Chapter 1
Overview of County Appraisal District
1.1
County History and Demographics
According to the Handbook of Texas Online, Morris County is located in the northeastern corner of Texas, one county away from the northern state border, and one county away from the eastern border of the state. The county's boundaries were marked from Titus County in 1875. Titus County bounds Morris County on the west, Cass County on the east, Red River and Bowie Counties on the north and Camp County on the south. The county seat is Daingerfield, located 50 miles southwest of Texarkana, at the intersection of U.S. Highway 259 and Texas Highway 49.
Morris County comprises an area of about 164,000 acres, with approximately 25 percent deemed to be excellent farmland.
The Morris County population, according to the Texas State Data Center, was 13,129 as of the Jan. 1, 2005 County Population Estimate. Population centers include the city of Daingerfield, with 2,488 residents; the city of Lone Star, with 1,593 residents; the city of Naples, 1,365 residents; and the city of Omaha, with 1,001 residents. The county's remaining population resides in a number of small towns and unincorporated areas.
The county includes a portion of the Daingerfield-Lone Star Independent School District, which it shares with Titus CAD.
1.2
Appraisal District Organization and Staffing
Morris CAD formed in 1980 and became active in 1981. As of November 2006, Morris CAD had five full-time staff positions, with one supervisory position. Two positions are full-time appraisers. Morris CAD contracts with a professional appraisal services firm for the appraisal of mineral and technical properties.
The board of directors oversees the appraisal district. The chief appraiser reports directly to the board of directors. From the appraisal side of operations, the appraiser/data entry clerk, appraiser/system operator and mapping/deed research technician report directly to the chief appraiser. From the collections side of operations, the collections office manager and the collections file clerk report directly to the chief appraiser, who is also a licensed tax assessor-collector (Exhibit 1).
The Morris CAD board has no authority to set values or determine appraisal methods under Property Tax Code Sections 6.05(a) and 25.01. The chief appraiser carries out the appraisal district's legal duties, hires its staff, performs appraisals and manages the appraisal office.
Morris CAD provides appraisal services for the seven taxing units named in Exhibit 2.
Exhibit 2
Morris CAD Taxing Units
| Name of Taxing Entity |
|---|
| Morris County |
|
Daingerfield-Lone Star Independent School District (split with Titus CAD) |
|
Northeast Texas Community College District (split with Camp, Titus CADs) |
| City of Daingerfield |
| City of Lone Star |
| City of Naples |
| City of Omaha |
Source: Morris CAD, 2006.
PTD does not track appraisals performed by external appraisers. It uses parcel counts reported in the appraisal and school district's 2005 Self-Report.
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; D1, Qualified Agricultural Acres; 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.
For analytical purposes, PTD groups appraisal districts according to the number of parcels. Morris CAD is included with appraisal districts that have 10,000 - 14,999 parcels. Exhibit 3 compares Morris CAD's data with the state and group averages.
