Irrigation and M&I

Contract No.

14-06-200-585A-LTR1

UNITED STATES

DEPARTMENT OF THE INTERIOR

BUREAU OF RECLAMATION

Central Valley Project, California

LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES

AND

INTERNATIONAL WATER DISTRICT

PROVIDING FOR PROJECT WATER SERVICE

FROM FRIANT DIVISION

Table of Contents

Article No. Title Page No.

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

Explanatory Recitals .........................................................................................1-5

1 Definitions ......................................................................................................5-10

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

3 Water to be Made Available and Delivered to the Contractor ......................13-19

4 Time for Delivery of Water ..........................................................................19-21

5 Point of Diversion and Responsibility for Distribution of Water .................22-23

6 Measurement of Water Within the Service Area.............................................23-25

7 Rates and Method of Payment for Water .....................................................25-32

8 Non-Interest Bearing Operation and Maintenance Deficits ..................................32

9 Sales, Transfers, or Exchanges of Water ...............................................................32-34

10 Application of Payments and Adjustments ...........................................................34

11 Temporary Reductions--Return Flows ..................................................................35-36

12 Constraints on the Availability of Water ...............................................................36-38

13 Unavoidable Groundwater Percolation ..................................................................38-39

14 Rules and Regulations ...........................................................................................39-40

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

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

17 Water Acquired by the Contractor Other Than From the United States ......41-43

18 Opinions and Determinations .......................................................................43-44

19 Coordination and Cooperation ......................................................................44-45

20 Charges for Delinquent Payments ................................................................45-46

21 Equal Opportunity.........................................................................................46-47

22 General Obligation--Benefits Conditioned Upon Payment .........................47-48
23 Compliance With Civil Rights Laws and Regulations ......................................48

Article No. Title Page No.

24 Privacy Act Compliance ................................................................................48-49

25 Contractor to Pay Certain Miscellaneous Costs .................................................49

26 Water Conservation .....................................................................................49-50

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

28 Operation and Maintenance by Non-Federal Entity .....................................50-52

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

30 Books, Records, and Reports .......................................................................52-53

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

32 Severability ........................................................................................................54

33 Resolution of Disputes .................................................................................54-55

34 Officials Not to Benefit .....................................................................................55

35 Changes in Contractor's Service Area ..........................................................55-56

36 Federal Laws......................................................................................................56

37 Notices...............................................................................................................56

38 Confirmation of Contract

Signature Page

Exhibit A

Exhibit B
Contract No. 14-06-200-585A-LTR1

1 UNITED STATES

2 DEPARTMENT OF THE INTERIOR

3 BUREAU OF RECLAMATION

4 Central Valley Project, California

5 LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES

6 AND

7 INTERNATIONAL WATER DISTRICT

8 PROVIDING FOR PROJECT WATER SERVICE

9 FROM FRIANT DIVISION

THIS CONTRACT, made this 20th 10 day of January , 2001, in pursuance generally

11 of the Act of June 17, 1902 (32 Stat. 388), and acts amendatory or supplementary thereto, including, but

12 not limited to, the Acts of August 26, 1937 (50 Stat. 844), as amended and supplemented, August 4, 1939

13 (53 Stat. 1187), as amended and supplemented, July 2, 1956 (70 Stat. 483), June 21, 1963 (77 Stat. 68),

14 October 12, 1982 (96 Stat. 1262), October 27, 1986 (100 Stat. 3050), as amended, and Title XXXIV of

15 the Act of October 30, 1992 (106 Stat. 4706), all collectively hereinafter referred to as Federal

16 Reclamation law, between THE UNITED STATES OF AMERICA, hereinafter referred to as the United

17 States, and INTERNATIONAL WATER DISTRICT, hereinafter referred to as the Contractor, a public

18 agency of the State of California, duly organized, existing, and acting pursuant to the laws thereof, with its

19 principal place of business in California;

20 WITNESSETH, That:

21 EXPLANATORY RECITALS

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

23 California, for diversion, storage, carriage, distribution and beneficial use, for flood control, irrigation,
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24 municipal, domestic, industrial, fish and wildlife mitigation, protection and restoration, generation and

25 distribution of electric energy, salinity control, navigation and other beneficial uses, of waters of the

26 Sacramento River, the American River, the Trinity River, and the San Joaquin River and their tributaries; and

[2nd 27 ] WHEREAS, the United States constructed Friant Dam (thereby creating Millerton Lake)

28 and the Friant-Kern and Madera Canals, hereinafter collectively referred to as the Friant Division facilities,

29 which will be used in part for the furnishing of water to the Contractor pursuant to the terms of this Contract;

30 and

[3rd 31 ] WHEREAS, pursuant to Section 8 of the Act of June 17, 1902 (32 Stat. 388), the United

32 States has acquired water rights and other rights to the flows of the San Joaquin River, including without

33 limitation the permits issued as the result of Decision 935 by the California State Water Resource Control

34 Board and the contracts described in subdivision (n) of Article 3 of this Contract, pursuant to which the

35 Contracting Officer develops, diverts, stores and delivers Project Water stored or flowing through Millerton

36 Lake in accordance with State and Federal law for the benefit of Project Contractors in the Friant Division;

37 and

38 [3.1] WHEREAS, the water supplied to the Contractor pursuant to this Contract is Project Water

39 developed through the exercise of the rights described in the third (3rd) Explanatory Recital of this Contract;

40 and

[4th 41 ] WHEREAS, the Contractor and the United States entered into Contract 

42 No. 14-06-200-585A, as amended, which established terms for the delivery to the Contractor of Project

43 Water from the Friant Division from August 23, 1963, to February 28, 1995; and
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[5th 44 ] WHEREAS, the Contractor and the United States have pursuant to subsection 3404(c)(1)

45 of the Central Valley Project Improvement Act (CVPIA), subsequently entered into interim renewal

46 contract(s) identified as Contract No(s). 14-06-200-585A-IR1, IR2, IR3, and IR4, the current of which is

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

48 Contractor from December 1, 2000, through February 28, 2001; and

[6th 49 ] WHEREAS, Section 3404(c) of the CVPIA provides for long-term renewal of interim and

50 existing long-term Project Water service contracts following completion of appropriate environmental

51 documentation, including a programmatic environmental impact statement (PEIS) pursuant to the National

52 Environmental Policy Act analyzing the direct and indirect impacts and benefits of implementing the CVPIA

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

[7th 54 ] WHEREAS, the United States has completed the PEIS and all other appropriate

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

[8th 56 ] WHEREAS, the Contractor has requested the long-term renewal of the Existing Contract,

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

58 California, for water service from the Central Valley Project; and

[9th 59 ] WHEREAS, the United States has determined that the Contractor has fulfilled all of its

60 obligations under the Existing Contract; and

[10th 61 ] WHEREAS, the Contractor has demonstrated to the satisfaction of the Contracting Officer

62 that the Contractor has utilized the Project Water supplies available to it for reasonable and beneficial use

63 and/or has demonstrated projected future demand for water use such that the Contractor has the capability
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64 and expects to utilize fully for reasonable and beneficial use the quantity of Project Water to be made

65 available to it pursuant to this Contract; and

[11th 66 ] WHEREAS, water obtained from the Central Valley Project has been relied upon by urban

67 and agricultural areas within California for more than fifty (50) years, and is considered by the Contractor as

68 an essential portion of its water supply; and

[12th 69 ] WHEREAS, the economies of regions within the Central Valley Project, including the

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

71 Valley Project; and

[13th 72 ] WHEREAS, the Secretary intends through coordination, cooperation, and partnerships to

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

74 purposes; and

[14th 75 ] WHEREAS, the mutual goals of the United States and the Contractor include: to provide

76 for reliable Project Water supplies; to control costs of those supplies; to achieve repayment of the Central

77 Valley Project as required by law; to guard reasonably against Project Water shortages; to achieve a

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

79 environmental statutes, all consistent with the legal obligations of the United States relative to the Central

80 Valley Project; and

[15th 81 ] Omitted; 

82 [15.1] WHEREAS, during Uncontrolled Seasons, Friant Division Project Contractors utilize

83 undependable Class 2 Water in their service areas to, among other things, assist in the management and
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84 alleviation of groundwater overdraft in the Friant Division service area, provide opportunities for

85 environmental enhancement, including restoration of the San Joaquin River below Friant Dam, minimize

86 flooding along the San Joaquin River, encourage optimal water management, and maximize the reasonable

87 and beneficial use of the water; and

88 [15.2] WHEREAS, the parties desire and intend that this Contract not provide a disincentive to

89 the Friant Division Project Contractors continuing to carry out the beneficial activities set out in the

90 Explanatory Recital immediately above; and

[16th 91 ] WHEREAS, the United States and the Contractor are willing to enter into this Contract

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

93 NOW, THEREFORE, in consideration of the mutual and dependent covenants herein contained, it

94 is hereby mutually agreed by the parties hereto as follows:

95 DEFINITIONS

96 1. When used herein unless otherwise distinctly expressed, or manifestly incompatible with the

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

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

99 inclusive;

100 (b) “Charges” shall mean the payments required by Federal Reclamation law in addition

101 to the Rates and Tiered Pricing Components specified in this Contract as determined annually by the

102 Contracting Officer pursuant to this Contract;

103 (b2) "Class 1 Water" shall mean that supply of water stored in or flowing through
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104 Millerton Lake which, subject to the contingencies hereinafter described in Articles 3, 11, and 12 of 

105 this Contract, will be available for delivery from Millerton Lake and the Friant-Kern and Madera Canals as

106 a dependable water supply during each Year;

107 (b3) "Class 2 Water" shall mean that supply of water which can be made available

108 subject to the contingencies hereinafter described in Articles 3, 11, and 12 of this Contract for delivery from

109 Millerton Lake and the Friant-Kern and Madera Canals in addition to the supply of Class 1 Water. 

110 Because of its uncertainty as to availability and time of occurrence, such water will be undependable in

111 character and will be furnished only if, as, and when it can be made available as determined by the

112 Contracting Officer;

113 (c) “Condition of Shortage” shall mean a condition respecting the Project during any Year

114 such that the Contracting Officer is unable to deliver sufficient water to meet the Contract Total;

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

116 representative acting pursuant to this Contract or applicable Reclamation law or regulation;

117 (e) “Contract Total” shall mean the maximum amount of Class 1 Water, plus the

