Findings of the Appraisal Standards Review
This chapter of the report addresses findings, commendations and recommendations from the appraisal standards review of the Travis Central Appraisal District in five sections:
The quality of the property tax system depends largely on the appraisal district's board of directors. Individuals serving on the board of directors bring to the board knowledge, judgment and expertise in establishing policies and procedures for the district's organization and operation.
The Travis CAD was formed in 1981 and became active in 1982. Travis CAD's board of directors consists of ten members (Exhibit 4).
Board of Directors Members
Board Member Represents Start Date Tom Granger, Chairman Austin ISD 1/01/05 Lon Brooks Travis County 1/01/04 Dennis Jones West Travis County* 1/01/04 Kristoffer S. Lands City of Austin/Austin ISD Jointly 1/01/04 Richard Lavine Austin ISD 1/01/04 Nash Martinez Travis County 1/01/05 Eleanor Powell City of Austin 1/01/05 Nelda Wells Spears Assessor/Collector 1/01/04 June J. Kunkel East Travis County* 1/01/05 Blanca Zamora-Garcia, Secretary City of Austin 1/01/04 Source: Travis CAD, May 19, 2005.
*Governor Ann Richards established the east and west Travis County board member slots. The east and west Travis County appointees represent all school districts and cities in eastern and western Travis County, respectively that are not otherwise represented on the board.
Nelda Wells Spears is Travis County's elected tax assessor/collector.
The board hires a chief appraiser as the chief operating officer of the appraisal district and has the following primary responsibilities:
- establish the appraisal district's appraisal office;
- adopt the appraisal district's annual operating budget;
- approve appraisal contracts;
- hire a chief appraiser;
- hire a taxpayer liaison officer (districts in counties having a population of over 125,000);
- appoint appraisal review board members; and
- make general policy on the appraisal district's operation.
The Comptroller's office provided the board with a written survey about board activities to complete. Six of the ten board members responded. The survey was broken down into board policies and procedures; chief appraiser and staff; property appraisals; appraisal review boards; and budgeting and financial management. Board members who responded generally gave Travis CAD high marks in most areas of operations, agreeing strongly or agreeing with most statements.
Regarding appraisal district budgets, Tax Code Section 6.06 requires a listing of each proposed position including salary and benefits; each proposed capital expenditure; and an estimate of the amount of the budget allocated to each taxing unit. Travis CAD has complied with the required formats and has provided proper notice and held hearings as required by the Tax Code. Exhibit 5 presents Travis CAD's 2004 and 2005 adopted budgets.
Travis CAD Adopted Budgets
2004 and 2005
Budget Category 2005 Budget 2004 Budget Payroll Salaries $4,494,027 $4,755,700 Overtime 47,890 50,940 Medicare/FICA Tax 49,890 51,810 Retirement 372,010 330,010 Health Insurance 407,880 560,500 Dental Insurance 37,080 39,600 Life Insurance 4,200 4,500 Employee Assistance Program 3,520 3,760 Temporary/Contract/Part Time 64,240 61,140 Workers Compensation 48,610 49,120 Disability Insurance 35,230 36,540 Unemployment Insurance 9,600 9,600 Total Payroll Costs $5,574,177 $5,953,220 Commodities Printing & Paper 73,950 75,950 Postage & Freight 207,950 212,290 Operating Supplies 121,900 106,000 Information Services 27,800 27,800 Books/Publ/Subscriptions 23,850 23,850 Microfilm & Microfiche 12,500 18,500 Records Destruction 2,000 2,000 Total Commodities $469,950 $466,390 Services Dues & Memberships 9,730 13,230 Travel/Meals/Lodging 11,200 13,100 Training & Education 50,900 33,100 Auto Allowance 157,600 165,200 Advertising & Legal Notices 32,600 30,600 Utilities 81,450 81,450 Telephone & Communication 45,800 55,400 Attorney & Court Costs 159,000 150,000 Accounting & Audit 9,000 9,000 Appraisal Services 90,000 85,000 Rental/Furn. & Equipment 14,410 14,710 Professional Services 335,000 142,000 Repair & Maint. Contracts 62,600 114,380 Rental Storage Space 21,900 22,620 Building Repair/Maint. 82,000 80,500 Software Maintenance 135,500 181,570 Casualty Insurance 23,000 22,000 Liability Insurance 26,000 24,000 Security Services 3,000 3,000 Maps/Photography/Deed Copies 56,160 56,160 Vehicle Fuel/Maintenance 6,000 4,200 Bank/Credit Card Fees 300 300 Total Services $1,413,150 $1,301,520 Capital Equipment 373,500 157,500 Debt Service - Principal 263,803 253,840 Debt Service - Interest 27,620 32,190 Grand Total Expenditure $8,122,200 $8,164,660 Source: Travis CAD records, 2005.
