Following the resignation letter submitted Jan. 26 by Frankford police officer Nate Hudson, the Frankford Town Council announced earlier this week the Town plans to advertise for police officers.
“We didn’t want him to go, but he’s doing what’s best for him,” said Town Councilman Charles Shelton of Hudson’s resignation. “We’re going to advertise for another police chief and officer.”
“We need two to keep our town safe,” added Councilwoman Cheryl Workman.
Shelton said he plans to meet with the police committee, which was formed at the January council meeting, to discuss the advertising.
“Maybe we can get a fulltime chief, and maybe we can get some part-time people and maybe save the Town some money,” he said. “That way, we don’t have to pay a salary for two officers.”
With Hudson leaving his post in Frankford next week, Shelton said he had spoken to the Dagsboro and Selbyville police departments, who said they would help the Town with coverage as much as they can, until Frankford can hire new officers.
“Nate is leaving in a week, so we have to move on this thing pretty soon,” he said. “We’re definitely going to have to get this ball rolling.”
The council voted 4-0 to advertise for new officers.
Council approves concept for pension plan
Also at the Feb. 2 monthly meeting, the council heard a presentation from resident Marty Presley, who has 30 years of experience in the financial field and who serves on the Town’s recently formed healthcare and pension committee.
The committee, which met three times last month, consists of Council President Joanne Bacon and Councilwoman Pam Davis, along with Presley and fellow residents Liz Carpenter and Jerry Smith.
During his presentation, Presley said that, at present, the Town of Frankford pays 100 percent of the cost of health insurance for fulltime employees, as well as for the employees’ dependents.
Presley said the cost to the Town for healthcare in 2015 would be $56,108.88. Comparing the current cost to the $20,900 budgeted for 2011, Presley said there was a 270 percent increase, or 54 percent increase annually. He noted that the average increase nationally is 5.2 percent annually. He said that most of the information reviewed by the committee and presented to the council was provided by the Town’s current insurance broker.
“We are so out of whack on this as far as costs go for this four-year period,” he said.
When researching what would be best for the Town, Presley said, the Town’s broker reviewed coverage used in other municipalities.
Presley said the Patient Protection & Affordable Care Act (PP-ACA) stipulates that, if a municipality offers employee dependent coverage, whether it’s used or not used, the dependent who could be covered cannot go through the exchanges to purchase insurance and use the subsidies available.
He added that the PP-ACA does not require the Town to carry health insurance for its employees. Individuals are required to have health insurance, or face a penalty, and larger companies may have to pay an assessment if employees get insurance elsewhere and make use of one of the associated “premium tax credits” that can help offset individuals’ costs.
The committee recommended two options to the council: Keep the current healthcare plan and forego a pension plan, or change to an 80/20 split of health care premiums between employer and employee, with no additional coverage offered for dependents.
Presley noted that the federal government currently picks up 75 percent of employee costs for health insurance, compared to the 80 percent recommended for the Town of Frankford.
The committee recommended the council choose that second option, which wouldn’t preclude the Town from having a pension plan, by eliminating dependent coverage and sending those individuals to the marketplace for coverage.
“This would cost the Town $23,796 per year and additionally result in a savings of $32,204 per year for the Town,” said Presley, noting that the dependents would be able to choose what plan in the marketplace would work best for them.
The committee recommended a one-time salary gross up — an increase to the employees’ salaries — of 5 percent be implemented to cover pension costs. Presley said that, while the increase in salary would be a permanent change, future increases in healthcare costs would be the responsibility of the employee, to maintain the 80/20 split.
Based on a salary of $30,000, the preferred provider organization plan the Town’s broker recommended, which Presley said would probably be the best fit for the Town, would cost $661 per employee per month, with the employee paying 20 percent, or $132.20, of that cost.
He noted that dependent coverage on the exchange under the Silver plan would cost the employee an additional $148 per month, for a total cost to the employee of $280.20. Presley explained that, without the salary gross up, employees could be taking a financial “hit” with the change.
“What we’re proposing to do is to increase each employee’s salary by $300 a month,” he said, adding that the committee recommended implementing a 5 percent defined-contribution pension plan that would match the employee’s contributions to the plan up to 5 percent of their salary.
“Based on that $30,000 income, they would be getting a $130 a month contribution to the pension plan, for a total benefit of $430 a month.”
“I work for a very large national company, and we get 3 percent,” said Carpenter, who works in the healthcare industry. “I think 5 percent is pretty competitive.”
Presley said that the council could structure the Town’s contribution in terms of vesting.
“…To protect the Town’s money, so that if someone leaves in six months or a year, you reserve the right not to have them leave with the Town’s money, just their own,” added Carpenter.
He added that he wanted to address a recent article published in a local newspaper that paraphrased unnamed Frankford officials in stating the reason the Town had lost its two police officers was due to the Town not putting in a pension and healthcare plan.
“Everyone in this room knows that’s bogus. I don’t know anybody who doesn’t know that [former Chief William] Dudley was already prepared to leave at the end of December…
“As soon as the December Town meeting, the council wanted to vote on the Town pension plan and put that in. Of the $65,000, $55,000 would be in North Carolina right now, and this officer [Hudson] would be quitting right now. This Town would be out of $65,000. If you go with the pension plan we’re recommending, that’ll never happen.”
“I was very pleased with the work that went into that,” said Bacon, following Presley’s presentation.
Workman said the information compiled and presented was very informative.
“This is very interesting. I would like to have a chance to look over it before we make a decision,” she said.
However, the council voted 3-1, with Workman opposed, to implement the 80/20 split option as proposed by the committee, and have the plan in place no later than April 1.