The water supply analysis for one of the largest housing developments ever approved in the Central Valley has been rejected by the state Supreme Court. The court faulted the water study in the environmental impact report for the 20,000-unit Sunrise-Douglas community plan outside Sacramento because the study did not adequately describe long-term water sources and the impacts of using those sources.

"While the EIR identifies the intended water sources in general terms, it does not clearly and coherently explain, using material properly stated or incorporated in the EIR, how the long-term demand is likely to be met with those sources, the environmental impacts of exploiting those sources, and how those impacts are to be mitigated," the state's highest court ruled.

The court also rejected the EIR's analysis of the impacts of groundwater pumping on the Cosumnes River, which provides critical habitat for federally protected steelhead trout and fall-run Chinook salmon.

Sacramento County approved the community plan for 6,000 acres of pastureland south of Highway 50 in 2002 (see CP&DR Local Watch, August 2002). The plan calls for approximately 20,000 housing units and nearly 500 acres of commercial and office development. At the same time, the county also approved the 10,000-unit Sunridge specific plan covering nearly half of the community plan site. The property lies within the City of Rancho Cordova, which incorporated a few months after the county approved the plans and zoning. The city has been implementing the plans. Angelo Tsakapoulos's AKT Development is the primary developer.

Residents of the area and environmentalists sued the county (the city has since become the defendant) over the EIR for the plans. The lawsuit centered on the water supply, as local residents feared the impacts of large-scale groundwater pumping. Essentially, the project called for using a well field about four miles south of the plan area for short-term supplies. Long-term, the project would be supplied by the wells and Sacramento County Water Agency's new diversion of Sacramento River water.

A Sacramento County superior court judge ruled against the project opponents. In an unusually terse opinion, the Third District Court of Appeal concluded the opponents were guilty of "misstatements and omissions" and rejected the opponents' contentions (see CP&DR Legal Digest, April 2005, March 2005). But in a 6-1 decision, the state Supreme Court found it was the county — not the opposition — that was less than forthcoming.

"The principal disputed issue," Supreme Court Justice Kathryn Mickle Werdegar wrote for the majority, "is how firmly future water supplies for a proposed project must be identified or, to put the question in reverse, what level of uncertainty regarding the availability of water supplies can be tolerated in an EIR for a land use plan."

Justice Werdegar laid out the evolution of case law at the appellate court level. The first case was Santiago County Water Dist. v. County of Orange, (1981) 118 Cal.App.3d 818, in which the court rejected an EIR for a mining project because the EIR did not address the impacts of supplying the mine with up to 15,000 gallons of water per day. The next case in line was the landmark Diablo Grande decision, Stanislaus Natural Heritage Project v. County of Stanislaus, (1996) 48 Cal.App.4th 182. In that case, the court threw out an EIR for the 5,000-unit Diablo Grande project that listed possible long-term water supplies but deferred analysis of the water acquisitions until later phases of project development (see CP&DR Legal Digest, September 1996).

The next case was Napa Citizens for Honest Government v. Napa County Bd. of Supervisors, (2001) Cal.App.4th 342, in which the court disapproved an EIR that did not disclose possible alternative water sources and the impacts of using them (see CP&DR Legal Digest, September 2001). Finally, in Santa Clarita Organization for Planning the Environment v. County of Los Angeles, (2003) 106 Cal.App.4th 715, the court rejected an EIR that relied on "paper water" from the over-subscribed State Water Project (see CP&DR Legal Digest, April 2003).

While these decisions provide no definitive standard, according to state Supreme Court, they provide four principles:

• The California Environmental Quality Act (CEQA) is not satisfied unless decision-makers are presented with sufficient facts to evaluate how water will be supplied to a project.

• An EIR for a project to be built over a number of years cannot be limited to water supply for the first few years.

• Future water supplies must "bear a likelihood of actually proving available.

