Appraisal Standards Review
Victoria County Appraisal District Follow-Up Report
July 2007
Introduction
In July 2004, Victoria Independent School District (Victoria ISD), in Victoria County, Texas, was identified as one of 54 school districts in the state meeting the criteria that initiate an Appraisal Standards Review (ASR) of its county appraisal district. Victoria ISD is one of four school districts served by the appraisal district. In December 2005, the Comptroller’s Property Tax Division (PTD) released the results of its ASR of Victoria County Appraisal District (Victoria CAD).
The report made 10 recommendations to improve Victoria CAD’s appraisal practices and operations. ASRs are intended to determine why the local value is invalid and to recommend changes in operations and management that could improve appraisal practices. The Victoria CAD review evaluated five functional areas: the board of directors; appraisal district policies, procedures and operations; information processing systems; staffing, personnel qualifications and positions; and adherence to generally accepted appraisal practices and the equality and uniformity of appraisal standards.
At the time of the review, challenges facing Victoria CAD included a need for better contract monitoring and effective reappraisals.
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 must notify the judge of each district court in the county for which the appraisal district is established. The judge(s) shall appoint a five-member board of conservators to implement the recommendations. The board of conservators exercises supervision and control over the operations of the appraisal district until the Comptroller determines, under Section 403.302 of the Government Code, that 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 has taken remedial action to implement PTD’s recommendations. Remedial action means that the CAD has corrected or intends to correct, remedy or improve the deficiencies identified in the ASR. Remedial action is generally demonstrated by having implemented or nearly completed most of the recommendations within a year of the report’s release.
The Comptroller recognizes that some ASR recommendations may require more than a year to implement for a CAD with limited resources. As long as the CAD is working to implement the recommendations, the Comptroller’s office will continue to work with the CAD to achieve full compliance. CADs that complete all recommendations by the one-year anniversary have met their statutory obligations and will not require additional monitoring.
The PTD team returned to Victoria CAD in December 2006 to assess its progress in implementing the ASR recommendations. While the review team documented progress in implementing many of the recommendations, some work remains.
PTD sent the CAD’s board members surveys soliciting their views and comments on the ASR. At the time of the follow-up review, none of the board’s six members had responded. When contacted by the reviewer, the board chairman stated that he did not recall receiving a survey, but was encouraged by the CAD’s progress in implementing the ASR recommendations and felt the current chief appraiser is an important asset.
PTD will continue to monitor the CAD’s progress toward meeting the state’s legal requirements. The following pages outline specific steps the CAD still needs to take.
History and Significant Events
Victoria CAD received an ASR because PTD found Victoria ISD’s property values to be invalid; the school district was eligible for the grace period provided in Section 403.3011 of the Government Code. The Property Value Study (PVS) found Victoria ISD’s single-family residential property values fell outside the state’s acceptable value range.
The 2004 and 2005 PVSs show the CAD made progress in improving its appraisal performance; all four school districts within the CAD received valid findings in 2004, and three received valid findings in 2005. Nursery ISD narrowly missed the acceptable value range in 2005. The preliminary 2006 PVS, however, found the taxable value in all Victoria CAD school districts to be valid and certified local value in each case.
What Remains to Be Done
The Appendix that follows lists the 10 recommendations in the ASR and summarizes remedial actions to date. The CAD completed seven recommendations, is working on one and has not addressed the remaining two. The Comptroller acknowledges the work the CAD has performed over the last year and encourages it to remain on task in implementing all recommendations. The current chief appraiser, hired in September 2005, indicated that a lack of time prevented the district from completing all of the recommendations within the past year.
Recommendation 2: Establish a process for bidding contracts competitively and reviewing proposed contracts to ensure contract terms meet the district’s needs.
This recommendation is intended to establish a process for bidding, awarding and monitoring contracts that meets the CAD’s needs and protects its interests, while complying with state purchasing and bidding requirements.
According to the chief appraiser, the CAD has not implemented this recommendation due to a lack of time. He said he intends to present a draft policy on contracts that complies with International Association of Assessing Officers (IAAO) standards to the board by May 2007. When adopted, the policy will become part of the Board of Directors Policy Manual.
The chief appraiser is reviewing IAAO’s Standard on Contracting for Assessment Services and said provisions of the standard will be included in the CAD’s process for bidding and reviewing contracts.
To complete this recommendation, the board should establish a process for bidding and reviewing contracts by the proposed May 2007 date and mail a copy of the policy to PTD no later than July 2007.
