A native subspecies of longhorn beetle will remain listed as “threatened” under the Federal Endangered Species Act. The U.S. Fish & Wildlife Service determined that the best currently available information does not support delisting the Valley Elderberry Longhorn Beetle (VELB). This decision was published in the Federal Register on September 17, 2014.

The continuing listed status of the VELB means issues related to the beetle will need to be considered in project planning and CEQA analysis. Since VELB are highly reliant on elderberry bushes, project mitigation for the beetle often involves avoiding destruction of or replacing impacted elderberry bushes. Of note though, the Service determined the geographic range of the species does not extend into Kings, Kern, and Tulare Counties.

If new information becomes available that indicates the VELB no longer needs protection under the ESA, the Service will again consider delisting. Until then, watch those elderberry bushes during project planning.

The U.S. Fish & Wildlife Service’s official press release can be found here: http://www.fws.gov/sacramento/outreach/2014/09-16/outreach_newsroom_2014-09-16.htm

The First District Court of Appeal previously issued a partially published opinion in the case San Francisco Tomorrow v. City and County of San Francisco, Case No. A137753. Those portions of the opinion were discussed in a prior blog post found here.

After the initial partial-publication order, the First District ordered part II of its discussion published, which analyzes whether the project complied with the City’s general plan.

San Francisco Tomorrow, joined by amicus curiae Sierra Club, argued that the trial court improperly deferred to the City’s interpretation of certain “priority policies” contained within the City’s general plan. San Francisco Tomorrow reasoned that the priority policies had been enacted by citizen initiative rather than being authored by the City itself. Therefore, the petitioners urged the appellate court to strictly interpret the requirements of these policies and strike down the City’s findings which determined that the project was “generally compatible” or compatible “on balance” with the priority policies. But the appellate court disagreed, pointing to a host of cases describing the abuse of discretion standard courts apply when reviewing a municipality’s consistency findings. The court determined this standard of review does not change where policies are the result of an initiative adopted by voters, because once an initiative has been approved, it becomes part of the applicable land-use plan. The court declined to apply a strict construction of the individual priority policies and determined that a reasonable person could find that the project was consistent with and furthered various general plan policies.

The owners of adjacent bluff-top homes applied to the City of Encinitas in 2003 for authorization to replace an erosion control structure and bluff wall, as well as the lower portion of a staircase that gave the owners access to the beach below. The city approved the project but conditioned its approval on the homeowners obtaining a permit from the California Coastal Commission. By the time the Commission considered the permit application, a severe storm had caused the bluff below the homes to collapse. The applicants therefore sought to demolish the remaining erosion control structure, construct a new seawall and bluff protection, and reconstruct the lower stairway. The Commission approved the permit subject to numerous special conditions, including precluding reconstruction of the stairway and limiting the permit’s duration to 20 years. Lynch v. California Coastal Commission (Sept. 9, 2014) 14 C.D.O.S. 10586.

The homeowners challenged the special conditions of the permit. Meanwhile, they signed and recorded the required deed restrictions, satisfied the other prerequisites to permit issuance, obtained the permit, and constructed their project. The Commission argued the owners could no longer proceed with their action because they had agreed to the permit conditions and accepted the benefit of the permit. The trial court found the homeowners had not specifically agreed to nor necessarily accepted the challenged conditions, but the court of appeal disagreed.

The appellate court iterated the maxim that “he who takes the benefit must bear the burden”; i.e., after accepting the benefits of the permit, they could not then challenge aspects of the permit with which they disagreed. The court did not find that the homeowners fit under any exceptions to this general principle. The exception allowing a developer to comply with a condition under protest and proceed with development while simultaneously challenging the condition did not apply to conditions imposed by state agencies or to conditions restricting the manner in which the developer may use its property. The exception for when an agency imposes new conditions on a permit for a later phase of a project already underway did not apply here, as the project did not fit those parameters.

