CCAO 5-18-12 

CCAO 7-23-12 

RO 10-12-12 

M&I Only 

Contract No. 14-06-200-5198B-LTR1 

UNITED STATES 

DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

Central Valley Project, California 

LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES

AND

SACRAMENTO COUNTY WATER AGENCY

PROVIDING FOR PROJECT WATER SERVICE

FROM THE AMERICAN RIVER DIVISION

Table of Contents

Article No. Title Page No.

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

Explanatory Recitals ............................................................................................ 1-6 

1 Definitions............................................................................................................ 6-9 

2 Term of Contract .............................................................................................. 10-11 

3 Water to be Made Available and Delivered to the Contractor......................... 11-15 

4 Time for Delivery of Water ............................................................................. 15-16 

5 Point of Diversion and Responsibility for Distribution of Water .................... 16-18 

6 Measurement of Water Within the Service Area ............................................. 18-20 

7 Rates and Method of Payment for Water ......................................................... 20-25 

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

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

10 Application of Payments and Adjustments ...................................................... 27-28 

11 Temporary Reductions—Return Flows ........................................................... 28-29 

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

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

14 Rules and Regulations............................................................................................30 

15 Protection of Water and Air Quality ......................................................................30 

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

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

18 Opinions and Determinations .......................................................................... 32-33 

19 Coordination and Cooperation ......................................................................... 33-34 

20 Charges for Delinquent Payments ................................................................... 34-35 

Draft
Contract No. 14-06-200-5198B-LTR1 

Table of Contents – continued

Article No. Title Page No.

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

22 General Obligation—Benefits Conditioned Upon Payment ..................................36 

23 Compliance With Civil Rights Laws and Regulations .................................... 36-37 

24 Privacy Act Compliance ........................................................................................37 

25 Contractor to Pay Certain Miscellaneous Costs.....................................................37 

26 Water Conservation ......................................................................................... 37-39 

27 Existing or Acquired Water or Water Rights .........................................................39 

28 Operation and Maintenance by the Operating Non-Federal Entity .......................39 

29 Contingent on Appropriation or Allotment of Funds ............................................40 

30 Books, Records, and Reports .................................................................................40 

31 Assignment Limited—Successors and Assigns Obligated ....................................40 

32 Severability ............................................................................................................41 

33 Resolution of Disputes ..................................................................................... 41-42 

34 Officials Not to Benefit ..........................................................................................42 

35 Changes in Contractor’s Organization ...................................................................42 

36 Federal Laws ..........................................................................................................43 

37 Notices ...................................................................................................................43 

38 Confirmation of Contract .......................................................................................43 

39 Subcontractor for Resale of Water .........................................................................43 

40 Medium for Transmitting Payments ......................................................................43 

41 Contract Drafting Considerations ..........................................................................44 

Signature Page .......................................................................................................44 

Exhibit A – Map of Contractor’s Service Area 

Exhibit B – Rates and Charges 

Draft
Contract No. 14-06-200-5198B-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 SACRAMENTO COUNTY WATER AGENCY

8 PROVIDING FOR PROJECT WATER SERVICE

9 FROM THE AMERICAN RIVER DIVISION

10 THIS CONTRACT, made this _______ day of ____________________, 20____, 

11 in 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, November 5, 1990 (104 Stat. 2074), and 

16 Title XXXIV of the Act of October 30, 1992 (106 Stat. 4706), all collectively hereinafter 

17 referred to as Federal Reclamation law, between the UNITED STATES OF AMERICA, 

18 hereinafter referred to as the United States, and the SACRAMENTO COUNTY WATER 

19 AGENCY, hereinafter referred to as the Contractor, a public agency of the State of California, 

20 duly organized, existing, and acting pursuant to the laws thereof; 

21 WITNESSETH, That: 

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 

Draft
Contract No. 14-06-200-5198B-LTR1 

2

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 Folsom Dam and Reservoir, 

30 hereinafter collectively referred to as the American River Division facilities, which will be used 

31 in part for the furnishing of water to the Contractor pursuant to the terms of this Contract; and 

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

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

[4th 34 ] WHEREAS, the Sacramento Municipal Utility District (hereinafter referred to as 

35 the District) and the United States entered into Contract No. 14-06-200-5198A, dated 

36 November 20, 1970, hereinafter referred to as the Existing Contract, which established terms for 

37 the delivery to the District of up to 75,000 acre-feet of water from the American River Division 

38 through December 31, 2012; and 

39 [4.1] WHEREAS, the District assigned to the Contractor on July 12, 2006, the right, 

40 title, and interest in that portion of the Existing Contract consisting of 30,000 acre-feet of the 

41 entitlement of the Project Water including any rights to renew the Existing Contract for the 

42 entitlement. The Contractor agreed to enter into a long-term Contract with the United States for 

43 30,000 acre-feet of assigned water; and 

44 [4.2] WHEREAS, the Contractor and the United States also entered into Contract 

45 No. 6-07-20-W1372, which established terms for the delivery to the Contractor of Project Water 

46 from the American River Division from April 8, 1999, through a date determined pursuant to 

47 Article 2 therein; and 

Draft
Contract No. 14-06-200-5198B-LTR1 

3

48 [4.3] WHEREAS, except as specifically provided for in this Contract, the Contractor’s 

49 right, title, and interest in Contract No. 6-07-20-W1372 is provided for under the Contractor’s 

50 other Contract No. 6-07-20-W1372-LTR1; and 

[5th 51 ] WHEREAS, Section 3404(c) of the CVPIA provides for long-term renewal of 

52 interim and existing long-term Central Valley Project Water service contracts following 

53 completion of appropriate environmental documentation, including a programmatic 

54 environmental impact statement (PEIS) pursuant to the National Environmental Policy 

55 Act (NEPA) analyzing the direct and indirect impacts and benefits of implementing the CVPIA 

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

[6th 57 ] WHEREAS, the United States has completed the PEIS and all other appropriate 

58 environmental reviews that are necessary preconditions to entering into this Contract; and 

[7th 59 ] WHEREAS, the Contractor has requested to enter into this Contract, pursuant to 

60 the terms of the Existing Contract, Federal Reclamation law, and the laws of the State of 

61 California, for water service from the Project; and 

[8th 62 ] WHEREAS, the United States has determined that the Contractor has fulfilled all 

63 of its obligations under the Existing Contract; and 

[9th 64 ] WHEREAS, the Contractor has demonstrated to the satisfaction of the 

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

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

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

68 use the quantity of Project Water to be made available to it pursuant to this Contract; and 

Draft
Contract No. 14-06-200-5198B-LTR1 

4

[10

th 69 ] WHEREAS, water obtained from the Project has been relied upon by urban areas 

