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Full text of "The California State Department of Water Resources, 1967-1973 : oral history transcript / 1985"

Regional Oral History Office University of California 

The Bancroft Library Berkeley, California 

Government History Documentation Project 
Ronald Reagan Gubernatorial Era 



William R. Gianelli 
THE CALIFORNIA STATE DEPARTMENT OF WATER RESOURCES, 1967-1973 



An Interview Conducted by 
Malca Chall 
in 1985 



Copyright fc} 1986 by the Regents of the University of California 



All uses of this manuscript are covered by a legal 
agreement between the University of California and 
William R. Gianelli dated April 30, 1985. The manuscript 
is thereby made available for research purposes. All 
literary rights in the manuscript, including the right 
to publish, are reserved to The Bancroft Library of the 
University of California at Berkeley. No part of the 
manuscript may be quoted for publication without the 
written permission of the Director of The Bancroft 
Library of the University of California at Berkeley. 

Requests for permission to quote for publication 
should be addressed to the Regional Oral History Office, 
486 Library, and should include identification of the 
specific passages to be quoted, anticipated use of the 
passages, and identification of the user. The legal 
agreement with William R. Gianelli requires that he be 
notified of the request and allowed thirty days in 
which to respond. 

It is recommended that this oral history be cited 
as follows : 

William R. Gianelli, "The California State 
Department of Water Resources, 1967-1973," 
an oral history conducted in 1985 by Malca 
Chall, Regional Oral History Office, The 
Bancroft Library, University of California, 
Berkeley, 1986. 



Copy No. 




WILLIAM R. GIANELLI 



TABLE OF CONTENTS William R. Gianelli 

PREFACE 

INTERVIEW HISTORY 

BRIEF BIOGRAPHY v 

I ADMINISTRATION OF THE DEPARTMENT OF WATER RESOURCES 
Appointment as Director, 1967 
The Staff 

The Role of the California Water Commission 
Solving the Financial Problems in Order to Complete the 

State Water Project 

The Tidelands Oil Funds 16 

The Electric Power Contracts 

Setting Policies for Recreation 
Personnel: Building Up and Reducing Staff 
Administrative Control: Contrasting the State and 

Federal Governments 
Controlling Costs Z * 1 

II POLICY JUDGEMENTS: COMPLETING THE STATE WATER PROJECT 44 

The Peripheral Canal 

The Environmentalists 
Dos Rios 

The San Luis Drain 
Groundwater Management 
The Central Arizona Project 

The Western States Water Council 

III PRIVATE CITIZEN: CONTINUING INTEREST IN WATER ISSUES 
Leaving the State Department of Water Resources, 1973 
Analyzing Current Water Conservation Issues 
Reviewing the Early History of the State Water Project 74 

TAPE GUIDE 

APPENDIX - William R. Gianelli Experience Record and 
Biographical Summary 

INDEX 85 



PREFACE 



California government and politics from 1966 through 1974 are the focus of 
the Reagan Gubernatorial Era Series of the state Government History Documenta 
tion Project, conducted by the Regional Oral History Office of The Bancroft 
Library with the participation of the oral history programs at the Davis and 
Los Angeles campuses of the University of California, Claremont Graduate School, 
and California State University at Fullerton. This series of interviews carries 
forward studies of significant issues and processes in public administration 
begun by the Regional Oral History Office in 1969. In previous series, inter 
views with over 220 legislators, elected and appointed officials, and others 
active in public life during the governorships of Earl Warren, Goodwin Knight, 
and Edmund Brown, Sr., were completed and are now available to scholars. 

The first unit in the Government History Documentation Project, the Earl 
Warren Series, produced interviews with Warren himself and others centered on 
key developments in politics and government administration at the state and 
county level, innovations in criminal justice, public health, and social welfare 
from 1925-1953. Interviews in the Knight-Brown Era continued the earlier 
inquiries into the nature of the governor's office and its relations with 
executive departments and the legislature, and explored the rapid social and 
economic changes in the years 1953-1966, as well as preserving Brown's own 
account of his extensive political career. Among the issues documented were 
the rise and fall of the Democratic party; establishment of the California Water 
Plan; election law changes, reapportionment and new political techniques; 
education and various social programs. 

During Ronald Reagan's years as governor, important changes became evident 
in California government and politics. His administration marked an end to the 
progressive period which had provided the determining outlines of government 
organization and political strategy since 1910 and the beginning of a period of 
limits in state policy and programs, the extent of which is not yet clear. 
Interviews in this series deal with the efforts of the administration to increase 
government efficiency and economy and with organizational innovations designed 
to expand the management capability of the governor's office, as well as critical 
aspects of state health, education, welfare, conservation, and criminal justice 
programs. Legislative and executive department narrators provide their perspec 
tives on these efforts and their impact on the continuing process of legislative 
and elective politics. 

Work began on the Reagan Gubernatorial Era Series in 1979. Planning and 
research for this phase of the project were augmented by participation of other 
oral history programs with experience in public affairs. Additional advisors 
were selected to provide relevant background for identifying persons to be 
interviewed and understanding of issues to be documented. Project research 
files, developed by the Regional Oral History Office staff to provide a 
systematic background for questions, were updated to add personal, topical, and 
chronological data for the Reagan period to the existing base of information 
for 1925 through 1966, and to supplement research by participating programs as 
needed. Valuable, continuing assistance in preparing for interviews was 
provided by the Hoover Institution at Stanford University, which houses the 
Ronald Reagan Papers, and by the State Archives in Sacramento. 



11 

An effort was made to select a range of interviewees that would reflect 
the increase in government responsibilities and that would represent diverse 
points of view. In general, participating programs were contracted to conduct 
interviews on topics with which they have particular expertise, with persons 
presently located nearby. Each interview is identified as to the originating 
institution. Most interviewees have been queried on a limited number of topics 
with which they were personally connected; a few narrators with unusual breadth 
of experience have been asked to discuss a multiplicity of subjects. When 
possible, the interviews have traced the course of specific issues leading up 
to and resulting from events during the Reagan administration in order to 
develop a sense of the continuity and interrelationships that are a significant 
aspect of the government process. 

Throughout Reagan's years as governor, there was considerable interest and 
speculation concerning his potential for the presidency; by the time interview 
ing for this project began in late 1980, he was indeed president. Project 
interviewers have attempted, where appropriate, to retrieve recollections of 
that contemporary concern as it operated in the governor's office. The intent 
of the present interviews, however, is to document the course of California 
government from 1967 to 1974, and Reagan's impact on it. While many interview 
ees frame their narratives of the Sacramento years in relation to goals and 
performance of Reagan's national administration, their comments often clarify 
aspects of the gubernatorial period that were not clear at the time. Like 
other historical documentation, these oral histories do not in themselves 
provide the complete record of the past. It is hoped that they offer firsthand 
experience of passions and personalities that have influenced significant events 
past and present. 

The Reagan Gubernatorial Era Series was begun with funding from the 
California legislature via the office of the Secretary of State and 
continued through the generosity of various individual donors. Several 
memoirs have been funded in part by the California Women in Politics Project 
under a grant from the National Endowment for the Humanities, including a 
matching grant from the Rockefeller Foundation; by the Sierra Club Project 
also under a NEH grant; and by the privately funded Bay Area State and 
Regional Planning Project. This joint funding has enabled staff working with 
narrators and topics related to several projects to expand the scope and 
thoroughness of each individual interview involved by careful coordination of 
their work. 

The Regional Oral History Office was established to tape record autobio- . 
graphical interviews with persons significant in the history of California 
and the West. The Office is under the administrative direction of James D. 
Hart, Director of the Bancroft Library, and Willa Baum, head of the Office. 
Copies of all interviews in the series are available for research use in 
The Bancroft Library, UCLA Department of Special Collections, and the State 
Archives in Sacramento. Selected interviews are also available at other 
manuscript depositories. 

July 1982 Gabrielle Morris 

Regional Oral History Office Project Director 

486 The Bancroft Library 
University of California at Berkeley 



REAGAN GUBERNATORIAL ERA PROJECT 



Advisory Council 

Eugene Bardach 
Charles Benson 
Nicole Biggart 
John Burns 
Lou Cannon 
Bert Coffey 
Edmund Constant i 
Lawrence deGraaf 
Enid Douglass 
Harold E. Geiogue 
James Gregory 
Ronald Grele 
Gary Hamilton 
Mary Ellen Leary 
Eugene C. Lee 



James W. Leiby 
Edwin Meese III 
Sheldon L. Messinger 
James R. Mills 
William K. Muir 
Charles Palm 
A. Alan Post 
Albert S. Rodda 
Ed Salzman 
Paul Seabury 
Alex Sherriffs 
Michael E. Smith 
A. Ruric Todd 
Molly Sturges Tuthill 
Raymond Wo 1 finger 



Interviewers 

Malca Chall 
A. I. Dickman* 
Enid Douglass 
Steve Edgington 
Harvey Grody 
Ann Lage 
Gabrielle Morris 
Sarah Sharp 
Julie Shearer 
Stephen Stern 
Mitch Tuchman 



*Deceased during the term of the project 



On behalf of future scholars, the Regional Oral History Office wishes 
to thank those who have responded to the Office's request for funds to 
continue documentation of Ronald Reagan's years as governor of California. 
Donors to the project are listed below. 



Anonymous 
Margaret Brock 
Monroe Brown 
Edward W. Carter 
Sherman Chickering 
Aylett B. Cotton 
Justin Dart* 
William C. Edwards 
James M. Hall 
William Randolph Hearst 
William Hewlett 
Jaquelin Hume 
Earle Jorgensen 
L. W. Lane, Jr. 
Gordon C. Luce 
Norman B. Livermore, Jr. 
Joseph A. and Gladys G. Moore 
David Packard 
Robert 0. Reynolds 
Henry and Grace Salvatori 
Porter Sesnon 
Dean A. Watkins 
^deceased 



iii 



INTERVIEW HISTORY 



In January 1967, Governor Ronald Reagan appointed William R. Gianelli 
to head the California State Department of Water Resources. Gianelli had 
exactly the background the governor needed for his director of the DWR: an 
engineer with strong water-related experience, almost all of it in California; 
familiarity with the state's water allocation problems and many public and 
private individuals and organizations concerned with complex water issues; 
knowledge of the State Water Project, at that time, despite some upcoming 
difficulties, on its way toward completion. 

William Gianelli had amassed his water-related expertise through a logical 
progression of work-related experiences. He was graduated from the University 
of California at Berkeley in 1941 as a civil engineer with an irrigation 
option. After four years of service with the Army Corps of Engineers in the 
Pacific war theater he returned to California and signed on as a junior 
engineer in the Division of Water Resources, the predecessor agency of the 
Department of Water Resources. Gradually he moved up to the post of staff 
engineer and special assistant to the director of the department, where he 
remained until 1960. 

During these fourteen years while he became acquainted with the state's 
physical water distribution problems, he had an opportunity to grasp the 
serious underlying political controversies which for years had stalled any 
constructive resolution of the issues. Many and varied engineering plans lay 
in the department's files while state and federal legislators, professional, 
and citizen's groups debated the wisdom and fairness of the plans and policies. 
During the administration of Governor Goodwin G. Knight, Gianelli served on a 
Water Lawyers Committee seeking to write a satisfactory constitutional 
amendment which would guarantee equal treatment to both northern and southern 
California in the allocation of northern water resources. At other times he 
represented the director of the department before legislative and congressional 
committees presenting testimony in favor of the long-envisioned and long- 
stalled California Water Project. 

When in 1960, Pat Brown was elected governor he succeeded in persuading 
the legislature, through the Burns-Porter Act, and the voters of California, 
through Proposition 1 the $1.75 billion water bond measure to construct the 
State Water Project. Gianelli played a key departmental role helping Director 
Harvey Banks and Deputy Director Ralph Brody move the Burns-Porter Act through 
the legislature. That accomplished, he left government service and established 
his consulting engineering firm in Sacramento where he remained until 1967. 

Then he accepted Governor Reagan's bid to direct the Department of Water 
Resources and complete the State Water Project. He now confronted one of the 
major challenges of his career. How he successfully overcame the financial 



iv 



and political hurdles which lay in the way and completed what is sometimes 
labelled Phase I of the project, is the basis for this oral history. 
California water history buffs will read again about north-south disputes, 
the Sacramento Delta, revenue and general obligation bonds and tidelands 
oil funds, the Peripheral Canal and the San Luis Drain, electric power 
contracts, and the Central Arizona Project, 

In 1973, after water flowed in to Ferris Reservoir ending its 444-mile 
journey through the California Aqueduct, Gianelli returned to the private 
sector as a consultant. His government career began again in 1981 when 
President Reagan appointed him Assistant Secretary of the Army for Civil 
Works, responsible for overseeing the civil works programs for water resources 
of the U.S. Army Corps of Engineers. In this interview he cogently contrasts 
his successful state and frustrating federal government experiences in 
formulating and carrying out water policy objectives. 

Since May 1984 he has been living in Pebble Beach, California, as a 
private citizen semi-retired. He still carries on some private consultation 
in water resources, is president of the Water Education Foundation, and, as a 
Reagan appointee, serves as chairman of the Panama Canal Commission. When 
there is time he plays golf . 

His spacious book-lined office in the Gianelli 's comfortable home was the 
setting for the three-hour interview on January 29, 1985. Referring to the 
topic outline sent ahead Mr. Gianelli talked easily of his years as director 
of the DWR, his relationship with Ronald Reagan and others in the administration 
and the legislature, and discussed briefly his former years with the Goodwin 
Knight and Pat Brown administrations . On the walls of his office and along 
the halls, are pictures of the many well known people in and out of state and 
federal government with whom Gianelli worked on development of water policy 
throughout his career. He plans to deposit his books and papers in UC 
Berkeley's Water Resources Center Archives. 

Following the interview session Mrs. Gianelli graciously served lunch, 
during which the Gianellis talked of days past and the people they had known. 
But, since on that day Edwin Meese, former colleague in the Reagan gubernatorial 
and presidential administrations, was once again in the news as a candidate 
for attorney general, the present could not long be ignored. 

Mr. Gianelli returned his lightly edited transcript with few changes. 
The Water Resources Center at the University of California at Davis provided 
funds to assist the production of this oral history, partially funded by 
this Office's ongoing Government History Documentation Project, now completing 
the Ronald Reagan Era Oral History Project. 

Malca Chall 
Interviewer-Editor 

21 January 1986 

Regional Oral History Office 

486 The Bancroft Library 

University of California at Berkeley 



Regional Oral History Office University of California 

Room 486 The Bancroft Library - Berkeley,' California 94720 



BIOGRAPHICAL INFORMATION 
(Please print or write clearly) 

Your full name William Reynolds Gianelli 

Date of birth February 19. 191lace of birth Stockton, California 

Father's full name John Antone Gianelli 

Birthplace ' Genoa, Italy 

Occupation Warehouseman 

Mother's full name Frances Isabelle Reynolds 

Birthplace Newark, New Jersey 

Occupation Housewife 

Where did you grow up ? Stockton, California 

Present community Monterey Peninsula, California 

Education Stockton High School 

B.S. Degree, University of California, Berkeley 

Occupation^ ) Civil Engineer 



Special interests or activities golf, gardening 



I ADMINISTRATION OF THE DEPARTMENT OF WATER RESOURCES 
[Interview 1: January 29, 1985 ]## 



Appointment as Director, 1967 



Chall: How did you come to be appointed by Ronald Reagan to be director 
of the Department of Water Resources? 

Gianelli: It was very interesting. After the governor was elected, he 

appointed a number of committees throughout the state to interview 
people for some of his key appointments. At that time, as I 
recall, one of his key appointments was the director of the Depart 
ment of Water Resources. He indicated quite clearly that if he 
were elected, he would designate, I think he said, a water engineer 
from northern California. 

This was as opposed to Mr. [William] Warne who was not an engineer, 
and who, I think, during the campaign, had made quite a number of 
statements which pretty well positioned him with respect to 
Governor Reagan. So it was pretty well clear that Mr. Warne 
would be leaving if Governor Reagan became elected. 

At any rate, these interview panels were set up throughout the 
state to interview people outside of government for some of the 
key jobs. I was very active in the water community, and of course 
had been, so I was interviewed by I think at least two or three 
of these panels as to whether or not I would be interested in 
being director of water resources, as to my qualifications, and 
so forth. 



rfThls symbol indicates that a tape or a segment of a tape has 
begun or ended. For a guide to the tapes see page 78. 



Gianelli: So I knew that my name was in the hopper, along with a number of 
others, under that process. I did not know Reagan at that time; 
I had never met him. As a matter of fact, at that time, I was a 
registered Democrat, and would have had no reason to have our 
paths cross. So the first real indication I had was a telephone 
call that I got from the governor-elect I think it was about the 
middle of December asking me if I would take on the position of 
director of Water Resources. Particularly he was concerned about 
the status of the State Water Project. It was in its early stages, 
and obviously, from what briefly he had read, was in trouble 
financially. 

So we talked a few minutes. I wanted to be sure that we were on 
the same wave length philosophically in terms of things like 
public power, and finishing the water project, and all that sort 
of thing. As so, at the end of the conversation, which I suspect 
lasted about a half-an-hour, I indicated that I would be willing 
to take on the directorship. 

And so that was it. And he said, "I'll have my press secretary 
call you and arrange a press conference," and so he arranged a 
press conference down, as I recall, in Los Angeles, in one of 
the hotels. I went down, and he introduced me in a press confer 
ence, and indicated I would be the director of Water Resources, 
and that was it. 



Chall: Do you think you had any opposition, in any way, among 
the other 



some of 



Gianelli: I suspect that a Republican governor, being elected after a 

Democrat had been in for eight years there were a number of people 
who probably felt that there were some qualified Republicans 
around that should have been appointed to the job. But, as I say, 
Reagan, early in his campaign, had indicated that if he were 
elected, he would appoint a water engineer from northern California, 
and I filled that bill, I guess. And so, as a result, he called 
on me. 

That's really all there was to it. I didn't know him before. He 
made it quite clear that he knew very little about the water 
issues in California, and that I would be his water man, if I took 
the job. I indicated that under those conditions, I would take 
the position. And I also indicated that I'd like to have an oppor 
tunity to choose some of my deputies, and he indicated a receptive- 
ness to that. 

So, with that in mind, I accepted the job, and made arrangements 
to terminate my partnership in my engineering firm in Sacramento, 
and made arrangements to report then, as I recall, right after 



Gianelli: the first of the year, which was I think the third of January, or 
something like that, right after his inauguration. 

Chall: Actually, you'd been out in private practice, it was only about 
eight years, during the Brown administration? 

Gianelli: Less than that, less than that. I started out as a career state 
employee, and advanced through the various civil service ranks 
until I got to about the top of the civil service structure. When 
I left, I was an assistant. I think my title was Assistant to 
the Staff Director, or something like that, to Director Harvey 
Banks . 



I stayed throughout the first year of the Pat Brown administration, 
and into his second year. And one of the reasons I stayed was that 
I was one of the primary witnesses that appeared before the legis 
lature in furtherance of the Burns-Porter Act and the legislation 
which was sponsored by Governor Edmund G. Brown. 

So, actually I left state government, as I recall, in March, that 
would have been of 1960. So, I was in private practice from March 
of 1960 until January of 1967. So, it was not quite seven years. 

Chall: Did you leave the Department of Water Resources because did you 
feel that you would have differences of philosophy, or working 
arrangements, or something, with William Warne? There was no 
place for you? 

Gianelli: No. William Warne was not the director at that time. Harvey Banks 
carried over as director for about two years. In fact, I think he 
stayed until after the election, which was November of 1960, before 
he left. I think he left in perhaps January of 1961, or the end 
of 1960. So, I never served under William Warne, and the time I 
left, it wasn' t known that he would be the director, so I served .. 
under Harvey Banks and left during his tenure as director of Water 
Resources . 

Chall: Any special reason? 

Gianelli: No, I was contemplating a move to southern California at that time. 
I'd been appointed district engineer of the southern California 
district of the department. This was, as I recall, a few months 
before I actually left the department. And so my wife and I 
contemplated whether we wanted to move to southern California, or 
not. 

I'd been on the verge of sort of wanting to try private practice, 
anyway, so I would say it was a combination of the potential move 



Gianelli : to southern California, plus my own desire to move in the private 
sector, because I felt that I'd reached about as far as I could 
go in the civil service structure of the department. 

Chall: Did you actually start with the, what was it, the Division of 
Water Resources at the time, right after your graduation as an 
engineer? 

Gianelli: Let me reflect on that a moment. I graduated from the University 
of California in 1941, and I was a reserve officer; I'd taken ROTC 
at the university. So, I went into the service in July of 1941, 
and stayed there until the fall of 1945, I guess it was. 

And so when I was discharged from the army, I went to work for the 
state engineer's office in Sacramento, and that was the old 
Division of Water Resources. In fact, I think I was one of the 
first engineers to be employed by the division at that time, 
following World War II. So, it was interesting to watch all these 
things develop during my tenure . 

Chall: You spanned the history of it, actually then through Governor 
[Earl] Warren's 

Gianelli: Yes, Governor Warren was governor at the time that I joined the 
state service, and then Goodwin Knight following that. And I 
had not quite a year and a half with Governor Edmund G. Pat Brown, 
or Pat Brown, Sr. So, I served under those three governors. In 
fact, I guess the only governor that I haven't served under was 
Jerry Brown, in the water resources area. 

Chall: And there were many changes that came about during that period. 

Gianelli: Yes. The old Division of Water Resources was a rather small 

organization. It was a part of the Department of Public Works in 
the state of California. The big change came in 1955, when the 
legislature created a separate Department of Water Resources, and 
that change was effective, as I recall, in July of 1956. 

At that time, Mr. Harvey Banks, who was state engineer, was then 
moved into the position of director of Water Resources, and that 
is the big change, and that is the time directly preceding the 
initiation of the State Water Project, which involved very great 
changes in the department. 

Chall: There was a lot of controversy. It seemed to me it took a couple 
of years before you could get the act passed so that you could go 
from a division to a department. 



Gianelli: Yes, it was highly controversial, and as I recall, interestingly 
enough, I think Caspar Weinberger, who was then a state assembly 
man from San Francisco was one of the authors, or one of the prime 
movers, in terms of creating the Department of Water Resources. 
And that's where I first became acquainted with Mr. Weinberger. 

And there was a lot of controversy as to how it should be created. 
There was a lot of argument as to the role of the department 
versus the California Water Commission. There were some that felt 
that the California Water Commission should be the strong agency 
in the government, and the department should be sort of a technical 
agency . 

The way the compromise was finally worked was, the department was 
the strong agency, with the commission sort of in an advisory 
capacity with certain independent functions, but by and large, it 
served as an advisory group to the director of Water Resources. 

Chall: In your opinion, did that work out well, considering that you were 
then in the building phase over those years building the water 
project? 

Gianelli: I think so. I think the old Division of Water Resources would not 
have been an adequate organization, under public works, to carry 
on the construction of the State Water Project. So, I think it 
was appropriate to create a new department, a Department of Water 
Resources, give it a cabinet status, and give it the kind of posture 
that was needed in order to carry out the water program that was 
then envisioned. 



The Staff 



Chall: You asked Governor Reagan to have a choice of your deputies, and 
as I recall, you appointed two men who had been with the depart 
ment for quite a while, in top positions. Golze and Teerink. You 
had known them, I guess. 

Gianelli: Yes. I had a fundamental change in the organization when I rejoined 
the department. When I came in, the organization itself was run 
by a chief engineer, who at that time was Mr. Alfred Golze, and 
the deputies that the department had, the two deputies I guess at 
that time, or perhps three, were used not in a line relationship. 

