Irrigation and M&I

Contract No.

14-06-200-229A-LTR1

UNITED STATES

DEPARTMENT OF THE INTERIOR

BUREAU OF RECLAMATION

Central Valley Project, California

LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES

AND

ARVIN-EDISON WATER STORAGE 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 ..........................................................................19-22

5 Point of Diversion and Responsibility for Distribution of Water .................22-24

6 Measurement of Water Within the Service Area .........................................24-26

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

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

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

10 Application of Payments and Adjustments ..................................................34-35

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

12 Constraints on the Availability of Water ......................................................36-39

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

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

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

16 Quality of Water..............................................................................................40-41

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

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

19 Coordination and Cooperation ....................................................................44-46

20 Charges for Delinquent Payments .....................................................................46

21 Equal Opportunity.........................................................................................46-48

22 General Obligation--Benefits Conditioned Upon Payment ...............................48
23 Compliance With Civil Rights Laws and Regulations .................................48-49

Article No. Title Page No.

24 Privacy Act Compliance ....................................................................................49

25 Contractor to Pay Certain Miscellaneous Costs ...........................................49-50

26 Water Conservation ......................................................................................50-51

27 Existing or Acquired Water or Water Rights ...............................................51-52

28 Operation and Maintenance by Non-Federal Entity .....................................52-53

29 Contingent on Appropriation or Allotment of Funds ...................................53-54

30 Books, Records, and Reports ............................................................................54

31 Assignment Limited--Successors and Assigns Obligated ...........................54-55

32 Severability ........................................................................................................55

33 Resolution of Disputes .................................................................................55-56

34 Officials Not to Benefit .....................................................................................56

35 Changes in Contractor's Service Area ...........................................................56-57

36 Federal Laws......................................................................................................57

37 Notices...............................................................................................................57

38 Confirmation of Contract ..................................................................................57

Signature Page

Exhibit A

Exhibit B
Contract No. 14-06-200-229A-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 ARVIN-EDISON WATER STORAGE 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 ARVIN-EDISON WATER STORAGE DISTRICT, hereinafter referred to as the Contractor,

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

19 with its 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. 14-06-200-229A, as amended, which established terms for the delivery to the Contractor of Project

43 Water from the Friant Division from August 30, 1962, 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). 14-06-200-229A-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

114 Year 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

119 this Contract;

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

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

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

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

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

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

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

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

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

130 204 of the RRA, other than those lands exempt from acreage limitation under Federal Reclamation law;

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

132 202(3) of the RRA, whichever is applicable;

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

134 delivered 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
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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;

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

152 the 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

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

155 applicable rate for the O&M of such Project facilities. Interest rates used in the calculation of the M&I Full

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

157 RRA;

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

159 control, operation, repair, replacement (other than Capital replacement), and maintenance of Project

160 facilities;

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

162 Non-Federal entity which has the obligation to operate and maintain all or a portion of the Friant Division
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163 facilities pursuant to an agreement with the United States, and which may have funding obligations with

164 respect thereto;

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

166 managed by the Department of the Interior, Bureau of Reclamation;

167 (t) “Project Contractors” shall mean all parties who have water service contracts for

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

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

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

171 terms and conditions of water rights acquired pursuant to California law;

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

173 accordance with the then current applicable water ratesetting policies for the Project, as described in

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

175 (w) Omitted;

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

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

178 Department of the Interior;

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

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

181 (y2) “Uncontrolled Season” is any time during the Year the Contracting Officer

182 determines that a need exists to evacuate water from Millerton Lake in order to prevent or minimize spill or
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183 to meet flood control criteria, taking into consideration, among other things, anticipated upstream reservoir

184 operations and the most probable forecast of snowmelt and runoff projections for the upper San Joaquin

185 River;

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

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

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

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

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

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

192 which times and quantities for delivery have been established by the Contractor and Contracting Officer,

193 pursuant to subdivision (b) of Article 4 of this Contract; and

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

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

196 TERM OF CONTRACT 

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

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

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

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

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

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

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

205 agreeable to the parties hereto, and upon a determination by the Contracting Officer that at the time of

206 contract renewal the conditions set forth in subdivision (b)(2) of this Article are met, and subject to Federal

207 and State law, this Contract, insofar as it pertains to the furnishing of Irrigation Water to the Contractor, shall

208 be renewed for a period of twenty-five (25) years.

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

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

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

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

213 and efficiency program based on the Contractor’s water conservation plan as required by Article 26 of this

214 Contract; (iii) the Contractor is operating and maintaining all water measuring devices and implementing all

215 water measurement methods as approved by the Contracting Officer pursuant to Article 6 of this Contract;

216 (iv) the Contractor has reasonably and beneficially used the Project Water supplies made available to it and,

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

218 beneficial use the quantity of Project Water to be made available to it pursuant to such renewal; (v) the

219 Contractor is complying with all terms and conditions of this Contract and all legal obligations of the

220 Contractor, if any, set forth in an enforceable court order, final judgment and/or settlement relating to

221 restoration of the San Joaquin River; and (vi) the Contractor has the physical and legal ability to deliver

222 Project Water.
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223 (3) The terms and conditions of the renewal contract described in subdivision

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

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

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

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

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

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

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

231 circumstances of the region served by the Contractor.

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

233 Contractor, shall be renewed for a period of twenty-five (25) years and thereafter shall be renewed for

234 successive periods of up to forty (40) years each, which periods shall be consistent with the then-existing

235 Reclamation-wide policy, under terms and conditions mutually agreeable to the parties and consistent with

236 Federal and State law. The present Reclamation-wide policy, dated March 20, 2000, provides that the

237 term of such contracts shall be no more than twenty-five (25) years each, subject to a variance to allow a

238 longer term in appropriate circumstances. The Contractor shall be afforded the opportunity to comment to

239 the Contracting Officer on the proposed adoption and application of any revised Reclamation-wide policy

240 applicable to the delivery of Project M&I Water that would affect the term of any subsequent renewal

241 contract with the Contractor for the furnishing of M&I Water.

242 (d) The Contracting Officer anticipates that by December 31, 2024, all authorized
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243 Project construction expected to occur will have occurred, and on that basis the Contracting Officer agrees

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

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

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

247 subsection (c)(1) and (d) of Section 9, of the Reclamation Project Act of 1939, subject to applicable

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

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

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

251 law, the remaining amount of construction costs assignable for ultimate return by the Contractor can

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

253 If the remaining amount of costs that are properly assignable to the Contractor cannot be determined by

254 December 31, 2024, the Contracting Officer shall notify the Contractor, and provide the reason(s) why such

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

256 soon thereafter as possible so as to permit, upon request of the Contractor and satisfaction of the conditions

257 set out above, conversion to a contract under said subsection 9(c)(1) and (d). In the event such

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

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

260 shall incorporate in any subsequent renewal contract as described in Articles 2(b) and (c) a provision that

261 carries forth in substantially identical terms the provisions of this Article 2(d). In the event the Contracting

262 Officer is able to make a determination of the remaining amount of costs that are properly assignable to the
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263 Contractor before December 31, 2024, the Contracting Officer shall do so at the earliest time he/she has

264 such ability.

