STAFF BUDGET BRIEFING FY 2020-21

DEPARTMENT OF LOCAL AFFAIRS

JBC WORKING DOCUMENT - SUBJECT TO CHANGE STAFF RECOMMENDATION DOES NOT REPRESENT COMMITTEE DECISION

PREPARED BY: ANDREA UHL, JBC STAFF NOVEMBER 21, 2019

JOINT BUDGET COMMITTEE STAFF 200 E. 14TH AVENUE, 3RD FLOOR · DENVER · COLORADO · 80203 TELEPHONE: (303) 866-2061 · TDD: (303) 866-3472 https://leg.colorado.gov/agencies/joint-budget-committee

CONTENTS

Department Overview ...... 1 Department Budget: Recent Appropriations ...... 1 Department Budget: Graphic Overview ...... 2 General Factors Driving the Budget ...... 4 Summary: FY 2019-20 Appropriation & FY 2020-21 Request ...... 6

ISSUES House Bill 19-1309 and the Regulation of Mobile Home Parks ...... 10 House Bill 19-1245: Affordable Housing Funding from Vendor Fee Changes ...... 13

APPENDICES A. Numbers Pages ...... 16 B. Recent Legislation Affecting Department Budget ...... 34 C. Update on Long Bill Footnotes and Requests for Information ...... 40 D. Department Annual Performance Report ...... 53

DEPARTMENT OF LOCAL AFFAIRS

DEPARTMENT OVERVIEW

The Department of Local Affairs (DOLA) is responsible for building community and local government capacity by providing training, technical, and financial assistance to localities. The Department’s budget is comprised of four sections:

 The Executive Director's Office provides leadership and support, including strategic planning, policy management, accounting, budgeting, purchasing, human resources administration, and public information.

 The Division of Property Taxation operates under the leadership of the Property Tax Administrator, who is appointed by the State Board of Equalization. This division: (1) coordinates and administers the implementation of property tax law throughout the state, including issuing appraisal standards and training county assessors; (2) grants exemptions from taxation for eligible entities; and (3) values multi-county companies doing business in Colorado, including railroads, pipelines, and other public utilities. The Board of Assessment Appeals is a quasi-judicial body that hears individual taxpayer appeals concerning the valuation of real and personal property, property tax abatements, and property tax exemptions.

 The Division of Housing administers state and federal affordable housing programs, including: (1) providing funding to private housing developers, housing authorities, and local governments to increase the inventory of affordable housing; and (2) offering rental assistance statewide through local housing authorities and non-profit service organization. This division also regulates the manufacture of factory-built residential and commercial buildings, and approves multi-family construction in counties with no construction codes.

 The Division of Local Government provides technical assistance and information to local government officials. This division also makes state and federal financial resources available to support community infrastructure and services through various statutory formula distributions and grant programs.

DEPARTMENT BUDGET: RECENT APPROPRIATIONS

FUNDING SOURCE FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 * General Fund $30,324,944 $37,800,724 $48,716,177 $44,109,244 Cash Funds 181,821,729 186,097,459 205,682,582 201,180,765 Reappropriated Funds 11,319,391 12,147,248 12,565,874 13,933,439 Federal Funds 80,705,121 81,813,401 82,120,530 82,111,283 TOTAL FUNDS $304,171,185 $317,858,832 $349,085,163 $341,334,731

Full Time Equiv. Staff 179.2 181.1 189.7 204.8

*Requested appropriation.

21-Nov-2019 1 LOC-brf

DEPARTMENT BUDGET: GRAPHIC OVERVIEW

All charts are based on the FY 2019-20 appropriation.

21-Nov-2019 2 LOC-brf

All charts are based on the FY 2018-19 appropriation.

All charts are based on the FY 2019-20 appropriation.

21-Nov-2019 3 LOC-brf GENERAL FACTORS DRIVING THE BUDGET

DISCRETIONARY APPROPRIATIONS OF STATE FUNDS The Department of Local Affairs administers several programs that allocate state funds to local communities. In the last four fiscal years, the General Assembly has increased appropriations, primarily from the General Fund and the Marijuana Tax Cash Fund, to support both ongoing and new initiatives. The following table details the most significant discretionary appropriations of state funds for FY 2019-20.

SIGNIFICANT DISCRETIONARY APPROPRIATIONS FOR FY 2019-20 GENERAL MARIJUANA TAX OTHER STATE PROGRAM FUND CASH FUND FUNDS TOTAL Affordable Housing (grants, loans, and rental subsidies) $15,534,044 $16,126,500 $908,052 $32,568,596 2020 Census Outreach Grant Program1 6,000,000 0 0 6,000,000 Gray and black market marijuana enforcement1 0 5,944,365 0 5,944,365 Fort Lyon Supportive Housing Program 4,993,410 0 0 4,993,410 Local Government Limited Gaming Impact Grants 0 0 5,127,850 5,127,850 Crime prevention initiatives1 4,000,000 0 0 4,000,000 Mental health support for peace officers1 2,000,000 0 0 2,000,000 Defense counsel for defendants in municipal courts1 1,995,520 0 0 1,995,520 Rural economic development initiative 780,000 0 0 780,000 TOTAL $35,302,974 $22,070,865 $6,035,902 $63,409,741 1 These programs were created in the last four fiscal years.

DEDICATED CASH FUND SOURCES The Department awards grants and oversees direct distributions to local governments for various programs with dedicated cash fund revenue sources. The FY 2019-20 appropriation for the Department reflects $167.2 million cash funds for these programs, which comprises about half of the Department’s overall budget. These amounts are shown for informational purposes only, and actual expenditures may differ significantly from the amounts shown in the annual Long Bill. These sources include the following:  Local Government Mineral and Energy Impact Grants and Disbursements – state severance tax and federal mineral lease revenues that are distributed to local governments affected by mineral extraction activities through statutory formulas and grants;  Conservation Trust Fund Disbursements – state lottery proceeds distributed to local entities on a formula basis for parks, recreation, and open space purposes; and  Limited Gaming Impact Grants – limited gaming tax revenues distributed to communities impacted by gaming activities.

MAJOR CONSTITUTIONALLY OR STATUTORILY DEDICATED CASH FUND REVENUES ADMINISTERED BY THE DEPARTMENT OF LOCAL AFFAIRS ($ MILLIONS) FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 REVENUE SOURCE ACTUAL ACTUAL APPROPRIATED FORECAST Severance Taxes $54.1 $112.4 $61.4 $108.5 Federal Mineral Leases 40.0 47.6 50.4 51.2 Conservation Trust Fund 56.3 66.6 50.0 50.0 Limited Gaming Fund 4.9 5.4 5.4 5.4 TOTAL $155.3 $232.0 $167.2 $215.1

21-Nov-2019 4 LOC-brf Severance tax and federal mineral lease revenues are affected by oil, gas, and mineral prices and production volumes, and are thus difficult to project. Further, funds received in one year are not always awarded in the same year and, once awarded, may be expended over multiple years. Because of this, the informational amount included in the Long Bill for Local Government Mineral and Energy Impact Grants and Disbursements is not typically adjusted from year to year.

FEDERAL FUNDS Federal funds comprise about one quarter ($82.1 million) of the Department’s FY 2019-20 appropriation. Most of the Department's federally funded programs do not require state matching funds and are provided at the discretion of federal authorities. Annual expenditures from some of the major ongoing federal grants administered by the Department are summarized in the following table.

ANNUAL EXPENDITURES FROM MAJOR ONGOING FEDERAL GRANTS ADMINISTERED BY THE DEPARTMENT OF LOCAL AFFAIRS ($ MILLIONS) FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 ACTUAL ACTUAL ACTUAL APPROP.1 Federal Department of Housing and Urban Development (HUD) rental subsidies $52.3 $58.2 $60.7 $51.5 HUD affordable housing development1 3.3 3.7 2.6 12.0 Health and Human Services Community Services Block Grant 5.0 6.2 6.0 6.0 HUD Community Development Block Grant1 9.0 7.3 8.3 5.2 HUD Emergency Shelter and Homeless Prevention Programs 1.7 1.7 1.7 1.8 1 The portion of the Community Development Block Grant (CDBG) that is used for affordable housing development in the appropriation year is included in the affordable housing development amount, rather than the CDBG amount. However, actual expenditures reflect the Department’s practice of expending all CDBG funds in the CDBG line item. In addition, the CDBG amount does not include CDBG-DR (disaster recovery) funds, as these are not reflected in the Long Bill.

21-Nov-2019 5 LOC-brf SUMMARY: FY 2019-20 APPROPRIATION & FY 2020-21 REQUEST

DEPARTMENT OF LOCAL AFFAIRS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FUNDS FUND FUNDS FUNDS FUNDS FTE

FY 2019-20 APPROPRIATION: FY 2019-20 Long Bill (SB 19-207) 341,832,311 42,289,825 204,856,082 12,565,874 82,120,530 184.7 Other legislation 7,252,852 6,426,352 826,500 0 0 5.0 TOTAL $349,085,163 $48,716,177 $205,682,582 $12,565,874 $82,120,530 189.7

FY 2020-21 REQUESTED APPROPRIATION: FY 2019-20 Appropriation $349,085,163 48,716,177 $205,682,582 $12,565,874 $82,120,530 189.7 R1 Rural Economic Development 257,248 257,248 0 0 0 0.0 Initiative funding increase R2 Field Services staff increase 216,320 0 0 216,320 0 2.7 R3 Affordable housing administrative 172,620 0 0 172,620 0 2.0 reappropriation R4 Crime Prevention Initiative unused (1,000,000) (1,000,000) 0 0 0 0.0 funds adjustment R5 Gray & Black Market Marijuana (4,000,000) 0 (4,000,000) 0 0 0.0 unused funds adjustment R6 Transfer State Demography Office to 0 0 0 0 0 (0.0) new line R7 Moffat Tunnel District spending (95,000) 0 (95,000) 0 0 0.0 authority adjustment Annualize prior year budget actions 487,696 (73,763) 109,440 294,571 157,448 0.4 Non-prioritized requests 29,950 6,430 4,531 8,460 10,529 0.0 Technical changes (408,052) 0 (408,052) 0 0 0.0 Centrally appropriated line items (682,589) (407,207) (287,523) 205,798 (193,657) 0.0 Annualize prior year legislation (2,728,625) (3,389,641) 174,787 469,796 16,433 10.0 TOTAL $341,334,731 $44,109,244 $201,180,765 $13,933,439 $82,111,283 204.8

INCREASE/(DECREASE) ($7,750,432) ($4,606,933) ($4,501,817) $1,367,565 ($9,247) 15.1 Percentage Change (2.2%) (9.5%) (2.2%) 10.9% (0.0%) 8.0%

R1 RURAL ECONOMIC DEVELOPMENT INITIATIVE (REDI) FUNDING INCREASE: The request includes an ongoing increase of $257,248 General Fund for the Rural Economic Development Initiative (REDI) grant program. The REDI program was established in FY 2015-16 through a Long Bill amendment to provide grants to local governments in rural districts for economic development activities. For fiscal years 2015-16 through 2018-19, the General Assembly appropriated $750,000 General Fund annually; $780,000 was appropriated in FY 2019-20. Requests for grants have exceeded the amount of funding available in the last several funding cycles; this request will enable the Department to allocate grants to approximately five additional communities each year or offer higher levels of financial support to each community.

R2 FIELD SERVICES STAFF INCREASE: The request includes an ongoing increase of $216,971 reappropriated funds transferred from the Energy Impact Grants line item to expand the Division of Local Government’s (DLG) field services team by 2.7 FTE in FY 2020-21. This team provides technical assistance and support to local governments, primarily in rural areas, in the form of strategic planning, disaster assistance, fiscal management, and general government management. The team currently employs eight regional managers and four regional assistants, and has not increased in size

21-Nov-2019 6 LOC-brf in the last decade. The field services team is currently unable to respond to all requests for assistance it receives due to the State’s growing population, increasing frequency of natural disasters, and large service area that each staff member covers. The additional staff would allow the team to create a new service region on the Western Slope; new staff would work out of existing space in the Grand Junction office and would not require additional leased space.

R3 AFFORDABLE HOUSING ADMINISTRATION REAPPROPRIATION: The request includes a $172,620 increase in reappropriated funds from the Affordable Housing Construction Grants and Loans line item to administer the affordable housing program. This funding will allow the Department to utilize the full 3.0 percent of administrative costs associated with the Housing Development Grant (HDG) Fund permitted by statute. The Affordable Housing Grants and Loans line item, the mechanism by which State funds are deposited in the HDG Fund and then continuously appropriated, consists of $9.2 million General Fund and $15.3 million from the Marijuana Tax Cash Fund in FY 2019-20. An additional $7.3 million General Fund will be transferred to the HDG Fund in FY 2020- 21 in accordance with H.B. 19-1245. Based on the current funds appropriated, the Division is projecting to be $172,260 below its administrative cap of 3.0 percent as allowed by statute unless allowable funds are increased per this request.

R4 CRIME PREVENTION INITIATIVE UNUSED FUNDS ADJUSTMENT: The request includes an ongoing General Fund reduction of $1,000,000 to the Crime Prevention Initiative Small Business Lending (“CCPI Lending”) program. The CCPI Lending Program provides loans to specific neighborhoods in Aurora and Colorado Springs representing underserved markets. Annual demand for loans has not met the program appropriation level. Of the $1,000,000 appropriated annually since FY 2017-18, only $97,773 and $281,740 was loaned out in FY 2017-18 and FY 2018-19, respectively. Unexpended dollars in each year remain available to the Department for allocation in future fiscal years. DLG projects that even with strong growth in loan activity, the program will be able to meet future loan demand through the program’s September 1, 2023 repeal date without further appropriations.

