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Chapter 1
Findings of the Property Value Study and Summary

Overview of Property Value Study

The annual PVS estimates the total taxable property value in each school district in Lamar CAD. With a few notable exceptions, the law requires all CADs and PTD to appraise property at market value. Market value, in essence, is the price a willing buyer would pay a willing seller for the property under normal conditions. Agricultural land and timberland, however, are appraised according to the productivity value of the land's category.

The CAD determines the local appraisal roll value and certifies it to each school district; these values become the districts' tax roll values. Each school district must submit an annual self-report of its property values to PTD, which audits the reports for accuracy.

PTD's estimate of the total taxable value in a school district, called the state value, is made by estimating market value or by accepting the local appraised value in each property category and then adding these category values for an overall school district value. PTD then deducts the school district's self-reported, state-mandated homestead exemptions, disabled veterans exemptions, value limitations, reinvestment zones, freeport exemptions, the loss between market value and productivity value of qualified agricultural lands, the school tax ceiling for homeowners over age 65 or with a disability and other state-mandated exemptions.

PTD issues a preliminary and a final PVS each year. School districts and CADs may protest the findings of the preliminary PVS through an administrative hearings process. This process requires the protester to file a written protest with supporting documentation within 40 days of the issuance of the preliminary PVS. PTD may amend the findings of the preliminary PVS based on the submission of a written protest, a conference between PTD and CAD representatives or a formal hearing. A hearings examiner appointed by the Comptroller's general counsel holds the formal hearing; this person is not a PTD employee. A school district that disagrees with the hearing examiner's final decision may appeal it to Travis County district court.

When conducting the property value study, PTD assigns properties to various categories, such as residential, commercial and rural property, so like properties can be studied together.

In general, a ratio indicates the percentage of market value, as determined by PTD, at which a CAD appraises a property or group of properties. A ratio of 1.0 indicates appraisal at market value–the legal standard. Generally, appraisals with ratios that are close to the standard, for instance between 0.95 and 1.05, are considered reasonably accurate for a property group.

Findings of the Property Value Study and Summary Worksheets

The PVS determines the total property value in each school district in the Lamar CAD. With a few notable exceptions, Government Code Section 403.302 and Property Tax Code Section 23.01 requires all CADs and PTD to appraise property at market value. PVS appraises agricultural land and timberland according to productivity value. In general, market value is the price a property would sell for under normal conditions as defined by Property Tax Code Section 1.04(7).

The CAD determines the local tax roll value, or local value, and submits it to PTD on its annual self-report. School districts also complete an annual self-report. 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 as reported by the school district in each property category 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 disabled homeowners and those over age 65 and other state-mandated exemptions.

PTD issues a preliminary and final PVS each year. School districts and CADs may protest the findings of the preliminary PVS through an administrative hearings process. 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. PTD may amend the findings of the preliminary PVS based on the submission of the written protest, a conference between PTD staff and CAD representatives or a formal hearing. The Comptroller's general counsel appoints a hearings examiner who holds formal hearings. The hearings examiner is not a PTD employee.

When conducting the property value study, PTD assigns properties to various categories, such as residential, commercial and rural property. PTD divides properties into categories so it can appraise like properties together.

In general, a ratio of between 0.95 and 1.05 in any property category makes it more likely the CAD is appraising property at or near market value.

Eligible School Districts

The 2006 PVS identified four ISDs, Chisum, Roxton, North Lamar and Prairiland, as eligible school districts when their local values fell outside the study's statistical margin of error. The statistical margin of error, or confidence interval, is a range of school district values that the Comptroller has accepted.

Chisum ISD

Four property categories were tested in Chisum ISD:

  1. Category A, Single-Family Residential;
  2. Category D, Rural Real;
  3. Category J, Utilities; and
  4. Category L1, Commercial Personal.

Category A, Single-Family Residential, made up 23 percent of the total test value and 5 percent of the school district's value. A review of the Category A sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 79 percent to a high of 151 percent of market value, with a weighted mean ratio of 1.0054.

Category D, Rural Real, made up 45 percent of the total test value and 9 percent of the school district's value.

Rural Real properties include two subcategories: productivity value of qualifying acres (D1), which is primarily farm and ranch land that qualifies for the special productivity appraisal; and non-qualifying acres and farm and ranch improvements (D3), which are primarily rural homes and land that do not qualify as farm, ranch or timberlands. The differences in value between qualified and non-qualified rural land are wide since qualified land is appraised using a special statutory method to determine the land's productivity value, and non-qualified property is based on what the land would sell for in an open-market transaction.

Subcategory D1, Qualified Agricultural Land, made up 12 percent of the total test value and 3 percent of the school district's value. The weighted mean ratio of the qualified rural values tested was 0.9541.

Subcategory D3, Non-Qualified Land and Farm and Ranch Improvements, made up 33 percent of school district's test value and 6 percent of the school district's value. The CAD appraised rural homes and non-qualified rural land from as low as 55 percent to a high of 310 percent of market value, with a weighted mean ratio of 0.8767.

