City of Sapporo IR Presentation Document. November 2014

Transcription

1 City of Sapporo IR Presentation Document November 214

2 Table of Contents 1. Overview of Sapporo and Major Policies Profile of Sapporo 4 Population of Sapporo 5 Future of Sapporo That We Aim At; Formulating a strategic vision for urban development. 6 Potential of Sapporo (1); Overseas expansion of food and film 7 Potential of Sapporo (2); Attraction of enterprises 8 Potential of Sapporo (3); Extension of Hokkaido Shinkansen (Bullet Train) 9 Changing Cityscape; Creating a bustling city center. 1 Creative City Sapporo; Sapporo International Art Festival 214 taken place 11 Tourism of Sapporo; Aiming at tourist numbers of 15 million people 12 Collaboration within Hokkaido; No development of Sapporo without development of Hokkaido 13 Ongoing Administrative and Financial Reform Initiatives; Goals and status of progress Financial Profile of Sapporo General Account Closing in FY213; Status of income and expenditure, and revenue 16 General Account Closing in FY213; City tax revenue 17 General Account Closing in FY213; Expenditure 18 Mandatory Expenses 19 Change in City Bond Issuance Outstanding 2 Ratios for Financial Soundness 21 Status of Funds 22 Special Account (National Health Insurance Account) / Investment Organizations (Dissolution of Land Development Corporation) 23 Public Enterprise Accounting 24 Track Record of Bond Issuance 25 Time Schedule for Bond Issuance 26 Bond Issuance Management and Creditworthiness 27 Contact Information for Sapporo City Bonds 28 2

3 1. Overview of Sapporo and Major Policies

4 札Sapporo s population and economy are comparable in size to those of medium-sized prefectures. Profile of Sapporo Size of population (1, people) 仙名京大神広福福幌台古都阪戸島岡島屋県県Basic Resident Registration Network System as of March 31, 214 Size of economy (Trillion yen) 福幌島州県県 Population is about 1.93 million people (ranked 4 th among government-ordinance designated cities). Size of population is comparable to those of medium-sized prefectures (ranked 21 st among prefectures) 札横浜川崎 Sapporo s total gross production is about 6.4 trillion yen (ranked 5 th among government-ordinance designated cities). As well as the population, its size is comparable to those of medium-sized prefectures (ranked 23 rd among prefectures). Sapporo Sapporo 仙台Sendai Sendai 千葉Chiba Yokohama 横浜Yokohama Kawasaki 川崎Kawasaki Nagoya 名古屋Nagoya Source: Prefectural economic accounts (actual for FY211) Kyoto 京都Kyoto 大阪Osaka Osaka 神戸Kobe Kobe 広島Hiroshima Hiroshima 北九Kitakyushu Fukuoka 福岡Fukuoka Fukushima Pref. Fukushima Pref. 岡山Okayama Pref. 三重Mie Pref. Sapporo s position in Hokkaido While Sapporo accounts only for 1% of Hokkaido s total land area, its GDP per capita exceeds 3%. Land area GDP per capita 1% 35% Hokkaido 3.7% 6.6% 5.6%.1% 1.6% Sapporo 6.5% 16.7% 26.6% 1.5%.1% Kawasaki 7.% 2.6% 1.8% 1.6% 15.1%.1% Kyoto 5.% 9.8% 3.3% 8.8% 13.4% 12.9%.1% Kobe 3.% 14.% 4.4% 13.2% 22.% 21.6% 2.6% 11.8% 15.% 19.9% 16.3% 15.3% 33.5% 32.% 25.% 25.3% 29.4% % 2% 4% 6% 8% 1% Agriculture, forestry and fisheries industry Manufacturing industry (machinery, textile, etc.) Wholesale and retail trade Real estate industry Industrial composition Construction industry Manufacturing industry (food) Service industry Other Source: Prefectural economic accounts (actual for FY211) Selected brand power Fiscal year First Second Third Source: Regional brand survey * Prefectures became those surveyed from 29. First in prefectures 26 Sapporo Kobe Hakodate 27 Sapporo Kyoto Yokohama 28 Sapporo Hakodate Kyoto 29 Hakodate Sapporo Kyoto Hokkaido 21 Sapporo Hakodate Kyoto Hokkaido 211 Sapporo Hakodate Kyoto Hokkaido 212 Sapporo Kyoto Hakodate Hokkaido 213 Kyoto Hakodate Sapporo Hokkaido 214 Hakodate Sapporo Kyoto Hokkaido 4

5 Population of Sapporo The population of Sapporo has increased consistently after being designated as a government-ordinance designated city, but is expected to peak in sometime around 215 and to tend slowly down since. The social increase of population has begun to exceed the natural increase of population since around In recent years, the situation where the social increase of population has made up for the natural increase of population has continued. (1, people) 2 15 Population of Sapporo after being designated as a government-ordinance designated city Designated as a government-ordinance designated city 1,44,817 people Exceeded 1.5 million people. 1,928,932 people 1 5 (people) 2, 15, 1, 5, 5, 1972 S S5 198 S S6 199 H H7 2 H12 25 H17 21 H H , ,256 6, Population movement Number of increase in population Number of natural increase of population Number of social increase of population ,113 6, ,958 7, (1, people) 2,5 1,914 1,933 1,92 1,89 1,844 2, 1,785 1,5 1, 5 Population structure in the future 1,296 1,224 1,162 (68%) 1,117 1,6 987 (55%) (37%) 224 (21%) (12%) (8%) years old years old 65 years old or older Total number Source: Statistics Bureau of Ministry of Internal Affairs and Communications National census, City of Sapporo Mayor s Policy Planning Office, Policy Planning Department, Strategic Planning Section 5