The court did not agree that there should be an “under protest” exception for permit applicants who are opposed to nonfee conditions and desire to build their projects while simultaneously challenging the conditions. The exception would effectively swallow the general rule, as almost all permit applications are submitted by applicants who view the conditions unfavorably. Furthermore, allowing applicants to accept a permit’s benefits while challenging its burdens would foster litigation and create planning uncertainty. Finally, an invalid nonfee condition is not readily quantified or remedied. The court noted that interpretation of deed restrictions is the same as interpretation of contracts, and stated it was “unwilling to condone deliberate subterfuge in recorded documents as doing so would subvert the documents’ noticing function.”

Even if respondents had not waived their right to challenge the permit conditions, the court reasoned, the Commission had lawfully limited the duration of respondents’ permit. The Commission’s findings provided substantial evidence that the seawall would likely need substantial changes within 20 years and would have long-term impacts on adjacent properties. The court found no authority categorically precluding the Commission from imposing a condition limiting the duration of a permit. The court also noted that the reconstruction of the lower stairway required a permit, and therefore must conform to the city’s local coastal program. The court found the reconstruction inconsistent with both general plan policies and coastal bluff overlay regulations, and thus inconsistent with the city’s local coastal program.

Dissent

The dissent argued that the homeowners had not waived their right to challenge the permit conditions, as they had followed all the legal requirements for challenging the conditions and had put the Commission on notice of their objections and intent to challenge them in court.

The dissent concluded that section 30235 of the California Coastal Act precluded the Commission from imposing any condition on the seawall except a condition intended to eliminate or mitigate the seawall’s adverse impacts on the local shoreline sand supply. The majority argued that this position had been rejected in Ocean Harbor House Homeowners Association v. California Coastal Commission. The majority also argued that the conditions were intended to mitigate the project’s adverse long-term impacts.

Finally, the dissent argued that the Commission’s actions violated the Takings clause. The majority argued that until the Commission reached a final decision on future applications for renewals of the seawall, any takings claim was not ripe for adjudication.

California’s groundwater will be regulated for the first time under a package of three bills signed by Governor Jerry Brown on September 16, 2014. Together, the bills  establish the “Sustainable Groundwater Management Act” and impose mandates aimed at overseeing and managing California’s groundwater on a sustainable basis into the future. The California Legislature passed the historic legislation on August 29, 2014.

Until now, California was the only state in the nation that did not comprehensively manage and regulate its groundwater. The state could regulate water diverted from reservoirs and above-ground streams, but did not have authority to limit underground pumping prior to the new legislation’s passage and signing by the governor. According to a recent report by the California Water Foundation, groundwater is used to meet 40 percent of the state’s water demands in an average water year. That number can rise to 60 percent or more during droughts such as the one currently gripping the state. A recent study by the California Department of Water Resources revealed that extractions are exceeding replenishment rates in many places, resulting in unsustainable drainage of underground aquifers.

The bill package includes AB 1739 by Assemblymember Roger Dickinson (D-Sacramento), and SB 1168 and SB 1319 by Senator Fran Pavley (D-Agoura Hills). The legislation focuses on local and regional control of groundwater supplies, with eventual direct state intervention if local management falls short. The new act assigns local agencies the authority and responsibility for managing the groundwater basins upon which they rely through various investigative, regulatory, and enforcement tools. “Backstop” provisions allow the State Water Resources Control Board to develop interim plans for basins when local communities fail to prepare or enforce their plans. The legislation expressly states that local agencies and the state must respect all existing rights to surface water and groundwater.

Under the Act, the Department of Water Resources is tasked with ranking groundwater basins as high, medium, low, or very low priority to characterize the seriousness of groundwater problems. Local and regional agencies with “high” or “medium” priority basins that also have critical overdraft conditions must adopt “groundwater sustainability plans” by 2020. Basins ranked high or medium but without critical overdraft conditions must adopt such plans by 2022. In basins ranked as low and very low priority, sustainability plans are optional. “Sustainability” is characterized as the volume of water  that can be pumped without causing long-term problems such as degraded water quality or significant and unreasonable supply depletion. The plans, in limiting groundwater extractions, must also take into consideration economic, social and environmental effects. Sustainability plan approvals are exempt from CEQA.

