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DISCUSSION: <br /> The joint meeting of the Utilities Commission and the HPC should be used as bases to discuss the future <br /> of the Jackson Street Water Tower. The tower is in need of repairs and paint. The decision to restore or <br /> demolish the tower has continually been tabled during the last decade. The decision cannot be postponed <br /> indefinitely. The concrete foundations that the legs are attached to are deteriorating and would need to be <br /> inspected by a structural engineer to determine their integrity if the water tower were to hold water again. <br /> The top needs to be welded to the tank. The paint is lead based and will need to be removed prior to <br /> repainting. The approximate cost of repairs, paint removal,and repainting is$400,000. (See the attached <br /> budgetary quote for the paint removal and repainting.) Evenly distributed amongst the water customers <br /> would cost each customer approximately $90. The tower would need to be painted again in <br /> approximately 10 years. This next painting would cost significantly less because there wouldn't be any <br /> lead abatement costs. The tower is not currently on the insurance schedule. It is not yet known what the <br /> registration as a historical site would do for the cost to insure or if it would then be required. The cost to <br /> insure the other towers ranges from$400 to$725 annually. The cost to demolish the tower has been <br /> estimated at$35,000. The cost to restore the tower is not budgeted,nor is it included in the capital outlay <br /> forecast that was used then the Commission decided not to raise water rates for 2010, 2011,and 2012. If <br /> this restoration were done,the costs borne by the Utilities would need to be passed through the rates in the <br /> form of a rate increase. The ongoing maintenance costs, including the repainting in 10 years,would also <br /> need to be worked into the water rates through the form an increase. The 2011 budget included$35,000 <br /> for demolition of the water tower. This amount was a budgetary quote that has been carried over from <br /> previous years and would need to be reviewed. <br /> If the tower is registered as a historic site,there may be opportunities to apply for grant money to help pay <br /> for restoration. Typically these grants do not cover 100%of the costs,but rather they require a matching <br /> contribution. <br /> A decision to register the water tower as a historic site will be followed by a decision of who should pay <br /> for the initial costs and the ongoing maintenance costs. Even if there were grant money,there would be <br /> matching obligations for someone. Should these costs related to a historic landmark be borne by the <br /> water customers through fees,the residents through taxes, independent fundraising,or a combination? In <br /> 2002, it had been proposed by one of the Commissioners that the tower be sold to the HPC for$1. In <br /> 2008 it had been discussed that the tower could be sold to the HPC for$1 and the Utilities could <br /> contribute the amount it would have cost to demolish the tower toward the restoration. <br /> There is still the option to find other uses for the tower to generate revenue to help offset costs. It is not <br /> likely that a communication company would want to attach antennas to this tower due to its location and <br /> height. However,the tower has not been marketed for that use recently. There may be an option to use <br /> the tower for effluent water from the waste water treatment plant. This would require some capital outlay <br /> for infrastructure to get the effluent water to the tower and then infrastructure to distribute the water to <br /> customers. This would also require pump equipment to fill the tank. The costs to restore the tower would <br /> not include painting the interior of the tank. This would need to be done if the tower were to hold water <br /> again. Also,there may be opportunities to do fund raising events to generate the required revenue to <br /> restore the tower. These options have not been explored by the Utilities as the utilities are not geared <br /> towards organizing and running these types of events. <br /> ACTION REQUESTED: <br /> Staff requests direction from the Commission on the Jackson Street Water Tower for purposes of budget, <br /> rate design,and capital outlay forecasting. <br /> 80 <br />