Photo: The city center in August of the 2021 financial year, Martti Tikka / Kuvaseura Pikseli
Like the previous year, the year 2021 was very good for the city of Kankaanpää in a financial sense, as the result for 2021 was a surplus of 4,36 million euros (in 2020 +3,05 million euros).
"The surplus financial statements were affected by corona subsidies, which amounted to approximately 2,3 million euros, and the municipal merger grant received through the merger of Kankaanpää and Honkajoki, which amounted to 1,4 million euros. In terms of operating economy, the profit areas remained well within budget. Net expenses of the operating economy fell below 2,7 million euros, so corona subsidies and the municipal merger grant alone do not explain the good result. The profit areas did a good job both financially and operationally, ensuring high-quality services. Thanks to the personnel and decision-makers," says the mayor. Mika Hatanpää.
The financial year's result was improved by the effects of one-off items
The city's financial result for the financial year was EUR 0,3 million better than in the original budget, although the EUR 1,7 million revenue from the sale of the street lighting network was carried over to 2022.
The city met the signs of a strengthening economy for the second year in a row. In the 2020 financial statements, the accumulated deficits for Kankaanpää and Honkajoki totaled 2,09 million euros. Thanks to the good results in 2021, the deficits were covered. The accumulated surplus in the balance sheet is 2,26 million euros.
In terms of operating expenses, the profit areas remained well within the budget. The basic services budget was exceeded by 205.000 euros, while other profit areas remained within the budget. Overall, the net operating expenses fell short by 2,7 million euros. Operating expenses increased by 1,1% and operating margin increased by 1,5%.
The financial year's result was significantly affected by non-recurring items. The temporary increase in the share of corporate income tax revenue for municipalities increased tax revenue by approximately one million euros. The total impact of the state's Covid grants in 2021 on the result was +2,3 million euros. In the financial year 2021, the municipal association grant was paid in the amount of 1,4 million euros. In the financial year, non-recurring write-downs of buildings were made in the amount of approximately 0,8 million euros. In 2022–23, a total of another 2,1 million euros will be paid in the amount of the municipal association grant.
The city's personnel expenses of EUR 25,9 million were almost at the same level as those of Honkajoki and Kankaanpää combined in 2020 (EUR 26,1 million). The number of personnel at the end of the year was 576, compared to a total of 594 a year earlier.
"The need to adjust the economy has not disappeared despite the good financial statements of the last two years. The city still needs to maintain its finances at a sustainable level," the mayor reminds.
Significant investments continued
The city is still developing strongly and investing heavily in the future. The combined net investments of Kankaanpää and Honkajoki over the past five years have been 36,6 million euros. The investment level will also be high in the coming years, as the net investments in the 2022 budget are 9,6 million euros.
The city's net investments in 2021 totaled EUR 7,5 million. A year earlier, Kankaanpää's net investments were EUR 5,6 million and Honkajoki's EUR 2,3 million.
Due to the excellent result of the financial year, there was no need to increase the loan amount to finance investments. The loan amount decreased by 2,2 million euros from the combined balance sheet of Kankaanpää and Honkajoki. At the end of 2021, the loan stock was 58,3 million euros and 4 euros per inhabitant.
Significant investments for 2021 include the start of the renovation of the Sports Centre's ball hall, the renovation of the emergency clinic at the Tapala Basic Service Centre, and the completion of the Honkajoki comprehensive school. In addition, investments were made in, among other things, the renovation of traffic routes and water supply.
Employment situation and tax revenue developed positively, population decreased
Employment in Kankaanpää developed positively during 2021. The share of unemployed job seekers in the workforce has decreased from 11,8% in January to 7,6% by the end of September. At the end of the year, the unemployment rate was 9,6% (2020% in 13,7). A positive aspect for the region's business community during 2021 can be considered the good demand situation and order backlog of industrial companies. This was already visible towards the end of the year as a weakening of the availability of skilled labor.
The improved economic situation of companies was reflected in the development of employment as well as in tax revenue. Like the whole country, the yield from corporate tax has been significantly higher than before, which is partly due to the temporary increase in the municipalities' share of the distribution. Corporate taxes were collected by 1,7 million euros more than the previous year in Kankaanpää and Honkajoki in 2020. Municipal taxes were collected by 1,5 million euros more than the previous year.
Despite the good employment situation and strong job self-sufficiency, the city's population has been declining. The population decreased by 99 people during the year compared to the 2020 population of Kankaanpää and Honkajoki. At the turn of the year, the population was 12.
"We must continue to direct resources in accordance with the strategy to increasing the city's awareness, but in addition to this, the assessment of service needs must be continuous. Job self-sufficiency and positive employment development create opportunities to increase the city's retention and attractiveness," says Hatanpää.
The future challenges are major changes and the global situation
"Kankaanpää's financial position has improved significantly due to the good results of the last two years. Maintaining economic balance will continue to be a priority in the coming years, and the goal in managing the economy must be a sustainable economy."
The welfare areas will start operating in early 2022, which will significantly affect the services provided by municipalities and their financing. In addition, the prolonged pandemic, the rapid acceleration of inflation, and the effects of the war in Ukraine create challenges in predicting the future.
The 2021 financial statements of the City of Kankaanpää were discussed at the City Board meeting on Monday, April 4.4.2022, 5.4. The City Board decided to submit the financial statements to the City Council for consideration after auditing and authorized the Mayor and CFO to make technical corrections to the financial statements before the City Council's consideration. Below is a link to the financial statements, which take into account the technical corrections and clarifications detected by April XNUMX.
Financial statements 2021 (PDF)
Additional information:
Mika Hatanpää, Mayor, City of Kankaanpää
044 577 2210, [email protected]