A municipality may establish a merit system in connection with the appointment of any municipal official or employee not elected or appointed under the Maryland Constitution, public general law, or public local law. In accordance with § 4–303 of the State Personnel and Pensions Article, a municipality may request and use the facilities of the Department of Budget and Management in the administration of a merit system established under paragraph (1) of this subsection. A municipality may set the compensation of municipal officers and employees. A municipality may provide for: a retirement or pension system or a group insurance plan for its officers and employees; or including its officers and employees in any retirement or pension system operated by or in conjunction with the State, on the terms and conditions set forth in State law. Subject to paragraph (2) of this subsection, a municipality may provide for the removal or temporary suspension from office of an appointed municipal officer for: inefficiency; malfeasance; misfeasance; nonfeasance; misconduct in office; or insubordination. Before removing or suspending any officer, the municipality shall notify the officer and conduct a hearing. A municipality may provide for filling the vacancy caused by the removal or suspension. Subject to its municipal charter, a municipality may provide for special elections for municipal purposes at times and places determined by the municipality.