So, as part of our economy move, it occurred to me that if I could 
get the appropriate people, that I could use the deputies in a line 
capacity, and I could do away with the chief engineer. And so 
that's what I did. I created what we call the directorate, with 
the three deputy directors. And Mr. Golze, who was in the chief 



Gianelli: engineer spot, filled one of them. Mr. Teerink, who was then in 

the department still as a civil servant, filled another one. Then 
I brought in Mr. Robert Eiland on the outside, who I know 
personally, and who had worked for the department many years before, 
But at the time I asked him to come back into service, he was in 
the private sector. 

So, basically what I did was to bring in three engineers two of 
them I was well acquainted with and I reorganized the department, 
and gave each one of them an area of responsibility, a line area 
of responsibility, and they reported directly to me. And so that 
was a major change that I made in the organization when I came 
in as director. 

Chall: Do you think you were able to do that because you were an engineer? 

Gianelli: Yes, I think so. I think that the responsibilities that I gave 
the deputies, a lot of them were engineering matters, and because 
I was an engineer, I thought that we would be able to make this 
change. Although I think that subsequent appointments have demon 
strated that you can still have a director who is not an engineer, 
so long as you have some qualified people underneath him, some 
of whom needed to be engineers. 

Chall: Right. There was a great deal of work that you would have to do 
besides engineering, just solely administrative. How did you 
carry out those tasks? 

Gianelli: I used the three deputies to carry out the line responsibilitites . 
The way we operated was sort of as a team arrangement. I did 
most of the legislative work; I did most of the work with outside 
agencies, with the federal government, and tasks of that sort. 
So, I used my role as sort of an overseer role, and to carry out 
some of the things wich I felt were extra sensitive, which needed 
my personal attention. 

I felt that it worked out very well. I used Mr. Eiland, who, 
while he was an engineer, had also had a lot of experience in 
administrative and financial matters. So, I used him as my deputy 
to work in those areas, and Mr. Golze and Mr. Teerink were largely 
confined to the engineering areas. 

Mr. Golze, I gave him the basic responsibility for all matters 
relating to the construction and design of the State Water Project, 
and Mr. Teerink, I gave him all the responsibilities with respect 
to the planning, supervision of dam safety, and other functions 
which were not specifically related to the construction of the 
State Water Project. Mr. Eiland had the administrative matters, 
plus the financial consultant, and activities of that sort. 



Chall: It was really a juggling act from the very start. It seems to me 
that there were so many problems to handle at any time, especially 
when it was just starting, and later as you were continuing the 
construction. The finances, the liaison work with the federal 
government, getting out the budgets, and all that, seem to have 
required three balls in the air, maybe four. 

Gianelli: One of the things that I knew, by virtue of my exposure in the 

private sector, and by virtue of my past experience in the depart 
ment, was that the water project was under funded, and that the 
Pat Brown administration had not solved that problem, had not 
really addressed it, because they were interested in getting the 
project going, which they did. 

So, one of the things that I felt we needed right off the bat, 
soon as I came in, would be an unbiased look at where the project 
stood from the financing standpoint. And for someone to take 
a look at that, and make some recommendations to our administra 
tion. 

That followed. One of the first things that I did was to get the 
governor to appoint a special task force of knowledgeable people 
to look at the water project, and to give him a report. I'm 
sure you'll be asking questions with respect to that. [The Task 
Force on Water Resources] 

Chall: In dealing administratively, you had over you which was not so 
when you left state office a Resources secretary head of the 
Resources Agency. 

Gianelli: Yes, Mr. [Norman] Livermore. 

Chall: Did you have, generally, access to the governor, or did you have 
to go through Mr. Livermore when you wanted to deal with the 
finances, or any other problems that were constantly coming up? 

Gianelli: I had the ability to deal directly with the governor, and to deal 
with the other state agencies, like the Department of Finance, 
directly, which I did. When we came in, the job of Resources 
secretary was largely a coordination effort, and a communication 
link with the governor's office. It did not have a large staff. 

In subsequent years, that staff and the Resources Agency was 
built up, and they assumed more responsibilities, but by and large, 
Mr. Livermore was there to coordinate the activity of the various 
departments under him. He is the one that attended most of the 
cabinet meetings, but I did have access to the governor, and that 
was one of the things that was understood when I took the position, 
that is, that I would have access to the governor, and I did. 



8 



Chall: And when you wanted to see him, did you have to go through some 

of his staff people first, or could you just walk into his office? 

Gianelli: I generally worked through the executive secretary and the cabinet 
secretary at that time. We had access to them, and that's normally 
the way it would take place. The cabinet secretary would be the 
one that would arrange meetings for the various department direc 
tors to meet with the governor. So, he was the primary person 
that I would deal with in terms of my contacts with the governor. 

Chall: Is that Mr. [Win] Adams most of the time? 

Gianelli: It varied. First, let's see, it was Mr. [Phillip] Battaglia, 
who came in and lasted about a year. Then it was Mr. [William] 
Clark, and then it was Mr. [Edwin] Meese. They were executive 
secretaries. During a portion of that period there was a cabinet 
secretary, too, and Mr. Adams came in, as I recall, under 
Mr. Meese in the last two or three years of the administration, 
and acted as the cabinet secretary. 

I think the people that I indicated to you first were executive 
secretaries, and then there were cabinet secretaries. As a matter 
of fact, I think Mr. Clark was cabinet secretary when Mr. Battaglia 
was executive secretary, and I think there was some shifting of 
the people. But by and large, it was either the executive secre 
tary, or the cabinet secretary, depending who it was.* 

Chall: So, you didn't feel it necessary to contact Mr. Livermore first? 

Gianelli: I always kept him informed, and once in a while he would go over 
with me in those conversations, other times I would go separately. 
So, there was a relationship, and he was pretty well informed on 
those things whenever we were going over there. 



The Role of the California Water Commission 



Chall: I read quite a bit of your [department] material in the Water 
Resources Archives at UC Berkeley and it seemed to me that you 



*The reader may want to check the list at the back of the volume 
to learn of interviews done with these and other members of Governor 
Reagan's administration. 



Chall: 



Gianelli: 



kept your water commission quite well informed of what you were 
doing at all times. 

My view was to use the water commission very largely as the agency 
which would have contact with the public. In other words, on 
controversial subjects, they would hold hearings, and would provide 
recommendations to me. But they would be the forum by which the 
public could come in and make presentatations on particular subjects. 
And so I used them very extensively that way. 

Also, at the time I was director, I felt that there was a conflict 
between the director, as the builder of the State Water Project, 
and the director, as representing all of the agencies in the state, 
say for federal flood control projects. Because it seemed to me, 
where I was a competitor in part, as the constructor of the water 
project, I was also a competitor with other public agencies in 
California for federal funds. 

So I didn't want to be accused of trying to influence the appropria 
tions, of the State Water Project, when there were many other 
projects in California that needed work. So, one of the first 
things I did was to assign administratively, the responsibility 
for appearances before Congress on appropriations for flood control 
projects to the water commission. 

Then later on, that was firmed up by way of legislation. So that 
was one of the functions which they performed very well, and which 
I felt was appropriate, because I was getting funds for Oroville 
Dam from the government at that time, for the State Water Project, 
and I felt that would put me in a conflicting position asking 
for funds for Oroville Dam for flood control, while at the same 
time I was supposed to represent other agencies who had flood 
control projects in California. 

The California Water Commission also had the responsibility to 
approve land aquisition by the department and later on was given 
the responsibility of naming water project features. 

So it worked out very well. I was very pleased with that. In fact, 
I was very pleased with the water commission. One other item might 
be of interest to you. While I didn't initiate the appointments 
to the water commission, the governor's office gave me an oppor 
tunity to comment on his prospective appointments. On one or two 
occasions he indicated to me that he intended to appoint someone 
that I felt was not satisfactory. I felt there were biases by 
virtue of some past exposure that I had. As a result he very 
graciously did not recommend them for appointment, and so finally 
we ended with a commission, that I felt was very objective, and 
very good, and very unbiased. And that was one of my great concerns, 



10 



Chall: Who wrote all those fine, detailed reports to the water commission? 
Did you have somebody who was helping you do that? 

Gianelli: Yes, that was done largely through my public information office. 
But one of the things that I insisted on was, of course, reviewing 
them prior to the time that they were finalized. Very often, I 
would give them the subject matter that I wanted them to include. 

If there was some matter which I felt that I wanted the commission 
to be informed of, that maybe the staff wasn't aware of, I made 
certain that the staff included it, and that they got whatever 
information they needed in the way of back up in order to make a 
presentation to the commission. 

So that I spent a lot of time on those, because I viewed my rela 
tionship with the commission as a very important one. And I viewed 
my reports to the commission as sort of a progress report on what 
was happening as far as the department was concerned. I think it 
worked out quite well that way. 

Chall: Were you close to any of the members of the commission whom you 

would see between meetings to go over problems with, an agenda, or 
whatever? 



Gianelli: One of the members of the commission was Clair Hill, who was an 
engineer from Redding, who I knew a long time before. In fact, 
Clair Hill, as I recall, was on the old State Water Board back in 
the 1940s. 

Chall: He did go back a long way, didn't he? 

Gianelli: He went back a long way, so I knew him professionally, and would 

of course see him frequently. He was also, as I recall, the chair 
man of the task force that I had the governor appoint. So, I 
had probably an extra close relationship with him. 

Then during the years, I developed a close relationship with the 
chairman, which was Mr. Jack Chrisman, from Visalia, who originally 
had been appointed by Governor Brown, Sr. , and he was the only 
appointee on the commission that was carried over by Governor 
Reagan. I was very pleased at that, because he was very helpful, 
very competent, and a very good chairman. 

I would say, those two I worked much closer with on the commission 
than the other members, although I would see the other memebers 
from time to time, and of course always during commission meetings. 

Chall: I understand that you were quite close, as you would be, to all the 
water agency people those that we see represented in Western Water 



11 



Chall: 

Gianelli : 

Chall : 
Gianelli: 



Chall: 



Gianelli: 



Chall : 
Gianelli: 

Chall : 



Gianelli: 



News, one year to the other. And that they even provided you with 
an automobile and a chauffeur during your term. Do you recall 
that? 



No, that's not true at all. 
all. No. 



No, that certainly isn't correct at 



I just wanted to be sure I got that straight. 

[chuckles] No, no, no. No, I had a state car just like everybody 
else did. One of the things that I used to do was to do a lot of 
my work when I was traveling from place to place in the state car. 
In fact, I even had a little light installed in the dashboard so 
I could read after dark when I was traveling from point to point. 
So I did have a person who drove me on many occasions, so that 
I could do a lot of my homework in the car, which I did very exten 
sively. 

That was a state car, that was a state employee, a lot of others 
used the state government cars at that time. 

It was claimed that you had a Cadillac, and a driver given to you 
by the water agencies. 

[laughs] Well, that's certainly not true. My first car was a Ford, 
which Mr. Warne had used, that I'd obtained. I kept it, as I 
recall, for two or three years. Then they had an arrangement where 
the directors were able to get a Highway Patrol car, which didn't 
have all of the Highway Patrol things on it, but was obtained 
under the contracts with the Highway Patrol. I think most of the 
directors had those. Those are the only cars I had. 

Okay. Just wanted to clear it up. 



That's very important, 
go- 



It's interesting how rumors like that can 



That's what we try to clarify by oral history. All right. I think 
we'll just get into some of the major controversies that you had 
as director, or problems, and then we'll touch on some other 
matters as we go along. One other question that I have about the 
organization, however, and that is, how did you deal with your 
staff? William Warne had a meeting once a week with all his prin 
cipal staff people I think at seven-thirty every Monday morning, 
something like that and had very careful charts to delineate 
where things were going, and a system called PROMPT to help keep 
track of the movement of the project. What did you do? 

We had what I call a directorate meeting. I think I indicated to 
you earlier that by virtue of my appointing the three deputy 



12 



Gianelli: directors, we formed a team of four of us. But I augmented that 

team, that directorate, with a chief counsel, and then I generally 
had the public information officer, and maybe the financial advisor 
in at that time, too. 

So, we did have a meeting, a weekly meeting. As I recall, it 
was eight o'clock every Monday morning it wasn't seven-thirty, 
it was eight o'clock and perhaps met for a couple of hours 
talking about the past week, talking about the coming week, and 
at that time exchanging information back and forth which was 
important for all of us to be informed on. 

So, basically, organizationally, that's the way I operated, 
although we had numerous briefings during the week in which certain 
members of the staff were involved on certain subjects. Very 
often, the deputies, or some of the deputies, would be involved 
with those brief ings, depending upon what the subject was. That's 
basically the way I operated. 

Chall: You hadn't had any major administrative experience with a large 
staff prior to this time? 

Gianelli: Only within the Division of Water Resources originally, and then 

a little later a little bit with the Department of Water Resources. 
But, for example, I was in charge of water-mastering, had all the 
water-masters early in my career. And so that involved a dozen 
or so employees. Then, when I became the acting district engineer 
of the southern district, southern California, before I left state 
service, there must have been a hundred or so more people there. 
So, I had some administrative experience, primarily within state 
government . 

Chall: And financing experience? 



Solving the Financial Problems in Order to Complete the State 
Water Project 



Gianelli: Financing, very little, and that was one of the things I was most 
concerned about. We had a financial advisor, and then the state, 
at that time, had a financial consultant, which I retained. 

Chall: Dillon Read? 

Gianelli: Dillon Read in New York. They were with the project since its 
inception, so I continued to use them as financial consultant. 
Then I had my own person on the staff, senior advisor, Mr. John 
Hunt, who was the department's financial advisor, who interfaced 



13 



Gianelli: with Dillon Read. All that came under Mr. Eiland, who had had 
some experience because he had worked with some construction 
agencies, and had had more financial experience than I had. And 
that was the chain of command in that particular area. 

Chall: I see. Now, when you did get in there, as you say, Reagan himself, 
and certainly you, and I'm sure some in the department Mr. Hunt, 
in his final report to Mr. Warne thought that there would be 
financial problems down the road. So, you developed a task force 
to survey and evaluate the project. Can you tell me, not neces 
sarily in detail, what their recommendations were? How they 
helped you? 

Gianelli: This is one of the things that I felt the governor needed very 

badly, would be to have an independent analysis of exactly where 
the project stood. Because I, along with many others, knew that 
the project was under financed, and that something would have to 
be done to take care of that shortfall prior to its completion, 
if it were going to be completed successfully. 

And I would say the shortfall was no one's particular responsibi 
lity; it's the way the Burns-Porter Act developed. And it was, 
as I recall in the discussions with Edmund Brown, Sr. It was 
his judgement that $1.75 billion general obligation bond issue 
was about all that could be sold to the public, and so that 
provided a limit . 

In addition, as the Burns-Porter Act went through the legislature, 
there was some erosion of that by virtue of the Davis-Grunsky Act 
the earmarking of a certain amount of it for the Davis-Grunsky 
Act, and certain offset provisions. Also there was no amount 
provided for cost escalation in the project costs as it went 
ahead. 

Again, that was done intentionally because, I think, for two 
reasons. As I recall, Governor Brown, Sr. and the department 
people, at the earlier stages, felt that no one could tell what 
the escalation would be over the period of the construction of 
the project. And again, if you'd put in some escalation, it would 
have run the cost of the bond issue much over what the judgment 
was of the then Governor Edmund Brown Sr. on what the public 
might be able to vote for successfully. 

So there was no doubt about it in my mind that we had a great 
problem, particularly in the financial area. And there were also 
some difficult engineering problems. One of the big arguments 
when I came in was just starting to develop. That was how should 
the state get the water over the Tehachapi mountains. There were 
arguments with the Metropolitan Water District as to how that 
should be done. 



14 



Gianelli: So, I knew that there were both very difficult engineering problems 
that still had to be faced by the department, as well as the finan 
cial problem. The assignment of the task force mission was prima 
rily to look at the problem of financing, but also to give us any 
other views they had with respect to the project as they looked 
at that. 

And that's why I. asked the governor to put on this task force 

a variety of people who had expertise in a variety of professions. 

H 

Gianelli: We needed to look at the project in depth. We wanted them to give 
us some specific recommendations. I'd say that worked out very 
well, because, as 1 recall, only a few months after we were in 
office, I think still the spring of 1967, the task force came 
up with a report and pointed out that we were going to be some 
$300 million shy, I think by 1972, and $600 million shy by 198Q 
or whatever the date was, to complete the project as it was then 
started. 

So then I had the problem of, "What do we do about it?" and that 
leads into a number of other things which I'm sure you'll be 
interested to ask questions on. 

Chall: All right. You're talking about finishing it as it was designed. 
In that $600 million figure, you were considering also the Drain 
and Peripheral Canal? 

Gianelli: Certain elements, yes. There were certain contributions made 

for both of those items as I recall, in the $600 million deficit, 
because they were originally projected to be completed by the 
1980s, so they were included in it. I don't believe they were 
both included in the 1972 shortfall, because I think the Drain 
was estimated to come on at a later date, and I think the 
Peripheral Canal was , too . 

At any rate, the six hundred did include, as I recall, those items. 
The three hundred, that we had to face by 1972, I think were not. 

Chall: You then, and I guess the task force also, thought you might delay 
some construction like the Eel River and the Peripheral Canal. 

Gianelli: The Eel River came along later, and that's another subject. You 
see, the state had contracts with all the water service agencies, 
and the financial integrity of the water project depended upon 
the state delivering water to those water supply contractors, so 
they could make a payment to the state, so the state could retire 
their bonds . 



15 



Gianelli: So, my concern was to complete those features which would protect 

the integrity of the State Water Project. Others could be delayed 
for a later date, and also, I felt that some of the facilities 
could be staged. In other words, you wouldn't need the full water 
requirements right away so you could add on features later. 

But my number one concern was to build those things which were 
necessary to supply water to the thirty-one water supply contrac 
tors, to maintain the financial integrity of the project. Because 
every administration that had been involved with the project 
indicated that it would be so designed so as not to be a lien on 
the general tax base of the state. 

What that meant was that you had to so design the project that 
basically the revenues from it, water and power primarily, would 
pay the cost of debt service, and so forth. And so this was of 
great concern to me, and this is the thing we focused an awful 
lot of attention on early in our time. 

When our administration came into office, only a small part of 
the State Water Project was under construction. It is interesting 
to note that during my tenure as director, all of the State Water 
Project facilities from Oroville Dam on the Feather to Ferris Dam 
on Riverside County were completed and placed in operation. As 
I recall, we expended over $1% billion during this period. That 
is why project financing was so important. 

Chall: In order to get some of that funding, you either had to cut back, 
or stage, or delay, or you had to get money someplace else, or 
you had to do a little of each, I suppose. 

Gianelli: Yes, but we still had a chance to dictate which parts of the 
project would be constructed or staged. 

Chall: At the same time, as I understand it, there was some concern that 
the State Water Project at least on the part of Alan Post, and 
I'm sure others that the State Water Project would be monopolizing 
the state's bonding capacity. 

Gianelli: That's correct. 

Chall: If you issued more bonds, you'd have to cut somewhere else if you 
didn't cut the water project. So, I suppose there was quite a lot 
of controversy over just what to do about raising funds. 

Gianelli: Yes. Yes, there was. 

Chall: How did you deal with that through the legislature and with the 
Department of Finance? 



16 



Gianelli: The way I dealt with the overall problem was that after we received 
the task force report, which identified the shortfalls of money at 
certain dates, I then asked the staff to come up with certain 
recommendations with respect to how the project might be staged. 

And so we did. I have these several volumes here which include 
the task force report, the staff's response, and then finally 
what we did about those things. And what we did basically was 
a combination of things. 

We first of all scaled back some of the, you might say, the more 
luxurious parts of the project which were not absolutely necessary 
for the operation of the project. 

Chall: What might those have been? 

Gianelli: Well, for example, there were some very elaborate visitor centers 
proposed; there were some very elaborate recreation facilities. 
Some of the installations were gold plated, at least I felt. So, 
we looked at all of those things with the idea of scaling them 
back to the absolute minimum to perform the services which they 
had to perform. 

We were also able to stage some of the facilities. For example, 
as I recall, we didn't have to put all of the pumps in the 
Sacramento-San Joaquin Delta at that time, because it would be 
quite a number of years before the full quantity of water was 
needed. We also limited some of the capacity of the pumps at the 
Tehachapi mountains, for the same reason. And some of the siphons 
as you get south of the mountains, where there were two siphons 
we constructed one of them. 

So, we did a number of things which, for example, delayed parts of 
the project which ultimately would have to be built, but which 
were not needed right away. Because we viewed our financial 
problem as one that would occur in the next ten or fifteen years 
to complete the basic project. And we felt if we could do that, 
then we could pick up some of these other things later. 



The Tidelands Oil Funds 



Gianelli: Originally, it was intended that all of the tidelands oil funds 
would be dedicated to the water project. And during the Edmund 
G. Brown administration, they, I think, sponsored legislation the 
legislature went along with it that eliminated all of the tide- 
lands oil funds, except, as I recall, $11 million a year. So, 



17 



Gianelli: one of the things that I did, then, with the governor's support, 
was to go back to the legislature and get, as I recall, an addi 
tional $14 million a year contributed from the tidelands oil funds, 
which made up a total of $25 million annually. 

So that, combined with the austerity measures, would allow us to 
get through, as I recall, 1972, which is a key date. 1972 and 
1973 were the dates when we would complete the project all the way 
into southern California, and that was my primary concern. So, 
we were able to both cut down parts of the project that could be 
deferred, and we did get additional financing largely through the 
legislature, with the governor's support, to give us additional 
funding to complete the initial features of the project. 

Chall : But you also did, with the tidelands oil funds, you put them into 
the construction fund, and waived, for a year or two, the offset 
feature . 

Gianelli: That's correct. 

Chall: That's very interesting. The offset, or set aside, or whatever 
it's called that's important. 

Gianelli: What you're referring to is that the legislation as it went 

through, the Burns-Porter Act, provided that to the extent the 
Department used tidelands oil funds, these funds would offset a 
similar amount of the one and three-quarter billion bond issue 
for future additions to the Project. And I'd say that was done 
largely at the insistence of Senator George Miller, from Contra 
Costa County. 

Senator Miller was concerned because of his interest in the Delta. 
And he was fearful that if you didn't provide for future additions 
to the project, the project, in order to meet its contractual 
commitments, might take too much water out of the Delta, and harm 
certainly his constituency, and the Contra Costa Bay Area. George 
Miller had two concerns. One of them was the offset provisions. 
The other one was that we build the canal that goes from the Delta 
to San Luis extra large to take care of the flood flows. George 
Miller was responsible for those two things, I know personally 
from my own exposure to them and my own dealings with them. 

Chall: So, even though he opposed you, he made absolutely sure that the 
water project was going to be an effective one. 

Gianelli: Right. You're right. And would be of less detriment to them; 
that was his theory. See, he felt that if there wasn't enough 
water, we might try to let the salt come in farther, so that would 



18 



Gianelli: hurt his people. And he felt that if the canal wasn't big enough, 
that then we would take water out during the dry part of the year, 
when they needed it in Contra Costa County . That's why he insisted 
on that thing. 

So those two provisions were very important to him and to his cons 
tituents. But it's interesting now how people from that area have 
twisted that around. A lot of people in that area are supporters 
of Wild and Scenic Rivers. They're against going to the north 
coast. And that's what George Miller was for, was for diversion 
of the north coast. It's interesting. 

