Last February, I wrote about the California State University Board of Trustees’ (CSU) unique stance concerning their responsibilities under the California Environmental Quality Act (CEQA).  CSU agrees that like every other private developer, it has a duty to mitigate for significant impacts on the environment from its development projects.  However, they do not budget for the cost of mitigation for off-campus impacts as part of the project.  Rather, CSU argues that off-campus mitigation is a separate cost and their only responsibility is to request funds from the Californian legislature and if not appropriated, then CSU can move forward with the project without mitigating.

I suggested that “perhaps it isn’t surprising that an academic institution would raise a fairly academic reading of CEQA.  Beyond the ivory tower, however, this proposed interpretation gets a failing grade.”  On August 3, 2015, the California Supreme Court issued its opinion in the matter of City of San Diego, et al. v. Board of Trustees of the California State University (Case S199557) and did indeed give the CSU San Diego Environmental Impact Report a grade of “F”.

The basis for CSU’s position is, and always has been, flawed.  In a similar case, City of Marina  et al. v. Board of Trustees of the University of California (2006) 39 Cal.4^th 341),  the CSU made a series of arguments as to why it could not pay for the mitigation of significant impacts they identified to off-campus resources.  The California Supreme Court rejected all of them.  The Court made it clear that there was no boundary limit regarding the need to mitigate identified significant impacts.  In the City of San Diego opinion, the Court cites their discussion in Marina that “CEQA requires a public agency to mitigate or avoid its projects significant effects not just on the agency’s own property, but “on the environment” with “environment” defined for these purposes as “the physical conditions which exist within the area which will be affected by a proposed project.”

Sounds clear, right?  Well, CSU grabbed onto other language in Marina that was not necessary for the Court’s decision (known as dictum). In Marina, the Court stated that an agency’s power to mitigate effects through voluntary payment is ultimately subject to legislative control and the power does not exist if the Legislature does not appropriate the money.   Apparently, that’s where CSU stopped reading the opinion because they started asserting that they would identify mitigation needs and then go and request those separate funds from the Legislature and if not appropriated, well…they had done their deed and complied with CEQA.

Whether a request for separate mitigation funding is sufficient for CEQA purposes is the issue in City of San Diego.  The California Supreme Court said that CSU’s use of the dictum, even if they could, doesn’t support their position that they could only pay for off-campus mitigation if they receive a specific legislative appropriation.  The California Supreme Court reasoned:

1. CSU never asserted in Marina that they could only pay for off-campus mitigation through a specific appropriation; it was never argued by them. Furthermore, a public agency not only has discretion over fiscal decisions for its mitigation, it also has discretion over such things as the size of the project, permit conditions and project alternatives. They can alter the project to reduce significant impacts and the cost of mitigation.
2. Neither CEQA nor any case law or regulation prevents funds allocated for a project from being used for mitigation. In fact, CEQA directs that “all state agencies…shall request in their budgets the funds necessary to protect the environment in relation to problems caused by their activities.”
3. “No provision of CEQA conditions the duty of a state agency to mitigate its projects’ environmental effects on the Legislature’s grant of an earmarked appropriation. Mitigation is the rule…”
4. CSU is providing for on-campus mitigation and argues that they need a special appropriation for off-campus, but CEQA makes no such distinction regarding mitigation.

This decision should finally clear up CSU’s confusion.  A state agency that may have an obligation to make fair-share payments for mitigation of off-site impacts of a proposed project must actually include those costs as part of its project and mitigate significant environmental impacts.  Additionally, the Court noted  “while education may be CSU’s core function, to avoid or mitigate the environmental effects of its projects is also one of CSU’s functions.  This is the plain import of CEQA, in which the Legislature has commanded that “[e]ach public agency shall mitigate or avoid the significant effects on the environment of projects that it carries out or approves whenever it is feasible do so.’”

With this remedial course in CEQA, perhaps CSU’s new EIR will finally get a passing grade.