Findings of the Property Value Study and Summary
Overview of Property Value Study
The annual PVS estimates the total taxable property value in each school district in Val Verde CAD. With a few notable exceptions, the law requires all CADs and PTAD to appraise property at market value. Market value, in essence, is the price a willing buyer would pay a willing seller for the property under normal conditions. Agricultural land and timberland, however, are appraised according to the productivity value of the land's category.
The CAD determines the local appraisal roll value and certifies it to each school district: these values become the school districts' tax roll values. Each school district must submit an annual self-report of its property values to PTAD, which audits the reports for accuracy.
PTAD's estimate of the total taxable value in a school district, called the state value, is made by estimating market value or by accepting the local appraised value in each property category and then adding these category values for an overall school district value. PTAD then deducts the school district's self-reported, state-mandated homestead exemptions, disabled veterans exemptions, value limitations, reinvestment zones, freeport exemptions, the loss between market value and productivity value of qualified agricultural lands, the school tax ceiling for homeowners aged 65 and older or with a disability and other state-mandated exemptions. The result is the school district's total taxable value.
PTAD issues a preliminary and a final PVS each year. School districts and CADs may protest the findings of the preliminary PVS through an administrative hearings process. This process requires the protester to file a written protest with supporting documentation within 40 days of the issuance of the preliminary PVS. PTAD may amend the findings of the preliminary PVS based on the submission of a written protest, a conference between PTAD and CAD representatives or a formal hearing. A hearings examiner appointed by the Comptroller's general counsel holds the formal hearing; this person is not a PTAD employee. A school district that disagrees with the hearing examiner's final decision may appeal it to Travis County District Court.
When conducting the PVS, PTAD assigns property to various categories, such as residential, commercial and rural property, so like property can be studied together.
In general, a ratio indicates the percentage of market value, as determined by PTAD, at which a CAD appraises a property or group of properties. A ratio of 1.0 indicates appraisal at market value – the legal standard. Generally, appraisals with ratios that are close to the standard, for instance between 0.95 and 1.05, are considered reasonably accurate for a property group.
Eligible School Districts
In the 2007 PVS, Comstock ISD fell outside the study's statistical margin of error and became an eligible school district, leading to this ASR. The statistical margin of error, or confidence interval, is a range of school district values that the Comptroller has accepted.
Four property categories were tested in Comstock ISD:
- Category A, Single-Family Residential;
- Category D, Rural Real;
- Category G, Oil, Gas and Mineral Leases; and
- Category J, Utilities.
Category A made up 9 percent of the ISD's total test value and 8 percent of its total value. A review of the Category A sample ratios in the 2007 PVS indicates that the CAD appraised from as low as 77 percent to a high of 147 percent of market value, with a weighted mean ratio of 0.95.
Category D made up 25 percent of the ISD's total test value and 22 percent of its total value. Category D includes two subcategories: productivity value of qualifying acres (D1), which is primarily farm and ranch land that qualifies for the special productivity appraisal; and non-qualifying acres and farm and ranch improvements (D3), which are primarily rural homes and land that do not qualify as farm, ranch or timberlands. The differences in value between Subcategories D1 and D3 are wide since D1 is appraised using a special statutory method to determine the land's productivity value, and D3 is based on what the land would sell for in an open-market transaction.
Subcategory D1 made up 12 percent of the ISD's total test value and 11 percent of its total value. The category ratio tested was 0.91.
Subcategory D3 made up 13 percent of the ISD's total test value and 11 percent of its total value. The CAD appraised Subcategory D3 from as low as 70 percent to a high of 98 percent of market value, with a weighted mean ratio of 0.81.
Category G made up 55 percent of the ISD's total test value and 49 percent of its total value. A review of the Category G sample ratios in the 2007 PVS indicates the CAD appraised from as low as 74 percent to a high of 130 percent of market value, with a weighted mean ratio of 0.98.
Category J made up 11 percent of the ISD's total test value and 14 percent of the ISD's total value. A review of the Category J sample ratios in the 2007 PVS indicates the CAD appraised from as low as 98 percent to a high of 100 percent of market value, with a weighted mean ratio of 1.00.
While these figures show the range of property ratios in Val Verde CAD, a clearer measure of appraisal performance includes how many of these ratios were within 10 to 25 percent of the median ratio. The median ratio is the ratio in the middle of all the other ratios when sorted by size.
These figures, in conjunction with the coefficients of dispersion (CODs) outlined ahead, measure the consistency of a CAD's property appraisals at the same percentage of market value, without regard to value. A low COD combined with high ratios indicate equitable appraisals; while a high COD paired with low ratios indicate inequitable appraisals.
The median ratio Category A was 96 percent, with 82 percent of the ratios within 10 percent of the median and 94 percent within 25 percent of the median ratio.
The median ratio for Subcategory D3 was 92 percent, with 89 percent of the ratios within 10 percent of the median and 89 percent within 25 percent of the median ratio.
The median ratio for Category G was 98 percent, with 80 percent of the ratios within 10 percent of the median and 98 percent within 25 percent of the median ratio.
The median ratio for Category J was 99 percent, with 100 percent of the ratios within both 10 percent and 25 percent of the median ratio.
Val Verde CAD Summary
The Val Verde CAD overall median ratio was 0.96.
Category A sample ratios ranged from 0.40 to 4.38. The median ratio was 0.95.
Subcategory D3 sample ratios ranged from 0.07 to 0.98. The median ratio was 0.92.
Category F1, Real Property: Commercial sample ratios ranged from 0.46 to 1.56. The median ratio was 0.98.
Category G sample ratios ranged from 0.74 to 1.30. The median ratio was 0.98.
Category J sample ratios ranged from 0.98 to 1.00. The median ratio was 0.88.
Category L1, Personal Property: Commercial sample ratios ranged from 0.85 to 1.35. The median ratio was 1.01.
Coefficient of Dispersion
The 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 category of property are uniform, while a high COD indicates property is being appraised at inconsistent percentages of market value. A COD that is very low, however, may indicate "sales chasing," a form of unequal appraisal.
According to IAAO's Standard on Ratio Studies, CODs for single-family residential should generally be 15 or less, and 10 or less for new and fairly homogeneous areas. For vacant lots, and for income-producing property, the COD should be 20 or less. For other real property and personal property, CODs should reflect the nature of the property, market conditions and the availability of reliable market indicators.
The 2007 CODs for Val Verde CAD were as follows:
- Category A was 22.15;
- Category D was 9.61;
- Category F1 was 7.56;
- Category G was 6.12;
- Category J was 6.82; and
- Category L1 was 6.71.
The 2007 CODs for Comstock ISD were as follows:
- Category A was 7;
- Category D was 10;
- Category G was 6; and
- Category J was 1.
With the exception of Category A in Val Verde CAD, these numbers indicate relative uniformity of appraisal in the CAD and ISD.