RICHARD W. & JUDITH HONERKAMP,	)
	)
Complainants,	)
	)
v.	)		Appeal Number 02-10126
	)
PHILIP A. MUEHLHEAUSLER,	)
ACTING ASSESSOR,	)
ST. LOUIS COUNTY, MISSOURI,	)
	)
Respondent.	)

HOLDING

Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor, SET ASIDE, Hearing Officer finds true value in money for the subject property for tax year 2002 to be $284,300, assessed value of $54,020.

Complainant, Richard W. Honerkamp, appeared pro se.

Respondent appeared by Counsel, Paula J. Lemerman, Associate County Counselor.

Case heard and decided by Chief Hearing Officer, W. B. Tichenor.

ISSUES

The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2002, and whether there was an intention plan of discrimination by the Assessor in the valuation of the subject property.

SUMMARY

Complainant appeals the decision of the St. Louis County Board of Equalization which sustained the valuation of the subject property. The Assessor determined an appraised value of $286,270 (assessed value of $54,400, as residential property). Complainant proposed a value of $250,000 (assessed value of $47,500). Respondent proposed a value of $284,300 (assessed value of $54,020). A hearing was conducted on May 22, 2003, at the St. Louis County Government Center, Clayton, Missouri.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

Complainant's Evidence

Complainant testified in his own behalf. He offered into evidence Exhibit A, which consisted of eight sections of data and calculations to support his method of valuation. Complainant's testimony and evidence was not directed toward establishing the fair market value of the subject property, but simply a value which he felt the property should be assessed at to be equal with certain other properties.

A part of Exhibit A was a tape recording (Exhibit A-9) of a phone message from Associate County Counselor, Paula Lemerman, which was played on the record, but was not included in the transcript by the transcriptionist. The tape was not provided to the Hearing Officer at the close of the evidentiary hearing. The substance of the tape was irrelevant as to the issue of the fair market value of the subject property and also to the allegation of discrimination made by Complainant.

Respondent's Evidence

Respondent placed into evidence the testimony of Mr. David L. Winkler, appraiser for St. Louis County. The appraiser testified as to his appraisal of the subject property. The Appraisal Report, Exhibit 1, of Mr. Winkler was received into evidence. Mr. Winkler arrived at an opinion of value for the subject property of $284,300 based upon a sales comparison approach to value. In performing his sales comparison analysis, the appraiser relied upon the sales of three properties which he deemed to be comparable to the subject property.

FINDINGS OF FACT

1. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.

2. The subject property is located at 1629 Ridge Bend Drive, Wildwood, Missouri. It is identified by locator number 22V440261. The property consists of a .41 of an acre lot, improved by a two-story, masonry and frame single-family structure of average quality construction. It was built in 1993 and appears to be in good condition. The residence has a total of eight rooms, which includes four bedrooms, two and one half baths and contains 2,880 square feet of living area. There is a full basement, which has no finished living area or recreation area. The house has an attached, three-car garage. The home was purchased by Complainants on or about October 1, 1997, for $260,000. Exhibit 1, pp. 5 & 9.

3. There was no evidence of new construction and improvement from January 1, 2001, to January 1, 2002.

4. Complainant's evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2002, under the economic conditions existing on January 1, 2001, to be $250,000, as proposed.

5. Complainant's evidence was not substantial and persuasive to establish an intentional plan of discrimination by the Assessor that a statistically significant number of residential properties in St. Louis County are assessed at a ratio that is grossly below the assessment ratio applied to the subject property.

6. The properties relied upon by Respondent's appraiser in performing his appraisal were comparable to the subject property for the purpose of making a determination of value of the subject property. The properties were located within one block of the subject. Each sale property sold at a time relevant to the tax date of January 1, 2001. The sale properties were similar to the subject in relevant factors such as location, style, quality of construction, age, condition, room count, living area, site size, other amenities and relevant characteristics.

7. The comparables were described as follows (Exhibit 1, pp. 6-7):

Comparable 1 (18131 Sunny Top - 1 block North of the subject) sold in May, 2000 for $295,000. This property consists of a .35 of an acre lot improved by a two-story, masonry and frame single-family structure of average quality construction. The house was built in 1994 and appears to be in very good condition. The residence has a total of nine rooms, which includes four bedrooms, two full and one half baths, and contains 2,739 square feet of living area. There is a full basement, which has no finished area. The house has an attached three-car garage.

