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1.
INTRODUCTION
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In
recent years, a new emphasis has emerged in the already
dense landscape of land use planning: "Integrating" water
supply issues into the land use planning and environmental
review processes.
Proponents
of integration have prevailed in the Legislature to enact
various statutory provisions requiring land use planning
agencies to consider water supply issues and to "talk"
to water agencies when carrying out their planning efforts.
For example, in 1995 the Legislature amended the state
Water Code and the California Environmental Quality Act
("CEQA") by enacting Senate Bill 901. SB 901 requires
local governments to coordinate with local water supply
agencies when contemplating new and significant development
projects. Water Code §§ 10910-10915; Public Resources
Code § 21151.9. At approximately the same time, the Legislature
added section 65352.5 to Article 6 of the Government Code,
requiring water agencies to provide specific information
to cities and counties adopting or substantially amending
a general plan. Gov. Code § 65352.5(b), (c).
A.
Tiering EIRs
While
the Legislature was busy integrating water supply planning
into the overall land use planning process, local governments
and developers were grappling with the related questions
of whether local governments could approve land use plans
before securing permanent water supplies, and when permanent
water supplies had to be secured for anticipated development.
These questions typically arose in the context of CEQA
lawsuits, and involved the practice of "tiering" environmental
impact reports ("EIRs") to avoid redundancy in the environmental
review of related projects. See Public Resources Code
§§ 21068.5, 21093.
"Tiering"
means preparing an initial EIR to cover general matters
and environmental effects of a plan, policy, program or
ordinance, and preparing subsequent more focused EIRs
for specific aspects of the broader plan. See Public Resources
Code §§ 21068.5, 21093; see also Koster v. County of San
Joaquin, 47 Cal. App. 4th 29 (1996). In approving of tiering,
the Legislature expressly declared that EIRs "shall be
tiered whenever feasible," to avoid "duplicative analysis"
and "repetitive discussions of the same issues" in successive
EIRs. Public Resources Code § 21093.
B.
Diablo Grande Case -- Undermining Tiering’s Usefulness
While,
in theory, tiering offers a practical and efficient tool
for integrating water supply issues into the overall land
use planning scheme, a series of mid-1990s court decisions
succeeded in undermining its usefulness as a planning
tool. Most prominent among these decisions was Stanislaus
National Heritage Project v. County of Stanislaus, 48
Cal. App. 4th 182 (1996) (the “Diablo Grande” case). In
Diablo Grande, the court invalidated a county’s first-tier
EIR for a specific plan because, it found, the county
had not adequately addressed the environmental impacts
of acquiring a long-term water supply for the proposed
development. Project proponents had secured sufficient
water to sustain the first five years of project buildout,
but had not done so for the remaining twenty years. Acknowledging
that securing a long-term water supply would impose significant
impacts, the county certified an EIR that prohibited development
beyond the initial, five-year period “unless the applicant
can show to the County’s satisfaction that adequate water
supplies have been made available, and that the environmental
impacts of those sources have been studied and mitigated
per CEQA requirements.” Diablo Grande, 48 Cal. App. 4th
at 195. The court found that this was an improper use
of tiering and held, in essence, that the county cannot
approve a plan providing for long-term growth without
thoroughly evaluating the impacts of providing water for
all the anticipated growth.
Opponents
of economic development heralded the Diablo Grande decision
as a watershed (no pun intended), arguing that local governments
would now be required to secure, and perhaps even pay
for, permanent water supplies before they could approve
general or specific land use plans, and claiming the decision
would effectively “slow, or even halt, new town development
in California” through litigation. More moderate observers
thought otherwise, noting that the court expressly stated,
“we
are not concluding respondent must first find a source
of water before an EIR will be adequate. We are concluding
that an EIR for this project must address the impact of
supplying water for the project.”
Id.
at 640. In retrospect, the lasting significance of this
decision appears to be that cities and counties now require
developers to at least identify, and in some cases secure,
water supplies for significant, proposed developments
in their jurisdictions before approving their land use
plans.
C.
