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.

A collection of San Joaquin Valley water technology companies is attempting to make Fresno the center of the "flow technology" world. Representatives of dozens of companies have been meeting regularly for nearly two years as part of the Water Technology Industry Cluster in hopes of boosting business and improving the San Joaquin Valley's economic status. The cluster and California State University, Fresno, are trying to attract dollars to build a center at the university for research and development, testing, certification, education and marketing. The cluster has also joined with Fresno City College and Reedley College on a work force training program. The effort has grown from a three-year-old study by Collaborative Economics for the Great Valley Center. The Palo Alto-based consultant found a number of indicators of poor economic health in the region. During the 1990s, construction and retail activity driven by rapid population growth was a major component of the regional economy. Yet the study reported that the labor force grew faster than jobs, and per capita income declined by about 5% in constant dollars from 1990 to 1997. The study recommended the region move away from being a low-cost center and join the technology-driven global marketplace. To do this, the study urged the cluster approach, in which businesses in the same field collaborate on many fronts. Consultants identified six "opportunity areas" for potential clusters, all of which they said were "nascent and require significant scale-up to create critical mass." The study's findings and recommendations gave San Joaquin Valley leaders something with which they could work. "The prognosis was the regional economy was only going to get worse," said Ashley Swearengen, executive director of the Central California Futures Institute at CSU Fresno. "We missed the last wave (of prosperity) and every indicator was that we would miss the next wave." With financial assistance from the Irvine Foundation, the cluster that has taken shape is in the field of water technology, which the study called "precision irrigation technology." Fresno State is already home to the Center for Irrigation Technology, and some of the world's leading companies in the area of moving, restricting, filtering and treating water are based in a region that stretches from Kern County to Modesto. Plus, many people see the provision, cleaning, recycling and conservation of water as a growing issue worldwide. The first cluster meeting was in April 2001. "I really thought it was kind of a dumb idea," said Claude Laval, whose company, Claude Laval Corp., makes filtration equipment. "Most of these people had not collaborated with each other. Most of them hated each other." Laval helped get people to attend the first meeting anyway. Since then, Laval has become a cluster co-chair. "It's better than waiting for some automobile manufacturer to build a factory in Fresno," he said. The semi-monthly meetings now draw 60 to 70 people from around the country. Meetings are not all hugs and kisses, but people are talking and finding more common ground than they knew they had. Members now speak of "cross-fertilization." Swearengen, who has helped get the cluster going, saw many "false barriers" because people in similar businesses had not communicated with each other. "The group felt very under-the-radar and very fragmented," she said. Once they started seeing what they had in common, cluster members established three priority areas: Work force preparation, export development and promotion (including joint marketing at trade shows), and one-voice advocacy. Much of the cluster's effort is tied to the proposed water tech center, and not only for improved research and development. Already, trade delegations from around the world visit the San Joaquin Valley because of its reputation for agricultural production, Swearengen said. However, to learn about the latest in water technology, those visitors have to go from farm to farm to see individual components. The water tech center would showcase the region's technical and manufacturing capabilities in one place. Fresno State has agreed to donate land for the center, and cluster leaders believe a requested $2 million federal grant will receive approval. If the federal money comes through, it will leverage private sector donations, Swearengen said. In the meantime, the work force program is moving forward. Cluster members agreed they had trouble finding certified welders, CNC machinists and maintenance mechanics. Manufacturing, noted Swearengen, is the heart and sole of the cluster. "This is an area of huge unemployment," said Laval, "but you can't find anybody that you need." The cluster is working with the two community colleges, which already have vocational programs but experience high drop-out rates, said Russ Densmore, a cluster member and vice president of operations for American AVK, which makes valves and fire hydrants. The cluster is setting up internships and work experience programs to encourage students to finish two-year vocational programs and to provide workplace skills. The cluster is focused on growing existing businesses, a strategy recommended in the original Great Valley Center study. Everyone involved agrees that growth will require greater export of products and technology. Some companies already have an international presence – American AVK is owned by a Danish holding company, for example — while others need help making connections overseas. And there is hope that new water tech companies will open in the region, and existing businesses located elsewhere will move to the valley. "We're already beginning to see people moving into this area because they see all of the testing and research facilities in the area," said Laval, who noted two small companies from Montana and Oklahoma have relocated. In the end, what cluster members want to see is more decent-paying jobs available in the region. Past economic development efforts have focused on call centers and logistics, which often pay little above minimum wage, noted Laval, a member of the Fresno Business Council. Certified welders typically command $20 to $25 per hour, he noted. Contacts: Ashley Swearengen, Central California Futures Institute, (559) 278-8433. Claude Laval, Water Technology Industry Cluster, (559) 255-1601. Russ Densmore, American AVK, (559) 452-4300. International Center for Water Technology website: www.icwt.net Economic Future of the San Joaquin Valley study: www.greatvalley.org/nvc/nvc_publications.aspx

