The City of El Paso is asking the Central Appraisal District to take action after a sky-high appraisal was reversed, costing the city nearly $3 million dollars in revenue. The CAD said it's a statewide problem.
The issue revolves around the way CAD appraised Western Refining in 2012. Initially, CAD said Western Refining's taxable value was more than $745,349,000. But after the refinery fought that amount, they settled at $305,455,211, which left the city with fewer tax dollars than it budgeted for fiscal year 2013 and some city officials questioning the work of the CAD.
In a letter dated May 6, City Manager Joyce Wilson asks the CAD's Executive Director and Chief Appraiser Dinah Kilgore to take measures that will prevent such a variance in appraisals. She asks Kilgore to hire outside, professional appraisers to handle the appraisals for big companies in El Paso. "A variance of this nature is egregious and on the surface seems either irresponsible or incompetent," Wilson wrote.
CAD officials said they already have outside appraisers. "The appraisal district itself does not appraise the refinery. We don't have the in-house expertise to appraise a property of that complexity. We contract to an outside appraisal from Austin," said David Stone, the El Paso CAD's Second Chief Appraiser, on Wednesday.
He said the outside engineering appraisal firm determined Western's market value was the $745 million. He said based on how much money the refinery makes, if it was sold today, it would be sold for close to that amount. But Stone said there are two things the CAD has to evaluate when appraising a property: it's market value and how it compares to similar properties.
Because similar properties, like a refinery in Galveston, have also been able to fight and win against other CAD-appraised values, the El Paso CAD had to settle, said Stone. He said even though they believe their initial number was accurate, refineries have more money to keep this in court longer and the CAD could not risk losing millions in legal fees.
City Rep. Ann Morgan Lilly, who is also on the board of the CAD, is not convinced "The (CAD) staff needed to have a good plan as to why they thought they could win in court ... the staff obviously didn't know what they were doing," she said Wednesday.
"Ms. Kilgore has done a very good job running the appraisal district and I think we're one of the best in the state," citing awards they've received from the International Association of Assessing Officers.
Lilly said the issue will affect the way she scores Kilgore in her evaluation, which the CAD board performs. Stone said Kilgore was out of town.
Wilson also sent a letter of her letter to Kilgore to the State Comptroller, who responded by letting Wilson know she could file a complaint with the Texas Department of Licensing and Regulation or take up the issue with the CAD board.
State Comptroller Susan Combs also wrote to Wilson that Kilgore could not appraise the refinery below market value. "The suggestion you made to certify a lower value than market value rate is unworkable and would require the chief appraiser to breach her legal duties and ethical responsibilities," Combs wrote.
Stone said the CAD warned the taxing entities not to count with the money from the initial appraisal. "We warned all of the taxing entities that that value was much higher than the prior year and there was a good probability there was going to be a court case and there could be a loss so not to count on revenues of that higher value until it was settled."
Lilly denies that. She said the CAD assured the city they were ready to defend the initial appraisal. "I know (Deputy City Manager) Bill Studer asked them 'is this going to be a real number?' - and they (CAD) said yes, we're going to court against Western Refining."