city of turku annual report 2010
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From uncertainty to a situation under control - A selection of activities in 2010TRANSCRIPT
1City of Turku Annual Report 2010
City of Turku Annual Report 2010
2 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 anticipa-tory reaction to structural change was one of the City's key objectives last year.
Although last year's figures are positive, we cannot be comp-letely 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 unrea-lised investments will come up sooner or later.
All this requires stringent housekeeping to avoid unjustifiably weakening the financial position we have now achieved.
Mayor | Aleksi Randell
During last year, the result achieved by the City was mar-ginally 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 re-sult 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 mil-lion, 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 sig-nificantly 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 cont-rol, 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.
From uncertainty to a situation under control
2 City of Turku Annual Report 2010
Pictures: the City of Turku, unless otherwise stated.
Cover picture: Esko Keski-Oja
3City of Turku Annual Report 2010
A selection of activities in 2010Preparations for the European Capital of Culture year acti-vely continued throughout the year. The decision was ma-de 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 Myllysil-ta 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 Runosmäki and Liinahaka homes for the elderly and Impi-vaara Swimming Pool.
During the year, electronic prescriptions were introduced.
Urban environmental design was recognised in an EU ac-cessibility competition.
Vähätori was given a facelift at the beginning of the year. At the same time Turku people adopted it as their own, and it beca-me a new outdoor living room during the warm summer.
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 comp-leted in September 2011.
3City of Turku Annual Report 2010
4 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.
Early childhood education was transferred from the Munici-pal Health Care and Social Services Department to the Bo-ard 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 De-velopment, 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 ac-tivity.
The Handicrafts Museum on Luostarimäki Hill celebrated its 70th anniversary.
Albert Edelfelt's 1878 work, 'Duke Charles insulting the corp-se of Klaus Fleming' was returned to Turku Castle.
4 City of Turku Annual Report 2010
5City of Turku Annual Report 2010
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.
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 beca-me 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. Prepa-rations for the regional public transport organisation procee-ded 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 de-tached house plots fell 50% short of what was planned, as
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 conti-nued. 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.
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 treat-ment 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 ap-pealed the decision, as a permit valid until 2017 had been applied for.
The Electrical Section of Turku Municipal Engineering Cor-poration 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 Kiinteistö 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 clea-ning of waste water were exceeded.
The artificial recharge system of Turku Region Water Ltd pro-ceeded 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.
6 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 sha-res in subsidiary companies.
The proceeds from the sale of the Municipal Waste Incine-ration Plant of EUR 4.9 million were entered as extraordi-nary 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.
The financial statement was positive, but in many places dif-ferent 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 signi-ficantly 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, howe-ver, 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 mil-lion.
The annual margin was EUR 88.6 million.
Finances
6 City of Turku Annual Report 2010
7City of Turku Annual Report 2010
During the year, no great changes occurred in significant lea-sing 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 investmentsThe largest building investments were the construction of the Day Care Centre in Nummenpuistokatu (EUR 2.4 million), the renovation of the Runosmäki Home for the Elderly (EUR 1.7 million) and the renovation and extension of Impivaara Swim-ming Pool (EUR 7.8 million).
Of the new investments, EUR 10.5 million was used for mu-nicipal engineering for new city planning areas and plot pro-duction (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 availab-le, 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 stree-ts, 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 developmentCity management was improved by renewing the manage-ment 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 plen-ty of valuable material and opinions from staff as a foundati-on 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 re-gional 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 su-pervision of interests, through joint preparation for the start of a new term of local government. Preparation of the Deve-lopment Corridor in co-operation with the capital region was concretised into a practical work programme. Also during 2010, the completed framework agreement concerning ex-tensive co-operation on the southwest coast with Pori, Rau-ma and Uusikaupunki was approved in the autumn by the councils of each city, and entered into force at the beginning of 2011.
PersonnelThe 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 sala-ried 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.
At year end, the total number of positions was 37 more than at the end of 2009. The number of positions at the end De-cember 2010 totalled 11.427 (including permanent posts and monthly-paid staff). Human resources expenditure was EUR 576.2 million (+ 3,8 %).
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 Närhi.
8 City of Turku Annual Report 2010City of Turku Annual Report 2010
Bureau/municipal enterprise 2010 2009 Change
Central Electoral Committee 0.2 4.8 -4.6
Auditing Office 4.7 4.8 -0.1
Central Administration 490.2 464.7 25.5
Internal Auditing 6.6 6.9 -0.3
Turku Region Development Centre 21.0 22.5 -1.5
Regional Rescue Services 583.5 582.1 1.4
Health Care and Social
Services Department
5 775.2 6 174.7 -399.5
Educational Sector 2 255.8 1 659.4 596.4
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
Planning Department
177.4 173.6 3.8
Municipal enterprises
Turku Municipal Waterworks
Corporation
105.4 109.2 -3.8
Port of Turku 112.5 121.1 -8.6
Turku Municipal Property Corporation 145.5 140.7 4.8
Turku Corporate Real
Estate Management
32.8 32.8 0
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 751.0 760.6 -9.6
Turku in total 13 248.7 12 932.6 316.1
Work forceAll personnel, all types of employment
City AdministrationJukka 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 Sep-tember to 31 December. 1st Vice Chair was Seppo Lehtinen (Social Democratic Party) and 2nd Vice Chair Katria Sarlund (Green League).