Aftermath of Diablo Decision
Although
these statutory and judicial developments were less than
optimal from the developers’ perspective, they at least
provided some guidance in an area that had theretofore
been marked by an absence of dispostive authority. By
clarifying the role of water agencies in the land use
planning scheme, the Legislature had established that
cities and counties were required to consider water supply
issues when contemplating long-term land use plans, and
by requiring developers to demonstrate that water was
available for their projects, the courts had described
-- at least at a general level -- CEQA's requirements
for reviewing the environmental impacts of providing water
for anticipated growth.
D.
Additional Events -- AB 1219 and the Save the Lakes Case
In
1999, two events added to the mix.
(i).
AB 1219.
First,
in February, assemblywoman Sheila Kuehl of Santa Monica
introduced Assembly Bill 1219. AB 1219 represents yet
another legislative attempt to further integrate water
issues into the land use planning scheme by injecting
water agencies directly into the process. As proposed,
AB 1219 would take the unprecedented and unwarranted step
of conditioning residential developments of a certain
size on the willingness of a water agency to serve the
project. In effect, AB 1219 would provide water agencies
with the ability to ‘veto’ development proposals that
have the support of local government agencies, thereby
shifting land use authority away from cities and counties,
where it belongs, to water agencies, who have no authority,
experience or expertise in this area.
(ii).
Save the Lakes Case
Second,
in November 1999, the Third Appellate District decided
the case of County of Amador v. El Dorado County Water
Agency, 1999 Cal. App. LEXIS 1065 (1999) (the “Save the
Lakes” case), invalidating a water agency’s EIR because,
the court said, it was “predicated on a draft, unadopted
general plan.” Save the Lakes, 1999 Cal. App. LEXIS at
*2. In its published opinion, the court strongly suggests
that a water agency cannot commence efforts to acquire
water for anticipated development until the local government
agency with jurisdiction over the proposed development
has approved the relevant land use plans.
This
suggestion is distressing because, when read together
with the Diablo Grande case, the two cases appear to put
local governments in an impossible bind: Under Diablo
Grande, they cannot approve land use plans until they’ve
identified water supplies, but under Save the Lakes, they
cannot obtain water supplies until they’ve approved land
use plans.
(iii).
Fall Out of Both Events.
Fortunately,
the outlook for local governments is not quite so bleak.
As of press time, it appears that the more draconian aspects
of AB 1219 will not survive legislative scrutiny, and
if AB 1219 ultimately becomes law, that law will be a
kinder, gentler version of the original, knee-jerk response
to the perceived threat of urban sprawl that emerged last
February.
Unfortunately,
there is no similar remedy for the Third District’s opinion
in Save the Lakes. This is particularly troubling because,
as explained below, the court’s opinion is flawed on a
number of levels, from its unnecessarily broad reading
of CEQA to its failure to respect the Legislature’s carefully-established
balance between land use planning and water supply management.
And although, as explained below, Save the Lakes may be
reconciled with the Diablo Grande case to avoid the apparent
Hobson’s choice described above, this reconciliation does
not mitigate the significant adverse impacts on the recently
settled legal landscape surrounding land use and water
supply planning.
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2.
LAND USE AND WATER SUPPLY PLANNING STATUTES
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A.
The Legislative Framework
Cities
and counties are multi-purpose governments that balance
an impressive array of responsibilities, with land use planning
being among their primary businesses. In contrast, water
agencies are single-purpose agencies whose primary responsibility
is to provide customers with safe and reliable water. Not
being imbued with police powers, the scope of their authority
is limited and they are not generally empowered to exercise
land use authority.
The
Legislature has established a careful balance that preserves
in cities and counties the authority to plan and regulate
land use while simultaneously requiring water agencies to
assist local governments by compiling and providing them
with the information necessary to make informed land use
decisions. This framework confirms that it is cities and
counties that are ultimately responsible for land use decisions,
and that the role of water agencies in land use planning
is limited to advising those local governments concerning
the availability of water within their respective districts.
(i).
