In February 2012, Westlands Water District and its related distribution districts (together Water Districts or respondents)
The subject agreements were entered into by the Bureau and Water Districts, each of which are public entities. The Bureau is the federal agency that operates the CVP, administers CVP water and enters into contracts to provide that water to contractors such as Water Districts (known as water service contracts). Water Districts are public entities established for the purpose of receiving CVP water and distributing that water to end users (i.e., farmers) for beneficial use (i.e., irrigation to grow crops) on lands within Water Districts' boundaries. (See, e.g., Wat. Code, § 37800 et seq. [relating to Westlands Water District].)
Westlands Water District, by far the largest of respondent districts, serves over 600,000 acres of farmland on the west side of the San Joaquin Valley. Westlands Water District has had water service contracts in place with the Bureau since the 1960's and, through such contracts, has had a right to receive approximately 1 million acre-feet of CVP water per year, subject to water availability and other factors.
With respect to Water Districts' existing contractual rights to receive CVP water, the Bureau and Water Districts are willing to enter into long-term renewal contracts, but that prospect has been delayed by the Bureau's failure to complete the required environmental documentation. In the meantime, the parties have agreed to a series of interim renewal contracts in order to continue water deliveries on the same terms as before. The six 2-year, interim renewal contracts entered into by the parties in 2012 are the subject of the instant appeal.
Because the water that is the subject of the contracts between Water Districts and the Bureau is diverted, stored and delivered through CVP
The CVP is a federal reclamation project built within the major watersheds of the Sacramento and San Joaquin River systems and the Sacramento-San Joaquin Delta (Delta), providing water storage and distribution to the Central Valley of California. A recent federal opinion noted the following legal and factual background: "Reclamation projects are indispensible features of agriculture in the Western United States. `The Reclamation Act of 1902 set in motion a massive program to provide federal financing, construction, and operation of water storage and distribution projects to reclaim arid lands in many Western States.' [Citations.] ... [¶] The Central Valley Project (`CVP') is `a system of dams, reservoirs, levees, canals, pumping stations, hydropower plants, and other infrastructure [that] distributes water throughout California's vast Central Valley.' [Citation.] The CVP was originally `taken over and executed' by the United States under the Reclamation Act and was reauthorized by the Rivers and Harbors Act of 1937, Pub. L. No. 75-392, 50 Stat. 844, 850 (`the CVP Act'). [Citation.]" (San Luis Unit Food Producers v. U.S. (9th Cir. 2013) 709 F.3d 798, 801 (San Luis Unit).) The Bureau is the agency within the United States Department of the Interior charged with administering the CVP. (Westlands, supra, 337 F.3d at p. 1096; San Luis Unit, supra, at p. 801.)
As built and operated, the CVP is "the nation's largest water reclamation project and California's largest water supplier." (In re Bay-Delta etc. (2008) 43 Cal.4th 1143, 1154 [77 Cal.Rptr.3d 578, 184 P.3d 709], fn. omitted.) It operates 21 reservoirs, 11 powerplants, and 500 miles of major canals and aqueducts. With total storage capacity of more than 12 million acre-feet, the CVP delivers approximately seven million acre-feet of water annually to over 250 water contractors, primarily for agricultural use in the Central Valley. (Id. at fn. 1) The CVP "`supplies two hundred water districts, providing water for about thirty million people, irrigating California's most productive agricultural region and generating electricity at [numerous] powerplants.'" (San Luis & Delta-Mendota Water Authority v. U.S. (9th Cir. 2012) 672 F.3d 676, 682 (San Luis & Delta Mendota), quoting Westlands Water Dist. v. U.S. Dept. of Interior (9th Cir. 2004) 376 F.3d 853, 861.) The Bureau operates the CVP
In 1960, Congress authorized the construction of the San Luis Unit "`as an integral part'" of the CVP (the San Luis Act; Pub.L. No. 86-488 (June 3, 1960) 74 Stat. 156).
We note in passing that when the San Luis Unit was authorized by Congress in 1960, it was on the condition that adequate drainage from the area served by that unit was to be provided. (Firebaugh Canal Co. v. U.S. (9th Cir. 2000) 203 F.3d 568, 570.) The reason for such a requirement was the common knowledge that "[i]rrigation and drainage are inherently linked" and "[a]ny water project that brings fresh water to an agricultural area must take the salty water remaining after crops have been irrigated away from the service area." (Id. at p. 571.) The statutory obligation to provide for such drainage was placed squarely on the United States Department of the Interior. (Ibid.; see Firebaugh Canal Water Dist. v. U.S. (9th Cir. 2013) 712 F.3d 1296,
In the original 1937 CVP act, Congress prioritized the purposes of the CVP as "`first, for river regulation, improvement of navigation, and flood control; second, for irrigation and domestic uses; and, third, for power.'" (San Luis Unit, supra, 709 F.3d at p. 801, quoting the 1937 CVP act, § 2.) In 1992, Congress passed the Central Valley Project Improvement Act (the CVPIA; Pub.L. No. 102-575 (Oct. 30, 1992) 106 Stat. 4706), which, among other things, amended the original CVP act to reprioritize the objectives of the CVP. The CVPIA elevated the protection of fish and wildlife to one of the main purposes of the CVP, alongside of irrigation and domestic uses, and it reserved 800,000 acre-feet of CVP water for environmental and wildlife protection purposes. (CVPIA, §§ 3406(a) & (b)(2), 3404(c); see In re Bay-Delta etc., supra, 43 Cal.4th at p. 1154; San Luis Unit, supra, at pp. 801-802.)