Senator Pavley’s SB 1168 contains provisions related to local and regional agencies and the creation of sustainability plans. Assemblymember Dickinson’s AB 1739 contains complementary provisions for state intervention where local and regional agencies fail to comply with the new act. Pavley’s SB 1319 amends AB 1739 to place certain limitations on the state’s enforcement authority. The bills were designed to function in tandem, and all three needed to be signed by the governor for the new act to become operative.

To read the bills and related analyses, go to http://www.leginfo.ca.gov/.

The California Water Foundation report can be viewed here.

The DWR study can be viewed here.

Under Public Resources Code section 21167.6, petitioners may elect to prepare the administrative record in a CEQA proceeding. Petitioners Coalition for Adequate Review and Alliance for Comprehensive Planning chose to prepare the record of proceedings in this case. The court held the City could recover most of its reasonable record preparation costs even though petitioner had elected to prepare the record. Coalition for Adequate Review v. City and County of San Francisco (Sept. 15, 2014) Case No. A135512.

The trial court held on the merits in favor of the City. The City then filed a memorandum of costs, seeking $64,144 for the administrative record, a professional messenger, and service. The City had certified the record in part, claiming it was incomplete due to petitioners’ failure to include statutorily required documents. The City then added these documents to the record. The trial court concluded that because it was the City that had sought to supplement the record, the City should bear that cost. The court further held that petitioners’ discovery requests had not been extraordinary and were not the but-for cause of the City’s costs, and that granting the City’s cost request would chill future petitioner litigation. The appellate court reviewed the issue de novo.

The issue before the court was whether petitioners’ election to prepare the record precluded an award of record preparation costs to the City. The court held that a petitioner’s election to prepare the record does not preclude a public agency from recovering supplemental record preparation costs when incurred to ensure a statutorily complete record. Section 21167.6, subdivision (b)(2) contains no ipso facto prohibition on the recovery of record preparation costs by a public agency. The court stated that in order for an agency to recover costs, circumstances need not be extraordinary, as was the case in St. Vincent’s School for Boys, wherein the city was required at petitioner’s request to locate more than 58,000 pages of documents. A public agency need not put itself at risk of a statutorily incomplete record, the court opined.

The court disagreed that its holding would have a chilling effect on CEQA challenges, as section 21168 expressly provides for the prevailing party to recover costs of record preparation. Furthermore, the parties, and not the public agency, pay the costs, and thus public monies are not used to fund CEQA challenges brought by private parties.

The court then delved into the reasonableness of specific cost items. It disallowed paralegal costs related to the supplemental record where those costs were expended to ensure “completeness” of the record. Public agencies face this chore every time a petitioner elects to prepare the record, and to allow potentially sizeable recoveries for the task would undermine the statutory scheme for controlling the costs of record preparation. The court found that labor costs of assembling the record, production of excerpts of the record, messenger fees, overnight service fees, and the city’s copy of the record prepared by petitioners were all potentially recoverable, and remanded these costs to the trial court for a reasonableness determination. Planning department labor costs to locate documents provided to petitioners, however, were not recoverable here as they “did not approach the egregious abuse the occurred in St. Vincent’s School.”

The Fifth District Court of Appeal addressed two main issues under CEQA: (1) delegation of a lead agency’s authority, and (2) the standard of review to apply when reviewing an agency’s characterization of a resource as historical or not. (Citizens for the Restoration of L Street v. City of Fresno (Aug. 29, 2014) Case No. F066498.)

