The Los Angeles Community Redevelopment Agency was correct to require a supplemental environmental impact report (SEIR) for a billboard proposed within a redevelopment project area, the Second District Court of Appeal has ruled. In 1999, Eller Media Company filed an application to build two billboards within the Hollywood redevelopment project area. Staff members at the CRA conducted an initial study under the California Environmental Quality Act (CEQA) and determined that a proposed sign on Sunset Boulevard might have significant adverse impacts on historic resources and community aesthetics. The staff also determined that the billboard was a change to the 1986 project area plan. Additionally, the staff found that a billboard proposed on North Cahuenga Boulevard might have adverse impacts that could be mitigated. Eller appealed these determinations to the CRA Board of Commissioners, which upheld the staff's conclusions. Eller then filed a lawsuit. Los Angeles County Superior Court Judge David Yaffe ruled for the city. On appeal, Eller presented four arguments: Substantial evidence did not support CRA's determination that the signs did not conform to the redevelopment plan; the CRA abused it discretion in requiring Eller to prepare a SEIR for the Sunset sign; the initial study did not conform to CEQA Guidelines and required Eller to comply with nonexistent standards; and CRA was not the lead agency under CEQA. A unanimous three-judge panel of the Second District rejected all four contentions. Eller argued that the CRA could not determine that the proposed signs failed to conform to the redevelopment plan because the CRA had never adopted sign and billboard standards that the plan called for. This failure allowed the agency to apply subjective criteria, Eller contended. The court, however, found that "CRA was duty bound to determine of Eller's proposed billboards conformed with the plan. The performance of this duty was not dependent on CRA's exercise of its permissive power to adopt specific standards relating to signs and billboards in the project area. In the absence of such standards, CRA nevertheless was required to consult with the existing provisions of the plan to determine if Eller's proposed billboards did or did not conform to the plan. Eller has made no showing that CRA's factual determinations in this case were the product of unbridled discretion and ad hoc standards. … CRA correctly evaluated Eller's proposal in light of the entire plan." (The CRA later adopted standards that prohibited all billboards and pole signs in the Hollywood project area.) As for the abuse of discretion contention, the court found that CRA followed CEQA and the CEQA Guidelines. "An EIR for a redevelopment project is known as a program EIR," Presiding Justice Vaino Spencer explained. "A program EIR is designed to analyze environmental impacts of a series of related actions that can be characterized as one large project. That CEQA contains provisions for subsequent and supplemental EIRs reflects the Legislature's recognition that the need for environmental review may arise after the certification of a final EIR and the adoption of the redevelopment plan to which it relates." "Eller's proposal to construct a billboard at the Sunset site, which was submitted 13 years after the final EIR was certified and the plan was adopted, is an individual, site-specific development project within the project area whose specific impacts could not possibly have been identified at the time the final EIR was certified. Accordingly, CRA correctly determined that this proposed construction was ‘new information' that was not known and could not have been known at the time the final EIR was certified as complete," Spencer continued. The court found that Eller's argument regarding the nonexistent standards "has appeal." However, Eller suggested no remedy, and the plan did contain general provisions against which CRA could measure the proposed signs, the court ruled. Finally, the court held that CRA, which has ultimate authority over building permits in the project area, clearly was the lead agency — not the City of Los Angeles, as Eller contended. The Case: , No. B156300, 03 C.D.O.S. 3467, 2003 DJDAR 4343. Filed March 28, 2003. Ordered published April 23, 2003. The Lawyers: For Eller: Richard Hamlin, (310) 216-2165. For CRA: Kathryn Reimann, (831) 647-1430.

Whoever said that art imitates life has not visited one of Southern California's neighborhood cybercafes, where, according to some planners and police, the reverse is true. It is in these mainly blue collar, immigrant enclaves where video games and youth culture have combined into a lively and sometimes violent activity, thereby creating the state's latest LULU (locally undesirable land use). In predictable fashion, cities are responding with ordinances, and businesses are fighting back through the courtroom. And another chapter of land use regulation is being written. Central to the controversy is the tension between property rights and public safety – a legal quandary for land use regulators since the Supreme Court affirmed the zoning police powers during the 1920s. But this being California and the year 2003, there are fascinating new variables surrounding cybercafes: Cultural preferences of immigrant youth; the effect of violent, interactive digital imagery on group behavior; and the social ramifications of militarizing a post-9/11 America that is learning to live with fear. Cybercafes are establishments that primarily provide computers for access to the Internet. They are also known as PC cafes, Internet cafes, and cyber centers. They are hugely popular in Asia, so California is the natural American launching pad for the business trend. But, already, cybercafes have been stereotyped as hotbeds of gang violence. In December, the Los Angeles Police Department (LAPD) responded to an incident at a cybercafe in which teens were using chairs and steel pipes as weapons. The LAPD reported that fight as one of more than 300 disturbances, including a homicide, to which the department responded at cybercafes during the past year. Much of the blame for cybercafe-related violence is attributed to violent, interactive on-line games, such as Counter-Strike, which allows participants to pretend to be terrorists or special security forces. Participants battle in urban settings with guns, grenades and bombs, and hold hostages while plotting assassinations. A host of cities — including a number of Orange County communities with sizeable Asian populations — have stepped in to regulate cybercafes. The epicenter of this particular land use battle is Garden Grove, an Orange County city of 180,000 abutting Anaheim that has about 22 cybercafes. The City's population is 31% Asian. In January 2002 the City Council approved an interim ordinance "prohibiting the establishment of new cybercafes and creating time, place, and manner restrictions for existing cybercafes." Business owners criticized the ordinance as unworkable, and the Orange County Superior Court agreed, saddling the City with an injunction in August 2002 cp&dr in brief, september 2002> cp&dr in brief, september 2002>. Many city attorneys are closely watching Garden Grove's appeal. Staff at city hall in Los Angeles is also paying close attention. The proposed Los Angeles regulations are spearheaded by Councilman Dennis Zine, who represents the southwest San Fernando Valley. Even though his district has only one cybercafe for which only a parking complaint has been lodged, ex-cop Zine is the go-to guy for the LAPD, which is eager to get a law on the books. "We are using a two-pronged approach, treating this as a police matter and a planning matter," said Tom Henry, Zine's chief planning deputy. This spring, the city's Zoning Administrator ruled that cybercafes require conditional use permits (CUPs) under an old rule requiring CUPs for penny arcades. Henry said it is reasonable to look at cybercafes as the 21st Century version of penny arcades, which apparently generated nuisance problems for Los Angeles decades ago. Problems go beyond violence and include the typical nuisances of parking violations, gambling and noise, according to Henry. Many of the cybercafes have gone "underground." He acknowledged the difficulties inherent in crafting a regulation, and he is well aware of the troubles Garden Grove encountered in making its regulations stick. "One of the problems we face is: How do we differentiate between a cybercafe and Kinko's? They rent out computers on which you can play games too," Henry said. Alas, Henry had hit it on the head. Zoning has always been a blunt instrument. That is why the neotraditionalists have attempted to throw the zoning ordinance books out the window. But a more interesting dilemma is how to control popular culture. When video games played between teams in Northridge and Hong Kong over cyberspace are so exciting that they incite violence, are cybercafe owners the proper target of regulation? How about video game producers? What about gun manufacturers? There is no shortage of constitutional issues here. Ariel S. Pagtakhan, the owner of Cyber HQ in the Los Angeles district of Eagle Rock, west of Pasadena, thinks it is wrong to adopt a blanket ordinance and believes that fear of youth is driving the official response. His clients are young people from the local community. He contended that tournaments, which invite people in from throughout the region, are the problem. He would agree to hire a security guard for tournaments, but said an ordinance that required full-time security is unnecessary and would put him out of business. "Some are dismayed by the violence of the games. But these are the same games kids played 50 years ago with plastic army men. The difference is better resolution," Pagtakhan said. The League of California Cities sees cybercafes as a classic nuisance. The right of business owners is tempered by the harm they may promulgate on neighboring land uses, said Bill Higgins, senior staff attorney with the League. Regulations have to be crafted that balance both parties' interests. The game may already be over, though. It's not a question of whether cybercafe ordinances are adopted, it's a matter of how they are framed. And the final outcome will say much about how scared California's elected officials, police and planners are of our increasingly youthful and immigrant society.

