From Casetext: Smarter Legal Research

Grand Petroleum, Inc. v. Cnty. of Fresno

COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT
Oct 18, 2019
No. F078035 (Cal. Ct. App. Oct. 18, 2019)

Opinion

F078035

10-18-2019

GRAND PETROLEUM, INC., Plaintiff and Appellant, v. COUNTY OF FRESNO, Defendant and Respondent. SHAWN SHIRALIAN, Real Party in Interest and Respondent.

Beveridge & Diamond, Kaitlyn D. Shannon and David H. McCray for Plaintiff and Appellant. Thornton Davidson and Thornton Davidson for Defendant and Respondent. Yarra Law Group and H. Ty Kharazi for Real Party in Interest and Respondent.


NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 17CECG03813 )

OPINION

APPEAL from a judgment of the Superior Court of Fresno County. Kristi Culver Kapetan, Judge. Beveridge & Diamond, Kaitlyn D. Shannon and David H. McCray for Plaintiff and Appellant. Thornton Davidson and Thornton Davidson for Defendant and Respondent. Yarra Law Group and H. Ty Kharazi for Real Party in Interest and Respondent.

-ooOoo-

Millennium Acquisitions, LLC (Millennium) is a company owned by real party in interest Shawn Shiralian (Shiralian). It appears that Shiralian used to own a truck stop that was forced to relocate to accommodate the California High-Speed Rail Authority. Shiralian is now attempting to build a new large-scale truck stop along Interstate 5, at the Nees on-ramp on the Fresno County side east of the freeway. Although a sparsely populated area, there is already one truck stop operated by appellant, Grand Petroleum, LLC, at that location. Appellant's property is located on the Merced County side west of the freeway. Shiralian's request for a conditional use permit was approved after respondent, County of Fresno (the County), issued a mitigated negative declaration following an initial study conducted pursuant to the California Environmental Quality Act (CEQA; Pub. Resources Code, § 21000 et seq.).

All future statutory references are to the Public Resources Code unless otherwise indicated.

In this appeal, appellant challenges the propriety of the mitigated negative declaration and the issuance of the conditional use permit. Appellant's main CEQA arguments focus on water acquisition and treatment concerns. Appellant points out the area in question is designated as a "water-short" area, and the local water district refused to supply water to the project. These facts meant Shiralian was required to add a well and water treatment facility to ensure adequate water was available for the project. Appellant contends the initial study supporting the mitigated negative declaration failed to gather any data on the potential impact of drawing well water for the project and used unreliable data when analyzing the potential impact of treating the wastewater generated by both the treatment facility and project generally. Appellant further argues the administrative record contains substantial evidence that these aspects of the project may have significant environmental impacts, necessitating an environmental impact report (EIR) instead of a mitigated negative declaration. With respect to the conditional use permit, appellant argues the County abused its discretion in issuing the permit because it failed to follow its own general plan requirement that a hydrological study be conducted for any project arising in a water-short area.

In the following opinion, we conclude the County failed to comply with CEQA in conducting its initial study and that no reasonable person could find consistency with the County's general plan under the specific facts in this record. We therefore vacate the mitigated negative declaration and conditional use permit approved in this matter and remand with directions that the County comply with CEQA and their general plan going forward.

FACTUAL AND PROCEDURAL BACKGROUND

The facts of this case are fairly straightforward. In our recitation here, we focus on facts relevant to the issues raised in this appeal, summarizing them generally in this section and expanding upon them as needed in our discussion.

In February 2016, Shiralian requested a conditional use permit from the County in order to develop a large-scale truck stop near the Nees on-ramp of the I-5 near the Fresno and Merced county border. The area was immediately identified as a low-water area where hydrological testing may be required. The administrative record shows that the San Luis Water District would not provide surface water to the project. The March 13, 2016 Operations Statement (initial statement) explained water would be provided from a newly developed well and would be tested and treated according to Health Department standards. The initial statement further provided that solid and liquid wastes would be properly conditioned and treated then pumped to leach areas or used as landscape irrigation. The initial statement stated that daily water use would be 2000 gallons per day. It also included a well water study showing that there were contaminates in the water that might need to be treated to bring the water into compliance with applicable standards for use.

In response to this request, the County began its required review under CEQA. Immediate concerns were raised concerning how wastewater would be treated on the property based on independent water usage estimates much higher than the initial statement's 2000 gallons per day. Based in part on these concerns, the daily water usage estimate was modified to 26,179 gallons per day in the June 28, 2017 Revised Operations Statement (revised initial statement). In addition, Millennium submitted a July 2016 Soils Analysis and Sewage Feasibility Report conducted by O.S.T. System Designs, Inc. (O.S.T. Report) supporting the application. This study found that the property could adequately support a leach field style wastewater dispersal plan based on an estimated peak flow rate of 10,692 gallons per day. The O.S.T. Report was qualified, however, in that it stated: "In the event that changes occur in the design of the project, this report's recommendations will not be considered valid unless the changes are reviewed with O.S.T. System Designs, Inc. and the conclusions and recommendations are modified or verified in writing."

These documents, along with many others unrelated to the present appeal, were reviewed as the County conducted its initial study. This study resulted in an Evaluation of Environmental Impacts Report (Initial Study) that found the project will not have a significant effect on the environment. With respect to impacts "relating to aesthetics, air quality, biological resources, cultural resources, geology and soils, hydrology and water quality, transportation and traffic, and utilities and service systems," impacts identified were "determined to be less than significant with the identified Mitigation Measures" included in the Initial Study.

