Chapter 1
Overview of County Appraisal District
1.1
County History and Demographics
According to The Handbook of Texas, the state established Titus County in 1846. The county then included all of the territory of present-day Morris and Franklin counties. The county, named for Andrew Jackson Titus, an early Red River County settler, had Mount Pleasant designated as the county seat.
Titus County is located in northeastern Texas, one county removed from the state's northern boundary and two counties removed from the state's eastern boundary. Mount Pleasant, the county seat and largest town, is located 60 miles southwest of Texarkana and 105 miles northeast of Dallas.
Titus County comprises 412 square miles of East Texas timberlands. Between 21 and 30 percent of the land is prime farmland. Major mineral resources include ceramic clay, lignite coal, industrial sand, oil and gas.
The 2005 county population, according to the Texas State Data Center, was 30,118, with the city of Mount Pleasant having 14,885 residents, the city of Talco 621 residents and the city of Winfield having 549 residents. The county's remaining population resides in a variety of small towns and unincorporated areas.
The county includes the Mount Pleasant, Winfield, Chapel Hill and Harts Bluff ISDs, as well as a portion of the Daingerfield-Lone Star ISD.
1.2
Appraisal District Organization and Staffing
Titus CAD, formed in 1980, has nine full-time staff positions, including three supervisory positions and four full-time appraisers. The district contracts with Pritchard & Abbott, Inc. (P&A) for professional appraisal services on industrial, utilities and some personal properties.
Titus CAD's organization structure is in transition. Exhibit 1 represents the number of positions in the CAD at the time of the review team's visit. The organization job titles do not coincide with those in the CAD's budget. Moreover, some positions receive funding from both the appraisal and collections budgets.
Exhibit 1 represents the number of positions at the time of the review team's visit.
Chief Appraiser
Deputy Chief Appraiser
Mapper
Three Appraisers
Collections Manager
Deed Clerk
Collections Clerk
The chief appraiser resigned in February 2006. The deputy chief appraiser assumed the post as interim chief appraiser and has been filling that role since March 2006. The "mapper" also performs the administrative assistant functions. The deputy chief appraiser serves as direct supervisor of operations staff, but since the position is presently vacant, the interim chief appraiser maintained operational contact. Subsequent to the on-site visit and the substantial completion of this report, the CAD hired a permanent chief appraiser.
The Titus CAD board of directors has no authority to set values or appraisal methods. The chief appraiser carries out the appraisal district's legal duties, hires its staff, makes appraisals and operates the appraisal office.
Titus CAD provides appraisal services to 11 taxing units (Exhibit 2).
Exhibit 2
Titus CAD Taxing Units
| Name of Taxing Entity |
|---|
| Titus County |
| Mount Pleasant Independent School District |
| Winfield Independent School District |
| Chapel Hill Independent School District |
| Harts Bluff Independent School District |
| City of Talco |
| City of Winfield |
| City of Mount Pleasant |
| Titus County Memorial Hospital District |
| Daingerfield-Lone Star Independent School District |
| Northeast Texas Community College District |
Source: Titus CAD, 2005 Operating Budget.
Most appraisal districts contract with private firms to appraise certain property. The Titus CAD appraises all categories of properties in-house with the exception of industrial, utilities and selected personal property accounts, for which they contract with Pritchard & Abbott, Inc. (P&A).
PTD does not track appraisals performed by external appraisers. Contracts with external appraisers generally do not include a parcel count for the number of appraisals performed. In assessing the staff-to-parcel ratio count in each appraisal district, PTD uses parcel counts reported in the appraisal district's 2004 self-report and the independent school district self-reports to calculate parcels per appraisal district staff.
PTD includes commercial real and personal property parcels in the calculation, since it cannot determine how many parcels to assign to in-house staff versus private firms. The total parcels appraised in-house are calculated by summing the total number of parcels reported in Categories A, Single Family Residential; B, Multifamily Residential; C, Vacant Lots; D, Rural Land; E, Rural Improvements; F1, Commercial Property; L1, Personal Property; M1, Mobile Homes; O, Residential Inventory; and S, Special Inventory.
