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In Habitat v. City of Santa Cruz (Feb. 19, 2013) 2013 Cal.App.LEXIS 128, the Sixth District Court of Appeal reversed the trial court decision and ordered the City of Santa Cruz (City) to vacate its certification of the final EIR and approval of a project because the EIR failed to discuss any feasible project alternatives that could avoid or lessen the significant environmental impact of the project on the City’s water supply.

The City certified an environmental impact report (EIR) for an amendment of the City’s sphere of influence (SOI) in order to include an undeveloped portion of the University of California, Santa Cruz (UCSC) campus known as “North Campus” so as to permit the City to provide extraterritorial water and sewer services to proposed new development in North Campus.

Habitat and Watershed Caretakers (Habitat) filed suit alleging the EIR failed to comply with the California Environmental Quality Act (CEQA) because the EIR (1) did not adequately discuss and analyze the impacts of the project on water supply, watershed resources, biological resources, and indirect growth, (2) misdescribed the project’s objectives, (3) failed to provide adequate mitigation measures, (4) failed to make sufficient findings,  (5) failed to provide an adequate statement of overriding considerations, and (6) failed to consider and analyze a reasonable range of alternatives.

The court held the EIR’s analysis of water supply impacts was adequate.  The EIR disclosed the City’s inadequate water supplies and projected that this imbalance could be dealt with through conservation and curtailment, and, hopefully, the future development of a desalination facility. The court concluded the analysis satisfied CEQA and separately considered the sufficiency of the proposed water supply mitigation measures.

Habitat argued the EIR failed to provide “specific, certain and enforceable mitigation measures for the Project’s significant and allegedly unavoidable impacts on water supply.”  In Habitat’s view, the sole mitigation proposed in the EIR was the potential construction of a desalination facility which would not solve the City’s water issues.  The court disagreed finding the EIR contained numerous mitigation measures, including using water from existing supply wells, feasibility studies on measures for utilization of reclaimed water, water conservation strategies, and water audits to identify feasible measures that could be implemented.  The court held that these mitigation measures were adequate, explaining an EIR did not have to present mitigation measures to solve the City’s longstanding water supply deficit, it only had to address the impact of the project being analyzed.

Furthermore, the court held the EIR’s analysis of cumulative impacts on the City’s water supply caused by indirect growth inducement was adequate because the EIR acknowledge and considered the impacts of off-campus growth and secondary off-campus growth.  The court explained, although there “may be a legitimate basis for disagreement” they must defer to the conclusions found in the EIR because substantial evidence existed in support of the conclusions found.

Additionally, the court held the EIR’s analysis of the project’s impact on watershed resources was adequate.  Habitat alleged the EIR was inadequate because it relied on a Storm Water Management Plan (SWMP) that was not included in the EIR.  The court disagreed.  The Draft EIR adequately analyzed potential impacts on watershed resources and concluded those impacts were less than significant after mitigation.  The Final EIR’s discussion of the SWMP only served to buttress the conclusion reached in the Draft EIR and, therefore, did not render the EIR inadequate.  The court also upheld the City’s decision not to delineate all the wetlands within the project area.  In recognition of the fact that wetlands are dynamic resources, the EIR adopted mitigation that, among other things, required wetland delineations to occur during future project-level environmental review as specific projects are proposed within the North Campus.

Next, the court held the EIR’s discussion of the project’s impact on biological resources was adequate.  Habitat asserted that the EIR was required to disclose and analyze the project’s impact on the San Lorenzo River and the North Coast Streams resulting from its water supply demands.  However, the EIR did not propose relying on increased water consumption from existing water resources.  Instead, it proposed meeting the project’s needs through conservation, curtailment, and the possible construction of a desalination facility.  Thus, substantial evidence demonstrated the project would not impact the existing water resources identified by Habitat.

With respect to Habitat’s challenge to the project objectives, the court agreed the draft EIR originally misstated the project objective as: “implementation of the settlement agreement as related to submission of applications for an SOI amendment and to facilitate the provision of water and sewer service.” The court explained that the purpose of the project was not to fulfill the settlement agreement requirements, since those were satisfied when the applications were filed.  The court held the final EIR described the project objective properly.  The true objective, as disclosed in the Final EIR, was to provide the Regents with the water necessary to develop the North Campus.  The court concluded, “[w]hile the draft EIR did fail to adequately delineate the project’s objectives, the final EIR corrected this problem.”

Additionally, Habitat argued the EIR’s findings and statement of overriding considerations were inadequate. The court held there was no independent merit to Habitat’s challenge to the findings because the argument was essentially a repeat of the challenges to the EIR.  However, the court agreed with Habitat that three of the six reasons stated in the City’s statement of overriding considerations were inadequate.  Nevertheless, the City found that each of the six reasons stated was individually sufficient to outweigh the significant impact on the City’s water supply.  Therefore, “[u]nder the abuse of discretion standard, the City’s decision to favor the identified benefits over the significant environmental impacts of the project must be upheld.”

Finally, Habitat argued the EIR failed to consider and analyze a reasonable range of potentially feasible alternatives. The court rejected Habitat’s argument that the EIR was required to include a reduced-development alternative because “LAFCO lacks the power to impose conditions that would directly restrict the Regents’ development of North Campus…”  However, the court agreed that the EIR should have included a “limited-water” alternative.

The City argued that a limited-water use alternative was properly omitted because (1) it would not “meet the basic Project objective,” (2) it would not avoid the significant impact on water supply because the Regents could develop areas already within the City’s water service area, and (3) “the City has no jurisdiction to limit UCSC’s on-campus development.”  The court rejected these arguments in turn.  First, the court explained an alternative cannot be eliminated from consideration only because it would interfere to some extent with project objectives.  Second, the court concluded the EIR failed to explain how a limited-water alternative would not avoid the significant impact on water supply stating: “to facilitate CEQA’s informational role, the EIR must contain facts and analysis, not just the agency’s bare conclusions or opinions.”  Third, the court found that the limitation on LAFCO’s power to directly regulate land use did not prohibit it from conditioning the provision of water and sewer services for North Campus development on water supply availability by imposing a limited-water condition.  Therefore, the City’s failure to analyze any potentially feasible alternative that could avoid or lessen the significant environmental impact of the project on the City’s water supply rendered the EIR inadequate.

Key Point:

Feasibility of alternatives must be considered at two phases in the EIR process.  At the outset, the lead agency must identify and analyze potentially feasible alternatives within the EIR.  Then, in certifying an EIR and adopting a project, the lead agency must determine whether the potentially feasible alternatives that will reduce or avoid a project’s significant and unavoidable impacts are actually feasible.  Here, the court faulted the City for improperly rejecting potentially feasible alternatives during the first step in the CEQA process for analyzing alternatives.

Written By: Tina Thomas and Christopher Butcher
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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