AG and M&I 

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

Stony Creek WD 3/01-2004 

Stony Creek WD 7/22-2003 

Stony Creek WD 6/30-2003 

Sac.Valley Division Draft 5/28-2003 

CVP-Wide Draft 5/23-2003 

Contract No. 

2-07-20-W0261-LTR1 

UNITED STATES 

DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

Central Valley Project, California 

LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES 

AND

STONY CREEK WATER DISTRICT

PROVIDING FOR PROJECT WATER SERVICE

FROM THE BLACK BUTTE PROJECT

Table of Contents

Article No. Title Page No.

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

 Explanatory Recitals ............................................................................................ 1-4 

 1 Definitions............................................................................................................ 4-8 

 2 Term of Contract................................................................................................ 8-11 

 3 Water to be Made Available and Delivered to the Contractor......................... 12-15 

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

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

 6 Measurement of Water Within the Contractor’s Service Area........................ 18-19 

 7 Rates and Method of Payment for Water......................................................... 19-25 

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

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

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

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

 12 Constraints on the Availability of Water ......................................................... 29-30 

 13 Unavoidable Groundwater Percolation..................................................................30 

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

 15 Water and Air Pollution Control............................................................................30 

 16 Quality of Water .............................................................................................. 30-31 

 17 Water Acquired by the Contractor Other Than From the United States.......... 31-33 

 18 Opinions and Determinations .......................................................................... 33-34 

 19 Coordination and Cooperation......................................................................... 34-35 

 20 Charges for Delinquent Payments ................................................................... 35-36 

 21 Equal Opportunity............................................................................................ 36-37
Contract No. 2-07-20-W0261-LTR1 

Table of Contents - continued

Article No. Title Page No.

 22 General Obligation--Benefits Conditioned Upon Payment ...................................37 

 23 Compliance With Civil Rights Laws and Regulations ..........................................38 

 24 Privacy Act Compliance .................................................................................. 38-39 

 25 Contractor to Pay Certain Miscellaneous Costs.....................................................39 

 26 Water Conservation ......................................................................................... 39-40 

 27 Existing or Acquired Water or Water Rights................................................... 40-41 

 28 Operation and Maintenance by Operating Non-Federal Entity .............................41 

 29 Contingent on Appropriation or Allotment of Funds ............................................41 

 30 Books, Records, and Reports.................................................................................41 

 31 Assignment Limited--Successors and Assigns Obligated ............................... 41-42 

 32 Severability ............................................................................................................42 

 33 Resolution of Disputes..................................................................................... 42-43 

 34 Officials Not to Benefit..........................................................................................43 

 35 Changes in Contractor’s Service Area...................................................................43 

 36 Federal Laws.................................................................................................... 43-44 

 37 Notices ...................................................................................................................44 

 38 Confirmation of Contract.......................................................................................44 

 39 Agreement on Water Quantities....................................................................... 44-45 

 40 Hazardous Waste ............................................................................................. 45-46 

 Signature Page .......................................................................................................47 

Exhibit A – Map of Contractor’s Service Area 

Exhibit B – Rates and Charges 

Exhibit C – Schedule of Monthly Diversions of Water 
AG and M&I 

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

Stony Creek WD 3/01-2004 

Stony Creek WD 7/22-2003 

Stony Creek WD 6/30-2003 

Sac.Valley Division Draft 5/28-2003 

CVP-Wide Draft 5/23-2003 

Contract No. 

2-07-20-W0261-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 STONY CREEK WATER DISTRICT

8 PROVIDING FOR PROJECT WATER SERVICE

9 FROM THE BLACK BUTTE PROJECT

10 THIS CONTRACT, made this _____ day of ____________________, 20___, in 

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

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

13 amended and supplemented, August 4, 1939 (53 Stat. 1187), as amended and supplemented, July 2, 

14 1956 (70 Stat. 483), June 21, 1963 (77 Stat. 68), October 12, 1982 (96 Stat. 1263), October 27, 1986 

15 (100 Stat. 3050), as amended, and Title XXXIV of the Act of October 30, 1992 (106 Stat. 4706), all 

16 collectively hereinafter referred to as Federal Reclamation law, between THE UNITED STATES 

17 OF AMERICA, hereinafter referred to as the United States, and STONY CREEK WATER 

18 DISTRICT, hereinafter referred to as the Contractor, a public agency of the State of California, duly 

19 organized, existing, and acting pursuant to the laws thereof; 

20 WITNESSETH, That:

21 EXPLANATORY RECITALS

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

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

24 flood control, irrigation, municipal, domestic, industrial, fish and wildlife mitigation, protection 
Contract No. 2-07-20-W0261-LTR1 

2

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

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

27 and the San Joaquin River and their tributaries; and 

28 [1.1] WHEREAS, the United States has constructed the Orland Project which is being 

29 operated by the Orland Water Users’ Association pursuant to Contract No. 14-06-200-3502 

30 dated August 26, 1954, as amended by the contract dated August 24, 1960; and 

 [2nd 31 ] WHEREAS, the United States constructed the Black Butte Dam and Reservoir 

32 which were integrated into the Project and which will be used in part for the furnishing of water 

33 to the Contractor pursuant to the terms of this Contract; and 

34 [2.1] WHEREAS, the water rights of all lands and the use thereof within the watershed 

35 of Stony Creek and its tributaries were adjudicated by the U.S. District Court for the Northern 

36 District of California, Second Division, in United States of America, Plaintiff, v. H. C. Angle, et 

37 al., Defendants, Equity Number 30, hereinafter referred to as the Angle Decree; and 

38 [2.2] WHEREAS, the United States is willing to make water stored in the Black Butte 

39 Reservoir available to the Contractor from the East Park Reservoir of the Orland Project pursuant 

40 to the exchange Contract No. 14-06-200-1020A, dated June 26, 1964, between the United States 

41 and the Orland Water Users’ Association; and 

 [3rd 42 ] WHEREAS, the rights to Project Water were acquired by the United States 

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

 [4th 44 ] WHEREAS, the Contractor and the United States entered into Contract 

45 No. 2-07-20-W0261, as amended on January 13, 1999, which provided the Contractor with Base 

46 Supply and established terms for the delivery to the Contractor of Project Water from Stony 

47 Creek and East Park Reservoir from April 19, 1982, through December 31, 2020, hereinafter 

48 referred to as the “Existing Contract”; and 

 [5th 49 ] WHEREAS, the United States and the Contractor have, pursuant to subsection 

50 3404(c)(3) of the Central Valley Project Improvement Act (CVPIA), subsequently entered into a 
Contract No. 2-07-20-W0261-LTR1 

3

51 binding agreement identified as Binding Agreement No. 2-07-20-W0261-BA, which sets out the 

