FRANKLIN — The Franklin Animal Shelter, which was slated to close on June 30 due to a lack of city funding, is staying open, thanks to a new agreement with the city which requires some changes in the shelter’s financial reporting methods, according to the city manager.

“Keeping the shelter open was our preferred alternative all along,” said City Manager Elizabeth Dragon.

Animal shelter officials could not be reached for comment, but posted the following notice on the shelter’s Web page: “The Franklin Animal Shelter would like to sincerely thank the City Council for renewing our contract for another year. We also thank the public for their outpouring of support. The animals need us and we are so happy we will continue to be here for them.”

The shelter, which runs under the stewardship of the Granite State Animal League, had planned to close because of an impasse with the city over its budget. A combination of rising pet care costs and fewer volunteer fundraising efforts prompted shelter officials to ask for $10,000 in addition to its annual city funding of $20,000.

This spring, as city officials prepared their budget proposals, they were looking to cut, not add to, the budget. They found an option, the New Hampshire Humane Society’s shelter on Meredith Center Road in Laconia. The society offered the city mostly the same services for $15,000 a year. City officials had planned to recommend that option with no funding for the city’s shelter.

Dragon said the city also was concerned that the shelter had “management issues” in that shelter officials not been filing budget paperwork properly and had put their nonprofit status in question.

But shelter officials came back to the city recently with a revised request for a level-funded $20,000 from the city, and said the shelter would make up the money through fundraising and other outside sources, Dragon said.

The city agreed, and has included $20,000 for the shelter in its proposed $9.72 million city budget. The agreement will provide the funds in quarterly $5,000 stipends, and it requires shelter officials to return to the city council in six months to report on their progress.

“We’re just making sure they have a plan and that we stay in communication,” Dragon said. “We’re glad we found a solution.”

dseufert@newstote.com