YEGAN, Acting P. J.
"When the well's dry, we know the worth of water." Benjamin Franklin wrote this aphorism in Poor Richard's Almanack (1746). It is as astute today as it was two centuries ago and illustrates the Legislature's prescience in creating the Fox Canyon Groundwater Management Agency (Fox Canyon) to address groundwater overdrafts. (West's Ann. Wat.-Appen. (1995 ed.) ch. 121, § 121-102 et seq.)
Fox Canyon is a special water agency created by the Legislature in 1982 to manage and conserve groundwater resources for agricultural, municipal, and industrial uses, for the common benefit of all water users. (§ 121-102.) Its mission is to develop, adopt, and implement a plan to control groundwater extractions in the Oxnard Plain with the objective of balancing water supply and demand by the year 2000. (§ 121-601.) Because of severe drought conditions, Fox Canyon has not yet been able to implement a long term plan. Groundwater overdrafts continue to threaten the groundwater basins and have caused seawater intrusion. It is an onerous undertaking. Fox Canyon's management area includes an upper and lower aquifer system, and seven groundwater basins serving approximately 51,000 acres of agricultural land.
PVCWD, a special district authorized by the County Water District Law (Wat. Code, § 30000 et seq.), encompasses approximately 12,000 acres of land in the Oxnard Plain, all within the Fox Canyon Groundwater Management Area. As a water purveyor, PVCWD sells United river surface water to farmers and agricultural operators. Agricultural operators are the primary beneficiaries of United's pipeline system to the extent that 12.22 percent of all water diverted from the Santa Clara River at the Freeman Diversion is contractually obligated to PVCWD.
In response to the Governor's 2014 proclamation declaring a statewide drought emergency, Fox Canyon adopted Emergency Ordinance E. Among other things, Emergency Ordinance E imposes groundwater extraction surcharges and requires that agricultural operators follow an annual efficiency allocation to reduce groundwater extractions. Emergency Ordinance E, which took effect in May 2014, is a temporary measure to limit groundwater extractions and give Fox Canyon time to implement a long-term solution to bring groundwater extractions into balance with recharge, i.e., a "safe yield." (§ 121-331.)
On January 9, 2015, the Fox Canyon Board of Directors adopted Ordinance No. 8.8 to clarify the groundwater extraction surcharge rules concomitant with Emergency Ordinance E. Before the adoption of Ordinance No. 8.8, Fox Canyon Ordinance section 5.8.5 provided that all sources of water, including surface water, would be considered in determining whether an operator exceeded his or her annual efficiency allocation, also known as an Irrigation Allowance Index. (See Fox Canyon Ordinance Code § 5.6.1.2.)
Ordinance No. 8.8 amends Ordinance section 5.8.5., Chapter 5.0, to clarify what water sources, if not used efficiently, subject an agricultural operator to a groundwater surcharge. The ordinance uses an Irrigation Allowance Index (IAI) threshold of 1.0 and requires three surcharge calculations: First, does the total annual amount of water used for agricultural production from all water sources (i.e., groundwater, river surface water, recycled or reclaimed water, and supplemental water) exceed the IAI threshold of 1.0? If the answer is "Yes," the IAI is recalculated using only groundwater extractions and river surface water. If the IAI is 1.0 or less, the agricultural operator pays no groundwater extraction surcharge.
If the agricultural operator's IAI exceeds 1.0, a surcharge is imposed but is limited to the amount of groundwater extractions that contributes to the annual efficiency allocation overage (i.e., an IAI greater than 1.0). "[T]he total water applied from those sources will be determined and compared to the extractions. If the extractions are greater than or equal to the water applied above an IAI of 1.0, surcharges will be imposed on the water applied above an IAI of 1.0. If the [groundwater] extractions are less than the water applied above an IAI of 1.0, surcharges will be imposed on all extractions."
