Memorandum

CITY OF DALLAS

DATE March 1,2013

TO Honorable Members of the Budget, Finance & Audit Committee: Jerry A. Allen(Chair), Tennell Atkins (Vice Chair), Monica A. Alonzo, Scott Griggs, AnnMargolin

SUEJECT Dallas Central Appraisal District 2013- 2014 Proposed Budget

The Budget, Finance, and Audit Committee’s March 4, 2013 agenda includes abriefing on the Dallas Central Appraisal District (DCAD) 2013-2014 ProposedBudget. DCAD summary materials are attached for your information. Mr. KenNolan, Executive Director for DCAD, will present the budget and answerquestions.

The DCAD Board of Directors plans to adopt the district’s budget on or beforeMay 8, 2013. From that point, taxing units have 30 days to pass a resolution ifthey choose to disapprove the budget. It does not take effect and the DCADBoard must adopt a new budget within 30 days of disapproval.

Please contact me if you need additional information.

‘,

Jnne ChipperfieldChief Financial Officer

C: Honorable Mayor and Members of the City CouncilMary K. Suhm, City ManagerThomas P. Perkins, Jr., City AttorneyRosa A. Rios, City SecretaryCraig D. Kinton, City AuditorDaniel F. Soils, Administrative JudgeA.C. Gonzalez, First Assistant City ManagerRyan S. Evans, Assistant City ManagerJill A. Jordan, P.E., Assistant City ManagerForest E. Turner, Assistant City ManagerJoey Zapata, Assistant City ManagerEdward Scott, City ControllerFrank Librio, Public information OfficeStephanie Cooper, Assistant to the City Manager

Dallas, The City That Works: Diverse, Vibrant, and Progressive

DALLAS CENTRAL APPRAISAL DISTRICT

2013 - 2014 PROPOSED BUDGET

Dallas Central Appraisal District

2012/2013 2013/2014

Approved Proposed

BUDGET EXPENDITURES:

Salaries & Wages $12,377,480 $12,315,478

Auto Expense 762,549 764,890

Supplies & Materials 490,026 544,590

Operational Services 59,460 68,500

Maintenance of Structure 410,459 375,934

Maintenance of Equipment 256,099 221,045

Contractual Services 572,534 559,617

Sundry Expenses 300,154 289,358

Insurance & Benefits 4,627,493 5,030,951

Professional Services 1,546,301 1,505,024

Capital Expenditures 114,000 197,590

Technology Development 0 0

Contingency 0 0

Total Expenditures $21,516,555 $21,872,977

REVENUE SOURCES:

Entity Allocations (Local Support) $21,276,555 $21,632,977

Special Assessment Income 0 0

Investment Proceeds 0 0

Rendition Fees 230,000 230,000

Other Income 10,000 10,000

Total Revenues $21,516,555 $21,872,977

2013/2014 Proposed Budget Budget Comparison Executive Summary

1

2013/2014

PROPOSED BUDGET OVERVIEW

The 2013/2014 Proposed Budget is highlighted in the attached document as follows: 1. The 2013/2014 Proposed Budget of $21,872,977 is an increase of 1.66% from the 2012/2013 Approved

Budget of $21,516,555. This is the first budget increase since the 2009/2010 Budget. The past three years the budget has declined or been flat for those fiscal years.

2. The 2013/2014 Proposed Budget calls for a total of 229 full-time positions which is the same total as in

the 2012/2013 Budget. Twenty-one (21) positions have been eliminated over the last previous 5 years. The budget notes personnel by departments/divisions as follows:

Office of Chief Appraiser Department. The department has seven (7) positions

and includes the divisions of Chief Appraiser’s Office, the Community Relations Officer, Human Resources, and Quality Control.

Administrative Services Department. The divisions included in this department are Administration, Finance/Purchasing, Customer Service, Appeals and Support, Building Services and the Appraisal Review Board (ARB). There are thirty two (32) employees in this department and eighty five (85) ARB members.

Legal Services Department. There are a total of three (3) employees in this department.

Information Technology (IT) Department. The divisions included are Information Technology and the Geographic Information System (GIS) . There is a total of fifteen (15) employees in this department.

Appraisal Services Department. This department includes the divisions of Central Appraisal, Residential, Commercial, Business Personal Property, and Property Records/Exemptions totaling one hundred seventy two (172) employees.