6 Future of Sapporo That We Aim At; Formulating a strategic vision for urban development. With dealing with changes in socioeconomic circumstances surrounding the future of Sapporo, formulating the strategic vision for 1 years starting from FY213 to FY222, which is positioned as the urban management strategy to open up a New creative era. Sapporo is now facing a major turning point. Arrival of society whose population will decrease. Peaking in 215 and trending down thereafter. Decrease in productive-age population will be prominent in particular. Increase in elderly singleperson households. One out of eight households will become an elderly singleperson one in 225. Reduction of economic size With the productive-age population will decrease, the gross production of Sapporo will also decrease accordingly. Shift in energy policies The questionnaire of citizens conducted in 211 showed their hope that nuclear power generation should be abandoned. Strategic vision for urban development (formulated in 213) City image we should aim at The city that creates the future of Hokkaido, and that the world longs for. Creativity and challenge to create new value. Quest for Sapporo-type lifestyle. Realization of an eco-friendly capital which Sapporo can boast to the world. The spiritually rich city where people live together hand-in-hand with each other. Urban development that promotes human connection and mutual support. Collaborating with municipalities in Hokkaido to create its charms. The city that can coexist in harmony with the world. Three creative strategies, and urban space that supports these strategies. Life and community Strategy for creating regional welfare benefits. Strategy for creating mutually supporting society. Strategy for creating regional management. Industry and vitality Strategy for creating Sapporo-type industry. Strategy for creating urban brand. Strategy for creating industrial human resources. Urban space that supports strategies Low-carbon society and energy conversion Strategy for creating low-carbon society. Strategy for creating nextgeneration energy. Urban area City center Base Network Urban foundation 6

7 Potential of Sapporo (1); Overseas expansion of food and film Forecasting the curtailment of economic size with the population decrease and the progress of super-aging society that are envisaged in the future, it is important to take the proactive measures for acquiring external demand. Focusing strategically on acquiring external demand by creating synergetic effects through the collaboration among the support for corporate overseas development, the promotion of inbound tourism, and the city promotion. Established the International Economic Strategy Office Encouraging the overseas expansion of the goods produced in Hokkaido. Focusing on expanding the acquisition of external demand such as the increase in inbound tourists, etc. Enhancing the infrastructure of the film Industry and the city promotion utilizing image. Promoting initiatives through utilizing Hokkaido Food Complex, Comprehensive Special Zones for International Competitiveness Development and Sapporo Contents Special Zones. Aiming to expand overseas sales outlets for foodstuffs of Sapporo. Companies to be subsidized Subsidized amount (Subsidy rate) Items to be subsidized Nishiyama Seimen, Inc. Sapporo ramen noodle with soup Project for supporting export specification food manufacturing Food manufacturing companies, trading companies for food export, etc. located in Sapporo Up to one million yen (Limited up to the half of the expenses to be subsidized) Manufacturing, machinery, export expenses, marketing, travel expenses, etc. Sorachi Co., Ltd. Sorachi sauce Koh-Itten Iwata Co., Ltd. Koh-Itten miso Mireica Co., Ltd. Sapporo Catalana Goal Actual achievement [Reference] Sales amount due to the effect of Food Special Zone (1 million yen) Subsidy for film production provided by Sapporo Subsidizing filming costs so as to attract film crews to Sapporo as a location for filming. Sapporo is to be used for the production of television programs for overseas as well as that of domestic films such as The Detective Is in the Bar 2, Tears of Grapes, etc. The track records of aid in FY213 were 12 cases, of which 11 cases were the television programs for overseas. Beauty Concierge (Tentative) Due for release in July 215 The attraction of location at a planning stage was successfully consummated for the first time since the special zone was designated in December % of the location was set in the city center of Sapporo. Having aided the arrangement of a new-film-release presentation, advertising of works, etc. starting with subsidizing the expenses related to the preliminary inspection of the location. 7

8 Potential of Sapporo (2); Attraction of enterprises Less accent of words Strengths of Sapporo Potential that Sapporo has ever had Cheap office rent Location requirements of call centers Survey year Number of companies Number of employees Number of regular employees Lots of universities and colleges with abundant human resources Number of full-time employees FY29 49 companies 14,5 people 12,7 people 1,4 people FY21 53 companies 18, people 13,5 people 1,5 people FY companies 21,4 people 16,8 people 2,2 people FY companies 26,7 people 21,4 people 2,4 people FY companies 26,1 people 2,9 people 2,7 people Potential as a backup base in the future After the Great East Japan Earthquake, private-sector companies have been trying to promote diversification of risk in relation to location requirements, etc. Located remote from the Tokyo metropolitan area Low risk of natural disasters Probability of earthquakes measuring 6 or higher in the next 3 years Sapporo Sendai Saitama Chiba Tokyo Yokohama Niigata Shizuoka Nagoya Kyoto Osaka Kobe Hiroshima Fukuoka Excellent transportation access Number of typhoons that hit a year (average) Hokkaido Tohoku Hokuriku Kanto-Koshinetsu Tokai Kinki Chugoku Shikoku Kyushu (north) Kyushu (south) Okinawa AXA Life Insurance Co., Ltd. decided to set up the Sapporo Headquarters in 214!! Aiming to strengthen business continuity system. Organization with 12 employees Important functions such as new insurance policies, payment of insurance claims, personnel management, etc. were relocated. Strengthening efforts to aim at the Relocation of headquarters functions and the Food and advanced technologies fields. City of Sapporo Promoting attraction of enterprises further by making concerted efforts together with surrounding municipalities!! Subsidy for promoting capital investment in Sapporo area. Sapporo will subsidize the investments into facilities related to priority areas (biotechnology, renewable energy sources, aerospace, etc.) as well as those in the city center of Sapporo, of course, even if they are made in neighboring municipalities. [Track record of subsidy] Unisis Corp; Being scheduled to launch operations in April 215. Having expanded business by providing high-quality medical needles manufactured with special technologies. Global market share of 3% Nakakita Yakuhin Co., Ltd.; Being scheduled to Sapporo launch operations during 216. A long-established pharmaceutical manufacturer founded 288 years ago. While basing in Chukyo area, trying to develop in Hokkaido this time to aim to strengthen its business continuity plan. Source: (Left) Headquarters for Earthquake Research Promotion, (Right) Japan Meteorological Agency Ishikari Otaru Tobetsu Ebetsu Kitahiroshima Eniwa Chitose 8

