Annual Report of the City of Tampere 2008 Contents

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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 improvement 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 participation – 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 statements 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 municipalities 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, housing, 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 central 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. Ratina

The general plan for Ratina was adopted by the City Board in 2004 for the basis of a local detailed plan. The implementation of the detailed plan began in 2006. The required changes were made in the local detailed plans of the shop- Photos: Ari Järvelä Photos: ping centre quarter and the northern part of quarter 453. Amendments to the plans for the southern part of Ratina, bus station, new shopping centre and stadium are now le- gally valid. The most significant real estate deal in 2008 was the sale of the Ratina shopping centre site. The construction of the shopping centre as well as streets and pedestrian and cycle lanes for the city will begin in 2009. In quarter 456 in the southern part of Ratina, building construction is underway. The cornerstone of the quarter was laid on 21 May 2008, and the first residents will be moving in in spring 2009. Quarter 455 was made ready for construction

City of Tampere 5 Vuores

The Vuores district will be built in cooperation between the The planning of Puistokatu avenue in Vuores pro- City of Tampere and the municipality of Lempäälä. Their gressed in terms of the structural design of both the street shared vision for Vuores is: “Vuores – a small town in the and bridges. A site allocation competition for the Vuores midst of nature”. The objective of the Vuores project is to business quarter and a Europan 10 architectural competi- design and create a new district in the area of the partial tion in the Virolainen area were launched. The construction local master plan of Vuores. The City of Tampere and the of streets has also begun in the Lahdespohja area and Puis- municipality of Lempäälä have collaborated on drawing up tokatu avenue in Vuores on both sides of Lake Särkijärvi. a road plan for the first phase of Ruskontie road. Vuores Palvelu Oy was established in 2008 to organ- The local detailed plan and street plans for the western ize services related to building maintenance, area marketing part of the Vuores centre, as well as the local detailed plans and security of the Vuores district. At the initial stage, the for the Rimmi and Virolainen areas and the sports park company’s key duty will be building a local information were completed in 2008. The planning of Koukkujärvi and network. In August 2008, an agreement was signed with the the eastern and southeastern parts of the Vuores centre are Finnish Housing Fair Co-operative Organisation for organ- still underway. The general plan for the Pilkkakuusenpuisto izing a housing fair in Vuores in 2012. Preparations for a park was approved by the City Planning and Infrastructure site allocation competition for the fair began in 2008. Services.

6 City of Tampere Creative Tampere

The six-year Creative Tampere programme was launched public is Musiikkiteatteri Palatsi, which began operations in 2006. The aim of the programme is to foster the creative in autumn 2008. economy by developing creative industries, promoting new Owing to the programme, investments worth over €20 innovations and entrepreneurship and strengthening the at- million have already been allocated to Tampere. One of tractiveness of the Tampere Region. the programme’s goals is stimulating export in the creative The role of creative industries in generating economic industries. Through the Klub Tampere project, Tampere- growth and wealth is increasing. Of those employed in the based music industry companies have entered the large Tampere Region, as much as 10.2%, or more than 8,700 Russian market and particularly St Petersburg. The pro- people, are working for companies in creative industries. gramme has been involved in a number of events and also These companies generate a turnover in excess of €1.1 bil- promoted the well-being of the City of Tampere employees lion for over 1,900 companies. In addition to direct eco- by organizing an art exhibition for them and participating nomic impacts, the events, centres and thematic environ- in a recreational day for the employees. ments brought forth by the creative economy are reflected in the quality of the living environment and the attractive- ness of the area. The various events of the Tampere Region draw nearly 2 million visitors a year. The Creative Tampere programme is ahead of its quantitative goals. It organizes business consultancy for creative industries as well as training and consulting. The programme has provided assistance for over 200 start- up businesses, and 58 new companies have been founded in 69 projects as a result of the programme. The best- Photo: Ari Järvelä known among the general

City of Tampere 7 Year 2008 in Tampere

Election

In the 2008 municipal election, new decision-makers were elected for the next four-year term. In all, 26 new members were elected to the 67-strong City Council. Compared to the previous municipal election, the voting rate in Tampere improved. The rate was 59.3%, whilst in the 2004 municipal election it was 55.7%. The new City Council elected Timo P. Nieminen mayor for the term of the Council.