3. For the past three years, 2010/2011, 2011/2012 and 2012/2013, the DCAD Budgets did not contain any

merit increase or structure adjustments for District employees with full time salaries and wages. The 2013/2014 Proposed Budget sets a 3.00% merit increase and structure adjustment for District employees with full time salaries and wages. This figure is tied directly to the average salary/merit increases and adjustments given by the taxing entities in 2012/2013, which was 3.13%. DCAD bases any merit increases on what the taxing entities have been afforded to their employees. Funds are added to address the Paid Time Off program. Overall all salaries and wages decreased again in this proposed budget.

4. Overtime funds are included for appraisal staff conducting legally required after hours informal and

formal hearings with property owners during the ARB process. Funds are also included for Building Services, Appeals and Support, Customer Service, and the Appraisal Departments during the ARB process.

2

5. Contract Labor includes funds for temporary services for the Business Personal Property verification and leased equipment projects, temporary clerical help during the ARB process, and for off-duty police officers used during the ARB process.

6. Other increases and decreases in the Proposed Budget are noted as follows: Auto Expenses for the monthly auto allowance for all appraisal staff remains at $600 per month and for

management/administrative staff at $200 per month. Supplies and Materials increased slightly versus last year’s budget primarily in the category Postage

and Freight, Computer Supplies, and Software costs. Postage costs were increased for the mailing of appraisal and ARB notices. Software costs include software for new technology in the Appraisal Department of changing from a Pen Pad computer in the field to a iPad computer with the associated costs.

Operational Services is the District’s telephone communication system. Slight increase was noted from

the previous year. Maintenance of Structure shows a slight decrease overall. Electricity costs decreased based on

projected lower rates procured by the P3 Power Pool. Electrical Maintenance, which is performed every other year, decreased as this budget represents the off year.

Maintenance of Equipment decreased in the line items of PC Maintenance and Software Maintenance.

Several software maintenance costs were eliminated for the new iPad computers as the field devices for the appraisal staff. The PC Maintenance includes maintenance funds on thirty four scanners, and three in house printers for small print jobs. The maintenance on the Pen Pad devices has been eliminated.

Contractual Services decreased slightly due to the Lease of Equipment category which covered the

lease payments of the Pen Pad devices. Costs for orthography update costs in GIS increased this year. Sundry Expenses noted a slight decrease in the categories of Training and Travel costs, and Dues and

Subscriptions. Legal Notice and Advertising, had a slight increase as did Recruitment costs. Insurance and Benefits increased in the categories of Group Medical Insurance and Retirement. Group

Medical costs are anticipated at a rate of 14% and the Retirement expense was increased to 18% to keep the employee program current. A slight increase was noted for Group Benefits which captures only the premium payments for all ancillary insurance programs and in the Medicare Tax category. Also a slight increase was noted in the General Insurance category.

Professional Services decreased slightly overall from last year due to reduced costs in ARB

Compensation service fees. Total number of hearing days and members service were reduced. Lawsuit activity showed a slight decrease from the previous fiscal year but the costs remain constant. A slight increase in the Consultants category was noted for possible lawsuit activity.

Capital Expenditures notes an overall increase which is attributed to the purchase of the new iPad

computers for the appraisal field devices. Funds are budgeted for Equipment in the IT Department for one (1) Dell R810 Server; three (3) Dell R710 Citrix Servers; two (2) MD1220 Disk Arrays; and ninety seven (97) iPads/computing Desktops.

Technology Development and Capital Improvement, includes no requested or budgeted funds for this

fiscal year.

3

Dallas Central Appraisal District

Proposed Areas Of Change

2012/2013 2013/2014 Increase or Percent

Approved Proposed Decrease Variance

BUDGET EXPENDITURES:

Salaries & Wages $12,377,480 $12,315,478 ($62,002) -0.50%

Auto Expense $762,549 $764,890 $2,341 0.31%

Supplies & Materials $490,026 $544,590 $54,564 11.13%

Operational Services $59,460 $68,500 $9,040 15.20%

Maintenance of Structure $410,459 $375,934 ($34,525) -8.41%

Maintenance of Equipment $256,099 $221,045 ($35,054) -13.69%

Contractual Services $572,534 $559,617 ($12,917) -2.26%

Sundry Expenses $300,154 $289,358 ($10,796) -3.60%

Insurance & Benefits $4,627,493 $5,030,951 $403,458 8.72%

Professional Services $1,546,301 $1,505,024 ($41,277) -2.67%

Capital Expenditures $114,000 $197,590 $83,590 73.32%

Technology Development $0 $0 $0 0.00%

Contingency $0 $0 $0 0.00%

Total Expenditures $21,516,555 $21,872,977 $356,422 1.66%

4

Budget Year 2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 2013/2014

Budget Amount $21,380,063 $21,799,127 $21,733,893 $21,516,555 $21,516,555 $21,872,977