The San Diego Redevelopment Agency can use a state law to require the owner of property the agency took by eminent domain to pay for cleanup of soil contamination, a state court has ruled. A unanimous three-judge panel of the Fourth District Court of Appeal, Division One, ruled that the city could recover remediation costs under the Polanco Act (Health & Safety Code § 33459 et seq.). The property owner, the Salvation Army, argued that the city could not recover costs because it did not follow requirements of the federal Superfund law (the Comprehensive Environmental Response, Compensation and Liability Act of 1980, or CERCLA). But the court ruled that the federal law did not prevent the city from recovering costs and that, in any event, the city did comply with the federal law."Contrary to Army's suggestion, the Polanco Act does not limit a redevelopment agency's rights to those available under CERCLA," Presiding Justice Daniel Kremer wrote for the court. The city's attorney, Richard Opper of Foley & Lardner, called the decision a "shot in the arm" for the Polanco Act. "California law has been unclear in its guidance on the market value of condemned, contaminated land," Opper said. "Now, there is approval for using the Polanco Act in coordination with eminent domain." The property in question is in San Diego's East Village Redevelopment District, where the city is constructing a downtown baseball stadium (see CP&DR Places, January 2002). In 1998, the city identified the Salvation Army's parcel as one the city needed to acquire, so the city included it in a phase I environmental site assessment of the area. A consultant identified a possible underground storage tank on the Salvation Army parcel, so the city requested the Salvation Army submit a remediation plan within the Polanco Act's 60-day time limit. The Salvation Army did not respond to the request or to a 30-day extension. In 1999, the county Department of Environmental Health approved the city's master work plan for cleaning up the redevelopment project area. In February 2000, the city filed a lawsuit against the Salvation Army to acquire the property through eminent domain. The following month, the Salvation Army submitted an assessment and remediation work plan to the county. But the city took possession of the parcel, which the Salvation Army did not dispute, in May. After demolishing the structures, the city found evidence of lead-contaminated burn ash. The city prepared a property mitigation plan for review by the county and the Salvation Army, and then did the cleanup work, including excavation and disposal of the contaminated soil. In 2001, the city and the Salvation Army settled on $550,000 – less any amount recoverable under the Polanco Act — as the price for the property and any damages the property owner suffered. San Diego County Superior Court Judge Judith McConnell (since appointed to the Fourth District bench) later concluded that the Salvation Army did not respond to the city's request for submission of a remedial action plan before the statutory deadline. Judge McConnell awarded the city $172,000 in remediation costs, plus attorney's fees and mediation expenses. The Salvation Army appealed. It argued that the Polanco Act's inclusion of CERCLA's "scope and standard of liability for cost recovery" limited the city's recoverable costs to those allowed under CERCLA. The Army further argued that the city did not follow the federal Environmental Protection Agency's implementing regulations for CERCLA (known as the "national contingency plan") because the city did not assess the threat to human health or the environment before proceeding with cleanup. The Salvation Army also argued that the city's disposal of soil was compelled by state waste laws, not because the soil threatened human health and the environment. The appellate court rejected these arguments. Foremost, the court ruled that cost recovery under the Polanco Act is different than under CERCLA. "The Polanco Act involves cleanup of the release of hazardous substances in the context of a redevelopment project," Justice Kremer wrote for the court. "The Polanco Act was enacted to provide a redevelopment agency with the means to require responsible parties to bear the costs of mitigating contamination on property within that agency's redevelopment project area." The Polanco Act's reference to the national contingency plan is intended to provide the city's redevelopment agency "with a basis for evaluating a proposed remedial action plan submitted by a responsible party in response to the agency's 60-day notice," the court ruled. The state law "does not make compliance with any portion of the national contingency plan a precondition for the agency's recovery of costs under Health & Safety Code § 33459.4. Instead, a redevelopment agency's entitlement to cost recovery under the Polanco Act depends upon the redevelopment agency's implementation of a plan approved by the designated regulatory agency overseeing the redevelopment plan." In this case, the county Department of Environmental Health was the designated regulatory agency, and it approved the city's plan. Besides, the court continued, the city did comply with the federal regulations by conducting a remedial investigation and preparing a feasibility study. Meanwhile, the Salvation Army "remained silent" through the whole process, Kremer noted. The city satisfied the conditions necessary for cost recovery under the Polanco Act by submitting a notice to the Salvation Army asking for a remedial action plan. The Salvation Army, meanwhile, submitted a remedial action plan and removed the underground storage tank more than a year after the statutory deadline for responding to the city's notice, Kremer wrote. The court also rejected the Salvation Army's contention that the city was only complying with state waste disposal laws. "Agency's master work plan and its amended property mitigation plan were both designed to protect the health and safety of construction workers and to prepare the property for future use," the court held. Additionally, the court held that the Salvation Army was a "responsible party" subject to liability, even though the city's cleanup occurred after the city took possession of the property. The Salvation Army qualified as the "present owner" because it owned the property when the city filed the eminent domain lawsuit. And, as the present owner, the Salvation Army was liable even if it did not cause the contamination, the court ruled. The Case: Redevelopment Agency of San Diego v. Salvation Army, No. D038835, 02 C.D.O.S. 11137. Filed October 21, 2002. Ordered published November 14, 2002. The Lawyers: For the city: Richard G. Opper, Foley & Lardner, (619) 234-6655. For Salvation Army: H. Douglas Galt, Woolls & Peer, (213) 629-8792.

