Findings of the Appraisal Standards Review
This chapter of the report addresses the findings, commendations and recommendations from the appraisal standards review of the Kendall County Appraisal District in five sections:
The quality of the property tax system depends on the appraisal district's Board of Directors. Individuals serving on the Board of Directors bring to the board knowledge, judgment, and expertise in establishing policies and procedures for the district's organization and operation.
The appraisal district was formed in 1981 and became active in 1982. The district Board of Directors consists of seven members. Dan Heckler is a Boerne city councilman and an elected official. Members of the board are listed in Exhibit 4.
Board of Directors Members
Board Member Represents Starting Date Lynn Urban, Chair Comfort ISD 1/1/1994 Dan Heckler City of Boerne 1/1/2004 Carol Mathews, Secretary Boerne ISD 1/1/1996 Dan O'Connor Boerne ISD 1/1/2002 Harry Seidensticker, Vice Chair Kendall County 1/1/2004 Mark "Buck" Rogers Boerne ISD 1/1/2005 John Bartlett City of Fair Oaks 1/1/1996 Source: Kendall CAD, April 2005.
The Board of Directors has the following primary responsibilities:
- Establish the appraisal district's appraisal office;
- Adopt the appraisal district's annual operating budget;
- Contract for necessary services;
- Hire a chief appraiser;
- Hire a taxpayer liaison officer (districts in counties having a population of over 125,000);
- Appoint appraisal review board members; and
- Make general policy on the appraisal district's operation.
Board of Directors received a written survey about board activities. Three of the eight board members responded. The survey was broken down into board policies and procedures, chief appraiser and staff, property appraisals, appraisal review boards, and budgeting and financial management. The board gave itself, the chief appraiser, and the district's staff high marks for the work being performed by the district. One member noted there were no board member defined training requirements for board members but the others disagreed with that assessment.
Financial audits of the district have been prepared in accordance with Section 6.063 of the Property Tax Code. Thompson, Williams, Biediger, Kastor & Young, L.C., certified public accountants from San Antonio, Texas, conducted independent audits of the 2001, 2002, and 2003 fiscal years. The audit found that the financial statements of the district are prepared in conformity with generally accepted accounting principles as applied to government units. The firm noted in the 2004 audit that the district implemented a new financial reporting model, as required by GASB Statement No. 34, Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments, as of September 30, 2004.
The district contracts with Pritchard & Abbott (P&A) for the appraisal of industrial, utility and business personal property, yet the contract has no service delivery dates or contract monitoring provisions, making it difficult for the district to determine how well the contractor is performing the service. This contract was signed by the Board of Directors chairman, the chief appraiser and Pritchard & Abbott on September 8th, 2004 and covers services for tax years 2005 through 2006. The contract defines each of the property categories and those properties to be appraised. P&A is paid $9,000 each year. The contract includes a list of properties that the appraisal firm will appraise. The properties include six industrial properties, 34 utilities, and 26 business personal properties. The per parcel cost for this contract is $136.36. Kendall County has no mineral parcels.
The contract is for tax years 2005 and 2006, but does not use actual dates to define what those periods encompass. The contract limits change opportunities to changes required by legislative action or judicial interpretation. The contract does not have a funding out clause. The contract also does not have a venue clause, which all governmental contracts should include in case a dispute over the contract arises. Without a venue clause, the district could have to defend itself in a lawsuit in a venue other than Kendall County.
The chief appraiser said that they received the appraisal from P&A on a timely basis.
The contract establishes what records the appraisal firm will provide the district, including one copy of recap showing estimated values, one copy of the appraisal records, two copies of notices of appraised value, one copy of the appraisal roll, one copy of the appraisal roll for each of the taxing units and one copy of division orders listing all current record owners of interests in oil and gas.
In order to get the appraisal roll ready each year, the appraisal district should have all of the appraisal information complete and entered in the appraisal district system before the appraisal notices are run. Without dates for specific deliverables, the district would have no recourse to compel the vendor to perform the services within a prescribed timeframe.
IAAO's Standard on Contracting for Assessment Services, Section 4, requires contracts have specific provisions, including the timeframes when services or goods will be delivered.
Revise the professional appraisal services contract to include deliverable dates and contract monitoring procedures.
