Although the city’s economy was weakened by the healthcare and social services reform, modest income from Lahti Group companies, high inflation and pay increases agreed for the municipal sector, the city’s result for 2023 was positive. This was achieved through ownership arrangements and the fact that a part of the city’s tax revenue was paid on the basis of 2022 tax rates.
Together with non-recurring revenue items, the result of the City of Lahti was 41.3 million euros positive.
In Finland, 2023 was the first year of the new municipal economic model, as the responsibility for organising healthcare, social and rescue services was transferred to wellbeing services counties.
– In the financial statements, the city’s economic indicators were strong and its finances are balanced. However, the actual development of the city’s finances were overshadowed by the effects of the healthcare and social services reform. Without exceptional and non-recurring revenue items, Lahti would also have been among the municipalities posting a deficit, says Mayor Niko Kyynäräinen.
Lahti’s sustainability report presents the full picture of the city’s sustainability efforts
Published for the second time in connection with the city’s financial statements, the sustainability report describes the environmental, social and economic sustainability of the city’s operations. The sustainability measures of the City of Lahti are in line with the UN’s Sustainable Development Goals. The report takes into account the city’s strategic priorities.
– The aim is to increase transparency and to provide residents and stakeholders with the opportunity to evaluate the city’s operations specifically in terms of sustainability, says Niko Kyynäräinen.
Lahti has managed to reduce its production-based emissions by about 67% from the comparison year 1990. In 2022, production-based emissions remained at the 2021 level.
According to Niko Kyynäräinen, the 80% emissions reduction target is not far off, but the final steps to achieve the target are the most difficult. Remaining a pioneer of climate work requires additional measures from Lahti, especially in efforts to reduce emissions from road traffic.
– The sustainability principle helps us make long-term plans that do not jeopardise the well-being of future generations through current measures. We want to promote the quality of life of residents and provide businesses with opportunities to succeed, Kyynäräinen stresses.
A year of successes for Lahti
During 2023, there were many success stories in the city of Lahti. The renovation of the city hall, the community centres Aura and Aarre in Renkomäki and Kivimaa and the pre-construction of phase II of Pippo business region were completed during the year. Development work of Lahti city centre and urban environment continues.
The number of the city’s e-bikes was doubled, and the total number of trips made by e-bikes was around 300,000. The number of public transport passengers was record high at nearly 8 million trips.
Events hosted in Lahti during the year included the 50th anniversary of the Finlandia Ski Marathon, the finals of the Hopeasompa competition, the Finnish Athletics Championships Kalevan Kisat, Nordic Fitness Expo and the FNLD GRVL gravel cycling race, without forgetting the Ironman 70.3 World Championship and the Salpausselkä 100th anniversary competition.
The city’s Museum of Visual Arts Malva was chosen as the Cultural Act of the Year in Finland.
Close cooperation between higher education, businesses and the city
The growth and development of Lappeenranta-Lahti University of Technology in Lahti has been rapid. According to a recent international assessment, the LUT University is Finland’s third-best university and ranked among the top 350 universities worldwide. The Lahti campus already offers ten master’s and three bachelor’s degree programmes.
Last year, LAB University of Applied Sciences’ education offering was complemented by engineering training in electrical and automation technology to strengthen the region’s growing electric transportation cluster.
Opportunities for businesses to relocate and grow in the region will continue to be improved with investment incentives.
Need for significant budget balancing ahead
The city’s operating environment has undergone structural changes, with more still to come in the future. In the healthcare and social services reform, the city’s revenue fell by more than its expenses. Profits from the city’s Group companies have declined. Employment services will be transferred from the central government entirely to cities in 2025, and the municipal funding system will be reformed in 2026.
– While the result for 2023 was positive, we have a huge need to permanently balance the city’s finances, notes Mayor Niko Kyynäinen.
The surplus for the financial year 2023 will be transferred to the balance sheet to secure finances in future years until the measures of the new budget balancing programme begin to have a stabilising effect on finances.
Key financial indicators in 2023 (previous year in parentheses):
Operating margin -302.0 million euros (695.1)
Annual contribution margin 94.8 million euros (100.0)
Result for the financial year 41.3 million euros (47.1)
Surplus for the financial year 41.4 million euros (27.1)
Investment expenses 81.7 million euros (87.5)
Cash flow from operations and investments 31.1 million euros (58.7)