Delaware Tetra Technologies, Inc. v. County of San Bernardino

Filed 5/10/16

CERTIFIED FOR PARTIAL PUBLICATION*

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

DELAWARE TETRA TECHNOLOGIES,
INC.,
G050858
Plaintiff and Appellant,
(Super. Ct. No. 30-2013-00636391)
v.
OPINION
COUNTY OF SAN BERNARDINO et al.,

Defendants and Respondents;

SANTA MARGARITA WATER
DISTRICT et al.,

Real Parties in Interest and
Respondents.

Appeal from a judgment of the Superior Court of Orange County,
Gail Andrea Andler, Judge. Affirmed. Appellant‟s request for judicial notice. Denied.
Rutan & Tucker, Robert S. Bower, Philip D. Kohn, John A. Ramirez and
Alan B. Fenstermacher for Plaintiff and Appellant.

*
Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this
opinion is certified for publication with the exception of parts IV., V., and VI. of the
Discussion.
 Downey Brand, Christian L. Marsh, Kevin M. O‟Brien and Rebecca R.A.
Smith for Defendants and Respondents.
Richards, Watson & Gershon, James L. Markman, B. Tilden Kim and
Patrick D. Skahan for American Ground Water Trust and Property and Environment
Research Center as Amici Curiae on behalf of Defendants and Respondents.
Best Best & Krieger, Michelle Ouellette and Sarah E. Owsowitz for Real
Party in Interest and Respondent Santa Margarita Water District.
Remy Moose Manley, Sabrina V. Teller and Gwynne B. Hunter for
California State Association of Counties and California Association of Sanitation
Agencies as Amici Curiae on behalf of Defendant and Respondent County of San
Bernardino and Real Party in Interest and Respondent Santa Margarita Water District.
Brownstein Hyatt Farber Schreck, Diane C. De Felice, Lisabeth D.
Rothman, Amy M. Steinfeld; Woodruff, Spradlin & Smart and M. Lois Bobak for Real
Parties in Interest and Respondents Cadiz, Inc., and Fenner Valley Mutual Water
Company.
* * *
INTRODUCTION
This appeal is one of six related cases arising out of a proposed project to
pump fresh groundwater from an underground aquifer in the Mojave Desert (the Project).
The aquifer is located below real property owned by Cadiz, Inc. (Cadiz). The Project is a
public/private partnership, the purposes of which are to prevent waste of the water in the
underground aquifer, and to transport the water to many other parts of the state in which
it is needed.
In this case, Delaware Tetra Technologies, Inc. (Delaware Tetra), filed a
petition for a writ of mandate in the trial court, challenging a resolution by the San
Bernardino County Board of Supervisors (the board of supervisors and the County of San
Bernardino will be jointly referred to herein as the County). The resolution authorized

2
the execution of a memorandum of understanding (the Memorandum) among the County,
Cadiz, the Santa Margarita Water District (Santa Margarita), and the Fenner Valley
Mutual Water Company (Fenner Valley). Delaware Tetra argued that the County
improperly approved the Memorandum without having performed the necessary
environmental review under the California Environmental Quality Act (CEQA)
(Pub. Resources Code, § 21000 et seq.). The trial court denied the petition for a writ of
mandate, and Delaware Tetra appeals.
We conclude environmental review was not required before the County
approved the Memorandum. We further conclude the Memorandum did not violate
either the County‟s relevant groundwater management ordinance or common law.
Therefore, we affirm.

STATEMENT OF FACTS AND PROCEDURAL HISTORY
In 2002, the County approved the desert groundwater management
ordinance (San Bernardino County Ord. No. 3872, adding art. 5, § 33.06551 et seq.,
Desert Groundwater Management, to San Bernardino County Code tit. , div. 3, ch. 6)
(the Ordinance). In order to protect desert groundwater resources, the Ordinance required
operators of groundwater wells, unless specifically excluded, to obtain permits and
comply with specified standards for maintaining the health of groundwater aquifers.
Cadiz owns land in San Bernardino County. Its property overlies the Cadiz
Valley and Fenner Valley aquifer system in the Mojave Desert. The aquifer is estimated
to hold 17 to 34 million acre-feet of fresh groundwater. This groundwater flows
downward to two dry lakes, where it mixes with highly salinated groundwater before
evaporating. Once the groundwater reaches the dry lakes, it becomes unusable as fresh
water. A stated fundamental purpose of the Project is to save “substantial quantities of
groundwater” that are being lost to evaporation and excess salinity. Delaware Tetra
operates brine mining facilities at the dry lakes, which produce calcium chloride brine

