City of Turku Annual Report 2010
City of Turku Annual Report 2010
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Pictures: the City of Turku, unless otherwise stated. Cover picture: Esko Keski-Oja
Mayor | Aleksi Randell
From uncertainty to a situation under control During last year, the result achieved by the City was marginally positive. The surplus for the accounting period was EUR 13.2 million. The City's finances are in balance, as the annual margin covers depreciations. During the year, significant amendments were made to the budget. The City's financial position was redefined, as a result of which a brake was put on investments towards the end of the year and borrowing was significantly reduced. At the end of the year, the City's total debt was EUR 351.5 million, whereas, based on the budget, it would have risen to EUR 399.1 million. The budget was prepared very optimistically with regard to extraordinary sales revenue. The budget was also built significantly on additional borrowing. Functional changes made during the latter part of the year and increased tax revenue helped us from a situation of uncertainty to one under control, in which the City's financial position is more stable and the amount of net liabilities at a moderate level. Changes concern the re-assessment and development of the whole budget process, which will also be started in the autumn. Investment processes too have been changed, so that the use of premises and new investments will be seen more from the perspective of the whole.
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City of Turku Annual Report 2010
Last year the City clearly accumulated more tax revenues and state subsidies than had been estimated. At the same time operating costs increased through quick reaction to the situation of structural change, by investing increasing amounts in social affairs and health, amongst other things, through the supplementary budget. Well-timed and anticipatory reaction to structural change was one of the City's key objectives last year.
Although last year's figures are positive, we cannot be completely carefree about the future. The share of corporation tax is changing next year, growth in internal financing will include plenty of extraordinary items, and the lion's share of unrealised investments will come up sooner or later. All this requires stringent housekeeping to avoid unjustifiably weakening the financial position we have now achieved.
A selection of activities in 2010 V채h채tori was given a facelift at the beginning of the year. At the same time Turku people adopted it as their own, and it became a new outdoor living room during the warm summer.
Preparations for the European Capital of Culture year actively continued throughout the year. The decision was made to build the key exhibition and events centre, Logomo, in one of the old workshops of VR (Finnish Railways). After the conclusion of the Capital of Culture year, Logomo will continue its activities as a centre of the creative economy and as a concert venue. The opening ceremony for the Capital of Culture year in January was attended by about 60.000 people on the banks of the River Aura. In March, the decision was made to dismantle the Myllysilta bridge, which had dropped in the middle, and to build a new bridge in its place. During the year, some significant investment projects were ongoing, such as the construction of the animal sanctuary, and the renovation of the Lakkatie Children's Home, the Runosm채ki and Liinahaka homes for the elderly and Impivaara Swimming Pool.
In March, Myllysilta dropped in the middle. The passer-by who noticed the collapse reported his observation to the emergency services at 6.44 am. on 6 March. The new bridge will be completed in September 2011.
During the year, electronic prescriptions were introduced. Urban environmental design was recognised in an EU accessibility competition.
City of Turku Annual Report 2010
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Early childhood education was transferred from the Municipal Health Care and Social Services Department to the Board of Education as of 1 August 2010. The EVIVA project was launched, coordinating culture, sports and youth activity. The aim of this project is to inspire 10.000 new Turku residents to spend their leisure time actively by 2016. The decision was made to open the Skanssi Joint Services Centre on a trial basis during 2011 and 2012. Models were sought for integration training for immigrants in the early stage of their stay in Finland, in co-operation with the Southwest Finland ELY Centre (Centre for Economic Development, Transport and the Environment) and the Turku Employment and Economic Development Office. During the year, the Cultural Coordinator supported cultural activity for elderly people living in care. In an international comparison, the Turku Sports Services Centre achieved the highest number of points in a study by the National Institute for Health and Welfare. The City Orchestra began online performances as a new activity. The Handicrafts Museum on Luostarim채ki Hill celebrated its 70th anniversary. Albert Edelfelt's 1878 work, 'Duke Charles insulting the corpse of Klaus Fleming' was returned to Turku Castle.
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City of Turku Annual Report 2010
In February, the construction of Logomo, the centre of the Capital of Culture year, was begun at an old VR (Finnish Railways) workshop. Picture: Moisala Sanna
In September, the Northern Coasts naval exercises being held in the Baltic Sea brought to Turku about 40 foreign warships, among them frigates, submarines, aircraft, helicopters and other equipment. It was the first time that the Northern Coasts exercises had been held outside German waters.
