Overview of County Appraisal District
County History and Demographics
Jack County is located in north central Texas about 60 miles southeast of Wichita Falls and about 70 miles northwest of Forth Worth. Texas Highway 281 bisects the county running on a northwest to southeast diagonal. The west fork of the Trinity River flows through the county diagonally from northwest to southeast. The county is bordered by Archer, Clay and Montague counties to the north; Palo Pinto and Parker counties to the south; and Wise County to the east. The county covers 920 square miles of generally undulating pastures.
The area that now comprises Jack County was part of the Texan Emigration and Land Company. European settlement of the area began in 1855. Keechi, the first formal settlement, was established in 1856 and the Texas Legislature established Jack County on August 27, 1856. The Legislature named the county for William and Patrick Jack, two brothers who fought in the Texas Revolution.
Because of its location, Jack County became the northern edge of the Texas frontier. Early settlers in the area were subject to raids by indigenous peoples fighting encroachment on the land they lived on and hunted. The U. S. Army established Fort Richardson to protect settlers in the area in 1869. The fort is now a state park and historical site of interest in the county.
Agriculture, particularly cattle ranching, was the dominant economic force in Jack County's early years. Large scale farming began in the 1870s and corn was the dominant crop early. County farmers started growing cotton, oats and wheat during the last two decades of the 1800s and the county was a leading producer of oats and wheat by 1920. Ranching, however, remained the dominant agricultural activity.
The Jack County population grew rapidly from the beginning of its settlement in the 1850s. By 1880, only 14 years after the Legislature established the county, the population was 6,629. Ten years later, the population had grown to 9,740 and in 1910, the population was 11,817.
The population began to decline after 1920 and even though oil was discovered in the early 1920s, the general trend of the population between 1910 and 1970 was downward. The population low point came in 1970 when the population was 6,711. Since then, however, the population has rebounded and the 2004 population estimate was 8,891. Jacksboro, which is the county seat, accounts for slightly more than 50 percent of the county's population. It is more than twice as big as the other town in the county combined. Jacksboro, which is also the center of the county's business, retail and service activity, is about 60 miles northwest of Fort Worth and about 60 miles southeast of Wichita Falls.
Appraisal District Organization and Staffing
The appraisal district was established in 1980 and produced its first appraisal roll for the member taxing units in 1982 when state law required all appraisal districts to become active. The appraisal district has five employees and also serves as a consolidated tax collections office. The district contracts with Pritchard & Abbott, Incorporated (P&A) for professional appraisal services for mineral, utility, and industrial properties. The appraisal district also contracts with P&A to provide its computer operating system.
Exhibit 1 outlines the appraisal district organization.
Two appraisal district employees― the chief appraiser and field appraiser― are responsible for all of the appraisal work not contracted to P&A. The other three employees, including the chief deputy who also serves as the chief appraiser's administrative assistant, perform tax collection and customer service tasks.
Scope of Office
The appraisal district 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 manages the appraisal office.
The district provides appraisal services for nine taxing units: Jack County, Bryson Independent School District, Jacksboro Independent School District, Perrin-Whitt Consolidated Independent School District, the City of Bryson, the City of Jacksboro, Keechi Water District #1, Jack County Water Control and Improvement District, and Jack County.
Exhibit 2 presents the types of properties appraised by Jack CAD in tax year 2003 and 2004. 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 P&A.
Jack CAD Property by Category Summary with Assigned Responsibility
Tax Year 2003 and 2004
Property Category Account Type
Category A Residential In-house staff Category B Multi-Family In-house staff Category C Vacant Lots In-house staff Category D/E Ag-use and Farm/Ranch Land w/Improvements In-house staff Category F1 Commercial Real In-house staff Category L1 Commercial Personal In-house staff Category G Minerals Pritchard and Abbott Category J Utilities Pritchard and Abbott Category F2 Industrial Real Pritchard and Abbott Category L2 Industrial Personal Pritchard and Abbott Source: Jack County Appraisal District, October 2004.
Most appraisal districts contract some of their appraisal responsibilities to appraisal firms. Appraisal district contracts with external appraisers routinely do not include a parcel count for the number of appraisals an external appraisal company will perform but in assessing the staff to parcel count ratio in each appraisal district. PTD uses parcel counts reported in the district's 2003 school district self reports and the CAD self report to calculate the parcels per appraisal district staff. The 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, improvements on rural land; F1, commercial real property; L1 commercial personal property; M1, mobile homes; O, residential inventory; and S, special inventory, all as shown in Exhibit 3.