R5 GRAY & BLACK MARKET MARIJUANA UNUSED FUNDS ADJUSTMENT: The request proposes a one-time reduction to the Gray and Black Market Marijuana Enforcement Grant Program of $4.0 million from the Marijuana Tax Cash Fund. The Gray and Black Grant Program provides grants to local governments, law enforcement agencies, and district attorneys to assist with the enforcement of unlicensed and illegal marijuana cultivation and related crimes. The program receives an annual appropriation of approximately $6 million and is able to allocate grant funds over two years. Grant spending has not met the program appropriation level; the Department has therefore rolled forward millions of dollars in funding each fiscal year. The one-time reduction is proposed to realign the program’s level of funding with actual grant utilization.

R6 TRANSFER STATE DEMOGRAPHY OFFICE TO NEW LINE ITEM: The request proposes a budget- neutral transfer of the State Demography Office (SDO) and related funding from the Department’s Division of Local Government to the Executive Director’s Office in the FY 2020-21 budget. The SDO does not currently have its own line item in the Long Bill. As a result, this office is difficult for both legislators and state agencies to locate in the current Long Bill organizational structure. The Department wants to significantly increase promotion of the services of the State Demographer and her staff to all state agencies and other potential partners; relocating the SDO in its own line item within the Executive Director’s Office is a critical component of broader promotion. The proposed transfer includes 6.0 FTE and related funds in the amount of $553,291 for personal services and

21-Nov-2019 7 LOC-brf $14,300 for operating expenses. Rather than report to senior management within the Division of Local Government, the State Demographer would report to the Department’s Executive Director.

R7 MOFFAT TUNNEL DISTRICT SPENDING AUTHORITY ADJUSTMENT: The request proposes an ongoing reduction of $95,000 cash funds for the Moffat Tunnel Improvement District. The Department has served as the custodian of the District since the adoption of S.B. 96-233. The District owns the Moffat train tunnel and manages leases with Union Pacific Railroad and Century Link; these entities pay the District $12,000 and $14,659 per year, respectively. Moneys received from both leases are deposited in the Moffat Tunnel Cash Fund. This line item has only been expending about $70 annually since FY 2012-13, with an exception in FY 2017-18 when $5,456 was paid to respond to a Request for Information to the JBC. The proposed reduction will more accurately reflect anticipated future program expenditures.

NON-PRIORITIZED REQUESTS: The request includes adjustments related to non-prioritized requests that originate in the Governor’s Office of Information Technology (OIT) and the Department of Personnel.

NON-PRIORITIZED REQUESTS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FTE FUNDS FUND FUNDS FUNDS FUNDS OIT Budget request package $27,500 $7,590 $4,531 $9,333 $6,046 0.0 Paid family leave 11,203 6,720 0 0 4,483 0.0 Annual fleet supplemental true-up (8,753) (7,880) 0 (873) 0 0.0 TOTAL $29,950 $6,430 $4,531 $8,460 $10,529 0.0

CENTRALLY APPROPRIATED LINE ITEMS: The request includes adjustments to centrally appropriated line items, as detailed in the table below.

CENTRALLY APPROPRIATED LINE ITEMS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FTE FUNDS FUND FUNDS FUNDS FUNDS Health, life, and dental adjustment $139,971 $39,027 $37,339 $52,269 $11,336 0.0 CORE adjustment 125,963 39,710 16,775 45,865 23,613 0.0 Legal services adjustment 111,496 287,586 (165,129) (6,098) (4,863) 0.0 Capitol Complex leased space adjustment 35,676 19,022 (1,752) 18,911 (505) 0.0 AED adjustment 33,836 1,845 3,918 12,598 15,475 0.0 SAED adjustment 33,836 1,845 3,918 12,598 15,475 0.0 Indirect cost assessment adjustment 3,689 (3,689) 890 5,080 1,408 0.0 Short-term disability adjustment 1,126 18 154 419 535 0.0 Payments to OIT adjustment (688,526) (651,700) (108,781) 236,061 (164,106) 0.0 Salary survey adjustment (449,759) (132,230) (65,215) (159,664) (92,650) 0.0 PERA Direct Distribution (10,942) (4,013) (2,825) (4,729) 625 0.0 Payment to risk management / property (10,748) (3,172) (3,081) (4,495) 0 0.0 funds adjustment Workers’ compensation adjustment (8,207) (1,456) (3,734) (3,017) 0 0.0 TOTAL ($682,589) ($407,207) ($287,523) $205,798 ($193,657) 0.0

ANNUALIZE PRIOR YEAR LEGISLATION: The request includes adjustments for the second-year impact of prior year legislation.

21-Nov-2019 8 LOC-brf ANNUALIZE PRIOR YEAR LEGISLATION TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FTE FUNDS FUND FUNDS FUNDS FUNDS HB 19-1263 Controlled Substance $1,866,208 $1,866,208 $0 $0 $0 0.9 Possession HB 18-1326 Transition from Institutional 573,240 573,240 0 0 0 0.0 Settings HB 19-1245 Vendor Fee Changes 482,700 42,180 0 440,520 0 6.3 HB 19-1309 Regulation of Mobile Home 213,571 0 213,571 0 0 2.3 Parks SB18-200 PERA 80,765 23,840 11,216 29,276 16,433 0.0 HB 19-1292 Colorado Resiliency Office 18,907 18,907 0 0 0 0.3 HB 19-1009 Substance Use Disorder 0 0 0 0 0 0.1 Recovery HB 19-1239 2020 Census Outreach (5,914,016) (5,914,016) 0 0 0 0.1 SB 18-191 Gaming Impacts Study (50,000) 0 (50,000) 0 0 0.0 TOTAL ($2,728,625) ($3,389,641) $174,787 $469,796 $16,433 10.0

TECHNICAL CHANGES: The request includes one technical change as shown below.

TECHNICAL CHANGES TOTAL GENERAL CASH FTE FUNDS FUND FUNDS Eliminate HAPT Funding ($408,052) $0 ($408,052) 0.0 TOTAL ($408,052) $0 ($408,052) 0.0

ANNUALIZE PRIOR YEAR BUDGET ACTIONS: The request includes adjustments for the second-year impact of prior year budget actions.

ANNUALIZE PRIOR YEAR BUDGET ACTIONS TOTAL GENERAL CASH REAPPROPRIATED FEDERAL FTE FUNDS FUND FUNDS FUNDS FUNDS Annualize prior year salary survey $768,230 $226,237 $109,440 $275,105 $157,448 0.0 Annualize NP3/HCPF NP6 14,231 0 0 14,231 0 0.3 Annualize NP1 (IRSS)/HCPF R14 5,235 0 0 5,235 0 0.1 Annualize R4 Census 2020 Funding (300,000) (300,000) 0 0 0 0.0 TOTAL $487,696 ($73,763) $109,440 $294,571 $157,448 0.4

21-Nov-2019 9 LOC-brf ISSUE: HOUSE BILL 19-1309 AND THE REGULATION OF MOBILE HOME PARKS

This issue brief provides an overview of the State’s role in regulating mobile home parks, including the Department of Local Affairs’ Division of Housing’s (DoH) responsibilities created by the passage of House Bill 19-1309.

SUMMARY

 House Bill 19-1309 establishes new rights for mobile home park residents and a regulatory structure to protect these.

 Under the provisions of the bill, the Department of Local Affairs assumes various new responsibilities. It is expected to require new staff who will be supported through fees on mobile home park owners.

 The bill created a cash fund to collect fees pursuant to the program and pay for program administration costs. This cash fund was created with continuous spending authority; the Department has expressed the desire to include this line item in the Long Bill for informational purposes with a letternote.

RECOMMENDATION Staff recommends that the Committee consider introducing legislation that would remove the continuous spending authority and replace it with an annual appropriation. Staff recommends that the Committee discuss the potential impacts of this action with the Department at their budget hearing.

DISCUSSION

ISSUE BACKGROUND The power imbalance between mobile home park residents and landlords is an issue that has gained national attention amid growing concerns over affordable housing. The Division of Housing estimates that approximately 100,000 Coloradans live in mobile homes spread over 878 mobile home parks. Mobile home park residents typically have below average incomes; mobile homes are therefore a critical component of the affordable housing spectrum. Momentum for change in Colorado started with a group of Boulder homeowners that formed the statewide Colorado Coalition of Manufactured Homeowners. Recognizing the need for a tangible report to prompt legislative action, the group filed a “sunrise review application” with the state Department of Regulatory Agencies (DORA) proposing a professional licensure requirement for mobile home park owners and managers.

As part of the application, the coalition collected specific, verifiable examples of park owners and managers harming homeowners, conducted site visits, and collected witness testimony in writing and through media reports. Common allegations cited in the DORA report include:

21-Nov-2019 10 LOC-brf  Retaliation: “Comply or vacate” notices for trivial and sometimes nonexistent rules would be issued, sometimes against homeowners who had testified publicly about park conditions or been active in the formation of a homeowners’ association.  Threat of eviction by posting “quit or cure” notices that sometimes, especially in cases where the homeowner was hampered by a language barrier, resulted in the homeowner simply selling the mobile home at a loss to avoid dealing with the issue.  Improperly passing off responsibility for maintenance and repair to homeowners, or doing the work and then billing the homeowner for it.  Trespassing on homeowners’ property and harassing homeowners, especially those with language barriers, by telling them it’s against the law or park rules to join the park’s homeowners association.  Predatory towing of vehicles without notice.  Unexpected charging of fees without discernible improvement in the property.

The DORA report concluded that harm is undoubtedly occurring in mobile home communities. However, because this harm is due to a lack of enforcement of existing laws and bad actors exploiting a loose regulatory structure, rather than a lack of professional competence among mobile home community owners and managers, DORA recommended against the imposition of licensure or other occupational requirements. Nonetheless, the findings in the DORA report set the stage for future legislative action to address the issues.

HOUSE BILL 19-1309 House Bill 19-1309 grants additional power to counties and municipalities to enact ordinances and regulations to oversee mobile home parks through the Mobile Home Park Act (Section 38-12-200.1, C.R.S.), extends the time period between the notice of nonpayment of rent and the termination of tenancy from five to ten days, and extends the time a resident has to move or sell their mobile home and vacate the park after an eviction order from 48 hours to at least 30 days, up to 60 days.

The bill also created the Mobile Home Park Act Dispute Resolution and Enforcement Program (Section 38-12-1101, C.R.S.) and corresponding fund (Section 38-12-1110, C.R.S.), which provides parties with a means of seeking recourse outside of the courts. The legislation was modeled after a similar program in Washington, which found that complaints spiked within the first year of creation and then decreased dramatically.

DIVISION OF HOUSING’S ROLE House Bill 19-1309 added enforcement of the Mobile Home Park Act and implementation and oversight of the Mobile Home Park Act Dispute Resolution and Enforcement Program to the Division’s functions (Section 24-32-705 (1) (u), C.R.S.). The Division’s tasks include those related to creation of the program, such as designing a notice summarizing homeowner rights to be posted by the landlord, producing and distributing educational materials (both in English and Spanish), penalizing landlords that have not appropriately posted the required notice, creating a database of mobile home parks, and collecting registration fees. On an ongoing basis, the Division will take complaints, conduct investigations, make determinations, impose penalties, and participate in administrative dispute resolutions when there are alleged violations of the Mobile Home Park Act.

House Bill 19-1309 also outlines the process for handling complaints, which can be filed beginning May 1, 2020, and requires the Division to maintain a database of mobile home parks that have had

21-Nov-2019 11 LOC-brf complaints filed against them under the program. The Division will be required to prepare an annual report describing outreach efforts, the number of complaints received and resolved by the Division, and the nature of those complaints.

This program will require an additional 2.1 FTE in FY 2019-20 and 5.5 FTE in the years thereafter. Funds will be collected through registration fees for mobile home park operators; this amount is set at $24 per occupied mobile home. As of April 2019, the Division estimates that there are 56,347 active mobile home sites at 878 mobile home parks throughout Colorado; the U.S. Census Bureau American Community Survey estimates that 60.9 percent of those are owner occupied. Registration fees can therefore be assessed on 34,320 units, resulting in $823,680 in revenue annually. Landlords are allowed to pass up to half of the fee onto the tenants. Initial registrations of mobile home parks are required to be filed by February 1, 2020; the Division of Housing is required to have the registration database up and running by the same date.

IMPLEMENTATION UPDATE The Division of Housing recently completed the first round of the public rulemaking process to clarify statutory requirements; these rules will be effective December 30th pending approval by the Attorney General. Stakeholder meetings were held in El Paso, Larimer, Eagle, and Lake Counties, which have the highest number of mobile home parks, as well as Denver County. A second round of rulemaking regarding the complaint process will take place in the coming months.

The Division is in the process of setting up the registration database. The Division of Housing, with help from the Division of Property Taxation, has been working with county assessors to identify and locate mobile home parks across the state. The DoH indicated that it has been difficult to get information from some counties. The Division also reports it has been particularly challenged by parks that host a combination of mobile homes, recreational vehicles, and campers in determining whether they are required to register under the new rules.

The Division hired two new employees as anticipated in the Legislative Council Staff fiscal note for H.B. 19-1309 in the current fiscal year and will hire additional staff in July. The Division is expecting a flood of complaints to be filed through the program on May 1st; they expect that number to drop to roughly 400 per year after the initial launch.

CASH FUND CREATED BY H.B. 19-1309 PROVIDES CONTINUOUS SPENDING AUTHORITY The bill created a cash fund to collect fees pursuant to the program and pay for program administration costs. This cash fund was created with continuous spending authority; the Department has expressed the desire to include this line item in the Long Bill for informational purposes with a letternote. In order for the JBC to better monitor this program, staff recommends that the fund be subject to annual appropriation as previously stated.

