Court Says CEQA Review Not Required For Interim CVP Water Delivery Contracts

By Lars-Eric Hedberg  

July 8 — Interim renewal contracts that call for the Bureau of Reclamation to provide Central Valley Project water to California water districts are exempt from environmental review under the California Environmental Quality Act, a state appeals court ruled.

In a July 3 opinion, Justice Stephen Kane of the California Court of Appeal, Fifth Appellate District, affirmed the superior court's ruling, which denied petitions by the North Coast Rivers Alliance and other groups for judicial review.

The court of appeal concluded “that the matters contemplated in the interim renewal contracts were exempt from CEQA, including under the statutory exemption for ongoing pre-CEQA project,” and, it added, under the “categorical exemption for the continued operation of existing facilities at the same level of use.”

At issue was whether six interim renewal contracts entered into by the parties in 2012 were, as Westlands Water District and its related distribution districts found, exempt from the environmental review under CEQA.

Interim CVP Contracts Issued

The bureau and Westlands originally entered into a water delivery service contract in 1963. A 1986 stipulated court judgment set the total delivery at 1.15 million acre-feet of water per year. This agreement expired in 2007, at which time the parties anticipated that a long-term renewal of their water service contract would be for the same amount of water, according to the court.

The federal 1992 Central Valley Project Improvement Act directs the bureau to enter into a three-year contract and successive two-year interim contracts with the water districts until it completes a programmatic environmental impact statement on the possible effects of implementing the law, including the impacts of renewing the existing long-term water service contracts.

The parties can't enter into a new, 25-year renewal contract until the bureau completes its environmental review.

According to the court, the 2012 interim renewal contract also calls for 1.15 million acre-feet of water per year.

The water districts approved the individual renewal contracts, concluding that they didn't require CEQA review because they involved identical terms as the prior water service contracts, didn't expand service and didn't require the construction of new facilities.

Trial Court Rejects Petition

The alliance filed a CEQA lawsuit, asking the trial court to set aside the approvals. It argued that no exemption was applicable and diversions of water under the contracts would affect water flows and water quality in the Sacramento-San Joaquin River Delta, harming certain fish species.

The Superior Court of Fresno County denied the petition for review, agreeing with the water districts' that exemption is warranted (N. Coast Rivers Alliance v. Westlands Water Dist., Cal. Super. Ct. No. 12CECG00237, 4/16/13).

Although the court of appeal noted that the alliance's appeal is moot because the contracts at issue expired in February 2014, it exercised its discretion “to resolve certain key issues that are likely to recur relating to Water Districts' findings of exemption from CEQA” and the alliance's challenges.

The court of appeal first ruled that the water districts did not establish that the rate exemption, which states that CEQA does not apply to the establishment, modification or approval of rates or other charges by public agencies, applies. The court reasoned that the record does not show that the 2012 interim contracts and approvals were rate-setting actions.

Exemptions Applied

It did, however, rule that the exemptions for pre-CEQA ongoing projects and existing projects apply to the interim contracts.

As to pre-CEQA ongoing projects, the court of appeal concluded that substantial evidence supports a finding that under the 2012 interim contracts, project “water would continue to be delivered within the parameters of the original pre-CEQA project for an additional two years, using the same facilities that were approved pre-CEQA.”

The original contracts were entered into before the enactment of CEQA in 1970.

The court of appeal also ruled that the categorical exemption for the continued use of existing facilities at the same level of use applies. Specifically, it found that the interim contracts wouldn't change the existing facilities used to receive and deliver project water and operation of those facilities.

Moreover, the amounts of water were the quantities specified in the chain of prior contracts, the terms of which were expressly continued without change.

Circumstances, Effect Seen Not Applying

Lastly, it found that the unusual circumstances, significant effect on the environment and cumulative impact of successive projects exceptions to the exemption don't apply to the interim contracts.

The Law Offices of Stephan C. Volker represented the alliance and other groups.

The Pioneer Law Group, Kronick, Moskovitz, Tiedemann & Girard and Westlands Water District's legal department represented the district.

To contact the reporter on this story: Lars-Eric Hedberg in Washington at lhedberg@bna.com

To contact the editor responsible for this story: Greg Henderson at ghenderson@bna.com