Anaheim approves $45 million police contract ahead of bond payoff

The Anaheim City Council unanimously approved a three-year police union agreement Tuesday that will cost taxpayers $45 million and increase wages by nearly 17%, according to Voice of OC. The vote came ahead of an expected bond payoff that would free up $120 million for the city’s general fund.

The agreement adds labor costs as Anaheim prepares to decide how to use revenue now committed to Disneyland Resort expansion bonds. Officials previously said nearly half of the expected $120 million would be needed to cover the city’s budget deficit, Voice of OC reported.

The council approved the contract without public discussion through its consent calendar, according to Voice of OC. It also added nearly $10 million to the current fiscal year’s budget to cover the agreement’s costs for that period, though the report said the specific funding source was unclear.

The agreement covers more than 400 union employees and runs through June 30, 2029. It provides a 6% raise retroactive to June 2026, a 4% increase in summer 2027 and another 6% increase in 2028. Benefits include five days of paid bereavement leave, 10 additional floating holidays and increases in longevity, specialty-assignment and certification incentive pay.

Anaheim city spokesman Mike Lyster said in a Wednesday email that funding options included hotel-stay revenue, savings elsewhere in city operations, reserves and money released by retiring the bonds, Voice of OC reported. He said the city would manage other approved contracts similarly.

The $510 million bond issue financed the Mickey & Friends parking garage and other infrastructure for the resort expansion. The bonds are expected to be paid off in 2027, when the publicly funded garage would transfer to Disney and $120 million would become available for general-fund use, according to Voice of OC.

Anaheim used parking-structure sale proceeds and reserves to close a roughly $45 million gap in its current budget. Its five-year forecast projects a $57 million surplus next fiscal year and roughly $85 million in fiscal 2030-31, but excludes potential salary adjustments under labor agreements and a recession or other economic changes, the publication reported.

The police department accounts for about 39% of the general fund, with an allocation exceeding $224 million, according to Voice of OC. The new agreement replaces a police labor contract expiring in 2026.

Lyster said the council is expected to consider how to use the freed-up revenue, including possible staffing and service expansions, facilities, stronger reserves and payments toward remaining city debt, according to Voice of OC.