Findings of the Appraisal Standards Review
This chapter of the report addresses the findings, commendations and recommendations from the appraisal standards review of the Harrison 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.
Board of Directors Members
Board Member Represents Starting Date Robert (Bob) Duvall City of Marshall 1981 Lee Gaw Hallsville ISD 2000 J. Rick McMinn Marshall ISD 2004 Jason Petersen Hallsville ISD 2002 Wayne McWhorter Harrison County 2004 Betty Wright Harrison County 1998 Source: Harrison CAD, 2004.
Elected officials serving on the board include Betty Wright, the Harrison County Tax Assessor-Collector, Hallsville ISD's Board of Trustees member Lee Gaw and Jason Petersen and Marshall ISD's Board of Trustees member Rick McMinn. Wayne McWhorter is the county judge.
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;
- Hire a taxpayer liaison officer (districts in counties having a population of over 125,000);
- Appoint appraisal review board members;
The Board of Directors hires a chief appraiser as the chief operating officer of the district.
The district's budget lacks the detail necessary to comply with Section 6.06 of the Tax Code (see Appendix 26). 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.
PTD staff reviewed copies of the budgets for 2003 and 2004. Each budget listed categories of capital expenditures such as office furniture and equipment and computer equipment and software, but neither listed each proposed purchase. The 2005 budget lacked a listing of the benefits for each position, which was included in the 2004 budget. A summary of the budgets is in Exhibit 5.
Harrison CAD Budgets for Fiscal Years 2003 and 2004
2003 2004 Category Budget Percent of Total Budget Percent of Total Salaries $454,000 41.95% $459,000 42.41% Retirement 45,400 4.19% 45,900 4.24% Health Insurance 110,000 10.16% 110,000 10.16% Workers Comp 3,500 0.32% 3,000 0.28% SS Medicare 9,600 0.89% 9,500 0.88% Car Allowance 39,000 3.60% 39,000 3.60% Dues 3,500 0.32% 3,500 0.32% Travel 5,500 0.51% 5,500 0.51% Training 4,200 0.39% 3,650 0.34% Notary 100 0.01% 50 0.01% Review Board 7,000 0.65% 7,000 0.65% Directors 0 0.00% 0 0.00% Office Supplies 14,000 1.29% 14,000 1.29% Postage/Freight 20,000 1.85% 19,000 1.76% Janitor Supplies 800 0.07% 800 0.07% Subscriptions 3,200 0.30% 2,750 0.25% Books 4,000 0.37% 3,000 0.28% Janitorial 4,850 0.45% 4,750 0.44% Professional Appraisal Company 170,000 15.71% 170,000 15.71% Cartography 55,000 5.08% 55,000 5.08% Audit 2,400 0.22% 2,400 0.22% Microfilm 400 0.04% 150 0.01% Printing 2,000 0.18% 5,500 0.51% Advertising 5,000 0.46% 4,750 0.44% Computer Services 50,000 4.62% 50,000 4.62% Data Processing $5,000 0.46% $7,000 0.65% Telephone 14,500 1.34% 16,000 1.48% Insurance 3,000 0.28% 2,250 0.21% Utilities 10,000 0.92% 9,500 0.88% Maintenance 5,000 0.46% 5,000 0.46% Furn Fixt & Equip 1,500 0.14% 1,500 0.14% Office Building 7,300 0.67% 7,300 0.67% Equipment Lease 10,400 0.96% 7,500 0.69% Contingencies 5,000 0.46% 5,000 0.46% Maint. Agreements 3,000 0.28% 1,300 0.12% Equip Maintenance 1,100 0.10% 750 0.07% Equipment 2,500 0.23% 1,000 0.09% Total $1,082,250 100.00% $1,082,250 100.00% Source: Harrison CAD, fiscal years 2003 and 2004 budgets.
Boards of Directors are required by law to hold a public hearing on the budget. The board held a public hearing on the 2003 budget on May 16th, 2002. The 2004 and 2005 budget hearings were held on April 24th, 2003 and April 21st, 2004, respectively.
