Overview of County Appraisal District
County History and Demographics
Rockwall County was formed in 1873 from part of Kaufman County and named for a rock formation that runs through the county.
Rockwall County is located on the Blackland Prairies of north central Texas approximately 25 miles northeast of Dallas. Rockwall County is surrounded by Kaufman County on the south, Hunt County on the East, Dallas County on the west and Denton County on the North.
Ninety three percent of the county is arable and extremely fertile. The greater part of Rockwall County is a treeless prairie although there was once heavy timber along the East Fork of the Trinity River.
The population of the county for 2003, according to the County Information Project, was 54,630 residents, with the City of Fate having 1,252 residents, the City of Heath having 5,878 residents and the City of Rockwall having 24,624 residents. The balance of the county population 22,876 residents lives in other cities and towns and the rural areas. The county comprises 149 square miles and is the smallest county in Texas.
The county seat is Rockwall, located at the intersection of Interstate Highway 30 and State Highway 66. The city became the county seat when the county was formed in 1873.
The county includes the Rockwall Independent School District, and Royce City Independent School District.
Appraisal District Organization and Staffing
The appraisal district was formed in 1981 and became active in 1982. Rockwall CAD has a total of 12 full time staff with two supervisory positions and one part time position. Five of the positions are full time appraisers. The district contracts with Capitol Appraisal Group for professional appraisal services of utility appraisals. Also, the district provides collection services for seven of the eight taxing units they appraise; Rockwell County does their own collection. The CAD has a total of 4 full time staff with one supervisory position and one part time position for collections.
Exhibit 1 outlines the district organization.
Scope of Office
The Board of Directors has no authority to set values or appraisal methods. The chief appraiser carries out the appraisal district's legal duties, hires the staff, makes the appraisals and operates the appraisal office.
The appraisal district is responsible for appraising 53,600 parcels of real, mineral and personal properties located within the boundaries of the district. This includes 6,229 parcels of business personal property. The appraisal district contracts with Capitol Appraisal Group (CAG) for professional appraisal services; CAG appraises utility property.
The district provides appraisal services for eight taxing units, Rockwall County, Rockwall Independent School District, Royce City Independent School District, City of Fate, City of Rockwall, City of Royce City, City of Heath, and Rockwall County MUD #1.
Exhibit 2 presents the types of properties appraised by Rockwall CAD in tax year 2003. In-house staff handles most property categories except Category J (utilities), which is appraised by CAG.
Rockwall CAD Property by Category Summary with Assigned Responsibility
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 None in Rockwall County Category J Utilities Contracted Appraisal Firm Category F2 Industrial Real In-house Staff Category L2 Industrial Personal In-house staff Source: Rockwall 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 and the county's independent school districts self reports 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 real property; L1, commercial personal property; M1, mobile homes; O, residential inventory; and S, special inventory, as shown in Exhibit 3 below.
Reported Data On Parcels, Categories Staffing, Training And Operations Comparison to State and Group Averages
General Information Rockwall State Avg. Group Avg. Parcel Size Group (by number of locally appraised parcels) 25,000 - 34,999 Estimated # Locally Appraised Parcels 31,678 55,463 28,722 # Taxing Units 8 15 12 Locally Appraised Parcels to Staff 2,640 3,404 2,911 2003 Composition by Percentage
of Value (Self Report):
Rockwall State Avg. Group Avg. Residential Value 66.8% 52.6% 36.9% Non-Residential, Non Mineral 33.2% 43.6% 56.1% Non-Residential, Mineral 0.0% 3.7% 7.0% 2003 Composition by Account Category Type (Operations Survey): Real Property 29,196 45,804 26,079 Mineral Property 0 13,536 12,215 Business Personal Property 1,949 4,689 1,588 Individual Personal Property 0 1,342 694 Total Accounts 31,145 65,372 40,576 2003 Composition by Locally Appraised Parcel Category (Estimated from Self Report): Rockwall State Avg. Group Avg. Parcel Type # Parcels % of Parcels A 17,990 56.8% 44.1% 29.5% B 52 0.2% 1.0% 0.3% C 4,165 13.1% 13.1% 15.5% D 2,691 8.5% 24.7% 29.9% E 1,285 4.1% 4.5% 12.8% F1 735 2.3% 3.1% 3.0% L1 1,672 5.3% 5.7% 4.7% M1 913 2.9% 2.2% 3.3% O 2,146 6.8% 1.4% 1.0% S 29 0.1% 0.1% 0.1% Total 31,678 100.0% 100.0% 100.0%
PTD estimated that Rockwall CAD staff is responsible for appraising about 31,678 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.