9 Potential of Sapporo (3); Extension of Hokkaido Shinkansen (Bullet Train) Revitalizing the flow of people by strengthening the network with Honshu Shin Otaru (Tentative) Sapporo Kutchan Oshamanbe Shin Yakumo (Tentative) Kikonai Oku Tsugaru Imabetsu Shin Hakodate Hokuto Construction launched in 212 Shin Hakodate Hokuto - Sapporo About 211km Under construction Shin Aomori - Shin Hakodate Hokuto About 149km Scheduled completion in 235 Scheduled completion at the end of 215 Entire line of Hokkaido Shinkansen Sapporo - Shin Aomori About 36km Of the total project costs for extension of Sapporo in the amount of 1.67 trillion yen, the burden of Sapporo is about 21 billion yen. This burden of about 21 billion yen is to be financed by the following manners: Rental fees Extension project costs and fiscal burden of Sapporo State contribution (2/3) Public works related expenditures Local burden (1/3) Prefectural burden Municipal burden Omiya Shin Aomori Sendai Tokyo Hachinohe Morioka H Construction launched in 212 Under construction In operation 各都市との所要時間 Section Shinkansen Airplane Sapporo - Shin Hakodate 1hr 13min 2hr 3min Sapporo- Shin Aomori 2hr 7min 2hr 5min Sapporo - Morioka 2hr 45min 2hr 3min Sapporo - Tokyo 5hr 1min 3hr 3min * Air travel time includes the time from a major train station to the departure airport and from the arrival airport to the nearest major station. Source: Japan Railway Construction, Transport and Technology Agency Local government bonds General Account budget Tax allocation system 45% Local burden 45% 1% (The first year after launch) Net increase of number of visitors Total amount of consumption Production ripple effects A variety of effects in Sapporo Central Hokkaido Sapporo Southern Hokkaido Northern Hokkaido Other regions Entire Hokkaido (1, people) (1 million yen) (1 million yen) Share to entire Hokkaido (production) 8.8% 7.9% 5.9% 6.8% 7% [Trial calculation] Hokkaido, Department of Policy Planning and Coordination in June 213 9

10 Changing Cityscape; Creating a bustling city center Having increased the flow of people in the heart of the city since when the underground walkway connected between Sapporo Station and Odori in March 211. Planning to liven up the downtown area even further, in part by improving facilities between Sapporo Station and Susukino, and also through the redevelopment of the Kita 1, Nishi 1 area and the Minami 2, Nishi 3 southwest areas. Encouraging the remodeling of buildings that face the street. Improvement of Odori junction Renewal of the underground crosswalk between Sapporo Station and Odori, in cooperation with privatelyowned building owners, etc. (due for complete in spring 215) *Rendering of completion Improvement of complexes for public gatherings Developing a center of culture, arts, and creative activities for local residents. (due for completion in 217) *Rendering of completion Hall with 2,3 seats Susukino district Odori district Extension to loop streetcar line *213 Good Design Award Introducing a new model, low-floor streetcar, and constructing a loop line from Susukino to Odori district (due for launching during 215) Development of Kita 3-jo Akapura Development of Kita 3-jo street extending from the old Akarenga Government Building to Sapporo Ekimae-dori. Opened on July 19, 214 Promoting redevelopment of city center Actively engaging in redevelopment using private funds in areas such as Kita 1, Nishi 1 area and the Minami 2, Nishi 3 southwest areas. Sosei Tunnel Sapporo Ekimae-dori JR Sapporo Station Improvement of underground walkway in front of Sapporo Station (opened in March 211) Improving the underground walkway connecting Sapporo Station and Odori, and revitalizing the city center and regaining its attractiveness through private sector redevelopment. Foot traffic in front of the station increased by about 2.5 times. 8 (1, people) Prior to opening 開通前 7.2 After opening 開通後 *212 Good Design Award 1