On February 18, 2015, a month after Ordinance No. 8.8 was adopted, PVCWD sued for declaratory/injunctive relief and filed a petition for writ of mandate based on the theory that Fox Canyon lacked the statutory power to consider river surface water use in calculating the groundwater extraction surcharge. PVCWD claimed that Ordinance No. 8.8 violated the CEQA because the methodology for calculating the surcharge would incentivize groundwater pumping and deplete groundwater sources. After the matter was briefed and argued, the trial court denied the writ petition and dismissed the complaint.
PVCWD argues that Fox Canyon exceeded its statutory powers in treating Santa Clara River surface water as groundwater for purposes of calculating groundwater extraction surcharges. Where an agency has been delegated the Legislature's lawmaking power, the agency's quasi-legislative rules have the dignity of statutes and judicial review is limited to determining whether the regulation is within the scope of authority conferred and is reasonably necessary to effectuate the statute's purpose. (Yamaha Corp. of America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 10-11; see Gov. Code, § 11342.2 [implementing regulations adopted pursuant to statutory authorization must be "consistent and not in conflict with the statute and reasonably necessary to effectuate the purpose of the statute."].) In deciding whether Ordinance No. 8.8 conflicts with the legislative mandate (i.e., the Fox Canyon Groundwater Management Act; § 121-102 et seq.), we independently interpret the pertinent statutory law. (Id. at p. 11, fn. 4.) "The court, not the agency, has `final responsibility for the interpretation of the law' under which the regulation was issued. [Citations.]" (Ibid.)
The Fox Canyon Groundwater Management Agency Act provides that Fox Canyon "shall exercise the powers granted by this act for purposes of groundwater management within the boundaries of the agency, together with such other powers as are reasonably implied and necessary and proper to carry out the objectives and purposes of the agency." (§ 121-102.) The Legislature granted Fox Canyon broad authority to engage in groundwater management activities to preserve, protect, and enhance groundwater resources (§ 121-311), and to impose surcharges for excessive groundwater extractions (§ 121-330). Fox Canyon is authorized to adopt ordinances that regulate, conserve, manage, and control the use and extraction of groundwater. (§§ 121-403, 121-701; see, e.g., Central and West Basin Water Replenishment Dist. v. Southern Cal. Water Co. (2003) 109 Cal.App.4th 891, 915-916 [water district's authority to store water for conjunctive use includes authority to manage storage space in groundwater basin]; Zack v. Marin Emergency Radio Authority (2004) 118 Cal.App.4th 617, 637 [water district has authority under implied powers doctrine to construct and maintain emergency communications system].)
Fox Canyon was also granted the authority to implement conjunctive use objectives for groundwater management. (§ 121-305.5.)
PVCWD argues that groundwater management is limited to groundwater basins and does not grant Fox Canyon the authority to mathematically structure groundwater extraction surcharges on the availability and use of river surface water.
The monitoring of river surface water use, while not the primary purpose for which Fox Canyon was created, is within the scope of Fox Canyon's express and implied powers to preserve, protect, and enhance groundwater resources. (§ 121-311.) The delegation of regulatory power to a special water agency, without providing the mode for carrying such power into effect, impliedly permits Fox Canyon the right to select a lawful and reasonable means to carry out that power. (Zack v. Marin Emergency Radio Authority, supra, 118 Cal.App.4th at p. 637.)
PVCWD asks how is it that river surface water can be regulated like groundwater? The answer is: where river surface water is a primary source of groundwater recharge and a component part of a conjunctive water use management plan. "`Recharge' means the natural or artificial replenishment of groundwater storage by percolation or injection of one or more sources of water at the surface." (§ 121-321.) Alberto Boada, Fox Canyon's legal counsel, explained that the groundwater "surcharge [will] only be applied on any extractions. So even though the surface water being delivered by United is used to calculate whether or not the — the operator has exceeded its [IAI] allowance, . . . the surcharge would still only be applied on that operator's extractions. [¶] And the fundamental reason being that, under our legislation, we do not have the authority to surcharge use of surface water."
