HERMAN & JANICE HAMM,	)
	)
Complainants,	)
	)
v.	)		Appeal Number 03-32508
	)
SCOTT SHIPMAN, ASSESSOR,	)
ST. CHARLES COUNTY, MISSOURI,	)
	)
Respondent.	)

Decision of the St. Charles 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 years 2003 and 2004 to be $340,000, assessed value of $64,600.

Complainants appeared pro se.

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

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

The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2003.

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 $353,270 (assessed value of $67,120, as residential property). Complainants proposed a value of $315,800 (assessed value of $60,000). An evidentiary 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 Hamm, testified on behalf of Complainants. Mr. Hamm stated his opinion of a reasonable assessment for the subject property to be $315,800. This was based on Mr. Hamm=s comparison of three sale properties which he deemed similar to the subject. Mr. Hamm developed three different methods of arriving at what he termed a reasonable assessment. In support of his methods of comparison, Mr. Hamm had developed a document which was marked as Exhibit A. Exhibit A set out in detail each of Mr. Hamm=s three methods of comparison and his summary of a reasonable assessment for the subject.

At the close of Mr. Hamm=s testimony, Counsel for Respondent objected to Exhibit A being received into evidence on the general grounds of lack of foundation and the relevancy of the exhibit. The objection was sustained. Exhibit A was excluded from evidence.

Upon the Hearing Officer ruling on the objection, Mr. and Mrs. Hamm proceeded to leave the hearing room. The Complainants were advised by the Hearing Officer that they could voluntarily dismiss their appeal. They declined to do so. They were then advised the Hearing Officer would proceed to receive Respondent=s evidence and that they could stay for that presentation and question Respondent=s appraiser. Complainants declined to do so and left the hearing at which time the Hearing Officer permitted Counsel for Respondent to lay appropriate foundation for the receiving of Respondent=s exhibits.

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 $340,000 based upon a sales comparison approach to value. In performing his sales comparison analysis, the appraiser relied upon the sales of five properties which he deemed to be comparable to the subject property. Mr. Riney also presented a cost approach which provided an indicated value of $341,360.

A corrected page 19 of Exhibit 1 to account for a corrected square footage for the subject house=s living area was provided by Mr. Riney at prior to the hearing. Corrected page 19 was substituted for the original page 19. This corrected page was to account for the living area of the subject being 2,355 square feet instead of 2,515 square feet based upon Mr. Riney=s remeasurement of the subject house. Upon further review of his adjustment grid, Mr. Riney submitted a revised adjustment grid (faxed to the Hearing Officer 1/21/04) which concluded on a value of $340,000, instead of $345,000 that had been his original opinion. Exhibit 2, the trend factor analysis for the subject neighborhood, was 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 60 Leinster Lane, Weldon Spring, Missouri. The property is identified by map number 3-121B-6418-00-239 and parcel number A893000625. The property consists of .42 of an acre lot, improved by a one-story frame and brick atrium ranch with a continuous wall concrete foundation, asphalt shingles, gabled roof, carpet and vinyl flooring, built in 1993. The house has 2,355 square feet of living area, (Complainant used a living area of 2,373) which includes six rooms, including three bedrooms and three bathrooms, with a finished basement and a two-car attached garage.

3. There was no evidence of new construction and improvement from January 1, 2003, to January 1, 2004, accordingly the fair market value for the subject property will remain the same for the 2003 and 2004 tax years.

4. Complainants= 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 $315,800.

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 3 to 11 blocks of the subject. Each sale property sold at a time relevant to the tax date of January 1, 2003. Each of the sale properties were similar to the subject in location, site size and view, quality of construction, age, design and appeal, living area and other amenities of comparison. Exhibit 1, pp. 17-19.

6. The comparables were described as follows:

Comparable 1 (202 Abey Glen Lane - 6 blocks south-southwest of the subject) sold in December 2002 for $340,000. This property consists of a .36 of an acre lot improved by a one- story brick and frame home, built in 1991, with 2,567 square feet of living area, containing six rooms, with three bedrooms and two and a half bathrooms. The house has a finished basement and an attached three-car garage.

Comparable 2 (529 Malinmore Drive - 3 blocks south-southwest of the subject) sold in November 2002 for $360,000. This property consists of a .35 of an acre lot improved by a one- story brick and frame home, built in 1997, with 2,441 square feet of living area, containing six rooms, with three bedrooms and two bathrooms. The house has a finished basement and an attached three-car garage.

