A voter-approved height limitation initiative does not apply to redeveloped land that was part of a military base, the Fourth District Court of Appeal has ruled. The base reuse authority — the City of San Diego in this case — can apply only those portions of local zoning regulations that are consistent with the federally approved base reuse plan, the court ruled. The approved reuse plan for surplus land at a naval training center in San Diego allowed for structures up to 100 feet tall. Proposition D from 1972 capped development in coastal areas outside of downtown at 30 feet. So the city, acting as the base reuse authority, properly rejected application of Proposition D to the surplus base land, the court held. The city's planning for reuse of the 429-acre site began in 1993 with creation of a 26-member committee. In 1997, the Department of Housing and Urban Development (HUD) approved a draft plan. In October 1998, the city adopted the final reuse plan and certified a joint environmental impact statement and environmental impact report. The plan called for single-family residences up to 36 feet tall, and a hotel of up to 100 feet in height. In March 1999, the Defense Department issued a record of decision approving the reuse plan. The city amended its zoning ordinances, then submitted the reuse plan to the Coastal Commission as an amendment to the city's local coastal plan (LCP). The Coastal Commission conditioned its approval on height limits of 36 feet in residential areas and 45 feet in the office and research zone, with the exception of one 58-foot-tall structure. The city adopted the proposed modifications and the Coastal Commission certified the LCP amendment in September 2001. The following month, a group called Save Our NTC sued, arguing that the base reuse plan violated Proposition D. San Diego County Superior Court Judge E. Mac Amos Jr. ruled for the city. A unanimous three-judge panel of the Fourth District, Division One, upheld the decision. No one contended that Proposition D applied to the military base when the federal government owned it. The issue was whether Proposition D became applicable to the surplus base property when the federal government transferred the land to the city. Save Our NTC contended the wording and intent of Proposition D indicated the initiative should apply. But the court ruled that under the Federal Base Closure Act and the state Government Code, Proposition D cannot apply. The federal law requires the designated redevelopment authority to prepare a reuse plan subject to approval by HUD and the Defense Department. Once the plan is approved, local plans and zoning must be updated to reflect the redevelopment plan. " he determination of the appropriate use for base property is made pursuant to federal criteria and is not necessarily limited by existing local zoning ordinances," Justice James McIntyre wrote for the court. The state law, meanwhile, "requires the local base reuse authority to ‘fully honor all conditions, requirements and understandings with the federal government with respect to the use and disposal of that property,'" McIntyre wrote, citing Government Code § 67842, subd. (c). " he federal government's transfer of the surplus NTC property to the city did not trigger the application of all existing zoning ordinances to the property, but instead only those that were consistent with the Reuse Plan approved by the Defense Department and HUD," McIntyre concluded. The court also rejected the argument that the failure to apply Proposition D to the site was an illegal repeal of a voter initiative. Proposition D did not apply to the property when passed by voters and did not become applicable upon transfer of the property, so no part of the initiative was overturned, the court ruled. The Case: , No. D039615, 03 C.D.O.S. 465, 2003 DJDAR 553. Filed January 14, 2003. The Lawyers: For Save Our NTC: Steven Haskins, Haskins & Associates, (619) 479-4351. For the city: John P. Mullen, deputy city attorney, (619) 533-5800.

The history of public housing suggests that utopia is not merely a naïve idea, but may be a dangerous one. In her recent book , UCLA professor Dana Cuff has argued that some of the worst housing projects in Los Angeles were the result of well-intentioned and civic-minded people, who, during the first half of the 20th century, were trying to rid the city of neighborhoods they considered slums. "It should not be assumed that some profit-grubbing developers were responsible for the most egregious civic works; the state and the Progressives were leagues ahead when it came to disrupting communities," she writes. Cuff quotes an Illinois woman trying to protect her neighborhood against the expansion plans of a local university: "They can really destroy you, the nice people." The new Aliso Village is a neighborhood of 470 dwelling units built on the site of the most notorious housing projects in East Los Angeles. The question is: Can good design, even the most enlightened by current standards, bring civility to a low-income, historically crime-ridden neighborhood? And if we have learned that utopian, do-gooder housing projects can fail, are we not inviting a similar failure by replacing the 1940s version of the good life with our own ideal? One thing we do know, at least, is that architecture can make things worse — much, much worse. The site of Aliso Village was originally occupied by a poor neighborhood known as the Flats, where tiny, makeshift houses were crowded together, sometimes as many as three per residential lot. The project that replaced the Flat was called Aliso Village and could be described as an example of utopian Modernism. In the early 1940s, a team of architects that included Lloyd Wright (son of Frank Lloyd Wright) created a set of U-shaped courtyards or "armadas," framed on three sides by apartment units stacked three stories high. These were scattered like horseshoes across the 35-acre plan, without a strong relationship or continuity among the different complexes. In a few decades, the shortcomings of this design became apparent: The unprogrammed spaces between the individual apartment complexes provided too many places for bad actors to hide. It did not help that Aliso Village was obviously a housing project in an isolated location, just across the Los Angeles River from downtown L.A. Its only neighbor was the equally notorious Pico-Aliso project, which the Los Angeles Housing Authority demolished in 1998 and later rebuilt. By the time the housing authority demolished the original version of Aliso Village in 1999, no fewer than 10 separate gangs operated on the fearful back alleys. Again built under the aegis of the city's Housing Authority, the new project takes advantage of some updated thinking in urban design, as well as plentiful experience and research on the redevelopment of similar neighborhoods nationally. Built under HUD's well-regarded Hope VI program, the new Aliso Village is a set of three different clusters or "villages." As in all HOPE VI projects, the units are a mix of for-sale and rental housing, in the hope of stabilizing the neighborhood with a core of ownership. The first village is devoted to 93 for-sale, detached, single-family homes. The second portion is a combination of courtyard housing and conventional apartments (201 units), while the third cluster has 176 units, most of which are townhouses. The overall density is 21 units per acre, and the rental units are targeted for a range of incomes from very low to moderate. The Lee Group of Marina Del Rey is building the single-family housing, while a venture of The Related Companies of California, based in Irvine, and McCormack Baron & Associates Inc. of Los Angeles are building the rest of the units. McCormack will also manage the property. Unlike the 1940s project, the layout of the new Aliso Village is orderly and rational, with an emphasis on defensibility: the streets are straight and provide to clear sight-lines, and there are few, if any, hidden or hard-to-see spaces. Parking is accessible through rear alleys, which keeps the streets relatively car-free and makes them a little more inviting to people on foot. In a refreshing show of courage and civility, the developers have opted not to erect gates. Seeking to preserve the few assets of an isolated neighborhood, the plan tries to optimize the relationship between the housing and the long-standing Utah Elementary School at the center of the site. In an ingenious land swap, the developers gave the Los Angeles Unified School District a new child care center near Utah Elementary in exchange for an acre or so of the green space just west of the school. The site will become fenced ball fields that the neighborhood can use after school lets out, and which are locked up after hours. Additionally, the developers are negotiating with the school district to build a middle school at the lower left hand corner of the plan, where retail was originally envisioned. A further benefit to the area is a future station of the Red Line subway, planned just east of Mission Road and First Street. In short, the project has many things going for it: defensible design, landscaping, home ownership, a variety of incomes, a mix of housing types, coherent streets and transit adjacency. Best of all, perhaps, the new Aliso village does not look like "the projects." Will these factors finally help turn around one of Los Angeles's most stubbornly scary neighborhoods? Or are social forces simply too virulent to be cured by some well-meaning design moves? The question here is whether urban design, including some of the more viable notions of the New Urbanism, can add safety and comfort to what had been one of Los Angeles's worst neighborhoods. A first response might be skeptical: What culture (or the poverty cycle) has denied, architecture cannot provide. The advantage of the present project is its modesty. The goal here is to create a more or less normal neighborhood with an emphasis on defensibility. Aliso Village is not a shot at utopia, but a reflection of experience. "There is evidence from other community developments of this type that if you pursue this path and have enough of a clean slate as you do here, you can right a lot of the wrongs," said developer Bill Witte, senior vice president of The Related Companies. With 35 acres, he added, "you can redefine the context." Here, at least, architecture has done what it can to support safety and continuity, and it has avoided the worst of the known pitfalls of public housing. The project strives not to be utopia, but a functional neighborhood with some known problems. The new Aliso Village is starting life with its eyes wide open.

