Financial statements 2024: Higher-than-expected tax revenue raised Riihimäki's result to a surplus

The City of Riihimäki's financial statements for 2024 show a surplus of EUR 3,6 million before the investment provision made from the result. The city is preparing to support the upcoming campus investment of Häme University of Applied Sciences (HAMK) by making an investment provision of EUR 3,5 million from the result. After the investment provision, the surplus for 2024 will be EUR 0,1 million.

The city's result clearly weakened from the previous year, as 2023 still had a surplus of 11 million euros. However, the years are not comparable, as the result in 2023 was improved by one-off tax and government transfer items related to the welfare area reform.

The water utility's share of the 2024 surplus is 2,2 million euros.

"I consider the negative development of operating expenses and operating margin in relation to the 2023 financial statements to be a positive thing. It is also welcome that the surplus result enables preparations for the Häme University of Applied Sciences campus investment approved by the city council in December. The coming years will be tight for the city's finances, and the investment reserve can slightly ease the pressure in the coming years," says Mayor Jouni Eho.

Operating income increased slightly

The operating income of the City of Riihimäki excluding internal items was EUR 32,0 million. It increased by EUR 1,3 million from the previous year (2,2 percent). Of the operating income, fee income was clearly weaker than the previous year. Sales income, in turn, was EUR 0,6 million more than the previous year. Other operating income was increased by approximately EUR 1,3 million due to entries resulting from the closure of the health centre joint venture.

Operating expenses decreased

The city's operating expenses were ultimately clearly lower than budgeted and even decreased slightly from 2023. Operating expenses in 2024 were EUR 99,8 million (in 2023, operating expenses were EUR 100,2 million). The decrease in expenses was due to the careful management of the departments, as well as to the decrease in inflation and one-off items recorded in 2023 expenses.

Personnel expenses were EUR 60,4 million, of which the water utility company's share was EUR 1,8 million. Salary increases in the local government sector and an increase in the number of sick leave days affected personnel expenses in 2024. In the previous year, 2023, personnel expenses were EUR 58,6 million.

Tax revenues were better than expected

Overall tax revenue exceeded the budget by as much as 2,8 million euros, although the amount of tax revenue decreased from the previous year. In 2024, tax revenue totaled 75,1 million euros, which is 1,6 million euros less than the year before. In 2023, tax revenue increased by more than 6 million euros in one-offs due to the so-called “tax tails” related to the social and health care reform.

Municipal taxes amounted to EUR 2,4 million and corporate taxes to EUR 0,5 million more than budgeted. Real estate taxes amounted to EUR 0,1 million less than budgeted. The city's tax revenue grew by over 6 percent when tax revenue is considered excluding one-off tax increases for 2023.

The state contributions, EUR 8,3 million, exceeded the budget forecast by EUR 0,2 million. The state contributions decreased by as much as EUR 5,8 million from the previous year. This was mainly due to the revision of the national social and health financing calculations.

The annual gross profit was EUR 16,4 million, or EUR 573 per inhabitant. The annual gross profit indicates the revenue funding that remains available for investments, investments and loan repayments.

The city's loan portfolio grew

The city's loan stock was 2024 million euros at the end of 78,8. The loan stock increased by 9,6 million euros from the previous year, due to investments, among other things. The city's equity ratio was 64,3 percent and relative debt was 88,9 percent at the end of 2024.

The city's loan stock was 2 euros per inhabitant at the end of the year and the group's loan stock was 750 euros per inhabitant. Both figures are below the average for municipalities. According to financial statements estimates, municipalities in mainland Finland had loans of approximately 4 euros per inhabitant at the end of 385.

The most significant investment is the renovation of the swimming hall

The city's investment expenditure totaled 25,2 million euros. Of this, the city parent company's investments were 18,8 million euros and the water utility company's investments were 6,4 million euros. The amount of investments was slightly lower than the previous year.

12,3 million euros were spent on facility projects, of which the largest amount in terms of euros was the renovation of the swimming pool, 10,3 million euros. Municipal engineering was built for 5,6 million euros. This included, among other things, the renovation of Hämeenaukio and the construction of public areas in Jokikylä.

The City Board will discuss the financial statements at its meeting on Monday, March 24. The City Council will discuss the financial statements at its meeting on May 26, 2025.

Agenda for the City Council meeting on March 24, 2025
Riihimäki City Finance page
Read previous news: The city supports HAMK's campus project with 7,5 million euros (December 2024)