Loading...
090718 Friday Staff Report 4(OF City Manager's Office DENTON 215 E. McKinney St., Denton, TX 76201 • (940) 349-8307 MEMORANDUM DATE: September 7, 2018 TO: The Honorable Mayor Watts and Council Members FROM: Todd Hileman, City Manager SUBJECT: Friday Staff Report I. Council Schedule A. Meetings 1. Public Utilities Board Meeting on Monday, September 10, 2018 at 9:00 a.m. in the City Council Work Session Room. 2. Historic Landmark Commission Meeting on Monday, September 10, 2018 at 5:30 p.m. in the City Council Work Session Room. 3. Mobility Committee Meeting on Tuesday, September 11,2018 at 11:30 a.m. in the City Council Work Session Room. 4. Work Session of the City Council on Tuesday,September 11,2018 at 2:00 p.m. in the City Council Work Session Room followed by a Regular Meeting at 6:30 p.m. in the Council Chambers. 5. Economic Development Partnership Board on Wednesday, September 12, 2018 at 11:00 a.m. in the City Council Work Session Room. 6. Agenda Committee Meeting on Wednesday, September 12, 2018 at 2:30 p.m. in the City Manager's Conference Room. 7. Work Session of the Planning and Zoning Commission on Wednesday, September 12, 2018 at 5:00 p.m. in the City Council Work Session Room, followed by a Regular Meeting at 6:30 p.m. in the City Council Chambers. 8. Development Code Review Committee Meeting on Friday,September 14,2018 at 11:00 a.m. in the City Council Work Session Room. OUR CORE VALUES Integrity • Fiscal Responsibility • Transparency • Outstanding Customer Service B. Upcoming Events 1. TML Annual Conference, October 10-12, 2018 at the Fort Worth Convention Center. 2. NLC City Summit,November 7-10, 2018 in Los Angeles, CA. H. General Information & Status Update A. New Police Chief Selected — Frank Dixon, who currently serves as an Assistant Chief of Police with the Austin Police Department,has been announced as the City of Denton's next Chief of Police. Dixon brings more than 23 years of public service and leadership experience to the postion. Dixon will begin his new role with the City of Denton on October 15.Additional details regarding Chief Dixon's experience and the Police Chief selection process can be found in the attached press release. Staff contact: Todd Hileman, City Manager B. Shelter Planning ork_rg_oup — The Shelter Planning workgroup held its first meeting on Tuesday, September 4. The group discussed goals and purpose, reviewed and outlined the current shelter environment (including days/hours, operating capacity, inclement weather capacity, length of stay, individuals served, any requirements, etc.), began discussion of future plans of the agencies, and discussed developing a survey for individuals experiencing homelessness, both sheltered and unsheltered. The next meeting is scheduled for October 3. Staff will continue to provide updates as work progresses. Work groups of the Denton County Homeless Leadership Team (DCHLT) also provide regular reports to the DCHLT board—those reports will be shared and are also posted on the DCHLT's website. Staff contact: Sarah Kuechler and Dani Shaw, Public Affairs C. DHA's Mainstream Voucher Program— Staff was recently notified that the U.S. Department of Housing and Urban Development(HUD)awarded$98.5 million to 285 local public housing authorities across the country to provide permanent affordable housing to nearly 12,000 additional non-elderly persons with disabilities. The housing assistance is provided through HUD's Section 811 Mainstream Housing Choice Voucher Program which provides funding for housing agencies to assist non-elderly persons with disabilities who are transitioning out of institutional settings, at serious risk of institutionalization, homeless, or at risk of becoming homeless. City staff provided a letter of support for the Denton Housing Authority's participation in the program. DHA will receive 40 vouchers to provide permanent housing for low income non-elderly persons with disabilities. DHA staff will contact personnel from various agencies to schedule a meeting to discuss program requirements, the application process, and general administration of the program. Staff contact: Sarah Kuechler, Public Affairs D. Division of Chamber Economic Development Funding Between Utility and General Funds — During the August 28 work session presentation on the annual economic development agreement between the City of Denton and the Denton Chamber of Commerce, the City Council asked why a portion of the funding comes from the Utility Fund. The City of Denton has funded economic development activities provided by the Denton Chamber of Commerce for 32 years through a combination of Utility Fund and General Fund revenues. Staff research shows that FY 1986-87 was the first year such funding was provided, specifically$11,428 from the Utility Fund. For the next nine fiscal years, all of the funding provided to the Chamber came from the Utility Fund. In FY 1996-97, funding began to come from both the Utility and General Funds, and that has continued through the current fiscal year. Staff was unable to locate documented information about the original reasoning behind using Utility Funds for this purpose,but it is reasonable to assume that the thought was the Chamber's efforts to recruit new businesses to Denton would result in an increased customer and rate base for Denton's municipal utilities. Staff contact: Caroline Booth, Economic Development E. Parks and Recreation Green Ribbon Grant—In June of 2018,Parks and Recreation submitted a Green Ribbon grant application to the Texas Department of Transportation (TxDOT). On August 9, staff received notification that TxDOT approved the City of Denton's application for landscaping improvements along US380 in Fiscal Year 2019 fiscal, totaling $667,285. This grant funded project will enhance the median on US380 from Masch Branch Road to Elm Street (US77). The image below highlights the site of the proposed project. 9 SRR4R0 R w1aRRrm RD fl s. zed C FS� W nay D£ Qs501 IIM s 5•.�.. - ELM TrMR GANDER ` RD ' g MMI E U5380 Krum e am 4 L9�rl' f _ 110 1 MIMI RD Yn •, „ /R(���[� P - tar .r Shady crr� Shores R. In yew Corinth g' Argyle The TxDOT Green Ribbon Program was established to improve the visual character of highway corridors and minimize the negative impacts of air pollution through planting of trees and shrubs. Final construction drawings are due to TxDOT in December 2018. It is anticipated that this project will begin construction in calendar year 2019. Staff contact: Gary Packan, Parks and Recreation F. Trail Loop Completed at Sequoia Park - Parks and Recreation has recently completed a loop trail in Sequoia Park. This park is located on Nolen Circle just off of University Drive. The park itself is a total of 5.5 acres, and the trail now totals .41 miles. A total of.25 miles or 1,300 ft. was added to the existing trail to complete the loop. This project brings the City's hard surface trail total to 31.3 miles. Trail development was the highest ranked desired amenity in the 2009 Parks Master Plan. This project cost $85,471 to complete, and was funded using the Park Improvement Fund (915/916). Additional trees will be planted along the trail to provide future shade for residents to enjoy during warmer weather. Below is an image of the newly completed trail segment. Staff contact: Drew Huffman, Parks and Recreation f G. DTV Receives National Excellence in Programming Award — The National Association of Telecommunications Officers and Advisors honored the winners of the 33rd Annual Government Programming Awards last week in Philadelphia, PA. The City of Denton and DTV won the highest honor - first place in the "Excellence in Programming" category. The awards program recognizes excellence in broadcast, cable, multimedia and electronic programming produced by local government agencies. Among the awards with special significance are the "Excellence in Programming" awards which are judged on the municipality's variety of programming quality throughout the year. Below is a link to DTV's award winning entry. Staff contact: Billy Matthews, DTV City of Denton Television(DTV) H. Loop 288/Lillian Miller Intersection Closure — TxDOT notified City of Denton staff this week that OHL, contractor for the Interstate 35/Loop 288 and Brinker Project, has targeted the weekend of September 21-24 for closure of the Loop 288/Lillian Miller and I-35 intersection. The proposed closure is necessary for the placement of 21 bridge beams for the new northbound main lane bridge on I-35. Closure of the intersection will begin 10 pm Friday, September 21 and will reopen no later than 6:00 am Monday, September 24. OHL will place electronic message boards the week of September 10 to notify motorists. TxDOT will provide an official press release and a detour map. The City of Denton Public Affairs Department will coordinate with the TxDOT Public Information Office to assist with the public information campaign. Staff contact:Mark Nelson,Transportation I. Denton Energy Center August Emissions Data - During the August 21 City Council Meeting, a request was made to include carbon dioxide equivalent(CO2e) emissions with future Denton Energy Center(DEC)monthly emission reports.The table below shows DEC emissions for August 2018. Per City Council's request, this report also includes CO2e estimates. While CO2e reporting is not required by TCEQ,there is an annual(calendar year)EPA requirement to submit a greenhouse gas (GHG) emissions report. In preparation for this annual reporting requirement, a methodology was developed to calculate/estimate monthly CO2e emissions. Using this methodology, staff will now include CO2e in future DEC monthly emissions reports. The August 2018 CO2e emissions estimate at the DEC is 12,169 tons. For continuity, staff also calculated July CO2e emissions estimates. The July 2018 DEC CO2e estimate is 12,609 tons. Staff contact: George Morrow, DME August 2018 Emissions Total Runtime(hrs) Hot Starts Warm Starts Cold Start Stops GENSET 1-12 TOTALS 1541.3 43.00 32.00 244.00 319.00 NOx CO VOC PMIO PM2.5 S02 NH3 IL pounds pounds pounds pounds pounds pounds pounds Engine 1 147.5 7 2 1 25 34.00 426.6 471.9 311.1 349.6 349.6 3.1 8.0 Engine 2 149.3 3 1 1 24 28.00 401.4 446.2 280.7 341.9 341.9 2.8 9.7 _ Engine 3 149.4 4 4 21 29.00 385.5 434.3 303.3 379.8 379.8 3.0 5.8 Engine 4 137.8 4 6 16 26.00 326.6 368.4 276.8 352.9 352.9 2.7 5.5 _ Engine 5 137.1 4 0 22 26.00 368.9 422.4 277.4 351.5 351.5 2.7 5.4 Engine 6 35.0 7 5 12 24.00 164.9 170.4 112.1 74.7 74.7 1.1 1.0 Engine 7 60.7 6 1 12 19.00 205.1 227.3 159.3 162.4 162.4 1.5 2.3 Engine 8 144.5 2 0 25 27.00 341.5 460.8 288.6 364.4 364.4 2.8 5.6 Engine 9 143.5 3 5 20 28.00 373.3 416.6 291.6 363.6 363.6 2.8 5.6 Engine 10 146.6 1 3 21 25.00 371.4 418.0 277.2 360.4 360.4 2.7 5.6 Engine 11 146.3 1 2 22 25.00 377.6 425.5 275.71 356.7 356.7 2.7 5.6 Engine 12 143.7 1 3 24 28.00 410.6 455.6 292.8 363.7 363.7 2.8 5.6 Engine Emissions(pounds) 4153.3 4717.4 3146.6 3821.6 3821.6 30.8 65.7 Engine Emissions(tons) 2.0767 2.3587 1.5733 1.9108 1.9108 0.0154 0.0328 BOP Emissions Monthly 0.273F 0.213' 0.026, 0.0�1.910.03 � 0.000 DEC Monthly Emissions Total(tons 2.35 2.57' 1.60 1. 0.03 DEC Annual Permit Limit(tons)g12168.5 95.5 48.6 70 70 1.75 60.9 Monthly Plant Emissions per DEC Annual Permit Limit2.692% 3.290% 2.733% 2.733% 1.593% 0.054% Monthly Estimated CO2e Emissions(tons) J. Gas Line at Martin Luther King, Jr. Recreation Center- Earlier this week, a gas leak was detected at the Martin Luther King, Jr. Recreation Center. The leak is located between the meter and the building. Gas has been shut off at the recreation center until repairs are made. Repairs are expected to be completed early next week. The center remains open, the only service delivery impact is hot water will not be available until gas is turned back on at the facility. Staff will provide updates once the gas line has been repaired and hot water has been restored for recreation center patrons. Staff contact: Gary Packan, Parks and Recreation K. Eagle Drive Drainage Project—Over the past week,the City has received feedback regarding the Eagle Drive drainage project and related construction. Prior to the start of the project,Capital Projects and Public Affairs developed a communication plan to engage and inform the residents, businesses, and property owners in the project area. In early August, staff met with many of the business and property owners to discuss project impacts and provided them with a one-page project information sheet that included project scope, budget, and contacts. A digital version of the information sheet was provided to property owners so they could also send it to their tenants. Later in August, staff also sent a follow-up email to apartment management informing them that contractors would begin work on Sept. 4, which would necessitate the closure of a parking area. Staff understands the frustration of business owners and tenants who are impacted by this project, and is working diligently to keep them updated on project status. Staff notified business owners and apartment management that they have received complaints and re-sent the one-page project information sheet to share with tenants and other key stakeholders. Within the next week, a temporary parking lot will open at the corner of Maple and Myrtle Street to allow customers to park closer to area businesses. The estimated timeline to install the sanitary sewer and drainage structure across the apartment parking lot and reestablish pavement is four months. Staff will continue to provide status updates as the project progresses. Staff contact: Todd Estes, Capital Projects III. Community Events A. City Hall West Steering Committee Public Meeting—A public meeting has been scheduled for Monday, Sept. 10 from 5:30 to 7:30p.m. at the Patterson-Appleton Arts Center for the community to provide input on the conceptual design and potential renovation options for City Hall West. Additional information can be found in the attached press release, which was distributed on Sept. 6. Staff contact: Mark Nelson, Transportation B. Denton Blues Festival — The 20th Annual Denton Blues Festival is scheduled for Sept. 14-16 in Quakertown Park. This event is free to the public and will feature several live performances including Big Bill Morganfield,Muddy Waters Review, Carolyn Wonderland, Selwyn Birchwood, and Zac Harmon. Additional event details can be found in the attached flyer. Staff contact: Jessica Rogers, Public Affairs IV. Attachments A. Police Chief Selection Press Release B. City Hall West Steering Committee Press Release C. Denton Blues Festival Flyer D. DCTA Leadership Changes Press Release V. Informal Staff Reports A. 2018-115 Capital Project Consultants B. 2018-116 Operating Funds Consultants C. 2018-117 Playground Replacement Plan D. 2018-118 Information Security Strategy E. 2018-119 DCAD Reappraisal Plan Notice F. 2018-120 Keep Denton Beautiful Information G. 2018-121 Top 20 Taxpayer Category on EDP Board H. 2018-122 DME Rate Sensitivity Analysis I. 2018-123 Council TOMA Training VI. Council Information A. Council Requests for Information B. Draft Agenda for September 18 C. Council Calendar D. Street Construction Report -40 o FOR IMMEDIATE RELEASE DENTON Jessica Rogers • (940) 349-7531 • Jessica.Rogers@cityofdenton.com City of Denton Appoints New Police Chief DENTON, TX, Sept. 7, 2018—City Manager Todd Hileman has announced the appointment of Frank Dixon to the position of Police Chief. Dixon brings more than 23 years of public service and leadership experience to the position. Dixon will begin as Police Chief on Oct. 15. "Chief Dixon has proven to be an innovative and experienced leader throughout his career," said City Manager Todd Hileman. "Frank has demonstrated a commitment to community policing and engagement strategies. And, his experience in many aspects of law enforcement has prepared him well to move the Denton Police Department forward." Chief Dixon currently serves as an Assistant Chief with the Austin Police Department. He currently leads APD's South Patrol Bureau, Austin-Bergstrom International Airport, and the Special Operations Division,which includes the SWAT team, Bomb Squad, Air Support Unit, and K-9 Unit. As Assistant Chief of the Bomb Squad and SWAT Team, he led the Special Operations response and resolution to recent Austin Bombing incident. "I am humbled and excited to become the next Chief of the Denton Police Department," said Chief Dixon. "The Denton Police Department is composed of dedicated men and women who proudly serve the community. My goals as Chief will be to continue to engage the Denton community, work with citizens to make Denton safer, and create partnerships with civic, neighborhood, and community groups to address the unique and diverse issues facing communities today." Chief Dixon holds a Bachelor of Science in Criminal Justice from Lamar University and is a graduate of the 73rd session of the Senior Management Institute for Police by the Police Executive Research Forum, APD's Leadership Command College, and the West Point Leadership Course. Prior to being appointed Assistant Chief, Dixon was a lieutenant in the Internal Affairs Division, and has previously served as a lieutenant in the Organized Crime Division and the Region 3 Patrol Services Division. He has also served in other various roles, including uniformed patrol, Street Response,Narcotics, Gang Unit/Major Crimes Task Force, Homicide Detective, Patrol K-9, SWAT Sergeant, and Counter-Assault Strike Team. The City of Denton started the selection process in June by working with executive recruitment firm Ralph Andersen &Associates to launch a nationwide search for candidates. After a thorough review and screening of 111 applicants, six finalists were interviewed by executive staff, two community organization panels with 20 groups represented, a panel of current DPD OUR CORE VALUES Integrity•Fiscal Responsibility•Transparency• Outstanding Customer Service ADA/EOE/ADEA www.cityofdenton.com TDD(800)735-2989 employees, and held a meet and greet with City Council Members. In addition, the candidates were introduced to the Denton community through a public open house,which provided citizens the opportunity to provide feedback on all candidates. To make the final selection, a City team conducted site visits with two finalists, with Chief Dixon being selected as the top candidate. Contact: Carla Romine, (940) 349-8344, Carla.Romine@cityofdenton.com Visit www.cityofdenton.com for more news and to stay updated. 2 nor FOR IMMEDIATE RELEASE DENTON Jessica Rogers • (940) 349-7531 • Jessica.Rogers@cityofdenton.com Notice of Meeting for Public Input on City Hall West Patterson-Appleton Arts Center, Sept. 10 at 5:30 p.m. DENTON, TX, Sept. 6, 2018—The City of Denton invites interested members of the community to attend a public meeting to provide input on the conceptual design and potential renovation options for City Hall West. The meeting will be from 5:30 to 7:30 p.m. on Monday, Sept. 10 at the Patterson-Appleton Arts Center, 400 E. Hickory St. Mark Nelson, Director of Transportation, and the project consultants will present a history of the project, conceptual design and conceptual business plan that has been developed with direction through the City Hall West Steering Committee. Steering Committee members will also be in attendance. For those unable to attend, information will be posted on the City's website, www.cityofdenton.com, following the meeting and an online comment card will be available through Sept. 14 to provide feedback. Contact: Mark Nelson, (940) 349-7704, Mark.Nelson@cityofdenton.com OUR CORE VALUES Integrity•Fiscal Responsibility•Transparency• Outstanding Customer Service ADA/EOE/AREA www.cityofdenton.com TDD(800)735-2989 Sat. Nite 8:45-1Opm Presenting Sponsor Sun. Nite 7:30-8:30PM L 9 ASSI• s M0J & B a BIG BILL MORGANFIELD MORGAWIELD ► *I BIG SIUDDYWATERS REVIEW Sunday Morning Friday Nite Karaoke / f' Gospel Choirs CAROLYN SELWYN C WONDERLAND FREEEVENT! BIRCHWOOD HARMON QUAKERTOWN PARK 321 E. McKinney Denton, TX Delicious festival food ! FREE Parking ! +Bounce Houses, Arts & Crafts and Face Painting for children www,Denton13luesFest1: al.org www.DentonBlackCfiamberOnIine.org DENT N MEDIA r. I N W O O D !/ir•�.i# u,cl c u I 1 LAWN TotEl M For more information contact J. Baines (940) 565-9015 or S. Hill (210) 275-3486 DENTON DCTATRANSPORTCOUNTYATION AUTHORITY Media Contact Information: Adrienne Hamilton, Communications Manager Phone: 972.316.6114 • Email: ahamilton(a)dcta.net Nicole Recker, Vice President of Marketing and Communications Phone: 972.316.6132 • Email: nrecker(a)dcta.net FOR IMMEDIATE RELEASE Denton County Transportation Authority Board of Directors Names Raymond Suarez as President of DCTA LEWISVILLE, TEXAS (September 4, 2018)—Today, the Denton County Transportation Authority (DCTA) Board of Directors have accepted the resignation of James C. Cline, Jr., DCTA President. The board met to discuss immediate next steps for the agency and made a motion naming Raymond Suarez as the new agency president, effective September 14, 2018, pending contract negotiations. Suarez has served as DCTA's Chief Operating Officer since July 2014. He is a proven transit operations and technology leader with more than 30 years of experience in the public and private sector. "We greatly appreciate the leadership provided by Mr. Cline over the last eight years," said Nicole Recker, DCTA Vice President of Marketing and Communications. "The Board of Directors and agency staff are confident that Mr. Suarez will continue to foster DCTA's growth and ability to provide mobility solutions throughout North Texas." Suarez previously served as DCTA's chief operating officer and worked with the leadership team, board of directors, community leaders, employees, and service providers to grow the greater North Texas regional mobility system with a focus on setting new standards for transit operations, innovation and service excellence. Prior to DCTA, Suarez served as chief administrative officer for the Trinity Railway Express (TRE), in which he oversaw aspects of THE contracts, safety, operations, maintenance, and capital programs. During his tenure, Suarez developed the agency's annual budget, managed the TRE's long range capital investment program and state of good repair model, and worked with the regional transit agencies to ensure adherence to annual authorizations. Prior to the TRE, Suarez served in multiple leadership roles within the transit and technology industries, including Dallas Area Rapid Transit (DART), Reactrix Systems, General Dynamics, Superconducting Supercollider, Trans Industries, and Vultron, Inc.; and provided consulting services for various companies throughout his career. Suarez holds a Bachelor's Degree in Business Administration from Texas Wesleyan University. ABOUT DENTON COUNTY TRANSPORTATION AUTHORITY Formed in 2002 and funded in 2003,the Denton County Transportation Authority has been focused on an aggressive service implementation strategy to address the mobility needs of North Texas residents.The central element ofthe agency's service plan is the A-train,which connects with the Dallas Area Rapid Transit's(DART)Green Line at Trinity Mlls in Carrollton and provides service to five stations within Denton County.In addition to the A-train,DCTAprovides Connect Bus service in Denton and Lewisville,Connect Shuttle and Community On-Demand services in Highland Village,Access service,Frisco Demand- Response service,Collor County Transit service,North Texas Xpress conumter bus service in partnership with Trinity Nbtro, University ofNorth Texas(UNI)and North Central Texas College(NM Campus Shuttle and vanpool services.The agency caries nearly three million passengers annually systemwide.For more information about DCTA,visit www.RideDCTAnet. Date: September 7, 2018 Report No. 2018-115 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: This is a report of expenses for outside consultants and professional services for the City's capital project funds. BACKGROUND: The purpose of this report is to provide the Mayor and City Council with a report summarizing expenses for outside consultants and professional services for the City's capital project funds in the last three fiscal years. There is no action necessary as this report is for informational purposes only. This report has been prepared at the request of the city Council. This report is only for expenses associated with capital projects. It shows expenses by general category for the last three fiscal years. This information was obtained by reviewing all of the payments in the capital projects funds during the fiscal year sorted by individual vendor. It shows purchase orders by general category and the dollar amount of the full purchase order is based on the fiscal year in which the service was approved. In many cases the actual payments for these services may occur over of period of one year or longer. The summary also shows the full amount of the purchase order, but some projects may not spend the full amount. DISCUSSION: Below is a table displaying major areas of expenses for outside consultants and professional services in capital project funds during fiscal years 2014-15, 2015-16, and 2016-17. The total capital project fund expenditures for FY 2014-15 was $117,525,289, in FY 2015-16 was $119,992,274, and in FY 2016-17 was $276,029,736. Category FY 2014-15 FY 2015-16 FY 2016-17 Engineering and Architectural Design $ 10,039,622 $ 5,778,038 $ 7,199,668 Land, Survey, and Appraisal Services 91,723 229,480 2,989,426 Legal Services 551,118 130,000 195,796 Construction Testing Services 453,568 200,420 564,745 Other Services* 747,989 446,851 2,507,453 Total $ 11,884,020 $ 6,784,789 $ 13,457,088 *Other services include utility studies, rate studies, cost allocation studies, software implementation, program management assistance,permitting assistance,and project management assistance. These expenses are below the expected range of 8%to 15%for capital project expenditures related to design and other professional services. This percentage can vary significantly from year to year Date: September 7, 2018 Report No. 201 8-115 depending on the timing of engineering contracts versus construction contracts. After reviewing the expenses in these categories, and considering the types of services received, staff concluded that no personnel or contract modifications are necessary. Please do not hesitate to contact me if you have any questions regarding this report. STAFF CONTACT: Antonio Puente, Jr., Director of Finance (940)-349-7283 Antonio.Puente(cr�,cityofdenton.com Date: September 7, 2018 Report No. 2018-116 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: This is a report of expenses for outside consultants and professional services for the past four fiscal years. BACKGROUND: The purpose of this report is to provide the Mayor and City Council with a report summarizing expenses and commitments for outside consultants and professional services for the past three fiscal years. There is no action necessary as this report is for informational purposes only. This report has been prepared at the request of Council. This report excludes expenses associated with capital projects. It shows purchase orders by general category and the dollar amount of the full purchase order is based on the fiscal year in which the service was approved. In many cases the actual payments for these services may occur over a period of one year or longer. The summary also shows the full amount of the purchase order,but some projects may not spend the full amount. DISCUSSION: Below is a chart displaying major areas of expenses and committments for outside consultants and professional services for fiscal years 2014-2015 through 2016-2017: Category FY 2014-15 FY 2015-16 FY 2016-17 Architectural Design $ 8,494 $ 8,013 $ 27,225 Audit/Finance Services 116,873 84,933 61,316 Energy Services - 362,448 494,977 Capital Projects 282,237 309,888 190,791 Environmental Planning 74,300 32,920 246,850 HR Recruitment and Studies 79,497 133,588 157,161 Legal Services 1,038,945 107,085 264,602 Legislative Services 266,771 249,900 277,730 Marketing 10,125 - - Planning and Development 44,030 24,500 25,725 Risk and Health Contracts 48,500 25,432 121,814 Technology Implementation 311,011 253,491 85,430 Training and Retreats 23,240 75,784 36,036 Transportation & Mobility - 147,740 138,098 Total $ 2,304,023 $ 1,815,722 $ 2,127,755 Percent of Operating Budget 0.44% 0.33% 0.36% After reviewing the expenses in these categories, and considering the types of services received, staff concluded that no personnel or contract modifications are necessary. Staff will continue Date: September 7,2018 Report No. 2018-116 monitoring these professional services. If it appears that these needs will be recurring in nature, or these services can be provided by in-house staff, we will adjust our contracts and/or personnel accordingly. Please do not hesitate to contact me if you have any questions regarding this report. STAFF CONTACT: Antonio Puente, Jr., Director of Finance (940)-349-7283 Antonio.Puente(ab cityofdenton.com Date: September 7, 2018 Report No. 2018-117 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: The purpose of this report is to provide the City Council with details regarding the recently completed Playground Replacement Plan (PRP). BACKGROUND: The Parks and Recreation Department (PARD) recently completed a PRP and are in the processes of replacing a number of play structures with several more planned to be installed in the future. DISCUSSION: In June, 2018, PARD completed an inventory and replacement plan for all playgrounds within the Denton parks system. The PRP identifies when the playground was installed and when it should be scheduled for replacement. The plan also tracks the cost of the structure when it was installed along with a forecasted replacement cost when it exceeds its expected life span. This projection uses a 3% cost inflator compounded annually as a way to anticipate future costs of the playgrounds based on the projected replacement. It was discovered during the creation of the plan that a number of play structures are well past the 15 years useful life. While the 15 year life span is not a requirement for replacement, it is an industry estimated term in which a playground typical begins to diminish in its structural integrity and repair costs exceed its value. Based on wear and tear, some playgrounds need to be replaced sooner than others due to varying degrees of usage, exposure to sunlight, or vandalism. While replacement years are projected and flexible, staff has worked to program replacement expenses distributed over the course of multiple years. The goal is to get the playgrounds on a regular replacement schedule to ensure safety and assist in fiscal planning. A heat map style was used to clearly identify playgrounds that are past the replacement timeframe (highlighted in red), on schedule (highlighted in green) and structures that are anticipated (none) to be replaced earlier than the 15 years (highlighted in blue). In addition, some playgrounds (highlighted in orange) already have funding that has been identified. As you can see within the plan, 43% of all the playgrounds within the park system (not including the structures that already are funded) have exceeded the standard 15 year life span. On July 17, at a City Council Work Session, Parks and Recreation was asked about the possibility of donating playground equipment after it was removed for replacement. Staff discussed this option along with Risk Management and the City Attorney's Office and all agree that this could be a liability issue for the City. In addition, the equipment would need to be dismantled, free of all concrete without damage and parts organized in a manner that rebuilding can be completed in a safe and organized process so it could be rebuilt by another entity. Date: September 7, 2018 Report No. 2018-117 Y Tyt T` • ilk I Fred Moore Park Playground—Coming in October 2018 Also, on July 17 at the regularly scheduled City Council meeting, a contract for the replacement of three (3) playgrounds was approved. These playgrounds include Denia Park, Fred Moore Park and Milam Park. Funding for theses playgrounds, plus others was approved in the 2014 Capital Improvement Program for a total of$890,000. Additionally, a new playground will be installed as part of the G. Roland Athletics Complex. It is anticipated that this project will be completed in March 2019. t rt � - I t ' -r 71 Date: September 7, 2018 Report No. 201 8-117 Finally, a Community Development Block Grant was recently released due to unallocated funding availability. An application was submitted to Community Development for $217,923 to replace play structures at Quakertown Park. Grants are expected to be awarded to the selected projects this fall. r � ' Existing Quakertown Park Playground STAFF CONTACT: Drew Huffman, Parks Superintendent (940) 349-7464 Russell Koch, Parks Manager (940) 349-8412 Date: September 7, 2018 Report No. 2018-118 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: City of Denton and Denton Municipal Electric's strategies for securing information and information systems EXECUTIVE SUMMARY: The purpose of this report is to address Public Utility Board's request for information regarding the City of Denton's and Denton Municipal Electric's security strategies for the infrastructures supporting its information and bulk electric systems. BACKGROUND: Critical infrastructure and utility providers have seen an increase in threats to information system breaches that, if successful, could result in a considerable amount of damage to critical infrastructure, affect public safety and could cost providers millions of dollars to cover the costs related to the attacks. Recent news uncovered possible vulnerabilities that many U.S.-based providers might be susceptible to, including: • Hackers have shown the ability to electronically infiltrate control rooms of electric utilities, and can cause blackouts and other disruptions to the power grids; • Hackers have compromised some isolated utility networks thought to be secure, and control switches to the power grid to disrupt power flow; and • Hackers have gained access utility providers' networks through compromising vendors' and contractors' systems. Although widespread catastrophic exploitation of these vulnerabilities has not occurred in the United States, they have heightened the concerns of many citizens. To mitigate the risk of malicious intruders, DME relies, to an extent, on the City of Denton's Technology Services Department for security management programs that establish a framework and continuous cycle of activity for assessing risk, developing and implementing effective security procedures, and monitoring the effectiveness of these procedures. The Technology Services Department has been proactive in implementing multiple layers of protection for IT supported technologies. Over the past year, the department has detected and mitigated approximately 1.6 billion total threats and vulnerabilities. On average, approximately 50,000 malicious webpages are blocked per month. Additionally, approximately 18 million emails were received at the City this past year; in which, 64%percent were detected as spam and 3.6%were detected as malware. Without a comprehensive security plan and industry best practices in place, even the best systems can be compromised. Multiple security tools, practices and procedures have been Date: September 7, 2018 Report No. 2018-118 implemented during the last several years to protect the systems against unauthorized access and viruses. Some of these include: • Secure architecture and design validated by third party • Electronic and physical security controls • Strong password policies and access controls • Controlled use of administrative privilege • Proactive monitoring and analysis of logs • Annual vulnerability assessments,penetration testing and tabletop exercises • Site and hardware redundancy that includes a backup Data Center • Incident response plan and business continuity plan • Comprehensive cyber security policies • Security retainers with companies specializing in information security for rapid response • Scheduled patch management • Periodic social engineering exercises to staff • Proactive cyber security training for all City employees • Formation of an Information Security Committee, which includes members from various departments across the City, to create a holistic approach to information security governance, risk management, and compliance. • Other various security technologies o Perimeter Security: firewall, Intrusion Detection and Prevention Systems IDS/IPS, demilitarized zone (DMZ) for public facing applications, e-mail scanning(anti-virus) o Network Security: firewall, web proxy, wireless security, enterprise remote access, security information and event systems o Endpoint Security: desktop firewall, anti-virus,patch management, local security policies o Application Security: application testing, code review, database monitoring, o Data Security: drive encryption, data archive, data wiping, data classification, identity access management Additionally, the operations at Denton Municipal Electric (DME) adds another layer of security through its Compliance Program regulated by the North American Electric Reliability Corporation's (NERC) Critical Infrastructure Protection (CIP) Standards, which are designed to increase the security and reliability of the Bulk Electric System (BES). The NERC CIP Standards cover many areas that are typically considered in many Cyber Security programs across the industry, such as: • Identifying the level of impact on each BES Cyber System to ensure appropriate controls and protection are in place Date: September 7, 2018 Report No. 2018-118 • Implementing security management controls to minimize the opportunity for misoperation of the BES • Implementing appropriate training for all employees • Securing electronic and physical perimeters • Evaluating and installing security updates and patches to all applicable systems • Ensuring the latest virus signatures/definitions are installed on antivirus applications, intrusion detection systems, and firewalls • Testing of incident response and disaster recovery plans on a regular basis to ensure any downtime is minimize • Tracking and managing all changes to the BES system, and ensure that no changes go undetected • Enforcing a strict information security policy specific to working with BES DME also employs annual cyber security training specific to critical infrastructure security and protection program for employees working in or with BES Cyber Systems and will soon implement a compliance software system to increase efficiency and effectiveness in its compliance management program. Although DME has taken due care to protect its ratepayers and citizens through these programs, DME can only protect what it has actual operational control over. DME, like every other utility, must also rely on its neighboring interconnected utilities that are part of the ERCOT network to do their role. Overall, the city of Denton is committed to safeguarding the city of Denton assets. Although it is hard to predict and foresee every possible threat, companies that implement a comprehensive information security program increase their chances of protecting physical assets, employees and customer data if a dangerous situation arises. STAFF CONTACT: Melissa Kraft George Morrow Chief Technology Officer General Manager, Electric Administration (940) 349-7823 (940) 349-8487 Melissa.Kraft(d,cityofdenton.com George.Morrow(a,cityofdenton.com Date: September 7, 2018 Report No. 2018-119 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: Notice of Public Hearing on Denton Central Appraisal District 2019-2020 Reappraisal Plan. BACKGROUND: The Denton Central Appraisal District will be holding a public hearing on their reappraisal plan for the 2019-2020 appraisal year. The public hearing will be held on September 13, 2018 at 3:00 p.m. at 3911 Morse Street, Denton, Texas. Attached for your review is the draft 2019-2020 Reappraisal Plan. Once the plan has been approved by both the DCAD Board of Director and the Texas Comptroller's Office, the final plan will be forwarded to the City. If you have any questions or need additional information, please let me know. STAFF CONTACT: Antonio Puente, Jr., Director of Finance (940) 349-7283 Antonio.Puente@cityofdenton.com Notice on Public Hearing On Denton Central Appraisal District 2019-2020 Reappraisal Plan The Denton Central Appraisal District will hold a public hearing on their biennially reappraisal plan for the 2019-2020 appraisal year. The public hearing will be held on September 13, 2018 at 3:00 pm at 3911 Morse Street, Denton, Texas. Last update on: 08/31/16 DENTON CENTRALAPPRAISALDISTRICT 2019 - 2020 REAPPRAISAL PLAN PropertyTax Appraisal.............................................................................................................................................4 SUBSECTION 1. GENERAL POLICIES AND PROCEDURES....................................................................................4 1.01 Appraisal............................................................................................................................................................4 1.02 Valuation Components of a Mass Appraisal System....................................................................................... 13 1.03 DCAD Appraisal Card..................................................................................................................................... 14 1.04 Appraisal Codes............................................................................................................................................... 18 1.05 Ethical Conduct...............................................................................................................................................26 1.06 Notice of Appraised Value...............................................................................................................................40 SUBSECTION 2.REAL PROPERTY APPRAISAL......................................................................................................46 Part A.General Policies and Procedures......................................................................................................................46 2.01 Introduction......................................................................................................................................................46 PartB.Commercial Property.......................................................................................................................................46 2.02 Introduction......................................................................................................................................................46 2.03 Valuation Approach.........................................................................................................................................48 2.04 Data Collection/Validation..............................................................................................................................50 2.05 Class System....................................................................................................................................................52 2.06 Valuation and Statistical Analysis(model calibration)....................................................................................53 2.07 Residential Vacant Lots...................................................................................................................................74 2.08 Individual Value Review Procedures...............................................................................................................81 2.09 Performance Tests............................................................................................................................................82 2.10 Value Defense Procedures...............................................................................................................................83 2.11 Education and Training....................................................................................................................................84 2.12 Data Entry Procedure.......................................................................................................................................84 2.13 Commercial Department Reappraisal Plan Overview......................................................................................84 PartC.Agriculture Use................................................................................................................................................85 2.21 Application......................................................................................................................................................85 2.22 Qualification....................................................................................................................................................86 2.23 Appraisal of Agricultural Land........................................................................................................................87 2.24 Rollback Procedure..........................................................................................................................................89 2.25 Wildlife Management .....................................................................................................................................92 PartD.Residential Properties......................................................................................................................................95 2.31 Introduction......................................................................................................................................................95 2.32 Valuation Approach(model specification)......................................................................................................97 2.33 Data Collection/Validation..............................................................................................................................99 2.34 Class System.................................................................................................................................................. 100 2.35 Valuation and Statistical Analysis(model calibration) ................................................................................. 101 2.36 Individual Value Review Procedures............................................................................................................. 109 2.37 Performance Tests.......................................................................................................................................... 110 2.38 Value Defense Procedures............................................................................................................................. 116 2.39 Education and Training.................................................................................................................................. 116 FIELD CLASSIFICATION GUIDE..................................................................................................................... 117 PartE.Appraisal of Mobile Homes........................................................................................................................... 135 2.41 Inventories..................................................................................................................................................... 136 2.42 Park Rosters................................................................................................................................................... 136 2.43 Installation Permits........................................................................................................................................ 136 2.44 Taxpayer........................................................................................................................................................ 136 2.45 Field Inspection............................................................................................................................................. 137 2.46 Classification of Mobile Home...................................................................................................................... 137 2.47 Creation of Improvement Only...................................................................................................................... 137 2.48 Maintenance Improvement Only Accounts................................................................................................... 138 2.49 Mobile Home on Land Accounts................................................................................................................... 139 2.50 Mobile Home Valuation................................................................................................................................ 139 PartF. Sales and Research......................................................................................................................................... 153 2.51 Sales and Research Department..................................................................................................................... 153 2.52 Education and Training.................................................................................................................................. 153 2.61 Introduction.................................................................................................................................................... 154 2.62 Sales and Statistical Analysis......................................................................................................................... 155 2 2.63 Performance Tests......................................................................................................................................... 156 2.64 Data Collection Procedures........................................................................................................................... 157 2.65 Procedures for Analyzing and Adjusting Sales Prices.................................................................................. 163 2.66 Value Defense Procedures for Informal Meetings and Formal Hearings...................................................... 164 2.67 Procedures for Responding to the Public...................................................................................................... 165 2.68 Reproduction Costs on Open Records.......................................................................................................... 166 2.69 Taxpayer Information on Open Records....................................................................................................... 171 2.70 Taxpayer Liaison Officer.............................................................................................................................. 172 SUBSECTION 3.APPRAISAL OF BUSINESS PERSONAL PROPERTY................................................................ 174 3.01 Introduction.................................................................................................................................................... 174 3.02 General Policies and Procedures.................................................................................................................... 175 3.03 Methods of Discovery.................................................................................................................................... 176 3.04 Procedures for Informal Meetings and Participating in Appraisal Review Board Hearings.......................... 179 3.05 Situs and Inspection of Personal Property..................................................................................................... 179 3.06 Estimation of Property Value......................................................................................................................... 182 3.07 Motor Vehicle Dealer's Special Inventory.....................................................................................................207 3.08 Utility,Mineral Property................................................................................................................................211 3.09 Valuation Bibliography.................................................................................................................................230 CALENDAROF EVENTS............................................................................................................................................231 3 Property Tax Appraisal SUBSECTION 1. GENERAL POLICIES AND PROCEDURES 1.01 Appraisal Each year the Chief Appraiser shall analyze all categories of property that fall within the boundaries of the Denton Central Appraisal District and re-appraise where necessary. The following procedures shall govern the appraisal process using the mass appraisal system.All through this procedure,testing of schedules will be done using acceptable statistical analysis. All appraisal standards must comply with standards#6 and#7 of the Uniform Standards of Professional Appraisal Practice(USPAP).DCAD also administers and determines eligibility for various types of property tax exemptions that are authorized by state and local governments;such as homestead, over-65,disabled persons,disabled veterans,and charitable or religious exemptions. The District will update and process exemptions and special use appraisal applications as necessary and applicable. The following was taken directly form Uniform Standards of Professional Appraisal Practice publication: Appraisal Standards Board; The Appraisal Foundation. Uniform Standards of Professional Appraisal Practice (USPAP): Standard 6: Mass Appraisal,Development and Reporting In reporting the results of a mass appraisal, an appraiser must communicate each analysis, opinion, and conclusion in a manner that is not misleading. Comment: STANDARD 6 addresses the content and level of information required in a report that communicates the results of a mass appraisal. STANDARD 6 does not dictate the form, format, or style of mass appraisal reports. The form, format, and style of a report are functions of the needs of intended users and appraisers. The substantive content of a report determines its compliance. STANDARDS RULE 6-1 Each written report of a mass appraisal must: (a) clearly and accurately set forth the appraisal in a manner that will not be misleading; (b) contain sufficient information to enable the intended users of the appraisal to understand the report properly; and Comment: Documentation for a mass appraisal for ad valorem taxation may be in the form of(1)property records, (2) sales ratios and other statistical studies, (3)appraisal manuals and documentation, (4)market studies, (5)model building documentation,(6)regulations, (7) statutes, and(8)other acceptable forms. (c)clearly and accurately disclose all assumptions,extraordinary assumptions,hypothetical conditions, and limiting conditions used in the assignment. 4 Comment: The report must clearly and conspicuously: • state all extraordinary assumptions and hypothetical conditions; and • state that their use might have affected the assignment results. STANDARDS RULE 6-2 Each written report of a mass appraisal must: (a) state the identity of the client,unless the client has specifically requested otherwise; state the identity of any intended users by name or type; Comment: An appraiser must use care when identifying the client to avoid violations of the Confidentiality section of the ETHICS RULE. If a client requests that the client's identity be withheld from the report,the appraiser may comply with this request. In these instances,the appraiser must document the identity of the client in the workfile and must state in the report that the identity of the client has been withheld at the client's request. (b) state the intended use of the appraisal; (c) disclose any assumptions or limiting conditions that result in deviation from recognized methods and techniques or that affect analyses, opinions, and conclusions; (d) state the effective date of the appraisal and the date of the report; Comment: In ad valorem taxation the effective date of the appraisal may be prescribed by law. If no effective date is prescribed by law,the effective date of the appraisal, if not stated,is presumed to be contemporaneous with the data and appraisal conclusions. The effective date of the appraisal establishes the context for the value opinion,while the date of the report indicates whether the perspective of the appraiser on the market and property as of the effective date of the appraisal was prospective, current,or retrospective. (e) state the type and definition of value and cite the source of the definition; Comment: Stating the type and definition of value also requires any comments needed to clearly indicate to intended users how the definition is being applied. When reporting an opinion of market value, state whether the opinion of value is: •In terms of cash or of financing terms equivalent to cash; or •Based on non-market financing with unusual conditions or incentives. When an opinion of market value is not in terms of cash or based on financing terms equivalent to cash, summarize the terms of such financing and explain their contributions to or negative influence on value. (f) state the properties appraised including the property rights; 5 Comment: The report documents the sources for location,describing and listing the property. When applicable,include references to legal descriptions,addresses,parcel identifiers,photos,and building sketches. In mass appraisal this information is often included in property records.When the property rights to be appraised are specified in a statute or court ruling,the law must be referenced. (g) summarize the scope of work used to develop the appraisal; exclusion of the sales comparison approach,cost approach,or income approach must be explained; Comment: Because intended users' reliance on an appraisal may be affected by the scope of work,the report must enable them to be properly informed and not misled. Sufficient information includes disclosure of research and analyses performed and might also include disclosure of research and analyses not performed. When any portion of the work involves significant mass appraisal assistance,the appraiser must describe the extent of that assistance. The signing appraiser must also state the name(s) of those providing the significant mass appraisal assistance in the certification, in accordance with Standards Rule 6-3. (h) summarize and support the model specification(s) considered,data requirements, and the model(s)chosen; Comment: The appraiser must provide sufficient information to enable the client and intended users to have confidence that the process and procedures used conform to accepted methods and result in credible value conclusions. In the case of mass appraisal for ad valorem taxation, stability and accuracy are important to the credibility of value opinions. The report must include a summary of the rationale for each model,the calibration techniques to be used, and the performance measures to be used. (i) summarize the procedure for collecting,validating, and reporting data; Comment: The report must summarize the sources of data and the data collection and validation processes. Reference to detailed data collection manuals or electronic records must be made, as appropriate, including where they may be found for inspection. 0) summarize calibration methods considered and chosen, including the mathematical form of the final model(s); summarize how value conclusions were reviewed; and, if necessary, state the availability and location of individual value conclusions; (k)when an opinion of highest and best use,or the appropriate market or market level was developed, summarize how that opinion was determined; Comment: The mass appraisal report must reference case law, statute,or public policy that describes highest and best use requirements. When actual use is the requirement,the report must discuss how use- value opinions were developed. The appraiser's reasoning in support of the highest and best use opinion must be provided in the depth and detail required by its significance to the appraisal. (1)identify the appraisal performance tests used and the performance measures attained; (m) summarize the reconciliation performed, in accordance with Standards Rule 5-7; and (n)include a signed certification in accordance with Standards Rule 6-3. 6 STANDARDS RULE 6-3 Each written mass appraisal report must contain a signed certification that is similar in content to the following form: I certify that,to the best of my knowledge and belief: —the statements of fact contained in this report are true and correct. —the reported analyses,opinions,and conclusions are limited only by the reported assumptions and limiting conditions,and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. —I have no(or the specified)present or prospective interest in the property that is the subject of this report, and I have no (or the specified)personal interest with respect to the parties involved. —I have performed no(or the specified) services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment. —I have no bias with respect to any property that is the subject of this report or to the parties involved with this assignment. —my engagement in this assignment was not contingent upon developing or reporting predetermined results. —my compensation for completing this assignment is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client,the amount of the value opinion,the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. —my analyses, opinions,and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. —I have (or have not)made a personal inspection of the properties that are the subject of this report. (If more than one person signs the report,this certification must clearly specify which individuals did and which individuals did not make a personal inspection of the appraised property.) —no one provided significant mass appraisal assistance to the person signing this certification. (If there are exceptions,the name of each individual providing significant mass appraisal assistance must be stated.) Comment: The above certification is not intended to disturb an elected or appointed assessor's work plans or oaths of office. A signed certification is an integral part of the appraisal report. An appraiser,who signs any part of the mass appraisal report, including a letter of transmittal,must also sign this certification. In an assignment that includes only assignment results developed by the real property appraiser(s), any appraiser(s)who signs a certification accepts full responsibility for all elements of the certification, for the assignment results,and for the contents of the appraisal report. In an assignment that includes personal property assignment results not developed by the real property appraiser(s), any real property appraiser(s) who signs a certification accepts full responsibility for the real property elements of the certification, for the real property assignment results, and for the real property contents of the appraisal report. In an assignment that includes only assignment results developed by the personal property appraiser(s), any appraiser(s)who signs a certification accepts full responsibility for all elements of the certification, for the assignment results,and for the contents of the appraisal report. In an assignment that includes real property assignment results not developed by the personal property appraiser(s), any personal property appraiser(s)who signs a certification accepts full responsibility for the personal property elements of the 7 certification,for the personal property assignment results,and for the personal property contents of the appraisal report. When a signing appraiser(s)has relied on work done by appraisers and others who do not sign the certification,the signing appraiser is responsible for the decision to rely on their work. The signing appraiser(s)is required to have a reasonable basis for believing that those individuals performing the work are competent. The signing appraiser(s) also must have no reason to doubt that the work of those individuals is credible. The names of individuals providing significant mass appraisal assistance who do not sign a certification must be stated in the certification. It is not required that the description of their assistance be contained in the certification,but disclosure of their assistance is required in accordance with Standards Rule 6-2(g). In developing a personal property appraisal, an appraiser must identify the problem to be solved, determine the scope of work necessary to solve the problem, and correctly complete research and analyses necessary to produce a credible appraisal. Comment: STANDARD 7 is directed toward the substantive aspects of developing a credible appraisal of personal property. The requirements set forth in STANDARD 7 follow the appraisal development process in the order of topics addressed and can be used by appraisers and the users of appraisal services as a convenient checklist. STANDARDS RULE 7-1 In developing a personal property appraisal, an appraiser must: (a) be aware of,understand, and correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal; Comment: This Standards Rule recognizes that change continues to affect the manner in which appraisers perform appraisal services. Changes and developments in personal property practice have a substantial impact on the appraisal profession. Important changes in the cost and manner of acquiring,producing, and marketing personal property and changes in the legal framework in which appraisers perform their assignments result in the need for corresponding changes in personal property appraisal theory and practice. Social change has also had an effect on appraisal theory and practice. The appraisal profession responds to changing circumstances with revised and new appraisal methods and techniques. Therefore, it is not sufficient for appraisers to maintain the skills and the knowledge they possess when they become appraisers. Each appraiser must improve and update his or her skills and knowledge to remain proficient in the appraisal of personal property. (b) not commit a substantial error of omission or commission that significantly affects an appraisal; and Comment: An appraiser must use sufficient care to avoid errors that would significantly affect his or her opinions and conclusions. Diligence is required to identify and analyze the factors, conditions, data, and other information that would have a significant effect on the credibility of the assignment results. 8 (c) not render appraisal services in a careless or negligent manner, such as by making a series of errors that, although individually might not significantly affect the results of an appraisal, in the aggregate affect the credibility of those results. Comment: Perfection is impossible to attain, and competence does not require perfection. However, an appraiser must not render appraisal services in a careless or negligent manner. This Standards Rule requires an appraiser to use due diligence and care. STANDARDS RULE 7-2 In developing a personal property appraisal, an appraiser must: (a)identify the client and other intended users; (b)identify the intended use of the appraiser's opinions and conclusions; Comment: An appraiser must not allow the intended use of an assignment or a client's objectives to cause the assignment results to be biased. (c)identify the type and definition of value, and ascertain whether the value is to be: (i) in terms of cash; or (ii) in terms of financial arrangements equivalent to cash; or (iii) in other precisely defined terms; and (iv) if the opinion of value is to be based on non-market financing or financing with unusual conditions or incentives,the terms of such financing must be clearly identified and the appraiser's opinion of their contributions to or negative influence on value must be developed by analysis of relevant market data; Comment: When reasonable exposure time is a component of the definition for the value opinion being developed,the appraiser must also develop an opinion of reasonable exposure time linked to that value opinion. (d) identify the effective date of the appraiser's opinions and conclusions; (e) identify the characteristics of the property that are relevant to the type and definition of value and intended use of the appraisal, including: (i) sufficient characteristics to establish the identity of the item including the method of identification; (ii) sufficient characteristics to establish the relative quality of the item(and its component parts,where applicable)within its type; (iii)all other physical and economic attributes with a material effect on value; Comment: Some examples of physical and economic characteristics include condition, style, size, quality, manufacturer,author,materials, origin, age,provenance, alterations,restorations, and obsolescence. The type of property,the type and definition of value,and intended use of the appraisal determine which characteristics have a material effect on value. 9 (v) the ownership interest to be valued; (vi) any known restrictions, encumbrances,leases, covenants, contracts, declarations, special assessments, ordinances, or other items of a similar nature if relevant to the assignment; and any real property or intangible items that are not personal property but which are included in the appraisal; Comment on(i)^(vi): The information used by an appraiser to identify the property characteristics must be from sources the appraiser reasonably believes are reliable. An appraiser may use any combination of a property inspection and documents or other resources to identify the relevant characteristics of the subject property. When appraising proposed modifications, an appraiser must examine and have available for future examination, documentation sufficient to identify the extent and character of the proposed modifications. An appraiser may not be required to value the whole when the subject of the appraisal is a fractional interest, a physical segment, or a partial holding. (f)identify any extraordinary assumptions necessary in the assignment; Comment: An extraordinary assumption may be used in an assignment only if. • it is required to properly develop credible opinions and conclusions; •the appraiser has a reasonable basis for the extraordinary assumption; •use of the extraordinary assumption results in a credible analysis; and •the appraiser complies with the disclosure requirements set forth in USPAP for extraordinary assumptions. (g) identify any hypothetical conditions necessary in the assignment; and Comment: A hypothetical condition may be used in an assignment only if- -use of the hypothetical condition is clearly required for legal purposes, for purposes of reasonable analysis, or for purposes of comparison; •use of the hypothetical condition results in a credible analysis; and •the appraiser complies with the disclosure requirements set forth in USPAP for hypothetical conditions. (h)determine the scope of work necessary to produce credible assignment results in accordance with the SCOPE OF WORK RULE. STANDARD RULE 7-3 In developing a personal property appraisal,when necessary for credible assignment results, an appraiser must: (a) analyze the property's current use and alternative uses as relevant to the type and definition of value and intended use of the appraisal; Comment: In the context of personal property,value can be a function of the choice of the appropriate market or, in some cases,market level for the type of item,the type and definition of value, and the intended use of the appraisal. The appraiser must consider the various uses of the property when viable alternative uses exist and when those alternative uses may result in a different value. 10 (b) define and analyze the appropriate market consistent with the type and definition of value; and Comment: The appraiser must recognize that there are distinct levels of trade(measureable marketplaces) and each may generate its own data.For example, a property may have a different value at a wholesale level of trade,retail level of trade, or under various auction conditions. Therefore,the appraiser must analyze the subject property within the correct market context. (c) analyze the relevant economic conditions that exist on the effective date of the valuation, including market acceptability of the property and supply, demand, scarcity or rarity. STANDARDS RULE 7-4 In developing a personal property appraisal, an appraiser must collect,verify, and analyze all information necessary for credible assignment results. (a) When a sales comparison approach is necessary for credible assignment results, an appraiser must analyze such comparable sales data as are available to indicate a value conclusion. (b)When a cost approach is necessary for credible assignment results,an appraiser must: (i)analyze such comparable cost data as are available to estimate the cost new of the property; and (ii) analyze such comparable data as are available to estimate the difference between cost new and the present worth of the property(depreciation). (c)When an income approach is necessary for credible assignment results, an appraiser must: (i)analyze such comparable data as are available to estimate the market income of the property; (ii) analyze such comparable operating expense data as are available to estimate the operating expenses of the property; (iii)analyze such comparable data as are available to estimate rates of capitalization and/or rates of discount; and (iv)base projections of future income and expenses on reasonably clear and appropriate evidence. Comment: An appraiser must, in developing income and expense statements and cash flow projections,weigh historical information and trends, current supply and demand factors affecting such trends, and competition. (d) When developing an opinion of the value of a lease, leased, or encumbered property, an appraiser must analyze the effect on value,if any, of the terms and conditions of the lease(s) or encumbrances. (e) When appraising multiple objects,the appraiser must consider the significance of the value of the individual assets to the assignment results. Those objects which are more significant to the assignment results should be the focus of the analysis and analyzed in appropriate detail. Comment: A group of objects may have a mix of high and low value items. Those objects that are more significant to the assignment results should be subject to a greater and appropriate depth of analysis. 11 (f) When analyzing the assemblage of the various component parts of a property, an appraiser must analyze the effect on value, if any,of the assemblage. An appraiser must refrain from valuing the whole solely by adding together the individual values of the various component parts. Comment: Although the value of the whole may be equal to the sum of the separate parts, it also may be greater than or less than the sum of such parts. Therefore,the value of the whole must be tested by reference to appropriate data and supported by an appropriate analysis of such data. A similar procedure must be followed when the value of the whole has been established and the appraiser seeks to value a part. The value of any such part must be tested by reference to appropriate data and supported by an appropriate analysis of such data. (g) When analyzing anticipated modifications to the subject property, an appraiser must analyze the effect on value, if any,of such modifications to the extent they are reflected in market actions. (h) When real property or intangible items are included in the appraisal,the appraiser must analyze the effect on value of such non-personal property items. Comment: When the scope of work includes an appraisal of real property or intangible items, competency in real property appraisal(see STANDARD 1) or business appraisal(see STANDARD 9)is required. In addition,competency in other types of personal property outside of the appraiser's specialty area may be necessary(see STANDARD 7 and the COMPETENCY RULE). STANDARDS RULE 7-5 When necessary for credible assignment results, an appraiser must, if such information is available to the appraiser in the normal course of business: (a) analyze all agreements of sale,validated offers or third-party offers to sell,options, and listings of the subject property current as of the effective date of the appraisal if warranted by the intended use of the appraisal; and (b) analyze all prior sales of the subject property that occurred within a reasonable and applicable time period if relevant given the intended use of the appraisal and property type. Comment: The data needed for the required analyses in Standards Rule 7-5(a)and 7-5(b)may not be available or relevant in all assignments. See the Comments to Standards Rules 8-2(a)(viii) and 8-2(b)(viii) for corresponding reporting requirements. STANDARDS RULE 7-6 In developing a personal property appraisal, an appraiser must: (a) reconcile the quality and quantity of data available and analyzed within the approach or approaches used; and (b)reconcile the applicability and relevance of the approach or approaches,methods and techniques used to arrive at the value conclusion(s). 