So that was one of the background reasons why the offset was set 
in there, and you're correct, we did get some waiver of that. And 
as a matter of fact, I think to this day, there is still some of 
the $1.75 billion bond issue that has been set aside and has not 
been used for augmenting the supplies of the State Water Project. 
My recollection is that it's about $165 million. 

Chall: Yes, it's between $165 and $168 million. Depends upon what you 
happen to be reading. But, had the project had enough funds, I 
guess it was expected that the set-aside funds would pay for all 
the augmentation coming up, which it never will, of course. 

Gianelli: Well, the $160 now will not begin to meet what's probably required 
in the way of shortfalls, as far as the project yield is concerned, 
the 4.4 million acre-feet that's ultimately going to be required 
under the contracts. 

Chall: That was an interesting feature of the Burns-Porter Act. Did 

it take a great deal of work with the legislature to do away with 
that offset provision? 

Gianelli: Well, yes. One of the key people, of course, was Senator Gordon 

Cologne. Senator Gordon Cologne was the chairman, as I recall, of 
the Senate Water Committee. But more than that, Senator Cologne 
represented Riverside County, and Riverside County was the tail end 
of the State Water Project. Ferris Reservoir was to be constructed 
in Riverside County. 

I made it very clear that I was not going to go ahead to start the 
construction of Perris Reservoir until I could see enough funds 
available to finish it if I started it. He was originally very 
critical of me for taking that position, because of the adverse 
impact on his constituents. But I felt I had to unless I could get 
additional funds, because I didn't want to start a facility that 
couldn't be finished. 

So, finally then, after we got over the wrangling back and forth, 
and some of the accusations he made [laughs] about what we were 



19 



Gianelli: 



Chall : 



doing, we did work together very closely. And, as I said, he was 
very much responsible for carrying that ball through the legis 
lature, getting us additionl tideland oil fund money for use in 
completing the project. 



There was quite a bit of criticism, I guess, 
from education. 



of taking it away 



Gianelli: Oh, yes, there was a great argument at that time primarily 

between education and the water people as to who would get it. 
Originally, when we didn't know, back in the sixties, what might 
be in the tideland oil fund, Governor Brown, I can remember his 
s-tatement during his inauguration, said, "We ought to take the 
money that we secure from one resource, oil, and use it to 
develop another resource, water." 

Chall: Exactly. He did say that. 

Gianelli: It was contemplated that all of it would be used. Then, as they 
got into the tideland thing, it was obvious that it was going to 
generate much more funds than originally contemplated, and that's 
when, I think, during the senior Brown administration I wasn't 
in the state government, but my recollection is that they decided 
to limit what the State Water Project could get, and that the 
rest would go to education. 

And there were a few other people that had a tap on that tidelands 
oil fund. I don't recall what they were; they were minor amounts, 
But education was the biggy. 

Chall: Yes. And William Warne did have his disagreement with the Brown 
administration over that, but they said, "Eventually, you'll get 
the money, so let's put it into education now, because that's 
where we need it." So, eventually, of course, you did. 

Gianelli: We got it back. At least, we got part of it back. 

Chall: Yes. And then probably the most creative thing you did was to 

do away for a while with the offset provision because that really 
would tie up a lot of money. 

fi 

Chall: I have a question about the tidelands oil money which I still 

don't entirely understand. I always feel that if I don't under 
stand it, somebody doing research twenty years from now may not 
understand it either. I'm going to read to you from a publica 
tion which I know you are familiar with Western Water published 
by the Western Water Education Foundation. 

Gianelli: I'm president of that organization, now. 



20 



Chall: They do a good job of education on the subject of water. 
Gianelli: They try to balance the issues. 

Chall: This is about the tidelands oil money and the financing of the 
State Water Project. "The portion of tidelands oil money appro 
priated for the construction of the State Water Project is 
deposited in a fund called the California Water Fund. Under the 
Burns-Porter Act, the state Department of Water Resources is 
required to reimburse-; the California Water Fund for money 
appropriated (presently about $25 million a year) . Today the 
tidelands oil repayment obligation totals $437 million. Public 
agencies purchasing water from the State Water Project eventually 
will repay tidelands' oil funds with interest. Reimbursement of 
the water fund is made from monies recieved from the sale of water 
and power after all bond, operation, and maintenance expenses 
have been met."* 

What I don't understand I can understand construction, and I 
can understand paying back the sale of the bonds, but operation 
and maintenance expenses I thought was separate, because that 
goes on forever. 

Gianelli: No, let me see if I can help you a little bit. The income that 
the state gets from the sale of water and power has certain 
priorities attached to the use of that money. The first one 
is operation and maintenance, the theory being, you've got to 
operate it and maintain it if you don't do anything else. I'm 
not sure of all these priorities, but I'm just giving you the 
concept. 

Then I think the next one maybe is repayment of bond obligations; 
that's the next call on those monies, and so forth. Somewhere 
down the line, your bonds that you've issued will start to be 
paid off, and at that time, the priority is such that then you'll 
have to start to repay the general fund for the tideland oil 
monies that have been used. 

In other words, the theory being that they didn't have to be 
repaid right away, but that they would have to be repaid when you 
developed sufficient revenues to repay them. So, it's contem 
plated, as I recall, that the repayment of those will take place, 



*Rita Schmidt Sudman, "Cost Sharing; The State Water Project," 
Western Water, November /December 1983, p. 6. 



21 



Gianelli: and phase in, with the repayment of the revenue bonds, which are 
of a higher priority. In other words, it eventually has to be 
paid, but it doesn't have to be paid right now. That's what 
it's trying to say right there. 

Chall: Maintenance and operation, of course, is continual, and so that 
comes out of 

Gianelli: The revenues we get. Oh, yes, that's the first priority. Yes, 
absolutely. 

Chall: These bonds, I think, what, many of them fifty-year 

Gianelli: Forty -year bonds, I think by and large, forty and maybe some 
fifty. 

Chall: And after that the money will just come out of 

Gianelli: After that, then we pay this $400 million you see, that we're 
talking about. 

Chall: That's for some other day. 
Gianelli: That will be for tomorrow. 

Chall: For tomorrow. For wherever they're going to get the rest of the 
water to fill in the contracted obligation. 

Gianelli: Sure, at that time, maybe they'll have to be using it, a lot of 

it for capital improvement, as you point out that $165 million is 
not going to be adequate. So, either they'll have to sell 
additional bonds between now and then, or wait until those bonds 
are retired, and you pay off the water fund, and then you can 
use the surplus . 

In other words, you won't drop the price down, you'll keep the 
price up, just like we're doing on our toll bridges. Originally, 
the theory was that you'd pay off the toll bridges, and they'd 
be free. And you know what's happened; they decided to use the 
revenue on a continual basis, like they did for the Bay bridge, 
and they're using it for highways or whatever else, now. 

Chall: They even increased it. But presumably the water users are 
paying for their project. 

Gianelli: They will pay for everything except those things which the legis 
lature's designated to be paid for from the general fund, like 
some of the recreation, fishing enhancement. 

I* 



22 



The Electric Power Contracts 



Gianelli: Yes. The other thing we did, which we'll probably get to later, 
was 

Chall: You may as well get to it before I do. I have no objection. 

Gianelli: Well, the other part of the ultimate package of financing was 
to generate the ability to sell additional bonds. And we were 
able to do that; we were able to sell additional bonds by 
virtue of a unique arrangement we worked out at Oroville for the 
disposition of Oroville-Thermalito power. We subsequently did 
it in southern California with connection to some of the power 
that was generated down there. 

Those additional revenue bond issues generated additional funds 
for the State Water Project. 

Chall: My understanding of the Oroville-Thermalito power arrangement was 
that it was already set to go before Mr. Warne left office. 

Gianelli: There were discussions about it, but it wasn't set because I 

think most of the negotiations took place during the first year 
or two of our administration. 

Chall: I see. 

Gianelli: But I think it was hoped that that could be worked out. But 
we're the ones that finally negotiated the final arrangement. 

Chall: The arrangement had to be worked out with all the private power 
companies . 

Gianelli: Power utilities in the state. 

Chall: Did that entail also some acceptance by the federal government, 
because they were utilities? Was there anything involved with 
federal power? 

Gianelli: We had to have a federal power license in Oroville, and that was 
quite a problem, getting a federal power license. And I can't 
recall all of the issues that were involved in securing that 
license, but I know that it took a very long time. 

And we had to have that license as I recall, before the bond 
people indicated we were able to market our bonds. So there 
was a deep involvement that involved the Federal Power Commission 
and the issuance of the federal power license for the Oroville- 
Thermalito complex. 



23 



Gianelli: One of those problems was that we had to have the time of the 

federal power license coincide with the length of the bonds the 
time period for the pay-out of the bonds. There was a ten-year 
gap we had to work out with the Federal Power Commission so that 
we could make sure that the federal power license would go long 
enough so that the Oroville-Thermalito revenue bonds could be 
paid off, and that was a difficult period. 

Chall: I think something like 1983 or '84 

Gianelli: Things have happened subsequent to that arrangement. Under 

the Jerry Brown administration, they terminated the contract that 
originally was entered into, then resold it for a higher value 
to, I think, Southern California Edison. 

But there was a subsequent development with respect to Oroville- 
Thermalito power, but the point that I was concerned with, and 
the point that was important to us was that we. be able to use 
the power contract to generate as I recall, another $230 million 
or $240 million of revenue bond issue capability to help complete 
some of the portions of the project which were still coming along 
later. 

Chall: How does it work? What was the contract, as a matter of fact? 

These companies say that they will take the electricity, and sell 
it back to you at a certain rate? 

Gianelli: Well, no. Basically it was that the three private power companies 
would agree to get all the power that we generated from the 
Oroville-Thermalito complex. In return for that, they would pay 
the state somewhere around $14 million a year for that power out 
put. 

We took that contract then, with that payment, and converted it 
to the revenue bond issue. The reason that was necessary was 
because during the operation of a project, you have dry years and 
you have wet years. And so they were taking a chance that the 
whole thing would average out so that they could get enough 
revenue from the power that they obtained to make this $14 million 
payment to the state every year, which I think probably has worked 
out, or did work out. 

Chall: What about the power that was needed to get the water over the 
Tehachapis? 

Gianelli: Then we had a power suppliers' contract. The power suppliers' 

contract was entered into between the three private utilities and 
the city of Los Angeles Department of Water and Power. And 
they agreed to furnish power to the State Water Project at a 
certain price, under certain conditions, under a certain demand. 



24 



Gianelli: Now, the reason we worked out that arrangement was that the 
Oroville-Thermalito power could be developed to meet peaking 
requirements of these agencies, these private power companies. 
Because the great demand at that time was for peaking power; 
it was worth a very great deal more to them than just base load. 
But the pumping requirements for the project we could work out 
and take off-peak power. So, it worked out from a financial 
standpoint to sell the power we generated, which was largely on- 
peak power, to the power companies we could get more for it 
and then to buy from these same utilities, plus the city of 
Los Angeles, off-peak power, to run the pumps. And that was the 
arrangement that we had. 

Chall: Takes quite a bit of arranging, doesn't it? 

Gianelli: That's right. And it worked out financially because of the 

difference of value in the kind of power that you develop and 
in the kind of power you give. 

Chall: That is very expensive, that power bill. 

Gianelli: Well, it is now. The original arrangement with the power sup 
pliers, as I recall, was that they guaranteed the price, up to 
a certain period, and I'm not clear now exactly what that period 
was. It seems to me it might have been around 1983. 

Chall: That's probably the 1983 that I'm thinking of. 

Gianelli: Yes, it could have been 1983, could have been '83. They guaran 
teed the price of power. Then, subsequent to that, the price 
of power went up very dramatically. Of course, we had a lot of 
problems prior to that time with respect to the cost of power. 

Chall: I should say. In the early seventies, when the power rates went 
up quite high I mean, it was a very great move up because of 
the embargo then what happened? Did they retain this same 
contract? 



Gianelli: Yes; the contract, as I say, provided for power to be provided 
by the power suppliers at a certain rate up until 1983. As a 
matter of fact, I wasn't director during this latter period, but 
my recollection is that those private utilities and the city of 
Los Angeles tried very hard to get out of that obligation. But 
they could not, and so it cost them a very great deal to carry 
out the obligations of the contract. 



25 



Chall: Also, later on, one of your problems was to raise the interest 
rate. That required a ballot measure.* What happened to the 
contracts that had already been signed in 1961 for the repayment 
of transportation and maintenance, and construction? When the 
interest rates went up, then in about 1972, did you have to change 
the contracts in any way? 

Gianelli: No, the contract provided that the water users, and the power 

users, on a different basis, would have to pay whatever cost the 
department incurred to build the project. And as interest rates 
went up, then that meant that on new bond issues, there would be a 
higher debt payment to make, and so that was reflected in the 
amount which the department collected from those thirty-one water 
supply contractors. 

Chall: So their rates went up quite a bit, too, over the years. 

Gianelli: Yes. The capital investment had been made, and those bonds had 
been sold, so they had a very favorable interest rate. We had 
some in the early part of our regime that went for, I think, 
three or four percent. 

Chall: They were going for under five, yes. 

Gianelli: And even when we finished the basic project in 1973, the meld 

of all those interest rates was, as I recall, still in the neigh 
borhood of four something. 

Chall: Is that so? 

Gianelli: Very low. Because it had some very low rates, and they had not 
gone up by the time we sold the basic bond issue. The bond 
issues that came along later, like the revenue bonds issued, were 
higher. Some of those, if you were going to sell them today, 
would be marketed at a much higher rate. 

As I remember, we had to go to the legislature, because I think 
there was a six or seven percent limit on what the state could 
pay, and we had to get that raised, which we did through, as you 
pointed out, a legislative measure, and a subsequent ballot 
measure . 



*Proposition 7 on the June, 1970 ballot, increased the interest 
ceiling on bonds from five percent to seven percent. 



26 



Chall: I'm not sure, but I think it was five, and I think you had to 
raise it to seven, though I could be wrong. 

Gianelli: I think that may be right. Five raised to seven. I think that 

may be right. But there was a limitation which we had to address 
in later years. 

Chall: Oh, yes. In the senior Brown administration, with respect to 

power and the concern about the large acreages, particularly in 
the Kern County area, Governor Brown had said that he would 
charge, for the use of power, to those owning 160 acres or less, 
the going cost of delivering the water including only the cost 
to pump it.* For those over 160 acres it was the market value 
of the power used to pump water to the land. i' m sure that's 
something you never paid attention to. 

Gianelli: There was a big argument, however, over whether or not the state 
ought to do what the federal government did in terms of some sort 
of restriction on acreage that could be irrigated. There was a 
big argument on that. But, as I remember, that was finally 
reconciled on the basis that the State Water Project users were 
not getting a subsidy, like the federal government users. 

The federal government, the users, at that time, of a hundred 
and sixty acres or less, were exempt from the interest component, 
so that made their water costs very low. But with the state 
project, they were not exempt from the interest component, and 
so I think there was no such restriction on the use of water for 
those under a state contract as there was under a federal contract, 

Chall: That's right. However, between 1960 and '61, as a matter of 
fact, I think one of Brown's statements during the bond issue 
campaign and before the contracts were finally negotiated was 
that power would be sold at two prices. For those of a hundred 
and sixty acres or less, the price of power would be the actual 
cost; and for those owning a hundred and sixty acres or more, 
the price of power at market value. 

Gianelli: I don't understand that, because, as I indicated to you, the main 
source of power was contracted with the Pacific Gas and Electric 



*See Edmund G. Brown, Sr. "The California Water Project: Personal 
Interest and Involvement in the Legislation, Public Support, and 
Construction, 1950-1966," and oral history interview conducted 
in 1979, in California Water Issues, 1950-1966, Regional Oral 
History Office, The Bancroft Library, University of California 
Berkeley, 1981, pp. 43a-A3b. 



27 



Gianelli: 



Chall: 



Gianelli: 



Chall: 

Ginaelli : 
Chall : 



Gianelli: 



Chall: 



Gianelli: 



Company and the other two private utilities, and that was at a 
fixed rate. Now there were a lot of negotiations that led up to 
what they would pay, but I don't remember, and I don't see how 
it could have worked, to have a different price for power that 
you charge for an individual who had a different acreage. 



I don't know how they would have worked it out. 
those things that he said in his campaign. 



It was one of 



I can't see how that could have worked. Of course, he didn't know 
at that time what the arrangements would be on the sale of power. 
But I think the practical problem was that we were faced with 
trying to get the most out of that power that we could. And 
there was a limited market for it, mainly the big private utilities 
within the state. 

Regarding this money that you received from the raising of the 
rate, the interest rate 

You mean the ability to sell bonds? 

Yes, at the higher interest rate. SB621 was the bill that gave 
you your additional monies from the tidelands oil. You also 
recieved a $100 million loan from the general fund, as I under 
stand it, while you were waiting results of Proposition 7. 
That gave you some other opportunity to move ahead. Otherwise 
you would have been maybe waiting for a while. And weren't 
there some short term 

Yes. I can't remember the $100 million loan, but we did issue 
some bond anticipation notes. And the reason we issued the bond 
anticipation notes is because that was before the interest ceiling 
was raised, and that was the only way we could market any bonds 
which we needed to carry out the construction. They were for a 
year or so duration, and they were subsequently refunded, or 
whatever happens to them when the long-term bonds are issued. 

But that's right. As I remember, they were called bond anticipa 
tion notes, of about a year's duration, to get us over some of 
our hurdles when we couldn't sell regular bonds. 

When you were doing this kind of maneuvering, as it were, finan 
cially, did you work primarily with the Department of Finance and 
with Dillon Read? What about Ivy Baker Priest? Was she instru 
mental 

Oh, yes, Ivy Baker Priest was very important because she was the 
person that kept in touch with all of the people on the sale of 
state bonds. We worked, for example, through her, and through 



28 



Gianelli: our financial consultant, Dillon Read. I used to go back and meet 
periodically with the bond people, potential bond customers and 
the rating bureaus in New York to bring them up to speed on our 
project, so there was very close coordination between the state 
Treasurer's office and our office. 

Finance was involved, but not, it seems to me, as extensively 
as the state Treasurer's office, because we were dealing with 
largely marketing of bonds, and while Finance was involved with 
a lot of issues, of course, I don't recall them being one of the 
prime players. 

We had a committee, and I'm just trying to remember what it was 
called, a bond finance committee, that had to approve the sale 
of the bonds, and the need for them, and all that. The director 
of Finance was on that, and Ivy Baker Priest was on it, and the 
director of Water Resources was on it. I don't remember whether 
there were any others or not. 

But anyway, they were all very deeply involved in what was going 
on. But the state Treasurer was particularly a key person. 

Chall: Was she knowledgeable about these kinds of issues? 

Gianelli: Yes, she was knowlegeable . She had a very competent staff that 
we worked with. Remember, Mrs. Priest had been a U.S. Treasurer 
before she came back to California and was elected state 
treasurer. So, she had quite a bit of background in the financial 
area, and knew a great number of people in the financial area 
in New York, which was very helpful to us. But she also had 
a very competent staff who we worked very closely with. 

Chall: That's a key spot, the treasurer of the state. 

Gianelli: Yes, it was very key. It was very key to us at that time, because 
of her relationship and her advice on marketing of the bonds. She 
had all the other bond issues to market, too, and that was a big 
concern to her, that the bonds would be sold at an appropriate 
rate to keep the state's double A rating, which she was very proud 
of. 



Setting Policies for Recreation 

Chall: You'd have to be concerned with that. Now, another place, I think, 
where you were able to cut back on some of your expenses was with 
respect with the Davis-Do Iwig Act, or recreation in general. 



29 



Chall: There seemed to be quite a bit of funding projected from the State 
Water Project for that; just philosophically, apparently, because 
money was not in the bill for Davis-Do Iwig. It was for Davis- 
Grunsky . 

Somewhere, I guess in your material, it was estimated, in 1966, 
that ten percent of the project going to recreation would be 
borne by the state, and a very large share of the total would be 
in the state park funds. 

Gianelli: Yes, let me talk about that a minute, because I think it is an 
important part of the project and there was a lot of discussion 
on it in the early years. In addition to the task force, which 
the governor appointed to look at the financing of the State Water 
Project, he also appointed a recreation task force, headed by a 
man who was the executive director of the Wildlife Conservation 
Board, Raymond Nesbit. 

At any rate, the point of it was we asked them to look at the 
potential recreational needs, and development around the State 
Water Project, and to make certain recommendations, which they 
did. And we did you're correct we cut down materially on some 
of the things that were originally hoped could be built, as 
recreation, as part of the State Water Project. 

And as a matter of fact, I think it was during our term we worked 
out an arrangement where there were bond issues specifically for 
recreation development around the project. Those monies would 
not come from the water project customers, they would come from 
the general fund, the argument being that recreation would benefit 
such a large segment of the population that it was not appropriate 
to charge the water users and power users for that recreation 
benefit rather than the general taxpayer. So then there were 
bond issues that were related specifically to those recreation 
features of the project under Davis-Do Iwig which the task force 
recommended . 

//# 

Gianelli: Certain of the recreation facilities needed to be built around 
the project. One of the major problems we had was that as the 
reservoirs were completed, they created a body of water, and they 
were really an attraction, then, for visitors. So we gave extra 
priority to the recreation around our reservoir areas where the 
public would come in anyway, so that we'd have some way to take 
care of them. 

I think the recreation development that's taken place has been 
appropriate. It's been funded, as I say, independently of the 



30 



Gianelli: water project fund, and I think the experience demonstrates its 

being used by a broad segment of the public. That was a difficult 
problem, as was the fish and wildlife connected with the recrea 
tion, too. 

Chall: I understand you had quite a bit of difficulty with the fish and 
wildlife people 

Gianelli: The Department of Fish and Game. 

Chall: The Department of Fish and Game. Their concerns were not always 
the same as yours, so there was controversy. And how did you 
handle that? 

Gianelli: That was a difficult one. That was true even with the Department 
of Recreation, to a certain extent. In other words, you had other 
departments, particularly in the Resources Agency, that had other 
responsibilities. For example, the Department of Fish and Game, 
I'm sure, felt its responsibility was to protect and to enhance 
the fisheries of the state. 

While we had no argument with that, we felt that the project 
should be limited to what the water users were going to pay for 
to those things which were necessary for mitigation. So, we 
always had a continuing argument of what involved mitigation and 
what involved enhancement . 

I'll never forget the situation that we had in Oroville. For 
example, the fishery people were concerned that we have cold water 
for the fish hatchery that was eventually constructed at Oroville 
for the salmon and the steelhead. They were fearful that if the 
water wasn't cold enough, the hatcheries would not operate properly. 

So, at great expense, we incorporated into the design of Oroville, 
these multiple-level outlets where you could control the tempera 
ture by drawing from the lower part of the reservoir where the 
water would be much colder. So, we designed the dam and the 
reservoir with those cold water outlets in place for the hatchery. 

The first year of operation at the hatchery, it turned out a lot 
of the small fish died of cold water virus because the water was 
too cold. So then we had to come along, and we went out and 
bought groundwater from the Oroville- Thermalito Irrigation District 
to heat up the water for the hatchery, after we'd made it cold at 
the request of fish and game. So, I used to kid Director [Ray] 
Arnett, director of Fish and Game at that time, that he cost the 
water project users a lot of money by his calculation that they 
needed cold water, and when we provided the cold water, it was 
too cold, and we had to heat it up again. 



