Halpin early retirement incentive remains up in the air as budget deadline nears

The Riverhead Town Board continued to waffle over Supervisor Jerry Halpin’s early retirement incentive proposal — even as town employees warned that any savings would need to be locked in soon to affect next year’s budget.

At a June 11 work session, financial administrator Jeanette DiPaola backed using part of the town’s $5 million general fund balance to encourage roughly 32 eligible union employees to retire early.

The move could save up to $1.7 million annually, according to previous reporting.

“I’m not confident that we actually saved money in prior years’ incentives,” Ms. DiPaola said. “This one, I know we’re saving money — it is a win-win for both sides and I think early feelings are that the unions are good with what we’ve come up with, and I do believe they’ll take it.”

Mr. Halpin pitched the plan at the end of May as a way to lower future tax increases by encouraging some longtime employees to retire. The proposal would apply to eligible CSEA, PBA and SOA employees.

The town’s finance department is expected to begin rolling out budget instructions to other departments in early July, and Ms. DiPaola said the board would need to make a decision by Sept. 30 for any savings to affect the 2027 budget.

It is a requirement for the financial department to give 30 days’ notice to the eligible employees for them to decide if they are going to take any proposed incentive, Ms. DiPaola said. 

Last year, Riverhead pierced the state tax cap in its 2025-26 budget with a 7.89% tax hike — the town’s largest increase since the cap was enacted in 2012 — a flashpoint in Mr. Halpin’s narrow win over Republican incumbent Tim Hubbard.

Mr. Halpin has said the idea, first brought to him in February by a CSEA employee, could offset roughly three percentage points of the general fund tax levy.

Councilman Kenneth Rothwell, who is expected to challenge Mr. Halpin in November, remained hesitant. He asked whether the early retirement incentive could be compared with other cost-saving measures, such as digitizing the building department, as a way to generate additional revenues.

“I am not saying by any means that I am against any retirement incentives, there’s more than a multitude of just this, so it’s not a single road,” Mr. Rothwell said. “I’m still doing my homework before I can say okay, what is the best way to allocate this interest earned — I still don’t have an answer quite yet.”

The councilman also asked how the unions would be involved in the negotiation process for the incentive and if the intention is to have them participate, rather than for the Town Board to set an offer like in previous years. 

Mr. Halpin said the town is leaning toward putting forward an incentive offer, but any conversations with the three unions over contract specifics would need to happen in executive session.

“That’s why we brought it to executive session at the beginning,” Mr. Halpin said. “We want to create an incentive that they would actually be incentivized by.”

The $5 million in the town’s general fund balance resulted from several factors, including higher-than-budgeted interest earnings, Ms. DiPaola said. More than $800,000 in cannabis tax revenue from Suffolk County also proved to be a significant contribution, according to the town’s annual financial report.

“It’s always better to be over-budgeted than under because you never really know how spending is going to go during the year, so I think the town did a great job overall of really watching expenditures,” Ms. DiPaola said. “That’s been the theme all year — try not to spend, really try to save and cut wherever you can.”

Accountant Melissa Peeker confirmed the retirement incentive was only offered to CSEA employees in 2019, and was not negotiated. She stressed that approval from the Riverhead Town Board is crucial before exact numbers can be calculated. Additionally, those offered the incentive would sign an “irrevocable letter,” so retirees could not back out after taking it.

Councilwoman Joann Waski said she felt “more drawn” to supporting the incentive after seeing that the majority of eligible employees are within the CSEA. She gave credit to the unnamed employee who brought it to Mr. Halpin’s attention.

“When something is presented and we have no idea how much we’re actually going to be taking out of our fund balance to support this, when there are other projects that need immediate attention,” Ms. Waski said. “I think this should be brought to executive session at this point, and I think the employees and the unions deserve to know what’s going on because they’re making life-altering decisions right now as to what their future holds, and to hold them in limbo is not fair.”

Councilwoman Denise Merrifield said she is not opposed to an incentive, but also hopes to bring the building department digitization idea to a work session in a couple of weeks.

Ms. Merrifield also noted that while the prior budget set forth by Mr. Hubbard was “very unpopular” and upset the public, the board’s decision to pierce the tax cap played a major role in creating the extra $5 million now available in the town’s general fund balance.

“That fiscal responsibility that he tried, and our Town Board when we adopted that budget, even though we had to pierce the cap, it did help create this fund that we are now talking about that we have the benefit going forward to utilize here,” Ms. Merrifield said. “It is unfortunate, but it did help create a benefit.”

The public work session ended with members agreeing to continue discussions in executive session.