The budget summarized above does not meet the requirements of Section 6.06 of the Tax Code. This section of the code requires the Budget to have a list of each position along with the benefits for each one. With more than 61 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.
See Exhibit 6 for an example of the how the information should be listed.
Detailed 2005 versus Summary 2004
Position Salary Retirement Health Insurance Disability Insurance 2005 Total 2004 Total Administrative Assistant $24,990 $2,499 $6,864 $310 $34,663 $27,782 Appraiser 33,280 3,328 6,909 440 43,957 38,484 Appraiser 41,600 4,160 6,948 547 53,255 45,900 Appraiser 26,300 2,630 6,864 352 36,146 32,274 Appraiser 22,880 2,288 6,852 311 32,331 30,050 Appraiser 26,000 2,600 6,864 350 35,814 31,095 Assistant. Chief Appraiser 62,000 6,200 7,068 764 76,032 64,118 Chief Appraiser 78,900 7,890 7,152 1,009 94,951 83,300 Tax Deputy 22,100 2,210 6,852 285 31,447 26,809 Tax Deputy 18,720 1,872 6,840 257 27,689 27,793 Tax Deputy 19,760 1,976 6,840 257 28,833 28,206 Records MO 30,700 3,070 6,888 411 41,069 36,606 Records Administrative Assistant 24,000 2,400 6,852 321 33,573 30,058 Accounting Administrative Assistant 26,500 2,650 6,876 353 36,379 32,346 Drafting Technician 22,048 2,204 6,852 294 29,194 28,035 G.I.S. Analyst $41,600 $4,160 $6,948 $555 $53,263 $47,063 Source: Harrison CAD, 2004 budget and interviews.
Expand the detail of the budget presented to the Board of Directors for adoption to include the benefits for each position with sufficient detail to allow comprehensive decision making by the CAD board and taxing units.
The Agreement for Appraisal Services contract with Appraisal Records Services, Inc. for professional appraisal services does not include the dates when services will be delivered nor monitoring provisions that would ensure that the district is getting what it paid for. The contract was signed by the chief appraiser on July 26th, 2004. The contract provided for board member signatures, but there were no board member signatures on the contract. The contract covers services for tax years 2005, 2006 and 2007.
Appraisal Records Services, Inc. is to provide appraisals for oil and gas leases, utilities, industrial, some commercial properties, and some personal property located in the district. The contract defines each of these properties and includes a list of the properties. Besides appraisals, Appraisal Records Services, Inc. will, for additional monies, also present testimony to the Appraisal Review Board and help with tax abatement issues. The district agreed to pay Appraisal Records Services, Inc. $177,500 for each of the three years for these services. The contract calls for monthly payments. There was no list of properties to be appraised included in the contract. The chief appraiser is responsible for making sure the services are delivered and he receives the invoice and is also responsible for making out the check for payment and co-signing it, along with the board chairman. Using the appraisal district annual report, the company would appraise 130,269 parcels at an average price of $1.37 per parcel, which seems low, however, until you realize that 128,600 of the parcels are minerals. Typically mineral parcels are appraised en masse rather than appraising each individual parcel, so large clusters of mineral properties can be appraised at a low cost.
The contract establishes what records the appraisal firm will provide the district, including one copy of the appraisal records, two copies of notices of appraised value, one copy of the appraisal roll, computer tapes of values, one copy of the appraisal roll for each of the taxing units and one copy of division orders listing all current record owners of interests in oil and gas.
In order to get the appraisal roll ready each year the appraisal district should have all of the appraisal information complete and in the appraisal district system before the appraisal notices are printed. Appraisal notices are printed and mailed in May of each year. Without dates for specific deliverables, the district would have no recourse to compel the vendor to perform the services within a prescribed timeframe.
