TOWNSEND -- Confronted with a $417,728 budget deficit, Townsend officials are struggling to fill the hole created when voters did not approve a school override.

Because the other two towns in the North Middlesex Regional School District passed an override, the budget was set for the district. Ashby and Pepperell will raise their tax levy, Townsend must find the money in its existing budget.

Cuts will need to be made in municipal services.

This "cut is forever. It's not going to change," said Andrea Wood, chairman of the Finance Committee at the Sept. 6 meeting.

Deciding what to cut will be a challenge.

"It would be hard enough to cut out $100,000 four years running," she said. But four times that amount must be cut, annually.

Town department heads and Town Administrator Andy Sheehan met Sept. 5 about the budget.

"The departments, they were truly nonplussed on where they were going to find the money. I felt sorry for them," said Wood who attended the meeting.

"The department heads seem quite devastated by this whole thing" but are willing to work things out even though the only way the fire and police chiefs said they could reduce their budget was personnel changes, she said.

The least expensive way for the town to lower personnel costs would be reductions in hours, not layoffs, said committee member Carolyn Smart.

An earlier study revealed that to save the cost of one salary, three people needed to be laid off. The town must still pay unemployment benefits and health insurance costs for former employees, she said. If a reduction in hours is small enough, the employee will not be eligible for unemployment benefits for the lost wages.

Changing the way the Police Department rotates days on and off and tight scheduling at the Fire Department would result in a savings, Wood said.

Having someone from outside a department review policies could be helpful, Wood said. An outsider might see something that a department member would miss.

At this point, the Finance Committee does not have much say in where the cuts will be made.

"Andy (Sheehan) is working with all the departments. There's not much we can do. I just thought we should get a plan in motion," Smart said.

"We'll wait and see what the departments come up with," committee member Nancy Rapoza said.

Sheehan asked for general ideas on overall savings and specific numbers from department heads "to help close the gap but still provide the services they provide," he said.

"We really need to be a team. I don't want this to turn into a food fight," he said in a follow-up conversation. "Cannibalism doesn't do anybody any good." Sheehan did not attend the Finance Committee meeting.

Ideas on ways to make up the deficit include reducing the number of days the town hall, library and senior center are open, he said.

It is not likely the selectmen will choose to try a third override vote, Sheehan said. "The voters have spoken and we have to respect that."

Using money from the stabilization or rainy day fund for ongoing expenses "is a very dangerous thing to do in budgeting," he said but the selectmen may consider using a small amount to cover something critical this year.

After the figures from town departments are in, Sheehan will review them and make suggestions for cuts to selectmen, prior to a Special Town Meeting.

He would like to hold the town meeting in the first half of October. "We don't want to let it lag," he said. Town employees are worried about what will happen.

The drop-dead date for setting the budget is the beginning of December when figures need to be submitted to the state to set the tax rate.

The Finance Committee's role for a Special Town Meeting differs from the role it plays in developing the budget for the annual town meeting, Sheehan said. Members are welcome to make suggestions on where cuts can be made. Their requirement under town bylaws is to recommend or not recommend the selectmen's amendment to the budget before the town meeting.

Most of the town's $16.5 million dollar budget cannot be changed. Education, insurance and debt service account for the bulk of the amount.

The town must find a way to cut over $400,000 from the remaining $5 million, Sheehan said.

"There's a good chance it's going to affect hours."