Local NewsTaxes & SpendingDenton Appraisal District Under Fire for Missed Deadlines, Unreliability

Denton Central Appraisal District has been the subject of intense scrutiny and criticism over the past several months.
November 23, 2022
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The Denton Central Appraisal District (DCAD) has a new chief appraiser, but the myriad problems he is facing could lead to more challenges before the situation improves.

Tax-paying residents, commercial property owners, taxing entity leaders, whistleblowers, and an independent consultant have all raised concerns about the way things are handled at the district.

In September, Chief Appraiser Hope McClure was placed on administrative leave with negotiations for a final separation agreement underway. In her place, Don Spencer took the helm.

An evaluation of the appraisal district done by an outside consultant was presented to the DCAD Board of Directors at its June meeting.

Consultant Richard Petree said he expected the project would include analyzing the personnel and building needs of the district and perhaps include recommending some best practices, but claims he found “serious problems with the culture” that need immediate attention.

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He acknowledged that “trust is lacking at DCAD” and also called the environment at DCAD “toxic.”

While the analysis Petree completed addressed issues with property valuations and the handling of protests that others have raised, some critics believe the issues deserve more attention.

The Denton County Commissioners Court adopted a resolution at its August meeting disapproving the DCAD Fiscal Year (FY) 2023 budget. Before the resolution was adopted, County Judge Andy Eads remarked that the commissioners court had been “critical of the operations at the Denton Central Appraisal District” for several months, sending them a formal letter in January expressing “frustration” and a “lack of trust.”

He noted an alarming trend as DCAD has struggled over the last few years to meet the state-imposed deadline for delivering the tax rolls to taxing entities, and said the justification offered was “full of blame and excuses.”

Since then, 31 of the 60 affected taxing entities disapproved the DCAD proposed FY 2023 budget.

Beverly Henley, former chairwoman of DCAD’s Appraisal Review Board (ARB), saw enough that she filed a complaint in December 2021 with the Texas Department of Licensing and Regulation, asking it to investigate “suspected fraud that has been committed knowingly and intentionally” by then-Chief Appraiser McClure.

The ARB, which holds valuation protest hearings with citizens, is independent from the appraisal district but works closely with it.

Henley said in her complaint that, in an effort to meet state-required deadlines in July for certifying 95 percent of property tax rolls, McClure manipulated the records of DCAD. She reduced the values by 10 percent and moved between 8,000 and 10,000 properties that were still under protest into the “closed” category for certification, then re-opened their status as the rolls were certified.

The result was some taxpayers receiving a confusing number of statements for their property taxes based on the differing values because DCAD had changed the valuation, closed the protest, re-opened the protest, and again adjusted the valuation. Statements were generated each time a change was made in the computer system, Henley explained to The Texan.

In February 2021, Henley said she was also asked by Spencer, who was then McClure’s deputy, to hold protests utilizing only one-person panels to expedite the protest hearing process, knowing they would struggle to get the protests completed in time to certify the property rolls for the taxing entities.

At the time, the law required review panels to be made up of at least three members of the ARB. Additionally, the law prohibits an employee of the appraisal district from speaking with a member of the ARB about the hearing process, Henley said.

She also saw nepotism exercised in the hiring of McClure. McClure’s mother, Kathy Williams, was a deputy chief appraiser for the district. When it came time to hire the new chief appraiser, Henley said there were several more qualified candidates passed over, while McClure was chosen after serving only as an office manager and not as an appraiser.

Spencer, who is now DCAD’s chief appraiser, was the hand-picked successor and friend of McClure and privy to all of her questionable activities, Henley said. She is doubtful that he will fix the issues within the district.

Mark Vargas, mayor of the town of Lakewood Village and a forensic accountant, also complained to the DCAD board about the district’s practices.

He told the board at its June 23 meeting that the values of properties within its limits had been increased by 112 percent. When residents protested the valuation based on easements on their land held by the federal government, he claimed that appraisal district employees refused to consider the easements in the land valuation.

He added that when appraisers do agree to adjust the valuation of the property, they make the adjustment to the value of the house so that the land value stays high.

When someone protests their property valuation, they often present comparable market values based on square footage and home features. The smaller the percentage of their property valuation that is based on their home, the less change in value they can expect to receive.

In 2019, the Texas Legislature passed a new law raising the standard under which the appraisal may be increased in a year. If a homeowner protests his property value and achieves a reduction in one year, the appraiser must present clear and convincing evidence to show that the value ought to be increased the next year.

Mitchell Vexler, a commercial property developer, has sued the district for improperly valuing his shopping center property in Flower Mound which has increased in value by 400 percent in one year.

He and his accountant began looking into the methods DCAD uses to appraise property value.

“In plain English, we have the evidence that shows district employees are making [things] up,” Vexler told a reporter. “The numbers have no basis in fact.”

In a deposition of McClure in pursuit of the lawsuit filed by Vexler, McClure agreed that the district must abide by the national Uniform Standards of Professional Appraisal Practice (USPAP).

Vexler has compiled a list of ways in which DCAD has failed to follow those standards — for instance, failing to maintain proper records.

 “At the deposition, we learned that [the district] and its then attorney failed to protect the confidential personal data of roughly 500,000 property accounts and gave ownership of that data to the then software provider,” said Vexler.

He also believes the mass appraisal techniques used by the district do not comply with the USPAP standards.

“DCAD does properly identify comparable properties or make proper adjustments between similar properties. All of this leads to their failure to produce credible values, a credible mass appraisal, as seen by way of the inflated values issued on the Notices of Appraisal, the resulting number of protests, and the average percentage value of the reductions,” Vexler wrote.

Henley said she is working with several legislators to propose a bill this legislative session to address some of these issues, specifically the accountability of the appraisal district boards to the public they serve.

The board of the appraisal district is elected by the taxing entities like cities and counties that benefit from the appraisals issued. Each taxing entity is awarded a certain number of votes based on its tax base in the appraisal district.

“There’s really no oversight for the central appraisal district boards of directors,” Henley offered.

The next legislative session starts in January 2023, and legislation is already being filed.

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Kim Roberts

Kim Roberts is a regional reporter for the Texan in the DFW metroplex area where she has lived for over twenty years. She has a Juris Doctor from Baylor University Law School and a Bachelor's in government from Angelo State University. In her free time, Kim home schools her daughter and coaches high school extemporaneous speaking and apologetics. She has been happily married to her husband for 23 years, has three wonderful children, and two dogs.

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