118 maximum amount of Class 2 Water to which the Contractor is entitled under subdivision (a) of Article 3 of this

119 Contract;

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

121 to provide Project Water under this Contract as described in Exhibit “A” attached hereto, which may be

122 modified from time to time in accordance with Article 35 of this Contract without amendment of this Contract;

123 (g) “CVPIA” shall mean the Central Valley Project Improvement Act, Title XXXIV of
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124 the Act of October 30, 1992 (106 Stat. 4706);

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

126 accordance with Section 204 of the Reclamation Reform Act of October 12, 1982 (96 Stat. 1263), as

127 amended, hereinafter referred to as RRA;

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

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

130 law;

131 (j) “Full Cost Rate” shall mean that water rate described in Sections 205(a)(3) or 202(3)

132 of the RRA, whichever is applicable;

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

134 in accordance with Section 204 of the RRA;

135 (l) “Irrigation Full Cost Water Rate” shall have the same meaning as “full cost” as that

136 term is used in paragraph (3) of Section 202 of the RRA;

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

138 primarily in the production of agricultural crops or livestock, including domestic use incidental thereto, and

139 watering of livestock;

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

141 land, as provided in 43 CFR 426.2;

142 (n2) “Long Term Historic Average” shall mean the average of the final forecast of Water

Made Available to the Contractor pursuant to this Contract and the contracts referenced in the fourth (4th 143 )

and fifth (5th 144 ) Explanatory Recitals of this Contract;
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145 (o) “Municipal and Industrial (M&I) Water” shall mean water made available from the

146 Project other than Irrigation Water made available to the Contractor. M&I Water shall include water used

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

148 are kept for personal enjoyment or water delivered to land holdings operated in units of less than five (5)

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

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

151 (p) “M&I Full Cost Water Rate” shall mean the annual rate, which, as determined by the

152 Contracting Officer, shall amortize the expenditures for construction allocable to Project M&I facilities in

153 service, including, O&M deficits funded, less payments, over such periods as may be required under Federal

154 Reclamation law with interest accruing from the dates such costs were first incurred plus the applicable rate

155 for the O&M of such Project facilities. Interest rates used in the calculation of the M&I Full Cost Rate shall

156 comply with the Interest Rate methodology contained in Section 202 (3) (B) and (C) of the RRA;

157 (q) “Operation and Maintenance” or “O&M" shall mean normal and reasonable care,

158 control, operation, repair, replacement (other than Capital replacement), and maintenance of Project facilities;

159 (r) “Operating Non-Federal Entity" shall mean the Friant Water Users Authority, 

160 a Non-Federal entity which has the obligation to operate and maintain all or a portion of the Friant Division

161 facilities pursuant to an agreement with the United States, and which may have funding obligations with

162 respect thereto;

163 (s) “Project” shall mean the Central Valley Project owned by the United States and

164 managed by the Department of the Interior, Bureau of Reclamation;
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165 (t) “Project Contractors” shall mean all parties who have water service contracts for

166 Project Water from the Project with the United States pursuant to Federal Reclamation law;

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

168 by the Secretary in accordance with the statutes authorizing the Project and in accordance with the terms and

169 conditions of water rights acquired pursuant to California law;

170 (v) “Rates” shall mean the payments determined annually by the Contracting Officer in

171 accordance with the then current applicable water rate setting policies for the Project, as described in

172 subdivision (a) of Article 7 of this Contract;

173 (w) Omitted;

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

175 authorized representative acting pursuant to any authority of the Secretary and through any agency of the

176 Department of the Interior;

177 (y) “Tiered Pricing Component” shall be the incremental amount to be paid for each acre178 foot of Water Delivered as described in subdivision (j) of Article 7 of this Contract; 

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

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

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

182 be delivered to the Contractor for the upcoming Year as declared by the Contracting Officer, pursuant to

183 subdivision (a) of Article 4 of this Contract;

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

185 which times and quantities for delivery have been established by the Contractor and Contracting Officer,
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186 pursuant to subdivision (b) of Article 4 of this Contract; and

187 (cc) "Year" shall mean the period from and including March 1 of each Calendar Year

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

189 TERM OF CONTRACT 

190 2. (a) This Contract shall be effective March 1, 2001, through February 28, 2026. In the

191 event the Contractor wishes to renew the Contract beyond February 28, 2026, the Contractor shall submit a

192 request for renewal in writing to the Contracting Officer no later than two (2) years prior to the date this

193 Contract expires. The renewal of this Contract insofar as it pertains to the furnishing of Irrigation Water to the

194 Contractor shall be governed by subdivision (b) of this Article, and the renewal of this Contract insofar as it

195 pertains to the furnishing of M&I Water to the Contractor shall be governed by subdivision (c) of this Article.

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

197 to the parties hereto, and upon a determination by the Contracting Officer that at the time of contract renewal

198 the conditions set forth in subdivision (b)(2) of this Article are met, and subject to Federal and State law, this

199 Contract, insofar as it pertains to the furnishing of Irrigation Water to the Contractor, shall be renewed for a

200 period of twenty-five (25) years.

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

202 Contractor has prepared a water conservation plan that has been determined by the Contracting Officer in

203 accordance with Article 26 of this Contract to meet the conservation and efficiency criteria for evaluating such

204 plans established under Federal law; (ii) the Contractor is implementing an effective water conservation and

205 efficiency program based on the Contractor’s water conservation plan as required by Article 26 of this
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206 Contract; (iii) the Contractor is operating and maintaining all 

207 water measuring devices and implementing all water measurement methods as approved by the Contracting

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

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

210 expects fully to utilize for reasonable and beneficial use the quantity of Project Water to be made available to

211 it pursuant to such renewal; (v) the Contractor is complying with all terms and conditions of this Contract and

212 all legal obligations of the Contractor, if any, set forth in an enforceable court order, final judgment and/or

213 settlement relating to restoration of the San Joaquin River; and (vi) the Contractor has the physical and legal

214 ability to deliver Project Water.

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

216 (b)(1) of this Article and any subsequent renewal contracts shall be developed consistent with the parties’

217 respective legal rights and obligations, and in consideration of all relevant facts and circumstances, as those

218 circumstances exist at the time of renewal, including, without limitation, the Contractor’s need for continued

219 delivery of Project Water; environmental conditions affected by implementation of the Contract to be

220 renewed, and specifically changes in those conditions that occurred during the life of the Contract to be

221 renewed; the Secretary’s progress toward achieving the purposes of the CVPIA as set out in Section 3402

222 and in implementing the specific provisions of the CVPIA; and current and anticipated economic

223 circumstances of the region served by the Contractor.

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

225 shall be renewed for a period of twenty-five (25) years and thereafter shall be renewed for successive periods
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226 of up to forty (40) years each, which periods shall be consistent with the 

227 then-existing Reclamation-wide policy, under terms and conditions mutually agreeable to the parties and

228 consistent with Federal and State law. The present Reclamation-wide policy, dated March 20, 2000,

229 provides that the term of such contracts shall be no more than twenty-five (25) years each, subject to a

230 variance to allow a longer term in appropriate circumstances. The Contractor shall be afforded the

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

232 Reclamation-wide policy applicable to the delivery of Project M&I Water that would affect the term of any

233 subsequent renewal contract with the Contractor for the furnishing of M&I Water.

234 (d) The Contracting Officer anticipates that by December 31, 2024, all authorized

235 Project construction expected to occur will have occurred, and on that basis the Contracting Officer agrees

236 by that date to allocate all costs that are properly assignable to the Contractor, and agrees further that, at any

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

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

239 (c)(1) and (d) of Section 9, of the Reclamation Project Act of 1939, subject to applicable Federal law and

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

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

242 taken of the amount credited to return by the Contractor as provided for under Reclamation law, the

243 remaining amount of construction costs assignable for ultimate return by the Contractor can probably be

244 repaid to the United States within the term of a contract under said subsection 9(c)(1) and (d). If the

245 remaining amount of costs that are properly assignable to the Contractor cannot be determined by December
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246 31, 2024, the Contracting Officer shall notify the Contractor, and provide the reason(s) why such a

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

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

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

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

251 the Contractor has not requested conversion of this Contract within such term, the parties shall incorporate in

252 any subsequent renewal contract as described in Articles 2(b) and (c) a provision that carries forth in

253 substantially identical terms the provisions of this Article 2(d). In the event the Contracting Officer is able to

254 make a determination of the remaining amount of costs that are properly assignable to the Contractor before

255 December 31, 2024, the Contracting Officer shall do so at the earliest time he/she has such ability.

256 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE Contractor

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

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

259 Contracting Officer shall make available for delivery to the Contractor 1,200 acre-feet of Class 1 Water for

260 irrigation and M&I purposes. The quantity of Water Delivered to the Contractor in accordance with this

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

262 (b) Omitted.

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

264 requirements.
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265 (d) The Contractor shall make reasonable and beneficial use of all Project Water or other

266 water furnished pursuant to this Contract. Groundwater recharge programs, groundwater banking programs,

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

268 pursuant to this Contract conducted within the Contractor’s Service Area which are consistent with applicable

269 State law and result in use consistent with Reclamation law will be allowed; Provided, That any direct

270 recharge program(s) is (are) described in the Contractor’s Water Conservation Plan submitted pursuant to

271 Article 26 of this Contract; Provided, further, That such Water Conservation Plan demonstrates sufficient

272 lawful uses exist in the Contractor’s Service Area so that using a long-term average, the quantity of Delivered

273 Water is demonstrated to be reasonable for such uses and in compliance with Reclamation law. Groundwater

274 recharge programs, groundwater banking programs, surface water storage programs, and other similar

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

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

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

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

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

280 biological opinion(s) prepared as a result of a consultation regarding the execution of this Contract undertaken

281 pursuant to Section 7 of the Endangered Species Act of 1973, as amended, that are within the Contractor’s

282 legal authority to implement. The Contractor shall comply with the limitations or requirements imposed by

283 environmental documentation applicable to the Contractor and within its legal authority to implement regarding

284 specific activities, including conversion of Irrigation Water to M&I Water. Nothing herein shall be construed
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285 to prevent the Contractor from challenging or seeking judicial relief in a court of competent jurisdiction with

286 respect to any biological opinion or other environmental documentation referred to in this Article.

