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League of California CitiesAnnual Fall ConferenceLong Beach, CaliforniaSeptember 24-27, 2008

EVOLVING ISSUES FOR WATER SUPPLY ASSESSMENTSIN A WATER SCARCE CALIFORNIA

I. INTRODUCTION

California water law continues to be complicated and cities throughout the state arefeeling the pressure now more than ever before. Indeed, significant challenges to statewidewater supplies in the face of growing population, increased water demands, and new legalrequirements have combined to test the limits of city planning and land use functions. Oneparticular issue caught in the crossfire is the preparation and use of water supply assessments(WSA) pursuant to Water Code section 10910 et seq. and related provisions of the CaliforniaEnvironmental Quality Act (CEQA). Collectively, the WSA requirements are often referred toby their implementing legislation, Senate Bill 610 (SB 610). As further detailed below, when itcomes to the intersection of water supply and the land development process, the days of a simple“will-serve” letter are all but over. Today, cities acting as lead agencies for certain projectssubject to CEQA are responsible for not only determining whether adequate water supplies existto serve the project, but must support that determination through rigorous detail anddocumentation.1 WSAs are the backbone of that process.

This overview provides cities with a practical, step-by-step introduction to the WSAprocedure. It also briefly addresses the related but distinct requirements of the Urban WaterManagement Planning Act and laws governing the preparation of written verifications (WV),and how those processes relate to a WSA. Moreover, these issues are discussed in the context ofrecent court decisions and ongoing litigation that continue to shape this important area of waterlaw and policy and land use planning.

1 SB 610 imposes WSA-related requirements upon public water systems and cities and counties acting aslead agencies under CEQA for certain projects. For convenience, this overview often refers only to cities inconnection with obligations applicable to both cities and counties.

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A. California’s Evolving Links Between Water Supply and Land Use Planning

In 2001, SB 610 and SB 221 were enacted into law. These measures were intended tostrengthen SB 901 by more closely linking land use decision-making and water supplyavailability, and increasing communication and coordination among water suppliers and localland use agencies (cities and counties) in connection with the approval of sizable developmentprojects. As set forth in greater detail below, SB 610 requires water service providers to prepareWSAs for certain projects defined by Water Code section 10912 and otherwise subject to CEQAreview. Ultimately, the goal of the WSA is to evaluate whether the water agency’s totalprojected water supplies available during normal, single-dry and multiple-dry water years duringa 20-year projection are sufficient to meet the projected water demand associated with theproposed project, in addition to the water agency’s existing and planned future uses, includingagricultural and manufacturing uses. (See Wat. Code § 10910(c)(3).) Upon approval by thewater agency, the WSA is submitted to the lead agency for inclusion in the CEQA documentbeing prepared for the proposed project, wherein the lead agency must determine based on theentire record whether the projected water supplies will be sufficient for the project in addition toexisting and planned future uses. (Wat. Code § 10911(b)-(c).) While this overview focuses onWSAs, SB 221 sets forth similar yet separate requirements for the preparation of WVs, whichare generally triggered by the approval of a development agreement or tentative map thatincludes a subdivision. (Govt. Code §§ 65867.5; 66473.7.) SB 221 defines a subdivision as aproposed residential development of more than 500 units, except that for a water agency withfewer than 5,000 service connections, a subdivision includes a residential development projectthat would account for an increase of 10 percent or more in the number of the agency’s existingservice connections. (Govt. Code § 66473.7(a)(1).) Such approvals must be conditioned on therequirement that a sufficient water supply shall be available to serve the project, where proof ofthe availability of that supply must be based on a WV prepared by the agency providing waterservice to the project. (Govt. Code §§ 65867.5; 66473.7.) As with SB 610, a “sufficient watersupply” under SB 221 means that total water supplies available during normal, single-dry andmultiple-dry years within a 20-year projection will meet the projected demand associated withthe proposed subdivision, in addition to existing and planned future uses, including agriculturaland industrial uses. (Govt. Code § 66473.7(a)(2).)

B. California’s Evolving Water Supply Landscape

Due in large part to geography and historic development patterns, California’s majorpopulation centers are far removed from its primary water sources. California has thus longengaged in large-scale movement of surface water supplies from significant hydrologic areas topopulated and irrigated areas where supplies are more scarce. Two main components of thateffort are the federal Central Valley Project (CVP) and California’s State Water Project (SWP),which produce water from major sources that are tributary to and then exported from theSacramento-San Joaquin River Delta (Delta). Of course, the Colorado River is another keycomponent of California’s surface water supplies. In addition to these sources, numerous otherprojects divert and deliver water from the state’s major river systems to serve regional and localdemands. Combined these projects encompass an enormous system of pumping and powerplants, reservoirs, lakes, storage tanks, canals, tunnels, and pipelines, all of which depend on a

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number of variables such as rainfall, snowpack, runoff, storage and pumping capacities, and ahost of legal constraints arising out of environmental, water right and other issues. Among thesemyriad factors, however, precipitation is perhaps the most critical element in determining howmuch water is available throughout the state. Hydrologic cycles dictate whether a given year is anormal or dry year which, along with other factors, determines the percentage allocation ofcontractual and water right allotments that are made available from the SWP, CVP, ColoradoRiver and other water supply projects. Groundwater supplies, which are said to serve up to one-third or more of the state’s water demands are also directly affected by hydrologic cycles.2

Both 2007 and 2008 have been deemed below normal water years. According toExecutive Order S-06-08 issued on June 4, 2008, pursuant to which Governor ArnoldSchwarzenegger proclaimed the existence of a statewide drought, prevailing water supplyconditions in California are being influenced by the following factors, among others: manySouthern California communities received only 20 percent of normal rainfall in 2007 andNorthern California in 2008 experienced the driest spring on record, with most communitiesreceiving less than 20 percent of normal rainfall from March through May; the Sacramento andSan Joaquin River basins are experiencing critically dry conditions and the statewide runoffforecast for 2008 is estimated to be 41 percent below average; water storage in many of thestate’s reservoirs is far below normal, including Lake Oroville which supplies water to the SWPat 50 percent of capacity, and Lake Shasta which supplies water to the CVP at 61 percent ofcapacity; the Colorado River Basin has just experienced a record eight-year drought resulting incurrent reservoir storage throughout the River system reduced to just over 50 percent of its totalcapacity; and, moreover, the effects of global climate change are expected to increasingly impactCalifornia’s hydrology in ways that may reduce snowpack, alter the timing of runoff, andincrease the intensity and frequency of droughts in the western United States.

