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Lawsuit forces City to revise last year’s budget
A court decision ordering the City of Langley to pay more than $2 million for not properly compensating a local business when it expropriated land in 2005 has left the municipality rearranging its finances and one council member suggesting that more could have been done eight years ago to prevent the current situation.
In January, the City learned it had been successfully sued by a property holding company for lost value of land which was expropriated by the City to build the 204 Street overpass across the Langley Bypass and CP Rail tracks.
Following a trial in Supreme Court in New Westminster that ended on Oct. 3, a judge agreed with the plaintiff, Rockcliffe Estates, ruling that the City of Langley’s payment of about $800,000 didn’t appropriately compensate the company for a strip of land that was purchased to build the overpass.
It has ordered the City and the province — who were 50-50 partners in the project — to pay an additional $2,026,360, including legal costs. Of that amount, roughly $700,000 is interest.
The City is proposing to pay its share through transfer of $975,765 in unused 2013 casino proceeds as well as $18,640 from last year’s Capital Works Reserve. The provincial government has already contributed its portion — $1,016,560 — toward the amended project budget.
Although its commitment is 50 per cent, the province is paying slightly more toward the assessed amount than the City because the figure includes costs incurred in 2012, after the province was last billed for its share, explained the City’s corporate officer Darrin Leite.
Following an opportunity for public input on Monday night, council gave first, second and third reading to a series of amendments to the municipality’s 2013 budget.
The only member of the public to speak during the Committee of the Whole, Langley resident Paul Albrecht, commented that he was “perplexed” about how the City could have been so far out on its calculation of the acquisition price.
Noting that he was not a member of council in 2005, when the decision was made, councillor Dave Hall suggested that a larger, dedicated contingency could have been set aside against a potential lawsuit, and that council should have been kept better informed about the issue.
“I’m not against the settlement as it is. We’re obligated to deal with the matter as it’s been settled in court,” said Hall.
“The difficulty is in the transparency of the process.”
“It was not flagged, other than a single meeting after the court decision was reported in the local paper,” said Hall, adding the article published February was the first he’d heard about the ruling.
“To get a handle on this, we need more timely information.”
Earlier in the meeting, Hall suggested that council had not been notified about the suit through any of its quarterly, year-end or audit reports.
“As council members, we’re trusted by the public to keep a handle on this,” he said.
“How can I be prepared for an overrun of this magnitude if none of the financial overseers bring it to my attention?”
The City’s CAO, Francis Cheung, challenged Hall’s assertion that council had not been kept informed, saying that updates had, in fact, been given during meetings which Hall had attended.
“Staff made every effort to keep council informed,” he said.
Councillor Gayle Martin, one of three sitting council members — along with current acting mayor Ted Schaffer and Jack Arnold — who were on council in 2005, said it seemed clear that the sole purpose of Hall’s comments was to ‘throw those of us (who were on council) under the bus.’
Council didn’t possess a crystal ball in 2005, she said. “How could we predict what a court would do?”
Given the same situation, it’s unlikely they would do anything different, said Martin.
“We could never have predicted this would happen eight years later.”
Cheung said that the City had tried to negotiate with the property owners prior to expropriating the land and, later, to come to a settlement, but to no avail.
“It went to trial and, unfortunately, the judgment went against the City.”
Rockcliffe Estates sued, claiming compensation for the value of land that was expropriated by the City, as well as for the reduction in market value of the surrounding lands it owns, where Scan Designs is located, and to adjoining property, plus interest and costs.
Rockcliffe argued that the overpass has impeded sight lines and accessibility to Scan Design’s furniture store. The judge agreed.
“Langley itself was delinquent in updating its original assessment of Rockcliffe’s loss,” said Justice Bruce Greyell in his judgment.
The amended 2013 capital improvement plan, which also included a further 11 projects — including allocating additional funds to a Fraser Highway curb project and Douglas Park Water Park — will likely go to final reading at the next council meeting on May 12.