11 Creative City Sapporo; Sapporo International Art Festival 214 taken place Declaration of Creative City Sapporo (March 26) The city that generates new industries and culture through domestic and international interchange with civilian power rich in creativity Participation in UNESCO Creative Cities Network (in November 213) Sapporo was designated as a City of Media Arts in Asia for the first time. Intellectual interchange with world creative cities and improvement of the city brand Spillover effects to a variety of industries Other domestic member cities Revitalizing attractive resources Creative City Sapporo Creating new creativity through a variety of interchange Craft & folk art Kanazawa Increasing the number of visitors Design Nagoya Kobe Sapporo International Art Festival 214 The iconic project inaugurated as the Creative City Sapporo for the first time. It was opened for 72 days from July 19 to September 28, where the number of visitors reached 478,2 people that was 1.6 times as many as the original target. Promotion of Creative City Sapporo Developing human resources to support Sapporo-like culture and arts Accumulating diverse human resources to lead the Creative City Sapporo Creating lifestyle full of culture and arts Rediscovering charms of Sapporo and creating new value through power of culture and arts. Revitalizing community development as well tourism and economy. (1) [Wald aus Wald (Wood by wood)] Takashi Kuribayashi (2) [FOGSCAPE #47412] Fujiko Nakatani Photo: Keizo Kioku for both (1) and (2) 11

12 Tourism of Sapporo; Aiming at tourist numbers of 15 million people Sapporo aims to achieve the tourist numbers of 15 million people a year by 222 through formulating the Plan for Urban Development by Tourism in Sapporo. Strengthening the attraction of foreign tourists focusing on Southeast Asian nations as promising markets in particular. Breakdown of foreign tourists (by departure place in FY213) 15 million people Increased by 37, people Year-on-year Tourists visiting Sapporo Number 観光客数 of tourists ( 左軸 (left axis) ) Number 外国人宿泊者数 of foreign guests ((right 右軸 axis) ) (1, people) (1, people) 1, ,4 1,3 1,2 1,1 1,41 5 Source: Tourism of Sapporo, 213 edition U.S.A 2% Malaysia 3% Singapore 6% Source: Tourism of Sapporo, 213 edition 68 1,34 9 1,356 6 H16 24 H17 25 H18 26 H19 27 H2 28 H21 29 H22 21 H H H Thailand 8% Other 8% South Korea 11% China 14% Taiwan 33% Hong Kong 15% Country, region Number of guests in About 7% of tourists visiting Sapporo has come from East Asian nations. In recent years, the tourists from Southeast Asian nations have increased significantly. The tourists from Thailand in particular have increased by 32.4% year-on-year. Year-on-year Thailand 88, % Singapore 63, % Malaysia 32, % Disseminating the attractiveness of Sapporo to the world. Top level involvement in sales targeting at Thailand Launched regular flights from New Chitose to Bangkok. (Daily flights from October 213) Exemption of visa for visiting Japan (From July 213) Mayor himself strengthened the economic ties with Thailand and conveyed the charm of tourism in Sapporo. Sapporo made proactive appeal. (The trains wrapped in Hatsune Miku run in the Thailand.) Running a wrapping bus in Singapore. On the sidelines of the launching of 17 extra flights to and from New Chitose and Singapore (scheduled between December and January ), carried out the tourism promotion of Sapporo by using the buses wrapped in Hatsune Miku run. Sapporo makes proactive appeal. (The buses wrapped in Hatsune Miku will run in Singapore.) 12

13 Collaboration within Hokkaido; No development of Sapporo without development of Hokkaido What Sapporo can do to vitalize Hokkaido. Sapporo is the place where a variety of charms gather from all over the Hokkaido. Charms of Sapporo are those of Hokkaido themselves. Forecasting that the economic base will be weakening due to the decrease in population in the future, it will be indispensable to create an economic environment where Sapporo and other regions will work together to utilize each charm. Sapporo is carrying out a variety of initiatives so that municipalities in Hokkaido can leverage Sapporo effectively. Lots of attractive resources in Hokkaido Distribution function Urban function of Sapporo Research facilities Ability to pull in more customers Sapporo: Instruction manual Are you looking for a place for regional PR? Please utilize such human resources or research institutes in Sapporo! The entire city of Sapporo as PR media in whole! torisetsu.html Promotion of sextiary industrialization Networks that are connected one another The collaborating matching site for agricultural, commercial and industrial industries of1 cities in Hokkaido. The database that posts the information on operators in the primary, secondary and tertiary industries in Hokkaido who wish to work with other industries. [Number of participation case] Primary: 13 cases, Secondary: 27 cases, Tertiary: 21 cases Project subsidized for promoting revitalization of sextiary industry Subsidizing the initiatives where new products development shall be carried out in collaboration with the primary industry in Hokkaido and the secondary and tertiary industries in Sapporo by leveraging resources of farm and marine products in Hokkaido. [Number of adoption case] 16 cases [Adoption case] Development of the Raw ham yukhoe produced by Hokkaido brand wagyu (Japanese beef) that is edible at home. (Primary producer: Uemura Farm (Shiraoi), Secondary producer: Sapporo Barnaba Foods (Sapporo)) Rainbow for Unity An image song was produced so as to let everyone know how the collaboration in Hokkaido had been promoted and share such initiatives with one another. It is the RAM WIRE, a group of three people, that produced such a song, who agreed with the idea of the initiatives. Use, its vocal, is from Iwamizawa. 13

