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Voices For Rural Living v. El Dorado Irrigation District

October 4, 2012

VOICES FOR RURAL LIVING, PLAINTIFF AND APPELLANT,
v.
EL DORADO IRRIGATION DISTRICT, DEFENDANT AND RESPONDENT; SHINGLE SPRINGS BAND OF MIWOK INDIANS, REAL PARTY IN INTEREST AND APPELLANT.



(Super. Ct. No. PC20080398) APPEAL from a judgment of the Superior Court of El Dorado County, Kenneth J. Melikian, Judge.

The opinion of the court was delivered by: Nicholson , J.

CERTIFIED FOR PUBLICATION

Reversed in part and affirmed in part.

Defendant El Dorado Irrigation District (EID) entered into an agreement to provide water to a casino located on tribal land held by real party in interest Shingle Springs Band of Miwok Indians (the Tribe). EID determined the agreement was exempt from environmental review under the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq. (CEQA)) pursuant to a categorical exemption for small construction projects. EID made this finding even though the agreement called for it to provide significantly more water than it had provided previously to the land.

EID also determined the agreement was not subject to certain conditions limiting the amount of water it could provide to the tribal land that were imposed years earlier by the El Dorado County Local Agency Formation Commission (LAFCO) when the land was first annexed into EID. The agreement called for providing significantly more water than the annexation conditions allowed. EID determined the annexation conditions were unconstitutional, and, relying upon that determination, approved the agreement and its obligation to provide quantities of water that greatly exceeded those allowed by the conditions.

Plaintiff Voices for Rural Living (VRL) filed a petition for writ of mandate to vacate EID's approval of the agreement. VRL claimed EID violated CEQA because the small projects categorical exemption on which EID had relied did not apply. VRL also claimed EID exceeded its authority when it disregarded the annexation conditions.

The trial court granted VRL's petition and voided EID's approval of the agreement. It determined EID erred in concluding the project was exempt from CEQA. It found the project's unusual circumstances triggered an exception to the small projects categorical exemption on which EID had relied. The project was thus not exempt from CEQA, and the court ordered EID to prepare an environmental impact report (EIR) to analyze the project.

The trial court also determined EID erred by approving the agreement in violation of the annexation conditions. It held EID had no authority to disregard the annexation conditions or determine their constitutionality.

Both the Tribe and VRL appeal. EID does not appeal. The Tribe claims the trial court's holdings are incorrect, and VRL claims the court erred by not reaching additional issues it claims it raised.

Except to reverse solely on the nature of the relief the trial court ordered, we affirm the judgment. As to the CEQA issues, we conclude the trial court correctly determined the project did not qualify for the small projects categorical exemption because the project's unusual circumstances created a potential for environmental impact and thus triggered an exception to the categorical exemption. VRL's request for additional relief under CEQA is mooted by our affirming the judgment, and in any event is barred by VRL's failure to raise its arguments first to EID and thereby exhaust its administrative remedies.

As to the issues surrounding the annexation conditions, we conclude the trial court correctly determined EID had no authority to adjudicate the conditions' constitutionality or disregard their application to the proposed agreement. Because this ground is dispositive of the annexation condition issues raised on this appeal, we do not reach the parties' other arguments.

We direct the trial court to order EID to conduct further proceedings in accordance with CEQA.

FACTS

The Tribe is a sovereign, federally-recognized Indian tribe. The United States government holds land in trust for the Tribe. The land, known as the Shingle Springs Rancheria (Rancheria), consists of approximately 160 acres located in El Dorado County, just north of U.S. Highway 50 between Shingle Springs and Placerville.

Prior to 1987, the Tribe acquired water for the Rancheria residents from EID at out-of-district rates. In 1987, the Tribe and EID entered into an annexation agreement to bring the Rancheria into EID's service area. Under the agreement, EID would "provide water service to Rancheria residents on the same terms as it provides service to any other resident within the District." The agreement was subject to approval by LAFCO.

LAFCO approved the annexation in 1989, but it conditioned its approval by restricting the types of land uses EID could serve on the Rancheria. LAFCO authorized EID to supply water to the Rancheria only for residential and accessory uses, and only in an amount necessary to serve a community of no more than 40 residential lots. LAFCO reserved jurisdiction to amend or eliminate the conditions. Neither the Tribe nor EID have ever formally challenged these conditions, but the Tribe has disputed their validity in the most recent negotiations with EID.

The Tribe proposed constructing a casino and hotel on the Rancheria pursuant to the Indian Gaming Regulatory Act (25 U.S.C. § 2701 et seq.) The Tribe also proposed an interchange connecting the Rancheria to U.S. Highway 50. The National Indian Gaming Commission (NIGC) and the federal Bureau of Indian Affairs (BIA) reviewed the proposed casino and hotel's environmental impacts pursuant to the National Environmental Policy Act (42 U.S.C. § 4321 et seq. (NEPA)). The California Department of Transportation (Caltrans) did the same for the proposed interchange pursuant to CEQA and NEPA. Both reviews discussed the issue of water supply for the project.

