Tag: Water Rights

FIRST DISTRICT HOLDS CITY’S CURTAILMENT OF WATER DELIVERY TO LEASED PROPERTIES WAS NOT A NEW PROJECT SUBJECT TO CEQA REVIEW

In County of Mono v. City of Los Angeles (2022) __Cal.App.5th__, the First District Court of Appeal held that the city’s 2018 water allocation to lessees was not a change in water use policy, but merely an exercise of the city’s discretion to curtail water deliveries for the purposes of increasing water deliveries to city residents, which was allowed subject to the terms of a lease agreement approved in 2010.

Background

In 2010, the city approved leases (2010 Leases) governing approximately 6,100 acres of city-owned land to petitioner and others. Relevant here, the 2010 Leases provide for the delivery of no more than 5 acre-feet of water per acre (AF/acre) per irrigation season subject to certain conditions. These conditions made clear that the city’s water use was paramount to rights under the 2010 Leases and that the actual amount of water delivered in any given year is to be determined solely by the city and may be reduced in dry years based on water availability. The 2010 Leases further provided that the supply of water could be discontinued at any time and that lessee has no claim against the city should the city exercise its right to withhold water for its own residents. The initial lease term ran from January 2009 to the end of 2013 after which the leases allow the lessees to holdover as tenant at will. Accordingly, the city and the lessees have proceeded under the 2010 Leases in holdover status since 2013.

In March 2018, the city sent copies of a new form of leases (Proposed Dry Leases), which provided that the city would no longer provide irrigation water to the lessee, but rather from time to time the city may spread water on the leased properties. The Proposed Dry Leases included similar provisions reserving the city’s rights to discontinue water delivery. The city issued a Notice of Preparation (NOP) that it would prepare an environmental impact report for the Proposed Dry Leases in August 2018.

In May 2018 correspondence between the city and petitioner, the city indicated that it was evaluating the impacts of reducing water on the leased ranch land, but that based on the snowpack and anticipated runoff it determined that the city could provide lessees 0.71 AF/acre of water, which was consistent with what it had provided two years earlier when the runoff was 82 percent of normal.

Petitioner challenged the city’s decision to curtail water deliveries in 2018 alleging it violated CEQA in that it committed to the Proposed Dry Leases without environmental review.

Court of Appeal’s Decision

The appellate court initially discussed the propriety of considering a declaration filed by the city which asserted that in 2019 and 2020 the city had delivered 6.6 AF/acre and 3 AF/acre of water, respectively. The trial court denied the city’s request to augment the record with the declaration because it was untimely (filed after the court had issued its tentative order granting the writ petition) yet the trial court relied on the 2019 and 2020 water allocations for purposes of setting the historical baseline and fashioning the remedy. The appellate court found that while the declaration was admissible extra-record evidence under Western States Petroleum Assn. v. Super. Ct. (29915) 9 Cal.4th 559, 576 because the 2018 water allocation is an informal or ministerial administrative action, it agreed with the trial court that the declaration was untimely. Nevertheless, the appellate court held that the trial court’s reliance on the contents of the declaration for purposes of the scope of the remedy was inappropriate given that the trial court had not considered the declaration for purposes of the merits.  Accordingly, the appellate court held that it would consider the declaration.

Next the court considered whether the 2018 water allocation was a new reduced water project or part of either the 2010 leases or the Proposed Dry Leases. In doing so, the court noted that the definition of a CEQA “project” involves three distinct components: “agency involvement, physical change to the environment, and whole of an action including multiple discretionary approvals.” Based on the terms of the 2010 Leases, the history of water allocations under them, and the city’s post-2018 water allocations set forth in the declaration, the court found that the 2018 water allocation was merely a “string of water allocations that the 2010 Leases” allowed the city to make. It was therefore not a new project subject to CEQA.