Exhibit 3 contains data concerning appraisal district parcel counts by categories of properties. It compares the appraisal district's data to state and group averages.
Exhibit 3
Reported Data on Parcels and Categories
Comparison to State and Group Averages
Parcel Size Group (by number of locally appraised parcels):20,000 - 24,9991
| Parcels and Categories | Titus | State Average1 | Group Average1 |
|---|---|---|---|
| Estimated Number Locally Appraised Parcels | 21,645 | 49,497 | 22,264 |
| Number Taxing Units | 11 | 15 | 11 |
| Estimated Locally Appraised Parcels per Staff1 | 2,405 | 2,985 | 3,064 |
Composition by Percentage of Value (Self Report):
| Parcels and Categories | Titus | State Average1 | Group Average1 |
|---|---|---|---|
| Residential Value | 23.2% | 51.3% | 22.8% |
| Non-Residential, Non-Mineral | 75.3% | 45.0% | 57.7% |
| Non-Residential, Mineral | 1.5% | 3.7% | 19.5% |
Composition by Locally Appraised Parcel Category (Self Report):
|
Parcels and Categories
Parcel Type |
Titus
Number of Parcels |
Titus
Percent of Parcels |
State Average1 | Group Average1 |
|---|---|---|---|---|
| A - Residential | 7,635 | 35.3% | 50.0% | 29.1% |
| B - Multi-Family | 108 | 0.5% | 1.2% | 0.4% |
| C - Vacant Lots | 2,699 | 12.5% | 14.7% | 16.8% |
| D - Agricultural2 | 4,692 | 21.7% | 14.4% | 29.7% |
| E - Farm and Ranch Improvement | 3,039 | 14.1% | 5.1% | 12.9% |
| F1 - Commercial Real | 978 | 4.5% | 3.4% | 3.4% |
| L1 - Commercial Personal | 1,604 | 7.4% | 6.8% | 4.6% |
| M1 - Mobile Homes | 853 | 3.9% | 2.5% | 2.3% |
| O - Residential Inventory | 0 | 0.0% | 1.8% | 0.8% |
| S - Special Inventory | 37 | 0.2% | 0.1% | 0.0% |
| Total3 | 21,645 | 100.0% | 100.0% | 100.0% |
1 Calculated by the Property Tax Division.
2 Sum of data reported in ISD Self Reports of Value in the County Appraisal District.
3 Totals may not add to 100.0% due to rounding.
Source: Appraisal District Operations Report (2004 and 2005 Data), March 2006 and Appraisal District Self Report of Value, 2004.
For analytical purposes, PTD groups appraisal districts according to the number of parcels. Titus CAD is included with appraisal districts having 20,000 - 24,999 parcels. Based on this comparison, Titus CAD appraised 2,405 parcels per full-time employee, slightly less than the group and state averages. The IAAO Standards show that the typical ratio of parcels per full-time employee is 2,500. While Titus CAD staff per parcel number is in line with IAAO standards, they are slightly higher than state and group averages because Titus CAD has a much greater percentage of non-residential, non-mineral properties than the group or state. Appraising these properties typically is more resource intensive.
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 only gives the reader a basis for comparison with other appraisal districts with similar parcel counts.
Exhibit 4 provides financial and staffing data for Titus CAD and compares these with data from other appraisal districts throughout the state and in its group. While the locally appraised parcel costs in Titus CAD are in line with the group and state averages, its costs per parcel for all parcels are higher. Again, Titus CAD has fewer mineral properties, which typically are more cost-effective to appraise, and a greater number of non-residential and non-mineral properties, which require more resources to appraise.