265 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE CONTRACTOR

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

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

268 Contracting Officer shall make available for delivery to the Contractor 40,000 acre-feet of Class 1 Water

269 and 311,675 acre-feet of Class 2 Water, both for irrigation and M&I purposes. The quantity of Water

270 Delivered to the Contractor in accordance with this subdivision shall be scheduled and paid for pursuant to

271 the provisions of Articles 4 and 7 of this Contract.

272 (b) Omitted.

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

274 requirements.

275 (d) The Contractor shall make reasonable and beneficial use of all Project Water or

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

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

278 furnished pursuant to this Contract conducted within the Contractor’s Service Area which are consistent

279 with applicable State law and result in use consistent with Reclamation law will be allowed; Provided, That

280 any direct recharge program(s) is (are) described in the Contractor’s Water Conservation Plan submitted

281 pursuant to Article 26 of this Contract; Provided, further, That such Water Conservation Plan demonstrates

282 sufficient lawful uses exist in the Contractor’s Service Area so that using a long-term average, the quantity of
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283 Delivered Water is demonstrated to be reasonable for such uses and in compliance with Reclamation law. 

284 Groundwater recharge programs, groundwater banking programs, surface water storage programs, and

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

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

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

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

289 guidelines.

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

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

292 undertaken pursuant to Section 7 of the Endangered Species Act of 1973, as amended, that are within the

293 Contractor’s legal authority to implement. The Contractor shall comply with the limitations or requirements

294 imposed by environmental documentation applicable to the Contractor and within its legal authority to

295 implement regarding specific activities, including conversion of Irrigation Water to M&I Water. Nothing

296 herein shall be construed to prevent the Contractor from challenging or seeking judicial relief in a court of

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

298 to in this Article.

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

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

301 determination whether Project Water, or other water available to the Project, can be made available to the
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302 Contractor in addition to the Contract Total under Article 3 of this Contract during the Year without

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

304 will consult with the Contractor prior to making such a determination. Subject to subdivisions (l) and (n) of

305 Article 3 of this Contract, if the Contracting Officer determines that Project Water, or other water available

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

307 of such water and shall so notify the Contractor as soon as practical. The Contracting Officer will thereafter

308 meet with the Contractor and other Project Contractors capable of taking such water to determine the most

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

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

311 applicable statutes, regulations, guidelines, and policies.

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

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

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

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

316 referred to as “preuse.” The Contracting Officer’s written approval may permit such uses in accordance

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

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

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

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

321 shall not be disturbed so long as the Contractor shall fulfill all of its obligations under this Contract and any
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322 renewals thereof. Nothing in the preceding sentence shall affect the Contracting Officer’s ability to impose

323 shortages under Article 11 or subdivision (b) of Article 12 of this Contract or applicable provisions of any

324 subsequent renewal contracts.

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

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

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

328 approval.

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

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

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

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

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

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

335 proceeding.

336 (k) Project Water furnished to the Contractor during any month designated in a

337 schedule or revised schedule submitted by the Contractor and approved by the Contracting Officer shall be

338 deemed to have been accepted by the Contractor as Class 1 Water to the extent that Class 1 Water is

339 called for in such schedule for such month and shall be deemed to have been accepted as Class 2 Water to

340 the extent Class 2 Water is called for in such schedule for such month. If in any month the Contractor

341 diverts a quantity of water in addition to the total amount of Class 1 Water and Class 2 Water set forth in
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342 the Contractor's approved schedule or revised schedule for such month, such additional diversions shall be

343 charged first against the Contractor's remaining Class 2 Water supply available in the current Year. To the

344 extent the Contractor's remaining Class 2 Water supply available in the current Year is not sufficient to

345 account for such additional diversions, such additional diversions shall be charged against the Contractor's

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

347 Class 1 Water and Class 2 Water supplies available in the current Year are not sufficient to account for such

348 additional diversions, such additional diversions shall be charged first against the Contractor's available

349 Class 2 Water supply and then against the Contractor's available Class 1 Water supply, both for the

350 following 

351 Year. Payment for all additional diversions of water shall be made in accordance with Article 7 of this

352 Contract.

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

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

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

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

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

358 delivery of such water or, as otherwise provided for in Federal Reclamation law and associated regulations. 

359 Such water may be identified by the Contractor either (i) as additional water to supplement the supply of

360 Class 1 Water and/or Class 2 Water made available to it pursuant to this Contract or, (ii) upon written
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361 notification to the Contracting Officer, as water to be credited against the Contractor's Class 2 Water supply

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

363 Lands in accordance with this Article. The Contracting Officer shall make water determined to be available

364 pursuant to this subsection according to the following priorities: first, to long-term contractors for Class 1

365 Water and/or Class 2 Water within the Friant Division; second, to long-term contractors in the Cross Valley

366 Division of the Project. The Contracting Officer will consider and seek to accommodate requests from

367 other parties for Section 215 Water for use within the area identified as the Friant Division service area in

368 the environmental assessment developed in connection with the execution of this Contract.

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

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

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

372 Explanatory Recital of this Contract.

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

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

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

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

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

378 said contract, and the United States further agrees that it will not voluntarily and knowingly determine itself

379 unable to deliver to the Exchange Contractors entitled thereto from water that is available or that may

380 become available to it from the Sacramento River and its tributaries or the Sacramento-San Joaquin Delta
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381 those quantities required to satisfy the obligations of the United States under said Exchange Contract and

382 under Schedule 2 of the Contract for Purchase of Miller and Lux Water Rights (Contract I1r-1145, dated

383 July 27, 1939).

384 TIME FOR DELIVERY OF WATER

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

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

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

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

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

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

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

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

393 Available and the Long Term Historic Average.

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

395 shall submit to the Contracting Officer a written schedule, satisfactory to the Contracting Officer, showing

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

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

398 means to deliver Project Water according to the approved schedule for the Year commencing on such

399 March 1.

400 (c) The Contractor shall not schedule Project Water in excess of the quantity of Project
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401 Water the Contractor intends to put to reasonable and beneficial use within the Contractor's Service Area,

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

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

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

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

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

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

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

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

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

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

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

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

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

415 Year through and including the last day of February of that Year, request delivery of any amount of the

416 Class 1 Water estimated by the Contracting Officer to be made available to it during the following Year. 

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

418 may be determined by the Contracting Officer) through and including the last day of February of that Year,

419 request delivery of any amount of Class 2 Water estimated by the Contracting Officer to be made available

420 to it during the following Year. Such water shall hereinafter be referred to as preuse water. Such request
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421 must be submitted in writing by the Contractor for a specified quantity of preuse and shall be subject to the

422 approval of the Contracting Officer. Payment for preuse water so requested shall be at the appropriate

423 rate(s) for the following Year in accordance with Article 7 of this Contract and shall be made in advance of

424 delivery of any preuse water. The Contracting Officer shall deliver such preuse water in accordance with a

425 schedule or any revision thereof submitted by the Contractor and approved by the Contracting Officer, to

426 the extent such water is available and to the extent such deliveries will not interfere with the delivery of

427 Project Water entitlements to other Friant Division contractors or the physical maintenance of the Project

428 facilities. The quantities of preuse water delivered pursuant to this subdivision shall be deducted from the

429 quantities of water that the Contracting Officer would otherwise be obligated to make available to the

430 Contractor during the following Year; Provided, That the quantity of preuse water to be deducted from the

431 quantities of either Class 1 Water or Class 2 Water to be made available to the Contractor in the following

432 Year shall be specified by the Contractor at the time the preuse water is requested or as revised in its first

433 schedule for the following Year submitted in accordance with subdivision (b) of this Article, based on the

434 availability of the following Year water supplies as determined by the Contracting Officer.