Budget Change $420,038 $419,064 -$65,234 -$217,338 $0 $356,422

% Budget Change 2.00% 1.96% -0.30% -1.00% 0% 1.66%

Merit Increases 3.50% 3.00% 0.00% 0.00% 0.00% 3.00%

Entity Salary Survey 3.58% 3.19% 1.50% 1.09%

1.08%

3.13%

# of Personnel 250 245 240 232 229 229

Dallas Central Appraisal District Statistical Analysis

5

2013/2014

Budget by Category

Category Budget Total Percent

1 Salaries & Wages $12,315,478 56.3%

2 Auto Expenses 764,890 3.5%

3 Supplies & Materials 544,590 2.5%

4 Operational Services 68,500 0.3%

5 Maintenance of Structure 375,934 1.7%

6 Maintenance of Equipment 221,045 1.0%

7 Contractual Services 559,617 2.6%

8 Sundry Expenses 289,358 1.3%

9 Insurance & Benefits 5,030,951 23.0%

10 Professional Services 1,505,024 6.9%

11 Capital Expenditures 197,590 0.9%

Total $21,872,977 100%

6

2011/2012 2011/2012 2012/2013 2013/2014

Category Approved Actual Approved Proposed

Consolidated

Office of Chief Appraiser $1,189,527 $1,179,331 $1,152,841 $1,145,975

Consolidated

Administrative Services 3,626,746 3,715,306 3,655,153 3,616,040

Consolidated

Legal Services 1,287,192 1,252,572 1,297,337 1,304,260

Consolidated

Information Technology 2,369,656 2,097,962 2,296,976 2,421,716

Consolidated

Appraisal Services 13,043,434 12,627,265 13,114,248 13,384,986

Contingency 0 0 0 0

Total $21,516,555 $20,872,436 $21,516,555 $21,872,977

Dallas Central Appraisal District

Budget Comparison

7

2013/2014

Budget By Department

Department Budget Total Percent

Office of Chief Appraiser $1,145,975 5.2%

Administrative Services 3,616,040 16.5%

Legal Services 1,304,260 6.0%

Information Technology 2,421,716 11.1%

Appraisal Services 13,384,986 61.2%

Total $21,872,977 100%

8

Office of Chief Appraiser

Administrative Services

Legal Services

Information Technology

Appraisal Services

2013/2014

Personnel Breakdown

Number of

Department Personnel Percent

Office of Chief Appraiser 7 3.1%

Administrative Services 32 13.9%

Legal Services 3 1.3%

Information Technology 15 6.6%

Appraisal Services 172 75.1%

Total 229 100%

9

2013/2014

Revenue Resources

Source Amount Percent

Local Support $21,632,977 98.90%

Special Assessments 0 0.00%

Rendition Fees 230,000 1.05%

Investment Proceeds 0 0.00%

Other Income 10,000 0.05%

Total $21,872,977 100.00%

10

Revenue Summary

Budget Allocation Comparison

2012/2013 2013/2014

Approved % Proposed %

Allocation Allocation

Local Support

Municipalities $5,534,969 26.01% $5,595,043 25.86%

School Districts 8,649,401 40.65% $8,826,942 40.80%

County/County Wide 6,803,874 31.98% $6,924,253 32.01%

Special Districts

Non-County Wide 288,311 1.36% $286,739 1.33%

Special Districts

TOTAL $21,276,555 100% $21,632,977 100%

11

2013/2014

PROPOSED BUDGET ALLOCATIONS

2012/2013 2013/2014

Approved Proposed Increase or

Allocation Allocation (Decrease) % Change

County/County-wide

Special Districts:

Dallas County 2,839,871 2,815,668 (24,203) -0.85%

D.C.H.D. 3,168,716 3,142,493 (26,223) -0.83%

D.C.C.D. 795,287 966,092 170,805 21.48%

Subtotal 6,803,874 6,924,253 120,379 1.77%

Non-County-Wide

Special Districts:

Dallas URD 209,109 214,059 4,950 2.37%

Valwood Imp. Authority 22,027 23,022 995 4.52%

Irving FCD 1 6,181 6,545 364 5.89%

Irving FCD 3 8,883 9,613 730 8.22%

Dallas FCD1 31,112 23,854 (7,258) -23.33%

Denton County LID #1 1,407 1,835 428 30.42%

Denton County RUD #1 794 75 (719) -90.55%

Lancaster MUD #1 1,444 1,411 (33) -2.29%

Grand Prairie Metro URD 1,698 526 (1,172) -69.02%

Northwest FCD 5,656 5,799 143 2.53%

Subtotal 288,311 286,739 (1,572) -0.55%

12

2012/2013 2013/2014

Approved Proposed Increase or

Allocation Allocation (Decrease) % ChangeCities:Addison 86,340 89,236 2,896 3.35%Balch Springs 24,681 25,527 846 3.43%Carrollton 137,447 140,030 2,583 1.88%Cedar Hill 89,489 89,279 (210) -0.23%Cockrell Hill 3,511 3,483 (28) -0.80%Combine 128 151 23 17.97%Coppell 159,170 159,154 (16) -0.01%Dallas 3,029,675 3,083,651 53,976 1.78%DeSoto 104,000 103,427 (573) -0.55%Duncanville 60,723 58,777 (1,946) -3.20%Farmers Branch 95,255 95,812 557 0.58%Ferris 340 346 6 1.76%Garland 351,574 344,938 (6,636) -1.89%Glenn Heights 10,872 10,643 (229) -2.11%Grand Prairie 152,085 149,527 (2,558) -1.68%Grapevine 1,809 2,271 462 25.54%Highland Park 47,532 47,874 342 0.72%Hutchins 8,723 8,675 (48) -0.55%Irving 488,063 505,563 17,500 3.59%Lancaster 63,681 62,087 (1,594) -2.50%Lewisville 1,319 1,406 87 6.60%Mesquite 180,340 175,184 (5,156) -2.86%Ovilla 745 736 (9) -1.21%Richardson 197,234 199,218 1,984 1.01%Rowlett 98,851 97,132 (1,719) -1.74%Sachse 30,191 30,178 (13) -0.04%Seagoville 15,702 15,424 (278) -1.77%Sunnyvale 15,383 15,121 (262) -1.70%University Park 75,957 76,083 126 0.17%Wilmer 3,766 3,764 (2) -0.05%Wylie 383 346 (37) -9.66%

Total 5,534,969 5,595,043 60,074 1.09%

PROPOSED BUDGET ALLOCATIONS

13

2012/2013 2013/2014

Approved Proposed Increase or

Allocation Allocation (Decrease) % Change

School Districts:

