Chapter 1
Findings of the Property Value Study and Summary
Overview of Property Value Study
The annual PVS estimates the total taxable property value in each school district in Jeff Davis CAD. With a few notable exceptions, the law requires all CADs and PTD to appraise property at market value. Market value, in essence, is the price a willing buyer would pay a willing seller for the property under normal conditions. Agricultural land and timberland, however, are appraised according to the productivity value of the land's category.
The CAD determines the local appraisal roll value and certifies it to each school district; these values become the districts' tax roll values. Each school district must submit an annual self-report of its property values to PTD, which audits the reports for accuracy.
PTD's estimate of the total taxable value in a school district, called the state value, is made by estimating market value or by accepting the local appraised value in each property category and then adding these category values for an overall school district value. PTD then deducts the school district's self-reported, state-mandated homestead exemptions, disabled veterans exemptions, value limitations, reinvestment zones, freeport exemptions, the loss between market value and productivity value of qualified agricultural lands, the school tax ceiling for homeowners over age 65 or with a disability and other state-mandated exemptions.
PTD issues a preliminary and a final PVS each year. School districts and CADs may protest the findings of the preliminary PVS through an administrative hearings process. This process requires the protester to file a written protest with supporting documentation within 40 days of the issuance of the preliminary PVS. PTD may amend the findings of the preliminary PVS based on the submission of a written protest, a conference between PTD and CAD representatives or a formal hearing. A hearings examiner appointed by the Comptroller's general counsel holds the formal hearing; this person is not a PTD employee. A school district that disagrees with the hearing examiner's final decision may appeal it to Travis County district court.
When conducting the property value study, PTD assigns properties to various categories, such as residential, commercial and rural property, so like properties can be studied together.
In general, a ratio indicates the percentage of market value, as determined by PTD, at which a CAD appraises a property or group of properties. A ratio of 1.0 indicates appraisal at market value-the legal standard. Generally, appraisals with ratios that are close to the standard, for instance between 0.95 and 1.05, are considered reasonably accurate for a property group.
Eligible School District
Fort Davis ISD was identified as an eligible school district when its local value fell outside of the confidence interval limit determined by the 2006 PVS. Five property categories were tested in Fort Davis ISD: Category A, Single-Family Residential; Category C, Vacant Lots; Category D, Rural Real; Category F1, Commercial Real and Category J, Utilities.
Category A, Single-Family Residential, accounted for 23 percent of the total test values and made up 46 percent of the school district's value. A review of Category A sample ratios in the 2006 PVS indicated that the CAD appraised from a low of 67 percent to a high of 141 percent of market value, and tested with a weighted mean ratio of 0.9257.
Category C, Vacant Lots, which contained 8 percent of the school district's value, tested with a weighted mean ratio of 0.9432. The CAD valued sample Vacant Lot parcels from as low as 46 percent to a high of 240 percent of market value.
Category D, Rural Real, made up 8 percent of the school district's value and tested with a weighted mean ratio of 0.9860. 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, primarily includes rural homes and land that does not qualify as farm, ranch or timber land. The differences in value between Qualified and Non-Qualified rural land are wide since D1 land is appraised using a special statutory method to determine its productivity value, while D2 is based on what the land would sell for in an open-market transaction.
Subcategory D1 comprised 37 percent of Category D's value and 9 percent of total test values. D1 tested with a category ratio of 0.9760. Subcategory D2 made up 63 percent of Category D's value and 16 percent of the school district's total test values. D2 appraisals ranged from a low of 90 percent to a high of 101 percent of market value, with a weighted mean ratio of 1.0034.
Category F1, Commercial Real, which made up 8 percent of the school district's value, tested with a weighted mean ratio of 0.9484. The CAD valued sample Commercial Real properties from a low of 78 percent to a high of 105 percent of market value.
Category J, Utilities, with 6 percent of the school district's value, tested with a weighted mean ratio of 0.9894. The CAD's external appraiser valued Utilities properties from as low as 97 percent to a high of 105 percent of market value.
