HADLEY — A smaller increase in municipal revenues, while the ambulance fund is being incorporated into the town’s operating budget for the first time, are among challenges Hadley officials anticipate as they prepare a fiscal year 2026 spending plan.

Treasurer Linda Sanderson told the Select Board Wednesday that she is projecting $802,833 in new revenues, a 3.8% increase, from $20.9 million to $21.7 million, but that is below the $1.27 million, 6.5% increase in revenues Hadley received for fiscal year 2025.

A memo Sanderson is sending to department heads advises that fiscal year 2026 revenues will be at a smaller level of increase than has been experienced during the town’s COVID recovery, and that the amount of free cash available to supplement the fiscal year budget will also be lower.

“As a result, any increases in the total general fund budget will need to be reviewed carefully and new additions will be held to a minimum,” Sanderson wrote.

But Sanderson said that department heads shouldn’t be shy about asking for what is needed to staff and run their departments.

“We want the requests that departments make to be realistic requests based on what they think their departments need, for providing the services they are charged with providing to the town,” Sanderson said.

She also cautioned that the numbers are preliminary and that more will be known in January, once half a year of revenues are known, and observed that in fiscal year 2024, revenues came in $400,000 higher than she had projected, while operating budgets came in $600,000 lower.

While not overly concerned the town is facing a difficult situation, Sanderson said it would be good to understand the priorities as a budget plan is developed.

Getting the $650,000 for the ambulance fund into the operating budget is one of those priorities, though this will need a funding plan, since that eats up all of the extra revenues that haven’t yet been spoken for.

“It’s about time we started doing it,” Sanderson said. “That’s a funding plan we will be dealing with.”

The $802,833 increase in revenues includes a $130,963 jump in local receipts, made up of excise, meals and hotel taxes, rising from $4.25 million to $4.38 million, along with property taxes going up by the allowable 2.5% to $15.75 million and state aid pegged at $1.02 million.

Econo Lodge redevelopment

In other business, the Select Board ratified a recommendation from the Hadley Affordable Housing Trust to apply $100,000 from the trust fund to support the nearly $20 million redevelopment of the former Econo Lodge hotel on Route 9 into a mix of 51 one-bedroom and studio apartments for low- and moderate-income residents.

As part of the donation, Laura Baker, Valley Community Development’s real estate development director, said the nonprofit is committing that 30% of the apartments be set aside for people living and working in town, as part of the initial lottery for the apartments, and all units will be permanently affordable.

“Thank you so much. We really appreciate your support,” Baker said.

The Select Board also agreed to hire Tammy Boutwell to serve as the building permit coordinator. Boutwell brings decades experience in administrative work to the role she will start Jan. 13. Boutwell replaces Dede Debrindisi, who recently was appointed assistant treasurer.

The appointment recommendation was brought by Human Resources Director Lauren Wilcox.

Wilcox also told the Select Board there are challenges in keeping and recruiting Department of Public Works employees, suggesting having a standing posting for jobs and the possibility of bringing on part-time help, especially during the winter. Wilcox said the town could also entice applicants by providing financial assistance for those seeking to get their commercial driver’s licenses, rather than having them pay their own way.

Scott Merzbach can be reached at smerzbach@gazettenet.com.