OVERVIEW OF COUNTY APPRAISAL DISTRICT
County History and Demographics
According to the Handbook of Texas, Hansford County was established in 1873 by James H. Cator and his brother Robert. In 1876 the Texas legislature marked off Hansford County from land previously assigned to Young and Bexar districts. In 1889, the county was politically organized and the town of Hansford became the county seat.
Hansford County is on the northern edge of the Panhandle and is bordered on the north by Oklahoma, on the west by Sherman County, on the south by Hutchinson County, and on the east by Ochiltree County.
By the 1980s Hansford County had a diversified economy based on agriculture, oil, and transportation. Livestock production from ranching and feedlot operations accounted for approximately 65 percent of the total agricultural output; while wheat, sorghum, oats, corn, and hay farming made up the agricultural balance. Oil and gas made up another major portion of the economy, and the local facilities used to store, process, and transport both agricultural and mineral products.
The population of the county for 2003, according to the County Information Project, was 5,210 residents. The county comprises 920 square miles of level and rolling prairies cut by the intermittent Frisco, Coldwater, Palo Duro, and Horse creeks. The region's black, sandy, and loam soils support abundant native grasses as well as wheat, corn, sorghum, oats, and other small grains.
According to the County Information Project, the median per capita income is $17,408 and 16.4 percent of the population lives at or below the poverty level.
Spearman, the county seat, is in the southeastern part of the county on State highways 15 and 207.
The county has three school districts: Gruver Independent School District, Pringle-Morse Consolidated Independent School District, and Spearman Independent School District.
Appraisal District Organization and Staffing
The appraisal district was formed in 1981 and became active in 1982. Hansford CAD has a total of five full time staff; two of the positions perform appraisal work. The district contracts with Ochiltree CAD for professional appraisal services on mineral, utility and industrial appraisals.
Exhibit 1 presents the organizational structure and Board of Directors.
Hansford County Appraisal District Organization
Board of Directors Mark Sheets, Chairman Terry Sherrill Jerry Hart Ginger Turner Butch Reed Chad Logsdon Linda Cummings Source: Hansford County Appraisal District (CAD) data, March 2005.
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 seven taxing units, Hansford County, Gruver Independent School District, Pringle-Morse Consolidated Independent School District, Spearman Independent School District, City of Gruver, City of Spearman, and Hansford County Hospital District.
Exhibit 2 presents the types of properties appraised by Hansford CAD in tax year 2003. In-house staff handles all property categories except Category G (minerals), Category J (utilities), and Category F2/L2 (industrial - real/personal), which are appraised by Ochiltree 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 Ochiltree CAD Category J Utilities Ochiltree CAD Category F2 Industrial Real Ochiltree CAD Category L2 Industrial Personal Ochiltree CAD Source: Hansford CAD, March 2005.
*Commercial property parcels are included in the contract with Ochiltree CAD for 2005.
