The North Dakota Department of Human Services announced it will help find services for those affected by the closing of Lutheran Social Services North Dakota.
The nonprofit announced Friday, Jan. 15, that it was suspending its programs and laying off its staff.
In a news release sent Friday, officials said the department will begin work to review contracted services and determine how to sustain vital programs once provided by LSSND.
“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 announcement from LSSND explained the major issue was a financial shortfall from Lutheran Social Services Housing.
LSS Housing was created to address the need for affordable housing in communities across the state, particularly as demand was driving up housing costs in oil-producing areas of western North Dakota. Further study noted the housing needs of people on fixed incomes across the state. LSSND invested more about $16 million in cash and secured additional funding that provided safe sustaining housing for hundreds of families, seniors and individuals. LSS Housing owns and operates 22 properties in 14 communities and manages another 14 residential properties in 10 communities.
“The decision was driven in large part by continued struggles of Lutheran Social Services Housing, an affiliated program,” officials wrote in a news release announcing the shutdown. “LSS Housing, which started in 2009, impacted agency reserves and resulted in negative cash flow projections, according to Bob Otterson, who started Dec. 1 as the agency’s president and chief executive officer.”
“LSS Housing in recent years has been draining the reserves of the affiliated agency,” Otterson said. “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 board’s directors, in their deliberations, acknowledged that decisions made two, four, even 10 years ago, created the financial crisis that has forced a bankruptcy resolution, according to Murray Sagsveen, the board’s chairman.
“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.”
Otterson said LSSND was proud of what it and its predecessor orgaizations — some of which date back to 1919 — accomplished.
“The agency has lived up to its mission of bringing healing, help and hope to neighbors,” Otterson said. “Unfortunately some chronic financial issues have forced the actions of this very difficult day.”
The move affects a total of 283 full- and part-time employees.