Lee County Appraisal District Follow-Up Report
In July 2004, the Lexington Independent School District (Lexington ISD), located in Lee County, Texas, was identified as one of 54 school districts in the state meeting the criteria that initiate an Appraisal Standards Review (ASR) of its county appraisal district. In June 2005, the Comptroller’s Property Tax Division (PTD) released the results of the ASR of Lee County Appraisal District (Lee CAD).
The report made eight recommendations to improve Lee CAD’s appraisal practices and operations. ASRs are intended to determine why the local value was deemed invalid and to recommend changes in operations and management that would improve appraisal practices. The Lee CAD review evaluated five functional areas: board of directors (governance and management), appraisal district policies, procedures and operations (assessment administration), information processing systems (information processing and data collection), staffing, personnel qualifications and positions (resources and management), and generally accepted appraisal practices.
At the time of the review, challenges facing Lee CAD included instability in district leadership, inconsistent reappraisals, a lack of objective evaluations of the chief appraiser and staff, and a near complete absence of written appraisal and operations manuals.
State law requires CADs under review by PTD to comply with PTD’s recommendations within one year of the report’s release. If the CAD fails to comply with these recommendations, and the Comptroller finds that the CAD’s board of directors (board) failed to take remedial action, the Comptroller must notify the judge of each district court in the county the CAD serves. The district judge(s) then must appoint a five-member board of conservators to implement the recommendations. This board of conservators must supervise and control the CAD’s operations until each school district is determined to have a valid local value in the annual PVS. The CAD must bear the costs related to the board’s of conservators supervision.
The PTD review team returned to Lee CAD in March 2006 to assess its progress in implementing the report recommendations. Although some work remains, the review team found clear evidence that Lee CAD has made steady progress in implementing its recommendations. The CAD has implemented seven of the eight recommendations and the remaining one is near completion.
PTD sent the CAD’s board members surveys soliciting their views and comments on the ASR. Two board members responded, both agreeing that the ASR had been useful and had resulted in operational improvements. One board member indicated that the most significant recommendations concerned personnel policies and the evaluation of the chief appraiser. He noted that compliance with the review was made simple by the hiring of an experienced chief appraiser. The other board member agreed, noting that the new chief appraiser had brought welcome stability to district operations. He also said that the district’s next challenge would be institutionalizing the changes that had been made to district operations.
PTD believes that Lee CAD’s efforts to date have met the state’s legal requirements, but will continue to monitor its progress toward full implementation. Specific steps that remain to be taken are outlined in this report.
History and Significant Events
Lee CAD received an ASR because Lexington ISD’s property values were found to be invalid in the state’s PVS and the school district was eligible for the “grace period” as provided for in Section 403.302(l) of the Government Code. Within Lexington ISD, property values in Category A, Single-Family Residential, and Category D, Rural Real property, were found to fall below the state test value. The appraisal district had not appraised properties in Lexington ISD in more than a year despite significant growth throughout the county.
Lee CAD had experienced significant staff turnover, with six interim, acting or permanent chief appraisers serving from 2001 to 2004. Prior to this tumultuous period, one chief appraiser had managed and directed the appraisal process for 16 years. In the absence of well-written procedures and the loss of other key staff, the remaining staff struggled to perform its day-to-day activities.
Lee CAD discharged its incumbent chief appraiser 60 days after the review team’s site visit.
In August 2005, the CAD hired an experienced chief appraiser, James Archer, who previously had served as chief appraiser of both the Travis and Bastrop CADs. The board directed the new chief appraiser to implement the Comptroller’s recommendations and he has worked steadily to do so in a timely manner, providing regular updates to the board.
All three of the county’s independent school districts, Giddings, Lexington and Dime Box, received local value in the final 2004 Property Value Study and the final 2005 Property Value Study; meaning that Lee CAD is now accurately assessing property values in line with the state’s standards.