52 terms pursuant to which the Contractor agreed to renew the Existing Contract before its 

53 expiration date after completion of a programmatic environmental impact statement and other 

54 appropriate environmental documentation and negotiation of a renewal contract, and which also 

55 sets out the consequences of a subsequent decision not to renew; and 

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

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

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

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

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

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

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

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

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

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

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

67 of its obligations under the Existing Contract; and 

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

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

70 reasonable and beneficial use and, based upon a needs analysis cooperatively prepared by the 

71 Contracting Officer and the Contractor, has demonstrated projected future demand for water use 

72 that exceeds the Contract Total to be made available to it pursuant to this Contract; and 

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

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

75 as an essential portion of its water supply; and 
Contract No. 2-07-20-W0261-LTR1 

4

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

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

78 Project; and 

 [13th 79 ] WHEREAS, the Secretary intends through coordination, cooperation, and 

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

81 Project for all Project purposes; and 

 [14th 82 ] WHEREAS, the mutual goals of the United States and the Contractor include: to 

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

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

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

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

87 of the United States relative to the Project; and 

 [15th 88 ] WHEREAS, the parties intend by this Contract to develop a more cooperative 

89 relationship in order to achieve their mutual goals; and 

 [16th 90 ] WHEREAS, the United States and the Contractor are willing to enter into this 

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

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

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

94 DEFINITIONS

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

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

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

98 both dates inclusive; 

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

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

101 annually by the Contracting Officer pursuant to this Contract; 
Contract No. 2-07-20-W0261-LTR1 

5

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

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

104 Contract Total; 

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

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

107 or regulation; 

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

109 Contractor is entitled under subdivisions (a)(1) and (2) of Article 3 of this Contract; 

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

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

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

113 without amendment of this Contract; 

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

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

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

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

118 (96 Stat. 1263), as amended, hereinafter referred to as RRA; 

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

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

121 Reclamation law; 

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

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

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

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

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

127 and funded O&M deficits from October 12, 1982, on costs outstanding at that date, or from the 
Contract No. 2-07-20-W0261-LTR1 

6

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

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

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

131 and Regulations for the RRA; 

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

133 be delivered in accordance with Section 204 of the RRA; 

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

135 to the delivery of Irrigation Water; 

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

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

138 incidental thereto, and watering of livestock; 

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

140 nonexempt land, as provided in 43 CFR 426.2; 

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

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

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

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

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

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

147 this Article; 

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

149 the delivery of M&I Water; 

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

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

152 maintenance of Project facilities; 

153 (r) Omitted; 
Contract No. 2-07-20-W0261-LTR1 

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

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

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

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

158 Reclamation law; 

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

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

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

162 that is diverted or scheduled to be diverted each month by the Contractor which is in excess of 

163 the Base Supply; 

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

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

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

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

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

169 preceding contract(s); 

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

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

172 through any agency of the Department of the Interior; 

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

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

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

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

177 Officer; 
Contract No. 2-07-20-W0261-LTR1 

8

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

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

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

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

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

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

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

185 Calendar Year through the last day of February of the following Calendar Year; and 

186 (dd) “Base Supply” shall mean the quantity of water described in subdivision 

187 (a)(1) of Article 3 and Exhibit “C” which the United States agrees may be diverted by the 

188 Contractor from Stony Creek and East Park Reservoir each month during the period March 

189 through November of each Year without payment to the United States for such quantities 

190 diverted; and; 

191 (ee) “Other Water” shall mean water available from the Project other than 

192 Irrigation Water and M&I Water. 

193 TERM OF CONTRACT 

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

195 20___, and supercedes the Existing Contract. In the event the Contractor wishes to renew this 

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

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

198 renewal of this Contract insofar as it pertains to the furnishing of Irrigation Water to the 

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

200 insofar as it pertains to the furnishing of M&I Water to the Contractor shall be governed by 

201 subdivision (c) of this Article. 

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

203 agreeable to the parties hereto, and upon a determination by the Contracting Officer that at the 
Contract No. 2-07-20-W0261-LTR1 

9

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

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

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

207 (2) The conditions which must be met for this Contract to be renewed 

208 are: (i) the Contractor has prepared a water conservation plan that has been determined by the 

209 Contracting Officer in accordance with Article 26 of this Contract to meet the conservation and 

210 efficiency criteria for evaluating such plans established under Federal law; (ii) the Contractor is 

211 implementing an effective water conservation and efficiency program based on the Contractor’s 

212 water conservation plan as required by Article 26 of this Contract; (iii) the Contractor is 

213 maintaining all water measuring devices and implementing all water measurement methods as 

214 approved by the Contracting Officer pursuant to Article 6 of this Contract; (iv) the Contractor 

215 has reasonably and beneficially used the Project Water supplies made available to it and, based 

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

217 beneficial use the quantity of Project Water to be made available to it pursuant to such renewal; 

218 (v) the Contractor is complying with all terms and conditions of this Contract; and (vi) the 

219 Contractor has the physical and legal ability to deliver Project Water. 

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

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

222 consistent with the parties’ respective legal rights and obligations, and in consideration of all 

223 relevant facts and circumstances, as those circumstances exist at the time of renewal, including, 

224 without limitation, the Contractor’s need for continued delivery of Project Water; environmental 

225 conditions affected by implementation of the Contract to be renewed, and specifically changes in 

226 those conditions that occurred during the life of the Contract to be renewed; the Secretary’s 

227 progress toward achieving the purposes of the CVPIA as set out in Section 3402 and in 

228 implementing the specific provisions of the CVPIA; and current and anticipated economic 

229 circumstances of the region served by the Contractor. 
Contract No. 2-07-20-W0261-LTR1 

10

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

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

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

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

234 afforded the opportunity to comment to the Contracting Officer on the proposed adoption and 

235 application of any revised policy applicable to the delivery of M&I Water that would limit the 

236 term of any subsequent renewal contract with the Contractor for the furnishing of M&I Water to 

237 less than 40 years. 

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

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

240 Contract, of whether a conversion of the relevant portion of this Contract to a contract under said 

241 subsection 9(d) of the Reclamation Project Act of 1939 can be accomplished pursuant to the Act 

242 of July 2, 1956 (70 Stat. 483). The Contracting Officer shall also make a determination ten years 

243 after the date of execution of this Contract and every five years thereafter during the term of this 

244 Contract of whether a conversion of the relevant portion of this Contract to a contract under 

245 subsection 9(c)(1) of the Reclamation Project Act of 1939 can be accomplished. 

