In the Missouri Court of Appeals Western District CATHY RINEHART, ASSESSOR ) CLAY COUNTY, MISSOURI, ) ) WD83105 Appellant, ) ) OPINION FILED: August 18, 2020 v. ) ) LACLEDE GAS COMPANY, ) ) Respondent. )
Appeal from the Circuit Court of Clay County, Missouri The Honorable Kathryn E. Davis, Judge
Before Division Three: Gary D. Witt, Presiding Judge, Lisa White Hardwick, Judge and Thomas N. Chapman, Judge
Cathy Rinehart, Assessor of Clay County, Missouri, ("Assessor") appeals from the
Circuit Court of Clay County's judgment affirming the State Tax Commission's
("Commission") Order finding the true value in money ("TVM")1 of Laclede Gas
Company's ("Laclede")2 personal property was $7,100,000.00 in 2014, and $8,900,000.00
1 "True value in money is the fair market value of the property on the valuation date, and is a function of its highest and best use, which is the use of the property which will produce the greatest return in the reasonably near future." Snider v. Casino Aztar/Aztar Mo. Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005) (quoting Aspenhof Corp. v. State Tax Comm’n, 789 S.W.2d 867, 869 (Mo. App. E.D. 1990)). 2 Laclede has since been acquired by Spire Missouri, Incorporated, but we refer to it as Laclede for continuity and convenience. in 2015. The Commission determined the assessed value of Laclede's personal property
was $2,366,667.00 in 2014 and $2,966,667.00 in 2015. The Commission also found the
TVM of Laclede's real property was $52,500,000.00 in 2015, and its real property's
assessed value was $16,800,000.00 in 2015.3 We reverse and remand.
Factual and Procedural Background
Laclede is a utility company that provides natural gas service throughout Missouri
by means of gas service lines, mains, and other facilities, and it is regulated by the Federal
Energy Regulatory Commission ("FERC") and the Missouri Public Service Commission
("PSC"). Laclede reports the cost of its assets to the PSC, which impacts the rate Laclede
charges its customers for its service.
In September 2013, Laclede purchased both real and personal property from
Missouri Gas Energy ("MGE") located in Clay County, Missouri.4 Its real property
consists of underground pipes and gas mains of varying ages, materials, and sizes, and its
personal property consists of meters and regulators. Laclede's property also includes new
assets that are being constructed and assets that are provided by others to assist in
construction and expansion of Laclede's gas distribution system. A dispute arose between
the Assessor and Laclede as to the proper TVM of Laclede's real and personal property
located in Clay County.
3 The assessed value of Laclede's real property in Clay County for the 2014 tax year is not at issue in this appeal. 4 Laclede also purchased property located in Platte County, Missouri. The Commission consolidated appeals from Clay County and Platte County in the underlying matter. However, the Platte County Assessor did not appeal the Commission's decision, therefore the assessed value of Laclede's personal and real property located in Platte County is not at issue in this appeal.
2 Lindsay Link ("Link"), a Laclede accountant, prepared Laclede's tax declarations
using Laclede's Fixed Asset Record, which is filed with the PSC and audited by an outside
accountancy firm. The Fixed Asset Record contains the vintage year,5 FERC account
number, location of property within Clay County, and the original cost of all property.
However, the Fixed Asset Record does not include all of Laclede's real and personal
property because the PSC does not assess rates based on construction work in progress and
assets used during construction. Link determined that prior to Laclede's purchase, MGE
had improperly included its meter installation costs in its personal property tax
declarations, which resulted in the over-valuation of MGE's personal property.