During the year, the City of Turku co-operated with Solar Films to produce the film 'Vares' based on the six novels of Finnish author, Reijo Mäki. The film was completed in 2011, and is aimed at international distribution.
planning continued to be hampered by difficult relations with landowners. The number of building and and procedural permits granted was 19% higher than in 2009. The liquidation of the regional waterworks corporation continued. All the shareholders of Turku's regional public utilities are involved in the process. In December, the City Council decided to sell the Municipal Waste Incineration Plant to Turku Energia.
The production 'Anna Karenina' by the Turku City Theatre was named theatre production of the year. The Turku City Library received 1.2 million visitors, and became Finland's busiest library in terms of visitor numbers. Training in communications at the Diaconia University of Applied Sciences was transferred to the Turku University of Applied Sciences as a degree in journalism. At the same, it was agreed that circus and puppet theatre training would remain at the Turku University of Applied Sciences. The ownership base of Turku Touring Oy was expanded through the sale of the City's shares to new owners. Preparations for the incorporation of the producer municipal enterprise continued throughout the year, as decided by the City Council. The decision was made to centralise the operations of Turku's Jaani Fire Staion and the present Lieto Fire Station at a new fire station to be built at Loukinanen in Lieto. Passenger numbers for public transport increased by 2% and ticket revenue targets were achieved as planned. Preparations for the regional public transport organisation proceeded with the setting of a jointly agreed level of service. The implementation of strategic city plans measured by floor square metres was carried out. The planning target for detached house plots fell 50% short of what was planned, as
A basic charge for waste water was introduced on 1 July. The aim is, though this change in structural tarriff, to increase the share of fixed tarriffs and to get the price of water treatment services closer to the actual cost level. A new logistics centre was completed at the harbour and an environmental permit was granted for Pansio harbour. The Municipal Waste Incineration Plant was granted a new environmental permit until the end of 2014. The City has appealed the decision, as a permit valid until 2017 had been applied for. The Electrical Section of Turku Municipal Engineering Corporation was transferred to Turku Energia at the start of the year. At the beginning of 2011, cleaning and caretaker services were transferred from the administrative branches to Turku Municipal Property Services. TVT Asunnot Oy and KiinteistĂś Oy Lehtolaakso merged in June 2010. The merger resulted in Turun Osakehuoneistot Oy, which deals with all so-called vacant dwellings, for which the City has initiated a sales process. The operating targets of Turun Seudun Puhdistamo Oy were well achieved, and the targeted emissions limits for the cleaning of waste water were exceeded. The artificial recharge system of Turku Region Water Ltd proceeded almost on schedule, that is to say, about six months behind what was planned. It is forecast that the company's production will commence in autumn 2011.
City of Turku Annual Report 2010
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Finances The financial statement was positive, but in many places different from the 2010 budget, whose credit side was based on significant borrowing and extraordinary sales revenues. The level of investments was also quite high in the budget. During the year, the City's financial position was strengthened significantly by such means as reducing additional borrowing and putting a brake on investments. Tax revenues and state subsidies increased by a total of EUR 56.2 million (6.5%). The increase in tax income did not, however, completely cover the increase in operating expenditure. Operating income covered 25.6% of operating costs (23.7% in 2009), Tax revenues and state subsidies were thus left to finance the remaining 74.4%. In addition to the increase in tax income and state subsidies, internal financing was also positively influenced by the sales of plots of land and building land, and by the proceeds from the sale of the Municipal Waste Incineration Plant. The City's net operating expenditure increased by EUR 24.9 million (+ 3.0%) in comparison with the previous year. Actual operating expenditure grew by 5.5% over 2009. The increase in net expenditure did not exceed 3% thanks to the greater than normal proceeds from sales. Financial income exceeded financial costs by EUR 24.4 million. The annual margin was EUR 88.6 million.
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City of Turku Annual Report 2010
Planned depreciations amounted to EUR 56.8 million. A total of EUR 15.4 million of write-downs were recorded from shares in subsidiary companies. The proceeds from the sale of the Municipal Waste Incineration Plant of EUR 4.9 million were entered as extraordinary income. The provision of EUR 2.5 million made for the costs of demolishing the waste incineration plant, and EUR 0.9 million for dismantling the Myllysilta bridge were entered as extraordinary items. Profit for the financial period was +EUR 17.8 million. The accumulated surplus was EUR 13.2 million. At year end, the long-term loans of the City amounted to EUR 265 million. Long-term liabilities increased during the early part of the year by EUR 30 million. Furthermore, during the year Turku Region Water Ltd increased its long-term loans by a total of EUR 50 million.
