Irrigation and M&I 

Rev. R. O. Draft 10/20-2004 

Rev. SCCAO Draft 10/17-2004 

Rev. SCCAO Draft 03/19-2004 

Rev. SCCAO Draft 09/22-2003 

 Rev. RO Draft 02/06-2002 

 SCCAO Draft 11/16-2000 

Contract No. 

14-06-200-8466A-LTR1 

 UNITED STATES 

 DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

Central Valley Project, California 

LONG-TERM RENEWAL CONTRACT AMONG THE UNITED STATES,

THE DEPARTMENT OF WATER RESOURCES OF THE STATE OF CALIFORNIA,

AND HILLS VALLEY IRRIGATION DISTRICT

PROVIDING FOR PROJECT WATER SERVICE

Table of Contents

Article No. Title Page No.

 Preamble .............................................................................................................. 1-2 

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

 1 Definitions............................................................................................................ 5-9 

 2 Term of Contract.............................................................................................. 10-13

 3 Water to be Made Available and Delivered to the Contractor......................... 13-18 

 4 Time for Delivery of Water ............................................................................. 18-19 

 5 Point of Diversion and Responsibility for Distribution of Water....................19-24 

 6 Measurement of Water Within the Contractor’s Service Area........................ 24-25 

 7 Rates and Method of Payment for Water......................................................... 26-32 

 8 Rates and Method of Payment for Conveyance 

 and Other Services by DWR....................................................................... 32-34 

 9 Sales, Transfers, or Exchanges of Water ......................................................... 34-35 

 10 Application of Payments and Adjustments...................................................... 35-37 

 11 Temporary Reductions--Return Flows ............................................................ 37-38 

 12 Constraints on the Availability of Water ......................................................... 38-39 

 13 Unavoidable Groundwater Percolation................................................................. 39 

 14 Rules and Regulations........................................................................................... 39 

 15 Water and Air Pollution Control...................................................................... 39-40 

 16 Quality of Water ................................................................................................... 40 

 17 Water Acquired by the Contractor Other Than From the United States.......... 40-42 

 18 Opinions and Determinations ............................................................................... 42 

 19 Coordination and Cooperation......................................................................... 42-44 

 20 Charges for Delinquent Payments ........................................................................ 44
Contract No.14-06-200-8466A-LTR1 

Table of Contents - continued

Article No. Title Page No. 

 21 Equal Opportunity............................................................................................44-45 

 22 General Obligation--Benefits Conditioned Upon Payment ............................. 45-47 

 23 Compliance With Civil Rights Laws and Regulations ......................................... 47 

 24 Privacy Act Compliance ..................................................................................47-48

 25 Contractor to Pay Certain Miscellaneous Costs.................................................... 48 

 26 Water Conservation ......................................................................................... 48-50 

 27 Existing or Acquired Water or Water Rights........................................................ 50 

 28 Operation and Maintenance by Operating Non-Federal Entity ....................... 50-51 

 29 Contingent on Appropriation or Allotment of Funds ........................................... 52 

 30 Books, Records, and Reports................................................................................ 52 

 31 Assignment Limited--Successors and Assigns Obligated ............................... 52-53 

 32 Severability ........................................................................................................... 53 

 33 Resolution of Disputes..................................................................................... 53-54 

 34 Officials Not to Benefit......................................................................................... 54 

 35 Changes in Contractor’s Service Area.................................................................. 54 

 36 Federal Laws......................................................................................................... 55 

 37 Notices .................................................................................................................. 55

 38 Confirmation of Contract...................................................................................... 55 

 Signature Page ...................................................................................................... 56 

 

 Exhibit A - Map of Contractor's Service Area 

 Exhibit B - Rates and Charges 
Rev. R. O. Draft 10/20-2004 

Rev. SCCAO Draft 10/17-2004 

Rev. SCCAO Draft 03/19-2004 

Rev. SCCAO Draft 09/22-2003 

 Rev. RO Draft 02/06-2002 

 SCCAO Draft 11/16-2000 

Contract No. 

14-06-200-8466A-LTR1 

1 UNITED STATES 

2 DEPARTMENT OF THE INTERIOR 

3 BUREAU OF RECLAMATION 

4 Central Valley Project, California 

5 LONG-TERM RENEWAL CONTRACT AMONG THE UNITED STATES,

6 THE DEPARTMENT OF WATER RESOURCES OF THE STATE OF CALIFORNIA,

7 AND HILLS VALLEY IRRIGATION DISTRICT

8 PROVIDING FOR PROJECT WATER SERVICE

 

9 THIS CONTRACT, made this _______ day of ____________________, 2005, in 

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

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

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

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

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

15 (106 Stat. 4706), all collectively hereinafter referred to as Federal Reclamation law and pursuant 

16 to the California Central Valley Project Act [Part 3, Division 6 (commencing at Section 11100) 

17 of the California Water Code] and the California Water Resources Development Bond Act 

18 [Chapter 8, Part 6, Division 6 (commencing at Section 12930) of the California Water Code,] 

19 and all acts of the California legislature amendatory thereto or supplementary thereof, among 

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

21 DEPARTMENT OF WATER RESOURCES OF THE STATE OF CALIFORNIA, hereinafter 

22 referred to as DWR, and HILLS VALLEY IRRIGATION DISTRICT, hereinafter referred to as
Contract No. 14-06-200-8466A-LTR1 

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

24 to the laws thereof; 

25 WITNESSETH, That: 

26 EXPLANATORY RECITALS

 [1st 27 ] WHEREAS, the United States has constructed and is operating the Central Valley 

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

29 control, irrigation, municipal, domestic, industrial, fish and wildlife mitigation, protection and 

30 restoration, generation and distribution of electric energy, salinity control, navigation and other 

31 beneficial uses, of waters of the Sacramento River, the American River, the Trinity River, and the San 

32 Joaquin River and their tributaries; and 

[2nd 33 ] WHEREAS, the United States constructed the Project facilities, which will be used in 

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

35 [2.2] WHEREAS, as provided herein, Project Water may be made available to the Contractor 

36 from the Sacramento-San Joaquin Delta and/or the Friant Division and delivered to the Contractor 

37 through appropriate federal, state and/or local facilities; and 

38 [2.3] WHEREAS, DWR is engaged in the operation of the State Water Resources 

39 Development System pursuant to the laws of the State of California involving the development, 

40 transportation, and delivery of water supplies to public agencies throughout the State of California; and 

41 [2.4] WHEREAS, the Cross Valley Canal, connecting the California Aqueduct and the 

42 Friant-Kern Canal in Kern County, has been constructed by the Contractor and others at no cost to 

43 either the United States or DWR; and 

44 [2.5] WHEREAS, the Contractor has the right to use the Cross Valley Canal for conveyance 

45 of the Project Water furnished hereunder; and 
Contract No. 14-06-200-8466A-LTR1 

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[3rd 46 ] WHEREAS, the rights to Project Water were acquired by the United States pursuant to 

47 California law for operation of the Project; and 

[4th 48 ] WHEREAS, the Contractor and the United States entered into Contract 

49 No. 14-06-200-8466A, as amended, which established terms for the delivery to the Contractor of 

50 Project Water via the Cross Valley Canal from May 11, 1976, through February 29, 1996; and 

[5th 51 ] WHEREAS, the Contractor and the United States have pursuant to subsection 

52 3404(c)(1) of the Central Valley Project Improvement Act (CVPIA), subsequently entered into interim 

53 renewal contract(s) identified as Contract No(s). 14-06-200-8466A-IR1, -IR2, -IR3, -IR4, -IR5, -IR6, 

54 -IR7, and -IR8, the current of which is hereinafter referred to as the Existing Contract, which provided 

55 for the continued water service to the Contractor from March 1, 2004, through February 28, 2005; and 

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

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

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

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

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

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

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

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

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

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

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

67 obligations under the Existing Contract; and 

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

69 Officer that the Contractor has utilized the Project Water supplies available to it for reasonable and 
Contract No. 14-06-200-8466A-LTR1 

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70 beneficial use and/or has demonstrated projected future demand for water use such that the Contractor 

71 has the capability and expects to utilize fully for reasonable and beneficial use the quantity of Project 

72 Water to be made available to it pursuant to this Contract; and 

[11th 73 ] WHEREAS, water obtained from the Project has been relied upon by urban and 

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

75 essential portion of its water supply; and 

[12th 76 ] WHEREAS, the economies of regions within the Project, including the Contractor’s, 

77 depend upon the continued availability of water, including water service from the Project; and 

[13th 78 ] WHEREAS, the Secretary intends through coordination, cooperation, and partnerships 

79 to pursue measures to improve water supply, water quality, and reliability of the Project for all Project 

80 purposes; and 

[14th 81 ] WHEREAS, the mutual goals of the United States and the Contractor include: to 

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

83 the Project as required by law; to guard reasonably against Project Water shortages; to achieve a 

84 reasonable balance among competing demands for use of Project Water; and to comply with all 

85 applicable environmental statutes, all consistent with the legal obligations of the United States relative 

86 to the Project; and 

[15th 87 ] WHEREAS, the parties intend by this Contract to develop a more cooperative 

88 relationship in order to achieve their mutual goals; and 

89 [15.2] WHEREAS, the Contractor desires to contract with DWR for conveyance of Project 

90 Water through the facilities of the State Water Project (SWP) as aforesaid under an arrangement 

91 wherein the United States will furnish the necessary power for pumping such water through DWR's 

92 Delta Pumping Plant and Dos Amigos Pumping Plant pursuant to the then-existing CVP Project use 

93 power policy; and 
Contract No. 14-06-200-8466A-LTR1 

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94 [15.3] WHEREAS, DWR is willing to convey such water through State Facilities subject to 

95 needs and obligations of the SWP and the availability of transportation capacity and payment of costs 

96 as herein provided; and 

[16th 97 ] WHEREAS, the United States, DWR, and the Contractor are willing to enter into this 

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

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

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

101 DEFINITIONS

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

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

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

105 dates inclusive; 

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

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

108 annually by the Contracting Officer pursuant to this Contract; 

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

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

111 Contract Total; 

112 (d) “Contracting Officer” shall mean the Secretary of the Interiors duly 

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

114 regulation; 

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

116 which the Contractor is entitled under subdivision (a) of Article 3 of this Contract; 
Contract No. 14-06-200-8466A-LTR1 

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

118 is permitted to provide Project Water under this Contract as described in Exhibit “A” attached hereto, 

119 which may be modified from time to time in accordance with Article 35 of this Contract without 

120 amendment of this Contract; 

121 (f2) “Cross Valley Canal” shall mean the water conveyance and related 

122 works constructed by the Contractor and others to deliver water from the State Facilities, which canal 

123 currently is operated by KCWA; 

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

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

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

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

128 (96 Stat. 1263), as amended, hereinafter referred to as RRA; 

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

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

131 Federal Reclamation law; 

132 (j) “Full Cost Rate” shall mean an annual water rate, as determined 

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

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

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

136 or applicable contract provisions. Interest will accrue on both the construction expenditures and funded 

137 O&M deficits from October 12, 1982, on costs outstanding at that date, or from the date incurred in the 

138 case of costs arising subsequent to October 12, 1982, and shall be calculated in accordance with 

139 subsections 202(3)(B) and (3)(C) of the RRA. The Full Cost Rate includes actual operation, 
Contract No. 14-06-200-8466A-LTR1 

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140 maintenance, and replacement costs consistent with Section 426.2 of the Rules and Regulations for the 

141 RRA; 

142 (k) “Ineligible Lands” shall mean all lands to which Irrigation Water may 

143 not be delivered in accordance with Section 204 of the RRA; 

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

145 applicable to the delivery of Irrigation Water; 

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

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

148 incidental thereto, and watering of livestock; 

149 (m2) “KCWA” shall mean the Kern County Water Agency; 

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

151 leases nonexempt land, as provided in 43 CFR 426.2; 

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

153 Irrigation Water, made available to the Contractor. M&I Water shall include water used for human use 

154 and purposes such as the watering of landscaping or pasture for animals (e.g., horses) which are kept 

155 for personal enjoyment or water delivered to land holdings operated in units of less than five acres 

156 unless the Contractor establishes to the satisfaction of the Contracting Officer that the use of water 

157 delivered to any such landholding is a use described in subdivision (m) of this Article; 

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

159 to the delivery of M&I Water; 

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

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

162 maintenance of Project facilities; 
Contract No. 14-06-200-8466A-LTR1 

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163 (r) “Operating Non-Federal Entity” shall mean either the San Luis & 

