Opinion ID: 2631711
Heading Depth: 2
Heading Rank: 1

Heading: Is Mitigation Infeasible?

Text: We consider first the Trustees' finding that they cannot feasibly mitigate the environmental effects of their plan to expand the CSUMB campus. CEQA defines `[f]easible' for these purposes as capable of being accomplished in a successful manner within a reasonable period of time, taking into account economic, environmental, social, and technological factors. (Pub. Resources Code, § 21061.1.) To this list, the CEQA Guidelines add legal factors. (CEQA Guidelines, § 15364; see also Pub. Resources Code, § 21081, subd. (a)(3).) The Trustees, by arguing the state Constitution prohibits them from voluntarily contributing funds to FORA as a form of mitigation, in effect take the position that such contributions are legally infeasible. We discuss here only the permissibility of voluntary payments by the Trustees. Some of the public financing laws that FORA has the power to invoke (see Gov.Code, § 67679, subd. (d)) would, as the Trustees acknowledge, permit FORA to assess state-owned property such as the CSUMB campus. FORA has not, however, attempted to impose an assessment. The plain language of the California Constitution does not support the Trustees' position that voluntary mitigation payments are impermissible. The provision on which the Trustees rely, article XIII, section 3, subdivision (a), provides simply that [p]roperty owned by the State is exempt from property taxation. . . . FORA has not imposed a tax on the Trustees. We have, however, interpreted the same constitutional provision as implicitly exempting publicly owned property from special assessments made without legislative authority. ( Inglewood v. County of Los Angeles (1929) 207 Cal. 697, 703-704, 280 P. 360; see also Regents of University of California v. City of Los Angeles (1979) 100 Cal.App.3d 547, 549, 160 Cal.Rptr. 925; County of Riverside v. Idyllwild County Water Dist. (1978) 84 Cal.App.3d 655, 659-660, 148 Cal.Rptr. 650; cf. Regents of University of California v. City of Los Angeles (1983) 148 Cal. App.3d 451, 454, fn. 2, 196 Cal.Rptr. 14 [questioning whether the exemption is grounded in policy considerations rather than the Constitution].) [11] We reaffirmed this conclusion in San Marcos, supra, 42 Cal.3d 154, 160-161, 228 Cal.Rptr. 47, 720 P.2d 935, the case on which the Trustees principally rely. The Trustees, as noted, argue based on San Marcos that any payment by themselves to FORA for the purpose of improving Fort Ord's infrastructure would constitute a special assessment prohibited in the absence of legislative authority. The Trustees find in chapter 13.7 of the Government Code (§ 54999 et seq.) legislative authority for payments related to subjects mentioned therein, such as water, drainage and sewage collection ( id., § 54999.1, subd. (d)), but not for any purpose not mentioned, such as roads and fire protection. The Trustees have misinterpreted San Marcos, supra, 42 Cal.3d 154, 228 Cal. Rptr. 47, 720 P.2d 935. The decision addresses only compulsory charges imposed by one public entity on another. The case has nothing to say about a discretionary payment made by a public agency that voluntarily chooses that method of discharging its duty under CEQA to mitigate the environmental effects of its project. Because the Trustees' interpretation of San Marcos critically underlies their position in this case, we examine the decision and its consequences in detail. At issue in San Marcos, supra, 42 Cal.3d 154, 228 Cal.Rptr. 47, 720 P.2d 935, was the validity of a capacity fee ( id., at p. 157, 228 Cal.Rptr. 47, 720 P.2d 935) imposed by a public water district on a public school district. The specific question was whether the capacity fee was a user fee, which the school district conceded it would have to pay, or a special assessment, from which the school district was exempt under the cases cited above. The court held the school district was exempt. The purpose of the fee was not to pay for water service but to provide a source of funds for capital improvements to the water system. ( Id., at p. 159, 228 Cal.Rptr. 47, 720 P.2d 935.) The capacity fee thus fit the definition of a special assessment as `a compulsory charge placed by [the government] upon real property within a pre-determined district, made under express legislative authority for defraying in whole or in part the expense of a permanent public improvement therein . . . .' ( San Marcos, at p. 161, 228 Cal.Rptr. 47, 720 P.2d 935, quoting Spring Street Co. v. City of Los Angeles (1915) 170 Cal. 24, 29, 148 P. 217.) In applying this definition, the court look[ed] to the purpose of the fee being charged, and not simply to the form of the fee, a matter which can be easily manipulated. ( San Marcos, at p. 163, 228 Cal.Rptr. 47, 720 P.2d 935.) Accordingly, the court