WASHINGTON _ A deadlocked U.S. Supreme Court has upheld a $500,000 fine against a California developer for "deep ripping" about two acres of wetlands on a Central Valley ranch while converting pasture to vineyards and orchards. The justices divided 4-4 in an appeal by Angelo Tsakopoulos seeking to set aside penalties levied by the U.S. Army Corps of Engineers for violating provisions of the Clean Water Act that require a permit before filling or dredging waterways. Tsakopoulos, a prominent Sacramento-area housing and commercial developer, drew the fines for deep plowing wetlands that lay on parts of the 8,400-acre Borden Ranch about 30 south of Sacramento that he bought in 1993. The Corps of Engineers said the deep ripping — a process also called deep ripping, which involves heavy bulldozers dragging five-foot-long plow shanks through the soil — filled the wetlands with dirt, rock, and sand churned up from the densely packed "claypan" below the layer of arable soil. The high court's tie vote, announced in a one-sentence, unsigned opinion, resulted from the decision by Justice Anthony M. Kennedy to recuse himself from the case because of his acquaintanceship with Tsakopoulos and his family. The court does not announce individual votes in tie cases, but lawyers and observers surmised from questioning and past cases that the justices divided along conservative-liberal lines. The split has the effect of affirming a decision by the Ninth U.S. Circuit Court of Appeals upholding the fines (see , October 2001). Tsakopoulos and an array of industry groups had warned that the ruling went beyond the Corps of Engineers' statutory authority and could hurt farmers, ranchers, developers, mining companies, and road builders. Environmental groups said they were pleased with the high court's action even though the government's power to regulate deep ripping remains unresolved. "So far, so good," said John Echeverria, a professor and director of Georgetown University Law Center's Environmental Law Institute. "The Ninth Circuit ruling is upheld, the precedent remains in effect, and the battle is deferred to another case in which Justice Kennedy doesn't know one of the parties." "We're delighted," said Howard Fox, managing attorney with the environmental law firm Earthjustice. "There were a lot of industries in the Supreme Court asking for major loopholes in the Clean Water Act. We're already losing tens of thousands of acres of wetlands, and to have weakened the law further would have made that situation even worse." For their part, industry groups said they remain hopeful that the court will back their position in a future case. "We're disappointed that they didn't see things our way, but we were encouraged that they took the case," said Rick Krause, regulatory counsel with the American Farm Bureau Federation, which filed a brief supporting Tsakopoulos. "We think that that might mean they had a little bit of difficulty with the Ninth Circuit reasoning, and we're hopeful that after an appropriate case arises in the future that they'll take it and that all nine justices will be able to vote on it so that they will have a clear direction." In a prepared statement, National Association of Home Builders President Gary Garczynski attempted to find a positive outcome. "The speed and brevity of the high court's decision — a 4-4 split ruling delivered less than one week after oral arguments were heard, without Justice Kennedy's participation, with little precedential value and with no legal analysis — raises more questions than it answers," Garczynski said. "We are by no means discouraged by this split ruling." The deadlock was announced December 16, only six days after oral arguments at the high court. The justices' questions from the bench had indicated a possible division along ideological lines — leading lawyers on either side of the case to forecast a tie vote. In addition, the court had split 5-4 along ideological lines in its most recent wetlands regulation case just last year. In that case, , 121 S. Ct. 675 (see , February 2001), the court ruled that the federal government has no authority to regulate isolated ponds or wetlands. Kennedy joined the court's other four conservatives in the majority, while the four members of the court's liberal wing were in dissent. The legal question in Tsakopoulos's case turned on provisions of the Clean Water Act that require a permit from the Corps of Engineers for "any addition of any pollutant to any navigable waters from any point source." In urging the justices to strike down the fines against Tsakopoulos, Chicago attorney Timothy Bishop contended that deep plowing did not meet that statutory definition. "Deep plowing of that sort doesn't add fill or dredge material, and it doesn't involve a point source," Bishop argued. "We don't think it's permissible to protect wetlands by disregarding the words of the statute," he added. In turn, Assistant U.S. Solicitor General Jeffrey Minear argued that Congress used broad language to apply to "any unauthorized addition of a pollutant" to protected waters. "The most common form of dredging is moving material from one point of a body of water to another," Minear said. "Turning over material in place," he added, "does environmental harm." Krause, the farm bureau lawyer, said the group was most concerned with the possibility that the Corps of Engineers would claim authority to regulate any form of plowing despite an exemption in the law for "normal farming activities." In its brief, the government said the exemption did not apply because the deep plowing was intended to change the use of the land and had the effect of transforming the wetland areas to dry land. The home builders' association had been hoping for a ruling in Tsakopoulos's favor for use in a pending challenge to a general regulation issued by the Corps affecting builders. In that case, , NAHB is carrying on a 12-year-fight against the Corps' authority to regulate land clearing if it involves "incidental fallback" of soil into wetlands or other waterways. NAHB asked that the case — pending in federal district court in Washington — be put on hold pending the high court's decision in the Borden Ranch case. Bishop — who represented the Cook County solid waste agency before the Supreme Court — said he thought Kennedy's absence in the Tsakopoulos case had cost the landowner a victory. "Had Justice Kennedy been able to participate in this case, we quite likely would have won it," Bishop told the Associated Press. Echeverria called Bishop's assessment "a plausible guess," but "premature." "Kennedy is a swing vote in a variety of environmental cases," Echeverria said. "He just hasn't been heard from." The case: , No. 01-1243. Filed December 16, 2002. The attorneys: For Borden Ranch: Timothy S. Bishop, Mayer, Brown, Rowe & Maw, (312) 782-0600. For Corps of Engineers: Jeffrey P. Minear, Assistant U.S. solicitor general, (202) 514-2203.

