Chapter 2
Findings of the Appraisal Standards Review
This chapter of the report addresses findings, commendations and recommendations from the Appraisal Standards Review of the Jasper CAD in two sections:
- 2.1 Generally Accepted Appraisal Practices
- 2.2 Other Recommendations
2.1
Generally Accepted Appraisal Practices
There are three general appraisal methods or approaches-cost, income and market-that a chief appraiser must consider in determining the market value of property. The appraiser must use the method most appropriate in appraising a particular property.
Additional information about the approaches to determining or appraising value may be found in appraisal textbooks and IAAO Standards. Appraisers usually determine the value of producing mineral deposits-such as oil, gas and coal-and the value of many utility and commercial properties by using the income approach to value. Most appraisal districts contract with consultants to appraise mineral and utility properties. The chief appraiser can provide information that helps the contractor decide the proper method to use to appraise mineral and utility properties.
Jasper CAD's appraisal manual contains local procedures for appraisers to follow when appraising residential and commercial real estate, mobile homes and land, including agricultural land qualifying for productivity use or wildlife management. The manual contains taxing entity codes, property classification codes, local photos of each classification of property and a description of characteristics common to each classification. The manual helps promote consistency and uniformity among appraisers when appraising property. The Board of Tax Professional Examiners Code of Ethics is also included in the manual to guide appraisers.
In 2005, the CAD began using an automated version of Marshall & Swift's Commercial Valuation Guide to appraise commercial real property. According to the CAD's part-time commercial appraiser, the CAD adjusts the Marshall & Swift schedules using the local market adjustment published by Marshall & Swift for the Beaumont, Texas area. In 2005, the chief appraiser also began building new commercial land tables along highways 190 and 96 in the cities of Jasper and Kirbyville.
FINDING
Jasper CAD does not have an agricultural appraisal advisory board.
Agriculture appraisal advisory boards (Ag boards) were created by the Legislature to advise the chief appraiser on the valuation and use of land designated for agricultural use. According to the chief appraiser, Jasper CAD's last Ag board was appointed by the chief appraiser, with the board's consent, on September 10, 1992 and has not met since 1992.
The chief appraiser responded with the following opinion in July 2006:
Since Jasper CAD is primarily made up of land coverage as timberlands (88.5 percent) and a small fraction as agricultural lands (11.5 percent), and since almost all meaningful discretion has been removed from the chief appraiser in the appraisal of timberlands in recent years, the chief appraiser notes that a local ag advisory board becomes a moot body. Since the law requires it, he will reactivate the board by making appointments for consent by the board at a workshop scheduled for July 6, 2006.
CAD staff appraises the CAD's open-space land. This appraisal includes developing value tables, providing various notices to property owners, reviewing returned applications and entering data. Since no Ag board exists, the chief appraiser has not been formally advised on agricultural land valuation as prescribed and intended by the Tax Code. An Ag board was not available to assist Jasper CAD in resolving agricultural land issues in the 2004 PVS, which contributed to the CAD receiving an ASR and put Jasper ISD at risk of future school funding loss.
Sections 6.12 (a) - (g) of the Tax Code address the requirements for Ag boards. In addition, the Comptroller's Web site has a review of the law and implementation suggestions for Ag boards. An Ag board must have at least three members. These members must be appointed by the chief appraiser with the advice and consent of the CAD's board, and additional members may also be appointed with the CAD board's advice and consent. The law specifies the qualifications of the three required members, with the goal of balanced representation of agricultural or timber land owners. The chief appraiser is restricted from appointing an appraisal district officer or employee to serve on the board. The Ag board is required to meet at the call of the chief appraiser at least three times a year.
An Ag board has not been available to help the chief appraiser gather sets of leases typical for the area, determine typical expenses in the area or assist with any other agriculture appraisal-related issues. In July 2006, the chief appraiser responded with his opinion that agricultural professionals could not even provide this information, and it is unlikely that an Ag board would have contributed any more reliable information. The chief appraiser, however, agreed with the following statement about appointing an Ag board and conducting the required annual meetings:
Appointing the Ag board and conducting the required annual meetings ensures that continuing assistance for maintaining accurate appraisals and classification of agricultural land is available as required by law.
