COUNTY SANITATION DISTRICT NO. 2 OF LOS ANGELES COUNTY et al., Plaintiffs, Cross-defendants and Appellants; CALIFORNIA ASSOCIATION OF SANITATION AGENCIES et al., Plaintiffs and Appellants, v. COUNTY OF KERN, Defendant, Cross-complainant and Appellant; KERN COUNTY BOARD OF SUPERVISORS, Defendant and Appellant; ARVIN-EDISON WATER STORAGE DISTRICT et al., Interveners and Respondents, 127 Cal. App. 4th 1544

Opinion DAWSON, J. This appeal concerns the validity of an ordinance that restricts the application of sewage sludge on land located within the jurisdiction of Kern County. Sanitation agencies from Southern California appeal adverse rulings from the trial court. The sanitation agencies contend

(1) County was required to prepare an environmental impact report (EIR) under the California Environmental Quality Act (CEQA) prior to adopting the ordinance, (2) the ordinance violated the commerce clause as well as other constitutional and statutory provisions, and (3) a biosolids impact fee of $3.37 per ton violated the prohibition in Vehicle Code

section 9400.8 against local fees for the privilege of using roads. County contests all of these allegations. It contends that the ordinance benefited the Kern County environment and that any potential adverse environmental impacts were too remote and speculative to justify preparing an EIR. We hold County was required to prepare an EIR under CEQA. This is because CEQA requires the preparation of an EIR whenever substantial evidence supports a fair argument that an ordinance will cause potentially significant adverse environmental impacts. CEQA thus sets a low threshold for the required preparation of an EIR.

Here, the evidence in the administrative record establishes a reasonable possibility that the ordinance will have both positive and adverse impacts on the environment in Kern County and other areas of California, principally because alternative methods of disposal must be implemented. The positive effects of a project do not absolve the public agency from the responsibility of preparing an EIR to analyze the potentially significant negative environmental effects of the project, because those negative effects might be reduced through the adoption of feasible alternatives or mitigation measures analyzed in the EIR.

Therefore, County was required to prepare an EIR. We hold also that plaintiffs have failed to show that the ordinance discriminates against interstate commerce. We reject plaintiffs’ constitutional and statutory attacks on the validity of the ordinance, except that we hold the biosolids impact fee was invalid to the extent it was a local fee for road use. We will remand with directions to the trial court to issue a writ of mandate directing County to prepare an EIR for the ordinance, and for further proceedings to determine the extent to which the biosolids impact fee was a fee for road use.

Otherwise, the rulings of the trial court in favor of County on plaintiffs’ complaint will be affirmed. County cross-appeals from the trial court’s denial of its CEQA cross-claims against the sanitation agencies. We address County’s contention that CEQA required those agencies to conduct an environmental examination in connection with certain biosolids disposal contracts they entered into or extended near the time the ordinance in question was enacted.

We hold that the agencies’ contract activities were within the scope of their program EIR’s covering their wastewater treatment projects and, therefore, were “[subsequent activities in the program” that should have been subjected to an examination in accordance with title 14,

section 15168 of the California Code of Regulations to determine if further CEQA review was necessary. We further hold that, as to expired contracts, this question is moot.

Therefore, judgment on County’s cross-claims will be reversed and the matter remanded to the trial court with directions to (1) conduct further proceedings to make a complete determination of which contracts have expired, (2) enter an order dismissing as moot County’s causes of action that are based on contracts that have expired, and (3) issue writs of mandate under the remaining causes of action directing the appropriate sanitation agency to conduct an examination to determine if additional environmental documents must be prepared in connection with the contracts -and extensions.

HISTORICAL BACKGROUND Sewage sludge is a product of wastewater treatment. The safe and efficient disposal of sludge is a modem and worldwide concern—a by-product of population growth and modernization. Recent decades have witnessed increasing governmental involvement in the effort to safely and efficiently treat sewage and dispose of sewage sludge. In the United States, efforts at regulation have involved the executive, legislative and judicial branches of government at the federal, state and local levels.

This historical background briefly describes the process that reduces sewage to sewage sludge and then discusses the disposal and use of that sludge. “Sewage sludge” is defined by federal regulations as the “solid, semi-solid, or liquid residue generated during the treatment of domestic sewage in a treatment works.” (40 C.F.R. § 503.9(w) (2005).) More generally, sewage sludge refers to the mud-like deposit originating from sewage and created by the treatment processes used to decontaminate wastewater before it is released into local waterways.

Sewage sludge typically consists of water and 2 to 28 percent solids. (68 Fed.Reg. 61084, 61086 (Oct. 24, 2003).) To illustrate, the Joint Water Pollution Control Plant located in Carson, California (Carson Plant) produces sewage sludge by detaining wastewater solids in an anaerobic digester for approximately 18 days. After digestion, the remaining solids are dewatered in a centrifuge that produces a residue that is approximately 25 percent solids.

The Carson Plant refers to these residues as “biosolids”—a term that is not defined by federal regulation, and the meaning of which varies with the context in which it is used. (Goldfarb, Sewage Sludge, supra, 26 B.C. Envtl. Aff.

L.Rev. at p. 688.) Some use the term to mean sewage sludge that has been stabilized and disinfected for beneficial use. (Id., fn. 6.) To others, the term helps emphasize the material is a recyclable resource with potential beneficial properties. (Goldfarb, Sewage Sludge, at p. 688.) Scope of Sewage Sludge Production National Production The United States Environmental Protection Agency (EPA) recently estimated the annual production of sewage sludge from the 16,000 wastewater treatment plants in the United States at both 7 million tons and 8 million dry metric tons. (Compare 68 Fed.Reg. 68813, 68817 (Dec. 10, 2003) with 68 Fed.Reg. 61086 (Oct. 24, 2003).) In 2003, the EPA estimated that approximately 60 percent of sewage sludge was treated and applied to farmland, 17 percent was buried in landfills, 20 percent was incinerated, and 3 percent was used as landfill or mine reclamation cover. (68 Fed.Reg. 68817 (Dec. 10, 2003).) The land application of sewage sludge occurred on approximately 0.1 percent of the agricultural land in the United States. (68 Fed.Reg. 61086 (Oct. 24, 2003).) Other application sites include forests, strip-mines, reclamation sites, and public spaces like parks, golf courses, and highway median strips. (Ibid.) California CASA estimated that in 1998 California produced approximately 672,330 dry tons of biosolids and approximately 67.8 percent was applied to land, 10.6 percent was composted, 9.1 percent was buried in landfills, 5.6 percent was incinerated, and 6.9 percent was put in onsite and offsite storage.

The EPA estimated that in 2003 Cahfomia produced 777,480 dry tons of treated sewage sludge. Approximately 50 percent of this sewage sludge was applied to land, 30 percent was put in landfills, 10 percent was transported out of state, 3 percent was incinerated, and the balance was put in long-term storage or treatment or put to other uses. Conflict between urban and rural interests has caused controversy over the land application of sewage sludge in California.

In 1998, approximately 73 percent of land-applied biosolids in California was applied within the geographical jurisdiction of the Regional Water Quality Control Board, Central Valley Region (Central Valley Water Board), a region that generated only 16.7 percent of California’s total production. In contrast, the Los Angeles and San Francisco Regions generated 37.9 percent and 14.4 percent, respectively, and received less than 0.1 percent and 1.8 percent, respectively, of the total land-applied biosolids.

The proportion of biosolids applied to land in the Central Valley Region has decreased as a result of restrictive ordinances adopted by counties. Kern County In 1998, approximately one-third of the biosolids applied to land in California was applied in Kem County. In 1999, County estimated that one million wet tons of sewage sludge were applied to approximately 23,594 acres of irrigated agricultural land in Kem County. The acreage, which was distributed among 14 noncontiguous sites, represented approximately 3 percent of the harvested cropland in Kem County.

Statutory and Regulatory Framework Federal Congress enacted the Federal Water Pollution Control Act Amendments of 1972 (Pub.L. No. 92-500 (Oct. 18, 1972) 86 Stat. 896) to restore and maintain the quality of the nation’s waters (33 U.S.C.A. § 1251(a)) by addressing various sources of pollution, including municipal sewage.

In addition to providing extensive federal grants to finance the construction of local sewage treatment facilities, the 1972 amendments increased the role of the federal government by extending water quality standards to intrastate waters, setting technology-based effluent limitations, and implementing the water quality standards through a discharge permit system. The Clean Water Act reflected the judgment of Congress that the problem of water pollution caused by the discharge of municipal sewage outweighed problems associated with treating the sewage and disposing of the sewage sludge.