14 Ongoing Administrative and Financial Reform Initiatives; Goals and status of progress Achieved the benefit of roughly 13. billion yen from reforms to fiscal structure and administrative policies carried out in and The Plan to Promote Administrative and Financial Reforms ( ) was drawn up with the goal of establishing a sustainable fiscal structure and to review the allocation of resources to key areas. The cumulative benefit amount through the Plan to Promote Administrative and Financial Reforms reached 52.2 billion yen as of FY213, which exceeded the benefit amount up to FY214 estimated in the original plan. (People) 17, 16,258 16, 15, 14, 13, Plan to Promote Administrative & Financial Reforms (1 million yen) 25, 21,892 2, 15, 1, Fiscal structural reform plan Administrative and fiscal reform plan Reforms achieved in the past The debt of all accounts was reduced by about 478 billion yen. The number of employees was reduced by about 2, people. Urban rapid transit railway business has become profitable on a yearly basis since 26 Change in the outstanding debt for all accounts Reduced by about 478 billion yen Change in the number of employees Reduced by about 2, people 17, ,35 23 H15 24 H16 25 H17 26 H18 27 H19 28 H2 29 H21 21 H H H H25 Plan to Promote Administrative and Financial Reforms ( ) Item Status of benchmarks Item Goal Results in 213 Outstanding city bond of all accounts Public finance adjustment reserve funds Ordinary balance ratio Independent financial resources (excluding funds carried forward, revenue from interest on loan principal, etc.) Benefit amount Cumulative benefit amount Enhancing efficiency of organizational management Effective use of fiscal resources Reviewing allocation of resources. 3 4 Strengthening revenue base Total benefit amount reviewed End of FY214 to be less than end of FY21 (Less than 1,833 billion yen) Retaining about 1 billion yen. The level below the average of government-ordinance designated cities. To be comparable with FY21 (39.2%) (Unit: 1 million yen) Key measures Reducing administrative costs, promoting outsourcing to private sector, etc. Leasing or selling lands, drawing down funds. Reducing existing business costs. Strengthening collection of overdue payments, etc. 1,711 billion yen 17.5 billion yen 92.3% (The average of governmentordinance designated cities is 94.6%.) 38.9% 14

15 2. Financial Profile of Sapporo

16 General Account Closing in FY213; Status of income and expenditure, and revenue The revenue at the settlement of accounts in FY213 was billion yen increased by.9% year-on-year. Whereas the income of city tax and national treasury disbursement increased, the local grant tax decreased by 8.5% year-on-year. 1, 8, 6, 4, 2, (1 million yen) Sapporo 8,67 7,918 8,19 8,339 8,358 8,442 8,517 7,684 7,67 7,645 2,162 1,961 1,817 1,862 1,785 1,744 2,141 2,131 1,897 1, ,468 1,415 1,327 1,44 1,462 1,924 1,971 2,61 2,57 2,187 1,125 1,128 1,131 1,18 1,9 1,17 1,27 1,4 1, ,583 2,611 2,66 2,824 2,822 2,748 2,751 2,771 2,738 2,795 Sendai Saitama 横浜川崎静岡浜松岡山広島福岡熊本さいChiba Yokohama Kawasaki 相模原Sagamihara Niigata Breakdown of revenue 24 H16 25 H17 26 H18 27 H19 28 H2 29 H21 21 H H H H25 Ordinary general revenue of government-ordinance designated cities (Ordinary accounting basis) (Million yen) (1 yen) 8, 3 6, , 2 2, 39,372 29,47 札仙千新京大堺神1 幌台葉潟都阪戸た屋市ま平Ordinary general revenue The amount of revenue that is regularly earned every fiscal year and to which no restriction Ordinary general revenue Per capita citizen ( 左軸 ) 市民 1 人あたり ( 右軸 ) 均経常一般財源額 is made for its use at all. For instance, local tax, ordinary local grant tax, recurring usage amount (Left axis) (Right axis) fee or commission earned, etc. Shizuoka Hamamatsu 名古Nagoya Kyoto Osaka Sakai Kobe Okayama Hiroshima 北九州Kitakyushu Fukuoka Kumamoto Others その他 市債 City bonds National/prefecture treasure 国 道支出金 disbursement Tax allocations to local governments 地方交付税 市税 City tax Average of 政令governmentordinance designated cities 16

17 General Account Closing in FY213; City tax revenue The income of city tax increased by 5.7 billion yen year-on-year. The tax collection rate exceeded the level of the average of government-ordinance designated cities by strengthening the disposition of delinquency in payment. However, the percentage of tax revenue to the revenue is still low, and the challenge is how tax sources will be cultivated further from now on. (1 million yen) 3, 2,824 2,822 2,583 2,611 2,66 2,748 2,751 2,771 2,738 2, , , 1,68 1,86 1,83 1,96 1,44 1,5 1,89 1,17 1,118 1,58 1, , H16 25 H17 26 H18 27 H19 28 H2 29 H21 21 H H H H25 その他 Others 都市計画税 City planning tax 固定資産税 Property tax 法人市民税 Corporate resident tax 個人市民税 Private resident tax Change in ratio of tax revenue Tax revenue structure of each city in financial results of FY213 (%) 8, (1 million yen) (%) , , , , , , 2 1, 1 H16 24 H17 25 H18 26 H19 27 H2 28 H21 29 H22 21 H H H Sapporo 札幌 Sendai 仙台 千葉 Chiba Yokohama 横浜 Kawasaki 川崎 名古屋 Nagoya 京都 Kyoto 神戸 Kobe Hiroshima 広島 Kitakyushu 北九州 Fukuoka 福岡 Sapporo 札幌市 Average of government-ordinance 政令市平均 designated cities 個人市民税 Private resident tax Corporate 法人市民税 resident tax Property 固定資産税 tax City 都市計画税 planning tax その他 Other Percentage 歳入に占める割合 to revenue 17