RECOMMENDATION 1
Appoint an agricultural appraisal advisory board as required by Section 6.12, Tax Code.
FINDING
Jasper CAD does not have a systematic process for tracking property value protests.
According to the chief appraiser, when a taxpayer files a protest, the paperwork is date stamped and placed in a cardboard file storage box designed for filing. Appraisers pick up the protests and contact the property owners in an attempt to resolve issues informally. If the appraiser and property owner come to an agreement, the property owner signs a settlement form, which is then attached to the original protest form and filed in the appraisal record's folder. The chief appraiser noted that though not required, all settlements are presented to the ARB for review. An appraiser changes the appraised values accordingly. If the appraiser and property owner cannot reach an agreement informally, a hearing before the appraisal review board is scheduled.
The CAD does not track the number of inquiries, contacts or protests received, but it does track the number of protests that go to the ARB by preparing a daily list of protests scheduled for hearings. In the 2004-2005 Appraisal District Operations Survey, Jasper CAD reported zero protests in 2004. According to the chief appraiser, this was a 2004 reporting error, but he was unable to determine how many protests were received. The chief appraiser noted that 26 protests went to the ARB in 2004. The number of protests filed in 2005 could not be determined, but according to the chief appraiser, 25 protests went to a formal hearing. Appraisal districts with similar total parcel counts averaged 803 protests, according to the Comptroller's Appraisal District Operations Report for 2004-05.
The chief appraiser estimates that about 1,700 notices of appraised value were mailed in 2004 and about 4,000 notices were mailed in 2005. The estimated number of protests and notices mailed seem low because the single-family residence and rural real taxable land (and land use) property categories usually have many individual taxpayer owners and comprise 50 percent or more of four of the five Jasper CAD school districts' local tax roll value, as shown in Exhibit 6.
Exhibit 6
2004 PVS Information for Jasper CAD School Districts
(Local Tax Roll Value, Millions of Dollars)
| Property Category | Kirbyville CISD | Buna ISD | Brookeland ISD | Evadale ISD | Jasper ISD |
|---|---|---|---|---|---|
| Single-Family Residences | $65.7 | $72.0 | $72.1 | $17.5 | $220.0 |
| Rural Real (Taxable) | $69.4 | $65.5 | $15.6 | $ 8.0 | $ 66.0 |
| Percent of local tax roll before deductions | 75% | 60% | 65% | 5% | 47% |
Source: Texas Comptroller of Public Accounts 2004 PVS.
A systematic tracking system for protests will help to ensure that each protest is addressed. An automated, formal system will also assist the ARB in determining how many hearing dates are needed, how each protest is resolved and the amount of value under protest. The ARB cannot approve appraisal rolls if five or more percent of roll value remains under protest. Currently, the chief appraiser manually calculates the amount of value under protest that has not been resolved.
In July 2006, the chief appraiser responded that in 2005, the ARB approved the appraisal roll with 96.9 percent ($1,915,546,813) of the total value ($1,977,607,582) resolved. According to the chief appraiser, this means that the unresolved value was less than the five percent threshold, at 3.1 percent ($62,060,769).
By not knowing the number and the total value of protests, the chief appraiser puts the CAD at risk of not knowing if the appraisal roll is eligible for approval or if all protests have been handled. The chief appraiser responded in July 2006 that it is important that he know if the appraisal roll is eligible for approval or if all protests have been handled. According to the chief appraiser, upgraded automated appraisal software installed in 2005 has an ARB module for tracking appeals, and the CAD plans to use the automated tracking system for protests filed in 2006.