164 Delta-Mendota Water Authority or the Friant Water Authority, their successors or assigns, non-Federal 

165 entities which have the obligation to operate and maintain all or a portion of the Project facilities 

166 pursuant to agreements with the United States, and which may have funding obligations with respect 

167 thereto; 

168 (r2) “Operations Manual” shall mean the manual setting forth detailed operations 

169 and management procedures prepared by DWR, the Contracting Officer and the Contractor; 

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

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

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

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

174 Reclamation law; 

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

176 or delivered by the Secretary in accordance with the statutes authorizing the Project 

177 and in accordance with the terms and conditions of water rights acquired pursuant to 

178 California law; 

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

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

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

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

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

184 contract(s); 
Contract No. 14-06-200-8466A-LTR1 

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

186 or an authorized representative acting pursuant to any authority of the Secretary and through any 

187 agency of the Department of the Interior; 

188 (x2) “State Facilities” shall mean that portion of the SWP (including DWR's portion 

189 of joint facilities), necessary to convey Project Water from the Sacramento-San Joaquin Delta (Delta) 

190 to Reach 16A of the California Aqueduct; 

191 (x3) “SWP” shall mean the California State Water Project; 

192 (x4) “SWP Contractor” shall mean those entities with a long-term water supply 

193 contract for water deliveries of SWP water on the date this Contract is executed; 

194 (y) “Tiered Pricing Component” shall be the incremental amount to be paid for each 

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

196 (y2) “Transportation Minimum OMP&R Costs” and “Transportation Variable 

197 OMP&R Costs” shall mean those costs as defined in the long-term SWP contracts and as annually 

198 described in DWR Bulletin 132; 

199 (z) “Water Delivered” or “Delivered Water” shall mean Project Water diverted for 

200 use by the Contractor at the point(s) of delivery approved by the Contracting Officer; 

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

202 can be delivered to the Contractor for the upcoming Year as declared by the Contracting Officer, 

203 pursuant to subdivision (a) of Article 4 of this Contract; 

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

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

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

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

208 Year through the last day of February of the following Calendar Year. 
Contract No. 14-06-200-8466A-LTR1 

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209 TERM OF CONTRACT

210 2. (a) This Contract shall be effective March 1, 2005, through February 28, 2030. In 

211 the event the Contractor wishes to renew this Contract beyond February 28, 2030, the Contractor shall 

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

213 date this Contract expires. The renewal of this Contract insofar as it pertains to the furnishing of 

214 Irrigation Water to the Contractor shall be governed by subdivision (b) of this Article, and the renewal 

215 of this Contract insofar as it pertains to the furnishing of M&I Water to the Contractor shall be 

216 governed by subdivision (c) of this Article. The term of this Contract and its renewal insofar as it 

217 pertains to conveyance of water in SWP Facilities shall be governed by subdivision (e) of this Article. 

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

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

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

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

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

223 (2) The conditions which must be met for this Contract to be renewed are: 

224 (i) the Contractor has prepared a water conservation plan that has been determined by the Contracting 

225 Officer in accordance with Article 26 of this Contract to meet the conservation and efficiency criteria 

226 for evaluating such plans established under Federal law; (ii) the Contractor is implementing an 

227 effective water conservation and efficiency program based on the Contractor’s water conservation plan 

228 as required by Article 26 of this Contract; (iii) the Contractor is maintaining all water measuring 

229 devices and implementing all water measurement methods as approved by the Contracting Officer 

230 pursuant to Article 6 of this Contract; (iv) the Contractor has reasonably and beneficially used the 

231 Project Water supplies made available to it and, based on projected demands, is reasonably anticipated 

232 and expects to fully utilize for reasonable and beneficial use the quantity of Project Water to be made 
Contract No. 14-06-200-8466A-LTR1 

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233 available to it pursuant to such renewal; (v) the Contractor is complying with all terms and conditions 

234 of this Contract; and (vi) the Contractor has the physical and legal ability to deliver Project Water. 

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

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

237 with the parties’ respective legal rights and obligations, and in consideration of all relevant facts and 

238 circumstances, as those circumstances exist at the time of renewal, including, without limitation, the 

239 Contractor’s need for continued delivery of Project Water; environmental conditions affected by 

240 implementation of the Contract to be renewed, and specifically changes in those conditions that 

241 occurred during the life of the Contract to be renewed; the Secretary’s progress toward achieving the 

242 purposes of the CVPIA as set out in Section 3402 and in implementing the specific provisions of the 

243 CVPIA; and current and anticipated economic circumstances of the region served by the Contractor. 

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

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

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

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

248 opportunity to comment to the Contracting Officer on the proposed adoption and application of any 

249 revised policy applicable to the delivery of M&I Water that would limit the term of any subsequent 

250 renewal contract with the Contractor for the furnishing of M&I Water to less than 40 years. 

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

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

253 whether a conversion of the relevant portion of this Contract to a contract under subsection 9(d) of the 

254 Reclamation Project Act of 1939 can be accomplished pursuant to the Act of July 2, 1956 (70 Stat. 

255 483). The Contracting Officer shall also make a determination ten years after the date of execution of 

256 this Contract and every five years thereafter during the term of the Contract of whether a conversion of 
Contract No. 14-06-200-8466A-LTR1 

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257 the relevant portion of this Contract to a contract under subsection 9(c)(1) of the Reclamation Project 

258 Act of 1939 can be accomplished. Notwithstanding any provision of this Contract, the Contractor 

259 reserves and shall have all rights and benefits under the Act of July 2, 1956 (70 Stat 483). The 

260 Contracting Officer anticipates that during the term of this Contract, all authorized Project construction 

261 expected to occur will have occurred, and on that basis the Contracting Officer agrees upon such 

262 completion to allocate all costs that are properly assignable to the Contractor, and agrees further that, at 

263 any time after such allocation is made, and subject to satisfaction of the conditions set out in this 

264 subdivision, this Contract shall, at the request of the Contractor, be converted to a contract under 

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

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

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

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

269 provided for under Federal Reclamation law, the remaining amount of construction costs assignable for 

270 ultimate return by the Contractor can probably be repaid to the United States within the term of a 

271 contract under subsection 9(d) or 9(c)(1), whichever is applicable. If the remaining amount of costs 

272 that are properly assignable to the Contractor cannot be determined during the term of this Contract, 

273 the Contracting Officer shall notify the Contractor, and provide the reason(s) why such a determination 

274 could not be made. Further, the Contracting Officer shall make such a determination as soon thereafter 

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

276 above, conversion to a contract under subsection 9(d) or 9(c)(1), whichever is applicable. In the event 

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

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

279 such term, the parties shall incorporate in any subsequent renewal contract as described in subdivision 
Contract No. 14-06-200-8466A-LTR1 

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280 (b) of this Article a provision that carries forth in substantially identical terms the provisions of this 

281 subdivision. 

282 (e) DWR’s agreement to convey water under this Contract shall be effective 

283 until February 28, 2030. Thereafter, DWR and the Contractor may renew the agreement to convey for 

284 additional periods on terms mutually agreeable to the parties. The parties acknowledge that 

285 operation of the SWP, including the State Facilities, is not, and shall not be, subject to Federal 

286 Reclamation law. 

287 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE CONTRACTOR

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

289 licenses; Federal law; and subject to the provisions set forth in Articles 11 and 12 of this Contract, the 

290 Contracting Officer shall make available in the Delta for delivery to the Contractor 3,346 acre-feet of 

291 Project Water for irrigation and M&I purposes. Cross Valley Contractors shall have a primary priority 

292 to pumping capacity made available by the SWP for CVP purposes up to the allocation made for CVP 

293 irrigation contractors south of the Delta. Allocations of water supply to Cross Valley Contractors and 

294 any additional pumping capacity made available by SWP for Cross Valley Contractors’ purposes shall 

295 be addressed in the Operations Manual. Water Delivered to the Contractor in accordance with this 

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

297 Contract, attached exhibits, and the Operations Manual (including any subsequent modifications 

298 thereto). 

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

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

301 hydrologic conditions and implementation of Federal and State laws, the likelihood of the Contractor 

302 actually receiving the full amount of Project Water set out in subdivision (a) of this Article in any 

303 given Year is uncertain. The Contracting Officer’s modeling referenced in the PEIS projected that the 
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304 Contract Total set forth in this Contract will not be available to the Contractor in many years. During 

305 the most recent five years, the Recent Historic Average of water made available to the Contractor was 

306 2,201 acre-feet. Nothing in subdivision (b) of this Article shall affect the rights and obligations of the 

307 parties under any provision of this Contract. 

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

309 legal requirements. 

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

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

312 banking programs, surface water storage programs, and other similar programs utilizing Project Water 

313 or other water furnished pursuant to this Contract conducted within the Contractor’s Service Area 

314 which are consistent with applicable State law and result in use consistent with Federal Reclamation 

315 law will be allowed; Provided, That any direct recharge program(s) is (are) described in the 

316 Contractor’s water conservation plan submitted pursuant to Article 26 of this Contract; Provided, 

317 further, That such water conservation plan demonstrates sufficient lawful uses exist in the Contractor’s 

318 Service Area so that using a long-term average, the quantity of Delivered Water is demonstrated to be 

319 reasonable for such uses and in compliance with Federal Reclamation law. Groundwater recharge 

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

321 utilizing Project Water or other water furnished pursuant to this Contract conducted outside the 

322 Contractor’s Service Area may be permitted upon written approval of the Contracting Officer, which 

323 approval will be based upon environmental documentation, Project Water rights, and Project 

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

325 guidelines. 

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

327 biological opinion(s) prepared as a result of a consultation regarding the execution of this Contract 
Contract No. 14-06-200-8466A-LTR1 

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328 undertaken pursuant to Section 7 of the Endangered Species Act of 1973 (ESA), as amended, that are 

329 within the Contractor’s legal authority to implement. The Existing Contract, which evidences in excess 

330 of 28 years of diversions for irrigation and/or M&I purposes of the quantities of water provided in 

331 subdivision (a) of Article 3 of this Contract, will be considered in developing an appropriate baseline 

332 for the biological assessment(s) prepared pursuant to the ESA, and any other needed environmental 

333 review. Nothing herein shall be construed to prevent the Contractor from challenging or seeking 

334 judicial relief in a court of competent jurisdiction with respect to any biological opinion or other 

335 environmental documentation referred to in this Article. 

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

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

338 available to the Project, can be made available to the Contractor in addition to the Contract Total under 

339 Article 3 of this Contract during the Year without adversely impacting other Project Contractors. At 

340 the request of the Contractor, the Contracting Officer will consult with the Contractor prior to making 

341 such a determination. If the Contracting Officer determines that Project Water, or other water 

342 available to the Project, can be made available to the Contractor, the Contracting Officer will announce 

343 the availability of such water and shall so notify the Contractor as soon as practicable. The 

344 Contracting Officer will thereafter meet with the Contractor and other Project Contractors capable of 

345 taking such water to determine the most equitable and efficient allocation of such water. If the 

346 Contractor requests the delivery of any quantity of such water, the Contracting Officer shall make such 

347 water available to the Contractor in accordance with applicable statutes, regulations, guidelines, and 

348 policies. If the Contracting Officer determines that there is an unusually large water supply not 

349 otherwise storable for Project purposes or infrequent and otherwise unmanaged flood flows of short 

350 duration from the Friant Division, then Friant Division Project Water may be made available to the 

351 Contractor as Section 215 Water if the Contractor enters into a temporary contract, not to exceed one 
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352 year, with the United States for the delivery of such water or, as otherwise provided for in Federal 

353 Reclamation law and associated regulations: Provided, That such water shall be first made available to 

354 the original 28 long-term Friant Division contractors. Water in addition to the quantities provided for 

355 in this Contract made available to the Contractor by the Contracting Officer shall be scheduled, 

356 conveyed and/or stored by DWR only to the extent that DWR has provided separate approval to do so. 

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

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

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

360 quantity of Project Water which may be made available by the United States to the Contractor during 

361 the subsequent Year referred to as “peruse.” The Contracting Officer’s written approval may permit 

362 such uses in accordance with applicable statutes, regulations, guidelines, and policies. 

