M&I Only 

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

Mountain Gate Draft 3/01-2004 

Mountain Gate Draft 7/22-2003 

Mountain Gate Draft 7/18-2003 

Mountain Gate Draft 6/27-2003 

Shasta/Trinity Division Draft 6/16-2003 

CVP-Wide Draft 5/23-2003 

Contract No. 

 14-06-200-6998-LTR1 

UNITED STATES 

DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

Central Valley Project, California 

LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES 

AND

MOUNTAIN GATE COMMUNITY SERVICES DISTRICT

PROVIDING FOR PROJECT WATER SERVICE

FROM THE SHASTA DIVISION

Table of Contents

Article No. Title Page No.

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

 Explanatory Recitals ............................................................................................ 2-5 

 1 Definitions............................................................................................................ 5-8 

 2 Term of Contract..................................................................................................8-9 

 3 Water to be Made Available and Delivered to the Contractor...........................9-13 

 4 Time for Delivery of Water .............................................................................13-14 

 5 Point of Diversion and Responsibility for Distribution of Water....................14-15 

 6 Measurement of Water Within the Contractor’s Service Area........................15-17 

 7 Rates and Method of Payment for Water.........................................................17-22 

 8 Non-Interest Bearing Operation and Maintenance Deficits.................................. 22 

 9 Sales, Transfers, or Exchanges of Water .........................................................22-24 

 10 Application of Payments and Adjustments........................................................... 24 

 11 Temporary Reductions--Return Flows ................................................................. 25 

 12 Constraints on the Availability of Water .........................................................25-26 

 13 Unavoidable Groundwater Percolation................................................................. 26 

 14 Rules and Regulations........................................................................................... 26 

 15 Water and Air Pollution Control........................................................................... 27 

 16 Quality of Water ................................................................................................... 27 

 17 Water Acquired by the Contractor Other Than From the United States..........27-29 

 18 Opinions and Determinations ............................................................................... 29 

 19 Coordination and Cooperation.........................................................................29-31 

 20 Charges for Delinquent Payments ...................................................................31-32 
Contract No. 14-06-200-6998-LTR1 

Table of Contents - continued

Article No. Title Page No.

 21 Equal Opportunity............................................................................................32-33 

 22 General Obligation--Benefits Conditioned Upon Payment .................................. 33 

 23 Compliance With Civil Rights Laws and Regulations ....................................33-34 

 24 Privacy Act Compliance ....................................................................................... 34 

 25 Contractor to Pay Certain Miscellaneous Costs.................................................... 34 

 26 Water Conservation .........................................................................................34-35 

 27 Existing or Acquired Water or Water Rights........................................................ 36 

 28 Operation and Maintenance by Operating Non-Federal Entity ............................ 36 

 29 Contingent on Appropriation or Allotment of Funds ........................................... 36 

 30 Books, Records, and Reports........................................................................... 36-37 

 31 Assignment Limited--Successors and Assigns Obligated .................................... 37 

 32 Severability ........................................................................................................... 37 

 33 Resolution of Disputes.......................................................................................... 38 

 34 Officials Not to Benefit......................................................................................... 38 

 35 Changes in Contractor’s Service Area............................................................. 38-39 

 36 Federal Laws......................................................................................................... 39 

 37 Notices .................................................................................................................. 39

 38 Confirmation of Contract...................................................................................... 39 

 Signature Page ...................................................................................................... 40 

 

 Exhibit A - Map of Contractor’s Service Area 

 

 Exhibit B - Rates and Charges
M&I Only 

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

Mountain Gate Draft 3/01-2004 

Mountain Gate Draft 7/22-2003 

Mountain Gate Draft 7/18-2003 

Mountain Gate Draft 6/27-2003 

Shasta/Trinity Division Draft 6/16-2003 

CVP-Wide Draft 5/23-2003 

Contract No. 

 14-06-200-6998-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 MOUNTAIN GATE COMMUNITY SERVICES DISTRICT

8 PROVIDING FOR PROJECT WATER SERVICE

9 FROM THE SHASTA 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), 

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

14 July 2, 1956 (70 Stat. 483), June 21, 1963 (77 Stat. 68), October 12, 1982 (96 Stat. 1263), 

15 October 27, 1986 (100 Stat. 3050), as amended, and Title XXXIV of the Act of October 30, 1992 

16 (106 Stat. 4706), all collectively hereinafter referred to as Federal Reclamation law, between 

17 THE UNITED STATES OF AMERICA, hereinafter referred to as the United States, and 

18 MOUNTAIN GATE COMMUNITY SERVICES DISTRICT, hereinafter referred to as the 

19 Contractor, a public agency of the State of California, duly organized, existing, and acting 

20 pursuant to the laws thereof; 

21 WITNESSETH, That: 
Contract No. 14-06-200-6998-LTR1 

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22 EXPLANATORY RECITALS

 [1st 23 ] WHEREAS, the United States has constructed and is operating the Central Valley 

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

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

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

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

28 and the San Joaquin River and their tributaries; and 

 [2nd 29 ] WHEREAS, the United States constructed the Shasta Dam and Reservoir which 

30 will be used in the furnishing of water to the Contractor pursuant to the terms of this Contract; 

31 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. 14-06-200-6998, as amended by letter of Agreement dated November 21, 1975, which 

36 established terms for the delivery to the Contractor of Project Water from the Shasta Division 

37 from March 12, 1958, through July 31, 2003; 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). 14-06-200-6998-IR1 and 14-06-200-

41 6998-IR2, the current of which is hereinafter referred to as the Existing Contract, which provided 

42 for the continued water service to the Contractor from March 1, 2004, through February 28, 

43 2006; and 

44 [5.1] WHEREAS, the Shasta County Water Agency and the United States entered into 

45 Contract No. 14-06-200-3367A, as amended, which established terms for the delivery to the 

46 Shasta County Water Agency of up to 5,000 acre-feet per year of Project Water from the Project 

47 facilities from June 30, 1967, through December 31, 2004; and 
Contract No. 14-06-200-6998-LTR1 

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48 [5.2] WHEREAS, the Shasta County Water Agency and Mountain Gate Community 

49 Services District entered into a partial assignment on ______________, identified as Contract 

50 No. 14-06-200-3367___, to permanently assign to Mountain Gate Community Services District 

51 1,000 acre-feet of the Project Water made available to the Shasta County Water Agency pursuant 

52 to Contract No. 14-06-200-3367A; and 

53 [5.3] WHEREAS, the Contractor desires to merge the Existing Contract and Contract 