A city clerk did not have authority to throw out a zoning initiative petition based on evidence she received that the petition had been improperly circulated, the First District Court of Appeal has ruled. The city clerk's role was ministerial, and she did not have the authority to consider extrinsic evidence about how the initiative's backers circulated the measure, the court held. Only the courts can weigh such evidence and make discretionary decisions, the court ruled. The case involved the Downtown Zoning Initiative in the City of Millbrae, about 10 miles south of San Francisco. The initiative sought to amend the city's zoning ordinance by restricting the density of restaurants, adult businesses and certain other establishments in a specific part of downtown Millbrae. In June 2001, initiative supporters submitted about 1,500 petition signatures to City Clerk Cheryl Wade. However, Wade refused to certify the petition and she returned it to the proponents. She said that the petition violated state law because it did not include the initiative title and summary on every page, and because she believed the "notice of intention to circulate" the petition and the full text had not been included with every petition signature sheet. The Alliance for a Better Downtown Millbrae sued. San Mateo County Superior Court Judge Robert Foiles ruled that the group had substantially complied with state election law and ordered Wade to process the petition. Wade complied and the San Mateo County clerk later certified that the petitions contained enough signatures to qualify the initiative for the ballot. But Wade also appealed Judge Foiles's ruling. The downtown alliance argued that Wade's willingness to comply with the lower court mooted the case. But the First District rejected that contention, in part because the initiative has never been presented to the City Council or placed on the ballot. "This case presents a live, actual controversy," Justice Linda Gemello wrote for the unanimous three-judge panel. The First District then went on to upheld the lower court. Two separate interpretations were at issue. The first concerned Elections Code § 9203, subdivision (b), which governs the placement of the title and impartial summary on an initiative petition. The statute requires the title and summary to appear "across the top of each page of the petition." The Millbrae group placed the title and summary on the front of each petition page, but not on the back. Wade said the title and summary needed to be on every page — front and back. The appellate court disagreed, noting that a summary can be up to 500 words long and even in fine print could fill nearly an entire letter-sized page by itself. Having the title and summary on only the front of a page still protects voters from being misled and prevents signatures from being collected in support of a measure different than the initiative for which they were procured, the court held. The second issue was the interpretation of Elections Code §§ 9201 and 9207. The former section requires that each section of a petition be circulated with the full text of the measure attached. The latter section requires that each petition include a copy of the notice of intention to circulate. Wade concluded that the initiative proponents violated those sections of the elections code based on four pieces of evidence: some signature pages showed greater wear than the full text page; unidentified third parties tipped her off; a folder containing signature pages without the notice of intention or full text attached was found in the council chambers; the clerk believed the proponents had violated the Election Code in the past regarding unrelated matters. The appellate court did not rule on whether the proponents violated §§ 9201 and 9207. Instead, the court held that Wade did not have authority to make her determination. Past cases interpreting the Election Code "only authorize local elections officials to review a petition as submitted for compliance with procedural requirements, absent an express grant of broader powers," Justice Gemello wrote. "They foreclose elections officials decisions that are discretionary or go beyond a straightforward comparison of the submitted petition with the statutory requirements for petitions. Here, the petition as to the city clerk complied with §§ 9201 and 9207. … The city clerk went beyond the face of the petition and concluded that the full text and notice of intention had been added only after , and that the sections had not been circulated in compliance with the requirements of §§ 9201 and 9207." "The city clerk's decision involves the sort of discretionary, adjudicatory decisionmaking reserved for judges and juries," Gemello continued. "Nothing in §§ 9201 or 9207 authorizes elections officials to engage in discretionary factfinding or to consider extrinsic evidence. … In the absence of explicit legislative authorization, we conclude that such powers are not granted to elections officials." The court rejected Wade's argument that she was authorized — even required — to engage in factfinding before certifying an initiative petition. Such inquiries and enforcement of the Election Code belong in the courts, the First District ruled. The Case: , No. A099453, 2003 DJDAR 4511. Filed April 25, 2003. The Lawyers: For the Alliance: Dennis Scott Zell, Fogarty & Watson, (650) 652-5912. For Wade: Michael Duncheon, Hanson, Bridgett, Marcus, Vlahos & Rudy, (415) 777-3200.

With negotiations over the 2003-04 state budget ongoing, it appears that redevelopment agencies will avoid the major financial hit proposed in January by the Davis administration. Adjustments to the current 2002-03 budget did move $75 million from redevelopment agencies to school districts. However, a Davis administration proposal for the state to take all unencumbered housing funds from redevelopment agencies went nowhere in the Legislature. The Senate version of the 2003-04 budget approved in late May contained another one-time shift of $250 million from redevelopment agencies to school districts. The Assembly version of the budget contained no shift after Assembly Budget Subcommittee 4 Chairman Rudy Bermudez (D-Norwalk) ordered a proposed $100 million shift removed from consideration. The question of the tax shift away from redevelopment agencies was headed to a two-house conference committee, and could even make it to the table during anticipated Big 5 budget negotiations involving the governor and party leaders from each house. Neither house showed support for the administration's proposal to make redevelopment agencies subject to the Educational Revenue Augmentation Fund (ERAF) property tax shifts permanently. The administration had proposed phasing in the ERAF property tax shift so that about half of redevelopment revenues eventually would be sent to school districts (see , February 2003). Local government lobbyists in Sacramento, however, were quick to point out that a budget had not been adopted, so they were not about to slow their efforts to protect local revenues. "We remain on edge because it's never over until it's over," said California Redevelopment Association (CRA) Executive Director John Shirey. "What gives us pause is the bigger issue, and that is the $35 billion to $38 billion budget deficit." Until there is agreement on the budget, state officials could still come looking to local governments for money, Shirey said. Jean Korinke, a lobbyist for the League of California Cities, agreed. "Until the bill is actually signed by the governor, anything can happen," she warned. When the budget will hit the governor's desk is anyone's guess. No one expects the Legislature to complete its work by the June 15 constitutional deadline. But lobbyists and Capitol insiders said they believe a budget stalemate would not extend past July, in part because of a recent state Supreme Court ruling that limits pay for nearly all state employees if the state does not have a budget when the fiscal year starts on July 1. Another factor is pressure from Wall Street financiers, who want as much certainty as possible. Their opinions matter a great deal these days because the budget will likely rely on some form of debt. As the budget debate continued, the state was attempting to peddle $11 billion in short-term notes to cover cash-flow needs, the largest such debt issuance in American history. The concept of shifting property tax increment from redevelopment agencies to schools is not one that Republicans support, said Sen. Dick Ackerman (R-Tustin), vice chairman of the Senate Budget Committee. "When people set up redevelopment agencies, they set up the agencies for a particular purpose, and it's not fair for the state to change the rules on them," Ackerman said. Additionally, new redevelopment agencies are obliged to negotiate with other taxing entities — including school districts — about the allocation of tax increment, so the state need not get involved, Ackerman said. Redevelopment funding is especially important to cities and counties because establishment of a redevelopment project area allows the local government to keep increases in property tax revenues. This is one of the few ways that cities and counties can boost property tax receipts. Lobbyists said they have found a fairly receptive audience in the Capitol this year. The CRA has emphasized the economic development aspects of redevelopment. "We have a number of legislators who look beyond the critics of redevelopment who see that it creates a lot of jobs, and that it provides housing," Shirey said. Of course, the proposed tax shift away from redevelopment agencies is not the only budget proposal that could impact