Chapter 1
Overview of County Appraisal District1.1
County History and DemographicsAccording to the Handbook of Texas Jefferson County was formed in 1836, organized in 1837, and was one of the original counties in the Republic of Texas. It was named for the municipality that preceded it, which was in turn named for Thomas Jefferson. The county boundaries, as delineated on December 21, 1837, included all of the future Orange County, a part of what later became Hardin County, and the extreme eastern part of the future Chambers County. The first county seat, Jefferson, or Old Jefferson, on the east bank of Cow Bayou, was replaced by Beaumont in 1838 and had disappeared by 1845.
Jefferson County, on Interstate Highway 10 in the Coastal Plain or Gulf Prairie region of extreme southeastern Texas, is bounded by Orange County on the northeast, by Hardin County on the north, by Liberty and Chambers counties on the west, and by the Gulf of Mexico on the south. Deepwater transportation and petrochemical industries are among the county's economic mainstays. Beef cattle and rice yield major farm income, and the majority of wage earners are employed in the petrochemical, shipbuilding, and rubber industries.
The population of the county for 2003, according to the County Information Project, was 248,605 residents, with the City of Beaumont having 112,434 residents, the City of Port Arthur having 57,004 residents, the City of Nederland having 16,928 residents, the City of Port Neches having 13,269 residents and the City of Groves having 15,333 residents. The balance of the county population lives in smaller cities and towns and the rural areas. The county comprises 937 square miles, mainly of grassy plains, though a dense forest belt crosses the northwest part.
According to the County Information Project, the median per capita income is $26,096, and 17 percent of the population lives at or below the poverty level.
Beaumont became the county seat in 1838.
The county includes the Beaumont Independent School District, Port Arthur Independent School District, Port Neches-Groves Independent School District, Hamshire-Fannett Independent School District, Nederland Independent School District, Sabine Pass Independent School District and a portion of the Hardin-Jefferson Independent School District.
1.2
Appraisal District Organization and StaffingThe appraisal district was formed in 1980 and became active in 1982. The district has a Board of Directors consisting of five members and an appraisal review board with seven members. The Board of Directors hires the chief appraiser as the chief operating officer for the district. Jefferson CAD has a total of 42 full-time staff with 10 supervisory positions and four part time positions. Fourteen positions are full-time appraisers. The appraisal district Board of Directors hires the chief appraiser, sets the budget and appoints the appraisal review board members.
Exhibit 1 outlines the district organization.
Exhibit 1
Jefferson County Appraisal District Organization
Board of Directors Miriam Johnson, Chair Eugene Landry Charles Lankford Fred Mitchell C. L. Sherman
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.
Appraisal district staff appraises residential, commercial and personal property. The appraisal district contracts with Capital Appraisal Group (CAG) for professional appraisal services of appraising 6,800 parcels of mineral, utility, commercial and industrial property. The appraisal district is responsible for appraising 127,834 parcels of real, mineral and personal properties located within the boundaries of the district. This includes 4,198 mineral property accounts, 13,776 parcels of business personal property and 241 parcels of individual personal property.
The district provides appraisal services for 25 taxing units, Jefferson County, Nederland Independent School District, Port Arthur Independent School District, Port Neches-Groves Independent School District, Hamshire-Fannett Independent School District, Beaumont Independent School District, Sabine Pass Independent School District, City of Beaumont, City of Groves, City of Nederland, City of Port Arthur, City of Port Neches, Northwest Forest Mud, Jefferson County Drainage District #3, Jefferson County Drainage District #6, Jefferson County Drainage District #7, Port of Beaumont Authority, Port of Port Arthur Authority, Jefferson County Navigation District, Sabine Pass Port Authority, Jefferson County Water Conservation Improvement District#10, Cardinal Meadows Water Conservation Improvement District, Trinity Bay Conservation District, Jefferson County Emergency Services District #1 and Jefferson County Emergency Services District #2.
Exhibit 2 presents the types of properties appraised by Jefferson CAD in tax year 2003. In-house staff handles all property categories except Category G (minerals), Category J (utilities), and part of Category F2/L2 (industrial - real/personal), which is appraised by Capital Appraisal Group (CAG).
Exhibit 2
Jefferson CAD Property by Category Summary with Assigned Responsibility
Tax Year 2003
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 Contracted Appraisal Firm Category J Utilities Contracted Appraisal Firm/In-house staff Category F2 Industrial Real In-house & Contracted Appraisal Firm Category L2 Industrial Personal Contracted Appraisal Firm Source: Jefferson County Appraisal District, October 2004. 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 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 below.
PTD estimated that Jefferson CAD staff are responsible for appraising about 129,914 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 Jefferson are Smith, Bell and Nueces. The number of parcels per staff member for Jefferson CAD was 3,093. Smith CAD was 3,398, Bell CAD was 2,605 and Nueces was 2,139. 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.