3
and sodium chloride salt. The flow of groundwater is critical to Delaware Tetra‟s
operations.
The Project would have two distinct but related components:
(1) groundwater conservation and recovery, and (2) imported water storage. In the first
part of the Project (phase 1), approximately 34 new wells will be constructed on Cadiz‟s
land to extract an average of 50,000 acre-feet of groundwater from the aquifer every year
for 50 years; as many as 75,000 acre-feet of groundwater may be extracted in any given
year.1 Cadiz must pump the groundwater “in accordance with agreements with Cadiz
Inc. and the Cadiz Groundwater Management, Monitoring and Mitigation Plan . . . .”
The water will be transported via a 43-mile underground water conveyance
pipeline to the Colorado River Aqueduct; the aqueduct will then transport the water to the
Project participants, including Santa Margarita. Eighty percent of the Project‟s
groundwater yield will be delivered to water providers with whom Cadiz has contracted;
the remaining 20 percent will be reserved for users in San Bernardino County. The
Project will be managed and operated by Fenner Valley, a private, nonprofit entity
formed by Cadiz. The Project‟s pumping of groundwater before it can flow
downgradient to Delaware Tetra‟s mining facilities will significantly and negatively
affect Delaware Tetra‟s business.
In the second part of the Project (phase 2), the Project participants will be
able to send any surplus surface water supplies back to the Project site, to be held in
storage in spreading basins until needed. Phase 2 is not currently under consideration;
additional environmental review will be required before phase 2 proceeds.

1
An acre-foot is the volume of water that would cover one acre to a depth
of one foot. (Webster‟s 3d New Internat. Dict. (2002) p. 19, col. 1.) Fifty thousand
acre-feet is equivalent to 16.3 billion gallons.

4
 Santa Margarita posted a notice of preparation of a draft environmental
impact report (EIR) for the Project on March 1, 2011. In December 2011, Santa
Margarita released the draft EIR for public review and comment.
Santa Margarita, the County, Cadiz, and Fenner Valley negotiated the
Memorandum, under the terms of which the signing parties agreed that a groundwater
management, monitoring, and mitigation plan (the Plan) would be developed in
connection with the finalization of the EIR; the Plan would “govern the operation and
management of the Project by [Fenner Valley] during the operational phase of the
Project, the currently anticipated term of which is 50 years.” In the Memorandum, the
parties agreed that “compliance by [Santa Margarita], [Fenner Valley], and Cadiz with
the provisions of th[e Memorandum] and the [Plan] will satisfy the requirements for an
exclusion from the permitting requirements” of the Ordinance. The Memorandum
provided that the Project could not proceed unless the parties finalized the Plan, based on
information provided during the process of finalizing the EIR.
On May 1, 2012, the County approved resolution No. 2012-55, in which it
found the Memorandum satisfied the exclusion provisions of the Ordinance; authorized
the execution of the Memorandum on behalf of the County; and found that the approval
and execution of the Memorandum were not subject to CEQA.
Delaware Tetra filed a petition for a writ of mandate and complaint for
injunctive relief in the Superior Court of San Bernardino County, challenging resolution
No. 2012-55. After the case was transferred to the Orange County Superior Court,
Delaware Tetra filed a second amended petition and complaint. The petition and
complaint alleged the County‟s approval of the Memorandum was unlawful for two
reasons: (1) it violated the Ordinance; and (2) the County was required to assess the
environmental impacts of the Memorandum before approving it. Following a bench trial,
the trial court issued a detailed statement of decision outlining its findings of fact and

5
conclusions of law. The court denied the petition with prejudice and entered judgment
against Delaware Tetra. Delaware Tetra filed a timely notice of appeal.

