TITLE: CONCERNING THE ESTABLISHMENT OF THE COLORADO YOUTH CHALLENGE CORPS PROGRAM.

The engrossed bill would create the "Colorado Youth Challenge Corps Program Act". The Department of Military Affairs (MA) would provide alternative schools and methods of education for at-risk youth with National Guard contracted civilian employees, facilities, and equipment. "At-risk youth" would be persons under 18 years of age who have been suspended or expelled, habitually truant, or habitually disruptive in school. The department would enter into a cooperative agreement with the state that would provide the programs criteria and conditions. The Adjutant General (AG) would apply for federal moneys to implement and operate the program. The program could also receive grants, gifts, or donations which would be deposited into the Youth Challenge Corps Fund and requires the department to contract for the FTE. The bill also states that MA anticipates receiving $2,100,000 in federal funds for the youth challenge corps program. The bill would become effective upon the Governor’s signature.

STATE FISCAL IMPACT SUMMARY	FY 1997/98	FY 1998/99	FY 1999/2000
State Revenues General Fund Federal Funds		$2,100,000	$1,960,000
State Expenditures General Fund	$43,000	* $700,000	$840,000
FTE Position Change	1.3 Contract FTE	49 Contract FTE	49 Contract FTE
Local Government Impact — None

* This amount has been included in HB 98-1234, the School Finance Bill. Should this line be removed from the School Finance Bill, this fiscal note would imply that a spending authority would be required.

MA has operated a federally funded program for the past five years which is similar to the program created in this bill. The old program was a six week program to help at-risk students to receive their GED. The federal funds for the old program have been eliminated and a new program with new funds for an expanded program which requires state matching funds was added.

The bill directs the AG to apply for federal funds to implement and operate the Youth Challenge Corp Program. It is estimated that the state would receive $2.1 million in FY 1998-99 for this program. The federal funding would decrease by five percent per year until the state paid 40 percent of the program cost. The federal funds would be deposited into the Youth Challenge Corps Fund. The bill also allows the department to receive gifts, grants, and donations. The department has indicated that other state programs in the Department of Education and Judicial branch dealing with at-risk youth would be a major source of funding for this program in the future, thereby, reducing or eliminating future General Fund appropriations.

The Department of Military Affairs (MA) would conduct two sessions annually. The sessions would be twenty-two weeks in length and contain 100 students per session. The requirements for the session length and the number of students involved are stipulated in the Master Cooperative Agreement the state would have with the federal government. The department has obtained the state matching funds through HB 98-1234 (School Finance Bill) for FY 1998-99. The bill would require that the department implement the start-up portion of the program in the current fiscal year within existing appropriations. In FY 1997-98, the department would require start-up costs of up to 1.3 FTE and $43,000. Of that amount, $37,370 would be for personal services, $4,848 would be for operating costs, and $782 would be for utilities. In FY 1998-99, MA would require 49.0 contract FTE and $2.8 million to operate the Youth Challenge Corps Program. Of that amount, 12.2 contract FTE and $700,000 would be General Funds and 36.8 contract FTE and $2.1 million would be federal funds. The amount of funding this program would receive from gifts, grants, and donations has not been estimated at this time. However, should the gifts, grants, and donations received not be adequate to fund the program, the MA may request future General Fund appropriations. The state share would increase by five percent per year until the state share would be 40 percent of the program costs. Table I provides a summary of the increased state share of the program. Table II below provides a summary of the expenditures for this program in FY 1998-99 by fund.

State Share Of Colorado Youth Challenge Corps Program
Fiscal Year	State %	Total Program Cost	State Share	Federal Share
FY 97-98	Startup	up to $43,000	up to $43,000	$0
FY 98-99	25%	2,800,000	700,000	2,100,000
FY 99-2000	30%	2,800,000	840,000	1,960,000
FY 2000-2001	35%	2,800,000	980,000	1,820,000
FY 2001-2002	40%	$2,800,000	$1,120,000	$1,680,000

This fiscal note implies that the Department of Military Affairs would require 1.3 contract FTE and $43,000 in General Fund spending authority for FY 1997-98 to implement this bill. However, the bill contains a statement that the Department of Military Affairs is to implement the first years start-up costs of this program within existing resources. The FY 1998-99 state matching funds for this program have been appropriated in HB 98-1234. The department would not require spending authority for the federal funds provided in this program.

The bill contains an appropriations clause that appropriates $700,000 from the Schools of Choice Fund. HB 98-1234 eliminates the Schools of Choice Fund and transfers the money in the fund to the Public School Fund. HB 98-1234 also contains an appropriation totaling $700,000 from the Public School Fund for this program. Upon HB 98-1234, adjustments should be made to this bill to eliminate any double appropriation or appropriation from a fund that does not exist.

FY 1998-99 Expenditures by Fund Source
	Federal Funds	State General Fund	TOTAL
Personal Services	$1,341,461	$447,154	$1,788,615
Operating Expenses	743,539	247,846	991,385
Utility Expenses	15,000	5,000	20,000
FTE (contract)	36.8	12.2	49.0
Total Expenses	$2,100,000	$700,000	$2,800,000