Chapter 1
Overview of County Appraisal District
1.1
County History and Demographics
According to The Handbook of Texas Online, Reeves County is diagonally traversed by Interstate Highway 20 in the Trans-Pecos region of West Texas, with the northern edge of its irregular shape touching New Mexico. On the northeast it borders the Pecos River, which separates it from Loving and Ward counties. Pecos County on the southeast, Jeff Davis County on the southwest and Culberson County on the west all bound Reeves County. Pecos, the county seat, is 74 miles southwest of Odessa. The county was named for Confederate colonel George R. Reeves, who in 1881 was elected Speaker of the Texas House and served in that role until his death in 1882. The city of Pecos was named the seat of government when Reeves County was separated from Pecos County in 1883 and later organized in 1884.
The Handbook notes that Reeves County comprises 2,626 square miles of land with flat and undulating terrain in its northern part and mountainous topography in the extreme south. About 85 percent of the county is covered by a broad, gently-sloping plain topped by outwash material from the mountains. Soils are light reddish-brown to brown sands, clay loams, clays and rough stony lands. Vegetation consists of sparse grasses, scrub brush, creosotebush, cacti, oak, juniper and mesquite, which provides the area's only timber.
By 2005, the county's population had fallen to 11,426 from an all-time high of 17,644 in 1960. Incorporated cities include Balmorhea (population 458), Pecos (8,263); and Toyah (87); unincorporated communities include Brogado, Orla, Red Bluff, Saragosa, Toyahvale and Verhalen.
The county includes Balmorhea and Pecos-Barstow-Toyah Independent School Districts.
1.2
Appraisal District Organization and Staffing
Reeves CAD, formed in 1981, became active in 1982. As of December 2006, Reeves CAD has a total of two full-time staff positions, with one supervisory position and six part-time positions, three of which are seasonal and not reflected in Exhibit 1. The chief appraiser is the CAD's only full-time appraiser. Reeves CAD has a contract with a vendor for professional appraisal services. This vendor appraises mineral, utility and industrial property in Reeves CAD.
Exhibit 1 presents Reeves CAD's current organization chart.
The Reeves CAD board of directors has no authority to set values or determine appraisal methods under Property Tax Code Section 6.05. The chief appraiser carries out the appraisal district's legal duties, hires its staff, performs appraisals and operates the appraisal office.
Reeves CAD provides appraisal services for eight taxing units shown in Exhibit 2.
Exhibit 2
Reeves CAD Taxing Units
| Name of Taxing Entity |
|---|
| Reeves County |
| Pecos-Barstow-Toyah Independent School District |
| Balmorhea Independent School District |
| City of Balmorhea |
| City of Pecos |
| City of Toyah |
| Reeves County Hospital District |
| Reeves County Water Control and Improvement District #2 |
Source: Reeves 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 and school district 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 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 Reeves CAD parcel counts by property category. It compares Reeves CAD's data to the state and group averages. For analytical purposes, PTD groups appraisal districts according to the number of parcels. The Reeves CAD is included with appraisal districts that have 20,000 – 24,999 parcels.
Exhibit 3
Reported Data on Parcels and Categories Versus State and Group Averages
Parcel Size Group (by number of locally appraised parcels): 20 000 – 24,999
| Parcels and Categories | Reeves | State Average | Group Average |
|---|---|---|---|
| Estimated Number Locally Appraised Parcels | 19,988 | 51,112 | 17,418 |
| Number Taxing Units | 8 | 15 | 9 |
| Estimated Local Parcels per Staff | 9,994 | 2,971 | 2,661 |
Composition by Percentage of Value (Self Report)
| Parcels and Categories | Reeves | State Average | Group Average |
|---|---|---|---|
| Residential Value | 12.5% | 47.0% | 22.0% |
| Non-Residential, Non-Mineral | 37.3% | 4.0% | 20.0% |
| Non-Residential, Mineral | 50.2% | 48.0% | 57.0% |
Composition by Locally Appraised Parcel Category (Self Report)
|
Parcels and Categories Parcel Type |
Reeves Number of Parcels |
Reeves Percent of Parcels |
State Average |
Group Average |
|---|---|---|---|---|
| A – Residential | 4,046 | 20% | 50% | 28% |
| B – Multi-Family | 63 | 0% | 1% | 0% |
| C – Vacant Lots | 2,570 | 13% | 14% | 15% |
| D – Agricultural | 11,107 | 56% | 14% | 35% |
| E – Farm and Ranch Improvement | 1,085 | 5% | 5% | 11% |
| F1 – Commercial Real | 545 | 3% | 3% | 3% |
| L1 – Commercial Personal | 355 | 2% | 7% | 4% |
| M1 – Mobile Homes | 217 | 1% | 3% | 2% |
| O – Residential Inventory | 0 | 0% | 2% | 0% |
| S – Special Inventory | 0 | 0% | 0% | 0% |
| Total | 19,988 | 100% | 100% | 100% |
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 Reeves CAD and compares them with other appraisal districts in its group and throughout the state.