The federal legislation stimulated the building of sewage treatment facilities which, in turn, significantly increased the national production of sewage sludge. (See Leather Industries of America, Inc. v. E.P.A. (D.C. Cir. 1994) 309 U.S. App. D.C. 136 [40 F.3d 392, 394].) The Clean Water Act addressed the problem of sewage sludge disposal in four ways. First, the use or disposal of sewage sludge was subjected to a permitting program (33 U.S.C.A. § 1345(a)—(c)). Second, the EPA was directed to develop comprehensive regulations establishing standards for sewage sludge use and disposal (33 U.S.C.A. § 1345(d)).

Third, states were allowed to establish more stringent standards (33 U.S.C.A. § 1345(e)). Fourth, grants were authorized for the conduct of scientific studies, demonstration projects, and public information and education programs concerning the safe and beneficial management of sewage sludge (33 U.S.C.A. § 1345(g)).

Eventually, in 1993, the EPA complied with the directive regarding regulations by promulgating Standards for the Use or Disposal of Sewage Sludge (40 C.F.R. § 503 (2005)) (Part 503), which specify that sewage-sludge may be (1) applied to land, (2) placed in a surface disposal site, such as a sewage-sludge-only landfill, (3) burned in a sewage sludge incinerator, or (4) disposed of in a municipal solid waste landfill that complies with the minimum criteria set forth in 40 Code of Federal Regulations

part 258. (Part 503, subparts B [land application], C [surface disposal] & E [incineration]; 40 C.F.R. § 503.4 (2005) [disposal in municipal solid waste landfill].) The land application provisions of subpart B of

Part 503 establish concentration ceilings as well as annual and cumulative loading rates for arsenic, cadmium, copper, lead, mercury, nickel, selenium and zinc (40 C.F.R. § 503.13 (2005)); establish management practices for the protection of water quality and public health (40 C.F.R. § 503.14 (2005)); set the standards for the reduction of pathogens and vector attraction (40 C.F.R. § 503.15 (2005)); and include requirements for monitoring (40 C.F.R. § 503.16 (2005)), recordkeeping (40 C.F.R. § 503.17 (2005)), and reporting (40 C.F.R. § 503.18 (2005)). Pathogen reduction standards contained in

Part 503 are used to differentiate between Class A sewage sludge and Class B sewage sludge. (See 40 C.F.R. § 503.32 (2005).) While Class A sewage sludge is sufficiently treated to essentially eliminate pathogens, Class B sewage sludge is treated only to substantially reduce them. As a result, the requirements for land application of Class B sewage sludge are more stringent than the requirements imposed on Class A sewage sludge. At the time of their adoption, the EPA stated it was confident the regulations in

Part 503 adequately protected the environment and public health from all reasonably anticipated adverse effects. (58 Fed.Reg. 9248, 9249 (Feb. 19, 1993).) Nevertheless,

Part 503 has been described as “quite controversial.” Citizens and environmental organizations have questioned the adequacy of the chemical and pathogen standards contained in

Part 503. As a result of these concerns and the requirement in the Clean Water Act that the sewage sludge regulations be reviewed every two years, the EPA commissioned the National Research Council (NRC) of the National Academy of Sciences to independently review the scientific basis of the regulations governing the land application of sewage sludge. In July 2002, the NRC published its report—Biosolids Applied to Land: Advancing Standards and Practices—and made the following overarching findings: “There is no documented scientific evidence that the

Part 503 rule has failed to protect public health. However, additional scientific work is needed to reduce persistent uncertainty about the potential for adverse human health effects from exposure to biosolids. There have been anecdotal allegations of disease,[] and many scientific advances have occurred since the

Part 503 rule was promulgated. To assure the public and to protect public health, there is a critical need to update the scientific basis of the rule to (1) ensure that the chemical and pathogen standards are supported by current scientific data and risk-assessment methods, (2) demonstrate effective enforcement of the

Part 503 rule, and (3) validate the effectiveness of biosolids-management practices.” (NRC, Biosolids Applied to Land: Advancing Standards and Practices (July 2002) p. 3 <http://www.epa.gov/waterscience/biosolids/nas/complete.pdf> [as of Apr. 1, 2005].) In response to the NRC report, the EPA developed a final action plan that established objectives and identified research and regulatory projects designed to strengthen its sewage sludge use and disposal program. (68 Fed.Reg. 75531, 75533 (Dec. 31, 2003); see EPA, Office of Water, Use and Disposal of Biosolids (Sewage Sludge), supra.) As an example of one project, the EPA intends to conduct an incident-tracking workshop to obtain input on developing a program focused on individuals who have received medical attention and suspect that they may have been affected by sewage sludge application practices, and to thereby isolate the causes of any health problems. (68 Fed.Reg. 75535 (Dec. 31, 2003).) As of the date of this opinion, the implementation of the final action plan is an ongoing process, and some of the activities have not been commenced. (See EPA, Office of Water, Use and Disposal of Biosolids (Sewage Sludge), supra.) California In response to Congress’s delegation of authority to the states to issue NPDES permits (see fn. 18, ante), the California Legislature amended the Porter-Cologne Water Quality Control Act (Wat.

Code, § 13000 et seq.) to require the State Water Board and its regional counterparts to issue discharge permits that ensure compliance with the Clean Water Act. (See Wat. Code, § 13370 et seq.) As a result, on May 14, 1973, California became the first state to be approved by the ERA to administer the NPDES permit program. (See 54 Fed.Reg. 40664 (Oct. 3, 1989); WaterKeepers Northern California v.

State Water Resources Control Bd. (2002) 102 Cal.App.4th 1448, 1452 [126 Cal.Rptr.2d 389].) In August 1993, as part of administering the NPDES permit program, the Central Valley Water Board adopted a general order setting the waste discharge requirements (WDR) for the use of sewage sludge as a soil amendment and approved an initial study and negative declaration in connection with that general order.

Under the general order, a person wanting to apply biosolids to agricultural land could file with the Central Valley Water Board a notice of intent to comply with the general order, a filing fee, and a preapplication report and, upon receiving an approval letter from the Central Valley Water Board, could begin to apply biosolids subject to the terms and conditions in the general order. Projects using sewage sludge that did not fit the conditions contained in the general order were required to apply for individual WDR’s.

On May 26, 1995, the Central Valley Water Board modified its earlier general order by adopting Order No. 95-140 titled “Waste Discharge Requirements General Order For Reuse of Biosolids and Septage on Agricultural, Forest, and Reclamation Sites.” The order set minimum standards for the use of biosolids, including Class B sewage sludge, as a soil amendment. Also in 1995, the California Legislature specifically addressed the land application of sewage sludge by adopting Water Code

section 13274 (Stats. 1995, ch. 613, § 1, p. 4590), which required the State Water Board or the regional boards to prescribe general WDR’s for the discharge of treated sewage sludge used as a soil amendment. (Wat. Code, § 13274, subds. (a) & (b).) Water Code

section 13274 also states that it does not restrict the authority of local government agencies to regulate the application of sewage sludge to land within their jurisdiction. (Id., subd. (i).) Other California legislation affecting the disposal and use of sewage sludge is the California Integrated Waste Management Act of 1989 (Pub. Resources Code, § 40000 et seq., also known as Assem. Bill No. 939 (1989-1990 Reg.

Sess.); see Stats. 1989, ch. 1095, § 22, p. 3812), which requires the use of recycling and source reduction to reduce the amount of solid waste going into landfills. (§ 41780.) More specifically, counties were required to adopt integrated waste management plans that described how 25 percent of the solid waste stream would be recycled, reduced or composted by 1995 and how 50 percent would be achieved by 2000. (See § 41780; Kern County Farm Bureau v.

County of Kern (1993) 19 Cal.App.4th 1416, 1419, fn. 2 [23 Cal.Rptr.2d 910].) This legislation caused sewage sludge to be diverted from disposal in landfills in favor of recycling it as a fertilizer applied to agricultural land. For example, in 1995 the City of Oxnard purchased 1,280 acres in Kern County for $1,174,000 as part of a program to apply its sewage sludge to agricultural land and thus reduce its use of landfills. By 2000, several of the nine regional boards had issued WDR’s for the use of biosolids as a soil amendment.

