Chapter 1
Overview of County Appraisal District
1.1
County History and Demographics
As noted in the Handbook of Texas Online, Marion County is located in northeastern Texas where it forms part of the Louisiana-Texas border. Jefferson, the county's largest town and county seat, is 17 miles north of Marshall, in Harrison County, and 46 miles west of Shreveport, Louisiana. Cass and Morris counties on the north, Upshur County on the west, Harrison County to the south and Caddo Parish in Louisiana to the east surround the county.
The northern territorial boundaries of Marion County were annexed from the southern portion of Cass County by an act of the State Legislature on Feb. 8, 1860. Territorial additions in 1863 and 1874 extended its southern boundary to take in both banks of Big Cypress Bayou. The county was named for American Revolutionary War hero Francis Marion, the "Swamp Fox."
According to the Handbook, the topography of Marion County is gently rolling, rich, sandy loam topsoil over a clay foundation, which is populated by pine, cypress and oak forests. The elevation is 200-500 feet above sea level. The county is drained by the Red River basin via the watershed areas of Caddo Lake, Lake O' the Pines and Big Cypress, Little Cypress and Black Cypress bayous.
The Marion County population, as estimated by the Texas State Data Center, was 11,137 as of the Jan. 1, 2005. Jefferson, with 2,003 residents, was the largest incorporated town. Other unincorporated communities include Berea, Gethsemane Community, Gray, Hartzo, Jackson, Kellyville, Lassater, Lodi, Lodwich, Orrs, Potters Point, Prospect, Smithland, Sunview and Warlock.
The county includes Jefferson Independent School District.
1.2
Appraisal District Organization and Staffing
Marion CAD was formed and became active in 1981. As of November 2006, Marion CAD has a total of six full-time staff positions, with two supervisory positions and no part-time positions. Five positions are full-time appraisers. Marion CAD contracts with an external appraisal firm for professional appraisal services of complex properties.
Exhibit 1 presents Marion CAD's current organization.
The board of directors oversees the appraisal district. The chief appraiser reports directly to the board of directors. The administrative assistant (data processor) and the deputy chief appraiser report directly to the chief appraiser. The director of research and two appraisers report directly to the deputy chief appraiser. The CAD is made up of the following personnel: the chief appraiser, the deputy chief appraiser, the director of research, two appraisers and an administrative secretary.
The Marion CAD board of directors has no authority to set values or determine appraisal methods under Property Tax Code Section 6.05(a). The chief appraiser carries out the appraisal district's legal duties, hires its staff, makes appraisals and operates the appraisal office.
Marion CAD provides appraisal services for four taxing units shown in Exhibit 2.
Exhibit 2
Marion CAD Taxing Units
| Name of Taxing Entity |
|---|
| Marion County |
| Jefferson Independent School District |
| City of Jefferson |
| Marion County Hospital District |
Source: Marion CAD, December 2006.
PTD does not track appraisals performed by external appraisers. PTD uses parcel counts reported in the appraisal district's 2005 self-report of value and school district's self-report of value.
PTD includes commercial real and personal property parcels in the calculation, since it cannot determine how many parcels the CAD assigns to the in-house staff versus contracted firms. PTD determined the number of parcels appraised in-house by adding the number of parcels reported in Categories A, Single-Family Residential; B, Multifamily Residential; C, Vacant Lots and Tracts; D1, Qualified Agricultural Land; D2, Non-qualified Land; E, Farm and Ranch Improvements; F1, Commercial Real Property; L1, Commercial Personal Property; M1, Mobile Homes; O, Residential Inventory; and S, Special Inventory.
Exhibit 3 contains Marion CAD parcel counts by property category. It compares Marion CAD's data to the state and group averages. For analytical purposes, PTD groups appraisal districts according to the number of parcels. The Marion CAD is included with appraisal districts that have 20,000 - 24,999 parcels.
