Jim Ganulin interview
Item
Title
eng
Jim Ganulin interview
Description
eng
Former general counsel of the Westlands Water District during the 160-acre limitation battle.
Creator
eng
Ganulin, Jim
eng
Holyoke, Thomas
Relation
eng
Water Archive Oral Histories
Coverage
eng
California State University, Fresno
Date
eng
9/1/2009
Format
eng
Microsoft Word 2003 document, 17 pages
Identifier
eng
SCMS_waoh_00012
extracted text
>> Tom Holyoke: Okay Jim, let's just go ahead and start with a little bit of
personal history.
>> Jim Ganulin: Okay.
>> Tom Holyoke: Where were you born?
>> Jim Ganulin: Born in Los Angeles California and lived and grew up there, went
to college at the University of Colorado for two years then UCLA for my last two
years, then went to law school in Berkeley Boalt Hall and graduated from there
in 1959. I might add, from an antidotal standpoint, never took water law, never
took state and local government law. When I got my first job, the guy I went to
work for in the Attorney General's office said I'm not going to give you any
water cases because my father in law at the time was a water law attorney and I
didn't get any cases in water law. And then wound up in Fresno going to work for
Westland's Water District.
>> Tom Holyoke: So, you came to the valley initially to work for Westlands?
>> Jim Ganulin: That's correct.
>> Tom Holyoke: And you haven't really done a lot with water law or much at all
with water law before.
>> Jim Ganulin: Had done nothing with water law or state and local government or
public agency law. And my entire career has been involved with those in those
two fields.
>> Tom Holyoke: So, when you came to Westland's water district did you have to
take a crash course in water laws and understand water laws?
>> Jim Ganulin: No, I think I kind of learned it on the job, picked it up as the
years passed.
>> Tom Holyoke: Okay, what year did you come to work for Westlands?
>> Jim Ganulin: I started in January of 1966.
>> Tom Holyoke: Okay, did you start off as General Counselor?
>> Jim Ganulin: No. I started out as assistant general counsel. And I did that
from 1966 until 1977 when I became general counsel for the district.
>> Tom Holyoke: Who was general counsel when you first came there?
>> Jim Ganulin: Ralph Brody.
>> Tom Holyoke: Just kind of for some clarification, what is a water district?
>> Jim Ganulin: There are a number of different kinds of water districts in
California. There are creative, pursuant to statutory authorization. Irrigation
districts are basically resident voting districts, people that are providing
irrigation water. California Water Districts, of which Westlands is one, is a
landowner voting district and that was created because the landowners were
responsible for the assessments to pay for facilities. And, the conclusion was
it was unfair to have just residents voting because there are so few residents
in districts like Westlands. So, the landowners have one vote for every dollar
of assessed evaluation.
>> Tom Holyoke: In that kind of voting system is that system that essentially
gives larger landowners a larger, say than in the governance of the district.
>> Jim Ganulin: That's, that's correct. I might add that the issue has gone
before the California supreme, pardon me, the United States Supreme Court twice
and the United States Supreme Court has held that that is a valid way of voting.
>> Tom Holyoke: In terms of size, Westlands, I understand, is one of the largest
in California. Is it the largest in California Water Districts?
>> Jim Ganulin: I think Imperial Irrigation District, perhaps, is larger. But
Westlands is the largest irrigated district in the state.
>> Tom Holyoke: Okay. When you came to Westlands what kind of crops, were they
growing? Do you happen to remember what kind of crops were farmed especially?
>> Jim Ganulin: Perhaps five or six crops, cotton, a lot of melons, tomatoes,
alfalfa, sugar beets, were the main crops of that point at that time.
>> Tom Holyoke: Okay. Could you explain a little bit on how water districts
contract for water with the Federal Government Bureau of Reclamation or in some
cases the state?
>> Jim Ganulin: The district, whether it's a Central Valley Project contractor
or a state water contractor, contracts with the entity, the Department of the
Interior on the one hand or the State of California on the other for a water
supply. That water supply is provided by in the federal system of the Central
Valley project. The district pays the United States per acre-foot for that water
and they're subject to various provisions of the contract regulating the use of
that water and the division of federal law with respect to the use of that
water.
>> Tom Holyoke: Okay, so basically the district then acts as a middleman. Is it
the district that purchases the water from the Department of the Interior in the
Case of Westlands water district and then resells that to the farmers?
>> Jim Ganulin: That's correct. The district does purchase the water from the
United States, it in turn delivers the water to its constituents its landowners
and water users. And they pay a water toll charge for the water. And then, in
Westlands case, they also pay, they have assessments to pay for facilities built
by the district and for certain services provided by the district.
>> Tom Holyoke: Okay. Do you know if there's any particular reason why Westlands
chose to make its contracts with the Federal Government with the Department of
the Interior rather than the state water project?
>> Jim Ganulin: Well, I think, I'm not certain of this, but I, my sense is they
probably thought the water would be cheaper because there's a, there is no
interest, interest component in connection with that water under federal
reclamation law. And while there were regulations that the landowners had to
comply with in order to get delivery of the water, acreage [inaudible]
limitations, they felt, my sense is they felt that was a fair price to pay for a
cheaper water.
>> Tom Holyoke: Has it actually turned out to be cheaper water?
>> Jim Ganulin: With the advent of the Reclamation Reform Act and the Central
Valley Project Improvement Act, I'm not so certain it has been cheaper.
>> Tom Holyoke: Okay. The time you came to Westlands Water District the district
was a relatively new entity at the time?
>> Jim Ganulin: The district was formed in 1952 for the expressed purpose of
seeking a supplemental water supply from the United States. The San Luis Unit
authorizing legislation was passed in 1960. And that authorized the construction
of the San Luis Unit of the Center Valley Project. It in turn authorized the
delivery of the construction of major project facilities such as the San Luis
Reservoir and the California Aqueduct, and then delivery of water to the
district itself.
>> Tom Holyoke: And the San Luis Reservoir was really essential for creating a
large water district and creating large-scale agriculture on the west side of
the San Joaquin Valley.
>> Jim Ganulin: That's correct. And the, the other interesting thing about the
San Luis Reservoir is that it was a part of a joint federal-state effort. In
1960, the state passed the Burns-Porter Bond Act to create a state water system.
The San Lois Unit Act authorized the cooperation of the state and federal
government in building the California Aqueduct going all the way to Southern
California and San Luis Reservoir as a joint federal state facility.
>> Tom Holyoke: Now, in the way that the Westlands water district or probably
any water district contracts for water there's we're really talking about two
separate contracts. There's a contract for the water. And isn't there also a
different contract for building the facilities that ultimately requires the
district to repay the government for the building of the San Luis Units and the
conveyance?
>> Jim Ganulin: That's correct, what is referred to as a section 9E contract
which is a section in the reclamation law, authorizes what we call a water
service contract. And that contract authorizes the delivery of water and in
Westland's case the provision of drainage service for a certain amount of per
acre-foot charge. And that charge is to pay for the water as well as the
construction of main project facilities. I mentioned the San Luis Reservoir. I
mentioned the California Aqueduct, the San Luis Canal; those facilities are paid
for out of the revenues from that water service contract. The second kind of
contract is a section 9D contract, also part of the reclamation law, and that
contract authorizes the construction of individual facilities for the particular
district, in the Westlands case that authorized the construction of water
distribution facilities within the district itself to deliver the water from the
canal to the farmer and then as well as drainage facilities to collect brackish,
salty water from the on farm drains.
>> Tom Holyoke: Okay, when you came to work at Westlands or even at least in the
late 1960s do you remember at all how much water they were actually contracting
for or essentially how much water they were purchasing the rights to?
>> Jim Ganulin: The, Westlands 1963 water service contract provided for the
delivery of somewhere between 783,000 acre feet of water per year up to 900,000
acre feet of water per year depending on the ground water situation. And there
was a formula within the contract that determined how much water was delivered.
And ultimately, the ground water situation was such that it wound up being a
900,000-acre foot annual supply.
>> Tom Holyoke: And what was the price of the water per acre-foot?
>> Jim Ganulin: The price in that contract was seven dollars and 50 cents an
acre-foot for water service and 50 cents an acre foot for drainage. And I might
add, my sense is that those, that kind of contract was not unusual, that that
most of the contracts, contracts for water on the East side also provided for a
fixed price for the water.
>> Tom Holyoke: Okay, so, individual farmers were paying essentially eight
dollars per acre foot, 7.50 for the water service and 50 cents for prepayment of
the ->> Jim Ganulin: That's correct plus the cost of the districts operating and
maintaining the system and delivering the water to the farmer.
>> Tom Holyoke: Okay. You'd mentioned the drainage canal, could you just explain
a little bit why drainage is such a huge issue in the Westlands?
>> Jim Ganulin: Underlying a significant portion of the district is a Corcoran
clay layer in various depths but that's an impervious layer of clay. And, a
farmer irrigates the land, a part of the water is evap -- transperated, some is
taken up by the plant and some water is leached into the ground water. It goes
down in the soil. It gets that in that clay layer and it cannot go any further.
That water, which is brackish, very salty, builds up on top of the clay layer,
it winds up in the root zone and that precludes the ability to grow crops. The
drainage system was to take care of that brackish water, to take it off the
farm, move it to a drainage collector system, and ultimately into a drain which
was to go ultimately to the bay, to the bay area and empty into the Delta.
>> Tom Holyoke: We'll come back to drainage in just a moment.
>> Jim Ganulin: Okay.
>> Tom Holyoke: Is, as I read some of the history in Westlands. I understand
there was some, at least appears to have been some misunderstanding between
farmers in the district, and the Federal Government as to whether the contracts
originally signed in the 1960s were long term contracts or temporary contracts.
Or maybe that was a misunderstanding that was, well that the Federal Government
later on came to have a misunderstanding about that.
>> Jim Ganulin: The 1963 water service contract was for 40 years. In 1964, the
district negotiated a contract for the construction of the distribution and
drainage collector system. When that contract went before congress as the law
required, that it lay before congress for a period of, as I recall, 90 days,
there were hearings, I think, certainly on the senate side and perhaps in the
house side. And at those hearings, some of the critics complained about the
contract. The Secretary of the Interior decided to condition approval of that
contract upon a number of things. And those things were set forth in what we
referred to as the Holum Memorandum. The Holum Memorandum said that the
conditions preceding to the signing of that contract were first of all merger of
the Westlands law district with the West Plains Water Storage District which was
a district of about 200,000 acres immediately to the west of Westlands, that the
district would take over the operations and maintenance of the Coalinga Canal
System which is an offshoot of the San Luis Canal. And then in the return for
that the water for the West Plains area, the additional water supply was to be
allocated to the district. The district agreed to the Holum Memorandum. The
district wound up before the state legislature. The two districts were merged
and the contract was signed. That resulted in a need for a formal contract for
the additional amount of water. There were a number of temporary contracts over
the years while the amendatory contract was being negotiated. And to this day, I
don't know that the amendatory contract has ever been signed, for reasons we can
get into.
>> Tom Holyoke: You mentioned that there was criticism of the contract before
congress. What was the nature of the criticism?
>> Jim Ganulin: Well, there always was criticism of Westlands because of the
large land holdings within the district. It goes back to the critics concern
that acreage limitation and its requirements would not be satisfied. That law
requires that for excess land owners, somebody owning more than, at that time,
160 acres, to get one they would have to agree to sell the land in excess of 160
acres at an approved price established by the Bureau of Reclamation. And if they
didn't do it within ten years then the Secretary of Interior had a proprietary
to sell it for the landowner. The critics said, first of all, the large
landowners will not sign recordable contracts, and secondly even if they sign
them they won't sell the land. History proves that that was incorrect because
they signed recordable contracts and the land was ultimately broken up.
>> Tom Holyoke: What does that term mean recordable contract?
>> Jim Ganulin: It's a contract that's recorded in the county records. So, it's
basically like lien, like a lien for a first deed of trust on a house. It's
appears there as a matter of record.
>> Tom Holyoke: Okay. I know this is, probably again, a couple of years before
you came to Westlands. But, is there a particular reason that Westlands decided
to merge with the West Plains Water District?
>> Jim Ganulin: Well, I think the Holum Memorandum required that in order to get
the distribution system built. And I think the folks in West Plains at that
point wanted to become a part of the federal system for the reasons I mentioned
earlier, perhaps the cost of water. And they were having a problem obtaining a
contract for state water project water.
>> Tom Holyoke: On the subject of the Holum Memorandum, which I understand was
named after the Assistant Secretary of the Interior Kenneth Holum.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: So, Westlands Water District consider the Holum Memorandum to be
legally binding between Westlands and the federal government?
>> Jim Ganulin: We, it was not a formal contract in a traditional sense, but we
argued and believed and I still believe that there was a contract by necessary
implication, that there was an offer to provide certain water supply at a
certain price if the district did certain things. The district did those things
and we think therefore created and implied in fact or contract by estopple.
>> Tom Holyoke: Okay. And, as I understand it and please correct me if I'm
wrong, up until the later 1970s everyone sort of assumed that the Holum
Memorandum basically laid out an agreement between Westlands and the Bureau of
Reclamation of the Department of the Interior, but in the later 1970s, I guess
the Carter Administration no longer saw the Holum Memorandum as binding.
>> Jim Ganulin: In, starting in probably 1965 or ‘66 when the first water
delivery to Westlands commenced there were temporary contracts for water. They
were temporary for one year because the amendatory contract was still being
negotiated. This went on year after year with increasing amounts of water
delivered to the district, until you say, until the 19, probably mid to late
1970s when the Carter Administration did, did take issue with that.
>> Tom Holyoke: Is it fair to say that the Carter Administration was not that
friendly to the Westlands Water District?
>> Jim Ganulin: That, that's, you're being very kind. That's a fair
characterization.
>> Tom Holyoke: What was the nature of the problem?
>> Jim Ganulin: There were several problems. The, there was a service area
issue. The original feasibility report talked about a specific service area that
was, did not include the -- all of Westlands. In 1962, 19, yes, if my memory's
correct there was a soil classification survey and the classification survey and
all the actions that took place after that concluded that all of Westlands was
in the authorized service area. The Interior Department under Carter and Andruss
took the position that no that was not correct it was only about 400,000 acres
of the district in the service area. That was, that was one issue. Another issue
was with respect to acreage limitation and the administration's conclusion that
Westland's was not comply with the acreage limitation requirements. There was an
also, also an issue about payment for the drain. You recall I mentioned a 9E
contract with contracted for payment for the drain. And a 9D contract which
contracted for payment for the, in construction of facilities on farm and in the
district. The Carter people took the position that the drain should have to be
paid, the main drain would have to be paid for as a 9D contract as opposed to
being a water service contract.
>> Tom Holyoke: Okay. I'll come back to some of those things in a minute. Also
in the 1970, the later 1970s and, I don't know if this was something that was
pushed by the Carter Administration or by members of Congress. But we have, I
guess we'd call the Special Task Force on the San Luis unit which I understand
produced a report that was highly critical of the Westlands Water District. Do
you have the origins of this kind of this task force?
>> Jim Ganulin: Yes. The San Luis Unite Act had a specific amount authorized for
the construction of the district water distribution and drainage collection
system. That amount was reached. In order to continue constructing there had to
be an increase in that amount of authorization. The district went to then
Congressman Sisk and his Assistant Tony Coelho [assumed spelling] and said we
would like to have this amount increased. In order to get that amount increased
by some 31 million dollars Sisk and Coelho needed to deal with Congressman
George Miller, a long time critic of the district. A compromise was the increase
in the authorization but with the creation of a task force to investigate the
San Luis Unit and basically Westlands. The legislation, as I recall, set forth
who should be on the task force. Frankly, it was stacked with critics. We had
some representation on the task force but the report, as you know, came out
fairly critical.
>> Tom Holyoke: Yes, I remember reading in, I think it was the biography of the
Congressman Bernie Sisk that he felt that the entire task force was rigged
against Westlands and he had lobbied hard to have State Senator Rosanne Vuich
put on. And I, so I guess I come away with it she and a gentleman Adolf
Moskowitz [assumed spelling] had the primary responsibility for defending the
Westlands on the task force.
>> Jim Ganulin: That's correct. We, Westlands was aloud to appoint one member of
the task force. And, I don't recall who appointed Senator Vuich but they were
both on the task force and they were the two members of the task force that were
reasonably objective and not as critical as other members of the task force.
>> Tom Holyoke: Who was Adolf Moskowitz?
>> Jim Ganulin: Adolf Moskowitz, long time dear, dear friend and mentor for me
frankly, on a personal note. Renowned water attorney from Sacramento along with
Stan Chronic formed the Firm of Chronic and Moskowitz just about the time I was
getting out of law school. And they wound up with a firm preeminent within the
state. Adolf was special counsel for the Westlands in dealing with litigation in
other matters and was Westlands representative on the task force.
>> Tom Holyoke: Okay. How did Westlands water district immediately react to a
lot of the criticism coming from the Carter Administration and from Congressman
Miller? Did was there an effort to put together a political strategy to sort of
kind of fight back against what was happening?
>> Jim Ganulin: There was, yes, there was an effort but, frankly it was, it was,
probably fell on deaf ears and it was, as you know, that can be very difficult.
>> Tom Holyoke: One of the issues
concerns that happened during the
redefining where the service area
Crulit [assumed spelling] Service
you mentioned earlier, I guess one of the
Carter Administration was the re, sort of
was. And then we get into this term called the
Area, I think I'm pronouncing that right.
>> Jim Ganulin: You are. That is the service area I'm talking about it was,
Crulit's opinion, he was a solicitor also on the task force. But it was his
opinion that, that'll, opined that not all the district was entitled to water
service.
>> Tom Holyoke: And where did their definition of the service area come from?
>> Jim Ganulin: Feasibility report for the San Luis Unit which was done in the
early 1950s.
>> Tom Holyoke: Your opinion was this just a difference of opinion, was there
political motivation behind some of this?
>> Jim Ganulin: I'm biased. And I pause because I want to use my words
carefully. But, in my judgment, there was a bias.
>> Tom Holyoke: 1980 President Carter is defeated by former California Governor
Ronald Reagan. We have a new administration coming in; an administration that
knows something about California water issues or at least the president, the new
president knows something about California water issues. Did Westlands Water
District see a change in attitude from the Department of the Interior with the
coming of the Reagan Administration?
>> Jim Ganulin: We thought there'd be a change. There was a change but, but we
still had issues. We had negotiated a, an amendatory contract with the Carter
Administration for a water rate of, my recollection is about nine dollars and 50
cents as opposed to the seven dollars and 50 cents and a water supply to cover
the amount of water covered in the Holum Memorandum. Reagan was elected, had a
conservative Secretary of the Interior. We felt that, and our board felt that
well the importance of a contract would be more significant to the new
administration than it had been to the last. So, we went to Washington with
three of our board members to talk with Interior. And Interior, at that time,
said well we don't like what the Carter Administration was doing we don't agree
with all that they were doing. On the other hand, you're not paying enough for
water. And, if you don't pay cost of service for water then you're not going to
get a contract for additional water supply. As a matter of fact, we probably
will have to stop water service. That led to major litigation by the district
involving an effort to get the United States to deliver water to the district.
The -- on the eve of a hearing before the Federal District Court judge the
United States and the District settled the law suit if you will, actually what
they did is they put off an ultimate decision. They said, the district agreed to
put into a trust fund the difference between seven dollars and 50 cents and 13
dollars and 50 cents. And that trust fund was established, the money went in
there, and depending on the ultimate outcome of the litigation, that would, that
would dictate who got the excess money, go back to the district if the district
was right, go to the United States if the United States was correct.
>> Tom Holyoke: Okay. In the end, after what happened with the Carter
Administration what was happening with the Reagan Administration, did Westlands
end up paying more per acre for the water from 7.50?
>> Jim Ganulin: Yes. That, it's more complicated. As a result of the district's
lawsuit against the United States, some of the landowners within the district
intervened in the lawsuit and we would up with what is referred to as the
Barcellos [assumed spelling] case. And that case involved not only the water
supply issues we just talked about but the drainage issues. It involved the
rights of landowners within different areas of the district to receive water.
That was protracted litigation. Mr. Moskowitz and I decided that since there
were different areas of the district and with different interest we filed what
is referred to as a class action against the landowners in the four different
areas of the district. And that, the areas were dictated by the service areas,
and, and so we had four classes in the litigation. The United States was the
defendant. We had five independent represented parties in the lawsuit that dealt
with the water supply issues, drainage and so on.
>> Tom Holyoke: Yes. I see what you mean by saying it's more complicated.
>> Jim Ganulin: Yeah.
>> Tom Holyoke: As I understand, part of the trouble was rising because there
were differences in what different farmers in the district were required to pay
or the type of contracts they had or, related to the farmers who were in the
original Westland's Water District versus those in the West Plains.
>> Jim Ganulin: Okay, that, the issue there was the amount of water to be
allocated to each of the two areas, to the original Westlands area what we refer
to as area one, and the original West Plains area, area two. The merger statute
said, and I think I can quote it, that the lands within the original Westlands
water district shall have a prior right to water under any contract in existence
on the day of the merger. And that was referring to the 1963 contract. A
significant dispute arose as to what that language meant and how much of the
water would be allocated to area one and area two particularly when there's a
shortage. And that issue was a part of the Barcellos Litigation.
