Valery Pilmer, a former San Bernardino County land use services director, pleaded no contest to a misdemeanor charge of stealing a public document. Under the plea agreement with the county district attorney's office, Pilmer was sentenced to 300 hours of community service and retired from county employment effective October 15. Pilmer was indicted earlier this year on four felony counts relating to hiding, altering or destroying public records and lying about it in a sworn statement. The charges stem from the district attorney's long-running investigation of Rail-Cycle, a proposed Mojave Desert landfill. (See CP&DR, March 1999, December 1997, October 1997) Pilmer's attorney, Dennis Kottmeier, told the San Bernardino Sun that Pilmer did nothing wrong and that she accepted the plea agreement simply to get the matter behind her. Pilmer had been on administrative leave since the indictment. Meanwhile, the Rail-Cycle case — which allegedly involved fraud, wiretapping, burglary and other illegalities in an attempt to win approval for and open the landfill — appears to have bogged down. Some or all charges have been dismissed against four employees of project proponent Waste Management and a contract county worker. Also, a Superior Court judge ruled that prosecutors allowed their key witness to lie to a grand jury.

A six-year dispute between Shasta County and the new City of Shasta Lake regarding tax revenue has been decided in favor of the city. The Third District Court of Appeals upheld nearly all aspects of a ruling issued during binding arbitration by retired Siskiyou County Superior Court Judge James Kleaver. The appellate court said the city, which incorporated on July 2, 1993, has the right to receive Proposition 172 sales tax revenue and that the Proposition 172 revenue should offset the amount the county charges for providing law enforcement services. The appellate court — in an unpublished part of the opinion — overturned Kleaver only on the matter of whether the city owed the county interest on a portion of payments in dispute. The decision means the county must pay the poor city of 9,300 residents about $1 million. The appellate court decision, penned by Acting Presiding Justice Coleman Blease, came on a 2-1 vote. Justice George Nicholson said the court should dismiss the appeal because the court did not have jurisdiction to review a decision made in binding arbitration. Prior to incorporation, the Shasta County Local Agency Formation Commission performed a fiscal analysis that determined the proposed incorporation would result in a net gain for the county general fund of about $200,000 annually. Still, the county pressed LAFCO to reconsider the conditions of incorporation. The result was a mitigation agreement between the county and the city's predecessor, the Shasta Dam Area Public Utilities District. Almost immediately, the county and city began disputing the terms and conditions of the mitigation agreement. They stipulated to binding arbitration before retired Judge Kleaver. He ruled that revenues from Proposition 172 — a half-cent sales tax approved after the state had shifted property taxes from counties and cities to schools — should be treated as property tax revenue under terms of the agreement and they should offset a portion of the county's cost of providing sheriff's services to the new city. On appeal, the county argued that the mitigation agreement referred only to actual property taxes, not to property taxes plus replacement revenues, such as Proposition 172 sales taxes. But the court said money is money. "The court must determine whether the measure of the payment is the amount of property taxes which the County retains, as the County contends, or the amount of property tax benefit which the County receives, i.e., the property tax retained by the County plus replacement revenue given in lieu of property tax diverted by the state," Justice Blease wrote. "Since the declared purpose of the payment is to mitigate the so-called negative effect occasioned by property tax losses resulting from the incorporation, the City's candidate is the more reasonable. There is no incremental negative fiscal effect on the County attributable to the diversion of property tax revenue by the State to the extent that it receives either property taxes or replacement revenues." As for payment for law enforcement services, the court interpreted a law enforcement services agreement (LEA) between the city and county. The county argued that the agreement allowed the county to charge the city for the "entire cost" of sheriff's services within the city limits for the 1993-94 fiscal year, the city's first year of existence. The city contended it should be credited for revenues generated from inside the city limits but retained by the county, including Proposition 172 funds. The court determined that under the LEA the county could charge the entire cost of services only if the city had requested that the county discontinue the service. The city did not make that request, the court said. The court also ruled that the phrase "entire cost" in the LEA means the same thing as "net cost" under Govt. Code §57384, which addresses the subject of county services to a new city, the court said. The court also interpreted that section to say that the city should receive credit for Proposition 172 funds. "Such revenues were ‘generated' in the formerly unincorporated territory, even though the allocation of Proposition 172 revenues is not situs-based," Justice Blease wrote. "Proposition 172 revenues are allocated to cities according to the amount of property tax revenue diverted to ERAF. (§30054.) This is a calculable amount, and is an amount ‘generated' by the City." The Case: City of Shasta Lake v. County Shasta, No. C029036, 99 C.D.O.S. 7859, 1999 Daily Journal D.A.R. 9954, filed September 12, 1999. The Lawyers: For Shasta Lake: John Kenny, Moss & Enochian, (530) 225-8990. For Shasta County: Michael F. Dean, Kronick, Moskovitz, Tiedemann & Girard, (916) 321-4500.

