Government

Walter proposes 2.08 percent tax levy increase next year

Supervisor Sean Walter. (Credit: Tim Gannon, file)
Riverhead Town Supervisor Sean Walter. (Credit: Tim Gannon, file)

Less than a week after Riverhead Supervisor Sean Walter said he would close a looming budget gap projected for 2015 with several one-shot revenues, he’s proposing in his tentative budget to cut spending by over $800,000 next year while raising the tax levy by 2.08 percent.

The proposed budget uses $701,500 in reserve funds from the lease of runways at EPCAL for storage of water damaged cars after Hurricane Sandy in 2012, Mr. Walter said.

The town has about $400,000 left from those funds, he said, and has between $1 million and $1.5 million left in overall surplus funds.

“We’re going to take it right down to the wire,” Mr. Walter said about using reserves to offset taxes. “The town can survive one more year without a tax increase.”

The proposed tax rate increase is 0.58 percent. A homeowner with property assessed at $50,000 (which is equivalent to about $300,000 in real market value), would pay about $14 more in town taxes next year under the supervisor’s proposed spending plan.

Mr. Walter said those numbers are slightly lower than the figures discussed at the Town Board’ s work session last Thursday, due in part to increases in assessed value (which lowers the tax rate) and $43,650 less in proposed spending.

In August, town leaders forecast an operating deficit in the town’s general fund budget of about $4.5 million, which would have taken about a 12.5 percent tax levy increase or 60 layoffs to fill. Since then, Town Board members have agreed to a number of measures that could reduce the deficit to about $1.6 million, including retirement incentives, using money from cars stored at EPCAL after Superstorm Sandy, and other options.

Overall town spending for 2015 — including all of the special districts controlled by the town like water, sewer, garbage and the Riverhead Business Improvement District — is projected at about $91.49 million, according to the tentative budget. That’s about $447,500 less than the current year’s budget.

The supervisor said he’s also hopeful the town will generate additional revenue from the sale or lease of land at the Enterprise Park at Calverton.

The 2015 tentative budget includes $750,000 in projected revenue from two land leases at EPCAL in a proposed 90-acre energy park. Both prospective leases — one for $500,000 an the other for $250,000 — are slated for solar energy projects.

Those development proposals will need approval from LIPA, which is expected to select energy proposals in December.

The supervisor’s budget proposes to not replace 13 positions in which employees are retiring. Of that group of retirees, 10 have accepted retirement incentive packages.

The tentative budget also proposes to eliminate the planning director position held by longtime town employee Rick Hanley in the hopes that he retires as well, Mr. Walter said.

Mr. Hanley’s current salary is $118,843. Another town planner, Joe Hall, has accepted the retirement incentive.

Mr. Walter said his budget does include $30,000 for a part-time planner.

On Thursday, Mr. Walter and town finance administrator Bill Rothaar outlined about $1.6 million in new revenue they expect the town to receive in 2015.

The new revenues include:

• About $700,000 in anticipated revenue from the lease of town property at EPCAL to two companies that want to build solar energy panels. These leases would be within the 95-acre area the town has set aside in the southwest corner of EPCAL as an energy park. The $700,000 is the amount for just one year. The leases fall under a request for proposals issued by LIPA. The town has not identified the companies.

• About $613,000 that’s left in a Suffolk County fund from the 1990s that is being used for open space purchases and landfill closing costs.

Mr. Walter said the fund was originally intended for landfill closing costs.

“We’re not really positive that we’re entitled to it, but we think we are,” he said.

The supervisor also said the county attorney is looking into whether the town can access the funds, but he said the town’s attorneys are “pretty confident” it can.

• An additional $178,555 in sales tax revenue from the county for use in the police department. Mr. Walter credited Suffolk County Executive Steve Bellone and Legislator Jay Schneiderman (I-Montauk), which is the deputy presiding officer of the Legislature, with getting the funds.

“The county executive has been sympathetic to our needs,” Mr. Walter said.

• An additional $50,000 in money from a settlement involving a lawsuit filed against the town in 2004 by the promoters of the planned Field Day Festival. That was a proposed two-day music festival at EPCAL that never happened because the county to issue a mass gathering permit. The concert, which featured acts such as the Beastie Boys, Beck and Radiohead, eventually moved to Giants Stadium in New Jersey.

By law, the supervisor must release the tentative budget by 5 p.m. Tuesday. The Town Board must then adopted a preliminary budget, which will be the subject of a public hearing, and adopt a final budget by Nov. 20.

If the Town Board fails to agree on any changes prior to adoption deadline, then the supervisor’s budget goes into effect automatically.

[email protected]