Emeryville council adopts mid‑year budget amendments, flags future revenue options after Sutter Health sale

The Emeryville City Council voted unanimously on Tuesday to adopt mid‑year amendments to the fiscal year 2024–25 budget across city funds, accepting a package of adjustments prepared by staff and finance consultants that reflect revised revenue estimates, grant awards and capital project changes.

Why it matters: council and staff highlighted a recently announced one‑time sale of surplus biomed property to Sutter Health that produced roughly $11.23 million in proceeds and will delay the need for additional transfers from capital and reserve funds into the general fund for one year. However, staff cautioned that Sutter Health is a nonprofit and, once it takes title, will be exempt from property and business license taxes; the city is still estimating the size and distribution of that tax loss across the general fund and the successor agency.

The amendments staff presented include updated revenue and expenditure figures for multiple funds, newly secured grants that fully fund the Fortieth Street multimodal project (including an MTC award of $13.1 million and a VRF award of $8.2 million), revised business license and investment income estimates, and continued attention to declining business license renewals this year. Finance consultant Brian Mora (RGS) told the council staff is also preparing a cost allocation and fee study RFP and will continue analytical work on sales tax and utility tax revenue projections.

Staff noted the following budget strategies and concerns: establishing a 20% target for the general fund unassigned balance, reallocating residual property tax to the general fund, drawing from the city’s economic uncertainty reserve for one‑time needs, and monitoring long‑term sustainability because one‑time proceeds (like the Sutter sale) do not solve multi‑year structural shortfalls. Mora said the city’s merged economic uncertainty reserve would remain above current targets but that future years will require either revenue measures or spending reductions unless new recurring revenues are found.

Council discussion touched on potential revenue measures (including changing the utility users tax rate and adding streaming/video into the tax base), the difficulty of passing utility taxes, and the need to use one‑time proceeds conservatively. The council directed staff to return with more detailed analysis at an upcoming budget study session.

"The Sutter sale gives us breathing room this year," Mora said, "but it is a one‑time event and we must consider longer‑term revenue and expense strategies." The council voted 5–0 to adopt the amendments (Council Member Pfeiffer, Council Member Solomon, Council Member Welch, Vice Mayor Carr, Mayor Mora).