The Tarrant Appraisal District continues to struggle with operating problems that have spurred record taxpayer protests and left some top county officials questioning the validity of the district’s property appraisals.
As TAD officials were working their way through more than 100,000 protests this year as a result of an average bump of 14 percent in property values, the appraisal district sent county officials a list of changes to the current and previous tax rolls amounting to nearly $13 million due in refunds to taxpayers.
At a recent meeting of County Commissioners, some county officials and commission expressed dismay with the extent of the problems and whether they can be fixed.
“This is a serious situation related to the accuracy of the information received from TAD,” said Tarrant County Auditor Renee Tidwell.
The county and taxing entities, including cities and school districts within its boundaries, will have to ante up the refunds before tax payments are doled out to cover operating expenditures.
“The timing is terrible,” said county Tax-Assessor Collector Ron Wright. “It’s the end of the tax year and we aren’t collecting enough tax payments now to cover it. Cash flow will improve in about six weeks when tax payments start coming in again.”
Tax payments notices will be issued Oct. 1.
TAD typically issues supplemental tax rolls to Wright’s office each month with changes that are mostly the result of exemptions added or dropped.
The first few months of the year went smoothly but Wright said a new software upgrade in April sent the system into a tailspin.
“We didn’t get a supplemental roll in May but then we got three in June,” Wright said. “That led to the big one.”
The July supplement contained 80,000 changes amounting to 5,100 refunds, he said.
Combined with the previous refunds in the pipeline, refunds due surged to about $13 million. By law, the refunds must be paid within 60 days or taxpayers are due interest along with their refunds.
Chief Appraiser Jeff Law said the refunds are the result of exemptions filed by homeowners after they paid their taxes.
“Many of the exemption applications we received were applied to the 2016 and 2015 tax years, resulting in refunds,” Law said. “Refunds associated with exemptions were primarily related to residential properties.”
TAD also reported about 100 refunds to the tax-assessor collector as a result of commercial litigation settlements, Law said.
“We must and will do better with the timing and coordinating exemption and value related changes with the Tarrant County tax office going forward,” Law said.
Law has blamed many of problems that have plagued TAD on the implementation of a new software system in 2014.
But county commissioners and other officials are concerned that the problems are “systemic” and go beyond the software, citing complaints from taxpayers about poor customer service and lack of follow through on data provided the district.
Commissioner Andy Nguyen said he has received numerous complaints about TAD from taxpayers in his precinct.
The problems, he said, “erode the public trust in our system and compromise the integrity of our county.”
At the recent meeting, County Judge Glen Whitley noted a dramatic drop in the value of mineral values from $2.7 billion a year ago to about $9.7 million this year.
“The price of natural gas did not drop that much from last year to this year so why all of a sudden have we lost value,” Whitley questioned.
The change in mineral values is a piece of a large problem that county leaders said have led to their dissatisfaction with TAD. Whitley suggested that commissioners send a letter to board of directors of TAD expressing “their displeasure and lack of confidence” in TAD’s data.
TAD released its certified property tax roll in July showing appraised market value of $190.8 billion, a 12 percent increase over 2015 that was boosted by September 2015 rolls to 14 percent. The county, cities, school districts and other taxing entities rely on the appraisal district’s property tax valuations to set their tax rates.
The large jump in values was the result of Dallas-Fort Worth area’s hot real estate market that boosted home prices by about 9 percent, according to industry data.
In addition, the rollout of the new computer software system caused a variety of appraisal problems, including the undervaluation of property. The value increase from 2014 to 2015 was 5 percent.
In a comparison between TAD’s valuations and the values produced state auditors, a discrepancy was discovered that nearly jeopardized state funding to some school districts. A state-granted grace period provided a reprieve for the districts.
Wright called the new software system a “an unmitigated nightmare.” An outside auditor has been hired to try to identify and correct problems with the system.
Law said the software vendor is also working with TAD to help correct the problems
“Like others that have gone through similar transitions, we did have some software conversion issues over a period of time,” Law said. “We have apologized to those we serve.
“In addition, we have held back significant payment to the software vendor until further notice,” Law said.
Tidwell said she blames TAD officials for not being forthcoming and owning up the problems. She also said she expects the auditor’s will not provide ready solutions because of the vastness of TAD’s database and extent of the problems.
“This may be the starting point and we could be dealing with this for years to come,” Tidwell said