Rochelle Lafave, Director of Personal Property for the Assessor, disagreed with
Laclede's personal property tax declarations and calculated the TVM of Laclede's personal
property utilizing MGE's 2012 personal property tax declarations. Gary Maurer
("Maurer"), a general appraiser for the Assessor, disputed Laclede's real property tax
declarations. Maurer determined a gas line's life expectancy to be between 50 and 75 years,
and Maurer applied a 70-year depreciation schedule to Laclede's assets. Maurer testified
that in calculating the TVM of Laclede's real property, he used 1997 as the vintage year of
all property installed before 1997 because the data provided by Laclede to the Assessor did
not include any vintage years for property installed before 1997.6 Maurer acknowledged
that the inaccurate vintage years would affect the depreciation schedule and therefore result
in a higher assessed value for the older personal property.
5 The vintage year is the year the pipe was placed into service. 6 It is unclear from the record, which appraisal approach Maurer used in calculating the TVM of Laclede's real property.
3 Laclede's declared TVM and the Assessor's TVM were as follows:
2014 Personal 2015 Personal 2015 Real Laclede's Declaration $6,200,000 $6,400,000 $38,000,000 Assessor's TVM $11,300,000 $11,100,000 $79,200,000
Laclede appealed the Assessor's valuations to the Clay County Board of Equalization
("Board"). The Board adopted the Assessor's valuations. Laclede appealed the Board's
valuations to the Commission, and this appeal was heard by a Senior Hearing Officer on
March 29, 2017, and March 30, 2017.
At the hearing, the Assessor called Mika Koyama ("Koyama"), a Systems and
Standards Analyst for the Assessor's Office, to testify as an expert as to her valuations of
Laclede's real and personal property. Koyama utilized the Unit Value Method7 using the
cost approach in calculating Laclede's TVM. Koyama determined that Laclede purchased
MGE for $975,000,000 and she subtracted the value of MGE's intangible assets,
$370,000,000, from the sales price for a total value of the property being $605,000,000.
She then determined that 14% of MGE's assets were located in Clay County. Koyama
applied a fifty-year depreciation schedule with a 20% floor. Ultimately, Koyama
determined the TVM of Laclede's personal property to be $12,000,000 for both 2014 and
2015, and the TVM of Laclede's real property to be $73,763,600 for 2015.
7 The Unit Value Method "is an appraisal technique that produces a valuation of a whole property without geographical or functional division of the whole. This technique is most applicable in the valuation of public utility and railroad properties in which the operating property of the business enterprise in its entirety is valued as a unit. After the unit value is determined, each taxing jurisdiction is apportioned or allocated the portion of the unit value applicable to the amount of distributable property contained therein." ASSESSOR MANUAL, Appendix (Mo. State Tax Comm'n 2020).
4 Laclede called Robert Reilly ("Reilly") as its expert witness, and Reilly calculated
Laclede's property value utilizing the Unit Value Method using the cost approach, the
income approach, and the comparable market approach, giving 40% weight to the cost
approach, 40% weight to the income approach, and 20% weight to the comparable market
approach. Reilly calculated the total unit value was $1,280,000,000 (cost approach);
$1,110,000,000 (income approach); and $1,350,000,000 (comparable sales approach).
Applying his assigned weights, Reilly calculated the combined total unit value was
$1,226,000,000.
From the total unit value, Reilly subtracted the total value of financial assets and
intangible assets ($310,000,000) for an adjusted total unit value of $916,000,000. Reilly
calculated that the property located within Clay County was 5.3% of the total unit value
for a sub-unit value of $48,500,000. He then found that 14.6% of the sub-unit value
comprised Laclede's personal property ($7,100,000) and 85.4% of the sub-unit value
comprised Laclede's real property ($41,400,000).
