Mitigation Fee Program Must Get Environmental Review, Court Decides

A county may not assume that fees paid under a mitigation fee program constitute full environmental mitigation for a project when the program has not undergone California Environmental Quality Act review, the Third District Court of Appeal has ruled.

The court determined that El Dorado County should have completed an environmental impact report for a Cameron Park development on the site of eight rare plant species. The county approved the 20-acre development based on a mitigated negative declaration that required the payment of $135,000 in plant species mitigation fees and the preservation of 5.96 acres as habitat for one of the species. The California Native Plant Society, however, presented a fair argument that the development could have a substantial impact, and, therefore, required an EIR, the unanimous three-judge appellate panel ruled.

The court made clear that fee-based mitigation programs may provide adequate mitigation under CEQA. However, even though El Dorado County incorporated its ecological preserve fee program in the general plan, which underwent CEQA scrutiny, the program itself was not analyzed under CEQA. Moreover, the general plan EIR states that the program will not mitigate implementation of the general plan, the court noted. And the county never updated the fees after adopting them in 1998, even though the county's own ordinance requires annual updates.

"For such a program to satisfy CEQA, it must at some point pass CEQA muster, either at the programmatic level or the individual project level," Justice Fred Morrison wrote for the court. "Further, the county has violated its own ordinance by not conducting annual review of the fee amounts and efficacy of the program, thereby undermining its view that payment of the fee equates to full mitigation."

The county adopted the ecological preserve fee program in 1998 to address longstanding concern about development's impact on native plants in the foothills. The program established varying fee levels based on a project's size and location. The county did not conduct environmental review of the program.

With the development fees and other funding, the county began acquiring properties in the designated Pine Hill ecological preserve, which covers five separate units of land. In 2001, the county signed a cooperative management agreement for the preserve with the U.S. Fish and Wildlife Service, the Bureau of Land Management, the Bureau of Reclamation, the California Department of Fish and Game, the Department of Forestry and Fire Protection, El Dorado Irrigation District and the American River Conservancy. A BLM employee serves as the preserve manager. In 2004, the county adopted a new general plan, the EIR for which discussed the preserve program.

The project in question here involved development of a 140-unit congregate senior care facility, a 35-room Alzheimer's care unit, 64 duplex cottages and an 8,000-square-foot clubhouse. The 20-acre site is located within the Pine Hill preserve. When the project application was submitted in 2006, the site was zoned for 10-acre residential use. Known as Cameron Park Congregate Care, the project has been largely completed by developers Cameron Park Ventures and Pacific Oak Development.

Throughout hearings at the county Planning Commission and the Board of Supervisors, representatives of the Fish and Wildlife Service and the Department of Fish and Game questioned the county's mitigation of impacts to rare plants, especially the Pine Hill ceanothus and the Stebbins' morning glory, both of which are listed by the federal government as endangered species. A representative of the local Native Plant Society chapter raised similar questions. But the county insisted that payment of the ecological preserve program fee, designation of the 5.96-acre protected area and mitigation measures mandating the transplanting of individual plant species and cuttings was sufficient. The Board of Supervisors adopted the mitigated negative declaration and approved a general plan amendment, rezoning and the project in October 2006.

The Native Plant Society sued, arguing the county had violated CEQA. El Dorado County Superior Court Judge Daniel Proud ruled for the county, largely because project opponents had not attempted to attack the fee program. In overturning Proud, the Third District said the trial court judge framed the question incorrectly by assuming that payment of the fee fully mitigated the project.

The Third District said it must view the fee program through the lens of the general plan. The general plan EIR contains a statement of overriding consideration because the fee program does not cumulatively avoid significant environmental impacts to plant species. At the project level, the EIR states that "mitigation shall be defined in the integrated resources management plan." However, no such plan exists, and the applicable general plan policy does not say the fee program will mitigate impacts of discretionary development projects, the court noted.

"The [EIR] study finding that the fee program will not mitigate the impact of adopting the general plan cannot be used to conclude that the same fee will presumptively mitigate the impact of an individual, discretionary project," Morrison wrote.

"This fee program has never undergone CEQA review," Morrison continued, "and a public entity cannot simply declare that such and such a fee will ‘fully' mitigate the environmental effects of all future discretionary projects absent some environmental analysis."

The court said it was "troubled" by the county's failure to review and update the fee program, even though the ordinance requires – and the general plan EIR emphasized – annual reviews. "[I]t is unknown whether the appropriate amount is being collected from developers," Morrison wrote.

The court concluded that substantial evidence supporting a fair argument that the project could result in significant impacts existed. Biologists from state and federal agencies and the plant society all testified that the mandated transplanting and propagating of thousands of ceanothus plants was an unproven technique, and the plant society representative presented evidence that mitigation measures were based on flawed scientific data regarding the plant's lifecycle.

 The court ordered the county to complete an EIR for the project, noting that even though development has proceeded, "that does not moot the CEQA issues and does not prevent adoption of additional mitigation measures."

The Case:
California Native Plant Society v. County El Dorado, No. C057083, 2009 C.D.O.S. 1240, 2009 DJDAR 1411. Filed January 29, 2009.

The Lawyers:
For the plant society: Michael Graf, (510) 525-7222.
For the county: Paula Frantz, county counsel's office, (530) 621-5770.
For the developers: Andrea Leisy, Remy, Thomas, Moose & Manley, (916) 443-2745.