Court Upholds Urban Water Agency’s Supply Projections Despite Uncertainties Arising From Listed Species And Environmental Regulations

Public water suppliers and land-use agencies should find it easier to defend projections of water supply availability to meet demand from existing and future urban development, under the First District Court of Appeal’s decision in Sonoma County Water Coalition, et al. v. Sonoma County Water Agency, et al., (— Cal.App.4th —, First Dist., October 8, 2010) (Sonoma). The case adds to a growing trend of published decisions recognizing that uncertainty is endemic to the increasingly complex water supply planning that is needed to accommodate existing and future land development in modern California.

The Sonoma decision reverses a trial court judgment and affirms the legal adequacy of Sonoma County Water Agency’s (Agency) 2005 Urban Water Management Plan (UWMP). The UWMP had concluded that the Agency’s existing and planned future water sources would be sufficient to meet demand from existing and planned future development throughout the Agency’s service area, which encompasses a large part of Somona County and the northern portion of Marin County. The decision comes just as the Agency and urban water suppliers throughout California are preparing UWMP updates that must be approved and submitted to the California Department of Water Resources (DWR) by July 1, 2011.

The Urban Water Management Planning Act (Act) requires urban water suppliers, like the Agency, to prepare and update an UWMP every five years. UWMPs function as a planning tool for urban water suppliers and to inform land-use agencies about current and projected availability of water supplies to support land-use planning decisions ranging from general plan updates to residential subdivision approvals. Among other things, UWMPs must project the availability of existing and planned future water sources over a 20-year planning horizon, including normal water years, single dry years and multiple dry-year periods. UWMPs also must project the water demand expected to arise within the service area over that same 20-year period and must assess the effect of water conservation measures on that demand. Finally, UWMPs must assess the sufficiency of projected supplies to meet projected demand and, if a shortage is projected, must outline plans to address that shortage.

Although the Sonoma decision arises in the context of UWMP litigation, the court’s holding and rationale should be persuasive authority for defending water supply projections in SB 610 Water Supply Assessments (WSAs), California Environmental Quality Act (CEQA) documents, and SB 221 Water Sufficiency Verifications (Verifications) prepared for new land development projects. As a result, the Sonoma decision should have broad effect on public water suppliers striving to serve existing and new development approved by land-use agencies, in the face of environmental litigation and regulatory action that increases uncertainty about long-term water supply availability from local, regional and statewide sources of water supply.

The Sonoma court held that so long as a public water supplier clearly discloses the physical and legal factors affecting the projected availability and reliability of its existing and planned future water supplies, and so long as the supplier’s assessment of those factors is substantially supported by facts and other evidence, a reviewing court should not second-guess the supplier’s water availability projections. In reversing the trial court’s decision invalidating the Agency’ UWMP for failing to address uncertainties in the Agency’s water supply projections, the Sonoma court quoted the amicus curiae brief filed by the Association of California Water Agencies, the League of California Cities and the California State Association of Counties. The amicus brief observed that “some level of uncertainty is ‘a permanent, inherent feature of modern water management . . . [that] arises from a range of scientific and legal regulatory factors that cannot be avoided.’” From there, the Sonoma court reasoned that:

“Water management is subject to the vagaries of climate, competing demands from agricultural, industrial and residential uses, environmental constraints, and overlapping regulatory regimes at both the federal and state levels. In rejecting the Agency's conclusions, the [trial] court required a level of certainty not factually attainable and not required by the statute, and substituted its own judgment as to the reasonableness of the assumptions relied upon by the Agency. This was error.”

The court held that judges should defer to a water agency’s projections of long-term water supply, “even if reasonable minds may differ” on the merits of the projections. In reaching that holding, the court enforced the highly deferential “substantial evidence” standard of review, emphasizing the need for judges to defer to water agency expertise in navigating the complex range of physical, scientific and legal factors that make water supply availability projections inherently difficult and uncertain. The court held:

“In technical matters requiring the assistance of experts and the study of marshaled scientific data as reflected herein, courts will permit administrative agencies to work out their problems with as little judicial interferences as possible.”

The court rejected contentions that the Agency must discount its projected water supplies and develop alternative back-up supplies based on the Agency’s disclosure that facilities providing its projected water supplies are subject to federal Endangered Species Act regulations, the Federal Energy Regulatory Commission’s licensing authority, the Army Corps of Engineers’ ongoing flood control operations, and the State Water Resources Control Board’s authority over the Agency’s existing water rights and a new water rights application.

