Searching for cheaper water

Luke Brugnara and Gilroy City Councilman Perry Woodward look

Before the city starts buying water from anyone else, officials
said they need to have a talk with the water district and proceed
carefully no matter what.
Before the city starts buying water from anyone else, officials said they need to have a talk with the water district and proceed carefully no matter what.

Mayor Al Pinheiro, City Administrator Tom Haglund and Councilmember Perry Woodward met with Luke Brugnara Friday morning to discuss the latter’s lingering offer to sell the city at least half the 3 billion gallons of water it consumes every year. The move could cut resident’s water bills between 20 and 30 percent and save the city at least $1.3 million dollars a year, $2.1 million if Brugnara’s reservoir northwest of Gilroy can hold as much water as he claims.

“All I’ve heard are reasons to do this. I haven’t heard any reason why we can’t do it,” Woodward said Friday as water trickled through a hole at the bottom of Brugnara’s 20-foot dam situated between granite walls smoothed by decades of vacillating creek flow. “Especially because we’re not talking about treating surface water here. This water recharges the city’s aquifer the same way the (Santa Clara Valley Water District) does.”

Water coming down Mount Madonna flows into the Little Arthur Creek on Brugnara’s 112-acre property and then feeds the Uvas Creek before percolating into the aquifer below Gilroy. Instead of paying the district $2.4 million a year to pump water from the aquifer (which it replenishes by releasing water from the Uvas Reservoir), Brugnara has offered “his” water for $300,000 a year – but how much exactly he has and whether everything’s legally sound remains to be seen, said the mayor.

“Brugnara’s job is to sell us something, and he’s a salesman, so therefore I always look at that. We need to be very cautious about this so we don’t put ourselves in a position where someone can’t provide us with same level of service we get from the (Santa Clara Valley Water District),” Pinheiro said Monday. “I have questions on everything from our relationship with the district to the legality of Mr. Brugnara’s water ownership.”

That’s a non-issue, Brugnara said as he sat atop the dam, picking his teeth with a stem of golden grass.

“This deal will save that family on the east side of Gilroy who really needs that extra money,” Brugnara said.

Gilroy can stop dealing with the water district as soon as it quits pumping district-provided water from the aquifer, according to the district’s legal counsel as reported by Spokesperson Susan Siravo. Just make sure the water the city consumes instead is its to take, the legal team cautioned.

“If someone stops pumping they simply do not have to pay,” wrote Siravo. “In looking to meet its water needs, the City of Gilroy needs to make sure the provider of water has the legal authority to serve the water at issue. Water rights law is a complex subject and any distribution of water needs to comply with the requirements of the law.”

Brugnara, a San Francisco real estate mogul, claims his moss-laden, cobblestone dam dates back to 1880 – 34 years before the state passed legislation making it much harder for private landowners to assert water rights. A state board also has records dating back to 1911.

Downstream from the 20-foot-tall dam, a water district monitoring station measures creek flow. Since 2000, the waterway leaving Brugnara’s property has averaged 5,353 acre-feet a year, according to data obtained from a public records request. Last year Gilroy consumed 9,020 acre-feet of water.

While the portal at the bottom of the Brugnara dam remains open as he faces federal charges for poaching endangered fish – which he vehemently denies – Brugnara said it has been closed for decades and that the 5,353 acre-feet recorded by the district comes from three smaller tributaries downstream of the dam. He claims the dam can retain 2,000 acre-feet, and depending on the weather and flow conditions, he could augment the district’s recorded flow.

Thick vegetation and skinny trees cover the upper portions of the river bank leading up to the dam, and Woodward questioned whether water levels ever actually reached the lip of the stone wall. A spillway at the top of the dam could allow water to flow downstream during the wetter winter months.

The fact that more than half the water the city needs already exits on his property, however, means Brugnara already helps recharge the city’s subterranean aquifer while the district profits off his water, he said.

The district, on the other hand, has stressed that it uses the city’s money to maintain the aquifer, and employees at the city and district have questioned whether Brugnara has the legal rights to sell.

“For pumping groundwater there is no legal option to enter into business with another water wholesaler,” said Patricia Bentson, a financial analyst with the city. “There are no legal options to dissolve services provided by the (water district).”

“Brugnara does not have any authority to charge a groundwater fee. The district does not own the water in the groundwater basin, but it manages and charges a pumping (charge) under (the 2001 Santa Clara Valley Water District Act),” Keith Whitman said recently, deputy operating officer for water supply at the district. “I can’t think of any way Brugnara can charge the city of Gilroy money for that … What he’s describing is the way the system works right now, and he’s trying to generate money from that.”

But the district generates money thanks to the natural state of things, Brugnara has argued. The state board concerned with rights has limited information about Brugnara’s alleged rights, but a spokesperson said Brugnara would probably only have to prove them if an entity such as the water district challenged him.

That is why Brugnara has consulted with Sacramento-based law firm Kronick Moskovitz Tiedemann & Girard. The firm has secured lucrative water rights for a variety of private and public clients. Securing Brugnara’s rights if the water district decides to challenge him will be “as easy as shooting a duck in a bath tub,” he said.

As the city council deals with a $6.2 million deficit, the idea of saving millions throughout the future cannot be denied – the city just needs to proceed carefully, they said.

“This almost seems too good to be true,” Woodward said atop the dam, gazing downstream.

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