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California Supreme Court weighs In on the Evaluation of Future Water Supplies

Over the past several years, the fate of large-scale planned development projects in California has rested on the proven availability of water supplies. Due to state legislation referred to as S8 610/221 and a string of appellate cases decided under the California Environmental Quality Act (CEQA), developers and water agencies are now called upon to prove a reliable water supply for both proposed development projects and all future growth over a twenty­year period. Given that heightened legal scrutiny, one of the key unanswered questions is: under what circumstances can a developer rely on a future water supply?

The California Supreme Court decision in Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova (February 1, 2007) sheds some light on this issue. The proposed project (known as Sunrise Douglas) in that case entailed the development of 22,500 dwelling units on over 6,000 acres of rural open space in the newly fonned City of Rancho Cordova (in Sacramento County).

The short-term water supplies for the project were to be provided by a newly developed well field, to be built southwest of the development. For later phases of the project, the developer sought to rely on the Sacramento County Water Agency’s “Zone 40” project, which included groundwater and surface water that would eventually be available for the area.

The Supreme Court granted review to consider the claims brought under CEQA that the EIR failed to adequately identify and evaluate the project’s future water sources. The case was not brought under 58 610/221 because the EIR was prepared prior to the date of that statute. The Court held that while the ErR adequately informed decision­makers and the public of the impacts related to the near-term water supplies, it failed to disclose the impacts of providing the necessary supplies in the long-term.

The Court arrived at its holding by articulating certain principles derived from prior CEQA cases involving water supplies for development projects. Among those principles are:

  • To satisfy CEQA’s informational purposes, an EIR must present the decision-makers and the public with enough facts to allow them to evaluate the possible environ­mental effects associated with the February 2007 proposed water supply and, if significant, whether there are reasonable alternatives to that supply;
  • An EIR must assume that all phases of the project will eventually be built and will need water, and must analyze the impacts of providing that water to the entire proposed project;
  • The future water supplies identified and analyzed must bear a likelihood of actually proving available. An EIR does not have to demonstrate that the project has definitely assured water through signed, enforceable agreements: however, “speculative sources and unrealistic allocations” are clearly insufficient bases for decision­making under CEQA; and
  • If there is some uncertainty regarding the actual availability of the future water supply, CEQA still requires some discussion of replacement sources and alternatives to that future supply.

Applying these principles, the Court invalidated the EIR. The Court did hold that the EIR’s near-tenn supply analysis complied with CEQA, because there was substantial evidence of a “reasonable likelihood” that groundwater from the well field would be available to supply the project’s near-tenn needs.

Furthermore, the County did not improperly defer analysis of near-term supplies to future stages of the project and did not rely on demonstrably illusory supplies.

With regard to the long-term water supplies, however, the Court found the EIR deficient. According to the Court, the EIR failed to provide a “consistent and coherent description of the future demand for new water due to growth in Zone 40, or of the amount of new surface water that is potentially available to serve that growth.” In addition, the Court held the EIR failed to satisfy CEQA’s informational purposes. Because the EIR contained inconsistent figures for future supply and demand and there was no “plainly stated, coherent analysis of how the supply is to meet the demand,” the Court determined that it would be impossible for the decision-making body or the public to have a “road map to the information the EIR intends to convey.”

The decision, however, still leaves some open issues. For instance, it is unclear just how large of a study area must be analyzed to satisfy CEQA’s informational purpose. The chosen study area is relevant because that area is tied not only to the project’s overall water demands, but also to the demands of all other users of that water supply. But, as noted by the dissent, the area comprising the southern and eastern regions of Sacramento County is almost ten times as large as the project itself. Thus, how expansive does the analysis need to be in order to legally comply with CEQA? This question is yet to be resolved.

A second unanswered question is that, while the court did note that CEQA is triggered at the early stages of the process, it is unclear what additional information or greater specificity may be required for a Water Supply Assessment (WSA) prepared pursuant to SB 610.

Edward Casey and Tammy Jones are attorneys in the Los Angeles office of Weston, Benshoof. Rochefort, Rubalcava & MacCuish LLP, with a practice focused on land use and water resources. They can be reached at ecaseY@wbcounsel.com and tjones@wbcounsel.com, respectively.

Edward J. Casey
Tammy L. Jones