31 



Gianelli: 



Chall: 
Gianelli; 
Chall : 

Gianelli: 



Cahll: 
Gianelli: 



Their continual arguments, I would say, were concerning the amount 
of water you had to release from a reservoir down the stream to 
maintain the fishery, and things of that nature. So, we had a lot 
of interface with the Department of Fish and Game, and consider 
able, I would say, disagreement with them on what we had to pay 
for and what was appropriate for someone else to pay for. That's 
largely what it came down to. 

The reimbursable and the non-reimbursable expenses. 
Exactly. 

I suppose that there's some way to solve some of these problems 
scientifically, but it looks as if so much of it has been kind 
of trial and error like cold water; how cold is cold? 

Right. One of the things that we found out, and I guess a lot of 
people already knew, was that fishery biology in not an exact 
science, and when one tries to predict how a fish would behave, 
you're really kind of not too sure sometimes whether your projec 
tions are correct. For example, it was never believed that any 
kind of a fish could survive a two thousand foot pumping lift at 
the Tehachapis in southern California. Yet, after we operated 
those big pumps, we found some fish in the aqueduct in southern 
California that only could have gotten there through these big 
pumps. And that was absolutely amazing to the fishery biologist 
who claimed that could never happen. Yet, there it was; it was 
happening. 

So, what I think part of our problem was, and I might say if 
you haven't come across it, I'm sure you would that we at one 
point in time went and hired some outside fishery biologists, 
which created a big controversy within the Resources Agency, and 
within the administration. But I felt that we, the Department of 
Water Resources, were paying the bill, and had to make certain 
we had the best expertise in an unbiased way on some of the 
fishery requirements. 

And I thought that the Department of Fish and Game, for example, 
did not have that responsibility, and that they would be asking 
for more than they would really be entitled to under a mitigation 
measure, which was our area of responsibility. So, we had quite 



a number of very heated sessions, a 
Agency area. 



lot of them in the Resources 



Were Mr. Livermore and his people there? 

Mr. Livermore and his people were there, and also the Department 
of Fish and Game of course was there. And during the first part 



32 



Gianelli: of our administration, Mr. [Walter] Shannon was the director of 

Fish and Game, and he was a carryover from the Pat Brown adminis 
tration. 

Then, as I recall, two years or so into the administration, 
Mr. Shannon left, and Mr. Arnett was appointed. Mr. Arnett 
finished part of the first term, and finished the second term 
with the Reagan administration in Sacramento. 

Chall: Was he a career man in the department as Mr. Shannon had been? 

Gianelli: No, he was not. He was a very active sportsman, a very avid 

hunter and fisherman, and he later became president of the National 
Wildlife Federation. This is subsequent to his term. But my 
point was I think he was basically a geologist, but he was very 
active in the fishery community by virtue of his personal, private 
life, and so he was apparently selected because of his being a 
sportsman, or however you would call it someone very interested 
in fish and wildlife. 

Chall: When you hired your own people, did you hire them to put on your 
staff, or as consultants? 

Gianelli: As consultants. Two of them were from the state of Washington, 
and one of them was on the staff of Humboldt State University. 
These were all world-wide fishery recognized experts . And they 
were for specific assignments, too. 

Chall: Did they help? 

Gianelli: I thought they helped. They gave us an independent view of some 
things that we were getting from the Department of Fish and Game, 
which we felt were more in tune with our areas of responsibility. 

Chall: I see. What about William Penn Mott? Was he concerned, in terms 
of how much money was going into parks around the reservoirs 
instead of someplace else? 

Gianelli: Yes. He was concerned similarly as the director of Parks and 
Recreation. In other words, he had responsibility for parks 
within the state. Let me say, going back a number of years, 
the Park Department of the state, (it was the Division of Parks, 
I think it was called) was largely interested in historic sites, 
and preserving monuments, and things like that. They were not 
actively involved in the operation of recreation facilities. 

So, during our administration, as I recall, the Department of 
Parks and Recreation went from that sort of an organization to 
actually an operation that was operational in terms of operating 
the recreation facilities. And we built many of them, and then 



33 



Gianelli: turned them over to the parks people to operate. As a matter of 

fact, the State Water Project paid for certain parks and recreation 
employees to operate the recreation facilities. 

Chall: But that would mean that anybody in Parks and Recreation would be 
quite concerned about developing a sort of all around kind of park 
department, rather than having it more water oriented than some 
thing else. And then their budget, of course, would be affected. 

Gianelli: Yes. The water project paid them for a lot of the work that they 
did around the water project. 

Chall: Does it still? 

Gianelli: It still does. Certain of the facilities, particularly around 

the reservoirs, I think the park people now, are reimbursed from 
the Department of Water Resources. They were for a while. I'm 
not completely informed on what's going on now, but I suspect 
that's still the case. 

There's one thing that should be mentioned at this point in time, 
that tied in with the early part of the project, and that was the 
governor's Task Force on Governmental Efficiency. I don't know 
whether you recall, but the governor, early in the administration, 
asked a number of businessmen in California to come to Sacramento, 
and asked a number of the big corporations to assign some of 
their top personnel for a period of time to the various state 
agencies to look at their organizations, and to make recommenda 
tions . 

The Department of Water Resources was one of the state agencies 
where we had a part of this government efficiency team with us for 
about six months. And they made something like seventy or eighty 
recommendations on how the department could improve its operation, 
looking at it from the businessman, private venture standpoint. 

And as I remember, we implemented sixty or seventy of those 
recommendations that were made, a lot of them to do with organiza 
tion, and contracting out things of this nature. Some of them 
we couldn't implement because it required legislation, and involved 
other people, and so forth. Early in our administration, if you 
look at the governor's overall program, you'll probably run into 
that task force, or its reports, which dealt not only with water 
resources, but dealt with state governemt generally. That was 
an important part in the early days of our administration also. 

Chall: I wasn't sure whether those recommendations had come from the task 
force on water, or where they had come from. 



34 



Gianelli: Those were separate task forces with separate missions, and they 
each performed independently. My recollection is that the Water 
Resources Task Force came out with its recommendations, I think 
in May of '67, and I think that the other one took a year or some 
thing like that. 

Chall: Oh, that's why. I kept running into the task force, and different 
dates, and I did get confused about which was which. Did you find 
that there was a valid carryover in terms of administration from, 
let's say, a business point of view, and a point of view of what 
can be done or accomplished in a governmental agency? Can it be 
transferred over as if it were a private business? 

Gianelli: No, not completely. There are some things you can do, but I think 
there are some things that the government can do, that the private 
sector can't do, and vice versa. So, I would say when you have 
that kind of an exposure you have to try and sort them out as to 
which things are applicable to government, and which things are not, 

I think there is still considerable argument in those general areas, 

Chall: But you were in some ways, in the Department of Water Resources at 
least, carrying on what might be considered a business. 

Gianelli: Yes, more so than some agencies, because as I view it, we were 

under very tight arrangements on the money that we had, and what 
we had to use it for, and that we had to repay it. Most govern 
mental agencies, and this is of course what I ran into at the 
federal level (I don't know if you want to talk about that later) 
but one of the big differences is that the federal water agencies, 
for example, get money from the federal government, and they don't 
ever worry if it's ever paid back or not. 

But in the state, in the department, where we had to pay off bonds, 
and the administration was committed not to tap the general fund 
to pay off those bonds, it put a great restraint, and a different 
complexion on the operation of the Department of Water Resources 
from the other departments of the state government. 

While it was good in a way, it was difficult because you had a lot 
of the governmental constraints that hindered your ability to 
operate strictly as a business. 

Chall: Like what kind of constraints? 

Gianelli: Like approvals, inability to make independent decisions, impact 
on other state agencies, other control agencies who would have 
something to say about what you were doing, the Department of 
Finance, for example. 



35 



Personnel; Building Up and Reducing Staff 



Chall : 



Gianelli: 



Chall: 



Gianelli: 



Even, I guess, personnel. 

Personnel was very difficult. The other thing that we did, as I 
recall, (my figures may be a little off, but I think this is 
indicative of the magnitude), we reached a peak level of employ 
ment in the department two or three years after I came aboard, 
and I think the figure was something like 4600 employees. You 
had to recruit people with special expertise, and doing that 
under the civil service rules was very difficult, so that was 
a very great concern. 

Than we had the opposite problem. At the tail end of my adminis 
tration we had to reduce the work force. As I remember we reduced 
it from 4600 down to 2500 in four years, and doing that under 
the civil service system and being able to keep the people you 
needed in the technical area was extremely difficult. 

So, the whole personnel aspect of our problem was very difficult, 
and it's one that I was also very proud of because we were able 
to go up to what we needed to get the expertise, and we were able 
to drop down when we were through with the positions without any 
mass layoffs in terms of dropping down, and without any great 
controversy. I think it worked out extremely well. 



How could you do it without mass layoffs? 
hired for a particular function? 



Were these people just 



No, they had to go into the civil service system, most of them, 
but what we were able to do, is that we worked out an arrange 
ment, for example, with the Division of Highways, who hired a 
large number of technical people, to take our people as they 
were surplus to us. They were a larger organization than we 
were. And also other organizations of state government were 
able to take some. The Public Utility Commission I think took 
some employees. 

Largely, we were able to transfer those people to other state 
agencies, but in addition we had a recruitment program in the 
private sector by contacting engineering firms who had need for 
certain people, and finding them a position. So, it didn't 
actually amount to the person walking in the street. 

I always thought that was a very significant accomplishment, and 
I think you can only appreciate it if you had gone through it, 
because going up and then going down in a governmental organiza 
tion is very difficult. 



36 



Chall : 



Gianelli: 



Chall : 



Ginaelli: 



Chall: 



Gianelli : 
Chall: 
Gianelli : 



Yes, it is. While we're on the subject, then of personnel, you 
did have one problem, and that was your strike in May 1972. 
These were people who were 

These were the operators of the State Water Project basically. 
The hydroelectric operators, and the pump operators, and the 
water operators . 

That was because there was a change in the type of job that they 
were then carrying? 

Well, we were going from a design and a construction organization 
into an operating organization. Again, we had a very difficult 
time recruiting people because of the limited number of those that 
would be available that we suddenly needed. So, there was dissen 
sion about salaries, working conditions, number of employees, 
and so forth. That's what prompted the first strike that we had. 
It was the first strike ever of public employees in California, 
I think. 

I noted from, I guess it was your material, maybe it was one of 
your reports to the commission, that you had been working on this 
for quite some time, recognizing that you couldn't deal with 
these people as if they were nine to five workers. You have to 
consider a whole other kind of personnel arrangement, and I guess 
as you were doing that they became a little restive, shall we 
say? 

Right. 

Was that a serious problem to you personally? 

Yes, very serious. I felt it very badly because in a strike situa 
tion, the striking employees essentially pull out all stops, and 
make all kinds of threats, and so forth. So, it was a personal 
problem. The governor made it very clear at the beginning of 
the strike that he would not tolerate a strike situation, that 
he felt that it was illegal, and that they would be fired if they 
didn't come back to work. 

Under the civil service system, if an empolyee is absent without 
leave for five days, he would be considered to be terminated, so 
the governor made that very clear, and on the fifth day the 
employees all came back. But we had some difficult problems those 
first four days in keeping everything operating, because there 
was some damage done by the strikers as they went off on strike, 
and we had to repair that damage . 



37 



Gianelli: That, plus the fact that we had some facilities which were very 
technical to operate; we just couldn't bring anybody in. But 
we were able to keep the water running and the power generators 
working largely using our supervisory force. 

And the strike ended after the fifth day, and the people came 
back in spite of what happened. But it was a very difficult 
period, very difficult indeed. 

Chall: It's a kind of situation that a water engineer doesn't find him 
self in very often. 

Gianelli: That's right, and that's one you could do without, very much, too, 
certainly. 



Administrative Control: Contrasting the Stateand Federal Govern- 
ment 



Chall: But I suppose it did lead to your understanding of what some of 
these problems were going to be in the future, the very near 
future. 

There was another problem with respect to the financing. You 
indicated that through strict cost controls on your project, 
that that resulted in substantial saving, and I'm wondering about 
the cost controls. Was this something that you could see, or 
your staff could see, or was this also something that the task 
force on efficiency noted? 

Gianelli: One of the things that I've felt, having spent some time, now, 
with the federal government, too, in sort of a similar capacity 
that I was with the state there's a difference in organizations, 
and the difference in how you handle things at the state level 
versus the federal level. 

For example, I always felt that I really ran the Department of 
Water Resources when I was in the state. I really felt that I 
was in control. I felt that the bureaucracy responded, and that 
everything went pretty much the way I wanted. Not that I didn't 
have problems, but I had control of it. 

At the federal level, with the Corps of Engineers, I didn't feel 
I ever had control of it. There were certain things that I wanted 
done, and they ' d say, "Yes." But then I'd find later on that out 
in the field if they didn't want to do it, for example, they 
would get to the Congress, and Congress would come in and keep us 
from doing some of the things we needed to do. 



38 



Gianelli: So, what I guess I'm saying is that I think that the bureaucracy 
at the federal level is much more entrenched, and it appalled me 
the way they have no reluctance at all to oppose what an adminis 
trator of that agency may want to do in terms of an administration 
philosophy, or good government, or whatever. 

I'm absolutely amazed at that. And then that there are members 

of the Congress with whom they relate to accomplish their things , not 

necessarily what's good for the government or what's good from 

an admistration standpoint. Very different. 

Chall: Yes, it not only is entreched, but I guess they have points of 
view that have been entrenched, and it's a close relationship 
with the Congress and the bureaucracy. The committees of Congress. 

Gianelli: That's right. For example, I never felt the personal pressure 
from legislators, for example, to do things specifically for 
their area,, nearly as much as I did at the federal level . And 
I think part of it relates to the fact that Congress has more 
power, in my judgement, than the legislature. 

You see, the governor has the line item veto authority, and he 
has to have a balanced budget. Back in Washington, the president 
doesn't have the line item veto authority. Congress, they're 
experts at knowing legislation that he has to have, and putting 
things in there that they want personally that the administration 
doesn't want, but he either has to take the whole thing or none 
at all. Makes it much more difficult to operate the federal 
government. 

That's why, I'm sure, every administration has trouble balancing 
the budget back there. The special interest groups, and the 
bureaucracy they're too far removed from the taxpayer. It doesn't 
bother them that their things get funded, even though they're not 
in the name of the overall public interest. 

Chall: And they might be interested in the taxpayer in their own district, 
if they pull something through for them. Sometimes that's done 
in the last few weeks of an administration, not only an adminis 
tration, but of a Congress. And, as you say, you take it all or 
none. 

Gianelli: That's right. I felt that my experience in Washington was much 

less satisfying than my tenure in state government, as its Director 
of Water Resources. They were kind of comparable, in a way in 
terms of their functions. 



39 



Chall : 



Gianelli: 



Chall : 

Gianelli: 
Chall : 

Gianelli: 



Chall : 
Gianelli: 



Chall: 



Gianelli: 



I've often wondered whether the Corps of Engineers within the 
army the Department of Defense in the army- whether that's 
really still a place for an engineering group dealing with the 
civilian-public sector. 

That's being argued right now. But the problem is that the Corps 
of Engineers, they do a lot of military construction, too. One 
of the things when I was back there that helped a lot while 
our civil work stuff went down, the military was going up, so you 
could transfer employees more. And I think you always have to 
have some kind of Corps of Engineers that does work for the army. 
They're part of the army. 

I understand that, I'm just wondering whether they should be 
dredging rivers and harbors 

Civil works. 

Yes, because that could then tend to be a real boondoggle, of 
course. 

The federal government is building things which in my judgment 
shouldn't be built. If they had to stand the test of economics, 
they'd never be built. That's one of the things I tried to do, 
to put into the federal system some of the things we did out here. 
In terms of repayment 

Yes. 

Boy, nobody liked that, I'll tell you. Nobody liked that at all. 
They don't want to think about having to repay certain amounts. 
But I felt if a project's good it ought to stand the test, and 
that's one way to stand the test is whether the beneficiaries 
are willing to pay for the cost of it. But they don't want to 
face that at the Washington level. 

Is that being considered as a part of the cost reduction program 
in the Reagan budget? 

Yes. It's been considered all along, but it's tough. I don't 
know what ultimately is going to happen. For example, I developed 
a number of projects where the users of the facilites were willing 
to pay back more of the cost than under the [present] federal 
system. The Congress refused to let me build those projects 
because they said, "Well, we don't know whether we agree with 
your policies on repayment." 

So, they thwarted the purposes of trying to demonstrate that you 
could get more money back to the federal government if they'd let 
us go ahead and operate it like we did out here. They didn't want 
to do that. 



40 



Chall : 



Gianelli : 



Chall: 



Gianelli : 



Chall: 



Gianelli: 



Chall : 
Gianelli : 

Chall : 
Gianelli : 
Chall : 

Gianelli : 



It may come to the point where you don't get projects at all, 
then. 

I think that's where we're headed, because the president turned 
down an omnibus bill at the close of the session. I was kind of 
pleased, because that demonstrates that they weren't able to 
coerce him, and didn't have the votes to override him. 

It's always been a real problem. That brings me up to another 
task force that Governor Reagan appointed. This was to study the 
160-acre limit, although that really wasn't really a state 
problem, as such. 

It was a state problem, because the state was being asked as to 
their position on it. We created a 160-acre task force. Earl 
Coke, the director of Agriculture, was on it. That time I was on 
it, and a few others. It was important in terms of, not state 
government, per se, but recommendations that the state would make 
to the federal government in terms of modifying that law. 

Of course, that created all kinds of controversy, too, because 
that's been so controversial since 1930, or before. And it's 
still a problem. I read the Westlands Water News every now and 
then, and they're wrestling with getting the new rates established, 

Yes. Year before last, I guess, Congress modernized the reclama 
tion law, but they're now in great controversy on implementation 
of whatever that law says. As you say, the pot's still boiling 
very high. 

Oh, it's just very difficult. Even if everybody accepted it, 
just the whole process of determining what the cost would be, and 
the prices. You have to run it through a computer, I'm sure. 

Recordable contracts, and acreage equivalency, it's very involved. 
And then you've got a lot of people under existing projects, and 
you've got a lot of new ones coming along with new projects. 



It's 



a mess. 



Really a can of worms. Really. 

It is. Did you get any flak at all from the pro-160-acre people, 
like Paul Taylor, and some of the others? 

The recommendations that the task force made, as I recall, were 
trying to point out that it was necessary to modernize reclamation 
laws. And I think one of the things we said in the task force 



40a 





VOLUME 19 



SACRAMENTO. CALIFORNIA, MAY. 1967 



Governor Reagan Tackles 
160-Acre Issue 



1 HE first step by a state administration to seek to "update" the con 
troversial land limitation provisions of the 1902 Reclamation Law 
JL was taken last month when Governor Ronald Reagan named a five- 
member task force to draft amendments which could be offered to Con 
gress to "afford rational approaches to the different situations which face 
California agriculturists." * ----- 

The Governor's action was in line Under the Homestead Act, any 
with statements which he had made, person who had filed his first papers 
before and after election, in which or was a citizen at least 21 years old 
he termed land limitations as "ar- and head of a family could enter 




30V. REAGAN 



chaic and unsuited to California's 
contemporary ag 
ricultural econ 
omy, including 
large-scale com 
mercial farming." 
In these state 
ments, Reagan 
pledged his sup 
port in an effort 
to lift these limi 
tations imposed 
on irrigated farms 
obtaining supplemental water from 
Federal projects. 

Named to the task force were: 
Burnham Enersen (Chairman), San 
Francisco attorney and Dir. of the 
California State Chamber of Com 
merce and Chmn. of its Statewide 
Water Resources Committee; James 
F. Sorensen, Visalia engineer, 2nd 
Vice-Pres. and member of the Board 
of Directors of the National Recla 
mation Association, and Executive 
Committeeman of the IDA; William 
H. Jennings, La Mesa, General 
Counsel to the Helix Irrigation Dis 
trict, Vice-Chmn. of the California 
Water Commission and an attorney 
for the IDA; Breckinridge Thomas, 
Fresno, attorney for the Kings River 
Water Association; and Richard D. 
Andrews, Fresno, attorney and for 
mer minority counsel for the U.S. 
Senate Interior and Insular Affairs 
Committee. 

An 18th Century Concept 

The 160-acre limitation provisions 
in the Reclamation Act had their 
origins in the 105-year-old Home 
stead Act a measure passed by 
Congress in 1862 to stimulate settle 
ment of the West 



upon a quarter section 160 acres 
of public land. After residing on and 
farming the land for a stipulated 
number of years, he was issued a 
patent to the land by the Federal 
Government. 

Somehow this 160-acre concept 
became associated with the suooly- 
ing of water by the government to 
developed farms as well as undevel 
oped arid public lands. 

The late U.S. Senator Sheridan 
Downey, a leading authority on the 
land limitation issue, said in his 
book, "They Would Rule the Val 
ley": "The 160-acre figure bore no 
particular relevance to any agricul 
tural theory of what an economic 
unit should be under varying soil, 
crop and terrain conditions; it was 
used because it was traditionally as 
sociated with the homestead laws 
in opening up the public domain." 
IDA-NRA Views 

In recent resolutions adopted by 
the Irrigation Districts Association 
of California and the National Rec 
lamation Association, urging -that 
the Reclamation Act be modernized, 
the directors of these long-estab 
lished water associations referred 
to the Act as follows: 

"Th* Reclamation Act of 1902 ap 
plied primarily to undeveloped and 
unirrigated public lands. Under 
modern farming practices a farm 
within that limitation usually can 
not be competitively or economic 
ally operated to provide full em 
ployment and income sufficient to 
maintain a reasonable standard of 
living within the farm areas in the 
Reclamation States." 

Would Expand Limitations 

The officials of IDA and NRA 
pointed out that while the "original 
Reclamation Act had been amended 
to permit supplemental water deliv 
eries to lands already irrigated, Fed 
eral Administrative Agencies have 



proposed to impose acreage limita 
tions in areas which would be in 
conflict with the local reliance upon 
contracts with the Federal Govern 
ment and the long-standing an 
nounced policies of the Administra 
tive. Agencies." (An instance of this 
kind is the suit brought by the US. 
against the Imperial Irrigation District 
to upset a 30-year-old Federal ruling 
and apply acreage limitation within the 
District.) 

"At the same time, the Depart- 
isent of the Interior has announced 
plans attempting to apply land lim 
itation policies in ground-water ba 
sin areas receiving only supplemen 
tal project water." (A classic jxam- 
ple here is that of the US. proposing to 
apply acreage limitation to all acres in 
Santa Clara and neighboring counties 
receiving water from the Bureau of 
Reclamation's San Felipe Division of 
CVP. Only a small percentage of water 
to be used in the area will be supplied 
by the project, but by following the 
water into tht underground, the US. 
would apply land limitation to anyone 
who pumps any water in the service 
area for more than 160 acres.) 

IDA and NRA also declared that 
"the Department now asserts the 
continuing applicability of acreage 
limitation in a Reclamation project 
where the agency contracting to pay 
the reimbursable costs thereof has 
fully repaid all such reimbursable 
, costs, thus controverting a basic 
concept and interpretation of Rec 
lamation law which has been repeat 
edly recognized and ratified by Con 
gress and has existed and been uni 
formly applied and relied upon 
since the passage of the Reclama 
tion Act of 1902." (A good illustra 
tion of this situation is that of Isabella 
Dam on the Kern River a Federal 
project where the entire Federal con 
tribution to water conservation benefit 
has been repaid to the government by 
the farmers owning rights to the water, 
but tht US. has told the landowners 
that land limitations will nevertheless 
be enforced.) 