Exhibition of the Young Artist of the Year 2008, Christmas market Samuli Heimonen

For the first time ever, the Central Square was trans- Samuli Heimonen, the Young Artist of the Year 2008, held formed into a Christmas market rich with atmosphere an exhibition at the Tampere Art Museum between 16 Feb- between 12 and 23 December 2008. There were 30 ruary and 6 April 2008. Heimonen is the 24th Young Artist charming cabin stalls, an abundance of festive activities of the Year. He had his first solo exhibition in 2000, and and a variety of non-profit associations to get people into he has participated in group exhibitions since 1998. The that old-time Christmas spirit. This major event was the exhibition “Young Artist of the Year 2008 – Samuli Hei- result of cooperation between experts from a wide range monen” occupied the two uppermost floors of the museum of fields. The cabin stalls built specifically for this event and showcased 67 paintings. created a European Christmas market atmosphere with a unique touch of the Tampere Region. The high-quality Major sports events: products were mainly provided by entrepreneurs from across the Tampere Region: craftsmen and women, art- Kalevan Kisat ists, food producers and merchants. Kalevan Kisat, Finnish Championships in Athletics, was organized in Tampere between 24 and 27 July 2008. Medals for Netti-Nysse and Wrestling European Championships NetSquares of libraries Tampere hosted the European Championships from 1 to The Netti-Nysse Internet bus and the NetSquares of the 6 April 2008. Tampere City Library made it to the finals in the European Commission’s e-Inclusion Awards competition for good Jukola relay examples of ideas and practices for citizens’ information The 60th Jukola orienteering relay was organized in Teisko, society needs. There was a total of 465 entrants, of which Tampere between 14 and 15 June 2008. 35 were selected to the finals in five categories.

8 City of Tampere Tampere 1918 exhibition

The time is now ripe for an extensive exhibition on the Finnish Civil War of 1918. Events in the most important city of the war, Tampere, are introduced to the public at Museum Centre Vapriikki from a variety of perspectives. A book carrying the same title and published alongside the exhibition was nominated for Tieto-Finlandia, the literary prize for the best non- fiction book. The exhibition has been open since 24 April 2008. The Tampere 1918 exhibition displays, for the first time, a convincing collection of articles gathered from battle sites and city streets in spring 1918. The articles, which are part of the collections of the muse- ums of Tampere, were collected by the then Director of the Häme Museum, Gabriel Engberg. There is also extensive photographic material, some of it previously unseen, from Vapriikki’s photo archive. The views of combatants from both sides, but also of civilians and bystanders, are provided. Differ- ent experiences are communicated through the use of Tampere Day voices, narrative material and new technology. The exhibition also boasts an interactive map for examin- The City of Tampere celebrated its 229th anniversary ing the sites of events in the city. The exhibition and with more than a hundred events. In 2008, the UNICEF the accompanying book also shed light on the back- year was a visible part of the Tampere Day. For example, ground of the events of 1918 and their effects on later a share of the admission fees to indoor swimming pools decades. The exhibition ends with an overview of the collected during the day was donated to UNICEF. memory and interpretations of the war.

Tampere Jazz Happening

Organized since 1982, Tampere Jazz Happening is among the most recognized modern jazz festivals in the world. This event, known for its unique atmosphere, attracts top jazz musicians to perform concerts year after year. More than 8,000 come to listen to the Jazz Happening every year.

City of Tampere 9 The City of Tampere’s eventful UNICEF year

Ready, steady – UNICEF! Tampere launched the UNICEF back side of parking slips! The UNICEF year was visible year as the tenth city in Finland to do so on 1 August 2007. wherever there were people. The UNICEF year collection Challenges for the year included obtaining visibility in a of the City of Tampere generated €512,000, which exceeded city the size of Tampere as well as the sufficiency of resourc- the target of one euro per inhabitant, or €209,000. With the es. What was needed was partners truly committed to the collected funds, an educational programme can be launched UNICEF year. The starting UNICEF year was very positively in Tanzania to teach more than 1.5 million children and received in Tampere. The motto of Tampere was “Together young people to read and write and thereby improve their for the rights of the child”, under which the city and its opportunities in life. Moreover, the sale of dolls called Anna partners organized a diverse array of creative activities. and Toivo will enable a vaccination programme for over The partners included city residents, companies, asso- 2,000 children across the world. Besides the collection of ciations, cultural actors, organizations, sports clubs, unions, funds, the aim was to promote and increase awareness of schools, day-care centres, educational institutions and the the rights of the child. The rights of children were strongly city’s own organization. Negotiations were conducted with present in local media and schools throughout the year. each partner on the suitable ways to participate, and cus- The UNICEF year of Tampere was a success in other tomized forms of participation were created for the partners. respects as well. It increased awareness of the partnership All in all, there were over 300 UNICEF year partners and of cities and the Anna and Toivo dolls, and the year was more than 300 events, the calendar of events being highly also well represented nationally and internationally. The varied. City of Tampere has received praise for the creative and in- Communications and activities played a major role in novative implementation of the UNICEF year. Many new the UNICEF year project, which was often discussed in lo- operational models were developed with partners, which cal media. The year was present everywhere, even on the are also believed to be useful after the UNICEF year. Photo: Ari Järvelä Photo:

10 City of Tampere Annual report 2008

City Council Changes in the operating environment

The highest decision-making body in Tampere is the City General trends Council, which is responsible for the operations and finances of the city. The Council has 67 members. In 2008, Population the Council was chaired by Pekka Paavola (Independent). The population of Tampere totalled 209,552 at the end of Hanna Tainio (Social Democratic Party) served as the first 2008. During the year, the population increased by 1,686 vice-chairperson and Seppo Rantanen (National Coalition inhabitants (+0.8%), which was 188 inhabitants more than Party) as the second vice-chairperson. in 2007. Growth has clearly stabilized in recent years; in 2006, the population increased by a record 2,031 inhabit- City Board ants. In Tampere, growth was more subdued than in Hel- sinki, Espoo, Vantaa and Oulu. The City Board implements the city’s administration and The slowing of migration began in the latter half of operations in accordance with the goals set by the Council. 2007. However, out-migration decreased more than in-mi- The City Board has 11 members. In 2008, the City Board gration, and net internal migration rose to 400 inhabitants. was chaired by Timo P. Nieminen (National Coalition Tampere had a positive net migration of 900 inhabitants, Party), the Mayor. Lasse Oksanen (Independent) served which was about same than in 2007. as the first vice-chairperson and Pauli Ruoholahti (Social The number of births was 2,471. The last time there Democratic Party) as the second vice-chairperson. were this many births in Tampere was in the late 1960s. As mortality was lower than in previous years, natural popu- Committees, Boards of Directors lation growth rose to approximately 750 inhabitants. The and Commissions maintenance of a high birth rate supports forecasts of an upward turn in the number of children. In 2008, there were eight (8) committees and seventeen At the turn of the year, the Tampere Central Region (17) Boards of Directors. The tasks of the committees and had a total of 348,274 residents, which shows an increase Boards of Directors are to manage the operations and fi- of 4,342 (+1.3%) inhabitants. In recent years, the central nances of their sectors and implement the goals set by the region has grown more strongly than ever. The share of City Council. Commissions see to the implementation of Tampere for this growth rose to 39%. In comparison with tasks set for them. other large sub-regions in Finland, the growth of the central In their capacity as leaders of municipal committees, region has, year after year, remained the second largest after Tarja Jokinen (Social Democratic Party), Riitta Ollila (So- the capital region when measured both quantitatively and cial Democratic Party), Irja Tulonen (National Coalition relatively. By 2030, the population of Tampere is expected Party) and Sirkkaliisa Virtanen (Left Alliance), the Deputy to have increased by some 26,000 inhabitants and that of Mayors, are responsible for purchasing various services. the entire central region by over 77,000 people.

Employees Employment

The number of people employed by the City of Tampere The improvement of the unemployment rate began to de- totalled 15,947 at the end of 2008, of which one-third celerate at the end of 2007. In April 2008, it was at its worked in social and health services and one-third in edu- lowest, at 9.5%. After the summer, as general economic cation and culture. At the end of 2007, the city employed conditions worsened rapidly, the unemployment rate began 15,942 persons. a rise that was steeper in Tampere than in other large cities,

City of Tampere 11 the Tampere Region or the entire Finland. In December, the Finances rate was 11.8%, which means that it rose by 0.9 percentage points during the year, when only the previous year it was The total revenue of the City of Tampere for 2008 was reduced by 0.3 percentage points. At the end of 2008, the €1,562.4 million, which was €269.7 million (20.9%) more unemployment rate in Tampere was 3.0 percentage points than the previous financial year. higher than the national average and 2.1 percentage points Operating revenue increased by €54.6 million higher than in the Tampere Region. (12.9%). This rise was due to the €50.5 million proceeds from the sale of land included in non-current assets, which are recorded under other operating revenue. Tax revenue Housing and construction amounted to €720.6 million, which represents an increase Housing construction is slowing, and the focus is shifting to of €54.0 million (8.1%). The amount of state grants grew rental housing. In 2008, a total of 1,613 new homes were by €22.1 million (12.2%) compared to the previous year. completed in Tampere, of which 416 (26%) were in single Extraordinary income consists of proceeds from the sale of family and terraced houses and 1,196 (74%) in blocks of non-current assets related to the incorporation of the Power flats. The number has decreased steadily in recent years: Utility (€90.4 million) as well as the sale of its working 1,791 new homes were completed in 2006 and 1,677 in capital (€52.7 million). 2007. The projected number for 2009 is only about 1,200 The total expenditure of the City of Tampere for 2008 and for next year some 1,250. In 2008, approximately one- amounted to 1,382.1 million. The expenditure increased third of the dwellings were for rental. According to an es- by €121.0 million (9.6%) from the previous year. Oper- timate based on projects underway, their share will rise to ating expenditure grew by €101.8 million (8.7%). Staff one half this year and to 65% next year. expenditure, which amounted to €605.8 million in 2008, At the end of 2008, a flat in a block of flats in Tam- accounted for the majority of operating expenses. pere cost around €1,959/m² and a flat in a terraced house Annual margin describes the sufficiency of the munici- €2,004/m². pality’s total internal financing. In addition to operating Home rents increased by 5.6% in Tampere last year. margin, it takes tax revenue, state grants, financial income The rise for the entire country was 4.6% and 6.2% for and financial expenses into account. In 2008, the annual the capital region. The average rent for privately financed margin was €129.4 million, or €618 per inhabitant. The dwellings was €10.74/m² in Tampere. annual margin improved by €12.6 million (10.8%) from the previous financial year.

