ROY W. & ARLINE M. AGNEW,	)
	)
Complainants,	)
	)
v.	)		Appeal Number 03-12056
	)
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 $391,900, assessed value of $74,440.

Complainant, Roy W. Agnew, Jr., 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) whether there was an intentional plan of the assessing officials to assess the subject property at a ratio greater than the average assessment ratio for residential property within St. Louis County; and (3) whether 4.28 acres should be classed as Grade 7 agricultural land.

Complainants appeal, on the ground of overvaluation, discrimination and misclassification, 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 $478,900 (assessed value of $90,990, as residential property). Complainant proposed a value of $219,650 (assessed value of $41,702) on the Complaint for Review of Assessment and $290,000 at the evidentiary hearing. A hearing was conducted on May 6, 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. He offered an opinion of value of $290,000 for the subject three acre residential tract with improvements at the evidentiary hearing. The following exhibits were received into evidence.

Exhibit A Letter dated July 10, 2003 from Complainant to Board of Equalization setting for information as to the valuation of the subject property.

Exhibit D 2003 Change of Assessment Notice on the subject property.

Exhibit E Valuation Comparison Data compiled by Complainant.

Exhibit F Photographs of a property used by the County=s mass appraisal system and photographs of items of deferred maintenance on the subject house.

Exhibit G Bids for repairs to the subject house.

Exhibit B (Copy of STC Decision in appeal 93-10113) and Exhibit C (Documents on Forest Stewardship Program) were marked for identification but withdrawn.

Respondent placed into evidence the testimony of Mr. Arthur R. Froeckmann, State Certified Residential Real Estate 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 residential portion of the subject property of $391,600 based upon a sales comparison approach to value. In performing his sales comparison analysis, the appraiser relied upon the sales of three properties which he deemed to be comparable to the subject property.

1. Jurisdiction over this appeal is proper. Complainants 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 17373 Orrville Road, Wildwood, Missouri. The property is identified by locator number 20V440180. The property consists of 7.28 acres improved by a two-story brick and vinyl-sided single-family frame structure of average quality construction. The residential portion of the subject property is a 3 acre tract. The house was built in 1970 and appears to be in average condition. The residence has a total of ten rooms, which includes four bedrooms, three full and one half baths, and contains 3,364 square feet of living area. There is a 1,774 square foot basement with no finished area. There is an attached two-car brick sided frame garage and a detached two-car garage. There was no listing or sale of the property noted within three years prior to the tax date of January 1, 2003. The house has an open front porch, concrete patio below a rear wood deck, and in-ground swimming pool, and a blacktop driveway.

The subject has both a septic tank and a private well that are typical of the market area and does not adversely affect marketability. The driveway shows age and cracking. It is currently in use with no obvious immediate necessity of replacement. The wood deck moves slightly when walked on apparently due to improper anchoring to the house. The house suffers from peeling paint on exterior trim. Exhibit 1, p. 5.

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

4. The parties stipulated at the evidentiary hearing that 4.28 acres of the subject tract should be valued as agricultural grade 7 land at a value of $75 per acre and assessed at the agricultural rate of 12%. The value of the 4.28 acres was agreed on as $300, with an assessed value of $40 (4.28 x 75 = $321, rounded to $300; $300 x .12 = $36, rounded to $40).

5. 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 $290,000, for the residential portion of the subject property.

6. The properties relied upon by Respondent=s appraiser in performing his appraisal were comparable to the subject property for the purpose of making a determination of value of the subject property. The properties were located within 2.5 miles 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.

7. The comparables were described as follows:

Comparable 1 (1403 Shepard Road - .8 of a mile Southeast of the subject) sold in December 2002 for $400,000. This property consists of 6.89 acres improved by a two-story brick and frame single-family structure of average quality construction. The house was built in 1972 and appears to be in average condition. The residence has a total of ten rooms, which includes five bedrooms, four full and one half baths, and contains 3,241 square feet of living area. There is a full basement, which has 600 square feet of finished area. There is an attached three-car garage. The house has a frame porch, deck, patio, stoop and there is a detached 25 x 30 foot barn. There was no reported significant deferred maintenance.

