Riverhead staff recommend using CPF balance to pay down 2018 refunding bonds, saving about $660,000 in interest

Town staff told the Riverhead Town Board on June 25 that the town can pay down principal on its 2018 refunding bond series B now, using Community Preservation Fund (CPF) balances and a small general-fund contribution, a step staff said would reduce future interest expense and leave substantial CPF capacity for projects.

Janette, the staff presenter, said, “as of 12/31/25 we have $30.1 million sitting in the CPF fund balance,” and outlined a proposed principal-only paydown of $7.2 million. She told the board the immediate payoff would cut roughly $660,000 in future interest and leave an adjusted CPF balance of about $20.1 million (staff noted the balance is likely a bit higher after recent transfer-tax revenue). Janette also said the bond series carries a small general-fund component that would require an additional $92,000 from the general fund to fully extinguish the town’s obligation.

Board members and staff discussed timing and budget impacts. Staff noted the debt service for the year is about $2.8 million and that paying the series now would remove that item from future budgets. The presenters also described how proceeds from recent property transactions in Town Square factor into the calculation; staff said the Petraelli hotel parcel sale is contracted at $2.625 million, and rental receipts and contract terms will apply $660,000 toward town capital matches, leaving net proceeds that staff said can be applied to the related debt.

Town staff said they will prepare a resolution so the board can act quickly: the payment must be processed by August 1 under the schedule staff described. No formal bond-paydown vote was recorded in open session on June 25; staff said they would bring a resolution back for board consideration and work with the town’s financial advisor to meet the payment deadline.

If adopted, the transaction would lower ongoing debt service and reduce the town’s future borrowing needs for the covered series while keeping CPF resources available for land preservation and capital matching grants. The board moved on to other agenda items after staff concluded the presentation.

The board did not take a formal vote on the payoff during this session; staff said a resolution will be prepared for consideration before the August payment date.