Overview of County Appraisal District
County History and Demographics
According to the Handbook of Texas, Kendall County was formed in 1862 from parts of Kerr and Blanco counties.
Kendall County is in south central Texas surrounded by Gillespie, Blanco, Comal, Bexar, Bandera, and Kerr counties. Kendall County was named for George Wilkin Kendall.
Livestock and livestock products accounted for 90 percent of its agricultural income. Mineral resources include dolomite and limestone.
The population of the county for 2003, according to the County Information Project, was 26,178 residents. The county comprises 663 square miles of usually flat to rolling to hilly terrain covered with tall grasses, live oak, juniper, and mesquite.
According to the County Information Project, the median per capita income is $50,859, and 8.5 percent of the population lives at or below the poverty level.
Boerne, the county's largest town and the county seat, is in the north central part of the county at the intersection of US highway 87 and Farm Road 474.
The county has two school districts, including Boerne Independent School District and Comfort Independent School District.
Appraisal District Organization and Staffing
The appraisal district was formed in 1981 and became active in 1982. Kendall CAD has a total of 15 full time staff with three supervisory positions. Six of the positions are real property appraisers and one position is a personal property appraiser. The district has no mineral parcels. The district contracts with Pritchard & Abbott, Inc. for professional appraisal services of utilities, business personal property and industrial accounts.
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.
The district provides appraisal services for six taxing units: Kendall County, Boerne Independent School District, Comfort Independent School District, City of Boerne, City of Fair Oaks Ranch, and Kendall County WCID #1.
Exhibit 2 presents the types of properties appraised by Kendall CAD in tax year 2003. In-house staff handles all property categories except Category J (utilities), and Category F2/L2 (industrial - real/personal), which is appraised by P&A.
Kendall CAD Property by Category Summary with Assigned Responsibility
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 In-house staff Category J Utilities Contracted Appraisal Firm Category F2 Industrial Real Contracted Appraisal Firm Category L2 Industrial Personal Contracted Appraisal Firm Source: Kendall County Appraisal District, April 2005.
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 self report and the independent school districts' self reports to calculate the parcels per appraisal district staff. PTD includes 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.
Reported Data On Parcels, Categories Staffing, Training And Operations
Comparison to State and Group Averages
General Information Kendall State Avg. Group Avg. Parcel Size Group (by number of locally appraised parcels) 25,000 - 34,999 Estimated # Locally Appraised Parcels 28,538 55,463 28,722 # Taxing Units 6 15 12 Locally Appraised Parcels to Staff 2,038 3,404 2,911 2003 Composition by Percentage
of Value (Self Report):
Kendall State Avg. Group Avg. Residential Value 57.6% 52.6% 36.9% Non-Residential, Non Mineral 42.4% 43.6% 56.1% Non-Residential, Mineral 0.0% 3.7% 7.0% 2003 Composition by Account Category Type (Operations Survey): Real Property 26,500 45,804 26,079 Mineral Property 0 13,536 12,215 Business Personal Property 1,944 4,689 1,588 Individual Personal Property 0 1,342 694 Total Accounts 28,444 65,372 40,576 2003 Composition by Locally Appraised Parcel Category (Estimated from Self Report): Kendall State Avg. Group Avg. Parcel Type # Parcels % of Parcels A 10,631 37.3% 44.1% 29.5% B 216 0.8% 1.0% 0.3% C 4,444 15.6% 13.1% 15.5% D 6,266 22.0% 24.7% 29.9% E 3,198 11.2% 4.5% 12.8% F1 851 3.0% 3.1% 3.0% L1 1,748 6.1% 5.7% 4.7% M1 573 2.0% 2.2% 3.3% O 523 1.8% 1.4% 1.0% S 88 0.3% 0.1% 0.1% Total 28,538 100.0% 100.0% 100.0%
PTD estimated that Kendall CAD staff is responsible for appraising about 28,538 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 Kendall are Dewitt, Houston, Marion, and Trinity. The number of parcels per staff member for Kendall CAD was 2,038. Dewitt CAD was 4,580, Houston CAD was 3,784, Marion CAD was 3,058, and Trinity was 4,644. 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 some comparison to other appraisal districts with similar parcel counts and the standards determined by IAAO.