287 (f) Subject to subdivisions (l) and (n) of Article 3 of this Contract, following the

288 declaration of Water Made Available under Article 4 of this Contract, the Contracting Officer will make a

289 determination whether Project Water, or other water available to the Project, can be made available to the

290 Contractor in addition to the Contract Total under Article 3 of this Contract during the Year without adversely

291 impacting other Project Contractors. At the request of the Contractor, the Contracting Officer will consult

292 with the Contractor prior to making such a determination. Subject to subdivisions (l) and (n) of Article 3 of

293 this Contract, if the Contracting Officer determines that Project Water, or other water available to the Project,

294 can be made available to the Contractor, the Contracting Officer will announce the availability of such water

295 and shall so notify the Contractor as soon as practical. The Contracting Officer will thereafter meet with the

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

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

298 Contracting Officer shall make such water available to the Contractor in accordance with applicable statutes,

299 regulations, guidelines, and policies.

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

301 Year some or all of the Water Made Available to the Contractor during the current Year referred to as

302 “carryover.” The Contractor may request permission to use during the current Year a quantity of Project

303 Water which may be made available by the United States to the Contractor during the subsequent Year

304 referred to as “preuse.” The Contracting Officer’s written approval may permit such uses in accordance with
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305 applicable statutes, regulations, guidelines, and policies.

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

307 to the reasonable and beneficial use of Water Delivered pursuant to this Contract during the term thereof and

308 any subsequent renewal contracts, as described in Article 2 of this Contract, during the terms thereof shall not

309 be disturbed so long as the Contractor shall fulfill all of its obligations under this Contract and any renewals

310 thereof. Nothing in the preceding sentence shall affect the Contracting Officer’s ability to impose shortages

311 under Article 11 or subdivision (b) of Article 12 of this Contract or applicable provisions of any subsequent

312 renewal contracts.

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

314 for purposes other than those described in subdivisions (m) and (o) of Article 1 of this Contract upon written

315 approval by the Contracting Officer in accordance with the terms and conditions of such approval.

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

317 other rights described in the third (3rd) Explanatory Recital of this Contract and to provide the water available

318 under this Contract. The Contracting Officer shall not object to participation by the Contractor, in the

319 capacity and to the extent permitted by law, in administrative proceedings related to the water rights and other

320 rights described in the third (3rd) Explanatory Recital of this Contract; Provided, however, That the

321 Contracting Officer retains the right to object to the substance of the Contractor’s position in such a

322 proceeding.

323 (k) Project Water furnished to the Contractor during any month designated in a schedule
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324 or revised schedule submitted by the Contractor and approved by the Contracting Officer shall be deemed to

325 have been accepted by the Contractor as Class 1 Water to the extent that Class 1 Water is called for in such

326 schedule for such month and shall be deemed to have been accepted as Class 2 Water to the extent Class 2

327 Water is called for in such schedule for such month. If in any month the Contractor diverts a quantity of water

328 in addition to the total amount of Class 1 Water and Class 2 Water set forth in the Contractor's approved

329 schedule or revised schedule for such month, such additional diversions shall be charged first against the

330 Contractor's remaining Class 2 Water supply available in the current Year. To the extent the Contractor's

331 remaining Class 2 Water supply available in the current Year is not sufficient to account for such additional

332 diversions, such additional diversions shall be charged against the Contractor's remaining Class 1 Water

333 supply available in the current Year. To the extent the Contractor's remaining Class 1 Water and Class 2

334 Water supplies available in the current Year are not sufficient to account for such additional diversions, such

335 additional diversions shall be charged first against the Contractor's available Class 2 Water supply and then

336 against the Contractor's available Class 1 Water supply, both for the following Year. Payment for all

337 additional diversions of water shall be made in accordance with Article 7 of this Contract.

338 (l) If the Contracting Officer determines there is a Project Water supply available at

339 Friant Dam as the result of an unusually large water supply not otherwise storable for Project purposes or

340 infrequent and otherwise unmanaged flood flows of short duration, such water will be made available to the

341 Contractor and others under Section 215 of the RRA pursuant to the priorities specified below if the

342 Contractor enters into a temporary contract with the United States not to exceed one (1) year for the delivery

343 of such water or, as otherwise provided for in Federal Reclamation law and associated regulations. Such
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344 water may be identified by the Contractor either (i) as additional water to supplement the supply of Class 1

345 Water and/or Class 2 Water made available to it pursuant to this Contract or, (ii) upon written notification to

346 the Contracting Officer, as water to be credited against the Contractor's Class 2 Water supply available

347 pursuant to this Contract. The Contractor shall deliver such water to Eligible Lands, or to Excess Lands in

348 accordance with this Article. The Contracting Officer shall make water determined to be available pursuant

349 to this subsection according to the following priorities: first, to long-term Contractors for Class 1 Water and/or

350 Class 2 Water within the Friant Division; second, to long-term Contractors in the Cross Valley Division of the

351 Project. The Contracting Officer will consider and seek to accommodate requests from other parties for

352 Section 215 Water for use within the area identified as the Friant Division service area in the environmental

353 assessment developed in connection with the execution of this Contract.

354 (m) Nothing in this Contract, nor any action or inaction of the Contractor or Contracting

355 Officer in connection with the implementation of this Contract, is intended to override, modify, supersede or

356 otherwise interfere with any term or condition of the water rights and other rights referred in the third (3rd)

357 Explanatory Recital of this Contract.

358 (n) The rights of the Contractor under this Contract are subject to the terms of the

359 contract for exchange waters, dated July 27, 1939, between the United States and the San Joaquin and Kings

360 River Canal and Irrigation Company, Incorporated, et al., (hereinafter referred to as the Exchange

361 Contractors), Contract No. I1r-1144, as amended. The United States agrees that it will not deliver to the

362 Exchange Contractors thereunder waters of the San Joaquin River unless and until required by the terms of

363 said contract, and the United States further agrees that it will not voluntarily and knowingly determine itself
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364 unable to deliver to the Exchange Contractors entitled thereto from water that is available or that may become

365 available to it from the Sacramento River and its tributaries or the Sacramento-San Joaquin Delta those

366 quantities required to satisfy the obligations of the United States under said Exchange Contract and under

367 Schedule 2 of the Contract for Purchase of Miller and Lux Water Rights (Contract I1r-1145, dated July 27,

368 1939).

369 TIME FOR DELIVERY OF WATER

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

371 announce the Contracting Officer’s expected declaration of the Water Made Available. The declaration will

372 be updated monthly, and more frequently if necessary, based on then-current operational and hydrologic

373 conditions and a new declaration with changes, if any, to the Water Made Available will be made. The

374 Contracting Officer shall provide forecasts of Project operations and the basis of the estimate, with relevant

375 supporting information, upon the written request of the Contractor. Concurrently with the declaration of the

376 Water Made Available, the Contracting Officer shall provide the Contractor with the updated Long Term

377 Historic Average. The declaration of Project operations will be expressed in terms of both Water Made

378 Available and the Long Term Historic Average.

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

380 submit to the Contracting Officer a written schedule, satisfactory to the Contracting Officer, showing the

381 monthly quantities of Project Water to be delivered by the United States to the Contractor pursuant to this

382 Contract for the Year commencing on such March 1. The Contracting Officer shall use all reasonable means

383 to deliver Project Water according to the approved schedule for the Year commencing on such March 1.
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384 (c) The Contractor shall not schedule Project Water in excess of the quantity of Project

385 Water the Contractor intends to put to reasonable and beneficial use within the Contractor's Service Area, or

386 to sell, transfer or exchange pursuant to Article 9 of this Contract during any Year.

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

388 United States shall deliver Project Water to the Contractor in accordance with the initial schedule submitted

389 by the Contractor pursuant to subdivision (b) of this Article, or any written revision(s), satisfactory to the

390 Contracting Officer, thereto submitted within a reasonable time prior to the date(s) on which the requested

391 change(s) is/are to be implemented; Provided, That the total amount of water requested in that schedule or

392 revision does not exceed the quantities announced by the Contracting Officer pursuant to the provisions of

393 subdivision (a) of Article 3, and the Contracting Officer determines that there will be sufficient capacity

394 available in the appropriate Friant Division facilities to deliver the water in accordance with that schedule:

395 Provided, further, That the Contractor shall not schedule the delivery of any water during any period as to

396 which the Contractor is notified by the Contracting Officer or Operating Non-Federal Entity that Project

397 facilities required to make deliveries to the Contractor will not be in operation because of scheduled O&M.

398 (e) The Contractor may, during the period from and including November 1 of each Year

399 through and including the last day of February of that Year, request delivery of any amount of the Class 1

400 Water estimated by the Contracting Officer to be made available to it during the following Year. The

401 Contractor may, during the period from and including January 1 of each Year (or such earlier date as may be

402 determined by the Contracting Officer) through and including the last day of February of that Year, request

403 delivery of any amount of Class 2 Water estimated by the Contracting Officer to be made available to it
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404 during the following Year. Such water shall hereinafter be referred to as preuse water. Such request must be

405 submitted in writing by the Contractor for a specified quantity of preuse and shall be subject to the approval of

406 the Contracting Officer. Payment for preuse water so requested shall be at the appropriate rate(s) for the

407 following Year in accordance with Article 7 of this Contract and shall be made in advance of delivery of any

408 preuse water. The Contracting Officer shall deliver such preuse water in accordance with a schedule or any

409 revision thereof submitted by the Contractor and approved by the Contracting Officer, to the extent such

410 water is available and to the extent such deliveries will not interfere with the delivery of Project Water

411 entitlements to other Friant Division Contractors or the physical maintenance of the Project facilities. The

412 quantities of preuse water delivered pursuant to this subdivision shall be deducted from the quantities of water

413 that the Contracting Officer would otherwise be obligated to make available to the Contractor during the

414 following Year; Provided, That the quantity of preuse water to be deducted from the quantities of either

415 Class 1 Water or Class 2 Water to be made available to the Contractor in the following Year shall be

416 specified by the Contractor at the time the preuse water is requested or as revised in its first schedule for the

417 following Year submitted in accordance with subdivision (b) of this Article, based on the availability of the

418 following Year water supplies as determined by the Contracting Officer.