To provide a single regulatory framework for the land application of treated sewage sludge in California, in August 2000, the State Water Board issued Water Quality Order No. 2000-10-DWQ, entitled “General Waste Discharge Requirements for the Discharge of Biosolids to Land for Use as a Soil Amendment in Agricultural, Silvicultural, Horticultural, and Land Reclamation Activities” (General Order 2000-10). General Order 2000-10 also was intended to comply with the directive in Water Code

section 13274 and streamline the permitting process. The State Water Board’s final program EIR relating to General Order 2000-10 was approved on June 30, 2000, and it is part of the appellate record as a result of the superior court granting a request for judicial notice. General Order 2000-10 allowed Class B biosolids to be applied to agricultural land subject to numerous conditions, including site, crop, and harvesting restrictions. The State Water Board’s approval of General Order 2000-10 and certification of the final program EIR was vacated as a result of a CEQA lawsuit brought by County. (County of Kern v.

State Water Resources Control Board (Jan. 13, 2003, C039485) [nonpub. opn.].) The Third Appellate District held the EIR was defective because it did not evaluate, as alternatives to General Order 2000-10, either a requirement that sewage sludge be treated to Class A standards before application as a soil amendment or a prohibition on the use of treated sewage sludge where fruits and vegetables are grown. To comply with that decision, the State Water Board’s 2004 Final PEIR for Biosolids considered, but rejected, the two alternatives specified by the Third Appellate District.

Based on that final EIR, the State Water Board adopted Water Quality Order No. 2004-0012 on July 22, 2004 (General Order 2004-0012). General Order 2004-0012 allows Class B biosolids to be applied to agricultural land subject to numerous conditions, including site and crop restrictions. Kern County County first attempted to regulate the application of sewage sludge to agricultural land within its jurisdiction in August 1998, when it adopted Ordinance No. G-6528, an interim urgency ordinance which became operative on September 1, 1998, and was repealed effective December 31, 1999. Ordinance No.

G-6528 allowed the application of Class A and Class B sewage sludge in Kem County by any person who obtained a permit from the County Environmental Health Services Department, paid a $7,250 application fee, and observed specified management practices, site restrictions and other requirements. On October 19, 1999, the Kem County Board of Supervisors adopted Ordinance No. G-6638 (Ordinance G-6638) to substitute a new

chapter 8.05 into the Kem County Ordinance Code. Ordinance G-6638 provided for two regulatory stages. The first stage, which lasted three years, allowed the application of Class B sewage sludge on sites that had already been approved, but precluded the approval of any new sites. The second stage was scheduled to become effective on January 1, 2003, and allowed only exceptional quality (EQ) sewage sludge to be applied to land in Kem County. Ordinance G-6638 is the subject of this appeal and its pertinent provisions are set forth, post, in Facts and Proceedings. In late 2002, County adopted Ordinance No. 6931, which amended

chapter 8.05 of the county code to impose a permitting requirement on the application of EQ biosolids to land within the unincorporated area of Kem County, and found that the project was exempt from CEQA pursuant to

section 15308 of the Guidelines, which concerns actions by regulatory agencies to protect the environment. This appeal does not directly involve the 2002 amendment. Overview of California Cases Involving Land Application of Sewage Sludge The application of sewage sludge to land has been the topic of litigation before this and other appellate courts located in California. This court considered the application of CEQA to Kings County’s sewage sludge ordinance in Magan v. County of Kings (2002) 105 Cal.App.4th 468 [129 Cal.Rptr.2d 344].

In that case, the Kings County Board of Supervisors determined that its ordinance regulating the application of sewage sludge to land in Kings County was categorically exempt from review under CEQA, and this court upheld that determination. (105 Cal.App.4th at pp. 476-477.) As described earlier, in January 2003, the Third Appellate District considered County’s challenge to the adequacy of the EIR the State Water Board prepared in connection with its adoption of General Order 2000-10. (County of Kern v.

State Water Resources Control Board, supra, C039485 [nonpub. opn.].) That litigation led to the certification of the State Water Board’s 2004 Final PEIR for Biosolids and the adoption of General Order 2004-0012. In U.S. v. Cooper (9th Cir. 1999) 173 F.3d 1192, the defendant sludge hauler directly applied sludge to a local farm instead of taking the sludge to a composting site first as required by a NPDES permit issued to the City of San Diego by the regional water quality board.

The sludge hauler was convicted under the Clean Water Act of knowingly violating conditions imposed by the permit on the disposal of sewage sludge. The Ninth Circuit Court of Appeals upheld the conviction and ruled, among other things, that

Part 503—which encouraged the direct land application of sewage sludge, but did not require state and local governments to allow it—did not preempt the conditions in the permit that the sludge hauler violated. (U.S. v. Cooper, supra, at pp. 1200-1201.) In addition to the foregoing appellate cases, the briefing in this appeal mentions other cases before state and federal trial courts concerning County’s efforts to regulate the land application of sewage sludge.

County contends that Shaen Magan brought two state court actions challenging Ordinance G-6638 and that the judgments entered in County’s favor in those actions are now final. In addition, County represents that another state court action brought against it has been stayed by the Tulare County Superior Court pending the resolution of this appeal, and that CASA and others have sued it in a federal action attacking an amended version of the ordinance.

FACTS AND PROCEEDINGS In connection with its consideration and adoption of an ordinance regulating the land application of biosolids within its jurisdiction, County undertook a process that involved the public and produced an administrative record of over 25,000 pages. In 1997, County established a Biosolids Ordinance Advisory Committee to assist in the preparation of a draft ordinance. The committee included representatives from farming organizations, sludge generators and applicators, environmental groups, County staff and other interested parties.

In all, the committee held five public meetings between November 20, 1997, and April 29, 1999. Expert presentations on the scientific issues involving biosolids were received at two public hearings held by County. In January 1998, County pursued early consultation with public agencies and interested parties to obtain comments on the potential environmental effect of its proposed form of biosolids ordinance.

After revisions to the proposed ordinance, County again sought early consultation in May 1999 in connection with determining whether compliance with CEQA would require preparation of an EIR for the proposed ordinance. After the second consultation period was complete, an initial study was prepared. On August 10, 1999, an environmental checklist form was completed which found the project—that is, enactment of the ordinance—would not have a significant effect on the environment, and which recommended the preparation of a negative declaration.

County’s Planning Department prepared a proposed negative declaration for the biosolids ordinance and published the corresponding notice of availability for public review on August 13, 1999. On October 19, 1999, after the period for public review of the negative declaration expired, County enacted Ordinance G-6638 and adopted the negative declaration.

Section 3 of Ordinance G-6638 amended

chapter 8.05 of the Kern County Ordinance Code (Kern Code) effective January 1, 2000, to provide in part: “8.05.010 PURPOSE AND INTENT “There are numerous unanswered questions about the safety, environmental effect, and propriety of land applying Biosolids or sewage sludge, even when applied in accordance with federal and state regulations. Biosolids may contain heavy metals, pathogenic organisms, chemical pollutants, and synthetic organic compounds, which may pose a risk to public health and the environment if improperly handled.

There is a lack of adequate scientific understanding concerning the risk land applying of Biosolids may pose to land, air and water and to human and animal health. . . . Consequently, in order to promote the general heath, safety and welfare of Kern County and its inhabitants, it is the intent of this

chapter that the land application of Biosolids shall be prohibited in the unincorporated area of Kern County. “The County recognizes there are existing permitted sites involved in the land application of Biosolids. Consistent with the protection of private property rights under the United States and California constitutions, this ordinance contains a three year amortization period to permit the orderly discontinuation of the land application of Biosolids by January 1, 2003. “The County also recognizes that Exceptional Quality Biosolids, as defined in this chapter, are considered by the U.S.

Environmental Protection Agency to be a product. . . that can be applied as freely as any other fertilizer or soil amendment to any type of land. Therefore, the provisions of this

chapter do not apply to Exceptional Quality Biosolids unless specifically stated herein. Further, the provisions of this

chapter do not apply to Compost, as defined herein, manufactured from Biosolids at composting facilities that are otherwise regulated by the County through Solid Waste and Conditional Use Permits. “8.05.020

DEFINITIONS “A. Agency means an authorized representative of the Environmental Health Services Department of the County. . .. M]. . . BO “E. Biosolids are treated solid, semi-solid or liquid residues generated during the treatment of sewage in a wastewater treatment facility that meet [certain federal requirements for pathogen reduction, vector attraction reduction and pollutant concentrations], . . . Biosolids as used in this

chapter excludes Biosolids products that are in a bag or container packaged for routine retail sales through regular retail outlets which are primarily used for landscaping. “F. Biosolids Impact Fee means the fee per ton of Biosolids charged to Biosolids applicators for mitigating the impacts to the Kem County infrastructure shown to be caused by the transport of Biosolids. Permitees which can establish the lack of impact on County infrastructure shall be exempt from payment of the fee. [f] . . . [f] “H.

