As budget planning begins for the coming fiscal year, Oak Bluffs is projecting a budget shortfall, the chairman of the finance committee told town selectmen on Tuesday.

At the regular selectmen’s meeting Bill McGrath announced that the town is facing a $650,000 deficit for fiscal year 2012. Mr. McGrath said the town would have to bridge the gap with some combination of higher taxes, Proposition 2 1/2 overrides, spending cuts and fees. Ideas put before the board to raise added revenue included raising dump sticker fees, and even the introduction of parking meters at Ocean Park.

“Everyone seems to ignore potential revenue from parking meters,” said Mr. McGrath. “If we were to have long-term parking, say, for four hours just along Ocean Park, it would supply some revenue to the town and would also be a source for ticketing.”

Selectman Ron DiOrio applauded the suggestion, noting that the latest generation of parking meters he had seen, resembling automatic teller machines, were relatively unobtrusive.

“We need revenue from somewhere,” concluded Mr. McGrath.

But finance committee member Steve Auerbach suggested the town could do more to rein in spending and improve its bookkeeping practices.

“There has been no budget accounting for 2011 up to this point. We’re a quarter of the way through the fiscal year, we’re talking about $6 million of the budget, 2010 hasn’t been closed but there will be a shortfall,” he said. “At least from my perspective there may be a spending problem. The revenue projections were surpassed by actual revenue for 2010 which means we brought in more money, but nevertheless we have a shortage. That means we overspent, which means maybe we need to look at how we’ve been spending our money a little more closely.”

Finance committee member Mimi Davisson warned that cuts in services would be a tough sell politically for the selectmen.

“You might want to be thinking of how you’ll sell cutting library hours to four days a week or cutting town hall to three days a week from five if overrides are proposed and defeated,” she said.

In other business Tuesday, selectmen voted to approve the opening of Sengekontacket Pond to family scalloping on Oct. 1 and commercial scalloping on Oct. 4. Lagoon Pond will open for family scalloping on Oct. 30 and Nov. 1 for commercial scalloping. In outside town waters family scalloping begins Oct. 16 and the commercial season begins Oct. 18. Sengekontacket Pond, which has been closed to shellfishing all summer, reopens to all shellfishing on Oct. 1 in both Oak Bluffs and Edgartown.

Town administrator Michael Dutton announced that the Massachusetts Department of Housing and Community Development had decided to scrap its one-year plan that would have effectively barred Oak Bluffs from eligibility in applying for community development block grants which support Islanders through assistance for house rehabilitation and child care subsidies.

“The long and short of it is that this is very good news,” said Mr. Dutton.

At the outset, selectmen held a joint meeting with the Tisbury selectmen to discuss the proposed merger of police departments. The two boards agreed to contact the state Department of Revenue to request a formal financial review of the proposal.

Mr. Dutton also announced that the town had inked a final dredging contract with Edgartown for the Sengekontacket Pond project that has been stop and go for nearly a year.

Finally, the fate of the Scoot Coupes was sealed, as selectmen denied King’s Rental owner Jason Leone’s request to rent the multi-colored, three-wheeled vehicles. Mr. Leone brought the vehicles to the Island at the beginning of the summer but was ordered not to rent them by the selectmen without a license.