DECATUR - Real estate property tax revenue will flow into the Olde Towne Redevelopment District's coffers faster than anticipated and will allow city officials to more quickly plow those funds back into upgrading downtown and the near west side.

In 2002, the city received $324,901 from the district. That figure increased to $554,979 in 2003 and to $790,775 for last year, money the city will not get until property taxes are collected by Macon County this year and disbursed.

Assistant City Manager Dane Bragg said he projected the Olde Towne funding would decrease slightly when the fiscal 2006 city budget was assembled earlier this year, though he believed it would increase.

"I wanted to be conservative," Bragg said. "But I didn't expect it to increase that much."

The tax increment financing district overlying the Olde Towne district is doing what it was designed to accomplish, Bragg said. As the district builds up, property tax revenue should increase, he said.

The city has plans for residential rehabilitation, capital development downtown and infrastructure improvements in the district, all of which should further improve the cash flow, Bragg said.

The good news for the city means some property owners in the Olde Towne area are taking a hit in their wallets because of a tax shift that was partially precipitated by the state legislature's 2004 action to increase the homestead and senior exemptions and the senior assessment freeze. Those measures, which only apply to owner occupied houses, were hailed by state officials as providing tax relief.

"We've had some calls and some people are unhappy," Bragg said. "But I've explained to them that their tax bill was going to go up anyway. It's a question of how it is paid out."

The city council recently authorized staff to seek $3.1 million in loans to be used for Olde Towne improvements. Of the total, $2.6 million would be a line of credit to redevelop the West Main Street corridor from Church Street to Fairview Avenue. Another $500,000 would rehabilitate and restore buildings along the corridor.

The real estate taxes the city gets annually from the tax increment financing district will be used to repay the loans, a process city officials estimated might take six years. Bragg said it now appears repayment could be done in less time.

The Olde Towne district's total assessed value was $26,023,695 on Oct. 24, 2000, when it was created, declined sharply and then started to increase again. By last year it had grown to $24,504,721. The steady increase in the valuation the last two years has driven the sharp increases in property tax revenue to the city.

The Olde Towne district is overlaid by a tax increment financing district. As assessed valuations increase on properties within the district, additional real estate tax revenue is generated. That additional revenue is not distributed to all local governments within the district but is given to the city during the 23-year life of the district.

The city must use that money for improvements within the district.

The Olde Towne district is generating more money because of a tax shift, said Steve Bean, county clerk.

"If you own a business or a rental property within the district, you're picking up more of the tax burden," Bean said, noting the city's tax levy has not decreased but the total valuation has been held down on owner occupied houses because of the state legislature's action.

The shift was aided by 2004 being the quadrennial reassessment year in Decatur Township, when assessed valuations of all properties were supposed to be reviewed and adjusted.

With 27,000 parcels in Decatur Township, it was impossible to reassess them all in one year, said Daysa Miller, county supervisor of assessments. But a substantial part of the Olde Towne district was reassessed for 2004, she said.

"We hadn't been in that area in some time," said Bruce Owen, Decatur Township assessor. "We see properties selling for more than they are assessed. We have to look at them. Our basic mandate is the assessed valuation has to be based on market value."

The city's efforts to improve the area have been supported by the Near Westside Restoration and Preservation Society, a neighborhood action group. It has used federal funds received through the city and an offshoot, the Community Housing and Development Corp., to rehabilitate houses which were sold to low- to moderate-income people.

Corporation administrator Duane Potter said the federal funding has run out but NWRAPS has some money of its own and continues to look for possible rehabilitation properties along West Main Street.

The city is supposed to soon call a meeting of its tax increment financing district advisory committee, on which he serves, to discuss the possibilities for improvements in the Olde Towne district, Potter said.

Ron Ingram can be reached at ringram@herald-review.com or 421-7973.