WATERVILLE — Organizers at the Mid-Maine Homeless Shelter in Waterville took the occasion of their annual staff and volunteer awards event Sunday to announce the award of a $1 million grant for a second floor to the Colby Circle shelter.

The second-story project to serve youths and young adults is expected to cost $1.5 million to $1.7 million total, so new fundraising will be needed, Executive Director Betty Palmer told the awards assembly Sunday.

“If you have a penny jar, start filling it,” Palmer said. “The invitation is to begin to spread the word.”

Palmer said the shelter applied for the grant from the Maine State Housing Authority and heard of the grant award Friday. She said the new space, expected to be completed by next January, will be used for homeless services and affordable housing for people who are ready to go from the shelter to an apartment or a room of their own.

Residency will include employment programs, education and other support services the shelter already offers. It will be housing and programs with a priority for people ages 18 to 24.

The homeless shelter opened in October 2012 and cost $2.7 million to build. The old shelter on Ticonic Street, which opened in 1990, housed only six adults, many of whom had to leave during the day because of crowding.

Doug Cutchin, one of the founding directors of the shelter, said the new place is an example of what can be done with community collaboration.

“We used to worry about can we keep the place clean, have enough food, make sure they can take a shower at night, and that was it,” Cutchin said. “And now the big change from those days is that there are so many children that are here – families that are homeless. The other very major thing is that we have really focused on getting people stabilized, getting them medical help if they need it. But the big thing is that once all of those needs are taken care of, if they are in any way possible of being employed, they get them employed and be independent.”

The current shelter has a capacity of 48 adult beds and an assortment of cribs and toddler beds.

Ten bedrooms, all dormitory-style, are joined in the middle by a large multi-purpose room for dining, dancing and other group activities.

There is a smaller family room, a kitchen, offices and a program room for healing arts, parenting classes, alcohol and drug recovery meetings, Bible study and peer group studies, Palmer said.

The two-story building will be 8,000 square feet on the ground floor and 8,000 square feet on the new second floor.

Susan Reisert, the new chairwoman of the board of directors, praised Palmer for her dedication.

“Betty does a tremendous amount for the shelter for all the things that we’re trying to do here,” Reisert said. “So many of them are about the programming and the other things that we need to do. Homelessness is very complicated. Everybody has their own story and everyone has their own needs.”

Among the volunteer award recipients Sunday was John Maddux, 66, of Oakland, who logged 200 volunteer hours at the shelter in the past year.

“Being retired, I want to stay active, and I feel that helping the shelter out gives me a reason to get up in the morning and makes you feel good at the end of the day,” he said. “I try to put in 200 hours a year, going on three years now. I work in the office, answer the phone and greet people coming in the door so the staff has the time to do what they do.”

Emma Farnham, 11, of Winslow, received an Outstanding Youth Award for collections she takes up for shelter children at Christmas and on Valentine’s Day.

“We do some food drives at my house for Valentine’s Day, and my friends come over and bring stuffed animals and candy, and we give them to the kids here at the shelter,” she said.