Overview of County Appraisal District
County History and Demographics
According to the Handbook of Texas, McMullen County was formed in 1858 and was formed from parts of Bexar, Atascosa and Live Oak counties.
McMullen County is in southern Texas surrounded by Atascosa, Live Oak, Duval, and La Salle counties. McMullen County was named for John McMullen, the Irish empresario.
Livestock and livestock products accounted for 93 percent of its agricultural income. Mineral resources include uranium, salt domes, sand and gravel, oil, natural gas, and lignite coal.
The population of the county for 2003, according to the County Information Project, was 868 residents. The county comprises 1,159 square miles of usually flat to rolling terrain covered with mesquite, scrub brush, cacti, chaparral, and grasses.
According to the County Information Project, the median per capita income is $29,107, and 12.9 percent of the population lives at or below the poverty level.
Tilden, the county's largest town and the county seat, is in the north central part of the county at the intersection of State highways 72 and 16.
The county has one school district: McMullen County Independent School District.
Appraisal District Organization and Staffing
The appraisal district was formed in 1981 and became active in 1982. McMullen CAD has 5 part time employees. The chief appraiser is employed part time as an appraiser for real and personal property. In addition, four county employees perform part time clerical duties for the CAD. One of the county employees is also the elected County Treasurer. The district contracts with Thos Y. Pickett & Co. for professional appraisal services on mineral, utility, and industrial appraisals.
McMullen County Appraisal District Organization
Board of Directors Elaine Franklin, Chair Mary K. Edwards Walt Franklin Maximo Quintanilla Karen Wheeler McMullen CAD Staff Jessie L. Bryan, part time Chief Appraiser Donald Haynes, part time County Treasurer,
McMullen CAD data entry clerk
Bonnie Koonce, part time County Deputy Tax Assessor-Collector,
McMullen CAD clerk
Becky Martin, part time County Tax Office Clerk,
McMullen CAD clerk
Janie Varga, part time County Judge Secretary,
McMullen CAD deed clerk
Source: McMullen CAD, April 2005.
Scope of Office
The Board of directors has no authority to set values or appraisal methods. The board hires the chief appraiser. In the McMullen CAD, the chief appraiser is a part time employee responsible for appraising real and personal property. He has limited administrative duties and has no control over the district's budget.
The appraisal district is responsible for appraising 9,650 parcels of real, mineral and personal properties located within the boundaries of the district. This includes 4,994 mineral property accounts, 226 industrial/utility accounts, and 15 parcels of business personal property.
The district provides appraisal services for four taxing units, including McMullen County, McMullen County Independent School District, McMullen Ground Water District and McMullen Water Control and Improvement District #1.
Exhibit 2 presents the types of properties appraised by McMullen CAD in tax year 2003. In-house staff handles all property categories except minerals, industrial, utility and personal property.
McMullen 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 w/Impr. In house staff Category F1 Commercial Real In house staff Category L1 Commercial Personal In house staff Category G Minerals Commercial appraisal firm Category J Utilities Commercial appraisal firm Category F2 Industrial Real Commercial appraisal firm Category L2 Industrial Personal Commercial appraisal firm Source: McMullen County Appraisal District, April, 2005.
Most appraisal districts contract out some of its appraisal to contract appraisal firms. PTD does not track parcel counts appraised by external appraisers in appraisal districts. Appraisal district contracts with external appraisers routinely do not include a parcel count for the number of appraisals an external appraisal company will perform. In assessing the staff to parcel count ratio in each appraisal district, PTD uses parcel counts reported in the district's 2003 independent school district self report to calculate the parcels per appraisal district staff. PTD does include all of the commercial real and personal property parcels in the calculation, since PTD is unable to determine exactly how many parcels are assigned to in-house staff versus a contract appraisal firm. The total parcels appraised in-house are calculated by summing the total number of parcels reported in Categories: A, single family residential; B, multifamily residential; C, vacant lots; D, rural land; E, rural improvements; F1, commercial property; L1, personal property; M1, mobile homes; O, residential inventory; and S, special inventory, as shown in Exhibit 3 below.
PTD estimated that McMullen CAD staff are responsible for appraising about 4,246 parcels. The International Association of Assessing Officer (IAAO) Standards state that small taxing units run from 1,500 to 1,700 parcels per staff member and large taxing units run from 3,000 to 3,500 parcels per staff member with an average of 2,500. In terms of residential appraisal, McMullen is atypical because it has just 512 residential properties with improvements, far fewer than just about all counties in the state. McMullen also does a complete reappraisal of all property once every four years. The Tax Code requires property to be appraised every three years.
