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Lutheran Social Services suspends programs, lays off staff

Lutheran Social Services suspends programs, lays off staff

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Lutheran Social Services of North Dakota has suspended programs and begun to lay off staff due to a financial crisis with its affordable housing program, the nonprofit announced on its website Friday.

A total of 283 full-time and part-time staff will be laid off, as well as several long-term contractors, the agency said. About 40 positions are based in Bismarck.

The decision was largely prompted by continued financial struggles of Lutheran Social Services Housing, an affiliated program that started in 2009, said Bob Otterson, who began Dec. 1 as the agency’s president and CEO.

“LSS Housing in recent years has been draining the reserves of the affiliated agency,” Otterson said in a statement. “This financial pressure has hampered the ability of an essential, faith-based organization to serve its clients, specifically those in primary mission areas such as services to children, families, seniors and others.”

The staffing reductions started Friday and will continue over the next three weeks, Otterson told the Tribune. Five programs that serve imminent-risk clients and vulnerable minors will continue for a longer period until a suitable agency can meet the needs of those clients, he said.

Those who work in the agency’s mental health and behavioral health programs are working to connect clients with referrals and other services, he said.

Otterson said he hopes many of the programs will continue through transitions to other agencies. He said he’s working with agencies and nonprofit partners to continue the refugee resettlement program.

LSS Housing owns and operates 22 properties in 14 communities and manages another 14 properties in 10 communities. Those operations will continue for the immediate future and the agency is working with lenders on a longer-term plan, Otterson said.

Murray Sagsveen, chairman of the board of directors, said in a statement that decisions made years earlier created a financial crisis that forced the need for bankruptcy.

“Obvious economic realities -- such as the downturn in oil production and a global pandemic -- have been factors in this outcome,” Sagsveen said. “However, the primary factors remain the LSS Housing business model, its accumulated debt, its inability to cover its expenses and other agency-level decisions made in previous years.”

LSSND was first established in 1919 as Lutheran Children's Finding Society, which operated as a shelter for orphans and neglected children. The agency has been resettling refugees in North Dakota since 1946, starting with displaced Eastern Europeans after the Second World War.

Sister Kathleen Atkinson of Ministry on the Margins, a faith-based volunteer organization based in Bismarck, said the agency played a large role in helping vulnerable communities statewide, offering services from housing assistance to prison re-entry programs. LSSND's departure leaves a large gap in services available to those vulnerable populations that other organizations would now need to fill, she said.

“It is a broad scope of vulnerable people that are served, so it would not be that one agency that would step in but it is many,” she told The Associated Press. “At a time of huge need, we have lost a large provider.”

The North Dakota Department of Human Services said in a statement Friday that it will work to coordinate the transition of Lutheran Social Services programs.

“In partnership with Lutheran Social Services, we’ve improved the lives of thousands of North Dakotans,” said Chris Jones, executive director of the department. “It’s our goal now to coordinate the transition of LSSND programs and clients wherever possible.”

The Associated Press contributed to this report.

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