The court rejected petitioner’s contention that the terms of the 2010 Leases did not allow it to curtail water deliveries. Rather, based on the discussion of water supplies in the 2010 Leases, which expressly provided that lessee understood and acknowledged that any water supplied to leased land was “subject to the paramount rights” of the city and that the city could discontinue water deliveries in whole or in part at any time, the court held that the 2010 Leases reserve the city’s right to curtail water deliveries.

Petitioner argued that the court’s interpretation would allow the city to end all water deliveries under the 2010 Leases. However, the city agreed that eliminating water deliveries would require environmental review. Based on this concession, the court of appeal concluded that the 2010 Leases reserved the city’s rights to reduce water allocations subject to changing water availability so long as such reductions did not convert the 2010 Leases into dry leases.

The court further rejected petitioner’s reliance on Communities for a Better Environment v. South Coast Air Quality Management Dist. (2010) 48 Cal.4th 310. While that case establishes that the city would need to consider the actual amounts of irrigation water provided in the past, rather than a hypothetical right to eliminate water deliveries, it further establishes that doing so does not prevent the city from exercising its right under the 2010 Leases to curtail or reduce water deliveries.

The court also found that the city’s past practices did not support petitioner’s claim that the 2018 allocation was an implementation of a new low- or zero-water delivery policy. While petitioner claimed that the city historically provided up to 5 AF/acre of water reduced proportionally based on deviations in snowpack and anticipated runoff, the court found that the actual water deliveries under the 2010 Leases did not have a linear relationship with runoff. In considering the declaration previously excluded by the trial court as evidence, the court also found that the higher allocations in 2019 and 2020 demonstrate that the 2018 water allocation was an implementation of the 2010 Leases, not a new project.

Finally, the court held that without some evidence beyond the simply the timing of correspondence between the city and petitioner and the city’s issuance of an NOP for the Proposed Dry Leases, it could not find that the NOP meant that the city’s reliance on the 2010 Leases for the 2018 allocation was a pretext for implementing that project.

Because the court found that the 2018 water allocation was within the scope of the 2010 Leases, it held that petitioner’s lawsuit effectively challenged the 2018 implementation of a project approved in 2010 and was therefore barred by CEQA’s statute of limitations.

By Christina L. Berglund

SECOND DISTRICT FINDS QUANTIFICATION OF EXISTING WATER RIGHTS NOT REQUIRED UNDER CEQA FOR WATER DIVERSION AND STORAGE PROJECT

On March 3, 2022, the Second District Court of Appeal ordered published its decision in Buena Vista Water Storage District v. Kern Water Bank Authority (2022) 76 Cal.App.5th 576, in which the court held that an EIR for a project to divert and store unappropriated flood flows need not quantify all existing water rights. The court also held that CEQA does not require the project description to specify the exact amount of water that would be diverted, since that amount will vary from year to year based on the weather. Additionally, the court held that substantial evidence supported the EIR’s conclusion that the project would not adversely affect the long-term recovery of the groundwater basin in which it is located, as the project would cause a net benefit to the aquifer.

Factual & Procedural Background

Although the Kern River had been designated a fully appropriated stream for many years—such that only those who held an appropriative right could divert from it—in 2010, the State Water Resources Control Board (SWRCB) found that in certain wet years, Kern River water was available in excess of the amount appropriated. In particular, following construction of the Kern River-California Aqueduct Intertie in 1977, the Kern River water master began occasionally releasing reservoir water into the intertie to alleviate flooding. This release only occurs when flows are in excess of those held by existing water rights holders. The SWRCB concluded that this flood-released water was unappropriated and stated that it would allow applications to appropriate that water.

Respondent, the Kern Water Bank Authority, thereafter filed an application with the SWRCB seeking a permit for a water right to divert and store up to 500,000 acre-feet-per-year of the unappropriated water. The Authority also certified an EIR for the project. Buena Vista Water Storage District filed a petition for writ of mandate, seeking to set aside the Authority’s certification of the EIR and its approval of the project.

