By: Scott Nishimura1
By: Kyle Whitecotton
Story and photography by Yamil Berard
At the Sept. 16 meeting of the board of directors of the Tarrant Appraisal District, a proud chief appraiser began the 9 a.m. discussion by notifying his bosses that his office had won a big award.
TAD Chief Appraiser Jeffery D. Law compared the award to winning the World Series. “I think it is a high honor for us,” Law said.
But Law's comment was met with eye-rolling in the backrooms of county offices, the boardrooms of cities and school districts — even on the steps of the Texas Capitol.
“I got a problem with that,'' said state Sen. Paul Bettencourt (R-Houston) the chairman of an influential state tax overhaul committee. “You don't take awards for stuff that doesn't work.”
At issue is a $2 million software system that is the basis for the appraisal district's tax and valuation activity. Since it went “live" in October 2014, it has been criticized for producing rampant inaccuracies, errors and incomplete data. Also at issue is Law's leadership as the new system came on-line.
A lot is at stake. Law is in charge of highly sensitive data that powers the engines of the North Texas economy.
The chief appraiser has powerful allies at his side, including Fort Worth Mayor Betsy Price. Price concedes there have been problems with the software.
“Anytime you make a conversion like that, you have a few issues,” she said in June.
Law has emphasized that he has helped clean up thousands of account errors. Each time, he's made promises to do better.
“I have committed to working with the tax office to give them right information, the correct information,” Law said at the Sept. 16 meeting.
But some say he's stuck in a denial that makes him ill-suited to get to the bottom of the problems.
One skeptic is Renee Tidwell, the Tarrant County auditor, who says precisely determining what is wrong is almost impossible and could take years.
In August, Tidwell got reports from the appraisal district that contained thousands of inconsistencies and changes that swung in different directions.
“I still have concerns about the accuracy of the information, but Mr. Law continues to tell everyone that problems are under control and are being corrected,” Tidwell said.
Local and state lawmakers often say Law's office ignored a basic rule of bringing on new technology.
Instead of keeping the legacy mainframe running for a minimum of two years to be available for backup in case there are problems with the new software, it was turned off as the new one came on.
That gap was compounded by the fact that most of the mainframe technicians were unfamiliar with the computer language of the new software.
“I understand the desire to get off the legacy system,'' said Travis Farral, vice president of the Information Systems Security Association, Cowtown Chapter, a local group of technology experts.
“But slamming something new in place after it's been running for so many years? It's kind of an amateur mistake.”
Law, who makes almost $170,000 a year in his post, has taken responsibility for some of the missteps. “We are sorry that those we serve were impacted by a less than satisfactory implementation.” he said.
But he also wants some of the blame shifted to the technology vendor, Thomson Reuters.
He says the company did not lend a hand during the system's implementation.
Law said that because of a lack in technical support, the appraisal district did not pay the company the $793,000 it was owed. It also withheld payment on an additional $805,000.
“This is more than 50 percent of the total cost we would have incurred had the full implementation met our expectation,” Law wrote in response to questions on Oct. 4.
The company has said earlier that it designed the software system to be accurate and transparent to the public.
It said that it worked with Law in March to address issues and “to better equip" the appraisal district to effectively manage citizens' concerns and assessment appeals.
Another criticism is that counties and cities, for many months, were not kept in the loop about developments at the Handley-Ederville offices of the appraisal district.
For instance, they had no idea that in October 2014, there was a software slowdown that did not permit appraisers to update data files. The slowdown made it harder to record the latest information about the taxable value of properties.
Critics say new properties in the county were likely missed, and last-minute changes to existing ones were not recorded.
Tidwell, the county auditor, pointed to this lack of communication in an August audit to Tarrant County Commissioners.
“During the implementation and conversion process, communication with TAD was insufficient and sporadic,'' she wrote in the audit. “In addition, end users were not part of the initial phases of the process nor were they given the opportunity to review and comment on the validity or integrity of the data files.”
DaiAnn Mooney, chief financial officer for the Grapevine-Colleyville school district, said it would have been a smoother transition if she and her staff had been offered some training.
Her staff had been accustomed to the format of the legacy system. The new system's reports were cumbersome to read, and there was little or no support.
“They really didn't go over anything with us,” Mooney said.
In July 2015, Law got hit with an avalanche of calls and questions from Mooney and others.
They wanted to know why the preliminary values released on July 2015 looked anemic compared to results of adjoining counties.
Denton County's taxable values shot up by 10 percent from 2014 to 2015. Dallas had increased 7.5 percent over the same period. Tarrant's number: 5 percent.