435 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

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

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

438 location or locations mutually agreed to in writing by the Contracting Officer and the Contractor.

439 (b) The Contracting Officer, the Operating Non-Federal Entity, or other appropriate

440 entity shall make all reasonable efforts to maintain sufficient flows and levels of water in the Friant-Kern
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441 Canal to deliver Project Water to the Contractor at specific turnouts established pursuant to subdivision (a)

442 of this Article.

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

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

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

446 Contracting Officer.

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

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

449 Operating Non-Federal Entity or other appropriate entity as designated by the Contracting Officer

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

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

452 cause to be investigated by the responsible Operating Non-Federal Entity, the accuracy of such

453 measurements and shall take any necessary steps to adjust any errors appearing therein. For any period of

454 time when accurate measurements have not been made, the Contracting Officer shall consult with the

455 Contractor and the responsible Operating Non-Federal Entity prior to making a final determination of the

456 quantity delivered for that period of time.

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

458 responsible for the control, carriage, handling, use, disposal, or distribution of Project Water Delivered to

459 the Contractor pursuant to this Contract beyond the delivery points specified in subdivision (a) of this

460 Article. The Contractor shall indemnify the United States, its officers, employees, agents, and assigns on
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461 account of damage or claim of damage of any nature whatsoever for which there is legal responsibility,

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

463 handling, use, disposal, or distribution of such Project Water beyond such delivery points, except for any

464 damage or claim arising out of: (i) acts or omissions of the Contracting Officer or any of its officers,

465 employees, agents, or assigns, including any responsible Operating Non-Federal Entity, with the intent of

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

467 any of its officers, employees, agents, or assigns, including any responsible Operating Non-Federal Entity;

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

469 responsible Operating Non-Federal Entity; or (iv) damage or claims resulting from a malfunction of facilities

470 owned and/or operated by the United States or responsible Operating Non-Federal Entity; Provided, That

471 the Contractor is not the Operating Non-Federal Entity that owned or operated the malfunctioning

472 facility(ies) from which the damage claim arose.

473 MEASUREMENT OF WATER WITHIN THE SERVICE AREA

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

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

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

477 each municipal and industrial service connection. The water measuring devices or water measuring methods

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

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

480 implementing all such water measuring methods at no cost to the United States. The Contractor shall use the
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481 information obtained from such water measuring devices or water measuring methods to ensure its proper

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

483 record water delivered for municipal and industrial purposes by customer class as defined in the

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

485 however, shall preclude the Contractor from establishing and collecting any charges, assessments, or other

486 revenues authorized by California law. The Contractor shall include a summary of all its annual surface

487 water deliveries in the annual report described in subdivision (c) of Article 26 of this Contract.

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

489 this Contract, the Contractor shall provide to the Contracting Officer a written report describing the

490 measurement devices or water measuring methods being used or to be used to implement subdivision (a) of

491 this Article and identifying the agricultural turnouts and the municipal and industrial service connections or

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

493 or water measuring methods are being used, and, if applicable, identifying the locations at which such

494 devices and/or methods are not yet being used including a time schedule for implementation at such

495 locations. The Contracting Officer shall advise the Contractor in writing within sixty (60) days as to the

496 adequacy of, and necessary modifications, if any, of the measuring devices or water measuring methods

497 identified in the Contractor’s report and if the Contracting Officer does not respond in such time, they shall

498 be deemed adequate. If the Contracting Officer notifies the Contractor that the measuring devices or

499 methods are inadequate, the parties shall within sixty (60) days following the Contracting Officer‘s response,

500 negotiate in good faith the earliest practicable date by which the Contractor shall modify said measuring
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501 devices and/or measuring methods as required by the Contracting Officer to ensure compliance with

502 subdivision (a) of this Article.

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

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

505 subdivision (a) of this Article.

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

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

508 Service Area during the previous Year.

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

Non-Federal Entity on or before the twentieth (20th 510 ) calendar day of each month of the quantity of Irrigation

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

512 RATES AND METHOD OF PAYMENT FOR WATER

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

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

515 the Secretary’s ratesetting policy for Irrigation Water adopted in 1988 and the Secretary’s then-existing

516 ratesetting policy for M&I Water. Such ratesetting policies shall be amended, modified, or superseded only

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

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

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

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

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

523 Tiered Pricing Components as follows:

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

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

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

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

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

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

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

531 notification shall revise Exhibit “B.”

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

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

534 for the following Year and the computations and cost allocations upon which those Rates are based. The

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

536 cost allocations. By December 31 of each Calendar Year, the Contracting Officer shall provide the

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

538 such notification shall revise Exhibit “B.”

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

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

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

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

544 the end of each calendar month thereafter, the Contractor shall make an advance payment to the United

545 States, at the Rate(s) set under subdivision (a) of this Article, for the Water Scheduled to be delivered

546 pursuant to this Contract during the second month immediately following. Adjustments between advance

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

548 end of the following month; Provided, That any revised schedule submitted by the Contractor pursuant to

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

550 any month shall be accompanied with appropriate advance payment, at the Rates then in effect, to assure

551 that Project Water is not delivered to the Contractor in advance of such payment. In any month in which the

552 quantity of Water Delivered to the Contractor pursuant to this Contract equals the quantity of Water

553 Scheduled and paid for by the Contractor, no additional Project Water shall be delivered to the Contractor

554 unless and until an advance payment at the Rates then in effect for such additional Project Water is made. 