Comparable 2 (18172 Bent Ridge Drive - 1 block South of the subject) sold in June, 2000 for $287,000. This property consists of a .46 of an acre lot improved by a two-story, masonry and frame single-family structure of average quality construction. The house was built in 1992 and appears to be in good condition. The residence has a total of nine rooms, which includes four bedrooms, two full and one half baths, and contains 2,813 square feet of living area. There is a full basement, which has no finished area. The house has an attached three-car garage.

Comparable 3 (1625 Ridge Bend Drive - next door to the subject) sold in October, 1999 for $270,000. This property consists of a .35 of an acre lot improved by a two-story, masonry and frame single-family structure of average quality construction. The house was built in 1993 and appears to be in good condition. The residence has a total of nine rooms, which includes four bedrooms, two full and one half baths, and contains 2,624 square feet of living area. There is a full basement, which has 600 square feet of recreation area. The house has an attached three car garage.

8. The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable. The adjustments were appropriate to account for the minimal differences between the subject and each of the comparables. The adjustments were within generally accepted standards and ranges for an appraisal of a property of the subject's and comparables' type.

9. The net adjustments for Comparable 1 amounted to -$8,100 or -2.75% of the sales price. The net adjustments for Comparable 2 amounted to +$4,000 or +1.39% of the sales price. The net adjustments for Comparable 3 amounted to +$4,900 or +1.81% of the sales price.

10. The adjusted sales prices for the comparables calculated to $286,900, $291,000 and $274,900, respectively. The appraiser concluded on a $284,300 value which calculated to a value per square foot of $98.72 compared with the sales prices per square foot of living area for the comparables of $107.70, $102.03 and $102.90.

11. Respondent did not, technically, have to meet a standard of clear, convincing and cogent evidence in this appeal, under the provisions of Section 137.115, RSMo, as he was not seeking to sustain the original valuation presumed to have been made by a computer, computer-assisted method or a computer program. However, given the fact that the valuation proffered by Respondent's expert was only $1,970 or .0069 less than the value determined by the computer assisted methodology, the clear and convincing standard is applied in arriving at value.

12. Respondent's evidence met the standard of clear and convincing to establish the value of the subject, as of January 1, 2002, under the economic conditions existing as of January 1, 2001, to be $284,300.

Jurisdiction

The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious. Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo. The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Section 138.431.4, RSMo.

Board of Equalization Presumption

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization. Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978); Chicago, Burlington & Quincy Railroad Co. v. STC, 436 S.W.2d 650, 656 (Mo. 1968); May Department Stores Co. v. STC, 308 S.W.2d 748, 759 (Mo. 1958).

No Presumption Assessor's Value Correct

There is no presumption that the assessor's valuation is correct. Section 138.431.3, RSMo.

Standard for Valuation

Section 137.115, RSMo 1994, requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so. St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo. App. E.D. 1993); Missouri Baptist Children's Home v. State Tax Commission, 867 S.W.2d 510, 512 (Mo. banc 1993). It is the fair market value of the subject property on the valuation date. Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978).

Market Value

Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.

Implicit in this definition is the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:

1. Buyer and seller are typically motivated.

2. Both parties are well informed and well advised, and each acting in what they consider their own best interests.

3. A reasonable time is allowed for exposure in the open market.

4. Payment is made in cash or its equivalent.

5. Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.

6. The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.

Real Estate Appraisal Terminology, Society of Real Estate Appraisers, Revised Edition, 1984; See also, Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers, 1982, pp. 4-5; Property Appraisal and Assessment Administration, International Association of Assessing Officers, 1990, pp. 79-80; Uniform Standards of Professional Appraisal Practice, Glossary; Exhibit 1, p.3.

Duty to Investigate

In order to investigate appeals filed with the Commission, the Hearing Officer has the duty to inquire of the owner of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, subclassification or assessment of the property. The Hearing Officer's decision regarding the assessment or valuation of the property may be based solely upon its inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties. Section 138.430.2, RSMo.

Weight to be Given Evidence

The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled. The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide. St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).

Trier of Fact

The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances. The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert's testimony and accept it in part or reject it in part. St. Louis County v. Boatmen's Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).

Opinion Testimony by Experts

If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto.