Income statement 2008 revenue Income statement 2008 expenditure

Extraordinary items 9%

Financial income 1% Materials and supplies 14% Sales proceeds 19% Purchased services 26% Subsidies 7% State grants 13% Fees and charges 4% Other operating expenditure 2% Muut tuotot 5 % Subsidies and grants 2% Muut tuotot 5 % Financial expenses 1% Other operating revenue 6% Depreciation 7% Tax revenue 46%

Staff expenditure 43%

12 City of Tampere Result for the financial year 2008 came to€ 180.3 mil- Net cash flow from ordinary operations and invest- lion. The results were affected by the extraordinary income ments for the financial year amounted to €195.7 million. of €143.1 million related to the incorporation of the Power Of the procurement expenses of the investments, 62% is Utility. Result for the financial year 2008 excluding extraor- covered by the cash flow from ordinary operations, while dinary items would have been €37.2 million. 27% of capital expenditure is covered by the same. Internal After adjustments made to the result, profit for 2008 financing of capital expenditure is 69.7% when the impact amounted to €178.3 million. Were the impact of the incor- of the incorporation of the Power Utility is eliminated. poration of the Power Utility eliminated, the profit for the Funding cash flow was negative €236.0 million. This financial year would be €35.2 million. was due to the incorporation of the Power Utility, whereby the Power Utility Group was granted a long-term loan of Financing of operations €243.0 million. The City of Tampere raised €20.1 million and amortized €25.3 million of long-term loans. The Cash flow from ordinary operations amounted to €127.9 ability of the city to repay loans has remained good. Total million, up €31.6 million from the previous financial year. changes in cash, which include cash flows from operations, Investment expenditure totalled €209.0 million, investments and funding, were negative €40.3 million. which shows an increase of €86.5 million over the previous year. An investment of €46.0 million was made into Balance sheet the unrestricted equity reserve of the Power Utility Group in conjunction with the incorporation of the Power Utility. The balance sheet total at 31 December 2008 was €1,866.1 Proceeds from the sale of non-current assets amounted to million, which shows an increase of €197.3 million €275.4 million. The sales proceeds include €212.3 million (11.8%). Solvency ratio stood at 78%, which exceeds the of extraordinary proceeds from non-current assets related good target level for a municipality’s finances by 8 percent- to the incorporation of the Power Utility as well as €50.5 age points. million of proceeds from the sale of land. When the items Creditors in the balance sheet increased by €16.9 mil- related to the incorporation of the Power Utility are elimi- lion (4.5%). Of revenues, 28% would be needed to pay nated from capital expenditure, the total amount used in back creditors. Outstanding debt per inhabitant decreased investments is €98.5 million. from €959 to €937.

Outstanding debt Annual margin and net investments  million /inhabitant  million 250 1200 250

1000 200 200

800 150 150 600 100 100 400

50 50 200

0 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2000 2001 2002 2003 2004 2005 2006 2007 2008 outstanding debt /inhabitant net investments annual margin

City of Tampere 13 INCOME STATEMENT

1.1.–31.12.2008 1.1.–31.12.2007

EUR thousand EUR thousand

Operating revenue 476 949 422 373 Production for own use 126 845 96 572 Operating expenditure -1 395 640 -1 263 549

Operating margin -791 846 -744 604

Tax revenues 720 600 666 586 State grants 202 173 180 143 Financial income and expenses Interest income 16 019 14 226 Other financing income 3 531 9 346 Interest expense -7 742 -7 867 Other financing expense -13 312 -998

Annual margin 129 423 116 832

Depreciations and reductions in value -92 277 -85 242 Extraordinary items 143 146 0

Result for financial year 180 292 31 590

Increase (-) decrease (+) of depreciation difference 634 578 Increase (-) decrease (+) of voluntary provision -2 000 -2 000 Increase (-) of funds -1 994 -9 091 Decrease (+) of funds 1 412 645

Profit/loss for financial year 178 344 21 722

KEY FIGURES

Operating revenue/operating expenditure, % 38 36 Annual margin/depreciation of fixed assets, % 140 137 Annual margin, EUR/ inhabitant 618 562 Number of inhabitants 209 552 207 866

14 City of Tampere CASH FLOW STATEMENT

1.1.–31.12.2008 1.1.–31.12.2007 EUR thousand EUR thousand

Cash flow of ordinary operations Annual margin 129 423 117 088 Extraordinary items 143 146 0 Adjusted internal financing -144 627 -20 778

Capital expenditure Investments in fixed assets -208 960 -122 412 Allotments for capital expenditure 1 360 2 641 Proceeds from sales of fixed assets 275 406 23 282

Net cash flow of ordinary operations and investments 195 748 -179

Funding cash flow Changes in long-term receivables Increase in granted loans -245 021 -1 412 Decrease in granted loans 3 176 9 062

