SACRAMENTO COUNTY BOARD OF SUPERVISORS v. CITRUS HEIGHTS INCORPORATION PROJECT (1991)

INTRODUCTION

In the northern portion of urbanized Sacramento County lies a stretch of suburbs mostly east of Interstate 80 and mostly north of Greenback Lane popularly known as Citrus Heights.   In the words of the Sacramento County Local Agency Formation Commission (LAFCO), Citrus Heights is “a component in the aggregate of unincorporated suburban areas which are administered by Sacramento County.”   In 1986 the approximate 69,000 (as of 1985) residents of this area breathed deep of the intoxicating aroma of self-determination and sought to incorporate as Sacramento County's fifth current municipality and first new city in two generations, thereby joining Sacramento (1850), Isleton (1923), Folsom (1946), and Galt (1946).¹  Forming the Citrus Heights Incorporation Project (CHIP) to “chip” themselves out of the suburban aggregate, they ultimately received the approval of LAFCO—in the form of Resolution No. 962B—on March 28, 1988, to hold an incorporation election.   As CHIP sees it, “Citrus Heights always has been and will continue to be a cash cow;  the County simply wants all of the milk.”   In the view of the Sacramento County Board of Supervisors (Supervisors) and other interested parties, the incorporation proposal would radically alter the delivery of municipal services, the collection of tax revenue, and land-use planning and consequently would devastate the remaining unincorporated areas left out of the new city.   This appeal involves the legal challenges launched against the efforts of CHIP to incorporate the new City of Citrus Heights.

Concerned about the impact this incorporation would have on the remaining 489,000 or so (as of 1986) residents of unincorporated Sacramento County, the Supervisors, the Sacramento County Deputy Sheriffs' Association (Deputies), and Sacramentans to Save our Services (SSOS) filed a petition for a writ of mandate seeking to command LAFCO to vacate its resolution.   Combined with this petition was a complaint seeking a declaration that Resolution No. 962B was invalid;  a declaration that the election provisions of the Cortese–Knox Local Government Reorganization Act of 1985 (Cortese–Knox Act)—the statutes governing municipal incorporations (Gov.Code, § 56000 et seq.)—violate the guarantees of equal protection;  and injunctive relief against the use of a “negative declaration” ² in connection with Resolution No. 962B.

In the aspects of its ruling relevant to this appeal, the trial court found the petitioners' challenge timely, issued a writ of mandate which both vacated LAFCO's adoption of the negative declaration and stayed any further incorporation activities in connection with Resolution No. 962B until LAFCO prepared an environmental impact report (EIR), and issued a declaration denying the constitutional challenge to the Cortese–Knox Act.   The court subsequently awarded attorney's fees to CHIP in the amount of approximately $28,000 pursuant to Code of Civil Procedure section 1021.5.

Both sides appealed.   To be more specific, the Supervisors have made a limited appeal, challenging only the declaration that the Cortese–Knox Act is constitutional as applied and the award of attorney's fees, an appeal in which CHIP takes the lead as respondent.   LAFCO has cross-appealed, challenging the timeliness of the writ petition and the merits of the trial court's decision that it could not proceed by way of a negative declaration;  the Supervisors are joined as respondents by the Deputies and SSOS.

In our view, the most logical manner of proceeding is to examine in turn the timeliness of the writ petition, the merits of the writ's direction to prepare an EIR, the denial of the Supervisors' additional prayer for declaratory relief on the constitutionality of the proposed incorporation, and the propriety of the award of attorney's fees.   After that examination, we find ourselves in agreement with the trial court's resolution of these issues except for the constitutionality of the Cortese–Knox Act as applied and the concomitant award of attorney's fees.   On those questions we conclude that the Cortese–Knox Act is unconstitutional as applied here because the equal protection clause requires all residents of the unincorporated areas of the county, and not just the residents of the proposed city, to be accorded the right to vote on the issue of incorporation.   This determination necessarily invalidates the award of attorney's fees to CHIP because it can no longer be deemed the prevailing party.   Accordingly, we partially reverse the judgment and affirm the balance.

For ease of comprehension, we shall omit a separate, introductory statement of facts.   Instead, we will incorporate into each section of the discussion the facts relevant to that contention.

DISCUSSION

IStatute of LimitationsA.

The facts of relevance to the statute of limitations naturally are primarily procedural.   We will consequently skip any overview of the substantive legal scheme underlying the following actions.

In April 1986 CHIP filed with LAFCO ³ its notice of intent to circulate a petition to incorporate Citrus Heights.   In November 1986, the Registrar of Voters and LAFCO certified that CHIP had collected a sufficient number (8,848) of valid signatures to qualify the petition.   Following the preparation of a formal initial study by its staff, LAFCO filed a notice in February 1987 of its intent to issue a negative declaration “indicating that significant environmental effects will not occur,” and requested comments from “[a]ny agency, organization or individual that wishes to provide information to support or dispute the preliminary determination․”  No opposition to the intended action was forthcoming.   LAFCO issued the negative declaration and supporting initial study in March 1987.   LAFCO then commenced a series of public hearings on the proposed incorporation.   In May 1987, the commission members voted unanimously to adopt the negative declaration and approved Resolution No. 960 setting forth the incorporation proposal.

The Supervisors, the Deputies, and SSOS all filed requests for reconsideration of Resolution No. 960 in terms of the boundaries of the proposed city and the failure to prepare a report detailing the environmental impact of the incorporation.   LAFCO held public hearings on the requests for reconsideration.   In July 1987, it adopted Resolution No. 962 which excluded two shopping centers from the originally proposed boundaries of the city-to-be (which would reduce the sales tax impact of incorporation on the county by half) and made provision for a phase-in of property and sales tax transfers to the new city;  Resolution No. 962 also formally certified the negative declaration.   LAFCO then filed a notice of its determination to file a negative declaration.

The Supervisors received Resolution No. 962 for them to fulfill their ministerial duty under the Cortese–Knox Act, i.e., to enact the resolution subject to the confirmation of voters unless a majority of affected voters filed written protests.  (Gov.Code, §§ 57077, subd. (a), 57078.)   In September 1987, they opened a hearing on the matter for receipt of any written protests which continued from time to time until November.

On November 30, LAFCO adopted what it termed a “clerical” amendment to Resolution No. 962 to “avoid confusion” about the division of property tax between the new city and the county.   It was the view of LAFCO that the miswording could lead to an interpretation that the new city would be entitled immediately to the full amount of property tax, rather than the phase-in which had been negotiated with the Supervisors.   The amendment was termed “resolution 962A,” and concluded “except as specifically amended herein, [Resolution No. 962] shall remain in full force and effect.”

The Deputies and SSOS filed requests for reconsideration, stating they felt Resolution No. 962A could be successfully challenged, after which the language of Resolution No. 962 would be used to exact more money for the new city than actually agreed.   Meeting that same day, LAFCO decided Resolution No. 962A was a mere correction which did not afford a new opportunity to file reconsideration requests, so it denied the requests and reconfirmed Resolution No. 962A.

On December 8, the Supervisors declined to take action on Resolution No. 962 or Resolution No. 962A.   Instead, they adopted a resolution on December 15 requesting LAFCO reconsider Resolution Nos. 962 and 962A.   Among the contents of the resolution were a request for the preparation of an environmental impact report in connection with the incorporation proposal and a request for a determination by LAFCO of the constitutionality of the Cortese–Knox Act.  (But see Cal. Const., art. III, § 3.5.)

The incorporation proponents filed suit, challenging the failure of the Supervisors to enact Resolution Nos. 962 and 962A (Sacramento County Superior Court No. 357532).   The court ruled the requests for reconsideration were timely filed because Resolution No. 962A was a substantive, indeed “essential,” alteration.   LAFCO then scheduled public meetings in February and March 1988.   Prior to the meetings, LAFCO staff made a preliminary determination there was “no compelling evidence on this record to alter the original decision to issue a Negative Declaration.”   Following the meetings, LAFCO adopted Resolution No. 962B on March 28, 1988, which adopted in part and denied in part the reconsideration requests;  at the same time, LAFCO also adopted Resolution No. 983, which declared there was no basis for a new CEQA document and readopted the original negative declaration.   On March 30, LAFCO filed a new notice of determination of its intent to file a negative declaration and transmitted the incorporation resolution to the Supervisors for action.   The Supervisors, the Deputies, and SSOS filed the instant petition/complaint on April 28.

B.

 The parties do not dispute the statute of limitations involved here.⁴  “Any action or proceeding alleging that a public agency has improperly determined whether a project may have a significant effect on the environment shall be commenced within 30 days after the filing of the notice required by subdivision (a) of Section 21108 or subdivision (a) of Section 21152.”  (Pub.Resources Code, § 21167, subd. (b).)  As we held in Committee for a Progressive Gilroy v. State Water Resources Control Bd. (1987) 192 Cal.App.3d 847, 860–861, 237 Cal.Rptr. 723 (Progressive Gilroy ), “when a petitioner seeks review of a decision of a public agency on both CEQA and non-CEQA grounds, the petition must be timely filed for each claim.   If not timely filed, the petitioner is foreclosed from obtaining review of those claims which are time barred․  [W]hen CEQA claims are joined with other grounds ․, the CEQA statute of limitation applies to the CEQA claims and not the ordinary limitation period generally applicable to judicial review of [an] agency's decisions.”   Thus, this 30–day statute of limitations applies only to that part of the Supervisors' pleading which challenged LAFCO's exercise of its duties under CEQA.

LAFCO argues this part of the action is time-barred under the 30–day statute of limitations.   In its view, Resolution No. 962 constituted the project approval which triggered the limitations period in July 1987, running out 30 days later in August 1987.   LAFCO thus characterizes the effect of the reconsideration efforts of the Supervisors as an attempt to obtain a “subsequent or supplemental [EIR],” which is required only where “[s]ubstantial changes are proposed in the project,” “[s]ubstantial changes occur with respect to the circumstances under which the project is being undertaken,” or “[n]ew information, which was not known and could not have been known at the time the [EIR] was certified as complete, becomes available.”  (Pub.Resources Code, § 21166;  see also Cal.Code Regs., tit. 14, § 15162 [CEQA Guidelines].) ⁵  It claims the Supervisors failed to satisfy any of these standards for supplemental/subsequent EIRs.

The Supervisors argue, on the other hand, that the enactment of the new resolution, Resolution No. 962B, caused the statute of limitations to run anew because of the reincorporation of the original negative declaration.   The trial court accepted this argument:  “the Court finds that it was the 962–B resolution which commenced the statute running, and that also adopted the negative declaration from the outset and, really, ab initio.”