attributed no significance to the fact the water district had calculated the charge by reference to the volume of water the school district anticipated usinga characteristic typical of user fees. While the assessment's form thus caused it to resemble a user fee in some respects, the water district was not permitted `to do indirectly that which it could not do directly.' ( Ibid., quoting County of Riverside v. Idyllwild County Water Dist., supra, 84 Cal.App.3d 655, 659-660, 148 Cal.Rptr. 650.) In summary, the court in San Marcos, supra, 42 Cal.3d 154, 228 Cal.Rptr. 47, 720 P.2d 935, announced two holdings: the court reiterated the existing rule that publicly owned property was exempt from special assessment absent `positive legislative authority therefor' ( id., at p. 161, 228 Cal.Rptr. 47, 720 P.2d 935, quoting Inglewood v. County of Los Angeles, supra, 207 Cal. 697, 704, 280 P. 360), and the court determined that the particular charge at issue was an assessment rather than a user fee ( San Marcos, at pp. 163-165, 228 Cal.Rptr. 47, 720 P.2d 935). The court found analogous support for its conclusions in prior decisions identifying [t]he rationale behind a public entity's exemption from property taxes and special assessments [as being] to prevent one tax-supported entity from siphoning tax money from another such entity; the end result of such a process [possibly being] unnecessary administrative costs and no actual gain in tax revenues. ( San Marcos, at p. 161, 228 Cal.Rptr. 47, 720 P.2d 935, citing Eisley v. Mohan (1948) 31 Cal.2d 637, 642, 192 P.2d 5.) The court also acknowledged, perhaps bluntly, one of the more significant consequences of its holding: Our conclusion does not mean, the court wrote, that the water district cannot collect money for capital improvements from its customers; it simply means that the private customers will pay the entire cost of capital improvements. Public entities, such as the school district, will not be required to allocate their limited tax revenues to pay for capital improvements built by the sewer district. ( San Marcos, at p. 158, 228 Cal.Rptr. 47, 720 P.2d 935.) The Legislature promptly reacted to the decision in San Marcos, supra, 42 Cal.3d 154, 228 Cal.Rptr. 47, 720 P.2d 935, by authorizing public utilities to charge public-entity customers their fair share of the utilities' capital costs and by ratifying fees previously imposed for that purpose. Under chapter 13.7 of the Government Code (§ 54999 et seq.), enacted in response to San Marcos, [a]ny public agency providing public utility service may impose on any public agency a capital facilities fee ( id., § 54999.2), meaning any nondiscriminatory charge to pay the capital cost of a public utility facility ( id., § 54999.1, subd. (b)). A `[p]ublic utility facility' for these purposes is a facility for the provision of water, light, heat, communications, power, or garbage service, for flood control, drainage or sanitary purposes, or for sewage collection, treatment, or disposal. ( Id., § 54999.1, subd. (d).) Motivating these changes to the law was the Legislature's perception that public utilities and their public-entity customers, on the whole, had not shared the court's understanding of the law. [M]any public entities that provide public utility service, the Legislature explained, have imposed capital facilities fees applicable to users of public utility facilities in order to equitably apportion the cost of capital facilities construction or expansion required by all public and private users of the facilities. As a result of San Marcos, however, the fiscal stability and service capabilities of the affected public utility service agencies which have in good faith collected and spent these fees for capital improvements are seriously impaired as is the ability to finance essential future facilities. (Gov. Code, § 54999, subd. (a).) Against this background, we may easily reject the Trustees' argument that they may not lawfully contribute to FORA as a way of discharging their obligation under CEQA to mitigate the environmental effects of their project to expand CSUMB. The Trustees' three-part argument may be summarized as follows: (1) Any payment by the Trustees to FORA for the purpose of capital improvement in Fort Ord is an assessment, regardless of form; (2) public agencies are exempt from assessment except as permitted by the Legislature; and (3) the Legislature has permitted assessments only for the purposes set out in chapter 13.7 of the Government Code (§ 54999 et seq.). The Trustees err crucially at the outset. An assessment connotes, at the very least, a compulsory charge imposed by the government on real property. ( Knox v. City of Orland (1992) 4 Cal.4th 132, 141, 14 Cal.Rptr.2d 159, 841 P.2d 144; see also Southern Cal. Rapid Transit Dist. v. Bolen (1992) 1 Cal.4th 654, 660, 3 Cal.Rptr.2d 