>> Tom Holyoke: So, farmers in the area one area had water rights senior to
those in area two?
>> Jim Ganulin: Yes. But, but, but similarly the water users in area two also
had some rights and that was, that's what caused the clash.
>> Tom Holyoke: So, at this point in time, the late 70s and into the early 80s
we have, there's some dissention within Westlands Water District between the
farmers themselves over the price to be paid and what should be done.
>> Jim Ganulin: That's correct. And, when we, when we're dealing with the
Barcellos case and the very complex issues, a couple of the parties went east
and talked to the folks at Interior. They asked Adolf and I to go along. We
opted not to because these were landowners living in a certain area and we were,
had to represent the entire district. What those folks received at Washington
was the assurance that the United States was willing to negotiate on the
contract as long as Westlands spoke with one voice. And you recall I said there
were four different classes and five independently represented parties. So, we
started down the path of trying to work out internally positions on the various
issues. And that took us about a year and a half. And then ultimately we sat
down and negotiated with the United States and wound up with a settlement.
>> Tom Holyoke: Let's focus a little bit on the interceptor drain. It seems to
me that this has always been a little bit of the Westland's Water District's
Achilles' heel, you know, the great problem that they needed to get solved and
yet it really hasn't been solved even today.
>> Jim Ganulin: The San Luis Unit Act states that before there's construction of
water distribution and facilities the United States shall either have a contract
with the State of California for a master drain along with the state or make
provisions for drainage. In the early 1960s, the state concluded that it could
not participate in the master drain. And I'm not certain why they concluded that
but that was their conclusion. The United States started making plans for a San
Luis drain, to take brackish, salty water from the district up to the Delta.
During the 60s there were two lawsuits filed by the exchange contractors, which
was a group of water districts north and west of the district saying that you
better have drainage because if you don't the brackish water's going to drain on
our land and create problems for us. In both those cases the United States, with
the district prevailed saying the statute provides there shall be provision for
drainage. There are plans to have drainage and therefore the statute's been
complied with and you can continue constructing water distribution facilities.
Thereafter, the United States did construct a drain and did construct some on
farm drainage collector facilities within the district. Some of the farmers did
connect up to those facilities and the district started to collect drainage
water and move it through the San Luis drain to what was then a holding
reservoir, Kesterson Reservoir. Ultimately, the water was going to go on to the
Delta. In 1985, some of the biologists found deformed birds at Kesterson. They
concluded it was a product, the result of selenium which is a naturally
occurring element in the soil. And that was taken up by the plants and the birds
were eating the plants and the birds were deformed. And the Interior said well
we have to stop drainage service and water service. We were able to negotiate an
agreement with the United States to have water service continued but the
district had to take care of its drainage water. And we agreed to do that. And
if we didn't do it, we would agree to plug the drains that had been constructed.
The Corcoran clay that I mentioned earlier was a problem for us because we had
some ponds, we bought 365 acres, we were going to build ponds and pond the water
and let it evaporate and so on. But, we needed an impervious layer beneath the
ponds so that we would not adversely impact ground water. When got the bids to
some 50 few 60 million dollars to build the ponds, the board, we couldn't do it.
It was just too costly. We therefore had to plug the drains and that resulted in
further litigation. Moving on, there was litigation involving United State's
obligation to provide drainage and the United States said well no we're excused
because we do not have the technical capability to provide drainage service
because Congress has precluded us from putting the drainage water in the Delta,
the state of California's done the same thing. The State of California said you
can't put it in the Monterey Bay. And so, the United States said we can't, we
can't provide drainage services. The Federal District Court, Judge Wanger
[assumed spelling] and the United Circuit Court of Appeal concluded you're not
excused United States, you have an obligation to provide drainage. So, here was
sit with no drainage service. The problem is not taking the chemicals out of the
water, we can, they can take care of selenium and whatever else is in the water.
The problem is the salt. How do you get rid of the salt? I heard of estimates
that if you drained all the land in Westlands that needed draining there would
probably be 80 boxcar loads of salt per day.
>> Tom Holyoke: Per day?
>> Jim Ganulin: Yeah. I may be off but it's a gigantic amount of salt. And folks
will say well do a contract with Wesley Salt. Well, they can't, they can't use
that much salt.
>> Tom Holyoke: Are a majority of Westlands farms in a situation where they have
to drain off the water?
>> Jim Ganulin: I'm not sure, no, it's not a majority but it's, you know, tens
of thousands of acres.
>> Tom Holyoke: Okay, sort of get back to a couple of points in there. So,
initially after the State of California decided that it could not build a master
drain for the valley the Bureau of Reclamation essentially had the
responsibility of building a drain.
>> Jim Ganulin: Correct.
>> Tom Holyoke: As I understand, they, even though they essentially accepted
this responsibility in the 1960s it wasn't until the 1970s, the mid 70s they
even started working on building a drain.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: And, why was there such a long delay when this is known to be so
crucial and required?
>> Jim Ganulin: I think the thing at that time was the water supply facility
need an importance, was more significant than the drainage need, right then and
there, right then.
>> Tom Holyoke: Okay. So, the Bureau of Reclamation simply couldn't do too many
different things?
>> Jim Ganulin: That's correct. And, there was a limit on how much money was
available.
>> Tom Holyoke: Okay, so congressional appropriations.
>> Jim Ganulin: Appropriations, that's correct.
>> Tom Holyoke: So, by the early 1980s we now have a drain that's essentially
have completed. It's reached as far as the Kesterson Reservoir; I guess it's
called the Kesterson Reserve, wildlife reserve now.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: And today the Kesterson Wildlife Reserve is simply not
functioning as a drain.
>> Jim Ganulin: That's correct there's no drainage. There is no drainage to the,
there's no drainage water put in the San Luis drain and nothing going to
Kesterson area.
>> Tom Holyoke: Okay. And the original idea was to build another canal beyond
Kesterson all the way down to the Delta down, I believe around by Antioch.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: And the reason that that has not been done is partially because
on one hand you're saying the Bureau of Reclamation is not being permitted to
build it even though on the other hand the government is saying they have to
build it.
>> Jim Ganulin: That's correct the courts have said there's an obligation to
provide drainage service. The court hasn't said what you have to do to do that,
how to provide the drainage service. But that's, that's your obligation United
States.
>> Tom Holyoke: So, across all these decades' drainages, everyone acknowledges
that drainage is essential for a lot of the farming in Westlands. We have not,
for most of this time there is not been drainage. Do you know how severe this
impact has been on Westlands Water District?
>> Jim Ganulin: I'm not, I'm not, I've been away from Westlands for about 15
years and I don't really know that. I know that there are efforts by a number of
farmers to create their own solutions. A farmer by the name of John Diener has
done a fair amount of growing salt tolerant crops and recycling drainage water
on those crops and so on. But, there's still a significant drainage problem.
>> Tom Holyoke: Okay. Is there anything else on drainage you wish to add?
>> Jim Ganulin: I think that; let's talk a little bit about drainage and water
supply. With the shortage of water as a result of the hydrologic drought as well
as, excuse me, what I refer to as the regulatory drought, Central Valley Project
Improvement Act, Endangered Species Act, Bay Delta Water Quality Standards,
there's been a significant reduction in water supply over the past several
years. In addition, there's been no drainage service. As a result of both those,
particularly the water supply, the district has fallowed a fair amount of land.
But, let me go into that in a minute. Let me think more of that and I want to
amplify more about that.
>> Tom Holyoke: Okay, yes.
>> Jim Ganulin: We were talking about drainage. Let me backtrack just a little
bit and talk a little bit about the Barcellos case, the class action to which I
referred earlier because it did involve drainage. That litigation involved a
number of issues. It was ultimately settled. The judge signed the settlement
order in December of 1986. It dealt with the water supply issue. It reaffirmed
the district's right to the 900,000-acre feet of the 1963 contract and the
200,000-acre feet of water that was provided for in the Holum Memorandum. So, we
had a water supply of 1,150,000-acre feet. It dealt with the price of that
water. And it said that the district would pay, basically the operation and
maintenance charge for the water, what it cost the United States to deliver the
water, or in area two the water, the water users would likewise pay cost of
service if the amount of water was over and above that authorized by reclamation
law and over the landholding size then there was a full cost paid for the water.
Secondly, it dealt with the service area. It ratified that the entire district
was entitled to water service. Thirdly, it dealt with drainage and basically
created a trust fund for drainage solutions, my recollection is about five
million dollars. And the district was to embark on various projects to solve the
drainage problem. There was, and the district had a sludge removal project, they
explored deep well injection of drainage water, they had a couple of other
things and they never could find a solution. So, but the trust fund was there
for that purpose. Then lastly, it dealt with the allocation of water between
areas one and two, which I referred to earlier. And the settlement basically
said until 2008, which was the date on which the 1963 contract was to expire,
the area one would have a prior right to water. Water not used in area one would
go to the area two along with the 250,000-acre feet. And they put off dealing
with the solution of water needs after 2008 that was deferred to another time.
And that ultimately was settled in further litigation.
>> Tom Holyoke: Okay, so essentially the final resolution of the Barcellos case
was resolving a lot of the major issues for Westlands Water District.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: Okay. The next topic then sort of settled with drainage then is
to move briefly into the issue of the acreage limitations.
>> Jim Ganulin: Fine.
>> Tom Holyoke: Okay. First off, this is, it's a criticism that Congressman
George Miller had brought up, and leveled against Westlands Water District, the
Carter Administration was concerned with it. What is the problem?
>> Jim Ganulin: The reclamation law which governs the deliver of water to
federal districts has a number of requirements. The law says if you own what is
referred to as excess land, which in the early days was 160 acres per individual
landowner, then you cannot get water for that land unless you agree to sign a
recordable contract, which is a contract recorded in the county at the county
level. And, under that contract, you agree to sell your land within ten years at
a price approved by the Bureau of Reclamation which does not include an
increment of value brought about by the delivery of project water to that land.
And, if you don't sell it within the ten years, the Secretary of the Interior
has the power of attorney to sell it for you. The, early on the critics said,
well, I'll go back to the, to the, to the merger and to the delivery of water to
reclamation districts or federal districts that have the reclamation law. The
critics said well all the large landowner wanted to do was to have federal water
delivered and have the ground water basin increase its supply and they could
then use ground water and they wouldn't have to sign recordable contracts. The
large landowners on the other hand did in fact sign recordable contracts. They
put tens of thousands of acres under contract in which they agreed to sell the
land within ten years. And ultimately, the entire district and all of its excess
land holdings were under contract. Then, when they started to sell, the critics
said wait a minute. You're just selling to paper famers was the expression used
by the critics. Well, they were in my, in my experience they were not paper
farms. They were legitimate farmers who were farming land and the land was in
fact broken up, the large landholdings were broken up.
>> Tom Holyoke: Okay, so, in other words Westlands Water District was in fact in
compliance with the Reclamation law.
>> Jim Ganulin: Yes, yes.
>> Tom Holyoke: Who was, who were National Land for People?
>> Jim Ganulin: National Land for People was a local organization that was very
critical of land holdings within the Westlands Water District, the large land
holdings. They were seeking changes in reclamation law which would further
constrict the delivery of water to what to what they would refer to as large
landowners.
>> Tom Holyoke: Why ultimately did this then require basically the 1982
amendments to the Reclamation Act the change in statute?
>> Jim Ganulin: In 1976 or 1977, the National Land for People filed a lawsuit
against the United States saying that reclamation law was not being properly
enforced. As a matter of fact that resulted in some regulate, proposed
regulations by the Department of Interior that would've gone far beyond what we
and most folks in federal, federally served districts felt was the law. For
example, it would've required residency on the land as a requirement. That was
based on the 1902 statute, which we felt was repealed in 1926. Those regulations
were proposed by the Carter-Andruss Administration. We all went to court and
Judger Crocker ruled that those regulations were invalid and to be allowed to
continue in some water service. That started an effort in Congress to see what
could be done about reforming the law. I think the landowners in Westlands felt
that that would be advantageous that the 160 acres which I mentioned earlier was
not an appropriate size of farm or criteria for water service. Families were
should not be entitled to 160 acre per individual because there were kids and so
on. So, it wound up being, there was an effort to seek reform by both the
critics and the landowners.
>> Tom Holyoke: And, statutory change, as I understand upped the acreage
limitation to was it 960?
>> Jim Ganulin: 960 acres per family.
>> Tom Holyoke: Per family. As I understand it after the passage of the ‘82,
amendments to reclamation law it was another five years before the Bureau of
Reclamation profligated out its new rules. When the rules come out, Congressman
George Miller, the critic of Westlands Water District referred to them as an
outrage, betrayal. Do you remember what his problem was with the new rules?
>> Jim Ganulin: Well, I think his problem was that he didn't, he didn't like the
fact that there was an increase in the acreage. He didn't like the provisions
with respect to trusts. He was he felt that Westlands would, in his judgment,
continue to avoid the law. I mean it's been a long-standing point of criticism
for him, criticizing the district and its operations.
>> Tom Holyoke: Just one last question on the actual movement of the
legislation. Did you have a great deal of success working through valley
lawmakers in pushing this?
>> Jim Ganulin: Yes. The landowners within the district formed a group called
California Westside Farmers. Since that, the acreage limitation issue was not
technically a district issue it was a landowner issue because you were dealing
with the impact of reclamation on the individual farmer's operation, landowner's
operation. California Westside Farmers took a lead rule in seeking reform to the
reclamation law. They joined with organizations from the other 17 western states
subject to that law. And that, that resulted in the 1982 act. And the valley
congressmen were very helpful in that effort.
>> Tom Holyoke: Anything else you want to add on to the critics limitations?
>> Jim Ganulin: No, I would say that the, you mentioned the regulations; I mean
the regulations did come out. The landowners throughout the district did comport
with those regulations. The land holdings were further broken up. Those folks
who were receiving water for more than 960 acres of farm ground were paying full
cost for that water as required by the law. The anti speculation revision the
laws were enforced. I think the law was successful.
>> Tom Holyoke: I guess moving into talking about an issue that may come back to
us in the near future and that is the peripheral canal. The original peripheral
canal proposal of the late 1970s which ultimately then failed on the ballot, I
think, in 1982. Was Westlands Water district a prime supporter of the original
peripheral canal proposal?
>> Jim Ganulin: We were a supporter but I don't think we were heavily involved
in that effort. Our intentions were really directed at the federal level and
dealing with reclamation law and those issues, getting appropriations for
constructing the system.
>> Tom Holyoke: Would a peripheral canal at that time, was it seen as something
that would've been beneficial to Westlands.
>> Jim Ganulin: Absolutely, it was it was beneficial we just don't, we did not
take a major role in that effort though.
>> Tom Holyoke: Okay. So in the later 1980s a lot of the, many of the legal
problems facing Westlands Water District have now been resolved. Is there
actually any change in really the attitude of the Reagan Administration by the
late 1980s?
>> Jim Ganulin: No, not significantly. Once we resolved the Barcellos case we,
our disputes at the federal level were far less.
>> Tom Holyoke: Would you tell me a little bit about the 1992 Central Valley
Project Improvement Act?
>> Jim Ganulin: The primary movers of that legislation were Senator Bill Bradley
from New Jersey and Congressman George Miller. And they concluded that the
reclamation law, particularly related to the Central Valley Project needed to
be, in their judgment, improved. And they started down the road with legislation
which would've done just that, would've specifically allocated water for
environmental purposes among other things, dealt with water transfers, dealt
with provisions concerning amendatory contracts and the like. The legislation
was always a problem for California and the federal contractors. There was a
significant effort to work with Miller and Bradley to resolve some of the
difference of opinion, although there was concern that we couldn't we wouldn't
do that because of the bias which in our judgment they had. We had, when it got
toward the legislation was almost ready to be finalized, there was a question of
whether or not, excuse me, we should negotiate with Miller and Bradley in order
to litigate some of the adverse impacts that we thought the legislation would
bring upon us. At the 11th hour in a five-hour conference call with, probably,
30 different people on the phone, it was concluded, at the urging of some of our
principles, that we should negotiate, that President Bush would veto the
measure. Some of us had concerns about that. Well, that would in fact happen, I
guess we were correct. It didn't happen. The bill was part of a larger bill that
covered other states and things which they wanted and not withstanding efforts
to talk. Our people did go talk to; I guess Jim Baker was Chief of Staff at that
time. And ultimately Bush did not Veto the bill. So, the Central Valley Project
Improvement Act became law in 1992.
>> Tom Holyoke: What were the concerns that Senator Bradley and Congressman
Miller had that led to this legislation?
>> Jim Ganulin: Too much water being used by, by the Central Valley Project
water users and not enough water for the environment. I think that was, you
know, the primary thrust of the legislation.
>> Tom Holyoke: This is a, I understand this is one of the first times that
environmental components were added into reclamation law.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: After 1992, you were not at Westlands much longer than that
time.
>> Jim Ganulin: That's correct. I retired in 1994.
>> Tom Holyoke: And is that when you went on to become of counsel at Baker,
Manock and Jensen?
>> Jim Ganulin: That's correct, that's correct.
>> Tom Holyoke: Okay. In that case starting to go into the rapid phase here you
spent a life in California water law and California water politics. In your
opinion what are some of the big changes you've seen if there have been big
changes in and not just law and policy, but even public attitude?
>> Jim Ganulin: Well, let's go back for a moment to the CVPI, Central Valley
Project Improvement Act. That was, in my judgment, one component of what we've
referred to as a regulatory drought, cause of a regulatory drought. There was
some 800,000 acre feet of Central Valley Project water yield here marked for the
environment. The endangered species act that we've been reading about in recent
years became a significant factor in terms of the amount of water exported from
the Delta. The Bay Delta water quality standards required by the Clean Water Act
also restricted the amount of water that could be exported. So, the whole
environment, excuse me, both for Westlands and other exporters like Metropolitan
Water District of Southern California, or Santa Clara were adversely impacted by
the substantial decrease in the amount of water from the Delta. This is probably
the most significant issue for, I think the state, and its water, the water
issues for the state is the substantial decrease in the amount of water which
can be exported from the Delta under present regulations. I think that there is
a lack of recognition of other causes of problems within the Delta.
>> Tom Holyoke: Pollution?
>> Jim Ganulin: Pollution is one. Non-native species that come in, up stream
diversions, and heretofore those have not been taken into account in terms of
figuring out how to solve the Delta problems. The environment for solving that
problem is really, it's hard to fathom it's hard for me to understand but it's
there. There's the two parties are at opposite ends of the spectrum at the state
level, they argue over there shall be no storage, everything, all the problems
can be solved by water conservation, water transfers on the one hand. On the
other hand there needs to be, needs to be new storage, there needs to be
conveyance to the Delta and the two parties are at locked heads over those
issues. Very significant, I think that California's residents don't realize the
significance of those issues because they see it impacting agriculture in the
Center Valley. They're not yet seeing it in the big cities. And, once they see
it in the big cities, it's going to have, perhaps a different environment in
which to solve the problem. I think that if we had an earthquake and there were
salt at the pumps the two heads the federal and state pumps and you couldn't
deliver the water to Southern California we'd get a peripheral canal a lot
quicker than we would now. I've heard fish and game employees say one on one
that the peripheral canal would not be an adverse impact on the Delta it would
be beneficial. But in the crowded room with a lot of folks there and the
rhetoric fairly strong, you won't hear him or her say that.
>> Tom Holyoke: Is this, is this political fighting that you see in Sacramento
maybe even to some extent in Washington DC, like California can no longer seem
to create the great water projects we had in the past, because we've had
enormous projects that have been done in this valley, the Central Valley Project
the State Water Project. These were projects on enormous scales some of the
biggest in the United States. And the will to do those projects from the 1940s
50s and 60s no longer seems to be there.
>> Jim Ganulin: Well, and following up on that where would we be if we did not
have the 1960 legislation of both the federal and state level which created
those projects? I mean if we didn't have the State Water Project where would we
be now? I mean the former, Pat Brown Senior, Governor Pat Brown Senior had the
foresight to do that. We don't see that now. We just don't see the political
climate to get that done now. And that's sad.
>> Tom Holyoke: Is there any sense that, given the problems, the drainage now
that the issues with the Endangered Species Act, that Westlands Water District
and, well the farms out there are living on borrowed time?
>> Jim Ganulin: Over the years when I've told stories to my wife about there's
going to be a drought, there's a water supply shortage, she would, has always
been very sympathetic but she would always say but your farmers are so
innovative they will find a way. I don't think you can say that now. Had to
fallow tens of thousands of acres in Westlands, the water supply is at best
insecure and unreliable, we see a ten percent supply in 2008-2009. Who knows
what its going to be next year? The efforts to resolve the issue and seek
solutions even on a temporary interim basis run into all kinds of roadblocks.
It's very difficult. I don't know what, honestly don't know what the future
holds but it's a, it's very concerning.
>> Tom Holyoke: Okay, I'm at the end of my questions are there any final things
you would like to add?