 As a prelude to deciding between these conflicting views, we first dispatch LAFCO's assertion that courts must strictly construe CEQA's statute of limitations.   None of the three cases it cites as purportedly standing for this proposition—Progressive Gilroy, supra, 192 Cal.App.3d 847, 237 Cal.Rptr. 723;  California Manufacturers Assn. v. Industrial Welfare Com. (1980) 109 Cal.App.3d 95, 167 Cal.Rptr. 203;  and Lee v. Lost Hills Water Dist. (1978) 78 Cal.App.3d 630, 144 Cal.Rptr. 510—actually contain holdings to this effect.   While Lee may state, “By the express terms of Public Resources Code section 21167, subdivision (b) the filing of the notice of determination triggered the commencement of the 30–day period of limitations” (78 Cal.App.3d at p. 634, 144 Cal.Rptr. 510 [emphasis supplied] ), this is hardly a clarion call for a narrow “reading” of the limitations statute, since there was nothing to interpret.   Neither is the statement in California Manufacturers Assn. that the litigant's argument “flies in the face of the clear language of the statute[ ] [Pub.Resources Code, § 21167].”  (109 Cal.App.3d at p. 125, 167 Cal.Rptr. 203 [emphasis supplied].)   In fact, our decision in Progressive Gilroy is to the contrary;  the sole rule of statutory construction we invoked was the canon that a general provision is controlled by one that is special.  (192 Cal.App.3d at p. 859, 237 Cal.Rptr. 723.)   However, we explicitly noted that we are enjoined as a matter of public policy to afford the fullest possible protection to the environment within the reasonable scope of the statutory language.  (Id. at p. 860, 237 Cal.Rptr. 723 [citing Friends of Mammoth v. Board of Supervisors (1972) 8 Cal.3d 247, 259, 104 Cal.Rptr. 761, 502 P.2d 1049].)   Thus, if anything, we are to interpret this limitations period (if indeed we are called upon to do so) in a broad manner if it would help to protect the environment more fully.

We return to the words of the statute.   As we have noted, the 30–day period in this case is triggered by “the filing of the notice required by Public Resources Code section 21152, subdivision (a).”  (Pub.Resources Code, § 21167, subd. (b).)  It cannot be denied that notice of determination for the particular incorporation proposal approved by LAFCO for the ballot, namely Resolution No. 962B, was filed 30 days before the instant action.   Under the plain words of the statutes, then, the Supervisors' challenge was timely.   We held as much in El Dorado Union High School Dist. v. City of Placerville (1983) 144 Cal.App.3d 123, 192 Cal.Rptr. 480:  “If the public agency files more than one notice of determination, we perceive that CEQA permits suits challenging the agency's action filed within 30 days of the last notice.”   (Id. at p. 130, 192 Cal.Rptr. 480.)   Thus, it is LAFCO and not the Supervisors that must resort to extratextual considerations.

 First, LAFCO resorts to another section of CEQA.   The statute cross-referenced by Public Resources Code section 21167, subdivision (b) states, “Whenever a local agency approves ․ a project which is subject to this division, it shall file notice of the approval ․ within five working days ․ with the county clerk of the county ․ in which the project will be located.   The notice shall indicate the determination of the local agency whether the project will, or will not, have a significant effect on the environment and shall indicate whether an [EIR] has been prepared․”  (Pub.Resources Code, § 21152, subd. (a).)  To quote the heart of LAFCO's argument, “LAFCO's actions on March 28, 1988, were merely a reapproval and refinement of Resolution 962 for the [p]roject originally approved on July 6, 1987.”   LAFCO then attempts to analogize to the holding of Progressive Gilroy,⁶ in which we held that where an unchallenged EIR set a range for discharge of effluvia from a facility, subsequent approvals of permits adjusting the amount of discharge within the range initially assessed did not constitute separate “projects” for which a determination of potential significant environmental effects needed to be made.  (192 Cal.App.3d at p. 863, 237 Cal.Rptr. 723.)   The analogy, however, is not apt.   In Progressive Gilroy, the limits of the project—and the potential environmental effects within those limits—had been finally determined;  the subsequent permits merely executed the previously approved levels.   Here, by contrast, no project had been finally determined in its entirety before Resolution No. 962B.   Resolution No. 960 was one proposal for the incorporation of the new city;  Resolution No. 962 was another, which changed the boundaries but did not enact the proper property tax agreement.   Each proposal was independent.   It does not matter that the differences might have been de minimis.   Resolution No. 962B is not a mere addendum to Resolution No. 962, but is rather a complete resolution (which even takes the precaution of explicitly repealing earlier inconsistent resolutions).   By contrast, Resolution No. 962A, as earlier noted, explicitly stated the earlier resolution (Resolution No. 962) was still in full effect except where contrary.   Indeed, LAFCO itself states in its opening brief that “[u]nder the Cortese–Knox Act, Resolution 962B supersedes the previously approved resolution.”  (See Gov.Code, § 56857, subd. (g) [“If the commission approves the [reconsideration] request ․, the commission shall adopt a resolution ․ which shall supersede the resolution previously issued.”].) ⁷  As noted in the CEQA Guidelines (§ 15352, subd. (a)), “ ‘[a]pproval’ means the decision by a public agency which commits the agency to a definite course of action in regard to a project․”  The definitive course of action with respect to the incorporation is set by Resolution No. 962B.   And regardless of whether we look at the former or current version of Government Code section 56857, the determinations by the commission are not described in that statute as “final and conclusive” until after a request for reconsideration has been considered.   As Resolution No. 962B was the only resolution with the correct boundaries and property tax agreement, its approval started a new CEQA limitations period for challenging the new negative declaration.   Consequently we need not consider LAFCO's arguments regarding the lack of any basis for a “supplemental” or “subsequent” EIR pursuant to Public Resources Code section 21166 since they are now extraneous.   Thus, we have no occasion to address the recent decision in Benton v. Board of Supervisors (1991) 226 Cal.App.3d 1467, 277 Cal.Rptr. 481, cited at oral argument.

Under the Cortese–Knox Act, any person or affected agency may file a timely written request for reconsideration of any resolution adopted by a local agency formation commission which makes determinations.  (Gov.Code, § 56857, subd. (a).)  “If the commission approves the request, with or without amendment, wholly, partially, or conditionally, the commission shall adopt a resolution making determinations which shall supersede the resolution previously made.”  (Gov.Code, § 56857, subd. (g).)  In light of these provisions, LAFCO resorts to a fallback argument, claiming “public policy” precludes giving effect to the express language of the limitations statute, because if a request for reconsideration is granted and thereby reopens the period for challenging an earlier negative declaration, this will induce LAFCOs throughout the state to deny reconsideration requests rather than risk undoing the finality of their negative declarations.   It further claims this will also induce challengers to file spurious reconsideration requests in hopes of gaining a second chance at challenging the negative declarations.   We need not fear this Hobbesian state of nature will reign as a result of our conclusion, because we are confident the LAFCOs are capable of denying spurious requests for reconsideration, and mandate exists to prevent any spurious denials of reconsideration.   Moreover, the fact that some may abuse the process does not entitle us to disregard the clear statutory language.   We thus agree with the trial court that the challenge to LAFCO's decision to proceed with the incorporation by means of a negative declaration was timely.

II

Necessity of an EIR

We now reach the merits of the trial court's order directing CHIP, as the incorporation proponent, to prepare an EIR.   First, we set out the standards governing our analysis.

A.

CEQA was enacted to ensure that long-term protection of the environment is the guiding criterion in public decisions.  (Pub. Resources Code, § 21001, subd. (d).)  It “establishes the administrative procedure of an environmental impact report.   So that the environmental effect of every public agency action is assessed and evaluated, EIRs must be prepared for all ‘projects' that ‘may have a significant effect on the environment.’   (Pub.Resources Code, § 21151.)” ⁸  (City of Livermore v. Local Agency Formation Com. (1986) 184 Cal.App.3d 531, 537, 230 Cal.Rptr. 867 [citation omitted].)   In order to fulfill this objective, CEQA and its guidelines require that “[i]f there is a possibility that the project may have a significant effect [on the environment], the agency [must undertake] an initial threshold study;  if that study demonstrates that the project will not have a significant effect, the agency may so declare in a brief Negative Declaration.   If the project is one which may have a significant effect on the environment, an EIR is required.”  (No Oil, Inc. v. City of Los Angeles (1974) 13 Cal.3d 68, 74, 118 Cal.Rptr. 34, 529 P.2d 66 [citations and internal quotation marks deleted].) ⁹  Under CEQA, a “significant effect on the environment” is “a substantial, or potentially substantial, adverse change in the environment.”  (Pub. Resources Code, § 21068.)   The CEQA Guidelines build upon this, stating such an effect is “a substantial, or potentially substantial, adverse change in any of the physical conditions within the area affected by the project including land, air, water, minerals, flora, fauna, ambient noise, and objects of historic or aesthetic significance.”   The guidelines exclude economic and social changes from this definition, but such changes are permitted to be considered either as a measure of the significance of the physical effect or as a part of a causal chain between the project approval and a physical effect.  (CEQA Guidelines, §§ 15382;  15064, subd. (f).)

 Where, as here, the decision by the public agency to issue a negative declaration is made as the result of a proceeding which did not require an evidentiary hearing, a court's review extends only to whether there was a prejudicial abuse of discretion.   Such an abuse is established where the agency did not proceed in a manner required by law or where the determination is not supported by substantial evidence.¹⁰  (Pub.Resources Code, § 21168.5.)   Since the decision to adopt a negative declaration terminates any further considerations of environmental effects, CEQA has a low threshold for triggering the duty to prepare an EIR.   Thus, an EIR must be prepared where it is “fairly arguable” that a significant effect will occur.  (Citizen Action to Serve All Students v. Thornley (1990) 222 Cal.App.3d 748, 754, 272 Cal.Rptr. 83 [Citizen Action ].)   Rather like the manner of assessing evidence in a motion for new trial based on a claim the verdict is contrary to law, if the reviewing court finds there is substantial evidence in the record in support of a fair argument that there might be a significant environmental impact, it does not matter that there is also substantial evidence showing there would not be a significant impact.   In essence, the agency's determination to adopt a negative declaration can be upheld only where there is no credible evidence to the contrary.  (Ibid.;  Oro Fino, supra, 225 Cal.App.3d at p. 880, 274 Cal.Rptr. 720.) ¹¹  The court determines only whether there is a fair argument of a significant environmental impact, not whether there actually is or is not an impact.   (City of Livermore, supra, 184 Cal.App.3d at p. 541, 230 Cal.Rptr. 867.)

 In cases involving reorganization of local government or rezoning, it must be shown initially that the approval of the project will have real consequences.   This standard has been described as asking whether the decision will act as a catalyst for additional development (City of Antioch v. City Council (1986) 187 Cal.App.3d 1325, 1337, 232 Cal.Rptr. 507), or is a “necessary first step” toward bringing plans into fruition (Christward Ministry v. Superior Court (1986) 184 Cal.App.3d 180, 195, 228 Cal.Rptr. 868), or is a commitment to a change in use (City of Carmel-by-the-Sea v. Board of Supervisors (1986) 183 Cal.App.3d 229, 243–244, 227 Cal.Rptr. 899).   In contrast, where the consequences of the project are purely speculative—“the case of a rancher who feels that his cattle would chew their cuds more contentedly in an incorporated pasture” (Bozung, supra, (1975) 13 Cal.3d at p. 281, 118 Cal.Rptr. 249, 529 P.2d 1017)—then there are no effects with which to be concerned.  (Perley v. Board of Supervisors (1982) 137 Cal.App.3d 424, 434, fn. 6, 187 Cal.Rptr. 53 [mine operator's mere hope of being successful enough to expand operations someday not sufficiently concrete;  operations of mine otherwise consistent with current land use].)