555 Final adjustment between the advance payments for the Water Scheduled and payments for the quantities of

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

557 later than April 30th of the following Year, or sixty (60) days after the delivery of Project Water carried

558 over under subdivision (f) of Article 3 of this Contract if such water is not delivered by the last day of

559 February.
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560 (d) The Contractor shall also make a payment in addition to the Rate(s) in subdivision

561 (c) of this Article to the United States for Water Delivered, at the Charges and the appropriate Tiered

562 Pricing Component then in effect, before the end of the month following the month of delivery; Provided,

563 That the Contractor may be granted an exception from the Tiered Pricing Component pursuant to

564 subdivision (j)(2) of this Article. The payments shall be consistent with the quantities of Irrigation Water and

565 M&I Water Delivered as shown in the water delivery report for the subject month prepared by the

566 Operating Non-Federal Entity or, if there is no Operating Non-Federal Entity, by the Contracting Officer. 

567 Such water delivery report shall be the basis for payment of Charges and Tiered Pricing Components by the

568 Contractor, and shall be provided to the Contractor by the Operating Non-Federal Entity or the Contracting

569 Officer (as applicable) within 

570 five (5) days after the end of the month of delivery. The water delivery report shall be deemed a bill for the

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

572 overpayment or underpayment of Charges shall be made through the adjustment of payments due to the

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

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

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

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

577 associated regulations, any applicable provisions of guidelines or ratesetting policies; Provided, That the

578 Rate for Water Delivered under subdivision (d) of Article 3 of this Contract shall be no more than the

579 otherwise applicable Rate for Irrigation Water or M&I Water under subdivision (a) of this Article.
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580 (f) Payments to be made by the Contractor to the United States under this Contract

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

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

583 delivery of Project Water or the delivery of non-project water through Project facilities shall be allocated

584 and applied in accordance with Federal Reclamation law and the associated rules or regulations, and the

585 then current Project ratesetting policies for M&I Water or Irrigation Water.

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

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

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

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

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

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

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

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

594 is their mutual goal. Recognizing that experience has demonstrated that mechanisms, policies, and

595 procedures used for establishing Rates, Charges, and Tiered Pricing Components, and/or for making and

596 allocating payments, other than those set forth in this Article may be in the mutual best interest of the parties,

597 it is expressly agreed that the parties may enter into agreements to modify the mechanisms, policies, and

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

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

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

602 equal to the applicable Tiered Pricing Component. The Tiered Pricing Component for the total of the

603 deliveries of Class 1 Water and Class 2 Water in excess of eighty (80%) percent of the Contract Total, but

604 less than or equal to ninety (90%) percent of the Contract Total, shall equal the one-half of the difference

605 between the Rate established under subdivision (a) of Article 7 of this Contract and the Irrigation Full Cost

606 Water Rate or M&I Full Cost Water Rate, whichever is applicable. The Tiered Pricing Component for the

607 total of the deliveries of Class 1 Water and Class 2 Water which exceeds ninety (90%) percent of the

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

609 of this Contract and (ii) the Irrigation Full Cost Water Rate or M&I Full Cost Water Rate, whichever is

610 applicable. 

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

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

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

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

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

616 can be assured consistent with the purposes of CVPIA through binding agreements executed with or

617 approved by the Contracting Officer prior to use of such water.

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

619 Components pursuant to this Article, Water Delivered shall include Project Water that the Contractor
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620 transfers to others but shall not include Project Water transferred and delivered to the Contractor.

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

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

623 costs of the Project, as those terms are used in the then-current Project ratesetting policies, and interest,

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

625 Project ratesetting policy. Changes of significance in practices which implement the Contracting Officer’s

626 ratesetting policies will not be implemented until the Contracting Officer has provided the Contractor an

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

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

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

630 downward to reflect the changed costs of delivery (if any) of the transferred Project Water to the

631 transferee’s point of delivery in accordance with the then applicable CVP Ratesetting Policy. If the

632 Contractor is receiving lower Rates and Charges because of inability to pay and is transferring Project

633 Water to another entity whose Rates and Charges are not adjusted due to inability to pay, the Rates and

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

635 pay.

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

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

638 NON-INTEREST BEARING OPERATION AND MAINTENANCE DEFICITS

639 8. The Contractor and the Contracting Officer concur that, as of the effective date of this
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640 Contract, the Contractor has no non-interest bearing operation and maintenance deficits and shall have no

641 further liability therefor.

642 SALES, TRANSFERS, OR EXCHANGES OF WATER

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

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

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

646 regulations then in effect. Furthermore, The Contractor may continue to exchange Project Water for water

647 from the Cross Valley Division contractors in the manner historically carried out with the approval of the

648 Contracting Officer under Contract No. 14-06-200-229A. No sale, transfer, or exchange of Project

649 Water under this Contract may take place without the prior written approval of the Contracting Officer,

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

651 approved absent compliance with appropriate environmental documentation including but not limited to the

652 National Environmental Policy Act and the Endangered Species Act. Such environmental documentation

653 should include, as appropriate, an analysis of groundwater impacts and economic and social effects,

654 including environmental justice, of the proposed water transfers on both the transferor and transferee.

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

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

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

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

659 not limited to, the National Environmental Policy Act and the Endangered Species Act analyzing annual
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660 transfers within such geographical areas and the Contracting Officer shall determine whether such transfers

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

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

663 shall not require prior written approval by the Contracting Officer. Such environmental documentation and

664 the Contracting Officer’s compliance determination shall be reviewed every five (5) years and updated, as

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

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

667 transferred within the same geographical area.

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

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

670 use, groundwater recharge, groundwater banking, similar groundwater activities, surface water storage, or

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

672 refuges, groundwater basins or municipal and industrial use; (ii) occur within a single Year; (iii) occur

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

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

675 and the United States, Department of the Interior; and (v) comply with all applicable Federal, State, and

676 local or tribal laws and requirements imposed for protection of the environment and Indian Trust Assets, as

677 defined under Federal law.

678 APPLICATION OF PAYMENTS AND ADJUSTMENTS 

679 10. (a) The amount of any overpayment by the Contractor of the Contractor’s O&M,
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680 Capital, and deficit (if any) obligations for the Year shall be applied first to any current liabilities of the

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

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

683 overpayment at the option of the Contractor, may be credited against amounts to become due to the United

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

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

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

687 days of the Contracting Officer obtaining direction as 
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688 to how to credit or refund such overpayment in response to the notice to the Contractor that it has finalized

689 the accounts for the Year in which the overpayment was made.

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

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

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

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

694 additional costs pursuant to Article 25 of this Contract.

695 TEMPORARY REDUCTIONS--RETURN FLOWS

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

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

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

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

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

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

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

703 thereof necessary for the delivery of Project Water to the Contractor, but so far as feasible the Contracting

704 Officer or Operating Non-Federal Entity will give the Contractor due notice in advance of such temporary

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

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

707 Upon resumption of service after such reduction or discontinuance, and if requested by the Contractor, the
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708 United States will, if possible, deliver the quantity of Project Water which would have been delivered

709 hereunder in the absence of such discontinuance or reduction.

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

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

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

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

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

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

716 subdivision, groundwater recharge, groundwater banking and all similar groundwater activities will be

717 deemed to be underground storage.

718 CONSTRAINTS ON THE AVAILABILITY OF WATER

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

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

721 pursuant to this Contract. In the event the Contracting Officer determines that a Condition of Shortage

722 appears probable, the Contracting Officer will notify the Contractor of said determination as soon as

723 practicable.