Changes in loans Increase in long-term loans 20 050 15 000 Decrease in long-term loans -25 309 -25 957 Changes in short-term loans 2 316 -7 977

Changes in operating capital 0 0

Other changes in liquidity

Changes in the funds and capital from assignments 276 547 Change in stocks 23 657 95 Change in receivables -34 978 1 993 Change in interest free debts 19 834 -5 183

Funding cash flow -235 999 -13 832

Changes in cash -40 251 -14 011

Cash 31.12. 105 077 145 328 Cash 1.1. -145 328 -159 339 -40 251 -14 011

KEY FIGURES

Internal financing of investments, % 62 98 Internal financing of capital expenditure, % 27 85 Loan payment margin 4 4 Cash adequacy (days) 22 40

City of Tampere 15

BALANCE SHEET

ASSETS 31.12.2008 31.12.2007 EUR thousand EUR thousand

NON-CURRENT ASSETS Intangible assets Intangible rights 4 141 8 429 Other capitalised long-term expenditure 12 302 10 700 16 443 19 129

Tangible assets Land and waters 232 404 235 980 Buildings 429 505 417 330 Fixed structures and installations 255 431 343 967 Machinery and equipment 55 966 55 177 Other tangible assets 2 978 2 797 Advance payments and procurements in progress 55 641 41 254 1 031 925 1 096 505

Long-term investments Shares and holdings 184 934 134 591 Other loan receivables 399 376 157 952 Other receivables 548 127 584 858 292 670

FUNDS FROM ASSIGNMENTS State assignments 2 198 2 741 Special provisions from donation funds 3 128 1 297 5 326 4 038

CURRENT ASSETS Stocks Materials and supplies 2 812 26 469 2 812 26 469

Debtors Long-term receivables Prepayments and accrued income 6 134 0 Short-term receivables Trade debtors 77 646 55 948 Loan receivables 5 702 4 096 Other receivables 5 242 8 801 Prepayments and accrued income 24 908 15 809 119 632 84 654

Investments Shares and holdings 18 399 70 146 Investments on money-market instruments 0 629 Bonds and debentures 34 841 24 227 Other investment 4 600 8 227 57 840 103 229

Cash in hand and at banks 47 237 42 099

TOTAL 1 866 073 1 668 793

16 City of Tampere

LIABILITIES

31.12.2008 31.12.2007 EUR thousand EUR thousand

CAPITAL AND RESERVES Fixed capital 636 657 636 657 Revaluation reserve 128 769 129 376 Other own funds 37 332 36 751 Retained earnings 443 022 421 300 Profit/loss for financial year 178 344 21 722 1 424 124 1 245 806

DEPRECIATION RESERVE AND UNTAXED PROVISION Depreciation reserve 5 931 6 564 Untaxed provision 18 458 16 458 24 389 23 022

PROVISIONS Provisions for pensions 9 777 10 636 Other provisions 196 196 9 973 10 832

CAPITAL FROM ASSIGNMENTS State assignments 2 170 2 717 Capital from donation funds 14 518 12 443 Other capital from assignments 977 941 17 665 16 101

CREDITORS Long-term liabilities Loans from credit institutions and insurance companies 91 228 106 018 Loans from public entities 0 50 Advance received 9 8 Trade creditors 3 2 Subscription fees and other creditors 5 519 20 874 Accrued charges and deferred credits 273 274 97 032 127 226

Short-term liabilities Loans from credit institutions and insurance companies 34 789 25 117 Loans from public entities 101 193 Loans from other creditors 70 267 67 951 Advance received 0 62 Trade creditors 59 948 57 159 Other creditors 26 520 15 947 Accrued charges and deferred credits 101 265 79 377 292 890 245 806

TOTAL 1 866 073 1 668 793

KEY FIGURES

Solvency ratio, % 78 76 Financial assets, EUR/inhabitant -788 -688 Relative indebtedness, % 28 29 Accumulated profit/loss, EUR million 621 443 Accumulated profit/loss, EUR/inhabitant 2 966 2 132 Outstanding debt at 31.12. EUR thousand 196 385 199 329 Outstanding debt, EUR/inhabitant 937 959 Loan receivables at 31.12. EUR thousand 399 376 157 952 Number of inhabitants 209 552 207 812

City of Tampere 17

Operations and finances of the Group

Group structure

At the end of 2008, Tampere Group comprised 45 sub- Staff expenditure included in operating expenditures sidiaries. In addition, the consolidated financial statements amounted to €789.7 million. At the end of the financial include six joint authorities in which the city is a member. year, Tampere Group employed 24,157 people. The annual The Group also included 22 associated companies and cor- margin was €182.1 million, or €869 per inhabitant. Con- porations and three joint companies. solidated result for the financial year totalled €45.5 million. The impact of the incorporation of the Power Utility was eliminated from the consolidated result. Depreciations Corporations included in the consolidated in the consolidated income statement, €136.4 million, are financial statements of Tampere €44.1 million higher than the city’s depreciations. 2008 2007 The consolidated balance sheet total at 31 December Subsidiaries 2008 was €2,348.9 million, up €93.1 million (4.1 %). The Companies Group solvency ratio stood at 57%, similar to the previous • Real estate and housing 21 20 year, and it may be considered good. Long-term liabilities • Corporations engaged (26.3% of the balance sheet total) increased by €3.4 million in municipal operations 22 17 Foundations 2 2 (0.6%) during the financial year. Of the Group’s revenues, Joint authorities 6 6 56% would be needed to pay back to the creditors. The Associated companies and corporations 9 9 corresponding percentage for the city was 28. The Group’s Total 60 45 outstanding debt per inhabitant was €3.332.