The facts or data upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinions or inferences upon the subject and must be otherwise reliable, the facts or data need not be admissible in evidence. Section 490.065, RSMo; Courtroom Handbook on Missouri Evidence, Wm. A. Schroeder, Sections 702-505, pp. 325-350; Wulfing v. Kansas City Southern Industries, Inc., 842 S.W.2d 133 (Mo. App. E.D. 1992).

Complainants' Burden of Proof

In order to prevail, Complainants must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2001. Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897. Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact. The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief. Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).

Respondent's Burden of Proof

The Respondent has imposed upon him by the provisions of Section 137.115.1, RSMo, the burden of proof to present clear, convincing and cogent evidence to sustain a valuation on residential property which is made by a computer, computer-assisted method or a computer program. There is a presumption in this appeal that the original valuation, which was sustained by the Board of Equalization, was made by a computer, computer-assisted method or a computer program. There was no evidence to rebut the presumption, therefore, in order to sustain the valuation of the subject property at $284,300, appraised value (or .0069% less than the computer assisted value of $286,270), Respondent's evidence must come within the guidelines established by the legislature and must clearly and convincingly persuade the Hearing Officer as to the value sought to be sustained.

The statutory guidelines for evidence to meet the standard of clear, convincing and cogent include the following:

(1) The findings of the assessor based on an appraisal of the property by generally accepted appraisal techniques; and

(2) The purchase prices from sales of at least three comparable properties and the address or location thereof. As used in this paragraph, the word comparable means that:

(a) Such sale was closed at a date relevant to the property valuation; and

(b) Such properties are not more than one mile from the site of the disputed property, except where no similar properties exist within one mile of the disputed property, the nearest comparable property shall be used. Such property shall be within five hundred square feet in size of the disputed property, and resemble the disputed property in age, floor plan, number of rooms, and other relevant characteristics.

Section 137.115.1(1) & (2).

Clear, cogent and convincing evidence is that evidence which clearly convinces the trier of fact of the affirmative proposition to be proved. It does not mean that there may not be contrary evidence. Grissum v. Reesman, 505 S.W.2d 81, 85, 86 (Mo. Div. 2, 1974). The quality of proof, to be clear and convincing must be more than a mere preponderance but does not require beyond a reasonable doubt. 30 AmJur2d. 345-346, Evidence section 1167. "For evidence to be clear and convincing, it must instantly tilt the scales in the affirmative when weighed against the evidence in opposition and the fact finder's mind is left with an abiding conviction that the evidence is true." Matter of O'Brien, 600 S.W.2d 695, 697 (Mo. App. 1980).

Owner's Opinion of Value

The owner of property is generally held competent to testify to its reasonable market value. Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970). The owner's opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation. Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).

Methods of Valuation

Missouri courts have approved the comparable sales or market approach, the cost approach (replacement or construction) and the income approach as recognized methods of arriving at fair market value. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987); and State ex rel. State Highway Comm'n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. Div. 2 1974).

Discrimination

In order to obtain a reduction in assessed value based upon discrimination, the Complainants must (1) prove the true value in money of their property on January 1, 2002, under the economic conditions existing as of January 1, 2001, Koplar v. State Tax Commission, 321 S.W.2d 686, 690 (Mo. 1959); and (2) show an intentional plan of discrimination by the assessing officials resulting in an assessment of that property at a greater percentage of value than other property, generally, within the same class within the same taxing jurisdiction. Koplar, supra, at 695.

Complainants must first establish the market value of their property in order to determine the percentage of true value at which it is being assessed. Next, they must establish the true value of the other properties generally which they claim are assessed at a lower percentage of true value. Evidence of value and assessments of a few properties does not prove discrimination. Substantial evidence must show that all other property in the same class, generally, is actually undervalued. State ex rel. Plantz v. State Tax Commission, 384 S.W.2d 565, 568 (Mo. 1964). Then they must compare the ratio of assessed value to true value for both their property and the comparable properties to establish that their property is being assessed at a higher percentage of value. This difference in ratios must be shown to be grossly excessive. Savage v. State Tax Commission of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986). No other methodology is sufficient to establish discrimination. Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696 (Mo. 1958).