“If substantial evidence supports a water supplier's resource assumptions, it would be wasteful of the Agency's resources if it were nevertheless required to focus on development of detailed plans for alternatives that its own experts view as improbable. We find nothing in the Act that requires it to do so . . . ."

The Sonoma court went on to hold that "The administrative record and the Plan itself adequately demonstrate that Agency and its experts articulated the predicates for assumptions on which the Plan is based, and provided the factual basis and expert opinion to support those assumptions, while acknowledging the uncertainties inherent in the process. It considered reasonable probabilities—not simply possibilities—in its analyses, and the Agency did not abuse its discretion.”

The Sonoma court also rejected the procedural argument that water supply projections must be reviewed and approved by all environmental regulatory agencies that might have some authority to restrict the ongoing operation of existing water development projects or to restrict or block planned future water development projects. In rejecting those contentions, the court held that judges must accord deference to the expertise and discretion of public water suppliers, must resist the temptation to re-weigh evidence in evaluating water supply projections, and must not invent procedural requirements that the governing statutes do not prescribe.

Finally, the Sonoma court rejected the petitioners’ challenge to water conservation assumptions incorporated into the UWMP’s projection of long-term demand in the Agency’s service area. To support the conservation assumptions, the UWMP cited evidence including annual reports that the Agency submitted pursuant to the California Urban Water Conservation Council (CUWCC) Memorandum of Understanding (MOU). The CUWCC MOU requires suppliers to incorporate certain types of water demand management measures, and to submit annual reports describing the measures. The Act authorized CUWCC MOU signatories to incorporate annual reports into UWMPs in order to satisfy the Act’s requirement for demand management measures. The trial court found that the Agency’s annual reports were not sufficiently detailed to substantiate the amount of water conservation incorporated into the Agency’s long-term demand projections. The Sonoma court reversed the trial court on this issue, holding that the Act expressly authorizes UWMPs to rely on CUWCC MOU annual reports.

The Sonoma case joins a growing series of recent published decisions that clarify a range of legal principles governing the assessment of water supply and demand in California’s increasingly close integration of water supply planning with land-use planning. Those decisions include:

  • Vineyard Area Citizens for Responsible Growth v. City of Rancho Cordova, 40 Cal.4th 412 (2007), where the California Supreme Court held that CEQA does not require a proposed urban development project to prove with absolute certainty that water will be available to serve the project, so long as the record shows there is a reasonable likelihood the water will be there when needed—a showing that varies according to whether the requested land-use entitlement allows construction or is a more general, higher-level planning action.
  • Santa Clarita Organization for Planning the Environment v. County of Los Angeles, 157 Cal.App.4th 149 (2007), where the Court of Appeal held that the fact of litigation challenging a water transfer does not automatically make the transfer water fatally uncertain (and hence unavailable) for purposes of demonstrating water availability for a new urban development project under CEQA.
  • California Water Impact Network v. Newhall County Water District, 161 Cal.App.4th 1464 (2008), where the Court of Appeal held that a water supplier’s approval of a SB 610 Water Supply Assessment for a land development project is not actionable prior to, and separate from, CEQA litigation against the land-use agency’s approval of the development project.
  • O.W.L. Foundation v. City of Rohnert Park, 168 Cal.App.4th 568 (2008), where the Court of Appeal held that courts should defer to agency expertise in selection of the method for assessing the sufficiency of regional groundwater supplies to serve a new development project in light of cumulative demand from existing development and planned future development beyond the proposed project.
  • Watsonville Pilots Ass’n v. City of Watsonville, 183 Cal.App.4th 1059 (2010), where the Court of Appeal upheld a general plan update EIR’s water supply analysis against what the court described as a “mathematical assault” on the conclusion that conversion of irrigated agricultural land to urban use would “substantially offset” the groundwater use from new urban development. That result was supported by the EIR’s conclusion that the general plan would cause a significant unavoidable water supply impact, and because the general plan, by its nature, did not authorize actual construction of new development and included policies requiring future development proposals to comply with water conservation standards and other requirements intended to ensure long-term water supply sufficiency.


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