Exhibit 4
Reported Budget, Staffing and Training Data
Comparison to State and Group Averages
Financial Information
| Financial and Staffing Information | Titus | State Average1 | Group Average1 |
|---|---|---|---|
| 2004 Budget | $512,625 | $1,108,158 | $475,265 |
| 2004 Surplus | $70,000 | $48,656 | $30,980 |
| 2004 Surplus as Percent of Budget1 | 13.7% | 4.4% | 6.5% |
| 2005 Budget | $543,316 | $1,150,302 | $496,938 |
| Percent Change in Budget1 | 6.0% | 3.8% | 4.6% |
| 2004 Budget per Total Parcel1 | $19.58 | $9.33 | $8.94 |
| 2004 Budget per PTD Estimated Locally Appraised Parcel1 | $23.68 | $22.30 | $21.35 |
Staffing - 2004 Budget
| Financial and Staffing Information | Titus | State Average1 | Group Average1 |
|---|---|---|---|
| Full Time | 9 | 17 | 7 |
| Part Time | 0 | 1 | 1 |
| Supervisory | 3 | 3 | 2 |
| Programmers | 0 | 1 | 1 |
| Supervisory to Staff Ratio1 | 1:3 | 1:5 | 1:4 |
Chief Appraiser
| Financial and Staffing Information | Titus | State Average1 | Group Average1 |
|---|---|---|---|
| Performs Appraisals? | No | ||
| 2004 Total Compensation - Actual | $63,000 | $52,557 | $49,727 |
Appraisers - 2004 Budget
| Financial and Staffing Information | Titus | State Average1 | Group Average1 |
|---|---|---|---|
| Full - Time | 3 | 6 | 3 |
| Part - Time | 0 | 0 | |
| Salary Range: | |||
| Low | $40,300 | $25,476 | $25,662 |
| High | $52,200 | $38,313 | $34,315 |
| 2004 Training Budget | $4,500 | $9,140 | $5,257 |
| Number Registered with Board of Tax Professional Examiners (BTPE) | 6 | 8 | 5 |
1 Calculated by the Property Tax Division.
Source: Appraisal District Operations Report (2004 and 2005 Data), March 2006.
Exhibit 5 provides operations information for Titus CAD, state and group.
Exhibit 5
Reported Operations Data
Comparison to State and Group Averages
Reappraisal
| Operations Information | Titus | State Average1 | Group Average1 |
|---|---|---|---|
| Last Year of Reappraisal | 2004 | ||
| Next Year of Reappraisal | 2005 | ||
| Type of Reappraisal: | Cyclical | ||
| Method of Reappraisal: | In-House |
Protests
| Operations Information | Titus | State Average1 | Group Average1 |
|---|---|---|---|
| Protests (2004 tax year) | 183 | 3,164 | 249 |
| Protests per Estimated Locally Appraised Parcel1 | 1.0% | 6.0% | 7.0% |
Collections
| Operations Information | Titus | State Average1 | Group Average1 |
|---|---|---|---|
| Consolidated Collection | Yes | ||
| Collection Budget | $214,908 |
Geographic Information System (GIS)
| Operations Information | Titus | State Average1 | Group Average1 |
|---|---|---|---|
| District Has or Plans to Purchase GIS? | Yes | ||
| Percent GIS Complete | 90.0% | 80.0% | 74.0% |
Board of Directors - 2004
| Operations Information | Titus | State Average1 | Group Average1 |
|---|---|---|---|
| Members | 6 | 6 | 7 |
| Tax Assessor Votes? | No | ||
| Elected Members | 2 | 3 | 2 |
1 Calculated by Property Tax Division.
Source: Appraisal District Operations Report (2004 and 2005 Data), March 2006.
1.3
Self Evaluation Questionnaire
In preparation for this ASR, PTD asked Titus CAD 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 receives an electronic version of the questionnaire and an IAAO manual that explains each question and how to answer them. PTD asks each appraisal district undergoing an ASR to perform this self-assessment.
Titus CAD answered all 111 questions, providing simple yes or no answers and concise responses where necessary. Slightly more than half of the responses were in the affirmative. A summary of the self-assessment follows.
In responding to the self-assessment, the appraisal district did not identify any particular strength. The appraisal district indicated some areas of concern related to the adequacy of its computer systems and the skills and effectiveness of CAD staff given that four CAD employees are new appraisers and do not have an appraisal background.