The City of Fresno approved infill construction of 28 two-story townhouses on about 1.25 acres of land in the city’s downtown area. Two old houses—constructed in 1906 and 1910—were located on the project site. One house was a designated Heritage Property by the Preservation Commission, and the other house had no historical designation. Both were in a significant state of disrepair and had lost considerable integrity as historical structures. As a result, the Commission determined the homes were not worth preserving; indeed, the homes were offered for sale for one dollar each, and no buyers showed interest. So, as part of the infill project, the city proposed issuing demolition permits for the two structures.

The city prepared an initial study and mitigated negative declaration for the infill project, and issued a notice of intent to adopt the MND in June 2011. The notice did not identify the necessity of development permits or the decisionmaking body approving the demolition, or discuss that the Preservation Commission would have any role in the CEQA review process. The Preservation Commission took the lead in the certification of the MND and determined the two buildings on the project site were not historic. The Commission also certified the MND. Citizens appealed this decision to the City Council, which upheld the Commission’s certification. Citizens filed suit.

The Delegation Issue

On appeal, Citizens renewed its successful argument from below that the Preservation Commission did not have the authority to act as the city’s decisionmaking body for the purpose of certifying the MND. The appellate court turned to the city’s municipal code for guidance to determine if the Commission could be characterized as the decision-making body under CEQA Guidelines § 15356. The court determined that the municipal code did not explicitly grant the Commission the authority to approve the environmental review documents concurrently with the other project-related approvals (though the court noted that the city could adopt such an ordinance expressly granting the Commission this authority).

Due to the structure of the city’s municipal code and the approval process here, the court concluded that the city improperly split responsibility for approval of the project and certification of the environmental review. When this project was on appeal to the city council, the city council was not reviewing the demolition permits or CUPs issued for the project by the Preservation Council. Instead, the city was only reviewing the Commission’s decision to certify the MND. Therefore, the city council was not acting as the final, independent decisionmaking body for the project and the MND, as CEQA requires. The court also found the city’s notice for the public review period of the MND to be inadequate. Finally, the court determined that the city council did not explicitly address and adopt the findings required by CEQA Guidelines section 15074, and Public Resources Code section 21082.1.

The Historic Resource Designation Issue

On the issue of the appropriate standard of review to apply to an agency’s characterization of a building or site as historical or not, the court sided with the city. The court, relying on its prior analysis in Valley Advocates v. City of Fresno (2008) 160 Cal.App.4th 1039, concluded that the substantial evidence standard of review applied. Citizens urged the court to apply the fair argument standard instead.

Citizens suggested that the city’s characterization of the buildings should be reviewed under the fair argument standard because the city adopted a MND, which is reviewed under the fair argument standard. But the court explained that the Legislature adopted a specific section in CEQA (§ 21084.1) addressing historical resources. Final discretionary decisions about whether a building or site is historical are to be made during the early stages of environmental review, and since the Legislature allowed lead agencies to make discretionary decisions regarding the historic significance of resources before preparing CEQA review, application of the fair argument standard in these situations would be contrary to Legislature’s intent. An agency cannot freely exercise discretion when taking action if courts review that action as a matter of law, like under the fair argument standard. For these reasons, the court affirmed the application of the substantial evidence test to the city’s determination that the project would have no impacts on historical resources.

Conclusions and analysis

This case follows other recent cases where courts have faulted lead agencies for splitting approval of project elements, such as CUPs or permits, from certification of the project’s environmental analysis. Interestingly, the Fifth District declined to note that the bifurcated situation in this case was created by Citizens’ failure to appeal both the demolition permits and the MND to the city council. But even though Citizens only appealed the MND, arguably failing to exhaust its administrative remedies on the other issues, the court still held the city responsible for the procedural error in the approval process. This outcome sends a clear warning to lead agencies to be vigilant about ensuring the final, decisionmaking body has the discretionary authority to act on project approvals and the project’s environmental review document. The decision also affirms the Fifth District’s prior analysis in Valley Advocates with regard to agency determinations of whether buildings or sites are historic.