DISCUSSION
I.
CALIFORNIA WATER LAW
The California Constitution and the Water Code make clear that the policy
of this state is to put water resources to reasonable and beneficial use. The Constitution
provides: “It is hereby declared that because of the conditions prevailing in this State the
general welfare requires that the water resources of the State be put to beneficial use to
the fullest extent of which they are capable, and that the waste or unreasonable use or
unreasonable method of use of water be prevented, and that the conservation of such
waters is to be exercised with a view to the reasonable and beneficial use thereof in the
interest of the people and for the public welfare.” (Cal. Const., art. X, § 2.)
Groundwater belongs to the state, not any person or entity, but may be
extracted by those with the right to do so, including those whose land overlies the
groundwater source. (Central and West Basin Water Replenishment Dist. v. Southern
Cal. Water Co. (2003) 109 Cal.App.4th 891, 905-906.)
State agencies have consistently concluded that flexibility is necessary in
managing groundwater supplies. “Groundwater management must be adapted to an
area‟s political, institutional, legal, and technical constraints and opportunities.
Groundwater management must be tailored to each basin or subbasin‟s conditions and
needs. Even within a single basin, the management objectives may change as more is
learned about managing the resource within that basin. Flexibility is the key, but that
flexibility must operate within a framework that ensures public participation, monitoring,
evaluation, feedback on management alternatives, rules and regulations, and
enforcement.” (Dept. of Water Resources, Cal.‟s Groundwater: Bulletin 118-Update

6
2003 (Oct. 2003) p. 38 [as of
May 10, 2016].)
II.
STANDARDS OF REVIEW
Whether the Memorandum was a “project” requiring prior CEQA approval
is reviewed de novo. (Fullerton Joint Union High School Dist. v. State Bd. of Education
(1982) 32 Cal.3d 779, 794; Parchester Village Neighborhood Council v. City of
Richmond (2010) 182 Cal.App.4th 305, 310.)
The remaining issues raised by Delaware Tetra are reviewed to determine
whether the County‟s quasi-legislative action was arbitrary and capricious, entirely
lacking in evidentiary support, or contrary to law. (United States v. State Water
Resources Control Bd. (1986) 182 Cal.App.3d 82, 112-113.) “„In a mandamus
proceeding, the ultimate question, whether the agency‟s action was arbitrary or
capricious, is a question of law. [Citations.] Trial and appellate courts therefore perform
the same function and the trial court‟s statement of decision has no conclusive effect
upon us. [Citation.]‟ [Citation.]” (Western/California, Ltd. v. Dry Creek Joint
Elementary School Dist. (1996) 50 Cal.App.4th 1461, 1492.)
III.
THE COUNTY WAS NOT REQUIRED TO PERFORM AN ENVIRONMENTAL REVIEW UNDER CEQA
BEFORE APPROVING THE MEMORANDUM.

Delaware Tetra contends that the Memorandum was a “project” within the
meaning of CEQA, for which environmental review was necessary before it could be
approved. Based on our analysis post, an EIR was not required for the Memorandum
because the Memorandum was not a “project.” Delaware Tetra relies primarily on the
California Supreme Court‟s opinion in Save Tara v. City of West Hollywood (2008) 45
Cal.4th 116 (Save Tara), and the appellate court‟s opinion in RiverWatch v. Olivenhain