Beyond these conditions, the Governor’s Executive Order also identified that SWP andCVP exports from the Delta have been substantially restricted pursuant to recent and ongoingfederal litigation concerning fisheries protection and other environmental concerns in the Delta.In Natural Resources Defense Council v. Kempthorne, et al. (USDC Case No. 05-CV-1207-OWW), environmental groups filed suit against the U.S. Fish & Wildlife Service (FWS) and theSecretary of the Interior alleging the biological opinion (B.O.) and “no jeopardy” findingsprepared by FWS regarding impacts to delta smelt caused by SWP and CVP operations violatedthe federal Endangered Species Act (ESA). In May 2007, federal district court Judge OliverWanger issued a ruling declaring the B.O. invalid under the ESA. Plaintiffs requested the Courtto impose an interim remedy to restrict project operations pending the completion of the newB.O. The Court conducted an evidentiary hearing in August 2007 and, on December 14, 2007,issued a Final Interim Remedial Order setting forth temporary restrictions on Delta exports fromthe SWP and CVP. Importantly, the Court invalidated but did not vacate the B.O., meaning theCVP and SWP are legally permitted to operate pending release of the new B.O., which the Courtordered to be completed no later than September 15, 2008. Under the Kempthorne decision, the

2 For additional information regarding California’s water supply history and planning, including a discussionof the state’s major water supply resources, see CALIFORNIA WATER II, Arthur L. Littleworth and Eric L. Garner (2nd

Ed. 2007).

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Court-ordered restrictions are based on flow rates in certain significant rivers near the CVP andSWP export facilities and real-time data concerning the migratory and spawning status of deltasmelt. The restrictions have been estimated as having the potential to result in reduced projectdeliveries of 9 to 29 percent if 2007-2008 is a normal water year and 3 to 19 percent if 2007-2008 is a dry water year.

In a similar case, Pacific Coast Federation of Fishermen's Association / Institute forFisheries Resources, et al. v. Gutierrez, et al. (USDC Case No. 1:06-CV-00245-OWW),environmental plaintiff groups filed suit in federal court against the National Marine FisheriesService (NMFS) and the Secretary of Commerce challenging the validity of the B.O. and “nojeopardy” findings prepared by NMFS regarding impacts to winter and spring-run salmon andsteelhead trout caused by SWP and CVP operations. On April 16, 2008, Judge Wanger issued adecision invalidating the NMFS B.O. for failing to comply with the ESA. As with Kempthorne,the Court did not vacate the B.O., meaning that project operations are authorized to continuepending the preparation of a new B.O. and any interim requirements the Court may impose.Soon after the Court invalidated the NMFS B.O., proceedings were conducted to determinewhether interim restrictions such as those ordered in the Kempthorne case would be requiredpending the new B.O., which is not expected to be completed until some time in 2009. On July18, 2008, the Court issued Findings of Fact and Conclusions of Law for the initial proceedingswhich concluded, among other things, that additional water supply restrictions beyond thoserequired in Kempthorne are not required at this time to protect species migration and habitat.

To say the least, these court decisions and recent dry conditions have placed watersupplies directly in the spotlight. From the United States Congress, to the State Capitol, in thepress, and for cities, counties, and water agencies statewide, the questions are heard withincreasing frequency: How much water is available? Is it enough? How does this affect us?Particularly for cities and other land use agencies, a common question is whether and to whatdegree these circumstances factor into land use planning and related environmental review andapproval processes. A more specific matter is how WSAs and other water supply analyses fitinto the mix.

II. WATER SUPPLY ASSESSMENTS: NUTS AND BOLTS

A. What Triggers the Preparation of a WSA?

While often overlooked, SB 610 provides a detailed roadmap for the process and contentsof preparing a WSA. Under SB 610, any city or county that determines a “project” as defined byWater Code section 10912 is subject to CEQA must, at the time it determines whether anenvironmental impact report, a negative declaration, or a mitigated negative declaration isrequired for the project pursuant to Section 21080.1, identify the public water system that mayprovide water service to the project and request the water provider to prepare a WSA. (Wat.Code § 10910(a)-(c).) This standard illustrates the importance of understanding two thresholdissues: (1) whether the proposed development constitutes a “project” under Water Code section10912; and (2) what entity constitutes the “public water system” that will provide water serviceto the proposed project.

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B. What Projects are Subject to WSA Requirements?

Under Water Code section 10912, “projects” subject to the WSA requirements include:

(1) a proposed residential development of more than 500 dwellingunits;

(2) a proposed shopping center or business establishmentemploying more than 1,000 persons or having more than 500,000square feet of floor space;

(3) a proposed commercial office building employing more than1,000 persons or having more than 250,000 square feet of floorspace;

(4) a proposed hotel or motel, or both, having more than 500rooms;

(5) a proposed industrial, manufacturing, or processing plant, orindustrial park planned to house more than 1,000 persons,occupying more than 40 acres of land, or having more than650,000 square feet of floor area;

(6) a mixed-use project that includes one or more of the projectsspecified above;

(7) a project that would demand an amount of water equivalent to,or greater than, the amount of water required by a 500 dwellingunit project. (Wat. Code § 10912(a).)

In addition to the “projects” enumerated above, if the public water system (as definedbelow) that will serve the proposed development has fewer than 5,000 service connections, thena “project” also means any proposed residential, business, commercial, hotel or motel, orindustrial development that would account for an increase of 10 percent or more in the number ofthe public water system’s existing service connections, or a mixed-use project that woulddemand an amount of water equivalent to, or greater than, the amount of water required byresidential development that would represent an increase of 10 percent or more in the number ofthe public water system’s existing service connections. (Wat. Code § 10912(b).)

C. Who Prepares a WSA?

As indicated above, SB 610 requires a city, acting as lead agency, at the time itdetermines a “project” as defined by Water Code section 10912 is subject to CEQA review, toidentify the public water system that will provide water service to the project and request thewater provider to prepare a WSA for the project. (Wat. Code § 10910(a)-(c).) If the city orcounty is not able to identify any public water system that may supply water for the project (or if

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the city or county itself is the public water system), the city or county must prepare the WSAafter consulting with any entity serving domestic water supplies whose service area includes theproject site, the local agency formation commission, and any public water system adjacent to theproject site. (Wat. Code § 10910(b).)

Under Section 10912, a “public water system” is defined as “a system for the provision ofpiped water to the public for human consumption that has 3,000 or more service connections,”including a water provider that may become a public water system as a result of serving water tothe project. (Wat. Code §§ 10910(b); 10912(c).) A public water system includes all of thefollowing: (1) any collection, treatment, storage, and distribution facility under control of theoperator of the system which is used primarily in connection with the system; (2) any collectionor pretreatment storage facility not under the control of the operator that is used primarily inconnection with the system; and (3) any person who treats water on behalf of one or more publicwater systems for the purpose of rendering it safe for human consumption. (Wat. Code §10912(c)(1)-(3).) Again, many cities provide retail water service through separate municipalwater departments and, therefore, the city itself may qualify as the public water systemresponsible for preparing the WSA for a particular project.

The foregoing illustrates an important point: while SB 610 is often associated with largeprojects, such as housing developments exceeding 500 units, cities should carefully scrutinizeproposed development applications and the proposed water service provider to determinewhether the WSA requirements apply. As noted above, many types of shopping and commercialcenters, business and industrial parks, hotels and varieties of mixed use projects may trigger theneed for a WSA. Moreover, if the water service provider is small (i.e., fewer than 3,000connections or between 3,000 and 5,000 connections), it must be determined, respectively,whether the provider would become a public water system as a result of serving the project or ifserving the project would increase the water service connections by 10 percent or more, thusrequiring the preparation of a WSA. (Wat. Code § 10912(b)-(c).)

