Oak Bluffs voters are not out of the woods yet when it comes to confronting deficits in their cash-strapped town.

A $180,000 cost overrun on the town health insurance plan will require a special town meeting to transfer money to pay the bill, town administrator Michael Dutton told selectmen at their meeting this week.

The cost overrun can be tracked to poor budgeting from two years ago, Mr. Dutton said. He said 17 new people have joined the town health plan since the end of fiscal year 2009, about half of them from the Oak Bluffs School. The new members of the health plan are not all new employees, Mr. Dutton said, but mostly reflect changes from single to family health plan coverage.

The town offers plans from Blue Cross and Harvard Pilgrim. Employees pay for 25 per cent of the cost of coverage and the town pays the other 75 per cent.

On Tuesday selectmen agreed to tentatively set June 21 as a date for the special town meeting. Voters will be asked to transfer $180,000 from the town stabilization find to pay for the added health insurance costs.

Mr. Dutton said town leaders knew about the problem before the annual town meeting this year but had not sorted out all the numbers before the warrant was closed.

“We could have put it in the special [town meeting before the annual] but it was a little premature because we didn’t know exactly what the numbers would be and we were looking at deficits in other parts of the budget and trying to figure out if it was something we’d have to cover with stabilization funds,” he said. “I mentioned it at town meeting so hopefully it won’t come as a shock to anyone.”

In other business Tuesday a proposal from Dragonfly Gallery owner Don McKillop to close a portion of Dukes County avenue during two arts stroll events this summer raised the ire of neighbors in the area that has come to be known as the arts district.

The stroll is scheduled for Saturday, July 9, and again on Saturday, August 13 from 4 to 7 p.m. Neighbors complained that increasing parking difficulties, traffic safety and stroll participants drinking wine in the streets were making it an increasingly unwelcome event.

“This is a neighborhood,” said Catherine Deese. “Business has infringed on it and now I think it’s infringing a little too much on this neighborhood,”

“We’ve seen this event grow tremendously,” said Dukes County avenue resident Brian Packish. “We have extreme parking issues on Dukes County avenue. This has grown way out of proportion. This is not Illumination Night, this is not the fireworks, this is not the shark tournament, it’s a very small group, only four properties. All I know is that if the A.C. [Atlantic Connection], Linda Jean’s and Sharky’s hijacked the road at their discretion there would be 5,000 people in here screaming and yelling. The truth of the matter is it’s time to review the event as a whole with a board that we voted for with change.”

Renee Balter tried to put the event in some perspective.

“We have over 4,500 acres in Oak Bluffs and 11 acres are B-1 zoning,” she said. “Dukes County avenue is zoned B-1. It’s a short season, it’s a tight season, the weather affects us. Each little business tries its hardest to stimulate business and have people come from all over the Island and participate in their galleries or their shops or their restaurants. It’s always been a problem. It’s always been commercial right next to residential. I think it is upon us to figure out some way to try to live together and help one another and not be at odds.”

Barbara Hoyle had another view. “I think this a chicken or the egg thing and the people who live there feel like they weren’t consulted,” she said. “We have an arts district and we don’t know how it happened.”

Selectmen set the issue aside for their next meeting.

A Boston-based Segway tour company returned to the selectmen to discuss starting a tour business in Oak Bluffs. The tours would run with six people per guide and ride single file on town sidewalks and streets. The Segway representatives emphasized their commitment to safety, including the use of helmets and a required half-hour safety demonstration. Police chief Erik Blake said he had no problem with the plan, and said the tour company had been working with him to find a workable route. Still, selectmen were skeptical.

“I’m still not comforted,” said Gail Barmakian. “When I came here, I’ll be honest with you, I thought this was nuts and we don’t need anything else on the roads,” said selectman Greg Coogan. “We’ve had terrible luck with mopeds. It really concerns me to add one more thing to the roads. That said, in listening to what everyone said tonight my mind is changed.”

Selectmen will take the issue up at their next meeting; they asked town administrator Michael Dutton to check with officials in Boston and Cambridge who had experience with the vehicles.

Selectmen also reappointed Paul Humber, Fred Huss and Mark Landers to the shellfish committee, appointed officer Steven Conley as deputy emergency management director and appointed Mr. Conley and officer Jeff LaBell port security officers. The board also approved a new store at 55 Circuit avenue, Philip Tucker’s Made Here on the Vineyard, a new hair salon, Circuit Style, which replaces an existing salon, and a new livery service run by Mark Leith and Susan Bennett.