Cliff Graves is special advisor to the chancellor at University of California, Merced. Graves has overseen many aspects of planning the Merced campus, which is the University of California's first new campus since the mid-1960s. The UC Board of Regents approved the Long Range Development Plan for the campus and an adjacent new community about two miles east of Merced in January 2002 (see , February 2002, , April 2001). Construction commenced in November, and the school is scheduled to open to its first 1,000 students in fall of 2004. Despite the state budget shortfall, the university has the funding to complete the first phase of construction. A planner for more than 30 years, Graves previously was the executive director of the San Francisco Redevelopment Agency. He spoke with Managing Editor Paul Shigley in mid-December. : Where are you in the process right now? GRAVES: The Long Range Development Plan was approved by the regents this past January. The EIR was subject to challenge and was challenged by a small group of environmentalists. The appellate court recently denied their request for an injunction, so we went ahead with construction. They are moving dirt like crazy out there right now. The other point, from a regulatory standpoint, is that the Fish and Wildlife Service gave us a ruling of "no jeopardy" for the entire project, not just for the part of the project we are working on now. Shortly, we will be going out to bid for the buildings themselves and the housing project. The first contract will be let in January. : How much is UC involved in planning the off-campus community? GRAVES: The regents are a 50% owner in the site where the planned community will be. The other partner is the Virginia Smith Trust, which provided the land for the campus itself. There is a joint venture between the two that's called the University Land Company LLC. The university is the managing partner for the project. : It has been a long time since UC built a new campus. Do you have a model for what you are doing? GRAVES: There really isn't a template for what we've done. When we built Irvine and Santa Cruz and San Diego, we didn't have any of the regulations we have today. It was a different time in terms of the fiscal relationships as well; whereas, those campuses had offsite infrastructure requirements, the state was willing to provide support for that. In this case, it's up to the university itself to make those arrangements. So the university has been negotiating, primarily with the city, to work those details out. : So where does money come from for off-site improvements? GRAVES: Eventually, it is going to come out of the campus budget, which is going to further stress the budget of the campus. An agreement has been reached with the city of Merced regarding sewer and water. And we're working with the State Infrastructure Bank. : Is this like planning a new town? GRAVES: In a purely physical sense, it is. But it's planning a town that has to meet the tests of the market. This is not an academic exercise. One of the challenges the LLC will face is coming up with a product that can work in the market that is part of the Central Valley. One the questions it has had to address is of the absorption rate. This new town is on bare land, so all the infrastructure has to be built. Typically, it requires a fairly rapid development rate to offset the costs of that. But the absorption rate is going to be slower than usual. So how they spread those costs out over a period of time is really a challenge. The campus's rate of development will, to some degree, govern the community's rate of development. And there are other areas in the Merced area that are planned for development. : Merced is a town of modest means. How does that influence your approach? GRAVES: It certainly has affected our negotiations with the city, especially regarding the infrastructure and how the city provides services to the campus. I tell people, this is not like BMW coming into Alabama. : The school will have to attract students and faculty. How big a consideration is that in the land use planning? GRAVES: That was a guiding principle of the Long Range Development Plan and something that even the regents insisted upon as they looked at the design of the original buildings. And the same kind of attention has to be given to the community. We want it to be attractive to a really broad, diverse group of people. One of the goals of the Long Range Development Plan was to provide a campus setting that feels comfortable to students who come from families in which no one has gone to college before. : When planning this campus, how far ahead do you look – 20 years? 40 years? GRAVES: The Long Range Development Plan has a window of 25 years. When you start a campus, you don't set everything in concrete for 25 years. You understand technology may change, research may change. So you want something that is usable now but sustainable over time. We're relying on a strong grid system, some fundamental design that is timeless, and we're relying very heavily on landscaping as a unifying factor. We are building the campus two or three buildings at a time, and we definitely expect the buildings 15 years from now to be based on assumptions that we don't have today. Even such things as water treatment we are building in modules to accommodate new technology. : That must be difficult. GRAVES: Yes, it is, because you have to trade off between economies of scale and the realities of changing technology. We are assuming the next wave of buildings will be using fuel cell technology. We considered that for the first phase, but it just wasn't ready. For all we know, by year 15 or 20, another technology for energy production will be available, and we want to be able to adapt to that as well. : Is planning the campus and community enjoyable? GRAVES: Oh, it's enjoyable. How many planners get to do something like this? We're not correcting somebody else's mistakes. We're making the mistakes. I did my thesis eons ago on planning new towns in California. I went back and read it and found out how naïve I was.