12 1.02 Valuation Components of a Mass Appraisal System A. Direct Sales Comparison Each year, all sales and appraisals that can be reasonably obtained will be gathered. Sources of sales and appraisals can come from MLS, closing statements,renditions,fee appraisers and any other reliable source. The sales and fee appraisals are be sorted by school district, subdivision or abstract,by category and in some cases by class of improvement and ratio of appraised value to sale or fee appraisal. The sales and fee appraisals will be used to establish schedules for valuation purposes. B. Cost Approach The cost schedule,based on construction of similar improvements,will be developed from information gathered from reliable sources such as Marshall and Swift, a national publication of building cost; and local builders, local suppliers and any other sources considered reliable. Once the cost schedule is verified from available sales,the residential and commercial departments shall compare gathered sales and appraisals to all improved properties in each subdivision and abstract within the boundaries of the Denton Central Appraisal District. hi all, cases any changes made in value should be as to market value using mass appraisal system. Sales will be compared to all properties in an area,not just to one individual property.Appraising property is not an exact science, so valuing large numbers of properties at one time will reflect some low values, some high values and some values in the middle. C. Income Approach The income approach to value will be used when the direct sales comparison and cost approach to value would not give indication of market value. Renditions, state schedules published by the Comptroller's Office, information furnished by property owner/agents,National publications, and any other reliable sources will be used to determine market value by the income approach. D. Land Valuation Land values will be developed from an analysis of comparable sales. These sales will be used to develop a schedule of land values for abstract, subdivision and commercial land. Changes will be made to the land schedules based on comparable sales analysis,with the goal of achieving fair market values and uniformity of appraised values. E. Valuation of Agricultural Use Land Agricultural use values will be determined from information gathered from ASCS,Texas A&M University State Agricultural Dept.,Agricultural Income publication published by TU Electric, or any other reliable source. Information gathered will determine the makeup of the valuation schedule for cropland,pasture land and wasteland. F. Comptroller The State Ratio Study conducted by the Comptroller of Public Accounts, Property Tax Division,will be considered in re-appraising individual categories of property. 13 1.03 DCAD Appraisal Card Appraisal Codes Denton Central Appraisal District's appraisal card,for Real Property,Business Personal Property, or Mineral will consist(in part or whole)of the following information categories: A. Account Information 1. Property ID Number 2. Legal Description 3. GEO ID 4. Map ID 5. Situs 6. Property Group Codes 7. Last Inspection Date/Appraiser 8. Next Inspection Date/Reason B. Ownership and Exemptions 1. Owner Name and Address 2. Percent Ownership 3. Effective Acreage 4. Applied Exemptions 5. Taxing Entities C.Value Breakdown 1. Improvement/Land Values 2. Current and Prior Year Market Values 3. Ag Production Loss 4. Appraised Values 5. Homestead Cap Loss 6. Taxable Value D. Remarks and Sketch Commands E. Active Permit Information 1. Date 2. Type and Comments F. Income Approach Data 1. Rent/Vacancy Information 2. Expenses 3. Net Operating Income G. Tax Agent and Informal/Protest Information 1. Agent Contact Information 2. Inquiry/ARB Dates and Status 14 H. Property Photo and Sketch 1. Photo with Account Number and Photo Date 2. Sketch with Dimensions and Area ID I. Sales and Deed History 1. Date 2. Price 3. Transaction Type 4. Recording Information J. Improvement Valuation 1. Subdivision Code and Neighborhood Code/Factor 2. Segment ID 3. Improvement Type 4. Detail Description 5. SPTB Method 6. Class 7. Detail Area and Total Area 8. Detail Area Unit Price 9. Actual and Effective Year Built 10. Condition Type 11. Values and Total Value Before Depreciation,Obsolescence, or%Complete 12. Detail Depreciation%Good 13. Detail Physical,Economic,Functional, and Completion%Good 14. Detail Total% Good Adjustment 15. Adjusted Values and Total Adjusted Value 16. State Code and Homesite Declaration 17. Living Area K. Other Improvement%Good Adjustments and Features 1. Adjustment Type a. Additional Percent Good 1. Imp_Mod Adjustment b. Adjustment Percentage m. Improvement Modifier c. Arena no Roof n. Inventory d. Condition o. Location e. Drilling Site p. Obsolescence f. Economic q. Open air arena w/roof g. End Unit 26 r. Over built for area h. End Unit 26A s. Physical percent i. End Unit 26B t. Quality of Construction Adj j. Flooding u. Rental Property k. Foundation v. Split Entity 2. Feature Description 3. Feature Count and Value 15 L. Land Valuation 1. Subdivision Code and Neighborhood Code/Factor 2. Segment ID 3. Segment Description 4. Segment Type 5. Land Table Name 6. Soil 7. State Code 8. Land Table 9. State Code 10. Homesite Declaration 11. Appraisal Method Code 12. Size 13. Unit Price 14. Segment%Adjustment 15. Segment Mass Adjustment 16. Segment Market Values and Total Market Value 17. Adjustment Type a. Access p. lmod b. Area q. loc c. bldr r. lsize d. condo s. lview e. culde t. move f, drain u. prem g. ease v. ptdev h. econ w. row i. flood X. ry j. flway y. shape k. func Z. split 1. golf aa. topo m. green bb. treed n. 1-meth cc. undev o. lake dd. water 18. Ag Declaration and Use 19. Ag Use Type 20. Ag Use Table 21. Ag Unit Price and Value 16 See illustration below: DENTON CENTRAL APPRAISAL DISTRICT PROPERTY FIELD REOEW CARD 2019 = 20194-221523.411540 PROPORY0A10 tEOlu OEICRi1YM W.0 O mAIE W AXIEI 1 0"00!% EXBFnCRI WMI %AUE4ERM CIOtENU.UEI 0te1MUE1 PROPO:221523 "Of Real ' KEENE.JEFFRY W a GRACIE-L 411847 HS 251,218 MAX THE PRESERVE AT PECAN CREEK SEC G PH 18LK 9 LOT 33 CAO 6405 DAISY DR 1 J;0J1: , in LAW MAT +',450� � ft3,450 G0'"°^?>rA-00000500000033000D wPm: CD05 DENTON,TX7IM7315-05 ^ Sa IT., SET 324 T28� 321,855 riot: R221523 W100: F`{/ eaa01o11 J 0 umn 640.0.DAISY DR 708.7315 N a 324,T28 321,85d PROD UIE: MMRn EFMAEAMI:OMRICAP1.011 c,.. 0eA -PA. i ONrI I IAtE11E0 -.- gem ROMIMI IREIC FMSERWBMCI --- vMmE1: 4AITAMYR: P018 Ll"APPR: TAIJARAHH DARLING PLAN 3J8J PLAT R-3J1.R-332,R•3J3,SPLIT FROM 'TOPoMOM: CAPRAMIYR: 2)18 Nd°AP�: JACCU R39703. RMAC„E"II: LAIraWOAE: 03t9i2J13 MIaOVAMR: maa: Re certw m"TMpWM LAND AM: TAVAR MA U21,R25,D15,R23,D47,L12,UI,L5,D7,L12,U28,U2X2,U2,Lb OW caEC mue Am: TAMP U15112 WWREA10" Rw AG D37,R20.U18,LIM.U2,L6,U15,L12 a MFEN ra OP MD37XIMADI0XMR12•U7,R5,D1,R12,D9,L17,u3 D 16 ar nwEOr PpMrtI 1YPe IT EU%KUE AM Kimbell Comm - Rojo Ej L _ li 6 133 12 a OR we Eat OnERMI PERE EzMa avEl Ra NEW McauuE ' �]65 4— 11 W A 7 - — 765 C-R011 r. NET 3 4 3 47 21 £ 3R011 IOPT: NET lal'. G I 18 11-1 Jr+EG ACM: KELONC%E0%ftr 20 2$ fIMOWYIARMPR01Bf11 _— _ _ 1_ :AEO 0A1E APPR ITMUI ONIEACOMEmr{ 111j{�A1 -Nr{ - �� �•..li\t.ys'A 1Yh„\,�� — L� 1L1• 221523 021%204 - IALEIa0EED14110ev WE er IAiE TYPE RAM RNco RN :A10IT V'WT 11rMwRv M%PRv ORAMtOR Comm OED nEEn Peo PKE C0 rum °Dt;2x1 0 1 C.ARLINGHOLIES GN :'-4J4,F ?3i21Y2000 0 1 PRESERVE AT PE M :S-44"9 Xd 4;999 ) 1 FRICP�'ANER SW RBOAM: 1eB:MWARf1 WWOUIMVJ6 MAl1E1: WWAM WLU MR LAMIMARFAA146 WONRIUM 4lEMiL MPAOYHIMrr0E9M AOIMIIBIf/ YIRIY�IfIEAIAIet M TYPE DEOMM1N MR0 CLAIMMMCLAM OWrPtacE utMrlm RWEPPYR coo. 100E DM PRYI ECar RK caw AN AauuuE M MIA AQIAMT ABA% CEWWpM M1 OM VAUE A VA %MAREA R 6 20E60 6376 .'Mi=5 - 146134VI 097 131494 ExteriotW'all 1 Bn^k 0 5 AG ArTAC1E1MW R a 6140 23M 2001 M14134W% 090 lzrn Fkeptaoe 1 1 0 C OP OPEN PORCM R b' 1580 1046 2001 I'm - 116 M% 090 14M Foundabon I SLAB 0 MAB BOAUSROOM R a' 2005 19.77690E 090 17,798 Heatr9coolRg I CHCA 0 E MA2 SEM FLOOR R a 765.0 62278 2001 M 4027M 090 L32:1 IntenotFMi5C I Sheet 0 T. RES STCD:Al 3.M.1 (E2005) Hornesite:Y(100;9) 229,694 Living Area;3,146 206,725 Plumbing 1 3 2,000 ---------------------------------------------------------------------------------------------------------------- Roof Covenng I Compo 0 Number of Bedroom 1 3 0 Nurnbarof Rom s 1 10 WON: SUM.W IAAnlO IBM DMM'n$0 MREn LMWL N MMIYMIP:I cap9*1 fm"Ml:f11M awrP:a LWAOIMIIMBRI PROOUCIMIY 01OM1a1 u OEICFVM M MR. aI TABLE Ic RI MEIN MUMaI ummMM AW w11Aa UUMx WTM 0 ADJ NPE AWAMr MIA AO AOUE AOR91E AOURRPRC Aa+A1F- RESIDENTLOT 8 LQ388 Al Y(100%) SL 0153AC 9.00 1,00 1.00 A 63,45: N is 93.49 0 Page 1 of 1 Effective Date of Appraisal:January I Date Printed: &1&2018 12:03:07PM by terryn True A.utomator,Irc 1.04 APPRAISAL CODES Entity Codes C38 City of Haslet(Tarrant Co.) County, Cities, Schools C39 City of Grapevine C40 City of Newark(Wise Co.) C41 City of Rhome(Wise Co.) G01 Denton County C42 Town of Dish C43 City of Keller(Tarrant Co.) CAD Appraisal District C44 Town of Westlake C45 City of New Fairview(Wise Co.) C01 City of Aubrey C46 City of Aurora(Wise Co.) CO2 City of Carrollton C47 City of Corral City CO3 City of The Colony C48 Town of Prosper C04 City of Corinth C49 City of Celina C05 City of Denton C50 City of Hebron C06 City of Eastville C51 Town of Providence Village C07 Town of Flower Mound C08 City of Highland Village C09 City of Justin S01 Argyle ISD C 10 City of Krum S02 Aubrey ISD C11 City of Lake Dallas S03 Carrollton/Farmers Branch ISD C12 City of Lewisville SO4 Celina ISD C13 Town of Little Elm S05 Denton ISD C14 City of Pilot Point S06 Frisco ISD C15 Town of Ponder S07 Krum ISD C16 City of Sanger S08 Lake Dallas ISD C17 City of Roanoke S09 Lewisville ISD C 18 City of Krugerville S 10 Little Elm ISD C19 Town of Hickory Creek S11 Northwest ISD C20 City of Dallas S 12 Pilot Point ISD C21 City of Coppell S 13 Ponder ISD C22 City of Hackberry S 14 Sanger ISD C23 Town of Marshall Creek S 15 Era ISD C24 City of Oak Point S 16 Slidell ISD C25 City of Lakewood Village S 17 Prosper ISD C26 Town of Argyle S 18 Coppell ISD C27 Town of Copper Canyon S 19 Grapevine ISD C28 Town of Trophy Club S20 Carroll ISD C29 City of Plano C30 Town of Double Oak C31 Town of Bartonville C32 City of Frisco C33 Town of Northlake C34 Town of Shady Shores C35 Town of Cross Roads C36 City of Fort Worth C37 City of Southlake 18 Special Districts WO1 Colony MUD W02 Lake Cities MUA FO1 Denton County Fire District W03 Trophy Club MUD#1 LO1 Denton Co. Levy Imp District W04 Clearcreek Watershed Authority W05 Trophy Club MUD#2 PLAN Builder Home Plans W06 Do not use W07 Corinth MUD#1 E01 Denton CED W08 Lake Turner Municipal Util Dist#1 E02 Denton CED W09 Denton Co. FWSD 1-A E03 Carrollton CED W10 Denton Co. FWSD 1-B E05 Denton CED W11 Denton Co. FWSD 1-C E07 Denton CED W12 Denton Co. FWSD 1-D E08 Denton CED W13 Denton Co. FWSD 6 E09 Denton CED W 14 Denton Co. Dev Dist#4 E10 Denton CED W15 Denton Co. FWSD 1-E Ell Denton CED W16 Providence Village WCID E12 Denton CED W17 Denton Co. FWSD#10 E13 Denton CED W18 Denton Co. FWSD 8-A E14 Denton CED W19 Denton Co. FWSD 8-B ESD1 Denton Co. Emergency Service District W20 Denton Co. FWSD 11-A ESD2 Trophy Club PID#1 Emergency Service W21 Denton Co. FWSD 7 PID 1 Lewisville Public Improvement Dist#1 W22 Denton Co.MUD#4 PID2 Allegiance Public Improvement Dist#1 W23 Denton Co.Mud#5 PID3 Castle Hills PID W24 Denton Co. FWSD 8-C PID4 Town of Trophy Club PID#1 W25 Denton Co. FWSD 11-13 PID5 Briarwyck Public Improvement District W26 Denton Co. FWSD 4-A PID6 Hackberry Hidden Cove Public W27 Oak Point WCID#1 Improvement District W28 Oak Point WCID#2 PID7 Northlake PID#1 W29 Oak Point WCID#3 W30 Smiley Road WCID W31 Denton Co. FWSD 1-F ROl Denton Co. Reclamation, Rd&Util Dist W32 Denton Co. FWSD 11-C RUD Denton Co. RUD W33 North Fort Worth WCID#1 W34 Denton Co. FWSD 1-G W35 Valencia on the Lake WCID#1 TO1 Speedway TIF#1 W36 Denton Co FWSD 1-H T02 Speedway TIF#2 W36 South Denton County WCID#1 T03 Flower Mound TIRZ#1 W38 Alpha Ranch WCID TIF1 City of Lewisville TIRZ#1 W39 Belmont FWSD#1 TIF2 City of Lewisville TIRZ#2 W40 Mobberly MUD TIF3 Little Elm TIRZ#1 W41 The Lakes FWSD TIF4 Little Elm TIRZ#2 W42 Canyon Falls WCID#2 TIF5 The Tribute TIF#1 W43 Oak Point WCID#4 TIF6 Downtown TIF#1 W44 Canyon Falls MUD#1 W45 Belmont FWSD#2 XO1 Tribute at The Colony W46 Fort Worth MUD#1 W47 Denton Cty MUD#6 19 Exemption Codes AB Abatement AG EOY: AG CH Charitable CHODO 11.182 Community Housing Development Organizations CLT Community Land Trust DP Disability DPS DISABLED Surviving Spouse DVI Disabled Veterans 10%-29% DVIS Disabled Veterans Surviving Spouse 10%-29% DV2 Disabled Veterans 30%-49% DV2S Disabled Veterans Surviving Spouse 30%-49% DV3 Disabled Veterans 50%-69% DV3S Disabled Veterans Surviving Spouse 50%-69% DV4 Disabled Veterans 70%- 100% DV4S Disabled Veterans Surviving Spouse 70%- 100% DVCH Disabled Veteran Charity Homestead DVCHS Disabled Veteran Charity Homestead Surviving Spouse DVHS Disabled Veteran Homestead DVHSS Disabled Veteran Homestead Surviving Spouse ECO Economic Development EN Energy EX Exempt EX-XA 11.111 Public property for housing indigent persons EX-XD 11.181 Improving property for housing with volunteer labor EX-XF 11.183 Assisting ambulatory health care centers EX-XG 11.184 Primarily performing charitable functions EX-XH 11.185 Developing model colonia subdivisions EX-XI 11.19 Youth spiritual,mental, and physical development organizations EX-XJ 11.21 Private schools EX-XL 11.231 Organizations Providing Economic Development Services to Local Community EX-XM 11.25 Marine cargo containers EX-XN 11.252 Motor vehicles leased for personal use EX-XO 11.254 Motor vehicles for income production and personal use EX-XP 11.271 Offshore drilling equipment not in use EX-XQ 11.29 Intracoastal waterway dredge disposal site EX-XR 11.30 Nonprofit water or wastewater corporation EX-XS 11.33 Raw cocoa and green coffee held in Harris County EX-XT 11.34 Limitation on taxes in certain municipalities EX-XU 11.23 Miscellaneous Exemptions EX-XV Other Exemptions(including public property,religious organizations, charitable organizations, and other property not reported elsewhere) 20 EX366 HB366 Exempt FR Freeport FRSS First Responder Surviving Spouse GIT GOODS IN TRANSIT HS Homestead HT Historical LIH 11.181 Improving property for housing with volunteer labor LVE Leased Vehicles MASSS Member Armed Services Surviving Spouse OV65 Over 65 OV65S OV65 Surviving Spouse PC Pollution Control PPV Personal Property Vehicle SO Solar 21 Property Classification Codes SPTB Codes Al.....Residential Single Family J1.....Water Systems/Real and BPP A2.....Residential Mobile Home J2.....Gas Companies/Real and BPP A3.....Single Family Waterfront J3.....Electric Companies A4.....Condominium J4.....Telephone&Communication/Real and BPP A5.....Townhome J5.....Railroads A6.....Single Family Golf Course J6.....Pipelines AT.....Tax Abatement Real J7.....Railroad-Non-Operating B1.....Residential Multi-family J8.....Cable Companies B2.....Duplex K1.....Farm Machinery&Equip. C1.....Vacant Platted Lots/Tracts L I.....Tangible Commercial/Personal C2.....Commercial Lots In City L2.....Industrial Personal C3.....Lots Outside City LA.....Tax Abatement Personal C5.....Waterfront M2....Aircraft D1.....Qualified Open-Space Land D2..... Farm/Ranch Imps on Qualified Ag Land E I.....Rural Land/Improvement on Non Ag Land Improvement Type Codes E3.....Mobile Homes on Non Ag Land E4.....Vacant Non Ag Land C......Commercial FI.....Real, Commercial I........Misc Improvement F2.....Real, Industrial M......Mobile Home F3.....Commercial-Real-MH Parks R......Residential F4.....Commercial-Real Office Condo Gl.....Oil, Gas, and Mineral Reserves HI.....Personal Vehicles I1.....Banks-Real Building Attributes Exterior Wall Construction Style Adobe Brick A Frame Aluminum siding American Mansard Asbestos Siding Brownstone Asphalt Siding Bungalow Brick Veneer California Bungalow Cedar Cape Cod Concrete Block Colonial American Concrete Tilt Up Walls Contemporary Hardboard English Tudor Log Fiberglass Metal Siding Fireproof Structural Steel Plywood French Provincial Rock Greek Revival Shakes Log Shingles Masonry or Concrete Load Bearing Walls Siding Mediterranean Steel/Metal Metal Stone Mission Stucco Prefabricated Steel Frame Synthetic Plaster(EIFS) Ranch Tile Reinforced Concrete Columns Vinyl Siding Shingle Style Wood Southern Colonial FEET ........ Ceiling"Exterior Wall Height" Split Full Victorian Interior Finish Wood Concrete Wood or Steel Frame Drywall Foundation Plaster Sheetrock B.....Concrete Block M....Mason Roof Style P......Pier Dome S......Slab Flat Gable Hip Mansard 23 Roof Covering Asphalt Composition Shingle Copper Fiberglass Metal Roll Shake Slate Spanish Tile Tile Wood Shingle Unknown Foundation Concrete Block Mason Pier Slab Heat and Air CH(Central Heat) CHCA(Central Heat and Air) Cold Storage Facility Fuel Furnace Fireplace Gas Stove Moist Air Window Unit Solar 24 Land Appraisal Method Agricultural Use Property Codes A Acreage AG AG Use Granted F Flat Price AGLATE Late AG application FA Flat Acreage AG.RECD AG application received F-SFT Flat Square Foot AG.SENT AG Wildlife application FF Front Foot sent LT Flat Priced Per Lot AG_INT AG internal transfers SL Special Lot Pricing request new application SQ Square Foot AG_RC AG Re-check AG_RC2 AG Re-check again AG_SENT_INT_1 AG App sent internal Land Type Codes change AG—SENT—NEW-1 AG Appsent new owner I Homesite letter 1 2 Cropland AG_SENT_RF_1 AG App sent refile 3 Pasture letter 4 Woods AG_LGL AG Legal Description 5 Wasteland Change 6 Commercial AG_NOPEN AG App Deadline 7 Rear Lot Extended 8 Residential Lot AG OV65 Ag Applied with OV65 9 Waterfront Lot Exemption 10 Timberland AG OV65 SENT1 AG OV 65 First letter AG Agriculture Exempt sent C1 Cropland I AB_OV65_SENT2 AG OV 65 Second C2 Cropland I1 letter sent C3 Cropland III AG5% AG use under protest CA Common Area AGCKRB Check AG for rollback H Hanger AGD AG use denied IL Improved Lot AGLATEDENY Denied Late AG PI1 Improved Pasture I application P12 Improved Pasture II AGOWNER AG use new owner P13 Improved Pasture III AGPRCI6 2016 AG application PN1 Native Pasture I AGSUR AG use survey letter PN2 Native Pasture II DORB Do Rollback PN3 Native Pasture III RBLTS AG use rollback letters UD Undeveloped RF Request to re-file AG UL Undeveloped Lot application W Wasteland AGLATE2016 Remove penalty flag 2016 25 1.05 Ethical Conduct Title 16. Texas Department of Licensing and Regulation Chapter 94 Administrative Rules of the Texas Department of Licensing and Regulation Effective January 1,2014 A. General For the property tax system to achieve its intended purpose of providing funds for those activities that are essential to the public welfare,not only must the entire process be fair and equitable to all taxpayers, and to each taxpayer individually, it must be so perceived by them and the public at large. These rules are directed toward the achievement of that goal. Persons registered with the Texas Department of Licensing and Regulation(TDLR) shall perform their duties in accordance with applicable laws,rules and regulations; and shall avoid the act or appearance of improper influence, conflict of interest, discrimination,abuse of powers,unfair treatment or misuse of titles by conforming to the Rules stated in the following document. PROPERTY TAX PROFESSIONALS Title 16 Texas Administrative Code Chapter 94 Administrative Rules of the Texas Department of Licensing and Regulation Effective January 1, 2014 Table of Contents 94.1. Authority 94.10. Definitions 94.20. Persons Required to Register 94.21. Registration 94.22. Renewal of Registration 94.24. Inactive Status 94.25. Continuing Education 94.70. Responsibilities of a Registrant: General 94.71. Responsibilities of a Registrant: Equal and Fair Treatment 94.72. Responsibilities of a Registrant: Conflicts of Interest 94.73. Responsibility of Registrant: Use of Titles 94.80. Fees 94.90. Sanctions and Administrative Penalties 94.91. Enforcement Authority 94.100. Code of Ethics 26 94.1.Authority. (New rule effective January 18, 2010, 35 TexReg 367) This chapter is promulgated under the authority of Texas Occupations Code, Chapters 51 and 1151. 94.10.Definitions. (New rule effective January 18, 2010, 35 TexReg 367; amended effective January 1, 2011, 35 TexReg 11625) The following words and terms,when used in this chapter,have the following meanings,unless the context clearly indicates otherwise: (1)Act--Texas Occupations Code, Chapter 1151. (2)Registered Texas Collector(RTC)--Certified Class III Collector. (3)Registered Professional Appraiser(RPA)--Certified Class IV Appraiser. (4)Registered Texas Assessor/Collector(RTA)--Certified Class IV Assessor/Collector. (5)USPAP--Uniform Standards of Professional Appraisal Practice. 94.20.Persons Required to Register. (New rule effective January 18, 2010, 35 TexReg 367; amended effective January 1, 2014, 38 TexReg 9524) Those required to register are: (1)the chief appraiser of an appraisal district, an appraisal supervisor or assistant,a property tax appraiser, an appraisal engineer,and any other person authorized to render judgment on, recommend, or certify an appraised value to the appraisal review board of an appraisal district; (2)a person who engages in appraisal of property for ad valorem tax purposes for an appraisal district or a taxing unit; (3)an assessor-collector, other than a county assessor-collector,a collector,or another person designated by a governing body as the chief administrator of the taxing unit's assessment functions, collection functions,or both; and (4)a person who performs assessment or collection functions for a taxing unit and is required to register by the chief administrator of the unit's tax office. 94.21.Registration. (New rule effective January 18, 2010, 35 TexReg 367; amended effective January 1, 2011, 35 TexReg 11625; amended effective January 1, 2014, 38 TexReg 9524) To be registered an applicant must: 27 (1)be at least 18 years of age; (2)be a resident of the State of Texas; (3)be a person of good moral character; (4)be a graduate of an accredited high school or holder of high school graduation equivalency; (5)be actively engaged in appraisal, assessing/collecting, or collecting for an appraisal district, tax office,or private firm working for an appraisal district or tax office; (6) submit a completed application on a form approved by the department; (7)pay the applicable fees under§94.80; and (8) successfully complete all requisites appropriate for the applicant's classification level: (A)Appraisers (i)A Class I appraiser must be registered. (ii)A Class II appraiser must: (I)be a Class I appraiser registrant; and (II) successfully complete within twelve months of registration: (-a-)no less than 32 hours in the basics of the Texas property tax system; (-b-)no less than 8 hours in ethics; and (iii)A Class III appraiser must: (I)be registered as a Class II appraiser registrant; and (II) successfully complete within thirty-six months of registration: (-a-)no less than 18 hours in the income approach to value; (-b-)no less than 18 hours in the theory and practice of personal property appraisal; 28 (-c-)no less than 15 hours in USPAP; (-d-)no less than 24 hours in the theory and practice of appraisal of real property; and (-e-)pass the Class III examination. (iv)A Class IV appraiser(RPA)must: (I)be registered as a Class III appraiser registrant; and (II) successfully complete within sixty months of registration: (-a-)no less than 18 hours in analyzing real property appraisal; (-b-)no less than 16 hours in Texas Property Tax Law; and (-c-)no less than 18 hours in mass appraisal; (III) successfully complete no less than 3.5 hours in USPAP if the 15 hour USPAP course has not been completed in the last two years; (IV)pass the appraiser Class IV examination within five years of registration; and (V)have a minimum of three years experience as a registered appraiser. (B)Assessor/Collectors (i)A Class I assessor/collector must be registered. (ii)A Class II assessor/collector must: (I)be registered as a Class I assessor/collector registrant; and (II) successfully complete within twelve months of registration: (-a-)no less than 32 hours in the basics of the Texas property tax system; and (-b-)no less than 8 hours in ethics. (iii)A Class III assessor/collector must: 29 (I)be registered as a Class II assessor/collector registrant; and (II) successfully complete within thirty-six months of registration: (-a-)no less than 16 hours in Texas Property Tax Law; and (-b-)no less than 18 hours in assessment and collection. (iv)A Class IV assessor/collector(RTA)must: (I)be registered as a Class III assessor/collector registrant; (II) successfully complete within sixty months of registration: (-a-)no less than 18 hours in advanced assessment and collections; (-b-)no less than 12 hours in truth in taxation; (III)pass the Class IV assessor/collector examination within five years of registration; and (IV)have a minimum of three years experience as a registered assessor/collector. (C) Collectors (i)A Class I collector must: (1)be registered; and (II) successfully complete within twelve months of registration: (-a-)no less than 32 hours in the basics of the Texas property tax system; and (-b-)no less than 8 hours in ethics. (ii)A Class II collector must: (1)be registered as a Class I registrant; and (II) successfully complete: (-a-)no less than 16 hours in Texas Property Tax Law; 30 (-b-)no less than 18 hours in assessment and collection; and (-c-)no less than 18 hours in advanced assessment and collections. (iii)A Class III collector(RTC)must: (I)be registered as a Class II collector registrant; (Il)pass the collector Class III examination within three years of registration; and (I1I)have a minimum of two years experience as a registered collector. (D) The provisions in this paragraph apply to registrations that renew on or after January 1, 2011. 94.22.Renewal of Registration. (New rule effective January 18, 2010, 35 TexReg 367; amended effective January 1, 2011, 35 TexReg 11625) (a)All registrations expire one year after the day issued. The Department may extend the expiration date of a registration to correspond to the registrant's original registration date. (b)To renew an applicant must: (1)comply with all provisions of the Act and this chapter; (2) submit a completed application on a department-approved form; (3)pay the applicable fees; and (4) successfully complete all requisites appropriate for the renewal applicant's classification level. (c)To renew and maintain continuous registration,the renewal requirements must be completed prior to the expiration of the registration. (d)Applications not filed by the expiration date are considered applications for late renewal and are subject to late renewal fees under§60..83 of this title (relating to Late Renewal Fees). (e)Registrations issued from a late renewal application will have an unregistered period from the expiration date of the previous registration to the issuance date of the renewed registration. Work 31 that requires a registration issued under this chapter must not be performed during the unregistered period. (f)A registrant must complete all registration renewal requirements within one year of the date the registration expires, or the renewal application shall be deemed void. (g)If the registrant does not meet the deadline established in subsection(f),the person must reapply for a new registration by complying with the requirements and procedures, including any examination requirements and payment of fees. (h)Non-receipt of a renewal notice from the department does not exempt a person from any requirement of this chapter. 94.24.Inactive Status. (New section effective March 1, 2012, 37 TexReg 1325) (a)To change a registration to inactive status, an applicant must submit a completed application on a department-approved form. (b)A person whose registration is on inactive status may not engage in activity requiring a registration. (c)A registration on inactive status must be renewed in accordance with §94.22;however, continuing education is not required for renewal of a registration on inactive status. (d)The time period to obtain certification requirements is stopped for the duration the registration is on inactive status. (e)To change from an inactive registration to an active registration, an applicant must: (1) submit a completed application on a department-approved form; (2)pay the applicable fee; and (3)complete the continuing education that is required for the renewal of an active registration during the preceding registration period. Continuing education hours used to satisfy the requirement for changing from an inactive license status to an active license status may not also be utilized for a future renewal of an active registration. 32 94.25. Continuing Education. (New rule effective January 18, 2010, 35 TexReg 367; amended effective January 1, 2011, 35 TexReg 11625; amended effective March 1, 2012 37TexReg 1325; amended effective January 1, 2014, 38 TexReg 9524) (a)Terms used in this section have the meanings assigned by Chapter 59 of this title,unless the context indicates otherwise. (b)A Registered Professional Appraiser(RPA)must complete 30 hours of approved continuing education to be eligible to renew the registration. The continuing education must include: (1)two hours in ethics as required by§94.250)(3); (2)a state laws and rules update course; and (3) 3.5 hours in USPAP. (c)A Registered Professional Appraiser(RPA)that is a chief appraiser must complete 30 hours of approved continuing education to be eligible to renew the registration. The continuing education must include: (1) 3.5 hours in USPAP; (2)a state laws and rules update course; (3)two hours in chief appraiser ethics, as required by§94.250)(3); and (4) 15 hours in one or more of the topics listed in §94.250)(1), (3), (4), (5), or(6). (5)The provisions of subsection(c)are effective for those registrations expiring on or after January 1,2015. (d)A Registered Texas Assessor-Collector(RTA)must complete 30 hours of approved continuing education to be eligible to renew the registration. The continuing education must include: (1)two hours in ethics; and (2)a state laws and rules update course. (e)A Registered Texas Collector(RTC)must complete 10 hours of approved continuing education to be eligible to renew the registration. The continuing education must include: 33 (1)two hours in ethics; and (2)a state laws and rules update course. (f) Continuing education credit must be completed during the 24 month period before the expiration of the license.Newly certified registrants are not required to complete continuing education until their second renewal after their certification deadline. (g)For a late renewal,the continuing education hours must have been completed within the two- year period prior to the date of renewal. (h)A course approved for use under§94.21 may be taken for continuing education credit. (i)A registrant may not receive continuing education credit for attending the same department- numbered course more than once within the two-year period prior to the date of renewal. 0)To be approved by the Comptroller,a provider's course must be dedicated to instruction in: (1)appraisal procedures and methods; (2)tax assessment and collection; (3)ethics; (A)general; or (B) chief appraiser; (4)laws and rules; (5)USPAP; or (6)customer service. (k) The provisions in this section apply to registrations that renew on or after January 1, 2011. 94.26.Break In Service Credit(New section effective March 11 2012, 37 TexReg 1325) (a)A registrant may receive an adjustment of their anniversary date for a break in service as defined in Texas Occupations Code, §1151.160(f)by: 34 (1) submitting a completed form approved by the department; and (2)paying the applicable fee. (b)An applicant for credit under this provision must provide proof, acceptable to the department, of time during which the person was not employed in the type of employment for which the person was registered. If no proof is available,the department may award credit for"break in service" as it determines from previous department registration records. (c)Under no circumstances will a break in service credit exceed five years. 94.27.One-Year Extension. (New section effective March 1, 2012, 37 TexReg 1325) (a)A registrant may receive a one-year extension to meet certification requirements by: (1) submitting a completed form approved by the department; (2)paying the applicable fee; and (3) submitting supporting documentation deemed appropriate by the department for extension under Texas Occupations Code, §1151.160(g). (b)The extension will begin on the day after the original deadline for certification,regardless of when the extension is requested or on the discretion of the department. 94.28. Re-application. (New section effective March 1, 2012, 37 TexReg 1325) An applicant that does not meet any of the requirements for extension under Texas Occupations Code, §1151.160(g), and does not qualify for reinstatement under Texas Occupations Code, §1151.1605,may reapply for registration after being unregistered for two years by: (1)paying the applicable fee for new application; (2) submitting a completed form approved by the department; and (3)qualifying as class II registrant. 35 94.70.Responsibilities of a Registrant: General. (New rule effective January 18, 2010, 35 TexReg 367; amended effective January 1, 2011, 35 TexReg 11625) (a)A registrant must not violate any provision of the Act or this chapter. (b)A registrant must timely respond to the department's investigative requests including making a complete written answer to any complaint. (c)Registrants must inform the department within 30 days of any changes to their employment and change their registration as appropriate. (d)A registrant must not violate the property tax professional's Code of Ethics,referenced in §94.100, or aid or encourage another to violate the Code of Ethics. (e)A registrant must not engage in any practices that constitute acts of improper influence, conflict of interest,unfair treatment, discrimination, abuse of powers, or misuse of titles. (f)A registrant must be in compliance with any report issued by the Comptroller of Public Accounts under §5.102 of the Tax Code. (g)An appraisal registrant or assessor/collector must be certified in their field within five years of registration. (h)A collector registrant must be certified in their field within three years of registration. (i)A registrant may act in a purely private capacity regarding a personal tax matter so long as he does not use his official position to influence the outcome of such a dispute. 94.71.Responsibilities of a Registrant: Equal and Fair Treatment. (New rule effective January 18, 2010, 35 TexReg 367) (a)A registrant must apply equally and fairly any appraisal, assessment, or consulting service according to the Uniform Standards of Professional Appraisal Practice and generally accepted appraisal,assessment, or collection practices applicable to an assignment. (b)A registrant may not accept or solicit any benefit in return for favorable treatment. (c)A registrant must not knowingly testify falsely or withhold any information,or influence anyone into testifying falsely or withholding any information in any investigation or proceeding. 36 (d)A registrant must not knowingly mislead any member of the public who makes a reasonable inquiry or request on tax matters. (e)A registrant must not predetermine the value or value range of a property or properties and then manipulate data to arrive at a predetermined conclusion. (f)A registrant must not perform calculations: (1)by methods other than those directed by law,rule,or written guidance of the Comptroller of Public Accounts,or (2)that are designed to result in a predetermined effective tax rate,or rollback tax rate, current or delinquent collection rate, or other value,rate, or ratio used for official purposes. (g)A registrant must not provide,to any private party,information that is not provided to, or reasonably available to all persons. 94.72.Responsibilities of a Registrant: Conflicts of Interest. (New rule effective January 18, 2010, 35 TexReg 367) (a)A registrant must disclose in writing to the appraisal district or taxing entity any relationship of consanguinity within the third degree that may relate to an assignment so long as he holds a registration position. (b)A registrant must disclose in writing to the appraisal district or taxing entity any outside employment. (c)A registrant must disclose in writing to the appraisal district or taxing entity any financial interest in any private business or real property subject to the appraisal district or taxing entity where she is employed. (d)A registrant must not invest in property,interests, or transactions which create a conflict of interest or which affects independent judgment or performance in the official position. (e)A registrant must not engage in any activity or employment outside of the appraisal office or tax office if such engagement adversely affects his impartiality in the execution of his official duties or adversely affects the performance of his official duties. 37 (f)A registrant must not use agency resources for the personal benefit of himself,any party in whom he has an interest, or any public servant; or for the benefit of any social or political organization unless any member of the general public could make similar use of the agency resources. (g)A registrant in their official capacity must not endorse the services or products of any person or firm. 94.73.Responsibility of Registrant: Use of Titles. (New rule effective January 18, 2010, 35 TexReg 367) A person may not use the titles Registered Professional Appraiser,Registered Texas Assessor/Collector,or Registered Texas Collector unless he is an active and certified registrant with the department and performing official duties as a property tax appraiser,assessor/collector,or collector. 94.80.Fees. (New rule effective January 18, 2010, 35 TexReg 367; amended effective March 1, 2012 37 TexReg 1325; amended effective January 1, 2014, 38 TexReg 9527) (a)Application fees. (1)Appraiser--$100 (2)Collector-4100 (3)Assessor/Collector--$100 (b)Renewal fees. (1)Appraiser--$55 for registrations expiring before February 1, 2014; $45 for registrations expiring on or after February 1, 2014 (2)Collector--$55 for registrations expiring before February 1,2014; $45 for registrations expiring on or after February 1,2014 (3)Assessor/Collector--$55 for registrations expiring before February 1,2014; $45 for registrations expiring on or after February 1,2014 (c) 'Break in service'credit application fee-475 (d)One-Year Extension application fee-425 38 (e) Change from inactive status to active status--$25 (f)Late Renewal Fees. Late renewal fees for licenses issued under this chapter are provided under §60..83 of this title(relating to Late Renewal Fees). (g)Revised/Duplicate License/Certificate/Permit/Registration--$25 (h)All fees are non-refundable, except as otherwise provided by law. 94.90. Sanctions and Administrative Penalties. (New rule effective January 18, 2010, 35 TexReg 367) A person who violates the Texas Occupations Code, Chapter 1151,a rule,or an order of the executive director or commission relating to Texas Occupations Code, Chapter 1151,will be subject to administrative sanctions and/or administrative penalties under Texas Occupations Code, Chapters 51 and 1151 and applicable agency rules. 94.91.Enforcement Authority. (New rule effective January 18, 2010, 35 TexReg 367) The enforcement authority granted under Texas Occupations Code, Chapters 51 and 1151 and any associated rules may be used to enforce Texas Occupations Code, Chapter 1151 and this chapter. 94.100. Code of Ethics. (New rule effective January 18, 2010, 35 TexReg 367,• amended effective October 15, 2010, 35 TexReg 9083) Registrants must: (1)be guided by the principle that property taxation should be fair and uniform, and apply all laws,rules,methods, and procedures, in a uniform manner,to all taxpayers; (2)not accept or solicit any gift, favor, or service that might reasonably tend to influence the registrant in the discharge of official duties,with the following exceptions: (A)the benefit is used solely to defray the expenses that accrue in the performance of duties or activities in connection with the office which are nonreimbursable by the state or political subdivision; (B) a political contribution as defined by Title 15 of the Election Code; or (C) an item with a value of less than$50, excluding cash or a negotiable instrument; 39 (3)not use information received in connection with the duties of an appraiser,assessor, or collector for their own purposes,unless such information can be known by ordinary means to any ordinary citizen; (4)not engage in an official act that is dishonest,misleading, fraudulent, deceptive, or in violation of law; (5)not conduct their professional duties in a manner that could reasonably be expected to create the appearance of impropriety; (6)not accept an appraisal,assessment, or collection related assignment that can reasonably be construed as being in conflict with the registrant's responsibility to their jurisdiction, employer, or client, or in which the registrant has an unrevealed personal interest or bias; and (7)not accept an assignment or responsibility in which the registrant has a personal interest without full disclosure of that interest. 1.06 Notice of Appraised Value The Legislature requires the chief appraiser to deliver,by April 1 or as soon thereafter as practicable if the property is a residence homestead or by May 1 or as soon thereafter as practicable for any other property, a written notice of appraised value to the property owner. Appraisal districts are required to mail a notice if: • The appraised value of the property is greater than the preceding year. • The appraised value of the property is greater than the value the property owner rendered • The property was not on the appraisal roll in the preceding year. • The ownership of the property has changed from the preceding year. Denton Central Appraisal District(DCAD)has chosen to mail appraisal notices to every property owner every year. Appraisal notices will contain the following information: • A list of the taxing unites in which the property is taxable. • The appraised value of the property in the preceding year • The taxable value of the property in the preceding year for each taxing jurisdiction • The appraiser value of the property for the current year • Any exemptions applied to the property,must show the type and amount of each exemption • An estimate of the taxes using the current appraised value and the preceding year tax rates. 40 The notice of appraised value services to notify the property owner of an estimate of market value,the exemption applied to the property, and any agricultural use applied. It also services to notify the owner of • The current mailing address the district has • returned appraisal notices are worked to find the correct address • If the correct mailing address is not found the account is coded as undeliverable. This helps the staff when the property owner states at a later date that they did not receive the notice. • The identification of the property;the situs address,the legal description,the property account number. • The taxpayer's rights to appeal the value • DCAD includes in the mailing information on the appeals procedures and frequently asked questions. • The inclusion of property on the appraisal roll • To review for equitable appraisal • The qualification for an agricultural use appraisal • Any action taken by the Chief Appraiser and Appraisal District that affected the value This starts the informal process of reviewing the information with the property owner. Taxpayers have until May 315t or 30 days from the date the notice was delivered to the post office to either file a protest or come in to speak with an appraiser. Protest can be made in person,mail, email or fax. Informal reviews of property values over the phone are limited to taxpayers who are unable to come in due to some type of disability. During the 30-day protest period appraisers are available to talk to owners/agents. If the appraiser and owner/agent agree on the value of a property,the owner/agent and appraiser will sign a form titled "Agreement to Establish Property Values". This agreement is binding between the two parties only for the current year. If the appraiser and the owner/agent cannot agree the owner/agent must complete the form"Notice of Protest"and a hearing is scheduled before the Appraisal Review Board(ARB). The owner/agent has the right to 15 days' notice before the ARB hears the protest to develop the information to present to the ARB that would help their case. However, if the owner/agent wishes to waive the 15- day,they may do so by signing a waiver. When the property has been scheduled with the ARB the property owner/agent is given a form titled "Information for Property Owners from the Chief Appraiser". This document tells the owner/agent of their right to inspect and obtain copies of the DCAD value schedules, formula, comparable sales and any other information that the district plans to use at the hearing. 41 This is NOT Tax 2018 Notice Of Appraised Value Do Nor Pay From Statementt This Notice Property ID: Property ID# DENTON CENTRAL APPRAISAL DISTRICT Ownership%:100,00 3911 MORSE STREET Geo ID:SD3887A- -0000 PO BOX 50747 Le Legal DENTON,TX 76206 Legal Description Phone: 940-349-3800 Fax: 940-349-3985 DATE OF NOTICE:April 18,2018 LegalAcres:0.16E3 sdus: Address of Property Appraiser: Owner ID:411840 Owner Name Mailing Address Dear Property Owner, We have appraised the property listed above for the tax year 2018. As of January 1,our appraisal is outlined below: Appraisallnformation Last Year MIT Proposed Struchre;ImprovementMarket'.alue 220.828 251,278 Market Value of Non Ag?xnber Land 63.450 63,450 Market Value of Ag?imber Land 0 0 Market Value of Personal Property.-Minerals 0 0 Total Market Value 294,278 324,728 Productivity Value of AWTimber Land D 0 Appraised`slue 284.278 312.708 Homestead Cap Value excluding Non-Homesite Value i.e.Ad,Commercial; 2b4,278 312,706 Exem ptiors H S H S 2017 2017 2018 2018 2018 Exemption Taxable Taxing Unit Proposed Exemption Taxabb Tax Rate Estimated Freeze Year and Amount Value I I Appraised Value Amoutl Value Taxes TaxCeiiry: 5,0D0 279,278 DENTON CITY OF 312.705 5.ODD 307.705 0.637856 1.952.72 0 294,278 DENTON COUNTY 312.705 0 312.705 0.237812 743.65 25,000 259.278 DENTON ISD 312,705 25,000 287,705 1.540D00 4,430.67 Do NOT Pay From This Notice Total Estimated Tax: $7,137.04 The difference terweer the 2013 appraised value and the 2018 appraised value is 28.15%. This percert3ge rformation is required by Tax Cod-_-n-,r 2`.'3fc-",. The Texas Legislature does nor set the amount of your local tares. Yourproperry tax burden is decided by your locally elected officials,and all inquires concerning your taxes should be directed to those officials. 'If you qualified your home for a 55 and older or disabled person homestead exemption for school taxes,the school taxes on that home can t increase as long as you own and live in that home. The tax ceiling is the amount you pay in that year that you qualified for the 55 or oker or disabled person exemption. The school taxes on your home may not go above the amount of the ceiling,unless you improve the horse(other than normal repairs or maintenance). The governing body of each taxing unit decides whether or rat taxes on the property will increase.The appraisal district only determines the value of the property. To five a protest,complete the notice of protest form following the instructions included in the form and no later than the deadline bekrw,mail or deliver the form to the appraisal review board at the following address: 3911 MORSE ST.DENTON.TX 762.08 Deadline for filing a protest: May 18.2018 Location of hearings: 3911 MORSE ST.DENTON.TX 7WW ARB will begin hearings: May 22.2018 Enclosed are copies of the following documents published by the Texas Comptroller of Public Accounts: (1)Property Tax Remedies:and(2)Notice of Protest. If you have any questions or need more information,please contact the appraisal district office at 9403493800 or at the address shown above. Sincerely, Chief Appraiser 42 Texas Comptroller of Pubbc Accounts Property Appraisal — Notice of Protest Darttart Central ApprarsA DdVid 1940)349-38M Apptimma Crass■harm 4%ome Iwea ewe and murnbwi PO Sm 2816 DaMtan.TX MZ0 -n% Aayro►Ob %$a.Ito code GENERAL MIMPLICTIOkS:This bm.s for use by a property otww cr the owner s dvarW+ltod peel to hit a pmisft togserfng amain&.morn of Iry aNpt"ddbrl romp cowdo foie Apptwing the"nor's pTrporry aria hove Ina wpmsial rond*bWrd(AAB!hoer and Wwdo Will mosses,Swinton 3 of this form aaYaea me reasons or grocr+ee x4to Tam Code Sewn a L41 O'dl a proper r o w mae!ne right to pro". Lessees o"achAy obll WW to vowrow"a pmwy owner tier property tale.may be Orr}led to PmAW at-a last4r a al Tar Corse repttern"arm sties,mcLA*v Pose a,Tar Mode Seclion a1.413. FILING INSTRUCTIONS:This docwwr and aN wipporwng di}1/r.erle►t1Dli must be 1/ea w,tn trio 3"vots3l di-u,o dace-ii sacra Canty in*hcjl wr property s bated.Do aW flo trim doa/ns►it rrtlti Ova Teaser Carvitobw of PubiK Accounts.A droctoty with cvntsct edonrliborr for spprws�)ostr,cl tlincvs rney be tpirr it W trio Gompt-oNM's w'l'tse". FLUNG DEAMMES:The typical doealrlo for filing a r%A"A lmncdst m midnight gtar 1<< A d4hoto..One lo*rrdy apply It • rite noise of soprareea vtck,a was delivered to the proper.owner after April 16 • n,e ptnaaaiI cryicents a Cho r n Pio Ipie or ago ailtural aper-spars rw timbedand • the apPta"dnvrtct or the ARB was requirtd try law W trend Pie pr*mwty owno a rla6m alxiul a pivver-y and dd rutt, • the ARB made a Change to site ar4KWS l recofft thel adveney SPIK s the proparfy osyner and the prov". Dwner r",.ea node,A she ct4n" or • m catan hretod Ciramatercas the impart.owner had good cAusv for nasttAig tots p sow tblg doedmo. Conrad rim AFW ko the county N wet-h rtv ptoprwly o WCAUd for e10 SOK411C proles+I"load-W. TYPES Of PROTTST HEARINGS,Utrtet Tax Gdde Section A IrAS,a pmpony avow may appw or p4mKipiam in ev ARB poorest hearing m one of tttvw Ha/s r Cantu at toe heanng ty miplarte coresron0e eeq:or by wrrpon affie6va s.aninvoiss. 6 VVENCE FOR HEARINGS:A pe•wi swum eewp in on ARB twarwig W lsleeroov cvminrenOe can or try wwovir,avir%rvit adr"Mason mist%,Berta "Amice ffm a wrlPon o"Idavit bdr svW to Pie ARB- In lore nrwrwig oayrh;.A cnmpioleil and signed From. 3 Aeg erty Owners Aettlrril of Evam,oe to ere Appraisal KeAew Bowe may be used as the ae da/a to ntbmut evideric*beArr Pie AAB nea M E.ldence maV be submfed icy err. heenng type otwev ri paper or on a vnall cortabO ekrl antic drt•ce(such es a CD.USB tgv drew or thump dnvei wtwch will to Moor by the AAB.Do not bung wtdwicv on a sonars phone,Ttv ARW*neA"N ptr oedorol tei;snfing all 1hr mgiwtsrtords to properly w t mil ottdwicr tin a small r+Dnacio electronic devices w-.te1 be nervier. NONCE_Trio Comigim ller s olece may not edvirr a pr owrty orwwi A propoiry owner's ogwil the cowl eppra,acv or any appraisal dshid orkkwe an a matter wa!out CorWroNrr s toVisv bows rt tho wb1oc d a t>.ebbr to ttta ARB.C mA1 Tam Codm Chapw 41 cw tort APO hearing p•ooeO.rws for more mltvmr'rre� 7.t.%iM ta.-,marr;1 Inr olw-ihn p,jWV s riled, TZ am Homer 4 rrl,x,e.tr Cemree i.Lessee tAeoro Ass»•.cra,stw.ZIP Cod. PON-mly PW V IW"xtat jams cam a^e ariewt Lri*1 Aloaes• 'Ar.tvmat emroee of a tso 00 of we PAIC'r.41A to rotvo f-gil maser 00woremV rna s«vien• Z-$37.MO.".by w4kdnp 0%&men aalrw m Nis Vtn.ow on enittnrtolr fsrtsrMtO b S toieeee sell ov r1LAn'Ind tier eton ArA It 1 cstrimmeellar lei Mgovlaartaprowtty111 43 Texas COMPtrOUCT of Public Accounts SECTIONDoscitpoon Provide Hie descnpbve infonnetion requested below, PhysiculAddresn.Csv,State-ZI°Code(W dMeftW Mmn$dW*V! 1 no Mrset address rowde lool after) torn Appraisal DWnd Accow l Number(N krmmyrt VoMe Hrom Maus,Undsl m-4 Identtha■llm humor VW• ■ ■ To preserve your right to present each reason rot your protest to the ARB according to law,be sure to select all boxes that apply. For example,it you select the first box vxJicating an rrc>rrecl apprauec7(market)valve for your property.you a e representing that ore value as Incorrect— usually that the value should be lowered. 11 you also want w prowsl Irsal your propvly is nor appraised at the same lovel ss a rrWe!mi%aR"sanr,le of companWlc Dfopertw_-appim latel,aoltsted for condition size,location and other factors,you must also select the box indicating Hie value is unequal oomparod with other properties.Your property may be appraised at its marftet value.but be unequally appra■sed. Failure to select the box trial corrasporxJs to earn reason for your prow--it may rfesult in your Inap-lity to protest ar.rssue Mar W"want to pursue, Incorrect appraeie i(market)value. rflg-u$e,dpetrrprlCd n.�niheJ sfxrr+l ttrf:ntsnl wns tztntrc! nvrJlMd 6r ctrncellrvl. Vnl,m Is unequal compared with olhur ptulm'11(m I Cnange in use of land appraraed as ag-use,oven pace or irmbeirlarte. �I Rcperty ehwld net be lazed err I InDon-ect appraised or market value of land wxler metros appraisal .*a rA rs■etp arw'1 far atpuse.openapacm ar olhur wecLW appraisal. Ci Property a not kxawd n this appraisal dslrid or otherwise shoub not be included cn the appraisal disktcfa record. Owner's name is Incorrect. C1 Faikae to send required notice. (Property comcripdon x nommct. Ekemptro)*,is amled rnormh%d fir cancalletl. QHI@P Rtrvide facts that may help resolve this protest, What do you think your praWty s value is?iOprrorrall 5_ t Ix rim•rr dof motion,vhh wt webute..tam ptroller.texas.gootaxes,property4ax 4t tu•nt Irut 44 Texas Comptroller of Public Accounts SECTION Innrcutu below how you mtolid to appear or patittapate in a prolr_rsl he-firing wttoduled tut tiro property that.s the s~of this protest.A property owner does not waive hso right to appear in person at a protest hearing by submitting an aftwit to the ARB or by electing to appear by telephone conlerenotr call. I intend to appear in the ARE;rreanng scheduled for my protest in the tollowtng manner(Greck only urte box): In person By telapho,n nonlrsnnce cal and will mahru nvclsl"within Y%O"w alli ArOwwrad In the AR@ beiprre thn hewng trgirn••Rrmr.w Inn AFM'x hnarrrq rxvr*dt rw:: to,co�nly-;pectic telephone oonlwenoe At procedures. Telerptwns rimer for the ARB to cornea you., (Onnw)Vaprlane MWUw VoM AnW Cadol Or^wnttan allidaw.94wrrend with RVtd•nrq and*Iivwc)d to Ihn ARB bebrs Ow haenrttl begin. "if you dexlet later to appear by tetenhone con(tranee cal.yor must pravld r written notice to the ARB or laa.^..10 days behre Ina nearing date.You are respurside Ia providniji access to ite call to any oersoWsl yuu wen to iwile,IL.partldpets rr,the tresrinq. SFC-nON II a protest goes to a hewing.the ARB autcrmabcally,sends each party a copy of the ARB's hearing procedures I Want the ARB to Sono me a wily or its hearng pr000dures. Yes No • cr:i nt* re Prnr Name of Parson Fling ROM sign hstrr 9igrtalwe ul Peraw Firny nrorest late i or mcoe Information,vwr out websitc comps ro0er.texas.gov)'taxes/property-tax Sri � 45 SUBSECTION 2. REAL PROPERTY APPRAISAL Part A. General Policies and Procedures 2.01 Introduction There are three basic approaches available to the appraiser for the valuation of real property. Ideally, all three approaches are used to establish a final estimate of market value. Quite often,though, one or more of the approaches will be inappropriate to the property being appraised. Therefore,it is essential that the appraiser have a thorough working knowledge of each approach, and when to make use of it. The Commercial,Land,and Residential Departments appraise many different types of property, so an appraiser's judgment is a very important factor in the mass appraisal process. Part B. Commercial Property 2.02 Introduction A. Definition of Appraisal Responsibility The Commercial Department of the Denton Central Appraisal District(DCAD)is responsible for developing fair and uniform market values for all multi-family, commercial, industrial properties,as well as commercially zoned land inside city limits and non-subdivided rural land outside city limits within district boundaries. B. Legal and Statutory Requirements The DCAD adheres to the policies and regulations of the Texas Property Tax Code(TPTC). The provisions of the TPTC and relevant legislative measures involving appraisal administration and procedures control the work of the appraisal district. The district is responsible for estimating the market value of each property, as of January 1, for ad valorem tax purposes. The district is required to periodically reappraise all real property at least once every three years. DCAD has adopted a reappraisal plan on an annual cycle. C.Administrative Requirements An appraisal management policy should reflect regulatory obligations,mandate due diligence, ensure conformance to professional standards,generate current and meaningful valuations, and establish criteria for a thorough review process. DCAD subscribes to the standards of the International Association of Assessing Officers (IAAO)regarding its appraisal practices and procedures. DCAD also subscribes to 46 the standards promulgated by the Appraisal Foundation known as the Uniform Standards of Professional Appraisal Practice(USPAP). A current copy of the USPAP manual is on file at DCAD. The Commercial Department submits an annual budget to the Deputy Chief Appraiser. The department is responsible for completing mass appraisal assignments in a timely manner, within the cost constraints of said budget. D. Appraisal Resources Personnel-The Commercial Department consists of an appraisal manager,two supervisors, four field appraisers, and two administrative support positions. The appraisal manager reports to the Deputy Chief Appraiser. Data-The data used by the Commercial Department includes verified sales of vacant land and improved properties and the pertinent data obtained from each(sales price levels, capitalization rates,income multipliers, etc.). Other data used by the department includes actual income and expense data(typically obtained through the hearings process), actual contract rental data, leasing information(commissions, tenant finish,length of terms, etc.), and actual occupancy rates. In addition to the actual data obtained from specific properties,market data publications are also reviewed to provide additional support for local and regional market trends, such as: • Institute of Real Estate Management(IREM)—Provides revenue and expense analysis for shopping centers, offices, conventional and federally assisted apartments. • Urban Land Institute (ULI)—Provides revenue and expense analysis for apartments and shopping centers. • Source Strategies Inc.—Provides revenue and occupancy analysis for hotels and motels. • Delta Associates—Provides revenue and occupancy analysis for industrial and offices. • NAI Global Market Report—Provides revenue and occupancy analysis for retail, industrial and offices. • PKF Hospitality Research—Provides revenue, expense, and profit analysis for hotels and motels. • COSTAR Group—Provides sales information as well as revenue and occupancy analysis for industrial,flex, retail, offices and apartments. • ALN Apartment Data—Provides revenue and occupancy analysis for apartments. • Integra Realty Resources—Provides capitalization rate analysis for retail, industrial, hotel/motel, offices and apartments. • Realty Rates, Inc. - Provides capitalization rate analysis for retail, industrial, offices and apartments. • Real Estate Research Corp. - Provides capitalization rate analysis for retail, industrial, hotel/motel, offices and apartments. • PriceWaterhouseCoopers— "Korpacz Real Estate Investor Survey"provides capitalization rate analysis for retail, industrial, hotel/motel, offices and apartments. Information Systems -The mainframe systems are augmented by the databases that reside as various applications on the DCAD Local Area Network(LAN). DCAD offers a variety of systems for providing property owners and public entities with information services. The Appraisal Support Department fields many of the public's questions or redirects them to the proper department. Computer terminal stations are 47 located in the customer service area for the public's use. Access to the district's appraisal data is also available through DCAD's website: www.dentoncad.com. 2.03 Valuation Approach A. Area Analysis Data on regional economic forces such as demographic patterns,regional location factors,employment and income patterns,general trends in real property prices and rents,interest rate trends, availability of vacant land,and construction trends and costs are collected from private vendors and public sources. Information is gleaned from real estate publications and sources such as the Multiple Listing Services, (Dallas and Denton Board of Realtors), "The Roddy Report," "The Dallas Business Journal,"Marshall & Swift,IAAO, CoStar Group and applicable sources found on the Internet. Monitoring these sources provide employees a current economic outlook on Denton County's real estate market. The Commercial Department uses the above-mentioned sources in its analysis of defined neighborhood and geographical areas. B.Neighborhood Anal The neighborhood is comprised of the land area and commercially classed properties located within the boundary of a taxing jurisdiction. The current commercial neighborhoods(market areas)are: CODE DESCRIPTION CO2 Cities of Carrollton and Dallas CO3 City of The Colony S05 Denton ISD and Argyle ISD S08 Lake Dallas ISD S09 Cities of Lewisville,Highland Village, and Flower Mound S 10 Little Elm ISD,Frisco ISD, Celina ISD, and Prosper ISD S 11 Northwest ISD, and Ponder ISD S14 Sanger ISD,Pilot Point ISD,Aubrey ISD, and Krum ISD These areas consist of a wide variety of property types including multi-family, commercial and industrial. Neighborhood analysis involves the examination of how physical,economic, governmental and social forces and other influences affect property values. The effects of these forces are also used to identify, classify, and organize comparable properties into smaller,manageable subsets of the universe of properties known as neighborhoods. 48 Neighborhoods are defined by each of the improved property use types(multi-family, office, flex, warehouse/industrial, general retail, shopping center, sports and entertainment,hospitality,health care, and specialty)based upon an analysis of similar economic or market forces. These include but are not limited to similarities of rental rates,class of construction, date of construction, overall market activity or other pertinent influences. Sales and income information are gathered on each neighborhood area and used to formulate overall appraised values for that neighborhood. The current commercial property use types are: CODE DESCRIPTION CODE DESCRIPTION Multi Family Shopping Center M17001 Apartments SC001 Community Center M17002 Apts.—Under 75 Units SCO05 Department Store M17005 Apts.—Dormitory SC010 Discount Store M17006 Apts.—Efficiencies SCO15 Lifestyle Center MF007 Apts.—Frat House SCO20 Neighborhood Center MFO10 Apts.—Senior SCO25 Outlet Center MFO15 Apts.—Subsidized SC030 Power Center MFO16 Apartments w/Retail SC035 Regional Mall MF020 Mobile Home Park SC040 Specialty/Entertainment MF025 Plex(2—7 units) SC045 Strip Center Office SC050 Super Regional Mall 017001 Condo SC055 Town Center OF002 Converted House Sports&Entertainment OF005 Corporate Campus SE001 Amusement Park OF010 Medical SE005 Baseball Field OF015 Multi-Tenant SE010 Bowling Alley OF020 Single Tenant SE015 Casino Flex SE020 Golf Course FL001 Flex Distribution SE025 Golf Driving Range FL005 Flex Manufacturing SE030 Health Club FL020 Flex Warehouse SE035 Horse Stables FL025 U.S.Post Office SE036 Indoor Sports Facility Warehouse/Industrial SE040 Movie Theater WH001 Airplane Hangar SE045 Race Track WH005 Auto Salvage Facility CODE DESCRIPTION CODE DESCRIPTION WHO10 Cement Plant SE050 Skating Rink WHO15 Distribution SE055 Swimming Pool WH020 Food Processing SE060 Theater/Concert Hall WH025 Industrial Manufacturing Hospitality WH030 Railway Yard HS001 Hotel-LS WH035 Refrigeration HS002 Hotel-Budget WH040 Self Storage HS005 Hotel Casino WH045 Service HS010 Motel WH050 Truck Terminal HS015 Motel—Suites WH055 Utility Sub Station HS020 Hotel Convention WH060 Warehouse HS025 Hotel Resort General Retail HS030 Hotel Casino RE001 Auto Dealership Health Care RE005 Auto Repair HC001 Assisted Living 49 RE006 Auto Oil&Lube Center HC005 Clinic RE010 Bank HCO10 Cont.Care Retirement Community RE015 Bar HC015 Hospital RE020 Car Wash HCO20 Independent Living RE025 Convenience Store HCO25 Rehabilitation Center RE030 Day Care Center HC030 Skilled Nursing Facility RE035 Drug Store HC035 Surgery Center-Outpatient RE040 Fast Food Specialty RE045 Funeral Home SP001 Cemetery/Mausoleum RE050 Garden Center SP005 Lodge/Meeting Hall RE055 General Freestanding SPO10 Marina RE060 Parking Garage SP015 Movie/Radio/TV Studio RE065 Parking Lot SP030 Private School RE070 Restaurant RE075 Service Station RE080 Storefront Retail/Office RE085 Storefront—Historic Downtown RE090 Supermarket RE095 Truck Stop RE100 Veterinarian/Kennel C. Highest and Best Use Analysis The highest and best use of property is the reasonable and probable use that supports the highest present value as of the date of the appraisal. The highest and best use must be physically possible,legal, financially feasible, and maximally productive. For improved properties,highest and best use is evaluated as improved and as if the site were still vacant. This assists in determining if the existing improvements have a transitional use,interim use,non-conforming use,multiple uses, speculative use, excess land, or a different optimum use if the site were vacant. Improved properties reflect a wide variety of highest and best uses that include,but are not limited to: office,retail,multi-family,warehouse, light industrial, special purpose, or interim uses. In many instances,the property's current use is the same as its highest and best use. This analysis insures that an accurate estimate of market value is derived. 2.04 Data Collection/Validation A. Data Collection Manuals Field data collection requires organization,planning, and supervision of the field staff. Data collection procedures have been established for land,residential, commercial,and personal property. The "Appraisal"(cost)manual and"Property Tax Appraisal and Data Collection"(procedure)manual is published and distributed to all appraisers involved in the appraisal and valuation of commercial properties. Field appraisers use these manuals during their initial training and as a guide in the field inspection of properties. Both manuals are reviewed and revised on an annual basis to meet the changing requirements of field data collection. 50 B. Sources of Data The district's property characteristic data was originally obtained from the ISD's,Denton County Tax Office as well as the surrounding cities. And where absent, collected through a massive field data collection effort coordinated by the district over a period of time. On an annual basis,building permits and blueprints (obtained from taxing jurisdictions)area principal source of data. New commercial starts,remodeling, additions and other permit-required improvements are also discovered through field inspection,which frequently results in the discovery of new construction not found through the permit process. Tax assessors, city and local newspapers, internet sources (such as CoStar,Axiometrics, and local websites), and the public often provide information to the district regarding new construction, market patterns, and other useful facts related to property valuation. Renditions (reports filed by the property owner)describe the property, list any improvements, identify its location, and sometimes provide an estimate of value.Aerial photographs are also sometimes used to find hard to locate improvements. C. Data Collection Procedures The appraisal support staff processes and enters building permit data into the PACS Appraisal System. When building blueprints are attached to the permit,the appraisal support staff enters the building dimensions and characteristic data into PACS. The field appraiser is responsible for the collection of information used in the appraisal of property. The physical characteristics of a property currently shown on the record will be provided to the appraiser at the time of inspection in the form of a PACS appraisal card. Care must be taken to ensure the accuracy of this information. Although DCAD will provide all available information regarding cost,market, and income,the appraiser must take every opportunity to discover this information while inspecting the property. Upon completion of the field inspection,the updated information on the appraisal cards is entered into PACS by the appraisal support staff. The appraisers are required to check the data entry on each property to ensure that the new information was entered correctly. The information collected by the appraiser and entered into the PACS appraisal system serves as the basis for the valuation of real property. In addition to field inspections, DCAD utilizes the Pictometry Sketch Verification program,which is a computer program that compares the PACS building sketch to the most recent aerial photograph of the building. Appraiser's field inspects any discrepancies and makes corrections as necessary. The DCAD boundaries are divided into geographic areas with each appraiser assigned an area for which they are responsible for data collection. The commercial department conducts periodic meetings where each appraiser gives a verbal report of their work progress. Additionally, each appraiser's work is reviewed by the appraisal supervisor before it is given to appraisal support for data entry. These procedures are an important tool in analyzing future departmental staffing needs,as well as showing each individual appraiser's progress and error rate. While production standards are established and upheld for the various field activities,quality of data is emphasized as the goal and responsibility of each appraiser. New appraisers are trained in the specifics of data collection set forth in the appraisal manual as procedures to follow. Experienced appraisers are routinely brought up to date on changes in procedures prior to major field projects such as new construction, sales validation or data review. The commercial department manager routinely reviews the work being performed by all the field appraisers. The 51 department manager is also charged with the responsibility of ensuring that appraisers follow listing procedures, identify training issues and provide uniform training throughout the appraisal staff. 2.05 Class System A class system for commercial properties has been developed to help ensure appraisal uniformity. The commercial class system currently consists of 106 classes. These classes are based on occupancy and are grouped together in clusters of like occupancy. Within each occupancy group, classes are based on levels of quality, such as excellent,good, average, and low cost. When classing a particular property,the appraiser will choose an occupancy for which the building was originally designed. If the current occupancy is different from that for which the building was originally designed,the appraiser must take care in measuring any functional obsolescence experienced by the structure. The different classes will reference the computer to cost tables developed from the Core Logic Valuation Service,which is an appraisal guide for developing replacement costs for a wide range of construction classes and types of occupancies. Core Logic Valuation Service software utilizes the comparative unit method to derive a cost per unit for the structure being appraised. Typical building specifications are developed for each occupancy group,which are used to determine the base cost of benchmark structures. Once the benchmark base costs are in place, construction costs for each occupancy class at various size increments are developed. Adjustments for variations from base cost specifications are also developed for each class. And finally, local modifiers are used to make the cost data applicable to Denton County. The DCAD also collects actual cost data from local developers and property owners. Whenever possible, actual costs are compared to Marshall Valuation Service costs. If there are inconsistencies between the two costs, adjustments will be made to the appropriate DCAD classes. Actual local costs are given more weight than Core Logic Valuation costs in these circumstances. If, in the appraiser's judgment,the cost tables do not fit the property being appraised,but that property does fit into a class,the appraiser should class the property by its occupancy. The computer system will allow the appraiser to override the tables and enter the cost value he deems correct. All commercial class costs are updated annually,based on data that is published closest to January 1. Classes cannot be established for every commercial property within Denton County. A small percentage of the properties will require special pricing by the appraiser. This can be accomplished either by use of the Core Logic Valuation Service or flat pricing. Each of these two methods requires that the appraiser utilize his or her best judgment on items that are too infrequent or unusual to fit efficiently into the present class system. A listing and description of all commercial classes is given in the cost approach section of this manual. 52 2.06 Valuation and Statistical Analysis (model calibration) A. Land Valuation The commercial department is responsible for appraising commercially zoned land inside city limits and non-subdivided rural land outside city limits within district boundaries. Land and improvements are valued separately so that the trends and factors affecting each can be studied. The first step in land valuation is market analysis,which consists of sales stratification,determination of units of comparison, and data analysis. Stratification is accomplished by grouping sales into homogeneous geographic areas (school district, city, etc.)where there are similar market influences,variations in zoning, and probable uses. These grouping criteria will ensure that land values will reflect market data for parcels with similar or competitive uses in the same area. Land is analyzed and valued according to common units of comparison. The units chosen conform to the basis upon which land is sold in the market. Commercially zoned land is valued by the square foot,while rural land is valued by the acre. Once the sales have been grouped into geographic areas,the appraiser then produces GIS maps showing the sale price, sale price per unit, sale date, and property ID number. The sold parcels as well as the commercial and rural parcels to be valued are color coded for easy identification. Once the sales have been plotted on a map,the appraiser can more easily determine patterns and trends in land values. The primary method of rural and commercial land valuation is the comparative unit method. The appraiser determines the average or typical per unit value for each stratum of land by carefully considering the available data on the sales maps and making an informed judgment. When there are insufficient sales within strata but sales prices per unit are similar between adjoining strata,the appraiser can combine strata in order to develop per unit values. Once comparative unit values have been determined for an area,those values must then be refined by applying site adjustments at the individual parcel level. Site characteristics often requiring adjustment include topography,traffic flow,limited access, flooding susceptibility, drainage, and irregular shape. Site adjustments are applied only to those parcels in the neighborhood or stratum that are affected. The adjustments are made as a percentage adjustment to the market value(ex: $50,000 x .85 =$42,500). The appraisers use their informed judgment to determine the adjustment percentage. When there are too few land sales to conduct the sales comparison approach,the appraiser should employ either the abstraction or allocation method. In the abstraction method, improvement values obtained from the cost model are subtracted from the sale price of the improved parcel to yield the land value estimate. The reliability of this method depends on the accuracy of the improvement values used in the analysis. The use of this method should be limited to parcels with relatively new buildings, so that the replacement cost and depreciation are more easily estimated. The allocation method is also known as the land ratio method. When there are insufficient vacant land sales in a given market area,the appraiser looks at comparable areas with sufficient land sales, determines the typical ratio of land value to total value, and then applies the ratio to parcels in the subject area. This method is particularly useful in older neighborhoods that are almost totally built out and therefore have very few,if any vacant land sales. 