D. What Must Be Included in a WSA?

As indicated above, SB 610 provides a general roadmap for the process and requirementsof preparing a WSA. Moreover, existing data and documentation such as UWMPs, contracts,agreements, judgments, studies and reports typically provide the starting point and frameworkfor the WSA analysis. (See Wat. Code § 10910(c)-(f).)

(1) Documenting Supply

In documenting water supplies, Water Code section 10910(d) requires a WSA to identify“any existing water supply entitlements, water rights, or water service contracts relevant to theidentified water supply for the proposed project and a description of the quantities of waterreceived in prior years by the public water system … under the existing water supplyentitlements, water rights, or water service contracts.” (Wat. Code § 10910(d)(1).) Any suchsupplies must be demonstrated by providing information related to all of the following:

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written contracts or other proof of entitlement to an identified water supply;

copies of a capital outlay program for financing delivery of a water supply that hasbeen adopted by the water supplier;

federal, state, and local permits for construction of necessary water supplyinfrastructure associated with delivering the water supply;

any regulatory approvals required to convey or deliver the water supply. (Wat. Code§ 10910(d)(2)(A)-(D).)

If the WSA identifies a source or sources of water supply that have not been received inprior years by the water provider, the WSA must identify other public water systems or waterservice contract holders that receive such water or have existing water supply entitlements, waterrights, or water service contracts to the source, and should discuss the extent to which that supplyis available to the water provider. (Wat. Code § 10910(e).) If the water supply for the proposedproject will include groundwater supplies, the WSA must also include the following informationand analysis:

(a) A review of any information in the UWMP relevant to the identified watersupply for the proposed project;

(b) A description of any groundwater basin(s) from which the proposedproject will be supplied. If the basin has been adjudicated, a copy of the order or decree adoptedby the court or board must be included and a description provided of the amount of groundwaterthe water supplier has a legal right to pump under the order or decree. For basins that have notbeen adjudicated, information must be included from DWR’s most current Bulletin regardingwhether the basin(s) is overdrafted or is projected to become overdrafted if present managementconditions continue. In the case of an overdrafted basin(s), the water supplier must provide adetailed description of the efforts being undertaken in the basin(s) to eliminate long-termoverdraft conditions;

(c) A detailed description and analysis of the amount and location ofgroundwater pumped by the water supplier for the past 5 years from any groundwater basin fromwhich the proposed project will be supplied, which description must be based on informationthat is reasonably available, including, but not limited to, historic records;

(d) A detailed description and analysis of the amount and location ofgroundwater that is projected to be pumped by the water supplier from any basin from which theproposed project will be supplied, which description must be based on information that isreasonably available, including, but not limited to, historic records; and

(e) An analysis of the sufficiency of the groundwater from the basin(s) fromwhich the proposed project will be supplied to meet projected water demand associated with theproposed project. This final portion of the analysis, however, is not required if the water supplierdetermines the sufficiency of groundwater needed to meet the initial and projected water demand

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associated with the proposed project has been addressed in the description and analysis providedin the most recently adopted and applicable UWMP. (Wat. Code § 10910(f).)

While Section 10910(d)(5) above indicates certain groundwater-related analysis may notbe required in a WSA, cities should carefully consider this issue. To the extent a proposedproject may be served with groundwater, and the most recently adopted UWMP includes agroundwater discussion, that UWMP analysis should be closely examined to determine whetherit provides sufficient information to justify omitting discussion from the WSA. Various factorscan influence the sufficiency of groundwater supplies (for instance, existing or emerginggroundwater quality issues, water right disputes, increasing demands, and the availability andreliability of replenishment water, to name a few) and any one or more of these factors might nothave been addressed in the UWMP or may have changed since the UWMP was prepared. Formost if not all circumstances, it may be advisable to include relevant groundwater informationand analysis from the UWMP and to supplement that discussion by addressing other factors thatsupport a sufficiency determination.

With regard to identifying water supplies, the specific wording of SB 610 raises apractical consideration that should not be overlooked. On the one hand, the general WSAstandard urges water agencies to evaluate the total projected water supplies available to themover the 20-year period; in other words, the statute encourages an analysis of an agency’s entirewater supply portfolio. On the other hand, Water Code section 10910(c) and (d) can be read tosuggest that a WSA need only discuss and analyze sources of supply relevant to the supply thatwill be used to serve the proposed project. Water agencies commonly have rights and access towater supplies within their portfolio that are not necessarily planned to serve a particular project.In that instance, while SB 610 could be read as not requiring the WSA to discuss those resources,a broader discussion of each component of the agency’s water supply portfolio is probably usefulin buttressing the overall analysis that the total projected water supplies available to the agencyover the 20-year projection during normal, single-dry and multiple-dry years are sufficient toserve the project in addition to the agency’s existing and planned future uses. (Wat. Code §10910(c).) Along these lines, one recommended practice is to use tables illustrating the watersupplier’s entire range of existing and planned water supplies in five-year increments over the20-year projection, including tables to reflect water supply availability in normal, single-dry andmultiple-dry years. (See, DWR Guidebook for Implementation of SB 610 and SB 221 (October8, 2003) (DWR Guidebook), pp. 15, 29.)

(2) Documenting Demand

Water supply is only half the equation in the WSA. In addition to identifying, discussingand quantifying supply, a WSA must also document the following demands: (a) the projecteddemand associated with the proposed project; (b) the water provider’s existing demands; and (c)demands associated with the water provider’s planned future uses. (Wat. Code §§ 10910(c);10911(c).)

Projected demand associated with the proposed project is typically based on water usefactors for the particular land use(s) included in the proposal. Notably, significant flexibilitymay exist in developing water use factors for a particular project based on geographic regions,

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local practices, conservation and water saving techniques/requirements, and project designfeatures. Moreover, projected water demand for many projects is now separately calculatedbased on the project’s potable and non-potable water needs. Again, while these factors mayprovide unique opportunities for reducing project demand, cities must ensure that water usefactors and total projected demand for a project are supported by reasoned and substantialevidence. By way of example, for a 1,500-unit residential development project, using a wateruse factor of 0.3 afy per unit versus 0.6 afy per unit amounts to a sizeable difference in totalprojected water demand of 450 afy. However, if the 1,500-unit project is comprised of single-family homes with 6,000 to 10,000 square foot, fully landscaped lots, using a water use factor of0.3 afy may result in a questionable analysis. Moreover, while SB 610 indicates water demanddata can be derived from the most recently adopted UWMP, that data should be carefullyreviewed and appropriately tailored to reflect a project’s current configuration and other currentconditions, trends and legal requirements affecting the projected demand associated with aproposed project.