419 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

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

421 be delivered to the Contractor at a point or points of delivery either on Project facilities or another location or

422 locations mutually agreed to in writing by the Contracting Officer and the Contractor.
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423 (b) The Contracting Officer, the Operating Non-Federal Entity, or other appropriate

424 entity shall make all reasonable efforts to maintain sufficient flows and levels of water in the Friant-Kern Canal

425 to deliver Project Water to the Contractor at specific turnouts established pursuant to subdivision (a) of this

426 Article.

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

428 classification provisions of Federal Reclamation law and the associated regulations. The Contractor shall not

429 deliver Project Water to land outside the Contractor's Service Area unless approved in advance by the

430 Contracting Officer.

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

432 and recorded with equipment furnished, installed, operated, and maintained by the United States, the

433 Operating Non-Federal Entity or other appropriate entity as designated by the Contracting Officer (hereafter

434 “other appropriate entity”) at the point or points of delivery established pursuant to subdivision (a) of this

435 Article. Upon the request of either party to this Contract, the Contracting Officer shall investigate, or cause to

436 be investigated by the responsible Operating Non-Federal Entity, the accuracy of such measurements and

437 shall take any necessary steps to adjust any errors appearing therein. For any period of time when accurate

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

439 responsible Operating Non-Federal Entity prior to making a final determination of the quantity delivered for

440 that period of time.

441 (e) Neither the Contracting Officer nor any Operating Non-Federal Entity shall be

442 responsible for the control, carriage, handling, use, disposal, or distribution of Project Water Delivered to the
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443 Contractor pursuant to this Contract beyond the delivery points specified in subdivision (a) of this Article. 

444 The Contractor shall indemnify the United States, its officers, employees, agents, and assigns on account of

445 damage or claim of damage of any nature whatsoever for which there is legal responsibility, including property

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

447 disposal, or distribution of such Project Water beyond such delivery points, except for any damage or claim

448 arising out of: (i) acts or omissions of the Contracting Officer or any of its officers, employees, agents, or

449 assigns, including any responsible Operating Non-Federal Entity, with the intent of creating the situation

450 resulting in any damage or claim; (ii) willful misconduct of the Contracting Officer or any of its officers,

451 employees, agents, or assigns, including any responsible Operating Non-Federal Entity; (iii) negligence of the

452 Contracting Officer or any of its officers, employees, agents, or assigns including any responsible Operating

453 Non-Federal Entity; or (iv) damage or claims resulting from a malfunction of facilities owned and/or operated

454 by the United States or responsible Operating Non-Federal Entity; Provided, That the Contractor is not the

455 Operating Non-Federal Entity that owned or operated the malfunctioning facility(ies) from which the damage

456 claim arose.

457 MEASUREMENT OF WATER WITHIN THE SERVICE AREA

458 6. (a) The Contractor established a measurement program satisfactory to the Contracting

459 Officer, all surface water delivered for irrigation purposes within the Contractor’s Service Area is measured at

460 each agricultural turnout and such water delivered for municipal and industrial purposes is measured at each

461 municipal and industrial service connection. The water measuring devices or water measuring methods of

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

463 for installing, operating, and maintaining and repairing all such measuring devices and implementing all such
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464 water measuring methods at no cost to the United States. The Contractor shall use the information obtained

465 from such water measuring devices or water measuring methods to ensure its proper management of the

466 water, to bill water users for water delivered by the Contractor; and, if applicable, to record water delivered

467 for municipal and industrial purposes by customer class as defined in the Contractor’s water conservation plan

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

469 from establishing and collecting any charges, assessments, or other revenues authorized by California law. 

470 The Contractor shall include a summary of all its annual surface water deliveries in the annual report described

471 in subdivision (c) of Article 26 of this Contract.

472 (b) To the extent the information has not otherwise been provided, upon execution of this

473 Contract, the Contractor shall provide to the Contracting Officer a written report describing the measurement

474 devices or water measuring methods being used or to be used to implement subdivision (a) of this Article and

475 identifying the agricultural turnouts and the municipal and industrial service connections or alternative

476 measurement programs approved by the Contracting Officer, at which such measurement devices or water

477 measuring methods are being used, and, if applicable, identifying the locations at which such devices and/or

478 methods are not yet being used including a time schedule for implementation at such locations. The

479 Contracting Officer shall advise the Contractor in writing within sixty (60) days as to the adequacy of, and

480 necessary modifications, if any, of the measuring devices or water measuring methods identified in the

481 Contractor’s report and if the Contracting Officer does not respond in such time, they shall be deemed

482 adequate. If the Contracting Officer notifies the Contractor that the measuring devices or methods are

483 inadequate, the parties shall within sixty (60) days following the Contracting Officer‘s response, negotiate in
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484 good faith the earliest practicable date by which the Contractor shall modify said measuring devices and/or

485 measuring methods as required by the Contracting Officer to ensure compliance with subdivision (a) of this

486 Article.

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

488 after the effective date of this Contract shall also comply with the measurement provisions described in

489 subdivision (a) of this Article.

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

491 writing by April 30 of each Year of the monthly volume of surface water delivered within the Contractor’s

492 Service Area during the previous Year.

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

Non-Federal Entity on or before the twentieth (20th 494 ) calendar day of each month of the quantity of Irrigation

495 and M&I Water taken during the preceding month.

496 RATES AND METHOD OF PAYMENT FOR WATER

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

498 Delivered Water at Rates, Charges, and the Tiered Pricing Component established in accordance with: (i) the

499 Secretary’s rate setting policy for Irrigation Water adopted in 1988 and the Secretary’s then-existing rate

500 setting policy for M&I Water. Such rate setting policies shall be amended, modified, or superseded only

501 through a public notice and comment procedure; (ii) applicable Reclamation law and associated rules and

502 regulations, or policies; and (iii) other applicable provisions of this Contract. Payments shall be made by cash

503 transaction, wire, or any other mechanism as may be agreed to in writing by the Contractor and the
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504 Contracting Officer. The Rates, Charges, and Tiered Pricing Components applicable to the Contractor upon

505 execution of this Contract are set forth in Exhibit “B”, as may be revised annually.

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

507 Pricing Components as follows:

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

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

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

511 estimate. The Contractor shall be allowed not less than two (2) months to review and comment on such

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

513 Contractor in writing of the Charges to be in effect during the period 

514 October 1 of the current Calendar Year, through September 30, of the following Calendar Year, and such

515 notification shall revise Exhibit “B.”

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

517 available to the Contractor an estimate of the Rates and Tiered Pricing Components for Project Water for the

518 following Year and the computations and cost allocations upon which those Rates are based. The Contractor

519 shall be allowed not less than two (2) months to review and comment on such computations and cost

520 allocations. By December 31 of each Calendar Year, the Contracting Officer shall provide the Contractor

521 with the final Rates and Tiered Pricing Components to be in effect for the upcoming Year, and such

522 notification shall revise Exhibit “B.”

523 (c) At the time the Contractor submits the initial schedule for the delivery of Project
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524 Water for each Year pursuant to subdivision (b) of Article 4 of this Contract, the Contractor shall make an

525 advance payment to the United States equal to the total amount payable pursuant to the applicable Rate(s) set

526 under subdivision (a) of this Article, for the Project Water scheduled to be delivered pursuant to this Contract

527 during the first two (2) calendar months of the Year. Before the end of the first month and before the end of

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

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

530 Contract during the second month immediately following. Adjustments between advance payments for Water

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

532 month; Provided, That any revised schedule submitted by the Contractor pursuant to Article 4 of this Contract

533 which increases the amount of Water Delivered pursuant to this Contract during any month shall be

534 accompanied with appropriate advance payment, at the Rates then in effect, to assure that Project Water is

535 not delivered to the Contractor in advance of such payment. In any month in which the quantity of Water

536 Delivered to the Contractor pursuant to this Contract equals the quantity of Water Scheduled and paid for by

537 the Contractor, no additional Project Water shall be delivered to the Contractor unless and until an advance

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

539 advance payments for the Water Scheduled and payments for the quantities of Water Delivered during each

540 Year pursuant to this Contract shall be made as soon as practicable but no later than April 30th of the

541 following Year, or sixty (60) days after the delivery of Project Water carried over under subdivision (f) of

542 Article 3 of this Contract if such water is not delivered by the last day of February.

543 (d) The Contractor shall also make a payment in addition to the Rate(s) in subdivision (c)
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544 of this Article to the United States for Water Delivered, at the Charges and the appropriate Tiered Pricing

545 Component then in effect, before the end of the month following the month of delivery; Provided, That the

546 Contractor may be granted an exception from the Tiered Pricing Component pursuant to subdivision (j)(2) of

547 this Article. The payments shall be consistent with the quantities of Irrigation Water and M&I Water

548 Delivered as shown in the water delivery report for the subject month prepared by the Operating Non549 Federal Entity or, if there is no Operating Non-Federal Entity, by the Contracting Officer. Such water

550 delivery report shall be the basis for payment of Charges and Tiered Pricing Components by the Contractor,

551 and shall be provided to the Contractor by the Operating Non-Federal Entity or the Contracting Officer (as

552 applicable) within five (5) days after the end of the month of delivery. The water delivery report shall be

553 deemed a bill for the payment of Charges and the applicable Tiered Pricing Component for Water Delivered. 

554 Adjustment for overpayment or underpayment of Charges shall be made through the adjustment of payments

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

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

557 (e) The Contractor shall pay for any Water Delivered under subdivision (d), (f), or (g) of

558 Article 3 of this Contract as determined by the Contracting Officer pursuant to applicable statutes, associated

559 regulations, any applicable provisions of guidelines or rate setting policies; Provided, That the Rate for Water

560 Delivered under subdivision (d) of Article 3 of this Contract shall be no more than the otherwise applicable

561 Rate for Irrigation Water or M&I Water under subdivision (a) of this Article.

562 (f) Payments to be made by the Contractor to the United States under this Contract may
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563 be paid from any revenues available to the Contractor.

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

565 of Project Water or the delivery of non-project water through Project facilities shall be allocated and applied

566 in accordance with Federal Reclamation law and the associated rules or regulations, and the then current

567 Project rate setting policies for M&I Water or Irrigation Water.

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

569 financial terms and conditions of its long-term contracts, in accordance with applicable Federal standards, so

570 as to reflect the application of Project costs and revenues. The Contracting Officer shall, each Year upon

571 request of the Contractor, provide to the Contractor a detailed accounting of all Project and Contractor

572 expense allocations, the disposition of all Project and Contractor revenues, and a summary of all water

573 delivery information. The Contracting Officer and the Contractor shall enter into good faith negotiations to

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

575 (i) The parties acknowledge and agree that the efficient administration of this Contract is

576 their mutual goal. Recognizing that experience has demonstrated that mechanisms, policies, and procedures

577 used for establishing Rates, Charges, and Tiered Pricing Components, and/or for making and allocating

578 payments, other than those set forth in this Article may be in the mutual best interest of the parties, it is

579 expressly agreed that the parties may enter into agreements to modify the mechanisms, policies, and

580 procedures for any of those purposes while this Contract is in effect without amending this Contract.