53 Appraisers are expected to review land values in their assigned areas on an annual basis in order to keep pace with market conditions. B. Cost Approach The cost approach to estimating value is the most widely applicable approach used for commercial properties because it can be applied to all improved properties. However,the appraiser must always be conscious of the difference between cost and value. Because of this difference,the appraiser must exercise judgment when measuring applicable depreciation. For the cost approach, a class system based on occupancy and quality has been programmed into the computer. The cost figures for each class were taken from the Core Logic Valuation manual,with modifications to reflect the Denton County market. A description of each class, and the quality levels in which that class can be found, is included at the end of this section. All DCAD commercial cost schedules are evaluated and updated on an annual basis by the department manager. The uniqueness of some properties will necessitate use of the unit-in-place or segregated cost method. The appraiser will manually make the calculations using the Core Logic Valuation Manual and enter the figures directly into the computer. If the appraiser can get actual costs on new construction,he can use those costs in the cost approach. Care must be taken to ensure that any costs provided represent actual total costs. Cost can be defined as the total expenditure necessary to construct an improvement and place it in the hands of the consumer. The appraiser may use actual new construction costs,as long as those figures represent actual total costs. In other words,the appraiser must make sure all indirect costs, as well as direct costs,are included. This will require a detailed breakdown of the submitted cost information. Summarized costs provided by tax consultants or taxpayers should be avoided unless substantial support for those figures can be provided. The costs included in the Core Logic Valuation Manual are the actual costs to the owner and include direct costs(materials, equipment rentals,utilities, labor, and supervision), as well as indirect costs (plans and plan check, site preparation,architectural and engineering fees,building permits,title and legal fees, and interest and fees on construction loans). Indirect costs also include the contractor's profit and overhead,which includes fire, liability and unemployment insurance, and workmen's compensation. When classing a building,the appraiser must first ascertain the quality of the building because the majority of DCAD classes are based on a single level of quality. The quality levels used in the DCAD class system are excellent, good,average, and low cost. Construction quality can be difficult to determine in buildings where the importance of appearance and amenities is equal to or greater than the importance of pure utility. It is usually true that a well-framed building is a well-finished building. And it is also true that if a builder cuts corners on framing,he will probably also cut corners on finish-out and mechanical equipment. If an appraiser is having difficulty in determining the quality level of a building,he should refer to the DCAD and/or Core Logic Valuation Manual for guidance. The final step in the cost approach is to establish the level of depreciation experienced by the improvement. Depreciation occurs in three forms: physical, functional, and economic. Physical deterioration is the loss in value due to the wear and tear of the property. The DCAD utilizes the Core Logic Valuation Service commercial depreciation tables to measure physical deterioration. These 54 tables are a modified version of the overall Age-Life method. Whereas the Age-Life method assumes that a building depreciates by a constant percentage over its economic life,the Core Logic Valuation tables recognize that a building is in the prime of life up until mid-life. This non-linear approach accounts for a slower depreciation rate in the early years as compared to the later years when diminishing serviceability and higher maintenance can accelerate depreciation. DCAD depreciation tables are divided into five year increments from twenty year life to seventy year life. The particular table that is used is determined by the type of construction and usage of the building. As part of the physical depreciation analysis,the appraiser should consider the"effective age"of the building. The effective age of a building is its actual age,less the age which has been taken off by structural face-lifting or reconstruction,removal of functional inadequacies,updating of equipment, etc. Functional obsolescence is the overall usefulness and desirability of a property. Functional obsolescence is the loss of value in a property improvement due to changes in style,taste,technology,needs, and demands. It exists where property suffers from poor or inappropriate architecture,poor floor plans,room sizes, etc. In these instances,buyers perceive a loss in utility,therefore,the price offered is lower due to reduced demand. Economic obsolescence(or external obsolescence)is the loss in value caused by outside forces such as in the highest and best use of a property due to market shifts or governmental actions,restrictions on income,zoning,neighborhood decline,etc. This can influence both land and improvements. Field inspection is required for the analysis and measurement of all forms of accrued depreciation. The appraiser should consider all conditions that diminish utility and estimate their combined effect on market value. Physical depreciation, functional and economic obsolescence,and effective age are also influenced by competition and market conditions. The appraiser,therefore, should also analyze the income and sales of comparable properties when deciding on a measurement of accrued depreciation. All forms of depreciation are expressed as a percent good. Once the estimated depreciated improvement value is determined, it is then added to the land value resulting in an estimated total property value. The cost approach is used as a comparison to the market schedules. V=LV+(RCN—D) (Value=Land Value+(Replacement Cost New—Depreciation) 55 COMMERCIAL IMPROVEMENT CLASS DESCRIPTIONS CLASS 120-140 Apartments(Low Rise)are multi-family residences from one to three stories. Costs include common areas such as hallways, laundry areas, etc. Each unit will have a kitchen and at least one bathroom. Generally,the units are intended for rental purposes,but may be sold individually as condominiums. Good quality apartments will have plaster,paneling, good detailing in molding and trim, and high cost floor finishes. The structures are commonly solid masonry(Class C)or wood frame(Class D) construction. CLASS 120—Low Cost CLASS 130—Average Quality CLASS 140—Good Quality CLASS 141 Apartments (High Rise)are multi-family residences with three or more stories of multiple dwelling units. The structures can be built of all construction classes. The structures include a lobby area,interior hall access to dwelling units and some type of stairway for fire exit. Costs include appliances, fireplaces, balconies, and elevators. This class has three quality levels of average, good,and best. CLASS 141 —Average, Good, or Best CLASS 142 Apartments &Retail(Mixed)are generally two to three story structures with retail use on the first level and one or more residential units on the upper levels. The structures are commonly solid masonry(Class C)or wood frame (Class D)construction. Costs include fireplaces,balconies,porches, appliances and elevators. This class has three quality levels of low,average, and good. CLASS 142—Low,Average, or Good 56 CLASS 150-170 Motels are multiple sleeping units from one to three stories,with or without individual kitchen facilities, and designed for transient occupancy. The structures are commonly solid masonry(Class C)or wood frame (Class D). Interiors are of plaster or drywall with wall coverings. Paneling and wallpaper are included in the better qualities in the common areas and sleeping rooms. Price large restaurants and lounges separately. If,however,the amount of office, lobby, coffee shop and meeting rooms is proportionate with the number of rooms and overall quality,then these features will be included in the cost. CLASS 150—Low Cost CLASS 160—Average Quality CLASS 170—Good Quality CLASS 180-190 Hotels are multiple sleeping units and lobby of three or more stories,without individual kitchen facilities. The costs include lounges,restaurants,ballrooms and meeting rooms commensurate with the number of rooms and overall quality of the hotel. Better quality hotels have a large amount of high-cost wall cover and floor finish in the open and public areas. CLASS 180—Low cost CLASS 190—Average Quality CLASS 191 —Good Quality CLASS 200-210 Department Stores are one or more stories,typically found in large cities and regional shopping centers, which handle multiple lines of merchandise, for which they are subdivided into departments. Costs include suitable office and employee areas,and restroom facilities. CLASS 200—Average Quality CLASS 210—Good Quality 57 CLASS 220-240 Retail Stores are one or two story buildings designed for retail sales and display, and usually have display and/or decorative fronts. Included in this occupancy are stores occupied by secondary department stores with limited merchandise lines, specialty shop and commercial buildings designed for general occupancy. CLASS 220—Low Cost CLASS 230—Average Quality CLASS 240—Good Quality CLASS 250-270 Supermarkets are large retail food stores,which handle limited lines of other merchandise. The cost includes built-in refrigerators, cold rooms, and ancillary cooling equipment,which are usually classed as real estate,but do not include display freezers and coolers or other equipment generally classed as personal property or trade fixtures. CLASS 250—Low Cost CLASS 260—Average Quality CLASS 270—Good Quality CLASS 280-300 Discount Stores are of warehouse construction with minimal interior partitioning. Low cost structures are unfinished shell types with minimum code throughout. Better qualities have partitioned offices and storage areas. NOTE: The highest quality discount stores should be classed as average quality department stores. CLASS 280—Cheap Cost CLASS 290—Low Cost CLASS 300—Average Quality 58 CLASS 310-332 Shopping Centers are multi-tenant buildings designed for retail sales. Shopping centers provide neighborhood and community services such as food,drugs,hardware, clothing and personal services needed for daily living. These structures may or may not have an anchor. CLASS 310—Low Cost CLASS 320—Average Quality CLASS 330—Good Quality CLASS 331 —Excellent Quality CLASS 332—Best Quality CLASS 340-360 Fast Food Restaurants have a limited dining area in relation to the preparation area. These structures range in size from 1,300 to 4,200 square feet, and the seating area is normally less than 45%of the total area. CLASS 340—Low Cost CLASS 350—Average Quality CLASS 360—Good Quality CLASS 370-390 Restaurants are designed for the preparation and sale of food and beverages. These buildings have a full service commercial kitchen and varied seating capacities. Average quality includes neighborhood restaurants or coffee shops or a lower priced franchise operation. Good quality includes the typical chain operation and neighborhood restaurants catering to regional trade. CLASS 370—Low Cost CLASS 380—Average Quality CLASS 390—Good Quality 59 CLASS 397-399 Day Care Centers CLASS 397—Low Cost CLASS 398—Average Quality CLASS 399—Good Quality CLASS 400-432 Office Buildings are designed for commercial occupancy and are normally subdivided as multi-tenant structures. If part of an office building has some other occupant, such as a bank or retail store on the first floor,that portion should be classed according to its occupancy. CLASS 400—Low Cost CLASS 410—Above Low Cost CLASS 420—Average Quality CLASS 430—Good Quality CLASS 431 —Very Good Quality CLASS 432—Excellent Quality CLASS 440-460 Banks are financial structures that include savings and loan and credit union occupancies where the design is of a bank type. Cost includes vaults, drive up windows,night depositories, and surveillance systems. Costs do not include banking equipment,vault doors, or safety deposit boxes. CLASS 440—Low Cost CLASS 450—Average Quality CLASS 460—Good Quality 60 CLASS 470-480 Nursing Homes (Convalescent Hospitals)are buildings of hospital type construction that give nursing care. They are designed for bed care and/or hotel and nursing care for ambulatory patients. They have treatment and therapy rooms, service and administration areas,nurses' stations and signaling systems commensurate with quality. These facilities do not have equipment for surgical care and treatment. CLASS 470—Low Cost CLASS 480—Average Quality CLASS 490-500 Hospitals are complete health care facilities that typically include a number of different health services within one building or groups of buildings. These buildings have a large number of partitions with additional electrical,mechanical, and plumbing needs for this occupancy group. Lower quality hospitals have a large ward area while higher quality hospitals have a large amount of private rooms. Costs include fixed equipment,but not equipment classified as personal property. CLASS 490—Low to Average Quality CLASS 500—Average to Good Quality CLASS 510-530 Clinic/Medical Office/Veterinary Clinic buildings are designed for medical or dental services with examination and outpatient treatment. The cost reflects the additional electrical,mechanical and plumbing required by this occupancy. These costs are also used for veterinary hospitals,which are buildings designed for the medical and surgical care and treatment of animals. CLASS 510—Low Cost CLASS 520—Average Quality CLASS 530—Good Quality 61 CLASS 540-560 Service Stations (old style)are designed for the sale of gas and service of automobiles. The cost includes office, service, storage, sales and restroom areas. The cost does not include equipment that is considered personal property. CLASS 540—Low Cost CLASS 550—Average Quality CLASS 560 Service Station Food Booth CLASS 560—Low,Average, and Good Quality CLASS 570-590 Automotive Centers are designed for both sales and service with display rooms, office, storage and repair commensurate with the quality. The better qualities are a combination retail store and garage. CLASS 570—Low Cost CLASS 580—Average Quality CLASS 590—Good Quality CLASS 595 Mini-Lube Garages are designed for quick maintenance lube and oil changes and may have drive-thru bays. The quality levels are low, average, and good. CLASS 600-611 Automotive Sales and Service buildings contain showroom, office, storage and repair space. The sales and office space are priced separately from the service area. CLASS 600&601—Low to Average Quality CLASS 610&611 —Average to Good Quality 62 CLASS 700-710 Shopping are regional shopping centers comprised of major department store anchors, center strip stores and enclosed mall concourses. CLASS 700—Average Quality CLASS 710—Good Quality CLASS 800-840 Industrial Buildings include those structures designed for manufacturing processes. They have the same structural shell as warehouses,but with better lighting,plumbing, and an enlarged office space. Each class differs only in structure and exterior features. Each class also has three quality levels of average, good,and excellent. CLASS 800—Class A (Fireproof Structural Steel Frame) CLASS 810—Class B (Reinforced Concrete Frame) CLASS 820—Class C (Masonry Bearing Walls, including Tilt-Up) CLASS 830—Class D or S (Wood or Steel Frame) CLASS 840—Class P (Wood"Pole"Frame) CLASS 900-920 Warehouses are structures designed for both storage and distribution, and include an amount of office space commensurate with the quality of the building(typically 3%to 12%). If,however,the office area is substantial in size or quality, it may be necessary to price the office area as office and the warehouse area as warehouse. Each class differs only in structure and exterior features. Each class also has three quality levels of average, good, and excellent. CLASS 900—Class A&B (Fireproof Structural Steel Frame and Reinforced Concrete Frame) CLASS 910—Class C (Masonry Bearing Walls, including Tilt-Up) CLASS 920—Class D or S (Wood or Steel Frame) 63 CLASS 930 Low Cost Storage Warehouses are structures with a light steel frame(Class D"pole"),no insulation,and typically no office space. The quality levels are low, average, good,and excellent. The low price is used only for warehouse space,while the other quality levels are used to price only office space. CLASS 940 Low Cost Storage Warehouses are structures with a light steel frame(Class D"pole"),insulation, and typically no office space. The quality levels are low, average, good,and excellent. The low price is used only for warehouse space,while the other quality levels are used to price only office space. CLASS 950-970 Mini-Warehouses are warehouses subdivided into cubicles of generally small size. They are primarily designed to be rented for non-commercial storage, and may include some office/living space. Each class differs only in structure and exterior features. CLASS 950—Class S or P (Metal Frame and Walls) CLASS 960—Class C&D (Wood or Steel Frame) CLASS 970—Class B &C (Masonry Bearing Walls,including Tilt-Up) CLASS 1000 & 1001 Self Service Car Wash. Class 1000 is a coin operated self-service care wash. Class 1001 is the equipment room. Equipment that is considered personal property is included in the building cost. The quality levels are low cost,average and good. Use low cost prices for metal wall construction, and average and good prices for masonry wall construction. CLASS 1002 Drive-Thru Car Wash. Equipment that is considered personal property is not included in the building cost. The quality levels are average and good. Use average price for masonry or steel construction, and good price for porcelainized steel construction. 64 CLASS 1003 Automatic Car Wash. Full service car wash buildings include finished office area, locker and restrooms and basic equipment room. Equipment that is considered personal property is not included in the building cost. The quality levels are average and good. Use average price for masonry or steel construction, and good price for porcelainized steel construction. CLASS 1010 Airplane hangar. Low cost hangar used only for airplane storage. There are minimal electrical and plumbing fixtures. CLASS 1020 T-Hangars are multiple hangars for small planes. Many include partitioned areas for individual planes. Interiors have concrete slab floors with very few extras. They have minimum electrical, occasionally plumbing, and commonly do not have heating or cooling. CLASS 1030 Airplane Hangar. Average quality hangar used for storage and repair maintenance of small aircraft. These hangars have some office area, storage area, and restroom and plumbing facilities for small crews of maintenance personnel. CLASS 1031 Airplane Hangar. Good quality hangar used for storage and repair maintenance of small aircraft. These hangars have some office area, storage area, and restroom and plumbing facilities for small crews of maintenance personnel. CLASS 1040-1060 Commercial Greenhouses are designed for the growth of plants. Each class differs in structure and exterior features. CLASS 1040—Steel Frame and Glass CLASS 1050—Steel or Wood Frame and Fiberglass CLASS 1060—Wood Frame and Poly-cover 65 CLASS 1070 Residential Greenhouse CLASS 1070—Wood or Aluminum Frame CLASS 1100-1110 Theaters are designed primarily for stage or screen presentations and include a stage commensurate with the type and quality of construction. Scenery,curtains, and seating are not included in the costs. CLASS 1100—Low Cost CLASS 1110—Average Quality CLASS 1200 Telephone Exchange Building. CLASS 1210 Communications Equipment Building. CLASS 1300-1320 Funeral Homes are buildings with facilities for the preparation of the dead for burial or cremation, for viewing of the body and for funerals. CLASS 1300—Low Cost CLASS 1310—Average Quality CLASS 1320—Good Quality 66 CLASS 1400-1420 Bowling Alley and Roller Skating Rink buildings generally include a snack bar,billiard and miscellaneous rooms with necessary plumbing and electrical connections. These buildings do not include any equipment or fixtures such as alleys,ball returns,hardwood floor(skating rink)kitchen and bar equipment or other trade fixtures that are considered personal property. CLASS 1400—Low Cost CLASS 1410—Average Quality CLASS 1420—Good Quality CLASS 1500- 1501 Parking Garages are structures with no exterior walls (or with partial walls)designed for above grade storage of automobiles. The quality levels are average and good. CLASS 1600- 1630 Barns CLASS 1600—Wood frame and dirt floor. CLASS 1610—Wood frame and concrete floor. CLASS 1620—Steel Frame and dirt floor. CLASS 1630—Steel Frame and concrete floor. CLASS 1640 Kiosks are small retail booths that range anywhere from 25 to 200 square feet. They have minimum electrical and plumbing fixtures. CLASS 1650—1670 Outbuilding/Storage CLASS 1650—Low Cost CLASS 1660—Average Quality CLASS 1670—Good Quality 67 CLASS 1680 Stables CLASS 1680—Average, Good,Best, and Excellent Quality CLASS 1690 Marina Boathouses and Slips are small to medium berths of light construction on lakefronts. Ramps, anchor piers, lockers, and floatation drums are included in the cost. Utilities are additives. Quality levels are low for open slips,and good for fully enclosed boathouses. CLASS 1700 Grain Elevators CLASS 1710 Water Tanks CLASS 1720 Pipe Rail Fence CLASS 1730 Pipe&Cable Fence CLASS 1740-1740B Tennis Courts. There are three pricing levels for tennis courts based on amenities. CLASS 1740— Includes fence and lighting CLASS 1740A—Includes fence CLASS 1740B—Court only 68 CLASS 1750 Residential Swimming Pool CLASS 1750—Basic,Average,Good,Excellent, Superior Quality CLASS 1760 Wood Deck CLASS 1770 Circular Training or Walking Arenas CLASS 1770—Low,Average, and Good Quality CLASS COM Commercial Swimming Pools are large recreational pools found in hotels, apartments, etc. Costs are for gunite pools and include chlorinators, filters,heaters,boards,ladders and coping. CLASS 1780 Condominiums are now classed as apartments. See classes 120-140. CLASS 1790-1810 Country Clubs are specialized clubhouses designed mainly for entertainment and have few, if any sleeping rooms. Generally,the better clubs will have a ballroom,bar,banquet and pro shop facilities,as well as locker and shower rooms. These classes are meant to price only the main clubhouse. Outbuildings,pools,tennis courts and golf holes are priced separately. CLASS 1790—Low Cost CLASS 1800—Average Quality CLASS 1810—Good Quality 69 CLASS 1900 Golf Course. Low cost, simply developed budget course on open, flat terrain, few bunkers, small tees and greens. CLASS 1910 Golf Course. Average quality, simply designed course on relatively flat terrain, natural rough, few bunkers, small built-up tees and greens, as well as some small trees. CLASS 1920 Golf Course. Good quality course, undulating terrain, bunkers at most greens, some large trees and driving range. CLASS 1930 Golf Course. Excellent quality, championship course on good undulating terrain, fairway and greens bunkered and contoured, large tees and greens, driving range, and name architect. CLASS 1940 Golf Course. Better championship-type course on good undulating terrain, fairway and greens bunkered and contoured, large tees and greens, large trees transplanted, driving range,may have name architect. CLASS 2000 Mobile Home Park Spaces are developed for permanent occupancy and are representative of low end parks. The spaces can accommodate homes up to 80 feet long and 28 feet wide. Each space will have utilities,but recreational facilities such as pool and clubhouse are rarely provided. CLASS 2010 Mobile Home Park Spaces are developed for permanent occupancy and are representative of average parks. The spaces can accommodate homes up to 80 feet long and 28 feet wide, and all utilities are available. This class of park usually has a clubhouse and pool, as well as good streets,patios,walks, and some landscaping. 70 CLASS 2100 Ornamental Entry Way CLASS 2100—Average, Good,Best Quality C. Income Approach The income approach to value is applied to those real properties which are typically viewed by market participants as"income producing,"and for which the income methodology is considered a leading value indicator. The DCAD computerized program utilizes the direct capitalization method. The first step in the income approach is to estimate the potential gross rent(PGR)for the property. Potential gross rent is the rent that would be collected if the property were fully occupied at market rent. PGR=UNIT RENT x#UNITS PGR can be derived from a variety of sources ranging from local market study publications,to actual rent data furnished by property owners. The computer program allows for three different methods of establishing PGR. Most commercial properties lease based on a lease rate per square foot, in which case the appraiser inputs the net or gross leasable area and the monthly or annual square foot lease rate. The computer then calculates the potential gross rent. For those properties that lease by the unit, such as apartments,the appraiser may input the number of units and the annual lease rate for one unit. The computer then calculates the PGR. The appraiser can also manually calculate the PGR by entering a dollar amount in the computer. A vacancy and collection loss allowance is the next item to consider in the income approach. Vacancy and collection loss is an allowance for reductions in potential income attributable to vacancies,tenant turnover, and nonpayment of rent. The allowance is estimated as a percentage of potential gross income, which varies depending on the type and characteristics of the physical property, and general and local economic conditions. V&C LOSS=PGR x%V&C LOSS The projected allowance is established based on local market study publications,and actual data collected from property owners. This allowance accounts for periodic fluctuations in occupancy,both above and below an estimated stabilized level. The appraiser enters a vacancy and collection loss percentage that is typical within the market for the property being appraised. Once the percentage is entered,the computer will calculate the dollar amount. The market derived stabilized allowance is then subtracted from the potential gross income. Miscellaneous property income(which is not subject to v/c loss) such as parking, vending machines, and laundry are then added to arrive at an effective gross income. EGI=(PGR—V&C LOSS)+MISC. INCOME Allowable expenses and expense ratio estimates are based on a study of the local market,with the assumption of prudent management. Categories of allowable operating expenses include insurance; administrative costs for the property such as legal, accounting, advertising, and management fees;repair 71 and maintenance such as extermination,janitor's salaries,trash collection,hardware, and supplies; utilities such as fuel,water, and electricity; and property taxes. Different expense ratios are developed for different types of commercial property based on use. For instance,retail properties are most frequently leased on a triple-net basis,whereby the tenant is responsible for his pro-rata share of taxes, insurance and common area maintenance. In comparison,multi-family properties may have the tenants paying utilities, while the owner pays the remainder of the expenses. As a result, expense ratios must be implemented based on the type of commercial property being appraised. Another form of allowable expenses are the replacement of short-lived items(such as roof or floor coverings, air conditioning or major mechanical equipment or appliances)requiring expenditures of large lump sums. When these capital expenditures are analyzed for consistency and adjusted,they may be applied on an annualized basis as stabilized expenses. When performed according to local market practices by commercial property type,these annualized expenses are known as replacement reserves. The appraiser must carefully analyze the owner's operating statement to make sure all the expenses are allowable and at market rates. Expenses are entered in the computer as a dollar amount. Subtracting the allowable expenses(inclusive of replacement reserves) from the effective gross income results in an estimate of net operating income (NOI). NOI=EGI—OPERATING EXPENSES Capitalization rates are used to convert net operating income into an estimate of market value. These rates vary between property types, as well as by location, quality, condition, design, age, and other factors. Overall capitalization rates (for the direct capitalization method) can be derived from the market. Sales of improved properties from which actual income and expense data are obtained provide a very good indication of what a specific market participant is requiring from an investment at a specific point in time. We also rely on Henry S. Miller,"Real Estate Investment Trends,"Real Estate Research Corp., Integra Realty Resources, and Korpacz Inc., for capitalization rate information for the different types of commercial properties. Additionally,we survey local fee appraisers regarding typical capitalization rates by property type. Rent loss concessions are sometimes made to specific properties with vacancy problems. A rent loss concession accounts for the impact of lost rental income as the building is moving toward stabilized occupancy. The rent loss is calculated by multiplying the rental rate by the percent difference of the property's stabilized occupancy and its actual occupancy. Build out allowances (for first generation space or renewal/second generation space)and leasing expenses are added to the rent loss estimate. The total adjusted loss from these real property operations is discounted using an acceptable risk rate. The discounted value(inclusive of rent loss due to extraordinary vacancy,build out allowances and leasing commissions)becomes the rent loss concession and is deducted from the value indication of the property at stabilized occupancy. D. Market Approach The market approach to value has a more limited application to commercial properties than to single family residences because they sell much less frequently and are generally unique unto themselves. For this reason,prior sales of unique commercial properties may be used as a yardstick for that specific property but should not be used as comparable for other properties. When commercial properties are very 72 similar and compete within the same market parameters,however,the market approach may well provide the most reliable indication of value. All commercially zoned and rural land valuation tables and unit prices are derived from comparable sales. Sales prices are expressed as price per unit, either by square foot or acre—depending on how the land is analyzed or sold in the market. Once sales have been gathered,the appraiser determines the average or typical per unit value for a particular stratum of land. The average value is found by calculating the median or mean sale price per unit. After establishing land unit values,the appraiser can determine individual parcel values by applying any necessary site adjustments. Site adjustments recognize the characteristics of individual parcels, such as size, shape,topography, and location(corner influence, limited access, etc.). When using the market approach,the appraiser should take care to assure that the sales price is the total consideration given for the property. This is a formidable task since commercial properties are normally traded in a market from which it is difficult for the appraiser to extract information. For example,many sales can include significant amounts of personal property. If these sales are used in ratio studies,the value of the personal property must be estimated and subtracted from the sale price in order to determine the purchase price for the real property alone. Personal property consists of inventories(raw materials, finished goods, supplies,etc.), fixed assets(machinery, equipment, furniture and fixtures, etc.),and intangibles(bonds,mortgages, insurance policies, cash, stocks, goodwill or business value, etc.). Appraisers should scrutinize each sale for items of personal property, estimate their market value, and deduct it from the total purchase price. Whenever data on personal property is unavailable,the appraiser should attempt to estimate a percentage of the sale that is attributable to personal property. This can be achieved by reviewing a sample of sales,by property type, and determining the percentage of the purchase price commonly attributable to personal property. If the personal property component of a sale cannot be estimated,the sale can be excluded from ratio studies. The appraiser should gather as many details as possible on any sales he may collect to allow that information to be used in the future as comparable sales. Pertinent data from actual sales of properties,both vacant and improved, is pursued throughout the year in order to obtain relevant information that can be used in all aspects of valuation. For example, sales of similarly improved properties can provide a basis for capitalization rates used in the income approach. Improved sales are also used in ratio studies,which afford the appraiser an excellent means of judging the present level and uniformity of appraised values. E. Sales Information All sales information collected is the responsibility of the Sales and Research Department. Commercial improved sales are collected from a variety of sources including,but not limited to,district questionnaires sent to buyer and seller, field discovery,protest hearings,Roddy Report, Costar Group,Loopnet,builders, real estate professionals, and fee appraisers. A system of type, source, and validity codes was established to define salient facts related to a property's purchase or transfer. Neighborhood and ISD sales reports are generated as a tool for the appraiser in the development of value estimates. Sales information is stored in the mainframe database and on excel spreadsheets. 73 F. Statistical Analysis The appraisers in the Commercial Department perform an annual statistical analysis to evaluate whether values are equitable and consistent with the market. Ratio studies are conducted on each neighborhood and ISD to judge the two primary aspects of mass appraisal accuracy: level, and uniformity of value. Appraisal statistics of central tendency and dispersion generated from sales ratios are available for each property type being studied. These summary statistics including,but not limited to,the median,the mean, the weighted mean, standard deviation,coefficient of dispersion(COD), and coefficient of variation (COV),provide the appraiser a tool by which to determine both the level and uniformity of appraised value of a particular property type. The level of appraised value can be determined by the weighted mean for individual properties within a within a specific type, and a comparison of weighted means can reflect the general level of appraised value. Review of the standard deviation,coefficient of dispersion and the coefficient of variation can discern appraisal uniformity within a specific property type. Every commercial property type is reviewed annually by the appraiser through the sales ratio analysis process. The first phase involves ratio studies that compare the recent sales prices of properties to the appraised values of the sold properties. This set of ratio studies affords the appraiser an excellent means of judging the present level of appraised value and uniformity of the appraised values. The appraiser, based on the sales ratio statistics and designated parameters for valuation update,makes a preliminary decision as to whether the value level of a particular property type needs to be updated in an upcoming reappraisal,or whether the level of market value is at an acceptable level. The commercial department creates income schedules for multi-family, office,retail, and industrial properties on an annual basis. Actual rent,occupancy and expense data is collected from property owners. We also collect actual data from published sources and local vendors when data from property owners is not forthcoming. The data is entered into Excel spreadsheets and grouped by property type, neighborhood(market)area, and quality(class). Averages and medians for income and expense variables are then calculated and entered into the computer system,which calculates the income schedule value for the property. During the annual reappraisal analysis,the appraiser will be able to choose between the income schedule value(based on prevailing market conditions),the income direct cap value(based on the actual subject property data), and the cost approach value. Before deciding on a final market value,the appraiser should check for any comparable sales in order to make an informed judgment. 2.07 Residential Vacant Lots A. Area Anal Data on regional economic forces such as demographic patterns,regional location factors,employment and income patterns, general trends in interest rates, availability of vacant land, and construction trends are collected from private vendors and public sources. Information is gleaned from real estate publications and sources such as the real estate professionals,Dallas Business Journal,IAAO,Texas A&M Real Estate Department, Realty Trac,National Association of Independent Fee Appraisers 74 (NAIFA), foreclosure listing and applicable sources found on the internet; such as realtor.com. Monitoring these sources help to give the appraisal staff a current economic outlook on Denton County's real estate market. The residential department monitors available lot inventory and new construction. All of this impacts the values of the available lots. All employees shall have the knowledge and expertise to do their job. Each employee will have a minimum educational standard required for their position. In addition, DCAD will supply the following: A. On the job training—each employee will receive training on procedures,policy,and equipment by their supervisor and other employees in similar positions. B. State required education and registration—all employees so required will achieve and maintain their own educational and registration requirements. C.Additional training and education—from time to time, additional training and education will be required to enhance job performance,knowledge and expertise. Employees will be expected to perform to a minimum standard. An appraisal management policy should reflect regulatory obligations,mandate due diligence, ensure conformance to professional standards,generate current and meaningful valuations, and establish criteria for a thorough review process. DCAD subscribes to the standards of the International Association of Assessing Officers (IAAO)regarding its appraisal practices and procedures. DCAD also subscribes to the standards promulgated by the Appraisal Foundation known as the Uniform Standards of Professional Appraisal Practice(USPAP). A current copy of the USPAP manual is on file at DCAD. The department is responsible for completing mass appraisal assignments in a timely manner. A. Definition of Appraisal Responsibility The Residential Department is responsible for estimating the market value for all residential vacant lots. B. Legal and Statutory Requirements The provisions of the Texas Property Tax Code (TPTC)and relevant legislative measures involving appraisal administration and procedures control the work of the appraisal district. The district is responsible for appraising property on the basis of its market value as of January 1 for ad valorem tax purposes for each taxing unit that imposes ad valorem taxes on property in the district. DCAD reappraises property on an annual basis. C.Administrative Requirements An appraisal management policy should reflect regulatory obligations,mandate due diligence, ensure conformance to professional standards,generate current and meaningful valuations, and establish criteria 75 for a thorough review process. DCAD subscribes to the standards of the International Association of Assessing Officers (IAAO)regarding its appraisal practices and procedures. DCAD also subscribes to the standards promulgated by the Appraisal Foundation known as the Uniform Standards of Professional Appraisal Practice(USPAP). A current copy of the USPAP manual is on file at DCAD. D. Appraisal Resources Data-A common set of data characteristics for each residential dwelling in Denton County is collected in the field and data entered to the DCAD mainframe computer. The property characteristic data drives the computer-assisted mass appraisal approach to valuation. A common set of data characteristics for each land account in DCAD is collected in the field and data is entered to the DCAD mainframe computer. Information on sold properties is reviewed using GIS and aerial photography. Sales are plotted on the map to review location, access, and topography of the sold land. The property characteristic data drives the computer-assisted mass appraisal approach to valuation. Information Systems—The mainframe systems are augmented by the databases that reside as various applications on the DCAD Local Area Network(LAN). DCAD offers a variety of systems for providing property owners and public entities with information services. B. Sales and Statistical Analysis A. Sales Information The Residential Department will process all sales information collected by the Sales Department. As much pertinent information as possible is gathered about the sale to help determine the quality and conditions of the sale; for example, does the sale appear to be an arm's length transaction or not. A system of type, source and validity codes has been established to help define these salient facts related to a property's purchase or transfer. Entity,neighborhood and subdivision sales reports are generated as an analysis tool for the appraisal analyst in the development of value estimates. Sales information is stored in the appraisal district CAMA Software. Refer to the software user's manual for software implementation. B. Statistical Analysis Appraisers in the appraisal departments perform statistical analysis annually to evaluate whether values are equitable and consistent with the market. Ratio studies are conducted on each property category, neighborhood and ISD to judge the two primary aspects of mass appraisal accuracy—level and uniformity of value. Appraisal statistics of central tendency and dispersion generated from sales ratios are available for each property category and/or neighborhood within an ISD and summarized. These summary statistics including,but not limited to,the median,the mean,the weighted mean, standard deviation, coefficient of dispersion(COD), and coefficient of variation(COV),provide the analysts an analytical tool by which to determine both the level and uniformity of appraised value of a property category and/or neighborhood 76 basis. Review of the standard deviation, coefficient of dispersion and the coefficient of variation can discern appraisal uniformity within and between categories and ISD's. Subdivisions and/or neighborhoods are reviewed annually by the appraiser through the sales ratio analysis process. The first phase involves subdivision/neighborhood ratio studies which compare the recent sales prices with the appraised values of those properties which have recently sold. This set of ratio studies affords the appraiser an excellent means of judging the present level of appraised value and uniformity of the sales. All valid sales that we are aware of are used unless the result is misrepresentative. C. Market Adjustment or Trending Factors Market adjustment factors are developed from appraisal statistics provided from ratio studies and are used to ensure that estimated values are consistent with the market. If the subdivision/neighborhood is to be updated,the appraiser uses a ratio study that compares recent sales prices of properties within a delineated subdivision/neighborhood with the properties' appraised value. The calculated ratio derived from the sum of the sold properties' appraised value divided by the sum of the sales prices indicates the subdivision/neighborhood level of value based on the unadjusted value for the sold properties. This comparison of appraised value-to-sale ratio determines the market adjustment factor for each subdivision/neighborhood. This market adjustment factor is needed to trend the values closer to the actual market evidenced by recent sales prices within a given subdivision/neighborhood. The market adjustment factor calculated for each updated subdivision/neighborhood is applied uniformly to all properties within a neighborhood and as needed in the subdivision. Once the market-trend factors are applied, a second set of ratio studies is generated that compares recent sale prices with the proposed appraised values for these sold properties.From this set of ratio studies,the appraiser judges the appraisal level and uniformity in both updated and non-updated subdivision/neighborhoods,and finally, for the school district as a whole. C. Performance Tests A. Sales Ratio Studies The primary analytical tool used by the appraiser to measure and improve performance is the ratio study. This helps to insure that the appraised values that it produces meet the standards of accuracy in several ways. Overall sales ratios are generated for each ISD to allow the appraiser to review general market trends and provide an indication of market appreciation or depreciation over a specified period of time. Sales ratio reports are run several times prior to the setting of preliminary values as well as after finalization of appraisal values in order to catch any inaccuracies,value anomalies, or outliers. An independent test of the appraisal performance of the district is conducted by the State of Texas Comptroller's Office through the annual property value study. The study determines the degree of uniformity and the median level of appraisals by the appraisal district within each major category of property. The comptroller publishes a report of the study,which includes in the report the median levels 77 of appraisal for each major category of property,the coefficient of dispersion around the median level of appraisal for each category of property, and any other standard statistical measures that the comptroller considers appropriate. EXAMPLE OF LOT VALUE CALCULATION: Most residential lots,both improved and vacant are calculated using the appraisal districts' "L"Method. Lot square foot times dollar per square foot times%adjustment for size D. Sales and Statistical Analysis A. Sales Information The Residential Department will process all sales information collected by the Sales Department. As much pertinent information as possible is gathered about the sale to help determine the quality and Example 1. 14,000 sq. ft. lot size $3.50 per sq. ft. 25%adjustment for lots over 14,000 sq. ft. Subject Lot Size 16,500 sq. ft. Pt 14,000 @$3.50=$49,000 2nd 2,500 @$3.50 @ 25%= $2,187 Total Lot Value $51,187 In this scenario the lots vary in size and the larger lots in the neighborhood would need to be adjusted otherwise the larger lots would be over-appraised conditions of the sale as set forth in IAAO Standard on Verification and Adjustment of Sales 4.4,4.6,4.7, EEthis . size er sq.ft. r lot size 50,000=$50,000 nario all of the lots would be very similar in size and the neighborhood very homogeneous. 4.8, 4.9,4.10, and 4.11. Examples include;Are the parties related?Does the sale appear to be an arm's 78 length transaction or not?Was there any personal property included? A system of type, source and validity codes has been established to help define these salient facts related to a property's purchase or transfer. Entity,neighborhood and subdivision sales reports are generated as an analysis tool for the appraisal analyst in the development of value estimates. Sales information is stored in the appraisal district CAMA Software. Refer to the software user's manual for software implementation. B. Sale Adjustments The market value of property is what it would sell for in cash terms or the equivalent. This means that any sale that has nonmarket financing must be adjusted to reflect what the prevailing market conditions would be without that special financing. Typical bank loans are at the market rates while owner financed sales can be skewed to correct for the different rates that the seller is offering(IAAO Standard on Verification and Adjustment of Sales 7.4). This also applies to personal property that has been included in a sale. Appraisers must determine the contributory value of personal property and adjust sale price to reflect only the real property included in a sale(IAAO Standard on Verification and Adjustment of Sales 7.5). Sales are also adjusted to reflect changes to the property between the sale date and appraisal date. An example would be a property is purchased on 4/1/16 and then the new owner adds a pool to the property. This will add value that is not included in the purchase price,but should be considered when using the sales information to arrive at values for 1/1/17. C. Statistical Analysis Appraisers in the appraisal departments perform statistical analysis annually to evaluate whether values are equitable and consistent with the market. Ratio studies are conducted on each property category, neighborhood and ISD to judge the two primary aspects of mass appraisal accuracy—level and uniformity of value. Appraisal statistics of central tendency and dispersion generated from sales ratios are available for each property category and/or neighborhood within an ISD and summarized. These summary statistics including,but not limited to,the median,the mean,the weighted mean, standard deviation, coefficient of dispersion(COD), and coefficient of variation(COV),provide the analysts an analytical tool by which to determine both the level and uniformity of appraised value of a property category and/or neighborhood basis. Review of the standard deviation, coefficient of dispersion and the coefficient of variation can discern appraisal uniformity within and between categories and ISD's. Subdivisions and/or neighborhoods are reviewed annually by the appraiser through the sales ratio analysis process. The first phase involves subdivision/neighborhood ratio studies which compare the recent sales prices with the appraised values of those properties which have recently sold. This set of ratio studies affords the appraiser an excellent means of judging the present level of appraised value and uniformity of the sales. All valid sales that we are aware of are used unless the result is misrepresentative. D. Market Adjustment or Trending Factors Market adjustment factors are developed from appraisal statistics provided from ratio studies and are used to ensure that estimated values are consistent with the market. 79 If the subdivision/neighborhood is to be updated,the appraiser uses a ratio study that compares recent sales prices of properties within a delineated subdivision/neighborhood with the properties' appraised value. The calculated ratio derived from the sum of the sold properties' appraised value divided by the sum of the sales prices indicates the subdivision/neighborhood level of value based on the unadjusted value for the sold properties. This comparison of appraised value-to-sale ratio determines the market adjustment factor for each subdivision/neighborhood. This market adjustment factor is needed to trend the values closer to the actual market evidenced by recent sales prices within a given subdivision/neighborhood. The market adjustment factor calculated for each updated subdivision/neighborhood is applied uniformly to all properties within a neighborhood and as needed in the subdivision. Once the market-trend factors are applied, a second set of ratio studies is generated that compares recent sale prices with the proposed appraised values for these sold properties.From this set of ratio studies,the appraiser judges the appraisal level and uniformity in both updated and non-updated subdivision/neighborhoods, and finally, for the school district as a whole. E. Performance Tests A. Sales Ratio Studies The primary analytical tool used by the appraiser to measure and improve performance is the ratio study. This helps to insure that the appraised values that it produces meet the standards of accuracy in several ways. Overall sales ratios are generated for each ISD to allow the appraiser to review general market trends and provide an indication of market appreciation or depreciation over a specified period of time. Sales ratio reports are run several times prior to the setting of preliminary values as well as after finalization of appraisal values in order to catch any inaccuracies,value anomalies, or outliers.An independent test of the appraisal performance of the district is conducted by the State of Texas Comptroller's Office through the annual property value study. The study determines the degree of uniformity and the median level of appraisals by the appraisal district within each major category of property. The comptroller publishes a report of the study,which includes in the report the median levels of appraisal for each major category of property,the coefficient of dispersion around the median level of appraisal for each category of property, and any other standard statistical measures that the comptroller considers appropriate. EXAMPLE OF LOT VALUE CALCULATION: Most residential lots,both improved and vacant are calculated using the appraisal districts' "L"Method. Lot square foot times dollar per square foot times%adjustment for size 80 LExample formula would be; 14,000 sq.ft. lot size $3.50 per sq.f.t 25% adj for lots over 14,000 sq.ft. Lot size is 16,500 Pt 14,000 @$3.50= $49,000 2nd 2,500 @$3.50 @ 25%_ $ 2,187 Total value of lot $51,187 In this scenario the lots vary in size and the larger lots in the neighborhood would need to be adjusted otherwise the larger lots would be over-appraised. 2. Example formula would be; 1 sq.ft lot size $50,000 per sq.ft. 0%adj for lot size lst 1 @$50,000= $50,000 In this scenario all of the lots would be very similar in size and the neighborhood very homogeneous. 2.08 Individual Value Review Procedures A. Field Review Property field inspections may be initiated for a variety of reasons. A property owner might dispute the district's appraisal attributes or data concerning his property. Typically, a new field check is then requested to verify this evidence for the current year's valuation or for the next year's valuation. Additionally, if a building permit is filed for a particular property indicating a change in characteristics,a field check is then scheduled for that property. Finally, even though every property cannot be inspected each year, each appraiser typically designates certain segments of their area of responsibility to conduct field checks. Commercial appraisers are somewhat limited in the time available to field review all commercial properties of a specific use type. Still, a major effort is made by appraisers to field review properties and economic areas experiencing large numbers of remodels,renovations or retrofits,changes in occupancy levels or rental rates,new leasing activity,new construction, or wide variations in sale prices. Additionally,the appraiser frequently field checks subjective data items such as building class, quality of construction, condition, and physical, functional and economic obsolescence factors contributing significantly to the market value of the property. Sometimes field reviews are warranted when sharp 81 changes in occupancy or rental rate levels occur between building classes or between economic areas. Appraisers also physically inspect sold and unsold properties for comparability and consistency of values. hi addition to conducting field reviews on a priority basis as discussed above,the commercial department physically reviews all properties every 6 years as outlined in the IAAO Standard on Mass Appraisal. Each appraiser identifies 1/6'of the properties within their area of responsibility and conducts field inspections at the same rate every year,until 100%of the properties have been inspected. Commercial data collectors should present themselves in a polite and businesslike manner and be prepared to deal with a variety of situations and personalities. Data collectors should always take the time to fully explain the reason for their visit, and are required to carry DCAD issued photo identification badges and business cards. B. Office Review Office reviews are completed on properties not subject to field inspections. Valuation reports comparing previous values against proposed and final values are generated for all commercial improved properties. Also,previous values resulting from a formal hearing protest, lawsuit, and others from informal hearings are individually reviewed to determine if the value remains appropriate for the current year. When reviewing these properties, each appraiser considers all currently available cost,market, and income data before deciding on the final appraised value. Once the appraiser is satisfied with the level and uniformity of value for each commercial property within their area of responsibility,the new values are entered into the district's mainframe computer. Because the value estimates are determined in a computerized mass appraisal environment,appraisers review value reports for anomalies before the final appraised value is released for noticing. 2.09 Performance Tests A. Sales Ratio Studies The primary tool used to measure mass appraisal performance is the ratio study. A ratio study compares appraised values to market values. In a ratio study,market values (value in exchange) are typically represented by sales prices(i.e. a sales ratio study). Independent,expert appraisals may also be used to represent market values in a ratio study(i.e. an appraisal ratio study). If there are not enough sales to provide necessary representation, independent appraisals can be used as indicators for market value. This can be particularly useful for commercial,warehouse or industrial real property for which sales are limited. In addition, appraisal ratio studies can be used for properties that are by statute not appraised at market value,but reflect the use-value requirement. An example of this are multi-family housing projects subject to subsidized rent provisions or other governmental guarantees as provided by legislative statutes (affordable housing)or agricultural lands to be appraised on the basis of productivity or use value. Sales ratio studies are an integral part of establishing equitable and accurate market value estimates, and ultimately assessments for taxing jurisdictions. The primary uses of sale ratio studies include the 82 determination of a need for general reappraisal;prioritizing selected groups of property types for reappraisal; identification of potential problems with appraisal procedures; and, assist in market analyses. Pursuant to Chapter 5, of the Texas Property Tax Code, and Section 403.302, of the Texas Government Code,the Comptroller's Property Tax Division(PTD)conducts an annual property value study(PVS) of each Texas school district and each appraisal district. As a part of this annual study,the code also requires the Comptroller to:use sales and generally accepted auditing and sampling techniques;test the validity of school district taxable values in each appraisal district and presume the appraisal roll values are correct when values are valid; and, determine the level and uniformity of property tax appraisal in each appraisal district. The methodology used in the property value study includes stratified samples to improve sample representation and techniques or procedures of measuring uniformity. This study utilizes statistical analysis of sold properties(sale ratio studies)and appraisals of unsold properties (appraisal ratio studies) as a basis for assessment ratio reporting. For appraisal districts,the reported measures include median level of appraisal,coefficient of dispersion(COD),the percentage of properties within 10%of the median,the percentage of properties within 25%of the median, and price-related differential(PRD)for properties overall and by state category. 2.10 Value Defense Procedures The appeals process begins with an informal meeting between the appraiser and the property owner to discuss any errors, discrepancies of market value and/or equity, and any claims of exemptions or special valuations(agricultural use,restricted use value, etc.). The informal review may be handled by mail, in person, or by telephone. The review allows for communication and mutual understanding,which will reduce the number of formal appeals. Informal reviews should incorporate the following basic steps: 1)Verify the parcel information; 2)Exchange information; 3)Record the nature of complaint;4)Use cost, sales, or income information to confirm property value; 5)If a value change is indicated,the appraiser will change the value and enter into a signed agreement with the property owner; 6)If a value change is not warranted,the appraiser should explain the appeal rights and procedures, in case the property owner wishes to make a formal appeal. Commercial field appraisers must get written approval from the Commercial Manager or Supervisors to settle any property with an appraised value of$50,000,000 or higher. Appraisal Review Board hearings(formal appeals) are the next step in the appeals process. Prior to the hearing,the property owner should be given a copy of the evidence the appraiser plans to use in evidence. The appraiser should be prepared to present factual information relating to the property, such as copies of tax maps,pictures of the property, improvement drawings, etc.,as well as valuation information, such as the cost,market, and income approaches to value. If there is an equity component to the appeal,the appraiser should be prepared to present a reasonable sample of equity comparables based on sales or income, as appropriate. 83 2.11 Education and Training All employees shall have the knowledge and expertise to do their job. Each employee will have a minimum educational standard required for their position. In addition,DCAD will supply the following: A. On the job training—each employee will receive training on procedures,policy, and equipment by their supervisor and other employees in similar positions. B. State required education and registration—all employees so required will achieve and maintain their own educational and registration requirements. C.Additional training and education—from time to time, additional training and education will be required to enhance job performance,knowledge and expertise. Employees will be expected to perform to a minimum standard. 2.12 Data Entry Procedure All appraisal changes and updates are written on appraisal cards and given to the commercial appraisal support specialist. The appraisal support specialist organizes incoming and outgoing appraisal cards by appraiser, date, and legal description at the data entry station. The information is entered by way of a"dump terminal"and keyboard at the data entry station. The commercial appraisal support specialist is responsible for entering abstract, industrial, commercial and residential land,commercial and rural improvements, agricultural valuations, and sales information. Incomplete and erroneous information on appraisal cards is returned to the appraiser for correction. Once appraisal changes have been made,updated appraisal cards are printed,processed, and delivered to the appraisers. After checking the updated cards for accuracy,they are returned to the appraisal support specialist for filing. 2.13 Commercial Department Reappraisal Plan Overview This plan outlines the implementation and completion of all required tasks and reappraisal that is mandated by the State Property Tax Code. The commercial department reappraises all properties every two years,which works out to approximately 50%of properties reappraised in any given year(including 50%of vacant or improved land accounts). The reappraisal consists of a property inspection(office and/or field), as well as income, sales,and equity analysis, as warranted. Rapidly changing market areas will be reappraised on an annual basis as time permits. Building permits are collected from each city on a monthly basis. The permits are processed and attached to the applicable account, after which the appraiser conducts a physical inspection and office review for the current appraisal year. All value related building permits issued from December 1,2017 through 84 November 30,2018 will be inspected and reappraised for the 2019 appraisal year. All value related building permits issued from December 1,2018 through November 30,2019 will be inspected and reappraised for the 2020 appraisal year. Additionally, all buildings that were partially complete as of January 1 will be coded for reappraisal the following year. Property characteristic data, entered by appraisal support personnel, is verified and corrected by appraisers based on field inspections or office review utilizing aerial photography. The following data characteristics are added to each property account as applicable: Land Value, SPTD Code,Building Class,Gross Building Area,Net Leasable area,Actual Year Built, Effective Age,Number of Stories, Construction Quality/Condition Codes,Number of Buildings, Foundation Type,Percent Finish Out, Exterior Wall Type,Interior Finish Type,Heating/Cooling,Plumbing,Roof Covering, Story Height, Docks, Sprinkler System,Elevators. In addition to the physical characteristics, data is collected on an annual basis for income producing properties—including:Net Leasable Area,Rent Adjustments and CAM Charges,Vacancy percentage, Secondary Income, Expense Recoveries,Expense Information,and Cap Rates. Income producing property categories such as multi-family,retail, office, and industrial are coded with an economic area code,which groups properties located within the same competing market area. The economic area boundaries follow school district or city limit lines. Income models (based on the collected data)are then developed for each comparability code(A,B, C)for the respective property types. Income model data entered into the PACS appraisal system thereby produces an"income schedule" value,which should reflect the market influences that affect the market values within each economic area. The income schedule value can be used to check for equality and uniformity by property type within an economic area, or to create an income value for those properties not previously valued by the income approach. Commercial sales ratio studies are conducted annually by economic area and property type. The ratio studies compare the recent sales prices of properties to the appraised values of the sold properties. If there are sufficient sales of a specific property type,the market approach can be employed to determine market values and uniformity of appraised values. Part C. Agriculture Use The Texas Constitution permits special agricultural appraisal only if the land meets specific requirements defined as agricultural use. Section 23.51 of the Property Tax Code sets the standards for determining whether land qualifies. 2.21 Application The property owner must apply for the agricultural use appraisal. The property tax code provides applications for 1-d (Agricultural Appraisal), 1-d-1 (Open Space Agricultural Appraisal), 1-d-1 (Open Space Land, Timber Land) and 1-d-1 (Open Space Agricultural Valuation Wildlife Management). The 85 applications are received in January through the end of April(April 30-is the deadline to file). Applications can be filed after the deadline up until the time the appraisal roll is approved by the Appraisal Review Board (ARB) and if approved is assessed a 10% late filing penalty for that year only. Currently DCAD does not have any applications filed under 1-d or 1-d-1 Timber Land. The property owner is required to notify the Appraisal District if there is a change of use or if there is any change in the application requiring updating. Applications are requested to be updated on a 5 year basis once the property is approved to keep files current. 2.22 Qualification To qualify the property for the agricultural appraisal the following must be met: I. The land must be currently devoted principally to agricultural use. 1. Agricultural use includes production of crops, livestock,poultry, fish,or cover crops. It also can include leaving the land idle for a government program or for normal crop or livestock rotation. Land used for raising certain exotic animals to produce human food or other items of commercial value, and cutting wood for use in fences or structures on adjacent agricultural land also qualifies. 2. Timberland must be used with the intent to produce income and be devoted principally to the production of timber. 3. Both agricultural land and timberland must be devoted to production at a level of intensity that is common in the local area. 4. The land must have been devoted to agricultural and/or timber production for at least five of the past seven years. 5. Repealed by legislature 6. Using land for wildlife management is an agricultural use. Wildlife management means actively using land that at the time the wildlife management use began was appraised as qualified open-space land. The land must be used in at least three of seven ways to propagate a sustaining breeding,migrating,or wintering population of indigenous wild animals for human use,including food,medicine,or recreation. Bee Keeping Guidelines Beekeeping is a qualifying agricultural use if used for the pollination or for the production of human food or other tangible products having a commercial value. (Sec.23.51(2)Tax Code) Acreage requirements are set by Texas Property Tax Code to be a minimum of 5 acres and a maximum of 20 acres to qualify for beekeeping as an agricultural use. Typically the number of hives per acre is as follows: 86 First 5 acres ....................5—6 hives Additional 10 acres ...........4 additional hives Remaining 5 acres ............12 hives maximum The property will need to have a history of agricultural use or the owner will have to establish the 5 year history with the bee operation to qualify. II. The qualifications under section 1-d are the same,with the following exceptions: 1. The land has been devoted exclusively to or developed continuously for agriculture for the three years proceeding the current year. 2. The owner is using and intends to use the land for agriculture as an occupation or a business venture for profit during the current year. 3. The land must be owned by an individual. Land does not qualify under 1-d if it is owned by a corporation,partnership,trust or other association. 4. Agriculture is the owner's primary occupation and primary source of income. Visual inspections are done on all properties where an application has been filed. The appraiser views the property, makes notes based on the inspection and takes a photograph of both the qualifying property and the properties determined to be denied. The applications, appraiser's field notes and photographs are scanned to the account. Those properties that are approved receive a letter stating the approval. Properties that have been denied receive a letter denying the application,the reason for the denial, and an explanation on how to protest the denial. The property owner is required to notify the Appraisal District if there is a change of use or if there is any change in the application requiring updating. Applications are requested to be updated on a 5 year basis once the property is approved to keep files current. 2.23 Appraisal of Agricultural Land Each year the Chief Appraiser or his or her designee shall prepare an agricultural value schedule using the guidelines as set out in the"Manual for the Appraisal of Agricultural Land,"published by the Comptroller of Public Accounts,Property Tax Division. A copy of the value schedule may be obtained by the taxpayer upon request. Introduction The importance of data collection in the appraisal of agricultural land is crucial to accurate productivity values and to assess property as the law intended. The data collected in this appraisal process is as important as data used in the market value calculation. Purpose and Use This outline is used to layout the procedures and steps to go through in the collection of agricultural data in the process of setting the"Agricultural Appraisal Values". This process is undertaken by the department manager or supervisor staff of the department responsible for the agricultural appraisal. 87 Procedures Denton Central Appraisal District sends out reappraisals on an annual basis,therefore the agricultural appraisal value is reviewed annually. The"net to land"calculations, categories, and sub categories are changed with new agricultural information obtained by the district. (A)Our primary and best source of information comes from the Agricultural Advisory Board. Denton CAD Agricultural Advisory Board members are a hands on source of information that the district can ask questions that it needs answered. The board members are a good representation of the different types of agriculture we have in this county. One member is a cattle rancher and crop producer. Another member is a crop producer, sod farmer, improved grass hay and leases land. The other member is mainly involved in the cattle industry. These activities cover most of the typical agricultural activities for this county. The district has records of the Agricultural Advisory Boards meetings back to 1990 and feels this is a very important part of our valuation process. (B) The Denton County AgriLife Extension Service office is the next source of information the district uses on a regular basis. Denton Appraisal District has had a good standing relationship with the Denton County AgriLife Extension office;both organizations assist the other. DCAD has performed many presentations for the DCAE and their participants, and DCAE has done the same for DCAD staff. The annual data collected by the extension office is very valuable and informative in our yearly analysis. (C) Denton CAD sends out with application requests an"optional"survey on agricultural use.A survey is also requested on any beekeeping application. The surveys that are returned with the applications provide us with information about the activities these producers are involved in and industry norms. These surveys are reviewed with each application process,but can also be pulled together for cumulative field information. (D)The district has members of the agricultural advisory board,county extension agent, and agricultural appraisal staff fill out the Comptroller's"Texas Farm and Ranch Survey"on an annual basis. (E) The Denton area FSA and USDA office has also been a good partner in obtaining land information needed by the district. These offices are located in close proximity to the DCAD office. These organizations use our maps in the determinations of property size and location for their participants and DCAD uses their land soil maps for land categories. It is also helpful to have a person from that organization that can explain their data if need be. (F) Denton County is a rapidly growing urban area and agricultural land is being consumed by urban sprawl. DCAD utilizes information from the surrounding districts to help establish typical or normal agricultural activities. A lot of the information that this district receives from leases is skewed by the desire for the investors of the land to save taxes on the property for a short period of time. This has been the cause of what we call 88 negative leases,where the property owner is paying a farmer to work the land to get the tax savings. (G)Other sources of information include publications,manuals,and websites. Some of those websites include;USDA.gov, agecoext.tamu.edu/budgets/,window.state.tx.us, and tpwd.state.tx.us. All information gathered from these sources is kept in an agricultural appraisal file and a digital copy is stored in our database under F: resident, AGRICULTURE. This share file allows all employees involved in the appraisal of agricultural land access to review the information as needed. Files pertaining to specific accounts are scanned and kept with the account. Conclusion The procedures and sets the appraisal district takes in the agricultural appraisal process are defined in depth in the Manual for the Appraisal of Agricultural Land under section 3 "Agricultural Appraisal Process". 