70 within California for more than 50 years, and is considered by the Contractor as an essential 

71 portion of its water supply; and 

[11

th 72 ] WHEREAS, the economies of regions within the Project, including the 

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

74 Central Valley Project; and 

[12

th 75 ] WHEREAS, the Secretary intends through coordination, cooperation, and 

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

77 Project for all Project purposes; and 

78 [12.1] WHEREAS, the Contractor and the water users in its Service Area have improved 

79 and will continue to improve water use efficiency through water conservation, water reclamation, 

80 and other best management practices; however, implementing these measures has reduced and 

81 will continue to reduce the ability of the Contractor and the water users in its Service Area to 

82 withstand a Condition of Shortage; and 

[13

th 83 ] WHEREAS, the mutual goals of the United States and the Contractor 

84 include: to provide for reliable Project Water supplies; to control costs of those supplies; to 

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

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

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

88 of the United States relative to the Project; and 

[14

th 89 ] WHEREAS, the parties intend by this Contract to develop a more cooperative 

90 relationship in order to achieve their mutual goals; and 

Draft
Contract No. 14-06-200-5198B-LTR1 

5

91 [14.1] WHEREAS, the Contractor is a signatory to the Water Forum Agreement, dated 

92 April 24, 2000, which has the co-equal objectives to (1) provide a reliable and safe water supply 

93 for the Sacramento region’s economic health and planned development through the year 2030, 

94 and (2) preserve the fishery, wildlife, recreational and aesthetic values of the lower American 

95 River; and 

96 [14.2] WHEREAS, the Contracting Officer is in support of the co-equal objectives of the 

97 Water Forum Agreement and intends to work cooperatively with the Contractor to investigate 

98 actions that they could take to implement the objectives of the Water Forum Agreement, which, 

99 if agreed to, would be the subject of a separate agreement between them; and 

100 [14.3] Omitted; and 

101 [14.4] WHEREAS, the Contractor’s Service Area provided in this Contract includes 

102 areas that on the date of execution of this Contract receive water from a variety of sources, 

103 including, but not limited to, ground water from private wells, surface supplies under privately 

104 held rights, public utilities, public agencies other than the Contractor, water service from the 

105 Contractor provided exclusively through wells operated by the Contractor, and water service 

106 from the Contractor provided through a combination of wells and interim surface supplies; and 

107 [14.5] WHEREAS, the Contractor’s Service Area provided in this Contract also includes 

108 areas to which Project Water or other surface water may be provided by the Contractor in the 

109 future; and 

110 [14.6] WHEREAS, recognizing the physical, legal and jurisdictional circumstances that 

111 exist within the Contractor’s Service Area, the parties have agreed to structure this Contract so 

112 that areas within the Contractor’s Service Area will become subject to certain terms and 

Draft
Contract No. 14-06-200-5198B-LTR1 

6

113 conditions of this Contract at such time as such areas receive water service from the Contractor 

114 consisting of Project Water or other surface water; and 

[15

th 115 ] WHEREAS, the United States and the Contractor are willing to enter into this 

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

117 NOW, THEREFORE, in consideration of the mutual and dependent covenants 

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

119 DEFINITIONS

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

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

122 (a) ―Calendar Year‖ shall mean the period January 1 through December 31, 

123 both dates inclusive; 

124 (b) ―Charges‖ shall mean the payments required by Federal Reclamation law 

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

126 annually by the Contracting Officer pursuant to this Contract; 

127 (c) ―Condition of Shortage‖ shall mean a condition respecting the Project 

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

129 this Contract Total; 

130 (d) ―Contracting Officer‖ shall mean the Secretary of the Interior’s duly 

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

132 or regulation; 

133 (e) ―Contract Total‖ shall mean the maximum amount of water to which the 

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

Draft
Contract No. 14-06-200-5198B-LTR1 

7

135 (f) ―Contractor’s Service Area‖ shall mean the area to which the Contractor is 

136 permitted to provide Project Water obtained under this Contract. As of the date of this Contract, 

137 the Contractor’s Service Area is the area identified as ―Zone 40‖ and ―Zone 40 Expansion Area‖, 

138 as described in Exhibit ―A‖ attached hereto. The Contractor’s Service Area may be modified 

139 from time to time in accordance with Article 35 of this Contract without amendment of this 

140 Contract. 

141 (g) ―CVPIA‖ shall mean the Central Valley Project Improvement Act, 

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

143 (h-i) Omitted; 

144 (j) ―Full Cost Rate‖ shall mean an annual rate, as determined by the 

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

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

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

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

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

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

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

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

153 and Regulations for the RRA; 

154 (k-l) Omitted; 

155 (m) ―Irrigation Water‖ shall mean water made available from the Project that 

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

157 incidental thereto, and watering of livestock; 

Draft
Contract No. 14-06-200-5198B-LTR1 

8

158 (n) Omitted; 

159 (o) ―Municipal and Industrial (M&I) Water‖ shall mean Project Water, other 

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

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

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

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

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

165 this Article; 

166 (p) ―M&I Full Cost Water Rate‖ shall mean the Full Cost Rate applicable to 

167 the delivery of M&I Water; 

168 (q) ―Operation and Maintenance‖ or ―O&M‖ shall mean normal and 

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

170 maintenance of Project facilities; 

171 (r) Omitted; 

172 (s) ―Project‖ shall mean the Central Valley Project owned by the United 

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

174 (t) ―Project Contractors‖ shall mean all parties who have water service and 

175 repayment contracts for Project Water from the Project with the United States pursuant to 

176 Federal Reclamation law; 

177 (u) ―Project Water‖ shall mean all water that is developed, diverted, stored, or 

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

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

Draft
Contract No. 14-06-200-5198B-LTR1 

9

180 (v) ―Rates‖ shall mean the payments determined annually by the 

181 Contracting Officer in accordance with the then-current applicable water ratesetting policies for 

182 the Project, as described in subdivision (a) of Article 7 of this Contract; 

183 (w) ―Recent Historic Average‖ shall mean the most recent five-year average of 

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

185 preceding contract(s); 

186 (x) ―Secretary‖ shall mean the Secretary of the Interior, a duly appointed 

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

188 through any agency of the Department of the Interior; 

189 (y) ―Tiered Pricing Component‖ shall be the incremental amount to be paid 

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

191 (z) ―Water Delivered‖ or ―Delivered Water‖ shall mean Project Water 

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

193 Officer; 

194 (aa) ―Water Made Available‖ shall mean the estimated amount of 

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

196 Contracting Officer, pursuant to subdivision (a) of Article 4 of this Contract; 

197 (bb) ―Water Scheduled‖ shall mean Project Water made available to the 

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

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

200 (cc) ―Year‖ shall mean the period from and including March 1 of each 

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

Draft
Contract No. 14-06-200-5198B-LTR1 

10

202 TERM OF CONTRACT

203 2. (a) This Contract shall be effective on the date first written above, and shall 

204 remain in effect through February 28, 20--, and supersedes the Existing Contract. In the event 

205 the Contractor wishes to renew this Contract beyond February 28, 20--, the Contractor shall 

206 submit a request for renewal in writing to the Contracting Officer no later than two years prior to 

207 the date this Contract expires. 

