The School District 60 Board of Education claims it was unaware that it would be on the hook for nearly $200,000 worth of sanitary sewer construction when it bought land to build the new Margaret 'Ma' Murray Community School.
The board has filed suit against Peace Holdings Inc. in B.C. Supreme Court, seeking $196,920 in damages for breach of contract, as well as other damages and costs for misrepresentation of the property.
According to its claim, the board bought the land along the West Bypass Road for $2.82 million in March 2015. However, it alleges it received a tax bill from the City of Fort St. John in May 2016 noting the land was subject to local area service charges to cover the cost of the design and construction of sanitary sewer works in and around the property. The work and charges amount to $11,583.50 a year until 2033.
"Pursuant to the terms of the purchase agreement, the seller represented and agreed, among other things, that there were no local improvement charges or special levies against the property nor had it received any notice of such propose local improvement charges or special levies," reads the claim, filed on March 15.
Schools are exempt from paying property taxes, but are not exempt from any fees or charges for service levied by a municipality, according to the province. That includes local area service capital projects, such as sewer installations or road improvements, in which the city recoups it borrowing costs for the work through agreements with property owners.
Board Chair Erin Evans declined to comment on the lawsuit.
Peace Holdings has yet to file a response. In a statement, the company says it has had a good working relationship with the school district.
"We’ve been building and developing in Fort St. John since 2005 and have gone above and beyond in our developments," the company said.
"We acted in good faith with the School District on this sale and the two residential lots they purchased previously for the Residential Builder/Carpentry Program, offered through North Peace Secondary School and have donated equipment and labour during construction of their projects."
The company deferred further comment, noting the matter is before the court. It did not specify when a response would be filed.
City officials say there have been no discussions about exempting the school board from the charges.
Local area service projects can be initiated by residents or city council, and are capital projects intended to improve roads, including paving, street lights, gutter, catch basins, sidewalks, and boulevard restoration.
The costs of local area service projects are split between the city and residents directly benefitting from the improvement, with a 20-year payback term.
There have been 66 local area service projects completed between 1999 and 2018, according to the city.
Construction on the school began in 2016. The first cohort of students will start classes in the fall.
Email Managing Editor Matt Preprost at email@example.com.