246 Notwithstanding any provision of this Contract, the Contractor reserves and shall have all rights 

247 and benefits under the Act of July 2, 1956 (70 Stat. 483). The Contracting Officer anticipates 

248 that during the term of this Contract, all authorized Project construction expected to occur will 

249 have occurred, and on that basis the Contracting Officer agrees upon such completion to allocate 

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

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

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

253 9(d) or 9(c)(1), whichever is applicable, of the Reclamation Project Act of 1939, subject to 
Contract No. 2-07-20-W0261-LTR1 

11

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

255 Contractor and the Contracting Officer. A condition for such conversion to occur shall be a 

256 determination by the Contracting Officer that, account being taken of the amount credited to 

257 return by the Contractor as provided for under Federal Reclamation law, the remaining amount 

258 of construction costs assignable for ultimate return by the Contractor can probably be repaid to 

259 the United States within the term of a contract under said subsection 9(d) or 9(c)(1), whichever is 

260 applicable. If the remaining amount of costs that are properly assignable to the Contractor 

261 cannot be determined during the term of this Contract, the Contracting Officer shall notify the 

262 Contractor, and provide the reason(s) why such a determination could not be made. Further, the 

263 Contracting Officer shall make such a determination as soon thereafter as possible so as to 

264 permit, upon request of the Contractor and satisfaction of the condition set out above, conversion 

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

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

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

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

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

270 provisions of this subdivision. 

271 (e) The Contractor recognizes that this Contract is subject to the terms and 

272 conditions of Contract No. 14-06-200-1020A, between the United States and the Orland Water 

273 Users’ Association. In the event that Contract No. 14-0. 6-200-1020A is terminated, this 

274 Contract shall also be considered terminated. 
Contract No. 2-07-20-W0261-LTR1 

12

275 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE CONTRACTOR

276 3. (a) (1) The Contractor is hereby entitled and authorized to divert from 

277 Stony Creek and East Park Reservoir, subject to the terms and conditions contained herein, 425 

278 acre-feet of Base Supply shown in Exhibit “C” for beneficial use within the area shown on 

279 Exhibit “A”. 

280 (2) During each Year, consistent with all applicable State water rights, 

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

282 this Contract, the Contracting Officer shall make available for delivery to the Contractor 2,920 

283 acre-feet of Project Water for irrigation and M&I purposes. Water Delivered to the Contractor in 

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

285 Articles 4 and 7 of this Contract. 

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

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

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

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

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

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

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

293 water made available to the Contractor was 2,714 acre-feet. Nothing in subdivision (b) of this 

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

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

296 applicable legal requirements. 

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

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

299 lieu), ground-water banking programs, surface water storage programs, and other similar 
Contract No. 2-07-20-W0261-LTR1 

13

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

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

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

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

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

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

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

307 compliance with Federal Reclamation law. Ground-water recharge programs, ground-water 

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

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

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

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

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

313 guidelines. 

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

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

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

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

318 Contract, which evidences in excess of 21 years of diversions for irrigation and/or M&I purposes 

319 of the quantities of water provided in subdivision (a)(2) of Article 3 of this Contract, will be 

320 considered in developing an appropriate baseline for biological assessment(s) prepared pursuant 

321 to the ESA, and any other needed environmental review. Nothing herein shall be construed to 

322 prevent the Contractor from challenging or seeking judicial relief in a court of competent 

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

324 to in this Article. 
Contract No. 2-07-20-W0261-LTR1 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

344 guidelines, and policies. 

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

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

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

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

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

350 sentence shall affect the Contracting Officer’s ability to impose shortages under Article 11 or 
Contract No. 2-07-20-W0261-LTR1 

15

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

352 contracts. 

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

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

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

356 conditions of such approval. 

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

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

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

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

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

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

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

364 Contract to use Project Water. 

365 TIME FOR DELIVERY OF WATER

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

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

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

369 Historic Average and will be updated monthly, and more frequently if necessary, based on then370 current operational and hydrologic conditions and a new declaration with changes, if any, to the 

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

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

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

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

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

376 Contractor shall submit to the Contracting Officer a written schedule, satisfactory to the 
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377 Contracting Officer, showing the monthly quantities of Base Supply and Project Water to be 

378 delivered by the United States to the Contractor pursuant to this Contract for the Year 

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

380 Base Supply and Project Water according to the approved schedule for the Year commencing on 

381 such March 1. 

382 (c) The Contractor shall not schedule Base Supply and Project Water in 

383 excess of the quantity of Base Supply and Project Water the Contractor intends to put to 

384 reasonable and beneficial use within the Contractor's Service Area or to sell, transfer, or 

385 exchange pursuant to Article 9 of this Contract during any Year. 

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

387 Contract, the United States shall deliver Base Supply and Project Water to the Contractor in 

388 accordance with the initial schedule submitted by the Contractor pursuant to subdivision (b) of 

389 this Article, or any written revision(s), satisfactory to the Contracting Officer, thereto submitted 

390 within a reasonable time prior to the date(s) on which the requested change(s) is/are to be 

391 implemented. 

392 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

393 5. (a) Base Supply and Project Water scheduled pursuant to subdivision (b) of 

394 Article 4 of this Contract shall be delivered to the Contractor at existing points of diversion on 

395 Stony Creek and East Park Reservoir shown on Exhibit A and any additional point or points of 

396 delivery either on Project facilities or another location or locations mutually agreed to in writing 

397 by the Contracting Officer and the Contractor. 

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

399 sufficient flows and levels of water in Stony Creek and East Park Reservoir to deliver Project 

400 Water to the Contractor at specific turnouts established pursuant to subdivision (a) of this 

401 Article. 
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402 (c) The Contractor shall deliver Irrigation Water in accordance with any 

403 applicable land classification provisions of Federal Reclamation law and the associated 

404 regulations. The Contractor shall not deliver Project Water to land outside the Contractor's 

405 Service Area unless approved in advance by the Contracting Officer. 

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

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

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

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

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

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

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

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

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

415 handling, use, disposal, or distribution of Base Supply and Water Delivered to the Contractor 

416 pursuant to this Contract beyond the delivery points specified in subdivision (a) of this Article. 

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

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

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

420 with the control, carriage, handling, use, disposal, or distribution of such Base Supply and Water 

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

422 omissions of the Contracting Officer or any of its officers, employees, agents, or assigns with the 

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

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

425 Contracting Officer or any of its officers, employees, agents, or assigns or (iv) damage or claims 

426 resulting from a malfunction of facilities owned and/or operated by the United States 

. 
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427 MEASUREMENT OF WATER WITHIN THE CONTRACTOR’S SERVICE AREA

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

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

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

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

432 measuring devices or water measuring methods of comparable effectiveness must be acceptable 

433 to the Contracting Officer. The Contractor shall be responsible for installing, operating, and 

434 maintaining and repairing all such measuring devices and implementing all such water 

435 measuring methods at no cost to the United States. The Contractor shall use the information 

436 obtained from such water measuring devices or water measuring methods to ensure its proper 

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

438 applicable, to record water delivered for M&I purposes by customer class as defined in the 

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

440 contained, however, shall preclude the Contractor from establishing and collecting any charges, 

441 assessments, or other revenues authorized by California law. The Contractor shall include a 

442 summary of all its annual surface water deliveries in the annual report described in subdivision 

443 (c) of Article 26. 