An accurate accounting of all protests is crucial to the operations of the ARB. Section 41.12, Tax Code, requires that the ARB acts on all timely filed protests and approves the appraisal roll, but only if less than 5 percent of the roll's value remains under protest. In July 2006, the chief appraiser noted that Jasper CAD's ARB complied with this requirement. Effective appraisal districts monitor the protest process by tracking taxpayer protests by count and value to ensure timely resolution of protests, appraisal roll approval and compliance with local and state laws.
In July 2006, the chief appraiser also noted that ARB hearings and protest procedures are required by the Tax Code, and [he] has provided the Jasper CAD ARB procedures to the Comptroller for this review. The chief appraiser emphasized that an automated tracking system is planned for implementation in 2006.
Brazoria County Appraisal District, for example, has well-developed informal hearing and protest procedures, including a tracking process, that helps taxpayers and staff members understand the required steps and responsibilities of all entities and that allows Brazoria CAD to efficiently track, and report on, all protests.
RECOMMENDATION 2
Develop and use a complete tracking system for property value protests.
FINDING
At the time of the review, Jasper CAD lacked a complete written reappraisal plan that meets board policy and Tax Code requirements.
Adopted in 1988, Section 4.3 of the CAD's board policy states that the board and chief appraiser shall establish a reappraisal plan which allows for the reappraisal of all property in the CAD at least once every three years. The Jasper County Central Appraisal District Building & Land Classification Schedule contains a one-page reappraisal plan that begins, "The Jasper County Appraisal District reappraisal plan is a restatement of legal requirements of the Property Tax Code." The plan further states... "All properties should be reappraised at least once every three years. [... ] Productivity valuations for both agricultural and timber lands should be reviewed annually. [... ] There should be sufficient testing and analysis performed to determine whether or not modifications need to be made in the schedules, if any. [... ] This plan is in effect for the three year cycle from 1989 through 1991, and each three year cycle thereafter until modified or amended."
The plan does not identify specific areas the CAD needs to reappraise and resources necessary to accomplish the reappraisal. No evidence was presented to show that the plan has ever been modified or amended.
According to the chief appraiser, the CAD does not have an up-to-date, written reappraisal plan. Discussion on developing a reappraisal plan was tabled at the January 2006 board meeting. According to the chief appraiser, the board wanted to obtain additional information about the requirements of the plan at the annual conference of the Texas Association of Appraisal Districts in Houston, Texas, on Feb. 22-24, 2006. The March 2006 board minutes indicate the chief appraiser held a discussion on topics that included the development of a reappraisal plan, but no other details were provided.
The chief appraiser noted that he contacted the Jefferson CAD chief appraiser several months ago and again in June 2006 regarding their development of a reappraisal plan under the new law (Section 6.05(i), Tax Code) that went into effect September 1, 2005. Jefferson CAD is currently in the same mode as Jasper CAD, as it is exploring ideas for developing such a plan.
The chief appraiser also noted that when the Tax Code was changed in 1997 to require that mass appraisal standards comply with the USPAP, Jasper CAD joined with the Jefferson CAD and later with the Orange CAD to contract with the IAAO to review their USPAP compliance documents. All three CADs received favorable compliance reviews. The development of the USPAP document was originally performed and financed by the Jefferson CAD, the Jasper CAD financed the IAAO review costs (of Jasper and Jefferson CADs), and later the Orange CAD joined the project by paying IAAO, Jefferson CAD and Jasper CAD. The joint project resulted in a cost to each CAD of $3,750, a total savings of approximately $33,000. Independent of each other, the costs were estimated to be $15,000 for each CAD.
In the IAAO Assessment Practices Self Evaluation Questionnaire, the chief appraiser stated the CAD "has routinely indicated they are reappraising all property at least once every three years" and is in the process of developing a reappraisal plan that complies with state law. In the 2004-2005 Appraisal District Operations Survey, Jasper CAD reported its last reappraisal occurred in 2004 and the next reappraisal is scheduled for 2006.