Financing of operations

Group finances Consolidated cash flow from ordinary operations totalled €126.6 million. Investments in the consolidated cash flow An amendment made to the Local Government Act in 2007 statement consisted of investments in non-current assets, expanded the preparation of consolidated financial state- allocations and sales revenue. Consolidated investment ex- ments so that in addition to the consolidated balance sheet, penditure came to €256.1 million. Proceeds from the sale of a consolidated income statement and consolidated cash non-current assets were €70.8 million. These include €50.5 flow statement is prepared for the financial year 2008. million of proceeds from the sale of the city’s land. The Consolidated operating revenue came to €803.9 mil- Group’s investment expenditure totalled €182.8 million. lion and operating expenditure to €1,516.1 million. Con- Net cash flow from ordinary operations and invest- solidated operating margin was negative €711.4 million. ments for the financial year was negative €56.1 million. Operating revenue covered 53% of operating expenditures. Of the procurement expenses of the investments, 72% is Of operating revenue, the city’s eliminated revenue account- covered by the cash flow from ordinary operations, while ed for 55%, and the corresponding proportion of operating 60% of capital expenditure is covered by the same. expenditure was 77%. Funding cash flow was positive€ 7.0 million. The Group Operating expenditure includes the items Production raised €51.5 million and amortized €49.9 million of long- for own use and Change in inventory of finished products term loans. The city accounted for 38.9% of the increase as well as direct taxes. in long-term loans and 50.7% of amortization. The figure describing the Group’s loan payment margin was good.

18 City of Tampere CONSOLIDATED INCOME STATEMENT

1.1. –31.12.2008 EUR thousand

Operating revenue 803 872 Operating expenditure -1 516 134 Share of profit/loss of associated companies and corporations 860

Operating margin -711 401

Tax revenues 720 600 State grants 202 173 Financial income and expenses Interest income 10 341 Other financing income 2 768 Interest expense -25 688 Other financing expense -16 672

Annual margin 182 122

Depreciations and reductions in value Planned depreciations -136 361 Over and below par values of the financial year -10 Reductions in value -227

Result for financial year 45 525

Appropriations -3 122 Minority interest -579

Profit/loss for financial year 41 824

KEY FIGURES

Operating revenue/operating expenditure, % 53 Annual margin/depreciation of fixed assets, % 133 Annual margin, EUR/ inhabitant 869 Number of inhabitants 209 552

City Of Tampere 19 CONSOLIDATED CASH FLOW STATEMENT

1.1.–31.12.2008 EUR thousand

Cash flow of ordinary operations Annual margin 182 122 Extraordinary items 0 Adjusted internal financing -55 481

Capital expenditure Investments in fixed assets -256 082 Allotments for capital expenditure 2 496 Proceeds from sales of fixed assets 70 806

Net cash flow of ordinary operations and investments -56 139

Funding cash flow Changes in long-term receivables Increase in granted loans -1 865 Decrease in granted loans 3 668 Changes in loans Increase in long-term loans 51 498 Decrease in long-term loans -49 936 Changes in short-term loans 16 413 Changes in operating capital 0 Other changes in liquidity Changes in the funds and capital from assignments 153 Change in stocks -1 701 Change in receivables -32 251 Change in interest free debts 21 007

Funding cash flow 6 986

Changes in cash -49 153

Cash 31.12. 140 925 Cash 1.1. -190 078 -49 153

KEY FIGURES

Internal financing of investments, % 72 Internal financing of capital expenditure, % 60 Loan payment margin 3 Cash adequacy (days) 28

20 City of Tampere

CONSOLIDATED BALANCE SHEET

ASSETS 31.12.2008 31.12.2007 EUR thousand EUR thousand

NON-CURRENT ASSETS Intangible assets Intangible rights 13 195 16 181 Goodwill on consolidation 468 0 Other capitalised long-term expenditure 15 496 13 930 Advance payments 12 26 29 170 30 137

Tangible assets Land and waters 246 328 241 255 Buildings 1 044 933 1 009 967 Fixed structures and installations 449 780 425 175 Machinery and equipment 99 458 97 229 Other tangible assets 10 022 9 443 Advance payments and procurements in progress 99 434 62 795 1 949 955 1 845 864

Long-term investments Shares and holdings in associated companies and corporations 19 492 13 889 Other shares and holdings 16 596 16 605 Loan receivables 14 087 15 687 Other receivables 151 354 50 327 46 535

