Riverhead Town is facing an estimated $4 million budget shortfall in 2015, as it runs out of the reserves it has relied on for several years, officials said Thursday.
Riverhead Supervisor Sean Walter said the town board is contemplating raising taxes or borrowing against future land sales at the 2,300-acre Enterprise Park at Calverton, the town-owned site called EPCAL.
While Walter said the town is not considering layoffs, officials are awaiting the results next month of a retirement incentive offered in May to the town's 300-member workforce that will produce some savings.
Walter said he expects about 10 employees to retire.
The town has tapped several million in reserves -- much of it from past land sales at EPCAL -- to cover steep debt payments in recent years, but the reserves are dwindling and cannot close the gap in 2015, officials said.
The debt is related to a $52 million project, beginning around 2000, to partially clean up and then close the town's landfill. The project was completed around 2009, and the payments are about $4 million a year.
Walter, a Republican who took office in 2009, said the town could add a "landfill debt" line to residents' tax bills that directly funds the debt service. That would require an estimated 12.5 percent tax hike next year, piercing the state's 2 percent cap.
Alternatively, the town could balance the budget with a short-term loan that would be repaid by revenue from future land sales at EPCAL, Walter said. The town is still working on subdividing the former Grumman Corp. property, which Walter said could be worth $100 million. He added that the town could begin selling property there next year.
The supervisor said he will introduce two resolutions at the next town board meeting on Aug. 19 -- one to schedule a public hearing on piercing the tax cap and another to authorize a short-term loan -- and discuss both options with the board.
Walter said he does not support balancing the budget entirely with cuts, which he said would require laying off at least 60 employees.
"Services would be curtailed to a level that I don't believe residents would be happy with," he said. "You're talking about cutting departments that people rely on."