Complainants' Theory of Value

Complainants elected to present a case based on calculating averages of various factors relating to sixteen other properties of the same model as the subject home. Mr. Honerkamp's compilation of documents provided an average for lot size (Exhibit A-2); an average of assessment per square foot of living area (Exhibit A-3); an average of original costs (Exhibit A-4); an average of improvement values (Exhibit A-5); an average of land values (Exhibit A-6); an average of comparables used by the County's computer mass appraisal system on two houses on the subject street (Exhibit A-7); and an average of sale price of the five comparables used by the County's computer mass appraisal system on the subject (Exhibit A-8). No matter which averaging method relied upon by Mr. Honerkamp none of them establish what the true value in money (fair market value) of the subject property was on January 1, 2002.

Fair Market Value

In point of fact, this record fails to provide the most fundamental and critically basic piece of evidence in an appeal before the Commission, the owner's opinion of the fair market value. This is the first issue of evidence which Complainants must address. See, Complainants' Burden of Proof, supra. In response to questions under cross-examination Complainant failed to give an opinion of the market value of the subject property. He admitted he did not have an opinion of value and did not have an opinion as to whether the value proposed by Respondent's expert was a correct or incorrect market value. Tr. 11, Lines 1-12. Not only is the requirement that a Complainant provide an opinion of market value required to establish an overvaluation, but it is also the first step in making a discrimination case (See, Discrimination, supra), which is what the Complainant was attempting to do in this appeal.

Averaging of various factors in pro se appeals before the Commission has been very popular with taxpayers over the years, however, it is totally ineffective, generally irrelevant and non-probative to establish the fair market value of any property. If Complainant's methodology were to be applied to his property and the sixteen other properties that he relies on in his analysis, then the valuation method to be utilized by the Assessor would be very simple. After the computer mass appraisal system has determined an appraised value for these seventeen properties, it would then just average the seventeen values and apply the average value thus achieved to all of the houses.

Taking Complainants' theory one step further, the Assessor would simply average all the computer generated market values for the homes in the subject subdivision and apply that average to each home. In order to apply the theory advanced by Complainants to the school district in which the subject property exists would be to simply average the mass appraised values for all single family homes in the district and apply that average to each home. In some people's minds that would be perfect equalization. Every single-family residential taxpayer in the Rockwood school would pay exactly the same amount in taxes, because all of the homes would be assessed at nineteen percent of the same appraised value, irrespective of what actual market values might be.

However, the statutory and constitutional mandate for the assessment of real property is to assess the property at the appropriate percentage of its value - true value in money - fair market value, not at some average value, which bears no rational basis to the fair market value for a given property. To follow the concept advocated by Complainants would mean that individual taxpayers could arbitrarily select a few limited properties and average the assessor appraised values and come up with a wide variety of values on their individual properties, none of which would bear any resemblance to what the fair market value actually would be. However, their claim would be exactly the same as Complainants that this treats their property equal with other properties.

Equality of assessments is best achieved when all properties are assessed at the statutory percentage of fair market value. Due to various factors, at any given time, it will always be possible to selected certain properties and by averaging demonstrate from a certain perspective that a given property is not the same value as a certain average. The legislature and the courts have not determined that such is the appropriate means by which to assess and equalize properties under the ad valorem tax system.

There is no statutory basis and no court decisions which provide for an averaging of assessor's appraised values, or assessed values, or any other type of averaging which a taxpayer might put forth. This is simply not a recognized or acceptable basis for arriving at fair market value. The inescapable conclusion is that Mr. Honerkamp's opinion of the value which should be placed on his home is not based upon proper elements or a proper foundation. Therefore, it has no probative value on the issue of fair market value.

When Complainants fail to offer evidence of fair market value, they appear to consent to the value presented by Respondent's prima facie case (qui tacet consentire videtur - a party who is silent appears to consent). In other words, Mr. Honerkamp's assertion that he is not seeking to prove fair market value is self-defeating. He is in effect consenting that the fair market value proposed by Respondent's expert is the fair market value. In point of fact, the Complaint for Review of Assessment filed by Complainants did not mark overvaluation as a ground for their appeal. The conclusion is that they did not deem their property to be valued above its fair market value. However, Complainants desire their property to be assessed based on something less than fair market value. Specifically, Mr. Honerkamp asserts that the Commission should arbitrarily and capriciously place a value on the subject property that is $34,300, or 12%, less than its fair market value, as established by the evidence in this record.

Complainant's failed to present a methodology for arriving at the fair market value of the subject property which is recognized and accepted by the Courts, the Commission or the appraisal profession, accordingly their claim to have the subject property valued at $250,000 based upon an improper methodology is without any probative value.

