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Cary council unanimously restores 5% average merit pool, funds reallocated from existing budgets
Summary
Following debate and acknowledgment of a prior miscommunication, Cary Town Council voted unanimously to restore the FY2026 merit pay pool from an average 3% to 5%, funding the increase by reallocating existing appropriations and a utility‑to‑general fund transfer.
The Cary Town Council voted unanimously on Feb. 5 to restore the town's pay‑for‑performance merit pool to an average 5% for fiscal year 2026, reversing a prior reduction that council members said stemmed from a miscommunication.
Interim Town Manager Russ Overton presented a funding plan that reallocated existing appropriations rather than raising new taxes. The package included $500,000 from contracted services in the town manager's office, $450,000 from midyear appropriations, $250,000 reallocated from travel and training, smaller departmental reallocations and a $750,000 transfer from the utility fund, together raising roughly $1.75 million to move average awards from about 3% to 5%.
"This is a reallocation to existing resources," Overton said, asking council to recognize the transfer and approve the reallocation. Council members repeatedly praised staff work, particularly recent emergency response, and framed the restoration as both a correction of a mistaken prior decision and an investment in retention.
Multiple members said they regretted the earlier vote and called the restoration "the right thing to do." Council members emphasized the budgetary tradeoffs involved — deferring noncritical capital projects and shifting contracted‑services dollars — and asked staff to reexamine the town's merit policy so future awards align with retention and equity goals.
Finance staff confirmed the action would be funded within the current year by reallocating existing appropriations; officials said the town would discuss longer‑term compensation strategy as part of the FY2027 budget process.
The motion was made and seconded and carried unanimously with no recorded dissent.
Council also said it will form or extend an implementation group to track the policy changes auditors recommended and to formalize any changes to pay‑for‑performance criteria before the next budget cycle.