IAAO's Standard on Contracting for Assessment Services, Section 4, requires contracts have specific provisions, including the timeframes when services or goods will be delivered. Also the IAAO Standards Section 5 Monitoring Contract Performance requires contract monitoring. Section 5.4 of the Standard speaks to a Project Review Committee. The district should set up a Project Review Committee for projects that affect several departments or that have multiple objectives. A project review committee can provide the agency with an effective mechanism for coordination, monitoring, and review. Section 5.5 states that contract monitors are generally a party hired by the agency to review the services and products provided under the contract (the monitor may also be an independent third party). An effective monitor must be thoroughly familiar with the Request for Proposal (RFP) and successful bids, and, in fact, may also have served as a consultant in development of the RFP or selection of the successful bidder. The contract monitor must stay in close contact with the project and review major tasks in a timely manner.
Revise the professional appraisal services contract to include dates when the appraisal firm will perform its services and deliver its appraisals to the district, include a list of all property that the appraisal firm is responsible for appraising, have a board member sign any future contracts, according to board policy and include contract monitoring provisions to ensure that high quality, timely work is performed before payment is made.
In 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.
The Harrison CAD has comprehensive personnel handbook that explains the district's policy as an at-will employer and covers issues concerning leave, performance, insurance and employee suggestions. The handbook also describes guidelines for employee behavior in dealing with customers and guidance on the use of district equipment including telephones and workstations.
The district's manual also addresses issues of ethics, conflicts of interest, office security, and the district's position on a drug-free workplace.
Forty pages long, the policy manual is divided into more than two dozen sections, ranging from information on personnel records, chief appraiser and the ARB, to issues such as reductions in force, time off, and military and maternity leave
Personnel policy and procedures manuals help organizations define issues such as attendance, performance, insubordination, and leave policies and ensure management and staff understand their roles and responsibilities. Good policy and procedure manuals protect both management and staff from arbitrary practices and provide procedures to help management conflicts that may arise from day to day operations.
The district has adopted a personnel manual that informs employees of their rights and responsibilities.
With the exception of the human resources manual mentioned above, Harrison CAD has an outdated and unorganized policy and procedures manual for district operations. For example, the manual contains form letters all dated April 1993 that have not been revised. Also, names of CAD staff members appear on some of the documents as the contact person. The district's manual does contain some policy and procedures but it is mostly form letters and very few policy statements or procedures needed to accomplish the policies. The manual lacks a table of contents, an index, page numbers and information concerning when policies and procedures were updated.
The manual has some of the information needed to operate the appraisal district, but its lack of organization makes it difficult to read, and for an inexperienced staff person, it is extremely difficult to find information quickly and efficiently. The manual is also not made available for each employee or available for the public should they request it.
A good policy and procedures manual needs to be in place so that the staff will have policies to set standards and goals and procedures to follow or refer to. A procedures manual helps taxpayers and staff understand the steps the appraisal district follows to accomplish the policies of the appraisal district.
A policy tells a person, department, or group of individuals WHAT they must do, whereas as procedure 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 tragedies. 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 are 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.
The Jefferson appraisal district, recently reviewed by the comptroller's office, maintains a current and comprehensive policy and procedure manual detailing procedures for payroll, accounting, purchasing, and related procedures.
Organize the policy and procedures manual, review it for current content and update it to reflect district goals and operations.
The manual should include a table of contents, an index, page numbers and dates on policies and procedures so that the reader knows the last time a policy and procedure was updated. If required by board policy, the updated and organized manual should receive board approval.
Appraisal 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.
Harrison CAD's information processing system is outdated since the company that does the maintenance on the system is no longer maintaining the software and does not perform several functions. Due to the lack of maintenance the Appraisal Records Service (ARS) computer system cannot create an appraisal roll or produce tax statements and tax rolls. The chief appraiser has to hire an outside consultant to come in and program the system in order to run the appraisal roll. ARS has announced that it will no longer support Harrison's computer system, and an upgrade to the new ARS system would be a complicated transition and is cost prohibitive, according to the district.
The current system is not integrated with the district's mapping system. During the review the chief appraiser said he had begun the process to get a new computer system. The old ARS system that was in place was not able to run appraisal rolls for the taxing units. The district has since requested the company pick up the old system and the district has replaced it with a new system.
The district has a mapping system on a separate computer system that is currently working, but was not a part of the records system.
Develop a plan and systematically replace the old computer system and move the data to the newly installed system and integrate the new system with the current mapping system.