During the year, no great changes occurred in significant leasing or guarantee liabilities. At the end of the year, guarantee liabilities totalled EUR 233.9 million and leasing liabilities EUR 40 million. The ownership values of the City's own and donated funds increased as a result of a positive market situation. Funds yielded more than 10%. At year end, the book value of the accident fund was about EUR 48.5 million and the market value EUR 50.8 million.
Major investments The largest building investments were the construction of the Day Care Centre in Nummenpuistokatu (EUR 2.4 million), the renovation of the Runosm채ki Home for the Elderly (EUR 1.7 million) and the renovation and extension of Impivaara Swimming Pool (EUR 7.8 million). Of the new investments, EUR 10.5 million was used for municipal engineering for new city planning areas and plot production (street- and parkland), EUR 3.1 million on the drain and sewage network, and EUR 5.1 million on construction in the port area. In order to increase the amount of land available, about EUR 4.8 million worth of real estate was acquired. EUR 3.8 million was spent on upgrading main traffic routes and the city centre. The renovation of the drain and sewage network and streets, roads and public areas was carried out at a cost of EUR 14.4 million. Last year almost EUR 24.4 million was spent on renovating office facilities.
Operational and management development City management was improved by renewing the management group and developing its working practices. For the development of the city's long-term trade policy, a trade and ownership policy management group was established. The reform of the budget- and investment processes was launched. In the autumn, an internet survey directed at the City's entire work force was carried out, and produced plenty of valuable material and opinions from staff as a foundation for city development work. The results of the survey will also be utilised in preparing the 2012 budget. Co-operation with the city's surrounding regions has been intensified. As a result of that, when the preparation of the regional structural model was started, significant progress was made in the handling of new co-operative initiatives. Turku's co-operation with other cities in the capital region and on the southwest coast also strengthened significantly in 2010 Co-operation also intensified between Finland's six largest cities in urban policy questions relating to the common supervision of interests, through joint preparation for the start of a new term of local government. Preparation of the Development Corridor in co-operation with the capital region was concretised into a practical work programme. Also during 2010, the completed framework agreement concerning extensive co-operation on the southwest coast with Pori, Rauma and Uusikaupunki was approved in the autumn by the councils of each city, and entered into force at the beginning of 2011.
Personnel The work force increased in comparison with the previous year by 316.1 man-years. The total work force amounted to 13 248.7 man-years. This figure includes the number of salaried staff that became full-time workers during the year. When taking into account functions divested by the City, the labour-reducing effect of lay-offs and voluntary unpaid leave in 2009, and project personnel paid entirely from external funding, the use of labour in 2010 was 14.6 man-years less than in 2009. The new Nummenpuistokatu Day Care Centre acquired some art on the percentage principle. This curtain designed by textile artist Anna-Maija Aarras is not only a useful object but also a work of art called 'the Milky Way'. Picture: The Museum Centre of Turku/Raakkel N채rhi.
At year end, the total number of positions was 37 more than at the end of 2009. The number of positions at the end December 2010 totalled 11.427 (including permanent posts and monthly-paid staff). Human resources expenditure was EUR 576.2 million (+ 3,8 %).
City of Turku Annual Report 2010
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City Administration Jukka Mikkola (Social Democratic Party) served as Chair of the City Council. Petteri Orpo (National Coalition Party) was 1st Vice Chair and Mika Helva (Green League) 2nd Vice Chair. Aleksi Randell (National Coalition Party) was Chair of the City Board from 1 January to 30 August 2010, and the post was filled by Minna Arve (National Coalition Party) from 1 September to 31 December. 1st Vice Chair was Seppo Lehtinen (Social Democratic Party) and 2nd Vice Chair Katria Sarlund (Green League).