Complainants Fail to Prove Discrimination

Where there is a claim of discrimination based upon a lack of valuation consistency, Complainants have the burden to prove to prove essentially three elements. These elements are

1. The level of assessment for the subject property in 2001. This is done by independently determining the market value of the subject property and dividing the market value into the assessed value of the property as determined by the assessor's office.

2. The average level of assessment for residential property in St. Louis County in 2001. This is done by (a) independently determining the market value of a representative sample of residential properties in St. Louis County; (b) determining the assessed value placed on the property by the assessor's office for the relevant year; (c) dividing the assessed value by the market value to determine the level of assessment for each property in the sample; and (d) determining the mean and median of the results.

3. That the disparity between (1) and (2) is grossly excessive. The difference between the actual assessment level of the subject property and the average level of assessment for all residential property, taken from a sufficient representative sample in St. Louis County must demonstrate a disparity that is grossly excessive. Savage v. State Tax Commission of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986).

Failed to Establish Fair Market Value of Subject

Complainants' discrimination claim fails because they failed to establish the market value of their property. Without establishing their market value, they cannot establish their assessment ratio. Without establishing their ratio, they cannot establish that they are being assessed at a higher percentage of market value that any other property. The evidence on this record establishes that the fair market value of the subject property is $284,300. The assessed value to be assigned to it, pursuant to statute is 19% or $54,020. Section 137.115.5 RSMo.

Failed to Establish the Average Level of Residential Assessment in St. Louis County

However, even if Complainants had established their market value, their discrimination claim would still fail because they have not demonstrated that a statistically significant number of other residential properties within St. Louis County are being assessed at a lower ratio of market value than their property. The sixteen properties were not established to be a random sampling of residential property in St. Louis County. The sixteen properties were chosen specifically based on a single criterion, that is they are the same model home as the subject. The properties were in a single subdivision in a single school district. This does not constitute a random sampling of residential properties as is required to establish the average assessment ratio in St. Louis County.

Complainants' claim of discrimination also failed to establish the fair market value for any of the sixteen other properties which they presented. If it is assumed that the values determined by the Assessor's mass appraisal of the sixteen properties represents fair market value (which Complainants apparently desire the Commission to do), then they are being assessed at 19% of those values. This is in accordance with the statutory requirement on the residential assessment ratio. Accordingly, Complainants failed to establish that any of the sixteen properties were being assessed at less than 19% of their fair market value (appraised value).

Because Complainants have failed to establish the market value of their property and have failed to establish that they are being assessed at a higher percentage of market value than a statistically significant number of other properties in St. Louis County, they have failed to establish discrimination. The Respondent's evidence establishes the fair market value of the subject property. It is to be assessed at 19% of that value under Section 137.115, RSMo. To value the subject property as asserted by Complainants, would place an assessed value of only $47,500 on the property. This would result in an assessment ratio (assessed value to fair market value - $47,500/284,300 = 16.7%) of only 16.7% or 12% less than what the statute requires. There is not a single scrap of evidence in this record which provides any logical or rational basis upon which it can be concluded that the average residential assessment in St. Louis County is 16.7% instead of 19%. In other words, Complainants' evidence fails to establish a gross disparity between the assessment level of the subject property and the average assessment level of residential property in the County. In point of fact since neither factor was established, no disparity has been demonstrated.

Exhibit A-8

Complainants' Exhibit A-8 referenced the 2002 fourth quarter St. Louis County Sales to appraisal ratio study to support its assertion that the average assessment to market value in the Rockwood School District was 83%. The actual fourth quarter report was not provided at the hearing. Mr. Honerkamp testified he had requested the document from the Assessor's Office but had been advised there was no such document.

The Hearing Officer checked the reports from St. Louis County which are filed with the Technical Assistance Section of the Commission. There was no fourth quarter report for 2002. There were reports for the first, second and third quarters. The Hearing Officer also reviewed the reports for 2000 and 2001. The reports established, based on the sales reported, the average appraised value by the Assessor in relation to the actual sales price of the properties which had sold were in the ratios of .90 (2000), .92 (2001) and .88 (2002-3 quarters).