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

364 law to the reasonable and beneficial use of Water Delivered pursuant to this Contract during the term 

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

366 terms thereof shall not be disturbed so long as the Contractor shall fulfill all of its obligations under 

367 this Contract and any renewals thereof. Nothing in the preceding sentence shall affect the Contracting 

368 Officer’s ability to impose shortages under Article 11 or subdivision (b) of Article 12 of this Contract 

369 or applicable provisions of any subsequent renewal contracts. 

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

371 delivered for purposes other than those described in subdivisions (m) and (o) of Article 1 of this 

372 Contract upon written approval by the Contracting Officer in accordance with the terms and conditions 

373 of such approval. 

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

375 necessary for the Project and to provide the water available under this Contract. The Contracting 
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376 Officer shall not object to participation by the Contractor, in the capacity and to the extent permitted by 

377 law, in administrative proceedings related to the Project Water rights; Provided, That the Contracting 

378 Officer retains the right to object to the substance of the Contractor’s position in such a proceeding; 

379 Provided further, That in such proceedings the Contracting Officer shall recognize the Contractor has a 

380 legal right under the terms of this Contract to use Project Water. 

381 (k) Conveyance and/or storage of Project Water by DWR shall be subject to 

382 capacity available in State Facilities in excess of capacity determined by DWR in its sole discretion to 

383 be needed for all SWP operations including the Environmental Water Account and similar programs, 

384 or any services to long-term SWP Contractors. For purposes of determining the available capacity 

385 under this Contract, the deliveries of Project Water to the Contractor shall not be considered a “service 

386 to long-term SWP Contractors,” notwithstanding any arrangement the Contractor may have with a 

387 SWP Contractor. Conveyance and/or storage for the Contractor may be curtailed prior or subsequent 

388 to approval of the Contractor's schedule under Article 4 of this Contract, in the event DWR determines 

389 it will interfere with the delivery of water to SWP Contractors or other SWP operations necessary to 

390 meet long-term obligations of the SWP, including delivery of water to SWP storage or regulation of 

391 stored water for delivery to SWP Contractors. 

392 (l) If in any Year after DWR and the Contracting Officer have approved a schedule 

393 or any revision thereof submitted in accordance within subdivision (a) and (b) of Article 4 of this 

394 Contract, and if the Contracting Officer and/or DWR are unable to make water of suitable quality 

395 available in the quantities and at the times requested in the schedule and the Contractor does not elect 

396 to receive and does not receive such water at other times during such Year, then the Contractor shall be 

397 entitled to an adjustments for overpayment as provided in subdivision (c) of Article 7, subdivision (d) 

398 of Article 8, and Article 10 of this Contract. Notwithstanding any other provision of law, this shall be 
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399 the Contractor’s sole remedy against the State of California, DWR, its officers, agents and employees 

400 for failure to deliver a quantity of water of suitable quality under this Contract for any reason. 

401 TIME FOR DELIVERY OF WATER

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

403 announce the Contracting Officer’s expected declaration of the Water Made Available. Such 

404 declaration will be expressed in terms of both Water Made Available and the Recent Historic Average 

405 and will be updated monthly, and more frequently if necessary, based on then-current operational and 

406 hydrologic conditions and a new declaration with changes, if any, to the Water Made Available will be 

407 made. The Contracting Officer shall provide forecasts of Project operations and the basis of the 

408 estimate, with relevant supporting information, upon the written request of the Contractor. 

409 Concurrently with the declaration of the Water Made Available, the Contracting Officer shall provide 

410 the Contractor with the updated Recent Historic Average. The declaration of Project operations will be 

411 expressed in terms of both Water Made Available and the Recent Historic Average. 

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

413 after approval of the receiving agency on behalf of the Contractor, shall submit to DWR and the 

414 Contracting Officer a written schedule, satisfactory to the Contracting Officer and consistent with the 

415 criteria specified in the Operations Manual. The written schedule shall show the monthly quantities of 

416 Project Water to be delivered by the United States to the Contractor pursuant to this Contract for the 

417 Year commencing on such March 1. The Contracting Officer shall use all reasonable means to deliver 

418 Project Water according to the approved schedule for the Year commencing on such March 1. 

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

420 Project Water the Contractor intends to put to reasonable and beneficial use within the Contractor's 

421 Service Area or to sell, transfer or exchange pursuant to Article 9 of this Contract during any Year. 
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422 (d) Subject to the conditions set forth in subdivision (a) of Article 3 of this Contract, 

423 the United States and DWR shall deliver Project Water to the Contractor in accordance with the initial 

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

425 revision(s), satisfactory to the Contracting Officer, thereto submitted within a reasonable time prior to 

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

427 (e) Scheduling and delivery of Project Water to the Contractor shall be in 

428 accordance with detailed procedures set forth in the Operations Manual as it may be amended from 

429 time to time. 

430 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

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

432 shall be delivered to the Contractor at a point or points of delivery either on Project and/or State 

433 facilities or another location or locations mutually agreed to in writing by the Contracting Officer, 

434 DWR, and the Contractor. The parties acknowledge that Project Water to be furnished to the 

435 Contractor pursuant to this Contract shall be conveyed by DWR and delivered to the Contractor by 

436 direct delivery via the Cross Valley Canal and/or by exchange arrangements involving, Arvin-Edison 

437 Water Storage District or others. The parties further acknowledge that such exchange arrangements 

438 are not transfers subject to Section 3405(a) of CVPIA. Notwithstanding Article 9 of this Contract, 

439 such exchange arrangements, other than the previously approved exchange arrangements with Arvin440 Edison Water Storage District, shall be submitted to the Contracting Officer for approval in accordance 

441 with principles historically applied by the Contracting Officer in approving Cross Valley exchange 

442 arrangements. DWR shall have no obligation to make such exchange arrangements or be responsible 

443 for water transported in facilities that are not a part of the SWP. 

444 (b) Omitted. 
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445 (b2) When Project Water is made available by the Contracting Officer at Clifton 

446 Court Forebay, DWR shall provide to the Contractor, subject to the availability of capacity as 

447 determined by DWR, conveyance from the Delta and storage in DWR’s share of storage at San Luis 

448 Reservoir, if necessary, of such Project Water consistent with subdivision (k) of Article 3, the 

449 following provisions, and the Operations Manual; 

450 (1) The Contracting Officer shall deliver or cause to be delivered into the 

451 DWR's Clifton Court Forebay, or at the points mutually agreed to by the parties in accordance with 

452 Article 5, Project Water in such quantities and of such quality as shall be sufficient to perform the 

453 Contracting Officer's and DWR's obligation to furnish water to the Contractor as set forth in this 

454 Contract. Such deliveries into Clifton Court Forebay shall be made at such times and rates of flow as 

455 the Contracting Officer and DWR shall agree. 

456 (2) DWR, in accordance with an approved Project Water delivery schedule, 

457 shall convey the amount of water delivered into DWR's Clifton Court Forebay by the Contracting 

458 Officer directly: (i) to turnouts from the California Aqueduct from Reaches 3 through 16A or to other 

459 points of diversion mutually agreed to in writing by DWR and the Contractor, or (ii) to DWR or 

460 federal share of storage in San Luis Reservoir for later release and delivery to the Contractor or (iii) to 

461 replace water delivered to the Contractor from DWR's share of San Luis Reservoir prior to DWR 

462 receiving Project Water from the Contracting Officer, to the extent DWR determines under subdivision 

463 (k) of Article 3 that capacity (and water in the event of an exchange) is available for such conveyance, 

464 storage, or exchange (if any). Such deliveries of Project Water shall be required to be made pursuant 

465 to subdivision (k) of Article 3 and in a manner which will not increase the cost of or adversely affect 

466 SWP operations and the quantity or quality of water deliveries to SWP Contractors. 

467 (3) If DWR delivers water to the Contractor from DWR's share of storage in 

468 San Luis Reservoir prior to the Contracting Officer providing Project Water at DWR's Clifton Court 
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469 Forebay, the United States shall return a like amount of water to DWR pursuant to the procedures set 

470 forth in the Operations Manual. 

471 (4) The total amount of Project Water delivered at Clifton Court Forebay to 

472 DWR by the Contracting Officer shall include water to compensate DWR for water conveyance and 

473 storage losses incurred in the delivery of Project Water to the Contractor. The amount of such 

474 conveyance and storage losses will be determined pursuant to procedures set forth in the Operations 

475 Manual. 

476 (5) Project Water received by DWR at Clifton Court Forebay for 

477 conveyance and/or storage for delivery to the Contractor will be commingled with waters of DWR 

478 which are pumped through facilities of the California Aqueduct and with other waters of both the 

479 United States and DWR in the joint use facilities of the San Luis Unit. 

480 (6) Priorities for use of DWR's share of storage at San Luis Reservoir for 

481 storage of Project Water shall be subject to subdivision (k) of Article 3 and all DWR obligations to the 

482 SWP operations and SWP Contractors and to the criteria specified in the Operations Manual. 

483 (7) Subject to the necessary arrangements, the Contracting Officer shall 

484 transmit or cause to be transmitted, by exchange or otherwise, such quantities of power as shall be 

485 required by DWR to pump through its Delta Pumping Plant and its share of Dos Amigos Pumping 

486 Plant, the quantities of Project Water transported into Clifton Court Forebay pursuant to (1) of this 

487 subdivision. 

488 (8) DWR shall furnish the Contracting Officer with such information as the 

489 Contracting Officer and DWR agree is needed regarding the timing and quantities of power required 

490 by DWR to pump Project Water. Such information shall be exchanged between the Contracting 

491 Officer and DWR in accordance with provisions set forth in the Operations Manual. 
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492 (9) The Contracting Officer and DWR may, under terms and conditions 

493 satisfactory to both, and in accordance with applicable law, exchange water and/or power necessary for 

494 delivery of Project Water to the Contractor under terms of this Contract. Such exchange shall be in 

495 accordance with the provisions set forth in the Operations Manual. 

496 (b3) To the extent that Friant Division Project Water exceeds Friant 

497 Division Contract demand and other Project purposes, as determined by the Contracting Officer, and if 

498 the Contractor so requests, the Contracting Officer, subject to subdivision (d) of Article 3 of this 

499 Contract, shall make Project Water provided for in subdivision (a) of Article 3 of this Contract 

500 available from such Friant Division supplies. 

501 (b4) Project Water may be provided by the Contracting Officer to the Contractor, at 

502 the Contractor's request and subject to the terms and conditions of this Contract, through Federal Delta 

503 diversion and conveyance facilities and/or stored in the Federal share of storage at San Luis Reservoir 

504 for re-regulation for later delivery to the Contractor to the extent such diversion, conveyance and/or 

505 storage does not diminish the ability of the Project to deliver Project Water to users in the Delta 

506 Division, San Luis Unit, and San Felipe Division service areas pursuant to existing contracts and 

507 assignments or any renewals thereof, to meet current Reclamation commitments to Pajaro Valley 

508 Water Management Agency, or to meet other legal obligations of the Project including, but not limited 

509 to agreements related to the joint operation of the state and Federal projects. 

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

511 land classification provisions of Federal Reclamation law and the associated regulations. The 

512 Contractor shall not deliver Project Water to land outside the Contractor's Service Area unless 

513 approved in advance by the Contracting Officer. 

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

515 measured and recorded with equipment furnished, installed, operated, and maintained by the 
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516 United States, DWR, or the Operating Non-Federal Entity/Entities at the point or points of delivery 

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

518 the Contracting Officer or DWR shall investigate, or cause to be investigated by the appropriate 

519 Operating Non-Federal Entity, the accuracy of such measurements and shall take any necessary steps 

520 to adjust any errors appearing therein. For any period of time when accurate measurements have not 

521 been made, the Contracting Officer shall consult with the Contractor and the appropriate Operating 

522 Non-Federal Entity prior to making a final determination of the quantity delivered for that period of 

523 time. 