Exhibit 4
Reported Budget, Staffing and Training Data Versus State and Group Averages
Financial Information
| Financial and Staffing Information | Reeves | State Average | Group Average |
|---|---|---|---|
| 2005 Budget | $265,710 | $1,144,025 | $401,559 |
| 2005 Surplus | $30,000 | $95,915 | $26,721 |
| 2005 Surplus as a Percent of Budget | 11% | 8% | 7% |
| 2006 Budget | $287,040 | $1,200,084 | $411,310 |
| Percent Change in Budget | 8% | 5% | 2% |
| 2005 Budget per Total Parcel | $12.55 | $21.96 | $22.15 |
| 2005 Budget per PTD Estimated Locally Appraised Parcel | $13.29 | $22.38 | $23.05 |
Staffing – 2005 Budget
| Financial and Staffing Information | Reeves | State Average | Group Average |
|---|---|---|---|
| Full-Time Equivalent (FTE) Employees | 2 | 17.20 | 6.55 |
| Supervisory | 1 | 3.33 | 1.86 |
| Supervisor to Staff Ratio | 1:1 | 1:6 | 1:4 |
Chief Appraiser
| Financial and Staffing Information | Reeves | State Average | Group Average |
|---|---|---|---|
| Performs Appraisals? | Yes | Not applicable | Not Applicable |
| 2005 Compensation (excluding benefits) | $50,000 | $52,766 | $46,105 |
Appraisers – 2005 Budget
| Financial and Staffing Information | Reeves | State Average | Group Average |
|---|---|---|---|
| Appraiser Full-Time Equivalent (FTE) Employees | 1 | 6.42 | 1.0 |
| Salary Range Low | $27,500 | $25,687 | $24,130 |
| Salary Range High | $27,500 | $39,505 | $27,288 |
| Training Budget | $ 4,400 | $ 9,267 | $ 3,613 |
| Number Registered with Board of Professional Tax Examiners (BTPE) | 2 | 9 | 4 |
Source: Texas Comptroller of Public Accounts, Appraisal District Operations Report (2005 and 2006 Data).
Exhibit 5 provides operations information for Reeves CAD, state and group.
Exhibit 5
Reported Data Versus State and Group Averages
Reappraisal
| Operations Information | Reeves |
|---|---|
| Last Year of Reappraisal | 2005 |
| Next Year of Reappraisal | 2006 |
| Type of Reappraisal | - |
Protests
| Operations Information | Reeves | State Average | Group Average |
|---|---|---|---|
| Protests (2004 tax year) | 60 | 3,435 | 194 |
| Protests per Estimated Locally Appraised Parcel | 0 | 0.07 | 0.05 |
Collections
| Operations Information | Reeves |
|---|---|
| Consolidated Collection | No |
| Collection Budget | $0 |
Geographic Information System (GIS)
| Operations Information | Reeves | State Average | Group Average |
|---|---|---|---|
| District Has or Plans to Purchase GIS? | No | Not Applicable | Not Applicable |
| Percent GIS Complete | 0% | 50% | 52% |
Source: Texas Comptroller of Public Accounts, Appraisal District Operations Report (2005 and 2006 Data).
Based on this comparison, Reeves CAD appraised 9,994 parcels per full-time employee. The IAAO's Property Appraisal and Assessment Administration, Chapter 16, "Elements of Administration," states that the ratio of full-time employees per parcel 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 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, Reeves 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.
Reeves CAD answered all 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, Reeves CAD pointed to certain strengths. Among the identified strengths are a qualified, customer-oriented staff and computerized appraisal and mapping technology.