• When water sources are uncertain, there must be a discussion of possible replacement sources or alternatives, and the impacts of those contingencies. It is not enough to say that development will not proceed if anticipated water fails to materialize.

The court also discussed legislation of recent vintage. In 1995, lawmakers approved SB 901 (Costa), requiring cities and counties considering a large development proposal to obtain a "water supply assessment" from the appropriate water supplier. Six years later, the Legislature approved two more bills: SB 221 (Kuehl) requires a city or county considering a residential subdivision of at least 500 units to obtain written verification that adequate water is available for the project and other planned uses for 20 years. Meanwhile, SB 610 (Costa) attempts to close loopholes in SB 901 and emphasizes the importance of 20-year urban water management plans (see CP&DR, October 2001, October 1995).

After laying out this background, the court then considered the specifics of the Rancho Cordova project. The community and specific plans contemplate the use of 5,000 to 10,000 acre-feet of water from the well field during the near-term. (These wells are serving the 1,800 houses built since project approval.) Opponents contended the EIR did not adequately describe competing uses for this groundwater, but the court was satisfied with this portion of the environmental study.

Long-term supply, however, was a different story. According to the court, the EIR discussed long-term needs — based on the county general plan — within the county water agency's "Zone 40." This zone encompasses much of southern Sacramento County, including the project area. The EIR also addressed water sources and the Sacramento Water Forum, a collection of agencies and stakeholders that adopted a plan for competing American River water uses. These estimates of demand and supply, though, were not consistent throughout the EIR, the court noted, and it appeared that a supply gap for Zone 40 remained.

"The general answer given in the [Final] EIR, and echoed by real parties and Rancho Cordova, is that the new surface water supplies are to be used conjunctively with groundwater supplies. But this explanation is vague and unquantified," Werdegar wrote. "How much groundwater, existing and new, will be used with how much new surface water? In what combinations will these sources be used during wet and dry years, respectively? No such description of planned future water use appears in the FEIR."

The EIR appeared to tier off of a future analysis of what was at the time a pending water agency plan for Zone 40. But an EIR may not tier of off a document that doesn't exist. The Rancho Cordova project EIR, the court ruled, could have tiered off of an earlier analysis for the Water Forum proposal. However, the EIR's relationship to the Water Forum proposal was unclear, even though the EIR included a discussion of impacts and mitigations in the Water Forum EIR.

"The reader attempting to understand the county's plan for providing water to the entire Sunrise Douglas development is left to rely on inference and speculation," Werdegar wrote.

Developers pointed to a condition of project approval that prohibits approval of entitlements if water is not available. But the court dismissed the argument and cited Stanislaus Natural Heritage: "‘It must be borne in mind that the EIR must address the project and assumes the project will be built.'"

As for impacts of groundwater pumping on the Cosumnes River, the court found that the EIR's brief dismissal of concerns expressed by environmentalists and wildlife agencies was not supported by substantial evidence.

In a dissenting opinion, Justice Marvin Baxter said the majority was imposing requirements beyond those contained in CEQA or the Water Code. "Under the majority's new rule … once a city or county approves a general plan, it could not approve a project in furtherance of that plan unless or until it had secured water sources for build out of the entire general plan. Northing in CEQA requires such a result," Baxter wrote.

To this, Werdegar responded, "[L]ong-term local water planning is not a burden that must be taken up anew, for CEQA purposes, each time a development is proposed; rather, cities and counties may rely on existing urban water management plan's future demand accounting."

The Case:
Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova, No. S132972, 07 C.D.O.S. 1131, 2007 DJDAR 1453. Filed February 1, 2007.

The Lawyers:
For Vineyard Area Citizens: Stephan Volker, (510) 496-0600.
For the city: Julia Bond, Meyers, Riback, Silver & Wilson, (510) 808-2000.
For Sunrise Douglas Property Owners Association: James Moose, Remy, Thomas, Moose & Manley, (916) 443-2745.