HERMAN & BARBARA SKAGGS,	)
	)
Complainants,	)
	)
v.	)		Appeal Number 03-32503
	)
SCOTT SHIPMAN, ASSESSOR,	)
ST. CHARLES COUNTY, MISSOURI,	)
	)
Respondent.	)

Decision of the St. Charles County Board of Equalization sustaining the assessment made by the Assessor, AFFIRMED, true value in money for the subject property for tax years 2003 and 2004 set at $112,250, assessed value of $21,330.

Complainant, Herman Skaggs, appeared pro se.

Respondent appeared by Counsel, Charissa Mayes, Assistant County Counselor.

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

Complainants filed their appeal on the ground of Overvaluation and Discrimination. The issues presented are:

(1) the true value in money (fair market value) of the subject property on January 1, 2003; (2) whether the Assessor and/or the Board of Equalization intentionally assessed the subject property at a ratio greater than 19% as set by statute or the average assessment ratio for residential property in St. Charles County.

Complainants appeal the decision of the St. Charles County Board of Equalization which sustained the valuation of the subject property. The Assessor determined an appraised value of $112,250 (assessed value of $21,330, as residential property). Complainant proposed a value of $93,000 (assessed value of $17,670). A hearing was conducted on January 13, 2004, at the St. Charles County Administration Building, St. Charles, Missouri.

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

Complainant, Herman Skaggs, testified in his own behalf and offered into evidence the following exhibits:

Exhibit A - Summary statement of Complainant explaining his other exhibits and a copy of the BOE Decision.

Exhibit B - Copies of the Notice of Real Estate Assessment for tax years 1997, 1999, 2001 and 2003 and a newspaper clipping on assessment in St. Charles County.

Exhibit C - Information on property at 22 Blackberry and the Assessor=s data sheet from the Assessor=s website on the property at 22 Blackberry.

Exhibit D - Picture and the Assessor=s data sheet from the Assessor=s website on the property at 2109 Park Ave.

Exhibit E - Assessor=s data sheet from the Assessor=s website on the subject property, a copy of an Estimate Sheet for renovation of the subject home=s kitchen and six pictures of the exterior and interior of the subject house.

Counsel for Respondent objected to the first page of Exhibit C. The objection was sustained. Page 1 of Exhibit C was not received as evidence. Counsel for Respondent objected to page 2 of Exhibit E, objection was overruled.

Respondent placed into evidence the testimony of Mr. Steven D. Riney, appraiser for St. Charles County. The appraiser testified as to his appraisal of the subject property. The Appraisal Report, Exhibit 1, of Mr. Riney was received into evidence. Mr. Riney arrived at an opinion of value for the subject property of $117,500 based upon a sales comparison approach to value. In performing his sales comparison analysis, the appraiser relied upon the sales of four properties which he deemed to be comparable to the subject property. Exhibit 2, the Trend Factor Analysis for the subject neighborhood that was utilized to establish the adjustment for time of sale was also received into evidence.

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

2. The subject property is located at 713 Hawthorne Avenue, St. Charles, Missouri. It is identified by map number 6-006D-4216-00-35 and Assessor=s Parcel Number 032740A000. The property consists of a .17 of an acre lot improved by a one-story frame and brick house with a continuous wall concrete foundation, asphalt shingles, gabled roof, carpet and vinyl flooring. The house has five rooms, including three bedrooms, one bath and 1,092 square feet of living area. The house was built in 1955. There is an unfinished basement and a patio, no garage.

3. There was no evidence of new construction and improvement from January 1, 2003, to January 1, 2004.

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, 2003, to be $93,000, as proposed.

5. Complainant=s evidence was not substantial and persuasive to establish an intentional plan of discrimination on the part of the Assessor or the Board of Equalization to intentionally assessed the subject property at a ratio greater than 19% as set by statute or the average assessment ratio for residential property in St. Charles County.

