Shelter behind on payments

Photo by Tori Boone

Photo by Tori Boone

COVINGTON -- Representatives with the Covington Housing Authority plan to meet with the board of directors of Garden of Gethsemane Homeless Shelter toward the end of the year to renegotiate the terms of their lease.

The shelter is behind on rent payments owed to the Housing Authority, having paid $9,000 of about $30,000 owed. In September, Housing Authority officials said the shelter also owed some $38,000 in utility bills which the Housing Authority paid on behalf of the shelter from June through December 2009.

"Our position is to work with them as much as we can," said Housing Authority Attorney Jim Alexander.

For both sides, it appears the working agreement between the authority and the shelter board has been marred with confusion and disorganization.

The homeless shelter opened in June 2009. At an October board meeting, it was noted that the facility was not being billed for utilities. The board apparently never followed up, believing that the utilities were being donated by the city or the Housing Authority, which owns the property, according to board member John Strauss.

In January, the board received a letter from Alexander stating that it owed the Housing Authority for utilities paid during the previous six months.

Shelter director Clara Lett said the shelter could not pay utilities until they had a lease agreement with the authority, which she claimed was delayed many months. The shelter board of directors received a blank lease, which it would not sign without specific terms, Strauss said.

A lease was finally signed in February of this year setting the rent at $3,000 per month. Shelter staff claims the amount was based on a budget to run the shelter created by the Housing Authority, which included items such as lawn care and other maintenance that the shelter is already covering. They say they simply can't afford to pay.

But Housing Authority representatives say the rent was based on the reimbursement they hoped to get for utilities.

The Housing Authority can't use federal money it receives for costs associated with the homeless shelter. A separate fund was set up for the shelter project including a $1.08 million grant from the city of Covington to purchase the property and make renovations and repairs, and a $99,000 federal grant.

Utilities were paid out of that fund, according to Housing Authority Director Greg Williams..

Utilities are not an allowed expenditure of the city grant or federal funds, and Williams admitted a separate account should have been set up showing exactly how those funds were expended. After the purchase of the property, there was about $100,00 remaining from the city grant, plus the $99,000 federal grant. There were more than $200,000 in repairs and renovations on the building, according to documentation obtained through an Open Records Request to the Housing Authority.

The Authority is also reimbursing some $65,000 to FaithWorks, another nonprofit located at the same site. FaithWorks covered more than $65,000 in repairs to its building and has been reimbursed at least $40,000 by the Housing Authority. FaithWorks is not paying its $500 a month rent, which is being counted as a credit toward the remaining $25,000, according to Alexander.

The renovations, including FaithWorks' repairs, more than account for the grant money, and Williams said it can be assumed the money was used for its intended purpose. The Housing Authority also received at least 10 rental payments of $8,267 from McIntosh Trail, the former occupant of the building,which Williams said he assumes was used to pay utilities.

Utilities are typically part of construction costs and, "After that, once they moved in, when the bills came in, they had to be paid. That was the only money available at the time, with the understanding and knowledge that we would get reimbursement from the homeless shelter," he said.

Williams said he doesn't know if there was any accounting done by the city of exactly how taxpayer money was spent.

"Ideally we would have an account of it that would be totally separate ... but I feel very confident that all the capital funding we received through grants has been spent as it was intended. We have more than enough in capital expenses to account for it all," Williams said.

It was Williams, who came on board in October 2009, who realized the Housing Authority was paying for utilities and questioned Alexander about it, who then took action to get reimbursement

The Housing Authority never intended to pay utilities on the homeless shelter. The money left over from the purchase was to be put in a fund for future maintenance and upkeep costs, Williams said.

Lett has publicly promised to reimburse the Housing Authority, and Strauss said the board still intends to do so, but can't afford to right now.

"The Housing Authority needs to be patient while we climb out of this hole," he said.

Whether the shelter can sustain itself long-term remains to be seen. The operation has lost significant money, according to Strauss, who said some $70,000 in grant money was lost due to lack of a lease.

Utilities on the homeless shelter are as high as $7,000 per month. The three buildings occupied by the shelter have 11 meters and are charged a commercial rate. Lett said she is trying to negotiate with the city to see if that can be reduced to a residential rate.

A state-funded program that reimburses the shelter for taking in parolees has produced less revenue than expected this year as well, he said. Residents at the shelter now are not able to generate enough income to cover their cost of living expenses, he said.

According to Cheryl Heard, accountant for the shelter, residents are charged $10 per day for their first 30 days of occupancy and, after that, up to $350 per month. The goal is to encourage employment, she said, and this practice is common at shelters throughout the metro area.

Residents are also asked to use their food stamps to buy basics for the kitchen such as milk and bread, she said.

"It makes people responsible -- they need to be accountable," she said. However, those who can't afford it are not required to pay, and some stay for months without contributing, she said.

According to the shelter's financial statements obtained through an Open Records Request, in 2009, total revenues were $102,212.67, while expenditures were $106,442.84, leaving a loss of $4,230. Thus far in 2010, the shelter has recorded $93,786.61 in revenues and $92,588.98 in expenditures, for a net profit of $1,197.98.

Lett's salary is $12,250 per year and according to Heard, all other employees are volunteer.

In 2010, through Sept. 30, rent from residents coupled with fundraising has generated $27,334.82; corporate and individual donations total $12,594.70; and grants total $38,857. That does not include a recent $24,000 grant received from the Department of Community Affairs.

In addition, the re-entry parolee program has generated $15,000, and work screening clients for the Fresh Start program has generated $1,400.

Expenses include nearly $33,000 in utilities; more than $2,000 for maintenance costs; $9,000 in rent to the Housing Authority; more than $5,000 for vehicle expenses including gas, insurance and maintenance; $10,850 for director Lett's salary; more than $2,000 for appliance repair; and more than $6,000 in telephone bills, plus various miscellaneous items.

The shelter owes about $10,000 per month in utilities and rent alone, based on current charges and the lease agreement. At its previous Porterdale locations, rent and utility expenses totaled about $6,000 per month, according to Strauss.

Both parties admit there was never a meeting between the city, Housing Authority and shelter board of directors to hash out all the details of operations and make sure everyone was on the same page.

As to whether the shelter can sustain current operational costs, supporters are putting that in God's hands.

"We men and women typically make a mess of things and the homeless shelter,the city, and the Housing Authority are no exceptions," Strauss said. "But God's work is truly being done at the homeless shelter, and I am confident that he can use our man-made messes for his good. He will deal with the problems ... he will solve them and in the process he will be glorified."