AG and M&I 

R. O. Final CVP-Wide Draft 4/19-2004 

Dunnigan WD Draft 7/22-2003 

Dunnigan WD Draft 6/26-2003 

Dunnigan WD Draft 6/25-2003 

R.O. Final CVP-Wide 6/10-2003 

Sac.Valley Division Draft 5/28-2003 

CVP-Wide Draft 5/23-2003 

Contract No. 

 14-06-200-399-A-LTR1 

UNITED STATES 

DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

Central Valley Project, California 

LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES 

AND

DUNNIGAN WATER DISTRICT

PROVIDING FOR PROJECT WATER SERVICE

FROM THE SACRAMENTO RIVER DIVISION

Table of Contents

Article No. Title Page No.

 Preamble ................................................................................................................. 1 

 Explanatory Recitals ............................................................................................ 2-4 

 1 Definitions............................................................................................................ 4-8 

 2 Term of Contract................................................................................................8-11

 3 Water to be Made Available and Delivered to the Contractor.........................11-14 

 4 Time for Delivery of Water .............................................................................14-15 

 5 Point of Diversion and Responsibility for Distribution of Water.................... 15-17 

 6 Measurement of Water Within the Contractor’s Boundaries ..........................17-18 

 7 Rates and Method of Payment for Water.........................................................19-25 

 8 Non-Interest Bearing Operation and Maintenance Deficits.................................. 25 

 9 Sales, Transfers, or Exchanges of Water .........................................................25-27 

 10 Application of Payments and Adjustments........................................................... 27 

 11 Temporary Reductions--Return Flows ............................................................ 27-28 

 12 Constraints on the Availability of Water ......................................................... 28-29 

 13 Unavoidable Groundwater Percolation................................................................. 29 

 14 Rules and Regulations........................................................................................... 29 

 15 Water and Air Pollution Control........................................................................... 29 

 16 Quality of Water ................................................................................................... 30 

 17 Water Acquired by the Contractor Other Than From the United States..........30-32 

 18 Opinions and Determinations ............................................................................... 33 

 19 Coordination and Cooperation......................................................................... 33-35 

 20 Charges for Delinquent Payments ........................................................................ 35 
Contract No. 14-06-200-399-A-LTR1 

Table of Contents - continued

Article No. Title Page No.

 21 Equal Opportunity............................................................................................35-36 

 22 General Obligation--Benefits Conditioned Upon Payment .............................36-37 

 23 Compliance With Civil Rights Laws and Regulations ......................................... 37 

 24 Privacy Act Compliance ..................................................................................37-38 

 25 Contractor to Pay Certain Miscellaneous Costs.................................................... 38 

 26 Water Conservation .........................................................................................38-40 

 27 Existing or Acquired Water or Water Rights........................................................ 40 

 28 Operation and Maintenance by Operating Non-Federal Entity ....................... 40-41 

 29 Contingent on Appropriation or Allotment of Funds ........................................... 41 

 30 Books, Records, and Reports........................................................................... 41-42 

 31 Assignment Limited--Successors and Assigns Obligated .................................... 42 

 32 Severability ......................................................................................................42-43 

 33 Resolution of Disputes.......................................................................................... 43 

 34 Officials Not to Benefit......................................................................................... 43 

 35 Changes in Contractor’s Boundaries ...............................................................43-44 

 36 Federal Laws......................................................................................................... 44 

 37 Notices .................................................................................................................. 44

 38 Confirmation of Contract.................................................................................44-45 

 Signature Page ...................................................................................................... 45 

 Exhibit A - Map of Contractor’s Boundaries 

 Exhibit B - Rates and Charges 
AG and M&I 

R. O. Final CVP-Wide Draft 4/19-2004 

Dunnigan WD Draft 7/22-2003 

Dunnigan WD Draft 6/26-2003 

Dunnigan WD Draft 6/25-2003 

R.O. Final CVP-Wide 6/10-2003 

Sac.Valley Division Draft 5/28-2003 

CVP-Wide Draft 5/23-2003 

Contract No. 

 14-06-200-399-A-LTR1 

1 UNITED STATES 

2 DEPARTMENT OF THE INTERIOR 

3 BUREAU OF RECLAMATION 

4 Central Valley Project, California 

5 LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES 

6 AND

7 DUNNIGAN WATER DISTRICT

8 PROVIDING FOR PROJECT WATER SERVICE

9 FROM THE SACRAMENTO RIVER DIVISION

10 THIS CONTRACT, made this _____ day of ____________________, 20___, in 

11 pursuance generally of the Act of June 17, 1902 (32 Stat. 388), and acts amendatory or 

12 supplementary thereto, including, but not limited to, the Acts of August 26, 1937 (50 Stat. 844), as 

13 amended and supplemented, August 4, 1939 (53 Stat. 1187), as amended and supplemented, July 2, 

14 1956 (70 Stat. 483), June 21, 1963 (77 Stat. 68), October 12, 1982 (96 Stat. 1263), October 27, 1986 

15 (100 Stat. 3050), as amended, and Title XXXIV of the Act of October 30, 1992 (106 Stat. 4706), all 

16 collectively hereinafter referred to as Federal Reclamation law, between THE UNITED STATES 

17 OF AMERICA, hereinafter referred to as the United States, and DUNNIGAN WATER DISTRICT, 

18 hereinafter referred to as the Contractor, a public agency of the State of California, duly organized, 

19 existing, and acting pursuant to the laws thereof; 

20 WITNESSETH, That:
Contract No. 14-06-200-399-A-LTR1 

2

21 EXPLANATORY RECITALS

 [1st 22 ] WHEREAS, the United States has constructed and is operating the Central Valley 

23 Project (Project), California, for diversion, storage, carriage, distribution and beneficial use, for 

24 flood control, irrigation, municipal, domestic, industrial, fish and wildlife mitigation, protection 

25 and restoration, generation and distribution of electric energy, salinity control, navigation and 

26 other beneficial uses, of waters of the Sacramento River, the American River, the Trinity River, 

27 and the San Joaquin River and their tributaries; and 

 [2nd 28 ] WHEREAS, the United States constructed the Red Bluff Diversion Dam, and the 

29 Tehama-Colusa Canal and related delivery facilities including pumping plants, hereinafter 

30 collectively referred to as the Canal Facilities, which will be used in part for the furnishing of 

31 water to the Contractor pursuant to the terms of this Contract; and 

 [3rd 32 ] WHEREAS, the rights to Project Water were acquired by the United States 

33 pursuant to California law for operation of the Project; and 

 [4th 34 ] WHEREAS, the Contractor and the United States entered into Contract 

35 No. 14-06-200-399-A, which established terms for the delivery to the Contractor of Project 

36 Water from the Canal Facilities from February 5, 1963, through February 28, 1995, and under 

37 which the initial date of water delivery to the Contractor was January 1, 1983; and 

 [5th 38 ] WHEREAS, the Contractor and the United States have pursuant to subsection 

39 3404(c)(1) of the Central Valley Project Improvement Act (CVPIA), subsequently entered into 

40 interim renewal contract(s) identified as Contract No(s). 14-06-200-399-A-IR1, 14-06-200-399-

41 A-IR2, 14-06-200-399-A-IR3, 14-06-200-399-A-IR4, 14-06-200-399-A-IR5, 14-06-200-399-A42 IR6, 14-06-200-399-A-IR7, and 14-06-200-399-A-IR8, the current of which is hereinafter 

43 referred to as the Existing Contract, which provided for the continued water service to the 

44 Contractor from March 1, 2004, through February 28, 2006; and 

 [6th 45 ] WHEREAS, Section 3404(c) of the CVPIA provides for long-term renewal of the 

46 Existing Contract following completion of appropriate environmental documentation, including a 
Contract No. 14-06-200-399-A-LTR1 

3

47 programmatic environmental impact statement (PEIS) pursuant to the National Environmental 

48 Policy Act (NEPA), analyzing the direct and indirect impacts and benefits of implementing the 

49 CVPIA and the potential renewal of all existing contracts for Project Water; and 

 [7th 50 ] WHEREAS, the United States has completed the PEIS and all other appropriate 

51 environmental review necessary to provide for long-term renewal of the Existing Contract; and 

 [8th 52 ] WHEREAS, the Contractor has requested the long-term renewal of the Existing 

53 Contract, pursuant to the terms of the Existing Contract, Federal Reclamation law, and the laws 

54 of the State of California, for water service from the Project; and 

 [9th 55 ] WHEREAS, the United States has determined that the Contractor has fulfilled all 

56 of its obligations under the Existing Contract; and 

 [10th 57 ] WHEREAS, the Contractor has demonstrated to the satisfaction of the 

58 Contracting Officer that the Contractor has utilized the Project Water supplies available to it for 

59 reasonable and beneficial use and, based upon a needs analysis cooperatively prepared by the 

60 Contracting Officer and the Contractor, has demonstrated projected future demand for water use 

61 that exceeds the Contract Total to be made available to it pursuant to this Contract; and 

 [11th 62 ] WHEREAS, water obtained from the Project has been relied upon by urban and 

63 agricultural areas within California for more than 50 years, and is considered by the Contractor 

64 as an essential portion of its water supply; and 

 [12th 65 ] WHEREAS, the economies of regions within the Project, including the 

66 Contractor’s, depend upon the continued availability of water, including water service from the 

67 Project; and 

 [13th 68 ] WHEREAS, the Secretary intends through coordination, cooperation, and 

69 partnerships to pursue measures to improve water supply, water quality, and reliability of the 

70 Project for all Project purposes; and 

 [14th 71 ] WHEREAS, the mutual goals of the United States and the Contractor include: to 

72 provide for reliable Project Water supplies; to control costs of those supplies; to achieve 
Contract No. 14-06-200-399-A-LTR1 

4

73 repayment of the Project as required by law; to guard reasonably against Project Water 

74 shortages; to achieve a reasonable balance among competing demands for use of Project Water; 

75 and to comply with all applicable environmental statutes, all consistent with the legal obligations 

76 of the United States relative to the Project; and 

 [15th 77 ] WHEREAS, the parties intend by this Contract to develop a more cooperative 

78 relationship in order to achieve their mutual goals; and 

 [16th 79 ] WHEREAS, the United States and the Contractor are willing to enter into this 

80 Contract pursuant to Federal Reclamation law on the terms and conditions set forth below; 

81 NOW, THEREFORE, in consideration of the mutual and dependent covenants herein 

82 contained, it is hereby mutually agreed by the parties hereto as follows: 

83 DEFINITIONS

84 1. When used herein unless otherwise distinctly expressed, or manifestly 

85 incompatible with the intent of the parties as expressed in this Contract, the term: 

86 (a) “Calendar Year” shall mean the period January 1 through December 31, 

87 both dates inclusive; 

88 (b) “Charges” shall mean the payments required by Federal Reclamation law 

89 in addition to the Rates and Tiered Pricing Component specified in this Contract as determined 

90 annually by the Contracting Officer pursuant to this Contract; 

91 (c) “Condition of Shortage” shall mean a condition respecting the Project 

92 during any Year such that the Contracting Officer is unable to deliver sufficient water to meet the 

93 Contract Total; 

94 (d) “Contracting Officer” shall mean the Secretary of the Interior’s duly 

95 authorized representative acting pursuant to this Contract or applicable Federal Reclamation law 

96 or regulation; 

97 (e) “Contract Total” shall mean the maximum amount of water to which the 

98 Contractor is entitled under subdivision (a) of Article 3 of this Contract; 
Contract No. 14-06-200-399-A-LTR1 

5

99 (f) “Contractor’s Boundaries” shall mean the area to which the Contractor is 

100 permitted to provide Project Water under this Contract as described in Exhibit “A” attached 

101 hereto, which may be modified from time to time in accordance with Article 35 of this Contract 

102 without amendment of this Contract; 

103 (g) “CVPIA” shall mean the Central Valley Project Improvement Act, Title 

104 XXXIV of the Act of October 30, 1992 (106 Stat. 4706); 

105 (h) “Eligible Lands” shall mean all lands to which Irrigation Water may be 

106 delivered in accordance with Section 204 of the Reclamation Reform Act of October 12, 1982 

