Riverhead Town Board OKs early retirement incentive plan

The Riverhead Town Board unanimously approved voluntary early retirement incentives Tuesday for select union employees in an effort to curb future tax hikes ahead of budget season.

The program uses part of the town’s $5 million general fund balance to encourage roughly 32 eligible employees to retire early. If all participate, the town could save up to $1.7 million annually — enough to offset roughly three percentage points of the general fund tax levy, the Riverhead News-Review previously reported.

The incentive is available to eligible employees represented by the Civil Service Employees Association (CSEA), Riverhead Police Benevolent Association (PBA) and Superior Officers Association (SOA). Employees interested in participating must submit an irrevocable resignation by Sept. 1 and retire by Oct. 1.

“We get to honor our longtime, hardworking men and women of the CSEA, PBA and SOA for their service to our town, and then we have the opportunity to save not just on this year’s budget, but for the future budgets of Riverhead,” Supervisor Jerry Halpin said in an interview on Wednesday. “[We] have the opportunity to promote people from within, and to see them rise through the ranks…I’m glad that this passed unanimously and I look forward to continuing to work with the board to find ways to save the taxpayers money, while increasing the opportunity to pay our employees better.”

Under the current collective bargaining agreement, eligible CSEA Tier 6 retirees who take the incentive receive a $12,500 lump sum payout. 

PBA and SOA retirees who take the incentive get $1,000 per year for each year of service, as well as a lump sum equal to the value of up to 30 days of additional accrued sick days. This is calculated using the average of the employee’s base salary over the last three years. 

Both PBA and SOA officers must have completed 20 years of law enforcement service in New York in order to qualify for the incentive. 

Mr. Halpin proposed the incentive after Riverhead pierced the state tax cap with a 7.89% tax hike — the town’s largest increase since the cap was enacted in 2012 — a flashpoint in his narrow victory over incumbent Republican Tim Hubbard last year.

The supervisor began touting the early retirement incentive program in May as a possible measure to cut future tax increases. He first got the idea from a CSEA employee in February. 

In the spring, he brought attention to the town’s recently released 2025 Annual Financial Report, which showed the general fund balance grew by roughly $5 million last year, from $28.4 million to $33.4 million.

Immediately after floating the idea, the plan drew sharp pushback from Councilman Kenneth Rothwell, who is challenging Mr. Halpin for the supervisor seat in November, and other Republican members of the Riverhead Town Board over transparency, individual payouts and potential risks to future budget stability. 

However, after further discussions with union leaders and the town’s accountants, board members ultimately agreed the incentive could reduce future costs.

“Should anyone — whether it be CSEA, police officers, superior officers — accept the retirement incentives, we would wish them all the best of luck in the future,” said Councilman Kenneth Rothwell, before voting in favor of the agreements Tuesday. “Thank you for everything, and we’ll see how the finances of this play out over the next few weeks.” 

The $5 million in the town’s general fund balance resulted from several factors, including higher-than-budgeted interest earnings, the town’s financial administrator Jeanette DiPaola previously 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.

The town’s finance department is expected to begin rolling out budget instructions to other departments this month.

“I think this is a win-win for employees and the Town of Riverhead, including residents,” Ms. DiPaola said in an emailed statement on Wednesday. “I look forward to incorporating the savings of the incentive into the 2027 budget as employees make their decisions over the next couple of months.”