Considering geology and soils, the Initial Study asked whether the project would have soils capable of adequately supporting the use of septic tanks. It found the project would require an onsite water treatment system (OWTS) and relied upon the O.S.T. Report to find there would be a less than significant impact with mitigation incorporated. As mitigation measures, the Initial Study specifically stated the O.S.T. Report "indicates the subject parcel can support an Onsite Wastewater Treatment System (OWTS) for the proposed Interstate Freeway Interchange Commercial Development. Specific design and capacity details for the OWTS shall be submitted to the County of Fresno and the California Regional Water Quality Control Board for review and approval prior to issuance of building permits for each structure connecting to the OWTS." It further required that the design of the system "shall include the use of advanced treatment to reduce Biological Oxygen Demand (BOD) and nitrate levels in the wastewater. Specifications for grey water and black water treatment shall be clearly identified and addressed in the design of the OWTS."

With respect to issues of hydrology and water quality, the Initial Study again found any impacts less than significant with mitigation incorporated. The Initial Study stated, with respect to water discharge requirements and water quality standards:

"The proposed Interstate Freeway Interchange Commercial Development will connect to a proposed Onsite Wastewater Treatment System (OWTS). Further, a Sewage Feasibility Report was prepared for the proposed OWTS by O.S.T. System Designs, Inc. Pursuant to discussion in Section VI (Geology and Soils), this proposal may have impacts related to wastewater disposal; however, the Mitigation Measures included in Section VI (Geology and Soils) will reduce such impacts to a less than significant level.

"According to the California Regional Water Quality Control Board (Water Board), operation of the proposed OWTS requires compliance with the General Waste Discharge Requirements for Small Domestic Wastewater Treatment Systems, which requires the operator to submit a complete Report of Waste Discharge to the Water Board at least 140 days prior to operation of the OWTS. This mandatory requirement will be included as a Project Note."

The Initial Study stated with respect to the depletion of groundwater supplies:

"The subject parcel is located in a designated Water-Short Area and is currently devoid of structural improvements; however, a Private water well and a Public water well have been permitted and constructed thereon. Further, according to the Well Completion Report prepared for the Public water well, said well has an estimated yield of 300 gallons of water per minute. According to the [revised initial] [s]tatement provided for this project, it is estimated that the proposed Interstate Freeway Interchange Commercial Development will utilize approximately 26,179 gallons of water per day."

Despite these findings, no specific additional mitigation measures were identified in the document.

The Initial Study also considered the project's effects on utilities and service systems. In the context of whether the project would have sufficient water supplies available, it found the project would require a public water system that requires additional permitting. Accordingly, the Initial Study stated:

"The Applicant shall submit a permit application, technical report, application fee, and construction plans for the well and water distribution system to the State Water Resources Control Board, Division of Drinking Water for review and approval prior to construction and operation of the required water system. As a public water system, the Applicant must be able to demonstrate adequate technical, managerial and financial capacity to operate and maintain the water system in compliance with all State and federal regulations. An assessment of the technical, managerial and financial capacity of the proposed water system shall be included with the permit application submitted to the State Water Resources Control Board, Division of Drinking Water. The Applicant shall also demonstrate to the State Water Resources Control Board, Division of Drinking Water that the well proposed to provide drinking water meets drinking water standards. These mandatory requirements will be included as Project Notes.

"Prior to completion of the Site Plan Review (SPR) required for the proposed Interstate Freeway Interchange Commercial Development, the Applicant shall submit for any permits required by the State Water Resources Control Board, Division of Drinking Water for operation of a Non-Transient Non-Community Water System. Additionally, the Applicant shall comply with State mandatory permitting requirements as listed in the Project Notes for Unclassified Conditional Use Permit No. 3528. Further, proof of acceptance by the State regarding the design of the Non-Transient Non-Community Water System, and authorization from the State to operate the Non-Transient Non-Community Water System must be provided to the County prior to granting occupancy to the proposed Interstate Freeway Interchange Commercial Development. These requirements will be included in a Mitigation Measure to reduce adverse utility and service system impacts from the subject proposal to a less than significant level."

This later paragraph was identified as a specific mitigation measure required of the project. On the issue of adequate wastewater treatment, the report referred back to the discussion on geology and soils, adding nothing new.

The Initial Study, recommending a mitigated negative declaration, was eventually passed on to the Board of Supervisors of the County of Fresno (the Board), who reviewed the project for compliance with CEQA and consistency with the County's general plan, before voting on whether to grant the requested conditional use permit. The Board heard from staff and interested parties before voting to approve the request. In this review, the Board received a report from the planning commission staff recommending the Board adopt the mitigated negative declaration and approve the conditional use permit. The report reviewed aspects of both the Initial Study and whether the project complied with the County's general plan. On this later point, the report specifically looked at whether the project complied with Fresno County General Plan Policy PF-C.17 (PF-C.17), finding, "a Private water well and a Public water well have been permitted and constructed thereon. Further, according to the Well Completion Report prepared for the Public water well, said well has an estimated yield of 300 gallons of water per minute [(432,000 gallons of water per day)]. According to the [revised initial] [s]tatement provided for this project, it is estimated that the proposed Interstate Freeway Interchange Commercial Development will utilize approximately 26,179 gallons of water per day."

Throughout these processes, appellant provided comments and argument supporting its position that the Initial Study and proposed conditional use permit were improper. The Board rejected these arguments and granted the conditional use permit. Following that vote, appellant filed a writ petition with the Fresno County Superior Court. The trial court denied the writ, concluding appellant's arguments of harm were primarily speculative and lacking evidence in the record. This appeal timely followed.

