RUMFORD — Auditor Ron Smith told selectmen Thursday night that the town’s finances are “rock solid.”

Smith, of Buxton, reported his findings on the 2009-10 audit of the town. He was hired to review the books and a prior audit completed by Harold Blake, of Hallowell, whose license to conduct municipal audits has been in dispute.

Although Smith said Rumford is better off financially than many towns, he also recommended that the town be proactive if the future should include a major change in the paper mill.

“The paper mill is one-third of the tax base. As much as they are good neighbors, it poses problems when a mill is challenged,” he said.

He said that fewer than 10 communities throughout the state have such a large percentage of taxes paid by one company.

“Look at the fund balance and put some money in a credit reserve,” he said.

Rumford has enough money in various capital, designated and undesignated accounts to cover bills for nearly a year if the mill should suddenly stop paying taxes, he said.

He also said the town should establish a number of policies to govern other parts of municipal finances, such as including the amount of fixed assets and establishing additional capital plans to meet future needs.

“Rumford has a lot of infrastructure,” he said.

Another recommendation called for ending the tradition of reselling town purchases to individuals or private companies.

“It is unclear to us whether or not sales tax is charged to the vendors or how the town determines a fair cost to be charged. The town should discontinue this practice immediately and use purchased town goods strictly for town business,” he wrote in the management letter presented to the town manager and Board of Selectmen.

“It’s all a matter of perception,” he said.

Other recommendations included cross-training town office personnel so that a backup would be in place if the current financial officer is unable to perform her duties and setting up short- and long-term capital plans.

Also on Thursday, Town Manager Carlo Puiia said the trees growing along the sidewalk on Congress Street must be removed and replaced. He said further discussion on the matter will take place at a later date.

He announced the resignation of Dennis Breton from the Planning Board. Breton has been on the board for 21 years. The resignation of alternate Animal Control Officer Anne Simmons-Edmunds was also announced.

Puiia said several long-term board members and employees will be honored at a board meeting in September.