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Lutheran Social Services of North Dakota suspends programs and issues layoffs

Published: Jan. 15, 2021 at 2:26 PM CST
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FARGO, N.D. (Valley News Live) - The Lutheran Social Services of North Dakota announced Friday that it’s suspending its programs and issuing layoffs as part of a controlled liquidation plan.

According to the agency’s website, the Board of Directors, after accepting reports from staff leadership, external advisers, and legal counsel, passed a resolution that confirms actions leading to a liquidation, including a bankruptcy filing, if necessary.

The decision was driven in large part by the continued struggles of Lutheran Social Services Housing, an affiliated program. LSS Housing, which started in 2009, impacted agency reserves and resulted in negative cash flow projections, according to Bob Otterson, who started Dec. 1, 2020, as the agency’s president and chief executive officer.

The action affects the employment of 283 full-time and part-time staff and several long-term contractors.

LSS North Dakota leaders have informed employees about what they can expect in the coming days. Similarly, professionals in mental health and behavioral health programs are working with their clients on options for referrals and other services, Otterson said. The issues came to a head early this week, Otterson said.

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.

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. The 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.

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