DISCUSSION

Appellant's concerns cover both CEQA and the County's compliance with its general plan. We begin with appellant's CEQA arguments before proceeding to the general plan contention. CEQA

Appellant's CEQA arguments focus on the adequacy of the Initial Study supporting the County's decision to issue a mitigated negative declaration. Appellant first contends that the County improperly piecemealed the environmental analysis by failing to properly analyze potential impacts arising from treating groundwater drawn from the well on the property. Next, appellant contends the County failed to adequately investigate the environmental impacts on the relevant aquifer from utilizing groundwater for the project and in treating wastewater generated by the project. Finally, appellant contends the administrative record contains substantial evidence supporting a fair argument that the project may have a significant adverse impact on the environment relating to the management and disposal of brine waste, the possibility of drawing substantially more water than predicted, and the management and disposal of wastewater from the facility. In our analysis of these concerns, we shall begin with the allegations that the County failed to analyze the impacts of withdrawing well water, then proceed to the allegation the County failed to consider or adequately analyze the impacts of treating wastewater, before finally considering the fair argument questions.

CEQA Overview

Starting at a general level, CEQA is the embodiment of California's policy that "the long-term protection of the environment . . . shall be the guiding criterion in public decisions." (§ 21001, subd. (d).) The statutory scheme dictates a step-by-step process designed to determine whether a project or activity will have an impact on the environment. The process looks first to whether the law is triggered. It then considers at a general level what impacts, if any, will arise from the project or activity and, if the law's requirements are triggered, requires a full study of and report on the project, its impacts, and potential mitigation measures among other requirements. (See Architectural Heritage Assn v. County of Monterey (2004) 122 Cal.App.4th 1095, 1100-1101.) The report, referred to as an environmental impact report or EIR is often referred to as the " ' "heart of CEQA" ' " and the threshold for requiring an EIR is consistently described as a low bar. (Mejia v. City of Los Angeles (2005) 130 Cal.App.4th 322, 330-332.)

This case focuses on the second step, general consideration of what impacts may arise from the project or activity. This step is defined largely through a series of implementing guidelines promulgated by the state Natural Resources Agency, generally referred to as the CEQA Guidelines. It is known as an initial study. The initial study dictates whether the lead agency will adopt, as in this case, a mitigated negative declaration or proceed to completing an EIR. (See Sundstrom v. County of Mendocino (1988) 202 Cal.App.3d 296, 304-305 (Sundstrom).)

(Cal. Code Regs., tit. 14, § 15000 et seq.; hereafter CEQA Guidelines.)

"A lead agency considering a nonexempt project generally must 'conduct an initial study to determine if the project may have a significant effect on the environment' unless the lead agency 'can determine that an EIR will clearly be required for the project . . . .' ([CEQA] Guidelines, § 15063, subd. (a).)" (Lighthouse Field Beach Rescue v. City of Santa Cruz (2005) 131 Cal.App.4th 1170, 1180.) "[A]n initial study is the preliminary environmental analysis (see [CEQA] Guidelines, § 15365) and its purposes include '[p]rovid[ing] the lead agency with information to use as the basis for deciding whether to prepare an EIR or negative declaration,' '[e]nabl[ing] an applicant or lead agency to modify a project, mitigating adverse impacts before an EIR is prepared, thereby enabling the project to qualify for a negative declaration,' and '[p]rovid[ing] documentation of the factual basis for the finding in a negative declaration that a project will not have a significant effect on the environment.' ([CEQA] Guidelines, § 15063, subd. (c)(1), (2), (5).)" (Ibid.)

"The scope of the environmental review conducted for the initial study must include the entire project. Specifically, '[a]ll phases of project planning, implementation, and operation must be considered in the initial study of the project.' " (Tuolumne County Citizens for Responsible Growth, Inc. v. City of Sonora (2007) 155 Cal.App.4th 1214, 1222 (Sonora).) Failing to analyze all aspects of the project in the first instance, and particularly conducting environmental reviews in stages, is generally referred to as piecemealing a project and is improper under CEQA. "Thus, a correct determination of the nature and scope of the project is a critical step in complying with the mandates of CEQA." (Nelson v. County of Kern (2010) 190 Cal.App.4th 252, 267 (Nelson).)

"CEQA defines ' "[p]roject" ' to mean 'an activity which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and which is . . . [¶] . . . directly undertaken by any public agency.' [Citation.] The term 'activity' plays [a]n important role in the definition of 'project'—a role reflected in the statement that ' " 'project' refers to the underlying activity which may be subject to approval" ' and not the approval of that activity." (POET, LLC v. State Air Resources Bd. (2017) 12 Cal.App.5th 52, 73.) In other words, " '[t]he term "project" refers to the activity which is being approved and which may be subject to several discretionary approvals by governmental agencies. The term 'project' does not mean each separate governmental approval.' " (Sonora, supra, 155 Cal.App.4th at p. 1222.)

As noted, the goal of the initial study is to determine "if the project may have a significant effect on the environment." (CEQA Guidelines, § 15063, subd. (a); Friends of College of San Mateo Gardens v. San Mateo County Community College Dist. (2016) 1 Cal.5th 937, 945 (San Mateo).) "If there is substantial evidence that the project may have a significant effect on the environment, then the agency must prepare and certify an EIR before approving the project." (San Mateo, at p. 945.) In this context, substantial evidence " 'includes fact, a reasonable assumption predicated upon fact, or expert opinion supported by fact.' [Citation] 'Substantial evidence is not argument, speculation, unsubstantiated opinion or narrative, evidence that is clearly inaccurate or erroneous, or evidence of social or economic impacts that do not contribute to, or are not caused by, physical impacts on the environment.' " (Mejia, v. City of Los Angeles, supra, 130 Cal.App.4th at pp. 331-332.) The analysis considers the whole of the administrative record and looks to whether a fair argument can be made, regardless of whether other conclusions might also be reached. (Id. at p. 332.)