Of course, another major factor in the Bureau's task of allocating water to contractors (such as Water Districts) is annual precipitation. The Bureau's water plan states: "[The Bureau] holds contracts with many water districts and municipalities which commit the agency to provide up to a maximum quantity of water in any particular year. Each year, [the Bureau] must determine, based on meteorological and hydrological conditions and other operational and institutional factors, how much water can actually be delivered to each district and municipality. This is called the allocation process. Allocations are usually expressed as a percentage of the maximum contract volumes of water prescribed in the contracts held between [the Bureau] and the various water districts, municipalities and other entities." (U.S. Dept. of the Interior, Bureau of Reclamation, Central Valley Project Water Plan (2011) p. 4 (CVP Water Plan).) However, in addition to considering the amount of water available from rainfall, expected snowpack runoff from the Sierra and reservoir storage, the Bureau also takes into account its obligations under environmental laws, which often significantly impact its determination of the amount of CVP water available to contractors.
Not infrequently, the Bureau must make its water allocation decisions during periods of drought. In its water service contracts with contractors, the Bureau includes standard provisions for the reduction of water quantities to contractors during a drought or water shortage.
Water service contracts with the Bureau are the prescribed legal arrangement through which CVP water is provided to contractors. The purposes of water service contracts are to establish the rates and other terms for water delivery, to produce sufficient revenue to recover an appropriate share of the federal government's capital investment, and to repay the Bureau's annual operation and maintenance costs. (43 U.S.C. § 485h(e).) Water service contracts are the mechanisms used to recover each contractor's share of these costs as a condition for receiving CVP water. (Ibid.)
Here, the original water service contract between the Bureau and Westlands Water District was entered into in 1963,
In 1992, long before the expiration of Westlands Water District's 1963 water service contract (as described above), the CVPIA was enacted into law. The CVPIA provided that the Bureau "shall," upon request, renew existing long-term water service contracts for a period of up to 25 years,
In 2007, when the original 1963 water service contract between the Bureau and Westlands Water District was about to expire, the Bureau had not yet completed its environmental documentation necessary for the execution of a long-term (25-year) renewal of the water service contract with Westlands Water District. Accordingly, at that time, Westlands Water District and the Bureau entered into a three-year, interim renewal of the water service contract for 1.15 million acre-feet of water. In 2010, Westlands Water District and the Bureau entered into a two-year, interim renewal contract on the same terms. In 2012, when the Bureau had still not completed its environmental documentation, the same parties entered into another two-year, interim renewal contract on the same terms. That two-year, interim renewal contract between Westlands Water District and the Bureau (contract No. 14-06-200-495A-IR3) is one of the six interim contracts at issue in the present appeal.
The other five interim renewal contracts challenged by petitioners were entered into by the Distribution Districts — specifically, four were entered into by Westlands Distribution District No. 1 and one by Westlands Distribution District No. 2, which contracts are briefly summarized below.
Westlands Distribution District No. 1 obtained an assignment of rights from Mercy Springs Water District to 6,260 acre-feet of CVP water, which represents a portion of Mercy Springs Water District's rights under a water service contract entered into in 1967 between the Bureau and Mercy Springs Water District. Beginning in 2000, Westlands Distribution District No. 1 entered into a series of interim renewal contracts with the Bureau for this water. The 2012 two-year, interim renewal contract between Westlands Distribution District No. 1 and the Bureau concerning this water (contract No. 14-06-200-3365A-IR13-B) is one of the contracts at issue in the present appeal.
In 2004, Westlands Distribution District No. 1 obtained an assignment of 2,500 acre-feet of CVP water from Centinella Water District, which rights had belonged to Centinella Water District pursuant to a 1977 water service contract with the Bureau. Since the assignment, Westlands Distribution District No. 1 entered into a series of interim renewal contracts with the Bureau concerning this water. The 2012 two-year, interim renewal contract
In 2005, Westlands Distribution District No. 1 was assigned 2,990 acre-feet of CVP water from Widren Water District, the rights to which had belonged to Widren Water District under a 1967 water services contract with the Bureau. Subsequent to the assignment, Westlands Distribution District No. 1 entered into a series of interim renewal contracts with the Bureau concerning this water. The 2012 two-year, interim renewal contract between Westlands Distribution District No. 1 and the Bureau concerning this water (contract No. 14-06-200-8018-IR13-B) is one of the contracts at issue in the present appeal.
In 2007, Westlands Distribution District No. 1 entered into an agreement for the assignment of 27,000 acre-feet of CVP water from Broadview Water District. Broadview Water District had acquired the right to that volume of CVP water in a 1959 water service contract with the Bureau. Since the 2007 assignment, Westlands Distribution District No. 1 entered into a series of interim renewal contracts with the Bureau concerning this 27,000 acre-feet of water, including the 2012 two-year, interim renewal contract (contract No. 14-06-200-8092-IR13), which is one of the contracts at issue in the present appeal.
In 2003, Westlands Distribution District No. 2 entered into an agreement for the assignment of 4,198 acre-feet of CVP water from Mercy Springs Water District. Subsequent to that assignment, Westlands Distribution District No. 2 entered into a series of interim renewal contracts with the Bureau concerning this water, including the 2012 two-year, interim renewal contract (contract No. 14-06-200-3365A-IR13-C). That 2012 interim renewal contract is one of the contracts at issue in the present appeal.