Class A Biosolids are Biosolids that meet the pathogen reduction requirements in 40 CFR 503.32[(a)] and contain constituents in concentrations not exceeding the concentrations listed in 40 CFR 503.13, Table 1 or Table 3. “I. Class B Biosolids are Biosolids that meet the pathogen reduction requirements in 40 CFR 503.32(b). “J. Compost means the product resulting from the controlled biological decomposition of organic materials which may include Biosolids. Facilities where compost is produced are required to obtain Solid Waste Facilities and Conditional Use Permits as a condition of operation.

Compost products are required to meet or exceed product quality criteria as established by the California Integrated Waste Management Board, ffl . . . [1] “M. Exceptional Quality Biosolids are Class A Biosolids that meet the pollutant concentrations in 40 CFR 503.13, Table 3 and have achieved a level of vector attraction reduction required by 40 CFR 503.33. Additionally, Class A Biosolids must meet both the fecal coliform and Salmonella sp. bacteria limits contained in alternatives 1 through 6 of 40 CFR 503.32(

a) to be Exceptional Quality. For the purposes of this chapter, Exceptional Quality Biosolids are in bulk form and shall not include Compost which meets or exceeds Exceptional Quality criteria, [f] . . . [f] “P. Land Application means the placement of Biosolids on agricultural land at a predetermined agronomic rate to support vegetative growth. For purposes of this chapter, placement includes the spraying or spreading of Biosolids onto the land surface, the injection of Biosolids below the surface, or the incorporation of Biosolids into the soil. H] . . . [][] “R.

Permit means a Land Application Permit issued by the Agency jointly to an Applier and all POTWs or other generators who supply Biosolids to the Applier. Such permit authorizes the Land Application of Biosolids in the County. Permits are not transferable to other parties without the prior approval of the Agency as provided in

Section 8.05.040.R. [1] . . . [f] “T. POTW means publicly or privately owned treatment works that process wastewater and generate Biosolids. ... [f] ... [f] “8.05.030 GENERAL REQUIREMENTS “A. Prior to commencing any Land Application activities under this chapter, the Applier shall obtain a Permit and pay all applicable fees. Only Sites with an Existing Permit shall be eligible for issuance of a Permit under this chapter, [f] . . . [f] “H. Biosolids Impact Fee. “1. There is levied by the County of Kern a fee of $3.37 per ton for each ton of Biosolids land applied within the county. The amount of the fee shall be calculated based on the monthly activity report as required by

section 8.05.070(1) and is to be remitted to the Agency along with the filing of the monthly activity report. Permitees are subject to enforcement action, including revocation of the Permit, for non-payment. Where the Permitee can demonstrate the land application of Biosolids does not have an impact on County infrastructure or roads, the Agency may waive this fee. “2.

Permitees, either directly or through the wastewater treatment plant generating the Biosolids to be applied on the Permitee’s property, which separately contract with the County or are determined to provide a reciprocal benefit, as determined by the Board of Supervisors, shall be exempt from this fee. “3.

Funds generated by this impact fee and other permit fees may be available to fund the following uses: Expenses associated with the inspection of properties within the County which have permits for the land application of Biosolids; development and operation of a GIS tracking system for all Biosolids land applied within the County so that there is an accurate data base containing this information; technical studies and pilot projects which provide additional data on Biosolids land application; correction of any infrastructure deficiencies directly associated with the hauling of Biosolids; and, the cost of public outreach and education programs to ensure that the standards expressed within this ordinance and contained in the federal guidance for the beneficial use of Biosolids are adhered to.

The budget for the expenditure of the Biosolids Mitigation Fund on mitigating the impact of Biosolids land application within the County as set forth above, shall be prepared by the Director of the Resource Management Agency for approval by the Board of Supervisors annually. [][]... [f] “8.05.040 PERMIT APPLICATION “A. It shall be unlawful for any person to apply Biosolids to land within the unincorporated area of the County without obtaining a Permit from the Agency and being in compliance with the terms and conditions as stated herein. “B.

The application for a Permit shall be filed with the Agency on an application form furnished by the Agency, accompanied by an eight thousand dollar ($8,000) fee____ffl . . . ffl “G. The Agency may deny an application for one (1) or more of the following reasons: “1. Prior significant non-compliance with local, state or federal regulations or permits related to the land application of biosolids. “2. Inadequate, incomplete, or inaccurate application information. “3. The land application proposal would not be in conformance with the applicable requirements of this chapter. [][]... [*j[] “M.

Fees to review and process Permit applications, appeal an action of the Agency, as specified herein, inspect Sites, engage in enforcement activities and compensate for infrastructure impacts shall be established by the Board of Supervisors. [][] . . . [f] “8.05.050 MANAGEMENT PRACTICES “A. Transportation, Storage and Land Application of Biosolids shall not degrade the groundwater or surface water. “B. Discharge of Biosolids to surface waters or surface water drainage courses is prohibited and all Biosolids shall be confined to within the boundaries of the Site. “C.

All irrigation tailwater on Sites utilized for Biosolids application shall be maintained on the permitted Site and shall not be allowed to flow on to adjacent properties, either by means of surface or subsurface flows. m ■ ■ ■ m “8.05.080 INSPECTION AND ENFORCEMENT “A. The Agency shall inspect all Sites at least one (1) time per week during the period when Biosolids are being applied and may inspect more frequently or at any time. “B. The Agency may charge for services not specifically described that are rendered by personnel that are necessary for the enforcement of the provisions of this ordinance.

The charge will be calculated on the per-hour fee of seventy-five ($75.00) dollars as established in

Section 8.04.100. Any laboratory analysis will be charged at the Agency’s actual costs as charged by a Certified Laboratory retained by Agency for any testing. “C. Any person violating any of the provisions of this

chapter shall be deemed guilty of a misdemeanor. “D. In addition, any violation of this

chapter may be deemed by the Agency to be a public nuisance, and may be abated, or enjoined by the Agency, irrespective of any other remedy herein provided. “8.05.090 EFFECTIVE DATE “The provisions of this

chapter shall expire on December 31, 2002, unless otherwise extended by the board of supervisors.”

Section 4 of Ordinance G-6638 replaced the expired version of

chapter 8.05 with a new

chapter 8.05 scheduled to become effective on January 1, 2003. Provision 8.05.010 was revised slightly but still stated that the

chapter did not apply to EQ biosolids or compost. The

definitions of EQ biosolids and compost were not changed. The substantive requirements of that new

chapter 8.05 stated: “8.05.040 BIOSOLIDS PROHIBITED “A. It shall be unlawful for any person to land apply Biosolids to property within the unincorporated area of the County. Any Site for which a Permit was issued prior to . . . January 1, 2003 shall discontinue land application of Biosolids upon the effective date of this chapter.[] “B. The discharge of Biosolids to surface waters or surface water drainage courses, including wetlands and water ways, is prohibited.”

Section 5 of Ordinance G-6638 declared that the provisions of Ordinance G-6638 were severable and that the invalidity of any clause or provision would not affect the validity of the other provisions of the ordinance. On November 8, 1999, CSDLAC, OCSD, CLABS, SCAB, CASA, and RBM filed a petition for writ of mandate and complaint for injunction and declaratory relief. The first cause of action in the petition alleged County violated CEQA by approving the negative declaration and making findings that Ordinance G-6638 would not have significant impact on the environment.

The second cause of action asserted the adoption of Ordinance G-6638 was an invalid exercise of police power and a violation of the commerce clause. The third cause of action alleged the imposition of the biosolids impact fee violated provisions of the California Constitution concerning taxes, as well as the equal protection and due process clauses of the United States and California Constitutions, by unfairly discriminating against vehicles carrying biosolids. On March 1, 2000, County filed its cross-action against CSDLAC, OCSD and CLABS challenging changes made in their sewage sludge disposal programs.