Category J, Utilities, made up 24 percent of the total test value and 6 percent of the school district's value. A review of the Category J sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 79 percent to a high of 100 percent of market value, with a weighted mean ratio of 0.8841.

Category L1, Commercial Personal, comprised 8 percent of the total test values and made up 2 percent of the school district's value. A review of the Category L1 sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 72 percent to a high of 223 percent of market value, with a weighted mean ratio of 1.0068.

Roxton ISD

Three property categories were tested in Roxton ISD:

  1. Category A, Single-Family Residential;
  2. Category D, Rural Real; and
  3. Category J, Utilities.

Category A, Single-Family Residential, made up 36 percent of the total test value and 33 percent of the school district's value. A review of the Category A sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 59 percent to a high of 131 percent of market value, with a weighted mean ratio of 0.9798.

Category D, Rural Real, made up 52 percent of the total test value and 45 percent of the school district's value.

Subcategory D1, Qualified Agricultural Land, made up 20 percent of the total test value and 18 percent of the school district's value. The weighted mean ratio was 0.9388.

Subcategory D3, Non-Qualified Land and Farm and Ranch Improvements, made up 32 percent of the total test value and 27 percent of the school district's value. The CAD appraised non-qualified rural land and rural homes from as low as 49 percent to a high of 126 percent of market value, with a weighted mean ratio of 0.8252.

Category J, Utilities, made up 11 percent of the total test value and 14 percent of the school district's value. A review of the Category J sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 84 percent to a high of 117 percent of market value, with a weighted mean ratio of 0.9311.

North Lamar ISD

Four property categories were tested in North Lamar ISD:

  1. Category A, Single-Family Residential;
  2. Category D, Rural Real;
  3. Category F1, Commercial Real; and
  4. Category L1, Commercial Personal.

Category A, Single-Family Residential, made up 51 percent of the total test value and 37 percent of the school district's value. A review of the Category A sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 58 percent to a high of 173 percent of market value, with a weighted mean ratio of 0.9472.

Category D, Rural Real, made up 29 percent of the total test value and 20 percent of the school district's value.

Subcategory D1, Qualified Agricultural Land, made up 4 percent of the total test value and 2 percent of the school district's value. The weighted mean ratio was 1.0444.

Subcategory D3, Non-Qualified Land and Farm and Ranch Improvements, made up 25 percent of school district's test value and 18 percent of the school district's value. The CAD appraised non-qualified rural land and rural homes from as low as 29 percent to a high of 300 percent of market value, with a weighted mean ratio of 0.7629.

Category F1, Commercial Real, made up 13 percent of the total test value and 9 percent of the school district's value. A review of the Category F1 sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 55 percent to a high of 134 percent of market value, with a weighted mean ratio of 0.9551.

Category L1, Commercial Personal, comprised 8 percent of the total test values and made up 6 percent of the school district's value. A review of the Category L1 sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 87 percent to a high of 216 percent of market value, with a weighted mean ratio of 1.0390.

Prairiland ISD

Three property categories were tested in Prairiland ISD:

  1. Category A, Single-Family Residential;
  2. Category D, Rural Real; and
  3. Category J, Utilities.

Category A, Single-Family Residential, made up 37 percent of the total test value and 34 percent of the school district's value. A review of the Category A sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 61 percent to a high of 115 percent of market value, with a weighted mean ratio of 0.8940.

Category D, Rural Real, made up 54 percent of the total test value and 48 percent of the school district's value.

Subcategory D1, Qualified Agricultural Land, made up 11 percent of the total test value and 10 percent of the school district's value. The weighted mean ratio was 1.0042.

Subcategory D3, Non-Qualified Land and Farm and Ranch Improvements, made up 43 percent of school district's test value and 38 percent of the school district's value. The CAD appraised non-qualified rural land and rural homes from as low as 29 percent to a high of 374 percent of market value, with a weighted mean ratio of 0.9600.

Category J, Utilities, made up 9 percent of the total test value and 10 percent of the school district's value. A review of the Category J sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 77 percent to a high of 124 percent of market value, with a weighted mean ratio of 0.8878.

While these figures show the range of property ratios in Lamar CAD, a clearer measure of appraisal performance includes how many of these ratios were within 10 and 25 percent of the median ratio. The median ratio is the ratio in the middle of all the other ratios when sorted by size.

These figures, in conjunction with the Coefficient of Dispersions (CODs) outlined below, measure the consistency of an appraisal district's property appraisals at the same percentage of market value, without regard to value. A low COD combined with high percentages indicates equitable appraisals, while a high COD paired with low percentages indicates inequitable appraisals.

The median ratio for Category A, Single-Family Residential, in Chisum ISD was 100 percent, with 87 percent of the ratios within 10 percent of the median and 97 percent within 25 percent of the median.