Recommendation 4: Develop a complete, written administrative procedures manual.
This recommendation is intended to prompt the development of a comprehensive administrative procedures manual that describes administrative functions in detail and can serve as a training tool for new staff.
The CAD has not implemented this recommendation. The chief appraiser believes this will be a very time-consuming project and worked instead on completing other ASR recommendations in the past year. He said that the administrative staff is highly qualified, have written job descriptions and have been cross-trained so that absences will not interrupt work.
The chief appraiser’s goal is to develop an administrative procedures manual before January 2008. He wants to review other CADs’ administrative procedures manuals to determine specific functions the manual should address.
To complete this recommendation, the chief appraiser should prepare a specific work plan with a timeline that will ensure completion of the manual by January 2008. The chief appraiser should provide the board with regular updates on the manual’s progress and mail a copy of the manual to PTD no later than January 31, 2008.
Recommendation 5: Complete the rural mapping project, develop a plan for the integration of the appraisal system and GIS and integrate the two systems.
This recommendation would enhance appraisal performance and provide CAD staff, taxing entities and the public with improved access to appraisal information.
The CAD has begun implementing this recommendation. In fall 2006, the appraisal district finished mapping rural areas. According to the chief appraiser, the CAD now is in the process of keeping these maps updated.
In August 2006, the chief appraiser developed a work plan for integration of the mapping and appraisal systems. The CAD divided the plan into four phases: selection of mapping software; structuring of data tables; digitized mapping; and integration of the mapping and appraisal systems. The work is now in phase four.
The CAD’s mapper is converting maps into the proper format and uploading them onto the network server so that the vendor for the appraisal system can integrate the two systems. The original plan estimated the CAD would complete the project by May 2007. The chief appraiser, however, indicated that the project has proved more intricate than originally expected. The new expected completion date is February 2008.
To complete this recommendation, the CAD should monitor the progress of this project to ensure its completion by March 2008. The chief appraiser should provide regular updates to the board and submit examples of maps and appraisal cards demonstrating how it is integrating the mapping and appraisal systems to PTD no later than March 2008.
Appendix
Victoria County Appraisal District
Appraisal Standards Review Implementation Status
2.1 Board of Directors
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 1 | Include the detail for each proposed position, including salary and related benefits, and the detail for the capital expenditures in the budget that is submitted to the board. | Complete |
On April 19, 2006, the chief appraiser presented the board with the CAD’s proposed 2007 budget. The budget contained a list of all proposed positions, including salaries and related benefits for each position, as well as an explanation for capital expenditures. The board held budget workshops on April 19, May 10 and July 19, 2006. On August 16, 2006, the board held a budget hearing for the proposed 2007 budget and approved the budget in regular session. |
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| 2 | Establish a process for bidding contracts competitively and reviewing proposed contracts to ensure contract terms meet the district’s needs. |
Not Implemented | July 2007 |
The chief appraiser is reviewing IAAO’s Standard for Contracting for Assessment Services and will incorporate provisions of the standard into the contract procedures by July 2007. |
| 3 | Develop a job description and an evaluation process for the chief appraiser position. |
Complete |
On January 18, 2006, the chief appraiser presented a job description for his position to the board. The chief appraiser said he had reviewed several chief appraisers’ job descriptions and developed a composite description for his job functions. On February 15, 2006, the board approved the Victoria County Appraisal District Chief Appraiser Evaluation form, which tracks the chief appraiser’s job description and uses a five point rating system. The form also contains a section for chief appraiser goals. Board members and the chief appraiser can designate goals and monitor progress between performance appraisals. On July 19, 2006, the board formally evaluated the chief appraiser. |
2.2 Appraisal District Policies, Procedures and Operations
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 4 | Develop a complete, written administrative procedures manual. | Not Implemented | January 2008 |
The chief appraiser cited lack of time as the reason for not completing this recommendation, but plans to complete a written administrative procedures manual by January 2008. The chief appraiser will review other appraisal district administrative procedures manuals for ideas on what to include in Victoria CAD’s manual. |
2.3 Information Processing Systems
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 5 | Complete the rural mapping project, develop a plan for the integration of the appraisal system and GIS and integrate the two systems. | In Progress | March 2008 |
