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Published on: 26/06/2017

The municipality of Marcala is considered Honduras' coffee capital. The winding road to reach it takes you past mountainsides covered in mist and clouds. These provide the area with plenty of water and a cool climate, ideal to grow the best coffee in the country. Just like its mountains, the municipal WASH budget is covered in mist and clouds. It is initially not very visible and clear. And it takes winding roads to uncover some of its expenditure on WASH. But once that is done, interesting and encouraging data are found, showing that the municipality is spending a decent amount on WASH, though not yet enough.

This situation finds its roots in the structure of decentralisation of the Honduran water sector. The functional decentralisation started in 2003 with the approval of the Framework Law for Water Supply and Sanitation. From that moment on municipalities were mandated to be service authorities, meaning they had to fulfil functions such as planning, monitoring and coordinating water supply and sanitation as well as doing some of the capital investments. These roles are very important to ensure sustainability of services. The fiscal decentralisation that should provide municipalities with the financial resources to actually fulfil these roles has only followed later. The WASH sector's financial policy, which was approved only last year, clearly identifies the need to cover these "sector modernisation" costs, or what we call direct support costs. However, that financial policy does not provide any guidance on how much municipalities should spend on such direct support, or where to fund this from. 

We therefore undertook a study* to analyse how many resources - both financial and human - are being spent by municipalities on direct support, whether this level of spending is adequate, or - if not - what an ideal level of spending should be. This analysis was done in some 14 municipalities associated with the Para Todos, Para Siempre (Everyone, Forever) initiative, including Marcala. The analysis consisted of applying an Excel tool to capture all the expenditures made by the municipality on direct support. These were obtained through interviews with technical staff from the municipalities, as well as a budget reviews. Moreover, this consisted of making an estimate of the personnel costs and other expenses required to carry out all the direct support functions adequately. Obtaining this information was not straightforward, as municipalities usually do not have a dedicated line item for 'direct support' functions, as it is more part of their general spending on WASH. 

Photo: interview with municipal WASH technician in Marcala

The study revealed that almost all 14 municipalities have established the institutional structures for fulfilling their service authority functions, including have dedicated WASH technical staff. On average municipalities dedicate 2.2 FTE (Full Time Equivalent) employees to WASH. These 2.2 employees are mainly municipal staff themselves, but also include some time dedication from staff from mancomunidades (associations between municipalities) and Health Ministry staff. This means that every FTE is in charge of on average 17 water supply systems or 29 communities. The value of this staff time is on average 300,000 HNL (about 4,300 US$) per municipality, or 16 HNL/rural inhabitant (0.68 US$/rural inhabitant). This is a bit below reference values we found in earlier work, where a minimum of 1 US$/inhabitant/year was recommended for spending on direct support.

As a result, in spite of having the institutional frameworks established, most municipalities are not fulfilling their service authority roles adequately. For example, they may have a municipal WASH council, but it may only exist on paper, and not be developing municipal WASH plans. Or, it may not be undertaking monitoring with SIASAR. 

To address this, we made an estimate of the ideal spending that would be needed to fulfil all the functions. This came up to an amount of about 39 HNL/rural inhabitant (1.68 US$/rural inhabitant), and a time dedication of some 3.8 FTE/municipalities. There is some variation in the estimates, and in some cases the estimates are too high. Still we consider a median amount of 40 HNL/rural inhabitant, a realistic reference value for municipalities that seek to fully comply with their service authority roles. 

This means that municipalities are currently spending already a reasonable amount on direct support, reflected in the fact that most of the institutional frameworks are in place, that they have dedicated staff and that some of the functions are being fulfilled. But more needs to be done. 

Photo: Marcala town hall

Marcala is no exception to this. After we literally went through the clouds and mist to reach Marcala, we uncovered its spending on WASH. This showed that it had done a great job in putting its institutional framework in place, but still has insufficient technical staff. We recommend the municipality amongst others to hire an additional technician, to support with the regular monitoring and technical assistance to the more than 70 rural water systems in the area. In that way, the people in Marcala should be able to get more sustainable water supplies, and keep on producing the nice coffee that rightfully makes it the country's coffee capital.

*The full report is available below, but in Spanish only. 

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At IRC we have strong opinions and we value honest and frank discussion, so you won't be surprised to hear that not all the opinions on this site represent our official policy.

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