Reported Data on Parcels, Categories, Staffing, Training and Operations
Comparison to State and Group Averages
General Information Jack State Avg. Group Avg. Parcel Size Group (by number of locally appraised parcels) 10,000 - 14,999 Estimated # Locally Appraised Parcels 14,899 55,463 12,441 # Taxing Units 9 15 7 Locally Appraised Parcels to Staff 2,980 3,404 2,615 2003 Composition by Percentage of Value (Self Report): Jack State Avg. Group Avg. Residential Value 17.0% 52.6% 17.7% Non-Residential, Non Mineral 68.6% 43.6% 54.8% Non-Residential, Mineral 14.4% 3.7% 27.5% 2003 Composition by Account Category Type (Operations Survey): Real Property 19,514 45,804 13,246 Mineral Property 32,077 13,536 13,245 Business Personal Property 377 4,689 649 Individual Personal Property 0 1,342 312 Total Accounts 51,968 65,372 27,451 2003 Composition by Locally Appraised Parcel Category (Estimated from Self Report): Jack State Avg. Group Avg. Parcel Type # Parcels % of Parcels A 2,236 15.0% 44.1% 26.1% B 8 0.1% 1.0% 0.3% C 1,767 11.9% 13.1% 15.3% D 7,132 47.9% 24.7% 36.1% E 2,906 19.5% 4.5% 12.5% F1 283 1.9% 3.1% 3.4% L1 374 2.5% 5.7% 3.7% M1 193 1.3% 2.2% 1.9% O 0 0.0% 1.4% 0.3% S 0 0.0% 0.1% 0.5% Total 14,899 100.0% 100.0% 100.0%
PTD estimates that the Jack CAD staff is responsible for appraising about 14,899 parcels. The International Association of Assessing Officers (IAAO) Standards state that small taxing units run from 1,500 to 1,700 parcels per staff member and that large taxing units run from 3,000 to 3,500 parcels per staff member with an average of 2,500 parcels per staff member.
Comparable appraisal districts to Jack CAD are: Jackson, Lampasas and Bosque. The number of parcels per staff member in Jack CAD is 2,980; the number of parcels per staff member in Jackson CAD is 3,043; the number in Lampasas CAD is 3,075; and the number in Bosque CAD is 3,226. 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 sometimes even residential properties may require more appraisal staff. The data given here is meant to give the reader at least some comparison to other appraisal districts with similar parcel counts and compared to the IAAO standard.
Exhibit 3 includes reported data concerning Jack CAD and the state and CAD group averages.
Reported Data On Parcels, Categories Staffing, Training and Operations
Comparison to State and Group Averages (continued)
Financial and Staffing
Information (Operations Survey)
State Avg. Group Avg. 2003 Budget $235,000 $1,079,695 $273,141 2003 Surplus $8,753 $71,620 $15,867 2003 Surplus as % of Budget 3.7% 6.6% 5.8% 2004 Budget $219,445 $1,104,961 $281,073 % Change in Budget -7.1% $0 2.9% 2004 Budget per Total Local Parcel $14.73 $19.92 $22.59 Staffing Full Time 5 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 $38,000 $53,564 $44,270 Appraisers Full - Time 1 8 2 Part - Time * 0 1 Salary Range: Low $17,000 $24,504 $24,638 High $18,400 $37,521 $28,640 Training Budget $5,950 $8,832 $4,153 # Registered with BTPE (1) 5 9 4 Types of BTPE Certification: RPA (2) RTA (3) RTC (4) All 1 3 0 0 Exhibit 3
Reported Data On Parcels, Categories Staffing, Training and Operations
Comparison to State and Group Averages (continued)
Jack State Avg. Group Avg. Reappraisal Last Year of Reappraisal 2003 Next Year of Reappraisal 2004 Type of Appraisal: Complete Method of Appraisal: Combination Protests 76 3,131 113 Protests per Parcel 0.1% 4.7% 0.4% Consolidated Collection Yes Collection Budget $47,775 Geographic Information System (GIS)? Yes Percent GIS Complete 100% 80% 84% Board of Directors Members 8 6 6 Tax Assessor Votes? Yes Elected Members 1 3 3 Note: An asterisk (*) is shown where data was not reported.
Source: Jack CAD 2003 ISD Self Report, CAD 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 preparing for the Appraisal Standards Review, the Property Tax Division requested that Jack CAD complete the IAAO's Self Evaluation Questionnaire. This instrument allows an appraisal district to assess its compliance with acceptable procedures, standards and organization. PTD sent each appraisal district with an eligible school district 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.