As a result of not having or following a complete reappraisal plan, four of five school districts have misappraised residential property. Jasper ISD received an invalid finding in the 2004 PVS and is at risk of future school funding loss without improved appraisal accuracy. The 2004 PVS showed Jasper ISD falling outside of the calculated confidence interval, with single-family residential (Category A) testing with a weighted mean ratio of 0.8665 and commercial real estate (Category F1) testing with a weighted mean ratio of 0.9011. Brookeland, Kirbyville Consolidated and Buna ISDs also tested with lower than desired Category A weighted mean ratios in the 2004 PVS, ranging from 0.8870 to 0.9173, with Category F1 not tested in these school districts.
Preliminary results of the 2005 PVS show all school districts in the CAD are outside of their confidence intervals. Jasper County, however, was declared a disaster area as a result of Hurricane Rita, so the Comptroller issued provisional preliminary local value findings for Jasper CAD ISDs, which provide for an extended schedule. Under the extended schedule, amended preliminary findings for disaster area counties will be issued by July 1, 2006. A school district's 40-day period to protest the findings begins on the date the amended preliminary findings are certified.
In July 2006 the chief appraiser indicated that Jasper CAD plans to have a detailed reappraisal plan approved before the new law's first September 2006 deadline.
Sections 6.05 and 25.18, Tax Code, require appraisal districts to develop a biennial written appraisal plan and hold a public hearing to consider the plan. The law went into effect Sept. 1, 2005, and requires the plan be approved by the CAD's board before Sept. 15 of even-numbered years.
According to Uniform Standards of Professional Practice (USPAP) Standard 6, a mass appraisal includes:
- identifying properties to be appraised;
- defining market area of consistent behavior that applies to properties;
- identifying characteristics (supply and demand) that affect the creation of value in that market area;
- developing a model structure that reflects the relationship among the characteristics affecting value in the market area;
- calibrating the model structure to determine the contribution of the individual characteristics affecting value;
- applying the conclusions reflected in the model to the characteristics of the property(ies) being appraised; and
- reviewing the mass appraisal results.
USPAP Standard 6 applies to all mass appraisals of real or personal property, regardless of the purpose or use of such appraisals. This standard is intended for the substantive aspects of developing and communicating reliable analyses, opinions and conclusions in the mass appraisal of properties.
A reappraisal plan also provides for a physical inspection of the properties being appraised. Alternatively, the plan can include reliance on reliable sources of property information instead of physical inspections. Such sources include, but are not limited to, deeds or other legal documentation, aerial photographs, land-based photographs, surveys, maps and property sketches. A complete plan will indicate instances or types of properties that will be appraised using sources of information other than physical inspection.
The IAAO publication, Property Appraisal and Assessment Administration, Chapter 13, Mass Appraisal, states that the required activities for all reappraisals must include the following steps in the order given:
- Performance Analysis - Determines whether or not the values are consistent with the market and if the values are equitable and that ratio studies are the primary tool for the analysis.
- Reappraisal Decision - Use statutes or administrative rules. This may include a cyclical schedule in which jurisdictions are physically reviewed and revalued. It is also noted that the reappraisal requires careful planning along with a major commitment of resources.
- Analysis of Available Resources - This step is performed before defining goals and objectives. This includes evaluating the staff, budget, existing systems and practices, data processing support and existing data and maps. The publication also stresses that an adequate budget is crucial in that it can overcome deficits in other areas.
- Planning and Organization - IAAO emphasizes that this is the most important aspect of reappraisal as it identifies the target completion date and performance objective, specific plan of action and timeline. The plan should also include definitions of critical activities with completion dates, assignment of responsibilities, and establishes data collection and field work standards.
- System Development - This produces the procedures, methods, manuals, and software for the mass appraisal system.
- Pilot Study - This study tests procedures in several portions of the jurisdiction. It should include a ratio study to verify if the system produces reliable and accurate values and point out needed modifications.
- Data Collection - After procedures and forms are made, tested and approved the data collection can start. IAAO stresses that quality control is essential.
