Base Funding Allocation for Consolidated Local Health Departments
The Department of Health Services (DHS), Division of Public Health (DPH) funds local health departments (LHDs) through a variety of grant programs. The Consolidated Contract combines DPH funding for multiple programs into a single, cost-based reimbursement contract. Allocations are determined through programmatic funding formulas, several of which include a base allocation for each local health department.
A local health department, as defined in Wis. Stat. §
- One health officer (meeting the qualifications of Wis. Stat. §
251.06 ). - One board of health (established under Wis. Stat. §
251.04 ).
Additionally, a local health department:
- Submits one annual report to their board of health (Wis. Stat. §
251.06(3)(h) ) and DHS (Wis. Admin. Code §DHS140.04(2).(a) ) - Undergoes one review of their operations by the Department of Health Services (Wis. Admin. Code § DHS
140.08 ).
Consolidation of health departments
A consolidation occurs when two or more local governing entities enter into formal agreements to provide the required services of a LHD outlined in Wis. Stat. §
- Establishing a new entity formed by combining existing LHDs.
- Consolidating one or more LHDs into an existing LHD.
A consolidated LHD will have one agency name and meet the definition of a local health department defined in Wisconsin law.
Since 2008, DPH has implemented a policy for programs that include base funding in their consolidated contract allocations that when two or more health departments are consolidated into one, the jurisdiction would continue to receive base allocations for those health departments for three years. At the end of the three years, the consolidated health department would receive one base allocation. The intent of this policy is to provide a temporary funding buffer after consolidating for LHDs to acclimate to the new status as one LHD.
In 2024, a workgroup formed with DPH staff, health department leaders from each region and a representative of the Wisconsin Association of Local Health Departments and Boards to explore the existing policy and how consolidated agencies have historically been funded. Their intent was to identify if the existing policy should be modified. The workgroup convened to review and discuss the current policy, how one LHD’s funding impacts all LHDs’ funding in an allocation formula, and options for policy revisions.
The non-DPH staff workgroup members reviewed, discussed, and ranked various options. The preferred option for an updated policy lengthens the funding buffer by including a step-down from full base allocation to the new single base allocation. The policy and procedure recommendations were presented to DPH leadership and adopted January 1, 2025. This policy is not retroactive.
When two or more LHDs consolidate into one, the newly formed jurisdiction will continue to receive full base allocations for three consolidated contracting cycles or three, one-year stand-alone agreements. Demographic and other data in the formula will be combined for those health departments.
The consolidated agency will receive both individual base allocations (200% of standard base) for consolidated contracting years (CCY) 1 through 3. The base allocation then reduces to 150% of standard base in CCY4, and finally to a single standard base in CCY5.
Example: A program with a base allocation of $15,000 and two LHDs consolidating into one:
- CCY 1-3 after consolidation: Base allocation = $30,000
- CCY 4 after consolidation: Base allocation = $22,500
- CCY 5 after consolidation: Base allocation = $15,000
- The process begins when a local health officer (LHO) notifies their DHS Office of Policy and Practice Alignment (OPPA) regional director, listed on the DHS Division of Public Health Regional Information webpage, of a possible LHD consolidation.
- The OPPA regional director will connect with DPH programs to identify the fiscal and programmatic impacts of consolidating.
- The OPPA regional director will connect with the LHO to review potential impacts.
- The LHO will provide the OPPA regional director with regular updates on the status and the effective date of the consolidation.
- The OPPA regional director will notify DPH programs and others when the consolidation is effective. This effective date will be maintained on the Wisconsin Local Health Department Agency Information Spreadsheet posted on the DHS Local Public Health webpage.
- Program areas will implement changes to base funding allocations in the next program funding cycle after the official date.
Health departments consolidating in 2024 or later will be impacted.
This policy is not retroactive and does not impact Tribal nation funding.
OPPA regional director contact information is available on the DHS Division of Public Health Regional Information webpage.
DHS statutory responsibility for supporting the public health system includes Wis. Stat. §§