The time has come to call rail transit a planner's pipe dream. Californians have poured tax money into rail for more than a decade, apparently on a well-intentioned aspiration that if we build tracks, we will ride the train. But according to a U.S. Census report on trip-to-work travel, Californians have not found the train station. In fact, trip-to-work transit mode data in the 2000 decennial census is dismal. This is a tough pill for us planning professionals to swallow. I like the idea of riding a sleek light-rail train into a pedestrian-friendly California urban center as much as the next planner. But it is time to face the facts. I also like riding the Monorail around Disneyland, but none of us ever bought Walt's line that it was the transportation system of tomorrow. The census data is clear and stark: the use of public transportation as a mode of travel to work has grown only by one tenth of a percent of all transportation modes during the 10-year span. What's worse is that the "drove alone" mode increased by two tenths of a percent of all work travel trips during the same period. This is not a good trend line for rail advocates to cite. This information flies in the face of the expectations established with the public while we were convincing ourselves to invest heavily in rail. According to the Legislative Analyst's Office, 9% of the state's transportation dollar is currently going to rail. This funding is commonly augmented by local sales taxes in urban counties. The communities that have a sales tax and a rail system allocate huge chunks of the local taxes to rail projects. But this is just in from the Census: Rail trips to work account for only slightly more than 1% of the total trips to work in California. Despite earlier investments in the Bay Area and San Diego during the 1970s and 1980s, it was really the 1990s when urban rail system expansion shifted into third gear. Sacramento, San Jose, and Los Angeles all opened significant light rail systems. Los Angeles County went even further, launching a multi-county heavy rail system and introducing its Metrorail subway. Meanwhile, the Bay Area saw significant extensions of BART and the introduction of state-funded heavy rail from the Central Valley exurbs. San Diego expanded the Trolley and introduced regional heavy rail commuter service to its coastal suburbs. All this investment should produce results, right? When digging deep, one can find a limited amount of good news. For example, of all of the modes of travel to work tracked by the Census, rail experienced the largest percentage increase since 1990: 57%. However, we started with very low numbers. In 1990, only 95,000 of 13.9 million daily California work trips were via rail, according to the Census Bureau. Even worse, some of the 2000 rail trips may have come at the expense of other forms of transit. Buses, for example, dropped as a means of work travel by about 2%. And raw number growth was still by far the greatest in the "drove alone" category, which logged an increase of more than 450,000 trips per day from 1990 to 2000. Even in San Diego, where the Trolley was expanded twice during the 1990s and heavy rail was introduced to the north coastal suburbs, drive-alone trips to work surged from 71% in 1990 to 74% in 2000. Meanwhile, transit trips grew to only 3.4% of total work trips in 2000 from 3.3% in 1990. In San Joaquin County, where two heavy rail services were essentially first introduced in the 1990s, the data is little better. Drive-alone trips at least remained essentially unchanged from 1990 to 2000, holding strong at 74.6% of work trips. Transit trips grew a smidgen from 1.19% to 1.43%. One is forced to concede the apparently obvious: The nature of housing and job growth in a spatially dispersed pattern far outpaces the ability of fixed-line transit systems to make a dent in the overall commuting patterns. While we construct one linear system from housing to a job center, 10 more job centers and 100 more housing developments sprout up off the transit line. We will never catch up. This is what rail critics have been saying all along. So even though we continue invest in rail, let's adjust our expectations downward, and quit fooling ourselves. And, after all, the Monorail is fun to ride.

The budget crisis in Sacramento has led Gov. Gray Davis to propose a wide-ranging set of spending cuts, tax increases and revenue shifts — including reductions in redevelopment funds and tax revenue allocated to cities and counties — that could have a significant effect on land use planning. Although the Davis administration does not appear to be making deficit-reduction proposals based on their land use implications, there is no doubt the recommendations would have a major impact on the state's growth if they were implemented. As is usual when Sacramento bleeds red ink, local governments are lobbying to protect their funding. The Davis administration has put forth proposals that would cost cities and counties at least $5.1 billion during a 17-month period beginning this month. And the reductions would increase over time under the governor's plan. The Legislature's Democratic leadership, however, appears willing to challenge the governor and to protect the largest sources of local government funding at stake. No one pretends to know how the budget will play out. As of late January, $8 billion separated the Department of Finance's and the Legislative Analyst's Office's estimates of the budget deficit. "We're really early in this," one Capitol aide emphasized. "You're going to see a lot of proposals. It sort of creates an opportunity for real change." Among the Davis budget proposals that could affect planning and development are: • Requiring local redevelopment agencies to pass through property tax increment to schools. This administration proposal would shift about $1.3 billion annually — about half of all redevelopment property tax increment in California — from redevelopment agencies to schools, according to the California Redevelopment Association (CRA). • Eliminating the state's "backfill" of vehicle license fees to local governments. In 1998, the state cut vehicle license fees (VLF) — which go to cities and counties — by two-thirds. But the state backfilled the local revenue loss with state general fund money. Eliminating the backfill would cost cities and counties about $3 billion annually. Assembly Speaker Herb Wesson (D-Culver City) has proposed returning licensing fees to their 1998 level. But there could be strings attached to the money, such as requiring a local government to have a certified housing element or meet housing production goals. • A new reliance on revenue from American Indian casinos that could lead to dramatic increases in the size and number of casinos. • Elimination of state general fund support for transportation projects. This proposal would essentially kill the Transportation Congestion Relief Program that the governor himself introduced to great fanfare in 2000 — and would throw into limbo more than a 100 projects for which money had earlier been promised. • Elimination of the Williamson Act backfill to counties. At least some counties would likely discontinue the program, which provides property tax breaks to landowners who agree not to develop agricultural land. While interest groups are protecting their turf during what is expected to be a prolonged budget battle, just about everyone agrees that the size of the deficit forces difficult choices. "It would be nice to know how he arrived at the cuts he suggested," said Sande George, lobbyist for the California Chapter of the American Planning Association. "Some of these things seem odd." The size of the deficit Since he was re-elected in November, Davis has repeatedly emphasized the budget deficit's scope. The governor and the Department of Finance have lumped together the current budget year deficit with the projected 2003-04 fiscal year gap, an unusual approach that magnifies the problem. In December, the governor pegged the two-year deficit at $34.6 billion — compared with the LAO's estimate of $21.1 billion released only one month earlier. Most of the state general fund pays for education and social services. So, if the governor's estimate is correct, the Legislature could eliminate every state program, including the prison system and the universities, and still not balance the books, according to the California Budget Project. Republicans charged that the governor inflated the size of the deficit in an attempt to make tax increases more appealing, a charge the Democratic governor has denied. In mid-January, the LAO reviewed the governor's budget and boosted its estimate of the two-year deficit to "the $26-plus billion range." The LAO, however, downplayed the difference. "Regardless of which baseline is used," the LAO report states, "it is extremely important that the Legislature take timely and meaningful action to address the budget shortfall, which by any standard is extremely daunting, and will only get worse if left unaddressed." This deficit is unusual because California is not in a major recession, said Fred Silva, an analyst with the Public Policy Institute of California. State budget deficits of the early 1990s, early 1980s and throughout the 1930s were directly tied to general economic distress. There are three ways to solve the problem — raise taxes, cut spending and carry a debt. The administration has proposed all three, with the biggest emphasis on cuts. But the administration also proposes carrying over a deficit of $5.8 billion from this year to next. That is equal in constant dollars to the deficits that the state carried during the Depression, Silva noted. Redevelopment under fire The state's first move to get at redevelopment funding came during the early 1990s, when Sacramento ordered two shifts of redevelopment funds to schools. The shifts totaled $270 million over two years, but were not permanent. For the current fiscal year, lawmakers shifted $75 million from redevelopment agencies to schools. But the big hit is part of the mid-year budget adjustments announced in December, when the governor told redevelopment agencies to send all of their "unencumbered" housing funds to Sacramento. The Department of Finance said redevelopment agencies were holding $500 million in housing set aside money for which they had no plans. Redevelopment agencies and housing advocates cried foul, but the mid-year proposal was only the beginning. The administration's 2003-04 fiscal year proposal called for shifting $250 million of property tax increment from redevelopment agencies to schools, and increasing that amount every year (the administration did not define the period) until it reached the full amount diverted by redevelopment agencies from schools. "There seems to be another agenda here," said John Shirey, executive director of the CRA. "And I think the agenda is to considerably reduce redevelopment activity in California." Noting that the governor has asked for everyone to share the pain, Shirey said the proposed redevelopment changes "don't represent in any way a proportional share of the pain that I think probably has to be shared. It ends up taking half of the increment that redevelopment agencies currently receive." The proposal to take the redevelopment agencies' low- and moderate-income housing set aside money received a cool reception during budget hearings in the Legislature. The administration insisted that any housing money not encumbered — that is, legally obligated — as of December 1, 2002 was available for the state's taking. But redevelopment agencies conteded that most of the money in their low- and moderate-income housing accounts was designated for projects. Some of the money would not be legally encumbered, however, until the very