(1) Reimbursement. (a) Except as provided in subsection (1)(b) of this section, the state department shall, within the limits of available appropriations, reimburse the county departments eighty percent of amounts expended by county departments for child welfare services, up to the amount of the county's allocation as determined pursuant to the provisions of this section, except as otherwise authorized in accordance with the close-out process described in subsection (7) of this section.

(b) The state department shall reimburse the county departments ninety percent of the amounts expended by county departments for adoption and relative guardianship assistance. The adoption and relative guardianship assistance is exempt from the close-out process described in subsection (7) of this section and the capped allocation described in subsection (3) of this section.

(2) Parental fees. The fiscal year beginning July 1, 1990, shall constitute the base fiscal year for the purpose of computing a base amount of parental fee collections by each county on behalf of children in foster care. Commencing with the fiscal year beginning July 1, 1991, any increased amount of parental fees over and above the base amount shall be retained by the county that collected such parental fees. Any moneys retained by each county pursuant to this subsection (2) may be used for child welfare services directed toward early intervention, placement prevention, and family preservation, or any other program funded pursuant to sections 19-2-211, 19-2-212, and 19-2-310, C.R.S.

(3) Allocation formula. (a) For state fiscal year 2018-19, and for each state fiscal year thereafter, the state department, after input from the child welfare allocations committee, shall develop formulas for capped and targeted allocations, including the child welfare services allocation, the allocation for additional county child welfare staff, and the allocation for family and children's programs. Allocation formulas developed pursuant to this subsection (3)(a) must include, effective for state fiscal year 2018-19 and each state fiscal year thereafter, the estimated caseload for the delivery of those specific child welfare services to be funded by the money in the capped or targeted allocations. The formulas must also include a performance-aligned component that supports the implementation of promising, supported, or well-supported practices, as defined in the federal "Family First Prevention Services Act of 2018", as defined in section 26-5-101 (4.5); be outcome-driven; and be aligned with desired state department-defined or federally required outcomes and goals. The allocation to each county from any given formula must be equitable and reflective of the cost of delivering services. If a county receives more than one capped or targeted allocation for the delivery of child welfare services, the formula must identify the specific caseload estimate attributable to each capped or targeted allocation.

(a.5) Pursuant to this subsection (3), a county that receives an allocation for county child welfare staff in addition to the child welfare services allocation shall fund existing staff positions as of January 1, 2015, through the child welfare services allocation. Positions created after January 1, 2015, may be funded through the allocation for county child welfare staff.

(a.6) On or before March 1 of any state fiscal year, the child welfare allocations committee shall submit written recommendations to the state department to inform the capped and targeted allocations. The child welfare allocations committee is encouraged to include documentation on how the recommendations support the achievement of expectations described in subsection (3)(a) of this section.

(b) In the event that the state department and the child welfare allocations committee do not reach an agreement on the allocation formula on or before June 1 of any state fiscal year for the succeeding state fiscal year, the state department and the child welfare allocations committee shall submit alternatives to the joint budget committee of the general assembly from which such joint budget committee shall select an allocation formula before the beginning of such succeeding state fiscal year.

(c) The formulas developed pursuant to this subsection (3) must identify the portion of the amounts appropriated for child welfare services that must be allocated to the counties for the provision of child welfare services.

(d) A county's election to make a transfer of federal funds pursuant to section 26-2-714 (9) for the provision of child welfare services shall not be the basis of an adjustment to the formula for developing such county's capped or targeted allocation under the provisions of this article.

(e) A county's cost savings shall not be the basis of an adjustment to the formula for developing such county's capped or targeted allocation under the provisions of this article.

(4) Allocations. (a) For state fiscal year 1997-98, and for each state fiscal year thereafter, all counties shall receive capped allocations for child welfare services. A county may receive one or more capped allocations for the provision of child welfare services. The counties may use capped allocation moneys for child welfare services without category restriction within a specific capped allocation if not prohibited by federal law.

(b)

(I) The state department shall make capped allocations for counties serving at least eighty percent of the total child welfare services population.

(II) For the balance of the state, the state department shall create one capped allocation or a series of capped allocations for the provision of child welfare services in the balance of the state. The state department shall establish a targeted allocation for each county in such group of counties designated for the purpose of such capped allocation or capped allocations.