- Production of Values - This begins with a market analysis, model development, model calibration and calculation of preliminary values. The ratio study then assesses the consistency and validity of the values between each property type and area. After the models provide acceptable results, they can be used to produce values.
- Preparation of Assessment Roll;
- Final Performance Analysis;
- Data Maintenance; and
- Value Updates.
A thorough reappraisal plan discusses in detail how and when the appraisal district plans to perform each of the activities mentioned above. A detailed reappraisal plan, if executed properly, provides a roadmap to ensure that school districts receive valid values in the PVS and precludes a school district receiving less than the expected amount of funding from the state. Effective appraisal districts develop and properly execute a complete reappraisal plan, ensuring that taxpayers are treated equitably in assigning property taxes.
By developing and properly executing a complete reappraisal plan, the CAD can help ensure that taxpayers are treated equitably in valuing property while reappraising on schedule and complying with the Tax Code.
Jefferson County Appraisal District, for example, has a one-year model reappraisal plan that meets or exceeds the criteria of the law and recommended industry standards, with all of the desired details, that can be expanded to meet the biennial written appraisal plan requirement in effect for 2006.
RECOMMENDATION 3
Adopt and implement a biennial reappraisal plan that complies with USPAP Standard 6 and Sections 6.05(i) and 25.18, Tax Code.
FINDING
Jasper CAD does not effectively use ratio studies to measure appraisal performance.
Ratio studies compare the market value of individual properties in a representative sample of similar properties to the local appraised value for each property in the sample.
According to the chief appraiser, staff rarely performs ratio studies. He cited not having an automated ratio studies program as the reason for not performing the studies, although ratio studies can be calculated manually. The chief appraiser advised that he uses the PVS to analyze the CAD's appraisal performance and to identify areas lacking appraisal uniformity. Jasper CAD's 2005 appraisal software upgrade offers the ability to generate ratio studies on demand, and the chief appraiser added that plans are underway to use the automated ratio studies program in 2006 and 2007.
In practice, the chief appraiser reviews sales manually. If there are enough sales to define a market area within a certain geographic location, the chief appraiser looks at the ratios to determine if a market adjustment is needed within that area. The chief appraiser calculates market adjustments using the average ratio within a group of sales. For example, if the average ratio among a group of sales was 0.85 or 15 percent below 100 percent market value, a typical market adjustment would be 1.15.
The major aspects of appraisal performance evaluations are the appraisal level and measuring appraisal uniformity. The appraisal level refers to the percentage of local appraised values that represent market value and is determined by dividing the local appraised value by the market value. Indicators of market values may be either sales or independent "expert" appraisals. Appraisal uniformity refers to the degree to which properties are appraised at equal levels. Uniformity is typically represented by a statistic called the coefficient of dispersion (COD). The COD measures the average variation in appraisal levels from property to property or among property types and is calculated from a statistical formula that incorporates the ratios for individual properties in a sample of properties.
In July 2006, the chief appraiser responded with the following statement regarding this topic:
Under Section 5.12(a) of the Property Tax Code, a mandatory performance audit by the Comptroller is required if certain acceptable standards are not met by CADs. These standards are: 1) the CAD median level of appraisal must be at least 0.75; 2) the CAD coefficient of dispersion must not exceed 30; and 3) the CAD must not have a ratio difference between its lowest and highest categories any higher than 0.45. Jasper CAD has met these standards at least since the year 2000. Though Jasper CAD has a positive history of meeting these standards, recent legislation added more stringent standards and must be met by the CAD for each school district as opposed to the CAD as a whole.
As shown in Exhibit 7, Jasper CAD's sales analysis method has not resulted in accurately measuring appraisal uniformity in most individual categories.