54 No. 14-06-200-3367___ into a single contract identified as Contract No.14-06-200-6998-LTR1 

55 and the United States is willing to consent to such merger; and 

 [6th 56 ] WHEREAS, Section 3404(c) of the CVPIA provides for long-term renewal of the 

57 Existing Contract following completion of appropriate environmental documentation, including a 

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

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

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

 [7th 61 ] WHEREAS, the United States has completed the PEIS and all other appropriate 

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

 [8th 63 ] WHEREAS, the Contractor has requested the long-term renewal of the Existing 

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

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

 [9th 66 ] WHEREAS, the United States has determined that the Contractor has fulfilled all 

67 of its obligations under the Existing Contract; and 

 [10th 68 ] WHEREAS, the Contractor has demonstrated to the satisfaction of the 

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

70 reasonable and beneficial use and/or has demonstrated projected future demand for water use 

71 such that the Contractor has the capability and expects to utilize fully for reasonable and 

72 beneficial use the quantity of Project Water to be made available to it pursuant to this Contract; 

73 and 
Contract No. 14-06-200-6998-LTR1 

4

 [11th 74 ] WHEREAS, water obtained from the Project has been relied upon by urban and 

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

76 as an essential portion of its water supply; and 

 [12th 77 ] WHEREAS, the economies of regions within the Project, including the 

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

79 Project; and 

80 [12.1] WHEREAS, Contractor has made and will continue to make substantial capital 

81 investments in diversion and treatment facilities, and requires a consistent, predictable quality of 

82 raw water in order to meet Safe Drinking Water Act requirements for its municipal customers, 

83 and to provide a consistent and predictable quality of water for its industrial customers; and 

 [13th 84 ] WHEREAS, the Secretary intends through coordination, cooperation, and 

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

86 Project for all Project purposes; and 

87 [13.1] WHEREAS, the Contractor is located in the region of the Redding Groundwater 

88 Basin, and it is the desire of both the United States and the Contractor to facilitate the 

89 cooperative efforts of local water service agencies to develop the Redding Groundwater Basin 

90 for conjunctive management and use with Project Water supplies, to maximize the reasonable 

91 beneficial use of water for the water service agencies and their customers in the region; and 

 [14th 92 ] WHEREAS, the mutual goals of the United States and the Contractor include: to 

93 provide for reliable Project Water supplies; to control costs of those supplies; to achieve 

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

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

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

97 of the United States relative to the Project; and 

 [15th 98 ] WHEREAS, the parties intend by this Contract to develop a more cooperative 

99 relationship in order to achieve their mutual goals; and 
Contract No. 14-06-200-6998-LTR1 

5

 [16th 100 ] WHEREAS, the United States and the Contractor are willing to enter into this 

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

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

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

104 DEFINITIONS

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

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

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

108 both dates inclusive; 

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

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

111 annually by the Contracting Officer pursuant to this Contract; 

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

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

114 Contract Total; 

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

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

117 or regulation; 

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

119 Contractor is entitled under subdivision (a) of Article 3 of this Contract; 

120 (f) “Contractor's Service Area” shall mean the area to which the Contractor is 

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

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

123 without amendment of this Contract; 

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

125 XXXIV of the Act of October 30, 1992 (106 Stat. 4706); 
Contract No. 14-06-200-6998-LTR1 

6

126 (h) Omitted; 

127 (i) Omitted; 

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

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

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

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

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

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

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

135 in accordance with subsections 202(3)(B) and (3)(C) of the Reclamation Reform Act of 

136 October 12, 1982 (96 Stat. 1263), as amended, hereinafter referred to as RRA. The Full Cost 

137 Rate includes actual operation, maintenance, and replacement costs consistent with Section 426.2 

138 of the Rules and Regulations for the RRA; 

139 (k) Omitted; 

140 (l) Omitted; 

141 (m) Omitted; 

142 (n) Omitted; 

143 (o) “Municipal and Industrial (M&I) Water” shall mean Project Water made 

144 available to the Contractor for purposes other than the commercial production of agricultural 

145 crops or livestock; 

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

147 the delivery of M&I Water; 

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

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

150 maintenance of Project facilities; 

151 (r) Omitted; 
Contract No. 14-06-200-6998-LTR1 

7

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

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

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

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

156 Reclamation law; 

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

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

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

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

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

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

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

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

165 preceding contract(s); 

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

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

168 through any agency of the Department of the Interior; 

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

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

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

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

173 Officer; 

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

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

176 Contracting Officer, pursuant to subdivision (a) of Article 4 of this Contract; 
Contract No. 14-06-200-6998-LTR1 

8

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

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

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

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

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

182 TERM OF CONTRACT

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

184 20___, and supercedes the Existing Contract. In the event the Contractor wishes to renew this 

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

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

187 (b) Omitted. 

188 (c) This Contract shall be renewed for successive periods of up to 40 years 

189 each, which periods shall be consistent with then-existing Reclamation-wide policy, under terms 

190 and conditions mutually agreeable to the parties and consistent with Federal and State law. The 

191 Contractor shall be afforded the opportunity to comment to the Contracting Officer on the 

192 proposed adoption and application of any revised policy applicable to the delivery of M&I Water 

193 that would limit the term of any subsequent renewal contract with the Contractor for the 

194 furnishing of M&I Water to less than 40 years. 

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

196 date of execution of this Contract, and every five years thereafter during the term of this 

197 Contract, of whether a conversion to a contract under subsection (c)(1) of Section 9 of the 

198 Reclamation Project Act of 1939 can be accomplished. The Contracting Officer anticipates that 

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

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

201 costs that are properly assignable to the Contractor, and agrees further that, at any time after such 
Contract No. 14-06-200-6998-LTR1 

9

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

203 Contract shall, at the request of the Contractor, be converted to a contract under said subsection 

204 9(c)(1), of the Reclamation Project Act of 1939, subject to applicable Federal law and under 

205 stated terms and conditions mutually agreeable to the Contractor and the Contracting Officer. A 

206 condition for such conversion to occur shall be a determination by the Contracting Officer that, 

207 account being taken of the amount credited to return by the Contractor as provided for under 

208 Federal Reclamation law, the remaining amount of construction costs assignable for ultimate 

209 return by the Contractor can probably be repaid to the United States within the term of a contract 

210 under said subsection 9(c)(1). If the remaining amount of costs that are properly assignable to 

211 the Contractor cannot be determined during the term of this Contract, the Contracting Officer 

212 shall notify the Contractor, and provide the reason(s) why such a determination could not be 

213 made. Further, the Contracting Officer shall make such a determination as soon thereafter as 

214 possible so as to permit, upon request of the Contractor and satisfaction of the condition set out 

215 above, conversion to a contract under said subsection 9(c)(1). In the event such determination of 

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

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

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

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

220 subdivision. 