The PTD provided the IAAO self-assessment guide along with the questionnaire. In the guide's introduction, it stated:
The guide is designed for use by individuals who want to evaluate their own procedures and who are seeking to either continually improve or to evaluate their procedures against what is believed to be a standard of best practices in assessment administration.
The Comptroller provided the questionnaire and the guide to Jack CAD to allow it to perform a self assessment of its operations and help it recognize areas where it is doing a good job and areas where it needs to improve. While the district answered the questions, the responses were not particularly useful in establishing how well the district was performing its appraisal obligations as the district did not elaborate enough for the reviewer to draw many conclusions.
Chapter 1: Setting, Legal Framework, Value Standard and Assessment Cycle
Jack CAD's responses show the appraisal district staff views its current educational and financial resources as sufficient for performing their duties. The district's response about keeping current with legal changes that affect the property tax system indicates the district takes a proactive interest in keeping current.
Chapter 2: Resources and Management
The district responded that it conducts formal planning. The actual responses, however, indicate that its planning is associated only with budget preparation. The district notes that it uses performance-based budgeting in its budget planning. Other responses to the district's resource evaluation stress the staff's competence, experience and cross training.
Chapter 3: Computerization
The responses show that the district sees its computer operating system as adequate and flexible. The system also includes the ability to produce maps and appraisal reports using property characteristic variables.
Chapter 4: Mapping
The district responded that it has a complete set of property maps. The district also responded that it regularly updates the map system for property splits. The district receives deed filings monthly from the county clerk, which the district uses to update maps. The district remarked that its map system is highly efficient and pays for itself through public purchases of appraisal district maps.
Chapter 5: Data Collection
The district responded that its property record system is computerized and that property characteristics are updated annually through physical inspections. The district also noted that it uses local government permit information to help verify property changes. The district also noted its use of a laptop computer while performing field inspections as an advantage in keeping property records and characteristics current. The district responded that using the laptop computer during field inspections has cut the time required for field work in half.
Chapters 6: Land Evaluation
Responses about the appraisal district's land evaluation practices indicate that it maintains a land sales file and that these sales are reviewed and confirmed. The district uses a sales verification letter that it sends to buyers and sellers. Buyers and sellers are identified by researching deed filings. The district also responded that it uses other elements to help it analyze its market for vacant land such as geographic stratification, abstraction and plotting sales on maps. The district also described its land valuation processes, specifically noting that it appraises land based on the way land sells, that is, values are based on the type of unit (price) for similar properties sell.
Chapter 7: Residential Property Valuation
The district's responses indicate a commitment to using ratio studies as a guide to valuing residential property at its market value. The district noted that it runs ratio studies using various geographic or taxing unit strata and also by using various property characteristic variables. The district noted that it uses the ratio study results to develop modifiers, which it uses to adjust values so they annually reflect the market. The district also stated that cost schedules are computerized and updated as sales indicate.
Chapter 8: Commercial Property Valuation
The appraisal district reported that it uses all three approaches to value in appraising commercial property, but the fieldwork for the appraisal standards review indicated that the district uses replacement costs to appraise improvements of all types. The district stated that it does adjust replacement costs according to the local market with modifiers. In addition, the district does have an internal appraisal review system as the chief appraiser must approve all values before they are assigned.
Chapter 9: Sales Data, Ratio Studies, and Stratification
The appraisal district responded that it screens and stratifies sales for market analyses. The district responded that it uses ratio studies for planning and determining reappraisal priorities. For purposes of conducting ratio studies, the district stratifies properties by variables including class, size and geographic area. The district also described its internal procedure for ensuring that similar properties are treated the same in order to avoid sales chasing.
Chapter 10: Personal Property Assessment
The district's responses about its personal property appraisal program are consistent with generally accepted practices. The district indicated that it inspects properties to verify taxpayer renditions when it suspects that rendered values do not represent the property at the location.
Chapter 11: Assessment Administration
The district uses its automated system to make information available to the public. The district described its process for verifying eligibility for agricultural-use appraisal and for verifying residency before granting homestead exemptions.
The district does regular deed research and gets deed filings monthly from the county clerk. The district noted that it promptly updates its property records based on the deed information.
Chapter 12: Defense of Values
The responses to this subject show the district complies with the state standard for certifying values to the appraisal review board before protests. The district also responded that it encourages taxpayers to discuss appraisal concerns before filing formal protests.
Chapter 13: Public Relations
The appraisal district responded that it has a public relations program. The responses indicate that the public relations program focuses on publishing articles in the local newspapers and by regularly attending taxing unit board meetings.