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

725 Project, drought, other physical causes beyond the control of the Contracting Officer or actions taken by the

726 Contracting Officer to meet legal obligations then, except as provided in subdivision (a) 
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727 of Article 18 of this Contract, no liability shall accrue against the United States or any of its officers, agents,

728 or employees for any damage, direct or indirect, arising therefrom.

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

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

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

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

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

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

735 as may be submitted by all Friant Division long-term water service contractors entitled to receive Class 1

736 Water and/or Class 2 Water under their water service contracts. Nothing in this subdivision shall limit the

737 Contracting Officer’s ability to take actions that result in the availability of new water supplies to be used for

738 Project purposes and allocating such new supplies; Provided, That the Contracting Officer shall not take

739 such actions until after consultation with the Friant Division Project Contractors.

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

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

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

743 of this Article will be available for delivery in said Year. If the Contracting Officer determines there is or will

744 be a shortage in any Year in the quantity of Class 1 Water available for delivery, the Contracting Officer

745 shall apportion the available Class 1 Water among all contractors 
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746 entitled to receive such water that will be made available at Friant Dam in accordance with the following:

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

748 Friant Dam which is available for meeting Class 1 Water contractual commitments, the amount so

749 determined being herein referred to as the available supply.

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

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

752 coefficient.

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

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

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

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

757 this Contract.

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

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

760 quantity of Class 2 Water which shall be furnished to the Contractor by the Contracting Officer will be

761 determined in the manner set forth in paragraphs (1), (2), and (3), of subdivision (d) of this Article

762 substituting the term "Class 2" for the term "Class 1."

763 (f) In the event that in any Year there is made available to the Contractor, by reason of

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

765 discontinuance or reduction of service as set forth in subdivision (a) of Article 11 of this Contract, less than

766 the quantity of water which the Contractor otherwise would be entitled to receive hereunder, there shall be
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767 made an adjustment on account of the amounts already paid to the Contracting Officer by the Contractor for

768 Class 1 Water and Class 2 Water for said Year in accordance with Article 10 of this Contract.

769 UNAVOIDABLE GROUNDWATER PERCOLATION

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

771 Water to Excess Lands or Ineligible Lands within the meaning of this Contract if such lands are irrigated with

772 groundwater that reaches the underground strata as an unavoidable result of the delivery of Irrigation Water

773 by the Contractor to Eligible Lands.

774 RULES AND REGULATIONS

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

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

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

778 regulations promulgated by the Secretary of the Interior under Federal Reclamation law.

779

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

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

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

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

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

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

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

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

788 geomorphologic processes of the San Joaquin River below Friant Dam to a level that restores and maintains
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789 fish populations in good condition, including but not limited to 

790 naturally-reproducing, self-sustaining populations of chinook salmon and (ii) to accomplish these restoration

791 goals while not adversely impacting the overall sufficiency, reliability and cost of water supplies to Friant

792 Division water users. The Contractor has been actively participating, and intends to continue to participate

793 in such settlement discussions. Except as provided in this Contract, this Contract does not add to the

794 obligations of the parties, if any, relating to the San Joaquin River. This Contract does not limit or detract

795 from the obligations of the parties, if any, relating to the San Joaquin River. 

796 WATER AND AIR POLLUTION CONTROL

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

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

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

800 QUALITY OF WATER

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

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

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

804 26, 1937 (50 Stat. 865), as added by Section 101 of the Act of October 27, 1986 (100 Stat. 3050) or

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

806 facilities to maintain or to improve the quality of Water Delivered to the Contractor pursuant to this

807 Contract. The United States does not warrant the quality of Water Delivered to the Contractor pursuant to

808 this Contract.
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809 (b) The Operation and Maintenance of Project facilities shall be performed in such

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

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

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

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

814 Project Water provided by the Contractor within the Contractor's Service Area.

815 WATER ACQUIRED BY THE CONTRACTOR

816 OTHER THAN FROM THE UNITED STATES

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

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

819 simultaneously transported through the same distribution facilities of the Contractor subject to the following: 

820 (i) if the facilities utilized for commingling Irrigation Water and non-project water were constructed without

821 funds made available pursuant to Federal Reclamation law, the provisions of Federal Reclamation law will

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

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

824 Acreage Limitation Rules and Regulations (43 CFR 

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

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

827 irrigate such Eligible Lands. The Contractor and the Contracting Officer acknowledge that the Contractor’s

828 distribution system that was constructed with Federal financing was, prior to effective date of this Contract,
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829 repaid in full and title to the facilities transferred to the Contractor. As such, when such facilities are utilized

830 for commingling Irrigation Water and non-project water, the provisions of Federal Reclamation law will be

831 applicable only to the landholders of lands which receive Irrigation Water.

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

833 than from the United States or adverse to the Project or its contractors (i.e., non-project water), may be

834 stored, conveyed and/or diverted through Project facilities, subject to the completion of appropriate

835 environmental documentation, with the approval of the Contracting Officer and the execution of any contract

836 determined by the Contracting Officer to be necessary, consistent with the following provisions:

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

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

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

840 as determined by the CVP Ratesetting Policy and the RRA, each as amended, modified or superseded from

841 time to time. In addition, if electrical power is required to pump non-project water through the facilities, the

842 Contractor shall be responsible for obtaining the necessary power and paying the necessary charges

843 therefor.

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

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

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

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

848 service contractors; or (iv) interfere with the physical maintenance of the Project facilities.
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849 (3) Neither the United States nor the Operating Non-Federal Entity shall be

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

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

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

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

854 or extraction of non-project water from any source.

855 (4) Diversion of such non-project water into Project facilities shall be consistent

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

857 the area from which it was extracted.

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

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

860 declared to be available by the Contracting Officer for conveyance and transportation of 

861 non-project water prior to any such remaining capacity being made available to non-Project contractors.

862 OPINIONS AND DETERMINATIONS

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

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

865 to be predicated upon arbitrary, capricious, or unreasonable opinions or determinations. Both parties,

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

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

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

869 Article 18 of this Contract is intended to or shall affect or alter the standard of judicial review applicable
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870 under federal law to any opinion or determination implementing a specific provision of federal law embodied

871 in statute or regulation. 

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

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

874 and of the State of California, and the rules and regulations promulgated by the Secretary of the Interior. 

875 Such determinations shall be made in consultation with the Contractor to the extent reasonably practicable.

876 COORDINATION AND COOPERATION

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

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

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

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

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

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

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

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

885 determinations to be made by the respective party.

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

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

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

889 amended as necessary separate and apart from this Contract. The goal of this process shall be to provide,
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890 to the extent practicable, the means of mutual communication and interaction regarding significant decisions

891 concerning Project operation and management on a 

892 real-time basis.

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

894 the intent of the Secretary to improve water supply reliability. To carry out this intent:

895 (1) The Contracting Officer will, at the request of the Contractor, assist in the

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

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

898 quality, and reliability.

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

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

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

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

903 California to seek improved water resource management.

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

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

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

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

908 issues as appropriate.

