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Water Supply EIR Withstands Challenge, Clarifying Duties of Water Suppliers and Planners Under CEQA

By: Alfred E. Smith
12/13/07

In a decision that provides needed clarification to parties preparing water supply planning documents under the California Environmental Quality Act ("CEQA"), on November 26, 2007, the California Court of Appeal filed an opinion on rehearing upholding the water supply analysis in an EIR for a large-scale residential and commercial development in the Santa Clarita Valley. (Santa Clarita Organization for Planning the Environment v. County of Los Angeles, Santa Barbara Super. Ct. No. B189116). The appellate court’s decision approves Los Angeles County’s recertified EIR for the West Creek development which is expected to include 2,545 housing units, 180,000 square feet of commercial retail space and 46 acres of community facilities. The decision clarifies the California Supreme Court’s 2007 decision in Vineyard Area Citizens for Responsible Growth v. City of Rancho Cordova (2007) 40 Cal.4th 412 ("Vineyard"). The opinion sets forth useful and practical guidance to parties preparing water supply analyses by illustrating that absolute certainty about an anticipated water source is not required under Vineyard – as long as known uncertainties are disclosed, and the EIR contains a thorough, well reasoned analysis of why the water source is still likely to prove available.

The West Creek EIR has been the subject of several legal challenges. In a prior opinion issued in 2003, the court of appeal held that the West Creek EIR’s water supply analysis was inadequate. (Santa Clarita Organization for Planning the Environment v. County of Los Angeles (2003) 106 Cal.App.4th 715 ("SCOPE I"). The SCOPE I court concluded that the water supply analysis relied on contractual entitlements or "paper water," and did not adequately analyze the actual amount of water that would be available for the project during wet, normal and dry years.

The County of Los Angeles revised the EIR to, inter alia, provide for Castaic Lake Water Agency’s purchase of 41,000 acre-feet of water per year from the Kern County Water Agency pursuant to the principles set forth in the Monterey Agreement. Under the Monterey Agreement, DWR and contracting water agencies agreed to a statement of principles, including the permanent sale of water among agencies.

The Santa Clarita Organization for Planning the Environment ("SCOPE") challenged the revised EIR’s water supply analysis. Among other things, SCOPE questioned the certainty of supplies from the Kern–Castaic water transfer deal. SCOPE disputed whether the supplies would actually prove available, noting that the CEQA process for the Monterey Agreement is not complete, and that there is still ongoing litigation over the Monterey Agreement.

In addressing SCOPE’s arguments, the appellate court cited four principles governing water supply analysis set forth in Vineyard: (1) the document must evaluate the pros and cons of supplying the water and provide sufficient factual support, (2) the discussion must include a meaningful analysis of the reasonably foreseeable supplies and their impacts, with only limited details to be deferred, (3) the water supplies for the project must "bear a likelihood of actually proving available," and (4) where it is "impossible to confidently determine" if future supplies will be available, the analysis must include "some discussion of possible replacement sources or alternatives to use of the anticipated water, and of the environmental consequences of those contingencies."

The court held that the EIR satisfied these four principles. The EIR satisfied the first principle because it did not simply ignore or assume a solution to the problem of supplying water to the project, but rather identified specific water sources, including the Kern-Castaic transfer. The EIR satisfied the second principle because its water supply analysis was not limited to the first stage or the first few years of the project. Rather, the EIR analyzed the Kern-Castaic transfer as part of the permanent supply for the entire project.

The court concluded that the third principle was satisfied because the EIR disclosed that there was legal uncertainty about the availability of transfer water due to the Monterey Agreement litigation. However, in a "reasoned analysis," the EIR concluded that an adverse decision in the Monterey Agreement was unlikely to "unwind" the transfer agreement. The Kern-Castaic transfer is intended to be permanent, and the transfer can be valid even without the Monterey Agreement. The transfer of surplus and nonsurplus water is authorized by statute; and aside from the Monterey Agreement, the legislative policy of the State of California is to facilitate water transfers.

Moreover, despite some uncertainty in the transferred supply, the court rejected SCOPE’s contention that the EIR failed to address alternative supplies. Under the fourth principle in Vineyard, analysis of replacement or alternative sources is required if it is "impossible to confidently determine" that anticipated future water sources will be available. The court reasoned it can "confidently determine that the water will be available," particularly since the water is "now available, and for years has been available for the project under executed agreements."

SCOPE also challenged the purported lack of funding to remediate perchlorate contamination in the wells. SCOPE argued that the EIR’s reliance on local groundwater to supply part of the project was improper because 6 of the 67 supply wells are contaminated with perchlorate, and because the EIR failed to cite a source of funds for the required cleanup. The court rejected that argument, accepting the EIR's explanation that the water purveyors placed a "high priority on replacing the impacted groundwater capacity by installing wellhead treatment and the construction of new wells". In 2007, on behalf of the Castaic Lake Water Agency, its Santa Clarita Water Division, the Newhall County Water District, and Valencia Water Company, Nossaman negotiated a $100 million dollar settlement with the responsible parties to remediate the perchlorate contamination.

Water supply planning analyses have been an increasing subject of judicial attack. The appellate court’s decision provides comfort and guidance to water suppliers and planners. By approving the EIR notwithstanding pending litigation, an incomplete EIR, and water quality issues, the court’s decision confirms that a carefully written EIR may withstand attack, notwithstanding some uncertainty over the anticipated source of water.

To view a complete copy of the decision, click here.

Alfred E. Smith, II specializes in environmental, water and complex commercial litigation.  He represents public and private water purveyors, major water users, corporations and public agencies on matters including environmental compliance, water rights disputes, conjunctive use, public utility regulation, groundwater management and litigation over allegedly contaminated water and soil.  Alfred is a graduate of the Harvard Law School, and he is an appointed member of the Association of California Water Agencies’ (ACWA) Legal Affairs Committee.  He can be reached at (213) 612-7800 or asmith@nossaman.com.

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