Work force All personnel, all types of employment Bureau/municipal enterprise
2010
2009
Change
Central Electoral Committee
0.2
4.8
-4.6
Auditing Office
4.7
4.8
-0.1
490.2
464.7
25.5
Central Administration Internal Auditing
6.6
6.9
-0.3
Turku Region Development Centre
21.0
22.5
-1.5
583.5
582.1
1.4
5 775.2
6 174.7
-399.5 596.4
Regional Rescue Services Health Care and Social Services Department
The relative strengths of the political parties in the City Council and Board at the end of 2010 were: National Coalition Party
Council
Board
20
4
Educational Sector
2 255.8
1 659.4
Cultural Affairs
563.1
558.4
4.7
Turku Vocational Institute
552.6
513.2
39.4
Turku University of Applied Sciences
847.6
781.3
66.3
Sports Services Centre
94.0
97.1
-3.1
Youth Services Centre
196.2
175.3
20.9
Environmental and City
177.4
173.6
3.8
105.4
109.2
-3.8
Social Democratic Party
15
3
Left Alliance
10
2
Green League
11
2
Swedish People's Party
4
1
Municipal enterprises
Centre Party
3
1
Turku Municipal Waterworks
Christian Democrats
2
0
Corporation
Freedom Party
1
0
Port of Turku
112.5
121.1
-8.6
0
Turku Municipal Property Corporation
145.5
140.7
4.8
Turku Corporate Real
32.8
32.8
0
True Finns
1
Planning Department
Estate Management
The Mayor of Turku, Mikko Pukkinen, resigned in the summer to become Director General of the Confederation of Finnish Industries EK. On 30 August, the City Council elected Aleksi Randell as mayor for the period 1 September 2010 - 31 December 2012.
Change in population The population of Turku increased more rapidly than in previous years, although the rate of increase remained slow in comparison to other cities. During the year, the city's population increased by 1.239 people. The number of foreignborn residents continued to grow rapidly. During the year, the number of residents in the Turku region increased by 2.187 people.
Turku Waste Incineration Plant
29.9
30.0
-0.1
Turku Municipal Engineering Corporation
200.3
210.9
-10.6
Turku Municipal Green Area Corporation
122.3
120.4
1.9
Turku Municipal Housing Corporation
180.9
188.1
-7.2
Turku Municipal Property Services Turku in total
751.0
760.6
-9.6
13 248.7
12 932.6
316.1
Early childhood education was transferred to the educational sector from health care and social services on 1 August.
Use of work force Environmental 18 %
Administration 4%
Skills and business 28 %
Service sector = culture, sport, youth and health care and social services
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City of Turku Annual Report 2010
Service sector 50 %
Realised tax income 2006–2010
Operating expenditure by type 2010 Subsidies 6.3 % Purchases of material 5.8 %
Rental expenditure 3.5 %
Other operating expenditure 0.8 %
Municipal income tax
Corporation tax
Property tax
Total
700 600 500 Human resources expenditure 48.5 %
400 300 200
Purchases of services 35.1%
100 EUR mill.
0
2006 6.4
Change %
2007 7.9
2008 6.0
2009 0.2
2010 6.3
Operating income by type 2010
State subsidies
Other operating income 10.3 %
Rental income 11 %
Sales income 46.5 %
350
14
300
12
250
10
200
8
150
6
100
4
50
2
%
Financial support and subsidies 12.6 %
EUR mill.