221 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE CONTRACTOR

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

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

224 this Contract, the Contracting Officer shall make available for delivery to the Contractor 1,350 

225 acre-feet of Project Water for M&I purposes. Provided, That the United States shall not be 
Contract No. 14-06-200-6998-LTR1 

10

226 responsible for the maintenance of water levels in Shasta Reservoir to permit the Contractor to 

227 withdraw water from said reservoir. Water Delivered to the Contractor in accordance with this 

228 subdivision shall be scheduled and paid for pursuant to the provisions of Articles 4 and 7 of this 

229 Contract. 

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

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

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

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

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

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

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

237 water made available to the Contractor was 1,242 acre-feet. Nothing in subdivision (b) of this 

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

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

240 applicable legal requirements. 

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

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

243 lieu), ground-water banking programs, surface water storage programs, and other similar 

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

245 within the Contractor’s Service Area which are consistent with applicable State law and result in 

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

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

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

249 sufficient lawful uses exist in the Contractor’s Service Area so that using a long-term average, 

250 the quantity of Delivered Water is demonstrated to be reasonable for such uses and in 

251 compliance with Federal Reclamation law. Ground-water recharge programs, ground-water 
Contract No. 14-06-200-6998-LTR1 

11

252 banking programs, surface water storage programs, and other similar programs utilizing Project 

253 Water or other water furnished pursuant to this Contract conducted outside the Contractor’s 

254 Service Area may be permitted upon written approval of the Contracting Officer, which approval 

255 will be based upon environmental documentation, Project Water rights, and Project operational 

256 concerns. The Contracting Officer will address such concerns in regulations, policies, or 

257 guidelines. 

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

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

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

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

262 Contract, which evidences in excess of 45 years of diversions for M&I purposes of the quantities 

263 of water provided in subdivision (a) of Article 3 of this Contract, will be considered in 

264 developing an appropriate baseline for biological assessment(s) prepared pursuant to the ESA, 

265 and any other needed environmental review. Nothing herein shall be construed to prevent the 

266 Contractor from challenging or seeking judicial relief in a court of competent jurisdiction with 

267 respect to any biological opinion or other environmental documentation referred to in this 

268 Article. 

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

270 under Article 4 of this Contract, the Contracting Officer will make a determination whether 

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

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

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

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

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

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

277 notify the Contractor as soon as practical. The Contracting Officer will thereafter meet with the 
Contract No. 14-06-200-6998-LTR1 

12

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

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

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

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

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

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

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

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

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

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

288 guidelines, and policies. 

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

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

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

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

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

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

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

296 contracts. 

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

298 delivered for other than M&I purposes upon written approval by the Contracting Officer in 

299 accordance with the terms and conditions of such approval. 

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

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

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

303 extent permitted by law, in administrative proceedings related to the Project Water rights; 
Contract No. 14-06-200-6998-LTR1 

13

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

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

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

307 Contract to use Project Water. 

308 TIME FOR DELIVERY OF WATER

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

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

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

312 Historic Average and will be updated monthly, and more frequently if necessary, based on then313 current operational and hydrologic conditions and a new declaration with changes, if any, to the 

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

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

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

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

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

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

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

321 United States to the Contractor pursuant to this Contract for the Year commencing on such 

322 March 1. The Contracting Officer shall use all reasonable means to deliver Project Water 

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

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

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

326 Contractor's Service Area or to sell, transfer, or exchange pursuant to Article 9 of this Contract 

327 during any Year. 

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

329 Contract, the United States shall deliver Project Water to the Contractor in accordance with the 
Contract No. 14-06-200-6998-LTR1 

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

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

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

333 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

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

335 Contract shall be delivered to the Contractor at Shasta Reservoir and any additional point or 

336 points of delivery either on Project facilities or another location or locations mutually agreed to 

337 in writing by the Contracting Officer and the Contractor. 

338 (b) Omitted. 

339 (c) Omitted. 

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

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

342 Contractor at the point or points of delivery established pursuant to subdivision (a) of this 

343 Article. Upon the request of either party to this Contract, the Contracting Officer shall 

344 investigate the accuracy of such measurements and shall take any necessary steps to adjust any 

345 errors appearing therein. For any period of time when accurate measurements have not been 

346 made, the Contracting Officer shall consult with the Contractor prior to making a final 

347 determination of the quantity delivered for that period of time. 

348 (e) (1) All pumps, pipelines, storage tanks, distribution lines, and other 

349 facilities required to take, convey, and distribute water to the water users within the Contractor’s 

350 Service Area shall be constructed or installed by the Contractor at its sole expense. Operation 

351 and maintenance of the facilities and the expense thereof also shall be the sole responsibility of 

352 the Contractor. Said facilities may be installed, operated and maintained on or across property of 

353 the United States in the Shasta Reservoir area, subject to such restrictions and regulations as to 

354 location, method of installation, and operation and maintenance as may be promulgated by the 

355 Contracting Officer. 
Contract No. 14-06-200-6998-LTR1 

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356 (e) (2) The Contracting Officer shall not be responsible for the control, 

357 carriage, handling, use, disposal, or distribution of Water Delivered to the Contractor pursuant to 

358 this Contract beyond the delivery points specified in subdivision (a) of this Article. The 

359 Contractor shall indemnify the United States, its officers, employees, agents, and assigns on 

360 account of damage or claim of damage of any nature whatsoever for which there is legal 

361 responsibility, including property damage, personal injury, or death arising out of or connected 

362 with the control, carriage, handling, use, disposal, or distribution of such Water Delivered 

363 beyond such delivery points, except for any damage or claim arising out of (i) acts or omissions 

364 of the Contracting Officer or any of its officers, employees, agents, or assigns, with the intent of 

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

366 Officer or any of its officers, employees, agents, or assigns, (iii) negligence of the Contracting 

367 Officer or any of its officers, employees, agents, or assigns, or (iv) damage or claims resulting 

368 from a malfunction of facilities owned and/or operated by the United States. 

369 MEASUREMENT OF WATER WITHIN THE CONTRACTOR’S SERVICE AREA

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

371 Contracting Officer. The Contractor shall ensure that all surface water delivered for M&I 

372 purposes is measured at each M&I service connection. The water measuring devices or water 

373 measuring methods of comparable effectiveness must be acceptable to the Contracting Officer. 

