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PEPPERELL – Fiscal 2011 just started this month, but selectmen already have their eyes on fiscal 2012.

During their meeting Monday night, the board began discussing how to deal with an expected $700,000 deficit for next year.

Town Administrator John Moak and Treasurer Michael Hartnett are leading a committee charged with proactively analyzing and recommending solutions for the anticipated deficit.

Moak said that at this point, options include going for an operations override, proposing a debt-exclusion override or using cash reserves. He expects state aid to be as much as 20 percent lower than it was in fiscal 2009, although that would represent level-funding from this year.

Moak said that although operations debt will be dropping from fiscal 2012 to fiscal 2014, the town should expect cost increases of 10 percent in health care and 4 percent in retirements.

Also, the most the town can expect in new revenue growth is $75,000, with a more likely figure being $60,000, Moak said. That compares to $175,000 in new growth in fiscal 2009.

Selectman Joseph Sergi stressed that Monday’s talks were only the start of the process, but that the goal is to prepare and decide on budget options for next year. He said the town rejected one budget override for this year and that the board needs public input as to what the priorities are in balancing next year’s budget.

Moak said: “Our job here was to give you a realistic approach to what it costs to provide these services. Here are three scenarios. It’s strictly up to you what level of services you want.”

“I wish the community would tell us what they want to cut in services,” Sergi said.

In other business, selectmen:

Questioned the hiring of a new conservation agent for 27 hours per week, as the incumbent is retiring in October. They asked the Conservation Commission to see if the job could be shared with another in town, partly outsourced or simply reduced in hours.

Agreed to fund the hiring of a 19-hour-per-week outreach worker for the Council of Aging to fill a resignation. After hearing from COA Director Sharon Mercurio, Sergi said: “Clearly, your mission is unique and different. Some folks may think it’s odd given the previous discussion, but we need to support families and seniors.”