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City of Hesperia v. Lake Arrowead Community Services District

California Court of Appeals, Fourth District, First Division

July 19, 2019

CITY OF HESPERIA, Plaintiff and Respondent,
v.
LAKE ARROWHEAD COMMUNITY SERVICES DISTRICT ET AL., Defendants and Appellants.

          APPEAL from a judgment of the Superior Court of San Bernardino County, No. CIVDS1602017 Donald R. Alvarez, Judge.

          Best Best & Krieger, Howard B. Golds and Lindsay D. Puckett for Defendants and Appellants.

          Aleshire & Wynder, Eric L. Dunn, June S. Ailin and Nicholas P. Dwyer for Plaintiff and Respondent.

          IRION, J.

         Over the years since at least 1959, the Legislature has attempted to achieve a balance between the state's interest in allowing local agencies to produce, generate, store, and transmit water or electrical energy and the cites' and counties' control over local building and zoning. This appeal requires the court to consider whether a solar energy project proposed by a local agency, the Lake Arrowhead Community Services District (District), is exempt from-or whether the District must comply with-the zoning ordinances of the city in which the project is to be developed, the City of Hesperia (City).

         Our analysis begins with the statutory requirement that, for purposes of a proposed solar energy project, a local agency must comply with the zoning ordinances of the city and county in which the project's facilities are to be constructed or located. (Gov. Code, § 53091, subd. (a); further undesignated statutory references are to the Government Code.) Then, as potentially applicable here, section 53091, subdivision (e) (§ 53091(e)), and section 53096, subdivision (a) (§ 53096(a)), each provides the agency with an exemption for the location and construction of certain types of facilities. Section 53091(e) provides an absolute exemption for "the location or construction of facilities... for the production or generation of electrical energy"-unless the facilities are "for the storage or transmission of electrical energy," in which event the zoning ordinances apply. Section 53096(a) provides a qualified exemption for an agency's proposed use upon, first, a showing that the development is for facilities "related to storage or transmission of water or electrical energy" and, second, a resolution by four fifths of the agency's members that "there is no feasible alternative to [the agency's] proposal."

         In the present case, the District adopted a resolution that its proposed solar energy project was both (1) absolutely exempt from the City's zoning ordinances under section 53091(e) and (2) qualifiedly exempt under section 53096(a), following the requisite determination that there was no feasible alternative to the proposed location of the project. The City successfully challenged the resolution in the underlying superior court proceedings, where the court issued a judgment in favor of the City and a related writ of mandate directing that the District and its board comply with the City's zoning ordinance prior to implementing the project.

         We affirm. As we explain, because the District's proposed project includes the transmission of electrical energy, the exemption contained in section 53091(e) does not apply to the project; and because the administrative record does not contain substantial evidence to support the District's board's finding that there is no feasible alternative to the proposed location of the project, the District prejudicially abused its discretion in determining that the exemption contained in section 53096(a) applied to the project.

         I. FACTUAL AND PROCEDURAL BACKGROUND[1]

         The dispute in this matter is between the District, which is attempting to develop a solar energy project on property it owns within the City's limits, and the City, which is attempting to enforce its zoning regulations.

         A. Introduction

         The District is a community services district, established in 1978 pursuant to section 61000 et seq. Although community services districts may be authorized to provide various governmental services (e.g., water, trash, street lighting, fire protection, parks and recreation, etc. (§ 61100)), the District is authorized only to provide water and wastewater treatment services within its boundaries, which are sometimes referred to as the Lake Arrowhead community.[2] A September 2014 report from the United States Department of the Interior indicates that the District served approximately 8, 000 water customers and 10, 500 wastewater customers in the Lake Arrowhead community.

         The District owns and uses portions of a 350-acre area known as Hesperia Farms to discharge and percolate treated effluent from its water reclamation facilities in Lake Arrowhead into the Mojave River groundwater basin. The proposed solar energy project, which we describe in more detail at part I.B., post, is to be located on Arrowhead Lake Road in the far eastern portion of the City (Project Site), which consists of five to six acres of Hesperia Farms not being used for wastewater operations.