With respect to standards for the evaluation of evidence in the administrative record, those articulated in other appellate decisions are, of necessity, fact-specific.   Nevertheless, certain principles may be gleaned from cases considering the propriety of negative declarations—

 1. Conformity with the general plan for an area does not insulate a project from EIR review.  (Oro Fino, supra, 225 Cal.App.3d at pp. 881–882, 274 Cal.Rptr. 720.)   The comparison is between the possible effects of the project and the actual physical conditions of the area.  (Christward Ministry, supra, 184 Cal.App.3d at pp. 190–191, 228 Cal.Rptr. 868;  Environmental Planning & Information Council v. County of El Dorado (1982) 131 Cal.App.3d 350, 354, 182 Cal.Rptr. 317.)

 2. The relevant personal observations of citizens are evidence.  (Oro Fino, supra, 225 Cal.App.3d at p. 882, 274 Cal.Rptr. 720.)   However, mere concern or subjective speculation having no objective basis is not.  (Id. at pp. 882, 884, 274 Cal.Rptr. 720;  Leonoff, supra, 222 Cal.App.3d at p. 1348, 272 Cal.Rptr. 372;  Citizen Action, supra, 222 Cal.App.3d at p. 756, 272 Cal.Rptr. 83;  cf.  Perley, supra, 137 Cal.App.3d at pp. 436–437, 187 Cal.Rptr. 53.)   The fact that experts may conflict in their testimony is not a basis for finding a fair argument exists, except in marginal cases where it is not clear whether there is substantial evidence of a significant effect on the environment.  (Citizen Action, supra, 222 Cal.App.3d at p. 755, 272 Cal.Rptr. 83;  CEQA Guidelines, § 15064, subd. (h)(2).)   Whether expert or lay, the evaluation of the credibility of witness testimony is, of course, for the agency to determine, and it may reject any testimony for bias.   However, it is not entitled to ignore uncontroverted testimony based on objective data.  (Oro Fino, supra, 225 Cal.App.3d at p. 882, 274 Cal.Rptr. 720;  Leonoff, supra, 222 Cal.App.3d at p. 1349, 272 Cal.Rptr. 372;  Citizens Assn. for Sensible Development of Bishop Area v. County of Inyo (1985) 172 Cal.App.3d 151, 173, 217 Cal.Rptr. 893 [Sensible Development of Bishop Area].)

 3. Although it may be stating the obvious, we have had to inform at least one appellant that an agency's conclusions are not evidence.  (Perley, supra, 137 Cal.App.3d at p. 435, 187 Cal.Rptr. 53.)

 4. The CEQA Guidelines indicate the existence of a “serious public controversy” over the environmental effects of a project is sufficient to deem the effects significant.  (CEQA Guidelines, § 15064, subd. (h)(1).) ¹²  However, the CEQA itself states, “The existence of public controversy over the environmental effects of a project shall not require preparation of an [EIR] if there is no substantial evidence before the agency that the project may have a significant effect on the environment.”   (Pub.Resources Code, § 21082.2.)   Thus, there must be contested facts on which the controversy is based relating to environmental effects, which should tip the agency in favor of the evidence indicating a significant effect rather than the contrary evidence.  (Leonoff, supra, 222 Cal.App.3d at pp. 1358–1359, 272 Cal.Rptr. 372 [“feelings are not facts to govern environmental decisions”];  City of South Gate v. Los Angeles Unified School Dist. (1986) 184 Cal.App.3d 1416, 1426–1427, 229 Cal.Rptr. 568;  Sensible Development of Bishop Area, supra, 172 Cal.App.3d at p. 173, 217 Cal.Rptr. 893;  cf.   Perley, supra, 137 Cal.App.3d at pp. 436–437, 187 Cal.Rptr. 53;  see Oro Fino, supra, 225 Cal.App.3d at p. 885, fn. 5, 274 Cal.Rptr. 720.)

 5. Under the CEQA Guidelines relating to the preliminary review of a project, an agency is directed to consider both the direct and indirect consequences of a project.  (CEQA Guidelines, § 15064, subd. (d).)  As earlier noted, an agency may measure the significance of a physical effect by the social and economic changes it causes and may also consider physical changes which are caused by the social and economic results of a project as though they were a result of the project itself.  (CEQA Guidelines, §§ 15382;  15064, subd. (f).)  As held in Sensible Development of Bishop Area, the net effect of these provisions requires the agency to consider the economic or social changes, although it may ultimately find them insignificant if they are unrelated to any physical changes.   Thus, in Sensible Development of Bishop Area, the agency was directed to consider whether an economic effect of the project's approval would result in physical deterioration of Bishop's downtown area.  (172 Cal.App.3d at pp. 170–171, 217 Cal.Rptr. 893;  accord Citizen Action, supra, 222 Cal.App.3d at p. 758, 272 Cal.Rptr. 83.)

 6. Finally, it is the agency's burden to gather the relevant environmental data rather than the public's.   Therefore, if the agency fails to study an area of possible environmental impact, the limited record will be held against it in the sense a fair argument can then be based on inferences from what facts are present that are not otherwise negated.  (Leonoff, supra, 222 Cal.App.3d at pp. 1348–1349, 272 Cal.Rptr. 372;  Sundstrom v. County of Mendocino (1988) 202 Cal.App.3d 296, 311, 248 Cal.Rptr. 352 [“Deficiencies in the record may actually enlarge the scope of fair argument by lending a logical plausibility to a wider range of inferences.”].)

B.

We make a prefatory comment before we look to evidence cited by the Supervisors as supporting a fair argument of significant environmental effect.¹³  LAFCO has throughout these proceedings frequently adverted to the statement of policy included by the Legislature in the Cortese–Knox Act, which in relevant part declares, “The Legislature finds and declares that a single government agency, rather than several limited purpose agencies, is in many cases better able to assess and be accountable for community service needs and financial resources and, therefore, is the best mechanism for establishing community service priorities.”  (Gov.Code, § 56001 [emphasis supplied].)   Like some amulet containing a shard of the Holy Grail, this policy statement is hoisted to ward off arguments made by the Supervisors in favor of the preparation of an EIR.   But it is “too late to argue for a grudging, miserly reading of CEQA.”  (Bozung, supra, 13 Cal.3d at p. 274, 118 Cal.Rptr. 249, 529 P.2d 1017.)   Moreover, this policy statement in the Cortese–Knox Act does not purport to say that incorporation is of such overweening importance that all other concerns are swept aside, including possible environmental effects.   On the contrary, in a battle of these titans it is the fundamental public policy underlying the CEQA which surmounts that of the Cortese–Knox Act:  “The Legislature further finds and declares that it is the policy of the state to ․ [d]evelop and maintain a high-quality environment now and in the future, and take all action necessary to protect ․ and enhance the environmental quality of the state[,] ․ [and] [t]ake all action necessary to provide the people of this state with clean air ․ [, and e]nsure that the long-term protection of the environment ․ shall be the guiding criterion in public decisions.”  (Pub.Resources Code, § 21001 [emphasis supplied].)

 We similarly reject the policy claim that there is an inherent right to incorporate.   As has been noted, “the residents of [state] subdivisions have no federal constitutional right to self-determination.”  (See Comment, Annexation Elections and the Right to Vote (1973) 20 UCLA L.Rev. 1093, 1121–1122 [Annexation Elections].)   Nor is there any such state constitutional right.   (Golden Gate Bridge etc. Dist. v. Felt (1931) 214 Cal. 308, 320, 5 P.2d 585 [“this contention is grounded mainly upon the notion of an ‘inherent right’ of local self-government, which is contrary to the great weight of authority, and cannot be said to have been adopted in this state”].)   Thus, any so-called “right” to incorporate has no weight in the balance of our analysis under CEQA.

1.

 LAFCO's preliminary tack asserts the approval of the incorporation project is a mere governmental reorganization without any consequences.   According to LAFCO, since the area proposed for incorporation is “entirely devoted to urban uses,” there is no “known or reasonably foreseeable change in land use.” ¹⁴  Moreover, in LAFCO's view, any environmental effects are too speculative at this point and should await land-use decisions made by the proposed city's council (once that governing body comes into being) because an EIR would not be meaningful at this point.   We disagree.

The particular approval before us (and LAFCO) is the last point at which the environmental impacts of creating yet another governmental subunit of the county can be assessed.   Neither LAFCO nor anyone else can later disincorporate Citrus Heights if its birth proves to have negative environmental consequences.   For example, to chose the worst-case scenario, the new city—with the approval of its residents—might engage in a course of development wherein benefits all inure to Citrus Heights and then assert such benefits were of overriding consideration (CEQA Guidelines, § 15093;  see Resource Defense Fund v. Local Agency Formation Com. (1987) 191 Cal.App.3d 886, 897, 236 Cal.Rptr. 794) despite detrimental environmental effects being felt by the surrounding region.   Thus, there is nothing “preliminary” about preparing an EIR at this point which contemplates the possibility of extensive development before that Pandora's box is opened.  “[T]he environmental consequences of a proposed activity, whether public or private, [are to] be considered at the earliest possible stage.”  (City of Santa Ana v. City of Garden Grove (1979) 100 Cal.App.3d 521, 533, 160 Cal.Rptr. 907.)

