A recent published case out of California’s Fourth Appellate District is likely to have far-reaching effects on what Regional Water Boards are required to do to establish total maximum daily loads (TMDLs) and other water quality control plans. The case, of which the California Supreme Court denied review on April 19, 2006, carries significant implications as to the evidence, facts and analysis permittees and other interested parties will want to put into the public comment and hearing record in future proceedings.
In City of Arcadiav.State Water Resources Control Board, a number of permittee cities challenged the Los Angeles Regional Water Board’s adoption, and the State Water Board’s approval, of a trash-related total maximum daily load (the Trash TMDL) concerning the Los Angeles River and its surrounding watershed. The court held, in part, that the Water Board failed to prepare an environmental impact report (EIR) required by the California Environmental Quality Act (CEQA). The Regional Board’s completion of a CEQA checklist in a manner supporting a negative declaration was not sufficient, particularly in light of evidence in the record concerning potential adverse environmental impacts that could arise from the Trash TMDL (despite its water quality enhancement purposes).
CEQA requires government agencies to identify potential environmental impacts of a "project," even one that is a plan or policy with the main purpose of enhancing the quality of the environment. If potential environmental impacts are identified, the agency is then required to analyze what is necessary to mitigate them and/or select a feasible alternative. The City of Arcadia court concluded that the Regional Board had not performed the requisite analysis by checking off boxes on a CEQA checklist form and summarily concluding that there were no significant potential environmental impacts. The Court found that the Regional Board ignored impacts likely to be experienced during the implementation of the TMDL, including soil disruption and displacement, an increase in noise levels, changes in traffic circulation, and effects on air quality. Even though these impacts would only occur temporarily and would ultimately result in environmental benefits, the court held that the TMDL was not lawfully adopted in compliance with CEQA and that a full EIR and alternatives analysis, or their functional equivalent, were necessary.
Because the Regional Board did not conduct a thorough analysis of the temporary environmental impacts that some public commenters had opined would result from the implementation of the TMDL, nor consider mitigation measures or alternative approaches, the court held that adoption of the TMDL failed to comply with CEQA. This holding is key for those subject to potential TMDL/water quality requirements: putting evidence into the public record that a TMDL and its implementation plan may have a significant physical adverse impact on the environment, even if only temporary in duration, is sufficient to necessitate preparation of a full EIR or its equivalent by the agency. If such evidence is presented, even if it only presents a "fair argument" that such environmental impacts may be forthcoming, a "quick and dirty" CEQA checklist or negative declaration is insufficient, and adoption of the proposed plan/policy may not proceed.
The implications of City of Arcadia on the potential use of CEQA may be critical in another respect as well because the court also overruled the trial court’s holding that the Regional Board failed to perform a proper cost/benefit or economic impact analysis. This was surprising because, under section 13241 of the California Water Code, a Water Board must consider several factors, including "[e]conomic considerations," in establishing water quality objectives, plans and policies. Because the Water Code does not specifically define the term "considerations," the court reasoned that the Regional Board has broad discretion over the extent of any discussion concerning economic factors. It then found that the Regional Board staff’s cursory mention of the potential costs in the Trash TMDL was sufficient and that contrary evidence of the magnitude of associated costs and adverse economic impacts could essentially be ignored.
Therefore, to get economic and fiscal impacts considered in the TMDL/water quality planning context, and to force Water Boards to consider less costly alternative approaches, affected parties must, in the future, "bootstrap" their economic arguments to their CEQA arguments. Under CEQA, economics are considered relevant if an economic impact results in an indirect environmental impact (for example, loss of shoppers leading to downtown deterioration), or if the economic impact is relevant to measuring the significance of an environmental impact (for example, the economic impact of a freeway that divides an existing community can be a factor in assessing the significance of the physical impact of dividing the community).
In the end, the court of appeal upheld the novel Trash TMDL (a victory for the Water Boards), but perhaps more importantly, redefined the TMDL and water quality planning processes. With the required "economic considerations" now appearing to be relegated to mere lip service, the bottom line for parties challenging TMDLs is CEQA all the way.
City of Arcadiav.State Water Res. Control Bd., 135 Cal. App. 4th 1392 (2006)
Cal. Water Code § 13241(d)
Cal. Code Regs. tit. 14, §§ 15064(e), 15131