Town Administrator Paul Dawson and Selectmen discussed the town’s budget last week, cautioning department heads that significant cuts may be ahead.

“This will be without question an extremely difficult year,” Dawson said.

Department heads met alongside the Finance Committee, the Capital Planning Committee and the School Committee. Selectmen Chair Jody Dickerson said the town hadn’t had such a large joint meeting in a few years.

Finance Committee Chair Alan Minard said department heads should “take a hard look” at budgets before submitting them for Friday’s deadline.

“We’ve got some pretty big numbers that we have to swallow and the only way to do it is to squeeze everywhere,” he said. “This is a big business we’re running.”

The town’s estimated budget for fiscal year 2015 is $20 million. Dawson said the town will have to account for an eight percent increase in health insurance premiums, union contracts and an additional $100,000 expense for the county’s retirement fund.

To better understand the town’s biggest expense, which is the school budget, Dawson met with Mattapoisett and Rochester town administrators and Superintendent Doug White.

“There are some very, very significant stressors on the school budget,” Dawson said.

Sippican School potentially faces a $350,000 increase to its budget compared to last year.

School Committee member Christine Winters said her committee made a “best faith effort” to reduce costs when possible without affecting programs.

The town’s second largest expense is the Police Department. Police Chief Lincoln Miller said he didn’t anticipate any issues outside of regular salary increases, set to be $10,500. He also hoped to replace two police cruisers, which are becoming expensive to maintain.

With a “bare bones” budget of his own, Department of Public Works Director Rob Zora said any cuts he made would either come from personnel or possibly the town’s trash service.

Finance Director Judith Mooney said the town is only able to raise taxes two and half percent from the previous year without an override vote at Annual Town Meeting. She said the projected expenses already had the town “between and rock and a hard place.”

With little more than $100,000 in revenues anticipated she said the town should plan accordingly: “That’s got to be distributed amongst everybody.”