Appraisal Standards Review
Mason County Appraisal District Follow-Up Report
October 2007
Introduction
In July 2004, Mason Independent School District (ISD), in Mason County, was identified as one of 54 school districts in the state meeting the criteria that initiate an Appraisal Standards Review (ASR) of the county appraisal district (CAD) that serves it. In July 2005, the Comptroller’s Property Tax Division (PTD) released the results of the ASR of Mason CAD. The report made eight recommendations to improve Mason CAD’s appraisal practices and operations.
ASRs determine why the Comptroller’s property value study found local value invalid and recommend changes in operations and management that would improve appraisal practices. The Mason CAD review evaluated five functional areas: board of directors; appraisal district policies, procedures and operations; information processing systems; staffing, personnel qualifications and positions; and generally accepted appraisal practices, equality and uniformity of appraisal standards.
Property Tax Code Section 5.102(d) requires that if the appraisal district fails to comply with the recommendations in the report and the Comptroller finds that the board of directors of the appraisal district failed to take remedial action before the first anniversary of the date the report was issued, then the Comptroller must notify the judge(s) of each district court in the county for which the appraisal district is established. The judge must appoint a five-member board of conservators to implement the recommendations. The board of conservators exercises supervision and control over the operations of the appraisal district until the Comptroller determines each school district for which the appraisal district appraises property has the same taxable value as the local value for the school district in the same year. The appraisal district shall bear the costs related to the supervision and control of the district by the board of conservators.
For the one-year follow-up report, an appraisal district complies with the statute if it takes remedial action to implement the recommendations in the ASR. The CAD generally demonstrates remedial action by having implemented or nearly completed most of the recommendations by the first year anniversary of the release of the report. The Comptroller recognizes that some recommendations included in ASRs will require more than a year to implement. Some ASRs include more recommendations than a CAD with limited resources can implement within a year. As long as the CAD is working to implement the recommendations, the Comptroller will continue to work with the CAD to achieve full compliance. CADs that have completed all recommendations by the one-year anniversary will not require additional monitoring.
PTD sent the CAD’s board members surveys soliciting their views and comments on the ASR. PTD received one response. The board member agreed that the ASR contained information that was useful to the CAD, but disagreed that CAD administration had done a good job of communicating the status of recommendations to the board. The board member also disagreed that the board and CAD administration are working together to accomplish the recommendations. The board member feels the most significant recommendation contained in the report concerns developing office procedures, and the most significant challenge remaining in the CAD is an inexperienced staff. The most difficult decision faced by this board member was the hiring of an outside appraisal firm. The board chairman stated he had received the survey, but did not return it because he did not have any issues with the ASR.
At the time of the review, the challenges facing Mason CAD included documenting procedures, maintaining records and planning reappraisals. PTD believes Mason CAD has not completed all the recommendations. PTD will continue to monitor the CAD’s progress toward full implementation.
History and Significant Events
Mason CAD received an ASR because the PVS found Mason ISD’s property values to be invalid. The school district was eligible for the grace period provided in Government Code Section 403.3011. Within Mason ISD, property values in Category A, Single-Family Residential; Category D, Rural Real; and Category F1, Commercial, all fell outside the state’s acceptable value range. According to the chief appraiser, before the certification of 2003 appraisal records, values had not been updated in several years, even though Mason County’s real estate was rising in value.
The CAD’s reappraisal efforts in 2004 and 2005 produced positive results. Mason ISD received local value in the final 2004 and 2005 PVS. The CAD received invalid findings in the preliminary results of the 2006 PVS; however, the CAD successfully appealed these findings and then had local value.
The results of both the 2004 and the 2005 PVS indicate that Mason CAD has improved its appraisal practices, but it still faces challenges in documenting these practices and procedures. Until it can provide written documentation as to how it performs the recommended tasks, the Comptroller cannot consider it in compliance with the report’s recommendations.
What Remains to Be Done
The Appendix lists the ASR’s eight recommendations and summarizes the CAD’s remedial actions to date. The Comptroller acknowledges the work the CAD has performed over the last year and encourages it to remain on task. The chief appraiser indicated that limited time and staffing have been major factors preventing the completion of each recommendation within the past year.
Mason CAD has completed five of the ASR’s recommendations and has documented progress on one recommendation. Two recommendations remain unimplemented, and the CAD could not provide documentation outlining how it plans to implement them.
Recommendation 2: Develop a comprehensive policy and procedures manual for the appraisal district operations.
The CAD has not acted on this recommendation. The chief appraiser attributed this to a lack of time and staffing. Since April 2006, the CAD has had a staff of three: the chief appraiser, a bookkeeper and the receptionist/tax clerk. None of these staff members has been with the CAD for more than three years. The current staff, while dedicated and hard working, would benefit greatly from written policies and procedures. Knowing how the CAD performs its varied tasks would also benefit taxpayers and taxing entities.