21-Nov-2019 12 LOC-brf INFORMATIONAL ISSUE: HOUSE BILL 19-1245; AFFORDABLE HOUSING FUNDING FROM VENDOR FEE CHANGES

This issue brief provides an overview of House Bill 19-1245 and its effect on the Department of Local Affairs’ Division of Housing. The bill, known as the “Affordable Housing Act of 2019”, will more than double the amount of funding the Division currently manages through the Housing Development Grant Fund.

SUMMARY

 A vendor fee is an amount that a retailer is permitted to retain for its expenses incurred in collecting and remitting the state sales tax.

 House Bill 19-1245 makes changes to the state’s vendor fee that will result in additional sales tax revenue to the state.

 Most of the new revenue will go to the Housing Development Grant Fund, more than doubling the amount of funding the Division of Housing currently manages by FY 2021-22.

 The increase in revenue will create additional work for the Division and require 8.0 FTE to be hired; 3.0 of these are expected to be located outside of the Front Range.

 To create efficiencies, DOLA will allocate larger buckets of funding per project with this revenue, thus reducing the need to hire a greater number of FTE.

DISCUSSION

ISSUE BACKGROUND According to the Federation of Tax Administrators, 28 states had some type of vendor fee and 16 of those had a cap on how much businesses can keep as of January 2019. The purpose of a state sales tax vendor fee is to assist retailers in complying with the obligation to collect and remit sales tax. As reflected in the fiscal note for H.B. 19-1245, in Colorado, less than one percent of all retailers collect nearly two-thirds of the total $107 million in vendor fees retained. In other words, large retailers are the main beneficiaries of the vendor fee. Research by the Bell Policy Center found that Colorado’s high vendor fee percentage combined with no cap on the amount collected results in Colorado businesses keeping more money from vendor fees than all but a handful of other states. Based on these factors, it was determined that making modifications to the state vendor fee could be a means of significantly increasing state sales tax revenue. Additionally, H.B. 19-1245 declares that affordable housing is among Colorado’s most significant problems; aligning state sales tax vendor fee policy with national norms provides much needed revenue to fund this pressing issue.

HOUSE BILL 19-1245 House Bill 19-1245 increases the state vendor fee allowance on sales tax accounts from the current rate of 3.33 percent to 4.0 percent starting on January 1, 2020. The legislation also caps the vendor fee

21-Nov-2019 13 LOC-brf at $1,000 per monthly filing period per retailer; a retailer with multiple locations in the state is counted as one retailer for purposes of the vendor fee allowance cap. The revenue impact to the state is estimated at $23.1 million for FY 2019-20, $47.9 million for FY 2020-21, and $49.4 million for FY 2021-22 as of the Legislative Council Staff (LCS) June 2019 Economic & Revenue Forecast.

A portion of the net revenue increase from the vendor fee change is allocated to the Housing Development Grant Fund in the first two fiscal years of the change with the remainder retained in the General Fund. Starting in FY 2021-22, the entirety of the revenue derived from the vendor fee change will be transferred to the HDG Fund. At least one-third of this revenue will be awarded to affordable housing projects directed towards households with incomes less than or equal to 30 percent of the area median household income. Additional revenue to the HDG Fund is estimated at $7.9 million for FY 2019-20, $8.2 million for FY 2020-21, and $49.5 million for FY 2021-22 per the LCS September 2019 Economic & Revenue Forecast.

HOUSING DEVELOPMENT GRANT FUND AND DIVISION OF HOUSING’S ROLE The Division of Housing administers the Housing Development Grant Fund, which uses state dollars to promote development of affordable housing through grant and loan programs. These dollars, combined with federal funds, are administered through the Affordable Housing Grants and Loans line item. Affordable housing in Colorado is generally developed and administered by local authorities, rather than by the State, and the majority of federal funds for affordable housing are distributed directly to local housing authorities. However, the State is a partner in affordable housing development initiatives throughout the state that are consistent with state housing priorities.

Most of the funding through the HDG Fund is for front-end construction support, which is typically tied to a requirement that the new housing serve those at 60 percent of area median income or below and remain affordable for at least 30 years. If it participates in a project, the Department typically serves as a “gap financier,” helping to buy down housing construction costs, as well as assisting locals to move the project forward. If they wish to access state funds, local housing authorities, and private for-profit and non-profit developers, submit a funding application that can apply to a number of the Division’s fund sources, including the Housing Grants and Loan Program, the Community Development Block Grant funds it administers, and Federal HOME grants, as well as some smaller sources of federal funds. Department staff determine whether the project is consistent with state priorities and feasible and identifies the most appropriate mix of funds. Recommendations are then submitted to the State Housing Board.

The Division currently manages $36.5 million through the Affordable Housing Grants and Loans line item; sources of funding are:  $9.2 million General Fund  $15.3 million cash funds from the Marijuana Tax Cash Fund  $12.0 million federal funds

IMPACT OF H.B. 19-1245 ON THE DIVISION OF HOUSING House Bill 19-1245 will more than double the amount of funding managed by DOLA’s Division of Housing and therefore requires additional staff to determine applicant need, evaluate projects for funding, and manage grant and loan contracts. To create efficiencies, DOLA will allocate larger buckets of funding per project with this revenue, thus reducing the need to hire a greater number of FTE.

21-Nov-2019 14 LOC-brf

The bill will significantly increase staffing for the Division of Housing, including a partial-year impact of 2.7 FTE for FY 2020-21 and 8.0 FTE in subsequent years, 3.0 of which will be located outside of the Front Range. This equates to a 13 percent increase in the Division’s current staffing appropriation. Hiring of FTE will be tiered to reflect a ramp-up in revenue flows. The legislation also allocates funds starting in FY 2021-22 for consultants that will be contracted to provide technical assistance to local governments across DOLA’s eight regions throughout the state. Related expenditures for DOLA are estimated at $39,400 for FY 2019-20, $273,869 for FY 2020-21, and $936,046 for FY 2021-22. The legislation also causes expenditures within the Department of Revenue, primarily for programming changes to the GenTax software system and additional FTE in the Taxpayer Services call center. These costs are estimated at $296,381 in FY 2019-20 and $49,289 in the years thereafter.

21-Nov-2019 15 LOC-brf Appendix A: Numbers Pages

FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Request vs. Actual Actual Appropriation Request Appropriation

DEPARTMENT OF LOCAL AFFAIRS Richard Garcia, Executive Director (1) EXECUTIVE DIRECTOR'S OFFICE The Executive Director's Office is responsible for the management and administration of the Department, including accounting, budgeting, human resources, and other miscellaneous functions statutorily assigned to the Department such as administration of the Moffat Tunnel Improvement District. Cash fund sources include the Moffat Tunnel Cash Fund, the Marijuana Tax Cash Fund, and various other cash fund sources that support the other divisions. Reappropriated fund sources include transfers from the Local Government Mineral and Energy Impact Grants and Disbursements line item in the Division of Local Government and indirect cost recoveries. Personal Services 1,279,961 1,387,595 1,479,288 1,521,406 FTE 11.7 12.8 14.2 14.2 Reappropriated Funds 1,279,961 1,387,595 1,479,288 1,521,406

Health, Life, and Dental 1,386,855 1,125,759 1,929,469 2,070,344 General Fund 382,455 427,645 624,073 664,004 Cash Funds 179,360 115,873 306,816 344,155 Reappropriated Funds 594,338 582,241 598,386 650,655 Federal Funds 230,702 0 400,194 411,530

Short-term Disability 20,568 16,038 23,111 24,249 General Fund 4,801 6,052 7,365 7,395 Cash Funds 2,891 2,417 3,167 3,321 Reappropriated Funds 10,002 7,569 8,249 8,668 Federal Funds 2,874 0 4,330 4,865

21-Nov-2019 16 LOC-brf Appendix A: Numbers Pages

FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Request vs. Actual Actual Appropriation Request Appropriation

S.B. 04-257 Amortization Equalization Disbursement 551,389 484,830 697,504 731,663 General Fund 131,060 177,233 220,035 222,203 Cash Funds 73,102 73,405 96,458 100,376 Reappropriated Funds 273,005 234,192 249,414 262,012 Federal Funds 74,222 0 131,597 147,072

S.B. 06-235 Supplemental Amortization Equalization Disbursement 557,227 483,914 697,504 731,663 General Fund 131,060 177,233 220,035 222,203 Cash Funds 78,930 73,405 96,458 100,376 Reappropriated Funds 273,005 233,276 249,414 262,012 Federal Funds 74,232 0 131,597 147,072

PERA Direct Distribution 0 0 334,253 323,311 General Fund 0 0 99,448 95,435 Cash Funds 0 0 47,722 44,897 Reappropriated Funds 0 0 121,924 117,195 Federal Funds 0 0 65,159 65,784

Salary Survey 184,162 317,015 449,759 318,470 General Fund 49,971 81,338 132,230 94,007 Cash Funds 30,090 49,551 65,215 44,225 Reappropriated Funds 104,101 186,126 159,664 115,440 Federal Funds 0 0 92,650 64,798

21-Nov-2019 17 LOC-brf Appendix A: Numbers Pages

FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Request vs. Actual Actual Appropriation Request Appropriation

Parental Leave 0 0 0 11,203 General Fund 0 0 0 6,720 Cash Funds 0 0 0 0 Reappropriated Funds 0 0 0 0 Federal Funds 0 0 0 4,483

Workers' Compensation 124,934 152,057 125,130 116,923 General Fund 115,553 35,184 42,819 41,363 Cash Funds 4,177 36,233 28,426 24,692 Reappropriated Funds 5,204 80,640 53,885 50,868

Operating Expenses 119,793 131,297 133,829 133,829 General Fund 0 0 0 0 Reappropriated Funds 119,793 131,297 133,829 133,829

Legal Services 163,588 151,120 486,050 796,494 General Fund 145,682 133,911 242,263 529,849 Cash Funds 16,018 15,321 212,826 246,645 Reappropriated Funds 1,888 1,888 26,098 20,000 Federal Funds 0 0 4,863 0

Payment to Risk Management and Property Funds 59,569 63,127 60,465 49,717 General Fund 55,450 14,609 20,760 17,588 Cash Funds 3,616 15,041 13,581 10,500 Reappropriated Funds 503 33,477 26,124 21,629

Vehicle Lease Payments 82,572 93,219 102,033 93,280 * General Fund 77,341 93,219 91,668 83,788 Reappropriated Funds 5,231 0 10,365 9,492

21-Nov-2019 18 LOC-brf Appendix A: Numbers Pages

FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Request vs. Actual Actual Appropriation Request Appropriation

Information Technology Asset Maintenance 65,305 74,950 74,950 74,950 General Fund 29,913 28,713 28,713 28,713 Cash Funds 12,917 11,530 11,530 11,530 Reappropriated Funds 22,475 34,707 34,707 34,707

Leased Space 62,715 57,357 60,000 60,000 General Fund 22,376 22,376 20,655 20,655 Reappropriated Funds 40,339 34,981 39,345 39,345

Capitol Complex Leased Space 771,525 560,193 656,265 691,941 General Fund 149,263 129,621 200,604 219,626 Cash Funds 47,644 133,486 112,115 110,363 Reappropriated Funds 539,060 297,086 176,602 195,513 Federal Funds 35,558 0 166,944 166,439

Payments to OIT 1,898,848 1,658,034 2,602,351 1,940,245 * General Fund 621,885 349,696 1,256,025 607,146 Cash Funds 297,632 653,032 365,504 261,254 Reappropriated Funds 514,557 655,306 485,515 734,598 Federal Funds 464,774 0 495,307 337,247

CORE Operations 413,561 352,879 393,438 519,401 General Fund 184,381 81,654 103,638 143,348 Cash Funds 0 84,074 68,802 85,577 Reappropriated Funds 202,320 187,151 130,418 176,283 Federal Funds 26,860 0 90,580 114,193

Moffat Tunnel Improvement District 68 85 100,000 5,000 * Cash Funds 68 85 100,000 5,000

21-Nov-2019 19 LOC-brf Appendix A: Numbers Pages

FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Request vs. Actual Actual Appropriation Request Appropriation

State Demography Office 0 0 0 567,591 FTE 0.0 0.0 0.0 6.0 General Fund 0 0 0 468,243 Cash Funds 0 0 0 80,958 Federal Funds 0 0 0 18,390

Merit Pay 72,861 0 0 0 General Fund 19,790 0 0 0 Cash Funds 12,295 0 0 0 Reappropriated Funds 40,776 0 0 0 Federal Funds 0 0 0 0

TOTAL - (1) Executive Director's Office 7,815,501 7,109,469 10,405,399 10,781,680 3.6% FTE 11.7 12.8 14.2 20.2 42.3% General Fund 2,120,981 1,758,484 3,310,331 3,472,286 4.9% Cash Funds 758,740 1,263,453 1,528,620 1,473,869 (3.6%) Reappropriated Funds 4,026,558 4,087,532 3,983,227 4,353,652 9.3% Federal Funds 909,222 0 1,583,221 1,481,873 (6.4%)

21-Nov-2019 20 LOC-brf Appendix A: Numbers Pages

FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Request vs. Actual Actual Appropriation Request Appropriation

(2) PROPERTY TAXATION This section provides funding for the Division of Property Taxation, the State Board of Equalization, and the Board of Assessment Appeals. Cash fund sources include the Property Tax Exemption Fund and the Board of Assessment Appeals Cash Fund. Reappropriated fund sources include transfers from the Local Government Mineral and Energy Impact Grants and Disbursements line item in the Division of Local Government and indirect cost recoveries. Division of Property Taxation 2,676,228 2,856,194 2,984,249 3,092,028 FTE 34.3 35.6 37.2 37.2 General Fund 1,017,820 1,753,939 1,798,386 1,866,894 Cash Funds 766,846 892,441 964,358 992,358 Reappropriated Funds 891,562 209,814 221,505 232,776

