The University of California at Merced won a battle with environmental groups trying to stop construction by overturning the environmental report on the campus site.

But with that issue out of the way, UC Merced officials are wondering if there will be money available to open the campus because of the state's budget crisis.

The 5th District Court of Appeal in Fresno ruled Tuesday that the university's plan shows an adequate source of water for the campus and that it would not hurt the surrounding area.

The San Joaquin Raptor/Wildlife Rescue Center, Protect Our Water and the Central Valley Safe Environment Network made the appeal. Representatives of the groups could not be reached by phone Tuesday.

Their attorney, Patience Milrod of Fresno, said she hadn't seen the opinion. "I'm surprised and looking forward to reading the opinion and finding out how they could possibly have arrived at this conclusion."

Milrod had not talked to her clients Tuesday afternoon and didn't know if they would take the case further. They could appeal to the California Supreme Court.

"We are pleased by the ruling," UC Merced Chancellor Carol Tomlinson-Keasey said in a prepared statement. "We have always said we will abide by all applicable laws in creating the 10th campus of the UC system."

Construction is under way at the site east of Lake Yosemite. Utility lines are being installed, and the land is being graded, UC Merced spokesman James Grant said.

Construction money is available for the buildings, but Grant said the state hasn't allocated money to run the university.

"We are trying to serve students in fall 2004, but we need to have resources to do that," Grant said. "We're holding to see what the budget is, then we'll make decisions on how we can service [students] and when.

"The campus will, over time, be built. We will likely be in some mode of construction for the foreseeable future," he said.

He pointed out that the University of California at Los Angeles is more than 75 years old and still has major construction going on.

Grant said construction is on target for the university to open at the Lake Yosemite site next fall, but added, "we're looking at potential contingency plans for serving students just in case, knowing that no construction project is predictable."