In an hours-long discussion that devolved into finger-pointing and frustration, Huntington Beach leaders clashed over a proposed three-year contract with the police union that would give officers raises costing the city about $10 million.
The main point of contention was whether funding a 17% wage increase over the three years would send the city, already facing a $15.6 million structural deficit, into bankruptcy.
Under the tentative agreement, the 259 officers represented by the Huntington Beach Police Officers Association would receive an 8% bump the first year, retroactive to July 1, followed by an additional 4% in 2027 and 5% in 2028.
The proposed agreement was introduced to the council Tuesday night, Aug. 18, with a brief outlining of the annual increases by city staff.
At the meeting, Councilmember Don Kennedy presented a financial analysis of the contract that he had asked a member of the city’s Finance Commission to prepare. The findings he shared sparked debate.
If the raises are approved, the commissioner estimated that police staffing could cost the city $20 million, which could increase the projected budget deficit from $18.8 million to $47.6 million over the next five years. That cost would rise to more than $30 million should the Fire Department request a comparable pay bump.
The city currently spends two-thirds of its $327 million general fund budget on public safety, much of it covering overtime, the report said. The top 50 highest-earning officers in Huntington Beach make an average of $326,000 a year in compensation, including overtime, the third highest in the county after Anaheim and Irvine, according to the analysis.
City Treasurer Jason Schmitt said he reviewed the report on short notice and warned that, if the analysis is correct, the city faces looming insolvency should the raises be approved.
“Given our current reserve levels, this (contract) would require us to declare a fiscal emergency and potentially file for Chapter 9 bankruptcy,” he said.
Kennedy said the findings are alarming and warranted consideration.
“I can love public safety and think we have (done) an incredible job — crime is down, homelessness is down, people love Huntington Beach,” he said, “but I still have to be a fiduciary with our public tax dollars.”
In a close 4-3 vote, the City Council directed staff to take a deeper look at the financial implications of the police contract before voting.
Over the next two weeks, the Finance Commission will create a subcommittee to examine the impact of the proposed pay bump on the city’s general fund and provide recommendations to avoid bankruptcy concerns. The council also directed the city manager, the chief financial officer and the city treasurer to prepare five- and 10-year forecasts of the city’s financial health “in light of the police MOU and upcoming labor contracts, unfunded pension liabilities and reserve levels.”
The vote triggered a heated argument on the dais.
Councilmember Chad Williams called the analysis Kennedy shared “suspect” and questioned whether it was appropriate for one finance commissioner to weigh in on the contract.
Through pointed questioning from Williams, Huntington Beach Police Chief Eric Parra and Fire Chief Eric McCoy confirmed they were not asked to review or verify the data presented.
“My question to the city manager is, ‘Is it not wildly inappropriate to be going to the city treasurer to do the costing?’” Williams said. “Would this not fall to the finance department and the heads of the department with fire and police?”
Williams said Huntington Beach ranks at the “bottom of the barrel” for base pay and total compensation compared to other police associations in the county.
“This is procedural sabotage,” he said, noting that the city has been in negotiation with the police union for more than 10 months. “The opportunity to kick this back to the Finance Commission was many months ago.”
Councilmember Andrew Gruel said a higher base salary would attract more officers to the department, filling vacancies and reducing overtime costs. The police budget of 30% of Huntington Beach’s general fund is similar to police spending in neighboring cities, Gruel said.
“The idea that Huntington Beach is devoting some extraordinary share of resources to policing simply isn’t supported by the numbers,” he said.
Multiple officers spoke in support of the tentative contract. Detective Read Parker said the department’s staffing levels have dropped significantly in the past couple of decades he’s worked there.
“Making the Huntington Beach Police Department competitive in today’s job market sends a clear, straightforward message that our city values its police officers and is committed to supporting them,” he said. “The reality of police recruiting today is more challenging than ever.
“Without competitive compensation and benefits,” he said, “departments simply fall behind.”
Gruel and Williams argued the report presented Tuesday doesn’t account for significant savings the police and fire departments have pledged to make, including a 5% reduction in overtime amounting to $430,000. Potentially filling some 25 already budgeted vacancies, worth $4 million a year, could also help reduce OT, the councilmembers said.
The two also said the city needs to approve a new contract soon because the current memorandum of understanding with the police union expired June 30.
Williams suggested voting on the contract next month without waiting for the analysis from the commission, but only Gruel and Gracey Van Der Mark were in favor.
Mayor Casey McKeon, along with councilmembers Pat Burns and Butch Twining, supported Kennedy’s idea to authorize and review the financial impact report.
“I want to be able to pay all our employees,” Burns said, “but, man, I just don’t like not being able to pay appropriately or going into debt doing it.”
The City Council is set to review the Finance Commission’s findings and vote on the police contract Sept. 1.