In organizing and administering an appraisal district, the chief appraiser is responsible for hiring, firing, and training personnel, for ensuring compliance with a wide range of legal requirements, and for the maintenance of policies and procedures for effective appraisal district office operations. The district is also required to comply with Comptroller rules concerning application forms and appraisal records.
The chief appraiser is required by law to prepare and certify an appraisal roll for each taxing unit participating in the district. Certification of the appraisal roll for the 2003 tax year by the district was completed according to the law.
The chief appraiser has developed a public relations program that educates the public on district operations and taxpayer rights and responsibilities.
The chief appraiser has developed a public relations program that consists of distributing copies of the Comptroller's publication Taxpayers' Rights, Remedies and Responsibilities to title companies, realtors, homeowner associations, and civic groups. The district also regularly submits articles for newspaper publication. The chief appraiser frequently speaks to area groups and conducts workshops for property owners on wildlife management. The chief appraiser is active in the chamber of commerce and participates in the Business After Hours network. In addition, the chief appraiser makes it a priority to visit with the taxing entities on a regular basis. The district has also developed a personnel policy manual that requires professional conduct and service from its employees.
Written notices of appraised value are sent to all taxpayers and an announcement is published in the newspaper regarding the notices being sent. District values and certain property data are also available on the district's Web site. The district has dedicated office space, two computers, and printers for taxpayers researching appraisal records at the appraisal district office.
This year, the chief appraiser received an acknowledgement from the Board of Directors honoring her for hard work and dedication.
The chief appraiser has developed a public relations program that educates the public on district operations and taxpayer rights and responsibilities.
The Kendall County Appraisal District does not have well documented policies and procedures to guide the day-to-day operations of the district in areas such as payroll processing, accounting, purchasing, and the like.
Instead, long time employees of the district have a series of memos, notes or long term memory to guide them through the day-to-day processes. Policies adopted by the board are recorded in board minutes, but it is unclear how certain policies are translated into practice in the district, nor is it clear that the chief appraiser or any other employee is responsible for monitoring day-to-day operations to insure that policy decisions of the board are carried out.
The district has developed a detailed personnel policy manual, which contains objectives of the office, employment requirements, staffing and hiring procedures, administrative and compensation policies and registration and education requirements. These do not detail basic administrative functions.
A policy tells a person, department or group of individuals what they must do, whereas as procedure enumerates how it can be accomplished.
Well-written and organized procedures:
- implement and assure compliance with board policies as well as documenting the intent of those policies;
- protect the institutional knowledge of an organization, so that as experienced employees leave, new employees have the benefit of the others' years of experience;
- provide the basis for training new employees; and
- offer a tool for evaluating employees based on their adherence to procedures.
In the absence of well documented procedures and policies, the work of the appraisal district may come to an abrupt stop if key personnel leave a position as a result of sudden illness, death, or other personal tragedies. Other examples abound of whole departments without trained back-ups for critical positions like payroll, and of poor training techniques that show new employees how to perform a task, but not why.
To be effective, policy and procedure manuals should be updated and kept current at all times. This means setting up a system for regular updates and distribution, as well as periodic reviews, to ensure that all old policies are removed when no longer needed.
The Jefferson county appraisal district, for example, recently reviewed by the Comptroller's office, maintains a current and comprehensive policy and procedure manual detailing procedures for payroll, accounting, purchasing, budget, travel, bank reconciliations, and similar procedures.
Develop a written policy and procedures manual for district operations.
Kendall CAD uses a business property rendition form it has developed, but the form does not comply with the Tax Code. Section 22.24 requires that a person render property on a form that substantially complies with the appropriate form prescribed or approved by the Comptroller. It further states that a rendition form that is prescribed or approved by the Comptroller must contain the following statement in bold type: "If you make a false statement on this form, you could be found guilty of a Class A misdemeanor or a state jail felony under Section 37.10, Penal Code."
The Kendall County Appraisal District's Rendition of Real Property Inventory did not contain the required Penal Code statement, but did contain additional information that is required by Tax Code Section 22.01. The district had not received approval from the Comptroller's office to use this form, which the district is required to obtain.