         At all times, the Project Site has been located within an area the City has zoned as "Rural Residential" and has designated as "Rural Residential 0 0.4 units per acre" under the City's general plan. Section 16.16.063 of the City's Municipal Code (HMC) deals generally with alternative energy technology standards, and subsection (B) deals expressly with "solar farms";[3] and the parties agree that the District's proposed project qualifies as a solar farm for purposes of this ordinance. HMC section 16.16.063(B) provides in relevant part: "Solar farms shall only be allowed on nonresidential and nonagricultural designated properties with approval of a conditional use permit by the planning commission. Solar farms shall not be permitted within six hundred sixty (660) feet of a railway spur, any interstate, highway, or major arterial, arterial, or secondary arterial roadway; or any agricultural or residentially designated property." (<https://library.municode.com /ca/hesperia/codes/code_of_ ordinances/237774?nodeId=TIT16DECO_CH16.16LAUSDE_ARTIIIADUS_16.16.063ALENTEST> [as of July 19, 2019].)

         B. The District's Hesperia Farms Solar Photovoltaic Project & the City's Objections

         In January 2014, the District received an analysis from an outside engineering consultant regarding the potential development of solar power at its Hesperia Farms site (the Solar Project). In June 2014, the District's board of directors (Board) created a Solar Power Alternatives Ad Hoc Committee which then considered presentations from three solar power vendors for the Solar Project.

         By late May of 2015, the City provided the District with comments to an Initial Study and Mitigated Negative Declaration for the Solar Project (initial mitigated negative declaration) that the District prepared and circulated pursuant to the California Environmental Quality Act (CEQA). According to the City, the Solar Project was "a 0.96 megawatt solar facility on five to six acres within the City" with "a total of 2, 160 solar panels" on a site that "will continue to be used for growing forage crops and disposal of treated effluent that is generate by wastewater treatment plants in Lake Arrowhead." More specifically, the City commented that the initial mitigated negative declaration both "requires a general plan amendment and zone change to be [filed] with the City" and "does not address how the project will avoid being within 660 feet from the property to the south, which is agriculturally designated," in violation of HMC section 16.16.063(B) (which precludes solar farms within 660 feet of agriculturally designated property).

         In August 2015, the District entered into a generator interconnection agreement with Southern California Edison Company (Edison), whereby the District's Solar Project would produce electricity for use by Edison through Edison's electrical grid distribution system in exchange for bill credits that Edison would apply to the District's ongoing obligations to Edison for energy use at any location in the District.[4] To this end, in October 2015, the Board passed a resolution that authorized and approved the award of an energy services agreement to SunPower Corporation, Systems (SunPower), subject to conditions not relevant to this appeal.[5] Pursuant to this resolution, in November 2015, the District and SunPower entered into a formal "Engineering, Procurement and Construction Agreement," according to which SunPower agreed to design, engineer, construct, and install a 939.6 kW-dc single-axis tracking solar photovoltaic generation system at the Project Site.

         Following consideration of the comments from the City (described ante) and others in response to the May 2015 initial mitigated negative declaration, the District gave notice of "a public hearing at which the Board may make findings pursuant to Section 53096 of the Government Code that there is no feasible alternative to the proposed location of the solar project at the Hesperia Farm Solar Photovoltaic Project Site and that, by four-fifths vote of the Board, the City of Hesperia's zoning ordinance is, therefore, rendered inapplicable."[6] The City responded to the notice, repeating its original objections-namely, that the Solar Project required an amendment to the City's general plan and a change in location to avoid a violation of HMC § 16.16.063(B)-and setting forth its position in opposition to the District's potential actions to render the City's local land use regulations inapplicable to the Solar Project.

         At the District's December 15, 2015 meeting, the Board adopted resolution No. 2015-14, which rendered the City's zoning ordinances inapplicable to the District's Solar Project. In part, this resolution provides as follows:

         "2. The Board finds and determines that the [Solar] Project constitutes facilities for the generation of electrical energy, and therefore meets the criteria for exemption from... City of Hesperia zoning ordinances under Government Code section 53091, subdivision (e).

         "3. The Board finds and determines that for over a year the District's Solar Power Alternatives Ad Hoc Committee and SunPower met on numerous occasions and, with District staff, thoroughly reviewed and analyzed all potential locations for the [Solar] Project. The District does not own any other property that has the acreage and necessary components for a successful solar project due to terrain, trees, and weather conditions. Further, in order to comply with the City's solar ordinance, the District would have to redesign and relocate the Project away from the nearest residentially designated property, which would include the installation of additional AC conductor between the solar array and the Point of Interconnection [with Edison's grid]. This would result in a significant cost increase, measurable power loss, and project delay.

