VERNON -- In what are likely just the first few cost-cutting steps ahead of next year's Vermont Yankee closure, Vernon officials have frozen town employees' salaries and have instituted a hiring freeze.

The Selectboard on Monday also voted to switch Vernon's pension plan away from one that relies on guaranteed town contributions and toward an individualized, 401(k)-type plan.

The latter move is designed to shield the town from having to make big cash infusions into the pension account, as it did recently with a forced contribution of more than $500,000.

"The market hadn't been doing what the market is supposed to do, so the taxpayers had to come up with that money (for the pension plan)," Selectboard Chairwoman Patty O'Donnell said.

"Fortunately, we had a fund laying there that we were able to take that money from," she added. "But in the future, we're not going to have that. So we can't have the risk put on the taxpayer of having to come up with that money."

Vernon officials are planning a fiscal 2015 budget that will include deep cuts in light of Entergy's announcement that its controversial nuclear plant will cease producing power by the end of next year.

Vermont Yankee pays about half of the town's taxes, and that contribution is expected to significantly diminish during a lengthy decommissioning process.

The town's fiscal 2015 budget, which takes effect July 1, 2014, is subject to approval at Town Meeting in March. The Selectboard's budget recommendations are not yet finalized.

On Monday, the board announced a public budget forum scheduled for 6:30 p.m. Jan. 20 at the town office.

"What we're going to do is, at the January (forum), we're actually asking for input from townspeople," O'Donnell said. "And then we'll close the budget by the end of January, then we'll schedule a second forum once the budget's closed."

But the board in the meantime is moving forward with other expense reductions. Three members present on Monday voted unanimously to freeze wages and hiring for the next three years.

That means no hiring at all, even to fill a position that has become vacant due to a retirement or departure.

"We haven't laid anybody off yet, but the potential is there. So what we're saying is, let's take a step back and look at what we're dealing with," O'Donnell said.

"We don't know what each individual office is going to look like at the end of the day," she said. "So there's no sense in bringing people on board who we're going to have to cut in a couple of months."

In explaining the board's decision to freeze the town's salary grid, O'Donnell made reference to wages in other municipalities. As part of this budget process, Vernon administrators have been examining spending in several nearby, similarly sized towns.

"We do know that we have some of the highest-paid employees in the state," O'Donnell said.

There was some question about whether the salary freeze would gel with Vernon Police Department's union contract. But it was unclear whether the department's new contract has been formally adopted, and a union representative could not be reached for comment on Tuesday.

"We have the town attorney looking into that," O'Donnell said at Monday's meeting.

There also are changes in the works for the town's pension plan.

Vernon has a defined-benefit plan that guarantees 7 percent annual growth. So if the plan's investments don't perform well, it's up to the town to make up the difference.

That will change next year when the town switches to a "457" plan. Officials said that is similar to a 401(k) plan and relies on individual contributions.

"You'll put an amount in if you care to ... and the board will also give a percentage," town Treasurer Sally Brassor explained in response to a former employee's question.

"We don't know what (the town's contribution) is at this point. But they will offer some kind of percentage as a match," Brassor added.

O'Donnell said other municipalities are making the same change in an effort to limit taxpayer liability for pension expenses.

"You will still get a retirement, and there will still be money put in every year," O'Donnell said. "But the taxpayers are not on the hook for what happens in the market."

Mike Faher can be reached at or 802-254-2311, ext. 275.