A city's erroneous denial of a lot line adjustment application did not qualify as a temporary taking, the First District Court of Appeal has ruled. The court ruled that the City of Lafayette had legitimate reasons for handling the application the way it did and that the delay in approval of the application — which eventually was ordered by a trial court — was not unreasonable. The appellate court relied heavily on Landgate, Inc. v. California Coastal Com., (1998) 17 Cal.4th 1006 (see CP&DR Legal Digest, June 1998), in which the state Supreme Court held that the erroneous handling of a development application was not a temporary taking unless the government acted unreasonably. "This case fits like a hand in a glove with the rule established by Landgate," Presiding Justice James Marchiano wrote for the unanimous three-judge panel of the First District, Division One. "Resolution of the threshold issue of the legality of the lot line adjustment was a normal delay in the process of obtaining a permit pertaining to land use." The property owners in this case, Peter and Helen Loewenstein, built a house on a 3-acre parcel in Lafayette during the mid-1980s. A few years later, they investigated ways to build a second unit. The conditions of approval that went with the original four-lot subdivision that created their lot prohibited establishment of another parcel. So in early 1996, the Loewensteins purchased a 4,500-square-foot parcel where the East Bay Municipal Utility District had maintained a water tank. A corner of that parcel touched a corner of the Loewensteins' parcel. Then they reached an agreement to acquire a small portion of a neighbor's parcel so that that tank parcel would share a common boundary with their original lot. In September 1997, the Loewensteins applied for a three-way lot line adjustment to create a 1.07-acre parcel for their home, and a 2.12-acre parcel that included portions of three existing lots. The city's planning manager denied the application, a decision the Planning Commission upheld. The City Council conducted three hearings before adopting a resolution denying the application. The council determined that, by adjusting the lot line to make a fifth developable lot, the Loewensteins triggerred the city's subdivision regulations and the Subdivision Map Act. (The Map Act does not apply ordinarily unless one parcel is being divided into at least five new parcels.) The council reasoned that the fifth lot would be serviced by infrastructure constructed for the original four-lot subdivision. In September 1998, the Loewensteins sued, seeking to overturn the denial and to get damages for inverse condemnation. The case went through lengthy court proceedings overseen by no fewer than three Contra Costa County Superior Court judges. Ultimately, the court ordered the city to rescind its denial of the application, found that the city used the wrong standard to evaluate the proposed lot line adjustment, ruled that the city denied the Loewensteins "substantially all economically viable use of their property," and awarded the applicants $611,000, plus attorneys' fees. In November 2000, the city rescinded its denial. The city also appealed the judgment for damages and attorneys' fees, which the appellate panel reversed in part. The Loewensteins cited two cases: San Dieguito Partnership v. City of San Diego (1992) 7 Cal.App.4th 748 (see CP&DR Court Cases, August 1992), and Ali v. City of Los Angeles, (1999) 77 Cal.App.4th 246 (see CP&DR Legal Digest, February 2000). In San Dieguito, the court ruled that the city had used the wrong basis for rejecting a lot line adjustment application that reconfigured five parcels in a nine-lot subdivision. In Ali, the court ruled that a temporary taking had occurred because the city's refusal to grant a demolition permit was arbitrary and unreasonable. Loewensteins further argued the they qualified for the Landgate exception for unreasonable delays, pointing to the fact that the city had approved more than 200 lot line adjustments over 16 years. But the appellate court ruled that San Dieguito and Ali did not apply, that Landgate was the controlling precedent and that the Loewensteins' case did not qualify for the Landgate exception. "The city's reasons for rejecting the lot line revision application, as expressed in the official resolution, were based on concerns that the reduced area of the new parcels would not conform to the minimum lot size requirements for hillside lots, and that the application created a fifth lot in a duly restricted subdivision with improvements and utilities designed for four lots," Justice Marchiano wrote. "Even if the city incorrectly maintained that lot size and subdivision restrictions applied, the monitoring of the density and hillside slope requirements are legitimate government interests." The court also expressed skepticism at the Loewensteins' approach. "To avoid the city's concerns about building a fifth home, the Loewensteins argued they were not merging the tank parcel into the subdivision lot, but were pulling a section of the original lot out of the subdivision and placing it into the tank parcel," Marchiano wrote. "These fine distinctions, although accepted by the trial court's ruling that the city's view was wrong, do not make the city's valid concerns either legally unreasonable nor logically deficient." The Loewensteins argued that under the Penn Central takings criteria (Penn Central Transp. Co. v. New York City, (1978) 438 U.S. 104), the city's action qualified as a compensable taking because the delay interfered with their reasonable investment-backed expectations. But the court ruled that if Landgate applied, Penn Central could not. "A landowner can have no reasonable expectation that there will be no delays or bona fide differences of opinion in the application process for development permits," the court ruled. The court overturned the $611,000 takings judgment but allowed the Loewensteins to keep the attorneys fees awarded by the lower court. The First District did not consider the lower court's order to approve the lot line adjustment. The Case: Loewenstein v. City of Lafayette, No. A093590, 02 C.D.O.S. 11130. Filed November 13, 2002. The Lawyers: For Loewenstein: David Bowie, Bowie & Bruegmann, (925) 939-5300. For the city: E. Clement Shute Jr., Shute, Mihaly & Weinberger, (415) 552-7272.

