In tense meeting, board members seek details about Halpin’s retirement incentive proposal

Riverhead Town Board members Thursday questioned the financial details and process behind Supervisor Jerry Halpin’s proposed early retirement incentive, after Halpin brought the proposal to a public work session for the first time following two prior executive session discussions and a social media announcement and press release earlier this week.

The proposal, still in conceptual form, would offer early retirement incentives to eligible CSEA, PBA and SOA employees. Town Financial Administrator Jeannette DiPaola said the idea was explored after the town completed its 2025 annual financial report and found the general fund had a $5 million surplus due largely to higher-than-projected interest earnings on investments.

“I have to admit, at first I was skeptical, because I’m very conservative and don’t really want to let go of any money,” DiPaola said. “But I was asked to put the numbers together on paper, and when we did,” she said, the potential savings became clearer.

Council Member Ken Rothwell questioned why the interest earnings weren’t used to reduce the 2026 budget and tax levy.

“Because we never know. Interest can change tomorrow,” DiPaola said. “When I look back at how we budgeted for interest, we’ve always budgeted conservatively, because the market can tank,” she said. DiPaola pointed to 2020 as an example. “We barely earned any interest in 2020… And now, because the [interest] rates are still so high, we’re earning a lot more money,” she said.

Budgeting for interest earnings in advance is “a judgment call,” DiPaola told the board, noting that overly optimistic revenue projections can be dangerous. If the projections are off-base, she said, “you’re kind of screwing yourself over and have to find that money at the end of the year.” For that reason, the town has historically projected interest revenues conservatively, she said.

DiPaola continued her presentation of the proposal. The early retirement incentive proposal is based on eligible employees who could retire without penalty, she said. For police officers, that generally means 20 years of service in New York law enforcement. For CSEA employees, the analysis used employees eligible for full retirement: age 55 with 30 years of service, age 60 with 25 years of service, or age 65 with 20 years of service.

DiPaola presented examples showing potential savings from replacing higher-paid employees with lower-paid new hires and moving employees from higher-cost retirement tiers to lower-cost tiers.

For a top-salary police officer, DiPaola said the town could save about $96,000 in salary, longevity and retirement costs, after accounting for additional retiree health insurance costs. She said the savings would vary by position, dropping to about $22,000 for a detective grade one, about $19,000 for a sergeant and about $17,000 for a lieutenant.

If every eligible PBA and SOA employee accepted an incentive, DiPaola estimated total savings at about $1.3 million to $1.4 million in the first year. She said the town currently has about $33.4 million in fund balance.

DiPaola emphasized that the town already owes eligible employees accrued time and severance payments whenever they retire, regardless of whether an incentive is offered.

“Everybody that’s eligible for this right now, we owe them $2.5 million when they leave,” DiPaola said. “That’s regardless of whether we do this in this year, in ’27 — doesn’t matter.”

Council Member Denise Merrifield said the public needs to understand that the proposal would require an incentive payment beyond the severance and benefits employees are already owed.

“Someone’s not walking out the door in early retirement without some incentive, and that incentive is money,” Merrifield said. “I need the public to understand what that is.”

Deputy Town Attorney Annmarie Prudenti said labor counsel advised town officials not to discuss specific figures publicly yet because the town has not communicated with the unions about releasing those details.

DiPaola said the proposal would save money next year for each employee who accepts it.

“Anybody that takes it at this point is a savings to the budget for next year,” DiPaola said. “Bottom line, that is a fact. It just depends on how many people take it.”

Council Member Joann Waski questioned why the discussion appeared to focus heavily on the PBA and SOA when, according to Halpin, the idea originated with a CSEA employee.

“I would like to know why it was a CSEA town hall employee member that came to you with this idea, and why we’re focusing so much on the PBA and SOA,” Waski said.

DiPaola said the police unions were discussed first because the savings are larger due to higher salaries and retirement costs.

“They’re all included,” DiPaola said. “CSEA is just next.”

For CSEA employees, DiPaola presented an average eligible position with a retiring salary of $87,163 and estimated annual savings of about $19,000 after salary, longevity, retirement and retiree insurance costs are factored in.

Merrifield said the board also needs to consider whether the $5 million surplus could be better used for other priorities that would generate revenue, including digitizing the building department and implementing parking enforcement equipment and contracts.

“This may have potential,” Merrifield said, “but those other alternative ways to spend the $5 million will actually generate revenue for the town moving forward continuously.”

Halpin said he does not view the options as mutually exclusive.

“I don’t think it’s an either-or here,” Halpin said. “I think it can actually be a both situation.”

Council Member Bob Kern said he wants to know what the unions would seek before the board makes any decision.

“I think it’s worth moving forward and seeing what the unions want to do,” Kern said. “I don’t have the full picture yet to make a decision without that information.”

Prudenti advised board members to review Riverhead’s prior early retirement incentive programs, saying each was structured differently. She said the board could also consider options such as spreading severance payments over time.

DiPaola said she is not a fan of spreading incentive payments over several years.

Rothwell asked for a study of the 2019 incentive, including what was spent, what was saved and how quickly salaries rose again through promotions and step increases.

The board did not agree Thursday to move forward with negotiations. Instead, members said they want time to meet with DiPaola, study the numbers and review prior incentive programs before deciding whether to continue.

“Let us sit down with the financial administrator and let us do our homework,” Rothwell said.

Kern suggested setting up meetings with DiPaola and two board members at a time “as soon as possible.”

Halpin agreed.

Board members’ irritation over how Halpin handled the proposal permeated Thursday’s discussion and led to some tense moments.

Merrifield opened the work session discussion by objecting to the process.

“This is now for the first time coming to a work session after privately doing it in executive session twice, and after the Town Board rejected it, and now after you put information out in press releases and statements,” Merrifield said. “I just want the public to be aware of how this was generated and how it’s come about.”

See prior story: Riverhead supervisor pitches early retirement program for town workers (May 27)

Halpin said he consulted with the town attorney before discussing the issue in executive session and was advised the matter involved personnel and contractual issues.

“I did speak to our town attorney before I approached it that way,” Halpin said. “That was personnel and contractual, so I was advised to bring it to the executive session.”

Rothwell rejected that explanation, saying the proposal is fundamentally a budget matter because it involves using fund balance and changing future departmental budgets.

“This is a budgetary issue, it’s not a contractual issue,” Rothwell said. “When you are suggesting that you want to take monies from fund balance and distribute it to a certain number of employees, you need to put it out before the public.”

Rothwell said board members need time to evaluate the proposal, including its impact on future budgets, staffing and department operations.

“I want to pursue any avenue that, in the long run, helps our individual taxpayers,” Rothwell said. “But you need to be able to give the Town Board members time, and to be able to do our own research, our own review.”

Prudenti said the earlier presentation to the board was specific enough that employees could potentially be identified by salary line, even if names were not listed. She said Thursday’s presentation was intended to be more general.

“The points you’re raising are excellent, and that relates to eligibility criteria, who you could apply it to, who you could exclude,” Prudenti said. “Excellent points, but that could be tailored if you adopt a similar plan and you want to move it forward.”