Comparable districts in size to McMullen are Reagan, Motley, Irion and Briscoe. The number of parcels per staff member for McMullen CAD was 4,246. Reagan CAD was 1,825, Motley CAD was 2,197, Irion CAD was 3,791 and Briscoe was 1,646. Workloads in appraisal districts may vary, sometimes drastically, due to any number of considerations other than parcel count. Geography or the size of an appraisal district may have a significant impact on the time required to work all parcels. The types of properties may also have an impact. More complex commercial and sometime even residential properties may require more staff to appraise. The data given here is meant to give the reader at least some comparison to other appraisal districts with similar parcel counts and the standards outlined by IAAO.
Exhibit 3 includes reported data concerning CAD and state and group averages.
Reported Data On Parcels, Categories Staffing, Training And Operations
Comparison to State and Group Averages
General Information McMullen State Avg. Group Avg. Parcel Size Group (by number of locally appraised parcels) <5,000 Estimated # Locally Appraised Parcels 4,246 55,463 3,404 # Taxing Units 4 15 4 Locally Appraised Parcels to Staff 4,246 3,404 2,431 2003 Composition by Percentage
of Value (Self Report):
McMullen State Avg. Group Avg. Residential Value 2.9% 52.6% 5.7% Non-Residential, Non Mineral 66.3% 43.6% 45.9% Non-Residential, Mineral 30.8% 3.7% 48.4% 2003 Composition by Account Category Type (Operations Survey): Real Property 4,415 45,804 4,154 Mineral Property 5,220 13,536 8,978 Business Personal Property 15 4,689 228 Individual Personal Property 0 1,342 370 Total Accounts 9,650 65,372 13,730 2003 Composition by Locally Appraised Parcel Category (Estimated from Self Report): McMullen State Avg. Group Avg. Parcel Type # Parcels % of Parcels A 214 5.0% 44.1% 17.4% B 0 0.0% 1.0% 0.1% C 529 12.5% 13.1% 11.6% D 3,073 72.4% 24.7% 53.8% E 298 7.0% 4.5% 10.1% F1 44 1.0% 3.1% 3.1% L1 35 0.8% 5.7% 2.5% M1 53 1.2% 2.2% 1.3% O 0 0.0% 1.4% 0.0% S 0 0.0% 0.1% 0.0% Total 4,246 100.0% 100.0% 100.0% Financial and Staffing
Information (Operations Survey)
McMullen State Avg. Group Avg. 2003 Budget $135,204 $1,079,695 $102,721 2003 Surplus $964 $71,620 $13,455 2003 Surplus as % of Budget 0.7% 6.6% 13.1% 2004 Budget $104,964 $1,104,961 $106,343 % Change in Budget -28.8% $0 3.5% 2004 Budget per Total Local Parcel $24.72 $19.92 $31.24 Staffing Full Time 1 18 2 Part Time 4 2 2 Supervisory 1 3 1 Programmers * 2 0 Supervisory to Staff Ratio 1:1 1:5 1:2 Chief Appraiser Performs Appraisals? Yes 2004 Total Compensation $4,800 $53,564 $25,187 Appraisers Full - Time * 8 2 Part - Time * 0 2 Salary Range: Low * $24,504 $21,600 High * $37,521 $21,788 Training Budget $1,000 $8,832 $1,890 # Registered with BTPE (1) 1 9 2 Types of BTPE Certification RPA (2) RTA (3) RTC (4) All 1 0 0 0 Operations Information
McMullen State Avg. Group Avg. Reappraisal Last Year of Reappraisal 2003 Next Year of Reappraisal 2007 Type of Appraisal: Complete Method of Appraisal: Combination Protests 26 3,131 20 Protests per Parcel 0.3% 4.7% 0.1% Consolidated Collection No Collection Budget $0 Geographic Information System (GIS)? * Percent GIS Complete * 80% 93% Board of Directors Members 5 6 6 Tax Assessor Votes? Yes Elected Members 3 3 3
Note: An asterisk (*) is shown where data was not reported.
Source: McMullen CAD 2003 Self Report and Comptroller 2003-2004 Appraisal District Operations Report and Comptroller comparative data for state and group averages from district self reports and the Appraisal District Operations Report.