The Commission summarized the relevant valuations as follows:
2014 Personal 2015 Personal 2015 Real Laclede's Declaration $6,200,000 $6,400,000 $38,000,000 Assessor's TVM $11,300,000 $11,100,000 $79,200,000 Board's TVM $11,300,000 $11,100,000 $79,200,000 Reilly's Testimony $7,100,000 $8,900,000 $52,500,000 Koyama's Testimony $12,000,000 $12,000,000 $73,800,000
On September 6, 2017, the Hearing Officer entered his Decision and Order
("Decision"), affirming the Board's TVM. Laclede appealed to the Commission, and on
August 7, 2018, the Commission entered an Order Setting Aside Hearing Officer Decision
5 upon Application for Review ("Order") adopting the valuations set forth by Reilly. The
Commission determined Laclede's TVM and Assessed Value as follows:
2014 Personal 2015 Personal 2015 Real Commission's TVM $7,100,000 $8,900,000 $52,500,000 Commission's $2,366,667 $2,966,667 $16,800,000 Assessed Value
On September 5, 2018, the Assessor filed a Petition for Review in the Circuit Court
of Clay County. The circuit court conducted a hearing on July 12, 2019, and entered its
Judgment affirming the Commission's Order on August 2, 2019. This appeal timely
followed.
Standard of Review
"On an appeal from a judgment of a trial court addressing the decision of an
administrative agency, we review the decision of the administrative agency and not the
judgment of the trial court." Union Elec. Co. v. Estes, 534 S.W.3d 352, 365 (Mo. App.
W.D. 2017) ("Estes") (quoting Rinehart v. Bateman, 363 S.W.3d 357, 362-63 (Mo. App.
W.D. 2012)). "This court reviews the decision of the [Commission] and not the hearing
officer[.]" Rinehart, 363 S.W.3d at 363 (quoting Cohen v. Bushmeyer, 251 S.W.3d 345,
350 n. 4 (Mo. App. E.D. 2008).8 "Notwithstanding, in our mandate, we reverse, affirm or
8 In Rinehart, we reviewed the Commission's decision together with the hearing officer's order because the Commission had incorporated the entirety of the decision of the hearing officer into its order. 363 S.W.3d at 363 (citing Loven v. Greene Cnty., 94 S.W.3d 475, 477 (Mo. App. S.D. 2003); Peruque, LLC v. Shipman, 352 S.W.3d 370, 374 (Mo. App. E.D. 2011)). The Assessor argues that in the instant case the Commission incorporated the Hearing Officer's Decision and Order, and as a result we should consider both the Commission's Order and the Hearing Officer's Decision and Order. However, the Commission expressly stated: "Segments of the Decision and Order of the Hearing Officer, including the findings of fact and conclusions of law therein, have been incorporated without reference, as if set out in full, in this final decision of the [Commission]." (emphasis added). Because only segments of the Hearing Officer's Decision and Order were incorporated into the Commission's Order, and because the Hearing Officer and the Commission reached different outcomes our review is limited to the Commission's Order.
6 otherwise act upon the judgment of the trial court." Estes, 534 S.W.3d at 365 (quoting
Rinehart, 363 S.W.3d at 363). We must determine "whether the [Commission's] findings
are supported by competent and substantial evidence on the record as a whole; whether the
[Decision and Order] is arbitrary, capricious, unreasonable or involves an abuse of
discretion; or whether the [Decision and Order] is unauthorized by law." Id. (quotation
omitted). However, "we review the [Commission's] conclusions of law and its decision de
novo, and we make corrections to erroneous interpretations of the law." Id. (quotation
omitted). "Whether the appropriate standard of value and approach to valuation were
properly applied under the particular facts and circumstances of the case is a question of
law." Id. (quoting Snider v. Casino Aztar/Aztar Mo. Gaming Corp., 156 S.W.3d 341, 346
(Mo. banc 2005)).
Discussion
The Assessor raises one point on appeal asserting that the Commission erred in
setting aside the Board's valuations because Laclede failed to meet its burden of proof to
present substantial and persuasive evidence to rebut the presumption of correct assessment
by the Board in that the evidence of TVM produced by Laclede failed to properly apply
accepted appraisal methodologies. Laclede first argues that the General Assembly
legislatively abolished the rebuttable presumption that the Board's valuations are correct,
and even if the presumption persists Laclede met its burden to rebut them. Therefore, we
must first determine whether the 1992 legislative amendments abolished the presumption
in favor of boards of equalizations' valuations.