PVCWD opines that Fox Canyon is authorized to surcharge groundwater extractions but may not consider river surface water use in computing the surcharge. If that was true, an agricultural operator could extract the maximum allocated amount of groundwater without paying a surcharge, regardless of how much surface water is used and how wasteful the irrigation practices are. If river surface water is not considered in determining whether the operator's blended water use exceeds the IAI 1.0 threshold, there would be no financial incentive to efficiently use water. It would undermine Fox Canyon's ability to implement a groundwater water conservation program and violate established law that the unreasonable use of water be prevented and water resources be put to beneficial use to the fullest extent possible. (Cal. Const., art. X, § 2; Wat. Code, § 100.) Before Ordinance No. 8.8 was adopted, Emergency Ordinance E imposed a groundwater extraction surcharge and considered all water applied by the grower without regard to water source.
We reject the argument that Fox Canyon lacked the statutory power to adopt Ordinance No. 8.8 or that the Fox Canyon Board of Directors acted in an arbitrary, capricious, or unreasonable manner in making river surface water use a factor in calculating groundwater extraction surcharges. PVCWD insists that river surface water use has nothing to do with groundwater management. That is for Fox Canyon to decide.
PVCWD asserts that Santa Clara River surface water is "supplemental water" and exempt, as a matter of law, from Fox Canyon's groundwater management program. Section 121-702 provides: "The availability of supplemental water to any operator shall not subject that operator to regulations more restrictive than those imposed on other operators." "Supplemental water" is defined as "surface water or groundwater imported from outside the watershed or watersheds of the groundwater basin or aquifer and flood waters that are conserved and saved within the watershed or watersheds which would otherwise have been lost or would not have reached the groundwater basin or aquifers." (§ 121-323, italics added.) Santa Clara River surface water is not imported water or "lost" water. United diverts the surface water to either recharge the Fox Canyon aquifers or pipes it to PVCWD's customers for irrigation.
Ordinance No. 8.8 makes no distinction between agricultural operators who use both groundwater and United water (i.e., blended water users) and agricultural operators using only groundwater. The rule is the same: agricultural operators may irrigate up to the 1.0 IAI threshold before a groundwater surcharge is imposed. Ordinance No. 8.8 does not subject PVCWD's customers to more restrictive regulations than those imposed on other agricultural operators. (§ 121-702.)
PVCWD contends that the Sustainable Groundwater Management Act (SGMA; Wat. Code, § 10720),
PVCWD contends that Ordinance No. 8.8 violates the equal protection clause of the California Constitution (Cal. Const., art. 1, § 7(a)) by subjecting agricultural operators who use river surface water (United water) to groundwater extraction surcharges but not imposing surcharges on similarly-situated farmers who use other types of surface water (i.e., non-United water). Two growers applying the same amount of water to identical crops could be the subject to different groundwater surcharges depending upon the source of water used.
To prevail on the equal protection claim PVCWD must show: (1) it is treated differently from similarly situated persons, (2) the difference in treatment is intentional, and (3) there is no rational basis for the difference in treatment. (Genesis Environmental Services v. San Joaquin Valley Unified Air Pollution Control Dist. (2003) 113 Cal.App.4th 597, 605.) With respect to the first prong, there is no evidence that similarly situated persons are treated differently. Ordinance No. 8.8 provides that agricultural operators may irrigate up to the IAI 1.0 threshold regardless of what water source is used. Surcharges are imposed only on groundwater extractions that contribute to excessive irrigation when the agricultural operator exceeds his or her annual efficiency allocation. The rule is the same for all agricultural operators except growers who irrigate with recycled water or desalinated water because those water sources are not used for groundwater recharge.
PVCWD makes no showing that the two classes of growers are similarly situated. Growers who use recycled water or imported water (i.e., supplemental water) are not depleting a water source that has been historically used to recharge Fox Canyon aquifers. Unless two similarly situated groups are defined by word or effect as members of a "suspect class" (such as race, national origin, gender, or illegitimacy, to name a few) or the law affects a fundamental right, a law will be upheld as long as there is any "`"rational relationship between the disparity of treatment and some legitimate . . . purpose,"'" even if the rational basis for that law was not articulated by the Legislature. (Johnson v. Department of Justice (2015) 60 Cal.4th 871, 881.)
