Town Manager Michael Driscoll received a 2.5 percent pay increase in Fiscal 2012, making his salary $148,292 this year after the Town Council approved the raise Tuesday night.
Town Council President Mark Sideris said Driscoll has kept Watertown in good financial standing despite the economic downturn.
"We have been well served by the Town Manager's guidance as we have gone through some of the most difficult financial times in history," Sideris said. "I am glad to see that the Town Council and the Town Manager agreed to a contract extension through June 30, 2014."
Councilor John Donohue commended Driscoll for keeping the town budget balanced without having to go to voters for a Proposition 2-1/2 override.
Town Council Vice President Steve Corbett said he thought the increase was fair.
"He had to years of 0 percent increase, consistent with other employees, and 2.5 percent in FY '12, which is also consistent with other employees," Corbett said. "I think the manager deserves the increase."
Driscoll's salary is in the same range as town managers in comparable communities, said Town Councilor Vincent Piccirilli.