Governor Reagan's Committee is 
expected to bring to his attention . 
these and other examples of imprac 
tical and harassing application of 
the old land limitation law which 
creates inequity with other Federal 
programs both on and off the land, 
causes difficulty in developing much 
needed supplemental water proj 
ects, and has an unsettling effect on 
great areas of privately owned and 
developed farm land. 



41 



Gianelli: report, as I recall, was that the 160-acre thing was no longer 
applicable, it ought to be some different figure, because it 
takes many more acres now and a lot of farm equipment to make a 
farm unit. 

So, I think we recommended that the 160 be changed to, I don't 
remember, 640, or whatever it was, and that people that used water 
on more than 640 acres pay the full interest component, that 
those under it would not pay it. But the whole thing was moot 
because the arguments continued, and then the modification was 
made 

Cahll: Not very long ago. 

Gianelli: A year or so ago. But it's still not solved. 



Controlling Costs 



Chall: No, it isn't. When you indicated that one of the ways that you 
were able to save money and continue financing the State Water 
Project was that you had developed strict cost controls, which 
resulted in substantial savings, what kind of cost controls? 
How do you set up a strict cost control, and actually make sure 
that you're holding it? 

Gianelli: Well, we went ahead and had the engineers reestimate the cost 

of works that were still to be constructed on a staged proposi 
tion. And so then, as the bids came in, we were able to keep 
control of whether the bids matched the cost estimates, the cost 
estimates being the thing that we used to determine whether we 
were going to have enough money or not. 

And I think it worked pretty well. It put a burden on some of 
the employees. For example, on preparing contract bids, to 
prepare them in a way that had options. Maybe we provided an 
option of whether someone should put in steel pipe or concrete 
pipe, and then we would take the cheaper of the two, for example, 
and match that against what the estimates were to begin with. 

So that primarily the way we did it was to keep a running 
account, and then any overruns had to be justified very exten 
sively. Word got around very quickly that change orders were 
to be held to a minimum. Change orders is where you can get 
into a lot of additional cost, when you tell a contractor, "We 
want you to do this in addition to what you've already done." If 
you don't have a strict control, then he can charge you more 



42 



Gianelli: because he's already doing the job. So, we had a very strict 

limit on change orders, for example, and had to have them reviewed 
very thoroughly as to their justification. 

II 

Chall: I wanted to back up a bit, because I had read, and you had 

mentioned, the problem of getting water over the Tehachapis. 
At one time I'd read that it was an engineering problem that 
you had to solve. I think you just said that too. How did you 
solve it? What was the problem? 

Gianelli: The problem was physically how you would get it over there, 

because what you were talking about, basically, was lifting more 
water higher than it had ever been lifted anywhere in the world. 
That was the technical problem. So, the question then became, 
how do you do it? 

The state and this was developing as I came in was arguing 
that you could do it in one lift. The Metropolitan Water District, 
who was the main recipient, said it ought to be done in two lifts. 
And we finally prevailed. They hired an outside consultant to 
check us, we did some more studies on it, and finally we just 
said, "We think that the single lift is the way to do it. We 
think the pumps can be designed." We'd had some laboratories 
over in Europe that had some prototype pumps that we had them 
look at. 

And we felt that, because of the earthquake potential there, it 
was desirable to keep everything underground and to do it in one 
lift if we could. So, we prevailed, I would say, over the objec 
tion of Metropolitan Water District. Their feeling was that you 
couldn't design that big a pump to work without a lot of problems. 

Anyway, I made that decision. We prevailed on that argument, and 
I think, now, since the pumps have been operating now for more 
than eleven years, I think it's been proven that our decision 
was right. They've been operating with a minimal amount of 
problems, nothing more than you would find in other places, even 
though it required technology reaching out farther than it had 
ever reached before in the design of such tremendous pumps. So, 
that was one of the difficult engineering problems that we had. 

Chall: Certainly was. Who built it, some European company? 

Gianelli: No, the pumps were built by Alis Chalmers and Westinghouse, the 

big pumps and generators, and our engineers designed the crossing 
with advice from the best consultants that we could get soils 
and seismic consultants, and pump consultants, and others. So, 
basically, the department engineers designed it with input from 



43 



Gianelli: the most highly qualified consultants that we could find anywhere 
in the world, and with experimenting in some of the laboratories 
in Europe . 

Chall: Quite an achievement. 

Gianelli: Yes. And I feel really good about it because with all of that 
controversy that we had on how it should be done, the one we 
chose seems to have been working out very well. 

it 



44 



II POLICY JUDGMENTS: COMPLETING THE STATE WATER PROJECT 



The Peripheral Canal 



Chall: We'll now talk about finishing or completing the State Water 

Project, areas that you were looking ahead to but could delay 
didn't want to, of course, too long. How about the Peripheral 
Canal and the related Delta water quality studies? 

Gianelli: The Peripheral Canal was a Delta facility, I guess is what I 

should say. It was extremely important in terms of the success 
of the State Water Project. Because the studies that had been 
made over the years, and there were a great many of them, indicated 
that if you just released water down the Sacramento River, and 
picked it up with pumps, as you took more water south, out of the 
pumps, you would have to waste a lot more to the ocean. So, some 
conveyance facility, if you want to call it that, was necessary. 

Originally, there was a proposal that would have gone through 
and enlarged some of the existing channels, and so forth. But 
that was rejected, largely by the fishery interests, by the 
recreation interests, as being too detrimental to their causes. 
And so, prior to the time that I got there, the Peripheral Canal 
concept was developed, and Director Warne, before he left the 
directorship, authorized its construction and indicated he could 
do this under the Burns-Porter Act. The Peripheral Canal was 
determined to be the best facility, and it should be constructed 
as the Delta water facility for conveying water across the Delta. 

When I came in, I asked the staff to look particularly at the 
timing. I wasn't arguing about the need for it, but the timing. 
I was convinced, after the staff made the necessary studies, that 
this is a facility that wasn't needed for some time. And so we 
said, "We will put it on the deferred list," and I think the first 
deferral was to 1976 or something like that. 



45 



Gianelli : 



Chall: 
Gianelli: 



Chall: 



At any rate, my conclusion was that that was necessary, all right, 
but it was not necessary as early as originally envisioned, 
because the pumps could still operate, without it being in place, 
effectively, for a period of time. 

Why did you think that? You didn't think the water was needed? 

We looked at the demands that were being placed on the system by 
the customers who had water supply contracts. And comparing 
those demands with our capabilities, with the existing pumps in 
the Delta, and the existing facilities, we thought that we could 
meet the demand requirements with a given water quality for longer 
than they originally estimated. That was as a result of quite 
a number of studies that had been made. 

However, there were other problems with respect to the canal, in 
terms of getting it built, even later. In May 1970, when you 
gave a report on the activities of the department to the California 
Water Commission, you said that Governor Reagan had thrown the 
full weight of the state administration behind the proposed 
federal-state Peripheral Canal. And you, I guess together, issued 
a strong statement in support of this as a vital part of the State 
Water Project, and the Central Valley Project. 

"He (meaning Governor Reagan) reached the state position after 
lengthy cabinet consideration of this issue, and after hearing 
from a great number of people favoring the canal." Was Governor 
Reagan really taking, in his cabinet meetings, a lot of information 
about the canal? 



Gianelli: As I remember, I briefed the cabinet on this thing, I think more 
than once. His information largely came through those cabinet 
sessions, and the pros and cons at that time. Because I think 
there were still people who were advocating that there was a better 
way of doing it than the Peripheral Canal, and that was what 
prompted, I think, the many discussions which we had. 

Chall: Wasn't there also some concern about building it as a state 

project alone, if the federal government wouldn't go along with it? 

Gianelli: Yes, we felt, and I felt, that the federal government needed it 

just as bad as the state government needed it, and that it should 
be a joint facility. In other words, it should be a joint project 
by the Central Valley Project and the State Water Project, and 
there would be some sharing of the cost of it, and construction 
by the two agencies . 

Originally it was designed to take care of the amount of water 
that would be needed for both projects. 



46 



Chall: But I guess the federal government wasn't putting much money into 
the Central Valley Project. 

Gianelli: The federal government wasn't putting a lot of effort into it, 
and also, it had not been authorized for federal participation. 
Remember, San Luis was specifically authorized by the Congress 
as a joint federal-state facility. The Peripheral Canal had not 
been specifically authorized, and there was some argument whether 
or not the federal government had to have a special authorization 
for it. And I'm not quite clear how that was finally resolved. 

But at any rate, I think subsequently the feeling was that the 
state would go ahead with it, and then be reimbursed by the federal 
government if they weren't ready to put up their money at the time 
the state was ready to go. But there was a relationship with the 
federal government on that issue. 

But the federal government had supported the Peripheral Canal too, the 
Bureau of Reclamation, because the original federal-state task 
force that recommended the Peripheral Canal consisted of represent 
atives of the Bureau of Reclamation, as well as the Department of 
Water Resources, and so there was no doubt that they felt it was 
the best facility. The problem was, what do they need in order 
to bring it about? 

Chall: There were also other problems not having to do only with whether 
you needed it at any particular time, and that was with the Delta 
water people, and various water control studies. I guess the major 
one was the Water Resources Control Board Study Report. 

Gianelli: The decision on water quality. 

Chall: Very high standards. 1 think you said it was too high, that it 

would cut down on the quantity of water to the State Water Project, 
and they claimed that if you didn't develop these standards you'd 
turn the Delta into another Lake Erie . There were these kinds 
of arguments. 

Gianelli: Yes, these arguments went on kind of continuously, yes. 

Chall: There's quite a skein of bureaucracies in the Delta. National, 

state, local, all the other concerns. Not only the bureaucracies, 
but the private fish and game people, and the environmentalists, 
and all of that. That didn't make you very happy from time to 
time, as I understand. You got rather angry at the whole 

Gianelli: The thing that I was concerned with was that the legislature had 
authorized the State Water Project, we had contracts, and we had 
some obligations. We, on the studies that had been made for the 
'Delta, for example, said that we felt that if you maintained a 



47 



Gianelli: 



Chall: 



Gianelli: 



certain quality, which largely would protect the agricultural area 
of the Delta, that that should constitute our obligation. Keep 
in mind that in years past, before any dams were built, the salt 
water intruded, in dry years, all the way up as far as Stockton 
and Sacramento. 

So, we felt, the people that designed the project felt, that if 
the project took on the responsibility of maintaining quality 
for the agricultural area, that should take care of the obligations 
of the project insofar as the Delta was concerned. Then the 
argument came in, "Well, what about all the fish, does that 
adequately protect the fish?" That's when the state board came 
up with the decision, 1485, or whatever it was, which said that 
the state would have to maintain quality at points lower. And 
that's when I said, "Wait a minute, they haven't demonstrated 
that need. That will create some great problems because that 
means we'll have to waste a lot more water than we thought." 

And that argument's still going on, as a matter of fact, from a 
quality standpoint. But largely, the problem is not so much that 
you'd have a Lake Erie, it's how much the salt water would 
intrude from the ocean into the Delta. So, it was a question of 
how much of the Delta was salt water, and how much was fresh 
water. That was really the problem rather than pollution from 
toxics. That wasn't a major consideration at that time. It was 
the salt water intruding. 

And then there were arguments with the federal government about 
to what extent they would be concerned with the water quality, 
too. 

Yes, because, you see, the decision that I was talking about 
would have applied to the federal Central Valley Project, so then 
they didn't agree with it either, but they came back and said, "Well, 
we don't have to comply to the state law." So we got into the 
big argument of federal-state relations . 

Which wasn't true. We never argued that. Our department, the 
state project we said we had to comply with state law. We were 
just arguing that they were wrong. The federal government took 
the tack that they don't have to comply with state law, which added 
a whole new complex argument into the issue. 



Chall : 



Rather a large can of worms on the whole, 
has it? 



Hasn't been solved yet, 



Gianelli: 
Chall: 



Not really. 
And can it be? 



48 



Gianelli: This is the way I sized it up, anyway. We determined, when we 

advocated the Peripheral Canal, that the state project Bill Warne 
had legally authorized the Peripheral Canal didn't have to go 
back to the legislature, didn't have to go back to the people. 
We had the attorney general's opinion to back that up, because 
the Burns-Porter Act specifically talked about a Delta facility, 
although it didn't identify it. We felt that you didn't have to 
have any further authorization. 

Now, when Jerry Brown came in this is my view of what he did, 
and they may have another view the Peripheral Canal was still 
very controversial. Largely, people in the Delta, who were fearful 
if you built the facility around the Delta, then they wouldn't get 
the free ride of all the water they'd been getting from the 
reservoirs, and it would detrimentally affect them. 

He, then, took the position that the legislature has to specifically 
authorize the Peripheral Canal. Then he put together a package 
which included not only the Peripheral Canal, but a lot of other 
things, which went up to a $13 billion price tag. A lot of other 
things that were really not relevant to the functioning of the 
project. And of course, that was turned down by the people, as 
you know, and then of course that 's more recently developed into 
the wrangle between Deukmejian and the legislature. And the 
legislature turned down Deukmejian kind of on the same thing. 

So the problem, as I see it, was not solely a defeat of the 
Peripheral Canal by the people, but a defeat of the measure that 
Jerry Brown put together which had the Peripheral Canal and a lot 
of other things included with it. And I think it was the price 
tag that scared off the people, not so much the Peripheral Canal. 

But right now, the fact that Jerry Brown did go to the legislature 
and to the people, and the fact of Deukmejian going to the legis 
lature, I think has made it more difficult. Because now you've 
got the emotion, and you've got the politics, you've got the north- 
south thing, and if there was one thing that the Burns-Porter Act 
was trying to do, was to remove the project from political maneu 
vering and partisan issues. 

And now, my interpretation is that the Peripheral Canal is right 
back in the middle of partisan, sectional differences, and I don't 
know how they're going to unscramble it. The way Deukmejian was 
planning now, was not to build the Peripheral Canal, but to build 
something different. But even that you see, he had trouble last 
year. So, the Delta issue is still not resolved. 

Chall: Do you think that, really, the environmental concerns are not that 
great? 



49 



Gianelli: I think that people are trying to get more out of the two water 
projects than was ever intended, and more than they're legally 
entitled to. That's my judgment. And that's why, basically, the 
controversy, 1 think. 

Chall: By more, you actually think that the Peripheral Canal will provide 
more water? 

Gianelli: The Peripheral Canal would allow the state and federal projects 
to operate to meet their commitments , and at the same time main 
tain a certain quality of water in the Delta. Now, the argument 
is, by the opponents , that that quality in the Delta is not 
adequate. And that gets to that decision of the Water Resources 
Control Board, and subsequent points that have been made. 

It depends upon where you sit as to what's adequate, I expect. 
Chall: Do you think the Peripheral Canal is necessary? 

Gianelli: Yes. I think it's necessary, or something similar to it. And 
originally it was proposed, and Deukmejian proposed, to go out 
and enlarge some of the channels. That's an alternative, but it 
was originally rejected largely by fish and game, and others, who 
felt that it would be more detrimental than the Peripheral Canal. 

The Peripheral Canal was really adopted at the insistence of the 
fishery and recreation interests, not the water interests. It 
didn't fly, so now they're back to what they originally talked 
about before the Peripheral Canal was conceived, and that is 
enlargement of the existing channel. But that's still running up 
against trouble, too. 

Chall: That's only a way to get somewhat more water down into both water 
projects. But for the full entitlement of the 4.4 million acre- 
feet of water, will they still have to go into the north coast? 

Gianelli: They'll have to go somewhere. 
Chall: I see. 

Gianelli: They'll have to develop some new water supplies that are not there 
in the Delta now if you meet the Delta requirements that have 
been set forth, and are now assumed to be needed. There's not 
enough water. But you see, the other thing that's happened is 
that the contractors have not needed the water as fast as they 
thought. So, the 4.4 MAF I don't know what they're using now, 
2.5 MAF, or something like that. 

So, the point of it is that they've had additional time, but at 
some point of time, there'll be a day of reckoning. As the use, 



50 



Gianelli: and as the Colorado River is withdrawn for Arizona, there will be 
further need to meet these contractual commitments. And that's 
when it's really going to be tough. 



The Environmentalists 



Chall: You had some concerns and arguments with the environmentalists 
during this period. There's been a lot written about what you 
said. Do you ever feel, perhaps, after all these years, that 
maybe they are right about something? 

Gianelli: I think the environmentalists have a viewpoint which needs to be 

considered. But, for example, there was a concerted effort by the 
environmental community to defeat the rising of the interest rate 
so we could sell additional bonds. And if you go back into the 
history you'll find that there was opposition at every point to 
completing the project. 

I felt, as director, a mandate by the people and by the legislature 
to finish the project as designed. And I felt that the environ 
mentalists were largely reflecting the opposition to the project 
in the first place, which I felt had been resolved by the majority 
of the people. And I expressed, in a vociferous way, as you 
pointed out, my unhappiness with what they were doing, because I 
felt they were trying to thwart the will of the people, which I 
had been put in the job to carry out. 

And I still feel that way. I think there's a point of reason, 
and a point to which they're entitled, but I think some of the 
views that have been expressed by the Bay Area, and particularly 
by the Contra Costa interests, also, are not reasonable. It is 
not reasonable to expect a solution to all of their problems from 
the State Water Project. 

I felt, for example, that a good part of the pollution of the 
Western Delta and the bay is due to the "gook" which they dump 
in from their own industry. But you see, they would never admit 
that, they would always say, "Our problem's caused because you're 
taking the water south." But I think the facts that were developed 
show that a lot of the pollution in the Bay Area, and the problems 
in the South Bay, were caused by their own dumping of undesirable 
material into those areas. 

But they were trying to mask that by blaming the transport of water, 
and I was very critical of it. I still am; I think that's still 
true. 



51 



Chall: Of course, you've read all these articles about what you said, but 
I did pick up one with a slightly different point of view. It was 
in the California Journal . 

It was another one of your statements but quite different from the 
rest in which you said, "In spite of our professional pride, 
engineers would be making a big mistake in continuing to write 
off the environmental coalition as a bunch of eco-freaks." So, 
I suppose you changed somewhere to get along with the Sierra Club? 

Gianelli: I don't know that we were ever bosom buddies. I guess one of my 

basic problems was that I felt that the water project enhanced the 
environment in a lot of areas. For example, you take southern 
California. We created some great bodies of reservoirs where 
people now enjoy great fishing and recreation. I always felt that 
that was an environmental plus that we didn't get any credit for. 

San Luis Reservoir is one of the greatest bass fisheries in the 
country. And so my position was that I thought the environmenta 
lists were being unfair in that they were always asking us to do 
more, and not giving us credit for the things that we did do. I 
guess that's still my basic feeling. 

I don't view myself as being anti-environmentalist, but I view 
myself as being, I think, anti-extreme environmentalists. At 
least that's the way I characterize myself, [chuckles] Which 
they may or may not agree with depending on where they stand, 
where their interests are. 

Chall: It's a continuing controversy. 

Gianelli: It is, and it requires a careful balance, there's no doubt about 
that. 



Dos Rios 



Chall: Over the years more is understood than it was when the water 

project was designed. Well, that gets us into the problem of the 
Drain. No, before we go into the Drain, let's talk about Dos Rios. 
That was an attempt to develop a water resource in the north coast, 
which was then planned, I guess, to an extent, for both the State 
Water Project, and the Central Valley Project? 

Gianelli: Let me talk a little bit about Dos Rios. Perhaps that would help 
you a little bit. Dos Rios was a project that had been designed 
by the Army Corps of Engineers to provide both flood control and 
water supply benefits. It was designed as a result of, I guess 



52 



Gianelli: 



Chall: 



Gianelli: 






Chall: 



Gianelli: 



it was the 1955 flood, or whatever it was, on the Eel River. 
A lot of property was damaged up there, and some lives were lost, 
and so the Corps of Engineers, with its responsibility for flood 
control, looked to the dam at what we call the Dos Rios site, 
which would have inundated an area in Round Valley, not far from 
Ukiah . 

And so the corps developed this plan, and they said, "Okay, 
we're going to be able to develop some water as well as provide 
flood control, and are you, the state, are you interested in the 
water?" And we said, "Yes, we're interested in the water." We 
had hoped to work out an arrangement whereby the corps would 
build it, it would be a federal project, we would pay them 
for the water supply that was developed, and we would integrate 
the supply into the State Water Project. That was what was 
proposed, and that's what did not pass. 

The opposition developed from the Indians over there and from 
some of the environmental groups of which Mr. Livermore was very 
much a part. This is where he and I had a very difficult problem. 
The net result was that the state had to formally indicate whether 
or not it would participate, and so there were a lot of hearings 
held, legislative hearings, water commission hearings, on that 
issue. 

And the governor then came down by saying, "No, the state is not 
going to give the federal government the guarantee now. We 
want you to look at other alternatives , " which we then did . But 
by virtue of what happened it did not go, and the Dos Rios project, 
I would say, with what's happened since then with the designation 
of the area as a Wild and Scenic River and all that sort of thing, 
I would say the Dos Rios project is certainly dead. Any project 
on the north coast is dead for the forseeable future, I think. 

Would the state have paid for that part of the project out of 
so-called set aside funds? 

Could have. We didn't get quite that far. The thing I was looking 
at was probably an annual payment to them. In other words, there 
was a provision of federal law where the water supply of a multi 
purpose project could be paid back on an annual basis over a 
period of time. I think we were looking, really, at that part of 
the thing more than anything. 



More than paying it out of the State Water Project funds? 
bonds? 



The 



Out of the bonds, yes. That didn't get a chance to develop. That 
would have depended on what Congress did in the way of authoriza 
tion. It could have been paid off in a lump sum, like some 



53 



Gianelli: 



Chall: 



Gianelli : 



Chall: 
Gianelli: 

Chall: 
Gianelli ; 
Chall: 
Gianelli: 



Chall: 



Gianelli: 



projects have, or it could have been stretched out a real long 
period. We really hadn't gotten far enough to nail that down, 
but I think it could have gone either way, as you say. 

I just wondered because I know that augmentation on the north 
coast, presumably was supposed to come from those set aside funds, 
of which there weren't very many at the time, but that still was 
part of the Burns-Porter Act. 

Exactly. And so did George Miller, who was~ responsible for that. 
He knew the water would have to come, probably, from the north 
coast, so that's why he put in the arrangements in Burns-Porter 
for the offset provisions. 

Did you have the ear of Ronald Reagan over this? Could you go in 
and talk to him, knowing that you and Livermore were on opposite 
sides? Did you know it right along? 

I know it early on because a lot of the opposition had made 
contact with Mr. Livermore, and I know where his sympathies lay. 
Largely, it was resolved in cabinet sessions, I would say. 

Were you in on some of these cabinet meetings? 

Yes. 

How did you feel they were going? 

The governor did not flatly turn it down. He said, "We think you 
should look at alternatives . " I felt that he was very largely 
influenced by the Indian community. In fact, I think he made a 
statement at that time that he wanted to avoid, if at all possible, 
an inundated Round Valley, which was quite an Indian settlement 
at that time, because he felt that the Indians had been mistreated 
around the country, and that he didn't want to contribute further 
to it unless it was absolutely necessary. 

My own feeling was that he was very largely influenced by the 
Indian community and the people who were representing them, in 
terms of not going ahead with the arrangement at that time that 
we had worked out with the Corps of Engineers. 



Was that a surprise to you, that the Indians 
in this? 



would be a factor 



Yes. I knew that they were over there, but it was a surprise to 
me that they would be able to exert the influence which I thought 
that they had exerted on the governor's decision. Mr. Livermore 
felt that way, too, I think. 