524 (e) Neither the Contracting Officer, nor DWR, nor any Operating Non-Federal 

525 Entity/Entities shall be responsible for the control, carriage, handling, use, disposal, or distribution of 

526 Water Delivered to the Contractor pursuant to this Contract beyond the delivery points specified in 

527 subdivision (a) of this Article. The Contractor shall indemnify the United States, DWR, and their 

528 officers, employees, agents, and assigns on account of damage or claim of damage of any nature 

529 whatsoever for which there is legal responsibility, including property damage, personal injury, or death 

530 arising out of or connected with the control, carriage, handling, use, disposal, or distribution of such 

531 Water Delivered beyond such delivery points, except for any damage or claim arising out of: (i) acts 

532 or omissions of the Contracting Officer, DWR, or any of their officers, employees, agents, or assigns, 

533 including the Operating Non-Federal Entity/Entities, with the intent of creating the situation resulting 

534 in any damage or claim; (ii) willful misconduct of the Contracting Officer, DWR, or any of their 

535 officers, employees, agents, or assigns, including the Operating Non-Federal Entity/Entities; 

536 (iii) negligence of the Contracting Officer or any of his officers, employees, agents, or assigns 

537 including the Operating Non-Federal Entity/Entities; or (iv) damage or claims resulting from a 

538 malfunction of facilities owned and/or operated by the United States, DWR, or the Operating Non539 Federal Entity/Entities; Provided, That the Contractor is not the Operating Non-Federal Entity that 
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540 owned or operated the malfunctioning facility(ies) from which the damage claim arose. In the event 

541 any such claim or liability, referenced in this Article or otherwise arising from this Contract, is made 

542 against DWR, its officers or its employees, the Contractor agrees to defend, indemnify and hold each 

543 of them harmless from such claim to the extent such claim does not arise from an error or omission of 

544 DWR related to the carriage and control of Project Water made available to the Contractor by the 

545 Contracting Officer. 

546 MEASUREMENT OF WATER WITHIN THE CONTRACTOR’S SERVICE AREA

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

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

549 purposes within the Contractor’s Service Area is measured at each agricultural turnout and such water 

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

551 devices or water measuring methods of comparable effectiveness must be acceptable to the 

552 Contracting Officer. The Contractor shall be responsible for installing, operating, and maintaining and 

553 repairing all such measuring devices and implementing all such water measuring methods at no cost to 

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

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

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

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

558 this Contract. Nothing herein contained, however, shall preclude the Contractor from establishing and 

559 collecting any charges, assessments, or other revenues authorized by California law. The Contractor 

560 shall include a summary of all its annual surface water deliveries in the annual report described in 

561 subdivision (c) of Article 26. 

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

563 of this Contract, the Contractor shall provide to the Contracting Officer a written report describing the 
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564 measurement devices or water measuring methods being used or to be used to implement subdivision 

565 (a) of this Article and identifying the agricultural turnouts and the M&I service connections or 

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

567 devices or water measuring methods are being used, and, if applicable, identifying the locations at 

568 which such devices and/or methods are not yet being used including a time schedule for 

569 implementation at such locations. The Contracting Officer shall advise the Contractor in writing 

570 within 60 days as to the adequacy of, and necessary modifications, if any, of the measuring devices or 

571 water measuring methods identified in the Contractor’s report and if the Contracting Officer does not 

572 respond in such time, they shall be deemed adequate. If the Contracting Officer notifies the Contractor 

573 that the measuring devices or methods are inadequate, the parties shall within 60 days following the 

574 Contracting Officer’s response, negotiate in good faith the earliest practicable date by which the 

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

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

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

578 Area after the effective date of this Contract shall also comply with the measurement provisions 

579 described in subdivision (a) of this Article. 

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

581 in writing by April 30 of each Year of the monthly volume of surface water delivered within the 

582 Contractor’s Service Area during the previous Year. 

583 (e) The Contractor shall inform the Contracting Officer, DWR, and the Operating 

584 Non-Federal Entity/Entities on or before the 20th calendar day of each month of the quantity of 

585 Irrigation and M&I Water taken during the preceding month. 
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586 RATES AND METHOD OF PAYMENT FOR WATER 

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

588 Delivered Water at Rates, Charges, and the Tiered Pricing Component established in accordance with: 

589 (i) the Secretary’s ratesetting policy for Irrigation Water adopted in 1988 and the Secretary’s then590 existing ratesetting policy for M&I Water. Such ratesetting policies shall be amended, modified, or 

591 superseded only through a public notice and comment procedure; (ii) applicable Federal Reclamation 

592 law and associated rules and regulations, or policies; and (iii) other applicable provisions of this 

593 Contract. Payments shall be made by cash transaction, electronic funds transfer, or any other 

594 mechanism as may be agreed to in writing by the Contractor and the Contracting Officer. The Rates, 

595 Charges, and Tiered Pricing Component applicable to the Contractor upon execution of this Contract 

596 are set forth in Exhibit “B,” as may be revised annually. 

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

598 Tiered Pricing Component as follows: 

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

600 Contractor an estimate of the Charges for Project Water that will be applied to the period October 1, of 

601 the current Calendar Year, through September 30, of the following Calendar Year, and the basis for 

602 such estimate. The Contractor shall be allowed not less than two months to review and comment on 

603 such estimates. On or before September 15 of each Calendar Year, the Contracting Officer shall notify 

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

605 Calendar Year, through September 30, of the following Calendar Year, and such notification shall 

606 revise Exhibit “B.” 

607 (2) Prior to October 1 of each Calendar Year, the Contracting Officer shall make 

608 available to the Contractor an estimate of the Rates and Tiered Pricing Component for Project Water 

609 for the following Year and the computations and cost allocations upon which those Rates are based. 
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610 The Contractor shall be allowed not less than two months to review and comment on such 

611 computations and cost allocations. By December 31 of each Calendar Year, the Contracting Officer 

612 shall provide the Contractor with the final Rates and Tiered Pricing Component to be in effect for the 

613 upcoming Year, and such notification shall revise Exhibit “B.” 

614 (c) Except as otherwise provided in the Operations Manual, at the time the 

615 Contractor submits the initial schedule for the delivery of Project Water for each Year pursuant to 

616 subdivision (b) of Article 4 of this Contract, the Contractor shall make an advance payment to the 

617 United States equal to the total amount payable pursuant to the applicable Rate(s) set under subdivision 

618 (a) of this Article, for the Project Water scheduled to be delivered pursuant to this Contract during the 

619 first two calendar months of the Year. Before the end of the first month and before the end of each 

620 calendar month thereafter, the Contractor shall make an advance payment to the United States, at the 

621 Rate(s) set under subdivision (a) of this Article, for the Water Scheduled to be delivered pursuant to 

622 this Contract during the second month immediately following. Adjustments between advance 

623 payments for Water Scheduled and payments at Rates due for Water Delivered shall be made before 

624 the end of the following month; Provided, That any revised schedule submitted by the Contractor 

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

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

627 in effect, to assure that Project Water is not delivered to the Contractor in advance of such payment. In 

628 any month in which the quantity of Water Delivered to the Contractor pursuant to this Contract equals 

629 the quantity of Water Scheduled and paid for by the Contractor, no additional Project Water shall be 

630 delivered to the Contractor unless and until an advance payment at the Rates then in effect for such 

631 additional Project Water is made. Final adjustment between the advance payments for the Water 

632 Scheduled and payments for the quantities of Water Delivered during each Year pursuant to this 

633 Contract shall be made as soon as practicable but no later than April 30th of the following Year, or 
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634 60 days after the delivery of Project Water carried over under subdivision (g) of Article 3 of this 

635 Contract if such water is not delivered by the last day of February. 

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

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

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

639 of delivery; Provided, That the Contractor may be granted an exception from the Tiered Pricing 

640 Component pursuant to subdivision (j)(2) of this Article. The payments shall be consistent with the 

641 quantities of Irrigation Water and M&I Water Delivered as shown in the water delivery report for the 

642 subject month prepared by the Operating Non-Federal Entity/Entities or, if there is no Operating Non643 Federal Entity, by the Contracting Officer. The water delivery report shall be deemed a bill for the 

644 payment of Charges and the applicable Tiered Pricing Component for Water Delivered. Adjustment 

645 for overpayment or underpayment of Charges shall be made through the adjustment of payments due 

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

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

648 (e) The Contractor shall pay for any Water Delivered under subdivision (a), (f), or 

649 (g) of Article 3 of this Contract as determined by the Contracting Officer pursuant to applicable 

650 statutes, associated regulations, any applicable provisions of guidelines or ratesetting policies; 

651 Provided, That the Rate for Water Delivered under subdivision (f) of Article 3 of this Contract shall be 

652 no more than the otherwise applicable Rate for Irrigation Water or M&I Water under subdivision (a) of 

653 this Article. 

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

655 may be paid from any revenues available to the Contractor. 

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

657 delivery of Project Water or the delivery of non-Project water through Project facilities shall be 
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658 allocated and applied in accordance with Federal Reclamation law and the associated rules or 

659 regulations, and the then-current Project ratesetting policies for M&I Water or Irrigation Water. 

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

661 of the financial terms and conditions of its long-term contracts, in accordance with applicable Federal 

662 standards, so as to reflect the application of Project costs and revenues. The Contracting Officer shall, 

663 each Year upon request of the Contractor, provide to the Contractor a detailed accounting of all Project 

664 and Contractor expense allocations, the disposition of all Project and Contractor revenues, and a 

665 summary of all water delivery information. The Contracting Officer and the Contractor shall enter into 

666 good faith negotiations to resolve any discrepancies or disputes relating to accountings, reports, or 

667 information. 

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

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

670 policies, and procedures used for establishing Rates, Charges, and Tiered Pricing Components, and/or 

671 for making and allocating payments, other than those set forth in this Article may be in the mutual best 

672 interest of the parties, it is expressly agreed that the parties may enter into agreements to modify the 

673 mechanisms, policies, and procedures for any of those purposes while this Contract is in effect without 

674 amending this Contract. 

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

676 80 percent of the Contract Total, then before the end of the month following the month of delivery the 

677 Contractor shall make an additional payment to the United States equal to the applicable Tiered Pricing 

678 Component. The Tiered Pricing Component for the amount of Water Delivered in excess of 80 

679 percent of the Contract Total, but less than or equal to 90 percent of the Contract Total, shall equal 

680 one-half of the difference between the Rate established under subdivision (a) of this Article and the 

681 Irrigation Full Cost Water Rate or M&I Full Cost Water Rate, whichever is applicable. The Tiered 
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682 Pricing Component for the amount of Water Delivered which exceeds 90 percent of the Contract Total 

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

684 the Irrigation Full Cost Water Rate or M&I Full Cost Water Rate, whichever is applicable. For all 

685 Water Delivered pursuant to subdivision (a) of Article 3 of this Contract which is in excess of 80 

686 percent of the Contract Total, this increment shall be deemed to be divided between Irrigation Water 

687 and M&I Water in the same proportion as actual deliveries of each bear to the cumulative total Water 

688 Delivered. 

689 (2) Subject to the Contracting Officer’s written approval, the Contractor may 

690 request and receive an exemption from such Tiered Pricing Components for Project Water delivered to 

691 produce a crop which the Contracting Officer determines will provide significant and quantifiable 

692 habitat values for waterfowl in fields where the water is used and the crops are produced; Provided, 

693 That the exemption from the Tiered Pricing Component for Irrigation Water shall apply only if such 

694 habitat values can be assured consistent with the purposes of the CVPIA through binding agreements 

695 executed with or approved by the Contracting Officer prior to use of such water. 

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

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

698 transfers to others but shall not include Project Water transferred to the Contractor, nor shall it include 

699 the additional water provided to the Contractor under the provisions of subdivision (f) of Article 3 of 

700 this Contract. 

701 (k) For the term of this Contract, Rates under the respective ratesetting policies will 

702 be established to recover only reimbursable O&M (including any deficits) and capital costs of the 

703 Project, as those terms are used in the then-current Project ratesetting policies, and interest, where 

704 appropriate, except in instances where a minimum Rate is applicable in accordance with the relevant 

705 Project ratesetting policy. Changes of significance in practices which implement the Contracting 
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706 Officer’s ratesetting policies will not be implemented until the Contracting Officer has provided the 

707 Contractor an opportunity to discuss the nature, need, and impact of the proposed change. 

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

709 Rates for Project Water transferred by the Contractor shall be the Contractor’s Rates adjusted upward 

710 or downward to reflect the changed costs, if any, incurred by the Contracting Officer in the delivery of 

711 the transferred Project Water to the transferee’s point of delivery in accordance with the then712 applicable Project ratesetting policy. If the Contractor is receiving lower Rates and Charges because of 

713 inability to pay and is transferring Project Water to another entity whose Rates and Charges are not 

714 adjusted due to inability to pay, the Rates and Charges for transferred Project Water shall be the 

715 Contractor’s Rates and Charges and will not be adjusted to reflect the Contractor’s inability to pay. 

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

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

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

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

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

721 Contractor does not waive any legal rights or remedies that it may have with respect to such disputed 

722 issues. Notwithstanding the execution of this Contract and payments made hereunder, the Contractor 

723 may challenge in the appropriate administrative or judicial forums: (1) the existence, computation, or 

724 imposition of any deficit charges accruing during the term of the Existing Contract and any preceding 

725 interim renewal contracts, if applicable; (2) interest accruing on any such deficits; (3) the inclusion of 

726 any such deficit charges or interest in the Rates; (4) the application by the United States of payments 

727 made by the Contractor under its Existing Contract and any preceding interim renewal contracts, if 

728 applicable; and (5) the application of such payments in the Rates. The Contracting Officer agrees that 

729 the Contractor shall be entitled to the benefit of any administrative or judicial ruling in favor of any 
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730 Project M&I contractor on any of these issues, and credits for payments heretofore made; Provided, 

731 that the basis for such ruling is applicable to the Contractor. 

