Biddeford officials said they are committed to settling a $255,000 debt with a local contractor after a paperwork mistake led to the loss of a federal grant that was supposed to pay for upgrades to a local homeless shelter.

Work began over the summer on upgrades to the second floor of the Seeds of Hope shelter to allow for more beds. City officials initially expected a Community Development Block Grant from the US Department of Housing and Urban Development to foot the bill for the $1.2 million renovations.

But halfway through the project, Jim Godbout Plumbing and Heating did some additional work, including fixing a leaky roof.

That work wasn’t covered by the grant and doing it without checking with HUD first led to the city losing the money, according to Mayor Martin Grohman. 

“They ran a little bit ahead of the paperwork,” he said.

When the company learned of the mistake, it stopped work immediately, but had completed renovations on the second floor, costing about $655,000.

On Nov. 19, the council voted unanimously to pay $400,000 right away. At the time, officials said the company’s owner, Jim Godbout, had offered to do fundraising to cover the rest.

But on Tuesday, Council President Liam Lafountain and the council agreed, without a formal vote, to ask city staff to figure out ways for the city to cover the remainder instead. 

“I think what we now have as a council is an opportunity to make good on payment for the remaining $255,000,” he said.

While the renovations of the second floor are complete, the project is not finished. Additional renovation work, including the building of a commercial kitchen to provide proper meals, will cost more than $586,000.

The council did not decide on Tuesday how to pay for either the current payment or the upcoming work but said it will discuss options on Jan. 7, 2025.

On Wednesday, Grohman said he was proud to see the council stepping up, and that ensuring the debt is paid will help the city secure more federal funding, both for Seeds of Hope and future projects. 

“We’ve got more work to do, there’s no question about that, but we will figure this out and make sure that we continue our good relationship with HUD, which we’re proud of, and keep these projects moving forward, too,” Grohman said.

Grohman said the city may be able to secure more CDBG funding for the work. Other options include related state and federal grant monies or paying for it out of the city’s budget.