APEX - A plea from Apex employees convinced a divided town council to abandon a plan to give merit pay raises and instead grant across-the-board salary hikes in the 2012 fiscal year budget.

About 30 employees attended the council meeting Tuesday to make the request, saying they are having trouble covering living expenses. The issue sparked debate and strong council opinions about the value of merit pay over system-wide increases. The budget included scaled merit pay increases up to 5 percent that would benefit most but not all employees.

In the 3-2 vote, the council approved a plan to give town employees a $1,000 raise in this coming fiscal year to help offset rising expenses, such as fuel and food. Underperforming employees will not receive salary increases.

The money represents a 2 percent raise for most employees. It still does not keep up with the rate of inflation, which has risen about 5 percent since 2009.

"I think morale has gone down the last few years," said Apex Human Resources Director Eleanor Green at the meeting. "People are behind."

Among those employees whose salary isn't stretching as far as it once did is employee Shawn Conley. He said he is about $1,500 short of being able to make ends meet.

"I love it here, I want you to bring back the pride," Connelly said. "I think it's a small price to pay for employees. If you continue on this path, what is the incentive for new people to stay? I don't know how to pour my heart out, but I don't think there are employees who deserve no raise."

He pointed to other towns that had salary increases in recent years. In the 2010 fiscal year, Apex did provide a 2.1 percent merit pay increase, but no cost-of-living increase.

Debate splits council

Apex Police Chief Jack Lewis backed his employees.

"We are drastically understaffed," Lewis said. "They exemplify work ethic. We do a lot with a small staff. That so few of them would be deemed exceptional (in a merit-based system) hurts morale. It devalues people who don't deserve that."

It will cost Apex $372,373 to fund the flat raise, which is part of the $68.7 million 2012 proposed budget.

Mayor Keith Weatherly spoke out in support of the pay increase. With the tough economic times in the past two years, Weatherly said the town was focused on saving jobs and couldn't afford to give pay raises.

"Now that we have a little bit of room, I believe everyone should get something," he said. "We've asked them to take it in the chin, and now let everyone share in the revenues we do have."

Personnel committee members and Councilmen Lance Olive and Bryan Gossage voted against the system-wide pay increases. Instead the council members argued that the town's limited revenues should go to reward those who were "rock stars" in order to keep them from shopping around for other jobs.

"What is the psychological impact to a superstar when say an employee who clocks in five minutes everyday gets the same $1,000. I worry he's going to start looking," Olive said. "Top-tier performers need to be taken care of."

Olive also said there are people out there who are unemployed and people in the private sector who have not received raises of any form in the past two years.

Councilman Mike Jones took a different approach. "Normally, I'd agree with rewarding the people who do the best work except in this situation when we haven't had a cost of living increase in two years," he said.

The council has still not approved the final budget, but members agreed to include the $1,000 flat pay increase for this year and look at merit pay for next year.