FUNDS FROM ASSIGNMENTS 7 462 6 068

CURRENT ASSETS Stocks 34 058 32 356

Debtors Long-term receivables 6 554 2 768 Short-term receivables 129 889 101 425

Investments 65 178 118 937

Cash in hand and at banks 75 747 71 141

TOTAL 2 348 339 2 255 231

City Of Tampere 21 Consolidated income statement 2008 revenue

Extraordinary items 9% LIABILITIES 31.12.2008 31.12.2007 Financial income 1% Sales proceeds 19%

EUR thousand EUR thousand State grants 13% Fees and charges 4% Muut tuotot 5 % Subsidies and grants 2% CAPITAL AND RESERVES Other operating revenue 6% Fixed capital 636 657 637 074 Tax revenue 46% Share of increase in capital and reserves of joint authorities 0 13 266 Revaluation reserve 130 406 129 847 Other own funds 50 188 45 851 Retained earnings 417 335 379 200 Profit/loss for financial year 41 824 23 086 1 276 410 1 228 325

MINORITY INTEREST 14 165 12 343

GROUP RESERVE 816 1 089

DEPRECIATION RESERVE AND UNTAXED PROVISION Depreciation reserve 16 218 16 918 Untaxed provision 26 648 23 060 42 867 39 977

PROVISIONS Provisions for pensions 9 833 10 703 Other provisions 13 864 12 939 23 697 23 641

CAPITAL FROM ASSIGNMENTS 21 168 19 621

CREDITORS Long-term liabilities with interest 582 298 580 736 Long-term liabilities without interest 35 703 33 847 Short-term liabilities with interest 115 835 99 422 Short-term liabilities without interest 235 381 216 230 969 217 930 235

TOTAL 2 348 339 2 255 231

KEY FIGURES

Group solvency ratio, % 57 57

Group financial assets, EUR/inhabitant -3 282 -3 041

Group relative indebtedness, % 56 -

Group accumulated profit/loss, EUR thousand 459 158 402 287

Group accumulated profit/loss, EUR/inhabitant 2 191 1 935

Group outstanding debt, EUR/inhabitant 3 332 3 272

Group outstanding debt at 31.12. EUR thousand 698 133 680 158

Group loan receivables at 31.12. EUR thousand 14 087 15 687

Number of inhabitants 209 552 207 866

22 City of Tampere Consolidated income statement 2008 revenue Consolidated income statement 2008 expenditure

Extraordinary items 9% Materials and supplies 14% Financial income 1% Sales proceeds 19% Purchased services 25% Subsidies 7% State grants 13% Fees and charges 4% Other operating expenditure 2% Muut tuotot 5 % Subsidies and grants 2% Muut tuotot 5 % Financial expenses 2% Other operating revenue 6% Depreciation 7% Tax revenue 46% Staff expenditure 43%

Population of Tampere and Tampere Central Region Change in unemployment rate by quarter 2005–2008 percentage inhabitants points 450 000 1 400 000 0,5 350 000 300 000 0 250 000 -0,5 200 000 150 000 -1 100 000 -1,5 50 000 0 -2 1970 1980 1990 2000 2010 2020 2030 I III I III I III I III Tampere Tampere Central Region 2005 2006 2007 2008

Council of Tampere Region – regional development and promotion of interests

The Council of Tampere Region is re- March 2007. The Supreme Administrative sponsible for regional development and Court dismissed appeals against the plan on planning, as well as the promotion of the 20 March 2008, after which the first land region’s interests. The operations of the use plan for the Tampere Region, including council are based on the Regional Devel- attached maps and reports, was prepared opment Act, Land Use and Building Act, for printing and distribution to member Local Government Act and Division into municipalities and other authorities. Regions Act. The council works in cooperation with local The Council of Tampere Region is a member of the As- and other authorities. As a result of mergers of municipali- sembly of European Regions. The AER promotes the joint ties effective from 1 January 2009, the number of member objectives and interests of European regions and holds its municipalities in the Council of Tampere Region decreased annual General Assembly in one of the member regions. In to 24. The preparation of a regional development strategy the year under review, the AER organized its General As- for the Tampere Region began in 2007 and will continue as sembly in Tampere between 12 and 15 November 2008. On an interactive process until autumn 2009. 1 September, the Council of Tampere Region presented the The Regional Competitiveness and Employment Pro- Tampere Region award, which is called “Growth” and was gramme of the European Structural Funds will be in force designed by ceramist Merja Haapala. In 2008, the award in the years 2007–2013. The first regional land use plan for went to Pirkanmaan Osuuskauppa for the significant work the Tampere Region was adopted by the Government on 29 it has done for the Tampere Region.

City Of Tampere 23 Photo: Sami Helenius

The year 2008 marked the 120th anniversary of the Tampere Power Utility. The celebrations included an exhibition on the history of light and electricity at Museum Centre Vapriikki. As a rarity, the exhibition showcased the Power Utility’s first generator.

