According to Section 75 of the Administrative Regulations, the institutions report on the implementation of the budget to the council once a year, based on the situation as of 30.6 June.

Attached to the agenda are the interim reports on budget implementation prepared for the general administration, education and welfare and technical committees as of June 30, 2025. Regarding group supervision, the operating reports of the companies in the municipal group are presented.

Department heads present reports from their own areas of expertise

Appendix 1 Interim Report

On September 7, 2026, the municipal government decided to initiate a cooperation procedure under Section 176, which concerned the planning of financial and payroll administration services, the transfer of functions to the company to be established, and the potential personnel impacts resulting from this.

The cooperation negotiations have been conducted in accordance with the law and the final result is that the transfer of payroll and financial administration to the company to be established will not have any impact on reducing personnel. During the negotiations, possible tasks transferred to the company and their personnel impacts, as well as the job descriptions of other employees in the financial and payroll administration department, where necessary, were discussed.

The cooperation procedure has addressed, among other things:

· the planned corporate structure and its basis;

· the planned transfer of financial and payroll administration functions and personnel to the company being established;

· the legal, economic and social impacts of the change on personnel;

· the status of personnel and the continuity of terms and conditions of employment;

· the planned date of the transition and the practical arrangements related to implementing the change; and

· options and views presented by staff.

During the spring and summer of 2026, the municipalities of Ikaalinen, Parkano and Sastamala, Kihniö and Punkalaitumen have been investigating the establishment of a joint-stock company owned by the municipalities to provide their owners and, if necessary, entities under their control with financial administration, accounting, invoicing, ledger, payroll and human resources support services, including reporting. The aim of the preparation is to form a joint stock company that improves the quality and operational reliability of services, standardizes processes and systems, and creates the conditions for transparent and cost-effective service production. The company would act as an affiliated unit of its owners and could also act as a joint procurement unit in accordance with the Procurement Act.

The municipality of Kihniö has investigated the options for organizing financial and payroll administration, and the municipal board decided in its meeting on 7 September 2026 to acquire financial administration services from the city of Ikaalinen for a fixed period from 1 October 2026 to 31 December 2027 or until the joint financial and payroll administration company of the five municipalities, KuntaAkseli, begins its operations. In connection with the investigation, the best option for organizing the long-term financial and payroll administration of the municipality of Kihniö is seen as joining the joint financial and payroll administration company of the municipalities, KuntaAkseli. For the municipality of Kihniö, this is a significant operational change in the municipality's service production, and therefore the draft decision will be considered by the municipal council.

Drafts of the founding agreement, shareholders' agreement and articles of association of KuntaAkseli Oy have been prepared for consideration by the municipal government and council. The documents form a mutually complementary whole: the founding agreement stipulates the establishment of the company, the subscription of shares and the first administrative bodies; the shareholders' agreement stipulates the mutual rights, obligations and ownership steering of the owners; and the articles of association define the key structures of the company's operations and administration. The service agreement, which will be drawn up later, defines the service production, responsibilities, service level, pricing principles and monitoring of the agreement between the client and the company.

The proposed company name is KuntaAkseli Oy and the registered office is Sastamala. The company would have 100 shares with a nominal value of 500 euros. In addition, during the establishment phase, a total of 450,000 euros would be invested by the shareholders in the company's invested equity fund (SVOP) in accordance with the Limited Liability Companies Act.

According to the draft articles of association, the board of directors would consist of a minimum of five and a maximum of twelve members. Each member would have an alternate member. The board would elect a chairman and vice-chairman from among its members, and the city of Sastamala would appoint the chairman of the board. The board would consist of office holders, as the company's operations are in practice very closely linked to the operational activities of the municipalities. The transfer of shares would be limited by a redemption clause, according to which the city of Sastamala would have the first right of redemption and after that the other shareholders would have the right of redemption. The accession of new shareholders and changes in ownership would be agreed in accordance with the articles of association, shareholders' agreement and articles of association.

According to the service agreement to be drawn up later, KuntaAkseli Oy would provide the agreed financial and payroll administration services to the client. The more detailed content of the services, division of labor, service level, schedules, responsible persons and arrangements for the implementation phase would be defined in the service description, annual service plan or other written approved annex. The aim is to provide the services at cost price.

The establishment of the company will incur costs for the municipality from the subscription price of the shares and the investment in the invested unrestricted equity fund (SVOP). In addition to the subscription price of the shares, the company will need capitalization (SVOP) to start its operations, because even before the company starts its actual service production, the company will incur significant costs, including the acquisition of systems required for service production. The desired benefits of the company model include economies of scale, shared systems and processes and expertise, better management of substitute and disruption situations, and transparency of service production costs.

Appendices 2-4

  Draft articles of association KuntaAkseli Oy 

Draft shareholder agreement KuntaAkseli Oy 

Draft articles of association KuntaAkseli Oy

Accession agreement to the shareholder agreement KuntaAkseli Oy, attached

The company's Board of Directors has proposed to the General Meeting that the company's series A and series B shares be combined into one share class so that all company shares will in future carry equal rights in the company and one (1) vote at the General Meeting.

Since the decision changes the rights conferred by series B shares, the decision's entry into force requires the approval of a majority of the shareholders of the share class in accordance with the Finnish Companies Act (624/2006).

As a result of the merger of the share series, the current ten (10) voting rights attached to the B series shares will be eliminated and all shares will carry the same number of votes in the future. No compensation will be paid for the merger.

The municipality of Kihniö has 50 series A shares and 25 series B shares. The municipality of Kihniö holds approximately 1,22% of the votes and after the reform it would be 1,16%.

According to the administrative regulations, the municipal board decides on the purchase and transfer of shares.

Attached is background information on the matter.

Appendices 5-8

According to Section 1 of the Pre-emption Act (5.8.1977/608), a municipality has a right of pre-emption in the sale of real estate located in the municipality in order to acquire land for community development and for recreational and conservation purposes. The right of pre-emption means the municipality's right to redeem the sold real estate for the purchase price agreed upon by the seller and the buyer. When using the pre-emption, the municipality takes the place of the buyer and acquires ownership of the area that is the subject of the sale under the terms of the deed of sale.

The municipality must also compensate the buyer for direct costs related to the transaction and pay interest on the costs in accordance with Section 3, Paragraph 2 of the Interest Act (633/1982). According to Section 21 of the Pre-emption Act, the municipal government decides on the exercise of the pre-emption right. The decision must be made and the registration authority, i.e. the Land Survey, notified of it within three months of the certification of the transfer deed.

The decision must be given without delay as a demonstrable notification to the buyer and seller.

Attached material: property transfer list

Real estate transfer notices:

6 property transfer notices

Official decisions:

Municipal Mayor Section 33

Financial Manager §

Audit Committee April 14.9.2026, XNUMX

Technical Committee 15.9.2026

Vitality Center: Employment report July. Kihniö unemployment rate 9,2

Hämeenlinna Administrative Court: Decision in a case concerning a deviation permit referred to in the Construction Act.