Exhibit 7
Jasper CAD 2004 and 2005 PVS CODs
Comparison with Industry Standards
|
PVS Property Category |
Jasper CAD 2004 PVS COD |
IAAO Recommended COD |
Jasper CAD 2005 PVS COD* |
|---|---|---|---|
| A (in-house) | 18.75 | 15 or less | 30.98 |
| B (in-house) | NT | NT | NT |
| C (in-house) | 68.95 | 20 or less | 81.55 |
| D (in-house) | 23.55 | 20 or less | 28.96 |
| F1 (in-house) | 14.79 | 20 or less | 15.62 |
* 2005 PVS preliminary results. Jasper County was designated a disaster area due to Hurricane Rita and is subject to an extended due process PVS schedule.
Note: NT means not tested in the PVS.
Source: 2004 and 2005 PVS and IAAO Standard on Ratio Studies, Section 14.2.
High CODs indicate a lack of appraisal uniformity. Appraisal uniformity ensures that similar properties are treated equally. The 2004 and 2005 PVS COD results show that Jasper CAD is not treating similar properties the same in most tested categories. Strong appraisal uniformity guarantees each property owner pays his fair share of taxes and no more or less than others.
Jasper ISD received an invalid finding in the 2004 PVS due to low weighted mean ratios in two tested categories. Single-family residential in Jasper ISD tested with a weighted mean ratio of 0.8665. Commercial real property tested with a weighted mean ratio of 0.9011. Misappraising residential and commercial property contributed to Jasper ISD's invalid finding in the 2004 PVS and could lead to school funding loss if not corrected. The value stratification associated with these 2004 PVS categories is shown in Exhibit 8.
Exhibit 8
Jasper ISD
2004 PVS Stratification
Single Family Residential and Commercial Real Property
| Category | Value Stratification Detail |
2004 PVS Weighted Mean Ratio |
|---|---|---|
| Single Family Residential | $14,468 to $38,563 | 0.9225 |
| Single Family Residential | $38,564 to $61,709 | 0.7922 |
| Single Family Residential | More than $89,440 | 0.7820 |
| Commercial Real Property | $28,300 to $102,592 | 0.8004 |
| Commercial Real Property | $102,593 to $253,485 | 0.9340 |
| Commercial Real Property | $253,486 to $813,920 | 0.8928 |
Source: Texas Comptroller of Public Accounts 2004 PVS.
Value stratification was also an important factor in residential and commercial appraisals. The stratification summary shows the value strata with the lowest ratios having the greatest appraisal weaknesses. Undervaluing property in these strata contributed to Jasper ISD receiving an invalid finding in the 2004 PVS.
In 2005, the CAD began using an automated Marshall & Swift Commercial Guide to appraise commercial real property, and the chief appraiser began building new commercial land tables along highways 190 and 96 in the cities of Jasper and Kirbyville. The CAD's office manager said some 2005 commercial property valuations are still in progress and that the chief appraiser is handling them individually with each property owner.
Section 23.01, Tax Code, requires that property be appraised at its market value. IAAO's Standard on Ratio Studies, Section 4, lists the six basic steps of ratio studies:
- definition of purpose and objectives;
- collection and preparation of market data;
- matching appraisal and market data;
- stratification;
- statistical analysis; and
- evaluation and use of results.
To be an effective tool in measuring its appraisal performance, effective appraisal districts do not limit sales analysis to location only. Property characteristics such as class, size, age and value are also reviewed. Stratifying sales information according to property characteristics is useful in identifying lack of appraisal uniformity among property types. And while the PVS is a good tool for appraisal planning, the timing of the study and its results are not available in time to solve current year appraisal weaknesses.
By improving ratio study methods, the CAD will ensure necessary adjustments are made to produce values at or near the market. Effective appraisal districts conduct frequent ratio studies with associated appraisal maintenance, ensuring necessary adjustments are made to produce values at or near the market.
Nueces County Appraisal District (Nueces CAD), for example, has a computerized appraisal system that provides appraisal analysis through ratio studies within and among property classifications. Nueces CAD's appraisal leadership and appraisal department heads make reappraisal and value maintenance decisions based on ratio study runs within property classes, by school district and county. They conduct these ratio study runs at least quarterly to determine appraisal performance, ensuring that values are at or near the market.
