The largest water agency in Silicon Valley has been secretly negotiating to purchase a sprawling cattle ranch in Merced County that sits atop billions of gallons of groundwater, a move that could create a promising new water source — or spark a political battle between the Bay Area and Central Valley farmers. The Santa Clara Valley Water District, based in San Jose, is in talks with the owners of the 4-S Ranch, a 5,257-acre property located about 15 miles northeast of Los Banos, for what would be a multi-million-dollar deal to create a huge underground water reserve.