Notes: (1) BTPE - Board of Professional Tax Examiners. (2) RPA - Registered Professional Appraiser.
(3) RTA - Registered Tax Assessor-Collector. (4) RTC - Registered Texas Collector.
In preparation for the Appraisal Standards Review, McMullen CAD was requested 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 receives an electronic version of the question 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.
McMullen County answered 110 out of 110 questions. The district gave careful consideration to each question and their answers are included in Appendix 15.
In Chapter 1, on legal issues and assessment cycles, the chief appraiser noted he is a part time employee without staff assistance.
In Chapter 2, on resource management, the chief appraiser noted he does not have an office, the CAD does no formal planning and funding is not adequate.
Chapter 3, on computerization, and Chapter 4, mapping, the district does not have a computer and the chief appraiser keeps CAD data on his personal PC. Almost all of the questions in this section were answered no, including that the district has limited maps and no geographic information system.
In Chapter 5, data collection, the district noted all properties are inspected once every four years.
Land Evaluation, Chapter 6, the district noted that land sales are confirmed, but there is not much commercial activity. In Chapters 7, 8, and 9, on residential property valuation, commercial property valuation, and sales data, respectively, the district answered no to most of the questions and said the only valuation method it use is the cost approach.
In Chapter 10, on personal property assessment, the district uses state forms for rendered property. The district noted there is not much business activity in the county.
In Chapter 11, on assessment administration, the district updates ownership and legal descriptions, whenever possible, within 30 days. The district noted in Chapter 12, defense of values, that the protest process is informal, although they do have an appraisal review board. They do not seek out assistance on complex valuations.
In public relations, Chapter 13, the district relies on the chief appraiser as the district liaison to the community.
Findings of the Property Value Study and Summary Worksheets
The Property Value Study (PVS) determines the total property value in each school district in the McMullen CAD. 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, the loss between market value and productivity value 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.
When conducting the property value study, PTD assigns properties to various categories, such as residential, commercial and rural property. Properties are divided into categories so that like properties are assessed together.
McMullen CAD did not appeal the findings of the preliminary study. McMullen County ISD did not appeal the findings of the preliminary study.
A review of the school district in the county indicates that McMullen CAD is consistently appraising farm and ranch land below market value, as determined by the PTD. Category D represents rural properties and contains two subcategories: D1 and D2. Subcategory D1, Productivity Value of Qualifying Acres, is primarily farm and ranch land that qualifies for the special productivity appraisal. Subcategory D2, Non-Qualifying Acres and Farm and Ranch Improvements, is primarily rural homes and land that does not qualify for farming or ranching or timberlands. The differences in value between qualified and non-qualified rural land are often wide since D1 land is appraised using a special statutory method to determine the lands productivity value and D2 is based on what the land would sell for in an open market transaction.
There are three property categories tested in McMullen County ISD: (1) category D, Rural Real, making up 16.3 percent of the districts value with a weighted mean ratio of .7426; (2) category G, Minerals, making up 63 percent of the districts value with a weighted mean ratio of .9832; and (3) category J, Utilities, making up 13.2 percent of the districts value with a weighted mean ratio of 1.0560. In general, a ratio of between .95 and 1.05 in any property category makes it more likely that the district is appraising property within the margin of error, or that it is appraising property at or near market value, according to the PVS. The low ratio in subcategory D1 drops the district outside the margin of error causing the school district to be identified as eligible.
McMullen County ISD's Category D tested below the margin of error with a weighted mean ratio of .7426 and is the primary reason that the school's values are not within the acceptable range determined by the study. McMullen County ISD's subcategory D1 makes up 58.7 percent of category D's value and 12 percent of the tested value. D1 received a weighted mean ratio of .6586. Subcategory D2 makes up 41.3 percent of category D's value and 8 percent of the school district's total tested value. D2 received a weighted mean ratio of .9069. Category G, and category J are within the margin of error limits.
There are no other school districts in McMullen County.
In summary, McMullen CAD is appraising category D, Rural Real, at below market value and at an incorrect productivity value. McMullen County ISD fell outside the margin of error causing the school district to be identified as eligible. Category D1 was the major factor causing the Property Tax Division to assign McMullen County ISD a finding of invalid.
For a statistical explanation of why the district was selected as eligible, see Appendix 18.