5. 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 two blocks of the subject. Each sale property sold at a time relevant to the tax date of January 1, 2003. Each sale property was similar in location, site, view, quality of construction, age of improvements, condition, living area, bedrooms and bathrooms and other amenities. Exhibit 1, pp. 17-19.

6. The comparables were described as follows:

Comparable 1 (20 Blackberry Dr. - north and one street over from the subject) sold in July 2002 for $123,500. This property consists of a .15 of an acre lot improved by a one-story brick and frame house with 1,092 square feet of living area built in 1960. The house has five rooms, including three bedrooms and one bath, with a partially finished basement, and a two-car carport.

Comparable 2 (628 Hawthorne Ave. - 1 block southwest from the subject across the street) sold in April 2002 for $118,900. This property consists of a .13 of an acre lot improved by a one-story brick and frame house with 888 square feet of living area built in 1960. The house has five rooms, including three bedrooms and one bath, with a partially finished basement, and a one-car detached garage.

Comparable 3 (2206 West Adams - 1 block west of the subject) sold in May 2002 for $112,950. This property consists of a .26 of an acre lot improved by a one-story brick and frame house with 1,149 square feet of living area built in 1960. The house has five rooms, including three bedrooms and one bath, with an unfinished basement, and no garage.

Comparable 4 (66 S. Edith Street - 2 blocks west of the subject) sold in July 2002 for $120,000. This property consists of a .22 of an acre lot improved by a one-story brick and frame house with 1,118 square feet of living area built in 1960. The house has five rooms, including three bedrooms and one and a half bath, with an unfinished basement, and a one-car attached garage.

7. 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 various differences between each sale property and the subject.

8. The net adjustments for Comparable 1 amounted to -$5,730 or 4.6% of the sales price. The net adjustments for Comparable 2 amounted to +$100 or less than 1% of the sales price. The net adjustments for Comparable 3 amounted to +$4,690 or 4.5% of the sales price. The net adjustments for Comparable 4 amounted to -$2,820 or 2.4% of the sales price.

9. The adjusted sales prices for the comparables calculated to $117,770, $119,000, $117,640 and $117,180, respectively. The smallest number of adjustments was to comparable 3 with only two adjustments. Comparable 3 also had the small gross adjustment with $4,690. The appraiser concluded on a $117, 500 value which calculated to a value per square foot of $107.61 compared with the sales prices per square foot of living area for the comparables of $113.10, $133.90, $96.30 and $107.33.

10. Respondent=s evidence met the standard of clear and convincing evidence to sustain the value of the subject set by the Assessor and sustained by the Board, as of January 1, 2003, of $112,250.

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.

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).

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

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 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 4.

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.

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).

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).

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).

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 $112,250, appraised value, 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. AFor 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).

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, 2003. 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). See also, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003)

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).

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).

In any case in St. Charles County where the assessor presents evidence which indicates a valuation higher than the value finally determined by the assessor or the value determined by the board of equalization, whichever is higher, for that assessment period, such evidence will only be received for the purpose of sustaining the assessor=s or board=s valuation, and not for increasing the valuation of the property under appeal. Section 138.060, RSMo; 12 CSR 30-3.075.

Discrimination

In order to obtain a reduction in assessed value based upon discrimination, the Complainants must prove an intentional plan by the Assessor or the Board of Equalization to assess the property under appeal at a ratio of its fair market value that is more than the statutory level for residential property of 19% or more than the average residential assessment ratio for St. Charles County. Koplar v. State Tax Commission, 321 S.W.2d 686, 690, 695 (Mo. 1959).

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 residential properties, generally, are 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).

The evidence presented by Complainants did not constitute substantial and persuasive evidence of what the fair market value of the subject was as of January 1, 2003. Mr. Skaggs= opinion of value was essentially based upon the trend of increase on his property from 1997 through 2001 and the fact that the subject house needs various updates and repairs. Mr. Skaggs did not present any evidence of market data for sales of similar homes in Complainants= neighborhood that would support his opinion of value of $93,000.