Exhibit 3
Reported Data on Parcels and Categories
Comparison to State and Group Averages
Parcel Size Group (by number of locally appraised parcels): 20,000 - 24,999
| Parcels and Categories | Marion | State Average | Group Average |
|---|---|---|---|
| Estimated Number Locally Appraised Parcels | 21,351 | 51,112 | 22,134 |
| Number Taxing Units | 4 | 15 | 11 |
| Estimated Locally Appraised Parcels per Staff | 3,559 | 2,971 | 2,707 |
Composition by Percentage of Value (Self-Report):
| Parcels and Categories | Marion | State Average | Group Average |
|---|---|---|---|
| Residential Value | 33% | 47% | 24% |
| Non-Residential, Mineral | 6% | 4% | 19% |
| Non-Residential, Non- Mineral | 61% | 48% | 57% |
Composition of Locally Appraised Parcel Category (Self-Report):
| Parcels and Categories Parcel Type | Marion Number of Parcels | Marion Percent of Parcels | State Average | Group Average |
|---|---|---|---|---|
| A - Single-Family Residential | 4,817 | 23% | 50% | 30% |
| B - Multifamily Residential | 20 | 0% | 1% | 0% |
| C - Vacant Lots | 8,222 | 39% | 14% | 17% |
| D - Agricultural | 4,804 | 23% | 14% | 29% |
| E - Farm and Ranch Improvements | 973 | 5% | 5% | 11% |
| F1 - Commercial Real | 422 | 2% | 3% | 3% |
| L1 - Commercial Personal | 708 | 3% | 7% | 5% |
| M1 - Mobile Homes | 649 | 3% | 3% | 3% |
| O - Residential Inventory | 736 | 3% | 2% | 1% |
| S - Special Inventory | 0 | 0% | 0% | 0% |
| Total | 21,351 | 100% | 100% | 100% |
Source: Texas Comptroller of Public Accounts, Appraisal District Operations Report (2005 and 2006 Data), September2006 and Appraisal District Self Report of Value, 2005.
Exhibit 4 provides financial and staffing data for the Marion CAD and compares them with other appraisal districts in its group and throughout the state.
Exhibit 4
Reported Budget, Staffing and Training Data
Comparison to State and Group Averages
Financial Information
| Financial and Staffing Information | Marion | State Average | Group Average |
|---|---|---|---|
| 2005 Budget | $446,020 | $1,144,025 | $506,584 |
| 2005 Surplus | $0 | $95,915 | $17,213 |
| 2005 Surplus as Percent of Budget | 0% | 8% | 3% |
| 2006 Budget | $441,100 | $1,200,084 | $534,134 |
| Percent Change in Budget | -1% | 5% | 5% |
| 2005 Budget per Total Parcel | $20.54 | $21.96 | $21.92 |
| 2005 Budget per PTD Estimated Locally Appraised Parcel | $20.89 | $22.38 | $22.89 |
Staffing - 2005 Budget
| Financial and Staffing Information | Marion | State Average | Group Average |
|---|---|---|---|
| Full Time | 6 | 17.20 | 8.18 |
| Supervisory | 2 | 3.33 | 1.82 |
| Supervisory to Staff Ratio | 1:3 | 1:6 | 1:4 |
Chief Appraiser
| Financial and Staffing Information | Marion | State Average | Group Average |
|---|---|---|---|
| Performs Appraisals? | Yes | N/A | N/A |
| 2005 Total Compensation - Actual | $55,000 | $52, 66 | $54,263 |
Appraisers - 2005 Budget
| Financial and Staffing Information | Marion | State Average | Group Average |
|---|---|---|---|
| Appraiser Full Time Equivalent (FTE) Employees | 4 | 6 | 3 |
| Salary Range Low | $22,000 | $25,687 | $25,717 |
| Salary Range High | $33,000 | $39,505 | $34,897 |
| 2005 Training Budget | $3,000 | $9,267 | $5,729 |
| Number Registered with Board of Tax Professional Examiners (BTPE) | 4 | 9.1 | 5.2 |
Source: Texas Comptroller of Public Accounts, Appraisal District Operations Report (2005 and 2006 Data); Marion CAD interim chief appraiser, September 2007.
Exhibit 5 provides operations information for the Marion CAD, state and group.