909 (d) Without limiting the contractual obligations of the Contracting Officer hereunder,
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910 nothing in this Contract shall be construed to limit or constrain the Contracting Officer’s ability to

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

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

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

914 CHARGES FOR DELINQUENT PAYMENTS

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

916 delinquent installments or payments. When a payment is not received by the due date, the Contractor shall

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

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

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

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

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

922 collection services associated with a delinquent payment.

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

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

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

926 1939 (Public Law 76-260). The interest charge rate shall be determined as of the due date and remain

927 fixed for the duration of the delinquent period.

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

929 shall be applied, first to the penalty, second to the administrative charges, third to the accrued interest, and

930 finally to the overdue payment.

931 EQUAL OPPORTUNITY

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

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

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

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

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

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

938 or termination, rates of payment or other forms of compensation; and selection for training, including
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939 apprenticeship. The Contractor agrees to post in conspicuous places, available to employees and applicants

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

941 nondiscrimination clause.

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

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

944 without discrimination because of race, color, religion, sex, or national origin.

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

946 which it has a collective bargaining agreement or other contract or understanding, a notice, to be provided

947 by the Contracting Officer, advising the said labor union or workers' representative of the Contractor's

948 commitments under Section 202 of Executive Order 11246 of September 24, 1965, and shall post copies

949 of the notice in conspicuous places available to employees and applicants for employment.

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

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

952 Secretary of Labor. 

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

954 Executive Order and by the rules, regulations, and orders of the Secretary of Labor, or pursuant thereto,

955 and will permit access to its books, records, and accounts by the Contracting Officer and the Secretary of

956 Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders.

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

958 this Contract or with any of the said rules, regulations, or orders, this Contract may be canceled, terminated,

959 or suspended, in whole or in part, and the Contractor may be declared ineligible for further Government

960 contracts in accordance with procedures authorized in said amended Executive Order, and such other

961 sanctions may be imposed and remedies invoked as provided in said Executive Order, or by rule, regulation,

962 or order of the Secretary of Labor, or as otherwise provided by law.

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

964 subcontract or purchase order unless exempted by the rules, regulations, or orders of the Secretary of

965 Labor issued pursuant to Section 204 of said amended Executive Order, so that such provisions will be

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

967 subcontract or purchase order as may be directed by the Secretary of Labor as a means of enforcing such

968 provisions, including sanctions for noncompliance: Provided, however, That in the event the Contractor

969 becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such

970 direction, the Contractor may request the United States to enter into such litigation to protect the interests of

971 the United States.
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972 GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT

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

974 Contract is a general obligation of the Contractor notwithstanding the manner in which the obligation may be

975 distributed among the Contractor's water users and notwithstanding the default of individual water users in

976 their obligations to the Contractor.

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

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

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

980 payment of water rates due the United States. The Contractor shall not furnish water made available

981 pursuant to this Contract for lands or parties which are in arrears in the advance payment of water rates

982 levied or established by the Contractor.

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

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

985 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

986 23. (a) The Contractor shall comply with Title VI of the Civil Rights Act of 1964 (42

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

988 Discrimination Act of 1975 (42 U.S.C. 6101, et seq.) and any other applicable civil rights laws, as well as

989 with their respective implementing regulations and guidelines imposed by the U.S. Department of the Interior

990 and/or Bureau of Reclamation.

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

992 race, color, national origin, handicap, or age, be excluded from participation in, be denied the benefits of, or

993 be otherwise subjected to discrimination under any program or activity receiving financial assistance from the

994 Bureau of Reclamation. By executing this Contract, the Contractor agrees to immediately take any

995 measures necessary to implement this obligation, including permitting officials of the United States to inspect

996 premises, programs, and documents.

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

998 obtaining any and all Federal grants, loans, contracts, property discounts, or other Federal financial

999 assistance extended after the date hereof to the Contractor by the Bureau of Reclamation, including

1000 installment payments after such date on account of arrangements for Federal financial assistance which were

1001 approved before such date. The Contractor recognizes and agrees that such Federal assistance will be

1002 extended in reliance on the representations and agreements made in this Article, and that the United States
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1003 reserves the right to seek judicial enforcement thereof.

1004 PRIVACY ACT COMPLIANCE

1005 24. (a) The Contractor shall comply with the Privacy Act of 1974 (5 U.S.C. 552a) (the

1006 Act) and the Department of the Interior rules and regulations under the Act (43 CFR 2.45 et seq.) in

1007 maintaining Landholder acreage certification and reporting records, required to be submitted to the

1008 Contractor for compliance with Sections 206 and 228 of the Reclamation Reform Act of 1982 (96 Stat.

1009 1266), and pursuant to 43 CFR 426.18.

1010 (b) With respect to the application and administration of the criminal penalty provisions

1011 of the Act (5 U.S.C. 552a(i)), the Contractor and the Contractor's employees responsible for maintaining

1012 the certification and reporting records referenced in (a) above are considered to be employees of the

1013 Department of the Interior. See 5 U.S.C. 552a(m).

1014 (c) The Contracting Officer or a designated representative shall provide the Contractor

1015 with current copies of the Interior Department Privacy Act regulations and the Bureau of Reclamation

1016 Federal Register Privacy Act System of Records Notice (Acreage Limitation--Interior, Reclamation-31)

1017 which govern the maintenance, safeguarding, and disclosure of information contained in the Landholder's

1018 certification and reporting records.

1019 (d) The Contracting Officer shall designate a full-time employee of the Bureau of

1020 Reclamation to be the System Manager who shall be responsible for making decisions on denials pursuant to

1021 43 CFR 2.61 and 2.64 amendment requests pursuant to 43 CFR 2.72. The Contractor is authorized to

1022 grant requests by individuals for access to their own records.

1023 (e) The Contractor shall forward promptly to the System Manager each proposed

1024 denial of access under 43 CFR 2.64; and each request for amendment of records filed under 

1025 43 CFR 2.71; notify the requester accordingly of such referral; and provide the System Manager with

1026 information and records necessary to prepare an appropriate response to the requester. These requirements

1027 do not apply to individuals seeking access to their own certification and reporting forms filed with the

1028 Contractor pursuant to 43 CFR 426.18, unless the requester elects to cite the Privacy Act as a basis for the

1029 request.

1030 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

1031 25. In addition to all other payments to be made by the Contractor pursuant to this Contract, the

1032 Contractor shall pay to the United States, within sixty (60) days after receipt of a bill and detailed statement
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1033 submitted by the Contracting Officer to the Contractor for such specific items of direct cost incurred by the

1034 United States for work requested by the Contractor associated with this Contract plus indirect costs in

1035 accordance with applicable Bureau of Reclamation policies and procedures. All such amounts referred to in

1036 this Article shall not exceed the amount agreed to in writing in advance by the Contractor. This Article shall

1037 not apply to costs for routine contract administration.