end of the pre-construction process. As of January 15, redevelopment agencies had $632 million in low- and moderate-income housing funds, according to the CRA. Of that amount, $489 million has been committed to projects through binding agreements. Agencies have committed another $318 million without formal agreements — meaning the agencies have overcommitted by $175 million. "Redevelopment money is the first in and the last in," said Shirey, who noted that affordable housing projects take years to put together. The California Coalition for Rural Housing estimated that the administration's proposal would halt nearly 50 projects involving construction, acquisition or rehabilitation of about 1,650 units. Housing advocates argued that no constitutional basis exists for the state to take the money. And a briefing paper for a joint hearing of the Senate housing and local government committees suggested the administration's proposal actually rewarded communities that have dragged their feet on meeting their affordable housing obligations. The same briefing paper questioned the rationale for shifting tax increment to schools on a permanent and growing basis, and how local agencies would meet bond repayment obligations. "While some cities may still seek the eminent domain and bonding powers of redevelopment agencies, there would be little to no fiscal benefit to property tax increment financing if the schools' share permanently disappears. Community revitalization of California's most blighted neighborhoods would slow and deposits to L&M Funds would drop drastically," the report states. The briefing paper presents a number of options, including a temporary moratorium on the expansion of redevelopment activities, extending redevelopment deadlines by a year to let agencies recoup a one-time shift, and requiring underlying cities or counties to guarantee an agency's bond payment. League of California Cities' spokeswoman Megan Taylor said the cuts to redevelopment make no sense when the governor's stated priority is "jobs, more jobs and even more jobs." Redevelopment, she said, "is one of the most important job-creation engines in the state." Vehicle license fees The state's backfill of VLF amounts to 5% to 25% of city and county general fund revenues. Eliminating the money is not an option, said leaders of the California State Association of Counties (CSAC) and the League of California Cities. "What this budget proposal is saying is that local programs are the lowest of priorities," CSAC Executive Director Steve Szalay said. The League and CSAC has found quick allies in the Legislature. Speaker Wesson and Senate Majority Leader Don Perata (D-Oakland) said the state must fulfill the promise it made in 1998, when Sacramento said the fee reduction would not harm local governments. However, at least some lawmakers see the situation as a chance to put teeth in the housing element law for the first time. Until now, the VLF backfill has been 100% discretionary revenue for local governments. But Sen. Joseph Dunn (D-Santa Ana) suggested tying VLF allocations to a city or county's adoption of a housing element certified by the state Department of Housing and Community Development. Sen. Tom Torlakson (D-Pittsburg) proposed that 25% of VLF revenue be based on adoption of a valid housing element. In the future, even more of the VLF revenue could be tied to housing element compliance, as well as to affordable housing production, Torlakson suggested in a January 15 memorandum to other lawmakers. Cities and counties spent the last two years successfully fighting a Dunn bill to link revenues to housing policies and production. "The last thing we need is one more string attached to a fund," said CSAC President and Sonoma County Supervisor Tim Smith. "We can't ignore other services, such as public health and safety." Gambling on the future A major new tax contained in the proposed 2003-04 budget is a $1.5 billion levy on Indian casinos. Currently, tribes with casinos pay about $100 million into a fund that goes to tribes without casinos and for other purposes, according to the LAO. The Department of Finance has proposed a tax similar to those in New York and Connecticut, where the state gets up to 25% of the profits from slot machines. The proposal arises while the administration is starting to renegotiate the three-year-old gaming compact with the tribes. A deal might be possible because tribes want the state to lift the existing cap of 2,000 slot machines per casino. During a speech in mid-January, Davis said he "would not be rigidly opposed to lifting the cap." Slot machines are the big money makers in casinos, so tribes have chafed at the 2,000-machine limit. Raising the ceiling could result in bigger casinos. It is unclear whether the state could get $1.5 billion without allowing more casinos. Under the current compact between the state and the tribes, local government has no land use regulatory authority over the casinos. That, too, could be subject to renegotiation. In the area of transportation, the administration has proposed major reductions this fiscal year and next. The biggest cut is in the Traffic Congestion Relief Program (TCRP), which provides general fund support for transportation projects. The administration proposed cutting the TCRP by $100 million this fiscal year and $1.6 billion during 2003-04. In response to the proposals, the California Transportation Commission in December suspended all allocations except for safety, emergency and seismic projects "to provide an opportunity for the Commission to work with interested parties to develop appropriate action." The newsletter reported that all light-rail and freeway projects are in jeopardy. The budget does provide money to complete an environmental impact report on the proposed high-speed rail system, but the administration proposes rolling the High Speed Rail Authority into the Caltrans bureaucracy. While the cuts to transportation have big price tags, the elimination of $39 million in Williamson Act subventions could have greater land use implications. Under the Williamson Act, owners of agricultural land get property tax breaks if they agree not to develop their property for 10 years. Under the "Super" Williamson Act, the tax breaks are greater for a 20-year assurance of no development. Some counties also offer the tax breaks for protection of open space. The state backfills the lost property tax to counties. Elimination of the backfill, which was proposed last year, would force some counties to drop the Williamson Act program at a time when both Democrats and Republicans say they want to protect farmland, said Brian Dahle, president of the Regional Council of Rural Counties and a Lassen County supervisor. Moreover, Williamson Act contracts are good for 10 years, or 20 years in the case of the Super Williamson Act. Even if a county cancels a contract, the county still loses property tax for the rest of the contract period, Dahle said. "There is no way we are going to be able to come up with the money," he said. "That's really crucial to us." The APA's George questioned how the Williamson Act cut could match last year's AB857, which made protection of farmland a state priority. During his state of the state speech, Davis promised to speed the spending of bond funds. But analysts say the administration will not necessarily put more money into the system because the proposed budget uses bond funds to offset general fund reductions in numerous programs ranging from farmworker housing to roads to environmental restoration. Contacts: John Shirey, California Redevelopment Association, (916) 448-8760. Sande George, California Chapter, American Planning Association, (916) 443-5301. Fred Silva, Public Policy Institute of California, (415) 291-4450. Supervisor Tim Smith, California State Association of Counties, (707) 565-2241. Supervisor Brian Dahle, Regional Council of Rural Counties, (530) 251-8333. Legislative Analysts Office website: www.lao.ca.gov Department of Finance state budget website: www.dof.ca.gov/HTML/BUD_DOCS/Bud_link.htm California Budget Project website: www.cbp.org

After decades of fights over annexation and housing development, voters have provided the City of Watsonville with a long-range plan for growth that spells out where and when the coastal city should grow. Measure U, approved by 60% of voters in November 2002, amends the general plan to dictate what territory the city should annex during the next 25 years. Measure U also blocks the city from annexing other land that is in the city's sphere of influence, and provides for about 2,000 housing units outside the existing city limits. Although a ballot initiative is providing this broad guidance, city officials had a great deal of say regarding the initiative, and the City Council endorsed it during the campaign. As important as Measure U is as a planning document, it might be even more important in helping to settle longstanding feuds among the city, the county, housing advocates, farmers, environmentalists, old-time families, and Latino community leaders. For example, the ballot argument in favor of Measure U was signed by two city councilmembers, a farm bureau representative, a local wetlands activist and a community college district trustee. Measure U was the result of "four years of meeting and talking and compromising," Watsonville City Manager Carlos Palacios said. "It's definitely not everything I personally wanted as the city manager. But it does provide for some new housing and economic development. It does provide a measure of certainty." Ironically, this certainty — which the Santa Cruz Local Agency Formation Commission (LAFCO) and other entities have demanded for years — might be difficult to achieve. Measure U contains timeframes and triggers for annexations. Yet under the Cortese-Knox-Hertzberg Act, the city would have to submit multiple applications to LAFCO over a course of years to implement the initiative. In other words, the city would have to fight new annexation battles for two decades, despite Measure U. So, city officials are talking about some sort of "phased annexation" process, in which LAFCO would approve one large proposal up front. City officials have concluded they need special legislation to accommodate that approach, and they might request a bill this year. The LAFCO has made no policy statements so far and does not even have an application to consider, but Measure U definitely makes the agency's job easier, said LAFCO Executive Officer Patrick McCormick. "It was not a friendly relationship in the past," McCormick said. "It was a lot more work, and it was unpleasant. Now, this is a technical challenge to figure out a way to accomplish the task. We're not fighting one another. … The big tricky question is going to be the nature of the phased approval." A city of nearly 50,000 people located between Santa Cruz and Monterey, Watsonville has provided a great deal of the farmworker housing for the coastal farm industry. That has been a sore issue for some Watsonville community leaders, who believe other jurisdictions treat their city as a dumping ground. However, Santa Cruz County and most of its cities have strong slow-growth policies. Watsonville's more accommodating approach to growth — it grew 42% during the 1990s — has caused the city trouble with farmers and environmentalists, who have fought the city's expansion. In 1999, a group of community leaders formed Action Pajaro Valley, of which City Manager Palacios is co-chairman. The intent was for the group to weigh the future of a 120-square-mile area, which includes Watsonville, the unincorporated community of Pajaro, and farmland and rural neighborhoods in both Santa Cruz and Monterey counties. The Packard and Irvine foundations provided money for a one-year "visioning" process. That visioning process led to a land management plan, a proposed redrafting of Watsonville's urban limit line, and Measure U, explained Lisa Dobbins, Action Pajaro Valley executive director. The organization first got community groups lined up behind the growth strategy, then got those groups to endorse the initiative. Supporters formed a separate entity to run the actual Measure U campaign. In the end, interest groups feared being left out of a political movement that had traction. The initiative offered something for just about everybody, Dobbins said. The farm bureau received some certainty about how the city would expand, environmentalists won assurance the city would not grow between Highway 1 and the coast, business and development interests got room to grow, housing and anti-poverty advocates saw a plan for 2,000 additional housing units, some a which will have affordability and/or age covenants. "This was really a political dance in the sense that if we don't do this, we might get nothing," Dobbins said. Two groups believe they did get nothing: residents in a rural area just north of the city limits known as Buena Vista — which Measure U designates for annexation and housing development — and pilots at the Watsonville Airport. A group called Friends of Buena Vista complain that the city would substantially alter their large-lot, rural neighborhood — a charge to which city officials and Measure U backers plead guilty. Measure U guides much of the city's growth to 395 acres in Buena Vista, which would be built out over the course of 20 years. The city needs to grow somewhere, Measure U backers reason, and Buena Vista is the best choice because it is not prime farmland. But Friends of Buena Vista argue that the city should concentrate on infill and revitalization before annexing new territory. "Extending the ULL is unnecessary; improving existing conditions is imperative," stated the ballot argument against Measure U. Buena Vista residents also complained that they could not vote on an initiative that will change their way of lives; Measure U was a City of Watsonville initiative. Pilots, who have long been on the defensive in Watsonville, fear that the nearby Buena Vista development will put further pressure on the city to close the air field. This opposition is a big reason that Watsonville officials want to line up approval for Measure U's annexations and sphere-of-influence amendments all at once — even if the changes might not take effect for 15 years or more. The city might have LAFCO's support now, but there is no guarantee that backing will exist in 10 years, Palacios noted. Measure U's effect on the general plan is causing the city to rework a general plan update that was already under way. That update needs to continue but also must reflect the initiative. Palacios figures the general plan update will take "a couple of years." "It makes our general plan update easier because it's already been decided by Measure U where growth is going to go," Community Development Director John Doughty said. Still, implementing the initiative is going to be a great deal of work. The city must prepare several specific plans and area plans, and perform environmental review of all the proposals, he said. A recent appellate court ruling regarding environmental review of a series of projects at the Port of Los Angeles could lengthen the process, Doughty added. The decision in (see , December 2002) makes clear that Watsonville needs to do detailed environmental review up front on specific plans that will not be implemented for as many as 15 years, he said. In the meantime, the city could still move ahead on annexing 53 acres of industrial property along Highway 1 because that land is already in the city's sphere of influence, Palacios said. The first phase of the Buena Vista project would likely be next. Contacts: Carlos Palacios, Watsonville city manager, (831) 728-6011. John Doughty, Watsonville community development department, (831) 728-6018. Patrick McCormick, Santa Cruz Local Agency Formation Commission, (831) 454-2055. Lisa Dobbins, Action Pajaro Valley, (831) 786-8536. Action Pajaro Valley website: www.actionpajarovalley.org Friends of Buena Vista website: www.friendsofbuenavista.com

The method of appointing members to the California Coastal Commission has been declared unconstitutional by the Third District Court of Appeal. The ability of the speaker of the Assembly and the Senate Rules Committee to appoint eight of twelve commissioners and remove them at will violates the separation of powers doctrine, the court held. State attorneys likely will ask the state Supreme Court to review the decision. Property rights activists who brought the suit praised the decision and questioned whether the state's high court would take the case. But while the decision initially appeared to be a big victory for landowners and builders, the implications of the ruling are murky. The court made clear it was not touching the previous 26 years of Coastal Commission decisions. And if the court's ruling were to go into effect — it was scheduled to on January 29 — the entire state agency and its regulatory scheme would not disappear. The court did not strike down any portion of the Coastal Act except some sections relating to the appointment of commissioners. State lawmakers said they would cure the constitutional defect, although it was unclear if a legislative solution would satisfy property rights advocates and the court. In the Third District opinion, Presiding Justice Arthur Scotland presented something of a primer on the system of checks and balances. " e conclude that the Commission's interpretation and implementation of the California Coastal Act of 1976 is an executive function, and that the appointment structure giving the Senate Committee on Rules and the Speaker of the Assembly the power not only to appoint a majority of the Commission's voting members but also to remove them at will contravenes the separation of powers clause of California's Constitution. … In a practical sense, this unrestrained power to replace a majority of the Commission's voting members, and the presumed desire of those members to avoid being removed from their positions, allows the legislative branch not only to declare the law but also to control the Commission's execution of the law and exercise of its quasi-judicial powers." California State University, Sacramento, government professor John Syer said the ruling "should not be a surprise." He noted that the U.S. Supreme Court made a similar ruling in 1976, when the court ruled that only the president — and not Congress — could appoint members to the Federal Election Commission. ( , 424 U.S. 1.) "It's about time that the state has caught up with the federal government," Syer said. "They've been out of conformity with federal court rulings for 25 years." The attorney who brought the case, Ronald Zumbrun, said he has been looking for a venue to make his arguments regarding the appointment system for years. However, Superior Court judges have declined to tackle the constitutional issues, he said. This time, however, Zumbrun filed a lawsuit in Sacramento County, where it is not unusual for the Superior Court to decide cases involving the state's authority and the system of government. Sacramento County Superior Court Judge Charles Kobayashi was willing to consider Zumbrun's argument, and in 2001 Kobayashi ruled that the Coastal Commission's composition was unconstitutional (see , June 2001). The Third District upheld that ruling. "I think it's air-tight if it ends up before the California Supreme Court," Zumbrun said. "I think it's possible that the Supreme Court will take it up, but not probable. … They would take it up merely to put their imprint on such an important decision." Scholars, while not necessarily disagreeing with the ruling, predicted the state Supreme Court would likely accept the case. "I cannot imagine the Supreme Court will leave it up to the Court of Appeal to invalidate the entire Coastal Commission," Santa Clara University law professor Gerald Uelmen told the . The lawsuit that raised the constitutional questions involved the Marine Forests Society's construction of a reef from old tires, plastic jugs, PVC pipe and concrete blocks on the ocean floor off Newport Beach. The nonprofit organization built the reef more than 10 years ago, saying it was an experiment intended to aid marine life. In June 1993, the Coastal Commission determined that the Marine Forests Society project was a coastal zone development that required a permit. The commission later refused to approve an after-the-fact permit, and in 1999 the Commission issued a cease and desist order. Marine Forests Society sued, claiming the Commission did not have the authority to issue the order because the way its members were appointed violated the separation of powers doctrine. Marine Forests argued that, as composed, the Commission was actually part of the legislative branch and could make policy — but the Commission could not perform executive or quasi-judicial functions. Judge Kobayashi agreed and enjoined the Commission from granting or denying permits and from issuing cease and desist orders. The Third District stayed the injunction while considering the Commission's appeal, but the appellate court eventually ruled that Kobayashi was right and his injunction was proper. The Coastal Commission is a 12-member panel created by the Coastal Act (Public Resources Code § 30000 et seq.). The governor, the Assembly speaker and the Senate Rules Committee each appoint four members for two-year terms. Commissioners can be removed at any time. The Commission argued that the state constitution does not prevent the Legislature from appointing members to an executive branch agency, and that then-Governor Jerry Brown voluntarily gave the Legislature the right in this instance. The Third District, however, said the relevant question is "whether the appointment mechanism in §§ 30301 and 30312 … undermines the authority and independence of the agency." The court answered yes. "There are no safeguards and checks which would serve to ensure that the Commission is under the primary authority and supervision of the executive branch," Justice Scotland wrote for the unanimous three-judge panel. "Rather, the retention by the Legislature of virtually unfettered power of appointment, and wholly unfettered power of removal, over two-thirds of the voting members of the Commission serves to ensure that the Commission is under control of the Legislature." "This is not merely a paper conclusion," Scotland continued. "It is a political reality." He pointed to the Commission's own argument that it functions free of executive branch authority. Scotland cited , (1986) 478 U.S. 714, in which the U.S. Supreme Court ruled that Congress could not remove the U.S. comptroller general, who was charged with identifying budget cuts for the president when the federal deficit reached a certain point. "To permit an officer controlled by Congress to execute the laws would be, in essence, to permit a congressional veto," the court held in . That kind of congressional control is unconstitutional. Finally, the Third District ruled that the governor cannot allow the Legislature to usurp his authority to make executive branch appointments. The court made clear its opinion concerned only this case and was neither retroactive regarding Coastal Commission decisions, nor applicable to other executive branch agencies to which the Legislature appoints members. The Case: , No. C038753, 02 C.D.O.S. 12484, 2002 DJDAR 14692. Filed December 30, 2002. The Lawyers: For Marine Forests Society: Ronald Zumbrun, (916) 486-5900. For the Commission: Lisa Trankley, deputy attorney general, (916) 327-7877.