Comparable 3 (1166 Whitmor Drive - 11 blocks southwest of the subject) sold in July 2002 for $326,400. This property consists of a .36 of an acre lot improved by a one-story brick and frame home, built in 1988, with 2,448 square feet of living area, containing eight rooms, with three bedrooms and two and a half bathrooms. The house has an unfinished basement and an attached two-car garage.

Comparable 4 (158 Grange Hill Lane - 4 blocks southwest of the subject) sold in November 2001 for $405,000. This property consists of a .46 of an acre lot improved by a one- story brick and frame home, built in 1999, with 2,412 square feet of living area, containing six rooms, with three bedrooms and three bathrooms. The house has a finished basement and an attached three-car garage.

Comparable 5 (1227 Grey Fox Run - 9 blocks southwest of the subject) sold in February 2003 for $350,000. This property consists of a .52 of an acre lot improved by a one-story brick and frame home, built in 1995 with 2,583 square feet of living area, containing seven rooms, with three bedrooms and four bathrooms. The house has a finished basement and an attached three-car 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 the various differences and were within generally accepted ranges for an appraisal problem of this nature.

8. The net adjustments for Comparable 1 amounted to -$13,420 or 4% of the sales price. The net adjustments for Comparable 2 amounted to -$60 or less than 1% of the sales price. The net adjustments for Comparable 3 amounted to +$14,145 or 4.3% of the sales price. The net adjustments for Comparable 4 amounted to -$62,440 or 15.5% of the sales price. The net adjustments for Comparable 5 amounted to -$16,280 or 4.6% of the sales price.

9. The adjusted sales prices for the comparables calculated to $326,580, $359,940, $339,845, $342,560 and $333,720, respectively. The appraiser placed equal weight on each of the adjusted sales prices in arriving at a final opinion of value. The appraiser concluded on a $340,000 value which calculated to a value per square foot of $144.37 compared with the sales prices per square foot of living area for the comparables of $132.45, $147.48, $130.72, $167.91 and $142.50.

10. Respondent did not 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.

11. Respondent=s evidence met the standard of substantial and persuasive to establish the value of the subject, as of January 1, 2003, to be $345,000.

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).

The presumption in favor of the Board is not evidence. A presumption simply accepts something as true without any substantial proof to the contrary. In an evidentiary hearing before the Commission, the valuation determined by the Board, even if simply to sustain the value made by the Assessor (which is not presumed to be correct), is accepted as true only until and so long as there is no substantial evidence to the contrary.

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.

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.

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).

Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law. Hermel, Cupples-Hesse, Brooks, supra.

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).

Complainants failed in the present appeal to establish the fair market value of their property. Although Mr. Hamm developed three different methods or types of analysis to arrive at value, none of the methods were established to be recognized as an approved appraisal methodology or as an approach to value which has been recognized by the courts of this state or by the Commission for valuation of real property under appeal for ad valorem tax purposes. The Hearing Officer takes this opportunity to provide a review of Mr. Hamm=s methodology so as to point out for not only his edification, but for assessors and other taxpayers who might review this decision the flaws and shortcomings of Mr. Hamm=s analysis. The Hearing Officer recognizes that Mr. Hamm put a great deal of time and effort in developing his unique methods of valuation. The purpose of the Hearing Officer=s analysis and review is to hopefully assist Mr. Hamm, and other taxpayers, in better understanding the burden of proof which the Complainant bears on the issue of fair market value.

The starting point in any valuation appeal is to understand the issue before the Commission. The valuation issue is what was the fair market value (True Value in Money) of the subject property on the relevant tax or valuation date. In the present appeal, what was the fair market value for the property at 60 Leinster Hill Land on January 1, 2003. In order to provide an answer to that issue, the Complainants needed to establish fair market value under the recognized and accepted standard for fair market value. See, Standard for Valuation and Market Value, supra.

