On November 27, 2012, the Sixth District Court of Appeal in Habitat and Watershed Caretakers v. City of Santa Cruz (2012) __Cal.App.4th __ (Case No. H037545) reversed a trial court’s judgment and directed the City of Santa Cruz to vacate certification of a final EIR for a project to amend the city’s sphere of influence. 

In 2006, the Regents of the University of California (the Regents) adopted a 2005 Long Range Development Plan (LRDP) for the University of California, Santa Cruz (UCSC). The LRDP contemplated the development of the north campus, which was not within the City of Santa Cruz’s (City) territorial boundaries or sphere of influence. The City and other parties brought a CEQA action against the Regents challenging their certification of an EIR for the LRDP, but the parties to the litigation entered into a comprehensive settlement agreement in August 2008.

In October 2008, the City applied to the Local Area Formation Commission (LAFCO) for a sphere of influence (SOI) amendment to include within the SOI the undeveloped north campus portion of UCSC. At the same time, the Regents applied for provision of extraterritorial water and sewer services. The City prepared an EIR for the project of amending its SOI while the applications were pending before LAFCO.

In August 2010, the City certified the final EIR and Habitat filed a petition challenging the certification. The trial court denied the petition, and Habitat appealed.

Assessment of Impacts

i.     Water Supply

The appellate court first turned to the issue of water supply and noted that the draft EIR extensively described the City’s water supply situation. The City had previously considered various strategies for addressing water supply, including conservation, curtailment of use during shortage, and construction of a desalination facility. Ultimately, the draft EIR determined that the City had sufficient supply to serve the project in normal years but would have a water supply shortfall during dry years regardless of growth rate and even without the project’s increased water demand.

Habitat claimed the draft EIR failed to demonstrate that the water required for the development of north campus was available and failed to discuss the environmental consequences of proceeding with the project without adequate water supplies. Citing Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova (2007) 40 Cal.4th 412, the court established that an EIR is not required to establish a likely source of water and instead may address reasonably foreseeable impacts of supplying water to the project, acknowledge the degree of uncertainty involved, discuss reasonably foreseeable alternatives, and disclose significant foreseeable environmental effects of each alternative, as well as mitigation measures to minimize each adverse impact. The draft EIR disclosed and discussed these issues, therefore the court found the EIR’s discussion of water supply was adequate.

ii.   Watershed Resources

Habitat asserted that the draft EIR failed to discuss the impact of development of the north campus on erosion in the Cave Gulch watershed. In particular, Habitat argued the final EIR’s reference to a storm water management plan was improper because the plan itself was not included in the final EIR. The appellate court disagreed, noting the draft EIR discussed, described, referenced, and incorporated analysis and mitigation measures discussed in the LRDP EIR. In addition, the final EIR described and referenced relevant portions of the storm water management plan. The court found this approach was proper and did not deprive decision makers of necessary information.

Habitat also argued the draft EIR was inadequate because the City failed to delineate wetlands. The draft EIR explained that the LRDP EIR’s mitigation measures required predevelopment delineation of wetlands. The draft EIR concluded that delineation was not initially required because wetland resources are dynamic and their precise boundaries are likely to change over the 15-year term of the 2005 LRDP. Since the EIR recognized the existence of wetlands and contained protective mitigation measures, the court found wetland delineation was appropriately deferred to project-level environmental review for future individual projects in the north campus.

iii.  Biological Resources

Habitat also argued the EIR was inadequate because the City did not perform necessary studies and analysis to show that future changes in the City’s water supply would not significantly harm biological resources. The appellate court determined this argument failed because the City did not propose to increase its water supply by drawing more water from its existing sources in order to meet water demand from North Campus. Instead, the City proposed to meet the campus needs through conservation, curtailment and possible construction of a desalination facility. The court found the EIR did not need to analyze impacts from the City’s current water usage from existing sources because they are not impacts of the project and would occur even without the project.

Description of the Project and its Objectives

Habitat argued that the draft EIR’s description of the project’s primary objective were incorrect because the draft EIR stated the comprehensive settlement agreement required the City to provide water and sewer services to the north campus when the agreement actually required the City only to initiate a LAFCO application for an amended SOI.

The appellate court first noted the comprehensive settlement agreement did not leave the City with any discretion because it obligated the City to provide water service if LAFCO approved the City’s SOI application and the Regents’ application. Thus, the court found the purpose of the final EIR was to provide LAFCO with information about the environmental consequences of their decision.

Finally, the court agreed with Habitat, finding the statements of the project’s objectives in the EIR failed to describe the purpose of the project and only described the nature of the project. Given the misstated project objectives, the court next considered whether these misstatements skewed the consideration of alternatives and mitigations.

Range of Alternatives

Habitat argued the EIR’s discussion of alternatives was inadequate because it failed to consider any alternatives that would avoid some of the significant environmental impacts of the project. Habitat argued analysis of a reduced-development alternative or a limited-water alternative was required. The court agreed, holding that consideration of the proposed alternatives could not be eliminated solely because they would “impede to some extent the attainment of the project’s true objectives.” Because the EIR failed to discuss any feasible alternative, the court determined it did not comply with CEQA.

Mitigations

Finally, Habitat argued that the EIR failed to provide specific, certain, and enforceable mitigation measures for the Project’s significant and unavoidable impacts on water supply. The appellate court disagreed. The draft EIR incorporated numerous mitigation measures from the LRDP EIR. In addition, the comprehensive settlement agreement required the Regents to implement a group of high priority conservation measures which the appellate court determined were specific and certain. The court found it sufficient that these mitigation measures addressed the impacts of the project on the City’s water supply; it rejected Habitat’s argument that the mitigation measures were required to address the City’s overall water supply shortfall. [RMM Counsel of Record: James G. Moose, Sabrina V. Teller, Jeannie Lee]