After amendment on June 19, 2000, County’s cross-action contained (1) four causes of action alleging CLABS violated CEQA by entering certain contracts and amendments relating to the disposal of biosolids generated at its facilities without performing any environmental review; (2) one cause of action alleging CSDLAC violated CEQA by failing to undertake any environmental review when it and Yakima Company amended and extended their contract for the transportation of sewage sludge from CSDLAC’s facilities to Kern County for application on farm land; and (3) five causes of action alleging OCSD violated CEQA by entering biosolids management agreements or options for the purchase of real estate used in connection with the disposal or use of biosolids generated at its facilities without performing any environmental review.

The superior court granted plaintiffs’ request that their CEQA cause of action be bifurcated, took all of the CEQA claims under submission on August 30, 2000, and by written ruling entered on November 22, 2000, denied the CEQA claims of all parties. Approximately a year and a half later, the superior court heard and denied plaintiffs’ motions for

summary judgment, and granted County’s motion for a protective order regarding depositions and written discovery requested by CSDLAC, OCSD and Shaen Magan relating to the remaining non-CEQA causes of action that challenged the validity of County’s legislative act of adopting Ordinance G-6638. On June 3, 2002, the parties agreed to present their cases by trial briefs. After considering the briefs filed by the parties, the superior court entered an order on November 25, 2002, denying the non-CEQA claims alleged in plaintiffs’ second and third causes of action. The superior court filed a statement of decision on January 7, 2003, which ruled that

(1) Ordinance G-6638 was not an invalid exercise of police power or a violation of the commerce clause and (2) the biosolids impact fee passed constitutional scrutiny because it had a rational basis and was not an illegal general or special tax. On March 10, 2003, judgment was entered in favor of County on all causes of action asserted by plaintiffs and in favor of the cross-defendants on all causes of action asserted by County in its cross-action. CSDLAC, OCSD, CLABS, CASA, RBM and SCAP timely filed an appeal. County timely filed a notice of appeal from the judgment that denied its cross-action.

DISCUSSION Plaintiffs contend County erroneously found that Ordinance G-6638 would not have a significant effect on California’s environment and, therefore, County violated CEQA when it approved the negative declaration and adopted Ordinance G-6638.

The superior court ruled the approval of the negative declaration was appropriate because there was no “substantial evidence of a fair argument that adoption of this ordinance, which continues to allow application of biosolids but requires [plaintiffs] to upgrade them to protect the environment, would have an adverse impact on the environment.” We hold that the preparation of an EIR was mandatory under the low threshold imposed by the fair argument standard because the administrative record contained sufficient, credible evidence that the heightened treatment standards for the application of sewage sludge to land in the unincorporated areas of Kern County might have a significant adverse effect on California’s environment.

Furthermore, the possibility that the net overall impact of the ordinance was beneficial did not override the requirement in CEQA for the preparation of an EIR addressing the significant adverse environmental impacts the ordinance may have caused. (Guidelines, § 15063, subd. (b).) I. CEQA Standard of Review A.

General Principles It is well established in CEQA proceedings that (1) the public agency is the finder of fact, (2) the superior court’s findings are not binding on the appellate court, and (3) the scope and standard of review applied by the appellate court to the agency’s decision is the same as that applied by the superior court. (See §§ 21168, 21168.5; Fat v.

County of Sacramento (2002) 97 Cal.App.4th 1270, 1277 [19 Cal.Rptr.2d 402] [county’s approval of a negative declaration and conditional use permit reinstated and trial court reversed].) When a CEQA petition challenges action of a public agency that is legislative or quasi-legislative in character, the standard of review contained in

section 21168.5 and the procedures for traditional mandamus set forth in Code of Civil Procedure

section 1085 are applied. (See Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 566-567 [8 Cal.Rptr.2d 139, 888 P.2d 1268].)

Section 21168.5 provides: “In any action or proceeding, other than an action or proceeding under

Section 21168, to attack, review, set aside, void or annul a determination, finding, or decision of a public agency on the grounds of noncompliance with this division, the inquiry shall extend only to whether there was a prejudicial abuse of discretion. Abuse of discretion is established if the agency has not proceeded in a manner required by law or if the determination or decision is not supported by substantial evidence.” Amendment or adoption of an ordinance is a legislative act subject to review under

section 21168.5. (Friends of Sierra Madre v. City of Sierra Madre (2001) 25 Cal.4th 165, 172, fn. 2 [105 Cal.Rptr.2d 214, 19 P.3d 567] [§ 21168.5 applied to CEQA challenge to city ordinance that removed certain properties from register of historic landmarks]; No Oil, Inc. v. City of Los Angeles (1974) 13 Cal.3d 68 [118 Cal.Rptr. 34, 529 P.2d 66] [city’s adoption of ordinances without CEQA compliance was governed by § 21168.5]; Fall River Wild Trout Foundation v.

County of Shasta (1999) 70 Cal.App.4th 482, 488 [82 Cal.Rptr.2d 705] [county’s amendment of a zoning ordinance reviewed under § 21168.5].) Accordingly, the Kern County Board of Supervisors’ adoption of Ordinance G-6638 is reviewable under

section 21168.5 for a prejudicial abuse of discretion. B.

Fair Argument Test CEQA requires a governmental agency to “prepare, or cause to be prepared by contract, and certify the completion of, an environmental impact report on any project which they propose to carry out or approve that may have a significant effect on the environment.” (§ 21100, subd. (a); see Guidelines, § 15064, subd. (a)(1).) Conversely, a negative declaration—rather than an EIR—is appropriate when the administrative record before the governmental agency does not contain substantial evidence that the project may have a significant effect on the environment. (§ 21080, subd. (c).) When a court reviews an agency’s decision to certify a negative declaration, the court must determine whether substantial evidence supports a “fair argument” that the project may have a significant effect on the environment. (See §§ 21080, subds. (c) & (d), 21151; Laurel Heights Improvement Assn. v.

Regents of University of California (1993) 6 Cal.4th 1112, 1123 [26 Cal.Rptr.2d 231, 864 P.2d 502]; Stanislaus Audubon Society, Inc. v. County of Stanislaus (1995) 33 Cal.App.4th 144, 150-151 [39 Cal.Rptr.2d 54] [Ct.

App., 5th Dist. voided negative declaration and mandated preparation of EIR].) The determination by an appellate court under the fair argument test involves a question of law decided independent of any ruling by the superior court. (Stanislaus Audubon Society, Inc., at p. 151.) Consequently, “we independently ‘review the record and determine whether there is substantial evidence in support of a fair argument [the proposed project] may have a significant environmental impact, while giving [the lead agency] the benefit of a doubt on any legitimate, disputed issues of credibility.’ ” (Ibid., quoting Quail Botanical Gardens Foundation, Inc. v.

City of Encinitas (1994) 29 Cal.App.4th 1597, 1603 [35 Cal.Rptr.2d 470]; see § 21151.) California courts, including the Fifth Appellate District, routinely describe the fair argument test as a low threshold requirement for the initial preparation of an EIR that reflects a preference for resolving doubts in favor of environmental review. (See Stanislaus Audubon Society, Inc. v. County of Stanislaus, supra, 33 Cal.App.4th at p. 151; Sierra Club v. County of Sonoma (1992) 6 Cal.App.4th 1307, 1316-1317 [8 Cal.Rptr.2d 473] [Ct. App., 1st Dist., Div. 1]; see also No Oil, Inc. v.

City of Los Angeles, supra, 13 Cal.3d at p. 84.) In contrast to this description of the fair argument test, County asserts that “[a]ny reasonable doubts whether substantial evidence exists must be resolved in favor of the agency’s decision.” This assertion is rejected because (1) it misstates the low threshold of the fair argument test and (2) the case relied upon by County did not actually involve the fair argument test or the approval of a negative declaration. (See Marin Mun. Water Dist. v.

KG Land California Corp. (1991) 235 Cal.App.3d 1652, 1660 [1 Cal.Rptr.2d 767] [court explicitly stated it was applying the substantial evidence standard to the agency’s approval of the EIR].) Where the question is the sufficiency of the evidence to support a fair argument, “deference to the agency’s determination is not appropriate . . . .” (Sierra Club v.

County of Sonoma, supra, 6 Cal.App.4th at pp. 1317-1318.) A logical deduction from the formulation of the fair argument test is that, if substantial evidence establishes a reasonable possibility of a significant environmental impact, then the existence of contrary evidence in the administrative record is not adequate to support a decision to dispense with an EIR. (Guidelines, § 15064, subd. (f)(1); League for Protection of Oakland’s etc. Historic Resources v.