Exhibit 5
Reported Operations Data
Comparison to State and Group Averages
Reappraisal
| Operations Information | Marion |
|---|---|
| Last Year of Reappraisal | 2005 |
| Next Year of Reappraisal | 2008 |
| Type of Reappraisal: | Mass |
Protests
| Operations Information | Marion | State Average | Group Average |
|---|---|---|---|
| Protests (2005 tax year) | 349 | 3,435 | 429 |
| Protests per Estimated Locally Appraised Parcel | 0.1 | 0.1 | 0.1 |
Collections
| Operations Information | Marion |
|---|---|
| Consolidated Collection | No |
| Collection Budget | 0 |
Geographic Information System (GIS)
| Operations Information | Marion | State Average | Group Average |
|---|---|---|---|
| CAD Has or Plans to Purchase GIS? | Yes | N/A | N/A |
| Percent GIS Complete? | 45% | 49.9% | 58.1% |
Source: Texas Comptroller of Public Accounts, Appraisal District Operations Report (2005 and 2006 Data), September 2006; Marion CAD interim chief appraiser, September 2007.
Based on this comparison, Marion CAD appraised 3,559 parcels-per-full-time employee. According to IAAO's Property Appraisal and Assessment Administration, Chapter 16, Elements of Administration, Staffing Patterns and the Effect of Computerization, the ratio of parcels-per-full-time employees for a small appraisal district typically is between 1,500 and 1,700. For a large appraising entity, these numbers typically are between 3,000 and 3,500.
Workloads in appraisal districts can vary due to considerations other than parcel count. The geographic size of an appraisal district, for instance, may have an impact on the time required to work all parcels, as can the types of properties involved. Complex commercial and some residential properties may require more staff work to appraise. The data given here are meant only to provide the reader with some basis for comparison with other appraisal districts with similar parcel counts.
1.3
Self Evaluation Questionnaire
In preparation for this ASR, Marion CAD was asked to complete the IAAO's Self-Evaluation Questionnaire, which asks the appraisal district to assess its compliance with acceptable procedures, standards and organization. Each appraisal district received an electronic version of the questionnaire and an IAAO manual explaining each question and how to answer them.
Marion CAD answered all of the 111 questions, providing specific, clear and concise responses where necessary. A summary of the self-assessment follows.
In responding to the self-assessment, Marion CAD pointed to certain strengths. Among the identified strengths are these:
- public Web access to information and services;
- a sales questionnaire the CAD uses to verify each sale with a third party source, such as a Multiple Listing Service (MLS) or Realtors;
- numerous sources of information to track business activity; and
- use of electronic deed transfer on CD from a government data records service.
Marion CAD also indicated some areas of concern:
- difficulty obtaining actual sale prices of recent transactions due to lack of full disclosure;
- wage levels high enough to attract personnel with advanced skills and technologies;
- the CAD's subjective approach to depreciation; and
- insufficient commercial property sales to calibrate its cost tables or develop depreciation schedules.
In Chapter 1, which discusses legal issues and assessment cycles, the CAD indicated that it accesses online reports and proposals from attorney groups, the Comptroller's office, Texas Association of Appraisal Districts (TAAD), Texas Association of Assessing Officers (TAAO) and Texas Association of School Boards (TASB). The CAD staff attends the Comptroller's seminars and retains attorneys to monitor state laws regarding property taxes. The CAD also indicated that the lack of full sales disclosure undercuts valuation standards. The CAD said it does not have the resources to hire sufficient full-time, experienced appraisers for all property and must contract with an appraisal services firm.
In Chapter 2, which deals with resources and management, the CAD indicated that limited resources make it necessary to implement modernization, which must be extended over several budget years. The CAD staff has a wide range of experience and technical skills and is cross trained to perform multiple functions. Salaries are not competitive enough to attract sufficient staff with the professional skills needed by the CAD.
In Chapter 3, on computerization, the CAD indicated it has a computer-assisted mass appraisal system (CAMA) and has installed a geographic information system (GIS).