2.24 Rollback Procedure 1. The law imposes a rollback tax on 1-d-1 land when it is taken out of agricultural use. The rollback tax equals the difference between the taxes the owner paid in the five years preceding the change in use and the taxes the owner would have paid on his property's market value. 2. The property owner can trigger the rollback by ending agricultural operation or diverting the property to non-agricultural use. Selling the property does not trigger the 1-d-1 rollback. If the property owner diverts only part of a property to a non-agricultural use,the rollback tax only applies to the changed portion. 3. The Chief Appraiser determines if and when the change of use occurs and must send the owner written notice of the determination. Field appraisers are expected to periodically inspect agricultural use properties throughout the year to determine if a change of use has occurred. If the owner does not protest the determination or the Appraisal Review Board decides the use has changed,the tax assessor will calculate the amount of additional tax due, add the appropriate amount of interest, and send a rollback tax bill. The rollback procedures under section 1-d are the same,with the following exceptions: 1. Section 1-d requires a rollback tax when the property is taken out of agricultural use or when it is sold. 2. The rollback recaptures taxes for the three preceding years. 89 NOTE: The agricultural appraisal procedures and requirements discussed in this section are general in nature. For specific legal requirements,the appraiser should refer to the Property Tax Code and the"Manual for the Appraisal of Agricultural Land." AGRICULTURAL USE AND ROLLBACKS Who is exempt from paying rollback taxes? 1) Federal government 2) State government 3) Local government a. City b. School c. County d. Special districts Chapter 23.55 subsection 09 (f)The sanctions provided by Subsection(a)of this section do not apply if the change of use occurs as a result of: 1) a sale for right-of-way; 2) a condemnation; 3) a transfer of the property to the state or a political subdivision of the state to be used for a public purpose; or 4) a transfer of the property from the state, a political subdivision of the state, or a nonprofit corporation created by a municipality with a population of more than one million under the Development Corporation Act(Subtitle Cl,Title 12,Local Government Code)to an individual or a business entity for purposes of economic development if the comptroller determines that the economic development is likely to generate for deposit in the general revenue fund during the next two fiscal biennium an amount of taxes and other revenues that equals or exceeds 20 times the amount of additional taxes and interest that would have been imposed under Subsection(a)had the sanctions provided by that subsection applied to the transfer. 90 What about religious organizations? Chapter 11.20 subsection (6) (6)the land that the religious organization owns for the purpose of expansion of the religious organization's place of regular religious worship or construction of a new place of regular religious worship if: 1) the religious organization qualifies other property, including a portion of the same tract or parcel of land, owned by the organization for an exemption under Subdivision(1)or(5); and 2) the land produces no revenue for the religious organization; Chapter 23.55 1) (l)The sanctions provided by Subsection(a)of this section do not apply to land owned by an organization that qualifies as a religious organization under Section 11.20(c)of this code if the organization converts the land to a use for which the land is eligible for an exemption under Section 11.20 of this code within five years. 2) (i) The use of land does not change for purposes of Subsection(a)of this section solely because the owner of the land claims it as part of his residence homestead for purposes of Section 11.13 of this code. What about a cemetery? 0)The sanctions provided by Subsection(a)do not apply to a change in the use of land if. 1) the land is located in an unincorporated area of a county with a population of less than 100,000; 2) the land does not exceed five acres; 3) the land is owned by a not-for-profit cemetery organization; 4) the cemetery organization dedicates the land for a cemetery purpose; 5) the cemetery organization has not dedicated more than five acres of land in the county for a cemetery purpose in the five years preceding the date the cemetery organization dedicates the land for a cemetery purpose; and 6) the land is adjacent to a cemetery that has been in existence for more than 100 years. 91 What is not exempt from a rollback? 1. Any property owner who is not a governmental entity, a religious organization, cemetery. How does this apply to new subdivision? All of the land in the development is subject to a rollback except land dedicated to public street, dedicated or deeded to a governmental entity. Open space lots,common areas, streets in a gated community,HOA lots are ALL subject to rollback. 2.25Wildlife Management In 2001 the 77t1i Legislature enacted House Bill 3123 for the purpose of Wildlife Management(Tax Code 23.51(1)and(7). The intent of the bill was to; Encourage the preservation of open space for wildlife management and conservation of the state's natural heritage in all areas of the state 1. To create definitive standards for tax appraisers to follow in determining the qualification of the property for appraisal on the basis of wildlife management use. (Comptroller's Rule 9.4003 in acted in 2003,repealed 12-2008,new Comptroller Rule 9.2001 replaces rule 9.4003.) 2. To create a mechanism in addition to traditional agricultural use to allow ranchers, farmers, and land managers to conserve open space. 3. To affirm local control of property taxation. 4. To preserve revenue neutrality for all concerned parties and 5. To allow each property currently qualified in wildlife management use to continue appraised as open space land. Qualifications (7)The definition of"wildlife management"per the Texas Property Tax Code Section 23.51 (7) and(8) is as follows: (A)Actively using land that at the time the wildlife-management use began was appraised as qualified open-space land under this subchapter or as qualified timber land under Subchapter E in at least three of the following ways to propagate a sustaining breeding,migrating, or 92 wintering population of indigenous wild animals for human use,including food,medicine, or recreation: (i) Habitat control; (ii) Erosion control; (iii) Predator control; (iv) Providing supplemental supplies of water; (v) Providing supplemental supplies of food; (vi) Providing shelters; and (vii) Making of census counts to determine population; (B) Actively using land to protect federally listed endangered species under a federal permit if the land is: (i) Included in a habitat preserve and is subject to a conservation easement created under Chapter 183,Natural Resources Code; or (ii) Part of a conservation development under federally approved habitat conservation plan that restricts the use of the land to protect federally listed endangered species; or (C) Actively using land for a conservation or restoration project to provide compensation for natural resource damages pursuant to the comprehensive Environmental Response, Compensation,and Liability Act of 1980,the Oil Pollution Act of 1990,the Federal Water Pollution Control Act,or Chapter 40,Natural Resources Code. (8) "Endangered species,""federal permit," and"habitat preserve"have the meanings assigned by Section 83.011,Parks and Wildlife Code. A. Texas parks and wildlife region description In order to implement Comptroller's Rule 9.2001 the appraisal district refers to the Texas Parks and Wildlife Department(www.tpwd.state.tx.us)to determine the Eco region that the appraisal district (county) is located. Denton County is located in Region 6; Cross Timbers and Prairies. Per the Texas Parks and Wildlife this region is: A transitional area for many plants and animals. Average annual rainfall averages 28-40 inches per year... Upland soils are light colored, acidic sandy loam or sands. Bottomland soils may be light brown to dark gray and acidic with textures ranging from sandy loams to clays. The landscape of the region is gently rolling to hilly. (TPWD Website) 93 A map of this region is available on the Texas Parks and Wildlife website. Wildlife management practices are described in Guidelines for Qualification of Agricultural Land in Wildlife Management Use (Texas Comptroller, July 2002) and the Comprehensive Wildlife Management Planning Guidelines(TPWD,July 2007)for the Eco region in which the property is located. The chief appraiser,with the advice and consent of the Appraisal District Board of Directors, designated the percentage devoted to wildlife management based on the percentage developed for each Eco region. The percentages for Region 6; Cross Timbers and Prairies as determined by the Texas Parks and Wildlife Department are: at least 93%but not more than 95%. Denton Central Appraisal District's percentage is 93%. The following formula is used to determine the number of acres that are required for approval of the wildlife management: (x-1)/x=wildlife use requirement. Where "x"represents the number of acres in the application. Example would be (20 acres—1)/20 acres= 95%. In this example the acreage would qualify. Another example would be (13 acres—1)/13= 92.8%. In this example the acreage would not qualify. Using 93%as the minimum and the formula prescribed,the minimum number of acres that would qualify for wildlife management for Denton CAD would be slightly less than 14.50 acres. Existing properties in wildlife management are grandfathered and not affected by the adoption of the new Comptroller's Rule 9.2001. Properties receiving wildlife management under the old Comptroller's Rule will not be affected unless the property owner sells part of the land and the remaining acres do not meet the requirements of the new Rule 9.2001. B. Qualification for agricultural appraisal wildlife mana emmeent DCAD requires that a wildlife management form be filed along with a 50-129 for the conversion of the land into wildlife management. All applications and annual reports are date stamped as soon as the district receives them. The information is first scanned into the system by a data clerk, and then filed by school district in a filing cabinet for appraiser review. Then the agricultural appraiser, supervisor, or the appraiser that works that school district can pull the forms for that area and go work them. During field inspection we look to see if the activities on the property matches what was described on the management plan. 1. A wildlife management plan should be completed on the form(WMP)prescribed by Texas Parks and Wildlife Department for each tract of land for which qualification for agricultural appraisal under wildlife management is requested. The chief appraiser may not require that the property owner use the WMP form but all required information must be provided. (A copy of the wildlife management and wildlife management annual report form can be found at Denton Central Appraisal District(DCAD) or DCAD's website; www.dentoncad.com, or the Texas Parks and Wildlife website; www.tpwd.state.tx.us/landwater/land/private/agricultural land/.) 94 2. The property must have been receiving 1-d-1 Open Space for agricultural use under section 23.51 (1). 3. The property must be used in 3 out of the 7 listed wildlife management practices. Property must be actively managed to sustain a breeding,migrating, or wintering population of indigenous wildlife. a. Habitat control; b. Erosion control; c. Predator control; d. Providing supplemental supplies of water; e. Providing supplemental supplies of food; f. Providing shelters; and g. Making of census counts to determine population; 4. The number of acres in the application must meet the required amount based on the calculation using the formula prescribed. C. Inspections of wildlife management applications and annual reports The chief appraiser may request an annual report be filed on any properties approved under wildlife management. A copy of the form can be located on our website at(www.dentoncad.com)and links to the other related agencies are also available there as well. The procedures for inspecting an application for wildlife management or an annual report are the same as the application for 1-D-1 agricultural appraisal. Visual inspections are done on all properties when an application has been filed. The appraiser views the property,makes notes based on the inspection and takes a photograph of both the qualifying property and the properties determined to be denied. The applications,appraiser's field notes and photographs are scanned to the account. Those properties that are approved receive a letter stating the approval. Properties that have been denied receive a letter denying the application,the reason for the denial, and an explanation on how to protest the denial. Part D. Residential Properties (Improved Properties and Vacant Residential Lots) 2.31 Introduction A. Definition of Appraisal Responsibility The Residential Department of the Denton Central Appraisal District(DCAD)is responsible for developing fair and uniform market values for residentially-classed improved properties and for vacant residential lots. There are approximately 210,000 improved residential properties in Denton County. 95 Required education,under section 5.04 of the Texas Property Tax Code,is achieved by attending courses developed through the Texas Comptroller's Property Tax Division and licensing through the Texas Department of Licensing and Regulation(TDLR). Continuing education is achieved by attending in- house training, classes held by TAAO, TAAD,Dallas Central Appraisal District, Tarrant Appraisal District, and any other sources available for the district to use. B. Legal and Statutory Requirements The provisions of the Texas Property Tax Code (TPTC)and relevant legislative measures involving appraisal administration and procedures control the work of the appraisal district. The district is responsible for estimating the market value of each property, as of January 1, for ad valorem tax purposes. The district is required to periodically reappraise all real property at least once every three years. DCAD reappraises real property each year. IAAO Standards on Mass Appraisal 3.3.4 C.Administrative Requirements An appraisal management policy should reflect regulatory obligations, mandate due diligence, ensure conformance to professional standards, generate current and meaningful valuations, and establish criteria for a thorough review process. DCAD subscribes to the standards of the International Association of Assessing Officers (IAAO) and to the standards promulgated by the Appraisal Foundation known as the Uniform Standards of Professional Appraisal Practice(USPAP) regarding its appraisal practices and procedures. (Refer to copy of USPAP manual on file at the Denton Central Appraisal District.) Residential Department submits an annual budget to the Deputy Chief Appraiser. The department is responsible for completing mass appraisal assignments in a timely manner, within the cost constraints of said budget. D. Appraisal Resources Personnel - The Residential Department staff consists of a manager,two supervisors,three senior appraisers,thirteen field appraisers each assigned to geographic areas. One senior administrative support position and six support clerks. The manager reports to the Deputy Chief Appraiser. Data - A common set of data characteristics for each residential dwelling in Denton County is collected in the field and data entered to the DCAD mainframe computer. The property characteristic data drives the computer-assisted mass appraisal approach to valuation. A common set of data characteristics for each land account in DCAD is collected and data is entered to the DCAD mainframe computer. Information on sold properties is reviewed by calling to the purchaser or seller,visual inspection,using GIS and aerial photography. Sales are plotted on the map to review location, access, and topography of the sold land. The property characteristic data drives the computer- assisted mass appraisal approach to valuation. Data-The data used by the Residential Department includes verified sales of improved properties and vacant lots and the pertinent data obtained from each(sales price levels, income multipliers, land to 96 building ratios, etc.). Another example of data used by the department would be rental information. This information will be used to determine a gross rent multiplier. In addition to the actual data obtained from specific properties,market data publications are also reviewed to provide additional support for local and regional market trends, such as: • Tierra Grande(Journal of the Real Estate Center at Texas A&M University)—Provides information on land around the state. • Texas Farm&Ranch(Catalogue of Fine Rural Real Estate)—Provides information on high dollar farm and ranch property. • Fair&Equitable IAAO).—Provides information on appraisal and assessment offices throughout the U.S. and Canada. • DuPont Registry—Provides information on high end homes throughout U.S. • Marshall& Swift Exceptional Homes— • Marshall& Swift Home Repair and Remodel— • N.A.D.A—Provides • Realty Trac— • Marshall& Swift Residential Valuation— • Marshall& Swift Commercial Valuation- • National Association of Independent Fee Appraisers(NAIFA) Information Systems - The mainframe systems are augmented by the databases that reside as various applications on the DCAD Local Area Network(LAN). DCAD offers a variety of systems for providing property owners and public entities with information services. Appraisal Support fields many of the public's questions or redirects them to the proper department. PC stations are located in the customer service area for the public's use. Access to the district's appraisal data is also available through the appraisal district's website,www.dentoncad.com. 2.32 Valuation Approach (model specification) Improved Residential Properties A. Area Anal Data on regional economic forces such as demographic patterns,regional location factors,employment and income patterns,general trends in real property prices and rents,interest rates trends,availability of vacant land,and construction trends and costs are collected from private vendors and public sources. Information is gleaned from real estate publications and sources such as real estate professionals,Dallas Business Journal,Marshall& Swift, IAAO, Texas A&M Real Estate Department,Realty Trac,National Association of Independent Fee Appraisers (NAIFA), foreclosure listing and applicable sources found on the Internet such as;realtor.com. Monitoring this helps to give the appraisal staff a current economic outlook on Denton County's real estate market. The residential department analyzes collected information described above in its analysis of defined subdivision/neighborhoods and geographical areas. The district routinely inventories properties in the appraisal district either through on-site inspections,the use of 97 district aerials,and in limited cases the use of recent photographs of the property. (Aerials are provided from COG and from Pictometry, each flown every other year.) B.Neighborhood Analysis Market areas are defined by Neighborhoods (the Residential Neighborhood list is available upon request at Denton CAD). Neighborhoods are defined as groups of properties that exhibit similar characteristics such as size, age, construction quality,market area,value range, and other characteristics that affect value.Neighborhood groupings are designed to allow properties that are similar to be analyzed together. Physical and legal boundaries may be starting points for delineating neighborhoods,however;ultimately the appraiser should use good judgment in determining if the properties in that neighborhood grouping are of a similar nature. Neighborhood codes and classifications will utilize a coding system to identify the primary entity it resides in. For example: a neighborhood code of DC05001 would indicate that the property is located within Denton County("D"),within a city limit("C"), City of Denton("05"), and then the numerical code for that neighborhood("001"). The numerical code for the neighborhood code is simply an identifier,there is no attribute associated with the code. Neighborhood analysis involves the examination of how physical,economic, governmental and social forces and other influences affect property values. The effects of these forces are also used to identify, classify, and organize comparable properties into smaller,manageable subsets of the universe of properties known as neighborhoods. Neighborhoods are defined by grouping properties based on having similar market preferences and influences. Generally speaking,many neighborhoods will have physical boundaries that define their perimeter such as major roads, as well as land features such as creeks, greenbelts,golf courses,etc. some neighborhoods will be delineated based upon other factors such as construction quality, age, and other structure related factors. Sales and income information are gathered on each neighborhood area and used to formulate overall appraised values for that neighborhood C. Highest and Best Use Anal For the vast majority of residential properties,the current use will be the properties highest and best use (HBU). Unique properties located in areas of transition will need additional research and analysis to determine HBU and valuation methods that are in compliance the Texas Property Tax Code.Appraisers need to be aware of HBU limitations regarding Homestead Properties. 98 2.33 Data Collection/Validation A. Data Collection Manuals Field data collection requires organization,planning, and supervision of the field staff. Data collection procedures have been established for land,residential, commercial,and personal property. An appraisal manual and a residential procedure manual for the district is published and distributed to all appraisers involved in the appraisal and valuation of residential properties. Both manuals are reviewed and revised to meet the changing requirements of field data collection. Field appraisers use these manuals during their initial training and as a guide in the field inspection of properties. The residential appraisal manual is updated annually and procedure manual as needed. B. Sources of Data The district's property characteristic data was originally received from the ISD's,Denton County Tax Office as well as the surrounding cities. And where absent, collected through a massive field data collection effort coordinated by the district over a period of time. The appraisal support position within the residential department collects new and miscellaneous construction permit data through onsite visits to each city permit office. Information on new home starts in the rural areas is gathered from the Denton County Health Department, septic permit and through the use of mechanics liens. New home starts, remodeling, living additions and other permit-required improvements are also discovered through field inspection. Still the main focus is on field inspection and visual review. Tax assessors, city and local newspapers, and the public often provide the district information regarding new construction,market patterns, and other useful facts related to property valuation. Aerial photographs are also sometimes used to find hard to locate improvements. C. Data Collection Procedures Field data collection requires organization,planning, and supervision of the field staff. Data collection procedures have been established for residential, commercial,and personal property. Appraisers conduct field inspections and record information on an appraisal card or on their IPad. It is this information collected by the appraiser that is entered into the district's computer system and serves as the basis for the valuation of real property. In addition to field inspections, DCAD utilizes the YOTTA Sketch Verification program,which compares the PACS building sketch to the most recent aerial photograph of the building. Appraisers' field inspection finds discrepancies and makes corrections as necessary. The DCAD boundaries are divided into geographic areas with each appraiser assigned an-area for which they are responsible for data collection. The residential department conducts periodic meetings where each appraiser gives a verbal report of their work progress. Additionally, each appraiser's work is reviewed by the appraisal supervisor before it is given to appraisal support for data entry. These procedures are an important tool in analyzing future departmental staffing needs,as well as showing each individual appraiser's progress and error rate. While production standards are established and upheld for 99 the various field activities,quality of data is emphasized as the goal and responsibility of each appraiser. New appraisers are trained in the specifics of data collection set forth in the appraisal manual as procedures to follow. Experienced appraisers are routinely brought up to date on changes in procedures prior to major field projects such as new construction, sales validation or data review. The Residential department manager routinely reviews the work being performed by all the field appraisers. The department manager is also charged with the responsibility of ensuring that appraisers follow listing procedures, identify training issues and provide uniform training throughout the appraisal staff. 2.34 Class System A class system for residential properties has been developed to help ensure appraisal uniformity. The residential class system currently consists of classes 1 through 5C for frame homes and 6 through I IC for brick, stucco, etc. Some classes have a corresponding"E"class. The exceptions for"E"are additional refinements in material and workmanship. Classes are based on types of construction and finish out. When classing a particular property,the appraiser will choose a class which best meets the defined descriptions of quality, and workmanship. The different classes will reference the computer to cost tables developed from the Marshall Valuation Service,which is an appraisal guide for developing replacement costs for a wide range of construction quality levels. Marshall Valuation Service software utilizes the comparative unit method to derive a cost per unit for the structure being appraised. Typical building specifications are developed for each quality level,which are used to determine the base cost of benchmark structures. Once the benchmark base costs are in place, construction costs for each class at various size increments are developed. Adjustments for variations from base cost specifications are also developed for each class. And finally, local modifiers are used to make the cost data applicable to Denton County,these local modifiers are referred to as "Neighborhood Factors". The DCAD also collects actual cost data from local developers and property owners. Whenever possible, actual costs are compared to Marshall Valuation Service costs. If there are inconsistencies between the two costs,adjustments will be made to the appropriate DCAD classes. Actual local costs are given more weight than Marshall Valuation costs in these circumstances. If, in the appraiser's judgment,the cost tables do not fit the property being appraised,but that property does fit into a class,the appraiser should class the property by the class that most resembles that property. The computer system will allow the appraiser to override the tables and enter the cost value he deems correct. All residential class costs are updated annually,based on data that is published closest to January 1. Classes cannot be established for every residential property within Denton County. A small percentage of the properties will require special pricing by the appraiser. This can be accomplished either by use of the Marshall Valuation Service or flat pricing. Each of these two methods requires that the appraiser utilize his or her best judgment on items that are too infrequent or unusual to fit efficiently into the present class system. The appraiser should consult with either their supervisor or department manager if uncertain about cost methods for unique properties. 100 Sales ratio reports and Marshall and Swift cost manuals are used to review cost manuals each year. Class 8 homes are considered the benchmark class then the class 9's. Ratio reports are ran on both classes to determine whether changes need to occur in the pricing. All other classes are reviewed in the same manner however; class 8's and 9's general indicate the general direction of the changes. The lower class frames, classes 1,2, and 3 are reviewed using Marshall and Swift since sales of these properties limited. 2.35 Valuation and Statistical Analysis (model calibration) The Residential Department is responsible for estimating the market value for all residential improved and vacant lots. Provisions of the Texas Property Tax Code(TPTC)and relevant legislative measures involving appraisal administration and procedures control the work of the appraisal district. The district is responsible for appraising property on the basis of its market value as of January 1 for ad valorem tax purposes for each taxing unit that imposes ad valorem taxes on property in the district. DCAD reappraises property on an annual basis. A. Cost Approach The cost approach to estimating value is the most common approach used for mass appraisal of residential properties because it can be applied to all improved properties. The cost method combined with the market approach will provide the most broad based valuation tool possible for a wide range of applications. However,the appraiser must always be conscious of the difference between cost and value. Because of this difference,the appraiser must exercise judgment when measuring applicable depreciation. For the cost approach, a class system based on construction quality has been programmed into the computer. The cost figures for each class were taken from the Marshall Valuation manual,with modifications to reflect the Denton County market. A description of each class, and the quality levels in which that class can be found, is included at the end of this section. All DCAD residential cost schedules are evaluated and updated on an annual basis by the department manager. The uniqueness of some properties will necessitate use of the unit-in-place or segregated cost method. The appraiser will manually make the calculations using the Marshall Valuation Manual and enter the figures directly into the computer. If the appraiser can get actual costs on new construction,he can use those costs in the cost approach. Care must be taken to ensure that any costs provided represent actual total costs. Cost can be defined as the total expenditure necessary to construct an improvement and place it in the hands of the consumer. The appraiser may use actual new construction costs,as long as those figures represent actual total costs. In other words,the appraiser must make sure all indirect costs, as well as direct costs,are included. This will require a detailed breakdown of the submitted cost information. Summarized costs provided by tax consultants or taxpayers should be avoided unless substantial support for those figures can be provided. 101 The costs included in the Marshall Valuation Manual are the actual costs to the owner and include direct costs (materials, equipment rentals,utilities,labor, and supervision), as well as indirect costs (plans and plan check, site preparation, architectural and engineering fees,building permits,title and legal fees, and interest and fees on construction loans). Indirect costs also include the contractor's profit and overhead, which includes fire, liability and unemployment insurance, and workmen's compensation. When classing a structure,the appraiser must first ascertain the quality of the structure because the majority of DCAD classes are based on construction quality levels and amenities. The quality levels used in the DCAD residential class system can be grouped into three distinct levels: tract, custom, and luxury grade construction. Construction quality can be difficult to determine in buildings where the importance of appearance and amenities is equal to or greater than the importance of pure utility. It is usually true that a well-framed building is a well-finished structure. And it is also true that if a builder cuts corners on framing,he will probably also cut corners on finish-out and mechanical equipment. If an appraiser is having difficulty in determining the quality level of a building,he should refer to the DCAD and/or Marshall Valuation Manual for guidance. The final step in the cost approach is to establish the level of depreciation experienced by the improvement. Depreciation occurs in three forms:physical, functional, and economic. Physical deterioration is the loss in value due to the wear and tear of the property. The DCAD utilizes the Marshall Valuation Service residential depreciation tables to measure physical deterioration. These tables are a modified version of the overall Age-Life method. Whereas the Age-Life method assumes that a building depreciates by a constant percentage over its economic life,the Marshall Valuation tables recognize that a building is in the prime of life up until mid-life. This non-linear approach accounts for a slower depreciation rate in the early years as compared to the later years when diminishing serviceability and higher maintenance can accelerate depreciation. As part of the physical depreciation analysis,the appraiser should consider the"effective age"of the building. The effective age of a building is its actual age,less the age which has been taken off by structural face-lifting or reconstruction,removal of functional inadequacies,updating of equipment, etc. Functional obsolescence is the overall usefulness and desirability of a property. Functional obsolescence is the loss of value in a property improvement due to changes in style,taste,technology,needs, and demands. It exists where property suffers from poor or inappropriate architecture,poor floor plans,room sizes, etc. In these instances,buyers perceive a loss in utility;therefore,the price offered is lower due to reduced demand. Economic obsolescence(or external obsolescence)is the loss in value caused by outside forces such as in the highest and best use of a property due to market shifts or governmental actions,restrictions on income,zoning,neighborhood decline,etc. This can influence both land and improvements. Field inspection is required for the analysis and measurement of all forms of accrued depreciation. The appraiser should consider all conditions that diminish utility and estimate their combined effect on market value. Physical depreciation, functional and economic obsolescence,and effective age are also influenced by competition and market conditions. The appraiser,therefore, should also analyze the income and sales 102 of comparable properties when deciding on a measurement of accrued depreciation. All forms of depreciation are expressed as a percent good. Once the estimated depreciated improvement value is determined,it is then added to the land value resulting in an estimated total property value. The cost approach is used as a comparison to the market schedules. The cost schedule,based on construction of similar improvements, is developed from information gathered from reliable sources such as Marshall& Swift, a national publication of building cost; and local builders, local suppliers and any other sources considered reliable. The cost approach consists of calculating the replacement cost new for each improvement and then deducting for normal depreciation. The causes of accrued depreciation fall into three general categories: physical deterioration,functional obsolescence,and external(economic) obsolescence. Physical deterioration and functional obsolescence are inherent in the property itself,whereas external(economic) obsolescence is the result of outside forces. Physical deterioration is the loss in value due to the wear and tear of the property. There are curable and incurable forms of physical depreciation. It depends on whether the value added by curing them exceeds the cost to cure (it is not economically prudent to cure the condition). Effective age is the number of years of age of the improvement as indicated by its condition. If the improvement has been well maintained, its effective age may be less than the actual age; if there has been poor maintenance, it may be greater. The appraiser based on inspections determines this. Functional obsolescence is the overall usefulness and desirability of a property. Functional obsolescence is the loss of value in a property improvement due to changes in style,taste,technology,needs, and demands. It exists where property suffers from poor or inappropriate architecture,poor floor plans,room sizes, etc. Physical depreciation tables are taken from Marshall& Swift. Each of the different classes of homes are tied to different depreciation tables. The CAMA software applies the amount of depreciation based on either the actual age of the property or the effective age. The effective age of the structure is determined by the appraiser based on onsite inspects of the property. External obsolescence is the loss in value caused by outside forces such as in the highest and best use of a property due to market shifts or governmental actions,restrictions on income,zoning,neighborhood decline, etc. This can influence both land and improvement. Once the estimated depreciated improvement value is determined it is then added to the land value giving an estimated total property value. The cost approach is used as a comparison to the market schedules. V=LV+(RCN—D) (Value=Land Value+(Replacement Cost New—Depreciation) $142,084= $22,297+($140,150—23%) 103 B. Market Approach The market approach to value is the preferred method for residential properties because they sell frequently and have a high degree of similarity within neighborhoods and market areas. The market approach provides the most accurate representation of value in an active real estate market. If and when a market becomes stagnant,or there are too few sales to create a comparable sales model, it may be necessary to utilize one of the other methods, including the cost approach. When using the market approach,the appraiser should take care to assure that the sales price is the total consideration given for the property. This is important because residential properties can include special financing arrangements, closing costs,points, etc. For example,many sales can include significant closing costs. It is important to determine what is "typical"for the neighborhood or market. If these sales are used in ratio studies,the value of the special financing,points, closing costs,personal property, etc. must be estimated and subtracted from the sale price in order to determine the purchase price for the real property alone if the inclusion of those items is considered non-typical for the market. Personal property consists of furniture, fixtures,machinery, equipment, etc. Appraisers should scrutinize each sale for these items, estimate their market value, and deduct it from the total purchase price. If the financing or personal property component of a sale cannot be estimated,the sale can be excluded from ratio studies. The appraiser should gather as many details as possible on any sales he may collect to allow that information to be used in the future as comparable sales. Pertinent data from actual sales of properties,both vacant and improved, is pursued throughout the year in order to obtain relevant information that can be used in all aspects of valuation. For example, sales of similarly improved properties can provide a basis for setting benchmarks for the market area. Improved sales are also used in ratio studies,which afford the appraiser an excellent means of judging the present level and uniformity of appraised values. C. Sales Information All sales information collected is the responsibility of the Sales and Research Department. Residential improved and vacant land sales are collected from a variety of sources including,but not limited to, district questionnaires sent to buyer and seller,field discovery,protest hearings,Roddy Report,builders, real estate professionals, and fee appraisers. A system of type, source, and validity codes was established to define salient facts related to a property's purchase or transfer. Neighborhood and ISD sales reports are generated as a tool for the appraiser in the development of value estimates. Sales information is stored in the mainframe database. A system of type, source, and validity codes are established to define salient facts related to a property's purchase or transfer(see type codes and validity codes below). ISD,neighborhood, and subdivision sales reports are generated as an analysis tool for the analyst in the development of value estimates. Sales information is entered into the sold account to generate a sales ratio. (DCAD estimate of market value divided by purchase price equals ratio.) 104 TYPE CODES VALIDITY CODES o A Appraisal I Invalid o C Confidential Sale V Valid o Cl Confidential Imp Sale o CISRT Confidential Imp Short Sale o CL Confidential Land Sale o F Foreclosure o FCI Confidential Foreclosure Imp Sale o FCL Confidential Foreclosure Land o FI Foreclosure with Imp o FL Foreclosure Land o I Improvement Sale o IPC Partial Complete Imp o ISRT Imp Short Sale o L Land sale o M Miscellaneous Addition o P Pooladded o Q Questionable The first phase involves subdivision/neighborhood ratio studies which compare the recent sales prices the appraised values of those properties that have recently sold. This set of ratio studies affords the appraiser an excellent means of judging the present level of appraised value and uniformity of the sales. In reviewing the sold properties the appraiser makes a determination as to the validity of the information. Foreclosed properties are used in our analysis,but if the neighborhood has more arms' length sales than foreclosures the appraiser may determine that one foreclosure does not carry much weight. If the analysis determines that foreclosures are the norm in the neighborhood the appraiser needs to research the sale and determine the conditions of the foreclosure. Some foreclosed properties have been found to have the interiors striped of fixtures and appliances. Any sales that have been determined to be outside of a normal transaction or trend are recoded as"I"invalid. D. Income Approach The income approach to value is applied to those real properties which are typically viewed by market participants as"income producing,"and for which the income methodology is considered a leading value indicator. Because single family residences are typically owner occupied,the income method is generally the least used method of the three approaches. DCAD obtains rental rates for housing to develop Gross rent Multiplier(GRM)rates for areas that have rental properties. GRM rates will vary widely, and will require a substantial amount of information about the subject and comparable to be considered accurate. Because the DCAD computerized program utilizes the direct capitalization method,the GRM will be performed manually by the appraiser as needed.A discussion of the income approach is provided for properties where the income method is applicable. 105 E. Statistical Analysis The appraisers in the Residential Department perform statistical analysis annually to evaluate whether values are equitable and consistent with the market. Ratio studies are conducted on each subdivision, neighborhood and ISD to judge the two primary aspects of mass appraisal accuracy--level and uniformity of value. Appraisal statistics of central tendency and dispersion generated from sales ratios are available for each subdivision and/or neighborhood within an ISD and summarized. These summary statistics include,but not limited to,the median,the mean,the weighted mean, standard deviation,coefficient of dispersion(COD), and coefficient of variation(COV),provide the analysts an analytical tool by which to determine both the level and uniformity of appraised value of a subdivision and/or neighborhood basis. The level of appraised values can be determined by the weighted mean for individual properties within a subdivision/neighborhood,and a comparison of subdivision/neighborhood weighted means can reflect the general level of appraised value between comparable subdivision/neighborhoods. Review of the standard deviation, coefficient of dispersion and the coefficient of variation can discern appraisal uniformity within and between subdivision/neighborhoods. Pac software allows the appraiser to pull in information about all of the properties within a neighborhood includes but is not limited to; class, depreciation,year built,land size,and land value can be looked at for equity. The appraiser is able to sort the information in many different ways to look for problems,trends, equity, and anything else that shows itself. The profiling feature gives the appraiser quick information on the neighborhood based on the sold properties. See example below: Neighborhood Profile:(DC05264 General I Run Detail I Class Breakdown I Improved Vacard iSales Ratio Chart inked Profiles Anah�sis Profile Run 6856 Profile Detail 259340 Appraisal Year 2018 Current Updated Adjustments Neighborhood THE Mean Ratio 98.20:t 1D0.13' Mean 1.26 PRESERVE AT Weighed Mean 98.03:: 99.96%: Median 1.25 Median Ratio 98.074 100.025. NBHD Code DC05264 Calculated 1.25 Avg SalelAppr 5310,154 5310,039 Sample Size 1 A,vg SaleiAppr PSF 5109.53 $108.91 Target Ratio 1100,00 Sample Percent 16.30%� Related Dill 1.D0 1.00 Population 687 New Adj C of D 0.0535 0.0535 Old NBHD Ad! 1.22 Avg Land/Sale 19.86%e Status:Locked by user Jacqui.Dunworth on ApplY N— Outlier Property... Sale Date Sale Price Rev Appr T... A Rev R... Land Rev Imp 301539 3/3/2017 S215,700 S223,434 1748 103.59% 550,337 5173.097 220994 11/30/2017 5225,15M 5226.705 1751 100.76i. 551,750 5174,955 682961 6/21/2017 5240,57D 5241,294 1799 100.30% 553,040 5188,254 6828W 12/22/2017 S260.000 $238,927 1801 91.90> S51,DD0 5187.927 682937 11/17/2017 S275.750 S242,074 1809 87-79" 553.040 S1a9,034 301494 7/10/2017 5237.500 $245,094 1833 103.20%e 563,9D9 5181,185 301489 12/11/2017 5244,000 5238.446 1837 97.724 553,712 5184,734 rn - - Filter Sample Properties Print Poevrew... =-°r GIS OK Cancel �pN 106 Pmview 1 of 1 t 100% Tatal:112 100% 112 of 112 MEN— Residential Neighborhood Analysis Profile Run 6856 Profile Detail 259340 Previous L' ated NBHD Code DC05264 Mean Ratic 9810% 100.13% Adivatments Neighborhood THE PRESERVE Weighesd Mean 98.03% 99.969a Mean 1.:6 ATPEC:'�\CREEK MedianRato 98.07% 100.029: Median 1'5 Sample— 112 Avg Salt Appr S310,154 SHUN Samplepercent 16.30% AtgSaleApprPSF S10953 S108.91 Calculated 1.25 Population 687 Price RelatedDiff 1.00 1.00 Old NBHD Adi 1.2.2 Coefficient of Dispersion 0.0535 0.0535 AvgLand.Sale 19.86% Pmp Siroa Sala Sab TLk Grads CDU Sab Led Led L p Old Sab C9amb lid D'S It"'ad RntS`ad Ret56a0 1"—d M Adskl s Dee It— PSI t'alae Sa<% V.1. Raec Imp V.I. Ada L pt'atn App+t'6ae pSI R— CEi OO :0 I INC 14v Nn% =U1 •a6% Ca95L Is L"Iro C.^38 GBas '31% C%5n in 4 t'ttr 681S :g% trc ZE% Ct•L '! I'Okc t'dw 1`04% WW% 3*" =QC 1. 1 MOO INS Sib% M. N6% I.e. 'W Vvm MTi5 t'a:' 'S6% >a>Y MM :r: a t^m "a t.E6% DPW Ws'% M5z 'r m.a Msx pro NC% 2XIM.-. .- vi➢• veo^ Doty :a: a tms a t92% c tsA C1% oaan g ar:n m 7 tt3E Wn% '.Oro`1i NIK," Ca OC t1t 6 PEi IV. :3D1% I -, 6655 1-5: 's 9.1. ta-A Mc 'Z'd% 2UN5^: --. .:A TiP? Me= IS I tn:S w 40% 1.9,5" zAm C'S 'E I'MuS Mn C'EW Wv% =OX 0- :9 'DSBW' t6`Da II ➢ tl'11 Gt AC Sai% I-USA C855e t£'.'SE s Pas: 6 X' PWs WW% .^.00"::- ---.:A W00,17 MM " I tt➢N MaC u'S% I'6a' NE% C:0 '3 t'1w M0 Alin !CS% =N'1...--_. 3-1 MW0 :Ou a &NE IN :T.% DIAN NE% Cba tz =N. 11D gt W't 41'2% WT 1.,... .. .11, tn. :n1 ➢ tt3C Nv td N% t9.'i19 an% M. t& Pv Tl M. tCW X`m ➢tor`. flwrt t2ID3A :S I t•153 NO td1`% 9lrM Ulm CIO 'C t't AO DIMS tCT 66% IItOTI 1....- -.... :,W+ ce aD 3G 8 aT r. 9== td4 as Ti% COL 15 C'S:•-i..-1E TJMr to69X slat 1 t:g WSL :5% t6 ig 6!% t6ND to it6G: t:.6L tt5- NL% :rOT 4500 BLACK W ALNV` tiib'' M0 :3a ➢ t13t: wn tan% vi'M C5'% via tg CN on MY to a' Wd% -114'I"t BOXWOOD DW M-- Galan 3n➢ a WE C16` =C% Cl# •O6t% t— a 1:64(' GE:' t'.. '0`M% MM 4V3 BOXWOOD OR . m1 ICsx in➢ I ' MC Wfiry• 90% MOB 'aa% M`N a MM Mw MIS 'r T% C'9ti 11t'BO%WOOD ON W., gut .11 ➢ rzC wC? Nf% GW•a: tE% ViC tE M G'O:i S'.ti2 Oon% =M :to 90%W O OD OR NW.' Cso6 I= ➢ CE3: a n6% C66` nag% =. 'C MosC rz 9B ON. •tOY.e art 11:980%WO 0009 )A`DD` Egan :5G I CrT Iy 16 L•'% GON Ix" iv4 t. M% MM i••!E ixis at81:1390%W OOD DR 6JM+ t16'DL 3n8 8 GI* OGE' TT% itll:d' 116% C+g. "­ G3fd' 6"5 '1:50% sn1:Is BOXWOOD DR rae+r trsz :Io ➢ tc6 ISm zAM I'N6t W6% C116 to Mas Ma Pilo Ns% No a1039AI�0N r.`W" L'tt On i5. a ta'4: 10111 =a% C:35 CE% C0':au '3 C•-b {a IN I"a 60!% No 510101�9r0W t0Y`-f9 ON�4 3" 4 9 Y. MAN tag% Man •D:E% Ms: i c6G GO.- "a •.WN% L'E611:09 SWEEr00W OW iFWnB Mae I i I SaE fdo'm .4% Calla so••% Q.`1 z CA, CYS56 tra ..... WIN 1:10 BO A.000 on rw' 6006 iW ➢ Vt . M. to.% C'i. 0— I=-1 17 1d`1t3 M. -N A I Bo XW 009 DR r3 INS0D :CS I P70 ON V9% CA- 66% G'6's tE MT was pas ... ME 1::a a0 AW 0 as ON ITIRr ISO .v a tC'1 930G Wg% [a•'S -%Mm par t15 [Vam trs.S S'N6 'aril 00 IS:I BOXWOOD OW New- MOF :r4 6 1,a r,= Wr% =n -=% I'69" to Mar C7NIX rxu 'ttg% :alit I:a1 SWEE!OOW OR tB1W.n 9,120 :a I tt6A Ma 3a% Pam W':% I"a •r GC^4 MIN ttla st L!961501 LaN'ANA DB t ptB IS. 3!a I tWg Wen ram I:g= t5 MATS L6 NO VWv NY% 120-2018 934:14.4M Tnr Automation.lnc. 107 Neighborhood Profile: (DC05264) General I Run Detail Class Breakdown I Improved Vacant 71 Sales Ratio Chart I Lnked Profiles I Analysis Improved Properties Feature Num Low Hrgh Median Average COD 00V MA(Main Area}: 16% 4548 2845 2908 21.434: 25.483 Market: 687 92732 433574 30%51 304541 15.059, 18.176! Market:,'MA: 687 27.91 145.62 108.83 107.69 10.61% 14.694. Land.''Market 687 .1369 .7480 .2045 .2112 13.811: 25.1421 Improved Sales Feature Num Low High Median Average COD COV Sale: 112 215700 4250DO 304371 310154 13.625: 16.07Z Sale.40A: 112 78.92 152.43 107.75 109.53 12.475i 15.141, 'Sale Market.,IVIA: 112 86.57 134.13 108.35 108.91 9.4012! 11.6271 tvlarket:,'Sale 112 .87787 1.16822 1.00021 1.OD127 5.35281 6.6555! Monthly GRNIs 0 .00 .00 .00 .00 .01)000 .00000 Annual G I tvis 0 .00 .00 .00 .00 .00000 .00000 GIS OK I Cancel AH There are also several options within the software(as shown above)used to help the appraiser locate possible trends and or bias in the sold properties. The information includes,but is not limited to, location, square foot, classifications, age and depreciation, and any sales data. This is usually done by subdivision/neighborhood and then analyzed for inequality within the given data. Analysis is also conducted by downloading information from the district's CAMA software to excel spreadsheets using the querying functions in the CAMA software. The appraiser,based on the sales ratio statistics, analysis derived from Pacs software and query information to a spreadsheet,makes a preliminary decision as to whether the value level in the subdivision/neighborhood needs to be re- evaluated, or whether the value in the subdivision neighborhood is at a defendable estimated of market value. 108 F.Market Adjustment or Trending Factors Market adjustment factors are developed from appraisal statistics provided from ratio studies and are used to ensure that estimated values are consistent with the market. The district's primary approach to the valuation of residential properties uses a hybrid cost-sales comparison approach. This type of approach accounts for neighborhood market influences not specified in the cost approach. The following equation denotes the hybrid model used: MV=LV+((CN-D)MA) Market Value=Land Value+ ((Cost New—Depreciation) Market Adjustment) $142,084= $22,297+(($140,150—23%) 1.11%) Where the market value equals the land value plus the replacement cost new less depreciation time market adjustment factors. As the cost approach separately estimates both land and building values and uses depreciated replacement costs,which reflect only the supply side of the market,it is expected that adjustments to the cost values are needed to bring the level of appraisal to an estimate of market value. If the subdivision/neighborhood is to be updated,the appraiser uses a ratio study that compares recent sales prices of properties within a delineated subdivision/neighborhood with the properties' appraised value. The calculated ratio derived from the sum of the sold properties' appraised value divided by the sum of the sales prices indicates the subdivision-neighborhood level of value based on the unadjusted value for the sold properties. This comparison of appraised value-to-sale ratio determines the market adjustment factor for each subdivision/neighborhood. This market adjustment factor is needed to trend the values closer to the actual market evidenced by recent sales prices within a given subdivision- neighborhood. The market adjustment factor calculated for each updated subdivision-neighborhood is applied uniformly to all properties within a neighborhood and as needed in the subdivision. Once the market-trend factors are applied, a second set of ratio studies is generated that compares recent sale prices with the proposed appraised values for these sold properties. From this set of ratio studies,the appraiser judges the appraisal level and uniformity in both updated and non-updated subdivision-neighborhoods, and finally, for the school district as a whole. 2.36 Individual Value Review Procedures A. Field Review Property field inspections may be initiated for a variety of reasons. A property owner might dispute the district's appraisal attributes or data concerning his property. Typically, a new field check is then requested to verify this evidence for the current year's valuation or for the next year's valuation. Additionally, if a building permit is filed for a particular property indicating a change in characteristics,a field check is then scheduled for that property. Finally, even though every property cannot be inspected each year, each appraiser typically designates certain segments of their area of responsibility to conduct field checks. 109 Residential appraisers are somewhat limited in the time available to field review all residential properties in a given area. Still, a major effort is made by appraisers to field review properties and economic areas experiencing large numbers of remodels,renovations,rental rates,new construction, or wide variations in sale prices. Additionally,the appraiser frequently field checks subjective data items such as class, quality of construction, condition,and physical, functional and economic obsolescence factors contributing significantly to the market value of the property. Sometimes field reviews are warranted when sharp changes in sales quantity and price levels occur between building classes or between market areas. Appraisers also physically inspect sold and unsold properties for comparability and consistency of values. In addition to conducting field reviews on a priority basis as discussed above,the residential department physically reviews all properties every 6 years as outlined in the IAAO Standard on Mass Appraisal. This review could be either onsite or by current aerials. Residential department manager along with the department supervisors determine the areas for onsite reviews each year. Residential appraisers should present themselves in a polite and professional manner and be prepared to deal with a variety of situations and personalities. Appraisers should always take the time to fully explain the reason for their visit,and are required to carry DCAD issued photo identification badges and business cards. B. Office Review Given the resources and time required to conduct a routine field review of properties,homogeneous properties consisting of tract housing with a low variance in sales ratios and other properties having a recent field inspection date are value reviewed in the office.Valuation reports comparing previous values against proposed and final values can be generated for all residential improved properties. Previous values resulting from a formal hearing protest and others from informal hearings are individually reviewed to determine if the value remains appropriate for the current year. Once the appraiser is satisfied with the level and uniformity of value for each subdivision-neighborhood within his area of responsibility,the residential department manager and department supervisors review the estimates of value. Although the value estimates are determined in a computerized mass appraisal environment, appraiser review helps to identify value anomalies before the value is released for noticing. 2.37 Performance Tests A. Sales Ratio Studies The primary tool used to measure mass appraisal performance is the ratio study. A ratio study compares appraised values to market values. In a ratio study,market values (value in exchange) are typically represented by sales prices(i.e. a sales ratio study). Independent,expert appraisals may also be used to represent market values in a ratio study(i.e. an appraisal ratio study). If there are not enough sales to 110 provide necessary representation, independent appraisals can be used as indicators for market value. This can be particularly useful for real property for which sales are limited. In addition, appraisal ratio studies can be used for properties that are by statute not appraised at market value,but reflect the use-value requirement. An example of this is homesteaded,residential properties that are located in an area of transition,that have a high likelihood of being sold or rezoned for commercial use. Sales ratio studies are an integral part of establishing equitable and accurate market value estimates, and ultimately assessments for taxing jurisdictions. The primary uses of sale ratio studies include the determination of a need for general reappraisal;prioritizing selected groups of property types for reappraisal; identification of potential problems with appraisal procedures; and, assist in market analyses. Pursuant to Chapter 5, of the Texas Property Tax Code, and Section 403.302, of the Texas Government Code,the Comptroller's Property Tax Division(PTD)conducts an annual property value study(PVS) of each Texas school district and each appraisal district. As a part of this annual study,the code also requires the Comptroller to:use sales and generally accepted auditing and sampling techniques;test the validity of school district taxable values in each appraisal district and presume the appraisal roll values are correct when values are valid; and, determine the level and uniformity of property tax appraisal in each appraisal district. The methodology used in the property value study includes stratified samples to improve sample representation and techniques or procedures of measuring uniformity. This study utilizes statistical analysis of sold properties(sale ratio studies)and appraisals of unsold properties (appraisal ratio studies) as a basis for assessment ratio reporting. For appraisal districts,the reported measures include median level of appraisal,coefficient of dispersion(COD),the percentage of properties within 10%of the median,the percentage of properties within 25%of the median and price-related differential(PRD)for properties overall and by state category. B. Limitation of Appraised Value on Homesteads In 1997,the Texas Legislator,with the approval from the voting population enacted Section 23.23 of the Texas Property Tax Code. Section 23.23 provides that the appraised value of a residence homestead for a tax year will be limited to the lesser of either its market value or the sum of the market value of any new improvements and 110 percent of the appraised value for the preceding year. If an appraisal district reappraise each year then each year the property could be subject to the 10 percent limitation. If the district reappraise every 2 years then the increase would be as much as 20 percent and every 3 years it would be 30 percent. The Denton Central Appraisal District does reappraise every year. In an increase market this procedure can and will compound. The limitation takes effect the following year after the first year that the residential homestead was granted. The limitation expires on January 1 of the first year that neither the owner of the property when the limitation took effect nor the owner's spouse or surviving spouse qualifies for the homestead exemption. 111 Example: 1 Market Value for 2017 $150,000 Market Value for 2018 $175,000 Limited Assessed Value Calculation for 2018 $150,000 * 1.10=$165,000 Under these circumstances the market value is greater than the limited assessed value. The limited assessed value would then become the value used for tax calculation. Market Value for 2019 $190,000 Limited Assessed Value Calculation for 2019 $165,000 * 1.10= $181,500 Again the market value is greater than the limited assessed value. The limited assessed value would then become the value used for tax calculation. Example: 2 Market Value for 2017 $120,000 Market Value for 2018 $150,000 *** Pool added to roll for 2018 Limited Assessed Value Calculation for 2018 $120,000 * 1.10= $132,000+$10,000 (pool)_ $142,000 In this example a pool was added to the appraisal roll for 2018. The value of the pool is not subject to the"homestead cap". The calculation for the limited assessed value is performed by using the 2017 value times 1.10 plus the value of the"new pool". In this example even with the added value of the pool the limited assessed value is less than the market value. The limited assessed value would then be the value used for tax calculation. Market Value for 2019 $155,000 Limited Assessed Value Calculation for 2019 $142,000 * 1.10= $156,200 For 2019 the pool would now become part of the value calculation for the limited assessed value "homestead cap". The market value was $155,000 for 2019 and the limited value is $156,000. Since the market value is the lesser of the two,the market value would then become the value used for tax calculation. The value of any new improvements(new structures or the complete remodeling of the improvement)is added after the calculation of the limited assessed value. 112 Example: 3 In this example the property is receiving the open space valuation on the land for the year 2018. Improvement Value 2017 (House) $100,000 Improvement Value 2017 (Barns) $ 15,000 Land Homesite (1 acre) $ 7,500 Land Ag Use (19 acres) $ 2,090 Market Value of Land Receiving Ag Use (19 Acres) $142,000 Total Market Value $264,500 Total Assessed Value $124,590 Calculation of the limited assessment value for 2018 $100,000(house)+ $7,500(land homesite) = $107,500 * 1.10=$118,250 (Limited assessed value for homesite) $118,250(limited assessed value) +$15,000(improv.Non-homesite) + $2,090 (Ag Land)= $135,340 The limited assessed value for the portions receiving the homestead would be $118,250 adding in the portions not receiving the homestead$17,090 equals $135,340. 113 Example: 4 Adding land to homestead by combining 2 accounts; 229442 Lt 27, Lot size 0.1716 Market Value for 2017 $392,586 Homesteaded account 229443 Lt 28, Lot size 0.3926 Market Value for 2017 $ 32,615 Total Combined Value for 2017 $425,201 Do not combine the land segments in the first year that the lots are combined. PID 229442 is the current account and PID 229443 is deleted. Add a new segment line in the land for the size of lot 28 under the general tab. On the upper right hand side there is a box to click next to "ADD NEW TO HS FOR" PACs will enter the year. 229442 Lt 27,28; Lot size 0.5642 Market Value for 2018 $422,942 2018 Market Value is less than 2017 Market Value there is no cap. 114 Example: 5 Adding land to homestead by combining 2 accounts; 41115 J. Smith Tr. 16, 1.00 acres Market Value for 2017 $92,151 Homesteaded account 84168 J. Smith Tr. 17, 1.50 acres Market Value for 2017 $ 37,849 Total Combined Value for 2017 $130,000 (on distribute) Appraised Notice$138,922 Do not combine the land segments in the first year that the lots are combined. PID 41115 is the current account and PID 84168 is deleted. Add a new segment line in the land for the acres in TR 17 under the general tab. On the upper right hand side there is a box to click next to "ADD NEW TO HS FOR" pacs will enter the year. Improvement flag as New Value "Improv Detail" 41115 J. Smith Tr. 16& 17, 2.50 acres Market value for 2018 Improv HS $ 80,486 Improv Non-HS $ 324 add to Homestead for 2018 Land HS $45,667 Land Non-HS $ 68,500 add to Homestead for 2018 Current market value for 2018 $194,977 Total Homestead value for 2018 2017 Market Value $130,000 * 1.10=$143,000 Limited Assessed Value Calculation for 2018 $143,000+$324+$68,500=$211,824 Cap Limit Calculation is higher than 2018 Market Value so there is no cap after combining accounts. **FLAG THE ADDED IMPROVEMENT 115 2.38 Value Defense Procedures The appeals process begins with an informal meeting between the appraiser and the property owner to discuss any errors, discrepancies of market value and/or equity, and any claims of exemptions or special valuations(agricultural use,restricted use value, etc.). The informal review may be handled by mail, in person,or by telephone. The review allows for communication and mutual understanding,which will reduce the number of formal appeals. Informal reviews should incorporate the following basic steps: 1) Verify the parcel information; 2) Exchange information; 3) Record the nature of complaint; 4) Use cost, sales, or income information to confirm property value; 5) If a value change is indicated,the appraiser will change the value and enter into a signed agreement with the property owner; 6) If a value change is not warranted,the appraiser should explain the appeal rights and procedures, in case the property owner wishes to make a formal appeal. Residential appraisers must get written approval from the Residential Manager or Supervisors to settle any property with an appraised value of$1,000,000 or higher. Appraisal Review Board hearings(formal appeals) are the next step in the appeals process. Prior to the hearing,the property owner should be given a copy of the evidence the appraiser plans to use in evidence. The appraiser should be prepared to present factual information relating to the property, such as copies of tax maps,pictures of the property, improvement drawings, etc.,as well as valuation information, such as the cost,market, and income approaches to value as necessary. If there is an equity component to the appeal,the appraiser should be prepared to present a reasonable sample of equity comparable based on cost, sales,or income as appropriate. 2.39 Education and Training All employees shall have the knowledge and expertise to do their job. Each employee will have a minimum educational standard required for their position. In addition,DCAD will supply the following: A. On the job training—each employee will receive training on procedures,policy,and equipment by their supervisor and other employees in similar positions. B. State required education and registration—all employees so required will achieve and maintain their own educational and registration requirements. C.Additional training and education—from time to time, additional training and education will be required to enhance job performance,knowledge and expertise. Employees will be expected to perform to a minimum standard. 116 Denton Central Appraisal District Residential Department Field Classification Guide Revised January, 2014 Note: This manual is intended to be used as a guide. It is not intended to address individual characteristics and the minor variations between similar properties.It is possible that structures may have part or all of the features that are described in each class. Enhancements or detraction from the cost schedule are handled individually. 117 Basic category groupings for classifications: Class 1 } Basic, Low Cost Structure Very Basic Class 2 } Fair, Low Cost Structure Class 3 } Average/Low Quality Tract Home Individually Blt/ Class 4 } Above Average Quality Tract Home or Tract Home Class 5 } Premium Quality Tract/Semi-Custom Home Class 5A } Semi-Custom Home Custom Class 5B Semi/Full Custom Home Class 5C } Full Custom, Luxury Home Special Pricing } Highly Unique, Exceptional Quality, Luxury Estate Some classifications have a corresponding"E" class. The "E" class has the same basic specifications. The exceptions for"E" are additional refinements in material and workmanship. Ornamentation will be more defined in some cases. Classes with the "E" are improved version of the class without the "E", but are not worthy of being moved into a higher class. Note: All Class Descriptions are adapted from the Marshal&Swift Residential Cost Handbook, 02009 Marshal&Swift,and Exceptional Homes, A Cost Guide for High-Value and Unique Residences, 02009 Marshal&Swift. 118 Class 1 Class 1 structures will be of low cost construction quality and materials. These structures will meet the minimum standards for local building codes. Interior finishing will be plain and inexpensive and designed for functionality,with little or no attention given to appearance.The exterior finish will be plain,with little to no trim. Windows and doors will be of low cost grade to meet minimum building standards. The interior of Class 1 structures will meet the minimum requirements for local building codes.All fixtures will be of low cost quality and minimal in quantity. Class 2 Class 2 structures will be of inexpensive construction quality designed and built typically for mass production. Windows and doors will be inexpensive with little trim. The overall quality of workmanship is below average, but not below building code standards. A class 2 house will meet minimum construction requirements of lending institutions. The design will most likely be from stock plans. The interior of Class 2 structures will be finished with inexpensive grade materials. Fixtures will be inexpensive and sufficient in quantity for the application. Flooring will be of inexpensive, mass produced quality. Interior trim will be minimal. Class 3 Class 3 structures will be of average quality construction and materials. Most structures will be built as standardized plans with minimal options, but could have additional refinements to the interior and exterior. Doors and windows will be of average quality, mostly stock & widely available materials. The overall quality of construction will be average. Exterior trim will have sufficient ornamentation, average quality masonry design, and average quality fenestration. The interior of a class 3 will be of average quality, using standard grade materials and workmanship. Flooring will be of average,stock quality. Fixtures will be of average quality and quantity. Some rooms of the structure may receive slight levels of enhancement with trim for appearance. Class 4 Class 4 structures will be of above average quality construction and materials. Most structures will be built as standard plans, and may be built with mass production construction techniques and methods. Structures will have individual variances in the ornamentation and finish of the exterior. Roofing materials will be of a moderately good quality weight and appearance. Structures will generally exceed building code standards and requirements of lending institutions. Structure is best described as a good quality tract home with individually selected standardized variations. The interior of a Class 4 structure will generally be of above average quality. Interiors are well finished with above average level of attention is given to interior refinements and detail. Flooring will be of good quality materials. Ample amounts of cabinetry in kitchen area of good quality. Overall interior finish and craftsmanship is of average to above average, and good quality. 119 Class 5 Class 5 structures are of high quality construction and materials. These structures will frequently have individual attention to detail. Some structures will be designed from tract type construction plans that may have multiple options and variations. Roofing material will be of good to high quality materials. This class is best described as a high quality tract home, or individually designed structure with individual options and ornamentation. The exterior of the Class 5 structure will have more attention to detail, and will have different levels of ornamentation and fenestration. The interior of Class 5 structures will be above average to high quality throughout. Flooring will be of high grade materials. Interior ceiling height could likely to be greater than 8',with vaulted,stepped or cathedral ceilings in some areas such as master bedrooms and main living areas. Hardware will be above average to high quality. Crown molding or additional trim is likely to be present in main living areas, kitchens, and master bedroom areas. Fixtures will be more than adequate, well placed, and above average to high quality. Kitchens will have high quality cabinets with high quality hardware. Kitchens may include items such as island counters, etc. Overall interior finish and craftsmanship is of high quality. Class 5A Class 5A structures are of excellent quality construction and materials. The term "excellent" is not to be interpreted as "best" or "highest". These structures will be,for the most part, individually designed with individual attention to detail. Some Class 5A structures will be built from a standardized builder plan, but are likely to be modified to individual preferences.Class 5A structures are best described as a semi-custom home with individually selected features that exhibit a level of uniqueness in their appearance. The exterior of Class 5A structures will be of excellent quality, but not the highest or best quality. Roofing materials will be of excellent quality, heavy-weight materials, and will occasionally include metal or masonry-type material. High quality windows with high quality sash, and insulation features will be standard. Non-masonry siding will be of high quality materials and installation.These structures will have some custom ornamentation, excellent quality masonry work, and individually selected masonry styles. The interior of Class 5A structures will be of excellent quality construction and materials. The term "excellent" is not to be interpreted as "best" or "highest". Interior ceiling height for a Class 5A house is likely to be 9 to 10 Feet. High quality interior doors and hardware will be standard. Vaulted, stepped or cathedral ceilings in areas such as master bedrooms and main living areas will be common. Cabinetry will be individually selected for the residence. Bedrooms will have spacious closets. Interior fixtures will be of excellent quality, abundant, and well placed. Some fixtures may be unique in design. Kitchens will have high quality cabinets with high quality hardware. Kitchen design may include items such as island counters, wet bars, etc. Master Bath areas will be spacious, and may include separate tub and shower areas. High grade plumbing fixtures will be standard. Class 513 Class 5B structures are of excellent quality construction and materials, and are characterized by custom quality workmanship and materials. These structures will be individually designed with significant individual attention to detail. Class 5B structures will be built from a custom designed plan and will have a high degree of customization to individual preferences. Class 5B structures are best described as a full custom home that exhibits a high degree of uniqueness in appearance.The exterior of Class 5B structures 120 will be of excellent quality including high quality windows with high quality sash and high quality non- masonry siding. These structures will have custom ornamentation including exposed wood, cast or cut stone, high quality natural stone, etc. with excellent quality masonry work and individually selected masonry styles. Some structures will utilize stucco or similar material. Roofing materials will be of excellent quality, heavy-weight materials, and will occasionally include metal, clay tile, slate or other masonry-type material. Roof design will typically have a moderately steep pitch with multiple ridges and valleys. The interior of a Class 5B structure will be of custom,excellent quality materials and construction.typically interior ceiling height for a Class 513 house is 9 to 10 Feet. Interiors may likely have solid core doors with high quality custom grade hardware. Interior finish will include custom textures for walls, high quality crown molding, trim, and additional accent features. Vaulted, stepped or cathedral ceilings in areas such as master bedrooms and main living areas are typical. Cabinetry and built in shelving will be individually selected for the residence, and will have high quality finish and hardware. Interior fixtures will be of custom grade quality, abundant,and well placed. Kitchens will have high quality custom cabinets with high quality materials, finish, and hardware. Kitchen design will include items such as island counters, wet bars, etc. Master Bath areas will be spacious, and may include separate tub and shower areas. High grade plumbing fixtures will be standard. High quality, custom grade wood or tile flooring will be standard. Stairwells for 2-story homes could have custom detailed banisters. Overall,the interior of Class 5B home is of excellent quality materials, custom design, and excellent quality custom workmanship. Class 5C Class 5C structures are of the highest quality construction and materials,and are characterized by custom quality workmanship throughout the entire structure.These structures will be individually designed with a high level of attention to detail. Class 5C structures will be built from an individually custom designed plan and will have a high degree of customization to individual preferences. Class 5C structures are best described as a full custom home with luxury features that exhibit a very high degree of uniqueness in appearance. The exterior of Class 5C structures will be of the highest quality including highest quality windows and doors with highest quality sash and highest quality non-masonry siding. Entry doors will be custom designed with substantial detail and workmanship.These structures will have significant levels of custom ornamentation including exposed wood, cast or cut stone, high quality natural stone, etc. with the highest quality masonry work and individually selected masonry styles. Stucco type materials will be common at this level of quality. Roofing materials will be of the highest quality, heavy-weight materials, and will include metal, clay tile, slate or other masonry-type material. Roof design will typically have a steep pitch with multiple ridges and valleys. Highest quality gutters and downspouts will be standard. The interior of a Class 5C structure will be of the highest quality custom, luxury materials and construction techniques. Normally the minimum interior ceiling height for a Class 5C house is 10 Feet. Many structures will have ceiling height greater than 10 feet. Interiors could have solid core doors with the highest quality custom grade hardware. Interior finish will include the highest quality custom textures for walls, individually selected high quality crown molding, trim, and additional accent features. Vaulted, stepped or cathedral ceilings in areas such as master bedrooms and main living areas are typical, ceilings will typically have individually customized,and coffered/vaulted panel designs using the highest grade custom materials. Cabinetry and built in shelving will be individually selected and of the highest grade materials and include the highest quality custom hardware. Bedrooms will have spacious closets. Interior fixtures 121 will be of the highest quality and custom grade, abundant, and well placed. Kitchens will have the highest quality custom cabinets with highest quality materials, finish, and hardware. Kitchen design will include items such as island counters,wet bars,etc. Master Bath areas will be spacious, luxurious,and will include separate tub and shower areas with the highest quality finish including custom designed vanities, lighting, etc. Highest grade plumbing fixtures will be standard. Highest quality, custom grade wood or tile flooring will be standard. Materials such as terrazzo, high grade marble, granite, or other luxury grade materials are commonly used. Stairwells for 2-story homes will have custom designed and highest quality wood or other materials used in banister construction. Overall, the interior of Class 5C home is of the highest quality materials, custom, luxurious design, and the highest quality custom workmanship. Class Special Price (SP) Use of Special Price Class should be limited to residences that exceed the base cost of Class 5C by the addition of extensive amounts of fixtures and accessories that are not covered in the basic cost calculations for that class. 