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

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

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

447 to implement subdivision (a) of this Article and identifying the agricultural turnouts and the M&I

448 service connections or alternative measurement programs approved by the Contracting Officer, 

449 at which such measurement devices or water measuring methods are being used, and, if 

450 applicable, identifying the locations at which such devices and/or methods are not yet being used 

451 including a time schedule for implementation at such locations. The Contracting Officer shall 

452 advise the Contractor in writing within 60 days as to the adequacy and necessary modifications, 
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453 if any, of the measuring devices or water measuring methods identified in the Contractor’s report 

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

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

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

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

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

459 compliance with subdivision (a) of this Article. 

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

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

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

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

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

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

 (e) The Contractor shall inform the Contracting Officer on or before the 10th 466 

467 calendar day of each month of the quantity of Irrigation Water or M&I Water and/or Other Water 

468 taken during the preceding month. 

469 RATES AND METHOD OF PAYMENT FOR WATER

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

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

472 accordance with (i) the Secretary’s ratesetting policy for Irrigation Water adopted in 1988 and 

473 the Secretary’s then-existing ratesetting policy for M&I Water. Such ratesetting policies shall be 

474 amended, modified, or superceded only through a public notice and comment procedure; (ii) 

475 applicable Federal Reclamation law and associated rules and regulations, or policies; and (iii) 

476 other applicable provisions of this Contract. Payments shall be made by cash transaction, 

477 electronic funds transfer, or any other mechanism as may be agreed to in writing by the 

478 Contractor and the Contracting Officer. The Rates, Charges, and Tiered Pricing Component 
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479 applicable to the Contractor upon execution of this Contract are set forth in Exhibit “B,” as may 

480 be revised annually. The Rates and Charges for Other Water shall be determined by the 

481 Contracting Officer upon the Contractor’s request to use all or a portion of its Project Water as 

482 Other Water. 

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

484 and Tiered Pricing Component as follows: 

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

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

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

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

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

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

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

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

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

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

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

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

497 comment on such computations and cost allocations. By December 31 of each Calendar Year, 

498 the Contracting Officer shall provide the Contractor with the final Rates and Tiered Pricing 

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

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

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

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

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

504 scheduled to be delivered pursuant to this Contract during the first two calendar months of the 
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505 Year. Before the end of the first month and before the end of each calendar month thereafter, the 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

522 day of February. 

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

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

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

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

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

528 consistent with the quantities of Irrigation Water, M&I Water and/or Other Water Delivered as 

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

530 The water delivery report shall be deemed a bill for the payment of Charges and the applicable 
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531 Tiered Pricing Component for Water Delivered. Adjustment for overpayment or underpayment 

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

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

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

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

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

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

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

539 Contract shall be no more than the otherwise applicable Rate for Irrigation Water or M&I Water 

540 under subdivision (a) of this Article. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

556 Contract is their mutual goal. Recognizing that experience has demonstrated that mechanisms, 
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557 policies, and procedures used for establishing Rates, Charges, and the Tiered Pricing 

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

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

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

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

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

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

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

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

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

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

568 subdivision (a) of this Article and the Irrigation Full Cost Water Rate or M&I Full Cost Water 

569 Rate, whichever is applicable. The Tiered Pricing Component for the amount of Water 

570 Delivered which exceeds 90 percent of the Contract Total shall equal the difference between (i) 

571 the Rate established under subdivision (a) of this Article and (ii) the Irrigation Full Cost Water 

572 Rate or M&I Full Cost Water Rate, whichever is applicable. For all Water Delivered pursuant to 

573 subdivision (a)(2) of Article 3 of this Contract which is in excess of 80 percent of the Contract 

574 Total, this increment shall be deemed to be divided between Irrigation Water, M&I Water and/or 

575 Other Water in the same proportion as actual deliveries of each bear to the cumulative total 

576 Water Delivered. 

577 (2) Subject to the Contracting Officer’s written approval, the 

578 Contractor may request and receive an exemption from such Tiered Pricing Component for 

579 Project Water delivered to produce a crop which the Contracting Officer determines will provide 

580 significant and quantifiable habitat values for waterfowl in fields where the water is used and the 

581 crops are produced; Provided, That the exemption from the Tiered Pricing Component for 

582 Irrigation Water shall apply only if such habitat values can be assured consistent with the 
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583 purposes of the CVPIA through binding agreements executed with or approved by the 

584 Contracting Officer prior to use of such water. 

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

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

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

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

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

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

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

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

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

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

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

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

597 impact of the proposed change. 

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

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

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

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

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

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

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

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

606 Contractor’s inability to pay. 

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

608 Officer is authorized to adjust determinations of ability to pay every five years. 
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609 (n) With respect to the Rates for M&I Water, the Contractor asserts that it is 

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

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

612 Contract, the Contractor does not waive any legal rights or remedies that it may have with 

613 respect to such disputed issues. Notwithstanding the execution of this Contract, and payments 

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

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

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

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

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

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

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

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

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

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

624 NON-INTEREST BEARING OPERATION AND MAINTENANCE DEFICITS

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

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

627 liability therefor. 

628 SALES, TRANSFERS, OR EXCHANGES OF WATER

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

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

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

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

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

634 Officer, except as provided for in subdivision (b) of this Article, and no such sales, transfers, or 
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635 exchanges shall be approved absent all appropriate environmental documentation, including but 

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

637 documentation should include, as appropriate, an analysis of ground-water impacts and 

638 economic and social effects, including environmental justice, of the proposed water transfers on 

639 both the transferor and transferee. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

657 surface water storage, or fish and wildlife resources; not lead to land conversion; and be 

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

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

660 through existing facilities with no new construction or modifications to facilities and be between 
Contract No. 2-07-20-W0261-LTR1 

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

662 Interior; and (v) comply with all applicable Federal, State, and local or tribal laws and 

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

664 under Federal law. 

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

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

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

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

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

670 Rivers. 

671 APPLICATION OF PAYMENTS AND ADJUSTMENTS 

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

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

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

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

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

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

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

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

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

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

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

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

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

685 when the work has been completed. If the advances exceed the actual costs incurred, the 
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686 difference will be refunded to the Contractor. If the actual costs exceed the Contractor's 

687 advances, the Contractor will be billed for the additional costs pursuant to Article 25. 

