Marin Mun. Water Dist. v. Kg Land California Corp.

• Decision Date: 20 November 1991
• Docket Number: No. A050793,A050793
• Citation: 235 Cal.App.3d 1652,1 Cal.Rptr.2d 767
• Court: California Court of Appeals Court of Appeals
• Parties: MARIN MUNICIPAL WATER DISTRICT, Plaintiff and Appellant, v. KG LAND CALIFORNIA CORPORATION et al., Defendants and Respondents.

Page 767

1 Cal.Rptr.2d 767

235 Cal.App.3d 1652

MARIN MUNICIPAL WATER DISTRICT, Plaintiff and Appellant, v. KG LAND CALIFORNIA CORPORATION et al., Defendants and Respondents.

No. A050793.

Court of Appeal, First District, Division 3, California.

Nov. 20, 1991.

Rehearing Denied Dec. 20, 1991.

George A. Yuhas, Mary J. Novak, Orrick, Herrington & Sutcliffe, San Francisco, for plaintiff and appellant.

John M. Collette, Robert A. Schwartz, Kenneth J. Cohen, Collette & Erickson, Bruce J. Russell, Joshua R. Steinhauer, Kindel & Anderson, San Francisco, for defendants and respondents.

STRANKMAN, Associate Justice. ^*

The Marin Municipal Water District (the District) declared a water shortage emergency in its service area in 1989 and imposed a moratorium on new service connections, pending the development of new water supplies. Before imposing the moratorium, the District issued an environmental impact report (EIR) concluding that the proposed restriction would have no significant adverse environmental effects. Developers KG Land California Corporation (KG Land), Perini Land and Development Company (Perini) and others who opposed the moratorium challenged the EIR in the trial court, claiming among other arguments that it failed to analyze adequately the adverse environmental consequences of the moratorium or to consider several purportedly feasible alternatives. The trial court concluded that the report was invalid under the California Environmental Quality Act (CEQA) (Pub.Resources Code, § 21000 et seq.) ¹ The District has appealed; we reverse the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

The District is a public utility which provides water to approximately 167,000 people in a 147 square mile area of Marin County. The District's service area extends north along the east side of the county from the Golden Gate Bridge to and including part of Novato. Its primary water source is rainfall and runoff stored in seven reservoirs or lakes.

The District determined in late 1984 that it could prudently supply 35,000 acre-feet of water annually to its consumers. ² Thereafter, studies indicated that its growth projections were too low; in addition, per capita water consumption increased more than anticipated. In September 1988, the District began preparation of The demand for new connections also increased faster than anticipated. As of February 1989, only about 495 acre-feet remained uncommitted, and the District declared a water shortage emergency pursuant to Water Code sections 350 et seq. and 71640 et seq. It adopted an urgency ordinance temporarily prohibiting any new water service connections, to become effective upon its allocation of 34,900 acre-feet of water, and subject to certain limited exceptions. At the same time, the District continued work on the new Water Supply Master Plan.

a new Water Supply Master Plan to update growth projections and address alternative sources of water supply.

As of April 1989, only about 18 acre-feet remained uncommitted, and the District proposed a new ordinance prohibiting new water service connections for an extended indefinite period. A draft environmental impact report (DEIR) was prepared to evaluate the potential environmental effects of this moratorium and consider alternatives to its adoption.

Initially, the DEIR explained that despite the District's doubts whether the moratorium was a project within the meaning of CEQA, it had chosen to proceed with the EIR process and would consider the EIR before any decision on adoption of the moratorium. The DEIR concluded that the moratorium would have a beneficial effect on water supply by restricting additional demand in the District until new water supplies could be developed and would have no adverse environmental impact either on water supply or existing consumers. It then commented on the potential effect of the moratorium on economic conditions within the District's service area, not because those conditions would result in significant environmental effects, but "for informational purposes." As will be discussed in more detail later, the DEIR analyzed the possible impact of the moratorium on housing stock, housing affordability, employment, and public finance. It concluded, "[W]hile certain potentially adverse economic effects were identified, they were determined not to have an adverse effect on the physical environment."

The DEIR also discussed two alternatives to the moratorium: no project and mandatory conservation of 15 percent. As will be discussed, it rejected both and concluded that the moratorium would be environmentally superior and would have the least effect on the District's existing customers.

The District received numerous comments on the DEIR and held a public hearing; those comments and the District's written responses were incorporated into the final EIR. At its December 13, 1989, public meeting, the District certified the adequacy of the EIR and adopted the moratorium.

