The town layoffs are over, and now Oak Bluffs voters must come to terms with their budget crisis, which includes a combined operating deficit of $800,000 between last year and this year.

“These are difficult times that call for hard choices,” said selectman and board chairman Greg Coogan at the weekly selectmen’s meeting Tuesday night.

At a special town meeting that has been set for Oct. 20 voters will be asked to cut nearly $500,000 from the town’s current operating budget.

At the same time voters will also be asked to appropriate $2.4 million for wastewater improvements that would allow the Martha’s Vineyard Regional High School and new YMCA building to connect to the town sewer, among others.

On Tuesday selectmen unanimously approved a seven-article warrant that calls for deep cuts in 11 separate accounts, including $108,000 in salaries and another $52,485 in other expenses from the Oak Bluffs school, $139,000 from the treasurer’s office, $68,562 from police department salaries, $26,481 from the assessors’ department, $35,563 from the shellfish department, $29,673 from health department salaries and $23,500 from harbor department salaries.

Town administrator Michael Dutton said the police department has been asked to cut salaries, although it is unclear whether that means layoffs or a reduction in hours.

Assistant shellfish constable Peter Estrella and health department assistant Nathalie Woodruff have already been laid off, while principal assessor Diane Wilson and harbor administrative assistant Wendy Brough have had their hours cut in half.

Selectman Kerry Scott on Tuesday reiterated her concerns about laying off Ms. Woodruff, which she said could have unintended consequences because the job is a union position.

“I was told three times that [these layoffs] would pose no union implications. Now I am hearing there are some very serious union implications,” Ms. Scott said, although she did not elaborate.

She did say that she is concerned that the elimination of the adminsitrative position could create a backlog in the health agent’s office.

“The responsibilities of the health agent have increased dramatically in the shadow of the [Sept. 11 terrorists attacks] . . . we are being asked to take on more from the state . . . so I am wondering if this is even allowed,” Ms. Scott said.

But Mr. Coogan said Ms. Woodruff’s job duties will be shifted to other employees, and he urged Ms. Scott to take the long view.

“We’re moving people into different positions to save the money we have to save, and be efficient as we can,” he said.

Meanwhile, as the selectmen struggle to balance the town operating budget, the wastewater department is poised to make a large spending request that would expand the town sewer system down County Road and also connect the high school, the new YMCA, Martha’s Vineyard Community Services and the elderly housing complex.

Voters will be asked to appropriate $2.44 million for engineering and construction costs for improvements at the wastewater plant.

The cost of connecting the high school, the Y and the other facilities — around $994,000 — is expected to be repaid through user agreements. The town has also applied for federal stimulus money from the U.S. Department of Agriculture that could cover between 40 and 50 per cent of the project, leaving the town’s actual financial obligation around $746,600, according to language in the warrant article.

Wastewater superintendent Joe Alosso said the improvements will allow the wastewater facility to meet higher groundwater discharge standards under state rules, and will allow treated effluent to be sent to new beds at the Leonardo property, located within the public drinking water zone.

Mr. Alosso also said the improvements would allow more homes to connect to the town sewer and help reduce nitrogen loading in Lagoon Pond, which is currently at its limit for nitrogen loading. Connecting the high school alone would be a giant stride toward reducing the nitrogen load in the pond, he said.

He said the plan would also allow approximately 250 homes between the Martha’s Vineyard Hospital and the town fire station to connect to the sewer system.

“There will never be a better opportunity to have such a large impact on the quality of the water in Lagoon Pond as there will be with an affirmative vote now,” Mr. Alosso said.