Development Project EIR Set Aside Due To Inadequate Water Supply Assessment, Deferred Mitigation

October 25, 2012 | Bulletin No. 1013065.1

In Preserve Wild Santee et al. v. City of Santee et al. (--- Cal.App.4th ---, Fourth Appellate District Case No. D055215 [October 19, 2012]), the Court of Appeal for California’s Fourth Appellate District held that the environmental impact report (“EIR”) for a nearly 1,400-unit residential development (“Project”) violated the California Environmental Quality Act (“CEQA”) because it failed to provide an adequate water supply analysis and improperly deferred mitigation for biological impacts.  The court further held that not all EIR inadequacies require a project approval and EIR certification to be entirely vacated.

Procedure and Facts

Petitioners Preserve Wild Santee, Center for Biological Diversity and Endangered Habitats League filed a lawsuit challenging the City of Santee’s (“City”) approval of the 1,200-acre development Project and certification of a final EIR.  Although Petitioners claimed the EIR violated CEQA in various respects, the trial court found only that the EIR failed to adequately support its conclusion that the Project’s fire safety impacts would be less than significant.  Accordingly, the trial court issued a limited writ of mandate staying Project activities until the City brought the EIR’s fire safety analysis into compliance with CEQA.  Following an award of costs and attorneys fees, both sides appealed.

On appeal, Petitioners argued that the EIR’s analysis of water supply and biological impacts were inadequate, while no party appealed the trial court’s finding that fire safety impacts were inadequately analyzed.  With respect to water supply impacts, Petitioners argued that the EIR was inadequate because it failed to provide a clear and accurate estimate of the Project’s water demand, failed to provide a reasonable projection of water supply availability to meet Project demand, and failed to analyze potential alternative sources of water supply that would be needed if initial supplies proved inadequate.  With respect to biological impacts, Petitioners argued that the EIR improperly deferred mitigation for the endangered Quino checkerspot butterfly (“Quino”).

Decision

With respect to water supply impacts, the appellate court agreed with Petitioners’ contentions for three reasons.  First, the court faulted the EIR for failing to explain a discrepancy between two estimates of how much water the Project would demand.  The Project’s retail water supplier, Padre Dam Municipal Water District (“District”), had approved a SB 610 Water Supply Assessment/SB 221 Water Sufficiency Verification (“WSA”) projecting that sufficient water supplies would be available to meet the built-out Project’s demand for 881 acre-feet per year (“AFY”) of water, while the water supply section of the City’s EIR had estimated that the Project would demand 1,446 AFY of water.  Although the City and Project proponent contended that the District’s lower water demand estimate was more detailed and accurate than the City’s more generalized estimation method, the appellate court faulted the EIR for failing to explain the 565 AFY discrepancy in water demand projections.  The court held that “such an unexplained discrepancy precludes the existence of substantial evidence to conclude sufficient water is likely to be available for the project.”

Second, the appellate court agreed with Petitioners’ argument that the EIR failed to address an important factor creating uncertainty about whether projected water supplies would be sufficient to meet Project demand.  The EIR had explained that the Project’s District retail supplier obtains its water supply from the San Diego County Water Authority (“Authority”), which obtains its water supply from the Metropolitan Water District of Southern California (“Metropolitan”), which obtains most of its water supply from the Colorado River and from the State Water Project (“SWP”).  The appellate court observed that the projected water supply availability from the District, Authority and Metropolitan all depend heavily upon SWP water deliveries whose reliability seemed uncertain due to a 2007 court decision.  Although that decision is not described, the appellate court presumably is referring to a 2007 U.S. District Court decision remanding a biological opinion issued under the federal Endangered Species Act (“ESA”) for the coordinated operation of the SWP and federal Central Valley Project (“CVP”).  By remanding the biological opinion, the District Court decision created uncertainty about the regulatory conditions affecting SWP and CVP operations and resulting water deliveries.

Although an addendum to the District’s WSA disclosed the fact of the 2007 court decision, the appellate court found that neither the WSA addendum nor the City’s EIR discussed the resulting uncertainty of SWP water supply reliability or how planned water development, water delivery and water conservation projects would affect reliability.  Citing the California Supreme Court’s decision in Vineyard Area Citizens for Responsible Growth v. City of Rancho Cordova (2007) 40 Cal.4th 412, 432, the appellate court held that the EIR was inadequate for failing to provide “a reasoned analysis of the circumstances affecting the likelihood of the water’s availability” and for failing to discuss “possible replacement sources or alternatives to use of the anticipated water, and of the environmental consequences of those contingencies.”

Third, the appellate court agreed with Petitioners’ argument that the EIR failed to analyze the long-term sufficiency of groundwater pumping to maintain water levels in a 10-acre lake planned for the Project, how potential limits on groundwater availability might require use of an alternative supply, what alternative water supplies would be available, and what the environmental effects would be from their use.  Observing that potable water from the District seemed to be the only alternative supply available, the appellate court held that “failing to analyze the impacts of obtaining potable water to fill and recharge the lake if there is insufficient groundwater for this purpose . . . fails to satisfy CEQA’s requirements.”

