Riverhead employees say Supervisor Sean Walter has asked them to take a 5 percent salary cut for the coming year as part of a plan to reduce a town budget deficit currently projected at $6.2 million for 2011.
Plugging that gap between revenues and expenses could require a tax rate hike of more than 20 percent, according to the supervisor.
Matt Hattorff, the president of the town’s Civil Service Employees Association, which represents most non-police employees, said salary cuts are not an option.
“Our statewide president, Danny Donohue, has issued a directive that there be no givebacks,” Mr. Hattorff said.
Although several town employees told the News-Review of Mr. Walter’s proposal, conveyed to them in two meetings on Monday, Mr. Walter would not confirm that he had asked for 5 percent salary reductions.
He said only, “We’re looking to work with the union. We’ve had some conversations with the town employees and the union and we’re making them part of the budget process.”
Asked if elected officials and department heads would be asked to take similar cuts, Mr. Walter responded, “We will be asking everybody to share equally in the pain.”
Mr. Walter said the town budget deficit had been reduced by $600,000 due to 5 percent cutbacks in department spending, along with the elimination of overtime, new purchases and reductions in contractual services.
“We have a deficit because town budgets were based on one-shot revenues for more than six years; Phil was lucky enough to keep getting one-shots,” Mr. Walter said, referring to his predecessor as supervisor, Phil Cardinale.
The 2010 budget anticipated about $800,000 in revenue from the sale of the town-owned East Lawn building on East Main Street, and from a lawsuit settlement involving allegedly illegal land clearing on Route 58. Neither infusion of cash appears likely to happen.
The supervisor said he still anticipates using some of the remaining $7 million in town reserve funds to offset the need for more tax revenues in the 2011 budget. He said he hopes to use $2.5 million in 2011 and $2.5 million in 2012.
Town officials used $4.7 million in reserve funds to offset tax increases in 2010, he said.
If the proposed sale of 755 acres at EPCAL to Riverhead Resorts comes through, at a price of $108 million, that would help also offset the deficit, Mr. Walter said. But Riverhead Resorts has yet to pay the town nearly $4 million it owes for two extensions of its sales contract, and the Town Board will vote on a resolution to terminate the contract on Sept. 7 if that money isn’t paid.