Exhibit 3
Reported Data On Parcels, Categories Staffing, Training And Operations
Comparison to State and Group Averages
General Information Jefferson State Avg. Group Avg. Parcel Size Group
(by number of locally appraised parcels)75,000 - 149,999 Estimated # Locally Appraised Parcels 129,914 55,463 105,380 # Taxing Units 25 15 23 Locally Appraised Parcels to Staff 3,093 3,404 2,980 2003 Composition by Percentage of Value (Self Report): Residential Value 32.6% 52.6% 52.2% Non-Residential, Non Mineral 66.2% 43.6% 45.0% Non-Residential, Mineral 1.3% 3.7% 2.8% 2003 Composition by Account Category Type (Operations Survey): Real Property 128,046 45,804 88,673 Mineral Property 3,886 13,536 18,638 Business Personal Property 13,704 4,689 7,462 Individual Personal Property 0 1,342 2,501 Total Accounts 145,636 65,372 117,274 2003 Composition by Locally Appraised Parcel Category (Estimated from Self Report): Parcel Type # Parcels % of Parcels A 77,997 60.0% 44.1% 47.0% B 2,513 1.9% 1.0% 1.1% C 23,129 17.8% 13.1% 17.6% D 5,803 4.5% 24.7% 16.3% E 1,291 1.0% 4.5% 3.9% F1 5,749 4.4% 3.1% 3.5% L1 10,995 8.5% 5.7% 6.1% M1 1,828 1.4% 2.2% 2.7% O 426 0.3% 1.4% 1.7% S 183 0.1% 0.1% 0.1% Total 129,914 100.0% 100.0% 100.0% Financial and Staffing
Information (Operations Survey)Jefferson State Avg. Group Avg. 2003 Budget $4,012,814 $1,079,695 $2,340,418 2003 Surplus $765,751 $71,620 $116,479 2003 Surplus as % of Budget 10.0% 6.6% 5.0% 2004 Budget $3,944,660 $1,104,961 $2,398,762 % Change in Budget -1.7% $0 2.5% 2004 Budget per Total Parcel $30.36 $17.41 $20.79 Staffing Full Time 42 18 39 Part Time 3 2 2 Supervisory 10 3 7 Programmers 2 2 2 Supervisory to Staff Ratio 1:4 1:5 1:6 Chief Appraiser Performs Appraisals? No 2004 Total Compensation $105,313 $53,564 $82,056 Appraisers Full - Time 14 8 13 Part - Time * 0 2 Salary Range: Low $33,035 $24,504 $24,534 High $55,354 $37,521 $51,026 Training Budget $30,695 $8,832 $15,546 # Registered with BTPE (1) 19 9 17 Types of BTPE Certification: RPA (2) RTA (3) RTC (4) All 18 3 0 0 Operations Information
(Operations Survey)Jefferson State Avg. Group Avg. Reappraisal Last Year of Reappraisal 2003 Next Year of Reappraisal 2005 Type of Appraisal: Complete Method of Appraisal: Combination Protests 10,208 3,131 4,601 Protests per Parcel 7.0% 4.7% 4.0% Consolidated Collection No Collection Budget $0 Geographic Information System (GIS)? Yes Percent GIS Complete 89% 80% 89% Board of Directors Members 5 6 6 Tax Assessor Votes? No Elected Members 2 3 2 Note: An asterisk (*) is shown where data was not reported.
Source: Jefferson CAD 2003 Self Report 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.
1.3
Self Evaluation QuestionnaireIn preparation for the Appraisal Standards Review, Jefferson 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 questionnaire 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.
Jefferson County answered all 110 questions. Some of the answers had additional comments to explain how the district carries out each of the processes asked about in the questionnaire.
The IAAO self assessment questionnaire was provided with the IAAO self assessment guide. 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 the district 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.
Chapter 1: Setting, Legal Framework, Value Standard and Assessment Cycle.
The district's answers in this chapter indicated to the reviewer that the district understands the Legal Framework, Value Standard and Assessment Cycles required of the appraisal district according to the answers to the questions on how the office keeps current with legislative proposal, laws, and court decisions and what measures in the law support a current market standard were good indicators that the district understands, keeps up with and follows the laws and standards on assessments in Texas.
Chapter 2: Resources and Management
The district's answers to Chapter 2 are brief, however, they do indicate that the district is satisfied with the budget process, personnel training, management, organization, training and current skill level of the staff.
Chapter 3: Computerization
The answers to Chapter 3 are more detailed and indicate an intimate knowledge of the computer system used by the district. The answers also indicate that the staff and management are aware of the requirements of the type and kind of records that the district needs to keep and also the length of time needed to retain the records. They answers also reflect the fact that the district has a Geographic Information System and workflow procedures along with document images.
Chapter 4: Mapping
The answers to Chapter 4 show that the district has a mapping system with the necessary tools and information to meet the standards of assessment. The answers indicate the district knows how the system works and has integrated it with the other systems to have a good working system.
Chapter 5: Data Collection
The answers in Chapter 5 show that the district knows what data is required by Comptroller Rules, State Law, and appraisal standards. They state that they collect and use the data in the assessment process.