581 (j) (1) Beginning at such time as the total of the deliveries of Class 1 Water and
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582 Class 2 Water in a Year exceed eighty (80%) percent of the Contract Total, then before the end of the month

583 following the month of delivery the Contractor shall make an additional payment to the United States equal to

584 the applicable Tiered Pricing Component. The Tiered Pricing Component for the total of the deliveries of

585 Class 1 Water and Class 2 Water in excess of eighty (80%) percent of the Contract Total, but less than or

586 equal to ninety (90%) percent of the Contract Total, shall equal the one-half of the difference between the

587 Rate established under subdivision (a) of Article 7 of this Contract and the Irrigation Full Cost Water Rate or

588 M&I Full Cost Water Rate, whichever is applicable. The Tiered Pricing Component for the total of the

589 deliveries of Class 1 Water and Class 2 Water which exceeds ninety (90%) percent of the Contract Total

590 shall equal the difference between (i) the Rate established under subdivision (a) of Article 7 of this Contract

591 and (ii) the Irrigation Full Cost Water Rate or M&I Full Cost Water Rate, whichever is applicable.

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

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

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

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

596 exemption from the Tiered Pricing Components for Irrigation Water shall apply only if such habitat values can

597 be assured consistent with the purposes of CVPIA through binding agreements executed with or approved by

598 the Contracting Officer prior to use of such water.

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

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

601 transfers to others but shall not include Project Water transferred and delivered to the Contractor.
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602 (k) For the term of this Contract, Rates under the respective rate setting policies will be

603 established to recover only reimbursable “operation and maintenance” (including any deficits) and capital

604 costs of the Project, as those terms are used in the then-current Project rate setting policies, and interest,

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

606 Project rate setting policy. Changes of significance in practices which implement the Contracting Officer’s

607 rate setting policies will not be implemented until the Contracting Officer has provided the Contractor an

608 opportunity to discuss the nature, need, and impact of the proposed change.

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

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

611 downward to reflect the changed costs of delivery (if any) of the transferred Project Water to the transferee’s

612 point of delivery in accordance with the then applicable CVP Rate setting Policy. If the Contractor is

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

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

615 transferred Project Water shall be the Contractor’s Rates and Charges unadjusted for ability to pay.

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

617 authorized to adjust determinations of ability to pay every five (5) years.

618 NON-INTEREST BEARING OPERATION AND MAINTENANCE DEFICITS

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

620 Contract, the Contractor has no non-interest bearing operation and maintenance deficits and shall have no

621 further liability therefor.
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622 SALES, TRANSFERS, OR EXCHANGES OF WATER

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

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

625 sale, transfer, or exchange is authorized by applicable Federal and State laws, and applicable guidelines or

626 regulations then in effect. No sale, transfer, or exchange of Project Water under this Contract may take place

627 without the prior written approval of the Contracting Officer, except as provided for in subdivision (b) of this

628 Article, and no such sales, transfers, or exchanges shall be approved absent compliance with appropriate

629 environmental documentation including but not limited to the National Environmental Policy Act and the

630 Endangered Species Act. Such environmental documentation should include, as appropriate, an analysis of

631 groundwater impacts and economic and social effects, including environmental justice, of the proposed water

632 transfers on both the transferor and transferee.

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

634 type historically carried out among Project Contractors located within the same geographical area and to

635 allow the Contractor to participate in an accelerated water transfer program during the term of this Contract,

636 the Contracting Officer shall prepare, as appropriate, necessary environmental documentation including, but

637 not limited to, the National Environmental Policy Act and the Endangered Species Act analyzing annual

638 transfers within such geographical areas and the Contracting Officer shall determine whether such transfers

639 comply with applicable law. Following the completion of the environmental documentation, such transfers

640 addressed in such documentation shall be conducted with advance notice to the Contracting Officer, but shall

641 not require prior written approval by the Contracting Officer. Such environmental documentation and the
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642 Contracting Officer’s compliance determination shall be reviewed every five (5) years and updated, as

643 necessary, prior to the expiration of the then existing five (5) -year period. All subsequent environmental

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

645 transferred within the same geographical area.

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

647 must: (i) be for irrigation purposes for lands irrigated within the previous three (3) years, for M&I use,

648 groundwater recharge, groundwater banking, similar groundwater activities, surface water storage, or fish and

649 wildlife resources; not lead to land conversion; and be delivered to established cropland, wildlife refuges,

650 groundwater basins or municipal and industrial use; (ii) occur within a single Year; (iii) occur between a willing

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

652 modifications to facilities and be between existing Project Contractors and/or the Contractor and the United

653 States, Department of the Interior; and (v) comply with all applicable Federal, State, and local or tribal laws

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

655 Federal law.

656 APPLICATION OF PAYMENTS AND ADJUSTMENTS 

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

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

659 Contractor arising out of this Contract then due and payable. Overpayments of more than One Thousand

660 Dollars ($1,000) shall be refunded at the Contractor’s request. In lieu of a refund, any amount of such

661 overpayment at the option of the Contractor, may be credited against amounts to become due to the United
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662 States by the Contractor. With respect to overpayment, such refund or adjustment shall constitute the sole

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

664 supply provided for herein. All credits and refunds of overpayments shall be made within thirty (30) days of

665 the Contracting Officer obtaining direction as to how to credit or refund such overpayment in response to the

666 notice to the Contractor that it has finalized the accounts for the Year in which the overpayment was made.

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

668 pursuant to Article 25 of this Contract shall be adjusted to reflect the actual costs when the work has been

669 completed. If the advances exceed the actual costs incurred, the difference will be refunded to the

670 Contractor. If the actual costs exceed the Contractor's advances, the Contractor will be billed for the

671 additional costs pursuant to Article 25 of this Contract.

672 TEMPORARY REDUCTIONS--RETURN FLOWS

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

674 requirements of Federal law and (ii) the obligations of the United States under existing contracts, or renewals

675 thereof, providing for water deliveries from the Project, the Contracting Officer shall make all reasonable

676 efforts to optimize Project Water deliveries to the Contractor as provided in this Contract.

677 (b) The Contracting Officer or Operating Non-Federal Entity may temporarily

678 discontinue or reduce the quantity of Water Delivered to the Contractor as herein provided for the purposes

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

680 thereof necessary for the delivery of Project Water to the Contractor, but so far as feasible the Contracting
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681 Officer or Operating Non-Federal Entity will give the Contractor due notice in advance of such temporary

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

683 That the United States shall use its best efforts to avoid any discontinuance or reduction in such service. Upon

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

685 States will, if possible, deliver the quantity of Project Water which would have been delivered hereunder in

686 the absence of such discontinuance or reduction.

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

688 Water Delivered to the Contractor hereunder which escapes or is discharged beyond the Contractor's

689 Service Area; Provided, That this shall not be construed as claiming for the United States any right as

690 seepage or return flow to water being used pursuant to this Contract for surface irrigation or underground

691 storage either being put to reasonable and beneficial use pursuant to this Contract within the Contractor’s

692 Service Area by the Contractor or those claiming by, through, or under the Contractor. For purposes of this

693 subdivision, groundwater recharge, groundwater banking and all similar groundwater activities will be deemed

694 to be underground storage.

695 CONSTRAINTS ON THE AVAILABILITY OF WATER

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

697 guard against a Condition of Shortage in the quantity of water to be made available to the Contractor pursuant

698 to this Contract. In the event the Contracting Officer determines that a Condition of Shortage appears

699 probable, the Contracting Officer will notify the Contractor of said determination as soon as practicable.

700 (b) If there is a Condition of Shortage because of errors in physical operations of the
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701 Project, drought, other physical causes beyond the control of the Contracting Officer or actions taken by the

702 Contracting Officer to meet legal obligations then, except as provided in subdivision (a) of Article 18 of this

703 Contract, no liability shall accrue against the United States or any of its officers, agents, or employees for any

704 damage, direct or indirect, arising therefrom.

705 (c) The United States shall not execute contracts which together with this Contract, shall

706 in the aggregate provide for furnishing during the life of this Contract or any renewals hereof Class 1 Water in

707 excess of 800,000 acre-feet per Year or Class 2 Water in excess of 1,401,475 acre-feet per Year;

708 Provided, That, subject to subdivision (l) of Article 3 of this Contract, the limitation placed on Class 2 Water

709 contracts shall not prohibit the United States from entering into temporary contracts of one year or less in

710 duration for delivery of Project Water to other entities if such water is not necessary to meet the schedules as

711 may be submitted by all Friant Division 

712 long-term water service Contractors entitled to receive Class 1 Water and/or Class 2 Water under their water

713 service contracts. Nothing in this subdivision shall limit the Contracting Officer’s ability to take actions that

714 result in the availability of new water supplies to be used for Project purposes and allocating such new

715 supplies; Provided, That the Contracting Officer shall not take such actions until after consultation with the

716 Friant Division Project Contractors.

717 (d) The Contracting Officer shall not deliver any Class 2 Water pursuant to this or any

718 other contract for water service heretofore or hereafter entered into any Year unless and until the Contracting

719 Officer determines that the cumulative total quantity of Class 1 Water specified in subdivision (c) of this

720 Article will be available for delivery in said Year. If the Contracting Officer determines there is or will be a
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721 shortage in any Year in the quantity of Class 1 Water available for delivery, the Contracting Officer shall

722 apportion the available Class 1 Water among all Contractors entitled to receive such water that will be made

723 available at Friant Dam in accordance with the following:

724 (1) A determination shall be made of the total quantity of Class 1 Water at Friant

725 Dam which is available for meeting Class 1 Water contractual commitments, the amount so determined being

726 herein referred to as the available supply.

727 (2) The total available Class 1 supply shall be divided by the Class 1 Water

728 contractual commitments, the quotient thus obtained being herein referred to as the Class 1 apportionment

729 coefficient.