A 5,855-square-foot retail and office building proposed for downtown Mill Valley is exempt from environmental review under revised California Environmental Quality Act Guidelines, the First District Court of Appeals has ruled. The court ruled that buildings of up to 10,000 square feet proposed for an urban area may be exempt from CEQA review. In the Mill Valley case, the court concluded that the project opponent did not prove the existence of any "unusual circumstances" that would preclude the exemption. Interestingly, in the unanimous opinion for the three-judge panel, Justice Patricia Sepulveda said that the project probably did not qualify for an exemption when the city processed the application in early 1998. The proposed structure's occupant load would have been too large to qualify for an exemption. But the new Guidelines for Implementation of CEQA (Cal. Code Regs., tit. 14 §15000 et seq.) adopted by the Secretary of Resources in October 1998 "extended the exemptions to some structures that would not have been covered" by the previous version. Lawyers on either side said they believe this case is the first court interpretation of the year-old CEQA Guidelines. Craig Labadie, the city's attorney, called the ruling helpful because it clarifies the square footage limitation for exempt projects. But the attorney for the project opponent said she would seek a rehearing because the issue of applying the revised Guidelines retroactively was never briefed. Attorney Laurel Stanley also noted that the appellate court upheld her client's argument regarding occupant load. "I think we deserve the chance to get back to the trial court, at least on the issue of attorneys fees" because the appellate court agreed with her primary argument, she said. But Labadie said the project opponent won nothing. "The court said we did not violate CEQA, we did not violate our general plan, and we did not violate the parking ordinance. I'd say that's a win for us," Labadie said. This proposal to construct new commercial buildings in downtown Mill Valley first reached the city in early 1996. The applicants, Jack Lee and Christine Lum, proposed demolishing one building, expanding a parking lot and converting a retail building to office use. The city approved the project, but the applicants never built it. Instead, they returned one year later with more extensive development plans. The Planning Commission recommended approval, but the City Council requested revisions. The applicants on January 9, 1998, submitted plans for one retail/office building of 5,855 square feet on a portion of a parking lot behind an existing commercial building. The Planning Commission again endorsed the idea but sought clarification on some issues, including CEQA review. On April 6, 1998, the City Council unanimously approved the project with 31 conditions. The next day, the city filed a notice of exemption from CEQA under Guidelines §§15301, 15302(b), 15303(b) and (c), and 15061(b)(3). One month later, project opponent Patricia Ann Fairbank filed a petition for writ of mandate to overrule the exemption. But Marin County Superior Court Judge Vernon Smith ruled for the city. Smith found that the project qualified for an exemption under §15303(c), that Fairbank did not "produce substantial evidence to show a reasonable possibility of adverse environmental impact," and that the city had followed its codes for the grandfathering of nonconforming parking facilities. The appellate court upheld Judge Smith's ruling but used different reasoning. Fairbank argued that for the city to give this project a "Class 3" exemption, the building could not have an "occupant load" of more than 30 people as determined by the Universal Building Code. Fairbank argued that with 3,130 square feet of office space and 2,725 square feet of retail space, the proposed building would have an occupant load of 122 people. The City, however, argued that the Guidelines neither defined "occupant load" nor name the UBC as the authoritative source. The appellate court sided with Fairbank by concluding that commercial buildings were "required to meet the UBC's ‘occupant load' standard in order to enjoy a Class 3 exemption from the requirements of CEQA. If that were the end of our inquiry," Justice Sepulveda wrote, "we would almost certainly have to reverse the trial court's decision on the Guidelines §15303(c) exemption." Unfortunately for Fairbank, the court did not stop there. Rather, the court noted that the revised Guidelines eliminated references to "occupant load" and based the exemption solely on square footage. "Thus," Sepulveda wrote, "under Guidelines §15303(c), as amended in 1998, the Class 3 exemption applies to ‘ store, motel, office, restaurant or similar structure … not exceeding 2,500 square feet in floor area' and ‘ n urbanized areas … up to four such commercial buildings not exceeding 10,000 square feet on sites zoned for such use.'" Fairbank argued that the revised Guidelines meant any single structure of more than 2,500 square feet was not exempt. In an interview, Fairbank's attorney, Stanley, called the wording in the Guidelines confusing. "I do think there is a difference between a single building of 10,000 square feet and four individual buildings of up to 10,000 square feet," Stanley said. But the court found the wording clear. "The most plausible reading of current Guidelines §15303(c), as amended in October 1998, is that a commercial project to be built in an ‘urbanized area' may be found to be exempt if it involves the construction of one, two, three or four commercial buildings on a parcel zoned for such use, so long as the total ‘floor area' of the building(s) does not exceed 10,000 square feet," Sepulveda wrote. Fairbank also argued that the project did not qualify for an exemption because it lacked adequate parking and would impact traffic circulation. But the court said Fairbank needed to show that this was an "unusual circumstance" that could significantly affect the environment. "While the addition of any small building to a fully developed downtown commercial area is likely to cause minor, adverse changes in the amount and flow of traffic and in parking patterns in the area, such effects cannot be deemed ‘significant' without a showing that some feature of the project distinguishes it from any other small, run-of-the-mill commercial building or use," the court said. "Otherwise, no project that satisfies the criteria set for in Guidelines §15303(c) could ever be found to be exempt." In an unpublished portion of the opinion, the court shot down Fairbank's arguments concerning cumulative impacts on parking and impacts to the O'Shaughnessy Building, which Fairbank called historic. The court said Fairbank failed to make a "fair argument" regarding parking and the court found that the city acted consistently with its parking ordinance. The court said that although Fairbank cited comments regarding the O'Shaughnessy's historic character, the building is neither listed in nor eligible for the California Register of Historic Resources, as is required to receive scrutiny. The Case: Patricia Ann Fairbank v. City of Mill Valley, No. A085018, 99 C.D.O.S. 8106, 1999 Daily Journal D.A.R. 10307, filed September 30, 1999. The Lawyers: For Fairbank: Laurel Stanley, Stanley & Rose, (510) 663-5171. For Mill Valley: Craig Labadie, McDonough, Holland & Allen, (510) 273-8780. For Lee and Lum: Neil Sorensen, (415) 499-8600.