208 (b) Omitted. 

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

210 each, which periods shall be consistent with the then-existing Bureau of Reclamation policy, 

211 under terms and conditions mutually agreeable to the parties and consistent with Federal and 

212 State law. The Contractor shall be afforded the opportunity to comment to the Contracting 

213 Officer on the proposed adoption and application of any revised policy applicable to the delivery 

214 of M&I Water that would limit the term of any subsequent renewal contract with the Contractor 

215 for the furnishing of M&I Water to less than 40 years. 

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

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

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

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

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

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

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

223 allocation is made, and subject to satisfaction of the conditions set out in this subdivision of this 

224 Article, this Contract shall, at the request of the Contractor, be converted to a contract under said 

Draft
Contract No. 14-06-200-5198B-LTR1 

11

225 subsection (c)(1) of Section 9, subject to applicable Federal law and under stated terms and 

226 conditions mutually agreeable to the Contractor and the Contracting Officer. A condition for 

227 such conversion to occur shall be a determination by the Contracting Officer that, account being 

228 taken of the amount credited to return by the Contractor as provided for under Federal 

229 Reclamation law, the remaining amount of construction costs assignable for ultimate return by 

230 the Contractor can probably be repaid to the United States within the term of a contract under 

231 said subsection (c)(1) of Section 9. If the remaining amount of costs that are properly assignable 

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

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

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

235 possible so as to permit, upon request of the Contractor and satisfaction of the conditions set out 

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

237 determination of costs has not been made at a time which allows conversion of this Contract 

238 during the term of this Contract or the Contractor has not requested conversion of this Contract 

239 within such term, the parties shall incorporate in any subsequent renewal contract as described in 

240 subdivision (c) of this Article a provision that carries forth in substantially identical terms the 

241 provisions of this subdivision (d). 

242 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE CONTRACTOR

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

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

245 this Contract, the Contracting Officer shall make available for delivery to the Contractor up to 

246 30,000 acre-feet of M&I Water. The quantity of Water Delivered to the Contractor in 

Draft
Contract No. 14-06-200-5198B-LTR1 

12

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

248 Articles 4 and 7 of this Contract. 

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

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

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

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

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

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

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

256 Water Made Available to the Contractor was 28,500 acre-feet. Nothing in subdivision (b) of this 

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

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

259 applicable legal requirements. 

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

261 furnished pursuant to this Contract. Groundwater recharge programs (direct, indirect, or in lieu), 

262 groundwater banking programs, surface water storage programs, and other similar programs 

263 utilizing Project Water or other water furnished pursuant to this Contract conducted within the 

264 Contractor’s Service Area which are consistent with applicable State law and result in use 

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

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

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

268 sufficient lawful uses exist in the Contractor’s Service Area to show reasonable and beneficial 

269 use of the quantity of Delivered Water based on a long-term average in compliance with Federal 

Draft
Contract No. 14-06-200-5198B-LTR1 

13

270 Reclamation law. Groundwater recharge programs, groundwater banking programs, surface 

271 water storage programs, and other similar programs utilizing Project Water or other water 

272 furnished pursuant to this Contract conducted outside the Contractor’s Service Area may be 

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

274 environmental documentation, Project Water rights, and Project operational concerns. The 

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

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

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

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

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

280 which evidences in excess of 40 years of diversion for M&I purposes of the quantities of water 

281 provided in subdivision 3 (a) of Article 3 of this Contract, will be considered in developing an 

282 appropriate baseline for biological assessments (s) prepared pursuant to ESA and any other 

283 needed environmental review. Nothing herein shall be construed to prevent the Contractor from 

284 challenging or seeking judicial relief in a court of competent jurisdiction with respect to any 

285 biological opinion or other environmental documentation referred to in this Article. 

286 (f) Following the declaration of Water Made Available under Article 4 of this 

287 Contract, the Contracting Officer will make a determination whether Project Water, or other 

288 water available to the Project, can be made available to the Contractor in addition to the Contract 

289 Total under Article 3 of this Contract during the Year without adversely impacting other Project 

290 Contractors. At the request of the Contractor, the Contracting Officer will consult with the 

291 Contractor prior to making such a determination. If the Contracting Officer determines that 

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

Draft
Contract No. 14-06-200-5198B-LTR1 

14

293 the Contracting Officer will announce the availability of such water and shall so notify the 

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

295 and other Project Contractors capable of taking such water to determine the most equitable and 

296 efficient allocation of such water. If the Contractor requests the delivery of any quantity of such 

297 water, the Contracting Officer shall make such water available to the Contractor in accordance 

298 with applicable statutes, regulations, guidelines, and policies. 

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

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

301 Year referred to as ―carryover.‖ The Contractor may request permission to use during the 

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

303 the Contractor during the subsequent Year referred to as ―preuse.‖ The Contracting Officer’s 

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

305 guidelines, and policies. 

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

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

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

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

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

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

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

313 contracts. 

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

315 delivered for purposes other than those described in subdivision (o) of Article 1 of this Contract 

Draft
Contract No. 14-06-200-5198B-LTR1 

15

316 upon written approval by the Contracting Officer in accordance with the terms and conditions of 

317 such approval. 

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

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

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

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

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

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

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

325 Contract to use Project Water. 

326 TIME FOR DELIVERY OF WATER

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

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

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

330 Historic Average and will be updated monthly, and more frequently if necessary, based on 

331 then-current operational and hydrologic conditions and a new declaration with changes, if any, to 

332 the Water Made Available will be made. The Contracting Officer shall provide forecasts of 

333 Project operations and the basis of the estimate, with relevant supporting information, upon the 

334 written request of the Contractor. Concurrently with the declaration of the Water Made 

335 Available, the Contracting Officer shall provide the Contractor with the updated Recent Historic 

336 Average. 

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

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

Draft
Contract No. 14-06-200-5198B-LTR1 

16

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

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

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

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

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

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

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

346 during any Year. 

