Oak Bluffs is not out of the woods yet with its severe financial straits. Deep deficits remain, including a $252,822 operating shortfall for the current fiscal year, the newly-appointed interim town administrator said this week. But Robert Whritenour, meeting in public with the selectmen for the first time on Tuesday night, said that he has now a clear picture of the problem, which is the first step toward solving it.

“The number one goal was to have an analysis of results of operations for fiscal year 2011 . . . we’re trying to pinpoint all of the revenues, what’s available to spend, and determine our exact financial position to date,” said Mr. Whritenour. “Based on that final position we can make the necessary budget adjustments to set the tax rate, and that means eliminating deficits.”

The former Falmouth town administrator stepped into the Oak Bluffs post last week.

“The budget has to be completely balanced,” he told the selectmen on Tuesday night. “Measure twice, cut once. We want to make adjustments to set the tax rate to be final adjustments, and have no additional deficits moving forward.”

The tangled financial picture that Mr. Whritenour is now unraveling dates back at least three years. In addition to the $252,000 deficit in the current fiscal year budget, there is a carryover deficit of $338,790 from fiscal years 2010 and 2011, all of which needs to be cleaned up before proceeding with next year’s budget, he said.

Mr. Whritenour said among other things the town had failed to anticipate increased state and county charges, miscalculated the correct number of payroll weeks and overestimated projections for local receipts.

Where the money will come from or what line items will be cut to close the gap is not known yet, and Mr. Whritenour made no suggestions for specific cuts. Last week the selectmen identified $175,000 that could come from cutting the ambulance transport fund, slashing the selectmen’s budget, tightening spending on town health insurance and eliminating a reference librarian position. Mr. Whritenour said the selectmen had found a good place to start.

“The bottom line is I’m very confident where you stand with revenues,” he said. “You have a good plan in place for how to reduce the budget without further damaging local services. There’s reason for cautious optimism as long as we continue to be conservative.”

Voters approved a $24.6 million budget in April but the town only received $24.4 million in revenue.

There are three major sources of revenue for the town budget: 81 per cent comes from property taxes, 16 per cent comes from nonproperty tax local revenue, and two per cent comes from state aid.

Mr. Whritenour said state aid funding took a large hit this year.

“I think it’s comical the way state aid works, the way the state can set adrift communities like Oak Bluffs,” he said of the $1.2 million the town received last year, much of which goes to the school budget.

One of the largest line items underestimated by the town was the state aid payment of $163,000 to the Martha’s Vineyard Public Charter School. There are currently 37 Oak Bluffs students who attend the charter school from kindergarten through high school, but school director Bob Moore said yesterday the underestimate should never have happened. Charter school enrollment is capped at 180 students and the percentage of how much the school receives from state aid is the same every year.

“They already knew that number, they knew it three years ago, there’s no way they could have projected it incorrectly,” Mr. Moore said. “If the number is generally around 38 or 39 students, how can you misproject that? The number has been the same more or less for the last five years.”

Mr. Whritenour said yesterday that the town is evaluating where it stands with its deficits, and the state aid to the charter school is another adjustment to make for fiscal year 2012.

“There was an underestimate in the tuition that the town pays to send students who elect to attend the charter school,” he said. “They take the money automatically out of state aid, it’s money we had anticipated receiving from the state that we’re not going to receive from the state. We need to do a long-term study so we understand all charter school issues better.”

The town has a payroll deficit due to miscalculation of pay periods. Mr. Whritenour explained that in any given normal fiscal year there are 52.2 pay periods. The town only budgeted for 52 pay periods, and as a result ran up a payroll deficit of $141,000 from fiscal year 2011.

“In addition to that we have to take the .2 and put it in the 2012 budget, so every year we move forward we account for the .2,” he said “We have to make up the problem and prevent it from happening again.”

Mr. Whritenour expressed confidence the town will right itself and is making steps in the right direction.

“We’re scouring the budget and working with boards to identify potential areas [to cut],” he said. “It’s a huge step knowing exactly where things stand and where we need to be based on scope and magnitude of what we’re dealing with. I’m extremely confident we’ll be able to put together a program that reduces the budget to where it needs to be and keeps the town on a sustainable footing.

“It will be very telling moving forward to fiscal year 2013 . . . to be able to sit here and look forward to the process for 2013; I think that really bodes extremely well for the town because we can now begin intermediary financial planning.”