OSAGE COUNTY — The Osage County Board of Equalization (BOE) convened in Osage County Commission Chambers at 9 a.m. Monday, July 15. While the BOE meeting once a year is routine, this event quickly became anything but. It’s been years since the BOE has been required to arbitrate an Osage County Assessment, but this time, they did.

BOE members Osage County Commissioners Darryl Griffin, Larry Kliethermes, and John Trenshaw, Osage County Surveyor Tim Hamburg, and at-large members Irene Werdehausen and John Deeken fielded an appeal from the Westphalia Retirement Center. The institution objected to a serious increase in this year’s assessment. That resulted in a tax bill almost double what it was in 2023. Owned by the Lierman Family, they were represented by Attorney Jeff Hunt, assisted by Appraiser Jeff Johnson. “I don’t think it’s very fair,” said Hunt. “It’s kind of a surprise.”

The appeal was spurred by a spike in the facility’s assessed valuation from $2.58 million in 2023 to $4.66 million in 2024. That resulted in a real estate tax bill of $44,350, up from $24,550.

As Osage County Assessor Tina Kammerich and the appellants exchanged information, three factors seemed to emerge, driving the sharp increase. First, the facility built in 1993 underwent an addition in 2003. That addition was never reported on an assessment form. Nor was it discovered by the Assessor’s Office until this year. Sources of this negligence have long since left both the business and the County Assessor’s Office. Second, depreciation numbers and methods differed between the two parties. Finally, the most significant driver of difference was a change in software. The change initiated by Kammerich in recent months exposed that her old program was using an obsolete assessment formula.

“This problem should have been addressed years ago,” said Kammerich. “I understand they didn’t own it in 2003. Nobody can give me the square footage in 1993.”

Fully representing and sympathetic to his client, Hunt observed, “It [almost] doubled from 2023 to 2024. There’s been no new construction [in that time frame]. That was done long before we bought the building. I don’t think it’s correct to do it that way.”

Hunt went on to say his clients felt the increase was punitive.

BOE members nonetheless set themselves to finding the correct valuation for the present time. They didn’t feel free to regard where it’s been in the past other than understanding the jolt. Johnson presented his appraisal, obtained on behalf of the Westphalia Retirement Center. He explained how he came to his conclusion from three different angles — replacement cost, diminished by depreciation, recent sales comparison, and the value of the business. He immediately discounted, though, the last two numbers. In his opinion, they supported his final conclusion, but “there aren’t enough sales of nursing homes to hang your hat on that,” he explained.

His final sum was $2.6 million, close to the number his client wanted to emerge from the proceeding. “I think that’s very supportive of your previous evaluation,” he concluded. “The [almost] doubled value seems like an unwarranted increase. You may not be using the same amount of depreciation as I did. That would account for the difference.”

“This seems to boil down to a disagreement on depreciation figures,” Trenshaw observed.

However, after crunching the numbers, that theory seemed to fade, at least in the eyes of BOE members.

The discussion shifted to the change in assessment software. There, the meeting uncovered some serious differences. Kammerich was able to calculate the assessment using the old system. That discovered a higher number but not nearly the same percentage. It came to $3,124,500. It’s also representative of the old system’s inadequacy. It did not keep up with the value of real estate in rural Missouri.

Kammerich explained that she had no choice when the new system was purchased. The provider of the obsolete system had provided no new updates in years. It was about to get to where they could provide no support at all. Obsolescence was extreme. The formula programmed into it was prominent in causing the county to fall way behind. Missouri’s assessed valuation standards ran far ahead of it. Kammerich had intended to fully implement the new formula in 2025, the beginning of a new two-year reassessment cycle. The discovery of the unmapped 2003 addition allowed her to reassess the retirement center this year. However, the mid-cycle adjustment suddenly came front and center in the discussion. Abandoning it seemed to be the middle ground. It showed sympathy for the shock experienced by retirement center representatives. It also acknowledged Kammerich’s need to push her assessments closer to the required territory.

Considering the figure obtained using the old formula, “I think that’s fair for this year,” said Kliethermes.

“I think it’s low, but I understand the process,” Werdehausen agreed.

“We’re so far behind what the state recommends,” lamented Trenshaw, nevertheless agreeing to go along with the other members’ sentiment.

Kammerich immediately provided a new document based on the $3,124,500 assessment. She will completely implement the new formula with the new software next year. The Westphalia Retirement Center emerged with a BOE-decided estimated tax bill of about $29,700. “I’ll have to talk to the client,” said Hunt, refusing to commit the Lierman Family’s consent.

They could risk appealing to the state of Missouri, but that’s the source of pressure for county assessors to increase their valuations.