The City of Turku controls 58 subsidiaries, of which 49 are consolidated in the consolidated financial statements. Of the consolidated subsidiaries, three are foundations and 20 are housing and real estate companies. There are 25 consolidated associated entities and three joint municipal authorities. Four subsidiaries and five associated entities have been consolidated through the sub-group of the Joint Municipal Authority of the Hospital District of Southwest Finland.
At the end of the financial year, the balance sheet total was EUR 1,792.7 million. The decrease compared to the previous year was EUR 13.6 million (-0.8%). The surplus for the financial period increased equity by EUR 10.2 million (1.3%).
The City’s liquidity remained good throughout the year. At the end of 2020, the City’s cash reserves amounted to EUR 139 million (EUR 204 million in 2019), not including investments in the City’s own funds. Cash reserves decreased by EUR 65 million in 2020. As regards the cash reserves, long-term interest investments were discontinued almost entirely in 2020 since the decreased interest level pushed the values of interest investments too high, resulting in a poor risk-reward ratio.
The largest ongoing infrastructure projects were the Logomo bridge and the Market Square. Other extensive construction projects in the urban environment included the extension to Pyhän Maarian tie, Koroistenkaari and Puolalanmäki. Among the ongoing renovation projects of the City’s service buildings, the largest ones were the modifications of Ruiskatu 8, the renovation of Puolala School and the renovation of the Kallelankatu day care centre.
The operating cash flow was positive by EUR 48.1 million (-6.5 in the financial statements for 2019). The increase in internal financing is largely the result of the central government’s measures to support municipal tax funding, which boosted the annual margin significantly from the previous year. EUR 53.1 million was received as central government transfers and EUR 22.3 million was received for corporate tax revenue. Of the central government transfer, EUR 47.7 went to basic services and EUR 1.5 million to the Education and Culture Division.
Revenue from central government transfers amounted to a total of EUR 336.5 million, being EUR 74.7 million, i.e. 28.6% more than the previous year. The central government granted a sizeable support package for municipalities to cover the effects of the coronavirus pandemic.
Determination of Turku’s tax revenue
Income tax rate (%)
Property tax rate (%):
The unexpected coronavirus pandemic significantly restricted the predictability and development of national and municipal economies. However, a surplus of EUR 10.2 million for the financial period was achieved primarily thanks to a EUR 75.4 million central government injection to support the tax funding of municipalities. EUR 53.1 million was received as central government transfers and EUR 22.3 million was received for corporate tax revenue. Of the central government transfer, EUR 47.7 went to basic services and EUR 1.5 million to the Education and Culture Division.
Measured in person-years, the amount of labour used (entire personnel) during the period 1 January–31 December 2020 was 10,489.4. The reference figure from 2019 takes into account the transfer of the family law unit to the City on 1 March 2020/1 April 2020 (+7,3 person-years) and the transfer of the welfare division’s information system support to 2M-IT Oy on 1 September 2020 (-2,6 person-years). Taking the organisational changes into account, the use of labour across the entire staff increased by 19.5 person years (+0.19%).
Produced by Statistics Finland, division-specific turnover data for the Turku sub-region is available until the end of September 2020. The impacts of the coronavirus pandemic are evident in the development of turnover and the number of employees of the Turku sub-region and the entire country. The turnover for businesses in all sectors increased moderately by 0.9% (entire country -0.8%) from the previous year in the Turku sub-region during the first quarter of 2020, but turned to a steep decline in the second quarter (sub-region -10.9% and entire country -8.5%).
The budget for 2021 and the financial plan for 2021–2024 are strongly in deficit.
Across the globe, the year 2020 was characterised by the coronavirus pandemic and its dramatic impacts on the functionality of societies. Finland implemented strong restriction measures to curb the pandemic, especially during the spring of 2020. The restrictions and changes in people’s behaviour had a significant impact on the City’s operations and its operating environment. However, the effect on Finland’s general economic situation was more moderate than originally feared.
The summary presents the main points of the city of Turku's 2020 financial statements.
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