California does not build many freeways. So as Caltrans has opened segments of the Interstate 210 freeway in Los Angeles and San Bernardino counties, the road has received an unusual amount of attention — especially regarding how the state actually built the freeway and what impact it will have on traffic congestion. The new segments of Interstate 210 runs parallel to Foothill Boulevard at the base of the San Bernardino from San Dimas, in Eastern Los Angeles County, about 20 miles to Rialto. Completion of the final eight miles to I-215 in San Bernardino is a few years away. But the most interesting, and easiest to overlook, aspect of the 210 Freeway's construction is the fact that it has altered the role of a major arterial street through a series of suburbs. For decades, Foothill Boulevard carried tens of thousands of commuters every day because the 210 dead ended on Foothill in the City of La Verne, and the nearest east-west freeway, I-10, was notoriously slow. When Caltrans completed the 210 freeway from Highway 57 in San Dimas to I-15 and into Fontana in November, much of the commute traffic disappeared from Foothill Boulevard. Most of the cities along the route — from west to east: La Verne, Pomona, Claremont, Upland and Rancho Cucamonga — see the traffic change as an opportunity to remake Foothill Boulevard in a fashion more friendly to businesses, shoppers and residents. Several officials have already noticed trade increasing at Foothill Boulevard establishments because locals can drive to the businesses during commute times without getting stuck in traffic jams. The cities have not coordinated their strategies and each city is approaching the issue a bit differently. La Verne, Upland and Rancho Cucamonga have been the most aggressive so far. La Verne has continued to implement a specific plan, Upland is following up on recommendations in a 2001 economic study, and Rancho Cucamonga is seeing the largest project in town get developed along Foothill. Some officials are also hoping that new freeway interchanges will spur economic growth in their cities. The market needs study and revitalization plan commissioned by Upland made clear the hurdles for overhauling Foothill Boulevard are high. The street is marked by numerous struggling commercial centers, vacant storefronts and, in places, a run-down feel. At the same time, most of the cities have other areas available for retail and office growth; moreover, the cities compete with each other for businesses that generate sales tax. The report by Economic Research Associates and Barrio Planners states, " here is an evident, visually obvious clear need for the transition of Foothill Boulevard property uses based on the presence of more than 200,000 square feet of vacancies, mostly caused by departed supermarkets, and more recently added to by the abrupt decline of tenancies at the east end of the city … where another 100,000 square feet is in the process of becoming vacant." The study predicted a turnaround would take five to seven years. While the study focused on the 4.1 miles of Foothill Boulevard in Upland, the findings apply to stretches of the thoroughfare in other cities, too. Upland undertook the study because the city sees the boulevard as an important asset, said Steven Dukett, Upland redevelopment director. The street's strength, especially now that the commute traffic is gone, is as a center of neighborhood commerce, he said. Since the study was completed in August 2001, Upland has adopted an incentive program, and has taken steps to annex an island of unincorporated territory along Foothill, which Dukett said has not been developed to city standards. The city intends to follow up annexation with creation of a new redevelopment project area. City officials also are working on a general plan amendment that will allow residential uses along Foothill. The general plan amendment should be in place this spring. "We have engaged in some open dialogue with property owners who have shopping centers with major numbers of vacancies," Dukett added. "We certainly didn't have that dialogue before." The city has also had some successes, as both Lowe's Home Improvement Center and Vons have opened new stores on Foothill during the last year. The Lowe's is in the western part of Upland, near Claremont, from which Upland officials hope to draw shoppers. Claremont has not yet developed a strategy for the newly unclogged Foothill Boulevard. "We're going to be doing some pretty extensive testing of traffic flows in January and February," said Scott Miller, Claremont economic development and redevelopment manager. Foothill through Claremont has been in a redevelopment project area since the 1970s. However, the street still sports a large number of underutilized parcels and buildings, and tax increment from the project area is flat, Miller said. Much of the development feels worn, especially on the west end, he said. Like Claremont, neighboring Pomona has done little planning for the new conditions on Foothill Boulevard, instead focusing attention on its downtown several miles to the south. In contrast, La Verne adopted a specific plan for Foothill Boulevard in 1989 and updated the plan 10 years later. For La Verne, Foothill Boulevard is the primary commercial corridor; Claremont and Pomona have shopping malls and commercial centers elsewhere. La Verne's detailed plan addresses everything from land uses and circulation to architecture, landscaping and public art. The latest version permits greater flexibility in commercial and office development, expands the permissible architectural styles, and encourages development closer to the street itself and less on-site parking. Farther east lies Rancho Cucamonga, which has undertaken significant infrastructure improvements along Foothill Boulevard as part of a 20-year-old redevelopment project. Rancho Cucamonga also has approved a huge retail, office and residential development on the north side of Foothill Boulevard at I-15. The 150-acre Victoria Gardens project will feature a "Main Street" shopping and entertainment district, major retailers and extensive multi-family housing. The city is also working with the developer, Forest City Development, on building a library, performing arts theater and events center. For now, the new freeway dumps motorists on the streets of Rialto, a city that lies between the I-15 and I-215 freeways. The city is "just coping" until Caltrans completes frontage roads to handle the through traffic, said Development Services Director Michael Story. Much of Rialto's vacant land lies along the freeway route, and encouraging development in that part of town has been difficult because of poor access, Story said. Four new freeway interchanges will change that. "It's really going to be a benefit," he said. Contacts: Steven Dukett, City of Upland, (909) 931-4103. Scott Miller, City of Claremont, (909) 399-5341. Michael Story, City of Rialto, (909) 820-2535.

