By Frank Chmelik of CSD Attorneys at Law P.S. - WPPA Counsel

                This month’s focus is on comprehensive scheme of harbor improvements (“CSHI”), the State Environmental Policy Act (“SEPA”), and the impact of the 2017 Washington Supreme Court decision in Riverkeeper vs. the Port of Vancouver USA. 

Since RCW 53.20.010 was adopted in 1911, Ports have been required to comprehensively plan before spending public funds on improvements, making port districts some of the first Washington governments with mandated planning.  Sixty years later, in 1971, the state adopted the SEPA (codified now as chapter 43.21C RCW), which mandates environmental consideration of virtually all government actions.  Then forty-five years later, our Supreme Court provided further guidance in the Riverkeepers case.  It is important to note that the CSHI statutes, the SEPA statutes, and Riverkeeper do not mandate a decision by a port commission.  Rather, they require that procedures be followed in reaching a decision.  

·         Adopting or Amended   Chapter 53.20 RCW mandates that the port commission has a “duty” to “adopt a comprehensive scheme of harbor improvement” before creating any improvement.  The statute notes that all improvements must be “substantially in accordance” with the adopted CSHI.  Originally, the 1911 statute required voter ratification of the CSHI adopted or amended by the port commission.  In 1943, the statute was changed requiring only an action by the port commission.  RCW 53.20.010 requires a public hearing on a proposed CSHI or amendment before the commission vote with “notice [of the public hearing]. . . published once a week for two consecutive weeks in a newspaper of general circulation in the port district.”

·         What Level of Detail is Required in a CSHI?  There is little guidance in the statute.  RCW 53.20.020 references only “such general plans.”  Notably the Supreme Court in 2009 stated that “the statute and case law appear to allow a port commission considerable discretion in the creation of a comprehensive scheme of harbor improvements.”  Some port districts have adopted a very detailed and specific CSHI that is regularly referenced and amended (even with each new lease).  Other port districts have adopted very general statements with broad discussions of uses.  Many CSHIs have not seen the light of day in years.  In several decisions, our Supreme Court has described the level of specificity required in a CSHI.  In 1912, the Supreme Court noted that “plans were sufficient where the scheme fairly informed voters of the nature and extent of proposed improvements but did not provide such details necessary for final construction of the improvement.”  In 1923, the Supreme Court explained that a CSHI requires “at least a general outline plan of the improvements [the port] intends to construct. . . a general plan of the several structures must be outlined, showing with definiteness their location, character and general dimensions, so that one examining the plan may know with some degree of certainty what is intended to be done.”  In 1963, the Court noted that a CSHI must “give the taxpayers a fairly detailed picture of what the port will do with. . . their money.”  So, the answer to the question of ‘how specific” is clear as mud.  We can, however, say that a CSHI should inform the reader of what the port district is planning.

·         The CSHI can be a series of documents.  In 2009 our Supreme Court, in a lawsuit seeking to recall two port commissioners,[1] noted that “the statutory requirement for a comprehensive scheme of harbor improvements may be met through a single document or a series of documents.”  Therefore, a CSHI can be one document or a series of documents including such things as a capital budget, an airport layout plan, an environmental cleanup plan, or a master plan for a particular development. 

·         CSHI and Purchasing Property?  RCW 53.20.010 only requires a CSHI prior to “creating any improvement.”  However, a port commission may want to consider amending the CSHI prior to purchasing property to “give the taxpayers a fairly detailed picture of what the port will do with. . . their money.”    

·         The SEPA Interface with Adoption or Amendment of the CSHI?  SEPA requires analysis for “nonproject” actions which are defined in WAC 197-11-774 as “actions which are different or broader than a single site specific project, such as plans, policies, and programs.”  This language strongly indicates that the adoption or amendment of a CSHI is a “nonproject” action although SEPA experts sometimes debate the point.  I believe the best approach is to do a SEPA review; I leave it to SEPA experts to determine when this review should be combined with a project SEPA review.

·         The 2017 Riverkeepers Supreme Court Decision.  In 2017 the Washington Supreme Court considered a challenge to a lease for an oil rail transfer facility at the Port of Vancouver, USA.[2]  An important holding in the case was the court’s direction on SEPA.  The Court starts by noting that “SEPA provides decision makers with the environmental impacts of proposed actions.”  The Court went on to note that SEPA was satisfied when the Port of Vancouver lease had provided that the tenant must obtain and comply with "all necessary licenses, permits and approvals. . . for the Permitted Use,” and where the Port retained the authority to approve all designs for the proposed facility.  I note that it was not uncommon for a county or city that was issuing the development or building permits to undertake the SEPA analysis as the lead agency.  In such a case, care should be taken to make sure that a lease contains sufficient discretion of the port commission to act on the SEPA determinations.

·         What are the “Best Practices” for a CSHI and SEPA?  Based upon the statute and the caselaw it seems to me that the following best practices will serve to protect a Port.

o   Don’t let the CSHI get stale.  It should be reviewed annually or at least looked at when a new project is proposed.  It is difficult to defend a challenge to a project where the CSHI has not been looked at or several years.

o   Adopt the capital budget as a CSHI amendment.  Each year when adopting a capital budget, also adopt the capital budget as an amendment to the CSHI.  The exact same notice and public hearing requirements apply to the budget adoption and a CSHI amendment.  Therefore, a properly drafted notice for the “adoption of the capital budget and amendment to the CSHI by incorporating the capital budget” can be used to hold both a budget hearing and a hearing to amend the CSHI.

o   Reference all Port planning documents in the CSHI.  The CSHI should reference all port district planning documents and note that all such documents “as they now exist or are hereinafter amended” are incorporated into the CSHI.

o   A possible CSHI amendment should be part of every project checklist.  Routinely add “Does the CSHI need to be updated for this project?” to the checklist for each capital project checklist.  A port may reach the conclusion that there was enough specificity on the existing CSHI or in the capital budget.  Or a port may decide that a CSHI amendment is warranted to “give the taxpayers a fairly detailed picture of what the port will do with. . . their money.”    

o   Conduct a SEPA review.  I think that a SEPA review should be conducted (or at least considered) for each CSHI adoption or amendment to avoid an untimely challenge to a future controversial project.

o   Incorporate appropriate language reserving SEPA discretion.  In leases and property sales, consider incorporating language in the lease or sale agreement that requires (1) compliance with all permit conditions and (2) some discretion for the commission to finally approve plans and specifications.  This was a complicated issue especially when the lessee or the buyer wanted certainty.  An early and careful discussion with the port attorney was warranted.

As always contact your port attorney for fact-specific advice.  And, if you have a particular question for Knowing the Waters, please email me at fchmelik@csdlaw.com.

[1] In the Matter of Recall of Telford, 166 Wash. 2d 148 (2009).

[2] The Riverkeeper case was most frequently discussed by port lawyers regarding the direction from the Court on how and what could be discussed in an executive session called to discuss the lease or sale of real estate (RCW 42.30.110(1)(c).