Riverhead’s new audited financial statements show the town ended 2024 on solid footing with a clean opinion from its independent auditors, rising savings across major funds, and continued progress paying for infrastructure — while still carrying sizable long‑term obligations and relying on short‑term borrowing to bridge capital projects.
What the auditors said
PKF O’Connor Davies issued an unmodified (“clean”) opinion, concluding the town’s 2024 financial statements “present fairly, in all material respects” the town’s finances. The auditors noted Riverhead implemented a required accounting change for employee leave (GASB 101) but did not modify their opinion because of it. The report is dated Sept. 30, 2025.
The big picture
Riverhead’s total net position — a broad government‑wide measure of what the town owns minus what it owes — was $149.66 million at year‑end, up $18.66 million (about 14%) from 2023. Most of that value reflects capital assets such as land, roads and buildings. The town’s restricted balances increased, while the “unrestricted” category shows a deficit driven by long‑term obligations that are paid over time.
Day‑to‑day funds: savings rose
Governmental funds — the town’s checkbook for near‑term spending — ended 2024 with $67.18 million in total fund balance, up $12.31 million from a year earlier. The General Fund, which covers most operations, finished with $28.4 million in fund balance. Within that total are amounts set aside (restricted/assigned) and an unassigned cushion for emergencies and one‑time needs.
Community Preservation Fund (CPF): big balance, dedicated uses
The CPF — funded by a 2% real‑estate transfer tax that voters approved and extended through 2030 — ended 2024 with a $25.6 million restricted balance for open space and farmland preservation. In 2024, CPF took in $10.11 million in revenue and sent $3.19 million to the debt service fund to cover preservation‑related borrowing. By law, CPF dollars can only be used for preservation purposes and related debt.
Debt: where it stands and how it’s changing
At Dec. 31, 2024, Riverhead reported $43.96 million in bonded debt (long‑term bonds) and $22.8 million in bond anticipation notes (BANs) — short‑term notes the town plans to refinance or convert to bonds as projects advance. Water/sewer Environmental Facilities Corp. (EFC) bonds totaled $11.64 million. The town had $49.9 million in bonds authorized but not yet issued.
After year‑end, the town issued new BANs: $19.25 million at 3.5% on Feb. 20, 2025 (maturing Feb. 20, 2026) and $2.725 million at 4% on Aug. 14, 2025 (maturing Aug. 14, 2026). This was a rollover rather than new borrowing.
New York’s debt cap doesn’t count water and sewer debt; Riverhead has used 6.74% of its $580.1 million statutory debt limit. Moody’s last published rating cited in the audit is Aa2 (July 2021).
Water and sewer: mixed results
On a full‑cost basis, sewer operations ran at a net cost of about $2.02 million (costs exceeded program revenues), while the water fund generated about $1.51 million in net revenues; EFC “Clean Water” bonds outstanding stood at $11.64 million across three series, including a 2024 issuance.
Long‑term promises: pensions and retiree health
Riverhead’s largest long‑term obligations remain employee benefits. As of Dec. 31, 2024 the town reported $132.42 million for other post‑employment benefits (OPEB), $6.65 million for its share of the state Employee Retirement System (ERS) pension liability and $15.91 million for Police and Firemen’s Retirement System (PFRS). These amounts are booked under statewide accounting rules and are paid gradually through future budgets.
New accounting rule requires restatement of starting balances
Because of a new standard on compensated absences (unused leave), the town recorded a one‑time restatement to the starting 2024 balances (governmental activities down $1.4 million; a small increase on the business‑type side). That change affects how some liabilities are measured; it doesn’t reflect a new cash outflow.
Taxes and the 2025 budget
Looking ahead, the town says the 2025 budget is up $5.89 million (5.29%) from 2024, and the town‑wide tax rate rose $4.673 per $1,000 of assessed value. Riverhead exceeded New York’s 2% tax‑levy cap for 2024 and again adopted a local law to exceed the cap for 2025 — both actions permitted by state law with a supermajority vote.
What it means for residents
- No red flags from auditors. The clean opinion is the baseline taxpayers want — it means the books are in order according to national accounting rules.
- Stronger cushions. Core operating and special‑purpose funds ended 2024 with higher balances, giving the town more flexibility for emergencies and one‑time needs.
- CPF is healthy and restricted. CPF dollars and earnings can’t plug general operating gaps; they’re locked in for preservation and the debt tied to it.
- Debt is manageable but shifting. Riverhead’s debt level fits well under the state cap, but the town is leaning on short‑term BANs that will need to be rolled or converted to bonds as projects advance — a point to watch if interest rates stay elevated.
- Big obligations remain. Retiree health care and pensions are the dominant long‑term costs; they don’t threaten cash today, but they shape future budgets.
- Taxes rose in 2025. The board adopted budgets that exceed the state levy cap (as allowed by law), and the tax rate moved higher for 2025.
Bottom line: Riverhead’s 2024 audit paints a picture of a town that’s building reserves and investing in infrastructure with a clean bill of financial health — but one that still has large, slow‑moving benefit obligations and a capital plan that relies on rolling short‑term notes. Those choices are legal and common, but bear watching in a higher‑rate world.
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