(c) The state department, in consultation with the child welfare allocations committee, shall adopt rules for when a county may exceed its capped or targeted allocation or allocations.

(d) Except as provided for in subsections (4)(e) and (4)(f) of this section, the state department may only seek additional funding from the general assembly in a supplemental appropriations bill based upon caseload growth, subject to the provisions of subsection (7) of this section, or changes in federal law or federal funding.

(d.5)

(I) For fiscal years 2018-19 through 2023-24, in addition to funding received pursuant to subsection (4)(d) of this section, the state department may seek additional funding from the general assembly in a supplemental bill related to the implementation of subsection (6) of this section, and subject to the provisions of subsection (7) of this section or changes in federal law or federal funding.

(II) This subsection (4)(d.5) is repealed, effective July 1, 2024.

(e) A county's allocation or allocations may be amended due to caseload growth, subject to the provisions of subsection (7) of this section, or changes in federal law or federal funding.

(f) In addition to funding received pursuant to subsection (4)(d) of this section, the state department may submit a request to the general assembly for a change in a supplemental appropriations bill to the appropriation that funds adoption and relative guardianship assistance expenditures.

(5) Management training. The state department shall develop a management training package to be delivered to the counties no later than October 1, 1997, that shall assist the counties in the development of more effective management strategies for the utilization of resources in the delivery of child welfare services. The state department may utilize portions of the child welfare administration appropriations toward this end and is hereby authorized to pursue any private or public grants to fund such efforts.

(6) County negotiations with providers. (a) Subject to rules promulgated by the state department pursuant to subsection (6)(b) of this section and the methodology adopted pursuant to subsections (6)(e) to (6)(h) of this section, for each child or youth placed in an out-of-home placement setting, a county is authorized to negotiate rates related to services and outcomes with licensed out-of-home placement providers; except that a county may not negotiate rates below the base anchor rates established by the state department. Counties with an approved alternative methodology shall use a request for proposal process to solicit bids from licensed out-of-home placement providers that allows for adequate private competition and provides opportunities for competitive negotiations.

(b) On or before January 1, 2019, and as necessary thereafter, the state department shall work collaboratively with the state board of human services to promulgate rules governing the methodology by which counties may negotiate rates, services, and outcomes with licensed out-of-home placement providers. If a county negotiates a contract with a licensed out-of-home placement provider, the county may define the expected outcomes and include options for the payment of incentives to providers when such outcomes are achieved. The state department shall work collaboratively with the state board of human services to promulgate rules concerning such outcomes and incentive payments.

(c) (Deleted by amendment, L. 2017.)

(d) On or before July 1, 2019, and each July 1 thereafter, the state department shall complete a review of the methodology by which counties evaluate and negotiate rates, services, outcomes, and incentives with licensed out-of-home placement providers developed pursuant to this subsection (6) and any alternative methodology for which counties have approval from the state department to utilize. The methodology used is governed by rules promulgated by the state department pursuant to subsection (6)(b) of this section. In preparing for and conducting the review, the state department shall convene a group of persons representing the directors of county departments of human or social services and the licensed out-of-home placement provider community. On or before September 1 of each fiscal year, the group shall submit a report to the joint budget committee detailing any changes to the rate-setting methodology that results from the review conducted pursuant to this subsection (6)(d).

(e) On or before September 29, 2017, as a continuation of the review conducted pursuant to subsection (6)(d) of this section of the methodology by which counties evaluate and negotiate rates, services, and outcomes with licensed out-of-home placement providers, the state department shall contract with an independent vendor to:

(I) Perform a salary survey related to the delivery of child welfare services. When possible, the entity must not duplicate existing efforts that collect public employee salary information but must instead incorporate existing information into the overall analysis. The survey must inform the development of the rate-setting methodology pursuant to subsection (6)(e)(III) of this section and must account for the functions, responsibilities, qualifications, and other relevant information for each position. The study must also guarantee that available information is gathered from a diverse range of geographical locations throughout Colorado, including urban, suburban, rural, and mountain resort communities. The study must include information pertaining to federal and state regulations or licensing requirements for each position. The study must also include salary surveys that represent employees performing all facets of similar work, utilizing similar knowledge, skills, and abilities for:

(A) Licensed out-of-home placement providers who have a contract with the state department or a county;

(B) Child placement agency employees;

(C) Residential child care facility employees; and

(D) County employees involved with the provision of child welfare services.