Travis CAD has several budgeting practices that have the unintended consequence of obscuring when or how funds are intended to be spent.
Unexpended Budgeted Amounts
Tax Code, Section 6.06(j), requires that if taxing units' total payments to an appraisal district exceed the amount the district has spent or was obligated to spend during a fiscal year, the chief appraiser shall credit the excess amount against each taxing unit's allocated payment for the following year. Exhibit 6 presents an excerpt from Travis CAD's most recent annual financial report, for the year ended December 31, 2003. The annual financial report for the year ended December 31, 2004 was not yet publicly available and was scheduled for consideration at the Travis CAD board's September 2005 meeting.
Annual Financial Reports Budget Information
Budget Category 2003 Year-End Original Budgeted Amounts 2003 Year-End Final Budgeted Amounts 2003 Year-End Actual Amounts 2003 Year-End Variance with Final Budget Total Revenues $8,441,948 $8,441,948 $8,501,910 $59,962 Expenditures Payroll and related 6,410,790 6,410,790 5,687,830 722,960 Data processing 184,190 184,190 158,771 25,419 Transportation 165,200 165,200 164,693 507 Rentals 36,970 36,970 35,450 1,520 Legal and professional 348,000 348,000 662,662 (314,662) Telephone and utilities 131,850 131,850 118,771 13,079 Other 853,120 853,120 791,506 61,614 Contingency 0 422,862 0 422,862 Capital Outlay 116,500 116,500 300,666 (184,166) Debt Service - Principal 181,164 181,164 155,101 26,063 Debt Service - Interest 14,164 14,164 10,560 3,604 Total Expenditures $8,441,948 $8,864,810 $8,086,010 $778,800 Excess of budgeted/actual revenues over expenditures $0 ($422,862) $415,900 $838,762 Source: Travis CAD Annual Financial Report, Year ended December 31, 2003.
Rather than crediting unexpended amounts to the taxing units, Travis CAD's chief appraiser retained unexpended balances. The chief appraiser asked the board to approve retaining these balances, rather than crediting them to the taxing jurisdictions, explaining that "...[Travis CAD] has a fund balance of $422,862 as of 12/31/02 which we would like to retain as a contingency for litigation." It is unclear why the $422,862 was added to the contingency budget category instead of the legal and professional budget category, in which attorney settlements and fees funds are held. By not placing the funds in a specific category, the intended use for the funds is not clear for accounting purposes or to the public disclosure.
At the end of 2003, Travis CAD carried forward $838,762 as "unreserved fund balances." As Travis CAD's independent accountant reported in the 2003 Annual Financial Report, "...[Travis CAD] may be subject to refunding any excess fund balance to the various taxing jurisdictions."
While the taxing units receive timely notice of the CAD's annual request and intent to amend the budget to retain the available fund balance as a contingency for litigation, the law does not specifically provide an exception to the requirement to credit excess amounts to taxing units annually or make an allowance for expenditures that are obligated to be spent in a fiscal year.
Budgeted Line Item Expenditures Exceeding Approved Amounts
Sections 6.06 (b) and (c), Tax Code, provide that the board must approve a budget and may amend it at any time. Travis CAD's 2004 budget overview contains the following policy statement which was also included in previous years' budgets regarding transferring funds between line items:
Policy StatementThe Board of Directors of the Travis Central Appraisal District may transfer funds between line items of the 2004 budget if the action does not obligate jurisdictions to additional payments.
Travis CAD exceeded its budget for attorney costs and settlements in four years (2002, 2003, 2004 and 2005). The review team found no documentation showing that board approval was obtained to transfer funds between line items, authorizing the additional expenditures. The unauthorized overage for 2003 is included in Exhibit 6's legal and professional budget line item.
In both 2002 and 2003, Travis CAD adopted an original budget and made no amendments during the fiscal year, but nine to 10 months later, while presenting the external auditor's annual financial report to the board for approval, added a single budget amendment to the contingency category that changed its balance from zero to the total amount of unexpended balances for the previous budget year. (In Exhibit 6, the contingency budget category was originally at zero; the final budget for this category was $422,862.) These funds were combined with other budget category funds unspent at year's end, for a total of $838,762 that was carried forward as "unreserved fund balances."