Existing demand within a water provider’s service territory should be reasonablyascertainable. According to the DWR Guidebook, existing demand should include the waterprovider’s current customers and any system uses and losses during a normal water year.Existing demand might also account for changes in demand characteristics, such as “changes inper capita use, percentage of use by customer type, demographic variability, etc.” (DWRGuidebook, p. 23.) Existing demands can also be projected through the ensuing 20-year period.In doing so, water providers may account for changes in water use patterns that often occur insingle-dry and multiple-dry years due to established water conservation programs, shortagecontingency plans, voluntary use reductions, changes in water pricing, or other factors. Thesewater use responses may be documented in the most recently adopted UWMP and the DWRGuidebook suggests accounting for this information according to each water use sector. (DWRGuidebook, p. 31.) As indicated above, with expanding availability and uses of recycled waterand other non-potable water resources, many water providers account for system-wide demandsaccording to different types of water utilized by different customers.

Documenting demands associated with a water provider’s “planned future uses” iscommonly understood as being equivalent to documenting demands associated with projectedpopulation growth within a water provider’s service area. To that end, WSAs frequently (if notuniversally) utilize forecasted demand figures provided in the most recently adopted UWMP.While this may represent the most convenient and/or conservative approach to calculating thiscomponent of demand in preparing a WSA, several sources of authority indicate the possibilitythat a different approach was intended and authorized by SB 610. Those authorities arediscussed in greater detail below in Section V. Similar to documenting supplies, the DWRGuidebook recommends summarizing the WSA’s demand analyses and calculations in tables,which may be organized in 5-year increments over a 20-year projection and account for changesin demand during single-dry and/or multiple-dry periods. (DWR Guidebook, p. 31.) In turn, thesupply and demand tables may be compared to address the general water supply sufficiencystandard of SB 610: whether the total projected water supplies available to the water providerduring normal, single-dry, and multiple-dry years over the next 20-year period are sufficient tomeet the projected water demand associated with the proposed project, in addition to existing

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and planned future uses, including agricultural and manufacturing uses. (Wat. Code § 10910(c).)

E. What is the Timing of a WSA?

A WSA must be adopted by the governing body of the water supply agency at a regularor special meeting and submitted to the city or county within 90 days from the date on which therequest was received. (Wat. Code § 10910(g)(1).) The water supplier may request an extensionof time not to exceed 30 days to prepare and adopt the WSA. (Wat. Code § 10910(g)(2).) In theevent the water supplier fails to timely prepare, adopt and submit a WSA, the city or county mayseek a writ of mandamus to compel compliance with the requirement to submit the WSA. (Wat.Code § 10910(g)(3).)

SB 610 indicates a city’s request for a WSA should issue at the same time the city issuesa notice of preparation for the proposed project. Water Code section 10910 provides that at thetime a city determines under Public Resources Code section 21080.1 whether an EIR, negativedeclaration, or mitigated negative declaration is required for a project subject to CEQA, the citymust identify the water supplier that may serve the project and request the supplier to determinewhether the projected water demand associated with the project was included as part of the mostrecently adopted UWMP. (Wat. Code § 10910(b)-(c).) Notably, the express language of Section10910 does not appear to require the city to request the preparation of a WSA at that time. Tothe extent such a requirement does exist, however, Public Resources Code section 21080.2would appear to require cities to identify the water supplier and request that it prepare a WSAwithin 30 days of determining the project application complete.3

F. How is a WSA Used?

After a WSA is prepared and adopted it must be submitted to the city or county andincluded in the EIR being prepared for the proposed project. (Wat. Code § 10911(b).) If a WSAconcludes that water supplies are not or will not be sufficient to serve the projected demandassociated with the project in addition to existing and planned future uses, the water providermust also submit to the city or county its plans for acquiring additional water supplies needed toserve the project, setting forth measures being undertaken to acquire and develop those supplies.(Wat. Code § 10911(a).) According to SB 610, those plans may include, without limitation: theestimated total costs and the proposed method of financing the costs associated with acquiringthe additional water supplies; all federal, state, and local permits, approvals or entitlementsanticipated to be required to procure additional supplies; and the estimated timeframes withinwhich the water provider expects to be able to acquire such additional supplies. (Wat. Code §10911(a)(1)-(3).)

As discussed in greater detail below, the California Court of Appeal recently held thatWSAs are only an intermediate step in CEQA’s environmental review process. (CaliforniaWater Impact Network v. Newhall County Water District (“CWIN”), 161 Cal.App.4th 1464.)

3 Pursuant to Government Code section 65943, a determination of completeness generally must be madewithin 30 days of receiving the project application.

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Thus, while the WSA provides foundational information and analysis regarding water supplysufficiency, the city or county acting as lead agency under CEQA makes the final determinationbased on the entire record whether water supplies will be sufficient to serve the project inaddition to existing and planned future uses, which determination may or may not be consistentwith the conclusion reached by the WSA. (Wat. Code § 10911(b)-(c).) If the city or countydetermines water supplies are not sufficient, that determination must be included in the findingsfor the project. (Wat. Code § 10911(c).)

III. RELATED STATUTES: SIMILAR BUT NOT THE SAME AS SB 610

A. Urban Water Management Plans (Wat. Code § 10610 et seq.)

The Urban Water Management Planning Act, Water Code section 10610 et seq. (UWMPAct), is “intended to provide assistance to water agencies in carrying out their long-term resourceplanning responsibilities to ensure adequate water supplies to meet existing and future demandsfor water.” (Wat. Code § 10610.2(b).) To that end, an UWMP addresses, among other things,projected water use, the reliability of water supply sources, the potential for using reclaimedwater and desalinated water, water shortage contingency planning, comparisons of supply anddemand, and water conservation efforts. (See Wat. Code §§ 10631-10635.)

Specifically, the Act requires urban water suppliers to document water supplies availableduring normal, single-dry, and multiple-dry water years in five-year increments over a 20-yearperiod or more, and the existing and projected future water demands associated with forecastedpopulation increases throughout the water provider’s service territory over the same minimum20-year period. (Wat. Code § 10631(a)-(e).) An UWMP must describe the service area of thesupplier, including current and projected population, climate, and other demographic factorsaffecting the supplier’s water management planning. (Wat. Code § 10631(a).) The UWMP mustquantify past and current water use, over 5-year increments, and projected water use, identifyingthe uses among various water use sectors, including single-family residential, multifamily,commercial, industrial, institutional and governmental, landscape, sales to other agencies,seawater intrusion barriers, groundwater recharge, conjunctive use, or any combination thereof,and agricultural. (Wat. Code § 10631(e)(1).) An UWMP must also describe the reliability of thewater supply and its vulnerability to seasonal and climatic shortage, and provide data, to theextent practicable, for average, single-dry, and multiple-dry water years. (Wat. Code §10631(c)(1).) For any water source that may not be available at a consistent level of use, theUWMP must describe plans to supplement or replace that source with alternative sources orwater demand management measures. (Wat. Code § 10631(c)(2).) As noted above, an UWMPmust also include a water shortage contingency plan. (Wat. Code § 10632.)

