Appraisal Standards Review
Travis Central Appraisal District Follow-Up Report
May 2007
Summary
In July 2004, the Comptroller identified Lago Vista Independent School District (Lago Vista ISD) as one of 54 school districts in the state meeting the criteria that initiate an Appraisal Standards Review (ASR) of its county appraisal district (CAD). In January 2006, the Comptrollers Property Tax Division (PTD) released the results of an ASR of Travis Central Appraisal District (Travis CAD).
The report made eight recommendations to improve Travis CADs appraisal practices and operations. The intent of ASRs is to determine why the local value is invalid and to recommend changes in operations and management that would improve appraisal practices. The Travis CAD review evaluated five areas: board of directors; appraisal district policies, procedures and operations; information processing systems; staffing, personnel qualifications and positions; and generally accepted appraisal practices, equality and uniformity of appraisal standards.
At the time of the review, Travis CAD faced a number of challenges including:
- improving mass appraisal consistency; and
- renewing efforts to update Lago Vista land characteristics.
Texas Property Tax Code Section 5.102(d) requires that if the appraisal district fails to comply with the recommendations in the report, and the Comptroller finds that the board of directors of the appraisal district failed to take remedial action before the first anniversary of the date the report was issued, the Comptroller shall notify the judge of each district court in the county for which the appraisal district is established. The judge shall then appoint a five-member board of conservators to implement the recommendations. The board of conservators shall exercise supervision and control over the appraisal districts operations until the Comptroller determines under Section 403.302, Government Code, that in the same year the taxable value of each school district for which the appraisal district appraises property is the local value for the school district. The appraisal district shall bear the costs related to the supervision and control of the district by the board of conservators.
For the one-year follow-up report, an appraisal district complies with the statute if it takes remedial action to implement the recommendations in the ASR. Remedial action means the CAD has corrected or intends to correct, remedy or improve the deficiencies identified in the ASR. A CAD demonstrates remedial action by having implemented or nearly completed most of the recommendations by the first year anniversary of the release of the report. In some instances, some of the recommendations require a strong commitment by the board to complete. The Comptroller recognizes that some recommendations included in ASRs require more than a year to implement. Some ASRs include more recommendations than a CAD with limited resources can implement within a year. So long as the CAD is working at remediation of the findings, the Comptroller will continue to work with the CAD to achieve full compliance and will continue to monitor the CADs performance until it implements all recommendations. CADs that complete all recommendations by the one-year anniversary meet their statutory obligations and do not require additional monitoring.
In January 2007, PTD reviewed the progress made by Travis CAD in implementing the recommendations found in the original report. Travis CAD has fully implemented all eight recommendations.
PTD mailed surveys to Travis CADs board members soliciting their views and comments on the ASR. None of the board members responded.
PTD believes that Travis CAD met the state's legal requirements.
History and Significant Events
Travis CAD received an ASR because the 2003 PVS found property values in Lago Vista ISD to be invalid. Specifically, the PVS found that the CAD was undervaluing single-family residential and rural properties in Lago Vista ISD. The PVS found the weighted mean ratio to be 0.9491 for single-family residences and 0.8185 for rural residences.
The preliminary findings in the 2006 PVS indicated all of the ISDs in Travis CAD were within the confidence interval, and local value was certified, indicating the CAD is now accurately assessing property values.
Status of Recommendations;
What Remains to Be Done
Appendix A lists the eight recommendations identified in the original report, with a summary of actions to date. The CAD has completed all of the recommendations.
