This is Dennis Reynolds' presentation on the Legal Implications of Bainbridge Island's SMP Update.

1. Building Industry Association of Washington
Legal Committee Fall Meeting CLE
November 7, 2013
2:30 p.m. to 5:30 p.m.
Sea-Tac Hilton
By Dennis Reynolds

2. Presented by:
Dennis D. Reynolds
Dennis D. Reynolds Law Office
200 Winslow Way West, Suite 380
Bainbridge Island, WA 98110
(206) 780-6777
dennis@ddrlaw.com

3. Sandy Mackie, “Mitigation v. Restoration, Testing the Legal Limits.”
Charlie Klinge, Washington Realtors, “A Background Paper on Shoreline Master Program Update,” March, 2010.
Dennis D. Reynolds, Washington Realtors, “A Background Paper on the Shoreline Master Program Updates and Critical Area Ordinance Review,” May, 2010.
Sandy Mackie, “The Shoreline Management Act and Public Access, A Critique of Common Practices,” March 25, 2011.

4. The SMA requires that local governments develop master programs for the regulation and use of their shorelines. A “master program” is the “comprehensive use plan for a described area, and the use regulations together with maps, diagrams, charts, or other descriptive material and text, a statement of desired goals, and standards developed in accordance with the policies enunciated in RCW 90.58.020.” All master programs must be approved by the Washington State Department of Ecology. Once approved, the master programs “constitute [the] use regulations for the various shorelines of the state.” RCW 90.58.100(1).

5. The Washington State Legislature mandated that all cities and counties with shorelines of the state update their local shoreline plans (Master Programs or SMPs) consistent with the Shoreline Management Act and regulations adopted by the State Department of Ecology, the “SMA Guidelines,” WAC Chapter 173-27. SMPs must contain use regulations governing all shorelines of the state which include all saltwater shorelines and uplands within 200 feet of the ordinary high water mark, associated wetlands, streams or rivers in excess of 20 CFS average annual flow, and lakes of 20 acres or more.

6. A local jurisdiction is required to make amendments to the Master Program only when “deemed necessary to reflect changing local circumstances, new information or improved data.”
WAC 173-26-090.

7. The SMA standard for an update is to “utilize a systematic interdisciplinary approach which will ensure the integrated use of the natural and social sciences and the environmental design arts ….”
RCW 90.58.100(a).

8. Make reasonable efforts to inform the people of the state about the shoreline management program of this chapter and in the performance of the responsibilities provided in this chapter, shall not only invite but actively encourage participation by all persons and private groups and entities showing an interest in shoreline management programs of this chapter; …
RCW 90.58.130(1) (emphasis supplied).

9. Local citizens and associations should urge their County Commissioners or City Council to hire independent expert review of the best available science. Also, any Science Technical or Advisory Committees should not be composed just of agency personnel or regulators.

10. The SMA calls for “coordinated planning . . . recognizing and protecting private property rights consistent with the public interest.”
RCW 90.58.020.

11. The State Guidelines provide substantial discretion to local governments to consider local circumstances, as does the GMA.

12. The State Guidelines provide the foundation for updated SMPs and anchoring comments based upon their text is strongly encouraged.

13. The “no net loss of ecological functions” concept is stated as one of the “Governing Principles” of the State Guidelines. However this language is not found in the SMA until 2010.

14. The “no net loss of ecological functions” standard applies to no net loss of existing conditions through sequencing applied to authorized new development to ensure that the end result maintains existing conditions – sequencing refers to avoid, minimize, mitigate, in that order.

15. The State Guidelines explicitly allow
impacts to ecological functions
“necessary to achieve other objectives
of RCW 90.58.020,” for example, priority
for single-family uses and recreational moorage.
WAC 173-26-176(2).

16. The SMP must regulate new development and redevelopment to ensure “no net loss of ecological conditions,” but “no net loss” does not mean “no development” or “no impact.”
The SMA allows “alteration of the natural condition” for preferred uses.