>> Jim Ganulin: Yeah, it's been a fascinating 40 plus years, been a lot of
changes, a lot of beneficial changes, but, but we're at a tough time now. And
it's concerning. And there's all kinds of efforts to try and resolve problems,
and I just wish people would sit down at the table and really resolve, work to
resolve them as opposed to being doctrinaire in their approach.
==== Transcribed by Automatic Sync Technologies ====
personal history.
>> Jim Ganulin: Okay.
>> Tom Holyoke: Where were you born?
>> Jim Ganulin: Born in Los Angeles California and lived and grew up there, went
to college at the University of Colorado for two years then UCLA for my last two
years, then went to law school in Berkeley Boalt Hall and graduated from there
in 1959. I might add, from an antidotal standpoint, never took water law, never
took state and local government law. When I got my first job, the guy I went to
work for in the Attorney General's office said I'm not going to give you any
water cases because my father in law at the time was a water law attorney and I
didn't get any cases in water law. And then wound up in Fresno going to work for
Westland's Water District.
>> Tom Holyoke: So, you came to the valley initially to work for Westlands?
>> Jim Ganulin: That's correct.
>> Tom Holyoke: And you haven't really done a lot with water law or much at all
with water law before.
>> Jim Ganulin: Had done nothing with water law or state and local government or
public agency law. And my entire career has been involved with those in those
two fields.
>> Tom Holyoke: So, when you came to Westland's water district did you have to
take a crash course in water laws and understand water laws?
>> Jim Ganulin: No, I think I kind of learned it on the job, picked it up as the
years passed.
>> Tom Holyoke: Okay, what year did you come to work for Westlands?
>> Jim Ganulin: I started in January of 1966.
>> Tom Holyoke: Okay, did you start off as General Counselor?
>> Jim Ganulin: No. I started out as assistant general counsel. And I did that
from 1966 until 1977 when I became general counsel for the district.
>> Tom Holyoke: Who was general counsel when you first came there?
>> Jim Ganulin: Ralph Brody.
>> Tom Holyoke: Just kind of for some clarification, what is a water district?
>> Jim Ganulin: There are a number of different kinds of water districts in
California. There are creative, pursuant to statutory authorization. Irrigation
districts are basically resident voting districts, people that are providing
irrigation water. California Water Districts, of which Westlands is one, is a
landowner voting district and that was created because the landowners were
responsible for the assessments to pay for facilities. And, the conclusion was
it was unfair to have just residents voting because there are so few residents
in districts like Westlands. So, the landowners have one vote for every dollar
of assessed evaluation.
>> Tom Holyoke: In that kind of voting system is that system that essentially
gives larger landowners a larger, say than in the governance of the district.
>> Jim Ganulin: That's, that's correct. I might add that the issue has gone
before the California supreme, pardon me, the United States Supreme Court twice
and the United States Supreme Court has held that that is a valid way of voting.
>> Tom Holyoke: In terms of size, Westlands, I understand, is one of the largest
in California. Is it the largest in California Water Districts?
>> Jim Ganulin: I think Imperial Irrigation District, perhaps, is larger. But
Westlands is the largest irrigated district in the state.
>> Tom Holyoke: Okay. When you came to Westlands what kind of crops, were they
growing? Do you happen to remember what kind of crops were farmed especially?
>> Jim Ganulin: Perhaps five or six crops, cotton, a lot of melons, tomatoes,
alfalfa, sugar beets, were the main crops of that point at that time.
>> Tom Holyoke: Okay. Could you explain a little bit on how water districts
contract for water with the Federal Government Bureau of Reclamation or in some
cases the state?
>> Jim Ganulin: The district, whether it's a Central Valley Project contractor
or a state water contractor, contracts with the entity, the Department of the
Interior on the one hand or the State of California on the other for a water
supply. That water supply is provided by in the federal system of the Central
Valley project. The district pays the United States per acre-foot for that water
and they're subject to various provisions of the contract regulating the use of
that water and the division of federal law with respect to the use of that
water.
>> Tom Holyoke: Okay, so basically the district then acts as a middleman. Is it
the district that purchases the water from the Department of the Interior in the
Case of Westlands water district and then resells that to the farmers?
>> Jim Ganulin: That's correct. The district does purchase the water from the
United States, it in turn delivers the water to its constituents its landowners
and water users. And they pay a water toll charge for the water. And then, in
Westlands case, they also pay, they have assessments to pay for facilities built
by the district and for certain services provided by the district.
>> Tom Holyoke: Okay. Do you know if there's any particular reason why Westlands
chose to make its contracts with the Federal Government with the Department of
the Interior rather than the state water project?
>> Jim Ganulin: Well, I think, I'm not certain of this, but I, my sense is they
probably thought the water would be cheaper because there's a, there is no
interest, interest component in connection with that water under federal
reclamation law. And while there were regulations that the landowners had to
comply with in order to get delivery of the water, acreage [inaudible]
limitations, they felt, my sense is they felt that was a fair price to pay for a
cheaper water.
>> Tom Holyoke: Has it actually turned out to be cheaper water?
>> Jim Ganulin: With the advent of the Reclamation Reform Act and the Central
Valley Project Improvement Act, I'm not so certain it has been cheaper.
>> Tom Holyoke: Okay. The time you came to Westlands Water District the district
was a relatively new entity at the time?
>> Jim Ganulin: The district was formed in 1952 for the expressed purpose of
seeking a supplemental water supply from the United States. The San Luis Unit
authorizing legislation was passed in 1960. And that authorized the construction
of the San Luis Unit of the Center Valley Project. It in turn authorized the
delivery of the construction of major project facilities such as the San Luis
Reservoir and the California Aqueduct, and then delivery of water to the
district itself.
>> Tom Holyoke: And the San Luis Reservoir was really essential for creating a
large water district and creating large-scale agriculture on the west side of
the San Joaquin Valley.
>> Jim Ganulin: That's correct. And the, the other interesting thing about the
San Luis Reservoir is that it was a part of a joint federal-state effort. In
1960, the state passed the Burns-Porter Bond Act to create a state water system.
The San Lois Unit Act authorized the cooperation of the state and federal
government in building the California Aqueduct going all the way to Southern
California and San Luis Reservoir as a joint federal state facility.
>> Tom Holyoke: Now, in the way that the Westlands water district or probably
any water district contracts for water there's we're really talking about two
separate contracts. There's a contract for the water. And isn't there also a
different contract for building the facilities that ultimately requires the
district to repay the government for the building of the San Luis Units and the
conveyance?
>> Jim Ganulin: That's correct, what is referred to as a section 9E contract
which is a section in the reclamation law, authorizes what we call a water
service contract. And that contract authorizes the delivery of water and in
Westland's case the provision of drainage service for a certain amount of per
acre-foot charge. And that charge is to pay for the water as well as the
construction of main project facilities. I mentioned the San Luis Reservoir. I
mentioned the California Aqueduct, the San Luis Canal; those facilities are paid
for out of the revenues from that water service contract. The second kind of
contract is a section 9D contract, also part of the reclamation law, and that
contract authorizes the construction of individual facilities for the particular
district, in the Westlands case that authorized the construction of water
distribution facilities within the district itself to deliver the water from the
canal to the farmer and then as well as drainage facilities to collect brackish,
salty water from the on farm drains.
>> Tom Holyoke: Okay, when you came to work at Westlands or even at least in the
late 1960s do you remember at all how much water they were actually contracting
for or essentially how much water they were purchasing the rights to?
>> Jim Ganulin: The, Westlands 1963 water service contract provided for the
delivery of somewhere between 783,000 acre feet of water per year up to 900,000
acre feet of water per year depending on the ground water situation. And there
was a formula within the contract that determined how much water was delivered.
And ultimately, the ground water situation was such that it wound up being a
900,000-acre foot annual supply.
>> Tom Holyoke: And what was the price of the water per acre-foot?
>> Jim Ganulin: The price in that contract was seven dollars and 50 cents an
acre-foot for water service and 50 cents an acre foot for drainage. And I might
add, my sense is that those, that kind of contract was not unusual, that that
most of the contracts, contracts for water on the East side also provided for a
fixed price for the water.
>> Tom Holyoke: Okay, so, individual farmers were paying essentially eight
dollars per acre foot, 7.50 for the water service and 50 cents for prepayment of
the ->> Jim Ganulin: That's correct plus the cost of the districts operating and
maintaining the system and delivering the water to the farmer.
>> Tom Holyoke: Okay. You'd mentioned the drainage canal, could you just explain
a little bit why drainage is such a huge issue in the Westlands?
>> Jim Ganulin: Underlying a significant portion of the district is a Corcoran
clay layer in various depths but that's an impervious layer of clay. And, a
farmer irrigates the land, a part of the water is evap -- transperated, some is
taken up by the plant and some water is leached into the ground water. It goes
down in the soil. It gets that in that clay layer and it cannot go any further.
That water, which is brackish, very salty, builds up on top of the clay layer,
it winds up in the root zone and that precludes the ability to grow crops. The
drainage system was to take care of that brackish water, to take it off the
farm, move it to a drainage collector system, and ultimately into a drain which
was to go ultimately to the bay, to the bay area and empty into the Delta.
>> Tom Holyoke: We'll come back to drainage in just a moment.
>> Jim Ganulin: Okay.
>> Tom Holyoke: Is, as I read some of the history in Westlands. I understand
there was some, at least appears to have been some misunderstanding between
farmers in the district, and the Federal Government as to whether the contracts
originally signed in the 1960s were long term contracts or temporary contracts.
Or maybe that was a misunderstanding that was, well that the Federal Government
later on came to have a misunderstanding about that.
>> Jim Ganulin: The 1963 water service contract was for 40 years. In 1964, the
district negotiated a contract for the construction of the distribution and
drainage collector system. When that contract went before congress as the law
required, that it lay before congress for a period of, as I recall, 90 days,
there were hearings, I think, certainly on the senate side and perhaps in the
house side. And at those hearings, some of the critics complained about the
contract. The Secretary of the Interior decided to condition approval of that
contract upon a number of things. And those things were set forth in what we
referred to as the Holum Memorandum. The Holum Memorandum said that the
conditions preceding to the signing of that contract were first of all merger of
the Westlands law district with the West Plains Water Storage District which was
a district of about 200,000 acres immediately to the west of Westlands, that the
district would take over the operations and maintenance of the Coalinga Canal
System which is an offshoot of the San Luis Canal. And then in the return for
that the water for the West Plains area, the additional water supply was to be
allocated to the district. The district agreed to the Holum Memorandum. The
district wound up before the state legislature. The two districts were merged
and the contract was signed. That resulted in a need for a formal contract for
the additional amount of water. There were a number of temporary contracts over
the years while the amendatory contract was being negotiated. And to this day, I
don't know that the amendatory contract has ever been signed, for reasons we can
get into.
>> Tom Holyoke: You mentioned that there was criticism of the contract before
congress. What was the nature of the criticism?
>> Jim Ganulin: Well, there always was criticism of Westlands because of the
large land holdings within the district. It goes back to the critics concern
that acreage limitation and its requirements would not be satisfied. That law
requires that for excess land owners, somebody owning more than, at that time,
160 acres, to get one they would have to agree to sell the land in excess of 160
acres at an approved price established by the Bureau of Reclamation. And if they
didn't do it within ten years then the Secretary of Interior had a proprietary
to sell it for the landowner. The critics said, first of all, the large
landowners will not sign recordable contracts, and secondly even if they sign
them they won't sell the land. History proves that that was incorrect because
they signed recordable contracts and the land was ultimately broken up.
>> Tom Holyoke: What does that term mean recordable contract?
>> Jim Ganulin: It's a contract that's recorded in the county records. So, it's
basically like lien, like a lien for a first deed of trust on a house. It's
appears there as a matter of record.
>> Tom Holyoke: Okay. I know this is, probably again, a couple of years before
you came to Westlands. But, is there a particular reason that Westlands decided
to merge with the West Plains Water District?
>> Jim Ganulin: Well, I think the Holum Memorandum required that in order to get
the distribution system built. And I think the folks in West Plains at that
point wanted to become a part of the federal system for the reasons I mentioned
earlier, perhaps the cost of water. And they were having a problem obtaining a
contract for state water project water.
>> Tom Holyoke: On the subject of the Holum Memorandum, which I understand was
named after the Assistant Secretary of the Interior Kenneth Holum.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: So, Westlands Water District consider the Holum Memorandum to be
legally binding between Westlands and the federal government?
>> Jim Ganulin: We, it was not a formal contract in a traditional sense, but we
argued and believed and I still believe that there was a contract by necessary
implication, that there was an offer to provide certain water supply at a
certain price if the district did certain things. The district did those things
and we think therefore created and implied in fact or contract by estopple.
>> Tom Holyoke: Okay. And, as I understand it and please correct me if I'm
wrong, up until the later 1970s everyone sort of assumed that the Holum
Memorandum basically laid out an agreement between Westlands and the Bureau of
Reclamation of the Department of the Interior, but in the later 1970s, I guess
the Carter Administration no longer saw the Holum Memorandum as binding.
>> Jim Ganulin: In, starting in probably 1965 or ‘66 when the first water
delivery to Westlands commenced there were temporary contracts for water. They
were temporary for one year because the amendatory contract was still being
negotiated. This went on year after year with increasing amounts of water
delivered to the district, until you say, until the 19, probably mid to late
1970s when the Carter Administration did, did take issue with that.
>> Tom Holyoke: Is it fair to say that the Carter Administration was not that
friendly to the Westlands Water District?
>> Jim Ganulin: That, that's, you're being very kind. That's a fair
characterization.
>> Tom Holyoke: What was the nature of the problem?
>> Jim Ganulin: There were several problems. The, there was a service area
issue. The original feasibility report talked about a specific service area that
was, did not include the -- all of Westlands. In 1962, 19, yes, if my memory's
correct there was a soil classification survey and the classification survey and
all the actions that took place after that concluded that all of Westlands was
in the authorized service area. The Interior Department under Carter and Andruss
took the position that no that was not correct it was only about 400,000 acres
of the district in the service area. That was, that was one issue. Another issue
was with respect to acreage limitation and the administration's conclusion that
Westland's was not comply with the acreage limitation requirements. There was an
also, also an issue about payment for the drain. You recall I mentioned a 9E
contract with contracted for payment for the drain. And a 9D contract which
contracted for payment for the, in construction of facilities on farm and in the
district. The Carter people took the position that the drain should have to be
paid, the main drain would have to be paid for as a 9D contract as opposed to
being a water service contract.
>> Tom Holyoke: Okay. I'll come back to some of those things in a minute. Also
in the 1970, the later 1970s and, I don't know if this was something that was
pushed by the Carter Administration or by members of Congress. But we have, I
guess we'd call the Special Task Force on the San Luis unit which I understand
produced a report that was highly critical of the Westlands Water District. Do
you have the origins of this kind of this task force?
>> Jim Ganulin: Yes. The San Luis Unite Act had a specific amount authorized for
the construction of the district water distribution and drainage collection
system. That amount was reached. In order to continue constructing there had to
be an increase in that amount of authorization. The district went to then
Congressman Sisk and his Assistant Tony Coelho [assumed spelling] and said we
would like to have this amount increased. In order to get that amount increased
by some 31 million dollars Sisk and Coelho needed to deal with Congressman
George Miller, a long time critic of the district. A compromise was the increase
in the authorization but with the creation of a task force to investigate the
San Luis Unit and basically Westlands. The legislation, as I recall, set forth
who should be on the task force. Frankly, it was stacked with critics. We had
some representation on the task force but the report, as you know, came out
fairly critical.
>> Tom Holyoke: Yes, I remember reading in, I think it was the biography of the
Congressman Bernie Sisk that he felt that the entire task force was rigged
against Westlands and he had lobbied hard to have State Senator Rosanne Vuich
put on. And I, so I guess I come away with it she and a gentleman Adolf
Moskowitz [assumed spelling] had the primary responsibility for defending the
Westlands on the task force.
>> Jim Ganulin: That's correct. We, Westlands was aloud to appoint one member of
the task force. And, I don't recall who appointed Senator Vuich but they were
both on the task force and they were the two members of the task force that were
reasonably objective and not as critical as other members of the task force.
>> Tom Holyoke: Who was Adolf Moskowitz?
>> Jim Ganulin: Adolf Moskowitz, long time dear, dear friend and mentor for me
frankly, on a personal note. Renowned water attorney from Sacramento along with
Stan Chronic formed the Firm of Chronic and Moskowitz just about the time I was
getting out of law school. And they wound up with a firm preeminent within the
state. Adolf was special counsel for the Westlands in dealing with litigation in
other matters and was Westlands representative on the task force.
>> Tom Holyoke: Okay. How did Westlands water district immediately react to a
lot of the criticism coming from the Carter Administration and from Congressman
Miller? Did was there an effort to put together a political strategy to sort of
kind of fight back against what was happening?
>> Jim Ganulin: There was, yes, there was an effort but, frankly it was, it was,
probably fell on deaf ears and it was, as you know, that can be very difficult.
>> Tom Holyoke: One of the issues
concerns that happened during the
redefining where the service area
Crulit [assumed spelling] Service
you mentioned earlier, I guess one of the
Carter Administration was the re, sort of
was. And then we get into this term called the
Area, I think I'm pronouncing that right.
>> Jim Ganulin: You are. That is the service area I'm talking about it was,
Crulit's opinion, he was a solicitor also on the task force. But it was his
opinion that, that'll, opined that not all the district was entitled to water
service.
>> Tom Holyoke: And where did their definition of the service area come from?
>> Jim Ganulin: Feasibility report for the San Luis Unit which was done in the
early 1950s.
>> Tom Holyoke: Your opinion was this just a difference of opinion, was there
political motivation behind some of this?
>> Jim Ganulin: I'm biased. And I pause because I want to use my words
carefully. But, in my judgment, there was a bias.
>> Tom Holyoke: 1980 President Carter is defeated by former California Governor
Ronald Reagan. We have a new administration coming in; an administration that
knows something about California water issues or at least the president, the new
president knows something about California water issues. Did Westlands Water
District see a change in attitude from the Department of the Interior with the
coming of the Reagan Administration?
>> Jim Ganulin: We thought there'd be a change. There was a change but, but we
still had issues. We had negotiated a, an amendatory contract with the Carter
Administration for a water rate of, my recollection is about nine dollars and 50
cents as opposed to the seven dollars and 50 cents and a water supply to cover
the amount of water covered in the Holum Memorandum. Reagan was elected, had a
conservative Secretary of the Interior. We felt that, and our board felt that
well the importance of a contract would be more significant to the new
administration than it had been to the last. So, we went to Washington with
three of our board members to talk with Interior. And Interior, at that time,
said well we don't like what the Carter Administration was doing we don't agree
with all that they were doing. On the other hand, you're not paying enough for
water. And, if you don't pay cost of service for water then you're not going to
get a contract for additional water supply. As a matter of fact, we probably
will have to stop water service. That led to major litigation by the district
involving an effort to get the United States to deliver water to the district.
The -- on the eve of a hearing before the Federal District Court judge the
United States and the District settled the law suit if you will, actually what
they did is they put off an ultimate decision. They said, the district agreed to
put into a trust fund the difference between seven dollars and 50 cents and 13
dollars and 50 cents. And that trust fund was established, the money went in
there, and depending on the ultimate outcome of the litigation, that would, that
would dictate who got the excess money, go back to the district if the district
was right, go to the United States if the United States was correct.
>> Tom Holyoke: Okay. In the end, after what happened with the Carter
Administration what was happening with the Reagan Administration, did Westlands
end up paying more per acre for the water from 7.50?
>> Jim Ganulin: Yes. That, it's more complicated. As a result of the district's
lawsuit against the United States, some of the landowners within the district
intervened in the lawsuit and we would up with what is referred to as the
Barcellos [assumed spelling] case. And that case involved not only the water
supply issues we just talked about but the drainage issues. It involved the
rights of landowners within different areas of the district to receive water.
That was protracted litigation. Mr. Moskowitz and I decided that since there
were different areas of the district and with different interest we filed what
is referred to as a class action against the landowners in the four different
areas of the district. And that, the areas were dictated by the service areas,
and, and so we had four classes in the litigation. The United States was the
defendant. We had five independent represented parties in the lawsuit that dealt
with the water supply issues, drainage and so on.
>> Tom Holyoke: Yes. I see what you mean by saying it's more complicated.
>> Jim Ganulin: Yeah.
>> Tom Holyoke: As I understand, part of the trouble was rising because there
were differences in what different farmers in the district were required to pay
or the type of contracts they had or, related to the farmers who were in the
original Westland's Water District versus those in the West Plains.
>> Jim Ganulin: Okay, that, the issue there was the amount of water to be
allocated to each of the two areas, to the original Westlands area what we refer
to as area one, and the original West Plains area, area two. The merger statute
said, and I think I can quote it, that the lands within the original Westlands
water district shall have a prior right to water under any contract in existence
on the day of the merger. And that was referring to the 1963 contract. A
significant dispute arose as to what that language meant and how much of the
water would be allocated to area one and area two particularly when there's a
shortage. And that issue was a part of the Barcellos Litigation.
