APPEAL from a judgment of the Superior Court of Tehama County, Richard Scheuler, Judge. Reversed with directions. (Super. Ct. No. CI58258).
The opinion of the court was delivered by: Butz, J.
CERTIFIED FOR PARTIAL PUBLICATION*fn1
California Oak Foundation (COF), a nonprofit corporation, appeals after the denial of its petition for a writ of administrative mandamus to overturn approval of a project and associated environmental impact report (EIR) by respondents County of Tehama (the County) and the Tehama County Board of Supervisors (the Board; collectively, Tehama).*fn2 The project approved is a "specific plan" (Gov. Code, § 65450 et seq.) for residential and commercial development on a parcel of approximately 3,320 acres adjacent to Interstate Highway 5 (I-5) between Red Bluff and Redding--namely, the Sun City Tehama Specific Plan (the Specific Plan Area).
COF contends that Tehama erred by incorrectly applying California Environmental Quality Act (CEQA) (Pub. Res. Code, § 21050 et seq.)*fn3 requirements for mitigation of significant effects on the environment and that the trial court erred in denying COF‟s motion to include in the administrative record documents the County claims are subject to attorney-client privilege. In the published portion of this opinion we reject the contention of error in upholding the claim of privilege. In the unpublished portion, finding partial merit as to an issue of mitigation of one impact, we shall reverse the judgment as to that issue, with directions to remand the case to Tehama for limited further consideration under Code of Civil Procedure section 1094.5, subdivision (e).*fn4
FACTUAL AND PROCEDURAL BACKGROUND
A. Loss of Blue Oak Woodlands
The revised draft EIR (RevDEIR) for the project was issued in July of 2006. It asserts at the outset that even "[a]fter implementation of all feasible mitigation measures, impacts to the blue oak woodland present on the site . . . are considered unavoidable significant impacts." The RevDEIR proposes as mitigation that the developer "shall record an appropriate legal instrument on the approximately 1,398 acres of preserved oak woodland habitat within the Specific Plan Area to ensure its preservation as undisturbed oak woodland in perpetuity, and/or contribute funds to the Oak Woodlands Conservation Fund." It asserts this "would satisfy the requirements of [section] 21083.4*fn5 (Sen[.] Bill [No.] 1334) on Oak Woodlands Conservation and would reduce the magnitude of the impact to blue oak woodland by preserving oak woodland in perpetuity." However, it concedes that "there would still be a net loss of 774 acres of blue oak woodland" which it deems "unavoidably significant even after the implementation of all feasible mitigation measures."
COF submitted a comment letter addressed to this part of the RevDEIR. The letter argues that the proposed mitigation measure would not satisfy section 21083.4 because: "If project oak woodland impacts remain significant even with a mitigating on-site oak reserve, then additional [section] 21083.4[, subdivision] (b) oak habitat mitigation is required." It notes: "The [RevDEIR] leaves open the possibility of a monetary contribution to the state Oak Woodland[s] Conservation Fund but . . . offers no specificity regarding this mitigation option." COF urged as a remedy that the developer be required to make "a monetary contribution to the state Oak Woodland[s] Conservation Fund in an amount sufficient to purchase 774 acres of local replacement [b]lue oak woodlands."
The final EIR (FEIR) responds to this criticism in essence as follows. The mitigation measure was revised to remove the alternative fee option. The revision was made because "[t]he County has determined that this measure provides adequate mitigation and . . . contribution to the state Oak Woodland[s] Conservation Fund is not proposed as mitigation." In Tehama‟s view: "The preservation of 1,398 acres of oak habitat within the proposed Specific Plan Area to be preserved in perpetuity, to offset impacts to 774 acres of similar habitat, adheres to the statutory requirements of [section] 21083.4, as this is one of the four defined mitigation options. [¶] However, as stated on [page] 4.4-52 of the [RevDEIR], the direct loss of 774 acres of oak woodland habitat remains a significant unavoidable impact. This is because, even with the proposed preservation of almost twice that amount of oak woodland habitat within the proposed Specific Plan Area, there will still be a net loss of oak woodland habitat. [¶] As the proposed mitigation measure is feasible and considered proportional to the impact by the County of Tehama, additional oak habitat mitigation is not required under [section] 21083.4."