The environmental assessment (EA) prepared by the NIGC and the BIA in 2001 for the casino and hotel explained there were two options for delivering water to the project: having water supplied and delivered by EID through an existing three-inch water meter, or having water trucked to the site on a daily basis by a private company. According to the 2001 EA, the project would require an estimated 98,000 gallons per day to meet peak demand, and 75,700 gallons per day to meet average demand. The firm peak day requirement was estimated to be 70 gallons per minute.

The existing three-inch water meter is capable of delivering a maximum continuous flow of 250 gallons per minute. It thus had sufficient capacity to deliver the projected peak day flows of 70 gallons per minute. The 2001 EA noted, however, that the dispute over the validity of the annexation conditions LAFCO imposed on EID's delivery of water to the Rancheria would have to be resolved before EID could supply the additional water.

Assuming the dispute over the LAFCO conditions could be resolved, the 2001 EA concluded EID's delivering water to the Rancheria would have a less-than-significant impact on the provision of public services. It also concluded the project would create no cumulative impacts on the provision of public services because the project would be accommodated by existing and planned water supplies.

If the dispute over the LAFCO conditions could not be resolved, the Tribe would have to truck water into the Rancheria to serve the casino and hotel. The 2001 EA estimated this form of delivery would require 25 truck trips per day to provide sufficient water.

The parts of the 2001 EA included in the record do not analyze or discuss any impacts on the physical environment that could be caused by either method of water delivery.

The EIR prepared by Caltrans in 2002 for the proposed interchange on U.S. Highway 50 simply relied upon the 2001 EA's conclusion of a less-than-significant impact on water supply for its discussion of effects caused by delivering water to the casino.

Relying on these reviews, the federal and state agencies approved the casino and interchange projects. Litigation against both environmental documents ran its course, and the casino and interchange have been constructed and are in operation today.

Meanwhile, controversy arose in 2002 concerning LAFCO's conditions on EID's provision of water to the Rancheria. The Tribe sought increased water service from EID, but EID adhered to the restrictions. At the request of two state legislators, the Legislative Counsel of California issued two opinions addressing the validity of LAFCO's conditions. The first opinion concluded the restrictions were valid under state law. The second opinion more generally concluded LAFCOs were not authorized to make land use decisions involving sovereign tribal lands.

At the end of 2002, and after reviewing the opinions from Legislative Counsel, EID reaffirmed its position that the conditions imposed by LAFCO were valid.

The Tribe threatened civil rights litigation against EID to challenge its enforcement of the conditions. In 2004, EID and the Tribe entered into a tolling agreement to forestall the litigation, and they continued settlement discussions.

In 2008, the Tribe provided EID with a legal analysis prepared by the Office of the Solicitor for the federal Department of the Interior regarding the enforceability of LAFCO's conditions. Responding to a request for that analysis by the Tribe, the solicitor wrote: "[W]here LAFCO conditions respecting water delivery to the Tribe's Rancheria are concerned, an issue of fact might be whether the conditions were intended to regulate use of the Rancheria, or whether the conditions were serving an objective that is not preempted by federal law prescribing how federal land is to be used. There appears to be some evidence the LAFCO conditions were imposed even though water was available for delivery to the Rancheria, which suggests the conditions may have been imposed, at least in part, to regulate use of the land. Moreover, the conditions limit use of the land to 'residential use' for 'a community of forty residential lots'. In the event the record reflects that the conditions imposed by LAFCO regulate land use rather than water delivery, we agree a court is likely to find the LAFCO conditions are preempted by federal law because they conflict with the federally prescribed use of the land."

Armed with this opinion, EID decided to change its position regarding the validity of the LAFCO conditions and enter in a memorandum of understanding (MOU) to provide water to the Rancheria in an amount that exceeded the amounts LAFCO authorized. Counsel for EID, relying on the solicitor's analysis, concluded the LAFCO restrictions were invalid, and EID's Board of Directors approved the MOU with the Tribe on May 28, 2008.

Under the MOU, EID agreed to provide water to the Rancheria at a maximum rate of 95 gallons per minute, with a total average volume of 135,000 gallons per day. For purposes of determining EID's compensation for the water, the MOU calculated the total water usage by the Rancheria to equal 260.74 equivalent dwelling units (EDUs): 45 EDUs for the existing service, and an additional 215.74 EDUs for the increased service to the casino.

The water would be drawn from existing sources and delivered through existing pipelines. The only necessary physical improvements would be relocating the existing three-inch water meter, which would continue to be the single point through which EID would deliver the water to the Rancheria, and installing a short section of pipeline linking the meter to an existing water main, both of which would occur on tribal land.

In reviewing the project as required by CEQA, EID determined that neither the method of delivery nor the quantity of water to be delivered would result in any significant impact to the environment or to levels of service to any existing EID customers. Accordingly, it issued a notice of exemption from CEQA. The notice stated the project was exempt from CEQA pursuant to a categorical exemption known as a class 3 exemption for new ...


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