A budget gives a governmental entity the authority to spend public funds for approved expenditures. Changes to the appraisal district budget must be made by amendment (Section 6.06(c), Tax Code). As the budget is the official record of approved expenditures adherence to the adopted budget is important.
Comply with Tax Code jurisdictions concerning budget and financing and account for the transfer of fund balances.
In 2003 Travis CAD changed the way it procures legal services. While local governmental entities such as appraisal districts are not subject to obtaining bids or entering contracts in procuring professional services, Travis CAD changed its practice of contracting only for professional legal services when the previous contract expired. Other professional services for items like appraisal, external audit and Web site and data management continue to be purchased using contractual agreements.
The CAD pays a monthly retainer for undisclosed legal services. For fiscal 2004, Travis CAD paid two law firms nearly $400,000 for legal services based on bid terms or arrangements unsecured by a contract. The law firm receiving the majority of these payments, Linebarger, Goggan, Blair & Sampson, LLP, had a contract with Travis CAD that expired at the end of 2002. Travis CAD issued a request for proposals for legal services in late 2002, receiving four proposals before the deadline, and the board approved the continued use of Linebarger, Goggan, Blair & Sampson as the primary legal firm.
The expired contract was not renewed, however, nor was a new legal services contract signed for 2003 or 2004. In 2005, Travis CAD continues to obtain attorney services from two firms without updated bids or a signed contract. As part of Linebarger, Goggan, Blair & Sampson's monthly payment, Travis CAD pays a $700 per month "general retainer." In their 2002 proposal to Travis CAD, Linebarger, Goggan, Blair & Sampson, LLP provided a legislative report. During the most recent legislative session, the firm brought various legislative matters to the attention of the chief appraiser.
In the absence of clear contract or bid terms or some type of written agreement, the public does not know what type of services Travis CAD is purchasing. Since the CAD's legal service purchases have no defined key staff or deliverables, or work products tied to specific payments, it is unclear who can request what and how much work in exchange for the monthly fee, and how long the agreement is in effect. The expected term of the general retainer is unknown as well.
Apply accepted Travis CAD professional service purchasing practices to all professional service purchases, including legal services.
Clearly define the authority, responsibility, deliverable and payment terms when procuring professional legal services, as is the current practice when purchasing other types of professional services.
The chief appraiser is responsible for hiring, firing and training personnel, ensuring compliance with a wide range of legal requirements and maintaining policies and procedures for effective office operations. The district also must comply with Comptroller rules concerning application forms and appraisal records.
The chief appraiser is required by law to prepare and certify an appraisal roll for each taxing unit in the district. The district completed certification of the appraisal roll for the 2003 tax year according to the law.
Travis CAD maintains a comprehensive set of day-to-day policies and detailed procedures addressing administrative operations and property appraisal. According to Travis CAD staff, procedures are updated routinely as needed to incorporate law changes or new processes that have been adopted.
Administrative operations procedures address open records inquiries, processing mail, records management, appraisal review board (ARB) hearings, customer service and training. Personnel procedures and daily financial operations such as payroll processing and purchasing are addressed in separate documents.
The district also has procedures for mass appraisal, open-space land appraisal and the handling of exemptions. Other district functions with procedural or policy documentation include mapping, information technology, ratio studies, improved sales, land sales, property identification and special public and taxpayer notices. Travis CAD recently completed a new policy for use in mass appraisal with its new PACS system that instructs users in how to revalue neighborhoods. The new use policy was needed because the new system requires more appraiser input than the old one.
Travis CAD has a comprehensive set of policy and procedure manuals for property appraisal and administrative support operations.
The district does not have a process to ensure that its procedures and policies manuals are kept current. According to Travis CAD, district staff update manuals whenever legislative changes occur.
The review team, however, found that the purchasing limitations section was last revised in 1996, and incorrectly referred to a limitation in Section 6.11(a) of the Tax Code as $15,000 instead of $25,000. When asked, Travis CAD's manager of Finance and Accounting acknowledged the error. Current staff members are aware of the correct threshold but new staff members would not be able to obtain the correct information from the procedures manual.
Travis CAD employees enjoy an average tenure of more than 10 years, so many years of institutional staff knowledge are shared informally-but this situation is subject to change for any number of reasons, such as spouse relocations, job changes, retirements, etc.
The International Standards Organization recommends a standard written procedure for revising and updating procedures. One important aspect in maintaining quality procedures is to compare documented procedures to the way functions are actually performed, ensuring that documentation accurately represents current processes.
