The 2022 budget has been approved: a marginal shortfall for Lugano

Lugano has approved the budget for 2022 today: management, says the City Council, has a loss of 24.2 million francs. Also updated are the new lines of developments for 2018-2028.

«With the estimate of 2022 Lugano remains true to the trend among government agencies of confirming, for a second consecutive year, a closing balance of current operations in the negative,« states the City Hall.

During the presentation of last year’s budget for 2021, it was stressed the relevance of controlling costs, particularly at a time of declining tax revenues. Based on this assumption, the 2022 budget was prepared: the Municipality’s declared objective is to limit costs that are directly controllable by the City, excluding the contributions of Lugano to the Canton, municipalities and consortiums since it is not possible to directly act on their development.

The 2022 estimate includes some organizational changes within the Administration:

- the new Academy for Italian-speaking professional firefighters (APPLI) has now become part of the Civic Fire Brigade. The Federal has approved that firemen may carry out their training in Ticino, without the higher costs of enrolling in courses in Geneva or Zurich, therefore there is no impact on the City’s deficit;

- The need to provisionally manage the Lugano-Agno airport for the duration of 2022, which was considered for only 6 months in the 2021 budget.

Given the costs and revenues that have been eliminated through these two organizational restructuring changes - which have no impact on requirements - it appears that the cost control objective of the 22 budget has been reached: the increase in costs is in fact fixed at 7.8 million francs (+ 1.71%), of which 5.2 million are own contributions.

Revenues decreased more significantly: - 8.1 million (- 4.13%) due mainly to a reduction in expectations of tax collection at source (- 2 million) and the dividend of 5.8 million paid in 2021 by AIL SA.

Tax revenue, as calculated with the political multiplier of 77%, demonstrates a strong recovery of 12 million; from 239 million in the 2021 budget to 251 million in the 2022 budget.

The increased revenue is possible due to the lower than expected negative impact of the pandemic on tax revenues 2020 and later.

The current operating result (deficit of 24.2 million) deteriorated by 3.8 million (1.45% of the requirements of the 2021 budget).

The level of gross capital expenditures remains high, which sets the 2022 budget at 80.9 million and net capital expenditures at 60.8 million. Total investments for the 2022-2025 four-year period are 338.4 million gross (248.9 net). The investment planning for the next four-year period is demanding but in line with the requirements related to maintaining the City’s road, building and structural assets.

The commitments arising from the participation in cantonal or consortium investments are also significant and, on average, amount to approximately 11/12 million net investments per year.

Self-financing is limited to 15.5 million - equivalent to a degree of 26.1% - due to the current operating deficit.

Update of the Lines of Development 2018-2028

City Hall has updated the Development Lines for the 2028 timeframe, specifying its intent regarding the City’s Mission and Vision. The updates particularly touch on the 5 main areas of focus: environment and urban quality, pole city between North and South Alps, neighborhoods, knowledge and employment. The objectives achieved since the introduction of the development lines - in 2015 - were replaced by a development of the same or by new objectives. The complete report will be presented in the coming weeks.