Overview of County Appraisal District
1.1 County History and Demographics
According to the Handbook of Texas, Lee County was created from Washington County, Bastrop County, Fayette County and Burleson County in April 1874 and was named in honor of Confederate General Robert E. Lee. The county is bounded on the east by East Yegua Creek and on the southeast by Cedar Creek.
The population of the county for 2003, according to the County Information Project, was 16,530 residents, with the City of Lexington having 1,262 residents and the City of Giddings having 5,386 residents. The balance of the county population lives in the rural areas. The county covers 629 square miles in land area and six square miles in water area for a total area of 635 square miles.
According to the County Information Project, the median age of residents is 35.6. The median per capita income is $37,078, and 11.6 percent of the population lives at or below the poverty level.
The county seat is Giddings, located at the intersection of U. S. Highways 290 and 77. The city was founded in 1871 and became the county seat in 1874.
The county includes the Giddings Independent School District, Lexington Independent School District, Dime Box Independent School District and a small portion of the Elgin Independent School District.
1.2 Appraisal District Organization and Staffing
The appraisal district was formed in 1981 and became active in 1982. The district has a Board of Directors consisting of six members. The Board of Directors hires a chief appraiser as the chief operating officer of the district. The staff of the district consists of a deputy chief appraiser, senior appraiser, two appraisers, title clerk, appraisal data entry clerk and a receptionist. The appraisal district Board of Directors hires the chief appraiser, sets the budget and appoints the Appraisal Review Board members.
Lee County Appraisal District Organization
Board of Directors Douglas Spacek, Chairman Billy Buetow Virginia Jackson Fred Jones Kenny Mostyn Robert Lee
Scope of Office
The Board of Directors has no authority to set values or appraisal methods. The chief appraiser carries out the appraisal district’s legal duties, hires the staff, makes the appraisals and operates the appraisal office.
Appraisal district staff appraises residential, commercial and personal property. The appraisal district contracts with Thomas Y. Pickett & Company, Inc. (TYP) for professional appraisal services for minerals, utilities and some industrial property. The district is responsible for appraising Lee County and parts of four surrounding counties.
The district provides appraisal services for eight taxing units, including Lee County, Giddings Independent School District, Lexington Independent School District, Dime Box Independent School District, City of Giddings, City of Lexington, Lee County Fresh Water Supply District #1 and Cummins Creek Water Control and Improvement District #1.
Exhibit 2 presents the types of properties appraised by Lee CAD in tax year 2003. In-house staff handle all property categories except Category G (minerals), Category J (utilities), and part of Category F2/L2 (industrial – real/personal), which is appraised by TYP.
Lee CAD Property by Category Summary with Assigned Responsibility
Tax Year 2003
Property Category Account Type Description Responsible for Appraisal Category A Residential In-house staff Category B Multi-Family In-house staff Category C Vacant Lots In-house staff Category D/E Farm/Ranch Land with Improvements In-house staff Category F1 Commercial Real In-house staff Category L1 Commercial Personal In-house staff Category G Minerals Contracted Appraisal Firm Category J Utilities Contracted Appraisal Firm Category F2 Industrial Real In-house and Contracted Appraisal Firm Category L2 Industrial Personal Contracted Appraisal Firm Source: Lee County Appraisal District, September 2004.
1.3 Self Evaluation Questionnaire
In preparation for the Appraisal Standards Review, Lee CAD was asked 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 subject to an appraisal standards review received an electronic version of the questionnaire and the complete IAAO manual explaining each question with information on how to answer each question. Each district undergoing an appraisal standards review is requested to perform the self assessment, with the goal of assisting the district in determining how well it is performing.
Lee County answered 94 out of 110 questions. Only eight of the questions had any elaboration included in the response, making an overall assessment based on the district’s responses difficult. See Appendix 15 for a copy of the district’s responses.
The questions not answered give a measure of credence to the areas of concern as seen by the review team, particularly in Resources and Management. Some of the questions not answered were:
- Does the assessment office engage in formal planning?
- Has the assessment office prepared a formal estimate of resources it requires?
- Are performance- or program-based budgeting methods used?
In the area of Computerization, Question #2 was not answered: “Does the infrastructure provide for the following services?”