A POTENTIAL Southern California water crisis reached new heights in December when the Imperial Irrigation District (IID) Board of Directors rejected a plan to sell roughly 6% of its Colorado River water allotment to the San Diego County Water Agency. "Without water, Imperial Valley is nothing," IID Board President Stella Mendoza said during a heated meeting at which the board voted 3-2 to reject a deal that had been months in the making. The deal was seen as key to the state reducing its reliance on Colorado River water that will not be available in the future because other states want to take their full shares of the water (see , December 2002). Interior Department officials said they would reduce California's use of the river starting this month unless last-minute negotiations made substantial progress. "Interior is not bluffing," agency Secretary Gail Norton told a Colorado River Water Users Association meeting in mid-December. "There will be an actual reduction." A reduction could have the biggest immediate impact on the Metropolitan Water District of Southern California, which has come to rely on 662,000 acre-feet of Colorado River water that has been "surplus." However, federal, state and some water agency officials said it is IID — which gets about three-fourths of the state's share of Colorado River water — that could feel the pain in the end. To which IID officials said, "See you in court." AFTER three days of testimony, the Ventura County Board of Supervisors voted 4-1 on December 18 to certify a supplemental environmental impact report and record a master tract map for the Ahmanson Ranch project. In winning tract map approval, developer Washington Mutual agreed to destroy one water well on the site that is contaminated and to cap or destroy other wells. The vote ended the latest chapter in one of the longest and most controversial development sagas in recent Southern California history (see , December 2002). A general plan amendment and development agreement for the 3,000-home project were approved by the board, also on a 4-1 vote, in December of 1992. Since that time, new rare species have been found on the site and opponents have raised concerns about the discovery of perchlorate in at least one well that might serve the project. High-profile Los Angeles environmentalists, such as movie director Rob Reiner and actor Martin Sheen, have continued to oppose the project, rallying high-level opposition nationally. In the most recent round of hearings, former President Bill Clinton placed a call of opposition to Ventura County Board of Supervisors Chairman John Flynn, and Carole Browner, Clinton's environmental protection administrator, testified against the tract map approval. After the vote, project opponents indicated they would probably sue to challenge the approval but also expressed renewed hope that Washington Mutual would sell the property to a state agency for open space. CENTRAL Valley farmers will hang onto their exemption from state water quality regulations for runoff for at least three more years. The Central Valley Regional Water Quality Control Board in December dropped a regulatory plan that would have ended the agricultural industry's 20-year exemption. Instead, the board backed a plan that calls for voluntary monitoring and reduction of pesticides. The board also said it would revisit the topic this year. The decision angered environmentalists, who threatened litigation. Industry representatives sounded moderately pleased but said they wanted to see the details of the board's plan. FORMER Carson Mayor Pete Fajardo has pleaded not guilty to a charge that he extorted $50,000 from an apartment complex owner who sought the city's assistance in converting the units into low-income senior housing. Fajardo was indicted by federal authorities in late November, as were current Carson Mayor Daryl Sweeney, two Browning-Ferris employees and a bankruptcy trustee. Most of the scandal involves alleged corruption related to waste-hauling contracts. Prosecutors also alleged Fajardo tried to extort $70,000 from a contractor on a city bridge-building project. THE Orange County Planning and Development Services Department decided to lay off 39 employees starting this month because financial troubles have swamped the agency. At least six senior-level planners and one-third of the county's building inspectors will lose their jobs. The job cuts came after county officials revealed the agency spent an $18 million "reserve" during the last three years and had a deficit of at least $2.5 million this fiscal year. Department Director Thomas Mathews, who blamed the deficit on a construction slow-down, proposed raising building permit fees by about 50%. But Orange County supervisors declined to hike fees until they received more answers about the agency's fiscal situation. A STUDY by the National Center for Public Policy Research's Center for Environmental Justice contends that Portland-style "smart growth" restrictions raise the cost of housing, encourage "suburbanization" and do not reduce automobile travel. The study says that more than one million "young and disadvantaged" families would not have been able to buy homes during the last 10 years if Portland's growth policies applied to major metropolitan areas nationwide because prices would have risen an average of $10,000 in 2002 dollars. The study, by Portland-based economist Randall Pozdena, reads like an indictment of the Portland approach, which places an urban growth boundary around the metropolitan area. "Insidiously, the burden of site-supply restrictions will fall disproportionately on poor and minority families," he writes. The study, called "Smart Growth and Its Effects on Housing Markets: The New Segregation," is available at www.nationalcenter.org. The National Center study came on the heels of a report by the Latino Issues Forum that recommends California and its local governments adopt a number of "smart growth" measures that the organization believes would boost Latino homeownership. The report by Massachusetts Institute of Technology urban studies and planning professor Michael Mendez urges establishment of jobs-housing linkage programs, increased redevelopment funding set-aside for affordable housing, laws that require 20% of all developments to be for low- and moderate-income people, a stronger housing element law and state-local fiscal reform. "Smart growth allows for the development of communities where individuals and future generations can achieve economic security, social well-being, and a higher quality of life, while preserving the ecological integrity of the region," the report states. The study, called "Achieving Equity: Reality and Prospects of Latino Homeowners in California," is available at www.lif.org/publications/reports.html. A NEW zoning ordinance that permits developments to have with retail businesses, neighborhood services and child-care facilities on the ground floor, and housing on upper floors, has received approval from the Los Angeles City Council. The mixed-use ordinance, which stemmed from recommendations by a housing task force, eliminates the need for developers to get variances for such projects. The city now must decide where to apply the new zoning. THE Fresno City Council has adopted a general plan that focuses growth in and near the existing city. Although not as aggressive as earlier proposed, the blueprint directs 80% of growth through 2025 inside the city's existing sphere of influence (see , September 2000). A PLAN that would athorize construction of six new gates and allow more passengers and flights at John Wayne Airport in Orange County was approved by the county and the City of Newport Beach in December. The plan essentially would extend a 1985 court settlement regarding airport operations. The plan would allow passenger growth of 25% to 10.8 million annual passengers by 2011. It also would permit an increase in gates from 14 to 20, and allow 16% more flights per day. The plan still needs Federal Aviation Administration approval. A SEAL Beach housing development was shut down by the California Coastal Commission until developer John Laing Homes and American Indians can reach an agreement on how to deal with 22 graves discovered during construction last year. Work on the 70-home project halted in September, when Indians and archaeologists confronted construction workers. Commission Executive Director Peter Douglas quickly issued a cease-and-desist order. Now the project is on hold until the commission approves a mitigation plan.

