No sooner had the fast-growing San Joaquin County city of Tracy settled a lawsuit and agreed to set up a joint powers authority on traffic issues than it was hit with a second lawsuit challenging its water supply and other facets of another huge development. In December, Tracy, Alameda County, the nearby city of Livermore, and the Sierra Club announced a settlement to a lawsuit brought over traffic issues raised by the city's approval of the 5,000-unit Tracy Hills project. Under the settlement, the JPA will be set up along with a developers fee of $1,500 per unit to pay for traffic improvements in Tracy and in nearby Alameda County. At the same time, the Tracy City Council approved another development, called South Schulte, which is expected to have about 6,000 homes. The developer of the project agreed to the same traffic mitigation fees. But the Sierra Club then filed suit on January 19 claiming that the city didn't have adequate water supplies or wastewater treatment for the new development. Eric Parfrey, a Sierra Club member and environmental planner who lives in Stockton, said the Sierra Club also had water concerns involving Tracy Hills, but settled the case because the traffic fee solution was so attractive. A separate case over the water supply for Tracy Hills is still pending. That lawsuit was brought by the County of Fresno because a water district there is supposed to supply the Tracy Hills water. A summary judgment motion on the Fresno County case was set for a late January hearing in Sacramento County Superior Court. "It's unclear how much staying power they're going to have," Parfrey said. "They wanted the Sierra Club not to settle on Tracy Hills." Parfrey said the water supply is important because the Tracy City Council has approved 20,000 new units of housing. Current plans are for the city to grow from a population of 48,000 to 160,000 in the next thirty years. Housing prices are low by Bay Area standards. Water supply "is really the Achilles heel for the ambitious growth of Tracy," he said. The U.S. Bureau of Reclamation warned the city in May 1998 that new developments could not be guaranteed a water source from the Delta during drought years. Tracy is about 70 miles from San Jose, and as Silicon Valley's housing and rental market has heated up, many workers there have moved to San Joaquin County. Commutes are as long as two or three hours each way. Most commuters drive on Interstate 580, which runs through neighboring Alameda County and the city of Livermore. Some are also beginning to commute via a new train service that began in late 1998. Alameda County, which has also seen significant growth of office parks in the Pleasanton area, has seen thousands of new vehicles on Interstate 580. Tracy officials argue that they're addressing a jobs-housing imbalance caused by the explosion of jobs in some Bay Area counties. Steven Meyers, Tracy's attorney in the Tracy Hills lawsuit, said that the JPA will study regional transit problems. At a later date, San Joaquin County may also join the JPA. Lakeside Tracy Associates, developers of Tracy Hills, will pay $174,000 for the study. Parfrey praised the JPA. "As a planner I loved it...a regional planning solution was what was called for," he said. The $1,500 per residence traffic fee is expected to generate $7.5 million. One-third of the money is slated for Alameda County projects, and the rest is slated for traffic projects in the Tracy area. Construction of the Tracy Hills project is slated to begin in a year. Meyers said the traffic fee could be placed on other developments when data is developed on their traffic impacts. But under state law, the settlement agreement couldn't arbitrarily set a fee for future developments, he said. If the other proposed units in Tracy adopt the traffic fee, another $22.5 million will be available for traffic improvements. The Tracy Hills settlement also contains a number of trip reduction elements. The developer of the project can seek a reduction in fees for providing such things as land for park and ride facilities, shuttles to transit lines, carpool/vanpool subsidies, and telecommuting programs. Under the settlement, the governmental parties are to "consider regional implications for major development projects" and "to recognize those regional environmental impacts that extend beyond jurisdictional boundaries." Parfrey noted that job growth in Santa Clara County, home of Silicon Valley, slowed last year. Tracy may be approving more units than the market needs, he said. The South Schulte lawsuit by the Sierra Club that the city's EIR failed to adequately analyze or mitigate a number of impacts including added traffic, storm drainage, impacts of leapfrog development, air quality, water supply and wastewater treatment and disposal. The developer of the South Schulte project includes Samir Kawar, who was part of a development group that tried unsuccessfully to develop the 5,200-unit Tassajara Valley project in Contra Costa County. In 1997, Kawar was identified by the San Francisco Chronicle as a Jordanian parliament member and former minister of water and transportation in that country. The application for Tassajara Valley was later withdrawn after widespread public opposition. The state's Fair Political Practices Commission fined Fakhry Kawar, an American citizen who manages his brother's properties, $22,000 for laundering $7,700 in campaign contributions to five Contra Costa supervisor candidates in 1992, according to the paper. Contacts: Steven Meyers, attorney for Tracy, Meyers, Nave, Riback, Silver & Wilson (510) 351-4300. Eric Parfrey, Sierra Club member, planner, (510) 420-8686 The case: The Sierra Club v. City of Tracy, case no. CV006772.