If, however, there is no such evidence, "no EIR is required" and the "agency instead prepares a negative declaration 'briefly describing the reasons that a proposed project . . . will not have a significant effect on the environment and therefore does not require the preparation of an EIR.' " (San Mateo, supra, 1 Cal.5th at p. 945.) In certain circumstances even "when an initial study shows a project may have significant environmental effects, an EIR is not always required. The public agency may instead prepare a mitigated negative declaration . . . if '(1) revisions in the project plans . . . before the proposed negative declaration and initial study are released for public review would avoid the effects or mitigate the effects to a point where clearly no significant effect on the environment would occur, and (2) there is no substantial evidence in light of the whole record before the public agency that the project, as revised, may have a significant effect on the environment.' " (Ibid.)

Standards of Review

Various components of the CEQA process are reviewed under differing standards. As a general matter, however, "we independently review the administrative record to determine whether [the lead agency] proceeded in a manner consistent with the requirements of CEQA." (Nelson, supra, 190 Cal.App.4th at p. 266.) Our " 'inquiry shall extend only to whether there was a prejudicial abuse of discretion,' " which " 'is established if the agency has not proceeded in a manner required by law or if the determination or decision is not supported by substantial evidence.' " (Lighthouse Field Beach Rescue v. City of Santa Cruz, supra, 131 Cal.App.4th 1170, 1182, italics omitted.)

Preparation of an initial study must comply with this standard. "Without a properly prepared initial study, the record may prove inadequate to permit judicial review of the agency decision." (Sundstrom, supra, 202 Cal.App.3d at p. 305.) Thus, "[w]here an agency fails to provide an accurate project description, or fails to gather information and undertake an adequate environmental analysis in its initial study, a negative declaration is inappropriate. [Citation.] An accurate and complete project description is necessary to fully evaluate the project's potential environmental effects." (Nelson, supra, 190 Cal.App.4th at p. 270.) The scope of a project "is a question of law that appellate courts independently decide based on the undisputed facts in the record." (Sonora, supra, 155 Cal.App.4th at p. 1224.) A lead agency also abuses its discretion when it improperly separates or avoids analyzing components of a project. (Id. at p. 1231; cf. San Joaquin Raptor/Wildlife Rescue Center v. County of Stanislaus (1994) 27 Cal.App.4th 713, 729-734 [EIR was inadequate as a matter of law, and certification an abuse of discretion, where complete project scope was not properly identified and considered].)

If a proper initial study has been conducted, the standard of review shifts to a de novo review of whether an EIR was required. Thus, in reviewing the final decision to issue a negative declaration, or mitigated negative declaration, we apply the " 'fair argument' test," asking whether the record shows substantial evidence supporting a fair argument that a proposed project may have significant effect on the environment. (City of Redlands v. County of San Bernardino (2002) 96 Cal.App.4th 398, 405.) "If such evidence exists, the court must set aside the agency's decision to adopt a negative declaration as an abuse of discretion in failing to proceed in a manner as required by law." (Ibid.)

Alleged Failure to Analyze Impacts of Withdrawing Well Water

Millennium's proposed project is situated in an area of land designated as "water short" and has been denied access to water from the local water district. Accordingly, Millennium's project relies on well water to provide the daily flow requirements of the project. Appellant argues that "there is no analysis of the potentially significant environmental impacts from withdrawing groundwater from an aquifer for the duration of the Project's operation." Appellant acknowledges that the Initial Study finds no significant impact on groundwater supplies or recharge and no net deficit in aquifer volume or a lowering of the local groundwater table, but contends the justification shows this component was not actually analyzed because the County's response states only that "a Private water well and a Public water well have been permitted and constructed," that "said well has an estimated yield of 300 gallons of water per minute," and that "the proposed [Project] will utilize approximately 26,179 gallons of water per day."

The County, for its part, makes what appears to be two arguments in response. First, the County seeks to support the water-usage estimate of 26,179 gallons per day while arguing appellant's contention that the project will conservatively utilize 43,000 gallons per day should be disregarded. The County next states, without citation, that "a development in a designated water[-]short area that is dependent upon its own supply of groundwater must pass a well yield test in order to receive a building permit." The County then states that the Initial Study shows this test was passed before noting "County planning staff elected not to require an aquifer study from Millennium based upon their knowledge of key factors related to this specific development" including it being sparsely populated, that appellant uses surface water, and that there are no large users of groundwater in the nearby area. It uses these points to argue this court may rely on the opinion of a city's expert planning personnel on matters within their expertise and alleges the "planning staff know that no one in the area is using this brackish water because it is worthless without the type of treatment that Millennium has agreed to provide."

On these points, the County points to the administrative record for the first two but provides no citation for the third. These citations show that the County was aware of a limited number of water users in the area and the amount of water they used or treated. They also show concerns that Millennium drilled its well prior to any land use approvals. But they do not shed any light on the relevant aqueduct used by Millennium for this project.

The heart of the County's position is a claim that the water used in this project is not significant in total and that those reviewing the project knew this, knew that no others were using the groundwater in the area, and thus reasonably concluded there was no significant environmental impact from the use of well water. Were this position supported in the administrative record, the County's claim would carry significant weight. However, the record does not support this claim. Rather, the County's discussion of its actions focuses only on the fact that Millennium was permitted and did install a well on its property that met the expected water needs for the project. From the initial correspondence with Millennium, through the documentation required to show the well produced 300 gallons per minute, and on to the discussion in the Initial Study, the primary focus of the participants was ensuring enough water could be provided to operate the project. But having enough water available says nothing about the impact using that water will have on the environment—whether positive, negative, or neutral.

