MID, Gallo reach settlement in water dispute
07/15/2014 10:30 PM
07/15/2014 10:31 PM
Years of legal wrangling and negotiations over water rights between a prominent Merced County farmer and the Merced Irrigation District ended abruptly Tuesday when both sides cut a deal to end the long-standing feud.
Mike Gallo, owner of the Gallo Cattle Co. in Livingston, sued MID and Hunter Farms over access to irrigation water. The civil jury trial, which began late last month, ended Tuesday with Judge Donald J. Proietti dismissing the jury, attorneys on both sides confirmed.
Attorneys said the deal ensures that MID growers receive priority to irrigation water over Gallo, whose Bear Creek Ranch operation is outside district boundaries. Gallo is not an MID member.
“The deal provides for all of MID operations and protects MID growers,” said David Harris, the attorney representing the district. “Any water received by the Gallo Cattle Co. won’t impact growers.”
Under terms of the deal, Gallo’s operation would receive water “only in years where there is sufficient water supply for MID operations.” Specifically, Harris said, Gallo can purchase water only when Lake McClure holds at least 900,000 acre-feet of water. The lake’s total capacity is 1 million acre-feet.
This year the lake held just 300,000 acre-feet for growers. Irrigation water is measured in acre-feet, the amount of water it takes to cover an acre of land a foot deep, or about 325,900 gallons.
Gallo’s attorney, Marshall Whitney, confirmed “the vast majority” of the water Gallo receives “will only be delivered if MID growers have their water too.” Whitney acknowledged that in drought years it “could be the case” that Gallo receives little or no water from the district.
Formula-based water rate
Both attorneys on Tuesday declined to say exactly how much water Gallo would be allowed to purchase or what price he would pay for it. Those specifics were still being ironed out in legal paperwork and are expected to be released in coming days, attorneys said.
The attorneys did say Gallo’s payments would be based on a formula. “The price can change (year to year) but the formula for configuring that price won’t change,” Harris said.
Additionally, under terms of the deal, the MID will not pay Gallo any money. The Livingston farmer had been seeking millions in damages from the district for water Gallo claimed he was entitled to but never received dating back to 2003.
“Both MID and the Gallo Cattle Co. have been in litigation for years and, hopefully, this settlement develops a new, more cooperative approach. We think it’s in the best interests of the entire (agriculture) community and hopefully it’s the beginning of a new day for both parties.”
The dispute centered on a nearly century-old contract signed in 1918 by Merced County and the Bloss Land Cattle Co., which owned the ranch now owned by Gallo. The settlement ends a dispute over the irrigation water that had historically spilled into a ditch, commonly known as the Livingston drain, that runs through Gallo’s land.
Whitney told jurors that from 1919 until about 2003, MID put thousands of acre-feet of water into the Livingston drain for the owners of Bear Creek Ranch to irrigate their crops. In the lawsuit, Gallo said he received more than 5,000 acre-feet of water each year. MID disputed that amount.
In 2003, a small dam was placed on a neighboring property owned by Hunter Farms, upstream from Gallo’s land. Gallo’s property stopped receiving the same levels of irrigation water. Gallo claimed MID sold Hunter Farms water that belonged to him.
MID argued that contracts never guaranteed water would flow to Bear Creek Ranch and that all of the water that did go to that property was due to spillage and runoff.
In court, Harris argued that computer technology changed irrigation practices dramatically. New irrigation practices helped all farmers improve efficiency, which, Harris said, drastically reduced the amount of water spilled into the Livingston drain.
Whitney said the new settlement “does away” with the complicated uncertainty of the old agreement.
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