The state Supreme Court has rejected California State University trustees’ contention that the university does not have to mitigate off-site traffic and fire safety impacts from expansion of the CSU Monterey Bay campus.

A divided appellate court panel in 2003 had accepted the CSU Board of Trustees’ argument that the state constitution prohibits the university from paying the Fort Ord Reuse Authority (FORA) for off-site road and fire safety improvements related to campus expansion. The state Supreme Court unanimously overturned the appellate court and threw out the CSU Monterey Bay campus master plan and environmental impact report.

“The plain language of the California Constitution does not support the trustees’ position that voluntary mitigation payments are impermissible,” Justice Kathryn Werdegar wrote for the court.

The decision appears to provide a significant victory for cities and counties that are home to public universities and other large state institutions.

“We argued that the university couldn’t simply point to another agency and say, ‘We know we have impacts here but they are your total responsibility,’ without even trying to enter into any sort of agreement,” said Sheri Damon, an attorney who has represented FORA throughout the eight years of litigation. The state Supreme Court took a broad view of a state agency’s obligations under the California Environmental Quality Act (CEQA), she said.

The court ruled that although FORA may not assess fees on CSU, implementation of FORA’s infrastructure plan constitutes feasible mitigation for the impacts of university expansion. Thus, the court ruled, CSU should negotiate with FORA regarding the university’s contribution toward infrastructure plan improvements.

Clara Potes-Fellow, a CSU spokeswoman, said the decision clearly will have one impact.
“It definitely will increase the cost to the state to fund university construction projects,” Potes-Fellow said. “We will know in time if the [increased] cost has the impact of slowing down construction.”

Local government officials were closely watching the case and had provided amicus briefs asking the state high court to overturn the appellate court decision. In San Diego, the city, a neighborhood group and a hospital have sued over San Diego State University expansion plans because of impacts on roads and public safety. The Supreme Court decision appears to shoot down San Diego State’s argument that the school is not responsible for offsetting the impacts.

Since the Army closed Fort Ord in 1994, the university has emerged as the largest user of the 27,000-acre base in the hills northeast of Monterey. The university opened in 1995 and, in 1998, trustees adopted a master plan calling for eventual growth to 25,000 students on the 1,370-acre campus. More than 10,000 students, faculty, staff and household members would live on campus.

The City of Marina and FORA filed a CEQA lawsuit arguing the trustees failed to identify and adopt feasible mitigation measures, improperly disclaimed responsibility for offsetting environmental effects, and improperly relied on a statement of overriding considerations to justify approval of the EIR and master plan. At issue was the mitigation of traffic and fire protection impacts. Trustees said they could not fully mitigate those impacts because doing so would require FORA to implement an infrastructure plan the Reuse Authority adopted in 1997. And, in fact, FORA had included CSU growth in the long-range base reuse plan and had assumed CSU would pay $1.139 million annually for 18 years to fund its share of infrastructure improvements. But CSU argued that it was precluded from paying.

Monterey County Superior Court Judge Richard Silver ruled against the university, finding that CEQA requires the university, like any developer, to contribute to a fund for mitigating cumulative impacts. A divided three-judge panel of the Sixth District overruled Silver, largely based on the majority’s reading of San Marcos Water Dist. v. San Marcos Unified School Dist., (1986) 42 Cal.3d 154. In San Marcos, the state Supreme Court ruled that a special district could not levy a “sewer capacity” fee on a school district. The Sixth District found that the Legislature overrode part of the San Marcos decision when lawmakers approved Government Code § 54999, permitting public agencies to levy capital facilities fees on schools for a number of things, but not specifically for traffic and fire safety (see CP&DR Legal Digest, August 2003).

The state Supreme Court ruled that the Sixth District and CSU misread San Marcos. The university argued that San Marcos and the follow-up legislation permitted payments only for such items as water, drainage and sewage collection, but not for roads and fire protection.

“The trustees have misinterpreted San Marcos,” Justice Werdegar wrote. “The decision addresses only compulsory charges imposed by one public entity on another. The case has nothing to say 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 Reuse Authority has not imposed a charge on CSU; instead, FORA has sought a negotiated payment to mitigate specific impacts of campus growth, the court noted. “Nothing in San Marcos speaks to voluntary payments or purports to address or narrow any public agency’s duties under CEQA,” Werdegar wrote.

The trustees further argued that mitigation was infeasible because they could not guarantee that FORA would actually implement the infrastructure improvements. But the court rejected the contention. “Both the CEQA Guidelines and judicial decisions recognize that a project proponent may satisfy its duty to mitigate its own portion of a cumulative environmental impact by contributing to a regional mitigation fund,” Werdegar wrote.

The trustees cannot disclaim responsibility for making such payments until the trustees have at least requested funds from the Legislature, Werdegar wrote.

In a concurring opinion, Justice Ming Chin warned that the six-justice majority was inserting an unnecessary limitation into CEQA law. He wrote that it is not clear that “a public agency has no responsibility or jurisdiction for a mitigation measure simply because the Legislature denies a specific request for money to pay for that mitigation measure.” In this case, the trustees could still contribute to FORA from CSU’s general operating fund, Chin wrote.

Indeed, FORA attorney Damon said the court did not go as far as it could have. It did not provide direction on settling potential impact fee negotiation impasses between FORA and CSU. Plus, the court gave the impression that only the Legislature may authorize money for mitigation measures when in fact universities have a variety of funding sources, she said.

Potes-Fellow, of CSU, said trustees will now ask for environmental mitigation funds when submitting capital funding requests to the Legislature. “We will be facing the same situation in any future campus construction,” she said.

The Case:
City of Marina v. Board of Trustees of the California State University, No. S117816, 06 C.D.O.S. 6905, 2006 DJDAR 9917. Filed July 31, 2006.
The Lawyers:
For Marina: Sheri Damon, Lombardo & Gilles, (831) 754-2444.
For CSU: Basil Shiber, Miller, Starr & Regalia, (925) 935-9400.