In December 2011, Water Districts approved the 2012 two-year, interim renewal contracts at issue in this appeal and, in doing so, found that such renewals were exempt from the requirements of CEQA for several reasons. Water Districts' resolutions found that the interim renewal contracts merely involved the ongoing receipt and delivery of water on identical terms as the prior water service contracts, with no expansion of service and no new facilities constructed. Further, Water Districts found that, to the extent the interim renewal contracts involved any changes, such changes related solely to rates, dates and other minor administrative matters. On these and related factual grounds, Water Districts made specific findings that the renewals were
We note that the Bureau, prior to its approval of interim renewals, performed an environmental assessment under the National Environmental Policy Act of 1969 (NEPA; 42 U.S.C. § 4321 et seq.) concerning the two-year, interim renewal contracts that related to CVP water from the San Luis Unit provided to six particular contractors, including Westlands Water District. The Bureau made findings under NEPA of no significant impact. That is, the interim renewals were "not a major federal action that would significantly affect the quality of the human environment and an environmental impact statement is not required ...." (U.S. Dept. of the Interior, Finding of No Significant Impact (Feb. 2010) p. 1.)
Following the approvals of the 2012 interim renewal contracts by Water Districts, petitioners filed their CEQA lawsuit — a petition for writ of mandate — seeking to set aside the approvals based on alleged failure to comply with CEQA. Petitioners' lawsuit alleged that no exemption to CEQA was applicable and that Water Districts were required to undertake environmental review of the interim renewal contracts prior to any approvals thereof. As to potential adverse effects on the environment of entering into the interim renewal contracts, petitioners claimed that the water rights at issue would involve the diversion (by the Bureau) of a substantial volume of water from the Delta, thereby further affecting waterflows and water purity in the Delta and harming or endangering certain fish species within that fragile ecosystem. Additionally, petitioners alleged that Water Districts' delivery of irrigation water to the lands served by Water Districts would contribute to a further buildup of contamination of the soils and water tables with salt, selenium and other pollutants. Since CEQA allegedly applied and was not followed by Water Districts, and because potentially significant environmental impacts were at stake, petitioners requested that the trial court set aside Water Districts' approvals of the 2012 interim renewal contracts.
After petitioners' lawsuit was filed, Water Districts moved to dismiss on several procedural grounds, including failure to exhaust administrative remedies, lack of standing, and failure to join an indispensable party. The motion to dismiss was denied.
The hearing on the merits of the petition for writ of mandate was held in the trial court on April 5, 2013. The parties filed trial briefs and appeared and
In its written order, the trial court came to the same conclusions as Water Districts: the interim renewal contracts were exempt from CEQA. As to the "`rate-setting'" exemption found at section 21080, subdivision (b)(8), and Guidelines section 15273, the trial court observed that the interim renewal contracts had the effect of setting rates between the Bureau and Water Districts and, in all other respects, merely continued existing water deliveries without any change. Therefore, the trial court found that this exemption to CEQA was applicable. The trial court next considered the "`ongoing project'" exemption that is set forth in Guidelines section 15261, which the trial court explained was intended to remove from CEQA projects that "were authorized before the adoption of CEQA" and that have "not changed in such a way as to cause new environmental impacts." In discussing this exemption, the trial court found that "the contracts merely continue the project that was originally authorized in 1965, long before CEQA was effective in November of 1970, and therefore the contracts fall within the `ongoing projects exemption.'" The trial court noted that although there had been some degree of expansion in water deliveries and distribution systems since 1970, "the current round of interim renewal contracts [were] not part of [that] expansion." For these reasons, the trial court found that the ongoing projects exemption applied.
Finally, the trial court held that the "[e]xisting [f]acilities" exemption set forth in Guidelines section 15301 was applicable, since the interim renewal contracts "merely authorized continued water deliveries under the existing system and use of the distribution network to provide those water deliveries." The trial court rejected petitioners' argument that exceptions to this categorical exemption (relating to significant effects on the environment caused by unusual circumstances or cumulative impacts) defeated the existing facilities exemption. Inasmuch as the baseline for the interim renewal contracts was the environment as it existed in December 2011, including all environmental damages that already existed at that time, and because said contracts did not increase or change the existing water deliveries or construct new facilities, the exceptions to the exemption were not established.
In short, the trial court fully agreed with the findings of exemption adopted by Water Districts when the approvals were made.
After the trial court found the approvals of the 2012 interim renewal contracts were exempt from CEQA, it denied the petition for writ of mandate.
In the appeal now before us concerning the 2012 interim renewal contracts, the issues are likewise moot. The contracts expired in February 2014 and all activity under those contracts ended at that time.
Appellate review under CEQA is de novo in the sense that we review the agency's actions as opposed to the trial court's decision. (Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova (2007) 40 Cal.4th 412, 427 [53 Cal.Rptr.3d 821, 150 P.3d 709] (Vineyard Area).) However, our inquiry extends only to whether there was a prejudicial abuse of discretion. (§ 21168.5.) "Such an abuse is established `if the agency has
Statutory exemptions, as the term implies, are those enacted by the Legislature. "Because CEQA is statutory in origin, the Legislature has the power to create exemptions from its requirements. Projects and activities can be made wholly or partially exempt, as the Legislature chooses, regardless of their potential for adverse [environmental] consequences." (Great Oaks Water Co. v. Santa Clara Valley Water Dist. (2009) 170 Cal.App.4th 956, 966, fn. 8 [88 Cal.Rptr.3d 506] (Great Oaks), relying on Napa Valley Wine Train, Inc. v. Public Utilities Com. (1990) 50 Cal.3d 370, 376, 382 [267 Cal.Rptr. 569, 787 P.2d 976] [as to each statutory exemption, the Legislature has determined that the exemption promoted an interest important enough to justify foregoing CEQA compliance].) "A critical difference between statutory and categorical exemptions is that statutory exemptions are absolute, which is to say that the exemption applies if the project fits within its terms. Categorical exemptions, on the other hand, are subject to exceptions that defeat the use of the exemption and the agency considers the possible application of an exception in the exemption determination." (Great Oaks, supra, at p. 966, fn. 8.)