122 Denton Central Appraisal District Residential Department Field Classification Guide Revised January, 2014 Beginning Use in 2014 Note: This manual is intended to be used as a guide. It is not intended to address individual characteristics and the minor variations between similar properties. It is possible that structures may have part or all of the features that are described in each class. Enhancements or detraction from the cost schedule are handled individually. 123 Basic category groupings for classifications: Class 6 } Basic, Low Cost Structure Class 7 Low/Avg. Quality Tract Home Class 8 Tract Class 9 } Above Average/ High Quality Tract Home Class 10 Premium Quality Tract/Semi-Custom Home Class 10A Custom Class 10B } Full Custom Home Class 10C Full Custom, Luxury Home Class 1013 Class 11 Class 11A Premium Quality Luxury Home Luxury Class 11B f Class 11B&11C} Highest Quality Premium Luxury Home Special Pricing } Highly Unique, Exceptional Quality, Luxury Estate Some classifications have a corresponding"E" class. The "E" class has the same basic specifications. The exceptions for"E" are additional refinements in material and workmanship. Ornamentation will be more defined in some cases. Classes with the "E" are improved version of the class without the "E", but are not worthy of being moved into a higher class. Note: All Class Descriptions are adapted from the Marshal&Swift Residential Cost Handbook, 02009 Marshal&Swift;and Exceptional Homes,A Cost Guide for High-Value and Unique Residences, 02009 Marshal&Swift. 124 Class 6 Class 6 structures will be of low cost construction quality and materials. These structures will meet the minimum standards for local building codes. All architecture will be designed for functionality, with little or no attention given to appearance. The exterior finish will be plain, with little to no trim. Windows and doors will be of low cost grade to meet minimum building standards. The interior of Class 6 structures will meet the minimum requirements for local building codes.All fixtures will be of low cost quality and minimal in quantity. Very little or no attention will be given to detail for interior finish. Flooring will be low cost, and will meet the minimum building code requirements. Class 7 Class 7 structures will be of inexpensive construction quality designed and built typically for mass production. Class 7 structures are best described as a basic tract home. Most structures will be built from a standardized set of plans with few options.Architecture will usually be standardized to allow for the use of mass produced, inexpensive materials.Windows and doors will be inexpensive with little trim. Exterior trim and ornamentation will be limited to the front of the structure. The overall quality of workmanship is below average, but not below building code standards. The interior of Class 7 structures will be finished with inexpensive grade materials. Fixtures will be inexpensive and sufficient in quantity for the application. Flooring will be of inexpensive, mass produced quality. Interior trim will be minimal. Class 8 Class 8 structures will be of average quality construction and materials. Most structures will be built as standardized plans with minimal options,but will have additional refinements to the interior and exterior. Doors and windows will be of average quality, mostly stock & widely available materials. The overall quality of construction will be average. Exterior trim will have sufficient ornamentation, average quality masonry design, and average quality fenestration. The interior of a class 8 will be of average quality, using standard grade materials and workmanship. Flooring will be of average, stock quality. Fixtures will be of average quality and quantity. Some rooms of the structure may receive slight levels of enhancement with trim for appearance. Class 9 Class 9 structures will be of above average quality construction and materials. Most structures will be built as standard plans, and may be built with mass production construction techniques and methods. Class 9 structures will have individual variances in the ornamentation and finish of the exterior. Roofing materials will be of a moderately good quality weight and appearance. Structures will exceed building code standards in nearly all categories. A class 9 structure is best described as a good quality tract home with individually selected standardized variations. The interior of a Class 9 structure will be of above average quality. Interiors are well finished with above average level of attention is given to interior refinements and detail. Flooring will be of good quality 125 materials. Ample amounts of cabinetry in kitchen area of good quality. Some areas of the interior may have vaulted,stepped, or cathedral ceilings.Overall interior finish and craftsmanship is of above average, and good quality. Class 10 Class 10 structures are of high quality construction and materials. These structures will frequently have individual attention to detail. Some structures will be designed from tract type construction plans that may have multiple options and variations. Roofing material will be of high quality materials, including but not limited to metal. A class 10 structure is best described as a high quality tract home, or individually designed structure with individual options and ornamentation. The exterior of Class 10 structures will have considerable attention to detail, and will have considerable levels of ornamentation and fenestration. The interior of Class 10 structures will be high quality throughout. Flooring will be of high grade materials. Interior ceiling height is likely to be greater than 8', with vaulted, stepped or cathedral ceilings in some areas such as master bedrooms and main living areas. Hardware will be high quality. Corners and coves will receive additional detail and trim.Crown molding or additional trim will likely be present in main living areas, kitchens, and master bedroom areas. Fixtures will be abundant, well placed, and of high quality. Kitchens will have high quality cabinets with high quality hardware. Kitchens may include items such as island counters,wet bars, etc. Overall interior finish and craftsmanship is of high quality. Class 10A Class 10A structures are of excellent quality construction and materials.The term "excellent" is not to be interpreted as "best" or "highest". These structures will be,for the most part, individually designed with individual attention to detail.Some Class 10A structures will be built from a standardized builder plan, but are likely to be modified to individual preferences. Class 10A structures are best described as a semi- custom home with individually selected features that exhibit a level of uniqueness in their appearance. The exterior of Class 10A structures will be of excellent quality, but not the highest or best quality. Roofing materials will be of excellent quality, heavy-weight materials, and will occasionally include metal or masonry-type material. High quality windows with high quality sash, and insulation features will be standard. Non-masonry siding will be of high quality materials and installation.These structures will have some custom ornamentation, excellent quality masonry work, and individually selected masonry styles. The interior of Class 10A structures will be of excellent quality construction and materials. The term "excellent" is not to be interpreted as "best" or"highest". Interior ceiling height for a Class 10A house is likely to be 9 to 10 Feet. High quality interior doors and hardware will be standard. Vaulted, stepped or cathedral ceilings in areas such as master bedrooms and main living areas will be common. Cabinetry will be individually selected for the residence. Bedrooms will have spacious closets. Interior fixtures will be of excellent quality, abundant, and well placed. Some fixtures may be unique in design. Kitchens will have high quality cabinets with high quality hardware. Kitchen design may include items such as island counters, wet bars, etc. Master Bath areas will be spacious, and may include separate tub and shower areas. High grade plumbing fixtures will be standard. 126 Class 1013 Class 1013 structures are of excellent quality construction and materials, and are characterized by custom quality workmanship and materials. These structures will be individually designed with significant individual attention to detail. Class 10B structures will be built from a custom designed plan and will have a high degree of customization to individual preferences. Class 10B structures are best described as a full custom home that exhibits a high degree of uniqueness in appearance.The exterior of Class 10B structures will be of excellent quality including high quality windows with high quality sash and high quality non- masonry siding. These structures will have custom ornamentation including exposed wood, cast or cut stone, high quality natural stone, etc. with excellent quality masonry work and individually selected masonry styles. Some structures will utilize stucco or similar material. Roofing materials will be of excellent quality, heavy-weight materials, and will occasionally include metal, clay tile, slate or other masonry-type material. Roof design will typically have a moderately steep pitch with multiple ridges and valleys. The interior of a Class 1013 structure will be of custom, excellent quality materials and construction. Typically interior ceiling height for a Class 1013 house is 9 to 10 Feet. Interiors may likely have solid core doors with high quality custom grade hardware. Interior finish will include custom textures for walls, high quality crown molding,trim,and additional accent features.Vaulted,stepped or cathedral ceilings in areas such as master bedrooms and main living areas are typical. Cabinetry and built in shelving will be individually selected for the residence,and will have high quality finish and hardware. Bedrooms will have spacious closets. Interior fixtures will be of custom grade quality, abundant,and well placed. Kitchens will have high quality custom cabinets with high quality materials, finish, and hardware. Kitchen design will include items such as island counters, wet bars, etc. Master Bath areas will be spacious, and may include separate tub and shower areas. High grade plumbing fixtures will be standard. High quality, custom grade wood or tile flooring will be standard. Stairwells for 2-story homes will have custom detailed banisters. Overall, the interior of Class 10B home is of excellent quality materials, custom design, and excellent quality custom workmanship. Class 10C Class 10C structures are of the highest quality construction and materials,and are characterized by custom quality workmanship throughout the entire structure.These structures will be individually designed with a high level of attention to detail. Class 10C structures will be built from an individually custom designed plan and will have a high degree of customization to individual preferences. Class 10C structures are best described as a full custom home with luxury features that exhibit a very high degree of uniqueness in appearance. The exterior of Class 10C structures will be of the highest quality including highest quality windows and doors with highest quality sash and highest quality non-masonry siding. Entry doors will be custom designed with substantial detail and workmanship.These structures will have significant levels of custom ornamentation including exposed wood, cast or cut stone, high quality natural stone, etc. with the highest quality masonry work and individually selected masonry styles. Stucco type materials will be common at this level of quality. Roofing materials will be of the highest quality, heavy-weight materials, and will include metal, clay tile, slate or other masonry-type material. Roof design will typically have a steep pitch with multiple ridges and valleys. Highest quality gutters and downspouts will be standard. 127 The interior of a Class 10C structure will be of the highest quality custom, luxury materials and construction techniques.Minimum interior ceiling height for a Class 10C house is 10 Feet. Many structures will have ceiling height greater than 10 feet. Interiors will have solid core doors with the highest quality custom grade hardware. Interior finish will include the highest quality custom textures for walls, individually selected high quality crown molding, trim, and additional accent features. Vaulted, stepped or cathedral ceilings in areas such as master bedrooms and main living areas are typical, ceilings will typically have individually customized,and coffered/vaulted panel designs using the highest grade custom materials. Cabinetry and built in shelving will be individually selected and of the highest grade materials and include the highest quality custom hardware. Bedrooms will have spacious closets. Interior fixtures will be of the highest quality and custom grade, abundant, and well placed. Kitchens will have the highest quality custom cabinets with highest quality materials, finish, and hardware. Kitchen design will include items such as island counters,wet bars,etc. Master Bath areas will be spacious, luxurious,and will include separate tub and shower areas with the highest quality finish including custom designed vanities, lighting, etc. Highest grade plumbing fixtures will be standard. Highest quality, custom grade wood or tile flooring will be standard. Materials such as terrazzo, high grade marble, granite, or other luxury grade materials are commonly used. Stairwells for 2-story homes will have custom designed and highest quality wood or other materials used in banister construction. Overall, the interior of Class 10C home is of the highest quality materials, custom, luxurious design, and the highest quality custom workmanship. Class 10D Class 10D structures are of the best quality construction and materials, and are characterized by the best quality workmanship throughout the entire structure.These structures will be individually designed with the best level of attention to detail. Class 10D structures are similar to Class 10C structures with additional levels of luxury features. A Class 10 D structure is best described as a very high quality luxury home with completely custom designed features. Exteriors will have the best quality windows and doors. Exterior walls will be as thick as 8-12 inches. Clay, slate, or high grade metal roofing material will be standard. Large roof overhangs of up to 3 feet are common. The interior of a Class 10D is similar to a Class 10C, but with additional levels of luxury materials,fixtures, and craftsmanship. Flooring will be of luxury grade, or exotic type hardwoods,tile, or other material that is finished to a very high level, and are rated for high sustainability. Substantial levels of trim, moldings, and textures applied to ceilings and walls. Some residences will have plaster walls and ceilings creating a highly refined look. Stairwells for 2-story homes will be made from custom stone or hardwoods, and include a high grade custom banister with substantial ornamentation. Kitchen areas will have elaborate cooking and preparations areas with the highest grade appliances and ventilation systems, in addition to luxury grade cabinetry and countertops. Sinks and basins will be of custom, high grade design and materials. Master bathrooms will be finished elaborately with substantial detail. Tub and shower design will be of a custom luxury level. Overall, the interior of a Class 10D home is of the best quality materials with custom, luxurious design, and the best custom workmanship. 128 Class 11 Class 11 structures are of the finest quality construction and materials, and are characterized by the very best quality workmanship throughout the entire structure. These structures will be individually designed with the finest level of attention to detail. Class 11 structures are similar to Class 10D structures with additional levels of finish and extensive attention to luxury features.A Class 11 structure is best described as an extensively appointed, exceptionally high quality luxury home with completely custom designed features. Class 11 structures will generally require extensive engineering costs due to the complexity of the design and the environmental control systems required.The construction of many Class 11 structures will require the use of steel reinforcement (1-beams, etc.) for large spans within the structure and for additional support for the second floor.The exterior of Class 11 structures will have substantial levels of detail and fenestration. Doors and windows will be custom designed and of the very best quality. Roof design will have exceptional quality materials and will have substantial levels of detail and ornamentation. The interior of a Class 11 is similar to a Class 10D, but with additional levels of luxury materials, fixtures, and craftsmanship. Flooring will be of premium luxury grade, or exotic type hardwoods, tile, or other material that is finished to a very high level, and are rated for high sustainability. Flooring will frequently have custom inlaid materials, unique designs, patterns or artwork. Extensive levels of trim, moldings, and textures applied to ceilings and walls.Residences will often have plaster walls and ceilings creating a highly refined look.Trim/molding may include hand-fabricated custom materials, and may be finished with high levels of detail.Ceilings may have plaster moldings or embossed metals for additional detail. Hand painted murals on ceilings and walls are common at this level. Interior layouts will include elaborate special- purpose rooms such as libraries,theaters, reception areas, hidden rooms, etc. Some residences may have additional master suites or an elaborate guest suite. Master bedrooms will be extensively appointed with the finest materials. Master closets will have peninsula or island type dresser cabinetry that is custom designed with high grade materials and hardware within each of the his/her closets, and the closets will be very spacious with luminous lighting. Some structures may have additional kitchens or kitchenette areas for convenience. Minimum ceiling height for most class 11 structures will exceed 12 feet in height. Overall, a Class 11 interior is of the very best quality luxury materials and workmanship with elaborate levels of detail and refinement. Class 11A Class 11A structures will be of the finest quality of construction and workmanship. Class 11A structures will be completely unique in design and workmanship. Structures of this quality will have extraordinarily high levels of detail and luxury items. Class 11A structures are best described as individually designed, unique,custom structures with extraordinary levels of detail, refinement,and luxury; and will incorporate only the finest quality materials and workmanship. A partial steel frame for construction is common for residences of this quality to accommodate large spans in open areas. The exterior of a Class 11A will be of the finest quality materials, and workmanship. Nearly all windows and doors will be custom designed for that residence, and will be of the finest quality available. Exterior trim will feature extraordinary levels of detail to ornamentation and fenestration. Structures may have exposed wood beams, or other unique ornamentation. Most exterior walls will be approximately 12" thick. Roof design will incorporate steep slopes and will use the finest custom materials with extensive ornamentation. Some roof materials may be imported from "one of a kind" sources. Some High quality flashing, such as copper or other high grade metals will be used. Gutters will be of the finest quality and will be custom designed for the residence. Front entries will have extraordinary levels of detail and incorporate the finest quality materials available. 129 Interiors of Class 11A structures will be of the finest quality of construction, design, and craftsmanship. Most structures will have the finest grade plaster walls with extraordinary levels of molding and trim. Nearly all doors and windows will have molding and trim. Flooring will be of premium quality, custom, luxury grade materials. Only the finest materials including imported tiles, terrazzo, high grade marble, custom exotic parquet or plank hardwood flooring with custom, hand tailored finishes will be used. Ceilings will contain extensive and elaborate designs including vaulted, coffered, ceilings with embossed tin or plaster moldings. Some ceilings will have hand painted murals in addition to other custom artwork throughout the structure. Nonstandard corners, angles, and radii will frequently be used for wall and ceiling design. Electrical design will frequently incorporate extensive home automation systems to control lighting, sound, climate, etc. Lighting fixtures will be extensive, well-placed, and of the finest quality. Lighting may include several elaborately designed fixtures in prominent areas. Kitchens will spacious and feature the finest quality materials and uniqueness in design. Some structures may feature separate kitchen areas to be used by staff or for food preparation.The primary kitchen area will be used as a focal point, or for entertaining. Master bathrooms will incorporate spacious areas with separate tub and shower facilities. Plumbing fixtures are of the finest quality. Master bathrooms may have separate his/hers toilets. Showers will be spacious and custom designed with elaborate materials and custom fixture arrangement. Showers will likely have multiple spray heads, valves, and temperature controls. Master Bedroom closet areas will be custom designed with elaborate cabinetry and storage design. Only the finest quality materials and hardware will be used. Many structures will contain multiple rooms designed for specific purposes, such as libraries, wine rooms, theaters, reception areas, gift wrapping rooms, craft rooms, recording studios, etc. These rooms will be individually designed for the owner with only the finest materials and craftsmanship. Minimum ceiling height for most class 11A structures will exceed 12 feet in height.Overall,Class 11A interiors will be characterized by extraordinary levels of design, detail, and luxury. Class 11B Class 11B structures exemplify the very finest quality of workmanship, with the very finest, superior quality luxury materials and workmanship. At a minimum, Class 11B structures will incorporate the features and qualitative aspects of an 11A structure with additional levels of refinement and luxury. Although the Class 11B represents the use of the very finest luxury materials and workmanship for home construction, it does not represent the highest cost for residential construction. Nearly every aspect of a Class 11B structure will utilize superior grade luxury materials and craftsmanship. Rooflines of Class 11B homes will typically be highly complex and steep in design with superior grade materials. Exterior design will be highly unique with extensive and superior levels of fenestration detail.Turrets, bay windows, non- standard angles, and complex architecture are very common. The interior of Class 1113 will exemplify the very finest quality of workmanship, with the very finest, superior quality luxury materials and workmanship. At a minimum, Class 11B structures will incorporate the interior features and qualitative aspects of an 11A structure with additional levels of refinement and luxury. Use of multiple textures on walls such as plaster, wood paneling, stone/tile walls,etc. is common. Extensive levels of superior, luxury grade paneling, trim, and molding will be present in all main areas. Ceilings will receive superior grade design with only the very finest of materials. Staircases may have multiple curves, including "floating staircases" with superior grade hardware, handrails, and balusters. Arched entries with extensive ceiling treatments into rooms and hallways are common. Use of one of a kind and historically significant materials or fixtures is common. 130 CLASS 11C Class 11C structures do not appear frequently and has many variations in specifications and installation of special features. In most cases the very best possible materials have been used with a tendency toward the elaborate. This type of house has been especially designed by an architect to meet the owners' requirements and will contain many special features.The house will have been built under architectural supervision by a good contractor, using the best type of labor available. Use of class 11C should be limited to residences that exceed the base cost of Class 11B by the addition of extensive amounts of fixtures and accessories that are not covered in the basic cost calculations for that class. Class Special Price (SP) Use of Special Price Class should be limited to residences that exceed the base cost of Class 11B by the addition of extensive amounts of fixtures and accessories that are not covered in the basic cost calculations for that class. 131 AREAS CODES FOR PRICING SEGMENTS Living Area's Code % Of Base Price First Floor MA 100 Attached Addition MAAA 100 Attached Addition MAA50 50 Attached Addition MAA66 66 Attached Addition MAA75 75 Game Room MAGM 100 Bonus Room MABR 100 Basement MABA 100 MA2 94% ALL 10'S,3,3E,4,4E,ALL 5'S MA2 90% 7,7E,8,8E,9,9E MA2 100% 1,1E,2,2E,6,6E,11,1 IA,11B MA3 94% ALL 10'S,ALL 5'S MA3 90% 7,7E,8,8E,9,9E MA3 100% 1,1E,2,2E,3,3E,4,4E,6,6E,11,1 IA,IIB MA4 90% 10D,10DE,11,11A,118 Barn BRN 100 Stables STB 100 Pool PL 100 Arena ARN 100 Outdoor Kitchen ODKIT FLAT PRICE Storage STG 100 LIVING AREA'S A T A PERCENT OF BASE PRICE Living Area's New Code % Of Base Price Game Room GM75 75 Game Room GM66 66 Game Room GM50 50 Basement BA75 75 Basement BA50 50 DETACHED LIVING AREA'S Living Area's New Code % Of Base Price Detached Living Quarters DL66 66 Detached Living Quarters DL50 50 Living Quarters LQ66 66 Living Quarters LQ50 50 Bath House BH50 50 Bath House BH33 33 PORCHES, CARPORTS, DECKS New Code % Of Base Price Balcony, Open Porch BL,OP 15 Balcony, Open Porch BL25,OP25 25 Balcony, Open Porch BL10,OP10 10 132 Carports, Decks CP,DK 15 Carports, Decks CP25,DK25 25 Carports, Decks CP10,DK10 10 Gazebo GZ 15 Gazebo GZ25 25 Gazebo GZ10 10 Glass Porch, Porch Area GP,PA 33 Glass Porch, Porch Area GP66,PA66 66 Glass Porch, Porch Area GP50,PA50 50 Glass Porch, Porch Area GP251PA25 25 GARAGE & STORAGE New Code % Of Base Price Attached Garage AG 33 Attached Garage AG25 25 Storage SA 33 Storage SA50 50 Storage SA25 25 Enclosed Garage EG 40 Enclosed Garage EG75 75 Enclosed Garage EG33 33 Detached Garage DE33 33 Detached Garage DE25 25 133 EXAMPLE OF VALUE CALCULATION: This is an example of a class 8 house, total living area of 3,200. The house has 2 stories, an attached 2 car garage, and covered porches. MA 2,400 (1st floor) MA2 800 (2nd floor) AG 528 (attached garage) OP 160 (covered porch) Codes Area Unit Price Dep. NBHD MA 2,400 x $ 50.25 x 98% x 105% — $ 124,097 MA2 800 x $ 45.23 x 98% x 105% = $ 37,233 AG 528 x $ 16.58 x 98% x 105% = $ 9,008 OP 160 x $ 7.54 x 98% x 105% = $ 1,241 Value of Improvement $ 171,580 Land Value 32,000 Total Indicated Value of Property $ 203,580 134 CLASS 1740 RESIDENTIAL TENNIS COURTS Class 1740RN No Contributory Value 1740RB Basic(court only) 1740RA Average (court&fence) 1740RG Good(court, fence,lighting) 1740RE Excellent(court, fence,lighting) Note: Tennis Courts classes 1740, 1740A, and 1740B will be used for commercial only. CLASS 1750 RESIDENTIAL SWIMMING POOL Class 1750B (Basic) 1750A(Average) 1750G(Good) 1750E(Excellent) 1750S (Superior) Minus(-) can be applied to any class for pools in poor condition. Add for therapeutic pool Part E. Appraisal of Manufactured Homes (Mobile Homes) As defined by International Association of Assessing Officers(IAAO) "Standard on Automated Valuation Models (AVMs) a manufactured home is a residential structure built in a factory. Construction standards for manufactured housing are controlled and monitored by the Department of Housing and Urban Development(HUD). The Residential Department values all mobile homes occupied as residences. This includes mobile homes located in mobile home parks, subdivision lots or abstract tracts.Mobile homes used for commercial purposes or mobile homes held as inventory for sale would not be valued by the Residential Department. Locating mobile homes are done through inventories,park rosters, installation permits,the Texas Department of Housing and Community Affairs(TDHCA),homestead applications, and Department of Transportation report on movement of mobile homes in and out of Denton County. 135 2.41 MH Park Inventories Numerous areas across the county have been identified as subdivision developments. Most of these are platted,but some remain as un-platted abstract tracts. Appraisal cards are printed on every account in the subdivision or abstract. Each account is checked to see if a mobile home has been removed or moved in. Label and serial numbers are checked and recorded. Any changes are so noted on the appraisal card and the changes are processed. 2.42 Park Rosters At the end of each year DCAD mails to each park manager and park owner a list(park roster)of DCAD's current ownership and location of mobile homes in the park. A letter is sent with each park roster requesting an update on ownerships. The park managers/owners are asked to supply any changes that had occurred during the year in the ownership of the mobile home,new ones moved in or out. After the first of January and throughout the spring months,an appraiser will field check each park. The manager's information is used to verify mobile home removals and new mobile homes moved into the park. When a roster is not returned to DCAD with the requested information an appraiser will first notify the park manager then do a complete inventory of that park. 2.43 Installation Permits, TXDOT movement reports County and city permits, Texas Department of Housing and Community Affairs and Texas Department of Transportation are used to discover mobile homes in areas inside and outside mobile home parks. City and county permits are obtained through copies of the permit by either electric means or visiting that entity. Information on the permits such as situs and/or legal descriptions are used to locate the correct accounts. The permit is then forwarded to the appraiser who then field checks the account. Texas Department of Housing and Community Affairs(TDHCA)website; http://mhweb.tdhca.state.tx.us/mhweb/title_view.jsp and Texas Department of Transportation website; http://txpros.txdot.gov/mhreports.aspx are used to update the districts' records of ownership and movement of mobile homes. 2.44 Taxpayer Property owners are also a source of ownership or movement of the mobile home. If the mobile home is sold the new owner and address are required to make the change of ownership. Homestead applications are a very good source of information on ownership and movement. The landowner may request to render the mobile home as an Improvement Only account to be set up in the mobile home owner's name rather than placed on his land account. 136 2.45 Field Inspection Data is collected and recorded on the size of the mobile home, actual age, effective age, and the label number of the mobile home. Mobile homes manufactured after 1979 are required to have the label number on the exterior of the mobile homes. The label number is also used to identify ownership using TDHCA website. Label and serial numbers are added to the account if either is located. It is also helpful to note any distinguishing features about the home, such as color. 2.46 Classification of Mobile Home Classifications for mobile homes are developed using Marshall and Swift's basic descriptions. Classifications begin with the lowest quality construction to the highest quality construction for both single and double wide mobile homes. Mobile home classes for DCAD range from MS1 to MS4 for single wide and MD1 to MD4 for double wide. Using the DCAD appraisal manual mobile homes are assigned a class based on the quality of construction as defined in each class. Variations may occur using plus and minus techniques to each class. Any other structures present would be measured,classed and added to the mobile home account. These could include porches, carports, decks, detached garages, and outbuildings. Anything attached to the main structure will be values using segment codes that are set to value based on a percentage of the main area class. If the appraiser cannot get to the mobile home due to dogs, locked gates, inaccessible roads, or for other reasons, all information must be estimated. While in the field,the appraiser needs to determine or verify our mobile home ownership/address and all data. This could be done through conversations with owners,renters, or neighbors. Mailboxes can also be used for a name. 2.47 Creation of Improvement Only When the mobile homeowner does not own the land on which the mobile home is situated and is carried as personal property with TDHCA the mobile home is created as an"Improvement Only"account with no land segment included. This applies to all units in a mobile home park since they are located on leased spaces and for mobile homes located on leased land. This would also include accounts where the owner has a contract for deed. In this situation the land account is carried in the land owner's land until such time as a warranty deed is issued. 137 A. Legal Description Each park, subdivision, or abstract have an assigned subdivision code number or abstract number. The new account is coded with the number in which the improvement is located. The legal description must match the land account's legal description exactly except in the case of mobile home parks. The park accounts will have the park name and space number as the legal description. Along with the legal description the term"Imp Only" is added. The serial number(if located)and HUD number is entered into the account for all mobile homes whether listed as personal property or as real property. B. Owner and Entity Information The owner name and a complete address must be complete on the appraisal card. Also, entity codes must be assigned for each account. To determine which entity codes are needed for the county, school, city, or special districts,the appraiser must refer to and match the codes on the land account. C.Avoiding Duplication of Accounts When creating new mobile home accounts the appraiser must make sure he/she is not duplicating the mobile home. The mobile homes could have been located in a different jurisdiction and then moved to a new location. To avoid duplication queries can be run using the label and/or serial number to locate duplication in the data. 2.48 Maintenance Improvement Only Accounts All Mobile Home accounts are to be set up as they exist on January 1 st in the title owner's name and at their location on that date. The Texas Department of Transportation(TxDot),per House Bill 785, provides each appraisal district with a list of mobile home movements that have occurred within that county. Access to this information is through TxDot's website; http://txpros.txdot.gov/mhreports.aspx. Mobile homes are not sold in the same manner as real estate.No deeds are filed when a transfer occurs. Mobile homes are moved in and of the area throughout the year. Often information on ownership and location is submitted after the rolls are certified. hi these cases ownership changes and movement of mobile homes are updated by supplemental changes after roll certification. If the owner defaults on their mobile home loan and is repossessed by the lienholder the account is transferred into the lienholders' name. If the mobile home was removed before January 1 st,the account is deleted. If the mobile home owner before January 1 st, gets deeded title to his land after a contract is paid off,the Improvement Only account needs to be deleted. The mobile home would be placed on the land account. 138 2.49 Mobile Home on Land Accounts If the mobile home owner has the warranty deed on his land account,the mobile home is combined on this land account. Mobile homes provide a unique situation. The lien for the land can be different from that of the mobile home. If the whole or parts of the property are foreclosed upon at the request of the new owner the mobile home will be split from the land account. The account will be split for as many years allowable by the Texas Property Tax Code. The land account will be supplemented and a corrected notice of appraised value will be mailed for the mobile home for the years involved. This procedure will only occur when the liens are separate. 2.50 Mobile Home Valuation In mass appraisal,the classification system is utilized to value properties. The eight classes of mobile homes(see Appraisal Manual)each generates a per square foot unit price. The class is determined by quality. Each mobile home is depreciated based on its effective age and condition. A mobile home depreciation schedule is used in the valuation(see Appraisal Manual). A. Cost The cost schedule,based on construction of similar improvements, is developed from information gathered from reliable sources such as Marshall& Swift, a national publication of building cost, and using the current N.A.D.A.Mobile/Manufactured Housing Appraisal Guide. The cost approach consists of calculating the replacement cost new for each improvement and then deducting for normal depreciation. The causes of accrued depreciation fall into three general categories: physical deterioration,functional obsolescence,and external(economic obsolescence). Physical deterioration and functional obsolescence are inherent in the property itself,whereas external(economic) obsolescence is the result of outside forces. Physical deterioration is the loss in value due to the wear and tear of the property. There are curable and incurable forms of physical depreciation. It depends on whether the value added by curing them exceeds the cost to cure (it is not economically prudent to cure the condition). Effective age is the number of years of age of the improvement as indicated by its condition. If the improvement has been well maintained, its effective age may be less than the actual age; if there has been poor maintenance, it may be greater. The appraiser based on inspections determines this. 139 Functional Obsolescence is the overall usefulness and desirability of a property. Functional obsolescence is the loss of value in a property improvement due to changes in style,taste,technology,needs, and demands. It exists where property suffers from poor or inappropriate architecture,poor floor plans,room sizes, etc. External Obsolescence is the loss in value caused by outside forces such as in the highest and best use of a property due to market shifts or governmental actions,restrictions on income,zoning,neighborhood decline, etc. This can influence both land and improvement. Once the estimated depreciated improvement value is determined it is then added to the land value giving an estimated total property value. The cost approach is used as a comparison to the market schedules. V=LV+((CN—D) (Value=Land Value+(Cost New—Depreciation) 65,000= $15,000+($62,500—20%) B. Market DCAD mobile home schedules are cost driven. Sales analysis is used in areas where mobile home and land are sold together as one unit. C. Sales Information All sales information collected is the responsibility of the Land and Sales Department. Residential improved sales are collected from a variety of sources including,but not limited to,district questionnaires sent to buyer and seller, field discovery,protest hearings,various sales vendors,builders,and local real estate professionals. A system of type, source, and validity codes was established to define salient facts related to a property's purchase or transfer. ISD,neighborhood, and subdivision sales reports are generated as an analysis tool for the analyst in the development of value estimates. Sales information is stored in the mainframe database. D. Depreciation A depreciation schedule has been built and entered in the computer. The actual age, if known,is listed on the account and the field appraiser estimates the effective age. Based on the field appraisers' estimates the percent good is pulled from the table based upon the effective age. DCAD residential depreciation tables are built using Marshall&Swift depreciation tables. E. Calculation The square footage determined from the field inspection is then multiplied by a per square foot unit price to indicate the RCN(Replacement Cost New) for the mobile home. The RCN is then multiplied by a physical percent to give a depreciated value. 140 CLASS MS1 MOBILE HOME CONSTRUCTION STANDARDS: Meets minimum requirements: Older Homes (constructed prior to 1976)may be below minimum requirements. QUALITY/DESIGN: Basic, inexpensive quality. No special features. No attention to details. EXTERIOR COVERING: Prefinished aluminum panels, exposed screw fasteners. Some with vinyl covering. No trim. ROOF: Flat pitch. Light gauge galvanized steel, loose fitting. TOW BAR: Non-detachable - attached to frame. WINDOWS: Crank louvered or awning type. Non-removable screens. Minimum fenestration. No window trim. DOORS: Entrance - Sliding glass or hollow metal. Back-hollow metal, swing out, no windows. WIDTH: Single wide - Typically 10' or 12'. 141 CLASS MS2 MOBILE HOME CONSTRUCTION STANDARDS: Meets or exceeds minimum requirements. QUALITY/DESIGN: Average quality. Few, if any, special features. EXTERIOR COVERING: Often prefinished aluminum with concealed fasteners. Some with masonite paneled siding. Some trim on front side. ROOF: Medium pitch. Medium gauge galvanized steel, snug fitting. TOW BAR: Attached to frame - some can be unassembled. WINDOWS: Crank awning or horizontal sliding, few double hung. Removable screens. Minimum to adequate fenestration. Color coordinated panels for trim. DOORS: Entrance - sliding glass and metal or wood, with window. Back-metal or wood, swing in or out, with window. WIDTH: Single wide - Typically 12' or 14'. 142 CLASS MS3 MOBILE HOME CONSTRUCTION STANDARDS: Exceeds all minimum requirements. QUALITY/DESIGN: Above average quality. Some special features (custom), attractive architectural design. EXTERIOR COVERING: Usually wood siding, as with flush-type masonite paneled siding. Some trim on all sides. ROOF: Gable pitch. Usually average to good asphalt shingles. Some with heavy gauge galvanized steel, tightly fitting. Some slit-roof. TOW BAR: Detachable. WINDOWS: Double hung windows (some with bay across front). Removable screens. Adequate fenestration. Two-tone, contrasting material for trim. DOORS: Entrance -recessed, wood(house-type). Back-wood with window, swing-in. WIDTH: Single wide - Typically 14'. 143 CLASS MS4 MOBILE HOME CONSTRUCTION STANDARDS: Exceeds all minimum requirements. QUALITY/DESIGN: Excellent quality. Many special features. Best in design, workmanship and materials. EXTERIOR COVERING: Like conventional, house-type coverings, as shiplap, clapboard, stucco, brick, board and batten. Usually wood siding. Trim/decor on all sides. ROOF: Usually gable pitch: or, other conventional house type. Usually best asphalt shingles. TOW BAR: Detachable. WINDOWS: Double hung, often dual pane. Removable screens. Ample fenestration. Decorative, special trim(as, for example, shutters) on all windows. DOORS: Recessed, wooden solid core. Some with double entry. WIDTH: Single wide - Typically 14' or 16' 144 EXAMPLE OF VALUE CACULATION: This is an example of a class MS2 mobile home(14' x 70'),total living area of 980 sgft. The mobile home does not have a porch or garage. The mobile home is estimated to be 74%good. MA 980 x $31.45 x 74% = $22,807 Land Value + $15,000 Total Indicated Value of Property = $37,807 CLASS MD1 MOBILE HOME CONSTRUCTION STANDARDS: Meets minimum requirements: Older homes (constructed prior to 1976)may be below minimum requirements. QUALITY/DESIGN: Basic inexpensive quality. No special features, no attention to details. EXTERIOR COVERING: Prefinished aluminum panels, exposed screw fasteners. Some with vinyl covering. No trim. ROOF: Gable pitch. Light gauge galvanized steel or low-cost asphalt shingles. No overhead. WINDOWS: Crank louvered or awning type. Non-removable screens. Minimum fenestration. No window trim. DOORS: Entrance - sliding glass or metal, Back- metal, swing out, no windows. WIDTH: Double-wide. 145 CLASS MD2 MOBILE HOME CONSTRUCTION STANDARDS: Meets or exceeds minimum requirements. QUALITY/DESIGN: Average quality. Few, if any, special features. EXTERIOR COVERING: Prefinished aluminum with concealed fasteners or masonite paneled siding. Some trim on front side. ROOF: Gable pitch. Low-cost to average asphalt shingles. Small overhang. WINDOWS: Often double hung, some crank awning or horizontal sliding. Removable screens. Minimum to adequate fenestration. Color coordinated panels for trim. DOORS: Entrance - Sliding glass and metal or wood, with window. Back- Metal or wood, swing in or out, with window. WIDTH: Double-wide. 146 CLASS MD3 MOBILE HOME CONSTRUCTION STANDARDS: Exceeds all minimum requirements. QUALITY/DESIGN: Above average quality. Some special features (custom), attractive architectural design. EXTERIOR COVERING: Usually wood siding, as with flush-type masonite paneled siding. Some trim on all sides. ROOF: Gable pitch. Good asphalt shingles. Good overhang. WINDOWS: Double hung windows (some with bay). Removable screens. Adequate fenestration. Two-tone, contrasting material for trim. DOORS: Entrance -Recessed, wood(house-type). Back-Wood with window, swing in. WIDTH: Double-wide. 147 CLASS MD4 MOBILE HOME CONSTRUCTION STANDARDS: Exceeds all minimum requirements. QUALITY/DESIGN: Excellent quality. Many special features. Best in design, workmanship and materials. INTERIOR COVERING: Like conventional house-type coverings, as shiplap, clapboard, stucco, brick, board and batten. Usually wood siding. Trim/decor on all sides. ROOF: Usually gable pitch, or other conventional house-type. Usually best asphalt shingles. Some slate, shake or tile. WINDOWS: Double hung,usually dual pane. Removable screens. Ample fenestration. Decorative, special trim (as, for example, shutters) on all windows. DOORS: Recessed, wooden solid core. Some with double entry. WIDTH: Double-wide. 148 EXAMPLE OF VALUE CALCULATION: This is an example of a class MD3 mobile home, total living area of 1,440. The mobile home has a detached garage and covered porches. MA 1,440 AG 528 (attached garage) OP 160 (covered porch) Codes Area Unit Price Dep. NBHD MA 1,440 x $ 34.31 x 98% x 105% = $ 50,839 DE25 528 x $ 8.58 x 98% x 105% = $ 4,661 OP 160 x $ 5.15 x 98% x 105% = $ 847 Value of Improvement $ 56,347 Land Value 18,000 Total Indicated Value of Property $ 74,347 149 MH AREA'S TO ESTABLISH PRICE PER SQ.FT. % Of Base Living Area's New Code Price Main Area MA 100 Attached Addition MAAA 100 LIVING AREA'S AT A PERCENT OF BASE PRICE % Of Base Living Area's New Code Price Attached addition MAA50 50 Attached addition MAA66 66 Attached addition MAA75 75 PORCHES, CARPORTS, DECKS % Of Base New Code Price Open Porch OP 15 Open Porch OP25 25 Open Porch OP10 10 Carports, Decks CP,DK 15 Carports, Decks CP25,DK25 25 Carports, Decks CP10,DK10 10 Glass Porch, Porch Area GP,PA 33 Glass Porch, Porch Area GP66,PA66 66 Glass Porch, Porch Area GP50,PA50 50 Glass Porch, Porch Area GP25,PA25 25 150 GARAGE & STORAGE % Of Base New Code Price Attached Garage AG 33 Attached Garage AG25 25 Storage SA 33 Storage SA50 50 Storage SA25 25 Enclosed Garage EG 40 Enclosed Garage EG75 75 Enclosed Garage EG33 33 Detached Garage DE75 75 Detached Garage DE33 33 151 EXAMPLE OF VALUE CALCULATION: This is an example of a class MD3 mobile home, total living area of 1,440. The mobile home has a detached garage and covered porches. MA 1,440 AG 528 (attached garage) OP 160 (covered porch) Codes Area Unit Price Dep. NBHD MA 1,440 x $ 34.31 x 98% x 105% = $ 50,839 DE25 528 x $ 8.58 x 98% x 105% = $ 4,661 OP 160 x $ 5.15 x 98% x 105% = $ 847 Value of Improvement $ 56,347 Land Value 18,000 Total Indicated Value of Property $ 74,347 152 Part F. Sales and Research 2.51 Sales and Research Department The Sales and Research Department is responsible for several functions of the Denton Central Appraisal District(DCAD). One of the main responsibilities is the collection and processing of real estate sales information. The quality of the process and execution of this responsibility is vital to the integrity of establishing the appraisal roll. Gathered sales information is used to establish class schedules and verify that values placed on Denton Central Appraisal District appraisal rolls are as accurate as possible. Another important function of the Sales and Research Department is responding to public request, comments and complaints. This includes open records requests and dealing with comments and/or complaints from the public in regard to appraisal district operations. The Supervisor in the Sales and Research Department is typically responsible for overseeing and coordinating appropriate responses to open records requests and a taxpayer liaison officer(TLO)is generally responsible for responding to comments and/or complaints. Overviews, guidelines,and procedures demonstrated in this section are followed by the Sales and Research Department of the Denton Central Appraisal District. 2.52 Education and Training All employees shall have the knowledge and expertise to do their job. Each employee will have a minimum educational standard required for their position. In addition,DCAD will supply the following: A. On the job training—each employee will receive training on procedures,policy,and equipment by their supervisor and other employees in similar positions. B. State required education and registration—all employees so required will achieve and maintain their own educational and registration requirements. C.Additional training and education—from time to time, additional training and education will be required to enhance job performance,knowledge and expertise. Employees will be expected to perform to a minimum standard. 153 2.61 Introduction An appraisal management policy should reflect regulatory obligations,mandate due diligence, ensure conformance to professional standards,generate current and meaningful valuations, and establish criteria for a thorough review process. DCAD subscribes to the standards of the International Association of Assessing Officers (IAAO)regarding its appraisal practices and procedures. DCAD also subscribes to the standards promulgated by the Appraisal Foundation known as the Uniform Standards of Professional Appraisal Practice(USPAP). A current copy of the USPAP manual is on file at DCAD. The department is responsible for completing mass appraisal assignments in a timely manner. A. Definition of Appraisal Responsibility The Sales and Research Department of the Denton Central Appraisal District is responsible for ascertaining and processing sales information to assist appraisers in developing fair and uniform market values for all real accounts in DCAD. B. Legal and Statutory Requirements The provisions of the Texas Property Tax Code (TPTC)and relevant legislative measures involving appraisal administration and procedures control the work of the appraisal district. The district is responsible for appraising property on the basis of its market value as of January 1 for ad valorem tax purposes for each taxing unit that imposes ad valorem taxes on property in the district. DCAD typically reappraises property on an annual basis but is required to do so every three years per the Texas Property Tax Code. C. Administrative Requirements An appraisal management policy should reflect regulatory obligations,mandate due diligence, ensure conformance to professional standards,generate current and meaningful valuations, and establish criteria for a thorough review process. DCAD subscribes to the standards of the International Association of Assessing Officers (IAAO)regarding its appraisal practices and procedures. DCAD also subscribes to the standards promulgated by the Appraisal Foundation known as the Uniform Standards of Professional Appraisal Practice(USPAP). A current copy of the USPAP manual is on file at DCAD. D. Appraisal Resources Personnel—The Sales and Research Department staff consists of a manager, supervisor,research specialist, coordinator specialist/liaison officer and support position. In addition,there are several part- time support positions that are utilized throughout the year. 154 Information Systems—The mainframe systems are augmented by the databases that reside as various applications on the DCAD Local Area Network(LAN). DCAD offers a variety of systems for providing property owners and public entities with information services. Appraisal Support fields many of the public's questions or redirects them to the proper department. Computer terminal stations are located in the customer service area for the public's use. Access to appraisal data is also available through various sources such as the district's website 2.62 Sales and Statistical Analysis B. Sales Information The Sales and Research Department is responsible for the collection and processing of all sales information. Collection is done by a variety of sources including,but not limited to,district questionnaires/surveys sent to buyers and sellers,real estate brokers and appraisers,builders,developers, field discovery,protest hearings, informal settlement conferences, adjoining appraisal districts,the State of Texas Comptroller's Office,and private sale service providers/vendors, such as local Association of Realtor's MLS,LoopNet, and CoStar. As much pertinent information as possible is gathered about the sale to help determine the quality and conditions of the sale; for example, does the sale appear to be an arm's length transaction or not. A system of type, source and validity codes has been established to help define these salient facts related to a property's purchase or transfer. Entity,neighborhood and subdivision sales reports are generated as an analysis tool for the appraisal analyst in the development of value estimates. Sales information is stored in the mainframe database. Refer to the software user's manual for software implementation. C. Statistical Analysis Appraisers in the appraisal departments perform statistical analysis annually to evaluate whether values are equitable and consistent with the market. Ratio studies are conducted on each property category, neighborhood and ISD to judge the two primary aspects of mass appraisal accuracy—level and uniformity of value. Appraisal statistics of central tendency and dispersion generated from sales ratios are available for each property category and/or neighborhood within an ISD and summarized. These summary statistics including,but not limited to,the median,the mean,the weighted mean, standard deviation, coefficient of dispersion(COD), and coefficient of variation(COV),provide the analysts an analytical tool by which to determine both the level and uniformity of appraised value of a property category and/or neighborhood basis. Review of the standard deviation, coefficient of dispersion and the coefficient of variation can discern appraisal uniformity within and between categories and ISD's. Subdivisions and/or neighborhoods are reviewed annually by the appraiser through the sales ratio analysis process. The first phase involves subdivision/neighborhood ratio studies which compare the recent sales prices with the appraised values of those properties which have recently sold. This set of ratio studies 155 affords the appraiser an excellent means of judging the present level of appraised value and uniformity of the sales. All valid sales that we are aware of are used unless the result is misrepresentative. D. Market Adjustment or Trending Factors Market adjustment factors are developed from appraisal statistics provided from ratio studies and are used to ensure that estimated values are consistent with the market. If the subdivision/neighborhood is to be updated,the appraiser uses a ratio study that compares recent sales prices of properties within a delineated subdivision/neighborhood with the properties' appraised value. The calculated ratio derived from the sum of the sold properties' appraised value divided by the sum of the sales prices indicates the subdivision/neighborhood level of value based on the unadjusted value for the sold properties. This comparison of appraised value-to-sale ratio determines the market adjustment factor for each subdivision/neighborhood. This market adjustment factor is needed to trend the values closer to the actual market evidenced by recent sales prices within a given subdivision/neighborhood. The market adjustment factor calculated for each updated subdivision/neighborhood is applied uniformly to all properties within a neighborhood and as needed in the subdivision. Once the market-trend factors are applied, a second set of ratio studies is generated that compares recent sale prices with the proposed appraised values for these sold properties. From this set of ratio studies,the appraiser judges the appraisal level and uniformity in both updated and non-updated subdivision/neighborhoods,and finally, for the school district as a whole. 2.63 Performance Tests B. Sales Ratio Studies The primary analytical tool used by the appraiser to measure and improve performance is the ratio study. This helps to insure that the appraised value that it produces meets the standards of accuracy in several ways. Overall sales ratios are generated for each ISD to allow the appraiser to review general market trends and provide an indication of market appreciation or depreciation over a specified period of time. Sales ratio reports are run several times prior to the setting of preliminary values as well as after finalization of appraisal values in order to catch any inaccuracies,value anomalies, or outliers. An independent test of the appraisal performance of the district is conducted by the State of Texas Comptroller's Office through the property value study. The study determines the degree of uniformity and the median level of appraisals by the appraisal district within each major category of property. The comptroller publishes a report of the study,which includes in the report the median levels of appraisal for each major category of property,the coefficient of dispersion around the median level of appraisal for each category of property, and any other standard statistical measures that the comptroller considers appropriate. 156 2.64 Data Collection Procedures Overview One of the main responsibilities of the Denton Appraisal District is to estimate the market value of each property within the jurisdiction. The integrity of the property tax is dependent on the accuracy of these estimates of market value. This is accomplished by analyzing market data to determine the price that the property being appraised would probably bring in the marketplace on the date of appraisal. Accuracy is dependent upon proper data collection,verification, adjustments of sales data and entering into computer system. Sales data should be collected,verified, and adjusted as necessary for model calibration and ratio study purposes.Verified sales are always more reliable than unverified sales. Sales information is collected and processed on a regular basis throughout the year to help appraisers in their analyses. Data Collection Sales information is collected by various methods and sources, including: questionnaires to buyers and sellers,renditions,protest hearings,realtors,fee appraisers,brokers,Title companies,builders,property managers,newspaper, attorneys, State Office, developers, adjoining appraisal districts and third-party sources such as MLS,LoopNet, and CoStar. When necessary, staff may try to contact parties involved in a sale to try to confirm the sales price and/or get additional information of details of the sale transaction. This may be done by phone calls,personal interviews,emails, or regular mail. Data collection is overseen by the Sales &Research Department supervisor. This person will coordinate with the appropriate vendors for mail out of internal sale survey letters that are sent to the buyer and seller,with third-party sources(make sure the District is current with paid subscriptions, etc.), and the gathering of sales data during the appeal process. The supervisor will work closely with the appraisal support specialist to monitor their coordination with other District departments and make sure the process is organized,has a timely flow of gathering the sales data to the entering of the data in the mainframe database. Data is gathered on a regular basis throughout the year. Sale survey letters are computer generated based on deed transfers and are typically mailed on a monthly basis. A postage paid/pre- addressed business reply envelope will accompany each letter. The data obtained from third-party sources is typically gathered on a weekly basis. Settlement Statements are often obtained during the appeal process and are considered the most reliable sales verification. Data from other sources will be gathered whenever possible throughout the tax year. A quality control process exists through supervisory review of the work and procedures. The supervisor is charged with the responsibility of ensuring that appraisers and support specialist are following proper procedures, identify and address training issues and provide uniform training throughout the department. Once data is gathered,the next phases begin with the verification/analysis and entering of data. It is vital that the gathering, analyzing and entering of sales data is performed at a high quality level so that the appraisers have the best data available to help them during the appraisal and appeal processes. 157 Data Verification Verification of sales data is an important aspect in the data collection process. It is important to remember all sales should be considered valid unless there is sufficient documentation to prove differently. While it is imperative that sales be verified uniformly and accurately,it is also important to process and verify sales in a timely manner so they are available for analysis. Sales should be trimmed for outliers during the statistical phase,not during the verification phase of mass appraisal. Useful sales information gathered should include the following when possible: • Full consideration(actual sales price) • Names of buyer and seller • Addresses,phone numbers, and other contact information of buyer and seller or their legal designee • Relationship of buyer and seller(if any) • Legal description,address, and parcel identifier • Type of transfer • Method of marketing(ex. Owner or Broker) • Time on the market • Type and terms of financing • Personal property(if any, and if so,how much) • Business value attributed(if any) • Date of Sale • Deed Instrument number • Closing costs involved(who paid,etc.) • Other—any information the buyer, seller or contact believes is important Sales should be verified to determine whether they reflect the market value of the real property transferred. Specific objectives for sales verification include but are not limited to the following: • Sale prices reflect only the market value of the real property transferred and not the value of personal property, financing,or leases. 158 • Sales occurred during the time frame being tested or modeled. • Sales are excluded only when they fail to meet the requirements of an open-market, arm's length transaction. All sales meeting the definition of market value should be entered as valid transactions unless one of the following two conditions exists: • Data for the sale are incomplete,unverifiable, or suspect. • The sale fails to pass one or more specific tests of acceptability. All sales should be considered as valid sales unless sufficient information can be documented to show otherwise. Reason codes or comments may be established for valid and invalid sales for both ratio studies and model calibration. Staff should use their judgment in determining if sales are valid or invalid,but they should not be arbitrary. Importance of Sales Verification Sales data are needed for the valuation process and for sales ratio studies. The reliability of any valuation model or sales ratio study depends on the quality and quantity of its data. Sales data should be collected, edited, and adjusted(if necessary)to obtain valid indicators of market value. If there is a question or concern about a sale, staff should try to contact a party to the sale to verify or clarify the question or concern. Staff should be familiar with sales involving: • Adjoining property owner • Auctions • Internet marketing • Sale leasebacks • Personal property • Property characteristic changes • Related parties • Sealed bids • Uninformed buyers and sellers • IRS 1031 exchanges 159 • REITs • Trades • Financial institutions • Short sales In regard to validity, sales that may be considered invalid are: • Sales involving government agencies • Sales involving charitable,religious,or educational institutions • Sales involving financial institutions as buyer or seller • Sales between relatives or between corporate affiliates • Sales settling an estate • Forced sales resulting from a judicial order • Sales of doubtful or questionable title Staff should use careful judgment in their determination before coding sales as invalid. Entering Sales Information Once sales data is collected by staff,the next phase begins with the entering of the data in the computer system. Entering includes the actual entering of sales information with proper coding as well as scanning the sales verification information into the appropriate property account. This electronic file will be permanently stored in the account image location so that confirmation of the sales price is readily attainable. The District has a documentation form for staff to use when entering sales information. Sales &Research staff will either enter the information/documentation in the mainframe database themselves or will give to the appraisal support specialist to enter in the database(and excel spreadsheet if appropriate). Proper coding and entering is essential to maintain a consistency in the quality and integrity of sales data to help appraisers in their analysis and ratio studies. A system of type, source and validity codes was established to define salient facts related to a property's purchase or transfer. Sales is not only stored in the mainframe database but also sometimes in excel spreadsheets. The following is a set of established codes and types that are utilized by the Denton Appraisal District to provide consistency in entering sales data: 160 INSTRUCTIONS/CODES TO USE FOR ENTERING SALES UNDER THE "SALE CONFIRMATION"SCREEN IF"SOURCE"OF SALES INFORMATION IS FROM:------------------------ "SOURCE"CODE TO USE COSTAR CO' M LS M SETTLEMENT STMT OR ANY OTHER TYPE OF CLOSING DOC SS SALES LETTER SL FEE APPRAISAL/APPRAISER A BROKER B CONFIDENTIAL (AT TAXPAYER'S REQUEST) C _ ANY OTHER SOURCE OTHER UNDER THE "SALE INFORMATION"SCREEN IF"SALE TYPE"IS FROM ANY OF THESE----------------------------------- "SALE TYPE"CODE TO USE MLS/COSTAR/LOOPNET Cl(CONFIDENTIAL WITH IMPROVEMENTS)CL CONFIDENTIAL LAND ONLY) CONFIDENTIAL (AT TAXPAYER'S REQUEST) C (CONFIDENTIAL) For"confidential sales,always remember to check the"confidential"box. SALES LETTER I (FOR IMPROVED SALES) L (FOR LAND ONLY SALES) SETTLEMENT/CLOSING/HUD STATEMENT I (FOR IMPROVED SALES) L (FOR LAND ONLY SALES) APPRAISER OR COMPS USED IN A FEE APPRAISAL I (FOR IMPROVED SALES) L (FOR LAND ONLY SALES) BROKER I (FOR IMPROVED SALES) L (FOR LAND ONLY SALES) FEE APPRAISAL(ON SUBJECT PROPERTY) A IMPROVEMENT"PARTIAL COMPLETE" IPC ISRT (IMPROVEMENT"SHORT SALE") CISRT (CONFIDENTIAL IMPROVEMENT"SHORT SALE") LA (LAND APPRAISAL) LC (LAND CONFIDENTIAL) FOR LAND ONLY SALES,ALWAYS BE SURE TO CHECK THE"LAND ONLY SALE"BOX IN THE"SALE INFORMATION SCREEN" IF THE SALE IS A FORECLOSURE:------------------------------ "SALE TYPE" CODE TO USE FI (FORECLOSURE WITH IMPROVEMENTS) NON CONFIDENTIAL FL (FORECLOSURE LAND ONLY) NON CONFIDENTIAL FCI (FORECLOSURE CONFIDENTIAL WITH IMPROVEMENTS) FCL (FORECLOSURE CONFIDENTIAL LAND ONLY) TYPE OF SALE-------------------------------------------------------- "RATIO"CODE TO USE ARMS LENGTH OR FORECLOSURE SALES V(VALID) ATYPICAL SALES,IE:(FAMILY/RELATED PARTIES) I (INVALID) FI(FORCLOSURE INVALID) U(UNCONFIRMED) The appraisal support specialist is responsible for organizing incoming and outgoing sales documentation and fee appraisal reports/data. The specialist will coordinate with other departments to make sure sales and fee appraisal documentation is gathered and entered properly. The Sales &Research Supervisor is also responsible to oversee the collection and entering process of sales data and work closely with the appraisal support specialist. Sale Adjustments Sales should be adjusted to represent only the value of the real property as of the assessment date. Adjustments to the sale price may be considered or needed if any of the following exist: • Assumptions(non-market rates) • Closing costs (if atypical or seller paid) 161 • If included delinquent taxes paid by buyer • Special financing(non-market rates or terms) • Gift programs • Personal property included in sale • Repair allowances • Time • Business value (goodwill) This is especially true for nonresidential properties. The real property tax is based on the market value of real property alone as of a specific date. This value may not be the same as investment value and should not include the value of personal property or financing arrangements. If adjustments for more than one purpose are to be made,they should be made in the following order: • Adjustments that convert the price to a better representation of the market value as of the date of sale. • Adjustments that develop or isolate the price paid for taxable real property. • Adjustments for differences in market value levels between the date of sale and the date of analysis (time adjustments) Time adjustments should be based on market analysis and be appropriately supported. Acceptable time adjustment techniques are as follows: • Tracking sales-to-appraisal ratios over time • Including date of sale as a variable in regression or feedback models • Analyzing resales • Paired sales analysis On all adjustments,the Denton Appraisal District will use appropriate and accepted methods as set forth in the standards of the International Association of Assessing Officers (IAAO)and/or the Uniform Standards of Professional Appraisal Practice(USPAP). 162 2.65 Procedures for Analyzing and Adjusting Sales Prices One of the primary responsibilities of the Denton Appraisal District is estimating the market value of each property within the jurisdiction. The integrity of the property tax is dependent on the accuracy of the estimates of market value established by the Appraisal District. This is accomplished by analyzing market data to determine the price that the property being appraised would probably bring in the marketplace on the date of appraisal. Sales data analysis ensures that only sales that meet the definition of market value and that have been appropriately adjusted(if needed)are used in developing these estimates of market value. Accuracy is dependent upon proper verification and adjustment of sales data. Once sales data is collected, appraisers and appraisal support specialist are required to analyze the source of the sales price, terms and conditions of the sales price (if possible),motivations of the sales price (if possible) and any other factors that could influence the validity of the sales price. This requires reviewing the source and making contact with the parties involved in the sales transactions to ascertain more details of the sale or clarify conditions of the sale. This can be done by phone calls,written request,email or personal interviews. Sale Adjustments Sales should be adjusted to represent only the value of the real property as of the assessment date. Adjustments to the sale price may be considered or needed if any of the following exist: • Assumptions(non-market rates) • Closing costs (if atypical or seller paid) • If included delinquent taxes paid by buyer • Special financing(non-market rates or terms) • Gift programs • Personal property included in sale • Repair allowances • Time • Business value (goodwill) This is especially true for nonresidential properties. The real property tax is based on the market value of real property alone as of a specific date. This value may not be the same as investment value and should not include the value of personal property or financing arrangements. 