Despite heated debate and pointed criticism aimed at certain town leaders, Oak Bluffs voters during a standing-room only special town meeting on Tuesday agreed to cut nearly $500,000 from the current town budget and spend $2.4 million for wastewater improvements that will connect the regional high school and new YMCA to the town sewer system.

A total of 163 voters packed the Oak Bluffs school cafeteria at the start of the meeting, a high number for a special town meeting.

The start of the meeting was delayed for 15 minutes as officials scrambled to print out extra copies of the warrant. By the time town moderator David Richardson banged the gavel nearly 200 voters had assembled. The first article of the evening was the most contentious, asking voters to approve $499,145 in cuts to staff and operating expenses in the current fiscal year budget. The cuts are part of a larger plan by town officials to stem an ongoing financial crisis that has already resulted in layoffs, a spending freeze and consolidation in town departments.

Voters agreed to cut $108,000 in salaries and $52,485 in other expenses at 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.

But first they had some questions.

“I am puzzled why two years ago at town meeting we were told we had to give everyone a raise; we were told by the board [of selectmen] we had to do it . . . did nobody know this economic disaster was coming?” said Barbara Hoyle, adding: “The financial disaster is washing over the shoals, and it’s not going to get better, it’s going to get worse.”

She continued: “I am not sure I have faith in the decision making of the town administrators . . . we don’t mean to sound angry, we are just upset because we are the ones stuck with this financial imposition.”

Douglas Siple agreed. “We had an annual town meeting a few months ago, and we approved a budget,” he said. “So I am wondering: did we know about the $499,000 then? Are we missing something in the budget making process, or did this kind of pop up out of nowhere?”

The biggest debate of the night came when board of health member Patricia Bergeron proposed an amendment to restore $23,500 to health department salaries so health department assistant Nathalie Woodruff, who was laid off last month, could be rehired.

Ms. Bergeron said the loss of Ms. Woodruff has left one person — health agent Shirley Fauteux — to run the entire department.

“The assistant administrator is so valuable to all of us. With all the things going on, from emergency dispensing sites to flu vaccinations, the board of health is hugely busy. I don’t know if we’ll be able to do it with one person — in fact, I know we won’t be able to do it with one person,” she said.

Board of health member David Caron agreed. “We have the utmost respect for everyone involved in these cost-saving efforts,” he said. “But we are talking about the health of our people here . . . nothing is more important.”

But several town leaders said they were reluctant to restore funding for one position when a number of departments were asked to make sacrifices.

“This is like a math problem; we have to come up with $499,000,” selectman Ron DiOrio said. “If this is taken separately then the next question is where does the balance come from . . . the reality is we have to cut a half million dollars, and that is what we are attempting to do.”

Selectman Gregory Coogan, chairman of the board, agreed.

“I understand they want to protect the position and keep things the way they are. But unfortunately things aren’t going to stay the way they are. This is not a fun process for anyone,” he said.

Selectman Kerry Scott supported restoring the position, calling it too important to lose. “All of us remember all the yeomen’s work the board of health did during the recent water crisis . . . they saved the day for us. It’s only a two-person office and it’s already understaffed,” she said.

The amendment was defeated and all the cuts to the budget were approved.

Voters agreed to enter into a $250,000 lease-purchase agreement for a new ambulance.

And a request to spend $50,000 for repairs to the leaching beds buried under Ocean Park was withdrawn by wastewater superintendent Joe Alosso.

Mr. Alosso said a recent round of testing at Ocean Park revealed that the damage to the leaching beds was not as bad as previously thought; hence the repairs will cost less and can be paid for from the department’s retained earnings account. “We’re not going to need to rip up the park,” Mr. Alosso said.

Voters also agreed to spend $2.4 million for the sewer expansion. The plan calls for the cost of connecting the high school, the Y and the other facilities — about $994,000 — 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 remaining cost of the project.

Mr. Alosso amended the article to allow the remaining $746,600 to be paid from the wastewater retained earnings account, and not general taxation.

There was support for the article with the main theme being protection of Sengekontacket and Lagoon Ponds. Selectman Kathy Burton cited a passage from the Island Plan which details nitrogen loading as one of the Island’s top environmental problems. “Expanding our system is not optional . . . we must expand now,” she said.

Commercial fisherman Bill Alwardt agreed.

“I would just like to know how we put a price tag on these ponds. It seems to me it’s the people who are polluting these ponds, and this does something about it,” he said. “If we lose our bay scallop fishery then generations to come won’t even know what a bay scallop is.”

Ms. Scott, who has clashed with Mr. Alosso on wastewater issues in the past, asked whether the town had a bylaw prohibiting the discharge of treated effluent near town wells. Mr. Alosso said the project would make sure the treated effluent met applicable state standards.

The wastewater article passed easily; Ms. Scott cast the lone dissenting vote.

Voters also agreed to transfer $225,000 from the old resident homesite account to the affordable housing committee; the money will be used to complete the renovation of the old town library at the corner of Penacook and Circuit avenues into affordable apartments and commercial space.

The resident homesite committee disbanded two years ago,

Brian Hughes, a former member of the committee and current member of the town affordable housing committee, said he was in favor of the spending article but not in favor of doing away with the resident homesite committee.

“I thought [resident homesite] was, and could be a great committee again . . . if the town [selectmen] want to get rid of the committee they should do it in the open,” he said.