Current policies and procedures ensure that information is available to continue district operations regardless of any one employee's presence at work. Successful appraisal districts ensure smooth transitions and continued operations while informing staff and the public about how daily operations are to be conducted by maintaining current policy and procedure manuals.
Implement a process for updating policy and procedure manuals.
Appraisal districts use information technology to provide detailed records that are easily accessible to staff members and the public. Information technology allows staff to effectively manage large amounts of data on individual properties and makes the appraisal process more efficient.
Travis CAD uses a highly sophisticated information technology system for appraising property in the district. Its Property Appraisal and Collection Software (PACS) allows the district to meet the requirements of Section 23.01 of the Tax Code, which requires that all appraisals must consider the individual characteristics of the subject property. The system can analyze sales data, perform ratio studies, display pictures of all properties and keep historical appraisal data on each property for 10 years.
The chief appraiser and appraisal district management said that without a complete and reliable source of information on sales, the quality of mass appraisal would suffer. PACS allows appraisers to access all the data needed to analyze sales and make comparisons to other, similar properties. It also allows the district to run ratio studies on sold properties to update its appraisal schedules, and assists in the record-keeping for ownership, exemptions and values.
The software also can show pictures of properties from different views. For example, an appraiser can enter pictures of each view of a house along with the measurements of the structure, into the system. This helps the district in the reappraisal process by showing improvements that existed at the last inspection of the property. In addition, the PACS system can assess appraisal trends over time since it retains ten years of data.
The district has an automated appraisal system that exceeds Tax Code requirements.
Vendor contracts and services are a standard part of Travis CAD operations but the district does not have a formal, written contract monitoring process. Contract processing is accomplished informally between district staff and chief appraiser. The chief appraiser orally assigns contract monitoring responsibilities to individuals as needed. Exhibit 7 presents a summary of contract items.
Travis CAD Contract Summary
Contract Type With Appraisal Services Capitol Appraisal Group, Inc. Computerized Appraisal System Hardware, Software, Software Maintenance and Production Services Contract True Automation - Property Appraisal and Collection Software External Audit George Chester Draper III, CPA Web site and Data Maintenance TaxNetUSA Source: Travis CAD records, 2005.
IAAO's Standard on Contracting for Assessment Services, Section 5, requires monitoring contract performance. While Travis CAD's chief appraiser informally assigns contract monitors, other CAD staff who may be involved with the contractors are unaware of the assigned monitors. The district's accountant receives all contractor invoices, prepares them for payment and forwards them to the chief appraiser for approval. The district does not have a formal process that routinely requires progress reports from its contractors. It has no formal or informal conflict resolution procedures in place in the event of contract disputes.
For example, Travis CAD contracts with an out-of-town vendor to maintain and update its Web site. When a review team member met with the district's supervisor of real property to obtain property appraisal cards on selected properties, both noted that some of the historical and current assessed values on the cards differed from information culled from the Travis CAD Web site. An individual in the public information area also noted that the district's Web site information is frequently wrong. A sampling of the observed differences is shown in Exhibit 8.
Sample Comparison of Property Information
Travis CAD's Web site and Office Public Information Terminals
Property Travis CAD Web site 2004
Travis CAD Office Public Terminal 2004
Difference between Web Site and Office Terminal
2000 Westlake Dr $226,659 $379,574 ($152,915) 109 " 184,711 230,889 (46,178) 200 " 262,678 262,678 0 2007 " 274,298 342,872 (68,574) 2015 " 436,098 545,123 (109,025) 205 " 48,922 154,902 (105,980) 209 " 168,296 210,370 (42,074) 300 " 526,535 658,169 (131,634) 3003 " 819,022 1,023,777 (204,755) 3009 " 1,883,200 1,883,200 0 301 " 76,474 176,843 (100,369) 3011 " 743,288 743,288 0 302 " 257,563 321,954 (64,391) 303 " 145,275 181,594 (36,319) 305 " 130,590 163,238 (32,648) 307 " 151,283 189,104 (37,821) 107 " 45,372 45,372 0 100 Westlake Dr 202,500 202,500 0 1011 " 780,460 780,460 0 102 " 1,580,989 1,500,989 (80,000) Source: Travis CAD Web site, late April 2005 and Travis CAD Office Public Information Terminals, early May 2005.
