NAHANT – The upcoming fiscal year will be tough but giving town employees a cost of living raise should be a priority, according to town officials.Town Administrator Mark Cullinan told the selectmen one of his budget priorities is to give town employees a 3 percent cost of living increase.”There was no raise last year,” he said. “And employees only received a minimal raise the year before.”Selectman Richard Lombard agreed employees should receive a cost of living increase.”The cost of living raise is well deserved,” Lombard said. “We can’t continue to have to have town employees going without raises. The cost of milk has gone up and the cost of health insurance has gone up.”Cullinan said he expects the amount of state aid the town receives to decrease by 10 percent because of the $2 billion state deficit. He cautioned there are a lot of unknowns in the budget.”This is very preliminary,” Cullinan said. “There are a lot of numbers I don’t have yet.”He said he expects the tax levy would increase by 2.5 percent and local receipts, which includes vehicle excise taxes and other fees, to increase by 2 percent.”Hopefully without any major surprises,” he said, “we’ll be able to get through FY’12 with a balanced budget.”Cullinan also told the selectmen there are a couple of big ticket items that need to be looked at including a sewer pipe replacement on Ward Road. He said the pipe that carries all the wastewater that is pumped out of Nahant to the sewer treatment facility in Lynn has broken three times in five years. He added the repairs cost between $20,000 and $30,000 each time there was a break.Cullinan said there is $470,000 in the water sewer account that could be used and the town may have to borrow additional money for repairs.Cullinan said the town needs a new ladder and Chief Edward Hyde has applied for a federal grant that could pay up to 89 percent of the cost for a new ladder truck.In other business, the selectmen voted unanimously to appoint Willow Road resident Linda Spinucci-Peterson as the new director for the Council on Aging (COA). Peterson will replace Diane Desmond, who is retiring after three years with the agency.COA Chairman Trudy Joyce said the work Desmond has done has been commendable and Peterson, who is scheduled to start Nov. 22, would do an excellent job as well.”We feel fortunate to have Linda Peterson,” Joyce said. “We’re looking forward to a smooth transition.”Lombard said he believes Peterson is a good choice and the selectmen voted 2-0 to appoint her to the position.