Income from charges 19.6 %
0
2006
2007
2008
2009
2010
State subsidies, total
228.2
241.5
270.6
293.2
313.0
Change %
10.1
5.8
12.1
8.3
6.7
0
Operational economy net expenditure 2010
(not including municipal enterprises)
Culture and leisure 5.6 %
Other 5.8 %
City Board 5.9 %
Vocational colleges and University of Applied Sciences 10.1 %
Education 21.1 %
Health care and social services 51.5 %
City of Turku Annual Report 2010
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Financial statement 2010 KEY INDICATORS OF THE INCOME STATEMENT EUR 1.000 Operating income Production for own use Operating expenses*. of which Human resources expenses (personnel, all kinds of employment)
City of Turku
Turku City Group
2010
2009
2010
2009
296 381
258 938
769 625
657 556
32 095
32 553
85 748
112 946
1 155 993
1 093 604
1 537 435
1 392 891
576 233
555 344
726 841
692 242
13 249
12 935
Purchase of services
417 111
386 309
406 596
351 285
Tax revenues
610 859
574 488
609 255
573 003
State subsidies
293 174
312 971
293 174
312 971
Financial income and expenses
24 420
39 805
-11 901
-7 470
Annual margin
88 636
72 800
142 514
123 372
Planned depreciations
56 848
55 977
111 278
96 852
Planned depreciations and write-downs
72 268
55 977
111 491
96 904
Extraordinary income/expenses
1 398
778
1 353
778
Profit for the financial period
17 767
17 600
32 376
27 247
Deficit/surplus for the financial period
13 194
7 218
23 749
7 056
* production for own use eliminated
KEY INDICATORS OF THE BALANCE SHEET EUR 1.000
City of Turku
Turku City Group
2010
2009
2010
2009
1 009 317
1 017 989
2 101 774
2 042 575
6 811
3 326
14 882
10 330
751 597
739 971
2 007 608
1 947 756
250 909
274 691
79 284
84 489
94 871
97 099
26 784
23 633
317 493
235 596
385 784
295 752
ASSETS Fixed assets Intangible assets Tangible assets Investments Funds from assignments Current assets Stocks
3 318
3 936
9 811
7 020
Receivables
106 694
77 465
138 751
118 616
Securities
167 011
133 613
169 851
135 192
40 470
20 583
67 372
34 925
1 421 682
1 350 685
2 514 343
2 361 960
720 534
705 697
813 862
773 127
601 956
601 956
601 956
601 956
Other funds
24 897
23 254
112 603
98 097
Surplus from previous financial period
80 486
73 269
75 553
65 981
Deficit/surplus for the financial period
13 194
7 218
23 749
7 093
Depreciation reserve and voluntary provisions
46 036
43 106
138 362
129 145
Mandatory provisions
19 721
18 170
20 527
21 798
Capital from assignments
96 517
98 138
28 734
24 949
538 874
485 574
1 461 209
1 360 563
177 976
227 820
940 276
965 191
164 963
214 963
897 507
924 072
13 013
12 858
42 769
41 119
360 898
257 754
520 933
395 372 177 494
Cash in hand and at bank ASSETS TOTAL LIABILITIES Capital and reserves Basic capital
Minority shares
Liabilities Long-term Interest-bearing Interest-free Short-term Interest-bearing
186 586
114 150
261 086
Interest-free
174 312
143 604
259 847
217 878
1 421 682
1 350 685
2 514 343
2 361 960
LIABILITIES TOTAL
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City of Turku Annual Report 2010
INCOME STATEMENT KEY FIGURES
City of Turku
Turku City Group
EUR 1.000
2010
2009
2010
2009
Cash flow of operations
66 685
64 877
122 396
112 703
Cash flow of investments Investment expenses
-77 789
-73 749
-190 771
-232 155
Net investments
-47 089
-62 595
-155 682
-184 052
19 596
2 282
-33 286
-71 349
Cash flow of operations and investments Cash flow from financing Changes in lending Changes in loan portfolio Other changes in liquidity
8 394
8 908
3 157
-833
22 436
-6 908
57 027
49 017
2 859
-11 446
25 454
6 561
Cash flow from financing
33 690
-9 447
100 392
63 053
Changes in cash reserve
53 286
-7 165
67 106
-8 296
KEY INDICATORS OF FINANCIAL DEVELOPMENT
Number of inhabitants 31.12 Personnel, all types of employment
City of Turku
Turku City Group
2010
2009
2010
2009
177 326
176 087
177 326
176 087
13 249
12 935
Operating income/expenses, %
25.6
23.7
50.1
43.7
Annual margin/depreciation, %
122.7
130.1
127.8
127.3
Annual margin EUR/inhabitant
499.9
413.5
804
701
Tax rate
18.75
18.0
18.75
18.0
71 864
80 265
2 658
3 518
405.3
455.8
15
20
53.9
55.4
40.0
43.7
Lending receivables, 31.12, EUR 1.000 Lending receivables, EUR/inhabitant Equity ratio, % Loan portfolio (interest-bearing liabilities) 31.12, mill.
351.5
329.1
1 159
1 102
Loans, EUR/inhabitant
1 983
1 869
6 534
6 256 83 624
39 994
45 203
77 821
Income financing of capital expenditure, %
Leasing liabilities EUR 1.000
100.2
59.8
49.9
31.9
Income financing of investments, %
115.3
101.6
76.9
53.6
City of Turku Annual Report 2010
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City of Turku Yliopistonkatu 27 a, 20100 Turku Tel. +358 (0)2 330 000 turun.kaupunki@turku.fi www.turku.fi