Public Enterprise Funds
An example of an enterprise fund would be operation of water services by a local government. The fund would collect revenues from customers (usually a set charge per account plus varying amounts based on the number of gallons used), and would pay expenses such as employees' payroll, purchases of water (either from wells it operates, or from another authority owning a reservoir), and maintain water lines. Amounts in excess of needs would be set aside for capital improvements (such as planned replacement of aging water lines, or expansion of services to areas not currently developed). The amounts to be collected would be periodically adjusted to account for changes in expenses.
The key is that the funds are operated separately of the General Fund.