LEE L. BASSO,	)
	)
Complainant,	)
	)
v.	)		Appeal Number 03-10075
	)
PHILIP MUEHLHEAUSLER, ASSESSOR,	)
ST. LOUIS COUNTY, MISSOURI,	)
	)
Respondent.	)

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 years 2003 and 2004 to be $330,000, assessed value of $62,700.

Complainant appeared pro se.

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

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

The Commission takes this appeal to determine (1) the true value in money for the subject property on January 1, 2003 (2) and whether there was an intentional plan by assessing officials to assess the subject property at a ratio greater than the average ratio for residential property in St. Louis County.

SUMMARY

Complainant appeals, on the ground of overvaluation and discrimination, 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 $336,500 (assessed value of $63,930, as residential property). Complainant proposed a value of $300,000 (assessed value of $57,000) on the Complaint for Review of Assessment (Complaint). A hearing was conducted on April 27, 2004, 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 testified in his own behalf. Complainant asserted an opinion of value on the Complaint of $300,000. At the evidentiary hearing, Mr. Basso offered an opinion of value of $305,000. Complainant testified as to his three methodologies for arriving at his opinion of value. In support of his opinion of value, Mr. Basso offered into evidence the following exhibits.

Exhibit A, a document prepared by Complainant to explain his different theories of value.

Exhibit B, a spreadsheet providing detail information on two of the Complainant=s theories of value, with a hand drawn site map indicating locations of the various properties used in Complainant=s theories of value.

Exhibit C, an estimate for cost to construct a screened in porch or patio and estimate for the cost of a finished basement.

Exhibit D, copies of St. Louis County Comparable Sales Analysis Reports for 2003 on the subject property and five other properties.

Exhibit E, appraisal report of John LeGrand on the subject property.

Counsel for Respondent objected to Exhibits A through D on the grounds of lack of foundation - not acceptable methods of appraisal, relevancy and hearsay. Objection was made to Exhibit E on the ground of hearsay, as the appraiser was not present to testify as to his appraisal. Objections were sustained. Exhibits were excluded from evidence. See, DECISION, infra, as to discussion on basis for sustaining the objections and lack of probative value of the proffered exhibits.

Respondent placed into evidence the testimony of Mr. Arthur R. Froeckmann, appraiser for St. Louis County. The appraiser testified as to his appraisal of the subject property. The Appraisal Report, Exhibit 1, of Mr. Froeckmann was received into evidence. Mr. Froeckmann arrived at an opinion of value for the subject property of $330,000 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.

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 1590 Timberlake Manor Parkway, Chesterfield, Missouri. The property is identified by locator number 19R520934. The property consists of .10 of an acre site improved by a attached one and a half story brick and frame single-family structure of average quality construction. The house was built in 1987 and appears to be in average condition, with no apparent deferred maintenance items noted. The residence has a total of seven rooms, which includes three bedrooms, two full and one half baths, and contains 3,033 square feet of living area. There is a full basement (1,895 square feet) with no finished rooms. The house has an attached two-car garage. The residence has a covered front porch, wood deck over a concrete patio, concrete walkway and double-wide blacktop driveway.

The house has a greater setback from the street than most properties in the development. The setback reduces exposure to traffic noise and allows the existence of a common drive loop, allowing for additional parking space in addition to the on-street parking. The site is located near the end of the development with a rear overview of other units. The traffic level for the site appears lower than for most other sites closer to the development entrance. There was no listing or sale of the property noted within three years prior to the tax date of January 1, 2003. Exhibit 1, p. 5.

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 $300,000 (Complaint for Review of Assessment) or $305,000 (Testimony at Hearing).

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 in the subject development and within 1/8 of a mile of the subject. Each sale property sold at a time relevant to the tax date of January 1, 2003. The sale properties were similar to the subject in style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability. Exhibit 1, pp.6-8.

6. The comparables were described as follows:

Comparable 1 (1609 Timberlake Manor Parkway - 1/8 of a mile Northeast of the subject) sold in May 2002 for $365,000. This property consists of a .10 of an acre site improved by a one and a half story attached brick and frame single-family structure of average quality construction. The house was built in 1987 and appears to be in average condition. The residence has a total of seven rooms, which includes three bedrooms, three full and one half baths, and contains 3,033 square feet of living area. There is a full basement with 800 square feet of finished area. There is an attached two-car garage. The residence has a covered front porch, a small wood side deck and a rear screened porch. The site has a location near the end of the development. The front view is of other units and the rear view is of wooded common ground.

