Appraisal Standards Review
Kaufman County Appraisal District Follow-Up Report
August 2007
Introduction
In July 2004, the Comptroller’s Property Tax Division (PTD) identified Kaufman Independent School District (ISD), Crandall ISD, Kemp ISD and Terrell ISD, all located in Kaufman County, as four of 54 school districts in the state meeting the criteria that initiate an appraisal standards review (ASR) of the county appraisal districts (CADs) that served them.
In September 2005, PTD released results of its ASR of the Kaufman County Appraisal District (CAD). ASRs are intended to determine why the Comptroller’s Property Value Study (PVS) found local values invalid and recommend changes in operations and management to improve appraisal practices. The Kaufman CAD’s review evaluated five functional areas: the board of directors; appraisal district policies, procedures and operations; information processing systems; staffing, personnel qualifications and positions; and generally accepted appraisal practices.
At the time of the review, challenges facing Kaufman CAD included improving appraisal methods and practices and updating CAD policies and job descriptions.
Texas Property Tax Code Section 5.102(d) requires that if the appraisal district fails to comply with the recommendations in the report and the Comptroller finds that the board of directors of the appraisal district failed to take remedial action before the first anniversary of the date the report was issued, the Comptroller must notify the judge of each district court in the county for which the appraisal district is established. The judge(s) must appoint a five-member board of conservators to implement the recommendations. The board of conservators exercises supervision and control over the operations of the appraisal district until the Comptroller determines, under Government Code Section 403.302, that the taxable value of each school district for which the appraisal district appraises property is the local value for the school district. The appraisal district bears the costs related to the supervision and control of the appraisal district by the board of conservators.
For the one-year follow-up report, an appraisal district complies with statute if it takes remedial action to implement the recommendations in the ASR. Remedial action means the CAD has corrected, or intends to correct, remedy or improve the deficiencies identified in the ASR. The CAD demonstrates remedial action by having implemented or nearly completed most of the recommendations by the first-year anniversary of the report. The Comptroller recognizes that, for a CAD with limited resources, some ASR recommendations will take more than a year to implement. As long as the CAD is working to implement the recommendations, the Comptroller continues to work with the CAD to achieve full compliance. CADs that have completed all recommendations by the one-year anniversary will not require further monitoring.
In September 2006, PTD returned to Kaufman CAD to assess the implementation of the ASR recommendations and found that all six recommendations have been substantially completed. PTD sent surveys to the CAD’s board members soliciting their views and comments on the ASR process. None of the board members responded.
PTD believes that Kaufman CAD’s efforts to date meet the state’s legal requirements for all six recommendations, and no further action is necessary. This report outlines the specific recommendations the CAD has implemented.
History
Kaufman CAD became the subject of an ASR because the PVS found the local values for Kaufman ISD, Kemp ISD, Crandall ISD and Terrell ISD invalid. The school districts were eligible for a “grace period” provided in Government Code Section 403.3011.
Inconsistent appraisal of Single-Family Residential parcels is the primary reason the school districts’ local values were not within the confidence interval limit determined by the 2003 PVS. The 2003 PVS found that Kaufman CAD inconsistently appraised Single-Family Residential, Non-Qualified Acres and Rural Improvements and Commercial Real parcels. Furthermore, the local productivity values for Qualified Acres, or open-space land that qualifies for agricultural appraisal, were consistently higher than productivity values calculated by PTD.
Kaufman, Crandall, Terrell, and Kemp ISDs appealed the findings of the 2003 preliminary PVS. Despite all four CADs receiving some or all of their requested appeal changes, the 2003 final PVS taxable values were invalid. Since the school districts were eligible for the grace period, the local values were certified.
Kaufman CAD’s reappraisal efforts in 2004 and 2005 produced valid taxable values, and the local values for all six school districts were certified on the final PVS in both years. The 2006 preliminary PVS found the taxable values of Forney, Kaufman, Kemp and Terrell ISDs to be invalid, but local values were certified because they were eligible for the grace period. The preliminary PVS findings were reversed after the ISDs’ successfully appealed them.
What Remains to Be Done
The Appendix lists the six recommendations identified in the ASR, with a summary of the actions taken to date. The Comptroller acknowledges the work that Kaufman CAD performed over the last year. Kaufman CAD has improved its appraisal methods and practices and has updated its policies and job descriptions. It has substantially completed all six recommendations. No further action is required.