RECOMMENDATION 4
Improve methods of using ratio studies to eliminate unequal levels of appraisal and make certain that all categories of property are being appraised at current market value.
FINDING
Jasper CAD does not have written procedures for gathering and analyzing sales.
In July 2006, the chief appraiser responded with the following information:
The chief appraiser [noted that] he has obtained the Nueces CAD Sales/Market Appraisal Analysis procedures document. He [indicated that] he will prepare a similar document for use in the Jasper CAD. Jasper CAD does have manual procedures for gathering and analyzing sales. Appraisal district staff routinely mails sales surveys to both grantors and grantees for all recorded deed transactions. Copies of surveys are maintained in binders sorted by school district and property categories. When confirmed responses are received, the completed survey replaces the copy. The sales information is used to test CAD appraisal schedules. The information is made available to the Comptroller's Property Tax Division.
According to the chief appraiser, sales letters are mailed to each grantor and grantee when a deed is filed in Jasper County. The deed clerk estimates 50 to 75 letters are mailed each week. According to the chief appraiser, the CAD gets about a 15 to 20 percent response. The chief appraiser indicated that the CAD recently applied for membership to the Jasper Area Board of Realtors multiple listing service (MLS), and in July 2006 noted the membership was approved.
Based on interviews with staff, in practice the CAD handles sales by first filing sales letters and other sale information in binders or manila folders by school district. Sales are sorted by property category code within each binder or folder. The chief appraiser reviews the sales annually to test schedules. According to the appraisal manager, individual CAD
appraisal staff also use the sale files during the appeals process to help support their appraised values.
In 2004 and 2005, the CAD did not keep sales data electronically or in a summary format easily comparable with existing computerized property appraisal records. The computerized appraisal system upgrade purchased in 2005 allows for sales information to be entered in a property's appraisal record. The chief appraiser said the CAD plans to use this feature in 2006.
IAAO's publication, Property Appraisal and Assessment Administration, Chapter 13:
"Quality control is essential in data collection."
Without common guidelines for determining how to verify, confirm and adjust sales, the CAD risks using sales for appraisal maintenance that do not accurately reflect current market value. Confirmation and validation of sales is critical in determining local market values, especially for single-family residences. Jasper ISD received an invalid finding in the 2004 PVS, primarily because the single-family residential category tested with a weighted mean ratio of 0.8665. While the other four Jasper CAD school districts received valid findings, three of the four also tested low in the single-family residential category, with weighted mean ratios ranging from 0.8870 to 0.9173. If any Jasper CAD school district receives two consecutive PVS invalid findings, it could lose funds in the school funding formula.
Chapter 5 in the IAAO publication, Property Appraisal and Assessment Administration, discusses the importance of gathering and analyzing sales data:
"Sales data are needed for specifying and calibrating valuation models and for sales ratio studies. The reliability of any valuation model or sales ratio study depends on the quantity and quality of its data. Sales data must be collected, edited and adjusted to obtain valid indicators of market value. Ratio studies also require data on appraised (or assessed) values. Data on property characteristics are needed for stratification and the preparation of sales reports."
Written guidelines help appraisers in selecting and adjusting sales for assigning values and as evidence before the appraisal review board. Knowing what analysis needs to be done, when to perform the analysis and how to perform it is key to maintaining continuity and a high level of appraisal accuracy. By providing comprehensive, written guidance to appraisal staff, Jasper CAD can help assure that sales data are applied consistently as valid indicators in achieving market value, particularly for single-family residential.
For example, Nueces CAD has a well-written market analysis procedures manual that describes the processes used to obtain sales information and the procedures necessary for sales confirmation. Written procedures assure the market analyses are done consistently, regardless of personnel changes.
RECOMMENDATION 5
Establish written procedures aligned with industry-accepted standards for gathering and analyzing sales data.