B. Increased Traffic on I-5
The RevDEIR also asserts at the outset that increased traffic attributable to the project, combined with projected growth in other traffic, would result in significant impacts to the I-5 freeway and its interchanges. Tehama‟s target level of service thresholds*fn6 will be exceeded for I-5 and its interchanges for peak traffic hours without roadway improvements, intersection improvements, and freeway widening. However, these mitigation measures are not considered feasible.
Sunset Hills Drive is a freeway interchange contiguous to the project site. The project would result in a significant impact on the Sunset Hills Drive interchange and will have a cumulative long-term impact on it. The RevDEIR proposes various improvements as mitigation of the Sunset Hills Drive interchange impacts.
A possible mitigation measure for freeway congestion is to add one northbound and one southbound lane to I-5 from Red Bluff to Redding in the deficient areas, as determined by the California Department of Transportation (Caltrans). The general estimate for widening I-5 from Red Bluff to Redding is approximately $500 million, or $1 million per lane-mile. At this time, neither Caltrans nor Tehama has prepared plans, developed a budget, or adopted a program to fund improvements to I-5 in the vicinity of the Specific Plan Area. The project applicant proposes to pay a regional traffic impact fee in an amount to be negotiated with the County. These fees would contribute toward the cost of improving regional facilities, including I-5 mainline and freeway ramp segments. Tehama is currently updating its "General Plan" and it is anticipated that a countywide traffic impact fee program would be identified as a program to implement in the General Plan.
The RevDEIR asserts that because "no adopted program to implement improvements to I-5 currently exists, no feasible mitigation for the impact of the project on the I-5 [f]reeway mainline and freeway ramp segments is available at this time." It submits this is so because under the CEQA a project‟s contribution to a significant cumulative impact may be considered mitigated only if (1) the project is required to fund its fair share of the cost of mitigation measures for cumulative impacts; and (2) a program is defined to ensure that the necessary mitigation is implemented in a reasonable time frame.*fn7
It also relies on the consideration that even with the mitigation improvements, while the LOS along I-5 for both ramps and mainline segments would improve, it would remain at an unacceptable level.
Caltrans submitted a comment letter criticizing the draft EIR (DEIR) with respect to impacts on I-5 facilities and traffic impacts. Caltrans disagreed with the conclusion that the project‟s direct and cumulative impacts are unavoidable because there was no established funding program in place to construct the cumulative I-5 mitigation. Caltrans asserted there are many methods other than contributing to an existing fee program for the impacts to be mitigated. The draft "Development Agreement" between the County and the developer is one such way. Caltrans noted the draft Development Agreement includes traffic mitigation impact fees, including approximately $7 million for impacts to the Sunset Hills Drive interchange and up to $3 million for impacts to mainline I-5. While the former appears to meet the short-term operational impacts for the Sunset Hills Drive interchange, the $3 million identified for I-5 is just a small fraction of the $57 million identified as the "fair share" of mitigation costs, the project‟s proportional share of a future $500 million in additional capacity needs on I-5. In Caltrans‟s view, it was not reasonable or realistic for the project to contribute only 5 percent of its mainline impact.
The FEIR responds to the Caltrans letter as follows. Caltrans, in essence, disagrees with the amount of fees the proposed Development Agreement requires for I-5 mitigation. Tehama established the amount of fees after evaluating several financial feasibility factors, including sustainable home prices in Tehama County, the data and analysis in the "Public Facilities Finance Plan" (PFFP) prepared for the project, and other financial information collected by county staff.
The FEIR asserts the RevDEIR does not conclude that the Project‟s impacts are significant and unavoidable because an established funding program and implementation have not been established. Rather, it only acknowledges that, because there is no existing program, there may be impacts if the improvements needed are not funded and built. This requires Tehama to disclose that a potentially significant traffic impact may result.
Approximately $10 million of the $13 million in regional traffic impact fees that would be required by the proposed Development Agreement will be used for I-5 related improvements, and up to $3 million of this is designated for I-5 mainline improvements. Tehama finds this mitigation to be both feasible and proportional to the impacts of the project. The $57 million figure for fair share mitigation costs is based on Caltrans‟s "Traffic Impact Analysis Guidelines" methodology. This would equal approximately 11 percent of the $500 million needed to add additional capacity to the impacted segments of I-5 between Red Bluff and Redding. Tehama does not agree with this methodology. In addition, the purported impacts of the project on I-5 are also based on assumptions that Caltrans requested in the traffic study. The assumptions are questionable because data shows far fewer trips are generated by age-restricted communities.