1038 WATER CONSERVATION

1039 26. (a) Prior to the delivery of water provided from or conveyed through Federally

1040 constructed or Federally financed facilities pursuant to this Contract, the Contractor shall be implementing an

1041 effective water conservation and efficiency program based on the Contractor's water conservation plan that

1042 has been determined by the Contracting Officer to meet the conservation and efficiency criteria for

1043 evaluating water conservation plans established under Federal law. The water conservation and efficiency

1044 program shall contain definite water conservation objectives, appropriate economically feasible water

1045 conservation measures, and time schedules for meeting those objectives. Continued Project Water delivery

1046 pursuant to this Contract shall be contingent upon the Contractor’s continued implementation of such water

1047 conservation program. In the event the Contractor's water conservation plan or any revised water

1048 conservation plan completed pursuant to subdivision (d) of Article 26 of this Contract have not yet been

1049 determined by the Contracting Officer to meet such criteria, due to circumstances which the Contracting

1050 Officer determines are beyond the control of the Contractor, water deliveries shall be made under this

1051 Contract so long as the Contractor diligently works with the Contracting Officer to obtain such

1052 determination at the earliest practicable date, and 
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1053 thereafter the Contractor immediately begins implementing its water conservation and efficiency program in

1054 accordance with the time schedules therein.

1055 (b) Should the amount of M&I Water delivered pursuant to subdivision (a) of Article 3

1056 of this Contract equal or exceed two thousand (2,000) acre-feet per Year, the Contractor shall implement

1057 the Best Management Practices identified by the time frames issued by the California Urban Water

1058 Conservation Council for such M&I Water unless any such practice is determined by the Contracting

1059 Officer to be inappropriate for the Contractor. 

1060 (c) The Contractor shall submit to the Contracting Officer a report on the status of its

1061 implementation of the water conservation plan on the reporting dates specified in the then existing

1062 conservation and efficiency criteria established under Federal law. 

1063 (d) At five (5) -year intervals, the Contractor shall revise its water conservation plan to

1064 reflect the then current conservation and efficiency criteria for evaluating water conservation plans

1065 established under Federal law and submit such revised water management plan to the Contracting Officer

1066 for review and evaluation. The Contracting Officer will then determine if the 

1067 water conservation plan meets Reclamation’s then current conservation and efficiency criteria for evaluating

1068 water conservation plans established under Federal law. 

1069 (e) If the Contractor is engaged in direct groundwater recharge, such activity shall be

1070 described in the Contractor’s water conservation plan.

1071 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

1072 27. Except as specifically provided in Article 17 of this Contract, the provisions of this Contract

1073 shall not be applicable to or affect non-project Water or water rights now owned or hereafter acquired by
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1074 the Contractor or any user of such water within the Contractor's Service Area. Any such water shall not be

1075 considered Project Water under this Contract. In addition, this Contract shall not be construed as limiting or

1076 curtailing any rights which the Contractor or any water user within the Contractor's Service Area acquires or

1077 has available under any other contract pursuant to Federal Reclamation law.

1078 OPERATION AND MAINTENANCE BY NON-FEDERAL ENTITY

1079 28. (a) The Operation and Maintenance of a portion of the Project facilities which serve the

1080 Contractor, and responsibility for funding a portion of the costs of such Operation and Maintenance, have

1081 been transferred to the Operating Non-Federal Entity by separate agreement between the United States and

1082 the Operating Non-Federal Entity. That separate agreement shall not interfere with or affect the rights or

1083 obligations of the Contractor or the United States hereunder.

1084 (b) The Contracting Officer has previously notified the Contractor in writing that the

1085 Operation and Maintenance of a portion of the Project facilities which serve the Contractor has been

1086 transferred to the Operating Non-Federal Entity, and therefore, the Contractor shall pay directly to the

1087 Operating Non-Federal Entity, or to any successor approved by the Contracting Officer under the terms

1088 and conditions of the separate agreement between the United States and the Operating Non-Federal Entity

1089 described in subdivision (a) of this Article, all rates, charges or assessments of any kind, including any

1090 assessment for reserve funds, which the Operating Non-Federal Entity or such successor determines, sets or

1091 establishes for (i) the Operation and Maintenance of the portion of the Project facilities operated and

1092 maintained by the Operating Non-Federal Entity or such successor, or (ii) the Friant Division’s share of the

1093 operation, maintenance and replacement costs for physical works and appurtenances associated with the

1094 Tracy Pumping Plant, the Delta-Mendota Canal, the O'Neill Pumping/Generating Plant, the federal share of
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1095 the O'Neill Forebay, the Mendota Pool, and the federal share of San Luis Unit joint use conveyance and

1096 conveyance pumping facilities. Such direct payments to the Operating Non-Federal Entity or such

1097 successor shall not relieve the Contractor of its obligation to pay directly to the United States the

1098 Contractor’s share of the Project Rates, Charges, and Tiered Pricing Components except to the extent the

1099 Operating Non-Federal Entity collects payments on behalf of the United States in accordance with the

1100 separate agreement identified in subdivision (a) of this Article.

1101 (c) For so long as the Operation and Maintenance of any portion of the Project facilities

1102 serving the Contractor is performed by the Operating Non-Federal Entity, or any successor thereto, the

1103 Contracting Officer shall adjust those components of the Rates for Water Delivered under this Contract

1104 representing the cost associated with the activity being performed by the Operating Non-Federal Entity or

1105 its successor.

1106 (d) In the event the Operation and Maintenance of the Project facilities operated and

1107 maintained by the Operating Non-Federal Entity is re-assumed by the United States during the term of this

1108 Contract, the Contracting Officer shall so notify the Contractor, in writing, and present to the Contractor a

1109 revised Exhibit “B” which shall include the portion of the Rates to be paid by the Contractor for Project

1110 Water under this Contract representing the Operation and Maintenance costs of the portion of such Project

1111 facilities which have been re-assumed. The Contractor shall, thereafter, in the absence of written notification

1112 from the Contracting Officer to the contrary, pay the Rates, 

1113 Charges, and Tiered Pricing Component(s) specified in the revised Exhibit “B” directly to the United States

1114 in compliance with Article 7 of this Contract.

1115 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS
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1116 29. The expenditure or advance of any money or the performance of any obligation of the

1117 United States under this Contract shall be contingent upon appropriation or allotment of funds. Absence of

1118 appropriation or allotment of funds shall not relieve the Contractor from any obligations under this Contract. 

1119 No liability shall accrue to the United States in case funds are not appropriated or allotted.

1120 BOOKS, RECORDS, AND REPORTS

1121 30. (a) The Contractor shall establish and maintain accounts and other books and records

1122 pertaining to administration of the terms and conditions of this Contract, including: the Contractor's financial

1123 transactions, water supply data, and Project land and right-of-way agreements; the water users' land-use

1124 (crop census), land ownership, land-leasing and water use data; and other matters that the Contracting

1125 Officer may require. Reports thereon shall be furnished to the Contracting Officer in such form and on such

1126 date or dates as the Contracting Officer may require. Subject to applicable Federal laws and regulations,

1127 each party to this Contract shall have the right during office hours to examine and make copies of the other

1128 party's books and records relating to matters covered by this Contract.

