Without any public discussion, Anaheim officials approved a nearly 17% wage hike for police officers over the next three years as part of a new contract with the police union that will cost city taxpayers $45 million.
The approval comes months after city officials warned this year’s budget deficit would eat up nearly half of the $120 million in new revenue expected to be freed up after the 1997 Disneyland Resort expansion bonds are paid off early.
Yet Anaheim City Council members unanimously voted for the pay raise without any public discussion on Tuesday as part of the consent calendar – a block of items typically covering routine city business, like tree trimming, that’s voted on simultaneously.
It also comes as a host of labor contracts are expected to be up for renewal this year and next – increased costs that city officials have not taken into account in their positive financial projections for the next five years.
City Spokesman Mike Lyster said the cost of the contract will be covered by “available resources” within the budget including potentially from reserves or the freed up revenue from the bond.
“Those include hotel-stay revenue, particularly should we see it come in higher than expected, internal savings across other parts of the city, and, as needed, in part from reserves or revenue free-up from the retirement of bonds,” he wrote in a Wednesday email. “We would manage other approved contracts similarly.”
Lyster also said elected officials are expected to weigh how to use the freed-up money.
“We also expect the City Council to look at options, decisions and strategic planning as Anaheim looks at how to use freed-up money. Options include possible expanded staffing, services and facilities, enhancing financial reserves and addressing other remaining city debt obligations,” he wrote.
The $510 million in bonds – issued nearly 30 years ago – built the Mickey & Friends parking garage for Disneyland and other infrastructure improvements as part of the California Adventure expansion.
The bond is expected to be paid off next year, resulting in the publicly funded garage being handed off to Disney and discretionary city coffers receiving what city leaders have previously couched as a windfall of $120 million in freed up money that would hit the general fund – the city’s most flexible pool of money that pays for critical community services.
This past summer, officials said half of that expected revenue would be used to cover the city’s current budget deficit after city council members quelled a roughly $45 million spending gap by using money from a parking structure sale and borrowing from their reserves to adopt a balanced budget.
In this year’s budget, officials project a positive financial forecast noting a roughly $57 million surplus next fiscal year that is expected to grow to about $85 million in the 2030/31 fiscal year.
At the same time, officials note in the budget their projections don’t take into account increasing labor costs or potential recessions – noting contracts for police expiring in 2026 and contracts for the fire and municipal employee unions expiring next year.
“The Five-Year Forecast does not include any salary adjustments that may be considered for labor contracts that have either expired, are due to expire, or are under negotiation, nor does it include any future adjustments that may be considered as a result of the Citywide classification and compensation study. The forecast also does not contemplate a recession or change in economic conditions,” reads the document.
The Contract
The new agreement is expected to last until June 30, 2029 with members receiving a 6% retroactive raise from June this year, a 4% raise next summer and another 6% raise in 2028.
Due to the compounding interest, that drives the raises to around 16.85% over three years.
The union represents over 400 employees.
The agreement grants 5 days paid bereavement leave,10 additional floating holidays, longevity pay, higher pay for speciality assignments, increased incentive pay for Police Officer Standards & Training certification as well as paid leave for industrial accidents & separation.
Paying for Police Raises in OC
Anaheim leaders aren’t the only ones in OC struggling with how to afford raises for police officers.
Cities throughout OC are grappling with growing structural budget deficits fueled in part by raising costs and stagnant or declining tax revenue.
Officials in Costa Mesa approved pay bumps for the city’s police officers last month amid their own budget challenges, while officials in Huntington Beach initially held off on an 18% wage increase over three years for police officers amid concerns on whether the city could afford it.
But weeks later, a majority of Surf City leaders narrowly voted to approve the raise.
In 2024, officials in Santa Ana – a town where the police union is typically the biggest spender on local elections – approved a $27 million contract with the police officer association despite concerns of an expiring sales tax increase that elected officials there are now asking voters to continue indefinitely.
Like in most cities, the police department in Anaheim receives the biggest slice of the city’s general fund – roughly 39% or over $224 million.
As part of Tuesday’s approval, city leaders added nearly $10 million to their budget to help cover this fiscal year’s portion of the new contract – as of Wednesday morning it’s unclear where that additional funding is coming from.
Approval of the new contract in OC’s biggest city comes three weeks ahead of the November election in which the Anaheim Police Association – the union – has contributed nearly $50,000 to a political action campaign that so far has spent over $54,000 in support of Councilwoman Natalie Rubalcava’s reelection campaign.
Meanwhile, the union has suspended their endorsement of Mayor Ashleigh Aitken’s reelection campaign amid allegations against her of racism and homophobia – accusations Aitken has denied.
Editor’s note: Anaheim Mayor Ashleigh Aitken’s father, Wylie Aitken, chairs Voice of OC’s board of directors.
Hosam Elattar is a Voice of OC reporter. Contact him at helattar@voiceofoc.org.