         "4. Thus, the Board finds it is not feasible to install the solar photovoltaic system at any other locations other than the [Project Site].

         "5. Based on the above-findings, the Board finds and determines that pursuant to Government Code section 53096, there is no feasible alternative to the location of the [Solar] Project at the Hesperia Farms site, by four-fifths vote of the Board, City of Hesperia zoning ordinances, including but not limited to, City of Hesperia Ordinance No. 2012-07[7], are rendered inapplicable to the Project. (Sic.)"

         The District gave, and on December 18, 2015, the City received, notice of the Board's December 15 action, including a copy of resolution No. 2015-14.

         C. The Litigation

         In February 2016, the City filed the underlying action-i.e., a petition and complaint-seeking a writ of mandate and declaratory and injunctive relief. The City named as respondents/defendants the District and the Board and named as real parties in interest SunPower, Edison, and a third party with which the District had contracted related to the Solar Project. The District, the Board, and SunPower filed answers to the petition/complaint. Edison and the third party filed disclaimers of interest in the dispute, and the City dismissed the action without prejudice as to these two real parties in interest.

         All three causes of action are based on the City's contentions that the Solar Project is beyond the scope of the District's authority and that the siting, development, and construction of the solar farm are subject to the City's zoning ordinances. In the first cause of action, the City alleged that the District lacked the authority to undertake the Solar Project, because the District was only authorized to provide water and wastewater treatment service, yet the anticipated services associated with the Solar Project involved the provision of electricity. In the second cause of action, the City alleged that the District was not exempt from the City's zoning ordinances. In the third cause of action, the City sought declarations, consistent with the first two causes of action, that the Solar Project was both beyond the scope of the District's authority and subject to the City's zoning regulations.

         The trial court conducted proceedings in mandate on the first two causes of action. (Code Civ. Proc., § 1084 et seq.) Following an opening brief by the City, the District filed an opposition (in which SunPower joined), and the City filed a reply to the opposition. Counsel for the parties presented oral argument, after which the court took the matter under submission, ultimately issuing a written ruling in October 2016.

         Deciding that the District has authority under the RES-BCT Program (Pub. Util. Code, § 2830) to produce electricity for Edison, the trial court denied the writ of mandate under the first cause of action.

         The trial court granted the City's requested relief as to the second cause of action, issuing the writ of mandate, on the following grounds: The exceptions found at sections 53091(e) and 53096(a)-which, if applicable, would exempt the Solar Project from the City's zoning ordinances-do not apply to the Solar Project; and the administrative record does not contain substantial evidence to support the District's finding that there is no feasible alternative to installing the solar farm at any location other than the Project Site.

         At the City's request, the trial court dismissed the third cause of action for declaratory relief.

         In December 2016, the court entered judgment consistent with its October 2016 written ruling; and in February 2017, the court entered the same judgment with a copy of the written ruling, nunc pro tunc to the December 2016 date (Judgment).[8] In summary, the Judgment ordered in part as follows: The requested relief in the first cause of action (based on whether the District has the authority to produce electricity) is denied; the requested relief in the second cause of action (based on whether the District must comply with the City's zoning ordinances) is granted; and a writ of mandate shall issue, requiring the District and the Board either to comply with the City's zoning ordinances prior to implementing the Solar Project or, alternatively, to forego the project.[9]

         The District timely appealed from the Judgment.

         II. DISCUSSION

         On appeal the District challenges the rulings of the trial court on the second cause of action in which the court granted a writ of mandate, ruling in part that the District's Solar Project was not exempt from the City's zoning ordinances. According to the District, the trial court erred by incorrectly interpreting, and thus in failing to apply, both the absolute exemption in section 53091(e) and the qualified exemption in section 53096(a). We disagree. As we explain, because the District's Solar Project includes the transmission of electrical energy, the exemption contained in section 53091(e) does not apply to the project; and because the administrative record does not contain substantial evidence to support the Board's finding that there is no feasible alternative location for the Project Site, the exemption contained in section 53096(a) does not apply to the project.

