Opinion ID: 2632447
Heading Depth: 3
Heading Rank: 1

Heading: Principles Governing CEQA Analysis of Water Supply

Text: The fundamental purpose of an EIR is to provide public agencies and the public in general with detailed information about the effect which a proposed project is likely to have on the environment. (§ 21061.) To that end, the EIR shall include a detailed statement setting forth ... [a]ll significant effects on the environment of the proposed project. (§ 21100, subd. (b)(1).) It is common ground for the parties and the lower court that the EIR in this case was required to analyze the effects of providing water to this large housing and commercial development, and that in order to do so the EIR had, in some manner, to identify the planned sources of that water. The principal disputed issue is how firmly future water supplies for a proposed project must be identified or, to put the question in reverse, what level of uncertainty regarding the availability of water supplies can be tolerated in an EIR for a land use plan. Neither CEQA itself, nor the CEQA Guidelines, [5] nor any of this court's decisions address this question specifically. On a general level, section 15144 of the CEQA Guidelines (Cal.Code Regs., tit. 14), addressing the need to forecast future events in an EIR, states that [w]hile foreseeing the unforeseeable is not possible, an agency must use its best efforts to find out and disclose all that it reasonably can. We endorsed this view in Laurel Heights I, supra, 47 Cal.3d at pages 398-399, 253 Cal.Rptr. 426, 764 P.2d 278, explaining that an EIR must address the impacts of reasonably foreseeable future activities related to the proposed project. The Courts of Appeal, however, have in several decisions specifically addressed the sufficiency of an EIR's analysis of future water supplies. In Santiago County Water Dist. v. County of Orange (1981) 118 Cal.App.3d 818, 173 Cal.Rptr. 602, the EIR for a proposed mining project stated that the mine would consume 12,000 to 15,000 gallons of water daily and that the local water district would supply it, but provided no information as to the impacts on water service elsewhere of supplying that amount of water to the mine. ( Id. at pp. 830-831, 173 Cal.Rptr. 602.) The Court of Appeal held that without any facts from which to evaluate the pros and cons of supplying the [needed] amount of water to the mine ( id. at p. 829, 173 Cal.Rptr. 602), the EIR was inadequate. Long-term supplies for a large projecta residential community and resort to be developed over 25 yearswere addressed in Stanislaus Natural Heritage Project v. County of Stanislaus (1996) 48 Cal. App.4th 182, 55 Cal.Rptr.2d 625 ( Stanislaus Natural Heritage ). The EIR noted that `[a] firm water supply has not yet been established beyond the first five years of development, although the applicant is pursuing several sources.' ( Id. at p. 195, 55 Cal.Rptr.2d 625.) Although the EIR listed several possible sources of long-term water supply ( id. at p. 194, 55 Cal.Rptr.2d 625), it provided no analysis of the likelihood of their materializing and their environmental impacts if employed. Instead, the EIR deferred such analysis to future environmental review of water acquisitions or detailed project-level review for future phases of development, providing as a mitigation measure that if the applicant failed to demonstrate and analyze the impacts of future water supplies, further phases of the development would not be approved. ( Id. at p. 195, 55 Cal. Rptr.2d 625.) The appellate court held this treatment of future water supplies defeated CEQA's fundamental informational purpose. Before approving a specific plan for an entire development, the decision makers must be informed of the intended source or sources of water for the project, what the impact will be if supplied from a particular source or possible sources and if that impact is adverse how it will be addressed. ( Stanislaus Natural Heritage, supra, 48 Cal. App.4th at p. 206, 55 Cal.Rptr.2d 625.) CEQA, the court recognized, permits the environmental analysis for long-term, multipart projects to be tiered, so that the broad overall impacts analyzed in an EIR at the first-tier programmatic level need not be reassessed as each of the project's subsequent, narrower phases is approved, [6] but tiering is not a device for deferring the identification of significant environmental impacts that the adoption of a specific plan can be expected to cause. ( Stanislaus Natural Heritage, at p. 199, 55 Cal.Rptr.2d 625.) Nor can the unanalyzed impacts of unknown water sources be mitigated by providing that if water proves unavailable, the project's future phases will not be built: While it might be argued that not building a portion of the project is the ultimate mitigation, it must be borne in mind that the EIR must address the project and assumes the project will be built. ( Id. at p. 206, 55 Cal.Rptr.2d 625.) In Santa Clarita Organization for Planning the Environment v. County of Los Angeles (2003) 106 Cal.App.4th 715, 131 Cal.Rptr.2d 186 ( Santa Clarita ), the EIR for a residential and commercial development project, for which the Castaic Lake Water Agency (Castaic) was to supply water, relied for analysis of cumulative development impacts on Castaic receiving its full entitlement of 54,200 afa from the State Water Project and purchasing an additional 41,000 afa in State Water Project water rights from another agency. ( Id. at pp. 718-719, 131 Cal.Rptr.2d 186.) Quoting another appellate court's recent observation that because the State Water Project had never been fully