An agency's finding that a statutory exemption applies to a project will be upheld if substantial evidence supports the finding of exemption. (Concerned Dublin Citizens v. City of Dublin (2013) 214 Cal.App.4th 1301, 1311 [154 Cal.Rptr.3d 682].) "In determining whether an agency's findings concerning the use of a statutory exemption from CEQA may be upheld, we review the administrative record to see that substantial evidence supports each element of the exemption. [Citations.] `There must be "substantial evidence that the [activity is] within the exempt category of projects." [Citation.] That evidence may be found in the information submitted in connection with the project, including at any hearings that the agency chooses to hold. [Citation.]'
On the other hand, if we are required to construe the scope of a statutory exemption, to that extent the issue becomes one of statutory interpretation to which we apply de novo review. (Del Cerro Mobile Estates v. City of Placentia (2011) 197 Cal.App.4th 173, 179 [127 Cal.Rptr.3d 413]; Bus Riders Union v. Los Angeles County Metropolitan Transportation Agency (2009) 179 Cal.App.4th 101, 106-107 [101 Cal.Rptr.3d 385].)
Less clear is the standard of review that is applicable to the second part of the agency's analysis — namely, whether an exception to the categorical exemption exists. On this question, there is a split of authority. (Fairbank, supra, 75 Cal.App.4th at pp. 1259-1260 [describing split of authority].) One line of cases has applied the "`fair argument'" standard, holding that a finding of categorical exemption cannot be sustained if there is a fair argument based on substantial evidence in the record that an exception applies (e.g., a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances), even where the agency is also presented with substantial evidence to the contrary. (Ibid. [noting a rationale cited for this approach is the analogy to challenges to negative declarations]; see Committee to Save the Hollywoodland Specific Plan v. City of Los Angeles, supra, 161 Cal.App.4th at p. 1187.) A number of recent appellate cases have applied the "fair argument" standard to whether an exception has been established, including Voices for Rural Living v. El Dorado Irrigation Dist. (2012) 209 Cal.App.4th 1096, 1108 [147 Cal.Rptr.3d 480], Banker's Hill, Hillcrest, Park West Community Preservation Group v. City of San Diego (2006) 139 Cal.App.4th 249, 262 [42 Cal.Rptr.3d 537] (Banker's Hill), and Azusa Land Reclamation Co. v. Main San Gabriel Basin Watermaster (1997) 52 Cal.App.4th 1165, 1202-1204 [61 Cal.Rptr.2d 447] (Azusa Land).
Other cases have applied an ordinary substantial evidence test to questions of fact regarding exceptions to categorical exemptions, deferring to the express or implied findings of the local agency that found a categorical exemption applicable. (Fairbank, supra, 75 Cal.App.4th at pp. 1259-1260.) Such cases include Santa Monica Chamber of Commerce v. City of Santa Monica (2002) 101 Cal.App.4th 786, 796 [124 Cal.Rptr.2d 731] (Santa Monica), City of Pasadena v. State of California (1993) 14 Cal.App.4th 810, 824 [17 Cal.Rptr.2d 766], Centinela Hospital Assn. v. City of Inglewood (1990) 225 Cal.App.3d 1586, 1601 [275 Cal.Rptr. 901], and Dehne v. County of Santa Clara (1981) 115 Cal.App.3d 827, 844-845 [171 Cal.Rptr. 753].
We do not need to decide which view is correct because, here, the result is the same even under the less deferential fair argument standard, as will be seen in the part of this opinion discussing Water Districts' claim of categorical exemption for existing facilities. But first we shall consider the statutory exemptions.
Water Districts assert that the ratesetting exemption was applicable in this case because the 2012 interim renewal contracts kept the status quo in place and incorporated the terms of prior interim agreements between the parties, without change, some of which had previously included a schedule of water rates. In approving the 2012 interim renewal contracts, Water Districts made express findings that the renewals would simply provide for continued water delivery on the same terms, using the same facilities, without any change or expansion of existing use. As to rates, Water Districts' 2011 resolutions claimed that the renewals involved only adjustments to rates and related administrative terms to meet operating expenses. However, the 2012 interim renewal agreements make no mention of any setting or adjustment of rates.
In implementing CEQA, the Guidelines recognize a statutory exemption for a project approved prior to November 23, 1970, that is still "being carried out" by the public agency. (Guidelines, § 15261, subd. (a) (Guidelines, § 15261(a)).)
The full text of section 15261(a) of the Guidelines provides, under the heading "Ongoing Project," as follows:
In Nacimiento, a government agency built a dam and reservoir prior to the enactment of CEQA. The agency's application to build the project had provided for operation of a reservoir, including the storing and periodic release of water in varying amounts and for different uses. The plaintiff in that case challenged the agency's 1991 decision to release large amounts of water that year to benefit various interests downstream. The appellate court held that the agency's annual decision to release water to competing interests was an inherent part of an ongoing project and exempt from CEQA. (Nacimiento, supra, 15 Cal.App.4th at pp. 201, 204-208.) The court explained: "Whether an activity requires environmental review depends upon whether it expands or enlarges project facilities or whether it merely monitors and adjusts the operation of existing facilities to meet fluctuating conditions." (Id. at p. 205.) Since the project in that case did not involve enlargement of capacity to divert water or make other material revisions, but instead continued operations within existing parameters, it fell within the ongoing project exemption and did not require CEQA review. (Nacimiento, supra, at pp. 207-208; see Amador, supra, 76 Cal.App.4th at pp. 968-969 [stating the same test, but holding the exemption did not apply there because of "remarkable" change in proposed operation of the project from nonconsumptive to consumptive water use]; cf. County of Inyo v. Yorty (1973) 32 Cal.App.3d 795, 806-808 [108 Cal.Rptr. 377] [the city's additional pumping facilities and expanded groundwater extraction increased the intensity and scope of the
In the instant appeal, petitioners argue that the exemption for ongoing projects did not apply because there were expanded operations in the years after CEQA took effect, creating significant effects on the environment beyond that of the originally conceived project. Allegedly, the 2012 approvals necessarily included the post-CEQA expansions and, therefore, could not come within the terms of the exemption. Taking the contrary position, Water Districts maintain that substantial evidence in the record adequately supported their findings that the 2012 interim renewal contracts and the activity contemplated therein came within the scope of the exemption for pre-CEQA ongoing projects.