City of Oakland (1997) 52 Cal.App.4th 896, 904-905 [60 Cal.Rptr.2d 821].) The environmental review necessary to complete an EIR prepares the agency to weigh the conflicting substantial evidence on each side of an issue and make its findings of fact.

The fair argument test also requires the preparation of an EIR where “there is substantial evidence that any aspect of the project, either individually or cumulatively, may cause a significant effect on the environment, regardless of whether the overall effect of the project is adverse or beneficial . :. .” (Guidelines, § 15063, subd. (b)(1); see San Joaquin Raptor/Wildlife Rescue Center v.

County of Stanislaus (1996) 42 Cal.App.4th 608, 614-615 [49 Cal.Rptr.2d 494].) In other words, for projects that may cause both beneficial and adverse significant impacts on the environment, preparation of an EIR is required because the consideration of feasible alternatives and mitigation measures might result in changes to the project that decrease its adverse impacts on California’s environment.

Consequently, the argument that an EIR was unnecessary because the net overall effect of Ordinance G-6638 was beneficial to the environment must fail, regardless of potential environmental benefits, if substantial evidence shows a reasonable possibility of one or more significant adverse environmental impacts. C.

Definitions Relevant to the Fair Argument Test The fair argument test contains several terms that are defined further by CEQA, the Guidelines, or case law. First, the term “substantial evidence” is defined by the Guidelines to mean “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); see No Oil, Inc. v.

City of Los Angeles, supra, 13 Cal.3d at p. 75.) CEQA specifically provides that “substantial evidence includes fact, a reasonable assumption predicated upon fact, or expert opinion supported by fact” (§ 21080, subd. (e)(1)) and excludes “argument, speculation, unsubstantiated opinion or narrative, evidence that is clearly inaccurate or erroneous, or evidence of social or economic impacts that do not contribute to, or are not caused by, physical impacts on the environment.” (Id., subd. (e)(2); see Guidelines, § 15384, subd. (a).) Thus, the existence of a public controversy is not a substitute for substantial evidence. (Guidelines, § 15064, subd. (f)(4).) Second, a project “may” have a significant effect on the environment if there is a “reasonable possibility” that it will result in a significant impact. (No Oil, Inc. v.

City of Los Angeles, supra, 13 Cal.3d at p. 83, fn. 16.) Third, “environment” is defined by CEQA as “the physical conditions [that] exist within the area [that] will be affected by a proposed project, including land, air, water, minerals, flora, fauna, noise, objects of historic or aesthetic significance.” (§ 21060.5.)

Section 15360 of the Guidelines explains this definition by providing: “The area involved shall be the area in which significant effects would occur either directly or indirectly as a result of the project.

The ‘environment’ includes both natural and man-made conditions.” Fourth, the phrase “significant effect on the environment” is defined as “a substantial, or potentially substantial, adverse change in the environment.” (§ 21068; see Guidelines, § 15382.) “In determining whether an effect will be adverse or beneficial, the lead agency shall consider the views held by members of the public in all areas affected as expressed in the whole record before the lead agency.” (Guidelines, § 15064, subd. (c).) Fifth, the “significance” of an environmental effect requires the evaluation of “direct physical changes in the environment [that] may be caused by the project and reasonably foreseeable indirect physical changes in the environment [that] may be caused by the project.” (Guidelines, § 15064, subd. (d); see § 21065.) In this context, “direct” means “caused by and immediately related to the project.” (Guidelines, § 15064, subd. (d)(1).) “Indirect” means “not immediately related to the project, but . . . caused indirectly by the project” such as a physical change caused by a direct physical change. (Id., subd. (d)(2).) The test for the strength of the nexus between the project and an indirect physical change is whether “that change is a reasonably foreseeable impact [that] may be caused by the project.” (Id., subd. (d)(3).) The “reasonably foreseeable” test excludes physical changes that are speculative or not likely to occur. (Ibid.) Sixth, “effects” and “impacts” are synonymous and include (1) “[d]irect or primary effects [that] are caused by the project and occur at the same time and place” and (2) “[i]ndirect or secondary effects [that] are caused by the project and are later in time or farther removed in distance, but are still reasonably foreseeable.” (Guidelines, § 15358, subd. (a).) A common example of an indirect effect is the pollution that results from the growth-inducing effect of a project. (See Guidelines, §§ 15064, subd. (d)(2), 15382.) II.

An EIR is Required Under the Low Threshold of the Fair Argument Test Plaintiffs contend the implementation of Ordinance G-6638 created a reasonable possibility of significant environmental impacts both inside and outside Kern County.

Plaintiffs contend these significant impacts included (1) increased vehicle traffic, (2) increased air pollution in the form of vehicle emissions, dust and volatilization of pesticides, (3) degraded water quality from the use of alternative fertilizers, (4) increased burdens on landfills, (5) increased energy and fuel consumption, (6) increased soil erosion, (7) increased use of irrigation water, (8) increased exposure of humans to pathogens, (9) loss of habitat for small animals, and (10) loss of productivity of marginal farmland.

County contends the fair argument test was not met because (1) the relevant environment was approximately 23,594 acres of farmland in Kern County where Class B biosolids were applied and (2) it was not reasonably possible that significant adverse environmental impacts would occur on that farmland. To support its first contention, County asserts that any broader sweep of the ordinance would depend on alternative methods of biosolids disposal chosen by plaintiffs, and that the environmental impacts resulting from those methods were thus too uncertain and speculative for County to evaluate.

To support its second contention, County asserts EQ biosolids would serve as an adequate substitute for the Class B biosolids that could no longer be applied by farmers. CEQA defines the relevant geographical environment as the area where physical conditions will be affected by the proposed project. (§ 21060.5.) Consequently, the project area does not define the relevant environment for purposes of CEQA when a project’s environmental effects will be felt outside the project area. (See Napa Citizens for Honest Government v.

Napa County Bd. of Supervisors (2001) 91 Cal.App.4th 342, 369 [110 Cal.Rptr.2d 579].) Moreover, “the purpose of CEQA would be undermined if the appropriate governmental agencies went forward without an awareness of the effects a project will have on areas outside of the boundaries of the project area.” (Ibid.) We agree with County that some of the physical changes to the environment resulting from the adoption of Ordinance G-6638 would depend on the reactions of plaintiffs and others to its requirements.

Consequently, we will not limit our review to a particular geographical area, but begin by examining (1) the reasonably foreseeable reactions of those affected by the heightened treatment standards, (2) how such reactions might cause physical changes to the environment, and (3) the environmental significance of those physical changes. The two main groups directly affected by Ordinance G-6638 were sewage sludge generators and the farmers who used Class B biosolids as a fertilizer. We will analyze each group separately. A.

Reactions of Sewage Sludge Generators and Related Impacts Under the heightened treatment standards of Ordinance G-6638, sludge generators such as CSDLAC, CLABS and OCSD that applied Class B biosolids to agricultural land in Kem County were required to either reduce their production of biosolids or dispose of their biosolids in some other way. 1. Continued production and disposal of sewage sludge was foreseeable It was reasonably foreseeable that the City of Los Angeles, and the Counties of Los Angeles and Orange would continue to produce sewage sludge and would need to dispose of it.

County does not dispute this point. The administrative record includes documents stating that the generation of biosolids will continue to increase along with the state’s population. Therefore, at the time County certified the negative declaration, it was reasonably foreseeable that the heightened treatment standards would compel CSDLAC, CLABS, OCSD and other agencies to find a substitute for applying Class B biosolids on land within the jurisdiction of Kem County. 2. Alternative methods of disposal were reasonably foreseeable a.

Foreseeability of disposal alternatives The following alternatives were foreseeable, because of the applicable mies of law governing the use and disposal of sewage sludge and because of information contained in the administrative record; (1) further treatment to convert Class B biosolids to EQ biosolids followed by land application, (2) land application of Class B biosolids somewhere other than Kem County, (3) incineration, or (4) disposal in a landfill. The applicable mies of law set forth in state statute and federal regulations address land application, landfilling, and incineration of sewage sludge. (See Wat.

Code, § 13274, subds. (d), (f) & (g); 40 C.F.R. § 503, subparts B [land application], C [surface disposal, i.e., landfill] & E [incineration].) Also, land application of sewage sludge that has been treated to heightened standards is suggested by Ordinance G-6638 itself. The administrative record contains a vast amount of information about the alternative methods for disposing of Class B biosolids. Part of that information was presented in comments from persons familiar with the disposal of sewage sludge. For instance, a September 13, 1999, declaration of James F.

