HATFIELD — Between putting $100,000 toward the development of an eight-apartment building, with two homes to be set aside for low- and moderate-income residents, and establishing an affordable housing trust fund, residents took steps toward increasing Hatfield’s housing stock at annual Town Meeting Tuesday.

At a meeting at Smith Academy gymnasium that lasted just over two hours, there was little discussion of the $16.43 million operating budget for fiscal year 2027 or a proposed bylaw giving the town some local control over battery energy storage systems. Some concerns were raised, however, about using $721,174 in free cash to fund both budget items and one-time expenditures.

In a town where only 2.7% of the housing is in the state’s Subsidized Housing Inventory under the state’s Chapter 40B law, residents agreed to transfer $100,000 from the Community Preservation Act account to assist Michael Bartlett with a development at 7 Elm St.

Bartlett, who said the last subsidized housing built in Hatfield was the Capawonk senior apartments in 1970, explained that the money will go toward predevelopment costs of the apartment building.

“This is the type of project we should be supporting,” said Kerry Flaherty of Primrose Path.

CPA Committee Chairman Steve Touloumtzis said the panel saw Bartlett’s proposal as a model for what could be done in town.

For former moderator Joe Lavallee, the development is better than having a large-scale developer try to force a project that would be unacceptable to the town’s culture, referencing the possible redevelopment plans for the Kittredge Estate in Leverett.

Lary Grossman of King Street said the town needs to think much more globally about housing and how to provide more options for people.

The affordable housing trust fund was also formed, establishing a board of trustees to oversee housing funds, and could apply money to create and preserve affordable housing.

Having this in place will give more guidance for future affordable housing initiatives.

Concerns were raised by Michael Cahill of North Street, but his amendment to narrow the scope of the trust fund was rejected after attorney Alan Seewald, providing legal advice for the town, suggested it could compromise its adoption.

Cahill also raised concerns about using free cash, starting with $42,076 to cover unanticipated snow and ice spending and various other expenses.

While there is concern about a structural deficit, Finance Committee Chairman Sean Barry said the $337,831 remaining will get through one more year, but the town can’t handle continued 60% increases in health insurance.

“There’s no doubt we’ll have to make some changes in the financial picture of the town over the next two years,” Barry said.

Voters used $50,000 in free cash to cover most of the $70,000 the town expects to be billed by South County Emergency Medical Services for backup ambulance service.

Town Administrator Andrew Levine said the town will need to figure out a long-term plan for covering these costs. “We need to create that plan this year,” Levine said.

Another $50,000 will go toward consultant studies that will help look at the long-term stability, reorganization and shared services across all town and school departments. What opportunities are out there is unclear, with one resident asking if this would be similar to the failed Hampshire Council of Governments. Barry noted that the opportunities for Hatfield may be with Franklin County towns, due to their more similar size.

The establishment of a special education fund was a concern for some voters, who pointed out the schools were able to bring in the exact same budget, at $6.28 million, but this special education fund will allow the schools to spend more money.

But Chairwoman Christy Boudreau said there have been unprecedented costs of special education and the schools had to pull $223,000 from school choice revenue this past year to cover gaps.

Superintendent Conor Driscoll said all known special education costs are included in the proposed budget “but we don’t know what we don’t know.”

One of the longer discussions centered on the continued restoration of Day Pond, the water body on the Smith Academy property, and the $28,500 in CPA money for that, including whether the work would make the site handicapped accessible.

Other spending included $100,500 for a mini-loader that Highway Superintendent Marlo Warner said will have multiple purposes and be used year round and $60,000 for getting the Elm Court annex building into usable shape, such as storage for the Council on Aging van.

Planning Board Chairwoman Stephanie Slysz spoke to the battery-energy storage bylaw, noting the town can’t ban them outright, and with an expedited state process having a bylaw in place allows the town to be proactive.

After Moderator Bobby Betsold called the meeting to order and offered opening remarks focused on the importance of civility, Select Board Chairman Ed Jaworski read out the dedication of the annual town report, in memorium, to Richard O’Dea.

A 1960 Smith Academy graduate and lifelong Hatfield resident who died last September, O’Dea served on the town’s finance committee and the board of trustees for Smith Academy, and coached his daughter’s youth softball and basketball teams. O’Dea worked as a business manager for WGGB television station in Springfield for 28 years, retiring in 1999.

Police Chief Michael Dekoschak presented a citation in O’Dea’s honor to his widow, Janet, who was in the audience for the meeting.