Given the level of detail and information required in an UWMP, an up-to-date UWMPcan significantly reduce the burden of preparing a WSA. (Wat. Code, § 10910(c)(2).) At thesame time, however, and particularly under recent circumstances affecting imported watersupplies from the Delta, cities may encounter outdated information in UWMPs that cannot betaken at face value. (See also, discussion below regarding recent litigation.) Yet that isunderstandable as UWMPs are only required to be prepared once every five years. (Wat. Code §

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10621.) Changed information does not mean the previous UWMP is invalid or cannot be used.4

To the contrary, as explained above, UWMPs are intended as long-range planning documents,periodically updated to address and account for circumstances affecting water supplies, demand,and land use activities over the preceding five years since the last UWMP was adopted and in 5-year increments moving forward. (Wat. Code § 10631.) Thus, changes that may occur after themost recent UWMP is adopted can and should be addressed in the WSA and CEQA analyses.All too often WSAs are prepared by simple, wholesale incorporation of information from anUWMP. However, for the reasons set forth above and below, cities are encouraged not to useWSAs and UWMPs interchangeably. Rather, UWMPs should be used as source documents,where portions of the information and analyses therein can be tailored and utilized to supportanalyses and determinations required by SB 610 and CEQA.

B. SB 221 and Water Verifications (Govt. Code §§ 65867.5; 66473.7)

By definition, a WSA prepared pursuant to SB 610 is not a WV prepared pursuant to SB221. Although similar in some respects (and often mistakenly referred to as one statute or asbeing interchangeable), SB 610 and SB 221 are different in several important ways, including,but not limited to: (1) SB 610 applies to a broad category of projects, whereas SB 221 onlyapplies to residential development projects with 500 or more dwelling units; (2) WSAs must beincorporated into the environmental document prepared for a project under CEQA, while WVsdo not; (3) SB 610 and SB 221 are triggered by different events and have different timingrequirements; (4) SB 610 and SB 221 have different substantive provisions; and (5) adoption ofWSAs and WVs may have different legal implications.

Unlike SB 610 that requires the preparation of a WSA for a broad range of projectssubject to CEQA (Wat. Code § 10912(a)), the preparation of a WV under SB 221 is onlyrequired in connection with a development agreement or tentative map that includes asubdivision. (Govt. Code §§ 65867.5; 66473.7.)5 SB 221 defines a subdivision as a proposedresidential development of more than 500 units, except that for a water agency with fewer than5,000 service connections, a subdivision includes a residential development project that wouldaccount for an increase of 10 percent or more in the number of the agency’s existing serviceconnections. (Govt. Code § 66473.7(a)(1).) Such approvals must be conditioned on therequirement that a sufficient water supply shall be available to serve the project, where proof ofthe availability of that supply must be based on a WV prepared by the agency providing waterservice to the project. (Govt. Code §§ 65867.5; 66473.7.) As with SB 610, a “sufficient water

4 An UWMP is subject to legal challenge, which can significantly impair reliance or reference to all or someportion of its information, analyses or conclusions. (See Friends of the Santa Clara River v. Castaic Lake WaterAgency (2004) 123 Cal.App.4th 1.)

5 Certain infill and low-income housing subdivisions are expressly excepted from SB 221’s WVrequirements: “This section shall not apply to any residential project proposed for a site that is within an urbanizedarea and has been previously developed for urban uses, or where the immediate contiguous properties surroundingthe residential project side are, or previously have been, developed for urban uses, or housing projects that areexclusively for very low and low-income households.” (Govt. Code § 66473.7(i).) Specific provisions also apply tothe County of San Diego. (See Govt. Code § 66473.7(k).)

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supply” under SB 221 means the total water supplies available during normal, single-dry andmultiple-dry years within a 20-year projection that will meet the projected demand associatedwith the proposed subdivision, in addition to existing and planned future uses, includingagricultural and industrial uses. (Govt. Code § 66473.7(a)(2).) Unlike SB 610, however, SB 221requires a WV to consider specific factors in analyzing whether sufficient water supply exists toserve a proposed subdivision. (See Govt. Code § 66473.7(a)(2)(A)-(D).)

The procedural aspects of SB 221 also differ from SB 610. Under SB 221, within fivedays of the time a city or county determines a tentative map application for a proposedsubdivision is complete, the CEQA lead agency must send a copy of the application to anypublic water system that may supply water to the subdivision, including any water supplier thatmay become a public water system as a result of supplying water to the subdivision.6 Thisrequirement does not state, however, that a request to prepare the WV must be submitted at thattime. As indicated above, the approval of a development agreement or tentative map including asubdivision must only be conditioned on obtaining an approved WV at some point which, as a“fail safe” mechanism, must occur before construction begins on the project. (See DWRGuidebook, p. iii.) Unlike SB 610, the timing for preparing a WV is not specifically tied to theCEQA process undertaken for a proposed subdivision. Under SB 610, the WSA prepared for aproject including 500 or more dwelling units must be adopted and incorporated into the EIRprepared for the project. (Wat. Code § 10911(b).) This requirement does not apply to the WV,which may be completed and approved before, as part of, or after the CEQA process. Indeed,while the required contents of a WV differ in some respects from a WSA prepared under SB610,7 SB 221 provides that the substantial evidence used to support the findings of a WV mayinclude the WSA already prepared for the project. (Govt. Code § 66473.7(c)(2).) In any respect,once a request is submitted to the water provider to prepare a WV, it must be prepared andadopted within 90 days of the request. (Govt. Code § 66473.7(b)(1).)

Also notable, WVs appear to have different litigation exposure than WSAs. First,whereas SB 610 only enables the city or county to file a writ of mandate against the waterprovider for failing to timely prepare and adopt a WSA (Wat. Code § 10910(g)(3)), SB 221enables the local agency “or any other interested party” to seek a writ of mandamus to compel awater provider to prepare and adopt a WV. (Govt. Code § 66473.7(b)(2).) Equally important,SB 221 appears to allow challenges to be filed directly against the water provider regarding thesufficiency of a WV. (Govt. Code § 66473.7(o).) As discussed in greater detail below, the Courtof Appeal recently held that any challenge against the sufficiency of a WSA must be broughtagainst the lead agency as part of its approval of the CEQA document, yet that holding does notapply to WVs. (CWIN, supra, 161 Cal.App.4th 1464, 1487-1488.) These differences maybecome particularly acute in the situation where the city or county may seek to have a jointWSA/WV prepared for a project.

6 SB 221 defines “public water system” in accordance with the definition set forth by Water Code section10912(c), above. (Govt. Code § 66473.7(a)(3).)

7 See, e.g., Govt. Code § 66473.7(a)(2), (c), (d), (g), (h).

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C. California Environmental Quality Act (Pub. Res. Code § 21000 et seq.)

Cases interpreting CEQA have held that the environmental effects of a project cannot befully appreciated absent consideration of water supply impacts. (See Sierra Club v. West SideIrrig. Dist. (2005) 128 Cal.App.4th 690; Napa Citizens for Honest Government v. Napa CountyBoard of Supervisors (2001) 91 Cal.App.4th 342; Stanislaus Natural Heritage Project v. Countyof Stanislaus (1996) 48 Cal.App.4th 182; Santa Clarita Organization v. County of Los Angeles(2003) 106 Cal.App.4th 715.) As discussed herein, SB 610 and the WSA process are intended tosupplement, not supplant, the CEQA process. WSAs merely assist lead agencies in carrying outCEQA’s requirement to adequately consider potential water supply impacts resulting from aproposed project.