We conclude Water Districts are correct. That is, there is substantial evidence in the record to support the Water Districts' claim of statutory exemption under Guidelines section 15261(a). As explained in due course below, this conclusion is evidenced by a comparison of the nature of the original pre-CEQA project and the current activity challenged by petitioners. That comparison reflects that the matters presently challenged by petitioners are merely an incidental part of the original, ongoing pre-CEQA project — and therefore exempt.
Before considering whether there is an ongoing pre-CEQA project here, we first note how CEQA defines a project. Under CEQA, a "`[p]roject' means an activity which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and which is any of the following: [¶] (a) An activity directly undertaken by any public agency. [¶] (b) An activity undertaken by a person which is supported, in whole or in part, through contracts, grants, subsidies, loans, or other forms of assistance from one or more public agencies. [¶] (c) An activity that involves the issuance to a person of a lease, permit, license, certificate, or other entitlement for use by one or more public agencies." (§ 21065.) The Guidelines elaborate that a "`[p]roject' means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment ..." and which is undertaken, supported or approved by a public agency. (Guidelines, § 15378, italics added.) The Guidelines further clarify that "[t]he term `project' refers to the activity which is being approved and which may be subject to several discretionary approvals by governmental agencies. The term `project' does not mean each separate governmental approval." (Guidelines, § 15378, subd. (c), italics added.) The question of the
Our next step is to ascertain the nature of the original project or activity that was approved prior to November 23, 1970. Since we will be discussing matters that occurred long before the two Distribution Districts were formed, the focus of our discussion of pre-CEQA events will be on Westlands Water District. Consistent with the parties' briefing of this issue, our examination of the record will include both (i) the water distribution facilities constructed for Westlands Water District's use and operation and (ii) the CVP water that (depending on availability) Westlands Water District was entitled to receive and distribute annually for use on lands within Westlands Water District's service area.
At this point in our analysis, we consider the facilities aspect of the purported ongoing project. That is, we determine whether the record is sufficient to support the conclusion that Westlands Water District, by means of contractual commitments or other agency determinations made prior to CEQA's enactment, approved at that time the construction of its water distribution facilities, including the canals, laterals and other infrastructure
On April 1, 1965, Westlands Water District entered into a contract with the Bureau providing for the construction of a "water distribution and drainage collector system." (U.S. Dept. of the Interior, Bureau of Reclamation, Contract Between U.S. & Westlands Water Dist. (Apr. 1, 1965) p. 2.) The water distribution system was to include a lateral conveyance system, primarily of enclosed pipe and related facilities, all of which was to generally conform to an attached plan in an exhibit A thereto (a feasibility plan showing the layout and approximate location of the laterals and sublaterals). By executing the contract, the Bureau agreed to construct such facilities at a total cost not to exceed $157,048,000, and Westlands Water District agreed to repay such construction costs and other related expenses over a period of 40 years. The construction was to be carried out in several phases, with the final two phases to begin no later than specified dates in the mid-to-late 1970's.
Effective June 29, 1965, the Legislature enacted special legislation known as the Westlands Water District Merger Law (Wat. Code, § 37800 et seq.), which merged the adjacent West Plains Water Storage District into Westlands Water District.
In 1965, after the above described merger, Westlands Water District adopted a resolution that requested and authorized the Bureau to immediately begin the work necessary for construction of a sufficient water delivery system for the enlarged district pursuant to the existing repayment plan in the April 1, 1965, construction contract and invited negotiation of any amendatory repayment plan as the Bureau may deem necessary. In 1966, a plat was prepared identifying rights-of-way for distribution system laterals serving all of the areas within Westlands Water District's postmerger boundaries. By 1968, the Bureau's official publications and other written documentation acknowledged that the water distribution system under construction by the Bureau would be used to serve approximately 600,000 acres of Westlands Water District. During that same year, the Bureau and Westlands Water District entered into a supplemental contract to expedite the construction of the water distribution system within Westlands Water District's boundaries (understood as comprising approximately 600,000 acres), which contract also provided for Westlands Water District to receive an additional 1.4 million acre-feet of water within a 10-year period (the 1968 supplemental contract). The 1968 supplemental contract (entitled "Contract for Short Term Water Service") was approved by resolution of Westlands Water District in 1968.
In our estimation, the foregoing evidence was more than sufficient to show that prior to November 23, 1970, Westlands Water District (and the Bureau) had committed to a definite course of action (i.e., given approval) as to the proposed construction and layout of the facilities that are presently used and operated by Westlands Water District to receive and deliver CVP water supplied by the Bureau from the San Luis Unit of the CVP.
The above described permanent facilities were obviously approved by Westlands Water District for the purpose of receiving and distributing CVP water for beneficial use on the lands within Westlands Water District's boundaries. One might reasonably expect that the same project would also entail Westlands Water District's entitlement to actually receive quantities of CVP water each year for that purpose. While that is indeed the case here, the more difficult question factually is how much water was approved by Westlands Water District pre-CEQA.