Status of Recommendations; What Remains to Be Done
Appendix A lists the eight recommendations identified in the original report, with a summary of actions to date. The Comptroller applauds the district for its hard work over the last year. The district has implemented seven recommendations and is working towards completing the remaining one.
The seven completed recommendations will ensure that all of the CAD’s processes and procedures are institutionalized—part of its everyday operations—so that any future management or staffing changes can occur with a minimum of disruption to core business functions.
The one recommendation remaining in progress, Recommendation 3, needs the following efforts:
Recommendation 3: Develop a written policy and procedures manual for district operations.
Lee CAD has documented many of its policies and procedures and included them in an operations manual adopted by the board in September 2005. The current chief appraiser, however, reports that this manual is incomplete because procedures for payroll, bank reconciliation and other internal financial procedures need to be completed. He indicated that the manual should be revised and completed by October 2006. A copy of the manual will be sent to the Comptroller’s office for review and final signoff.
Because policies and procedures are useful only if they are accurate and up to date, PTD recommends that the CAD establish an annual review cycle for the manual. By reviewing a set number of policies and procedures each month, the CAD can ensure that its manual remains current and useful.
Lee County Appraisal Standards Review
Implementation Status Report
|Rec. #||Recommendation||Implementation Status||If not Complete, Projected Completion Date||Description of Actions taken to Date|
|2.1 Board of Directors|
|1||Expand the detail of the budget presented to the board of directors for adoption to include the benefits for each position and a list of each proposed capital expenditure with sufficient detail to allow comprehensive decision-making by the CAD board and taxing units.||Complete||
In June 2005, the interim chief appraiser began developing the 2006 district budget. The budget included each position, benefits for each position and a list of capital expenditures for 2006. The new chief appraiser completed the budget process by advertising the meeting held to discuss the budget in both the Giddings Times-News and the Lexington Leader in August 2005. The board formally adopted the budget, with the new format, in September 2005. The district has a master annual calendar that includes all-important budget-related deadlines. According to the senior appraiser, Lexington ISD's superintendent called him to say he liked the new budget and was impressed with its detail.
Using the proposed detailed budget along with other information, the chief appraiser was also able to convince the board to hire an additional appraiser to assist with appraisal and reappraisal work.
|2||Develop a job description for the chief appraiser position to be used in hiring, tie the job description to an evaluation form and begin evaluating the chief appraiser according to the new procedures.||Complete||In August 2005, Lee CAD hired a new chief appraiser. The chief appraiser developed a job description for the position, making sure the information included matched the evaluation form developed by the prior interim chief appraiser. The board met in January 2006 to evaluate the chief appraiser, but after a brief executive discussion, postponed the evaluation until its February meeting. In February 2006, five of the six board members individually scored the evaluation form in an open meeting. The board chairman then averaged the scores of the board members and gave the chief appraiser a composite evaluation with a score of 9.29 on a 10-point scale. The board discussed the evaluation with the chief appraiser and each board member and the chief appraiser signed the evaluation. The evaluation instrument rates the chief appraiser on 50 separate items grouped in 10 functional areas. According to the chief appraiser, the board found the process so useful that it has decided to evaluate the chief appraiser every six months. The board also directed the chief appraiser to bring a list of proposed goals for 2006 to subsequent board meetings for discussion.|
|2.2 Appraisal District Policies, Procedures and Operations|
|3||Develop a written policy and procedures manual for district operations.||In Progress||October 2006||
The chief appraiser has developed a district operations manual and a board of directors manual. The operations manual was completed in August 2005 and revised in September 2005.
The chief appraiser used a copy of the Jefferson CAD operations manual as a guide in developing Lee CAD's manual.
The operations manual includes local policies and procedures on abatements, appraisal methods, appraisal review board practices, exemptions, e-mail practices, Internet use, public information requests, records management and telephone procedures. The board of directors manual addresses basic board conduct, procedures for developing and adopting a budget, purchasing practices, finance methods, accounting procedures, contracts and payroll.