107 (96 Stat. 1263), as amended, hereinafter referred to as RRA; 

108 (i) “Excess Lands” shall mean all lands in excess of the limitations contained 

109 in Section 204 of the RRA, other than those lands exempt from acreage limitation under Federal 

110 Reclamation law; 

111 (j) “Full Cost Rate” shall mean an annual rate, as determined by the 

112 Contracting Officer that shall amortize the expenditures for construction properly allocable to the 

113 Project irrigation or M&I functions, as appropriate, of facilities in service including all O&M 

114 deficits funded, less payments, over such periods as may be required under Federal Reclamation 

115 law, or applicable contract provisions. Interest will accrue on both the construction expenditures 

116 and funded O&M deficits from October 12, 1982, on costs outstanding at that date, or from the 

117 date incurred in the case of costs arising subsequent to October 12, 1982, and shall be calculated 

118 in accordance with subsections 202(3)(B) and (3)(C) of the RRA. The Full Cost Rate includes 

119 actual operation, maintenance, and replacement costs consistent with Section 426.2 of the Rules 

120 and Regulations for the RRA. The Full Cost Rate used to compute the Tiered Pricing 

121 Component defined in subdivision (y) of this Article does not include the costs associated with 

122 the Contractor’s Irrigation Water distribution works constructed by the United States. However, 

123 the Irrigation Full Cost Water Rate defined in subdivision (l) of this Article does include such 

124 costs; 
Contract No. 14-06-200-399-A-LTR1 

6

125 (k) “Ineligible Lands” shall mean all lands to which Irrigation Water may not 

126 be delivered in accordance with Section 204 of the RRA; 

127 (l) “Irrigation Full Cost Water Rate” shall mean the Full Cost Rate applicable 

128 to the delivery of Irrigation Water; 

129 (m) “Irrigation Water” shall mean water made available from the Project that 

130 is used primarily in the production of agricultural crops or livestock, including domestic use 

131 incidental thereto, and watering of livestock; 

132 (n) “Landholder” shall mean a party that directly or indirectly owns or leases 

133 nonexempt land, as provided in 43 CFR 426.2; 

134 (o) “Municipal and Industrial (M&I) Water” shall mean Project Water, other 

135 than Irrigation Water, made available to the Contractor. M&I Water shall include water used for 

136 human use and purposes such as the watering of landscaping or pasture for animals (e.g., horses) 

137 which are kept for personal enjoyment or water delivered to land holdings operated in units of 

138 less than five acres unless the Contractor establishes to the satisfaction of the Contracting Officer 

139 that the use of water delivered to any such landholding is a use described in subdivision (m) of 

140 this Article; 

141 (p) “M&I Full Cost Water Rate” shall mean the Full Cost Rate applicable to 

142 the delivery of M&I Water; 

143 (q) “Operation and Maintenance” or “O&M” shall mean normal and 

144 reasonable care, control, operation, repair, replacement (other than capital replacement), and 

145 maintenance of Project facilities; 

146 (r) “Operating Non-Federal Entity” shall mean the Tehama-Colusa Canal 

147 Authority, its successors or assigns, a non-Federal entity which has the obligation to operate and 

148 maintain all or a portion of the Canal Facilities pursuant to an agreement with the United States, 

149 and which may have funding obligations with respect thereto; 
Contract No. 14-06-200-399-A-LTR1 

7

150 (s) “Project” shall mean the Central Valley Project owned by the United 

151 States and managed by the Department of the Interior, Bureau of Reclamation; 

152 (t) “Project Contractors” shall mean all parties who have water service 

153 contracts for Project Water from the Project with the United States pursuant to Federal 

154 Reclamation law; 

155 (u) “Project Water” shall mean all water that is developed, diverted, stored, or 

156 delivered by the Secretary in accordance with the statutes authorizing the Project and in 

157 accordance with the terms and conditions of water rights acquired pursuant to California law; 

158 (v) “Rates” shall mean the payments determined annually by the Contracting 

159 Officer in accordance with the then-current applicable water ratesetting policies for the Project, 

160 as described in subdivision (a) of Article 7 of this Contract; 

161 (w) “Recent Historic Average” shall mean the most recent five-year average of 

162 the final forecast of Water Made Available to the Contractor pursuant to this Contract or its 

163 preceding contract(s); 

164 (x) “Secretary” shall mean the Secretary of the Interior, a duly appointed 

165 successor, or an authorized representative acting pursuant to any authority of the Secretary and 

166 through any agency of the Department of the Interior; 

167 (y) “Tiered Pricing Component” shall be the incremental amount to be paid 

168 for each acre-foot of Water Delivered as described in subdivision (j) of Article 7 of this Contract; 

169 (z) “Water Delivered” or “Delivered Water” shall mean Project Water 

170 diverted for use by the Contractor at the point(s) of delivery approved by the Contracting 

171 Officer; 

172 (aa) “Water Made Available” shall mean the estimated amount of Project 

173 Water that can be delivered to the Contractor for the upcoming Year as declared by the 

174 Contracting Officer, pursuant to subdivision (a) of Article 4 of this Contract; 
Contract No. 14-06-200-399-A-LTR1 

8

175 (bb) “Water Scheduled” shall mean Project Water made available to the 

176 Contractor for which times and quantities for delivery have been established by the Contractor 

177 and Contracting Officer, pursuant to subdivision (b) of Article 4 of this Contract; and 

178 (cc) “Year” shall mean the period from and including March 1 of each 

179 Calendar Year through the last day of February of the following Calendar Year. 

180 TERM OF CONTRACT 

181 2. (a) This Contract shall be effective March 1, 20___, through February 28, 

182 20___, and supercedes the Existing Contract. In the event the Contractor wishes to renew this 

183 Contract beyond February 28, 20___, the Contractor shall submit a request for renewal in writing 

184 to the Contracting Officer no later than two years prior to the date this Contract expires. The 

185 renewal of this Contract insofar as it pertains to the furnishing of Irrigation Water to the 

186 Contractor shall be governed by subdivision (b) of this Article, and the renewal of this Contract 

187 insofar as it pertains to the furnishing of M&I Water to the Contractor shall be governed by 

188 subdivision (c) of this Article. 

189 (b) (1) Under terms and conditions of a renewal contract that are mutually 

190 agreeable to the parties hereto, and upon a determination by the Contracting Officer that at the 

191 time of contract renewal the conditions set forth in subdivision (b)(2) of this Article are met, and 

192 subject to Federal and State law, this Contract, insofar as it pertains to the furnishing of Irrigation 

193 Water to the Contractor, shall be renewed for a period of 25 years. 

194 (2) The conditions which must be met for this Contract to be renewed 

195 are: (i) the Contractor has prepared a water conservation plan that has been determined by the 

196 Contracting Officer in accordance with Article 26 of this Contract to meet the conservation and 

197 efficiency criteria for evaluating such plans established under Federal law; (ii) the Contractor is 

198 implementing an effective water conservation and efficiency program based on the Contractor’s 

199 water conservation plan as required by Article 26 of this Contract; (iii) the Contractor is 

200 maintaining all water measuring devices and implementing all water measurement methods as 
Contract No. 14-06-200-399-A-LTR1 

9

201 approved by the Contracting Officer pursuant to Article 6 of this Contract; (iv) the Contractor 

202 has reasonably and beneficially used the Project Water supplies made available to it and, based 

203 on projected demands, is reasonably anticipated and expects to fully utilize for reasonable and 

204 beneficial use the quantity of Project Water to be made available to it pursuant to such renewal; 

205 (v) the Contractor is complying with all terms and conditions of this Contract; and (vi) the 

206 Contractor has the physical and legal ability to deliver Project Water. 

207 (3) The terms and conditions of the renewal contract described in 

208 subdivision (b)(1) of this Article and any subsequent renewal contracts shall be developed 

209 consistent with the parties’ respective legal rights and obligations, and in consideration of all 

210 relevant facts and circumstances, as those circumstances exist at the time of renewal, including, 

211 without limitation, the Contractor’s need for continued delivery of Project Water; environmental 

212 conditions affected by implementation of the Contract to be renewed, and specifically changes in 

213 those conditions that occurred during the life of the Contract to be renewed; the Secretary’s 

214 progress toward achieving the purposes of the CVPIA as set out in Section 3402 and in 

215 implementing the specific provisions of the CVPIA; and current and anticipated economic 

216 circumstances of the region served by the Contractor. 

217 (c) This Contract, insofar as it pertains to the furnishing of M&I Water to the 

218 Contractor, shall be renewed for successive periods of up to 40 years each, which periods shall 

219 be consistent with then-existing Reclamation-wide policy, under terms and conditions mutually 

220 agreeable to the parties and consistent with Federal and State law. The Contractor shall be 

221 afforded the opportunity to comment to the Contracting Officer on the proposed adoption and 

222 application of any revised policy applicable to the delivery of M&I Water that would limit the 

223 term of any subsequent renewal contract with the Contractor for the furnishing of M&I Water to 

224 less than 40 years. 

225 (d) The Contracting Officer shall make a determination ten years after the 

226 date of execution of this Contract, and every five years thereafter during the term of this 
Contract No. 14-06-200-399-A-LTR1 

10

227 Contract, of whether a conversion of the relevant portion of this Contract to a contract under 

228 subsection 9(d) of the Reclamation Project Act of 1939 can be accomplished pursuant to the Act 

229 of July 2, 1956 (70 State 483). The Contracting Officer shall also make a determination ten 

230 years after the date of execution of this Contract and every five years thereafter during the term 

231 of this Contract of whether a conversion of the relevant portion of this Contract to a contract 

232 under subsection 9(c)(1) of the Reclamation Project Act of 1939 can be accomplished. 

233 Notwithstanding any provision of this Contract, the Contractor reserves and shall have all rights 

234 and benefits under Act of July 2, 1956 (70 Stat 483). The Contracting Officer anticipates that 

235 during the term of this Contract, all authorized Project construction expected to occur will have 

236 occurred, and on that basis the Contracting Officer agrees upon such completion to allocate all 

237 costs that are properly assignable to the Contractor, and agrees further that, at any time after such 

238 allocation is made, and subject to satisfaction of the condition set out in this subdivision, this 

239 Contract shall, at the request of the Contractor, be converted to a contract under subsection 9(d) 

240 or 9(c)(1), whichever is applicable, of the Reclamation Project Act of 1939, subject to applicable 

241 Federal law and under stated terms and conditions mutually agreeable to the Contractor and the 

242 Contracting Officer. A condition for such conversion to occur shall be a determination by the 

243 Contracting Officer that, account being taken of the amount credited to return by the Contractor 

244 as provided for under Federal Reclamation law, the remaining amount of construction costs 

245 assignable for ultimate return by the Contractor can probably be repaid to the United States 

246 within the term of a contract under said subsection 9(d) or 9(c)(1), whichever is applicable. If 

247 the remaining amount of costs that are properly assignable to the Contractor cannot be 

248 determined during the term of this Contract, the Contracting Officer shall notify the Contractor, 

249 and provide the reason(s) why such a determination could not be made. Further, the Contracting 

250 Officer shall make such a determination as soon thereafter as possible so as to permit, upon 

251 request of the Contractor and satisfaction of the condition set out above, conversion to a contract 

252 under subsection 9(d) or 9(c)(1), whichever is applicable. In the event such determination of 
Contract No. 14-06-200-399-A-LTR1 

11

253 costs has not been made at a time which allows conversion of this Contract during the term of 

254 this Contract or the Contractor has not requested conversion of this Contract within such term, 

255 the parties shall incorporate in any subsequent renewal contract as described in subdivision (b) of 

256 this Article a provision that carries forth in substantially identical terms the provisions of this 

257 subdivision. 