IV. RELATED CASE LAW AND PRACTICAL ISSUES

Without question, WSAs are technically and legally complex. And what bettercombination for the courts to tackle. As set forth in greater detail below, California courts havestarted to weigh in on WSAs and how they fit within the land use planning and approval process.

A. WSAs and CEQA Analyses are Not Created Equal: Vineyard Area Citizensfor Responsible Growth v. City of Rancho Cordova (2007) 40 Cal.4th 412

Last year the California Supreme Court articulated its most recent standard for evaluatingthe sufficiency of water supplies in connection with a city’s CEQA and land use approvalprocess. In Vineyard Area Citizens for Responsible Growth v. City of Rancho Cordova (2007)40 Cal.4th 412 (“Vineyard”), the Supreme Court struck down an EIR prepared for a communityand specific plan mixed-use development project. The EIR addressed multiple impacts, but theCourt invalidated the EIR in large part on the basis of an insufficient water supply analysisrelative to the project’s long-term needs. At the outset, Vineyard is notable for its discussion ofSB 610 and SB 221 requirements, wherein the Court remarked: “The plans and estimates thatWater Code section 10910 mandates for future water supplies at the time of any approval subjectto CEQA must, under Government Code section 66473.7, be replaced by firm assurances at thesubdivision map approval stage.” (Vineyard, supra, 40 Cal.4th at 434.) However, the Courtexpressly declined to address the sufficiency of any WSA or WV that may have been preparedfor that project. (Id. at 436.)

Instead, Vineyard is regarded as a pure CEQA decision, confirming that the ultimateobjective of an EIR’s water supply analysis – as with any CEQA analysis – is to allow informeddecision making with regard to the availability and reliability of water supplies to serve theproposed project and the potentially significant environmental impacts of utilizing that supply.To this end, Vineyard has been interpreted as establishing four general rules that must besatisfied in an EIR’s water supply analysis. First, CEQA’s informational purposes are notsatisfied by an EIR that simply ignores or assumes a solution to the problem of supplying waterto a proposed land use project; thus, an EIR must present sufficient facts to evaluate the pros andcons of supplying the amount of water the project will need. (Vineyard, supra, 40 Cal.4th at431.) Second, a water supply analysis for a large, long-term development project (such as themaster planned community at issue in Vineyard, scheduled to be built and occupied over several

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years and throughout multiple phases) cannot be limited to the water supply for the first stage orthe first few years. Rather, the EIR must assume that all phases of the project will eventually bebuilt and will need water and, therefore, must analyze, to the extent reasonably possible, theimpacts of providing water to the entire proposed project. (Id. at 435.) Third, future watersupplies identified to serve the project must bear a likelihood of actually proving available;purely speculative or unrealistic allocations, i.e., “paper water” entitlements, are not sufficient.In this regard, the EIR’s discussion must include a reasoned analysis of the circumstancesaffecting the likelihood of the water supply availability. (Id. at 432.) Fourth, in cases whereuncertainty regarding the actual availability and reliability of a future water source remains aftera complete discussion and analysis, an EIR must discuss possible replacement or alternativesources of water and must analyze the environmental consequences of utilizing such alternativesources. (Id.)

Also notable from Vineyard is the Court’s discussion of a sliding-scale of water supplycertainty required in an EIR: “[T]he burden of identifying likely water sources for a projectvaries with the stage of project approval involved; the necessary degree of confidence involvedfor approval of a conceptual plan is much lower than for issuance of building permits.”(Vineyard, 40 Cal.4th 412, 434.) Accordingly, the Court found that: “Although the FEIR didnot demonstrate a level of certainty regarding future supplies comparable to that required forsubdivision approval under Government Code section 66473.7, CEQA does not demand suchcertainty at the relatively early planning stage involved here.” (Vineyard, supra, 40 Cal.4th at437.) At the same time, however, the Court made clear that the water supply analysis for a largedevelopment project cannot be deferred to later tiers or phases of environmental review. (Id., at431.) With these principles established, the Court went on to hold:

[T]o satisfy CEQA, an EIR for a specific plan need notdemonstrate certainty regarding the project’s future watersupplies. To the extent a subsequent subdivision proposal relies ondifferent water sources than were proposed in the specific plan itimplements, or the likely availability of the intended water sourceshas changed between the time of the specific plan and thesubdivision application (or more has been learned about theimpacts of exploiting those sources), changes in the project, thesurrounding circumstances or the available information wouldexist within the meaning of section 21166, requiring additionalCEQA analysis. (Id. at 438.)

The ultimate question under CEQA, moreover, is not whether anEIR establishes a likely source of water, but whether it adequatelyaddresses the reasonably foreseeable impacts of supplying water tothe project. If the uncertainties inherent in long-term land use andwater planning make it impossible to confidently identify thefuture water sources, an EIR may satisfy CEQA if it acknowledgesthe degree of uncertainty involved, discusses the reasonablyforeseeable alternatives – including alternative water sources and

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the option of curtailing the development if sufficient water is notavailable for later phases – and discloses the significantforeseeable environmental effects of each alternative, as well asmitigation measures to minimize each adverse impact. (Id. at 434.)

The discussions above regarding Vineyard and SB 610 illustrate that neither necessarilyprecludes a city from approving a project if sufficient water supplies cannot be identified withcertainty. Moreover, the conclusions set forth in a WSA form only a part of the city’s analysesand conclusions with respect to water supply sufficiency and project approval.

B. WSAs are Not Subject to Direct Legal Challenge: California Water ImpactNetwork v. Newhall County Water District (2008) 161 Cal.App.4th 1464

In California Water Impact Network v. Newhall County Water District (2008) 161Cal.App.4th 1464 (“CWIN”), the Court of Appeal for the Second District addressed the issue ofwhether WSAs are judicially reviewable prior to the certification of an EIR and projectapproval. The case involved a challenge brought against the Newhall County Water District(District) for its approval of a WSA prepared for a proposed 584-acre industrial park located inthe City of Santa Clarita. At the City’s request, the District prepared the WSA for the project.After the District approved the WSA but before the City had incorporated the document in itsEIR, plaintiffs filed a petition for writ of mandate challenging the legal adequacy of the WSAunder SB 610. (CWIN, supra, 161 Cal.App.4th 1464, 1474.) The District (along with the Cityand the project applicant) filed a motion for judgment on the pleadings asserting, among otherthings, that the WSA was a technical, informational document and not a final act ordetermination subject to judicial review. (Id.) The trial court ruled in favor of the District,observing that “WSAs are not immune from judicial review, but must be challenged andreviewed as part of CEQA review.” (Id. at 1475.) The appellate court affirmed, holding theWSA was “an interlocutory and preliminary step in the EIR process” and therefore not “final”for mandamus purposes when the petition was filed. (Id. at 1486, 1488.) Notably, the court inCWIN explained its holding in the context of the express language of SB 610, stating:

Once the WSA is approved by the water provider’s governingboard the WSA is submitted to the lead agency. The lead agencymay then evaluate the information included in the WSA. (Wat.Code § 10911, subd. (c).) The power to “evaluate” the WSAnecessarily invests the lead agency with the authority to consider,assess and examine the quality of the information in the WSA andendows the lead agency with the right to pass judgment upon theWSA. While the lead agency must include the WSA in the EIR,the lead agency is not required to accept the WSA’s conclusions.The lead agency may in evaluating the WSA accept or disagreewith the water provider’s analysis or may request additionalinformation from the water provider. In any event, the lead agencyis required by statute to make the ultimate determination, based onthe entire record, whether water supplies are sufficient. (Wat.Code § 10911, subd. (c).) The lead agency may make a finding

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that adequate water supplies exist (or do not exist) to meet theproject’s anticipated demand, even if that finding is inconsistentwith the conclusions in the public water system’s assessment.

