Court Decision Streamlines Transfers of Central Valley Project Water

The Third District Court of Appeal recently held that The West Side Irrigation District and the Banta-Carbona Irrigation District (the “Districts”) complied with the California Environmental Quality Act (“CEQA”) by adopting negative declarations for the transfer of Central Valley Project water to the City of Tracy (“City”).  The Court held that the City’s prior General Plan Environmental Impact Report (“EIR”) adequately analyzed any potential environmental impacts caused by the transfers.   Thus, no new EIR was required.

In 1993, the City prepared an EIR for its General Plan which required the City to obtain additional sources of surface water to supply future development.  The EIR analyzed the potential environmental impacts of these water policies.  In 2001, the City negotiated water transfer agreements with the Districts in order to annually obtain 10,000 acre feet of Central Valley Project water.  The Districts served as lead agencies for the projects and conducted separate environmental reviews, both of which resulted in negative declarations. Sierra Club challenged the Districts’ decisions, claiming that the environmental review was inadequate and that a joint EIR was required.  The Court rejected these challenges, finding that the transfer projects were not smaller parts of a larger plan and that the City's General Plan EIR analyzed the potential environmental impacts caused by the transfers.  Accordingly, the court upheld the Districts’ use of negative declarations for the Central Valley Project water transfers.

This case makes clear that CEQA’s prohibition against the segmentation of a project into smaller parts is not violated where two independent and distinct water transfer projects are undertaken—even if the water transfers involve similar agencies, locations and purposes.  Further, the Court’s ruling demonstrates that a Central Valley Project water transfer may be the subject of a negative declaration, provided the potential environmental impacts of the water transfer have been previously analyzed in an EIR.  Finally, the Court issued a warning to would-be petitioners, urging them not to challenge water transfer projects with the intent of delay or to seek relief that would require an agency to speculate about future water supply events.