State Tax Commission of Missouri
EVERETT & DONNA KROEGER, )
)
Complainants, )
)
v. ) Appeal Number 05-72500
)
JEROME OVERKAMP, ASSESSOR, )
)
Respondent. )
DECISION AND ORDER
HOLDING
Decision of the Montgomery County Board of Equalization sustaining the assessment made by the Assessor, AFFIRMED, true value in money for the subject property for tax years 2005 and 2006 set at $176,000 ($126, 200 – Residential; $49,800 Agricultural), assessed value of $29,960 ($23,980 – Residential; $5,980 – Agricultural).
Complainants appeared pro se.
Respondent appeared pro se.
Case heard and decided by Hearing Officer, W. B. Tichenor.
ISSUE
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2005, specifically the true value in money of the residential portion of the Complainants’ property.
SUMMARY
Complainants
appeal, on the ground of overvaluation, the decision of the Montgomery County
Board of Equalization, which sustained the valuation of the subject
property. The Assessor determined an
appraised value of $176,000 ($126, 200 –
Residential; $49,800 Agricultural), assessed value of $29,960 ($23,980 – Residential; $5,980 – Agricultural).. Complainant proposed a value of $160,900 ($111,100 – Residential; $49,800 –
Agricultural), assessed value of $27,090
($21,110 – Residential; $5,980 –
Agricultural). A hearing was
conducted on December 21, 2005, at the Montgomery County Courthouse,
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Complainants’ Evidence
Complainants offered into evidence Exhibit A. Exhibit A consisted of
(1) a copy of a letter dated September 12, 2005 in which Complainants set out the basis for their claim that the residential value of their property could not have increased due to the impact of a confined swine feeding operation (Cherry Patch Pork, Inc.) located adjacent to the subject property.
(2) a drawing showing the location of the Complainants’ property in relation to the swine facility.
(3) a copy of a letter dated July 12, 2002 from Harold J. Bax, Professional Engineer setting out the location and capacity of the swine feeding operation, and a narrative summary of the design of the facility.
Exhibit A was received into the record.
Complainants testified as to the negative impact on their property due to the odor resulting from the methane gas which is generated by the waste from the swine facility contained in a lagoon located approximately 500 years from Complainants’ home.
Respondent’s Evidence
Respondent offered into evidence Exhibit 1. Exhibit 1 was Respondent’s valuation document. Exhibit 1 consisted of the following:
(1) an index of individual documents contained in Exhibit 1 and a summary statement as to the valuation process utilized by the Assessor.
(2) 2 photographs of Complainants’ home (1-A & 1-B).
(3) map of subject neighborhood (1-C).
(4) aerial photograph of subject neighborhood (1-D).
(5) Property Record Card on Complainants’ property (1-E).
(6) Property Record Card on Cherry Patch Pork, Inc. property (1-F).
(7) Property Record Card on Lansche property (1-G).
(8) Property Record Card on Merz property (1-H).
(9) Property Record Card on Cobb property (1-I).
(10) Property Record Card on Staten property (1-J).
(11) Property Record Card on Houf property (1-K).
(12) Property Record Card on Honerkamp property (1-L).
Exhibit 1 was received into evidence. Respondent testified as to the assessment of Complainants’ property. Respondent concluded that there was no market data from the subject’s general neighborhood and area from which any type of discount in value could be determined to be applied to Complainant’s valuation.
FINDINGS OF FACT
1. Jurisdiction over this appeal is proper. Complainants timely appealed to the State Tax Commission from the decision of the Montgomery County Board of Equalization.
2. The subject property is located at
3. There was no evidence of new construction and improvement from January 1, 2005, to January 1, 2006.
4. Complainants did not challenge the agricultural valuation of the property. Complainants only challenged the valuation of the residential portion of the property (half acre and the house).
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, 2005, to be $111,100.
6. The Cherry Patch Pork operation contains approximately 7,000 hogs at any one time. Exhibit A, Testimony of Complainants.
CONCLUSIONS
OF LAW AND DECISION
Jurisdiction
The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious. Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo. The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Section 138.431.4, RSMo.