Stahl, an assistant chief engineer and assistant general manager of CSDLAC, identified the four alternatives and provided historical data showing the disposal options California had used in the past: “[I]n 1998 approximately 1,849 dry tons per day of sludge were generated in California. Of that amount, approximately 67.8% was land applied, while about 7% was in storage, 5.6% was incinerated, 9% was disposed of in landfills, and 10.6% [was] used in compost.

In California, the most common use of land-applied biosolids is for agricultural crop production. . . . [A]bout one-third of all land-applied biosolids in the State of California in 1998 were applied in Kern County.” A letter from the Chief of the Office of Clean Water Act Compliance of Region IX of the EPA indicated the alternatives were (1) treatment to Class A standards, (2) hauling further distances for land application, and (3) adding the organic, nitrogen-rich material to landfills.

These methods and incineration were identified in the September 13, 1999, comments jointly submitted by CASA and SCAP and a June 14, 1999, letter signed by attorneys for OCSD, CSDLAC and CLABS. In addition, a letter from the Chair of the Central Valley Water Board mentions landfilling and incineration as alternative methods of disposal.

As a result of the foregoing comments and existing law, the foreseeable alternative methods of disposal of Class B biosolids included (1) land application outside Kern County, (2) further treatment to EQ biosolids standards followed by land application, (3) landfilling and (4) incineration. b. Reasonableness limitation on foreseeable alternatives Next, we consider which of the foreseeable alternatives were reasonably foreseeable under the circumstances of this case.

Under the fair argument test, the inquiry into what is reasonably foreseeable depends on whether the administrative record contains enough evidence to show a reasonable possibility that a particular alternative would be used in the future. OCSD, CSDLAC and CLABS were among the entities affected by Ordinance G-6638 that submitted comments to County predicting how they would respond to the ordinance. An assistant general manager of OCSD, Blake P.

Anderson, stated in a September 9, 1999, declaration that OCSD intended to respond to the ordinance by (1) converting Class B biosolids to EQ biosolids and (2) hauling the portion of the Class B biosolids not converted to more distant locations for land application.

At that time, OCSD was “in the process [of] developing a request for proposals in order to obtain bids for the conversion of OCSD’s Class B biosolids to exceptional quality biosolids.” Earlier, in comments attached to its June 14, 1999, letter, OCSD discussed the limitations on landfills in Southern California and indicated that the landfills most likely to be used to dispose of Class B biosolids were located in Arizona and Utah. The declaration of Mr.

Stahl, CSDLAC’s assistant general manager, stated adoption of the ordinance would cause CSDLAC to apply its biosolids to land further away and, if the sites with permits for land application of Class B biosolids did not have sufficient capacity, to treat the biosolids to meet Class A or EQ standards. Mr.

Stahl also addressed the potential alternatives of incineration and local landfilling by stating that (1) incineration was not feasible in Southern California because of its adverse impact on air quality and (2) local landfilling lacked viability because of various constraints placed on those landfills, which included the recycling requirements of the California Integrated Waste Management Act of 1989. Also, Gregory M. Adams, the head of the air quality engineering

section of CSDLAC, opined that the incineration of sewage sludge in Southern California was not feasible because of its adverse impact on air quality.

A September 10, 1999, letter from CLABS stated that “[t]o date, our analysis indicates that the alternative with the highest likelihood of immediate success is the conversion of Class B biosolids to what are known as exceptional quality biosolids under the federal regulations.” The letter described the testing undertaken for the conversion of Class B biosolids at its Terminal Island wastewater treatment plant and its Hyperion treatment plant and stated that it was reasonably foreseeable that within three years CLABS would be converting 100,000 wet tons per year of Class B biosolids to EQ biosolids.

The letter also mentioned that the City of Los Angeles had examined potential alternative sites for land application of Class B biosolids as well as the use of a landfill in Arizona as a backup method for disposal. The foregoing predictions by entities that would have to change their practices when the heightened treatment standards went into effect are not rendered speculative by virtue of being predictions of future methods of compliance. Predicting the physical changes a project will bring about is an inescapable part of CEQA analysis. (Planning & Conservation League v.

Department of Water Resources (2000) 83 Cal.App.4th 892, 919 [100 Cal.Rptr.2d 173] [CEQA compels reasonable forecasting]; see Laurel Heights Improvement Assn. v. Regents of University of California (1988) 47 Cal.3d 376, 398-399 [253 Cal.Rptr. 426, 764 P.2d 278].) County contends that, when it adopted Ordinance G-6638, it could only speculate as to which alternative biosolids generators would adopt when the heightened treatment standards went into effect on January 1, 2003.

Determining whether alternative methods of compliance with a new ordinance are reasonably foreseeable or speculative depends on the facts in the record rather than a bright-line rule of law. A bright-line rule—stating that the existence of alternative means of compliance with a new rule or regulation would cause each alternative to be so uncertain that it was not reasonably foreseeable—would contradict the requirements for environmental analysis imposed by

section 21159, subdivision (a). That subdivision provides that when specified agencies adopt a rule or regulation concerning pollution control, performance standards, or treatment requirements, the agency must perform “an environmental analysis of the reasonably foreseeable methods of compliance.” Thus, CEQA recognizes that the existence of alternative methods of compliance does not, in itself, make the alternatives not reasonably foreseeable. Nothing in logic dictates a different conclusion when the new edict is a county ordinance, even though the express terms of

section 21159 do not cover ordinances. Consequently, regardless of whether the situation concerns a new rule, regulation or ordinance, whether one or more methods of future compliance are reasonably foreseeable depends upon the quality and quantity of evidence in the administrative record. The evidence in this case includes predictions of OCSD, CSDLAC and CLABS that are supported by a reasoned analysis of the options available to them, an investigation into the practicalities of those options, and the plans or intentions they had formed at that stage of their investigation.

Accordingly, the predictions and the information upon which the predictions were based constitute substantial evidence supporting a fair argument that the reasonably foreseeable alternatives for disposing of sewage sludge that otherwise would have been applied to Kern County farmland as Class B biosolids were (1) hauling the Class B biosolids to other locations where land application was allowed, (2) treating the Class B biosolids to meet more stringent standards, and (3) depositing the Class B biosolids in landfills. In other words, based on the record cited on appeal (see Cal.

Rules of Court, rule 14(a)(1)(C)), the only alternative method of disposal that was not reasonably foreseeable was incineration. 3. Significance of environmental impacts of disposal alternatives The next inquiry under the fair argument test is whether the likelihood of implementation of the reasonably foreseeable disposal alternatives created a reasonable possibility of a significant effect on the environment.

A project will, have a significant effect on the environment if it will cause “a substantial, or potentially substantial, adverse change in” (§ 21068) “the physical conditions [that] exist within the area [that] will be affected by [the] project, including land, air, water, minerals, flora, fauna, noise, objects of historic or aesthetic significance.” (§§ 21060.5 [defining “environment”], 21068 [defining “significant effect on the environment”]; see Guidelines, §§ 15360, 15382.) One illustration of the foreseeability of secondary environmental impacts occurred in City of Redlands v.

County of San Bernardino (2002) 96 Cal.App.4th 398 [117 Cal.Rptr.2d 582] where a county approved amendments that modified its general plan relating to land use regulation of unincorporated territory within a city’s sphere of influence.

The general plan amendment caused the slope development standards to become more lenient in certain areas and created the possibility for development of land previously considered too steep for development. (Id. at pp. 412-413.) The Fourth Appellate District held that an expected secondary effect of the adoption of a general plan amendment was an increase in grading that would destroy the natural contours of hillsides and possibly eliminate the natural habitat for plants and animals. (Id. at p. 413.) Despite the county’s argument that the evidence lacked the necessary specificity and the absence of a particular development project, the court concluded the administrative record contained “substantial evidence of a fair argument that the amendments [to the general plan] may have a significant effect on the environment.” (Id. at p. 414.) Thus, the trial court’s decision to require the preparation of an EIR was upheld. (Ibid.) a.

Hauling Mr. Anderson stated that OCSD anticipated hauling at least five truckloads of Class B biosolids per day to Kings County and two truckloads per day to Yuma, Arizona, which would involve a total of 2,000 vehicle miles per day and 1,200 vehicle miles per day, respectively. Mr.

