Alberta county accepts $8.5M settlement offer over new building with structural problems

Lac Ste. Anne County has accepted an $8.5-million offer to settle its lawsuit against companies involved in the design, engineering, project management and construction of its troubled administration building.

The northwestern Alberta county announced Tuesday that its council voted last month to accept a settlement offer in a $10-million lawsuit it had launched against Colliers Project Leaders, A&E Architectural and Engineering Group, Casman Building Solutions, Arrow Engineering, Roterra Piling and P. Machibroda Engineering Ltd.

Council voted to take the $8,456,000 settlement during a closed-door portion of its regular council meeting on Dec. 15.

In a news release, the county said it will invest the money in a high-interest savings account while examining options for the building.

"I think at the end of the day, the outcome is a lot better than it could have been," Reeve Joe Blakeman told CBC News in an interview Wednesday.

He said lawyers recommended accepting the offer and he and his colleagues decided to do so because pursuing the lawsuit would take years, with no guarantees of winning.

The county is not releasing further details about the settlement, such as which companies are contributing to the offer and how much each is paying.

"All we got was a final number and a recommendation," Blakeman said.

None of the companies named in the statement of claim have responded to CBC's requests for comment.

Lac Ste. Anne County has a population of more than 11,000. The towns of Mayerthorpe and Onoway fall within its boundaries.

With a budget of $11.7 million, most of it from grants, the county decided in 2015 to replace its aging office building with a new administration building in the hamlet of Sangudo, 120 kilometres northwest of Edmonton.

Problems from the start

According to a previous news release from the county, slab heaving and drywall cracking were observed when the 27,000-square-foot building was being completed in 2017.

Geotechnical experts investigated and linked the problems to moisture changes in the clay soil under the building.

The county followed experts' recommendations to regrade and redirect surface water, but the building kept moving so it then hired structural engineers to investigate.

In May last year, the county announced its decision to replace the administration building, saying in a news release that repairing it was neither feasible nor reasonable.

Blakeman said Wednesday the building design was more of a problem than the soil composition.

"The most disappointing thing is there were professionals that let us down," he said.

"It's like second-guessing your lawyer or sitting in the hospital with a heart transplant, trying to tell the doctor how to do it. That isn't how the world works, right?"

In its statement of claim, the county alleged it had suffered because of the defendants' "breaches of contract, negligence, acts and omissions."

All of the defendants filed statements of defence denying the county's allegations, and multiple companies filed third-party claims against each other. None of the claims have been proven in court. 

Blakeman said legal fees and consulting fees related to the lawsuit and building investigations have cost the county about $600,000. Legal fees alone cost about $350,000.

Building safe, for now

Blakeman said the county has reinforced parts of the building to ensure it is safe for staff to work in.

He said the building could probably continue to be used for four or five years, but not 40, which was its intended lifespan.

Blakeman also said parts of the building, like doors, could be reused when it is time to rebuild. 

Chris Yeoman, president of the Lac Ste. Anne and Communities Ratepayers Association, said the building has long been a contentious issue.

She was one of the many residents who opposed it, deeming it too extravagant.

"I don't see this as a win for Lac Ste. Anne County," she said of the settlement.

She said residents still have questions about what happened, why the building isn't fully repairable, and the scale of a potential new build. 

Residents also want more transparency from their local government, she said.

"People are starting to ask the question, 'What am I getting for my tax dollars?'"