Chapter 1
Overview of County Appraisal District
1.1
County History and Demographics
According to The Handbook of Texas, Palo Pinto County was founded in 1856 and named in honor of one of its principal streams.
Palo Pinto County is located in north central Texas. It is bordered by seven counties: Parker and Hood counties on the east, Young and Jack counties on the north, Stephens County on the west and Eastland and Erath counties to the south. Graham, the county seat, is located two blocks south of U.S. Highway 180 (also known as Palo Pinto Highway), the major east/west transportation corridor in the county. Fort Worth is about 75 miles west of Palo Pinto.
In 2005, the county population was 27,418, according to the Texas State Data Center. Major population centers include the city of Gordon, with 443 residents; Graford, with 581 residents; Mineral Wells, with 16,908 residents; Mingus, with 252 residents; and Strawn, with 747 residents. The county's remaining population resides in a variety of small towns and unincorporated areas.
The county includes the Gordon, Graford, Mineral Wells, Palo Pinto, Santo and Strawn ISDs, as well as a portion of the Lipan, Millsap and Perrin-Whitt ISDs.
1.2
Appraisal District Organization and Staffing
Palo Pinto CAD was formed in 1980 and became active in 1981. As of October 2006, Palo Pinto CAD had 13 full-time staff positions, with four supervisory positions and no part-time positions. Five positions are full-time appraisers. Palo Pinto CAD has a contract with an outside private vendor for professional appraisal services.
The Palo Pinto chief appraiser reports directly to the board of directors. The deeds/records supervisor, the secretary/bookkeeper, the data processor/ARB records secretary and the senior real estate appraiser report to the mapping/office supervisor who reports directly to the chief appraiser. The deed clerk/O&G coordinator, the HS & exemption clerk and the receptionist report to the deeds/records supervisor. The real estate appraiser, the agricultural appraiser and the personal property appraiser/O&R coordinator report to the senior real estate appraiser.
Exhibit 1 presents Palo Pinto CAD's current organization chart.
The Palo Pinto 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 is responsible for the CAD's legal duties, hires its staff, makes appraisals and operates the appraisal office.
Palo Pinto CAD provides appraisal services for 15 taxing units (Exhibit 2).
Exhibit 2
Palo Pinto CAD Taxing Units
| Name of Taxing Entity |
|---|
| Palo Pinto County |
| Gordon Independent School District |
| Graford Independent School District |
| Mineral Wells Independent School District |
| Santo Independent School District |
| City of Strawn |
| Sportsman's World WD |
| Palo Pinto County ESD |
| Strawn Independent School District |
| Palo Pinto Independent School District |
| City of Gordon |
| City Graford |
| City of Mingus |
| City of Mineral Wells |
| Palo Pinto HD |
Source: Palo Pinto CAD, 2006.
PTD does not track appraisals performed by external appraisers. PTD uses parcel counts reported in the appraisal district's 2005 self-report and school district self-reports to calculate parcels per employee.
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 Palo Pinto CAD parcel counts by property category and compares Palo Pinto CAD's data to state and group averages. For analytical purposes, PTD groups appraisal districts according to the number of parcels. In the following tables, Palo Pinto CAD is compared to appraisal districts that have 25,000 to 34,999 parcels.
Exhibit 3
Reported Data on Parcels and Categories Versus State and Group Averages
Parcel Size Group (by number of locally appraised parcels): 25,000 to 34,999
| Parcels and Categories | Palo Pinto | State Average | Group Average |
|---|---|---|---|
| Estimated Number Locally Appraised Parcels | 30,184 | 51,112 | 29,763 |
| Number Taxing Units | 16 | 15 | 12 |
| Estimated Local Parcels per Staff | 2,322 | 2,971 | 2,727 |
Composition by Percentage of Value (Self Report)
| Parcels and Categories | Palo Pinto | State Average | Group Average |
|---|---|---|---|
| Residential Value | 42.8% | 47.4% | 32.9% |
| Non-Residential, Mineral | 5.6% | 4.3% | 7.7% |
| Non-Residential, Non-Mineral | 51.6% | 48.3% | 59.3% |
Composition by Locally Appraised Parcel Category (Self Report)
|
Parcels and Categories Parcel Type |
Palo Pinto Number of Parcels | Palo Pinto Percent of Parcels | State Average | Group Average |
|---|---|---|---|---|
| A - Residential | 10,628 | 35.2% | 50.2% | 27.0% |
| B - Multi-Family | 329 | 1.1% | 1.2% | 0.4% |
| C - Vacant Lots | 6,443 | 21.3% | 14.3% | 14.1% |
| D - Agricultural | 6,333 | 21.0% | 14.3% | 31.9% |
| E - Farm and Ranch Improvement | 3,078 | 10.2% | 5.3% | 15.0% |
| F1 - Commercial Real | 1,050 | 3.5% | 3.5% | 3.0% |
| L1 - Commercial Personal | 1,242 | 4.1% | 6.8% | 4.5% |
| M1 - Mobile Homes | 1,054 | 3.5% | 2.6% | 3.1% |
| O - Residential Inventory | 8 | 0.0% | 1.8% | 0.9% |
| S - Special Inventory | 19 | 0.1% | 0.1% | 0.1% |
| Total | 30,184 | 100.0% | 100.0% | 100.0% |
State and group averages calculated by the Property Tax Division.