>> Tom Holyoke: So, farmers in the area one area had water rights senior to
those in area two?
>> Jim Ganulin: Yes. But, but, but similarly the water users in area two also
had some rights and that was, that's what caused the clash.
>> Tom Holyoke: So, at this point in time, the late 70s and into the early 80s
we have, there's some dissention within Westlands Water District between the
farmers themselves over the price to be paid and what should be done.
>> Jim Ganulin: That's correct. And, when we, when we're dealing with the
Barcellos case and the very complex issues, a couple of the parties went east
and talked to the folks at Interior. They asked Adolf and I to go along. We
opted not to because these were landowners living in a certain area and we were,
had to represent the entire district. What those folks received at Washington
was the assurance that the United States was willing to negotiate on the
contract as long as Westlands spoke with one voice. And you recall I said there
were four different classes and five independently represented parties. So, we
started down the path of trying to work out internally positions on the various
issues. And that took us about a year and a half. And then ultimately we sat
down and negotiated with the United States and wound up with a settlement.
>> Tom Holyoke: Let's focus a little bit on the interceptor drain. It seems to
me that this has always been a little bit of the Westland's Water District's
Achilles' heel, you know, the great problem that they needed to get solved and
yet it really hasn't been solved even today.
>> Jim Ganulin: The San Luis Unit Act states that before there's construction of
water distribution and facilities the United States shall either have a contract
with the State of California for a master drain along with the state or make
provisions for drainage. In the early 1960s, the state concluded that it could
not participate in the master drain. And I'm not certain why they concluded that
but that was their conclusion. The United States started making plans for a San
Luis drain, to take brackish, salty water from the district up to the Delta.
During the 60s there were two lawsuits filed by the exchange contractors, which
was a group of water districts north and west of the district saying that you
better have drainage because if you don't the brackish water's going to drain on
our land and create problems for us. In both those cases the United States, with
the district prevailed saying the statute provides there shall be provision for
drainage. There are plans to have drainage and therefore the statute's been
complied with and you can continue constructing water distribution facilities.
Thereafter, the United States did construct a drain and did construct some on
farm drainage collector facilities within the district. Some of the farmers did
connect up to those facilities and the district started to collect drainage
water and move it through the San Luis drain to what was then a holding
reservoir, Kesterson Reservoir. Ultimately, the water was going to go on to the
Delta. In 1985, some of the biologists found deformed birds at Kesterson. They
concluded it was a product, the result of selenium which is a naturally
occurring element in the soil. And that was taken up by the plants and the birds
were eating the plants and the birds were deformed. And the Interior said well
we have to stop drainage service and water service. We were able to negotiate an
agreement with the United States to have water service continued but the
district had to take care of its drainage water. And we agreed to do that. And
if we didn't do it, we would agree to plug the drains that had been constructed.
The Corcoran clay that I mentioned earlier was a problem for us because we had
some ponds, we bought 365 acres, we were going to build ponds and pond the water
and let it evaporate and so on. But, we needed an impervious layer beneath the
ponds so that we would not adversely impact ground water. When got the bids to
some 50 few 60 million dollars to build the ponds, the board, we couldn't do it.
It was just too costly. We therefore had to plug the drains and that resulted in
further litigation. Moving on, there was litigation involving United State's
obligation to provide drainage and the United States said well no we're excused
because we do not have the technical capability to provide drainage service
because Congress has precluded us from putting the drainage water in the Delta,
the state of California's done the same thing. The State of California said you
can't put it in the Monterey Bay. And so, the United States said we can't, we
can't provide drainage services. The Federal District Court, Judge Wanger
[assumed spelling] and the United Circuit Court of Appeal concluded you're not
excused United States, you have an obligation to provide drainage. So, here was
sit with no drainage service. The problem is not taking the chemicals out of the
water, we can, they can take care of selenium and whatever else is in the water.
The problem is the salt. How do you get rid of the salt? I heard of estimates
that if you drained all the land in Westlands that needed draining there would
probably be 80 boxcar loads of salt per day.
>> Tom Holyoke: Per day?
>> Jim Ganulin: Yeah. I may be off but it's a gigantic amount of salt. And folks
will say well do a contract with Wesley Salt. Well, they can't, they can't use
that much salt.
>> Tom Holyoke: Are a majority of Westlands farms in a situation where they have
to drain off the water?
>> Jim Ganulin: I'm not sure, no, it's not a majority but it's, you know, tens
of thousands of acres.
>> Tom Holyoke: Okay, sort of get back to a couple of points in there. So,
initially after the State of California decided that it could not build a master
drain for the valley the Bureau of Reclamation essentially had the
responsibility of building a drain.
>> Jim Ganulin: Correct.
>> Tom Holyoke: As I understand, they, even though they essentially accepted
this responsibility in the 1960s it wasn't until the 1970s, the mid 70s they
even started working on building a drain.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: And, why was there such a long delay when this is known to be so
crucial and required?
>> Jim Ganulin: I think the thing at that time was the water supply facility
need an importance, was more significant than the drainage need, right then and
there, right then.
>> Tom Holyoke: Okay. So, the Bureau of Reclamation simply couldn't do too many
different things?
>> Jim Ganulin: That's correct. And, there was a limit on how much money was
available.
>> Tom Holyoke: Okay, so congressional appropriations.
>> Jim Ganulin: Appropriations, that's correct.
>> Tom Holyoke: So, by the early 1980s we now have a drain that's essentially
have completed. It's reached as far as the Kesterson Reservoir; I guess it's
called the Kesterson Reserve, wildlife reserve now.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: And today the Kesterson Wildlife Reserve is simply not
functioning as a drain.
>> Jim Ganulin: That's correct there's no drainage. There is no drainage to the,
there's no drainage water put in the San Luis drain and nothing going to
Kesterson area.
>> Tom Holyoke: Okay. And the original idea was to build another canal beyond
Kesterson all the way down to the Delta down, I believe around by Antioch.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: And the reason that that has not been done is partially because
on one hand you're saying the Bureau of Reclamation is not being permitted to
build it even though on the other hand the government is saying they have to
build it.
>> Jim Ganulin: That's correct the courts have said there's an obligation to
provide drainage service. The court hasn't said what you have to do to do that,
how to provide the drainage service. But that's, that's your obligation United
States.
>> Tom Holyoke: So, across all these decades' drainages, everyone acknowledges
that drainage is essential for a lot of the farming in Westlands. We have not,
for most of this time there is not been drainage. Do you know how severe this
impact has been on Westlands Water District?
>> Jim Ganulin: I'm not, I'm not, I've been away from Westlands for about 15
years and I don't really know that. I know that there are efforts by a number of
farmers to create their own solutions. A farmer by the name of John Diener has
done a fair amount of growing salt tolerant crops and recycling drainage water
on those crops and so on. But, there's still a significant drainage problem.
>> Tom Holyoke: Okay. Is there anything else on drainage you wish to add?
>> Jim Ganulin: I think that; let's talk a little bit about drainage and water
supply. With the shortage of water as a result of the hydrologic drought as well
as, excuse me, what I refer to as the regulatory drought, Central Valley Project
Improvement Act, Endangered Species Act, Bay Delta Water Quality Standards,
there's been a significant reduction in water supply over the past several
years. In addition, there's been no drainage service. As a result of both those,
particularly the water supply, the district has fallowed a fair amount of land.
But, let me go into that in a minute. Let me think more of that and I want to
amplify more about that.
>> Tom Holyoke: Okay, yes.
>> Jim Ganulin: We were talking about drainage. Let me backtrack just a little
bit and talk a little bit about the Barcellos case, the class action to which I
referred earlier because it did involve drainage. That litigation involved a
number of issues. It was ultimately settled. The judge signed the settlement
order in December of 1986. It dealt with the water supply issue. It reaffirmed
the district's right to the 900,000-acre feet of the 1963 contract and the
200,000-acre feet of water that was provided for in the Holum Memorandum. So, we
had a water supply of 1,150,000-acre feet. It dealt with the price of that
water. And it said that the district would pay, basically the operation and
maintenance charge for the water, what it cost the United States to deliver the
water, or in area two the water, the water users would likewise pay cost of
service if the amount of water was over and above that authorized by reclamation
law and over the landholding size then there was a full cost paid for the water.
Secondly, it dealt with the service area. It ratified that the entire district
was entitled to water service. Thirdly, it dealt with drainage and basically
created a trust fund for drainage solutions, my recollection is about five
million dollars. And the district was to embark on various projects to solve the
drainage problem. There was, and the district had a sludge removal project, they
explored deep well injection of drainage water, they had a couple of other
things and they never could find a solution. So, but the trust fund was there
for that purpose. Then lastly, it dealt with the allocation of water between
areas one and two, which I referred to earlier. And the settlement basically
said until 2008, which was the date on which the 1963 contract was to expire,
the area one would have a prior right to water. Water not used in area one would
go to the area two along with the 250,000-acre feet. And they put off dealing
with the solution of water needs after 2008 that was deferred to another time.
And that ultimately was settled in further litigation.
>> Tom Holyoke: Okay, so essentially the final resolution of the Barcellos case
was resolving a lot of the major issues for Westlands Water District.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: Okay. The next topic then sort of settled with drainage then is
to move briefly into the issue of the acreage limitations.
>> Jim Ganulin: Fine.
>> Tom Holyoke: Okay. First off, this is, it's a criticism that Congressman
George Miller had brought up, and leveled against Westlands Water District, the
Carter Administration was concerned with it. What is the problem?
>> Jim Ganulin: The reclamation law which governs the deliver of water to
federal districts has a number of requirements. The law says if you own what is
referred to as excess land, which in the early days was 160 acres per individual
landowner, then you cannot get water for that land unless you agree to sign a
recordable contract, which is a contract recorded in the county at the county
level. And, under that contract, you agree to sell your land within ten years at
a price approved by the Bureau of Reclamation which does not include an
increment of value brought about by the delivery of project water to that land.
And, if you don't sell it within the ten years, the Secretary of the Interior
has the power of attorney to sell it for you. The, early on the critics said,
well, I'll go back to the, to the, to the merger and to the delivery of water to
reclamation districts or federal districts that have the reclamation law. The
critics said well all the large landowner wanted to do was to have federal water
delivered and have the ground water basin increase its supply and they could
then use ground water and they wouldn't have to sign recordable contracts. The
large landowners on the other hand did in fact sign recordable contracts. They
put tens of thousands of acres under contract in which they agreed to sell the
land within ten years. And ultimately, the entire district and all of its excess
land holdings were under contract. Then, when they started to sell, the critics
said wait a minute. You're just selling to paper famers was the expression used
by the critics. Well, they were in my, in my experience they were not paper
farms. They were legitimate farmers who were farming land and the land was in
fact broken up, the large landholdings were broken up.
>> Tom Holyoke: Okay, so, in other words Westlands Water District was in fact in
compliance with the Reclamation law.
>> Jim Ganulin: Yes, yes.
>> Tom Holyoke: Who was, who were National Land for People?
>> Jim Ganulin: National Land for People was a local organization that was very
critical of land holdings within the Westlands Water District, the large land
holdings. They were seeking changes in reclamation law which would further
constrict the delivery of water to what to what they would refer to as large
landowners.
>> Tom Holyoke: Why ultimately did this then require basically the 1982
amendments to the Reclamation Act the change in statute?
>> Jim Ganulin: In 1976 or 1977, the National Land for People filed a lawsuit
against the United States saying that reclamation law was not being properly
enforced. As a matter of fact that resulted in some regulate, proposed
regulations by the Department of Interior that would've gone far beyond what we
and most folks in federal, federally served districts felt was the law. For
example, it would've required residency on the land as a requirement. That was
based on the 1902 statute, which we felt was repealed in 1926. Those regulations
were proposed by the Carter-Andruss Administration. We all went to court and
Judger Crocker ruled that those regulations were invalid and to be allowed to
continue in some water service. That started an effort in Congress to see what
could be done about reforming the law. I think the landowners in Westlands felt
that that would be advantageous that the 160 acres which I mentioned earlier was
not an appropriate size of farm or criteria for water service. Families were
should not be entitled to 160 acre per individual because there were kids and so
on. So, it wound up being, there was an effort to seek reform by both the
critics and the landowners.
>> Tom Holyoke: And, statutory change, as I understand upped the acreage
limitation to was it 960?
>> Jim Ganulin: 960 acres per family.
>> Tom Holyoke: Per family. As I understand it after the passage of the ‘82,
amendments to reclamation law it was another five years before the Bureau of
Reclamation profligated out its new rules. When the rules come out, Congressman
George Miller, the critic of Westlands Water District referred to them as an
outrage, betrayal. Do you remember what his problem was with the new rules?
>> Jim Ganulin: Well, I think his problem was that he didn't, he didn't like the
fact that there was an increase in the acreage. He didn't like the provisions
with respect to trusts. He was he felt that Westlands would, in his judgment,
continue to avoid the law. I mean it's been a long-standing point of criticism
for him, criticizing the district and its operations.
>> Tom Holyoke: Just one last question on the actual movement of the
legislation. Did you have a great deal of success working through valley
lawmakers in pushing this?
>> Jim Ganulin: Yes. The landowners within the district formed a group called
California Westside Farmers. Since that, the acreage limitation issue was not
technically a district issue it was a landowner issue because you were dealing
with the impact of reclamation on the individual farmer's operation, landowner's
operation. California Westside Farmers took a lead rule in seeking reform to the
reclamation law. They joined with organizations from the other 17 western states
subject to that law. And that, that resulted in the 1982 act. And the valley
congressmen were very helpful in that effort.
>> Tom Holyoke: Anything else you want to add on to the critics limitations?
>> Jim Ganulin: No, I would say that the, you mentioned the regulations; I mean
the regulations did come out. The landowners throughout the district did comport
with those regulations. The land holdings were further broken up. Those folks
who were receiving water for more than 960 acres of farm ground were paying full
cost for that water as required by the law. The anti speculation revision the
laws were enforced. I think the law was successful.
>> Tom Holyoke: I guess moving into talking about an issue that may come back to
us in the near future and that is the peripheral canal. The original peripheral
canal proposal of the late 1970s which ultimately then failed on the ballot, I
think, in 1982. Was Westlands Water district a prime supporter of the original
peripheral canal proposal?
>> Jim Ganulin: We were a supporter but I don't think we were heavily involved
in that effort. Our intentions were really directed at the federal level and
dealing with reclamation law and those issues, getting appropriations for
constructing the system.
>> Tom Holyoke: Would a peripheral canal at that time, was it seen as something
that would've been beneficial to Westlands.
>> Jim Ganulin: Absolutely, it was it was beneficial we just don't, we did not
take a major role in that effort though.
>> Tom Holyoke: Okay. So in the later 1980s a lot of the, many of the legal
problems facing Westlands Water District have now been resolved. Is there
actually any change in really the attitude of the Reagan Administration by the
late 1980s?
>> Jim Ganulin: No, not significantly. Once we resolved the Barcellos case we,
our disputes at the federal level were far less.
>> Tom Holyoke: Would you tell me a little bit about the 1992 Central Valley
Project Improvement Act?
>> Jim Ganulin: The primary movers of that legislation were Senator Bill Bradley
from New Jersey and Congressman George Miller. And they concluded that the
reclamation law, particularly related to the Central Valley Project needed to
be, in their judgment, improved. And they started down the road with legislation
which would've done just that, would've specifically allocated water for
environmental purposes among other things, dealt with water transfers, dealt
with provisions concerning amendatory contracts and the like. The legislation
was always a problem for California and the federal contractors. There was a
significant effort to work with Miller and Bradley to resolve some of the
difference of opinion, although there was concern that we couldn't we wouldn't
do that because of the bias which in our judgment they had. We had, when it got
toward the legislation was almost ready to be finalized, there was a question of
whether or not, excuse me, we should negotiate with Miller and Bradley in order
to litigate some of the adverse impacts that we thought the legislation would
bring upon us. At the 11th hour in a five-hour conference call with, probably,
30 different people on the phone, it was concluded, at the urging of some of our
principles, that we should negotiate, that President Bush would veto the
measure. Some of us had concerns about that. Well, that would in fact happen, I
guess we were correct. It didn't happen. The bill was part of a larger bill that
covered other states and things which they wanted and not withstanding efforts
to talk. Our people did go talk to; I guess Jim Baker was Chief of Staff at that
time. And ultimately Bush did not Veto the bill. So, the Central Valley Project
Improvement Act became law in 1992.
>> Tom Holyoke: What were the concerns that Senator Bradley and Congressman
Miller had that led to this legislation?
>> Jim Ganulin: Too much water being used by, by the Central Valley Project
water users and not enough water for the environment. I think that was, you
know, the primary thrust of the legislation.
>> Tom Holyoke: This is a, I understand this is one of the first times that
environmental components were added into reclamation law.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: After 1992, you were not at Westlands much longer than that
time.
>> Jim Ganulin: That's correct. I retired in 1994.
>> Tom Holyoke: And is that when you went on to become of counsel at Baker,
Manock and Jensen?
>> Jim Ganulin: That's correct, that's correct.
>> Tom Holyoke: Okay. In that case starting to go into the rapid phase here you
spent a life in California water law and California water politics. In your
opinion what are some of the big changes you've seen if there have been big
changes in and not just law and policy, but even public attitude?
>> Jim Ganulin: Well, let's go back for a moment to the CVPI, Central Valley
Project Improvement Act. That was, in my judgment, one component of what we've
referred to as a regulatory drought, cause of a regulatory drought. There was
some 800,000 acre feet of Central Valley Project water yield here marked for the
environment. The endangered species act that we've been reading about in recent
years became a significant factor in terms of the amount of water exported from
the Delta. The Bay Delta water quality standards required by the Clean Water Act
also restricted the amount of water that could be exported. So, the whole
environment, excuse me, both for Westlands and other exporters like Metropolitan
Water District of Southern California, or Santa Clara were adversely impacted by
the substantial decrease in the amount of water from the Delta. This is probably
the most significant issue for, I think the state, and its water, the water
issues for the state is the substantial decrease in the amount of water which
can be exported from the Delta under present regulations. I think that there is
a lack of recognition of other causes of problems within the Delta.
>> Tom Holyoke: Pollution?
>> Jim Ganulin: Pollution is one. Non-native species that come in, up stream
diversions, and heretofore those have not been taken into account in terms of
figuring out how to solve the Delta problems. The environment for solving that
problem is really, it's hard to fathom it's hard for me to understand but it's
there. There's the two parties are at opposite ends of the spectrum at the state
level, they argue over there shall be no storage, everything, all the problems
can be solved by water conservation, water transfers on the one hand. On the
other hand there needs to be, needs to be new storage, there needs to be
conveyance to the Delta and the two parties are at locked heads over those
issues. Very significant, I think that California's residents don't realize the
significance of those issues because they see it impacting agriculture in the
Center Valley. They're not yet seeing it in the big cities. And, once they see
it in the big cities, it's going to have, perhaps a different environment in
which to solve the problem. I think that if we had an earthquake and there were
salt at the pumps the two heads the federal and state pumps and you couldn't
deliver the water to Southern California we'd get a peripheral canal a lot
quicker than we would now. I've heard fish and game employees say one on one
that the peripheral canal would not be an adverse impact on the Delta it would
be beneficial. But in the crowded room with a lot of folks there and the
rhetoric fairly strong, you won't hear him or her say that.
>> Tom Holyoke: Is this, is this political fighting that you see in Sacramento
maybe even to some extent in Washington DC, like California can no longer seem
to create the great water projects we had in the past, because we've had
enormous projects that have been done in this valley, the Central Valley Project
the State Water Project. These were projects on enormous scales some of the
biggest in the United States. And the will to do those projects from the 1940s
50s and 60s no longer seems to be there.
>> Jim Ganulin: Well, and following up on that where would we be if we did not
have the 1960 legislation of both the federal and state level which created
those projects? I mean if we didn't have the State Water Project where would we
be now? I mean the former, Pat Brown Senior, Governor Pat Brown Senior had the
foresight to do that. We don't see that now. We just don't see the political
climate to get that done now. And that's sad.
>> Tom Holyoke: Is there any sense that, given the problems, the drainage now
that the issues with the Endangered Species Act, that Westlands Water District
and, well the farms out there are living on borrowed time?
>> Jim Ganulin: Over the years when I've told stories to my wife about there's
going to be a drought, there's a water supply shortage, she would, has always
been very sympathetic but she would always say but your farmers are so
innovative they will find a way. I don't think you can say that now. Had to
fallow tens of thousands of acres in Westlands, the water supply is at best
insecure and unreliable, we see a ten percent supply in 2008-2009. Who knows
what its going to be next year? The efforts to resolve the issue and seek
solutions even on a temporary interim basis run into all kinds of roadblocks.
It's very difficult. I don't know what, honestly don't know what the future
holds but it's a, it's very concerning.
>> Tom Holyoke: Okay, I'm at the end of my questions are there any final things
you would like to add?
>> Jim Ganulin: Yeah, it's been a fascinating 40 plus years, been a lot of
changes, a lot of beneficial changes, but, but we're at a tough time now. And
it's concerning. And there's all kinds of efforts to try and resolve problems,
and I just wish people would sit down at the table and really resolve, work to
resolve them as opposed to being doctrinaire in their approach.