Inclusion of Conservation in General Plans -- Gov. Code
Section 65302
Various
provisions of the Government Code, the Water Code and CEQA
require, on one hand, local governments to consult with
water agencies that supply water to their respective jurisdictions,
and on the other hand, water agencies to provide specific
information in response to such requests. For example, Government
Code section 65302(d) requires cities and counties to include
in their general plans a conservation element that addresses
“the conservation, development, and utilization of natural
resources including water.” Gov. Code § 65302(d). Section
65302(d) further requires that the portion of the conservation
element addressing water issues be developed “in coordination
with any countywide water agency and with all district and
city agencies which have developed, served, controlled or
conserved water for any purposed for the county or city
for which the plan is prepared.” Id.
(ii).
Requirement of Consultation with Water Agencies -- Gov.
Code Section 65352
Similarly,
Government Code section 65352 requires local governments
proposing to adopt or substantially amend a general plan
to notify water agencies within their jurisdictions and
give them 45 days to comment on their proposals. Section
65352.5 requires each such water agency to provide the local
government, referred to as the “planning agency,” with all
information “that is relevant to determining the adequacy
of existing and planned future water supplies to meet existing
and planned future demands on those water supplies,” including
but not limited to a copy of the water agency’s urban water
management plan, adopted pursuant to the Urban Water Management
Planning Act (Water Code §§ 10610 et seq.). The information
contained in the urban water supplier’s plan includes, among
other things:
(1)
the supplier’s service area, including current and projected
populations;
(2)
existing and planned sources of water available to the supplier;
(3)
water supply reliability and vulnerability data;
(4)
planned measures to obtain alternative supplies; and
(5)
demand-side management measures, all for a twenty-year period
commencing on the date of the plan. Water Code § 10631.
(iii).
Expansion of Consultation Requirement – SB 901
In 1995,
Senate Bill 901 expanded this consultation requirement beyond
the context of adopting or ‘substantially’ amending a general
plan. SB 901, as codified at Water Code sections 10910-10915,
sets out a detailed procedure for cities and counties to
follow when contemplating certain types of projects which
are deemed under CEQA to be of “statewide, regional, or
areawide significance.” See Water Code § 10913(a)-(f), CEQA
Guidelines, § 15083.5; cf. CEQA Guidelines, § 15206(b).
(iv).
Analysis of Sufficiency of Water Supplies -- Water Code
§ 10910
Any
city or county preparing an EIR for a qualifying project
must, as lead agency under CEQA, identify each water agency
that may supply water for project and provide it with a
copy of the Notice of Preparation. Water Code § 10910. At
the same time, the city or county must ask each water agency
to assess whether the water demand associated with the project
was included in its most recent Urban Water Management Plan
(prepared pursuant to section 10610), and whether that agency
can meet the project’s expected demand for water. Id. If
a water agency concludes that its existing supplies are
insufficient to meet the anticipated needs of the project,
it must notify the lead agency of any plans it has to acquire
additional water supplies, including an estimated timetable
for such acquisitions. Water Code § 10911. All of this information
must be provided to the lead agency and included in the
EIR, where the lead agency may, if it chooses, ‘evaluate’
the water agency’s conclusions. Id. Finally, “based on the
entire record, the lead agency shall determine whether projected
water supplies will be sufficient to satisfy the demands
of the proposed project, in addition to existing and planned
future uses.” Id.
(x).
LAFCO - Gov. Code § 56375.
The
Cortese-Knox Local Government Reorganization Act fits neatly
into this planning hierarchy. Cortese-Knox created Local
Agency Formation Commissions (“LAFCOs”) for each county
in the state. Gov. Code § 56375. Among the LAFCOs’ numerous
powers are the power to act on local agency boundary changes
and the power to adopt spheres of influence of local agencies.
Gov. Code § 56375. With respect to water agencies, this
means it is the local LAFCO, not the water agency itself,
that determines whether a water agency will serve a given
population. Moreover, LAFCOs are expressly prohibited from
regulating land uses. Gov. Code § 56375(a)(2). Thus, the
LAFCO statute respects the cities’ and counties’ land use
powers and confirms that water agencies are not empowered
to affect land use decisions planning by extending or withholding
service to a given region.