The median ratio for Category D3, Non-Qualified Land and Farm and Ranch Improvements, in Chisum ISD was 95 percent, with 30 percent of the ratios within 10 percent of the median and 45 percent within 25 percent of the median.

The median ratio for Category J, Utilities, in Chisum ISD was 98 percent, with 67 percent of the ratios within 10 percent of the median and 100 percent within 25 percent of the median.

The median ratio for Category L, Commercial Personal, in Chisum ISD was 104 percent, with 56 percent of the ratios within 10 percent of the median and 81 percent within 25 percent of the median.

The median ratio for Category A, Single-Family Residential, in Roxton ISD was 100 percent, with 72 percent of the ratios within 10 percent of the median and 87 percent within 25 percent of the median.

The median ratio for Category D3, Non-Qualified Land and Farm and Ranch Improvements, in Roxton ISD was 92 percent, with 43 percent of the ratios within 10 percent of the median and 67 percent within 25 percent of the median.

The median ratio for Category J, Utilities, in Roxton ISD was 99 percent, with 60 percent of the ratios within 10 percent of the median and 100 percent within 25 percent of the median.

The median ratio for Category A, Single-Family Residential, in North Lamar ISD was 94 percent, with 86 percent of the ratios within 10 percent of the median and 98 percent within 25 percent of the median.

The median ratio for Category D3, Non-Qualified Land and Farm and Ranch Improvements, in North Lamar ISD was 91 percent, with 32 percent of the ratios within 10 percent of the median and 46 percent within 25 percent of the median.

The median ratio for Category F1, Commercial Real, in North Lamar ISD was 99 percent, with 63 percent of the ratios within 10 percent of the median and 79 percent within 25 percent of the median.

The median ratio for Category J, Utilities, in North Lamar ISD was 100 percent, with 83 percent of the ratios within 10 percent of the median and 100 percent within 25 percent of the median.

The median ratio for Category A, Single-Family Residential, in Prairiland ISD was 94 percent, with 66 percent of the ratios within 10 percent of the median and 93 percent within 25 percent of the median.

The median ratio for Category D3, Non-Qualified Land and Farm and Ranch Improvements, in Prairiland ISD was 95 percent, with 55 percent of the ratios within 10 percent of the median and 65 percent within 25 percent of the median.

The median ratio for Category J, Utilities, in Prairiland ISD was 98 percent, with 67 percent of the ratios within 10 percent of the median and 83 percent within 25 percent of the median.

Lamar CAD Summary

The Lamar CAD's overall median ratio was 0.97.

  • Category A, Single-Family Residential, sample ratios ranged from 0.58 to 1.81. The median ratio was 0.97.
  • Category B, Multi-Family Residential, sample ratios ranged from 0.58 to 1.17. The median ratio was 1.00.
  • Category D3, Non-Qualified Land and Farm and Ranch Improvements, sample ratios ranged from 0.29 to 3.74. The median ratio was 0.94.
  • Category F1, Commercial Real, sample ratios ranged from 0.55 to 1.37. The median ratio was 0.99.
  • Category J, Utilities, sample ratios ranged from 0.77 to 1.24. The median ratio was 0.99.
  • Category L1, Commercial Personal, sample ratios ranged from 0.44 to 2.23. The median ratio was 1.01.

Coefficient of Dispersion

The COD, the primary measure of appraisal uniformity, measures the average percentage by which individual ratios vary from the median ratio. According to IAAO's Property Appraisal and Assessment Administration, a low COD indicates that appraisals within a category of property are uniform, while a high COD indicates properties are being appraised at inconsistent percentages of market value. A COD that is very low, however, may indicate "sales chasing," a form of unequal appraisal.

According to IAAO's Standard on Ratio Studies, CODs for Category A, Single- Family Residential, should generally be 15 or less, and 10 or less for new and fairly homogeneous areas. For Category C, Vacant Lots, and for income-producing properties, the COD should be 20 or less. For other real property and personal property, CODs should reflect the nature of the properties, market conditions and the availability of reliable market indicators.

The 2006 COD for Lamar CAD Category A was 8.03; Category B was 7.08; Category D was 31.93; Category F1 was 9.77; Category J was 7.61; and Category L1 was 16.35.

The 2006 COD for Chisum ISD Category A was 6.44; Category D was 34.25; Category J was 6.88; and Category L1 was 17.77.

The 2006 COD for Roxton ISD Category A was 8.88; Category D was 19.72; and Category J was 7.66.

The 2006 COD for North Lamar ISD Category A was 5.50; Category D was 38.44; Category F1 was 11.96; and Category L1 was 14.98.

The 2006 COD for Prairiland ISD Category A was 10.16; Category D was 33.17; and Category J was 8.99.

With the exception of Category D, rural properties, these numbers indicate relative uniformity in appraisal in these categories in the CAD and ISD.

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