In Chapter 4, which covers mapping, the CAD indicated its GIS cadastral maps show property boundaries, subdivision lines, lot lines and other related details. The names of streets, highways, county farm roads, railroads, rivers and lakes are maintained on these maps. About 60 percent of property boundaries have been added to the GIS.
In Chapter 5, which covers data collection, the CAD indicated it obtains city building permits. The CAD also receives information from a regional utility company for connection listings and uses other sources of information. CAMA and GIS are recent systems acquisitions that help appraisers collect data and perform mass appraisals.
In Chapter 6, which covers land valuation, the CAD indicated that it is hampered by non-disclosure of sale prices in the valuation of property. Marion County has no zoning. CAD staff attempts to determine highest and best use to value land.
In Chapter 7, concerning residential property valuation, the CAD indicated that its CAMA system has the capability to generate comparable reports by selecting multiple criteria. The cost approach is developed locally, but the CAD also uses Marshall and Swift residential cost manuals to review its local tables. Marion County has a large percentage of residential properties that were built in the late 1800s. The cost approach is less reliable for older properties. The CAD has to use a subjective approach to depreciation.
In Chapter 8, regarding commercial property valuation, the CAD indicated that its cost approach is developed locally, but the CAD also uses Marshall and Swift commercial cost manuals to review its local tables. The CAD also stated that Marion County has a large percentage of commercial properties that were built in the late 1800s and that the cost approach is less reliable for older properties. The CAD uses a subjective approach for depreciation. Market data are very limited. Valuation patterns are varied. The CAD develops individual valuation models per property type.
In Chapter 9, which deals with sales data, ratio studies and stratification, the CAD indicated that it mails to each seller and buyer of property a "sales questionnaire." The CAD verifies each sale with a third-party source, such as a MLS or data from local Realtors. The CAD analyzes sales data with the use of spreadsheets to review by value groups. The CAMA package provides summary ratio study statistics recommended by the IAAO.
In Chapter 10, which covers personal property assessment, the CAD indicated that it uses numerous sources of information to track business activity. The CAD monitors whether property owners return the rendition by the deadline through coding in the CAMA system. The CAD uses cost tables to value business personal property because the CAD has not acquired sufficient information on leased equipment to develop gross income multipliers.
In Chapter 11, which deals with assessment administration, the CAD indicated that it obtains deed transfers on CD from a government data records service. This automated process assists in the efficient update of records.
In Chapter 12, regarding defense of values, the CAD indicated its CAMA system has a protest handling package, which allows the CAD to efficiently manage all formal protests. The CAD uses the CAMA system as a means of tracking changes related to protests to ensure all changes are properly recorded.
In Chapter 13, which covers public relations, the CAD indicated that it publishes public notices in a local newspaper to specifically address exemptions, renditions, appraisals, property tax protest and appeal procedures. The CAD holds public hearings on its proposed budget and biennial written reappraisal plan. The chief appraiser communicates with the public through public appearances at community centers and other venues in the community. The CAD provides a Web site and the CAD's e-mail address.
1.4
Findings of the Property Value Study and Summary Worksheets
The PVS determines the total property value for the school district in Marion CAD. With a few notable exceptions, all CADs and PTD are required by law to appraise property at market value according to Government Code Section 403.302 and Property Tax Code Section 23.01. Agricultural land and timberland are appraised according to productivity value. Market value is the price for which a property would sell 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 in its annual self-report. PTD staff estimates the total taxable value in a school district, referred to as the state value, by determining 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 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 informal 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, an informal hearing or a formal hearing. A hearings examiner who is appointed by the Comptroller's general counsel 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.
Despite Jefferson ISD's informal and formal appeals of parcels from the findings of the preliminary PVS, the school district was unable to get into the confidence interval and was certified as an eligible school district in July 2006. In the 2005 PVS, the school district's local value fell outside the confidence interval. The PVS found Jefferson ISD's taxable value to be invalid in 2006, but local value was certified because the ISD is eligible for a second year of the grace period.
In general, a ratio indicates the percentage of market value at which a property or group of properties is being appraised. A ratio of between 0.95 and 1.05 in any property category makes it more likely that the CAD is appraising property at, or near, market value.