Exhibit 3
Reported Data on Parcels and Categories Comparison to State and Group Averages
Parcel Size Group: 10,000 - 14,999
| Parcels and Categories | Morris | State Average | Group Average |
|---|---|---|---|
| Estimated Number Locally Appraised Parcels | 10,778 | 51,112 | 12,388 |
| Number Taxing Units | 7 | 15 | 8 |
| Estimated Locally Appraised Parcels per Staff | 2,155 | 2,971 | 2,468 |
Composition by Percentage of Value (Self-Report):
| Parcels and Categories | Morris | State Average | Group Average |
|---|---|---|---|
| Residential Value | 35.0% | 47.4% | 16.3% |
| Non-Residential, Non-Mineral | 0.0% | 4.3% | 33.6% |
| Non-Residential, Mineral | 65.0% | 48.3% | 50.0% |
Composition of Locally Appraised Parcel Category (Self-Report):
| Parcel Type | Number of Morris Parcels | Percent of Morris Parcels | Percent of State Parcels | Percent of Group Parcels |
|---|---|---|---|---|
| A - Single-Family Residential | 3,964 | 36.8% | 50.2% | 27.8% |
| B - Multifamily Residential | 37 | 0.3% | 1.2% | 0.3% |
| C - Vacant Lots | 1,282 | 11.9% | 14.3% | 14.9% |
| D - Agricultural | 1,707 | 15.8% | 14.3% | 35.2% |
| E - Farm and Ranch Improvements | 2,206 | 20.5% | 5.3% | 12.3% |
| F1 - Commercial Real | 443 | 4.1% | 3.5% | 3.4% |
| L1 - Commercial Personal | 731 | 6.8% | 6.8% | 3.8% |
| M1 - Mobile Homes | 396 | 3.7% | 2.6% | 2.0% |
| O - Residential Inventory | 0 | 0.0% | 1.8% | 0.3% |
| S - Special Inventory | 12 | 0.1% | 0.1% | 0.1% |
| Total | 10,778 | 100.0% | 100.0% | 100.0% |
Note: Totals may not add to 100% due to rounding.
Source:
Texas Comptroller of Public Accounts, Appraisal District Operations Report (2005 and 2006 Data) and Appraisal District Self Report of Value, 2005.
Exhibit 4 provides financial and staffing data for Morris 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 Information | Morris | State Average | Group Average |
|---|---|---|---|
| 2005 Budget | $381,585 | $1,144,025 | $290,100 |
| 2005 Surplus | $42,580 | $95,915 | $42,184 |
| 2005 Surplus as Percent of Budget | 11.2% | 8.4% | 14.5% |
| 2006 Budget | $393,545 | $1,200,084 | $306,184 |
| Percent Change in Budget | 3.1% | 4.9% | 5.5% |
| 2005 Budget per Total Parcel | $33.45 | $21.96 | $22.30 |
| 2005 Budget per PTD Estimated Locally Appraised Parcel | $35.40 | $22.38 | $23.42 |
Staffing - 2005 Budget
| Staffing Information | Morris | State Average | Group Average |
|---|---|---|---|
| Full Time | 6 | 17.2 | 5 |
| Supervisory | 1 | 3.3 | 1.7 |
| Supervisory to Staff Ratio | 1:6 | 1:6 | 1:3 |
Chief Appraiser
| Financial and Staffing Information | Morris | State Average | Group Average |
|---|---|---|---|
| Performs Appraisals? | No | N/A | N/A |
| 2005 Total Compensation - Actual | $43,411 | $52,766 | $43,446 |
Appraisers
| Appraisers - 2005 Budget | Morris | State Average | Group Average |
|---|---|---|---|
| Appraiser Full Time Equivalent (FTE) Employees | 2 | 6 | 2 |
| Salary Range - Low | $28,710 | $25,687 | $26,857 |
| Salary Range - High | $40,251 | $39,505 | $31,004 |
| 2004 Training Budget | $5,000 | $9,267 | $5,597 |
| Number Registered with Board of Tax Professional Examiners (BTPE) | 5 | 9 | 4 |
Source: Texas Comptroller of Public Accounts, Appraisal District Operations Report (2005 and 2006 Data).
Exhibit 5 provides operations information for Morris CAD, state and group.
Exhibit 5
Reported Operations Data Comparison to State and Group Averages
Reappraisal
| Operations Information | Morris |
|---|---|
| Last Year of Reappraisal | 2005 |
| Next Year of Reappraisal | 2007 |
| Type of Reappraisal | Not available. |
Protests
| Operations Information | Morris | State Average | Group Average |
|---|---|---|---|
| Protests (2005 tax year) | 94 | 3,435 | 143 |
| Protests per Estimated Locally Appraised Parcel | 0.0 | 0.1 | 0.0 |
Collections
| Operations Information | Morris |
|---|---|
| Consolidated Collection | Yes |
| Collections Budget | $69,276 |
Geographic Information System (GIS)
| Operations Information | Morris | State Average | Group Average |
|---|---|---|---|
| District Has or Plans to Purchase GIS? | Yes | N/A | N/A |
| Percent GIS Complete? | 100.0% | 49.9% | 37.4% |
Source: Texas Comptroller of Public Accounts, Appraisal District Operations Report (2005 and 2006 Data).