Sum of data reported in ISD Self Reports of Value in the County Appraisal District.
Totals may not add to 100% due to rounding.
Source: Texas Comptroller of Public Accounts and Appraisal District Self Report of Value, 2005.
Exhibit 4 provides financial and staffing data for Palo Pinto CAD and compares it with other appraisal districts in its group and throughout the state.
Exhibit 4
Reported Budget, Staffing and Training Data
Palo Pinto CAD vs. State and Group Averages
Financial Information
| Financial and Staffing Information | Palo Pinto | State Average | Group Average |
|---|---|---|---|
| 2005 Budget | $726,100 | $1,144,025 | $600,015 |
| 2005 Surplus | $0 | $95,915 | $26,843 |
| 2005 Surplus as a Percent of Budget | 0.0% | 8.4% | 4.5% |
| 2006 Budget | $763,462 | $1,200,084 | $630,195 |
| Percent Change in Budget | 5.1% | 4.9% | 5.0% |
| 2005 Budget per Total Parcel | $22.51 | $21.96 | $19.67 |
| 2005 Budget per PTD Estimated Locally Appraised Parcel | $24.06 | $22.38 | $20.16 |
Staffing - 2005 Budget
| Financial and Staffing Information | Palo Pinto | State Average | Group Average |
|---|---|---|---|
| Full Time Equivalent (FTE) Employees | 13.0 | 17.2 | 10.9 |
| Supervisory | 4.0 | 3.3 | 2.8 |
| Supervisor to Staff Ratio | 1:3 | 1:6 | 1:4 |
Chief Appraiser
| Financial and Staffing Information | Palo Pinto | State Average | Group Average |
|---|---|---|---|
| Performs Appraisals? | Yes | Not Applicable | Not Applicable |
| 2005 Compensation (excluding benefits) | $53,500 | $52,766 | $53,427 |
Appraisers - 2005 Budget
| Financial and Staffing Information | Palo Pinto | State Average | Group Average |
|---|---|---|---|
| Appraiser Full Time Equivalent (FTE) Employees | 5.0 | 6.4 | 4.2 |
| Low Salary Range | $22,000 | $25,687 | $24,462 |
| High Salary Range | $34,000 | $39,505 | $37,712 |
| Training Budget | $15,000 | $9,267 | $8,284 |
| Number Registered with Board of Professional Tax Examiners (BTPE) | 6.0 | 9.1 | 6.5 |
State and group averages calculated by the Property Tax Division.
Source: Texas Comptroller of Public Accounts.
Exhibit 5 compares operations information for Palo Pinto CAD, the state and group.
Exhibit 5
Reported Data vs. State and Group Averages
Reappraisal
| Operations Information | Palo Pinto |
|---|---|
| Last Year of Reappraisal | 2005 |
| Next Year of Reappraisal | 2006 |
| Type of Reappraisal | N/A |
Protests
| Operations Information | Palo Pinto | State Average | Group Average |
|---|---|---|---|
| Protests (2005 tax year) | 2,807 | 3,435 | 1,033 |
| Protests per Estimated Locally Appraised Parcel | 0.1 | 0.1 | 0.0 |
Collections
| Operations Information | Palo Pinto |
|---|---|
| Consolidated Collection | No |
| Collection Budget | $0 |
Geographic Information System (GIS)
| Operations Information | Palo Pinto | State Average | Group Average |
|---|---|---|---|
| District Has or Plans to Purchase GIS? | Yes | Not Applicable | Not Applicable |
| Percent GIS Complete | 75.0% | 49.9% | 52.7% |
State and group averages calculated by the Property Tax Division.
Source: Texas Comptroller of Public Accounts.
Based on this comparison, the Palo Pinto CAD appraised 2,322 parcels per full-time employee. The IAAO's Property Appraisal and Assessment Administration, Chapter 16, Elements of Administration, Staffing Patterns, states that 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 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 is 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, the Palo Pinto 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. The district received an electronic version of the questionnaire and an IAAO manual explaining each question and how to answer them.