7
Municipal Water Dist. (2009) 170 Cal.App.4th 1186 (RiverWatch), which follows Save
Tara. We are bound by Save Tara, and agree with RiverWatch, based on its facts. The
appellate court‟s opinion in Cedar Fair, L.P. v. City of Santa Clara (2011) 194
Cal.App.4th 1150 (Cedar Fair), which also follows Save Tara, is based on facts much
more analogous to those in the present case, and we agree with its analysis.
Like Cedar Fair, we follow Save Tara and conclude that under the facts of
this case, the Memorandum was not a project for purposes of CEQA, and an EIR was not
required before the Memorandum was approved. We emphasize that our holding does
not foreclose the need for environmental review for the Project; indeed, the
Memorandum itself requires the preparation and approval of an EIR (the final version of
which was certified about two months after the Memorandum was approved and
executed). In this case, for the following reasons, we hold only that, under Save Tara, an
EIR was not required for the Memorandum standing alone.
“„CEQA is a comprehensive scheme designed to provide long-term
protection to the environment.‟ [Citation.] In general, „CEQA compels government first
to identify the environmental effects of projects, and then to mitigate those adverse
effects through the imposition of feasible mitigation measures or through the selection of
feasible alternatives. It permits government agencies to approve projects that have an
environmentally deleterious effect, but also requires them to justify those choices in light
of specific social or economic conditions.‟ [Citation.] [¶] Under CEQA, local agencies
. . . are required to „prepare . . . an [EIR] on any project that they intend to carry out or
approve which may have a significant effect on the environment.‟ [Citation.] „The
Legislature has made clear that an EIR is “an informational document” and that “[t]he
purpose of an environmental impact report is to provide public agencies and the public in
general with detailed information about the effect which a proposed project is likely to
have on the environment; to list ways in which the significant effects of such a project
might be minimized; and to indicate alternatives to such a project.” [Citations.]‟

8
[Citation.] „However, an agency has no duty of compliance with CEQA unless its actions
will constitute (1) “approval” (2) of a “project.” [Citation.]‟ [Citation.] [¶] CEQA
applies only to „discretionary projects proposed to be carried out or approved by public
agencies . . . .‟ [Citation.] A „“[p]roject”‟ subject to CEQA is defined as „an activity
which may cause either a direct physical change in the environment, or a reasonably
foreseeable indirect physical change in the environment, and which is any of the
following: [¶] (a) An activity directly undertaken by any public agency. [¶] (b) An
activity undertaken by a person which is supported, in whole or in part, through contracts,
grants, subsidies, loans, or other forms of assistance from one or more public agencies.
[¶] (c) An activity that involves the issuance to a person of a lease, permit, license,
certificate, or other entitlement for use by one or more public agencies.‟ ([Pub.
Resources Code,] § 21065.)” (Parchester Village Neighborhood Council v. City of
Richmond, supra, 182 Cal.App.4th at pp. 310-311, fn. omitted.)2
As is relevant to the matters at issue in this appeal, “[t]he term „project‟
refers to the activity which is being approved and which may be subject to several
discretionary approvals by governmental agencies. The term „project‟ does not mean
each separate governmental approval.” (Cal. Code Regs., tit. 14, § 15378, subd. (c).)
The Memorandum will cause neither a direct nor a reasonably foreseeable
indirect physical change in the environment. Delaware Tetra contends that the
Memorandum was one of four governmental approvals necessary for the Project to
proceed, and, therefore, environmental review before the execution of the Memorandum
was necessary. As Delaware Tetra explains in its opening brief on appeal: “[I]t is
indisputable that this Project needed four governmental approvals to proceed as
proposed: [¶] 1. Approval of the [Plan] by the County to allow and govern the extraction

2
In this case, there is no question that the Memorandum was an action
taken by the County, so we need not consider the requirement that a project be
undertaken by or supported by a public agency.

9
of the groundwater from the desert aquifer. . . . [¶] 2. Approval of the [Memorandum] by
the County to ensure the measures identified in the [Plan] would be implemented and
enforced. [¶] 3. Approval of the [Memorandum] by [Santa Margarita]. [¶] 4. Approval
of the water Purchase and Sale Agreement by [Santa Margarita] under which [Santa
Margarita] would receive a portion of the Project water from Cadiz and perform certain
operational functions. [¶] The core components of the Project were the County‟s
approval of the [Plan] and [the Memorandum], because Cadiz could not extract
groundwater from the aquifer without those approvals. As expressly stated in the EIR,
the Project will pump the 50,000 [acre-feet per year] of groundwater „in accordance with
. . . [a County-approved] Groundwater Management, Monitoring and Mitigation
Plan . . . .‟” (Final brackets in original, boldface omitted.)
The Memorandum establishes a process for completing the Plan, and
provides that after the Plan is completed and approved, the County retains full discretion
to consider the final EIR and then to approve the Project, disapprove it, or require
additional mitigation measures or alternatives. The Memorandum further makes clear
that it is subject to modification, depending on mitigation measures necessitated by
CEQA or the Ordinance.
Additionally, the information available to the County before it approved
execution of the Memorandum is consistent with the interpretation that the Memorandum
was not a project because it did not bind the County to a course of action. The report and
recommendation to the San Bernardino County Board of Supervisors states that
approving the Memorandum does not commit the County to any further action with
respect to the Project. “The County, at this time, is not committing to approve or
undertake the Cadiz Project. And while the [Memorandum] sets a framework for
development and enforcement of the [Plan] if approved, the [Memorandum] reserves to
the County all necessary discretionary authority to approve, deny, or condition the Cadiz
Project, including the authority to adopt any mitigation measures or alternatives