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

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

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

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

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

352 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

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

354 Contract shall be delivered to the Contractor at the Contractor’s option: (i) at the intake for the 

355 Sacramento River Water Treatment Plant owned by the City of Sacramento; (ii) at the intake for 

356 the Freeport Regional Water Project on the Sacramento River ; (iii) at an intake for the Fairbairn 

357 Water Treatment Plant owned by the City of Sacramento on the American River ; and (iv) any 

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

359 mutually agreed to in writing by the Contracting Officer and the Contractor. 

Draft
Contract No. 14-06-200-5198B-LTR1 

17

360 (b) The Contracting Officer shall make all reasonable efforts to maintain 

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

362 at the point or points of delivery established pursuant to subdivision (a) of this Article. 

363 (c) The Contractor shall not deliver Project Water to land outside the 

364 Contractor’s Service Area unless approved in advance by the Contracting Officer.

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

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

367 United States, or other appropriate entity as designated by the Contracting Officer at the point or 

368 points of delivery established pursuant to subdivision (a) of this Article; Provided, That if the 

369 Project Water delivered pursuant to this Contract is diverted at a location or in a manner so as to 

370 be commingled with water diverted by any other entity, the point of measurement for Project 

371 Water delivered to the Contractor shall be a location at which Project Water diverted for 

372 Contractor’s use can be measured separately from water diverted by any such entity or entities. 

373 Upon the request of either party to this Contract, the Contracting Officer shall investigate, or 

374 cause to be investigated, the accuracy of such measurements and shall take any necessary steps 

375 to adjust any errors appearing therein. For any period of time when accurate measurements have 

376 not been made, the Contracting Officer shall consult with the Contractor prior to making a final 

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

378 (e) The Contracting Officer shall not be responsible for the control, carriage, 

379 handling, use, disposal, or distribution of Water Delivered to the Contractor pursuant to this 

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

381 shall indemnify the United States, its officers, employees, agents, and assigns on account of 

382 damage or claim of damage of any nature whatsoever for which there is legal responsibility, 

Draft
Contract No. 14-06-200-5198B-LTR1 

18

383 including property damage, personal injury, or death arising out of or connected with the control, 

384 carriage, handling, use, disposal, or distribution of such Water Delivered beyond such delivery 

385 points, except for any damage or claim arising out of: (i) acts or omissions of the Contracting 

386 Officer or any of its officers, employees, agents, or assigns with the intent of creating the 

387 situation resulting in any damage or claim; (ii) willful misconduct of the Contracting Officer or 

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

389 any of its officers, employees, agents, or assigns; or (iv) damage or claims resulting from a 

390 malfunction of facilities owned and/or operated by the United States. 

391 MEASUREMENT OF WATER WITHIN THE SERVICE AREA

392 6. (a) The Contractor shall ensure that, unless the Contractor establishes an 

393 alternative measurement program satisfactory to the Contracting Officer, all surface water 

394 delivered by the Contractor within the Contractor’s Service Area for M&I purposes is measured 

395 at each M&I service connection. The water measuring devices or water measuring methods of 

396 comparable effectiveness must be acceptable to the Contracting Officer. The Contractor shall be 

397 responsible for installing, operating, and maintaining and repairing all such measuring devices 

398 and implementing all such water measuring methods at no cost to the United States. The 

399 Contractor shall use the information obtained from such water measuring devices or water 

400 measuring methods to ensure its proper management of the water, to bill water users for water 

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

402 customer class as defined in the Contractor’s water conservation plan provided for in Article 26 

403 of this Contract. Nothing herein contained, however, shall preclude the Contractor from 

404 establishing and collecting any charges, assessments, or other revenues authorized by California 

Draft
Contract No. 14-06-200-5198B-LTR1 

19

405 law. The Contractor shall include a summary of all its annual surface water deliveries in the 

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

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

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

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

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

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

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

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

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

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

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

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

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

419 inadequate, the parties shall within 60 days following the Contracting Officer’s response, 

420 commence to negotiate in good faith how, and the earliest practicable date by which, the 

421 Contractor shall modify said measuring devices and/or measuring methods as required by the 

422 Contracting Officer to ensure compliance with subdivision (a) of this Article. 

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

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

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

Draft
Contract No. 14-06-200-5198B-LTR1 

20

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

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

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

429 (e) The Contractor shall inform the Contracting Officer on or before the 20th 

430 calendar day of each month of the quantity of M&I Water taken during the preceding month. 

431 RATES AND METHOD OF PAYMENT FOR WATER

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

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

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

435 ratesetting policies shall be amended, modified, or superseded only through a public notice and 

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

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

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

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

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

441 Exhibit ―B‖, as may be revised annually. 

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

443 and Tiered Pricing Component as follows: 

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

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

446 to the period October 1, of the current Calendar Year, through September 30, of the 

447 following Calendar Year, and the basis for such estimate. The Contractor shall be 

448 allowed not less than two months to review and comment on such estimates. On or 

Draft
Contract No. 14-06-200-5198B-LTR1 

21

449 before September 15 of each Calendar Year, the Contracting Officer shall notify the 

450 Contractor in writing of the Charges to be in effect during the period October 1 of the 

451 current Calendar Year, through September 30, of the following Calendar Year, and such 

452 notification shall revise Exhibit ―B‖. 

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

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

455 Component for Project Water for the following Year and the computations and cost 

456 allocations upon which those Rates are based. The Contractor shall be allowed not less 

457 than two months to review and comment on such computations and cost allocations. By 

458 December 31 of each Calendar Year, the Contracting Officer shall provide the Contractor 

459 with the final Rates and Tiered Pricing Component to be in effect for the upcoming Year, 

460 and such notification shall revise Exhibit ―B‖. 

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

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

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

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

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

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

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

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

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

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

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

Draft
Contract No. 14-06-200-5198B-LTR1 

22

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

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

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

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

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

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

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

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

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

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

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

483 day of February. 

484 (d) The Contractor shall also make a payment in addition to the Rate(s) in 

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

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

487 month of delivery. The payments shall be consistent with the quantities of M&I Water Delivered 

488 as shown in the water delivery report for the subject month prepared by the Contracting Officer. 

489 The water delivery report shall be deemed a bill for the payment of Charges and the applicable 

490 Tiered Pricing Component for Water Delivered. Adjustment for overpayment or underpayment 

491 of Charges shall be made through the adjustment of payments due to the United States for 

492 Charges for the next month. Any amount to be paid for past due payment of Charges and the 

493 Tiered Pricing Component shall be computed pursuant to Article 20 of this Contract. 

Draft
Contract No. 14-06-200-5198B-LTR1 

23

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

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

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

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

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

499 subdivision (a) of this Article. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Draft
Contract No. 14-06-200-5198B-LTR1 

24

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

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

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

520 this Contract is in effect without amending this Contract. 