Moreover, the County knew of the need to investigate the impact on the water reservoir from the earliest instance and was reminded of that fact by appellant in the comment process. An early review of the project's water impacts noted the potential need to determine the availability and sustainability of water for the project because the land is in a designated water-short area. Appellant specifically raised the failure to investigate the sustainability issue in their letter raising issues with the Initial Study. Despite the County's knowledge of this issue, and the clear need to investigate given the designation of a water-short area, nothing in the administrative record shows the County conducted any review of the aquifer being utilized to provide water for the project. While the well dug may have been large enough to provide adequate water for the project itself, its use could deplete the aquifer in a manner that substantially affects the environment. Without any analysis of this potential impact, the Initial Study is inadequate to permit judicial review of the County's decision, fails to analyze all potential impacts, and thus reliance on the document for this issue constitutes an abuse of discretion. (Nelson, supra, 190 Cal.App.4th at p. 270; Sundstrom, supra, 202 Cal.App.3d at p. 305.)

Alleged Failures Concerning Wastewater Disposal and Treatment

When it comes to wastewater treatment concerns, appellant alleges the County failed to consider how treating the total amount of wastewater from the project would affect the environment and, to the extent it did conduct an analysis, its conclusion was not based on substantial evidence. Appellant points to the fact the planned water system would require treatment to satisfy drinking water standards to argue that the County failed to consider how disposal and treatment of the highly saline water byproduct (i.e.—a brine solution) might affect the environment. Appellant also contends improper piecemealing occurred because the County relied on the fact that future permits would issue to avoid conducting a complete analysis of the wastewater system. To the extent the County conducted a wastewater analysis, appellant contends the report relied upon by the County was invalid on its own terms because it utilized an outdated figure for the daily water usage on the site, and thus could not constitute a proper basis for the County to determine a mitigated negative declaration was appropriate.

The County disputes appellant's contentions. On the issue of brine solutions, the County argues the Initial Study fully mitigates any potential negative impact because the project notes require that "[f]acilities proposing to use and/or store hazardous materials and/or hazardous wastes shall meet the requirements set forth in the California Health and Safety Code." According to the County, the obligation to follow the law in storing or treating hazardous materials is a sufficient mitigation measure to comply with CEQA.

With respect to demonstrating a plan to treat the full amount of wastewater from the project, the County relies upon two reports within the record, by The Twining Laboratories, Inc., relating to previous projects that were planned for the property. The first is a 1984 report covering a project with two gas stations, a 150-seat restaurant, a mini mart, and bathroom/shower facilities. The second, from 1988, was a smaller, consolidated version of the first project. The County argues these reports, which show various options for wastewater treatment of similar water quantities as the proposed project, demonstrate substantial evidence supported the conclusion that the wastewater treatment plan satisfied CEQA because Millennium has provided a satisfactory water treatment plan for a smaller water usage figure, and these plans demonstrate it can be scaled within the property.

The County's arguments fail on both issues. On the first issue, evaluation of brine solutions, the County concedes in its briefing that brine solutions qualify as hazardous materials under certain circumstances but may be subject to exemption from that status if certain conditions are met. This concession leaves little doubt that the storage, management, and production of brine solutions could have a negative impact on the environment and, thus, should have been looked at in the Initial Study. The County attempts to argue such a review was conducted because the project notes require compliance with certain laws regulating use and storage of hazardous waste. But a review of the Initial Study itself demonstrates that the only hazardous materials considered and reviewed were those relating to the storage and sale of gasoline products.

As appellant correctly notes, with no analysis of the amount of waste generated, the manner in which it will be treated, or any specific mitigation requirement in the Initial Study, the County's suggestion that hazardous material laws must be followed is meaningless in the context of the project's use and storage of brine solutions. It is notable given the lack of evidence in the Initial Study on this issue that the mitigation measures do not specifically require compliance with the requirements for exempting brine solutions from the hazardous material laws or otherwise ensure the creation and storage of brine solutions is adequately mitigated. (See Health & Saf. Code, § 25143.6, subd. (a).) As the Initial Study does not indicate what amount of brine solutions may be present at the site, it is unclear whether even the state-mandated baseline reporting requirements identified in the Initial Study are triggered in the first instance. As with the need to consider the potential effects of groundwater withdrawal on the relevant aquifer, even if the mitigation measures may turn out to be simple or readily known, the complete failure to look at relevant issues is an abuse of discretion under CEQA. (See Sundstrom, supra, 202 Cal.App.3d 296, 308-309 [having no relevant data on relevant issue evades duty to engage in environmental review].)

Turning to the wastewater analysis requirement, the contentions in this case, although raised under several angles, essentially question whether the Initial Study adequately determined that a wastewater treatment system could be placed on the property that would handle the expected wastewater discharge such that relying on future permitting requirements for such a system would ensure that there was no substantial environmental impact from the wastewater generated. We agree that the Initial Study's conclusion was not based on substantial evidence under the unique facts of this case.

The Initial Study in this case specifically found that a sewage feasibility report submitted in support of the project demonstrated an adequately sized wastewater treatment facility could fit on the property to handle wastewater treatment. The O.S.T. Report analyzed the feasibility of a wastewater treatment system that handled a maximum daily flow of 10,692 gallons. In doing so, it specifically noted that should "changes occur in the design of the project," including "an increase in wastewater flows," the "report's recommendations will not be considered valid unless the changes are reviewed with O.S.T."