The Palo Pinto CAD answered 108 of the 111 questions, providing specific and clear, concise responses where necessary. A summary of the self-assessment follows.
In responding to the self-assessment, Palo Pinto CAD pointed to certain strengths. Among the identified strengths are:
- promotion of the CAD's user-friendly Web site, which allows the public to perform advanced searches for properties and print homestead and 1-d-1 forms, and provides direct links to overlapping districts;
- use of a state-of-the art GIS mapping system;
- efficient analysis of deed information from scanned documents provided on a CD by the county clerk's office; and
- expansion of the existing facility by 1,660 square feet to allow adequate work space for employees.
Palo Pinto CAD also indicated some areas of concern, including:
- accurate support of values for property situated on Possum Kingdom Lake, where exclusive homes are situated on leased land; and
- lack of knowledge to adequately implement the three approaches to value for income-producing properties.
In Chapter 1, which discusses legal issues and assessment cycles, the CAD indicated that its staff keeps abreast of changes in laws that are applicable to appraisal; however, Palo Pinto CAD does not collect for the county, thus it does not maintain a working knowledge of any issue with assessment. As the Dallas/Fort Worth Metroplex expands, Palo Pinto is poised for anticipated growth in the next several years, and is preparing to provide the required appraisal functions.
In Chapter 2, which deals with resources and management, the CAD indicated the chief appraiser holds weekly meetings to help stay prepared to meet the demands of the public and job requirements. The CAD is satisfied with its budget process, personnel training, management, organization and the current skill level of its staff, but more staff is anticipated in the coming year. Salaries, however, are reportedly somewhat lower than CADs with a similar number of employees and parcels.
In Chapter 3, on computerization, the CAD indicated it provides individual PCs and printers to all employees. It performs backups daily, and a weekly backup is stored offsite as an added security measure. The existing software system meets computer and application software requirements for assessment office operations. The chief appraiser administers specific levels of security entrance to each employee, and all PCs have adequate anti-virus software.
In Chapter 4, which covers mapping, the CAD indicated it has a mapping system with the necessary tools and information to meet the standards of assessment. While the CAD does not use state plane coordinates on its cadastral maps, the mapping system incorporates the universal transverse Mercator system. The CAD understands the system and has integrated it with the appraisal system.
In Chapter 5, which covers data collection, the CAD indicated it has a scheduled cycle for reappraisal of property on a two-year rotation, and is aware of the data required by PTD, state law and appraisal standards. In appraising commercial properties, however, the CAD employs only the cost approach and (occasionally) the sales comparison approach.
In Chapter 6, which covers land valuation, the CAD indicated it includes on each appraisal card the situs, size, location, shape, density, unit measurements, zoning and adjustments for negative influences, as required by state law or Comptroller rule. The CAD stratifies land parcels based on location and use.
In Chapter 7, concerning residential property valuation, the CAD indicated it has a basic understanding of the three approaches to value and the data requirements. The CAD also indicated it obtains its cost schedules from Marshall & Swift, but did not indicate whether it applies a local modifier.
In Chapter 8, on commercial property valuation, the CAD indicated appraisers typically use the market and cost approaches, and the income approach is generally not considered unless data on a property is provided by the taxpayer. For the most part, the CAD reports that it follows the accepted standards and the published requirements of data collection and appraisal reflected in Texas statutes, appraisal standards and Comptroller Rules.
In Chapter 9, concerning sales data, ratio studies and stratification, the CAD indicated it screens sales, runs ratio studies and stratifies residential properties.
In Chapter 10, which covers personal property assessment, the CAD indicated sufficiency in most areas, and stated that it follows the accepted procedures for discovery and appraisal of personal property.
In Chapter 11, which deals with assessment administration, the CAD indicated receiving deed information from the county clerk's office involves delays of about 30 to 60 days. The data is delivered in a CD format from scanned documents, making it easy for the deed supervisor to peruse the data and eliminate sales that are not arm's-length transactions. In all, the CAD reports it is following the accepted practices of assessment administration as expressed in Comptroller rules and the standards of the International Association of Assessing Officers (IAAO).
In Chapter 12, regarding defense of values, the CAD indicated it has an established protocol for defending values that are in compliance with the accepted standards of the Comptroller and with IAAO. The appeals process includes referrals to the appraisal review board, status tracking for each appeal and independent reviews of complex valuations. The CAD has a detailed process for tracking all protests.