Amend the district's Rendition of Real Property Inventory form and submit it to the Comptroller for approval prior to usage in the 2006 tax year and review its other rendition forms for compliance with Tax Code Section 22.24.
Appraisal districts use information technology to provide detailed records that are easily accessible to staff and the public. Information technology systems allow staff to effectively manage large amounts of data on individual properties and make the appraisal process more efficient.
Kendall County Appraisal District has integrated its automated appraisal system with its computerized mapping system. The resulting GIS capabilities enable the district to download information off the mainframe computer and link that information to parcel data on the map. The combined system is updated daily through the processing of deed changes and recorded plats.
The district uses Dell computers and 21 terminals linked to a rack system with four servers with a storage capacity of 72 gigabytes per server. All computers have the standard Microsoft application software and have The Software Group, Inc.'s appraisal package and Internet access is available to all employees.
The computerized mapping system can adjust to any scale and can display a number of different mapping layers. Such layers include property lines, abstract lines, city limits, creeks, floodplains, subdivisions, soil types, ISD boundaries, and topography. Dimensions or areas are also displayed along with unique identifiers for each parcel.
The system allows access to more comprehensive information on a real time basis. The appraiser now has access to all the data needed in order to analyze sales and make comparisons to other, similar property. It allows the appraiser to make an appraisal of each property by having all of the required data available when the appraiser calls up the property for appraisal. This system allows the district to meet the requirements of Section 23.01 of the Tax Code, which requires that all appraisals must consider the individual characteristics of the subject property.
Critical applications of the system include discovery and valuation of property, evaluating market trends over time, establishing reappraisal priorities, and providing public information requests. The system will also allow the district to run ratio studies on sold properties in order to update the appraisal schedules, and it will assist the district in the record keeping for ownership, exemptions and values. This system has all of the required elements of a complete information system.
The district developed an information processing system that assists in the valuation of property in the district.
Personnel and human resources management are a critical function of appraisal districts. Successful management of personnel includes efficient recruiting, hiring, classification and compensation, benefit administration, training and development, and performance evaluation. Compliance with equal employment opportunity statutes and other applicable federal and state laws and the establishment of fair and workable policies, procedures and training are important for the recruitment and retention of competent staff. Exhibit 5 shows staff positions, years of service, salaries and certification.
Kendall County Appraisal District Staff, Positions,
Certifications, Years with Kendall CAD and Salaries
Position BTPE Certification Registered Professional Appraiser (RPA),Registered Tax Assessor (RTA), Certified Tax Administrators (CTA) Years with Kendall CAD Salary Chief Appraiser RPA, RTA, CTA 8.5 $56,183 Appraisal Manager RPA, RTA 13.5 $42,791 Abstractor; ARB Coordinator Personal Property RPA 7 $39,415 Office Manager/Systems Administrator RTC 24 $38,162 Tax Assessor - Collector RTA 4.75 $33,953 Appraiser/Sales Analyst RPA 3.75 $31,903 Appraiser RPA 1.5 $30,900 Appraiser RPA Level II 2.75 $25,452 Appraiser RPA Level II 1.75 $23,000 Appraiser RPA Level I * $23,000 Collections Clerk 1.5 $23,000 GIS Manager - .25 $34,579 Account/Clerk - 8.25 $33,953 Clerk - .25 $17,640 Receptionist/Records Management - 7 $22,077 Source: Kendall CAD, January 2005.
Kendall CAD has developed a well-written and comprehensive personnel policy manual that explains the district's policy as an at-will employer.
The Board of Directors information is contained in the Kendall Appraisal District Policy Manual. It contains detailed meeting information on the meeting time and agenda of the meeting. It also describes the policy required by the Property Tax Code for taxpayers to speak to the directors at its meeting (Section 6.04(d)). Finally, it lists the specific requirements of the directors.
The major sections of the manual include objectives of the office, employment requirements, staffing and hiring procedures, administrative and compensation policies and registration and education requirements. The manual also describes guidelines for employee behavior and guidance on the use of district equipment including telephones, copiers and e-mail. The manual also addresses issues such as concealed handguns, children in the workplace and searches conducted on employer premises. The handbook is divided into 27 chapters, ranging from detailed information on the board of directors' and chief appraiser's duties, to issues such as nepotism, hiring process, job termination, promotions, administrative policies, employees' compensation, employees' conduct, employees' required education, accident/injury policy and complaint policy.