374 The Contractor shall be responsible for installing, operating, and maintaining and repairing all 

375 such measuring devices and implementing all such water measuring methods at no cost to the 

376 United States. The Contractor shall use the information obtained from such water measuring 

377 devices or water measuring methods to ensure its proper management of the water, to bill water 

378 users for water delivered by the Contractor; and, if applicable, to record water delivered for M&I 

379 purposes by customer class as defined in the Contractor’s water conservation plan provided for 

380 in Article 26 of this Contract. Nothing herein contained, however, shall preclude the Contractor 

381 from establishing and collecting any charges, assessments, or other revenues authorized by 
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382 California law. The Contractor shall include a summary of all its annual surface water deliveries 

383 in the annual report described in subdivision (c) of Article 26. 

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

385 execution of this Contract, the Contractor shall provide to the Contracting Officer a written 

386 report describing the measurement devices or water measuring methods being used or to be used 

387 to implement subdivision (a) of this Article and identifying the M&I service connections or 

388 alternative measurement programs approved by the Contracting Officer, at which such 

389 measurement devices or water measuring methods are being used, and, if applicable, identifying 

390 the locations at which such devices and/or methods are not yet being used including a time 

391 schedule for implementation at such locations. The Contracting Officer shall advise the 

392 Contractor in writing within 60 days as to the adequacy and necessary modifications, if any, of 

393 the measuring devices or water measuring methods identified in the Contractor’s report and if the 

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

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

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

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

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

399 compliance with subdivision (a) of this Article. 

400 (c) All new surface water delivery systems installed within the Contractor's 

401 Service Area after the effective date of this Contract shall also comply with the measurement 

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

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

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

405 within the Contractor’s Service Area during the previous Year. 

 (e) The Contractor shall inform the Contracting Officer on or before the 10th 406 

407 calendar day of each month of the quantity of M&I Water taken during the preceding month. 
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408 RATES AND METHOD OF PAYMENT FOR WATER

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

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

411 accordance with (i) the Secretary’s then-existing ratesetting policy for M&I Water. Such 

412 ratesetting policy shall be amended, modified, or superceded only through a public notice and 

413 comment procedure; (ii) applicable Federal Reclamation law and associated rules and 

414 regulations, or policies; and (iii) other applicable provisions of this Contract. Payments shall be 

415 made by cash transaction, electronic funds transfer, or any other mechanism as may be agreed to 

416 in writing by the Contractor and the Contracting Officer. The Rates, Charges, and Tiered Pricing 

417 Component applicable to the Contractor upon execution of this Contract are set forth in Exhibit 

418 “B,” as may be revised annually. 

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

420 and Tiered Pricing Component as follows: 

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

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

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

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

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

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

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

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

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

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

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

432 those Rates are based. The Contractor shall be allowed not less than two months to review and 

433 comment on such computations and cost allocations. By December 31 of each Calendar Year, 
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434 the Contracting Officer shall provide the Contractor with the final Rates and Tiered Pricing 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

464 consistent with the quantities of M&I Water Delivered as shown in the water delivery report for 

465 the subject month prepared by the Contracting Officer. The water delivery report shall be 

466 deemed a bill for the payment of Charges and the applicable Tiered Pricing Component for 

467 Water Delivered. Adjustment for overpayment or underpayment of Charges shall be made 

468 through the adjustment of payments due to the United States for Charges for the next month. 

469 Any amount to be paid for past due payment of Charges and the Tiered Pricing Component shall 

470 be computed pursuant to Article 20 of this Contract. 

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

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

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

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

475 Contract shall be no more than the otherwise applicable Rate for M&I Water under subdivision 

476 (a) of this Article. 

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

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

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

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

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

482 regulations, and the then-current Project ratesetting policy for M&I Water. 

483 (h) The Contracting Officer shall keep its accounts pertaining to the 

484 administration of the financial terms and conditions of its long-term contracts, in accordance 
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485 with applicable Federal standards, so as to reflect the application of Project costs and revenues. 

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

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

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

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

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

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

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

493 policies, and procedures used for establishing Rates, Charges, and the Tiered Pricing 

494 Component, and/or for making and allocating payments, other than those set forth in this Article 

495 may be in the mutual best interest of the parties, it is expressly agreed that the parties may enter 

496 into agreements to modify the mechanisms, policies, and procedures for any of those purposes 

497 while this Contract is in effect without amending this Contract. 

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

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

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

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

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

503 Contract Total, shall equal one-half of the difference between the Rate established under 

504 subdivision (a) of this Article and the M&I Full Cost Water Rate. The Tiered Pricing 

505 Component for the amount of Water Delivered which exceeds 90 percent of the Contract Total 

506 shall equal the difference between (i) the Rate established under subdivision (a) of this Article 

507 and (ii) the M&I Full Cost Water Rate. 

508 (2) Omitted. 

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

510 Component pursuant to this Article, Water Delivered shall include Project Water that the 
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511 Contractor transfers to others but shall not include Project Water transferred to the Contractor, 

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

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

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

515 policies will be established to recover only reimbursable O&M (including any deficits) and 

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

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

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

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

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

521 impact of the proposed change. 

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

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

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

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

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

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

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

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

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

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

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

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

534 not legally obligated to pay any Project deficits claimed by the United States to have accrued as 

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

536 Contract, the Contractor does not waive any legal rights or remedies that it may have with 
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537 respect to such disputed issues. Notwithstanding the execution of this Contract, and payments 

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

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

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

541 interest accruing on any such deficits; (3) the inclusion of any such deficit charges or interest in 

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

543 Existing Contract and any preceding interim renewal contract, if applicable; and (5) the 

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

545 shall be entitled to the benefit of any administrative or judicial ruling in favor of any Project 

546 M&I contractor on any of these issues, and credits for payments heretofore made, Provided, That 

547 the basis for such ruling is applicable to the Contractor. 

548 NON-INTEREST BEARING OPERATION AND MAINTENANCE DEFICITS

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

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

551 liability therefor. 

552 SALES, TRANSFERS, OR EXCHANGES OF WATER

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

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

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

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

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

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

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

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

561 documentation should include, as appropriate, an analysis of ground-water impacts and 
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562 economic and social effects, including environmental justice, of the proposed water transfers on 

563 both the transferor and transferee. 

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

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

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

567 program during the term of this Contract, the Contracting Officer shall prepare, as appropriate, 

568 all necessary environmental documentation including, but not limited to, documents prepared 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

586 Interior; and (v) comply with all applicable Federal, State, and local or tribal laws and 
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587 requirements imposed for protection of the environment and Indian Trust Assets, as defined 

588 under Federal law. 