State Board of Equalization 12,856 12,856 12,856 12,856 General Fund 12,856 12,856 12,856 12,856

Board of Assessment Appeals 529,821 567,410 643,697 658,826 FTE 7.4 7.4 13.2 13.2 General Fund 294,652 462,400 525,607 538,214 Cash Funds 224,376 105,010 118,090 120,612 Reappropriated Funds 10,793 0 0 0

Indirect Cost Assessment 263,928 157,485 179,372 179,372 Cash Funds 132,476 127,659 144,392 144,392 Reappropriated Funds 131,452 29,826 34,980 34,980

TOTAL - (2) Property Taxation 3,482,833 3,593,945 3,820,174 3,943,082 3.2% FTE 41.7 43.0 50.4 50.4 (0.0%) General Fund 1,325,328 2,229,195 2,336,849 2,417,964 3.5% Cash Funds 1,123,698 1,125,110 1,226,840 1,257,362 2.5% Reappropriated Funds 1,033,807 239,640 256,485 267,756 4.4%

21-Nov-2019 21 LOC-brf Appendix A: Numbers Pages

FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Request vs. Actual Actual Appropriation Request Appropriation

(3) DIVISION OF HOUSING This division administers state and federal affordable housing programs and provides related financial and technical assistance to communities. This division also regulates the manufacture of factory-built residential and commercial buildings. Cash fund sources include the Marijuana Tax Cash Fund, the Building Regulation Fund, the Homeless Prevention Activities Program Fund, and the Private Activity Bond Allocations Fund. Reappropriated fund sources include a transfer from the Department of Health Care Policy and Financing for home modifications, and internal transfers from the Affordable Housing Construction Grants and Loans line item in this division and from the Local Government Mineral and Energy Impact Grants and Disbursements line item in the Division of Local Government. (A) Community and Non-Profit Services (i) Administration Personal Services 1,381,172 523,187 2,546,528 2,642,215 FTE 21.9 4.5 28.4 28.6 General Fund 348,714 505,825 582,383 606,264 Cash Funds 17,169 17,362 17,699 18,203 Reappropriated Funds 101,264 0 47,111 53,829 Federal Funds 914,025 0 1,899,335 1,963,919

Operating Expenses 186,983 50,102 454,094 449,583 General Fund 36,278 47,602 47,114 42,603 Cash Funds 2,500 2,500 2,500 2,500 Reappropriated Funds 0 0 64,385 64,385 Federal Funds 148,205 0 340,095 340,095

SUBTOTAL - 1,568,155 573,289 3,000,622 3,091,798 3.0% FTE 21.9 4.5 28.4 28.6 0.7% General Fund 384,992 553,427 629,497 648,867 3.1% Cash Funds 19,669 19,862 20,199 20,703 2.5% Reappropriated Funds 101,264 0 111,496 118,214 6.0% Federal Funds 1,062,230 0 2,239,430 2,304,014 2.9%

21-Nov-2019 22 LOC-brf Appendix A: Numbers Pages

FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Request vs. Actual Actual Appropriation Request Appropriation

(ii) Community Services Low Income Rental Subsidies 61,670,081 66,543,030 58,636,581 59,210,714 FTE 0.0 18.8 0.0 0.0 General Fund 2,660,926 3,681,295 6,334,044 6,908,177 Cash Funds 776,279 2,002,470 826,500 826,500 Federal Funds 58,232,876 60,859,265 51,476,037 51,476,037

Homeless Prevention Programs 1,794,584 1,843,017 1,984,430 1,984,430 FTE 0.9 0.7 0.0 0.0 Cash Funds 134,721 125,126 170,000 170,000 Federal Funds 1,659,863 1,717,891 1,814,430 1,814,430

SUBTOTAL - 63,464,665 68,386,047 60,621,011 61,195,144 0.9% FTE 0.9 19.5 0.0 0.0 0.0% General Fund 2,660,926 3,681,295 6,334,044 6,908,177 9.1% Cash Funds 911,000 2,127,596 996,500 996,500 0.0% Federal Funds 59,892,739 62,577,156 53,290,467 53,290,467 0.0%

(iii) Fort Lyon Supportive Housing Program Program Costs 4,983,510 4,985,067 4,993,410 4,996,662 FTE 0.9 0.9 1.0 1.0 General Fund 4,983,510 4,985,067 4,993,410 4,996,662

SUBTOTAL - 4,983,510 4,985,067 4,993,410 4,996,662 0.1% FTE 0.9 0.9 1.0 1.0 0.0% General Fund 4,983,510 4,985,067 4,993,410 4,996,662 0.1%

21-Nov-2019 23 LOC-brf Appendix A: Numbers Pages

FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Request vs. Actual Actual Appropriation Request Appropriation

SUBTOTAL - (A) Community and Non-Profit Services 70,016,330 73,944,403 68,615,043 69,283,604 1.0% FTE 23.7 24.9 29.4 29.6 0.7% General Fund 8,029,428 9,219,789 11,956,951 12,553,706 5.0% Cash Funds 930,669 2,147,458 1,016,699 1,017,203 0.0% Reappropriated Funds 101,264 0 111,496 118,214 6.0% Federal Funds 60,954,969 62,577,156 55,529,897 55,594,481 0.1%

(B) Field Services Affordable Housing Program Costs 1,630,538 1,263,970 1,966,767 2,707,331 * FTE 23.8 14.0 23.6 32.2 General Fund 300,284 152,885 160,955 209,313 Cash Funds 75,361 76,132 77,817 80,087 Reappropriated Funds 841,375 1,023,829 1,148,337 1,816,641 Federal Funds 413,518 11,124 579,658 601,290

Affordable Housing Construction Grants and Loans pursuant to Section 24-32-721, C.R.S. 26,423,760 30,780,157 36,528,793 36,528,793 FTE 0.0 9.4 0.0 0.0 General Fund 8,200,000 9,200,000 9,200,000 9,200,000 Cash Funds 14,523,721 13,297,530 15,300,000 15,300,000 Federal Funds 3,700,039 8,282,627 12,028,793 12,028,793

Housing Assistance for Persons Transitioning from the Criminal or Juvenile Justice Systems 0 0 908,052 500,000 Cash Funds 0 0 408,052 0 Reappropriated Funds 0 0 500,000 500,000

21-Nov-2019 24 LOC-brf Appendix A: Numbers Pages

FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Request vs. Actual Actual Appropriation Request Appropriation

Manufactured Buildings Program 733,696 712,406 761,175 794,212 FTE 7.4 6.9 7.3 9.6 Cash Funds 733,696 712,406 761,175 794,212

SUBTOTAL - (B) Field Services 28,787,994 32,756,533 40,164,787 40,530,336 0.9% FTE 31.2 30.3 30.9 41.8 35.3% General Fund 8,500,284 9,352,885 9,360,955 9,409,313 0.5% Cash Funds 15,332,778 14,086,068 16,547,044 16,174,299 (2.3%) Reappropriated Funds 841,375 1,023,829 1,648,337 2,316,641 40.5% Federal Funds 4,113,557 8,293,751 12,608,451 12,630,083 0.2%

(C) Indirect Cost Assessments Indirect Cost Assessments 586,714 283,145 721,244 723,542 Cash Funds 184,831 236,550 108,729 109,619 Reappropriated Funds 19,064 46,595 141,110 141,110 Federal Funds 382,819 0 471,405 472,813

SUBTOTAL - (C) Indirect Cost Assessments 586,714 283,145 721,244 723,542 0.3% FTE 0.0 0.0 0.0 0.0 0.0% Cash Funds 184,831 236,550 108,729 109,619 0.8% Reappropriated Funds 19,064 46,595 141,110 141,110 0.0% Federal Funds 382,819 0 471,405 472,813 0.3%

TOTAL - (3) Division of Housing 99,391,038 106,984,081 109,501,074 110,537,482 0.9% FTE 54.9 55.2 60.3 71.4 18.4% General Fund 16,529,712 18,572,674 21,317,906 21,963,019 3.0% Cash Funds 16,448,278 16,470,076 17,672,472 17,301,121 (2.1%) Reappropriated Funds 961,703 1,070,424 1,900,943 2,575,965 35.5% Federal Funds 65,451,345 70,870,907 68,609,753 68,697,377 0.1%

21-Nov-2019 25 LOC-brf Appendix A: Numbers Pages

FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Request vs. Actual Actual Appropriation Request Appropriation

(4) DIVISION OF LOCAL GOVERNMENT This division provides information and training for local governments concerning budget development, purchasing, demographics, land use planning, and regulatory issues. This division also manages federal and state funding programs to support local infrastructure and services. Cash fund sources primarily include: State severance tax and federal mineral lease revenues that are credited to the Local Government Severance Tax Fund and the Local Government Mineral Impact Fund; lottery proceeds that are credited to the Conservation Trust Fund; the Marijuana Tax Cash Fund; the Search and Rescue Fund; and the Colorado Water and Power Development Authority. Reappropriated fund sources include: transfers from the Local Government Mineral and Energy Impact Grants and Disbursements line item in this division, spending authority out of the Firefighter Benefits Cash Fund, and indirect cost recoveries. (A) Local Government and Community Services (i) Administration Personal Services 1,640,999 1,434,978 1,854,224 1,426,129 FTE 20.5 17.6 21.4 16.8 General Fund 358,191 810,285 1,042,367 591,407 Reappropriated Funds 1,043,865 624,693 651,778 675,804 Federal Funds 238,943 0 160,079 158,918

Operating Expenses 119,180 72,469 398,151 135,851 General Fund 52,516 47,323 308,978 46,678 Reappropriated Funds 25,146 25,146 25,146 25,146 Federal Funds 41,518 0 64,027 64,027

Strategic Planning Group on Coloradans Age 50 and Over 0 55,000 110,000 110,000 FTE 0.0 0.0 0.0 0.0 General Fund 0 55,000 110,000 110,000

21-Nov-2019 26 LOC-brf Appendix A: Numbers Pages

FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Request vs. Actual Actual Appropriation Request Appropriation

SUBTOTAL - 1,760,179 1,562,447 2,362,375 1,671,980 (29.2%) FTE 20.5 17.6 21.4 16.8 (21.5%) General Fund 410,707 912,608 1,461,345 748,085 (48.8%) Reappropriated Funds 1,069,011 649,839 676,924 700,950 3.5% Federal Funds 280,461 0 224,106 222,945 (0.5%)

(ii) Local Government Services Conservation Trust Fund Disbursements 56,182,455 66,831,175 50,000,000 49,924,087 FTE 0.5 2.1 2.0 1.0 Cash Funds 56,182,455 66,831,175 50,000,000 49,924,087

Volunteer Firefighter Retirement Plans 4,351,123 4,201,417 4,345,000 4,345,000 General Fund Exempt 4,351,123 4,201,417 4,345,000 4,345,000

Volunteer Firefighter Death and Disability Insurance 21,065 21,065 30,000 30,000 General Fund 0 0 30,000 30,000 General Fund Exempt 21,065 21,065 0 0

Firefighter Heart and Circulatory Malfunction Benefits 1,700,459 1,702,172 1,705,301 1,706,926 FTE 0.3 0.4 0.5 0.5 General Fund 861,406 864,943 866,248 867,873 Reappropriated Funds 839,053 837,229 839,053 839,053

Local Utility Management Assistance 171,762 154,769 178,230 183,275 FTE 2.1 1.9 2.0 2.0 Cash Funds 171,762 154,769 178,230 183,275

21-Nov-2019 27 LOC-brf Appendix A: Numbers Pages

FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Request vs. Actual Actual Appropriation Request Appropriation

Environmental Protection Agency Water/Sewer File Project 29,586 62,589 65,459 67,004 FTE 0.3 0.5 0.5 0.5 Federal Funds 29,586 62,589 65,459 67,004

Cybersecurity Training for Local Governments 0 250,000 0 0 General Fund 0 250,000 0 0

SUBTOTAL - 62,456,450 73,223,187 56,323,990 56,256,292 (0.1%) FTE 3.2 4.9 5.0 4.0 (20.0%) General Fund 861,406 1,114,943 896,248 897,873 0.2% General Fund Exempt 4,372,188 4,222,482 4,345,000 4,345,000 0.0% Cash Funds 56,354,217 66,985,944 50,178,230 50,107,362 (0.1%) Reappropriated Funds 839,053 837,229 839,053 839,053 0.0% Federal Funds 29,586 62,589 65,459 67,004 2.4%

(iii) Community Services Community Services Block Grant 6,191,556 6,015,881 6,000,000 6,000,000 FTE 0.0 2.3 0.0 0.0 Federal Funds 6,191,556 6,015,881 6,000,000 6,000,000

SUBTOTAL - 6,191,556 6,015,881 6,000,000 6,000,000 0.0% FTE 0.0 2.3 0.0 0.0 0.0% Federal Funds 6,191,556 6,015,881 6,000,000 6,000,000 0.0%

21-Nov-2019 28 LOC-brf Appendix A: Numbers Pages

FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Request vs. Actual Actual Appropriation Request Appropriation

SUBTOTAL - (A) Local Government and Community Services 70,408,185 80,801,515 64,686,365 63,928,272 (1.2%) FTE 23.7 24.8 26.4 20.8 (21.2%) General Fund 1,272,113 2,027,551 2,357,593 1,645,958 (30.2%) General Fund Exempt 4,372,188 4,222,482 4,345,000 4,345,000 0.0% Cash Funds 56,354,217 66,985,944 50,178,230 50,107,362 (0.1%) Reappropriated Funds 1,908,064 1,487,068 1,515,977 1,540,003 1.6% Federal Funds 6,501,603 6,078,470 6,289,565 6,289,949 0.0%