This manual ensures management and staff understand their roles and responsibilities. Good handbooks protect both management and staff from arbitrary practices and provide procedures to help manage conflicts that may arise from day to day operations.
The Kendall County Appraisal District's Employee Handbook was adopted on April 26, 2000. However, each year, the board of directors reviews and approves the manual each January, according to the chief appraiser.
The district has adopted a comprehensive personnel manual that informs employees of their rights and responsibilities.
The Kendall CAD has a systematic approach for annual performance evaluations. Each employee has at least one evaluative conference annually to discuss the written evaluation. The district also engages in regular staff meetings to maintain effective communication between departments and better serve the public.
Property Appraisal and Assessment Administration in Chapter 16, "Administration," states, "Although employees may improve their skills by their own efforts and the help of peers, managers have organizational responsibility for employee development. They use training, education, counseling, and performance reviews to identify talents and help employees grow."
An employee's performance of assigned duties and other job-related criteria provides the basis for an annual employee evaluation.
The Kendall CAD has a systematic approach for annual performance evaluations.
Kendall CAD has trouble gathering and processing sales, conducting ratio studies and evaluating schedules on a timely basis.
The population center of San Antonio has moved westward and Kendall County is experiencing tremendous growth. Boerne and surrounding cities are located favorably along IH-10 to facilitate a daily commute to work centers in San Antonio. In addition, Boerne ISD has been recognized as a premier school district within the State of Texas. As a result of the growth, land uses are changing and real estate values are increasing. According to the San Antonio Board of Realtors, the average sales price of a residential home in Kendall County for 2003 was $226,479, up from $215,479 in 2002. The chief appraiser stated that Category A values were raised 9 percent in Boerne ISD and 13 percent in Comfort ISD for 2004. The district anticipates raising those values again for 2005.
Such growth puts an additional strain on a district's efforts to maintain current records and market valuations. An increase in sales volume requires that the processing of the sales keep pace. The changing use of land from rural/agricultural to subdivision and recreational tracts requires the mapping department keep pace as well. Appraisers must be trained to properly appraise more complicated and custom type properties. Finally, the district must be aware of the market changes and compare this new market data to existing costs schedules and valuations.
Currently, the chief appraiser, along with another employees, is responsible for evaluating sales and market trends. Both have other responsibilities and are unable to devote full attention to this area. Cost tables are evaluated after the field work is completed which gives the chief appraiser only two weeks to a month to analyze cost schedules. Much more time is needed to adequately evaluate the market. For example, evaluating land sales are much more complicated now due to the changing land use to more recreational type use. Thus, the district must carefully consider market influences such as topography, views, and water access.
The district processes sales, conducts ratio studies, and evaluates schedules, but these tasks are not given the time and attention now required to assess a growing and changing market environment. Currently, sales are obtained through deed letters, septic permits, and city permits. Sales are confirmed through letters, realtors, and the San Antonio Multiple Listing Service. Ratio studies are conducted by the district throughout the year. Ratio studies are run by county, ISD, and category as well as by neighborhood, class, and age. Categories of property included in the ratio studies depend on the availability of sales and historically include residential, multifamily, lots, acreage, and commercial categories. Ratio studies are used to evaluate the Marshall & Swift cost schedules, local cost schedules and land tables.
The district, however, shows a parcel per staff count lower than its peer group average and the state average. District staffing trends are located in Exhibit 6.
Staffing Trends 2000-01 to 2003-04
2000-01 2003-04 PercentChange Total Parcels 27,113 28,444 4.9% Parcels/Staff 2,086 2,031 -2.6% Full Time 13 14 7.7% Part Time 1 0 -100% Supervisory 3 3 0% Supervisory to Total 1:5 1:5 n/a Full - Time Appraisers 5 6 16.7% Source: Comptroller Appraisal District Operations Reports, 2000-2001 and 2003-2004.
Note: Staffing includes two staff who work collections full-time.
The number of total parcels has increased by 4.9 percent since 2000, whereas total full time staffing increased 7.7 percent; the number of appraisers employed by the district has remained the same through 2004. Total parcel per staff member had decreased by 2.6 percent during this period.