Most appraisal districts contract out some of its appraisal 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 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 Hansford State Avg. Group Avg. Parcel Size Group (by number of locally appraised parcels) 5,000 - 9,999 Estimated # Locally Appraised Parcels 7,892 55,463 7,045 # Taxing Units 9 15 7 Locally Appraised Parcels to Staff 1,578 3,404 2,446 2003 Composition by
Percentage of Value (Self Report):
Hansford State Avg. Group Avg. Residential Value 12.0% 52.6% 12.5% Non-Residential, Non Mineral 47.7% 43.6% 55.2% Non-Residential, Mineral 40.2% 3.7% 32.2% 2003 Composition by
Account Category Type (Operations Survey):
Real Property 6,643 45,804 37,582 Mineral Property 31,610 13,536 12,159 Business Personal Property 876 4,689 1,922 Individual Personal Property 0 1,342 1,166 Total Accounts 39,129 65,372 52,829 2003 Composition by
Locally Appraised Parcel Category
(Estimated from Self Report):
Hansford State Avg. Group Avg. Parcel Type # Parcels % of Parcels A 1,845 23.4% 44.1% 23.6% B 15 0.2% 1.0% 0.2% C 529 6.7% 13.1% 10.8% D 3,566 45.2% 24.7% 43.9% E 1,080 13.7% 4.5% 12.1% F1 349 4.4% 3.1% 3.7% L1 369 4.7% 5.7% 3.9% M1 133 1.7% 2.2% 1.6% O 0 0.0% 1.4% .2% S 6 0.1% 0.1% 0.0 % Total 7,892 100.0% 100.0% 100.0%
PTD estimated that Hansford CAD staff are responsible for appraising about 7,892 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 Hansford are Hartley, Shackelford, Yoakum and Castro. The number of parcels per staff member for Hansford CAD was 1,578. Hartley CAD was 3,196, Shackelford CAD was 2,214, Yoakum CAD was 3,219 and Castro CAD was 2,124. Of course workloads in appraisal districts may vary, sometimes drastically, 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 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 (continued)
Financial and Staffing Information (Operations Survey) Hansford State Avg. Group Avg. 2003 Budget $249,774 $1,079,695 $158,351 2003 Surplus $8,000 $71,620 $10,114 2003 Surplus as % of Budget 3.2% 6.6% 6.4% 2004 Budget $253,258 $1,104,961 $161,854 % Change in Budget 1.4% $0 2.2% 2004 Budget per Total Local Parcel $32.09 $19.92 $22.97 Staffing Full Time 5 18 3 Part Time * 2 1 Supervisory 2 3 1 Programmers * 2 1 Supervisory to Staff Ratio 1:3 1:5 1:3 Chief Appraiser Performs Appraisals? No 2004 Total Compensation $46,600 $53,564 $37,098 Appraisers Full - Time 2 8 1 Part - Time * 0 1 Salary Range: Low $20,120 $24,504 $23,596 High $29,250 $37,521 $26,358 Training Budget $7,000 $8,832 $3,573 # Registered with BTPE (1) 5 9 3 Types of BTPE Certification: RPA(2) RTA (3) RTC(4) All 0 0 0 5 Operations Information (Operations Survey) Hansford State Avg. Group Avg. Reappraisal Last Year of Reappraisal 2003 Next Year of Reappraisal 2004 Type of Appraisal: Cyclical Method of Appraisal: Combination Protests 31 3,131 49 Protests per Parcel 0.1% 4.7% 0.3% Consolidated Collection Yes Collection Budget $31,022 Geographic Information System (GIS)? Yes Percent GIS Complete 90% 80% 78% Board of Directors Members 7 6 6 Tax Assessor Votes? Yes Elected Members 6 3 3 Note: An asterisk (*) is shown where data was not reported.
Source: Hansford 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.
**Total number of full time staff - which serve both appraisal and collection functions.
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, Hansford 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 questions 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.
Hansford County answered 110 out of 110 questions. The district gave mostly yes or no answers with a few concise responses for further explanation. About half of the responses were in the affirmative; the other responses were mostly negative with some not applicable responses. The CAD uses an outside vendor to appraise minerals, utilities, and commercial/industrial properties, about 80 percent of its parcels. The district gave careful consideration to each question and their answers are included in Appendix 15.
In Chapter 1, on legal issues and assessment cycles, the district noted it has adequate, size, resources and fiscal capacity to assess property values and uses several methods to keep current with legislative proposals, laws and court decisions.
In Chapter 2, on resource management, the district noted it does not use formal planning but instead prepares a formal estimate of required resources through performance based budgeting and the budget process in general. Hansford CAD affirmed its staff are quality conscious, well managed and skilled.
In Chapter 3, on computerization, the district noted its computer system does not support multiyear processing nor provide query/reporting tools for advanced users to work independently of system programmers to address unanticipated needs. The system does provide public web access to information and services and offers the ability to manage document and photo imagery.