While these figures show the range of property ratios in Jeff Davis CAD, a clearer measure of appraisal performance includes how many of these ratios were within 10 and 25 percent of the median ratio. (The median ratio is the ratio in the middle of all the other ratios when sorted by size.)
These figures, in conjunction with the coefficients of dispersion (CODs) described below, measure the consistency of an appraisal district's property appraisals at the same percentage of market value, without regard to value. A low COD combined with high percentages indicates equitable appraisals; a high COD paired with low percentages indicates inequitable appraisals.
The median ratio for single-family residences (A) in Fort Davis ISD was 95 percent, with 77 percent of the ratios within 10 percent of the median and 91 percent within 25 percent of the median.
The median ratio for vacant land parcels (C) in Fort Davis ISD was 99 percent, with 31 percent of the ratios within 10 percent of the median and 31 percent within 25 percent of the median.
The median ratio for non-qualified acres and farm and ranch improvements (D2) in Fort Davis ISD was 99 percent, with 100 percent of the ratios within 10 percent of the median.
The median ratio for commercial real property (F1) in Fort Davis ISD was 95 percent, with 89 percent of the ratios within 10 percent of the median and 100 percent within 25 percent of the median.
The median ratio for utility property (J) in Fort Davis ISD was 102 percent, with 100 percent of the ratios within 10 percent of the median.
Other School District
Valentine ISD's local value fell within its confidence interval limit on the 2006 PVS. Five property categories were tested in Valentine ISD: Category A, Single-Family Residential; Category C, Vacant Lots; Category D, Rural Real; and Category J, Utilities. All categories tested were within a ratio range of 95 percent to 105 percent of the legal standard and thus are considered reasonably accurate appraisals.
Jeff Davis CAD Summary
In summary, the Jeff Davis CAD's overall median ratio is 0.98.
in Category A, Single-Family Residential, sample ratios range from 0.42 to 1.47, with a median ratio of 0.96;
in Category C, Vacant Lots, the sample ratios range from 0.27 to 2.40, with a median ratio of 0.99;
in Subcategory D2, Non-Qualified Acres and Rural Improvements, the sample ratios range from 0.19 to 1.66, with a median ratio of 0.99;
in Category F1, Commercial Real, the sample ratios range from 0.32 to 1.82, with a median ratio of 0.95; and
in Category J, Utilities, the sample ratios range from 0.97 to 1.08, with a median ratio of 1.00.
Coefficient of Dispersion
The COD, the primary measure of appraisal uniformity, measures the average percentage by which individual ratios vary from the median ratio. According to IAAO's Property Appraisal and Assessment Administration, a low COD indicates that appraisals within a category of property are uniform, while a high COD indicates properties are being appraised at inconsistent percentages of market value. A COD that is very low, however, may indicate "sales chasing," a form of unequal appraisal.
According to IAAO's 1999 Standard on Ratio Studies, CODs for Category A, Single-Family Residential, should generally be 15 or less, and 10 or less for new and fairly homogeneous areas. For Category C, Vacant Lots, and for income-producing properties, the COD should be 20 or less. For other real property and personal property, CODs should reflect the nature of the property, market conditions and the availability of reliable market indicators.
The 2006 COD for Jeff Davis CAD Category A parcels was 6.94; for Category C, 25.17; for Subcategory D2, 2.04; for Category F1, 3.65; and for Category J, 2.43.
The 2006 COD for Fort Davis ISD Category A parcels was 7.91; for Category C, 46.16; for Subcategory D2, 2.49; and for Category F1, 3.70.
The 2006 COD for Valentine ISD Category A parcels was 5.33; for Category C, 15.44; and for Subcategory D2, 1.43.
In all, the COD data indicates uniformity of appraisal in the CAD and ISDs with the exception of Category C, Vacant Lots, in Fort Davis ISD and overall in Jeff Davis CAD.