In Chapter 1, on legal issues and assessment cycles, the CAD indicated that it meets requirements, but lacks sufficient resources to perform the assessment function efficiently and effectively.
In Chapter 2, on resources and management, the CAD indicated that its funding and facilities are not adequate and that a reorganization is in progress to address issues related to planning and staff management.
In Chapter 3, on computerization, Titus CAD indicated that its existing systems are inadequate and that it is seeking new software and hardware to address system shortcomings.
In Chapter 4, on mapping, the CAD indicated that it maintains maps according to standards, but there are delays in recording splits and combinations and cadastral maps are not complete.
In Chapter 5, on data collection, the CAD indicated that it lacks sufficient data collection related to property use and income data for rental properties.
In Chapter 6, on land valuation, Titus CAD indicated sufficiency in some areas, but noted that it does not stratify land by zoning, use or location. Titus CAD does not use tools and methods such as statistical software, geographic information systems, abstraction, allocation and land residual capitalization to derive values.
In Chapter 7, on residential property valuation, the CAD indicated sufficiency in all areas except the reliability of statistical models and the analysis of sales to determine depreciation schedules.
In Chapter 8, on commercial property valuation, the appraisal district indicated that it uses recommended approaches to value commercial property, but lacks software tools to maintain automated income data needed to facilitate income analysis or analyze commercial properties.
In Chapter 9, on sales data, ratio studies and stratification, the CAD indicated that it does not stratify residential properties. The CAD has limited capabilities to perform ratio studies by property groups and subgroups or by user-selected combinations of property characteristics.
In Chapter 10, on personal property assessment, Titus CAD indicated sufficiency in most areas except maintenance of separate cost, trend and depreciation indices for each class of personal property, and the use of the income approach to value leased equipment.
In Chapter 11, on assessment administration, the CAD indicated adequacy in all areas except that its computer records do not contain the source of all appraised or assessed values.
In Chapter 12, on defense of values, the CAD indicated that its appeals process includes referrals to the appraisal review board, tracking the status of each appeal and obtaining independent review for complex valuations; the CAD, however, does not document the process.
In Chapter 13, on public relations, Titus CAD indicated its public relations program consists mainly of making Comptroller-developed materials available to the public.
1.4
Findings of the Property Value Study
The PVS determined the total property value in each school district in Titus CAD. With a few notable exceptions, the law requires all appraisal districts and PTD to appraise property at market value. Productivity is the basis used for appraising value of agricultural land and timberland.
Market value is the price that a property a willing seller would pay 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 may not be related.
The appraisal district determines the local tax roll value, or local value, and submits it to PTD on its annual 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 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 school tax ceiling for homeowners 65 or older and disabled homeowners, other state-mandated exemptions and the difference between the market and productivity value of rural land.
PTD issues a preliminary and final PVS each year. School districts and 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. PTD may amend the findings of the preliminary PVS based on the submission of the written protest, an informal hearing or a formal hearing. A hearings examiner, appointed by the Comptroller's general counsel and reporting directly to the Comptroller, holds formal hearings. The hearings examiner is not an employee of PTD.
When conducting the PVS, PTD assigns properties to various categories such as residential, commercial and rural property. PTD divides properties into categories so that it assesses like properties together. Category D represents rural properties and contains two subcategories, D1 and D2. Subcategory D1, Real Property: Qualified Agricultural Land is primarily farm and ranch land that qualifies for the special productivity appraisal. Subcategory D2, Real Property: Non-Qualified Land primarily consists of 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 a special statutory method is the basis for D1 appraisals and the basis for D2 appraisals is what the land would sell for in an open-market transaction.
Mount Pleasant and Harts Bluff ISDs formally appealed the study findings. The final determinations did not result in local value findings.
