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-3- <br />In this area there are currently four public employers <br />with a proposed cost -of- living increase. These are: <br />Carrboro - 3.5 percent effective 7 -1 -91 <br />Cary - 3 percent effective 1 -1 -92 <br />OWASA - 2 percent effective 7 -1 -91 and beginning a 2 <br />percent 401(k) plan contribution effective 1 -1 -92 <br />Hillsborough - 5 percent effective 7 -1 -91 <br />The City of Durham is not proposing a cost -of- living <br />increase but is proposing to increase its 401(k) plan <br />contribution for employees from 4 percent to 5 percent <br />effective January 1. [The 401(k) plan is a supplemental <br />retirement plan.] <br />4. Merit Increases <br />The second pay element in the Manager's Recommended <br />Budget is continuation of funding for the merit pay <br />program. Attachment 6 summarizes the key purposes that a <br />merit pay program serves. <br />Effective January 1, 1990 the County implemented the Work <br />Planning and Performance Review program (called WPPR). <br />Under WPPR, award of any merit increase is directly tied <br />to the employee's accomplishment of agreed -on performance <br />objectives. <br />The first year of WPPR has been a transition period from <br />the previous performance evaluation system. The first <br />year focused on the development of WPPR work plans. <br />Performance reviews under these work plans began <br />in 1991. <br />Under the Orange County merit pay plan, there are three <br />levels of merit increase that may be awarded (excluding <br />zero): a minimum of 2.5 percent, 5 percent, and a maximum <br />for Outstanding Achievement of 5 percent plus a 2.5 <br />percent lump sum bonus. <br />