(B) Field Services Program Costs 3,023,600 2,761,904 3,270,153 3,630,894 * FTE 29.4 24.6 30.7 34.2 General Fund 47,966 235,186 272,978 344,640 Cash Funds 109,027 110,581 112,266 114,788 Reappropriated Funds 2,468,437 2,416,137 2,533,641 2,816,105 Federal Funds 398,170 0 351,268 355,361

Community Development Block Grant 7,257,717 8,349,634 5,200,000 5,200,000 FTE 0.0 6.6 0.0 0.0 Federal Funds 7,257,717 8,349,634 5,200,000 5,200,000

Local Government Mineral and Energy Impact Grants and Disbursements 132,314,238 121,250,094 123,000,000 123,000,000 Cash Funds 132,314,238 121,250,094 123,000,000 123,000,000

Local Government Limited Gaming Impact Grants 9,037,904 5,671,179 5,127,850 5,127,850 Cash Funds 9,037,904 5,671,179 5,127,850 5,127,850

21-Nov-2019 29 LOC-brf Appendix A: Numbers Pages

FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Request vs. Actual Actual Appropriation Request Appropriation

Local Government Limited Gaming Impact Study 0 12,447 50,000 0 Cash Funds 0 12,447 50,000 0

Local Government Geothermal Energy Impact Grants 42 0 50,000 50,000 Cash Funds 42 0 50,000 50,000

Rural Economic Development Initiative Grants 156,080 890,551 780,000 1,037,248 * FTE 0.3 0.2 0.0 0.0 General Fund 156,080 890,551 780,000 1,037,248

Search and Rescue Program 441,040 474,566 622,624 625,903 FTE 0.8 1.1 1.3 1.3 Cash Funds 441,040 474,566 622,624 625,903

Gray and Black Market Marijuana Enforcement Grant Program 778,319 4,196,921 5,944,365 1,950,673 * FTE 0.9 1.1 2.5 2.5 Cash Funds 778,319 4,196,921 5,944,365 1,950,673

HB 17-1326 Crime Prevention Initiative Grants 2,160,657 3,000,000 3,000,000 3,000,000 General Fund 2,160,657 3,000,000 3,000,000 3,000,000

HB 17-1326 Crime Prevention Initiative Small Business Lending 1,000,000 839,343 1,000,000 0 * General Fund 1,000,000 839,343 1,000,000 0

2020 Census Outreach Grant Program 0 0 6,000,000 85,984 FTE 0.0 0.0 1.4 1.5 General Fund 0 0 6,000,000 85,984

21-Nov-2019 30 LOC-brf Appendix A: Numbers Pages

FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Request vs. Actual Actual Appropriation Request Appropriation

Appropriation to the Peace Officers Mental Health Support Fund 0 2,000,000 2,000,000 2,000,000 General Fund 0 2,000,000 2,000,000 2,000,000

Peace Officers Mental Health Support Grant Program 0 166,169 2,000,000 2,002,966 FTE 0.0 0.3 1.0 1.0 Reappropriated Funds 0 166,169 2,000,000 2,002,966

Defense Counsel on First Appearance Grant Program 0 211,561 1,995,520 1,997,145 FTE 0.0 0.2 0.5 0.5 General Fund 0 211,561 1,995,520 1,997,145

Law Enforcement Community Services Grant Program 0 0 69,705 72,227 FTE 0.0 0.0 1.0 1.0 Cash Funds 0 0 69,705 72,227

Other Local Government Grants 0 0 0 1,800,000 General Fund 0 0 0 1,800,000

Strategic Planning Group on Coloradans Age 50 and Over 0 0 0 0 General Fund 0 0 0 0

Local Government Marijuana Impact Grant Program 146,084 182,563 0 0 FTE 1.3 0.0 0.0 0.0 Cash Funds 146,084 182,563 0 0

21-Nov-2019 31 LOC-brf Appendix A: Numbers Pages

FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Request vs. Actual Actual Appropriation Request Appropriation

SUBTOTAL - (B) Field Services 156,315,681 150,006,932 160,110,217 151,580,890 (5.3%) FTE 32.7 34.1 38.4 42.0 9.4% General Fund 3,364,703 7,176,641 15,048,498 10,265,017 (31.8%) Cash Funds 142,826,654 131,898,351 134,976,810 130,941,441 (3.0%) Reappropriated Funds 2,468,437 2,582,306 4,533,641 4,819,071 6.3% Federal Funds 7,655,887 8,349,634 5,551,268 5,555,361 0.1%

(C) Indirect Cost Assessments Indirect Cost Assessment 699,579 851,426 561,934 563,325 Cash Funds 117,658 156,913 99,610 99,610 Reappropriated Funds 458,635 694,513 375,601 376,992 Federal Funds 123,286 0 86,723 86,723

SUBTOTAL - (C) Indirect Cost Assessments 699,579 851,426 561,934 563,325 0.2% FTE 0.0 0.0 0.0 0.0 0.0% Cash Funds 117,658 156,913 99,610 99,610 0.0% Reappropriated Funds 458,635 694,513 375,601 376,992 0.4% Federal Funds 123,286 0 86,723 86,723 0.0%

TOTAL - (4) Division of Local Government 227,423,445 231,659,873 225,358,516 216,072,487 (4.1%) FTE 56.4 58.9 64.8 62.8 (3.1%) General Fund 4,636,816 9,204,192 17,406,091 11,910,975 (31.6%) General Fund Exempt 4,372,188 4,222,482 4,345,000 4,345,000 0.0% Cash Funds 199,298,529 199,041,208 185,254,650 181,148,413 (2.2%) Reappropriated Funds 4,835,136 4,763,887 6,425,219 6,736,066 4.8% Federal Funds 14,280,776 14,428,104 11,927,556 11,932,033 0.0%

21-Nov-2019 32 LOC-brf Appendix A: Numbers Pages

FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 Request vs. Actual Actual Appropriation Request Appropriation

TOTAL - Department of Local Affairs 338,112,817 349,347,368 349,085,163 341,334,731 (2.2%) FTE 164.7 169.9 189.7 204.8 8.0% General Fund 24,612,837 31,764,545 44,371,177 39,764,244 (10.4%) General Fund Exempt 4,372,188 4,222,482 4,345,000 4,345,000 0.0% Cash Funds 217,629,245 217,899,847 205,682,582 201,180,765 (2.2%) Reappropriated Funds 10,857,204 10,161,483 12,565,874 13,933,439 10.9% Federal Funds 80,641,343 85,299,011 82,120,530 82,111,283 (0.0%)

21-Nov-2019 33 LOC-brf

APPENDIX B RECENT LEGISLATION AFFECTING DEPARTMENT BUDGET

2018 SESSION BILLS

S.B. 18-005 (RURAL ECONOMIC ADVANCEMENT OF COLORADO TOWNS): Requires the Department of Local Affairs to act as the designated agency for coordinating the State's response to significant economic events in rural communities, including a plant closure or substantial layoff.

S.B. 18-007 (AFFORDABLE HOUSING TAX CREDIT): Changes the name of the existing low-income housing tax credit to the affordable housing tax credit, and authorizes an additional five years (2019 to 2024) in which the Colorado Housing and Finance Authority may allocate an additional $150 million in tax credits.

S.B. 18-016 (CONTINUE TRANSFER OF COMMUNITY CORRECTIONS REVERSIONS): Continues indefinitely the annual transfer of any unspent General Fund appropriations for the Department of Public Safety’s community corrections programs to the Housing Assistance for Persons Transitioning from the Criminal or Juvenile Justice System Cash Fund. Authorizes DOLA to spend appropriations from this fund over a two-year period. Appropriates $60,788 to DOLA for FY 2018-19 from reappropriated funds transferred from the associated housing assistance line item appropriation, and states the assumption that DOLA will require an additional 1.0 FTE.

S.B. 18-191 (LOCAL GOVERNMENT LIMITED GAMING IMPACT FUND): Modifies the annual distribution of the State share of gaming tax revenues by increasing the distribution to the Local Government Limited Gaming Impact Fund (the Fund) to include $5.0 million plus an annual increase equal to the growth of the State share of gaming tax revenue. Also requires a transfer to the Fund at the beginning of the fiscal year, starting in FY 2018-19, equal to DOLA’s projected direct and indirect costs of administering the associated grant program; any unspent money from this transfer reverts to the Fund. For FY 2018-19 and 2019-20, requires that $100,000 of the amount allocated to the Gambling Addiction Account within the Fund be appropriated for two purposes:  $50,000 to DOLA to study and establish policies and procedures concerning what constitutes documented gaming impacts for which local governments may receive state financial assistance; and  $50,000 to the Department of Human Services (DHS) to develop a plan for a successful gambling addiction program.

Eliminates the $100,000 cash funds appropriation to DHS from the Gambling Addiction Account for FY 2018-19 for gambling addiction services and appropriates this money to DOLA and DHS as required by the act for FY 2018-19.

H.B. 18-1020 (CIVIL FORFEITURE REFORMS): Makes changes to civil asset forfeiture reporting requirements and establishes two law enforcement grant programs. The Department of Local Affairs will administer the Law Enforcement Community Services Grant Program, which will provide funding

21-Nov-2019 34 LOC-brf to law enforcement entities, local governments, and community organizations to improve services to the community. This program will be funded from a share of the proceeds from seized property.

H.B. 18-1249 (ANVIL POINTS FEDERAL MINERAL LEASE DISTRIBUTION): Modifies the distribution of certain money the State may receive from the federal government from oil and gas production on naval oil shale reserve land. Specifically, in lieu of the existing statutory allocation for federal mineral lease revenues, requires the State Treasurer to distribute any such revenues received by the State to four counties (or to related federal mineral lease districts, if applicable) as follows: 40.0 percent each to Garfield and Rio Blanco counties, and 10.0 percent each to Mesa and Moffat counties.

H.B. 18-1267 (INCOME TAX CREDIT FOR RETROFITTING A RESIDENCE): For tax years 2019 through 2023, allows certain taxpayers to claim a state income tax credit for a portion of qualified costs incurred while retrofitting their residence for the purpose of improving accessibility, increasing visitability, or allowing qualified individuals to age in place. Requires DOLA’s Division of Housing to certify that the taxpayer meets specified requirements, issue tax credits, and ensure that the total amount of credits issued does not exceed $1.0 million each year. Appropriates $132,328 General Fund to DOLA for FY 2018-19, and states the assumption that DOLA will require an additional 1.0 FTE.

H.B. 18-1315 (MANUFACTURED HOMES SALES TAX EXEMPTION): Beginning July 1, 2019, exempts manufactured homes from state sales and use tax.

H.B. 18-1326 (SUPPORT FOR TRANSITION FROM INSTITUTIONAL SETTINGS): Requires the Department of Health Care Policy and Financing (HCPF) to provide support and services to Medicaid clients transitioning from an institutional setting to a home- or community-based setting. Appropriates $306,000 General Fund to DOLA’s Division of Housing for FY 2018-19 to provide housing vouchers for HCPF transition clients.

H.B. 18-1336 (REPEAL LOCAL GOVERNMENT RETAIL MARIJUANA IMPACT GRANT PROGRAM): Repeals the Local Government Retail Marijuana Impact Grant Program on July 1, 2019.

H.B. 18-1339 (BACKGROUND CHECKS FOR EMPLOYEES WITH ACCESS TO FEDERAL TAX INFORMATION): Requires each applicant, state employee, state contractor, or other individual who has or may have access through a state agency to federal tax information received from the federal government to submit to a fingerprint-based criminal history records check. Specifies that a state agency that shares such federal tax information with a county may authorize and require the county department applicants, employees, contractors, or other individuals to submit to a fingerprint-based criminal history records check. Requires a state agency to deny access to federal tax information received from the federal government to any individual who does not pass the fingerprint-based criminal history record check. Provides FY 2018-19 appropriations to multiple departments for associated costs, including $6,683 General Fund to DOLA.

H.B. 18-1353 (DEFENSE COUNSEL ON FIRST APPEARANCE GRANT PROGRAM): Creates the Defense Counsel on First Appearance Grant Program in DOLA’s Division of Local Government to reimburse local governments for costs associated with the provision of defense counsel to defendants at their first appearances in municipal courts. Allows the Division to spend the annual appropriation for this grant program over two fiscal years. Appropriates $1,853,037 General Fund to DOLA for FY 2018-19, and states the assumption that DOLA will require an additional 0.5 FTE

21-Nov-2019 35 LOC-brf H.B. 18-1394 (UPDATE COLORADO DISASTER EMERGENCY ACT): Adds definitions and updates emergency management terminology, and authorizes the Governor to convene a disaster policy group to coordinate policy decisions and to advise the Governor in the emergency event. Subject to available grant funding, continues the Colorado Resiliency Office by codifying it in DOLA. Relocates existing provisions regarding the Expert Emergency Response Committee, makes changes to update emergency management terminology, and adds the Executive Director of DOLA or his or her designee to the Committee. By June 30, 2019, and regularly thereafter, requires the Department of Public Safety’s Office of Emergency Management to update the centralized response computer database to include a listing of all-hazards recovery resources located in the state.

H.B. 18-1409 (CRIME VICTIMS GRANT PROGRAM): Creates the Community Crime Survivors Grant Program in the Department of Public Health and Environment (DPHE) to provide funding to entities that provide support services and other interventions to crime victims and their immediate family. Repeals the Parole Savings Fund created through H.B. 17-1326, and eliminates the associated $1,761,140 General Fund appropriation to DOLA for FY 2017-18 that was that was included in H.B. 17-1326 to credit money to the Parole Savings Fund.

2019 SESSION BILLS

S.B. 19-064 (RETAIN CRIMINAL JUSTICE PROGRAMS FUNDING): Creates cash funds for use by four criminal justice programs and provides continuous appropriations from the new funds to allow expenditures of available funds over multiple fiscal years. With respect to DOLA, the act creates the Justice Reinvestment Crime Prevention Cash Fund and the Targeted Crime Reduction Grant Program Cash Fund to allow the Department to retain any General Fund appropriations for two Justice Reinvestment Crime Prevention Initiative programs that remain unspent at the end of FY 2018-19 and FY 2019-20. Extends by three years to September 1, 2023, both the repeal date for the small business lending program and the sunset review date for the grant program. For additional information, see the “Recent Legislation” section at the end of Part III for the Department of Corrections.