(xi).
Conclusion from These Provisions.
Two
important points emerge from these various provisions.
First,
the Legislature clearly intends for cities and counties,
and not water agencies, to have the final say as to whether
economic development will go forward. See Water Code § 10911(c).
That this discretion is vested with the cities and counties
is also evidenced by Government Code section 65352(c)(1),
which requires local governments preparing or amending general
plans to obtain data about, among other things, public water
systems and states, “[t]his section is directory, not mandatory,
and the failure to refer a proposed action to the other
entities specified in this section does not affect the validity
of the action, if adopted.” Gov. Code § 65352(c)(1). Thus,
the Legislature has expressly provided that local government
planning approvals are not necessarily invalid even if made
without consultation with the local water agency.
On the
other side of the planning equation, the foregoing provisions
also show, contrary to the Save the Lakes decision, that
water agencies are not required to wait for local governments
to approve land use plans that will result in increased
water demands before they can take steps to acquire additional
water supplies. Under the existing, carefully-crafted framework,
the flow of information is primarily from water agencies
to local governments. The water agencies are required to
provide the cities and counties with assessments of their
“existing and planned future water supplies.” There is nothing
in any of these planning statutes that suggests water agencies
must refrain from planning for or developing additional
water supplies until local governments have approved land
use plans that will increase the demand on their existing
supplies.
B.
How CEQA Fits in the Land Use/Water Supply Planning Scheme
While
much legislative energy has been devoted to “integrating”
land use and water supply planning, very little legislative
brainpower has been employed to consider how CEQA fits into
this framework. In fact, the only CEQA provision specifically
addressing land use and water resource planning processes
is Public Resources Code section 21151.9, which requires
any city or county preparing an EIR for a project to comply
with SB 901 (Water Code §§ 10910-10915).
Nonetheless,
by requiring cities, counties and water agencies to prepare
environmental impact reports and, where necessary, mitigation
plans for activities deemed to significantly affect the
environment, CEQA requires these agencies to engage in environmental
planning. See, e.g., Diablo Grande, 48 Cal. App. 4th at
201-205. While CEQA compels public agencies to consider
the environmental consequences of their proposed actions,
however, its breadth of scope often creates duplicative
obligations for different agencies arising out of the same
project.
For
example, a single, large residential development proposal
may require both a general plan amendment by the local government
and activity by the local water agency to acquire additional
water to serve the increased population. From a practical
standpoint, the city or county and the water agency may
each prepare a separate EIR for their respective "projects."
Because both CEQA “projects” involve the same physical changes
to the environment, however, the environmental analyses
required by CEQA of each agency will overlap and, if both
agencies are required to prepare separate EIRs, they would
to some extent be duplicative. Ideally, where the agencies
are proceeding simultaneously, they can coordinate their
CEQA compliance by jointly preparing a single EIR. Unfortunately,
this kind of coordinated timing often is not possible, nor
is it necessarily desirable.
Local
governments may, for example, choose to prepare or amend
their general plans to accommodate anticipated, long-term
population growth absent any particular development proposals.
In addition, water agencies are under a continuous obligation
to seek out and acquire available water to meet anticipated
and increasing demands. See, e.g., Swanson v. Marin Municipal
Water District, 56 Cal. App. 3d 512, 524 (1976). This obligation
does not depend upon a local government’s approving plans
for increased growth. In other words, there are a variety
of circumstances in which a water agency may act to supplement
its water supplies to satisfy anticipated population growth,
but be unable to coordinate its environmental review with
the local land use planning agency so as to prepare a single
EIR for that action.
It was
in such a context that the Save the Lakes court addressed
the question, ‘What does CEQA require of a water agency
seeking to acquire additional water supplies in terms of
analyzing the relationship between population growth and
water supplies?’
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3.
THE SAVE THE LAKES CASE
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In Save
the Lakes, the court held, among other things, that the
El Dorado County Water Agency (“Water Agency”) and the El
Dorado Irrigation District (“EID”) had violated CEQA by
certifying an EIR that was, the court concluded, “predicated
upon a draft, unadopted general plan.” Save the Lakes at
*2.