(II) Perform an actuarial analysis of the costs necessary to provide services at a level required by state statute, departmental rule, or federal rules and regulations, as appropriate for the families referred, including salary comparisons between licensed out-of-home placement provider categories and overhead and administrative costs, and determine the extent to which the salary survey identified in subsection (6)(e)(I) of this section should inform the actuarial analysis. The analysis must inform the development of the rate-setting methodology pursuant to subsection (6)(e)(III) of this section and must also guarantee that available information is gathered from a diverse range of geographical locations throughout Colorado, including urban, suburban, rural, and mountain resort communities.

(III) Develop the rate-setting methodology for licensed out-of-home placement provider compensation. The independent vendor shall solicit input from representatives from the state department, counties, the licensed out-of-home placement provider community, and the department of health care policy and financing. The methodology must be based on equal representation by counties and licensed out-of home placement providers.

(f) On or before April 2, 2018, the state department shall provide the joint budget committee with a report defining the rate-setting methodology developed pursuant to subsection (6)(e)(III) of this section, including the process through which the daily rate was determined.

(g) Subject to available appropriations, the methodology must be implemented on or before July 1, 2018, except for those rates that must be approved by CMS. Rates that must be approved by CMS must be implemented upon approval. In the event that the representatives identified in subsection (6)(e) of this section do not agree on the rate-setting methodology on or before February 1, 2018, the state department, the county representatives, and the licensed out-of-home placement providers shall submit alternatives to the joint budget committee. The joint budget committee shall then select a methodology prior to the start of the succeeding state fiscal year. It is the intent of the general assembly that the rate methodology developed pursuant to this subsection (6) be fully implemented on or before June 30, 2022, through incremental rate increases established by the state department. For fiscal year 2019-20 through fiscal year 2021-22, the state department is encouraged to submit, as a part of the annual budget process, a request for increased appropriations to fund the increased rates required by the methodology.

(h) The rate-setting methodology developed pursuant to subsection (6)(e)(III) of this section must clearly utilize the daily rate and include:

(I) A process through which provider rate adjustments, including any cost of living adjustments, that are approved by the general assembly must be factored into establishing the daily rate; and

(II) A process through which outcomes related to the stability and well-being of the child are factored into establishing the daily rate contract with a licensed out-of-home placement provider.

(6.1) (a) On or before September 1, 2018, and on or before September 1 of each fiscal year thereafter, the state department, with input from counties, shall submit to the joint budget committee a report including information on workload increases or decreases for the preceding calendar year and the costs associated with such changes. The state department is encouraged to include in the report data on the cost of serving children placed in the care of licensed out-of-home placement providers based on case acuity.

(b) Notwithstanding section 24-1-136, the reporting requirement in subsection (6.1)(a) of this section continues indefinitely.

(6.2) For the purposes of this section, unless the context otherwise requires:

(a) "Acuity" means the level of service needed by the child or family.

(b) "CMS" means the federal centers for medicare and medicaid services in the United States department of health and human services.

(c) "Licensed out-of-home placement provider" means a licensed residential child care facility, a child placement agency, or a secure residential treatment center, as defined in section 26-6-102.

(d) "Workload" means the number of child welfare child abuse and neglect hotline calls, referrals, assessments, open cases, out-of-home placements, new adoptions, and adoption subsidies being handled by a county department of human or social services.

(6.5) The state department shall analyze and evaluate expenditures as reported by child placement agencies each year and compare such expenditures to county expenditures for the provision of foster care services. The state department shall provide, at least on an annual basis, such analyses and comparisons to county departments and the joint budget committee.

(6.6) (a) Each county or region of counties, as determined by the state department, shall, with assistance from the state department, perform an analysis of available in-home, family-like, and out-of-home placement settings. On or before July 1, 2019, each designated county or region of counties shall submit a report to the state department, including an evaluation of the types and availability of each placement option in the county or region of counties, available placement options in adjacent counties or region of counties, and a plan to expand in-home, family-like, and out-of-home placement settings capacity within the county or region of counties, if necessary.

