STATE TO STUDY WATER FLOW REVIEW AFFECTS NEWHALL RANCH.

Byline: Heather MacDonald Staff Writer

SANTA CLARITA - State water officials will conduct a new environmental assessment of a plan that would bring additional state water to Southern California to serve several proposed developments, including Newhall Ranch.

The state Department of Water Resources agreed to conduct the new report in order to settle a lawsuit filed by an environmental group that claimed the environmental impact report prepared for the 1995 Monterey Agreement was inadequate and improperly conducted.

The agreement between the state Department of Water Resources and various State Water Project contractors sought to allow more flexible operation of state water facilities, permanent transfers of entitlements between contractors and the transfer of land to certain contractors, in exchange for the permanent retirement of 45,000 acre-feet of state water.

The Planning and Conservation League sued the state Department of Water Resources, asserting that the environmental study for the Monterey Agreement was inadequate because it did not reflect the inability of the State Water Project to deliver 4.2 million acre-feet of water to contractors, even though entitlements promise the supply.

In September 2000, a state appeals court agreed with the Planning and Conservation League, and threw out the assessment.

A 21,600-home mini-city planned west of Santa Clarita, Newhall Ranch relies on a portion of a 41,000 acre-foot water transfer from Kern County obtained by the Castaic Lake Water Agency as part of the Monterey Agreement.

About 1,600 acre-feet of water from that transfer is earmarked for Newhall Ranch, records show.

In January, Los Angeles Superior Court Judge David Yaffe tossed the environmental assessment of the transfer to CLWA because it relied on the inadequate study of the Monterey Agreement.

``It's a domino effect,'' said Marlee Lauffer, a spokeswoman for The Newhall Land and Farming Company, the developer of Newhall Ranch. ``This is a step closer to fixing the technical problems with both studies.''

Yaffe has yet to decide what should be included in the CLWA's revised environmental assessment. The judge's decision was upheld in April by the state Supreme Court after an appeal by the CLWA.

CLWA General Manager Dan Masnada said he does not expect the settlement agreement, which is not yet final, to affect on the court case involving the agency's water transfer from Kern County.

``It's business as usual for us,'' Masnada said.

The Los Angeles County Board of Supervisors has delayed consideration of Newhall Ranch until the legal dispute over the project's water supply is resolved.

The company is pursuing other water sources for the project in order to make up the shortfall and resolve the issue without relying on the Monterey Agreement, Lauffer said.

In Newhall Land's second-quarter results statement published this week, the company said it does not expect the county to hold hearings on the project until early next year, although the Board of Supervisors is currently scheduled to take up the issue next month.