Preliminary & Tentative Audit Findings BOARD OF COUNTY COMMISSIONERS
County of Monroe Mayor Sylvia J. Murphy,District 5
Mayor Pro Tem,Danny L.Kolhage,District I
The Florida Keys
George Neugent,District 2
Heather Carruthers.District 3
David Rice,District 4
Commissioner David Rice,District 4
9400 Overseas Hwy.Suite 210
Florida Keys Marathon Airport Terminal
Marathon,FL 33050
PH: 305-289-6000
FX: 305-289-4610
Email:boccdis41a::monroecounty-11.gov
or Rice-David r monroecounty-fl.gov
April 28, 2014
David W. Martin,CPA
Auditor General
State of Florida
c/o Local Government Audits/Section 341
111 West Madison Street
Tallahassee, FL 32399-1450
Re: County Value Adjustment Boards and
Department of Revenue's Oversight Thereof
Dear Mr. Martin,
The Monroe County Value Adjustment Board ("VAB") appreciates the opportunity to respond to
preliminary and tentative audit findings issued in your letter of March 31, 2014.
The following response is in the order of the issues presented in your letter as they concern VAB.
Finding No. 4. Your letter raises a concern that VAB did not verify the work experience of its
special magistrates or that such verification was not evident in our records.
VAB's imperfect verification of special magistrate qualifications arose out of a combination of
factors: a small county, a small pool of applicants for the position, and a close familiarity with
those applicants. The Clerk and the Counsel reviewed the applications annually and gave an oral
report to the Board at its organizational meeting.
Henceforth, the Clerk and Counsel will prepare a written report of the applicants' qualifications for
the Board's review. The Counsel will check for any disciplinary action involving the applicants
and make these findings a part of the report. The Clerk will check that appropriate professional
licenses are current and include this information in the report as well. These two additional checks
will ensure an updated review for the renewal of existing special magistrates and for the evaluation
of new applicants for the position.
VAB Audit Response
April 28, 2014
Page 2
Finding No.6. Your letter indicates that VAB did not document sufficiently the results of the
verification of the annual pre-hearing checklist,as set forth in Rule 12D-9.014.
The agenda for the 2013 organizational meeting included an item that formalized the pre-hearing
checklist. In prior years, the Clerk and Counsel reviewed the checklist together and,once satisfied,
proceeded to schedule the organizational meeting.
VAB will continue to address the pre-hearing checklist at its organizational meeting with
explicitness. In the future, the agenda back-up will contain a statement from the Clerk and Counsel
that each element(which shall be identified) of the pre-hearing checklist has been verified.
Finding No. 7. Your letter states that VAB did not make available at its organizational meeting
copies of applicable DOR rules and associated forms.
VAB made copies of the rules and associated forms available at the 2013 organizational meeting,
and shall continue to do so annually.
Finding No. 11. Your letter indicates that VAB did not place into its notice of the organizational
meeting the required disclosure related to a verbatim record of the proceedings for an appeal.
VAB immediately will place on each public notice, including meeting and hearing agendas,the
disclosure relating to a verbatim record of the proceedings for an appeal,as required by Florida
Statutes section 286.0105.
Finding No. 12. Your letter asserts that VAB did not reduce expenses billed to the Board of
County Commissioners and the School Board by deducting the amount raised from filing fees.
The VAB Clerk corrected this oversight on January 29, 2014. In all future tax appeal years VAB
will abide by this requirement, as set forth in Florida Statutes section 194.013(4).
Sincerely,
ti
avi P. Ri e
Chairman, Monroe County Value Adjustment Board
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David W. Martin, CPA
Auditor General
State of Florida
c/o Local Gov. Audits/Section 347
111 West Madison Street 3. Service Type
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PS Form 3800,August 2006 See Reverse for Instructions
Vitia Fernandez
From: Vitia Fernandez
Sent: Wednesday, April 30, 2014 11:50 AM
To: 'flaudgen_audrpt_Ig@aud.state.fl.us'
Cc: Lindsey Ballard; bt429@bellsouth.net; stephaniebaker@aud.state.fl.us
Subject: FW: Monroe County- 2012 Audit Response Letter
Attachments: Untitled.pdf
Sorry, I misspelled one of the email addresses that's why I had to send it more than once.
Please see attached the 2012 Audit Response Letter from Monroe County. The original was sent to
you via certified mail this morning. Should you have any questions or concerns, do not hesitate to
contact our office.
Thank you and have a great day.
Vitia Fernandez
Executive Aide to the Clerk
Monroe County Clerk of Court
500 Whitehead St
Key West, FL 33040
(305) 295-3130
vfernandez@monroe-clerk.com
monroe-clerk.com
•i':- =� {-:' AMY NEAVILIN, CPA
CLERK OF CIRCUIT COURT&COMPTROLLER
sir,,:g tnnettwtrma t
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Eo AUDITOR GENERAL e : P�F•vF FLUE:
�. , STATE OF FLORIDA _li
G74 Claude Pepper Building ,,,, ,_—
111 West Madison Street •i''Eli�'/"
Tallahassee,Florida 32399-1450
DAVID W.MARTIN,CPA • PHONE: 850-412-2722
AUDITOR GENERAL FAX: 850-488-6975
March 31,2014
The Honorable David Rice
Chair,Value Adjustment Board
Monroe County
9400 Overseas Hwy. #210
Marathon Airport Terminal
Marathon,Florida 33050
Dear Mr. Rice:
Enclosed is a list of preliminary and tentative audit findings and recommendations which may be
included in a report to be prepared on our performance audit of: •
County Value Adjustment Boards and Department of Revenue's Oversight Thereof
Pursuant to Section 11.45(4)(d), Florida Statutes,you are required to submit to me within thirty (30)
days after receipt of this list a written statement of explanation concerning your actual or proposed
corrective actions. Your response should include actual or proposed corrective actions concerning
finding Nos. 4,6,7, 11,and 12,and you may respond,if you so choose,to finding Nos. 1 and 3.