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

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

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

592 as those terms are utilized under California law, of water that constitutes the natural flow of the 

593 Sacramento River and its tributaries above the confluence of the American and Sacramento 

594 Rivers. 

595 APPLICATION OF PAYMENTS AND ADJUSTMENTS 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

611 advances, the Contractor will be billed for the additional costs pursuant to Article 25. 
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612 TEMPORARY REDUCTIONS--RETURN FLOWS

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

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

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

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

617 provided in this Contract. 

618 (b) The Contracting Officer may temporarily discontinue or reduce the 

619 quantity of Water Delivered to the Contractor as herein provided for the purposes of 

620 investigation, inspection, maintenance, repair, or replacement of any of the Project facilities or 

621 any part thereof necessary for the delivery of Project Water to the Contractor, but so far as 

622 feasible the Contracting Officer will give the Contractor due notice in advance of such temporary 

623 discontinuance or reduction, except in case of emergency, in which case no notice need be given; 

624 Provided, That the United States shall use its best efforts to avoid any discontinuance or 

625 reduction in such service. Upon resumption of service after such reduction or discontinuance, 

626 and if requested by the Contractor, the United States will, if possible, deliver the quantity of 

627 Project Water which would have been delivered hereunder in the absence of such discontinuance 

628 or reduction. 

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

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

631 beyond the Contractor's Service Area; Provided, That this shall not be construed as claiming for 

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

633 pursuant to this Contract within the Contractor’s Service Area by the Contractor or those 

634 claiming by, through, or under the Contractor. 

635 CONSTRAINTS ON THE AVAILABILITY OF WATER

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

637 reasonable means to guard against a Condition of Shortage in the quantity of water to be made 
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638 available to the Contractor pursuant to this Contract. In the event the Contracting Officer 

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

640 Contractor of said determination as soon as practicable. 

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

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

643 actions taken by the Contracting Officer to meet legal obligations then, except as provided in 

644 subdivision (a) of Article 18 of this Contract, no liability shall accrue against the United States or 

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

646 (c) Omitted. 

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

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

649 amended, modified, or superceded only through a public notice and comment procedure. 

650 (e) By entering into this Contract, the Contractor does not waive any legal 

651 rights or remedies it may have to file or participate in any administrative or judicial proceeding 

652 contesting (i) the sufficiency of the manner in which any Project M&I Water Shortage Policy 

653 adopted after the effective date of this Contract was promulgated; (ii) the substance of such a 

654 policy; or (iii) the applicability of such a policy. By agreeing to the foregoing, the Contracting 

655 Officer does not waive any legal defenses or remedies that it may then have to assert in such a 

656 proceeding. 

657 UNAVOIDABLE GROUNDWATER PERCOLATION

658 13. Omitted. 

659 RULES AND REGULATIONS

660 14. The parties agree that the delivery of Project Water or use of Federal facilities 

661 pursuant to this Contract is subject to Federal Reclamation law, as amended and supplemented, 

662 and the rules and regulations promulgated by the Secretary of the Interior under Federal 

663 Reclamation law. 
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664 WATER AND AIR POLLUTION CONTROL

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

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

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

668 authorities. 

669 QUALITY OF WATER

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

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

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

673 2(b) of the Act of August 26, 1937 (50 Stat. 865), as added by Section 101 of the Act of 

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

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

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

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

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

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

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

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

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

683 or Contractor facilities or Project Water provided by the Contractor within the Contractor's 

684 Service Area. 

685 WATER ACQUIRED BY THE CONTRACTOR

686 OTHER THAN FROM THE UNITED STATES

687 17. (a) Omitted. 

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

689 other than from the United States, may be stored, conveyed, and/or diverted through Project 
Contract No. 14-06-200-6998-LTR1 

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

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

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

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

694 facilities and deliver said water to lands within the Contractor’s Service Area subject to payment 

695 to the United States of an appropriate rate as determined by the applicable Project ratesetting 

696 policy, the RRA, and the Project use power policy, if such Project use power policy is applicable, 

697 each as amended, modified, or superceded from time to time. 

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

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

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

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

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

703 the Project facilities. 

704 (3) The United States shall not be responsible for control, care, or 

705 distribution of the non-Project water before it is introduced into or after it is delivered from the 

706 Project facilities. The Contractor hereby releases and agrees to defend and indemnify the United 

707 States, and its respective officers, agents, and employees, from any claim for damage to persons 

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

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

710 diverting such non-Project water into Project facilities. 

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

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

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

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

715 Officer, the United States and the Contractor shall share priority to utilize the remaining capacity 
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716 of the facilities declared to be available by the Contracting Officer for conveyance and 

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

718 non-Project contractors. 

719 OPINIONS AND DETERMINATIONS

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

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

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

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

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

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

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

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

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

729 statute or regulation. 

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

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

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

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

734 with the Contractor to the extent reasonably practicable. 

735 COORDINATION AND COOPERATION

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

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

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

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

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

741 the quantity or quality of Project Water supply, the allocation of Project Water supply, and 
Contract No. 14-06-200-6998-LTR1 

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

743 coordination, and cooperation provided for hereunder shall extend to all provisions of this 

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

745 and determinations to be made by the respective party. 

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

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

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

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

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

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

752 a real-time basis. 

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

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

755 intent: 

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

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

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

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

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

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

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

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

764 State of California to seek improved water resource management. 

765 (3.1) The Secretary and the Contractor desire to work together to 

766 maximize the reasonable beneficial use of water for their mutual benefit. As a consequence, the 

767 Secretary and the Contractor will work in partnership and with others in the region of the 
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768 Redding Groundwater Basin, including other Contractors in the Shasta and Trinity Divisions of 

769 the Project, to facilitate the better integration with the region of the Redding Groundwater Basin 

770 of all water supplies including, but not limited to, the better management and integration of 

771 surface water and groundwater, transfers and exchanges of water, the development and better 

772 utilization of surface water storage, the effective utilization of waste, seepage and return flow 

773 water, and other operational and management options that may be identified in the future. 

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

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

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

777 annually, hold division level meetings to discuss Project operations, division level water 

778 management activities, and other issues as appropriate. 

779 (d) Without limiting the contractual obligations of the Contracting Officer 

780 under the other Articles of this Contract nothing in this Article shall be construed to limit or 

781 constrain the Contracting Officer’s ability to communicate, coordinate, and cooperate with the 

782 Contractor or other interested stakeholders or to make decisions in a timely fashion as needed to 

783 protect health, safety, or the physical integrity of structures or facilities. 

