To: Board of County Commissioners
Through: Dan Makelky, Director, Human Services Department
Prepared By:
prepared
Bob Prevost, Deputy Director, Human Services Department
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presenter
Presenter: Bob Prevost, Deputy Director, Human Services Department
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Subject:
title
1:45 PM *Potential Payment Error Rate Costs
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Purpose and Request:
recommended action
DHS is providing information to the Board of County Commissioners (BOCC) on the current state of the SFY 2026-27 Payment Error Rate (PER) and potential costs associated with HR-1 penalties for Arapahoe County, the PER level for the State of Colorado and a potential cost sharing proposal for counties and the state.
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Alignment with Strategic Plan: Economic Resilience and Stability - Strengthen systems-level investments and partnerships that advance food security and essential human services to promote economic stability.
Background and Discussion: Due to changes resulting from HR-1, the Payment Error Rate (PER) for states that exceed 6% will come with a reduction of the SNAP allocation issued by the federal government. A 6-7.99% PER will result in a 5% reduction in the federal allocation, an 8% - 9.99% PER will result in a 10% reduction, and a 10% - 13.33% PER will result in a 15% reduction. In FFY 25-26, Colorado’s PER was 10.09%. The current FFY shows Colorado to be above 8% but below 10%. Colorado received approximately $1.4 billion for this FFY.
With a 10% penalty for Colorado’s PER, the state will receive approximately $140 million less in the SNAP allocation from the federal government. The state’s plan is to have the state cover 60% of the reduction in allocation, and the counties will need to cover the remaining 40%. This would represent approximately $56 million owed by counties, and Arapahoe County makes up approximately 11% of the state’s total caseload. Therefore, Arapahoe County’s share of the penalty would represent approximately $6.1 million. These numbers may change based upon Colorado’s actual PER and pending federal legislation.
Alternatives: This study session is to share information with the BOCC.
Fiscal Impact: There will be fiscal implications resulting from these changes that will increase Arapahoe County’s share of the SNAP program as outlined above. Based on the above assumptions, the County could need to contribute approximately $6.1 million to support the SNAP program. This could be supported by the Human Services fund balance.
Alignment with Strategic Implementation Strategies: N/A
Staff Recommendation: Staff recommend using the Human Services fund balance to cover the actual costs of the penalty.
Concurrence: Todd Weaver, Finance Department Director