Homeless shelter gets new lease

Photo by Corinne Nicholson

Photo by Corinne Nicholson

COVINGTON -- The Covington Housing Authority and Garden of Gethsemane Homeless Shelter have negotiated and signed a new lease for the shelter facility on Turner Lake Circle.

The lease was signed by representatives from both agencies on April 14, setting rent for the shelter at $500 per month, retroactive to January.

As of early this week, rent had not been paid by the shelter, but following a reporter's conversation with Executive Director Clara Lett on Tuesday evening, rent in the amount of $2,500 was paid to the Housing Authority on Thursday, covering costs from January through May.

The shelter is still responsible for $27,000 in back rent owed from 2010, according to the terms of the lease, which specifies that arrangements for payment in that amount are to be made by a separate agreement between the parties.

"There has not been a resolution to that. That is still outstanding. Hopefully the shelter is getting some grant money to allow them to catch up," Housing Authority Executive Director Greg Williams said.

The terms of the previous lease set rent at $3,000 per month. According to a document provided by the Housing Authority, the shelter paid $9,000 in rent for 2010, leaving a balance owed of $27,000.

Last year, Lett told the Citizen she did not have the funds to pay rent and did not agree with the Housing Authority's list of expenses to determine the monthly amount. Lett said the shelter, not the Housing Authority, had paid for all maintenance expenses that rent was meant to cover. The terms of the new lease make maintenance the responsibility of the shelter.

Lett said repeatedly during a conversation Tuesday that the $500 per month is not for rent, but for maintenance, which the Housing Authority does not do. Asked if because the shelter pays for maintenance she believed the rental amount was not owed, Lett responded, "No, that's not what I'm saying." She said the money could not be paid until the shelter board had a lease in hand, and that didn't happen until last month. She also maintained that the shelter pays insurance on the building totaling about $4,000 a year.

The intent all along was for the Housing Authority to be reimbursed by the shelter for the cost of insurance through rent, Williams said, but that hasn't happened because rent has not been paid until this week.

The Housing Authority also must pay $50 a month for accounting charges related to the shelter and miscellaneous expenses, such as a recent $400 bill for a fire extinguisher inspection at the facility, Williams said.

Utilities paid by the authority for the shelter in 2009 totaling $38,735.92 have not been reimbursed by the shelter. There appears to be disagreement over that matter.

John Strauss, a board member for the shelter, said the utilities are accounted for in the $27,000 rent owed from 2010.

"That liability was considered when the 2010 rental rate was set. Consequently, the utilities debt essentially includes the $27,000," Strauss said. "Again, the idea was not for the Housing Authority to make a profit or a windfall, and we have all been on the same page about that. If, however, the Housing Authority received the back-payment for the utilities and the back rent, it would be receiving a substantial windfall."

But Williams said utilities and rent are a separate issue. If considered as separate, the shelter owes the Housing Authority more than $65,000 in back utilities and rent. He said the rent of $3,000 a month was set in order to establish a reserve fund for future maintenance and other expenses on the facility, not to cover utilities.

Lett has said her utility bills run from $5,000 to as much as $7,500 per month for the 11 meters on the building.

"You go from month to month and pray the funds are there," she said.

All shelter utility accounts are paid up to date, according to the city of Covington.

Williams said he does not expect the utilities will be reimbursed.

"They would have to be on really sound footing" to do that, he said.

However, "The $27,000 is a legitimate liability," with the lease specifying it must be paid.

"I think there is hope there is going to be progress made in getting a grant for the facility. The Authority will support that and provide supporting documents to the state," he said.

Lett said she is happy with the terms of the new lease.

"I feel great about it. Everything is fine. The two boards worked together and got this accomplished," she said. "We're real excited about them lowering our rent. We feel some relief here."

The homeless shelter opened in June 2009. The city of Covington contributed $1.08 million to purchase the property and make renovations and repairs. A $99,000 federal grant was also obtained for the project.