18 General Account Closing in FY213; Expenditure The total expenditure was 842 billion yen, increased by.6% year-on-year. While mandatory expenses decreased the first time in seven years due to the decrease in personnel expenses and debt service costs, the investment expenses increased due to the redevelopment costs for the city center, the seismic retrofitting of schools, etc. 1, 9, 8, 7, 6, 5, 4, 3, 2, 1, (1 million yen) Change in expenditure of general accounts 8,3 7,882 8,172 8,241 8,245 8,371 8,42 7,644 7,588 7, ,228 1, , , , ,733 3,735 3,722 3,83 3,882 3,987 4,295 4,371 4,437 4, H16 25 H17 26 H18 27 H19 28 H2 29 H21 21 H H H H25 その他 Others 投資的経費 Investment expenses 繰出金 Money drawn 投資 出資 貸付 Investments and loans 物件費 Property costs 義務的経費 Mandatory expenses Comparison of expenditure of government-ordinance designated cities (ordinary accounting basis) Sapporo Sendai 仙台Saitama さいたまChiba 千葉Yokohama 横浜Kawasaki 川崎Sagamihara 相模原Niigata 新潟Shizuoka 静岡Hamamatsu 浜松Nagoya 名古屋Kyoto 京都Osaka 大阪Sakai 堺Kobe 神戸Okayama 岡山Hiroshima 広島Kitakyushu 北九州福岡Fukuoka 熊本Kumamoto 政令Average of governmentordinance designated cities 市平均18 1% % 札幌 その他経費比率 Ratio of other expenses Ratio of investment expenses Ratio of mandatory expenses 投資的経費比率 義務的経費比率

19 Mandatory Expenses Social assistance expenses have continued to be on the increase due to the increase in livelihood assistance expenses, etc. The number of staff members have remained at a low level as compared to other government-ordinance designated cities. The personnel expenses have decreased in six consecutive years due to the review on the retirement allowance, etc., the decrease of the average age of the staff members, etc. 3, 2,5 (1 million yen) Change in mandatory expenses 札仙堺岡広北福熊政幌台山島九岡本令1,918 Personnel 2, 1,589 1,636 1,657 1,717 1,762 expenses 人件費 expense 扶助費 1,5 1,149 1,145 1,121 1,13 1, , ,39 1,5 1, 公債費 91 1, 原州市2 平均24 H16 25 H17 26 H18 27 H19 28 H2 29 H21 21 H H H H H16 25 H17 26 H18 27 H19 28 H2 29 H21 21 H H H H25 Change in ratio of livelihood assistance Number of staff members per 1, citizens (general administrative staff) ( ) (people) Sapporo Sendai Saitama さいたま2,252 Chiba 千葉Kawasaki 川崎Yokohama 横浜Sagamihara 相模2,399 新潟Niigata 静岡Shizuoka 浜松Hamamatsu 名古屋Nagoya 2,494 2,552 京都Kyoto 大阪Osaka Sakai 神戸Kobe Okayama Hiroshima Kitakyushu Fukuoka Social assistance Debt service costs Kumamoto Average of governmentordinance designated cities 19

20 Change in City Bond Issuance Outstanding Bond issuance outstanding for all accounts has decreased in ten consecutive years. As for the general account, the issuance of bonds for the extraordinary financial measures increased while the outstanding of construction bonds, etc. decreased. The bond issuance outstanding for general account, therefore, increased by 6.9 billion yen. 25, 2, (1 million yen) 21,892 21,669 21,344 2,797 2,198 19,522 18,827 18,33 17,825 17,44 17,11 15, 1, 5, 1,951 1,721 1,485 1,228 9,925 9,56 9,127 8,694 8,32 7,932 7, ,46 1,266 1,49 1,539 1,646 1,834 2,26 2,615 2,991 3,431 1,181 9,92 9,594 9,16 8,734 8,316 7,866 7,376 6,889 6,517 6,146 特別会計 企業会計 Special account - Public enterprise account General account - Bonds for the extraordinary financial measures 一般会計 臨時財政対策債 一般会計 建設債等 General account - Construction bonds, etc. 1,2 1, 札幌 23 H15 24 H16 25 H17 26 H18 27 H19 28 H2 29 H21 21 H H H H25 (1 yen) Sapporo Former 12 government-ordinance designated cities: City bond issuance outstanding per capita Sendai 仙台 Chiba 千葉 632 Yokohama 横浜 587 Kawasaki 川崎 Source: Survey of Local Public Finance in FY Nagoya 名古屋 917 Kyoto 京都 968 Osaka 大阪 73 Kobe 神戸 826 Hiroshima 広島 925 Kitakyushu 北九州 851 Fukuoka 福岡 (%) Change in ratio of debt service costs borne H15 24 H16 25 H17 26 H18 27 H19 28 H2 29 H21 21 H H H H25 2