Findings of the Property Value Study and Summary Worksheets
The PVS determines the total property value in each school district in the Jack CAD. With a few notable exceptions, CADs 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 can be under duress to buy or sell, the property must be on the market for a reasonable time and none of the parties to the sale can 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 value lost due to productivity appraisals of qualified agricultural lands, the value lost due to 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 who report 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.
Perrin-Whitt CISD protested the preliminary findings of the 2003 PVS. The district protested Category A (single family residences), Category D/E (rural land and improvements on rural land) and Category J (real and personal property of utilities). PTD staff reviewed the protest filings and recommended changes that affected the market value estimates for Categories A and D/E. The recommended changes were in Perrin-Whitt CISD's favor and the Category A and Category D/E ratios increased. The Category A ratio went from .9785 to .9834 and the Category D/E ratio went from .8719 to .8843. PTD recommended no change to the Category J sample. In fact, the district submitted no evidence for the Category J appeal and hence, the ratio for that category remained unchanged.
The local value of categories of properties in Perrin-Whitt CISD that PTD studied in the 2003 PVS was $66,274,513. The PTD market value estimate for the same categories was $72,667,080. For the local reported value to have been considered valid, it needed to be within plus or minus 5.4866041 percent of the state value. The 5.1471172 percent represents PTD's margin of error in the Perrin-Whitt CISD and the value of the margin of error was $3,986,955. The margin of error produced a confidence interval, that is, the range of values with an equal statistical chance of being correct was between $68,680,125 and $76,654,035 (see Appendix 14). The local value fell $2,405,612 below the lowest value in the range of values considered valid.
A review of the school districts in the county indicates that Jack CAD is consistently under-appraising the rural properties as determined by the PTD. In the 2003 PVS, Perrin-Whitt school district fell outside the study's statistical margin of error. Category D2, Non-Qualifying Acres and Farm and Ranch Improvements, is the primary reason that the school's values are not within the acceptable range determined by the study.
There were four property categories tested in Perrin-Whitt CISD in 2003: (1) category A, Single-Family Residences, making up 9.7 percent of the districts value with a weighted mean ratio of .9834; (2) category D, Rural Real, making up 49.1 percent of the districts value with a weighted mean ratio of .8843; (3) category G, Minerals, making up 23.4 percent of the districts value with a weighted mean ratio of .9832; and (4) category J, Utilities, making up 13.8 percent of the districts value with a weighted mean ratio of .9352. 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.
Perrin-Whitt CISD's rural land and improvement values (Category D) is appraised below market value, and is the primary reason that the school's values are not within the acceptable range determined by the study. 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. Perrin-Whitt CISD's subcategory D1 makes up 18.2 percent of category D's value and 10.3 percent of the tested value. D1 received a weighted mean ratio of .9666. Subcategory D2, however, makes up 81.8 percent of category D's value and 47 percent of the school district's total tested value. D2 received a weighted mean ratio of .8679. This indicates that the residences in the rural areas are being under-appraised. The low ratio in category D drops the district outside the margin of error causing the school district to be identified as eligible.
Perrin-Whitt CISD's category J, Utilities, is also below the margin of error limits, but is not a primary reason for the school district to get an invalid value finding. Category J makes up only 14 percent of the school district's value, and received a weighted mean ratio of .9352.
Bryson ISD's rural land and improvement values (category D) are appraised below market value and is just within the confidence interval limit. The PVS showed a ratio of .9108 for Category D. Category D made up 28 percent of the school district's value. Subcategory D1 makes up 31.8 percent of category D's value and 14 percent of the tested value. D1 received a weighted mean ratio of .9129. Subcategory D2, however, makes up 68.2 percent of category D's value and 29 percent of the school district's total tested value. D2 received a weighted mean ratio of .9098.
Jacksboro ISD is also within the confidence interval limit. The farm and ranch land that qualifies for the special productivity appraisal makes up 32.1 percent of category D's value and 9 percent of the tested value. D1 received a weighted mean ratio of .9227. Subcategory D2, makes up 67.9 percent of category D's value and 18 percent of the school district's total tested value. D2 received a weighted mean ratio of .9965.
The under appraisal of D/E properties was the primary reason PTD found Perrin-Whitt's values invalid.
In summary, the Jack CAD needs to focus its energies on category D valuation of rural properties. Subcategory D2, Non-Qualifying Acres and Farm and Ranch Improvements, was the major factor causing the PTD to assign Perrin-Whitt school district an invalid value finding in 2003. Although in all three-school districts within Jack CAD, the productivity value of qualifying acres (D1) was assessed at or below market value, it only affected the total taxable value finding in Perrin-Whitt CISD.
For a statistical explanation of why the district was selected as eligible, see Appendix 18.