Council signals intent to approve FY26 compensation increases and three union contracts amid budget sustainability concerns

Council staff presented the FY26 compensation and benefits recommendations during the April 29 Montgomery County Council session, citing a recommended total compensation cost of about $4.7 billion in the executive's March 14 operating budget and highlighting increases in general wage adjustments, retirement costs and group insurance.

Staff told the Council the executive's proposals include a 4.85% general wage adjustment (GWA) recommendation for Fraternal Order of Police (FOP) members, 3.25% for firefighters, and roughly 3% for other nonrepresented employees; a typical service increment of about 3.5% for non-top-of-grade employees; and an increase of roughly 155 FTEs over FY25. Staff also flagged retirement cost pressure and a sizable increase in group insurance and OPEB costs.

Council members thanked staff for the detailed packet but voiced concerns about long-term budget sustainability. Councilmember Balcom cautioned that repeated compensation growth above projected revenue growth places the county in a difficult position; she said the council has a "fiduciary responsibility to approve a balanced budget" and urged careful consideration of health benefit cost-sharing. Other members stressed the need to recruit and retain public servants while balancing fiscal constraints.

The Council indicated unanimous assent to the Government Operations & Fiscal Policy Committee recommendation to proceed with the pay adjustments and benefit allocations as an expression of intent. The meeting record also shows the Council taking unanimous recorded action in favor of three collective bargaining agreements presented at the meeting: McGeo, IAFF (Montgomery County Career Firefighters Association), and the Fraternal Order of Police, Montgomery County Lodge 35. Staff noted some specific fiscal items: extension of the personal patrol vehicle (PPV) mileage limit to 20 miles (estimated cost about $593,000), increases to certain shift differentials, and approximately $80,000 in equipment issuance changes in the FOP agreement.

Council staff also provided options for potential savings that the Council could consider later, including reducing GWAs by one percentage point for all groups to save about $33 million, eliminating service and longevity increments (approximate savings of $55 million), or shifting group insurance cost shares over two years (savings projected into FY28).

Next steps: the Council will continue budget work sessions and formal votes as part of the FY26 approval process; members asked staff to continue providing fiscal detail and scenario analyses for any potential adjustments.

(Reporting from the April 29, 2025 Montgomery County Council meeting.)