258 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE CONTRACTOR

259 3. (a) During each Year, consistent with all applicable State water rights, 

260 permits, and licenses, Federal law, and subject to the provisions set forth in Articles 11 and 12 of 

261 this Contract, the Contracting Officer shall make available for delivery to the Contractor 19,000 

262 acre-feet of Project Water for irrigation and M&I purposes. Water Delivered to the Contractor in 

263 accordance with this subdivision shall be scheduled and paid for pursuant to the provisions of 

264 Articles 4 and 7 of this Contract. 

265 (b) Because the capacity of the Project to deliver Project Water has been 

266 constrained in recent years and may be constrained in the future due to many factors including 

267 hydrologic conditions and implementation of Federal and State laws, the likelihood of the 

268 Contractor actually receiving the amount of Project Water set out in subdivision (a) of this 

269 Article in any given Year is uncertain. The Contracting Officer’s modeling referenced in the 

270 PEIS projected that the Contract Total set forth in this Contract will not be available to the 

271 Contractor in many years. During the most recent five years, the Recent Historic Average of 

272 water made available to the Contractor was 17,480 acre-feet. Nothing in subdivision (b) of this 

273 Article shall affect the rights and obligations of the parties under any provision of this Contract. 

274 (c) The Contractor shall utilize the Project Water in accordance with all 

275 applicable legal requirements. 

276 (d) The Contractor shall make reasonable and beneficial use of water 

277 furnished pursuant to this Contract. Ground-water recharge programs (direct, indirect, or in 

278 lieu), ground-water banking programs, surface water storage programs, and other similar 
Contract No. 14-06-200-399-A-LTR1 

12

279 programs utilizing Project Water or other water furnished pursuant to this Contract conducted 

280 within the Contractor’s Boundaries which are consistent with applicable State law and result in 

281 use consistent with Federal Reclamation law will be allowed; Provided, That any direct recharge 

282 program(s) is (are) described in the Contractor’s water conservation plan submitted pursuant to 

283 Article 26 of this Contract; Provided, further, That such water conservation plan demonstrates 

284 sufficient lawful uses exist in the Contractor’s Boundaries so that using a long-term average, the 

285 quantity of Delivered Water is demonstrated to be reasonable for such uses and in compliance 

286 with Federal Reclamation law. Ground-water recharge programs, ground-water banking 

287 programs, surface water storage programs, and other similar programs utilizing Project Water or 

288 other water furnished pursuant to this Contract conducted outside the Contractor’s Boundaries 

289 may be permitted upon written approval of the Contracting Officer, which approval will be based 

290 upon environmental documentation, Project Water rights, and Project operational concerns. The 

291 Contracting Officer will address such concerns in regulations, policies, or guidelines. 

292 (e) The Contractor shall comply with requirements applicable to the 

293 Contractor in biological opinion(s) prepared as a result of a consultation regarding the execution 

294 of this Contract undertaken pursuant to Section 7 of the Endangered Species Act of 1973 (ESA), 

295 as amended, that are within the Contractor’s legal authority to implement. The Existing 

296 Contract, which evidences in excess of 20 years of diversions for irrigation and/or M&I purposes 

297 of the quantities of water provided in subdivision (a) of Article 3 of this Contract, will be 

298 considered in developing an appropriate baseline for biological assessment(s) prepared pursuant 

299 to the ESA, and any other needed environmental review. Nothing herein shall be construed to 

300 prevent the Contractor from challenging or seeking judicial relief in a court of competent 

301 jurisdiction with respect to any biological opinion or other environmental documentation referred 

302 to in this Article. 

303 (f) As soon as possible following each declaration of Water Made Available 

304 under Article 4 of this Contract, the Contracting Officer will make a determination whether 
Contract No. 14-06-200-399-A-LTR1 

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305 Project Water, or other water available to the Project, can be made available to the Contractor in 

306 addition to the Contract Total under Article 3 of this Contract during the Year without adversely 

307 impacting other Project Contractors. At the request of the Contractor, the Contracting Officer 

308 will consult with the Contractor prior to making such a determination. If the Contracting Officer 

309 determines that Project Water, or other water available to the Project, can be made available to 

310 the Contractor, the Contracting Officer will announce the availability of such water and shall so 

311 notify the Contractor as soon as practical. The Contracting Officer will thereafter meet with the 

312 Contractor and other Project Contractors capable of taking such water to determine the most 

313 equitable and efficient allocation of such water. If the Contractor requests the delivery of any 

314 quantity of such water, the Contracting Officer shall make such water available to the Contractor 

315 in accordance with applicable statutes, regulations, guidelines, and policies. 

316 (g) The Contractor may request permission to reschedule for use during the 

317 subsequent Year some or all of the Water Made Available to the Contractor during the current 

318 Year referred to as “carryover.” The Contractor may request permission to use during the 

319 current Year a quantity of Project Water which may be made available by the United States to 

320 the Contractor during the subsequent Year referred to as “preuse.” The Contracting Officer’s 

321 written approval may permit such uses in accordance with applicable statutes, regulations, 

322 guidelines, and policies. 

323 (h) The Contractor’s right pursuant to Federal Reclamation law and applicable 

324 State law to the reasonable and beneficial use of Water Delivered pursuant to this Contract 

325 during the term thereof and any subsequent renewal contracts, as described in Article 2 of this 

326 Contract, during the terms thereof shall not be disturbed so long as the Contractor shall fulfill all 

327 of its obligations under this Contract and any renewals thereof. Nothing in the preceding 

328 sentence shall affect the Contracting Officer’s ability to impose shortages under Article 11 or 

329 subdivision (b) of Article 12 of this Contract or applicable provisions of any subsequent renewal 

330 contracts. 
Contract No. 14-06-200-399-A-LTR1 

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331 (i) Project Water furnished to the Contractor pursuant to this Contract may be 

332 delivered for other than irrigation or M&I purposes upon written approval by the Contracting 

333 Officer in accordance with the terms and conditions of such approval. 

334 (j) The Contracting Officer shall make reasonable efforts to protect the water 

335 rights necessary for the Project and to provide the water available under this Contract. The 

336 Contracting Officer shall not object to participation by the Contractor, in the capacity and to the 

337 extent permitted by law, in administrative proceedings related to the Project Water rights; 

338 Provided, That the Contracting Officer retains the right to object to the substance of the 

339 Contractor’s position in such a proceeding; Provided further, That in such proceedings the 

340 Contracting Officer shall recognize the Contractor has a legal right under the terms of this 

341 Contract to use Project Water. 

342 TIME FOR DELIVERY OF WATER

343 4. (a) On or about February 20 of each Calendar Year, the Contracting Officer 

344 shall announce the Contracting Officer’s expected declaration of the Water Made Available. 

345 Such declaration will be expressed in terms of both Water Made Available and the Recent 

346 Historic Average and will be updated monthly, and more frequently if necessary, based on then347 current operational and hydrologic conditions and a new declaration with changes, if any, to the 

348 Water Made Available will be made. The Contracting Officer shall provide forecasts of Project 

349 operations and the basis of the estimate, with relevant supporting information, upon the written 

350 request of the Contractor. Concurrently with the declaration of the Water Made Available, the 

351 Contracting Officer shall provide the Contractor with the updated Recent Historic Average. 

352 (b) On or before each March 1 and at such other times as necessary, the 

353 Contractor shall submit to the Contracting Officer a written schedule, satisfactory to the 

354 Contracting Officer, showing the monthly quantities of Project Water to be delivered by the 

355 United States to the Contractor pursuant to this Contract for the Year commencing on such 
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356 March 1. The Contracting Officer shall use all reasonable means to deliver Project Water 

357 according to the approved schedule for the Year commencing on such March 1. 

358 (c) The Contractor shall not schedule Project Water in excess of the quantity 

359 of Project Water the Contractor intends to put to reasonable and beneficial use within the 

360 Contractor’s Boundaries or to sell, transfer, or exchange pursuant to Article 9 of this Contract 

361 during any Year. 

362 (d) Subject to the conditions set forth in subdivision (a) of Article 3 of this 

363 Contract, the United States shall deliver Project Water to the Contractor in accordance with the 

364 initial schedule submitted by the Contractor pursuant to subdivision (b) of this Article, or any 

365 written revision(s), satisfactory to the Contracting Officer, thereto submitted within a reasonable 

366 time prior to the date(s) on which the requested change(s) is/are to be implemented. 

367 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

368 5. (a) Project Water scheduled pursuant to subdivision (b) of Article 4 of this 

369 Contract shall be delivered to the Contractor at approved turnouts on the Canal Facilities and any 

370 additional point or points of delivery either on Project facilities or another location or locations 

371 mutually agreed to in writing by the Contracting Officer and the Contractor. The United States 

372 shall furnish such power as may be necessary to pump Project Water at the existing Tehama373 Colusa Canal side pumping plants and at existing relift stations at heads and elevations sufficient 

374 to irrigate by gravity all areas within the Contractor’s Boundaries below elevation 380 (MSL). 

375 (b) The Contracting Officer, either directly or through its written agreement(s) 

376 with the Operating Non-Federal Entity/Entities shall make all reasonable efforts to maintain 

377 sufficient flows and levels of water in Project facilities to deliver Project Water to the Contractor 

378 at specific turnouts established pursuant to subdivision (a) of this Article. The parties 

379 acknowledge that it may be necessary from time to shut down some or all of Project facilities for 

380 maintenance or emergencies. Except in the case of emergency, the Contracting Officer shall 

381 consult with the Contractor to schedule the shut down at such times and for such duration as will 
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382 allow for the work to be accomplished completely and efficiently, and with a minimum of 

383 disruption of water service to the Contractor. In this regard, shut downs will, to the extent 

384 reasonably possible, be limited to the months of December and January. 

385 (c) The Contractor shall deliver Irrigation Water in accordance with any 

386 applicable land classification provisions of Federal Reclamation law and the associated 

387 regulations. The Contractor shall not deliver Project Water to land outside the Contractor’s 

388 Boundaries unless approved in advance by the Contracting Officer. 

389 (d) All Water Delivered to the Contractor pursuant to this Contract shall be 

390 measured and recorded with equipment furnished, installed, operated, and maintained by the 

391 United States or the Operating Non-Federal Entity/Entities at the point or points of delivery 

392 established pursuant to subdivision (a) of this Article. Upon the request of either party to this 

393 Contract, the Contracting Officer shall investigate, or cause to be investigated by the responsible 

394 Operating Non-Federal Entity/Entities, the accuracy of such measurements and shall take any 

395 necessary steps to adjust any errors appearing therein. For any period of time when accurate 

396 measurements have not been made, the Contracting Officer shall consult with the Contractor and 

397 the responsible Operating Non-Federal Entity/Entities prior to making a final determination of 

398 the quantity delivered for that period of time. 

399 (e) Neither the Contracting Officer nor any Operating Non-Federal 

400 Entity/Entities shall be responsible for the control, carriage, handling, use, disposal, or 

401 distribution of Water Delivered to the Contractor pursuant to this Contract beyond the delivery 

402 points specified in subdivision (a) of this Article. The Contractor shall indemnify the United 

403 States, its officers, employees, agents, and assigns on account of damage or claim of damage of 

404 any nature whatsoever for which there is legal responsibility, including property damage, 

405 personal injury, or death arising out of or connected with the control, carriage, handling, use, 

406 disposal, or distribution of such Water Delivered beyond such delivery points, except for any 

407 damage or claim arising out of (i) acts or omissions of the Contracting Officer or any of its 
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408 officers, employees, agents, or assigns, including the Operating Non-Federal Entity/Entities, with 

409 the intent of creating the situation resulting in any damage or claim, (ii) willful misconduct of the 

410 Contracting Officer or any of its officers, employees, agents, or assigns, including the Operating 

411 Non-Federal Entity/Entities, (iii) negligence of the Contracting Officer or any of its officers, 

412 employees, agents, or assigns including the Operating Non-Federal Entity/Entities, or (iv) 

413 damage or claims resulting from a malfunction of facilities owned and/or operated by the United 

414 States or responsible Operating Non-Federal Entity/Entities. 

415 MEASUREMENT OF WATER WITHIN THE CONTRACTOR’S BOUNDARIES

416 6. (a) The Contractor has established a measuring program satisfactory to the 

417 Contracting Officer. The Contractor shall ensure that all surface water delivered for irrigation 

418 purposes within the Contractor’s Boundaries is measured at each agricultural turnout and such 

419 water delivered for M&I purposes is measured at each M&I service connection. The water 

420 measuring devices or water measuring methods of comparable effectiveness must be acceptable 

421 to the Contracting Officer. The Contractor shall be responsible for installing, operating, and 

422 maintaining and repairing all such measuring devices and implementing all such water 

423 measuring methods at no cost to the United States. The Contractor shall use the information 

424 obtained from such water measuring devices or water measuring methods to ensure its proper 

425 management of the water, to bill water users for water delivered by the Contractor; and, if 

426 applicable, to record water delivered for M&I purposes by customer class as defined in the 

427 Contractor’s water conservation plan provided for in Article 26 of this Contract. Nothing herein 

428 contained, however, shall preclude the Contractor from establishing and collecting any charges, 

429 assessments, or other revenues authorized by California law. The Contractor shall include a 

430 summary of all its annual surface water deliveries in the annual report described in subdivision 

431 (c) of Article 26. 