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

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

523 month of delivery the Contractor shall make an additional payment to the United States 

524 equal to the applicable Tiered Pricing Component. The Tiered Pricing Component for 

525 the amount of Water Delivered in excess of 80 percent of the Contract Total, but less than 

526 or equal to 90 percent of the Contract Total, shall equal one-half of the difference 

527 between the Rate established under subdivision (a) of this Article and the M&I Full Cost 

528 Water Rate. The Tiered Pricing Component for the amount of Water Delivered which 

529 exceeds 90 percent of the Contract Total shall equal the difference between (i) the Rate 

530 established under subdivision (a) of this Article and (ii) the M&I Full Cost Water Rate. 

531 (2) Omitted. 

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

533 Components pursuant to this Article, Water Delivered shall include Project Water that the 

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

535 Contractor, nor shall it include the additional water provided to the Contractor under the 

536 provisions of subdivision (f) of Article 3 of this Contract. 

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

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

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

Draft
Contract No. 14-06-200-5198B-LTR1 

25

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

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

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

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

544 impact of the proposed change. 

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

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

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

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

549 accordance with the then-applicable Project ratesetting policy. 

550 (m) Omitted. 

551 (n) Omitted. 

552 NON-INTEREST BEARING OPERATION AND MAINTENANCE DEFICITS

553 8. Omitted. 

554 SALES, TRANSFERS, OR EXCHANGES OF WATER

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

556 sold, transferred, or exchanged to others for reasonable and beneficial uses within the State if 

557 such sale, transfer, or exchange is authorized by applicable Federal and State laws, and 

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

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

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

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

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

Draft
Contract No. 14-06-200-5198B-LTR1 

26

563 documentation should include, as appropriate, an analysis of groundwater impacts and economic 

564 and social effects, including environmental justice, of the proposed water transfers on both the 

565 transferor and transferee. 

566 (b) In order to facilitate efficient water management, among Project 

567 Contractors located within the same geographical area, by means of water transfers and to allow 

568 the Contractor to participate in an accelerated water transfer program during the term of this 

569 Contract, the Contracting Officer shall prepare, as appropriate, all necessary environmental 

570 documentation including, but not limited to, documents prepared pursuant to NEPA and ESA 

571 analyzing annual transfers within such geographical areas, and the Contracting Officer shall 

572 determine whether such transfers comply with applicable law. Following the completion of the 

573 environmental documentation, such transfers addressed in such documentation shall be 

574 conducted with advance notice to the Contracting Officer, but shall not require prior written 

575 approval by the Contracting Officer. Such environmental documentation and the Contracting 

576 Officer’s compliance determination shall be reviewed every five years and updated, as necessary, 

577 prior to the expiration of the then-existing five-year period. All subsequent environmental 

578 documentation shall include an alternative to evaluate not less than the quantity of Project Water 

579 historically transferred within the same geographical area. 

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

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

582 years, or to be delivered to established wildlife refuges, groundwater basins, or for M&I use or 

583 for fish and wildlife purposes; (ii) occur within a single Year; (iii) occur between a willing seller 

584 and a willing buyer; (iv) convey water through existing Project facilities with no new 

585 construction or modifications to Project facilities and be between existing Project Contractors 

Draft
Contract No. 14-06-200-5198B-LTR1 

27

586 and/or the Contractor and the United States, Department of the Interior; and (v) comply with all 

587 applicable Federal, State, and local or tribal laws and requirements imposed for protection of the 

588 environment and Indian Trust Assets, as defined under Federal law. 

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

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

591 Contracting Officer acknowledges that the Contractor is within a county, watershed, or other 

592 area of origin, as those terms are utilized under California law, of water that constitutes the 

593 natural flow of the American River and its tributaries above the confluence of the American and 

594 Sacramento 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 

Draft
Contract No. 14-06-200-5198B-LTR1 

28

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. 

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 contracts, 

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

616 make all reasonable efforts to optimize Project Water deliveries to the Contractor as provided in 

617 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 

Draft
Contract No. 14-06-200-5198B-LTR1 

29

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 

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 current and future legal obligations then, except 

644 as provided in subdivision (a) of Article 18 of this Contract, no liability shall accrue against the 

645 United States or any of its officers, agents, or employees for any damage, direct or indirect, 

646 arising therefrom. 

647 (c) Omitted. 

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

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

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

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

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

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

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

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

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

657 proceeding. 

658 UNAVOIDABLE GROUNDWATER PERCOLATION

659 13. Omitted. 

Draft
Contract No. 14-06-200-5198B-LTR1 

30

660 RULES AND REGULATIONS

661 14. The parties agree that the delivery of M&I Water or use of Federal facilities 

662 pursuant to this Contract is subject to the applicable provisions of Federal Reclamation law and 

663 any applicable rules and regulations promulgated by the Secretary of the Interior under such law. 

664 PROTECTION OF WATER AND AIR QUALITY

665 15. (a) Project facilities used to make available and deliver water to the 

666 Contractor shall be operated and maintained in the most practical manner to maintain the quality 

667 of the water at the highest level possible as determined by the Contracting Officer: Provided, 

668 That the United States does not warrant the quality of the water delivered to the Contractor and is 

669 under no obligation to furnish or construct water treatment facilities to maintain or improve the 

670 quality of water delivered to the Contractor. 

671 (b) The Contractor shall comply with all applicable water and air pollution 

672 laws and regulations of the United States and the State of California; and shall obtain all required 

673 permits or licenses from the appropriate Federal, State, or local authorities necessary for the 

674 delivery of water by the Contractor; and shall be responsible for compliance with all Federal, 

675 State and local water quality standards applicable to surface and subsurface drainage and/or 

676 discharges generated through the use of Federal or Contractor facilities or Project Water 

677 provided by the Contractor within the Contractor’s Project Water Service Area. 

678 (c) This article shall not affect or alter any legal obligations of the Secretary to 

679 provide drainage or other discharge services. 

680 QUALITY OF WATER

681 16. Combined with Article 15. 

682 WATER ACQUIRED BY THE CONTRACTOR OTHER THAN

683 FROM THE UNITED STATES

684 17. (a) Omitted. 

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

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

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

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

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

Draft
Contract No. 14-06-200-5198B-LTR1 

31

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

691 facilities and deliver said water to lands within the Contractor’s Service Area, subject to 

692 payment to the United States of an appropriate rate as determined by the applicable 

693 Project ratesetting policy and the Project use power policy, if such Project use power 

694 policy is applicable, each as amended, modified, or superseded from time to time. 

