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Steamboat Springs — Hayden trustees told the town manager to keep pursuing stimulus money for a second water storage tank.

At its meeting Thursday, the Hayden Town Board of Trustees told Russ Martin that the project was worth the risk that it won't get funding from the American Recovery and Reinvestment Act. Design for the project could cost $75,000, and Hayden already has spent one-third of that.

The water storage tank, which probably would be built near Yampa Valley Regional Airport, is expected to cost $2.5 million. The town could get as much as $2 million in stimulus money. If the town wants to keep moving, it must move now, Martin said.

"They literally have to have a 60 percent design by May 27, and they will have to have a 100 percent, final design by the end of June," Martin said. "This is the game they're putting us in, and if we want to do it, this is what we've got to do."

If the town gets $2 million for the $2.5 million project, that could mean water rate increases, Martin said. It's too soon to know how much those hikes would be, he said.

Trustees unanimously urged him to go for it.

"It's really vital, I think, for the community to have a double system," Trustee Bill Hayden said. "A lot of communities have two water tanks or more for the redundancy."

Trustees acknowledged the negative impact to town finances, however.

"It's kind of a Catch-22," Trustee Tom Rogalski said. "It's a bad time monetarily, but it's a golden opportunity. : We need to get it done."

Also at Thursday's meeting, board members approved incentive policies for commercial and residential construction.

The Town Board can opt to return 20 percent of building fees to businesses that start in, relocate to or expand in Hayden. The town also could choose to return as much as half of use, property or sales tax to those businesses for as many as four years.

"This policy is something that we are pleased to work with you all to generate," said Rodney McGowen, chairman of the Hayden Economic Development Commission.

Martin said he was pleased with the policy.

"It's one that puts Hayden on the map, and it should," he said.

The residential incentives were trickier for the town. Under those incentives, builders could delay the payment of some building fees and tap fees until the town issues a certificate of occupancy.

Trustees were concerned about abandoned developments or residences that are under construction for years before that certificate arrives.

"It just seems like there's plenty of opportunity for abuse there," Rogalski said. "They're hooked up, they haven't paid a tap fee, there's nothing to say they can't use that water, and they will. : They basically got a free ride until such time as the house sells."

Trustees opted to add language saying the town had the right to collect on those fees if it saw fit - if there was a problem, for example. The residential incentives expire in six months but could be renewed.