According to district staff, the Web site's appraisal roll information was not updated between October 22, 2004 and April 5, 2005 due to transition to a new computer system. When asked about the value differences, Travis CAD staff responded that they were not responsible for the Web site or its accuracy, and indeed the site features a disclaimer: "This information is intended for reference only and is subject to change. It may not accurately reflect the complete status of the account as actually carried in Travis Central Appraisal District's database and should not be used as a basis of protest or appeal."
Vendor Web site updates appear to contain errors in historical and current assessed values and are not being made in a timely fashion, causing inaccurate data to be presented for public use. The review team's experience, as well as some comments from public users, suggests that the Web site information generally is not reliable, even for general reference purposes.
A good contract monitoring process includes procedures that identify a contract monitor and specify the duties the monitor should perform for each contract. Without formal contract monitoring, the district cannot confirm that it has received the quality or quantity of services specified in the contract.
Adopt a formal contract monitoring process.
Personnel and human resources management are a critical function of appraisal districts. The function includes recruiting, hiring, classification and compensation, benefit administration, training and development and performance evaluation, as well as compliance with equal employment opportunity statutes and other applicable federal and state laws.
The Travis CAD staff is profiled in Exhibit 9.
Travis Central Appraisal District Positions, Certifications, Years with Travis CAD and Salaries
Salary* Chief Appraiser RPA, RTA 16.8 $114,999 Director Finance - 18.3 71,999 Director of Litigation RPA 23.7 69,999 Human Resource Director - 23.0 69,999 Executive Assistant - 17.2 45,760 Administrative Assistant - 2.3 35,172 Exemptions Administrator - 8.3 35,172 Mail Clerk/Messenger - 1.6 23,691 Building/Grounds Custodian - 1.2 22,193 IT Director - 30.7 102,999 Network Systems Manager RPA 15.0 79,999 Database Analyst & Network Administrator Class III 7.2 57,553 Help Desk Tech/Tech Support - 19.2 55,723 Network Support Specialist - 1.3 44,262 Help Desk Tech/Appl Support - 16.4 41,454 Records Management Officer - 16.0 38,792 Records Analyst - vacant 36,316 Help Desk Tech/Support Spec - 15.8 35,172 Supervisor, Information & Assistance - 31.8 65,000 Assistant Supervisor Information & Assistance - 17.8 47,278 Information Spec III - 21.4 38,792 Information Spec III - 16.0 35,172 Information Spec III - 10.4 31,844 Receptionist/Operator - 3.2 27,019 Information Spec I - 1.9 22,942 Information Spec I - 3.6 22,942 Information Spec I - 0.8 22,193 Information Spec I - 0.7 22,193 Information Spec I - 6.7 22,193 Information Spec I - 1.8 21,465 Information Spec II - vacant 20,779 Supervisor, Property ID - 24.1 69,999 Assistant Supervisor, Property ID - 23.6 53,955 PID Coordinator - 24.7 47,278 Computer Mapping Software Spec - 21.8 38,792 Records Specialist II - 14.2 34,028 Computer Mapping Tech II - 29.3 34,028 Records Specialist II - 8.8 29,827 Computer Mapping Tech II - 4.0 26,166 Records Specialist I - 9.6 25,292 Records Specialist - 2.8 22,942 Computer Mapping Tech II - vacant 22,942 Records Specialist - 1.1 20,113 Records Specialist - 0.1 19,468 Records Specialist - vacant 19,468 Director Personal Property RPA 18.9 67,999 Appraiser IV RPA 15.2 45,760 Appraiser IV RPA 33.8 45,760 Appraiser IV RPA 19.5 42,806 Industrial Valuation Specialist Class II 1.3 42,806 Appraiser IV RPA 7.6 41,454 Appraiser IV RPA 7.0 41,454 Quality Control Specialist - 21.4 38,792 Accounts Examiner Class III 1.3 37,523 Appraiser II Class II 0.2 34,028 Appraiser II Class II 0.1 34,028 Appraiser II Class II vacant 34,028 Administrative Assistant - 13.8 31,844 Support Specialist II - 7.3 24,502 Support Specialist I - 4.5 22,942 Support Specialist I - 0.5 20,779 Support Specialist I - 0.1 19,468 Director Real Property RPA 20.7 82,499 Supervisor Residential Appraisal RPA 18.6 55,723 Director Residential Appraisal RPA 20.5 55,723 Support Staff Supervisor - 7.2 52,249 Senior Commercial Appraiser RPA 34.7 52,249 Senior Residential Appraiser RPA 23.8 52,249 Senior Commercial Appraiser RPA 10.2 50,481 Senior Commercial Appraiser RPA 8.4 47,278 Commercial Appraiser Class III 3.3 45,760 Senior Residential Appraiser RPA 24.1 45,760 Senior Residential Appraiser RPA 22.0 45,760 Senior Residential Appraiser RPA 21.5 45,760 Commercial Appraiser RPA 20.4 45,760 Commercial Appraiser RPA 2.7 45,760 Senior Commercial