Based on this comparison, Morris CAD appraised 2,155 parcels per position. According to the 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 should be between 1,500 and 1,700. For a large appraising entity, these numbers should be between 3,000 and 3,500.
Workloads in appraisal districts can vary due to any number of 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, Morris 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.
The Morris CAD answered all of the 111 questions, providing specific and clear concise responses where necessary. A summary of the self-assessment follows. The CAD's complete responses are in Appendix 7.
In responding to the self-assessment, Morris CAD pointed to certain strengths. Among the identified strengths are:
- having qualified, long-term employees who are cross-trained and work well together;
- a good relationship with taxing units; and
- a complete set of maps for the county.
Morris CAD also indicated some areas of concern, including:
- limited sales data;
- lack of an integrated mapping system; and
- personal property valuation.
In Chapter 1, which discusses legal issues and assessment cycles, the CAD indicated that it keeps current with legislative proposals, laws and court decisions by receiving updates from legal sources such as attorneys, organizations and attending various seminars. The CAD agreed that the law requires general uniformity in property taxation but provides for various special appraisals that lower market values. The CAD mentioned that the 10 percent cap on homestead properties is difficult to explain to taxpayers. The CAD expressed that not having mandatory sales disclosure is an obstacle in accurately reflecting market values. The chief appraiser indicated that, even though Morris CAD is a small appraisal district, it incurs many of the same expenses as a larger metro district, which causes the CAD budget to reflect a higher cost-per-parcel when compared to other appraisal districts.
In Chapter 2, which deals with resources and management, the CAD indicated that it engages in formal planning and develops formal estimates of resources through various calendars, checklists and a yearly reappraisal plan. The CAD expressed that more state requirements and reporting strain staff due to time constraints. The CAD feels the facilities, which were built in 1986, are sufficient, funding is adequate, salaries and benefits are competitive and that the staff is well-managed, skilled and quality-conscious. The CAD expressed that they have experienced very few staff changes.
In Chapter 3, on computerization, the CAD indicated that each staff member has a computer workstation including a printer. The CAD indicated that the computer system allows for security, audit trails, provides query/reporting tools, supports multiyear processing, Web access to records, workflow processing/management and the ability to manage document images or photo imagery. The CAD employees have a user name and password to log onto the system. The CAD also codes properties needing various updates or rechecks and attaches photos to each account that identify the property characteristics and location.
In Chapter 4, which covers mapping, the CAD indicated that the office maintains a complete set of cadastral maps showing the size, shape and location of each parcel. The CAD stated the maps are maintained using professionally accepted standards, splits/combinations are noted within one month of a deed's recordation and parcels are assigned a parcel identifier. The CAD does not use geographic coordinates or have a multipurpose GIS or land information system (LIS) mapping system. The CAD stated that maps are computerized and indicate geographical boundaries.
In Chapter 5, which covers data collection, the CAD indicated that land codes indicate the current property use and that property is thoroughly and physically inspected every three years with various checks taking place annually. The CAD indicated it uses various county and city permits, uses a well-designed property record card and computerized edit programs. The CAD mentioned that experienced appraisers collect data. The CAD stated that hand held computers are not utilized in the field and income information is limited.
In Chapter 6, which covers land valuation, the CAD indicated that land sales are reviewed, confirmed and maintained in a sales file and stratified by zoning, use or location and sales are analyzed on a per unit value. The CAD noted that positive adjustment factors are applied, market-derived tables are used and aerial mapping is applied to identify location. The CAD indicated that a limited sales volume does not allow extensive analysis for some factors such as corner locations.