local governments, although the idea might have the most immediate impact on land use planning and development. The administration's proposed "realignment" from the state to county of many social service responsibilities — worth about $8 billion annually — has been watered down a great deal. Vehicle license fees (VLF), which go entirely to cities and counties, appear likely to return to their pre-1998 level. The state cut the fees twice starting in 1998 but has "backfilled" the reduced amount to cities and counties. A Davis administration proposal to eliminate the backfill met stiff resistance; however, state lawmakers might attempt to add conditions to the VLF revenues that impact local land use planning. Requiring cities and counties to meet certain housing goals is one possible condition. While the VLF debate involves about $3 billion annually, a proposal to eliminate the state's Williamson Act subventions would have saved the state only $39 million in 2003-04. The governor's May revision reversed course and contained the subvention. Elimination of the subvention — in which the state replaces property tax dollars lost by counties because of tax breaks given to owners of farmland and timber land — would have most affected poor, rural counties. Shirey and other representatives of local government said they might be willing to accept a one-time financial hit in exchange for future constitutional protection of revenues. Local governments would most like to see that protection come in the form of a constitutional amendment — possibly like Proposition 98, which ensures schools get a certain percentage of state spending. During the League of California Cities' first-ever extraordinary session of the general assembly in May, delegates approved a resolution in which the organization promised to support increased local "contributions" to the state budget only if the Legislature placed on the ballot a constitutional amendment protecting local sales and property taxes and VLF revenues. Last year, the League and the California State Association of Counties considered an initiative that would provide this protection. However, it appears that lawmakers on either side of the aisle might be willing to carrying a constitutional amendment. Both Senate Minority Leader Jim Brulte (R-Rancho Cucamonga) and Assemblyman Darrell Steinberg (D-Sacramento) have talked to local government representatives about the idea. How the budget division between Republicans and Democrats will impact local government revenues is unknown. A Republican-prepared budget proposal cut only $500 million from local government revenues, and that was done by eliminating some state mandates, Sen. Ackerman said. Democrats, especially Davis, have been cool to the GOP proposal. Contacts: State Sen. Dick Ackerman, (916) 445-4264. John Shirey, California Redevelopment Association, (916) 448-8760. Jean Korinke, League of California Cities, (916) 658-8245. Assembly Budget Committee website: http://www.assembly.ca.gov/acs/newcomframeset.asp?committee=4

An environmental impact report for a dairy in Madera County has survived a challenge from an organization that fights dairy expansion in the Central Valley. The Fifth District Court of Appeal rejected arguments that the EIR's handling of endangered species issues, project alternatives and cumulative groundwater impacts was inadequate. Thomas Terpstra, the attorney for Diamond H Dairy and the county, said the ruling is important because the Fifth District undertook an independent analysis of some agency comments on the draft EIR. In some past California Environmental Quality Act (CEQA) cases, the Fifth District has given "undue deference to third party comments," Terpstra said. In this case, the U.S. Fish & Wildlife Service (USFWS) had found that the dairy would cause the loss of habitat for the endangered kit fox, so the agency made recommendations for mitigations. The final EIR, however, relied on a biologists' report that found no evidence of kit fox habitat; the EIR did not mandate the USFWS mitigations. Instead, the document said the developer would be required to meet the requirements of the Endangered Species Act (ESA). Terpstra said there was nothing that triggered the ESA, so proposed mitigations were unnecessary. Project opponents have asked the state Supreme Court to review decision. That appeal focuses on the Fifth District's ruling that an analysis of a smaller alternative project did not have to appear in the EIR. The court ruled that the alternatives analysis could be presented as evidence during a public hearing. In 1999, Greg Hooker and Diamond H Dairy applied for a conditional use permit to construct a dairy on 158 acres of an existing 1,925-acre cotton and grain farm southeast of Chowchilla. The applicant sought permission to develop a dairy with 4,480 milk cows, 700 dry cows and 4,000 replacement heifers, along with the associated barns. Processing was proposed to take place off-site. The county initially approved a mitigated negative declaration for the project. When the Center on Race, Poverty and the Environment (CRPE) appealed, the Board of Supervisors ordered preparation of an EIR. The county issued the draft EIR in February 2001 and it concluded the dairy would cause significant, unavoidable impacts on groundwater quality, air quality and odors. Four months later, the Board of Supervisors adopted the EIR, including findings of overriding consideration, and approved the project. An organization called Association of Irritated Residents and CRPE sued. Madera County Superior Court Judge Charles Wieland ruled for the county, so the project opponents appealed. A unanimous three-judge panel of the Fifth District upheld Judge Wieland. During the litigation, the dairy was built and began operating. The kit fox, an endangered species, was a key part of the appeal. Project opponents argued that the field study of kit fox habitat in the EIR did not constitute "substantial evidence" because it was not completed within survey guidelines issued by the state Department of Fish and Game (DFG). The survey concluded that the dairy site did not provide habitat for any listed species. Opponents also contended the project developer must obtain an "incidental take" permit because of impacts to kit fox habitat. The court rejected both arguments. Neither DFG nor the USFWS commented on the methodology of the field survey in the EIR, the court noted. "CEQA does not require a lead agency to conduct every recommended test and perform all recommended research to evaluate the impacts of a proposed project. The fact that additional studies might be helpful does not mean that they are required," Justice Timothy Buckley wrote for the court. "The response to CRPE's comment adequately explains why a protocol level study in conformity with the survey guidelines was not conducted; no quality natural habitat was present on the site, no sensitive species or their sign was detected during the field survey and the NDDB query showed only one kit fox sighting a decade ago and it was over eight miles south of the dairy site," Buckley continued. As for the take permit, the court found that the EIR "did not limit the federal government's jurisdiction under the Endangered Species Act or impair its ability to enforce the provisions of this statute." Regarding the alternatives analysis, the project opponents challenged the Board of Supervisors' finding that a smaller dairy was infeasible. The opponents said evidence supporting the board's decision — such as an analysis by a dairy consulting firm — should have appeared in the EIR so the public could comment. This argument is also the basis for the appeal to the state Supreme Court. "We disagree," Buckley wrote. "First, CEQA Guidelines § 15131 provides that economic data is not required to be included in an EIR. Second § 21081.5 states that a finding of infeasibility shall be based ‘on substantial evidence in the record.'" The analysis and a letter from a lender saying it would not finance the smaller dairy "constitute substantial evidence," the court ruled. The court also rejected opponents' arguments regarding cumulative effects on groundwater quality. Opponents said the EIR's discussion of cumulative impacts amounted to conclusory statements unsupported by evidence. But the EIR satisfied the court. "The conclusions concerning salinity and nitrogen loading are supported by adequate analysis and factual detail," Buckley wrote. "The DEIR explained why nitrogen loading is not likely to be a cumulative problem. The agency was not required to provide evidence supporting every fact contained in this section. … Appellants' argument to the contrary is premised on the mistaken position that the cumulative impacts section of an EIR must be as detailed as the consideration of the proposed project itself. This is incorrect." Brent Newell, an attorney for CRPE, said the court ignored two studies the organization submitted regarding groundwater in San Joaquin and Stanislaus counties. "The court seemed to be pretty generous to the agency's interpretation of the applicability of evidence," he said. But Terpstra said the EIR's handling of cumulative impacts was solid. A comprehensive geology/hydrology report and an analysis of the regional dairy industry were included, he said. The court simply applied the "rule of reason" to the cumulative impacts section, he said. The Case: , No. F041012, 03 C.D.O.S. 3392, 2003 DJDAR 4305. Filed April 1, 2003. Ordered published April 17, 2003. The Lawyers: For AIR: Brent Newell, Center on Race, Poverty and the Environment, (415) 346-4179. For the county and Diamond H Dairy: Thomas Terpstra, Herum, Crabtree & Brown, (209) 472-7700.

