On August 10, 2023 the Sixth District Court of Appeal filed its published opinion in Santa Rita Union School District v. City of Salinas (2023) 94 Cal.App.5th 298. On September 7, 2023, it filed an Order slightly modifying its opinion without modifying the judgment and denying rehearing. The case concerns the certification of an EIR for the “West Area Specific Plan” in and by the City of Salinas, and claims by two school districts in the City that asserted perennial underfunding meant that the EIR failed to adequately address school-related impacts. While the trial court agreed in part, granting narrow writ relief enjoining future entitlements while leaving the specific plan approval in place, the Sixth District did not, holding that the districts’ expressed concerns were speculative in nature and need not have been evaluated in the EIR.
Project Background and Litigation History
The Specific Plan covered 13 parcels comprising 797 acres, with a proposed development including up to 4,340 dwelling units with a maximum population increase of 15,928 new residents, as well as other uses including mixed use commercial, parks, open space, and schools. The Plan included three elementary schools (one already in existence), one middle school, and one high school (previously planned and already under construction). While the EIR noted that the anticipated new schools would entail significant and unavoidable environmental impacts, it also noted the actual development of the schools was up to the school districts, and that because the existence and design of those schools could not now be projected, future environmental review would be required prior to those schools being developed. The City treated the Specific Plan EIR, in part, as a program EIR, conceptualizing that future environmental review in the Specific Plan area, including the schools, could tier off the Plan EIR.
During the environmental review period, the school district petitioners submitted correspondence to the City expressing concern about school funding issues. In the EIR itself, the issue of impacts to existing schools was partially addressed by a mitigation measure requiring the payment of statutorily-capped development impact fees before the issuance of residential building permits. The Court summarized the EIR’s conclusion thus: “Government Code sections 65995 and 65996 provide that school-related impacts are fully mitigated under CEQA through payment of developer-impact fees set by local school districts under Education Code section 17620….” The EIR also noted that development of the schools will be up to the school districts and their projected need for the facilities.
The school districts commented on the draft EIR, asserting that impact fees are not sufficient to construct schools and that the EIR did not evaluate the possibility that the districts would have insufficient funding and would have to accommodate the new students at existing schools. In the FEIR, the City responded to these comments by stating that inadequate funding is not an issue to be addressed under CEQA, and that expansion of existing facilities to account for inadequate funding is an economic or social issue not cognizable under CEQA. The City also noted that the developer impact fees for schools are set by the districts, not the City. The City also responded that the contingency outlined by the districts was “too speculative, uncertain, and vague” because the new Specific Plan development would occur over a number of decades, during which the districts would be presented with a host of variables and scenarios relating to school capacity.
The City approved the Specific Plan and certified the final EIR for the project. The districts submitted additional comment letters during this process, reiterating the points they had previously made and also arguing that the EIR did not account for phasing or how the development would actually unfold over time.
Following the City’s certification of the FEIR and approval of the Specific Plan and related rezoning and development agreement, the districts sued the City over the project, alleging in their CEQA arguments that the EIR was deficient by its “fail[ure] to properly address the probability that funding will not be available to fund [the Plan’s contemplated] new school facilities,” and its assumption that school-related impacts would be limited to those stemming from the construction of new schools on new sites. The petitioners also argued that the City had not adequately responded to their comments in the FEIR.
The trial court ruled in favor of the petitioners as to the CEQA claim that the EIR should have included analysis of potential offsite impacts from the Specific Plan due to petitioners’ “concern” that they would not have adequate funding to build the proposed new schools, and that the City had not adequately responded to the districts’ comments in the FEIR. The City opted to comply with the trial court’s writ, but the real parties in interest (landowner applicants for the Specific Plan approvals) appealed.
The Court of Appeal’s Opinion
After addressing the issue of the timeliness of the RPI’s appeal, and the non-mootness of the appeal of real parties notwithstanding the City’s election to comply with the limited writ, the Court turned to the merits of the appeal. The opinion provides a thorough discussion of the applicable procedures and standards of review in CEQA actions before getting to the merits of the case. It characterizes the issue before it thusly:
Here, the central issue is whether the Final EIR for the Specific Plan was adequate under CEQA notwithstanding that it did not discuss the possibility that sufficient funding would never become available to build the contemplated new schools within the [Specific Plan] Site and, in that event, the Districts might be required to absorb increased student enrollment through alternatives. These included modifications to existing school facilities, some located outside the Project Site. And some of the possible alternatives potentially would present off-site and indirect environmental impacts.
