MEXICO — Selectmen on Tuesday night scheduled a special town meeting for 6 p.m. Tuesday, Sept. 13, to decide how the town wants to handle a windfall of about $705,000, and other money issues.

The windfall from the Maine State Retirement Fund that Mexico was received earlier this year.

Mexico pulled out of the Maine State Retirement system in 2004. It had been a member since about 1960. The town’s account had been inactive since the town pulled out and no municipal employee is in the system.

Town Manager John Madigan suggested in the first article to allocate the nearly $705,000 annually for five years to the debt service, with the first payment being $141,000.

The second article seeks to complement that by allocating $100,000 from the undesignated fund balance to further buy down the tax rate.

The third article would allocate $5,000 also from the undesignated fund balance to restore money for the building demolition fund.

Madigan said that fund was depleted when the town tore down two buildings.

Without the windfall, he estimated that the tax rate would increase by three mills. One mill raises it $128,583.

By using the retirement money to buy down the debt service, he believes the tax rate will instead increase by only 1.5 mills.

The current undesignated fund balance is $535,000, of which he said the town only needs to keep between 10 to 15 percent of its total budget.

“So using $100,000 from surplus will still keep us in that range,” Madigan said.

tkarkos@sunjournal.com

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