17. The State Guidelines specify that new regulations should apply only to undeveloped land: “While the master program is a comprehensive use regulation applicable to all land and water areas within the jurisdiction described in the act, its effect is generally on future development and changes in land use.”
WAC 173-26-192(2)(a)(iii)(A).

18. The Legislature has provided that shorelines of the State are not considered “critical areas” except to the extent that they qualify as critical areas pursuant to the definition found in the GMA provided by RCW 36.70A.030(5), and they are designated as such by a local government pursuant to RCW 36.70A.060(2). But not all shorelines are critical areas. However, overworked Staff can be pressured to simply suggest “wholesale integration” of the existing CAO standards in order to move along an SMP update then ask that the public agencies such as Ecology concur, and Ecology will do so.

19. Many assert that a new SMP must provide protection for critical areas within shoreline jurisdiction “at least equal to that” found in a GMA CAO. The 2010 legislation does not say that, having changed the standard from “at least equal” to one of assuring “no net loss to shoreline ecological functions.” These terms do not mean “just use the CAO.”

20. The State Guidelines make it clear that SMPs “shall contain requirements for buffer area zones around wetlands within shoreline jurisdiction,” but they contain no such mandatory requirement for “critical freshwater habitats” including larger lakes or streams, or the nearshore marine area.

21. The State Guidelines specifically recognize that “no touch, no build” buffers cannot be applied to existing development: “Like other master program provisions, vegetation conservation standards do not apply retroactively to existing uses and structures.”
WAC 173-26-221(5)(a)

22. The standard buffer widths presume the existence of a relatively intact native vegetation community in the buffer zone adequate to protect the wetland functions and values at the time of the proposed activity.
Department of Commerce, Critical Areas Assistance Handbook, Appendix A.

23. Imposition of large “one size fits all” no-build buffers or setbacks on the shorelines (typically 150 feet is the preference for shorelines), or no-build vegetation protection zones (often going towards 60-80 percent of lot ownership in shorelines) is legally suspect. “As applied” challenge is probably the best way to attack generic buffers or vegetation conservation set asides.

24. Sq. Ft.
Depth
Water Frontage
Buffer
150
125
100
Acre =
43,560
217.8
200
69%
57%
46%
Average Lot
5000
100
50
100%
100%
100%
10000
200
50
75%
63%
50%
20000
200
100
75%
63%
50%

25. From the Puget Sound Business Journal
:http://www.bizjournals.com/seattle/print-edition/2013/07/26/viewpoint-legal-currents-shift-for.html
SUBSCRIBER CONTENT: Jul 26, 2013, 5:00am PDT
Viewpoint: Legal currents shift for shoreline owners
Aaron Laing, Guest Columnist
Following the June 25 U.S. Supreme Court decision in Koontz v. St. Johns River Water Management District, local, state and federal governments must demonstrate a “nexus” and “rough proportionality” when requiring property owners to make payments in exchange for land-use permit approvals.
The Koontz ruling is especially significant for Washington state shoreline property owners because of a 2011 state Supreme Court decision that exempted conditions imposed under a local government’s shoreline master program from meeting a similar standard in a state statute.
The Koontz decision fills the gap created in 2011 and has the potential to change how shoreline permits are issued in Washington state.
In September of 2011, I contributed a piece to this paper titled “Shoreline residents swamped by regulations.” In the piece, I provided an overview of how the Shoreline Management Act of 1971 requires cities and counties to work with the state Department of Ecology to develop shoreline master programs to regulate the use of shorelines within their boundaries. I also outlined how the costly, complex regulations associated with some shoreline master programs place an undue burden on shoreline property owners and create a disincentive for them to go through the permitting process to make changes to their land. The effect of the 2011 decision was to open the door to potentially overreaching, if not well-intentioned, shoreline regulations. So in Washington state, the Koontz decision changes the legal landscape in particular for shoreline property owners.