==== Transcribed by Automatic Sync Technologies ====
>> Tom Holyoke: Okay Jim, let's just go ahead and start with a little bit of
personal history.
>> Jim Ganulin: Okay.
>> Tom Holyoke: Where were you born?
>> Jim Ganulin: Born in Los Angeles California and lived and grew up there, went
to college at the University of Colorado for two years then UCLA for my last two
years, then went to law school in Berkeley Boalt Hall and graduated from there
in 1959. I might add, from an antidotal standpoint, never took water law, never
took state and local government law. When I got my first job, the guy I went to
work for in the Attorney General's office said I'm not going to give you any
water cases because my father in law at the time was a water law attorney and I
didn't get any cases in water law. And then wound up in Fresno going to work for
Westland's Water District.
>> Tom Holyoke: So, you came to the valley initially to work for Westlands?
>> Jim Ganulin: That's correct.
>> Tom Holyoke: And you haven't really done a lot with water law or much at all
with water law before.
>> Jim Ganulin: Had done nothing with water law or state and local government or
public agency law. And my entire career has been involved with those in those
two fields.
>> Tom Holyoke: So, when you came to Westland's water district did you have to
take a crash course in water laws and understand water laws?
>> Jim Ganulin: No, I think I kind of learned it on the job, picked it up as the
years passed.
>> Tom Holyoke: Okay, what year did you come to work for Westlands?
>> Jim Ganulin: I started in January of 1966.
>> Tom Holyoke: Okay, did you start off as General Counselor?
>> Jim Ganulin: No. I started out as assistant general counsel. And I did that
from 1966 until 1977 when I became general counsel for the district.
>> Tom Holyoke: Who was general counsel when you first came there?
>> Jim Ganulin: Ralph Brody.
>> Tom Holyoke: Just kind of for some clarification, what is a water district?
>> Jim Ganulin: There are a number of different kinds of water districts in
California. There are creative, pursuant to statutory authorization. Irrigation
districts are basically resident voting districts, people that are providing
irrigation water. California Water Districts, of which Westlands is one, is a
landowner voting district and that was created because the landowners were
responsible for the assessments to pay for facilities. And, the conclusion was
it was unfair to have just residents voting because there are so few residents
in districts like Westlands. So, the landowners have one vote for every dollar
of assessed evaluation.
>> Tom Holyoke: In that kind of voting system is that system that essentially
gives larger landowners a larger, say than in the governance of the district.
>> Jim Ganulin: That's, that's correct. I might add that the issue has gone
before the California supreme, pardon me, the United States Supreme Court twice
and the United States Supreme Court has held that that is a valid way of voting.
>> Tom Holyoke: In terms of size, Westlands, I understand, is one of the largest
in California. Is it the largest in California Water Districts?
>> Jim Ganulin: I think Imperial Irrigation District, perhaps, is larger. But
Westlands is the largest irrigated district in the state.
>> Tom Holyoke: Okay. When you came to Westlands what kind of crops, were they
growing? Do you happen to remember what kind of crops were farmed especially?
>> Jim Ganulin: Perhaps five or six crops, cotton, a lot of melons, tomatoes,
alfalfa, sugar beets, were the main crops of that point at that time.
>> Tom Holyoke: Okay. Could you explain a little bit on how water districts
contract for water with the Federal Government Bureau of Reclamation or in some
cases the state?
>> Jim Ganulin: The district, whether it's a Central Valley Project contractor
or a state water contractor, contracts with the entity, the Department of the
Interior on the one hand or the State of California on the other for a water
supply. That water supply is provided by in the federal system of the Central
Valley project. The district pays the United States per acre-foot for that water
and they're subject to various provisions of the contract regulating the use of
that water and the division of federal law with respect to the use of that
water.
>> Tom Holyoke: Okay, so basically the district then acts as a middleman. Is it
the district that purchases the water from the Department of the Interior in the
Case of Westlands water district and then resells that to the farmers?
>> Jim Ganulin: That's correct. The district does purchase the water from the
United States, it in turn delivers the water to its constituents its landowners
and water users. And they pay a water toll charge for the water. And then, in
Westlands case, they also pay, they have assessments to pay for facilities built
by the district and for certain services provided by the district.
>> Tom Holyoke: Okay. Do you know if there's any particular reason why Westlands
chose to make its contracts with the Federal Government with the Department of
the Interior rather than the state water project?
>> Jim Ganulin: Well, I think, I'm not certain of this, but I, my sense is they
probably thought the water would be cheaper because there's a, there is no
interest, interest component in connection with that water under federal
reclamation law. And while there were regulations that the landowners had to
comply with in order to get delivery of the water, acreage [inaudible]
limitations, they felt, my sense is they felt that was a fair price to pay for a
cheaper water.
>> Tom Holyoke: Has it actually turned out to be cheaper water?
>> Jim Ganulin: With the advent of the Reclamation Reform Act and the Central
Valley Project Improvement Act, I'm not so certain it has been cheaper.
>> Tom Holyoke: Okay. The time you came to Westlands Water District the district
was a relatively new entity at the time?
>> Jim Ganulin: The district was formed in 1952 for the expressed purpose of
seeking a supplemental water supply from the United States. The San Luis Unit
authorizing legislation was passed in 1960. And that authorized the construction
of the San Luis Unit of the Center Valley Project. It in turn authorized the
delivery of the construction of major project facilities such as the San Luis
Reservoir and the California Aqueduct, and then delivery of water to the
district itself.
>> Tom Holyoke: And the San Luis Reservoir was really essential for creating a
large water district and creating large-scale agriculture on the west side of
the San Joaquin Valley.
>> Jim Ganulin: That's correct. And the, the other interesting thing about the
San Luis Reservoir is that it was a part of a joint federal-state effort. In
1960, the state passed the Burns-Porter Bond Act to create a state water system.
The San Lois Unit Act authorized the cooperation of the state and federal
government in building the California Aqueduct going all the way to Southern
California and San Luis Reservoir as a joint federal state facility.
>> Tom Holyoke: Now, in the way that the Westlands water district or probably
any water district contracts for water there's we're really talking about two
separate contracts. There's a contract for the water. And isn't there also a
different contract for building the facilities that ultimately requires the
district to repay the government for the building of the San Luis Units and the
conveyance?
>> Jim Ganulin: That's correct, what is referred to as a section 9E contract
which is a section in the reclamation law, authorizes what we call a water
service contract. And that contract authorizes the delivery of water and in
Westland's case the provision of drainage service for a certain amount of per
acre-foot charge. And that charge is to pay for the water as well as the
construction of main project facilities. I mentioned the San Luis Reservoir. I
mentioned the California Aqueduct, the San Luis Canal; those facilities are paid
for out of the revenues from that water service contract. The second kind of
contract is a section 9D contract, also part of the reclamation law, and that
contract authorizes the construction of individual facilities for the particular
district, in the Westlands case that authorized the construction of water
distribution facilities within the district itself to deliver the water from the
canal to the farmer and then as well as drainage facilities to collect brackish,
salty water from the on farm drains.
>> Tom Holyoke: Okay, when you came to work at Westlands or even at least in the
late 1960s do you remember at all how much water they were actually contracting
for or essentially how much water they were purchasing the rights to?
>> Jim Ganulin: The, Westlands 1963 water service contract provided for the
delivery of somewhere between 783,000 acre feet of water per year up to 900,000
acre feet of water per year depending on the ground water situation. And there
was a formula within the contract that determined how much water was delivered.
And ultimately, the ground water situation was such that it wound up being a
900,000-acre foot annual supply.
>> Tom Holyoke: And what was the price of the water per acre-foot?
>> Jim Ganulin: The price in that contract was seven dollars and 50 cents an
acre-foot for water service and 50 cents an acre foot for drainage. And I might
add, my sense is that those, that kind of contract was not unusual, that that
most of the contracts, contracts for water on the East side also provided for a
fixed price for the water.
>> Tom Holyoke: Okay, so, individual farmers were paying essentially eight
dollars per acre foot, 7.50 for the water service and 50 cents for prepayment of
the ->> Jim Ganulin: That's correct plus the cost of the districts operating and
maintaining the system and delivering the water to the farmer.
>> Tom Holyoke: Okay. You'd mentioned the drainage canal, could you just explain
a little bit why drainage is such a huge issue in the Westlands?
>> Jim Ganulin: Underlying a significant portion of the district is a Corcoran
clay layer in various depths but that's an impervious layer of clay. And, a
farmer irrigates the land, a part of the water is evap -- transperated, some is
taken up by the plant and some water is leached into the ground water. It goes
down in the soil. It gets that in that clay layer and it cannot go any further.
That water, which is brackish, very salty, builds up on top of the clay layer,
it winds up in the root zone and that precludes the ability to grow crops. The
drainage system was to take care of that brackish water, to take it off the
farm, move it to a drainage collector system, and ultimately into a drain which
was to go ultimately to the bay, to the bay area and empty into the Delta.
>> Tom Holyoke: We'll come back to drainage in just a moment.
>> Jim Ganulin: Okay.
>> Tom Holyoke: Is, as I read some of the history in Westlands. I understand
there was some, at least appears to have been some misunderstanding between
farmers in the district, and the Federal Government as to whether the contracts
originally signed in the 1960s were long term contracts or temporary contracts.
Or maybe that was a misunderstanding that was, well that the Federal Government
later on came to have a misunderstanding about that.
>> Jim Ganulin: The 1963 water service contract was for 40 years. In 1964, the
district negotiated a contract for the construction of the distribution and
drainage collector system. When that contract went before congress as the law
required, that it lay before congress for a period of, as I recall, 90 days,
there were hearings, I think, certainly on the senate side and perhaps in the
house side. And at those hearings, some of the critics complained about the
contract. The Secretary of the Interior decided to condition approval of that
contract upon a number of things. And those things were set forth in what we
referred to as the Holum Memorandum. The Holum Memorandum said that the
conditions preceding to the signing of that contract were first of all merger of
the Westlands law district with the West Plains Water Storage District which was
a district of about 200,000 acres immediately to the west of Westlands, that the
district would take over the operations and maintenance of the Coalinga Canal
System which is an offshoot of the San Luis Canal. And then in the return for
that the water for the West Plains area, the additional water supply was to be
allocated to the district. The district agreed to the Holum Memorandum. The
district wound up before the state legislature. The two districts were merged
and the contract was signed. That resulted in a need for a formal contract for
the additional amount of water. There were a number of temporary contracts over
the years while the amendatory contract was being negotiated. And to this day, I
don't know that the amendatory contract has ever been signed, for reasons we can
get into.
>> Tom Holyoke: You mentioned that there was criticism of the contract before
congress. What was the nature of the criticism?
>> Jim Ganulin: Well, there always was criticism of Westlands because of the
large land holdings within the district. It goes back to the critics concern
that acreage limitation and its requirements would not be satisfied. That law
requires that for excess land owners, somebody owning more than, at that time,
160 acres, to get one they would have to agree to sell the land in excess of 160
acres at an approved price established by the Bureau of Reclamation. And if they
didn't do it within ten years then the Secretary of Interior had a proprietary
to sell it for the landowner. The critics said, first of all, the large
landowners will not sign recordable contracts, and secondly even if they sign
them they won't sell the land. History proves that that was incorrect because
they signed recordable contracts and the land was ultimately broken up.
>> Tom Holyoke: What does that term mean recordable contract?
>> Jim Ganulin: It's a contract that's recorded in the county records. So, it's
basically like lien, like a lien for a first deed of trust on a house. It's
appears there as a matter of record.
>> Tom Holyoke: Okay. I know this is, probably again, a couple of years before
you came to Westlands. But, is there a particular reason that Westlands decided
to merge with the West Plains Water District?
>> Jim Ganulin: Well, I think the Holum Memorandum required that in order to get
the distribution system built. And I think the folks in West Plains at that
point wanted to become a part of the federal system for the reasons I mentioned
earlier, perhaps the cost of water. And they were having a problem obtaining a
contract for state water project water.
>> Tom Holyoke: On the subject of the Holum Memorandum, which I understand was
named after the Assistant Secretary of the Interior Kenneth Holum.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: So, Westlands Water District consider the Holum Memorandum to be
legally binding between Westlands and the federal government?
>> Jim Ganulin: We, it was not a formal contract in a traditional sense, but we
argued and believed and I still believe that there was a contract by necessary
implication, that there was an offer to provide certain water supply at a
certain price if the district did certain things. The district did those things
and we think therefore created and implied in fact or contract by estopple.
>> Tom Holyoke: Okay. And, as I understand it and please correct me if I'm
wrong, up until the later 1970s everyone sort of assumed that the Holum
Memorandum basically laid out an agreement between Westlands and the Bureau of
Reclamation of the Department of the Interior, but in the later 1970s, I guess
the Carter Administration no longer saw the Holum Memorandum as binding.
>> Jim Ganulin: In, starting in probably 1965 or ‘66 when the first water
delivery to Westlands commenced there were temporary contracts for water. They
were temporary for one year because the amendatory contract was still being
negotiated. This went on year after year with increasing amounts of water
delivered to the district, until you say, until the 19, probably mid to late
1970s when the Carter Administration did, did take issue with that.
>> Tom Holyoke: Is it fair to say that the Carter Administration was not that
friendly to the Westlands Water District?
>> Jim Ganulin: That, that's, you're being very kind. That's a fair
characterization.
>> Tom Holyoke: What was the nature of the problem?
>> Jim Ganulin: There were several problems. The, there was a service area
issue. The original feasibility report talked about a specific service area that
was, did not include the -- all of Westlands. In 1962, 19, yes, if my memory's
correct there was a soil classification survey and the classification survey and
all the actions that took place after that concluded that all of Westlands was
in the authorized service area. The Interior Department under Carter and Andruss
took the position that no that was not correct it was only about 400,000 acres
of the district in the service area. That was, that was one issue. Another issue
was with respect to acreage limitation and the administration's conclusion that
Westland's was not comply with the acreage limitation requirements. There was an
also, also an issue about payment for the drain. You recall I mentioned a 9E
contract with contracted for payment for the drain. And a 9D contract which
contracted for payment for the, in construction of facilities on farm and in the
district. The Carter people took the position that the drain should have to be
paid, the main drain would have to be paid for as a 9D contract as opposed to
being a water service contract.
>> Tom Holyoke: Okay. I'll come back to some of those things in a minute. Also
in the 1970, the later 1970s and, I don't know if this was something that was
pushed by the Carter Administration or by members of Congress. But we have, I
guess we'd call the Special Task Force on the San Luis unit which I understand
produced a report that was highly critical of the Westlands Water District. Do
you have the origins of this kind of this task force?
>> Jim Ganulin: Yes. The San Luis Unite Act had a specific amount authorized for
the construction of the district water distribution and drainage collection
system. That amount was reached. In order to continue constructing there had to
be an increase in that amount of authorization. The district went to then
Congressman Sisk and his Assistant Tony Coelho [assumed spelling] and said we
would like to have this amount increased. In order to get that amount increased
by some 31 million dollars Sisk and Coelho needed to deal with Congressman
George Miller, a long time critic of the district. A compromise was the increase
in the authorization but with the creation of a task force to investigate the
San Luis Unit and basically Westlands. The legislation, as I recall, set forth
who should be on the task force. Frankly, it was stacked with critics. We had
some representation on the task force but the report, as you know, came out
fairly critical.
>> Tom Holyoke: Yes, I remember reading in, I think it was the biography of the
Congressman Bernie Sisk that he felt that the entire task force was rigged
against Westlands and he had lobbied hard to have State Senator Rosanne Vuich
put on. And I, so I guess I come away with it she and a gentleman Adolf
Moskowitz [assumed spelling] had the primary responsibility for defending the
Westlands on the task force.
>> Jim Ganulin: That's correct. We, Westlands was aloud to appoint one member of
the task force. And, I don't recall who appointed Senator Vuich but they were
both on the task force and they were the two members of the task force that were
reasonably objective and not as critical as other members of the task force.
>> Tom Holyoke: Who was Adolf Moskowitz?
>> Jim Ganulin: Adolf Moskowitz, long time dear, dear friend and mentor for me
frankly, on a personal note. Renowned water attorney from Sacramento along with
Stan Chronic formed the Firm of Chronic and Moskowitz just about the time I was
getting out of law school. And they wound up with a firm preeminent within the
state. Adolf was special counsel for the Westlands in dealing with litigation in
other matters and was Westlands representative on the task force.
>> Tom Holyoke: Okay. How did Westlands water district immediately react to a
lot of the criticism coming from the Carter Administration and from Congressman
Miller? Did was there an effort to put together a political strategy to sort of
kind of fight back against what was happening?
>> Jim Ganulin: There was, yes, there was an effort but, frankly it was, it was,
probably fell on deaf ears and it was, as you know, that can be very difficult.
>> Tom Holyoke: One of the issues
concerns that happened during the
redefining where the service area
Crulit [assumed spelling] Service
you mentioned earlier, I guess one of the
Carter Administration was the re, sort of
was. And then we get into this term called the
Area, I think I'm pronouncing that right.
>> Jim Ganulin: You are. That is the service area I'm talking about it was,
Crulit's opinion, he was a solicitor also on the task force. But it was his
opinion that, that'll, opined that not all the district was entitled to water
service.
>> Tom Holyoke: And where did their definition of the service area come from?
>> Jim Ganulin: Feasibility report for the San Luis Unit which was done in the
early 1950s.
>> Tom Holyoke: Your opinion was this just a difference of opinion, was there
political motivation behind some of this?
>> Jim Ganulin: I'm biased. And I pause because I want to use my words
carefully. But, in my judgment, there was a bias.
>> Tom Holyoke: 1980 President Carter is defeated by former California Governor
Ronald Reagan. We have a new administration coming in; an administration that
knows something about California water issues or at least the president, the new
president knows something about California water issues. Did Westlands Water
District see a change in attitude from the Department of the Interior with the
coming of the Reagan Administration?
>> Jim Ganulin: We thought there'd be a change. There was a change but, but we
still had issues. We had negotiated a, an amendatory contract with the Carter
Administration for a water rate of, my recollection is about nine dollars and 50
cents as opposed to the seven dollars and 50 cents and a water supply to cover
the amount of water covered in the Holum Memorandum. Reagan was elected, had a
conservative Secretary of the Interior. We felt that, and our board felt that
well the importance of a contract would be more significant to the new
administration than it had been to the last. So, we went to Washington with
three of our board members to talk with Interior. And Interior, at that time,
said well we don't like what the Carter Administration was doing we don't agree
with all that they were doing. On the other hand, you're not paying enough for
water. And, if you don't pay cost of service for water then you're not going to
get a contract for additional water supply. As a matter of fact, we probably
will have to stop water service. That led to major litigation by the district
involving an effort to get the United States to deliver water to the district.
The -- on the eve of a hearing before the Federal District Court judge the
United States and the District settled the law suit if you will, actually what
they did is they put off an ultimate decision. They said, the district agreed to
put into a trust fund the difference between seven dollars and 50 cents and 13
dollars and 50 cents. And that trust fund was established, the money went in
there, and depending on the ultimate outcome of the litigation, that would, that
would dictate who got the excess money, go back to the district if the district
was right, go to the United States if the United States was correct.
>> Tom Holyoke: Okay. In the end, after what happened with the Carter
Administration what was happening with the Reagan Administration, did Westlands
end up paying more per acre for the water from 7.50?
>> Jim Ganulin: Yes. That, it's more complicated. As a result of the district's
lawsuit against the United States, some of the landowners within the district
intervened in the lawsuit and we would up with what is referred to as the
Barcellos [assumed spelling] case. And that case involved not only the water
supply issues we just talked about but the drainage issues. It involved the
rights of landowners within different areas of the district to receive water.
That was protracted litigation. Mr. Moskowitz and I decided that since there
were different areas of the district and with different interest we filed what
is referred to as a class action against the landowners in the four different
areas of the district. And that, the areas were dictated by the service areas,
and, and so we had four classes in the litigation. The United States was the
defendant. We had five independent represented parties in the lawsuit that dealt
with the water supply issues, drainage and so on.
>> Tom Holyoke: Yes. I see what you mean by saying it's more complicated.
>> Jim Ganulin: Yeah.
>> Tom Holyoke: As I understand, part of the trouble was rising because there
were differences in what different farmers in the district were required to pay
or the type of contracts they had or, related to the farmers who were in the
original Westland's Water District versus those in the West Plains.
>> Jim Ganulin: Okay, that, the issue there was the amount of water to be
allocated to each of the two areas, to the original Westlands area what we refer
to as area one, and the original West Plains area, area two. The merger statute
said, and I think I can quote it, that the lands within the original Westlands
water district shall have a prior right to water under any contract in existence
on the day of the merger. And that was referring to the 1963 contract. A
significant dispute arose as to what that language meant and how much of the
water would be allocated to area one and area two particularly when there's a
shortage. And that issue was a part of the Barcellos Litigation.
>> Tom Holyoke: So, farmers in the area one area had water rights senior to
those in area two?