In Personal Property Assessment, Question #7, “Does the assessment office employ all appropriate approaches to appraisal in valuing personal property?” was not answered.
The questions center on organization and planning, and with proper procedures and policies in place, these questions could be answered with confidence.
1.4 Findings of the Property Value Study and Summary Worksheets
The Property Value Study (PVS) determines the total property value in each school district in Texas. With a few notable exceptions, all CADs and the Property Tax Division (PTD) are required by law to appraise property at market value. Agricultural land and timberland are appraised according to productivity value. Market value, in short, is the price that a property would transfer from a willing seller to a willing buyer. For it to be a market transaction, neither party may be under duress to buy or sell, the sale must be on the market for a reasonable time and the parties to the sale are not related.
Local tax roll value, or local value, is determined by the county appraisal district and submitted to PTD on its annual self-report. The PTD staff estimates the total taxable value in a school district, referred to as state value, by determining market value or by accepting the local appraised value in each property category (see Exhibit 2) in the district and then adding these category values for an overall school district value. PTD then deducts state-mandated homestead exemptions, disabled veterans’ exemptions, value limitations, reinvestment zones, freeport exemptions, productivity appraisal of qualified agricultural lands, the school tax ceiling for homeowners over age 65 or disabled and other state-mandated exemptions.
PTD issues a preliminary and final PVS each year. School districts and county appraisal districts may protest the findings of the preliminary PVS through an administrative hearings process with the Comptroller, and school districts may protest the findings of the final PVS in district court. The administrative hearings process requires the protester to file a written protest with supporting documentation within 40 days of the issuance of the preliminary PVS. The PTD may amend the findings of the preliminary PVS based on the submission of the written protest, an informal hearing or a formal hearing. Formal hearings are held by a hearings examiner, appointed by the Comptroller’s General Counsel, and reporting directly to the Comptroller. The hearings examiner is not an employee of the PTD.
Lee CAD protested the findings for Lexington ISD in Category A, single-family residences. Lee CAD requested that one property be added to the study, two be deleted from the study and 12 properties have defining characteristics changed. An appeal recommendation issued in April 2004 recommended deleting one property from the study, changing characteristics on three properties and no changes to the remaining properties. A revised appeal recommendation issued in May 2004 deleted two properties and changed characteristics on one additional property. After an informal hearing, Lee CAD requested and received a formal hearing on its protest. On May 24, the hearings examiner issued a recommendation denying the district’s requests on eight properties and agreeing to a change on one property. On June 3, PTD appealed the change to the one property. Also, on June 3, Lee CAD took exception to the hearings examiners’ findings on the unchanged properties. On June 10, Lee CAD requested the recommended change be included in the study, or that the property be deleted from the study. On June 14, PTD responded to the exceptions as requested by the hearings examiner. On June 16, the hearings examiner issued his Ruling on Exceptions and Final Decision. The hearings examiner upheld his original recommendation, with the exception that the one property that was changed was deleted from the study. Lexington ISD had not appealed the decision to district court at the time of this review.
For the local reported value to be determined valid, it needs to be within a range that is plus or minus 5 percent of the state value. The state value for Lexington ISD was calculated to be $181,177,465; therefore, a valid finding would be between $170,471,812 and $190,896,465. Since the local value reported by Lee CAD for Lexington ISD, $169,731,198, was below the lower limit of the range, the local value was invalid. This invalid finding, coupled with the fact that Lexington ISD did have valid findings in the 2001 and 2002 PVSs, established Lexington ISD eligible for the funding grace period provided by law.
The majority of the property value in Lexington ISD is included in Category A, single family residences, and Category D, rural real property. No other property categories were studied in the 2003 PVS in Lexington ISD because each category included less than 5 percent of the total value of property in the district. PTD does not study categories that have less than 5 percent of the property value in the district. (See Appendix 13 for the values in each category.)
The PVS found, based on a statistical analysis, that single-family residences and rural real property were typically appraised below market value. The appraisal standards review later discovered several factors that contributed to this under-appraisal, including a failure to reappraise in 2003.
For a statistical explanation of why the district was selected as eligible, see Appendix 18.