They Bought the Property for $250,000 in 2002; Now, They’re on the Hook for a $200,000 Dam Repair

An illegal dam, constructed 50 years ago by a B.C. government minister, sits on a Crown-owned creek 19 kilometres west of Kamloops, B.C. Photo Courtesy Larry Penner

When Larry Penner, 74, and Jayme Penner, 69, bought a 25-acre parcel in the interior of British Columbia for $250,000 in 2002, with rolling hills, creeks, a waterfall, and lake views, the couple thought they had bought a piece of paradise.

Then the Penners found out there was a nearby concrete dam built by a government cabinet minister for personal use in the 1960s, one that was illegal and improperly constructed and leaving them on the hook for up to $200,000 to meet regulatory demands.

It turns out the property, situated 19 kilometres west of Kamloops, had water licences dating back to 1873, but unbeknownst to the Penners, a dam had been built on nearby Cherry Creek in 1967 by then-B.C. highways minister Philip Gaglardi.

The dam is not owned by the Penners, but they told The Epoch Times that the water licences associated with the dam were attached when they purchased their property.

According to the B.C. government, if you own land that contains or has access to surface water or groundwater, you must pay the province to use the water annually and obtain a water licence.

Larry Penner, property owner. Photo Courtesy Larry Penner

Despite documented issues with the dam since it was built, according to old provincial records, landowners have been charged annually for a water licence for the last 50 years.

On Jan. 3, Mr. Penner and a neighbour were fined $2,000 each for not completing repairs on the dam ordered by the province.

History

In the course of being fined, Penner obtained a 78-page government disclosure with the dam’s history, which he said took nearly a year to get from the province. He has also filed a Freedom of Information request to uncover more.

Government records provided to The Epoch Times dating back more than 50 years indicate the dam was improperly constructed from the start.

The dam is north of the Trans-Canada Highway and upstream of the CP Railway. The original 1967 plans for the dam were drawn by a professional engineer who worked in the Department of Highways for Victoria.

Gaglardi had planned a pumphouse to divert water to irrigate his land to the west and north, and while he applied for the permit, the public servant constructed the dam to “unacceptable standards” and before receiving provincial approval, according to government documents.

The minister, who leased the land from his sons to breed Arabian horses, was accused of using government materials, employees, and equipment to build the dam, without government authorization for the dam or for the use of provincial resources.

On Feb. 24, 1968, an article in the Daily Sentinel accused Gaglardi of falsifying provincial records, after two highway department employees swore affidavits that they worked on the private dam and had been paid on the province’s dime.

Gaglardi claimed the work was done by government workers due to an emergency that threatened to wash out the dam on Cherry Creek.

‘Dam Still Standing’

A provincial engineer documented that the vertical face of the dam was “placed on the downstream rather than the upstream side.”

Penner said he was shocked to learn from government documents that the dam is basically backward.

“The perpendicular side of the diversion structure is on the downstream side, resulting in increased risk of the structure overturning,” he said.

To offset the risk, Gaglardi propped up the dam against a rock with a steel beam. Letters from the province’s engineers to Gaglardi throughout 1968 repeatedly stated the “dam would fail” and overturn under a full water load.

A steel beam props up the illegal dam on Cherry Creek. Photo Courtesy Larry Penner

The province at the time said it could not accept Gaglardi’s engineer’s representation that the dam was safe.

Multiple orders were issued against Gaglardi regarding the dam in 1968, including one that stated, “No authority exists for the storage of water by this concrete dam,” adding that the dam “creates a hazard.”

One particular 1968 document notes the government was “aware that the removal of the dam would constitute a burden on the owner.”

On March 7, 1968, a government order by the province’s district engineer stated that Gaglardi must “present a proposal to make the dam safe” and that failure to do so “may result in an Order to remove the structure.”

On April 2, 1968, a provincial engineer documented that no repairs had been carried out as ordered, the dam gates were in a closed position instead of open as instructed, and water was being pumped to irrigate lands, contrary to previous government orders.

Province Reverses Orders

About two months later, in a June 25, 1968, letter, a provincial official concluded there were no longer concerns about the safety of the dam.

H.D. DeBeck, then-comptroller of water rights, wrote Gaglardi stating that due to “the relatively small quantity of storage impounded behind the dam,” the province had concluded there was “no hazard” to the CP railway track downstream if the dam failed.

In light of this conclusion, wrote DeBeck, “there appears no further necessity for Water Rights Branch involvement in the safety of this structure.”

The letter indicates that the clauses in the water licence that required approval of plans would be deleted, and “instructions pertaining to the construction of the dam” would be “rescinded.”

Fifty years have passed by and the dam is still standing. The Penners own the land bordering Cherry Creek, and a provincial employee is demanding that the couple carry out repairs on the dam and “assess the stability of the dam and to recommend maintenance requirements”—under the supervision of a biologist and dam safety engineer. The repair is estimated to cost hundreds of thousands of dollars.

A letter states that the province is “unaware of the structural history of the dam.”

The B.C. Ministry of Forests is responsible for water licences. The Epoch Times contacted the ministry for comment but was told it was unable to respond by press time.

No Solution

Mr. Penner applied three years ago to abandon the water rights and licence because he was not using any of the water. He says his neighbour, who also has a licence on the creek, uses his own share of the water plus the two shares proportioned to Mr. Penner’s licences.

The neighbour could not be reached for comment. According to Penner, the neighbour does not want to remove the dam because he uses the water to irrigate his land.

Penner said they told the province that the only party using the water is the neighbour, but there has been no response. Penner’s abandonment application has not been processed or responded to, he says. Despite the issue with the dam, the neighbours are cordial, Penner adds.

The Penners cannot sell the property without disclosing the dam issue to a potential buyer. In the meantime, they cannot get the province to cancel the water licence, they are being held responsible for repairs, and they cannot repair the dam that was improperly constructed more than 50 years ago.

His wife says it has been “unbearable,” the stress and expense of fighting against the province in a situation that seems to have no solution.

Liability

The province should never have transferred water licences for the dam to unsuspecting landowners, according to the Penners’ lawyer, Jeff Frame.

“The province knew that the dam was a problem from the very start,” he said, and wants current landowners “to pay to fix a problem caused by [a government minister] and swept under the rug by the province.”

Frame said if a private citizen did what the province did, it would be considered fraud.

“We have all the documents to prove the dam is illegal. The province knew all along the dam was illegal, and the province tried hard to keep my clients from finding out.”

The Penners are considering legal action against the province.