Your written statement of explanation should be submitted electronically to
flaudgen audrpt lg(a,aud.state.fl.us (flaudgen_audrpt_lg@aud.state.fl.us) in source format (e.g.,
Word or WordPerfect) and include your digitized signature. For quality reproduction purposes, if
you are not submitting your response in source format, please convert your response to PDF and
not scan to PDF. If technical issues make an electronic response not possible, then a hard copy
(paper) response will be acceptable. If you are submitting a hard copy,address to Auditor General,
Local Government Audits/Section 341, 111 West Madison Street,Tallahassee,FL 32399-1450.
Please e-mail this Office at flaudgen audrpt lg@aud.state.fl.us to indicate receipt of the preliminary
and tentative findings. Absent such receipt,delivery of the enclosed list of findings is presumed, by
law,to be made when it is delivered to your office.
If within the 30-day period you have questions or desire further discussion on any of the proposed
findings and recommendations, please contact Marilyn Rosetti at (850)412-2881 or at
marilynrosetti@a,aud.state.fl.us.
Sincerely,
)(24C/2. /71(0-2: -
David W. Martin
DWM/jk
Enclosures
c: Value Adjustment Board Members
The Honorable Amy Heavilin,Clerk of Circuit Court&Comptroller
****PRELIMINARY AND TENTATIVE FINDINGS****
COUNTY VALUE ADJUSTMENT BOARDS AND
DEPARTMENT OF REVENUE'S OVERSIGHT THEREOF
EXECUTIVE SUMMARY
Our performance audit of the county Value Adjustment Boards (VABs) and the Department of Revenue
(DOR)'s oversight thereof disclosed the following:
MANAGEMENT OVERSIGHT
Finding No. 1: Independence in the appeal process at the local level may have been compromised due to
local officials involved in the process who may not have been impartial and whose operations are funded
with the same property tax revenue at stake in the appeal process.
Finding No. 2: Our review disclosed an instance of noncompliance with DOR rules for one VAB that gave
the appearance of bias and undue influence in the appeal process.
SPECIAL MAGISTRATES IN THE APPEAL PROCESS
Finding No.3: Special magistrates served on multiple VABs during the same tax year, although prohibited
by the State Constitution.
Finding No.4: Selection of special magistrates may not have been based solely on experience and
qualifications, contrary to law and DOR rules, and verification of such information was not always
documented.
Finding No. 5: Special magistrate training was not verified by the DOR prior to issuing statements
acknowledging receipt of training, and one VAB did not document special magistrate training in its records.
VAB ADMINISTRATIVE HEARINGS
Finding No. 6: Verification of compliance with law and DOR rules relating to VAB prehearing
requirements was not always documented.
Finding No. 7: VAB organizational meetings were not always held in accordance with the requirements
prescribed by DOR rules.
Finding No. 8: Prescribed procedures for commencing VAB hearings were not always followed by the
VABs,contrary to DOR rules.
Finding No. 9: Some VAB's records did not evidence consideration of the property appraiser's presumption
of correctness issue,and one VAB did not consider this issue first at hearings,contrary to DOR rules.
Finding No. 10:VAB written decisions were not always sufficiently detailed contrary to law and DOR rules.
ADMINISTRATIVE MATTERS
Finding No. 11: Public notice of VAB organizational meetings and hearings were not always in accordance
with DOR rules.
Finding No. 12:VABs did not always allocate expenses between the board of county commissioners and the
school board,contrary to law.
Finding No. 13:VAB citizen members did not always meet the specific requirements provided in law and
DOR rules to serve on the VABs,and verification of such requirements was not always documented.
Finding No. 14: Documentation of taxpayer representation for a hearing was not evident for some petitions,
contrary to DOR rules.
1
• ****PRELIMINARY AND TENTATIVE FINDINGS****
Information on petitions filed,withdrawn,heard,granted,and denied for the 15 VABs selected for our review are
shown in Table 1.
Table 1
County Petitions Petitions Petitions Petitions Petitions Petitions Petitions Petitions
Filed Withdrawn Withdrawn Heard Granted Granted as Denied(1) Denied as a
as a by VAB a Percentage
Percentage (1) Percentage of Petitions
of of Petitions Heard by
Petitions Heard by VAB
Filed VAB
Broward(2) 26,525 20,437 77 6,088 740 12 5,348 88
Gilchrist 38 3 8 35 0, I 1 35 100
Hillsborough 3,324 1,851 56 1,473 87 6 1,386 94
Lee 2,219 1,515 68 704 136 19 568 81
Leon 1,618 1,445 89 173 29 1- 144 83
Martin 812 518 64 294 51 17 243 83
Miami-Dade 91,519 11,898 13 79,621 38,864 49 40,757 51
Monroe 686 642 94 44 0 I) 44 100
Orange 7,493 3,180 42 4,313 -1 2 4,242 98
Palm Beach 8,417 4,092 49 4,325 916 21 3,409 -9
Pasco 675 524 78 151 15 10 136 911
Pinellas 2,298 1,037 45 1,261 492 39 769 61
Seminole 760 319 42 441 57 13 384 ti
Suwannee 20 12 60 8 0 0 8 100
Washington 100 75 75 25 0 0 25 100
Total 146,504 47,548 32 98,956 41,458 42 57,498 58
Source:Forms DR529 filed by the VABs,as amended.
(1) Includes petitions for which the petitioner failed to appear at the scheduled hearing.
(2) Information is for the 2010 tax year,since the Broward County VAB had not concluded all its hearings on petitions for the 2011 tax year
as of March 28,2014.