         A. Standards of Review

         In the second cause of action, the City sought both ordinary mandamus (Code Civ. Proc., § 1085) and administrative mandamus (Code Civ. Proc., § 1094.5) relief. "Traditional mandate [under Code of Civil Procedure section 1085] lies to challenge an agency's failure to perform an act required by law"; whereas "[a]dministrative mandate [under Code of Civil Procedure section 1094.5] applies to challenge the results of an administrative hearing."[10] (Danser v. Public Employees' Retirement System (2015) 240 Cal.App.4th 885, 890.) "It is not inconsistent to award relief under both sections 1094.5 and 1085 of the Code of Civil Procedure." (Conlan v. Bonta (2002) 102 Cal.App.4th 745, 752.)

         With regard to ordinary mandamus (Code Civ. Proc., § 1085), the City alleged in the second cause of action: "The District has a plain, clear and ministerial duty to comply with the City's zoning ordinances and its failure to comply with the City's zoning ordinances is arbitrary and capricious. The City has no plain, speedy and adequate legal remedy. Therefore, the City is entitled to a writ of mandate compelling the District to comply with City's zoning ordinances." With regard to administrative mandamus (Code Civ. Proc., § 1094.5), the City alleged in the second cause of action: "The absence of substantial evidence to support the District's findings of infeasibility [under section 53096(a)] renders its findings arbitrary and capricious." Throughout the proceedings, the parties and the trial court have, often without explanation, conflated concepts associated with ordinary mandamus and administrative mandamus.[11] Under these circumstances, we will not rely on the labels presented or the statutes cited; instead, we have considered the substance of the City's challenge to the District's action and the trial court's handling of the specific challenge. (See Travis v. County of Santa Cruz (2004) 33 Cal.4th 757, 769, fn. 5 ["where the entitlement to mandate relief has been adequately pled, 'a trial court may treat a proceeding brought under Code of Civil Procedure section 1085 as one brought under Code of Civil Procedure section 1094.5' "].)

         Accordingly, on the record before us, given the issues, the briefing, and the trial court's ruling-and, in particular, the City's challenge to the District's resolution No. 2015-14, in which the Board, in an exercise of its discretion, determined that there was no feasible alternative to installing the solar farm at any location other than the Project Site-we will proceed under administrative mandamus, Code of Civil Procedure section 1094.5.

         On review of an administrative mandamus judgment, the inquiry is "whether there was any prejudicial abuse of discretion." (Code Civ. Proc., § 1094.5, subd. (b).) For purposes of this analysis in the present appeal, an abuse of discretion is established "if the [agency] has not proceeded in the manner required by law" (Code Civ. Proc., § 1094.5, subd. (b)) or "if the court determines that the findings are not supported by substantial evidence in the light of the whole record" (Code Civ. Proc., § 1094.5, subd. (c)).[12]"' "In [administrative] mandamus actions, the trial court and appellate court perform the same function"' "; "we do not 'undertak[e] a review of the trial court's findings or conclusions. Instead, "we review the matter without reference to the trial court's actions." '" (Jefferson Street Ventures, LLC v. City of Indio (2015) 236 Cal.App.4th 1175, 1197 (Jefferson Street Ventures).) Appellate review of the agency's factual determinations in administrative mandamus proceedings is "deferential," and "the agency's findings must be upheld unless arbitrary, capricious, or entirely lacking evidentiary support." (State Bd. of Chiropractic Examiners v. Superior Court (2009) 45 Cal.4th 963, 977.)

         "' "When we interpret a statute, '[o]ur fundamental task... is to determine the Legislature's intent so as to effectuate the law's purpose. We first examine the statutory language, giving it a plain and commonsense meaning. We do not examine that language in isolation, but in the context of the statutory framework as a whole in order to determine its scope and purpose and to harmonize the various parts of the enactment. If the language is clear, courts must generally follow its plain meaning unless a literal interpretation would result in absurd consequences the Legislature did not intend. If the statutory language permits more than one reasonable interpretation, courts may consider other aids, such as the statute's purpose, legislative history, and public policy.'" '" (Meza v. Portfolio Recovery Associates, LLC (2019) 6 Cal.5th 844, 856 (Meza).) In construing a statute, the court is required "to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted, or to omit what has been inserted; and where there are several provisions or particulars, such a construction is, if possible, to be adopted as will give effect to all." (Code Civ. Proc., § 1858.) For these reasons, appellate review of the trial court's interpretation of a statute is de novo. (Flethez v. San Bernardino County Employees Retirement Assn. (2017) 2 Cal.5th 630, 639 (Flethez) [administrative mandamus proceedings].)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Section 53091(e) Does Not Provide an Exemption From the City's Zoning ...


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