What began as an effort to prevent desecration of Native American sacred sites morphed this spring into a profound change in California's mining regulations, a change potentially so costly to mine operators that industry representatives predicted it would bring an end to one of the state's signature commercial activities: Gold mining. But a closer examination of industry projections suggests that gold mining is already on its way out as a large-scale commercial activity in California, a development with great symbolic importance but few practical implications for the state's economy. The regulatory changes put into place in April may hasten that trend, but they did not set it in motion. California has long had a conflicted relationship with the precious metal responsible for its abrupt vault into statehood more than 150 years ago. Gold's lure and luster transformed this sleepy provincial outpost almost overnight into an urban power, fueling a tide of immigration and creating vast wealth. Almost as quickly, the quest for California gold began to visit ruin upon the state's other great assets: water, forests and farmland. In the early days of the gold rush, the destructive environmental effects of mining were localized and on a small scale. But when miners had taken all of the easily found gold, they turned to large-scale industrial operations to get at gold buried in vast deposits of sand and gravel laid down by ancient rivers. In particular, they began using high-pressure blasts of water from giant brass nozzles to wash away entire hillsides. Nearly unimaginable quantities of debris washed downstream from the Sierra Nevada hydraulic mines, choking rivers and burying farmland. The Sacramento River rose seven feet in elevation as its bed was inundated with sand and silt. More than a billion cubic yards of tailings washed into San Francisco Bay, impeding navigation and turning the ocean brown at the Golden Gate. Altogether, Gold Rush-era miners picked up and moved about 5.6 billion cubic yards of California, according to the U.S. Geological Survey. Gold miners are still picking up and moving vast amounts of California, but the technology has changed considerably. Since the 1950s, the state's gold production has been derived primarily from giant open-pit operations in the Mojave Desert, where vast amounts of rock containing minuscule amounts of the precious metal are excavated, pulverized and bathed in cyanide. As the cyanide leaches through heaps of gold-bearing ore, the cyanide collects the precious metal, which is later extracted from the liquid solution. Because it takes 20 tons or more of this low-grade ore to produce an ounce of gold, the holes produced by open-pit mining are substantial. A project proposed by Glamis Gold Ltd. in southeastern Imperial County would, for example, be 800 feet deep and a mile wide, and spread over more than 1,500 acres. The Glamis project is the main reason for the new regulations. The mine on the federally owned Fort Yuma reservation would occupy a site sacred to the Quechan Indian Nation. Former Interior Secretary Bruce Babbitt denied the company's permit application in January 2001 because of effects on the tribe's cultural resources, but the decision was reversed by his successor, Gale Norton, nine months later. Outraged tribal representatives persuaded lawmakers earlier this year to approve SB22 by Sen. Byron Sher, (D-Palo Alto). Signed April 7 by Gov. Gray Davis, the law requires that open-pit mines on Native American sacred lands be filled back in after they close and the landscape restored to its natural contours. The added expense rendered the proposed Glamis project unprofitable, according to the company. On April 10, Davis' appointees to the State Mining and Geology Board (SMGB) adopted regulations extending the SB22 reclamation requirements to all new open-pit metallic mines in California. Although state law long has required mine operators to submit post-closure reclamation plans with their permit applications, that reclamation generally consisted of revegetation and steps to prevent the mine from harming air and water quality. Filling up the holes, although an option, was not usually required, said John Parrish, the SMGB's executive officer. Mining companies externalized that cost, he said, leaving such restoration up to the public, if it was performed at all. In the May issue of its newsletter, the California Mining Association (CMA) quoted industry representatives who were furious with the new regulations. "We will not dig another hole," said Richard De Voto, president of Canyon Resources, which operates a mining operation in the Panamint Valley. With millions of dollars and 14 years already invested in that project, he said, the company is considering a lawsuit on the grounds that its property has been devalued. "In the end the losers are not just the miners but the people of California," said CMA Manager Adam Harper. "Mining in California is practiced under the strictest of environmental rules and procedures in the world. Effectively banning the activity will only mean that the resources will get produced outside the state and possibly the country, continuing the process of exporting the high-paying jobs that are needed in America." Mining opponents had a different take. "The passage of the regulations indicates that California is serious about protecting the people of California from the environmental harm that can be caused by inadequately reclaimed open pit mines, protecting the irreplaceable sacred places of California Indians," Mike Jackson, president of the Quechan Indian Nation, said in a tribal press release. Parrish said the new regulations may, indeed, make new open pit mines unprofitable "at today's prices and today's technology." But if the price of gold rises from its current level of around $350 an ounce, or if the cost of production falls, the equation will change and mining companies again will be willing to dig, Parrish said. Even before the new regulations, however, California gold mining was a dying industry. According to the California Geological Survey's most recent report on nonfuel mineral production in the state, gold production declined 19% from 2000 to 2001, and is expected to drop by about 70% over the next two to three years. Gold accounts for only $122 million of the state's $3.3 billion in annual nonfuel mineral production, dwarfed by unglamorous products such as construction sand and gravel (($953 million) and Portland cement ($768 million). California may never be known as the Concrete State, but its future appears less golden than its past. Contacts: John Parrish, State Mining and Geology Board, (916) 322-1982. Adam Harper, California Mining Association, (916) 447-1977. Mike Jackson, Quechan Nation, (760) 572-0213. California Geological Survey: www.consrv.ca.gov/CGS/index.htm

As California's population continues to grow, portions of the state are undergoing the process of urbanization. Although it might appear simple to determine what land is urban and what is not, different interpretations of "urban" can complicate discussions of farmland preservation, development patterns, placement of infrastructure and other issues. It is difficult to imagine how someone could define downtown San Francisco as anything but urban. But what about a Wal-Mart parking lot, or ranchette development, which to urban planners might as well be a forest but to a conservationist represents a loss of habitat? For land to be urbanized, does it merely need to be fenced off, or does it need to have a skyscraper? Although the definition of "urban" depends on the question you are interested in answering, the definition of most utility often will depend on the data available. Analysts have created several datasets that characterize urbanization (and other land uses) over broad geographical extent, including, • Census Urbanized Area (1990, 2000) • National Resources Inventory (NRI) Land Cover/Use (1982, 1987, 1992, 1997) • California Farmland Mapping and Monitoring Program (FMMP) (1984–2000) • US Geological Survey, National Land Cover Dataset (USGS) (1992). Each of these datasets takes aim at a specific definition of urbanization. The Census Bureau is interested in where people live, NRI in land removed from the rural land base, FMMP in land removed from agricultural production, and USGS in areas of constructed material. Beyond varying definitions, each dataset uses different source data and applies different methodology. The chart, which represents the Bay Area (sans San Francisco) plus Santa Cruz and Monterey counties, illustrates a large spread in values for any given year in trends over time. For example, • The Census data shows a decrease in urbanized land between 1990 and 2000, indicating that a Census Bureau change in methodology overwhelmed changes on the ground • NRI data indicates that the region is more urban and is urbanizing at nearly twice the rate as determined by FMMP • 1992 USGS shows 40% less urbanized land than the 1990 Census. To examine differences between these datasets in spatial detail, we have mapped urbanization patterns for the City of Vacaville in Solano County. Located on the western edge of the Sacramento Valley, Vacaville is a city with steady growth in housing, retail and offices, surrounded by grazing and agricultural land. The map shows obvious disparities. For example, the Census Bureau considered the offshoot of incorporated land on the northeast end of town as urban in 1990, but not in 2000. The other datasets identified only spotty development in that area. Beyond the city limits are many pockets of development considered urban by USGS, but not by the other datasets. Conversely, the USGS data shows pockets of non-urban land within the developed area, while FMMP and Census data do not. It is also evident that transportation corridors, which are considered urban by the USGS, are not according to the Census and FMMP. Many of these discrepancies can be explained by the scales of analysis. The Census works at the census block level, which is often 2 to 3 acres in urban settings, several times greater in the suburbs, and hundreds of acres in rural areas. The FMMP is interested in plots greater than 10 acres, and USGS operates on a pixel size of only 30 meters. Other differences are due to definitions. In some places where development has occurred, there are simply not enough people for the Census to consider it urban. And while USGS considers the structures in these areas urban, the remaining spaces between the structures are often too small for FMMP to consider as valuable farmland, or too enclosed for NRI to classify as natural habitat. To those entities, that land is already urban. To highlight the ambiguity, FMMP has created classification called "other," which perhaps is overly broad to be useful, yet which often contains land in transition, or that is difficult to define. USGS has a class called "urban/recreational grasses" meant to identify green space within the built environment. Both classes have land with urban characteristics. All of this goes to show that land you might call urban, and which may be indisputably developed to some degree, may not be considered urban by someone else. Proper selection and usage of this data requires an understanding of its finer points.

