The town of Melville is in a financial crisis. Here's why.

State officials have agreed to provide the Town of Melville with more time to resolve an ongoing financial crisis.

The crisis apparently has been caused by a municipal utility billing system failing to collect revenue for at least the last seven months.

Diane Allison, director of local government services for the State Legislative Auditor, said during a Wednesday telephone interview that the current system used by the town to properly bill utility customers is something that “has put (Melville) in the hole.”

Town council members voted Tuesday to begin formulating a financial plan guided by town accountant Donald Ford that will help reduce an expanding operational debt, increase revenue and avoid a potential financial takeover by state officials, according to St. Landry Parish President Jessie Bellard.

RELATED: St. Landry Schools could avoid end-of-year financial crisis according to new director

Bellard, who attended the town meeting, estimates that there is about $333,000 in uncollected utility revenue that is available and could be added to the Melville general fund budget. However, Bellard said the town's failure to mail out utility bills since late in 2021 has been the primary cause for the town’s current budgetary situation.

“Right now (Melville) has about $460,000 in liabilities. The town would be in a lot better shape if money had been collected on the utility bills that were sent out,” Bellard said during a telephone interview. “People have been claiming that they have not been receiving their utility bills from the town, so the state has advised the town that there is a need to come up with a plan to pay those bills.”

Stuart Dickey, a senior advisor for the State Legislative Auditor’s Office, explained in a separate interview that Melville utility customers normally are charged monthly bills for water, sewerage and gas usage.

Dickey and Bellard both separately said the Melville utility users pay flat rates for water and sewerage each month. However, the cost of using natural gas often fluctuates according to the market prices, said Dickey. Bellard noted that some Melville utility customers have been paying their utility bills, despite their failure to receive monthly notices.

“Since there is a flat rate for the water and sewerage, the cost is going to be the same every month,” said Bellard. “Some people, I understand, have been coming into the town hall and paying on their water and sewerage bills every month.”

MORE: Hundreds of Opelousas residents are illegally using city water lines, mayor claims

Allison said officials with the auditor’s office are not eager to assume responsibility for operating the town’s finances.

“The situation in Melville is one that (the auditor’s office) has been aware of for many years,” Allison added. “The town has been sending (state auditors) financial information. We want to give (Melville) some time on deciding how to put them on the right track. There is not a software system that is used for (utility) billing.”

Attempts to contact Melville Mayor Velma Hendrix by telephone on Tuesday were unsuccessful.

Allison said Ford has been given authority by the town and the Legislative Auditor’s Office to help devise a financial recovery plan and provide periodic updates that Allison expects will be included for a long-term project.

“We are going to look at the numbers contained within this plan and decide whether they are reasonable. It is our intention to let the town see this through,” Allison said.

Ford said during another individual Tuesday telephone interview that during July the town deficit for that month was $11,434. Since the beginning of the fiscal year that started Oct. 1, Ford said, the operating budget for the town has reflected an $82,702 deficit.

During the Tuesday night monthly town meeting, Ford said Melville elected officials discussed the possibility of approving state intervention for town finances or delaying that possibility and having him assist with presenting a financial strategy acceptable by the Legislative Auditor’s Office.

Ford said that his role as a de facto financial advisor for the town will include communicating with the Legislative Auditor’s Office and advising a fiscal review committee about how Melville plans to emerge from its financial situation.

“I will be trying to keep the town on a solid (financial) footing and make recommendations. It’s going to involve things like making cuts here and there and finding ways of increasing revenue. There have always been issues with water infrastructure and the billing system,” Ford said.

Ford added that there is a “significant amount” of revenue owed by customers to the town’s utility system. That is a situation that will receive his primary attention Ford said, as he performs his fiscal review.

“I know for some of these unpaid bills, the water still hasn’t been cut off. You’re supposed to cut (customers) off who haven’t paid their bills. The town needs to start reading meters and cutting people off,” Ford said.

Ford said the town’s finances have been sustained by American Rescue Plan Act funding.

Melville has received the ARPA money Ford said, for stating a need for health expenditures, lost revenues and improvements made to the water and sewer systems.

Bellard and Ford said town revenues have also been impacted by a decline in commercial retail outlets operating inside Melville.

In July, Cannatella’s a family-owned grocery and hardware store that had operated in Melville for 99 years, shutdown.

“Losing Cannatella’s was a big blow. The only place to really buy anything now in Melville is at the Dollar General,” said Bellard.

Bellard added that he has become involved with the Melville financial issue due to his concern about the survival for the town, which in 2010 had an estimated population of 1,000.

“If something isn’t done about coming up with a plan to pay bills and get more cash flow, Melville will eventually become a community,” Bellard added. “Melville is part of this parish and I would like to see Melville remain as a town.”

This article originally appeared on Opelousas Daily World: St. Landry Parish Town of Melville budget short from utilities revenue