City of Hesperia v. Lake Arrowhead Cmty. Servs. Dist.

• Decision Date: 19 July 2019
• Docket Number: D075100
• Citation: 250 Cal.Rptr.3d 82,37 Cal.App.5th 734
• Court: California Court of Appeals Court of Appeals
• Parties: CITY OF HESPERIA, Plaintiff and Respondent, v. LAKE ARROWHEAD COMMUNITY SERVICES DISTRICT et al., Defendants and Appellants.

37 Cal.App.5th 734

250 Cal.Rptr.3d 82

CITY OF HESPERIA, Plaintiff and Respondent,

v.LAKE ARROWHEAD COMMUNITY SERVICES DISTRICT et al., Defendants and Appellants.

D075100

Court of Appeal, Fourth District, Division 1, California.

Filed July 19, 2019

Best Best & Krieger, Howard B. Golds, Riverside, and Lindsay D. Puckett, San Diego, for Defendants and Appellants.

Aleshire & Wynder, Eric L. Dunn, June S. Ailin, Los Angeles, and Nicholas P. Dwyer, El Segundo, for Plaintiff and Respondent.

IRION, J.

Over the years since at least 1959, the Legislature has attempted to achieve a balance between the state's interest in allowing local agencies to produce, generate, store, and transmit water or electrical energy and the cites' and counties' control over local building and zoning. This appeal requires the court to consider whether a solar energy project proposed by a local agency, the Lake Arrowhead Community Services District (District), is exempt from—or whether the District must comply with—the zoning ordinances of the city in which the project is to be developed, the City of Hesperia (City).

Our analysis begins with the statutory requirement that, for purposes of a proposed solar energy project, a local agency must comply with the zoning ordinances of the city and county in which the project's facilities are to be constructed or located. ( Gov. Code, § 53091, subd. (a) ; further undesignated statutory references are to the Government Code.) Then, as potentially applicable here, section 53091, subdivision (e) ( § 53091(e) ), and section 53096, subdivision (a) (§ 53096(a)), each provides the agency with an exemption for the location and construction of certain types of facilities. Section 53091(e) provides an absolute exemption for "the location or construction of facilities ... for the production or generation of electrical energy"—unless the facilities are "for the storage or transmission of electrical energy," in which event the zoning ordinances apply. Section 53096(a) provides a qualified exemption for an agency's proposed use upon, first, a showing that the development is for facilities "related to storage or transmission of water or electrical energy" and, second, a resolution by four-fifths of the agency's members that "there is no feasible alternative to [the agency's] proposal."

In the present case, the District adopted a resolution that its proposed solar energy project was both (1) absolutely exempt from the City's zoning ordinances under section 53091(e) and (2) qualifiedly exempt under section 53096(a), following the requisite determination that there was no feasible alternative to the proposed location of the project. The City successfully challenged the resolution in the underlying superior court proceedings, where the court issued a judgment in favor of the City and a related writ of mandate directing that the District and its board comply with the City's zoning ordinance prior to implementing the project.

We affirm. As we explain, because the District's proposed project includes the transmission of electrical energy, the exemption contained in section 53091(e) does not apply to the project; and because the administrative record does not contain substantial evidence to support the District's board's finding that there is no feasible alternative to the proposed location of the project, the District prejudicially abused its discretion in determining that the exemption contained in section 53096(a) applied to the project.

I. FACTUAL AND PROCEDURAL BACKGROUND¹

The dispute in this matter is between the District, which is attempting to develop a solar energy project on property it owns within the City's limits, and the City, which is attempting to enforce its zoning regulations.

A. Introduction

The District is a community services district, established in 1978 pursuant to section 61000 et seq. Although community services districts may be authorized to provide various governmental services (e.g., water, trash, street lighting, fire protection, parks and recreation, etc. (§ 61100)), the District is authorized only to provide water and wastewater treatment services within its boundaries, which are sometimes referred to as the Lake Arrowhead community.² A September 2014 report from the United States Department of the Interior indicates that the District served approximately 8,000 water customers and 10,500 wastewater customers in the Lake Arrowhead community.

The District owns and uses portions of a 350-acre area known as Hesperia Farms to discharge and percolate treated effluent from its water reclamation facilities in Lake Arrowhead into the Mojave River groundwater basin. The proposed solar energy project, which we describe in more detail at part I.B., post , is to be located on Arrowhead Lake Road in the far eastern portion of the City (Project Site), which consists of five to six acres of Hesperia Farms not being used for wastewater operations.

