The property has been rented for nearly this entire time.The house has a good amount of deferred maintenance, is not updated, and has some water damage which we only recently (two weeks ago) became aware of.

For Fire damage, smoke damage, black water, broken pipes and other disaster clean ups we recommend Jim Seubert @ Pride Cleaning and Restoration 618-792-0465.

How should I tell him to terminate his electric, water, and garbage bill? 

Eligible property includes 1) Computer software that is depreciable 2) Qualified leasehold improvements property 3) Water utility property and 4) MACRs property that depreciates over 20 years or less.

Kitchens need remodeled every 10-15 years to maintain high rents, roofs go bad, HVAC, water heaters, etc.  5% will likely not be enough to cover these items when they come up.  

It's not on the water, but walkable to  a beach and part of a HOA with marina (no deeded slip but access to boat ramp).

(Ex: I would like to replace the old plumbing with PEX, I would like to add a bed/bath in the attic of the upper unit and water heaters and boiler are on the older end of their life cycle.)  

But if you have a brand new roof, a brand new water heater, etc. then you shouldn't have to replace those in the first few years after owning.

I get copies of the water bill for the townhouse I have a tenant in.

Its in Missouri, city water and city sewer. 22 pads all rent for $700 (POH) and currently all full.