Comparable 2 (14637 Timberlake Manor Court - 1/8 of a mile South of the subject) sold in June 2002 for $360,000. This property consists of a .10 of an acre site improved by a two-story attached brick and frame single-family structure of good quality construction due to interior materials and appliances upgrades. The house was built in 1987 and appears to be in average condition. The residence has a total of seven rooms, which includes three bedrooms, two full and one half baths, and contains 2,962 square feet of living area. There is a full basement with 1000 square feet of finished area. There is an attached two-car garage. The residence has a covered front porch, patio and a wood deck. The units along this street are more tightly clustered and have smaller setbacks than the subject. The view consists of other units and streets. On- street parking is limited.

Comparable 3 (1527 Mallard Landing Court - 1/8 of a mile Southwest of the subject) sold in April 2002 for $337,000. This property consists of a .08 of an acre site improved by a two-story attached brick and frame single-family structure of average quality construction. The house was built in 1986 and appears to be in average condition. The residence has a total of six rooms, which includes two bedrooms, three full and one half baths, and contains 3,145 square feet of living area. There is a full basement with 400 square feet of finished area. There is an attached two-car garage. The residence has a covered front porch and a wood deck. The units along this street are more tightly clustered and have smaller setbacks than the subject. The view consists of other units and streets. On- street parking is limited.

Comparable 4 (14606 Mallard Lake Drive - 1/8 of a mile Northwest of the subject) sold in September 2001 for $328,000. This property consists of a .10 of an acre site improved by a two-story attached brick and frame single-family structure of average quality construction. The house was built in 1986 and appears to be in average condition. The residence has a total of six rooms, which includes two bedrooms, two full and one half baths, and contains 2,987 square feet of living area. There is a full basement with no finished area. There is an attached two-car garage. The residence has a covered front porch, patio and a wood deck. The site is considered to have a good location because of being in a lower density area of the development and near the lake. The view consists of other units, common ground and the street. On-street parking is limited.

7. The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable. All adjustments appear to be appropriate to bring the comparables in line with the subject for purposes of the appraisal problem.

8. The net adjustments for Comparable 1 amounted to -$33,000 or 9.04% of the sales price. The net adjustments for Comparable 2 amounted to -$30,000 or 8.33% of the sales price. The net adjustments for Comparable 3 amounted to -$9,400 or 2.79% of the sales price. The net adjustments for Comparable 4 amounted to +$4,000 or 1.22% of the sales price.

9. The adjusted sales prices for the comparables calculated to $332,000, $330,000, $327,600 and $332,000, respectively. The appraiser concluded on a $330,000 value which calculated to a value per square foot of $108.80 compared with the sales prices per square foot of living area for the comparables of $120.34, $121.54, $107.15 and $109.81.

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 $330,000.

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 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, 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. 3.

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).

In order to prevail, Complainant 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).

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.

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).

Discrimination

In order to obtain a reduction in assessed value based upon discrimination, the Complainant must (1) prove the true value in money of their property on January 1, 2003. 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. 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). The difference in the assessment ratio of the subject property the average assessment ratio in the subject county 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, supra.

An owner=s opinion of value only has probative value when it is demonstrated that the opinion is based upon proper elements and a proper foundation. This was not demonstrated in the present case. After receiving testimony from Mr. Basso it was clearly apparent he was not basing his opinion of value on any recognized and accepted approach to establishing fair market value. Accordingly, his opinion of value could be given no probative weight in this appeal. The three techniques for value used by Complainant to arrive at a value of $305,000 were simply three different calculations of percentages utilizing comparative assessments.

Taxpayers often want to calculate the percentages of increase on the value of their property and other properties from the Assessor=s records. The calculations for neighboring properties, are generally from properties on their street or properties in their subdivision as shown in the Assessor=s records. Ordinarily when such theories of valuation have been presented before the Hearing Officer the taxpayer is arguing for the property under appeal to only be increased in value by the average percentage which has been calculated. Such an approach and the diverse variations that have been presented over the years come under the general title of Acomparative assessment.@

This type of valuation methodology is quite simple and very appealing to many taxpayers, because it is grounded in a very basic mathematical calculation. It is usually asserted that the figures are correct and therefore the value derived from such an arithmetical exercise must be correct. However, such a procedure (comparative assessment) is fatally flawed as it is based upon an incorrect assumption.

