The man under indictment and accused of poaching endangered fish
from the creek running through his Gilroy property offered to cut
residents’ water bills by nearly half last summer, but the city
rejected the deal.
The man under indictment and accused of poaching endangered fish from the creek running through his Gilroy property offered to cut residents’ water bills by nearly half last summer, but the city rejected the deal.
Gilroy declined to buy water from Luke Brugnara’s private reservoir after the Santa Clara Valley Water District told the city he was under investigation by federal and state authorities.
“We were told that he was being investigated,” said Operations Services Manager Carla Ruigh, adding that further correspondence with the district led the city to rebuff Brugnara: “We basically said, ‘No.'”
But Brugnara – a San Francisco commercial real estate magnate believed to be worth about $250 million – claims the authorities were investigating him because he offered Gilroy a deal the water district could not compete with, so the district pulled some legal strings.
“The water district has got Gilroy for millions every year, that’s why,” Brugnara said.
Investigators who were willing to comment, and letters among Brugnara, Gilroy and the water district paint a different picture, however.
“I think Brugnara’s just looking for people to blame,” said Kyle Kroll, a warden with the California Department of Fish & Game, who discovered a blocked dam and an improperly maintained fish ladder on Little Arthur Creek on Brugnara’s property in January 2007, according the federal indictment.
“This is the first time I’ve heard this claim (of political retribution),” Kroll said. “We discover a lot of our violations through pro-activity, walking the tributaries and poking around.”
But Brugnara, 44, claims investigators told him if he removed the dam, then they would drop the investigation, which means they don’t care about the fish, he said, just the accumulated bargaining power he has behind the dam. Brugnara also pointed to the Christopher Ranch spill in February 2007, when wastewater killed several hundred fish, including at least nine steelhead. The garlic grower has spent more than $250,000 in repairs, and Brugnara decried the lack of legal repercussions as a double standard, but Monday Santa Clara County District Attorney Dolores Carr announced a $60,000 civil lawsuit settlement.
Water district board member Sig Sanchez said the idea that the water district would exert political pressure is outlandish. He said he did not know about Brugnara’s offer to Gilroy in May 2007, but he knew Brugnara offered to sell his land and water rights to the district for $16.5 million in April 2007, according to a letter Brugnara wrote to the board.
“We researched it and decided it wouldn’t work,” Sanchez said.
When it comes to the water itself, Brugnara and his team of hydrology lawyers maintain that he has grandfathered rights to the creek on the 112-acre property on Redwood Retreat Road that his company bought in 2001. Brugnara said the dam has been used regularly since legendary “Cattle King” Henry Miller built it in 1880, and more importantly, he added, the dam predates 1914, when unfettered water rights became trickier to obtain.
“I can sell my water to whoever I want,” Brugnara said. “But this thing is all political.”
State officials could not confirm whether Brugnara held so-called appropriative water rights, but because Brugnara has yet to find a buyer, a resolution awaits. Either way, Brugnara’s proposals to the water district and the city come after the investigation began.
“The annual flow available from (the Brugnara Dam) is approximately 25,000 acre-feet a year. Brugnara Corporation proposes the sale of this flow to the City of Gilroy at a discounted rate to what Gilroy is currently paying its wholesaler (the Santa Clara Valley Water District),” reads Brugnara’s e-mail to Gilroy Water Operations Services Supervisor Dan Aldridge.
This discounted rate could be 80 to 90 percent less than the current rate, Brugnara said, which equals an annual savings of $1.9 million to $2.2 million for the city. Gilroy consumed nearly three billion gallons (about 9,200 acre-feet) last year, according to Aldridge. This fiscal year Gilroy expects to pay the district $2.4 million to fill its eight wells, according to Co-Finance Director Cindy Murphy.
“At the end of the day, the water district is just another private company that’s a wholesaler for water, and Gilroy can buy water from any wholesaler,” Brugnara said.
While the deal sounds like a no-brainer, Aldridge said Gilroy does not have the means to treat surface water. A treatment plant can cost hundreds of millions of dollars, according to Scott Akin, a water specialist at the water district. Gilroy would also have to pay to pipe Brugnara’s water into the city. The district, which operates a $365 million budget, had similar concerns.
These financial concerns are baseless, though, according to Brugnara, who said his water rights allow him to flow his dammed water into the Uvas Creek and then into Gilroy’s underground aquifer via natural percolation ponds. There’d be no need for a pipe or a treatment plant, Brugnara said, because Gilroy owns the water it sits on and can draw from it on behalf of his water rights.
“Gilroy is throwing away $2.5 million to ‘recharge’ its underground aquifer, and I can do the same thing for $200,000,” Brugnara said. “The city will save $2 million or more a year, every year.”
As a professed conservationist and member of CalTrout, Brugnara also cautioned that if his dam comes down altogether, so will the survival rate of steelhead: If his water flows unregulated and dries up on its natural course, Brugnara said, the migrating fish he allegedly poached will become trapped.
Brugnara pleaded not guilty last week in San Francisco on multiple counts of poaching endangered fish, and of making false statements to investigators. He will appear in court again May 14.
The bottom line, though, is that Gilroy has the chance to save millions every year, Brugnara said.
“I was, and still am, trying to do the right thing,” he said.
Timeline of Events
â– January to March 2007: State investigators discover blocked dam preventing steelhead migration and attempt to rescue
â– April ’07: Brugnara offers to sell water and land to water district
â– May ’07: District employees visit site to consider offer/Brugnara also makes offer to Gilroy
â– June ’07: District and Gilroy decline offer
â– August ’07: Brugnara re-offers to district
â– October ’07: District declines again