843, 822 P.2d 875; San Marcos, supra, 42 Cal.3d 154, 161, 228 Cal.Rptr. 47, 720 P.2d 935; Spring Street Co. v. City of Los Angeles, supra, 170 Cal. 24, 29, 148 P. 217.) FORA has imposed no charge on the Trustees, let alone a compulsory one. As part of its planning process, FORA has made a provisional effort to estimate the Trustees' fair share of the cost of infrastructure improvements, but FORA has taken no steps to create an enforceable legal obligation to pay. Indeed, FORA disclaims any intention to impose a charge on the Trustees and looks instead exclusively to a negotiated payment. This case is not a collection action or an action to validate an assessment. Instead, FORA claims the Trustees have abused their discretion under CEQA by certifying an EIR that improperly fails to identify voluntary contributions to FORA as a feasible method of mitigating the environmental effects of their project to expand CSUMB. In other words, the question of payment arises not because FORA has imposed a charge (it has not), but because CEQA requires the Trustees to avoid or mitigate, if feasible, the significant environmental effects of their project (Pub. Resources Code, § 21002.1, subd. (b)) and because payments to FORA may represent a feasible form of mitigation. To illustrate the point, if campus expansion requires that roads or sewers be improved, the Trustees may do the work themselves on campus, but they have no authority to build roads or sewers off campus on land that belongs to others. Yet the Trustees are not thereby excused from the duty to mitigate or avoid CSUMB's off-campus effects on traffic or wastewater management, because CEQA requires a public agency to mitigate or avoid its projects' significant effects not just on the agency's own property but  on the environment  (Pub. Resources Code, § 21002.1, subd.(b), italics added), with environment defined for these purposes as the physical conditions which exist within the area which will be affected by a proposed project  ( id., § 21060.5, italics added). Thus, if the Trustees cannot adequately mitigate or avoid CSUMB's off-campus environmental effects by performing acts on campus (as by reducing sufficiently the use of automobiles or the volume of sewage), then to pay a third party such as FORA to perform the necessary acts off campus may well represent a feasible alternative. A payment made under these circumstances can properly be described neither as compulsory nor, for that reason, as an assessment. Arguing to the contrary, the Trustees emphasize the court's statement in San Marcos, supra, 42 Cal.3d 154, 163, 228 Cal.Rptr. 47, 720 P.2d 935, that courts will identify an assessment by look[ing] to the purpose of the fee being charged, and not simply to the form of the fee, a matter which can be easily manipulated. Based on this statement, the Trustees argue that a voluntary payment made to fund projects that might also be funded by an assessment, such as infrastructure projects, must be considered an assessment for all purposes. The San Marcos court announced no such conclusion. Instead, the court made the quoted statement in the context of determining whether an admittedly compulsory charge was a user fee or an assessment. Nothing in San Marcos speaks to voluntary payments or purports to address or narrow any public agency's duties under CEQA. The Trustees also seek to draw support from the court's statement in San Marcos, supra, 42 Cal.3d 154, 228 Cal.Rptr. 47, 720 P.2d 935, of the reason traditionally thought to underlie the rule exempting public property from taxation, i.e., that the exemption prevent[s] one tax-supported entity from siphoning tax money from another such entity; the end result of such a process [possibly being] unnecessary administrative costs and no actual gain in tax revenues. ( Id., at p. 161, 228 Cal.Rptr. 47, 720 P.2d 935.) Inviting an analogy, the Trustees point out that any payment by CSU to FORA for infrastructure improvements will reduce the amount of money available to CSU for its core educational functions. The Trustees read too much into San Marcos. While there does exist a general rule to the effect that [p]roperty owned by the State is exempt from taxation (Cal. Const., art. XIII, § 3, subd. (a)), no rule precludes a public entity from sharing with another the cost of improvements benefiting both. Furthermore, while education may be CSU's core function, to avoid or mitigate the environmental effects of its projects is also one of CSU's functions. This is the plain import of CEQA, in which the Legislature has commanded that [ e ] ach public agency shall mitigate or avoid the significant effects on the environment of projects that it carries out or approves whenever it is feasible to do so. (Pub. Resources Code, § 21002.1, subd. (b), italics added; see also id., § 21002 [declaring the same