Nor are the future consequences too “uncertain” to assess at this point.   The petitions for incorporation themselves express the intent of the incorporators to make their own decisions regarding land use;  obviously a deviation from current county policy is contemplated.   The fact that the area is currently zoned for “urban uses” does not mean there cannot be a change in the density of these urban uses.   Since no part of Sacramento County, not even the downtown of the City of Sacramento, has reached a level of urban density equivalent to the isle of Manhattan, it does not require a seer to perceive there are two possible alternatives other than the status quo, i.e., more intensive development or less intensive development than currently planned.   At one pole, a city of pastoral recycling bicyclists will have certain environmental consequences (presumably for the better);  at the other pole, a city that transforms itself from a land of subdivisions and malls to a land of high rises to challenge the City of Sacramento's role as the commercial center of the area has other consequences (e.g., Sensible Development of Bishop Area, supra, 172 Cal.App.3d at p. 170, 217 Cal.Rptr. 893).   This point of inevitable change was forcefully made by J. Laurence Mintier, an expert presented by the Supervisors.  “Incorporation will inevitably lead to changes in land use policy and changes in land use itself.   The new city must adopt its own general plan within 30 months of incorporation.   Adoption of the city's own conforming zoning and subdivision ordinances would follow.   What direction the new city might follow in its land use policy cannot be predicted.   In general, however, there are at least three possibilities:  (1) following existing County land use policies;  (2) providing for more intense development;  or (3) providing for less intense development.   There are also a number of other changes from existing policies that might be made concerning development standards, provision of affordable housing, and public facilities.   The importance of land use decision-making in the incorporation proposal suggests that simple perpetuation of existing County policies is unlikely.  [¶]  None of these potential land use policy scenarios or the potential for changes in land use policy is discussed in the initial study prepared for the incorporation proposal.   Instead, the initial study simply dismisses questions of future land use and transportation policies and impacts by stating these ‘would not be known until the City Council renders specific decisions on these issues.’   Nonetheless, they are characterized in the initial study as ‘potentially critical unknown factors.’ ”

Obviously, at this stage the extent of these possibilities cannot be measured with exactitude, but by the same token that does not entitle LAFCO to close its eyes to them.  “The fact that the environmental consequences of a rezoning may be more amorphous than those flowing from a precise development plan does not compel the conclusion that no EIR is required.   The CEQA guidelines recognize that an EIR for zoning purposes will necessarily be less detailed than one prepared for a specific construction project․  In addition, Guideline section 15152 endorses ‘tiering’ EIRs so that later EIRs at subsequent phases of a project need not repeat material contained in earlier documents.   Thus, the difficulty of assessing future impacts of a zoning ordinance does not excuse preparation of an EIR;  such difficulty only reduces the level of specificity required and shifts the focus to the secondary effects.”  (City of Carmel-by-the-Sea, supra, 183 Cal.App.3d at p. 250, 227 Cal.Rptr. 899;  accord, City of Antioch, supra, 187 Cal.App.3d at p. 1337, 232 Cal.Rptr. 507.)   These same considerations apply to the proposed incorporation of a city.

We find general support for our conclusion that an EIR at this point is not too preliminary in City of Livermore.   There, the particular LAFCO involved merely changed its guidelines for determining spheres of influence for cities (deleting a statement that urban development belongs in cities) and its guidelines for incorporations outside spheres of influence (basing them on county general plans);  no particular project was under consideration.  (184 Cal.App.3d at p. 536 & fn. 2, 230 Cal.Rptr. 867.)   Based on a consultant's report this could lead to growth outside cities and (1) the resulting deterioration of existing cities, (2) the deterioration of the cities' ability to repay bonds because of this diversion, (3) increased travel because of the increased sprawl, and (4) the possible conversion of agricultural land to other uses, the court found an EIR should be prepared.  (Id. at pp. 541–543, 230 Cal.Rptr. 867.)   These consequences are no less “speculative” than the results of approving the incorporation before us.

Finally, we note that before filing the formal initial study in February 1987, various LAFCO staff members had at least a “gut” reaction that an EIR would be necessary.   The estimate of the costs of incorporation by the county planning department stated, “Should Citrus Heights choose to incorporate, environmental documentation would be required.   Most likely, an [EIR] would be required at an approximate cost of $20,000.”   At a preliminary meeting on the incorporation proposal back in January 1987, LAFCO's executive director, John O'Farrell, told the commission, “If you were to ask my advi[c]e right now ․, I would suggest that you integrate an [EIR] into the staff report for [the incorporation] proposal․  [¶] ․  It is ultimately your decision whether or not you elect to adopt [a] negative declaration or require the ․ full [EIR].”   This viewpoint was echoed by Alcides Freitas, the coordinator of the county's environmental impact section, who was providing CEQA services to LAFCO.   Finally, a preliminary initial study that was not ultimately filed (which appeared as an exhibit to the petition/complaint) concluded “an EIR will be required for this proposal.”

Given these considerations, the approval of this incorporation is not too premature a point at which to assess possible environmental impacts.   Prematurity aside, the question remains whether proponents of an EIR have pointed to sufficient evidence in the record to make a fair argument of such impacts.

2.

 As noted, Mr. Mintier was the Supervisors' expert on air quality and traffic planning.   He remarked on the undisputed fact that the Sacramento area is currently experiencing serious traffic congestion which is projected to become much worse.   In his view, related to this problem is the Sacramento area's serious air pollution problem—the overwhelming bulk of which is produced by motor vehicles—which exceeds federal standards on an average of nineteen days per year despite the federal requirement that there be no more than one violation in a three-year period.   In response to these violations of federal air quality standards, a council of local governments developed a regional air quality plan in 1982 which outlined programs for traffic flow improvements and the reduction in quantity and length of motor vehicle trips.   The Supervisors adopted ordinances to this effect and hired a full-time transportation coordinator to oversee these programs for the unincorporated portion of the county.   A major update of the 1982 accord has already been approved by the local governments in the region.   According to Mr. Mintier, the addition of a new city to the region would delay implementation of the updated plan, a delay which would compromise the success of the plan.   And since the solution to these problems requires cooperation among local units of government, adding additional players makes achieving a consensus that much more difficult.  (See Comment, Annexation Elections, supra, 20 UCLA L.Rev. at p. 1101.)   Moreover, in the opinion of Mr. Mintier, localities tend to be more parochial in their interests than regional governments, so movement should be away from creating more local units.   The effect of this and other incorporations “will be to further balkanize the local government structure in Sacramento County, superimposing a more fragmented pattern of land use control on an already fragmented pattern of public service delivery.”

The sole response to these expressed concerns about air and traffic impacts came from Messers. O'Farrell and Freitas.   Mr. O'Farrell admitted “[air and traffic] are notable problems and that they need to be dealt with in a coordinated fashion among whatever the jurisdictions might be” because they are “an important consideration.”   Mr. Freitas stated it was his opinion no EIR was needed because he did not see a link between approving the project and the air and traffic problems, although he, too, did not dispute “that there is a need [for] adequate transportation planning and [to] include the air quality planning for every area of the County.”

Based on this evidence, the Supervisors maintain that a fair argument can be made for significant environmental impacts of incorporation.   In light of the sensitivity CEQA mandates we display to possible effects, and in light of the fact LAFCO or CHIP have failed to amass any evidence which would negate an argument of significant impacts on air and traffic, we agree.   As Mr. Mintier points out, the birth of a new city by itself creates an inconsistency with the regional air and traffic plans, which have been developed under the assumption the county would have authority over compliance in the area to be incorporated.   This inconsistency would then lead to lag time either in the implementation of the whole plan or in compliance in the area of the new city (even assuming full cooperativeness on the part of the new city council).   Either of these delays can have a significant effect on current air and traffic conditions.   Furthermore, these specific problems, when considered in connection with the alternative of denser development we have just described in the preceding section, present a most definite prospect of significant impact.   In a situation where air and traffic conditions are already unsuitable, any further degradation will undoubtedly be an addition for the worse.   And, as pointed out by one of the LAFCO commissioners, all the major arterials for the northeastern part of the county go through Citrus Heights (e.g., I–80, Business 80, Auburn Boulevard, Madison Avenue, Greenback Lane, and Sunrise Boulevard).

In reply, LAFCO, whose burden it is as appellant to point with particularity to the evidence undermining the conclusions of the trial court (cf.  Perley, supra, 137 Cal.App.3d at p. 434, 187 Cal.Rptr. 53), asserts Mr. Mintier's opinions with respect to whether regional or local governments are better at handling air and traffic problems are not binding on it.   We agree.   However, the bulk of Mr. Mintier's presentation was not opinion, but the undisputed facts regarding current air and traffic problems and the plans which have been put into effect, which LAFCO is not entitled to disregard.   LAFCO also claims the new city will be required to comply with the regional air and transportation plans.   As a short answer, we need only note that the required compliance by current government entities has not caused the problems to go away, so the fact the new city will also be required to comply does not make its possible incremental effects on the environment evanesce.

In short, the Supervisors have adduced evidence of a region with severe traffic and air quality problems, and argue the addition of a new city could have a significant adverse incremental effect through the possibility of more intensive development or the delay inherent in suddenly adding a new player to the previously developed regional plans addressing these problems.   LAFCO has neither made a sufficient counter argument nor adduced evidence to show these concerns have no basis in fact.   Indeed, we seriously question whether the initial study, with its simple checklist, even satisfies the agency's duty to supply the evidence for its conclusion that a negative declaration is appropriate (see Sensible Development of Bishop Area, supra, 172 Cal.App.3d at pp. 171–172, 217 Cal.Rptr. 893), but we need not explore this in light of our conclusion a fair argument exists.   Because a fair argument exists on this record, the trial court correctly ruled that an EIR was required.¹⁵

III

The Constitutionality of the Cortese–Knox Act as Applied

The Cortese–Knox Act ¹⁶ restricts the right to vote on the incorporation of a new city to the electors residing within the boundaries of the proposed new city.  “In any resolution ordering a change of organization or reorganization subject to the confirmation of the voters, the [county board of supervisors (see Gov.Code, § 56029, subd. (d)(1)) ] shall call an election ․ [w ]ithin the territory of each city ․ ordered to be incorporated․”  (Gov.Code, § 57103, subd. (a) [emphasis supplied].)   In their complaint for declaratory relief, the Supervisors alleged this provision of the Cortese–Knox Act, restricting any vote on incorporation to the residents of the proposed city, is unconstitutional because the class of voters consisting of the residents of the unincorporated portion of Sacramento County outside the proposed city were denied a vote on incorporation.¹⁷  In their view, unlike other unincorporated areas around the state, the unincorporated territory of Sacramento County is generally urbanized and the residents of this territory are dependent upon the County of Sacramento for many municipal services.  “The proposed incorporation,” the Supervisors argue, “would divert substantial revenues from the county to the new city, causing a significant disruption in the services provided to residents remaining in the unincorporated territory and therefore a decline in the quality of life for these residents.”   Thus, the Supervisors claim that, as applied here, the “Cortese–Knox Act creates two separate voting classes, each with a substantial interest in the incorporation election, but denies one class the right to vote in the election.   The election statute allows only those residents who will benefit from the incorporation of Citrus Heights—the ‘winners' in the incorporation process—to decide this issue.   The ‘losers' will be forced to stand on the sidelines, watching the inevitable decline of their vital municipal services, unable to influence their fate in any way.”   This division of the voters substantially affected by the proposed incorporation into two classes and then conferring the right to vote upon only one group, it is claimed, violates the equal protection clauses of the state and federal Constitutions.   The trial court rejected this argument, finding no “abridgment of the franchise by reason of an incorporation by a city.”

A.