In a review of the follow-up report, the chief appraiser asked for and was sent a copy of the Hidalgo CAD procedures manual to use as an example and foundation for developing a policy and procedures manual.
To complete this recommendation, the CAD should mail a copy of the operations manual to PTD no later than March 31, 2008.
Recommendation 3: Maintain documentation showing when the appraisal records were submitted to the appraisal review board (ARB), changes made by the ARB, and copies of all required advertised applications and notices.
According to the chief appraiser, Mason CAD mailed about 7,000 appraisal notices in 2005 and 4,500 in 2006. Each contained a protest form and a copy of the Comptroller’s How to Protest guidelines. The chief appraiser said the CAD failed to publish notices to taxpayers of their right to protest, as required by Property Tax Code Section 41.41(b). He said he was not aware of the requirement, but would comply in May 2007 by publishing the notices in the Mason County News newspaper. The CAD did not provide the published notice.
In May 2005, the CAD mailed appraisal notices and the chief appraiser prepared a binder to keep copies of appraisal review board meeting notices, minutes (including board orders) and roll certifications.
Although the CAD’s documentation has improved, the ARB is not approving and certifying appraisal rolls by the dates specified in the Property Tax Code. Section 41.12(a) states that the ARB must approve the rolls by July 20 of each year, and Section 26.01(a) states that certification must occur by July 25.
Mason CAD gave all taxing entities written notices of their 2005 certified appraisal rolls on Aug. 19, 2005. Each entity was required to acknowledge receipt of the notice. The chief appraiser said the growth of Mason County and limited staffing caused it to miss the statutory deadlines.
Furthermore, the chief appraiser did not certify an estimate of taxable value to Mason ISD by June 7 in 2005 or 2006, as required by Property Tax Code Section 26.01(e), but said he provided this information to the school superintendent informally when it was requested.
The chief appraiser said the school superintendent typically contacts him in May or June for preliminary tax information to use in preparing the school’s budget. The superintendent said he hoped that by hiring contract appraisers, the CAD would be able to certify school district values in a timelier manner. The chief appraiser said he would issue formal certifications of estimated value to Mason ISD in June 2007.
The appraisal review board met three times in 2005, on Aug. 3, 17 and 19. Each meeting was publicly posted with the county clerk, the Secretary of State’s office and at the CAD office. The ARB tape-recorded its meetings and kept written minutes. The Aug. 3, 2005, minutes indicate 10 taxpayers appeared before the ARB and the ARB took actions on 12 accounts. On Aug. 17, 2005, the ARB met with three taxpayers concerning two accounts. On Aug. 19, 2005, the ARB met to approve and certify the 2005 appraisal records. Minutes of the meeting show the board met with 12 taxpayers and took action on 12 accounts.
The 2006 ARB met for the first time on June 26, 2006. Notices of the meeting were posted properly. According to the chief appraiser, the next meeting of the ARB was held on Aug. 2, 2006.
In May 2005, the chief appraiser began keeping notices, minutes, board actions and roll certifications in ringed binders. The CAD’s failure to maintain documentation showing compliance with Property Tax Code Sections 26.01(a) and 41.12(a), however, prevents PTD from considering this recommendation complete.
To complete this recommendation, the chief appraiser and ARB should maintain its documentation procedures; notify all taxpayers of their right to protest in 2007 according to Property Tax Code Section 41.41(b); and approve and certify future appraisal rolls according to Property Tax Code Sections 26.01(a) and 41.12(a).
The CAD should send copies of documents to the Comptroller’s office showing the 2007 approved and certified appraisal roll as soon as the tax roll has been approved and certified. The CAD should also send documentation showing completion of this recommendation and compliance with applicable provisions of the Property Tax Code by Dec. 31, 2007.
Recommendation 4: Develop specific procedures for using the full capabilities of the appraisal software.
According to the chief appraiser, changes in CAD personnel and their lack of training on the automated appraisal system prevented implementation of this recommendation. The chief appraiser is the only appraiser on the Mason CAD staff and he has not received much training on the CAD’s automated appraisal system since his hiring in July 2003. The chief appraiser has relied on the software vendor to generate many state-required reports.
In June 2006, the CAD contracted with an appraisal firm to appraise all property in the county over a three-year period. During the on-site visit for the follow-up report, the chief appraiser indicated he plans to ask the vendor to train CAD staff on the appraisal system. In conjunction with the training, the chief appraiser plans to develop procedures for using all of the system’s appraisal capabilities. Initially, the chief appraiser had hoped to accomplish this by the end of 2007, after completing a full appraisal cycle. Upon review of the follow-up draft, the chief appraiser changed the date of accomplishment to 2009, expressed a lack of confidence in any such training, and pointed out that the CAD’s “learning is and will continue to be a work in progress.”
Mason CAD staff continues to enter sales information into the appraisal system, but the CAD is not generating ratio studies, though it has the data and the means to do so. The chief appraiser should begin generating ratio studies and analyzing their results. Ratio studies are essential to the appraisal process and can be used for internal quality control. According to the chief appraiser, this is a computer application he hopes to learn more about in the coming months.