10
necessary to avoid or substantially lessen the environmental impacts of the Project. Any
approval of the Cadiz Project itself is expressly conditioned on final CEQA review. The
County’s approval of the [Memorandum] therefore does not constitute an approval of the
Project, and is not a decision subject to CEQA. (Concerned McCloud Citizens v.
McCloud Community Services Dist. (2007) 147 Cal.App.4th 181; Cedar Fair, L.P. v. City
of Santa Clara (2011) 194 Cal.App.4th 1150.)” (San Bernardino County Land Uses
Services Dept., Report/Recommendation to San Bernardino County Board of Supervisors
and Record of Action (May 1, 2012) p. 4 [report on resolution approving the
Memorandum], second italics added.)
The report and recommendation also includes an analysis of what further
actions may or may not be undertaken by the County with respect to the Project. “If the
Board of Supervisors votes to adopt the attached Resolution to approve the
[Memorandum], several steps must still occur before the Cadiz Project can be approved
by the County: [¶] 1. County staff and special counsel would continue to work with
[Santa Margarita] on the Cadiz Project EIR to ensure that the EIR recognizes the
[Memorandum] and the County‟s role in ongoing monitoring and enforcement of the
[Memorandum] and [the Plan], and to ensure that the Project‟s potentially significant
impacts are adequately addressed under CEQA; [¶] 2. County staff and special counsel
would continue to work with [Santa Margarita] on the development of the Cadiz Project
[Plan] to ensure that the [Plan] satisfies the County‟s Ordinance; [¶] 3. Once the Final
EIR is certified and the Project or a Project alternative is approved by [Santa Margarita],
the Final EIR and proposed [Plan] will be submitted to the County for its consideration.
At that point, the County will be asked to exercise its discretion to approve and condition
the Project or an approved Project alternative or, alternatively, to deny the Project if it
does not conform to the County‟s Ordinance, the [Memorandum], or the Project EIR. [¶]
4. The County has reserved all rights to comment on and challenge the Project EIR if the
Parties cannot come to agreement on the [Plan] or if the County believes the [Plan] and

11
Project EIR do not conform to CEQA. If, upon certification, the County believes that the
Final EIR does not satisfy CEQA, the County may file a legal challenge to the EIR in
court.” (San Bernardino County Land Uses Services Dept., Report/Recommendation to
San Bernardino County Board of Supervisors and Record of Action, supra, p. 5.)
At the special meeting of the San Bernardino County Board of Supervisors,
at which the Memorandum was approved, the board was specifically informed by the
County‟s special counsel, “that what‟s before you . . . this afternoon, is a Memorandum
of Understanding that sets a framework for completing that Groundwater Management
Plan and then bringing the Plan and the EIR back to the Board at some time in the future,
probably later this summer, with an approval or decision on whether or not to approve the
actual Project, what sort of conditions would go along with that.” The County‟s special
counsel stated: “Pending completion and approval of the Groundwater Management
Plan, however, the Project remains subject to the County‟s full discretion as a responsible
agency to consider the EIR and to approve/disapprove and condition the Project.”
The County‟s special counsel explained why the Memorandum was being
approved before the Plan: “We need to be very clear today, we are not committing to the
Project as set forth. But Staff and your legal counsel concluded that we thought it was
beneficial to the County to have the [Memorandum] in place early because it provides the
framework for how we get from here to a final [Plan], it also provides a framework for if
the Project is approved here‟s the role of the County in oversight and enforcement. In
other words, it is intended to establish a process for completing the [Plan]; it is not an
approval of that project. And pending completion and approval of the [Plan], the Project
remains subject to your full discretion to consider the EIR and to approve, deny or
condition the Project.”
Finally, in response to the board chairman‟s question, “[w]hat alternatives
do we have to retreat, if you will, to redirect, to reassign, or to take a different position
should we find that there are great areas of concern,” the County‟s special counsel