Major efforts are under way to provide money to upgrade and expand infrastructure in California, but even some backers of the funding proposals appear skeptical that state lawmakers will approve anything major this year. There are two approaches in Sacramento these days. One would make it easier for local government to raise revenue by reducing the two-thirds voter requirement for special taxes and local bonds. The second approach relies on state bonds. More than a dozen bills in the Legislature take one of these two approaches. But there are major hurdles these measures must cross to become law. Changing the voter threshold requires amending the state constitution — and tinkering with Proposition 13 — and any constitutional amendment needs a two-thirds vote in the Legislature. Therefore, a handful of Republican votes are needed in both houses. Bill sponsors and Democratic authors acknowledge those votes will be tough to round up. Even if the constitutional amendments survive the Legislature, they would require state voter approval. The state budget deficit of roughly $30 billion could decrease the possibility of passing the bonds, both in the Legislature and at the ballot box. California's debt service is about 4% of the state budget, which is on the low side of the historic level. But whether lawmakers will vote for billions of dollars worth of bond indebtedness when the state is facing its biggest budget deficit since the Depression is uncertain. Plus, the March 2004 ballot already has a $12.3 billion school bond, as well as a measure that calls for the state to adopt a pay-as-you-go strategy. The November 2004 ballot already has a $9.95 billion high-speed rail bond. California's need for capital investment is indisputable. Numerous state panels, interest groups and academics have documented both the backlog in providing public facilities and the demands of accommodating about 1,500 additional California residents every day for the next 40 years. A comprehensive study of the state's highway, water and education facilities released in March by the Public Policy Institute of California (PPIC) paints a picture of near desperation. "The state is out of highway capacity, mobility is plummeting, and access to educational facilities is becoming even more difficult despite the realization of the overarching importance of having a well-educated labor force," PPIC's David Dowel and Jan Whittington wrote in their study. "The crunch in the water sector is coming at the precise time of an awareness that water resources must be managed differently — balanced among environmental, urban and agricultural sectors." In "Making Room for the Future: Rebuilding California's Infrastructure," Dowall and Whittington reported that California has dramatically reduced its capital investment in recent decades. From 1945 to 1970, annual per capita investment in capital facilities ranged from $100 to $160 (in 1996 dollars). By the late 1990s, that investment was at $30 annually per person (in 1996 dollars), which was actually an increase from the 1980s and early 1990s. At the same time that investment has shrunk, the state has failed to plan, or at least failed to follow plans. Capital investment is based on the "pork-barrel method," Dowall and Whittington charged. "Three forces put the brakes on California's infrastructure program," the PPIC researchers wrote. The first was the opposition to public spending by Ronald Reagan, who was governor from 1967 through 1974. During Reagan's term in office, the environmental movement blossomed. And in 1978, voters approved Proposition 13, which required two-thirds voter approval for new local taxes and bond measures. Dowel and Whittington make five major recommendations: • Develop coordinated, regional land use, transportation and infrastructure plans. • Introduce demand management, such as higher bridge tolls during peak hours, discounted or free transit passes, pricing that encourages water conservation, and year-round higher-education. • Raise user fees, such as the gasoline tax and vehicle license fees, while also implementing offsets so that poor people are not disproportionately impacted. • Improve project accountability and delivery. • Earmark money for operating and maintaining capital facilities up front. Some of these proposals appear to be a bit radical for state lawmakers and the administration. It is difficult to imagine, for example, anyone in Sacramento embracing the recommendation that California double the gasoline tax over five years. Still, some bills introduced this year inch toward the PPIC model. Several bills consider both land use planning and transportation. Lawmakers are talking about a modest increase in the gasoline tax. And more efficient project delivery is a hot topic, especially at Caltrans. Bills that seek to lower the voter threshold for local sales taxes to fund transportation projects have appeared in various forms in the Legislature for about five years. The Assembly has been a graveyard for those bills. Pressure is mounting, though. Eighteen counties — which have about 85% of the state's population — have a sales tax override for transportation. Half a dozen of these taxes are scheduled to expire within five years, and a majority of the taxes will expire within 10 years. If taxes that expire by 2010 are not renewed, local transportation agencies would not get a projected $48 billion over 20 years, according to a fact sheet from the Office of Sen. Tom Torlakson (D-Martinez). In the Bay Area, roughly 60% of transportation funding comes from local sales tax overrides. The original taxes were adopted with majority approval of the local electorate. However, the state Supreme Court in 1995 ruled that these special taxes require two-thirds voter approval under Proposition 62 from 1986 ( , 11 Cal.4th 220; see , November 1995). Since then, Santa Clara, Alameda and Riverside counties have received the necessary two-thirds vote for a sales tax override. All were extensions of an existing tax. Last November, however, new or extended sales taxes received majority approval, but fell short of the two-thirds threshold, in Fresno, Merced and Solano counties. "Achieving the two-thirds threshold is extremely difficult," said Laura Stuchinsky, director of housing and transportation for the Silicon Valley Manufacturing Group. The business organization is supporting efforts in the Legislature to lower the threshold to majority vote or 55%. "The only way we're going to be able to meet the transportation needs of Californians is to at least have the option of extending a sales tax measure," Stuchinsky said. If the Legislature does not approve a measure this year, Silicon Valley Manufacturing Group will pursue an initiative that reduces the voter threshold in 2004, Stuchinsky said. Two bills, SCA 11 (Alarcon) and ACA 14 (Steinberg), encompass several topics. They would allow a majority of voters to impose special taxes or issue bonds for transportation, housing, and open space — and allow local governments to use up to 25% of new revenues for anything. The idea is to provide money for related things, said Kristi Kimball, deputy California director for the Surface Transportation Policy Project, which is sponsoring the bills. California does not always get the most out of its transportation investments, Kimball contended. She pointed to the unwillingness in some communities to allow high-density, mixed-use development near rail transit stations. "For transportation investments to work well, they need to be well-aligned with the land use policies of a community," she said. The California Chapter of the American Planning Association (CCAPA) appears to agree. "Cities and counties need options to raise local revenue to support smart growth and encourage housing production," CCAPA President Collette Morse said early this year. "We are calling for lower voting requirements on local general obligation bonds." Meanwhile, first-term Assemblyman Lloyd Levine (D-Van Nuys) has introduced two bills that do not carry the "smart growth" tag but still intend to get more money in local government accounts. Assembly Constitutional Amendment 9 would cut the voter threshold for special taxes from two-thirds to a simple majority, while ACA 11 would allow approval of local general obligation bonds for infrastructure with a 55% vote. "Given California's lack of commitment to dedicate money to infrastructure, we need to make it easier for folks at the local level if they feel they have needs to address," said Marc Engstrom, a Levine aide. At least five lawmakers, all Democrats, have introduced measures to reduce the voter threshold for imposition of local taxes (see sidebar). The bills emphasize different things (transportation, housing, open space, "smart growth planning," etc.), and some allow for majority approval rather than 55% approval. Sources at the Capitol said it is likely — but not certain — that the authors will negotiate on a consensus bill. If there is a consensus bill, it will probably take the 55% route because state voters in 2000 approved a measure allowing school bond passage with 55% approval. Eight months earlier, state voters rejected a measure allowing school bond passage with a simple majority. But before voters get the opportunity to decide, Democrats will need to win several Republican votes in the Legislature. That seems doubtful. Republicans also are reluctant to support bond proposals, which, like constitutional amendments, require a two-thirds vote of both houses to qualify for the ballot. Instead, many Republicans have endorsed last year's pay-as-you-go ACA 11 (Richman), which requires the state to set aside money for infrastructure, depending on the state's fiscal health. If voters approve that constitutional amendment next March, the state would set aside 1% of revenues for state and local infrastructure as soon as the 2006-07 fiscal year. The set-aside would grow slowly until it reached 3% of total revenues. Proposed bonds cover the spectrum — transportation, water and sewer facilities, housing, economic development. The largest is Torlakson's SB 321, a $15 billion super bond that would provide a mix of grants and loans for a number of things that Torlakson has championed during recent years, including public transit, bicycle and pedestrian facilities, better distribution of jobs, and infrastructure for infill and mixed-use developments. A more typical bond has been proposed by another East Bay lawmaker. Assemblyman Joe Canciamilla, D-Pittsburg, has introduced a $7.9 billion water bond. It would provide money for almost every type of water project imaginable — additional surface water and groundwater storage, cleanup of groundwater, sewage treatment facilities, desalination plants, watershed management, flood control and more. The bond would provide money for the state's first major investments in water storage in more than 30 years. Administrators of the Cal-Fed Bay-Delta Project would decide on the water storage projects