent School District (ISD), Hico ISD and Cranfills Gap ISD.
Appraisal District Organization and Staffing
The appraisal district was formed in 1981 and became active in 1982. Hamilton CAD has a total of six full time staff with two supervisory positions. Two of the positions are full time appraisers. There are two other people who have other assignments, but who also do appraisals. The district contracts with Capital Appraisal Group, Inc. (CAG) of Austin, Texas for professional appraisal services on mineral and industrial appraisals.
Exhibit 1 outlines the district organization.
Scope of Office
The 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 Hamilton County, Hamilton ISD, Hico ISD, Cranfills Gap ISD, City of Hamilton, City of Hico, City of Evant, Hamilton Hospital District and Hico Emergency Services District.
Exhibit 2 presents the types of properties appraised by Hamilton CAD. In-house staff handles all property categories except Category G (minerals), Category J (utilities), and part of Category F2/L2 (industrial - real/personal), which is appraised by CAG.
Hamilton 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 In-House Staff Category L2 Industrial Personal Contracted Appraisal Firm Source: Hamilton 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 district 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 Real Property; L1, Commercial Personal Property; M1, Mobile Homes; O, Residential Inventory; and S, Special Inventory, as shown in Exhibit 3.
PTD estimated that Hamilton CAD staff is responsible for appraising about 13,816 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.
Comparable districts in size to Hamilton are Ward, Runnels and Clay. The number of parcels per staff member for Hamilton CAD was 2,303. Ward CAD was 2,754, Runnels CAD was 2,824, and Clay CAD was 2,453. 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 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 determined 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
General Information Hamilton State Avg. Group Avg. Parcel Size Group (by number of locally appraised parcels) 10,000 - 14,999 Estimated # Locally Appraised Parcels 13,816 55,463 12,441 # Taxing Units 9 15 7 Locally Appraised Parcels to Staff 2,303 3,404 2,615 2003 Composition by
Percentage of Value (Self Report):
Hamilton State Avg. Group Avg. Residential Value 26.6% 52.6% 17.7% Non-Residential, Non Mineral 73.2% 43.6% 54.8% Non-Residential, Mineral 0.2% 3.7% 27.5% 2003 Composition by
Account Category Type (Operations Survey):
Real Property 15,035 45,804 13,246 Mineral Property 100 13,536 13,245 Business Personal Property 572 4,689 649 Individual Personal Property 15 1,342 312 Total Accounts 15,722 65,372 27,451 2003 Composition by
Locally Appraised Parcel Category
(Estimated from Self Report):
Hamilton State Avg. Group Avg. Parcel Type # Parcels % of Parcels A 2,589 18.7% 44.1% 26.1% B 17 0.1% 1.0% 0.3% C 774 5.6% 13.1% 15.3% D 5,732 41.5% 24.7% 36.1% E 3,631 26.3% 4.5% 12.5% F1 466 3.4% 3.1% 3.4% L1 347 2.5% 5.7% 3.7% M1 204 1.5% 2.2% 1.9% O 0 0.0% 1.4% .3% S 56 0.4% 0.1% 0.5% Total 13,816 100.0% 100.0% 100.0% Financial and Staffing Information (Operations Survey) Hamilton State Avg. Group Avg. 2003 Budget $227,173 $1,079,695 $273,141 2003 Surplus $0 $71,620 $15,867 2003 Surplus as % of Budget 0.0% 6.6% 5.8% 2004 Budget $259,454 $1,104,961 $281,073 % Change in Budget 12.4% $0 2.9% 2004 Budget per Total Local Parcel $18.78 $19.92 $22.59 Staffing Full Time 6 18 5 Part Time * 2 1 Supervisory 2 3 2 Programmers * 2 1 Supervisory to Staff Ratio 1:3 1:5 1:3 Chief Appraiser Performs Appraisals? Yes 2004 Total Compensation $47,627 $53,564 $44,270 Appraisers Full - Time 2 8 2 Part - Time * 0 1 Salary Range: Low $23,448 $24,504 $24,638 High $23,448 $37,521 $28,640 Training Budget $2,000 $8,832 $4,153 # Registered with BTPE (1) 5 9 4 Types of BTPE Certification: RPA(2) RTA(3) RTC(4) All 3 3 0 0 Operations Information (Operations Survey) Hamilton State Avg. Group Avg. Reappraisal Last Year of Reappraisal 2002 Next Year of Reappraisal 2005 Type of Appraisal: Complete Method of Appraisal: Combination Protests 75 3,131 113 Protests per Parcel 0.5% 4.7% 0.4% Consolidated Collection Yes Collection Budget $50,000 Geographic Information System (GIS)? Yes Percent GIS Complete 99% 80% 84% Board of Directors Members 5 6 6 Tax Assessor Votes? * Elected Members 1 3 3 Note: An asterisk (*) is shown where data was not reported.
Source: Hamilton CAD's Self Report 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 Professional Tax Examiners. (2) RPA - Registered Professional Appraiser. (3) RTA - Registered Tax Assessor-Collector. (4) RTC - Registered Texas Collector.