>> Jim Ganulin: Yes. But, but, but similarly the water users in area two also
had some rights and that was, that's what caused the clash.
>> Tom Holyoke: So, at this point in time, the late 70s and into the early 80s
we have, there's some dissention within Westlands Water District between the
farmers themselves over the price to be paid and what should be done.
>> Jim Ganulin: That's correct. And, when we, when we're dealing with the
Barcellos case and the very complex issues, a couple of the parties went east
and talked to the folks at Interior. They asked Adolf and I to go along. We
opted not to because these were landowners living in a certain area and we were,
had to represent the entire district. What those folks received at Washington
was the assurance that the United States was willing to negotiate on the
contract as long as Westlands spoke with one voice. And you recall I said there
were four different classes and five independently represented parties. So, we
started down the path of trying to work out internally positions on the various
issues. And that took us about a year and a half. And then ultimately we sat
down and negotiated with the United States and wound up with a settlement.
>> Tom Holyoke: Let's focus a little bit on the interceptor drain. It seems to
me that this has always been a little bit of the Westland's Water District's
Achilles' heel, you know, the great problem that they needed to get solved and
yet it really hasn't been solved even today.
>> Jim Ganulin: The San Luis Unit Act states that before there's construction of
water distribution and facilities the United States shall either have a contract
with the State of California for a master drain along with the state or make
provisions for drainage. In the early 1960s, the state concluded that it could
not participate in the master drain. And I'm not certain why they concluded that
but that was their conclusion. The United States started making plans for a San
Luis drain, to take brackish, salty water from the district up to the Delta.
During the 60s there were two lawsuits filed by the exchange contractors, which
was a group of water districts north and west of the district saying that you
better have drainage because if you don't the brackish water's going to drain on
our land and create problems for us. In both those cases the United States, with
the district prevailed saying the statute provides there shall be provision for
drainage. There are plans to have drainage and therefore the statute's been
complied with and you can continue constructing water distribution facilities.
Thereafter, the United States did construct a drain and did construct some on
farm drainage collector facilities within the district. Some of the farmers did
connect up to those facilities and the district started to collect drainage
water and move it through the San Luis drain to what was then a holding
reservoir, Kesterson Reservoir. Ultimately, the water was going to go on to the
Delta. In 1985, some of the biologists found deformed birds at Kesterson. They
concluded it was a product, the result of selenium which is a naturally
occurring element in the soil. And that was taken up by the plants and the birds
were eating the plants and the birds were deformed. And the Interior said well
we have to stop drainage service and water service. We were able to negotiate an
agreement with the United States to have water service continued but the
district had to take care of its drainage water. And we agreed to do that. And
if we didn't do it, we would agree to plug the drains that had been constructed.
The Corcoran clay that I mentioned earlier was a problem for us because we had
some ponds, we bought 365 acres, we were going to build ponds and pond the water
and let it evaporate and so on. But, we needed an impervious layer beneath the
ponds so that we would not adversely impact ground water. When got the bids to
some 50 few 60 million dollars to build the ponds, the board, we couldn't do it.
It was just too costly. We therefore had to plug the drains and that resulted in
further litigation. Moving on, there was litigation involving United State's
obligation to provide drainage and the United States said well no we're excused
because we do not have the technical capability to provide drainage service
because Congress has precluded us from putting the drainage water in the Delta,
the state of California's done the same thing. The State of California said you
can't put it in the Monterey Bay. And so, the United States said we can't, we
can't provide drainage services. The Federal District Court, Judge Wanger
[assumed spelling] and the United Circuit Court of Appeal concluded you're not
excused United States, you have an obligation to provide drainage. So, here was
sit with no drainage service. The problem is not taking the chemicals out of the
water, we can, they can take care of selenium and whatever else is in the water.
The problem is the salt. How do you get rid of the salt? I heard of estimates
that if you drained all the land in Westlands that needed draining there would
probably be 80 boxcar loads of salt per day.
>> Tom Holyoke: Per day?
>> Jim Ganulin: Yeah. I may be off but it's a gigantic amount of salt. And folks
will say well do a contract with Wesley Salt. Well, they can't, they can't use
that much salt.
>> Tom Holyoke: Are a majority of Westlands farms in a situation where they have
to drain off the water?
>> Jim Ganulin: I'm not sure, no, it's not a majority but it's, you know, tens
of thousands of acres.
>> Tom Holyoke: Okay, sort of get back to a couple of points in there. So,
initially after the State of California decided that it could not build a master
drain for the valley the Bureau of Reclamation essentially had the
responsibility of building a drain.
>> Jim Ganulin: Correct.
>> Tom Holyoke: As I understand, they, even though they essentially accepted
this responsibility in the 1960s it wasn't until the 1970s, the mid 70s they
even started working on building a drain.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: And, why was there such a long delay when this is known to be so
crucial and required?
>> Jim Ganulin: I think the thing at that time was the water supply facility
need an importance, was more significant than the drainage need, right then and
there, right then.
>> Tom Holyoke: Okay. So, the Bureau of Reclamation simply couldn't do too many
different things?
>> Jim Ganulin: That's correct. And, there was a limit on how much money was
available.
>> Tom Holyoke: Okay, so congressional appropriations.
>> Jim Ganulin: Appropriations, that's correct.
>> Tom Holyoke: So, by the early 1980s we now have a drain that's essentially
have completed. It's reached as far as the Kesterson Reservoir; I guess it's
called the Kesterson Reserve, wildlife reserve now.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: And today the Kesterson Wildlife Reserve is simply not
functioning as a drain.
>> Jim Ganulin: That's correct there's no drainage. There is no drainage to the,
there's no drainage water put in the San Luis drain and nothing going to
Kesterson area.
>> Tom Holyoke: Okay. And the original idea was to build another canal beyond
Kesterson all the way down to the Delta down, I believe around by Antioch.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: And the reason that that has not been done is partially because
on one hand you're saying the Bureau of Reclamation is not being permitted to
build it even though on the other hand the government is saying they have to
build it.
>> Jim Ganulin: That's correct the courts have said there's an obligation to
provide drainage service. The court hasn't said what you have to do to do that,
how to provide the drainage service. But that's, that's your obligation United
States.
>> Tom Holyoke: So, across all these decades' drainages, everyone acknowledges
that drainage is essential for a lot of the farming in Westlands. We have not,
for most of this time there is not been drainage. Do you know how severe this
impact has been on Westlands Water District?
>> Jim Ganulin: I'm not, I'm not, I've been away from Westlands for about 15
years and I don't really know that. I know that there are efforts by a number of
farmers to create their own solutions. A farmer by the name of John Diener has
done a fair amount of growing salt tolerant crops and recycling drainage water
on those crops and so on. But, there's still a significant drainage problem.
>> Tom Holyoke: Okay. Is there anything else on drainage you wish to add?
>> Jim Ganulin: I think that; let's talk a little bit about drainage and water
supply. With the shortage of water as a result of the hydrologic drought as well
as, excuse me, what I refer to as the regulatory drought, Central Valley Project
Improvement Act, Endangered Species Act, Bay Delta Water Quality Standards,
there's been a significant reduction in water supply over the past several
years. In addition, there's been no drainage service. As a result of both those,
particularly the water supply, the district has fallowed a fair amount of land.
But, let me go into that in a minute. Let me think more of that and I want to
amplify more about that.
>> Tom Holyoke: Okay, yes.
>> Jim Ganulin: We were talking about drainage. Let me backtrack just a little
bit and talk a little bit about the Barcellos case, the class action to which I
referred earlier because it did involve drainage. That litigation involved a
number of issues. It was ultimately settled. The judge signed the settlement
order in December of 1986. It dealt with the water supply issue. It reaffirmed
the district's right to the 900,000-acre feet of the 1963 contract and the
200,000-acre feet of water that was provided for in the Holum Memorandum. So, we
had a water supply of 1,150,000-acre feet. It dealt with the price of that
water. And it said that the district would pay, basically the operation and
maintenance charge for the water, what it cost the United States to deliver the
water, or in area two the water, the water users would likewise pay cost of
service if the amount of water was over and above that authorized by reclamation
law and over the landholding size then there was a full cost paid for the water.
Secondly, it dealt with the service area. It ratified that the entire district
was entitled to water service. Thirdly, it dealt with drainage and basically
created a trust fund for drainage solutions, my recollection is about five
million dollars. And the district was to embark on various projects to solve the
drainage problem. There was, and the district had a sludge removal project, they
explored deep well injection of drainage water, they had a couple of other
things and they never could find a solution. So, but the trust fund was there
for that purpose. Then lastly, it dealt with the allocation of water between
areas one and two, which I referred to earlier. And the settlement basically
said until 2008, which was the date on which the 1963 contract was to expire,
the area one would have a prior right to water. Water not used in area one would
go to the area two along with the 250,000-acre feet. And they put off dealing
with the solution of water needs after 2008 that was deferred to another time.
And that ultimately was settled in further litigation.
>> Tom Holyoke: Okay, so essentially the final resolution of the Barcellos case
was resolving a lot of the major issues for Westlands Water District.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: Okay. The next topic then sort of settled with drainage then is
to move briefly into the issue of the acreage limitations.
>> Jim Ganulin: Fine.
>> Tom Holyoke: Okay. First off, this is, it's a criticism that Congressman
George Miller had brought up, and leveled against Westlands Water District, the
Carter Administration was concerned with it. What is the problem?
>> Jim Ganulin: The reclamation law which governs the deliver of water to
federal districts has a number of requirements. The law says if you own what is
referred to as excess land, which in the early days was 160 acres per individual
landowner, then you cannot get water for that land unless you agree to sign a
recordable contract, which is a contract recorded in the county at the county
level. And, under that contract, you agree to sell your land within ten years at
a price approved by the Bureau of Reclamation which does not include an
increment of value brought about by the delivery of project water to that land.
And, if you don't sell it within the ten years, the Secretary of the Interior
has the power of attorney to sell it for you. The, early on the critics said,
well, I'll go back to the, to the, to the merger and to the delivery of water to
reclamation districts or federal districts that have the reclamation law. The
critics said well all the large landowner wanted to do was to have federal water
delivered and have the ground water basin increase its supply and they could
then use ground water and they wouldn't have to sign recordable contracts. The
large landowners on the other hand did in fact sign recordable contracts. They
put tens of thousands of acres under contract in which they agreed to sell the
land within ten years. And ultimately, the entire district and all of its excess
land holdings were under contract. Then, when they started to sell, the critics
said wait a minute. You're just selling to paper famers was the expression used
by the critics. Well, they were in my, in my experience they were not paper
farms. They were legitimate farmers who were farming land and the land was in
fact broken up, the large landholdings were broken up.
>> Tom Holyoke: Okay, so, in other words Westlands Water District was in fact in
compliance with the Reclamation law.
>> Jim Ganulin: Yes, yes.
>> Tom Holyoke: Who was, who were National Land for People?
>> Jim Ganulin: National Land for People was a local organization that was very
critical of land holdings within the Westlands Water District, the large land
holdings. They were seeking changes in reclamation law which would further
constrict the delivery of water to what to what they would refer to as large
landowners.
>> Tom Holyoke: Why ultimately did this then require basically the 1982
amendments to the Reclamation Act the change in statute?
>> Jim Ganulin: In 1976 or 1977, the National Land for People filed a lawsuit
against the United States saying that reclamation law was not being properly
enforced. As a matter of fact that resulted in some regulate, proposed
regulations by the Department of Interior that would've gone far beyond what we
and most folks in federal, federally served districts felt was the law. For
example, it would've required residency on the land as a requirement. That was
based on the 1902 statute, which we felt was repealed in 1926. Those regulations
were proposed by the Carter-Andruss Administration. We all went to court and
Judger Crocker ruled that those regulations were invalid and to be allowed to
continue in some water service. That started an effort in Congress to see what
could be done about reforming the law. I think the landowners in Westlands felt
that that would be advantageous that the 160 acres which I mentioned earlier was
not an appropriate size of farm or criteria for water service. Families were
should not be entitled to 160 acre per individual because there were kids and so
on. So, it wound up being, there was an effort to seek reform by both the
critics and the landowners.
>> Tom Holyoke: And, statutory change, as I understand upped the acreage
limitation to was it 960?
>> Jim Ganulin: 960 acres per family.
>> Tom Holyoke: Per family. As I understand it after the passage of the ‘82,
amendments to reclamation law it was another five years before the Bureau of
Reclamation profligated out its new rules. When the rules come out, Congressman
George Miller, the critic of Westlands Water District referred to them as an
outrage, betrayal. Do you remember what his problem was with the new rules?
>> Jim Ganulin: Well, I think his problem was that he didn't, he didn't like the
fact that there was an increase in the acreage. He didn't like the provisions
with respect to trusts. He was he felt that Westlands would, in his judgment,
continue to avoid the law. I mean it's been a long-standing point of criticism
for him, criticizing the district and its operations.
>> Tom Holyoke: Just one last question on the actual movement of the
legislation. Did you have a great deal of success working through valley
lawmakers in pushing this?
>> Jim Ganulin: Yes. The landowners within the district formed a group called
California Westside Farmers. Since that, the acreage limitation issue was not
technically a district issue it was a landowner issue because you were dealing
with the impact of reclamation on the individual farmer's operation, landowner's
operation. California Westside Farmers took a lead rule in seeking reform to the
reclamation law. They joined with organizations from the other 17 western states
subject to that law. And that, that resulted in the 1982 act. And the valley
congressmen were very helpful in that effort.
>> Tom Holyoke: Anything else you want to add on to the critics limitations?
>> Jim Ganulin: No, I would say that the, you mentioned the regulations; I mean
the regulations did come out. The landowners throughout the district did comport
with those regulations. The land holdings were further broken up. Those folks
who were receiving water for more than 960 acres of farm ground were paying full
cost for that water as required by the law. The anti speculation revision the
laws were enforced. I think the law was successful.
>> Tom Holyoke: I guess moving into talking about an issue that may come back to
us in the near future and that is the peripheral canal. The original peripheral
canal proposal of the late 1970s which ultimately then failed on the ballot, I
think, in 1982. Was Westlands Water district a prime supporter of the original
peripheral canal proposal?
>> Jim Ganulin: We were a supporter but I don't think we were heavily involved
in that effort. Our intentions were really directed at the federal level and
dealing with reclamation law and those issues, getting appropriations for
constructing the system.
>> Tom Holyoke: Would a peripheral canal at that time, was it seen as something
that would've been beneficial to Westlands.
>> Jim Ganulin: Absolutely, it was it was beneficial we just don't, we did not
take a major role in that effort though.
>> Tom Holyoke: Okay. So in the later 1980s a lot of the, many of the legal
problems facing Westlands Water District have now been resolved. Is there
actually any change in really the attitude of the Reagan Administration by the
late 1980s?
>> Jim Ganulin: No, not significantly. Once we resolved the Barcellos case we,
our disputes at the federal level were far less.
>> Tom Holyoke: Would you tell me a little bit about the 1992 Central Valley
Project Improvement Act?
>> Jim Ganulin: The primary movers of that legislation were Senator Bill Bradley
from New Jersey and Congressman George Miller. And they concluded that the
reclamation law, particularly related to the Central Valley Project needed to
be, in their judgment, improved. And they started down the road with legislation
which would've done just that, would've specifically allocated water for
environmental purposes among other things, dealt with water transfers, dealt
with provisions concerning amendatory contracts and the like. The legislation
was always a problem for California and the federal contractors. There was a
significant effort to work with Miller and Bradley to resolve some of the
difference of opinion, although there was concern that we couldn't we wouldn't
do that because of the bias which in our judgment they had. We had, when it got
toward the legislation was almost ready to be finalized, there was a question of
whether or not, excuse me, we should negotiate with Miller and Bradley in order
to litigate some of the adverse impacts that we thought the legislation would
bring upon us. At the 11th hour in a five-hour conference call with, probably,
30 different people on the phone, it was concluded, at the urging of some of our
principles, that we should negotiate, that President Bush would veto the
measure. Some of us had concerns about that. Well, that would in fact happen, I
guess we were correct. It didn't happen. The bill was part of a larger bill that
covered other states and things which they wanted and not withstanding efforts
to talk. Our people did go talk to; I guess Jim Baker was Chief of Staff at that
time. And ultimately Bush did not Veto the bill. So, the Central Valley Project
Improvement Act became law in 1992.
>> Tom Holyoke: What were the concerns that Senator Bradley and Congressman
Miller had that led to this legislation?
>> Jim Ganulin: Too much water being used by, by the Central Valley Project
water users and not enough water for the environment. I think that was, you
know, the primary thrust of the legislation.
>> Tom Holyoke: This is a, I understand this is one of the first times that
environmental components were added into reclamation law.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: After 1992, you were not at Westlands much longer than that
time.
>> Jim Ganulin: That's correct. I retired in 1994.
>> Tom Holyoke: And is that when you went on to become of counsel at Baker,
Manock and Jensen?
>> Jim Ganulin: That's correct, that's correct.
>> Tom Holyoke: Okay. In that case starting to go into the rapid phase here you
spent a life in California water law and California water politics. In your
opinion what are some of the big changes you've seen if there have been big
changes in and not just law and policy, but even public attitude?
>> Jim Ganulin: Well, let's go back for a moment to the CVPI, Central Valley
Project Improvement Act. That was, in my judgment, one component of what we've
referred to as a regulatory drought, cause of a regulatory drought. There was
some 800,000 acre feet of Central Valley Project water yield here marked for the
environment. The endangered species act that we've been reading about in recent
years became a significant factor in terms of the amount of water exported from
the Delta. The Bay Delta water quality standards required by the Clean Water Act
also restricted the amount of water that could be exported. So, the whole
environment, excuse me, both for Westlands and other exporters like Metropolitan
Water District of Southern California, or Santa Clara were adversely impacted by
the substantial decrease in the amount of water from the Delta. This is probably
the most significant issue for, I think the state, and its water, the water
issues for the state is the substantial decrease in the amount of water which
can be exported from the Delta under present regulations. I think that there is
a lack of recognition of other causes of problems within the Delta.
>> Tom Holyoke: Pollution?
>> Jim Ganulin: Pollution is one. Non-native species that come in, up stream
diversions, and heretofore those have not been taken into account in terms of
figuring out how to solve the Delta problems. The environment for solving that
problem is really, it's hard to fathom it's hard for me to understand but it's
there. There's the two parties are at opposite ends of the spectrum at the state
level, they argue over there shall be no storage, everything, all the problems
can be solved by water conservation, water transfers on the one hand. On the
other hand there needs to be, needs to be new storage, there needs to be
conveyance to the Delta and the two parties are at locked heads over those
issues. Very significant, I think that California's residents don't realize the
significance of those issues because they see it impacting agriculture in the
Center Valley. They're not yet seeing it in the big cities. And, once they see
it in the big cities, it's going to have, perhaps a different environment in
which to solve the problem. I think that if we had an earthquake and there were
salt at the pumps the two heads the federal and state pumps and you couldn't
deliver the water to Southern California we'd get a peripheral canal a lot
quicker than we would now. I've heard fish and game employees say one on one
that the peripheral canal would not be an adverse impact on the Delta it would
be beneficial. But in the crowded room with a lot of folks there and the
rhetoric fairly strong, you won't hear him or her say that.
>> Tom Holyoke: Is this, is this political fighting that you see in Sacramento
maybe even to some extent in Washington DC, like California can no longer seem
to create the great water projects we had in the past, because we've had
enormous projects that have been done in this valley, the Central Valley Project
the State Water Project. These were projects on enormous scales some of the
biggest in the United States. And the will to do those projects from the 1940s
50s and 60s no longer seems to be there.
>> Jim Ganulin: Well, and following up on that where would we be if we did not
have the 1960 legislation of both the federal and state level which created
those projects? I mean if we didn't have the State Water Project where would we
be now? I mean the former, Pat Brown Senior, Governor Pat Brown Senior had the
foresight to do that. We don't see that now. We just don't see the political
climate to get that done now. And that's sad.
>> Tom Holyoke: Is there any sense that, given the problems, the drainage now
that the issues with the Endangered Species Act, that Westlands Water District
and, well the farms out there are living on borrowed time?
>> Jim Ganulin: Over the years when I've told stories to my wife about there's
going to be a drought, there's a water supply shortage, she would, has always
been very sympathetic but she would always say but your farmers are so
innovative they will find a way. I don't think you can say that now. Had to
fallow tens of thousands of acres in Westlands, the water supply is at best
insecure and unreliable, we see a ten percent supply in 2008-2009. Who knows
what its going to be next year? The efforts to resolve the issue and seek
solutions even on a temporary interim basis run into all kinds of roadblocks.
It's very difficult. I don't know what, honestly don't know what the future
holds but it's a, it's very concerning.
>> Tom Holyoke: Okay, I'm at the end of my questions are there any final things
you would like to add?
>> Jim Ganulin: Yeah, it's been a fascinating 40 plus years, been a lot of
changes, a lot of beneficial changes, but, but we're at a tough time now. And
it's concerning. And there's all kinds of efforts to try and resolve problems,
and I just wish people would sit down at the table and really resolve, work to
resolve them as opposed to being doctrinaire in their approach.
