The Inverness Public Utility District received a $1.2 million state grant to replace the last of its leaky redwood water tanks.

The grant from the State Water Resources Control Board is part of a drought relief program for small communities. Wade Holland, IPUD’s customer service manager, said the district is considering how best to use the windfall, which is meant for tanks on Perth Way and in Seahaven.

The Perth site has three redwood tanks that each hold 10,000 gallons, along with a 100,000-gallon steel tank constructed in 1965 that will soon need to be replaced. The site could be completely rebuilt with additional funding, Mr. Holland said.

“We refurbished the steel tank once, and it’s not going to last forever,” he said. “With $1.2 million in gift money, this might be a smart time to replace it.”

The district has a total of 10 tanks at five sites that hold just enough water to last about a week. The new tanks might allow for slightly more capacity, but a significant expansion would be extremely expensive due to high land costs, Mr. Holland said. There are also few locations to add storage, as tanks must be located on high-elevation parcels above customers.

The district has contracted with Brelje & Race, a Santa Rosa civil engineering firm, to consider different options for replacing its remaining redwood tanks.