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Land Use and Water Supply: Newhall CEQA Decision Continues the Uncertainty
March 2003

In yet another decision exploring the link between land use and water supplies, the California Court of Appeal has tightened the screws on developers and local agencies proposing large-scale development projects. In Santa Clarita Organization for Planning the Environment v. County of Los Angeles (SCOPE), the Court invalidated an EIR prepared for Newhall Land and Farming Company's proposed "West Creek" project in the Santa Clarita Valley.

The EIR for the 2500-unit West Creek project -- prepared by the County of Los Angeles as lead agency -- included an analysis of the regional water demand and the supplies available to serve that demand. A significant component of the long-term water supply for the Santa Clarita Valley consisted of entitlements to the State Water Project (SWP) operated by the California Department of Water Resources (DWR). Because water deliveries from the SWP vary from year to year, and because the SWP has not been built to its originally-envisioned capacity, the EIR acknowledged some question about the long-term adequacy of the SWP supplies.

To address this uncertainty, the EIR assumed that SWP supplies might be reduced fifty percent (50%) during drought years. It also imposed mitigation measures requiring a demonstration of firm water supplies during the subdivision mapping process. The Court held that this was not enough. Citing recent judicial decisions questioning the reliability of the "paper water" entitlements offered by DWR -- including those held by the water purveyor in this case (Castaic Lake Water Agency) -- the Court held that the West Creek EIR should have contained a "detailed analysis" of the SWP supplies. As stated by the Court, this is necessary to ensure that "stubborn problems or serious criticisms are not 'swept under the rug.'"

This decision demonstrates the continued judicial heartburn over the proper link between land use and water supplies in California. Although recent amendments to CEQA and other provisions of state law (known as Senate Bill 221 and Senate Bill 610) sought to clarify some of this confusion, it is likely that the reasoning of SCOPE will apply to the implementation of these new laws.

For a history of the growing link between land use and water supplies, please see Where Does the Final Approval Authority Lie for New Development in California? The Long and Winding Road to SB 221 and SB 610, (November 2001, pdf format) and A Judicial Variation on the Chicken and the Egg Problem: Which Comes First the People or the Water, (February 2000, pdf format).