Comparable 2 (18020 Babler Woods Road - 1.3 miles West of the subject) sold in June 2002 for $378,500. This property consists of 4.94 acres improved by a two-story brick and frame single-family structure of average quality construction. The house was built in 1983 and appears to be in average condition. The residence has a total of eight rooms, which includes four bedrooms, two full and one half baths, and contains 3,916 square feet of living area. There is a full basement, which has no finished area. There is a two-car basement garage. The house has a small open frame porch, patio, and there is a detached frame shed. There was no reported significant deferred maintenance.

Comparable 3 (1606 Horseshoe Ridge Road - 2.5 miles Northeast of the subject) sold in March 2002 for $420,000. This property consists of 2.69 acres improved by a two-story brick and frame single-family structure of good quality construction. The house was built in 1977 and appears to be in average condition. The residence has a total of seven rooms, which includes four bedrooms, two full and one half baths, and contains 2,758 square feet of living area. There is a full basement, which has no finished area. There is an attached two-car garage. The house has a open frame porch, deck, patio and in-ground pool and hot tub. There was no reported significant deferred maintenance.

8. 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.

9. The net adjustments for Comparable 1 amounted to -$8,900 or 2.23% of the sales price. The net adjustments for Comparable 2 amounted to +$13,200 or 3.49% of the sales price. The net adjustments for Comparable 3 amounted to -$25,800 or 6.14% of the sales price.

10. The adjusted sales prices for the comparables calculated to $391,100, $391,700 and $394,200, respectively. The appraiser concluded on a $391,600 value which calculated to a value per square foot of $116.41 compared with the sales prices per square foot of living area for the comparables of $123.42, $96.65 and $152.28.

11. 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.

12. Respondent=s evidence met the standard of substantial and persuasive to establish the value of the subject, as of January 1, 2003, to be $391,600, assessed value of $74,400 for the residential portion of the subject property.

13. The total fair market value of the subject tract as of January 1, 2003 is $391,900 ($391,600 residential and $300 agricultural graded land), assessed value of $74,440 ($74,400 residential and $40 agricultural assessment).

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, 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.

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).

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).

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).

In order to obtain a reduction in assessed value based upon discrimination, the Complainants must (1) prove the true value in money of their property on January 1, 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 Corporation v. State Tax Commission, 329 S.W.2d 696 (Mo. 1958).

Mr. Agnew, on his Complaint for Review of Assessment, put forth an opinion of value on the residential portion of his property of $219,650. His Exhibit A had a concluded value of $219,582. The information contained in Exhibit A appears to be an attempt to perform a cost approach, since Mr. Agnew arrived at an opinion of land value and then an opinion of improvement value and combined the two. Neither of the opinions of value were based on an approach recognized and accepted by the Courts of Missouri or by the Commission. Furthermore, the methodology set forth in Exhibit A does not constitute an appraisal of property that is generally accepted within the appraisal industry. Accordingly, Complainant=s did not present substantial and persuasive evidence to establish the fair market value of their property.

Mr. Agnew=s theory of value first established a land value for his three acre residential tract of $66,000. Mr. Agnew calculated the average per acre land value for the five properties used by the County=s computer assisted mass appraisal system to be $23,886. He made a 10% deduction to the per acre value of one of the properties due to it being served by Laclede Gas, which the subject is not. However, there is no basis in the evidence to establish any experience, training and education of Mr. Agnew that would qualify him as an expert in appraisal for the making of such an adjustment. This produced an average per acre value of $22,837. Using this amount the indicated land value should be $68,500 ($22,837 x 3 = $68,511, rounded to $68,500) not $66,000.

Mr. Agnew also used the land values shown in the Assessor=s records for five other properties. The average land value per acre for these five properties was $25,014, which would have produced an indicated value for the subject=s three acre tract of $75,042 ($25,014 x 3 = $75,042). Here again, the Complainant extracted from this that the subject three acre tract should only be valued at $66,000. However, no explanation as how an average of $25,014 should be adjusted down to only $22,000 was provided.

