At its meeting Tuesday, the Lawrence City Commission will review a request from the local homeless shelter to forgive a portion of its $725,000 loan.
Following a meeting and correspondence with city staff, the Lawrence Community Shelter is requesting that the city forgive 1/11 of the remaining balance of the loan each year for the remainder of the loan. The request would amount to a $287,211 decrease in the amount the shelter paid back to the city.
Originally, the city received a request from the shelter to forgive the remainder of its loan, which would have amounted to about $462,000.
If approved by the commission, the annual amount of loan forgiveness would be $23,148. Because decisions made by the current commission cannot bind future commissions, the shelter would have to make the loan forgiveness request each year.
The shelter requested the loan from the city in 2013 to pay off a construction loan the shelter owed its bank, according to a city staff memo to the commission. Because the city was able to provide a lower interest rate, it allowed the shelter to save money on its expenses. Part of the city’s loan also paid for repairs to the shelter’s roof.
Funding for the shelter has come up previously. In 2015, the shelter made emergency funding requests to the City Commission and the Douglas County Commission. The city and county provided a total of $100,000 in emergency assistance. As part of that agreement, the shelter was to come up with a strategic, long-range funding plan.
City staff are recommending the commission amend the 2013 loan agreement with the Lawrence Community Shelter to reflect the reduced payment. The forgiven portion of the loan would be in addition to the approximately $200,000 allocated for the shelter in the city's 2017 budget.
The City Commission will convene at 5:45 p.m. Tuesday at City Hall, 6 E. Sixth St.