Forced by a lawsuit to incorporate the California Environmental Quality Act process into the way it issues streambed and lake alteration permits, the California Department of Fish & Game has issued new procedures that will require more property owners to do greater environmental review before they undertake such projects. Every permit (often called a "1600" for a section of the Fish and Game Code) will be examined to see how CEQA applies, according to Jim Steele, a DFG program manager in Sacramento who is overseeing the new procedures intended to comply with a court order. Fish & Game regulations previously allowed the agency to grant permits for such alterations without requiring review under CEQA, but a series of legal challenges in Mendocino and Sonoma counties led to the change. Final regulations have not yet been issued, but DFG officials and project proponents have already acknowledged there will be some delays as new paperwork and procedures are worked out. Steele expects Fish & Game will issue new regulations for public review next year. The new interim procedures began in May, following an order by Mendocino County Superior Court Judge Conrad Cox in Mendocino Environmental Center v. California Department of Fish & Game, case No. CV76761. In that case, environmentalists used a proposal to remove salvaged lumber from estuaries and rivers to launch a full-scale attack on DFG's failure to require CEQA review for the permits. DFG argued that its regulations under Section 1603 made its handling of the lumber salving proposal a ministerial act, not a discretionary act, so no CEQA analysis was required, according to environmental attorney Paul Carroll. But the court ruled that this was clearly a discretionary act, so DFG agreed to change its procedures, Carroll said. The impact is expected to be felt most where DFG is the lead agency for a project. The agency will require CEQA review for undertakings such as building a bridge across a creek, adding rip rap to prevent erosion, or altering a stream's flow for agricultural irrigation, "It looks like they're going to be a lot more stringent," said Peggy Rose, project manager for the Ventura County Resource Conservation District. Rose is planning a streambed alteration to revitalize and stabilize a stream, similar to a project she did several years ago. On the earlier project, DFG did not require a permit, but this time they've already told her that the district needs one. She expects it will take several months to get the permit. But DFG can develop five-year memorandums of understanding for maintenance to streamline the review process, Steele said. Morgan Wehtje, DFG biologist for Ventura County, said most developers have dealt with the new procedures well. Wehtje said she expected the new rules to delay permit processing by up to a month. Requiring an EIR, however, could lead to delays of three months to a year for a project, Steele said. But EIRs are rarely, if ever, required for such permits, he added. Steele said that 15 new employees, including nine environmental specialists, have been added to deal with the increased CEQA work for the permits. He said the price of the permits is expected to rise to cover the additional costs. The current base price of the permits is $132, with an inflation adjustment expected soon. Wehtje said one impact from the changes has been in projects that were approved in the past that are now ready to build. Environmental review documents for the past 10 years said the issue of streambed or lake alteration permits will be addressed when the time to build arrives, she explained. Now, those projects face more stringent review. But Steele said that in many cases, CEQA studies done by other agencies have been adequate to let the agency issue permits. Under the new procedure, those seeking to alter a streambed or lake are encouraged to meet with their regional office of the DFG, after filling out two forms and paying fees on the alteration project. The DFG will review the forms and determine whether a Lake or Streambed Alteration Agreement is required. Legal language on the alterations is spelled out under Sections 1600-1603 of the Fish and Game Code. But those new review procedures drew the criticism of Tara Mueller, an attorney for several environmental groups including the Sierra Club. She said DFG is not commencing CEQA review until negotiated agreements are completed, making it harder for the public to review what is occurring. "That makes CEQA a post-hoc rationalization because they've already agreed on mitigation" before they've done environmental review, she said. Mueller said a better time to commence CEQA review would be when a landowner submits a notice of an alteration to DFG. But Steele said the process is a good use of his agency's limited resources, and he said, "it gets a much more cooperative applicant." Curtis Alling , chair of the legislative review committee of the Association of Environmental Professionals, said he hasn't seen much of an impact from the new procedures. Fish & Game field biologists seem to be involving themselves sooner and more proactively in the process, doing things like defining mitigation for streambed impacts and providing input sooner. " encourages better mitigation planning," he said. Mueller noted that under the new procedures, DFG is only the lead agency if it is providing the only permit for a project. If a development is part of a bigger project, then no separate notice is issued and there is a smaller chance that there will be analysis of riparian impacts by the lead agency. Land-use attorney Michael Zischke of San Francisco said he expects the new procedures to affect primarily public agencies. "A typical new development is going to do a CEQA review through the land-use process, and then Fish & Game is simply a responsible agency," he said. "Where it will become more of an issue, I think, is in public agency maintenance ... and also to some extent maybe some private activities of existing operations where there isn't a prior environmental review for the operation." Contacts: Curtis Alling, Association of Environmental Professionals, (916) 414-5800. Paul Carroll, attorney, (650) 322-5652. Tara Mueller, Environmental Law Foundation, (510) 208-4555. Peggy Rose, Ventura County Resource Conservation District, (805) 386-4685. Jim Steele, Department of Fish & Game, (916) 653-1485. Morgan Wehtje, DFG, (805) 491-3571. Michael Zischke, Landels, Ripley & Diamond, (415) 512-8700. Web site: www.dfg.ca.gov/wahcb/1600.html

