The Pikes Peak Workforce Center is negotiating with state officials about whether it must return $828,371 in grant money after the Colorado Department of Labor and Employment (CDLE) deemed that amount had been spent on “disallowed” expenses by a nonprofit funded by the grant.
The negotiations are part of a lawsuit filed by the Workforce Center last July after its unsuccessful efforts to administratively appeal the CDLE’s demand for repayment.
Pikes Peak Workforce Center lawuit
In the lawsuit, the Workforce Center, an agency serving El Paso and Teller Counties that trains workers and helps them find jobs, alleges the state failed to provide proper guidance for expense documentation and then refused to accept alternative documentation.
The legal dispute arises from a roughly $1.9 million grant made by the CDLE to the Workforce Center from the state’s cut of the federal American Rescue Plan Act. The Workforce Center in turn awarded the money to the Colorado Springs Community Cultural Collective. The Collective dissolved last summer.
Background
Congress approved and President Joe Biden signed the American Rescue Plan Act (ARPA) in 2021 as a strategy to provide funds to help the nation recover from the Covid-19 pandemic’s impact on the economy.
In late 2020, a group of arts advocates, led by Linda Weise, formed the nonprofit Colorado Springs Community Cultural Collective, originally to overhaul City Auditorium and run several workforce programs called Opus Creative Industries. The nonprofit operated on allocations from the City of Colorado Springs ($2.4 million from the ARPA and $250,000 from local tax coffers); from El Paso County ($700,000); from the CDLE ($1.9 million from ARPA allotted to the Workforce Center), and donations.
In August of 2023, the Collective ended its agreement with the City for the auditorium project; Weise said at the time the Collective was unable to raise the additional $85 million needed to redesign and remodel the facility, located at 221 E. Kiowa St.
The Collective then focused on the Opus job training project, created after the Collective was formed to operate under the Collective umbrella and occupy part of the City Auditorium space. When the Collective’s agreement on the auditorium ended, the Opus jobs programs relocated to other spaces in the downtown area.
Through Opus, the Collective offered a culinary arts program, a preschool development program, and a media and creative arts program. It closed in March of 2025.
At issue in the Workforce Center’s lawsuit is a portion of the money from CDLE’s $1.9 million grant made to the Workforce Center, which dispersed the funds to the Collective from February 2023 through late December 2024.
In fall 2024, CDLE conducted a monitoring review of the grant given to the Workforce Center and from the Workforce Center to the Collective for Opus programming. CDLE sent the Workforce Center a list of required documentation covering the period July 1, 2023, to June 30, 2024. During the monitoring process, CDLE identified certain costs reimbursed to the Collective for Opus programming that allegedly did not comply with grant terms and conditions.
The review covered about $1.3 million of spending from the ARPA grant. It was conducted prior to the last installment of the $1,895,577 grant being paid to the Collective.
“CDLE conducted a monitoring review … that began on September 13, 2024, and ended on October 4, 2024. This review revealed numerous compliance issues pertaining to federal Uniform Guidance … and state fiscal rules for the various programs provided by [Pikes Peak Workforce Center] and subrecipient CSCC (Opus Creative Industries),” said CDLE in an April 2, 2025, statement. “$828,371.78 of disallowed costs were found to have been awarded to Opus Creative Industries.”
The CDLE statement said it was working closely with the Workforce Center to “establish appropriate corrective actions and a repayment plan for the disallowed costs.”
The lawsuit
On July 28, 2025, the Workforce Center filed a lawsuit in Denver County District Court against the CDLE, saying it had exhausted other remedies to resolve the matter of disallowed expenses, including an appeal to the state’s procurement director to set aside the state’s demand for repayment of the $828,371.
The lawsuit provides a recap of what led to the lawsuit, noting that in July 2024, the CDLE sent the Workforce Center a list of “required documentation” that state officials wanted by Sept. 6, 2024. The Workforce Center contends that the CDLE failed to provide “meaningful guidance” on the documentation it sought and refused to accept what the Workforce Center alleges was acceptable alternate documentation of hours worked by staff. The lawsuit notes that CDLE had alleged the Collective didn’t “maintain traditional timesheets,” but the agency refused to accept other types of time and effort validation.
On Feb. 14, 2025, the lawsuit says, the state requested the Workforce Center repay $828,253.
On March 31, 2025, the lawsuit says, the Workforce Center offered to settle the matter by paying the CDLE $100,000, but on April 4, the CDLE rejected the offer and issued a “notice of breach” terminating the grant agreement and demanding payment of $828,371.
The Workforce Center’s lawsuit alleges the CDLE engaged in “unreasonable contract administration” including “adding new grants to the audit scope” and “imposing impossible compliance deadlines, and arbitrarily rejected documentation of time and effort despite precedent” and “the lack of clear guidance specifying particular documentation requirements” – and that this violated the Workforce Center’s due process rights.
The lawsuit also alleges the CDLE exercised “bad faith in settlement negotiations” – including inviting the Workforce Center to submit a settlement offer and then ignoring it.
In addition, the lawsuit alleges that the CDLE relied on factual errors such as “misidentifying the amount of funds provided to subrecipient Opus” and “documenting monthly check-ins that never occurred.”
Workforce Center spokesperson Becca Tonn declined to comment and referred questions to its outside legal counsel, William R. Thomas of Denver. Thomas declined to comment.
Asked for a tally of those legal expenses, Tonn said, “The attorneys bill our insurance firm directly, Philadelphia Insurance; therefore, we do not know the amount.” Asked for the amount of Workforce Center’s deductible on its insurance coverage, Tonn referred that question to Thomas, who declined to comment.
A CDLE spokesperson also declined to comment, citing the “active litigation.”
According to recent filings in the case, the parties are negotiating repayment options, the potential use of an independent auditor and flexibility of repayment timing. In a Jan. 21 filing, the parties advised Denver County District Court that the Workforce Center had provided additional documentation to the CDLE and that the information was under review by the CDLE. The parties also stated in the filing they were “confident that this review will help steer conversations toward alternative dispute resolution.” The filing also noted that “conversations have been fruitful.” The parties reported that if no resolution is reached, they will submit a new report to the court by Feb. 10.
Pikes Peak Workforce Center Jan.21 status report
