The Massachusetts Department of Revenue has directed the town of Oak Bluffs to slash spending nearly $240,000 in the current budget in order to reduce a deficit that has plagued the town for two years. The town will schedule a special town meeting in the coming weeks to decide where it will trim the already strained budget.

In a press release on Wednesday town administrator Michael Dutton said that Oak Bluffs taxpayers would not be receiving their third and fourth quarter tax bills until the town sets its tax rate sometime in February, after the special town meeting which has yet to be scheduled.

Oak Bluffs currently faces a $238,000 deficit.

On Thursday the chairman of the Oak Bluffs board of selectmen, Duncan Ross, told the Gazette that the shortfall was a result of overly optimistic revenue projections as well as a decrease in state reimbursements.

The Department of Revenue has told the town either to cut its budget or borrow from its stabilization fund to offset the deficit. Mr. Ross said the town was unwilling to borrow from a fund from which $107,510.50 already was used recently to cover the residential placement of two Oak Bluffs students.

Instead cuts must be made, he said, already predicting a general override question would face voters at the annual town meeting in April.

“Most of the [departmental] budgets that I have seen are really down to the bare bones and there’s not much more you can take out of it,” said Mr. Ross. “So we’re looking at the possibility of cutting back on services and personnel.”

Mr. Dutton’s statement said the town has already made a number of cost-saving measures. “We have already gone from 13 people in the financial areas to five. We have cut the shellfish department down to one, with some additional part-time help. The town will have to decide either to give up some services, increase taxes, or a combination of both.”

A number of unfilled positions, such as the town zoning board administrator, which recently was vacated by Adam Wilson, and the finance director position, which has been empty since Paul Manzi’s death in October, may remain so, at least temporarily.

Unfilled positions would save the town roughly $140,000, but additional reductions to the fiscal year 2011 budget are needed. Mr. Ross said those may come in the form of reduced hours at the library or at the council on aging.

“I certainly wouldn’t want to wipe out any of them but we might have to cut back on the number of hours they’re open,” he said.

On Thursday Mr. Dutton called the town’s fiscal problem “structural” and said that spending would have to be curtailed in the future.

“The last number of years we’ve been right up against the levy limit of how much we are allowed to tax,” he said. “Most towns have a little buffer for exactly this reason, that is, when the revenue does not meet expectations.”

Feeling the pressure, in November selectmen voted to raise dump sticker fees, and at a special town meeting later in the month residents voted to raise a number of town clerk fees along with the hotel room occupancy tax, which jumped from four to six per cent. A move to reduce the board of selectmen from five members to three, in part to save money, was voted down at the same meeting. One suggestion to raise town revenue floated by financial committee members at a meeting with selectmen this fall was installing parking meters along Seaview avenue but Mr. Ross backed off the suggestion on Thursday.

“Don’t get me wrong, I’m not suggesting that we put up parking meters or anything like that; I think the summer people pay enough already,” he said, “but we’ve had some discussions about creating specific parking spots, say, for example, across from Our Market by Sunset Lake, and renting those out to merchants in town for a season at a fee of $500 or $1,000, or somewhere in between.”

Wednesday’s press release makes clear there will be no easy way out of the town’s fiscal hole.

“The selectmen will need to make unpopular choices in order to cut an already sparse budget,” it reads.

“At the same time, we have roads and buildings in poor repair and equipment on its last legs. Each year we defer maintenance it will cost proportionally more to fix or replace later on.”

Mr. Ross echoed those concerns on Thursday.

“I think it’s important for people to know because we are in this predicament that it’s not going to get any better,” he said. “We probably are going to be looking for a general override in April with the understanding that if the voters don’t pass it there are services that will be lost.”