Water Supply Assessments - Municipal Water Law

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Court holds there is no right to sue a water agency over a water supply assessment

By Thomas S. Bunn III

Following a recent decision of the California court of appeal, water agencies will no longer have to worry about being sued over their water supply assessments under SB 610. The court held in California Water Impact Network v. Newhall County Water District that the law gives the decision whether there is sufficient water for a development project to the city or county approving the project. Therefore, someone seeking to challenge that decision in court must sue the city or county, not the water agency.

Statutory Background

Under SB 610 (Water Code 壯 10910-10915), a city or county considering a proposed residential development of more than 500 dwelling units, or a non-residential development of similar size, must request the public water system that would serve the development to prepare and submit a water supply assessment, which analyzes whether the projected water supplies are sufficient to supply the development for 20 years. The city or county must include the water supply assessment in its environmental document. The city or county must then determine, based on the entire record, whether projected water supplies are sufficient to serve the development.

The GateKing Project

GateKing Properties proposed to build a 584-acre industrial/business park in the City of Santa Clarita. The City requested a water supply assessment from the Newhall County Water District. The City concluded, based on the water supply assessment, that there was sufficient water for the project, and it approved the project. Various environmental organizations sued the City under the California Environmental Quality Act (CEQA). The court of appeal set aside the City's environmental impact report because it did not adequately discuss legal uncertainties surrounding a water transfer. Accordingly, the City requested a second water supply assessment from the water district. The water district concluded that the water transfer could be relied on despite the legal uncertainties. The City agreed, and again approved the project. This time, not only did the environmental groups sue the City under CEQA, but a new group, California Water Impact Network, also sued the water district in a separate lawsuit to set aside its water supply assessment, on the same grounds.

The Court Decision

The court dismissed the lawsuit against the water district. It based its decision on two related grounds. First, the water district did not make the final decision on water supply sufficiency; SB 610 reserved that decision to the City. Second, before filing suit, California Water Impact Network was required to exhaust its administrative remedies by making its case to the City in the CEQA public comment process.

The court emphasized that the water district's water supply assessment was not immune from legal challenge - it just had to be challenged in a CEQA lawsuit against the City, after the City approved the project. The court pointed out that exactly that had happened the first time around. When the environmental groups prevailed against the City on its Environmental Impact Report in their first lawsuit, they in effect caused the water supply assessment to be set aside as well.

This decision will avoid multiple and simultaneous lawsuits and the attendant possibility of inconsistent rulings. In addition, it allows water agencies to conserve their resources by avoiding the cost of defending unnecessary lawsuits.

Mr. Bunn represented Newhall County Water District in the case.