obligation to be the policy of the state].) Nothing in San Marcos can fairly be read as addressing, much less narrowing, a public agency's obligations under CEQA. The Trustees, as noted, are willing to contribute to FORA for the limited purpose of mitigating CSUMB's effects on drainage, water supply, and wastewater management under the terms of chapter 13.7 of the Government Code (§ 54999 et seq.). Chapter 13.7, as already explained, contains the law the Legislature passed in the wake of San Marcos, supra, 42 Cal.3d 154, 228 Cal.Rptr. 47, 720 P.2d 935, authorizing public utilities to charge public-entity customers their fair share of the utilities' capital costs. Under the law, any public agency proposing to initially impose a capital facilities fee . . . may do so after agreement has been reached between the two agencies through negotiations entered into by both parties. (Gov.Code, § 54999.3, subd. (b).) In such a case, [t]he public agency imposing . . . the capital facilities fee has the burden of producing evidence to establish that the capital facilities fee is nondiscriminatory and that the amount of the capital facilities fee does not exceed the amount necessary to provide capital facilities for which the fee is charged. ( Id., subd. (c).) The FORA Act expressly invokes this negotiative process by specifying that [t]he applicability of any capital facilities fees imposed under this title [i.e., the FORA Act] to public educational agencies shall be subject to the provisions of Chapter 13.7. . . . (Gov.Code, § 67685.) Because FORA has not imposed or sought to impose a capital facilities fee on the Trustees, chapter 13.7 does not literally apply. That having been said, we see no reason why an agreement between the Trustees and FORA regarding a voluntary payment negotiated according to the procedure set out in chapter 13.7 for the purpose of mitigating specified environmental effects (i.e., water supply, drainage and wastewater management) would not satisfy the Trustees' CEQA obligations as to those effects. While the amount determined by negotiation may not equal the amount FORA originally projected, for its own planning purposes, that the Trustees would pay, nothing in chapter 13.7 of the Government Code, CEQA or the FORA Act permits FORA unilaterally to determine the amount of any voluntary contribution the Trustees may choose to make as a way of satisfying their obligation under CEQA to mitigate the environmental effects of their project. To the contrary, the Trustees as the lead agency under CEQA have the power and duty to assess the adequacy of mitigation measures, subject only to judicial review for abuse of discretion. (See Laurel Heights Improvement Assn. v. Regents of University of California, supra, 47 Cal.3d 376, 393, 253 Cal.Rptr. 426, 764 P.2d 278.) Furthermore, nothing in chapter 13.7 of the Government Code, CEQA or the FORA Act obliges the Trustees to pay more than is necessary to mitigate CSUMB's effects. Certainly the Trustees need not pay to mitigate effects caused by other users of the base. To the contrary, CEQA requires that mitigation measures be `roughly proportional' to the impacts of the project. (CEQA Guidelines, § 15126.4, subd. (a)(4)(B), citing Dolan v. City of Tigard (1994) 512 U.S. 374, 114 S.Ct. 2309, 129 L.Ed.2d 304; cf. id., at p. 391, 253 Cal.Rptr. 426, 764 P.2d 278.) [12] Finally on this point, the Trustees argue that chapter 13.7 of the Government Code (§ 54999 et seq.) and the FORA Act ( id., § 67650 et seq.), which specifically authorize FORA to impose on the Trustees a negotiated fee for certain purposes (e.g., water supply, drainage and wastewater management), suggest the Legislature must have contemplated the Trustees would have no obligation to contribute to FORA for other purposes (e.g., the cost of improving roads and fire protection). We discern in the cited provisions, however, no evidence of a legislative intent to bar the Trustees from voluntarily contributing, as a way of meeting their CEQA obligations, their fair share of the cost of improvements to roads and fire protection necessitated by CSUMB's expansion. On this point the FORA Act, as noted, provides simply that [t]he applicability of any capital facilities fee imposed under this title to public educational agencies shall be subject to the provisions of Chapter 13.7 [of the same code]. (Gov.Code, § 67685, italics added.) Chapter 13.7, in turn, speaks only of fees  impose [ d ] ( id., § 54999.3, subd. (b), italics added) by public utilities. Because FORA has imposed no fee on the Trustees, neither Government Code section 67685 nor chapter 13.7 has any literal application to the present case. Moreover, neither law purports to limit the Trustees' independent obligation under CEQA to protect the physical environment from the effects of their project to expand the CSUMB campus.