688 TEMPORARY REDUCTIONS--RETURN FLOWS

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

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

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

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

693 provided in this Contract. 

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

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

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

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

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

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

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

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

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

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

704 or reduction. 

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

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

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

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

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

710 claiming by, through, or under the Contractor. 
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711 CONSTRAINTS ON THE AVAILABILITY OF WATER

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

713 reasonable means to guard against a Condition of Shortage in the quantity of water to be made 

714 available to the Contractor pursuant to this Contract. In the event the Contracting Officer 

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

716 Contractor of said determination as soon as practicable. 

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

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

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

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

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

722 (c) In any Year in which there may occur a shortage for any of the reasons 

723 specified in subdivision (b) above, the Contracting Officer shall apportion the available Project 

724 Water supply among the Contractor and others entitled, under existing contracts and future 

725 contracts (to the extent such future contracts are permitted under subsections (a) and (b) of 

726 Section 3404 of the CVPIA) and renewals thereof, to receive Irrigation Water consistent with the 

727 contractual obligations of the United States. 

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

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

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

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

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

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

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

735 policy; or (iii) the applicability of such a policy. By agreeing to the foregoing, the Contracting 
Contract No. 2-07-20-W0261-LTR1 

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

737 proceeding. 

738 UNAVOIDABLE GROUNDWATER PERCOLATION

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

740 Irrigation Water to Excess Lands or Ineligible Lands within the meaning of this Contract if such 

741 lands are irrigated with groundwater that reaches the underground strata as an unavoidable result 

742 of the delivery of Irrigation Water by the Contractor to Eligible Lands. 

743 RULES AND REGULATIONS

744 14. The parties agree that the delivery of Irrigation Water or use of Federal facilities 

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

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

747 the rules and regulations promulgated by the Secretary of the Interior under Federal Reclamation 

748 law. 

749 WATER AND AIR POLLUTION CONTROL

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

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

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

753 authorities. 

754 QUALITY OF WATER

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

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

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

758 2(b) of the Act of August 26, 1937 (50 Stat. 865), as added by Section 101 of the Act of October 

759 27, 1986 (100 Stat. 3050) or other existing Federal laws. The United States is under no 

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

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

762 warrant the quality of Water Delivered to the Contractor pursuant to this Contract. 
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763 (b) The O&M of Project facilities shall be performed in such manner as is 

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

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

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

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

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

769 Service Area. 

770 WATER ACQUIRED BY THE CONTRACTOR

771 OTHER THAN FROM THE UNITED STATES

772 17. (a) Water or water rights, including Base Supply water furnished pursuant to 

773 this Contract, now owned or hereafter acquired by the Contractor other than from the United 

774 States and Irrigation Water furnished pursuant to the terms of this Contract may be 

775 simultaneously transported through the same distribution facilities of the Contractor subject to 

776 the following: (i) if the facilities utilized for commingling Irrigation Water and non-Project 

777 water were constructed without funds made available pursuant to Federal Reclamation law, the 

778 provisions of Federal Reclamation law will be applicable only to the Landholders of lands which 

779 receive Irrigation Water; (ii) the eligibility of land to receive Irrigation Water must be established 

780 through the certification requirements as specified in the Acreage Limitation Rules and 

781 Regulations (43 CFR Part 426); (iii) the water requirements of Eligible Lands within the 

782 Contractor's Service Area can be established and the quantity of Irrigation Water to be utilized is 

783 less than or equal to the quantity necessary to irrigate such Eligible Lands; and (iv) if the 

784 facilities utilized for commingling Irrigation Water and non-Project water are/were constructed 

785 with funds made available pursuant to Federal Reclamation law, the non-Project water will be 

786 subject to the acreage limitation provisions of Federal Reclamation law, unless the Contractor 

787 pays to the United States the incremental fee described in 43 CFR 426.15. In determining the 

788 incremental fee, the Contracting Officer will calculate annually the cost to the Federal 
Contract No. 2-07-20-W0261-LTR1 

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789 Government, including interest on storing or delivering non-Project water, which for purposes of 

790 this Contract shall be determined as follows: The quotient shall be the unpaid distribution 

791 system costs divided by the total irrigable acreage within the Contractor's Service Area. The 

792 incremental fee per acre is the mathematical result of such quotient times the interest rate 

793 determined using Section 202 (3) of the Act of October 12, 1982 (96 Stat. 1263). Such 

794 incremental fee will be charged to each acre of excess or full cost land within the Contractor’s 

795 Service Area that receives non-Project water through Federally financed or constructed facilities. 

796 The incremental fee calculation methodology will continue during the term of this Contract 

797 absent the promulgation of a contrary Reclamation-wide rule, regulation, or policy adopted after 

798 the Contractor has been afforded the opportunity to review and comment on the proposed rule, 

799 regulation, or policy. If such rule, regulation, or policy is adopted it shall supercede this 

800 provision. 

801 (b) Water or water rights, including Base Supply water furnished pursuant to 

802 this Contract, now owned or hereafter acquired by the Contractor, other than from the United 

803 States, may be stored, conveyed, and/or diverted through Project facilities, subject to the 

804 completion of appropriate environmental documentation, with the approval of the Contracting 

805 Officer and the execution of any contract determined by the Contracting Officer to be necessary, 

806 consistent with the following provisions: 

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

808 facilities and deliver said water to lands within the Contractor’s Service Area, including 

809 Ineligible Lands, subject to payment to the United States of an appropriate rate as determined by 

810 the applicable Project ratesetting policy, the RRA, and the Project use power policy, if such 

811 Project use power policy is applicable, each as amended, modified, or superceded from time to 

812 time. 

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

814 shall only be allowed to the extent such deliveries do not: (i) interfere with other Project 
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815 purposes as determined by the Contracting Officer; (ii) reduce the quantity or quality of water 

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

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

818 the Project facilities. 

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

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

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

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

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

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

825 diverting such non-Project water into Project facilities. 

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

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

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

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

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

831 of the facilities declared to be available by the Contracting Officer for conveyance and 

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

833 non-Project contractors. 

834 OPINIONS AND DETERMINATIONS

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

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

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

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

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

840 or unreasonable opinion or determination. Each opinion or determination by either party shall be 
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841 provided in a timely manner. Nothing in subdivision (a) of Article 18 of this Contract is 

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

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

844 statute or regulation. 

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

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

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

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

849 with the Contractor to the extent reasonably practicable. 

850 COORDINATION AND COOPERATION

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

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

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

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

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

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

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

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

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

860 and determinations to be made by the respective party. 

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

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

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

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

865 this process shall be to provide, to the extent practicable, the means of mutual communication 
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866 and interaction regarding significant decisions concerning Project operation and management on 

867 a real-time basis. 

