Overview:

At the Annual Town Meeting held in May 1989, it was voted the Topsfield Water Department move to an ENTERPRISE FUND system of accounting. This legislation, from Chapter 44 Section 53F1/2 of the Massachusetts General Laws, allows the Water Department to operate in a capacity resembling a stand-alone business. The Water Department began operating under Enterprise on July 1, 1990.

Under Enterprise, all revenue and expenses related to the Water Department are accounted for seperately from other town business, and are not considered part of the General Town Fund. This has several advantages:

• Water rates and revenues are more closely matched with anticipated expenses.
• Those receiving town water are assured the money they pay for water is used only to operate the Water Department, not to subsidize the tax revenue and General Town Fund.
• Conversely, those who have their own well or obtain water from a private water supplier are assured their property taxes are not appropriated to pay for operating the Water Department should water rates be insufficient to cover operating costs.
• The Water Department is responsible for its own long-range financial planning to cover major expenditures such as large main breaks, system revovation and expansion, and equipment purchases.

In more simple terms, what the customer pays for water can only be used to operate the Water Department, and the Water Department must generate sufficient revenue to cover the cost of doing business.