732 (o) The Contractor and the Contracting Officer concur that, as of the effective date 

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

734 liability therefor. 

735 RATES AND METHOD OF PAYMENT FOR CONVEYANCE

736 AND OTHER SERVICES BY DWR

737 8. (a) To the extent Project Water is conveyed through State Facilities, payment for 

738 conveyance of water through the State Facilities shall be made by the Contractor directly to DWR. 

739 Exhibit C sets forth the charges and interest rates applicable at the time this long-term renewal contract 

740 is executed. DWR shall invoice the Contractor monthly for all conveyance charges owing for the 

741 previous month. Payment by the Contractor to DWR shall be due 30 days after the date of the invoice. 

742 Any payment not received within 30 days after the date of the invoice shall be considered delinquent. 

743 Delinquent charges shall be calculated in accordance with Exhibit “C” of this Contract; Provided, That 

744 no interest shall be charged to or be paid by the Contractor unless such delinquency continues for more 

745 than 30 days in total. 

746 (b) Omitted. 

747 (c) Conveyance charges for the Contractor shall be determined by DWR on the 

748 same basis it uses to determine conveyance charges for use of SWP facilities by entities that are not 

749 SWP contractors. The method for determining this charge is described in DWR’s annual Bulletin 132. 

750 The charge for conveyance of water under this Contract shall be set forth in Exhibit “C” of this 

751 Contract and revised annually. 

752 (1) In accordance with subdivision (c) of this Article, when DWR provides 

753 conveyance directly from the Delta or from the Federal share of storage at San Luis Reservoir, the unit 
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754 conveyance charge shall equal at a minimum the sum of the following, as determined by DWR: 

755 (i) The equivalent unit transportation capital and Minimum OMP&R Costs for those reaches of the 

756 California Aqueduct utilized for the delivery; (ii) The portion of the Delta Water Rate for Reaches 1, 

757 2A, 2B, and 3 of the California Aqueduct; (iii) The replacement component of the Transportation 

758 Variable OM&R Costs for the Harvey O. Banks Delta Pumping Plant and DWR's share of the Dos 

759 Amigos Pumping Plant; (iv) A charge to offset direct fish losses associated with pumping at the Banks 

760 Pumping Plant, pursuant to the December 30, 1986, agreement between the California Department of 

761 Fish and Game and DWR; and (v) The incremental costs, if any, caused by the conveyance and 

762 delivery of Project Water to the Contractor which, unless included in the increased charges to the 

763 Contractor, would result in increased charges to the SWP Contractors or increased costs to DWR. 

764 (2) When DWR provides conveyance from the State’s share of storage in 

765 San Luis Reservoir, the unit charge shall equal the sum of the following as determined by DWR: 

766 (i) The San Luis Facilities portion of the Delta Water Rate; (ii) The net unit energy cost to replace 

767 water in San Luis Reservoir; and (iii) The sum of all unit charges provided under subdivision (c)(1) of 

768 this Article. 

769 (d) Should DWR deliver Project Water to San Luis Reservoir on behalf of the 

770 Contractor and it is later determined by DWR that capacity to store such Project Water in DWR's share 

771 of San Luis Reservoir is no longer available because of need for such storage to meet SWP operations 

772 and obligations to SWP Contractors and the Contractor cannot take delivery of such Project Water, 

773 DWR shall relieve the Contractor of its obligations to pay DWR for all such Project Water so 

774 transported, stored, and no longer available to the Contractor. DWR shall reimburse the Contractor for 

775 payments which have previously been made to DWR for any such conveyed and stored supply, less the 

776 administrative charge described in subdivision (f) of this Article. 
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777 (e) If the Contractor is unable, fails or refuses to accept delivery of Project Water 

778 made available by DWR in accordance with this Contract, such inability, failure or refusal shall not 

779 relieve the Contractor of its obligation to pay DWR all associated costs. 

780 (f) The Contractor shall pay DWR a monthly administrative charge specified in 

781 Exhibit “C” of this Contract for each month in which DWR conveys Project Water to the Contractor 

782 and for each month in which DWR invoices the Contractor for delinquent charges. 

783 SALES, TRANSFERS, OR EXCHANGES OF WATER

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

785 transferred, or exchanged to others for reasonable and beneficial uses within the State of California if 

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

787 guidelines or regulations then in effect. No sale, transfer, or exchange of Project Water under this 

788 Contract may take place without the prior written approval of the Contracting Officer, except as 

789 provided for in subdivision (b) of this Article, and no such sales, transfers, or exchanges shall be 

790 approved absent all appropriate environmental documentation including but not limited to documents 

791 prepared pursuant to NEPA and ESA. Such environmental documentation should include, as 

792 appropriate, an analysis of groundwater impacts and economic and social effects, including 

793 environmental justice, of the proposed water transfers on both the transferor and transferee. No sale, 

794 transfer or exchange of the right to Project Water under this Contract may take place without the prior 

795 written approval of the Contracting Officer and of DWR, if State Facilities are used to convey such 

796 water. 

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

798 the type historically carried out among Project Contractors located within the same geographical area 

799 and to allow the Contractor to participate in an accelerated water transfer program during the term of 

800 this Contract, the Contracting Officer shall prepare, as appropriate, all necessary environmental 
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801 documentation including, but not limited to, documents prepared pursuant to NEPA and ESA 

802 analyzing annual transfers within such geographical areas and the Contracting Officer shall determine 

803 whether such transfers comply with applicable law. Following the completion of the environmental 

804 documentation, such transfers addressed in such documentation shall be conducted with advance 

805 notice to the Contracting Officer, but shall not require prior written approval by the Contracting 

806 Officer. Such environmental documentation and the Contracting Officer’s compliance determination 

807 shall be reviewed every five years and updated, as necessary, prior to the expiration of the then808 existing five-year period. All subsequent environmental documentation shall include an alternative to 

809 evaluate not less than the quantity of Project Water historically transferred within the same 

810 geographical area. 

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

812 transfer must: (i) be for irrigation purposes for lands irrigated within the previous three years, for M&I 

813 use, groundwater recharge, groundwater banking, similar groundwater activities, surface water storage, 

814 or fish and wildlife resources; not lead to land conversion; and be delivered to established cropland, 

815 wildlife refuges, groundwater basins or M&I use; (ii) occur within a single Year; (iii) occur between a 

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

817 construction or modifications to facilities and be between existing Project Contractors and/or the 

818 Contractor and the United States, Department of the Interior; and (v) comply with all applicable 

819 Federal, State, and local or tribal laws and requirements imposed for protection of the environment and 

820 Indian Trust Assets, as defined under Federal law. 

821 APPLICATION OF PAYMENTS AND ADJUSTMENTS

822 10. (a) The amount of any overpayment by the Contractor of the Contractor’s O&M, 

823 capital, and deficit (if any) obligations for the Year shall be applied first to any current liabilities of the 

824 Contractor arising out of this Contract then due and payable. Overpayments of more than $1,000 shall 
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825 be refunded at the Contractor’s request. In lieu of a refund, any amount of such overpayment at the 

826 option of the Contractor may be credited against amounts to become due to the United States or DWR 

827 by the Contractor. With respect to overpayment, such refund or adjustment shall constitute the sole 

828 remedy of the Contractor or anyone having or claiming to have the right to the use of any of the Project 

829 Water supply provided for herein. All credits and refunds of overpayments shall be made within 30 

830 days of the Contracting Officer obtaining direction as to how to credit or refund such overpayment in 

831 response to the notice to the Contractor that it has finalized the accounts for the Year in which the 

832 overpayment was made. 

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

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

835 work has been completed. If the advances exceed the actual costs incurred, the difference will be 

836 refunded to the Contractor. If the actual costs exceed the Contractor's advances, the Contractor will be 

837 billed for the additional costs pursuant to Article 25. 

838 (c) In the event that the Contractor contests the accuracy of any statement submitted 

839 to it by DWR pursuant to this Contract it shall give DWR notice thereof at least ten days prior to the 

840 day upon which payment of the stated amount is due. To the extent that DWR finds that the 

841 Contractor's contentions regarding the statement are correct, it shall revise the statement accordingly, 

842 and the Contractor shall make payment of the revised amounts on or before the due date. To the extent 

843 that DWR does not find the Contractor's contentions to be correct, or where time is not available for 

844 review of such contentions for correctness prior to due date, the Contractor shall make payment of the 

845 stated amounts on or before the due date, but may make the contested part of such payment under 

846 protest and seek an adjustment as described in subdivision (c) of this Article. 

847 (d) If in any year, by reason of errors in computation or other causes, there is an 

848 overpayment or underpayment to DWR by the Contractor of its charges provided for herein, the 
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849 amount of such overpayment or underpayment shall be credited or debited, as the case may be, to the 

850 Contractor's account for the next succeeding Year and DWR shall notify the Contractor thereof in 

851 writing. 

852 TEMPORARY REDUCTIONS–RETURN FLOWS

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

854 Facilities and the requirements of Federal law; (ii) the authorized purposes and priorities of the State 

855 Facilities and State laws and policies governing the SWP; (iii) the obligations of the United States and 

856 DWR under existing contracts, or renewals thereof, providing for water deliveries from the Project and 

857 State Facilities; and (iv) the terms and conditions of this Contract; the Contracting Officer and DWR 

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

859 this Contract. 

860 (b) The Contracting Officer, DWR, or Operating Non-Federal Entity/Entities may 

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

862 for the purposes of investigation, inspection, maintenance, repair, or replacement of any of the Project 

863 or State Facilities or any part thereof necessary for the delivery of Project Water to the Contractor, but 

864 so far as feasible the Contracting Officer, DWR, or Operating Non-Federal Entity/Entities will give the 

865 Contractor due notice in advance of such temporary discontinuance or reduction, except in case of 

866 emergency, in which case no notice need be given; Provided, That the United States and DWR shall 

867 use its best efforts to avoid any discontinuance or reduction in such service. Upon resumption of 

868 service after such reduction or discontinuance, and if requested by the Contractor, the United States 

869 and DWR will, if possible, deliver the quantity of Project Water which would have been delivered 

870 hereunder in the absence of such discontinuance or reduction. 

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

872 from Water Delivered to the Contractor hereunder which escapes or is discharged beyond the 
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873 Contractor's Service Area; Provided, That this shall not be construed as claiming for the United States 

874 any right to seepage or return flow being put to reasonable and beneficial use pursuant to this Contract 

875 within the Contractor’s Service Area by the Contractor or those claiming by, through, or under the 

876 Contractor. 

877 CONSTRAINTS ON THE AVAILABILITY OF WATER

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

879 means to guard against a Condition of Shortage in the quantity of water to be made available to the 

880 Contractor pursuant to this Contract. In the event the Contracting Officer determines that a Condition 

881 of Shortage appears probable, the Contracting Officer will notify the Contractor of said determination 

882 as soon as practicable. 

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

884 Project, drought, other physical causes beyond the control of the Contracting Officer or actions taken 

885 by the Contracting Officer to meet legal obligations then, except as provided in subdivision (a) of 

886 Article 18 of this Contract, no liability shall accrue against the United States or any of its officers, 

887 agents, or employees for any damage, direct or indirect, arising therefrom. 

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

889 specified in subdivision (b) of this Article, the Contracting Officer shall apportion the available Project 

890 Water supply among the Contractors and others entitles, under existing contracts and future contracts 

891 (to the extent such future contracts are permitted under subsections (a) and (b) of Section 3404 of the 

892 CVPIA) and renewals thereof, to receive Project Water consistent with the contractual obligations of 

893 the United States. 

