Salisbury council approves side letters with three bargaining units, council members warn of $1.3M budget gap

The Salisbury City Council on June 16 approved a resolution confirming the city's authority to execute side letters with three collective bargaining units that, according to city staff, obligate the city to roughly $1.3 million in pay increases beyond amounts included in the mayor's proposed fiscal 2026 budget.

The measure, resolution 3414, passed on a roll-call vote after extended discussion about budget impacts and whether the side letters should have been brought back for more funding detail. City staff said the side letters avoided arbitration with the unions but exceeded the mayor's budgeted figures.

"These side letters are higher than what was allocated in the mayor's budget," said a staff member involved in negotiations, identified in the meeting as Mr. Kittrell. "We were able to avoid arbitration with all three of them. With these side letters, yes. They each of them are higher than what was allocated in the mayor's budget. ... This is to say that we are obligating ourselves to those pay increases in the side letters." (Mr. Kittrell)

Council members pressed staff on how the city would cover the added cost. "If we combine those two in a singular year, it would eat up the entire increase of this year's budget," said Councilwoman DeShield, who said she opposed signing an additional obligation without a funding plan. The mayor's office and city staff said there are several options under consideration, including drawing on fund balances, identifying operating or capital reductions, or recognizing one-time county fire-service back-payments that the city expects to receive in this and the next fiscal year.

City staff said the county has committed to paying $3 million in back payments for the fire-service agreement; $1.5 million of that would arrive in the current fiscal year and $1.5 million next year. Staff emphasized that the side-letter resolution does not itself appropriate funds. "This is just saying that we have the ability to offer those salaries and then we will decide you all will have to decide at a later time how to actually fund those increases," a staff speaker said.

Some council members urged caution. "This is how you get into a position where you're getting ahead of your skis," one council member said, noting recent wage increases and the city's limited ability to sustain additional recurring wage obligations without corresponding revenue.

After discussion, council confirmed the resolution on a roll call. Councilwoman Gregory, the council vice president, Councilwoman Jackson (who said she was "hesitant, but..." would vote aye), Councilwoman DeShield and the council vice president recorded aye votes in the roll call read for the record; the chair also voted aye.

The resolution instructs staff to finalize and execute the side letters; it does not include a funding source. City staff told the council they plan a follow-up budget amendment or other fiscal action to identify the revenue or reserves to cover the increases.

The council discussion also raised procedural questions about when side letters should be negotiated and when final funding decisions must be presented in public. Several council members asked whether the matter should have been tabled pending a charter interpretation on whether the city can incur the expense before identifying a revenue source.

What happened next: The council voted to approve resolution 3414. Staff said they will return with options for funding and a potential budget amendment to cover the increases.

Ending: Council members and staff agreed the issue will require follow-up budget work and that the city must decide how to recognize or offset the recurring cost ahead of the next fiscal year.