In Chapter 4, on mapping, the district noted it has professionally maintained computerized maps but does not maintain a complete set of cadastral maps showing size, shape and location of each parcel in the jurisdiction; does not maintain map representations of spatial assessment areas and valuation influences and geographic coordinates are not displayed cadastral maps. Further, the maps and records are not part of a multipurpose GIS. While not all parcels are currently assigned a unique identifier, Hansford CAD is in the process of completing this task.
In Chapter 5, on data collection, the district's computer records have information on current property use, highest and best use, but not zoning. Computerized local market land attribute data is not maintained. Only data necessary in valuation or the support of values is maintained; this office routinely obtains copies of building and occupancy permits. Hansford CAD does not routinely collect income data for commonly leased or rented properties and does not have a computerized edit program that includes both range and consistency checks. The district noted it has a well-designed residential property record card that is supported by a data-coding manual and training program, and all properties are physically inspected every three years.
In land evaluation, Chapter 6, the district reviews, confirms and maintains land sales data and stratifies land by use and location only, not by zoning. Land sales are analyzed by unit value but unit value data is not plotted on maps. Value adjustments are made for positive and negative location factors. Hansford CAD does not use market-derived tables to make size or depth adjustments or use spreadsheets or statistical software to help develop land values. GIS is not part of the district's land evaluation tools for maintaining data quality. Abstraction, allocation and land residual capitalization methods are not used to derive standard unit values.
In Chapters 7 and 8, on residential and commercial property valuation, respectively, the district affirmed sales ratios are analyzed by key features during the appraisal process with value estimates reviewed by appraisers and reconciled prior to assignment of final values. Hansford CAD's cost schedules are computerized and checked against local buildings of known cost and adjusted as necessary. Depreciation schedules are based on sales analysis. The district employs three approaches to value in appraising business properties with local cost adjustments as needed; obsolescence adjustments are applied in estimating total depreciation.
In Chapters 9 and 10, on sales data, ratio studies and stratification and personal property assessment, respectively, the district noted it does conduct ratio studies timely, by property groups and subgroups and uses them in planning and determining reappraisal properties. While Hansford CAD's ratio study software does not have graphics capabilities, it does compute standard measures of level and uniformity and confidence intervals. The district affirmed it routinely employs several methods to discover taxable personal property and delivers declaration forms to known owners. Follow up discovery methods include supplemental mailings, field inspections and estimated assessments. Hansford CAD maintains separate cost trend and depreciation indexes for each personal property class, applied when using the cost approach method. The district does not use price guides to value items that are frequently sold as used items and does not use the income approach to value leased equipment.
In Chapter 11, on assessment administration, the district maintains computer records with the source of all appraised of assessed values, verifies eligibility for exemptions and notifies property owners by mail of the amount and reason for changes in appraised and assessed values, and appeals rights.
The district noted in Chapter 12, defense of values, that it does not obtain an independent review from another appraiser as part of the defense in a formal appeal. Hansford CAD encourages informal discussions of complaints prior to filing of a formal appeal and all formal appeals are tracked to completion and records updated as necessary.
In public relations, Chapter 13, the chief appraiser presents programs on appraisal activities as requested by civic organizations or the public in general in lieu of having an active public relations program. Hansford CAD records can be accessed by parcel identifier, situs address or owner, but are not part of a GIS.
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 Hansford County Appraisal District (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 may not be 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.
Gruver ISD, Pringle-Morse CISD and Hansford CAD appealed some category D accounts while Spearman ISD and Hansford CAD jointly appealed some category D and G accounts. Despite the changes, Spearman ISD was unable to get into the confidence interval and was certified an eligible district in June 2004.
A review of the school districts in the county indicates that Hansford CAD is inconsistently appraising oil and gas producing properties (minerals) as determined by the PTD. Also, the farm and ranch land that qualifies for the special productivity appraisal is consistently appraised below market value as determined by the PTD. The mineral values are the primary reason that the school's values are not within the acceptable range determined by the study.