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

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

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

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

699 water entitlements to any other Project Contractors; or (iv) interfere with the physical 

700 maintenance of the Project facilities; Provided, That nothing in this Article is intended to 

701 preclude the United States from passing the Contractor’s water rights water through 

702 Project storage facilities to the extent required to satisfy the Contractor’s water rights that 

703 are senior to those of the Project under the applicable provisions of California water law. 

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 

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

707 indemnify the United States and their respective officers, agents, and employees, from 

708 any claim for damage to persons or property, direct or indirect, resulting from the acts of 

709 the Contractor, its officers, employees, agents or assigns in (i) extracting or diverting 

710 non-Project water from any source, or (ii) diverting such non-Project water into Project 

711 facilities. 

Draft
Contract No. 14-06-200-5198B-LTR1 

32

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

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

714 applicable groundwater management plan applicable to the Contractor for the area from 

715 which it was extracted. 

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

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

718 capacity of the facilities declared to be available by the Contracting Officer for 

719 conveyance and transportation of non-Project water prior to any such remaining capacity 

720 being made available to non-Project Contractors.

721 OPINIONS AND DETERMINATIONS

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

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

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

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

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

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

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

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

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

731 statute or regulation. 

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

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

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

Draft
Contract No. 14-06-200-5198B-LTR1 

33

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

736 with the Contractor to the extent reasonably practicable.

737 COORDINATION AND COOPERATION

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

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

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

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

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

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

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

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

746 Contract. Each party shall retain exclusive decision making authority for all actions, opinion, 

747 and determinations to be made by the respective party. 

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

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

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

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

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

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

754 a real-time basis. 

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

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

757 this intent: 

Draft
Contract No. 14-06-200-5198B-LTR1 

34

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

759 assist in the development of integrated resource management plans for the Contractor. 

760 Further, the Contracting Officer will, as appropriate, seek authorizations for 

761 implementation of partnerships to improve water supply, water quality, and reliability. 

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

763 implementation and authorization in coordination with Project Contractors to improve the 

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

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

766 State of California to seek improved water resource management. 

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

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

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

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

771 management activities, and other issues as appropriate. 

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

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

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

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

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

777 CHARGES FOR DELINQUENT PAYMENTS

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

779 charges on delinquent payments. If a payment is not received by the due date, the Contractor 

780 shall pay an interest charge on the delinquent payment for each day the payment is delinquent 

781 beyond the due date. If a payment becomes 60 days delinquent, the Contractor shall pay, in 

782 addition to the interest charge, an administrative charge to cover additional costs of billing and 

783 processing the delinquent payment. If a payment is delinquent 90 days or more, the Contractor 

Draft
Contract No. 14-06-200-5198B-LTR1 

35

784 shall pay, in addition to the interest and administrative charges, a penalty charge for each day the 

785 payment is delinquent beyond the due date, based on the remaining balance of the payment due 

786 at the rate of 6 percent per year. The Contractor shall also pay any fees incurred for debt 

787 collection services associated with a delinquent payment. 

788 (b) The interest rate charged shall be the greater of either the rate prescribed 

789 quarterly in the Federal Register by the Department of the Treasury for application to overdue 

790 payments, or the interest rate of 0.5 percent per month. The interest rate charged will be 

791 determined as of the due date and remain fixed for the duration of the delinquent period. 

792 (c) When a partial payment on a delinquent account is received, the amount 

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

794 to the accrued interest, and finally to the overdue payment. 

795 EQUAL OPPORTUNITY

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

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

798 employment because of race, color, religion, sex, disability, or national origin. The Contractor 

799 will take affirmative action to ensure that applicants are employed, and that employees are 

800 treated during employment, without regard to their race, color, religion, sex, disability, or 

801 national origin. Such action shall include, but not be limited to the following: employment, 

802 upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; 

803 rates of pay or other forms of compensation; and selection for training, including apprenticeship. 

804 The Contractor agrees to post in conspicuous places, available to employees and applicants for 

805 employment, notices to be provided by the Contracting Officer setting forth the provisions of this 

806 nondiscrimination clause. 

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

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

809 consideration for employment without regard to race, color, religion, sex, disability, or national 

810 origin. 

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

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

813 to be provided by the Contracting Officer, advising the labor union or workers’ representative 

814 of the Contractor’s commitments under section 202 of Executive Order 11246 of 

815 September 24, 1965 (EO 11246), and shall post copies of the notice in conspicuous places 

816 available to employees and applicants for employment. 

817 (d) The Contractor will comply with all provisions of EO 11246, and of the 

818 rules, regulations, and relevant orders of the Secretary of Labor. 

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

820 EO 11246, and by the rules, regulations, and orders of the Secretary of Labor, or pursuant 

821 thereto, and will permit access to his books, records, and accounts by the Contracting Agency 

Draft
Contract No. 14-06-200-5198B-LTR1 

36

822 and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, 

823 regulations, and orders. 

824 (f) In the event of the Contractor’s noncompliance with the nondiscrimination 

825 clauses of this Contract or with any of such rules, regulations, or orders, this Contract may be 

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

827 ineligible for further Government contracts in accordance with procedures authorized in 

828 EO 11246, and such other sanctions may be imposed and remedies invoked as provided in 

829 EO 11246 or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided by law. 

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

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

832 Secretary of Labor issued pursuant to section 204 of EO 11246, so that such provisions will be 

833 binding upon each subcontractor or vendor. The Contractor will take such action with respect to 

834 any subcontract or purchase order as may be directed by the Secretary of Labor as a means of 

835 enforcing such provisions, including sanctions for noncompliance: Provided, however, that in 

836 the event the Contractor becomes involved in, or is threatened with, litigation with a 

837 subcontractor or vendor as a result of such direction, the Contractor may request that the United 

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

839 GENERAL OBLIGATION—BENEFITS CONDITIONED UPON PAYMENT

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

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

842 obligation may be distributed among the Contractor’s water users and notwithstanding the 

843 default of individual water users in their obligations to the Contractor. 

844 (b) The payment of charges becoming due pursuant to this Contract is a condition 

845 precedent to receiving benefits under this Contract. The United States shall not make water 

846 available to the Contractor through Project facilities during any period in which the Contractor is 

847 in arrears in the advance payment of water rates due the United States. The Contractor shall not 

848 deliver water under the terms and conditions of this Contract for lands or parties that are in 

849 arrears in the advance payment of water rates as levied or established by the Contractor. 

