Builders lien fund set at $1.35 million for Christian school
Thursday, May 29, 2014 12:28 pm
The Builders Lien Fund for the Airdrie Koinonia Christian School (AKCS) building was determined by a court on May 16.
More than 20 sub contractors have submitted liens for more than $9 million against the building because they claim they have not been paid for their work since late fall 2013. Construction work on the building, which is nearly complete, stopped in December 2013.
The Builders Lien Act is designed to assist contractors, labourers and suppliers who have provided work or material to a construction project, yet have not been paid. The Act also affords owners some protection by limiting their liability to that of the lien fund in the event a general contractor does not pay its subcontractors. All parties involved must agree to the lien fund before it is set.
The fund was set at $1.35 million, a number some subcontractors say is not enough to cover expenses.
“We are pleased to see things move forward. We hope the rest of our money will be paid to us. A small company cannot absorb this huge loss. We need to recoup the rest of our money. We are open to be paid over a span of time, but we are not accepting the fact of not getting paid for the rest,” said Isabel Toole, part owner of Calgary Diamond ROC Interiors. “Unlike an employee who gets paid every two weeks, we were told for months that the money was coming, but it never came, and we need to know who is responsible, and make them accountable.”
Construction began on the 57,000-square-foot building, on Gateway Dr., in March 2011 and was expected to be completed by September 2013. The school’s almost 300 students are currently attending classes in a number of churches and at Genesis Place Recreation Centre until the new building can be utilized.
As reported in the March 13 edition of the Airdrie City View, AKCS Society members claim they paid the contractor, local company JDS Construction, $9.66 million out of the total cost of $10.5 million, as of November 2013 and JDS “did not in turn pay the full amount owning to sub trades, which led to the registration of multiple liens against the school property.”
According to a Statutory Declaration dated Nov. 29, 2013 that was signed by Paul Wolff, JDS Construction spokesperson, “the contract for the completion on the Airdrie Koinonia Christian School is 95.5 per cent complete.” The document concludes by stating “$1,622,818 is the total of all invoices received to date and future expected invoices to complete the contract, including all subtrades and JDS Construction and all builder’s lien holdbacks.”
Wolff said he has been advised by his legal council not to speak publicly about the specifics of the project until the legal process has concluded.
“From a personal perspective, it’s been really tough,“ Wolff said.
“I think there has been much misrepresentation and there’s so much more that needs to be said. It is challenging on our part but it’s really hard for us to comment on anything because the truth and facts can’t be told yet because there are still facts coming forward.”
Wolff did say the ordeal has negatively affected the people of “our business.”
“It’s heart wrenching,” he said. “Out of 80 staff we had, there are not many left and that speaks for itself.”
He said he did not personally support the lien for $1.35 million but he “followed the subtrades’ lead.”
JDS Construction also has liens on the building for about $5 million, which Wolff said includes the amount owed to subtrades.
Wolff said when he was first approached about the project in 2009, the plan was for a $5.3-million building.
The AKCS Society planned to build the structure in stages but a number of factors including the need to install the HVAC system all at once, caused them to try and complete the entire structure and the cost ballooned to $10.5 million.
“That was part of the initial problem,” said Wolff.
The builders lien fund has been set at $1.35 million but lawyers have yet to determine how much of the fund each of the more than 20 contractors with liens against the building will receive.
Toole said her company is out about $173,400 and she expects to be paid between 30 and 40 per cent from the builders’ lien fund. Toole said she should know by the end of July.
“The most frustrating thing is that no provincial audit has taken place to ascertain what happened during construction, for the subcontractors to not get paid, and who is ultimately responsible to ensure the subcontractors are paid in full,” Toole said.
Steve Falconer, exterior specialist with Airdrie company Stesuz Contracting, said he is out $168,242.
“Obviously 40 per cent on the dollar is not ideal but I am OK with it,” he said. “At least it is something.”
Falconer said he was last paid for his work in November 2013 and the lack of payment for his services has had a profoundly negative impact on his contracting business and forced him to shut down another business he operated in Airdrie.
“It’s been really bad but I don’t blame the school,” he said.
“It’s not their fault and I plan to work with them to try and finish the school once the lien is paid off.”
According to an assessment by BRZ Partnership Architectural, there is about $750,000 of work left to allow for occupancy of the building and an additional $750,000 to fully complete the school building.
Ron Smith, AKCS director of advancement, said the society is “satisfied with the process.”
“I think we came to a conclusion everyone agreed was fair,” he said.
“It was a reasonable compromise.”
Smith said the next step is for the school is to pay the $1.35 million so they can begin work on the school.
“We need to take some time to determine how we will pay the lien fund and this will allow us to hire new and existing, if they would like to work with us again, trades to continue building.”
He said the school will also be looking to volunteers to complete some of the work such as landscaping, painting and cleaning.
“We are so thankful we will be able to continue work again. We want to look forward and move forward. We are excited about getting back to work to educate kids,” he said.
Smith said he doesn’t have a firm timeline for work to start again on the building but he “will know more within the next 30 days.”
He said he can’t project a date of completion for the school but he hopes to have occupancy of part of the building by September.