County Settles Long-Standing Water Claim
Tuesday, December 12, 2017
Rocky View County has agreed to a settlement ending a decade-old dispute concerning water and wastewater service to a beef processing plant in East Balzac.
In 2005, what was then the Municipal District (MD) of Rocky View #44 entered into agreements to provide water and wastewater services to a new Rancher’s Beef Ltd. processing facility.
At the time, Alberta was dealing with the BSE crisis aftermath. The MD’s decision to enter water and wastewater agreements was based in part on assurances from the Province that they supported the new beef plant. But in 2006, the Province closed a number of rivers, streams, and lakes to new water withdrawals, denying the MD of Rocky View the opportunity to secure a water supply. That forced the MD to incur significant costs in obtaining water from an independent provider.
The beef plant opened in June of 2006, but ceased operations and filed for bankruptcy protection in August of 2007. The closure was due to unfavourable market conditions, and was not related to a water or wastewater issue. Rancher’s Beef was judged bankrupt in February of 2008, and its assets were subsequently sold to Sunterra Beef Ltd.
With the plant closed and using little or no water, the MD of Rocky View proceeded to assign water and wastewater capacity to other developments in the East Balzac and Conrich areas in order to support the municipality’s continued economic development. Sunterra Beef took the position that the water and waste water agreements did not permit the reassignment of capacity. In 2013, Sunterra filed a statement of claim against what is now Rocky View County, seeking damages in excess of $50 million.
Pursuant to the terms of the 2005 agreements, Sunterra and Rocky View County entered mediation and arbitration to resolve the claim. After years of effort and negotiation, the County agreed to pay $14 million to Sunterra Beef Ltd. to fully settle the matter. The funds will come from the County’s reserves.
County Manager Kevin Greig, who joined Rocky View County in 2013, says the municipality has learned from the claims related to the water and wastewater agreements at the beef plant, and now approaches these utilities in a very different manner.
“We have worked to enhance our water and wastewater supply and demand forecasting, and the County has improved our risk management processes. These changes help ensure that Rocky View County is more fully prepared before negotiating these agreements, and that the agreements are less open to legal interpretation in the future.”
The settlement allows Sunterra Beef Ltd. and Rocky View County to move forward. From the County’s perspective, the decision to reassign water and wastewater capacity to other businesses and developments has resulted in economic stability and lower taxes.
Development in the East Balzac and Conrich area has brought thousands of jobs to Rocky View County, and tens-of-millions of dollars in non-residential property taxes and levies. That economic activity has helped keep residential property tax rates among the lowest in the province.
Water & Utilities