Environmental advocates challenging federal agency interpretations of the Endangered Species Act were victorious in one case at the Ninth U.S. Circuit Court of Appeals, but lost a second case. The late-2002 decisions both came on 2-1 rulings, and the decisions appeared in one aspect. Environmentalists won a case involving the U.S. Fish & Wildlife Service's interpretation of a statutory deadline for making an Endangered Species Act (ESA) determination on a species. The court struck down the agency's practice that gave the agency an indeterminate amount of time to act on a petition for a species listing. In the second case, a different panel of the Ninth Circuit ruled that the U.S. Forest Service could continue to allow cattle to graze in endangered species habitat while the agency reviewed whether the grazing would impact the species. The first case stemmed from environmentalists' submission to the Fish & Wildlife Service (USFWS) of four petitions to list as threatened or endangered four species: the Spalding's catchfly, the mountain yellow-legged frog, the Great Basin redband trout, and the yellow-billed cuckoo. Environmental groups submitted the four petitions from 1995 to 1998. The agency did not take final action on the petitions, so the groups sued. District Court Judge Garr King ruled that the Fish & Wildlife Service had discretion under the Endangered Species Act to delay findings on whether listing of a species is warranted until after the statutory 12-month deadline. However, Judge King also refused to grant the USFWS request for additional time to make court-ordered decisions on three species. Each side appealed the portion of the case it lost. The split Ninth Circuit panel ruled squarely for environmentalists. The issue is a familiar one to ESA litigation. Once a petition to add or remove a species from ESA listing is submitted to a responsible agency, the agency has 90 days to determine whether there is enough information to warrant further review. If so, the agency has one year from the date the petition was submitted to determine whether the species listing is warranted, not warranted, or warranted with exceptions. The Fish & Wildlife Service pointed to language in the ESA that requires action by the 90-day deadline "to the maximum extent practicable;" therefore, the agency argued, it has discretion to postpone action on the petition indefinitely. But the Ninth Circuit said the USFWS's interpretation would render the statutory one-year deadline for a final decision inoperative. "We rule that Congress intended to limit the flexible deadline governing the initial listing determination by enacting the firm deadline for making the final determination. Both determinations must be made within one year," Judge Johnnie Rawlinson wrote for the majority. The court rejected USFWS arguments that the petitioners did not have standing and that the case was moot because the agency made decisions on the four species after the litigation was initiated. The court held that the environmental groups had standing because their members desire "to use, observe and study the stated plant and animal species." Moreover, the parties had an ongoing conflict over interpretation of this portion of the ESA, the court ruled. As to mootness, the court ruled that the "repetition/evasion exception" was applicable because in at least five other cases, the agency made listing determinations after a lawsuit was filed. "As the district court noted: ‘Although the species at issue change, these parties have been through the same controversy many times, with the lawsuits appearing to spur the into action,'" Rawlinson wrote. In a dissent, Judge Susan Graber wrote that the environmental groups did not have standing because they did not present evidence they had been harmed. Plus, Graber wrote, the USFWS's species determinations made the lawsuit moot anyway. She found that "the pleadings and the record do not establish a substantial, ongoing dispute between the parties" over the ESA. The second case involved livestock grazing in the habitat of the loach minnow, a species listed as threatened under the ESA. Environmental groups asked a federal judge to block the Forest Service (USFS) from allowing grazing while the agency was studying the grazing's impact on the rare fish. They argued that Section 7(a) of the ESA prohibited the USFS from allowing an activity during the "consultation" process, which involved a biological opinion and an examination of alternatives by the USFWS. Environmental groups argued that Section 7(a) required the court to issue an injunction until the consultation process was complete. District Court Judge John Roll refused to issue the injunction. Although he found that the USFS never completed the consultation process on the grazing allotments in question, there had not been a showing of irreparable harm, he ruled. Allowing the grazing was consistent with Section 7(d) of the ESA because the record showed that habitat conditions were improving on the grazing allotments, Judge Roll ruled. The court also balanced the hardships between the parties. The Ninth Circuit upheld Roll, although it did find that a balancing of hardships was inappropriate. The majority ruled that the case "does not present a ‘substantial procedural violation'" that triggered an automatic injunction. This was a case where "non-jeopardizing action" may take place during the consultation process under Section 7(d). "This case is not one where once the action is initiated there can be no turning back, as in a case where timber is cut, or wherein the action will unquestionably make it unlikely that the species will survive," Judge William Bertelsman wrote for the majority. "The district court noted that the Forest Service was implementing mitigations to ensure that the cattle grazing would have little, if any, impact on the loach minnow while formal consultation was taking place," Bertelsman continued. "The consultation was ongoing and was nearing completion." In a dissent, Judge William Canby Jr. wrote that the court cannot make biological decisions. "I do not believe that Section 7(a)(2) would permit actions that might threaten members of endangered species even if those actions were reversible and thus not within the proscription of Section 7(d)," he wrote. The court in both of these cases cited the same precedents, but made different interpretations. The cases were , 437 U.S. 153 (1978), and , 816 F.2d 1376 (9th Cir. 1987). The court in the case involving the USFWS listings noted that , and the ESA made clear that the court must issue an injunction for Section 7 violations and that the normal discretion of the court was foreclosed. But in the grazing case, the court ruled that was distinguishable because it involved irreparable harm. And , the court ruled, carved out the exception for non-jeopardizing actions. First Case: , Nos. 00-35076, 00-35089, 02 C.D.O.S. 10902, 2002 DJDAR 12632. Filed November 4, 2002. The Lawyers: For BLF: Daniel Rohlf, Pacific Northwest Environmental Advocacy Center, (503) 768-6600. For Badgley, M. Alice Thurston, Department of Justice, (202) 514-2000. Second Case: , Nos. 01-16092, 01-16277, 02 C.D.O.S. 10101, 2002 DJDAR 11530. Filed October 2, 2002. The Lawyers: Southwest Center: Susan Daggett, Earthjustice Legal Defense Fund, (303) 623-9466. For USFS: Sandra Slack Glover, Department of Justice, (202) 514-2000.

Caltrans did not need legislative approval to acquire parkland that San Diego County had purchased earlier with state park bond money, the Fourth District Court of Appeal has ruled. The court rejected the argument from park supporters that Caltrans could not convert the land to road use without approval of the state Legislature. At issue in this case is a portion of the Sweetwater Regional Park in southern San Diego County. The county originally acquired a portion of the parkland, known as "Area 19," with money from the Cameron-Unruh Beach, Park, Recreational and Historical Facilities Bond Act of 1964. Among other things, the act provided $40 million for grants to local agencies for the acquisition and development of property for public parks and beaches. During the 1990s, Caltrans proposed an 11-mile-long toll road through the park connecting Highways 54 and 905. Caltrans planned to acquire Area 19 from the county for the toll road. n May 2000, a group called Preserve South Bay filed a lawsuit against the California Transportation Commission, arguing that the state could not acquire Area 19 without legislative approval for converting the land to a non-park use. San Diego County Superior Court Judge Charles Hayes ruled for the state. Preserve South Bay appealed. The organization contended that the 1964 bond act required that land purchased with the money be used as parkland unless the Legislature provided a specific exemption. They contended the requirement extended to any entity. But the unanimous three-judge appellate panel upheld the lower court, ruling that the limitation applied only to the local agency that originally purchased the land — and not to a state agency. "The plain language of § 5096.27 shows it applies solely to a contract between the state and a grantee, or local agency," Justice Judith McConnell wrote, citing the 1964 bond act. "Section 5096.27 does not address a state agency's acquisition of park property purchased by a local public agency under the Cameron-Unruh Act." This interpretation, McConnell wrote, is consistent with Streets and Highways Code § 103.5, which states in part: " he real property which Caltrans may acquire by eminent domain, or otherwise, includes any property dedicated to park purposes, however it may have been dedicated, when the commission has determined by resolution that such property is necessary for state highway purposes." Preserve South Bay argued this section of the Streets and Highways Code was not applicable because Caltrans had not adopted a "resolution of necessity" to take the property via eminent domain. But the court said the lack of a resolution did not matter. "If the project proceeds, a resolution of necessity will be required before Caltrans may acquire Area 19 through eminent domain, but whether it has adopted a resolution at this point is immaterial," the court ruled. The Case: , No. D038865, 02 C.D.O.S. 11888, 2002 DJDAR 13953. Filed December 11, 2002. The Lawyers: For Rolfe: Thomas Mauriello, (415) 677-1238. For the CTC: Bruce Behrens, CTC, (916) 654-2630. For San Diego Regional Transportation Commission: Julie Wiley, SANDAG (619) 595-5647.