894 (d) DWR shall make all reasonable efforts consistent with sound fiscal policies, and 

895 proper operating procedures to maintain the necessary facilities and to deliver Project Water to the 

896 Contractor in accordance with the provisions of this Contract in such a manner and at such times as 
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897 such Project Water is scheduled by the Contractor; Provided, That such Project Water has been 

898 furnished to DWR by the Contracting Officer; and, Provided, further, That in no event shall any 

899 liability accrue against DWR or any of its officers, agents or employees for damage, direct or indirect 

900 for failure to deliver Project Water to the Contractor on account of errors in operation, drought, or any 

901 other cause beyond the control of DWR. Inasmuch as DWR is providing only conveyance and storage 

902 services under this Contract, it bears no responsibility for the availability of Project Water for such 

903 conveyance. 

904 (e) If any of the parties to this Contract are precluded in whole or in part from 

905 delivering, conveying or receiving Project Water as a result of uncontrollable forces, all parties shall be 

906 relieved from the obligation to the extent they are reasonably unable to complete the obligation due to 

907 the uncontrollable force. Uncontrollable force shall include, but is not limited to, earthquakes, fires, 

908 tornados, floods and other natural disasters. Each party shall be responsible for payment of any costs 

909 incurred on its behalf by the other party(ies) before the occurrence of the uncontrollable force. 

910 UNAVOIDABLE GROUNDWATER PERCOLATION

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

912 Water to Excess Lands or Ineligible Lands within the meaning of this Contract if such lands are 

913 irrigated with groundwater that reaches the underground strata as an unavoidable result of the delivery 

914 of Irrigation Water by the Contractor to Eligible Lands. 

915 RULES AND REGULATIONS

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

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

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

919 rules and regulations promulgated by the Secretary of the Interior under Federal Reclamation law. 

920 WATER AND AIR POLLUTION CONTROL

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

922 water and air pollution laws and regulations of the United States and the State of California, 
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923 and shall obtain all required permits or licenses from the appropriate Federal, State, or local 

924 authorities. 

925 QUALITY OF WATER

926 16. (a) Project and State Facilities used to deliver Project Water to the Contractor 

927 pursuant to this Contract shall be operated and maintained to enable the United States and DWR to 

928 deliver Project Water to the Contractor in accordance with the water quality standards specified in 

929 subsection 2(b) of the Act of August 26, 1937 (50 Stat. 850), as added by Section 101 of the Act of 

930 October 27, 1986 (100 Stat. 3050) or other existing Federal laws. The United States and DWR are 

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

932 quality of Water Delivered to the Contractor pursuant to this Contract. The United States and DWR do 

933 not warrant the quality of Water Delivered to the Contractor pursuant to this Contract. 

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

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

936 level reasonably attainable as determined by the Contracting Officer. The Contractor shall be 

937 responsible for compliance with all State and Federal water quality standards applicable to surface and 

938 subsurface agricultural drainage discharges generated through the use of Federal or Contractor 

939 facilities or Project Water provided by the Contractor within the Contractor's Service Area. 

940 WATER ACQUIRED BY THE CONTRACTOR

941 OTHER THAN FROM THE UNITED STATES

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

943 than from the United States and Irrigation Water furnished pursuant to the terms of this Contract may 

944 be simultaneously transported through the same distribution facilities of the Contractor subject to the 

945 following: (i) if the facilities utilized for commingling Irrigation Water and non-Project water were 

946 constructed without funds made available pursuant to Federal Reclamation law, the provisions of 

947 Federal Reclamation law will be applicable only to the Landholders of lands which receive Irrigation 
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948 Water; (ii) the eligibility of land to receive Irrigation Water must be established through the 

949 certification requirements as specified in the Acreage Limitation Rules and Regulations (43 CFR Part 

950 426); (iii) the water requirements of Eligible Lands within the Contractor's Service Area can be 

951 established and the quantity of Irrigation Water to be utilized is less than or equal to the quantity 

952 necessary to irrigate such Eligible Lands; and (iv) if the facilities utilized for commingling Irrigation 

953 Water and non-Project water are/were constructed with funds made available pursuant to Federal 

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

955 Reclamation law, unless the Contractor pays to the United States the incremental fee described in 

956 43 CFR 426.15. In determining the incremental fee, the Contracting Officer will calculate annually the 

957 cost to the Federal Government, including interest of storing or delivering non-Project water, which for 

958 purposes of this Contract shall be determined as follows: The quotient shall be the unpaid distribution 

959 system costs divided by the total irrigable acreage within the Contractor’s Service Area. The 

960 incremental fee per acre is the mathematical result of such quotient times the interest rate determined 

961 using Section 202 (3) of the Act of October 12, 1982 (96 Stat. 1263). Such incremental fee will be 

962 charged to each acre of excess or full cost land within the Contractor’s Service Area that receives 

963 non-Project water through Federally financed or constructed facilities. The incremental fee calculation 

964 methodology will continue during the term of this Contract absent promulgation of a contrary 

965 Reclamation-wide rule, regulation, or policy adopted after the Contractor has been afforded the 

966 opportunity to review and comment on the proposed rule, regulation, or policy. If such rule, 

967 regulation, or policy is adopted it shall supersede this provision. The Contractor and the Contracting 

968 Officer concur that, as of the effective date of this Contract, the Contractor has a distribution system 

969 that was constructed without the use of Federally financed funds. The use of this distribution system is 

970 not subject to the provision of this subdivision of this Article. A separate written agreement with 

971 DWR must be obtained by the Contractor prior to conveyance of such water in State Facilities. 
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972 (b) Omitted. 

973 OPINIONS AND DETERMINATIONS

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

975 opinion or determination of any party to this Contract, said terms shall not be construed as permitting 

976 such action to be predicated upon arbitrary, capricious, or unreasonable opinions or determinations. 

977 The parties, notwithstanding any other provisions of this Contract, expressly reserve the right to seek 

978 relief from and appropriate adjustment for any such arbitrary, capricious, or unreasonable opinion or 

979 determination. Each opinion or determination by any party shall be provided in a timely manner. 

980 Nothing in subdivision (a) of Article 18 of this Contract is intended to or shall affect or alter the 

981 standard of judicial review applicable under Federal law to any opinion or determination implementing 

982 a specific provision of Federal law embodied in statute or regulation. 

983 (b) The Contracting Officer and DWR shall have the right to make determinations 

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

985 of the United States and of the State of California, and the rules and regulations promulgated by the 

986 Secretary of the Interior and DWR. Such determinations shall be made in consultation with the 

987 Contractor to the extent reasonably practicable. 

988 COORDINATION AND COOPERATION

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

990 the Contractor shall communicate, coordinate, and cooperate with each other, and with other affected 

991 Project Contractors, in order to improve the operation and management of the Project. The 

992 communication, coordination, and cooperation regarding operations and management shall include, but 

993 not be limited to, any action which will or may materially affect the quantity or quality of Project 

994 Water supply, the allocation of Project Water supply, and Project financial matters including, but not 

995 limited to, budget issues. The communication, coordination, and cooperation provided for hereunder 
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996 shall extend to all provisions of this Contract. Each party shall retain exclusive decision making 

997 authority for all actions, opinions, and determinations to be made by the respective party. 

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

999 other affected Project Contractors, and the Contracting Officer shall arrange to meet with interested 

1000 Project Contractors to develop a mutually agreeable, written Project-wide process, which may be 

1001 amended as necessary separate and apart from this Contract. The goal of this process shall be to 

1002 provide, to the extent practicable, the means of mutual communication and interaction regarding 

1003 significant decisions concerning Project operation and management on a real-time basis. 

1004 (c) In light of the factors referred to in subdivision (b) of Article 3 of this Contract, 

1005 it is the intent of the Secretary to improve water supply reliability. To carry out this intent: 

1006 (1) The Contracting Officer will, at the request of the Contractor, assist in 

1007 the development of integrated resource management plans for the Contractor. Further, the Contracting 

1008 Officer will, as appropriate, seek authorizations for implementation of partnerships to improve water 

1009 supply, water quality, and reliability. 

1010 (2) The Secretary will, as appropriate, pursue program and project 

1011 implementation and authorization in coordination with Project Contractors to improve the water 

1012 supply, water quality, and reliability of the Project for all Project purposes. 

1013 (3) The Secretary will coordinate with Project Contractors and the State of 

1014 California to seek improved water resource management. 

1015 (4) The Secretary will coordinate actions of agencies within the Department 

1016 of the Interior that may impact the availability of water for Project purposes. 

1017 (5) The Contracting Officer shall periodically, but not less than annually, 

1018 hold division level meetings to discuss Project operations, division level water management activities, 

1019 and other issues as appropriate. 
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1020 (d) Without limiting the contractual obligations of the Contracting Officer under the 

1021 other Articles of this Contract, nothing in this Article shall be construed to limit or constrain the 

1022 Contracting Officer’s ability to communicate, coordinate, and cooperate with the Contractor or other 

1023 interested stakeholders or to make decisions in a timely fashion as needed to protect health, safety, or 

1024 the physical integrity of structures or facilities. 

1025 CHARGES FOR DELINQUENT PAYMENTS

1026 20. (a) The Contractor shall be subject to interest, administrative and penalty charges on 

1027 delinquent installments or payments. When a payment is not received by the due date, the Contractor 

1028 shall pay an interest charge for each day the payment is delinquent beyond the due date. When a 

1029 payment becomes sixty (60) days delinquent, the Contractor shall pay an administrative charge to 

1030 cover additional costs of billing and processing the delinquent payment. When a payment is 

1031 delinquent ninety (90) days or more, the Contractor shall pay an additional penalty charge of six (6%) 

1032 percent per year for each day the payment is delinquent beyond the due date. Further, the Contractor 

1033 shall pay any fees incurred for debt collection services associated with a delinquent payment. 

1034 (b) The interest charge rate shall be the greater of the rate prescribed quarterly in the 

1035 Federal Register by the Department of the Treasury for application to overdue payments, or the interest 

1036 rate of one-half of one (0.5%) percent per month prescribed by Section 6 of the Reclamation Project 

1037 Act of 1939 (Public Law 76-260). The interest charge rate shall be determined as of the due date and 

1038 remain fixed for the duration of the delinquent period. 

1039 (c) When a partial payment on a delinquent account is received, the amount 

1040 received shall be applied, first to the penalty, second to the administrative charges, third to the accrued 

1041 interest, and finally to the overdue payment. 

1042 EQUAL OPPORTUNITY

1043 21. During the performance of this Contract, the Contractor agrees as follows: 

1044 (a) The Contractor will not discriminate against any employee or applicant for 

1045 employment because of race, color, religion, sex, or national origin. The Contractor will take 

1046 affirmative action to ensure that applicants are employed, and that employees are treated during 

1047 employment, without regard to their race, color, religion, sex, or national origin. Such action shall 

1048 include, but not be limited to, the following: Employment, upgrading, demotion, or transfer; 

1049 recruitment or recruitment advertising; layoff or termination, rates of payment or other forms of 

1050 compensation; and selection for training, including apprenticeship. The Contractor agrees to post in 

1051 conspicuous places, available to employees and applicants for employment, notices to be provided by 

1052 the Contracting Officer setting forth the provisions of this nondiscrimination clause. 
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1053 (b) The Contractor will, in all solicitations or advertisements for employees placed 

1054 by or on behalf of the Contractor, state that all qualified applicants will receive consideration for 

1055 employment without discrimination because of race, color, religion, sex, or national origin. 

1056 (c) The Contractor will send to each labor union or representative of workers with 

1057 which it has a collective bargaining agreement or other contract or understanding, a notice, to be 

1058 provided by the Contracting Officer, advising the said labor union or workers' representative of the 

1059 Contractor's commitments under Section 202 of Executive Order 11246 of September 24, 1965, and 

1060 shall post copies of the notice in conspicuous places available to employees and applicants for 

1061 employment. 

1062 (d) The Contractor will comply with all provisions of Executive Order 

1063 No. 11246 of September 24, 1965, as amended, and of the rules, regulations, and relevant orders of the 

1064 Secretary of Labor. 

1065 (e) The Contractor will furnish all information and reports required by said 

1066 amended Executive Order and by the rules, regulations, and orders of the Secretary of Labor, or 

1067 pursuant thereto, and will permit access to its books, records, and accounts by the Contracting Officer 

1068 and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, 

1069 regulations, and orders. 