In Chapter 13, which covers public relations, the CAD reports that it promotes public relations through newspaper ads. The chief appraiser has attended several meetings of taxpayers' groups as well as those of tax-exempt organizations.
1.4
Findings of the Property Value Study and Summary Worksheets
The PVS determines the total property value in each school district served by Palo Pinto CAD. With a few notable exceptions, Section 403.302 of the Government Code and Property Tax Code Section 23.01 require all CADs and PTD to appraise property at market value. (Agricultural lands 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 in its annual self-report. PTD staff estimates the total taxable value in a school district, called 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 appraisals of qualified agricultural lands, the school tax ceiling for disabled homeowners and those over the age of 65, as well as 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 a written protest, a conference between PTD staff and CAD representatives or a formal hearing. A hearings examiner 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.
In general, a ratio of between 0.95 and 1.05 in any property category makes it more likely that the CAD is appraising property within the margin of error, or in other words, that it is appraising property at or near market value.
Eligible School District
Mineral Wells ISD was identified as an eligible school district with values outside of the confidence interval limit. The confidence interval is a range of school district values the Comptroller has accepted.
PTD tested five property categories in Mineral Wells ISD:
(1) Category A, single-family residences;
(2) Category D, rural real;
(3) Category F1, commercial real properties;
(4) Category J, utility properties; and
(5) Category L1, commercial personal properties.
Palo Pinto CAD is not placing market value on the ISD Category A, single-family residences. A review of Category A properties indicates that the CAD appraised them at values ranging from 43 percent to 171 percent of market value, with a weighted mean ratio of 0.9313. Category A, single-family residences, is 46 percent of Mineral Wells ISD's reported value and 59 percent of its tested value.
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.
Sub-category D1 makes up 1 percent of the ISD's reported value and 1 percent of the tested value. This subcategory had a weighted mean ratio of 1.0399.
The CAD is not placing market value on subcategory D2, which makes up 10 percent of the ISD's reported value and 14 percent of its tested value. This subcategory had a weighted mean ratio of 0.8615.
The CAD is placing market value on Category F1, commercial real properties. A review of these properties indicates the CAD appraised them at values ranging from 67 percent to 237 percent of market value, with a weighted mean ratio of 0.9990. Category F1 makes up 11 percent of the ISD's reported value and 14 percent of its tested value.
A review of Category J properties indicates the CAD appraised them at values ranging from 82 percent to 107 percent of market value, with a weighted mean ratio of 0.9829. Category J makes up 4 percent of the ISD's reported value and 4 percent of its tested value.
The CAD is placing above-market value on Category L1, commercial personal properties. A review of Category L1 properties indicates the CAD appraised them at values ranging from 61 percent to 546 percent of market value, with a weighted mean ratio of 1.0503. Category L1 makes up 6 percent of the ISD's reported value and 8 percent of the tested value.
Mineral Wells ISD appealed the self-reported values but did not appeal any specific category tested in the Property Value Study.
Palo Pinto CAD Summary
In summary, the Palo Pinto CAD's overall median ratio is 1.00.
- in Category A, Single-Family Residential, the sample ratios range from 0.43 to 2.02, with a median ratio of 0.99;
- in Category C, Vacant Lots, the sample ratios range from 0.28 to 2.00, with a median ratio of 1.00;
- in Category D2, Non-qualified Land, the sample ratios range from 0.40 to 1.84, with a median ratio of 1.00;
- in Category F1, Commercial Real Property, the sample ratios range from 0.67 to 2.37, with a median ratio of 0.99;
- in Category G, Oil, Gas & Minerals, the sample ratios range from 0.79 to 2.34, with a median ratio of 1.00
- in Category J, Utilities, the sample ratios range from 0.82 to 1.41, with a median of 1.00; and
- in Category L1, Commercial Personal, the sample ratios range from 0.61 to 5.46, with a median ratio of 1.04.
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 in Property Appraisal and Assessment Administration, a low COD indicates that appraisals within a category of property are uniform and a high COD indicates properties are being appraised at inconsistent percentages of market value. IAAO's Standard on Ratio Studies indicates that Category A, Single- Family Residences, should generally be 15 or less, and for new and fairly homogeneous areas, 10 or less. For Category C, Vacant Lots, 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 Palo Pinto CAD Category A was 11.52; Category C was 8.84; Category D2 was 12.24; Category F1 was 8.35; Category G was 8.73; Category J was 4.95; and Category L1 was 19.03.
The 2005 COD for Mineral Wells ISD Category A was 12; Category D2 was 15; Category F1 was 8; and Category J was 4.
These numbers indicate general uniformity in appraisal in these categories in the CAD and ISDs.