Reeves CAD also indicated some areas of concern, including limited market data resulting from lack of full disclosure laws.
In Chapter 1, which discusses legal issues and assessment cycles, the CAD indicated that it understands the legal framework, value standard and assessment cycles required of the CAD. The CAD stated it keeps current with legislative proposals, laws and court decisions by receiving Comptroller publications and updates, maintaining memberships in professional organizations, attending seminars, receiving legal updates, and referencing Property Tax Code and Texas Property Tax Laws. The CAD stated all appraisals must be equal and uniform and appraised at market value. Using the market, cost and income approaches to value support the current market value standard, while not having full disclosure of sales information undercuts the standard, according to the CAD. Question number four on size and resources was answered by stating in spite of the CAD's limited funds and staff, the CAD operates efficiently.
In Chapter 2, which deals with resources and management, the CAD indicated that it engages in formal planning through the budget process, has adequate funding and runs a well-organized and well-managed operation. The CAD also indicated that the appraisal district staff is quality conscious concerning their work. The CAD stated it provides staff training to all employees. The CAD typically refunds surplus funds to its taxing entities, but has designated surplus funds for large expenditures in the past, such as a computerized mapping system. The CAD indicated that compared with other appraisal districts of similar size, its salaries and benefits are comparable.
In Chapter 3, on computerization, the CAD indicated its computer system is sufficient to meet the CAD's needs. The CAD responded that although not currently used, its computer system has integration capabilities, maintains data security and integrity, generates audit trails, provides query/reporting tools, supports multiyear processing and has the ability to manage document and photo imagery. The CAD also stated a Web site is in the works.
In Chapter 4, which covers mapping, the CAD indicated that appraisal district maps comply with IAAO Standards and Comptroller Rules. Reeves CAD indicated all parcels are uniquely identified and the CAD recently contracted for digitized mapping services, which will expedite map updates.
In Chapter 5, which covers data collection, the CAD indicated that it knows what data is required by Comptroller Rules, state law and appraisal standards. The CAD stated it collects building permits and appraisers conduct physical inspections on all new properties. It uses all relevant data in the assessment process, but the income approach is not used in commercial appraisals. The CAD operates on a three-year reappraisal cycle.
In Chapter 6, which covers land valuation, the CAD indicated that it understands the land valuation process using market data as its primary source. The CAD stated sales are analyzed in terms of value per unit and makes adjustments as needed based on the market. The CAD stated there are no large tracts awaiting development.
In Chapter 7, concerning residential property valuation, the CAD indicated that it uses available sales data and market analysis in the appraisal process for residential properties. Schedules are fully computerized and depreciation is based on individual property characteristics.
In Chapter 8, regarding commercial property valuation, the CAD indicated income information on local commercial properties is very limited and not typically used in the appraisal process. The CAD uses the cost approach when appraising commercial properties and considers physical condition, economic obsolescence and functional obsolescence when estimating total depreciation.
In Chapter 9, which deals with sales data, ratio studies and stratification, the CAD indicated that it follows the accepted procedures for gathering sales data and can generate ratio studies at will for planning and determining reappraisals. The ratio study software does not have geographic capabilities, and the new mapping system will be used to enhance market analysis.
In Chapter 10, which covers personal property assessment, the CAD indicated that it follows the accepted procedures for discovery and appraisal of personal property. Annually, the CAD mails personal property renditions to each business owner and follows up on non-returns. The CAD stated it uses rendered values and compares like properties for uniformity. The CAD stated it contracts for the appraisal of leased equipment, and the contractor uses the income approach.
In Chapter 11, which deals with assessment administration, the CAD indicated it believes that it is following the accepted practices of assessment administration in the Comptroller Rules and IAAO Standards, but not always receiving ownership changes in a timely manner. Appraisal notices are sent to all property owners each year regardless of the amount of change in appraised value. The CAD stated all appraisal notices contain materials informing taxpayers of their right to protest.
In Chapter 12, regarding defense of values, the CAD indicated that the appraisal review board process encourages communication between taxpayers and the CAD. Informal hearings between appraisal staff and appellants are encouraged before a formal hearing, and the CAD has a process for tracking appeals.