In Chapter 7, concerning residential property valuation, the CAD indicated that primary emphasis is placed on the sales comparison approach along with the cost approach. The CAD noted that sales ratios are analyzed by neighborhood, size, age and other features and that appraisers review and reconcile value estimates before final values are generated. The CAD expressed concern for the limited amount of sales data, which limits the CAD's ability to test statistical models to ensure they are technically sound. The CAD stated cost schedules are checked against local building costs and are fully computerized.
In Chapter 8, regarding commercial property valuation, the CAD indicated that the office uses the three approaches to value in appraising business properties and makes a comprehensive effort to collect local income and expense data. Income information is typically limited. The CAD stated that the cost approach is normally used. The CAD stated that it does not define separate market areas or neighborhoods for business properties, nor does it maintain automated income data or use software tools in analyzing commercial properties. The CAD indicated that it does not use commercial publications to help in the development of rental rates, vacancy ratios, expenses and capitalization rates. Available sales are used to help in the development of income multipliers and calibration of depreciation schedules. Additionally, the CAD indicated that cost factors have been developed and adjusted to the local market and physical condition, economic obsolescence, and functional obsolescence are considered. The CAD indicated that senior appraisers review and reconcile automated value estimates.
In Chapter 9, which deals with sales, ratio studies and stratification, the CAD indicated that real estate sales are properly screened, the office computer system maintains a "snapshot" view, ratio studies are conducted by property groups in a timely manner and used in planning appraisal priorities and the CAD can run studies by various user selected combinations. The CAD indicated it stratifies properties by neighborhood and that it applies adjustment factors when market areas are apparent.
In Chapter 10, which covers personal property assessment, the CAD indicated that it employs several methods to discover taxable personal property such as newspapers, business owners, permits and deed transfers. The CAD also indicated it mails personal property rendition forms to all owners and new businesses, follows up on returned mail, utilizes state reporting formats, coordinates real and personal property field inspections and uses all appropriate valuation methods.
In Chapter 11, which deals with assessment administration, the CAD indicated that the office updates ownership and legal description information typically within two weeks of a transfer being recorded. It also maintains computer records that contain the source of all appraised or assessed values, verifies eligibility for exemptions, ensures that properties are assigned to the correct jurisdiction, notifies property owners by mail of the amount and reason for changes in appraised values and produces computerized assessment rolls of all properties.
In Chapter 12, regarding defense of values, the CAD indicated that owners and taxpayers are encouraged to discuss concerns and complaints with the office before lodging a formal appeal. Additionally, the CAD indicated it tracks the status of each formal appeal and has a documented process for handling formal appeals. In cases where the valuation is difficult and considerable value is at issue, the CAD indicated it does not obtain an independent review from another appraiser as part of the defense in a formal appeal.
In Chapter 13, which covers public relations, the CAD indicated that it attempts to keep the public aware of various appraisal processes through annual newspaper notices and articles. As an example, the CAD stated that during a reappraisal it publishes articles letting the public know that the field appraiser will be working in a certain area. The CAD indicated that property records can be accessed by parcel identifier, situs address and/or owner name and that the office makes available for public distribution a non-technical description of how property is assessed, appeal rights and procedures, exemptions and other forms of tax relief and how property tax bills are calculated.
1.4
Findings of the Property Value Study and Summary Worksheets
The PVS determines the total property value in each school district in Morris CAD. With a few notable exceptions, the law requires all appraisal districts and PTD 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, as defined by Property Tax Code Section 1.04 (7), means the price at which a property would transfer for cash or its equivalent under normal market conditions.
The CAD determines the local appraisal roll value, or local value, and submits it to PTD in its annual self-report. Each school district submits its local value on the PTD school district self-report. 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 in the school district, 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 CADs may protest the findings of the preliminary PVS through an informal administrative hearings process. 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 conference 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. School districts may appeal the hearing examiner's decision to Travis County district court
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 that it can appraise like properties together.