The operations manual is nearly complete, but still needs procedures for payroll, bank reconciliation and other internal financial procedures.
|2.3 Information Processing Systems|
|4||Begin using the integrated appraisal and GIS system to improve appraiser productivity and improve appraisal in Lee County.||Complete||
The newly integrated GIS and appraisal system was used to complete 2005 reappraisals and the appraisal roll. Appraisers can use their computers to pull up a map of any property in the county, along with all the information associated with each parcel. The appraiser can print these maps in several different formats, with different data depending on requirements for individual appraisals. Appraisers use these maps to plan their reappraisal activities, plan routes to reduce travel time between parcels and locate properties for comparison purposes.
When the new chief appraiser was hired in August 2005, the district had a backlog of three file boxes of records that needed to be entered into the new system. The chief appraiser estimates that a standard size file box can hold about 3,500 sheets of paper, so the CAD's vendor entered about 10,000 records into the system to complete this portion of the recommendation.
The deed and records technician is responsible for keeping information in the system updated.
|2.4 Staffing, Personnel Qualifications and Positions|
|5||Develop procedures and use the recently developed personnel form to evaluate district staff.||Complete||
In July 2005, after the PTD report was released, the interim chief appraiser evaluated each staff member using the recently developed employee evaluation form. The district's policy is to evaluate all employees once a year in July.
Evaluations occur while the district is developing its budget for the next year and the current chief appraiser said he will use the evaluations to determine salary actions for the next year.
|2.5 Generally Accepted Appraisal Practices; Equality and Uniformity of Appraisal Standards|
|6||Develop and establish a reappraisal plan.||Complete||
The chief appraiser said that the appraisal district developed an interim reappraisal plan for 2004 and 2005 that resulted in a successful reappraisal of the county in both the 2004 and 2005 PVS. He said that the board did not adopt Lee CAD's interim originally developed plan although the plan assisted the district in receiving local value.
The chief appraiser said he used the format developed by Taylor CAD and has adopted it as a model for Lee CAD's reappraisal plan. The chief appraiser developed his three-year reappraisal plan and sent it to the Comptroller in August 2006. The board adopted the plan in July.
The chief appraiser said he is continuing to develop a calendar and a schedule for reappraisals. The chief appraiser also has developed a separate report that helps the district to comply with USPAP standards; the district plans to link the USPAP report to its reappraisal plan when complete. The chief appraiser said he wants both the taxing units and taxpayers to be able to read and understand his reappraisal plan so that they can tell how, why and when the CAD reappraises property.
|7||Prepare and issue to each appraiser detailed manuals that provide local procedures and practices for each type of property the staff appraises and tie these local procedures to the existing Marshall & Swift procedures.||Complete||
Lee CAD took a two-step approach to this recommendation by purchasing appraisal manuals and developing internal procedures.
Lee CAD purchased copies of Marshall & Swift appraisal manuals for residential and commercial property. The district's computer system, True Automation, operates using Marshall & Swift information formats.
The chief appraiser said he felt the Marshall & Swift manuals provided a sound basis for appraisals in Lee County, and that it was his intent to hire Marshall & Swift to develop a local modifier for Lee County. The current local modifier used by the CAD was developed for the Austin market, which is considerably larger than Lee's. The chief appraiser pointed out, however, that by using Marshall & Swift the district received local value for its three school districts in both the 2004 and 2005 Property Value Studies.
The CAD also drafted separate appraisal-related procedures and included them in its operations manual. These procedures include:
|8||Establish written procedures for gathering and analyzing sales.||Complete||The senior appraiser developed sales procedures and completed work on the sales procedures manual in December 2005. This seven-page document includes instructions on gathering sales information and entering it into the district's appraisal system. Topics in the manual include gathering sales information; entering sales data; developing time adjustments; performing market and cost reconciliation and valuation; and using statistical analysis.|