The City’s finances
The assessment examined the financial situation of the City of Helsinki and Helsinki Group in 2020 and its development from previous years. In addition to this, it was assessed whether the target limiting the increase in operating expenses and the target related to the financing of investments set in the City Strategy were achieved.
The amount of long-term debt has been successfully reduced in the parent City for several years, even though the City’s investment expenses have increased. Thus, investments have been successfully realised during the strategy period with internal financing, without increasing the loan portfolio per capita. The increase in operating expenses has not remained within the limits set in the City Strategy. However, the City’s finances are stable. Both the investment level and the realisation percentage of investments were exceptionally high in 2020. Internal financing remained at a good level, partly due to the one-time COVID-19 compensation payments made by the state.
The COVID-19 pandemic is causing a great deal of economic uncertainty. It will affect municipal and corporate tax revenues, as well as expenditures, the growth of which is particularly difficult to predict due to the learning deficit and an increased backlog in treatment and services.
the City Board must
◼ prepare for increasing costs caused by the backlog in treatment and services and learning deficit due to the COVID-19 pandemic.