784 CHARGES FOR DELINQUENT PAYMENTS

785 20. (a) The Contractor shall be subject to interest, administrative and penalty 

786 charges on delinquent installments or payments. When a payment is not received by the due 

787 date, the Contractor shall pay an interest charge for each day the payment is delinquent beyond 

788 the due date. When a payment becomes sixty (60) days delinquent, the Contractor shall pay an 

789 administrative charge to cover additional costs of billing and processing the delinquent payment. 

790 When a payment is delinquent ninety (90) days or more, the Contractor shall pay an additional 

791 penalty charge of six (6%) percent per year for each day the payment is delinquent beyond the 

792 due date. Further, the Contractor shall pay any fees incurred for debt collection services 

793 associated with a delinquent payment. 

794 (b) The interest charge rate shall be the greater of the rate prescribed quarterly 

795 in the Federal Register by the Department of the Treasury for application to overdue payments, 

796 or the interest rate of one-half of one (0.5%) percent per month prescribed by Section 6 of the 

797 Reclamation Project Act of 1939 (Public Law 76-260). The interest charge rate shall be 

798 determined as of the due date and remain fixed for the duration of the delinquent period. 
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799 (c) When a partial payment on a delinquent account is received, the amount 

800 received shall be applied, first to the penalty, second to the administrative charges, third to the 

801 accrued interest, and finally to the overdue payment. 

802 EQUAL OPPORTUNITY

803 21. During the performance of this Contract, the Contractor agrees as follows: 

804 (a) The Contractor will not discriminate against any employee or applicant for 

805 employment because of race, color, religion, sex, or national origin. The Contractor will take 

806 affirmative action to ensure that applicants are employed, and that employees are treated during 

807 employment, without regard to their race, color, religion, sex, or national origin. Such action 

808 shall include, but not be limited to, the following: Employment, upgrading, demotion, or 

809 transfer; recruitment or recruitment advertising; layoff or termination, rates of payment or other 

810 forms of compensation; and selection for training, including apprenticeship. The Contractor 

811 agrees to post in conspicuous places, available to employees and applicants for employment, 

812 notices to be provided by the Contracting Officer setting forth the provisions of this 

813 nondiscrimination clause. 

814 (b) The Contractor will, in all solicitations or advertisements for employees 

815 placed by or on behalf of the Contractor, state that all qualified applicants will receive 

816 consideration for employment without discrimination because of race, color, religion, sex, or 

817 national origin. 

818 (c) The Contractor will send to each labor union or representative of workers 

819 with which it has a collective bargaining agreement or other contract or understanding, a notice, 

820 to be provided by the Contracting Officer, advising the said labor union or workers' 

821 representative of the Contractor's commitments under Section 202 of Executive Order 11246 of 

822 September 24, 1965, and shall post copies of the notice in conspicuous places available to 

823 employees and applicants for employment. 

824 (d) The Contractor will comply with all provisions of Executive Order 

825 No. 11246 of September 24, 1965, as amended, and of the rules, regulations, and relevant orders 

826 of the Secretary of Labor. 

827 (e) The Contractor will furnish all information and reports required by said 

828 amended Executive Order and by the rules, regulations, and orders of the Secretary of Labor, or 

829 pursuant thereto, and will permit access to its books, records, and accounts by the Contracting 

830 Officer and the Secretary of Labor for purposes of investigation to ascertain compliance with 

831 such rules, regulations, and orders. 

832 (f) In the event of the Contractor's noncompliance with the nondiscrimination 

833 clauses of this Contract or with any of the said rules, regulations, or orders, this Contract may be 

834 canceled, terminated, or suspended, in whole or in part, and the Contractor may be declared 

835 ineligible for further Government contracts in accordance with procedures authorized in said 

836 amended Executive Order, and such other sanctions may be imposed and remedies invoked as 
Contract No. 14-06-200-6998-LTR1 

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837 provided in said Executive Order, or by rule, regulation, or order of the Secretary of Labor, or as 

838 otherwise provided by law. 

839 (g) The Contractor will include the provisions of paragraphs (a) through (g) in 

840 every subcontract or purchase order unless exempted by the rules, regulations, or orders of the 

841 Secretary of Labor issued pursuant to Section 204 of said amended Executive Order, so that such 

842 provisions will be binding upon each subcontractor or vendor. The Contractor will take such 

843 action with respect to any subcontract or purchase order as may be directed by the Secretary of 

844 Labor as a means of enforcing such provisions, including sanctions for noncompliance: 

845 Provided, however, That in the event the Contractor becomes involved in, or is threatened with, 

846 litigation with a subcontractor or vendor as a result of such direction, the Contractor may request 

847 the United States to enter into such litigation to protect the interests of the United States. 

848 GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT

849 22. (a) The obligation of the Contractor to pay the United States as provided in 

850 this Contract is a general obligation of the Contractor notwithstanding the manner in which the 

851 obligation may be distributed among the Contractor's water users and notwithstanding the default 

852 of individual water users in their obligations to the Contractor. 

853 (b) The payment of charges becoming due hereunder is a condition precedent 

854 to receiving benefits under this Contract. The United States shall not make water available to the 

855 Contractor through Project facilities during any period in which the Contractor may be in arrears 

856 in the advance payment of water rates due the United States. The Contractor shall not furnish 

857 water made available pursuant to this Contract for lands or parties which are in arrears in the 

858 advance payment of water rates levied or established by the Contractor. 

859 (c) With respect to subdivision (b) of this Article, the Contractor shall have no 

860 obligation to require advance payment for water rates which it levies. 

861 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

862 23. (a) The Contractor shall comply with Title VI of the Civil Rights Act of 1964 

863 (42 U.S.C. 2000d), Section 504 of the Rehabilitation Act of 1975 (P.L. 93-112, as amended), the 

864 Age Discrimination Act of 1975 (42 U.S.C. 6101, et seq.) and any other applicable civil rights 

865 laws, as well as with their respective implementing regulations and guidelines imposed by the 

866 U.S. Department of the Interior and/or Bureau of Reclamation. 

867 (b) These statutes require that no person in the United States shall, on the 

868 grounds of race, color, national origin, handicap, or age, be excluded from participation in, be 

869 denied the benefits of, or be otherwise subjected to discrimination under any program or activity 

870 receiving financial assistance from the Bureau of Reclamation. By executing this Contract, the 

871 Contractor agrees to immediately take any measures necessary to implement this obligation, 

872 including permitting officials of the United States to inspect premises, programs, and documents. 
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873 (c) The Contractor makes this agreement in consideration of and for the 

874 purpose of obtaining any and all Federal grants, loans, contracts, property discounts, or other 

875 Federal financial assistance extended after the date hereof to the Contractor by the Bureau of 

876 Reclamation, including installment payments after such date on account of arrangements for 

877 Federal financial assistance which were approved before such date. The Contractor recognizes 

878 and agrees that such Federal assistance will be extended in reliance on the representations and 

879 agreements made in this Article, and that the United States reserves the right to seek judicial 

880 enforcement thereof. 