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

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

870 intent: 

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

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

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

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

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

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

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

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

879 State of California to seek improved water resource management. 

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

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

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

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

884 management activities, and other issues as appropriate. 

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

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

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

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

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

890 CHARGES FOR DELINQUENT PAYMENTS

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

892 charges on delinquent installments or payments. When a payment is not received by the due 
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893 date, the Contractor shall pay an interest charge for each day the payment is delinquent beyond 

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

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

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

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

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

899 associated with a delinquent payment. 

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

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

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

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

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

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

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

907 accrued interest, and finally to the overdue payment. 

908 EQUAL OPPORTUNITY

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

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

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

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

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

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

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

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

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

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

919 nondiscrimination clause. 

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

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

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

923 national origin. 

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

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

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

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

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

929 employees and applicants for employment. 
Contract No. 2-07-20-W0261-LTR1 

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

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

932 of the Secretary of Labor. 

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

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

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

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

937 such rules, regulations, and orders. 

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

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

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

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

942 amended Executive Order, and such other sanctions may be imposed and remedies invoked as 

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

944 otherwise provided by law. 

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

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

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

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

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

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

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

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

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

954 GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT

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

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

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

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

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

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

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

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

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

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

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

966 obligation to require advance payment for water rates which it levies. 
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967 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

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

969 (42 U.S.C. 2000d), Section 504 of the Rehabilitation Act of 1975 (P.L. 93-112, as amended), the 

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

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

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

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

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

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

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

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

978 including permitting officials of the United States to inspect premises, programs, and documents. 

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

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

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

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

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

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

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

986 enforcement thereof. 

987 PRIVACY ACT COMPLIANCE

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

989 (the Act) and the Department of the Interior rules and regulations under the Act (43 CFR 2.45 et 

990 seq.) in maintaining Landholder acreage certification and reporting records, required to be 

991 submitted to the Contractor for compliance with Sections 206 and 228 of the Reclamation 

992 Reform Act of 1982 (96 Stat. 1266), and pursuant to 43 CFR 426.18. 

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

994 provisions of the Act (5 U.S.C. 552a(i)), the Contractor and the Contractor's employees 

995 responsible for maintaining the certification and reporting records referenced in (a) above are 

996 considered to be employees of the Department of the Interior. See 5 U.S.C. 552a(m). 

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

998 Contractor with current copies of the Interior Department Privacy Act regulations and the Bureau 

999 of Reclamation Federal Register Privacy Act System of Records Notice (Acreage Limitation--

1000 Interior, Reclamation-31) which govern the maintenance, safeguarding, and disclosure of 

1001 information contained in the Landholder's certification and reporting records. 

1002 (d) The Contracting Officer shall designate a full-time employee of the 

1003 Bureau of Reclamation to be the System Manager who shall be responsible for making decisions 
Contract No. 2-07-20-W0261-LTR1 

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1004 on denials pursuant to 43 CFR 2.61 and 2.64 amendment requests pursuant to 43 CFR 2.72. The 

1005 Contractor is authorized to grant requests by individuals for access to their own records. 

1006 (e) The Contractor shall forward promptly to the System Manager each 

1007 proposed denial of access under 43 CFR 2.64; and each request for amendment of records filed 

1008 under 43 CFR 2.71; notify the requester accordingly of such referral; and provide the System 

1009 Manager with information and records necessary to prepare an appropriate response to the 

1010 requester. These requirements do not apply to individuals seeking access to their own 

1011 certification and reporting forms filed with the Contractor pursuant to 43 CFR 426.18, unless the 

1012 requester elects to cite the Privacy Act as a basis for the request. 

1013 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

1014 25. In addition to all other payments to be made by the Contractor pursuant to this 

1015 Contract, the Contractor shall pay to the United States, within 60 days after receipt of a bill and 

1016 detailed statement submitted by the Contracting Officer to the Contractor for such specific items 

1017 of direct cost incurred by the United States for work requested by the Contractor associated with 

1018 this Contract plus indirect costs in accordance with applicable Bureau of Reclamation policies 

1019 and procedures. All such amounts referred to in this Article shall not exceed the amount agreed 

1020 to in writing in advance by the Contractor. This Article shall not apply to costs for routine 

1021 contract administration. 

1022 WATER CONSERVATION

1023 26. (a) Prior to the delivery of water provided from or conveyed through 

1024 Federally constructed or Federally financed facilities pursuant to this Contract, the Contractor 

1025 shall be implementing an effective water conservation and efficiency program based on the 

1026 Contractor's water conservation plan that has been determined by the Contracting Officer to meet 

1027 the conservation and efficiency criteria for evaluating water conservation plans established under 

1028 Federal law. The water conservation and efficiency program shall contain definite water 

1029 conservation objectives, appropriate economically feasible water conservation measures, and 

1030 time schedules for meeting those objectives. Continued Project Water delivery pursuant to this 

1031 Contract shall be contingent upon the Contractor’s continued implementation of such water 

1032 conservation program. In the event the Contractor's water conservation plan or any revised water 

1033 conservation plan completed pursuant to subdivision (d) of Article 26 of this Contract have not 
Contract No. 2-07-20-W0261-LTR1 

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1034 yet been determined by the Contracting Officer to meet such criteria, due to circumstances which 

1035 the Contracting Officer determines are beyond the control of the Contractor, water deliveries 

1036 shall be made under this Contract so long as the Contractor diligently works with the Contracting 

1037 Officer to obtain such determination at the earliest practicable date, and thereafter the Contractor 

1038 immediately begins implementing its water conservation and efficiency program in accordance 

1039 with the time schedules therein. 

1040 (b) Should the amount of M&I Water delivered pursuant to subdivision (a)(2) 

1041 of Article 3 of this Contract equal or exceed 2,000 acre-feet per Year, the Contractor shall 

1042 implement the Best Management Practices identified by the time frames issued by the California 

1043 Urban Water Conservation Council for such M&I Water unless any such practice is determined 

1044 by the Contracting Officer to be inappropriate for the Contractor. 

1045 (c) The Contractor shall submit to the Contracting Officer a report on the 

1046 status of its implementation of the water conservation plan on the reporting dates specified in the 

1047 then existing conservation and efficiency criteria established under Federal law. 

1048 (d) At five-year intervals, the Contractor shall revise its water conservation 

1049 plan to reflect the then-current conservation and efficiency criteria for evaluating water 

1050 conservation plans established under Federal law and submit such revised water management 

1051 plan to the Contracting Officer for review and evaluation. The Contracting Officer will then 

1052 determine if the water conservation plan meets Reclamation’s then-current conservation and 

1053 efficiency criteria for evaluating water conservation plans established under Federal law. 