Districts comparable in size to Rockwall are Gillespie, Palo Pinto, Val Verde and Atascosa. The number of parcels per staff member for Rockwall CAD was 2,640. Gillespie CAD was 3,280, Palo Pinto CAD was 2,297, Val Verde CAD was 2,469 and Atascosa was 2,383. Of course, 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 determined by IAAO. A valid comparison of collection services could not be made as none of the districts used in comparison do collection services except Rockwall CAD.
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 (continued)
Financial and Staffing
Information (Operations Survey)
Rockwall State Avg. Group Avg. 2003 Budget $976,982 $1,079,695 $586,864 2003 Surplus $50,000 $71,620 $27,106 2003 Surplus as % of Budget 5.1% 6.6% 4.6% 2004 Budget $938,522 $1,104,961 $614,890 % Change in Budget -4.1% $0 4.8% 2004 Budget per Total Local Parcel $29.63 $19.92 $21.41 Staffing Full Time 12 18 10 Part Time 1 2 1 Supervisory 2 3 2 Programmers * 2 0 Supervisory to Staff Ratio 1:6 1:5 1:4 Chief Appraiser Performs Appraisals? Yes 2004 Total Compensation $70,000 $53,564 $54,871 Appraisers Full - Time 5 8 4 Part - Time * 0 1 Salary Range: Low $33,500 $24,504 $24,688 High $53,600 $37,521 $36,967 Training Budget $7,000 $8,832 $7,095 # Registered with BTPE (1) 7 9 6 Types of BTPE Certification: RPA (2) RTA (3) RTC (4) All BTPE Certifications in CAD 1 0 0 0 Operations Information
Rockwall State Avg. Group Avg. Reappraisal Last Year of Reappraisal 2003 Next Year of Reappraisal 2004 Type of Appraisal: Cyclical Method of Appraisal: In House Protests 6,000 3,131 927 Protests per Parcel 19.3% 4.7% 2.4% Consolidated Collection Yes Collection Budget $220,895 Geographic Information System (GIS)? Yes Percent GIS Complete * 80% 74% Board of Directors Members 6 6 6 Tax Assessor Votes? Yes Elected Members 1 3 2 Note: An asterisk (*) is shown where data was not reported.
Source: Rockwall ISDs 2003 Self Reports 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 Tax Professional Examiners. (2) RPA - Registered Professional Appraiser. (3) RTA - Registered Texas Assessor-Collector. (4) RTC - Registered Texas Collector.
Self Evaluation Questionnaire
In preparation for the Appraisal Standards Review, Rockwall 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 questionnaire 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.
Rockwall County answered 109 out of 110 questions, mostly in the affirmative when appropriate and negative when appropriate. The district did elaborate in the areas where they felt an explanation was needed instead of responding with a yes or no answer. This made the overall assessment based on the district's responses much easier.
The answer to the questions helped the reviewer to evaluate the districts operations and supported the findings reported.
The IAAO self-assessment questionnaire was provided with the IAAO self assessment guide. In the guide's introduction, it stated
The guide is designed for use by individuals who want to evaluate their own procedures and who are seeking to either continually improve or to evaluate their procedures against what is believed to be a standard of best practices in assessment administration.
The Comptroller provided the questionnaire and the guide to the district to allow it to perform a self assessment of its operations and help it recognize areas where it is doing a good job and areas where it needs to improve.
Chapter 1: Setting, Legal Framework, Value Standard and Assessment Cycle
The district's answers in this chapter indicated to the reviewer that the district understands the legal framework, value standard and assessment cycles required of the appraisal district.
Chapter 2: Resources and Management
The districts answers to chapter 2 indicate that the district is satisfied with the budget process, personnel training, management, organization, training and current skill level of the staff.
Chapter 3: Computerization
The answers to Chapter 3 indicate a working knowledge of the computer system used by the district. The answers also indicate that the staff and management are aware of the requirements of the type and kind of records that the district needs to keep and also the length of time they need to keep them. The answers also reflect the fact that the district has a geographic information system.
Chapter 4: Mapping
The answers to chapter 4 show that the district has a mapping system with the necessary tools and information to meet the standards of assessment.
Chapter 5: Data Collection
The answers in chapter 5 show that the district knows what data is required by Comptroller rules, state law, and appraisal standards. They also stated that they collect and use the data in the assessment process.
Chapter 6: Land Evaluation
Chapter 6 answers shows that the district understands the requirements of situs, size, location, shape, density, unit measurements, zoning, and adjustments for negative influences. These are all required either by appraisal standards or by state law or Comptroller rule.
Chapter 7: Residential Property Valuation
The answers in chapter 7 shows that the districts understands the three approaches to value and the data requirements to achieve an effective appraisal program for residential property. The answers indicate that the district follows the Uniform Standards of Professional Appraisal Practice.