432 (b) To the extent the information has not otherwise been provided, upon 

433 execution of this Contract, the Contractor shall provide to the Contracting Officer a written 
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434 report describing the measurement devices or water measuring methods being used or to be used 

435 to implement subdivision (a) of this Article and identifying the agricultural turnouts and the M&I 

436 service connections or alternative measurement programs approved by the Contracting Officer, 

437 at which such measurement devices or water measuring methods are being used, and, if 

438 applicable, identifying the locations at which such devices and/or methods are not yet being used 

439 including a time schedule for implementation at such locations. The Contracting Officer shall 

440 advise the Contractor in writing within 60 days as to the adequacy and necessary modifications, 

441 if any, of the measuring devices or water measuring methods identified in the Contractor’s report 

442 and if the Contracting Officer does not respond in such time, they shall be deemed adequate. If 

443 the Contracting Officer notifies the Contractor that the measuring devices or methods are 

444 inadequate, the parties shall within 60 days following the Contracting Officer‘s response, 

445 negotiate in good faith the earliest practicable date by which the Contractor shall modify said 

446 measuring devices and/or measuring methods as required by the Contracting Officer to ensure 

447 compliance with subdivision (a) of this Article. 

448 (c) All new surface water delivery systems installed within the Contractor’s 

449 Boundaries after the effective date of this Contract shall also comply with the measurement 

450 provisions described in subdivision (a) of this Article. 

451 (d) The Contractor shall inform the Contracting Officer and the State of 

452 California in writing by April 30 of each Year of the monthly volume of surface water delivered 

453 within the Contractor’s Boundaries during the previous Year. 

454 (e) The Contractor shall inform the Contracting Officer and the Operating 

Non-Federal Entity on or before the 20th 455 calendar day of each month of the quantity of Irrigation 

456 and M&I Water taken during the preceding month.
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457 RATES AND METHOD OF PAYMENT FOR WATER

458 7. (a) The Contractor shall pay the United States as provided in this Article for 

459 all Delivered Water at Rates, Charges, and the Tiered Pricing Component established in 

460 accordance with (i) the Secretary’s ratesetting policy for Irrigation Water adopted in 1988 and 

461 the Secretary’s then-existing ratesetting policy for M&I Water. Such ratesetting policies shall be 

462 amended, modified, or superceded only through a public notice and comment procedure; (ii) 

463 applicable Federal Reclamation law and associated rules and regulations, or policies; and (iii) 

464 other applicable provisions of this Contract. Payments shall be made by cash transaction, 

465 electronic funds transfer, or any other mechanism as may be agreed to in writing by the 

466 Contractor and the Contracting Officer. The Rates, Charges, and Tiered Pricing Component 

467 applicable to the Contractor upon execution of this Contract are set forth in Exhibit “B,” as may 

468 be revised annually. 

469 (b) The Contracting Officer shall notify the Contractor of the Rates, Charges, 

470 and Tiered Pricing Component as follows: 

471 (1) Prior to July 1 of each Calendar Year, the Contracting Officer shall 

472 provide the Contractor an estimate of the Charges for Project Water that will be applied to the 

473 period October 1, of the current Calendar Year, through September 30, of the following Calendar 

474 Year, and the basis for such estimate. The Contractor shall be allowed not less than two months 

475 to review and comment on such estimates. On or before September 15 of each Calendar Year, 

476 the Contracting Officer shall notify the Contractor in writing of the Charges to be in effect during 

477 the period October 1 of the current Calendar Year, through September 30, of the following 

478 Calendar Year, and such notification shall revise Exhibit “B.” 

479 (2) Prior to October 1 of each Calendar Year, the Contracting Officer 

480 shall make available to the Contractor an estimate of the Rates and Tiered Pricing Component 

481 for Project Water for the following Year and the computations and cost allocations upon which 

482 those Rates are based. The Contractor shall be allowed not less than two months to review and 
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483 comment on such computations and cost allocations. By December 31 of each Calendar Year, 

484 the Contracting Officer shall provide the Contractor with the final Rates and Tiered Pricing 

485 Component to be in effect for the upcoming Year, and such notification shall revise Exhibit “B.” 

486 (c) At the time the Contractor submits the initial schedule for the delivery of 

487 Project Water for each Year pursuant to subdivision (b) of Article 4 of this Contract, the 

488 Contractor shall make an advance payment to the United States equal to the total amount payable 

489 pursuant to the applicable Rate(s) set under subdivision (a) of this Article, for the Project Water 

490 scheduled to be delivered pursuant to this Contract during the first two calendar months of the 

491 Year. Before the end of the first month and before the end of each calendar month thereafter, the 

492 Contractor shall make an advance payment to the United States, at the Rate(s) set under 

493 subdivision (a) of this Article, for the Water Scheduled to be delivered pursuant to this Contract 

494 during the second month immediately following. Adjustments between advance payments for 

495 Water Scheduled and payments at Rates due for Water Delivered shall be made before the end of 

496 the following month; Provided, That any revised schedule submitted by the Contractor pursuant 

497 to Article 4 of this Contract which increases the amount of Water Delivered pursuant to this 

498 Contract during any month shall be accompanied with appropriate advance payment, at the Rates 

499 then in effect, to assure that Project Water is not delivered to the Contractor in advance of such 

500 payment. In any month in which the quantity of Water Delivered to the Contractor pursuant to 

501 this Contract equals the quantity of Water Scheduled and paid for by the Contractor, no 

502 additional Project Water shall be delivered to the Contractor unless and until an advance 

503 payment at the Rates then in effect for such additional Project Water is made. Final adjustment 

504 between the advance payments for the Water Scheduled and payments for the quantities of Water 

505 Delivered during each Year pursuant to this Contract shall be made as soon as practicable but no 

506 later than April 30th of the following Year, or 60 days after the delivery of Project Water carried 

507 over under subdivision (g) of Article 3 of this Contract if such water is not delivered by the last 

508 day of February. 
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509 (d) The Contractor shall also make a payment in addition to the Rate(s) in 

510 subdivision (c) of this Article to the United States for Water Delivered, at the Charges and the 

511 appropriate Tiered Pricing Component then in effect, before the end of the month following the 

512 month of delivery; Provided, That the Contractor may be granted an exception from the Tiered 

513 Pricing Component pursuant to subdivision (j)(2) of this Article. The payments shall be 

514 consistent with the quantities of Irrigation Water and M&I Water Delivered as shown in the 

515 water delivery report for the subject month prepared by the Operating Non-Federal 

516 Entity/Entities or, if there is no Operating Non-Federal Entity/Entities, by the Contracting 

517 Officer. The water delivery report shall be deemed a bill for the payment of Charges and the 

518 applicable Tiered Pricing Component for Water Delivered. Adjustment for overpayment or 

519 underpayment of Charges shall be made through the adjustment of payments due to the United 

520 States for Charges for the next month. Any amount to be paid for past due payment of Charges 

521 and the Tiered Pricing Component shall be computed pursuant to Article 20 of this Contract. 

522 (e) The Contractor shall pay for any Water Delivered under subdivision (a), 

523 (f), or (g) of Article 3 of this Contract as determined by the Contracting Officer pursuant to 

524 applicable statutes, associated regulations, any applicable provisions of guidelines or ratesetting 

525 policies; Provided, That the Rate for Water Delivered under subdivision (f) of Article 3 of this 

526 Contract shall be no more than the otherwise applicable Rate for Irrigation Water or M&I Water 

527 under subdivision (a) of this Article. 

528 (f) Payments to be made by the Contractor to the United States under this 

529 Contract may be paid from any revenues available to the Contractor. 

530 (g) All revenues received by the United States from the Contractor relating to 

531 the delivery of Project Water or the delivery of non-Project water through Project facilities shall 

532 be allocated and applied in accordance with Federal Reclamation law and the associated rules or 

533 regulations, and the then current Project ratesetting policies for M&I Water or Irrigation Water. 
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534 (h) The Contracting Officer shall keep its accounts pertaining to the 

535 administration of the financial terms and conditions of its long-term contracts, in accordance 

536 with applicable Federal standards, so as to reflect the application of Project costs and revenues. 

537 The Contracting Officer shall, each Year upon request of the Contractor, provide to the 

538 Contractor a detailed accounting of all Project and Contractor expense allocations, the 

539 disposition of all Project and Contractor revenues, and a summary of all water delivery 

540 information. The Contracting Officer and the Contractor shall enter into good faith negotiations 

541 to resolve any discrepancies or disputes relating to accountings, reports, or information. 

542 (i) The parties acknowledge and agree that the efficient administration of this 

543 Contract is their mutual goal. Recognizing that experience has demonstrated that mechanisms, 

544 policies, and procedures used for establishing Rates, Charges, and Tiered Pricing Components, 

545 and/or for making and allocating payments, other than those set forth in this Article may be in 

546 the mutual best interest of the parties, it is expressly agreed that the parties may enter into 

547 agreements to modify the mechanisms, policies, and procedures for any of those purposes while 

548 this Contract is in effect without amending this Contract. 

 

549 (j) (1) Beginning at such time as deliveries of Project Water in a Year 

550 exceed 80 percent of the Contract Total, then before the end of the month following the month of 

551 delivery the Contractor shall make an additional payment to the United States equal to the 

552 applicable Tiered Pricing Component. The Tiered Pricing Component for the amount of Water 

553 Delivered in excess of 80 percent of the Contract Total, but less than or equal to 90 percent of the 

554 Contract total, shall equal one-half of the difference between the Rate established under 

555 subdivision (a) of this Article and the Irrigation Full Cost Water Rate or M&I Full Cost Water 

556 Rate, whichever is applicable. The Tiered Pricing Component for the amount of Water delivered 

557 which exceeds 90 percent of the Contract Total shall equal the difference between (i) the Rate 
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558 established under subdivision (a) of this Article and (ii) the Irrigation Full Cost Water Rate or 

559 M&I Full Cost Water Rate, whichever is applicable. For all Water Delivered pursuant to 

560 subdivision (a) of Article 3 of this Contract which is in excess of 80 percent of the Contract 

561 Total, this increment shall be deemed to be divided between Irrigation Water and M&I Water in 

562 the same proportion as actual deliveries of each bear to the cumulative total Water Delivered. 

563 Solely for the purpose of calculating the Tiered Pricing Component, the Full Cost Rate shall not 

564 include the interest component of the Contractor's water distribution system constructed by the 

565 United States and covered by Repayment Contract No. 14-06-200-8311A entered into pursuant 

566 to 43 USC 485h(d). 

567 (2) Subject to the Contracting Officer’s written approval, the 

568 Contractor may request and receive an exemption from such Tiered Pricing Components for 

569 Project Water delivered to produce a crop which the Contracting Officer determines will provide 

570 significant and quantifiable habitat values for waterfowl in fields where the water is used and the 

571 crops are produced; Provided, That the exemption from the Tiered Pricing Component for 

572 Irrigation Water shall apply only if such habitat values can be assured consistent with the 

573 purposes of the CVPIA through binding agreements executed with or approved by the 

574 Contracting Officer prior to use of such water. 

575 (3) For purposes of determining the applicability of the Tiered Pricing 

576 Component pursuant to this Article, Water Delivered shall include Project Water that the 

577 Contractor transfers to others but shall not include Project Water transferred to the Contractor, 

578 nor shall it include the additional water provided to the Contractor under the provisions of 

579 subdivision (f) of Article 3 of this Contract. 