163 If adjustments for more than one purpose are to be made,they should be made in the following order: • Adjustments that convert the price to a better representation of the market value as of the date of sale. • Adjustments that develop or isolate the price paid for taxable real property. • Adjustments for differences in market value levels between the date of sale and the date of analysis (time adjustments) Time adjustments should be based on market analysis and be appropriately supported. Acceptable time adjustment techniques are as follows: • Tracking sales-to-appraisal ratios over time • Including date of sale as a variable in regression or feedback models • Analyzing resales • Paired sales analysis On all adjustments,the Denton Appraisal District will use appropriate and accepted methods as set forth in the standards of the International Association of Assessing Officers (IAAO)and/or the Uniform Standards of Professional Appraisal Practice(USPAP). 2.66 Value Defense Procedures for Informal Meetings and Formal Hearings Informal Meetings During the appeals process,the Sales&Research Department staff will sometimes need to help out other departments. This involves informal meetings with property owners and/or authorized tax agents to discuss any errors, discrepancies of market value and/or equity, and any claims of exemptions or special valuations(agricultural use,restricted values, etc.)The informal review may be handled by mail, in person, email or telephone. The review allows for communication and mutual understanding,which will reduce the number of formal appeals. Informal reviews should incorporate the following basic steps: • Verify the parcel information • Exchange information • Record the nature of complaint • Use cost, sales or income information when appropriate to confirm property value 164 • If a value change is indicated, change the value and enter into a signed agreement • If value change is not warranted,explain proper appeal rights and procedures Appraisers in the Sales &Research Department must get written approval from an appropriate manager or supervisor to settle any property with an appraised value of$50,000,000 or higher. Formal Hearings Appraisal Review Board hearings(formal appeals) are the next step in the appeals process. Prior to the hearing,the property owner/agent should be given a copy of the evidence the appraiser plans to use in the hearing(if requested). The appraiser should be prepared to present factual information relating to the property, such as tax maps,pictures of the property, improvement drawings, etc. as well as valuation information,the cost,market and income approaches to value. If there is an equity component to the appeal,the appraiser should be prepared to present a reasonable sample of equity comparables based on sales, income, as appropriate. 2.67 Procedures for Responding to the Public Disclosure of Records The District shall comply in all respects with the Texas Open Records Act and Government Code Chapter 552. District staff shall ensure that all requests for records will be responded to timely,professionally and courteously. Any request for records that are or may be confidential by law shall be promptly transmitted to legal counsel for appropriate response. Definition of Public Information "Public Information"means information that is collected, assembled, or maintained under a law or ordinance or in connection with the transaction of official business: 1. by a governmental body; or 2. for a governmental body and the governmental body owns the information or has a right of access to it. Requests for Information The District may from time to time receive verbal or written requests for information that would not necessarily constitute a"record"of the District. This would include questions concerning procedures and practices engaged in by the District but not the subject of any written policy or rule. District staff shall endeavor to answer such requests and questions whenever possible and practical, subject to the exceptions below. 165 Staff may decline to respond to public request and questions not covered by the Open Records Act in the following instances: a. Where legal counsel determines that such information should not be disclosed. b. Where the information sought has been previously provided to the requester. c. Where the Board of Directors and the Chief Appraiser determines that a response would require an unreasonable expenditure of time or would interfere with a staff member's job duties. d. Where the information sought can be derived from written records of the District through an open records request,or by the District's public access computer terminal or website. (but in such cases,the requester will be informed of the existence and availability of such records). e. Where the Chief Appraiser has determined that the request is made for the purpose or has the effect of harassment, annoyance,interference with District operations, or other similar reasons. 2.68 Reproduction Costs of Open Records The Denton Central Appraisal District will make available records for public examination under the guidelines of the Texas Open Records Act(Texas Government Code, Chapter 552). It is not the Districts intention to deny anyone access to records that are considered"open"for public examination. Furthermore,the District upon receiving a written request from the interested party,will reproduce requested information in the original form for a reproduction fee that is recommended by the State Purchasing and General Services Commission. A. Statutory Reference 552.228. Providing Suitable Copy of Record Within Reasonable Time It shall be a policy of a governmental body to provide a suitable copy of a public record within a reasonable time after the date on which the copy is requested. 552.261. Determining Cost of Copies (a)A governmental body may not charge an excessive amount for noncertified,photographic reproductions of public records composed of pages that are legal size or smaller. (b)The cost of obtaining a standard or legal size photographic reproduction shall be an amount that reasonably includes all costs related to reproducing the record,including costs of materials, labor, and overhead,unless the request is for 50 or fewer pages of readily available information. (c)The General Services Commission shall periodically determine guidelines for the actual cost of standard size reproductions and shall periodically publish these cost figures for use by governmental bodies in determining charges under this subchapter. 166 552.262. Cost for Nonstandard Records The charge for access to public records that are comprised in a form other than standard or smaller sized pages, or that are in computer records banks,microfilm records, or other similar record keeping systems shall be set: (1)making every effort to match the charge with the actual cost of providing the record; (2)after consultation between a governmental body's officer for public records and the General Services Commission; and (3)in an amount that reasonably includes all costs related to providing the record,including costs of materials, labor, and overhead. COST OF COPIES OF OPEN RECORDS Texas Administrative Code (Title 2, Chapter 111) It will be the policy of the Denton Central Appraisal District to follow the guidelines of the office of the Attorney General when determining charges for reproductions. From time to time,the Denton Central Appraisal District will exchange information with parties outside the district office. The consideration for supplying the information will be the information we receive from the other party. Cost of Copies of Public Information from the Texas Administrative Code: (a)The charges in this section to recover costs associated with providing copies of public information are based on estimated average costs to governmental bodies across the state. When actual costs are 25% higher than those used in these rules, governmental bodies other than agencies of the state,may request an exemption in accordance with §111.64 of this title(relating to Requesting an Exemption). (b)Copy charge. (1) Standard paper copy. The charge for standard paper copies reproduced by means of an office machine copier or a computer printer is$.10 per page or part of a page. Each side that has recorded information is considered a page. (2)Nonstandard copy. The charges in this subsection are to cover the materials onto which information is copied and do not reflect any additional charges,including labor,that may be associated with a particular request. The charges for nonstandard copies are: (A)Diskette--$1.00; (B)Magnetic tape--actual cost; (C)Data cartridge--actual cost; (D)Tape cartridge--actual cost; (E)Rewritable CD(CD-RW)--$1.00; (F)Non-rewritable CD(CD-R)--$1.00; (G)Digital video disc(DVD)--$3.00; (H)JAZ drive--actual cost; (I) other electronic media--actual cost; (J)VHS video cassette--$2.50; (K)Audio cassette--$1.00; (L)Oversize paper copy(e.g.: 11 inches by 17 inches, greenbar,bluebar,not including maps and photographs using specialty paper--See also §111.69 of this title)--$.50; 167 (M) Specialty paper(e.g.: Mylar,blueprint,blueline,map,photographic--actual cost. (c)Labor charge for programming. If a particular request requires the services of a programmer in order to execute an existing program or to create a new program so that requested information may be accessed and copied,the governmental body may charge for the programmer's time. (1)The hourly charge for a programmer is $28.50 an hour,which includes fringe benefits. Only programming services shall be charged at this hourly rate. (2)Governmental bodies that do not have in-house programming capabilities shall comply with requests in accordance with§552.231 of the Texas Government Code. (3)If the charge for providing a copy of public information includes costs of labor, a governmental body shall comply with the requirements of§552.261(b) of the Texas Government Code. (d)Labor charge for locating,compiling, and reproducing public information. (1)The charge for labor costs incurred in processing a request for public information is $15 an hour,which includes fringe benefits. The labor charge includes the actual time to locate, compile, and reproduce the requested information. (2)A labor charge shall not be billed in connection with complying with requests that are for 50 or fewer pages of paper records,unless the documents to be copied are located in: (A)Two or more separate buildings that are not physically connected with each other; or (B)A remote storage facility. (3)A labor charge shall not be recovered for any time spent by an attorney, legal assistant, or any other person who reviews the requested information: (A)To determine whether the governmental body will raise any exceptions to disclosure of the requested information under the Texas Government Code, Subchapter C, Chapter 552; or (B)To research or prepare a request for a ruling by the attorney general's office pursuant to §552.301 of the Texas Government Code. (4)When confidential information pursuant to a mandatory exception of the Act is mixed with public information in the same page, a labor charge may be recovered for time spent to redact,blackout, or otherwise obscure confidential information in order to release the public information.A labor charge shall not be made for redacting confidential information for requests of 50 or fewer pages,unless the request also qualifies for a labor charge pursuant to Texas Government Code, §552.261(a)(1)or(2). (5)If the charge for providing a copy of public information includes costs of labor, a governmental body shall comply with the requirements of Texas Government Code, Chapter 552, §552.261(b). (6)For purposes of paragraph(2)(A) of this subsection,two buildings connected by a covered or open sidewalk, an elevated or underground passageway,or a similar facility, are not considered to be separate buildings. (e) Overhead charge. (1)Whenever any labor charge is applicable to a request, a governmental body may include in the charges direct and indirect costs, in addition to the specific labor charge. This overhead charge would cover such costs as depreciation of capital assets,rent,maintenance and repair,utilities, and administrative overhead. If a governmental body chooses to recover such costs, a charge shall be made in accordance with the methodology described in paragraph(3)of this subsection.Although an exact calculation of costs will vary,the use of a standard charge will avoid complication in calculating such costs and will provide uniformity for charges made statewide. (2)An overhead charge shall not be made for requests for copies of 50 or fewer pages of standard paper records unless the request also qualifies for a labor charge pursuant to Texas Government Code, §552.261(a)(1) or(2). 168 (3)The overhead charge shall be computed at 20%of the charge made to cover any labor costs associated with a particular request. Example: if one hour of labor is used for a particular request,the formula would be as follows: Labor charge for locating, compiling, and reproducing, $15.00 x .20= $3.00; or Programming labor charge, $28.50 x .20=$5.70. If a request requires one hour of labor charge for locating,compiling, and reproducing information($15.00 per hour); and one hour of programming labor charge ($28.50 per hour),the combined overhead would be: $15.00+$28.50=$43.50 x .20= $8.70. (f)Microfiche and microfilm charge. (1)If a governmental body already has information that exists on microfiche or microfilm and has copies available for sale or distribution,the charge for a copy must not exceed the cost of its reproduction. If no copies of the requested microfiche or microfilm are available and the information on the microfiche or microfilm can be released in its entirety,the governmental body should make a copy of the microfiche or microfilm. The charge for a copy shall not exceed the cost of its reproduction. The Texas State Library and Archives Commission have the capacity to reproduce microfiche and microfilm for governmental bodies. Governmental bodies that do not have in-house capability to reproduce microfiche or microfilm are encouraged to contact the Texas State Library before having the reproduction made commercially. (2)If only a master copy of information in microform is maintained,the charge is $.10 per page for standard size paper copies,plus any applicable labor and overhead charge for more than 50 copies. (g)Remote document retrieval charge. (1)Due to limited on-site capacity of storage of documents, it is frequently necessary to store information that is not in current use in remote storage locations. Every effort should be made by governmental bodies to store current records on-site. State agencies are encouraged to store inactive or non-current records with the Texas State Library and Archives Commission. To the extent that the retrieval of documents results in a charge to comply with a request,it is permissible to recover costs of such services for requests that qualify for labor charges under current law. (2)If a governmental body has a contract with a commercial records storage company,whereby the private company charges a fee to locate,retrieve, deliver, and return to storage the needed record(s),no additional labor charge shall be factored in for time spent locating documents at the storage location by the private company's personnel. If after delivery to the governmental body,the boxes must still be searched for records that are responsive to the request, a labor charge is allowed according to subsection (d)(1)of this section. (h)Computer resource charge. (1)The computer resource charge is a utilization charge for computers based on the amortized cost of acquisition,lease, operation, and maintenance of computer resources,which might include,but is not limited to, some or all of the following: central processing units(CPUs), servers, disk drives, local area networks (LANs),printers,tape drives, other peripheral devices, communications devices, software, and system utilities. (2)These computer resource charges are not intended to substitute for cost recovery methodologies or charges made for purposes other than responding to public information requests. (3)The charges in this subsection are averages based on a survey of governmental bodies with a broad range of computer capabilities. Each governmental body using this cost recovery charge shall determine which category(ies)of computer system(s)used to fulfill the public information request most closely fits its existing system(s), and set its charge accordingly. Type of System--Rate: Mainframe-410 169 per CPU minute;Midsize--$1.50 per CPU minute; Client/Server--$2.20 per clock hour;PC or LAN-- $1.00 per clock hour. (4)The charge made to recover the computer utilization cost is the actual time the computer takes to execute a particular program times the applicable rate. The CPU charge is not meant to apply to programming or printing time;rather,it is solely to recover costs associated with the actual time required by the computer to execute a program. This time, called CPU time, can be read directly from the CPU clock, and most frequently will be a matter of seconds. If programming is required to comply with a particular request,the appropriate charge that may be recovered for programming time is set forth in subsection(d)of this section.No charge should be made for computer print-out time. Example: If a mainframe computer is used, and the processing time is 20 seconds,the charges would be as follows: $10 /3 =$3.33; or$10/60 x 20=$3.33. (5)A governmental body that does not have in-house computer capabilities shall comply with requests in accordance with the §552.231 of the Texas Government Code. (i)Miscellaneous supplies. The actual cost of miscellaneous supplies, such as labels,boxes, and other supplies used to produce the requested information,may be added to the total charge for public information. 0)Postal and shipping charges. Governmental bodies may add any related postal or shipping expenses which are necessary to transmit the reproduced information to the requesting party. (k) Sales tax. Pursuant to Office of the Comptroller of Public Accounts'rules sales tax shall not be added on charges for public information(34 TAC, Part 1, Chapter 3, Subchapter O, §3.341 and §3.342). (1)Miscellaneous Charges: A governmental body that accepts payment by credit card for copies of public information and that is charged a"transaction fee"by the credit card company may recover that fee. (m)These charges are subject to periodic reevaluation and update. Format for Copies of Public Information (a) If a requesting party asks that information be provided on computer-compatible media of a particular kind and the requested information is electronically stored and the governmental body has the capability of providing it in that format and it is able to provide it at no greater expense or time,the governmental body shall provide the information in the requested format. (b)The extent to which a requestor can be accommodated will depend largely on the technological capability of the governmental body to which the request is made. (c)A governmental body is not required to purchase any hardware, software or programming capabilities that it does not already possess to accommodate a particular kind of request. (d)Provision of a copy of public information in the requested medium shall not violate the terms of any copyright agreement between the governmental body and a third party. (e)If the governmental body does not have the required technological capabilities to comply with the request in the format preferred by the requestor,the governmental body shall proceed in accordance with §552.228(c) of the Public Information Act. (f)If a governmental body receives a request requiring programming or manipulation of data,the governmental body should proceed in accordance with§ 552.231 of the Public Information Act. Manipulation of data under§552.231 applies only to information stored in electronic format 170 2.69 Taxpayer Information on Open Records The purpose of the following policy is to provide the employee's a succinct synopsis of the Texas Open Records Act. The information in this section should always be referred to when a property owner asks that their property records be sealed: As required by the Texas Open Records Act, it is the policy of the Denton Central Appraisal District that every person,upon request, is entitled to complete access to public information regarding governmental affairs and the official acts of public officers and employees. Public information is defined as information which is contained in documents,writings, letter,memoranda, or other printed,typed, copied, or developed material which is collected, assembled, or maintained by or for the Denton Central Appraisal District in accordance with laws or ordinances, or in connection with the transaction of official business. Unless specifically exempted all such public information shall be made available to the public during the Denton Central Appraisal District's normal business hours. Public information not accessible at the time of the request will be made available within a reasonable time. The District may not legally withhold from public inspection any documents except as specifically allowed by law. The following information is not subject to public disclosure: A. Rendition statements and real and personal property reports that are filed with the Denton Central Appraisal District under the understanding that such statements or reports are to remain confidential. B. Information regarding real or personal property sales prices that is voluntarily disclosed to the Denton Central Appraisal District after a promise that such information will remain confidential. C. Information relating to the business affairs, operations,profits, losses or expenditures of a taxpayer including,but not limited to,corporate taxpayers,which are obtained through an examination of the taxpayers' books,records,papers or employees. D. All federal tax returns or federal tax return information that a taxpayer is required to file with a state tax return or report. E. All applications for agricultural designation(1-d)which a taxpayer files with the Denton Central Appraisal District's Chief Appraiser. F. Statements, declarations, or reports filed with the Denton Central Appraisal District by either motor vehicle dealers or vessel and outboard motor dealers for the purposes of assessing inventory value for the tax year. (Effective 1-1-96) G. All information that, if released,would give a competitor or bidder any type of unfair advantage. H. All information relating to the location of real or personal property to be used for public purposes before any public announcement of the proposed project. I. All information relating to the price of real or personal property to be used for a public purpose before the award of contracts for the property. 171 This list of exceptions is intended only to cover commonly received taxpayer records,and is not the complete list of statutory exceptions to the requirement that records be open. Sources: 1. V.A.T.C.S. Government Code §552.001, 552.002, 552.003, 552.021, 552.025,552.101, 552.104, 552.105 (West, 1994) 2. V.A.T.C.S. Tax Code §22.27,23.45,23.12(f),23.123, 111.006, 171.206 (West, 1994) 2.70 Taxpayer Liaison Officer The Denton Central Appraisal District has a Taxpayer Liaison Officer (TLO). The primary focus of the TLO is to improve the Appraisal District's relationship with the public and requires the TLO to be credible, knowledgeable and responsive to the public with no conflicting interests. The duties and responsibilities of the Taxpayer Liaison Officer may include: • Resolving issues regarding the Board of Directors,the Chief Appraiser,or Denton Central Appraisal District employees. • May provide information and/or materials designed to assist property owners in understanding the appraisal process,protest procedures,taxing unit matters and other related issues. • Reporting to the board at each meeting(if necessary)on inquiries or public complaints filed and their status. Reports to the Board may be an oral or written presentation and may include the nature of the issues and concerns with a follow up to ensure their resolution. In addition,the taxpayer liaison officer may handle public access and informational matters. The liaison officer also resolves complaints that fall outside the jurisdiction of the appraisal review board. At each regular meeting of the board,the taxpayer liaison officer reports on the number,nature and status of resolution on any complaints (if any). The TLO also coordinates many administrative matters for the ARB. If you are having some difficulty with the protest system, or have questions concerning the ARB, contact the TLO. If your question cannot be resolved directly,you will receive an appropriate referral to someone who can help you. The Taxpayer Liaison Officer contact information will be posted on the Appraisal District's website to help accessibility to the public. The Texas Property Tax Code defines the Taxpayer Liaison Officer as: 172 §6.052. Taxpayer Liaison Officer (a)The board of directors for an appraisal district created for a county with a population of more than 125,000 shall appoint a taxpayer liaison officer who shall serve at the pleasure of the board. The taxpayer liaison officer shall administer the public access functions required by Sections 6.04(d), (e), and(f), and is responsible for resolving disputes not involving matters that may be protested under Section 41.41. (b)The taxpayer liaison officer may provide information and materials designed to assist property owners in understanding the appraisal process,protest procedures, and related matters. (c)The taxpayer liaison officer shall report to the board at each meeting on the status of all complaints filed with the board under Section 6.04(g). (d)The taxpayer liaison officer is entitled to compensation as provided by the budget adopted by the board of directors. (e)The chief appraiser or any other person who performs appraisal services for the appraisal district for compensation is not eligible to be the taxpayer liaison officer for the appraisal district. Added by Acts 1989, 71st Leg.,ch. 796, § 8,eff. Jan. 1, 1990.Amended by Acts 1991, 72nd Leg., ch. 371, § 2,eff. Sept. 1, 1991;Acts 2007, 80th Leg., ch. 1086, § 1,eff. Sept. 1,2007. 173 SUBSECTION 3. APPRAISAL OF BUSINESS PERSONAL PROPERTY 3.01 Introduction A. Definition of ApTraisal Responsibility The Business Personal Property Department of the Denton Central Appraisal District(DCAD)is responsible for developing fair and uniform market values for all taxable Business Personal Property accounts in the DCAD. B. Legal and Statutory Requirements The provisions of the Texas Property Tax Code (TPTC)and relevant legislative measures involving appraisal administration and procedures control the work of the appraisal district. The district is responsible for appraising property on the basis of its market value for ad valorem tax purposes for each taxing unit that imposes ad valorem taxes on property in the district. The district is required to periodically reappraise all property at least once every three years. DCAD reappraises property each year. C.Administration Requirements DCAD subscribes to the standards of the International Association of Assessing Officers (IAAO) regarding its appraisal practices and procedures. DCAD also subscribes to the standards promulgated by the Appraisal Foundation known as the Uniform Standards of Professional Appraisal Practice(USPAP). The Business Personal Property Department submits annual budget requests to the Deputy Chief Appraiser and is bound to produce mass-appraisal estimates on Business Personal properties within the cost constraints of said budget. D. Appraisal Resources Personnel-The Business Personal Property Department staff consists of a manager, a supervisor, four field appraisers assigned to geographic areas and three information specialists. The manager reports to the Deputy Chief Appraiser. E. Scope of Work The Business Personal Property Department of the Denton Central Appraisal District(DCAD)is responsible for developing fair and uniform personal property values for all industrial,business, and mineral properties. 174 3.02 General Policies and Procedures The most difficult tasks encountered by an appraiser are the discovery and assessment of personal property. The law requires that all property not specifically exempt be taxed. However,because personal property is easily concealed and frequently moved and because of the need to determine situs, and ownership,the taxation of personal property is more difficult than the taxation of real property. Items not permanently affixed to or part of real estate is generally considered to be personal property. To differentiate between real and personal property the appraiser must consider the manner in which the property is attached or secured in the location,the purpose for which the property is used and whether it is to remain permanently affixed or be removed at some time. A general rule is that an item is personal property if it can be removed without serious injury to the real estate or to the item itself. A. Data and Research It is the goal of this department to gather information that can be used to establish class schedules and verify that values placed on DCAD Appraisal Rolls are as accurate as possible. Any information that would indicate value will be considered. When information is received from whatever source,it is verified by personal contact,third party information,or direct access to financial information. Staff will work with any reliable source to acquire information. B. Education and Training All employees shall have the knowledge and expertise to do their job. Each employee will have a minimum educational standard required for their position. In addition,DCAD will supply the following: 1. On the job training—each employee will receive training on procedures,policy,and equipment by their supervisor and other employees in similar positions. 2. State required education and registration—all employees so required will achieve and maintain their own educational and registration requirements. 3. Additional training and education—from time to time,additional training and education will be required to enhance job performance,knowledge and expertise. Employees will be expected to perform to an acceptable standard. 175 C. Work Schedule Timeline August 1st—September 1st—Discovery Process September I'—February lst—Review, survey, &analyze existing accounts and value new accounts. February 1 st—April 1st—Price, evaluate, and process renditions. April 2"d—May 1st—Process renditions May 3'—Approximate Date to Mail Notices May 18t1i—June 15t1i—Formal hearings, interviews,and settle values. June 16'—July 31 st—Prepare for discovery 3.03 Methods of Discovery Since most personal property is movable in nature,the most difficult step in the assessment of personal property is developing a system of discovery and recognizing the appropriate trade level. How Business Personal Property is appraised: The application of appraisal for the purposes of Business Personal Property is divided into the categories of variable and fixed. Fixed tasks include recognizing,inspecting and setting up new accounts,review and reappraisal of an assigned geographical area as well as deleting accounts that have ceased doing business. This category is for accounts that have a single physical location. Variable accounts are accounts that may have multiple locations or be specialty accounts. Multiple location accounts include leased equipment,telecommunications,utilities,pipelines and billboards. Specialty accounts include tenant accounts and special inventory accounts for auto,boat,heavy equipment and manufactured housing dealers. The BPP department also reviews accounts that were not rendered in the previous year. Also accounts are reviewed that may have been questioned and a different value applied based on comparable property type. Due to the dynamic nature of personal property, information gathered from certified renditions,verified balance sheets,invoices, and asset listings verified through national cost services(Marshall&Swift and other appropriate sources)have been determined as the best comparable and benchmarks for the property being valued. This process can be used to develop pricing guides by property type. Property type is noted by classification referenced by an SIC CODE. The information is then converted into a price per square foot representation multiplied by the square footage of the subject. 176 Benchmark Properties—Personal Property does not normally lend itself to being tested by benchmark sales. The best indicators of a benchmark for personal property are certified renditions,balance sheets, invoices, and asset listings.Marshall and Swift valuation software is also used as a test and adjunct tool in assisting in developing benchmarks. Fixed Tasks—These accounts are taken from the previous year's certified roll. They are generated in an account ledger format sometimes carried in book form,but in the case of the Denton BPP department an Apple iPad. This allows for immediate account conformation and entry of recognized new accounts. Fixed accounts are separated into geographical areas. These areas are based upon cities and school districts. Within these areas certain designated accounts are noted for special attention.This category includes properties that did not file a rendition the previous year or the rendition filed was questioned and was not used for the property's valuation. Each appraiser inspects every account on their route.Upon inspecting the accounts on the assigned route, the appraiser verifies and makes any appropriate change. Sources that can be used as an adjunct to aid them in their task of identifying new accounts are: certificates of occupancy,newspaper articles and business journals. Variable accounts—Variable accounts are represented by leased equipment,telecommunications,utilities, mineral and VIT accounts. These accounts are rendered by electronic transmission. The information is reviewed and entered by the assigned staff. The rendered and depreciated information is then incorporated into the final value for the current year. A. Business Personal Property Rendition The use of a personal property rendition is by far the most important method of discovering personal property. This method requires that the appraisal district develop and use suitable rendition forms and vigorously pursue their accurate completion by taxpayers. The rendition process is particularly important for commercial, industrial and utility taxpayers whose inventory, equipment and supplies constitute a large part of their taxable property. The rendition is often used by the appraiser to obtain information necessary for the appraiser to apply the districts own depreciation schedules to equipment,furniture and fixtures;the rendition does not necessarily contain requisite information for such depreciation calculations. The Business Personal Property Rendition is due on or before April 1". All renditions must be signed and completed.An additional 30 days if requested in writing will be approved.Any additional extensions past the original 30 days must show cause and be approved by the Chief Appraiser. Properties that do not comply with the deadlines will be subject to a 10%penalty. A property owner can request in writing a waiver from the 10%penalty if goods cause is shown. The Appraiser is responsible to research the request and all information on the account to determine if a penalty can be waived. 177 B. Prior Year Tax Roll A review of the prior year's tax roll is a good base from which the appraiser can work. Although particular items may change from year to year,the basic nature of the property will remain unchanged in most cases. C. Publicized Material The use of newspapers,press releases and trade journals will often assist the appraiser in locating the addition of personal property that results from new businesses opening or old businesses expanding within his jurisdiction. D. Telephone and City Directories Telephone and city directories are particularly valuable in locating commercial, service or industrial operations new to the jurisdiction. E. Physical Inspection Visual inspection to assure that all taxable personal property is assessed is used by the appraiser an assigned area of the appraisal district. F. Registration Records County vehicle registration records are the best source for vehicle information. These lists provide most of the information necessary to assess such property. G. Federal Government Records The FAA supplies data consisting of the name and addresses of airplane owners and a description of the type of planes they own. H. Building Permits Building permits also will indicate the existence of new business or the replacement of one business for another when existing commercial property is remodeled. I. Sales Tax Listing Business or"sales tax"lists from the State Comptroller's office are also good sources for discovering the existence of many businesses that otherwise may go unnoticed,along with providing ownership and good mailing address information. 178 J. County Clerk DBA Records These are filings that are recorded at the County Clerk's office stating the assumed name of the company. 3.04 Procedures for Informal Meetings and Participating in Appraisal Review Board Hearings The appeals process begins with an informal meeting between the appraiser and the property owner to discuss any errors, discrepancies of market value and/or equity, and any claims of exemptions or special valuations(Freeport, abatement, foreign trade, etc.). The informal review may be handled by mail, in person,or by telephone. The review allows for communication and mutual understanding,which will reduce the number of formal appeals. Informal reviews should incorporate the following basic steps: 1)Initiate inquiry record; 2)Verify the parcel information; 3)Exchange information;4)Record the nature of complaint; 5)Use cost, sales, or income information to confirm property value; 6)If a value change is indicated,the appraiser will change the value and enter into a signed agreement with the property owner; 7)If a value change is not warranted,the appraiser should explain the appeal rights and procedures, in case the property owner wishes to make a formal appeal. Appraisal Review Board hearings(formal appeals) are the next step in the appeals process. Prior to the hearing,the property owner should be given a copy of the evidence the appraiser plans to use. Formal Hearings—The appraiser is given the responsibility of identifying protested accounts that fall within their scope of responsibility. Any information that was incorporated in the valuing of the account is to be presented at the hearing. Each side is given an opportunity to present their information before the ARB gives their decision.After the board gives their decision a board order is mailed informing the protester of the decision if there is a change. A. Procedures on Maintaining Confidential Information All confidential information(renditions, contracts,balance sheets,etc.)are kept secure and prohibited from public view. Confidential documents must be requested in writing and the persons requesting must be the owner, agent, or an authorized employee of the business. 3.05 Situs and Inspection of Personal Property Field Instructions—The appraiser is instructed and will endeavor to be aware of the accounts that are on their route. As to the extent that personal property can be assessed depends on its discovery. A. Situs of Personal Property Another difficult task in assessing personal property is determining the situs of the property for taxation purposes. The general rule in taxation of personal property is that a taxing jurisdiction can only assess 179 property that has situs within its boundaries. The basic law for determining situs of personal property involves identifying the owner's intent for the property. If personal property has not acquired an actual situs of its own by being located at one place more or less permanently,it is taxable at the domicile of the owner. Expansion of situs questions can be found in the States General Appraisal Manual,the Property Tax Code,and personal property course texts. B. Measurement of Area The appraiser must measure the area in which inventory is held for sale or stored for future use and apply the averaging density factor tables for like property to arrive at a consistent estimate of value. C. Property Inspection The personal property appraiser should first inspect the property to be appraised. Next,the appraiser should examine or audit the books and records of the business to be appraised if the financial statements are available. From the inspection and examination,basic data may be extracted for the appraisal of the operating unit. The inspection and audit program should develop the following basic data: 1. Source of costs declared by the taxpayer 2. Reliability of cost information 3. Condition ofproperty 4. Description of the property by item or class S. Year acquired—new or used 6. Economic(Useful)Life—by item or classes D. Evaluation of Inventory Items of inventory must be evaluated in bulk as a class or category assessable to a particular taxpayer, unlike other items of"tangible personal property"(furniture and fixtures,machinery, equipment and vehicles)which,under normal circumstances, are to be evaluated and assessed separately. In the recognized methods of evaluation of inventory on an aggregate or bulk basis,the appraiser should first determine the level of trade; i.e.,manufacturing,wholesale or retail at which the inventory is held. The product of this method would be the amount that would be received by the taxpayer in a sale of the total of such items of inventory assessable to him,to another person,firm or corporation who would continue the business. The principal of substitution dictates that inventory value would be the replacement cost to the owner of an acceptable substitute having comparable utility. Business personal property accounts that are valued over 2 million will be reviewed by the supervisor or manager. 180 All freeport and abatement applications will be reviewed by the supervisor or manager of the department. All pollution control accounts will be reviewed by the supervisor or manager. E. Data Entry Procedures Example of the process that the appraiser uses to acquire information from the account records by queries. Queries: • Query 1: Route by city(query will produce results for each city separately and saved in excel on F: drive). • Query 2: out-of-city route. Query results will be everything out of city limits. (Query will be saved in excel on F: drive). • Query 3: DBA route. Query results pull all L1 &L2 accounts in Denton County in DBA order. (Query will be saved in excel on F: drive). Printing: • Query 1: route by city—print 1 master copy • Query 2: out-of-city route—print 1 master copy • Query 3: DBA route—print 1 master copy • All route information is placed on iPads. Color Coding for iPads: • Red—delete • Green—active(no data entry needed) • Yellow—requires data entry. Explain in comments exactly what needs to be changed • Pink—recheck,revalue, etc. • Blue -tenant list Data Entry: • Clerical staff will make all necessary changes to account • The date and initial will be put in the done section when any changes are made • Changes will be made by clerk on the appraisers in days 181 New Accounts: • Appraiser will use new card template when setting up a new account • After appraiser types up new card it will be emailed to BPP Helpdesk • Clerical staff will check BPP Helpdesk inbox • Once clerical staff sets up new account and scans the document, it will be dropped in that appraisers new account folder located on the Shared(F:)drive in the BPP folder. • Appraiser will check new account folder. Check all data entry in PACS and add any additional information needed to account Quality Control: • Supervisor will check each appraisers worked folder. Weekly reports are turned into Manager and Supervisor. Supervisor conducts field checks of each appraisers work.Appraisers are monitored to be in their work areas at their assigned times. 3.06 Estimation of Property Value The method used to value personal property is usually controlled by such considerations as the type of property,whether there is an active and open market for such property and specific information as age, quality or quantity. The key to mass appraisal of personal property revolves around standardizing the method of processing data and applying the three traditional approaches to value. The market-data approach,the cost approach and the income approach can be applied in assessing personal property through the use of renditions, schedules and appraisal guides that are developed and used by the appraisal district. Inventory that is bought in bulk quantities must meet the test of an arm's length sale and should not include business liquidation. In determining the"market value"of items of inventory,the appraiser should consider the invoice cost,the condition of the inventory and other factors as required by law,or recognized using generally accepted accounting practices (GAAP),and correctly employs generally accepted appraisal techniques or methods(GAAT)to produce and communicate credible appraisals. The appraiser shall endeavor not to commit a substantial error of omission or commission that significantly affects a mass appraisal nor render a mass appraisal in a careless or negligent manner. A. On-Site Appraisal An"on-site"appraisal will be made of each individual,firm,partnership, co-partnership, association, society, corporation, or any other legal entity that owns,holds, or uses personal property in connection with a business or profession. Established accounts will be rechecked annually and new accounts will be established upon discovery. 182 Appraisers will make a detailed report for each business visited to include: —Business Name and Location —Owner, Principal Officer, or Representative —Mailing Address (If different) —Business Telephone Number —Person Contacted(At the business) —Date Business Opened(New accounts only) —County, City, School, and/or Special District —Refused Entry and By Whom —Square foot area occupied and leased —Appropriate listing and description of Personal Property —Property by category showing quality, condition, density of material, etc. —Method or Technique and appraisal approach utilized —Disclose any extraordinary assumptions or limiting conditions that effect value and indicate the impact —Appraised Value —Initials of Appraiser and Name of any Assisting Appraiser —Date of Appraisal Each DCAD Personal Property Account is identified by a unique computer assigned account number and a business type using the Standard Industrial Classification System, and a property use code. Accounts are maintained on the Personal Property worksheet and kept in the appraisers' office files(see below). 183 B. BPP Pricing The BPP manual is the current version used by the Property Tax Division of the State Comptroller's office utilized in ratio studies,and adopted for use by the Denton Central Appraisal District. The BPP manual gives guidelines for appraising property in this manner. The following pages detail how the density tables are to be used as supplied in the manual. All depreciation tables referred to are 2001 revised 2002 &2003 for purposes of these following examples;values for business are estimated as if being appraised for the 2001 tax year. INVENTORY D (Quality) E FAIR AVERAGE GOOD N LOW 1 4 7 S I AVERAGE 2 5 8 T Y HIGH 3 6 9 FURNITURE,FIXTURES,&EQUIPMENT D FAIR AVERAGE GOOD E N LOW 1 4 7 S I AVERAGE 2 5 8 T Y HIGH 3 6 9 Figure 1 Pricing Grids 184 Shown in Figure 1 is a blank sample of the pricing"grids"The top grid is for"Inventory"while the lower is for"Fixed Assets." Across the grid are three(3)columns headed FAIR,AVERAGE, and GOOD. Generally, speaking,these columns represent the estimated"Quality"of the inventory or fixed assets. Reading from top to bottom and down the left hand side,can be seen LOW,AVERAGE, and HIGH. Again, generally speaking,these headings indicate the estimated amount or quantity of inventory. As can be seen, Class"5"is the center point of the pricing system. Realistically all adjustments up or down should start from this point as"average"is the most common and therefore the easiest,most accurate point of reference. 185 Hardware Store Table 5251 INVENTORY (Quality) D FAIR AVERAGE GOOD E N LOW 1 8.00 4 15.00 7 27.00 S I AVERAGE 2 10.00 5 18.00 8 32.00 T Y HIGH 3 13.00 6 22.00 9 40.00 FURNITURE,FIXTURES&EQUIPMENT (Quality) D FAIR AVERAGE GOOD E N LOW 1 1.00 4 5.00 7 10.00 S I AVERAGE 2 2.00 5 6.00 8 12.00 T Y HIGH 3 4.00 6 8.00 9 14.00 *Most hardware stores will be in the Fair and Average FF&E columns. Percent Good .90 .80 .70 .60 .50 .40 .30 .20 .10 Age lyr. 2yrs. 3yrs. 4yrs. 5yrs. @s. 7yrs. @s. 9+yrs. Figure 2 Density Tables Using Figure 2,the first example used is a 5,860 sq. ft. hardware store that was established in 1995. After obtaining all pertinent information to set up the account, it is estimated that this location has average quality inventory with average density. The fixed assets are estimated to be average for this business but in well-maintained condition. The effective age is estimated for the year 1997. By indexing the inventory table,this location is classed a"5"with a price of$18.00 per sq. ft. The fixed asset table also indicates a class"5"for$6.00 per sq. ft. After checking the depreciation table under a ten (10)year life,we find that the fixed assets are estimated to be 60%good for a 1997 asset purchase. In this example,the value is estimated as follows: Inventory 5,860 sq. ft. @ $18.00= $105,480 Fixed 5,860 sq. ft. @ $ 6.00 X 60%= 21,096 $126,576 In the second example,we have another hardware store with a size of 4,725 sq. ft. The inventory quality and mix are very similar to what is normally seen. However, it appears there is more of it on the shelves rather than in the stock room. The fixtures are older wooden examples that were normally seen in the 1940's and 1950's period with wear and tear typical to fixtures of that age. For this example, date established is estimated in 1952. In estimating the value for this location,we are classing the inventory as average with a higher density. By checking the grid,the"class"for this location for inventory is a"6"or$22.00 per sq. ft. The fixtures will be classed"2"or$2.00 per sq. ft. with the depreciation schedule indicating 20%remaining. (Not going below"normal"ten year life figure as fixtures are still in use and in"average"condition for fixtures of that age.) Therefore,overall effective age is 1993. 187 The value on this business is estimated below: Inventory 4,725 sq. ft. @$22.00 = $103,950 Fixed 4,725 sq. ft. @ 2.00 X 20%= 1,890 $105,840 C. The Historical or Original Cost 1. Cost Determination The cost as shown on the accounting records reflects different cost"basis"for items acquired. The property may have been acquired by cash purchase;by contract on a deferred payment plan; by exchange, or trade;by issuance of securities or other property;by self-construction;by gift or discovery; or by other cost"basis." Accountants generally adhere to the base price established at the time the property was acquired. This principle has wide acceptance in the accounting profession. The property accounts seldom depart from the historical price base to reflect depreciated values of the assets. However,the accounting term cost typically is referred to as the cost of acquiring an asset on the date of acquisition. Thus the value recorded for the assets of a company may be described as the"all inclusive" costs. The accounting records generally have property acquisitions reported on an"original"cost basis. These accounts may be adjusted for the determination of depreciation, etc. The cost then would be on an "adjusted"cost basis. 2. Examination ofAccounting Records The appraiser should examine the books and records of the business. The accounting records may be a complete or standard set of records or a modified system of records. The report of the appraiser should indicate what records were examined and describe the type of records examined for the appraisal. A determination must be made as to the cost basis used to record property in the records. This cost basis should reflect the minimum cash outlay necessary for the acquisition of the property. This cash outlay should also represent all the expenditures up to the time the property is put to its ultimate use. The appraiser must determine the cost basis recorded for either new or used property and if it is representative of the current value at the time of acquisition. The historical or original cost may be the only reliable source data available for the appraisal of personal property. The source data may reflect historical costs for new or used property according to the date of acquisition. The appraiser may have to adjust the cost basis of the accounting records if these costs do not reflect"current value at the time of acquisition." The historical or accounting cost bases, after appraisal adjustments, are factored to current replacement costs new. 188 D. Invoice Cost Appraisers should first consider the taxpayer's invoice cost. Such cost should include delivery or freight charges but not sales tax if any, and should be reduced by any trade quantity, cash or similar substantiated discounts allowed to the taxpayer. The condition of the goods, including depreciation and appreciation may indicate an adjustment in value from invoice cost. Invoice cost should be reduced when losses in value occur due to damage, shrinkage, out of season,out of style,or similar factors that reduce the market value of the inventory below the invoice cost. When aging or curing or other similar factors enhance value, invoice cost should be increased to reflect this appreciation. In certain situations,the value of inventory consisting of work in process may increase as the manufacturing process continues. In this situation,the invoice cost must be increased to reflect this appreciation. E. Flat Pricing On accounts that do not fall into a"class"or where actual figures are known,do not use the Density Tables when a different figure is needed for the final value estimate. This final estimate is entered(on the worksheet and terminal)as a flat price figure. On locations where verification has been presented or obtained,the appraiser is also expected to flag the worksheet and computer(there is a specific field for this purpose on each)that the location's value is verified. A file(referred to as a"data file")must be set up and maintained with supporting documentation. This is then available to the personal property supervisor for checking and analysis. F. Fixed Asset Depreciation As with all appraisals,depreciation based on effective age is the critical variance to the final estimate of value. Therefore,to audit depreciation more closely, overall effective age of the fixed assets is a requisite of the appraiser to make the pricing system work. Furthermore, it requires all appraisers district wide to use the Depreciation Tables for standardization and appraisals that are more"fair and equal." This information can then be analyzed on a printout with other businesses in the same category where a comparison of values will be more meaningful with better conclusions being achieved by the appraisers. G. Economic Life 1. Measuring Economic Life The physical life of a property is that period extending from the time a piece of equipment is new until it is physically no longer usable or has had a substantial amount of life restored by rebuilding. The economic life of a property is the estimated time measured from the date the item is new until the disappearance of its capacity to produce a greater yield than its expense or upkeep. Without economic and functional obsolescence, economic and physical life may be identical. Economic life may be greater than, equal to,or less than the physical life of an item. 189 2. Estimation of Economic Life The appraiser should estimate the reasonable economic life for commercial type property by item. Commercial type property usually has a longer economic life than other types of personal property. This is due to limited use, enhanced design,better maintenance and less obsolescence. Guidelines for economic lives are found in the IRS Code,the Marshall Valuation Service manual, and other sources using generally accepted appraisal practices(GAAP). 3. Economic Life Tables The appraiser judges the economic life by physical inspection of the property and determination of the actual use of the property. As a guide the appraiser may use Depreciation Guidelines Life Expectancy Tables by the predominate use of the property. The tables are supplied with the BPP manual. The appraiser must then select the economic life for a particular property based on operating conditions, experience of the industry, and his informed judgment. H. Percent Good Tables Depreciation is estimated by the use of a remaining value or Percent Good Table. Normal depreciation allows for the decline in value of the property over its estimated economic life. The rate of depreciation or Percent Good Table relates not only to the measurement of time,but to other factors as well. Some of these particular factors are the operating policies regarding repairs,maintenance, and replacement. The other factors affect normal depreciation and must be considered by the appraiser to estimate the current value of any personal property. The use of the property has an effect on the remaining economic life and the current value. Depreciation rates are based on average condition for age. The appraiser has determined the Replacement Cost New(RCN). An economic life has been assigned to the property. The appraiser determines the following 1. Replacement Cost New(RCN)=28,250(assumed number for example) 2. The assigned life of 10 years,on a composite rate. 3. The age of the property is determined to be eight(1993-2001)years. 4. Using the Percent Good Table,he finds 20%remaining value for average condition. This is determined by using the 10 year Normal Depreciation column and the age of 8 years. The estimated remaining life indicated is 2 years. 5. The Replacement Cost New(RCN)multiplied by the percent good(%)(remaining value)gives the appraiser the estimate of Replacement Cost New Less Normal Depreciation(RCNLND). The following is an example of estimating the replacement cost less normal depreciation, using the Percent Good Table: 190 1. Replacement Cost New,RCN=$28,25 2. Normal Life— 10 years 3. Age of Property—8 years 4. Percent Good Table—Normal Depreciation 10 years 5. Percent Good(Remaining Value)20% 6. RCN$28,250 X Percent Good 20% 7. $28,250 X 20%=$5,650 RCNLND Figure 3 Using Percent Good Using Figure 3,the replacement cost new is adjusted for depreciation according to age. Next, depreciation is considered in view of the condition of the property. This depreciation is based on physical factors, and can be less, equal to or greater than depreciation from age only. I. Trending Factors A cost index, such as in Marshall& Swift, is designed to show specific rates and directions of price movements. Cost Indexes' are used to trend historical cost to current costs. The index is converted to factors using the year before the appraisal year as the base year. The costs data used in appraising property are generally historical costs. Historical costs are factored to current costs by the use of conversion factors. 1. Determine the historical or acquisition cost from the books and records. The cost basis must be representative of current value at the time of acquisition. These costs should be factored by compositions grouped or summarized within years of acquisition. 2. Determine the factor which is to be used based on the acquisition date. 3. Multiply the original cost by the factor. 191 The result is the trended historical cost or the estimate of the replacement cost new. The following is an example of estimating Replacement Cost New(RCN)using the 1992 Cost Factors: SMALL OFFICE—FURNITURE&FIXTURES 1. Cost Basis=$10,000 2. Acquisition Date 1983 3. Replacement Cost Factor= 132 4. Cost$10,000 X 132%_$13,200=RCN Using Cost Index Factor Cost basis is trended to estimate Replacement Cost New(RCN). These costs are factored by the use of conversion factors. Finally,the estimate of the economic life or remaining life of the property is made. Normal depreciation is then applied to the value. The RCNLND is the result of using the cost factors and the Percent Good Column. J. Obsolescence In the appraisal of commercial personal property as in all other types of property,the problem of obsolescence must be considered in estimating value. The appraiser should consider obsolescence a factor in the valuation of any property. Obsolescence may be defined as loss of value caused by technological change or innovation, changes in demand of product, or other causes. 1. Functional Obsolescence When the loss of value is due to technological change or innovation, it is usually referred to as functional obsolescence. It can be recognized by lack of utility in the property; inadequate capacity or size. Since the obsolescence is present in the property(i.e.,lack of capacity or size)it can sometimes be overcome by remodeling. 192 2. Economic Obsolescence When the loss of value is due to change in product or demand, it is customarily referred to as economic obsolescence. Economic obsolescence is caused by external factors and cannot be overcome. 3. Measurement of Obsolescence Obsolescence is not difficult to recognize in personal property,but it is difficult to measure with accuracy. This is because obsolescence is best measured by market evidence. Adequate market evidence of value cannot always be found for all types of personal property. The appraiser should look to the market for any evidence of value loss due to obsolescence after having estimated the value using the cost approach. Appraisers must consider what an informed purchaser is willing to pay for this property as an operating unit on a going concern basis. The appraiser will first determine Replacement Cost New Less Normal Depreciation(RCNLND.) The ratio of the RCNLND to the RCN should be compared to the overall condition of the operating unit. Then consideration must be given for an adjustment due to obsolescence; economic, functional, or both. To estimate the amount of obsolescence,the appraiser must use good appraisal judgment. A review of all the external and internal factors, including market evidence should be employed whenever available. K. Salvage& Scrap Value of Personal Property There are times when the appraiser in the field encounters a business that has remodeled or replaced worn out equipment,but older/idle equipment remains on the company books. This equipment has value,if only salvage or scrap,which must be considered in the valuation of the business. Salvage value is the price at which the owner can dispose of an asset after its useful service life has expired. The price usually includes removal of all or part of the property from the premises for use elsewhere,usually with refurbishing. Scrap value is the lowest value property will have and is measured for its content(pounds of iron, aluminum, copper,etc., or other component parts)to be used for recycling. L. Procedures for Verifying the Accuracy of Work All renditions are verified and checked by the appraiser. The supervisor takes random samples from each employee. Various value reports are reviewed to ensure equality,uniformity and accuracy are accomplished. M. Procedures on Accepting Renditions and Assessing or Waiving Penalties The Business Personal Property Rendition is due on or before April 1St. All renditions must be signed and completed. An additional 30 days if requested in writing will be approved. Any additional extensions past the original 30 days must show good cause and be approved by the Chief Appraiser. 193 Properties that do not comply with the deadlines will be subject to a 10%penalty. A property owner can in writing request a waiver from the 10%penalty if good cause is shown. The Appraiser is responsible to research the request and all information on the account to determine if a penalty can be waived. Utility accounts maintained by an outside appraisal firm are updated from the computer generated listing provided by the firm. O. Policies and Procedures for Performing,Analyzing and Using Internal Ratio Studies Analysis The District utilizes internal computer generated queries to help in ascertaining proper ratios. The queries are performed to locate outlier spread. This would include properties that increased by more than the designated percentages and amounts. This would give an indicator of properties that fell outside the indicated ranges. Summary statistics including,but not limited to,the median,weighted mean, and standard deviation provide the analysts an analytical tool by which to determine both the level and uniformity of appraised value by SIC code. Review of the standard deviation can discern appraisal uniformity. 194 DENTON CENTRAL APPRAISAL DISTRICT PERSONAL PROPERTY WORK SHEET PROP ID: NV: BUSINESS NAME: OWNER'S NAME: SITUS LOCATION: MAILING ADDRESS: PHONE NUMBERS: PROPERTY LINKED DESCRIPTION: PROPERTY STATE R CODE: SIC: TAXING UNITS: 20 EXEMPTIONS/COMMENTS 1.INVENTORY-GOODS,WARES,MDSE SF: 2.FURNITURE&FIXTURES SF: 3.MACHINERY&EQUIPMENT 4.VEHICLES YEAR MAKE TYPE LIC# TOTAL: APPRAISER: DATE: INFO FROM: 195 BILLBOARD VALUATION WORKSHEET (1)NAME OF COMPANY: (2)DATE: (3)PERSON TO CONTACT: (4)NUMBER: (5)COUNTY NAME: (6)TELEPHONE: (7)LOCATION OF STRUCTURE&BILLBOARD#: (8)NEAREST ADDRESS&ENTITIES: (9)NEAREST LOCATION: (10)ORIGINAL CONSTRUCTION DATE: (11)AGE(IN YEARS): (12)TYPE OF CONSTRUCTION(WOOD,STEEL,MONOPOLE): (13)CLASS: (14)HAGL: (15)ILLUMINATION:YES NO (16)LARGEST DISPLAY SURFACE: (17)NUMBER OF DISPLAY SURFACES: (18) PLATFORM# YES NO (19)APRON# YES NO BASE PRICE PER SQUARE FOOT X SQ FT= (A) NUMBER OF ADDITIONAL SURFACES X PER SURFACE_ (B) BASE STRUCTURE COST= (C) (ADD A&B) CONSTRUCTION ADJUSTMENTS HAGL-BASE STRUCTURE COST X PERCENTAGE_ (D) MONOPOLE-BASE STRUCTURE COST X PERCENTAGE_ (E) STACKS-BASE STRUCTURE COST X PERCENTAGE_ (F) TOTAL ADJUSTED BASE COST= (G) TOTAL OFC+(D,E,&F) ADDITIONAL IMPROVEMENTS ILLUMINATION-#OF SURFACES X PER SURFACE_ (H) PLATFORM-PER LINEAR FOOT X LINEAR FEET= (I) APRON-PER LINEAR FOOT X LINEAR FEET= (J) TOTAL OTHER ADDITIONS= (K) (ADD H,I,&J) REPLACEMENT COST NEW(RCN) (L) (ADD G&K) VALUATION OF BILLBOARD REPLACEMENT COST NEW RCN(L) X PCT GOOD= 196 BILLBOARD SCHEDULE CLASS 1 CLASS 2 CLASS 3 CLASS 4 $30 $60 $90 $490 SINGLE FACED SINGLE FACED SINGLE FACED WOOD CONSTRUCTION STEEL CONSTRUCTION STEEL CONSTRUCTION SINGLE DIGITAL CLASS 1+ CLASS 2+ CLASS 3+ CLASS 4+ $45 $80 $115 $670 DOUBLE FACED DOUBLE FACED DOUBLE FACED DOUBLE FACED WOOD CONSTRUCTION STEEL CONSTRUCTION STEEL CONSTRUCTION DIGITAL ALL COMPONENTS ARE CONSIDERED TO BE IN PLACE: LIGHTS,PLATFORMS,&APRONS. 197 DENTON CENTRAL APPRAISAL DISTRICT Business Personal Property Department PO BOX 50764 Denton.TX 76206 • 3901 Morse Street,Denton,TX 76208 Dept 940-349-3950 Metro 972-434-2602 Fax 940-349-3951 For additional fortes and resources visit our website at www.dodonead.corn This document must be filed with the appraisal district office fn the county in which your property is taxable It must not be Fled with the office of the Comptroller of Public Accounts.Location and address Information for appraisal district offices may be found at wwwwmndow state.tx.uslorocertvtaxlreferencesldirectorvlcad Business Name&Current Mailing Address: Account Number. Property Loudon Address: Property Owner Agents Name,Address,&Phone Number: Owner's Phone Number: Description of Business(optional): Questions 1-6 optional 1. If any of the above information is not correct,please make the necessary changes. The last day to file this rendition is April 1. 2. Business Type is(check one): ❑Individual or sole proprietorship ❑Partnership ❑Society ❑Corporation 3. Square Footage of building occupied: 4. ❑ Leased space ❑ Owned space 5. Sales Tax Permit Number: 6. Please provide this information if the business has sold,closed or moved to a new location:Please check one ❑ Business Sold—Date Sold: Name,Address&Phone Number of Buyer: ❑ Business Closed Date business closed: ❑ Business Moved—Date Moved: Location business was moved to: If you have previously filed a rendition form and it remains an accurate rendition of your property for this year,you may check the box below and sign this form. ❑ By checking this box I affirm that the information contained in my most recent rendition statement filed for a prior tax year(this rendition was filed for the tax year)continues to be complete and accurate for the current tax year. GENERAL INSTRUCTIONS:This form is for use in rendering,pursuant to Tax Code§22.01,tangible personal property used for the production of income that you own or manage and control as a fiduciary on January 1 of this year. FILING AND DEADLINES:Rendition statements and property reports must be delivered to the chief appraiser after January 1 and not later than April 1,except as provided by Tax Code§22.02.On written request by the property owner,the chief appraiser shall extend a deadline for filing a rendition statement or property report to May 1.The chief appraiser may further extend the deadline an additional 15 days upon good cause shown in writing by the property owner.Pursuant to Tax Code§22.02,if an exemption applicable to a property on January 1 tenninates during the tax year,the person who owns or acquires the property on the date applicability of the exemption terminates shall render the property for taxation within 30 days after the date of termination.If the chief appraiser denies an application for an exemption for property subject to rendition pursuant to Tax Code§22.01(a),the person who owns the property on the date the application is denied shall render the property for taxation in the required manner within 30 days after the date of denial- 1 198 INSPECTION OF PROPERTY:Pursuant to Tax Code§22.07,the chief appraiser or his authorized representative may enter the premises of a business,trade,or profession and inspect the property to determine the existence and market value of tangible personal property used for the production of income and having a taxable situs in the district. REQUEST FOR STATEMENT REGARDING VALUE:Pursuant to Tax Code§22.07,the chief appraiser may request,either in writing or by electronic means,that the property owner provide a statement containing supporting information indicating how value rendered was determined.The property owner must deliver the statement to the chief appraiser,either in writing or by electronic means,not later than the 21 st day after the date the chief appraisers request is received.The statement must: (1)summarize information sufficient to identify the property,including: (A)the physical and economic characteristics relevant to the opinion of value,if appropriate;and (B)the source of the information used; (2)state the effective date of the opinion of value;and (3)explain the basis of the value rendered. If the property owner is a business with 50 employees or less,the property owner may base the estimate of value on the depreciation schedules used for federal income tax purposes.Failure to comply in a timely manner is considered to be a failure to timely render and the Tax Code requires that penalties be applied by the chief appraiser. PENALTIES:The chief appraiser must impose a penalty on a person who fails to timely file a required rendition statement or property report in an amount equal to 10 percent of the total amount of taxes imposed on the property for that year by taxing units participating in the appraisal district.The chief appraiser must impose an additional penalty on the person equal to 50 percent of the total amount of taxes imposed on the property for the tax year of the statement or report by the taxing units participating in the appraisal district if it is finally determined by a court that: (1)the person filed a false statement or report with the intent to commit fraud or to evade the tax;or (2)the person alters,destroys,or conceals any record,document,or thing,or presents to the chief appraiser any altered or fraudulent record, document,or thing,or otherwise engages in fraudulent conduct,for the purpose of affecting the course or outcome of an inspection,investigation, determination,or other proceeding before the appraisal district. SPECIAL INSTRUCTIONS:Effective January 1,2014,certain dealers of motor vehicle inventory may elect to file renditions under Tax Code,Chapter 22,rather than file declarations and tax statements under Tax Code,Chapter 23.Tax Code,Section 23.121(a)(3)allows a dealer to make this election if it(1)does not sell motor vehicles that are self-propelled and designed to transport persons or property on a public highway;(2)meets either of the following two requirements:(a)the total annual sales from the inventory,less sales to dealers,fleet transactions,and subsequent sales,for the preceding tax year are 25%or less of the dealer's total revenue from all sources during that period,or(b)the dealer did not sell a motor vehicle to a person other than another dealer during the preceding tax year and the dealer estimates that the dealers total annual sales from the dealers motor vehicle inventory,less sales to dealers,fleet transactions,and subsequent sales,for the 12-month period corresponding to the current tax year will be 25%or less of the dealers total revenue from all sources during that period;(3)files with the chief appraiser and the tax collector by August 31 of the tax year preceding January 1 on a forth prescribed by the comptroller a declaration that the dealer elects not to be treated as a dealer under Tax Code,Section 23.121 in the current tax year;AND(4)renders the dealers motor vehicle inventory in the current tax year by filing a rendition with the chief appraiser in the manner provided by Tax Code,Chapter 22.A dealer who makes this election must file the declaration annually with the chief appraiser and the tax collector by August 31 of the preceding tax year,so long as the dealer meets the eligibility requirements of law. Effective January 1,2014 a dealer of heavy equipment inventory may render its inventory by filing a rendition statement or property report as provided by Tax Code,Chapter 22.If the dealer files a rendition,the dealer is not considered to be a dealer as defined by Tax Code,Section 23.1241(a)(1).A heavy equipment inventory dealer has the option to render or file declarations and tax statements,without filing additional declarations with the chief appraiser or tax collector. Tax Code,Section 22.01(c-1)states: In this section: (1) "Secured party'has the meaning assigned by Section 9.102,Business&Commerce Code. (2) "Security interest"has the meaning assigned by Section 1.201,Business&Commerce Code. Tax Code,Section 22.01(c-2)states: With the consent of the property owner,a secured party may render for taxation any property of the property owner in which the secured party has a security interest on January 1,although the secured party is not required to render the property by Subsection(a)or(b).This subsection applies only to property that has a historical cost when new of more 0ian$50,000. Tax Code,Section 22.01(d-1)states: A secured party is not liable for inaccurate informahon included on the rendition statement if the property owner supplied the information or for failure to timely file the rendition statement if the property owner failed to promptly cooperate with the secured party.A secured party may rely on information provided by the property owner with respect to (1) The accuracy of information in the rendition statement. (2) The appraisal district in which the rendition statement must be filed,and (3) Compliance with any provisions of this chapter that require the property owner to supply additional information The Property Tax Assistance Division at the Texas Comptroller of Public Accounts provides property tax information and resources for taxpayers.local taxing entities.appraisal dishicts and appraisal review boards. For more information,visit our websue:www window slate tx.usltaxrnfo/nrodtax 2 199 DEFINITIONS Personal Property: Every kind of property that is not real property;generally,property that is movable without damage to itself or the associated real property. Inventory:Personal Property that is held for sale to the public by a commercial enterprise. Type/Category: Functionally similar personal property groups. Examples: furniture,fixtures,machinery,equipment, vehicles,and supplies. Narrower groupings such as personal computers,milling equipment,freezer cases,and forklifts should be used,if possible.A person is not required to render for taxation personal property appraised under Section 23.24. Estimate of Quantity: For each type or category listed,the number of items,or other relevant measure of quantity(e.g., gallons,bushels,tons,pounds,board feet). Property Address:The physical address of the personal property on January 1 of the current tax year. Normally,the property is taxable by the taxing unit where the property is located. Address Where Taxable: In some instances,personal property that is only temporarily at its current address may be taxable at another location(taxable situs). If you know that this is the case,please list the address where taxable. Good Faith Estimate of Market Value:Your best estimate of what the property would have sold for in U.S.dollars on January 1 of the current tax year if it had been on the market for a reasonable length of time and neither you nor the purchaser was forced to buy or sell. For inventory,it is the price for which the property would have sold as a unit to a purchaser who would continue the business. Historical Cost When New:What you paid for the property when it was new,or if you bought the property used,what the original buyer paid when it was new. If you bought the property used and do not know what the original buyer paid. state what you paid with a note that you purchased it used. Year Acquired:The year that you purchased the property. Consigned Goods:Personal property owned by another person that you are selling by arrangement with that person. If you have consigned goods,report the name and address of the owner in the appropriate blank. Fiduciary:A person or institution who manages property for another and who must exercise a standard of care in such management activity imposed by law or contract. Secured Party:A person in whose favor a security interest is created or provided for under a security agreement. whether or not any obligation to be secured is outstanding,a person that holds an agricultural lien,a consignor,a person to which accounts.chattel paper,payment intangibles,or promissory notes have been sold.a trustee,indenture trustee. agent,collateral agent,or other representative in whose favor a security interest or agricultural lien is created or provided for;or a person that holds a security interest arising under Sections 2.401,2.505,2.711(c),2A.508(e),4.210, or 5.118. Security Interest:An interest in personal property or fixtures which secured payment or performance of an obligation. "Security interest"includes any interest of a consignor and a buyer of accounts,chattel paper,a payment intangible,or a promissory note in a transaction that is subject to Chapter 9."Security interest"does not include the special property interest of a buyer of goods on identification of those goods to a contract for sale under Section 2.401,but a buyer may also acquire a"security interest"by complying with Chapter 9.Except as otherwise provided in Section 2.505,the right of a seller or lessor of goods under Chapter 2 or 2A to retain or acquire possession of the goods is not a"security interest',but a seller or lessor may also acquire a"security interest"by complying with Chapter 9.The retention or reservation of title by a seller of goods not withstanding shipment or delivery to the buyer under Section 2.401 is limited in effect to a reservation of a"security interest."Whether a transaction in the form of a lease creates a security interest is determined pursuant to Section 1.203. 