The Trustees next argue that any payment to FORA made otherwise than under Government Code chapter 13.7 (§ 54999 et seq.) would constitute an illegal gift of public funds. (See Cal. Const., art. XVI, § 6.) [13] The argument invokes the court's statement in San Marcos, supra, 42 Cal.3d 154, 228 Cal.Rptr. 47, 720 P.2d 935, that the ability of the school district in that case to agree to pay [the disputed capacity] charge depend[ed] upon whether the [water] district ha[d] the power to impose it, and that payment of an invalid charge would amount to a `gift of public funds' in contravention of article XVI, section 6 of the California Constitution. ( San Marcos, at p. 167, 228 Cal. Rptr. 47, 720 P.2d 935, quoting County of Riverside v. Idyllwild County Water Dist., supra, 84 Cal.App.3d 655, 660, 148 Cal. Rptr. 650.) We have, however, already rejected the central premise of this argument, which is that a voluntary payment by the Trustees would constitute an assessment. In any event, the relevant law makes clear that a payment by the Trustees for the purpose of mitigating CSUMB's environmental effects would not constitute an unlawful gift of public funds. It is well settled that, in determining whether an appropriation of public funds or property is to be considered a gift, the primary question is whether the funds are to be used for a `public' or a `private' purpose. If they are for a `public purpose', they are not a gift within the meaning of [the Constitution]. ( County of Alameda v. Janssen (1940) 16 Cal.2d 276, 281, 106 P.2d 11.) Such a payment by the Trustees would have the public purpose of discharging their duty as a public agency, under the express terms of CEQA, to mitigate or avoid the significant effects on the environment of projects that [they] carr[y] out or approve[] whenever it is feasible to do so. (Pub. Resources Code, § 21002.1, subd. (b).)
As a final reason why they cannot feasibly mitigate CSUMB's environmental effects by voluntarily contributing to FORA, the Trustees argue they cannot guarantee that FORA will actually implement the infrastructure improvements proposed in the Reuse Plan. The argument is not persuasive. In certifying the EIR and approving CSUMB's Master Plan, the Trustees specifically found that the infrastructure improvements proposed by FORA constitute the specific measure[s] necessary to mitigate each of CSUMB's corresponding environmental impacts to the level of insignificance. The Trustees did not find that mitigation of these impacts was feasible, however, in part because of asserted doubts about FORA's ability to fund and implement the proposed improvements. CEQA, as noted, defines a `[f]easible' mitigation measure as one that is capable of being accomplished in a successful manner within a reasonable period of time, taking into account economic, environmental, social, and technological factors. (Pub. Resources Code, § 21061.1; see also CEQA Guidelines, § 15364.) Invoking this definition, the Trustees found in the EIR as to each remaining environmental impact that implementation of the regional mitigation . . . is currently disputed, [and that] mitigation of the impact to a less than significant level cannot be assured by CSU. The Trustees explained their position in more detail in response to public comments on their EIR: Although all parties to the MOA [ [14] ] will agree that the determined contributions by CSUMB are intended to mitigate the offsite impacts contributed by development of the Master Plan, it is acknowledged that CSUMB's contribution represents only a portion of the funding needed to implement the regional improvements. Similar payments will need to be made by other jurisdictions contributing to regional impacts in order for the improvements to be implemented. In addition, ultimate implementation of the improvement program is under the responsibility of FORA, and cannot be controlled or assured by the University. For these reasons, . . . the [EIR] determine[s] that the significant impacts on drainage, water supply, traffic, wastewater generation, and fire protection, identified as caused by the Master Plan, will remain significant and unavoidable. These impacts will therefore require the adoption of a Statement of Overriding Conditions by the [Trustees] in compliance with CEQA. The presently identified, unavoidable uncertainties affecting the funding and implementation of the infrastructure improvements