Exhibit 3 in chapter one estimated the total number of locally appraised parcels at 28,538. The parcel count is slightly higher in Exhibit 3 because category D figures come from local ISD reports. This resulted in a ratio of 2,038 local parcels per staff, as compared to a statewide average of 3,404 local parcels per staff member, and 2,911 local parcels per staff in the counties included in the district's parcel count peer group. Kendall CAD averages fewer parcels per full time staff person than the group and state averages.
Conduct a staff needs analysis and establish staffing allocation guidelines that will ensure the number and type of staffing is appropriate and annually adjusted to meet the CAD's needs.
The titles on the organization chart and its employee job descriptions do not match and it is missing several job descriptions. Exhibit 7 outlines the differences between the titles and shows which positions are missing a job description.
Staffing Titles in Budget, Job Descriptions, and Organizational Chart
Organization Chart Title Budget Title Job Description Title Chief Appraiser Chief Appraiser Chief Appraiser Appraisal Supervisor/Sales Analysis Appraisal Manager (in charge of sales) Appraisal Supervisor Abstractor; ARB Coordinator Appraisal Supervisor/Scheduling Abstractor/ARB Coordinator/PP/Scheduling Manager Deed/ARB/TAX/ Computer technician Office Manager/Systems Administrator Systems Administrator/Assistant ARB Coordinator Systems Administrator Tax A/C Assistant AC & Historian Assistant tax assessor-collector and county historian Appraiser/Sales Analyst Not in 2004-05 budget No job description Appraiser Field appraiser Field appraiser Appraiser Field appraiser Field appraiser Appraiser Field appraiser Field appraiser Appraiser Field appraiser Field appraiser Collections Clerk Collections Clerk and assistant to the A/C Bookkeeper/appraisal & collections clerk GIS GIS Manager GIS Manager Accountant/Clerk Accountant/Clerk No job description Appraisal Clerk Appraisal Clerk Appraisal Clerk Receptionist/Records Clerk Administrative assistant/Records management Administrative aide/records technician Source: Kendall CAD.
Only the chief appraiser and the appraisal clerk have the same title in all three documents.
Job descriptions help ensure that staff understand their jobs and provide managers a basis for discussing performance issues with staff.
Organizations that use multiple titles for the same staff member can introduce confusion of what exactly are the functions the staff member should be performing. Job descriptions that are tied to titles and the budget allows an auditor to determine exactly what functions are being performed, who is performing the functions, and how much it costs the organization to perform each of those functions.
Review job descriptions for all staff to ensure the descriptions are current and standardize the use of titles for all district documents.
In appraisal circles there are generally three approaches to value - cost, income, and market - that a chief appraiser must consider in determining the market value of property. The chief appraiser must consider all three and use the method most appropriate in appraising a particular property.
The appraisal district contracts with Pritchard & Abbott for the appraisal of industrial, business personal property and utilities. Utilities are appraised using the unit value technique. The unit value technique requires the appraiser to determine the market value of the entire utility and apportion the value to each taxing unit within the appraisal district. Industrial properties are appraised using cost and/or income approaches to value.
Kendall CAD uses automated cost-based schedules to appraise real property improvements. Residential properties are appraised using cost-based schedules primarily developed from local sales. The residential appraisal manual includes class descriptions with pictures of local houses. The district also relies on Marshall & Swift (M&S) schedules for the highest residential classifications. The residential cost schedules are evaluated annually through an analysis of local sales, ratio studies, and builder costs. Ratio studies are conducted on all possible subdivisions and abstracts in an effort to attain market value.
The appraisal district lacks written appraisal procedures manuals for the appraisal staff.
The appraisal district uses an automated computer appraisal system (valuation model). Through fieldwork the appraisers gather specific information about properties such as condition of the property, age of the property, construction details, and physical dimensions. In addition, the appraisers gather information about the land on which real property is located. They gather specific information about the dimensions of the land, its shape, and location. The appraisers gather the same information for vacant land, whether a vacant lot or a rural tract.
Most appraisals are accomplished by entering the accumulated property characteristics into the computerized valuation model. The model, when directed, produces a market value for each property based on the property's characteristics that the appraiser then reviews for reasonableness and accuracy.