The Commission=s pamphlet - Property Tax Appeals Before The State Tax Commission (Appeals Pamphlet) - which is provided to each taxpayer with the instructions and forms for filing their Complaint for Review of Assessment clearly addresses the need to prove value. A[T]he determination of value, by law, must be made based on what the property would bring in the open market if it were to be sold.@ Appeals Pamphlet, p. 3. AIf you are appealing on the grounds of overvaluation ..., you need to show what the value of your property was on January 1.@ Appeals Pamphlet, p. 7. The Appeals Pamphlet also provides a Glossary of Terms, pp. 11-13, which defines both Appraised Value and True Value in Money.

AAppraised Value. An estimation of the true value in money (fair market value) of residential and commercial property ... .@

AFair Market Value. The price the property would bring after a reasonable exposure to the open market when offered for sale by a person who is willing but not obligated to sell it, and is bought by a person who is willing to purchase it but is not forced to do so. The fair market value of the property.@

In the present appeal, Mr. Hamm=s testimony and analysis did not actually offer a fair market value. It offered what Mr. Hamm termed a Areasonable assessment.@ There was no evidence upon which the Hearing Officer could reasonably find, within the confines of relevant case law and prior Commission decisions that Mr. Hamm=s reasonable assessment represented the fair market value of the subject property.

In short, Mr. Hamm=s analysis started off from the wrong point. The foundation for his analysis, a determination of a Areasonable assessment@ was in error. It was in error because there is no such valuation standard either in case law or prior Commission decisions. The application of an erroneous valuation standard doomed Mr. Hamm=s methods from the outset.

Essentially, Mr. Hamm=s three different methods to arrive at a reasonable assessment are simply three of numerous variations which have been presented before the Commission under what are classified as comparative assessment methods. Comparative assessment methods seek, in some form or fashion, to take the valuations determined by the Assessor for any number of properties other than the subject and then utilize such values to construction a method of generally averaging and comparing the other valuations/assessments to arrive at some figure to be presented as the value for the property under appeal. Comparative assessment approaches of whatever form or fashion will not constitute substantial and persuasive evidence of the fair market value of a property under appeal. This is because of two very basic, and virtually irrefutable, factors.

A comparative assessment is flawed because it is relying, to begin with, on the fair market value established by the Assessor for other properties. By law, there is no presumption that the assessors valuation is correct. Section 138.431.3, RSMo. Therefore, any taxpayer making a valuation argument basing that argument on the values determined by the Assessor is starting from an improper foundation and is relying on an improper element.

The second fundamental flaw of relying on the Assessor=s valuation is that there is no recognized appraisal methodology that relies upon such a value. A properly developed sales comparison approach to value begins not with the value set by the Assessor for a given tax year, but with the actual sales price of properties which have sold at a time relevant to the appropriate tax date or the date of appraisal in situations not involving ad valorem tax appeals. In other words, appraisers don=t rely upon assessors values, they rely upon sale prices in a market analysis.

Mr. Hamm=s three methods for making a determination of what he felt was a Areasonable assessment@ were each improper approaches to arriving at fair market value. An owner may always testify as to their opinion of fair market value. However, that opinion must rest upon property elements and a proper foundation. Whenever an owner ventures into any attempt to Aappraise@ their property then they come within the general criteria governing appraisal of property. Taxpayers do not have a free hand to come up with whatever valuation methodology might suit their fancy and meet their burden of substantial and persuasive evidence.

In short, taxpayers who seek to appraise their property must essentially play by the same rules as appraisers. If the approach to value created and devised by a taxpayer is not demonstrated to be one that is recognized in the appraisal industry or by courts and this Commission, it cannot have any probative value, no matter how creative it may be or how well it may be presented. Such was the case in this instance. Mr. Hamm was a very articulate witness. He had put a great deal of time and effort into developing and setting out his three methods of reasonable assessment. However, the Commission cannot ignore the law and find a value that is not representative of the fair market value of the property.

A brief review and analysis of each of Mr. Hamm=s three methods is provided.

In Mr. Hamm=s first method of valuation he selected the property at 1166 Whitmoor Drive, which he indicated had sold in July 2002 for $320,000. However, according to Mr. Riney=s information verified by the buyer, the property sold for $326,400 in July 2002. The assessor had apparently placed this property on the assessment role for tax year 2003 at a value of $318,660. Mr. Hamm calculate a difference in land value of $3,120 between the 1166 Whitmoor property and the subject, due to the subject being .42 of an acre and the Whitmoor property being only .36 of an acre. This was based upon a valuation by the Assessor of $52,000 for the subject land.

