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Center Line OKs status quo budget in ‘uncertain’ times

By: Brian Louwers | Warren Weekly | Published June 19, 2020

CENTER LINE — Despite a lot of uncertainty about the state’s finances and revenue sharing to local municipalities in the era of the coronavirus, Center Line officials adopted a “status quo” budget on June 1 for the 2021 fiscal year.

“The nation is in the throes of its most uncertain time that most of us can remember,” Center Line Finance Director and Treasurer Mark Knapp wrote to begin his overview of the city’s proposed budget for 2020-2021, presented along with projections for the 2022 and 2023 fiscal years. “Minimizing the risk of the COVID-19 virus has had a major impact on the citizens and businesses of each community.”

Knapp laid out the potential impact on revenue for a city that relies mostly on property taxes (65%) to fund general and public safety operations. He indicated that another 19% comes through various state, federal and intergovernmental revenue streams, while the balance of it comes from permits, programs, court fines and interest.

Property taxes, officials said, are for the most part stable. The other sources of revenue, however, could be “substantially impacted” by outside influences, including the coronavirus-related shutdowns.

City Manager Dennis Champine said other revenues from the state, however, including an anticipated influx in cash from medical marijuana businesses, should help keep Center Line fiscally solvent, along with the city’s “stable” fund balance.

But officials said the situation will have to be closely monitored and adjustments will be made as needed going forward.

“We literally are keeping everything just the way it has been. We don’t anticipate there will be any problems in regards to cuts,” Champine said. “We anticipate that we will be able to maintain everything we had last year, even with the (state) cuts.”

In his overview of the $10,375,256 total budget, Knapp said he prepared it to reflect a 10% reduction in revenue sources from pre-coronavirus projections. That includes revenue sharing, fuel taxes, permit and program fees, and court fines.

Knapp said the city’s “stable fund balance” of $2.6 million to close out the 2019 fiscal year will effectively allow Center Line to weather the COVID-19 storm.

“Because of this, we are able to absorb the projected shortfall of revenues through June 30, 2020, and have the ability to sustain the expected continuing downturn into Fiscal 2021 without the immediate need for drastic action,” he wrote in the overview. “We have time to see how we are affected by circumstances we cannot control, and we have the ability to react to those that we can.”

The budget reflects a decrease in the overall fund balance of $822,515 and a drop in the general fund balance of $347,618.

While Champine said water rates will remain the same for Center Line residents in the year to come, a slight reduction in the millage rate will save the owner of a property with a taxable value of $50,000 about $128 a year.

“We did the best we could to anticipate there are short dollars coming from the state due to the shutdown and we are hoping to be able to meet the budget as closely as possible in the coming year,” Center Line Mayor Bob Binson said.

The full budget is available for review on the city’s website at