We begin with the 1963 water service contract between the Bureau and Westlands Water District. The 1963 water service contract provided Westlands Water District with CVP water rights of 1,008,000 acre-feet per year through 1979, and 900,000 acre-feet per year thereafter. The term of the water service contract was 40 years, commencing with the first water deliveries of CVP water, with renewals for additional 40-year terms expressly contemplated. The 40-year term of the 1963 water service contract expired at the end of 2007.
We note the 1963 water service contract was entered into before Westlands Water District merged with West Plains Water Storage District. Thus, by itself, the 1963 water service contract only shows that a right was established to 900,000 acre-feet per year (after 1979) for the lands in the original Westlands Water District (known as Priority Area I). Furthermore, as indicated by the chain of interim renewal contracts entered into after the 1963 water service contract expired, Westlands Water District's present contractual entitlements are for 1.15 million acre-feet per year of CVP water, an increase of 250,000 acre-feet from the 1963 contract. The question is: Was the right to the additional 250,000 acre-feet approved prior to the effective date of CEQA?
According to Water Districts, Westlands Water District's right to the additional 250,000 acre-feet of water per year, which was needed to serve the lands within the former West Plains Water Storage District (Priority Area II), can be traced to another contractual commitment entered into prior to CEQA's effective date. Specifically, Water Districts refer to the 1968 supplemental contract with the Bureau, which provided Westlands Water District an extra 1.4 million acre-feet of water that would be supplied within a period of 10 years. Water Districts note that if the 1.4 million acre-feet were divided evenly over the 10 years, the resulting 140,000 acre-feet per year, plus the existing 1,008,000 acre-feet to which Westlands Water District was entitled (through 1979) under the 1963 water service contract, would total 1,148,000 acre-feet (equivalent to 900,000 plus an additional 248,000 acre-feet). If so
The 1968 supplemental contract remained in effect until 1972;
The Barcellos judgment also stipulated that the Bureau and the United States Department of the Interior had known, at least since the 1965 merger of Westlands Water District with West Plains Water Storage District, that an additional "firm water supply" of 250,000 acre-feet of water per year was needed. By the time of the Bureau's approval of the 1968 supplemental contract, the Bureau acknowledged (as evidenced by official publications and other records) that the water distribution system it was building for Westlands Water District would serve the entire 600,000 acres, thereby indicating it understood the water deliveries to be provided thereby were for the postmerger Westlands Water District. Both the 1963 water service contract and the 1968 supplemental contract were formally approved by resolutions of Westlands Water District in those years.
We agree with Water Districts that the above facts, including the contracts entered into between Westlands Water District and the Bureau in 1963 and 1968, and reasonable inferences therefrom, constituted substantial evidence that the entire 1.15 million acre-feet of water to which Westlands Water District is presently entitled each year can be traced back to the contractual commitments made prior to the advent of CEQA. The 900,000 acre-feet of
The applicability of the ongoing projects exemption depends on whether the challenged action is "a normal, intrinsic part of the ongoing operation" of a project approved prior to CEQA, rather than an expansion or modification thereof. (Nacimiento, supra, 15 Cal.App.4th at p. 205; accord, Amador, supra, 76 Cal.App.4th at pp. 968-969.) Here, as discussed above, the original pre-CEQA project included the construction and operation of Westlands Water District's existing facilities to receive CVP water and to deliver that water to customers within Westlands Water District's boundaries. Moreover, the original pre-CEQA project included the entirety of the 1.15 million acre-feet of water to which Westlands Water District is presently entitled to receive by contract.
The currently challenged action or project consisted of the activity stemming from Water Districts' approval of the 2012 interim renewal contracts. By far the largest such contract was the interim renewal contract between Westlands Water District and the Bureau, which we treat separately. This contract incorporated the terms of the prior interim renewal contracts between said parties, thereby continuing without change Westlands Water District's right to receive 1.15 million acre-feet of water per year for use on lands within Westlands Water District boundaries, on the same terms as before. This contract involved a brief, two-year continuation of the same activity that was approved prior to CEQA, which activity Westlands Water District had been carrying out on an ongoing basis since that original pre-CEQA approval. As such, substantial evidence supported the conclusion that the activity contemplated in the 2012 interim renewal contract with Westlands Water District came within the ongoing projects exemption set forth in Guidelines section 15261(a).
The other five interim renewal contracts at issue herein were entered into by the Distribution Districts. The Distribution Districts acquired, post-CEQA,
Petitioners contend the above referenced assignments were expansions of the original scope of the pre-CEQA project, allegedly making the ongoing project exemption inapplicable. Petitioners argue the present case is similar to County of Inyo v. Yorty, supra, 32 Cal.App.3d 795, where an expansion in the extraction of groundwater and the use of added pumping facilities after CEQA took effect was considered a new project, severable from the original pre-CEQA aqueduct and, therefore, environmental review of that expanded water extraction program was required. (County of Inyo v. Yorty, supra, at pp. 804-808.) Water Districts' position is that the assignment agreements merely provided a small degree of flexibility that did not appreciably expand the activity involved in the original pre-CEQA project.
But even assuming the 2012 interim renewal contracts entered into by the Distribution Districts were not part of (or incidental to) the original ongoing project, we would still find them to be exempt under the categorical exemption for existing facilities (see Guidelines, § 15301), which is addressed in part IV. of this opinion. The same would also be true of the 2012 interim renewal contract entered into by Westlands Water District. That is, all six of the 2012 interim renewal contracts fit within that categorical exemption, as will be seen, even if the ongoing projects exemption is inapplicable.
