City of Marina v. Board of Trustees of the California State University (2006), 39 Cal.4th 341  

http://caselaw.lp.findlaw.com/data2/californiastatecases/s117816.pdf

The Fort Ord Reuse Authority (FORA) challenged the EIR prepared by the Board of Trustees of the California State University (Trustees) for the expansion of the CSU Monterey Bay (CSUMB) on the basis that three of Trustees’s findings were dependent on incorrect legal assumptions.  Trustees' argument was essentially (1) Any payment by Trustees to FORA for the purpose of capital improvement in Fort Ord is an assessment, regardless of form; (2) public agencies are exempt from assessment except as permitted by the Legislature; and (3) the Legislature has permitted assessments only for the purposes set out in chapter 13.7 of the Government Code (§ 54999 et seq.).

The legislation enacting FORA allowed it to impose fees consistent with chapter 13.7, so Trustees concluded that as water, drainage and sewage were explicitly identified in the chapter, FORA was allowed to impose fees for those facilities, but as roads and fire protection were not identified, even a voluntary payment to mitigate those impacts would be unconstitutional, based on the logic in San Marcos Water Dist. v. San Marcos Unified School Dist. (1986).  Trustees made findings regarding roads and fire protection that: (1) improvements to roads and fire protection are the responsibility of FORA rather than of the Trustees; (2) mitigation is infeasible because the Trustees may not legally contribute funds toward these improvements; and (3) the planned expansion of CSUMB offers overriding benefits that outweigh any remaining unmitigated effects on the environment.  Trustees proposed to contribute fees for water supply, wastewater management, and drainage, in less amounts than FORA has identified, pursuant to chapter 13.7 of the Government Code (enacted by the Legislature in response to San Marcos) which authorizes a public utility providing a public utility service to a public educational agency to impose a capital facilities fee on the PEA “after agreement has been reached between the two agencies through negotiations entered into by both parties.” (Government Code Section 54999.3(b).) Regarding water, wastewater management and drainage, Trustees made findings that (1) the basewide infrastructure improvements proposed by FORA constitute the specific measures necessary to mitigate CSUMB’s effects to the level of insignificance, (2) the mitigation of CSUMB’s effects on drainage, water supply, and wastewater management are FORA’s responsibility, and (3) overriding circumstances justify certifying the EIR and approving the Master Plan despite any remaining unmitigated effects.

The findings FORA challenged are: (1) that the Trustees cannot feasibly mitigate CSUMB’s significant environmental effects, (2) that to mitigate CSUMB’s effects is not the Trustees’ responsibility, and (3) that overriding considerations justify certifying the EIR and approving the Master Plan despite the remaining unmitigated effects.  The Court found that FORA is correct and that Trustees abused their discretion (similar determination to Grossmont-Cuyamaca discussed below).  See Public Resources Code Section 21168.5 for a description of the abuse of discretion standard.

The Court stated: “An EIR that incorrectly disclaims the power and duty to mitigate identified environmental effects based on erroneous legal assumptions is not sufficient as an informative document.” 

Trustees effectively argued voluntary contributions to FORA to mitigate an impact are legally infeasible.  The Court first identified that the provision of the state constitution Trustees relied upon, Article XIII, Section 3(a), exempts state-owned properties from property taxation, was not applicable as FORA has not imposed a tax on Trustees.  The Court determined San Marcos is misinterpreted in this case, as it applies only to compulsory charges imposed by one public entity to another but says nothing about a “discretionary payment made by a public agency that voluntarily chooses that method of discharging its duty under CEQA to mitigate the environmental effects of its project.”

The Court then addressed whether mitigation was infeasible because Trustees may not lawfully contribute to FORA.  The Court found that Trustees were erroneous in determining that they could not mitigate through voluntary payments to FORA.  Noting that San Marcos does not apply to this issue either, as it addresses compulsory charges, the Court went on to find that nothing in Chapter 13.7 of the Government Code, CEQA or the FORA Act prevents Trustees from making voluntary mitigation measure, and that, as Lead Agency, Trustees have the power and duty to assess the adequacy of mitigation measures. 

The Court indicates that Trustees’ argument that they cannot guarantee that FORA will actually implement the proposed infrastructure improvements is not persuasive.  Trustees noted that their fair-share would only fund a portion of the financing needed for the regional improvements and that similar payments would need to be made by other jurisdictions, concluding that ultimate implementation of the improvement program is under the responsibility of FORA and cannot be controlled or assured by the University.  The Court stated: “The presently identified, unavoidable uncertainties affecting the funding and implementation of the infrastructure improvements FORA has proposed in its Reuse Plan do not render voluntary contributions to FORA by the Trustees infeasible as a method of mitigating CSUMB’s effects.”

The Court notes that both the CEQA Guidelines and judicial decisions a project’s portion of a cumulative environmental impact may be mitigated through contribution to a regional mitigation fund, and that fee-based mitigation programs for cumulative impacts, based on fair-share infrastructure contributions by individual projects, also constitute adequate mitigation measures under CEQA.

Referencing Save Our Peninsula Committee v. Monterey County Bd. of Supervisors, supra, 87 Cal.App.4th 99, 140 which found that a time-specific schedule was not necessary but only that there be a reasonable plan for mitigation, the Court concluded that there was no reason to doubt FORA would construct the necessary public capital facilities, citing FORA’s plans to implement the improvements, the powers given FORA to raise funds by the Legislature, and the mission identified for FORA in its enacting legislation.  Note: The background discussion in the decision identified that FORA prepared a capital improvement plan identifying public facilities that need construction or improvement and projecting future expenditures for that purpose through the year 2015.  FORA’s planning documents take the CSU plans into account and identify specific infrastructure improvements that would fully mitigate the expansion of CSUMB.  FORA adopted the assumption that CSUMB would pay a certain amount to cover its share of the infrastructure improvements.

The Court then addressed Trustees’ determination that FORA was responsible for the physical improvements.  Identifying that CEQA does not require an agency to implement identified mitigation measures if the agency finds that the measures “are within the responsibility and jurisdiction of another public agency and have been, or can and should be, adopted by that other agency.” (Pub. Resources Code, § 21081, subd. (a)(2)), the Court clarified that the FORA Act considered the costs of improvements would be borne by those who benefit from them. The Court stated :…if the Trustees cannot adequately mitigate or avoid CSUMB’s off-campus environmental effects by performing acts on the campus, then to pay a third party such as FORA to perform the necessary acts off campus may well represent a feasible alternative.” The Court identified that Trustees were at least obligated to request the necessary funds from the Legislature.

Regarding the final issue, whether overriding circumstances justify approving the project, the Court found that as Trustees’ determination of feasibility for the mitigation measures was incorrect, the statement of overriding considerations, which relied on the determinations, was faulty as well. 

A few things to note:  FORA had determined the infrastructure necessary to serve the Fort Ord reuse area over the next 15 years including expansion of CSUMB and had prepared cost estimates for the infrastructure.  This level of information/planning has not always occurred with agencies that would like to receive funding for improvements, so you may be able to differentiate the specific circumstances of your project from those of this case.

Abbott and Kinderman posted an article regarding this case.