The PFFP and the project feasibility information supplied by the developer indicate mitigation of $57 million is not economically feasible. The PFFP concludes that 14 percent of estimated home sales prices is at the threshold of unfeasibility. An additional $57 million would increase the total infrastructure burden substantially beyond the threshold, i.e., to approximately 19 percent. Similarly, according to the developer, an additional $57 million would render the project infeasible. CEQA does not require the imposition of financially infeasible mitigation, which would effectively terminate the proposed project. [Facts and procedural background as to the issue of failure to overrule the claim of attorney-client privilege will be related in part III. of the discussion.]
I. Mitigation for Loss of Blue Oak Woodlands
COF contends that Tehama and the trial court erred in failing to apply CEQA (§ 21050) requirements for mitigation of See footnote, ante, page 1. significant effects on the environment, with respect to the loss of the 774 acres of blue oak woodlands. COF argues that both incorrectly relied upon section 21083.4*fn8 to justify failing to require that the impact of the project be fully mitigated. COF argues that section 21081*fn9 requires "full mitigation" that mitigates the impact to an insignificant level (with certain exceptions COF asserts are inapplicable here) and that Tehama incorrectly applied section 21083.4 to avoid this requirement.
Tehama and respondent real parties in interest reply, inter alia, that COF‟s argument is a mischaracterization of the EIR. They submit that Tehama adopted feasible mitigation and declined to adopt additional or different mitigation (i.e., additional payment to the Oak Woodlands Conservation Fund as sought by COF) because it found specific considerations made additional mitigation infeasible, i.e., that nothing further could render the loss of the unique 774 acres of blue oak woodlands an insignificant impact. Tehama and real parties in interest argue that, having adopted a reasonable ratio under CEQA case law for the amount of oak woodlands to conserve through the use of conservation easements, Tehama was not compelled to require additional mitigation.
Tehama and the real parties in interest have the better argument. COF points to two items in the FEIR response to COF‟s letter. The first says that the proposed mitigation by creation of a conservation easement "adheres to the statutory requirements of [section] 21083.4, as this is one of the four defined mitigation options." The second says the statute "requires that the County implement one or more of the mitigation options, but does not require that the significant impact be mitigated to a less than significant level." COF asserts from this that Tehama relied on section 21083.4 as an exception to the ordinary CEQA duty to require all feasible mitigation until the impact is reduced to a less than significant level.
However, the assertion is unpersuasive. There is no compelling implication in these statements in the FEIR that Tehama was using section 21083.4 as an exception to the general duty under CEQA to mitigate. Rather, the reasoning in the FEIR is that the mitigation by creation of a conservation easement is "proportional to the impact" but the loss of habitat "remains a significant unavoidable impact" because "there will still be a net loss of oak woodland habitat." That is to say, because there was no mitigation measure that could avoid a net loss of habitat, there was no feasible mitigation that could reduce the impact to a less than significant level. For example, an additional payment to the Oak Woodlands Conservation Fund as sought by COF would only result in a conservation easement on existing habitat offsite, but could not cure the net loss.
COF does not dispute that the ratio of habitat conserved is within the bounds accepted as mitigation in CEQA case law. (See, e.g., Environmental Council of Sacramento v. City of Sacramento (2006) 142 Cal.App.4th 1018, 1038-1041 (Environmental Council of Sacramento); Mira Mar Mobile Community v. City of Oceanside (2004) 119 Cal.App.4th 477, 494-495.) Nonetheless, it submits that those cases are inapposite because there the agency approving the project had said that the conservation mitigation was sufficient to render the impacts less than significant. However, that is a semantic difference that is not a principled basis for legal distinction. The difference turns on whether one chooses to call a net loss of habitat "a significant unavoidable impact" or to say that conserving sufficient other habitat renders the net loss "less than significant." If anything, Tehama‟s semantic approach may be more true to the spirit of CEQA that environmental impacts should be admitted. We see no reason to punish Tehama for this good deed.
II. Mitigation of Impacts of Increased Traffic on I-5
COF contends that Tehama erred in failing to assess adequately and to provide feasible mitigation for projected increased traffic congestion on I-5. COF argues that Tehama erred in various ways bearing on the determination that these impacts are unavoidable and that mitigation needs to be limited to the amount found financially feasible in the EIR and proposed development agreement. Tehama and the real parties in interest reply to COF‟s specific challenges and generally object that, as no one challenged the financial feasibility analysis methodology in the administrative process, ...