(b) On or before July 1, 2020, the state department shall submit a report to the joint budget committee. The report must include:

(I) The county utilization rate for in-home, family-like, and out-of-home placement settings;

(II) An analysis of projected federal reimbursement for each type of placement pursuant to the federal "Family First Prevention Services Act of 2018", as defined in section 26-5-101 (4.5);

(III) A description of anticipated changes in federal reimbursement for each type of placement;

(IV) An analysis of statewide services and placement capacity, informed by the county reports required pursuant to subsection (6.6)(a) of this section;

(V) Projections for the statewide fiscal impact resulting from changes in federal reimbursement; and

(VI) A plan to minimize the fiscal impact to the state resulting from changes in federal reimbursement for services and placement types.

(7) Close-out process for county allocations. (a) (I) For state fiscal year 2018-19, and for each state fiscal year thereafter, the state department shall retain any unspent general fund money included in the initial allocation to each balance of state county, up to five percent of the total general fund money allocated to balance of state counties, as described in subsection (4)(b) of this section and referred to in this subsection (7)(a) as "small and medium-sized counties".

(II) Retained money pursuant to subsection (7)(a)(I) of this section must be transferred into the child welfare prevention and intervention services cash fund, which is hereby created in the state treasury and referred to in this subsection (7) as the "fund".

(III) The state department is authorized to accept gifts, grants, and donations, which must be transferred into the fund, in addition to transfers from the general fund as appropriated by the general assembly.

(IV) Money from the fund must be allocated by the state department, in consultation with counties, to small and medium-sized counties to increase local child welfare prevention and intervention services capacity and shall be used by counties for the delivery of child welfare prevention and intervention services that have been approved by the state department.

(V) The state department shall work collaboratively with the state board of human services to promulgate rules concerning the allocation and use of money from the fund.

(a.5) Subject to the limitations set forth in this subsection (7), the state department may, at the end of a state fiscal year based upon the recommendations of the child welfare allocations committee, allocate any unexpended capped funds for the delivery of specific child welfare services to any one or more counties whose spending has exceeded a capped allocation for such specific child welfare services. Subsequent to the allocation of any unexpended capped funds, any remaining state general fund money must be transferred into the fund for allocation by the state department to counties for the delivery of state department-approved child welfare prevention and intervention services.

(b) A county may only receive funds pursuant to the provisions of subsection (7)(a) of this section if the requirements of section 26-5-103.5 (4) have been satisfied, for expenditures other than those attributable to administrative and support functions as referred to in section 26-5-101 (3)(m), as defined in accordance with the provisions of section 26-5-103.5 (4), and for authorized expenditures attributable to caseload increases beyond the caseload estimate established pursuant to subsection (3) of this section for a specific capped allocation.

(c) A county may not receive funds pursuant to the provisions of subsection (7)(a) of this section for authorized expenditures attributable to caseload increases for services in one capped allocation from unexpended capped funds in another capped allocation.

(d) As used in this section, "unexpended capped funds" means funds that have been appropriated for child welfare services, allocated to a county or group of counties as a capped allocation or allocations pursuant to the provisions of subsection (4) of this section.

(8) County-level child welfare staff. (a) For the state fiscal year 2015-16, and for each state fiscal year thereafter, each county may receive a capped allocation in addition to its portion of the child welfare block grant for the specific purpose of hiring new child welfare staff at the county level in addition to child welfare staff existing as of January 1, 2015. A county that utilizes said additional allocation shall continue to pay for child welfare staff positions existing as of January 1, 2015, through the child welfare block grant. The child welfare allocations committee shall determine the allocation formula pursuant to section 26-5-103.5 (5).

(b) Each county that receives an allocation for child welfare staff pursuant to paragraph (a) of this subsection (8) shall provide a ten percent match to state and federal moneys provided pursuant to this subsection (8); except that a county that qualifies as tier 1 or tier 2 for purposes of the county tax base relief fund, as defined in section 26-1-126 (3) and (4), is funded at one hundred percent of state and federal funds provided pursuant to this subsection (8).

(c) Any moneys allocated pursuant to this subsection (8) that are not expended by the end of a fiscal year for thepurpose specified in paragraph (a) of this subsection (8) must revert back to the general fund.

(9) Repealed.