1054 (e) If the Contractor is engaged in direct ground-water recharge, such activity 

1055 shall be described in the Contractor’s water conservation plan. 

1056 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

1057 27. Except as specifically provided in Article 17 of this Contract, the provisions of 

1058 this Contract shall not be applicable to or affect non-Project water or water rights now owned or 

1059 hereafter acquired by the Contractor or any user of such water within the Contractor's Service 
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1060 Area. Any such water shall not be considered Project Water under this Contract. In addition, 

1061 this Contract shall not be construed as limiting or curtailing any rights which the Contractor or 

1062 any water user within the Contractor's Service Area acquires or has available under any other 

1063 contract pursuant to Federal Reclamation law. 

1064 OPERATION AND MAINTENANCE BY OPERATING NON-FEDERAL ENTITY

1065 28. Omitted. 

1066 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

1067 29. The expenditure or advance of any money or the performance of any obligation of 

1068 the United States under this Contract shall be contingent upon appropriation or allotment of 

1069 funds. Absence of appropriation or allotment of funds shall not relieve the Contractor from any 

1070 obligations under this Contract. No liability shall accrue to the United States in case funds are 

1071 not appropriated or allotted. 

1072 BOOKS, RECORDS, AND REPORTS

1073 30. (a) The Contractor shall establish and maintain accounts and other books and 

1074 records pertaining to administration of the terms and conditions of this Contract, including: the 

1075 Contractor's financial transactions, water supply data, and Project land and right-of-way 

1076 agreements; the water users' land-use (crop census), land ownership, land-leasing and water use 

1077 data; and other matters that the Contracting Officer may require. Reports thereon shall be 

1078 furnished to the Contracting Officer in such form and on such date or dates as the Contracting 

1079 Officer may require. Subject to applicable Federal laws and regulations, each party to this 

1080 Contract shall have the right during office hours to examine and make copies of the other party's 

1081 books and records relating to matters covered by this Contract.

1082 (b) Notwithstanding the provisions of subdivision (a) of this Article, no 

1083 books, records, or other information shall be requested from the Contractor by the Contracting 

1084 Officer unless such books, records, or information are reasonably related to the administration or 

1085 performance of this Contract. Any such request shall allow the Contractor a reasonable period of 

1086 time within which to provide the requested books, records, or information. 

1087 (c) Omitted. 

1088 ASSIGNMENT LIMITED--SUCCESSORS AND ASSIGNS OBLIGATED

1089 31. (a) The provisions of this Contract shall apply to and bind the successors and 

1090 assigns of the parties hereto, but no assignment or transfer of this Contract or any right or interest 

1091 therein shall be valid until approved in writing by the Contracting Officer. 
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1092 (b) The assignment of any right or interest in this Contract by either party 

1093 shall not interfere with the rights or obligations of the other party to this Contract absent the 

1094 written concurrence of said other party. 

1095 (c) The Contracting Officer shall not unreasonably condition or withhold his 

1096 approval of any proposed assignment. 

1097 SEVERABILITY

1098 32. In the event that a person or entity who is neither (i) a party to a Project contract, 

1099 nor (ii) a person or entity that receives Project Water from a party to a Project contract, nor (iii) 

1100 an association or other form of organization whose primary function is to represent parties to 

1101 Project contracts, brings an action in a court of competent jurisdiction challenging the legality or 

1102 enforceability of a provision included in this Contract and said person, entity, association, or 

1103 organization obtains a final court decision holding that such provision is legally invalid or 

1104 unenforceable and the Contractor has not intervened in that lawsuit in support of the plaintiff(s), 

1105 the parties to this Contract shall use their best efforts to (i) within 30 days of the date of such 

1106 final court decision identify by mutual agreement the provisions in this Contract which must be 

1107 revised, and (ii) within three months thereafter promptly agree on the appropriate revision(s). 

1108 The time periods specified above may be extended by mutual agreement of the parties. Pending 

1109 the completion of the actions designated above, to the extent it can do so without violating any 

1110 applicable provisions of law, the United States shall continue to make the quantities of Project 

1111 Water specified in this Contract available to the Contractor pursuant to the provisions of this 

1112 Contract which were not found to be legally invalid or unenforceable in the final court decision. 

1113 RESOLUTION OF DISPUTES

1114 33. Should any dispute arise concerning any provisions of this Contract, or the 

1115 parties’ rights and obligations thereunder, the parties shall meet and confer in an attempt to 

1116 resolve the dispute. Prior to the Contractor commencing any legal action, or the Contracting 

1117 Officer referring any matter to Department of Justice, the party shall provide to the other party 
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1118 30 days’ written notice of the intent to take such action; Provided, That such notice shall not be 

1119 required where a delay in commencing an action would prejudice the interests of the party that 

1120 intends to file suit. During the 30-day notice period, the Contractor and the Contracting Officer 

1121 shall meet and confer in an attempt to resolve the dispute. Except as specifically provided, 

1122 nothing herein is intended to waive or abridge any right or remedy that the Contractor or the 

1123 United States may have. 

1124 OFFICIALS NOT TO BENEFIT

1125 34. No Member of or Delegate to Congress, Resident Commissioner, or official of the 

1126 Contractor shall benefit from this Contract other than as a water user or landowner in the same 

1127 manner as other water users or landowners. 

1128 CHANGES IN CONTRACTOR’S SERVICE AREA

1129 35. (a) While this Contract is in effect, no change may be made in the 

1130 Contractor's Service Area, by inclusion or exclusion of lands, dissolution, consolidation, merger, 

1131 or otherwise, except upon the Contracting Officer's written consent. 

1132 (b) Within 30 days of receipt of a request for such a change, the Contracting 

1133 Officer will notify the Contractor of any additional information required by the Contracting 

1134 Officer for processing said request, and both parties will meet to establish a mutually agreeable 

1135 schedule for timely completion of the process. Such process will analyze whether the proposed 

1136 change is likely to: (i) result in the use of Project Water contrary to the terms of this Contract; 

1137 (ii) impair the ability of the Contractor to pay for Project Water furnished under this Contract or 

1138 to pay for any Federally-constructed facilities for which the Contractor is responsible; and (iii) 

1139 have an impact on any Project Water rights applications, permits, or licenses. In addition, the 

1140 Contracting Officer shall comply with the NEPA and the ESA. The Contractor will be 

1141 responsible for all costs incurred by the Contracting Officer in this process, and such costs will 

1142 be paid in accordance with Article 25 of this Contract. 