AllillMlia. *
FINDINGS AND RECOMMENDATIONS
AIL
Management Oversight
Finding No. 1: Independence in the Appeal Process
VABs are created in each county for the purpose of administering an appeal process for property owners that disagree
with their exemption status or their real or tangible personal property assessment. If a property-owner disagrees with
their assessment or exemption status,they can file a petition with their VAB or contest an assessment in circuit court
in the county where the property is located. In addition, at any time before or during their appeal, property owners
may request an informal meeting with the property appraiser. If the property appraiser agrees to revise the assessment
2
****PRELIMINARY AND TENTATIVE FINDINGS****
or persuades the property owner of its validity, the property owner can withdraw the petition. If the two parties do
not reach an agreement, the property owner can continue the VAB appeal or pursue legal remedies. Under current
law, whatever action the property owner may decide to pursue, the actions are conducted at the local level by local
officials (VAB, clerk of the circuit court, and property appraiser). The VAB is comprised of two board of county
commissioners,one school board member,and two citizens appointed by the board of county commissioners and the
school board. Property taxes in Florida make up approximately 50 percent of public education funding and 30
percent of local government revenues'.
To assist in the appeal process,the DOR is required by law2 to develop a uniform policies and procedures manual to
be used by VABs, special magistrates,and taxpayers in proceedings before VABs. While the policies and procedures
manual includes references to rules and laws,and other guidelines regarding VAB procedures and rights of taxpayers,
it does not include guidance regarding rules of conduct or ethical codes for VAB members or staff,VAB clerks,VAB
attorneys,or special magistrates. Such rules of conduct or ethical codes may be beneficial to promoting the integrity
of the appeal process. For example:
➢ In our review of the Hillsborough County VAB,we noted while listening to an audio recording of its July 21,
2011,meeting that the VAB chairperson,who also served as a county commissioner,addressed the VAB with
the following statement"What you need to look at is the end game because every review costs us money but
it affects the tax roll,we allow$35 million, millions of dollars to be taken off the tax rolls through additional
review, the whole VAB process amount and I think you have to kind of keep that in mind because as you
know and I know where you are educating children, and I'm trying to take care of needs in the county...."
This statement appeared to place an inappropriate emphasis on preserving property tax revenues rather than
promoting an appeal process that should be based on fairness and equality in the just valuation of property.
➢ Our review of the Broward County VAB indicated that information gathered on special magistrates who
historically recommended large property assessment reductions was used by the VAB when considering
continuing the special magistrate's service in the subsequent year(see further discussion in finding No.4).
Considering the example statement made by a VAB chairperson and the special magistrate rehiring practices, the
instance of apparent bias and undue influence discussed in finding No.2,and local officials'involvement in the appeal
process, property assessment appeals at the local level could be strengthened by establishing rules of conduct or
ethical codes.
Our review of the appeal process in 14 states disclosed that 6 of the 14 states provide various appeal processes that
allow property owners and property assessors or tax assessors to challenge their assessments beyond the local level.
While all 14 states had some form of an initial county level appeal process, in the event the property owner did not
prevail at the county level,6 of the 14 states provided for state-level review of the appeals with a state agency such as a
tax commission,board of tax appeals,or department of revenue.
Our review of the composition of the VAB (or equivalent) for the same 14 states disdosed that for 7 of the 14 states,
the VAB (or equivalent)was composed of individuals that were not local government officials.
In several findings in this report,we noted inconsistencies in the manner in which VAB proceedings were conducted
and in the results of such proceedings, and have made recommendations to improve consistency. Additionally, we
noted circumstances that could inhibit a perception of fairness and equity in the process, and have made
recommendations to improve that perception. An appeal process at the State or regional level could enhance
consistency in proceedings. In addition, such an appeal process or composition of the VAB by individuals that are
DOR—Lfonwadion for Taxpay,r
2 Section 194.011(5)(b),Florida Statutes
3
****PRELIMINARY AND TENTATIVE FINDINGS****
not county government or school board officials coyld enhance fairness and objectivity in the process. However, it
would be prudent to consider the other recommendations in this report,addressing the inconsistencies and improving
the perception of fairness, and the extent they are subsequently adopted, prior to evaluating the form and extent of
.any appellate process or the composition of the VAB.
Recommendation: The Legislature should consider requiring that rules of conduct or ethical codes,with
appropriate sanctions, be established for VAB members and staff, VAB clerks, VAB attorneys, and special
magistrates. In addition,the Legislature could consider the creation of an appeal process at the regional or
State level, or requiring that the VAB be composed of individuals that are not county government or school
board officials. In doing so, the Legislature should consider the other recommendations in this report and
the extent to which those recommendations are adopted by the Legislature,the DOR, and the VABs.
Finding No.2: Appearance of Bias and Undue Influence
To assure that all participants in the VAB process receive fair treatment,it is critical that the process be conducted in a
manner free of the appearance of bias,undue influence, or conflicts of interest. DOR Rule 12D-9.017(1)(a), Florida
Administrative Code (FAC), provides that no participant, including the petitioner, property appraiser, VAB clerk,
special magistrate, VAB member, or other person directly or indirectly interested in the proceeding, nor anyone
authorized to act on behalf of any party must communicate with a VAB member or the special magistrate regarding
the issues in the case without the other party being present or without providing a copy of any written communication
to the other party. Additionally, DOR Rule 12D-9.017(3), FAC, states that ex parte communication must not be
considered by the VAB or the special magistrate unless all parties have been notified about the ex parte
communication, no party objects, and all parties have an opportunity during the hearing to cross-examine, object, or
otherwise address the communication.
