5.1. ERMUSR 06-14-2011 - Laserfiche WebLink

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The joint meeting of the Utilities Commission and the HPC should be used as bases to discuss the future of the Jackson Street Water Tower. The tower is in need of repairs and paint. The decision to restore or demolish the tower has continually been tabled during the last decade. The decision cannot be postponed indefinitely. The concrete foundations that the legs are attached to are deteriorating and would need to be inspected by a structural engineer to determine their integrity if the water tower were to hold water again. The top needs to be welded to the tank. The paint is lead based and will need to be removed prior to repainting. The approximate cost of repairs, paint removal, and repainting is $400,000. (See the attached budgetary quote for the paint removal and repainting.) Evenly distributed amongst the water customers would cost each customer approximately $90. The tower would need to be painted again in approximately 10 years. This next painting would cost significantly less because there wouldn't be any lead abatement costs. The tower is not currently on the insurance schedule. It is not yet known what the registration as a historical site would do for the cost to insure or if i[ would then be required. The cost to insure the other towers ranges from $400 to $725 annually. The cost to demolish the tower has been estimated at $35,000. The cost to restore the tower is not budgeted, nor is it included in the capital outlay forecast that was used then the Commission decided not to raise water rates for 2010, 2011, and 2012. If this restoration were done, the costs borne by the Utilities would need to be passed through the rates in the form of a rate increase. The ongoing maintenance costs, including the repainting in ] 0 years, would also need to be worked into the water rates through the form an increase. The 2011 budget included $35,000 for demolition of the water tower. This amount was a budgetary quote that has been carried over from previous years and would need to be reviewed. If the tower is registered as a historic site, there may be opportunities [o apply for grant money to help pay for restoration. Typically these grants do not cover 100% of the costs, but rather they require a matching contribution. A decision to register the water tower as a historic site will be followed by a decision of who should pay for the initial costs and the ongoing maintenance costa. Even if there were grant money, there would be matching obligations for someone. Should these costs related to a historic landmark be borne by the water customers through fees, the residents through taxes, independent fundraising, or a combination? in 2002, it had been proposed by one of the Commissioners that the tower be sold to the HPC for $1. In 2008 it had been discussed that the tower could be sold to the HPC for $1 and the Utilities could contribute the amount it would have cost to demolish the tower toward the restoration. There is still the option to find other uses for the tower to generate revenue to help offset costs. It is not likely that a communication company would want to attach antennas to this tower due to its location and height. However, the tower has not been marketed for that use recently. There may be an option to use the tower for effluent water from the waste water treatment plant. This would require some capital outlay for infrastructure to get the effluent water to the tower and then infrastructure to distribute the water to customers. This would also require pump equipment to fill the tank. The costs to restore the tower would not include painting the interior of the tank. This would need to be done if the tower were to hold water again. Also, there may be opportunities to do fund raising events to generate the required revenue to restore the tower. These options have not been explored by the Utilities as the utilities are not geared towards organizing and running these types of events. ACTION REQUESTED: Staff requests direction from the Commission on the Jackson Street Water Tower for purposes of budget, rate design, and capital outlay forecasting.