Carrollton/F.B. 593,652 607,080 13,428 2.26%

Cedar Hill 147,008 146,453 (555) -0.38%

Coppell 401,222 421,971 20,749 5.17%

Dallas 3,835,557 3,949,536 113,979 2.97%

Dallas County Schools 61,787 62,813 1,026 1.66%

DeSoto 119,430 118,939 (491) -0.41%

Duncanville 180,361 184,949 4,588 2.54%

Ferris 884 903 19 2.15%

Garland 664,700 662,918 (1,782) -0.27%

Grand Prairie 280,162 273,248 (6,914) -2.47%

Grapevine/Colleyville 14,913 11,626 (3,287) -22.04%

Highland Park 496,563 506,909 10,346 2.08%

Irving 520,707 534,086 13,379 2.57%

Lancaster 85,214 83,329 (1,885) -2.21%

Mesquite 345,785 341,419 (4,366) -1.26%

Richardson 857,298 874,517 17,219 2.01%

Sunnyvale 44,158 46,246 2,088 4.73%

Wilmer/Hutchins 0 0 0 0.00%

Total 8,649,401 8,826,942 177,541 2.05%

PROPOSED BUDGET ALLOCATIONS

14

APPRAISAL DISTRICT COMPARISONS

2013 Real Personal Total Cost Per Parcel

Budget Amount Property Property Parcels 2013 2012 2011

Dallas CAD $21,872,977 719,224 98,281 817,505 $26.76 $26.45 $26.43

Harris CAD $64,496,862 1,371,504 183,217 1,554,721 $41.48 $42.75 $44.32

Tarrant CAD $20,404,794 626,858 48,070 674,928 $30.23 $29.71 $29.24

Bexar CAD $14,581,471 587,794 42,874 630,668 $23.12 $21.70 $23.24

Travis CAD $13,375,023 357,423 41,485 398,908 $33.53 $32.84 $32.26

El Paso CAD $12,426,589 374,806 23,528 398,334 $31.20 $31.56 $30.91

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

2013 2012 2011

Dallas

Harris

Tarrant

Bexar

Travis

El Paso

15

Dallas Central Appraisal District

$21,872,977

817,505

229

3,570

95

8,605

Harris Central Appraisal District

$64,496,862

1,554,721

623

2,496

310

5,015

Tarrant Appraisal District

$20,404,794

674,928

200

3,374

81

8,332

Bexar Appraisal District

$14,581,471

630,668

152

4,149

67

9,413

Travis Central Appraisal District

$13,375,023

398,908

128

3,116

53

7,527

El Paso Central Appraisal District

$12,426,589

398,334

140

2,845

44

9,053

APPRAISAL DISTRICT EMPLOYEE COMPARISONS

Appraisal District

2013 Budget Total

Parcels Number of Employees

Parcels

per Employee

Number of

Parcels per Appraiser Appraisers

16

2012-2013 BUDGET/LEVY COMPARISON

2012 2013

Tax Levy Budget Amount Cost As % Of Levy

Dallas CAD $4,414,838,726 $21,872,977 0.50

Harris CAD * $7,455,649,376 $64,496,862 0.87

Tarrant CAD $3,082,570,207 $20,404,794 0.66

Bexar CAD $2,479,649,249 $14,581,471 0.59

Travis CAD $2,575,477,017 $13,375,023 0.52

El Paso CAD $923,113,511 $12,426,589 1.35

* 2011 Tax Levy

ACCURACY OF APPRAISALSMedian Level Coefficient of of Appraisals Dispersion

1.00 9.78

Harris Central Appraisal District* 0.99 11.49

Tarrant Appraisal District * 1.00 8.63

Bexar Appraisal District 1.00 13.65

Travis Central Appraisal District 0.98 8.88

E 0.99

Dallas Central Appraisal District

* 2011

l Paso Central Appraisal District 9.48

17

TEXAS COMPTROLLER OF PUBLIC ACCOUNTS METHODS AND ASSISTANCE PROGRAM 2011 REPORT

DALLAS CENTRAL APPRAISAL DISTRICT

MANDATORY PASS/FAIL

1. Does the appraisal district have up-to-date appraisal maps from which

property may be located pursuant to Comptroller Rule 9.3002? PASS

2. Do property inspections match appraisal district records? PASS

3. Does the appraisal district have written procedures for appraisal? PASS

4. Are values reproducible using the written procedures and appraisal

records? PASS

5. Were all appraisal district documents requested by PTAD made available

to the reviewer by the required date? PASS

APPRAISAL DISTRICT ACTIVITIES RATING

Governance EXCEEDS

Taxpayer Assistance EXCEEDS

Operating Procedures EXCEEDS

Appraisal Standards, Procedures and Methodology EXCEEDS

METHODS AND ASSISTANCE PROGRAM

The Methods and Assistance Program (MAP) review is conducted in accordance with

Tax Code Section 5.10 (a), effective January 1, 2010, and related State Comptroller rule

9.301. The Property Tax Assistance Division (PTAD) performed the reviews for 128

appraisal districts in 2010 and 125 appraisal districts in 2011. As part of the MAP

review process, the appraisal district is required to submit, in advance of the review,

electronic copies of procedures, policies, notices, manuals and related materials

necessary for the completion of this review. Comptroller reviewers also collect related

information at the time of the on-site review, compare appraisal district records to

existing property and locate property using district maps. Each appraisal district is

reviewed every other year.

The review conducted by the Comptroller’s Office reviews the appraisal districts:

•governance;

•taxpayer assistance;

•operating procedures; and

•appraisal standards, procedures and methodology.

Appraisal District Ratings:

Exceeds – total point score exceeds 100.

Meets - total point score ranges from 90 to 100.

Needs Improvement – total point score ranges from 75 to less than 90.

Unsatisfactory - - total point score is less than 75.

The Dallas Central Appraisal District scored a perfect rating on the MAP review for 2011.

18