constructed there is a huge gap between what is promised and what can be delivered, rendering State Water Project entitlements nothing more than hopes, expectations, water futures or, as the parties refer to them, `paper water' ( Planning & Conservation League v. Department of Water Resources (2000) 83 Cal.App.4th 892, 908, fn. 5, 100 Cal.Rptr.2d 173), the Santa Clarita court held the EIR's water supply discussion was inadequate because of its assumption that 100 percent of Castaic's State Water Project entitlement would be available to Castaic. ( Santa Clarita, at p. 722, 131 Cal.Rptr.2d 186; see also California Oak Foundation v. City of Santa Clarita (2005) 133 Cal.App.4th 1219, 1238-1239, 1244, 35 Cal.Rptr.3d 434 ( California Oak ) [disapproving EIR for an industrial park because the water supply analysis relied, without adequate consideration of the attendant uncertainties, on Castaic's purchase of 41,000 afa in imported State Water Project water].) Finally, Napa Citizens for Honest Government v. Napa County Bd. of Supervisors (2001) 91 Cal.App.4th 342, 110 Cal. Rptr.2d 579 ( Napa Citizens ) considered the closely related issue of what constitutes an adequate discussion of contingencies in case the anticipated water supplies for a land use project fail to materialize. The EIR for an industrial development project in Napa County stated that water would be supplied by the City of American Canyon, which already supplied other users in the area. American Canyon's water sources were adequate for planned growth in the short term, but in the longer term would fall short unless that city was able to purchase additional water from the City of Vallejo, as it was trying to do. The EIR assumed that purchase would go through and therefore found the project's demand for water would have no significant impact. ( Id. at p. 372, 110 Cal. Rptr.2d 579.) The appellate court held the EIR inadequate for not disclosing possible alternative water sources and their impacts. In light of the uncertainty regarding American Canyon's future supplies, the EIR cannot simply label the possibility that they will not materialize as `speculative,' and decline to address it. The County should be informed if other sources exist, and be informed, in at least general terms, of the environmental consequences of tapping such resources. ( Id. at p. 373, 110 Cal.Rptr.2d 579.) While these decisions state no definitive standard of certainty for analysis of future water supplies, they do articulate certain principles for analytical adequacy under CEQA, principles with which we agree. First, CEQA's informational purposes are not satisfied by an EIR that simply ignores or assumes a solution to the problem of supplying water to a proposed land use project. Decision makers must, under the law, be presented with sufficient facts to evaluate the pros and cons of supplying the amount of water that the [project] will need. ( Santiago County Water Dist. v. County of Orange, supra, 118 Cal.App.3d at p. 829, 173 Cal.Rptr. 602.) Second, an adequate environmental impact analysis for a large project, to be built and occupied over a number of years, cannot be limited to the water supply for the first stage or the first few years. While proper tiering of environmental review allows an agency to defer analysis of certain details of later phases of long-term linked or complex projects until those phases are up for approval, CEQA's demand for meaningful information is not satisfied by simply stating information will be provided in the future. ( Santa Clarita, supra, 106 Cal.App.4th at p. 723, 131 Cal.Rptr.2d 186.) As the CEQA Guidelines explain: Tiering does not excuse the lead agency from adequately analyzing reasonably foreseeable significant environmental impacts of the project and does not justify deferring such analysis to a later tier EIR or negative declaration. (Cal. Code Regs., tit. 14, § 15152, subd. (b).) Tiering is properly used to defer analysis of environmental impacts and mitigation measures to later phases when the impacts or mitigation measures are not determined by the first-tier approval decision but are specific to the later phases. For example, to evaluate or formulate mitigation for site specific effects such as aesthetics or parking ( id., § 15152 [Discussion]) may be impractical when an entire large project is first approved; under some circumstances analysis of such impacts might be deferred to a later tier EIR. [7] But the future water sources for a large land use project and the impacts of exploiting those sources are not the type of information that can be deferred for future analysis. An EIR evaluating a planned land use project must assume that all phases of the project will eventually be built and will need water, and must analyze, to the extent reasonably possible, the impacts of providing water to the entire proposed project. ( Stanislaus Natural Heritage, supra, 48 Cal.App.4th at p. 206, 55 Cal. Rptr.2d 625.) Third, the future water supplies identified and analyzed must bear a likelihood of actually proving available; speculative sources and unrealistic allocations (paper water) are insufficient bases for decision-making under CEQA. ( Santa Clarita, supra, 106 Cal.App.4th at pp. 720-723, 131 Cal.Rptr.2d 186.) An EIR for a land use project must address the impacts of likely future water sources, and the EIR's discussion must include a reasoned analysis of the circumstances affecting the likelihood of the water's availability. ( California Oak, supra, 133 Cal.App.4th at p. 1244, 35 Cal.Rptr.3d 434.) Finally, where even a full discussion leaves some uncertainty