The Whitmoor property was also selected by Mr. Riney as his comparable 3 in his sales comparison approach to value. Mr. Riney did not deem an upward adjustment to account for the difference of 2,613 square feel in the lot size. Different appraisers might deem an upward adjustment warranted for this difference. However this slight difference in acreage is generally not adjustment for in most instances in appraisals before the Commission.

Furthermore, although the Assessor had placed a value on the subject lot of $52,000, Mr. Hamm treated the $52,000 as a per acre value and based his calculations on this amount. However, when the $52,000 is applied to the subject=s 18,295 square feet (43,560 x .42 = 18,295), the value per square foot would be $2.84 ($52,000/18,295 = $2.84). The indicated value of the Whitmoor lot would be $44,537 (43,560 x .36 = 15,682 x 2.84 = $44,537). Therefore, the difference in value between the subject lot and the Whitmoor lot would be $7,463 ($52,000 - $44,537 = $7,463). Accordingly, if Mr. Hamm=s method were to be utilized it would require a upward adjustment to the Whitmoor sale price ($326,400) not the appraised value by the Assessor ($318,660) of approximately $7,460. This would make the subject=s indicated value adjusted for the acreage difference with the Whitmoor property to be $333,860.

On the matter of the lot size, Mr. Hamm=s method understates the adjustment that would be made and the adjustment is applied to the wrong value amount for the Whitmoor property.

According to Mr. Hamm=s information, the Whitmoor house contained 2,448 square feet of living area. Mr. Riney=s appraisal confirms that. Mr. Hamm subtracted the subject=s 2,373 living area (Mr. Riney used 2,355 after remeasuring) to arrive at a difference in living area of 75 square feet. In many instances a difference in living area of only 75 square feet will not warrant any adjustment. Mr. Riney=s elected to make an adjustment for the difference of 93 square feet, as per his calculations. Hi adjustment was at $35.00 per square foot. This is a reasonable and appropriate adjustment for a property such as the subject and this comparable.

Mr. Hamm made a negative adjustment of $8,170. This amount was arrived at by using a per square foot amount of $108.93 for the adjustment. Although Mr. Hamm testified that the $108.93 amount was taken from the Assessor=s records, the Hearing Officer is unable to find any such amount for the improvement value or to make any calculation which reflects that value. In any event such an adjustment to account for the difference in living area is clearly excessive under any appropriate appraisal standards.

Adjustments for difference in living area are generally made by appraisers applying a percentage of the per square foot sale prices of properties utilized a comparables. Such an adjustment is ordinarily made without attempting to back out any land value. In other words an appropriate adjustment for the five comparable properties relative to living area would be based on a 25-30% of the average per square foot sale prices. In this instance, a range of about $35 -$45 per square foot. Very simply, adjusting the Whitmoor sales price downward for the subject=s smaller living area by $8,170 is too great of an amount for such an adjustment.

Accordingly, a net downward adjustment for lot size and living area applied to the Assessor=s appraised value as performed by Mr. Hamm of -$5,050 was grossly in error. It resulted in an indicated value of only $313,610 as Mr. Hamm=s opinion of a reasonable assessment. Assuming for the sake of demonstration, that adjustments for lot size and living area were warranted, the appropriate adjustments as demonstrated above would reasonable be approximately $7,460, upward adjustment for lot size and a downward adjustment of $2,625 for living area, for a net upward adjustment of $4,835. This would be applied to the actual sales price under recognized and accepted appraisal standards to provide an indicated value of $331,235. However, it would then be necessary, based on the evidence in this record, to make further adjustments for date of sale of the Whitmoor property and differences in other amenities between the property. Mr. Riney=s appraisal provides the only basis for making these additional adjustments.

When the adjustments for other differences between the Whitmoor property and the subject are taken into account the adjusted sales price of the Whitmoor property, applying appropriate adjustments as demonstrated above and using Mr. Hamm=s living area figure of 2,373 square feet, would be $348,635. This clearly refutes an opinion of value of $313,610 as proffered by Mr. Hamm. It in fact provides support to Mr. Riney=s conclusion of value.