Residential properties are appraised using cost-based schedules primarily developed from local sales. The residential appraisal manual includes class descriptions with pictures of local houses. The district also relies on Marshall & Swift (M&S) schedules for the highest residential classifications. The residential manual lacks detailed instruction on its use. Procedures detailed in the manual might focus on measuring procedures, classification, identifying property attributes, applying depreciation and site valuation.
Commercial properties are primarily appraised using M&S cost schedules. The district uses M&S's San Antonio area modifier to adjust cost data to the local market. The area modifier is evaluated for adequacy by contrasting M&S derived values to local sales and builder costs when available. The income approach is also used when sufficient data exists. The Marshall & Swift Valuation Service guidebook is certainly a helpful tool, but it is not specifically designed for use in Kendall County. In addition, the valuation guidebook does not contain local procedures and directives for completing appraisals.
Personal property inspections are done at least once every three years. Personal property values, however, are largely based on taxpayer renditions. The personal property appraiser reviews the renditions for reasonableness by comparing the rendered values to the personal property value schedule in the Comptroller's field appraiser's guide and also comparing values of similar businesses. Kendall CAD does not have a manual to guide their appraisers in the review of renditions, or in the reasonableness determination.
The appraisal district contracts with Pritchard & Abbott for the appraisal of industrial, utilities, and business personal property accounts. Utilities are appraised using the unit value technique. The unit value technique is a technique that requires the appraiser to determine the market value of the entire utility company. The utility company value is then apportioned to each taxing unit based on an agreed measure of the company's presence in the taxing unit such as miles of track, historical cost, or number of meters. The unit valuation is widely accepted as the preferred income technique for appraising utility properties. No manual is available at the district office for explaining the industrial, utilities, and business personal property appraisals to the public.
Lack of detailed appraisal procedures manuals could cause inconsistent appraisals and result in property values that deviate from market value. This market value deviation could cause any of Kendall County's school districts to receive an invalid finding in the state's property value study. As mentioned previously, Boerne ISD did receive an invalid finding in the Comptroller's 2003 Property Value Study, and an invalid finding, if uncorrected, could eventually cause the school district to receive less funding from the state than expected. Further, if the level of appraisal (percentage of market value) varies from school district to school district, or from taxpayer to taxpayer, some taxpayers could be bearing more than their fair share of the local tax burden.
Section 23.01, Property Tax Code, mandates that property be appraised by applying generally accepted appraisal methods and techniques. This section also requires appraisal districts to comply with the USPAP and requires similar appraisal methods and techniques be applied to the same or similar properties, while taking care to account for the contributions of individual property characteristics on value. A comprehensive appraisal procedures manual would help ensure that these standards and requirements are attained.
Prepare and issue to each appraiser detailed appraisal procedures manuals that provide local procedures and practices for each type of property the staff appraises.
The appraisal district does not physically inspect business personal property annually.
The district relies mainly on rendition forms in valuing business personal property. Rendition forms are mailed and delivered to business owners each year. Rendition forms are reviewed for reasonableness and compared to renditions from similar types of businesses. Non-rendering businesses are contacted a second time and sent another rendition letter. If no information is obtained from the non-rendering business, the district uses the State's personal property schedules for valuation. New businesses are physically inspected each year. The appraiser will visit the new business, leave a rendition form, and create a new account in the system. Sources used to discover new personal property accounts include Chamber of Commerce newsletter, newspaper, driving the county, building permits, and the district trends and depreciates asset listings when available.
Section 22.07(a) states that "the chief appraiser or his authorized representative may enter the premises of a business, trade, or profession and inspect the property to determine the existence and market value of tangible personal property used for the production of income and having a taxable situs in the district." Section 22.07(c) authorizes the chief appraiser to request supporting rendition information.
Section 23.01 of the Property Tax Code requires all property to be appraised at market value, taking into consideration the individual characteristics of each property. Annual inspections help identify changes in the character of the accounts, as well as changes in ownership and location of property. Independent verification, inspection and valuation of inventories, fixtures, and equipment ensure that accounts reflect market value.
Attempt to inspect all business personal property accounts each year and develop an independent valuation method through the request as provided by law.