Our review of a video recording from a Suwannee County VAB meeting disclosed that the property appraiser and the
property appraiser's attorney were present after the hearing for the VAB's discussion of the final decision on a
petition, and during the final discussion the property appraiser's attorney spoke with the VAB regarding the
consideration of the costs of sale in deriving just valuation of the subject property. Contrary to DOR Rule 12D-
9.017(3), FAC, such discussion was held without the petitioner being present. Allowing one of the parties to discuss
with the VAB issues affecting the petition while the other party is not present may give the appearance of bias or
undue influence.
Recommendation: The VABs should ensure all participants in the appeal process receive fair and equitable
treatment regarding ex parte communication consistent with DOR rules.
Special Magistrates in the Appeal Process
Pursuant to Section 194.035(1), Florida Statutes, in counties with populations of more than 75,000 (or 36 counties
using 2012 population estimates3), the VAB appoints special magistrates for the purpose of taking testimony and
making recommendations to the VAB,which may act upon such recommendations without a further hearing. These
special magistrates may not be elected or appointed officials or employees of the county and are selected from a list of
qualified individuals willing to serve as special magistrates. Also, the DOR provides a list of qualified special
3 Source: University of Florida,Bureau of Economic and Business Research
4
****PRELIMINARY AND TENTATIVE FINDINGS****
magistrates to counties with populations of 75,000 or less, although these counties are not required to use the list to
select special magistrates. Subject to State appropriation, the DOR is authorized to reimburse counties with a
population of 75,000 or less for payments made to special magistrates appointed for the purpose of taking testimony
and making recommendations to the VAB.
Finding No.3: Special Magistrates'Dual Office Holding Prohibition
Article II,Section 5(a) of the State Constitution provides in part that no person may hold at the same time more than
one office under the government of the State and the counties and municipalities therein, except that a notary public
or military officer may hold another office, and any officer may be a member of a constitution revision commission,
taxation and budget reform commission, constitutional convention, or statutory body having only advisory powers.
The Attorney General has opined, in opinion Nos. 2005-29 and 2012-17, that service as a special magistrate for a
VAB constitutes an office within the scope of Article II,Section 5(a)of the State Constitution.
Our review of the 12 VABs included in our review that appointed special magistrates disclosed that 37 special
magistrates in 11 VABs (all except Leon County VAB) served in multiple counties for the 2011 tax year,contrary to
the constitutional dual office holding prohibition. We noted that 24 special magistrates served on 2 VABs,9 special
magistrates served on 3 VABs, and 4 special magistrates served on 4 VABs. In response to our inquiries, the VABs
generally indicated that they do not believe the dual office holding prohibition applies to special magistrates. One
VAB referred to an opinion issued to a VAB by DOR's Chief Assistant General Counsel that a special magistrate in
one county would not violate the dual office holding provision by serving another county VAB in the same capacity.
Recommendation: The Legislature should consider revising Section 194.035, Florida Statutes, to clarify
whether special magistrates may serve on multiple VABs.
Finding No.4: Verification of Special Magistrates' Experience and Qualifications
In addition to the required professional certifications and years of relevant work experience for special magistrates
provided for in Section 194.035(1),Florida Statutes, and DOR Rule 12D-9.010(4),FAC,a special magistrate must not
be an elected or appointed official or employee of a taxing jurisdiction or of the State. Most VABs we reviewed
obtained the needed information on potential special magistrates by means of a special magistrate application or
resume. The VABs are required by law and DOR rules to verify a special magistrate's qualifications before appointing
the special magistrate, and the selection of a special magistrate must be based solely on the experience and
qualifications of such special magistrate.
Our review of the VABs verification of special magistrates'experience and qualifications for the 12 VABs included in
our review that appointed special magistrates disclosed that improvement was needed in verifying the information
provided by the special magistrates and documenting the results of such verification. For example,we noted that 7
VABs (Broward, Lee, Leon, Miami-Dade, Monroe, Orange, and Seminole Counties) either did not verify the special
magistrates' work experience or such verification was not evident in its records. Verification of work experience is
important to ensure that special magistrates have the appropriate level of experience in the areas of ad valorem
taxation, real property valuation, and tangible personal property valuation to fulfill their role with the VABs.
Additionally, we noted that the Lee County VAB did not verify of record possible conflicts of employment or
inappropriate representations for returning special magistrates since verifications had been previously performed.
However, verification of conflicting employment and representations is needed annually for returning special
5
****PRELIMINARY AND TENTATIVE FINDINGS****
magistrates because changes may have occurred since the previous verifications that could affect the special
magistrate's qualifications.
We noted in our review of the Broward County VAB that a complaint letter dated October 8,2012,was filed with the
DOR by a former special magistrate regarding the special magistrate appointment process at the Broward County
VAB and the use of special magistrate reduction tracking reports. These reports identified and tracked, by special
magistrate, those special magistrates who recommended property assessment reductions that either exceeded 50
percent of the original property assessment or exceeded $200,000. An analysis of the tracking reports by the
complainant showed that, with the exception of one special magistrate, the special magistrates with the six highest
assessment reductions were not initially reappointed from the 2010 tax year to serve in the 2011 tax year.
DOR forwarded the complaint letter to the Broward County VAB and requested the Broward County VAB legal
counsel to respond and copy the DOR with the response. The Broward County VAB legal counsel's response
maintained that the VAB's appointment of special magistrates was in compliance with the law,but did not address the
issues of transparency and influence on the special magistrates. Subsequently, the Broward County VAB agreed to
discontinue its practice of reviewing the information regarding petitions in which the petitioner's property valuation
had been reduced by either 50 percent or exceeded $200,000. When a special magistrates' history of reductions to
property assessments is given consideration when rehiring a special magistrate,rather than relying only on the factors
prescribed by law,there may be the appearance that bias entered into the selection process.
