November 12, 2009
Public agencies can use exemptions under the California Environmental Quality Act ("CEQA") to avoid environmental review of their financing actions, according to two opinions published this week by the California Court of Appeal.
The opinions issued by the 2nd District Court of Appeal provide public agencies with further guidance as to under what circumstances a CEQA exemption may be appropriate and when further environmental review may not be necessary. If a project fits within a CEQA exemption, a public agency may be wise to use such an exemption to avoid detailed and extensive environmental review, and thus save money and time in getting a project approved.
In Sustainable Transportation Advocates of Santa Barbara (“Advocates”) v. Santa Barbara County Association of Governments (“County”), the Court of Appeal upheld the passage of Measure A, a retail sales and use tax to fund transportation projects in Santa Barbara County. The County had placed Measure A on the ballot without conducting environmental review by claiming that its action was not a “project” and thus not subject to CEQA (which is a claim that public agencies often consider an “exemption” from CEQA). Under CEQA Guidelines section 15378(b)(4), a “project” for the purposes of CEQA does not include “the creation of government funding mechanisms or other government fiscal activities, which do not involve any commitment to any specific project which may result in a potentially significant impact on the environment.”
The Court agreed that Measure A did not qualify as a “project” under that section. Although Measure A did contain a list of potential transportation projects that could be funded by the revenues that it would provide, Measure A did not actually approve any specific transportation projects. While the petitioner in this case argued that the environmental impacts of the listed transportation projects should have been analyzed, the Court held that Measure A was simply a financing mechanism in light of the fact that Measure A did not constitute a commitment by the County to actually implement any of the listed projects.
In Bus Riders Union (“Bus Riders”) v. Los Angeles County Metropolitan Transportation Agency (“MTA”), the Court of Appeal upheld the use of a statutory exemption to CEQA when the MTA approved a fare increase to pay for operational expenses. The MTA reasoned that under CEQA section 21080(b)(8), environmental review was unnecessary in this instance. That section exempts an agency from performing CEQA review for the setting of “rates, tolls, fares or other charges," which “the public agency finds” are for the purposes of meeting operating expenses, purchasing supplies and equipment, meeting financial reserve needs and obtaining funds for capital projects necessary to maintain service within existing service areas. Based on the detailed resolution that specified the reasons for the fare increase and the uses for the fare revenue, along with other documents – including past and future budgets that showed how revenue streams were used – the Court found that there was substantial evidence in the administrative record to support MTA’s use of the statutory exemption.