The status of the California Coastal Commission was everything but clear in January, following a December 30 appellate court ruling that the Commission's composition was unconstitutional. The court ruled that the authority of the Assembly speaker and Senate Rules Committee to appoint eight of twelve commissioners and remove them at will violated the separation of powers doctrine (for details, see , Page 7). Gov. Davis called a special session of the Legislature on January 22 "to keep the California Coastal Commission viable and doing its job." Davis said he was working with state Sen. Sheila Kuehl (D-Santa Monica) and Assemblywoman Hannah Beth Jackson (D-Santa Barbara) and expected to sign legislation by the end January. The bills would give legislative appointees to the Commission fixed terms and would prohibit lawmakers from removing Commissioners at will. The legislation would keep the current system that gives the governor, the Assembly speaker and the Senate Rules Committee four appointees each. Whether such a measure would satisfy the court was unknown. Property rights activists said they would not accept any measure that allows lawmakers to appoint more than a token representative to the Commission. "The Legislature has to get out of the process," said Sacramento attorney Ronald Zumbrun, who brought the case against the Coastal Commission. An injunction preventing the Coastal Commission from considering permits or issuing cease and desist orders was scheduled to take effect January 29. The Third District Court of Appeal rejected Attorney General Bill Lockyer's request for a rehearing, but coastal commissioners said in January they would ask the state Supreme Court to review the decision. In the meantime, the status of the agency as a whole appeared to remain unchanged. In numerous communications, Coastal Commission Executive Director Peter Douglas noted that the appellate court did not strike down the 1976 Coastal Act, which established state oversight of lands and waters in the state coastal zone. CENTRAL VALLEY SMOG and the lack of a plan for clearing the air could prevent construction of a large power plant. California Energy Commission analysts have recommended denial of a permit to build a 1060 megawatt, gas-fired power plant in the Fresno County city of San Joaquin because of air pollution concerns. The denial stems from developer Calpine Corporation's proposed air pollution mitigations. Calpine proposed purchasing emission reduction credits and shutting down or modifying the businesses that have been producing the pollution — a standard mitigation. The San Joaquin Valley Air Pollution District approved Calpine's plan. But the U.S. Environmental Protection Agency (EPA) has determined that because the eight-county district does not have an approved plan for cleaning up the Central Valley's air, the emission credits are unavailable. State Energy Commission analysts sided with the EPA and further found that the emission reduction credits were inadequate even if they were available. FORMER SAN JOAQUIN COUNTY Supervisor Lynn Bedford pleaded not guilty in January to five criminal charges stemming from a proposed power plant at the Port of Stockton. Federal prosecutors allege Bedford and Monte McFall, a former San Joaquin County sheriff's deputy and longtime political operative, colluded to block Calpine from building a power plant in an attempt to clear the way for rival Sunlaw Corporation. Authorities allege Sunlaw promised to pay McFall and his associates $2 million if Sunlaw won the right to build. Bedford was indicted in December, one month after he lost a re-election bid. McFall allegedly told Calpine that unless the company dropped its Port of Stockton plans, he would use his political connections to block the project and he would work to kill a proposed 1,100 megawatt Calpine power plant in Alameda County. Bedford introduced a Board of Supervisors resolution opposing Calpine's Stockton proposal. Both also are accused of lying to FBI agents about their activities. Calpine refused to drop its Port of Stockton proposal, and its project in Alameda County is pending before the California Energy Commission. THE HOUSING INDUSTRY is the largest segment of the California economy, according to a study by the Sacramento Area Commerce and Trade Organization and California State University, Sacramento. The study pegs the direct economic impact of new housing construction at $20.25 billion, which leverages another $19.65 billion in indirect and induced expenditures every year. That equates to about 359,000 jobs. The entire industry of new and existing housing — including construction, financing, sales, furnishing, and operations and maintenance — amounts to $257 billion annually, or 13% of all economic activity in California, the study asserts. The study concludes that the housing industry could do even more, as builders since 1997 have produced only 57% of the 230,000 units that the Department of Housing and Community Development says the state needs annually. The study is available on the California Building Industry Association website: www.cbia.org. THE DAVIS ADMINISTRATION'S first crack at a five-year infrastructure plan was a good start, but the plan had a number of shortcomings, according to a Legislative Analyst's Office (LAO) report. As required by 1999 legislation (AB 1473, Hertzberg), the administration prepared the first of what are supposed to be annual five-year infrastructure plans so that policymakers have a coordinated picture of capital investment needs. The plan, released in mid-2002, outlined $56 billion worth of proposed capital spending, about three-fourths of which was for transportation and K-12 schools. While the plan provided the Legislature with a "big picture" look, the plan did not explain what the priorities were, failed to coordinate among departments, used available funding as a need constraint, omitted maintenance issues, and avoided a number of policy and programmatic questions, according to the LAO's report. "While the plan presents various departmental priorities, it does not place these priorities in the context of the administration's overall, statewide priorities," the LAO stated. "For example, the plan does not state whether the administration's priorities are: the renovation of aging facilities, addressing certain critical deficiencies, the development of new facilities and capacity, or a combination of these. We believe that such a context is needed." The LAO recommended the Legislature establish special policy and budget committees to address capital outlay issues. The LAO report is available at www.lao.ca.gov. A STATE TASK FORCE has recommended a number of changes to the way government agencies and developers address the threat of flooding. Among the recommendations: drawing up floodplain maps based on watersheds, not political boundaries; revising flood maps to take into account current and future development; building at least 1 foot above the National Flood Insurance Program's 100-year floodplain line; better technical assistance from the Department of Water Resources (DWR) to local agencies and practitioners, including new California Environmental Quality Act guidelines; and an advisory committee to perform further review. The California Floodplain Management Task Force, formed by DWR in early 2002, "sought to recommend floodplain management strategies designed to reduce flood losses and maximize the benefits of floodplains. The Task Force found that existing programs are inadequate to accomplish these goals and that time is of the essence," the report states. The 41-member Task Force included representatives of state and local agencies, development interests, environmental groups, agriculture and water users. The report is available at http://fpmtaskforce.water.ca.gov/. THE SANTA ANA Redevelopment Agency should reorganize its housing program to ensure that money reserved for housing is spent on production, a state Department of Housing and Community Development Audit has concluded. The state found that for three fiscal years ending in June 2000, Santa Ana spent only about 16% of its low- and moderate-income housing funds on housing rehabilitation and property acquisition, while 47% went for planning and administration, and 35% paid for street and sidewalk improvements. When city officials protested that those three years were not representative, the state reviewed four more years of records. Auditors found that the city had spent at least two-thirds of housing money for those periods on planning and administration and on off-site improvements. In a written response to the audit, Santa Ana Redevelopment Agency Executive Director John Reekstin called HCD's recommendation "offensive and misdirected." ORANGE COUNTY Planning and Development Services Director Thomas Mathews retired in January amid a financial crisis in his department. County officials earlier announced they would lay off about 20% of the department's employees in January because the agency was accumulating a deficit of at least $500,000 per month (see , January 2003). Newspaper reports in January said that the Board of Supervisors conducted closed-door meetings to question County Executive Officer Michael Schumacher's handling of the Planning Department financial situation. County Auditor David Sundstrom has taken over a Planning Department study of fees to determine if they are covering the county's costs. The fees are already the subject of a builder lawsuit. A LAWSUIT challenging the City of Irvine's environmental review of a 7,743-acre project has been upheld by the Orange County Superior Court. The organization Defend the Bay argued that the city did not adequately study impacts to traffic congestion, water quality, agriculture and other issues. But the court said the city's review was sufficient. The Irvine Company's "Northern Sphere" plan would increase the size and population of the City of Irvine by about one-quarter. A CONTROVERSIAL PARK and retail development in West Covina has been slowed and might need new boundaries because of the discovery of three endangered gnatcatcher birds. In September 2002, the City Council voted 3-2 to approve a golf course, six baseball and softball fields, and 375,000 square feet of retail development on 230 acres near a closed garbage dump. Since then biologists have located the rare birds on the former dump site.