The
court’s opinion can be construed to stand for the proposition
that CEQA prohibits a water agency from taking steps to
supplement its existing water supply unless a local planning
agency has approved a plan that would create a demand for
such additional water. In fact, the court suggests it is
impossible to comply with CEQA under these facts.
A.
Factual Background
In March
1991, the El Dorado County Board of Supervisors was in the
process of updating its general plan to meet projected population
growth in the County. Anticipating an increased demand for
water within their service areas, the Water Agency and EID
filed a joint application with the State Water Resources
Control Board (“SWRCB”) for the rights to divert water stored
in three high Sierra lakes for consumption in the County
(the “Project”). Although the “Project” consisted of primarily
of submitting the water rights applications, and did not
propose any construction or water supply or conveyance facilities,
the Water Agency and Irrigation District prepared and circulated
a draft EIR for the Project as required by CEQA.
During
the comment period, the League to Save the Lakes argued
that the draft EIR did not adequately address either the
impact of the Project on the three Sierra lakes, or the
relationship between growth in the County and the increased
water supplies. Save the Lakes, 1999 Cal. App. LEXIS at
*7. The Water Agency and Irrigation District disagreed and
in May 1993, issued and certified a final EIR, accompanied
by findings of fact and a statement of overriding considerations
and posted a notice of determination. Save the Lakes, 1999
Cal. App. LEXIS at *8.
The
League, Amador County, and the California Department of
Fish & Game filed a petition for writ of mandate challenging
this determination. Save the Lakes, 1999 Cal. App. LEXIS
at *8-9. The trial court found, among other things, that
the Water Agency’s and Irrigation District’s preparation
and certification of the EIR “illegally preceded El Dorado
County’s adoption of a new General Plan,” and granted the
petition, and the court of appeals affirmed.
B.
The Save the Lakes Opinion
In affirming
the trial court’s decision, the court of appeals reasoned
that “approving a water program before enacting a general
plan places the proverbial cart before the horse,” and “precludes
any proper review of significant growth issues.” Save the
Lakes, 1999 Cal. App. LEXIS at *20. Clearly, however, this
is wrong, and although the court tried mightily to explain
how the water agencies’ water rights application could preclude
analysis of any “significant growth issues,” it never quite
explains what those “issues” are, or how their consideration
would be precluded:
This
sequence of events -- approving a water program before adopting
a general plan -- precludes any proper review of significant
growth issues. We explain.
In determining
whether and where to permit development, a county must necessarily
consider the availability of consumptive water supplies.
If additional water supplies are available, growth and development
are feasible. Conversely, if that water is not available,
growth is necessarily limited.
If a
general plan calls for increased development and population,
a water plan to designed to meet that need makes sense.
But here, no such determination was made. The County had
not yet adopted a general plan or made final decisions on
growth issues, and there was no final expression of county
policy on these matters. By proposing a water project to
meet the needs of the draft general plan, the analysis of
certain issues was circumvented. That is, once the project
made an additional 17,000 af/yr of water available, one
of the natural barriers to growth was removed, and one of
the major issues related to development no longer had to
be considered. . . .
Under
the present scenario, no entity has contemplated the interrelationship
of growth and water sources. Making 17,000 af/yr of water
available for consumptive purposes removes a major barrier
to growth and can virtually ensure development. (See City
of Antioch v. City Council (1986) 187 Cal. App. 3d 1325,
1337, 232 Cal. Rptr. 507.) By predicating a project on a
draft general plan, without the benefit of a final expression
of county policy, there is no guarantee that the inextricably
linked issues of water supply and population growth will
ever receive the appropriate environmental review. The County
would have no reason to analyze what has become a nonexistent
issue. Where, as here, there is a significant possibility,
if not a probability, that there will be no analysis or
reasoned consideration of the adoption of a general plan
that restricts growth to a level less than that which will
require an additional 17,000 af/yr, which restrictions would
require less water and perhaps a different impact on the
environment, the CEQA process has been abused.
