A City Council divided over whether the cost could push Huntington Beach toward bankruptcy decided Tuesday, Sept. 1, to give police officers $9.8 million in raises over the next three years.
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In a split 4-3 vote, the council approved a new contract with the Huntington Beach Police Officers Association that includes a 17% pay bump for police rank-and-file through June 2029. Officers will receive an 8% raise retroactive to July 1, followed by an additional 4% in 2027 and 5% in 2028.
Councilmembers Andrew Gruel, Butch Twining, Gracey Van Der Mark and Chad Williams voted for the memorandum of understanding; Mayor Casey McKeon, along with councilmembers Don Kennedy and Pat Burns, were against.
Following a heated meeting two weeks earlier, the council clashed again over whether it’s prudent to increase law enforcement spending amid a $15.6 million structural deficit. The police budget currently comprises 30% of the city’s general fund.
The Finance Commission, at the council’s direction, had prepared 5-to-10-year projections of the city’s budget and bankruptcy risk in light of upcoming contract negotiations with public sector unions, unfunded pension liabilities and reserve levels.
The police contract could increase the city’s annual deficit by $2.7 million this year and by $7 million in 2035, according to forecasts presented Tuesday. The deficit is projected to reach $90 million in a decade’s time.
The city has just under $100 million in reserves, which the commission said covers about three and a half months of general fund spending.
“Based on the financial analysis we just went through, we don’t have a way to pay for it,” McKeon said of the police contract. “Unfortunately, this just increases the velocity of our deficit.”
Burns, a former officer himself, said the contract was “fiscally reckless” and fails to address a litany of issues around staffing, overtime and officer burnout.
“I’d love to pay these guys as much as we can,” he said, “but we can’t pay them this much.”
Gruel and Williams disagreed with the idea that the city’s on the precipice of financial catastrophe.
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“You’re a financial doctor … and Huntington Beach comes into your emergency room, are you rushing us into surgery or are you telling us to take some Claritin and come back in a week?” Gruel asked CFO Zach Zithisakthanakul.
“I would say more of a PCP,” Zithisakthanakul responded, referring to seeing a primary care physician.
Zithisakthanakul said the projected deficits require close monitoring but do not indicate “immediate fiscal distress.” He added that the city would implement “various countermeasures and corrective measures” before it reaches a fiscal emergency.
“What our forecasts identified today is a structural imbalance: recurring expenditures projected to exceed recurring revenues,” Zithisakthanakul said. “But a projected structural imbalance is not the same thing as insolvency, and it’s not an indicator that instability is a predetermined outcome.”
The Finance Commission proposed various solutions to help the city avoid bankruptcy, including raising parking fees, exploring corporate sponsorships to boost ad revenue and implementing various tax increases. A 1% local sales tax, which would require voter approval, could generate more than $46 million a year for the city, the commission estimated.
Williams noted that the Police Department has pledged to cut spending by nearly $8 million a year by reducing overtime by 5%, defunding 13 officer positions and filling 25 vacancies.
“The police are contributing back,” he said. “They’re already fighting for us out on the streets; they shouldn’t have to worry about fighting political games in here.”
Kennedy proposed delaying a vote on the contract until after the election, but City Attorney Mike Vigliotta reminded him that the city needed to reach a decision within 30 days.
More than a dozen officers asked the council Tuesday to approve the contract, which they say will help the department attract and retain experienced officers in a shrinking workforce.
“If we’re not offering competitive pay and benefits, Huntington Beach risks being left behind,” Officer Tommy Higgs said. “That means fewer officers, greater staffing challenges and potentially losing quality candidates to other agencies.”
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