Chapter 6: Land Evaluation
Chapter 6 answers show that the district does understand the requirements of situs, size, location, shape, density, unit measurements, zoning, and adjustments for negative influences. These are all required either by Appraisal Standards or by State Law or Comptroller Rule.
Chapter 7: Residential Property Valuation
The answers in chapter 7 show that the districts understands the three approaches to value and the data requirements to achieve an effective appraisal program for residential property. The answers indicate that the district follows the Uniform Standards of Professional Appraisal Practice.
Chapter 8: Commercial Property Valuation
Answers to Chapter 8 questions reflect that the district believes it follows the accepted standards and the published requirements of data collection and appraisal reflected in Texas Statutes, Appraisal Standards and Comptroller Rules.
Chapter 9: Sales Data, Ratio Studies, and Stratification
The answers to Chapter 9 indicate the district believes it follows the accepted procedures for gathering sales data, doing ratio studies using stratification.
Chapter 10: Personal Property Assessment
The answers in Chapter 10 indicate the district believes it follows the accepted procedures for discovery, and appraisal of personal property. They follow the accepted procedures according to the answers in the assessment.
Chapter 11: Assessment Administration
The district elaborated on most of the answers in this chapter and they indicate that the district believes it is following the accepted practices of assessment administration in the Comptroller Rules and the International Association of Assessing Officers standards.
Chapter 12: Defense of Values
The district's answers on Chapter 12, defense of values, indicate that the district believes it follows the accepted standards of the Comptroller, and International Association of Assessing Officers Standards.
Chapter 13: Public Relations
The answers in Chapter 13 indicate that the district believes it has an effective public relations program.
1.4
Findings of the Property Value Study and Summary WorksheetsThe Property Value Study (PVS) determines the total property value in each school district in Texas. 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 are not 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, productivity 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.
Jefferson CAD protested the preliminary findings for Hamshire-Fannett ISD. Staff agreed with some of the district's proposed changes, but not all. The district did not request a formal hearing and the results of the informal appeal recommendation became final in June 2004 (see Appendix 14).
A review of the school districts in the county indicates that Jefferson County Appraisal District typically appraises single-family residences just below the market value determined by the Property Tax Division (PTD). In the 2003 Property Value Study (PVS) Hamshire-Fannett Independent School District's values fell outside the study's statistical margin of error. Single Family Residences (Category A) appears to be the primary reason that the school's values are not within the acceptable range determined by the study.
There are four property categories tested in Hamshire-Fannett; (1) category A, Single-Family Residences, making up 37.1 percent of the districts value with a weighted mean ratio of 0.8822, (2) category D, Rural Real, making up 13.4 percent of the districts value with a weighted mean ratio of 0.8810, and (3) category G, Minerals, making up 12.3 percent of the districts value with a weighted mean ratio of 0.9843, and (4) category J, Utilities, making up 13.3 percent of the districts value with a weighted mean ratio of 1.0013. In general, a ratio of between 0.95 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.
Hamshire-Fannett's category A, Single-Family Residences, makes up 61 percent of the tested value and received a weighted mean ratio of 0.8822. Because this category contains almost 50 percent of the total property value in this district, the low ratio in the A category dropped the district outside the margin of error and caused the school district to be identified as eligible.
Although the Rural land and improvement values (Category D) are also appraised below market value, it is not 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. Hamshire-Fannett's subcategory D1 makes up 18.6 percent of category D's value and 4 percent of the tested value. D1 received a weighted mean ratio of 0.8337. Subcategory D2, however, makes up 81.4 percent of category D's value and 18 percent of the school district's total tested value. D2 received a weighted mean ratio of 0.8925. This indicates that the residences in the rural areas are also being under appraised.
A review of all the school districts in Jefferson County shows that there are inconsistencies mainly with the category A, Single Family Residence, property values. The appraisal district is placing a value on the category A, Single Family Residence, properties below their adjusted selling price (market value) in five of the six districts in the county. Only in Port Arthur ISD was category A, Single Family Residence, property being appraised at or near market value.
Besides Hamshire-Fannett ISD, the other school districts in the county are Nederland ISD, Port Arthur ISD, Port Neches-Groves ISD, Beaumont ISD, and Sabine Pass ISD.
Nederland school district's category A, Single Family Residence, properties makes up 80 percent of all of the school district's value that the PTD tested and 55 percent of the total value in the school district. The school district's weighted mean ratio for its single-family residence properties was .9531, just barely above the 0.95 threshold that compliments the study's 5 percent margin of error.
While Port Arthur ISD's category A tested within the margin of error limits, the single-family residences make up 62 percent of the total tested value in the school district and received a ratio of 1.0127, and is 19 percent of the school district's total value.
Port Neches-Groves ISD's category A makes up 95 percent of the total tested value in the school district. The single-family residences have a weighted mean ratio of .9597 and makes up 24 percent of the school districts value. Again, the ratio is just barely above the 0.95 threshold that compliments the study's 5 percent margin of error.