FORA has proposed in its Reuse Plan do not render voluntary contributions to FORA by the Trustees infeasible as a method of mitigating CSUMB's effects. Both the CEQA Guidelines and judicial decisions recognize that a project proponent may satisfy its duty to mitigate its own portion of a cumulative environmental impact by contributing to a regional mitigation fund. Under the Guidelines, a project's contribution to a significant cumulative impact may properly be considered less than cumulatively considerable and thus . . . not significant if the project is required to implement or fund its fair share of a mitigation measure or measures designed to alleviate the cumulative impact. (CEQA Guidelines, § 15130, subd. (a)(3).) Similarly, courts have found fee-based mitigation programs for cumulative impacts, based on fair-share infrastructure contributions by individual projects, to constitute adequate mitigation measures under CEQA. (E.g., Anderson First Coalition v. City of Anderson (2005) 130 Cal. App.4th 1173, 1188, 30 Cal.Rptr.3d 738; Save Our Peninsula Committee v. Monterey County Bd. of Supervisors, supra, 87 Cal.App.4th 99, 140, 104 Cal.Rptr.2d 326.) [15] Of course a commitment to pay fees without any evidence that mitigation will actually occur is inadequate. ( Save Our Peninsula Committee v. Monterey County Bd. of Supervisors, supra, 87 Cal.App.4th 99, 140, 104 Cal.Rptr.2d 326; see also Kings County Farm Bureau v. City of Hanford (1990) 221 Cal.App.3d 692, 727-728, 270 Cal.Rptr. 650 [lacking evidence water would be available for purchase, an agreement to purchase replacement water did not adequately mitigate groundwater depletion].) There is, however, no reason to doubt that FORA will meet its statutory obligation as the government of Fort Ord to prepare the base for civilian development by constructing whatever public capital facilities are necessary for that purpose. (See Gov.Code, § 67679.) As noted, FORA plans to implement the improvements over a period of several years, as increasing land use necessitates them and as funding becomes available. To enable this task to be accomplished, the Legislature has given FORA a broad array of fundraising powers, including the power to levy assessments and development fees, to share tax revenue with its local-government member agencies, and to sell and lease property. (See Gov.Code, §§ 67678, subd. (a), 67679, subds. (c)-(e), 67691, 67692.) Furthermore, the law specifically directs FORA to use its powers to ensure the success of its statutory mission (e.g., Gov.Code, § 67679, subd. (a)(1) [FORA must undertake to plan for and arrange the provision of [public capital] facilities, including arranging for their financing and construction]), and the courts ordinarily presume that the government, in this instance FORA, will comply with the law (e.g., City of Beaumont v. Beaumont Irr. Dist. (1965) 63 Cal.2d 291, 297, 46 Cal. Rptr. 465, 405 P.2d 377; Save Our Peninsula Committee v. Monterey County Bd. of Supervisors, supra, 87 Cal.App.4th 99, 141, 104 Cal.Rptr.2d 326). By way of analogy, the court in Save Our Peninsula Committee v. Monterey Bd. of Supervisors, supra, 87 Cal.App.4th 99, 104 Cal.Rptr.2d 326, held that a county had adequately ensured the mitigation of traffic congestion effects by provid[ing] for improvements to be constructed as the traffic triggering the need for the improvements exceeded a projected threshold and the funds to pay for the improvements were generated by the new development. ( Id., at p. 141, 104 Cal.Rptr.2d 326.) CEQA, the court explained, required not a time-specific schedule for the County to complete specified road improvements ( ibid. ) but only that there be a reasonable plan for mitigation ( ibid. ). FORA's Reuse Plan satisfies that criterion. The Trustees' assumption that CEQA requires more is an error of law invalidating their finding that voluntary mitigation payments to FORA do not represent a feasible method of mitigating CSU's off-campus environmental effects. ( No Oil, Inc. v. City of Los Angeles, supra, 13 Cal.3d 68, 88, 118 Cal.Rptr. 34, 529 P.2d 66 [an agency's use of an erroneous legal standard constitutes a failure to proceed in a manner required by law]; see also Save Our Peninsula Committee v. Monterey County Bd. of Supervisors, supra, 87 Cal.App.4th 99, 118, 104 Cal.Rptr.2d 326 [questions of interpretation or application of the requirements of CEQA are matters of law].)