26. In Koontz, the U.S. Supreme Court re-examined the applicability of its “nexus” and “rough proportionality” tests to situations where the government demands that a property owner spend money on infrastructure or mitigation to offset the impacts of development.
“Mindful of the special vulnerability of land use permit applicants to extortionate demands for money,” the Supreme Court removed any doubt that the constitutional protections for private “property” did not only apply to “real property.”
For the past 15 years or so, many government agencies and courts applied the “nexus/proportionality” test solely to conditions that required dedication of real property and not to monetary conditions or other types of required mitigation.
The Koontz ruling clarifies past rulings and makes clear that the two-part test applies whenever a government demands payment as a condition of approving a land use permit. Perhaps most important, Koontz places the burden on the government to demonstrate both the “nexus” and “proportionality” of such conditions.
The Koontz ruling simplifies the inquiry and levels the playing field. Existing shoreline regulations may, for example, allow some local governments to condition approval of modest exterior renovations — like a deck expansions or dock construction — by requiring property owners to rip out existing landscaping, replant native species, post bonds to ensure the plants survive and prohibit recreation in the newly planted area. Such a scenario is essentially a de facto conservation easement. These types of requirements may not meet the “nexus/proportionality” standard under Koontz, and the burden will now be on the local government to show they do if challenged.
On its face, the Koontz decision should help shoreline property owners and developers avoid what the U.S. Supreme Court called “extortionate demands” of local governments in the form of overreaching mitigation conditions.
AARON LAING is a land use attorney at the Seattle office of Schwabe, Williamson & Wyatt.

27. Q: Aren’t requirements for shoreline vegetation buffers a “taking” of private property rights?
A: No. The U.S. Constitution allows state and local governments to limit private property activities provided it’s for a legitimate public benefit and they do not deprive the landowner of all reasonable use of the property. For example, state and local governments can adopt regulations that prevent sediment from running off private property and entering a salmon-spawning stream. These regulations protect salmon, a public resource.
Buffers do not deprive landowners of all reasonable use of their property and, in fact, all property tends to benefit from reasonable setbacks and buffers. In those limited instances where the buffer precludes or significantly interferes with a reasonable use, the property owner may obtain a variance. Publication No. 09-06-029, P. 61 Revised April 2010.

28. In general, zoning laws and related regulation of land use activities are lawful exercises of police powers that serve the general public good. However, the state and federal constitutions have been interpreted by courts to recognize that regulations purporting to be a valid exercise of police power still must be examined to determine whether they unlawfully take private property for public use without providing just compensation. This relationship between takings laws and regulation is sometimes explained as looking at whether a regulation has the effect of forcing certain landowners to provide an affirmative benefit for the public, when the burden of providing that benefit is one that should actually be carried by society as a whole.

29. The State Guidelines for an SMP Update require “actual specification” of the extent of existing structures and shoreline development and an evaluation of the effectiveness of the existing shoreline regulatory system. WAC 173-26-201(37)(c). The inventory controls all future decisions.

30. The State Guidelines also mandate preparation of a Cumulative Impacts Assessment (CIA) “… that identifies, inventories and ensures meaningful understanding of the current and potential ecological functions provided by affected shorelines.” WAC 173-26-186(8)(a). A compliant CIA must be proposed before a new SMP can be adopted. The CIA must also consider and assess the benefits provided by existing regulations.

31. A cumulative impact analysis which includes such analysis, along with an evaluation of reasonably foreseeable future development:
Local master programs shall evaluate and consider cumulative impacts of reasonably foreseeable future development on shoreline ecological functions and other shoreline functions fostered by the policy goals of the act ... Evaluation of such cumulative impacts should consider: (i) Current circumstances affecting the shorelines and relevant natural processes; (ii) Reasonably foreseeable future development and use of the shoreline: and (iii) Beneficial effects of any established regulatory programs under the other local, state, and federal laws.
WAC 173-26-186(8)(d).

32. For the past 30 years, local governments have achieved the balance between property rights and the environment largely through the permit process, where a proposal’s consistency with the policies of the SMA can be determined on its own merits.

33. Outright prohibitions against private docks, beach access, stairs, bulkheads and other common shoreline developments and uses, or large generic buffers or set asides, are contrary to the SMA’s policy of balancing the efficient use of shoreline resources with a property owner’s right to use and enjoy his own property.