Any form of comparative assessment theory starts with the presumption that the Assessor properly valued the subject property in the prior assessment cycle and the present cycle. This is in error. By statute there is no presumption that the Assessor has correctly valued the subject property in any assessment cycle. In like manner there is no presumption that the Assessor has correctly value the other properties being used in the comparative assessment. Therefore, any calculations made from such comparisons are of no probative value.

While the calculations may be correct, all they demonstrate is the percentage difference between one assessment cycle and the following cycle. They do not establish that in point of fact the fair market value of the property was what the Assessor set in the 2001 or the 2003 cycle. That is the critical issue. Each of the theories of value put forth by Mr. Basso are simply variations of comparative assessment concepts. They possess no probative value for purposes of establishing fair market value.

For the first method of valuation, Mr. Basso listed seven properties in the subject development. He gave their appraised values as determined by the Assessor for 2003. He then totaled the 2003 appraised values for the seven properties. Complainant then added the cost for a screened porch for five of the properties and the cost of a finished basement for three of the properties. He then subtracted the total amount for screened porch and finished basements from the total appraised value for the seven properties. The resulting figure was then divided by seven to arrive at an average appraised value of $299,380 to support his position that the subject property should be valued at $300,000, as shown on the Complaint.

The first defect in this methodology is that it is not established by evidence from the market that the Assessor=s 2003 appraised values are in fact the fair market values of the seven properties as of January 1, 2003. This methodology contains the further defect of assuming that the cost to construct a screened porch and a finished basement can simply be deducted dollar for dollar from the appraised value. There is no evidence to establish that this is a proper appraisal method for accounting for such a difference between these properties and the subject.

In point of fact, this is an erroneous technique. It is not recognized by appraisers as the proper manner in which differences in amenities are to be accounted for. The market will rarely if ever return dollar for dollar the cost of a given improvement, remodeling, repair or upgrading.

Mr. Froeckmann properly accounted for the fact that three of his comparables did have basement finish, while the subject did not. He also adjusted for the one comparable that did have a screened in porch. The adjustments were in accordance with proper appraisal practice of accounting for an estimate of what the market would allow for such difference, instead of adjusting for the total cost to construct for such items.

This methodology is further defective in that it is a valuation by average. The method was based upon the average of the Assessor=s appraised values after the erroneous deductions by Mr. Basso. When a taxpayer desires to utilize some innovative and creative method for the valuation of real property, the taxpayer has the burden to establish that the method which they have devised has been recognized and accepted for the appraisal of real property. No such showing was made on this record. The averaging of sales prices or appraised values by the Assessor is a faulty procedure and is not recognized or accepted for appraisal of property before the Commission. Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers (1982), p. 159.

This method like the first is nothing more than an averaging technique. Under this procedure the percentage of total increase in appraised values between the 2001 and 2003 assessment cycles for seven properties was calculated. This was based on the average appraised value for 2001 and 2003, and the average amount of change for the seven properties. From this Mr. Basso calculated the average percentage of change in appraised value (8.80%) and then applied it to the 2001 appraised value for the subject property. This produced an indicated value of $304,640.

This method suffers from the same fatal defects as Method 1. It is based upon appraised values, not values established by substantial and persuasive evidence to be fair market values. It does nothing more or less than average appraised values. Averaging of appraised values has no more evidentiary benefit than averaging sales prices. This is not a recognized appraisal methodology. It therefore has no probative value before the Commission.

The third method put forth by the Complainant is a further variation of an averaging procedure. However, it is just as flawed and defective as the other two methods which the Complainant developed. For this method, Mr. Basso made a comparison between the average sales prices and average appraised values as shown on the Assessor=s records for three different groups of properties. The three groups of properties were (1) properties listed on the assessment notice for 1520 Timberlake Manor Parkway; (2) properties listed on the assessment notice for 1590 Timber Manor Parkway - subject); and (3) properties used as comparables in Exhibit 1).