Chapter 8: Commercial Property Valuation
Answers to chapter 8 questions reflect that the district follows the accepted standards and the published requirements of data collection and appraisal reflected in Texas statutes, appraisal standards and Comptroller rules.
Chapter 9: Sales Data, Ratio Studies, and Stratification
The answers to chapter 9 indicate the district follows the accepted procedures for gathering sales data, doing ratio studies and using stratification.
Chapter 10: Personal Property Assessment
The answers in chapter 10 indicate the district follows the accepted procedures for discovery, and appraisal of personal property. They follow the accepted procedures according to the answers in the assessment.
Chapter 11: Assessment Administration
The district indicated that it is following the accepted practices of assessment administration in Comptroller rules and International Association of Assessing Officers standards.
Chapter 12: Defense of Values
Chapter 12 answers on defense of values follow the accepted standards of the Comptroller, and International Association of Assessing Officers Standards.
Chapter 13: Public Relations
The answers in chapter 13 indicate that the district believes it has an effective public relations program.
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 Rockwall County Appraisal District (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.
Rockwall CAD did not appeal the findings of the preliminary study. Rockwall ISD and Royce City ISD did appeal the findings of the preliminary study. Despite the changes, the Royce City school district was unable to get into the confidence interval and was certified an eligible district in June 2004.
A review of the school districts in the county indicates that Rockwall CAD is inconsistently appraising the single-family residence properties and consistently appraising rural residences below market value as determined by the PTD. In the 2003 PVS, Royce City school district fell outside the study's statistical margin of error. Rural residences (subcategory D2) are the primary reason that the school's values are not within the acceptable range determined by the study, while single-family residences (Category A) played a borderline roll.
There are four property categories tested in Royce City Independent School District (ISD): (1) category A, Single-Family Residences, making up 51.2 percent of the district's value with a weighted mean ratio of .9566; (2) category C, Vacant Lots, making up 7.9 percent of the district's value with a weighted mean ratio of .9565; (3) category D, Rural Real, making up 17.6 percent of the district's value with a weighted mean ratio of .8637; and (4) category F1, Commercial Real, making up 5.1 percent of the district's value with a weighted mean ratio of 1.0140. 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.
Royce City ISD is outside the confidence interval limit. Royce City ISD's category A makes up 62 percent of the tested value. The appraisal district is placing a value on the category A single-family residences below their market value with a weighted mean ratio of .9566. The low weighted mean ratio in category A is one of the categories causing the school district to be identified as eligible. Although category C, vacant lots, are also appraised below market value with a weighted mean ratio of .9565, it is not the primary reason that the school's values not within an acceptable range as determined by the study. Category D, Rural Real, is also appraised below market value with a weighted mean ratio of .8637. 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. Royce City ISD's subcategory D1 makes up only 4.9 percent of category D's value and 1.1 percent of the tested value. D1 Productivity Value properties tested at a weighted mean ratio of 1.1164. Category D2 makes up 95.1 percent of category D's value and 21.3 percent of the school district's total tested value. Overall, category D2 is being under appraised with a weighted mean ratio of .8538. The low weighted mean ratio in category D2 drops the district outside the margin of error causing the school district to be identified as eligible. Category F1, Commercial Real, is appraised at market value with a weighted mean ratio of 1.0140. Category F1 is not the primary reason that the school's values are not within an acceptable range as determined by the study. The low weighted mean ratio in categories A and D2 drops the district outside the margin of error causing the school district to be identified as eligible.
In additional to Royce City ISD, the other school district in the county is Rockwall ISD.
Rockwall ISD is within the confidence interval limit. Category A is 70 percent of the school district's value and makes up 82 percent of the tested value. The appraisal district is placing a value on the category A single-family residences at market value with a weighted mean ratio of 1.0111. Category D is 4.9 percent of the school district's value. Category D, Rural Real, is appraised below market value with a weighted mean ratio of .9692. Rockwall ISD's subcategory D1 makes up only 1.7 percent of category D's value and 0.1 percent of the tested value. The appraisal district is placing a value on the D1 Productivity Value properties above market value by a weighted mean ratio of 1.2592. Category D2 makes up 98.3 percent of category D's value and 6 percent of the school district's total tested value. Overall, category D2 is being under appraised with a weighted mean ratio of .9652.
In summary, the Rockwall CAD should focus its energies on its valuation of subcategory D2, Non-Qualifying Acres and Farm and Ranch Improvements, and to a lesser extent category A, Single-Family Residences. In category D2, Non-Qualifying Acres and Farm and Ranch Improvements, both school districts in the county tested well below market value. Category A, single-family residences tested well below market value in Royce City ISD in the value ranges of $35,000 to $110,000.
For a statistical explanation of why the district was selected as eligible, see Appendix 18.