The relative strengths of the political parties in the City Council and Board at the end of 2010 were:
Council Board
National Coalition Party 20 4
Social Democratic Party 15 3
Left Alliance 10 2
Green League 11 2
Swedish People's Party 4 1
Centre Party 3 1
Christian Democrats 2 0
Freedom Party 1 0
True Finns 1 0
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 populationThe population of Turku increased more rapidly than in pre-vious years, although the rate of increase remained slow in comparison to other cities. During the year, the city's po-pulation increased by 1.239 people. The number of foreign-born residents continued to grow rapidly. During the year, the number of residents in the Turku region increased by 2.187 people.
Use of work force
Service sector = culture, sport, youth and health care and social services
Early childhood education was transferred to the educational sector from health care and social services on 1 August.
Administration4 %Environmental
18 %
Service sector 50 %
Skills and business28 %
9City of Turku Annual Report 2010City of Turku Annual Report 2010
Realised tax income 2006–2010
0
100
200
300
400
500
600
700
2006 2007 2008 2009 2010
State subsidies
0
50
100
150
200
250
300
350
0
2
4
6
8
10
12
14
%
2006 2007 2008 2009 2010
9
6.4 7.9 6.0 0.2 6.3
228.2 241.5 270.6 293.2 313.0
10.1 5.8 12.1 8.3 6.7
Operating expenditure by type 2010
Purchases of material
5.8 %
Subsidies6.3 %
Rental expenditure
3.5 %
Other operating expenditure
0.8 %
Human resources expenditure
48.5 %
Purchases of services 35.1%
Operating income by type 2010
Other operating income
10.3 %
Rental income 11 %
Financial support and
subsidies 12.6 %
Income from charges 19.6 %
Sales income 46.5 %
Operational economy net expenditure 2010
(not including municipal enterprises)
Vocational colleges
and University of Applied Sciences
10.1 %
Culture and leisure 5.6 %
Other 5.8 %
City Board 5.9 %
Health care and social services
51.5 %
Education 21.1 %
Municipal income tax Corporation tax Property tax Total
EUR mill.
Change %
State subsidies, total
Change %
EUR mill.
10 City of Turku Annual Report 2010
City of Turku Turku City Group
EUR 1.000 2010 2009 2010 2009ASSETS
Fixed assets 1 009 317 1 017 989 2 101 774 2 042 575
Intangible assets 6 811 3 326 14 882 10 330
Tangible assets 751 597 739 971 2 007 608 1 947 756
Investments 250 909 274 691 79 284 84 489
Funds from assignments 94 871 97 099 26 784 23 633
Current assets 317 493 235 596 385 784 295 752
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
Cash in hand and at bank 40 470 20 583 67 372 34 925
ASSETS TOTAL 1 421 682 1 350 685 2 514 343 2 361 960
LIABILITIES
Capital and reserves 720 534 705 697 813 862 773 127
Basic capital 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
Minority shares
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
Liabilities 538 874 485 574 1 461 209 1 360 563
Long-term 177 976 227 820 940 276 965 191
Interest-bearing 164 963 214 963 897 507 924 072
Interest-free 13 013 12 858 42 769 41 119
Short-term 360 898 257 754 520 933 395 372
Interest-bearing 186 586 114 150 261 086 177 494
Interest-free 174 312 143 604 259 847 217 878
LIABILITIES TOTAL 1 421 682 1 350 685 2 514 343 2 361 960
KEY INDICATORS OF THE BALANCE SHEET
Financial statement 2010City of Turku Turku City Group
EUR 1.000 2010 2009 2010 2009Operating income 296 381 258 938 769 625 657 556
Production for own use 32 095 32 553 85 748 112 946
Operating expenses*. of which 1 155 993 1 093 604 1 537 435 1 392 891
Human resources expenses 576 233 555 344 726 841 692 242
(personnel, all kinds of employment) 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 312 971 293 174 312 971 293 174
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 INCOME STATEMENT
City of Turku Annual Report 2010
11City of Turku Annual Report 2010
KEY INDICATORS OFFINANCIAL DEVELOPMENT
INCOME STATEMENTKEY FIGURES City of Turku Turku City Group
EUR 1.000 2010 2009 2010 2009Cash 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
Cash flow of operations and investments 19 596 2 282 -33 286 -71 349
Cash flow from financing
Changes in lending 8 394 8 908 3 157 -833
Changes in loan portfolio 22 436 -6 908 57 027 49 017
Other changes in liquidity 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
City of Turku Turku City Group
2010 2009 2010 2009Number of inhabitants 31.12 177 326 176 087 177 326 176 087
Personnel, all types of employment 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
Lending receivables, 31.12, EUR 1.000 71 864 80 265 2 658 3 518
Lending receivables, EUR/inhabitant 405.3 455.8 15 20
Equity ratio, % 53.9 55.4 40.0 43.7
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
Leasing liabilities EUR 1.000 39 994 45 203 77 821 83 624
Income financing of capital expenditure, % 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 11
