Anaheim officials have approved a nearly 17% wage increase for police officers over the next three years, a new contract with the police union that will cost city taxpayers $45 million. The approval occurred without any public discussion on Tuesday, passed as part of the City Council’s consent calendar, which typically handles routine city business. This decision comes months after city officials warned that this year’s budget deficit would consume almost half of the $120 million in new revenue anticipated once the 1997 Disneyland Resort expansion bonds are paid off early.
TheThe contract, which applies to over 400 employees, is expected to run until June 30, 2029. It includes a 6% retroactive raise from June of this year, a 4% raise slated for next summer, and another 6% raise in 2028. Due to compounding interest, these adjustments drive the total increase to approximately 16.85% over the three-year period. Beyond salary hikes, the agreement also grants five days of paid bereavement leave, 10 additional floating holidays, longevity pay, higher pay for specialty assignments, increased incentive pay for Police Officer Standards and Training (POST) certification, and paid leave for industrial accidents and separation.
City Spokesman Mike Lyster stated that the cost of this contract will be covered by "available resources" within the city's budget. These resources, as explained by Lyster, could include hotel-stay revenue, particularly if it exceeds projections, internal savings from other city departments, and, if necessary, from reserves or the revenue freed up from the bond retirement. Lyster also indicated that the City Council is expected to consider various options for how to utilize the freed-up bond money, such as expanded staffing, services, and facilities, enhancing financial reserves, or addressing other remaining city debt obligations.
The $510 million in bonds, issued nearly three decades ago, were used to fund infrastructure improvements including the Mickey & Friends parking garage for Disneyland, as part of the California Adventure expansion. These bonds are anticipated to be fully paid off next year. Once retired, the publicly funded parking garage will be transferred to Disney, and city coffers are expected to receive a "windfall" of $120 million in freed-up money, which will flow into the general fund—the city’s most flexible pool of money for critical community services. However, this past summer, officials had indicated that half of this anticipated revenue would be used to address the city’s current budget deficit. City Council members had previously addressed a roughly $45 million spending gap by utilizing funds from a parking structure sale and drawing from reserves to adopt a balanced budget.
Despite the recent wage hike and ongoing labor contract negotiations, city officials have presented a positive financial forecast in this year’s budget. They project a roughly $57 million surplus for the next fiscal year, which is expected to grow to about $85 million by the 2030/31 fiscal year. However, the budget document explicitly notes that these projections do not factor in potential salary adjustments for labor contracts that have either expired, are due to expire, or are currently under negotiation. This includes expiring contracts for police in 2026, and for fire and municipal employee unions next year. The forecast also does not contemplate a recession or changes in economic conditions.
The Anaheim Police Department currently receives the largest portion of the city’s general fund, accounting for approximately 39%, or over $224 million. Following Tuesday’s approval, city leaders added nearly $10 million to their budget to help cover this fiscal year’s share of the new contract. The specific source of this additional funding was not clarified as of Wednesday morning.
The approval of this new contract occurs three weeks before the November election. The Anaheim Police Association, the union representing the officers, has contributed nearly $90,000 to a political action campaign. This campaign has, in turn, 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 amidst accusations against her, which Aitken has denied.
Anaheim is not unique in Orange County in its discussions around police officer compensation. Cities across Orange County are facing increasing structural budget deficits, partly driven by rising costs and stagnant or declining tax revenue. Costa Mesa officials, for instance, approved pay increases for their police officers last month despite their own budget challenges. Similarly, officials in Huntington Beach initially delayed an 18% wage increase for police over three years due to affordability concerns, but a majority later narrowly voted to approve it. In Santa Ana, officials approved a $27 million contract with the police officer association in 2024, even as concerns lingered about an expiring sales tax increase that elected officials are now asking voters to continue indefinitely.