==== Transcribed by Automatic Sync Technologies ====
personal history.
>> Jim Ganulin: Okay.
>> Tom Holyoke: Where were you born?
>> Jim Ganulin: Born in Los Angeles California and lived and grew up there, went
to college at the University of Colorado for two years then UCLA for my last two
years, then went to law school in Berkeley Boalt Hall and graduated from there
in 1959. I might add, from an antidotal standpoint, never took water law, never
took state and local government law. When I got my first job, the guy I went to
work for in the Attorney General's office said I'm not going to give you any
water cases because my father in law at the time was a water law attorney and I
didn't get any cases in water law. And then wound up in Fresno going to work for
Westland's Water District.
>> Tom Holyoke: So, you came to the valley initially to work for Westlands?
>> Jim Ganulin: That's correct.
>> Tom Holyoke: And you haven't really done a lot with water law or much at all
with water law before.
>> Jim Ganulin: Had done nothing with water law or state and local government or
public agency law. And my entire career has been involved with those in those
two fields.
>> Tom Holyoke: So, when you came to Westland's water district did you have to
take a crash course in water laws and understand water laws?
>> Jim Ganulin: No, I think I kind of learned it on the job, picked it up as the
years passed.
>> Tom Holyoke: Okay, what year did you come to work for Westlands?
>> Jim Ganulin: I started in January of 1966.
>> Tom Holyoke: Okay, did you start off as General Counselor?
>> Jim Ganulin: No. I started out as assistant general counsel. And I did that
from 1966 until 1977 when I became general counsel for the district.
>> Tom Holyoke: Who was general counsel when you first came there?
>> Jim Ganulin: Ralph Brody.
>> Tom Holyoke: Just kind of for some clarification, what is a water district?
>> Jim Ganulin: There are a number of different kinds of water districts in
California. There are creative, pursuant to statutory authorization. Irrigation
districts are basically resident voting districts, people that are providing
irrigation water. California Water Districts, of which Westlands is one, is a
landowner voting district and that was created because the landowners were
responsible for the assessments to pay for facilities. And, the conclusion was
it was unfair to have just residents voting because there are so few residents
in districts like Westlands. So, the landowners have one vote for every dollar
of assessed evaluation.
>> Tom Holyoke: In that kind of voting system is that system that essentially
gives larger landowners a larger, say than in the governance of the district.
>> Jim Ganulin: That's, that's correct. I might add that the issue has gone
before the California supreme, pardon me, the United States Supreme Court twice
and the United States Supreme Court has held that that is a valid way of voting.
>> Tom Holyoke: In terms of size, Westlands, I understand, is one of the largest
in California. Is it the largest in California Water Districts?
>> Jim Ganulin: I think Imperial Irrigation District, perhaps, is larger. But
Westlands is the largest irrigated district in the state.
>> Tom Holyoke: Okay. When you came to Westlands what kind of crops, were they
growing? Do you happen to remember what kind of crops were farmed especially?
>> Jim Ganulin: Perhaps five or six crops, cotton, a lot of melons, tomatoes,
alfalfa, sugar beets, were the main crops of that point at that time.
>> Tom Holyoke: Okay. Could you explain a little bit on how water districts
contract for water with the Federal Government Bureau of Reclamation or in some
cases the state?
>> Jim Ganulin: The district, whether it's a Central Valley Project contractor
or a state water contractor, contracts with the entity, the Department of the
Interior on the one hand or the State of California on the other for a water
supply. That water supply is provided by in the federal system of the Central
Valley project. The district pays the United States per acre-foot for that water
and they're subject to various provisions of the contract regulating the use of
that water and the division of federal law with respect to the use of that
water.
>> Tom Holyoke: Okay, so basically the district then acts as a middleman. Is it
the district that purchases the water from the Department of the Interior in the
Case of Westlands water district and then resells that to the farmers?
>> Jim Ganulin: That's correct. The district does purchase the water from the
United States, it in turn delivers the water to its constituents its landowners
and water users. And they pay a water toll charge for the water. And then, in
Westlands case, they also pay, they have assessments to pay for facilities built
by the district and for certain services provided by the district.
>> Tom Holyoke: Okay. Do you know if there's any particular reason why Westlands
chose to make its contracts with the Federal Government with the Department of
the Interior rather than the state water project?
>> Jim Ganulin: Well, I think, I'm not certain of this, but I, my sense is they
probably thought the water would be cheaper because there's a, there is no
interest, interest component in connection with that water under federal
reclamation law. And while there were regulations that the landowners had to
comply with in order to get delivery of the water, acreage [inaudible]
limitations, they felt, my sense is they felt that was a fair price to pay for a
cheaper water.
>> Tom Holyoke: Has it actually turned out to be cheaper water?
>> Jim Ganulin: With the advent of the Reclamation Reform Act and the Central
Valley Project Improvement Act, I'm not so certain it has been cheaper.
>> Tom Holyoke: Okay. The time you came to Westlands Water District the district
was a relatively new entity at the time?
>> Jim Ganulin: The district was formed in 1952 for the expressed purpose of
seeking a supplemental water supply from the United States. The San Luis Unit
authorizing legislation was passed in 1960. And that authorized the construction
of the San Luis Unit of the Center Valley Project. It in turn authorized the
delivery of the construction of major project facilities such as the San Luis
Reservoir and the California Aqueduct, and then delivery of water to the
district itself.
>> Tom Holyoke: And the San Luis Reservoir was really essential for creating a
large water district and creating large-scale agriculture on the west side of
the San Joaquin Valley.
>> Jim Ganulin: That's correct. And the, the other interesting thing about the
San Luis Reservoir is that it was a part of a joint federal-state effort. In
1960, the state passed the Burns-Porter Bond Act to create a state water system.
The San Lois Unit Act authorized the cooperation of the state and federal
government in building the California Aqueduct going all the way to Southern
California and San Luis Reservoir as a joint federal state facility.
>> Tom Holyoke: Now, in the way that the Westlands water district or probably
any water district contracts for water there's we're really talking about two
separate contracts. There's a contract for the water. And isn't there also a
different contract for building the facilities that ultimately requires the
district to repay the government for the building of the San Luis Units and the
conveyance?
>> Jim Ganulin: That's correct, what is referred to as a section 9E contract
which is a section in the reclamation law, authorizes what we call a water
service contract. And that contract authorizes the delivery of water and in
Westland's case the provision of drainage service for a certain amount of per
acre-foot charge. And that charge is to pay for the water as well as the
construction of main project facilities. I mentioned the San Luis Reservoir. I
mentioned the California Aqueduct, the San Luis Canal; those facilities are paid
for out of the revenues from that water service contract. The second kind of
contract is a section 9D contract, also part of the reclamation law, and that
contract authorizes the construction of individual facilities for the particular
district, in the Westlands case that authorized the construction of water
distribution facilities within the district itself to deliver the water from the
canal to the farmer and then as well as drainage facilities to collect brackish,
salty water from the on farm drains.
>> Tom Holyoke: Okay, when you came to work at Westlands or even at least in the
late 1960s do you remember at all how much water they were actually contracting
for or essentially how much water they were purchasing the rights to?
>> Jim Ganulin: The, Westlands 1963 water service contract provided for the
delivery of somewhere between 783,000 acre feet of water per year up to 900,000
acre feet of water per year depending on the ground water situation. And there
was a formula within the contract that determined how much water was delivered.
And ultimately, the ground water situation was such that it wound up being a
900,000-acre foot annual supply.
>> Tom Holyoke: And what was the price of the water per acre-foot?
>> Jim Ganulin: The price in that contract was seven dollars and 50 cents an
acre-foot for water service and 50 cents an acre foot for drainage. And I might
add, my sense is that those, that kind of contract was not unusual, that that
most of the contracts, contracts for water on the East side also provided for a
fixed price for the water.
>> Tom Holyoke: Okay, so, individual farmers were paying essentially eight
dollars per acre foot, 7.50 for the water service and 50 cents for prepayment of
the ->> Jim Ganulin: That's correct plus the cost of the districts operating and
maintaining the system and delivering the water to the farmer.
>> Tom Holyoke: Okay. You'd mentioned the drainage canal, could you just explain
a little bit why drainage is such a huge issue in the Westlands?
>> Jim Ganulin: Underlying a significant portion of the district is a Corcoran
clay layer in various depths but that's an impervious layer of clay. And, a
farmer irrigates the land, a part of the water is evap -- transperated, some is
taken up by the plant and some water is leached into the ground water. It goes
down in the soil. It gets that in that clay layer and it cannot go any further.
That water, which is brackish, very salty, builds up on top of the clay layer,
it winds up in the root zone and that precludes the ability to grow crops. The
drainage system was to take care of that brackish water, to take it off the
farm, move it to a drainage collector system, and ultimately into a drain which
was to go ultimately to the bay, to the bay area and empty into the Delta.
>> Tom Holyoke: We'll come back to drainage in just a moment.
>> Jim Ganulin: Okay.
>> Tom Holyoke: Is, as I read some of the history in Westlands. I understand
there was some, at least appears to have been some misunderstanding between
farmers in the district, and the Federal Government as to whether the contracts
originally signed in the 1960s were long term contracts or temporary contracts.
Or maybe that was a misunderstanding that was, well that the Federal Government
later on came to have a misunderstanding about that.
>> Jim Ganulin: The 1963 water service contract was for 40 years. In 1964, the
district negotiated a contract for the construction of the distribution and
drainage collector system. When that contract went before congress as the law
required, that it lay before congress for a period of, as I recall, 90 days,
there were hearings, I think, certainly on the senate side and perhaps in the
house side. And at those hearings, some of the critics complained about the
contract. The Secretary of the Interior decided to condition approval of that
contract upon a number of things. And those things were set forth in what we
referred to as the Holum Memorandum. The Holum Memorandum said that the
conditions preceding to the signing of that contract were first of all merger of
the Westlands law district with the West Plains Water Storage District which was
a district of about 200,000 acres immediately to the west of Westlands, that the
district would take over the operations and maintenance of the Coalinga Canal
System which is an offshoot of the San Luis Canal. And then in the return for
that the water for the West Plains area, the additional water supply was to be
allocated to the district. The district agreed to the Holum Memorandum. The
district wound up before the state legislature. The two districts were merged
and the contract was signed. That resulted in a need for a formal contract for
the additional amount of water. There were a number of temporary contracts over
the years while the amendatory contract was being negotiated. And to this day, I
don't know that the amendatory contract has ever been signed, for reasons we can
get into.
>> Tom Holyoke: You mentioned that there was criticism of the contract before
congress. What was the nature of the criticism?
>> Jim Ganulin: Well, there always was criticism of Westlands because of the
large land holdings within the district. It goes back to the critics concern
that acreage limitation and its requirements would not be satisfied. That law
requires that for excess land owners, somebody owning more than, at that time,
160 acres, to get one they would have to agree to sell the land in excess of 160
acres at an approved price established by the Bureau of Reclamation. And if they
didn't do it within ten years then the Secretary of Interior had a proprietary
to sell it for the landowner. The critics said, first of all, the large
landowners will not sign recordable contracts, and secondly even if they sign
them they won't sell the land. History proves that that was incorrect because
they signed recordable contracts and the land was ultimately broken up.
>> Tom Holyoke: What does that term mean recordable contract?
>> Jim Ganulin: It's a contract that's recorded in the county records. So, it's
basically like lien, like a lien for a first deed of trust on a house. It's
appears there as a matter of record.
>> Tom Holyoke: Okay. I know this is, probably again, a couple of years before
you came to Westlands. But, is there a particular reason that Westlands decided
to merge with the West Plains Water District?
>> Jim Ganulin: Well, I think the Holum Memorandum required that in order to get
the distribution system built. And I think the folks in West Plains at that
point wanted to become a part of the federal system for the reasons I mentioned
earlier, perhaps the cost of water. And they were having a problem obtaining a
contract for state water project water.
>> Tom Holyoke: On the subject of the Holum Memorandum, which I understand was
named after the Assistant Secretary of the Interior Kenneth Holum.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: So, Westlands Water District consider the Holum Memorandum to be
legally binding between Westlands and the federal government?
>> Jim Ganulin: We, it was not a formal contract in a traditional sense, but we
argued and believed and I still believe that there was a contract by necessary
implication, that there was an offer to provide certain water supply at a
certain price if the district did certain things. The district did those things
and we think therefore created and implied in fact or contract by estopple.
>> Tom Holyoke: Okay. And, as I understand it and please correct me if I'm
wrong, up until the later 1970s everyone sort of assumed that the Holum
Memorandum basically laid out an agreement between Westlands and the Bureau of
Reclamation of the Department of the Interior, but in the later 1970s, I guess
the Carter Administration no longer saw the Holum Memorandum as binding.
>> Jim Ganulin: In, starting in probably 1965 or ‘66 when the first water
delivery to Westlands commenced there were temporary contracts for water. They
were temporary for one year because the amendatory contract was still being
negotiated. This went on year after year with increasing amounts of water
delivered to the district, until you say, until the 19, probably mid to late
1970s when the Carter Administration did, did take issue with that.
>> Tom Holyoke: Is it fair to say that the Carter Administration was not that
friendly to the Westlands Water District?
>> Jim Ganulin: That, that's, you're being very kind. That's a fair
characterization.
>> Tom Holyoke: What was the nature of the problem?
>> Jim Ganulin: There were several problems. The, there was a service area
issue. The original feasibility report talked about a specific service area that
was, did not include the -- all of Westlands. In 1962, 19, yes, if my memory's
correct there was a soil classification survey and the classification survey and
all the actions that took place after that concluded that all of Westlands was
in the authorized service area. The Interior Department under Carter and Andruss
took the position that no that was not correct it was only about 400,000 acres
of the district in the service area. That was, that was one issue. Another issue
was with respect to acreage limitation and the administration's conclusion that
Westland's was not comply with the acreage limitation requirements. There was an
also, also an issue about payment for the drain. You recall I mentioned a 9E
contract with contracted for payment for the drain. And a 9D contract which
contracted for payment for the, in construction of facilities on farm and in the
district. The Carter people took the position that the drain should have to be
paid, the main drain would have to be paid for as a 9D contract as opposed to
being a water service contract.
>> Tom Holyoke: Okay. I'll come back to some of those things in a minute. Also
in the 1970, the later 1970s and, I don't know if this was something that was
pushed by the Carter Administration or by members of Congress. But we have, I
guess we'd call the Special Task Force on the San Luis unit which I understand
produced a report that was highly critical of the Westlands Water District. Do
you have the origins of this kind of this task force?
>> Jim Ganulin: Yes. The San Luis Unite Act had a specific amount authorized for
the construction of the district water distribution and drainage collection
system. That amount was reached. In order to continue constructing there had to
be an increase in that amount of authorization. The district went to then
Congressman Sisk and his Assistant Tony Coelho [assumed spelling] and said we
would like to have this amount increased. In order to get that amount increased
by some 31 million dollars Sisk and Coelho needed to deal with Congressman
George Miller, a long time critic of the district. A compromise was the increase
in the authorization but with the creation of a task force to investigate the
San Luis Unit and basically Westlands. The legislation, as I recall, set forth
who should be on the task force. Frankly, it was stacked with critics. We had
some representation on the task force but the report, as you know, came out
fairly critical.
>> Tom Holyoke: Yes, I remember reading in, I think it was the biography of the
Congressman Bernie Sisk that he felt that the entire task force was rigged
against Westlands and he had lobbied hard to have State Senator Rosanne Vuich
put on. And I, so I guess I come away with it she and a gentleman Adolf
Moskowitz [assumed spelling] had the primary responsibility for defending the
Westlands on the task force.
>> Jim Ganulin: That's correct. We, Westlands was aloud to appoint one member of
the task force. And, I don't recall who appointed Senator Vuich but they were
both on the task force and they were the two members of the task force that were
reasonably objective and not as critical as other members of the task force.
>> Tom Holyoke: Who was Adolf Moskowitz?
>> Jim Ganulin: Adolf Moskowitz, long time dear, dear friend and mentor for me
frankly, on a personal note. Renowned water attorney from Sacramento along with
Stan Chronic formed the Firm of Chronic and Moskowitz just about the time I was
getting out of law school. And they wound up with a firm preeminent within the
state. Adolf was special counsel for the Westlands in dealing with litigation in
other matters and was Westlands representative on the task force.
>> Tom Holyoke: Okay. How did Westlands water district immediately react to a
lot of the criticism coming from the Carter Administration and from Congressman
Miller? Did was there an effort to put together a political strategy to sort of
kind of fight back against what was happening?
>> Jim Ganulin: There was, yes, there was an effort but, frankly it was, it was,
probably fell on deaf ears and it was, as you know, that can be very difficult.
>> Tom Holyoke: One of the issues
concerns that happened during the
redefining where the service area
Crulit [assumed spelling] Service
you mentioned earlier, I guess one of the
Carter Administration was the re, sort of
was. And then we get into this term called the
Area, I think I'm pronouncing that right.
>> Jim Ganulin: You are. That is the service area I'm talking about it was,
Crulit's opinion, he was a solicitor also on the task force. But it was his
opinion that, that'll, opined that not all the district was entitled to water
service.
>> Tom Holyoke: And where did their definition of the service area come from?
>> Jim Ganulin: Feasibility report for the San Luis Unit which was done in the
early 1950s.
>> Tom Holyoke: Your opinion was this just a difference of opinion, was there
political motivation behind some of this?
>> Jim Ganulin: I'm biased. And I pause because I want to use my words
carefully. But, in my judgment, there was a bias.
>> Tom Holyoke: 1980 President Carter is defeated by former California Governor
Ronald Reagan. We have a new administration coming in; an administration that
knows something about California water issues or at least the president, the new
president knows something about California water issues. Did Westlands Water
District see a change in attitude from the Department of the Interior with the
coming of the Reagan Administration?
>> Jim Ganulin: We thought there'd be a change. There was a change but, but we
still had issues. We had negotiated a, an amendatory contract with the Carter
Administration for a water rate of, my recollection is about nine dollars and 50
cents as opposed to the seven dollars and 50 cents and a water supply to cover
the amount of water covered in the Holum Memorandum. Reagan was elected, had a
conservative Secretary of the Interior. We felt that, and our board felt that
well the importance of a contract would be more significant to the new
administration than it had been to the last. So, we went to Washington with
three of our board members to talk with Interior. And Interior, at that time,
said well we don't like what the Carter Administration was doing we don't agree
with all that they were doing. On the other hand, you're not paying enough for
water. And, if you don't pay cost of service for water then you're not going to
get a contract for additional water supply. As a matter of fact, we probably
will have to stop water service. That led to major litigation by the district
involving an effort to get the United States to deliver water to the district.
The -- on the eve of a hearing before the Federal District Court judge the
United States and the District settled the law suit if you will, actually what
they did is they put off an ultimate decision. They said, the district agreed to
put into a trust fund the difference between seven dollars and 50 cents and 13
dollars and 50 cents. And that trust fund was established, the money went in
there, and depending on the ultimate outcome of the litigation, that would, that
would dictate who got the excess money, go back to the district if the district
was right, go to the United States if the United States was correct.
>> Tom Holyoke: Okay. In the end, after what happened with the Carter
Administration what was happening with the Reagan Administration, did Westlands
end up paying more per acre for the water from 7.50?
>> Jim Ganulin: Yes. That, it's more complicated. As a result of the district's
lawsuit against the United States, some of the landowners within the district
intervened in the lawsuit and we would up with what is referred to as the
Barcellos [assumed spelling] case. And that case involved not only the water
supply issues we just talked about but the drainage issues. It involved the
rights of landowners within different areas of the district to receive water.
That was protracted litigation. Mr. Moskowitz and I decided that since there
were different areas of the district and with different interest we filed what
is referred to as a class action against the landowners in the four different
areas of the district. And that, the areas were dictated by the service areas,
and, and so we had four classes in the litigation. The United States was the
defendant. We had five independent represented parties in the lawsuit that dealt
with the water supply issues, drainage and so on.
>> Tom Holyoke: Yes. I see what you mean by saying it's more complicated.
>> Jim Ganulin: Yeah.
>> Tom Holyoke: As I understand, part of the trouble was rising because there
were differences in what different farmers in the district were required to pay
or the type of contracts they had or, related to the farmers who were in the
original Westland's Water District versus those in the West Plains.
>> Jim Ganulin: Okay, that, the issue there was the amount of water to be
allocated to each of the two areas, to the original Westlands area what we refer
to as area one, and the original West Plains area, area two. The merger statute
said, and I think I can quote it, that the lands within the original Westlands
water district shall have a prior right to water under any contract in existence
on the day of the merger. And that was referring to the 1963 contract. A
significant dispute arose as to what that language meant and how much of the
water would be allocated to area one and area two particularly when there's a
shortage. And that issue was a part of the Barcellos Litigation.
>> Tom Holyoke: So, farmers in the area one area had water rights senior to
those in area two?
>> Jim Ganulin: Yes. But, but, but similarly the water users in area two also
had some rights and that was, that's what caused the clash.