In short, because the adoption of a WSA does not create a right orentitlement to water service or impose, expand, or limit any dutyconcerning the obligation of a public water system to providecertain service and because the lead agency has a separate (fromthe water provider’s WSA) and independent obligation to assessthe sufficiency of water supplies for the proposed project, weconclude the WSA is not a final agency decision, determination oraction as that term is used in the context of mandamus relief.Under the WSA law framework, the “final” decision for thepurposes of writ review occurs only after the lead agency acts –completes its obligations under the WSA and CEQA. (CWIN,supra, 161 Cal.App.4th 1464, 1487-1488.)

The court further stated, as a practical matter, that simply because a lead agency hasdiscretion to reject the conclusions in a WSA does not mean that it should, noting:

Indeed the purpose behind the WSA law is to ensure that relevantinformation concerning water supplies is assessed and consideredprior to the approval of statutorily defined projects. The waterprovider is one of the key sources of that information and the WSAis the effective method that information is transmitted to land usedecision makers. Thus to fulfill its usefulness and statutory aims,the lead agency would be well advised to evaluate the WSA and ifthe WSA is found to be incomplete or to contain inaccurateinformation or faulty analysis, the lead agency should request thewater supplier to modify, correct or supplement the WSA. (Id. at1478, fn. 21.)

While this practical note from the CWIN decision appears consistent with the legislativeintent for SB 610 to improve communication and coordination between water and land useagencies, the court did not opine on whether a water agency is required to modify, correct orsupplement a WSA, or to do so in any particular way upon request from a lead agency. Somecommentators believe the CWIN decision is flawed in holding water agencies essentially immunefrom preparing inherently flawed WSAs, a holding which may also signal the need for cities toseek expert advice in reaching CEQA conclusions related to water supply availability.

C. Courts Will Look Behind the WSA: Highland Springs Conf. v. City ofBanning (Riverside County Superior Court Case No. RIC 460950)

A recent trial court decision in Southern California signaled that courts may seek to lookbehind the WSA and EIR water supply analyses and scrutinize the documents relied upontherein. The case of Highland Springs Conf. v. City of Banning (“Highland Springs”) (Riverside

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County Superior Court Case No. RIC 460950, January 29, 2008) involved a proposed project inthe City of Banning including 1,453 residential units, a school site, neighborhood park, andrelated roads and utilities, with a total projected water demand of 1,149 acre-feet per year. Forthe reasons summarized below, the court held the EIR’s water supply analysis failed to complywith legal principles set forth by statute and applicable case law, failed as an informationaldocument, and was not supported by substantial evidence.

Citing Vineyard’s introductory discussion regarding SB 610 and SB 221 (which isarguably dicta), the trial court first noted that the level of specificity and analysis required for theproject was more stringent than in the Vineyard case due to the stage of the planning process andproject approvals being sought, which included a tentative tract map and related developmententitlements. (Highland Springs at 9.) From there the court scrutinized the water supplyanalysis and supporting documentation. According to the court, the WSA and EIR analysesborrowed heavily from the City’s most recently adopted UWMP, incorporating much of thesame language and many of its tables, yet failed to explain how the numbers were reached. Forinstance, a table incorporated from the UWMP concluded that the City’s share of groundwaterextracted from an adjudicated basin would be 400 afy at a minimum and indicated this amountwould increase to 4,000 afy in 2025. The court, however, found that nothing in the UWMPexplained the basis for this increase. The same table showed the City would receive water fromother sources, including the SWP, and that the City’s SWP supplies would increase to 8,771 afyby 2015. Again, the court found no analysis in the UWMP to substantiate this increase.

In similar criticism, the court in Highland Springs concluded the EIR failed to include asufficiently “reasoned analysis of the circumstances affecting the likelihood of the water’savailability.” (Highland Springs at 10, quoting Vineyard, supra, 40 Cal.4th at 431.) The Cityargued the 8,771 afy figure was a reliable assumption given the percentage of SWP supply thathad been historically allocated to the water supplier in the past. The court disagreed, suggestingmore information was needed for the EIR to serve as an adequate informational document, suchas “more substance … as to the method of negotiating the allocation in the past, the reasons whythe same negotiation pattern would prevail in the future, and the current and projected demandsof other constituent users of the [SWP supply].” (Highland Springs at 10.)

The Highland Springs case provides an important message to cities as lead agencies inpreparing water supply analyses under CEQA: the WSA and documents on which it reliesshould not be presumed to be valid. Rather, as set forth in CWIN above, cities bear the burden ofensuring that all underlying information supporting the EIR’s water supply analysis, includingthe WSA and other supporting evidence, are sufficiently analyzed in accordance with CEQA’sstandards.

D. Having Say in the WSA: O.W.L. Foundation v. City of Rohnert Park (SonomaCounty Superior Court Case No. SCV 236309)

In O.W.L. Foundation v. City of Rohnert Park (“O.W.L.”) (Sonoma County SuperiorCourt Case No. SCV 236309), currently pending on appeal, the City of Rohnert Park, as theCEQA lead agency and proposed water supplier, prepared a WSA to assess the sufficiency ofgroundwater supplies for several proposed projects. As required by Water Code section 10910,

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the City analyzed past and projected groundwater pumping by examining a study area thatincluded all of the City’s groundwater sources. Although not expressly required by SB 610, theCity also analyzed the past and projected pumping of all other users in the study area. The WSAconcluded that sufficient groundwater supplies were available based on the City’s finding thatpumping would be within historically sustainable levels.

Upon the City’s adoption of the WSA, plaintiffs filed suit challenging the sufficiency ofits analysis and conclusions. The trial court concluded the WSA was required, as a matter oflaw, to analyze projected groundwater pumping by all users in the entire basin, and invalidatedthe WSA on the ground that it utilized an improper methodology in determining groundwatersupplies were sufficient to serve the projects under the standards set forth by Water Code section10910(f). On appeal, the principal issue is whether the water supply entity preparing the WSAhas discretion to determine how to measure the sufficiency of water supplies for proposedprojects. Applied to the facts in O.W.L., that issue would determine whether the City of RohnertPark has discretion in designating the area from which past and projected groundwater pumpingwould be analyzed and in determining whether the analysis would account for projectedpumping by all groundwater users in the basin or only account for the City’s production. As ofthis writing, the First District Court of Appeal has requested supplemental briefing on severalissues, including whether, in light of the holding in CWIN (above), the Court lacks subject matterjurisdiction to consider a challenge to the WSA before certification of the EIR. No decision hasbeen issued by the Court.