Appraiser RPA 9.1 45,760 Commercial Appraiser RPA 6.8 45,760 Senior Residential Appraiser RPA 5.3 42,806 Senior Residential Appraiser RPA 6.1 40,102 Appraiser III RPA 6.6 40,102 Appraiser III RPA 5.3 40,102 Appraiser III RPA 5.3 40,102 Quality Control Specialist - 32.1 38,792 Appraiser III RPA 6.0 38,792 Appraiser III RPA 4.0 38,792 Quality Control Specialist - 19.4 38,792 Appraiser III RPA 4.4 38,792 Appraiser II Class III 3.3 36,316 Appraiser III Class III 2.8 36,316 Appraiser II Class II 0.7 36,316 Appraiser II Class II 1.3 35,172 Appraiser III Class II 0.1 35,172 Appraiser II Class II 0.1 32,926 Assistant Support Staff Supervisor - vacant 32,926 Administrative Assistant Class II 4.8 30,846 Data Collector II RPA 5.0 26,166 Administrative Support Specialist - vacant 26,166 Support Specialist II - 5.8 24,502 Support Specialist II - 4.2 22,942 Support Specialist III - 0.8 22,193 Support Specialist I - 3.9 22,193 Support Specialist I - 2.8 21,465 Support Specialist III - 0.1 21,465 Support Specialist II - vacant 20,779 Support Specialist I - 0.8 $20,113 Source: Travis CAD, June 21, 2005.
* Budgeted position and salary as of June 21, 2005.
District employees who conduct appraisals must be registered professional appraisers (RPAs) or to be working towards certification as an RPA; the latter must be certified within five years of their hire date. Interim certifications include Class II and Class III. In addition, RPAs must recertify every five years to remain registered. All Travis CAD appraisers are properly registered.
Travis CAD has a successful systematic approach to completing annual performance evaluations.
A Travis CAD employee's performance of assigned duties and other job-related criteria provides the basis for an annual (at minimum) employee evaluation. Employees are informed of the criteria on which they will be evaluated. Evaluation and performance appraisal ratings are based on the evaluation instrument and cumulative performance data gathered by supervisors and the chief appraiser throughout the year.
Each employee has at least one conference with his or her manager annually to discuss the written evaluation, and may have as many conferences about job performance as the chief appraiser deems necessary. Evaluation records and forms, reports, correspondence and memoranda are placed in each employee's personnel records, and all records that support appraisal ratings are maintained for at least two years. Official appraisal records are maintained throughout a person's employment with the district and for two years after he or she leaves the district. All employees receive a copy of their annual written evaluations.
As IAAO's Property Appraisal and Assessment Administration book states, "Although employees may improve their skills by their own efforts and the help of peers, managers have organizational responsibility for employee development. They use training, education, counseling, and performance reviews to identify talents and help employees grow."
Travis CAD has a successful systematic approach to completing annual staff performance appraisals.
The board has no written process for evaluating the chief appraiser. Travis CAD was able to provide a job description for the position, but no documentation on the chief appraiser's performance. The board typically evaluates the chief appraiser in executive session.
Chief appraisers are responsible for ensuring that competent staff members are hired, procedures are documented, appraisals are performed, employees are evaluated and all other functions performed by an appraisal district. A qualified chief appraiser is essential to effective district operations.
Without an objective system to ensure that the board and the chief appraiser agree as to expectations for the position, growth may be limited because performance evaluations may be subjective and based on emotion rather than actual performance. A good performance evaluation system outlines the behaviors expected of the chief appraiser and what the board expects the chief appraiser to accomplish each year.
Adopt an annual evaluation process for the chief appraiser position.
Some Travis CAD board and appraisal review board members have not complied with district policies requiring board members to file an annual financial disclosure and sign an agreement to abide by the district's code of ethics.
The board's adopted policy, Policy Relative to Financial Disclosure Requirements & Standards of Conduct of Members of the Travis Central Appraisal District Board of Directors, Appraisal Review Board and Employees requires both a code of ethics affidavit and financial disclosure form. Exhibit 10 lists the compliance status of current board members.