Procedures need to be developed to meet these recommendations and those procedures documented and incorporated into the district's appraisal manual.
Kendall County Appraisal District lacks a detailed reappraisal plan to ensure the execution of timely and accurate reappraisals.
Kendall CAD follows a three-year reappraisal plan, but has not developed a written plan that details how and when each reappraisal activity is to be accomplished. The chief appraiser explained that the current plan divides the district's reappraisal work into three main geographic areas (Blanco, Comfort and Boerne). Blanco was reappraised in 2003, Boerne was reappraised in 2004, and Comfort will be reappraised in 2005. In 2003, while the district was reappraising Blanco, the growth in the county was centered in the Comfort and Boerne areas. Much of the growth centered on changing rural land into suburbs, with rural land prices rising rapidly. The district had difficulty gathering sales and processing them, so it was caught off guard by the growth. The district reappraised adjusted schedules for 2004 and reappraised Boerne and the school district returned to within the confidence interval in the 2004 Property Value Study.
In addition to the three-year reappraisal plan, the district conducts ratio studies to evaluate land tables and cost schedules each year. The chief appraiser said that the reappraisal process begins by conducting countywide ratio studies to evaluate land and improvement schedules and to identify areas in need of work.
The district has also developed a three-year field work reappraisal plan, which lists the subdivisions and rural areas within the Blanco, Comfort, and Boerne areas. The field work plan is arranged in a spreadsheet format, which also provides for "date completed", assigned "appraiser" and "comments".
The field work plan is a good first step in documenting areas to be reappraised. However, this work plan should be accompanied by a comprehensive written plan which details the steps to be performed, staffing levels, workflow, and the costs associated with reappraisal activities. The plan should also discuss how market areas might be grouped to provide sufficient sales for appraisal model analysis and development.
The written reappraisal plan should link the appraisal district's budget, training, contracting, market analysis, field inspections, and data processing in one document. In addition, the Board of Directors should adopt or review the work plan the staff will follow to accomplish the reappraisal policy.
Lack of a detailed reappraisal plan could cause the execution of the plan to go awry, and result in property values that deviate from market value. This market value deviation could cause any of Kendall County's school districts to receive an invalid finding in the state's property value study.
Section 25.18, Tax Code, requires appraisal districts to implement a plan for reappraisal. The plan for reappraisal shall provide for reappraisal of all real property in the district at least once every three years. A reappraisal plan is a roadmap for performing the work. It is also a communication tool that shows the appraisal district board of directors how the appraisal district staff plans to accomplish its appraisals, and if the board chooses to require the chief appraiser to submit the plan for approval, the board can direct the appraisal activities by amending the plan.
According to USPAP Standard 6, a functional reappraisal plan includes the following activities:
- identifying properties to be appraised;
- identifying and updating in the appraisal records the relevant characteristics of each property to be appraised;
- defining market areas;
- identifying property characteristics that affect property value in each market area;
- developing an appraisal model that reflects the relationship among the property characteristics affecting value in each market area;
- calibrating the model to determine the contribution of the individual property characteristics affecting value;
- applying the conclusions reflected in the model to the characteristics of the properties being appraised; and
- reviewing the appraisal results.
The USPAP, Standards Rule 6-2(g), requires appraisers to "identify the characteristics of the properties that are relevant to the purpose and intended use of the mass appraisal, including:(i) the group with which a property is identified according to similar market influence;
(ii) the appropriate market area and time frame relative to the property being valued; and
(iii) their location and physical, legal, and economic characteristics."
To comply with this standard, appraisal districts typically record property characteristics that include but are not limited to: the Comptroller's property category code, the location and market area of property; the physical attributes of the property such as the size, age, condition, and construction type; the number of various kinds of rooms such as bedrooms, bathrooms, etc.; the presence of amenities such as central air conditioning; any legal and economic attributes or restraints; and the presence of easements, covenants, leases, special appraisals, ordinances, or other legal restrictions. See the Comptroller's Electronic Data Submission Record Layout and Instructions, Account Category Detail Record Layout for a basic list of property characteristics.
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 would indicate instances or types of properties that will be appraised using sources of information other than physical inspection.
Adopt a detailed reappraisal plan.