21 Ratios for Financial Soundness Both the real debt service ratio and the future debt service burden ratio have changed for the better due to the past continuous measures for improvement. Sapporo will continuously strive to maintain its fiscal discipline to sustain a healthy level of debt. Future debt service burden ratio (%) 45 High level of debt Ratios for determining financial soundness of government-ordinance designated cities (FY213) Saitama Kyoto Kitakyushu Hamamatsu Chiba Hiroshima Yokohama Fukuoka Nagoya Sapporo Kumamoto Sendai Average of Kawasaki Niigata government-ordinance 78. Kobe designated cities Shizuoka Sagamihara Okayama Debt service ratio: Large Sakai 6.7 Cities working to achieve financial soundness Real debt service ratio (%) Change in ratio for determining financial soundness Real debt service ratio Other indices Future debt service burden ratio (%) (%) H19 29 H2 21 H H H H H Sapporo 札幌市 Average of governmentordinance 政令市平均 designated cities As for the general account of Sapporo, both the real deficit ratio and the consolidated real deficit ratio have become Minus (No deficit has occurred). As for the all the public enterprise accounting, their lack of funds ratios have become Minus (No deficits have occurred) H19 29 H2 21 H H H H H 札幌市 Sapporo Average of governmentordinance 政令市平均 designated cities 21

22 Status of Funds 21 funds were established. As of the end of FY213, the outstanding balance was roughly 32.3 billion yen. Sapporo has not carried out any loans or reversals on the funds that have deviated from the purposes of establishing the funds billion yen for 21 funds in total Sinking fund Established in September 1978 Having built up the fund in compliance with rules, and the balance has grown steadily. 2, 1,5 Change in sinking fund balance (1 million yen) billion yen Land development fund The cash portion that exceeds the fixed amount (2 billion yen) can be used for fiscal resources. Urban development fund Established in September , 5 1,379 1,537 1,68 1,691 1,181 FY29 21 年度 FY21 22 年度 FY 年度 FY 年度 FY 年度 Established in March 1989 Having used as the fiscal resource for large-scale projects, etc. Change in fiscal adjustment fund Fiscal adjustment fund 2 (1 million yen) 66 billion yen 28 billion yen 17.5 billion yen 21.7 billion yen Other funds Established in April 1964 Having retained the amount exceeding the level of balance (about 1 billion yen) set up in the plan to promote administrative and financial reforms. No loans to general accounts or reversals that deviated from the fund purposes have not been carried out FY29 21 年度 FY21 22 年度 FY 年度 FY 年度 FY 年度 22

23 Special Account (National Health Insurance Account) / Invested Organizations ( Dissolution of Land Development Corporation) There are seven special accounts in Sapporo. The national health insurance account eliminated the cumulative deficit in FY29, and has remained in surplus after that. The Land Development Corporation in Sapporo was dissolved in April 214, and its liquidation was completed in August 214. Accordingly, there is no need to issue third sector bonds any more. 1 Change in cumulative deficit and tax collection rate of the national health insurance account The full amount of the cumulative deficit was eliminated at the settlement of accounts in FY29 due to the increase in revenue such as the improvement of the tax collection rate, etc. The tax collection rate has risen continuously since FY29 through taking preventive measures for insurance premiums in arrears. (1 million yen) % 87.9% 84.1% 85.9% 83.% 83.% % 9.4% 89.4% 9.1% 88.5% H15 23 H16 24 H17 25 H18 26 H19 27 H2 28 H21 29 H22 21 H H H Cumulative deficit Tax collection rate in 累積赤字額現年収納率 Change in money drawn in the national health insurance account (1 million yen) amount each fiscal year % 9% 88% 86% 84% 82% 8% 78% Measures taken for invested organizations reform Reform plan for invested organizations (FY25 FY28) New Policies for invested organizations reform (from FY29) Integration & consolidation, etc. Financial participation Human participation (Sep. 25) 38 organizations (FY25) 52 billion yen (April 25) 182 people A (April 213) 32 organizations (FY213) 28.8 billion yen (April 213) 46 people [Decreased by 6 organizations] [Decreased by 23.2 billion yen] [Decreased by 136 people] Dissolution of Land Development Corporation The dissolution of Land Development Corporation was determined to be completed by FY214 based on the Reform Plan for Sapporo Land Development Corporation (March 26) formulated in response to the Reform Plan for Invested Organizations. The dissolution was completed in April 214 as a result of carrying out the abolition of advance acquisition (26), the completion of termination of temporary staff (28), and the completion of debt repayment from Sapporo (213) in series. H15 23 H16 24 H17 25 H18 26 H19 27 H2 28 H21 29 H22 21 H H H For measures for mitigation of For measures for elimination 保険料軽減対策分 For 制度分 system 累積赤字解消分事務費分等 insurance premiums of cumulative deficit For administrative fee, etc. The liquidation was completed without issuing the reform promotion bonds such as for the third sector, etc. (August 214) 23

24 Public Enterprise Accounting As a result of dealing with the management improvement, both the operating balance and the current balance of the urban rapid railway business (subway) became surplus in FY26. Based on the management reform plan (from FY211 to FY22), the balance of revenue and expenditure of the central wholesale market business is anticipated to become surplus in FY219. Change in balance of revenue and expenditure in public enterprise accounting (1 million yen) 16 Hospital 病院 Central 中央卸売市場 wholesale market Railway 軌道 Urban 高速電車 rapid railway Waterworks 水道 Sewage 下水道 H21 21 H H H H25 Total funds held in public enterprise accounting (as of the end of each fiscal year) (1 million yen) H H Hospital Central 病院 wholesale 市場軌道高速電車 railway 水道下水道 market Railway Urban rapid Waterworks Sewage To deal with management improvement of the urban rapid railway business. Achieved the improvement of balance of revenue and expenditure in the amount of 28.6 billion yen cumulatively from FY24 to FY213 owing mainly to full outsourcing of station operations and switch to one-man operations The outstanding of corporate bonds has tended to decrease as major construction projects have already been completed. (1 million yen) , 5, 4, 3, 2, 1, S S S Change in balance of revenue and expenditure H1 営業収支 H3 H2 H5 H4 H7 H6 H9 Current 経常収支 balance Change in year-end outstanding of public enterprise bonds (1 million yen) S S S S S S S S Operating balance H8 Construction Bonds for special Equalization 建設債 measures 特例債平準化債緩和債 bonds S S S S S S S S S bonds H H H13 21 H12 2 H14 22 Debt alleviation bonds Returned to net surplus H15 23 H17 25 H16 24 H18 26 H19 27 City bond outstanding has declined. H2 28 H21 29 H22 21 H H H