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

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

852 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

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

854 (Pub. L. 88-352; 42 U.S.C. § 2000d), the Rehabilitation Act of 1973 (Pub. L. 93-112, Title V, as 

855 amended; 29 U.S.C. § 791, et seq.), the Age Discrimination Act of 1975 (Pub. L. 94-135, 

856 Title III; 42 U.S.C. § 6101, et seq.), Title II of the Americans with Disabilities Act of 1990 

857 (Pub. L. 101-336; 42 U.S.C. § 12131, et seq.), and any other applicable civil rights laws, and 

858 with the applicable implementing regulations and any guidelines imposed by the U.S. 

859 Department of the Interior and/or Bureau of Reclamation. 

Draft
Contract No. 14-06-200-5198B-LTR1 

37

860 (b) These statutes prohibit any person in the United States from being 

861 excluded from participation in, being denied the benefits of, or being otherwise subjected to 

862 discrimination under any program or activity receiving financial assistance from the Bureau of 

863 Reclamation on the grounds of race, color, national origin, disability, or age. By executing this 

864 Contract, the Contractor agrees to immediately take any measures necessary to implement this 

865 obligation, including permitting officials of the United States to inspect premises, programs, and 

866 documents. 

867 (c) The Contractor makes this agreement in consideration of and for the 

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

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

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

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

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

873 agreements made in this article and that the United States reserves the right to seek judicial 

874 enforcement thereof. 

875 (d) Complaints of discrimination against the Contractor shall be investigated 

876 by the Contracting Officer’s Office of Civil Rights. 

PRIVACY ACT COMPLIANCE

877 24. Omitted. 

878 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

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

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

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

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

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

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

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

886 contract administration. 

887 WATER CONSERVATION

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

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

Draft
Contract No. 14-06-200-5198B-LTR1 

38

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

891 Contractor’s water conservation plan that has been determined by the Contracting Officer to 

892 meet the conservation and efficiency criteria for evaluating water conservation plans established 

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

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

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

896 Contract shall be contingent upon the Contractor’s continued implementation of such water 

897 conservation program. In the event the Contractor’s water conservation plan or any revised 

898 water conservation plan completed pursuant to subdivision (d) of Article 26 of this Contract have 

899 not yet been determined by the Contracting Officer to meet such criteria, due to circumstances 

900 which the Contracting Officer determines are beyond the control of the Contractor, water 

901 deliveries shall be made under this Contract so long as the Contractor diligently works with the 

902 Contracting Officer to obtain such determination at the earliest practicable date, and thereafter 

903 the Contractor immediately begins implementing its water conservation and efficiency program 

904 in accordance with the time schedules therein. 

905 (b) Should the amount of M&I Water delivered pursuant to subdivision (a) of 

906 Article 3 of this Contract equal or exceed 2,000 acre-feet per Year, the Contractor shall 

907 implement the best management practices identified by the time frames issued by the California 

908 Urban Water Conservation Council for such M&I Water unless any such practice is determined 

909 by the Contracting Officer to be inappropriate for the Contractor. 

910 (c) The Contractor shall submit to the Contracting Officer a report on the 

911 status of its implementation of the water conservation plan on the reporting dates specified in the 

912 then-existing conservation and efficiency criteria established under Federal law. 

Draft
Contract No. 14-06-200-5198B-LTR1 

39

913 (d) At five-year intervals, the Contractor shall revise its water conservation 

914 plan to reflect the then-current conservation and efficiency criteria for evaluating water 

915 conservation plans established under Federal law and submit such revised water management 

916 plan to the Contracting Officer for review and evaluation. The Contracting Officer will then 

917 determine if the water conservation plan meets Reclamation’s then-current conservation and 

918 efficiency criteria for evaluating water conservation plans established under Federal law. 

919 (e) If the Contractor is engaged in direct groundwater recharge, such activity 

920 shall be described in the Contractor’s water conservation plan. Such water conservation plan 

921 shall demonstrate sufficient lawful uses exist in the Contractor’s Service Area to show 

922 reasonable and beneficial use of the quantity of Delivered Water based on a long-term average in 

923 compliance with Federal Reclamation law. 

924 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

925 27. Except as specifically provided in Article 17 of this Contract, the provisions of 

926 this Contract shall not be applicable to or affect non-Project water or water rights now owned or 

927 hereafter acquired by the Contractor or any user of such water within the Contractor’s Service 

928 Area. Any such water shall not be considered Project Water under this Contract. In addition, 

929 this Contract shall not be construed as limiting or curtailing any rights which the Contractor or 

930 any water user within the Contractor’s Service Area acquires or has available under any other 

931 contract pursuant to Federal Reclamation law. 

932 OPERATION AND MAINTENANCE BY THE OPERATING

933 NON-FEDERAL ENTITY

934 28. Omitted. 

Draft
Contract No. 14-06-200-5198B-LTR1 

40

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; project operation, maintenance, and 

945 replacement logs; project land and rights-of-way use agreements; the water users’ land-use (crop 

946 census), land-ownership, land-leasing, and water-use data; and other matters that the Contracting 

947 Officer may require. Reports shall be furnished to the Contracting Officer in such form and on 

948 such date or dates as the Contracting Officer may require. Subject to applicable Federal laws 

949 and regulations, each party to this Contract shall have the right during office hours to examine 

950 and make copies of the other party’s books and records relating to matters covered by this 

951 Contract. 

952 (b) Notwithstanding the provisions of subdivision (a) of this Article, no 

953 books, records, or other information shall be requested from the Contractor by the Contracting 

954 Officer unless such books, records, or information are reasonably related to the administration or 

955 performance of this Contract. Any such request shall allow the Contractor a reasonable period of 

956 time within which to provide the requested books, records, or information. 

957 (c) Omitted. 

958 ASSIGNMENT LIMITED—SUCCESSORS AND ASSIGNS OBLIGATED

959 31. (a) The provisions of this Contract shall apply to and bind the successors and 

960 assigns of the parties hereto, but no assignment or transfer of this Contract or any right or interest 

961 therein by either party shall be valid until approved in writing by the other party. 

962 (b) The assignment of any right or interest in this Contract by either party 

963 shall not interfere with the rights or obligations of the other party to this Contract absent the 

964 written concurrence of said other party. 

Draft
Contract No. 14-06-200-5198B-LTR1 

41

965 (c) The Contracting Officer shall not unreasonably condition or withhold 

966 approval of any proposed assignment. 

967 SEVERABILITY

968 32. In the event that a person or entity who is neither (i) a party to a Project contract, 

969 nor (ii) a person or entity that receives Project Water from a party to a Project contract, nor 

970 (iii) an association or other form of organization whose primary function is to represent parties to 

971 Project contracts, brings an action in a court of competent jurisdiction challenging the legality or 

972 enforceability of a provision included in this Contract and said person, entity, association, or 

973 organization obtains a final court decision holding that such provision is legally invalid or 

974 unenforceable and the Contractor has not intervened in that lawsuit in support of the plaintiff(s), 

975 the parties to this Contract shall use their best efforts to (i) within 30 days of the date of such 

976 final court decision identify by mutual agreement the provisions in this Contract which must be 

977 revised and (ii) within three months thereafter promptly agree on the appropriate revision(s). 