54 



Chall: He was surprised, too? 

Gianelli: Mr. Livermore, I think, was sympathetic with the Indians, and my 
perception is that Mr. Livermore was probably fairly influential 
in terms of that decision that the governor made, to defer Dos 
Rios, over my desire to go ahead with it. 

Chall: And then that followed in another year or so, with the Wild and 
Scenic Rivers Act. So, you felt further disappointment then? 

Gianelli: The Wild and Scenic Rivers Act I felt fairly comfortable on, 
because that was worked out with the governor's legislative 
representative, and with Senator Peter Behr, who was the prime 
advocate, and carried the legislation for the Wild Rivers Bill. 
And the way it was worked out, the reason I bought off on it, was 
that it provided that for the next thirteen years there would be 
no development in the north coast, and at the end of that time 
a report would be made to the legislature on the need for further 
development on the north coast. 

So, my agreeing to that, and going along with that legislation 
was that I felt that we could get by. Let me back up a little 
bit. Originally, they wanted a longer period, twenty or twenty- 
five years, as I recall. Whatever it was, it was longer than 
thirteen. And I said, "That's too long." The thirteen was a 
compromise period that was worked out. I think Ed Meese, who's 
now back to being considered for attorney general, was important 
in that decision, because he was over in the cabinet at that time. 
But that was worked out as a compromise. 

So, I didn't feel unhappy with it, because the Eel was the only 
one that looked like it had any feasibility from the studies made, 
and if we'd only been limited for thirteen years, I felt that 
wouldn't destroy our ability to develop it in the future, when 
we needed it. 

Chall: And that's just about up, now. 

Gianelli: Well, it's been more than up. Let's see, I think it would have 
been up in about '83, wouldn't it? 

Chall: Well, it passed somewhere between 1972 and 1973. 
Gianelli: I thought it was earlier than that. 
Chall: I have '72. 

Gianelli: Maybe it is about up. But they subsequently have passed it by 
in terms of the federal government, under the last thing that 
happened in the Carter administration, when Cecil Andrus declared 



55 



Gianelli: it in the federal wild and scenic river system. Now they've been 
arguing about that in court. What I'm saying is that subsequent 
events have superceded, you might say, the arrangement that was 
worked out in 1972, or whenever that was, on the 
thing. 

My judgment tells me now that it will be much more difficult to 
get water from the north coast than it would have been as we 
envisioned it at that time. 

Chall: When water's needed, if and when it becomes desperately needed, 
where do you suppose it will come from, or will such laws and 
acts as Wild and Scenic Rivers be revised? 

Gianelli: I think that what it means is that there will have to be other 
alternatives developed first, whether they're the most economic 
or not. 

Chall: What kind? 

Gianelli: Off-stream development. For example, like reservoirs south of 
the Delta, where you can pump in some of those flood flows when 
they occur, and hold them there rather than going up, say to 
the north coast. That would be one example. Another one would 
be relaxing some of the water standards in the Delta so that 
you didn't have to let so much out for salinity control there, 
if that was feasible. 

So, there are other things that might be done at least tempora 
rily to forestall the need to go to the north coast. Ultimately, 
ultimately, I think you're going to have to go there if you're 
going to meet the state's water needs under the estimated demands 
that are anticipated. 

H 



The San Luis Drain 



Chall: Another problem that you had, of course, getting funded this not 
only dealt, I guess, with the federal government, but with your 
own farm group that was the Drain. Even during William Warne's 
administration, he couldn't get the Drain off the ground because 
the state farmers didn't want to pay for it in the San Joaquin 
Valley. 

Gianelli: Yes, let me talk a little bit about the Drain, because that thing 
came to a head when the Reagan administration came in, too. First 



56 



Gianelli : of all, let me back up. The federal Central Valley Project had 
a provision, when the San Luis unit was built, that there would 
be a drain constructed to the Delta because they knew they would 
have problems in the Westlands Water District in that area. 

The state knew that some day a drain would be required farther 
down the valley. Bill Warne was about to enter into an arrange 
ment with the federal government for a federal-state drain, 
where the state would bring it from the middle of the valley, 
or the southern end, up to join with the federal service area, 
and then they would both discharge into the Delta. 

I refused to enter into that agreement that Bill Warne had nego 
tiated because I didn't feel we had any way to pay for it from 
the state standpoint. So then, that kind of took it a little 
bit off the back burner. Then the federal government proceeded 
to go alone with its share, and that's what's been happening 
ever since . 

So, what happened, basically, was that the state part of the Drain, 
which was an authorized part of the Burns-Porter Act, hasn't 
been needed, and there's been no way to pay for it. So it's kind 
of been on the back burner, while the federal government had to 
go in and do it's thing, because its problem was more urgent. 
And that's now been climaxed with the selenium problem at 
Kesterson that you've been reading so much about. So that's a 
quick capsule of the situation with respect to the Drain. 

But the master Drain is still an authorized feature of the Burns- 
Porter Act, but so far there's been no way found to fund it, and 
to repay the cost, because, basically, a lot of the people who 
create the problem are not the people that get benefit from it. 
That ' s the problem that the federal government is having 
right now. 

Chall: I see. The people who create the problem don't get the benefits 
of it? 

Gianelli: Right. Largely, the drainage water accumulates in the low regions 
of the trough of the San Joaquin Valley. Some of the people 
that create that water are up in the higher areas of the valley, 
so the Drain does not become a problem to them, but it becomes 
a problem to the people where it drains on. So that's why it's 
been such a difficult problem to solve. 

Chall: There's no way to enforce payment from the farmers in the area? 

Gianelli: Well, the San -Luis unit has got some responsibility for its share 
of the Drain, so there was a provision made, in the federal 



57 



Gianelli: San Luis unit, to have the farmers in the Westlands Water District, 
in that area, who would create, largely, the problems of that 
project, to pay for a share of it. 

Chall: You say the Drain isn't needed? 
Gianelli: By the state, the state's part. 
Chall: What's happening? Aren't the salts there building up? 

Ginaelli: The water hasn' t been that much of the problem down in the state 

service area. You see, the state serves down south of the King's 
River service area, mostly in Kern County, and so the recurrence 
of the drainage water there has not been such a problem as it 
has been in the upper San Joaquin Valley . 

Chall: Will it not, eventually? 

Gianelli: I don't think it ever will be the problem, but it will be a^ 

problem. I think ultimately the state will have to address it, 
but it hasn't had to worry about it now, so far. 

Chall: Can a drain, as planned, be an effective way to get rid of the 
salts, and the minerals, and all of the pesticides, what we 
see now in the whole Kesterson problem? 

Gianelli: Yes, I think that the Drain can be. You see, you have two kinds 
of problems with a drain. First of all, you have a quantity 
problem that in certain areas of the valley creates a waterlogged 
condition. But it isn't a quality problem. The problem with 
Kesterson is very largely a quality problem. 

You see, up until the selenium problem, a lot of the water from 
the drains, from those districts, were used for the wildlife 
refuge down there. They liked to have that water. But it's only 
the sudden occurrence of things like selenium that makes the 
quality a great consideration. 

Originally, it was anticipated that the Drain would go to the 
Delta and be discharged at a point where it wouldn't be any worse 
than receiving water, in other words, the western Delta. It 
wouldn't create a problem. But that was objected to by [Jerome] 
Waldie and by the Contra Costa people, and they were successful 
in getting the Congress, when they appropriated money for the 
federal study on the federal Drain, to not get money so they could 
study discharge west of Carquinez, or some point. 

So my judgment of what's happened is that the western Delta 
interests have been successful in preventing the Drain 



58 



Gianelli: from dumping where it was originally intended, and where it 
probably could have been dumped without a problem. But now, 
they forced the drainage water to stay in the Kesterson area, 
and then the selenium has aggravated that, has created the big 
quality problem, of course, which they're now trying to deal with. 

My judgment is if the Drain had been built ten or fifteen years 
ago, it would have been operating now with no problems. Because 
you wouldn't have had the concentration build up, and it would 
have been an accepted thing. I think it could have been demon 
strated that it didn't harm the discharge waters that it dumped 
into. But the political reality is that it didn't allow that 
to happen, so now you've got a problem of concentration because 
there's been no place to dump it. But I think it could have 
solved the problem. 

Chall : A lot of problems still around. 
Gianelli: Yes, there are. 

Chall: That's not only a political problem, but it's really scientific, 
because nobody is really sure what's going to happen with all 
the salts. Some statements were made over the years that some 
of these problems could be taken care of by various technical 
methods like reverse osmosis of couse it would take a lot of 
electricity, I guess evaporating the water leaving a great 
big dump of minerals somewhere which ultimately could be mined; 
all of these factors. Is that still possible? 

Gianelli: There are studies continually being made, and it depends upon 
what elements you have to dispose of. If it were salt alone, 
you could probably dispose of that some way. But, when you 
have these elements, now, like selenium, and no one is quite 
sure what concentrations you have and what problems they create, 
then it throws an uncertainty into it which makes it not clear 
just how successful you would be dimineralizing, as you call it, 
or evaporating the water that's there and removing the minerals. 

Chall: What about the problem of not only salts, but pesticide residues 
and things of this kind? Where are they going? 

Gianelli: They've been looking at the problem of removing those. I think 
one of them has been nitrogen that they've been worried about 
that gets introduced, and they've looked at raising certain kinds 
of plant life and then harvesting that plant life. The plant 
life would use the nutrients. So they've been looking at 
various ways to get out of the water, the drainage water, those 
things that have been harmful. But the selenium is a new one 
which people don't know too much about. 



59 



Gianelli: The subject of selenium has only surfaced in the last two or 

three years as a problem. I'm told that selenium has occurred 
in the area for literally thousands of years. What's happened, 
apparently, is that the irrigation water has caused the selenium 
to leach to the surface, and that's when it concentrates and 
creates the new problems. 

Chall: So we're really still living in the dark in terms of some of the 
environmental problems that we just knew nothing about a few 
years ago. 

Gianelli: Yes. I think that's true particularly with respect to the Drain. 
I wouldn't say we were living in the dark, I would say we're 
having to learn more about it than we ever thought 

Chall: Dreamed was necessary. 

Gianelli: Dreamed we would. Yes, no doubt about that. 



Groundwater Management 



Chall: It's claimed that most of the water that's being used by the 

farm interests is not the surface water, and that they're still 
pumping underground. That does, and will continue to create a 
problem. Are they not taking the surface water because it's 
more expensive than pumping? 

Gianelli: I think largely it's been the unavailability of surface water; 
and this has occurred principally in the southern San Joaquin 
valley. Surface water is limited to areas where it's available. 
This has required a lot of the people to continue to pump and 
they can do so by just dropping a well on the property from 
which they can pump . 

It's creating a condition of overdraft, which is a great concern, 
and if it keeps on, probably what it will mean is a lot of land 
would have to go out of production if they can't get a substitute 
supply, because it won't be economic to keep going down and down 
and down. Eventually it will run out anyway if you take out 
more than you put in. 

Chall: Not only that, I guess it's ruining the land, as such, as you 
say. The salts coming up. 

Gianelli: That's a function of the quality. 
Chall: Of the ground. 






60 



Gianelli: The quality of the groundwater. In some areas, groundwater 
does have a quality problem; other areas, it's not a very 
difficult problem. So I think that all depends on where you're 
pumping, and the quality of the water that you're pumping from 
the groundwater. 

Each time you use water, it deteriorates a certain amount, through 
evaporation and transportation. Then it tends to concentrate 
the solids. So if your water isn't very good in the first 
place that you pump, then it very quickly gets to the point 
where maybe it's not even usable for, say, things like surface 
irrigation. 

Chall: Sometimes it just looks as if there is no solution to some of 
the problems that we are creating. 

Gianelli: It's interesting. In San Bernardino County, along the upper 

reaches of the Santa Ana River, before the State Water Project 
was built, there was an overdraft of the groundwater supply, 
and they were very worried about the people who were relying on 
groundwater. Since the State Water Project has come in there, 
there's been a surplus of water, and now they've got a ground- 
water condition that's too high. 

So exactly the reverse is happening. So they're trying to 
figure out how to lower the groundwater table in the area now, 
where before they were very worried because it was too low. It's 
all a matter of careful balance, and what we find is, I think 
in many of these areas, you go sort of from one extreme to the 
other. 

Chall: Is there a way to organize some of these problems? The opponents 
to the State Water Project continue to say that you need real 
management ; groundwater management, and irrigation controls, and 
understanding of waste water, et cetera. If an effort were made 
in that direction you might not need some of this extra water 
for a long period of time, according to their theories. 

Gianelli: I think it's being made for example, you take Orange County. 
They have imported water, but they also manage the groundwater 
basins. My feeling has always been that the groundwater manage 
ment has to be handled at the local level, that you can't impose 
a whole state system because the groundwater basins are different 
in various areas of the state, and largely should be a local 
problem. 

So I think groundwater management will be playing more and more 
a role in terms of water development. It actually is doing that 
in areas where you have a shortage of the supply, and you have 






61 



Gianelli : 



both groundwater and surface water. 
Santa Clara valley, too. 



I think it's happening in the 



Chall : 



Gianelli: 



Chall: 
Gianelli: 
Chall : 
Gianelli : 



Santa Clara valley depends very much on pumping, but we brought 
in state water, and now they're bringing, through Pacheco Pass, 
federal water into the area. Actually, my perception is, and 
I think certainly the Reagan administration's, was that ground- 
water should be managed by local entities, but you do have 
to rely on the state and the federal government, big entities, 
where you have to bring in quantities of water from large 
distances in order to augment the water supply. 

But it's not going to be settled until some state rules are made? 
State requirements? 

There are provisions in the law now. If you have a groundwater 
basin that's overdrawn, you can adjudicate that. In other words, 
you can determine the rights. We've done that in southern 
California, Raymond Basin and the West Coast Basin; originally 
they were overdrawn. So, court action was brought to adjudicate 
the rights, and the court came up with the decision on how much 
water could be pumped and how much would have to be brought in. 

So ultimately that's probably what's going to happen in most 
of the basins is that there will be a legal determination of 
who can pump how much, and then the rest of it will have to be 
brought in from the outside. But until you have that overdraft 
condition, you have that court determination, it's not possible 
to impose strict regulations on people. 

This may take a while. 

It may take a while. 

But that may be the way it will have to go? 

That's right. Nevada now has a law where you can't drill a well 
unless you get a permit from the state engineer. Before he issues 
a permit, he has to determine whether or not there's an overdraft 
in that particular groundwater basin. If there's an overdraft, 
then he denies it. If there's not an overdraft, he may put condi 
tions on it, and so forth. I think that's possible. 



The Central Arizona Project 



Chall: One of the problems you had, and so did Mr. Warne, and so did water 
interests decades before, was with the Colorado River. But I 



62 



Chall: guess it was pretty well solved early in your administration by 
the signing of a bill by President Johnson. 

Gianelli: Yes, and Senator [Carl] Hayden was involved at that time. 

Chall: Senator Hayden, yes. He finally gave way. He was holding up 
one of your water projects until they got the Central Arizona 
Project. 

Gianelli: Yes. What happened was that the Central Arizona Project was 

being held up by California congressmen, and California congress 
men were very strong in their position. Then, of course, it 
became apparent that water development in general might dry up 
because you'd have people like Carl Hayden, who was very powerful 
in the Senate at that time, holding up California appropriations. 

So our legislators pointed out that it was very important that 
this Colorado River issue be resolved, and so we did resolve it. 
And there's a picture on the wall in the hall showing the signing 
of it by the president. I got a letter from the governor on it, 
too, as a matter of fact. I think this was in '68. We played 
a strong role in bringing it about over a lot of objections from 
some southern California interests who wanted to fight it in 
the courts all the way . 

Chall: They already had for a decade or more. 

Gianelli: They fought for decades, but finally our administration persuaded 
them not to pursue that. So, the legislation contained a guar 
antee of 4.4 million [acre-feet] for California. The net effect 
is, when the Arizona Project is built, it will take away some 
water now used by the Metropolitan Water District. That's when 
the crunch will come on for more northern California water, I 
think at that time. 

Chall: With whom did you work in the federal government? Did you have 
to go back from time to time 



Gianelli: Yes. 
Chall : 
Gianelli: 



And work with Congressman [Harold] Johnson? 



Congressman Johnson was very much in the middle of it. Congress 
man Hosmer was another one who was very important. He was sort 
of the water spokesperson for southern California, Craig Hosmer. 
And then I worked with the staffs of some of the key people, like 
staffs of Senator Hayden. I can't remember the person's name 
now. But I was very much involved with it. And of course, 
Northcutt Ely was an important one. He was representing some 



63 



Gianelli: 

Chall : 

Gianelli: 
Chall : 



Gianelli: 
Chall : 



Gianelli : 



Chall: 



Gianelli: 



of the southern California interests. And he was one of 

the last ones that had to be persuaded to go along with 

the compromise that was worked out, rather than fight it in court. 

He'd been fighting that one in court for so long I guess it was 
hard to give it up . 

Yes , a long time . 

So, it was finally solved. Now, my feeling about it is, sometimes, 
that this is, oh, kind of slight of hand, because if it hadn't 
been that you had said to the Columbia River water basin people, 
"Okay, we won't talk about getting water from you for..." what 
was it, ten years? 



Gianelli: Yes. 
Chall: 



That that was the sticky point. I mean, it was not only Senator 
Hayden, but it was Senator [Henry] Jackson 

Jackson was invoved, you bet. 

And so as long as you were willing to say, "We'll take our 4.4, 
and we'll leave you all alone for ten years," that was the key 
to solving it. Prior to that time, there was no way, while you 
sought northwest water. 

I think that plus the willingness to limit ourselves to 4.4 was 
another critical one. 



I see. 
4.4 



How much were you asking for before? I thought it was 



I think the Metropolitan, I think those people were talking about 
5.6 or something like that. It was considerably more than that. 
So the 4.4 was actually a limitation based on what they thought 
they might be able to get if they fought it out in court. That 
was the problem, the historical problem.* 

The other one was that they felt if they could keep projects in 
the upper basin from going ahead like the Central Arizona Project, 
then they ' d have a physical guarantee, too. They'd get more. 



* For a brief overview of the history of the Central Arizona 
Project, see, "Water for Arizona: The Central Arizona Project,' 
Western Water, May/ June 1985. 



in 



64 



Chall: You couldn't keep that out. 

Gianelli: Couldn't keep that out, no. I'd say the primary players there 
were Carl Hayden, and "Scoop" Jackson, for the reason that you 
mentioned. And then, let's see, at that time, who did we have? 
Tom Kuchel, I think was still in the Congress. His term 
expired in '69. And Senator [George] Murphy was there too, but 
Murphy wasn't nearly as active as Kuchel was. 

Chall: Well, you had to go back and forth many times, I guess. 
Gianelli: Yes, many meetings. 



The Western States Water Council 



Chall: What was the value, then, at the time, in solving this, of the 
Western States Water Council? You were active in that, weren't 
you, on the state level? 

Gianelli: The Western State Water Council was created, as I recall, a 
couple of years before I became director. 

Chall: In 1965. 

Gianelli: 1965. Okay, Bill Warne was one of the first members of it. So 
I took his place, or I was appointed by the governor at that 
time, when he left. Western States Water Council probably was 
created recognizing that there were a lot of problems of which 
that was one. But there was another thing which maybe had some 
influence, too, and that was the [Stewart] Udall plan for diver 
ting water from the north coast in the northeast and, down into 
southern California. There was an outfit called the Advisory 
Committee on Western State Water Planning which I was put on 
by Pat Brown, which functioned largely as the outgrowth of that 
Udall plan, which never got anywhere. But it was kind of a 
plan to divert from the north coast to the southern California 
area. 

And then the Western States Water Council, I think, was a more 
general thing. It wasn't so specifically related to that, but 
a recognition that the states had to work together, a creature 
of the western governors at that time. 

Chall: So that took in all the western states, Oregon, and Washington, 
and Montana? 



65 



Gianelli: It took in, let's see, who did we have, eleven states, I think. 

Chall: That's where there was the battle over whose water was going 
to be used for general replenishment, and it's still there, I 
suppose. 

Gianelli: They have continual arguments about western water rights, federal 
claims versus state rights, all that sort of thing. They're 
continually going over that same ground. 

Chall: Did you find these meetings useful, boring, exciting? 

Gianelli: I found them educational. One of the things I found out was 
that It was interesting to me that California was so far 
ahead of all of the other states in everything that it had done 
in water. No state had ever gotten into the water business 
itself, never built anything. 

California was looked upon as the leader of all the western 
states in terms of moving ahead to solving its water problem. 
And I didn't think we gained very much out of it as Calif ornians, 
but I felt that it helped educate the people in the West 
generally, about some of the things we'd done in California, 
and were doing in California. 

And the main thing that it did was to provide a vehicle for 
information exchange, to get acquainted with the water leaders 
of each of those states, because you often dealt with them on 
various other matters. So I felt it was a worthwhile thing. 
That's why we so actively participated. But how much we got out 
of it, I think that is fairly limited. Because California, as 
I say, was so far ahead of everybody else. 

Chall: Do you think that the state of Arizona, with the Arizona project, 
is going to learn anything from the state of California in 
terms of water use, and overdraft and all of that? 

Gianelli: Yes. A couple of things are happening, in my judgment. First 
of all, I don't know whether you know this, but Wesley Steiner, 
who was a deputy director under Bill Warne for his last year in 
office, eventually was recruited by the state of Arizona, and 
became the main proponent for the Central Arizona Project. He's 
been down there now for, well, I think he went down there in '69. 
He's been down there fifteen years, and his number one assistant 
is Don Maughan, who also worked for the Department of Water 
Resources here. He was vice-chairman of the Water Resources 
Control Board during part of Reagan's administration, and early 
in Brown's, and then he quit and went to Arizona to be the number 
two man for Steiner, and he's been down there now ten years. 



66 



Gianelli: But the Central Arizona Project, I think, is learning that it's 
going to have to do more on its own, and not rely solely on the 
federal government. It still has a lot of money to be spent to 
complete the project, and in view of the tightness of federal 
funds and all, I think they're beginning to recognize that what 
we did in California they're going to have to do in part. 

You see, they've been relying on a federal project completely, 
federal funds, and that's why it's taken them so long. But I 
think, even though they're still relying on them, I think they 
recognize now that they're going to have to do more on their own 
than they ever did before. So I think they're learning. 

And I think they ' re entering into contracts as we did with water 
users in California, and following somewhat our practice, 
although they've been more heavily relying on the federal govern 
ment to finance their project than we were. 

Chall: Is the federal government still providing no- interest loans, and 
anything of that sort? 

Gianelli: It has the rules of the reclamation law which apply. 
Chall: They do? Still? 

Gianelli: Yes. But largely I think that project is going to be very 

heavily for municipal and industrial, rather than agricultural 
purposes. There'll be some irrigation, but not heavy. 

Chall: They'll be able to pay it back. 
Gianelli: I think that's the plan. 



67 



III PRIVATE CITIZEN: CONTINUING INTEREST IN WATER ISSUES 



Leaving the State Department of Water Resources, 1973 



Chall: Now we'll get into your resignation. You got a ten-year 

appointment to the state Personnel Board. Is that because you 
wanted to get out of the administration before Reagan left office? 

Ginaelli: That came right afterward. What happened was, I let it be known 
that when we finished the construction of the State Water Project, 
that I felt I really wanted to leave. I felt it had been a very 
high pressure job, and a very difficult one, and I'd really 
just about felt that I'd worn myself out. 