On prong three of the equal protection analysis, PVCWD fails to show that Fox Canyon has no rational basis for the disparate treatment of growers based on the source of water used to irrigate. The administrative record indicates that the Santa Clara River is an important recharge source for groundwater basins and aquifers. Fox Canyon made United water part of the surcharge calculus to encourage the efficient use of an important groundwater recharge source. Ordinance No. 8.8 is rationally related to Fox Canyon's goal of conserving and enhancing groundwater resources with respect to the aquifers and the river surface water that recharges the aquifers.
PVCWD argues that Fox Canyon abused its discretion in finding that Ordinance No. 8.8 is categorically exempt from CEQA based on what are known as class 7 and 8 CEQA exemptions. "Those exemptions apply to actions taken to assure the maintenance, restoration, or enhancement of a natural resource or the environment. (CEQA Guidelines, §§ 15307, 15308, referred to as the class 7 and class 8 exemptions)." (Save Our Big Trees v. City of Santa Cruz (2015) 241 Cal.App.4th 694, 702.)
PVCWD argues that the class 7 and 8 exemptions do not apply unless Fox Canyon had the law-making power to adopt Ordinance No. 8.8. As discussed, Fox Canyon is authorized to protect and enhance groundwater resources (§ 121-311), and implement conjunctive water use management objectives to preserve the groundwater basins (§§ 121-502; 121-305.5). Fox Canyon's decision to factor river surface water use into the surcharge equation accomplishes the conjunctive use objective of preserving a natural resource. Fox Canyon has the statutory authority to adopt regulations that protect groundwater and groundwater recharge sources, the exercise of which protects the environment and satisfies CEQA Guideline section 15308.
When Emergency Ordinance E was adopted on April 11, 2014, Fox Canyon found it to be exempt from CEQA. PVCWD did not challenge that finding. Ordinance No. 8.8 was adopted nine months later to "clarif[y] the rules under the Annual Efficiency Allocation program while Emergency Ordinance E is in effect." (Ord. No. 8.8, SECTION FIVE.) Because Ordinance No. 8.8 does not change existing policy, there is no new environmental impact under CEQA. (Black Property Owners Assn v. City of Berkeley (1994) 22 Cal.App.4th 974, 986 [CEQA does not require environmental review where new ordinance restates existing law].)
The Fox Canyon Board of Directors also found that adoption of Ordinance No. 8.8 "is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines, sections 15307 and 15308 which exempt actions taken for the protection of natural resources and the environment. This Ordinance will help eliminate overdraft from the aquifer systems within the boundaries of the Agency." The trial court reasonably concluded that Ordinance No. 8.8 satisfies the CEQA "commonsense exemption" set forth in CEQA Guidelines section 15063, subdivision (a). (See Muzzy Ranch Co. v. Solano County Airport Land Use Com. (2007) 41 Cal.4th 372, 388.) The commonsense exemption applies where the project will enhance rather than degrade existing environmental conditions. (CREED-21 v. City of San Diego (2015) 234 Cal.App.4th 488, 512.)
PVCWD contends that the CEQA "unusual circumstances" exception trumps the class 7 or 8 categorical exemptions because Ordinance No. 8.8 will have a significant effect on the environment. (Cal. Code Regs., tit. 14 § 15300.2, subd. (c); Respect Life South San Francisco v. City of South San Francisco (2017) 15 Cal.App.5th 449, 455.) "The plain language of Guidelines section 15300.2, subdivision (c), requires that a potentially significant effect must be `due to unusual circumstances' for the exception to apply." (Berkeley Hillside Preservation v. City of Berkeley, supra, 60 Cal.4th at p. 1105.) Because it is a factual question for the lead agency, our review is limited to whether the agency's determination is supported by substantial evidence. (Id. at p. 1114; Walters v. City of Redondo Beach (2016) 1 Cal.App.5th 809, 822, fn. 5; Citizens for Environmental Responsibility v. State. ex rel. 14th Dist. Ag. Assn. (2015) 242 Cal.App.4th 555, 588 & fn. 24.) Here the evidence supports Fox Canyon's finding that Ordinance No. 8.8, as a temporary emergency measure, will help eliminate groundwater overdrafts.
