What is an Enterprise Fund?

Broomfield’s Water, Sewer, Water Reclamation and Stormwater Fund (collectively termed the Utility Funds) operate as “Enterprise” funds where rates and fees within each fund are set to cover the costs of providing respective services to customers. By law, enterprise funds cannot be supported by tax revenues but rather by service charges and fees. They must operate as a “standalone business” and generate the revenues necessary to provide services.

The revenue components include:

• Base Fees: supports fixed operating costs (staff, electricity, preventative maintenance)
• User Charges: supports variable operating and maintenance costs due to metered consumption (additional chemicals, electricity, asset replacement, and corrective maintenance)
• License Fees: support capital expansion or growth

The operating component accounts for the day-to-day functions of running the utility for existing customers, the costs of providing services, and the maintenance of the existing capital investment. The major revenue sources associated with the operating components are user service charges and fees.

The capital component includes costs related to building or expanding the existing system, which may include new debt associated with constructing new infrastructure. The major revenue associated with the capital component is the user fee if the capital is designed to improve an existing asset. A license fee is designed to recover the costs of capital improvements or facility expansions when a new or expanding user ties into the system.