While the law and DOR rules require the selection of a special magistrate be based only on the experience and
qualifications of such special magistrates, the selection process may be enhanced if consideration was also given to
specific work performance factors of special magistrates.
Recommendation: The VABs should ensure that only the factors prescribed by law are considered in
selecting special magistrates,that information provided by special magistrates is verified each tax year, and
such verification is documented. Additionally, the Legislature should consider revising Section 194.035,
Florida Statutes, to provide for consideration of specific prior work performance factors when selecting
special magistrates.
Finding No. 5: Special Magistrate Training
Section 194.035(3), Florida Statutes, and DOR Rule 12D-9.012, FAC, requires the DOR to conduct training for
special magistrates;at least once each State fiscal year. Such training,which is Web based, is the official training for
special magistrates regarding the administrative review process,and must be completed before the special magistrates
conduct hearings. Each special magistrate, depending on the number of years of experience, is required to provide
the VAB's clerk either a statement acknowledging receipt of the training or a copy of the certificate of completion of
the training and examinations.
Our review of special magistrate training documentation for the 15 VABs included in our review disclosed that the
training was generally documented and received in a timely manner except for the Broward County VAB. We noted
that three special magistrates were appointed by the Broward County VAB that had not completed the special
magistrate training prior to conducting hearings. The special magistrates were appointed contingent on them
completing the DOR special magistrate training;however,the Broward County VAB had not verified that the training
was completed subsequent to the appointments and prior to the special magistrates conducting hearings. Special
a Such training is required for VAB members or the VAB legal counsel in counties that do not use special magistrates.
6
****PRELIMINARY AND TENTATIVE FINDINGS****
magistrate training developed by the DOR is intended to provide guidance for those conducting administrative
hearings and to promote consistency among the special magistrates and the VABs. Absent such training, the special
magistrates may be conducting hearings in a manner inconsistent with law and DOR rules.
We also noted that certain special magistrates sent an e-mail to the DOR requesting a statement acknowledging that
the special magistrates had received the required training, and that the DOR provided such statements without
requiring the special magistrates to provide proof of having reviewed or completed the training material (i.e., DOR
provided such statements based on the honor system). Notwithstanding the veracity of the special magistrates'
statements regarding training,without proof of review and comprehension of the training, there is an increased risk
that a VAB may appoint a special magistrate that has not received the required training.
Recommendation: The VABs should ensure that special magistrates receive appropriate training in a
timely manner and that training is evident in its records. Also,the DOR should verify that training has been
received by special magistrates prior to issuing statements acknowledging receipt of training.
VAB Administrative Hearings
Finding No. 6: VAB Prehearing Verification of Compliance with Legal Requirements
Section 194.034(1)(a), Florida Statutes, provides that hearings must be conducted in the manner prescribed by DOR
rules. DOR Rule 12D-9.014, FAC, provides that the VAB clerk must not allow the holding of scheduled hearings
until the VAB legal counsel has verified that all requirements in Chapter 194,Florida Statutes,and DOR rules are met
as follows:
➢ The composition of the VAB is as provided by law;
➢ VAB legal counsel has been appointed as provided by law;
➢ VAB legal counsel meets the requirements of Section 194.015,Florida Statutes,which provides that the VAB
must appoint private counsel who has practiced law for over five years and who will receive such.
compensation as may be established by the VAB. The private counsel may not represent the property
appraiser, the tax collector, any taxing authority, or any property owner in any administrative or judicial
review of property taxes;
➢ While members of the VAB, no VAB members represent other governmental entities or taxpayers in any
administrative or judicial review of property taxes, and citizen members are not members or employees of a
taxing authority;
➢ In a county that does not use special magistrates, either all VAB members have received the DOR's training
or VAB legal counsel has received the DOR's training;
➢ The organizational meeting, as well as any other VAB meetings,will be or were noticed in accordance with
Section 286.011, Florida Statutes, and will be or were held in accordance with law (see further discussion in
fmding Nos. 7 and 11);
➢ The DOR's uniform VAB procedures were made available at the organizational meeting and copies were
provided to special magistrates and VAB members;
➢ The DOR's uniform policies and procedures manual is available on the VAB clerk's Web site if the VAB
clerk has a Web site;
➢ The qualifications of special magistrates were verified, including that special magistrates received the DOR's
training and that special magistrates with less than five years of required experience successfully completed
7
****PRELIMINARY AND TENTATIVE FINDINGS****
the DOR's training,including any updated modules and an examination,and were certified as having received
such training;
> The selection of special magistrates was based solely on proper experience and qualifications and neither the
property appraiser nor any petitioners influenced the selection of special magistrates5.
➢ All procedures and forms of the VAB or special magistrate are in compliance with Chapter 194, Florida
Statutes,and DOR Rule 12D-9,FAC;
➢ The VAB is otherwise in compliance with Chapter 194,Florida Statutes,and DOR Rule 12D-9,FAC;and
➢ Notice has been given to the chief executive officer of each municipality as provided in Section 193.116,
Florida Statutes.
The VAB clerk must notify the VAB legal counsel and the VAB chair of any action needed to comply with the above
requirements.
Given the vast responsibility assigned to the VAB clerk and legal counsel prior to holding hearings,it is important that
the verification process be documented in the VAB's records. We noted that some VABs documented the
verification process by completing a formalized, written prehearing checklist, while other VABs used a less formal
approach. Our review of documentation evidencing the verification process for the 15 VABs included in our review
disclosed that 11 VABs (Gilchrist, Hillsborough, Lee, Martin, Miami-Dade, Monroe, Orange, Palm Beach, Pasco,
Seminole, and Washington Counties) did not document the results of the verification. In most cases, the VAB clerk
stated that the information was verified with VAB legal counsel, either verbally or through e-mails, but no
documentation of the verification was maintained in the records. Leon County VAB completed a prehearing checklist
with appropriate signatures and dates,but the VAB legal counsel dated the checklist subsequent to holding hearings.
