Opinion ID: 1433768
Heading Depth: 1
Heading Rank: 1

Heading: Factual and Legal History

Text: The petitioners before us are trial defendants Roy Romer, Governor of the State of Colorado; the Department of Human Services; Barbara McDonnell, the Executive Director of the Department of Human Services; and the State Board of Human Services and its members in their official capacity (collectively, the Department). [2] The plaintiff in the trial court and the respondent before us is the Pueblo County Board of County Commissioners (County). Before discussing the facts of this case, we briefly review Colorado public assistance law.
Under the Colorado Human Services Code,§§ 26-1-101 to -201, 8 C.R.S. (1997) (Human Services Code), the costs of our state public assistance programs are shared by the federal government, the county, and the state. [3] See Colorado Dep't of Soc. Servs. v. Board of County Comm'rs, 697 P.2d 1, 6 (Colo.1985). State and county agencies have funding responsibility together with general state control over public assistance programs, Colorado Dep't of Soc. Servs., 697 P.2d at 5, which include medical assistance, adult foster care programs, child welfare services, programs for the aging, and programs established pursuant to the Colorado Medical Assistance Act. See § 26-1-109, 8 C.R.S. (1997). Under current law, eighty percent of the overall program and administrative costs of public assistance are paid by the federal government and the state; the remaining twenty percent are paid by the county. See § 26-1-122(1)(d), (3)(b), (4)(b), 8 C.R.S. (1997); Colorado Dep't of Soc. Servs., 697 P.2d at 6. The funds representing the county's twenty percent contribution are collected from the proceeds of an ad valorem tax levied on property located within the county. See § 26-1-125, 8 C.R.S. (1997); Colorado Dep't of Soc. Servs., 697 P.2d at 7. The county's contribution to the costs of public assistance programs results from the social services mill levy, the proceeds of which are maintained in a county social services fund. See § 26-1-123, 8 C.R.S. (1997). A county's share of the program costs varies from program to program. For example, the state bears the entire cost of Old Age Pension payments, see Colo. Const. art XXIV; Low Income Energy Assistance Program costs are financed entirely by the federal government, see § 26-2-122.5, 8 C.R.S. (1997); while the county pays five percent of the program costs of the aid to the needy, disabled home care, and adult foster care programs, see § 26-1-122(4)(e), 8 C.R.S. (1997). As might be expected in a state of urban as well as rural and agricultural centers, the funding burden for these statewide programs does not operate equally among the various counties. Some counties have residents with greater social services needs than others, while some counties have taxable property with much greater value than other counties. As a result, some counties must impose taxes at a higher mill levy than their sister counties in order to generate sufficient funds to pay their share of administrative and program costs. See §§ 26-1-123, 26-1-125, and 26-1-126, 8 C.R.S. (1997). Addressing this inequality, the General Assembly created a county contingency fund (Contingency Fund) to provide additional state funds to counties with relatively greater social services needs but a relatively lower assessed value of taxable property. See § 26-1-126. In essence, as is relevant to Pueblo County and the case before us, the contingency fund statute, section 26-1-126, provides that if Pueblo County imposes a property tax of 3.0 or greater mill levy and the proceeds of such a tax do not generate sufficient funds to pay the county's obligations as set forth in section 26-1-122, 8 C.R.S. (1997), or, generally, the twenty percent share of administration and public assistance program costs, the county is eligible for payments from the Contingency Fund. See § 26-1-126(2); Colorado Dep't of Soc. Servs., 697 P.2d at 8. Under the funding scheme of the Contingency Fund, however, the state is only obligated to advance fifty percent of the difference between the county's obligation and monies raised by the social services mill levy (the shortfall). See § 26-1-126(3), 8 C.R.S. (1997). In effect, then, this funding scheme requires the county itself to match, dollar-for-dollar, any payments made out of the Contingency Fund. See Colorado Dep't of Soc. Servs., 697 P.2d at 21-23. Hence, any shortfall is covered by both other county funds as well as any Contingency Fund advancements. In Colorado Department of Social Services, we examined the legislative history and earlier amendments to our Human Services Code and held that by establishing the Contingency Fund, the General Assembly intended to obligate the state to pay each county for fifty percent of any shortfall. [4] Justice Kirshbaum, writing for a unanimous court, opined that: By replacing the word `may' with `shall,' the General Assembly indicated an intent to make mandatory the advancement of funds to qualifying counties. The references ... to the [State] Department's responsibility for funding eighty percent of public assistance programs subject to funds made available for that purpose, indicates that the contingency fund provision requires additional funding. Id. at 22. However, while our interpretation of the plain language of the Contingency Fund Statute in that case was sound, the General Assembly amended that statute. Finding disfavor with a result that obligated the state to make unlimited appropriations to the Contingency Fund to cover county shortfalls, the General Assembly responded by amending the Human Services Code, enacting House Bill No. 1376 on June 11, 1985 (the Act). See 1985 Colo. Sess. Laws, ch. 58 at 289-90. The Act consisted of three principal provisions. The first provision enacted section 2-4-215, 1 C.R.S. (1997). Section 2-4-215 served to clarify the rules of statutory construction by making it clear that legislation passed by one session of the General Assembly cannot bind any future legislative session to appropriate any sums of money. [5] The second provision of the Act added section 26-1-126.5, 8 C.R.S. (1997), to the Human Services Code. Section 26-1-126.5, in effect, amended the contingency fund statute or section 26-1-126 by emphasizing that the existence of the Contingency Fund does not result in any state liability for amounts not appropriated to that fund and by expressly stating that the General Assembly has complete discretion to determine annually the level of funding in the Contingency Fund. § 26-1-126.5. Finally, the third provision of the Act added a new subsection, section 26-1-126(5), 8 C.R.S. (1997), to the contingency fund statute. Section 26-1-126(5) provides, in pertinent part: If state and county appropriations are insufficient to meet the administrative and program costs of public assistance and the administrative costs of medical assistance and food stamps, then the executive director of the department of social services and the state board of social services shall act pursuant to sections 26-1-121(1)(c) and 26-1-122(5) to reduce the rate of expenditures so that it matches the available funds. In this fashion, the legislature acted to alter the result that would otherwise follow from our decision in Colorado Department of Social Services. See § 26-1-126.5.
