The City of Kankaanpää's 2019 result fell to minus 3,6 million euros (2018 -3,21 million euros). - 2019 was a very bad year in financial terms, says the Mayor Mika Hatanpää. – The ongoing economic adjustment programme must be implemented and continued with determination, taking into account demographic changes.
Lower than expected tax revenue led to poor results
The most significant factor in the deterioration of the city's results was the collapse of tax revenue. When the budget was discussed in December 2018, tax revenue was estimated to be 41,9 million euros, but the final result was 39,5 million euros. The difference between the estimate and the actual was 2,4 million euros.
The national tax forecasting framework, on the basis of which Kankaanpää's tax revenue collection was also estimated, was seriously flawed. The reliability of the framework was affected by two major tax-related reforms: the introduction of the incomes register and the tax card reform.
During the financial year, the council amended the budget in four meetings. Among other things, the allocation for the basic security services result area was increased by EUR 1,28 million. The changes weakened the budget result by EUR 2,8 million, increased investment expenditure by EUR 459 and borrowing by EUR 000 million.
The city's loan volume increased by 2019 million euros in 9,4 (2018 million euros in 2,0). The total loan volume is 53 million euros (43,7 million euros), which means 4.704 euros/inhabitant (3.814 euros/inhabitant). The reason for the increase in debt is the strong pace of investment.
The city group's result was -3,6 million euros (-2,6 million euros) and the deficit for the financial period was 4,3 million euros (3,4 million euros). The group has a surplus of 5,4 million euros accumulated from previous financial periods. The group's loan portfolio is 6.609 euros/resident.
The city's personnel expenses decreased by 2,7%. In the coming years, retirements will have a significant impact on the city's organizational structure. For each job description, an assessment will be made to determine whether the tasks can be handled through internal arrangements. The city's personnel number at the end of 2019 was 492 (496).
Investments and development will continue
The city is still undergoing strong renewal, investing heavily in the future, and upgrading service structures to ensure its vitality and attractiveness.
The city's investments totaled 7,2 million euros (2018 million euros in 6,4). The largest investment continued to be the renovation project of the sports center, of which the swimming pool section was completed. The opening of the swimming pool was celebrated in November.
– However, the development of the city must continue despite the tough times, emphasizes the mayor. – A vitality program was completed to support the implementation of the strategy, the preparation of which involved several different parties and representatives of stakeholder groups.
In 2019, the city was involved in several different projects to promote the attractiveness of the region. These included the Lauhanvuori Region Geopark project, the Competitiveness in Wood Construction through Collaboration project, and the SAMK-led projects Kortteeri, Ecomuseum and Työpeili.
In addition, the Visit Kankaanpää working group was launched to support tourism development in anticipation of receiving Geopark status.
Population continues to decline, but business activity remains brisk
The city's population has been declining for several years. The change in population was -1,48%, meaning the population decreased by 170. – We must direct resources in accordance with the strategy and invest in the city's awareness and conduct image and resident marketing, says Hatanpää. – In addition, the city must adapt its service structure to negative population changes. Service needs are changing rapidly, due to changes in the population and age structure.
The employment situation has weakened slightly. At the same time, however, companies increasingly faced difficulties in finding skilled workers. The unemployment rate was 11,6% at the end of the year (2018% in 11,2) and there were 592 unemployed job seekers (575). There were 53 (39) job vacancies at the turn of the year.
During 2019, business services had a total of 530 (2018 in 319) customer events with a total of 202 (125) customers. Approximately 60 new companies are established in Kankaanpää annually.
The future will be shaped by the merger of municipalities and the effects of exceptional circumstances
The municipal merger investigation with the municipality of Honkajoki was initially launched in the autumn of 2019 on a voluntary basis, but in February 2020 the Ministry of Finance appointed a special municipal division investigator, under whose leadership the merger is currently being prepared. The united city of Kankaanpää would begin operations on 1.1.2021 January XNUMX.
The ongoing state of emergency due to the coronavirus situation will also affect the local economy in the near future. – The Government must prepare a massive support package for municipalities, otherwise no municipality will withstand this blow, emphasizes Mayor Hatanpää. – Municipalities are responsible for healthcare expenses, which will certainly increase due to the epidemic. In addition, companies in the area have already had to close their doors, which will also reduce tax revenues. This requires the state to make determined support decisions to strengthen the local economy.
The financial statements will be discussed at the City Board meeting on Monday, April 6.4.2020, XNUMX. A link to the financial statements and the full agenda for the meeting can be found on the city's website: https://www.kankaanpaa.fi/kaupunki-ja-hallinto/paatoksenteko/esityslistat-poytakirjat-ja-viranhaltijapaatokset/ or from the home page via the “decision-making” tab.
Additional information:
Mika Hatanpää, Mayor, City of Kankaanpää
044 577 2210, [email protected]