As more large development proposals rely on water transfers to meet expected urban needs, the complexity of such transfers becomes apparent. Water transfers can engender strong opposition, especially from people in the area that would lose the water, and sizeable water transfers continue to hit major snags. At least four giant development projects, several Central Valley cities, and one Southern California water agency intend to siphon water from farmland to new homes and businesses. But all of these water transfers can have multiple effects, ranging from groundwater depletion to impacts on a farm-based economy. In Northern California, where most of the state's rain falls, many farmers, environmentalists and public officials hold strong negative opinions about the idea of transferring "their" water to subdivisions and businesses in metropolitan regions. Fallowing Sacramento Valley farmland for the benefit of urban growth makes no sense, said Barbara Vlamis, executive director of the high-profile Butte Environmental Council. Such action makes money for one landowner, but it hurts farmworkers and agricultural-dependent businesses, she said. "They want water in Southern California, and there are eager and greedy people in Northern California who will sell their community down the river to make money," Vlamis said during the California Water Policy Conference in Los Angeles in October. That extreme view is not uncommon in some water-wealthy areas, and it could pose an obstacle to proposed water transfers. Among them: o The Tracy Hills project of 5,500 homes and 500 acres of commercial development in Tracy. To get water, the Grupe Co. purchased all 1,000 acres in the Widren Water District near Firebaugh. The developer then appointed directors who agreed to transfer about 3,000 acre-feet of water to Tracy Hills. Fresno County, however, has filed a lawsuit to prevent the transfer. o The 11,000-unit Dougherty Valley subdivision near Livermore. Shapell Industries has begun building homes in areas served by the East Bay Municipal Utility District. However, a plan to import water from Central Valley farms to serve the bulk of the subdivision is mired in a lawsuit, of which Shapell lost the first round. o The 5,000-unit Diablo Grande subdivision and golf resort in western Stanislaus County. The developer purchased farmland on the valley floor and plans to transfer the water to the project. A coalition of farmers and environmentalists sued to halt the project. (See Legal Digest, page 8.) o The 12,000-acre Newhall Ranch near Santa Clarita, which would contain 21,000 homes and 1,000 acres of commercial and industrial development. A transfer is one of three potential water sources. While these developments rely on more of a private-party approach, several public entities also are pursuing transfers. In August, the Metropolitan Water District, the Imperial Irrigation District and the Coachella Valley Water District agreed to a plan in which IID can ship 200,000 acre-feet of its Colorado River water to the San Diego County Water Authority. The San Diego agency, which serves a growing urban area, would pay Imperial Valley farmers to install water conservation devices. Although plenty of details remain — and both MWD and CVWD have since filed lawsuits — the deal would be the nation's largest transfer of water from agricultural to urban uses. On a smaller scale, the cities of Tracy, Lathrop, Manteca and Escalon have been working on a water transfer with the South San Joaquin Irrigation District to provide for the needs of these rapidly growing towns. This transfer remains only a proposal. To stir the waters even more, several companies — including Western Water Co., Cadiz Inc., U.S. Filter and Vidler Water Co. — have begun purchasing land throughout the state with water rights while waiting for a more formal water market to get established. Clearly, these transfers, whether private or public in nature, will confront major obstacles. Kevin Wolf, a Davis-based water planning consultant, said he has encountered supervisors in rural counties who are dead set against all water transfers. In one instance, a Tehama County supervisor refused even to discuss taking floodplain orchards out of production. Officials in Yolo County have erected as many barriers as possible to water transfers because they fear farmers will sell surface water and then irrigate fields with groundwater, which is viewed as precious, Wolf said. Many small-scale transfers already occur, especially from one agricultural user to another. The transfers that earn attention are those done under purview of the State Water Resources Control Board, said Judith Redmond, of the Community Alliance with Family Farmers in Yolo County. These transfers usually involve a long-term change in land use, such as permanent fallowing of farmland, or a new point of water diversion, she said. Opposition arises because directing irrigation water to urban uses decreases the water available for downstream farming, as agricultural water often gets used repeatedly as it makes its way downstream, explained Redmond, who also spoke at the Water Policy Conference. Such cumulative impacts should be considered before a water-transfer is implemented, Redmond advised. Redmond also spoke of Yolo County transfers during 1991, when county farmers voluntarily removed 13 percent of their farmland from production temporarily. The farmers contributed 96,000 acre-feet of water to the state Drought Water Bank, but a study found 450 people lost jobs as a result. Redmond and Vlamis, of the Butte Environmental Council, said water transfer programs ought to account for local concerns and community input. The Water Education Foundation makes a similar point in a briefing paper: "There also are risks of third party impacts to rural communities and agricultural-related industries if farmers sell their water and quit farming. Agricultural suppliers, farm workers and other related businesses can lose income, which can rock the rural community." Defining the water truly available for transfer also can prove problematic, explained Wolf. The question is whether a farmer may change to more efficient irrigation — which saves surface water but reduces the amount percolating into the groundwater table — and sell the savings, he explained. Thus far, state officials have not answered the question of transferring water that would have been "over-applied" to fields, said Mary