34. The purpose of science is to ensure that regulations are based on a reasoned analysis of appropriate science and meaningful, reliable, and relevant evidence.

35. The GMA standard is “best available science.”
The SMA standard is to “utilize a systematic interdisciplinary approach which will ensure the integrated use of the natural and social sciences and the environmental design arts.”

36. The science cannot be used in isolation from all of the other planning goals specified in the GMA or the SMA. For instance, the purpose of the BAS requirement is to ensure that critical area regulation is not based upon speculation and surmise.

37. It is not enough to generally cite “the science” and act upon guesses or fears. Hypothetical impacts – “[are] not enough to deny private property owners fundamental access to the application review process, or protection and use of their property.”
Biggers v. Bainbridge Island, 162 WA. 2d at 687.

38. Passed Legislature - 2013 Regular Session
State of Washington 63rd Legislature 2013 Regular Session
By Representatives Short, Upthegrove, Springer, Pollet, Taylor, Smith, Fagan, Dahlquist, and Fey
Read first time 01/16/13. Referred to Committee on Environment.
AN ACT Relating to standards for the use of science to support public policy; adding a new section to chapter 34.05 RCW; and creating a new section.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1. (1) The legislature finds that it is critically important that scientific information used to inform public policy be of the highest quality and integrity. Furthermore, the legislature recognizes that a public benefit is derived from greater transparency as to what scientific information, data, or records are being used to inform public policy or relied upon in agency decision making.
(2) Therefore, in order to help ensure that agencies routinely use scientifically credible information in conducting their policy-making functions, it is the intent of the legislature to have those sources of scientific information reviewed and relied upon by agencies be identified in a clear and transparent way.

39. NEW SECTION. Sec. 2. A new section is added to chapter 34.05 RCW to read as follows:
1) This section applies only to the water quality and shorelands and environmental assistance programs within the department of ecology.
(2) Before taking a significant agency action, the department of ecology must identify the sources of information reviewed and relied upon by the agency in the course of preparing to take significant agency action. Peer-reviewed literature, if applicable, must be identified, as well as any scientific literature or other sources of information used. The department of ecology shall make available on the agency's web site the index of records required under RCW 42.56.070(6) that are relied upon, or invoked, in support of a proposal for significant agency action.
3) For the purposes of this section, "significant agency action" means an act of the department of ecology that:
(a) Results in the development of a significant legislative rule as defined in RCW 34.05.328; or
(b) Results in the development of technical guidance, technical assessments, or technical documents that are used to directly support implementation of a state rule or state statute.
(4) This section is not intended to affect agency action regarding individual permitting, compliance and enforcement decisions, or guidance provided by an agency to a local government on a case-by-case basis.

40. Courts have held that a restriction of the use of property that is insufficiently supported by best available science violates constitutional nexus and proportionality standards.
The State Guidelines for SMP Updates mandate protection of property rights.

41. Inter-Agency Guidelines
Do Not Control

42. Be Aware of Over-Designation
of Restrictive Shoreline Environments
or Critical Areas

43. Restoration is Not Required

44. A cumulative impacts analysis must be done on a system wide basis, logically, the geographic boundaries of the involved local government. Further, cumulative impacts are to be assessed in the “aggregate” against the “no net loss” standard.

45. When addressing cumulative impacts, it is strongly urged that local governments not be allowed to set as a goal that insignificant and even theoretical impacts must be prevented.

46. For such commonly occurring and planned development, policies and regulations should be designed without a reliance on an individualized cumulative impact analysis. Local government shall fairly locate the burden of addressing cumulative impacts.
For development projects that may have un- anticipated or uncommon impacts that cannot be reasonably identified at the time of master program development, the master program policies and regulations should use the permitting or conditional use permitting processes to ensure that all impacts are addressed and that there is no net loss of ecological function of the shoreline after mitigation.

47. A nonconforming use or development is one that would not be approved as a new development under existing laws, but was lawfully established or constructed. Included are developments, uses and lots that were legally established prior to the effective date of the current SMP and do not conform to current lot size standards.