881 PRIVACY ACT COMPLIANCE

882 24. Omitted. 

883 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

884 25. In addition to all other payments to be made by the Contractor pursuant to this 

885 Contract, the Contractor shall pay to the United States, within 60 days after receipt of a bill and 

886 detailed statement submitted by the Contracting Officer to the Contractor for such specific items 

887 of direct cost incurred by the United States for work requested by the Contractor associated with 

888 this Contract plus indirect costs in accordance with applicable Bureau of Reclamation policies 

889 and procedures. All such amounts referred to in this Article shall not exceed the amount agreed 

890 to in writing in advance by the Contractor. This Article shall not apply to costs for routine 

891 contract administration. 

892 WATER CONSERVATION

893 26. (a) Prior to the delivery of water provided from or conveyed through 

894 Federally constructed or Federally financed facilities pursuant to this Contract, the Contractor 

895 shall be implementing an effective water conservation and efficiency program based on the 

896 Contractor's water conservation plan that has been determined by the Contracting Officer to meet 

897 the conservation and efficiency criteria for evaluating water conservation plans established under 

898 Federal law. The water conservation and efficiency program shall contain definite water 

899 conservation objectives, appropriate economically feasible water conservation measures, and 

900 time schedules for meeting those objectives. Continued Project Water delivery pursuant to this 

901 Contract shall be contingent upon the Contractor’s continued implementation of such water 
Contract No. 14-06-200-6998-LTR1 

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902 conservation program. In the event the Contractor's water conservation plan or any revised water 

903 conservation plan completed pursuant to subdivision (d) of Article 26 of this Contract have not 

904 yet been determined by the Contracting Officer to meet such criteria, due to circumstances which 

905 the Contracting Officer determines are beyond the control of the Contractor, water deliveries 

906 shall be made under this Contract so long as the Contractor diligently works with the Contracting 

907 Officer to obtain such determination at the earliest practicable date, and thereafter the Contractor 

908 immediately begins implementing its water conservation and efficiency program in accordance 

909 with the time schedules therein. 

910 (b) Should the amount of M&I Water delivered pursuant to subdivision (a) of 

911 Article 3 of this Contract equal or exceed 2,000 acre-feet per Year, the Contractor shall 

912 implement the Best Management Practices identified by the time frames issued by the California 

913 Urban Water Conservation Council for such M&I Water unless any such practice is determined 

914 by the Contracting Officer to be inappropriate for the Contractor. 

915 (c) The Contractor shall submit to the Contracting Officer a report on the 

916 status of its implementation of the water conservation plan on the reporting dates specified in the 

917 then existing conservation and efficiency criteria established under Federal law. 

918 (d) At five-year intervals, the Contractor shall revise its water conservation 

919 plan to reflect the then-current conservation and efficiency criteria for evaluating water 

920 conservation plans established under Federal law and submit such revised water management 

921 plan to the Contracting Officer for review and evaluation. The Contracting Officer will then 

922 determine if the water conservation plan meets Reclamation’s then-current conservation and 

923 efficiency criteria for evaluating water conservation plans established under Federal law. 

924 (e) If the Contractor is engaged in direct ground-water recharge, such activity 

925 shall be described in the Contractor’s water conservation plan. 
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EXISTING OR ACQUIRED WATER OR WATER RIGHTS

926 27. Except as specifically provided in Article 17 of this Contract, the provisions of 

927 this Contract shall not be applicable to or affect non-Project water or water rights now owned or 

928 hereafter acquired by the Contractor or any user of such water within the Contractor's Service 

929 Area. Any such water shall not be considered Project Water under this Contract. In addition, 

930 this Contract shall not be construed as limiting or curtailing any rights which the Contractor or 

931 any water user within the Contractor's Service Area acquires or has available under any other 

932 contract pursuant to Federal Reclamation law. 

933 OPERATION AND MAINTENANCE BY OPERATING NON-FEDERAL ENTITY

934 28. Omitted. 

935 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

936 29. The expenditure or advance of any money or the performance of any obligation of 

937 the United States under this Contract shall be contingent upon appropriation or allotment of 

938 funds. Absence of appropriation or allotment of funds shall not relieve the Contractor from any 

939 obligations under this Contract. No liability shall accrue to the United States in case funds are 

940 not appropriated or allotted. 

941 BOOKS, RECORDS, AND REPORTS

942 30. (a) The Contractor shall establish and maintain accounts and other books and 

943 records pertaining to administration of the terms and conditions of this Contract, including: the 

944 Contractor's financial transactions, water supply data, and Project land and right-of-way 

945 agreements; the water users' land-use (crop census), land ownership, land-leasing and water use 

946 data; and other matters that the Contracting Officer may require. Reports thereon shall be 

947 furnished to the Contracting Officer in such form and on such date or dates as the Contracting 

948 Officer may require. Subject to applicable Federal laws and regulations, each party to this 

949 Contract shall have the right during office hours to examine and make copies of the other party's 

950 books and records relating to matters covered by this Contract 

951 (b) Notwithstanding the provisions of subdivision (a) of this Article, no 

952 books, records, or other information shall be requested from the Contractor by the Contracting 

953 Officer unless such books, records, or information are reasonably related to the administration or 

954 performance of this Contract. Any such request shall allow the Contractor a reasonable period of 

955 time within which to provide the requested books, records, or information. 
Contract No. 14-06-200-6998-LTR1 

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956 (c) Omitted. 

957 ASSIGNMENT LIMITED--SUCCESSORS AND ASSIGNS OBLIGATED

958 31. (a) The provisions of this Contract shall apply to and bind the successors and 

959 assigns of the parties hereto, but no assignment or transfer of this Contract or any right or interest 

960 therein shall be valid until approved in writing by the Contracting Officer. 

961 (b) The assignment of any right or interest in this Contract by either party 

962 shall not interfere with the rights or obligations of the other party to this Contract absent the 

963 written concurrence of said other party. 

964 (c) The Contracting Officer shall not unreasonably condition or withhold his 

965 approval of any proposed assignment. 

