In April 2021, SHELTER, Inc., operator of SHELTER Solano, broke ground on a new 7,417 square- foot commercial kitchen. The new kitchen is a required project to allow the shelter to operate at full capacity. The $4.2 million project is funded through various regional governmental, non-profit, and private donation funding sources. 

In July, SHELTER, Inc. identified various increases in their project cost estimates that negatively impacted delivery of the project. Primarily, project costs were originally estimated in 2020, before the project proceeded to groundbreaking. Throughout 2021, due to strong construction demand and supply chain disruptions from the COVID-19 pandemic, the cost of construction materials and equipment have seen historic inflation. As such, SHELTER, Inc. requested the City reduce building permit fees to help reduce the impact of cost estimate overages. Staff estimated the total building permit fees for the kitchen to be $88,890.99. The following table details high-level permit fee categories: 

The City does not have authorization to waive or reduce any fees from the school district, county, or state. Therefore, total City fees eligible for waiver are $79,610.10. SHELTER, Inc. requested about $50,000 in fee waivers. Based on the applicable City fees and SHELTER, Inc.’s request, staff recommends waiving AB1600 Impact Fees and half of the City’s License Tax Fee for a total waiver of $57,363.07. 

The City’s waiver of fees is a public subsidy to the project that triggers state prevailing wage requirements. However, because SHELTER, Inc. has already received other governmental and federal funding, the project is already paying prevailing wages. Therefore, there is no concern for additional cost increases due to the subsidy provided by waiving fees.