Presumptions
There is a
presumption of validity, good faith and correctness of assessment by the
The Supreme
Court of Missouri has held, “A tax assessor’s valuation is presumed
correct.” Donna Snider v. Casino
Aztar/Aztar Missouri Gaming Corp., SC86181, 3/01/2005. Citing to Hermel, supra; and Cupples
Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (
The
presumption of correct assessment is rebutted when the taxpayer presents
substantial and persuasive evidence to establish that the assessor’s or Board’s
valuation is erroneous and what the fair market value should have been placed
on the property. Snider, Hermel &
Cupples Hesse, supra.
Standard for Valuation
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 (
Market Value
Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.
Implicit in this definition is the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:
1. Buyer and seller are typically motivated.
2. Both parties are well informed and well advised, and each acting in what they consider their own best interests.
3. A reasonable time is allowed for exposure in the open market.
4. Payment is made in cash or its equivalent.
5. Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
6. The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.
Real Estate Appraisal Terminology, Society of Real Estate Appraisers, Revised Edition, 1984; See also, Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers, 1982, pp. 4-5; Property Appraisal and Assessment Administration, International Association of Assessing Officers, 1990, pp. 79-80; Uniform Standards of Professional Appraisal Practice, Glossary.
Complainants’ Burden of Proof
In order to
prevail, Complainants must present an opinion of market value and substantial
and persuasive evidence that the proposed value is indicative of the market
value of the subject property on January 1, 2005. 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 (
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
Complainants offered an opinion of value of $111,100. This was the previous value which the Assessor had placed on the residential portion of the property in the 2003 assessment cycle. It was the contention of Complainants that the residential portion of their property could not have increased in value in the last two years. This argument was based upon the negative impact upon Complainants’ home from the Cherry Patch Pork feeding operation. No valuation evidence was presented by Complainants which would support a finding of fair market value as they proposed.
It is not disputed that Complainants’ property suffers from the negative impact of the odor being generated from this confined feeding operation. The subject home is uniquely situated due to the existence of the Gaining Tributary which runs from a Northwesterly to Southeasterly direction along the northern side of the swine facility to the southern side of Complainants’ home. Although no actual sewage is flowing down this creek, the odor of the methane gas produced at the lagoon which services the feeding operation does come down the creek so that Complainants’ home is impacted in a negative manner as is no other home in the area. The net effect due to the topography of the area is that the Tributary serves as a path or funnel to allow the odor of the methane to travel down the approximately 1,600 feet to Complainants backyard. This results in Complainants being deprived of the ordinary outdoor use of their home site.
The facts of this case present an unusual and difficult valuation problem. The negative impact of the methane odor is not questioned. However, there is no market data from which the Assessor could derive any sort of factor upon which he could base a discounting of the value which he determined utilizing the Hunnicutt Cost system and market sales to support his valuation of the Complainants’ home site. The data demonstrates that homes continue to be purchased, built or upgraded in the neighborhood (Exhibits 1-G thru 1-L). However, none of these properties are situated just as is the Kroeger home.
There is no evidence in the record whereby the Hearing Officer can make an adjustment for the negative impact from swine operation. The value of $126,200 placed on the residence may well be the fair market value taking into account its unique location. It would be mere speculation and conjecture for the Hearing Officer to apply a discount factor of 12% as advocated by Complainants ($126,200 - $111,100 = $15,100/$126,200 = .12).
Complainants’ testimony while clearly establishing that their home is impacted by odor from the feeding operation, does not provide substantial and persuasive evidence as to its fair market value. Accordingly, Complainants have failed to meet their burden of proof and the assessment made by the Assessor and sustained by the Board of Equalization must be affirmed.
ORDER
The assessed
valuation for the subject property as determined by the Assessor and sustained
by the Board of Equalization for
The assessed value for the subject property for tax years 2005 and 2006 is set at $29,960 ($23,980 – Residential; $5,980 – 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 2000.
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 Montgomery 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 20, 2006
STATE TAX COMMISSION OF
_____________________________________
W. B. Tichenor
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 20th day of January, 2006 to: Everett Kroeger, 346 Gouldman Road, Montgomery City, MO 63361, Complainant; Kelly Broniec, Prosecuting Attorney, 211 E. Third St., Montgomery City, MO 63361, Attorney for Respondent; Jerome Overkamp, Assessor, 310 Salisbury, Suite B, Montgomery City, MO 63361; Pam Cartee, Clerk, 211 E. Third St., Montgomery City, MO 63361; Anita Sullivan, Collector, 211 E. Third St., Montgomery City, MO 63361.
___________________________
Barbara Heller
Legal Coordinator