966 SEVERABILITY

967 32. In the event that a person or entity who is neither (i) a party to a Project contract, 

968 nor (ii) a person or entity that receives Project Water from a party to a Project contract, nor (iii) 

969 an association or other form of organization whose primary function is to represent parties to 

970 Project contracts, brings an action in a court of competent jurisdiction challenging the legality or 

971 enforceability of a provision included in this Contract and said person, entity, association, or 

972 organization obtains a final court decision holding that such provision is legally invalid or 

973 unenforceable and the Contractor has not intervened in that lawsuit in support of the plaintiff(s), 

974 the parties to this Contract shall use their best efforts to (i) within 30 days of the date of such 

975 final court decision identify by mutual agreement the provisions in this Contract which must be 

976 revised, and (ii) within three months thereafter promptly agree on the appropriate revision(s). 

977 The time periods specified above may be extended by mutual agreement of the parties. Pending 

978 the completion of the actions designated above, to the extent it can do so without violating any 

979 applicable provisions of law, the United States shall continue to make the quantities of Project 

980 Water specified in this Contract available to the Contractor pursuant to the provisions of this 

981 Contract which were not found to be legally invalid or unenforceable in the final court decision. 
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982 RESOLUTION OF DISPUTES

983 33. Should any dispute arise concerning any provisions of this Contract, or the 

984 parties’ rights and obligations thereunder, the parties shall meet and confer in an attempt to 

985 resolve the dispute. Prior to the Contractor commencing any legal action, or the Contracting 

986 Officer referring any matter to Department of Justice, the party shall provide to the other party 

987 30 days’ written notice of the intent to take such action; Provided, That such notice shall not be 

988 required where a delay in commencing an action would prejudice the interests of the party that 

989 intends to file suit. During the 30-day notice period, the Contractor and the Contracting Officer 

990 shall meet and confer in an attempt to resolve the dispute. Except as specifically provided, 

991 nothing herein is intended to waive or abridge any right or remedy that the Contractor or the 

992 United States may have. 

993 OFFICIALS NOT TO BENEFIT

994 34. No Member of or Delegate to Congress, Resident Commissioner, or official of the 

995 Contractor shall benefit from this Contract other than as a water user or landowner in the same 

996 manner as other water users or landowners. 

997 CHANGES IN CONTRACTOR’S SERVICE AREA

998 35. (a) While this Contract is in effect, no change may be made in the 

999 Contractor's Service Area, by inclusion or exclusion of lands, dissolution, consolidation, merger, 

1000 or otherwise, except upon the Contracting Officer's written consent. 

1001 (b) Within 30 days of receipt of a request for such a change, the Contracting 

1002 Officer will notify the Contractor of any additional information required by the Contracting 

1003 Officer for processing said request, and both parties will meet to establish a mutually agreeable 

1004 schedule for timely completion of the process. Such process will analyze whether the proposed 

1005 change is likely to: (i) result in the use of Project Water contrary to the terms of this Contract; 

1006 (ii) impair the ability of the Contractor to pay for Project Water furnished under this Contract or 

1007 to pay for any Federally-constructed facilities for which the Contractor is responsible; and (iii) 

1008 have an impact on any Project Water rights applications, permits, or licenses. In addition, the 

1009 Contracting Officer shall comply with the NEPA and the ESA. The Contractor will be 
Contract No. 14-06-200-6998-LTR1 

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1010 responsible for all costs incurred by the Contracting Officer in this process, and such costs will 

1011 be paid in accordance with Article 25 of this Contract. 

1012 FEDERAL LAWS

1013 36. By entering into this Contract, the Contractor does not waive its rights to contest 

1014 the validity or application in connection with the performance of the terms and conditions of this 

1015 Contract of any Federal law or regulation; Provided, That the Contractor agrees to comply with 

1016 the terms and conditions of this Contract unless and until relief from application of such Federal 

1017 law or regulation to the implementing provision of the Contract is granted by a court of 

1018 competent jurisdiction. 

1019 NOTICES

1020 37. Any notice, demand, or request authorized or required by this Contract shall be 

1021 deemed to have been given, on behalf of the Contractor, when mailed, postage prepaid, or 

1022 delivered to the Area Manager, Bureau of Reclamation, Northern California Area Office, 16349 

1023 Shasta Dam Boulevard, Shasta Lake, California 96019, and on behalf of the United States, when 

1024 mailed, postage prepaid, or delivered to the Board of Directors of the Mountain Gate Community 

1025 Services District, 14508 Wonderland Boulevard, Redding, California 96003. The designation of 

1026 the addressee or the address may be changed by notice given in the same manner as provided in 

1027 this Article for other notices. 

1028 CONFIRMATION OF CONTRACT

1029 38. The Contractor, after the execution of this Contract, shall furnish to the 

1030 Contracting Officer evidence that pursuant to the laws of the State of California, the Contractor 

1031 is a legally constituted entity and the Contract is lawful, valid, and binding on the Contractor. 

1032 This Contract shall not be binding on the United States until such evidence has been provided to 

1033 the Contracting Officer’s satisfaction. 
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1034 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of 

1035 the day and year first above written. 

1036 THE UNITED STATES OF AMERICA 

1037 By: ______________________________________ 

1038 Regional Director, Mid-Pacific Region 

1039 Bureau of Reclamation 

1040 MOUNTAIN GATE 

1041 COMMUNITY SERVICES DISTRICT 

1042 By: ______________________________________ 

1043 President of the Board of Directors 

1044 Attest: 

1045 By: _______________________________ 

1046 Secretary of the Board of Directors 

1047 (I:\LTRC\Draft LTRC\04-19-2004 Mtn Gte LTRC Final Draft Contract.doc) 
Contract No. 14-06-200-6998-LTR1 

EXHIBIT A

[Map or Description of Contractor’s Service Area]
Contract No. 14-06-200-6998-LTR1 

EXHIBIT B 

2004 Water Rates and Charges 

Mountain Gate Community Services District – Shasta Lake

 M&I COST OF SERVICE RATES:

 Capital Rate: $ 5.54 

 O&M Rates: 

Water Marketing 5.01 

Storage 6.38 

 Deficit Rate: 0.81 

 CFO/PRF Adjustment Rate 1/ 2.34

 TOTAL $20.08

 M&I FULL COST RATE: $23.37

 CHARGES UNDER P.L. 102-575 TO THE

 RESTORATION FUND 2/ 

 Restoration Payments (3407(d)(2)(A)) $15.64

1/ Chief Financial Officer (CFO) adjustment and Provision for Replacement (PFR) expense is 

being distributed over a 5-year period beginning in FY 2003 for those contractors that requested 

those costs be deferred. 

2/ Restoration fund charges are payments in addition to the water rates and were determined 

pursuant to Title XXXIV of Public Law 102-575. Restoration fund charges are on a fiscal year 

basis (10/1 - 9/30).