Johannis, of the U.S. Bureau of Reclamation in Sacramento. "The rules really need to be defined as to what water can be transferred," she said. It appears likely that state lawmakers will either ignore the question or let the governor's administration decide. Lawmakers introduced only three bills during 1999 on water transfers, and they passed only one of them. "It's a hot topic but there are not a lot of members who are interested anymore," said Jennifer Galehouse, an Association of California Water Agencies' lobbyist. The one minor measure the Legislature did pass was SB 970 (Costa), which Gov. Davis signed. The measure clarifies existing water transfer law, says that water transferred for environmental uses is counted as part of a river's mandatory flow, and streamlines the Water Resources Control Board process, according to a Senate bill analysis. Interestingly, the Department of Water Resources urged a veto because it said SB 970's definition of temporary land fallowing contains a loophole. The bill only nibbled at the edges of the Model Water Transfer Act, said Galehouse, whose association backed the legislation. Galehouse predicted legislation that addresses what water is available for transfer might be introduced during 2000. Also one of this year's unsuccessful bills, SB 506, which concerns compensation for conveying transferred water, will return. Contacts: Kevin Wolf, Kevin Wolf & Associates, (530) 758-4211. Mary Johannis, U.S. Bureau of Reclamation, (916) 978-5202. Barbara Vlamis, Butte Environmental Council, (530) 891-6424. Jennifer Galehouse, Association of California Water Agencies, (916) 441-4545. Water Education Foundation website: www.water-ed.org

The Proposition 218 requirement for public elections regarding property-based taxes does not apply to areas annexed into a jurisdiction that already has such taxes, according to an Attorney General's opinion. The opinion issued in October by Deputy Attorney General Gregory Gonot says that a Local Agency Formation Commission may require that taxes levied by the jurisdiction be imposed on the newly annexed parcels, even though those landowners did not vote on the taxes. The proposition was not intended to apply to LAFCO proceedings, he concluded. To read otherwise would create "an administrative imbroglio." Landowners who dislike the taxes may reject the annexation proposal, Gonot concluded in opinion No. 99-602.

Sonoma County has won the first round in its lawsuit over the state's 1993 shift of property taxes from counties and cities to school districts. Sonoma County Superior Court Judge Laurence Sawyer ruled that the Educational Revenue Augmentation Fund (ERAF) shift was unconstitutional because "the shift of local property taxes compels the counties to accept financial responsibility in whole or in part for a program that was required to be funded by the State." Fifty-three counties joined the lawsuit, which has about $10 billion at stake. State officials vowed to appeal the ruling. Since the state implemented ERAF, counties have made up some money through a statewide sales tax increase. Also, lawmakers this year provided limited local budget relief based partly on the ERAF shift. (See CP&DR, July 1999, October 1997.) The case is County of Sonoma v. Commission on State Mandates, SCV-221243.

An appellate court has blocked from the ballot an initiative that seeks to overturn a 1997 ballot measure that approved partial public financing for a new San Francisco 49ers football stadium and amended the city's zoning ordinance to allow the stadium and an adjacent shopping mall. (See CP&DR Economic Development, July 1997.) Stadium opponents gathered enough signatures to qualify for the ballot an initiative that would overturn the 1997 measures. The 49ers sued and San Francisco Superior Court Judge Raymond Williamson prohibited the initiative — which alleged violations of the Election Code during the 1997 election — from going on the ballot because it contained false statements. Project opponents argued that Judge Williamson violated their First Amendment free speech rights. But in early October, the First District Court of Appeal said no. "We note we are speaking of outright falsehoods in an official document and not the typical hyperbole and opinionated comments common to political debate," the unanimous three-judge panel said. "All we do in this case is uphold a writ of mandate issued against a particulate petition which clearly violated the Elections Code because it contains undisputed untruths calculated to mislead and misinform a reasonable voter." The case is San Francisco 49ers v. Nishioka, No. A083687, 99 C.D.O.S. 8249.

A Stanislaus County superior court judge appears to have cleared the way for housing construction at the controversial Diablo Grande development in the hills west of Interstate 5, near Patterson. Judge Donald Shaver said Stanislaus County may permit construction that would be served by water sources that have been "fully and adequately reviewed under CEQA." Project proponents contend the Oct. 1 ruling allows them to pursue the first phase of the project, which amounts to 2,000 homes, two golf courses, a hotel and a winery. The county Board of Supervisors is scheduled to consider the matter November 9. Originally, the Fifth District Court of Appeals ruled that the county's EIR for the project was inadequate because it deferred analysis of water supply issues. Developers had proposed various water transfers from Central Valley farmland. That case, Stanislaus Natural Heritage Project v. County of Stanislaus, (1996) 48 Cal.App4th 182, has become known as Diablo Grande I. After the county revised the EIR, a second round of litigation (Diablo Grande II) commenced. In July, Judge Shaver ruled that the revised EIR still did not adequately address water supply. (See CP&DR Legal Digest September 1996, August 1999.) However, the court determined two sources of water, an 8,000 acre-foot transfer from the Berrenda-Mesa Water District and about 500 acre-feet of groundwater, have been adequately reviewed under CEQA and found to be secure, said Rick Jarvis, an attorney for the developer. Assistant County Counsel Vernon Seeley agreed that the October 1 ruling lets the county approve portions of the project so long as supervisors allow for public input and make certain findings. The consolidated cases are California Farm Bureau Federation v. County of Stanislaus and Protect Our Water v. County of Stanislaus, Nos. 181448 and 181472.