12
replied, “as I mentioned earlier, if you should decide that you disagree with the analysis
and the Environmental Impact Report, the County could sue Santa Margarita over the
conclusions in that Report. On the Groundwater Management Plan as it comes to you,
you could determine that the level of pumping or the operations or the monitoring needed
to be modified in order to satisfy the ordinance—and/or satisfy the [Memorandum] and
the EIR, the CEQA document once it comes to you.” The County‟s chief executive
officer further responded: “So you do not have to approve the Groundwater Management
Plan that comes before you unless you find it acceptable. And if you disapprove it then
there is no Project.”
The Memorandum does not commit the County to any activity with direct
or indirect impacts on the environment, which distinguishes the present case from Save
Tara, supra, 45 Cal.4th 116, and RiverWatch, supra, 170 Cal.App.4th 1186. In Save
Tara, supra, 45 Cal.4th at pages 122-125, the City of West Hollywood approved an
agreement to convey a property to a developer to develop low-income senior housing,
conditioned on the developer satisfying environmental requirements as reasonably
determined by the city manager. The city also provided funds toward the development of
the project, expressed its commitment to the project, and made plans to relocate existing
residents. (Id. at pp. 123-124.) An organization opposed to the redevelopment project
challenged the approval of the development agreement on the ground it had been
improperly approved by the city before an EIR had been prepared. (Id. at p. 125.) The
trial court denied the petition for a writ of mandate because the development agreement
included a term expressly conditioning it on compliance with CEQA, and because the
agreement did not limit project alternatives or mitigation measures. (Save Tara, supra, at
p. 126.) The Court of Appeal reversed, concluding that “the project was well enough
defined to permit meaningful environmental analysis” before the agreement was
approved. (Ibid.)

13
 In Save Tara, supra, 45 Cal.4th at page 143, the Supreme Court affirmed
the Court of Appeal‟s decision that the city‟s approval of the development agreement
must be voided and reconsidered. “[W]e apply the general principle that before
conducting CEQA review, agencies must not „take any action‟ that significantly furthers
a project „in a manner that forecloses alternatives or mitigation measures that would
ordinarily be part of CEQA review of that public project.‟ [Citations.]” (Id. at p. 138.)
Ultimately, the Supreme Court concluded that environmental review of the development
project was required before entering into the development agreement. “In summary, the
City‟s public announcements that it was determined to proceed with the development of
low-income senior housing at 1343 Laurel, its actions in accordance with that
determination by preparing to relocate tenants from the property, its substantial financial
contribution to the project, and its willingness to bind itself, by the May 3 draft
agreement, to convey the property if the developer „satisfied‟ CEQA‟s „requirements, as
reasonably determined by the City Manager,‟ all demonstrate that City committed itself
to a definite course of action regarding the project before fully evaluating its
environmental effects.” (Id. at p. 142.)
In RiverWatch, supra, 170 Cal.App.4th at page 1195, the San Diego County
Department of Environmental Health certified a final EIR for and approved a landfill
project. The trial court issued a peremptory writ of mandate ordering the department to
set aside the certification of the EIR and related findings and decisions because the EIR
failed to address adverse environmental impacts that might be caused by the need to truck
water to the landfill site if anticipated groundwater pumping was insufficient. (Id. at
pp. 1195-1196.) After the judgment was entered, the Olivenhain Municipal Water
District entered into a 60-year agreement to provide the landfill owner with water to be
used at the landfill site. (Id. at p. 1196.) The department of environmental health later
released a revised draft EIR that addressed the environmental impacts of the water being
trucked to the landfill site. (Id. at p. 1197.)

