Anaheim officials have approved a new contract with the police union, granting a nearly 17% wage increase for police officers over the next three years. This agreement will cost city taxpayers $45 million. The unanimous vote by Anaheim City Council members occurred on Tuesday as part of the consent calendar, a section typically reserved for routine city business, and without any public discussion.
The approval comes just months after city officials warned that this year’s budget deficit was projected to consume nearly half of the $120 million in new revenue. This new revenue is expected to become available once the 1997 Disneyland Resort expansion bonds are paid off early.
City Spokesman Mike Lyster stated that the cost of the new contract would be covered by "available resources" within the budget. These resources could include hotel-stay revenue, especially if it exceeds expectations, internal savings across other city departments, and, if needed, funds from reserves or the revenue freed up from the retirement of the bonds. Lyster added that other approved contracts would be managed similarly. He also indicated that the City Council is expected to consider options and strategic planning for using the freed-up money, which could include expanded staffing, services, facilities, enhancing financial reserves, or addressing other city debt obligations.
The $510 million in bonds, issued almost 30 years ago, funded the construction of the Mickey & Friends parking garage for Disneyland and other infrastructure improvements related to the California Adventure expansion. These bonds are anticipated to be fully paid off next year. This payoff will result in the publicly funded parking garage being transferred to Disney, and city coffers receiving a projected $120 million in discretionary funds. This sum, previously described by city leaders as a windfall, is intended for the general fund, which is the city’s most flexible pool of money used to pay for critical community services.
Last summer, city officials had stated that half of this expected revenue would be used to address the city’s current budget deficit. Council members had previously closed a roughly $45 million spending gap by utilizing funds from a parking structure sale and drawing from reserves to balance the budget. In this year’s budget, officials project a positive financial forecast, anticipating a roughly $57 million surplus next fiscal year, which is expected to grow to about $85 million by the 2030/31 fiscal year.
However, budget documents also note that these financial projections do not account for increasing labor costs or potential recessions. Specifically, the forecast does not include salary adjustments for labor contracts that have either expired, are due to expire, or are currently under negotiation. It also omits future adjustments from a citywide classification and compensation study. Contracts for the police union are set to expire in 2026, while those for fire and municipal employee unions are due next year.
The new agreement for police officers is slated to last until June 30, 2029. It grants members a 6% retroactive raise effective from June of this year, followed by a 4% raise next summer, and another 6% raise in 2028. Due to compounding interest, these raises amount to approximately 16.85% over the three-year period. The police union represents more than 400 employees.
Beyond salary increases, the agreement provides 5 days of paid bereavement leave, 10 additional floating holidays, longevity pay, higher pay for specialty assignments, increased incentive pay for Police Officer Standards & Training certification, and paid leave for industrial accidents and separation.
Anaheim is not alone in Orange County in facing challenges with funding police officer raises. Cities across the county are dealing with growing structural budget deficits, partly driven by rising costs and stagnant or declining tax revenue. Costa Mesa officials approved pay increases for their police officers last month amidst their own budget difficulties. Huntington Beach leaders initially delayed an 18% wage increase for police officers over three years due to affordability concerns, but later narrowly voted to approve it. In Santa Ana, officials approved a $27 million contract with the police officer association in 2024, despite concerns over an expiring sales tax increase, which elected officials are now asking voters to continue indefinitely.
In Anaheim, the police department receives the largest portion of the city’s general fund, accounting for 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, the source of this additional funding remained unclear.
The approval of this new contract in Anaheim comes three weeks before the November election. The Anaheim Police Association, the union involved, has contributed nearly $50,000 to a political action campaign that has so far spent over $54,000 in support of Councilwoman Natalie Rubalcava’s reelection campaign. Separately, the union has suspended its endorsement of Mayor Ashleigh Aitken’s reelection campaign amid allegations against her, which Mayor Aitken has denied.