The opinion of value presented by Mr. Skaggs was not based on proper elements or a proper foundation to establish the fair market value of the property as of January 1, 2003. Accordingly, no probative value or weight attaches to the owner=s opinion of value. The market value set by the assessor on the two properties referenced in Exhibits C and D fail to establish that the fair market value of the subject home is only $93,000.

The further evidence relative to deferred maintenance items in the subject house do not establish value. Essentially the evidence on this point establishes that the general condition of the Complainants= home is consistent with a nearly 50 year old home in need of some updating, renovation and repairs. Testimony and information relating to deferred maintenance is helpful for getting an understanding as to the general condition of a property. However, it does not establish a value only the general condition of the home.

Complainants failed to meet their burden of proof on the fair market value of their property as of January 1, 2003.

Where there is a claim of discrimination based upon a lack of valuation consistency, Complainants have the burden to prove: (a) The level of assessment for the subject property in 2003; (b) The average level of assessment for residential property in St. Charles County in 2003; and (c) that the disparity between (a) and (b) is grossly excessive.

The first step for Complainants 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. This will establish the ratio at which the subject property is being assessed. In the present case, Complainants failed to establish the fair market value of their property. Therefore, there is no way for them to establish the ratio of assessment.

Respondent=s evidence establishes the fair market value of the subject property to be $117,500. However, by Commission Rule and state statute that evidence can only be received to sustain the value set by the Assessor and sustained by the Board of $112,250 and not to advocate an increase in value. However, when the current assessed value ($21,330) is divided by the fair market value shown by the evidence present ($117,500), the ratio of assessment would be 18.2% (21,330/117,500 = 18.2%). Of course, Complainants= property is being assessed at the statutory ratio of 19% of the fair market value originally set by the assessor of $112,250.

The next required step for Complainants is to independently determining the market value of a representative sample of residential properties in St. Charles County. Once this has been done it is then necessary to determine the assessed value placed on the property the assessor=s office for 2003. Then it is necessary to divide the assessed value by the market value to determine the level of assessment (assessment ratio) for each property in the sample. From the range of ratios thus established from the representative sample the mean and median can be established.

Complainants would then need to establish that 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. Charles County must demonstrate a disparity that is grossly excessive.

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.

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. Charles County are being assessed at a lower ratio of market value than their property. Complainants= claim of discrimination is based upon two properties. The fair market value of neither of these properties was established by Complainants. All that was established was that for 2003 the Assessor had assessed on at a fair market value of $103,970 and the other at $100,730. There is no way that these two properties can establish that the general assessment ratio in St. Charles County on residential property is only 15.1%, which would be the effective assessment ratio if the Hearing Officer were to set Complainants= fair market value at $93,000 (assessed value $17,670) as advocated by Complainants.

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. Charles County, they have failed to establish discrimination.

Respondent=s appraiser performed his appraisal utilizing a recognized methodology for the appraisal of real property in appeals before the Commission. His reliance on the sales comparison or market approach was well placed. Respondent utilized sales of four different properties all located within no more than two blocks of the subject. Three of the four comparables were so close in living area to the subject house, all less than 60 square feet larger than the subject, that no adjustment for this factor was even required. The sales occurred no more than eight months before tax date. All of the sales were of homes similar in age to the subject. The Appraiser had discovered no evidence of building permits being issued for updating and renovation to any of the comparables. It can rightly be concluded that they would be in the same general condition as the subject, without updating and with some deferred maintenance.

Conclusion

Complainants failed to met their burden of proof to establish by substantial and persuasive evidence that the fair market value of their property was $93,000 on January 1, 2003. Complainants failed to establish by substantial and persuasive evidence that their property was being assessed at a level higher than the average assessment on residential property in St. Charles County or that it was assessed at more than 19% of its fair market value. Respondent=s appraisal reached the level of clear and convincing evidence to sustain the value of $112,250.

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

The assessed value for the subject property for tax years 2003 and 2004 is set at $21,330.

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. Charles 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 January 26, 2004.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Hearing Officer