regarding actual availability of the anticipated future water sources, CEQA requires some discussion of possible replacement sources or alternatives to use of the anticipated water, and of the environmental consequences of those contingencies. ( Napa Citizens, supra, 91 Cal.App.4th at p. 373, 110 Cal.Rptr.2d 579.) The law's informational demands may not be met, in this context, simply by providing that future development will not proceed if the anticipated water supply fails to materialize. But when an EIR makes a sincere and reasoned attempt to analyze the water sources the project is likely to use, but acknowledges the remaining uncertainty, a measure for curtailing development if the intended sources fail to materialize may play a role in the impact analysis. (See id. at p. 374,110 Cal.Rptr.2d 579.) Significantly, none of the Court of Appeal decisions on point holds or suggests that an EIR for a land use plan is inadequate unless it demonstrates that the project is definitely assured water through signed, enforceable agreements with a provider and already built or approved treatment and delivery facilities. Requiring certainty when a long-term, large-scale development project is initially approved would likely be unworkable, as it would require water planning to far outpace land use planning. Indeed, one appellate court has held that speculative water planning, in which water is developed before the need for it has been finally determined, itself violates CEQA. ( County of Amador v. El Dorado County Water Agency, supra, 76 Cal.App.4th at p. 950, 91 Cal. Rptr.2d 66 [water project should not have been approved before county's general plan was adopted and the impacts of planned growth in land use were analyzed].) Examination of other state statutes specifically addressing the coordination of land use and water planning supports our conclusion CEQA should not be understood to require assurances of certainty regarding long-term future water supplies at an early phase of planning for large land development projects. Pertinent are two measures enacted in 2001 to ensure that local land use authorities will thoroughly consider the availability of water supplies before approving major new developments. (Tepper, New Water Requirements for Large-Scale Developments (Jan.2005) 27 L.A. Law. 18, 20.) Government Code section 66473.7 generally requires a city or county, before approving a subdivision map for a residential development of more than 500 units, to obtain from the applicable public water system a written verification that adequate water supplies will be available for that project as well as other existing and planned future uses for a projected 20-year period. When the verification rests on supplies not yet available to the water provider, it is to be based on firm indications the water will be available in the future, including written contracts for water rights, approved financing programs for delivery facilities, and the regulatory approvals required to construct infrastructure and deliver the water. ( Id., subd. (d).) The subdivision map may be approved only if the water system verifies, or the city or county finds on substantial evidence, that water supplies will be adequate. ( Id., subd. (b); see Tepper, New Water Requirements for Large-Scale Developments, supra, 27 L.A. Law. at p. 20.) While the verification or finding is required as a condition of subdivision approval, [n]othing in this section shall preclude the [local] legislative body ... from making the determinations required in this section earlier than the subdivision approval stage. (Gov.Code, § 66473.7, subd. ( l ).) Water Code sections 10910 to 10912, enacted in 1995 but substantially amended in 2001, apply more broadly to any large land use project (not only residential developments) and to approval of any such project subject to CEQA (not only to subdivision map approvals). (Wat.Code, §§ 10910, subd. (a), 10912, subds. (a), (b).) They require the city or county considering a project to obtain, at the outset of the CEQA process, a water supply assessment from the applicable public water system. (Wat.Code, § 10910, subd. (b).) The water supply assessment is then to be included in any CEQA document the city or county prepares for the project. (Wat.Code, § 10911, subd. (b).) [8] With regard to existing supply entitlements and rights, a water supply assessment must include assurances such as written contracts, capital outlay programs and regulatory approvals for facilities construction (paralleling the assurances Gov.Code, § 66473.7, subd. (d) requires for future water), but as to additional future supplies needed to serve the project, the assessment need include only the public water system's plans for acquiring the additional supplies, including cost and time estimates and regulatory approvals the system anticipates needing. (Wat.Code, §§ 10910, subd. (d)(2), 10911, subd. (a).) Taken together, Water Code sections 10910 to 10912 and Government Code section 66473.7 thus demand, as amicus curiae Association of California Water Agencies explains, that water supplies must be identified with more specificity at each step as land use planning and water supply planning move forward from general phases to more specific phases. The plans and estimates that Water Code section 10910 mandates for future water supplies at the time of any approval subject to CEQA must, under Government Code section 66473.7, be replaced by firm assurances at the subdivision map approval stage. To interpret CEQA itself as requiring such firm assurances of future water supplies at relatively early stages