Eligible School District
Jefferson ISD was identified as an eligible school district when its local value fell outside of the confidence interval limit determined by the 2005 PVS. Five property categories were tested in Jefferson ISD: Category A, Single-Family Residential; Category D, Rural Real; Category F1, Commercial Real; Category G, Oil, Gas & Minerals; and Category J, Utilities.
Category A, Single-Family Residential, was 44 percent of the total tested values and made up 30 percent of the school district's value. A review of the Category A sample ratios in the 2005 PVS indicates that the CAD appraised from as low as 28 percent to a high of 151 percent of market value, with a weighted mean ratio of 0.7567.
Category D, Rural Real, made up 14 percent of the school district's value and tested with a weighted mean ratio of 0.8565. Category D represents rural properties and contains two subcategories: D1 and D2. Subcategory D1, Qualified Acres, is primarily farm and ranch land that qualifies for the special productivity appraisal. Subcategory D2, Non-Qualifying Acres and Rural Improvements, is primarily rural homes and land that does not qualify as farm, ranch or timberlands. The differences in value between Qualified and Non-Qualified Acres are wide. D1 land is appraised using a special statutory method to determine the land's productivity value, and D2 is based on what the land would sell for in an open-market transaction.
Subcategory D1 comprised 33 percent of Category D's value and 7 percent of the total test values. D1 had a category ratio of 0.9776. Subcategory D2 made up 67 percent of Category D's value and 14 percent of the school district's total tested values. The CAD appraised Non-Qualified Acres and Rural Improvements from as low as 37 percent to a high of 312 percent of market value, with a weighted mean ratio of 0.8075.
Category F1, Commercial Real properties were 14 percent of the school district's value and tested with a weighted mean ratio of 0.9962. The CAD valued Commercial Real property from as low as 74 percent to a high of 142 percent of market value.
Category G, Oil, Gas & Minerals, which was 7 percent of the school district's value, tested with a weighted mean ratio of 1.012. The CAD's external appraiser valued sample minerals properties from as low as 94 percent to a high of 116 percent.
Category J, Utilities, which was 9 percent of the school district's value, tested with a weighted mean ratio of 1.01. The CAD's external appraiser valued Utilities from as low as 80 percent to a high of 104 percent.
Marion CAD Summary
In summary, the Marion CAD's overall median ratio was 0.90 according to the 2005 PVS.
- in Category A, Single-Family Residential, the sample ratios range from 0.27 to 1.51, with a median ratio of 0.81;
- in Category D2, Non-Qualified Acres and Farm and Ranch Improvements, the sample ratios range from 0.37 to 3.12, with a median ratio of 1.00;
- in Category F1, Commercial Real property, the sample ratios range from 0.74 to 1.42, with a median ratio of 0.99;
- in Category G, Oil, Gas & Minerals, the sample ratios range from 0.94 to 1.16, with a median ratio of 0.99; and
- in Category J, Utilities, the sample ratios range from 0.80 to 1.04 with a median of 0.99.
Coefficient of Dispersion
The coefficient of dispersion (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 widely-scattered percentages of market value. However, a COD that is very low may indicate "sales chasing," a form of unequal appraisal. Also, According to IAAO's Standard on Ratio Studies, Category A, Single- Family Residential, generally should be 15 or less, and for new and homogeneous areas, 10 or less. For Category C, Vacant Lots, the COD should be 20 or less, 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 2005 COD for Marion CAD, Category A, was 26.17; Subcategory D2 was 21.79; Category F1, Commercial Real, was 11.83; Category G, Oil, Gas & Minerals was 4.93; and Category J, Utilities, was 5.05.
The 2005 COD for Jefferson ISD Category A was 26.17; Category D2 was 21.79; Category F1 was 11.83; Category G was 4.93; and Category J was 5.05.
The COD data indicate that Marion CAD's sample appraisal-sales ratios lack uniformity in Category A, Single-Family Residential, and Subcategory D2, Non-Qualified Acres and Rural Improvements, on the 2005 PVS.