S.B. 19-117 (SUPPLEMENTAL BILL): Modifies FY 2018-19 appropriations to the Department.

S.B. 19-207 (LONG BILL): General appropriations act for FY 2019-20.

H.B. 19-1009 (SUBSTANCE USE DISORDER RECOVERY): Expands a state housing voucher program in DOLA to include individuals with substance use disorders who are transitioning back into the community from a correctional or behavioral health institution, county jail, or residential treatment program. Requires the General Assembly to annually appropriate $1.0 million from the Marijuana Tax Cash Fund (MTCF) for the voucher program for fiscal years 2019-20 through 2023-24. Appropriates $1,000,000 total funds to DOLA for FY 2019-20, including $173,500 General Fund and $826,500 cash funds from the MTCF, and states that DOLA will require 0.9 FTE to implement the act. Appropriates $2,620 reappropriated funds (transferred from DOLA) to the Governor’s Office of Information Technology for FY 2019-20.

Effective January 1, 2020, establishes requirements for the operation of recovery residences, including certification by an entity approved by the Office of Behavioral Health in the Department of Human

21-Nov-2019 36 LOC-brf Services (DHS). Establishes the Recovery Residence Certification Grant Program to be administered by DHS to provide grants to recovery residences for the purpose of gaining certification. Appropriates $50,000 General Fund to DHS for FY 2019-20.

Creates a 26-member Opioid Crisis Recovery Funds Advisory Committee to advise and collaborate with the Department of Law on uses of any custodial funds received by the state as a result of opioid- addiction-related litigation for which the use of the funds is not predetermined by the court.

H.B. 19-1217 (PERA LOCAL GOVERNMENT DIVISION MEMBER CONTRIBUTION RATES): Eliminates increases in the employee contribution for members of the Public Employees’ Retirement Association’s (PERA’s) local government division that were scheduled to occur on July 1 of 2019, 2020, and 2021. As a result, will increase State income tax revenue that is credited to the General Fund by an estimated $233,000 in FY 2019-20 and by larger amounts in subsequent fiscal years.

H.B. 19-1228 (COLORADO AFFORDABLE HOUSING TAX CREDIT): For tax years 2020 through 2024, increases the annual amount of the Colorado Affordable Housing Tax Credit that the Colorado Housing and Finance Authority may allocate from $5.0 million to $10.0 million. As a result, will reduce General Fund revenue by a total of $150.0 million over a 12-year period starting in FY 2020-21.

H.B. 19-1239 (2020 CENSUS OUTREACH GRANT PROGRAM): Creates the 2020 Census Outreach Grant Program within DOLA’s Division of Local Government to provide grants to eligible recipients in order to support an accurate census count in 2020. Eligible recipients may use the awarded grant money to conduct education, outreach, and promotion activities to target hard-to-reach communities and increase the census response rate. Creates a seven-member 2020 Census Outreach Grant Program Committee to review and make recommendations concerning grant applications. Requires DOLA and the Office of the Governor to develop a strategic action plan for outreach, education, and promotion of a successful decennial census count by May 1, 2026, and every 10 years thereafter. Appropriates $6.0 million General Fund to DOLA for FY 2019-20 and authorizes the Department to spend the funds over a two-year period through June 30, 2020. States that the Department will require 1.4 FTE to implement the act.

H.B. 19-1245 (AFFORDABLE HOUSING FUNDING FROM VENDOR FEE CHANGES): Beginning January 1, 2020, increases the “vendor fee” (an amount that a retailer is permitted to retain for its expenses incurred in collecting and remitting the state sales tax) from 3.33 percent to 4.0 percent, subject to a $1,000 monthly cap. This limit applies regardless of the number of the retailer's locations, and a vendor with multiple locations is required to register all locations under one account with the Department of Revenue (DOR). Excludes the increase in sales taxes attributable to the vendor fee changes from the definition of "state sales tax increment revenue" for purposes of the "Colorado Regional Tourism Act" so that the increase is payable to the State and not an applicable financing entity. As a result, will increase State sales tax revenue that is credited to the General Fund by an estimated $23.1 million in FY 2019-20, $47.9 million in FY 2020-21, and $49.4 million in FY 2021- 22 and subsequent fiscal years. The act is anticipated to increase State income tax revenue that is credited to the General Fund by $233,000 in FY 2019-20 and by larger amounts in subsequent fiscal years. Appropriates $286,408 to DOR for FY 2019-20, and states that DOR will require 0.4 FTE to implement the act.

21-Nov-2019 37 LOC-brf Requires the State Treasurer to credit to the existing Housing Development Grant Fund (HDGF) an amount equal to the increase in sales taxes attributable to the vendor fee changes, minus the following specified amounts that will instead be retained in the General Fund:  $15,335,781 for FY 2019-20 (resulting in an estimated $7.8 million being credited to the HDGF);  $40,323,158 for FY 2020-21 (resulting in an estimated $7.6 million being credited to the HDGF); and  $985,335 for FY 2021-22 and subsequent fiscal years (resulting in an estimated $48.4 million being credited to the HDGF).

Requires DOLA’s Division of Housing to annually award at least one-third of the amount that is credited to the HDGF for affordable housing projects for households whose annual income is less than or equal to 30 percent of the area median income. Appropriates $3,398 General Fund to DOLA for FY 2019-20. As the HDGF is continuously appropriated to DOLA, the act does not include an appropriation from this fund.

H.B. 19-1263 (OFFENSE LEVEL FOR CONTROLLED SUBSTANCE POSSESSION): Reclassifies several existing drug felonies as drug misdemeanors, reduces the fine penalties and jail terms for drug misdemeanors, and makes several other changes to sentencing for drug offenses. Creates a substance use and mental-health treatment grant program to be administered by DOLA. Beginning in FY 2020- 21, appropriates $1.9 million to DOLA annually from the General Fund from estimated savings from H.B. 19-1263.

H.B. 19-1292 (COLORADO RESILIENCY OFFICE REAUTHORIZATION FUNDING): Repeals the requirement that the Colorado Resiliency Office in DOLA be grant funded, and repeals the Office September 1, 2022, following a sunset review conducted by the Department of Regulatory Agencies. Appropriates $249,454 General Fund to DOLA for FY 2019-20, and states that DOLA will require 2.7 FTE to implement the act.

H.B. 19-1309 (REGULATION OF MOBILE HOME PARKS): Increases the authority of counties and municipalities to enact certain ordinances for mobile home parks. Allows mobile home owners additional time between the notice of nonpayment of rent and eviction, and additional time to vacate a mobile home park after a court ordered eviction. Creates the Mobile Home Park Act Dispute Resolution and Enforcement Program to be administered by DOLA. Creates the Mobile Home Park Act Dispute Resolution and Enforcement Program Fund, which consists of mobile home park registration fee revenue, and continuously appropriates money in the Fund to DOLA for administering the program. For FY 2019-20, appropriates $22,073 cash funds to the Department of Law and $130,065 cash funds to the Governor’s Office of Information Technology, and states that the Department of Law will require 0.1 FTE to implement the act. The source of cash funds is registration fee revenue transferred from DOLA.

H.B. 19-1322 (EXPAND SUPPLY OF AFFORDABLE HOUSING): Requires the State Treasurer to annually transfer $30.0 million from the Unclaimed Property Trust Fund to the Housing Development Grant Fund (HDGF) for a total of three years starting in FY 2020-21. The amount transferred on June 30 each year is based on the balance in the Unclaimed Property Trust Fund as of June 1 each fiscal year, as well as the Legislative Council Staff’s annual June economic and revenue forecast. Requires the transfer to be made if the June forecast indicates that state revenues for the current fiscal year are estimated to be at least $30.0 million below the excess state revenues cap. Specifies that for

21-Nov-2019 38 LOC-brf each state fiscal year that a transfer is not made, the last year in which a transfer may be made is extended for an additional state fiscal year. Expands the specified purposes for which DOLA may use the funds that are transferred to the HDGF. Authorizes DOLA to expend money from the HDGF to hire and employ individuals to fulfill the purposes of the act, subject to the existing limitation on the percentage of money in the HDGF that may be expended for administrative expenses. As the HDGF is continuously appropriated to DOLA, the act does not include an appropriation from this fund.

21-Nov-2019 39 LOC-brf APPENDIX C FOOTNOTES AND INFORMATION REQUESTS

The following Long Bill Footnotes (LBF) and Requests for Information (RFI) relate to the Department of Local Affairs and are included in this Appendix:

Executive Director’s Office LBF #67 – Moffat Tunnel Improvement District

Division of Housing LBF #68 – Legislative intent regarding General Fund appropriations for affordable housing LBF #69 – Authority to transfer Marijuana Tax Cash Fund appropriation for rental vouchers LBF #70 – Legislative intent regarding Affordable Housing Program Costs line item RFI #1 – Annual report concerning affordable housing programs RFI#2 – Annual report concerning costs of the Colorado Choice Transitions (CCT) program

Division of Local Government LBF#71 – Authority to “roll forward” appropriation for 2020 Census outreach efforts LBF#72 – Legislative intent regarding reappropriated funds for the Colorado Main Street program LBF #73 – Authority to “roll forward” appropriation for the Rural Economic Development Initiative

UPDATE ON LONG BILL FOOTNOTES

67 Department of Local Affairs, Executive Director's Office, Moffat Tunnel Improvement District -- It is the General Assembly's intent that the Department continue its current practice of retaining lease payment revenues in the Moffat Tunnel Cash Fund and suspending distribution payments to Improvement District counties because this practice ensures that funds remain available to cover any potential Improvement District liabilities related to the Tunnel and any costs related to studies or other actions that need to occur prior to the expiration of the lease with Union Pacific Railroad in 2025 in order to protect the interests of the Improvement District and the State.

COMMENT: This footnote was first included in the FY 2018-19 Long Bill. In the spring of 2017, Joint Budget Committee staff identified some potential concerns related to DOLA’s administrative authority and role related to the Moffat Tunnel Improvement District and the Moffat train tunnel. Staff noted that DOLA has taken no action related to the Tunnel for many years and some of the institutional knowledge about DOLA’s role related to the Tunnel appears to have been lost. Given that the current Union Pacific lease expires in 2025 and current statute contemplates the sale of this asset, staff recommended a “check-in” on the legal and administrative structure related to the Tunnel to evaluate whether sale of the Tunnel is a viable option and whether such a sale would be in the long-term interest of the State.

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The Joint Budget Committee included the following request for information in its annual letter for the Governor to determine whether any administrative or legislative steps should be considered related to the Tunnel:

Department of Local Affairs, Executive Director’s Office, Moffat Tunnel Improvement District – The Department is requested to submit a report by October 1, 2017, concerning the Moffat Tunnel Improvement District. The report should address: (1) What land/property is owned by the Improvement District? (2) What are the State and Improvement District’s legal and functional responsibilities for the Tunnel and any related lands versus that of other entities? (3) Does Union Pacific or another entity have legal responsibility for ensuring the structural soundness and safety of the Tunnel? (4) Does the State or should the State or the Improvement District have any related responsibility for ensuring the Tunnel’s soundness, given its length and age? (5) Does the State anticipate again attempting to sell the Tunnel or to renegotiate lease agreements and, if so, is this anticipated to occur in 2025 or at another time? (6) What steps are likely to be required prior to sale or renegotiation of lease amounts (e.g., legal, engineering, consultation with other State and local entities)? (7) How does the Department propose to use money accumulating in the Moffat Tunnel Cash Fund? How much is likely to be required and when? (8) Does the Department recommend any statutory or administrative changes related to the Tunnel or the Improvement District?

With the assistance of the Attorney General’s Office, the Department submitted the report as requested, and staff provided a summary of the report in the Staff Budget Briefing for DOLA dated November 30, 2017. At this time, the Department does not have any plans to sell the District’s assets or to renegotiate the current lease agreements with Union Pacific Railroad or Century Link. If the General Assembly is genuinely interested in selling these assets, the Department would need to consult with an engineering firm familiar with railroad assets to determine the steps required to organize those assets for sale.

Under current law, lease payment revenue from the property is to be distributed to the nine Improvement District counties (Adams, Boulder, Denver, Eagle, Gilpin, Grand, Jefferson, Moffat, and Routt), after the Department has set aside sufficient revenue for administrative costs. In light of the information provided in response to the 2017 request for information, the Committee added this footnote to express the General Assembly's intent that the Department continue its practice of retaining lease payment revenues in the Moffat Tunnel Cash Fund and suspending distribution payments to Improvement District counties.

68 Department of Local Affairs, Division of Housing -- It is the General Assembly's intent that the Department target state General Fund appropriations for affordable housing to projects and clients that can be reasonably expected to reduce other State costs. It is the General Assembly's further intent that the Department prioritize State-funded rental assistance for the following populations: o Medicaid clients who are transitioning from a nursing home or long-term care facility; o clients transitioning from a State Mental Health Institute or a State-funded behavioral healthcare facility; and

21-Nov-2019 41 LOC-brf

o clients transitioning from the Department of Corrections, the Division of Youth Services in Department of Human Services, or a county jail.

COMMENT: This footnote expresses legislative intent, and was first included in the FY 2015- 16 Long Bill. Further detail regarding types of clients to be targeted for rental assistance was included in the FY 2019-20 Long Bill.