To complete this recommendation, the CAD should expedite the development of specific procedures for using all of the system’s capabilities. The CAD should enlist the vendor’s help in documenting these procedures and send a copy, along with locally generated ratio studies, to PTD no later than Dec. 31, 2007.
Appendix
Mason County Appraisal District Appraisal Standards Review Implementation Status
2.1 Board of Directors
| Rec. # | Recommendation | Implementation Status | If not Complete, Projected Completion Date | Description of Actions taken to Date |
|---|---|---|---|---|
| 1 | Develop a job description and an objective set of evaluation measures for the chief appraiser position, establish an annual evaluation process and evaluate the chief appraiser annually. |
Complete |
|
The chief appraiser contacted several CADs in January 2006 for copies of chief appraiser job descriptions and evaluation documents. The written evaluation instrument provided by the chief appraiser has job responsibilities in a section titled performance planning. The chief appraiser also supplied board minutes dated Jan. 10, 2007, indicating that the board had evaluated the chief appraiser. |
2.2 Appraisal District Policies, Procedures and Operations
| Rec. # | Recommendation | Implementation Status | If not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 2 | Develop a comprehensive policy and procedures manual for the appraisal district operations. |
Not Implemented |
March 31, 2008 |
The chief appraiser stated he lacked the time needed to conduct timely work on this recommendation. He hopes to accomplish it within the next year. The manual will include written procedures for all CAD operations, such as payroll, accounts payable and purchasing, as well as existing board and personnel policies. |
| 3 |
Maintain documentation showing when appraisal records are submitted to the ARB; changes made by the ARB; and copies of all required advertised applications and notices. |
In Progress |
Dec. 31, 2007 |
The chief appraiser did not certify an estimate of taxable value by June 7 to Mason ISD for 2005 or 2006. All taxing entities were given written notices of their 2005 certified appraisal rolls on Aug. 19, 2005. The chief appraiser was not aware of the requirement. The 2006 ARB met for the first time on June 26, 2006. Notice of the meeting was posted. |
2.3 Information Processing Systems
| Rec. # | Recommendation | Implementation Status | If not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 4 | Develop specific procedures for using the full capabilities of the appraisal software. |
Not Implemented |
Dec. 31, 2007 |
Lack of training has prevented the implementation of this recommendation. The chief appraiser is the CAD’s only appraiser. He has not received much training on the automated appraisal system. He relies on the software vendor to generate required reports. The chief appraiser expects the contractor to explain how it uses all of the appraisal software capabilities and to have these procedures documented by the end of next year’s appraisal work in May 2007. |
2.4 Staffing, Personnel Qualifications and Positions
| Rec. # | Recommendation | Implementation Status | If not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 5 |
Begin the process to perform employee evaluations as outlined in the Mason CAD personnel policy. |
Complete |
|
The chief was able to evaluate one staff member on March 16, 2006. The other staff member has not completed a full year of employment with the CAD. The chief appraiser said that staff members will be evaluated annually. |
2.5 Generally Accepted Appraisal Practices; Equality and Uniformity of Appraisal Standard
| Rec. # | Recommendation | Implementation Status | If not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 6 |
Draft and adopt a comprehensive reappraisal plan to guide the district in the future. |
Complete |
|
A written reappraisal plan for 2007-08 was approved by the board of directors and filed with PTD in compliance with Property Tax Code Section 6.05(i). Mason CAD reappraised the city of Mason in 2005.The total 2005 certified market value in the City of Mason rose by 26.5 percent over the 2004 certified market value. Mason ISD received local value in 2004 and 2005. Mason CAD also reappraised rural land values and many commercial properties in 2004. In June 2006, the board contracted with an appraisal firm for the appraisal of all property in Mason County over a three-year period from 2007 through 2009. |
| 7 |
Develop and implement district policies and procedures for granting or denying agriculture use exemptions. |
Complete |
|
In August 2005, the chief appraiser appointed an agricultural advisory board, as required by Property Tax Code Section 6.12. The eight-member board was charged with developing policies and procedures and a manual for granting or denying agricultural use exemptions before the end of 2006. The chief appraiser indicated Mason CAD has policies and procedures for agricultural use exemptions. |
| 8 |
Create and/or update existing property classification and appraisal procedure manuals for each type of property necessary. |
Complete |
|
In June 2006, the board contracted with an appraisal firm to appraise all real property in Mason County over a three-year period. The CAD will enlist the appraisal firm’s help in developing a classification guide before appraisal work begins in 2007. In addition to improving appraisal records, characteristics and descriptions should be rewritten. According to the chief appraiser, properties appraised in 2005 were photographed and the photos were uploaded in to the CAD’s automated appraisal system. Mason CAD has found an alternative solution to this recommendation by contracting for the following procedures: appraisal of all real property; changes to legal descriptions of all real property; appearing before the ARB when necessary; and making all appraisal information available to the CAD. |