Interestingly, the plans submitted with the report appear to show a potential 100 percent increase is possible in the size of the system, suggesting a revised opinion would not be a complicated task. However, this option is not discussed in the report and does not modify the specific discounting of the report's opinion if wastewater flows were to change.

The Initial Study, however, did not review a project utilizing a maximum daily water flow of 10,692 gallons. Rather, as early as April 6, 2016, staff were raising concerns that a proper estimated wastewater flow for the project was 15,980 gallons per day. And by June 28, 2017, the initial statement for the project had been revised to reflect an estimated wastewater flow of 26,179 gallons per day. This later estimate is more than double the foundational assumption of the O.S.T. Report and therefore well outside any capacity reviewed in the record. By the time the Initial Study was presented, neither the record evidence cited nor any reasonable inference therefrom supported the conclusion that adequate soils existed to manage the expected wastewater flow of the project reviewed and, thus, the O.S.T. Report cannot serve as substantial evidence supporting the County's conclusion. (See Citizens for Responsible Equitable Environmental Development v. City of San Diego (2011) 196 Cal.App.4th 515, 522 [substantial evidence looks for enough relevant information and reasonable inferences to support a fair argument as to the conclusion reached].) Relying on this report to support the conclusion that the soils could adequately support the expected wastewater of the project was therefore an abuse of discretion.

The County alleges that additional evidence in the record, in the form of two prior CEQA-reviewed projects from the 1980's, show that substantial evidence supports the County's conclusion. As noted, these prior projects included septic systems that utilized wastewater flows closer in size to those of the proposed project. However, as appellant properly notes, these studies were not utilized by the County in reaching its conclusions. Further, we have been pointed to no place in the record where they were even reviewed by the County for the purposes of the current project and, in our own review of the record, have found none. In fact, the County admits in the context of its arguments that it could have chosen to utilize a subsequent review process and relied on these documents but "did not do so" and that ultimately "the County issued a new [mitigated negative declaration] with no mention of the prior [mitigated negative declaration]" derived from these studies. Upon review, it appears that these studies are only included in the record because an outside lawyer looking into whether comments would be provided on the project requested them. Thus, the record fails to reflect whether the analysis conducted on these projects is comparable to that needed in the present environmental review and provides no indication the County recognized any value in these studies, let alone knew of their existence. There is thus neither evidence nor a reasonable inference available that these documents support the County's decision.

These concessions undercut any reliance the County places on San Mateo, supra, 1 Cal.5th at p. 953 and Committee for Re-Evaluation of T-Line Loop v. San Francisco Municipal Transportation Agency (2016) 6 Cal.App.5th 1237, 1239-1257, both of which involved actual utilization of prior environmental studies by the relevant agency to streamline the required analysis.

As a mitigation measure to ensure the project would have soils capable "of adequately supporting the use of septic tanks or alternative disposal systems where sewers are not available for wastewater disposal," the Initial Study required that "[s]pecific design and capacity details for the OWTS shall be submitted . . . for review and approval prior to issuance of building permits for each structure connecting to the OWTS." Although raised in the context of piecemealing arguments, the County also argues that its review and acceptance of the wastewater treatment plan is adequate because the mitigation measures ordered required further review during the permitting process. We do not agree this corrects the identified flaw in the process.

Although it is correct that reliance on future permitting can be a satisfactory mitigation measure, such reliance requires a proper understanding of the scope of the project and sufficiently clear directives for mitigation that there is a commitment to mitigating the environmental concerns identified. (See Sundstrom, supra, 202 Cal.App.3d at p. 308 ["A condition requiring compliance with environmental regulations is a common and reasonable mitigating measure."]; North Coast Rivers Alliance v. Marin Municipal Water Dist. Bd. of Directors (2013) 216 Cal.App.4th 614, 647-648 [reviewing legal framework to show reliance on future permitting is adequate if specific thresholds are identified and enforced while commitment to general future analysis is not].) The mitigation measures involved here merely required submission of plans as a building permit was requested for each structure involved in the project. Notably, the County does not cite to any provisions of law or practice in the permitting process that would indicate how such a mitigation measure would ensure that the overall project complies with CEQA.

Nothing in the mitigation measures limits the project to only what can be accommodated by the proposed wastewater treatment plan or limits the project to only what is ultimately supported by the leach fields built. There is no suggestion in the mitigation measures that the cumulative amount of wastewater for all buildings must be considered in the analysis of each individual building permit. Further, while it appears likely that proper treatment would mitigate environmental concerns regarding even large quantities of wastewater, there is no indication that the County considered whether larger quantities of water could be managed by the site. As such, to the extent the County sought to rely on future permitting, it failed both requirements of such reliance, having no proper understanding of the scope of the project and insufficiently clear directives to ensure adequate mitigation occurred.

Fair Argument of Environmental Impact Argument

Appellant contends that in addition to the failures identified in the Initial Study, the record contains substantial evidence concerning a fair argument the project may cause significant environmental impacts, necessitating the creation of an EIR as opposed to a mitigated negative declaration. Specifically, appellant identifies what it contends are three fair arguments of significant environmental impact in the record. These are: "1) treating groundwater may cause significant environmental impacts through the management and disposal of waste generated by the treatment; 2) withdrawing more water than the Applicant's identified daily water use because of inefficiencies associated with treatment; and 3) managing and disposing more gallons of wastewater than the O.S.T. Report identified." Appellant further argues that the last two of these positions were not contested in the County's brief and, thus, should result in this court finding a fair argument exists and ordering the preparation of an EIR. We do not agree at this time.

