The Kankaanpää City Council reviewed the 2019 budget during its budget hearing held on November 19-20.11 and approved it without a vote based on the proposal submitted by the Mayor.
– The surplus achieved through careful financial management will support the city through the current difficult year, but improving the efficiency of finances and operations is still a necessity, says the chairman of the city board. Heidi Viljanen.
The City Council will discuss the budget at its meeting on December 17.12.
A challenging year as a starting point
The year 2018 has been challenging for the finances of the City of Kankaanpää. The latest calculation estimates that the current year's financial statements will be negative by €2,7 million. The budget was originally prepared as positive, but the increased spending during the year in social and health services, specialized medical care, early childhood education and care, and municipal technology requires a budget review. Tax revenue growth is likely to be lower than predicted and government transfers will not increase. This leads to a situation where a negative result threatens to consume the surplus on the balance sheet that serves as a buffer for the economy.
The 2019 budget of the City of Kankaanpää has been prepared based on the framework provided by the City Board. This calculation, which guides financial planning, is based on preliminary information on the city's income, i.e. taxes and government transfers. Based on this total figure, the new budget was prepared in various committees. In terms of operating expenses, the operating margin was €65. The framework set a goal of a breakeven result, which the committees' proposals exceeded by €759. The City Board decided in its meeting on 000 November that the tax rate would remain at the same level, i.e. 847, so reaching a result required checks on the proposals submitted.
Sustainable economic program for drafting
In accordance with the municipality's financial planning process, in the next stage, the mayor made his own budget proposal, which resulted in a deficit of €21 overall. In the mayor's proposal, amendments were made to the appropriations mainly so that the amounts did not include so-called level increases, but the appropriations remained at the current year's level.
– The goal is not to compromise on the level of service, but to achieve savings by developing operations, says the mayor. Mika Hatanpää.
In addition to refraining from level increases, savings will be collected, for example, by developing the structure of early childhood education. The aim is to improve the matching of early childhood education places. In addition, €700 was cut from the appropriation submitted by PoSa (Northern Satakunta Basic Services Municipal Association), which provides social and health services and specialized medical care services. The City Board already stated in its statement on the PoSa draft budget on 000 October that the PoSa appropriation should be within the planning framework of the city's budget, where it is estimated to be €29.10.
The City Board proposed minor changes to the investment plans, such as additional funding for the renovation of the baseball field's grandstand. It will also propose to the council that a sustainable financial program be drawn up for the city, the preparation of which will begin in January.
– The program should be ready before the council's June meeting so that it can be taken into account when preparing the 2020 budget, says Heidi Viljanen.
Continuity of investments and development is important
The total investment in the city budget is €7,3 million. The most important projects are the large-scale renovation and development project of the sports center and the renovation project of the basic service center Tapala.
– These projects are very important welfare projects for the city, the mayor reminds us. Next year, the swimming pool section of the sports center will be completed, after which there will be a gap year in the project and the renovation will continue again in 2021 for the ball sports hall.
To finance investment projects, additional loans are needed, which will be taken out in 2019 as planned in the amount of €3,7 million. Over the entire planning period 2018–2020, the amount of loans will increase by €17,1 million. In the 2017 financial statements, the loan amount was €3/resident. At the end of the financial planning period, the loan amount is expected to be approximately €601/resident.
– The growth in the amount of loans is a major challenge for the economy in the future. We must take care of our solvency and also prepare for rising interest rates, emphasizes Hatanpää.
The development of the city remains an important goal despite the tough times. The city is involved in various projects that look to the future and consider solutions to major challenges. Kankaanpää is involved in the skilled workforce project of the regional city network, the development of stretchable technology continues with Tampere University of Technology, and tourism is being developed by participating in the Lauhanvuori-Hämeenkangas Geopark project.
Additional information:
Mika Hatanpää, Mayor, City of Kankaanpää
044 577 2210, [email protected]
The year 2019 budget.