to be funded. Environmental groups are already lining up against the bill because of the water storage provisions; however, a coalition of environmental justice groups has endorsed the bond. A Senate Local Government Committee bill analysis questions whether now is the time for large bonds. "Facing an unprecedented and staggering budget deficit, legislators must rethink their fiscal priorities," the analysis states. "Can legislators embrace more state general obligation bonds and still cut state spending and raise revenues? Will the obligations for paying the bonds' principle and interest cut into the remaining general fund?" Lawmakers' answers to those questions during the coming months are likely to have a significant impact on funding for infrastructure in California. Legislating For Dollars Numerous bills in the Legislature address infrastructure funding. Here are some of the most important proposals. • ACA 7 (Dutra) reduces the voter requirement for a local sales tax override to fund transportation projects from two-thirds to 55%. • ACA 9 (Levine) lowers the voter requirement for any special tax from two-thirds to majority. The bill also raises the voter requirement for general taxes from majority to two-thirds. • ACA 11 (Levine) allows local governments to issue general obligation bonds — which would increase property taxes — for infrastructure projects if 55% of voters approve. Those bonds currently require a two-thirds vote. • ACA 14 (Steinberg) lowers the voter approval requirement for a special tax imposed by a local government from two-thirds to majority. The special tax revenue would have to fund local infrastructure or quality of life projects, including affordable housing development, open space acquisition and an undefined category called "neighborhood improvements." • AB 93 (Canciamilla) is a $7.9 billion water bond. The bond would provide money for a wide variety of water-related projects, including $2.1 million for a new "surface water storage account." • AB 427 (Longville) deletes a 20-year limitation on sales tax overrides that fund transportation projects. • AB 531 (Kehoe) is a $10 billion infrastructure and economic development bond, which the Infrastructure and Economic Development Bank would administer. • AB 740 (Pavley) places a $2.9 billion air, water and coastal protection bond on the 2004 ballot. Among other things, the bond would provide $200 million for urban stormwater runoff projects, $50 million for small community wastewater projects, $50 million for small community groundwater protection projects, and $300 million for upgrading rivers and parkways. • AB 1066 (Liu) is a $700 million bond to fund seismic safety projects at local government buildings. The bond would be on the ballot in 2004. • AB 1412 (Wolk) allows about 25 specified cities to impose a quarter-cent or half-cent sales tax with approval of two-thirds of voters. • SCA 2 (Torlakson) reduces the voter requirement for local sales tax overrides for transportation and "smart growth planning" from two-thirds to majority. • SCA 11 (Alarcon) lowers the voter requirement for local governments to issue general obligation bonds from two-thirds to simple majority. The bonds could fund infrastructure projects, construction of affordable housing and open space acquisition. The bill also reduces the voter requirement for special taxes to fund these things from two-thirds to simple majority. • SB 21 (Machado) provides detailed administrative guidelines for awarding money from Proposition 50, a $3.4 billion water and coastal protection bond approved in 2002 (see CP&DR Public Development, April 2002). Among other things, the bill provides preferences for poor communities and projects that provide a "net environmental benefit." • SB 321 (Torlakson) is a $15 billion bond to fund a wide variety of things. It would provide $8 billion for transportation projects, including projects cut short when the state abandoned the Traffic Congestion Relief Fund. The California Infrastructure and Economic Development Bank would get $4 billion, half specifically to facilitate development in urban and older suburban areas. The bond also would provide $3 billion for housing — $2.5 billion for the existing multi-family housing program, and $500 million for a four-county program in the Bay Area and northern San Joaquin Valley to improve the jobs-housing balance. • SB 518 (Escutia) sets new rules for allocating money from Proposition 50. The bill provides preferences for projects that benefit certain high-density areas that rely on groundwater and projects that aid poor communities. The bill also exempts poor communities from matching fund requirements. • SB 566 (Scott) raises the cap on the local sales tax override in Los Angeles County from 1.5% to 2%. Contacts: Laura Stuchinsky, Silicon Valley Manufacturing Group, (408) 501-7851. Marc Engstrom, Office of Assemblyman Lloyd Levine, (916) 319-2040. Kristi Kimball, Surface Transportation Policy Project, (415) 956-7835. Office of Sen. Tom Torlakson, (916) 445-6083. Public Policy Institute of California infrastructure report: www.ppic.org/main/publication.asp?i=399

The state Supreme Court appears to be ready to undertake a sweeping review of the California Coastal Commission's makeup and its permitting activities — possibly even permits issued long ago. The court decided in April to review a case in which the Third District Court of Appeal ruled that the method of appointing the Coastal Commission violated the separation of powers doctrine ( , 2002 DJDAR 14692, see , February 2003). At the request of the Coastal Commission, the state Supreme Court unanimously agreed to review the Third District's ruling. But the state high court also said it would consider three additional questions: • If the Third District is correct, what is the appropriate remedy available to Marine Forests Society? • What effect would the Third District's ruling have on past and pending Coastal Commission decisions? • Does legislation approved in February that modifies the appointment process cure the constitutional defect? It is the second question, which opens the issue of retroactivity, that is the most complex and potentially far-reaching. Deputy Attorney General Joseph Barbieri said the state suggested the court should undertake the broad review. More than 20 cases are pending against the Coastal Commission based on the Third District's decision, and there have been attacks on old use permits based on that decision, he said. "Without explicitly doing so, we kind of invited the court to address as many of these questions as it is willing to," Barbieri said. Sacramento attorney Ronald Zumbrun, who represents Marine Forests Society, said he was surprised by the high court's action. "It seems clear the Supreme Court realized we have a messy situation with the legislation and the retroactivity," Zumbrun said. The lawsuit that has raised these weighty questions was based on Marine Forests Society's challenge to the Coastal Commission's permitting authority. Marine Forests Society, a nonprofit organization, built an artificial reef from old tires, plastic jugs, PVC pipe and concrete blocks on the ocean floor off Newport Beach. The organization said the reef would aid marine life. In 1993, the Coastal Commission ordered Marine Forests Society to get a use permit for the project, but the Commission ended up refusing to approve the after-the-fact permit. In 1999, the Commission issued a cease and desist order. Marine Forests Society filed a lawsuit, arguing that the Commission did not have the authority to issue the cease and desist order because its makeup violated the separation of powers doctrine. Marine Forests Society contended that because eight of twelve Coastal Commissioners were appointed by the Legislature and served at the will of lawmakers, the Commission was part of the legislative branch; therefore, the Commission could make policy but could not perform executive or quasi-judicial functions, such as issuing and enforcing use permits. A Sacramento County Superior Court and the Third District accepted Marine Forests Society's argument. Gov. Davis responded to the appellate court ruling by calling a special session of the Legislature. In February, the Legislature passed, and Davis signed, AB 2X 1 (Jackson). The bill sets fixed, four-year terms for the eight coastal commissioners appointed by the Assembly speaker and the Senate Rules Committee, and the bill eliminated the ability of lawmakers to remove commissioners at will. Apparently, the state Supreme Court would rule on AB 2X 1 only if it the court found a constitutional problem with the original method of appointment. Zumbrun and other property rights advocates say the bill is inadequate because the majority of commissioners still would be named by the Legislature. Barbieri said he is prepared to argue that AB 2X 1 solves the constitutional defect. But first he will argue that the original appointment structure is constitutional. The state has argued all along that nothing in the California constitution prevents the Legislature from appointing members to an executive branch agency and that then-Gov. Jerry Brown voluntarily gave the Legislature the right in this instance. If the state Supreme Court rules for property rights advocates on the separation-of-powers issues, the question becomes what to do about the Marine Forests Society cease and desist order — and, potentially, all development decisions rendered by the Commission since 1976. "There is some retroactivity," Zumbrun said, "but I don't feel the court will throw out 27 years worth of decisions." Statutes of limitations are an issue, Zumbrun said. The state's statute is 60 days, he said. But the federal Civil Rights Act has a two-year statute, and deprivation of property rights has been ruled a violation of the act, he said. The federal takings statute is either three years or five years, depending on the situation. Additionally, Zumbrun asked, how do Nollan-type actions fit in? In , (1987) 483 U.S. 825, the U.S. Supreme Court ruled that the Commission's granting of a permit to build a house in exchange for a beach access easement was an unconstitutional exaction. But the decision was not retroactive, and the Commission has obtained about 1,300 offers of dedication for easements before and since . "I don't know if they can answer the retroactivity question," Zumbrun continued. "But they can provide an outline. You have to applaud the court for being willing to do it." Barbieri said it would do no one any good for the court to reopen the Commission's past permitting decisions. If the court were to decide there is a constitutional defect in the appointments and then apply the decision retroactively, that could throw into question Coastal Commission use permits on which property owners have relied, he said. Both sides said that preparing briefs will be a complex task. Some observers believe it could be a year before oral arguments are conducted. The case is , No. S113466.