3 200 PART 2. GENERAL DESCRIPTION OF BUSINESS ASSETS List all taxable personal property by typelcategory of property(See'Definitions").If needed you may attach additional sheets.Or,you may attach a computer-generated copy listing the information below.If you manage or control property as a fiduciary on January 1,also list the names and addresses of each property owner. 1. What do you estimate to be the total market value of your business assets(see the definition of market value)? Under$20,000(optional:estimated value ).If you check this box,complete item#2 below,then skip to part 7, $20,000 or more. If you check this box,skip to part 3,and complete all other parts of this forth. When required by the chief appraiser,you must render any taxable property that you own or manage and control as a fiduciary on January 1[Tax Code Section 22.01(b)].For this type of property,complete part 2,3.4 and/or 6,whichever is applicable. When required by the chief appraiser,you must file a report listing the name and address of each owner of property that is in your possession or under your management on January 1 by bailment,lease,consignment,or other arrangement[Tax Code Section 22.04(a)].For this type of property. complete part 5. Your estimate of market value should be based on the value of all tangible personal property owned by your business on January 1,including vehicles less than 20,000. 2. General property description by Property address or address Good Faith Estimate of Property owner name/address if you type/category where taxable Market Value manage or control property as a (optional)' fiduciary PART 3. INVENTORY,RAW MATERIALS AND SUPPLIES List all taxable inventory by type of property(example.merchandise,supplies,etc.).If needed you may attach additional sheets.Or,you may attach a computer-generated copy listing the information below.If you manage or control property as a fiduciary on January 1,also list the names and addresses of each property owner.If needed,attach additional sheets.If you carry consigned goods,also list below the names and addresses of each consignor. Historical Good faith Estimate Property description Year cost when estimate of of quantity Properly address or address Property owner name/address,new" by type/category Acquired" market value' of each where taxable if you manage or control (and) or type property as a fiduciary Subtotal Work in Progress Raw Materials Total Inventory Supplies 'If you provide an amount in the'good faith estimate of market value,'you need not complete a'historical cost when new"and"year acquired.'"Good faith estimate of market value'is not admissible in subsequent protest,hearing,appeal,suit,or other proceeding involving the property except for:(1) proceedings to determine whether a person complied with rendition requirement:(2)proceedings for determination of fraud or intent to evade tax;or (3)a protest under Tax Code.Section 41.41, If you provide an amount in a"historical cost when new and'year acquired,"you need not complete"good faith estimate of market value.' 4 201 PART 4. FURNITURE&FIXTURES,MACHINERY&EQUIPMENT.COMPUTERS,ELECTRONIC ITEMS,AND OTHER FIXED ASSETS NOT INCLUDING VEHICLES List all taxable personal property by typelcategory of property(See'Definitions").If needed you may attach additional sheets.Or,you may attach a computer-generated copy listing the information below.If you manage or control property as a fiduclary on January 1,also list the names and addresses of each property owner.If you carry consigned goods,also list below the names and addresses of each consignor. Office Plant or Shop Computers Furniture& Machines Motile Redio. Motile Descnbe Fixtures Copier.Fax PBX Machinery 8 E w (PC 8 Miscellaneous el Equipment q p meet Mainframe) Miscellaneous Telephone Estimate of Market Value' Instead of reporting an estimate of market value,you may report these assets by original cost and year of acquisition.If so,please fill out the table below. List the original cost of each category of items by year acquired.Please place a total cost for all assets acquired before 20DO on the last line.If you don't have original cost information by year available,check here Eland list cost for each category in the total line. Office Plant or Strop Furniture 8 Motile Radio, Mobile Computers(PC Machines Machinery Miscellaneous Describe Year Fixtures Copier,Fax PBX Equipment Equipment 8 Mainframe) HCol.. Hisloncal q on Historical Historical Historical Miscellaneous Acquired" Histonnal Histoncal Cost— Co Cost•• �.. Cogc Cost" Cost•• 2017 S 2016 $ 2015 S 2014 $ 2013 $ 2012 $ 2011 $ 2010 S 2009 $ 2008 $ 2007 $ 2006 $ 2005 $ 2004 $ 2003 S 2002 $ 2001 $ 2000 $ /prior Totals 'If you provide an amount in the'good faith estimate of market value:you need not complete a'historical cost when new'and'year acquired.-"Good faith estimate of market value'is not admissible in subsequent protest,hearing,appeal,suit,or other proceeding involving the property except for:(1) proceedings to determine whether a person complied with rendition requirement:(2)proceedings for determination of fraud or intent to evade tax;or (3)a protest under Tax Code Section 41.41. "If you provide an amount in a"historical cost when new and year acquired,'you need not complete'good faith estimate of market value.' 5 202 PART 5. LEASED,LOANED,CONSIGNED,OR RENTED PERSONAL PROPERTY List the name and address of each property owner of taxable property that is in your possession or under your management on January 1 by bailment, lease,consignment.or other arrangement.If needed you may attach additional sheets.Or,you may attach a computer-generated copy listing the information below. Name,Address.Phone q of Owner Description Selling Price if Staled in Annual Rent Lease(Optional) O tional PART 6. AUTOMOBILES,TRUCKS,TRAILERS,BUSES,AND SPECIAL EQUIPMENT MOUNTED ON THEM List all taxable personal property by typetcategory of property(See'Definitions").If needed you may attach additional sheets.Or,you may attach a computer-generated copy listing the information below.If you manage or control property as a fiduciary on January 1,also list the names and addresses of each property owner.If you carry consigned goods,also list below the names and addresses of each consignor. VEHICLES-continue on additional sheets if needed Year Make and Model License Number Market Value' Location if Different from Original Cost" Date (Optional) Business Location (Optional) Acquired- (Optional) tional) SPECIAL EQUIPMENT MOUNTED ON VEHICLES-list below any special equipment-continue on additional sheets if needed Equipment Description VIN of vehicle to which attached Estimate of Value' Original Cost" Year (Optional) acquired- (Optional) tional 'If you provide an amount in the'good faith estimate of market value,-you need not complete a-historical cost when new and'year acquired." Good faith estimate of market value is not admissible in subsequent protest,hearing,appeal,suit,or other proceeding involving the property except for;(1) proceedings to determine whether a person complied with rendition requirement.(2)proceedings for determination of fraud or intent to evade tax;or (3)a protest under Tax Code,Section 41.41. "If you provide an amount in a'historical cost when new-and'year acquired,-you need not complete*good faith estimate of market value.' PART 7.SIGNATURE AND AFFIRMATION Are you the property owner,an employee of the property owner,or an employee of a property owner on behalf of an affiliated entity of the property owner?_ Yes _No This forth must be signed and dated.By signing this document.you attest that the information contained on it is true and correct to the best of your knowledge and belief. If you checked-Yes-above,sign and date on the first signature line below.No notarization is required.If you checked'No"above,(notarization is required)you must complete the following.I swear that the information provided on this form is true and correct to the best of my knowledge and belief. Are you a secured party with a security interest in the property subject to this rendition and with a historical cost new of more than S50,000,as defined and required by Tax Code,Section 22.01(c-1)and(c-2)?_Yes No If you checked'Yes"to this question,you must attach a document signed by the property owner indicating consent for you to file the rendition.Without the authorization,the rendition is riot valid and cannot be processed. Owner/Agent Signature Date Printed Name Title Company Name Telephone No. If you checked-No"to the first question on part 7,you must complete the following: I swear that the information provided on this forth is true and correct to the best of my knowledge and belief. Agent Signature Date SUBSCRIBED AND SWORN TO BEFORE ME this the Printed Name Title day of .20 Company Name Telephone No. Section 22.26 of the Property Tax Code states (a)Each rendition statement or property report required or authorized by this chapter must be signed by an individual who is required to file the statement or report-(b)When a corporation is required to file a statement or report.an officer or the corporation or an employee or agent who has been designated in writing by the board of directors or by an authorized officer to sign in behalf of the corporation must sign the statement or report. Notary Public,State of Texas If you make a false statement on this form,you could be found guilty of a Class A misdemeanor or a state jail felony under Section 37.10,Penal Code 6 203 ♦?Jn N� Yt D GLENN HECAR TEXAS COMPTROLLER OF PUBLIC,ACCOUNTS December 15, 2017 Ginger Crowder Denton CAD Dear Ms. Crowder: After a thorough review of the proposed 2018 Business Personal Property rendition form submitted by the Denton CAD, the Property Tax Assistance Division finds that the submitted form is in substantial compliance with the Comptroller's form adopted by Comptroller Rule 9.3031. If you have any further questions, please call or e-mail me at 1-800-252-9121, extension 3-7685 or leslie,wardacpa.state.tx.us, Sincerely, Leslie K Ward Information Specialist Property Tax Assistance Division C o m pt ro I l e r.Tex a s.G o v 204 DENTON CENTRAL APPRAISAL DISTRICT 2018 CONSOLIDATED COST INDEX AND DEPRECIATION SCHEDULE FIXTURES AND EQUIPMENT ACQUI- NORMAL USEFUL LIFE-YEARS SITION YEAR 3 4 5 6 2017 96 97 98 99 2016 95 96 97 98 2015 92 95 96 97 2014 89 94 95 96 2013 93 94 95 2012 92 93 2011 91 2010 2009 2008 33 41 61 78 77 80 2007 20 34 53 74 75 76 2006 31 44 69 70 72 2005 20 38 63 65 67 20G4 33 56 59 62 2003 31 49 54 58 2002 20 44 50 53 2001 37 43 48 2000 35 39 43 1999 20 35 38 1998 28 35 1997 20 30 Physical % good is computed on a straight line basis, with a 20% residual value for assets in use-in place whose actual age exceed Normal Useful Life (except Billboards are with a 30% residual value). Assets at the end of their useful life and not used by the owner will be priced at salvage value (below 20% residual). Factors shown are net percentages. TRANSPORTATION EQUIPMENT Year Passenger Commercial Commercial Model Cars/Pickups Trucks Trailers Good % Good % Good 2017 85 60 56 2016 75 56 54 2015 65 53 53 2014 55 47 48 COMPUTER EQUIPMENT-ALL 2013 45 36 42 2012 40 34 38 Year Acquired % Good 2011 35 31 35 2017 75 2010 30 _28 32 2016 56 2009 25 25 30 2015 28 2008 20 22 28 2014 10 2007 20 26 2013 d Older 5 2006 24 2005 22 (Software is Exempt) 2004 20 205 FIXTURES AND EQUIPMENT NORMAL USEFUL LIFE Aerospace Products(Airborne Vehicles&Component Parts)...... 10 Motion Picture&Television Production...............__..._._........... 12 Amusement&Theme Parks........................................................ 12 Motor Vehicle&Parts Manufacturing................. 12 Apparel&Fabricated Textile Mfg....„.......................................„..... 8 Motor Vehicle&Parts Mfg(Special Tools)......................... 3 Appliances..........................._...................»............................_._... 8 News Racks........................................_............................................ 5 Asphalt Plant............................................................................... 10 Office Furniture&Equipment.......................................................... 10 Automatic Car Wash................................................................„......... 10 Office Machines(Non-Computer Data handling).......................... 6 Automatic Teller Machine.................__............_......................... 5 Optical Lenses&Instruments Mfg.................................................. 10 Automobile Repair Shops............_...................................._........ 10 Paint&Varnish Manufacture..............._...................................... 10 Bakeries&Confectionery Products................................................. 12 Paper&Pulp Manufacturing............................................................ 12 Barber&Beauty Shops..................................................................... 10 Paving Contractors(Asphalt&Concrete)........................................ 8 Billboards............................................................................................ 30 Petroleum Refining...-..................................................................... 15 Brewery Equipment...._...... 12 Photo Finishing(Computerized Processing)......_».„„.......»...„... 5 Brick Manufacture.....................__......__.__..._._..._................. 15 Photo Finishing.................................................................................. 10 Buildings(Moveable)........._.............._._._..._._......_...._.._......_. 10 Plastic&Plastic Products Manufacturing.................................... 10 Cable TV/Satellite Systems(One orTwo Way Coomun.).............. 10 Plastic Products Mfg(Special Tools)................................................ 4 Canneries&frozen Food Production...........................................„.. 12 Point of Sale Equip(Scanners,Registers,etc.)............................... 5 CellularTelephone......................................................................_..... 3 Postage Machine........................................_................................. 10 Chemical&Allied production.................„.»....„»...__...„._...».. 10 Printing&Publishing................ 10 Clay Products Mfg................................ 15 Private Water System..................... 20 Cold Storage&Ice Making Equipment......__._......_....__..._._.. 18 Professional&Scientific instrumertts......__.__..._._...._......_._ 10 Cold Storage Warehouse Equipment.............................................. 10 Radio&Television,Broadcasting.................................................... 6 Computers&Peripheral Equip(Software Exempt)....................... tbl Radio&Television,Manufacturing.............................................._. 30 Concrete&Concrete Products Mfg(Batch Plants)........._._......... 15 Radio or Television Transmitting Tower............. 20 Condiments,Manufacturing&Processing..................„..„...»».„. 10 Radio Systems(Complete Two Way Systems)...„.».................... 8 Construction Equipment(heavy&General)........................ 6 Radio Systems(Radio only)................................._.„.„_...__. Converted Paper,Paperboard&Pulp Products Mfg................._. 10 Recreation(Bowling,Billard,Pool,Min.Golf)............................... 10 CopyMachine.................................................................................... 6 Rental—Furniture............................................................................. 3 Dairy Products Manufacturing......................................................... 12 Rental—Tools,Equipment,Etc........................................................ 6 Data handling Equip-Typewriters,Calculators,Add Mach,Dupl.Eq. 6 Restaurant&Bar Equipment.................................................... 10 Dispensers—Cold Drinks................................................................... 5 Restaurant Equipment(Fast Food)........._»............._»...__».... 8 Distilling...................................................... 12 Retail trades,Fixtures&Equipment..._............_......_...__........ 10 Drilling/Field Services Equip(Oil&Gas)........................... 6 Rubber Products Manufacturing................................................. 14 Electrical Equipment Manufacturing................................. 10 Rubber Products Mfg(Special Tools).............................................. 4 Electronic Equipment Manufacturing...................... 6 Safes—Office.10 yrs.,Bank Vaults&Safe Dep............................. 20 Fabricated Metal Products(Special Tools)......._..._._._......_...._. 3 Satellite Dish&Related Electronic Equipment........................._. 10 Fabricated Metal Products.......................................„„._...».„...„. 12 Security Systems......................................................................_....... 10 Fax Machine............_......„._..._........._......_..................„.........._ 6 Service Establishment...................................................................... 10 ForkLift.................................................................._.».____....._..... 6 Service Station'....................................._......................................... 10 Glass/Fiberglass(Special Tools).............................. 3 Signs(Trade-Non Billboard)........................................................... 10 Glass/Fiberglass Manufacture&Products..................................... 14 Skates&Bowling Shoes................................................................. 6 Golf Carts............................................................................................ 6 Soft Drink Manufacturing&Bottling.........................._................ 12 Grain&Grain Products Mfg(Flours,Cereals,Livestock Feed)..... 15 Stone Products Manufacturing..................._......»..........._.......... 15 Hand Tools(Electrical&Manual)..................................................... 5 Sugar&Sugar Products Manufacturing ................ 18 HealthClub&Spas.......................................................................... 10 Tanning Machine......................................................_.................. 10 Hospital Furnishings&Equipment.................................................. 10 Telephone Station Equip(Private Branch Exc)......_................... 10 Hotel/Motel Furniture...................................................................... 10 Telephone Systems(Business)...................................._............„... 6 Jewelry,Musical Inst.Toys,Sport Goods,Office&Art Sup.......... 12 Theater Equipment......................................................»._..._....... 10 Laundry Equipment(Coin Operated)............................................. 8 Tire Recapping............................................................................... 14 Laundry Equipment(Dry Cleaning)........._..._......____...„._..... 10 Trash Handling Equipment(Truck/Containers)............................. 5 Law Library........................................... 5 Vehicles(Licensed)..................................... Leather&leather Products._..._.»...._»..._.._............»...„._..._.. 10 Vending Machines..............._......................._.................................. 5 Machinery Mfg(Non-specific types)........._._...„._....„_...__...... 10 Video Machines(Arcade&Rental Stores)..................................... 3 Meat Packing............................................. 12 Video Tapes<60 days-50%,<1 yr-20%,>1 yr-10%or$10 per tape Medical Equipment(High Technology)...»_._»..._._._»»..._.». 5 Warehouse Equipment.................................................................... 10 Medical/Dental Trade Equipment............. 10 Waste Reduction&Resource Recovery.................................... 10 Metalworking Machinery Manufacturing.........__........._._......... 10 Wholesale Trade,Fixtures&Equipment........................._...»._. 10 Mining&Quarrying............................................. 10 Wood products&Furniture Manufacturing............................... 10 *Tanks 20 yr Pumps,Console:Computer,Electronic.....5 yr Other.................10 yr 206 3.07 Motor Vehicle Dealer's Special Inventory Instructions for Filing Forms and Paying Property Taxes For property tax purposes,Texas law requires that a motor vehicle dealer's inventory is appraised based on the total sales of motor vehicles in the prior year. Dealers must file with the county appraisal district a Dealer's Motor Vehicle Inventory Declaration form listing the total value of the inventory sold in the prior year.Also,the dealer must file with the county tax office a monthly form Dealer's Motor Vehicle Inventory Tax Statement—listing the motor vehicles sold, and prepay their property taxes for each vehicle. Instructions for filing both forms follow. Texas law permits the Comptroller's office to act only as an advisory agency with regard to property taxes. The Comptroller helps property owners and tax officials interpret the property tax laws. Texas law also requires the Comptroller to adopt forms for filing the motor vehicle dealer's inventory. Steps to calculate,report and pay dealer's inventory property taxes: Step 1 —A dealer files the Dealer Motor Vehicle Inventory Declaration form. • file one declaration per year; • file each January,between January I and 31; • file with the county appraisal district and send a copy to the county tax office; and • if you are a new dealer, file a declaration form within 30 days of the issuance of the dealer's general distinguishing number(GDN). A chief appraiser has the discretion to designate a different date. Step 2—A dealer reports current year's inventory market value. Complete the following items on the Dealer's Motor Vehicle Inventory Declaration form: • breakdown of sales for prior year(January—December); • breakdown of sales amounts for prior year(January—December); and • other general information about the retail business—mailing address,name and business location. 207 Divide sales amounts for inventory sales by 12 for current year's market value: • the current year's tax bills received in October will be based on this market value and the current year's tax rates; and • the inventory's market value is not the value of the dealer's motor vehicles on January 1 but an average of the regular monthly inventory sales from the preceding year. Penalties The chief appraiser of the county appraisal district must report to the Texas Department of Transportation any dealer that sells fewer than five vehicles in a prior year. The Department will begin dealer license termination proceedings. A dealer who does not file a declaration form by February 1 of each year commits a misdemeanor punishable by a fine of up to $500 per day until filed.A tax lien can be attached to the dealer's business personal property to secure payment of the penalty.A dealer forfeits an additional penalty of$1,000 for each month or portion of the month that it is not filed. Step 3—A dealer files the Dealer's Motor Vehicle Inventory Tax Statement: • file 12 statements per year; • file each month by the 1 Oth of the following month. For example, file January inventory tax statement by February 10'. • file with the county tax office, including a check for prepayment of taxes. Send a copy of the form to the county appraisal district. If you do not sell a motor vehicle during the month,you must file a tax statement indicating no sales; and • if a new dealer, file each month,but do not send a prepayment of taxes. Step 4—A dealer makes a prepayment of taxes. Calculate the unit property tax factor. • Find the aggregate tax rate by adding the preceding year's tax rates for each taxing unit that taxes the retail business. Look either at the preceding year's tax bills or call the county tax collector. Each property is taxed by a county and by a school district. It also may be taxed by a city and special districts (such as a junior college and/or hospital district,depending on where the business is located). 208 Example of 2004 tax rates: County tax rate — $0.40 School tax rate = $1.40 City tax rate — $0.60 Special district — $0.05 tax rate Aggregate = $2.45 per$100 rate of value • Divide the aggregate tax rate by 12 for a tax rate per month. Example: $2.45/12=$0.20417 per$100 of value. • Divide the aggregate tax rate per month by$100 for a tax rate per$1.00 of sales price. Example: $0.20417/$100=$0.0020417 rate per$1.00(unit property tax factor). • Change the unit property tax factor each January to use the preceding year's tax rates. Example: Use the 2004 adopted rates to determine the unit property tax factor for January through December 2005. Report and pay the unit property tax payment. • Multiply the sales price of the motor vehicle by the unit property tax factor. Subtract the motor vehicle's manufacturer's rebate from the sales price,but do not subtract the trade-in. Example: $20,000 x$0.0020417=$40.83 in tax prepayment. • Apply unit property tax factor to each motor vehicle sold in a month and report to the county tax office, along with the tax prepayment. Send a copy of the monthly tax statement to the county appraisal district. Remember, it is considered a sale, even if the motor vehicle is taken out of Texas. Step 5—A dealer files a report of inventory sales monthly. Report the following on the Dealer's Motor Vehicle Inventory Tar Statement: • date of sale; • model year of motor vehicle; • make of motor vehicle; • vehicle identification number; 209 • purchaser's name; • type of sale: A. MV—regular motor vehicle inventory sale—a motor vehicle is a fully self-propelled vehicle with at least two wheels which has the primary purpose of transporting people or property and includes a towable recreational vehicle. Motor vehicle does not include equipment or machinery designed and intended for a specific work-related purpose other than transporting people or property; B. FL—fleet sale—sales of five or more motor vehicles from the dealer's inventory to the same buyer within one calendar year; C. DL dealer sales—sales of vehicles to another Texas dealer or a dealer who is legally recognized in another state as a motor vehicle dealer; D. SS subsequent sales—dealer-financed sales of motor vehicles that, at the time of sale, have dealer financing from the inventory in this same calendar year. The first sale is reported as a motor vehicle inventory sale,with sale of this same vehicle later in the year classified as a subsequent sale; • sales price—is set forth on the application for Title, or would appear if that form was used; • unit property tax value; • total unit property tax value for each page and for the total report; and • total sales—number of vehicles for each type of sale and by total sales amounts. The chief appraiser may examine the books and records of the dealer by personally delivering a written request to the custodian of the records at the dealer's location. The request must be delivered at least 15 days prior to the date of the request to view the records and must contain a statement notifying the dealer that he or she may seek judicial relief from compliance with the request. File the report and payment by the 1 Oth day of the following month. Step 6—On behalf of the dealer,the county tax collector pays the annual inventory taxes from the dealer's escrow account and bills the dealer for any additional amount due. Receives annual property tax bills,usually in October and November: • taxing units send a copy of the dealer motor vehicle inventory tax bill to the county tax assessor- collector; • dealer pays all other tax bills to the taxing units; 210 • county tax assessor-collector pays the inventory tax bill from the escrow account—usually in early January after the dealer's December payment—to the taxing units. Receive tax receipt for payment and any additional tax bill from county tax assessor-collector for any deficiency in the escrow account: • dealer must pay the deficiency by January 31 to avoid delinquent penalty and interest; • if taxes become delinquent,dealer pays each taxing unit,plus penalty and interest; • taxing units receive any excess taxes that remain in escrow account; • the dealer may not withdraw funds from the escrow account; and • the escrow account begins with a zero balance for the next tax year's prepayments. Penalties A dealer who does not file the monthly tax statement by the 1 Oth day of the following month commits a misdemeanor punishable by a fine up to $100 per day until filed. A tax lien can be attached to the dealer's business personal property to secure payment of the $100 penalty. A dealer forfeits an additional penalty of$500 for each month or portion of month that it is not filed. Furthermore, a dealer who fails to remit the taxes due pays a 5 percent late payment,with another 5 percent due if not paid within 10 days. 3.08 Utility, Mineral Property All personal property of utility companies and coops consisting of electric,telephone,railroad, gas distribution systems,pipelines, compressors&pump stations,telecommunications, cable TV, and water utilities are valued by a consulting firm contracted for this specific function. Along with the above,this firm will also value interests in energy mineral properties—i.e.,oil,gas, lignite,and uranium. While these values are generated outside the appraisal district,they are monitored for accuracy and reasonableness, as well as correct allocation to the taxing jurisdictions,by the personal property supervisor. It is the district's policy to follow the recent decision of the Texas Supreme Court in regards to assessing near surface minerals such as sand, gravel, limestone, granite,talc and sulfur; it states that those minerals not mined or stockpiled, or part of a mine or quarry, are not taxable. 211 Wardlaw Appraisal Group, L.C. Mineral, Utility, Industrial, & Personal Property 2018 Mass Appraisal Report INTRODUCTION Appraisal Responsibility Wardlaw Appraisal Group, L.C. (WAG)is a contract mass appraisal firm responsible for developing fair and uniform market values on certain complex properties for client appraisal districts in Texas. The complex properties we appraise include mineral, utility, industrial,and personal properties. The client appraisal districts use these property appraisals as part of the appraisal roll for each of the taxing jurisdictions. WAG is under contract to support ten(10) Texas appraisal districts in 2018. Those appraisal districts are Brooks, Childress, Denton, El Paso, Kenedy, Kleberg, Runnels, Starr,Webb, and Zapata. Each contract between WAG and our client appraisal districts specifies our appraisal responsibilities in support of that district. Generally, those responsibilities are to discover, inspect,appraise,and maintain ownership records of the specific properties that are the subject of the contract. The properties covered under our contracts generally fall under the Texas Property Tax Code Categories G(minerals), J (utility), F1 (commercial real), F2 (industrial real), L1 (commercial personal)and L2 (industrial personal). The appraisal districts contract with WAG to provide these services because the districts do not have the personnel or resources to perform the appraisal internally. Appraisal Resources • Personnel—WAG maintains a professional employee and consulting staff that is skilled and experienced in property tax appraisal, engineering, information technology, administration, and division order maintenance. The appraisal staff consists of six(6) registered appraisers, all of whom are Registered Professional Appraisers (RPA), and two (2)of who are Registered Professional Engineers in Texas. These appraisal personnel are listed in Attachment'A'. All appraisers maintain a current registration in good standing with TDLR. Our appraisers improve and supplement their mass appraisal skills by participating in continuing education classes and by attending property tax related conferences. • Data—The appraisers inspect their assigned properties, if appropriate, to obtain information about buildings, site improvements, process and shop equipment, and various items of personal property. In addition, appraisal personnel use information provided by property owners concerning the cost to purchase, install, and construct items of real and personal property. For mineral interests, data is collected from regulatory agencies such as the Texas Railroad Commission and the Texas Comptroller of Public Accounts, as well as from published data sources and fee-for-service companies. I 212 VALUATION APPROACH (MODEL SPECIFICATIONS) MINERAL APPRAISAL Discounted Cash Flow analysis is the Income Method of Appraisal(Section 23.012 of the Texas Property Tax Code)used as the most appropriate technique for determining the market value of mineral properties. It is the primary appraisal method used for mineral properties. The Market Data Comparison Method of Appraisal (Section 23.013)and the Cost Method of Appraisal(Section 23.011)are also used. In addition, petroleum industry tendencies for acquisition and replacement cost(usually in dollars per barrel of oil equivalent)are considered. Because the sales and purchase prices of oil and gas properties are not generally disclosed,the Market Data Comparison method can seldom be used. WAG uses discounted cash flow analysis to appraise every producing lease in the appraisal districts we support. The appraised value of each lease is distributed to each working interest, royalty, and overriding royalty interest owner based upon their decimal interest in the lease. The oil and gas lease market values are reviewed and tested to ensure reasonableness and consistency. The reviews and testing include comparative analysis of the value, production, decline and price change from the previous year's appraisal. Additionally,comparative rules of thumb are reviewed to determine if the market value is in the correct range. The most common of these rules of thumb is that the appraised value of a mineral interest is often within 24-60 months revenue. Additionally,the Property Tax Division of the Texas Comptroller of Public Accounts performs a Property Value Study each year,which effectively provides testing,and a comparative review of the mineral appraisals on a statistical sample of the leases in many of our counties. UTILITY, INDUSTRIAL AND PERSONAL PROPERTY APPRAISAL Area Analysis The scope of market forces affecting industrial products and the capital goods used in the production process tends to extend beyond regional considerations. The effects of information and transportation technology are such that many industrial market forces are measured globally. One exception to this general concept is the market for industrial land. The pricing of land tends to be closely tied to possible alternative uses in the area. For this reason, the CAD appraisers assigned to land valuation analyze market forces for specific areas and adjust land value schedules appropriately. Area Analysis Neighborhood analysis of the type of properties valued by the industrial appraiser is not meaningful. Industrial properties do not have the type of generic"sameness"that is appropriate for neighborhood models. 213 Highest and Best Use Analysis The highest and best use of real or personal property is the most reasonable and probable use of the property on the date of appraisal that is physically and financially feasible, legal, and that derives maximum production from the property. Usually,the current use of the property is the highest and best use of that property. Industrial facilities are most commonly located in areas that support industrial use. In areas where mixed used does occur,the highest and best use of the property is examined by the appraiser to estimate the effect of this factor. Market Analysis Market analysis is the basis for finalizing value estimates on properties for which the utility, industrial and personal property appraiser has responsibility. Even though many utility and industrial properties are unique in nature, the market for this type property is analyzed to determine how the values of similar properties,or properties that are as similar as possible, are affected by market forces. Some industrial properties, such as machine shops. have many facilities that can be compared to similar subject properties in terms of type and size of equipment, type of property fabricated or services at the subject facility,and other factors. Those similarities help the appraiser estimate the value of the subject property. Cost Analysis The Cost Approach to value is applied to most personal property. This approach is utilized in conjunction with the Market and Income approaches to arrive at a final market value for most utility companies and many industrial companies. For the Cost Approach,depreciation schedules are developed based on the percent good typical for each property type at any specific age. Depreciation schedules have been implemented for what is typical of each major class of property by economic life categories. Schedules have been developed for improvements with varying years of expected life. The actual age, if known,and the effective ages of improvements are noted. Effective age estimates are based on the utility of the improvements relative to where the improvement lies on the scale of its total economic life and its competitive position in the marketplace. Market adjustment factors such as external and/or functional obsolescence can be applied when warranted. A depreciation calculation override can be used if the condition or effective age of a property varies from the norm by appropriately noting the physical condition and functional utility ratings on the property data characteristics. These adjustments are typically applied to a specific property type or location and can be developed via ratio studies or other market analyses. Many utility, industrial and personal properties use the same types of buildings and, depending on the type of business, may use the same types of manufacturing or service equipment. Many of the buildings encountered at industrial facilities are generic in construction,such as pre-engineered metal buildings. The cost per square foot to construct these type structures can be used to estimate values at facilities that have similarly constructed buildings. However,the building as constructed will have differences that must be taken into account when estimating the final value of the property being reviewed. The majority of these typical type buildings are appraised by CAD personnel. However,some industrial properties, such as specialty chemical plants,are so unique in nature that the appraiser must use additional information such as output quantity, type of 214 product manufactured,and other factors to estimate the value of the subject property. However,the manner in which the entire business operation is put together may make a particular facility unique. The district uses information from similar businesses to examine the real property values at a particular business, but the individual characteristics of the business being reviewed determine the value estimation. Some industrial buildings are use specific and therefore have no comparable properties. A similar analysis is used for personal property. Many items of personal property, such as furniture and fixtures,computers,and even machinery and equipment are generic in construction, but individual characteristics that affect value,such as usage,environment where used,and level of care will have an effect on the final value estimations. When cost data for this type of property is available and considered reliable, it is used for value estimation purposes at other plant facilities. However,on-site inspection and information provided by the property owner will affect the final value. Income Analysis Capitalization analysis is used in the income approach models.This methodology involves the capitalization of net operating income as an indication of market value for a specific property. Capitalization rates, both overall cap rates for the direct capitalization method and terminal cap rates for discounted cash flow analyses,can be derived from the market. Sales of improved properties from which actual income and expense data are obtained provide a very good indication of what a specific market participant is requiring from an investment at a specific point in time. In addition,overall capitalization rates can be derived from the built-up method(band-of-investment).This method relates to satisfying the market return requirements of both the debt and equity positions of a type of company. Many utility companies are appraised on a Unit Appraisal Model,which utilizes both the income and cost approaches to value. Information from publically available sources such as FERC and RRC reports are utilized to arrive at the input parameters for these types of properties. DATA COLLECTIONIVALIDATION Data Collection An extended range of variations may exist within the same class of utility, industrial or personal property,and there are a multitude of property types within the industrial category. For this reason,effective data collection procedures would be very difficult to organize in a single comprehensive manual. WAG uses many different publications available to the industry,such as the Oilfield Appraiser and the Equipment Newsletter, and other companion data acquisition forms to standardize data collection for schedule building that are later assigned to the industrial appraisal staff. The data generated by these forms enables the appraiser to use the software to value industrial properties. Industrial personal property also consists of many different classes of assets with a wide range of variation within each class. The district has adopted the convention of listing assets and estimating effective age of assets in the field. The field listing is then compared with information furnished by the property owners during the final valuation review. 4 215 Sources of Data The original real and personal property data used by WAG on behalf of the CADS have been maintained on the CAD computer system. The district and contract appraisal personnel have updated that information based on field review, renditions.and personal contact information. For Commercial vehicles,an outside vendor,Just Texas, provides the appraisers with a listing of vehicles registered commercially in the County. The vendor develops this listing from the Texas Department of Transportation Title and Registration Division records. As new facilities are built,the appraisal personnel collect all the real and personal property data necessary to value the property initially and thereafter update the information when the property is again visited. Other sources of data include publications such as the Texas Register regarding waste control permits, various refining and chemical industry magazine articles,and Texas Industrial Expansion articles on new construction. Data Collection Procedures The district and contract appraisal personnel annually or periodically visit assigned plants and facilities. The frequency of the visit is determined by the nature of the business conducted at each facility. For example, refineries and chemical plants are continually changing or adding to processes to extract greater efficiencies or make new products, but machines shops may not add or remove equipment over a period of two or more years. The appraisers take with them the past data on the building and site improvements and the prior listing of personal property at the facility being visited. Changes to the existing structures and personal property are noted and that information is used for value estimation purposes. . In addition, if possible, pictures are taken at the time of inspection to validate information provided on the rendition or to utilize for the appraisal if no rendition is submitted. If cost information for the real or personal property is supplied later,the field data can be compared to that information to judge the accuracy of the information. The WAG appraisal staff members are not assigned any one geographical area of the county. The category of property,the nature of the business, and whether or not the district has the staff resources available can each be a determining factor in identifying which properties are appraised by WAG and which properties are appraised by the district's appraisal staff. WAG appraisers are trained by accompanying appraisers who have performed field visit and appraisal functions for a number of years. In additions each WAG appraiser is registered with the Texas Department of Licensing and Regulation and is either a RPA or is working towards the RPA designation. Each WAG appraiser is responsible for the completeness and correctness of their valuation work, but a new appraiser is encouraged to seek the advice of and review by experienced appraisal staff. VALUATION ANALYSIS (MODEL CALIBRATION) Final Valuation Schedules WAG develops schedules based on indexed Marshall&Swift depreciation factors, as well as the schedules prepared by other appraisal districts,state appraisers and other cost estimates for use in the valuation of all business and industrial personal property. In addition,appraisal personnel, utilize actual cost data developed from both publicly available sources as well as proprietary information received from other companies without identifying information,to update these schedules annually. 216 INDIVIDUAL VALUE REVIEW PROCEDURES Field Review WAG personnel periodically review their assigned real and personal property accounts. These accounts are physically inspected on a one to two-year cycle. Certain properties are reviewed annually because past experience shows that changes are occurring continually in the real or personal property at that facility. The results of prior year hearings, renditions,and indications of new activity are another source that initiates required field visits. Many times during hearings, issues are presented that cause a value adjustment. Those issues must be field checked to see if these influences will be on-going and warrant permanent value adjustments or are transitory.The information will be recorded so the appraiser will be better able to estimate the property value. Any new construction or business activity is noted and the information necessary to value the property is recorded. Part of the field review includes noting any land characteristics that would affect the land value. The district values all land for the properties over which it has responsibility, including those properties assigned to WAG.WAG advises the district of any characteristics that would affect the value of the land associated with an assigned facility. Office Review All properties are reviewed in the office by the WAG appraiser assigned to each particular utility, industrial, or personal property. The office review relies on historical information in the utility, industrial, or personal property file as the basis for deciding on the estimated value to be placed on the property for the current tax year. The date of last inspection,extent of that inspection,and the appraiser responsible are listed in the WAG system. If a property owner disputes the district's records concerning this data in a protest hearing,the property record may be altered based on the credibility of the evidence provided. When valuing utility, industrial or personal property,the type of furniture, equipment, computers, etc.,will be used along with any cost data provided by the property owner to estimate the value. Experience in valuing similar property at other facilities will help the appraiser estimate the value of the subject facility. Individual characteristics of the property, such as usage and maintenance will have a bearing on the value calculated by use of the WAG schedules. PERFORMANCE TESTS Sales Ratio Studies Ratio studies are an important tool to examine how close appraised values are to market values. The ratio study may use available sales data or independent,expert appraisals. Typically, there are not enough sales of utility and industrial properties to show representativeness of that class of property in a ratio study. Ratio studies of utility and industrial properties normally rely on independent appraisals as an indicator of market values. 6 217 Comparative Appraisal Analysis This type of analysis is not normally performed on industrial property due to the unique nature of the property. Time and budget constraints regarding available appraisal staff also plays a role in the type of analysis that occurs. Only in an instance where a jurisdiction would file a jurisdiction challenge with the Appraisal Review Board would the district perform such an analysis. If a CAD receives a jurisdiction challenge on a utility or industrial property category,the appraisers assigned to those accounts will research the appraisal roll to see what other similar properties exist. The real commercial property values can be compared on an average value per square foot of structure basis, but the location and type of improvement must be carefully accounted for in the valuation differences between two properties with the same square footage. Differences in location and type of improvement often account for a greater difference in market value than simple square footage. In like manner,the personal property values can be compared per category, such as furniture and fixtures, machinery and equipment,etc., but a comparison of the type and use of the property must be examined to ensure property value uniformity. 7 218 Attachment A Wardlaw Appraisal Group Registered Personnel PROPERTY TAX APPRAISER CERTIFICATION AL TDLR# NAME TYPE 74200 CRAW,MALLORY M. APPRAISER,RPA 73616 MCFARLANE,KATHLEEN M. APPRAISER,RPA 74717 SHERWIN,PROCTOR APPRAISER,RPA 66026 WARDLAW,MARGARET A. APPRAISER,RPA 70182 WILLIAMS,CHARLES R. APPRAISER,RPA 71700 WILLIAMS, HAZIEL M. APPRAISER,RPA PROFESSIONAL ENGINEERING CERTIFICATION PE# NAME IBRANCH 76914 WARDLAW,MARGARET PEGGY ANNE PETROLEUM 77254 WILLAMS,CHARLES RAY JR "rt PROFESSIONAL ENGINEERING FIRM CERTIFICATION FIRM# FIRM NAME 15194 WARDLAW APPRAISAL GROUP LC 8 219 i WARDLAW WARDLAW APPRAISAL GROUP 2018 CAD CERTIFIED VALUES PROPERTY CLASSIFICATION Gl&G2(MINERAL) ILL&L2(PEso") 1(URM) F2&Fl(INDUSTRIAL REAL) CADTOTAL CAD ACCOUNTS VALUE ACCOUNTS VALUE ACCOUNTS VALUE ACCOUNTS VALUE ACCOUNTS VALUE BROOKS 7,912 $158,679,190 105 $13,611,780 168 $168,323,980 3 $590,420 8,188 $341,205,270 CHILDRESS 39 $325,1 19 $10,895,370 79 $206,231,170 0 SO 137 $217,451,680 DENTON 146,946 $916,544,3 351 $246,520,280 2,071 $1,288,776,340 0 SO 149,368 $2,451,840,980 EL PASO 0 $ 310 $1,969,095,060 321 $751,840,300 9 $858,642,040 640 $3,579,577,400 KENEDY 4,958 $111,456,97 80 $542,598,170 107 $208,21$400 2 $654,550 5,147 $862,928,090 KLEBERG 4,915 $54,354, 75 $52,873,840 294 $231,903,570 0 50 5,284 $339,031,470 RUNNELS 5,846 $27,126, 324 $75,003,610 200 $130,T77,450 56 $11,389,450 6,426 $244,296,950 STARR 30,453 $321,6, 211 $22,703,720 387 $355,949,880 11 $739,919,52C 31,062 $1,440,253,890 WfBB 59,928 $5,292,656,43 285 $494,686,590 311 $1,831,482,100 0 50 60,524 $7,618,825,120 ZAPATA 47,376 $421,553,180 163 555,816,940 192 5169,225,200 0 5L 47.731 $646,595,220 TOTALS 1 308,373 $ 6,882,823,360 1,923 $ 3,483,805,260 1 4,130 $ 5,342,628,290 81 $ 1,611,195,980 314,507 5 17,742,006,070 220 = WARDLAW 11%r APPRAISAL CERTIFICATION I certify that, to the best of my knowledge and belief The statements of fact contained in this report are true and correct The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and the personal, impartial and unbiased professional analysis, opinions and conclusions of either myself or of the other appraisers who support and appraise property for our client CDs. I have no present or prospective interest in the property that is the subject of this report. and I have no personal interest with respect to the parties involved. 1 have no bias with respect to any property that is the subject of this report or to the parties involve with this assignment. • My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amoun of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal • My analyses, opinion, and conclusions were developed. and this report has been prepared in conformity with the Uniform Standards of Professional Appraisal Practice. • We have made personal inspections of many but not all properties that are the subject of this report. • No one outside of Wardlaw Appraisal Group provided significant mass appraisal assistance to Wardlaw Appraisal Group personnel Charles R i s, E PA Date President WARDLAW APPRAISAL GROUP, L.C. 16601 Blanco Rd,Ste 100 s San Antonio,TX 78232 s 210.448.2000 i 210.408.0106 fax 221 WARDLAW APPRAISAL GROUP CLIENT APPRAISAL DISTRICT Reappraisal Plan 2019 - 2020 Contract Valuation Support Appraisal Responsibility Wardlaw Appraisal Group,LC(Wardlaw)provides complex property appraisal support services for client County and Central Appraisal Districts(CAD). Client CADs contract with Wardlaw because we have specialized expertise which the CADs may not have in appraising these complex properties. The complex properties Wardlaw appraises are generally referred to as mineral, utility.industrial,commercial and real properties and fall under the Texas Property Tax Classification Categories F,G,J,and L. The specific contract between Wardlaw and each client CAD specifies appraisal responsibilities. Generally.those responsibilities include discovering. inspecting. appraising. maintaining and providing ownership and valuation records for the specific properties that are the subject of the contract. The contracts establish that Wardlaw acts as an agent of the CAD to provide many of the appraisal and support services required under the Texas Property Tax Code and the Uniform Standard of Professional Appraisal Practices(USPAP).This document details the reappraisal practices that Wardlaw performs on behalf of CADs and is intended to be incorporated by CADs into their own Reappraisal Plan. Appraisal Calendar Wardlaw adheres to the property tax calendar as established by the State of Texas Property Tax Code.The Wardlaw appraisal calendar generally follows this schedule: November—June: Field Inspections of Properties January 1: Beginning of the Tax Year Prior to January 31: Rendition Request Letters mailed January 31: Last day for receipt of 25.25 protests from prior year April 161,15"or 30': Renditions due(dates dependent on County and property type) Around May 1: Mail Notices of Appraised Value May 1: Begin Equalization Process. Work with property owners to explain appraisals and work on formal and informal protests Around June 1: Mail Notices of Appraised Value for properties with an Extension Late June—Early July: ARB Hearings Mid-July: Deliver totals and Certified Rolls to CADS August—November: Process Property Supplements.Additions&Deletions November: Begin Field Appraisals for coming Tax Year 222 Reappraisal Plan 2019-2020 Wardlaw Client Appraisal Districts Page 2 Equalization Period Preliminary values established by the 25.19 Notices of Appraised Value are subject to change during the equalization period.These changes can be initiated by property owner formal or informal protests. The changes can also be initiated by Wardlaw if new information regarding a property becomes available. Formal and informal protests on the mineral,utility, industrial. commercial and real properties are handled directly by Wardlaw.within the appropriate timetables established by the Property Tax Code.Wardlaw attempts to contact protesting taxpayers so that we can; 1)Provide the taxpayer an opportunity to explain the reason for their protest. 2)Explain the appraisal methodology and appraisal parameters used on each protested property, 3) Consider whether the preliminary appraisal should be adjusted considering taxpayer evidence, 4)Provide settlement and withdrawal paperwork to the taxpayer if appropriate. Wardlaw directly responds to taxpayer requests for appraisal information and supporting appraisal documentation by providing the requested information in a timely manner. Wardlaw then goes on to represent the CAD before the Appraisal Review Board(ARB)to justify appraised values for all protested properties that fall under the mineral. utility, industrial, commercial and real contract. Documentary evidence of formal and informal changes is then provided to the CAD and ARB in the form of Withdrawal of Protest Settlement waivers on formally protested accounts. The final values are then delivered for certification. Minerals (Oil and Gas Reserves) Valuation Process Appraisal Responsibility Minerals-in-place (oil and gas reserves) are real property classified as Category G property under the Texas Property Tax Code. As a commodity, minerals-in-place are part of a national market so there is no local market area to consider. Wardlaw performs an appraisal as of January 1 each year on every producing mineral property in the CAD to determine the market value of the oil and gas mineral reserves for ad valorem tax purposes. DCF analysis is the primary method used for appraising mineral properties. The Market Data Comparison Method of Appraisal (Section 23.013) and the Cost Method of Appraisal (Section 23.011) can be used when appropriate and when the necessary data is available. However. because the sales and purchase prices of oil and gas properties are not generally disclosed, the Market Data Comparison method is seldom used, and the Cost Method of Appraisal does not estimate the market value as defined in Section 1.04 of the Texas Property Tax Code. 223 Reappraisal Plan 2019-2020 Wardlaw Client Appraisal Districts Page 3 Discounted Cash Flow(DCF)analysis is the Income Method of Appraisal (Section 23.012 of the Texas Property Tax Code) and is used as the most appropriate technique for determining the market value of mineral properties. WAG uses DCF analysis to appraise every producing lease in the appraisal districts we support. The appraised value of each lease is distributed to each working interest, royalty interest, and overriding royalty interest owner based upon their decimal interest in the lease. Mineral interests are commonly divided into property ownership interests known as working interests,overriding interest,and royalty interests. The valuation of each type of interest begins with the valuation of the producing well on the mineral lease.That value is then allocated to the property ownership interests based on the decimal ownership value identified in the division orders for each lease. It is the goal and purpose of the CAD to identify every producing mineral property within the district and estimate the market value of each property listed on the roll. Appraisal Resources Personnel—Wardlaw provides adequate personnel to meet all contract appraisal requirements. Data-A common set of production data for each mineral property account in each CAD is collected from the Texas Railroad Commission Records and data entered to the appraisal firm's computer. The property characteristic data is gleaned from the production data and drives the computer-assisted mineral property appraisal system. Railroad Commission records are searched to discover new leases as of January 1 of each year and descriptive information is gathered to determine the location of the lease within the CAD jurisdictional boundaries. Records are also reviewed for changes in production for existing wells,for abandoned wells, and for non-producing wells with salvage value for the equipment,tanks, and tubular goods. Production history for each mineral lease is gathered from HPDI. Drilling Info, Petroleum Information,and from the Texas Railroad Commission. Division Orders on each lease are requested annually from lease operators and checked against the existing division orders for changes as well as for accuracy of owner name. address, and ownership percentage interest. To help determine operating expense information on each active lease, lease-specific operating expenses are requested annually.A Confidential Lease Operating Expense Detail request letter is e-mailed or mailed,to the operators or agents representing operators requesting lease- specific operating expenses. To assist with the economic parameters influencing these properties.general economic data is gathered for the valuation process. The method of appraisal for minerals-in- place is the discounted cash flow analysis which looks at the net present value of the future income that is derived from operating the lease. Current interest rates, market rates of return and levels of discounting the investment are factors to consider when evaluating the returns necessary to attract investment capital for this type property. The annual capitalization rates are calculated using the"Manual for Discounting Oil and Gas Income"as developed by the Texas Comptroller's Office. Data is obtained from Ibbotson's SBBI Valuation Edition,Wall Street Journal, Standard& Poor's Bond Guide, and Value Line Investment Survey"Ratings and Reports". 224 Reappraisal Plan 2019-2020 Wardlaw Client Appraisal Districts Page 4 VALUATION AND STATISTICAL ANALYSIS (model calibration) Pt-icing, Operating Expenses find Reserve Analysis Crude oil and natural gas prices are required information in the valuation of mineral property because these prices are necessary to determine income to the lease and the economic life of the production from the lease. The crude oil sales price and natural gas sales price used for the first year of the appraisal analysis is based on the previous year's average price multiplied by the Price Adjustment Factor(PAF). The prices are then escalated or de-escalated for five(5) years according to the Texas Property Tax Code Sec.23.175 Section(a). Lease operating expenses are estimated based on rendered information,actual operating cost and expenses, and from surveys of lease operators in the CAD. The January 1 production starting rate is based on the actual production rate or upon a projection of past average production. The past oil and gas production history of the lease is analyzed to estimate the future rate of production decline of the lease. Other considerations include past lease expenses and recent operating parameters such as water production, workover operations,and secondary recovery efforts. Current operating income and expenses for the lease are calculated in a discounted cash flow model used by the appraiser to evaluate and estimate the net present value of producing oil and gas income from the lease. Discount rates established for each lease based upon the particular risks inherent with production of oil and gas from that property. The discounted cash flow model allows the appraiser to establish current market value of the lease based on the discounted value of the future estimated recoverable reserves. This methodology is approved and recommended by the Property Tax Division of the Comptroller's Office and is a recognized method of appraisal by industry standards. The appraisal firm has utilized the discounted cash flow model to estimate the market value of each lease located in each CAD. Value Review Procedures The method of value review for this type of property is based on the review of the factors estimated within the discounted cash flow analysis methodology such as the discount rate, product prices,and operating expenses. Evaluation and verification of these economic factors as to their validity within current economic times and based on current capital requirements for investment in this type property is re-confirmed and reviewed for reasonableness. Sales of mineral properties are considered but adequate sale data is usually not available due to difficulty in confirming sales. The market for this type of property is neither an active nor an efficient market,there are very few participants and pricing information is mostly confidential. There is no source for tracking these transactions and property owners are reluctant to reveal market information concerning prices paid or terms of the transaction. Because of a lack of market sales on mineral property, appraised values are regularly compared to similar properties within the same production field,field of exploration, strata of formation. or production history and expense level. Ratio studies are a source of comparison to evaluation level and uniformity of appraisal. When market sales are available the ratio study is based on a comparison of the appraised value to the sale price. For mineral property,which lacks available market sales.a ratio study is a 225 Reappraisal Plan 2019-2020 Wardlaw Client Appraisal Districts Page 5 comparison of another appraisal opinion with the opinion of the district to determine level and uniformity of appraisal. The Property Tax Assistance Division of the Comptroller's Office conducts biennial ratio studies of selected mineral properties to gauge the districts appraisal performance. The PTAD utilizes the same valuation methodology as the CAD to appraise individual mineral properties. This opinion of value is then utilized as market evidence with the same significance as if the property sold for that value. The estimated value of the property in each CAD is compared to the appraisal by the PTAD to calculate the ratio and the indicated level of appraisal_ This study indicates the median and mean levels of appraisal for mineral property and is considered reliable as a review and evaluation tool. Utility, Industrial & Commercial Property Valuation Process Appraisal Responsibility Utility. Industrial and Commercial properties are the tangible assets of various businesses including electric production, transmission,and distribution companies,railroads, petroleum product gathering and delivery pipelines, telephone and communication providers and others. Utility properties are identified in the Texas Property Tax Code as Category J property. Industrial properties are identified under the Texas Property Tax Codes as categories L2 (Industrial, Personal), F2(Industrial, Real)and L1 (Commercial).The valuation of these properties is considered to be complex due to the involvement of both tangible and intangible property elements that comprise these businesses and due to the size of some of the utilities that are regional and national companies. The appraisal of these companies becomes complex when considering the valuation of the property as a unit in place,evaluating the property by the approaches to value at the company level. The appraisal district does not have personnel qualified to perform this type of appraisal.An appraisal firm is employed to provide the expertise to perform this type of appraisal.Once the estimated value of the unit is determined by the appraisal firm. that estimated market value is allocated based on the tangible property assets that are located within each CAD. Appraisal Resources Personnel—Wardlaw provides adequate personnel to meet all contract appraisal requirements. Data-A common set of data characteristics for each utility, industrial and commercial property account in each CAD is collected from the various government regulatory agency records. field inspections,data resources, and property owner renditions. This data is entered to the appraisal firm's computer. Individual company financial information is gathered through industry specific governmental filings such as Federal Energy Regulatory Commission Reports, Securities and Exchange Commission 10-k filings. Railroad Commission and Public Utility Commission publications. Other company information is gathered from annual reports, internal appraisals.and other in-house and industry publications. Property owner renditions are requested in order to document and list property owned and located in our particular jurisdictions lie: track mileage,number of meters,pipeline size and mileage,substation and 226 Reappraisal Plan 2019-2020 Wardlaw Client Appraisal Districts Page 6 transmission capacity,etc.). The property characteristic data drives the computer-assisted appraisal of the property. The appraisal of utility and industrial property utilizes three-approach analysis to form an opinion of value for the property. Financial and capital market information is pertinent to understanding factors affecting valuation of complex property. It is necessary to gather financial data to attempt understanding investor and corporate attitudes for capital return expectations and to give consideration to return components such as current interest rates,capital debt structure, bond market rates,and capital supply and demand trends. These financial factors result in overall return rates and capital structure for these companies and affects capitalization rates. The weighted average cost of capital is the most commonly used method of estimating capitalization rates for utility properties. Capitalization rates are estimated using capital return expectations from various publications: Duff&Phelps Valuation Handbook,Wall Street Journal. Mergent Bond Record, Moody's Corporate Bond Yield Averages, Standard&Poor's Capital 10. Industry specific information is also gathered from web sites,publications, periodicals. and reference manuals. Wardlaw then estimates the capitalization rate for utility appraisal under the income approach. VALUATION AND STATISTICAL ANALYSIS (model calibration) Approaches to Valuation, Reconciliation Valuation of tangible assets for utility and industrial companies relies primarily on indications of value based on the cost and income approaches to value under the unit value approach. This methodology involves developing and estimating market value considering the entirety of the company's tangible assets and resolving an allocated value for that portion of specific tangible assets located in particular tax jurisdictions. The valuation opinion is based on three approach analysis utilized for the indicated unit appraisal of all company tangible assets,then an estimated allocation of unit value for only assets located in the district and particular jurisdictions. This methodology is approved and recommended by the Property Tax Assistance Division of the Comptroller's Office and is an accepted standard within the industry and appraisal community. Value Review Procedures Review of the valuation of utility property is based on verifying economic and financial factors utilized in the methodology as relevant to current capital markets and that these factors reflect current return expectations. Market sales of utility properties do occur and are a good source for comparison and review when the price of the tangible assets can be abstracted or allocated from the selling price. Typically, the sale of utility companies involve significant intangible property assets such as customer base,goodwill,favorable contracts,name recognition,etc. and the contributory value and allocation of these assets is subjective and unknown. In Texas. intangible property assets are exempt from taxation and must not be included on the appraisal roll as taxable property. Therefore, because of the lack of specific market information on sales of utility properties. appraised value is regularly compared to the valuation of similar property within the same set of property characteristics, business type and size. More of comparison for 227 Reappraisal Plan 2019-2020 Wardlaw Client Appraisal Districts Page 7 equity concerns on valuation rather than the full recognition of a market level certainty about appraisal level. Of course,the estimated value is based on recognized methodology for considering the valuation of these tangible assets, but true market confirmation of these factors may not be possible due to minimal market knowledge and experience. Ratio studies are also a method of review for relevance of appraisal valuation to market value. Again, in the absence of full disclosure of prices paid and without the abstraction of prices paid for the tangible asset components from recent utility property acquisitions or sales. market based analysis and review is not possible. Ratio studies for utility property must rely on a comparison of one appraisal opinion as the basis for the reasonable property valuation with the district's appraised value to determine the ratio for level and uniformity of appraisal. The PTAD conducts the annual ratio study of selected utility properties to gauge the appraisal district's performance. The PTAD utilizes the same valuation methodology to estimate appraisal valuations of utility properties and the results,when compared to the appraisal valuation estimated by the appraisal firm for these properties yield ratios. This ratio study of certain utility properties indicates the level and uniformity of appraisal for this category of property. 