In general, a ratio indicates the percentage of market value, as determined by PTD, at which a CAD appraises a property or group of properties. A ratio of 1.0 indicates appraisal at market value – the legal standard. Generally, appraisals with ratios that are close to the standard, for instance between 0.95 and 1.05, are considered reasonably accurate for a property group.
Despite Daingerfield-Lone Star ISD's informal and formal appeals of parcels from the findings of the preliminary 2005 PVS, the school district's local value fell outside of the confidence interval and PTD certified it as an eligible school district in July 2006. The 2006 and 2007 PVS found the ISD's taxable value to be valid, and local value was certified.
Eligible School District
Five property categories were tested in Daingerfield-Lone Star ISD: single-family residential; rural real; commercial real; utilities and commercial personal.
Single-family residential was 50 percent of the total tested values and made up 25 percent of the school district's value. A review of this category's sample ratios indicates that the CAD appraised from as low as 51 percent to a high of 120 percent of market value, with a weighted mean ratio of 0.93.
Rural real properties made up 15 percent of the school district's value and tested with a weighted mean ratio of 0.9999. This category contains two Subcategories: Subcategory D1, Productivity Value of Qualifying Acres is primarily farm and ranch land that qualifies for the special productivity appraisal; and Subcategory D2, Non-Qualifying Acres and Farm and Ranch 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 rural properties are wide since qualified land is appraised using a special statutory method to determine the land's productivity value and non-qualified land is appraised based on what the land would sell for in an open-market transaction.
Qualified acres comprised 12 percent of rural real property values and 3.6 percent of the total test values. This subcategory had a ratio of 1.0747. Non-qualified acres and rural improvements made up 88 percent of the rural real property values and 26 percent of the school district's total test values. The CAD appraised non-qualified acres and rural improvements from as low as 86 percent to a high of 160 percent of market value and tested with a weighted mean ratio of 0.9903.
Commercial real properties were 10.4 percent of the school district's value and tested with a weighted mean ratio of 0.8148. The CAD appraised this property from as low as 44 percent to a high of 115 percent of market value.
Utilities, which were 4.1 percent of the school district's value, tested with a weighted mean ratio of 1.0186. The CAD's external appraiser valued utility properties from as low as 95 percent to a high of 104 percent.
The CAD is appraising above market value in the ISD for commercial personal property. A review of these accounts indicates that the CAD appraised from 32 percent to 320 percent of market value, with a weighted mean ratio of 1.0675. Commercial personal property makes up 3 percent of the ISD value and 6 percent of the value tested in the PVS.
Morris CAD Summary
In summary, the Morris CAD's overall median ratio is 0.95:
- for Single-family residential, the sample ratios range from 0.51 to 1.20, with a median ratio of 0.93;
- for non-qualified acres, the sample ratios range from 0.86 to 1.60, with a median ratio of 1.03;
- for commercial real property, sample ratios ranged from 0.44 to 1.15, with a median ratio of 0.79;
- for utilities, ratios ranged from 0.95 to 1.04 with a median of 1.00; and
- for commercial personal properties, the sample ratios ranged from 0.32 to 3.20, with a median of 1.09.
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 - 1999, Category A, Single- Family Residential, generally should be 15 or less, and for new and homogeneous areas, 10.0 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.
For the CAD, the 2005 COD for single-family residential properties in Morris CAD was 11.27; for non-qualified acres and rural improvements it was 14.08; commercial real properties had a COD of 20.82; the COD for utilities was 13.33; and commercial personal property had a COD of 34.77.
The 2005 CODs for Daingerfield-Lone Star ISD are the same as the CAD's since it is the only school district.
These numbers indicate appraisal uniformity in all categories except commercial real and commercial personal.