The city owns and operates the dam, which generates less than 1 percent of its electric power.
The Federal Energy Regulatory Commission has determined that the structure needs significant improvements to remain safe.
Officials are inviting engineering firms to submit recommendations and work plans. City manager Tom Tarkiewicz says the city council will explore all its options.
One concern is that fixing the dam would require lowering the water level in a pond that was created by the dam's construction. That could expose sediments that have become contaminated with heavy metals over the years.
The river is not a local drinking water source.