580 (k) For the term of this Contract, Rates under the respective ratesetting 

581 policies will be established to recover only reimbursable O&M (including any deficits) and 
Contract No. 14-06-200-399-A-LTR1 

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582 capital costs of the Project, as those terms are used in the then-current Project ratesetting 

583 policies, and interest, where appropriate, except in instances where a minimum Rate is applicable 

584 in accordance with the relevant Project ratesetting policy. Changes of significance in practices 

585 which implement the Contracting Officer’s ratesetting policies will not be implemented until the 

586 Contracting Officer has provided the Contractor an opportunity to discuss the nature, need, and 

587 impact of the proposed change. 

588 (l) Except as provided in subsections 3405(a)(1)(B) and 3405(f) of the 

589 CVPIA, the Rates for Project Water transferred by the Contractor shall be the Contractor’s Rates 

590 adjusted upward or downward to reflect the changed costs, if any, incurred by the Contracting 

591 Officer in the delivery of the transferred Project Water to the transferee’s point of delivery in 

592 accordance with the then applicable Project ratesetting policy. If the Contractor is receiving 

593 lower Rates and Charges because of inability to pay and is transferring Project Water to another 

594 entity whose Rates and Charges are not adjusted due to inability to pay, the Rates and Charges 

595 for transferred Project Water shall be the Contractor’s Rates and Charges and will not be 

596 adjusted to reflect the Contractor’s inability to pay. 

597 (m) Pursuant to the Act of October 27, 1986 (100 Stat. 3050), the Contracting 

598 Officer is authorized to adjust determinations of ability to pay every five years. 

599 (n) With respect to the Rates for M&I Water, the Contractor asserts that it is 

600 not legally obligated to repay any Project deficits claimed by the United States to have accrued 

601 as of the date of this Contract or deficit-related interest charges thereon. By entering into this 

602 Contract, the Contractor does not waive any legal rights or remedies that it may have with 

603 respect to such disputed issues. Notwithstanding the execution of this Contract, and payments 

604 made hereunder, the Contractor may challenge in the appropriate administrative or judicial 

605 forums: (1) the existence, computation, or imposition of any deficit charges accruing during the 

606 term of the Existing Contract and any preceding interim renewal contracts, if applicable; (2) 

607 interest accruing on any such deficits; (3) the inclusion of any such deficit charges or interest in 
Contract No. 14-06-200-399-A-LTR1 

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608 the Rates; (4) the application by the United States of payments made by the Contractor under its 

609 Existing Contract and any preceding interim renewal contracts, if applicable; and (5) the 

610 application of such payments in the Rates. The Contracting Officer agrees that the Contractor 

611 shall be entitled to the benefit of any administrative or judicial ruling in favor of any other 

612 Project M&I contractor on any of these issues and credits for payments heretofore made, 

613 Provided, That, the basis for such ruling is applicable to the Contractor. 

614 NON-INTEREST BEARING OPERATION AND MAINTENANCE DEFICITS

615 8. The Contractor and the Contracting Officer concur that, as of the effective date of 

616 this Contract, the Contractor has no non-interest bearing O&M deficits and shall have no further 

617 liability therefor. 

618 SALES, TRANSFERS, OR EXCHANGES OF WATER

619 9. (a) The right to receive Project Water provided for in this Contract may be 

620 sold, transferred, or exchanged to others for reasonable and beneficial uses within the State of 

621 California if such sale, transfer, or exchange is authorized by applicable Federal and State laws, 

622 and applicable guidelines or regulations then in effect. No sale, transfer, or exchange of Project 

623 Water under this Contract may take place without the prior written approval of the Contracting 

624 Officer, except as provided for in subdivision (b) of this Article, and no such sales, transfers, or 

625 exchanges shall be approved absent all appropriate environmental documentation, including but 

626 not limited to documents prepared pursuant to NEPA and ESA. Such environmental 

627 documentation should include, as appropriate, an analysis of ground-water impacts and 

628 economic and social effects, including environmental justice, of the proposed water transfers on 

629 both the transferor and transferee. 

630 (b) In order to facilitate efficient water management by means of water 

631 transfers of the type historically carried out among Project Contractors located within the same 

632 geographical area and to allow the Contractor to participate in an accelerated water transfer 

633 program during the term of this Contract, the Contracting Officer shall prepare, as appropriate, 
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634 all necessary environmental documentation including, but not limited to, documents prepared 

635 pursuant to NEPA and ESA, analyzing annual transfers within such geographical areas and the 

636 Contracting Officer shall determine whether such transfers comply with applicable law. 

637 Following the completion of the environmental documentation, such transfers addressed in such 

638 documentation shall be conducted with advance notice to the Contracting Officer, but shall not 

639 require prior written approval by the Contracting Officer. Such environmental documentation 

640 and the Contracting Officer’s compliance determination shall be reviewed every five years and 

641 updated, as necessary, prior to the expiration of the then-existing five-year period. All 

642 subsequent environmental documentation shall include an alternative to evaluate not less than the 

643 quantity of Project Water historically transferred within the same geographical area. 

644 (c) For a water transfer to qualify under subdivision (b) of this Article, such 

645 water transfer must: (i) be for irrigation purposes for lands irrigated within the previous three 

646 years, for M&I use, ground-water recharge, ground-water banking, similar ground-water 

647 activities, surface water storage, or fish and wildlife resources; not lead to land conversion; and 

648 be delivered to established cropland, wildlife refuges, ground-water basins or M&I use; (ii) occur 

649 within a single Year; (iii) occur between a willing seller and a willing buyer; (iv) convey water 

650 through existing facilities with no new construction or modifications to facilities and be between 

651 existing Project Contractors and/or the Contractor and the United States, Department of the 

652 Interior; and (v) comply with all applicable Federal, State, and local or tribal laws and 

653 requirements imposed for protection of the environment and Indian Trust Assets, as defined 

654 under Federal law. 

655 (d) For the purpose of determining whether Section 3405(a)(1)(M) of the 

656 CVPIA applies to the Contractor as a transferor or transferee of Project Water, the Contracting 

657 Officer acknowledges that the Contractor is within a county, watershed, or other area of origin, 

658 as those terms are utilized under California law, of water that constitutes the natural flow of the 
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659 Sacramento River and its tributaries above the confluence of the American and Sacramento 

660 Rivers. 

661 APPLICATION OF PAYMENTS AND ADJUSTMENTS 

662 10. (a) The amount of any overpayment by the Contractor of the Contractor’s 

663 O&M, capital, and deficit (if any) obligations for the Year shall be applied first to any current 

664 liabilities of the Contractor arising out of this Contract then due and payable. Overpayments of 

665 more than $1,000 shall be refunded at the Contractor’s request. In lieu of a refund, any amount 

666 of such overpayment, at the option of the Contractor, may be credited against amounts to become 

667 due to the United States by the Contractor. With respect to overpayment, such refund or 

668 adjustment shall constitute the sole remedy of the Contractor or anyone having or claiming to 

669 have the right to the use of any of the Project Water supply provided for herein. All credits and 

670 refunds of overpayments shall be made within 30 days of the Contracting Officer obtaining 

671 direction as to how to credit or refund such overpayment in response to the notice to the 

672 Contractor that it has finalized the accounts for the Year in which the overpayment was made. 

673 (b) All advances for miscellaneous costs incurred for work requested by the 

674 Contractor pursuant to Article 25 of this Contract shall be adjusted to reflect the actual costs 

675 when the work has been completed. If the advances exceed the actual costs incurred, the 

676 difference will be refunded to the Contractor. If the actual costs exceed the Contractor's 

677 advances, the Contractor will be billed for the additional costs pursuant to Article 25. 

678 TEMPORARY REDUCTIONS--RETURN FLOWS

679 11. (a) Subject to: (i) the authorized purposes and priorities of the Project and the 

680 requirements of Federal law; and (ii) the obligations of the United States under existing 

681 contracts, or renewals thereof, providing for water deliveries from the Project, the Contracting 

682 Officer shall make all reasonable efforts to optimize Project Water deliveries to the Contractor as 

683 provided in this Contract. 
Contract No. 14-06-200-399-A-LTR1 

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684 (b) The Contracting Officer or Operating Non-Federal Entity/Entities may 

685 temporarily discontinue or reduce the quantity of Water Delivered to the Contractor as herein 

686 provided for the purposes of investigation, inspection, maintenance, repair, or replacement of any 

687 of the Project facilities or any part thereof necessary for the delivery of Project Water to the 

688 Contractor, but so far as feasible the Contracting Officer or Operating Non-Federal Entity will 

689 give the Contractor due notice in advance of such temporary discontinuance or reduction, except 

690 in case of emergency, in which case no notice need be given; Provided, That the United States 

691 shall use its best efforts to avoid any discontinuance or reduction in such service. Upon 

692 resumption of service after such reduction or discontinuance, and if requested by the Contractor, 

693 the United States will, if possible, deliver the quantity of Project Water which would have been 

694 delivered hereunder in the absence of such discontinuance or reduction. 

695 (c) The United States reserves the right to all seepage and return flow water 

696 derived from Water Delivered to the Contractor hereunder which escapes or is discharged 

697 beyond the Contractor’s Boundaries; Provided, That this shall not be construed as claiming for 

698 the United States any right to seepage or return flow being put to reasonable and beneficial use 

699 pursuant to this Contract within the Contractor’s Boundaries by the Contractor or those claiming 

700 by, through, or under the Contractor. 

701 CONSTRAINTS ON THE AVAILABILITY OF WATER

702 12. (a) In its operation of the Project, the Contracting Officer will use all 

703 reasonable means to guard against a Condition of Shortage in the quantity of water to be made 

704 available to the Contractor pursuant to this Contract. In the event the Contracting Officer 

705 determines that a Condition of Shortage appears probable, the Contracting Officer will notify the 

706 Contractor of said determination as soon as practicable. 

707 (b) If there is a Condition of Shortage because of errors in physical operations 

708 of the Project, drought, other physical causes beyond the control of the Contracting Officer or 

709 actions taken by the Contracting Officer to meet legal obligations then, except as provided in 
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710 subdivision (a) of Article 18 of this Contract, no liability shall accrue against the United States or 

711 any of its officers, agents, or employees for any damage, direct or indirect, arising therefrom. 

712 (c) In any Year in which there may occur a shortage for any of the reasons 

713 specified in subdivision (b) above, the Contracting Officer shall apportion the available Project 

714 Water supply among the Contractor and others entitled, under existing contracts and future 

715 contracts (to the extent such future contracts are permitted under subsections (a) and (b) of 

716 Section 3404 of the CVPIA) and renewals thereof, to receive Project Water consistent with the 

717 contractual obligations of the United States. 

718 (d) Project Water furnished under this Contract will be allocated in 

719 accordance with the then-existing Project M&I Water Shortage Policy. Such policy shall be 

720 amended, modified, or superseded only through a public notice and comment procedure. 

721 UNAVOIDABLE GROUNDWATER PERCOLATION

722 13. To the extent applicable, the Contractor shall not be deemed to have delivered 

723 Irrigation Water to Excess Lands or Ineligible Lands within the meaning of this Contract if such 

724 lands are irrigated with groundwater that reaches the underground strata as an unavoidable result 

725 of the delivery of Irrigation Water by the Contractor to Eligible Lands. 

726 RULES AND REGULATIONS

727 14. The parties agree that the delivery of Irrigation Water or use of Federal facilities 

728 pursuant to this Contract is subject to Federal Reclamation law, including but not limited to the 

729 Reclamation Reform Act of 1982 (43 U.S.C.390aa et seq.), as amended and supplemented, and 

730 the rules and regulations promulgated by the Secretary of the Interior under Federal Reclamation 

731 law. 