The CAD completed the mapping of its rural areas in fall 2006. The mapping system is now in a maintenance mode. In August 2006, the chief appraiser developed a four-phase plan for integration of the mapping and appraisal systems. The CAD is in phase four of the plan, which calls for the integration of the mapping and appraisal systems by February 2008. |
2.4 Staffing, Personnel Qualifications and Positions
| Rec. # | Recommendation | Implementation Status | If Not Complete, Projected Completion Date | Description of Actions Taken to Date |
|---|---|---|---|---|
| 6 | Develop a process for reviewing personnel policies and routinely update the personnel manual accordingly. | Complete |
On February 15, 2006, the chief appraiser presented a draft of the proposed personnel policy manual to the board for review and comment. The CAD’s attorney reviewed the draft and the board approved it on March 15, 2006. The board also recommended that the chief appraiser review the manual annually and update it as needed. The chief appraiser said he is responsible for updating the personnel policy manual and will have the CAD’s attorney review it on an annual basis. |
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| 7 | Review the procedures and form for evaluating staff, make adjustments to the form as necessary, and present the form and procedures to the board for its approval and begin annual evaluations of the staff. | Complete |
On March 15, 2006, the board approved a staff evaluation form developed by the chief appraiser. The form contains procedures for supervisors to follow in evaluating staff. The evaluation uses a five point rating scale. The supervisor evaluates staff in 10 areas: personal appearance, telephone etiquette, attendance, job knowledge, planning work and organization, interpersonal relations and attitude, policies and procedures, judgment, accuracy and quantity, and reliability and perseverance. The reviewer summarizes rating totals and the employee, reviewer and chief appraiser sign each evaluation. The CAD supervisors evaluated all staff in March 2006. |
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 |
|---|---|---|---|---|
| 8 |
Develop a comprehensive appraisal procedures manual that documents current practices and provide a copy of the manual to each appraiser. |
Complete |
In September 2006, each appraiser received written instructions for conducting field checks; procedures for workflow; instructions for completing field sheets (appraisal cards), listing improvements and interacting with property owners; and a list of “do’s and don’t’s” for appraising property. The chief appraiser and deputy chief appraiser developed these procedures in September 2006. The chief appraiser added these practices to the existing appraisal manuals. The appraisal manuals consist of classification guides for appraising residential, commercial, land, and personal property, including photographs and descriptions of the characteristics typical for each class of property. The manuals are updated annually to include current appraisal cost schedules and depreciation tables. The chief appraiser added procedures for using ratio studies to the manuals in December 2006. |
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| 9 |
Finalize the reappraisal plan, develop procedures for reviewing and updating the plan and have the board formally adopt the plan. |
Complete |
In May 2006, the chief appraiser finalized the Victoria County Appraisal District Reappraisal Plan 2007-2008 and presented the draft to the board on May 10, 2006. The reappraisal plan calls for the CAD to conduct a general reappraisal of taxable property every year and contains an explanation of appraisal activities for each type of property the CAD appraises. The plan includes a description of personnel, technology, budget and data resources available to the CAD that it can use to complete annual reappraisals. The plan calls for the CAD to perform ratio studies to evaluate the effectiveness of the plan’s reappraisal performance and update and modify appraisal activities, as needed each year. Section 25.18 of the Tax Code requires the CAD to prepare a reappraisal plan every two years. On August 16, 2006, the board held a public hearing on the reappraisal plan and adopted the plan in regular session on August 16, 2006. |
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| 10 |
Adopt procedures for using ratio studies to establish appraisal maintenance and reappraisal practices. |
Complete |
On October 4, 2006, the deputy chief appraiser prepared and distributed to appraisal staff procedures for using ratio studies to establish appraisal maintenance and reappraisal activities. The procedures require appraisers to enter all available sales data into the automated appraisal system using the appropriate property codes. Appraisers are required to adjust all sales for time, atypical financing and personal property, if necessary. The CAD selects stratification criteria by accessing the parameters available in the automated appraisal system’s ratio study module. When the CAD performs ratio studies, the chief appraiser instructs appraisers to review the reports for appraisal uniformity and consistency by examining the performance statistics generated by the reports. The statistics include weighted mean, average mean, coefficient of dispersion and land-to-building ratio. The CAD’s benchmark for weighted mean ratio is 95 to 105 percent of market value. If the CAD detects a need for appraisal maintenance, appraisers must adjust cost tables and neighborhood factors accordingly. Before the adjustments become permanent, appraisers must test the validity of all adjustments by performing additional ratio studies and analyzing the results. Appraisers are required to perform ratio studies several times throughout the year. The procedures for using ratio studies are included in the CAD’s appraisal manual. |