Downtown business group at odds with town over budget: Alive on 25 plans ‘frozen’ 

The nonprofit organization that plans Alive on 25, Oktoberfest and other events in downtown Riverhead is currently “frozen” because its board and town officials have not yet been able to resolve issues over the organization’s 2025 budget. 

The Riverhead Town Board has not approved the budget and event schedule between the town and the Business Improvement District Management Association (BIDMA), leaving the organization without a calendar of events. It has made the organization unable to contract with any vendors and plan the first Alive on 25 street festival of the summer, putting the event at the risk of cancellation.

The BIDMA is a nonprofit organization governed by a board made up of business and property owners downtown. It was established to spend the tax money collected in a special taxing district created for the promotion of business there. The Town Board contracts with the BIDMA every year to organize events downtown and supplies its operating budget.

The conflict over the budget was the subject of a tense, hour-long conversation at Wednesday night’s BIDMA board meeting. Council Member Joann Waski, the new Town Board liaison to the BIDMA, raised several concerns with the board, including the lack of audits in previous years, a decrease in BIDMA-organized events and the large raise for BIDMA Executive Director Kristy Verity. 

“It’s our responsibility to make sure that all the money is going where it’s supposed to be going — not saying that it’s not,” Waski said. 

Waski did not say during the meeting what specific issues would still need to be resolved in the 2025 budget before the Town Board passes the resolution contracting with the BIDMA and scheduling the events downtown. Waski asked whether the entire BIDMA board, made up primarily of members who have served on it less than a year, had been informed about the budget’s contents. 

“Can you look me in the eyes and tell me that you’ve actually looked at this budget?” Waski said at one point.

The BIDMA’s budget for 2025 is $183,500, according to the town’s adopted budget; $140,300 of the budget is funded from BID taxes, while $43,200 is funded through the general fund. Last year’s original BIDMA budget was $172,000. The BIDMA currently employs a full-time executive director and a part-time “ambassador” who helps clean up downtown. 

BIDMA officers have sat down with town officials several times to discuss the budget and have made adjustments requested by the town which were “easily achieved and logical,” BIDMA Vice President Gary Hygom said. It was mainly to make things clearer for the town, Hygom said.

“It wasn’t changing the bottom line budget almost at all,” Hygom said. “What is changing the bottom line of the budget more now is we’re three months in — the first quarter of the year is gone. So that is beginning to alter what our budget will be because we’ve been frozen for, it looks like, four months before we can move… ”

Riverhead Economic Development and Planning Administrator Dawn Thomas said the town’s requested changes were “necessary” and that the BIDMA board shared some blame for the delay.

Hygom asked Waski for an update on approval from the Town board, stressing that the BIDMA cannot plan events without it.

Waski said the town attorney’s office has requested the BIDMA’s 2023 audit report, but has not received one. An audit for the BIDMA each year is a requirement of the organization’s bylaws, Waski noted. 

An audit was not done. Verity said the IRS does not require the BIDMA, with the small budget it has, to conduct an audit. She acknowledged that the requirement was in the bylaws, and said she met with Town Attorney Erik Howard in the hopes of changing that requirement. At that point, former BIDMA President Steve Shauger and Verity were the “two primary people running the BID,” Verity said.

When Shauger announced he would step down as BIDMA president, Verity was concerned that she was “going to be left with the aftermath and any liability that these things aren’t being done correctly,” she said, and requested the meeting with Howard. Those issues were never resolved, Verity said.

The absence of an audit for 2023 is “affecting the 2025 budget, with an entirely new BID board,” Hygom said. “…If there’s no suspected fraud, this is paperwork and clerical and clarity. And what’s beginning to happen is you are jeopardizing everything going forward, because we can’t move on anything,” he said/

Waski said she is not talking about fraud. The audit is just “one moving part,” Waski said. “Another thing is Kristy’s salary.” 

The BIDMA board and the town gave Verity a raise to $90,000 last year, according to Waski. That’s a 73% increase from the $52,000 she was budgeted for in 2024. 

The Town Board discussed the raise around March of last year, after Council Member Bob Kern said Verity was set to step down as executive director, Waski said in an interview. Shauger, who also announced he would step down at that time, said Verity had not officially given her notice to resign and that the BIDMA is “working through administrative and board details to gauge the direction of the BIDMA and its employees.” 

Verity ended up staying on as executive director after receiving the raise. “We appreciated what she was doing, and wanted to keep her around,” Waski said in an interview.

“Most of us were not present when that happened, and the town was also involved in making that happen,” Hygom said during the meeting of Verity’s raise. “And I have to say — speaking for myself, not the whole board — but I think we really appreciate Kristy. We love what she’s thinking about doing and are on the same page.” 

“And I feel like this new BID has not even been given a moment’s chance to start to show what we want to do and how we want to change,” Hygom added. “The idea of change seems to be a little frightening, and I’m not understanding that. But what has happened in the past, and I’ve said it over and over, has failed. It has not worked.”

Waski told the BIDMA board it seemed that while Verity was getting paid more, the organization was hosting fewer events downtown.

“We were very enthusiastic and excited about what was happening downtown,” Waski said, adding that it seems the BIDMA’s activities are “shrinking and shrinking.” 

“We need to know what we are approving. Just seeing numbers on a paper, that’s not enough,” she said.

The BIDMA’s proposed event lineup for 2025 is the same as when the Town Board approved its budget last year, Verity said. The BIDMA cut the number of Alive on 25 events last year down to two, from three, in an effort to attract more vendors, who have to commit to attending all of the events, BIDMA officials said at the time. The decision was praised by the Town Board. Verity added that the BIDMA made a profit last year, unlike the year before. 

BIDMA board members and Verity said they want the organization to do more than just events. They want to focus more on beautification projects, public art installations and marketing downtown businesses, and let other organizations kickstart events downtown.

“I mean, if you want events, then fine, but then who was running the grants and activating the public art initiative and things like that?” Verity said.

BIDMA board members stressed that Verity does more than just manage events. “The effort and support that she provides to the business owners on Main Street is invaluable and has proven to be a consistent lifeline for people who are struggling in the town and don’t have other outlets to communicate their issues up the food chain,” said Jason Breitstone, a principal of Hildreth Real Estate Advisors, one of downtown Riverhead’s largest commercial landowners. 

Hygom and Waski agreed to a meeting between Supervisor Tim Hubbard and the BIDMA executive board to resolve the budget issues.