732 WATER AND AIR POLLUTION CONTROL

733 15. The Contractor, in carrying out this Contract, shall comply with all applicable 

734 water and air pollution laws and regulations of the United States and the State of California, and 

735 shall obtain all required permits or licenses from the appropriate Federal, State, or local 

736 authorities. 
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737 QUALITY OF WATER

738 16. (a) Project facilities used to deliver Project Water to the Contractor pursuant 

739 to this Contract shall be operated and maintained to enable the United States to deliver Project 

740 Water to the Contractor in accordance with the water quality standards specified in subsection 

741 2(b) of the Act of August 26, 1937 (50 Stat. 865), as added by Section 101 of the Act of 

742 October 27, 1986 (100 Stat. 3050), or other existing Federal laws. The United States is under no 

743 obligation to construct or furnish water treatment facilities to maintain or to improve the quality 

744 of Water Delivered to the Contractor pursuant to this Contract. The United States does not 

745 warrant the quality of Water Delivered to the Contractor pursuant to this Contract. 

746 (b) The O&M of Project facilities shall be performed in such manner as is 

747 practicable to maintain the quality of raw water made available through such facilities at the 

748 highest level reasonably attainable as determined by the Contracting Officer. The Contractor 

749 shall be responsible for compliance with all State and Federal water quality standards applicable 

750 to surface and subsurface agricultural drainage discharges generated through the use of Federal 

751 or Contractor facilities or Project Water provided by the Contractor within the Contractor’s 

752 Boundaries. 

753 WATER ACQUIRED BY THE CONTRACTOR

754 OTHER THAN FROM THE UNITED STATES

755 17. (a) Water or water rights now owned or hereafter acquired by the Contractor 

756 other than from the United States and Irrigation Water furnished pursuant to the terms of this 

757 Contract may be simultaneously transported through the same distribution facilities of the 

758 Contractor subject to the following: (i) if the facilities utilized for commingling Irrigation Water 

759 and non-Project water were constructed without funds made available pursuant to Federal 

760 Reclamation law, the provisions of Federal Reclamation law will be applicable only to the 

761 Landholders of lands which receive Irrigation Water; (ii) the eligibility of land to receive 

762 Irrigation Water must be established through the certification requirements as specified in the 

763 Acreage Limitation Rules and Regulations (43 CFR Part 426); (iii) the water requirements of 
Contract No. 14-06-200-399-A-LTR1 

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764 Eligible Lands within the Contractor’s Boundaries can be established and the quantity of 

765 Irrigation Water to be utilized is less than or equal to the quantity necessary to irrigate such 

766 Eligible Lands; and (iv) if the facilities utilized for commingling Irrigation Water and 

767 non-Project water are/were constructed with funds made available pursuant to Federal 

768 Reclamation law, the non-Project water will be subject to the acreage limitation provisions of 

769 Federal Reclamation law, unless the Contractor pays to the United States the incremental fee 

770 described in 43 CFR 426.15. In determining the incremental fee, the Contracting Officer will 

771 calculate annually the cost to the Federal Government, including interest, on storing or delivering 

772 non-Project water, which for purposes of this Contract shall be determined as follows: The 

773 quotient shall be the unpaid distribution system costs divided by the total irrigable acreage within 

774 the Contractor’s Boundaries. The incremental fee per acre is the mathematical result of such 

775 quotient times the interest rate determined using Section 202 (3) of the Act of October 12, 1982 

776 (96 Stat. 1263). Such incremental fee will be charged to each acre of excess or full cost land 

777 within the Contractor’s Boundaries that receives non-Project water through Federally financed or 

778 constructed facilities. The incremental fee calculation methodology will continue during the 

779 term of this Contract absent the promulgation of a contrary Reclamation-wide rule, regulation, or 

780 policy adopted after the Contractor has been afforded the opportunity to review and comment on 

781 the proposed rule, regulation, or policy. If such rule, regulation, or policy is adopted it shall 

782 supercede this provision. 

783 (b) Water or water rights now owned or hereafter acquired by the Contractor, 

784 other than from the United States, may be stored, conveyed, and/or diverted through Project 

785 facilities, subject to the completion of appropriate environmental documentation, with the 

786 approval of the Contracting Officer and the execution of any contract determined by the 

787 Contracting Officer to be necessary, consistent with the following provisions: 

788 (1) The Contractor may introduce non-Project water into Project 

789 facilities and deliver said water to lands within the Contractor’s Boundaries, including Ineligible 
Contract No. 14-06-200-399-A-LTR1 

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790 Lands, subject to payment to the United States and/or to any applicable Operating Non-Federal 

791 Entity of an appropriate rate as determined by the applicable Project ratesetting policy, the RRA, 

792 and the Project use power policy, if such Project use power policy is applicable, each as 

793 amended, modified, or superceded from time to time. 

794 (2) Delivery of such non-Project water in and through Project facilities 

795 shall only be allowed to the extent such deliveries do not: (i) interfere with other Project 

796 purposes as determined by the Contracting Officer; (ii) reduce the quantity or quality of water 

797 available to other Project Contractors; (iii) interfere with the delivery of contractual water 

798 entitlements to any other Project Contractors; or (iv) interfere with the physical maintenance of 

799 the Project facilities. 

800 (3) Neither the United States nor the Operating Non-Federal Entity 

801 shall be responsible for control, care, or distribution of the non-Project water before it is 

802 introduced into or after it is delivered from the Project facilities. The Contractor hereby releases 

803 and agrees to defend and indemnify the United States and the Operating Non-Federal Entity, and 

804 their respective officers, agents, and employees, from any claim for damage to persons or 

805 property, direct or indirect, resulting from the acts of the Contractor, its officers’, employees’, 

806 agents’ or assigns’, act(s) in (i) extracting or diverting non-Project water from any source, or (ii) 

807 diverting such non-Project water into Project facilities. 

808 (4) Diversion of such non-Project water into Project facilities shall be 

809 consistent with all applicable laws, and if involving groundwater, consistent with any applicable 

810 ground-water management plan for the area from which it was extracted. 

811 (5) After Project purposes are met, as determined by the Contracting 

812 Officer, the United States and the Contractor shall share priority to utilize the remaining capacity 

813 of the facilities declared to be available by the Contracting Officer for conveyance and 

814 transportation of non-Project water prior to any such remaining capacity being made available to 

815 non-Project contractors. 
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816 OPINIONS AND DETERMINATIONS

817 18. (a) Where the terms of this Contract provide for actions to be based upon the 

818 opinion or determination of either party to this Contract, said terms shall not be construed as 

819 permitting such action to be predicated upon arbitrary, capricious, or unreasonable opinions or 

820 determinations. Both parties, notwithstanding any other provisions of this Contract, expressly 

821 reserve the right to seek relief from and appropriate adjustment for any such arbitrary, capricious, 

822 or unreasonable opinion or determination. Each opinion or determination by either party shall be 

823 provided in a timely manner. Nothing in subdivision (a) of Article 18 of this Contract is 

824 intended to or shall affect or alter the standard of judicial review applicable under Federal law to 

825 any opinion or determination implementing a specific provision of Federal law embodied in 

826 statute or regulation. 

827 (b) The Contracting Officer shall have the right to make determinations 

828 necessary to administer this Contract that are consistent with the provisions of this Contract, the 

829 laws of the United States and of the State of California, and the rules and regulations 

830 promulgated by the Secretary of the Interior. Such determinations shall be made in consultation 

831 with the Contractor to the extent reasonably practicable. 

832 COORDINATION AND COOPERATION

833 19. (a) In order to further their mutual goals and objectives, the Contracting 

834 Officer and the Contractor shall communicate, coordinate, and cooperate with each other, and 

835 with other affected Project Contractors, in order to improve the operation and management of the 

836 Project. The communication, coordination, and cooperation regarding operations and 

837 management shall include, but not be limited to, any action which will or may materially affect 

838 the quantity or quality of Project Water supply, the allocation of Project Water supply, and 

839 Project financial matters including, but not limited to, budget issues. The communication, 

840 coordination, and cooperation provided for hereunder shall extend to all provisions of this 
Contract No. 14-06-200-399-A-LTR1 

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841 Contract. Each party shall retain exclusive decision making authority for all actions, opinions, 

842 and determinations to be made by the respective party. 

843 (b) Within 120 days following the effective date of this Contract, the 

844 Contractor, other affected Project Contractors, and the Contracting Officer shall arrange to meet 

845 with interested Project Contractors to develop a mutually agreeable, written Project-wide 

846 process, which may be amended as necessary separate and apart from this Contract. The goal of 

847 this process shall be to provide, to the extent practicable, the means of mutual communication 

848 and interaction regarding significant decisions concerning Project operation and management on 

849 a real-time basis. 

850 (c) In light of the factors referred to in subdivision (b) of Article 3 of this 

851 Contract, it is the intent of the Secretary to improve water supply reliability. To carry out this 

852 intent: 

853 (1) The Contracting Officer will, at the request of the Contractor, 

854 assist in the development of integrated resource management plans for the Contractor. Further, 

855 the Contracting Officer will, as appropriate, seek authorizations for implementation of 

856 partnerships to improve water supply, water quality, and reliability. 

857 (2) The Secretary will, as appropriate, pursue program and project 

858 implementation and authorization in coordination with Project Contractors to improve the water 

859 supply, water quality, and reliability of the Project for all Project purposes. 

860 (3) The Secretary will coordinate with Project Contractors and the 

861 State of California to seek improved water resource management. 

862 (4) The Secretary will coordinate actions of agencies within the 

863 Department of the Interior that may impact the availability of water for Project purposes. 

864 (5) The Contracting Officer shall periodically, but not less than 

865 annually, hold division level meetings to discuss Project operations, division level water 

866 management activities, and other issues as appropriate. 
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867 (d) Without limiting the contractual obligations of the Contracting Officer 

868 under the other Articles of this Contract, nothing in this Article shall be construed to limit or 

869 constrain the Contracting Officer’s ability to communicate, coordinate, and cooperate with the 

870 Contractor or other interested stakeholders or to make decisions in a timely fashion as needed to 

871 protect health, safety, or the physical integrity of structures or facilities. 

872 CHARGES FOR DELINQUENT PAYMENTS

873 20. (a) The Contractor shall be subject to interest, administrative and penalty 

874 charges on delinquent installments or payments. When a payment is not received by the due 

875 date, the Contractor shall pay an interest charge for each day the payment is delinquent beyond 

876 the due date. When a payment becomes sixty (60) days delinquent, the Contractor shall pay an 

877 administrative charge to cover additional costs of billing and processing the delinquent payment. 

878 When a payment is delinquent ninety (90) days or more, the Contractor shall pay an additional 

879 penalty charge of six (6%) percent per year for each day the payment is delinquent beyond the 

880 due date. Further, the Contractor shall pay any fees incurred for debt collection services 

881 associated with a delinquent payment. 

882 (b) The interest charge rate shall be the greater of the rate prescribed quarterly 

883 in the Federal Register by the Department of the Treasury for application to overdue payments, 

884 or the interest rate of one-half of one (0.5%) percent per month prescribed by Section 6 of the 

885 Reclamation Project Act of 1939 (Public Law 76-260). The interest charge rate shall be 

886 determined as of the due date and remain fixed for the duration of the delinquent period. 

887 (c) When a partial payment on a delinquent account is received, the amount 

888 received shall be applied, first to the penalty, second to the administrative charges, third to the 

889 accrued interest, and finally to the overdue payment. 