978 The time periods specified above may be extended by mutual agreement of the parties. Pending 

979 the completion of the actions designated above, to the extent it can do so without violating any 

980 applicable provisions of law, the United States shall continue to make the quantities of Project 

981 Water specified in this Contract available to the Contractor pursuant to the provisions of this 

982 Contract which were not found to be legally invalid or unenforceable in the final court decision. 

983 RESOLUTION OF DISPUTES

984 33. Should any dispute arise concerning any provisions of this Contract, or the 

985 parties’ rights and obligations thereunder, the parties shall meet and confer in an attempt to 

986 resolve the dispute. Prior to the Contractor commencing any legal action, or the Contracting 

987 Officer referring any matter to Department of Justice, the party shall provide to the other party 

Draft
Contract No. 14-06-200-5198B-LTR1 

42

988 30 days’ written notice of the intent to take such action; Provided, That such notice shall not be 

989 required where a delay in commencing an action would prejudice the interests of the party that 

990 intends to file suit. During the 30-day notice period, the Contractor and the Contracting Officer 

991 shall meet and confer in an attempt to resolve the dispute. Except as specifically provided, 

992 nothing herein is intended to waive or abridge any right or remedy that the Contractor or the 

993 United States may have. 

994 OFFICIALS NOT TO BENEFIT

995 34. No Member of or Delegate to the Congress, Resident Commissioner, or official of 

996 the Contractor shall benefit from this Contract other than as a water user or landowner in the 

997 same manner as other water users or landowners. 

998 CHANGES IN CONTRACTOR’S ORGANIZATION

999 35. (a) While this Contract is in effect, no change may be made in the Contractor’s 

1000 organization, by inclusion or exclusion of lands or by any other changes which may affect the 

1001 respective rights, obligations, privileges, and duties of either the United States or the Contractor 

1002 under this Contract including, but not limited to, dissolution, consolidation, or merger, except 

1003 upon the Contracting Officer’s written consent. 

1004 (b) Within 30 days of receipt of a request for such a change, the Contracting 

1005 Officer will notify the Contractor of any additional information required by the Contracting 

1006 Officer for processing said request, and both parties will meet to establish a mutually agreeable 

1007 schedule for timely completion of the process. Such process will analyze whether the proposed 

1008 change is likely to: (i) result in the use of Project Water contrary to the terms of this Contract; 

1009 (ii) impair the ability of the Contractor to pay for Project Water furnished under this Contract or 

1010 to pay for any Federally-constructed facilities for which the Contractor is responsible; and 

1011 (iii) have an impact on any Project Water rights applications, permits, or licenses. In addition, 

1012 the Contracting Officer shall comply with the NEPA and ESA. The Contractor will be 

1013 responsible for all costs incurred by the Contracting Officer in this process, and such costs will 

1014 be paid in accordance with Article 25 of this Contract. 

Draft
Contract No. 14-06-200-5198B-LTR1 

43

1015 FEDERAL LAWS

1016 36. By entering into this Contract, the Contractor does not waive its rights to contest 

1017 the validity or application in connection with the performance of the terms and conditions of this 

1018 Contract of any Federal law or regulation; Provided, That the Contractor agrees to comply with 

1019 the terms and conditions of this Contract unless and until relief from application of such Federal 

1020 law or regulation to the implementing provision of the Contract is granted by a court of 

1021 competent jurisdiction. 

1022 NOTICES

1023 37. Any notice, demand, or request authorized or required by this Contract shall be 

1024 deemed to have been given, on behalf of the Contractor, when mailed, postage prepaid, or 

1025 delivered to the Area Manager, Bureau of Reclamation, 7794 Folsom Dam Road, Folsom, 

1026 California 95630-1799, and on behalf of the United States, when mailed, postage prepaid, or 

1027 delivered to the Chief, Water Resources Division, County of Sacramento, 827 Seventh Street, 

1028 Room 301, Sacramento, California 95814. The designation of the addressee or the address may 

1029 be changed by notice given in the same manner as provided in this Article for other notices. 

1030 CONFIRMATION OF CONTRACT

1031 38. Promptly after the execution of this Contract, the Contractor shall provide 

1032 evidence to the Contracting Officer that, pursuant to the laws of the State of California, the 

1033 Contractor is a legally constituted entity and the Contract is lawful, valid, and binding on the 

1034 Contractor. This Contract shall not be binding on the United States until such evidence has been 

1035 provided to the Contracting Officer’s satisfaction. 

1036 SUBCONTRACT FOR RESALE OF WATER

1037 39. Omitted. 

1038 MEDIUM FOR TRANSMITTING PAYMENTS

1039 40. (a) All payments from the Contractor to the United States under this Contract 

1040 shall be by the medium requested by the United States on or before the date payment is due. The 

1041 required method of payment may include checks, wire transfers, or other types of payment 

1042 specified by the United States. 

1043 (b) Upon execution of the Contract, the Contractor shall furnish the 

1044 Contracting Officer with the Contractor’s taxpayer’s identification number (TIN). The purpose 

1045 for requiring the Contractor’s TIN is for collecting and reporting any delinquent amounts arising 

1046 out of the Contractor’s relationship with the United States. 

Draft
Contract No. 14-06-200-5198B-LTR1 

44

1047 CONTRACT DRAFTING CONSIDERATIONS

1048 41. This Contract has been, negotiated and reviewed by the parties hereto, each of 

1049 whom is sophisticated in the matters to which this Contract pertains. The double spaced Articles 

1050 of this Contract have been drafted, negotiated, and reviewed by the parties, and no one party 

1051 shall be considered to have drafted the stated articles. 

1052 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of 

1053 the day and year first above written. 

1054 THE UNITED STATES OF AMERICA 

1055 By: ______________________________________ 

1056 Regional Director, Mid-Pacific Region 

1057 Bureau of Reclamation 

1058 (SEAL) 

1059 SACRAMENTO COUNTY WATER AGENCY 

1060 By: ______________________________________ 

1061 Chairman of the Board of Directors 

1062 Attest: 

1063 By: ______________________________ 

1064 Secretary of the Board of Directors 

Draft
EXHIBIT A

[Map of Contractor’s Service Area] 

Draft
EXHIBIT ―B‖

Rates and Charges 

(Placeholder) 

Draft