I made it quite clear. So after we dedicated Perris and got water 
down to the tail end, I indicated to the governor that I'd like 
to leave and go back into my own consulting practice . I'd heard 
then on that the personnel board thing, that there was a vacant 
position. It had been vacant, I think, from January of that 
year, 1973. I left in September of '73. It hadn't been filled. 

I was coming back into private practice, and of course, having 
been a state employee, I was interested in the personnel system. 
So I said to the governor's office, "That would tie in with my 
going back into private practice," because it only took about 
I think it was classified as a one- third- time job, or something 
like that. It would allow me to keep a hand in state government, 
which I kind of wanted to do, but in a completely different arena. 

The governor, then, was kind enough to appoint me to that term.,. 
which would have run ten years. I stayed in it until I went 
back to Washington. Then I resigned to go back to Washington. 

Chall: When did you go to Washington? 



68 



Gianelli: I went in March of 1981. So I actually served on the Personnel 

Board not quite eight years. I served there from it would have 

been September of '73, until March '81. About seven and a 
half years. 

Chall: Did you find it interesting? Did the background help? 

Gianelli: Yes, I found it interesting, but I think the background of being 
a director That's what the governor said when he appointed me, 
"I think your experiences as an administrator will help the 
Personnel Board as it deals with state government problems," and 
I think it did to a very great extent. And then I also, as a 
result of being on the Personnel Board, served a term on the 
Public Employment Retirement System here. I served that by 
virtue of being on the Personnel Board. The Personnel Board had 
a rotational policy of its members being chairmen. So I rotated 
through, and after I became chairman, then I served, I think it 
turned out to be two and a half years, or something like that, 
on the Public Employment Retirement System Board. 

Under the PERS law, a member of the Personnel Board was a member 
of the PERS board of directors. I found them both very interes 
ting. 



Gianelli: I thought of going back into my other firm in Sacramento, which 
I guess I could have, although I had no arrangements. I decided 
instead to come down here [Pebble Beach] and operate as an 
individual, which I did. 

Chall: Did you travel all over the country? 

Gianelli: Mainly California. Mainly a California consultant. I repre 
sented some irrigation districts in the valley in some of their 
water problems, and some of the municipalities. I worked for the 
Turlock and Modesto Irrigation districts, the City of Los Angeles, 
PG & E, and SMUD [Sacramento Municipal Utility District], and 
others. So I did a variety of things. 

Chall: And you still do? 

Gianelli: No, I'm very restricted now. I consider myself to be semi-retired, 
And I stayed on in a non-pay status as chairman of the Panama 
Canal Commission. Mr. Weinberger asked me to stay on; they put 
in some legislation that allowed me to do that after I left my 
other job. So I'm doing that now, and that takes a fair amount 
of time. I just spent ten days I got back last week in 
Washington and Panama. We have quarterly meetings of the commis 
sion. 



69 



Chall: What is this? 

Gianelli: It's the operation. The commission, under the treaty, is 

responsible for the operation of the Panama Canal. We have an 
administrator on the job full time. I'll be going back in 
March to testify before the Appropriations Committee on appropria 
tions for the commission. But mainly we're an oversight policy 
board to running the canal, the physical running of the canal. 

And I accepted the chairmanship of the Western Water Education 
Foundation, which is based in Sacramento, and I'm now the 
president of that on a non-pay, volunteer, basis. I've just 
been elected to the board of my country club here. And I'm doing 
a little work. I have a couple of people that I do a little 
work for; Bechtel has asked me to do some things for them, 
so I've been involved a little bit in the private consulting 
field there. 

Chall: That's enough fora partly retired person. 

Gianelli: It's getting to be much. I still want to play golf a little 
bit, too, which is why I'm here. 

Chall: When you left the state, Mr. Teerink was appointed in your place. 
How did that come about? 



Gianelli: I recommended that John be the one that should succeed me, 

because he was a career employee, he'd been a deputy under me, 
and I felt he could carry out, for the remaining time less 
than a year" and a half the tasks that had to be done to move 
along the track that we'd started while I was there. And so 
the governor was gracious enough to go along with my recommen 
dation. 

Chall: Now, he said, when he took over, "We need to recognize that 
mistakes have been made, and the fact that public values and 
attitudes are changing." Do you know what he meant by that? 

Gianelli: No, not for sure, except I suspect that he was talking about 

some of the environmental issues, maybe. I don't know for sure 
but I think that's probably it. 

Chall: Did he have the same point of view as you did? 

Gianelli: I think basically. It was interesting, going back. Mr. Teerink 
went to work for the state engineer about six months after I 
did in 1946. But he stayed with them, whereas I left in 1960. 
He stayed with them continually, and I made him a deputy director. 




All six men who have served under Democratic and Republican administrations as Director 
of the State Department of Water Resources were present at Western Water Education 
Foundation's Water Briefing in Sacramento, April 22, 1985. From left to right are 
former Directors Harvey 0. Banks, William Warne, William Gianelli, John Teerink, Ron 
Robie, and present Director David Kennedy. 



Photograph eourtesy of Department of Water Resources 



70 



Gianelli: So he didn't leave; in fact, he was hoping to stay on when Jerry 
Brown came in. He stayed on three or four months, and then 
was finally replaced by Mr. [Ron] Robie. But I think he was 
disappointed that he wasn't able to stay on for Mr. Brown. 

But anyway, I knew there would be a change then, and I thought 
for a year and a half it would present fewer problems to the 
governor if he just had someone who was knowledgeable carry on. 
I think that's the way it worked out, basically. 

Chall: I see. You also recommended, when you left, that there be a 

different organizational structure for the Department of Water 
Resources as it became a public utility rather than regular type 
state department. You suggested that it should operate like 
a business, with a general manager reporting to a highly qualified 
board of experts. That didn't come about, did it? 

Gianelli: No, it did not. 

Chall: Is it operating in the same way, then, basically? 

Gianelli: It's operating in the same way as it always has. But I still 
feel that there are advantages to a separate organization that 
would be reportable to a board of directors that you could choose 
somehow or other from appropriate people, and you'd have a general 
manager who would run it. Because it seems to me the department 
still has areas of potential conflict, just by virtue of its 
organization, and that it would be desirable to have the water 
project a separate entity completely that would be operated as 
a business, as a utility. 

Chall: And then the other department functions would function 

Gianelli: Would go to some residual organization that would be left in 

government. They would have things like some of the planning; 
they'd have some of the flood control work; they'd would have 
safety of dams, things of that nature that were not directly 
related to the State Water Project. 



I still think it's a good idea, but politically, I guess, 
apparently not saleable, I suspect. 



it's 



Analyzing Current Water Conservation Issues 



Chall : 



Maybe not. It was hard enough to get the department. We've 
talked a little bit about some of the revised outlooks for the 



71 



Chall: last twenty years or so, since the water project was established. 
I notice that you use the term, too, about "water wasting to 
the sea." Do you think that water does "waste to the sea?" The 
environmentalists, I know, take exception to this phrase, and 
I just wondered whether, in light of the passage of time, you 
still think that water wastes to the sea? 

Gianelli: Oh, yes, I do. Because in times of flood, floods create great 

damages, and if that water can't be stored behind reservoirs, it 
goes to the ocean, and it doesn't do anybody any good, and does 
a lot of harm on the way down. Oh, yes, I still believe that 
there's a lot of water that goes to waste to the ocean. 

Chall: What about water that's just normally flowing from the rivers and 
into the ocean, or into the bay? Do you consider that a waste? 

Gianelli: No. One of the problems you get into on these things is you 

have to relate it to time, when you say waste. You have to relate 
it to time and circumstances. In other words, you can't say, for 
example, "All water that wastes to the ocean all the time, is 
wasted." On the other hand, you can't say that none of it is, in 
my judgment. 

So, if you take a look at the way water occurs in California, your 
hydrologic cycle, you have rains in the wintertime, your heavy 
run-off during the winter months and spring months, and practically 
none in the summer and the fall. So our basic problem in 
California, as I've always seen it, is twofold. 

One, of saving those waters during the winter and the spring 
months when they would go to the ocean as waste, holding them 
over, and then using them in the fall and the summer months, 
when normally the natural flow isn't available. So, in answer 
to your question, I'd say, in the summertime and the fall, "No, 
you need all the water that comes down to repulse salinity, and 
provide for the fisheries, and so forth, and you need even to 
augment it." But in the wintertime, when you have your surpluses, 
then I say, "Yes, water does waste to the ocean." So you have 
to relate it to time, really, and to circumstances. Neither 
statement is 100 percent true. You can't say that all water is 
wasted when it goes to the ocean, and you can't say that none of 
it is needed . 

Chall: Years ago, desalinization was considered the key to the future. 
Particularly it was tied, I think, to nuclear energy. What 
about that prospect now? 

Gianelli: The thing that created the big problem for desalinization was 

the high cost of power, because basically any desalinization plant, 
no matter what you call it, is largely a large tea kettle. And 



72 



Gianelli: what it does is to heat the water and condense the steam, and 
that's where you get your fresh water. 

The point is that any desalinization process takes a very large 
amount of energy. So, we were just getting it down to a reason 
able cost in about 1973 when the energy crisis came along, and 
that caused the price of oil energy to go up so high that it just 
made a desalinization plant not very feasible as compared with 
other alternatives. So that's the problem with desalinization. 

It still is available for places like Israel, where they have 
no other choice. It's used aboard ship, when you don't have any 
other alternative, but where you have other alternatives, like 
developing surface supplies, or catching flood flows in the winter 
time, it doesn't compare, normally, economically with other 
alternatives . 

Chall : And nuclear energy 

Gianelli: The reason why it's tied to nuclear energy is because that was 
believed to be a new, unlimited source of energy that could be 
used. It could be steam, it could be coal, it could be nuclear, 
it could be anything . But nuclear was coming into being at that 
time, and it was thought it was the only way to go in the future. 
I think there are some changes that have taken place since then. 

Chall: It's not considered now the sole choice for the future, if any 
choice. What about wastewater treatment? There was some that 
was done in the Lake Tahoe region going down to what, Santee? 
Those people who are opposed to the State Water Project always 
talk about wastewater treatment as a way, even, of using up 
some of the waters that come from irrigation. 

Gianelli: Wastewater reclamation is a very important part of our water 

budget, and I think much more has to be done. Again, economics 
come into play. This area here has tried to save some for the 
golf course, but the economics of it are very difficult. So, 
I would say wastewater reclamation certainly has a place, but 
it isn't the overall answer, because most of the time, large 
amounts of wastewater occur in areas where it's hard to reach. 

For example, it may occur in an area close to the ocean, where 
your need may be back up many miles away from that . And then 
the cost of the process to clean it up is quite expensive. So 
I would say that it still is a very important part, and as water 
becomes more expensive, it will become more viable as an 
alternate source, but even then it's going to be limited in terms 
of how far it can be used, in my judgment. 

Chall: Weather modification. 



73 



Gianelli: 



Chall: 
Gianelli: 



Chall : 



Gianelli: 



Chall : 

Gianelli: 
Chall : 

Gianelli: 



Chall : 



Weather modification has a place. But I think that the technical 
people now have concluded that you can't make rain if certain 
cloud conditions are not in existence, and so what weather making 
does is to induce rain where you have certain kinds of cloud con 
ditions. And some of the power companies, PG&E and others, still 
employ people to modify the weather to create rain at certain 
times in certain areas. 

It's actually being done? 

It's being done. I think PG&E does it in one of the basins of 
the Sierras, and I think Southern California Edison does it over 
on the other side of the mountain, and it's being done in some 
other states. But again, you have to have cloud conditions there 
that will allow you to induce rain from those clouds before it's 
successful, and that's quite limited. I would say it's a tool, 
but it's not again, certainly, the ultimate answer, and it's only 
applicable under certain conditions . 

We did talk about groundwater control. So, there are only limited 
ways of developing water for future uses, I guess is what you 
can say . 

I always felt, and I think we used to say this, that California's 
very fortunate , because within its boundaries we think we have 
enough water that originates with our boundaries to take care 
of the ultimate needs of the state, and I think that's still true. 

But that envisions the development of many surface supplies as 
well as weather modification, wastewater reclamation, groundwater 
management, and so forth. It still involves all those things. 



Do you think we'll find ways of getting this necessary 
time? 

We will if the need is great enough . 



water in 



But so far it hasn ' t proved to be as great as we thought it would 
be? 

We need some more floods, or we need some more droughts, that's 
what always makes water projects go. The Feather River Project 
was built after the '55 flood. If we hadn't had the '55 flood in 
Yuba City, I don't think Oroville would have ever been built. 

And you had other things as a result of droughts that occurred. 

Some of the water agencies that have contracted for water haven't 
needed it to the extent they thought they would. So there's a 
certain amount of transfer from one to another. Does this have 



74 



Chall: to be done through the state agency, or do you think they could 
just do it themselves? 

Gianelli: The problem arises in that you built a state system to take water 
to certain areas, and those areas have contracts. This happened, 
for example, in I think, Santa Barbara County. Santa Barbara 
County has a contract with the state. Now, luckily, the convey 
ance facility out to Santa Barbara County has not been constructed, 
Originally there was going to be a coastal aqueduct that served 
San Luis Obispo and Santa Barbara County. They haven't built 
that. But, there are provisions of the aqueduct to take water 
down to that point. Capacity is built in, and those people are 
paying even though they are not taking anything . They are paying 
a certain share of the fixed costs. 

So, I think it's all right for some of those people to work out 
arrangements, but the state's got to approve it because it has 
the main responsibility for delivering the water to certain points 
For example, case in point: supposing you decided to transfer 
all the water from Kern County to southern California. The 
state couldn't do that, because it doesn't have enough capacity 
in those Tehachapi pumps to take all of it out there. It holds 
only a certain amount . 

So the state's got to be involved with approval of those things, 
but I think the locals could inititate the action with state 
approval . 



Reviewing the Early History of the State Water Project 



Chall : 



Gianelli: 



I think we're through then, 
say in addition? 



Is there anything that you want to 



There's one thing I'm surprised you didn 't hit . You know, the 
big controversy that led up to the State Water Project was the 
north-south thing. That was interesting, the way that was all 
resolved. Now, you have to go back certainly, prior to the time 
that I was director. 

But during the Goodwin Knight administration, the appropriation 
of funds to start the State Water Project was withheld, pending 
what everybody thought was necessary a constitutional amendment. 
I remember when Goodie Knight created a Water Lawyers Committee, 
composed of fourteen water lawyers, seven from the north, seven 
from the south, seven legislators and seven non-legislators, to 
come up with their recommendations. 



75 



Gianelli: 



Chall : 
Gianelli: 

Chall : 
Gianelli: 



I was a civil servant, and I was appointed as the technical 
person to be available for that lawyer committee . This was 
1957. We met on weekends trying to resolve it, and they came 
up with a draft of a constitutional amendment to sove the north- 
south problem. 

The difficulty was and you must have gotten into this, maybe 
Bill Warne covered it, although he wasn't here then, either 
was that the north was afraid that if it let the water go south, 
that at some time in the future, it wouldn't have it to call back 
if it needed it. The south was afraid that if it spent its money, 
tax base usually, to build the works to take water down south, 
that at some point in time the north would take it back from 
them, and they'd have a dry aqueduct. 

Anyway, that issue never got resolved in the Goodwin Knight 
administration. The way Pat Brown resolved it when he came in 
was to say, "Let's not talk about a legal, constitutional amend 
ment. Let's talk about a project that will serve both the north 
and the south." And so that's when he put together the Burns- 
Porter Act, and part of the spill-off in the Burns-Porter Act of 
the north-south thing was Pauline Davis got the Davis-Grunsky 
Act through. 

The Davis-Grunsky Act took off $130 million largely aimed at 
providing loans and grants to small entities in northern California 
and central California, and it's worked that way. It's really 
worked that way. So an important part of the north-south issue, 
was the way that was resolved by creating that particular $130 
million I think it was, for loans and grants to the mountain 
counties in the northern California area, as part of the bond 
issue . 

And also building both ends of it almost simultaneously. 

And building Oroville; it had flood control. Flood control, as 
I indicated, was very important to the area around Yuba City 
and Marysville, and so forth. 



It was very clever, 
plan 



I think the people who came up with this 



The other thing that happened I don't know whether you picked 
this up, but, you see, Goodie Knight couldn't do it; he didn't 
do it. And Pat Brown was able to do it because he put together 
a coalition in the legislature. He got people like Hugh Burns 
well, see, it was the Burn-Porter Act he got Hugh Burns on the 
senate side, who had the respect and control of the senate, and 
he had Carley Porter, who was highly respected on the assembly side. 



76 



Gianelli: And those two people, being the advocates for it, and having the 
political muscle that they did, were able to put this thing 
through, it would never have gone through if it hadn't been for 
Pat Brown politicizing this thing in the way that he did, and 
having those people involved who were responsible for its going. 

Chall: And then of course he had Banks and Brody on the sidelines. 

Gianelli: I got in the middle between Banks and Brody. They were kind of 
like a couple of bantam roosters going back and forth. Ralph 
Brody felt that he was Pat Brown's man, and I think he was a 
little distrustful of Harvey Banks. And Harvey felt that he 
was an important person in making the thing go. That's one of 
the reasons I presented most of the testimoney, because I think that 
was the only compromise that the two of them could reach. 

So I think that I was caught, in some instances, in the middle of 
the problem between Brody and Banks who, while they got along 
on the surface very well, I think underlying it, one was highly 
suspicious of the other in terms of his motives and loyalties. 

Chall: Some of that comes out in their oral histories, but I do recall 
that Ralph Brody said that you had given him a great deal of 
assistance. Whenever he really needed some material that he 
felt he could trust, then he would call on you.* 

Gianelli: I was looked upon as the staff person knowledgeable with the 
project, so that I think Brody felt free to call on me. And 
of course Harvey I'd worked with him before, and we had a 
rather close personal relationship, so I think he was glad to 
have me be the one that filled this role. 

Chall: Speaking of personal relationships, did you develop one with 
Governor Reagan, or President Reagan, ultimately? 

Gianelli: I think so. In fact, you would be interested, when I was back 
last year, we had a meeting with the president of Panama in 
President Reagan's office. We were talking about the Panama 
Canal, and so forth. 



* See Ralph M. Brody, "Devising Legislation and Building Public 
Support for the California Water Project 1959-1960; Brief History 
of the Westlands Water District, " an oral history interview 
conducted in 1980, in California Water Issues, 1950-1966, Regional 
Oral History Office, The Bancroft Library, University of California 
Berkeley, 1981, p. 7. 



77 



Gianelli: He said, "Let me tell you about Bill." And so he then took about 
fifteen minutes, it seemed to me well, not that long, but 
several minutes to reflect what we were able to do in California 
with respect to the State Water Project. 

He always has had that very much on his mind. When he got all 
through, I said, "Mr. President, the Peripheral Canal is not like 
the Panama Canal, there's an awful lot of difference, and the 
problems are altogether different." So, we had a very amazing 
exchange. I didn't see him but very little during the time he 
was president and I was back there, because there are too many 
people and too many things going on. 

But when I did get a chance to see him, I always felt that we 
had sort of a warm relationship going back to the water project. 
There were times when I remember when we started up the Delta 
pump, he had the loudspeaker turned on, and he was going to press 
the button, and I said, "Governor, don't touch that!" or some 
thing like that. I came on really strong, and it came out over 
the loudspeaker, and he's always kidded me about that. 

Then the other one was on the Tehachapis . When we turned on 
the pump on the Tehachapis , it didn't work the first time. We had 
the governor there; we had people from Washington there, and the 
pump didn't work. Because what we had to do was to take the 
starting motor, and get it up to what we call synchronous speed. 
Unfortunately, the starting motor went too far and we had to start 
all over. So what happened was that the governor and the official 
party left before the pump started working. But it did work a 
few minutes later . 

Chall: That is a memorably frustrating experience. Thank you very much 
for your time and for a most interesting interview. 



Transcriber: Michele Anderson 
Final Typist: Stella Dao 



78 



TAPE GUIDE William Gianelli 



Date of Interview: January 29, 1985 

tape 1, side A 1 

tape 1, side B 14 

insert from tape 3, side B 19 

resume tape 1, side B 22 

tape 2, side A 29 

insert tape 3, side B 42 

tape 2, side B 44 

tape 3, side A 55 

tape 3, side B 68 



APPENDIX 79 

WILLIAM R. GIANELLI 

EXPERIENCE RECORD AND BIOGRAPHICAL SUMMARY 
June 1984 to Present 

(1) Consulting Civil Engineer specializing in the 
field of water resource development and related 
matters. 

(2) Serves as Chairman of the Board of Directors of 
the Panama Canal Commission responsible for the 
operation of the Panama Canal. 

April 1981 to May 1984 

Assistant Secretary of the Army for Civil Works 

(1) Responsible for, on behalf of the Secretary of 
the Army, overseeing the Civil Works program 
for water resources of the U.S. Army Corps of 
Engineers, with focus mainly on policy 
formulation, program objectives, review and 
approval of planning studies, and budget 
guidance, review and approval. 

(2) Serves as Chairman of the Board of Directors of 
the Panama Canal Commission responsible for the 
operation of the Panama Canal. 

(3) Also responsible for the administration of 
Arlington and Soldiers' Home National 
Cemeteries. 

i 

September 1973 to March 1981 

Consulting Civil Engineer 

(1) Specializing in the fields of water supply, 
water rights, and related problems. Conducted 
and reviewed studies on availability of surface 
and groundwater supplies for power plants, 
public works projects, and other 
installations. Acted as expert witness before 
courts and legislative bodies. 

(2) Chairman and Member of the Board of Directors 
of the Monterey Peninsula Water Management 
District, 1978 - 1980. 

(3) Member of National Commission on Water Quality 
under Presidential appointment, 1973 -1976. 



80 

(4) Chairman, Special Task Force, to review 
policies and procedures of U.S. Bureau of 
Reclamation for western reclamation projects, 
under appointment of Secretary of Interior, 
1973. 

(5) California Director, National Water Resources 
Association, 1979 - 1981. 

(6) Member of three-man arbitration board - PG&E - 
SMUD, regarding Rancho Seco Nuclear Power Plant 
problem, 1978 - 1981. 

January 1967 to September 1, 1973 

Director, California State Department of Water 
Resources 

(1) Supervision over the planning, financing, 
design, construction and operation of the 
California State Water Project, the largest 
single water conservation and conveyance system 
ever built. Responsible for the expenditure of 
approximately one and a half billion dollars 
for completion of first phase of project with 
physical works extending over 600 miles 
throughout the State. 

(2) Supervision over: 

a. Statewide water resources development. 

b. Statewide water resources planning. 

c. Wastewater reclamation, desalinization, 
and weather modification programs. 

d. Flood control and floodplain programs. 

e. Statewide dam safety program. 

(3) Appearances before State and Federal 
legislative bodies in furtherance of programs 
under supervision of Office of Director. Acted 
as expert witness before courts and 

quasi- judicial State and Federal agencies on 
matters relating to State water problems. 

(4) Chairman for two years and Vice Chairman for 
two years, Western States Water Council, which 
was organized by western Governors, to provide 
a coordination voice in western water 
development. 

(5) Principal advisor to Governor on California 
water problems. Also served on numerous 
committees concerned with water-related matters. 



81 

March 1960 to January 1967 

Consulting Engineer - Senior Partner, Gianelli 
and Murray, Consulting Civil Engineers 

(1) Engineer member of three-man team negotiating 
water supply contracts for water users along 
the Sacramento River. 

