Town Manager Richard Montuori spoke calmly and plainly at Tuesday's Board of Selectmen's meeting at Town Hall.

But as he offered a preliminary peek at the town's finances heading into the Fiscal Year 2012 Budget process, his words packed a wallop.

Montuori has drafted a budget message for his department heads, outlining his expectations and requirement as they prepare their FY '12 budget requests. According to Montuori, he has told his department heads there will be a wage freeze for all non-contractual employees, as well as a mandatory 10 percent reduction in expenses and a freeze on outlay purchases ($25,000-under).

"We made it through (Fiscal Year) 2011, but 2012 is going to be a real challenge," said Montuori. "We'll know more in the next couple of weeks."

At the center of the town's fiscal challenge is the state's  $2.2 billion structural deficit that, according to Montuori, is expected to result in a significant cut in state aid to cities and towns.

"We're not sure of the amount," said Montuori. "It could be between 6-12 percent."

For Fiscal Year 2011, Tewksbury received $12.3 million in Ch. 70 local aid from the state.

Other contributing factors to the potential fiscal crisis are anticipated increases in fixed costs, such as health insurance and Medicare. In addition, Montuori said, funding sources that the town has used in years past to balance its budget have dried up.

"This doesn't come as a surprise to us," said Todd Johnson, chairman of the Board of Selectmen. "We knew those (other funding sources) weren't going to be available."

Johnson praised Montuori for his approach to the FY '12 Budget, which includes starting the process a full month earlier than in previous years. Montuori said he hopes to have a final draft presented to the Finance Committee by the last week in January or first week in February to allow the FinCom maximum opportunity for analysis, public hearings and recommendations prior to Town Meeting.

Montuori warned that if cuts in state aid are worse than anticipated, layoffs are possible.

"Cuts could be deeper," he said. "Positions could be at risk, depending on how deep the cuts are that have to be made."

In other business:

• Michael Hazel, who has been serving in the role of acting deputy fire chief, was recommended and approved for the permanent position. Hazel beat out two other finalists for the position.
• The board approved the relocation of telephone poles on Brookfield Road for safety purposes. The poles belong to National Grid and Verizon.
• The board approved a request to use several of the town's roads for a benefit 5K road race on March 20. The race is run in memory of Tewksbury High student Meghan McCarthy, who died of a brain tumor earlier this year.