1070 (f) In the event of the Contractor's noncompliance with the nondiscrimination 

1071 clauses of this Contract or with any of the said rules, regulations, or orders, this Contract may be 

1072 canceled, terminated, or suspended, in whole or in part, and the Contractor may be declared ineligible 

1073 for further Government contracts in accordance with procedures authorized in said amended Executive 

1074 Order, and such other sanctions may be imposed and remedies invoked as provided in said Executive 

1075 Order, or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided by law. 

1076 (g) The Contractor will include the provisions of paragraphs (a) through (g) in every 

1077 subcontract or purchase order unless exempted by the rules, regulations, or orders of the Secretary of 

1078 Labor issued pursuant to Section 204 of said amended Executive Order, so that such provisions will be 

1079 binding upon each subcontractor or vendor. The Contractor will take such action with respect to any 

1080 subcontract or purchase order as may be directed by the Secretary of Labor as a means of enforcing 

1081 such provisions, including sanctions for noncompliance: Provided, however, That in the event the 

1082 Contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a 

1083 result of such direction, the Contractor may request the United States to enter into such litigation to 

1084 protect the interests of the United States. 

1085 GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT

1086 22. (a) The obligation of the Contractor to pay the United States and DWR as provided 

1087 in this Contract is a general obligation of the Contractor notwithstanding the manner in which the 

1088 obligation may be distributed among the Contractor's water users and notwithstanding the default of 

1089 individual water users in their obligations to the Contractor. 
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46

1090 (b) The payment of charges becoming due hereunder is a condition precedent to 

1091 receiving benefits under this Contract. The United States and DWR shall not make water or 

1092 conveyance facilities available to the Contractor through Project or State Facilities during any period in 

1093 which the Contractor may be in arrears in the advance payment of water rates due the United States. 

1094 The Contractor shall not furnish water made available pursuant to this Contract for lands or parties 

1095 which are in arrears in the advance payment of water rates levied or established by the Contractor. 

1096 (c) With respect to subdivision (b) of this Article, the Contractor shall have no 

1097 obligation to require advance payment for water rates which it levies. Subdivision (b) of this Article 

1098 applies to periods when the Contractor is in arrears on payment of charges to DWR. 

1099 (d) If in any year the Contractor fails or is unable to raise sufficient funds by other 

1100 means, the governing body of the Contractor shall levy upon all property within the Contractor's 

1101 boundary not exempt from taxation, a special assessment sufficient to provide for all payments due the 

1102 United States and DWR under this Contract. 

1103 (e) Assessments levied by the governing body of the Contractor pursuant to 

1104 subdivision (b) of this Article shall be enforced and collected by all officers of the Contractor charged 

1105 with the duty of enforcing and collecting assessments levied by the Contractor. 

1106 (f) All money collected by way of special assessments under this Article for 

1107 payments due DWR shall be kept in a separate fund by the treasurer or other officer of the Contractor 

1108 charged with the safekeeping and disbursement of funds of the Contractor, and, upon the written 

1109 demand of DWR, the treasurer or other officer shall pay over to DWR all money in his possession or 

1110 control then due DWR under this contract, which money shall be applied by DWR to the satisfaction 

1111 of the amount due under this Contract. 

1112 (g) In the event of failure, neglect, or refusal of any officer of the Contractor to levy 

1113 any assessment necessary to provide payment by the Contractor under this Contract, to enforce or to 
Contract No. 14-06-200-8466A-LTR1 

47

1114 collect the assessment, or to pay over to the United States or DWR any money then due collected on 

1115 the assessment, either or both DWR and the United States may take such action in a court of competent 

1116 jurisdiction as they deem necessary to compel the performance in their proper sequence of all such 

1117 duties. Action taken pursuant hereto shall not deprive DWR or United States or limit any remedy 

1118 provided by this Contract or by law for the recovery of money due or which may become due under 

1119 this Contract. 

1120 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

1121 23. (a) The Contractor shall comply with Title VI of the Civil Rights Act of 1964 

1122 (42 U.S.C. 2000d), Section 504 of the Rehabilitation Act of 1975 (P.L. 93-112, as amended), the Age 

1123 Discrimination Act of 1975 (42 U.S.C. 6101, et seq.) and any other applicable civil rights laws, as well 

1124 as with their respective implementing regulations and guidelines imposed by the U.S. Department of 

1125 the Interior and/or Bureau of Reclamation. 

1126 (b) These statutes require that no person in the United States shall, on the grounds 

1127 of race, color, national origin, handicap, or age, be excluded from participation in, be denied the 

1128 benefits of, or be otherwise subjected to discrimination under any program or activity receiving 

1129 financial assistance from the Bureau of Reclamation. By executing this Contract, the Contractor 

1130 agrees to immediately take any measures necessary to implement this obligation, including permitting 

1131 officials of the United States to inspect premises, programs, and documents. 

1132 (c) The Contractor makes this agreement in consideration of and for the purpose of 

1133 obtaining any and all Federal grants, loans, contracts, property discounts, or other Federal financial 

1134 assistance extended after the date hereof to the Contractor by the Bureau of Reclamation, including 

1135 installment payments after such date on account of arrangements for Federal financial assistance which 

1136 were approved before such date. The Contractor recognizes and agrees that such Federal assistance 

1137 will be extended in reliance on the representations and agreements made in this Article, and that the 

1138 United States reserves the right to seek judicial enforcement thereof. 

1139 PRIVACY ACT COMPLIANCE

1140 24. (a) The Contractor shall comply with the Privacy Act of 1974 (5 U.S.C. 552a) 

1141 (the Act) and the Department of the Interior rules and regulations under the Act (43 CFR 2.45 et seq.) 

1142 in maintaining Landholder acreage certification and reporting records, required to be submitted to the 

1143 Contractor for compliance with Sections 206 and 228 of the Reclamation Reform Act of 1982 (96 Stat. 

1144 1266), and pursuant to 43 CFR 426.18. 

1145 (b) With respect to the application and administration of the criminal penalty 

1146 provisions of the Act (5 U.S.C. 552a(i)), the Contractor and the Contractor's employees responsible for 

1147 maintaining the certification and reporting records referenced in (a) above are considered to be 

1148 employees of the Department of the Interior. See 5 U.S.C. 552a(m). 
Contract No. 14-06-200-8466A-LTR1 

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1149 (c) The Contracting Officer or a designated representative shall provide the 

1150 Contractor with current copies of the Interior Department Privacy Act regulations and the Bureau of 

1151 Reclamation Federal Register Privacy Act System of Records Notice (Acreage Limitation--Interior, 

1152 Reclamation-31) which govern the maintenance, safeguarding, and disclosure of information contained 

1153 in the Landholder's certification and reporting records. 

1154 (d) The Contracting Officer shall designate a full-time employee of the Bureau of 

1155 Reclamation to be the System Manager who shall be responsible for making decisions on denials 

1156 pursuant to 43 CFR 2.61 and 2.64 amendment requests pursuant to 43 CFR 2.72. The Contractor is 

1157 authorized to grant requests by individuals for access to their own records. 

1158 (e) The Contractor shall forward promptly to the System Manager each proposed 

1159 denial of access under 43 CFR 2.64; and each request for amendment of records filed under 43 CFR 

1160 2.71; notify the requester accordingly of such referral; and provide the System Manager with 

1161 information and records necessary to prepare an appropriate response to the requester. These 

1162 requirements do not apply to individuals seeking access to their own certification and reporting forms 

1163 filed with the Contractor pursuant to 43 CFR 426.18, unless the requester elects to cite the Privacy Act 

1164 as a basis for the request. 

1165 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

1166 25. In addition to all other payments to be made by the Contractor pursuant to this Contract, 

1167 the Contractor shall pay to the United States, within 60 days after receipt of a bill and detailed 

1168 statement submitted by the Contracting Officer to the Contractor for such specific items of direct cost 

1169 incurred by the United States for work requested by the Contractor associated with this Contract plus 

1170 indirect costs in accordance with applicable Bureau of Reclamation policies and procedures. All such 

1171 amounts referred to in this Article shall not exceed the amount agreed to in writing in advance by the 

1172 Contractor. This Article shall not apply to costs for routine contract administration. 

1173 WATER CONSERVATION

1174 26. (a) Prior to the delivery of water provided from or conveyed through Federally 

1175 constructed or Federally financed facilities pursuant to this Contract, the Contractor shall be 

1176 implementing an effective water conservation and efficiency program based on the Contractor's water 

1177 conservation plan that has been determined by the Contracting Officer to meet the conservation and 

1178 efficiency criteria for evaluating water conservation plans established under Federal law. The water 
Contract No. 14-06-200-8466A-LTR1 

49

1179 conservation and efficiency program shall contain definite water conservation objectives, appropriate 

1180 economically feasible water conservation measures, and time schedules for meeting those objectives. 

1181 Continued Project Water delivery pursuant to this Contract shall be contingent upon the Contractor’s 

1182 continued implementation of such water conservation program. In the event the Contractor's water 

1183 conservation plan or any revised water conservation plan completed pursuant to subdivision (d) of 

1184 Article 26 of this Contract have not yet been determined by the Contracting Officer to meet such 

1185 criteria, due to circumstances which the Contracting Officer determines are beyond the control of the 

1186 Contractor, water deliveries shall be made under this Contract so long as the Contractor diligently 

1187 works with the Contracting Officer to obtain such determination at the earliest practicable date, and 

1188 thereafter the Contractor immediately begins implementing its water conservation and efficiency 

1189 program in accordance with the time schedules therein. 

1190 (b) Should the amount of M&I Water delivered pursuant to subdivision (a) of 

1191 Article 3 of this Contract equal or exceed 2,000 acre-feet per Year, the Contractor shall implement the 

1192 Best Management Practices identified by the time frames issued by the California Urban Water 

1193 Conservation Council for such M&I Water unless any such practice is determined by the Contracting 

1194 Officer to be inappropriate for the Contractor. 

1195 (c) The Contractor shall submit to the Contracting Officer a report on the status of 

1196 its implementation of the water conservation plan on the reporting dates specified in the then existing 

1197 conservation and efficiency criteria established under Federal law. 

1198 (d) At five-year intervals, the Contractor shall revise its water conservation plan to 

1199 reflect the then-current conservation and efficiency criteria for evaluating water conservation plans 

1200 established under Federal law and submit such revised water management plan to the Contracting 

1201 Officer for review and evaluation. The Contracting Officer will then determine if the water 
Contract No. 14-06-200-8466A-LTR1 

50

1202 conservation plan meets Reclamation’s then-current conservation and efficiency criteria for evaluating 

1203 water conservation plans established under Federal law. 

1204 (e) If the Contractor is engaged in direct groundwater recharge, such activity shall 

1205 be described in the Contractor’s water conservation plan. 

1206 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

1207 27. Except as specifically provided in Article 17 of this Contract, the provisions of this 

1208 Contract shall not be applicable to or affect non-Project water or water rights now owned or hereafter 

1209 acquired by the Contractor or any user of such water within the Contractor's Service Area. Any such 

1210 water shall not be considered Project Water under this Contract. In addition, this Contract shall not be 

1211 construed as limiting or curtailing any rights which the Contractor or any water user within the 

1212 Contractor's Service Area acquires or has available under any other contract pursuant to Federal 

1213 Reclamation law. 

1214 OPERATION AND MAINTENANCE BY OPERATING NON-FEDERAL ENTITY

1215 28. (a) The O&M of a portion of the Project facilities which serve the 

1216 Contractor, and responsibility for funding a portion of the costs of such O&M, have been transferred to 

1217 two Operating Non-Federal Entities by separate agreements between the United States and the 

1218 Operating Non-Federal Entities. Those separate agreements shall not interfere with or affect the rights 

1219 or obligations of the Contractor or the United States hereunder. Specifically, portions of the Delta1220 Mendota Canal, the San Luis Canal and other related facilities are operated by the San Luis & Delta1221 Mendota Water Authority and the Friant-Kern Canal and related facilities are operated by the Friant 

1222 Water Authority. 

1223 (b) The Contractor shall pay directly to the applicable Operating 

1224 Non-Federal Entity, or to any successor approved by the Contracting Officer under the terms and 

1225 conditions of the separate agreements between the United States and the Operating Non-Federal 
Contract No. 14-06-200-8466A-LTR1 

51

1226 Entities described in subdivision (a) of this Article, all rates, charges, or assessments of any kind, 

1227 including any assessment for reserve funds, which the Operating Non-Federal Entity or such successor 

1228 determines, sets, or establishes for the O&M of the portion of the Project facilities operated and 

1229 maintained by the Operating Non-Federal Entity or such successor. Such direct payments to the 

1230 Operating Non-Federal Entity or such successor shall not relieve the Contractor of its obligation to pay 

1231 directly to the United States the Contractor’s share of the Project Rates, Charges, and Tiered Pricing 

1232 Component(s) except to the extent the Operating Non-Federal Entity collects payments on behalf of 

1233 the United States in accordance with the separate agreement identified in subdivision (a) of this 

1234 Article. 

1235 (c) For so long as the O&M of any portion of the Project facilities serving the 

1236 Contractor is performed by the Operating Non-Federal Entities, or any successors thereto, the 

1237 Contracting Officer shall adjust those components of the Rates for Water Delivered under this Contract 

1238 representing the cost associated with the activity being performed by the Operating Non-Federal 

1239 Entities or their successors. 

1240 (d) In the event the O&M of the Project facilities operated and maintained by the 

1241 Operating Non-Federal Entity/Entities is re-assumed by the United States during the term of this 

1242 Contract, the Contracting Officer shall so notify the Contractor, in writing, and present to the 

1243 Contractor a revised Exhibit “B” which shall include the portion of the Rates to be paid by the 

1244 Contractor for Project Water under this Contract representing the O&M costs of the portion of such 

1245 Project facilities which have been re-assumed. The Contractor shall, thereafter, in the absence of 

1246 written notification from the Contracting Officer to the contrary, pay the Rates, Charges, and Tiered 

1247 Pricing Component specified in the revised Exhibit “B” directly to the United States in compliance 

1248 with Article 7 of this Contract. 
Contract No. 14-06-200-8466A-LTR1 

52

1249 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

1250 29. The expenditure or advance of any money or the performance of any obligation 

1251 of the United States under this Contract shall be contingent upon appropriation or allotment of funds. 