Exhibit 3 includes reported data concerning 2003 Kendall CAD and state and group averages.
Reported Data On Parcels, Categories Staffing, Training And Operations
Comparison to State and Group Averages (continued)
Financial and Staffing
Information (Operations Survey)
Kendall State Avg. Group Avg. 2003 Budget $699,381 $1,079,695 $586,864 2003 Surplus $1,547 $71,620 $27,106 2003 Surplus as % of Budget 0.2% 6.6% 4.6% 2004 Budget $797,453 $1,104,961 $614,890 % Change in Budget 12.3% $0 4.8% 2004 Budget per Total Local Parcel $27.94 $19.92 $21.41 Staffing Full Time 14** 18 10 Part Time * 2 1 Supervisory 3 3 2 Programmers * 2 0 Supervisory to Staff Ratio 1:5 1:5 1:4 Chief Appraiser Performs Appraisals? Yes 2004 Total Compensation $54,023 $53,564 $54,871 Appraisers Full - Time 688 8 4 Part - Time * 0 1 Salary Range: Low $21,000 $24,504 $24,688 High $39,792 $37,521 $36,967 Training Budget $16,075 $8,832 $7,095 # Registered with BTPE (1) 10** 9 6 Types of BTPE Certification: RPA (2) RTA (3) RTC (4) All 2** 2 1 2 Operations Information
Kendall State Avg. Group Avg. Reappraisal Last Year of Reappraisal 2003 Next Year of Reappraisal 2004 Type of Appraisal: Complete Method of Appraisal: Combination Protests 3,448 3,131 927 Protests per Parcel 12.1% 4.7% 2.4% Consolidated Collection Yes Collection Budget $125,564 Geographic Information System (GIS)? Yes Percent GIS Complete 99% 80% 74% Board of Directors Members 7 6 6 Tax Assessor Votes?*** * Elected Members 1 3 2 Note: An asterisk (*) is shown where data was not reported.
Source: Kendall CAD and ISDs 2003 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 Tax Professional Examiners. (2) RPA - Registered Professional Appraiser. (3) RTA - Registered Tax Assessor-Collector. (4) RTC - Registered Texas Collector. **The chief appraiser noted that in 2005 the CAD had 15 full-time staff members, seven full-time appraisers, 11 staff registered with BTPE, and three staff members had their RPA. ***The chief appraiser noted that Kendall County contracts with the CAD for tax collections, so the county tax assessor-collector does not serve on the CAD's board.
Self Evaluation Questionnaire
In preparation for the ASR, Kendall 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 question 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.
Kendall County answered 110 out of 110 questions, mostly in the affirmative when appropriate and negative when appropriate. The district did elaborate in the areas where they felt an explanation was needed instead of responding with a yes or no answer. This made the overall assessment based on the district's responses much easier.
The answer to the questions helped the reviewer to evaluate the districts operations and supported the findings reported.
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 doing well and areas where it needs to improve. The responses to the questionnaire can be found in Appendix 15.
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.
Chapter 2: Resources and Management
The district's answers to Chapter 2 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 indicate a working 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 kinds of records that the district needs to keep and also the length of time they need to keep them. The answers also reflect the fact that the district has a geographic information system.
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 computer system in order to have a 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 also stated that they collect and use the data in the assessment process.
Chapter 6: Land Evaluation
Chapter 6 answers show that the district understands the requirements of situs, size, location, shape, density, unit measurements, zoning, and adjustments for negative influences. These are all required either by appraisal standards, state law, or Comptroller rule.
Chapter 7: Residential Property Valuation
The answers in Chapter 7 show that the district 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 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 follows the accepted procedures for gathering sales data, doing ratio studies, and using stratification.
Chapter 10: Personal Property Assessment
The answers in Chapter 10 indicate the district 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 indicated that it is following the accepted practices of assessment administration in Comptroller rules and IAAO standards.
Chapter 12: Defense of Values
Chapter 12 answers on defense of values follow the accepted standards of the Comptroller and the IAAO.
Chapter 13: Public Relations
The answers in chapter 13 indicate that the district believes it has an effective public relations program.
Findings of the Property Value Study and Summary Worksheets
The Property Value Study (PVS) determines the total property value in each school district in the Kendall County Appraisal District (CAD). 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 may not be related.