Citing Dunn-Edwards Corp. v. Bay Area Air Quality Mgnt. Dist. (1992) 9 Cal.App.4th 644 (disapproved in Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 570, fn. 2), PVCWD speculates that groundwater surcharges will financially incentivize groundwater pumping. In Dunn-Edwards, the Court of Appeal overturned amendments to air district regulations designed to reduce the amount of volatile organic carbons in paint. The new regulations required the public to use lower quality paint products, which resulted in the need to use more paint and caused a net increase in VOC emissions. (Id. at pp. 657-658.) PVCWD argues that if it is cheaper to pump groundwater with extraction surcharges than it is to use river surface water, Ordinance No. 8.8 will have the unintended result of depleting groundwater basins and harm the environment.
Unlike Dunn-Edwards, there is no data, evidence, or expert testimony that Ordinance No. 8.8 will incentivize groundwater pumping or harm groundwater resources. PVCWD's counsel, John Mathews, appeared at a January 9, 2015 hearing on Ordinance No. 8.8 and testified that neither he nor Fox Canyon can show that the methodology (Approach D) used in Ordinance No. 8.8 to calculate the groundwater extraction surcharge will help or hurt the aquifer. Mathews said "[t]he best thing for Ventura County is to put that water [i.e., river surface water] in the [Oxnard] Forebay [Basin]." That is what Ordinance No. 8.8 does. Counsel tacitly admitted there was no evidence that Ordinance No. 8.8 would harm groundwater resources or cause a significant environmental impact.
PVCWD has the burden of showing the administrative record contains substantial evidence to support the fair argument that a significant environmental impact will occur. (Berkeley Hillside Preservation v. City of Berkeley, supra, 60 Cal.4th at p. 1105; Parker Shattuck Neighbors v. Berkeley City Council (2013) 222 Cal.App.4th 768, 777.) That evidence was not forthcoming, although there was testimony that the cost of water, no matter what the source, is expensive and will increase in cost.
PVCWD's arguments about the relative costs of pumping groundwater or using river surface water are speculative and fail to make a prima facie showing that a groundwater extraction surcharge will have a significant environmental effect. "[T]o establish the unusual circumstances exception, it is not enough for a challenger merely to provide substantial evidence that the project may have a significant effect on the environment. . . . On the other hand, evidence that the project will have a significant effect does tend to prove that some circumstances of the project is unusual. An agency presented with such evidence must determine, based on the entire record before it — including contrary evidence regarding significant environmental effects — whether there is an unusual circumstance that justifies removing the project from the exempt class." (Berkeley Hillside Preservation v. City of Berkeley, supra, 60 Cal.4th at p. 1105.)
Ordinance No. 8.8 creates an economic incentive to conserve water and is consistent with section 121-1102, subdivision (b): "[E]xtraction surcharges are intended to discourage the use of groundwater beyond the extraction allocation. They are not intended to generate tax revenues or proceeds from regulatory licenses, user charges, or user fees." In the words of Fox Canyon Board Chairperson Lynn Maulhardt, Fox Canyon is making "a policy decision; not a scientific decision. Not some $50 million study. We're making a policy decision based on, in my opinion, commonsense." Historic drought conditions and groundwater overdrafts have created "a perfect storm of problems that we're trying to work our way through."
The Fox Canyon Board of Directors reasonably concluded that Ordinance No. 8.8 would help reduce groundwater overdrafts, conserve and enhance groundwater resources with respect to the aquifers and the river surface water used to recharge ground basins, and not harm the environment.
PVCWD's remaining arguments has been considered and merit no further discussion. The judgment (order denying the petition for writ of mandate and complaint for declaratory and injunctive relief) is affirmed. Fox Canyon is awarded costs on appeal.
PERREN, J. and TANGEMAN, J., concurs.