Despite a sluggish California economy, the state agency charged with business development and job creation appears to be in for a substantial downsizing. The administration's proposed 2003-04 fiscal year budget for the Technology, Trade and Commerce Agency keeps the agency's Infrastructure and Economic Development Bank spending at a constant level, but the proposal reduces spending on all other agency programs by about 70%. Under the proposed budget, many programs would be eliminated and more than half of the agency's employees cut. Those cuts follow a 15% agency spending reduction during the current fiscal year. The governor's budget proposal is widely seen as a non-starter at the Capitol. However, while schools, housing, transportation and other programs have their defenders in Sacramento, almost no one has rushed to aid the trade agency. The Legislative Analyst's Office (LAO) supports the administration's proposed reductions — and actually urges further reductions. The LAO also recommends returning the agency to department status. Exactly why the trade agency is being cut so severely is unclear. The Department of Finance budget summary simply states that because of the current-year budget cuts, "the agency has reorganized to maintain operational integrity within the reducing funding levels." The governor's office referred to the trade agency, whose spokesman did not return telephone calls. It is worth noting that the spending reductions follow a late 2001 State Auditor's report — prepared at the request of lawmakers — that found the agency's planing for economic development was "fragmented and incomplete." The auditor also questioned the agency's method of quantifying program success (see , March 2002). The auditor recommended big changes at the agency, but it is unclear how the agency followed up. The proposed budget provides no money for tourism promotion, the manufacturing technology program, a state and regional technology investment program, various rural technology efforts, and the Office of Military Base Reuse and Retention. Spending on science, technology and innovation programs would be cut to $131,000 — down from $17.9 million only two years ago, according to the LAO. The only parts of the trade agency budget that would not get whacked are the infrastructure bank, which provides loans to local governments (see , October 2002), and a program to subsidize movie and television production. The infrastructure bank is pegged for $76.2 million, which would amount to about 70% of the agency's total budget in 2003-04. The filming subsidies would become the agency's second-largest program at $8.2 million. The LAO recommended eliminating the filming subsidies of up to $300,000 per project, which cover things such as public safety expenses and public property use fees. The LAO found that the subsidies typically amounted to only 0.2% of production costs — not nearly enough to compensate for currency exchange rates and labor discounts that have drawn some film and television production out of California and the United States. "It is unclear what the rationale is for this particular subsidy," the LAO stated. "These film-related fees are part of the cost of doing business and we have no information suggesting that they are either inappropriate or unreasonably high in California." The LAO also recommended eliminating the foreign trade offices. The administration proposes $3.8 million to keep open 12 foreign trade offices — down from $5.6 million in 2001-02. The LAO has previously recommended eliminating the program because other entities, including the federal government, do similar work, analyst Todd Clark said. The state has exports of about $100 billion annually, yet the state's foreign trade offices claim a role in only $200 million to $300 million of that total — and there is no evidence those $200 million to $300 million in transactions would not have occurred anyway, Clark said. Carol Whiteside, president of the Great Valley Center and an official who worked on economic development in the Wilson administration, said the state should eliminate its foreign trade offices before cutting other economic development programs. In particular, she said, the state should maintain programs for rural areas, including the rural "e-commerce" grant program. "If you have cities with 15% and 25% unemployment, like we do in the Central Valley, you have to have some kind of intervention," Whiteside said. The rural e-commerce grants, which the Great Valley Center has received in the past, help rural areas that otherwise would see no investment in technology infrastructure, she said. Meanwhile, City of Oceanside Economic Development Director Jane McVey questioned the proposed elimination of tourism promotion. The state's tourism website and the California Welcome Centers are more important than ever, she contended. "To not have a tourism budget is detrimental in the long term because there are lots of spin-off benefits," McVey said. Facilities that serve tourists can also benefit locals, and efforts to attract tourists result in more attractive communities, she said. Furthermore, state fiscal policy makes the hotel bed tax attractive to local governments because locals can set the rate and spend the money on anything. Eleven years ago, in the midst of a serious recession, then-Gov. Wilson elevated the Department of Commerce to its current agency status. Before then, the entity had been a department within the Business, Transportation and Housing Agency. The LAO did not favor the structural change at the time and has now recommended returning the agency to department status. The move would not necessarily save much money. "It's a matter of size and function," Clark said. With the proposed budget cuts, the agency will be down to 100 full-time employees. And, like a department, the agency implements programs — unlike other agencies that manage departments which carry out the programs. But Whiteside disagreed with the LAO. "If it has agency status and it has a secretary in the governor's cabinet, it makes economic development and job creation a high priority," she said. The governor's "May revise" of the budget is due this month, and it could tell even more about the fate of the trade agency. Contacts: Todd Clark, Legislative Analyst's Office, (916) 445-4656. Carol Whiteside, Great Valley Center, (209) 522-5103. Jane McVey, City of Oceanside, (760) 435-3352. LAO's website: www.lao.ca.gov Department of Finance budget summary: www.dof.ca.gov/HTML/BUD_DOCS/Bud_link.htm

Throughout the high-stakes poker game that coastal cities and a giant irrigation district have been playing for the past seven years in the California desert � with a rich pot of Colorado River water the prize � the Salton Sea has been a peripheral presence, like a high-roller's mistress standing just outside the glare of the lights. But events earlier this year suggest that the ecologically ailing drainage sump at the heart of the Imperial Valley has really been manipulating the game all along. And as California grows more desperate to resolve the lingering dispute that has cut deeply into one of its key sources of water, the Salton Sea's future seems likely to become a matter of pressing interest in every corner of the state. It will, in fact, provide a test of whether the state's voters and political leaders regard California's vast water-supply infrastructure as a single interconnected system, or whether they reserve their interest only for the plumbing in their own neighborhoods. The primary poker players in this game are the Imperial Irrigation District (IID), the San Diego County Water Authority (SDCWA) and the Metropolitan Water District (MWD). They have been haggling for years over a proposal to shift some Colorado River water from IID to SDCWA, which now gets most of its water from MWD (see CP&DR Environment Watch, December 2002). That transfer would allow MWD to send less water to San Diego, making it possible for the Met to reduce its withdrawals from the Colorado River. That reduction is, in turn, key to California's ability to keep its use of Colorado River water at 4.4 million acre-feet annually, the quantity to which it is legally entitled. California has been exceeding that amount by as much as 800,000 acre-feet a year, and failure to reach final agreement on the IID-SDCWA transfer caused Interior Secretary Gale Norton's January 1 order to reduce the state's Colorado River allocation by 620,000 acre-feet. At least publicly, the failure of the deal during the waning days of 2002 was blamed initially on the negotiators' inability to agree about mechanisms preventing the water transfer from economically harming the Imperial Valley. In order to free up the water for sale to San Diego, Imperial farmers planned to take some of their land out of production. Over the long term, conservation measures would take the place of fallowing, allowing the land to again be planted in crops. But any mention of fallowing alarmed many in the county's agriculture-dependent towns, who feared it would mean lost jobs and reduced sales of farm-related products in an area with California's highest unemployment rate. While a hit on the local farm economy may still be a leading concern, developments during the first few months of 2003 indicate that Imperial County farmers had a much bigger fear: The water transfer's effect on the Salton Sea, which is both the valley's boon and its curse. Without the sea to accept irrigation runoff from Imperial Valley farms, there would be no Imperial Valley agriculture. The valley's fields require flooding with irrigation water to flush salts from the soil that would otherwise poison crops. There is no place for that irrigation runoff to drain except the Salton Sea. That runoff is the primary source of inflow to the sea, which has no outlet. If too much flows in, the sea expands, flooding