Enterprise Fund
A self-supporting government fund that operates like a business — charging user fees to cover costs for services like water, sewer, electric, or transit.
How It Works
Enterprise funds are designed to be financially self-sustaining: the fees charged for the service should cover all operating costs, debt service, and capital investment. Common city enterprise funds include water, wastewater/sewer, electric utilities, solid waste, parking, and airports. Enterprise fund revenue and expenses are reported separately from the general fund. Some cities transfer excess enterprise fund revenue to the general fund, which can obscure the true cost of general government operations.
Related Terms
- General Fund — The primary operating fund for a city government, covering most day-to-day services like police, fire, parks, and administration.
- User Fees and Charges — Payments collected by city government from individuals who use specific services — water bills, building permits, park admission, recreation program fees.
About This Definition
This definition is part of the CitySpend Municipal Finance Glossary — 59 terms explaining how city governments fund and manage public services. All definitions are written in plain language for taxpayers, journalists, students, and municipal bond investors.