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In Chung v. City of Monterey Park, (2012) Cal.App. LEXIS 1097, the Second District Court of Appeal upheld a trial court’s ruling that Measure BB, a City of Monterey Park municipal ballot measure, was not a project subject to CEQA and therefore the measure did not require environmental review before being placed on the ballot. Measure BB established a competitive bidding process for future trash service contracts to be used once an existing trash service contract had expired.

As established by Public Resources Code section 21065, a “project” under CEQA is “an activity which may cause either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.” CEQA Guidelines section 15378, subdivision (b)(4) further provides that a “project” does not include the “creation of government funding mechanisms or other government fiscal activities, which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.” The court noted at the outset that determining whether the city council’s decision to place Measure BB on the ballot constitutes a “project” under CEQA is an issue of law to be decided on the facts in the record and does not present a question of deference to agency discretion or review of substantiality of evidence.

Petitioners argued that, among other things, Measure BB could require the city council to award the residential solid waste franchise to up to three franchisees, which could add additional trucks to the road and therefore cause impacts to air quality, noise pollution and road damage. The court concluded, however, that Measure BB simply established competitive bidding for further waste services contracts in the city in order to protect the public fisc. The court found petitioner’s argument that Measure BB will result in environmental impacts because of the possibility for more trucks on the road unavailing, holding that, at this juncture, environmental review of the ballot measure would be meaningless because the city had not committed itself to a particular course of action. The ballot measure did not commit the city to place more trucks on the streets. In fact, at this point in the process, the court found that who will compete for the contracts and what additional trucks, if any, would be required was speculative. Instead, the measure simply set forth a different mechanism for selecting future trash service providers; competitive bidding.

Key Point:

Fiscal activity which does not commit a governmental entity to any particular course of action is not a project under CEQA. According to the court, adoption of competitive bidding for municipal contracts is a fiscal activity, which is categorically excluded from the definition of “project.”

Written By: Tina Thomas and Michele Tong
For questions relating to this blog post or any other California land use, environmental and/or planning issues contact Thomas Law Group at (916) 287-9292.

The information presented in this article should not be construed to be formal legal advice by Thomas Law Group, nor the formation of a lawyer/client relationship. Readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

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