City of San Diego v. Board of Trustees of the California State University
(2011) 201 Cal.App.4th 1134

(April 18, 2012, Petition for Review granted; CA Supreme Court Case No. 199557)

The Fourth District Court of Appeal ruled the California State University violated CEQA by considering an appropriation from the State Legislature as the only means of making “fair share” payments for off-site traffic improvements.  The Court ruled CSU had an obligation under CEQA to consider other ways of raising the money necessary to pay its fair share for these improvements.

In 2005, the CSU Board of Trustees certified an EIR and approved a master plan to expand San Diego State University to increase its enrollment from 25,000 to 35,000 students.  While litigation was pending, the Supreme Court issued its opinion in City of Marina v. Board of Trustees of California State University (2006) 39 Cal.4th 341.  The trial court granted the petition and remanded the matter back to CSU.  CSU circulated a revised EIR and, in November 2007, certified the revised EIR and re-approved the master plan.  In December 2007, various local agencies sued.  In March 2010, the trial court concluded CSU had complied with Marina and entered judgment denying the petitions.  The local agencies appealed.

The EIR included an analysis of the master plan’s traffic impacts.  The EIR identified 34 separate traffic impacts.  The EIR also identified improvements that would avoid 30 of the 34 traffic impacts; the other four impacts were identified as significant and unavoidable.  With respect to the other 30 impacts, the EIR calculated CSU’s “fair share” for the cost of the improvements.  The EIR stated payment of fair-share funding was conditioned on requesting and obtaining funds from the California Legislature; if the Legislature did not appropriate the money, then the impacts would be significant and unavoidable.  The City of San Diego submitted comments criticizing this approach as based on dictum from the Marina decision.  In the Final EIR, CSU responded by stating that, under Marina, CSU was obliged to request funding from the Legislature, but could not assure the appropriation of funds.  In its findings, CSU committed to ask for the fair-share funding, but because funding could not be assured, CSU found that the traffic impacts were significant and unavoidable.  CSU conditioned the commitment to pay on State appropriation of the money.  The findings also noted that, even if fair-share payments were made, there was no way to ensure the underlying improvements would be constructed, because the improvements were within the jurisdiction of other agencies (e.g., the City of San Diego and Caltrans).

CSU based its position on the following statement in the Marina decision:  “[A] state agency’s power to mitigate its project’s effects through voluntary mitigation payments is ultimately subject to legislative control; if the Legislature does not appropriate the money, the power does not exist.”  (39 Cal.4^th at p. 367.)  According to CSU, absent a legislative appropriation, fair-share payments for off-site infrastructure were infeasible.  The City and other local agencies argued CSU’s rejection of fair-share funding as “infeasible” was based on a misreading of Marina.  They also argued the EIR was inadequate because it did not discuss alternative approaches to making fair-share payments, other than by means of an appropriation by the Legislature.  The Court agreed.  The Marina Court’s statement was dictum, and the Court declined to follow it.  According to the Court, “neither CEQA nor any provision of the Education Code or other statute precludes CSU (or any other state agency) from using nonlegislatively appropriated funding for making voluntary payments to third parties for mitigation of the off-site significant environmental effects of its projects. . . .  The availability of potential sources of funding other than the Legislature for off-site mitigation measures should have been addressed in the DEIR and FEIR and all of those potential sources should not be deemed ‘infeasible’ sources for CSU’s ‘fair-share’ funding of off-site mitigation measures without a comprehensive discussion of those sources and compelling reasons showing those sources cannot, as a matter of law, be used to pay for mitigation of the significant off-site environmental effects of the [p]roject.”  Because the EIR’s discussion of traffic mitigation, and CSU’s corresponding findings, were premised on CSU’s misreading of its legal obligations, they had to be set aside.  Moreover, the EIR did not contain an adequate discussion of alternatives – such as down-sizing the project – as a means of avoiding the need for off-campus traffic improvements.

CSU argued the Court ought not to reach the “fair-share” issue because the proper interpretation of the Marina decision was never presented to CSU during the administrative process.  The Court disagreed, citing letters and testimony stating or implying that CSU had a duty to mitigate the project’s offsite impacts, even if the Legislature did not appropriate money and other funding sources had to be considered.

Appellants San Diego Association of Governments (“SANDAG”) and San Diego Metropolitan Transit System (“MTS”) argued the EIR’s traffic analysis was inadequate because it miscalculated the “average daily trips” (“ADT”) that would be generated by new resident and commuter students.  The Court disagreed, finding that substantial evidence supported CSU’s methodology.  In particular, the EIR had not double-counted reductions in trips from transit use, or resulting from former commuter students moving on-campus.  CSU also acted within its discretion in relying on projections of increased transit use in the future.  Because substantial evidence supported the EIR’s ADT estimates, the EIR’s “fair share” estimates were similarly supported.

In response to comments, CSU adopted a mitigation measure committing to develop a campus-wide “Transportation Demand Management” program, in consultation with SANDAG and MTS, to encourage alternative modes of transit.  SANDAG and MTS attacked this measure as improper deferral of mitigation.  The Court agreed, finding that the measure committed CSU only to consult with SANDAG and MTS, and then developer a TDM at a future date.  The measure did not identify specific actions to be taken, or performance standards to be achieved.

SANDAG and MTS argued the EIR did not provide an adequate analysis of the project’s impact on transit.  The EIR’s traffic analysis estimated that, in the future, the percentage of students relying on the region’s trolley system would increase.  The EIR did not, however, analyze the impacts of increased trolley use.  SANDAG submitted a letter stating CSU had to analyze the trolley system’s capacity to handle the projected increases in use, to identify system capacity constraints, and to describe and adopt measures that CSU would take to increase that capacity.  MTS stated the bus and trolley systems had inadequate capacity to handle projected increases in student use, and that MTS had inadequate funds to support expanded use.  CSU responded that, for CEQA purposes, increased transit use was not an “impact”; moreover, no criteria were available to determine whether the project’s impact on the transit system was “significant,” triggering the need for mitigation.  The Court held that, although CSU estimated the anticipated increase in transit use, CSU did not analyze adequately the impacts of such use.  Once SANDAG and MTS raised the issue, CSU had an obligation to investigate the transit capacity issue.  The record did not contain substantial evidence supporting CSU’s conclusion that the project would not adversely affect the transit system.