Mr. Basso calculated that the average percentages of difference between the Assessor=s appraised value and the actual sales price for these three groups of properties were: (1) -10.55%; (2) - 4.65%; and (3) -10.48%. In other words, the appraised value shown by the Assessor=s records showed an reduction from the actual sale price of the individual comparables. Mr. Basso then a calculated that the 10 properties utilized in groups 1 and 2 were reduced an average of 7.41% from their sale prices. He applied this to the indicated value determined in Exhibit 1 of $330,000 to arrive at a value of $305,547.

Here again, this procedure for valuation was not shown to be a method which has ever been recognized by courts, by the Commission or by the appraisal industry. In point of fact, it has never been so recognized. It is a totally improper process for the valuation of real property. It is not a mechanism for valuation which is based upon proper appraisal elements or a proper appraisal foundation. Accordingly, it has no probative value in this appeal.

Exhibits A, B, C and D were all excluded because none of the documents reflect an appraisal methodology that is recognized and accepted for the valuation of real property by the courts of this state, the Commission or the appraisal industry. Since the documents reflect what are clearly unacceptable theories for valuation they have no relevance as evidence of fair market value. Nothing in Complainant=s testimony establish the requisite foundation to establish relevance for the documents to be received as evidence.

An appraisal opining a market value for the appropriate tax date made by a state certified appraiser is admissible into evidence provided the appraiser is present to testify as to his or her appraisal and be cross-examined and the appraisal is performed at a time relevant to the valuation date of January of the given tax year. The appraisal report (Exhibit E) proffered by Mr. Basso was excluded because the appraiser was not present to testify as to the document. It is also noted, that Mr. Basso did not agree with the opinion of value of Mr. LeGrand of $315,000.

The appraisal report is clearly hearsay, as it is offered to prove the true of what it asserts and the declarant (appraiser) of the statement of value was not present to testify at the evidentiary hearing. Without the appraiser present to testify as to the appraisal it must be excluded from evidence upon the objection of Respondent=s Counsel. The requirement that an appraiser must appear to testify and be subject to cross-examination is a requirement that is made known to taxpayers during the appeal process before the Commission.

Each taxpayer appealing to the Commission is provided a pamphlet of instructions relative to the appeal process - Property Tax Appeals Before The State Tax Commission of Missouri, Revised April, 1999 (Appeal Pamphlet). On pages 8 and 9 of the Appeal Pamphlet taxpayers are clearly instructed as follows:

AIf you wish to have an appraisal report introduced into evidence it will be necessary for the appraiser to be present to testify and be cross-examined. If the appraiser is not present at the Evidentiary Hearing, the appraisal report cannot be received into evidence.@

Furthermore, it is the practice of the Hearing Officer during the prehearing conference to remind taxpayers of this requirement, especially if the Hearing Officer has information that the taxpayer has an appraisal report or will be obtaining an appraisal report. At the prehearing conference that was held on December 11, 2003, the Hearing Officer recalls suggesting to Complainant that getting an appraisal on his property would be a good idea and reminding the Complainant of the requirement of having an appraiser present to testify at the evidentiary hearing if the appraisal was going to be presented.

Counsel for Respondent=s objection was sustained on the grounds of hearsay and failure to present the appraiser for cross-examination. Ms. Lemerman did present testimony by her witness which established that one of the comparables used by Mr. LeGrand (Comparable 1) was not an appropriate to be considered as a market transaction for use in an appraisal. This casts doubt on the usefulness of the opinion of value of $315,000 presented in the appraisal report. Without comparable 1, it would appear that an indicated value closer to the value of $330,000 opined by Respondent=s appraiser would be supported by Exhibit E.

Complainant Fails To Prove Discrimination

Where there is a claim of discrimination based upon a lack of valuation consistency, Complainant has the burden to prove the level of assessment for the subject property for 2003. 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.

Once the level of assessment as a percentage of true value in money has been established by Complainant, it is then the Complainant=s burden to establish the average level of assessment for residential property in St. Louis County for 2003. In order to meet this evidentiary burden, the Complainant must (a) independently determine the market values of a representative sample of residential properties in St. Louis County; (b) determine the assessed values placed on the representative sample properties by the assessor=s office for the relevant year; (c) divide the assessed values by the market values to determine the level of assessment for each property in the sample; and (d) determine the mean and median of the results of the total sample.

