After financial woes that led to a free cash deficit of nearly $1 million, the Oak Bluffs town administrator said this week that the town ended fiscal year 2012 on a much more positive note — still in the hole, he said, but steadily climbing out.

During a fiscal year 2013 financial update at Tuesday’s selectmen's meeting, town administrator Robert Whritenour outlined the financial problems the town previously faced: deficits combined with under-funding for budget line items “created havoc in balancing the fiscal year 2012 budget,” Mr. Whritenour said, and he said it will take years to fully overcome impacts from the recession.

Mr. Whritenour will provide a financial update at the special town meeting planned for Nov. 13.

Going into fiscal year 2012, the town had a free cash deficit of more than $888,000, which Mr. Whritenour said was a large number for a town the size of Oak Bluffs. And while the state Department of Revenue will determine the amount of free cash the town now has, the target is about $400,000 in the red, Mr. Whritenour said.

“We’d be satisfied with that,” he added, and said he hopes the town will have a positive amount by fiscal year 2014.

There were other gains: a general cash deficit of more than $434,000 was reduced to a deficit of about $115,854, he said.

Local estimated receipts, which account for 25 per cent of the budget but “95 per cent of the problems,” Mr. Whritenour said, are also on the rise. For fiscal year 2011 the town had collected $180,000 less than expected, he said. For fiscal year 2012, the town had received $335,511 above estimates.

Mr. Whritenour said this was part of the plan to fix the budget: the town lowered revenue estimates to achievable amounts, limited spending, cut about $304,000 from the 2012 budget and committed to not raising taxes.

The town also found and eliminated existing account deficits, which was “absolutely needed to bring the town back into black,” he said.

Mr. Whritenour noted that Oak Bluffs was the only Island town to set its 2012 tax rate and send out tax bills on time.

In other business, finance committee vice chairman Bill McGrath outlined a town capital improvement plan for the next five years.

Projects slated for the coming fiscal year include $250,000 for building maintenance as well as $40,000 for preliminary architectural studies for the town hall and a new public safety building.

Building maintenance projects include replacing the roof of the police department and town hall, panting the police department and the library, and HVAC improvements at the library and town hall.

In the coming fiscal year, $614,000 in ambulance reserve funds is slated for police, fire and emergency vehicles and $25,000 in community preservation funds will go toward an East Chop stabilization study. Both projects have already been approved by town meeting, Mr. McGrath said.

Future projects that will come before voters include a new public safety building, scheduled for a fiscal year 2014 debt exclusion bond, a marine fuel facility, also slated for fiscal year 2014, plus a $2.5 million town hall renovation and Farm Pond restoration.

Mr. McGrath said other projects, including road paving projects, Oak Bluffs school improvements and wastewater projects will be included in future capital improvement plans.

The selectmen also approved a proposal to file an application for community preservation funds for a sailing camp trail project. Conservation agent Liz Durkee said the sailing camp’s 15 acres of land would benefit from a trail system for walking to the beach and views of the lagoon.

The selectmen unanimously supported the suggestion. Selectman Walter Vail suggested an exercise station.