 “Constitutionally, no election is required to determine boundary changes:  ․ [¶] However, once elections are to be held, the grant of voting rights is ‘state action’ subject to the constraints of the equal protection clause [of the federal constitution].”  (See Comment, Annexation Elections, supra, 20 UCLA L.Rev. at pp. 1105–1106 [footnote deleted].)   In the context of a case such as this, the first step of the equal protection paradigm is to determine the level of judicial scrutiny to be applied to the legislative classification at issue since this analysis subsumes within it what certain courts have described as the initial step of determining whether the various classes are “similarly situated”.  (Fullerton Joint Union High School Dist. v. State Bd. of Education (1982) 32 Cal.3d 779, 798 & fn. 19, 187 Cal.Rptr. 398, 654 P.2d 168 [Fullerton ].)   There are essentially two levels of judicial scrutiny used by both the California and federal Supreme Courts, the “rational relation” and “strict scrutiny” tests.¹⁸  In the former, the legislative classification need bear only a rational relationship to any legitimate state purpose of which the court can conceive; ¹⁹  in the latter—invoked if the classifications are among those considered “suspect” or result in the impairment of a “fundamental interest” of one of the classes—the state bears the burden of establishing the classification is necessary to achieve a compelling interest.²⁰  (Id. at pp. 798–799, 187 Cal.Rptr. 398, 654 P.2d 168.)

 The right to vote is, of course, one such fundamental interest.   (Weber v. City Council (1973) 9 Cal.3d 950, 959, 109 Cal.Rptr. 553, 513 P.2d 601;  Libertarian Party v. Eu (1978) 83 Cal.App.3d 470, 472, 147 Cal.Rptr. 888.)   While strict scrutiny is invoked only where the impairment is “real and appreciable” rather than “incidental” (Fullerton, supra, 32 Cal.3d at p. 799, 187 Cal.Rptr. 398, 654 P.2d 168;  accord Lucas v. Superior Court (1988) 203 Cal.App.3d 733, 738, 250 Cal.Rptr. 76), a classification which would result in the total disenfranchisement of an identifiable class of voters is obviously a real and appreciable impairment.   (Fullerton, supra, 32 Cal.3d at pp. 799–800, 187 Cal.Rptr. 398, 654 P.2d 168.)   Our task, then, is to identify whether a class of voters may be said to be “excluded” here.

In Fullerton and its companion case, Citizens Against Forced Annexation v. Local Agency Formation Com. (1982) 32 Cal.3d 816, 187 Cal.Rptr. 423, 654 P.2d 193 (Citizens ), the California Supreme Court established the constitutional standard against which a legislative geographic limitation on the right to vote is to be measured.   It first rejected the claim that geographic classifications triggered only the rational relation level of scrutiny.   Two cases had been cited in support of that position by the State Board of Education.   In Lockport v. Citizens for Community Action (1977) 430 U.S. 259, 97 S.Ct. 1047, 51 L.Ed.2d 313, New York law required approval of any new county charter by separate majorities of the city and noncity residents of the county.  (Id. at p. 260, 97 S.Ct. at p. 1049, 51 L.Ed.2d at p. 317.)   The high court ultimately found the two groups of residents possessed differing but substantial interests in the new charter which would rationally support the state's imposition of concurrent approval by subdivisions of the county electorate.  (Id. at pp. 271–272, 97 S.Ct. at pp. 1055–1056, 51 L.Ed.2d at pp. 324–325.)   As the Fullerton court put it, “The quoted language from Lockport makes it clear that the state can recognize that residents of different areas may have different interests and, in a single-issue referendum, can constitutionally require concurrent majorities.²¹ ¢  But nothing in Lockport endorses measures which deny the vote entirely to residents of one of the areas, nor permits such measures to escape strict judicial scrutiny.”  (Fullerton, supra, 32 Cal.3d at p. 801, 187 Cal.Rptr. 398, 654 P.2d 168.)   The other case was Holt Civic Club v. Tuscaloosa (1978) 439 U.S. 60, 99 S.Ct. 383, 58 L.Ed.2d 292.   The plaintiffs, nonmunicipal residents, had challenged the extraterritorial reach of certain municipal powers without the extension of the right to vote in the municipality.  (Id. at p. 66, 99 S.Ct. at p. 387, 58 L.Ed.2d at p. 299.)   The high court rejected the claim that the plaintiffs were denied the right to vote, since no one in the relevant geographic entity (Tuscaloosa) was denied the right to vote.   The Court thus upheld the statute's extramunicipal effect on the rational relation basis.  (Id. at pp. 70, 75, 99 S.Ct. at pp. 389, 392, 58 L.Ed.2d at pp. 301–302, 305.)   As distilled by the Fullerton court, “In our view, [Holt ] holds only that distinctions which coincide with the boundaries of the governmental entity concerned, and exclude no one physically resident within those boundaries, do not require strict scrutiny.”  (Fullerton, supra, 32 Cal.3d at p. 803, 187 Cal.Rptr. 398, 654 P.2d 168.)

This was the standard Fullerton adopted.  “[T]he constitutionally relevant boundaries” are “the geographic boundaries of the governmental entity concerned”;  any measure which does not extend the franchise to all voters within those boundaries consequently invokes strict scrutiny.  (32 Cal.3d at p. 302, 187 Cal.Rptr. 398, 654 P.2d 168 [internal quotation marks deleted];  accord Citizens, supra, 32 Cal.3d at p. 822, 187 Cal.Rptr. 423, 654 P.2d 193.)

The determination in the present case of the government entity “concerned” is far from self-evident.   In order to select the proper level of scrutiny, we must examine closely Fullerton and Citizens (on which the parties have focused) to determine whether the proposed city is the concerned entity, or whether the electoral net must be cast farther.

Fullerton involved a portion of a high school district seeking to secede and form its own high school district.   The State Board of Education had limited the vote to the portion seeking to secede.  (32 Cal.3d at p. 798, 187 Cal.Rptr. 398, 654 P.2d 168.)   The Court deemed the governmental entity concerned to be the parent district.  “The [parent district], however, is ․ the existing entity with legal authority over high school education in [the seceding area].  (Id. at p. 803, 187 Cal.Rptr. 398, 654 P.2d 168.)   The court identified two impacts secession would have on the parent district.   The parent district might “incur a substantial debt to the new [district], a debt which will have to be paid by the residents remaining in the [parent district].”   Also, “the withdrawal ․ will leave the [parent] district with excess capacity and affect its educational programs.”  (Ibid.)  Thus, the geographic limitation of the franchise to residents of the proposed new district excluded relevant voters, so it was a classification subject to strict scrutiny.  (Id. at p. 805, 187 Cal.Rptr. 398, 654 P.2d 168.)

Citizens involved unincorporated territory in the county seeking to be annexed by Rancho Palos Verdes, an existing city.   Under a precursor of Government Code section 56850, only residents of the territory were allowed to vote on the issue.   Residents of the existing city challenged this limitation.  (32 Cal.3d at pp. 821–822, 187 Cal.Rptr. 423, 654 P.2d 193.)   The Court noted that the determination of the concerned entity “raise[d] a difficult problem ․ for ․ one can plausibly argue either that the relevant entity is limited to the ․ territory [to be annexed or deannexed] whose legal status will be altered by a successful vote ․, or that it includes the [existing city]․”  (Id. at p. 822, 187 Cal.Rptr. 423, 654 P.2d 193.)   The Court resolved the boundary question in favor of finding that the government entity concerned included both the existing city and the territory to be annexed.  “Academic analysis suggests that the relevant area includes both the affected territory and the affected city․  ‘Annexing and annexed citizens clearly share general concerns with the governance and welfare of the area․  When a state has chosen to enfranchise only one of the areas affected by the annexation, it must justify the disfranchisement of the other area by a showing that it promotes some significant state interest.’ ”  (Id. at pp. 822–823, 187 Cal.Rptr. 423, 654 P.2d 193 [quoting Note, The Right to Vote in Municipal Annexations (1975) 88 Harv.L.Rev. 1571, 1578–1581 (The Right to Vote ) ].)   Framing these generalities within the context of the case before it, the Citizens court concluded, “[T]he annexation ․ at issue ․ affects not only [the] residents [of the territory], but also the present residents of the [c]ity.   That impact is ․ the effect ․ of the establishment of a legal relationship.   The residents of the affected territory will be entitled to vote in [c]ity elections and participate in [c]ity government.   The [c]ity will acquire a right to assess taxes and to enforce its ordinances and regulations in the affected territory;  it incurs also a duty to extend police protection and other municipal services to that territory.   Thus, the establishment of the legal relationship contemplated in this case, like the dissolution of a legal relationship involved in Fullerton, has a substantial effect upon the residents of both territories involved.”  (Id. at pp. 823–824, 187 Cal.Rptr. 423, 654 P.2d 193.)

Some guidance may also be drawn from Hawn v. County of Ventura (1977) 73 Cal.App.3d 1009, 141 Cal.Rptr. 111.  Hawn involved a county ordinance limiting the vote on any proposed county airport located even in part within a city to residents of the city.  (73 Cal.App.3d at pp. 1012–1013, 141 Cal.Rptr. 111.)  Hawn does not explicitly follow the Fullerton paradigm, as it only denominated unincorporated residents as an excluded “identifiable class” of voters (thus triggering strict scrutiny) without articulating why these voters had a constitutionally recognizable interest,²² and then found the asserted compelling interest (“local environmental values”) was not necessarily served by the geographic classification.  (Id. at p. 1020, 141 Cal.Rptr. 111.)   However, the Fullerton court, with apparent approval, characterized the holding as invalidating a franchise restricted to city residents when both city and noncity residents were “directly interested” (32 Cal.3d at p. 802, 187 Cal.Rptr. 398, 654 P.2d 168), which gives a further clue as to the criteria for determining the governmental entity concerned.

A case essentially parallelling Fullerton is San Dieguito Union High School Dist. v. Rosander (1985) 171 Cal.App.3d 968, 217 Cal.Rptr. 737.   An elementary school district wished to withdraw from the junior high school system offered by its parent union high school district.  (Id. at pp. 971–972, 217 Cal.Rptr. 737.)   The statute governing the withdrawal election did not specify the “district” to which the election was limited—the elementary school district, or its parent union high school district.  (Id. at pp. 973–974, 217 Cal.Rptr. 737.)   After concluding for a number of other reasons that the statute should be construed as opening the election to all residents of the parent district (id. at pp. 974–977, 217 Cal.Rptr. 737), the court also found this interpretation mandated by the Constitution.   It explained Fullerton as invalidating an election limited to one set of voters where other voters had a “substantial although different interest in the election.”  (Id. at p. 979, 217 Cal.Rptr. 737.)   Because of the financial impacts on the high school district resulting from withdrawal, all the voters in that parent district had a substantial interest, and could not constitutionally be excluded from the vote.  (Id. at pp. 979–981, 217 Cal.Rptr. 737.)