Perini, KG Land, and Joe and Haidy Shekou (the Shekous) filed petitions for writs of mandate and complaints for declaratory relief challenging the District's compliance with CEQA in certifying the EIR and adopting the moratorium; their actions were consolidated. After a hearing, the trial court concluded that the EIR was deficient in several respects, both substantive and procedural. Among the court's conclusions were that the EIR did not consider and analyze adequately the potentially significant adverse secondary environmental effects of the moratorium, an appropriate range of feasible alternatives to its adoption, and its inconsistencies with potentially affected local and regional plans. The court also concluded that the final EIR included significant new information requiring its recirculation before certification.

The court then ordered the District to void its certification of the EIR and either repeal the moratorium or prepare a new EIR; it also granted a limited injunction regarding enforcement of the moratorium. In effect the injunction required the District to provide up to 200 acre-feet of water (1) to those on the District's waiting list for new connections as of July 30, 1990, including Perini, and (2) to KG Land and the Shekous, who were apparently not then on the waiting list, provided that they otherwise The District appeals from the judgment. Respondents are KG Land and Perini; the District has settled its dispute with the Shekous, who are no longer parties to this appeal. We have issued a writ of supersedeas staying that portion of the order enjoining enforcement of the moratorium, pending our determination of the appeal.

complied with the District's generally applicable water service procedures.

DISCUSSION

A. Introduction

The Supreme Court has repeatedly observed that the Legislature intended CEQA to be interpreted to afford the fullest possible protection to the environment within the reasonable scope of the statutory language. (See, e.g., Laurel Heights Improvement Assn. v. Regents of University of California (1988) 47 Cal.3d 376, 390, 253 Cal.Rptr. 426, 764 P.2d 278; Friends of Mammoth v. Board of Supervisors (1972) 8 Cal.3d 247, 259, 104 Cal.Rptr. 761, 502 P.2d 1049.) The EIR has been described both as the heart of CEQA and as an environmental alarm bell, whose purpose is to inform the public and its responsible officials of the environmental consequences of their decisions before those decisions are made. (Citizens of Goleta Valley v. Board of Supervisors (1990) 52 Cal.3d 553, 564, 276 Cal.Rptr. 410, 801 P.2d 1161; County of Inyo v. Yorty (1973) 32 Cal.App.3d 795, 810, 108 Cal.Rptr. 377.)

Nevertheless, that court has also cautioned, "The wisdom of approving ... any ... project, a delicate task which requires a balancing of interests, is necessarily left to the sound discretion of the local officials and their constituents who are responsible for such decisions." (Citizens of Goleta Valley v. Board of Supervisors, supra, 52 Cal.3d at p. 576, 276 Cal.Rptr. 410, 801 P.2d 1161.) Therefore, a court's inquiry into agency actions under CEQA "shall extend only to whether there was a prejudicial abuse of discretion. Abuse of discretion is established if the agency has not proceeded in a manner required by law or if the determination or decision is not supported by substantial evidence." (§ 21168.5.) The reviewing court assesses only the sufficiency of an EIR as an informative document, not the correctness of its environmental conclusions; it may not set aside an agency's approval of an EIR on the ground that a different conclusion would have been equally or more reasonable. (Citizens of Goleta Valley, supra, at p. 564, 276 Cal.Rptr. 410, 801 P.2d 1161.) When applying the substantial evidence standard to the agency's determination, the reviewing court must resolve reasonable doubts in favor of the administrative finding and decision. (Laurel Heights Improvement Assn. v. Regents of University of California, supra, 47 Cal.3d at pp. 392-393, and fn. 5, 253 Cal.Rptr. 426, 764 P.2d 278.)

B. Secondary Consequences of the Proposed Moratorium

The trial court concluded that the EIR did not consider and evaluate adequately the possible secondary adverse environmental consequences of the moratorium, particularly those resulting from its effect on (1) the ability of cities in the District to meet their regional fair share of housing; (2) any regional jobs/housing imbalance; (3) regional growth and the development of vacant land in neighboring communities; and (4) the generation of fees for public services and on environmental services funded by these fees. The District contends that its analysis was sufficient, and we agree.

With certain limited exceptions, CEQA requires an EIR whenever a public agency proposes to approve or carry out a project that may have a significant effect on the environment. (§§ 21100, 21151; Guidelines, § 15002, subd. (f)(1).) ³ " 'Significant According to the Guidelines, both primary and...