Anaheim city officials have approved a new three-year contract for police officers, encompassing a nearly 17% wage increase. The agreement, expected to cost city taxpayers $45 million, received unanimous approval from Anaheim City Council members on Tuesday. The decision was made as part of the council's consent calendar, a collection of routine items voted on simultaneously, and occurred without public discussion.
The approved contract provides for a 6% retroactive raise effective from June of this year, followed by a 4% raise next summer, and an additional 6% raise in 2028. Due to compounding interest, these adjustments result in an approximately 16.85% wage increase over the three-year period. The union, representing over 400 city employees, also secured additional benefits within the agreement. These include five days of paid bereavement leave, ten additional floating holidays, longevity pay, and increased compensation for specialty assignments. Furthermore, the contract grants higher incentive pay for Police Officer Standards & Training (POST) certification and paid leave for industrial accidents and separation. The new agreement is slated to remain in effect until June 30, 2029.
This approval comes months after city officials issued warnings regarding this year’s budget deficit, which was projected to consume nearly half of the $120 million in new revenue anticipated. This revenue is expected to become available once the 1997 Disneyland Resort expansion bonds are paid off early. The $510 million in bonds, issued almost three decades ago, were instrumental in funding the construction of the Mickey & Friends parking garage for Disneyland, alongside other infrastructure improvements associated with the California Adventure expansion.
The bond is projected to be fully repaid next year. This will result in the publicly funded Mickey & Friends parking garage being transferred to Disney ownership, and the city’s discretionary coffers receiving the $120 million in freed-up revenue. This sum is expected to flow into the general fund, which serves as the city's most flexible pool of money for critical community services. Last summer, city officials indicated that half of this anticipated revenue would be allocated to cover the city's current budget deficit. At that time, Anaheim City Council members addressed an approximate $45 million spending gap by utilizing funds from a parking structure sale and drawing from city reserves to balance the budget.
City Spokesman Mike Lyster stated that the cost of the new police contract would be covered by resources available within the city budget. These resources, as outlined by Lyster in a Wednesday email, include potential increases in hotel-stay revenue, internal savings realized across other city departments, and, if necessary, allocations from financial reserves or the newly available revenue from the bond retirement. Lyster also noted that other approved contracts would be managed similarly. He added that the City Council is expected to deliberate on various options and strategic plans for utilizing the freed-up bond money. Potential uses mentioned include expanding staffing, services, and facilities, enhancing financial reserves, and addressing other outstanding city debt obligations.
The approval of this contract also occurs in a period when numerous other labor contracts are scheduled for renewal this year and next. These anticipated increased costs have not been fully accounted for in the city's positive financial projections for the next five years. Anaheim’s current budget projections indicate a roughly $57 million surplus for the next fiscal year, which is expected to grow to approximately $85 million by the 2030/31 fiscal year. However, the budget documents explicitly state that these forecasts do not include any salary adjustments that may arise from labor contracts that have expired, are due to expire, or are currently under negotiation. The projections also do not factor in potential recessions or changes in economic conditions. For instance, police contracts expire in 2026, and contracts for the fire and municipal employee unions are set to expire next year.
Anaheim’s police department receives a substantial portion of the city’s general fund, accounting for approximately 39%, or over $224 million. As part of Tuesday's approval, city leaders added nearly $10 million to their budget to cover the current fiscal year’s portion of the new contract. As of Wednesday morning, the specific source of this additional funding remained undisclosed.
Anaheim is not unique among Orange County cities in addressing police officer compensation amidst budget considerations. Officials in Costa Mesa recently approved pay increases for their police officers despite facing their own budgetary challenges. Similarly, Huntington Beach initially delayed an 18% wage increase over three years for police officers due to affordability concerns, though a majority of its leaders later narrowly voted to approve the raise. In 2024, Santa Ana officials approved a $27 million contract with their police officer association, even as concerns persist regarding an expiring sales tax increase that elected officials are now asking voters to continue indefinitely.
The approval of this new contract in Orange County's largest city precedes a November election. The Anaheim Police Association, the police union, has contributed nearly $90,000 to a political action campaign that has spent over $54,000 in support of Councilwoman Natalie Rubalcava’s reelection efforts. Concurrently, the union has suspended its endorsement of Mayor Ashleigh Aitken’s reelection campaign, citing allegations against her which Aitken has denied.