In his first year as governor, Gray Davis has gained a reputation as a chief executive quick to wield the veto pen — and the field of planning and development legislation proved to be no exception. Even though the Legislature passed only small and incremental bills — opting against sweeping change in any area — Davis vetoed one-third of all planning and development bills that reached his desk. "I think he actually striped the middle pretty well," said Clyde McDonald, Assembly Local Government Committee consultant. "All the bills he vetoed had a fair argument one way or the other." In a few cases, Davis vetoed bills to protect the state's general fund. But the majority of vetoes seemed to reveal a governor intent on sending a strong message to the Legislature as to who will control the Sacramento agenda. Most of his veto messages seemed to be based not on an overarching vision but on some specific aspect of the bill that he did not like. And in most cases he claimed to be open to similar legislation next year — if the things he did not like were removed. For example, he vetoed AB 1553 (Longville), the so-called "Redlands doughnut hole" bill, which would have resolved a controversial development dispute in San Bernardino County by requiring that county's Local Agency Formation Commission to remove a prime parcel of land from Redlands's sphere of influence. While acknowledging that the solution envisioned in the legislation — joint planning and revenue sharing on the property — was reasonable, Davis essentially ordered the local governments to reach agreement. "This is a local land use dispute and locally elected officials should resolve it," the governor said in his veto message. But, he added, he would sign the bill next year if the locals remain at odds with one another. "That veto says, I believe in home rule, so go home and rule," commented Peter Detwiler, Senate Local Government Committee staff director. Davis also vetoed AB 1480 (Cardoza), a bill banning most mining from Williamson Act land, apparently because it contained an exemption for a large gravel miner in Placer County who might otherwise have opposed the bill. Once again, Davis supported the cause but criticized the bill itself, saying "the creation of such an exemption in the closing days of the session denied the opportunity for full public comment and review." William Geyer, lobbyist for the Resource Landowners Coalition, likened the AB 1480 veto to Davis's veto last month of AB 84, a last-minute bill that would have pre-empted the right of local government to issue land-use permits to certain "big-box" retailers. (See CP&DR, September 1999.) "I took the veto message to read, take out the big mining box and I'll sign it," Geyer said. With one veto in particular, however, Davis stepped into the middle of one of the most contentious development issues in the state — the activities of Pacific Genesis Group Inc. in working with municipalities to issue Marks-Roos bonds. In doing so, Davis angered fellow Democratic office-holders. At the urging of Pacific Genesis and the California State Council of Laborers, Davis vetoed AB 1511 (Florez), a bill that would have prohibited mutual water companies from entering into joint-powers authorities with public agencies. The bill was aimed at blocking a Marks-Roos issue to finance infrastructure for a development project in San Bernardino County. The Marks-Roos issue was initiated with Pacific Genesis's assistance by the small cities of Waterford and San Joaquin, located hundreds of miles away in the Central Valley. After legislation passed last year prohibiting Marks-Roos issuers from investing in projects geographically remote from the project, a mutual water company was formed by the project's developer, and a JPA was created among the water company and the two cities. The cities have since withdrawn from the JPA, but AB 1511 would have prohibited this arrangement and at least two others like it. State Treasurer Phil Angelides and Attorney General Bill Lockyer, both of whom have been critical of the Waterford/San Joaquin deal backed AB 1511. But the Council of Laborers and Pacific Genesis lobbied Davis to veto the bill, saying that it would kill the three projects and eliminate several thousand jobs. In his letter to the governor, David Fitzgerald, chairman of Pacific Genesis, complained personally about the attitude of Dan Reeves, Angelides's legislative aide. Fitzgerald urged Davis to veto the bill "so that we can terminate these annual legislative forays that no more than ten to twelve California residents even care about." Davis issued the veto, saying he feared a loss of jobs and indicating that he would have signed the bill if it were prospective and did not affect projects already in the pipeline. Angelides and Lockyer issued a swift and angry response, saying, "We will continue to work together to enforce existing law and assure that abuses are halted." In three cases, Davis vetoed planning and development bills that would have affected the general fund. These were: o AB 47 (Cardoza), which would have shifted revenue from Williamson Act cancellation fees from the general fund to the Agricultural Land Stewardship Fund. o AB 597 (Longville), which would have instructed Caltrans to create flexible highway standards to encourage New Urbanist-style designs. Davis said that the $300,000 program "should be considered as part of the normal budget process." o AB601 (Cedillo), which would have appropriated $6 million to assist property owners in downtown Los Angeles and in Compton to convert older, unleased commercial buildings for residential use. As with the other vetoes, Davis expressed support for the goal but objected to the cost. At the same time, Davis signed more than a dozen bills — most of them minor — affecting planning and development issues in the state. These included the following: o AB 178 (Torlakson), which prohibits jurisdictions from providing financial incentives to lure certain types of retailers from neighboring communities. In his veto message for AB 84, Davis cited AB 178 as a better policy approach. o AB 262 (Runner), a routine bill that provides an implementing statute for last year's Proposition 11, a constitutional amendment permitting sales-tax sharing between cities. o AB 670 (Papan), which allows BART and transit districts in San Mateo and Santa Clara counties to acquire land for transit-oriented developments. Provisions allowing the agencies to use eminent domain for this purpose were dropped at the last minute. o AB 1229 (Assembly Agriculture Committee), which renames the Agricultural Land Stewardship Program as the California Farmland Conservancy Program and expands the program's mission and eligibility. o AB 1385 (Battin), which permits gaming contracts between Indian tribes and the state — but specifically states that those contracts are not "projects" under the California Environmental Quality Act. o AB 1505 (Ducheny), which allows five-acre farmworker housing projects on Williamson Act land. o AB 1555 (Longville), which re-instates lapsed statutory provisions to expedite annexations of county "islands" in the LAFCO process. The bill, however, contains many exemptions. o AB 1630 (Lowenthal), which appropriates $320,000 to permit the Los Angeles County LAFCO to study detachment of the Wilmington/San Pedro area from the City of Los Angeles. o SB 115 (Solis), which requires the Office of Planning and Research to study and make recommendations on incorporating environmental justice issues into CEQA. o SB 216 (Solis), which creates the San Gabriel Mountains and River Conservancy, the