730 (3) The total quantity of Class 1 Water under Article 3 of this Contract shall be

731 multiplied by the Class 1 apportionment coefficient and the result shall be the quantity of Class 1 Water

732 required to be delivered by the Contracting Officer to the Contractor for the respective Year, but in no event

733 shall such amount exceed the total quantity of Class 1 Water specified in subdivision (a) of Article 3 of this

734 Contract.

735 (e) If the Contracting Officer determines there is less than the quantity of Class 2 Water

736 which the Contractor otherwise would be entitled to receive pursuant to Article 3 of this Contract, the quantity

737 of Class 2 Water which shall be furnished to the Contractor by the Contracting Officer will be determined in

738 the manner set forth in paragraphs (1), (2), and (3), of subdivision (d) of this Article substituting the term

739 "Class 2" for the term "Class 1."
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740 (f) In the event that in any Year there is made available to the Contractor, by reason of

741 any shortage or apportionment as provided in subdivisions (a), (d) or (e) of this Article, or any discontinuance

742 or reduction of service as set forth in subdivision (a) of Article 11 of this Contract, less than the quantity of

743 water which the Contractor otherwise would be entitled to receive hereunder, there shall be made an

744 adjustment on account of the amounts already paid to the Contracting Officer by the Contractor for Class 1

745 Water and Class 2 Water for said Year in accordance with Article 10 of this Contract.

746 UNAVOIDABLE GROUNDWATER PERCOLATION

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

748 Water to Excess Lands or Ineligible Lands within the meaning of this Contract if such lands 
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749 are irrigated with groundwater that reaches the underground strata as an unavoidable result of the delivery of

750 Irrigation Water by the Contractor to Eligible Lands.

751 RULES AND REGULATIONS

752 14. (a) The parties agree that the delivery of Irrigation Water or use of Federal facilities

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

754 Reform Act of 1982 (43 U.S.C.390aa et seq.), as amended and supplemented, and the rules and regulations

755 promulgated by the Secretary of the Interior under Federal Reclamation law.

756 (b) The terms of this Contract are subject to any enforceable order, judgment and/or

757 settlement in NRDC v. Patterson, No. CIVS 88-1658-LKK-EM and shall be timely modified as necessary

758 to effectuate or facilitate any final order, judgment or settlement in said litigation.

759 (c) The parties acknowledge that, as of the effective date of this Contract, active

760 settlement discussions are underway in NRDC v. Patterson between Friant Division water service

761 contractors, representatives of the Contracting Officer, and the plaintiffs in NRDC v. Patterson. The mutual

762 goals of the parties to those discussions are (i) to expeditiously evaluate and implement, on a mutually

763 acceptable basis, instream and related measures that will restore ecological functions and hydrologic and

764 geomorphologic processes of the San Joaquin River below Friant Dam to a level that restores and maintains

765 fish populations in good condition, including but not limited to naturally-reproducing, self-sustaining

766 populations of chinook salmon and (ii) to accomplish these restoration goals while not adversely impacting the

767 overall sufficiency, reliability and cost of water supplies to Friant Division water users. The Contractor has

768 been actively participating, and intends to continue to participate in such settlement discussions. Except as

769 provided in this Contract, this Contract does 
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770 not add to the obligations of the parties, if any, relating to the San Joaquin River. This Contract does not limit

771 or detract from the obligations of the parties, if any, relating to the San Joaquin River. 

772 WATER AND AIR POLLUTION CONTROL

773 15. The Contractor, in carrying out this Contract, shall comply with all applicable water and air

774 pollution laws and regulations of the United States and the State of California, and shall obtain all required

775 permits or licenses from the appropriate Federal, State, or local authorities.

776 QUALITY OF WATER

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

778 Contract shall be operated and maintained to enable the United States to deliver Project Water to the

779 Contractor in accordance with the water quality standards specified in subsection 2(b) of the Act of August

780 26, 1937 (50 Stat. 865), as added by Section 101 of the Act of October 27, 1986 (100 Stat. 3050) or other

781 existing Federal laws. The United States is under no obligation to construct or furnish water treatment

782 facilities to maintain or to improve the quality of Water Delivered to the Contractor pursuant to this Contract. 

783 The United States does not warrant the quality of Water Delivered to the Contractor pursuant to this

784 Contract.

785 (b) The Operation and Maintenance of Project facilities shall be performed in such

786 manner as is practicable to maintain the quality of raw water made available through such facilities at the

787 highest level reasonably attainable as determined by the Contracting Officer. The Contractor shall be

788 responsible for compliance with all State and Federal water quality standards applicable to surface and

789 subsurface agricultural drainage discharges generated through the use of Federal or Contractor facilities or

790 Project Water provided by the Contractor within the Contractor's Service Area.
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791 WATER ACQUIRED BY THE Contractor

792 OTHER THAN FROM THE UNITED STATES

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

794 from the United States and Irrigation Water furnished pursuant to the terms of this Contract may be

795 simultaneously transported through the same distribution facilities of the Contractor subject to the following: (i)

796 if the facilities utilized for commingling Irrigation Water and non-project water were constructed without funds

797 made available pursuant to Federal Reclamation law, the provisions of Federal Reclamation law will be

798 applicable only to the Landholders of lands which receive Irrigation Water; (ii) the eligibility of land to receive

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

800 Limitation Rules and Regulations (43 CFR 

801 Part 426); (iii) the water requirements of Eligible Lands within the Contractor's Service Area can be

802 established and the quantity of Irrigation Water to be utilized is less than or equal to the quantity necessary to

803 irrigate such Eligible Lands. The Contractor and the Contracting Officer concur that, as of the effective date

804 of this Contract, the Contractor has a distribution system that was constructed without the use of federally

805 financed funds. The use of this distribution system is not subject to the provisions of this subdivision of this

806 Article.

807 (b) Water or water rights now owned or hereafter acquired by the Contractor, other than

808 from the United States or adverse to the Project or its Contractors (i.e., non-project water), may be stored,

809 conveyed and/or diverted through Project facilities, subject to the completion of appropriate environmental

810 documentation, with the approval of the Contracting Officer and the 
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811 execution of any contract determined by the Contracting Officer to be necessary, consistent with the following

812 provisions:

813 (1) The Contractor may introduce non-project water into Project facilities and

814 deliver said water to lands within the Contractor’s Service Area, including Ineligible Lands, subject to

815 payment to the United States and/or to any applicable Operating Non-Federal Entity of an appropriate rate as

816 determined by the CVP Rate setting Policy and the RRA, each as amended, modified or superseded from

817 time to time. In addition, if electrical power is required to pump 

818 non-project water through the facilities, the Contractor shall be responsible for obtaining the necessary power

819 and paying the necessary charges therefor.

820 (2) Delivery of such non-project water in and through Project facilities shall only

821 be allowed to the extent such deliveries do not: (i) interfere with other Project purposes as determined by the

822 Contracting Officer; (ii) reduce the quantity or quality of water available to other Project water service

823 Contractors; (iii) interfere with the delivery of contractual water entitlements to any other Project water

824 service Contractors; or (iv) interfere with the physical maintenance of the Project facilities.

825 (3) Neither the United States nor the Operating Non-Federal Entity shall be

826 responsible for control, care or distribution of the non-project water before it is introduced into or after it is

827 delivered from the Project facilities. The Contractor hereby releases and agrees to defend and indemnify the

828 United States and the Operating Non-Federal Entity, and their respective officers, agents, and employees,

829 from any claim for damage to persons or property, direct or indirect, resulting from Contractor’s diversion or

830 extraction of non-project water from any source.
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831 (4) Diversion of such non-project water into Project facilities shall be consistent

832 with all applicable laws, and if involving groundwater, consistent with any groundwater management plan for

833 the area from which it was extracted.

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

835 United States and the Contractor shall share priority to utilize the remaining capacity of the facilities declared

836 to be available by the Contracting Officer for conveyance and transportation of non-project water prior to any

837 such remaining capacity being made available to non-Project Contractors.

838 OPINIONS AND DETERMINATIONS

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

840 determination of either party to this Contract, said terms shall not be construed as permitting such action to be

841 predicated upon arbitrary, capricious, or unreasonable opinions or determinations. Both parties,

842 notwithstanding any other provisions of this Contract, expressly reserve the right to seek relief from and

843 appropriate adjustment for any such arbitrary, capricious, or unreasonable opinion or determination. Each

844 opinion or determination by either party shall be provided in a timely manner. Nothing in subdivision (a) of

845 Article 18 of this Contract is intended to or shall affect or alter the standard of judicial review applicable under

846 federal law to any opinion or determination implementing a specific provision of federal law embodied in

847 statute or regulation. 

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

849 administer this Contract that are consistent with the provisions of this Contract, the laws of the United States

850 and of the State of California, and the rules and regulations promulgated by the Secretary of the Interior. 
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851 Such determinations shall be made in consultation with the Contractor to the extent reasonably practicable.

852 COORDINATION AND COOPERATION

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

854 Contractor shall communicate, coordinate, and cooperate with each other, and with other affected Project

855 Contractors, in order to improve the operation and management of the Project. The communication,

856 coordination, and cooperation regarding operations and management shall include, but not be limited to, any

857 action which will or may materially affect the quantity or quality of Project Water supply, the allocation of

858 Project Water supply, and Project financial matters including, but not limited to, budget issues. The

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

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

861 determinations to be made by the respective party.

862 (b) Within one-hundred twenty (120) days following the effective date of this Contract,

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

864 interested Project Contractors to develop a mutually agreeable, written Project-wide process, which may be

865 amended as necessary separate and apart from this Contract. The goal of this process shall be to provide, to

866 the extent practicable, the means of mutual communication and interaction regarding significant decisions

867 concerning Project operation and management on a 

868 real-time basis.

869 (c) In light of the factors referred to in subdivision (b) of Article 3 of this Contract, it is the

870 intent of the Secretary to improve water supply reliability. To carry out this intent:
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871 (1) The Contracting Officer will, at the request of the Contractor, assist in the

872 development of integrated resource management plans for the Contractor. Further, the Contracting Officer

873 will, as appropriate, seek authorizations for implementation of partnerships to improve water supply, water

874 quality, and reliability.

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

876 implementation and authorization in coordination with Project Contractors to improve the water supply, water

877 quality, and reliability of the Project for all Project purposes.

878 (3) The Secretary will coordinate with Project Contractors and the State of

879 California to seek improved water resource management.

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

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

882 (5) The Contracting Officer shall periodically, but not less than annually, hold

883 division level meetings to discuss Project operations, division level water management activities, and other

884 issues as appropriate.