Tampere Power Utility 120 years

Tampere Power Utility acquires and sells electricity, district erations. Tampereen Sähköverkko Oy, which functions as heat and natural gas, mainly to the residents of the Tampere the local power distribution company, decided to switch to Region. It generates electricity and district heat in the power remote reading of electricity meters across its distribution plants of Naistenlahti and Lielahti and the hydroelectric area, Tampere being the first large city in Finland to do this. power stations of the Tammerkoski Rapids, as well as dis- In May, amongst hundreds of projects, the exterior lighting trict heat in separate heating plants. of the Naistenlahti power plant was picked in Las Vegas, Activities in 2008 included preparations for far-reach- USA as a recipient of the significant GE Edison Award of ing future solutions for power plants. The plan is to replace Excellence. the second unit in Naistenlahti with a new power plant in Founded in 1888, Tampere Power Utility’s operations 2017. Tampere Power Utility produces most of the energy as a municipal corporation ended when Tampere Power through the co-generation of electricity and heat, whereby Utility Group came into being on 1 January 2009. The fuel energy can be effectively utilized. The Power Utility’s Group comprises the parent company Tampereen Sähkölai- aim is to double the use of biofuel in energy production. tos Oy owned by the City of Tampere in addition to its Renewable energy is generated through the combustion of subsidiaries Tampereen Energiantuotanto Oy, Tampereen wood fuel and peat as well as in the hydroelectric power Kaukolämpö Oy and Tampereen Sähkönmyynti Oy, as well stations of Finlayson, Tampella and Keskiputous, located in as Tampereen Sähköverkko Oy and Tampereen Vera Oy, the Tammerkoski Rapids. Remote reading is being adopted which were established in 2005. in the Power Utility’s district heating and natural gas op-

24 City of Tampere Photo: Sami Helenius

Tampere Regional Solid Waste Management Ltd.

Responsible and reliable waste management for people and vice on and general development of waste management. the environment Tampere Regional Solid Waste Manage- Waste is transported by private transport companies se- ment has served inhabitants and companies for 15 years. lected through competitive tendering, and waste treatment Established by Tampere and five of its neighbours, the is concentrated in two modern waste treatment plants. In- company has expanded over the years to cover more than tegral parts of an effective waste management chain are 400,000 residents of the region. The company applies full- residents who sort waste actively and a diverse range of cost pricing and uses its profits to develop waste manage- waste collection services. An efficient system has enabled ment. the company to keep the cost of waste management below The company’s activities include the collection, trans- the national average. port, treatment and disposal of waste, the provision of ad-

Photo: Tampere Regional Solid Waste Management Ltd

City Of Tampere 25 Opened in 1990, Tampere Hall is the largest congress and concert centre in the Nordic countries and has been selected as Finland’s best congress venue three times. Tampere Hall Ltd was established in 1987, and its sole shareholder is the City of Tampere. In 2008, the company reported a turnover of €5.33 million.

Tampere Hall Ltd

In 2008, there were 658 events in Tampere Hall, attracting a total of 257,058 visitors. By the end of 2008, Tampere Hall had had 5,063,059 visits over the years of its operation. Top moments in the past year were the Riverdance performances and the Requiem opera. The UNICEF year of the City of Tampere was also reflected in the hall’s offer- ing. As for meetings, the largest international event was the Congress of the Federation of European Societies of Plant Biology (FESPB), which had 1,000 participants. The Congress Department of Tampere Hall organized 353 events in 2008, of which 309 were Finnish meetings, 17 international congresses and 25 exhibitions. There were 18 meetings of more than one thousand people, and the total number of participants was 95,200. The largest Finn- ish meetings were the Medical Convention in Tampere, the training event of the Finnish Union of Practical Nurses, the party conference of the National Coalition Party and the union meeting of the Finnish Metalworkers’ Union. In addition to meetings and exhibitions, the premises are best suited for public fairs accommodating 5,000 to 8,000 visitors. The Park Hall can also be transformed into impressive festive facilities. The Concert Department of Tampere Hall produced, on its own or in collaboration with other parties, a total of 72 concerts and other public events in 2008. These draw 64,500 visitors. In addition to Riverdance and Requiem, the most significant events were the performances of Tero Saarinen Company, Ritchie Blackmore, Kris Kristofferson, Paul Anka, Eva Dahlgren and Peter Jöback, Juha Uusitalo, Lauri Tähkä and two ballets performed by the Riga Ballet. Other producers organized 55 events at Tampere Hall in 2008, attracting some 37,000 visitors.

26 City of Tampere Photos: Tampere Hall

City Of Tampere 27 Photo: Petri Kivinen FI-33101 Tampere, Finland Finance andStrategy Fax (03)56565644 Tel. (03)565611 City ofTampere www.tampere.fi P.O.BOX 487

Covers: Mainostoimisto Atomi Oy • Graphic design and layout: Aino Myllyluoma • Translation by Translatinki Oy • Printed by: Juvenes Print, Tampere 2009