228 Reappraisal Plan 2019-2020 Wardlaw Client Appraisal Districts Page 8 STAFF PROVIDING SIGNIFICANT MASS APPRAISAL ASSISTANCE PROPERTY TAX APPRAISER CERTIFICATION TDLR# NAME TYPE 74200 GRAIN,MALLORY M. APPRAISER,RPA 73616 MCFARLANE,KATHLEEN M. APPRAISER,RPA 74717 SHERWIN,PROCTOR APPRAISER,RPA 66026 WARDLAW,PEGGY A. APPRAISER,RPA 70182 WILLIAMS,CHARLES R. APPRAISER, RPA 71700 WILLIAMS.HAZIEL M. APPRAISER,RPA PROFESSIONAL ENGINEERING CERTIFICATION PE# MANE BRANCH 76914 WARDLAW,PEGGY A. IPETROLEUM 77254 WILLAMS,CHARLES R. PETROLEUM PROFESSIONAL ENGINEERING FIRM CERTIFICATION ARM# FIRM NAME 5194 WARDLAW APPRAISAL GROUP LC 229 3.09 Valuation Bibliography Reference materials are used by the appraisal district to value or to verify rendered values for specific items, such as automobiles,trucks, aircraft,heavy construction equipment, etc. Sources include,but are not limited to,the following publications: DEPT#203—PERSONAL PROPERTY (1) VEHICLE REGISTRATION LIST (2) AIS—NEW CAR COST GUIDE (3) NADA—USED CAR GUIDE (4) NADA—OLDER USED CAR GUIDE (5) NADA—COMMERCIAL TRUCK GUIDE (6) NATIONAL MARKET REPORT TRUCK BLUE BOOK (7) NATIONAL MARKET REPORT OLDER TRUCK BLUE BOOK (8) INSURED AIRCRAFT TITLE LIST (9) AIRCRAFT BLUE BOOK PRICE DIGEST (10) MARSHALL& SWIFT—UPDATE (11) COLE DIRECTORY—DALLAS (12) COLE DIRECTORY—FORT WORTH ACCT#5340—DEED, SALES,AND VALUE INFORMATION (13) POLK CITY DIRECTORY (14) ZIP CODE DIRECTORY (15) NATIONAL MARKET REPORT TRUCK BODY (16) NATIONAL MARKET REPORT COMM TRAILER BLUE BOOK (17) COLE DIRECTORY—DENTON (18) VREF AIRCRAFT VALUE REFERENCE (19) APPRAISAL OF PERSONAL PROPERTY,VARIOUS TEXTS—PTD (20) GENERAL APPRAISAL MANUAL—STATE PROPERTY TAX BOARD An independent test of the appraisal performance of the district is conducted by the State of Texas Comptroller's Office through the annual property value study. The study determines the degree of uniformity and the median level of appraisals by the appraisal district within each major caLego of property. The comptroller publishes a report of the study,which includes in the report the median levels of appraisal for each major category of property,the coefficient of dispersion around the median level of appraisal for each category of property, and any other standard statistical measures that the comptroller considers appropriate. 230 2019 CALENDAR OF EVENTS January 2019 Appraisal Date (except for properties appraised under Sec 23.12(f)) BPP renditions and exempt property applications mailed March 2019 Field work for real property to be completed PTAD ARB Training for new members Oil &Gas Orientation PTAD ARB Training for existing members April 2019 Estimates of taxable value sent to entities(sent weekly until certification) BPP Rendition deadline (without extension request) Deadline for appraisers to turn work in for data entry Process real property appraisal notices Turn records over to the ARB Deadline for exemption applications including Ag, Freeport and Pollution Mail real property appraisal notices May 2019 Meeting with the City Managers of Denton County Mineral notices mailed Meeting with the Superintendents and Denton County Judge BPP rendition deadline (with extension) Process BPP appraisal notices Mail BPP appraisal notices Protest deadline for real property June 2019 ARB hearings begin Protest deadline for BPP Mineral hearings July 2019 ARB approves records Chief Appraiser certifies roll August 2019 EPTS& EARS reports submitted to PTAD Field work begins for next appraisal year September 2019 Appraisal date for Sec 23.12(f) properties "Actual day is tentative. 231 2020 CALENDAR OF EVENTS January 2020 Appraisal Date (except for properties appraised under Sec 23.12(f)) BPP renditions and exempt property applications mailed March 2020 Field work for real property to be completed PTAD ARB Training for new members Oil &Gas Orientation PTAD ARB Training for existing members April 2020 Estimates of taxable value sent to entities(sent weekly until certification) BPP Rendition deadline (without extension request) Deadline for appraisers to turn work in for data entry Process real property appraisal notices Turn records over to the ARB Deadline for exemption applications including Ag, Freeport and Pollution Mail real property appraisal notices May 2020 Meeting with the City Managers of Denton County Mineral notices mailed Meeting with the Superintendents and Denton County Judge BPP rendition deadline (with extension) Process BPP appraisal notices Mail BPP appraisal notices Protest deadline for real property June 2020 ARB hearings begin Protest deadline for BPP Mineral hearings July 2020 ARB approves records Chief Appraiser certifies roll August 2020 EPTS& EARS reports submitted to PTAD Field work begins for next appraisal year September 2020 Appraisal date for Sec 23.12(f) properties "Actual day is tentative. 232 Date: September 7, 2018 Report No. 2018-120 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: Overview of Keep Denton Beautiful Funding and information on how other cities fund Keep America Beautiful local affiliates. SUMMARY: The City of Denton has funded Keep Denton Beautiful since its inception in 1987. Keep Denton Beautiful (KDB) staff were previously housed in Planning and Parks and Recreation. KDB staff are now a part of the Solid Waste/Recycling budget. The KDB Division was moved to Solid Waste, is closely aligned with the work of the department. The Fiscal Year 2017-2018 KDB Division budget is $418,046. KDB programs such as Great American Cleanup, Redbud Festival, Community Tree Giveaway, Children's Arbor Day, Yard of the Month, Adopt-A-Spot, and youth and neighborhood grants, align with strategic goals of the City set forth in its Strategic Plan and other long-term planning tools such as Simply Sustainable and Denton 2030. Keep Texas Beautiful reported in 2017 that there were 155 active affiliates across the state. Statewide, affiliates are generally organized and funded in three different ways: • A stand-alone nonprofit with no connection (monetary or otherwise) to the municipal government. These affiliates are smaller and generally operate on a volunteer basis. • A city department without a nonprofit connection. • A hybrid organization with a connection to the City, either through direct budget expenditure and/or staff, and a nonprofit arm. KDB is a hybrid model, comprised of a City Division as well as a nonprofit agency. Of the 155 affiliates in Texas, eighteen of them operate as a hybrid like KDB,including Keep Allen Beautiful and Keep Irving Beautiful. The remaining Keep Texas Beautiful affiliates are evenly split between being a stand-alone 501(c)(3) nonprofit organization and a City-funded operation. Due to the missions of Keep America Beautiful and Keep Texas Beautiful focusing on beautification, litter prevention, and recycling,affiliates are typically housed in solid waste, environmental services,or code enforcement departments. On September 25 the Denton City Council will be asked to consider adoption of a formal agreement with the Keep Denton Beautiful to clarify the roles and responsibilities of City staff and the Keep Denton Beautiful Board of Directors. To-date, the only feedback provided by the Board of Directors is that they have forwarded the draft agreement to their attorney and will allow him to respond moving forward. STAFF CONTACT: Katherine Barnett Sustainability 940-349-2802 Date: September 7, 2018 Report No. 2018-121 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: Inclusion of Top 20 Taxpayer representatives on the Economic Development Partnership (EDP) Board EXECUTIVE SUMMARY: Since the formation of the Economic Development Partnership Board by the City Council in 2003, two Board members "will be, or be employed by, a top twenty City of Denton ad valorem or sales tax payer," and such members must reside or work in Denton. While the board composition has been expanded over the past 15 years to include more diversity of perspective and experience, that membership category has remained unchanged due to the unique view these members bring on locating and expanding large companies in Denton and the particular workforce needs of the largest local employers, as well as the business background and financial experience of the individual members themselves. BACKGROUND: In 2001, at the direction of Mayor Euline Brock, City staff organized a community symposium called"Denton Tomorrow" in order to share the City Council's vision for the future of Denton and its economic development and solicit feedback from residents. A retreat, facilitated by the consulting firm TIP Strategies then was held to further discuss and refine the ideas and concepts gathered at the symposium; City Council and City staff, Denton Chamber of Commerce Board leaders and staff, Denton County, Denton ISD,North Central Texas College, Texas Woman's University, and University of North Texas all participated in the retreat as stakeholders in local economic development. In 2002, those stakeholders began a series of steering committee and task force meetings that ultimately resulted in a detailed strategic plan for economic development. That plan included the creation of an economic development partnership board to oversee plan implementation and ongoing economic development activities by the City and the Chamber. In 2003, the Council approved the economic development strategic plan and officially created the Economic Development Partnership Board. The original composition of the EDP Board was two City Council members, two members of the Denton Chamber of Commerce Board of Directors, two Top 20 tax payers, and the President of the University of North Texas. These seven voting members represented stakeholders in Denton's government, business, and higher education sectors. The City Manager and the President of the Denton Chamber of Commerce were ex-officio members. In 2011, due to a new emphasis on recruitment of business to locate or expand at Denton Enterprise Airport, Council added one member to the EDP Board who has "knowledge or experience in general aviation-related matters."At the same time, an at-large seat was added for a"citizen of the City of Denton"who "has specific knowledge, skills, and abilities to assist in all Date: September 7, 2018 Report No. 2018-121 or any one of the functions and responsibilities of the Economic Development Partnership Board." This brought the total voting membership of the EDP Board to nine. In 2014, the Council determined that due to the impact economic development has upon the Denton Independent School District, it was in the public interest to add the Superintendent of DISD as an ex-officio member. In 2015, the Council expressed an interest in diversifying the membership of the EDP Board and determined it was in the public interest to modify the Board's membership to include participation of the Denton Black Chamber of Commerce and the Denton Hispanic Chamber of Commerce. Total Board voting membership was now 11. In 2016, in recognition of Texas Woman's University's contributions to Denton's economy, Council determined it was in the public interest to add a seat to the EDP Board for the TWU Chancellor and President; this brought Board voting membership to 12, where it remains today. DISCUSSION: One significant activity of the economic development partnership between the City and the Chamber is to recruit and expand companies that bring quality jobs for citizens and significant ad valorem or sales volume to grow the local tax base. These particular efforts often focus on larger companies, which have unique needs in site selection, workforce, utilities, transportation, etc. The Top 20 taxpayer members can provide perspective to staff and fellow Board members on all these issues, because they deal with them in the location, expansion, and operation of their companies. They also serve as a valuable resource in the vetting of such companies' projects and the financial information they submit when applying to the City for incentives because they often have experience with projects of similar size and scale. The expansion of the EDP Board membership over the years has added new and valuable perspectives of small business owners and has allowed for more gender and racial inclusion. As a whole, the board membership makeup allows for a wide range of viewpoints based on diverse experience with business operations of different sizes and in different sectors. ATTACHMENT(S): Ordinance No. 2017-203 STAFF CONTACT: Caroline Booth Caroline.Booth(_a,cityofdenton.com 940.349.7751 ORDINANCE NO. 2017-203 AN ORDINANCE REPEALING ORDINANCE NO. 2003-258, AND SUBSEQUENT AMENDMENTS UNDER ORDINANCE NO. 2011-042, ORDINANCE NO. 2014-009, ORDINANCE NO. 2015-074, AND ORDINANCE NO. 2016-249, RELATING TO THE CREATION, APPOINTMENTS, AND DUTIES OF THE ECONOMIC DEVELOPMENT PARTNERSHIP BOARD (THE"BOARD")AND REPLACING THESE ORDINANCES WITH THIS ORDINANCE RELATING TO THE CREATION, APPOINTMENTS, AND DUTIES OF THE ECONOMIC PARTNERSHIP BOARD IN ORDER TO CLARIFY THE QUALIFICATIONS AND LIMITATIONS OF BOARD MEMBERS; AMENDING THE DENTON CODE OF ORDINANCES, CHAPTER 2, ARTICLE IX; AND PROVIDING FOR A REPEALER AND CONFLICT CLAUSE AND AN EFFECTIVE DATE. WHEREAS, in 2003, the City Council of the City of Denton, Texas, determined that is was beneficial and in the public interest to establish an Economic Development Partnership Board to provide economic development policy guidance for the City and adopted Ordinance No. 2003- 258 (the "Ordinance"), which ordinance was codified in the Denton Code of Ordinance, Chapter 2, Article IX; and WHEREAS, in 2011,the City Council amended the Ordinance by adopting Ordinance No. 2011-042 in order to add two seats to the Board, consisting of an at-large position and a position for a member with general knowledge of or experience in general aviation,and to expand the duties of the Board to include branding and marketing for Denton Municipal Airport; and WHEREAS, in 2014,the City Council amended the Ordinance by adopting Ordinance No. 2014-009in order to add the Superintendent of the Denton Independent School District as an ad hoc non-voting member of the Board; and WHEREAS, in 2015,the City Council amended the Ordinance by adopting Ordinance No. 2015-074 in order to add two seats to the Board, one for a representative nominated by the Denton Black Chamber of Commerce Board of Directors and one for a representative nominated by the Denton Hispanic Chamber of Commerce Board of Directors; and WHEREAS, in 2016,the City Council amended the Ordinance by adopting Ordinance No. 2016-249 in order to add one seat to the Board for the Chancellor and President of Texas Woman's University; and WHEREAS, in 2017, the City Council determined that it is beneficial and in the public interest to repeal the Ordinance and subsequent amendments in order to clarify and refine the Board member qualifications, terms, duties, and responsibilities; NOW THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. Findings. 1 The findings contained in the preamble of this Ordinance are incorporated into the body of this Ordinance. SECTION 2. The Code of Ordinances of the City of Denton, Chapter 2, Article IX is hereby amended by deleting it in its entirety and replacing it with the following: ARTICLE IX. ECONOMIC DEVELOPMENT PARTNERSHIP BOARD "Sec. 2-251. Creation, Members, Qualifications, and Tenure. A. There is hereby created a City of Denton board entitled the Denton Economic Development Partnership Board (the "Board"). The Board shall consist of twelve members. Six members shall be appointed for a two-year term in even-numbered years, and six members shall be appointed for a two-year term in the odd-numbered years. No member shall serve more than three consecutive terms; members who have served three consecutive terms are eligible for re- nomination after one year off the Board. The President of the University of North Texas ("UNT") and the Chancellor of Texas Woman's University ("TWU") or his or her designee may serve unlimited terms but must be re-nominated upon the expiration of each term. B. The Board members shall be appointed by the City Council and shall serve at the City Council's pleasure. To aid the City Council in making appointments to the Board, the City Council will appoint two City Council members and one Chamber of Commerce ("Chamber") member to act as a nominating committee ("Committee"). The Committee members are qualified for appointment to the Board. The Committee will solicit nominations, contact nominees to relate duties and responsibilities, and to confirm willingness to serve. The Committee will solicit recommendations from the Chamber Board of Directors, the President of UNT, the President and Chancellor of TWU,the Denton Black Chamber of Commerce Board of Directors, and the Denton Hispanic Chamber of Commerce Board of Directors.If any such recommendation is not submitted, the Committee will consider the racial, ethnic,and gender diversity objectives of the City Council, as well as the knowledge, skills, and abilities of the nominees to assist in any one or all of the functions of the Board when making its nomination recommendations to the City Council. After evaluating the recommended nominees, the Committee will present to the City Council a slate of Board nominees for City Council approval. C. Notwithstanding anything contained herein to the contrary, the membership makeup of the Board shall consist of the following: 1. Two members of the Board shall be City Council members at the time of their appointment. If such a member is no longer on the City Council, their appointment to the Board is terminated and their unexpired term shall be filled by a currently serving City Council member. Such members must be residents of the City of Denton. 2. Two members of the Board shall be members of the Denton Chamber of Commerce Board of Directors("Chamber Board"),which are nominated by the 2 Chamber Board, at the time of their appointment. If such a member is no longer on the Chamber Board, their appointment to the Board is terminated and their unexpired term shall be filled by a currently serving Chamber Board member. Such members must reside or work in the City of Denton. 3. Two members will be, or must be currently employed by, a top 20 City of Denton ad valorem or sales tax payer. Such members must reside or work in the City of Denton. If such a member is no longer a top 20 City of Denton taxpayer or employed by one, their appointment to the Board is terminated and their unexpired term shall be filled by a current City of Denton top 20 taxpayer or City of Denton top 20 taxpayer employee. 4. One member will be the President of UNT or a UNT faculty or staff member designated by the President. Such member need not reside in the City of Denton. 5. One member will be the Chancellor and President of TWU or a TWU faculty or staff member designated by the Chancellor and President. Such member need not reside in the City of Denton. 6. One member will have knowledge or experience in general aviation-related matters and shall have no financial interest in matters at the Denton Enterprise Airport. This member must reside or work in the City of Denton. 7. One member will be a citizen of the City of Denton who, in the discretion of the City Council, has specific knowledge, skills, and abilities to assist in all or any one of the functions and responsibilities of the Board. 8. One member will be nominated by the Denton Black Chamber of Commerce Board of Directors. This member must reside or work in the City of Denton. 9. One member will be nominated by the Denton Hispanic Chamber of Commerce. This member must reside or work in the City of Denton. 10. The City Manager,the President of the Chamber, and the Superintendent of the Denton Independent School District will serve as ad hoc ex officio(non-voting) members of the Board. D. The Board shall elect its chairperson and vice-chairperson from among its members, who shall serve for one-year terms or until his or her successor is elected or qualified. The Board may remove and reelect a chairperson or vice-chairperson at any time with an affirmative vote of at least 10 members. 3 E. Board members shall serve without compensation. Board members may be allowed out-of-pocket expenses for activities performed in furtherance of their duties to the Board. Such expenses must be pre-approved by the City Manager if paid for out of City funds, or the Chamber President if paid for out of Chamber funds. Sec. 2-252. Meetings. The Board shall meet on a regular basis and no less than on a quarterly basis. Monthly meetings are encouraged. The chairperson, vice-chairperson, or any five Board members may call any regular or special meeting. Notice of the meetings shall be posted and the meetings shall be conducted in accordance with the Texas Open Meetings law,being Chapter 551 of the Government Code, as amended. A majority of the qualified voting members of the Board shall constitute a quorum for the transaction of business at any meeting of the Board. The act of a majority of the qualified voting members of the Board present at a meeting at which a quorum is present shall be the act of the Board. Sec. 2-253. Rules of Procedure. The Board shall adopt rules of procedure governing the operation of the Board incorporating Section 2-29 of City Council Rules of Procedure insofar as it is possible. Sec. 2-254. Duties and Responsibilities of the Board. The role of the Board is to provide economic development policy guidance. The Board may make recommendations to the City Council and Chamber Board of Directors. The Board's duties include: A. The Board may create committees or task forces consisting of Board members and/or non-Board members to assist with the implementation of projects or activities. Committee or task force chairpersons shall be appointed by the Board and will serve at the pleasure of the Board. B. The Board will be responsible for designing economic development incentive policies and recommending those policies to the City Council for adoption. These policies may include tax abatement, Chapter 380 agreements, infrastructure assistance, etc. In making any recommendations, the Board shall comply with applicable law. It will be the Board's responsibility to review policies of other cities and to be informed as to legislative changes affecting state and local incentive programs. C. The Board shall act as the recommending body to the City Council for economic development incentives authorized by law for specific projects, including without limitation tax abatements and incentives authorized under Chapter 312 of the Tax Code, 4 economic development agreements authorized under Chapter 380 of the Local Government Code, public improvement districts authorized under Chapter 372 of the Local Government Code, and certain Downtown Reinvestment Grants under Ordinance No. 2012-001. However, utility incentives based on thresholds, such as Denton Municipal Electric's Economic Growth Rider and the Water/Wastewater Plan Line Extension may be made without Board review or recommendation. Nothing herein shall be construed so as to invalidate an economic development incentive authorized by the City Council that did not receive a recommendation from the Board. D. The Board will review, consider, and make recommendations to the City Council regarding marketing and branding for the Denton Enterprise Airport. The Board will review, consider, and make recommendations to the City Council regarding Denton Enterprise Airport incentive policies, as assigned by the City Council or requested by the City Manager,and will act as a recommending body to the City Council for specific airport economic development incentives, as assigned by City Council or requested by the City Manager and permitted by City and State law." SECTION 3. Ordinances 2003-258, 2011-042, 2014-009, 2015-074, and 2016-249 are hereby repealed and are replaced with this Ordinance provided, however, that the repeal of any such ordinance or code or part thereof shall not revive any other section or part of any ordinance or code heretofore repealed or superseded. This ordinance supersedes any provision in any City ordinance that is in conflict with this ordinance including without limitation any conflicting provisions of Sections 2-61 through 2-65 of the Code of Ordinances of the City of Denton. SECTION 4. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of ..�m, 2017. CHRIS WATTS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: .. .. A' .. ... APPR( 1 D AS T LEGAL FORM: AARON EAL, INTERIM CITY ATTORNEY 5 Date: September 7, 2018 Report No. 2018-122 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: Denton Municipal Electric Base Rate Sensitivity Analysis EXECUTIVE SUMMARY: The City Council requested information on the cost impact of lowering Residential base rates and offsetting the resulting revenue decrease with an increase to Commercial base rates. BACKGROUND: The electric base rates are set annually with Public Utility Board(PUB) input and approval by City Council. The base rates are reviewed by staff during the annual budget process. In addition, a"cost of service" study is completed by an outside entity every four to five years on the electric rates. DISCUSSION: Below is a table showing the base rate sensitivity analysis. If Residential base rates were reduced 1%, this would result in a revenue reduction of$424,000 and would reduce the average Residential customer's bill by about $11.58 annually. Two options available to offset this revenue reduction are as follows: 1. Commercial base rates (this includes General Service Small and General Service Medium rate classes) could be increased by 2.4% ($424,000). This results in the average Commercial customer's bill increasing approximately$23.85 annually. 2. Commercial and Industrial base rates could be increased 1% each, resulting in a total revenue increase of about $399,000. This would cause Commercial customer's bill to increase approximately$9.94 annually and an Industrial customer's bill to increase approximately$6.34 annually. Electric Base Rate Sensitivity Analysis Annual Amount Rate Percentage Amount Per Customer Base Rate Residential -1.0% $ (424,000) $ (11.58) Base Rate Commercial 2.4% $ 424,000 $ 23.85 Base Rate Commercial 1.0% $ 177,000 $ 9.94 Base Rate Industrial 1.0% $ 222,000 $ 6.34 Base Rate Comm & Ind 1.0% $ 399,000 $ 16.28 Date: September 7, 2018 Report No. 2018-122 Attached are three graphs that compare the Fiscal Year 16-17 actual MWhs, Meters and Revenues by Class. These graphs illustrate that DME has a greater proportion of Residential meters, 88% of all meters, which use 38% of MWhs and provide 43% of Rate Revenue. Historically, and as confirmed by the preliminary results of the 2018 Cost-of-Service study, residential electric rates are subsidized by about 10%. This had been a common practice throughout the electric industry in the past, however, electric utilities are reducing/eliminating rate subsidies for residential customers from a fairness/equity standpoint and in recognition that many commercial/industrial customers are electric rate "sensitive". ATTACHMENT(S): FY 16-17 Electric MWh and Meter by Class Comparison FY 16-17 Electric Revenue and MWh by Class Comparison FY 16-17 Electric Revenue and Meters by Class Comparison STAFF CONTACT: George Morrow, Denton Municipal Electric General Manager FY 16- 17 Electric MWh and Meters by Class FY 16-17 Electric MWh by Class FY 16-17 Electric Meters by Class 139 560 15,708 0.27 1.08% 0 1.08% 5,294 10.20% 555,350 582,670 38.31% 40.20% 45,922 88.46% 295,856 20.41% Residential Commercial Industrial Other Residential Commercial Industrial Other FY 16- 17 Electric MWh and Meters by Class nI Residential Commercial Industrial MWh by Class 555,350 582,670 ;70 8 11449,584 Meters by Class 451922 5,294 139 560 51,915 Date: September 7, 2018 Report No. 2018-123 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: Texas Open Meetings Act Training BACKGROUND: The City Attorney's Office (CAO)recently received a request from the City Council for additional training on the requirements of the Texas Open Meetings Act ("TOMA"). Over the last few years, the CAO has provided two live trainings for the City Council. The first training was provided August 8, 2017. The second training was provided on February 7, 2017. For your convenience, below are direct links to the full video of each TOMA presentation: 1. August 8, 2017 -http://denton- tx.granicus.com/MediaPlayer.php?view_id=3&clip_id=1473&meta id=158558 2. February 7, 2017 -http:Hdenton- tx.granicus.com/MediaPlayer.php?view id=3&clip_id=13 84 1 In addition to the two TOMA trainings provided this year by the CAO, supplemental guides and training materials on TOMA are available at the following links: 1. Texas Attorney General's Office—Video Training on TOMA: https://www.texasattomeygeneral.gov/og/oma-training 2. Texas Attorney General's Office - TOMA Handbook(2018): https://texasattomeygeneral.gov/files/o./O�MA_handbook_2018.pdf 3. Texas Attorney General's Office -PowerPoint on TOMA (2015): https://twc.texas.gov/files/partners/2016-conference-transparency- government%5be2cb8e21%5d.pdf 4. Texas Municipal League - TOMA Made Easy(2017): https://www.tml.org//p/The%20Texas%200pen%2OMeetings%2OAct%2OMade%2OEasy %202017.pdf 5. Texas City Attorneys Association Conference— Social Media Issues (2018): https://texascityattorneys.org/wp-content/uploads/2018/06/Lockhart_When-Can-My- City-Delete-Paper.pdf 6. Riley Fletcher Basic Municipal Law Seminar—Open Meetings Act Basics (2018): hgps://texascityattomeys.org/wp-content/uploads/2018/02/Kennard Texas-Open- Meetings-Act.pdf 'The TOMA presentation is item E and begins at 2:41:38. Date: September 7, 2018 Report No. 2018-123 The Texas Attorney General ("AG") video training satisfies the statutory requirement imposed on public officials to complete open meetings act training. Additionally, the AG training allows public officials to obtain a course completion certificate by following the directions on the training vide02. While we have provided links to a few of the most frequently referenced resources, please be aware that this is not a comprehensive list of all of the available resources on TOMA. If any Council Member would prefer we schedule a live TOMA training for City Council with an outside facilitator please let us know and we can include this as an item for review and discussion during the September 18 Work Session. STAFF CONTACT: Aaron Leal, City Attorney z Direct link to obtain course completion certificate:https://texasattorneygen era l.goy/forms/openrec/og certificates.ph p Council Requests for Information Revision Date 09/07/2018 Request Request Date Staff Responsible Status Requested B TWU master plan and how trees are impacted;can TWU will give a brief presentation on their Master Plan 1 trees be saved and protected;next steps. 5/1/2018 McDonald during the September 18 work session. Briggs Present information gas well setback requirements including a history of setbacks in Denton and setback 2 requirements in other cities. 6/19/2018 Banks/Leal/McDonald Awork session is scheduled for September 11. Meltzer ISR will be provided following a staff conversation with the Information on implementing a similar program to City of Southlake.Will be considered with the list of future 3 Southlake's SPIN program in Denton. 6/26/2018 McDonaldBirdseye work session items on September 18. Armintor TOMA training for the full City Council using an ISR is included in the September 7 Friday report.Will be 4 outside facilitator. 6/26/2018 Leal considered with future work session items on September 18. Armintor Work session on permitting options to incentivize affordable housing including a survey of practices 5 from other municipalities. 6/26/2018 Kuechler A work session is planned for September 25. Armintor Information regarding the use of project names used ir ISR is being prepared.Will be considered with the list of 6 conjunction with economic development projects. 6/26/2018 Booth future work session items on September 18. Armintor Work session providing an overview of the City's Smoking Ordinance and considerations made for civil ISR is being prepared.Will be considered with the list of 7 liberties. 6/26/2018 Rosendahl/Kuechler future work session items on September 18. Armintor Develop a strategic plan for homeless shelters in Denton(current environment,capacity,need, Information on the first Shelter Planning Workgroup meeting emergency circumstances,best practices,family is included in the September.Staff will provide updates as 8 shelter options). 7/17/2018 Kuechler the work progresses. Armintor/Briggs/Meltzer ISR was included in the August 31 Friday report.Will be Information on the potential establishment of a citizen considered with the list of future work session items on 9 advisory committee on disabilities. 7/17/2018 Canizares/Wood September 18. Armintor Revise the Council Rules of Procedure to amend the tie-vote provision as it impacts the Planning&Zoning 10 Commission. 7/17/2018 Leal/Wood Awork session is scheduled for September 11. Watts/Hudspeth Comprehensive review and possible revisions to the ISR is being prepared.Will be considered with the list of 11 Council Rules of Procedure. 7/17/2018 Leal future work session items on September 18. Watts Overview of Keep Denton Beautiful funding and information on how other cities fund their Keep 12 America Beautiful local affiliates. 7/17/2018 CanizaresBanks ISR is included in the September 7 Friday report. Armintor ISR is being prepared.A work session will be scheduled for 13 Overview of the Homestead Exemption process. 7/17/2018 Puente/Langley fall 2018. Armintor Information on Code Enforcement including overview of purpose,enforcement,and complaint response Will be considered with the list of future work session items 14 practices. 7/24/2018 Lahart/Wood on September 18. Armintor Council Requests for Information Revision Date 09/07/2018 Request Request Date Staff Responsible Status Re uested B Information on the Tree Code and development of a cross-departmental strategy to address tree canopy 15 preservation. 7/24/2018 McDonald/Banks A work session is scheduled for September 18. Meltzer Work Session on DCTA,including the City's role in 16 the current agreement and the services received. 7/24/2018 Canizares/Nelson A work session is planned for November. Watts ISR on the number of consultants the City has hired and the total amount spent on those contracts since 17 2017. 8/2/2018 Puente/Langley ISR is provided in the September 7 Friday report. Briggs Update on marketing/advertising policy and naming ISR is being prepared.Will be considered with the list of 18 opportunities at City facilities. 8/2/2018 Langley/Packan future work session items on September 18. Hudspeth Information on trespassing enforcement in public 19 parks. 8/7/2018 Packan/Smith ISR will be provided in a future Friday report. Armintor Work Session on diversity in the Fire Department, including barriers to employment for underrepresented ISR is being prepared.Will be considered with the list of 20 groups. 8/7/2018 Lahart/Hedges future work session items on September 18. Briggs/Armintor/Watts Have Modern Geoscience monitor and inspect the 21 DEC. 8/21/2018 Morrow/Banks Information will be provided in a future Friday report. Briggs Information on the feasibility of dividing Greensense 22 rebates between residential and commercial customers 8/21/2018 Morrow Information will be provided in a future Friday report. Briggs ISR was included in the August 31 Friday report.Will be considered with the list of future work session items on 23 Information on traffic calming options. 8/21/2018 Deshmukh September 18. Briggs Information from Police on drug use trends across the 24 community. 8/21/2018 Smith/Mayo Information will be provided in a fixture Friday report. Briggs Prepare a list of background friendly and rent restricted housing options and make it available on the Information will be provided in the September 14 Friday 25 Community Development webpage. 8/21/2018 Kuechler report. Briggs Include carbon dioxide equivalent emissions with the Information will be provided in the September 7 Friday 26 next DEC emissions report. 8/21/2018 Morrow report. Briggs Work Session to discuss the development of a statement on the Confederate Monument in the ISR is being prepared.Will be considered with the list of 27 Courthouse Square. 8/21/2018 Wood fixture work session items on September 18. Armintor ISR is included in the September 7 Friday report.Will be Reconsider Top 20 Taxpayer board member category considered with the list of fixture work session items on d29 for the Economic Development Partnership Board. 8/21/2018 Booth September 18. Armintor Referral to the Ethics Board to clarify that the board is Will be considered with the list of fixture work session items not a court of law and reconsider time limits. 8/28/2018 Langley/Rosendahl/Lansford on September 18. Watts Council Requests for Information Revision Date 09/07/2018 Request Request Date Staff Responsible Status Requested B ISR and Legal Status Report were distributed on August 24. Work Session on funding to provide City sponsored Will be considered with the list of future work session items 30 legal services to immigrants and low-income residents 8/28/2018 Kuechler/Wood on September 18. Armintor 31 Staff Report on MHMR Funding. 8/28/2018 Kuechler ISR will be provided in a future Friday report. Annintor Staff report on communication plan and public 32 accommodations for upcoming capital projects. 8/28/2018 Rogers/Estes ISR will be provided in a future Friday report. Meltzer Sensitivity analysis on raising electric rates to offset 33 residential rate decrease. 8/28/2018 Morrow ISR is provided in the September 7 Friday report. Briggs/Armintor Analysis on the utility late payment fee for commercial customers,including the number of 34 commercial customers that are typically late. 8/28/2018 Langley/Puente/Thomson ISR will be provided in a future Friday report. Briggs Information outlining the justification for having 35 utility rates cover the Chamber ED contract. 8/28/2018 Booth Information is provided in the September 7 Friday report. Briggs Model outlining the correlation between the Chamber ED contract and its impact on retaining an recruiting 36 businesses. 8/28/2018 Booth/Morrow/Banks/Puente ISR will be provided in a future Friday report. Meltzer Cityof Denton City Hall 215 E. McKinney St. Denton,Texas 76201 www.cityofdenton.com DENTON Meeting Agenda City Council Tuesday, September 18, 2018 1:00 PM Work Session Room&Council Chambers After determining that a quorum is present, the City Council of the City of Denton, Texas will convene in a Work Session on Tuesday, September 18, 2018 at 1:00 p.m. in the Council Work Session Room at City Hall, 215 E.McKinney Street,Denton,Texas at which the following items will be considered: 1. Citizen Comments on Consent Agenda Items This section of the agenda allows citizens to speak on Consent Agenda Items only. Each speaker will be given a total of three (3) minutes to address any items he/she wishes that are listed on the Consent Agenda. A Request to Speak Card should be completed and returned to the City Secretary before Council considers this item. 2. Requests for clarification of agenda items listed on the agenda for September 18,2018. 3. Work Session Reports A. ID 18-1361 Receive a report from Texas Woman's University and hold a discussion regarding their Master Plan. B. ID 18-1368 Receive a report, hold a discussion and give staff direction regarding alignment options for the Bonnie Brae Phase 4 Widening and Improvements project from IH 35 E to Scripture. C. ID 18-1450 Receive a report, hold a discussion, and provide staff direction regarding City Council priorities for upcoming work session report topics. Following the completion of the Work Session, the City Council will convene in a Closed Meeting to consider specific items when these items are listed below under the Closed Meeting section of this agenda. The City Council reserves the right to adjourn into a Closed Meeting on any item on its Open Meeting agenda consistent with Chapter 551 of the Texas Government Code,as amended,or as otherwise allowed by law. 1. Closed Meeting: ANY FINAL ACTION, DECISION, OR VOTE ON A MATTER DELIBERATED IN A CLOSED MEETING WILL ONLY BE TAKEN IN AN OPEN MEETING THAT IS HELD IN COMPLIANCE WITH TEXAS GOVERNMENT CODE, CHAPTER 551, EXCEPT TO THE EXTENT SUCH FINAL ACTION, DECISION, OR VOTE IS TAKEN IN THE CLOSED MEETING IN ACCORDANCE WITH THE PROVISIONS OF §551.086 OF THE TEXAS GOVERNMENT CODE (THE `PUBLIC POWER EXCEPTION'). THE CITY COUNCIL RESERVES THE RIGHT TO ADJOURN INTO A CLOSED MEETING OR EXECUTIVE SESSION AS AUTHORIZED BY TEX. GOV'T. CODE, §551.001, ET SEQ. (THE TEXAS OPEN MEETINGS ACT) ON ANY ITEM ON ITS OPEN MEETING AGENDA OR TO RECONVENE IN A CONTINUATION OF THE CLOSED MEETING ON THE CLOSED MEETING ITEMS NOTED ABOVE, IN ACCORDANCE WITH THE TEXAS OPEN MEETINGS ACT, INCLUDING, WITHOUT LIMITATION §551.071-551.086 OF THE TEXAS OPEN MEETINGS ACT. Page 1 Printed on 91712018 City Council Meeting Agenda September 18,2018 Regular Meeting of the City of Denton City Council at 6:30 p.m. in the Council Chambers at City Hall, 215 E. McKinney Street,Denton,Texas at which the following items will be considered: 1. PLEDGE OF ALLEGIANCE A. U.S. Flag B. Texas Flag "Honor the Texas Flag—I pledge allegiance to thee,Texas,one state under God,one and indivisible." 2. BUDGET ITEMS FOR INDIVIDUAL CONSIDERATION A. ID 18-1453 Consider adoption of an ordinance of the City of Denton, Texas, levying the ad valorem property tax of the City of Denton, Texas, for the year 2018, on all taxable property within the corporate limits of the city on January 1, 2018, and adopting a tax rate of $0.620477 per $100 of valuation for 2018; providing revenues for payment of current municipal maintenance and operation expenses and for payment of interest and principal on outstanding City of Denton debt; providing for limited exemptions of certain homesteads; providing for enforcement of collections; providing for a severability clause; and providing an effective date. B. ID 18-1454 Consider adoption of an ordinance of the City of Denton, Texas, approving the 2018 tax rolls; and providing an effective date. C. ID 18-1456 Consider adoption of an ordinance of the City of Denton, Texas, adopting the Fiscal Year 2018-2019 Annual Program of Services (Budget) and the Capital Improvement Program of the City of Denton, Texas, for the fiscal year beginning on October 1, 2018, and ending on September 30,2019;and declaring an effective date. D. ID 18-1457 Consider adoption of an ordinance of the City of Denton, Texas, ratifying the adoption of the Fiscal Year 2018-2019 Annual Program of Services (Budget) and the Capital Improvement Program of the City of Denton, Texas, for the fiscal year beginning October 1, 2018, and ending on September 30, 2019 when the Budget will raise more revenue from property taxes than last year's budget; and providing an effective date. 3. PROCLAMATIONS/PRESENTATIONS A. ID 18-1512 Effie Ruth Webb McQueen Day B. ID 18-1513 Barney Cosimo Day 4. PRESENTATION FROM MEMBERS OF THE PUBLIC A. Review of procedures for addressing the City Council. Page 2 Printed on 91712018 City Council Meeting Agenda September 18,2018 B. Receive Scheduled Citizen Reports from Members of the Public. This section of the agenda permits any person who has registered in advance to make a citizen report regarding a public business item he or she wishes to be considered by the City Council. This is limited to no more than four (4) speakers per meeting with each speaker allowed a maximum of four (4) minutes to present their report. At the conclusion of each report, the City Council may pose questions to the speaker or may engage in discussion. If the City Council believes that a speaker's report requires a more detailed review, the City Council will give the City Manager or City Staff direction to place the item on a future work session or regular meeting agenda and advise staff as to the background materials to be desired at such meeting. 1. ID 18-1415 Henry Jason regarding a committee for the handicapped. C. Additional Citizen Reports - This section of the agenda permits any person not registered for a citizen report to make comments regarding public business on items not listed on the agenda. This is limited to two speakers per meeting with each speaker allowed a maximum of four (4) minutes. Such person(s) shall have filed a"Blue Card"requesting to speak during this period prior to the calling of this agenda item. NOTE: If audio/visual aids during presentations to Council are needed, they must be submitted to the City Secretary 24 hours prior to the meeting. 5. CONSENT AGENDA Each of these items is recommended by the Staff and approval thereof will be strictly on the basis of the Staff recommendations. Approval of the Consent Agenda authorizes the City Manager or his designee to implement each item in accordance with the Staff recommendations. The City Council has received background information and has had an opportunity to raise questions regarding these items prior to consideration. Listed below are bids, purchase orders, contracts, and other items to be approved under the Consent Agenda (Agenda Items A — FF). This listing is provided on the Consent Agenda to allow Council Members to discuss or withdraw an item prior to approval of the Consent Agenda. If no items are pulled, Consent Agenda Items A — FF below will be approved with one motion. If items are pulled for separate discussion, they may be considered as the first items following approval of the Consent Agenda. A. ID 18-1123 Consider adoption of an ordinance of the City of Denton, Texas, amending Section 22-31(13) and 22-31.1, Article II-Park Rules, Chapter 22- Parks and Recreation, Code of Ordinances of the City of Denton, Texas, to provide for clarification of smoking related to parks and parks facilities within the City of Denton; providing for a severability clause; providing for a savings clause;providing for publication; and,declaring an effective date. B. ID 18-1238 Consider adoption of an ordinance of the City of Denton, Texas, a Texas home-rule municipal corporation, authorizing the City Manager to execute a Professional Services Agreement with Pike Engineering, LLC., for electric engineering services to provide distribution design, construction and standards; distribution system planning services; new distribution customer project designs; project quality control services; and perform distribution system studies for Denton Municipal Electric distribution engineering; providing for the expenditure of funds therefor; and providing an effective date (RFQ 6566 - awarded to Pike Engineering, LLC., for one (1) year, with the option for two (2) additional one (1) year extensions, in a total not-to-exceed amount of $900,000 for all years). The Public Utilities Board recommends approval(-). C. ID 18-1303 Consider adoption of an ordinance of the City of Denton, Texas, a Texas home-rule Page 3 Printed on 91712018 City Council Meeting Agenda September 18, 2018 municipal corporation, authorizing the City Manager to execute an Interlocal Cooperative Purchasing Agreement with the University of North Texas, under the Government Code, Chapter 791.001, to authorize City of Denton contracts for the purchase of internet services; authorizing the expenditure of funds therefor; and declaring an effective date (File 6860- award an Interlocal Cooperative Purchasing Agreement with University of North Texas System for a three(3)year not-to-exceed amount of$30,000). D. ID 18-1321 Consider adoption of an ordinance of the City Council of the City of Denton, Texas, amending the Downtown Incentive Reinvestment Grant Program; and providing an effective date. E. ID 18-1383 Consider adoption of a resolution approving the City of Denton's GreenSense Incentive Program Manual, and Distributed Generation Manual for FY 2018-19; providing for an effective date. The Public Utilities Board recommends approval(7-0). F. ID 18-1395 Consider adoption of an ordinance of the City of Denton, Texas establishing the schedule of rates for electric service; providing for a repealer; providing for a severability clause; and providing for an effective date. The Public Utilities Board recommends approval (6-0). G. ID 18-1402 Consider adoption of an ordinance of the City of Denton authorizing an agreement between the City of Denton, Texas and Giving Hope, Incorporation for Homeless Prevention Assistance; providing for the expenditure of funds in the total amount of Four Hundred Dollars($400); and providing an effective date. H. ID 18-1423 Consider adoption of an ordinance of the City of Denton, Texas, a Texas home-rule municipal corporation, authorizing the City Manager to execute a contract for the supply of electric utility distribution hardware, connectors, arms, and accessories for the City of Denton Distribution Center; providing for the expenditure of funds therefor; and providing an effective date (IFB 6653 - awarded to the lowest responsive bidder for each line item, Stuart C. Irby Company, for one (1) year, with the option for three (3) additional one (1) year extensions, in a total not-to-exceed amount of $500,000 for all years, and Techline, Inc., for one (1) year, with the option for three (3) additional one (1) year extensions, in a total not-to-exceed amount of $4,000,000 for all years, in a total not-to-exceed amount of$4,500,000 for all years). I. ID 18-1424 Consider adoption of an ordinance of the City of Denton, Texas, a Texas home-rule municipal corporation, authorizing the City Manager to execute a contract through the Department of Information Resources (DIR) Cooperative Purchasing Network Contract Number DIR-TSO-4158 for the supply of software maintenance for the City of Denton Human Capital Management software; providing for the expenditure of the funds therefor; and providing an effective date (File 6876- awarded to Oracle America, Inc. for one (1) year,in the not-to-exceed amount of$140,820). J. ID 18-1426 Consider adoption of an ordinance of the City of Denton, Texas, a Texas home-rule municipal corporation, authorizing the City Manager to execute a contract through the State of Texas Contract Number 715-M2, under the Texas Government Code, Chapter 2262.055, to authorize City of Denton contracts for the purchase of library print materials: Page 4 Printed on 91712018 City Council Meeting Agenda September 18,2018 Publications, Audiovisual Materials, Books, and Cataloging Services (Prepared Materials Only); authorizing the expenditure of funds therefor; and declaring an effective date (File 6886 -awarded to Baker&Taylor,LLC,in the not-to-exceed amount of$350,000). K. ID 18-1427 Consider adoption of an ordinance of the City of Denton, Texas, a Texas home-rule municipal corporation, authorizing the City Manager, or his designee, to execute a contract through the State of Texas Contract Number 715-M2 for the purchase of library audio/visual materials: Publications, Audiovisual Materials, Books, and Cataloging Services (Prepared Materials Only); providing for the expenditure of funds therefore; and providing an effective date (File 6887 - awarded to Midwest Tape, LLC, in the not-to-exceed amount of$150,000). L. ID 18-1429 Consider adoption of an ordinance of the City of Denton, Texas, a Texas home-rule municipal corporation, authorizing the City Manager to execute a Professional Services Agreement with RPS Infrastructure, Inc., for design services for the Bonnie Brae Phase 6 University (US 380) to Loop 288 street improvement project as set forth in the contract; providing for the expenditure of funds therefor; and providing an effective date (RFQ 6590-032 - Professional Services Agreement for design services awarded to RPS Infrastructure, Inc., in the not-to-exceed amount of $2,031,479.50). The Public Utilities Board recommends approval(-). M. ID 18-1431 Consider adoption of an ordinance of the City of Denton, Texas, a Texas home-rule municipal corporation, authorizing the City Manager to execute a Professional Services Agreement with Kimley-Horn and Associates, Inc. for an Americans with Disabilities (ADA) Act Compliance Review and Transition Plan as set forth in the agreement; providing for the expenditure of funds therefor; and providing an effective date (RFQ 6590-033 - Professional Services Agreement for Design Services awarded to Kimley-Horn and Associates,Inc., in the not-to-exceed amount of$239,843.32). N. ID 18-1445 Consider adoption of an ordinance of the City of Denton, Texas, a Texas home-rule municipal corporation, authorizing the City Manager to execute a contract for the purchase and implementation of a new work order software system for the Facilities Management Department with TMA System, LLC, which is the sole provider of this software. In accordance with Texas Local Government Code 252.022, provides that procurement of commodities and services that are available from one source are exempt from competitive bidding; and if over $50,000 shall be awarded by the governing body; and providing an effective date (File 6892 - awarded to TMA System, LLC, for one (1) year, with the option for two (2) additional one (1) year extensions, in a total not-to-exceed amount of$60,680 for all years). O. ID 18-1448 Consider adoption of an ordinance of the City of Denton, Texas, a Texas home-rule municipal corporation authorizing the City Manager, or designee, to execute an agreement with the United States Department of Justice, Drug Enforcement Administration (DEA) for reimbursement of overtime costs for participation in the Dallas Field Division Area Task Force Group 1 for Fiscal Year 2019; and providing an effective date. P. ID 18-1449 Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation authorizing the City Manager, or designee, to execute an agreement with the Page 5 Printed on 91712018 City Council Meeting Agenda September 18,2018 United States Department of Justice for participation in the Federal Equitable Sharing Program for Fiscal Year 2019; and providing an effective date. Q. ID 18-1460 Consider adoption of an ordinance of the City of Denton, Texas amending the Fiscal Year 2017-18 Budget and Annual Program of Services of the City of Denton to allow for increases to: (A) the General Fund of $828,191 for the purpose of funding equipment, two master plans, and Park improvements, and (B) the Risk Fund of $75,000 for the purpose of funding additional claims; declaring a municipal purpose; providing a severability clause;providing an open meetings clause; and providing for an effective date. R. ID 18-1464 Consider adoption of an ordinance of the City of Denton, Texas, a Texas home-rule municipal corporation, authorizing the City Manager to execute a Professional Service Agreement with Freese and Nichols, Inc., to conduct condition assessment, provide preliminary design and regulatory and performance upgrades for the facilities at the Lake Ray Roberts water treatment plant (RRWTP) as set forth in the contract; providing for the expenditure of funds therefor; and providing an effective date (RFQ 6700 - Professional Services Agreement awarded to Freese and Nichols, Inc., in the not-to-exceed amount of $224,411). The Public Utilities Board recommends approval(-). S. ID 18-1465 Consider adoption of an ordinance of the City of Denton, Texas, a Texas home-rule municipal corporation, authorizing the City Manager to execute a contract with SigmaFlow, LLC, for NERC compliance software services for the City of Denton; providing for the expenditure of funds therefor; and providing an effective date. (RFP 6704- awarded to SigmaFlow, LLC, for one (1) year, with the option for four (4) additional one (1) year extensions, in a total not-to-exceed amount of $311,250 for all years). The Public Utilities Board recommends approval(-). T. ID 18-1466 Consider adoption of an ordinance of the City of Denton authorizing the City Manager, or his designee, to execute a Memorandum of Understanding by and between United Way of Denton County, Inc., and the City of Denton and providing for the expenditure of funds for Homelessness Initiatives in the amount of $107,748.00 for the partial funding for a Homelessness Coordinator, Coordinated Entry Coordinator, and Housing Navigator in furtherance of the coordinated system homeless assistance programs; authorizing the expenditure of funds therefor; and providing an effective date. U. ID 18-1472 Consider adoption of an ordinance of the City of Denton, Texas, a Texas home-rule municipal corporation, authorizing the City Manager to execute a Professional Services Agreement with Adams Consulting Engineers, Inc., a Texas Corporation, for a design/construction plan set for 23 sidewalk segments throughout the city; as set forth in the agreement; providing for the expenditure of funds therefor; and providing an effective date (File # 6590-035 - Professional Services Agreement for services awarded to Adams Consulting Engineers, Inc., a Texas Corporation, in the not-to-exceed amount of $223,800). V. ID 18-1474 Consider adoption of an ordinance releasing, abandoning, and vacating a 3.625 acre portion of a 5.886 acre electric utility and hike and bike trail easement granted to the City of Denton by Holigan Land Development, Ltd., a Texas limited partnership, recorded as Instrument No. 2005-140655, Real Property Records, Denton County, Texas; Providing Page 6 Printed on 91712018 City Council Meeting Agenda September 18, 2018 for severability and an effective date. (Carmel Villas-Phase I subdivision development) W. ID 18-1477 Consider adoption of an ordinance of the City of Denton, Texas, a Texas home-rule municipal corporation, authorizing the City Manager to execute a Professional Services Agreement with Freese and Nichols, Inc. (FNI), for Airport Road Analysis, Design, and Construction Administration Services as set forth in the contract; providing for the expenditure of funds therefor; and providing an effective date (RFQ 6590-038 - Professional Services Agreement for Pre-Qualified Engineering Services awarded to Freese and Nichols,Inc., in the not-to-exceed amount of$168,300). X. ID 18-1478 Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, accepting competitive bids and awarding a contract for the supply of Electric Utility Overhead and Underground Distribution Transformers for the City of Denton Distribution Center; providing for the expenditure of funds therefor; and providing an effective date (IFB 6778 - awarded to Techline, Inc., in the five (5) year not-to-exceed amount of$11,000,000). Y. ID 18-1480 Consider adoption of an ordinance of the City of Denton, Texas, a Texas home-rule municipal corporation, accepting competitive bids and awarding a contract for the supply of precast concrete pull boxes for the City of Denton Distribution Center to Techline, Inc.; providing for the expenditure of funds therefor; and providing an effective date (IFB 6812 - awarded to Techline, Inc., in the for a five (5) year not-to-exceed amount of $2,500,000). Z. ID 18-1481 Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, accepting competitive bids and awarding a contract for Wood Utility Poles for the City of Denton Distribution Center to McFarland Cascade Holdings, Inc.; providing for the expenditure of funds therefor; and providing an effective date (IFB 6813 - awarded to McFarland Cascade Holdings, Inc. in the five (5) year not-to-exceed amount of$2,500,000). AA. ID 18-1486 Consider adoption of an ordinance of the City of Denton, adopting a schedule of fees for services and fees of the Denton Fire Department; superseding all prior fees in conflict with such schedule;providing for severability; and providing for an effective date. BB. ID 18-1488 Consider adoption of an ordinance of the City of Denton, Texas, adopting a Schedule of Fees for cemeteries and use of certain park facilities; superseding all prior fees in conflict with such schedule; and providing for severability and an effective date. The Parks, Recreation and Beautification Board recommended approved(4-0). CC. ID 18-1490 Consider adoption of an ordinance establishing the schedule of rates for Water service; providing for a repealer; providing for a severability clause; and providing for an effective date. The Public Utilities Board recommends approval(6-0) DD. ID 18-1492 Consider adoption of an ordinance establishing the schedule of rates for Wastewater service; providing for a repealer; providing for a severability clause; and providing for an effective date. The Public Utilities Board Recommends approval(6-0). EE. ID 18-1493 Consider adoption of an ordinance establishing the Schedule of Rates for Solid Waste Page 7 Printed on 91712018 City Council Meeting Agenda September 18,2018 service; providing for a repealer; providing for a severability clause; and providing for an effective date. The Public Utilities Board recommends approval. (6-0) FF. ID 18-1494 Consider adoption of an ordinance establishing the schedule of rates for miscellaneous service; providing for a repealer; providing for a severability clause; and providing for an effective date. The Public Utilities Board recommends approval(6-0). 6. ITEMS FOR INDIVIDUAL CONSIDERATION A. ID 18-1459 Consider approval of a resolution of the City Council of the City of Denton, Texas, approving a negotiated settlement between the Atmos Cities Steering Committee ("ACSC") and Atmos Energy Corp., Mid-Tex division regarding the company's 2018 rate review mechanism filings; declaring existing rates to be unreasonable; adopting tariffs that reflect rate adjustments consistent with the negotiated settlement; finding the rates to be set by the attached settlement tariffs to be just and reasonable and in the public interest; approving an attached exhibit establishing a benchmark for pensions and retiree medical benefits; approving an attached exhibit regarding amortization of regulatory liability; requiring the company to reimburse ACSC's reasonable ratemaking expenses; determining that this resolution was passed in accordance with the requirements of the Texas open meetings act; adopting a savings clause; declaring an effective date; and requiring delivery of this resolution to the company and the ACSC's legal counsel. B. ID 18-1470 Consider adoption of an ordinance accepting a donation from the Rayzor-Elliott family via the Denton Parks Foundation for IOOF Cemetery. C. ID 18-1482 Consider adoption of an ordinance of the City of Denton, Texas, a Texas home-rule municipal corporation, authorizing the City Manager to execute a Professional Services Agreement with HR Green, Inc., for Development Review Consulting Services as set forth in the contract; providing for the expenditure of funds therefor; and providing an effective date (RFQ 6818 - Professional Services Agreement for Development Review Consulting Services awarded to HR Green,Inc). D. ID 18-1484 Consider adoption of an ordinance of the City of Denton, Texas authorizing the City Manager, or his designee, to execute a Contract of Sale by and between Janda Legacy Investments, LP ("Owner"), and the City of Denton, Texas ("City" or "Buyer"), regarding the sale and purchase of fee simple to an approximately 0.81 acre tract, more or less, situated in the B.B.B. & C.RR. CO. Survey, Abstract No. 192, Denton County, Texas for the purchase price of Four Hundred Seventy Five Thousand Dollars and No Cents ($475,000.00), and other consideration, as prescribed in the Contract of Sale; authorizing the expenditure of funds therefor; and providing an effective date. (Bonnie Brae Street Widening and Improvements project - North (Phase 5) - Parcel 31 (Janda - 2300 Scripture Street)) 7. PUBLIC HEARINGS A. S17-0007a Hold a public hearing and consider adoption of an ordinance for a Specific Use Permit to allow for a multi-family use. The 12.37-acre site is generally located on the east side of Brinker Road, approximately 990 feet south of South Loop 288 in the City of Denton, Page 8 Printed on 91712018 City Council Meeting Agenda September 18, 2018 Denton County, Texas; providing for a penalty in the maximum amount of $2,000.00 for violations thereof, providing a severability clause and an effective date. (S17-0007, Enclave at Denton,Hayley Zagurski). B. Z18-0020b Hold a public hearing and consider adopting an ordinance of the City of Denton, Texas, regarding assignment of an initial zoning classification of Neighborhood Residential 3 (NR-3) zoning district and use classification on approximately 47.466 acres of land generally located on the south side of E. Ryan Road, east of the intersection of E. Ryan Road and Andrew Avenue, in the City of Denton, Denton County, Texas; adopting an amendment to the city's official zoning map; providing for a penalty in the maximum amount of $2,000.00 for violations thereof, providing a severability clause and an effective date. The Planning and Zoning Commission will consider this request on September 21, 2018. C. Z18-0016a Hold a public hearing and consider adoption of an ordinance of an initial zoning of Neighborhood Residential 1 (NR-1) District on approximately one acre. The property is generally located on the north side of Shiloh Lane, approximately 910 feet east of Swisher Road, in the City of Denton, Denton County, Texas; adopting an amendment to the City's official zoning map; providing for a penalty in the maximum amount of $2,000.00 for violations thereof, providing a severability clause and an effective date. The Planning and Zoning Commission voted 7-0 to approve the request. (Z18-0016, Burling Kuhn Addition,Julie Wyatt). D. PDA18-0004b Hold a public hearing and reconsider the August 21, 2018 adoption of an ordinance approving a Detail Plan for Planned Development 176(PD-176) District depicting an auto laundry facility on approximately 2.13 acres. The property is generally located on the west side of North FM 2499, approximately 760 feet north of Hickory Creek Road in the City of Denton, Denton County, Texas; providing for a penalty in the maximum amount of $2,000.00 for violations thereof, providing a severability clause and an effective date. (PDA18-0004a,Clean and Green Car Wash,Hayley Zagurski.) 8. CONCLUDING ITEMS A. Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from the City Council or the public with specific factual information or recitation of policy, or accept a proposal to place the matter on the agenda for an upcoming meeting AND Under Section 551.0415 of the Texas Open Meetings Act, provide reports about items of community interest regarding which no action will be taken, to include: expressions of thanks, congratulations, or condolence; information regarding holiday schedules; an honorary or salutary recognition of a public official, public employee, or other citizen; a reminder about an upcoming event organized or sponsored by the governing body; information regarding a social, ceremonial, or community event organized or sponsored by an entity other than the governing body that was attended or is scheduled to be attended by a member of the governing body or an official or employee of the municipality; or an announcement involving an imminent threat to the public health and safety of people in the municipality that has arisen after the posting of the agenda. B. Possible Continuation of Closed Meeting topics,above posted. CERTIFICATE Page 9 Printed on 91712018 City Council Meeting Agenda September 18, 2018 I certify that the above notice of meeting was posted on the bulletin board at the City Hall of the City of Denton, Texas,on the day of ,2018 at o'clock(a.m.)(p.m.) CITY SECRETARY NOTE: THE CITY OF DENTON CITY COUNCIL WORK SESSION ROOM AND COUNCIL CHAMBERS ARE ACCESSIBLE IN ACCORDANCE WITH THE AMERICANS WITH DISABILITIES ACT. THE CITY WILL PROVIDE SIGN LANGUAGE INTERPRETERS FOR THE HEARING IMPAIRED IF REQUESTED AT LEAST 48 HOURS IN ADVANCE OF THE SCHEDULED MEETING. PLEASE CALL THE CITY SECRETARY'S OFFICE AT 349-8309 OR USE TELECOMMUNICATIONS DEVICES FOR THE DEAF (TDD) BY CALLING 1-800-RELAY-TX SO THAT A SIGN LANGUAGE INTERPRETER CAN BE SCHEDULED THROUGH THE CITY SECRETARY'S OFFICE. Page 10 Printed on 91712018 wmm::�I September 2018 Sunday Monday Tuesday Wednesday 'hursday Friday Saturday 1 2 3 4 5 6 7 8 No Councilluncheon No Council Meeting 4 p.m. Public Art 11:00 Development Labor Day - Committee Code Review City Ho lid a y 9 10 11 12 13 14 15 9:OOam Public Utilities 11:OOam EDP Board 11:00 Development Board 11:00am Mobility Code Review Committee 5:OOpm P&ZWork 5:30pm HLC Session 2:00 Special Called 6:30pm P&ZRegular 6 pm Park Board Work/Reg.Session Session 16 17 18 19 20 21 22 9:OOam Committee on 10:30am Audit/Finance HaBSCo Meeting 11:00 Development the Fnvironment Committee Code Review 1:00 pm CC Work Session 6:30 pm CC Regular Session 23 24 25 26 27 28 29 6:OOpm Pub he Utilities 2:00 pm 4th Tuesday 12:00 Downtown TF HOTCommittee 10:00 11:00 Development Board Session Code Review 5:OOpm P&Z Work 4:00 pm ZBA Session 6:30pm P&ZRegular Se ssio n 30 9/7/2018 10:12 AM Sunday Monday Tuesday Wednesday Mursday Friday Saturday 1 2 3 4 5 6 11:30 am Joint No Council Meeting 4 p.m. Public Art Counc ii/DISD Luncheon Committee 1:30pm Committee on the Fnvironment 5:3 0p m Traffic Sa fe ty Commission Park Board 6pm 7 8 9 10 11 12 13 9:00am Public Utilities 2:00 pm 2nd Tuesday 11:00am EDP Board Bo a rd Se ssio n 5:00pm P&ZWork 5:30pm HLC Session 6:30pm P&ZRegular Se ssio n 14 15 16 17 18 19 20 2:00 pm CC Work 11:30am Mobility HaBSCo Meeting Session Committee 6:30 pm CC Regular Session 21 22 23 24 25 26 27 6:00pm Public Utilities 2:00 pm 4th Tuesday 5:00pm P&ZWork Bo a rd Se ssio n Se ssio n 6:30pm P&ZRegular Se ssio n 28 29 30 31 4:00 pm ZBA No Council Meeting 9/7/2018 10:12 AM Construction Projects Report Week of September 10-16, 2018 lI rft�V11 Val ciry OF DENT(�N For general inquiries and questions, please contact the Project Management Office at(940)349-7227 EDN Proposed Date of Proposed Date Other Department Street/Intersection From To Construction of Completion Brief Description of Construction Department Letters Communication Contact: CURRENT PROJECTS See Yellow Highlighted for Major Closures Amistad Ln. New Ballinger Tawakoni 8/27/18 9/10/18 Concrete Street Panel Repair Streets 7/15/18 (940)349-7160 (Temporary Lane Closures) Austin St. Sawyer E.Third 9/10/2018 9/14/2018 Water Main Construction Engineering 8/27/18 (940)349-8910 (Temporary Lane Closure) Ave.A Maple Eagle 3/19/18 9/30/18 UNT 2018 Residence Hall Project Engineering N/A Coordinate with (940)349-8910 (Both SB Lanes Closed) UNT Bay Meadow Dr. Prescott Fairmont Park 8/27/18 9/10/18 Concrete Street Panel Repair Streets 8/17/18 (940)349-7160 Downs (Temporary Lane Closures Possible) Bonnie Brae St. Roselawn North of 7/1/2017 7/1/2019 Street Widening Engineering 6/14/18 (940)349-8910 Vintage (Phase 1) S. Bonnie Brae St. Willowwood FM 1515/Road 9/10/2018 9/21/2018 Street Resurfacing Engineering (940)349-8910 Airport p (Temporary Lane Closures Possible) Edwards Rd. Camino Real Swisher Rd. 6/4/18 9/10/18 Street Reconstruction Streets 5/17/18 HOA Contacted (940)349-7160 TH. (Temporary Lane Closures) Emerson m East E Wastewater Emerson Ln. Nottingham 7/25/18 9/12/18 (Road and Lane Closure) Wastewater 7/23/18 (940)349-7300 Emery St. Alice Coit 6/25/18 10/12/18 Street Resurfacing Streets 6/11/18 Door Hangers (940)349-7160 (Temporary Lane Closures) Fulton St. Oak University 6/7/18 11/16/18 Water Main Construction Water 6/5/18 (940)349-7167 (Street Closure) Page 1 of 5 Proposed Date of Proposed Date Other Department Street/Intersection From To Construction of Completion I Brief Description of Construction Department Letters Communication Contact: North Texas Street Reconstruction Hickory St. Blvd. Ave C 5/21/18 9/14/18 (Temporary Road Closures) Streets 5/15/18 Electronic Signs (940)349-7160 Wastewater Main Construction Holiday Park Manhattan Kings Row 11/10/17 12/1/18 Phase II Wastewater 11/16/18 Door Hangers (940)349-7300 (Temporary Lane Closures Possible) rid Holl hill Ln. Long Pennsylvania 7 9 18 9/7/18 Street Reconstruction Streets 6 20 18 (940 349-7160 Holly ge / / (Temporary Street Closures) / / ) Jim Christal Rd. Western Blvd Scripture 7/3/18 10/1/18 Utility Line ConstructionWater/WW N/A (940)349-8463 (Road Closure) Joyce Ln. N. Elm Gardenview 9/5/18 10/26/18 Street Reconstruction Streets 8/21/18 (940)349-7160 (Temporary Lane Closures) Mayhill Rd. US 380 Edwards 9/1/17 2/1/20 Street Widening Engineering 1/3/18, 1/24/18 Door Hangers (940)349-8910 (Temporary Lane Closures) Meandering Creek Dr. Education John Pain 9/3/18 9/17/18 Concrete Street Panel Repair Streets 8/17/18 (940)349-7160 (Temporary Lane Closures) Mistywood Ln. Woodhaven Jamestown 9/13/18 11/25/18 Wastewater Main ReconstructionWastewater 8/23/18 (940)349-7300 (Temporary Lane Closures) Myrtle St. Eagle 200' North 9/4/18 5/1/19 Eagle Drainage Improvements Engineering 8/21/18 Contacted DCTA (940)349-8910 (Street Closure) 100' N 150'East Wastewater Main Reconstruction Nottingham Dr. Nottingham Emerson (Temporary Lane Closures)7/25/18 9/7/18 Wastewater 7/23/18 (940)349-7300 intersection Old North Rd. University Mingo 8/27/18 9/7/18 Turn Lane Installation Streets N/A (940)349-7160 (Temporary Lane Closures) Prominence Pkwy. Mayhill Atlanta 1/31/18 9/28/18 Water and Wastewater Crossing Engineering 1/24/18 Door Hangers (940)349-8910 (Road Closure) Riney Rd. N. Elm Solana 9/29/17 9/30/18 Road Removal and Replacement Engineering Yes Electronic Signs (940)349-8910 (Road Closure) Full Depth Base Repairs Contacted Shady Oaks Dr. Woodrow Loop 288 S. 8/27/18 9/17/18 (East Bound Lane Closures) Streets N/A Businesses (940)349-7160 affartarl alartrnnir Page 2 of 5 Proposed Date of Proposed Date Other Department Street/Intersection From To Construction of Completion I Brief Description of Construction Department Letters Communication Contact: Shadow TH. Plum Hollow Windbrook 8/6/18 10/19/18 Street Reconstruction Streets 8/2/18 (940)349-7160 (Street Closure) Spencer Rd. Mayhill Lowe's 4/2/18 9/29/18 Water, Drainage, Road Construction Water 3/16/18 Contacted (940)349-8910 Driveway (Road Closure) departments affected Dead End Street Resurfacing,Curb and Gutter Sun Valley Dr. Stuart West 5/14/18 10/12/18 (Temporary Lane Closures) Streets 5/1/18 Door Hangers (940)349-7160 Thomas St. Oak Scripture 9/3/18 11/2/18 Water Main Construction Water 8/1/18 (940)349-7167 (Temporary Lane Closure) Thomas St. TBD TBD Streets Construction Valley View Rd. Kings Row Sun Valley 5/14/18 10/18/18 Street Resurfacing,Curb and Gutter Streets 5/1/18 Door Hangers (940)349-7160 (Temporary Lane Closures) W.Walnut St. Elm Cedar 8/6/18 9/14/18 Utility Construction Engineering N/A (940)349-8910 (Temporary Road Closures) Wayne St. Boyd Mozingo 8/29/18 11/1/18 Wastewater Reconstruction Wastewater 8/20/18 (940)349-7300 (Temporary Lane Closures) UNT 2018 CVAD Project Welch St. Mulberry Chestnut 4/11/18 9/24/18 Drive approach/Sidewalk Engineering 3/19/18 3/30/2018 (940)349-8910 (Temporary Lane Closures) COMPLETED PROJECTS Amarillo St. Congress Egan 7/9/18 8/17/18 Street Reconstruction Streets (940)349-7160 (Temporary Lane Closures) 7/5/18 Capetown Dr. Desert Willow Bishop Pine 6/25/18 8/17/18 Concrete Street Panel Repair Streets 6/5/18 Door Hangers (940)349-7160 (Temporary Lane Closures Possible) Highland Park Rd. Laurel Wisteria 7/25/18 8/30/18 Street Reconstruction Streets 7/12/18 (940)349-7160 (Temporary Road Closures) Page 3 of 5 Proposed Date of Proposed Date Other Department Street/Intersection From To Construction of Completion I Brief Description of Construction Department Letters Communication Contact: Laurel St. Highland Park Wisteria 7/25/18 8/30/18 Street Reconstruction Streets 7/12/18 (940)349-7160 (Temporary Lane Closures) p y / / / / Street Reconstruction / / g ( ) Malone St. Scripture W. University 7 9 18 8 24 18 Streets 6 28 18 Electronic Signs 940 349-7160 (Temporary Lane Closures) McKinney St. Loop 288 Ryan H.S 5/29/18 8/22/18 Sidewalk Construction Engineering N/A Electronic Signs (940)349-8910 (Temporary Lane Closures) Oakland St. Sawyer E. 3rd 8/20/18 8/26/18 Conduit Installation TWU (940)349-8914 (Temporary Lane Closures) Communications Pine Hills Ln. Purbeck Alderbrook 8/20/18 9/3/18 Concrete Street Panel Repair Streets N/A (940)349-7160 (Temporary Lane Closures Possible) Poinsettia St. Manten Teal 8/13/18 8/27/18 Wastewater Construction Engineering 8/3/18 Door Hangers (940)349-8910 (Temporary Lane Closure) NB Lane 500' Water and Wastewater Improvements Contacted Western Blvd. es S.tern N of J affected electronic im 7/24/18 9/21/18 Westpark Area Water N/A Businesses Wes (940)349-7324 Christal (Lane Closures 4 to 2 lanes) i signs UPCOMING PROJECTS Bonnie Brae St. Roselawn 135E 1/15/19 1/15/20 North South Water Main Phase 2Water (940)349-8910 (Temporary Lane Closures) Eagle Dr. East of Elm 9/17/18 10/5/18 Sanitary Sewer Construction Engineering (940)349-8910 Carroll (Street Closure) Fulton St. Summer 2019 TBD Streets Streets (940)349-7160 Hettie St. TBD TBD Water,Wastewater,and Streets Multiple Hickory Creek Rd. Teasley Riverpass 1/1/19 6/1/20 Street Widening Engineering (940)349-8910 (Temporary Lane Closures) Page 4 of 5 Proposed Date of Proposed Date Other Department Street/Intersection From To Construction of Completion I Brief Description of Construction Department Letters Communication Contact: Highland St. Phase I-Storm Water Improvements Hinkle Dr. University Windsor 1/1/19 1/1/20 (Magnolia Drainage Ph 11 Engineering (940)349-8910 Temporary Lane Closures) Londonderry Ln. Teasley Westminster 11/1/18 TBD Street Improvements Streets (940)349-7160 (Temporary Lane Closures) Panhandle St. Carroll Bolivar TBD TBD Street Resurfacing,Curb and Gutter Streets 4/9/18 Door Hangers (940)349-7160 (Temporary Lane Closures) PEC 4- Engineering In Design Installing Underground Box Culvert Engineering (940)349-8910 Kansas City Drainage and Roadway Construction Roselawn Dr. Bonnie Brae Southern RR TBD TBD (Bonnie Brae Phase 1 Engineering N/A (940)349-8910 One Lane traffic control) Stuart Rd. Windsor Kings Row TBD TBD Concrete Curb and Gutter Repair Streets (940)349-7160 (Temporary Lane Closures) Vintage Blvd. US 377 135W 3/1/2019 2021 Street Widening Engineering (940)349-8910 (Bonnie Brae Phase 2) Windsor Dr. TBD TBD Water,Wastewater, Drainage,Streets Engineering (940)349-8910 Page 5 of 5