The trial court granted Buena Vista Water Storage District’s writ petition, holding: (1) the EIR’s project description was inadequate because it did not quantify existing water rights and it was unstable; (2) the EIR’s discussion of the existing baseline was inadequate because it did not quantify competing existing rights to Kern River water; and (3) the EIR’s impact analysis was inadequate because it did not adequately assess impacts on senior rights holders and impacts on groundwater during long-term recovery operations. The Court of Appeal reversed, concluding that the EIR complied with CEQA.

The Court of Appeal’s Opinion

The EIR’s Project Description is Accurate and Stable

Unlike the trial court, the Second District Court of Appeal held that the EIR’s project description is adequate under CEQA. As explained by the court, the EIR consistently and adequately describes the project as “‘high flow Kern River water, only available under certain hydrologic conditions and after the rights of senior Kern River water right holders have been met, that otherwise would have (1) been diverted to the Intertie, (2) flooded farmlands, or (3) left Kern County.’”

Buena Vista Water Storage District argued that the EIR’s project description is unstable because it relies on an “open-ended limit of ‘up to 500,000 [acre-feet] of water.” The court rejected this argument, explaining that a precise amount of water to be diverted by the project cannot be determined because water availability will fluctuate from year to year. As stated by the court: “A project description may use a flexible parameter when subject to future changing conditions.” Furthermore, the proposed 500,000 acre-foot-per-year is a finite maximum amount based on historical conditions, thus providing an adequate upper-end of the proposed diversion.

EIR Not Required to Quantify Existing Water Rights

The appellate court also rejected the District’s contention that the EIR’s project description must include a quantification of existing Kern River rights. That amount of detail is not necessary under CEQA Guidelines section 15124, subdivision (c), which requires a “general description” of the project’s technical and environmental characteristics. Moreover, a stream-wide quantification is a complex proceeding conducted by the SWRCB or a court and can take several years (or even decades) to complete. CEQA does not require this type of exhaustive detail.

Similarly, the EIR’s description of the existing environmental setting is not required to include a quantification of the existing Kern River water rights. The EIR satisfies CEQA’s informational requirements by providing measurements of Kern River water historically diverted into the Kern Water Basin and estimating, based on these historic records, how much water the Kern River Bank Authority could have diverted from the basin under baseline conditions. A complete quantification of existing water rights was not necessary to provide these estimates.

Finally, the court found it was clear that existing rights would not be impacted because the SWRCB cannot issue a new permit to divert water that is already subject to existing water rights. Further, the SWRCB expressly allowed processing of water rights applications, like the one at issue, in its Order finding that the water diverted to the Intertie was not fully appropriated. Quantification of the existing water rights was not necessary to evaluate the project’s impacts.

Substantial Evidence Supports the EIR’s Conclusions Regarding Groundwater Impacts

According to the trial court, the project would alter groundwater recovery by making groundwater available for long-term pumping for additional months or years during drought conditions, which, in the trial court’s view, would likely deplete groundwater during a drought. The Second District rejected the lower court’s analysis as factually inaccurate. The purpose of the project is to add to groundwater supplies and increase the availability of groundwater storage. The EIR concludes that the project would raise the local groundwater, resulting in a net increase in aquifer volume. Additionally, the Kern Water Bank Authority’s existing groundwater and monitoring policies will ensure that banking additional groundwater will not lower groundwater tables or affect the production rate of existing wells. Thus, substantial evidence supports the EIR’s conclusion that the project’s groundwater impacts will not be significant.

Conclusions & Implications

The Second District’s decision addresses whether an EIR for a water diversion and storage project must quantify the existing water rights to the underlying waterbody. In holding that such quantification is not required for the Kern Water Bank Authority’s proposed water diversion project, the Court of Appeal adhered to the principle that CEQA does not require an exhaustive analysis, but rather a good faith and reasonable effort at full disclosure. The decision also recognizes that for certain types of projects, particularly those involving water supplies, a project description must be somewhat flexible. The decision illustrates how a court reviewing an EIR must defer to the lead agency’s factual analyses and conclusions—deference that the trial court had failed to give to the Kern Water Bank Authority’s determinations.

– Laura Harris Middleton