seventh state land conservancy. o SB 497 (Rainey), which requires the state controller to investigate reported violations of redevelopment law and authorizes the attorney general to file enforcement lawsuits. o SB 526 (Kelly), which makes it easier for the Coachella Valley Mountains Conservancy to buy land to implement habitat conservation plans and natural communities conservation plans, especially in desert areas. o SB 754 (Hayden), which creates the Los Angeles River Conservation and Restoration Commission. The panel is charged with writing a plan to restore the Los Angeles River to a more natural state. o SB 807 (Senate Agriculture and Water Committee), which permits LAFCOs to approve extraterritorial urban services by cities and special districts in response to threats to public health and safety. The bill emerged in response to concerns that a previous ban on extraterritorial services was too strict and did not permit alleviation of hazardous sewer or fire situations. o SB 948 (Alarcon), which makes a series of relatively minor changes to the Housing Element law — but, significantly, tightens up the findings local governments must make to deny an affordable housing project. o SB 985 (Johnston), makes a series of minor changes to the Williamson Act. Contacts: Clyde McDonald, Assembly Local Government Committee, (916) 319-3958. Peter Detwiler, Senate Local Government Committee, (916) 445-9748. S.R. Jones, California Association of LAFCOs, (530) 265-7180. Cathy Calfo, Treasurer's Office, (916) 653-2995. William Geyer, Resource Landowners Coalition, (916) 444-9346.

The Ninth Circuit U.S. Court of Appeals has rejected a takings claim and request for a jury trial filed by a property owner in Washington who disputed a zoning decision made under that state's Growth Management Act of 1990. It was the Ninth Circuit's first takings decision since the U.S. Supreme Court voted 5-4 to uphold a takings decision and jury award of damages in May. In City of Monterey v. Del Monte Dunes at Monterey Ltd., 119 S. Ct. 1624, the high court broke new ground by allowing an aggrieved landowner to plead his case in front of a jury, which issued a $1.45 million damages award. (See CP&DR Legal Digest June and July, 1999.) But the Ninth Circuit said Del Monte Dunes does not establish a right to a jury on every takings claim. The appellate court noted the "facts and procedural posture in Del Monte Dunes were extreme," and quite different from the case at hand. Still, writing for the Ninth Circuit's unanimous three-judge panel, Judge M. Margaret McKeown noted, "Frankly, we have some difficulty parsing the distinctions laid out by the Supreme Court concerning when a jury trial is required. We find ourselves in uncharted territory with a map for related but different waters." The Washington case was brought by the Buckles family, which owns 10 acres in unincorporated King County. The family purchased the property in 1974 and has occupied its single-family residence, guest house and barn since 1979. A salmon-spawning stream crosses the property. The land is in the midst of a large rural residential area, although some small commercial uses abut the Buckles' property and other neighboring properties were zoned industrial or commercial. When King County began widespread rezoning pursuant to the Growth Management Act (GMA) in 1994, it proposed changing the Buckles' zoning from Residential with a one-acre minimum lot size, to Residential with five-acre minimums. The Buckles lobbied the King County Council and had the zoning changed to Rural Neighborhood, which allows limited commercial uses. But the King County Comprehensive Plan was challenged on numerous grounds, including a claim that the Buckles' last-minute rezoning violated the GMA's public participation requirements. The Growth Management Hearings Board for Central Puget Sound, established by the GMA to decide appeals, ruled that the rezoning violated the public participation mandate. The hearings board sent the comprehensive plan back to the King County Council, which conducted public hearings and settled on the residential five-acre zoning for the Buckles' lot. The Buckles challenged that decision at the hearings board, but lost. They then filed substantive and procedural due process claims against King County and the hearings board members under the federal Civil Rights Act, 42 U.S.C. §1983. They later added a takings claim under the federal and state constitutions. Circuit Court Judge John Coughenour dismissed the suit against the hearing board members and issued summary judgement for King County. On appeal, the Buckles argued that changing the zoning from commercial to residential was an unfair downzoning, and placed greater restrictions on them than on neighboring property owners who have commercial uses. They argued that the King County rezoning did not advance a legitimate county interest, was a taking without just compensation, and that a jury should decide the dispute. But the Ninth Circuit said the Buckles ignored the facts. Their lot is part of a large tract zoned as residential and has never been used for commercial purposes, the court noted. Furthermore, the Rural Neighborhood zoning was never final and was the product of a GMA violation. "The county cannot ‘take' what the Buckles did not have. The zoning designation for limited business uses was never final and Buckles ended up exactly where they started — residential use," McKeown wrote. The court cited landmark cases to determine that a taking did not occur. "A land use regulation does not constitute a taking if the regulation does not deny a landowner all economically viable use of the property and if the regulation substantially advances a legitimate government interest," McKeown wrote. She cited Nollan v. California Coastal Comm'n, 483 U.S. 825 (1987), and Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). The Buckles did not suffer a loss because even their own appraiser valued the property at three times its 1974 purchase price. Furthermore, the court concluded, drawing a line at existing commercial uses in a rural area is a legitimate governmental activity. As for a jury trial, the court said: "Under Del Monte Dunes, a plaintiff has the right to a jury trial on the ‘predominately factual question' of ‘whether a landowner has been deprived of all economically viable use of his property.'" Again, that was not at issue with the Buckles. The Del Monte Dunes case was dissimilar in that the City of Monterey five times rejected proposals that appeared to comply with city-approved zoning for the property. In this case, the Buckles argued that their zoning was inconsistent with zoning on surrounding properties, the court said. The court rejected the procedural and substantive due process takings claims and upheld the absolute immunity of hearings board members. "If Board members were not protected by absolute immunity, we predict that many losing parties would turn around and sue the Board members in a damages action instead of appealing the Board's substantive decision to the Superior Court. … Permitting suits against the quasi-judicial decision makers would discourage knowledgeable individuals from serving as Board members and thwart the orderly process of judicial review," McKeown wrote. The Case: Bruce Buckles v. King County, No. 98-35270, 99 C.D.O.S. 7504, 1999 Daily Journal D.A.R. 9542, filed September 10, 1999. The Lawyers: For Buckles: Richard M. Stephens, Groen & Stephens, Bellevue, Washington. For King County, H. Kevin Wright and Darren Carnell, King County Prosecuting Attorney's Office, Seattle.