At all times, the Project Site has been located within an area the City has zoned as "Rural Residential" and has designated as "Rural Residential 0-0.4 units per acre" under the City's general plan. Section 16.16.063 of the City's Municipal Code (HMC) deals generally with alternative energy technology standards, and subsection (B) deals expressly with "solar farms";³ and the parties agree that the District's proposed project qualifies as a solar farm for purposes of this ordinance. HMC section 16.16.063(B) provides in relevant part: "Solar farms shall only be allowed on nonresidential and nonagricultural designated properties with approval of a conditional use permit by the planning commission. Solar farms shall not be permitted within six hundred sixty (660) feet of a railway spur, any interstate, highway, or major arterial, arterial, or secondary arterial roadway; or any agricultural or residentially designated property." (< https://library.municode.com/ca/hesperia/codes/code_of_ordinances/237774?nodeId=TIT16DECO_CH16.16LAUSDE_ARTIIIADUS_16.16.063ALENTEST> [as of July 19, 2019].)

B. The District's Hesperia Farms Solar Photovoltaic Project & the City's Objections

In January 2014, the District received an analysis from an outside engineering consultant regarding the potential development of solar power at its Hesperia Farms site (the Solar Project). In June 2014, the District's board of directors (Board) created a Solar Power Alternatives Ad Hoc Committee which then considered presentations from three solar power vendors for the Solar Project.

By late May of 2015, the City provided the District with comments to an Initial Study and Mitigated Negative Declaration for the Solar Project (initial mitigated negative declaration) that the District prepared and circulated pursuant to the California Environmental Quality Act (CEQA). According to the City, the Solar Project was "a 0.96 megawatt solar facility on five to six acres within the City" with "a total of 2,160 solar panels" on a site that "will continue to be used for growing forage crops and disposal of treated effluent that is generate by wastewater treatment plants in Lake Arrowhead." More specifically, the City commented that the initial mitigated negative declaration both "requires a general plan amendment and zone change to be [filed] with the City" and "does not address how the project will avoid being within 660 feet from the property to the south, which is agriculturally designated," in violation of HMC section 16.16.063(B) (which precludes solar farms within 660 feet of agriculturally designated property).

In August 2015, the District entered into a generator interconnection agreement with Southern California Edison Company (Edison), whereby the District's Solar Project would produce electricity for use by Edison through Edison's electrical grid distribution system in exchange for bill credits that Edison would apply to the District's ongoing obligations to Edison for energy use at any location in the District.⁴ To this end, in October 2015, the Board passed a resolution that authorized and approved the award of an energy services agreement to SunPower Corporation, Systems (SunPower), subject to conditions not relevant to this appeal.⁵ Pursuant to this resolution, in November 2015, the District and SunPower entered into a formal "Engineering, Procurement and Construction Agreement," according to which SunPower agreed to design, engineer, construct, and install a 939.6 kW-dc single-axis tracking solar photovoltaic generation system at the Project Site.

Following consideration of the comments from the City (described ante ) and others in response to the May 2015 initial mitigated negative declaration, the District gave notice of "a public hearing at which the Board may make findings pursuant to Section 53096 of the Government Code that there is no feasible alternative to the proposed location of the solar project at the Hesperia Farm Solar Photovoltaic Project Site and that, by four-fifths vote of the Board, the City of Hesperia's zoning ordinance is, therefore, rendered inapplicable."⁶ The City responded to the notice, repeating its original objections—namely, that the Solar Project required an amendment to the City's general plan and a change in location to avoid a violation of HMC § 16.16.063(B)—and setting forth its position in opposition to the District's potential actions to render the City's local land use regulations inapplicable to the Solar Project.

At the District's December 15, 2015 meeting, the Board adopted resolution No. 2015-14, which rendered the City's zoning ordinances inapplicable to the District's Solar Project. In part, this resolution provides as follows:

"2. The Board finds and determines that the [Solar] Project constitutes facilities for the generation of electrical energy, and therefore meets the criteria for exemption from ... City of Hesperia zoning ordinances under Government Code section 53091, subdivision (e).

"3. The Board finds and determines that for over a year the District's Solar

...