Apparently emboldened by political success in the mid-term election, the Bush administration has become more aggressive in its efforts to alter strict Clinton-era environmental protection policies. In California, strong state laws — and a political scene still dominated by Democrats — could hold the line on many issues, especially protection of wetlands and endangered species. But on issues in which active federal involvement is crucial, such as water and public lands policy, a major conflict could be arising. Indeed, California is likely to provide a stern test for the Bush administration's stated philosophy of returning power to state and local governments. Although rural counties, landowners, and farmers will no doubt welcome the Bush approach, the state government's strong pro-environment stance could serve as a controversial counterpoint. There is little question that the latest moves leave behind — perhaps permanently — the state-federal cooperation on natural resource issues that has flourished for more than a decade. In fact, many of the state-federal efforts now being rolled back were initiated during the first Bush administration, from 1989 to 1993, when both the president and the governor of California were Republicans. Since the election, the administration has taken several significant steps that indicate a more aggressive approach to environmental policy. Here are a few highlights: • The administration has issued a new rule that essentially turns regulation of isolated wetlands -- including small streams and vernal pools -- over to state governments. This rule interprets a 2001 U.S. Supreme Court wetlands ruling extremely broadly. • The administration has issued a new rule that will make it easier for state and local governments to move forward with claims to take over wilderness roads on national forest and Bureau of Land Management property. This rule could permit San Bernardino County, among others, to take possession of thousands of miles of wilderness roads that provide access to isolated areas. • The Pentagon is moving forward with new plans to ask Congress for relief from environmental laws on military bases. A similar request failed last year, but with an Iraq war in the offing and all of Congress now in Republican hands, a different reception seems likely. • The administration continues to starve Cal-Fed financially, arguing that the massive state-federal effort to restore the ecological health of the San Francisco Bay-Delta region requires federal budget reauthorization. It is difficult to know how much of a target California is in these efforts or whether the administration has a political goal in mind for the state. The conventional wisdom is that California is lost to Republicans, even at the presidential level, for the foreseeable future. And state environmental policy is likely to take up much of the slack. At the same time, however, Californians will likely play an important role in determining how the administration's efforts play out, particularly on water policy. Anne Veneman of Modesto is the secretary of Agriculture. The Interior Department's point person on Cal-Fed is Jason Peltier, who as director of the Central Valley Project Improvement Association was one of the leading opponents of the 1992 legislation that loosened valley farmers' grip on California water. And the wild card — perhaps one the administration wishes it did not have — is Rep. Richard Pombo, a Republican from San Joaquin County who recently leapfrogged over several more senior House members to become chairman of the House Resources Committee. Pombo has been an ardent opponent of environmental protections, especially those regarding endangered species. His hard-edged style is in keeping with the House leadership but does not reflect the Bush approach, which generally masks strident policy action in gentle, or even no, rhetoric. The new wetlands rule, advance notice of which was issued on January 10, provides insight into the administration's approach to interpreting the U.S. Supreme Court's ruling in , 531 U.S. 159 (2001) (see , February 2001). The Supreme Court ruled that the use of an isolated wetland by migratory birds cannot be the sole basis for federal jurisdiction over the wetland. Under the new proposed rule, the Bush administration has instructed field staff from the Army Corps and the Environmental Protection Agency not to assert jurisdiction over wetlands that are either located in a single state or isolated from a navigable waterway. The ruling is likely to have less impact in California than elsewhere because of overlapping regulations. Many wetlands projects are also subject to state regulations, including state endangered species laws. For example, vernal pools — the seasonal puddles located mostly in the Central Valley that have complicated development of many projects, including the new University of California campus in Merced — would still be subject to considerable scrutiny because of the presence of fairy shrimp, a federally listed endangered species. The Pentagon's action could have a more significant effect, given the fact that federal military bases are not subject to state law. Congressional debate last year focused on Camp Pendleton, a Marine training base in southern Orange County that has also served as a key component in the regional efforts to protect the California gnatcatcher and a variety of other endangered birds -- an effort that has taken place mostly under the auspices of the California Endangered Species Act. Most of Pendleton, as well as land at Miramar Marine Corps Air Station in San Diego, could eventually be designated as critical habitat. Under the Pentagon's legislative proposal, military bases would be exempt from critical habitat designation under the Endangered Species Act, provided they are covered by natural resources management plans prepared under the Sikes Act, a separate federal law that permits the Pentagon and the Department of the Interior to work together on such plans. Environmental groups such as the Natural Resources Defense Council claim the Sikes Act's provisions are not stringent enough and will likely oppose the Pentagon's efforts again this year. Then there's Cal-Fed, the ongoing multi-agency effort to improve the San Francisco Bay-Sacramento Delta water system. Dating back to the Wilson-Clinton days, when state and federal resource managers began working cooperatively, Cal-Fed remains an effort of more than 20 different state and federal agencies. However, the Bush Administration has cut Cal-Fed funding from $30 million to $15 million in the current budget year. Despite efforts by both Republican and Democratic members of Congress from California, Congress has not reauthorized the Cal-Fed program. This has led to criticism from groups such as Taxpayers for Common Sense, an advocacy group that has called the Cal-Fed appropriations a pork barrel that needs to be re-examined so that it is "not just a rehash of outdated water storage projects from years past." So most of the Cal-Fed burden will apparently fall on the state, which has authorized a wide variety of Bay Delta-related improvements in recent bond issues, especially Proposition 50, which passed in November and contains more than $300 million for Bay-Delta projects. What remains to be seen is whether the state-level regulatory and spending programs can hold together the efforts that have been undertaken jointly with the federal government during the last decade. From Cal-Fed to Southern California habitat preservation planning, state-federal cooperation lay at the core of many of efforts. With the Bush administration, the Pentagon and perhaps Congress pulling out of the partnership — and the state facing a budget crisis — environmental advocates in Sacramento may not be able to hold the dike.

