Cities have the option of providing a number of utilities to their citizens. City residents can take advantage of water, sewage, electricity, natural gas and telecommunications services for a user fee. Such services typically are run as an enterprise or business-like function of the city, and therefore tend to have a separate budget and staffing structure. Over half of cities in Kentucky provide at least one utility, and around 40 percent provide both water and sewerage systems.
Utilities are the largest municipal expenditure category and the second largest revenue source after taxes only. Almost half of total city expenditures statewide fall under the utility category. Cities spent around $1.6 billion on utility systems in FY 2017.