7 I. The legislative amendments to section 138.431 preserved the presumption in favor of the Board's valuations.
While no statute establishes the rebuttable presumption that the boards of
equalizations' valuations are correct, historically the judiciary has recognized a rebuttable
presumption that the assessments of county assessors, boards of equalization, and the
Commission are correct. State ex rel. Thompson v. Bethards, 9 S.W.2d 603, 604 (Mo. banc
1928) ("The presumption that such added valuation is the true value attaches just as well
to the action of the state board of equalization and county board of equalization as it does
to the valuation of the assessor."); May Dep't Stores Co. v. State Tax Comm'n, 308 S.W.2d
748, 759 (Mo. 1958) ("There is a presumption of validity and of good faith in the actions
of taxing officials, and of the correctness of assessments[;] and such presumptions attach
to the actions of the county and state boards of equalization, as well as to the valuations of
assessors.") (internal citations omitted); State ex rel. Kahler v. State Tax Comm'n, 393
S.W.2d 460, 465 (Mo. 1965) (holding that presumption that county boards of equalization's
assessments are valid is rebuttable); Quincy Soybean Co., Inc. v. Lowe, 773 S.W.2d 503,
504 (Mo. App. E.D. 1989) ("A presumption exists that the assessed value fixed by the
assessor, [b]oard of [e]qualization, or commission is correct."). Because "[t]he legislature
is presumed to know the law that has been amended, and to have used particular words in
light of prior judicial and legislative action," we presume the legislature knew that
valuations by assessors, boards of equalization, and the Commission were presumed to be
correct. State v. Davis, 675 S.W.2d 410, 415 (Mo. App. W.D. 1984) (citing City of St.
Joseph v. Hankinson, 312 S.W.2d 4, 8 (Mo. 1958)). In 1992 the legislature amended
8 sections 138.060.1 and 138.431.39 RSMo. Cum. Supp. 1992 to insert the language: "There
shall be no presumption that the assessor's valuation is correct."
Laclede argues that because the legislature abolished the presumption in favor of
the Assessor's valuation that when the Board sustained the Assessor's valuation, the
practical effect of the amendment to 138.431.4 was to abolish the presumption in favor of
the Board's valuations. We disagree. "In matters of statutory interpretation, this Court's
role is to ascertain the intent of the legislature from the language used and to consider the
words used in their ordinary meaning." Macon CT. Emergency Servs. Bd v. Macon Caty.
Comm'n, 485 S.W.3d 353, 355 (Mo. banc 2016). "Where a statute's language is clear,
courts must give effect to its plain meaning and refrain from applying the rules of
construction unless there is some ambiguity." St. Louis CT. v. Prestige Travel, Inc., 344
S.W.3d 708, 714 (Mo. banc 2011) (quoting Ross v. Dir. Of Revenue, 311 S.W.3d 732, 735
(Mo. banc 2010)). Moreover, "[t]his Court will not add words to a statute under the auspice
of statutory construction" strict or otherwise. Li Lin v. Ellis, 594 S.W.3d 238, 242 (Mo.
banc 2020) (quoting Macon, 485 S.W.3d at 355). Interpreting section 138.431.4, while
giving its terms their plain and ordinary meaning, we find that the legislature abolished the
rebuttable presumption in favor of the assessor's valuations but left the rebuttable
presumption in favor of valuations by boards of equalization and the Commission intact.
If the legislature wished to eliminate the rebuttable presumption in favor of the boards of
equalizations' or commission's valuation, it knew how and chose not to do so.
9 In 1992, the amendment adding the relevant language was made to subsection 3 of 138.431. Subsequent amendments to the statute moved the relevant language of subsection 3 to subsection 4.