Appendix
Kaufman County Appraisal District Appraisal Standards Review Implementation Status
2.1 Board of Directors
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 1 | Expand the detail of the budget to include the benefits proposed for each position as required by Tax Code Section 6.06(a). |
Complete |
|
On June 22, 2006, the board of directors approved the 2007 budget. The 2007 budget included a section entitled “salaries,” which listed each CAD position. Under each position title was a listing of the 2007 salary amount as well as the benefits and associated costs of each benefit for that position. These are the benefits listed for each position:
The salaries section concluded with a summary of total dollar amounts for all salaries and listed benefits. For the 2008 budget, the chief appraiser plans to change the display of the salaries section and show the 2007 benefit amounts per position compared with the proposed 2008 amounts. |
| 2 |
Ensure that new members of the Appraisal Review Board complete the state-mandated training prior to the 2006 board hearings. |
Complete |
The CAD registered seven new appraisal review board (ARB) members for the 2006 training seminar in Waco. On March 9, 2006, all seven members attended and completed the training class. Subsequently, one of the seven members declined the position, and another resigned for health reasons. Therefore, the CAD had two late replacements to the ARB who were not appointed in time to attend the training class. The CAD will register these two new members for the 2007 training class. The chief appraiser submitted class certificates confirming attendance of the seven board members. According to Tax Code Section 5.041(e), an appraisal review board member appointed after a course offering may continue to serve until the completion of the next course offering. |
2.2 Appraisal District Policies, Procedures and Operations
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 3 |
Develop and implement a timeline for reviewing and updating all district policy and procedures manuals. |
Complete |
The current chief appraiser was hired in January 2005. Since his hiring, the chief appraiser has developed a two-year schedule to have all procedure manuals reviewed or rewritten. Some manuals have been updated, and other updates remain in progress. The updated manuals were provided as documentation for this review. The following timeline lists the updated manuals and expected completion dates for those in progress:
According to the chief appraiser, all manuals are maintained electronically on the CAD’s hard drive in a shared folder. |
2.3 Information Processing Systems
The report had no recommendations in this section.
2.4 Staffing, Personnel Qualifications and Positions
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 4 |
Develop a plan and timeline for reviewing job descriptions and adopt an annual personnel performance evaluation system to use in evaluating all district staff. |
Complete |
Between September 2005 and May 2006, the chief appraiser updated all staff job descriptions. Each job description is divided into the following sections:
The chief appraiser has made progress in updating employee job descriptions. In December 2005, performance evaluations were conducted for all CAD staff. The evaluation instrument is divided into the following sections:
The chief appraiser has made progress in developing an employee evaluation instrument. The key job responsibilities section of the document lists the top three to five job responsibilities for each position. The chief appraiser has developed a personnel supervision policy for the CAD’s personnel policy manual. This policy states that the department manager is responsible for maintaining a uniform plan for evaluation and compensation of staff based on their duties and responsibilities. According to the chief appraiser, an annual evaluation will be performed for all staff. |
2.5 Generally Accepted Appraisal Practices; Equality and Uniformity of Appraisal Standards
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 5 |
Conduct more in-depth analyses of ratio studies to eliminate unequal levels of appraisal within categories of property and to ensure all categories of property are being appraised at current market value. |
Complete |
|
In 2004, the CAD purchased new appraisal software that allows it to conduct more in-depth ratio study analysis. The chief appraiser indicated that in conducting ratio studies, the CAD evaluates property characteristics and can perform ratio studies by size, property classification, value ranges and sold-versus-unsold parcels if needed. The chief appraiser also evaluates property data on Excel spreadsheets and conducts a more-detailed analysis when needed. In addition, the information systems manager troubleshoots problems with the data prior to mailing notices. The CAD runs ratio studies and makes market adjustments from March 1 through April 15. The chief appraiser indicated that the CAD monitors sale prices on parcels sold during the year to assess market trends and establish reappraisal priorities. The Category A stratified ratios in the 2005 PVS indicate the CAD is now appraising all value ranges in a more consistent and equitable manner. Since being hired in January 2005, the chief appraiser has made the following changes to help ensure properties are being appraised at market value:
In October 2006, the chief appraiser used ratio studies to update the cost tables to reflect market value; the chief appraiser requires all appraisers to gather condition data and year built (when available) on older houses during the reappraisal process. Prior to 2005, property records did not contain condition data for older improvements and year-built information was limited. An appraisal model uses improvement age and condition to describe property characteristics, and ratio studies then test the model’s conclusions. |
| 6 |
Determine methods to obtain better income and expense information on land qualifying for productivity use. |
Complete |
The chief appraiser has taken steps to obtain accurate income and expense information for Qualified Land. First, the board recently appointed an agricultural advisory board at the chief appraiser’s request. The agricultural advisory board consists of nine members. One member is the Kaufman County extension agent and another member is the Farm Service Agency (FSA) director. The chief appraiser has stressed that the ag board will be relied upon to obtain more accurate income and expense information. The ag board conducted its first meeting in November 2006. In addition, the chief appraiser will include a survey questionnaire in associated ag mailings. The survey letter will solicit the following information:
Finally, the county agent and FSA manager serving on the CAD’s ag advisory committee furnished the chief appraiser with income and expense information for 2005 that was needed to develop the CAD’s 2007 production values. |