11-09-2020 BPU RPT 10 - Laserfiche WebLink

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== RIVERSIDE PUBLIC UTILITIES Board Memorandum P U B 1 1( 1_11 i r i BOARD OF PUBLIC UTILITIES DATE: NOVEMBER 9, 2020 ITEM NO: 10 SUBJECT: AGREEMENT FOR OPERATION OF GAGE CANAL FACILITIES BETWEEN THE CITY AND THE GAGE CANAL COMPANY ISSUE: Receive and file this report on the Agreement for Operation of Gage Canal Facilities between the City of Riverside and the Gage Canal Company. RECOMMENDATION: That the Board of Public Utilities receive and file this report on the Agreement for Operation of Gage Canal Facilities between the City of Riverside and the Gage Canal Company. BACKGROUND: City Acquisition of the Gage Canal Assets / 1965 Judgment in Eminent Domain The Gage Canal Company (Company) was established in 1890 as a private, non-profit California corporation. The purpose of the Company was to bring artesian and pumped well waters, originating in the Bunker Hill basin area of San Bernardino, into Riverside for the purposes of irrigation. Later, additional wells were drilled in the Riverside North and Riverside South basins to increase their water supply. Shareholders in the Company had a right to a certain amount of gravity -fed water from the canal delivered on certain days of the month. In 1959, the City of San Bernardino and San Bernardino Valley Municipal Water sought to condemn the Gage Canal Company in order to reduce the amount of water being exported out of the Bunker Hill groundwater basin. At the behest of some of the Gage shareholders, the City of Riverside (City) exercised its power of eminent domain by filing a lawsuit to acquire all assets of the Company in 1959 to secure water rights for the beneficial use of the residents of the City. The condemnation was delayed, in part, by legal action brought in 1962 by certain Company shareholders. The plaintiffs in the case of Erwin, et al, vs Gage Canal Company (Attachment 7) were shareholders who argued that the water rights were appurtenant to the land, were not owned by the Company and the Company could not negotiate a settlement with the City for acquisition of those rights. The court disagreed, holding that Company shares only represent a delivery right to Gage Canal water, and that the water rights were owned by the Gage Canal Company. In 1963, the Erwin case was resolved in favor of the Company and the City's condemnation lawsuit continued forward.