9 Laclede further argues that because section 138.431.4 provides authority for the
Commission to review the Board’s valuation rather than the Assessor's valuation that the
legislature's failure to abolish the presumption in favor of the Board would render the
legislative amendment a useless act. We disagree. "When the legislature amends a statute,
it is presumed that its intent was to bring about some change in the existing law." Kolar v.
First Student, Inc., 470 S.W.3d 770, 777 (Mo. App. E.D. 2015). "This Court should never
construe a statute in a manner that would moot the legislative changes, because the
legislature is never presumed to have committed a useless act." Id. "To amend a statute
and accomplish nothing from the amendment would be a meaningless act." Id. The board
of equalization conducts an independent review of the assessors' valuations, and therefore,
they are separate and distinct valuations even if they ultimately find the assessor's valuation
to be persuasive. Furthermore, while county assessors do not have standing to appeal the
boards of equalizations' valuations, O'Flaherty v. State Tax Comm'n of Mo., 680 S.W.2d
153, 154 (Mo. banc 1984), nothing precludes a county assessor from presenting evidence
of its initial valuation to the Commission when a taxpayer appeals a board of equalization's
valuation. Therefore, the legislative amendment abolishing the presumption in favor of the
county assessor's valuation was not a meaningless act, as the assessor's valuation may be
presented at any stage of the appeals process. In reviewing the board of equalizations'
valuation, the Commission may consider the assessor's initial valuation, but, after the 1992
statutory amendment, the Commission can no longer apply a rebuttable presumption that
the assessor's initial valuation was accurate. Therefore, the Commission was obligated to
give the Board's valuation a presumption of validity.
10 II. Laclede successfully rebutted the presumption that the Board's valuations were presumed to be correct.
Having found that there is a rebuttable presumption that the Board's valuations are
correct, we must now determine whether the Commission's Order finding that Laclede
overcame this presumption is supported by substantial and competent evidence. Estes, 534
S.W.3d at 365. "Substantial evidence is evidence that if true has probative force; it is
evidence from which the trier of fact reasonably could find the issues in harmony
therewith." Preston v. Dir. of Revenue, 202 S.W.3d 608, 609 (Mo. banc 2006). Laclede
argues that the Board's valuations were rebutted because the Board failed to properly
account for depreciation in arriving at its valuations.
In Estes, we reversed the Commission's determination of the TVM of Ameren
Missouri's, a regulated public utility, natural gas pipeline within the county, because the
Commission did not account for depreciation. Estes, 534 S.W.3d at 377. The Commission
affirmed the assessor's valuations, which had been sustained by the board of equalization.
Id. at 376. We held that "[d]epreciation must be considered when valuing property using
the reproduction cost approach." Id. (citing Stephen & Stephen Props., Inc. v State Tax
Comm'n, 499 S.W.2d 798, 803 (Mo. 1973) ("Whenever consideration is given to the cost
of reproduction as an element in the determination of market value, it is recognized that a
proper deduction must be made for depreciation." (internal quotation omitted)). Because
the board of equalization had not considered any depreciation we found the Commission's
adoption of those valuations was "unlawful and unfair." Id.
11 Although, in the instant case, the Assessor accounted for some, but not all,
depreciation, we similarly find the Commission's valuations unlawful and unfair.
Specifically, Maurer testified regarding the methodology he used in establishing the
Assessor's values as follows:
[Counsel]. Did you use a placed in service date of 1997 for all of Laclede's real property?
[Maurer]. Not a year – by the way you're stating it, yes, but it's incorrect.
Q. Okay. What's incorrect about it?
A. That figure is – that year is – when it was cut off of the MACRS[10] schedule and also what they turned in, Laclede dropped – started dropping off in 1997. It should have continued down to 1950 on all of their stuff. They didn't do it so I can only go with what I've got from Laclede.
Q. So for a pipe with a vintage of 1960 –
A. It's included in that 1997. Laclede did that. 'Cause you'll notice it says 1997 or prior in their figures.
...
