Cities, counties and public water agencies have broad discretion over the way they conduct water supply assessments for development projects that rely on groundwater, the First District Court of Appeal has ruled.

The court upheld a water supply assessment (WSA) prepared by the City of Rohnert Park for a 1,000-acre area where 4,500 housing units and 5 million square feet of commercial space are planned. The unanimous appellate panel overturned a trial court judge, who rejected the WSA because the area studied was not entirely related to the relevant groundwater sub-basin.

The First District said that SB 610 – the 2001 law that clarified the need for water supply assessments – did not mandate a specific approach. "[T]he intent was to ensure that the local agencies take water supplies into account when considering new development. It was not to impose upon water suppliers the burden of undertaking a basin-wide analysis of past and future groundwater conditions every time a local agency proposes a new development project," the court ruled.

The decision is the first of its kind on how a government agency must prepare a water supply assessment under SB 610. The court's deferential approach is helpful to agencies, said Eric Robinson, a Kronick, Moskowitz, Tiedemann & Girard attorney who filed an amicus brief in the case on behalf of the League of California Cities and the California State Association of Counties.

"You don't want to get a court second-guessing groundwater experts. I think that rule goes beyond groundwater," Robinson said.

Stephen Kostka, an attorney for the developer in the case, said the ruling is important because the court treated the question of water supply assessment methodology as a factual one, rather than a legal one, and thus deferred to the city's experts. "Instead of treating it [water supply] as something that is decided in the abstract, you've got to consider the actual data," Kostka explained.

In an analysis of the First District decision, attorneys for the Nossaman law firm who did not participate in the case agreed the ruling is important because it provides "water suppliers with considerable discretion to adopt technical and practical approaches to evaluating the sufficiency of water supplies for new development."

Since 1999, Rohnert Park has sought to expand its city limits and urban growth boundary to accommodate 1,000 acres of new growth. A 2001 general plan update called for the growth. In January 2005, the city adopted a water supply assessment for all projects in the planned expansion area, which would be served by a city water system that relied primarily on groundwater. Among the projects was the 300-acre University Village, where developers propose about 1,600 housing units and 250,000 to 350,000 square feet of commercial space (see CP&DR Public Development, August 2006) and Brookfield Homes' 2,900-unit housing project. According to the WSA, there would be an adequate groundwater supply to meet the needs of the projects and others within a defined study area. The study estimated groundwater pumping would be about 7,350 acre-feet per year during 2025, a slight increase from recent levels but a decrease from historic amounts. Pumping 7,350 acre-feet of water from the ground each year is sustainable, according to the WSA.

A group called the OWL Foundation sued, arguing the WSA was invalid because the study area was insufficient. Sonoma County Superior Court Judge Knoel Owen agreed and tossed out the WSA. The city and the University Village developers appealed.

The issue was whether the city complied with Water Code § 10910, subdivision (f)(5), which guides the preparation of a WSA in which groundwater is a source. The statute requires a WSA to include "an analysis of the sufficiency of the groundwater from the basin or basins from which the proposed project will be supplied to meet the projected water demand associated with the proposed project."

The court decided to review the city's actions based on the "abuse of discretion" standard, which is deferential to the city. The court declined to use the "substantial evidence" standard, which is typical in California Environmental Quality Act cases, although the court opined that Rohnert Park's water study would pass either test.

The OWL Foundation complained that the city's groundwater study area – which was based on the California Interagency Watershed Map – was inconsistent with a water study performed for the general plan update. The study for the general plan found that full implementation of the plan would substantially lower the groundwater table. The group also said it was improper for the city to extend the study area into the hills outside of town because the area was not representative of the groundwater sub-basin. In his ruling, Judge Owen suggested that Rohnert Park should restrict its inquiry to a definite sub-basin.

The First District rejected these arguments. It found that the term "sub-basin" does not appear in § 10910, that a sub-basin may be too large for practical study, and that there is no "inherent hydrological significance in the delineation of a sub-basin" because the Department of Water Resources allows the use of political and institutional boundaries to define a sub-basin. Studying the entire Santa Rosa Valley groundwater basin, which underlies numerous jurisdictions and contains 40,000 wells, would not be feasible either, the court determined.

"As a practical matter, requiring a water supplier to collect data on pumping throughout a groundwater basin would impose an enormous if not impossible burden on the water supplier, particularly given the relatively brief [90-day] time frame required to complete a WSA," Presiding Justice William McGuiness wrote for the First District Court of Appeal, Division Three. "A WSA serves the limited function of providing information about groundwater sufficiency for a specific, proposed development project. It is not a general planning document for the management of groundwater supplies in a basin."

The city's experts justified their use of the watershed map to determine the study area, McGuiness continued. "[T]he selection of the watershed as study area appears to be based on an analysis of the empirical data rather than an unsupported assumption," he wrote. "There was plainly a rational reason for choosing the particular study area."

Procedurally, the court departed from the ruling in California Water Impact Network v. Newhall County Water Dist., (2008) 161 Cal.App.4th 1464 (see CP&DR Legal Digest, June 2008). In that case, the court declined to consider the adequacy of a WSA until after the study was incorporated into an environmental impact report and the development project approved. In the Rohnert Park case, the OWL Foundation sued before the EIR was finalized. However, since the suit was finalized, the city certified the EIR, approved the University District specific plan and the OWL Foundation filed a second suit on the same grounds. All parties agreed the court should decide the first lawsuit, and the court did so.

The water supply assessment ruling means the CEQA litigation is complete, and the University Village project may move forward, according to Kostka.

The Case:
OWL Foundation v. City of Rohnert Park, No. A114809, 08 C.D.O.S. 14341, 2008 DJDAR 17157. Filed November 19, 2008.
The Lawyers:
For OWL Foundation: Edward Casey, Alston + Bird, (213) 576-1000.
For the city: Veronica Ramirez, McDonough, Holland & Allen, (510) 273-8780.
For real party in interest University District LLP: Stephen Kostka, Bingham McCutchen, (925) 937-8000.