Annual report of the City of Tampere 2008 Contents 2 From success towards more uncertain times 4 Planning the development of urban areas and structures 7 Creative Tampere 8 Year 2008 in Tampere 10 The City of Tampere’s eventful UNICEF year 11 Annual report 2008 14 Income statement 15 Cash flow statement 16 Balance sheet or two years now, Tampere has been implementing 18 Operations and finances of the Group a historic reform in Finland involving the introduc- 20 Consolidated income statement F tion of both the purchaser-provider model and the 21 Consolidated cash flow statement model of mayorship in the city’s management. Experiences 22 Consolidated balance sheet have been mostly positive, although there is room for im- provement in both models. In the future, we will need to make the purchaser-provider model more flexible, accurate An abstract of the financial statements and customer-friendly. The multiple-provider model must 2008 of the City of Tampere. also be expanded and the productivity of service provision improved. In this way, we can further enhance the operation of the management model. The model of mayorship has given a face to political decision-making and strengthened the position of elected of- ficials in preparatory work. The model for local participa- tion – Alvari – as well as other new ways of operation have increased inhabitants’ opportunities for participation. The new management model has stimulated dialogue between inhabitants and decision-makers. According to preliminary data on the financial state- ments of municipalities and joint authorities, the operating expenses of municipalities grew by 7% last year. A high pay settlement, increased demand for services and more intensive measures required by, for example, the health care guaran- tee, are behind this rise. The combined annual margin of the municipalities and joint authorities decreased and profits fell by 10% from the year before. However, the annual margin of joint authorities was up by as much as 17%. The finances of the largest and smallest municipalities showed a weaker development than average. The outstanding debt of munici- palities continued to increase. The city’s expenses grew faster than in municipalities on average. An 8.1% increase in tax revenue enabled an 8.7% rise in external operating expenditure. In view of the results, the city’s finances were in balance. In the income statement, the annual margin covered 140% of depreciations, and result for the financial year came to €180.3 million. The excellent results were due to the proceeds from the incorporation of the Power Utility and the sale of its working capital. Re- 2 City of Tampere Photo: Ari Järvelä Photo: From success towards more uncertain times a significant initiative underway in the Tampere Central Region aimed at increasing cooperation in land use, hous- ing, traffic and services. In the long run, the goal is to turn the Tampere Central Region into a large city where at least matters related to the improvement of competitiveness and development of the urban structure as well as part of the de- cisions on the organization of services are dealt with within the central region. Tampere continued its active international networking. Photo: Ari Järvelä Photo: A joint office with Helsinki and Kotka was opened in St Pe- tersburg, Russia to promote export. A twin city agreement sult comparable to previous financial years amounted to was signed with Guangzhou, China at the end of the year. In €37.2 million. The city’s total investments excluding the late 2008, the municipalities of the Tampere Central Region incorporation of the Power Utility were €163.0 million. decided to establish an economic development company for Outstanding debt per inhabitant decreased for the second the region. The company, Tredea Oy, became operational year in a row, standing at €937 per inhabitant at the end in early 2009. Its role is to provide advice for start-up busi- of the year. nesses, carry out regional marketing (incl. tourism) and set Based on the financial statements 2008, the city’s finan- in motion various development projects related to clusters of cial position is stable. However, the global economic reces- companies and areas of land. The first Tampere Christmas sion is also a threat to the city’s economy. As tax revenue market was opened on 12 December 2008 in the Central growth slows, the challenge lies in maintaining the balance. Square, and it received a warm welcome. In 2009, the mar- The city’s economy cannot, on the current scale, be built on ket will be expanded and will probably include international increasing tax revenue and state grants, the good results of contacts as well. the Power Utility and one-time land sale income. For this The year 2008 will go down in history as the year the reason, mitigating operating expenses and improving inter- global economic crisis unfolded. Nevertheless, the global nal financing to better correspond to the investment level of turmoils have not yet had a significant impact on the City of the growing city will increase in significance. Tampere. The city’s economy remained strong, and the city Tampere and the entire central region continued to was once again successful in an image survey for Finnish cit- grow strongly. The city’s population grew by 1,686 inhabit- ies. I would like to extend my thanks for this positive devel- ants, totalling 209,552 at the end of the year. The number opment to the city’s employees, inhabitants and partners. of people living in the Tampere Central Region increased by 4,342 inhabitants, exceeding 345,000. A total of 55,500 commuters cross the city limits daily. Over the recent years, Timo P. Nieminen commuter traffic has increased by more than a thousand Mayor employees per year. Job self-sufficiency has risen to 123%. City of Tampere As traffic volumes grow, well-designed traffic solutions and an urban structure that takes account of the entire cen- tral region become even more important. There is currently City of Tampere 3 Planning the development of urban areas and structures New urban structure model for Tampere Central Region in the making be constructed in a manner similar to previous years, since this would lead to urban sprawl. This would be unsustain- The municipalities of the Tampere Central Region – Tam- able both economically and environmentally, leading to an pere, Kangasala, Lempäälä, Nokia, Pirkkala, Vesilahti, over 40% rise in motor traffic, for example. A further chal- Ylöjärvi and Orivesi – are collaborating on a structure mod- lenge is the rapid aging of the population, which means that el to find a direction for land use and traffic system develop- despite strong population growth, the number of working- ment. The aim of the planning work is for all municipalities age people is growing only slightly. This is contributing to to commit to the development of the urban structure over mounting problems in the finances of municipalities. the next decades. This is essential for the region’s future. The intended outcome is that the municipalities commit to the development of a joint traffic system and, in particu- Growth of the city reflected in significant land lar, public transport system and the creation of a service use planning network, where the implementation of rail traffic in the Tampere Central Region will be central. It is also important There have been several major planning projects underway in that the municipalities engage in a programme specifying Tampere aimed at responding to challenges that accompany means for curbing the climate change, as well as in devel- strong growth. The implementation of a local detailed plan oping city centres, which has to do with the location and programme will secure sufficient construction and diverse volumes of the retail service network of the central region. options for housing in the city. In 2008, the focus was on The background studies to be drawn up for the structure making areas in the centre more compact and developing the model work include a housing policy programme, traffic service network. Significant planning projects include the par- system plan, climate strategy and service network plan for tial local master plans for the Lielahti service area, Santalahti, the central region. Kauppi-Niihama recreation area, Niemenranta, Nurmi-Sori- The basis for the structure model work is the major la, Tarastenjärvi, Lahdesjärvi-Lakalaiva, Hervantajärvi and future challenges facing the region’s municipalities. Owing Kalevanrinne. Some of these plans are at the planning stage, to population growth and increasing living space, the chal- whilst others have already been adopted. A competition for lenge lies in the need to build more homes for some 150,000 ideas for the future centre of Nurmi-Sorila was held in 2008 inhabitants by 2030. However, the urban structure cannot in preparation for the partial local master plan work. 4 City of Tampere The planning of the Kolmenkulma business area continued during 2008 by demolishing old buildings, and the right to with Nokia and Ylöjärvi. The zoning of the joint Vuores use the “Voimakatu ramp” was obtained for the quarter in district of Tampere and Lempäälä progressed. The first order to provide access to the parking facility to be built phase in revising a local detailed plan for the preservation in the quarter. of the Pispala district is about to be completed. As for the Planning work for Laukonsilta – a pedestrian and cycle inner city, work began to investigate the integration of the bridge from Ratina to Laukontori – was completed and the urban structure, including looking into the possibilities of street plan for the bridge was adopted by the City Planning infilling. and Infrastructure Services. A competitive tendering process was launched, and construction may begin in early 2009.