69 Department of Local Affairs, Division of Housing, Community and Non-Profit Services, Community Services, Low Income Rental Subsidies; Field Services, Affordable Housing Construction Grants and Loans pursuant to Section 24-32-721, C.R.S.; and Housing Assistance for Persons Transitioning from the Criminal or Juvenile Justice Systems -- It is the General Assembly's intent that the Department record expenditures for rental vouchers issued by the Division of Housing within the Low Income Rental Subsidies line item.

COMMENT: This footnote was first included in the FY 2017-18 Long Bill to state the General Assembly’s intent that when the Department utilizes a portion of the “Affordable Housing Construction Grants and Loans” line item appropriation for rental vouchers, it record the related expenditures within the “Low Income Rental Subsidies” line item. This footnote is intended to improve transparency by requesting that the Department separately report rental voucher expenditures and expenditures for construction grants and loans. For FY 2018-19, the Department utilized $2,050,357 of the amount appropriated from the Marijuana Tax Cash Fund for this purpose, including $2,008,588 for rental vouchers and $41,769 for security deposit assistance for clients with rental vouchers.

Background Information – Appropriations from the Marijuana Tax Cash Fund The Department requested and received an appropriation from the Marijuana Tax Cash Fund for FY 2017-18 as part of the Affordable Housing Construction Grants and Loans line item. The requested funds were intended to be used for a mix of housing development subsidies, rental assistance (both tenant-based and project-based housing vouchers), and related administrative expenses. The request was intended to address the housing needs of two populations:  individuals transitioning from or at risk of entering hospitals or the state mental health institutes; and  individuals who are homeless or at risk of homelessness, including veterans, youth, and people transitioning to the community from the Department of Corrections, the Division of Youth Services in the Department of Human Services, or a county jail.

The General Assembly continued this $15.3 million appropriation in the FY 2018-19 and FY 2019-20 Long Bill. For more information about expenditures of the $15.3 million appropriation, see Request for Information #1 at the end of this section.

Background Information – Statutory Authority Related to the Affordable Housing Construction Grants and Loans Line Item The Housing Development Grant Fund consists of money appropriated to the “Colorado Affordable Housing Construction Grants and Loan Fund” and other grants and donations received by the Division of Housing for purposes consistent with Section 24-32-721, C.R.S. Money in the Housing Development Grant Fund is continuously appropriated to the Division

21-Nov-2019 42 LOC-brf

for the purpose of making a grant or loan to “improve, preserve, or expand the supply of affordable housing in Colorado as well as to fund the acquisition of housing and economic data necessary to advise the [State Housing Board] on local housing conditions”. The Division is also authorized to: o Annually transfer up to 20.0 percent of the Housing Development Fund balance to the Housing Investment Trust Fund, which is available for the Division to make loans for development or redevelopment costs for low- or moderate-income housing; and o Spend up to 3.0 percent of the money appropriated from the Housing Development Fund for the Divisions’ related administrative costs.

Senate Bill 17-021 added subsection (4) to Section 24-32-721, C.R.S., to authorize the Division to establish a program that provides rental vouchers and other support services for housing assistance for a person with a mental health disorder or co-occurring behavioral health disorder who is transitioning from the Department of Corrections, the Division of Youth Services in the Department of Human Services, or a county jail into the community.

This subsection also requires the Division to provide grants or loans for the acquisition, construction, or rehabilitation of rental housing for persons with behavioral or mental health disorders.

Finally, this subsection creates the Housing Assistance for Persons Transitioning from the Criminal or Juvenile Justice System Cash Fund to provide housing assistance for persons with behavioral or mental health disorders who are transitioning from incarceration. The source of funding is a transfer of unspent General Fund money that was appropriated for the previous fiscal year for community corrections programs and services. This fund is subject to annual appropriation by the General Assembly.

70 Department of Local Affairs, Division of Housing, Field Services, Affordable Housing Program Costs; and Affordable Housing Construction Grants and Loans pursuant to Section 24-32-721, C.R.S. -- It is the General Assembly's intent that appropriations for State administration of affordable housing construction grants and loans, including administration funding authorized pursuant to Section 24-32-721(3)(b), C.R.S., be expended in the Affordable Housing Program Costs line item.

COMMENT: This footnote was first included in the FY 2017-18 Long Bill to state the General Assembly’s intent that when the Department utilizes a portion of the “Affordable Housing Grants and Loans” line item appropriation for administrative purposes, it record the related expenditures within the “Affordable Housing Program Costs” line item. This footnote is intended to improve transparency by requesting that the Department separately report administrative expenditures and expenditures for construction grants and loans and rental vouchers.

71 Department of Local Affairs, Division of Local Government, Local Government and Community Services, Administration, Operating Expenses - Of this appropriation, $248,000 General Fund remains available until the close of the 2020-21 state fiscal year for expenditures related to the 2020 Census.

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COMMENT: This footnote expresses legislative intent, and was first included in the FY 2019- 20 Long Bill. The Department received “roll forward” annual spending authority based on the assumption that 2020 Census efforts will not be wrapped-up by the close of FY 2019-20.

72 Department of Local Affairs, Division of Local Government, Field Services, Program Costs - - It is the General Assembly's intent that $462,500 of the reappropriated funds in this line item appropriation be used for the Colorado Main Street Program.

COMMENT: This footnote expresses legislative intent, and was first included in the FY 2019- 20 Long Bill.

73 Department of Local Affairs, Division of Local Government, Field Services, Rural Economic Development Initiative Grants -- This appropriation remains available until the close of the 2020-21 state fiscal year.

COMMENT: This footnote was first added to the FY 2016-17 Long Bill; the Rural Economic Development Initiative (REDI) grant program was established through a FY 2015-16 Long Bill amendment. REDI grants fund economic strategic planning, infrastructure improvements, and entrepreneurial initiatives for local governments. The most competitive applications are from rural counties with fewer than 50,000 people and municipalities and unincorporated communities with fewer than 20,000 people. For fiscal years 2015-16 through 2018-19, the General Assembly appropriated $750,000 General Fund annually; $780,000 General Fund was appropriated in FY 2019-20. The Department’s FY 2020-21 R1 requests an ongoing increase of $257,245 General Funds to fund unmet grant requests.

The Department’s request for the authority to “roll forward” annual spending authority for one fiscal year was intended to address two challenges:  Reversion of funds: If a project comes in under-budget, unspent money from a completed contract are de-obligated and reverted. Most contracts are not completed until the fourth quarter, meaning there is little time to re-purpose unused funds.  Multi-year projects: More complex construction projects or planning processes that require more extensive community engagement cannot be supported with Rural Economic Development Initiative funds if all money must be awarded, contracted, and expended in the same fiscal year.

The General Assembly added this footnote at the request of the Department and has continued it in each subsequent Long Bill.

The Department has awarded a total of $3,460,829 in REDI grants from FY 2015-16 through FY 2018-19. The average grant size was $41,000 in FY 2018-19. Actual expenditures over the last four fiscal years are listed below:  FY 2015-16: $655,561  FY 2016-17: $550,565  FY 2017-18: $156,080  FY 2018-19: $890,551

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UPDATE ON REQUESTS FOR INFORMATION

1 Department of Local Affairs, Division of Housing -- The Department is requested to submit a report by September 1, 2019, concerning its affordable housing programs. The report should specifically address:  the projects funded in FY 2018-19 with appropriations for Affordable Housing Construction Grants and Loans pursuant to Section 24-32-721, C.R.S., and projects funded in FY 2018-19 with the appropriation for Housing Assistance for Persons Transitioning from the Criminal or Juvenile Justice Systems;  the per-unit costs of projects funded in FY 2018-19 from state funds and from other funds;  how the projects funded in FY 2018-19 from the General Fund appropriation align with the goals outlined in the Department's FY 2014-15 budget request to "end homelessness for veterans and chronically homeless" and "ensure sufficient affordable housing for persons with the lowest incomes", and what progress the State has made in achieving each of these goals;  how the Marijuana Tax Cash Fund appropriation has been used for populations and services that are consistent with Section 39-28.8-501 (2)(b)(IV)(N), C.R.S.; and  how the appropriation for Housing Assistance for Persons Transitioning from the Criminal or Juvenile Justice Systems has been used for rental assistance and other support services consistent with Section 24-32-721 (4), C.R.S.

COMMENT: The Department submitted the report as requested. Staff has provided a summary of the report below.

FY 2018-19 General Fund Appropriations to the DOLA Division of Housing The Department utilizes General Fund appropriations to meet affordable housing needs throughout the state. This includes housing for people who are homeless, disabled, veterans, or seniors, as well as workforce housing in the mountains and other tight markets. It is the intent of both the General Assembly and the Department that the appropriations are targeted towards individuals and projects that not only ensure low-income and homeless Coloradans secure, stable, and safe housing, but in doing so, create a reduction in State costs.

The Housing Development Grant Fund provides funds to housing developers for the acquisition, rehabilitation, and new construction of affordable housing through a competitive application process to improve, preserve, or expand the supply of affordable housing in Colorado. Eligible development projects primarily consist of affordable rental and for-sale housing. The Division awarded over $8.95 million of HDG funds to eighteen projects from its FY 2018-19 appropriation. These projects include seventeen new construction and rehabilitation projects and one housing counseling program. The construction and rehabilitation projects resulted in 1,051 new units affordable to households earning less than 80 percent of the median income. A three-year summary of HDG projects is shown in Table 1.

The average per unit development cost for the seventeen new construction and rehabilitation projects was approximately $245,424. The average award of HDG was approximately $8,520 per unit for these projects, compared to over $236,905 per unit in leveraged funds.

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Table 1. HDG Three-Year Summary

HDG

Project Type FY 2016-17 FY 2017-18 FY 2018-19

Total Projects 18 17 18

New Construction or Rehabilitation Projects 15 13 17

Total Affordable Units 1,011 845 1,051

New Construction or Rehabilitation Project Units 959 807 1,051

Total Amount Awarded $7,954,000 $7,954,000 $8,954,000

Units for Homeless Populations and Persons with the Lowest Incomes: From the FY 2018- 19 appropriation, DOH invested over $5.9 million to develop 14 projects that included 132 units affordable to low-income households earning at or below 30 percent of the area median income (AMI). These 132 units for households with the lowest incomes represent 13 percent of the units funded by the FY 2018-19 General Funds appropriation.

The Homeless Solutions Program (HSP) was established at the Department in 2017 through the annual allocation of $15.3 million from Colorado’s Marijuana Tax Cash Fund. The Department utilizes that fund for the development of Supportive Housing and shelter beds to serve the homeless. HSP funds were utilized to support the construction of 93 Supportive Housing units and 100 shelter beds in FY 2018-19. Additionally, HSP funds were utilized for Project Based Vouchers for an additional 117 units.

Program Economic Outcomes: As shown in the table below, five metrics have been developed to demonstrate other outcomes resulting from the new construction and rehabilitation projects funded by the State’s General Fund: Household Savings, Local Income, Tax Revenue, Jobs Created, and Funds Leveraged. As shown in the table, the General Funds from FY 2018-19 contributed to the construction of 980 affordable units in the categories of rental new construction, rental rehabilitation, and homeownership new construction (71 homeownership rehabilitation units are not included in the economic analysis because the correlating economic data is not available for this type of rehabilitation). This resulted in approximately $4.4 million in household savings annually, over $154 million in local income, over $35 million in tax revenue, of which $9.9 million is State tax revenue, 2,094 jobs and over $246 million in leveraged funds.

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Table 2. Housing Development Summary Outcomes: Affordable Rental and For-Sale Housing

Project Type Units Total Household Local Income All Local Tax State Tax Jobs Funds DOH Savings (over one year) Revenue Revenue Created Leveraged Award (over one 2 (over one (over one (over one year)1 year) 3 year) 3 year)4

Rental 576 $4,730,000 $2,465,508 $100,797,258 $16,791,696 $6,595,920 1,405 $166,786,578 New Construction

Rental 399 $3,509,212 $1,873,212 $47,514,955 $7,387,321 $3,090,490 602 $78,129,990 Acquisition/ Rehabilitation

Homeownership 8 $650,000 $26,400 $2,463,322 $488,000 N/A*** 33 $1,514,664 New Construction

Total 9805 $8,889,212 $4,365,120 $154,569,520 $25,297,729 $9,934,632 2,094 $246,431,232

1Total annual household savings for a rental project was calculated by determining the difference between the affordable rent (or estimated tenant-paid rent in the case of project-based rental assistance) and the market rate rent for each affordable unit of a development funded by HDG. 2Construction projects provide substantial economic benefit to the local economy. To quantify this impact, the Department used updated data provided by Dr. Elliot Eisenberg, lead author of the 2017 Housing Colorado study, Driving a Vibrant Economy: Housing’s Role in Colorado’s Economic Success (Housing Colorado Study), and the 2015 National Association of Home Builders’ study, The Economic Impact of Homebuilding in a Typical State: Income, Jobs and Taxes Generated (National Association of Home Builders’ Study). These studies aggregated income that resulted directly and indirectly from residential construction in Colorado. 3Construction projects generate taxes and other revenue for local governments and the State through construction taxes, permit fees, user charges, and licensing fees. Data from the 2017 Housing Colorado Study and The National Association of Home Builders’ Study were used to quantify the total tax revenue generated by our construction projects at the local and state level. 4Construction projects generate new employment in a range of industries, including construction, wholesale, local government, and professional services. The Department used the data from the 2017 Housing Colorado Study and the National Association of Home Builders’ Study to estimate the number of jobs created by assisted projects. 5 This table does not include homeownership rehabilitation units supported in FY19, totaling 71 units.

