Appraisal appeal may land in court
City council members are due to decide tonight, Thursday, July 19, whether to pursue a lawsuit against the Nueces County Appraisal District seeking revised single-family appraisals throughout the city.
That would be the next step in the city's battle against the appraisal district, which it contends has been arbitrarily setting property values too high in Port Aransas.
At a hearing on Monday, June 16, an appraisal review board told the city, in essence, to stop whining, go home and pay the taxes. Lawyers for the city and for the appraisal district, which appoints review board members, argued for more than an hour and a half; it took only seconds for the review board to reject the city'arguments.
Hearings challenging single-family tax valuations are common. A challenge filed by the city, which seeks to overthrow valuations on all single-family properties, is so rare that many tax authorities say they've never seen one.
Classification challenges can only be filed by a governmental entity that levies taxes, such as the city, the school district or the water district. Individuals can only challenge valuations on their own properties.
Monday, Tom Wheat, representing the appraisal district, argued that the appraisal district had done this year's tax valuations legally and properly. He brought Anne Matula, who teaches business courses at Texas A&M-Corpus Christi, to show that her analysis of district methods shows the appraisals to be in line with state law and with standard practices.
Jay Reynolds, the district's assistant chief appraiser, told the review board that today's housing market is on the upswing.
"Port Aransas is not what it used to be," Reynolds said. "Investors have purchased property, and by so doing, have changed the market."
He said Port Aransas has 3,980 homes in the A-1, or single-family, classification. Of those, "just over 25 percent" have filed homestead exemptions, he said.
Reynolds put the total property tax valuation in the Port Aransas ISD this year at $980 million.
Jim Popp, representing Port Aransas, argued that the issue before the review board was the level of appraisals.
"Selling prices are one indication of market values," he told the board. "They're not conclusive."
Popp pointed to some homes in Port Aransas
'that sold at appraised market value, while other nearby homes are appraised at different values.
'"My concern is that there are flaws in the (appraisal) system that have resulted in inappropriate appraisals," he said.
Popp said his figures on Port Aransas home sales, derived from real estate companies here, show that sales began a slight decline in July of last year.
"Because of what we perceive to be flaws in the methodology, we request that all properties in Port Aransas be returned to their 2006 valuations," he said.
"All I want is for somebody to tell us how (the appraisal district) complied with the standard," he said. "Do they have (an appraisal) model? Did they calibrate the model? They are required by law to follow these standards. I'd like them to show me, or read to me, or tell me how they complied with the standards."
If the council decides tonight to go ahead with the challenge, it will involve filing a lawsuit in district court against the appraisal district. That lawsuit would claim that the district didn't accurately estimate property values.
"We think the district did a generally bad job of forecasting (property values for) 2007," City Manager Michael Kovacs said.
Kovacs said it could cost as little as $5,000 to file the lawsuit, but depending on how far the suit went, it could cost the city "into six figures."
"The initial filing (of a lawsuit) is fairly inexpensive," he said, "but the cost can escalate quickly."
The council will discuss the matter in closed session, since it involves legal action. However, any action taken must be done in open session.
The meeting is due to begin at 5 p.m. in the council chamber, 710 W. Avenue A.