Eligible School Districts
In the 2004 PVS, Mount Pleasant fell outside the study's statistical margin of error and became an eligible school district for an ASR. Real Property: Single-Family Residential (Category A) and Real Property: Commercial (Category F1) values were not within the acceptable range. Mount Pleasant ISD formally appealed Categories A and F and Subcategory D2.
Five property categories were tested in Mount Pleasant: Category A, Category D, Category F1, Category J (Real and Personal Property: Utilities) and Category L1, Personal Property: Commercial.
A review of Category A properties indicates that the CAD appraised from as low as 48 percent to a high of 258 percent of market value, with a weighted mean ratio of .94. Category A properties make up 19 percent of the school district's market value and 48 percent of its tested value.
For Category F1 properties, the CAD appraised from 37 percent to 107 percent of market value, with a weighted mean ratio of .83. Category F1 makes up 8 percent of the school district's value and 20 percent of the tested value.
Subcategory D2 makes up 5 percent of the school district's value and 12 percent of the tested value. Sub-category D2 has a weighted mean ratio of 1.07.
In the 2004 PVS, Harts Bluff ISD fell outside the study's statistical margin of error and became eligible for an ASR. Rural Residences (Subcategory D2) is the primary reason. Harts Bluff ISD formally appealed Category A and Subcategory D2.
PTD tested two property categories in Harts Bluff ISD: Category A and Category D. Harts Bluff ISD was within the acceptable tolerance of single-family residences with a weighted mean ratio of .96. For Subcategory D2 properties, the CAD appraised from as low as 74 percent to a high of 111 percent of market value, with a weighted mean ratio of .87. Category D2 makes up 16 percent of the school district's value and 18 percent of the tested value.
Other School Districts
The three other school districts in Titus CAD are Chapel Hill, Winfield and a portion of Daingerfield-Lone Star. Chapel Hill ISD and the portion of Daingerfield-Lone Star were within their respective confidence interval limits.
Winfield ISD had invalid values outside the confidence interval, but PTD certified Winfield's local values because they were higher than PTD's estimate. In Winfield, rural residences tested at 108 percent of market value.
Rural residences represent 9 percent of Winfield's value and 33 percent of the value tested. Qualified acreage appraised at 129 percent of taxable value. Qualified acreage represents 3 percent of the school district's value and 11 percent of the tested value.
Utilities tested at 106 percent of market value. Winfield's utility value represents 44 percent of the school district's value and 16 percent of the tested value.
Titus CAD Summary
In summary, Titus CAD's overall median ratio is .99. Nevertheless, there are wide variations within these categories. For example, Category A sampled property ratios ranged from .38 to 12.89 with a median ratio of .98, with 59.3 percent of the ratios within a plus or minus 10 percent of the median.
Furthermore, Titus CAD is not appraising rural residences consistently. The weighted mean ratio for rural residences ranged from a low of .87 in Harts Bluff to a high of 1.08 in Winfield. Less than half, 38.9 percent, of rural real properties were within 10 percent of the median. In this category, 65.3 percent of properties appraised within 25 percent of the median.
In Category F1, the sampled property ratios ranged from .37 to 1.07 with a median ratio of .88 and 43.8 percent of the ratios were within plus or minus 10 percent of the median.
In Category J, the sampled property ratios ranged from .78 to of 5.77 with a median ratio of 1.00 and 76 percent of the ratios were within plus or minus 10 percent of the median.
In Category L1, the sampled property ratios ranged from .89 to 1.77 with a median ratio of 1.00 and 92 percent of the ratios were within plus or minus 10 percent of the median.
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 property category are uniform, while a high COD indicates appraisals at inconsistent percentages of market value. IAAO's Standard on Ratio Studies indicates that Category A's CODs should generally be 15.0 or less, and for new and homogenous areas, 10.0 or less. For Category C, Real Property: Vacant Lots and Tracts, and for income-producing properties the COD should be 20.0 or less.
The 2004 COD for Mount Pleasant ISD Category C was 25.62. In Harts Bluff ISD, Category A had a COD of 16.02 and Category D3 the COD was 21.25. These numbers indicate a lack of uniformity in appraisal.