This technique of arriving at land value is simply not appropriate. Mr. Agnew is assuming that the per acre value of land assigned to each of the five properties by the Assessor establishes the fair market value of his three acre tract. Since there is no presumption that the Assessor=s value is correct, it is inappropriate to rely upon those values. Furthermore, the averaging of values is not proper. The averaging of sales prices 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. Irrespective of whether the values to be averaged are actual sales prices or appraised values assigned by the Assessor under his mass appraisal system, it is a faulty technique to average such values.

Proper Method to Establish Vacant Land Value

The proper way to establish land values if one is doing a cost approach, as apparently Mr. Agnew was attempting to do, is to do a sales comparison of vacant land sales. It would have been necessary for Mr. Agnew to establish from three or more sales of reasonably similar vacant tracts of land the value of his land if it were unimproved. This was not done. Accordingly, the conclusion of value by Mr. Agnew that the land value for the subject land should be $22,000 per acre is not supported by any relevant evidence on that point. Therefore, the attempted cost approach to value which Mr. Agnew sought to develop fails on the most basic and fundamental element - the land value.

The Complainant in Exhibit A makes the claim that the 3 acre residential portion of his land would have an indicated value of $60,513 per care after making an adjustment for the 4.28 acres of agricultural graded land. This indicated value was based on the calculation that the subject land was valued at $24,959 per acre by the Assessor or $181,700 for 7.28 acres. Mr. Agnew asserted that the 4.28 acres should be valued as agricultural graded land at $160. He then subtracted the $160 from the $181,700 to arrive at $181,540 or $60,513 per acre for the three acre tract.

This calculation is seriously flawed, because in order to arrive at an accurate per acre value for the 3 acre portion of his land, it is necessary to subtract the original per acre value of $24,959 from the $181,700 for the 4.28 acres which would be valued as agricultural graded land. When this calculation is made - $24,959 x 4.28 = $106,825; $181,700 - $106,825 = $74,875/3 = $24,958 - the per acre value for the three acres is not $60,513 as claimed by Mr. Agnew, but it is only $24,956, just below the average of the comparables offered by Mr. Agnew and just slightly above the average of the comparables shown on Mr. Agnew=s Notice of Change in Assessment for 2003. Accordingly, the claim that the subject=s three acre residential site is valued at 200% per acre greater than the appraised value of the highest comparable shown on the Notice of Change is simply not correct. In point of fact, the subject=s per acre appraised value under these calculations is 17% less than the highest comparable on the Notice of Change and only 4.5% higher than the average of the properties listed on the Notice of Change.

The next step which Mr. Agnew took in developing his theory of value was to attempt to arrive at a value for the subject=s improvements. For this valuation exercise, he calculated the average per square foot living area value for improvements for the five properties shown on the Change Notice to be $71.10. He also made certain adjustments and then calculated the average to be $69. The average per square foot of living area appraised value shown on the Assessor=s records for the five comparables listed by the Complainant was calculated to be $71.54, which Mr. Agnew then adjusted to $68.76.

Mr. Agnew did not demonstrate sufficient training, experience and education in appraisal of real estate to qualify him as an expert. Accordingly, there is no basis upon which the various adjustments which he put forth in Exhibit A can be accorded any weight or relevance. When a taxpayer attempts to perform an appraisal in a case before the Commission, they are not permitted to make such an attempt and be free of meeting basic requirements to establish their asserted expertise. Without establishing the basis and foundation as an expert in appraisal, any alleged adjustments made to sales prices, or averages calculated from appraised values have no probative weight or value.

Mr. Agnew then applied a per square foot value of $61.76 to arrive at an indicated value for the subject improvements of $207,760. However, no explanation was provided in Exhibit A as to why the $61.76 figure was used instead a figure of $69, $68.76, $71.10 or $71.54. Complainant then further subtracted a total of $54,278 based on estimates to take care of various items of deferred maintenance to the subject property. This deduction was improper and not based upon good appraisal practice. Within the appraisal industry, it is generally well accepted that costs for repairs and updates will seldom, if ever return dollar for dollar the actual cost. The value which is added to a property will be something less than the actual cost in most instances. The market will recognize some additional value, but rarely the entire actual cost. Furthermore, the appropriate methodology for what is essentially an adjustment for condition is to make that adjustment to the individual sales comparables, not to an indicated value calculated in the manner performed by Mr. Agnew.