48. WAC 173-27-080 provides a standard definition of a nonconforming use or development if a local government does not have one in its existing SMP:
Nonconforming use or development means a shoreline use or development lawfully constructed or established prior to the effective date of the act or applicable master program … which does not conform to present regulations or standards.

49. Ecology has promulgated “default” standards that apply in the absence of local shoreline regulations set out in WAC 173-27-080. These provide:
◦Nonconforming structures may be maintained, repaired and enlarged as long as they do not extend further into areas where new construction would not be allowed.
◦Nonconforming uses are generally allowed to continue but cannot be enlarged or expanded.
◦Single-family residences can be expanded with a conditional use permit.
◦A nonconforming development that is damaged to an extent not exceeding 75% of its replacement cost may be reconstructed.

50. The courts have stated that local governments are free to preserve, limit, or terminate nonconforming uses and developments subject only to the broad limits of applicable enabling acts and the Washington State constitutional protections for private property rights.

51. The Department of Ecology has stated in writing that the purpose of the SMA’s nonconforming use provisions is to phase out nonconforming uses and structures, such to bring all development and use up to current standards.

52. (1) New or amended master programs approved by the department on or after September 1, 2011, may include provisions authorizing: (a) Residential structures and appurtenant structures that were legally established and are used for a conforming use, but that do not meet standards for the following to be considered a conforming structure: Setbacks, buffers, or yards; area; bulk; height; or density; and (b) Redevelopment, expansion, change with the class of occupancy, or replacement of the residential structure if it is consistent with the master program, including requirements for no net loss of shoreline ecological functions. (2) For purposes of this section, "appurtenant structures" means garages, sheds, and other legally established structures. "Appurtenant structures" does not include bulkheads and other shoreline modifications or over-water structures. (3) Nothing in this section: (a) Restricts the ability of a master program to limit redevelopment, expansion, or replacement of over-water structures located in hazardous areas, such as floodplains and geologically hazardous areas; or (b) affects the application of other federal, state, or local government requirements to residential structures.
[2011 c 323 § 2.]

53. Until the Department of Ecology approves a new master program update or segment of the SMP, a “use” or development which is “legally located within shorelines of the state that was established or vested on or before the effective date of the local government’s development regulations to protect critical areas may continue as a conforming use and may be redeveloped or modified” under certain circumstance. Specifically, the use may be continued or modified if:
(A) The redevelopment or modification is consistent with the local government’s master program; and (B) the local government determines that the proposed redevelopment or modification will result in no net loss of shoreline ecological functions. The local government may waive this requirement if the redevelopment or modification is consistent with the master program and the local government’s development regulations to protect critical areas.

54. REVIEW: SMP UPDATE
↓
GROWTH MANAGEMENT
HEARINGS BOARD
↓
APPEAL TO COURTS

55. A Petition may be filed only by (a) the state, or a county or city that plans under this chapter; (b) a person who has participated orally or in writing before the county or city regarding the matter on which a review is being requested.
For purposes of this section “person” means any individual, partnership or corporation, association, state agency, governmental subdivision or unit thereof, or public or private organization or entity of any character.
To establish participation standing under subsection (2)(b) of this section, a person must show that his or her participation before the county or city was reasonably related to the person’s issue as presented to the board.

56. Appeal Period to Environmental and Land Use Hearings Office (GMHB):
60 days from date of Notice by the Department of Ecology that the new SMP has been approved.
[RCW 90.58.090(7); RCW 36.70A.290(2)(c)]

57. STANDARDS FOR REVIEW:
SMP UPDATE
● Consistency with SMA Goals and State Guidelines
● Consistency with Comprehensive Plan
● Internal consistency
● Compliance with the State Environmental Policy Act (SEPA)

58. In appeals concerning a Shoreline of Statewide Significance, the Legislature has: (1)narrowed the scope of GMHB review by excluding GMA internal consistency and SEPA as potential bases for compliance and review, and (2)prescribed a high evidentiary standard – “clear and convincing evidence.” Although the GMHB has been delegated general authority to find a state agency, county, or city either “in compliance” or “not in compliance” with the requirements of the GMA or Chapter 90.58 as it relates to the adoption or amendment of shoreline master programs, that general review authority has been circumscribed by the specific provisions of RCW90.58.190(2)(c) for appeals concerning a Shoreline of Statewide Significance. In contract, for appeals concerning Shorelines, the GMHB has been delegated broader review authority that includes GMA internal consistency and SEPA compliance.