In Chapter 13, which covers public relations, the CAD indicated that it believes it has an effective public relations program. A variety of published tax-related notices, news releases and public appearances inform taxpayers of their rights and responsibilities.
1.4
Findings of the Property Value Study and Summary Worksheets
The PVS determines the total property value in each school district in Reeves 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).
Local tax roll value, or local value, is determined by the CAD, approved by the appraisal review board, and submitted to PTD by the CAD and each school district on their annual self-reports. 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. 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 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.
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 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
Balmorhea ISD was identified as an eligible school district when its local value fell outside of the confidence interval limit determined by the 2005 PVS. Four property categories were tested in Balmorhea ISD: (1) Category A, Single-Family Residential; (2) Category D, Rural Real; (3) Category G, Oil, Gas, Minerals and (4) Category J, Utilities.
Category A, Single-Family Residential, was 11 percent of the total test values and made up 9 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 40 percent to a high of 128 percent of market value and tested with a weighted mean ratio of 0.8749.
Category D, Rural Real, made up 19 percent of the school district's value and tested with a weighted mean ratio of 0.8878. 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 as farm, ranch or timberlands. 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 37 percent of Category D's value and 9 percent of the total test values. D1 had a category ratio of 0.7563. Subcategory D2 made up 63 percent of Category D's value and 15 percent of the school district's total test values. The CAD appraised rural homes and Non-Qualified Acres from as low as 82 percent to a high of 121 percent of market value, with a weighted mean ratio of 0.9903.
Category G, Oil, Gas and Minerals, which was 35 percent of the school district's value, tested with a weighted mean ratio of 0.9781. The CAD's external appraiser valued sample Minerals properties from as low as 81 percent to a high of 115 percent.
Category J, Utilities, which was 23 percent of the school district's value, tested with a weighted mean ratio of 1.0021. The CAD's external appraiser valued Utilities properties from as low as 99.2 percent to a high of 100.3 percent.
Other School District
Although Pecos-Barstow-Toya ISD's local value fell within its respective confidence interval limit on the 2005 PVS, there were property categories in which appraisal accuracy needs monitoring.
Category D, Rural Real, made up 5 percent of the school district's value and tested with a weighted mean ratio of 0.7855. Category D represents rural properties and contains two subcategories: D1 and D2. Subcategory D1 comprised 28 percent of Category D's value and 9 percent of the total test values. D1 had a category ratio of 0.7410. Subcategory D2 made up 72 percent of Category D's value and 4 percent of the school district's total test values. The CAD appraised rural homes and Non-Qualified rural land in Pecos-Barstow-Toyah ISD from as low as 49 percent to a high of 153 percent of market value, with a weighted mean ratio of 0.8040.
Reeves CAD Summary
In summary, the Reeves CAD's overall median ratio is 0.99.
- in Category A, Single-Family Residential, the sample ratios range from 0.40 to 1.84, with a median ratio of 0.98;
- in Category D2, Non-qualified Land, the sample ratios range from 0.49 to 1.53, with a median ratio of 0.92;
- in Category F1, Commercial Real Property, the sample ratios range from 0.56 to 1.90, with a median ratio of 1.02;
- in Category G, Oil, Gas & Minerals, the sample ratios range from 0.76 to 1.94, with a median ratio of 1.01; and
- in Category J, Utilities, the sample ratios range from 0.07 to 1.68, with a median ratio of 1.00.
Coefficient of Dispersion
The coefficient of dispersion (COD), which is 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, and a high COD indicates properties are being appraised at inconsistent percentages of market value. A COD that is very low, however, may indicate the prohibited practice of "sales chasing." Also, according to IAAO's Standard on Ratio Studies, Category A, Single-Family Residential, should generally 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 Reeves CAD Category A was 15.60; Category D2 was 16.07; Category F1 was 17.33; Category G was 11.28; and J was 12.83.
The 2005 COD for Balmorhea ISD Category A was 16.27; Category D2 was 10.98; Category G was 7.18; and Category J was .20.
The 2005 COD for Pecos-Barstow-Toyah ISD Category A was 15.12; Category D2 was 21.22; and Category F1 was 17.40.
The COD data indicate uniformity of appraisal in the CAD and ISDs, with the districtwide exception of Category A, Single-Family Residential, and Category D2 in the Pecos-Barstow-Toyah ISD.