The federal Superfund law allows citizens to file lawsuits challenging remedial cleanup of hazardous material at a former military base, the U.S. Ninth Circuit Court of Appeals has ruled. The September ruling permits a federal lawsuit to move forward against the Army over burial of hazardous materials at the former Fort Ord Army base in Monterey. Environmentalists charge that the Army's plan to bury contaminated soil in an on-site landfill is subject to review under the California Environmental Quality Act. Charles Cadart, an attorney for California Public Interest Research Group, one of the plaintiffs, said the ruling means citizens have oversight of military base cleanups. A companion lawsuit against the state Environmental Protection Agency and the Department of Toxic Substances Control — which approved the Army's cleanup plan — remains alive in state court. In 1990, the U.S. EPA placed Fort Ord on a priority list for cleanup. Later that year, the EPA, the Army and state regulators approved an agreement establishing procedures for a remedial cleanup under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known at the Superfund law. Two groups — Fort Ord Toxics Projects and CalPIRG — and two citizens sued the state and federal governments. The plaintiffs argued that the state violated CEQA by failing to prepare an environmental impact report prior to allowing the Army to deviate from state prohibitions against land disposal of hazardous materials. The Army moved its portion of the lawsuit to federal court, where the Army invoked a provision in CERCLA that bar's lawsuits (§113(h), 42 U.S.C. §9613(h)). The district court granted the Army's motion to dismiss the case. On appeal, environmentalists made three arguments against the dismissal, and one of the three stuck. They contended that the §113(h) preclusion of lawsuits applies to cleanups authorized by one section of CERCLA, but not to cleanups authorized by a different section. The three-judge panel of the Ninth Circuit reluctantly agreed. The appellate panel reversed the decision by District Judge Ronald Whyte and returned the lawsuit to the district court for further proceedings. Environmentalists successfully argued that §113(h) only precludes lawsuits against short-term cleanups of immediate hazards. Those cleanups are classified as removal actions and are carried out under §104. However, at Fort Ord, the Army acted under §120, which sets special standards for remedial cleanups at federal facilities. Section 120 actions are not covered by the §113(h) preclusion. "CERCLA distinguishes between two types of cleanups: removal actions and remedial actions. … emoval actions are temporary measures taken to protect against the threat of an immediate release of hazardous substances into the environment, whereas remedial actions are intended as permanent solutions," Ninth Circuit Judge Charles Wiggins wrote in the unanimous opinion. The language in CERCLA makes clear distinctions, although the court wondered why Congress would differentiate. "But we are not concerned with the wisdom of Congress' policy choice, and we lack the luxury to entertain the subjective intentions of various legislators," Wiggins wrote. "Our job is to effectuate Congressional intent as expressed in the statutory text. Thus, despite any misgivings we may have, we adopt this distinction between removal and remedial actions at federal facilities because the statutory language seems to require it." Cadart, the CalPIRG lawyer, said Congress intentionally provided for citizen oversight of remedial action. Otherwise, there would be no watchdog of the federal government, which has authority to plan, carry out and inspect cleanups. Removal actions, he said, are typically smaller, immediate cleanups of toxic sites on private lands. He agreed that federal law bars citizen lawsuits of removal actions. CalPIRG earlier sued the Army over cleanup of unexploded munitions buried at Fort Ord. Last November, the nonprofit organization dropped that suit when the Army agreed that CERCLA required cleanup of the unexploded bombs, mortars and grenades before the Army transferred the property. The Case: Fort Ord Toxics Project v. California Environmental Protection Agency, No. 98-16160, 99 C.D.O.S. 7259, 1999 Daily Journal D.A.R. 9321, filed September 2, 1999 The Lawyers: For Fort Ord Toxics Project: Charles Cadart, (617) 422-0880. For the Army: Elizabeth Ann Peterson, U.S. Department of Justice, Washington D.C.