890 EQUAL OPPORTUNITY

891 21. During the performance of this Contract, the Contractor agrees as follows: 

892 (a) The Contractor will not discriminate against any employee or applicant for 

893 employment because of race, color, religion, sex, or national origin. The Contractor will take 

894 affirmative action to ensure that applicants are employed, and that employees are treated during 

895 employment, without regard to their race, color, religion, sex, or national origin. Such action 

896 shall include, but not be limited to, the following: Employment, upgrading, demotion, or 

897 transfer; recruitment or recruitment advertising; layoff or termination, rates of payment or other 

898 forms of compensation; and selection for training, including apprenticeship. The Contractor 

899 agrees to post in conspicuous places, available to employees and applicants for employment, 

900 notices to be provided by the Contracting Officer setting forth the provisions of this 

901 nondiscrimination clause. 
Contract No. 14-06-200-399-A-LTR1 

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902 (b) The Contractor will, in all solicitations or advertisements for employees 

903 placed by or on behalf of the Contractor, state that all qualified applicants will receive 

904 consideration for employment without discrimination because of race, color, religion, sex, or 

905 national origin. 

906 (c) The Contractor will send to each labor union or representative of workers 

907 with which it has a collective bargaining agreement or other contract or understanding, a notice, 

908 to be provided by the Contracting Officer, advising the said labor union or workers' 

909 representative of the Contractor's commitments under Section 202 of Executive Order 11246 of 

910 September 24, 1965, and shall post copies of the notice in conspicuous places available to 

911 employees and applicants for employment. 

912 (d) The Contractor will comply with all provisions of Executive Order 

913 No. 11246 of September 24, 1965, as amended, and of the rules, regulations, and relevant orders 

914 of the Secretary of Labor. 

915 (e) The Contractor will furnish all information and reports required by said 

916 amended Executive Order and by the rules, regulations, and orders of the Secretary of Labor, or 

917 pursuant thereto, and will permit access to its books, records, and accounts by the Contracting 

918 Officer and the Secretary of Labor for purposes of investigation to ascertain compliance with 

919 such rules, regulations, and orders. 

920 (f) In the event of the Contractor's noncompliance with the nondiscrimination 

921 clauses of this Contract or with any of the said rules, regulations, or orders, this Contract may be 

922 canceled, terminated, or suspended, in whole or in part, and the Contractor may be declared 

923 ineligible for further Government contracts in accordance with procedures authorized in said 

924 amended Executive Order, and such other sanctions may be imposed and remedies invoked as 

925 provided in said Executive Order, or by rule, regulation, or order of the Secretary of Labor, or as 

926 otherwise provided by law. 

927 (g) The Contractor will include the provisions of paragraphs (a) through (g) in 

928 every subcontract or purchase order unless exempted by the rules, regulations, or orders of the 

929 Secretary of Labor issued pursuant to Section 204 of said amended Executive Order, so that such 

930 provisions will be binding upon each subcontractor or vendor. The Contractor will take such 

931 action with respect to any subcontract or purchase order as may be directed by the Secretary of 

932 Labor as a means of enforcing such provisions, including sanctions for noncompliance: 

933 Provided, however, That in the event the Contractor becomes involved in, or is threatened with, 

934 litigation with a subcontractor or vendor as a result of such direction, the Contractor may request 

935 the United States to enter into such litigation to protect the interests of the United States. 

936 GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT

937 22. (a) The obligation of the Contractor to pay the United States as provided in 

938 this Contract is a general obligation of the Contractor notwithstanding the manner in which the 

939 obligation may be distributed among the Contractor's water users and notwithstanding the default 

940 of individual water users in their obligations to the Contractor. 
Contract No. 14-06-200-399-A-LTR1 

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941 (b) The payment of charges becoming due hereunder is a condition precedent 

942 to receiving benefits under this Contract. The United States shall not make water available to the 

943 Contractor through Project facilities during any period in which the Contractor may be in arrears 

944 in the advance payment of water rates due the United States. The Contractor shall not furnish 

945 water made available pursuant to this Contract for lands or parties which are in arrears in the 

946 advance payment of water rates levied or established by the Contractor. 

947 (c) With respect to subdivision (b) of this Article, the Contractor shall have no 

948 obligation to require advance payment for water rates which it levies. 

949 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

950 23. (a) The Contractor shall comply with Title VI of the Civil Rights Act of 1964 

951 (42 U.S.C. 2000d), Section 504 of the Rehabilitation Act of 1975 (P.L. 93-112, as amended), the 

952 Age Discrimination Act of 1975 (42 U.S.C. 6101, et seq.) and any other applicable civil rights 

953 laws, as well as with their respective implementing regulations and guidelines imposed by the 

954 U.S. Department of the Interior and/or Bureau of Reclamation. 

955 (b) These statutes require that no person in the United States shall, on the 

956 grounds of race, color, national origin, handicap, or age, be excluded from participation in, be 

957 denied the benefits of, or be otherwise subjected to discrimination under any program or activity 

958 receiving financial assistance from the Bureau of Reclamation. By executing this Contract, the 

959 Contractor agrees to immediately take any measures necessary to implement this obligation, 

960 including permitting officials of the United States to inspect premises, programs, and documents. 

961 (c) The Contractor makes this agreement in consideration of and for the 

962 purpose of obtaining any and all Federal grants, loans, contracts, property discounts, or other 

963 Federal financial assistance extended after the date hereof to the Contractor by the Bureau of 

964 Reclamation, including installment payments after such date on account of arrangements for 

965 Federal financial assistance which were approved before such date. The Contractor recognizes 

966 and agrees that such Federal assistance will be extended in reliance on the representations and 

967 agreements made in this Article, and that the United States reserves the right to seek judicial 

968 enforcement thereof. 

969 PRIVACY ACT COMPLIANCE

970 24. (a) The Contractor shall comply with the Privacy Act of 1974 (5 U.S.C. 552a) 

971 (the Act) and the Department of the Interior rules and regulations under the Act (43 CFR 2.45 et 

972 seq.) in maintaining Landholder acreage certification and reporting records, required to be 

973 submitted to the Contractor for compliance with Sections 206 and 228 of the Reclamation 

974 Reform Act of 1982 (96 Stat. 1266), and pursuant to 43 CFR 426.18. 

975 (b) With respect to the application and administration of the criminal penalty 

976 provisions of the Act (5 U.S.C. 552a(i)), the Contractor and the Contractor's employees 

977 responsible for maintaining the certification and reporting records referenced in (a) above are 

978 considered to be employees of the Department of the Interior. See 5 U.S.C. 552a(m). 
Contract No. 14-06-200-399-A-LTR1 

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979 (c) The Contracting Officer or a designated representative shall provide the 

980 Contractor with current copies of the Interior Department Privacy Act regulations and the Bureau 

981 of Reclamation Federal Register Privacy Act System of Records Notice (Acreage Limitation--

982 Interior, Reclamation-31) which govern the maintenance, safeguarding, and disclosure of 

983 information contained in the Landholder's certification and reporting records. 

984 (d) The Contracting Officer shall designate a full-time employee of the 

985 Bureau of Reclamation to be the System Manager who shall be responsible for making decisions 

986 on denials pursuant to 43 CFR 2.61 and 2.64 amendment requests pursuant to 43 CFR 2.72. The 

987 Contractor is authorized to grant requests by individuals for access to their own records. 

988 (e) The Contractor shall forward promptly to the System Manager each 

989 proposed denial of access under 43 CFR 2.64; and each request for amendment of records filed 

990 under 43 CFR 2.71; notify the requester accordingly of such referral; and provide the System 

991 Manager with information and records necessary to prepare an appropriate response to the 

992 requester. These requirements do not apply to individuals seeking access to their own 

993 certification and reporting forms filed with the Contractor pursuant to 43 CFR 426.18, unless the 

994 requester elects to cite the Privacy Act as a basis for the request. 

995 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

996 25. In addition to all other payments to be made by the Contractor pursuant to this 

997 Contract, the Contractor shall pay to the United States, within 60 days after receipt of a bill and 

998 detailed statement submitted by the Contracting Officer to the Contractor for such specific items 

999 of direct cost incurred by the United States for work requested by the Contractor associated with 

1000 this Contract plus indirect costs in accordance with applicable Bureau of Reclamation policies 

1001 and procedures. All such amounts referred to in this Article shall not exceed the amount agreed 

1002 to in writing in advance by the Contractor. This Article shall not apply to costs for routine 

1003 contract administration. 

1004 WATER CONSERVATION

1005 26. (a) Prior to the delivery of water provided from or conveyed through 

1006 Federally constructed or Federally financed facilities pursuant to this Contract, the Contractor 

1007 shall be implementing an effective water conservation and efficiency program based on the 

1008 Contractor's water conservation plan that has been determined by the Contracting Officer to meet 

1009 the conservation and efficiency criteria for evaluating water conservation plans established under 

1010 Federal law. The water conservation and efficiency program shall contain definite water 
Contract No. 14-06-200-399-A-LTR1 

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1011 conservation objectives, appropriate economically feasible water conservation measures, and 

1012 time schedules for meeting those objectives. Continued Project Water delivery pursuant to this 

1013 Contract shall be contingent upon the Contractor’s continued implementation of such water 

1014 conservation program. In the event the Contractor's water conservation plan or any revised water 

1015 conservation plan completed pursuant to subdivision (d) of Article 26 of this Contract have not 

1016 yet been determined by the Contracting Officer to meet such criteria, due to circumstances which 

1017 the Contracting Officer determines are beyond the control of the Contractor, water deliveries 

1018 shall be made under this Contract so long as the Contractor diligently works with the Contracting 

1019 Officer to obtain such determination at the earliest practicable date, and thereafter the Contractor 

1020 immediately begins implementing its water conservation and efficiency program in accordance 

1021 with the time schedules therein. 

1022 (b) Should the amount of M&I Water delivered pursuant to subdivision (a) of 

1023 Article 3 of this Contract equal or exceed 2,000 acre-feet per Year, the Contractor shall 

1024 implement the Best Management Practices identified by the time frames issued by the California 

1025 Urban Water Conservation Council for such M&I Water unless any such practice is determined 

1026 by the Contracting Officer to be inappropriate for the Contractor. 

1027 (c) The Contractor shall submit to the Contracting Officer a report on the 

1028 status of its implementation of the water conservation plan on the reporting dates specified in the 

1029 then existing conservation and efficiency criteria established under Federal law. 

1030 (d) At five-year intervals, the Contractor shall revise its water conservation 

1031 plan to reflect the then-current conservation and efficiency criteria for evaluating water 

1032 conservation plans established under Federal law and submit such revised water management 

1033 plan to the Contracting Officer for review and evaluation. The Contracting Officer will then 

1034 determine if the water conservation plan meets Reclamation’s then-current conservation and 

1035 efficiency criteria for evaluating water conservation plans established under Federal law. 
Contract No. 14-06-200-399-A-LTR1 

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1036 (e) If the Contractor is engaged in direct ground-water recharge, such activity 

1037 shall be described in the Contractor’s water conservation plan. 

1038 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

1039 27. Except as specifically provided in Article 17 of this Contract, the provisions of 

1040 this Contract shall not be applicable to or affect non-Project water or water rights now owned or 

1041 hereafter acquired by the Contractor or any user of such water within the Contractor’s 

1042 Boundaries. Any such water shall not be considered Project Water under this Contract. In 

1043 addition, this Contract shall not be construed as limiting or curtailing any rights which the 

1044 Contractor or any water user within the Contractor’s Boundaries acquires or has available under 

1045 any other contract pursuant to Federal Reclamation law. 

1046 OPERATION AND MAINTENANCE BY OPERATING NON-FEDERAL ENTITY

1047 28. (a) The O&M of a portion of the Project facilities which serve the Contractor, 

1048 and responsibility for funding a portion of the costs of such O&M, have been transferred to the 

1049 Operating Non-Federal Entity by separate agreement between the United States and the 

1050 Operating Non-Federal Entity. That separate agreement shall not interfere with or affect the 

1051 rights or obligations of the Contractor or the United States hereunder. 