885 (d) Without limiting the contractual obligations of the Contracting Officer hereunder,

886 nothing in this Contract shall be construed to limit or constrain the Contracting Officer’s ability to

887 communicate, coordinate, and cooperate with the Contractor or other interested stakeholders or to make

888 decisions in a timely fashion as needed to protect health, safety, physical integrity of structures or facilities, or

889 the Contracting Officer’s ability to comply with applicable laws.

890 CHARGES FOR DELINQUENT PAYMENTS

891 20. (a) The Contractor shall be subject to interest, administrative and penalty charges on
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892 delinquent installments or payments. When a payment is not received by the due date, the Contractor shall

893 pay an interest charge for each day the payment is delinquent beyond the due date. When a payment

894 becomes sixty (60) days delinquent, the Contractor shall pay an administrative charge to cover additional

895 costs of billing and processing the delinquent payment. When a payment is delinquent ninety (90) days or

896 more, the Contractor shall pay an additional penalty charge of six (6%) percent per year for each day the

897 payment is delinquent beyond the due date. Further, the Contractor shall pay any fees incurred for debt

898 collection services associated with a delinquent payment.

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

900 Federal Register by the Department of the Treasury for application to overdue payments, or the interest rate

901 of one-half of one (0.5%) percent per month prescribed by Section 6 of the Reclamation Project Act of 1939

902 (Public Law 76-260). The interest charge rate shall be determined as of the due date and remain fixed for the

903 duration of the delinquent period.

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

905 be applied, first to the penalty, second to the administrative charges, third to the accrued interest, and finally to

906 the overdue payment.

907 EQUAL OPPORTUNITY

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

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

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

911 action to ensure that applicants are employed, and that employees are treated during employment, without

912 regard to their race, color, religion, sex, or national origin. Such action shall include, but not be limited to, the

913 following: Employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or

914 termination, rates of payment or other forms of compensation; and selection for training, including

915 apprenticeship. The Contractor agrees to post in conspicuous places, available to employees and applicants

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

917 nondiscrimination clause.

918 (b) The Contractor will, in all solicitations or advertisements for employees placed by or

919 on behalf of the Contractor, state that all qualified applicants will receive consideration for employment

920 without discrimination because of race, color, religion, sex, or national origin.

921 (c) The Contractor will send to each labor union or representative of workers with which

922 it has a collective bargaining agreement or other contract or understanding, a notice, to be provided by the

923 Contracting Officer, advising the said labor union or workers' representative of the Contractor's commitments
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924 under Section 202 of Executive Order 11246 of September 24, 1965, and shall post copies of the notice in

925 conspicuous places available to employees and applicants for employment.

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

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

928 Secretary of Labor. 

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

930 Executive Order and by the rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and

931 will permit access to its books, records, and accounts by the Contracting Officer and the Secretary of Labor

932 for purposes of investigation to ascertain compliance with such rules, regulations, and orders.

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

934 this Contract or with any of the said rules, regulations, or orders, this Contract may be canceled, terminated,

935 or suspended, in whole or in part, and the Contractor may be declared ineligible for further Government

936 contracts in accordance with procedures authorized in said amended Executive Order, and such other

937 sanctions may be imposed and remedies invoked as provided in said Executive Order, or by rule, regulation,

938 or order of the Secretary of Labor, or as otherwise provided by law.

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

940 subcontract or purchase order unless exempted by the rules, regulations, or orders of the Secretary of Labor

941 issued pursuant to Section 204 of said amended Executive Order, so that such provisions will be binding upon

942 each subcontractor or vendor. The Contractor will take such action with respect to any subcontract or

943 purchase order as may be directed by the Secretary of Labor as a means of enforcing such provisions,

944 including sanctions for noncompliance: Provided, however, That in the event the Contractor becomes involved

945 in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction, the Contractor

946 may request the United States to enter into such litigation to protect the interests of the United States.

947 GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT

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

949 is a general obligation of the Contractor notwithstanding the manner in which the obligation may be distributed

950 among the Contractor's water users and notwithstanding the default of individual water users in their

951 obligations to the Contractor.

952 (b) The payment of charges becoming due hereunder is a condition precedent to receiving

953 benefits under this Contract. The United States shall not make water available to the Contractor through

954 Project facilities during any period in which the Contractor may be in arrears in the advance payment of water

955 rates due the United States. The Contractor shall not furnish water made available pursuant to this Contract
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956 for lands or parties which are in arrears in the advance payment of water rates levied or established by the

957 Contractor.

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

959 to require advance payment for water rates which it levies.

960 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

961 23. (a) The Contractor shall comply with Title VI of the Civil Rights Act of 1964 (42 U.S.C.

962 2000d), Section 504 of the Rehabilitation Act of 1975 (P.L. 93-112, as amended), the Age Discrimination

963 Act of 1975 (42 U.S.C. 6101, et seq.) and any other applicable civil rights laws, as well as with their

964 respective implementing regulations and guidelines imposed by the U.S. Department of the Interior and/or

965 Bureau of Reclamation.

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

967 race, color, national origin, handicap, or age, be excluded from participation in, be denied the benefits of, or

968 be otherwise subjected to discrimination under any program or activity receiving financial assistance from the

969 Bureau of Reclamation. By executing this Contract, the Contractor agrees to immediately take any measures

970 necessary to implement this obligation, including permitting officials of the United States to inspect premises,

971 programs, and documents.

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

973 obtaining any and all Federal grants, loans, contracts, property discounts, or other Federal financial assistance

974 extended after the date hereof to the Contractor by the Bureau of Reclamation, including installment payments

975 after such date on account of arrangements for Federal financial assistance which were approved before such

976 date. The Contractor recognizes and agrees that such Federal assistance will be extended in reliance on the

977 representations and agreements made in this Article, and that the United States reserves the right to seek

978 judicial enforcement thereof.

979 PRIVACY ACT COMPLIANCE

980 24. (a) The Contractor shall comply with the Privacy Act of 1974 (5 U.S.C. 552a) (the Act)

981 and the Department of the Interior rules and regulations under the Act (43 CFR 2.45 et seq.) in maintaining

982 Landholder acreage certification and reporting records, required to be submitted to the Contractor for

983 compliance with Sections 206 and 228 of the Reclamation Reform Act of 1982 (96 Stat. 1266), and pursuant

984 to 43 CFR 426.18.

985 (b) With respect to the application and administration of the criminal penalty provisions of
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986 the Act (5 U.S.C. 552a(i)), the Contractor and the Contractor's employees responsible for maintaining the

987 certification and reporting records referenced in (a) above are considered to be employees of the Department

988 of the Interior. See 5 U.S.C. 552a(m).

989 (c) The Contracting Officer or a designated representative shall provide the Contractor

990 with current copies of the Interior Department Privacy Act regulations and the Bureau of Reclamation Federal

991 Register Privacy Act System of Records Notice (Acreage Limitation--Interior, Reclamation-31) which

992 govern the maintenance, safeguarding, and disclosure of information contained in the Landholder's certification

993 and reporting records.

994 (d) The Contracting Officer shall designate a full-time employee of the Bureau of

995 Reclamation to be the System Manager who shall be responsible for making decisions on denials pursuant to

996 43 CFR 2.61 and 2.64 amendment requests pursuant to 43 CFR 2.72. The Contractor is authorized to grant

997 requests by individuals for access to their own records.

998 (e) The Contractor shall forward promptly to the System Manager each proposed denial

999 of access under 43 CFR 2.64; and each request for amendment of records filed under 43 CFR 2.71; notify

1000 the requester accordingly of such referral; and provide the System Manager with information and records

1001 necessary to prepare an appropriate response to the requester. These requirements do not apply to

1002 individuals seeking access to their own certification and reporting forms filed with the Contractor pursuant to

1003 43 CFR 426.18, unless the requester elects to cite the Privacy Act as a basis for the request.

1004 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

1005 25. In addition to all other payments to be made by the Contractor pursuant to this Contract, the

1006 Contractor shall pay to the United States, within sixty (60) days after receipt of a bill and detailed statement

1007 submitted by the Contracting Officer to the Contractor for such specific items of direct cost incurred by the

1008 United States for work requested by the Contractor associated with this Contract plus indirect costs in

1009 accordance with applicable Bureau of Reclamation policies and procedures. All such amounts referred to in

1010 this Article shall not exceed the amount agreed to in writing in advance by the Contractor. This Article shall

1011 not apply to costs for routine contract administration.

1012 WATER CONSERVATION
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1013 26. (a) During the term of this Contract, the Contractor shall comply with all applicable

1014 requirements imposed on it by Section 210 of the RRA, regulations duly promulgated and adopted

1015 thereunder, and any other applicable water conservation guidelines as they are duly promulgated, adopted

1016 and amended from time to time: Provided, That the Contractor shall have not less than eighteen (18) months

1017 to comply with any revisions in any such applicable regulations or water conservation guidelines.

1018 (b) Omitted. 

1019 (c) The Contractor shall submit to the Contracting Officer a report on the status of its

1020 implementation of the water conservation plan on the reporting dates specified in the then existing

1021 conservation and efficiency criteria established under Federal law. 

1022 (d) Omitted.

1023 (e) If the Contractor is engaged in direct groundwater recharge, such activity shall be

1024 described in the Contractor’s water conservation plan.

1025 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

1026 27. Except as specifically provided in Article 17 of this Contract, the provisions of this Contract

1027 shall not be applicable to or affect non-project water or water rights now owned or hereafter acquired by the

1028 Contractor or any user of such water within the Contractor's Service Area. Any such water shall not be

1029 considered Project Water under this Contract. In addition, this Contract shall not be construed as limiting or

1030 curtailing any rights which the Contractor or any water user within the Contractor's Service Area acquires or

1031 has available under any other contract pursuant to Federal Reclamation law.

1032 OPERATION AND MAINTENANCE BY NON-FEDERAL ENTITY

1033 28. (a) The Operation and Maintenance of a portion of the Project facilities which serve the
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1034 Contractor, and responsibility for funding a portion of the costs of such Operation and Maintenance, have

1035 been transferred to the Operating Non-Federal Entity by separate agreement between the United States and

1036 the Operating Non-Federal Entity. That separate agreement shall not interfere with or affect the rights or

1037 obligations of the Contractor or the United States hereunder.