With respect to biological impacts, the appellate court rejected most of Petitioners’ arguments but agreed that the EIR unlawfully deferred mitigation for the Quino butterfly that is listed as endangered under the federal ESA.  The appellate court rejected Petitioners’ argument that the EIR failed to disclose cumulatively considerable biological impacts, finding that the City’s Project approval was consistent with a Multiple Species Conservation Program (“MSCP”) encompassing 900 square miles of San Diego County, including the Project site and surrounding property.  The appellate court also rejected Petitioners’ argument that it would be infeasible for the Project to carry out an EIR mitigation measure requiring acquisition and permanent preservation of some 210 acres of offsite habitat.

However, the appellate court agreed with Petitioners’ argument that the EIR unlawfully deferred mitigation for the Project’s impacts on the endangered Quino butterfly.  In response to the Project’s direct impacts on more than 990 acres of potential Quino habitat, the EIR prescribed mitigation requiring the Project to preserve more than 1,200 acres of onsite habitat suitable for the Quino and requiring the Project to acquire some 110 acres of offsite mitigation property.  The EIR explained that the offsite mitigation property would be preserved in perpetuity under a conservation easement and would be governed by a habitat management plan approved by the City and environmental regulatory agencies.  Although the Project agreed to fund implementation of a draft habitat management plan prepared by the City, the appellate court agreed with Petitioners’ argument that the plan was inadequate because the City failed to commit to carrying out the prescribed burns or grazing identified as necessary to maintain vegetation on which the Quino depends.  Finding that important habitat management activities were not guaranteed to occur at any particular time or in any particular manner, the appellate court held that the EIR failed to impose performance standards or guidelines for management of Quino mitigation lands and, therefore, improperly deferred mitigation in violation of CEQA.

Finally, the appellate court rejected Petitioners’ argument that the trial court improperly limited the scope of its remedy by failing to direct the City to vacate its EIR certification and Project approval.  Citing CEQA’s provision governing judicial remedies, the appellate court held that “a reasonable, commonsense reading of [Public Resources Code] section 21168.9 forecloses plaintiffs’ assertion that a trial court must mandate a public agency decertify the EIR and void all related project approvals in every instance where the court finds an EIR violates CEQA.”  “[S]uch a rigid requirement is not always necessary to ensure a public agency or a developer does not thwart or render CEQA compliance meaningless by proceeding with environmentally harmful project activities before the public agency corrects its CEQA violations,” the appellate court held.  Simply put, a “trial court has the authority under section 21168.9 to issue a limited writ in appropriate cases . . . .”

Implications

The decision in Preserve Wild Santee addresses a range of recurring CEQA compliance issues, like cumulative biological impacts involving listed species, deferred mitigation and the scope of judicial remedies when CEQA documents are found to be partially inadequate.  Aside from confirming that trial courts have discretion to fashion remedies in CEQA cases, perhaps the most instructive aspect of the decision arises from its holdings on proper analysis of a development project’s water supply impacts.

First, where a SB 610 WSA or SB 221 Verification is prepared for a proposed project, the lead agency and project proponent should try to ensure that the EIR’s water supply impact analysis is consistent with the analysis in the WSA or Verification.  If there are any potentially material differences, they should be identified and their import explained.  The particular risk of differing project water demand estimates can be minimized by a project description that remains stable from preparation of the WSA through the Final EIR and SB 221 Verification that is required before issuance of final subdivision maps for certain residential projects.  Involving the project proponent in the initial development of the water demand estimate can help to ensure accuracy and stability, because the proponent typically has the most detailed understanding of its own project.  Water counsel can play a role by ensuring that water demand projection methods are clearly explained for potential future review by judges that lack engineering backgrounds and by ensuring that projection results are accurately carried through future steps in the environmental review process and, if necessary, are adjusted in response to project changes resulting from the review process (i.e., alternatives or mitigation measures that change the project and its water demand).

Second, SB 610 WSAs, CEQA documents and SB 221 Verifications need to disclose factors affecting the availability, or reliability, of the existing or planned future water sources identified to serve a proposed project.  Regulatory restrictions imposed on water sources under environmental laws, like the federal ESA, the California Fish and Game Code and the public trust doctrine, are a common factor affecting water supply availability projections.  Water counsel can play an essential role in identifying such legal regulatory factors, accurately describing them, and in working with engineering professionals to assess their reasonably foreseeable impact on water supply availability.  Water counsel also can play a role by ensuring that water supply availability projections are accurately carried through future steps in the environmental review process and, if necessary, are adjusted in response to new regulatory restrictions, new legislation, new court decisions or other late-emerging factors.  Where CEQA documents disclose such factors and their projected effect on future water supply availability, case law provides ample support for courts to uphold resulting water supply availability projections under the deferential substantial evidence standard of review.

Questions

If you have any questions concerning the content of this Legal Alert, please contact the following from our office, or the attorney with whom you normally consult.

Eric N. Robinson or Elizabeth L. Leeper | 916.321.4500