14
 In RiverWatch, supra, 170 Cal.App.4th at page 1203, the appellate court
concluded that the water district‟s agreement to provide water to the landfill site was a
project requiring CEQA environmental review. “Based on the undisputed facts in the
administrative record, we conclude . . . the activity of trucking recycled water from
OMWD [(Olivenhain Municipal Water District)] to the Landfill site is part of the whole
action or operations of the Landfill project for purposes of CEQA. That activity includes
the construction on the OMWD site of 1,000 feet of a 24-foot-wide asphalt roadway, a
concrete loading pad, and a six-inch meter. On completion of that construction, as both
the Agreement and the Revised Draft EIR reflect, the Landfill‟s operations will include
the trucking of water from OMWD to the Landfill site, requiring as many as 89 water
truck trips to deliver as much as 244,000 gallons of recycled water per day. GCL‟s
[(Gregory Canyon Ltd.)] performance of the required construction and operation of the
water delivery trucks are activities undertaken by GCL „supported, in whole or in part,‟
through a contract (i.e., the Agreement) with OMWD, a public agency. [Citation.]
Furthermore, it cannot reasonably be disputed those activities „may cause either a direct
physical change in the environment, or a reasonably foreseeable indirect physical change
in the environment . . . .‟ [Citation.] The short-term activity of construction of the
1,000-foot asphalt road and concrete loading pad at the OMWD site presumably will
cause noise, traffic, air pollution, and possibly other physical changes in the environment.
[Citations.] More importantly, GCL‟s long-term operational activity of using trucks to
transport from OMWD to the Landfill site up to 244,000 gallons of recycled water per
day for a period of up to 60 years presumably will cause long-term physical changes in
the environment. The noise, traffic, and air pollution caused by up to 89 daily trips by
water trucks over a period of 60 years cannot be deemed to cause no change in the
environment. [Citation.] [¶] Furthermore, OMWD‟s contractual commitment pursuant
to the Agreement to deliver to GCL up to 244,000 gallons of recycled water per day for a
period of 60 years also raises questions regarding the potential adverse impact on

15
OMWD‟s current and future customers and OMWD‟s ability to meet the Agreement‟s
required supply amount in the event of future droughts or water shortages that may occur
over the course of the Agreement‟s lengthy 60-year period. Accordingly, we conclude
the activities to be undertaken by GCL through the Agreement with OMWD constitute
part of the Landfill project, which is subject to CEQA. [Citations.]” (RiverWatch, supra,
at pp. 1204-1205.)
In this case, by contrast, the Memorandum does not foreclose alternatives
or mitigation measures. It does not commit the County to a particular course of action
that will cause an environmental impact. The County retained full discretion over the
Project despite its execution of the Memorandum. Therefore, the Memorandum could be
executed by the County without conducting a full environmental review.
In analyzing whether the County was required to conduct an environmental
review of the potential negative impacts of the Memorandum, we find the appellate
court‟s opinion in Cedar Fair, supra, 194 Cal.App.4th 1150, to be on point with the facts
presented here. In that case, the appellate court concluded that a term sheet setting forth
the terms of a transaction to develop a football stadium was not a project requiring
environmental review. (Cedar Fair, supra, at pp. 1155-1156.) The term sheet had a
“high level of detail,” the city‟s redevelopment agency had invested a large amount of
money in the process of reaching the agreement set forth in the term sheet, and the term
sheet had been approved by the city council. (Id. at p. 1167.)
The appellate court in Cedar Fair, supra, 194 Cal.App.4th at page 1171,
nevertheless concluded that the term sheet only bound the parties to negotiate in good
faith toward a final agreement. “The negotiation of a complicated, multiparty
development agreement can involve a long process of hammering out a multitude of
issues. [Citation.] Although the parties preliminarily agreed to numerous terms
concerning the proposed stadium project, the term sheet did not make those terms binding
or even conditionally binding. The commitment to continue negotiations pursuant to the