The next method which Mr. Hamm developed relied upon the assessment history of the subject property to the property at 63 Leinster Hill Lane. The 63 Leinster property sold in August 2001 for $370,000. Mr. Riney elected to not use this sale as a comparable. The sale date is somewhat dated in light of the fact that Mr. Riney had three sales which occurred in 2002, one in February 2003 and one in November, 2001. Had Mr. Riney utilized the 63 Leinster sale, it would have required a rather large upward adjustment for time of sale. The Hearing Officer calculates such an adjustment, based on the adjustment to the November, 2001 sale, would be approximately $25,920. This means the indicated sales price of the 63 Leinster property as of January 1, 2003 would be $395,920. This would be the basis from which other adjustments would then be made.

Mr. Hamm=s method was to compare the differences in the Assessor=s appraised values for the 63 and 60 Leinster Hill Land properties for the 1997, 1998, 1999, 2000 and 2001 assessments. He then calculated a percentage difference between the two properties. He calculated that for the various years, the subject property was appraised by the Assessor at 12%, 12%, 12%, 10% and 10% less than the 63 Leinster property. He then calculated the average of 11.3% and applied this to the 2003 Assessor=s appraised value of $362,050 for 63 Leinster to arrive at what Mr. Hamm designated a Acomparative assessment for 60 Leinster@ of $321,315.

This method, like Mr. Hamm=s first method is not recognized within the appraisal industry as a valid method of arriving at the indicated value for any given property. Furthermore, it is based upon an assumption that the Assessor had correctly and accurately determined the fair market value for both properties for the period from 1997 through 2001. Of course, as has been noted above, this assumption cannot be presumed to be correct under state statute. Furthermore, although the Assessor could not have know in setting the January 1, 2001 appraised value of 63 Leinster that it would sell in July of that year for $370,000, it is clear that for tax year 2001 63 Leinster was under valued by approximately $30,000.

The Hearing Officer notes at this point that a few illustrations of an assessor placing a market or appraised value on a property at less than what it later or even previously had sold for does not establish that other taxpayer=s are entitled to an arbitrary reduction in their valuation, that is not representative of fair market value. Evidence of values and assessments of a few properties does not prove discrimination or unequal assessment by the assessor. Substantial evidence must show that all other property in the same class, generally, is actually undervalued in order to establish inequality or discrimination in assessment. State ex rel. Plantz v. State Tax Commission, 384 S.W.2d 565, 568 (Mo. 1964).

Returning to Mr. Hamm=s comparative assessment method, it simply has no relevance to finding fair market value. All that this method demonstrates is a ratio between the Assessor=s valuations for two different properties over a five year period. Since none of the Assessor=s values can be presumed correct either for the subject or the 63 Leinster property, the ratio of the subject property on average being valued at 11.3% less than 63 Leinster has absolutely no relevant meaning for the issue before the Hearing Officer.

For Mr. Hamm=s final method to arrive at a Areasonable assessment@ he selected the sale of the property at 62 Leinster Hill Lane, apparently the house one house from the subject on the Leinster Hill cul-de-sac. This property sold in April, 2002 for $357,510. Mr. Hamm applied a negative overall adjustment to the sale price of $45,010, to arrive at a value for the subject of $312,500. This was to account for 62 Leinster having 3,969 square feet of living area, it adjoining the golf course, having a 3 car garage, being at the end of the cul-de-sac, having 9 rooms and being a 2 story house.

Each of these elements are differences which an appraiser would consider in make appropriate adjustments. However, there was not established on the record that Mr. Hamm by training, education or experience possesses the necessary expertise to make appropriate adjustments based on market activity for the various differences between the subject and this property. Therefore, there is no basis to support the $45,010 negative adjustment which Mr. Hamm proffered.

More importantly, the various differences on their face between 60 Leinster and 62 Leinster would cause most appraisers to decline from using 62 Leinster as a comparable sale for valuing 60 Leinster. Two differences weigh heavily against using 62 Leinster for comparison purposes. First, 62 Leinster has 1,596 square feet more living area than the subject. This factor alone would disqualify the property from being used in a sales comparison analysis unless it was shown that there were simply no other sale properties at a time relevant in the subject neighborhood more similar in size to the subject. Adjusting for living area that is approximately 67% of the subject=s living area is to great of an adjustment to make.

