Operating surplus and significant development

Operating surplus and significant development

The draft budget for 2023 will be presented to the Hafnarfjörður Town Council for its first reading today, Wednesday, 9 November. The projected operating surplus for the municipality's A and B sections amounts to 541 million króna for the year 2023. Operating cash flow is projected to be 3.1% of total revenues, or 1,265 million króna. The forecast assumes that the A-section's operating surplus will be positive by just over 2.3 billion króna before depreciation and finance charges, and that the A-section's result will be a positive 36 million króna.

Development and population growth in the coming years

Significant development is currently taking place in Hafnarfjörður in new neighbourhoods, on infill sites and in business areas. A considerable increase in the number of residents and businesses is anticipated in the coming years, which will result in growing revenue for the municipality. Total revenues for Sections A and B are projected to be approximately 40.4 billion króna in 2023, and operating expenses before financial items are projected to be approximately 37.0 billion króna. Of the total revenue, just over 3.8 billion króna is due to revenue recognition on the sale of plots of land.

Hafnarfjörður's financial position is good, and the debt ratio is estimated to be around 98% at the end of next year. The council tax rate will remain at 14.48%, but the total property tax burden on residential properties will be reduced from 0.744 to 0.704, due to a decrease in water and sewerage charges. Expenditure on disability matters is projected to increase by 23% next year, amounting to just over 5 billion króna. The main uncertainties in the forecasting process are the forthcoming collective bargaining agreements, the effects of inflation and international economic developments.

Key findings of the 2023 budget

• Operating result of A and B sections positive by 541 million kronor
• Operating result of Section A positive at 36 million króna
• Debt ratio estimated at around 981% at the end of 2023
• An efficiency saving of 500 million krónur will be made in the municipality's operations in 2023.
• Estimated operating cash flow from A- and B-sections of 1,265 million króna, or 3.11 TP3T of total revenue
• Council tax percentage unchanged, at 14.481%
• Property taxes on residential properties are reduced by lower water and sewerage charges, offsetting the increase in property valuation above inflation.
• The total property tax rate is reduced from 0.7441% to 0.7041%, corresponding to a 312 million króna reduction in the charges.
• Decisions on tariff changes for 2023 will be made between the discussions, but increases of 7.5-9.5% are expected to cover inflationary increases above this year's forecasts and anticipated inflation next year.
• Estimated investments amount to just over 7 billion króna.
• Spending on disability matters increases by 23%, amounting to just over 5 billion króna.

„Hafnarfjörður is run responsibly. A surplus is therefore forecast for the municipal budget in 2023, and the debt ratio is expected to remain below 100%. As before, we are placing the main emphasis on operational restraint and are careful not to increase the burden on residents.“ says Rósa Guðbjartsdóttir, the mayor. „The operating environment is challenging as municipalities have taken on increased social services in recent years without corresponding funding from the government. However, we are ensuring that this does not compromise the ambitious level of service in Hafnarfjörður, but it is vital that this discrepancy is rectified as soon as possible. The future is bright for Hafnarfjörður, and I am confident that the significant development currently taking place in the town, with its rapid increase in residents and businesses, will create great opportunities for the future.“

Key projects in 2023

The budget for projects in 2023 is just over 7 billion króna. The budget places an emphasis on prioritising core services, such as environmental matters, transport, sports facilities, housing, and sewerage. Work will continue on the finishing touches in new housing developments across the town, such as tarmacking, the construction of pavements, paths, and play areas, and the general greening of areas. Work will proceed on road construction in the new residential area of Ásland 4 and the industrial estate of Hellnahraun 3. Work will continue on the reconstruction of junctions, pavements and footpaths in the town, and special funding will be allocated to improving cycling routes in the municipality. Next year, work will continue on the path along Kaldárselsveg, and it is planned to extend it all the way to Kaldárbotnar. Next year marks the centenary of Hellisgerði, and special funding has been allocated to beautify the park. Funding will be put towards increasing greenery in the town's neighbourhoods, with a focus on screening and beautification, and a special effort will be made to green Vogar.

This year, a new sports hall was put out to tender on the grounds of the Haukar Football Club, and the plans are for the facility to be ready by the end of 2024. A new riding hall was also put out to tender on the grounds of the Sörli Riding Club and that project is due to be completed within the next three years. The Hafnarfjörður Gymnastics Club will complete the construction of a hybrid football pitch next year, and the facilities at the Strandgata Sports Hall will be upgraded. The interior renovation of the Swimming Pool is scheduled to begin, as the pool will turn 100 years old in 2023. Numerous other projects will also be undertaken in 2023, including in schools, nurseries, playgrounds and tourist sites, as well as further development at the South Harbour and works by the Water and Sewerage Company.

Budget processing

The budget for the City of Hafnarfjörður is presented for first reading at the meeting of the City Council of Hafnarfjörður on 9 November 2022. The budget covers the coming year, as well as a three-year plan for 2024-2026. The second reading and final adoption of the budget in the City Council is scheduled for Wednesday, 7 December 2022.

Here you can find out more Budget and departmental overview 2023-2026.