25 Track Record of Bond Issuance Bonds have continued steadily to be issued in the amount of more than 1 billion yen every fiscal year. Developing the products that have met market needs by issuing bonds with diverse maturities. Fiscal loan funds 6% Bonds underwritten by banks, etc. 22% Joint issued bonds 12% Track record of city bond issuance in FY213 All accounts Japan Finance Organization for Municipalities funds 2% Procurement amount of all accounts 194 billion yen Public offerings 59% Public bond offerings 71% Track record of public bond offerings by maturity 3-year bonds 2-year bonds 5% 15% 15-year bonds 11% 1-year bonds (jointly issued) 23% Total 116 billion yen 5-year bonds 23% 1-year bonds (public offering) 23% 1,4 1,2 1, 8 Track record of issuance by FY (by maturity) (1 million yen) H21 21 H H H H25 共同 2 年 3 年 5 年 1 年 15 年 2 年 3 年 Joint 2yrs 3yrs 5yrs 1yrs 15yrs 2yrs 3yrs Year. month Maturity [years] Announcement date June 5 June 7 July 5 Aug. 9 Aug. 7 Nov. 13 Dec. 6 Jan. 31 Feb. 7 March 6 March 7 May 16 June 6 July 4 Aug. 8 Aug. 28 Issue date June 14 June 28 July 3 Aug. 2 Aug. 3 Nov. 29 Dec. 26 Feb. 26 Feb. 28 March 17 March 28 May 27 June 3 July 29 Aug. 29 Sep. 22 Issue amount [1 million yen] Coupon rate [%] Spread over JGBS [bp] Type Nationwide Nationwide Citizen participation Nationwide Nationwide Nationwide Nationwide Citizen participation Nationwide Nationwide Nationwide Nationwide Nationwide Citizen participation Nationwide Nationwide 25

26 Time Schedule for Bond Issuance Continuing to implement public bond offerings with 5-year or 1-year maturity. Sapporo will center on the issuance of 2-year bonds by setting a flexible ceiling of 3 billion yen in this fiscal year as well. The bond issuance will be carried out flexibly given then prevailing market conditions shall be taken into consideration. Schedule for public bond offerings issuance in FY214 Time schedule FY214 1Q 2Q 3Q 4Q (1 million yen) April May June July Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. To be determined Public bond offering 1-year bonds year bonds Flex 3 1 (2yrs) 1 (15yrs) 1 Mini public bonds (3-year) Jointly issued city bonds Total public bond offerings 1,

27 Bond Issuance Management and Creditworthiness An external credit rating agency (Moody s) has awarded 平成 11 us年度より東京都内の the same rating as JGBs, evaluating a high creditworthiness. For ensuring stable fund procurement, the system has IR 説明会を毎年実施 been established to emphasize the dialogue with markets at various phases during bond issuance management (IR, issuance, debt management). Moody s Japan Aa3 (Double A three) [Outlook: Stable] * Same rating as JGBs Baseline Credit Assessment (BCA) for municipalities: a1 Catalysts supporting our rating The continued decline in outstanding debt, and the initiatives to deal with the reduction in overall expenditures including public enterprise accounting and the relevant actual achievements. The strong systematic framework such as the monitoring on local finance by the central government and the financial adjustment system. Having carried out the IR presentation Meeting in Tokyo annually since 29. Acquiring ratings. Improving homepage. Proactive disclosure Sapporo City bond rating (Moody s: As of October 31, 213) Rating BCA Government-ordinance Prefecture designated city a1 Sapporo Shizuoka Hamamatsu Shizuoka HIroshima Aa3 Sakai Fukuoka Fukuoka a2 Nagoya Kyoto Osaka Niigata Systematic reserve and Having established the balance management reliable sinking fund in compliance with reserve rules. To alleviate a burden on future generation by suppressing new issuance amount. Effective IR activities Debt management IR Issuance Transparent fund procurement Procuring funds stably while keeping close dialogues with markets. Bond issuance with diverse maturities to meet market needs. Having continuously issued bonds for more than 1 billion yen every year. Improvement of marketability To procure the funds from open market centering on public bond offerings. Agile, flexible and consistent bond issuance management 27

28 Contact Information for Sapporo City Bonds General Affairs & Fund Management Section, Finance Department, Finance Bureau, Sapporo TEL : FAX : kousai@city.sapporo.jp URL : Sapporo Public Office Top Page Municipal government information Fiscal, City Bonds, IR The purpose of this presentation document is to provide an explanation of Sapporo s fiscal and administrative conditions to those investors considering the purchase of Sapporo municipal bonds. This does not constitute an offer to sell or a solicitation of an offer to buy the specified bonds. 28