In general, a ratio of between .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
There are four property categories tested in Spearman ISD: Category A, Single-Family Residences, making up 20 percent of the districts value with a weighted mean ratio of 0.9683; Category D, Rural Real, making up 14.7 percent of the districts value with a weighted mean ratio of 0.9138; (3) Category G, Minerals, making up 35.6 percent of the districts value with a weighted mean ratio of 0.9192; and (4) Category J, Utilities, making up 14.6 percent of the districts value with a weighted mean ratio of 1.0115.
Spearman ISD category A makes up 26.1 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 0.9683.
Category D, Rural Real makes up 20.1 percent of the tested value with a weighted mean ratio of 0.9138. 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. Spearman ISD's subcategory D1 consists of 72.8 percent of category D's value and 14.6 percent of the tested value. D1 tested with a weighted mean ratio of 0.8944. According to PVS findings the district consistently over valued the irrigated cropland, and consistently under valued the dry cropland and native pastureland. Subcategory D2 makes up 27.2 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 0.9701.
Category G, Minerals property is 35.6 percent of the districts value and tested below market value with a weighted mean ratio of 0.9192. The district valued the Mineral properties from as low as 56 percent to a high of 140 percent of market value. Category J, Utility properties is 14.6 percent of the districts value and tested above market value with a weighted mean ratio of 1.0115.
Other School Districts
Gruver ISD is within the confidence interval limit. Category A comprises 16.2 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 0.9691.
Category D, Rural Real makes up 27 percent of the tested value with a weighted mean ratio of 0.9150. Subcategory D1 consists of 70.8 percent of category D's value and 19.1 percent of the tested value. D1 tested with a weighted mean ratio of 0.8891. The district consistently over valued the irrigated cropland, and consistently under valued the dry cropland and native pastureland. Subcategory D2 makes up 29.2 percent of category D value and 7.9 percent of the school district's total tested value. D2 tested close to market value with a weighted mean ratio of 0.9850.
Category G, Minerals property is 35.4 percent of the districts value and tested near market value with a weighted mean ratio of 0.9761. The district valued the Mineral properties from as low as 61 percent to a high of 230 percent of market value. Category J, Utility properties is 14.1 percent of the districts value and tested above market value with a weighted mean ratio of 1.0453.
Pringle-Morse CISD is within the confidence interval limit. Category A was not tested in this school district.
Category D, Rural Real makes up 32.3 percent of the tested value and is below market value with a weighted mean ratio of 0.8987. Subcategory D1 consists of 75.9 percent of category D's value and 24.5 percent of the tested value. D1 tested with a weighted mean ratio of 0.8737. The district consistently over valued the irrigated cropland, and consistently under valued the dry cropland and native pastureland. Subcategory D2 makes up 24.1 percent of category D value and 7.8 percent of the school district's total tested value. D2 tested very near market value with a weighted mean ratio of 0.9880.
Category G, Minerals property is 35.3 percent of the districts value and tested near market value with a weighted mean ratio of 1.0243. The district valued the Mineral properties from as low as 47 percent to a high of 199 percent of market value. Category J, Utility properties is 32.3 percent of the districts value and tested above market value with a weighted mean ratio of 1.0884.
In summary, Hansford CAD is inconsistently valuing minerals properties (category G) from as low as 47 to a high of 223 percent of market value. Hansford CAD primarily needs to focus its energies on subcategory G valuation of oil and gas producing properties (minerals), as it represents about 36 percent of the district's value. Secondly, Hansford CAD consistently over valued the irrigated cropland and consistently under valued the dry cropland and native pastureland. Hansford CAD needs to focus its energies on subcategory D1 valuation of farm and ranch land that represents about 14 percent of the district's value. Primarily, the appraisal district needs to review their appraisal procedures and methodology for minerals (categories G) to determine why it is inconsistently appraising these properties. Additionally, the appraisal district needs to review their appraisal procedures and methodology in the portion of category D that is qualified for special agricultural use appraisal (D1), to determine why it is consistently over valued the irrigated cropland, and consistently under valued the dry cropland and native pastureland.
For a statistical explanation of why the district was selected as eligible, see Appendix 18.