With respect to the parties’ disagreement as to the standard of review, the Court sided with the petitioners, concluding that the question of adequacy of the EIR’s analysis of potential offsite impacts from funding shortfalls was not simply a question of whether the EIR was supported by substantial evidence, but implicated the sufficiency of the EIR as an informational document, involving mixed questions of law and fact.
The Court’s analysis was guided by cases such as Goleta Union School District v. Regents of University of California (1995) 37 Cal.App.4th 1025 and Chawanakee Unified School District v. County of Madera (2011) 196 Cal.App.4th 1016. The Goleta case held, for instance, that an EIR need not analyze or mitigate projected minor increases to a local school district student population resulting from the proposed project, as the project proponent had no responsibility to tell the district how to address capacity issues. In Chawanakee, the court recognized that later-enacted Government Code section 65996 limited the analysis and mitigation of impacts on school facilities by allowing and capping developer impact fees. It also recognized, however, that the statute limits analysis and mitigation of impacts on school facilities, but not additional spillover off-site effects from increased use or development of school facilities – e.g., increased dust, noise, traffic, etc. occurring outside the facilities.
While the trial court had been careful to note Chawanakee and the distinction it drew between impacts on schools and impacts from schools, the Court of Appeal concluded that the EIR had properly analyzed impacts as a result of the new schools contemplated by the Specific Plan project, which it properly assumed would be built in the Specific Plan area, including impacts from those schools. The EIR included an analysis of impacts from the new schools, as well as requiring developer impact fees under Government Code section 65996 as mitigation for impacts on the schools. While the districts complained that the EIR did not require that the project be phased over time, the Court stated that an EIR need not include such phasing, and that in any case the petitioners had not included any evidence in the record that the Specific Plan area would not gradually be built out over the estimated two to three decades. Likewise, the City was not required to address any supposed inadequacy in school funding or speculative possible scenarios arising under the presumption that such inadequacy does or will continue to exist.
This led to the Court’s ultimate conclusion that the petitioners had not provided any evidence of reasonably foreseeable impacts from the supposed perennial funding shortfalls. The Court agreed with the real parties that the information from the districts was uncertain and vague and thus could not, and need not, be further analyzed or responded to per Guidelines section 15145. Accordingly, the City’s responses to the districts’ comments were adequate given that the districts had not provided any substantial, non-speculative evidence of any reasonably foreseeable indirect impacts. The Court held that the City’s determination that the petitioners’ expressed concerns regarding potential impacts were speculative was itself a factual determination supported by substantial evidence to which judicial deference was owed. Thus, the Court reversed the judgment.
Given that residential development will often have school-related impacts, this case, including its useful explanation of Chawanakee, will prove helpful in addressing and clarifying the treatment of school-related concerns under CEQA. The Court of Appeal’s opinion, written by Santa Clara County Superior Court Judge Helen E. Williams, sitting by assignment, is also noteworthy as an extremely thorough and scholarly exposition, not only of the relatively discrete area of law relating to CEQA analysis and mitigation of school-related impacts, but of other significant legal topics including appealability of merits orders and judgments in writ cases; mootness in writ actions; CEQA’s principles governing EIRs and judicial review of EIRs; and the standards of review applicable to various issues in CEQA cases. The opinion would serve as an excellent teaching tool for law professors teaching CEQA and we would commend it as beneficial reading for any lawyers seeking to understand and practice in the complex field of CEQA and land use law.
Questions? Please contact Arthur F. Coon of Miller Starr Regalia. Miller Starr Regalia has had a well-established reputation as a leading real estate law firm for more than fifty years. For nearly all that time, the firm also has written Miller & Starr, California Real Estate 4th, a 12-volume treatise on California real estate law. “The Book” is the most widely used and judicially recognized real estate treatise in California and is cited by practicing attorneys and courts throughout the state. The firm has expertise in all real property matters, including full-service litigation and dispute resolution services, transactions, acquisitions, dispositions, leasing, financing, common interest development, construction, management, eminent domain and inverse condemnation, title insurance, environmental law and land use. For more information, visit www.msrlegal.com.