1038 (b) The Contracting Officer has previously notified the Contractor in writing that the

1039 Operation and Maintenance of a portion of the Project facilities which serve the Contractor has been

1040 transferred to the Operating Non-Federal Entity, and therefore, the Contractor shall pay directly to the

1041 Operating Non-Federal Entity, or to any successor approved by the Contracting Officer under the terms and

1042 conditions of the separate agreement between the United States and the Operating 

1043 Non-Federal Entity described in subdivision (a) of this Article, all rates, charges or assessments of any kind,

1044 including any assessment for reserve funds, which the Operating Non-Federal Entity or such successor

1045 determines, sets or establishes for (i) the Operation and Maintenance of the portion of the Project facilities

1046 operated and maintained by the Operating Non-Federal Entity or such successor, or (ii) the Friant Division’s

1047 share of the operation, maintenance and replacement costs for physical works and appurtenances associated

1048 with the Tracy Pumping Plant, the Delta-Mendota Canal, the O'Neill Pumping/Generating Plant, the federal

1049 share of the O'Neill Forebay, the Mendota Pool, and the federal share of San Luis Unit joint use conveyance

1050 and conveyance pumping facilities. Such direct payments to the Operating Non-Federal Entity or such

1051 successor shall not relieve the Contractor of its obligation to pay directly to the United States the Contractor’s

1052 share of the Project Rates, Charges, and Tiered Pricing Components except to the extent the Operating Non1053 Federal Entity collects payments on behalf of the United States in accordance with the separate agreement
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1054 identified in subdivision (a) of this Article.

1055 (c) For so long as the Operation and Maintenance of any portion of the Project facilities

1056 serving the Contractor is performed by the Operating Non-Federal Entity, or any successor thereto, the

1057 Contracting Officer shall adjust those components of the Rates for Water Delivered under this Contract

1058 representing the cost associated with the activity being performed by the Operating Non-Federal Entity or its

1059 successor.

1060 (d) In the event the Operation and Maintenance of the Project facilities operated and

1061 maintained by the Operating Non-Federal Entity is re-assumed by the United States during the term of this

1062 Contract, the Contracting Officer shall so notify the Contractor, in writing, and present to the Contractor a

1063 revised Exhibit “B” which shall include the portion of the Rates to be paid by the Contractor for Project

1064 Water under this Contract representing the Operation and Maintenance costs of the portion of such Project

1065 facilities which have been re-assumed. The Contractor shall, thereafter, in the absence of written notification

1066 from the Contracting Officer to the contrary, pay the Rates, Charges, and Tiered Pricing Component(s)

1067 specified in the revised Exhibit “B” directly to the United States in compliance with Article 7 of this Contract.

1068 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

1069 29. The expenditure or advance of any money or the performance of any obligation of the United

1070 States under this Contract shall be contingent upon appropriation or allotment of funds. Absence of

1071 appropriation or allotment of funds shall not relieve the Contractor from any obligations under this Contract. 

1072 No liability shall accrue to the United States in case funds are not appropriated or allotted.

1073 BOOKS, RECORDS, AND REPORTS

1074 30. (a) The Contractor shall establish and maintain accounts and other books and records

1075 pertaining to administration of the terms and conditions of this Contract, including: the Contractor's financial
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1076 transactions, water supply data, and Project land and right-of-way agreements; the water users' land-use

1077 (crop census), land ownership, land-leasing and water use data; and other matters that the Contracting Officer

1078 may require. Reports thereon shall be furnished to the Contracting Officer in such form and on such date or

1079 dates as the Contracting Officer may require. Subject to applicable Federal laws and regulations, each party

1080 to this Contract shall have the right during office hours to examine and make copies of the other party's books

1081 and records relating to matters covered by this Contract.

1082 (b) Notwithstanding the provisions of subdivision (a) of this Article, no books, records, or

1083 other information shall be requested from the Contractor by the Contracting Officer unless such books,

1084 records, or information are reasonably related to the administration or performance of this Contract. Any

1085 such request shall allow the Contractor a reasonable period of time within which to provide the requested

1086 books, records, or information.

1087 (c) At such time as the Contractor provides information to the Contracting Officer

1088 pursuant to subdivision (a) of this Article, a copy of such information shall be provided to the Operating Non1089 Federal Entity.

1090 ASSIGNMENT LIMITED--SUCCESSORS AND ASSIGNS OBLIGATED

1091 31. (a) The provisions of this Contract shall apply to and bind the successors and assigns of

1092 the parties hereto, but no assignment or transfer of this Contract or any right or interest therein shall be valid

1093 until approved in writing by the Contracting Officer.

1094 (b) The assignment of any right or interest in this Contract by either party shall not

1095 interfere with the rights or obligations of the other party to this Contract absent the written concurrence of said

1096 other party.

1097 (c) The Contracting Officer shall not unreasonably condition or withhold approval of any

1098 proposed assignment.
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1099 SEVERABILITY

1100 32. In the event that a person or entity who is neither (i) a party to a Project contract, nor (ii) a

1101 person or entity that receives Project Water from a party to a Project contract, nor (iii) an association or other

1102 form of organization whose primary function is to represent parties to Project contracts, brings an action in a

1103 court of competent jurisdiction challenging the legality or enforceability of a provision included in this Contract

1104 and said person, entity, association, or organization obtains a final court decision holding that such provision is

1105 legally invalid or unenforceable and the Contractor has not intervened in that lawsuit in support of the

1106 plaintiff(s), the parties to this Contract shall use their best efforts to (i) within thirty (30) days of the date of

1107 such final court decision identify by mutual agreement the provisions in this Contract which must be revised

1108 and (ii) within three (3) months thereafter promptly agree on the appropriate revision(s). The time periods

1109 specified above may be extended by mutual agreement of the parties. Pending the completion of the actions

1110 designated above, to the extent it can do so without violating any applicable provisions of law, the United

1111 States shall continue to make the quantities of Project Water specified in this Contract available to the

1112 Contractor pursuant to the provisions of this Contract which were not found to be legally invalid or

1113 unenforceable in the final court decision.

1114 RESOLUTION OF DISPUTES

1115 33. Should any dispute arise concerning any provisions of this Contract, or the parties’ rights and

1116 obligations thereunder, the parties shall meet and confer in an attempt to resolve the dispute. Prior to the

1117 Contractor commencing any legal action, or the Contracting Officer referring any matter to Department of

1118 Justice, the party shall provide to the other party thirty (30) days’ written notice of the intent to take such
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1119 action; Provided, That such notice shall not be required where a delay in commencing an action would

1120 prejudice the interests of the party that intends to file suit. During the thirty (30) -day notice period, the

1121 Contractor and the Contracting Officer shall meet and confer in an attempt to resolve the dispute. Except as

1122 specifically provided, nothing herein is intended to waive or abridge any right or remedy that the Contractor or

1123 the United States may have.

1124 OFFICIALS NOT TO BENEFIT

1125 34. No Member of or Delegate to Congress, Resident Commissioner, or official of the

1126 Contractor shall benefit from this Contract other than as a water user or landowner in the same manner as

1127 other water users or landowners.

1128 CHANGES IN CONTRACTOR’S SERVICE AREA

1129 35. (a) While this Contract is in effect, no change may be made in the Contractor's Service

1130 Area or boundaries, by inclusion or exclusion of lands, dissolution, consolidation, merger, or otherwise,

1131 except upon the Contracting Officer's written consent.

1132 (b) Within thirty (30) days of receipt of a request for such a change, the Contracting

1133 Officer will notify the Contractor of any additional information required by the Contracting Officer for

1134 processing said request, and both parties will meet to establish a mutually agreeable schedule for timely

1135 completion of the process. Such process will analyze whether the proposed change is likely to: (i) result in the

1136 use of Project Water contrary to the terms of this Contract; (ii) impair the ability of the Contractor to pay for

1137 Project Water furnished under this Contract or to pay for any Federally-constructed facilities for which the

1138 Contractor is responsible; and (iii) have an impact on any Project Water rights applications, permits, or

1139 licenses. In addition, the Contracting Officer shall comply with the National Environmental Policy Act and the

1140 Endangered 
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1141 Species Act. The Contractor will be responsible for all costs incurred by the Contracting Officer in this

1142 process, and such costs will be paid in accordance with Article 25 of this Contract.

1143 FEDERAL LAWS

1144 36. By entering into this Contract, the Contractor does not waive its rights to contest the validity

1145 or application in connection with the performance of the terms and conditions of this Contract of any Federal

1146 law or regulation; Provided, That the Contractor agrees to comply with the terms and conditions of this

1147 Contract unless and until relief from application of such Federal law or regulation to the implementing

1148 provision of the Contract is granted by a court of competent jurisdiction.

1149 NOTICES

1150 37. Any notice, demand, or request authorized or required by this Contract shall be deemed to

1151 have been given, on behalf of the Contractor, when mailed, postage prepaid, or delivered to the Area

1152 Manager, South-Central California Area Office, 1243 “N” Street, Fresno, California 93721, and on behalf of

1153 the United States, when mailed, postage prepaid, or delivered to the Board of Directors of the International

1154 Water District, 9010 East Tollhouse Road, Clovis, California 93613. The designation of the addressee or

1155 the address may be changed by notice given in the same manner as provided in this Article for other notices.
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1156 CONFIRMATION OF CONTRACT

1157 38. The Contractor, after the execution of this Contract, shall promptly seek to secure a decree of

1158 a court of competent jurisdiction of the State of California, confirming the execution of this Contract. The

1159 Contractor shall furnish the United States a certified copy of the final decree, the validation proceedings, and

1160 all pertinent supporting records of the court approving and confirming this Contract, and decreeing and

1161 adjudging it to be lawful, valid, and binding on the Contractor.

1162 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of the day and 

1163 year first above written.

THE UNITED STATES OF AMERICA

By: /s/ William H. Luce, Jr. 

Acting Regional Director, Mid-Pacific Region

Bureau of Reclamation

(SEAL) INTERNATIONAL WATER DISTRICT

By: /s/ Shawn S. Stevenson 

President of the Board of Directors

Attest:

By: /s/ Leola R. Harlan 

Secretary of the Board of Directors

(I:Inte.wpd)
Contract No. 14-06-200-585A-LTR1

EXHIBIT A

[Map or Description of Service Area]
Contract No. 14-06-200-585A-LTR1

EXHIBIT B

[Initial Rates and Charges]