This method, like with the land value method, suffers from the use of an averaging of appraised values. This is not an accepted and recognized procedure for arriving at the contributory value of improvements to real estate. Had Mr. Agnew desired to actually perform a legitimate cost approach, he would have needed to have establish from a recognized methodology the actual cost to replace his home and its supporting amenities as of January 1, 2003. He would then have need to apply appropriate depreciation relying on a recognized methodology to arrive at a cost to replace less depreciation. If he had so calculated this and had properly arrived at a land value based upon actual market data of vacant land sales, he would have had an indicated value under a cost approach to value.

Since Mr. Agnew did not properly perform a cost approach and since his methodology for value is not in accordance with any recognized appraisal theory, his opinion of value of $219,650 is not based upon proper elements and a proper foundation. Therefore, it can be given no weight or probative value. As to his opinion of value of $290,000 offered at the evidentiary hearing, there is no evidence upon this record whereby the Hearing Officer finds any substantiation or support for that value. Even in his summary calculations provided in Exhibit E, Mr. Agnew asserted that his assessed value should be no more than $64,52 for the residential portion of his property. This calculates to an indicated true value in money of $337,115 which is totally contrary to his claim of a value of only $290,000.

Complainants attempted to establish a fair market value based upon their own theory of appraisal. 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. Complainants= theory was nothing more than calculating of various averages from the Assessor=s appraisal data. This is a system of valuation which is totally and completely flawed. It is not sufficient to meet the burden of proof to present substantial and persuasive evidence of the opinion of value offered.

Complainants Fail To Prove Discrimination

Where there is a claim of discrimination based upon a lack of valuation consistency, Complainants have the burden to prove the level of assessment for the subject property in 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.

The Complainants must then establish the average level of assessment for residential property in St. Louis County in 2003. This is done by (a) independently determining the market value of a representative sample of residential properties in St. Louis County; (b) determining the assessed value placed on the property by the assessor=s office for the relevant year; (c) dividing the assessed value by the market value to determine the level of assessment for each property in the sample; and (d) determining the mean and median of the results. The difference between the actual assessment level of the subject property and the average level of assessment for all commercial property, taken from a sufficient representative sample in St. Louis County must demonstrate a disparity that is grossly excessive. Savage v. State Tax Commission of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986).

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. Louis County are being assessed at a lower ratio of market value than their property.

Complainants= claim of discrimination is based upon a mathematical analysis developed by Mr. Agnew. See, Exhibit E. Mr. Agnew calculated the percentage change in assessed values for the five sale properties which were initially used for the computer assisted mass appraisal of the subject property. The percentage change for both assessed land and assessed improvement values were calculated. These calculations demonstrated that for the five sale properties which the computer selected to originally value the subject property the land values of those comparables increased in a range from 29% to 75% from the 2001 assessment to the 2003 assessment. The calculations for the assessed values for improvements on the five properties showed that those values had decreased in a range from 9% to 41%.

Mr. Agnew then calculated the total assessed value percentages of change for the five properties from 2001 to 2003. These changes fell in a range from down by 20% to up by 4.3%. Calculations were also made for five other properties which the Complainant offered as his own comparables. These five properties had total assessed value changes from 2001 to 2003 falling in a range from down by 12% to up by 8.9%.

The mathematical calculations performed by Mr. Agnew appear to be correct. However, they are simply irrelevant to establish a claim of discrimination. It doesn=t matter how correct the math is if the calculations have no bearing on the elements necessary to establish a case for discrimination. The theory which Complainant=s advanced begins from a seriously faulty premise. That premise is that the appraised values established by the Assessor in both 2001 and 2003 on the subject property, the five comparables used by computer mass appraisal system and the five comparables selected by Mr. Agnew are in fact the fair market values of those properties. By statute there is no presumption that those values are correct. Therefore, relying on them is in error.

