The city responded to the creation of prerequisites for growth by zoning large entire areas in the immediate vicinity of the centre. In 2017 and 2018 as much floor space for residential apartment blocks has been zoned as in the previous eight years altogether. Construction has also continued intensely.
The aim is to make the positive economic development of the region a permanent state.
– Turku has made significant investments to improve growth and attractiveness, and considerable development and investment projects are currently underway and in the decision-making process. The city is very committed to act to implement a competitive operating environment for businesses and to offer quality and versatile services to the present and future citizens of Turku. Our goal is to make the positive economic development of the region a permanent state, says Mayor of Turku Minna Arve.
The operating environment has developed into a positive direction but the effects on the economy of the city have been slighter than desired. The development of tax funding last year mostly explains the weak economy. The increased demand for services and different cuts in central government transfers will further weaken the economy of municipalities in the current year.
Operational and economic targets were mainly achieved
The financial statements of the city of Turku for 2018 showed a deficit of EUR 47.8 million. It is a little below EUR 50.4 million approved by the City Council. The city has aimed to answer the grown number of customers and demand for services, which is seen as an increase in the operating expenditure. Additionally, labour force has been increased in the Welfare and Education Divisions.
The increase in the operating expenditure has also been influenced by the municipal sector pay settlement which, together with the growth in the labour force, increases the personnel costs of the city by about EUR 10 million. The share of the municipal sector pay settlement in the growth of the personnel costs is about EUR 7 million.
The strategic and operational goals of the city were mainly achieved in the divisions. The economic targets set by the City Council were fulfilled well except the Social and Welfare Committee. Its net costs exceeded the changed budget by EUR 11.6 million. The operating expenditure was exceeded by EUR 16.7 million as well as the operating revenue which exceeded the changed budget by EUR 5.1 million. In addition, the net costs of the Turku Region Public Transport Committee were exceeded by EUR 0.6 million.
Exceptionally big tax refunds decreased the annual contribution margin
The tax base of the municipal tax developed favourably but the exceptionally big tax refunds for the tax year 2017 decreased the revenue in 2018. The growth of the share accounted to the city was insignificant and the annual contribution margin remained exceptionally low. The growth of tax revenue remained EUR 5.5 million. The development of the economy of the city was similar to the general development of municipal economy.
The annual contribution margin amounted to EUR 6.2 million. It did not cover depreciations and unrealized losses which were EUR 56 million. The comparable annual contribution margin of 2017 is EUR 53.6 million and the change is EUR -47.3 million.
A new long-term loan of EUR 120 million was raised and the loan portfolio increased by EUR 63.8 million. The purchases of services increased around EUR 40 million (+ 4 %) compared with the previous year.
The investments proceeded as planned
The investment expenditure of the city totalled EUR 81.2 million in 2018. The largest implemented infrastructure projects in 2018 were the Logomo pedestrian bridge, the market square and the funicular. The renovation of the market square started with archaeological excavation, the public transport moved to temporary routes due to the renovation and construction work and the bus stop locations in the centre were rearranged.
The biggest regional construction investments in the public areas of the city were in the areas of Blue Industry Park, Pääskyvuorenrinne, Herttuankulma and Linnafält. About 30 % of the investment expenditure of the infrastructure services was aimed at projects that reduce the renovation debt of the public areas, such as repair of street structures, surfaces, lighting, routes of bicycle and pedestrian traffic, playgrounds as well as strengthening of the riverside walls of Aurajoki. The largest renovation sites were school properties.
More personnel resources for health and education
On 31 December 2018, the City of Turku employed a total of 11,521 people, comprising 9,943 full-time and 1,578 part-time employees.
Measured in person-years, the amount of labour used was 10,418.5 in 2018.
Taking account of organisational changes, the labour of the entire personnel rose 1.9 %.
The number of personnel mainly increased in the Welfare and Education Divisions.
The loan portfolio of the Turku Group slightly increased
The result of the accounting period of the Group showed a deficit of EUR 22.9 million. The operating margin of the Group was EUR -930.5 million.
The loan portfolio of the Turku Group at the end of the accounting period was EUR 1,496.7 million (EUR 1,383.9 million in 2017). The loans of the Turku Group were EUR 7,809 per capita.
Turun kaupungin tilinpäätöksen 2018 esittely (pdf, in Finnish)