Appendix A
Travis Central Appraisal District Appraisal Standards Review Implementation Status Report
2.1 Board of Directors
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 1 | Comply with Tax Code jurisdictions concerning budget and financing and account for the transfer of fund balances. | Complete |
The CAD provided a copy of the 2007 adopted budget, which explains the revised policy concerning the handling of the fund balance. The CAD will budget for legal contingencies and credit the taxing entities for any excess fund balances as provided by law. Board approval is required to transfer funds between line items. The finance director and the chief appraiser review the budget at least once a month and determine when they need to transfer funds. If the board needs to make transfers, they are included on the agenda for the next board meeting. |
|
| 2 | Apply accepted Travis CAD professional service purchasing practices to all professional service purchases, including legal services. | Complete |
The CAD hired an in-house attorney to handle most of its litigation, but it still plans to use an outside firm for some of the work and has obtained a contract for these legal services. |
2.2 Appraisal District Policies, Procedures and Operations
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 3 | Implement a process for updating policy and procedure manuals. | Complete |
The various divisions within the CAD now have processes for updating manuals. The CAD updated its finance policy to change the purchasing limitation from $15,000 to $25,000. The board approved this change at its November 2005 meeting. |
2.3 Information Processing Systems
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 4 | Adopt a formal contract monitoring process. | Complete |
The CAD developed contract monitoring procedures that outline procurement processes and require user departments to monitor contracts for services. Departments must forward all documentation of non-compliance to the purchasing department, which will then be responsible for initiating corrective action with the vendor. The procedures state that departments do not have authority to change contract terms; the purchasing department must make any changes. User departments must forward all documentation such as delivery tickets, packing slips, performance/non-compliance documentation, invoices and statements to the finance department in a timely manner. |
2.4 Staffing, Personnel Qualifications and Positions
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 5 | Adopt an annual evaluation process for the chief appraiser position. | Complete |
The CAD updated its operating policies to include provisions for evaluating the chief appraiser. The board adopted the updated policies on January 9, 2007. The policy states, "the board shall provide for an annual performance evaluation of the chief appraiser using as a guideline the form in Appendix A." The guideline in Appendix A consists of an evaluation instrument with 24 areas of evaluation with each area having a rating of A through F and a space for comments. The CAD has not evaluated the chief appraiser under its new policy. |
|
| 6 | Follow Travis CAD policies for required annual financial disclosure reports and ethics policy affidavits. | Complete |
All members of the board as well as members of the appraisal review board have filed current financial disclosure documents. The CAD provided documentation to PTD in February 2007. |
2.5 Generally Accepted Appraisal Practices; Equality and Uniformity of Appraisal Standard
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 7 | Improve mass appraisal consistency. | Complete |
The CAD provided details of the steps taken during the valuation process that use appraisal software, including field work, land valuation, removal of temporary adjustments from the prior year, determining values with cost approach, running sales ratios by neighborhood and applying adjustment factors. For example, the CAD computer software updates neighborhood values based on the neighborhood adjustment factors after the CAD runs ratio studies by neighborhood. This allows all properties in the neighborhood to receive a consistent adjustment. The CAD has procedures that call for the software to calculate a neighborhood adjustment factor when adequate sales data are available. In the event adequate sales data are not available, the procedures call for the appraisers to determine if an adjustment factor is necessary. The procedures use the capabilities of the property appraisal computer system (PACS). The chief appraiser reported the CAD uses the procedures in an effort to ensure neighborhoods are equally valued. The document details procedures for: appraising mixed-use neighborhoods; determining if conditions warrant a change in market adjustments; creating a new year's market adjustment; performing mass updates and recalculations; running new profiles and checking ratios; cleaning up sales; making market adjustments and query comparisons; and performing appraisals of high-end homes. The procedures provide staff direction in using the PACS Appraisal system and include examples of various computer "windows" used in the various processes. The procedures provide staff direction in using the PACS Appraisal system to analyze sales in neighborhoods, obtain market adjustments for neighborhoods, mass update neighborhoods and recalculate, calculate ratio studies and reconcile results. |
|
| 8 | Renew efforts to update Lago Vista land characteristics. | Complete |
Travis CAD implemented new procedures to both update and provide new policies is for determining the land characteristics in this area. The procedures call for all values to be set back to cost, reviewing all inventory and development discounts and reviewing all neighborhoods in Lago Vista ISD by as many as five different appraisers and changing neighborhood boundaries to reflect the property characteristics more accurately. In addition, the CAD assigned two appraisers to drive the entire area to review boundary changes. Finally, the CAD is analyzing sales data from the past three to four years to expand the database and give the staff a better picture of how land characteristics influence value in this area. |