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prior consideration and resolution of the environmental issue.”].) 2 the host of potentially significant environmental impacts described above.Given the impacts,we think it is clear the City is required to prepare a Mitigated Negative Declaration or Environmental Impact Report. The City Cannot Adopt the Ordinance without Undertaking the Required Environmental Review Once an activity is determined to be a “project,”the agency must decide whether the activity qualifies for one of the exemptions that excuse otherwise covered activities from CEQA’s environmental review.(Muzzy Ranch Co.v.Solano Cnty.Airport Land Use Com.,41 Cal.4th 372,380-381 (2007).)Then,assuming no exemption applies,the agency must undertake environmental review of the activity.2(Ibid.) Here,the City is incorrectly stopping environmental review of the Ordinance at the first step in the CEQA decision making tree,finding without any supporting evidence that the Ordinance is not a “project”because it “will not result in a direct or reasonably foreseeable indirect physical change in the environment”under Guidelines Section 15060(c)(2),and is not a “project”under Guidelines Section 15378 because it “has no potential for resulting in physical change to the environment,directly or indirectly.”(Staff Report,p.1.)This is not how CEQA works.The City must find to a certainty that the ban will result in no possibility of significant environmental impacts prior to determining the Ordinance is not a “project”under CEQA.(Davidon Homes,54 Cal.App.4th at 119-120.)Here,the City has failed to provide any evidence or reasoning in the record to support its determination that the STR prohibition is not a project. Although it is uncertain whether the Ordinance’s potential impacts will ultimately be significant enough to require a full Environmental Impact Report (though,again,we think they will be),the California Supreme Court has made it clear that the potential impacts of the Ordinance described above require the City to conduct further environmental review to comply with CEQA. Sincerely, Santa Ana Short Term Rental Alliance (SASTRA) Cc:Alvaro Nuñez,Acting City Manager 2 A lead agency must undertake in initial study to determine whether the project “may have a significant effect on the environment.”(CEQA Guidelines,§15063(a).)If the initial study finds no substantial evidence of a significant environmental effect,the lead agency must prepare a negative declaration and the environmental review ends,but if the initial study identifies potentially significant environmental effects,but those effects can be fully mitigated by changes in the project which the applicant agrees to,then the agency must prepare a mitigated negative declaration, ending CEQA review.(Pub.Res.Code §21080(c)(1),(2);Friends of College of San Mateo Gardens v.San Mateo Cnty.Community College Dist.,1 Cal.5th 937,945 (2016).)If the initial study finds substantial evidence that the