We briefly mention the two exceptional situations referred to in Guidelines section 15261(a), in which the statutory exemption would not apply. First, under Guidelines section 15261(a)(1), an ongoing project approved prior to CEQA is exempt unless "[a] substantial portion of public funds allocated for the project have not been spent, and it is still feasible to modify the project to mitigate potentially adverse environmental effects ...." Here, the ongoing project before us was not in its early or formative stages, financially or otherwise. The facilities approved prior to CEQA were long ago completed, and the contractual water entitlements that were initiated prior to CEQA remain in place. Thus, the original project is funded, built out, established in its operational parameters and continues to be carried out on those terms each year. Nothing in the record suggests that a substantial portion of funding approved prior to CEQA remains unspent. We conclude that the exceptional situation described in subdivision (a)(1) of Guidelines section 15261 is not present here.
Second, subdivision (a)(2) of Guidelines section 15261 states that an ongoing project approved prior to CEQA is exempt unless "a public agency proposes to modify the project in such a way that the project might have a new significant effect on the environment." No such current or new proposal for a modification of the project is before us. In any event, even examining past occurrences relating to the project, there is (as discussed above) substantial evidence to support the conclusion that even the water assignment
We conclude that Water Districts' approvals of the six 2012 interim renewal contracts came within the statutory exemption for ongoing projects as set forth in Guidelines section 15261(a). Substantial evidence confirmed that, pursuant to said 2012 interim renewal contracts, CVP water would continue to be delivered within the parameters of the original pre-CEQA project for an additional two years, using the same facilities that were approved pre-CEQA. On that record, Water Districts correctly found the approvals to be exempt from compliance with CEQA.
We now consider the applicability to this case of the categorical exemption for the continued use of existing facilities at the same level of use. As noted earlier herein, categorical exemptions are not statutory in nature but are enumerated in the Guidelines to identify classes or categories of projects that ordinarily have no significant effect on the environment. (See § 21084, subd. (a); Guidelines, § 15300 et seq.) They are always subject to basic exceptions delineated in the Guidelines. (Guidelines, § 15300.2, subds. (b) & (c).)
Guidelines section 15300.2 sets forth the exceptions to categorical exemptions. It provides that categorical exemptions are inapplicable under certain conditions, including "where there is a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances" (id., subd. (c)), and "when the cumulative impact of successive projects of the same type in the same place, over time is significant" (id., subd. (b)). Petitioners assert that these two exceptions were established in the present case. Before discussing these exceptions further, we briefly reiterate the legal landscape regarding the applicable standard of review in this unique CEQA context.
Where, as here, an agency has established that a project comes within a categorical exemption, the burden shifts to the party challenging the exemption to show that it falls into one of the exceptions. (Fairbank, supra, 75 Cal.App.4th at p. 1259.) The substantial evidence test applies to an agency's factual determination that a project comes within the scope of a categorical exemption. (Committee to Save the Hollywoodland Specific Plan v. City of Los Angeles, supra, 161 Cal.App.4th at p. 1187; Fairbank, supra, at p. 1251.) However, as we observed in part I. of this opinion, there is a split of authority concerning the standard of review applicable to the second stage of the agency's analysis — that is, whether the project falls within an exception to the categorical exemption. (Fairbank, supra, at pp. 1259-1260; Hines v. California Coastal Com. (2010) 186 Cal.App.4th 830, 855-856 [112 Cal.Rptr.3d 354].) Some courts have applied the "`"fair argument"'" standard, meaning that a categorical exemption is defeated if there is a fair argument based on substantial evidence in the record that an exception is established; while other courts have applied the ordinary substantial evidence test to questions of fact relating to exceptions to categorical exemptions,
We find it unnecessary to decide which of these views is correct because the result is the same in this case even under the less deferential fair argument standard, as we presently explain.
Petitioners argue that Water Districts' view of what is "unusual" is too narrow. According to petitioners, since the water received by Water Districts comes from the CVP, which draws its water from the Delta, the diversion of more than 1 million acre-feet of water each year (or the portion thereof allotted by the Bureau) could potentially have an adverse effect on certain threatened fish populations and fragile habitat in the Delta. Additionally, petitioners assert that the water's use for irrigation purposes could potentially add to the salt and selenium content in the soil and groundwater in the
Here, assuming for the sake of argument that petitioners are correct that the large scale of the water diversion at issue (combined with the fragile fish ecosystem in the Delta and the salt/selenium issues on the west side) constituted "unusual" circumstances, that premise would only satisfy one element of this exception. In order for the exception to apply, petitioners would also have to establish that there is a reasonable possibility the activity will have a significant effect on the environment due to such circumstances.
Where a project involves ongoing operations or a continuation of past activity, the established levels of a particular use and the physical impacts thereof are considered to be part of the existing environmental baseline. (Communities for a Better Environment, supra, 48 Cal.4th at pp. 320-323, 326-328 [refinery's existing NOx (nitrogen oxide) emission levels constituted baseline for measuring adverse changes to environment of proposed diesel project]; East Shore Parks, supra, 202 Cal.App.4th at pp. 558-562 [baseline properly included current physical conditions and uses of operating marine terminal]; San Joaquin Raptor Rescue Center v. County of Merced (2007) 149 Cal.App.4th 645, 658 [57 Cal.Rptr.3d 663] [established levels of mining operation part of baseline]; Lighthouse Field Beach Rescue v. City of Santa Cruz (2005) 131 Cal.App.4th 1170, 1196 [31 Cal.Rptr.3d 901] [noting "the physical impacts of established levels of a particular use have been considered part of the existing environmental baseline..."; thus, the agency needed only to analyze proposed increases in intensity or rate of use]; Fat v. County of Sacramento (2002) 97 Cal.App.4th 1270, 1274, 1278 [119 Cal.Rptr.2d 402] [impact of existing airport operations were part of baseline]; Fairview Neighbors v. County of Ventura (1999) 70 Cal.App.4th 238, 242 [82 Cal.Rptr.2d 436] [baseline included established traffic levels from ongoing mining operations].)
