By William W. Abbott & Janell M. Bogue Closely following on the heels of County of San Diego, the California Supreme Court decided City of Marina v. Board of Trustees of the California State University (2006) 39 Cal.4th 341, which also involved issues of the appropriateness of mitigation expenditures, this time by the California State University system. Here, the state university (CSU) assumed the legal position that it was not authorized to mitigate for offsite impacts, and on that basis, the Trustees rejected the feasibility of mitigation measures sought by a local city (Marina) and a base reuse authority (Fort Ord Reuse Authority or “FORA”). FORA, responsible for the redevelopment of Fort Ord, had statutory authority very similar to a city or county, including the authority to impose fees and assessments. FORA previously prepared a plan for the eventual development of the base, including the required infrastructure. FORA’s plan assumed that the CSU campus would be responsible for financing some of the required infrastructure, to the tune of about $20.5 million. In conjunction with the adoption of a master plan for CSU Monterey Bay, the Trustees certified an EIR. The master plan acknowledged that the eventual growth of the Monterey campus would lead to a population of approximately 25,000 students. The EIR identified five significant impacts which could not be mitigated to a less than significant level: water supply, drainage, wastewater management, traffic, and fire protection. With respect to roads and fire protection, no agreement had been reached between FORA and CSU and CSU had not committed any funds directly. CSU ultimately concluded that the mitigation responsibility was that of another responsible agency (FORA), and that it lacked legal authorization to expend money for these purposes. With regards to drainage, water supply, and wastewater management, CSU took the position that these matters were the responsibility of FORA, and that the improvements proposed by FORA would provide the necessary mitigation, assuming that the parties completed the statutory negotiations pursuant to Government Code section 54999 et seq. To justify the certification of the EIR and the adoption of the master plan, the CSU Trustees adopted a statement of overriding considerations, and FORA petitioned for review. Eight years later, the Supreme Court finally weighed in on the issues. First, the court considered the Trustees’ finding that they could not feasibly mitigate the environmental effects of the master plan campus expansion. The Trustees claimed that they were prohibited from contributing funds to FORA as mitigation and relied on San Marcos Water District v. San Marcos Unified School District (1986) 42 Cal.3d 154 in support of their assertion. The court disagreed, and held that while San Marcos addressed compulsory assessments imposed on public entities, voluntary payments were not discussed in that case. The court said, “An assessment connotes, at the very least, a compulsory charge imposed by the government on real property…FORA has imposed no charge on the Trustees, let alone a compulsory one.” CEQA requires avoidance or mitigation, if feasible, of significant environmental effects and voluntary payments to FORA may be a feasible way to mitigate those effects. A payment made for purposes of mitigation, is not compulsory or an assessment merely because it is a feasible method of mitigation under CEQA. The court reiterated the duty to mitigate and said,

“…if campus expansion requires that roads or sewers be improved, the Trustees may do the work themselves on campus, but they have no authority to build roads or sewers off campus on land that belongs to others. Yet the Trustees are not thereby excused from the duty to mitigate or avoid CSUMB’s off campus effects on traffic or wastewater management, because CEQA requires a public agency to mitigate or avoid its projects’ significant effects not just on the agency’s own property but on the environment.”

The court also held that there was no prohibition against CSU making voluntary payments to FORA, notwithstanding the lack of specific legal authorization by the Legislature. After San Marcos, the Legislature enacted Government Code section 54999 et seq., which authorizes public utilities to charge public-entity customers a fair share of capital costs. Though this statute did not literally apply because FORA had not imposed an assessment or capital facilities fee, the court held that a negotiated agreement between the Trustees and FORA for mitigation of significant effects resulting from the campus expansion would likely satisfy CEQA requirements. Also, the fact that the legislature had spoken to three of the five issues in section 54999 (drainage, water supply and wastewater), did not operate as a prohibition against voluntary payments for the remaining matters (roads and fire protection). The court said, “We discern…no evidence of intent to bar the Trustees from voluntarily contributing, as a way of meeting their CEQA obligations, their fair share of the cost of improvements to roads and fire protection necessitated by CSUMB’s expansion.” CSU also argued that mitigation would not be feasible, as there was no assurance that the fees would be used to provide the required mitigation. Acknowledging that there might be some uncertainty as to the success of long term mitigation, the court found that this was not a basis to reject its own ability to make a voluntary payment. The Supreme Court then favorably cited Anderson First and Save our Peninsula for the position that payment of fair share impact fees can constitute adequate CEQA mitigation for cumulative impacts (these cases are profiled in previous articles on Anderson First and impact fee programs). Though the court emphasized that that the payment of fees without a showing that mitigation would actually occur is inadequate for CEQA purposes, it found that here there was no reason to believe that FORA would not meet its obligation. Save our Peninsula was used to illustrate the notion that there need only be a “reasonable plan” for mitigation, and FORA’s plan met that requirement. Undaunted, the Trustees also argued that mitigation was the sole responsibility of FORA and that the CSU did not have the responsibility to mitigate environmental effects under Public Resources Code section 21081 (a)(2). However, the court drew a careful distinction. While true that FORA had the legal authority to construct the offsite improvements, this did not mean that CSU lacked the authority to make a supporting financial contribution. In other words, the impact areas of offsite mitigation were not exclusively the responsibility of FORA. It is true that the Trustees cannot enter the land of another to make improvements, and the court pointed to Public Resources Code section 21004, which says that “in mitigating or avoiding a significant effect of a project on the environment, a public agency may exercise only those express or implied powers provided by law…” But the court also highlighted the fact that CEQA does not limit that agency’s obligation to mitigate those significant effects. Payment to FORA to mitigate would be a feasible alternative. The final issue pertained to the statement of overriding considerations. The statement adopted by the Trustees was framed, of course, by the earlier determination of whether or not it feasible to mitigate certain impacts. As the Trustees made those determinations incorrectly, the court held that the statement of overriding considerations was also flawed. After San Diego and Marina, perhaps California colleges need a set of Cliffs Notes for CEQA. William W. Abbott is a partner and Janell M. Bogue is a law clerk with Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, environmental and planning issues contact Abbott & Kindermann at (916) 456-9595. The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.