Changes in the Usage of Enterprise Funds by Large City Governments

Abstract

Using a nationwide sample of large cities, this article analyzes changes in the use of enterprise funds during the past decade. The major findings are that (1) the aggregate number of enterprise funds increased, with the largest increases occurring in solid waste and drainage; (2) part of the increase was offset by the elimination of some enterprise funds, particularly in the area of recreational services; (3) 60 percent of the cities experienced one or more changes in the types of enterprise funds they used; (4) the revenues associated with most types of enterprise funds have increased at a faster rate than general fund revenues; and (5) some cities are using alternative fiscal structures (e.g., special revenue funds and discrete component units) to account for services that are reported as enterprise funds in other cities. A continuum of fiscal structures is presented as a framework for addressing why cities might choose one structure over another and what the possible implications of a particular fiscal structure might be.