The Division provided the following table summarizing the HDG projects that were funded in FY 2018-19, along with narrative descriptions of each project:

Table 3. 2018-2019 Housing Development Grant (HDG) Projects Afford- Lever- Project Total Project County and Name able Amount aging # Cost Units 18-052 Arapahoe - Connections at 6th 68 $800,000 $19,431,873 24:1 18-053 Statewide - Colorado Housing Connects1 N/A $118,797 $224,357 1:2 18-058 Arapahoe - Residences at Hoffman 85 $850,000 $22,132,003 24:1

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19-004 Larimer - DMA Plaza 124 $1,000,000 $31,747,034 32:1 19-006 Larimer - Manufactured Home Repair 20 $177,918 $356,000 1:1 19-018 Larimer - The Meadows Renovation 59 $400,000 $12,799,032 32:1 Fremont - Cedar Village and Canyon Country Mobile 19-032 Home Park Acquisition 51 $600,000 $2,640,000 3:1 Larimer - Provincetowne Green Capital Improvement 19-035 Project 84 $350,000 $13,949,718 38:1 19-039 Moffat - Sunset Meadows 2 44 $359,212 $2,511,487 6:1 19-040 Adams - Range View Apartments 223 $1,000,000 $59,916,690 60:1 19-044 Chaffee - Old Stage Road Rowhomes 8 $50,000 $1,564,664 30:1 19-055 Boulder - Tungsten Village 26 $260,000 $9,702,409 36:1 19-056 La Plata - Senior Residences at Three Springs 53 $500,000 $13,895,431 26:1 19-057 Larimer - Mirasol Phase 3 60 $600,000 $19,316,096 30:1 19-058 Routt - Alpenglow Village 48 $650,000 $23,892,273 35:1

19-059 Adams - Libretto Apartments Phase II 42 $420,000 $12,542,438 29:1

19-067 El Paso - Silvercrest Villas 20 $600,000 $1,200,058 1:1 19-070 Gunnison - GardenWalk of Gunnison2 36 $218,073 $10,119,238 21:1 Total 1,0513 $8,954,000 $257,940,801 28:1

118-053 funds a housing counseling program, as such there were no units produced by this award. This award was partially funded with FY 2017-18 funds, which amount was reported last year. The amount reported in this table is the amount from FY 2018-19 funds. Total award was $146,650. 2 19-070 total award amount is $450,000. The remaining $231,927 will utilize FY 2019-20 funds and will be reported next year. ³An additional 51 units of market rate units were created between 19-058, 19-035 and 19-018. These units were not supported with state funds.

$15,300,000 Marijuana Tax Cash Funds Appropriation to the Division of Housing The Homeless Solutions Program (HSP) was established at the Department in FY 2017-18 through the annual allocation of $15.3 million from Colorado’s Marijuana Tax Cash Fund. The program was initiated to address Colorado’s homelessness crisis, with almost 11,000 homeless individuals including Veterans, youth aging out of foster care, and people with significant behavioral health conditions. The Homeless Solutions Program is prioritized to serve individuals with an extensive history of homelessness and behavioral health conditions who are frequent or high-cost consumers of public systems, such as behavioral health and justice systems. Youth and Veterans experiencing homelessness are also prioritized within the program.

Safe, affordable housing coupled with supportive services is a proven solution to end a person’s cycle of homelessness, prevent repeated incarcerations, and limit hospitalization. The Homeless Solutions Program focuses particularly on two models that are proven best practices: Supportive Housing and Rapid Re-housing.

 Supportive Housing, also known as Permanent Supportive Housing, is affordable, community- based housing that provides tenants with the rights of tenancy and access to intensive

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supportive services. People in need of Supportive Housing are typically living with multiple disabilities, often struggling with substance use, and more than likely have been chronically homeless. Supportive Housing communities are typically served by full-time case management personnel with mental health and/or substance abuse support available from on-site or referral-based providers.  Rapid Re-housing focuses on individuals who need extra assistance and time to stabilize their lives through connection to community services and employment. Rapid Re-housing expedites the process of connecting households experiencing homelessness to permanent housing options through a client-centered support system. Rapid Re-housing offers rental assistance for up to two years and targeted supportive services in order to solve the practical and immediate challenges to obtaining permanent housing.

The Department is partnering with communities all across Colorado to provide funding and technical support for the construction, acquisition, and rehabilitation of supportive housing units; rental assistance in the form of housing vouchers; and case management and rental assistance for Rapid Re-housing programs.

Additionally, the Homeless Solutions Program utilized funds to support capacity building and systems coordination throughout the state, such as the Pathways Home Supportive Housing Toolkit outreach sessions and technical assistance.

Housing Development Activities The Division provided the following table summarizing housing developments that were reviewed and approved by the State Housing Board and the Department’s Executive Director for the Department’s funding through the Marijuana Cash Tax Fund:

Table 4. 2018-2019 Homeless Solutions Program (HSP) Projects

# of Amount of # of Non- Total HSP Project PSH PSH Total Shelter Funding Total Project # County - Name Units1 Units2 Units Beds Awarded Cost Leverage El Paso County - Vecino Bond 18-038 Group Freedom Springs3 0 0 0 0 $1,000,000 $14,079,197 8:1 Adams County - CCH Veterans 19-050 Renaissance Apts 59 0 59 0 $1,800,000 $19,193,065 10:1 19-075 Mesa County - Karis Apts 34 0 34 0 $850,000 $9,118,316 10:1 19-076 Larimer County - Mason Place4 0 0 0 0 $600,000 $19,367,676 13:1

Pueblo County - Pueblo Rescue 19-082 Mission Shelter 0 0 0 100 $1,303,000 $1,889,879 0.45:1 93 0 93 100 $5,553,000 $63,648,133 10:1 1PSH = Permanent Supportive Housing. 2non-PSH = other affordable housing units 3$500,000 for Freedom Springs was reported in the Department’s FY18 RFI. An additional $1,000,000 was awarded to this project in FY19. The project consists of 50 affordable units, but they are not included in this table to avoid double-counting.

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4$750,000 for Mason Place (formerly Midtown on the Max) was reported in the Department’s FY18 RFI. An additional $600,000 was awarded to the project in FY19. The project consists of 60 affordable units, but they are not included in this table to avoid double-counting.

Rental Assistance Activities Rapid Rehousing for Re-Entry: The Colorado Rapid Rehousing for Re-Entry (COR3) program aims to end the cycle of homelessness and incarceration by connecting individuals with behavioral health conditions, who would be exiting or have already exited incarceration into homelessness, to affordable, supportive housing. Volunteers of America Colorado (VOA) was awarded $2,000,000 annually, for a total of $6,000,000 for three years to operate the COR3 program. $379,802 was allocated from the FY 2017-2018 HSP funds. An additional $922,198 was awarded in FY 2018-2019 from HSP. The remaining $4,698,000 was awarded from the Housing Assistance for Persons Transitioning from Incarceration Cash Fund (described later in the report). COR3 will accept referrals from HUD Continuum of Care-based Coordinated Entry Systems, and from the Colorado Department of Corrections. The program expects to serve 220 individuals with rental assistance per year. As of June 30, 2019, COR3 is serving 104 participants throughout 30 counties in Colorado and VOA is actively working with the various justice agencies to outreach and assess additional potentially eligible participants.

Next Step 2-Gen Rapid Re-housing: Next Step 2-Gen Rapid Re-housing provides move-in assistance, temporary rent subsidies, and case management services to families with school-aged children and unaccompanied students 18 years of age or older who are experiencing homelessness. Next Step aims to ensure students experiencing homelessness have the basic foundation of housing and support in order to achieve academic stability and success. The Division of Housing contracts with community partnerships made up of school districts, housing providers, and supportive service providers to help participants quickly exit homelessness, return to housing, and remain stably housed. Through an RFA process, $1,071,143 was awarded to six partners who collectively cover the following cities and counties: Aurora, Loveland, Mesa County, Fremont County, Chaffee County, Jefferson County, and Weld County.

Youth Housing Program (Host Homes, Rapid Re-Housing and Vouchers): In FY19 the Department released a request for applications (RFA) for Youth Housing Programs specifically geared to youth between the ages of 18-24. The three eligible models included Rapid Rehousing (RRH), State Housing Vouchers (SHV), and Host Homes. RRH is a short to medium-term housing intervention designed to help individuals and families quickly exit homelessness, return to housing in the community, and not experience homelessness again. The program does so by providing move-in assistance, temporary rent subsidies, and housing-focused case management. The SHVs provide rental assistance and security deposit assistance in order to assist eligible participants in leasing safe, decent, and affordable rental housing. Host Homes intend to be safe, temporary, and welcoming space for youth to live in a volunteer home for a short period of time, averaging six months, but can be up to a year if needed. In response to the RFA, DOH funded six organizations: two offering the Host Home model alone; one offering Host Homes, Rapid Re- Housing and State Housing Vouchers; one offering Rapid Re-Housing only; and two offering Rapid Re-Housing and State Housing Vouchers. Combined, the programs will serve over 122 youth across the state.

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Housing Voucher Activities The Department is using many different programs/sources for referrals and a variety of assessment tools targeted to identify those with the highest need within specific populations. The RFI provides a list of tenant-based and project-based vouchers funded with HSP and distributed to the Department’s partner agencies to issue to eligible participants; 509 total vouchers were distributed. These vouchers are divided into four categories and were allocated as follows:  Renewing tenant-based voucher awards – 168  Renewing project based voucher awards – 107  New tenant-based voucher awards – 170  New project-based voucher awards – 44

Total HSP Expenditures FY 2018-2019

TOTAL HSP PROGRAM AVAILABLE $15,000,000 Housing Development Awarded $5,553,000 Housing Vouchers $2,008,588 Vouchers Services $270,000 COR3 Rapid Rehousing $922,198 Next Step 2-Gen Rapid Re-Housing $1,071,143 Prevention Funds $125,297 Youth Housing Programs (not including State Housing Vouchers) $839,165 Supportive Housing Toolkit $38,800 Security Deposits $41,769 Total Program HSP Funds Committed $10,869,960

Housing Development in Underwriting $6,820,000

Including the awards in underwriting at the end of FY19, 100% of the HSP funds for FY 2018- 19 have been awarded.

Housing Assistance for Persons Transitioning from the Criminal or Juvenile Justice Systems Senate Bill 17-021 established a housing program at the Department for persons with mental health disorders or co-occurring behavioral health disorders who are transitioning from the Department of Corrections, the Division of Youth Services in the Department of Human Services, or a county jail into the community. The program is intended to provide vouchers and other support services for housing assistance and/or grants or loans for the acquisition, construction, or rehabilitation of rental housing for persons with behavioral or mental health disorders. The bill created the Housing Assistance for Persons Transitioning from Incarceration Cash Fund, which could consist of money transferred from the Department of Public Safety (DPS) and/or money appropriated by the General Assembly. In FY 2018-19, $4,758,600 was transferred from DPS to this Cash Fund.

Due to the varying nature of the funding source (for example, the amount for FY 2019-20 is $408,000 compared to $4.8 million in FY 2018-19), the Department has prioritized these funds

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for Rapid Re-housing (RRH), an efficient and effective best practice for short to medium term financial and case management assistance to secure permanent housing.

Through a competitive procurement process, the Department awarded Volunteers of America - Colorado Branch (VOA) a contract to create a RRH program for re-entry. As of October 2018, VOA began one of the country’s first RRH for re-entry, known as COR3 (Colorado Rapid Re- housing for Re-Entry). COR3 aims to end the cycle of homelessness and incarceration by connecting individuals with behavioral health conditions, who would be exiting or have already exited incarceration into homelessness, to affordable, supportive housing. COR3 follows the National Alliance to End Homelessness (NAEH) standards for RRH to provide 220 eligible individuals annually with the following:  Housing Counseling/Housing Search to secure safe and affordable housing.  Other Supportive Services to assist participants in identifying and resolving destabilizing factors contributing to their housing crisis.  Temporary Financial Assistance designed to be flexible to the needs and resources of each household in support of securing and maintaining permanent housing.

As of June 30, 2019, COR3 is serving 104 participants throughout 30 counties in Colorado and VOA is actively working with the various justice agencies to outreach and assess additional potentially eligible participants

2 Department of Local Affairs, Division of Housing, Community and Non-Profit Services, Community Services, Low Income Rental Subsidies -- The Department is requested to submit a report by December 1, 2019, that summarizes monthly expenditures of General Fund appropriations in FY 2018-19 for rental subsidies for the Colorado Choice Transitions (CCT) program. The report should include the following associated data for each month in FY 2018-19:  the number of CCT clients leased up with State-funded housing vouchers;  the number of CCT clients searching for housing with a State-funded voucher;  the number of CCT clients leased up with federally-funded vouchers or federally-funded project-based rental assistance; and  the number of CCT clients searching for housing with federally-funded resources.

COMMENT: This request for information asked the Department to submit a report concerning the number and cost of CCT vouchers for FY 2018-19. The Department received an increase of $1,946,853 General Fund through the FY 2019-20 Long Bill to make up for a deficit in this program. The Department will submit a response to this RFI by December 1, 2019. The Department of Health Care Policy and Financing submitted a related report concerning healthcare savings resulting from the CCT program on November 1, 2019.

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APPENDIX D DEPARTMENT ANNUAL PERFORMANCE REPORT

Pursuant to Section 2-7-205 (1)(a)(I), C.R.S., by November 1 of each year, the Office of State Planning and Budgeting is required to publish an Annual Performance Report for the previous fiscal year for the Department of Local Affairs. This report is to include a summary of the department’s performance plan and most recent performance evaluation for the designated fiscal year. In addition, pursuant to Section 2-7-204 (3)(a)(I), C.R.S., the department is required to develop a Performance Plan and submit the plan for the current fiscal year to the Joint Budget Committee and appropriate Joint Committee of Reference by July 1 of each year.

For consideration by the Joint Budget Committee in prioritizing the Department's FY 2020-21 budget request, the FY 2018-19 Annual Performance Report and the FY 2019-20 Performance Plan can be found at the following link: https://www.colorado.gov/pacific/performancemanagement/department-performance-plans

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