Planning practitioners who are perplexed about how to handle certain projects in light of a recent court decision regarding the California Environmental Quality Act (CEQA) Guidelines should not feel alone. Planners, environmental consultants and attorneys who spoke with presented a surprising lack of consensus about the effects of the Third District Court of Appeal ruling, which threw out six guidelines addressing cumulative impacts, thresholds of significance, tiering and probable future projects. Indeed, some practitioners conceded that they had received conflicting interpretations from lawyers and colleagues. What is clear is that almost no one has complete confidence about how to address a project's impact on a cumulative condition — an area of CEQA law that has long perplexed practitioners. The Third District ruled that "one molecule" of contribution to a cumulative condition was not enough to trigger an environmental impact report. The court also ruled that a lead agency cannot weigh incremental contributions as a ratio. Instead, the court pointed to an older CEQA Guideline, § 15064 subsection (i)(1). " n assessing whether a cumulative effect requires an EIR, the lead agency shall consider whether the cumulative impact is significant and whether the proposed project's incremental effects are cumulatively considerable," Justice Rodney Davis wrote for the court. "The thing that struck me is that it's not the one-molecule rule," said Charlie Bull, president of RECON, a San Diego-based environmental consulting firm. "But based on what he wrote, it's hard for me to tell what the rule is." Added former Resources Agency counsel Maureen Gorsen, "Absolutely nobody knows what ‘cumulatively considerable' means." In late October, the appellate court invalidated several changes that the state made to the CEQA Guidelines in 1998. The court upheld one guideline addressing cumulative impacts but provided additional direction for interpreting the rule. The court also upheld an infill development exemption that environmentalists had contested (see , December 2002). The decision has become known as the "CBE case" for the lead plaintiff, Oakland-based Citizens for a Better Environment. The decision is final because no one asked the state Supreme Court to review it. The ruling was a victory for environmental groups, which contended the amendments adopted during the final months of the Wilson administration were an attempt to hinder project opponents' ability to fight using CEQA. On the losing end of the CBE case was the building industry, which had taken up defense of the guidelines when the Davis administration and Attorney General Bill Lockyer backed away from the case. Builders said the guideline amendments brought a needed measure of certainty to environmental reviews. Today, about 150 guideline revisions from 1998 stand. But the few guidelines that the court invalidated were generally acknowledged to be the substantial changes. The cumulative impacts portion of the CBE case might be the most important. The court overturned a guideline that allowed planners to determine a project's contribution to a cumulative condition — such as air pollution — was "de minimis" and, therefore, not deserving of further study. The rejected guideline was intended to bridge the gap between "one molecule" of impact, and a "level of considerableness" that would trigger additional environmental review, said Terry Rivasplata, who headed the State Clearinghouse for the Office of Planning & Research (OPR) when the revisions were drafted. The court said the "one molecule rule" was not appropriate, but the court also ruled that comparisons and ratios were not the proper approach either. And the court indicated that the worse the cumulative condition, the more scrutiny a project should receive. "Therein lies the confusion," said Curtis Alling, managing principal of EDAW's Sacramento office. "If you don't do this from a comparative standpoint," said RECON's Bull, "I don't know how you do it." Alling suggested that planners either fully mitigate a project that contributes to a cumulative condition, or demonstrate that the project complies with an adopted plan that addresses the condition. "Maybe there's an encouragement to do broad-scale planning," he said. Rivasplata, now a CEQA compliance specialist for Jones & Stokes in Sacramento, agreed with that approach. If planners can show that a project is covered by an existing plan, program or mitigation fee, they might be able to avoid further study of cumulative impacts, he said. The appellate court did uphold a guideline that allows an agency to determine a project's incremental contribution to a cumulative effect is not significant if the project complies with an approved plan or mitigation program. However, the court ruled, the "fair argument" standard still applies, meaning an EIR would be required if there is substantial evidence a project may have a significant impact. That caveat is important because it reduces the certainty that guideline drafters sought, said Gorsen, the former Resources Agency counsel responsible for the 1998 amendments. The court rejected a guideline that required a finding of no significance if a project's impact fell below an established threshold of significance. But the court did not throw out the concept of thresholds of significance — a concept backed by developers and some planners. "This ruling does not mean environmental standards cannot be used as evidence to support significance determinations," according to an analysis by Morrison & Foerster attorneys Michael Zischke and Alicia Guerra. "It means that the standards cannot be given a presumptive effect that defeats the fair argument standard." The court invalidated a guideline that allowed a lead agency to approve a project without making findings of overriding considerations when the project is covered by a master or program EIR that found significant, unavoidable impacts. The court held that the public agency must adopt overriding findings every time. Many people read this part of the ruling as a requirement to prepare a second-tier EIR for any project covered by a master EIR with overriding considerations. But Alling, legislative director for the Association of Environmental Professionals, pointed out that the court did not explicitly say an EIR is required in such cases. Overriding considerations could be part of a negative declaration, he said, although he also called such an approach "very risky." The court upheld a guideline that provides a CEQA exemption for infill projects of less than five acres in urban areas if the project would not impact traffic, noise, air quality or water quality, and if the project complies with the general plan. While the exemption might appear too narrow to be of much use, some people see its value. "There are projects that get the go-ahead based on this," Rivasplata said. "But they may be small projects like a couple of units on one lot." Gorsen, now with Weston Benshoof, Rochefort, Rubalcava, MacCuish in Los Angeles, said some school projects could fall under this exemption. "So much of what they are doing is meeting class-size reduction mandates," she said. "They are not generating more trips or more students. So really the only impacts are construction impacts." Besides avoiding an EIR process that often lasts two years, school districts that use the exemption can also skip site assessments normally required by the Department of Toxic Substances Control, Gorsen said. The Resources Agency is following the formal administrative rulemaking process to erase the guidelines that the Third District struck. In the meantime, what should an agency that has relied on the now-invalid guidelines do? Rivasplata said that if the review period on an environmental document is complete, the lead agency should keep going. But if the agency can rework the document, it should, he urged. Last year, the Resources Agency and OPR completed a package of proposed guideline changes; however, officials held onto the proposal until the CBE case was decided. "Now that the court has ruled, we can move forward with a package of updates to the guidelines," said Terry Roberts, state clearinghouse director for OPR. Neither Roberts nor Resources Agency officials would say when the proposed revisions would be made public. Contacts: Terry Rivasplata, Jones & Stokes, (916) 737-3000. Curtis Alling, EDAW, (916) 414-5800. Charlie Bull, RECON, (619) 308-9333. Maureen Gorsen, Weston, Benshoof, Rochefort, Rubalcava, MacCuish, (213) 576-1000. Terry Roberts, Governor's Office of Planning and Research, (916) 445-0613.

A divided panel of the Ninth U.S. Circuit Court of Appeals has allowed two water districts and two farmers to sue the federal government for damages caused by changes in the management of the Central Valley Water Project, even though the districts and farmers have not yet experienced an injury. The decision appears to set an important precedent regarding when a party has the legal "standing" to seek compensation for damages. The court ruled that the districts and farmers need not wait until the new water management practices turned their water excessively saline before demanding compensation. "The injury alleged has not yet occurred; it is threatened," Justice Stephen Reinhardt wrote for the court. "Nevertheless, the possibility of injury may be sufficient to confer standing on plaintiffs; threatened injury constitutes ‘injury in fact.'" In 1992, Congress approved the Central Valley Project Improvement Act to address environmental concerns with the huge federal water project. The act required the Bureau of Reclamation to manage Central Valley rivers and streams to increase salmon populations; to dedicate 800,000 acre-feet of water to aid fish, wildlife and habitat restoration; and to develop a program to meet these goals in accordance with State Water Resources Control Board permits. Those permits, among other things, set a standard for salinity at the confluence of the San Joaquin and Stanislaus rivers known as the Vernalis standard. The Bureau then began releasing water for fishery habitat purposes from the New Melones Reservoir into the Stanislaus River during April, May and October — key months for fishery health. The Central Delta Water Agency, the South Delta Water Agency and two farmers within the districts sued the federal government in 1999. District Court Judge Oliver Wanger ruled that the agencies and farmers did not have standing to pursue their claims. But a 2-1 panel of the Ninth Circuit overturned the lower court's decision. The key issue for the Ninth Circuit was whether the water districts and farmers had suffered "injury in fact" because a hypothetical injury is not enough to establish standing. The farmers argued that the Bureau's method of operating New Melones Dam was highly likely to cause water salinity levels that violated the Vernalis standard, thus hampering their ability to grow crops. They pointed to a Bureau modeling study that predicted the new plan would cause the Vernalis standard to be violated at least one month a year in 41% of the subsequent 71 years. They further cited three Clean Water Act cases in which environmentalists were given standing, even though there was only a threat of actual harm to the environment in each case. The cases were Ecological Rights Foundation v. Pacific Lumber Co., 230 F.3d 1141 (9th Cir. 2000) (see CP&DR Legal Digest, December 2000); Friends of the Earth v. Gaston Copper Recycling Corp., 204 F3d 149 (4th Cir. 2000); and Friends of the Earth v. Laidlaw, 528 U.S. 167 (2000) (see CP&DR Legal Digest, February 2000). The federal government argued that those cases were inapplicable because they all involved ongoing violations of the Clean Water Act, and they only provided that violation of the statute was sufficient to confer an aggrieved party with standing. The court, however, found the cases on point. "Standing resulted not from the existence of an ongoing statutory violation, but because of the threatened future damage to plaintiff's environmental interests," Reinhardt wrote of the three cases. He then extended that reasoning to this case. " e conclude that the necessary showing for standing purposes is not that the Vernalis standard has already been exceeded or that plaintiffs' crops have already been damaged by excessively saline water, but that plaintiffs face significant risk that the crops that they have planted will not survive as a result of the Bureau's decisions to discharge water from the New Melones Reservoir during April, May and October, rather than when needed to meet the Vernalis standard," Reinhardt wrote. "The threat of injury resulting from the Bureau's employing an operational plan that will likely lead to violations of the Vernalis standard is sufficient to confer standing on plaintiffs." Because the farmers have standing, the agencies — which are charged under state law with protecting a dependable supply of high-quality water — have standing as well, the court ruled. The Ninth Circuit further ruled that the district court was wrong to block the lawsuit on the basis that previous administrative and judicial proceedings had settled the management of New Melones Dam. The Ninth Circuit held that earlier lawsuits did not address the same issue, namely the release of water pursuant to the Bureau's operation plan for environmental purposes. The Ninth Circuit returned the case to the lower court for further proceedings. In a short dissent, Judge Ferdinand Fernandez said the water districts and farmers had not proven the "invasion of legally protected interest" was more than hypothetical. "What is significant here is the fact that the United States has not violated any law, rule, regulation, or contract," Fernandez wrote. "Nor has it threatened that it will do so in the future." The Case: Central Delta Water Agency v. United States, No. 01-16172, 02 C.D.O.S. 10525, 2002 DJDAR 12140. Filed September 26, 2002. Amended October 21, 2002. The Lawyers: For Central Delta: Daniel McDaniel, (209) 465-5883. For the U.S.: David Shilton, Department of Justice, (202) 514-2000.