In order to establish the claim of discrimination, 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.

Mr. Basso essentially was claiming discrimination because the percentage of increase in appraised value for the subject property from the 2001 assessment cycle was 20.18%. The percentage increase from one assessment cycle to the next has no relevance on the issue of fair market value. Such percentage increases do not establish that the value set by the Assessor in the prior cycle was correct, nor that the value set for the current cycle is correct. A calculation of the percentage increase only establishes a percentage increase. It does not establish fair market value.

Complainant=s discrimination claim fails because he failed to establish the market value of the subject property. Without establishing the subject=s market value, the assessment ratio cannot be established. Without establishing the ratio for the property under appeal, it cannot be establish that the subject property is being assessed at a higher percentage of market value than the average of residential properties in St. Louis County.

However, even if Complainant had established the market value for the subject property, the discrimination claim would still fail because it was 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 the subject property. Complainant=s claim of discrimination is based upon the average percentage increase in value from the 2001 assessment cycle to the 2003 assessment cycle for twenty-six properties for which the Complainant failed to establish the market value for any of the properties. No evidence was presented that established that the twenty-six properties are being assessed at a rate lower than the statutory assessment ratio of 19% for residential property.

Complainant failed to establish that any of the twenty-six properties were undervalued so as to render their true assessment ratio at some percentage other than 19%. All that Complainant established was the average percentage increase of the Assessor=s appraised value on the properties for 2001 and 2003 and the percentage of increase for each property. Complainant=s argument is that his property=s appraised value increased by 20.18% from one assessment cycle to the next and that the average percentage increase for the various groupings of the twenty-six other properties was not this great. This is not sufficient to establish an intentional plan by the Assessor to assess the subject property at a greater ratio of fair market value than the average ratio for residential property in St. Louis County. In short, the Complainant=s methodology to establish a case for discrimination is not recognized under the case law of Missouri as an appropriate manner in which to establish a statistically significant disparity in the subject=s assessment ratio that is grossly excessive in comparison to the average residential assessment in St. Louis County.

Complainant also asserted that because the four properties utilized by Respondent=s appraiser had been given an appraised value in the Assessor=s record at an average of 10.48% less than their sale price that he was being discriminated against, because his property was not being reduced in value from that proposed by Mr. Froeckmann by a factor of 10.48%. This again is not a recognized methodology to establish, fair market value or discrimination. The apparently undervaluing of the four comparable properties used in Respondent=s appraisal is not sufficient to establish that the average level of assessment in St. Louis County is not 19% as established by law.

Because Complainant=s proffered evidence failed to establish the market value of the subject property and failed to establish the property under appeal as being assessed at a higher percentage of market value than a statistically significant number of other properties in St. Louis County, he failed to establish discrimination.

The evidence presented by the Respondent established by substantial and persuasive evidence the fair market value of the subject property. Mr. Froeckmann utilized a recognized and accepted appraisal approach to arrive at an indicated fair market value. The sales comparison approach to value, in the absence of a recent sale of the subject, is the strongest of the three recognized approaches to value for an appraisal problem that is presented in the present case. The existence of good sale properties to utilize for comparison give substantial and persuasive weight to this methodology.

The fact that the net percentages of adjustment were in such a tight range (1.22% to 9.04%) provides a sound basis for making a determination of value based on this evidence. In particular Comparable 4 only required an adjustment to account for the subject having one more bedroom than this comparable. All other amenities were identical to the subject, thus no other adjustments were required.

The opinion of value presented by Respondent=s appraiser of $330,000 is well supported by the sales comparison analysis to be the fair market value of the subject property as of January 1, 2003.

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Louis 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 $62,700.

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 May 14, 2004.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Hearing Officer

ORDER

On May 14, 2004, Hearing Officer W. B. Tichenor entered his Decision and Order (Decision) setting aside the assessment by the St. Louis County Board of Equalization which had sustained the Assessor=s valuation and finding fair market value of $330,000.

Complainant filed his Application for Review of the Decision on May 19, 2004.

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).

