San Pedro de Pimampiro is a small municipality located in the Imbabura province in Ecuador. They obtain their water from forests located in the Andes mountain range, but have a supply shortage. A trust fund was established called "Fund for the Payment for Ecosystem Services" which is funded by a 20% levy on the price of drinking water in the municipality of Pimampiro, along with initial seed money from international donors. In order to determine payments for local land owners, baseline information was collected and an agreement was signed between the municipality and the individual families. Payments were based upon 8 land use categories, with the aim to conserve primary forest and páramo by paying 1.00 US$/month/ha for these categories.