Finally, we consider the two law review pieces cited in Fullerton and Citizens.   In The Right to Vote, although the Note is predominantly concerned with the constitutionality of the many voting schemes for annexations around the nation, it also analyzes whether the area from which the to-be-annexed territory comes (the “source” area) must be included in the election.   “There may be cases, however, where the annexation's effect upon a definable source area is nearly equal to its effect upon residents of the annexing and annexed areas.   When, for example, one municipality annexes land within another, the interests of the annexing and source municipalities, although probably opposed, approach mathematical equivalence:  as one municipality's tax base, area of regulatory authority, and duty to provide services expand, the other's contract․  [I]n such intermunicipal annexation, the Constitution would require the enfranchisement of residents of the source municipality unless some [compelling] interest ․ can be advanced by the state․”  (88 Harv.L.Rev. at p. 1585 [footnotes deleted].)   While the note suggests these concerns will not generally be implicated if the source area is a county (ibid.), the note concludes, “When annexation does result in complete removal of an area from the county, ․ the annexation procedure should probably be regulated like that of intermunicipal annexation.   Similarly, the severity of regulation should increase, even when complete removal of an area is not at stake, if the county is providing relatively extensive services ․, which may be subject to disruption.”  (Id. at p. 1585, fn. 77.)

Annexation Elections is similarly focused on annexations, not incorporations.   However, in observations analogous to incorporations, it states, “When the regional impact is strong enough, residency requirements limiting voting to those on the land to be annexed may become extraneous, for in such instances they fail to delimit the group having a continuing stake in the decision․  The residents on the land to be annexed are not the only ones with a substantial interest in the election.   When tax rates, service levels, and traffic patterns may change in the city, the territory, or the county, ․ or land [can be] developed in a manner inconsistent with regional plans, those living on the land to be annexed are not the only individuals who have a substantial stake in the outcome of the election.”  (20 UCLA L.Rev. at p. 1113 & fn. 96.)

As CHIP reads these authorities, the common thread that links Fullerton with Citizens is that the establishment, or disestablishment, “of a legal relationship” determines the relevant boundaries.  (Citizens, supra, 32 Cal.3d at p. 823, 187 Cal.Rptr. 423, 654 P.2d 193.)   Thus, in Fullerton, the decision to withdraw by the new school district would have completely terminated any legal relationship with the original district.   Similarly, in Citizens, the annexation created an entirely new legal relationship between the unincorporated territory and the City of Rancho Palos Verdes.   Here, in contrast, the citizens of Citrus Heights do not seek to terminate their relationship with the County of Sacramento.   Rather, the incorporation would merely add another layer of government to that already in place within the unincorporated territory of Citrus Heights.   The proposal at issue, it emphasizes, is to incorporate a City of Citrus Heights, not a County of Citrus Heights.   Because the only new legal relationship in this case is the creation of a new city, CHIP argues the constitutionally relevant boundaries are the borders of that new city, and not the whole county.

 We think CHIP misreads these cases.   Every incorporation creates a new legal relationship between the new city, the remaining unincorporated territory and the county.   Upon its incorporation, the new city is invested with municipal power over its affairs, the unincorporated territory remains under the tutelage of the county but loses its confederacy with the new city, and the county relinquishes local control over the new city.   It is not the inevitable change of legal relationships that defines the relevant entity for voting purposes.   It is rather whether that change in boundaries and governmental relationships “has a substantial effect upon the residents of both territories involved.”  (Citizens, supra, 32 Cal.3d at p. 824, 187 Cal.Rptr. 398, 654 P.2d 193.)   Hence, it is the comparative impact of that change upon those outside the new city, and not the mere fact of a changed relationship, which sets the constitutional relevant boundaries.   So, while it is a somewhat rubbery ruler, it is a potential voter's substantial interest in the change in government by being subjected to significant effects of the change which determines whether the residency line has been drawn in such a way as to result in impermissible disenfranchisement and the consequent strict scrutiny of that line.   We must now apply this standard to the concrete context of unincorporated Sacramento County.²³

B.

 To understand why incorporation has a significant effect on the entire unincorporated area of Sacramento County, we must first look at its developmental history.   We quote from Mr. O'Farrell's “Beginning Dialogue on Incorporation,” presented to LAFCO in July 1986.  “The system of governance in the unincorporated area has evolved, for the most part, during the last 30 years.   The service pattern that resulted—County provision of many essential city-type services and a multiplicity of special districts—is not the norm for urban areas around the state nor did it occur because of happenstance.   Suburban communities did not incorporate when they reached a population threshold or level of service expectation normally associated with urban areas.   Nor did the urbanizing areas seek annexation to adjacent cities for their municipal needs.   Communities continued to rely upon the County, special districts[,] and private providers for their services because those services have always been provided at exceptionally high levels.”

The typical did not happen for two reasons.   First, “The Board of Supervisors made implicit and explicit policy decisions to continually assert its hegemony over the unincorporated area.”   As he notes elsewhere, the Supervisors did this to keep control over the area to ensure “rational” land-use patterns.   The Supervisors accomplished this “by ․ [a]llowing and encouraging independent and dependent special districts to form and function ․;  [a]ctively providing basic life-support services through the creation of sanitary-sewer and water systems in selected areas;  and ․ [r]emaining ambivalent to city annexation or incorporation.”   Second, “[r]esidents of the suburbs simply were not interested in the city form of government ․ because services have been offered at very high levels and because of the uncertainties associated with any type of major change of organization.   Therefore, an idyllic relationship was established between County government and the unincorporated area communities․  [¶]  The end result [has been] ․ the creation and maintenance of a pseudo-city of 550,000.”  (Emphasis in original.)   As Mr. O'Farrell states in a 1986 factual summary, “[T]he unincorporated area ․ contains 62% or 558,048 of the total County population.   Among urban counties statewide, it ranks first in unincorporated area population․  [¶]  The municipal services provided to the unincorporated area are of a very high standard and are comparable to the level of service received by cities of the same size and scope.   The Sheriff's and Public Works Departments may be the largest in the state and offer very sophistica[t]ed services.”   This has not been without a price.   As Mr. O'Farrell notes elsewhere, “Over the years, the County has come to rely more and more upon ․ commercial development [of the unincorporated-area] to provide significant financial support for the provision of unincorporated area services.”

In administering its authority over the unincorporated area, the Supervisors developed an accounting mechanism in the 1961–1962 budget allocating the costs of the various types of services the county provided.   According to then-County Executive Brian Richter, “Sacramento County's General Fund (Fund 001) finances Countywide services, ․ regardless of whether those residents live in a city or in the Unincorporated Area.   Most of the services financed by the General Fund are those state-mandated services actually delivered by the County such as health, welfare, and [the justice system (i.e., the courts, district attorney, public defender, and jails) ].   Both regional parks and recreation and cultural and civic activities are also financed within the General Fund.   The primary type of discretionary revenue for the General Fund is property tax.  [These] services will remain the County's responsibilities regardless of how many cities may incorporate․”  The Supervisors also established the “Unincorporated Area Services Fund (Fund 013),” which is “the financing vehicle for the delivery of many municipal services to the residents of the Unincorporated Area, including [sheriff] protection, planning and land use control, animal control, and [a percentage of the] general government [overhead].”   Fund 013 receives 87 percent of its revenues from sales tax.

That the status quo will be disrupted by this incorporation proposal cannot be disputed.   There is, of course, the loss of revenue to the county.   The proponents make quite clear in their petition that their purpose is to “capture” sales and property tax (as well as other revenues) which happen to be generated within the physical area of the proposed city for use by its residents.   And while the county will be transferring certain costs to the new city, in general the county would be giving up more revenue than it gains in cost reductions.²⁴  The parties differ only in their manner of computing the magnitude of this loss.  (See, e.g., the feasibility study of the proponents;  LAFCO's initial study;  Mr. Richter's report to the Supervisors;  and LAFCO staff's feasibility study [the amount of money the county would lose “is a key finding and indicates that the incorporation ․ could have a potentially detrimental effect on Sacramento County operations and the delivery of services to the remainder of the unincorporated area”].)

This loss can be further increased by the timing of the effective date of the incorporation, since the county must continue to provide services until the end of the fiscal year, while the new city is immediately entitled to all revenues generated within its limits.   But, for example, as the county sheriff testified at the May 1987 LAFCO hearing, a reduction of any amount would be unacceptable, since his department is already operating below the median number of deputies per resident.

In light of these facts, and based on the above admittedly meager body of case law, we conclude the governmental entity “concerned” is the entirety of the unincorporated area of the county.   In Sacramento County, the county government is acting as a de facto city government for the unincorporated area, exercising its extensive regulatory and financial authority over it.   Incorporation will disrupt this de facto legal relationship, even though the county will continue in its relationship as an agency of the state with respect to the new city.   Moreover, incorporation may have more than de minimis effects on the levels of services provided to the remaining unincorporated area residents, requiring (as in Fullerton ) stringent economies or a tax increase.  (32 Cal.3d at p. 805, 187 Cal.Rptr. 398, 654 P.2d 168.)   While the effect may not be “apocalyptic” (as CHIP puts it), Mr. Richter pointed out at the June 1987 hearing that the county has so few truly discretionary revenues that any loss must be termed significant.   Thus, no less than the remaining residents of the parent school district in Fullerton, the remaining residents of the “pseudo-city” of Sacramento County have a substantial interest in the incorporation vote because they will be significantly affected by it.   As a result, the limitation of the franchise by Government Code section 57103, subdivision (a) to only the residents of the proposed city must be subjected to strict judicial scrutiny.

C.

 This leaves the question of whether the state (as represented vicariously by CHIP) has satisfied its burden of demonstrating a particularized compelling interest in maintaining this classification.   Since the trial court never called upon the incorporation proponents to meet this burden, we are left with the sole argument in CHIP's appellate brief.   It relies on the compelling interest identified in Citizens, as permitting the incorporation vote to be limited to the territory seeking annexation despite the fact the issue affected the residents of the existing city as well.

The first interest advanced by the Los Angeles County LAFCO in Citizens was summarily rejected by the high court.   The “cost and administrative burden of an election encompassing the affected city” is by itself “generally not of compelling character.”  (32 Cal.3d at p. 825, 187 Cal.Rptr. 423, 654 P.2d 193 [citing both Comment, Annexation Elections, supra, 20 UCLA L.Rev. at pp. 1119–1120, and Note, The Right to Vote, supra, 88 Harv.L.Rev. at p. 1581].)

The second interest was the prevention of the votes of those “most” concerned with the issue (in the territory) from being overwhelmed by the much larger number of less-interested city voters.  (Citizens, supra, 32 Cal.3d at p. 824, 187 Cal.Rptr. 423, 654 P.2d 193.)   In the companion Fullerton case, the Court had rejected an argument that voters could be excluded because their self-interest might defeat the referendum:  “It is, of course, clear that the state cannot claim a compelling interest in excluding voters because of how they may vote.”  (32 Cal.3d at p. 805, 187 Cal.Rptr. 423, 654 P.2d 193;  accord Note, The Right to Vote, supra, 88 Harv.L.Rev. at pp. 1582–1583.)   However, Fullerton would allow the exclusion of “uninterested voters in order to protect the interests of persons vitally concerned” although it did not find such a situation before it.  (32 Cal.3d at p. 805, 187 Cal.Rptr. 398, 654 P.2d 168.)   In Citizens, the Court expanded upon this justification, finding that, despite the identification of a sufficient potential effect on city voters such that they constituted part of the relevant geographic entity for purposes of strict scrutiny, the relative numbers involved between the city and the territory might be such that it would be permissible to exclude an enormous number of city voters from an election involving a tiny number of territory residents because the addition of this marginal increment to the city would have no real effect;  since the governing statute made voting classifications on this basis, the Court found it acceptable.  (32 Cal.3d at pp. 825–827, 187 Cal.Rptr. 423, 654 P.2d 193.)

