RUMFORD — Selectmen held a 90-minute public hearing Thursday night on their proposed $7.75 million municipal budget that goes to town meeting referendum voters next month.

They took some questions from a few of the 15 to 20 people in the Rumford Falls Auditorium, then took turns reading through the referendum warrant before stopping after Article 18.

Town Manager John Madigan answered most of the questions from the audience.

Resident Phil Blampied sought an explanation of the undesignated fund balance. Madigan said any unbudgeted revenue streams coming in during the year go into the fund, along with unspent funds by departments that are not earmarked for carryover.

Selectman candidate Candice Casey asked for an explanation of Article 16, which asks voters if they want to raise and appropriate $148,074 for debt service and interest for fiscal year 2014-15.

Madigan explained it at length, saying the amount is what Rumford must pay to the state for employee retirement funds. He said years back Rumford officials decided to take out a bond for $1 million at a reduced interest rate to pay the state and save $190,000 rather than pay $122,000 for 22 years. The last payment will be in July 2017.

“The town voted to incur the debt, so we’re obligated to pay it,” he said.

A short discussion was held about the 7 percent interest rate to be charged on unpaid taxes in Article 4, if it is approved by voters.

Madigan explained that if the town doesn’t charge an interest rate, taxpayers could put their tax money into a certificate of deposit for two years, then pay their taxes. That, he said, would force the town to borrow money to make its payments.

“We go with the maximum (percentage) allowed by the state,” Madigan said. “It’s an incentive for taxpayers to pay on time so the town doesn’t have to borrow money. It’s proper and prudent to go for the maximum allowed so that the town remains healthy.”

Resident and Finance Committee member Rick Greene said that if Rumford didn’t put the interest rate on unpaid taxes at the maximum allowed 7 percent figure, that would encourage people not to pay their taxes.

On Article 7, selectmen had Linnell Geronda, the assessors’ agent, explain why the assessor’s office budget request was for $50,000 more than what selectmen and the Finance Committee approved as their recommendations.

Geronda said they had simply added $50,000 toward a townwide revaluation, but it was taken out of that budget and placed in a new line item in Article 17 which handles capital accounts.

Also in Article 7, General Government, Buccina and Madigan said a requested $3,000 in the computer budget request for $19,150 was for software. Selectmen considered the software a luxury item and removed it and recommended $16,150 be raised and appropriated instead.

“We were looking at keeping the budget as low as possible,” Buccina said.

Blampied brought up the code enforcement budget in Article 8 Public Safety, asking if that was going to remain at $50,252 despite code enforcement officer Rick Kent’s resignation.

Madigan said selectmen would take that up in the regular meeting following the public hearing when they considered an article to appoint Mexico code enforcement officer David Errington as Rumford’s interim code enforcement officer.

Madigan said the $50,252 recommendation reflects a full-time position, but Errington, who works two days for Mexico, would only be available to work three days for Rumford.

In Article 11, selectmen and the Finance Committee didn’t fund sewer maintenance because Madigan said that will come out of sewer system user fees.

tkarkos@sunjournal.com