private property along its shoreline; if too little flows in, the sea shrinks through evaporation, becoming too saline to support life and exposing salt flats to the wind, which whips them into unhealthy dust clouds. Reducing irrigation so the water can be sold to San Diego means the sea � its salinity already increasing because salt flushed into it cannot leave � could shrink and grow saltier even faster, quickly threatening its viability as a critical food source, nursery and wintering habitat for millions of migratory birds. The obvious solution is to stabilize and restore the sea, but all of the methods that have so far been studied are expensive, with costs estimated at between $1 billion and $35 billion. Imperial farmers, whose activities created the sea and the ecological mess it has become, have grown increasingly nervous as details of those solutions have been made public. They grew even more nervous when the federal government indicated it did not consider restoring the sea a high priority and would be unlikely to pick up the tab. Two months before the January 1 deadline for the transfer deal, negotiators announced that they'd reached an agreement. But at the last minute, the IID board rejected the pact. The agreement's failure to immunize Imperial farmers from financial and legal responsibility for saving the Salton Sea was a major factor. At that point, the Department of Interior made good on its threat to cut California's allocation of Colorado River water. IID's board sued the federal agency � and was in turn sued by some of the district's own farmers � and won an injunction preventing the reduction from taking effect. Frantic negotiations ensued, spearheaded by the state, whose representatives in March cautiously announced yet another deal to settle the lawsuits and satisfy the federal government. This deal makes it clear that IID's goal had been to secure assurances it would not be left on the hook for an expensive ecological rescue effort. With backing from the governor, lawmakers have proposed allocating $200 million in Proposition 50 funds for Salton Sea restoration. IID also asked for $150 million in state loan guarantees to help it finance conservation measures. In an op-ed published in April in the Sacramento Bee, California Resources Secretary Mary Nichols defended the use of Proposition 50 funds for the project. Responding to a Bee editorial that criticized the plan for using state bond proceeds to grease a deal that will benefit Southern California farms and cities, Nichols emphasized the interconnectedness of the state's plumbing system. "Why is a subsidy for a water transfer that benefits the entire state � by maintaining our ability to purchase surplus supplies of water from the Colorado River � more distasteful than a subsidy for a fish screen that allows more pumping of water from the Delta?" Nichols wrote. It remains to be seen whether that logic will be embraced by lawmakers from regions that have more experience squabbling with each other over California's water supply than viewing it as a common resource. Contacts: Mary Nichols, California Resources Agency, (916) 653-5656. Imperial Irrigation District, (760) 482-9600. San Diego County Water Authority, (858) 522-6600.

If you have driven up Interstate 5 through the Grapevine from L.A. recently, you've undoubtedly noticed those 9,000 houses located on the west side of the freeway just as you drop down into the San Joaquin Valley. These are the houses built as the result of the San Emidio Ranch Specific Plan, a plan proposed by developer Dale Poe and approved by the Kern County Board of Supervisors more than a decade ago. At least you might have been looking for those houses if you had been recently flipping through the back issues of from the early '90s. But now that it's 2003, the reality is quite different. Dale Poe died in an auto accident. San Emidio Ranch went into bankruptcy. Eventually, almost 100,000 acres, including San Emidio Ranch, was purchased by the Wildlands Conservancy. It's now called "Wind Wolves Preserve." If you flipped a little bit more through our old issues, you'd find articles about big projects proposed throughout the state, including Otay Ranch near San Diego, Gold Rush City in Lathrop, Mountain House in San Joaquin County, and the infamous Ahmanson Ranch on the Los Angeles/Ventura County line. And you would be equally surprised about almost all of them. At 23,000 acres, Otay Ranch was the largest of these development proposals, and it is being built out more or less as planned in both San Diego County and the City of Chula Vista. After years of battles between San Joaquin and Alameda counties, Mountain House is moving forward, too. But Gold Rush City never went much of anywhere, and now it has been reborn as River Islands, an 11,000-home project that was approved early this year by the local City Council. And everybody knows what's up with Ahmanson Ranch, which is still mired in litigation 11 years after the Ventura County Board of Supervisors approved the project. California is a big state, and even today — when the coastal metropolitan areas are approaching the "post-sprawl" era — California is still a state characterized by big development projects. Not only are some of the projects above still in play, but the plans are moving forward for Newhall Ranch in L.A. County (21,000 housing units), Rancho Mission Viejo in Orange County (14,000 units), and Tejon Ranch's Centennial project in L.A. County (23,000 units). Tejon already has a separate, industrial project approved on 1,500 acres in Kern County. Sacramento developer Angelo Tsakapoulos has won approval for 10,000 units in the Sunridge development in Sacramento County. And in the eastern L.A. basin, the San Bernardino County Agricultural Preserve is being broken up, creating big new opportunities — especially for Lewis Homes, which has been purchasing chunks of dairy property. Planners in some parts of California — as in other fast-growing states with big landholdings, such as Nevada, Arizona, and Florida — are skilled at managing the planning and approval of very large development projects. In fact, there is a good case to be made that California planners are much better at doing specific plans than general plans, and that specific plans are the primary tool shaping the urban landscape of the state today. But her is another twist in California that makes our state different from others when it comes to large-scale development projects: The Big Buyout. Californians have so little taste for large-scale projects these days that simply proposing one usually mobilizes a group of opponents who not only want to kill the proposal but, in fact, want some government agency or land conservancy to buy the property. Indeed, this is how opposition to Ahmanson Ranch has evolved. Having gone about as far as they can go in attempting to bat the project's construction down, opponents are now focused on trying to dig up hundreds of millions of dollars -- presumably in public funds -- to acquire the property. All this focus on large-scale development is the result of California's still-strong pattern of land ownership in large blocks. Because of original Spanish land grants and the state's lackadaisical attitude toward land ownership patterns after statehood, most of undeveloped California is owned as large "ranches." And over the last half-century — from the creation of Irvine onward — California's urban expansion has been, in essence, the story of developing large ranches. That is why the Specific Plan has emerged as such an important planning tool — maybe important tool — in the remaining undeveloped parts of California. By focusing the efforts of a local government and a landowner jointly on developing a large amount of acreage, the specific plan allows a planning process at a more meaningful scale — one that contains a specific strategy for development, infrastructure finance, and open-space protection — than in the long-range and often vague general plans that cities and counties adopt. Also, there is little doubt that the specific plan is on a scale that citizens can understand. In a 2001 report released by the Reason Public Policy Institute, Solimar Research Group found that development projects tied to specific plans are more likely to win approval at the densities called for in the plans than are housing projects that are consistent with the general plan but which lack a specific plan. In a follow-up report scheduled for release on May 22, Solimar and Reason examined six case studies and found that planners, developers, and citizen opponents are often floundering when a general plan is applied to a development project, but that a specific plan provides a strong basis for review that is easier for everybody involved to grasp and buy into. For two reasons, the Big Buyout is also a result of California's historical pattern of large-scale development. First, large-scale development projects make a much more attractive target for environmentalists and other opponents of development. They are able to rally opposition around a big development project owned by a big landowner; while many small projects slide through the process. And second, large-scale ownership patterns make the Big Buyout easy to achieve. Saving the ranch is simply a matter of negotiating one price with one landowner. Other states may have more money to throw at open space -- Florida, for example -- but they don't always have the other pieces in place that make the Big Buyout possible. Hence the patchwork that is emerging from those projects that were approved a decade ago -- a Wind Wolves preserve here, a Mountain House there, and so on. The next generation of new suburban growth -- the Newhall Ranches and Rancho Mission Viejos, the River Islands and so forth -- will be shaped by the peculiar dynamic of the Big Specific Plan and the Big Buyout.