The Citizens court then turned to the third interest advanced in order to determine whether the state met the further hurdle of showing the classification was not only based on a compelling interest, but was necessary to achieve that compelling interest.  (32 Cal.3d at p. 827, 187 Cal.Rptr. 423, 654 P.2d 193.)   It concluded the state's interest in “promoting orderly and logical community development, and of providing municipal services to newly urbanized regions, [could not] be adequately met if city governments and their voters ha[d] a veto power over annexations․  [I]f city voters ․ have the final decision on annexation, the result might be to leave ‘orphan’ islands of unincorporated territory rejected by all neighboring cities but lacking the financial resources for self-incorporation.”   Thus, it was necessary to exclude the city voters when their numbers were such that annexation did not have a great impact on them.  (Id. at p. 829, 187 Cal.Rptr. 423, 654 P.2d 193.)

This reasoning does not apply in the Sacramento County context, essentially because here a piece may be removed from the whole rather than be accreted to a larger entity.   First, the statute does not have any weighing mechanism for balancing the “vital” interests of those seeking incorporation against voters considered “uninterested” because of the magnitude of their numbers.   While this may be acceptable in the usual county, where the pocket which is seeking incorporation will outweigh the other scattered residents (for which reason the statute is not facially unconstitutional), in Sacramento County the “suburban aggregate” is losing over 10 percent of its population.   Second, and more importantly, rather than further the state's interest in avoiding unincorporated islands, allowing sections of the unincorporated area of Sacramento County to incorporate willy-nilly without any say by the remainder of the area would, instead, lead to islands left behind, unwanted by the few areas which have a sufficient commercial base to incorporate in order to avoid loss of services.

CHIP has failed to identify a compelling interest served by the necessary means of denying the remaining unincorporated area residents a vote in the incorporation election.   The unincorporated area has developed as a single “quasi-municipal” entity, albeit with individual community identities;  CHIP cannot simply turn a blind eye to the pseudo-city which has developed since the 1950's and proceed with incorporation as though it had not been a part of it for all these years.   As a result of the actions of the Supervisors with the quiescence of the unincorporated area residents, the pseudo-city may not be dismantled without the consensus of all;  otherwise, the state's interests in sensible community development and in the provision of municipal services to as many state residents as possible will both be undermined.   Thus, the franchise must be extended to the entire unincorporated area on any incorporation proposal in Sacramento County.

IV

Attorney's Fees

In its statement of decision, the trial court upheld the constitutionality of the incorporation voting provisions of the Cortese–Knox Act.   Afterward it entered an order on the motion of CHIP for an award of attorney's fees under section 1021.5 of the Code of Civil Procedure.²⁵  The trial court ruled that CHIP was the prevailing party with respect to the constitutional issue;  that the issue was an important public right;  that private enforcement was necessary;  and that the private party did not have substantial enough an interest in enforcement of this right to be required to bear the financial burden of enforcement.   Consequently, the court awarded CHIP its reasonable attorney's fees of approximately $28,000.   The Supervisors appeal this determination.

“[Code of Civil Procedure S]ection 1021.5 is explicit statutory authority for court-awarded attorneys fees under a private attorney general theory.”   (Beach Colony II v. California Coastal Com. (1985) 166 Cal.App.3d 106, 110, 212 Cal.Rptr. 485.)   This statute represents a codification of the standards developed by the Supreme Court in Serrano v. Priest (1977) 20 Cal.3d 25, 141 Cal.Rptr. 315, 569 P.2d 1303.  (Press v. Lucky Stores, Inc. (1983) 34 Cal.3d 311, 317, 193 Cal.Rptr. 900, 667 P.2d 704.)

 The threshold question is whether CHIP was a prevailing party.  “A necessary prerequisite to recovery under Code of Civil Procedure section 1021.5 is the status of prevailing party.   While it is not necessary for [a party] to achieve a favorable final judgment to qualify for attorneys' fees ․, there must be some relief to which the plaintiff's actions are causally connected.”  (Miller v. California Com. on Status of Women (1985) 176 Cal.App.3d 454, 457–458, 222 Cal.Rptr. 225 [citation & emphasis deleted].)  “[A]n attorney fee award may be justified even when [a party's] legal action does not result in a favorable final judgment.”   (Maria P. v. Riles (1987) 43 Cal.3d 1281, 1290–1291, 240 Cal.Rptr. 872, 743 P.2d 932.)   A party may be considered prevailing if it is successful on any significant issue which achieves the party's aim.  (Hensley v. Eckerhart (1983) 461 U.S. 424, 433, 103 S.Ct. 1933, 1939, 76 L.Ed.2d 40.) ²⁶

 Since we have determined that the statute limiting the franchise to residents of the proposed city is unconstitutional as applied to Sacramento County, CHIP is no longer the prevailing party.   Given our constitutional holding, CHIP cannot meet any of the standards just recounted for determining prevalence.   We consequently must vacate the trial court's order awarding attorney's fees, and direct that the court issue an order denying the request.

DISPOSITION

That portion of the judgment declaring that the Cortese–Knox Act is constitutional and awarding attorney's fees to CHIP is reversed.   The cause is remanded to the trial court with directions to enter a declaration that equal protection requires the franchise on the issue of incorporation to be extended to all residents of the unincorporated area of the county and to enter a new and different order denying CHIP's request for attorney's fees.   In all other respects the judgment is affirmed.   The Supervisors, the Deputies, and SSOS shall recover their costs of appeal.

FOOTNOTES

1.   The former city of North Sacramento incorporated in 1924 but disincorporated in 1964 upon its merger with Sacramento.

2.   This is the name for a document filed pursuant to the California Environmental Quality Act, or CEQA (Pub. Resources Code, § 21000 et seq.), which represents that there are no significant environmental impacts from a project and that consequently no environmental impact report is required.  (Pub. Resources Code, §§ 21064, 21068.)

3.   By statute, each county is required to have a local agency formation commission, commonly referred to as LAFCO.  (Gov.Code, § 56325;  City of Ceres v. City of Modesto (1969) 274 Cal.App.2d 545, 550, 79 Cal.Rptr. 168.)   Prior to the 1963 legislation which first created LAFCOs, the various urban, social and economic interests affected by the annexation process “engaged in a kind of warfare in which the unincorporated suburbs of the state have been both the prize and the battlefield, the annexation process a tactic, the location of annexation boundaries a significant weapon, and their calculated manipulation a commonplace event.”  (Tillie Lewis Foods, Inc. v. City of Pittsburg (1975) 52 Cal.App.3d 983, 995, 124 Cal.Rptr. 698.)  “After years of failing to cope with these problems to any meaningful extent, the Legislature finally acknowledged ‘the need for a supra-local agency to intervene in boundary decisions' affecting local governments and, in 1963, established a LAFCO in each county to serve this purpose.”  (Ibid. [citations omitted].)Among the purposes of this legislation are “the discouragement of urban sprawl and the encouragement of the orderly formation and development of local agencies based upon local conditions and circumstances.”   (Gov.Code, § 56301.)   The Legislature intended therefore that each LAFCO should adopt policies which provide “planned, well-ordered, efficient urban development patterns․”  (Gov.Code, § 56300.)   Thus, LAFCOs are empowered to “review and approve or disapprove with or without amendment, wholly, partially, or conditionally, proposals for changes of organization or reorganization.”  (Gov.Code, § 56375, subd. (a).)  The incorporation of a city is a “change of organization” within the meaning of the statute.  (Gov.Code, § 56021, subd. (a).)

4.   Although filing separate briefs on this issue, the Supervisors, the Deputies, and SSOS have a unity of interest;  therefore, we will refer to them collectively as the Supervisors.

5.   Sections 15000 et seq. of this title are called the “CEQA Guidelines,” which were promulgated by the state Office of Planning and Research.  “The Guidelines state, ‘These Guidelines are binding on all public agencies in California.’  (Guidelines, § 15000.)   This court, however, has not decided the issue of whether the Guidelines are regulatory mandates or only aids to interpreting CEQA․  At a minimum, however, courts should afford great weight to the Guidelines except when a provision is clearly unauthorized or erroneous under CEQA.”  (Laurel Heights Improvement Assn. v. Regents of University of California (1988) 47 Cal.3d 376, 391, fn. 2, 253 Cal.Rptr. 426, 764 P.2d 278.)

6.   LAFCO also attempts to analogize to California Manufacturers Assn. but the analogy utterly fails.   The case held only that when challenging an alleged improper determination of environmental consequences, the statute of limitations did not depend on whether the agency's determination was valid or not (109 Cal.App.3d at p. 125, 167 Cal.Rptr. 203);  the case has absolutely nothing to do with deciding which of a series of determinations is the one triggering the statute of limitations.

7.   In its reply brief, LAFCO takes the impermissible tack of asserting a new argument, namely that the current version of this code section did not go into effect until after the adoption of Resolution No. 962B, and the prior version of the statute (see Stats.1985, ch. 541, § 3, p. 1985) had no explicit statement of the superseding effect of reconsideration.   LAFCO takes this to be a change in the law.   It is manifestly improper to raise arguments in this fashion without good cause, for which reason an appellate court is entitled to ignore them.  (Balboa Ins. Co. v. Aguirre (1983) 149 Cal.App.3d 1002, 1010, 197 Cal.Rptr. 250.)   We note, however, that if we were to entertain this contention, the change in statute could be considered either merely procedural (and thus retroactive) or declaratory of existing law, particularly since the Legislature expressly eschewed any statement “regarding pending litigation” (see Stats.1988, ch. 826, § 7).

8.   A “project” is statutorily defined to mean the following:  “(a) Activities directly undertaken by any public agency.  [¶]  (b) Activities undertaken by a person which are supported in whole or in part through contracts, grants, subsidies, loans, or other forms of assistance from one or more public agencies.  [¶]  (c) Activities involving the issuance to a person of a lease, permit, license, certificate, or other entitlement for use by one or more public agencies.”  (Pub. Resources Code, § 21065.)   In Bozung v. Local Agency Formation Com. (1975) 13 Cal.3d 263, 279, 118 Cal.Rptr. 249, 529 P.2d 1017, the high court held “that a LAFCO approval of a city annexation is a project within the meaning of subdivisions (a) and (c) of section 21065.”   By analogy, an incorporation of a new city is similarly a project within the meaning of CEQA.   Accordingly, the project in this case is the proposed incorporation of Citrus Heights.   Indeed, LAFCO does not dispute that it is a “public agency” (Pub.Resources Code, § 21063) or that the incorporation resolution constitutes a “project” under CEQA.