This baseline principle means that a proposal to continue existing operations without change would generally have no cognizable impact under
Applying these CEQA baseline principles, we conclude that petitioners failed to establish the "significant effect on the environment" portion of the exception set forth in Guidelines section 15300.2, subdivision (c). Even under the fair argument standard, the 2012 interim renewal contracts and the activity contemplated therein were not shown to have the potential to cause a substantial adverse change from the environmental baseline at the time of Water Districts' approvals, which baseline included existing physical conditions and established levels of CVP water distribution and use.
Petitioners cited studies in the record that referred to the annual pumping and diversion of Delta water by the CVP (and the state water project) as one of many factors negatively affecting certain fish species such as smelt and salmon. Petitioners also pointed to evidence in the record that the continued use of irrigation water on the west side of the San Joaquin Valley contributed to salt and selenium levels in the soil and/or groundwater of that area due to a lack of adequate drainage. Although the matters raised by petitioners are genuine concerns, the evidence was inadequate to show that the particular project under consideration (i.e., the 2012 interim renewal contracts) had a
Water Districts' response is that we should not treat a renewal of the continuing operation of existing facilities (where no change in established levels of use will occur) as though it were an entirely new project with new impacts for purposes of CEQA review, because to do so would arguably circumvent CEQA's baseline principles. In any event, even assuming that each new round of interim renewal contracts resulted in "successive projects" within the meaning of Guidelines section 15300.2, subdivision (b), Water Districts argue that there was no cumulative impact here. (See, e.g., East Shore Parks, supra, 202 Cal.App.4th at pp. 565-566 [applying baseline principles to cumulative impact analysis].) That is, viewed in their correct setting, each interim renewal merely continued forward the existing parameters for the delivery of water under the existing environmental baseline conditions, which baseline conditions included the impact of established levels of annual water use. Therefore, according to Water Districts, no new or added impacts were created by each successive interim renewal. (See id. at pp. 558-562, 566 [lease renewal of an operative marine terminal had no cumulative impact, since the effects were part of baseline of the existing marine terminal and not of the lease renewal].)
Petitioners' rebuttal is that we are not dealing with a situation where baseline conditions, continued over time, create a sort of equilibrium where a certain number of fish are killed each year but everything else remains roughly the same. Instead, according to petitioners, the condition of the environment is growing steadily worse, with the combined impact of successive renewals contributing to the further significant deterioration of an already bad situation. In support of such assertion, petitioners point to evidence that CVP pumping in the Delta in conjunction with that of the state water project contributes to factors that jeopardize or threaten the continued existence of the delta smelt and certain salmon species, the numbers of which are steadily declining; and also that the continued use of irrigation water in the area of Westlands Water District is causing groundwater and soil to be increasingly degraded over time to the point that agricultural land must be retired. The gist of what petitioners are saying is that sometimes the collective whole, over time, creates impacts far greater than the sum of the individual parts.
Whether or not petitioners' argument is sufficient to overcome the force of Water Districts' position that no cumulative harm exists because all incremental impacts were subsumed by the existing baseline, we hold that the present litigation was not the proper time for petitioners to raise that cumulative impact claim because, here, the short-term interim renewal contracts did not constitute "successive projects of the same type" (Guidelines, § 15300.2, subd. (b)). Both the original 1963 water service contract (which provided for renewable, long-term water service contracts of 40-year periods) and the CVPIA (which in CVPIA, § 3404(c)) provided for renewals of the existing, long-term water service contracts for additional periods of 25 years) clearly recognized that this water distribution plan was to be carried out over long periods of time by means of renewable, long-term water service contracts.
This result is also in accord with notions of basic fairness and reasonableness in how CEQA is applied. As summarized previously herein, the CVPIA directed the Bureau to renew existing, long-term water service contracts once certain environmental studies by the Bureau were done. But the CVPIA further provided that until such environmental studies were completed, only interim renewal contracts of a very short duration could be entered into. The interim renewals were to be three years on the first occasion, with successive, interim periods of up to two years in length thereafter until the Bureau completed the required environmental documentation. (CVPIA, § 3404(c).) Thus, the CVPIA imposed interim renewal periods of artificially short durations to provide the Bureau with brief continuances, during which time the status quo would be maintained to bridge the gap. Since the exceptional brevity of each interim renewal period was not project driven, but was merely an expedient mechanism imposed by the CVPIA to assist the Bureau, we believe it would be unreasonable to insist that Water Districts conduct a full-scale environmental review under CEQA on the occasion of each two-year interval.
Accordingly, under the unique statutory context of this case, we hold that the brief, two-year, interim renewals at issue herein were not distinct or successive projects for purposes of Guidelines section 15300.2, subdivision (b) and, therefore, that exception was not established. On the record before us, the existing facilities categorical exemption was applicable to the 2012 interim renewal contracts and that exemption was not barred by either of the exceptions raised by petitioners.
In light of the conclusions we have reached in this opinion regarding CEQA exemptions, it is unnecessary to address Water Districts' additional arguments (procedural and otherwise) offered in support of their position that CEQA did not apply.
The judgment denying the petition for writ of mandate is affirmed. Costs on appeal are awarded to Water Districts.
Hill, P.J., and Levy, J., concurred.