(2) Represented numerous municipalities and 
districts to assist in developing supplemental 
water supplies for municipal, irrigation, power 
and recreational purposes. 

(3) Represented numerous clients as expert witness 
in litigation and before quasi- judicial bodies 
on matters relating to water rights and water 
supply. 

(4) Conducted and supervised studies concerning 
availability of water from surface and ground 
water sources. 

(5) Chairman, three-man Board of Consultants 
appointed by the Secretary of Interior, to 
review repayment problems of the Columbia Basin 
project in the State of Washington. 

October 1959 to March 1960 

District Enaineer, Southern District, California 
State Department of Water Resources 

(1) Supervised all activities of the Department in 
Southern California. 

(2) Represented the Director of Water Resources on 
various water-related matters in the southern 
California area. 

July 1956 to September 1959 

Staff Engineer and Special Assistant to the Director, 
California State Department of Water Resources 

(1) Engineer in charae of Watermaster activities 
involving distribution of water under court 
decrees. 

(2) Engineer assianed to State Legislative 
Committees attempting to solve north-south 
water problems. 



82 

(3) Represented the Director before legislative and 
congressional committees in presenting 
testimony in furtherance of the State Water 
project. 

(4) Represented the State of California in compact 
negotiations with other states on water 
allocations. 

January 1946 to July 1956 

Junior to Principal Hydraulic Engineer, California 
State Engineer's Office 

(1) Engineer in charqe of water rights and water 
distribution activities within the State. 

(2) Supervision of studies under adjudication of 
water rights. 

(3) Assistant State Snow Surveyor and distribution 
of water under court decrees. 

July 1941 to December 1945 

Second Lieutenant to Major, U.S. Army Corps of 
Engineers 

Served as platoon leader, Company Commander, and 
Battalion Executive Officer of U.S. Army 
construction troops in Hawaii, Saipan, Okinawa, and 
Korea, rebuilding airfields and constructing water 
supply facilities. 



83 
PLACE AND DATE OF BIRTH 

Stockton, California, February 19, 1919 
EDUCATION 

University of California, Berkeley, California 
Graduated May 1941, Bachelor of Science Degree, Civil 
Engineering, Irrigation option 

REGISTRATION 

Registered Civil Engineer, No. 7539, State of California 
Registered Civil Engineer, No. 1613, State of Nevada 

PROFESSIONAL ORGANIZATIONS 

Fellow Member, American Society of Civil Engineers 
Honorary Member, American Waters Works Association 

OTHER ACTIVITIES 

Member, California State Personnel Board under 
appointment from Governor, 1973 - 1981. 

Member, Board of Directors, California Public Employees' 
Retirement System, 1978-1981. 

Member, Board of Directors, California Chamber of 
Commerce, 1978-1981. 

HONORS 

(1) Distinguished Service Award, January 1972, 
California Council of Civil Engineers and Land 
Surveyors. 

(2) Construction Man of the Year, February 1973, 
Engineering News Record. 

(3) Public Works Man of the Year, One of the Top Ten 
Public Works Men of the Year for 1973, American 
Public Works Association and other organizations. 

(4) Honorary Member, American Waters Works Association, 
1973. 

(5) Royce J. Tipton Award for outstanding contributions 
in the field of irrigation and drainage, ASCE, 1973, 

(6) Distinguished Service Award for 1973, Soil 
Conservation Society of America. 



84 

(7) Special award in appreciation for contributions to 
the people of California as Director of Water 
Resources, Association of California Water Aqencies, 
November 1973. 

(8) The SIR Award (Skill, Integrity and Responsibility) 
in recognition for contribution to the construction 
industry, Association of General Contractors of 
California, December 8, 1973. 

(9) U.S. Department of Interior, Bureau of Reclamation, 
Citizen Award, in recognition of outstanding 
leadership in the effective development of the 
Nation's water resources, December 4, 1975. 

(10) U.S. Department of Defense Medal for Distinguished 
Public Service, April 1984. 

(11) U.S. Department of the Army Decoration for 
Distinguished Civil Service, May 1984. 

(12) Distinguished Engineering Alumnus 1986 award, by 
the University of California, Berkeley Engineering 
Alumni Society, April 25, 1986. 

(13) Water Leader of the Year, 1985, for outstanding 
achievement in the field of water resources, by 
the Association of California Water Agencies, 
May 7, 1986. 



May 1986 



85 



INDEX William R. Gianelli Eiland, Robert, 6, 13 

Ely, Northcutt, 62-63 
environmentalists, 50-51, 52 

acreage limitation, 26-27, 40-41 Fish and Game, Department of, California, 
Andrus, Cecil, 54 30-32, 49 

Arnett, Ray, 30, 32 

Gianelli, William R., 

Banks, Harvey, 3-4, 76 as assistant secretary of the army, 

Behr, Peter, 54 34, 37-40 

Brody, Ralph, 76 in Department of Water Resources, 3-4, 

Brown, Edmund G., Jr. (Jerry), 23, 48 12 

Brown, Edmund G., Sr . (Pat), 7, 13, as director Department of Water 

19, 75-76 Resources, 1, 3, 5-66 

Burns, Hugh, 75 in Division of Water Resources, 4, 12 

Burns-Porter Act, 3, 13, 17 on Panama Canal Commission, 68-69 

on state Personnel Board, 67-68 
Golze, Alfred, 5-6 

cabinet, governor's (Ronald Reagan), groundwater management, 59-61 

8, 53 

California Water Commission, 8-10 

California [State] Water Project, Hayden, Carl, 62, 64 

construction of, 15-16, 18, Hill, Clair, 10 

44-66, 77 Hosmer, Craig, 62 

electric power contracts, 22-27 Hunt, John, 12, 13 
engineering problems, 13, 42-43 
financing of, 7, 12-34, 41-43 

history of, 74-76 Indians, 53-54 
personnel for, 35-37 
Chrisman, Ira J. (Jack), 10 

Central Arizona Project, 61-64, 65-66 Jackson, Henry (Scoop), 63-64 

Central Valley Project, 45-47, 56 Johnson, Harold (Bizz) , 62 
Coke, Earl, 40 
Cologne, Gordon, 18-19 

Corps of Engineers, U.S. Army, Knight, Goodwin, 74-75 

34, 37-40, 51-52 Kuchel, Thomas H., 64 

Davis-Dolwig Act, 28-29 Livermore, Norman B., Jr. (Ike), 7, 8, 

Davis-Grunsky, 13, 29 52-54 

desalinization, 71-72 

Deukmejian, George, 48, 49 

Dillon Read, 12 Mau?han, Don, 65 

Dos Rios dam, 51-55 Meese, Edwin, III, 54 

Miller, George, Jr., 17-18 
Mott, William Penn, 32 
Murphy, George, 64 



*Unless otherwise noted, departments and agencies listed are units of California 
state government 



86 



Nesbit, Raymond, 29 
nuclear energy, 72 



Panama Canal Commission, U.S., 68-69 
Parks and Recreation, Department of, 

California, 32-33 
Peripheral Canal, 14, 44-50 
Porter, Carley, 75 
Post, A. Alan, 15 
power, electric, 22-27 
Priest, Ivy Baker, 27-28 
Proposition 7 (1970) to increase the 

interest ceiling on bonds, 25- 

26 



wastewater reclamation, 72 
water agencies and administration, 
federal and state governments, 

compared, 34, 37-40 
water, conservation of, 71-74 
Water Resources, Department of, 

California, 1-77 
water, transfers of, 73-74 
weather modification, 73 
Weinberger, Caspar, 5 
Western States Water Council, 64-65 
Western Water Education Foundation, 

19, 69 
Wild and Scenic Rivers Act, 52, 54-55 



Reagan, Ronald, as governor, 1-2, 

7-8, 9, 17, 36, 40, 45, 52-54, 

55, 67, 77 
Reagan, Ronald, as president, 

39-40, 76-77 
recreation, 28-34 
Recreation, Department of, 

California, 30 
Resources Agency, California, 

7, 30-31 



San Luis Drain, 14, 55-59 
State Water Project. See 

California [State] Water Project 
Steiner, Wesley, 65 



Task Force on Acreage 

Limitation, 40-41 
Task Force on Governmental 

Efficiency, 33-34 
Task Force on Recreation, 29 
Task Force on Water Resources, 

7, 10, 13-14, 16, 34 
Teerink, John, 5-6, 69-70 
tidelands oil funds, 16-21 



Waldie, Jerome, 57 
Warne, William, 1, 11, 19, 44, 48, 
55-56 



GOVERNMENT HISTORY DOCUMENTATION PROJECT 

Ronald Reagan Era, 1966-1974 
Interviews Completed or In Process, June 1986 



Single Interview Volumes 



Beilenson, Anthony C., "Securing Liberal Legislation During the Reagan 
Administration," UC Los Angeles, 1982, 81 pp. 

Breslow, Lester, "Vision and Reality in State Health Care: Medi-Cal and 
Other Public Programs, 1946-1975," DC Berkeley 1985, 96 pp. 

Burke, Yvonne Brathwaite, "New Arenas of Black Influence," UC Los Angeles, 
1982, 46 pp. 

Busterud, John A., "The California Constitution Revision Commission," 
Claremont, 1982, 37 pp. 

Carleson, Robert, "Stemming the Welfare Tide," UC Berkeley, 1985, 107 pp. 

Coke, J. Earl, "Reminiscences of People and Change in California Agriculture, 
1900-1975," UC Davis, 1976, 265 pp. 

Dales, Jack, "Pragmatic Leadership: Ronald Reagan as President of the Screen 
Actors Guild," UC Los Angeles, 1982, 49 pp. 

Darling, Dick, "Republican Activism: The California Republican Assembly and 
Ronald Reagan," UC Los Angeles, 1981, 56 pp. 

Dunckel, Earl B., "Ronald Reagan and the General Electric Theatre, 1954-1955," 
UC Berkeley, 1982, 46 pp. 

Dunne, George H., "Christian Advocacy and Labor Strife in Hollywood," UC 
Los Angeles, 1981, 67 pp. 

Finch, Robert H., "Views From the Lieutenant Governor's Office," CSU 
Fullerton, 1983, 107 pp. 

Flournoy, Houston I., "California Assemblyman and Controller," Claremont, 
1982, 235 pp. 

Gianelli, William, "The California State Department of Water Resources, 
1967-1973," UC Berkeley, 1986, 86 pp. 

Livermore, Norman B., Jr., "Man in the Middle: High Sierra Packer, 

Timberman, Conservationist, and California Resources Secretary," UC 
Berkeley, 1983, 285 pp. 



Livingston, Donald G., "Program and Policy Development in Consumer Affairs 
and the Governor's Office," DC Berkeley, 1986, 90 pp. 

Plog, Stanley, "More than Just an Actor: The Early Campaigns of Ronald 
Reagan," UC Los Angeles, 1981, 29 pp. 

Reagan, Neil, "Private Dimensions and Public Images: The Early Political 
Campaigns of Ronald Reagan," UC Los Angeles, 1981, 58 pp. 

Reinecke, Ed, "Maverick Congressman and Lieutenant Governor for California, 
1965-1974," UC Berkeley, 1986, 96 pp. 

Riles, Wilson C., '"No Adversary Situations': Public School Education in 
California and Wilson C. Riles, Superintendent of Public Instruction, 
1970-1982," UC Berkeley, 1984, 134 pp. 

Wright, Donald, "A View of Reagan and the California Courts," CSU Fullerton, 
1984, 87 pp. 

Younger, Evelle J., "A Lifetime in Law Enforcement," UC Los Angeles, 1982, 
60 pp. 



Mu It i- Interview Volumes 



APPOINTMENTS, CABINET MANAGEMENT, AND POLICY RESEARCH FOR GOVERNOR RONALD 
REAGAN, 1967-1974, UC Berkeley, 1983, 232 pp. 

Adams, Winfred, "Strategies for Republican Elections, State Government 

Management, and Water Resources, 1963-1976." 
Haerle, Paul R., "Ronald Reagan and Republican Party Politics in 

California, 1965-1968." 

Martin, Jerry C., "Information and Policy Research for Ronald Reagan, 
1969-1975." 

THE ART OF CORRECTIONS MANAGEMENT, CALIFORNIA 1967-1974, UC Berkeley, 1984, 

146 pp. 

Breed, Allen F. , "Theory and Practice in Juvenile Justice." 
Procunier, Raymond K. , "Administering Your Prisons." 

THE ASSEMBLY, THE STATE SENATE, AND THE GOVERNOR'S OFFICE, 1958-1974, 
UC Berkeley, 1982, 490 pp. 

Bagley, William, "Some Complexities of Social Progress and Fiscal 

Reform. " 
Mills, James R., "A Philosophical Approach to Legislative and Election 

Realities, 1959-1981." 
Monagan, Robert T., "Increasing Republican Influence in the State 

Assembly." 
Rodda, Albert, "Sacramento Senator: State Leadership in Education and 

Finance." 



GOVERNOR REAGAN AND HIS CABINET: AN INTRODUCTION, UC Berkeley, 1986, 174 pp. 
Luce, Gordon, "A Banker's View of State Administration and Republican 

Politics." 
Orr, Verne, "Business Leadership in the Department of Motor Vehicles and 

State Finance." 
Reagan, Ronald, "On Becoming Governor." 

GOVERNOR REAGAN'S CABINET AND AGENCY ADMINISTRATION, DC Berkeley, 1986, 213 pp. 
Brian, Earl W., "Health and Welfare Policy, 1970-1974: A Narrow 

Spectrum of Debate." 
Stearns, James G., "Joining Reagan's Campaign in Sacramento: 

Conservation, Agriculture, and Employee Relations." 
Thomas, Edwin W. , Jr., "The Governor's Cabinet as Policy Forum." 
Walton, Frank J., "Transportation Policies and the Politics of 

Conservatism, 1964-1974." 

DEMOCRATIC PARTY POLITICS AND ENVIRONMENTAL ISSUES IN CALIFORNIA, 1962-1976, 
UC Berkeley, 1986, 101 pp. 

Boas, Roger, "Democratic State Central Committee Chairman, 1968-1970." 
Warren, Charles, "From the California Assembly to the Council on 
Environmental Quality, 1962-1979: The Evolution of an 
Environmentalist." 

CALIFORNIA STATE DEPARTMENT OF FINANCE AND GOVERNOR RONALD REAGAN, 
UC Berkeley, 1986, 125 pp. 

Beach, Edwin W., "Some Technical and Political Aspects of State 

Budgeting." 

Bell, Roy M. , "Revenue Policies and Political Realities." 
Dwight, James S., "Early Reagan Administration Perspectives on State 
Finance, 1966-1967." 

THE GOVERNOR'S OFFICE AND PUBLIC INFORMATION, EDUCATION, AND PLANNING, 
1967-1974, UC Berkeley, 1984, 301 pp. 

Beck, Paul, "From the Los Angeles Times to the Executive Press Office, 

1967-1972." 
Sherriffs, Alex C., "Education Advisor to Ronald Reagan and State 

University Administrator, 1969-1982." 
Tooker, John S., "Director of the Office of Planning and Research, and 

Legislative Assistant, 1967-1974." 
Hannaford, Peter, "Expanding Political Horizons." 

THE HISTORY OF PROPOSITION #1: PRECURSOR OF CALIFORNIA TAX LIMITATION 

MEASURES, Claremont, 1982, 102 pp. 

Stubblebine, William Craig, "The Development of Proposition #1." 
Uhler, Lewis K. , "Chairman of Task Force in Tax Reduction." 



INTERNAL AND EXTERNAL OPERATIONS OF THE CALIFORNIA GOVERNOR'S OFFICE, 1966- 
1974, UC Berkeley, 1985, 235 pp. 

Gillenwaters, Edgar, "Washington Office Troubleshooter and Advocate for 

Commerce in California, 1967-1973." 
Jenkins, James, "Public Affairs, Welfare Concerns in Washington and 

Sacramento." 

Procunier, Florence Randolph, "Working with Edwin Meese." 
Walker, Robert, "Political Advising and Advocacy for Ronald Reagan, 

1965-1980." 
Walton, Rus, "Turning Political Ideas into Government Program." 

ISSUES AND INNOVATIONS IN THE 1966 REPUBLICAN GUBERNATORIAL CAMPAIGN, 

UC Berkeley, 1980, 187 pp. 

Nofziger, Franklyn C., "Press Secretary for Ronald Reagan, 1966." 
Parkinson, Gaylord B. , "California Republican Party Official, 1962-1967." 
Roberts, William E., "Professional Campaign Management and the 

Candidate, 1960-1966." 
Spencer, Stuart K. , "Developing a Campaign Management Organization." 

THE "KITCHEN CABINET": FOUR CALIFORNIA CITIZEN ADVISERS OF RONALD REAGAN. 
CSU Fullerton, 1983, 157 pp. 

Dart, Justin 

Mills, Edward 

Salvatori, Henry 

Tuttle, Holmes 

LAW ENFORCEMENT AND CRIMINAL JUSTICE IN CALIFORNIA, 1966-1974, UC Berkeley, 
1985, 300 pp. 

Ellingwood, Herbert, "Law Enforcement Planning and Coordination, 1969- 

1974." 
Gunterman, Joseph F. , "Sacramento Advocate for the Friends Committee 

on Legislation of California." 
Houghton, Robert A., "Law Enforcement Planning in the Reagan 

Administration, 1971-1974." 
Marinissen, Jan, "'To Let the Legislature Know 1 : Prison Advocacy and 

the American Friends Service Committee in California, 1960-1983." 
Palumbo, Anthony L., "Law Enforcement, Emergency Planning, and the 

Califonia National Guard, 1965-1974." 

LEGISLATIVE-GOVERNOR RELATIONS IN THE REAGAN YEARS: FIVE VIEWS, CSU 

Fullerton, 1983, 157 pp. 

Carpenter, Dennis E., "Republican State Committee Chair and 

Senator." 

Beverly, Robert, "Reflections of a Republican Assemblyman." 
Zenovich, George, "Senate Democrat in the Reagan Government." 
Moretti, Robert, "Recollections of an Assembly Speaker." 



LEGISLATIVE ISSUE MANAGEMENT AND ADVOCACY, 1961-1974, UC Berkeley, 

1983, 315 pp. 

Cory, Ken, "Education Consultant and Assemblyman, 1961-1974." 

Hall, Kenneth, '"Playing Devil's Advocate': The Governor's Office and 

The Department of Finance in California, 1966-1974." 
Kehoe, John, "Advocacy for Education, Consumerism, and Governor Ronald 

Reagan, 1966-1974." 
Miller, John, "Issues of Criminal Justice and Black Politics in 

California, 1966-1974." 
Sturgeon, Vernon, "State Senator, Reagan Advisor, and PUC Commissioner, 

1960-1974." 

ORGANIZATIONAL AND FISCAL VIEWS OF THE REAGAN ADMINISTRATION, UC Berkeley, 

1984, 183 pp. 

Post, A. Alan, "Public Aims and Expenditure: A Divergent View." 
King, Warren, "Governor Reagan's Use of Task Forces and Loaned 

Executives, 1966-1968." 
Volk, Robert, Jr., "Government Reform and the Maturity of the Political 

Process." 
Lucas, Harry, "New Approaches to Vocational Rehabilitation." 

POVERTY PROGRAMS AND OTHER CONSERVATIVE POLICY STRATEGIES, 1970-1984, 
UC Berkeley, 1986, 105 pp. 

Chickering, A. Lawrence 

Hawkins, Robert B. , Jr. 

REPUBLICAN CAMPAIGNS AND PARTY ISSUES, 1964-1976, UC Berkeley, 
1986, 201 pp. 

Cristina, Vernon J., "A Northern Californian Views 

Conservative Politics and Policies, 1963-1970." 
McDowell, Jack S., "Press Work and Political Campaigns, 

1966-1970." 
Todd, A. Ruric, "Experience and Advice for the Reagan 

Administration, 1966-1968." 

Watts, Skip (Norman), "Observations of a Youthful Political 
Pro." 

REPUBLICAN PHILOSOPHY AND PARTY ACTIVISM, UC Berkeley, 1984, 142 pp. 

Hume, Jacquelin, "Basic Economics and the Body Politic: Views of a 

Northern California Reagan Loyalist." 
Storrs, Eleanor Ring, "Parties, Politics, and Principles: 'It's at the 

Local Level. 1 " 

Wrather, Jack, "On Friendship, Politics, and Government." 
del Junco, Tirso, "California Republican Party Leadership and 






THE SAN FRANCISCO BAY CONSERVATION AND DEVELOPMENT COMMISSION, 1964-1973, 
UC Berkeley, 1986, 98 pp. 

Bodovitz, Joseph E. , "Management and Policy Directions." 
Lane, Melvin B. , "The Role of Leadership in Setting and 

Maintaining Goals." 

Shute, E. Clement, Jr., "The Place of the Courts in the Solution of 
Controversial Policy Issues." 

SAN FRANCISCO REPUBLICANS, UC Berkeley, 1980, 100 pp. 

Christopher, George, "Mayor of San Francisco and Republican Party 

Candidate." 

Weinberger, Caspar, "California Assembly, Republican State Central 
Committee, and Elections, 1953-1966." 



In Process - March. 1986 

Barrett, Charles, UC Berkeley. 
Bradley, Melvin, UC Berkeley. 
Camilli, Richard, UC Berkeley. 
Canson, Virna, UC Berkeley. 
Carter, Louis, UC Berkeley. 
Connelly, Margarete, UC Berkeley. 
Deaver, Michael, UC Berkeley. 
Dumke, Glenn S. , UC Berkeley. 
Fenlon, Roberta, UC Berkeley. 
Habecker, Jackie, UC Berkeley. 
Hall, James, UC Berkeley. 
Heine, Carolyn, UC Berkeley. 
Lovry, James, UC Berkeley. 
Magyar, Roger, UC Berkeley. 
Meese, Edwin, III, UC Berkeley. 
Miller, Anita, UC Berkeley. 
Mott, William Penn, UC Berkeley. 
Swoap, David, UC Berkeley. 
Watson, Philip E. , UC Los Angeles. 
Way, Howard, UC Berkeley. 

Williams, Spencer M. , "The Human Relations Agency: Perspectives and Programs 
Concerning Health, Welfare, and Corrections, 1966-1970," UC Berkeley. 



Participating Institutions 



Oral History Office, Department of Special Collections, University of 
California, Davis, California, 95616. 

Oral History Program, California State University, Library 243, Fullerton, 



California, 92634 

Oral History Program, Claremont Graduate School, Claremont, California, 
91711. 

Oral History Program, Powell Library Building, University of California, Los 
Angeles, California, 90024. 

Regional Oral History Office, 486 The Bancroft Library, University of 
California, Berkeley, California, 94720. 



Malca Chall 



Graduated from Reed College in 1942 with a B.A. 
degree, and from the State University of Iowa in 
1943 with an M.A. degree in Political Science. 

Wage Rate Analyst with the Twelfth Regional War 
Labor Board, 1943-1945, specializing in agricul 
ture and services. Research and writing in the 
New York public relations firm of Edward L. 
Bernays, 1946-1947, and research and statistics 
for the Oakland Area Community Chest and Council 
of Social Agencies 1948-1951. 

Active in community affairs as a director and 
past president of the League of Women Voters of 
the Hayward Area specializing in state and local 
government; on county-wide committees in the 
field of mental health; on election campaign 
committees for school tax and bond measures, and 
candidates for school board and state legislature. 

Employed in 1967 by the Regional Oral History 
Office interviewing in fields of agriculture and 
water resources. Project director, Suffragists 
Project, California Women Political Leaders 
Project, and Land-Use Planning Project. 



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