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3M proposes compromise in property value appeal
By Rusty Murry
Nevada Daily Mail
The largest employer in the area, 3M, has challenged the $11,068,020 appraised value of its property in Nevada and later proposed a settlement to resolve the situation. On Tuesday, representatives of the Vernon County taxing entities affected -- the city of Nevada, Nevada R-5 School District, Vernon County Health Department, Vernon County Ambulance District, Vernon County and Center Township -- met and agreed to send a counteroffer back to 3M.
The 2011 appraisal was submitted by Vernon County Assessor Cherie K. Roberts and 3M's appeal has gone to the Missouri State Tax Commission, where a hearing both 3M and Vernon County appear to want to avoid is slated for Aug. 22.
Along the way, both parties had independent appraisers determine a value for the property, in addition to Roberts' initial appraisal.
3M hired the Appraisal and Consulting Services Co. of Kansas City, Mo. Appraiser Thomas H. Slack valued the property at $3.2 million. On behalf of Vernon County, Roberts hired R J Wood and Associates of Nevada; and their appraisal, conducted by Ricci Wood, valued the commercial property at $11 million.
In 2006, the value was $11,120,400. It was $10,787,200 in 2007 and frozen there until the county-wide re-assessment in 2011.
3M appealed to the county Board of Equalization, which "did a 'no change'" according to Roberts. The next step in the appeal process the three person State Tax Commission; hence the Aug. 22 hearing.
Roberts said that July 23, she received a letter from 3M's real estate counselor, Anna C. Zanko, stating "In light of the significant time and expense associated with litigating such matters, we wanted to take this opportunity to reach out to you and propose a settlement in compromise." 3M proposed an "annual market value" for the property of $9 million for 2011, $8 million for 2012, $7 million for 2013 and $6 million for 2014.
Roberts said she tried to contact 3M last week but got a "voicemail." She spoke with them on July 30 and said, "we could not do what they had proposed," noting she is prohibited "by statute" from dealing with the future years' appraisal.
"They sent another proposal on July 31," containing different figures, she said. The new offer proposed values to be set at $8.5 million for 2011-'12 and at $6.5 million for 2013-'14. "I don't think they got the picture that I couldn't deal with 2013 and 2014, that I just want to deal with 2011, which would also be for 2012."
On Tuesday, July 31, Roberts gathered representatives from those taxing entities in the county to apprise them of the situation.
If Roberts' figure of slightly more than $11 million is used, the total tax would be slightly more than $220,129. At $3.2 million, the county treasurer would receive $56,285 and some change to distribute. For example, the Nevada R-5 School District, which receives approximately 60 percent of the taxes, would be given $132, 783.54 if the value were $11 million, but only $32,364 if the value used is $3.2 million. Amounts for other taxing entities vary.
Roberts said she knows every penny counts in these tough times.
Roberts said the new offer was "only good through Aug. 3," so if you want to say no, we're going to go with the $11 million."
She cautioned them that colleagues in the field advise against going forward with tax commission hearings. Roberts said the decision of the commission can be appealed and could go as far as the Supreme Court.
Roberts said, "This is your money, I'm here working for you. I want to know what you all feel comfortable with."
Roberts reiterated she thought the $3.2 million figure was unfair. "When it comes to your homes and businesses, I try to be as fair as possible, and I want to be fair with 3M also, they're our largest employer."
Vernon County Treasurer Phil Couch said you always hear that they will pull out. "You don't want them to pull out," he said, but "you're talking about a $200,000 tax bill. They might save a minimum of $60,000. They can't leave a facility like that for $60,000."
City Manager J.D. Kehrman said he believes "Going to the hearing is a big mistake." He noted that Boone County has a colorful history with 3M. They've moved operations in and out based on similar disagreements.
"Boone County has a diverse tax base and can afford to fight them. I don't know that we can." Kehrman also said that given the company's 40-year history in the county and 600 jobs, he thought the $3.2 million figure was a "first volley" and said Roberts had done a good job deflecting that and staying with the original appraisal. Kehrman said he thinks the present offer is their real offer and that a counter offer should be made based on that.
Kehrman said, "the value of the jobs to the economy here would have to be measured over the last 40 years and the next 40 years in the hundreds of millions of dollars." He also said the attorney and appraiser going before the tax commission are experts at dealing with them and "I don't expect to do very well if we take it to hearing."
"What's the consensus of the group," Roberts said, "go with a counter offer?" Nevada R-5 Superintendent David Stephens said, "from the school's perspective," he wasn't comfortable with either offer partly because of the amount and the 2013-'14 issue. We've already started to dance with them when we started this process, so we're not going to get out of the dance, so I think we should go with a counter offer for 2011-2012."
All present agreed on that course of action and agreed to write letters in support of Roberts and the decision which were to be sent with a counter offer, the terms of which are undisclosed.
Couch said 3M has already paid the 2011 tax "in protest" and his office is holding the $220,129.80 in a special account until the matter is resolved and funds distributed accordingly.
Contacted on July 31, Zanko said 3M was "not prepared to comment" on the situation.