Travis CAD Board of Directors Compliance with Financial Disclosure and Ethics Policy
Board of Directors Member Most Recent
Annual Financial Disclosure
Report on File*
Tom Granger, Chairman 1997 Yes Lon Brooks 2002 No Dennis Jones 2003 No Kristoffer S. Lands 2000 No Richard Lavine 2004 Yes Nash Martinez None No Eleanor Powell 2003 Yes Nelda Wells Spears 2000 No June J. Kunkel 2004 No Blanca Zamora-Garcia, Secretary 2004 Yes Source: Travis CAD records, April 2005.
*Initial filing due prior to consideration for appointment; thereafter, annual filings due by the 30th day of the twelfth month following the appointment.
Exhibit 11 lists the compliance status of ARB members.
Travis CAD 2005-06 Appraisal Review Board Members
Compliance with Financial Disclosure and Ethics Policy
Appraisal Review Board Member Most Recent Annual
Financial Disclosure Report
Mr. Martin Benavides 2004 Yes Mr. Alton Benner 2004 Yes Mrs. Rebecca Berryhill 2004 No Mr. Frederick R. Box 2004 Yes Mr. Don B. Burnett None No Ms. Irene Camacho None No Ms. Christine L. Carter 2004 Yes Ms. Alicia D. Carter 2000 No Ms. Brenda G. Collier 2001 Yes Ms. Carla M. Collins 1999 No Mr. Michael J. Dabbs None No Ms. Maria Emerson 2004 Yes Ms. Dorothy Filley 2003 Yes Mr. Robert C. Flowers 2004 Yes Ms. Pam J. Foster 2003 Yes Ms. Margo George None No Ms. Rita M. Henderson 2004 Yes Mr. James R. Irion III 2004 No Mr. Ed Keller 2004 Yes Mr. James C. Koch 2004 Yes Mr. Randall R. Lerche 2004 No Mr. Arthur T. Moreno None No Mr. Charles H. Pennie 2004 No Mr. Barbara E. Powell 2004 Yes Mr. William J. Robinson 2004 No Mr. Earle H. Ross 2004 No Ms. Harriet "Jean" Smootz None No Ms. Jan D. Swaab 2003 Yes Mr. Harold G. Warren None No Mr. Robert F. Zelsman 2004 Yes Source: Travis CAD records, April 2005.
*Initial filing due prior to consideration by the Board of Directors for appointment; thereafter, annual filings due by the 30th day of the twelfth month following ARB appointment.
The human resources director asks staff, board and appraisal review board members to submit the required ethics verification and asks ARB members to submit the required financial disclosure report, but has not been entirely successful in persuading board and ARB members to comply.
A sample of the Travis CAD staff records, by contrast, showed full compliance with these policies.
As of April 2005, six of 10 board members and 15 of 30 ARB members had not acknowledged receipt of an agreement to abide by Travis CAD's ethics policy; seven of 10 board members and 13 of 30 ARB members had not complied with requirements for submitting annual financial disclosure documentation.
Follow Travis CAD policies for required annual financial disclosure reports and ethics policy affidavits.
There are three major approaches to defining value - cost, income and market - that an appraiser must consider in determining the market value of property. Appraisers must consider all three and use the method most appropriate in appraising each individual property.
Travis CAD's computerized appraisal system allows the district to analyze its appraisals through ratio studies within and among property classifications. According to IAAO's Property Appraisal and Assessment Administration, a ratio study considers the relationship between appraised or assessed values assigned by the CAD and market values as gauged by sales or independent "expert" appraisals.
Appraisal districts use ratio studies to plan appraisal maintenance programs. The results indicate areas in the appraisal district whose appraised values no longer reflect market value. If a ratio study shows the appraised values do not reflect the market, the appraisal district considers available sales data to determine the market adjustment factor. The market adjustment factor, in turn, is the percentage the appraisal district uses to adjust its appraisal schedules to reflect current market value.
The appraisal district's automated system will produce ratio studies statistics on demand. Staff can input property sales information and identify the market area to be studied. District policies call for the use of ratio studies to consider whether property values are set properly.
Frequent ratio studies and the revaluations allow an appraisal district to keep its values at or near market. Ratio studies also can be used to measure district appraisal performance. Travis CAD has a comprehensive ratio study system.
Travis CAD has excellent computer capabilities for performing ratio studies.