As 2002 was drawing to a close, forecasters with the National Oceanic and Atmospheric Administration announced that warming of the western Pacific heralded the arrival of an El Niño weather pattern. The influence of this periodically recurring phenomenon usually means heavier-than-usual winter rains for California. But even if California gets more than its average precipitation this winter, water scarcity — or at least the possibility of it — will dominate the state's environmental agenda during the next 12 months. Also high on California's agenda this year will be renewed conflict in the state's forests, and a debate over protections for wilderness and rivers. California's policymakers always obsess about water. It is the inevitable consequence of the state's mismatch between demography and geography. Still, several events coincide this year to give water policy even more prominence than usual. In the immediate future, water planners have to confront fallout from the December debacle in El Centro, where three members of the Imperial Irrigation District (IID) board left 17 million Southern Californians in limbo by rejecting a tortuously negotiated deal — endorsed by many of the valley's farmers — to sell water to the San Diego County Water Authority (SDCWA) and thereby enable the Metropolitan Water District (MWD) to continue receiving temporarily surplus Colorado River flows (see Page 1, , December 2002). Whether or not the IID-SDCWA deal goes through, and regardless of whether the federal government makes good on its threat to turn off the surplus tap, the high-stakes game of chicken between the IID board and the urban water agencies that covet IID's water foreshadows a troubled future. Similar conflicts will likely spread statewide in coming months as growing cities and suburbs try to slake their thirst by purchasing agricultural water in the problem-plagued transfer market. Even as MWD and SDCWA were getting stung by the IID, for example, the Met was hedging its bets by negotiating a contract to buy 205,000 acre-feet of water from Sacramento Valley irrigation districts. Several districts appear interested, and one — the Western Canal District of Richvale, which serves mainly rice growers in Butte County — has tentatively agreed to sell 26,060 acre-feet. That deal could be finalized this month, but there are rumblings of discontent similar to those that proved decisive in Imperial County and which will inevitably accompany any effort to move water from farms to cities. Agriculture-dependent communities fear that selling water means fallowing land, and reduced farm activity means less money flowing into the local economy in the form of wages and expenditures on equipment, fertilizer, pesticides and other products. The focus on water during the coming year is likely to intensify for two other reasons. One is the demise in the waning days of the 2002 congressional session of a Cal-Fed re-authorization and funding bill (the Senate approved the bill, but the House did not). The Cal-Fed failure leaves uncertain the federal commitment to the mammoth multi-agency effort, which is intended to revitalize the ailing San Francisco Bay-Delta complex — source of two-thirds of California's water supply. That issue will be back on the table this year. The other event likely to focus attention on water is the scheduled 2003 release of the latest update to the California Water Plan, the state's comprehensive forecast of supply and demand. Revised every five years and intended to serve as a framework for decisions by the state's water managers, the plan this time will include a major component focusing on the effect of global climate change on California's water supply. That evaluation is expected to offer little comfort to planners already unnerved by population projections, urban-rural squabbling and the infirmities of the state's aging plumbing system. A preview of sorts was provided in late November by a team of researchers from the Scripps Institute of Oceanography, the University of Washington, the U.S. Department of Energy and the U.S. Geological Survey. Their modeling, which used temperature data to predict likely changes in precipitation and runoff patterns for three major river systems in the West — the Columbia, Colorado and Sacramento — suggests a dramatic reduction in winter snowpack and an increase in winter rainfall. That will mean less water flowing into reservoirs from snowmelt during dry months, but more pouring in during flood-prone winter months when there is no room to store it. Rivers are the centerpiece of another issue affecting California during the next 12 months, as U.S. Sen. Barbara Boxer seeks support for a major wilderness bill. Her California Wild Heritage Act, S. 2535, would designate 43 new federal wilderness areas in the state totaling 1.2 million acres, add 1.2 million acres to existing wilderness areas, bring another 473 miles of streams under protection as "wild and scenic" rivers, and establish several other conservation and study areas. Companion measures were introduced in the House by Reps. Hilda Solis (D-El Monte) and Mike Thompson (D-Napa). Only one piece of legislation in state history has encompassed more wilderness acreage: Sen. Dianne Feinstein's California Desert Protection Act of 1994. When the wild and scenic rivers component is added, Boxer's bill ranks as the most far-reaching California wilderness bill ever introduced. Although the state Legislature and numerous environmental organizations have endorsed the bill, many rural counties oppose it. More importantly, Boxer's proposal will face scrutiny from a Congress in which key committees are dominated by Republican lawmakers unsympathetic to environmental legislation; even if the bill should leap that substantial hurdle it would land on the desk of a president who is unlikely to sign it. California also is likely to be among the first states to feel the effects of the Bush administration's move to speed "thinning" operations in national forests to reduce wildfire danger. Announced in early December — just two weeks after the administration proposed new regulations allowing individual forest managers to adopt long-term management plans without subjecting them to lengthy public environmental reviews — the proposed thinning regulation would exempt brush and tree removal from environmental review and challenge if undertaken to reduce fire danger. Both proposed sets of forest regulations could be in place by summer. The National Forest Service has identified 10 sites nationwide for pilot thinning projects, two of which are in California's Mendocino and El Dorado national forests. The proposals have been denounced by environmental groups, which say the Bush Administration is using an exaggerated threat of fire as an excuse to circumvent the National Environmental Policy Act and open national forests to commercial logging without proper evaluation or public input.