The Perimeter Community Improvement Districts will pay $2.8 million to settle a lawsuit brought by the city of Sandy Springs over costly paperwork errors on a streetscape project.

The settlement agreement was signed Dec. 19 and involves no admission of wrongdoing from the PCIDs and private contractors that the city had also sued, according to City Attorney Dan Lee.

Ann Hanlon, the PCIDs’ new executive director, declined to discuss the settlement in detail, but repeated her comments in an interview earlier this month that settling the lawsuit was a priority. She previous said it was the subject of her “first phone call” on taking the job. She said the PCIDs was “proud” to get the lawsuit settled and is looking forward to a new master plan of transportation-related projects in the new year, which will involve collaboration with Perimeter Center cities.

“Our focus, moving forward, is to build innovative transportation projects to improve the area for everyone,” she said.

About two weeks after the city threatened to sue, in August 2016, former PCIDs leader Yvonne Williams made a surprise resignation, that was not announced until weeks later. Williams cited personal and family reasons for leaving and said the PCIDs boards did not force her out.

Hanlon said the PCIDs staff is reviewing files on all similar projects and had completed the review on project on the Fulton County side of Perimeter Center, while still working on the DeKalb side. She said the PCIDs are “reviewing anything,” with “nothing found so far.”

“That’s gratifying,” Mayor Rusty Paul said at the Dec. 19 City Council meeting, where the settlement was announced. He called the lawsuit a “family dispute” and added, “With the change in leadership and new direction [at the PCIDs], I’m enthusiastic.”

The paperwork dispute also concerned officials in Dunwoody, another Perimeter Center city and frequent PCIDs project partner. Dunwoody officials previously said they spent $4,000 on a special audit of similar joint projects with the PCIDs, finding no errors.

The Sandy Springs dispute involved a sidewalks and streetscape beautification project along Peachtree-Dunwoody Road between I-285 and Abernathy Road carried out around 2008 and 2009.

The PCIDs commissioned the project using federal grant money provided through the Georgia Department of Transportation, with the city acting as a fiscal agent required under the grant policy. The PCIDs are two jointly operated self-taxing business districts, one in Fulton County and one in DeKalb. The grant — and the lawsuit — specifically involved the Fulton CID.

Years later, in 2014, the Federal Highway Administration audited the grant for compliance with its terms. According to a written statement from the city, the audit found “non-compliance” in the project’s paperwork, including “lack of information in the files related to materials and testing information; missing sediment and erosion control reports; and failure to include Buy America requirements [a mandate to use American-made products] in the Project contract.”

The federal government demanded its nearly $2.8 million in grant money back and sought reimbursement from GDOT, which in turn demanded the money from the city. Rather than hitting the city with one huge bill, GDOT agreed to deduct the money from the city’s annual allotment of state road-paving funds.

Former City Attorney Wendell Willard previously said there was no dispute that the paperwork errors happened, but there were argument about who to blame.

After negotiations with the PCIDs failed, the city in June sued that organization as well as two corporations, CH2M Hill and AECOM, that supervised public works during the project under Sandy Springs’ largely outsourced model of government. According to a city press release, Lowe Engineers also became a defendant in the lawsuit.

To settle the suit, the PCIDs is paying back the full $2.8 million, with the corporations not paying anything, Lee said. Of that amount, the city will directly receive $698,773.83 as reimbursement for the paving fund deductions to date, and the balance will be paid to GDOT, according to city officials.

Update: This story has been updated with comments from PCIDs Executive Director Ann Hanlon.

John Ruch

John Ruch is an Atlanta-based journalist. Previously, he was Managing Editor of Reporter Newspapers.