CGF letter to LAFCo and Morgan Hill about CEQA non-compliance and the loss of prime farmland

(Below is a letter that one of CGF's outside attorneys, Paul Carroll, wrote to the Santa Clara County LAFCO agency when it approved Morgan Hill's expansion based on a Negative Declaration stating that no significant impacts to farmland could occur, when LAFCO's own staff said such impacts had in fact occurred. -Brian)

April 20, 2007

Neelima Palacherla, Executive Officer
Local Agency Formation Commission of Santa Clara County
70 West Hedding Street, 11^th Floor, East Wing

San Jose, CA 95110

Re: Morgan Hill’s Mitigated Negative Declaration for the Urban Limit Line/Greenbelt Study General Plan Amendment and Related Actions

Dear Ms. Palacherla

I represent the Committee for Green Foothills and write regarding the above-referenced project.

On April 4, 2007, the Local Agency Formation Commission of Santa Clara County (LAFCO) approved the project despite its conclusion that the mitigated negative declaration was flawed under the California Environmental Quality Act (CEQA). A negative declaration is improper if there is a fair argument that the project may have a significant adverse impact on the environment. LAFCO’s April 4, 2007, staff memo provides the requisite fair argument, namely that the project will destroy prime agricultural land.

The Committee contends that LAFCO was required to do one of three things when presented with the inadequate negative declaration. It could have assumed the role of lead agency and prepared an EIR based on the City’s failure to consult; it could have assumed the role of lead agency and prepared a supplemental EIR based on new information; or it could have denied the project because it is contrary to LAFCO policy.

In this letter, I will show how the negative declaration violated CEQA, and why LAFCO must prepare an EIR or deny approval of the project.

LAFCO’s Approval of the Negative Declaration Was Improper under CEQA

The threshold for an EIR is well established. An EIR must be prepared whenever “there is substantial evidence that any aspect of the project, either individually or cumulatively, may cause a significant effect on the environment.” (Guidelines, § 15063, subd. (b)(1); accord Pub. Res. Code, § 21100, subd. (a); § 15002, subd. (f)(1), (2); County Sanitation District No. 2 v. County of Kern (2005) 127 Cal.App.4^th 1544.) “May” means a reasonable possibility. (§§ 21082.2, subd. (d); 21100, subd. (a); 21151, subd. (a); League for Protection of Oakland’s Architectural Resources v. City of Oakland (1997) 52 Cal.App.4th 896, 904-905.)

If substantial evidence supports the existence of a fair argument, an EIR must be prepared, even if the record contains substantial evidence to the contrary. (Guidelines, § 15064, subd. (f)(1); Pocket Protectors v. City of Sacramento (2005) 124 Cal.App.4^th 903, 930-931; League for Protection of Oakland’s Architectural Resources, supra, 52 Cal.App.4th at pp. 904-905.) In short, if a fair argument is made, “it cannot be overcome by substantial evidence to the contrary.” (Architectural Heritage Assn. v. County of Monterey (2004) 122 Cal.App.4th 1095, 1110.) “Substantial evidence” means “enough relevant information and reasonable inferences from this information that a fair argument can be made to support a conclusion, even though other conclusions might also be reached.” (Guidelines, § 15384, subd. (a).)

The fair argument standard is thus deemed a “low threshold” for the preparation of an EIR. (E.g., Pocket Protectors, supra, 124 Cal.App.4^th at p. 928; No Oil, Inc. v. City of Los Angeles (1974) 13 Cal.3d 68, 84.) The “low threshold…reflects a preference for resolving doubts in favor of environmental review” and EIR preparation. (Architectural Heritage Assn., supra, 122 Cal.App.4th at p. 1110.)

Under these principles, LAFCO’s approval of the negative declaration was improper under CEQA. There is substantial evidence in the record that the project may have a significant adverse or cumulative impact on the environment. Notably, this evidence was provided by LAFCO itself. LAFCO staff concluded:

The project site consists of Class 1 soils and is considered prime agricultural land based on the definition of prime agricultural lands in the Cotese Knox Hertzberg Act. However, the City, using the LESA model, determined that the conversion of the agricultural land at the project site is less than significant. LAFCO staff and other stakeholders have expressed many concerns, over the last few months, about the use of the Land Evaluation Site Assessment Model (LESA) in determining impacts to agricultural resources in Santa Clara County. (April 4, 2007, LAFCO memorandum from Dunia Noel to Neelima Palacherla.)