1252 Absence of appropriation or allotment of funds shall not relieve the Contractor from any obligations 

1253 under this Contract. No liability shall accrue to the United States in case funds are not appropriated or 

1254 allotted. 

1255 BOOKS, RECORDS, AND REPORTS

1256 30. (a) The Contractor shall establish and maintain accounts and other books and 

1257 records pertaining to administration of the terms and conditions of this Contract, including: the 

1258 Contractor's financial transactions, water supply data, and Project land and right-of-way agreements; 

1259 the water users' land-use (crop census), land ownership, land-leasing and water use data; and other 

1260 matters that the Contracting Officer may require. Reports thereon shall be furnished to the Contracting 

1261 Officer in such form and on such date or dates as the Contracting Officer may require. Subject to 

1262 applicable Federal laws and regulations, each party to this Contract shall have the right during office 

1263 hours to examine and make copies of the other party's books and records relating to matters covered by 

1264 this Contract. 

1265 (b) Notwithstanding the provisions of subdivision (a) of this Article, no books, 

1266 records, or other information shall be requested from the Contractor by the Contracting Officer unless 

1267 such books, records, or information are reasonably related to the administration or performance of this 

1268 Contract. Any such request shall allow the Contractor a reasonable period of time within which to 

1269 provide the requested books, records, or information. 

1270 (c) At such time as the Contractor provides information to the Contracting Officer 

1271 pursuant to subdivision (a) of this Article, a copy of such information shall be provided to the 

1272 Operating Non-Federal Entity/Entities. 

1273 ASSIGNMENT LIMITED--SUCCESSORS AND ASSIGNS OBLIGATED

1274 31. (a) The provisions of this Contract shall apply to and bind the successors and 

1275 assigns of the parties hereto, but no assignment or transfer of this Contract or any right or interest 

1276 therein shall be valid until approved in writing by the Contracting Officer. 

1277 (b) The assignment of any right or interest in this Contract by a party shall not 

1278 interfere with the rights or obligations of the other parties to this Contract absent the written 

1279 concurrence of said other parties. 
Contract No. 14-06-200-8466A-LTR1 

53

1280 (c) The Contracting Officer shall not unreasonably condition or withhold approval 

1281 of any proposed assignment. 

1282 (d) No assignment or transfer of any rights to use State Facilities authorized by this 

1283 Contract shall be valid without advance written approval by DWR. 

1284 SEVERABILITY

1285 32. In the event that a person or entity who is neither (i) a party to a Project contract, nor (ii) 

1286 a person or entity that receives Project Water from a party to a Project contract, nor (iii) an association 

1287 or other form of organization whose primary function is to represent parties to Project contracts, brings 

1288 an action in a court of competent jurisdiction challenging the legality or enforceability of a provision 

1289 included in this Contract and said person, entity, association, or organization obtains a final court 

1290 decision holding that such provision is legally invalid or unenforceable and the Contractor has not 

1291 intervened in that lawsuit in support of the plaintiff(s), the parties to this Contract shall use their best 

1292 efforts to (i) within 30 days of the date of such final court decision identify by mutual agreement the 

1293 provisions in this Contract which must be revised and (ii) within three months thereafter promptly 

1294 agree on the appropriate revision(s). The time periods specified above may be extended by mutual 

1295 agreement of the parties. Pending the completion of the actions designated above, to the extent it can 

1296 do so without violating any applicable provisions of law, the United States shall continue to make the 

1297 quantities of Project Water specified in this Contract available to the Contractor pursuant to the 

1298 provisions of this Contract which were not found to be legally invalid or unenforceable in the final 

1299 court decision. 

1300 RESOLUTION OF DISPUTES

1301 33. Should any dispute arise concerning any provisions of this Contract, or the parties’ 

1302 rights and obligations thereunder, the parties shall meet and confer in an attempt to resolve the dispute. 

1303 Prior to the Contractor commencing any legal action, or the Contracting Officer referring any matter to 
Contract No. 14-06-200-8466A-LTR1 

54

1304 Department of Justice, the party shall provide to the other party 30 days’ written notice of the intent to 

1305 take such action; Provided, That such notice shall not be required where a delay in commencing an 

1306 action would prejudice the interests of the party that intends to file suit. During the 30-day notice 

1307 period, the Contractor and the Contracting Officer shall meet and confer in an attempt to resolve the 

1308 dispute. Except as specifically provided, nothing herein is intended to waive or abridge any right or 

1309 remedy that the Contractor or the United States may have. 

1310 OFFICIALS NOT TO BENEFIT

1311 34. No Member of or Delegate to Congress, Resident Commissioner, or official of the 

1312 Contractor shall benefit from this Contract other than as a water user or landowner in the same manner 

1313 as other water users or landowners. 

1314 CHANGES IN CONTRACTOR’S SERVICE AREA

1315 35. (a) While this Contract is in effect, no change may be made in the Contractor's 

1316 Service Area, by inclusion or exclusion of lands, dissolution, consolidation, merger, or otherwise, 

1317 except upon the Contracting Officer's written consent. 

1318 (b) Within 30 days of receipt of a request for such a change, the Contracting Officer 

1319 will notify the Contractor of any additional information required by the Contracting Officer for 

1320 processing said request, and both parties will meet to establish a mutually agreeable schedule for 

1321 timely completion of the process. Such process will analyze whether the proposed change is likely to: 

1322 (i) result in the use of Project Water contrary to the terms of this Contract; (ii) impair the ability of the 

1323 Contractor to pay for Project Water furnished under this Contract or to pay for any Federally1324 constructed facilities for which the Contractor is responsible; and (iii) have an impact on any Project 

1325 Water rights applications, permits, or licenses. In addition, the Contracting Officer shall comply with 

1326 NEPA and ESA. The Contractor will be responsible for all costs incurred by the Contracting Officer 

1327 in this process, and such costs will be paid in accordance with Article 25 of this Contract. Upon 

1328 approval by the Contracting Officer, the Contractor shall promptly give notice of any such change in 

1329 Contractor’s Service Area to DWR. 
Contract No. 14-06-200-8466A-LTR1 

55

1330 FEDERAL LAWS

1331 36. By entering into this Contract, the Contractor does not waive its rights to contest the 

1332 validity or application in connection with the performance of the terms and conditions of this Contract 

1333 of any Federal law or regulation; Provided, That the Contractor agrees to comply with the terms and 

1334 conditions of this Contract unless and until relief from application of such Federal law or regulation to 

1335 the implementing provision of the Contract is granted by a court of competent jurisdiction. 

1336 NOTICES

1337 37. Any notice, demand, or request authorized or required by this Contract shall be deemed 

1338 to have been given on behalf of the parties when mailed, postage prepaid; or delivered to the Area 

1339 Manager, South-Central California Area Office, 1243 ”N” Street, Fresno, California 93721; to the 

1340 Chief, State Water Project Analysis Office, Department of Water Resources, P. O. Box 942836, 

1341 Sacramento, California 94236-0001; and to the Board of Directors of the Hill’s Valley Irrigation 

1342 District, P. O. Box 911, Visalia, California 93279. The designation of the addressee or the address 

1343 may be changed by notice given in the same manner as provided in this Article for other notices. 

1344 CONFIRMATION OF CONTRACT

1345 38. The Contractor, after the execution of this Contract, shall promptly seek to secure a 

1346 decree of a court of competent jurisdiction of the State of California, confirming the execution of this 

1347 Contract. The Contractor shall furnish both the United States and DWR with a certified copy of the 

1348 final decree, the validation proceedings, and all pertinent supporting records of the court approving and 

1349 confirming this Contract, and decreeing and adjudging it to be lawful, valid, and binding on the 

1350 Contractor. 
Contract No. 14-06-200-8466A-LTR1 

56

1351 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of the day and 

1352 year first above written. 

1353 THE UNITED STATES OF AMERICA 

1354 By: __________________________________________ 

1355 Regional Director, Mid-Pacific Region 

1356 Bureau of Reclamation 

1357 Approved as to Legal Form and DEPARTMENT OF WATER RESOURCES 

1358 Sufficiency: OF THE STATE OF CALIFORNIA 

1359 By: ___________________________ By: __________________________________________ 

1360 Chief Counsel, Director, 

1361 Department of Water Resources Department of Water Resources 

1362 (SEAL) HILLS VALLEY IRRIGATION DISTRICT 

1363 By: ____________________________________ 

1364 President of the Board of Directors 

1365 Attest: 

1366 By: ________________________________ 

1367 Secretary of the Board of Directors 

1368 (H:\pub 440\LTRC\Final Draft LTRC’s – Fresno, Tracy\10-20-04 Hills Valley Final Draft LTRC with 

1369 exhibits.doc) 
Contract No. 14-06-200-8466A-LTR1 

 EXHIBIT A

 [Map or Description of Service Area] 

 
Contract No. 14-06-200-8466A-LTR1 

EXHIBIT B

HILLS VALLEY IRRIGATION DISTRICT

Water Rates and Charges

Note: Rates and Charges are 2004 rates. This exhibit will be updated prior to execution of the 

 contract to reflect the current Rates and Charges. 

Banks Joint Point Pumping

 Irrigation Water M&I Water

O&M AND COST-OF-SERVICE RATES: 

Capital Rates: 

 Cross Valley Conveyance (if applicable) $4.98 ** 

 

O&M Rates: 

 Water Marketing $7.59 

 Storage $5.83 

 Direct Pumping (Project Use Energy) $3.25 

 Dos Amigos 4/ 

Deficit Rates: 

 Non-Interest Bearing 

 Interest Bearing $0.08 

 

CFO/PFR Adj. Rate: *** $1.66 

TOTAL COST-OF-SERVICE RATES: $23.39 

FULL-COST RATES: 

Section 202(3) Rate is applicable to a Qualified 

recipient or to a Limited Recipient receiving 

irrigation water on or before October 1, 1981. $29.68 

 

Section 205(a)(3) Rate is applicable to a Limited 

Recipient that did not receive irrigation water on 

or before October 1, 1981. $31.16 

 

SURCHARGES UNDER P.L 102-575 

TO RESTORATION FUND* 

Restoration Payments [3407(d)(2)(A)] $7.82 

* The surcharges are payments in addition to the water rates and were determined pursuant to 

Title XXXIV of Public Law 102-575. Restoration fund surcharges under P.L. 102-575 

are on a fiscal year basis (10/1/01-9/30/02). 

** M&I Rates will be calculated when needed. 

***Rate represents the Chief Financial Officer (CFO) adjustment and Provision for 

Replacement (PFR) credit for option 2 cost deferment to be distributed over 

 4/ - Conveyance and Conveyance Pumping operation and maintenance costs were removed 

for ratesetting purposes and are to be direct billed. 
Contract No. 14-06-200-8466A-LTR1