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Financial Sustainability during COVID-19: Professor Ernesto’s decision to help his community

By Azucena Serrano, Technical Assistant in Financial Sustainability, Water For People in Honduras

Versión en español aquí.

Go up for another 15 minutes and around the bend, there it is! That is the exact address to get to Las Casitas village, if you were to ask at the famous Amapa detour.  

Two months after declaring quarantine in the country due to the global COVID-19 pandemic and the issuance of the decree1 by the Regulatory Agency for Drinking Water and Sanitation (ERSAPS, for the Spanish acronym) – including the suspension of service cut-offs due to non-payment for a period of three months and the temporary suspension of tariff adjustments – about 50% of the San Antonio de Cortés municipality was not collecting a tariff. 

However, the rest of the communities in this municipality could not stop collecting because, otherwise, the provision of the water service would be in danger. 

Las Casitas is a community of approximately 900 people, located in the municipality of San Antonio de Cortés. This community currently has a drinking water system built 17 years ago which stands out in the municipality for its administration’s fine leadership. They have always had a tariff that covers 100% of the operations and maintenance costs of the water system, and any additional income that the system does not immediately require has been converted into savings for its replacement.  

If we review the history that highlights the leadership in this community, it will take us to the well-known professor Ernesto Amaya who has been a board member of the Drinking Water and Sanitation Administration Board (JAAPS, for the Spanish acronym) for 13 years as treasurer, secretary, and now president. During his career with the JAAPS, he tells us how, in 2003, his community became divided over a crisis caused by lack of water, which led them to initiate the construction of their current system.  

Having a strong sense of ownership for the system, the professor is always thinking about compliance with the laws and responding to the social needs of his community, especially the children, for whom he fights to have safe water services forever. 

That is why, following the ERSAPS decree, the JAAPS led by Professor Ernesto Amaya conducted an analysis, consulted with the Municipal Technical Unit for Water and Sanitation (UTMAS, for the Spanish acronym) and ERSAPS, and decided to apply the principle of tariff regime solidarity, which suspends the payment for the water service as long as the quarantine lasts and families are receiving limited income.  

Professor Ernesto Amaya – a person very dedicated to ensuring the sustainability of water and sanitation services
"The most beautiful pearls I have seen come out of the faucet in my house." – Ernesto Amaya, San Antonio de Cortés

Now we ask ourselves, if the collection of tariffs in rural communities is fundamental to sustain the systems: How can this community sustain its system without collecting tariffs during this time? 

The answer lies in the fact that Las Casitas is part of the 26% of communities in the municipality2 that have a sustainable tariff that not only covers the operation and maintenance of the systems, but also considers the future when the system completes its lifespan. 

The decision was not hard; they only had to prioritize and realize that the savings intended to replace their system could instead be used to help families by suspending payment in times of emergency. This can only be achieved with financial sustainability. 

Water For People, in partnership with the Municipal Water and Sanitation Offices, supports service providers to carry out reviews and adjustments of tariffs for water service when necessary. For this process, the use of financial tools such as AtWhatCost helps establish a financial balance between costs and income and ensures adequate operation and maintenance of the systems as well as their eventual replacement, either partially or as much as funding allows in the future. 

Thanks to these actions in the municipality of San Antonio de Cortes, progress has been made in the last 5 years, as shown in the following graph. 

This recent experience highlights even more the need to strengthen the financial sustainability of service providers, always thinking of the future and emergencies like this one. 

In addition, financial sustainability should draw the attention of municipal authorities as those responsible for the provision of drinking water and sanitation services. Ensuring the provision of water services is critical because it is one of the main ways to prevent the spread of the pandemic. 

Considering that, currently, the national and local governments are helping with food valued at Lps 5003 for the families considered the poorest, which is the equivalent of almost eight months’ worth of water tariff payments. If we take the average tariff of San Antonio de Cortés as a reference, then water should be added to the list of the most essential basic products. In this way, they could partially subsidize the JAAPS to maintain service levels in times of crisis. 

The financial sustainability model is functional at all levels if the decisions made from the outset consider the necessary decisions during a crisis, hence ensuring the welfare of the population. 

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