Absent documented verification of compliance with Florida Statutes and DOR rules as prescribed by DOR Rule
12D-9.014, FAC, prior to holding hearings, there is an increased risk that appeals may not be held in a fair and
equitable manner.
Recommendation: The VAB clerks should ensure that verification of compliance with Florida Statutes and
DOR rules as prescribed by DOR Rule 12D-9.014,FAC,is documented.
Finding No. 7: VAB Organizational Meeting
DOR Rule 12D-9.013,FAC,provides that the VAB must annually hold.one or more organizational meetings,at least
one of which must meet certain prescribed requirements,including the following:
> Introduce the VAB members and provide contact information;
➢ Introduce the VAB clerk or any designee of the VAB clerk and provide the VAB clerk's contact information;
➢ Appoint or ratify the VAB legal counsel. At the meeting at which VAB legal counsel is appointed, this item
must be the first order of business;
> Make available to the public, special magistrates, and VAB members certain DOR rules and the associated
forms that have been adopted by DOR and the requirements of Florida's Government in the Sunshine/open
government laws including information on where to obtain the current Government-In-The-Sunshine
manual;
5 This provision does not prohibit the V-1B from considering any written complaint filed with respect to a special magistrate by
any party or citizen.
8 •
****PRELIMINARY AND TENTATIVE FINDINGS****
> Discuss general information on Florida's property tax system, respective roles within this system, taxpayer
opportunities to participate in the system,and property taxpayer rights;
D. For purposes of this rule, making available to the public means,in addition to having copies at the meeting,
the VAB may refer to a Web site containing copies of such documents;and
➢ The VAB must announce the tentative hearing schedule for the VAB, taking into consideration the number
of petitions filed, the possibility of the need to reschedule, and the requirement that the VAB stay in session
until all petitions have been heard.
Our review of the organizational meeting requirements at the 15 VABs included in our review disclosed the following.
> Gilchrist and Martin County VABs did not provide contact information for the VAB members or clerk.
> Hillsborough County VAB did not appoint legal counsel as the first order of business,and the Monroe VAB
did not appoint or ratify legal counsel at its meeting. —a,J- I x L' etIoO U,1 `1 t1 I'. -
➢ Monroe County VAB did not have copies of applicable DOR rules and the associated forms available at the
meeting. W C-f 1 X C L 'MAC`pctrli tU l tt rn e -tvtdt t I►t(CG. fi' Lt.., 1v1 t ft oi) v►i t
➢ Lee,Pinellas, and Seminole County VABs did not have a general discussion on Florida's property tax system,
taxpayer's rights,or opportunities to participate in the property tax system.
> Monroe and Seminole County VABs did not announce an adequate tentative schedule for its hearings.
�whevt Q.vt& wl� i ave e use cu, O1-ea tt eta tubs ?
Ensuring that prescribed organizational meeting requirements are followed and documented serves to promote
fairness and equity in the process.
Recommendation: The VABs should ensure that organizational meetings are conducted in accordance
with applicable DOR rules, that all requirements are adequately satisfied, and that the meeting minutes
reflect all discussions.
Finding No. 8: VAB Hearing Commencement
DOR Rule 12D-9.024, FAC, prescribes the procedures to be followed foi commencement of \ .\B hearings,
including:
➢ Before or at the start of the hearing,the VAB,the VAB's designee,or the special magistrate must give a short
overview verbally or in writing of the rules of procedure and any administrative issues necessary to conduct
the hearing.
> Before or at the start of the hearing, unless waived by the parties, the VAB or special magistrate must make
an opening statement or provide a brochure or taxpayer information sheet that states:
• The VAB or special magistrate is an independent, impartial, and unbiased hearing body or officer, as
applicable;
• The VAB or special magistrate does not work for the property appraiser or tax collector,is independent
of the property appraiser and tax collector, and is not influenced by the property appraiser or tax
collector;
• The hearing will be conducted in an orderly,fair,and unbiased manner;
• The law does not allow the VAB or special magistrate to review any evidence unless it is presented on the
record at the hearing or presented upon agreement of the parties while the record is open;and
• The law requires the VAB or special magistrate to evaluate the relevance and credibility of the evidence in
deciding the results of the petition.
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****PRELIMINARY AND TENTATIVE FINDINGS****
➢ The VAB or special magistrate shall ask the parties if they have any questions regarding the verbal or written
overview of the procedures for the hearing.
Our review of the hearing commencement requirements for 114 petitions for the 15 VABs included in our review
disclosed the following:
➢ Three VABs did not provide an overview of the rules of procedure for 7 petitions (Broward-2,Pinellas-1,and
Suwannee-4 Counties).
➢ Three VABs did not make an opening statement or provide a brochure or taxpayer information sheet
containing prescribed information for 8 petitions (Broward-2,Gilchrist-2,and Suwannee-4 Counties).
➢ Four VABs did not ask the parties if they had any questions regarding the verbal or written overview of the
procedures for the hearing for 8 petitions (Broward-1,Gilchrist-2,Pinellas-1,and Suwannee-4 Counties).
Ensuring that prescribed hearing commencement procedures are followed and documented serves to promote
fairness and equity in the process.
Recommendation: The VABs should ensure that all hearings are conducted in accordance with DOR Rule
12D-9.024,FAC.