E. What if a WSA is not Technically Required?

Given the technical nature of SB 610’s definitions and requirements, cities couldencounter circumstances where a relatively large project may not expressly require thepreparation of a WSA. For instance, for a proposed 450-unit subdivision in an area served by asupplier with only 2,500 service connections, a technical reading of the statute might suggest thata WSA is not required. The project would not trigger the size threshold in 10912(a) [500dwelling units], and the water supplier would not satisfy the definition of a public water systemin 10912(c) [3,000 connection], even as a result of providing water service to the project.

While a WSA might not be technically required in certain circumstances, such as theexample provided above, cities are reminded that CEQA’s independent requirementsnevertheless remain with respect to consultation with affected agencies and the need to analyzewater supply sufficiency and potential environmental impacts associated with utilizing theidentified source(s) of water to serve the project. Nor can it be overlooked that certain projects,such as the 450-unit project, may include parks or other irrigated demands or design features thatelevate the project’s demand to that which is equivalent of a 500-unit project, thus triggering therequirement to prepare a WSA under Water Code section 10912(a)(7). In light of the policiesbehind SB 610 and recent case law concerning water supply analyses (above), cities would bewell-served to use the WSA statute as a guide for the type of information that should be includedin their CEQA analyses, even when a WSA is not technically required.

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V. WHAT CONSTITUTES EXISTING AND PLANNED FUTURE USES?

As raised in the O.W.L. case (above), one very important yet somewhat overlookedquestion in preparing WSAs under SB 610 is the type of water demand that must be analyzed incalculating a water agency’s existing and planned future uses. Essentially, a WSA functionsmuch like a balance sheet, with supply on the one side demand on the other. Thus, as with anybalance sheet, a sufficiency determination generally requires a showing that demand does notexceed supply. With this in mind, it soon becomes clear how demand calculations, and whatmust be included therein, can dramatically affect the viability of a project.

Several sources of authority are instructive in this regard. Under the UWMP Act, anUWMP must quantify historic, existing, and projected demand of various water users over 5-year increments for the ensuing 20-year period or as far as data is available. (Wat. Code §10631(a), (e)(1).) Notably, the Act expressly requires such water demand forecasts associatedwith projected population increases to be based upon data produced by state, regional, or localservice agency population projections. (Wat. Code § 10631(a).) The Act further instructs thatdemand should account for particular land use sectors, including but not limited to, single-familyresidential, multifamily, commercial, industrial, institutional and government, landscape, sales toother agencies, conjunctive use, groundwater recharge, seawater intrusion barriers, andagriculture. (Wat. Code § 10631(e).)

The standard for assessing demand under SB 610, however, is conspicuously different.Again, the general standard for evaluating demand in a WSA is expressed as “the projected waterdemand associated with the proposed project, in addition to the public water system’s existingand planned future uses, including agricultural and manufacturing uses,” which is the sameproject-specific demand standard used in SB 221. (See Wat. Code § 10910(c); Govt. Code §66473.7(a)(2).) The DWR Guidebook supports the idea that demand calculations for purposes ofpreparing a WSA are much more circumscribed than the demand analyzed in an UWMP. TheDWR Guidebook states:

Planned future uses – the lead agency, as the land-use agency, hasinformation on planned development. Regular communicationbetween the water supplier and lead agency will be essential toensuring an accurate determination of sufficiency of water supplyfor future demand. Planned future uses may include: projects thatare expected to be completed during the same time frame as theproposed project. These include all new demands ranging from allindividual single-family home to large-scale developments.Proposed developments that have a reserved (or entitlement to)future water supply and are considered to be moving towardsconstruction. Proposed projects that are included in a general orspecific plan need not be included if the agency determines thatthey are not likely to begin construction during the period underconsideration. … [I]t would be a reasonable interpretation thatplanned future uses are those that would be undertaken within thesame time frame as the project under consideration. (DWR

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Guidebook, p. 23.)

Thus, a WSA arguably should not be required to consider water demands associated withall development that might conceivably occur over the 20-year planning horizon, such asdevelopment or projected water demands associated with forecasted population increases in ageneral plan. Rather, a WSA should only be required to contemplate development that isreasonably likely to occur.

This approach appears consistent with project-level review conducted under CEQA andis in harmony with the holding in CWIN (above) that WSAs are nothing more than evidentiarycomponents of the environmental review process otherwise governed by the local land useagency under CEQA. In general, CEQA requires some degree of forecasting of future events.For instance, CEQA Guidelines section 15144 provides: “While forecasting the unforeseeable isnot possible, an agency must use its best efforts to find out and disclose all that it reasonablycan.” (Cal. Code Regs, tit. 14, § 15144.) Indeed, even a cumulative impacts analysis underCEQA is only required to encompass “past, present, and reasonably anticipated future projects.”(Pub. Res. Code § 21083(b); Cal. Code Regs, tit. 14, § 15130(b)(1)(A).)

In the seminal case of Laurel Heights Improvement Association of San Francisco v. TheRegents of the University of California (1988) 47 Cal.3d 376, the California Supreme Courtendorsed this view, explaining that “an EIR must address the impacts of ‘reasonably foreseeable’future activities related to the proposed project.” (Id. at 398-399; see also Vineyard, 40 Cal.4th412, 428.) In Laurel Heights, the lead agency had detailed information about potential futureuses for a property (details that had been published in a newsletter, for example), but did notaddress those future uses in its EIR because they had not yet been officially proposed. Thoughthe Court did not require detailed analysis of every possible future use, it did find that at least ageneral analysis of probable future uses was required. In providing context to what may fallwithin the scope of such probable future uses, the Court held that an EIR does not requirediscussion of possible future action “that is merely contemplated or a gleam in a planner’s eye.”(Laurel Heights, supra, 47 Cal.3d at 398.) Pursuant to this CEQA standard, an argument existsthat a WSA’s evaluation of projected water demand associated with the “planned future uses” inthe water provider’s service area should be tied to the more limited set of “reasonablyforeseeable probable future projects” analyzed in the cumulative impacts analysis of the EIR.

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VI. CONCLUSION

In many ways, the weight of recent authority discussed above shows that WSAs aremerely an evidentiary component of the CEQA record evaluated by cities in determiningwhether water supplies will be sufficient to serve the proposed project, in addition to existing andplanned future uses, and in evaluating the potential for environmental impacts associated withproviding that water service. Notwithstanding, WSAs carry significant weight. Indeed, they areprepared by the retail water agency, the presumed expert in the field of local water supplymanagement, availability and reliability, and they are modeled under SB 610 to serve as thedriving factor in water supply analyses and conclusions for certain projects subject to CEQA.With that, cities statewide should embrace the WSA process and its related issues, as thesematters have serious potential to shape a city’s future.

PAETER E. GARCIACHRISTOPHER H. CALFEEJESSICA L. HIRSCH

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