Q. And would that have resulted in a lower assessed value?
A. I'm sure it would.
While the initial information provided to the Assessor by Laclede failed to provide the
vintage years for certain personal property such as pipelines that were placed in service
before 1997, the record demonstrates that Laclede provided the Assessor with an amended
list of property with the correct vintage years when Laclede became aware that the Assessor
10 MACRS is the modified accelerated cost recovery system, which is a depreciation schedule contained in the Internal Revenue Code in 26 U.S.C. § 168 (2018). The Assessor, Koyama, and Reilly each used MACRS in calculating Laclede's depreciation, which is consistent with State Tax Commission Guidance. See, Union Elec. Co. v. Adams, 539 S.W.3d 779, 783 (Mo. App. E.D. 2017).
12 did not have the proper vintage years for all of its property. The Assessor, and the
Assessor's experts failed to amend the valuation based on this information prior to the
Board's hearing.
The Assessor admitted that she did not properly apply the depreciation schedule,
even though she had the necessary information to properly make those calculations, and
this resulted in a higher assessed value. This admission renders the Assessor's valuations
unreasonable, and therefore the Board’s adoption of those valuations unreasonable. "It is
important for the assessor to arrive at a reasonable level of depreciation." See Estes, 534
S.W.3d at 358 (citing ASSESSOR MANUAL, VII-7.4-1 (Mo. State Tax Comm'n, Feb. 5,
2015)). On these specific facts, we find that the Board erred in sustaining the Assessor's
initial valuation because the Assessor unreasonably failed to consider and properly
calculate depreciation based on the vintage years of the property. Therefore, Laclede
produced substantial and competent evidence from which the Commission could find the
presumption that the Board's valuations are correct was rebutted.
This does not end the inquiry however, because Laclede not only has the burden to
demonstrate the Board's valuations are incorrect, Laclede also has the burden to establish
the value that should have been placed on the property. Snider, 156 S.W.3d at 346; Tibbs
v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 7 (Mo. App. S.D. 2020).
13 III. Laclede did not provide substantial and competent evidence to establish the TVM of its personal and real property because the Commission adopted Reilly's valuation, which incorporated the cost approach, the comparable sales approach, and the income approach.
"Determining value is an issue of fact for the Commission[; h]owever, 'whether the
appropriate standard of value and approach to valuation were properly applied under the
particular facts and circumstances of the case is a question of law," which we review de
novo. Union Elec. Co. v. Adams, 539 S.W.3d 779, 782 (Mo. App. E.D. 2017) ("Adams")
(quoting Aspenhof Corp. v. State Tax Comm'n, 789 S.W.2d 867, 869 (Mo. App. E.D.
1990)). "For purposes of levying property taxes, the value of real property is typically
determined using one or more of three generally accepted approaches." Snider, 156 S.W.3d
at 346. "These three approaches include the cost approach, the comparable sales approach,
and the income approach (also known as income capitalization)." Tibbs, 599 S.W.3d at 8
(citing Snider, 156 S.W.3d at 346-48; Mo. Baptist Children's Home v. State Tax Comm'n.,
867 S.W.2d 510, 511 n.3 (Mo. banc 1993)).
However, in 2013, the Commission mandated that assessors use the reproduction
cost approach to value natural gas pipeline companies’ real and personal property. Estes,
534 S.W.3d at 367; Adams, 539 S.W.3d at 783. Similarly, the Commission continued to
mandate the use of the reproduction cost approach for tax years 2014 and 2015. See Estes,
534 S.W.3d at 358 (citing ASSESSOR MANUAL, VII-7.4-1 (Mo. State Tax Comm'n, Feb. 5,
2015)). Also, section 137.122 requires assessors to use the reproduction cost approach for
business personal property in use after January 1, 2006. Consistent with Estes and Adams,
14 we hold that the Commission is obligated to use the reproduction cost approach in the
instant case.11
In Adams, the assessor combined, "income, market, and cost 'new' approaches—
every possibility except the original (historical) cost approach mandated by the
Commission for the year in question" to calculate the value of a natural gas distribution
company. 539 S.W.3d at 783. The court reversed and remanded the matter back to the
Commission to apply the "proper methodology as prescribed by Commission publications
in effect for the relevant period." Id. at 784. Similarly here, the Commission adopted
Reilly's valuations, and because Reilly combined income, market, and cost approaches, we
find the Commission failed to follow its own mandate. Therefore, we must reverse and
remand for a determination of TVM by properly applying the reproduction cost approach
as mandated by Commission publications for the 2014 and 2015 tax years.