Mr. Agnew did not establish that the appraised values determined by the Assessor on the various properties used in his discrimination analysis were in fact the fair market values of the various properties. If it is assumed that they did represent correct fair market values, then from Mr. Agnew=s own documents (Exhibit E), it is established that the Assessor assessed each of the ten comparable properties for both 2001 and 2003 at 19% of their appraised (fair market value) as is required by law for residential property. Therefore, once the fair market value of the subject is established it would have to be assessed at 19% of that value both by law and to be consistent with the assessment ratio which Mr. Agnew established by his evidence.

The discrimination theory of Mr. Agnew is also fatally flawed due to the fact that a total of ten residential properties is not sufficient to establish that this is a statistically significant representative sample of residential properties in St. Louis County. Evidence of value and assessments of a few properties does not prove discrimination. The properties used by the Complainants all come from a very small area of St. Louis County. Eight of the properties have a Chesterfield mailing address and the other two have a Glenco mailing address, however all ten of the properties used by Mr. Agnew in his discrimination analysis have the same city code (107) and the properties only come from four different taxing districts. This falls totally short of establishing the necessary sampling from across and throughout St. Louis County of residential properties required to meet the criteria for a claim of discrimination.

Often taxpayers want to refer to the percentage of increase from one assessment cycle to the next both as a means to attempt to establish fair market value and also to prove discrimination. However, the percentage of increase on any given property or on groups of properties does not establish an intentional plan by the Assessor to assess one property at a greater ratio of fair market value than another property. Percentages of increase are generally very appealing to taxpayers because that is something that is both easy to calculate and easy to understand. If certain properties only increase on the average of a certain percentage and the taxpayer=s property has increased at a percentage greater than the average, it is assumed that this establishes discrimination or unequal treatment.

This simply is not the case. There may be any number of reasons why the percentage of increase of various properties are different from one assessment cycle to the next. Several important things need to be remembered. As noted above, there is no presumption that the Assessor=s value is correct. Therefore to compare the value from one cycle to the next means nothing, since either one or both of the appraised values might not represent true value in money (fair market value) and that is the critical element in the assessment process.

It should also be considered that average changes are not representative of the change in value for a given property that is under appeal before the Commission. An average is an average. When addressing the fair market value of a given property for a given assessment cycle the important matter, in point of fact, the only issue is fair market value. The issue is never what percentage did the subject increase in comparison to one, ten or even 100 other properties. As appealing as it is to make the simple mathematical calculations, they neither prove value or discrimination.

Because Complainants have failed to establish the market value of their property and have failed to establish that they are being assessed at a higher percentage of market value than a statistically significant number of other properties in St. Louis County, they have failed to establish their claim of discrimination. In short, the theory of discrimination put forth by Complainants did not satisfy the case law which has been established as to the method and manner for proving a claim of unequal assessment.

Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2003, to be $391,600 for the residential portion of the subject. Respondent=s appraiser developed an opinion of value relying upon an established and recognized approach for the valuation of real property - the sales comparison or market approach. The sales comparison approach is generally recognized to be the most reliable methodology to be utilized in the valuation of single family residences.

The adjustments made the Mr. Froeckmann were consistent with generally accepted guidelines for the appraisal of property of the subject=s type. The adjustments properly accounted for the various differences between the subject and each comparable. The net adjustments to the sale properties fell within a very narrow range from 2.23% to 6.14%. Even the gross adjustments were in a very acceptable range from 9.28% to 16.71%.

Mr. Froeckmann properly accounted for the fact that Comparable 3 was of superior quality of construction than the subject. He also accounted for the fact that this comparable was in a superior location to the subject. Comparables 1 and 2 being of the same quality of construction required not adjustment for this fact. Furthermore, the fact that all three comparables were accounted to be in the same general condition for homes of their age as the subject, no adjustment was necessary for the items of deferred maintenance noted on the subject. The various items noted by both Mr. Froeckmann and Mr. Agnew are certainly consistent with a home of the age of the subject.

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

The assessed value for the subject property for tax years 2003 and 2004 is set at $74,440 ($74,400 - Residential and $40 - agricultural).

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