The Commission will not lightly interfere with the Hearing Officer=s Decision and substitute its judgment on the credibility of witnesses and weight to be given the evidence for that of the Hearing Officer as the trier of fact. Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Lowe v. Lombardi, 957 S.W.2d 808 (Mo. App. W.D. 1997); Forms World, Inc. v. Labor and Industrial Relations Com=n, 935 S.W.2d 680 (Mo. App. W.D. 1996); Evangelical Retirement Homes v. STC, 669 S.W.2d 548 (Mo. 1984); Pulitzer Pub. Co. v. Labor and Indus. Relations Commission, 596 S.W.2d 413 (Mo. 1980); St. Louis County v. STC, 562 S.W.2d 334 (Mo. 1978); St. Louis County v. STC, 406 S.W.2d 644 (Mo. 1966).

A review of the record in the present appeal provides support for the determinations made by the Hearing Officer. There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer. A reasonable mind could have conscientiously reached the same result based on a review of the entire record. The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or capricious manner or abused his discretion as the trier of fact and concluder of law in this appeal. Hermel, Inc. v. STC, 564 S.W.2d 888 (Mo. 1978); Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Holt v. Clarke, 965 S.W.2d 241 (Mo. App. W.D. 1998); Smith v. Morton, 890 S.W.2d 403 (Mo. App. E.D. 1995). Phelps v. Metropolitan St. Louis Sewer Dist., 598 S.W.2d 163 (Mo. App. E.D. 1980).

Complainant=s letter setting forth his Application for Review is nothing more than a rearguing of the positions offered by Complainant at the evidentiary hearing. Complainant disagrees with the conclusions reached by the Hearing Officer. However, Complainant failed to set forth any legal claim or basis as a ground to find the Hearing Officer had abused his discretion or acted in an arbitrary or capricious manner. Complainant simply has an opinion as to the fair market value of the property different from that determined by the Hearing Officer. In other words, Complainant failed to state specific legal grounds upon which it was claimed the decision was erroneous. In the absence of specific facts of error or specific errors in applying the law, the Application for Review must be summarily denied.

Complainant contests the exclusion of the exhibits offered at the evidentiary hearing. Counsel for Respondent properly raised her objections. It was the responsibility of the Hearing Officer to rule on those objections. The Hearing Officer sets out in more than sufficient detail in his Decision (See, Decision, pp. 18-20) the basis for his rulings to exclude the various exhibits. It serves no useful purpose for the Commission to simply restate those ruling. The Commission finds no basis upon which the rulings on objections should be overturned. Accordingly, those rulings are affirmed.

The Hearing Officer went into a very detailed analysis and explanation as to why each of the three methods of valuation presented by Complainant were in error. (See, Decision, pp. 13-18). Specifically, methods of comparative assessment are not recognized within the appraisal industry, by the Courts of Missouri or the Commission as proper approaches to determining value. The Commission finds no basis upon which the Hearing Officer=s conclusions on this point should be overturned. Accordingly, the Hearing Officer=s conclusions as to the lack of any probative value of Complainant=s theories of value are affirmed.

As to Complainant=s claim of discrimination, this point is not well taken. The Hearing Officer=s discussion and analysis relative to the requirements for presenting a claim of discrimination are totally and completely in line with the applicable case law. There is nothing in the Hearing Officer=s detailed explanation of why Complainant=s discrimination claim failed that is contrary to well established legal precedent controlling claims of discrimination in the valuation of real property. As the concluder of law on this issue, the Hearing Officer did not err in any of his conclusions. Complainant failed to carry his burden of proof on the claim of discrimination.

The Decision of the Hearing Officer presents a detailed and well reasoned conclusion of fair market value based upon substantial and persuasive evidence. The rulings made in response to properly raised objections to the admissibility of evidence were not in error, but properly applied rules of evidence for a hearing before the Commission. The conclusions of law relative to the failure of Complainant=s claim of discrimination were proper and well supported by the applicable case law on this subject. The Hearing Officer did not err in his determinations as challenged by Complainant.

The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified. Accordingly, the Decision is affirmed.

Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo within thirty days of the date of the mailing of this Order.

SO ORDERED June 18, 2004.

STATE TAX COMMISSION OF MISSOURI

Sam D. Leake, Chairman

Bruce E. Davis, Commissioner