Self Evaluation Questionnaire
In preparation for the Appraisal Standards Review, Hamilton CAD was requested to complete the IAAO's Self Evaluation Questionnaire. This instrument allows an appraisal district to assess its 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.
Hamilton 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 felt that it has adequate staff to perform its duties.
In Chapter 2, on resource management, the district noted its office funding is not sufficient, but that it felt it runs a well organized and well managed operation. The district stated its staff is quality conscious concerning their work. The district does not consider its assessment office well organized.
Chapter 3, on computerization, and Chapter 4, mapping, the district noted it provides web access to the public and that the district is working on its cadastral maps, so the CAD's maps are not integrated with its appraisal system.
In Chapter 5, data collection, the district noted it did not use hand held computers for data collection. The district noted it does not routinely collect income data and the district uses a three-year reappraisal plan.
Chapter 6, on Land Evaluation, the district noted that land sales are analyzed in terms of value per unit and the per unit values are not plotted on their maps. In Chapters 7, 8, and 9, on residential property valuation, commercial property valuation and sales data, respectively, the district noted its cost schedules are not fully computerized and that its depreciation schedules are based on sales analysis.
In Chapter 10, on personal property assessment, the district noted it inspects business personal property.
In Chapter 11, on assessment administration, the district noted it does update ownership and legal description information within 30 days of a deed transfer most of the time. The district noted in Chapter 12, defense of values, that it does not obtain independent reviews when assessing difficult and complex properties.
In public relations, Chapter 13, the district noted it does have an active public relations program.
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 Hamilton CAD. 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 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. 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. 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 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.
Hamilton CAD did not appeal the findings of the preliminary study. The Cranfills Gap ISD was certified an eligible district in July 2004.
A review of the school districts in the county indicates that Hamilton CAD is inconsistently appraising Single-Family Residences, Rural Residences, and Commercial Real Properties. Also, the farm and ranch land that qualifies for the special productivity appraisal is consistently appraised below market value. In the 2003 PVS, Cranfills Gap ISD fell outside the study's statistical margin of error. Rural Residences (category D2) is the primary reason that the school's values are not within the acceptable range determined by the PVS.
There is one property category tested in Cranfills Gap ISD: category D, Rural Real, making up 91.3 percent of the district's value with a weighted mean ratio of 0.8793. 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.
Cranfills Gap ISD is outside the confidence interval limit. Due to the number of properties sampled and the large range in ratios, the margin of error is increased from the generally accepted 5 percent to 10.71 percent for this school district. Cranfills Gap ISD is appraised by both Hamilton CAD and Bosque CAD. The portion of Cranfills Gap ISD's category A, Single Family Residential, within Hamilton CAD is not tested. Category D, Rural Real within Hamilton CAD is tested and makes up 100 percent of the tested value and is below market value with a weighted mean ratio of 0.8793. 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, 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. Cranfills Gap ISD's subcategory D1 consists of 28.5 percent of category D's value and 28.5 percent of the tested value. D1 tested with a weighted mean ratio of 0.9291. Subcategory D2, however, makes up 71.5 percent of category D's value and 71.5 percent of the school district's total tested value. D2 tested below market value with a weighted mean ratio of 0.8610.
In additional to Cranfills Gap ISD, Hamilton and Hico ISDs are in the Hamilton County.
Hamilton ISD is within the confidence interval limit. Due to the number of properties sampled and the large range in ratios, the margin of error is increased from the generally accepted 5 percent to almost 7.486 percent for this school district. Hamilton ISD's category A makes up 37.7 percent of the tested value. The appraisal district is placing a value on the category A, Single-Family Residences above market value with a weighted mean ratio of 1.0226. Category D, Rural Real makes up 52.3 percent of the tested value and is just below market value with a weighted mean ratio of 0.9811. Hamilton ISD's subcategory D1 consists of 25.9 percent of category D's value and 13.6 percent of the tested value. D1 tested with a weighted mean ratio of 0.9310. Subcategory D2, however, makes up 74.1 percent of category D's value and 38.7 percent of the school district's total tested value. D2 tested very close to market value with a weighted mean ratio of 0.9999. The district valued the Rural Residence properties from as low as 76 percent to a high of 193 percent of market value. Category F1, Commercial Real property is 8.8 percent of the district's value and tested below market value with a weighted mean ratio of .8085.
Hico ISD is within the confidence interval limit. Hico ISD's category A makes up 30.9 percent of the tested value. The appraisal district is placing a value on the category A, Single-family Residences close to market value with a weighted mean ratio of 1.0202. Category D, Rural Real makes up 59.2 percent of the tested value and is near market value with a weighted mean ratio of .9841. Hico ISD's subcategory D1 consists of 18.8 percent of category D's value and 11.1 percent of the tested value. D1 tested with a weighted mean ratio of 0.9158. Subcategory D2, however, makes up 81.2 percent of category D's value and 48.1 percent of the school district's total tested value. D2 tested very near market value with a weighted mean ratio of 1.0014. The district valued the Rural Residence properties from as low as 59 percent to a high of 143 percent of market value. Category F1, Commercial Real property is 8.9 percent of the district's value and tested near market value with a weighted mean ratio of .9931.
For a statistical explanation of why the district was selected as eligible, see Appendix 18.