The 2000 report would have been comparing sales in 2000 to appraised values established for January 1, 1999. These values would have been based on sales occurring prior to January 1, 1999. The reports in 2001 and 2002 would be comparing appraised values established for January 1, 2001, based on sales prior to that date, to sales occurring in 2001 and 2002. In other words, the sales ratio reports always are looking in hindsight. They are reporting on sales activity on given properties after the fact as to the date of appraisal (January 1 of a given assessment cycle) in relation to an appraised value established from data available prior to the appraisal date. The comparison of the figures derived from sales reports is beneficial to the Assessor as his office performs the continuing work of assessing property year after year. However, making a comparison as to a sales ratio approximately two years after the assessment date to the value established based on sales data drawn two years or more before is not sufficient to establish an intentional plan by the Assessor to discriminate against a given property or taxpayer.

Another factor which must also be recognized is that on any given quarterly report the data for the report (actual sale of properties) is always moving further away in time from the data (sales occurring prior to appraisal) used by the computer assisted mass appraisal system. In other words, the fact that a given property sold in the fourth quarter of 2002 for $275,000 and the appraised value by the Assessor for the January 1, 2001 assessment date, established from sales occurring prior to 2001, was only $260,000 does not establish that the appraised value for January 1, 2001 is in error. The very nature of the mass appraisal process is such that values placed on homes may generally tend to lag somewhat behind what the actual sale price on a given assessment date might be. This is because no Assessor has a crystal appraisal ball to look into to determine exactly what a willing buyer and seller would pay for a property on January 1 of a given year. Valuation of residential properties will generally be based on existing evidence of sales of comparable properties.

In any event, the sales reports and value ratios for 2001 and 2002 for St. Louis County do not demonstrate that the difference between the average assessment level for St. Louis County and the assessment level on the subject property is grossly excessive so as to justify the reduction sought by Complainants or any other variance from the statutory assessment ratio of 19%.

Exhibit A-9

The tape recording of a phone message from Paula Lemerman, Counsel for Respondent, to Complainants advising them that the County had three different land factors or values and that in the original valuation an error had been made in applying the land value is totally irrelevant either to establish fair market value or to establish discrimination against the subject property or Complainants. The phone message played at the hearing simply established that Ms. Lemerman was acknowledging that a mistake had been made in the original assessment and that it would be corrected. Furthermore, the fact that assessors allocate a land and improvements value on notices of increase in assessment has nothing to do with the fair market value of the subject property. The real property is the land and the improvements (house, driveway, walks, etc.) together. It matters little what allocation between land and improvements is made. The critical and really only issue is the fair market value of the property. There is no statutory requirement that the fair market value be allocated as to land and improvements. None is made in the decisions rendered by the Commission.

The phone message by Ms. Lemerman was a courtesy to the taxpayers, letting them know a mistake had been corrected. It did not constitute an admission of discrimination.

Respondent's Evidence Clear and Convincing to Establish Value

Ordinarily, when Respondent is advocating a value different from that determined by the Board of Equalization he is only required, like the taxpayer, to meet a standard of substantial and persuasive evidence to establish value. However, in the present case, because the difference between the computer assisted value, sustained by the Board, is less than 1% above the value found by Respondent's appraiser in his narrative appraisal, it is deemed that the clear and convincing standard should be applied in this instance. That standard has been met.

A review of the Winkler appraisal against the statutory guidelines for the evidence necessary to establish value by clear and convincing evidence tilts the scales in the affirmative on the issue of whether the Winkler opinion of value is appropriate. There is nothing in the record upon which the Hearing Officer could conclude that Respondent's evidence is not true. There is no evidence in opposition to the Winkler appraisal on the issue of true value in money. Accordingly, the fair market value of the subject property is clearly and convincingly established to be $284,200 as of January 1, 2002, under the economic conditions existing on January 1, 2001. The property must be assessed at 19% of that value in the absence of any evidence to establish that the average residential assessment ratio in St. Louis County is any amount less than 19%.

ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for County for the subject tax day is SET ASIDE.

The assessed value for the subject property for tax year 2002 is set at $54,020.

A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing of such decision. The application shall contain specific grounds upon which it is claimed the decision is erroneous. Failure to state specific facts or law upon which the appeal is based will result in summary denial. Section 138.432, RSMo 1994.

If an application for review of this decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission. If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal. If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.

Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed. Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.

SO ORDERED June 19, 2003.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Chief Hearing Officer