FINDING
Jasper CAD lacks a written plan and timeline for completing the computerized mapping of the county.
In 1993, the CAD began converting paper maps to computerized maps as part of a geographic information system (GIS). The CAD's GIS technician enters metes and bounds of property taken from recorded deeds and plats. Each parcel is given a unique identifying number. Parcels can be displayed electronically as a single parcel or as part of a larger group of parcels, such as a subdivision or neighborhood. The GIS system shows parcels with relation to streets, roads, rivers, streams and other topographical areas that can influence property values. The system also identifies taxing entity boundary lines. The CAD's aerial maps are integrated into the GIS, allowing all of the same data to be displayed on aerial maps.
The CAD does not have a written plan or timeline for completing this project. In the 2004-2005 Appraisal District Operations Survey, Jasper CAD reported that about 75 percent of the county has been mapped electronically. In July 2006, the chief appraiser opined that much of the unmapped area is exempt property such as highways, federal and state forests and lake properties. The CAD's GIS technician included that there are some areas within each school district that have not been mapped due to lack of information. The chief appraiser indicated in July 2006 that some of the missing information was deeds, surveys or field notes. In some cases, property owners never filed a deed and some deeds are missing valid legal descriptions and/or field notes. Field notes describe property in terms of metes and bounds - components necessary for mapping.
In July 2006, the chief appraiser noted that the GIS has not been in a timeline or project mode for several years now. The chief appraiser considers the GIS implementation complete, and the CAD has been in a maintenance mode since, meaning mapping new parcels and splits and cleaning up the problem areas as research provides new information. No documentation was provided in support of complete GIS implementation.
The technician noted she has minimal formal training in using the mapping software and relies heavily on assistance from a former CAD mapper who troubleshoots on an hourly basis. In July 2006, the chief appraiser noted that Jasper CAD uses the former employee as its GIS consultant and manager. The chief appraiser said the former employee has provided much in-house training and has developed many new applications for the CAD. No documentation was provided about the former employee's work product for the CAD. The GIS technician concentrates on mapping new parcels, splits and combinations.
According to the chief appraiser and office manager, the CAD was unsuccessful in getting a workable list of 9-1-1 addresses from the Deep East Texas Council of Governments due to formatting incompatibilities. The 9-1-1 address is a property's legal situs address for the provision of emergency services. Having this information included in both the appraisal and mapping systems would greatly enhance the efficiency of locating property when legal descriptions are missing or erroneous. If the data is available, the GIS system can locate parcels by situs address.
Without a fully functioning computerized mapping system, the CAD staff does not have the capability to fully capture and verify available sales information for more accurate property valuations. Jasper ISD's invalid findings in the 2004 PVS were caused mainly by inaccuracies in Category A, single family residential, of which sales verification is a key factor. In July 2006, the chief appraiser clarified that a fully functioning automated sales gathering system for the computerized mapping system was needed.
IAAO's Standard on Digital Cadastral Maps and Parcel Identifiers, Section 3.8, states that basic information contained on maps should include parcel boundaries and dimensions, block and lot numbers, jurisdictional boundaries, names and boundaries of subdivisions, location and names of streets, railroads, rivers, and parcel identifiers. Comptroller Rule 9.3002 states that all information required on paper tax maps may be maintained in electronic format.
Successful completion of this project is dependent upon staff being properly trained on the mapping software. Fully functional computerized maps allow the CAD to respond quickly to map requests by the public. Computerized maps provide both the appraiser and appraisal review board members access to more comprehensive information visually, promoting timely and more efficient reappraisal work. In July 2006, the chief appraiser agreed that continued emphasis on the GIS is dependent upon staff being sufficiently trained on the mapping software.
Many appraisal districts experience improved accuracy and efficiency in responding to public property map requests and in verifying sales data by maintaining a fully computerized mapping system.
RECOMMENDATION 6
Develop and implement a plan and timeline for completing the computerized mapping of the county and train staff to use the software properly.