At that point, Law held a series of meetings with the taxing entities to reassure them.
But some school officials speculated that the 2015 appraisals had been incomplete and that an undetermined number of properties had not been included in the overall $142 billion appraisal of taxable properties.
A January property value study of Tarrant County by the state comptroller of public accounts reported a gap in taxable values in the tens of millions of dollars.
Tidwell, in her August audit, said the county still had not received an “adequate explanation" for the difference in taxable values between Tarrant and its neighbors.
It's one of the worst things financial officers can do: Tell their bosses they overestimated revenues.
So, Tidwell, who is required to set revenues, didn't budge. She flatly told county commissioners that they wouldn't get additional revenue because the data from the appraisal district was unreliable.
The commissioners court by law cannot approve a budget that exceeds the auditor's revenue estimate.
Even as late as the Friday before she met with commissioners, Tidwell was still flagging errors on data files provided to her by the appraisal district.
Throughout the year, she said she received numerous unusable files. One file contained more than 800,000 records. Many accounts changed multiple times.
And she isn't the only one who says she can't trust the numbers. Elsie Schiro, chief financial officer with the Fort Worth school district, and Mooney from Grapevine-Colleyville, say the same.
“We have reason to doubt their overall processes are accurate,” Schiro said.
Some elected officials say they worry about the accumulation of inaccurate data. Some inconsistencies go back to 2014.
“These problems are very alarming,” Tarrant County Commissioner Andy Nguyen said. “They compromise the integrity of our county, and they erode the public trust in our system.”
Tidwell had no easy answer.
“I'm not sure how you fix it until everyone eventually looks at their tax bill.” she said.
It's pretty typical for taxpayers to get angry at Ron Wright, the county tax-assessor collector, for what they owe.
But it's highly unusual for Wright's tax office to owe taxpayers $13 million in one swoop. Usually, refunds trickle in and are paid throughout the year. In September, however, an avalanche of up to three years’ worth of refunds were due.
The oversight wasn't Wright's fault, though. Wright doesn't determine how much taxes you pay. The appraisal district does. (His job is to bill you.)
In late summer, Wright got hit by a data file that contained hundreds of thousands of records with questionable changes.
“It was a mess,” Wright said of the data file report. “Just rubbish.”
Tidwell, the county auditor, said data files contained an unusual amount of exceptions, including errors that ranged from duplicate homestead exemptions on the same account to missing address information. Other errors included changes prohibited by the property tax code and duplicate cities or schools on the same account.
Wright suspected that the jumbled files were attributed to an upgrade to the software system in April. But Law declined to answer written questions about whether the errors in the reports were related to the upgrade, nor did he provide details of its results.
Normally, Wright's cash reserves are flush in November, December and January near the deadline for people to pay their taxes. But this July, August and September, he didn't have enough money on hand to cover the refunds.
He had to send letters to 67 taxing entities, including school districts and cities, to tell them they wouldn't get their money on time. The county and the cities of Fort Worth and Arlington each were owed about $1 million.
Wright only got out of the jam when the county loaned itself money to cover the rest of the refunds.
Needless to say, he's not a fan of the appraisal district's software. “We haven't gone three months without a major problem,'' Wright said.
“We expected a year of problems; two years is unacceptable,'' he said. “There cannot be a third.”
Law has told his bosses that he has assembled a team that reviews data file reports before they are shipped to Wright's tax office.
He's also said he will improve communications with Wright's office. Tidwell has agreed to send some of her staff to Law's office to help validate reports.
And an audit of the software system by a Fort Worth firm, due in November, is expected to give recommendations for improving operations.
But repairing the public trust is another matter. As tax protest hearings come to a close this fall, some tax agents already have noticed that they and their clients have received letters of determination that contain errors.
Tracy Stanley, an Arlington tax agent, has shared those errors with two other tax agents who saw the same problem.
If it's system-wide, the notices of determination for the more than 100,000 taxpayers who filed a tax protest this year might not be right. (A preliminary report showed Tarrant's taxable property values from 2015 to 2016 rose 14 percent. The exact number still has to be confirmed.)
“This nightmare is just beginning,” Stanley said. “It's going to get smoking hot when the tax office starts getting information that's wrong.
“This nightmare is going to continue until a new vendor is selected.”
But the option of pulling out is not a popular or economical one, officials say.
While Wright, who describes himself as “so snake-bit,” he wouldn't recommend the product to anyone, he also says it won't be easy to simply toss the new software system.
The appraisal district is “too heavily invested and they have nothing to go back to other than what they've got.” he said.
By: Scott Nishimura1
By: Kyle Whitecotton