The facts of this dispute are based, in substantial part, upon a joint stipulation of facts filed before the trial court. This case involves State fiscal years 1987, 1988, 1989, 1990, and 1991. During those years, the General Assembly did not appropriate sufficient money to the Contingency Fund so as to allow the County to meet its social services obligation or its twenty percent share burden. [6] Accordingly, the County received $1,612,187 less from the Contingency Fund than necessary to meet its social services obligations. Because it received less money from the Contingency Fund than it expected, the County social services fund showed a deficit for each of the fiscal years in question, amounting to a total of $1,612,187. The County sought administrative relief from its social services deficits in the form of a reduction in statewide expenditures for social services pursuant to section 26-1-126(5). When state officials refused to voluntarily reduce statewide social services budget expenditures that were legislatively approved and appropriated, the County initiated judicial proceedings against the Department.
On May 6, 1991, the County filed a complaint in the Denver District Court. Citing the State Administrative Procedure Act (APA), section 24-4-106(4) and (4.5), the County sought a declaratory judgment that the Department's failure to reduce the rate of statewide social services expenditures was arbitrary and capricious, [and] a denial of the statutory rights of the County. In its prayer, the County asked the trial court to issue an order directing the Department to reduce the rate of statewide social services expenditure and to reimburse Pueblo County for its current social services deficit. [7] On June 6, 1991, the County commenced a second law suit by filing a complaint in the Pueblo County District Court. That complaint named the Department as defendants and asked the Pueblo court to enjoin any efforts by defendants to compel the County to pay its social services fund deficit with county funds. In its complaint, the County asserted that sections 26-1-121(1)(c), 26-1-122(5), and 26-1-126(5), 8 C.R.S. (1997), imposed certain duties upon the Department and established statutory legal rights in each county, that is, the power to reduce the rate of statewide social services expenditure. Sometime thereafter, the Pueblo County District Court case was transferred to the Denver District Court (trial court) and the two cases were consolidated. No administrative record of the questioned Department action or inaction was ever filed with the trial court. [8] On April 15, 1994, however, the parties submitted a joint stipulation of facts and filed cross-motions for summary judgment. [9] The trial court granted the Department's motion and dismissed the County's complaint. Relying on Board of County Commissioners v. Merit System Council, 662 P.2d 1093, 1094 (Colo.App.1982), the trial court ruled that the County is subordinate to the Department, a superior state agency, and, therefore, does not have standing to challenge the actions of the Department. On April 4, 1995, the trial court entered judgment in favor of the Department. On appeal, the court of appeals concluded that the County had standing and reversed. See Board of County Comm'rs v. Romer, 931 P.2d 504 (Colo.App.1996). The court of appeals noted that the County administers its county services budget and has  exclusive authority over all budgetary and financial matters of Pueblo County. Id. at 509. The court of appeals found that the County social services fund experienced a short-fall that adversely affected the general financial well-being of the county. Id. at 508. Despite concluding the County is subordinate to the Department, the court of appeals held that under the facts of this case the [County] has statutory authority to seek judicial review of the Department's actions. The court reasoned that because the Department's actions adversely affected the County's general financial well-being, under APA section 24-4-106(4), 10A C.R.S. (1986), the County has standing because it was adversely affected or aggrieved by agency action. See id. at 508-10. The court of appeals, therefore, held that the County has standing and could compel the Department to comply with its statutory duties under section 26-1-126(5), 8 C.R.S. (1997).