Finding No. 9: Presumption of Correctness of Property Appraisers' Assessments
Section 194.301(1), Florida Statutes, provides that in any administrative or judicial action in which a taxpayer
challenges an ad valorem tax assessment of value, the property appraiser's assessment is presumed correct if the
property appraiser proves by a preponderance of the evidence that the assessment was arrived at by taking into
consideration the factors prescribed in Section 193.011, Florida Statutes; any other applicable statutory requirement
relating to classified use values or assessment caps; and professionally accepted appraisal practices, including mass
appraisal standards,if appropriate. Additionally,DOR Rule 12D-9.024(7),FAC,provides that the property appraiser
must indicate for the record his or her determination of just value, classified use value, tax exemption, property
classification,"portability"assessment difference,deferral,or penalties. In a hearing on just,classified use,or assessed
value, the first issue to be considered is whether the property appraiser establishes a presumption of correctness for
the assessment. The property appraiser must present evidence on this issue first.
Our review of 11.4 petition hearings for the 15 VABs included in our review disclosed that for 4 VABs (Lee,Martin,
Palm Beach, and Washington Counties), the records did not evidence that the property appraiser's presumption of
correctness issue was considered for 2, 7, 4, and 2 petitions, respectively. Additionally, for the 4 petitions heard in
Suwannee County, the presumption of correctness issue was not the first issue considered,contrary to DOR rules,as
the petitioner spoke first.
Failure to consider the property appraiser's presumption of correctness issue, and to present issues in the required
order in the appeal process,does not serve to promote fairness and equity in the process.
Recommendation: The VABs should ensure that the presumption of correctness of property appraisers'
assessments is the first issue considered in hearings in accordance with DOR Rule 12D-9.024(7),FAC.
I()
•
****PRELIMINARY AND TENTATIVE FINDINGS****
Finding No. 10: VAB Written Decisions
Section 194.034(2), Florida Statutes, provides that in each case, unless the petition is withdrawn by the petitioner or
the petition is acknowledged as correct by the property appraiser, the VAB must render a written decision. The
VAB's decision must contain findings of fact and conclusions of law, and must include reasons for upholding or
overturning the determination of the property appraiser. Also, DOR Rule 12D-9.032(1)(a), FAC, provides that each
final decision must contain sufficient factual and legal information and reasoning to enable the parties to understand •
the basis for the decision,and must otherwise meet the requirements of law. The VAB may fulfill the requirement to
produce a written final decision by adopting a recommended decision of the special magistrate containing the required
elements and providing notice that it has done so. DOR Rule 12D-9.032(2), FAC, also requires that a VAB's final
decision must state the just,assessed,taxable,and exempt value for the county both before and after VAB action.
Our review of 114 petitions for the 15 VABs included in our review disclosed that for 7 VABs, from 14 to 100
percent of the petitions reviewed at the VAB contained decisions with insufficient information,as noted in Table 2.
Table 2
County VAB Number of Number of Decisions Percent of Decisions
Petitions With With
Reviewed Insufficient Insufficient
Information Information
()NA dal () 4 67
Leon 10 30
Miami-Dade 8 ti 100
Palm Beach 1t) 3 30
Pasco 7 1 14
Seminole 8 3 38
Suwannee 4 1 '
For example, two final decisions for the Leon County VAB included statements such as "I believe the property
appraiser's approach to value to be more reflective of the current market"and"I find that credible evidence presented
by the property appraiser supports the just value as determined by the market"without providing facts and or analysis
to support the statements. For the Miami-Dade County VAB,we noted eight decisions in which the Findings of Fact
section lacked specific information with regard to the individual property,and the Conclusions of Law section did not
provide reasons as to how the assessed value was derived and its relation to market value. Additionally, for Seminole
County VAB,we noted three final decisions that did not contain the values before and after VAB actions,contrary to
DOR rules.
Failure to include sufficient information in written decisions does not provide an adequate basis for decisions and
does not promote fairness and equity in the appeal process.
11
•
****PRELIMINARY AND TENTATIVE FINDINGS****
Recommendation: The VABs should ensure that written decisions sufficiently document the findings of
fact, conclusions of law, and reasoning for upholding or overturning the determination of the property
appraiser as required by Section 194.034(2),Florida Statutes,and DOR Rule 12D-9.032,FAC.
Administrative Matters
Finding No. 11: Public Notice of VAB Organizational Meetings and Hearings
Organizational Meetings. DOR Rule 12D-9.013(1), FAC,provides that the VAB must annually hold one or more
organizational meetings prior to holding VAB hearings. The VAB must provide reasonable notice of each
organizational meeting and such notice must include the date,time,location,purpose of the meeting,and information
required by Section 286.0105,Florida Statutes. Section 286.0105,Florida Statutes,provides that the notice must state
that, if a person decides to appeal any decision made by the VAB with respect to any matter considered at such
meeting or hearing,he or she will need a record of the proceedings,and that,for such purpose,he or she may need to
ensure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon
which the appeal is to be based.
Our review of the organizational meeting notices for the 15 VABs included in our review disclosed that 7 VABs
(Broward, Leon, Monroe, Pasco, Pinellas, Seminole, and Washington Counties) did not include in the notices the
required disclosure relating to a verbatim record of the proceedings for an appeal. Although the disclosure
information was posted elsewhere for Leon and Pinellas County VABs, it was not included in the organizational
meeting notice as required by DOR rules. Omitting the required disclosure in the organizational meeting notice "1
prevents the taxpayer from being aware of the availability of such record,which may be needed if an appeal is filed. A lr
VAB Hearings. DOR Rule 12D-9.007(8), FAC, provides that the VAB clerk must ensure public notice of, and 0
access to, all hearings. Such notice must contain a general description of the locations, dates, and times hearings are
scheduled. This notice requirement may be satisfied by making such notice available on the VAB clerk's Web site.
