The Sixth District Court of Appeal, in Santa Rita Union School District v. City of Salinas (2023), 94 Cal.App.5th 298, reversed the lower court, finding that the City of Salinas’ (“City”) final programmatic environmental impact report (EIR) for the West Area Specific Plan (“Specific Plan” or “Project”) did not need to analyze the impacts of a speculative alternative scenario that opponents argued was likely to occur. Specifically, the court found that it was appropriate for the City to analyze the impacts of its proposed plan—which included proposed site for schools to support increases in population due to future residential development—even though the local school Districts argued that the schools would likely never be built.

The Specific Plan covered approximately 800 acres and proposed a development including 4,340 dwelling units to accommodate up to 15,928 new residents at full build-out in 20-30 years, as well as commercial development, parks and open space, and schools. The Specific Plan area included three elementary schools, one middle school, one high school, all located within the Santa Rita Union School District (SRUSD) and the Salinas Union High School District (SUHSD) (collectively, “Districts”). To comply with CEQA, the City prepared the Specific Plan EIR, which provided varying levels of specificity as to various elements of the Plan, depending on available information.

The EIR clarified that individual projects within the Specific Plan, including the schools, might require further discretionary approvals and environmental review. To address impacts to schools, the EIR imposed a mitigation measure requiring the payment of development impact fees before the issuance of residential building permits. Thus, the EIR concluded that: “Government Code sections 65995 and 65996 provide that school-related impacts are fully mitigated under CEQA through payment of developer-impact fees set by local school districts under Education Code section 17620….”

The Districts commented that the impact fee mitigation measure was inadequate to mitigate impacts to schools, and argued that the EIR should evaluate the possibility that new schools would never be built, requiring the Districts to accommodate the growing population in existing facilities. The City responded that it had correctly analyzed the impacts of its proposed Plan, that inadequate funding is an economic or social issue not cognizable under CEQA, and that the scenario proposed by the districts was “speculative, uncertain, and vague,” because a variety of factors could impact development and construction over the decades-long lifespan of the Plan. The Districts submitted additional comments requesting that the EIR analyze the “no-new-schools” scenario and require the plan to be phased, but ultimately the City approved the Specific Plan and certified the final EIR.

The Districts sued the City under CEQA. The trial court ruled in favor of the Districts, finding that the EIR should have included analysis of potential offsite impacts from the Specific Plan due to petitioners’ “concern” that they would not have adequate funding to build the proposed new schools, and that the City had not adequately responded to the Districts’ comments in the final EIR. While the City opted to comply with the trial court’s writ, the real parties in interest (landowner applicants for the Specific Plan approvals) appealed.

The Court of Appeal reversed, finding the City properly assumed in the EIR that the contemplated new schools would be built as part of the Specific Plan. The Court found that the Districts’ claims about the funding amounted to no more than speculation and uncertainty, and the EIR need not analyze “off-site impacts of ill-defined, uncertain, generalized, and speculative alternatives to new school construction, as offered by the Districts.” The Court also found that a lead agency is not required to evaluate phasing of decades-long projects, as the pace of proposed development under the Specific Plan would be subject to a variety of unpredictable factors.

The Court also ruled on several procedural issues. First, it held that the City’s voluntary compliance with the writ of mandate did not moot or waive the landowners’ separate right to appeal, and if the appellants prevailed, City’s certification of the EIR would be restored. Second, distinguishing Meinhardt v. City of Sunnyvale (2022) 76 Cal.App.5th 43 (under review by the California Supreme Court (Case No. S274147)), the Court held that the trial court order did not determine the final rights of the parties by specifying what relief it would order, therefore the trial court’s subsequent entry of judgment, not the earlier order, triggered the deadline to appeal.

The Court also discussed the standard of review, clarifying that the omission of information from an EIR can constitute a failure to proceed in the manner required by law, reviewed de novo, only if the analysis is clearly inadequate or unsupported and the information omitted from the EIR is both required by CEQA and necessary to informed discussion. The Court found that the question of whether the EIR was required to discuss a scenario in which new schools were not built was a mixed question of law and fact.

Applying the deferential substantial evidence standard to the City’s factual finding that the Districts’ comments were too speculative to require further analysis, the Court reversed the trial court judgment.

Conclusions and Take Away

This case provides helpful guidance on substantive and procedural issues. Most notably, it affirms the long-standing principle that the lead agency has the right to define its project, and it need not analyze every scenario that an opponent argues could—or even is likely to—occur. The ruling on the timing for appeal is also notable for practitioners, given the ambiguity on when an order alone can act as a final judgment, triggering deadline to appeal. The Court also appropriately deferred to the agency on its factual determinations, rejecting the ubiquitous petitioner argument that any alleged inadequacy in an EIR constitutes a failure to proceed in the manner required by law.

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