This information satisfies the fair argument standard. The project site comprises prime agricultural land according to criteria set forth in the Cotese Knox Hertzberg Act. The fact that the City used a different definition that excluded the land as prime is irrelevant—especially given LAFCO staff’s criticism of the City’s criteria.[1]

Moreover, LAFCO is not free to ignore evidence that its staff generated. In Stanislaus Audubon Society, Inc. v. County of Stanislaus (1995) 33 Cal.App.4th 144, the County approved a negative declaration for a proposed golf course and related facilities. Petitioner sued claiming that the record contained substantial evidence that the project might spur development and have a growth-inducing effect. (Id. at p. 153.) Much of that evidence was found in the planning department’s initial study. (Id. at p. 153.) The County revised the initial study and approved the negative declaration, deferring consideration of growth-inducing impacts until development was actually proposed. (Id. at p. 153.) On appeal, the County and real party argued that the first initial study was without effect, having been superseded by the second, and that planning staff were not qualified to opine on the project’s potential impacts. (Id. at pp. 154-155.) The court of appeal rejected both arguments. It held that the planning staff were obviously qualified to render an opinion on impacts, and that the County’s approval of the negative declaration based on the revised initial study could not eliminate the substantial evidence contained in the first initial study. (Ibid.)

So it is here. LAFCO cannot ignore its staff’s conclusion that the project will destroy prime agricultural land. Since the mitigated negative declaration contains substantial evidence that the project may have an adverse impact, LAFCO’s approval of the project was contrary to CEQA.

LAFCO Must Prepare an EIR

The City approved the project and adopted the negative declaration on April 19, 2006. Accordingly, the statute of limitations for a challenge to the City’s decision has expired. When this occurs, a responsible agency confronted with a flawed negative declaration has several, limited options, two of which apply here. (CEQA Guidelines, § 15052, subd. (a)(1)-(3).)

First, a responsible agency “shall assume the role of lead agency” and prepare an EIR when the lead agency prepared an inadequate negative declaration without consulting with the responsible agency, and the statute of limitations has expired for a challenge to the lead agency’s approval. (CEQA Guidelines, § 15052, subd. (a)(3).) That occurred here.

According to the LAFCO staff report, the City failed to consult with LAFCO regarding the City’s conclusion that the project would not adversely impact prime agricultural land until well after the City’s April 19, 2007, approval of the project and adoption of the negative declaration:

Based on the above mitigation measures adopted by the City on April 19, 2006, the City appears to have deferred final analysis of agricultural resource impacts and consideration of potential mitigation measures to sometime after the adoption of the Mitigated Negative Declaration. Specifically, the City deferred their analysis until November 2006 and LAFCO did not receive a copy of that analysis until receiving the City’s recent application for an urban service area amendment. [¶]...[¶] Furthermore, this deferral process did not allow LAFCO, other responsible agencies, or the public the opportunity to comment on whether the City’s analysis of agricultural impacts and mitigation measures was adequate or consistent with their respective agency’s policies. LAFCO staff believes that all analysis of impacts to agricultural resources and mitigation measures should have been included within the Mitigated Negative Declaration adopted by the City in April 2006. (April 4, 2007, LAFCO memorandum from Dunia Noel to Neelima Palacherla.)

In short, the City failed to apprise LAFCO of its conclusion that the land was not prime until long after the statute of limitations had run. Under these circumstances, LAFCO is obligated to act as the lead agency and prepare an EIR for the project. (CEQA Guidelines, § 15052, subd. (a)(3).)

The Guidelines dictate a second course of action that LAFCO can take. A responsible agency “shall assume the role of lead agency” and prepare an EIR when new information that the project will have a significant impact, which was not known and could not have been known when the negative declaration was adopted by the lead agency, becomes known after the statute of limitations has run. (CEQA Guidelines, §§ 15052, subd. (a)(2), 15162, subd. (a)(3).) That too occurred here.

According to the LAFCO staff report, LAFCO did not learn that the City had concluded that the land was not prime until well after the statute of limitations had run. The City’s conclusion is new information: It was not known when the City approved the project, since the City had deferred its analysis. And the new information shows that the project will have a significant impact on the environment, the elimination of prime agricultural land.[2] (CEQA Guidelines, § 15162, subd. (a)(3)(A).)

In sum, LAFCO’s approval of the project was improper under CEQA. Given the flaws in the negative declaration, LAFCO should prepare an EIR as required by subdivisions (a)(2) or (a)(3) of Guideline 15052.

LAFCO’s third option, of course, is to reconsider and deny approval of the project, which would not require additional CEQA review.

Thank you for your consideration of this letter. Please let me know as soon as possible how LAFCO intends to proceed.

Very truly yours,
Paul V. Carroll

cc: City of Morgan Hill

Black Rock LLC

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[1] Even under the City’s criteria, the site missed being characterized as prime agricultural land by a half a point. (See PMC’s November 15, 2006, Agricultural Land Evaluation for Black Rock Property.)

[2] It is well to note that the City’s failure to consult LAFCO had been an ongoing problem that LAFCO raised in its letters to the City of March 15, 2006, and March 28, 2006. Indeed, the City did not even notify LAFCO of the availability of the Draft Mitigated Negative Declaration. LAFCO happened to learn of its existence when it received a copy of a comment letter from the Santa Clara County Planning Office. (March 15, 2006, LAFCO letter to City.)