Our review of the public notice of hearings for the 15 VABs included in our review disclosed that 3 VABs (Broward,
Miami-Dade, and Martin Counties) did not notice the public of hearings, and Lee County VAB's notice did not
include a general description of the locations and times. Although there was no public notice, Martin County VAB
staff stated that the information was available to the public upon request. However, without proper notice of
hearings, the public may not be aware of when hearings are scheduled or where the hearings will take place in case
they choose to attend.
Recommendation: The VABs should ensure that the public is properly noticed of its organizational
meetings and hearings,and that the notices include all information prescribed by DOR rules.
Finding No. 12: Allocation of VAB Petition Fees and Expenses
Section 194.013(1), Florida Statutes, provides that if required by VAB resolution, a petition filed with the VAB must
be accompanied by a filing fee to be paid to the VAB clerk in an amount determined by the VAB not to exceed$15
for each separate parcel of property, real or personal, covered by the petition and subject to appeal. Pursuant to
Section 194.013(4),Florida Statutes, all filing fees collected by the VAB clerk must be allocated and utilized to defray,
to the extent possible, the costs incurred in connection with the administration and operation of the VAB.
12
' '.
****PRELIMINARY AND TENTATIVE FINDINGS****
Additionally, Section 194.015, Florida Statutes, provides that two-fifths of the VAB expenses are to be borne by the
school board and three-fifths by the board of county commissioners.
Our review of petition filing fees collected and VAB expenses allocated for the 15 VABs included in our review ,�(��'�
disclosed that,contrary to law,6 VABs (Gilchrist,Martin,Monroe,Pinellas,Seminole,and Washington Counties) did CV ii
not reduce the VAB expenses billed to the boards of county commissioners and school boards by the amount of filing ' _2
fees collected. As a result, the filing fees were not used to defray the VAB expenses contrary to Section 194.013(4), /
Florida Statutes. The filing fees collected at the 6 VABs for the 2011 tax year were reported to be $570, $8,705,
$10,191, $25,115,$7,636,and$1,500,respectively. Staff at the 6 VABs stated that they were unaware of the provision
in law regarding defraying VAB expenses with petition filing fees.
Recommendation: The VABs should ensure that amounts billed to boards of county commissioners and
school boards are reduced by the amount of petition filing fees collected. Also, each of the 6 VABS cited in
the finding should refund to its respective board of county commissioners and school boards any excess
VAB expenses charged as a result of not defraying such expenses with petition filing fees.
Finding No. 13: VAB Citizen Members
Section 194.015, Florida Statutes, and DOR Rule 12D-9.004, FAC, provide that every county must have a VAB that
consists of, among other members, two citizens. One of the citizen members must own homestead property in the
county appointed by the county commission,and one citizen member must own a business that occupies commercial
space located within the school district appointed by the school board of the county. Additionally, citizen members
must not be members or employees of any taxing authority in the State or a person who represents property owners,
property appraisers, tax collectors, or taxing authorities in any administrative or judicial review of property taxes.
Also, DOR Rule 12D-9.014(1)(d), FAC, provides that the VAB clerk must not allow the holding of scheduled
hearings until the VAB legal counsel has verified that citizen members are not members or employees of a taxing
authority during their membership on the VAB. Some VABs obtained the needed information on citizen members
through a special application or resume,while other VABs obtained the information orally from the citizen member.
Our review of whether citizen members serving at the 15 VABs included in our review met the requirements specified
in law and DOR rules disclosed the following
➢ For 6 VABs (Lee, Leon, Miami-Dade, Palm Beach, Seminole, and Washington Counties), VAB records did
not evidence that citizen members met the specific requirements. VAB records did not evidence that
information contained in either written applications or oral statements made by the citizen members had been
verified.
➢ For the Lee and Leon County VABs, the citizen member appointed by the school board did not own a
business that occupied commercial space within the school district. For the Lee County VAB, the citizen
member's wife was the owner of the business identified, which was located at their residence and not in
occupied commercial space.
Documenting the verification of citizen member qualifications is important to ensure that only eligible individuals
serve on the VABs as citizen members.
Recommendation: The VABs should ensure that citizen members meet the specific requirements in law
and DOR rules to serve on the VABs,and that verification of such requirements is documented.
13
****PRELIMINARY AND TENTATIVE FINDINGS****
Finding No. 14: Taxpayer Representation
• For the purpose of requesting a hearing before the VAB, a taxpayer must file a standardized petition form with the
VAB clerk. Pursuant to DOR Rule 12D-9.015(2)(f), FAC, petition forms must contain a signature field to be signed
by the taxpayer,or if the taxpayer is.a legal entity, the employee of a legal entity with authority to file such petitions.
The petition forms must also contain a signature field to be signed by an authorized agent,in case one is used. If the
authorized agent is subject to licensure, a space is required on the petition form to provide identification of the
licensing body and license number. If the authorized agent is not subject to licensure (for example a family member),
a space is required to indicate the petition is accompanied by a written authorization of the taxpayer if not otherwise
signed by the taxpayer. Additionally, DOR Rule 12D-9.018(4), FAC, provides that a petition filed by an unlicensed
agent must also be signed by the taxpayer or accompanied by a written authorization from the taxpayer.
Our review of 114 petitions at the 15 VABs included in our review disclosed that 4 VABs (Broward,Leon,Pasco,and
Suwannee Counties) accepted at least one petition filed by agents that did not include a license number,the taxpayer's
signature, or written authorization from the taxpayer, contrary to DOR rules. We noted for the Leon County VAB
that there were two petitions filed with missing information. Consequently, the VABs did not, in these instances,
demonstrate that the individuals acting as an agent for the petitioner had the proper authorization to do so on the
•
petitioner's behalf.
Recommendation: The VABs should ensure that petitions filed with the VABs contain the appropriate
information,signatures,and authorizations required by DOR rules.
END OF P&T DOCI N1EN'I'
14