of the land use planning and approval process would put CEQA in tension with these more specific water planning statutes. Consistent with the foregoing, we emphasize that the burden of identifying likely water sources for a project varies with the stage of project approval involved; the necessary degree of confidence involved for approval of a conceptual plan is much lower than for issuance of building permits. The ultimate question under CEQA, moreover, is not whether an EIR establishes a likely source of water, but whether it adequately addresses the reasonably foreseeable impacts of supplying water to the project. If the uncertainties inherent in long-term land use and water planning make it impossible to confidently identify the future water sources, an EIR may satisfy CEQA if it acknowledges the degree of uncertainty involved, discusses the reasonably foreseeable alternativesincluding alternative water sources and the option of curtailing the development if sufficient water is not available for later phasesand discloses the significant foreseeable environmental effects of each alternative, as well as mitigation measures to minimize each adverse impact. (§ 21100, subd. (b).) In approving a project based on an EIR that takes this approach, however, the agency would also have to make, as appropriate to the circumstances, any findings CEQA requires regarding incorporated mitigation measures, infeasibility of mitigation, and overriding benefits of the project (§ 21081) as to each alternative prong of the analysis. Moreover, CEQA, in our understanding, does not require a city or county, each time a new land use development comes up for approval, to reinvent the water planning wheel. Every urban water supplier is already required to prepare and periodically update an urban water management plan, which must, inter alia, describe and project estimated past, present, and future water sources, supply and demand for at least 20 years into the future. (Wat.Code, §§ 10620-10631.) When an individual land use project requires CEQA evaluation, the urban water management plan's information and analysis may be incorporated in the water supply and demand assessment required by both the Water Code and CEQA [i]f the projected water demand associated with the proposed project was accounted for in the most recently adopted urban water management plan. (Wat.Code § 10910, subd. (c)(2).) Thus the Water Code and the CEQA provision requiring compliance with it (Pub. Resources Code, § 21151.9) contemplate that analysis in an individual project's CEQA evaluation may incorporate previous overall water planning projections, assuming the individual project's demand was included in the overall water plan. Finally, before assessing the adequacy of the FEIR's water supply analysis, we pause to clarify the nature of our review. As explained earlier, an agency may abuse its discretion under CEQA either by failing to proceed in the manner CEQA provides or by reaching factual conclusions unsupported by substantial evidence. (§ 21168.5.) Judicial review of these two types of error differs significantly: while we determine de novo whether the agency has employed the correct procedures, scrupulously enforcing] all legislatively mandated CEQA requirements ( Citizens of Goleta Valley v. Board of Supervisors (1990) 52 Cal.3d 553, 564, 276 Cal.Rptr. 410, 801 P.2d 1161), we accord greater deference to the agency's substantive factual conclusions. In reviewing for substantial evidence, the reviewing court may not set aside an agency's approval of an EIR on the ground that an opposite conclusion would have been equally or more reasonable, for, on factual questions, our task is not to weigh conflicting evidence and determine who has the better argument. ( Laurel Heights I, supra, 47 Cal.3d at p. 393, 253 Cal.Rptr. 426, 764 P.2d 278.) In evaluating an EIR for CEQA compliance, then, a reviewing court must adjust its scrutiny to the nature of the alleged defect, depending on whether the claim is predominantly one of improper procedure or a dispute over the facts. For example, where an agency failed to require an applicant to provide certain information mandated by CEQA and to include that information in its environmental analysis, we held the agency failed to proceed in the manner prescribed by CEQA. ( Sierra Club v. State Bd. of Forestry (1994) 7 Cal.4th 1215, 1236, 32 Cal.Rptr.2d 19, 876 P.2d 505; see also Santiago County Water Dist. v. County of Orange, supra, 118 Cal. App.3d at p. 829, 173 Cal.Rptr. 602 [EIR legally inadequate because of lack of water supply and facilities analysis].) In contrast, in a factual dispute over whether adverse effects have been mitigated or could be better mitigated ( Laurel Heights I, supra, 47 Cal.3d at p. 393, 253 Cal.Rptr. 426, 764 P.2d 278), the agency's conclusion would be reviewed only for substantial evidence. Thus, in Laurel Heights I, we rejected as a matter of law the agency's contention that the EIR did not need to evaluate the impacts of the project's foreseeable future uses because there had not yet been a formal decision on those uses ( id. at pp. 393-399, 253 Cal.Rptr. 426, 764 P.2d 278), but upheld as supported by substantial evidence the agency's finding that the project impacts described in the EIR were adequately mitigated ( id. at pp. 407-408, 253 Cal.Rptr. 426, 764 P.2d 278). (See also California Oak, supra, 133 Cal. App.4th at p. 1244, 35 Cal.Rptr.3d 434 [absent uncertain purchase of additional water, as to which the EIR's discussion is legally inadequate, substantial evidence of sufficient water supplies does not exist].)