The second factor of 62 Leinster being a two story house, while the subject is a one story house, would be a further fatal strike against this property being used as a comparable. Using a two story as a comparable for valuing a one story is simply generally not acceptable appraisal practice. It should only be done, if ever, in rare instances when there are simply no good one story comparables to utilize. Such was not the case in this appeal, since Mr. Riney was able to find five recent sales of one story homes to be analyzed. Accordinlgy, Mr. Hamm=s conclusion of a value for the subject based on the sale of 62 Leinster is simply not based on proper elements and a proper foundation. It has no relevance to the fair market value of the subject.

Mr. Hamm summarized his three methods by adding together the Areasonable assessment@ values he had calculated and then averaged the three figures. This resulted in an average Areasonable assessment@ of $315,800. Averaging of indicated values is generally not the strongest approach to reaching a conclusion of value. Only in those instances where an appraiser has arrived at adjusted sales prices under appropriate appraisal standards and the variances between the total net adjusments and the number of actualy adjustments are nearly identical would an averaging of adjusted values appear to be appropriate.

Such was the case in this appeal. Mr. Riney concluded on an opinion of fair market value which fell just $500 below the average of the adjusted sales prices of his comparables. He gave equal weight to each of his adjusted sales prices. The Hearing Officer finds no problem with the appraiser=s exercise of judgment in this case, and would concur in it.

In the present case, Mr. Hamm=s averaging is simply a flawed methodology. Each of the indicated Areasonable assessments@ as noted in the detailed discussion set forth above are simply irrelevant conclusions as to fair market value. Accordingly, the averaging of irrelevant conclusions only results in an average irrelevant conclusion. No probative weight is merited for Mr. Hamm=s final opinion as what a Areasonable assessment@ should be for the subject property.

Due to the fact that Mr. Hamm=s opinion of value was not demonstrated to have been based upon proper elements or a proper foundation, it can be given no probative weight on the issue of the fair market value of the subject property as of January 1, 2003. There is no dispute that Mr. Hamm mathematically make accurate calculations. The problem lies in the fact that the type of adjustment calculations which Mr. Hamm made are not those recognized and utilized by appraisal experts. Mr. Hamm was not established as an expert in the field of appraisal. The basis for his adjustments were not appropriate. It does not matter how accurate a taxpayer may be in making calculations of math, if the calculations are not appropriate for the adjustments being attempted, they are for all intents and purposes irrelevant. Accordingly, there is no relevant evidence that will support a finding of a fair market value for the subject property as of January 1, 2003 to be $315,800 as proffered by Complainants.

The evidence presented by Respondent by the appraisal of Mr. Riney provided substantial and persuasive evidence to support a determination that the presumption of correct assessment by the Board was rebutted and the fair market value as of January 1, 2003 for the subject was established to be $340,000. The Riney appraisal constitutes substantial and persuasive evidence for several basic reasons.

First and foremost, the appraiser presented two approaches to value which are recognized both within the appraisal industry and by court and Commission decisions in arriving at the indicated fair market value of real property. Both the cost and sale comparison approaches are market driven approaches, which in the absence of an actual timely sale of the property being appraised provide the best evidence to establish value.

Secondly, Mr. Riney=s sales comparison or market approach was developed from five properties which had sold within one to thirteen months of the valuation date. The net adjustments as a percentage of sale prices all fell within a very sound range. Only one comparison property (Comp. 4) required a net adjustment of larger than 4.6%. The 15.5% net adjustment to Comp. 4 was influenced mostly by an adjustment of -$80,000 due to its location being on the golf course which is in the subject development. The subject, as well as, the other four comparables are not so similarly situated. However, even if Mr. Riney had not elected to include the Comp. 4 property in his sales comparison approach, there would have been more than sufficient evidence from the other sale properties to establish the value which he presented.

Finally, the sales data demonstrates that homes like the subject are clearly selling in a range of at least $326,000 - $360,000. There was no sales data to establish that a home like Complainants would only command $315,800 if exposed to the market for a reasonable time.

Complainants failed to meet their burden of proof to establish fair market value. Respondent presented substantial and persuasive evidence to establish the fair market value of $340,000, giving equal weight to the five sales comparables relied on in the sales comparison approach. Accordingly, the assessment made by the Board of Equalization must be set aside and the fair market value of $340,000 set for the subject property.

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 SET ASIDE.

The assessed value for the subject property for tax years 2003 and 2004 is set at $64,600.

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