Local tax roll value, or local value, is determined by the CAD 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 loss between market value and productivity value 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 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.
Kendall CAD did appeal the findings of the preliminary study. Every tested category was appealed in both school districts.
A review of the school districts in the county indicates that Kendall CAD is consistently appraising the single-family residence properties and rural residences below market value as determined by the PTD. In the 2003 PVS, both Boerne (identified as eligible) and Comfort school districts fell outside the study's statistical margin of error. There are no other school districts in the county. Single-family residences (category A) and rural residences (subcategory D2) are the primary reasons that the school's values are not within the acceptable range determined by the study.
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.
Eligible School District
Boerne ISD was identified as an eligible district with value outside of the confidence interval limit. There are four property categories tested in Boerne Independent School District (ISD): (1) category A, Single-Family Residences, has 68.9 percent of the districts value with a weighted mean ratio of 0.9196, (2) category C, Vacant Lots, has 6.5 percent of the districts value with a weighted mean ratio of 0.9441, (3) category D, Rural Real, has 7.6 percent of the districts value with a weighted mean ratio of 0.8730 and (4) category F1, Commercial Real, has 8.5 percent of the districts value with a weighted mean ratio of 0.9880.
Category A has 75 percent of the tested value. The appraisal district is placing a below-market value on the category A single-family residences by a weighted mean ratio of 0.9196. This category is a main contributor to not meeting the lower limit of the confidence interval.
Category C, Vacant Lots, is appraised below market value and below the margin of error with a weighted mean ratio of 0.9441 but is not the primary reason that the school's values are not within an acceptable range as determined by the study.
Category D, Rural Real, is appraised below market value and below the margin of error with a weighted mean ratio of 0.8730. 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, 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. Subcategory D1 has only 3.7 percent of category D's value and 0.3 percent of the tested value. The appraisal district is placing a value on the D1 Productivity Value properties at their market value by a weighted mean ratio of 1.0910. Subcategory D2 has 96.3 percent of category D's value, 8.4 percent of the school district's total tested value and is being under appraised with a weighted mean ratio of 0.8664.
Category F1, Commercial Real, is appraised below market value and within the margin of error limits with a weighted mean ratio of 0.9880. Category F1 is not the primary reason that the school's values are not within an acceptable range as determined by the study.
The low weighted mean ratio in category A shifted the district outside the margin of error causing the school district to meet all three eligibility criteria.
Other School District
Comfort ISD is outside the confidence interval limit. There are three property categories tested in Comfort ISD: (1) category A, Single-Family Residences, has 39.9 percent of the districts value with a weighted mean ratio of 0.8810, (2) category D, Rural Real, has 36.9 percent of the districts value with a weighted mean ratio of 0.8276 and (3) category F1, Commercial Real, has 7.6 percent of the districts value with a weighted mean ratio of 1.0394. Category A has 39 percent of the tested value. The appraisal district is placing a below-market value on the category A single-family residences by a weighted mean ratio of 0.8810. Category D, Rural Real, is also appraised below market value with a weighted mean ratio of 0.8276. Subcategory D1 has only 7.5 percent of category D's value and 3.8 percent of the tested value. The appraisal district is placing a value on the D1 Productivity Value properties with a weighted mean ratio of 1.0957. Category D2 has 92.5 percent of category D's value and 47 percent of the school district's total tested value with a weighted mean ratio of 0.8116. Category F1, Commercial Real, is appraised near market value with a weighted mean ratio of 1.0394.
Kendall CAD Summary
In summary, the Kendall CAD should focus on its valuation of subcategory D2, Non-Qualifying Acres and Farm and Ranch Improvements, and category A, Single-Family Residences. In category D2, Non-Qualifying Acres and Farm and Ranch Improvements, both school districts in the county tested well below market value. Category A, single-family residences, tested well below market value in both school districts, and in all value ranges. This reinforces the study's findings that a number of homes throughout the county are being assessed below market value.
The appraisal district needs to review their appraisal procedures and methodology in the portion of category D that is not qualified for special agricultural use appraisal (D2), and category A, single-family residences to determine why it is consistently under appraising these properties.
For a statistical explanation of why the district was selected as eligible, see Appendix 18.