Save
the Lakes, 1999 Cal. App. LEXIS at *23-24.
The
court’s primary fear appears to be that, “[b]y predicating
a project on a draft general plan, without the benefit of
a final expression of county policy, there is no guarantee
that the inextricably linked issues of water supply and
population growth will ever receive the appropriate environmental
review.” Id., at *24. This fear is unjustified because,
before the County could approve a general plan update that
provides for increased growth, it must consider a range
of alternatives to its proposed project, including a ‘no-growth’
alternative. CEQA Guidelines, § 15126.6. The fact that the
water agencies have determined that at least 17,000 af/yr
water is available does not relieve the County of its obligation
under CEQA, in preparing the EIR in connection with its
general plan update, to consider alternatives to its proposed
growth targets or mitigate the impacts of approved growth.
Moreover,
the court completely overlooked the fact that a water agency
is obligated to consider all the significant environmental
impacts of its projects, including cumulative impacts and
growth-inducing impacts. See Public Resources Code § 21100(b)(1)
and (5); CEQA Guidelines, §§ 15126.2, 15130. Although the
Water Agency and EID apparently failed in this task, the
court was mistaken in concluding -- flatly and without citing
to CEQA or any other authority -- that “an EIR predicated
on a draft general plan is fundamentally flawed and cannot
pass CEQA muster.” Id. at *24.
The
court’s opinion represents a classic example of the maxim,
‘bad facts make bad law.’ Because it appears that the Water
Agency and EID failed to fully comply with CEQA by failing
apparently to assess the cumulative and growth-inducing
impacts of their project, the court could have invalidated
the EIR on that basis alone. Instead, it held broadly that
a water agency violates CEQA by adopting a water program
based on anticipated growth before a city or county approves
a general plan approving such growth. Given the statutory
obligations of the land use planning agency, under both
CEQA and the Government and Water Codes, the Save the Lakes
court’s fear that the County “would have no reason to analyze
what has become a nonexistent issue” was legally unfounded.
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4.
CONCLUSION
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The
Save the Lakes decision is problematic for a number of reasons.
1. First,
it ignores the fact that water agencies approving supply-related
projects are specifically directed under CEQA to consider
the cumulative and growth-inducing impacts of their actions.
They are not, as the court suggested, constitutionally unable
to evaluate the effects of their actions under CEQA.
2. Second,
it assumes that if water agencies are permitted to supplement
their water supplies in anticipation of increased demand,
then local land use planning agencies will decline to consider
water supply issues when preparing their land use plans.
Although there may be a political temptation on the part
of cities and counties to do so, the court's assumption
is flawed from a legal standpoint because the Government
Code, the Water Code, and CEQA all require local government
agencies to consider the impacts of growth and the provision
of water when preparing and evaluating their land use plans.
3. Finally,
the court’s holding appears to be in conflict with the Diablo
Grande case, which has been construed by some as prohibiting
local governments from approving significant development
plans without first securing permanent water supplies.
Although
we disagree with this broad reading of Diablo Grande, its
practical effect has been that local governments are now
reluctant to approve any significant development plans unless
and until the applicant has secured a permanent water supply.
Contrasting this with the Save the Lakes decision, and it
appears that the appellate courts are telling local governments
and developers that they cannot approve general and/or specific
plan amendments calling for increased growth without first
securing adequate water supplies, while simultaneously telling
water agencies that they cannot secure additional water
supplies to serve projected growth unless and until the
local government has approved a general plan calling allowing
for such growth.
To the
court’s credit, it understood that CEQA requires government
agencies to incorporate all types of environmental concerns
into their planning processes. The court appropriately analyzed
in planning terms the policy question presented to it as
a CEQA issue: Who will be responsible for considering water
supply issues in planning for increased growth? Unfortunately,
however, in answering this question the Court completely
ignored the Government and Water Code’s extensive land use
planning provisions, into which the Legislature has carefully
incorporated consideration of water supply issues. As a
result, the court got it wrong under CEQA.
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