Letters of Credit

What is a Letter of Credit and how is it calculated?

The Letter of Credit (LOC) is between the City of St. Albert and the Property Owner. Essentially it is a deposit until the work is completed/inspected and maintained during the warranty period. As work is completed and accepted by the City, there are opportunities for the Letter of Credit to be reduced.

For more information refer to the Council approved Letter of Credit Policy C-P&E-03 (PDF).

Accepted Forms of Security:

Most development projects provide a Letter of Credit as its form of security. Please refer to the Letter of Credit Standards Document (PDF) to ensure the Letter of Credit is prepared to acceptable City standards.

In lieu of providing a Letter of Credit, a cash deposit can be made payable to the City of St. Albert. A cash deposit must be submitted in the form of a certified cheque or bank draft - personal cheques will not be accepted.

Letter of Credit (LOC) Determination Process for Development Permits:

The LOC can be derived based on the following:

  • Landscape (private property = on-site) [100% of construction cost]
  • Landscape (public property= off-site) [100% of construction cost]
  • Engineering (water service – property line to building = on-site) [20% of const. cost]
  • Engineering (sanitary service – property line to building = on-site) [20% of const. cost]
  • Engineering (storm service – property line to building = on-site) [20% of const. cost]
  • Engineering (off-site services) [100% of construction cost]
  • Engineering (surface construction – asphalt & concrete = on-site) [20% of const. cost]
  • Engineering (surface construction – asphalt & concrete = off-site) [100% of const.n cost]
  • Landscaping As-built and Record Drawing packages = $5000 (flat fee)
  • Engineering As-built and Record Drawing packages = $5000 (flat fee)
  • Permits (SSP & OSCP) & Service connection inspection = $5000 (flat fee)

An Excel spreadsheet (.xlsx) has been provided to complete the LOC calculation for Development Permits.

Note: if cost estimates are not provided, the City of St. Albert will assign values to the construction work.

Letter of Credit (LOC) Reduction Process for Development Permits:

In general, the Letter of Credit (LOC) is reduced as items are completed and inspected/accepted by the City. The tendency is for LOC reductions to occur at the end of the construction season (November and December).

ENGINEERING

  • Inspection and acceptance of underground and surface construction yields a full reduction of these items (no maintenance period & no FAC required for Development Permit projects).

LANDSCAPING

  • CCC inspection and approval of the installed landscaping yields a 50% reduction in the landscape value [year of construction].
  • After the 1 year maintenance period for private property landscaping, an FAC inspection and approval is required to release the remainder of these funds [+1 year].
  • After the 2 year maintenance period for public property landscaping, an FAC inspection and approval is required to release the remainder of these funds [+2 years].

AS-BUILT DRAWING AND RECORD DRAWING PACKAGES

This is a 2 step process:

  • $5000 is released once the Engineering Record Drawing package is complete. This includes review and acceptance of the As-Built drawings by the City & the finalized submission of the Record Drawing package containing PDF and AutoCAD formats [year of construction].
  • $5000 is released once the landscaping Record Drawing package is complete. This includes review and acceptance of the As-Built drawings by the City & the finalized submission of the Record Drawing package containing PDF and AutoCAD formats [year of construction].

SSP & OSCP PERMITS AND SERVICE CONNECTION INSPECTION

  • $5000 is released once the Service Connection Inspection is complete.

Definitions:

  • LOC = Letter of Credit
  • CCC = Construction Completion Certificate
  • FAC = Final Acceptance Certificate
  • COI = Certificate of Insurance
  • SSP = Site Servicing Permit
  • OSCP = On Street Construction Permit
  • As-Built Drawing = A document that reflects the installed, fabricated, constructed or commissioned condition of an item or project based on information provided by another party and not verified by the professional member.  As-Built drawings document how a project was actually constructed in the field and identify variances from the initial design.  Upon completion of a project, a set of red line mark up drawings shall be submitted to the City for review.  This is step 1 of a two step process. 
  • Record Drawing = A professional document prepared by the professional member to record design changes to an initial design for which he or she has accepted responsibility and which represents the final design of the project.  Typically issued or retained as verification that on-site conditions are in accordance with the final design.  Once the City has reviewed and accepted the As-Built drawings, the Consultant must submit the Record Drawing package for project closure.  Red line mark ups are to be converted to black text and the Record Drawings submission is to be reviewed and  authenticated by the professional member.  This is step 2 of a two step process.

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Last edited: November 13, 2019