Laclede further argues that this Court lacks authority to determine which approach
the Commission should adopt. See Hermel, Inc. v. State Tax Comm'n, 564 S.W.2d 888,
896 (Mo. banc 1978) ("[I]t is not within the purview of this court to determine the method
of valuation to be adopted by the commission"). But, in accord with Hermel, Inc., we are
not determining the method of valuation to be adopted by the Commission, instead we
11 Laclede argues that the Commission did not require the reproduction cost approach method for public utility property citing a string of cases where alternative valuation methods were used. However, because these cases precede the Commission's 2013 mandate, we do not find them persuasive. See Bussman Div. of Cooper Indus./McGraw Hill v. State Tax Comm'n, 802 S.W.2d 543 (Mo. App. E.D. 1991) (1986 tax year); Harrah's Md. Heights v. Zimmerman, 2014 WL935759 (Mo. State Tax Comm'n) (2011 and 2012 tax years); Doe Run Co. v. Holman, 1999 WL1253948 (Mo. State Tax Comm'n) (1997 tax year).
15 merely hold that the Commission must follow the rules that it has adopted and use the
reproduction cost approach.
Laclede also asserts the proper methodology is the Unit Value Method. See Iron
Mountain Trap Rock v. Ward, 2015 WL7294788 (Mo. State Tax Comm'n) (approving use
of the Unit Value Method to value a quarry). This is an issue that is best determined by
the Commission. Lebanon Props. I. v. North, 66 S.W.3d 765, 767 (Mo. App. S.D. 2002)
("Ascertainment of proper methods of valuation is delegated to the [C]omission.") (citing
C & D Inv. Co. v. Bestor, 624 S.W.2d 835, 838 (Mo. banc 1981)). Because the
reproduction cost approach does not preclude the application of the Unit Value Method,
we leave it to the Commission to determine whether the Unit Value Method is appropriate
in this case and whether it has been properly applied.12
Furthermore, Laclede asserts that Koyama's methodology was fundamentally
flawed rendering her report "unreliable and the valuations therein not indicative of the
TVM of Laclede's property." Similarly, the Assessor argues that Reilly's methodology is
not founded on reliable appraisal methods. Our Supreme Court "has acknowledged 'the
wisdom of the General Assembly in providing an administrative agency to deal with this
specialized field." Savage v. State Tax Comm'n, 722 S.W.2d 72, 75 (Mo. banc 1986)
(internal quotation omitted). We are "loathe to substitute [our] judgment for the expertise
of the Commission in matters of property tax assessment." Id. However, "[o]nce the
commission decides to use a particular [valuation] approach, it must apply that approach
12 We note that both Koyama and Reilly (in part) utilized the Unit Value Method combined with the cost approach in reaching their conclusions.
16 properly and consider all of the factors relevant to that approach." Estes, 534 S.W.3d at
370 (quoting Snider, 156 S.W.3d at, 348).
Conclusion
The judgment of the circuit court affirming the Commission's Decision and Order
is reversed. This matter is remanded to the Circuit Court of Clay County for remand to the
Commission to calculate, in a manner consistent with this opinion, the TVM of Laclede's
real and personal property in service in Clay County as of January 1, 2014 and January 1,
2015 through use of the reproduction cost approach.
Gary D. Witt, Judge
All concur