59. GMHB must accord deference to local governments’ planning decisions on appeal of an SMP or SMP amendment. The Board is directed to find compliance unless it determines that the action was “clearly erroneous.” RCW 36.70A.320(3). RCW 90.58.190(2)(c) similarly directs, “[i]f the appeal to the growth management hearings board concerns a shoreline of statewide significance, the board shall uphold the decision, by the department unless the board, by clear and convincing evidence, determines that the decision of the department is inconsistent with the policy of RCW 90.58.020 and the applicable guidelines.” (Emphasis added). The Board shall not find the decisions on appeal to be clearly erroneous unless it is “left with a definite and firm conviction that a mistake has been made.” City of Arlington v. CPSGMHB, 162 Wn.2d 768, 778, 193 P.3d 1077 (2008).

60. “On the Record.” No new evidence allowed. Must designate to the Board the materials to be considered. Very time consuming to select hearing exhibits.
Per RCW 36.70A.172(2), GMHB allowed to retain expert to assist in reviewing a petition that involves critical areas.

61. Standards for Review of the appeal to the Superior Court under Administrative Procedures Act (APA):
(a) The order, or the statute or rule on which the order is based, is in violation of constitutional provisions on its face or as applied; (b) The order is outside the statutory authority or jurisdiction of the agency conferred by any provision of law;
(c) The agency has engaged in unlawful procedure or decision-making process, or has failed to follow a prescribed procedure;
(d) The agency has erroneously interpreted or applied the law;
(e) The order is not supported by evidence that is substantial when viewed in light of the whole record before the court, which includes the agency record for judicial review, supplemented by any additional evidence received by the court under this chapter;
(f) The agency has not decided all issues requiring resolution by the agency;
(g) A motion for disqualification under RCW 34.05.425 or 34.12.050 was made and was improperly denied or, if no motion was made, facts are shown to support the grant of such a motion that were not known and were not reasonably discoverable by the challenging party at the appropriate time for making such a motion;
(h) The order is inconsistent with a rule of the agency unless the agency explains the inconsistency by stating facts and reasons to demonstrate a rational basis for inconsistency; or
(i) The order is arbitrary or capricious.
RCW 34.05.570(3)

62. The GMHB does not have authority to determine constitutional questions.
Can file a Declaratory Judgment Action contesting a new SMP on constitutional grounds in the Superior Court.
Best practice: File Declaratory Judgment Action within twenty-one (21) days of effective date of new SMP.

63. Challenge SMP adoption action as rule-making?
An approved local Master Program becomes part of the State Master Program adopted by reference and made part of the Washington Administrative Code. WAC Chapter 173-19. See WAC 173-26-050; 030. Thus, why is approval of an SMP not rule-making under the Administrative Procedures Act?
Advantage: RCW 34.05.570(2)(c)
Procedurally, the APA requires a regulatory agency to issue rational regulations developed through a reasoned process, utilizing correct scientific factors while eschewing incorrect ones. Neah Bay Chamber of Commerce v. Dept. of Fisheries, 119 Wn.2d 464, 473-74, 832 P.2d 1310 (1992). Accordingly, under a new APA, a court should overturn a regulation that “could not conceivably have been the product of a rational decision-maker.”

64. Direct Review to the Superior Court is possible if all parties agree
(RCW 36.70A.295).
Agreement required within ten (10) days after a Petition for Review is filed with the Board.

65. A. Challenge of the State Guidelines as inconsistent with the SMA.
B. Writ of Mandamus to compel County Assessor to implement RCW 90.58.290, which states: “The restrictions imposed by this chapter shall be considered by the county assessor in establishing the fair market value of the property.”
C. Class action for damages caused by undue restrictions.