16
term sheet is unlike the commitment in Save Tara, where the City of West Hollywood
contractually bound itself to sell land for private development conditioned upon CEQA
compliance, or RiverWatch, where the water district contractually bound itself to deliver
water for 60 years.” (Ibid.) “The modern phenomenon of „public-private partnerships‟
for development makes the time of „approval‟ under CEQA more difficult to ascertain
since a local agency may be a vocal and vigorous advocate of a proposed project as well
as an approving agency. But „an agency does not commit itself to a project “simply by
being a proponent or advocate of the project . . . .” [Citation.]‟ [Citation.] We return to
the crucial question whether the term sheet, „viewed in light of all the surrounding
circumstances,‟ „as a practical matter,‟ committed the City or the Redevelopment Agency
„to the project as a whole or to any particular features, so as to effectively preclude any
alternatives or mitigation measures that CEQA would otherwise require to be considered,
including the alternative of not going forward with the project. [Citation.]‟ [Citation.] In
this case, the term sheet, even considered together with the alleged circumstances, did not
preclude any alternative or mitigation measure that would ordinarily be part of CEQA
review.” (Id. at p. 1173.)
IV.
THE MEMORANDUM DOES NOT VIOLATE THE ORDINANCE.

The purpose of the Ordinance is to protect the County‟s aquifers while
allowing reasonable use of its groundwater resources. (Ordinance, § 33.06551.) The
Ordinance requires that the operators of new groundwater wells apply for and obtain
permits from the County. (Id., § 33.06554.) Permits may not be issued unless the
County “determines, based upon the available data, that the well(s) constructed and
operated as proposed, would not result in exceeding the groundwater safe yield of the
relevant aquifers.” (Id., § 33.06554, subd. (d).)

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 Delaware Tetra argues that the Project is excluded only from the permitting
requirements in the Ordinance, not from the Ordinance as a whole. Therefore, Delaware
Tetra contends, the Project was required to comply with the definitions of groundwater
safe yield and overdraft included in the Ordinance, which it will fail to do. Respondents
argue, however, that the Project is excluded from the entirety of the Ordinance.
This issue has been fully analyzed in the unpublished opinion, Delaware
Tetra Technologies, Inc. v. County of San Bernardino (May 10, 2016, G050881), in
which we addressed this issue and held that the clear and unambiguous language of the
Ordinance provides that the preparation of the Plan and the execution of the
Memorandum excluded the Project from the Ordinance, including, but not limited to, the
Ordinance‟s definitions of groundwater safe yield and overdraft. Our holding here is the
same.
V.
THE MEMORANDUM DOES NOT VIOLATE COMMON LAW RESTRICTIONS
REGARDING OVERDRAFT.

Delaware Tetra argues that the Memorandum also violates common law
restrictions regarding overdraft. This issue was fully addressed in Delaware Tetra
Technologies, Inc. v. County of San Bernardino, supra, G050881, in which we held the
analytical framework that the Supreme Court used in City of Los Angeles v. City of San
Fernando (1975) 14 Cal.3d 199 is consistent with the analyses the trial court and this
court have used in this case. We therefore hold the Memorandum does not violate
common law restrictions regarding overdraft.3

3
Delaware Tetra asked this court to take judicial notice of the cover page
and an excerpt of the Plan, which was approved in October 2012, claiming portions of the
Plan are relevant to its argument that the Project is inconsistent with the definitions of
overdraft in the Memorandum and in common law. We disagree. The Plan was not
before the County when it approved the Memorandum, and cannot be considered on
appeal, except for certain reasons not applicable here. (Code Civ. Proc., § 1094.5.)
Moreover, the Plan is not relevant to the issues raised on appeal. (Western States

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 VI.
THE COUNTY DID NOT VIOLATE THE ORDINANCE BY APPROVING THE MEMORANDUM
BEFORE APPROVING THE PLAN.

Delaware Tetra argues that the County violated the Ordinance by excluding
the Project from its requirements because the County approved the Memorandum before
it approved the Plan. This argument, too, has been fully addressed in Delaware Tetra
Technologies, Inc. v. County of San Bernardino, supra, G050881, in which we held the
Ordinance did not provide that the approval of a groundwater management plan and the
execution of a binding agreement regarding monitoring and mitigation occur in any
particular order. We adopt that holding here as well.

DISPOSITION
The judgment is affirmed. Respondents to recover costs on appeal.

FYBEL, J.

WE CONCUR:

ARONSON, ACTING P. J.

IKOLA, J.

Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559.) Therefore, we deny Delaware
Tetra‟s request for judicial notice.

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