1052 (b) The Contracting Officer has previously notified the Contractor in writing 

1053 that the O&M of a portion of the Project facilities which serve the Contractor has been 

1054 transferred to the Operating Non-Federal Entity, and therefore, the Contractor shall pay directly 

1055 to the Operating Non-Federal Entity, or to any successor approved by the Contracting Officer 

1056 under the terms and conditions of the separate agreement between the United States and the 

1057 Operating Non-Federal Entity described in subdivision (a) of this Article, all rates, charges, or 

1058 assessments of any kind, including any assessment for reserve funds, which the Operating Non1059 Federal Entity or such successor determines, sets, or establishes for the O&M of the portion of 

1060 the Project facilities operated and maintained by the Operating Non-Federal Entity or such 

1061 successor. Such direct payments to the Operating Non-Federal Entity or such successor shall not 
Contract No. 14-06-200-399-A-LTR1 

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1062 relieve the Contractor of its obligation to pay directly to the United States the Contractor’s share 

1063 of the Project Rates, Charges, and Tiered Pricing Component(s) except to the extent the 

1064 Operating Non-Federal Entity collects payments on behalf of the United States in accordance 

1065 with the separate agreement identified in subdivision (a) of this Article. 

1066 (c) For so long as the O&M of any portion of the Project facilities serving the 

1067 Contractor is performed by the Operating Non-Federal Entity, or any successor thereto, the 

1068 Contracting Officer shall adjust those components of the Rates for Water Delivered under this 

1069 Contract representing the cost associated with the activity being performed by the Operating 

1070 Non-Federal Entity or its successor. 

1071 (d) In the event the O&M of the Project facilities operated and maintained by 

1072 the Operating Non-Federal Entity is re-assumed by the United States during the term of this 

1073 Contract, the Contracting Officer shall so notify the Contractor, in writing, and present to the 

1074 Contractor a revised Exhibit “B” which shall include the portion of the Rates to be paid by the 

1075 Contractor for Project Water under this Contract representing the O&M costs of the portion of 

1076 such Project facilities which have been re-assumed. The Contractor shall, thereafter, in the 

1077 absence of written notification from the Contracting Officer to the contrary, pay the Rates, 

1078 Charges, and Tiered Pricing Component(s) specified in the revised Exhibit “B” directly to the 

1079 United States in compliance with Article 7 of this Contract. 

1080 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

1081 29. The expenditure or advance of any money or the performance of any obligation of 

1082 the United States under this Contract shall be contingent upon appropriation or allotment of 

1083 funds. Absence of appropriation or allotment of funds shall not relieve the Contractor from any 

1084 obligations under this Contract. No liability shall accrue to the United States in case funds are 

1085 not appropriated or allotted. 

1086 BOOKS, RECORDS, AND REPORTS

1087 30. (a) The Contractor shall establish and maintain accounts and other books and 

1088 records pertaining to administration of the terms and conditions of this Contract, including: the 

1089 Contractor's financial transactions, water supply data, and Project land and right-of-way 

1090 agreements; the water users' land-use (crop census), land ownership, land-leasing and water use 
Contract No. 14-06-200-399-A-LTR1 

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1091 data; and other matters that the Contracting Officer may require. Reports thereon shall be 

1092 furnished to the Contracting Officer in such form and on such date or dates as the Contracting 

1093 Officer may require. Subject to applicable Federal laws and regulations, each party to this 

1094 Contract shall have the right during office hours to examine and make copies of the other party's 

1095 books and records relating to matters covered by this Contract. 

1096 (b) Notwithstanding the provisions of subdivision (a) of this Article, no 

1097 books, records, or other information shall be requested from the Contractor by the Contracting 

1098 Officer unless such books, records, or information are reasonably related to the administration or 

1099 performance of this Contract. Any such request shall allow the Contractor a reasonable period of 

1100 time within which to provide the requested books, records, or information. 

1101 (c) At such time as the Contractor provides information to the Contracting 

1102 Officer pursuant to subdivision (a) of this Article, a copy of such information shall be provided 

1103 to the Operating Non-Federal Entity. 

1104 ASSIGNMENT LIMITED--SUCCESSORS AND ASSIGNS OBLIGATED

1105 31. (a) The provisions of this Contract shall apply to and bind the successors and 

1106 assigns of the parties hereto, but no assignment or transfer of this Contract or any right or interest 

1107 therein shall be valid until approved in writing by the Contracting Officer. 

1108 (b) The assignment of any right or interest in this Contract by either party 

1109 shall not interfere with the rights or obligations of the other party to this Contract absent the 

1110 written concurrence of said other party. 

1111 (c) The Contracting Officer shall not unreasonably condition or withhold his 

1112 approval of any proposed assignment. 

1113 SEVERABILITY

1114 32. In the event that a person or entity who is neither (i) a party to a Project contract, 

1115 nor (ii) a person or entity that receives Project Water from a party to a Project contract, nor (iii) 

1116 an association or other form of organization whose primary function is to represent parties to 

1117 Project contracts, brings an action in a court of competent jurisdiction challenging the legality or 

1118 enforceability of a provision included in this Contract and said person, entity, association, or 

1119 organization obtains a final court decision holding that such provision is legally invalid or 

1120 unenforceable and the Contractor has not intervened in that lawsuit in support of the plaintiff(s), 

1121 the parties to this Contract shall use their best efforts to (i) within 30 days of the date of such 
Contract No. 14-06-200-399-A-LTR1 

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1122 final court decision identify by mutual agreement the provisions in this Contract which must be 

1123 revised, and (ii) within three months thereafter promptly agree on the appropriate revision(s). 

1124 The time periods specified above may be extended by mutual agreement of the parties. Pending 

1125 the completion of the actions designated above, to the extent it can do so without violating any 

1126 applicable provisions of law, the United States shall continue to make the quantities of Project 

1127 Water specified in this Contract available to the Contractor pursuant to the provisions of this 

1128 Contract which were not found to be legally invalid or unenforceable in the final court decision. 

1129 RESOLUTION OF DISPUTES

1130 33. Should any dispute arise concerning any provisions of this Contract, or the 

1131 parties’ rights and obligations thereunder, the parties shall meet and confer in an attempt to 

1132 resolve the dispute. Prior to the Contractor commencing any legal action, or the Contracting 

1133 Officer referring any matter to Department of Justice, the party shall provide to the other party 

1134 30 days’ written notice of the intent to take such action; Provided, That such notice shall not be 

1135 required where a delay in commencing an action would prejudice the interests of the party that 

1136 intends to file suit. During the 30-day notice period, the Contractor and the Contracting Officer 

1137 shall meet and confer in an attempt to resolve the dispute. Except as specifically provided, 

1138 nothing herein is intended to waive or abridge any right or remedy that the Contractor or the 

1139 United States may have. 

1140 OFFICIALS NOT TO BENEFIT

1141 34. No Member of or Delegate to Congress, Resident Commissioner, or official of the 

1142 Contractor shall benefit from this Contract other than as a water user or landowner in the same 

1143 manner as other water users or landowners. 

1144 CHANGES IN CONTRACTOR’S BOUNDARIES

1145 35. (a) While this Contract is in effect, no change may be made in the 

1146 Contractor’s Boundaries, by inclusion or exclusion of lands, dissolution, consolidation, merger, 

1147 or otherwise, except upon the Contracting Officer's written consent. 

1148 (b) Within 30 days of receipt of a request for such a change, the Contracting 

1149 Officer will notify the Contractor of any additional information required by the Contracting 
Contract No. 14-06-200-399-A-LTR1 

44

1150 Officer for processing said request, and both parties will meet to establish a mutually agreeable 

1151 schedule for timely completion of the process. Such process will analyze whether the proposed 

1152 change is likely to: (i) result in the use of Project Water contrary to the terms of this Contract; 

1153 (ii) impair the ability of the Contractor to pay for Project Water furnished under this Contract or 

1154 to pay for any Federally-constructed facilities for which the Contractor is responsible; and (iii) 

1155 have an impact on any Project Water rights applications, permits, or licenses. In addition, the 

1156 Contracting Officer shall comply with the NEPA and the ESA. The Contractor will be 

1157 responsible for all costs incurred by the Contracting Officer in this process, and such costs will 

1158 be paid in accordance with Article 25 of this Contract. 

1159 FEDERAL LAWS

1160 36. By entering into this Contract, the Contractor does not waive its rights to contest 

1161 the validity or application in connection with the performance of the terms and conditions of this 

1162 Contract of any Federal law or regulation; Provided, That the Contractor agrees to comply with 

1163 the terms and conditions of this Contract unless and until relief from application of such Federal 

1164 law or regulation to the implementing provision of the Contract is granted by a court of 

1165 competent jurisdiction. 

1166 NOTICES

1167 37. Any notice, demand, or request authorized or required by this Contract shall be 

1168 deemed to have been given, on behalf of the Contractor, when mailed, postage prepaid, or 

1169 delivered to the Area Manager, Bureau of Reclamation, Northern California Area Office, 16349 

1170 Shasta Dam Boulevard, Shasta Lake, California 96019, and on behalf of the United States, when 

1171 mailed, postage prepaid, or delivered to the Board of Directors of the Dunnigan Water District, 

1172 P. O. Box 84, 3817 First Street, Dunnigan, California 95937. The designation of the addressee 

1173 or the address may be changed by notice given in the same manner as provided in this Article for 

1174 other notices. 

1175 CONFIRMATION OF CONTRACT

1176 38. The Contractor, after the execution of this Contract, shall promptly seek to secure 

1177 a decree of a court of competent jurisdiction of the State of California, confirming the execution 

1178 of this Contract. The Contractor shall furnish the United States a certified copy of the final 

1179 decree, the validation proceedings, and all pertinent supporting records of the court approving 
Contract No. 14-06-200-399-A-LTR1 

45

1180 and confirming this Contract, and decreeing and adjudging it to be lawful, valid, and binding on 

1181 the Contractor. 

1182 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of 

1183 the day and year first above written. 

1184 THE UNITED STATES OF AMERICA 

1185 By: ______________________________________ 

1186 Regional Director, Mid-Pacific Region 

1187 Bureau of Reclamation 

1188 DUNNIGAN WATER DISTRICT 

1189 By: ______________________________________ 

1190 President of the Board of Directors 

1191 Attest: 

1192 By: _______________________________ 

1193 Secretary of the Board of Directors 

1194 (I:\LTRC\LTRC Drafts\04-19-2004-01 Dunnigan WD Final LTRC Draft Contract.doc) 
Contract No. 14-06-200-399-A-LTR1 

EXHIBIT A

[Map or Description of Boundaries]
Contract No. 14-06-200-399-A-LTR1 

EXHIBIT B 

Rates and Charges 

DUNNIGAN WATER DISTRICT 

 

 2003 Rates Per Acre-Foot 

 Irrigation M&I

CONTRACT RATE * $14.18 

(1st Tier - <80% of Contract Total) 

 

2ND TIER [>80% <90% of Contract Total] $28.42 

(Sec. 202(3) Full Cost Rate + Contract Rate/ 2) ** 

 

3RD TIER [> 90% of Contract Total] $42.65 

(Sec. 202(3) Full Cost Rate) ** 

FULL-COST RATES: ** 

RRA Section 202(3) rate is applicable to 

Qualified Recipients or to Limited 

Recipients receiving irrigation water 

on or before October 1, 1981. $94.85 

RRA Section 205(a)(3) rate is applicable 

to Limited Recipients that did not 

receive irrigation water on or before 

October 1, 1981. $98.98 

SURCHARGES UNDER P.L. 102-575 TO 

RESTORATION FUND*** 

Restoration Payments [3407(d)(2)(A)] $0.00 

* Capital component of cost-of-service rate is not included in Contract Rate due to ability to pay relief for 

Contractor established pursuant to the results of the Payment Capacity Analysis for the Tehama-Colusa 

Water Users Association Service Area as announced by letter dated February 10, 1995. 

** Contractors with 9(d) distribution systems do not have the 9(d) Full Cost component included for 

tiered pricing calculations. See Article 1(j). 

*** These surcharges are payments in addition to the water rates and are determined pursuant to Title 

XXXIV of P.L. 102-575. Restoration Fund surcharges under P.L. 102-575 are on a fiscal year basis (10/1 

-9/30). Contractors with ability to pay relief do not pay Restoration Fund charges for irrigation water. 

Note: Additional detail of rate components is available on the Internet at 

http:/www.mp.usbr.gov/ cvpwaterrates/.