After months of negotiations, Town Administrator Mark Andrews and Superintendent of Schools Dr. Barry Rabinovitch have come to a consensus on budget cuts necessary to close a $2.6 million gap between the town and School Department's proposed budgets for next year.

"It's been a lot of hard work, negotiating," Rabinovitch told members of the ad hoc budget committee during a Monday meeting. "This was not about winning or losing. It was about getting to the number."

The ad hoc committee was formed in January with the goal of coming to a consensus on the budget before spring Town Meeting. It consists of Andrews and Rabinovitch, as well as members of the Board of Selectmen, School Committee, and Finance Committee.

Andrews was not present at Monday's meeting due to illness.

The town added an additional $41,000 to the school budget by cutting a purchase of new defibrillators for the police department, Rabinovitch said. He reduced his budget by cutting a purchase of new technology at Wareham Middle School, holding off on paying special education tuitions in advance, and by cutting other supply purchases, such as textbooks, paper, and pencils, he said.

Among other cuts, due to a lower number of first-grade students, Rabinovitch cut two teachers from that grade and one from a "transitional" classroom (a class between kindergarten and first grade). First grade classes will contain roughly 21 students, which Rabinovitch called "manageable."

Rabinovitch also closed the gap by moving money within the school budget. He used funds from a West Wareham Academy revolving account to support two positions at that school and used A.D. Makepeace donations that were not expended last year, among others.

In an effort to save the town and the School Department money, Rabinovitch said the town will take a "health care premium holiday," meaning the town and its employees will not pay into the trust fund used for insurance claims.

Under a self-insurance plan, the town and employees pay premiums into the town's trust fund. All health claims are paid from the trust fund, with insurance companies involved only in claims processing. Unlike a traditional insurance plan, the town saves money if claims cost less than expected.

The fund currently contains roughly $3.3 million and should have a balance of around $2.3 million, said Finance Committee member Frank Heath.

Selectman Steve Holmes was concerned about the removal of money from that fund.

"That's a healthy fund right now," Holmes told the committee.

Derek Sullivan, a financial analyst for the town, said Andrews OK'd the removal of funds with accounting firm Powers & Sullivan, which completed an audit of the account last year and found that it had more money than was needed due to accounting errors. (Click here for related story.)

Holmes said he'd feel better about the withdrawal if Powers & Sullivan submitted its opinion in writing.

Rabinovitch said he and Andrews realize that any gap in next year's budget could not be filled with funding from that account.

"I understand the health premium holiday is one-time money," Rabinovitch said. "Next year, we're going to have to use new growth and tax revenue" to fill shortfalls.

Finance Committee member Donna Bronk commended the efforts of the Town Administrator and Superintendent.

"You and Mark [Andrews] hammered out a good agreement here," she told Rabinovitch. "At least it gets us through this year."

Town Meeting will not vote on the proposed budgets until May, though Town Meeting begins on April 25. On that date, town officials will ask voters to delay voting on all financial articles after an audit of fiscal year 2010 financial statements indicated that $919,000 is unaccounted for. The delay will give auditors a chance to determine the town's final 2010 finances.