Jyväskylä’s financial statements show a surplus of 16.4 million euro

The recently completed financial statements for the City of Jyväskylä for the year 2020 show a significantly better financial picture than previously anticipated in the midst of the coronavirus crisis. The City has retained a surplus of 16.4 million euro for the operating year, with outstanding debt declining by 24.1 million euro. This represents a significant increase in the city’s accumulated surplus, constituting a buffer against future fiscal hardship. The hopeful situation also affords the city an opportunity to look into investing vigorously to support growth and employment in the region.

– It really is an excellent outcome, most of all explained by the support offered by the state to local government to survive the coronavirus epidemic, but also the city’s own rapid reaction to the situation and its ability to adapt its services in response, says mayor Timo Koivisto.

The adaptations mean those actions taken by the city to respond to the coronavirus crisis as soon as it begun in the spring of 2020. The coronavirus caused service closures, to which the city reacted by transferring personnel to different duties and by cutting back on substitute staff. Some personnel were also furloughed. These actions kept the city’s expenses under control, resulting in only a very moderate growth in Jyväskylä’s operating expenditures during the coronavirus crisis so far.

Another factor that helps explain the result is a less-steep-than-feared decline in the outlook of the Finnish economy and employment in 2020. Thanks to the situation remaining acceptable, the city took in 6.1 million euro more than predicted in tax income. A third key reason are the one-time subsidies issued by the Finnish state to help cope with the coronavirus epidemic. Jyväskylä took in pandemic subsidies for a total sum of 44.3 million euro.

Facing the post-coronavirus era with confidence

In addition to the good fiscal situation, Jyväskylä also displays other positive signs of growth, allowing the city to look into the post-coronavirus era with confidence.

– Jyväskylä grew by 1085 people last year. This is the seventh most in Finland. Jyväskylä has a diversified economic structure, and therefore employment did not decline to the extent it was feared in the beginning of the crisis. In addition, an external review of Jyväskylä’s economy showed we are capable of providing services in a very cost-effective fashion, and that our economic fundamentals are mostly in good order. Jyväskylä has a balanced economy, and that is an excellent ground to stand on while looking into the future and thinking up ways to keep this city attractive and welcoming, says mayor Timo Koivisto.

Due to the one-off fiscal measures, the city’s 2020 fiscals are not directly comparable to those of previous years. Furthermore, the fact that the one-off subsidies will cease as the crisis ends means the city is obliged to continue to structurally reform its economy. 

Some highlights of the 2020 financial statements

• The City of Jyväskylä had a positive fiscal balance in 2020 by 16.4 million euro.
• The City of Jyväskylä’s accumulated surplus grew, standing at 36 million euro at the end of the year.
• Jyväskylä’s outstanding debt declined by 24.1 million euro.
• The debt per inhabitant now stands at 2669 euro. Compared to 2019 figures, the decline amounts to 190 euro per inhabitant.
• The City of Jyväskylä invested 64.6 million euro last year, roughly equal to the investments of previous years. The largest investments included the Keljonkangas Comprehensive School (13.8 million euro) and the Kortepohja School and Daycare Centre (5.2 million euro). These projects are ongoing in the current year.

Strong population growth

• The population of Jyväskylä increased by 1,085 inhabitants, standing at 143,485 people at the end of the year.
• The increase resulted from natural population growth (231 people), relocations between municipalities (394 people), and immigration to Finland (456 people).

The effects of the coronavirus epidemic on the economy

• The one-off subsidies issued by the government to help local government cope with the coronavirus epidemic improved the city’s economic situation. The subsidies totalled 44.3 million euro.
• The city’s ability to react quickly to e.g. service interruptions enabled savings of about 5 to 10 million euro.
• The city took in 6.1 million euro more than predicted in tax income.

Operating expenses the lowest among the major cities

• An external review of Jyväskylä’s economy show its operating margin is the seventh best among all Finnish municipalities. In 2020, the operating expenses per inhabitant were the lowest among major cities. The main challenges faced by the economy are on the income side.
• In order to preserve the good overall fiscal situation, it will be necessary to further balance economy about 10 million euro in 2022 and some 5 million euro / year in 2023 and 2024.

Financial statement and presentation materials (in Finnish)