Each of the arguments raised by appellant arises from issues surrounding the use and treatment of water on the project site. In this way, each is tied to the failures in the Initial Study identified above, which primarily concern whether necessary information was gathered and relied upon in conducting the Initial Study and adopting the mitigated negative declaration. Our prior analysis concludes that the County is obligated to analyze the effects of withdrawing and treating the water required for the project as part of the Initial Study in order that it may determine whether a mitigated negative declaration is, in fact, appropriate in this case. Accordingly, we need not reach whether a fair argument of significant environmental impact exists at this time.

It is the appellant's ultimate burden to "present substantial evidence of a fair argument that the mitigation measures are inadequate to avoid the potentially significant effects." (Citizens for Responsible & Open Government v. City of Grand Terrace (2008) 160 Cal.App.4th 1323, 1332.) While it is correct that courts will not allow agencies to hide behind a lack of information where the lead agency has failed to conduct a proper initial study, this does not mean an EIR is always required when a poor investigation has occurred. (See Sundstrom, supra, 202 Cal.App.3d at p. 310 [mechanical application of rule requiring substantial evidence of environmental impact would defeat purpose of CEQA where agency failed to undertake adequate study].) Indeed, when crafting remedies, courts may not limit the discretion of the lead agency. Thus, where a mitigated negative declaration may still be appropriate, an EIR should not be required. (Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086, 1121-1122.)

In this case, the lack of any information about the aquifer from which Millennium will draw its water leaves open the possibility that there will, in fact, be no substantial impact from the withdraw of water for the project. Similarly, the County's determination that roughly 10,000 gallons of wastewater per day could be fully mitigated, and the lack of investigation as to higher quantities, leaves open the possibility that mitigation may be appropriate for the higher figures as well. Finally, the ability to identify treatment waste as hazardous materials leaves open the possibility of mitigation through hazardous materials laws in the same way the presence of gasoline was managed. With each of these contentions, a finding of a fair argument at this time will not divest the County of its discretion to adopt another mitigated negative declaration. A finding of no fair argument will not cure the identified flaws in the Initial Study. Thus, while recognizing that appellant's arguments were factually supported by the record, we do not reach whether a fair argument exists requiring preparation of an EIR for the issues raised on appeal. General Plan Consistency

For similar reasons, we do not reach the apparent dispute regarding the actual water usage of the project—be it the 26,179 gallons utilized by the County or the 43,000 gallons estimated by appellant's expert. The County's further study of the issues raised in this appeal and its determination whether to again adopt a mitigated negative declaration or conduct an EIR will determine whether appellant's evidence of potentially higher water usage will rise to the level of a fair argument for further review.

Appellant also attacks the County's conclusion that the project complied with its general plan. Specifically, appellant contends the County failed to conduct specific studies required by PF-C.17, and thus could not legally base its finding of compliance with the policy on substantial evidence. Appellant requests we vacate the approval of the conditional use permit for the project and require the County to comply with PF-C.17. The County does not directly respond to these allegations, but instead argues its decision is entitled to deference and touts the fact that the approval is consistent with other general plan policies, such as those to encourage new industry and review the economic impacts of new projects. We agree with appellant that the approval was an abuse of discretion in this instance.

Standard of Review and Applicable Law

Cities and counties are required to adopt and follow a general plan that guides future development of their land, meaning that once adopted all "land use decisions must be consistent with the general plan and its elements." (Endangered Habitats League, Inc. v. County of Orange (2005) 131 Cal.App.4th 777, 782 (Endangered Habitats).) Consistency is found " ' " 'if, considering all its aspects, [the project] will further the objectives and policies of the general plan and not obstruct their attainment.' " ' " (Clover Valley Foundation v. City of Rocklin (2011) 197 Cal.App.4th 200, 238 (Clover Valley).) "Perfect conformity is not required," but a project "is inconsistent if it conflicts with a general plan policy that is fundamental, mandatory, and clear." (Endangered Habitats, at p. 782.) In this analysis, " 'the nature of the policy and the nature of the inconsistency are critical factors to consider' " because "general consistencies with plan polices cannot overcome 'specific, mandatory and fundamental inconsistencies' with plan policies." (Clover Valley, at p. 239.)

"We review decisions regarding consistency with a general plan under the arbitrary and capricious standard" asking "whether the decision is arbitrary, capricious, entirely lacking in evidentiary support, unlawful, or procedurally unfair." (Endangered Habitats, supra, 131 Cal.App.4th at p. 782.) The underlying decision " 'carries a strong presumption of regularity' " that can be overturned for a lack of evidence only if no reasonable person could have reached the same conclusion on the evidence before the agency. (Clover Valley, supra, 197 Cal.App.4th at p. 238.)

The County Could Not Find Compliance with the General Plan

The dispute in this case centers wholly on whether the County complied with PF-C.17, which obligates the County to "undertake a water supply evaluation," containing three parts, stating:

"The County shall, prior to consideration of any discretionary project related to land use, undertake a water supply evaluation. The evaluation shall include the following:

"a. A determination that the water supply is adequate to meet the highest demand that could be permitted on the lands in question. . . . If groundwater is proposed, a hydrogeologic investigation may be required to confirm the availability of water in amounts necessary to meet project demand. If the lands in question lie in an area of limited groundwater, a hydrogeologic investigation shall be required.