9.   If a project falls within a category exempted by administrative regulation or if it can be seen with certainty that there is no possibility that the activity in question has a significant effect on the environment, the agency need not even undertake the initial study.  (Oro Fino Gold Mining Corp. v. County of El Dorado (1990) 225 Cal.App.3d 872, 881, 274 Cal.Rptr. 720 [Oro Fino ].)   LAFCO does not invoke this branch of the decision tree.

10.   The proceedings leading to the issuance of a negative declaration first contemplate a preliminary review of the environmental aspects of the project by the lead agency.  (CEQA Guidelines, § 15060.)   Following that review, the lead agency then conducts a initial study to determine if the project may have a significant effect on the environment.  (CEQA Guidelines, § 15063.)   In this process, the lead agency is directed to consult with responsible agencies and other public agencies.  (Pub.Resources Code, § 21080.3.)   Although this review and study process by the lead agency results in the collection of much evidentiary writings and materials, it is not one “in which by law a hearing is required to be given, evidence is required to be taken and discretion in the determination of facts is vested in a public agency.”   (Pub.Resources Code, § 21168.)   Consequently, review of LAFCO's decision to issue a negative declaration is governed by Public Resources Code section 21168.5 and not by section 21168 of that code.

11.   LAFCO is incorrect in citing the less exacting standard applied in Laurel Heights Improvement Assn., supra, 47 Cal.3d at pp. 392–393, 253 Cal.Rptr. 426, 764 P.2d 278, to the sufficiency of an EIR (where a court applies the deferential substantial evidence standard to the agency's findings).   Where our role is to ensure that an agency has not abjured its legal duty to discern significant environmental impacts, deference to its conclusion is not appropriate.  (Leonoff v. Monterey County Bd. of Supervisors (1990) 222 Cal.App.3d 1337, 1347, 272 Cal.Rptr. 372.)

12.   This CEQA Guideline also explicitly states controversy unrelated to an environmental issue “does not require preparation of an EIR.”

13.   Although its conclusion is not binding on this court (Long Beach Sav. & Loan Assn. v. Long Beach Redevelopment Agency (1986) 188 Cal.App.3d 249, 260, 232 Cal.Rptr. 772), we note the ruling of the trial court.  “I think there was evidence in this record ․ that shows some potential for serious and significant environmental impacts f[rom] the incorporation of the City of Citrus Heights.   And that may involve a number of areas adverted to by the experts and by the testimony on the record.  [¶]  The Court is satisfied there may be grave and significant impacts upon air quality, on traffic control, on a lot of other things that [a]ffect the quality of the lives, of the assistance of our entire county, and, indeed, of the entire region.”

14.   To augment its assertion that incorporation would have no effect on the environment, LAFCO cites Government Code sections 57376 and 65360, claiming the new city would be required to maintain the existing land-use regulations for 30 months.   We do not so read the statutes.   Although these statutes have no direct bearing here, the former in essence requires a new city to enact an ordinance continuing all county ordinances for 120 days or until the city enacts superseding ordinances, whichever occurs first;  the latter gives a new city 30 months to comply with the requirement that a general plan be in effect, but does not require the city to wait 30 months to do so.   Conceivably, the new city council could enact a radically different land-use plan at its first meeting.

15.   Having identified one fair argument of a significant effect and the consequent invalidity of issuing a negative declaration, we need go no farther with the Supervisors' CEQA contentions.   The guidelines mandate the nature of the contents of the EIR to be issued (see CEQA Guidelines, §§ 15120–15132), so anything else this court would have to say with respect to possible impacts would be purely advisory.   We therefore need not resolve them in this opinion.

16.   This act consolidated the three major laws governing boundary changes by California's local governments into a single, unified law.   As the court recounted in Fallbrook Sanitary Dist. v. San Diego Local Agency Formation Com. (1989) 208 Cal.App.3d 753, 758, 256 Cal.Rptr. 590, “In 1985, the Legislature repealed the Knox–Nisbet Act (former § 54773 et seq.), the District Reorganization Act of 1965 (former § 56000 et seq.) and the Municipal Organization Act of 1977 (former § 35000 et seq.), and replaced these laws with the Cortese–Knox Act․).  (Stats.1985, ch. 541, § 3, p. 1920.)   The provisions of the new act, commencing with section 56000 became operative January 1, 1986.  (Ibid.)”

17.   The Supervisors' complaint is not explicit as to whether their constitutional attack is facial or as applied.   However, their evidence in the administrative record (which we will subsequently recount) and their brief below focused on the unique character of Sacramento County with respect to municipal incorporations.  (E.g., “Petitioners submit that [the trial court] is compelled to find that, in view of the demonstrated effect upon the entire unincorporated area ․, the failure of the Legislature to make any effort to ․ balance the interests ․ renders the present statutory scheme [unconstitutional]” [emphasis added];  “As Petitioners indicated in their Opening Brief, it is not contended that every incorporation implicates equal protection concerns so as to require the broader franchise in the unincorporated area from which the incorporators wish to secede.”  [Emphasis in original].)   At oral argument, counsel for the Supervisors purported to characterize their action as a facial challenge, even while conceding again that not every incorporation would require a broader franchise than provided by the Knox–Cortese Act.   But a “statute is invalid on its face and wholly void only when incapable of any valid application․  A [facial] challenge to a statute's constitutionality must demonstrate that its provisions inevitably pose a present total and fatal conflict with applicable constitutional prohibitions.   The corollary to the challenger's burden is that if the court can conceive of a situation in which the statute can be applied without entailing an inevitable collision with constitutional provisions, the statute will prevail.   A statute is not facially unconstitutional simply because it may not be constitutionally applied to some persons or circumstances;  ․”  (Mounts v. Uyeda (1991) 227 Cal.App.3d 111, 121–122, 277 Cal.Rptr. 730, citations omitted.)   Given these impediments to a facial challenge, we do not accept counsel's characterization and instead adhere to the substance of the challenge.   As we have said, “A law may be unconstitutional in its application to a particular case, yet valid in its general application, especially where, as here, it is apparent that the Legislature would want the act to prevail where it constitutionally may.”   (Stork v. State of California (1976) 62 Cal.App.3d 465, 473, 133 Cal.Rptr. 207;  accord People v. Bradford (1976) 17 Cal.3d 8, 21, 130 Cal.Rptr. 129, 549 P.2d 1225.)   Thus, this appeal is limited to the statute's effects on Sacramento County under the circumstances of this case, and we have no cause to address the application of our holding outside this context.The Supervisors also raised several other constitutional arguments below, all of which have apparently been abandoned on appeal.

18.   To be precise, legal scholars have perceived nuances in this austere dichotomy, at least in federal jurisprudence.  (E.g., Tribe, American Constitutional Law (2d ed. 1988) § 16–3, p. 1444 & § 16–26, at p. 1564 [positing a “heightened lower level” scrutiny and an “intermediate” scrutiny].)   Fortunately, we may steer clear of these.

19.   “In applying the rationality requirement ․ [o]ften only [a] [c]ourt's imagination has limited the allowable purposes ascribed to government.”  (Tribe, op. cit. supra, § 16–3 at p. 1443.)

20.   “[S]trict scrutiny is, in Professor Gunther's formulation, ‘strict’ in theory and usually ‘fatal’ in fact.”  (Tribe, op. cit. supra, § 16–6 at p. 1451.)

21.   Were an election for legislative representatives involved, such a provision would violate the “one person/one vote” equal protection principles.   But these have “little application to a single-issue referendum.”  (Fullerton, supra, 32 Cal.3d at p. 800, 187 Cal.Rptr. 398, 654 P.2d 168, citing Lockport, supra, 430 U.S. at p. 266, 97 S.Ct. at p. 1052, 51 L.Ed.2d at p. 321.)   For this reason, our recent decision in Bjornestad v. Hulse (1991) 229 Cal.App.3d 1568, 281 Cal.Rptr. 548, cited by the parties at oral argument, is inapposite, as it involved the extent to which the franchise must be extended in voting for representatives to the governing board of a water district.

22.   As perhaps illuminating the basis for this conclusion, we note the Hawn court stated later in its opinion, “The rationale of Lockport lends support to the contention that the airport ordinance before us constitutes an invidious discrimination against noncity residents and voters of Ventura County, since such voters are given no standing to object to the location of an airport in their community even though they may be affected just as adversely by an airport as the voters who reside within the cities of Ventura County.  (73 Cal.App.3d at pp. 1021–1022, 141 Cal.Rptr. 111 [emphasis supplied].)

23.   CHIP argues that the Supervisors failed to adduce any evidence in support of their constitutional challenge.   The evidence relied upon by the Supervisors is found in the administrative record already before the court in the same action.   But CHIP claims this evidence was before the court only on the mandate cause of action and not for purposes of the declaratory relief cause of action.   The argument is specious.   The constitutional issue was briefed by the parties prior to the hearing on the basis of the administrative record and was then considered by the court and argued by the parties at the hearing.   Indeed, counsel for CHIP expressly requested a ruling on the constitutional issue presented by the administrative record.  “I think a ruling on these constitutional issues would be very helpful․  What would be the point of having us go doing an EIR, drawing another lawsuit, later to reexamine these constitutional issues that are now presented?   So I think a ruling is entirely appropriate, and I think the folks from Citrus Heights have suffered enough without another lawsuit.”   Given these circumstances, whatever procedural error which may have occurred concerning the admission of the administrative record for purposes of the declaratory relief portion of the lawsuit was waived by counsel.

24.   To quote the 1987 LAFCO staff feasibility study, “Upon incorporation, certain services will be transferred to the new city․  [An exact listing of services transferred and retained appears in an appendix to the proponents' feasibility study, which need not be recounted here.]   These services will be transferred along with the revenues and fees linked to the services [i.e., the sales tax, more of which happens to be generated than received as the area's per capita share of services].   In addition ․ [the “countywide”] services cannot be transferred to the new city, although the law requires that a portion of certain revenues that help to finance these services [i.e., the property tax] will be transferred to the new city.”   It is true, as county counsel has noted, that the county's manner of accounting for funds results in a “dichotomy of impact” of the incorporation which is “artificial in that it is caused by current budget policies which are not required by law.”   However, since the bulk of the Fund 001 services described earlier are among those mandated by the state over which the county has no control, this leaves the Fund 013 services to be targeted for cutback, so we may accept both the budget artificiality and the Supervisor's conclusion that it is the Fund 013 services which will suffer the brunt of the cuts.

25.   In pertinent part, the statute provides, “Upon motion, a court may award attorneys' fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest if:  (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery if any․”

26.   We may look to federal precedent in interpreting the reach of our statute, keeping in mind our statute's reach is broader than the federal equivalent.  (Miller, supra, 176 Cal.App.3d at p. 458, fn. 5, 222 Cal.Rptr. 225;  Sokolow v. County of San Mateo (1989) 213 Cal.App.3d 231, 243–244, 261 Cal.Rptr. 520.)

SPARKS, Acting Presiding Justice.

SCOTLAND and NICHOLSON, JJ., concur.