>> Tom Holyoke: So, at this point in time, the late 70s and into the early 80s
we have, there's some dissention within Westlands Water District between the
farmers themselves over the price to be paid and what should be done.
>> Jim Ganulin: That's correct. And, when we, when we're dealing with the
Barcellos case and the very complex issues, a couple of the parties went east
and talked to the folks at Interior. They asked Adolf and I to go along. We
opted not to because these were landowners living in a certain area and we were,
had to represent the entire district. What those folks received at Washington
was the assurance that the United States was willing to negotiate on the
contract as long as Westlands spoke with one voice. And you recall I said there
were four different classes and five independently represented parties. So, we
started down the path of trying to work out internally positions on the various
issues. And that took us about a year and a half. And then ultimately we sat
down and negotiated with the United States and wound up with a settlement.
>> Tom Holyoke: Let's focus a little bit on the interceptor drain. It seems to
me that this has always been a little bit of the Westland's Water District's
Achilles' heel, you know, the great problem that they needed to get solved and
yet it really hasn't been solved even today.
>> Jim Ganulin: The San Luis Unit Act states that before there's construction of
water distribution and facilities the United States shall either have a contract
with the State of California for a master drain along with the state or make
provisions for drainage. In the early 1960s, the state concluded that it could
not participate in the master drain. And I'm not certain why they concluded that
but that was their conclusion. The United States started making plans for a San
Luis drain, to take brackish, salty water from the district up to the Delta.
During the 60s there were two lawsuits filed by the exchange contractors, which
was a group of water districts north and west of the district saying that you
better have drainage because if you don't the brackish water's going to drain on
our land and create problems for us. In both those cases the United States, with
the district prevailed saying the statute provides there shall be provision for
drainage. There are plans to have drainage and therefore the statute's been
complied with and you can continue constructing water distribution facilities.
Thereafter, the United States did construct a drain and did construct some on
farm drainage collector facilities within the district. Some of the farmers did
connect up to those facilities and the district started to collect drainage
water and move it through the San Luis drain to what was then a holding
reservoir, Kesterson Reservoir. Ultimately, the water was going to go on to the
Delta. In 1985, some of the biologists found deformed birds at Kesterson. They
concluded it was a product, the result of selenium which is a naturally
occurring element in the soil. And that was taken up by the plants and the birds
were eating the plants and the birds were deformed. And the Interior said well
we have to stop drainage service and water service. We were able to negotiate an
agreement with the United States to have water service continued but the
district had to take care of its drainage water. And we agreed to do that. And
if we didn't do it, we would agree to plug the drains that had been constructed.
The Corcoran clay that I mentioned earlier was a problem for us because we had
some ponds, we bought 365 acres, we were going to build ponds and pond the water
and let it evaporate and so on. But, we needed an impervious layer beneath the
ponds so that we would not adversely impact ground water. When got the bids to
some 50 few 60 million dollars to build the ponds, the board, we couldn't do it.
It was just too costly. We therefore had to plug the drains and that resulted in
further litigation. Moving on, there was litigation involving United State's
obligation to provide drainage and the United States said well no we're excused
because we do not have the technical capability to provide drainage service
because Congress has precluded us from putting the drainage water in the Delta,
the state of California's done the same thing. The State of California said you
can't put it in the Monterey Bay. And so, the United States said we can't, we
can't provide drainage services. The Federal District Court, Judge Wanger
[assumed spelling] and the United Circuit Court of Appeal concluded you're not
excused United States, you have an obligation to provide drainage. So, here was
sit with no drainage service. The problem is not taking the chemicals out of the
water, we can, they can take care of selenium and whatever else is in the water.
The problem is the salt. How do you get rid of the salt? I heard of estimates
that if you drained all the land in Westlands that needed draining there would
probably be 80 boxcar loads of salt per day.
>> Tom Holyoke: Per day?
>> Jim Ganulin: Yeah. I may be off but it's a gigantic amount of salt. And folks
will say well do a contract with Wesley Salt. Well, they can't, they can't use
that much salt.
>> Tom Holyoke: Are a majority of Westlands farms in a situation where they have
to drain off the water?
>> Jim Ganulin: I'm not sure, no, it's not a majority but it's, you know, tens
of thousands of acres.
>> Tom Holyoke: Okay, sort of get back to a couple of points in there. So,
initially after the State of California decided that it could not build a master
drain for the valley the Bureau of Reclamation essentially had the
responsibility of building a drain.
>> Jim Ganulin: Correct.
>> Tom Holyoke: As I understand, they, even though they essentially accepted
this responsibility in the 1960s it wasn't until the 1970s, the mid 70s they
even started working on building a drain.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: And, why was there such a long delay when this is known to be so
crucial and required?
>> Jim Ganulin: I think the thing at that time was the water supply facility
need an importance, was more significant than the drainage need, right then and
there, right then.
>> Tom Holyoke: Okay. So, the Bureau of Reclamation simply couldn't do too many
different things?
>> Jim Ganulin: That's correct. And, there was a limit on how much money was
available.
>> Tom Holyoke: Okay, so congressional appropriations.
>> Jim Ganulin: Appropriations, that's correct.
>> Tom Holyoke: So, by the early 1980s we now have a drain that's essentially
have completed. It's reached as far as the Kesterson Reservoir; I guess it's
called the Kesterson Reserve, wildlife reserve now.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: And today the Kesterson Wildlife Reserve is simply not
functioning as a drain.
>> Jim Ganulin: That's correct there's no drainage. There is no drainage to the,
there's no drainage water put in the San Luis drain and nothing going to
Kesterson area.
>> Tom Holyoke: Okay. And the original idea was to build another canal beyond
Kesterson all the way down to the Delta down, I believe around by Antioch.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: And the reason that that has not been done is partially because
on one hand you're saying the Bureau of Reclamation is not being permitted to
build it even though on the other hand the government is saying they have to
build it.
>> Jim Ganulin: That's correct the courts have said there's an obligation to
provide drainage service. The court hasn't said what you have to do to do that,
how to provide the drainage service. But that's, that's your obligation United
States.
>> Tom Holyoke: So, across all these decades' drainages, everyone acknowledges
that drainage is essential for a lot of the farming in Westlands. We have not,
for most of this time there is not been drainage. Do you know how severe this
impact has been on Westlands Water District?
>> Jim Ganulin: I'm not, I'm not, I've been away from Westlands for about 15
years and I don't really know that. I know that there are efforts by a number of
farmers to create their own solutions. A farmer by the name of John Diener has
done a fair amount of growing salt tolerant crops and recycling drainage water
on those crops and so on. But, there's still a significant drainage problem.
>> Tom Holyoke: Okay. Is there anything else on drainage you wish to add?
>> Jim Ganulin: I think that; let's talk a little bit about drainage and water
supply. With the shortage of water as a result of the hydrologic drought as well
as, excuse me, what I refer to as the regulatory drought, Central Valley Project
Improvement Act, Endangered Species Act, Bay Delta Water Quality Standards,
there's been a significant reduction in water supply over the past several
years. In addition, there's been no drainage service. As a result of both those,
particularly the water supply, the district has fallowed a fair amount of land.
But, let me go into that in a minute. Let me think more of that and I want to
amplify more about that.
>> Tom Holyoke: Okay, yes.
>> Jim Ganulin: We were talking about drainage. Let me backtrack just a little
bit and talk a little bit about the Barcellos case, the class action to which I
referred earlier because it did involve drainage. That litigation involved a
number of issues. It was ultimately settled. The judge signed the settlement
order in December of 1986. It dealt with the water supply issue. It reaffirmed
the district's right to the 900,000-acre feet of the 1963 contract and the
200,000-acre feet of water that was provided for in the Holum Memorandum. So, we
had a water supply of 1,150,000-acre feet. It dealt with the price of that
water. And it said that the district would pay, basically the operation and
maintenance charge for the water, what it cost the United States to deliver the
water, or in area two the water, the water users would likewise pay cost of
service if the amount of water was over and above that authorized by reclamation
law and over the landholding size then there was a full cost paid for the water.
Secondly, it dealt with the service area. It ratified that the entire district
was entitled to water service. Thirdly, it dealt with drainage and basically
created a trust fund for drainage solutions, my recollection is about five
million dollars. And the district was to embark on various projects to solve the
drainage problem. There was, and the district had a sludge removal project, they
explored deep well injection of drainage water, they had a couple of other
things and they never could find a solution. So, but the trust fund was there
for that purpose. Then lastly, it dealt with the allocation of water between
areas one and two, which I referred to earlier. And the settlement basically
said until 2008, which was the date on which the 1963 contract was to expire,
the area one would have a prior right to water. Water not used in area one would
go to the area two along with the 250,000-acre feet. And they put off dealing
with the solution of water needs after 2008 that was deferred to another time.
And that ultimately was settled in further litigation.
>> Tom Holyoke: Okay, so essentially the final resolution of the Barcellos case
was resolving a lot of the major issues for Westlands Water District.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: Okay. The next topic then sort of settled with drainage then is
to move briefly into the issue of the acreage limitations.
>> Jim Ganulin: Fine.
>> Tom Holyoke: Okay. First off, this is, it's a criticism that Congressman
George Miller had brought up, and leveled against Westlands Water District, the
Carter Administration was concerned with it. What is the problem?
>> Jim Ganulin: The reclamation law which governs the deliver of water to
federal districts has a number of requirements. The law says if you own what is
referred to as excess land, which in the early days was 160 acres per individual
landowner, then you cannot get water for that land unless you agree to sign a
recordable contract, which is a contract recorded in the county at the county
level. And, under that contract, you agree to sell your land within ten years at
a price approved by the Bureau of Reclamation which does not include an
increment of value brought about by the delivery of project water to that land.
And, if you don't sell it within the ten years, the Secretary of the Interior
has the power of attorney to sell it for you. The, early on the critics said,
well, I'll go back to the, to the, to the merger and to the delivery of water to
reclamation districts or federal districts that have the reclamation law. The
critics said well all the large landowner wanted to do was to have federal water
delivered and have the ground water basin increase its supply and they could
then use ground water and they wouldn't have to sign recordable contracts. The
large landowners on the other hand did in fact sign recordable contracts. They
put tens of thousands of acres under contract in which they agreed to sell the
land within ten years. And ultimately, the entire district and all of its excess
land holdings were under contract. Then, when they started to sell, the critics
said wait a minute. You're just selling to paper famers was the expression used
by the critics. Well, they were in my, in my experience they were not paper
farms. They were legitimate farmers who were farming land and the land was in
fact broken up, the large landholdings were broken up.
>> Tom Holyoke: Okay, so, in other words Westlands Water District was in fact in
compliance with the Reclamation law.
>> Jim Ganulin: Yes, yes.
>> Tom Holyoke: Who was, who were National Land for People?
>> Jim Ganulin: National Land for People was a local organization that was very
critical of land holdings within the Westlands Water District, the large land
holdings. They were seeking changes in reclamation law which would further
constrict the delivery of water to what to what they would refer to as large
landowners.
>> Tom Holyoke: Why ultimately did this then require basically the 1982
amendments to the Reclamation Act the change in statute?
>> Jim Ganulin: In 1976 or 1977, the National Land for People filed a lawsuit
against the United States saying that reclamation law was not being properly
enforced. As a matter of fact that resulted in some regulate, proposed
regulations by the Department of Interior that would've gone far beyond what we
and most folks in federal, federally served districts felt was the law. For
example, it would've required residency on the land as a requirement. That was
based on the 1902 statute, which we felt was repealed in 1926. Those regulations
were proposed by the Carter-Andruss Administration. We all went to court and
Judger Crocker ruled that those regulations were invalid and to be allowed to
continue in some water service. That started an effort in Congress to see what
could be done about reforming the law. I think the landowners in Westlands felt
that that would be advantageous that the 160 acres which I mentioned earlier was
not an appropriate size of farm or criteria for water service. Families were
should not be entitled to 160 acre per individual because there were kids and so
on. So, it wound up being, there was an effort to seek reform by both the
critics and the landowners.
>> Tom Holyoke: And, statutory change, as I understand upped the acreage
limitation to was it 960?
>> Jim Ganulin: 960 acres per family.
>> Tom Holyoke: Per family. As I understand it after the passage of the ‘82,
amendments to reclamation law it was another five years before the Bureau of
Reclamation profligated out its new rules. When the rules come out, Congressman
George Miller, the critic of Westlands Water District referred to them as an
outrage, betrayal. Do you remember what his problem was with the new rules?
>> Jim Ganulin: Well, I think his problem was that he didn't, he didn't like the
fact that there was an increase in the acreage. He didn't like the provisions
with respect to trusts. He was he felt that Westlands would, in his judgment,
continue to avoid the law. I mean it's been a long-standing point of criticism
for him, criticizing the district and its operations.
>> Tom Holyoke: Just one last question on the actual movement of the
legislation. Did you have a great deal of success working through valley
lawmakers in pushing this?
>> Jim Ganulin: Yes. The landowners within the district formed a group called
California Westside Farmers. Since that, the acreage limitation issue was not
technically a district issue it was a landowner issue because you were dealing
with the impact of reclamation on the individual farmer's operation, landowner's
operation. California Westside Farmers took a lead rule in seeking reform to the
reclamation law. They joined with organizations from the other 17 western states
subject to that law. And that, that resulted in the 1982 act. And the valley
congressmen were very helpful in that effort.
>> Tom Holyoke: Anything else you want to add on to the critics limitations?
>> Jim Ganulin: No, I would say that the, you mentioned the regulations; I mean
the regulations did come out. The landowners throughout the district did comport
with those regulations. The land holdings were further broken up. Those folks
who were receiving water for more than 960 acres of farm ground were paying full
cost for that water as required by the law. The anti speculation revision the
laws were enforced. I think the law was successful.
>> Tom Holyoke: I guess moving into talking about an issue that may come back to
us in the near future and that is the peripheral canal. The original peripheral
canal proposal of the late 1970s which ultimately then failed on the ballot, I
think, in 1982. Was Westlands Water district a prime supporter of the original
peripheral canal proposal?
>> Jim Ganulin: We were a supporter but I don't think we were heavily involved
in that effort. Our intentions were really directed at the federal level and
dealing with reclamation law and those issues, getting appropriations for
constructing the system.
>> Tom Holyoke: Would a peripheral canal at that time, was it seen as something
that would've been beneficial to Westlands.
>> Jim Ganulin: Absolutely, it was it was beneficial we just don't, we did not
take a major role in that effort though.
>> Tom Holyoke: Okay. So in the later 1980s a lot of the, many of the legal
problems facing Westlands Water District have now been resolved. Is there
actually any change in really the attitude of the Reagan Administration by the
late 1980s?
>> Jim Ganulin: No, not significantly. Once we resolved the Barcellos case we,
our disputes at the federal level were far less.
>> Tom Holyoke: Would you tell me a little bit about the 1992 Central Valley
Project Improvement Act?
>> Jim Ganulin: The primary movers of that legislation were Senator Bill Bradley
from New Jersey and Congressman George Miller. And they concluded that the
reclamation law, particularly related to the Central Valley Project needed to
be, in their judgment, improved. And they started down the road with legislation
which would've done just that, would've specifically allocated water for
environmental purposes among other things, dealt with water transfers, dealt
with provisions concerning amendatory contracts and the like. The legislation
was always a problem for California and the federal contractors. There was a
significant effort to work with Miller and Bradley to resolve some of the
difference of opinion, although there was concern that we couldn't we wouldn't
do that because of the bias which in our judgment they had. We had, when it got
toward the legislation was almost ready to be finalized, there was a question of
whether or not, excuse me, we should negotiate with Miller and Bradley in order
to litigate some of the adverse impacts that we thought the legislation would
bring upon us. At the 11th hour in a five-hour conference call with, probably,
30 different people on the phone, it was concluded, at the urging of some of our
principles, that we should negotiate, that President Bush would veto the
measure. Some of us had concerns about that. Well, that would in fact happen, I
guess we were correct. It didn't happen. The bill was part of a larger bill that
covered other states and things which they wanted and not withstanding efforts
to talk. Our people did go talk to; I guess Jim Baker was Chief of Staff at that
time. And ultimately Bush did not Veto the bill. So, the Central Valley Project
Improvement Act became law in 1992.
>> Tom Holyoke: What were the concerns that Senator Bradley and Congressman
Miller had that led to this legislation?
>> Jim Ganulin: Too much water being used by, by the Central Valley Project
water users and not enough water for the environment. I think that was, you
know, the primary thrust of the legislation.
>> Tom Holyoke: This is a, I understand this is one of the first times that
environmental components were added into reclamation law.
>> Jim Ganulin: That's correct.
>> Tom Holyoke: After 1992, you were not at Westlands much longer than that
time.
>> Jim Ganulin: That's correct. I retired in 1994.
>> Tom Holyoke: And is that when you went on to become of counsel at Baker,
Manock and Jensen?
>> Jim Ganulin: That's correct, that's correct.
>> Tom Holyoke: Okay. In that case starting to go into the rapid phase here you
spent a life in California water law and California water politics. In your
opinion what are some of the big changes you've seen if there have been big
changes in and not just law and policy, but even public attitude?
>> Jim Ganulin: Well, let's go back for a moment to the CVPI, Central Valley
Project Improvement Act. That was, in my judgment, one component of what we've
referred to as a regulatory drought, cause of a regulatory drought. There was
some 800,000 acre feet of Central Valley Project water yield here marked for the
environment. The endangered species act that we've been reading about in recent
years became a significant factor in terms of the amount of water exported from
the Delta. The Bay Delta water quality standards required by the Clean Water Act
also restricted the amount of water that could be exported. So, the whole
environment, excuse me, both for Westlands and other exporters like Metropolitan
Water District of Southern California, or Santa Clara were adversely impacted by
the substantial decrease in the amount of water from the Delta. This is probably
the most significant issue for, I think the state, and its water, the water
issues for the state is the substantial decrease in the amount of water which
can be exported from the Delta under present regulations. I think that there is
a lack of recognition of other causes of problems within the Delta.
>> Tom Holyoke: Pollution?
>> Jim Ganulin: Pollution is one. Non-native species that come in, up stream
diversions, and heretofore those have not been taken into account in terms of
figuring out how to solve the Delta problems. The environment for solving that
problem is really, it's hard to fathom it's hard for me to understand but it's
there. There's the two parties are at opposite ends of the spectrum at the state
level, they argue over there shall be no storage, everything, all the problems
can be solved by water conservation, water transfers on the one hand. On the
other hand there needs to be, needs to be new storage, there needs to be
conveyance to the Delta and the two parties are at locked heads over those
issues. Very significant, I think that California's residents don't realize the
significance of those issues because they see it impacting agriculture in the
Center Valley. They're not yet seeing it in the big cities. And, once they see
it in the big cities, it's going to have, perhaps a different environment in
which to solve the problem. I think that if we had an earthquake and there were
salt at the pumps the two heads the federal and state pumps and you couldn't
deliver the water to Southern California we'd get a peripheral canal a lot
quicker than we would now. I've heard fish and game employees say one on one
that the peripheral canal would not be an adverse impact on the Delta it would
be beneficial. But in the crowded room with a lot of folks there and the
rhetoric fairly strong, you won't hear him or her say that.
>> Tom Holyoke: Is this, is this political fighting that you see in Sacramento
maybe even to some extent in Washington DC, like California can no longer seem
to create the great water projects we had in the past, because we've had
enormous projects that have been done in this valley, the Central Valley Project
the State Water Project. These were projects on enormous scales some of the
biggest in the United States. And the will to do those projects from the 1940s
50s and 60s no longer seems to be there.
>> Jim Ganulin: Well, and following up on that where would we be if we did not
have the 1960 legislation of both the federal and state level which created
those projects? I mean if we didn't have the State Water Project where would we
be now? I mean the former, Pat Brown Senior, Governor Pat Brown Senior had the
foresight to do that. We don't see that now. We just don't see the political
climate to get that done now. And that's sad.
>> Tom Holyoke: Is there any sense that, given the problems, the drainage now
that the issues with the Endangered Species Act, that Westlands Water District
and, well the farms out there are living on borrowed time?
>> Jim Ganulin: Over the years when I've told stories to my wife about there's
going to be a drought, there's a water supply shortage, she would, has always
been very sympathetic but she would always say but your farmers are so
innovative they will find a way. I don't think you can say that now. Had to
fallow tens of thousands of acres in Westlands, the water supply is at best
insecure and unreliable, we see a ten percent supply in 2008-2009. Who knows
what its going to be next year? The efforts to resolve the issue and seek
solutions even on a temporary interim basis run into all kinds of roadblocks.
It's very difficult. I don't know what, honestly don't know what the future
holds but it's a, it's very concerning.
>> Tom Holyoke: Okay, I'm at the end of my questions are there any final things
you would like to add?
>> Jim Ganulin: Yeah, it's been a fascinating 40 plus years, been a lot of
changes, a lot of beneficial changes, but, but we're at a tough time now. And
it's concerning. And there's all kinds of efforts to try and resolve problems,
and I just wish people would sit down at the table and really resolve, work to
resolve them as opposed to being doctrinaire in their approach.
==== Transcribed by Automatic Sync Technologies ====