Enterprise Funds…Not Just for Starships

May 10, 2023

Revised August 11, 2023

Note: This content has been archived and may no longer be accurate or relevent

Enterprise Funds…Not Just for Starships Approximately a 3 minute read

Excerpted from an article Roger Kemp (May 2016)

What to Know:

An Enterprise Fund is created when a municipal public service generates sufficient revenues, from dedicated user fees. These fees pay the operating cost.
The use of Enterprise Funds treats a public service, such as city water, as a “cost center” – where only the users pay for the cost of the service. The “revenues”are then dedicated to cover the maintenance of the water infrastructure. A loss in the fund should be made up with increased user fees.
Enterprise funds satisfy an elected official’s aversion to increasing taxation, help offset cuts in Federal or State subsidies and support the opinion that certain public services should be paid for specifically by the users. The funds make it easier for politicians to raise fees on users rather than increasing taxes across the board.

Previous to the Glen Road project, at the time of municipal water installation, each homeowner was assessed $10,000 to offset costs of installation and maintenance. Starting with Glen Road, city water infrastructure was provided to approximately 37 homes without assessment until if and when they choose to connect to the system. This practice continues through the Strawberry Lane installation and will be the same with Birch Bluff. The $10k will be paid at the time the homeowner chooses to hook on to the water system.*

The financials reporting for each Enterprise fund can be found on the City website or at the MN Auditor’s website

*$10k buys a homeowner the privilege to hook on to the system. The homeowner is then responsible for all expenses related to piping the water from the street connection into their house.

What you can do:

1. To learn more about the possibility of a water pipe coming to your street, call City Hall