Stahl stated Ordinance G-6638 would cause CSDLAC to apply Class B biosolids to land “at a currently-permitted location in Kings County for which [CSDLAC has] an existing contract” and at more remote permitted locations because the permitted capacity in Kings County could only accept about two-thirds of the biosolids generated by CSDLAC, OCSD and CLABS. Mr. Stahl also stated the additional hauling distance to the location in Kings County was approximately 45 miles one way. Based on this additional mileage and the amount of wet tons of sewage sludge CSDLAC produced, Mr.

Adams stated that the additional hauling of CSDLAC alone would result in nitrogen oxide (NOx) emissions of 63 pounds per day. Daily operations-related emissions that exceed 55 pounds per day of NOx are considered significant under the thresholds established by the San Joaquin Valley Unified Air Pollution Control District (SJVUAPCD). (See Guidelines, § 15064.7 [public agencies encouraged to develop and publish thresholds of significance]; Communities for a Better Environment v.

California Resources Agency (2002) 103 Cal.App.4th 98, 110-111 [126 Cal.Rptr.2d 441] [adopting quantitative standard as threshold of significance “promotes consistency, efficiency, and predictability in deciding whether to prepare an EIR”].) Accordingly, Mr. Adams concluded that the additional hauling of sewage sludge produced by CSDLAC would have a significant effect on the environment.

The information in the administrative record supported a reasonable inference that the totality of additional hauling of Class B biosolids beyond sites in Kern County to locations in Kings County and further north would create additional NOx emissions that would have a significant adverse impact on the air quality within the jurisdiction of the SJVUAPCD. This determination is based on the levels of significance established by the SJVUAPCD. (See Guidelines, § 15064.7.) Accordingly, under the fair argument test, an EIR should have been prepared to consider the impact of Ordinance G-6638 on air quality. b.

Treatment to EQ standards Mr. Stahl’s declaration also stated CSDLAC had not built facilities sufficient to process its biosolids to meet Class A or EQ standards, but the design parameters for a pasteurization facility to accomplish that processing had been calculated by CSDLAC and would require approximately 700 MMBTUH for heating in a natural gas boiler and 3,200 Hp for pumping and handling. The declaration of Mr.

Adams states that for the 700 MMBTUH design parameter calculated by CSDLAC for a pasteurization facility, a natural gas fired boiler of that capacity “would emit approximately 111 lbs of NOx and 581 lbs of CO per day at their BACT [best available control technology] levels (i.e., 5 ppm NOx and 50 ppm CO).” This estimate of the per day emission of NOx is more than twice the threshold of significance set by the SCAQMD, and the estimate of CO emission also exceeds the threshold of significance of 550 pounds per day. Mr.

Adams also stated that the processing activity necessary for another sanitation agency to convert 100,000 tons of Class B biosolids to EQ biosolids per year would also exceed the thresholds of significance for NOx and CO. In addition, the declaration of Robert A. Gillette, a civil engineer and principal of Carollo Engineers, described the energy consumption associated with the additional treatment processes used to convert Class B biosolids to Class A biosolids. In his declaration, Mr.

Gillette expressed the opinion that the most viable processes for converting Class B biosolids to Class A at a treatment plant were in-vessel composting, heat drying, and lime stabilization. Based on these processes and other data, Mr. Gillette estimated: “If only one third of the Class B biosolids presently used in Kern County are converted to Class A, the electricity usage for these alternatives is equivalent on an annual average basis to the amount used by between 1,500 and 5,000 homes in Southern California, according to data from Southern California Edison.

The natural gas usage is equivalent on an annual average basis to the amount used by between 3,000 and 6,000 homes in Southern California according to data from the Southern California Gas Company.” Mr.

Gillette also stated his opinion that if 200,000 wet tons per year of Class B biosolids were converted to more stringent standards instead of applied to land in Kern County, “the environmental impact from the additional use of energy would be very significant.” While we recognize that OCSD, CSDLAC and CLABS each had choices in deciding what combination of further treatment and hauling to distant sites to implement, we conclude that a fair argument can be made that the aggregate impact of the alternatives adopted by these entities and the publicly and privately owned treatment works (POTW) serving Kern County communities may cause a substantial, or potentially substantial, adverse change in the air quality within the jurisdiction of the SCAQMD and the SJVUAPCD.

Furthermore, a fair argument can be made that the increased energy use caused by further treatment processes would cause a significant effect on the environment. c. Landfill capacity The historical data in the administrative record shows that the biggest changes in the disposal and use of biosolids in California between 1988 and 1998 were the reduction in the use of landfills (60.2 percent to 9.1 percent) and the increase in the use of land application (12.7 percent to 67.8 percent).

From this data, it is reasonable to infer that land application has acted as a substitute for disposal in landfills and, as land application becomes more difficult, the use of landfills will be a partial substitute for land application. For instance, page 2-2 of the State Water Board’s 1999 Draft EIR links the “huge increase in land application” reflected in the 1998 data with the reduction in the use of landfills.

The California Integrated Waste Management Act of 1989 includes the legislative findings that the “amount of solid waste generated in the state coupled with diminishing landfill space and potential adverse environmental impacts from landfilling constitutes an urgent need for state and local agencies to enact and implement an aggressive new integrated waste management program” (§ 40000, subd. (d)), and that the reuse of solid waste would preserve landfill capacity and protect the state’s environment (id., subd. (e)).

Based in part on (1) the volume of Class B biosolids applied to land in Kern County before the heightened treatment standards became effective, (2) the use of landfills as a substitute for land application of biosolids, and (3) the legislative findings regarding diminishing landfill capacity and the adverse environmental impact associated with landfilling, we conclude that a fair argument exists that the potential increased use of California’s limited landfill space to dispose of an organic, nitrogen-rich material may have a significant adverse effect on the environment.

Accordingly, that potential environmental impact should be assessed in an EIR. d.

Summary The reasonably foreseeable reactions of sewage sludge generators to Ordinance G-6638, and the reasonably foreseeable environmental impacts of those reactions, include: (1) increased fuel consumption and vehicle emissions resulting from hauling Class B biosolids greater distances; (2) the consumption of energy for the heating, pumping and handling involved in treating Class B biosolids to meet more stringent standards, and the emissions generated by the additional treatment; and (3) loss of landfill capacity. B.

Farmer Reaction and Related Impacts Plaintiffs argue that the reaction of Kern County farmers to the heightened treatment standards for sewage sludge applied to land after December 31, 2002, would result in significant impacts, “including the loss of productivity of marginal farmland (EPA, Garvey, Magan), increased air pollution from volatilization of increased pesticide usage, increased dust, and additional truck traffic (EPA, Regional Board, Garvey, Wilson, Tow, Anderson, Stahl, Adams, Hyde, Nixon, Westhoff) . . . increased energy and fuel consumption (Wilson, Gillette, Anderson, Stahl, Nixon), increased erosion and dust (Garvey, Tow), increased water use (Garvey, Dixon, Tow), increased risks to human health (Nixon, Gerba), and loss of habitat for small animals (Garvey).” (Fn. omitted.) County argues that the evidence referred to by plaintiffs is too general and does not show that “the Ordinance will result in significant environmental impacts on the land to which it applies.” County asserts the lack of site-specific evidence occurred because “no physical changes would occur in the unincorporated area during the first three years because the Ordinance allowed the continued use of Class B biosolids; and no significant impacts would occur after January 1, 2003 because the Ordinance allows the continued land application of EQ biosolids.” 1.

Reasonably foreseeable farmer reactions Plaintiffs predicted that farmers who could not apply Class B biosolids after December 31, 2002, would react by (1) taking land out of agricultural production, (2) applying animal manure as a substitute for the biosolids, or (3) using chemical fertilizers.

County asserts plaintiffs have indulged in assumptions unsupported by facts and have “ignore[d] evidence showing it is far more likely sludge generators will convert their Class B biosolids to EQ, ensuring an adequate substitute for Class B biosolids for anyone who wishes to use them.” County supports its prediction by referring to various contracts and related documents of the sanitation agencies that contemplate the use of composting as a disposal option.

In effect, County has argued its forecast of how farmers would react when they could no longer apply Class B biosolids was the only forecast supported by substantial evidence. (See Guidelines, § 15144 [forecasting].) This position is rejected for three reasons.

First, the documents cited by County in its appellate brief were not considered by County in adopting Ordinance G-6638 as they were not a part of the administrative record. (See § 21003, subd. (b) [document cannot be “meaningful and useful to decisionmakers” if it was not available to them].) Second, County has cited and this court has located no evidence in the administrative record that supports the factual assertion that EQ biosolids are “an adequat

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