Speakers (Left to right, beginning second from left) Talia Smigielski, Xmena Duarte, Carolina Elizondo, Robert Lewis and Liz Handschy spoke about ESNS’ current challenges to a crowd of more than 50 people. Legislator Sydney Jordan sat in the audience and commented during the discussion. (Mark Peterson)
On Monday, November 3, the position of President of East Side Neighborhood Services (ESNS), formerly held by Mary Ostapenko-Anstett, was eliminated by the ESNS Board of Directors and a restructuring consultant firm was hired.
The Board of Directors had drafted a letter, with 34 employee signatures, calling for her to resign or be removed by the Board. According to employees, the action was based on financial concerns and a difficult work environment. At the same time, Tom Plumb, Managing Director of Cordes & Company, a business management firm headquartered in Denver, Colo., was contracted to restructure ESNS’ financial management.
Ostapenko-Anstett could not be reached for comment before this edition went to print.
Three days later, a meeting at the ESNS building brought more than 50 people to hear current and former ESNS employees present their concerns about their organization. The presenters called themselves the East Side Neighborhood Services Organizing Committee. Carolina Elizondo, Director of Family Services, outlined the alleged problems within ESNS that brought about the meeting.
East Side Neighborhood Services was founded in 1915 as the Northeast Neighborhood House, one of many “settlement” houses in the nation created around the beginning of the 20th century to provide health care, education and social support to immigrant and poor communities. These houses were instrumental in establishing modern social welfare policies. In 1963, Northeast Neighborhood House merged with the Margaret Barry House to become East Side Neighborhood Services.
Elizondo noted that outside issues, like uncertainty around food program funding, helped make the situation more difficult. But she claimed that internal finances like late payroll checks (as early as May 2024) and what she characterized as the misallocation of grant money between program costs and admin costs have exacerbated the problems. Many have since left their jobs, she claimed, feeling they were forced out by the board. She contended that staff who have called attention to these issues have dealt with what she called “intimidation and retaliation.”
Elizondo claimed the financial problems come from a range of issues: staff not being reimbursed for mileage and supplies; and ESNS delaying or not making payments to vendors and contractors even when the programs are substantially funded. They have also supposedly lost contracts with partners, contractors and vendors who work directly with ESNS programs. Other outstanding debts include their internet, IT and utility bills. She claimed that multiple collection agencies are in contact with ESNS about payment.
She also asserted that for a period, payroll taxes were deducted from staff paychecks but not paid to the IRS, claiming that by the end of the year, the IRS could become involved and theoretically extract missed payments directly from the Board of Directors.
“A difficult financial position”
Last March, ESNS Board Chair Jai Kissoon
responded to payroll delay concerns, stating that “East Side is currently in a difficult financial position, and the challenges are the result of years of financial strain … for nearly five years, East Side has had to navigate significant financial hurdles. Delaying payroll has been a last resort and steps are under way to prevent this from continuing to happen.”
He added that financial stewardship will come from “identifying inefficiencies and diversifying our income sources.”
The committee says the shortfalls stem from ESNS’ grant system. Since grants do not fund the entire cost of running social services, non-profits have to pay for the full cost of supporting the community, thus needing further contributions.
District 60A State Representative Sydney Jordan was in the audience. She said the state is aware of issues at ESNS because of reports from employees and people receiving services. She noted that ESNS got state money in 2023 and that bonding money was used for some of the food services.
“Right now, the state is not in a position to provide cash, and certainly cannot be in a position to be providing cash when there are financial issues like this,” Jordan said. “The federal government is currently shut down, but I would recommend people reach out to our federal delegation about this.” She said she was unable to talk about specific items because of certain allegations.
Creative Arts Therapist Talia Smigielski, a 16-year ESNS veteran, said that a vote to unionize employees is in the works. Until that vote, there won’t be any direct communication with management on the matter.
She also handed out a four-page “Letter to the community, clients, and supporters of ESNS,” which said the organization “Is in crisis … and our concern (is) that ESNS will collapse and close in the near future.”
Demands and requests
The letter said ESNS employees love what they do and are afraid the good the organization does might be lost because of what it characterizes as “executive ineptitude and lack of community input that would be antithetical to our values and care for the community.” Some programs have been stalled out and barred from hiring staff the grantor asks for.
The letter called this another misuse of funds since ESNS would still receive grant payments for that nonexistent hire. It claims that potential and current funders are withholding donations, grants or loans due to a lack of confidence that the money will be used appropriately.
The letter describes what it calls “an extremely unhealthy work environment, with staff reporting mental, emotional and physical burnout … forcing some employees to take temporary leave or accept new employment.” Until fairly recently, ESNS staff numbered over 100 people; the current number is closer to 60.
The letter has a list of demands: new leadership and a new decision-making structure shaped by its workers, clients and the larger community; voluntary union recognition by leadership; support from the public to create accountability, transparency and sustainability for the organization; and collaboration between new leadership, workers, clients and the community and state entities.
An unsigned statement from the ESNS Board says they face “financial challenges due to funding shortfalls, delayed grant payments and growing community needs.”
“The ESNS Board of Directors is taking concrete action to find a sustainable path forward, including retaining outside experts who are evaluating ESNS’s finances, programs and staffing. We are analyzing all aspects of the organization and are committed to finding collaborative, people-first solutions that meet the organization’s and community’s needs.”