Travis CAD does not use all of its software system's capabilities. Specifically, Travis CAD does not use the PACS system component that provides for mass appraisal by neighborhood. Instead, the appraisal staff routinely adjusts selected neighborhood and property values.
A sample and comparison of changes in assessed property values in three areas within Travis CAD showed that values were not changing consistently. In some cases, sold properties increased, while other properties in the area decreased. Neither the change in values nor the square-foot price were consistent in this sample. The reviewers provided these findings, including property details, to Travis CAD staff and asked for an explanation or description of the mass appraisal or consistent pattern they are applying within these areas. Travis CAD staff provided a limited response that did not adequately address the review team's initial request or follow-up contacts about the inconsistencies as of late September 2005.
Travis CAD's data processing manager explained that the district's PACS system can perform mass appraisal if instructed by "rules" set by the appraisal teams, such as a rule that could update all properties in a neighborhood to standard per-square-foot values based on recent sales. To date, however, the appraisal staff has not set up "rules" for the computer to use.
Successful appraisal districts maximize their use of available staff and software capabilities to ensure appraisal consistency and accuracy.
Improve mass appraisal consistency.
To take full advantage of the PACS system's capabilities, the district should write rules telling the computer how to apply data to property values in specific areas and routinely update or revise these rules as new information becomes available. This should yield more consistent results than individual or selected adjustments of property values.
Travis CAD's standardized approach to appraising Lago Vista ISD lakefront properties did not recognize or account for the unique and differing characteristics of neighboring lakefront properties, attributing to Lago Vista ISD values being outside the margin of error in the 2003 PVS. Travis CAD managers said that Lago Vista is an "odd duck" because the area has many out-of-town and absentee buyers/owners, numerous vacant lots and properties with many unique characteristics. The city has a homeowners' association, but water and sewer utilities do not reach all lots.
Tax Code Section 23.01 (b) requires that,"...each property shall be appraised based upon the individual characteristics that affect the property's market value."
The relevant portions of Travis CAD's General Appraisal Manual are Section 2, Page 2-2, which gives the responsibilities to areas within Travis County, and Section 3, Page 3-1, which defines neighborhoods and, implicitly, the use of what is known as "bracketing" to yield values that reflect the unique characteristics of a particular area. This practice complies with standard mass appraisal techniques.
Section 5 of Travis CAD's General Appraisal Manual gives recognition to land regions, which is applying "bracketing" to reflect the geographic parameters for regions so that sales can be grouped to reflect the general market trends within a bracket.
Travis CAD applied standardized bracketing without fully adjusting for the following unique Lago Vista lakefront property attributes:
- inconsistent utility access or infrastructure;
- highly variable amounts of usable land across this area due to varying elevation and terrain conditions;
- unusual properties with extremely limited access and little infrastructure for development, as well as floodplain issues.
Travis CAD uses the sales comparison approach to appraise land by collecting and verifying land sales to create a land schedule. Parameters used include location, size, utilities, topography and frontage, but value is based on sales comparison. Travis CAD defines neighborhoods for land appraisal only; vacant land is separated by neighborhood. For example, Lago Vista ISD has a guideline for what the neighborhood is: base price of the lot and then adjusted for view, lakefront, utilities, etc.
The review team learned that unique property attribute variations are not generally reflected accurately in these Travis CAD property appraisals. The review team inspected randomly selected lakefront and lakeview properties across the Lago Vista ISD lakefront area and found inaccuracies in the appraisal card information.
Appraisal district staff explained that Lago Vista's neighborhood is like a resort or vacation area, in that some owners live in the area and some live in foreign countries. It is not uncommon for absentee landowners to abandon property with special characteristics, and in the past several years many Lago Vista properties have been abandoned. These properties were sold on the courthouse steps mainly to two purchasers for small percentages of the appraised property values, some as low as $1,000 per lot. More than 1,000 properties were acquired by these two buyers and later resold; about 80 properties remain in inventory. This area does not routinely have many property sales that qualify as market transactions and annual property sales do not occur consistently.
This lack of current, accurate appraisal data and few existing sales contributed to the overall undervaluing of Lago Vista ISD lakefront properties, causing Travis CAD to meet the 2003 PVS eligibility criteria for an appraisal standards review.
Successful appraisal districts apply adequate appraisal resources as needed to ensure accurate assessments by complying with the Tax Code requirement that properties be appraised based upon individual characteristics affecting their market value.
Renew efforts to update Lago Vista land characteristics.
The revised approach should include periodic inspection of these properties to accurately identify and note existing attributes on appraisal cards.