"b. A determination of the impact that use of the proposed water supply will have on other water users in Fresno County. . . . If use of groundwater is proposed, a hydrogeologic investigation may be required. If the lands in question lie in an area of limited groundwater, a hydrogeologic investigation shall be required. Should the investigation determine that significant pumping-related physical impacts will extend beyond the boundary of the property in question, those impacts shall be mitigated.

"c. A determination that the proposed water supply is sustainable or that there is an acceptable plan to achieve sustainability. The plan must be structured such that it is economically, environmentally, and technically feasible. In addition, its implementation must occur prior to long-term and/or irreversible physical impacts, or significant economic hardship, to surrounding water users." (2000 Fresno County Gen. Plan, policy PF-C.17, at pp. 4-6, 4-7 <https://www.co.fresno.ca.us/home/showdocument?id=18117> [as of Oct. 18, 2019] (Fresno County Gen. Plan).)

When recommending approval of the conditional use permit in this case, the planning commission staff report discussing the project found compliance with PF-C.17 utilizing the same analysis that was ultimately included in the Initial Study regarding the capacity of the well on the property, writing: "The subject parcel is located in a designated Water-Short Area and is currently devoid of structural improvements; however, a Private water well and a Public water well have been permitted and constructed thereon. Further, according to the Well Completion Report prepared for the Public water well, said well has an estimated yield of 300 gallons of water per minute. According to the [revised initial] [s]tatement provided for this project, it is estimated that the proposed Interstate Freeway Interchange Commercial Development will utilize approximately 26,179 gallons of water per day."

The County points to no other evidence in the record relating to the determination that the project complied with PF-C.17. In our review, we have only identified additional emails discussing the estimated yield from the well and brief testimony stating staff has determined the project is consistent with the policy as relevant to this determination.

Appellant points to this limited record to argue that no reasonable person could conclude that the project complied with all three aspects of PF-C.17 based on this evidence. We agree. To be consistent with this policy, three straightforward determinations must be made: (1) whether the water supply is adequate to meet the highest demand that could be permitted; (2) what impact use of the proposed water supply will have on other water users in Fresno County; and (3) whether the proposed water supply is sustainable. Even granting the County deference on its decision and reviewing the record with a presumption the County's conclusion was proper, at best we can conclude that only the first of these three determinations was made. The water yield of the well does appear to be adequate for the project's water needs. However, the total yield of the well tells us nothing of the impact drawing that level of water will have on other water users in Fresno County, nor does it indicate in any way whether that level of water use is sustainable. As both of these determinations are a necessary part of finding consistency with PF-C.17, no reasonable person could find consistency on the limited record presented.

Even if we were to review the evidence most favorable to appellant on this point, the 300-gallons-per-minute estimate demonstrates that the well could adequately supply projects in the 40,000 to 50,000-gallons-per-day range, the range estimated by appellant, in as little as roughly three hours. It is thus reasonable to infer that the supply is adequate to meet the highest demand that could be permitted for the property.

The County requests we defer to their balancing of various general policies contained within the general plan. However, such deference is not possible here. As noted above, " 'the nature of the policy and the nature of the inconsistency are critical factors to consider' " because "general consistencies with plan polices cannot overcome 'specific, mandatory and fundamental inconsistencies' with plan policies." (Clover Valley, supra, 197 Cal.App.4th at p. 239.) The County's general plan explains that the "use of the word 'shall' in a policy is an unequivocal directive." (Fresno County Gen. Plan, at p. 7.) It then goes on in PF-C.17 to state that the County "shall, prior to consideration of any discretionary project related to land use, undertake a water supply evaluation" and that this "evaluation shall include" the three determinations listed. (Fresno County Gen. Plan, at p. 4-6.) The County's compliance with other parts of the general plan cannot overcome the fact that, under the disputed policy, the County must undertake a specific water supply evaluation and that the County did not undertake that specific evaluation. A plea to deference simply cannot overcome a complete failure to abide by a mandatory obligation.

Appellant goes further in its argument, suggesting that because this project was in a designated "water-short" area, the policy mandates that a hydrogeologic investigation shall be required. On this point, appellant has not made its case. Appellant relies on the contention that a "water-short" area is "an area of limited groundwater" as identified in PF-C.17. However, the general plan does not define what it means to be an area of limited groundwater and appellant does not provide any legal authority or argument defining a "water-short" area as one that is of limited groundwater. It is entirely possible that a "water-short" area is simply one that is short of surface water, even if flush with groundwater. As nothing in the record or argument demonstrates that the "water-short" designation triggered the mandatory hydrogeologic investigation identified in PF-C.17, we do not agree that the failure to conduct such an investigation shows the project was inconsistent with PF-C.17.

DISPOSITION

The judgment is reversed. The matter is remanded to the superior court with directions to vacate its order denying the petition for writ of mandate and to enter a new order that grants the petition for writ of mandate and compels the County to set aside the Initial Study, mitigated negative declaration, and conditional use permit in this matter and to comply with CEQA and PF-C.17 as set forth in this opinion in any further proceedings. Costs are awarded to appellant.

/s/_________

HILL, P.J. WE CONCUR: /s/_________
FRANSON, J. /s/_________
SMITH, J.


Summaries of

Grand Petroleum, Inc. v. Cnty. of Fresno

COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT
Oct 18, 2019
No. F078035 (Cal. Ct. App. Oct. 18, 2019)
Case details for

Grand Petroleum, Inc. v. Cnty. of Fresno

Case Details

Full title:GRAND PETROLEUM, INC., Plaintiff and Appellant, v. COUNTY OF FRESNO…

Court:COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT

Date published: Oct 18, 2019

Citations

No. F078035 (Cal. Ct. App. Oct. 18, 2019)