How will the abritator acquire such information when municipalities do not honestly reveal their financial standings. I hope you are not considering heresay!
Arbitrators have no business considering the ability of a locality to pay for the services it wants. That is up to the voters.
I would prefer the elimination of binding arbitration, but this is the next best thing. It is foolish to award decisions when the community is unable or unwilling to support the financial demands of the arbitrator on behalf of the unions.