1129 (b) Notwithstanding the provisions of subdivision (a) of this Article, no books, records,

1130 or other information shall be requested from the Contractor by the Contracting Officer unless such books,

1131 records, or information are reasonably related to the administration or performance of this Contract. Any

1132 such request shall allow the Contractor a reasonable period of time within which to provide the requested

1133 books, records, or information.

1134 (c) At such time as the Contractor provides information to the Contracting Officer

1135 pursuant to subdivision (a) of this Article, a copy of such information shall be provided to the Operating

1136 Non-Federal Entity.

1137 ASSIGNMENT LIMITED--SUCCESSORS AND ASSIGNS OBLIGATED

1138 31. (a) The provisions of this Contract shall apply to and bind the successors and assigns of

1139 the parties hereto, but no assignment or transfer of this Contract or any right or interest therein shall be valid

1140 until approved in writing by the Contracting Officer.

1141 (b) The assignment of any right or interest in this Contract by either party shall not

1142 interfere with the rights or obligations of the other party to this Contract absent the written concurrence of
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1143 said other party.

1144 (c) The Contracting Officer shall not unreasonably condition or withhold approval of

1145 any proposed assignment.

1146 SEVERABILITY

1147 32. In the event that a person or entity who is neither (i) a party to a Project contract, nor (ii) a

1148 person or entity that receives Project Water from a party to a Project contract, nor (iii) an association or

1149 other form of organization whose primary function is to represent parties to Project contracts, brings an

1150 action in a court of competent jurisdiction challenging the legality or enforceability of a provision included in

1151 this Contract and said person, entity, association, or organization obtains a final court decision holding that

1152 such provision is legally invalid or unenforceable and the Contractor has not intervened in that lawsuit in

1153 support of the plaintiff(s), the parties to this Contract shall use their best efforts to (i) within thirty (30) days

1154 of the date of such final court decision identify by mutual agreement the provisions in this Contract which

1155 must be revised and (ii) within three (3) months thereafter promptly agree on the appropriate revision(s). 

1156 The time periods specified above may be extended by mutual agreement of the parties. Pending the

1157 completion of the actions designated above, to the extent it can do so without violating any applicable

1158 provisions of law, the United States shall continue to make the quantities of Project Water specified in this

1159 Contract available to the Contractor pursuant to the provisions of this Contract which were not found to be

1160 legally invalid or unenforceable in the final court decision.

1161 RESOLUTION OF DISPUTES

1162 33. Should any dispute arise concerning any provisions of this Contract, or the parties’ rights
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1163 and obligations thereunder, the parties shall meet and confer in an attempt to resolve the dispute. Prior to

1164 the Contractor commencing any legal action, or the Contracting Officer referring any matter to Department

1165 of Justice, the party shall provide to the other party thirty (30) days’ written notice of the intent to take such

1166 action; Provided, That such notice shall not be required where a delay in commencing an action would

1167 prejudice the interests of the party that intends to file suit. During the thirty (30) -day notice period, the

1168 Contractor and the Contracting Officer shall meet and confer in an attempt to resolve the dispute. Except as

1169 specifically provided, nothing herein is intended to waive or abridge any right or remedy that the Contractor

1170 or the United States may have.

1171 OFFICIALS NOT TO BENEFIT

1172 34. No Member of or Delegate to Congress, Resident Commissioner, or official of the

1173 Contractor shall benefit from this Contract other than as a water user or landowner in the same manner as

1174 other water users or landowners.

1175 CHANGES IN CONTRACTOR’S SERVICE AREA

1176 35. (a) While this Contract is in effect, no change may be made in the Contractor's Service

1177 Area or boundaries, by inclusion or exclusion of lands, dissolution, consolidation, merger, or otherwise,

1178 except upon the Contracting Officer's written consent.

1179 (b) Within thirty (30) days of receipt of a request for such a change, the Contracting

1180 Officer will notify the Contractor of any additional information required by the Contracting Officer for

1181 processing said request, and both parties will meet to establish a mutually agreeable schedule for timely

1182 completion of the process. Such process will analyze whether the proposed change is likely to: (i) result in

1183 the use of Project Water contrary to the terms of this Contract; (ii) impair the ability of the Contractor to pay

1184 for Project Water furnished under this Contract or to pay for any Federally-constructed facilities for which
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1185 the Contractor is responsible; and (iii) have an impact on any Project Water rights applications, permits, or

1186 licenses. In addition, the Contracting Officer shall comply with the National Environmental Policy Act and

1187 the Endangered Species Act. The Contractor will be responsible for all costs incurred by the Contracting

1188 Officer in this process, and such costs will be paid in accordance with Article 25 of this Contract.

1189 FEDERAL LAWS

1190 36. By entering into this Contract, the Contractor does not waive its rights to contest the validity

1191 or application in connection with the performance of the terms and conditions of this Contract of any Federal

1192 law or regulation; Provided, That the Contractor agrees to comply with the terms and conditions of this

1193 Contract unless and until relief from application of such Federal law or 

1194 regulation to the implementing provision of the Contract is granted by a court of competent jurisdiction.

1195 NOTICES

1196 37. Any notice, demand, or request authorized or required by this Contract shall be deemed to

1197 have been given, on behalf of the Contractor, when mailed, postage prepaid, or delivered to the Area

1198 Manager, South-Central California Area Office, 1243 “N” Street, Fresno, California 93721, and on behalf

1199 of the United States, when mailed, postage prepaid, or delivered to the Board of Directors of the Arvin1200 Edison Water Storage District, PO Box 175, Arvin California 93203. The designation of the addressee or

1201 the address may be changed by notice given in the same manner as provided in this Article for other notices.

1202 CONFIRMATION OF CONTRACT

1203 38. The Contractor, after the execution of this Contract, shall promptly seek to secure a decree

1204 of a court of competent jurisdiction of the State of California, confirming the execution of this Contract. The

1205 Contractor shall furnish the United States a certified copy of the final decree, the validation proceedings, and

1206 all pertinent supporting records of the court approving and confirming this Contract, and decreeing and

1207 adjudging it to be lawful, valid, and binding on the Contractor.
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1208 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of the day and 

1209 year first above written.

THE UNITED STATES OF AMERICA

By: /s/ William H. Luce, Jr. 

Acting Regional Director, Mid-Pacific Region

Bureau of Reclamation

ARVIN-EDISON WATER STORAGE DISTRICT

By: /s/ Howard R. Frick 

President of the Board of Directors

Attest:

By: /s/ David A. Nixon 

 Assistant Secretary of the Board of Directors

I:Arvi1a.wpd
Contract No. 14-06-200-229A-LTR1

EXHIBIT A

[Map or Description of Service Area]
Contract No. 14-06-200-229A-LTR1

EXHIBIT B

[Initial Rates and Charges]