1143 FEDERAL LAWS

1144 36. By entering into this Contract, the Contractor does not waive its rights to contest 

1145 the validity or application in connection with the performance of the terms and conditions of this 
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1146 Contract of any Federal law or regulation; Provided, That the Contractor agrees to comply with 

1147 the terms and conditions of this Contract unless and until relief from application of such Federal 

1148 law or regulation to the implementing provision of the Contract is granted by a court of 

1149 competent jurisdiction. 

1150 NOTICES

1151 37. Any notice, demand, or request authorized or required by this Contract shall be 

1152 deemed to have been given, on behalf of the Contractor, when mailed, postage prepaid, or 

1153 delivered to the Area Manager, Bureau of Reclamation, Northern California Area Office, 16349 

1154 Shasta Dam Boulevard, Shasta Lake, California 96019, and on behalf of the United States, when 

1155 mailed, postage prepaid, or delivered to the Board of Directors of the Stony Creek Water 

1156 District, 940 County Road 303, Elk Creek, California 95939. The designation of the addressee 

1157 or the address may be changed by notice given in the same manner as provided in this Article for 

1158 other notices. 

1159 CONFIRMATION OF CONTRACT

1160 38. The Contractor, after the execution of this Contract, shall promptly seek to secure 

1161 a decree of a court of competent jurisdiction of the State of California, confirming the execution 

1162 of this Contract. The Contractor shall furnish the United States a certified copy of the final 

1163 decree, the validation proceedings, and all pertinent supporting records of the court approving 

1164 and confirming this Contract, and decreeing and adjudging it to be lawful, valid, and binding on 

1165 the Contractor. 

1166 AGREEMENT ON WATER QUANTITIES

1167 39. (a) During the term of this Contract, and any renewals thereof, it shall 

1168 constitute full agreement as between the United States and the Contractor as to the quantities of 

1169 water and the allocation thereof between Base Supply and Project Water which may be diverted 

1170 by the Contractor from Stony Creek and East Park Reservoir for beneficial use on the land 

1171 shown on Exhibit “A” which said diversion, use and allocation shall not be disturbed so long as 

1172 the Contractor shall fulfill all of its obligations hereunder, and the Contractor shall not claim any 

1173 right against the United States in conflict with the provisions hereof. 

1174 (b) Nothing herein contained is intended to or does limit rights of the 

1175 Contractor against other than the United States or of the United States against any person other 

1176 than the Contractor; Provided, however, That in the event the Contractor, the United States, or 
Contract No. 2-07-20-W0261-LTR1 

45

1177 any other person shall become party to a general adjudication of rights to the use of water of the 

1178 Sacramento River system, this Contract shall not jeopardize the rights or position of either party 

1179 hereto or of any other person and the rights of all such persons in respect to the use of such water 

1180 shall be determined in such proceedings the same as if this Contract had not been entered into, 

1181 and if final judgment in any such general adjudication shall determine that the rights of the 

1182 parties hereto are different from the rights as assumed herein, the United States shall submit to 

1183 the Contractor an amendment to give effect to such judgment and the Contract shall be deemed 

1184 to have been amended accordingly unless within 60 days after submission of such amendment to 

1185 the Contractor, the Contractor elects to terminate the Contract or within the same period of time 

1186 the parties agree upon mutually satisfactory amendments to give effect to such judgment. 

1187 (c) In the event this Contract terminates, the rights of the parties to thereafter 

1188 divert and use water shall exist as if this Contract had not been entered into. However, the fact 

1189 that this Contract places a limit on the total supply to be diverted annually by the Contractor 

1190 during the contract term and segregates it into Base Supply and Project Water shall not 

1191 jeopardize the rights or position of either party with respect to its water rights or the yield thereof 

1192 at all times after the contract terminates. It is further agreed that the Contractor at all times will 

1193 first use water to the use of which it is entitled by virtue of its own water rights, and neither the 

1194 provisions of this Contract, action taken thereunder, nor payments made thereunder to the United 

1195 States by the Contractor shall be construed as an admission that any part of the water used by the 

1196 Contractor during the term of this Contract was in fact water to which it would not have been 

1197 entitled under water rights owned by it nor shall receipt of payments thereunder by the United 

1198 States from the Contractor be construed as an admission that any part of the water used by the 

1199 Contractor during the term of this Contract was in fact water to which it would have been 

1200 entitled under water rights owned by it. 

1201 HAZARDOUS WASTE

1202 40. (a) The Contractor shall comply with all applicable Federal, State, and local 

1203 laws and regulations, and Reclamation policies and instructions, existing or hereafter enacted or 
Contract No. 2-07-20-W0261-LTR1 

46

1204 promulgated, concerning any hazardous material that will be used, produced, transported, stored 

1205 or disposed of on or in lands, waters or facilities owned by the United States or administered by 

1206 Reclamation. 

1207 (b) “Hazardous material” means any substance, pollutant or contaminant 

1208 listed as hazardous under the Comprehensive Environmental Response, Compensation, and 

1209 Liability Act of 1980, as amended, 42 U.S.C. 9601, et seq., and the regulations promulgated 

1210 pursuant to that Act. 

1211 (c) The Contractor may not allow contamination of lands, waters or facilities 

1212 owned by the United States or administered by Reclamation by hazardous materials, thermal 

1213 pollution, refuse, garbage, sewage effluent, industrial waste, petroleum products, mine tailings, 

1214 mineral salts, pesticides (including, but not limited to, the misuse of pesticides), pesticide 

1215 containers or any other pollutants. 

1216 (d) The Contractor shall report to Reclamation, within 24 hours of its 

1217 occurrence, any event which may or does result in pollution or contamination adversely affecting 

1218 lands, water or facilities owned by the United States or administered by Reclamation. 

1219 (e) Violation of any of the provisions of this Article shall constitute grounds 

1220 for immediate termination of this Contract and shall make the Contractor liable for the cost of 

1221 full and complete remediation and/or restoration of any Federal resources or facilities that are 

1222 adversely affected as a result of the violation. 

1223 (f) The Contractor agrees to include the provisions contained in paragraphs 

1224 (a) through (e) of this Article in any subcontract or third party contract it may enter into pursuant 

1225 to this Contract. 

1226 (g) Reclamation agrees to provide information necessary for the Contractor, 

1227 using reasonable diligence, to comply with the provisions of this Article. 
Contract No. 2-07-20-W0261-LTR1 

47

1228 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of 

1229 the day and year first above written. 

1230 THE UNITED STATES OF AMERICA 

1231 By: ______________________________________ 

1232 Regional Director, Mid-Pacific Region 

1233 Bureau of Reclamation 

1234 STONY CREEK WATER DISTRICT 

1235 By: ______________________________________ 

1236 President of the Board of Directors 

1237 Attest: 

1238 By: _______________________________ 

1239 Secretary of the Board of Directors 

1240 (I:\LTRC\Draft LTRC\04-19-2004 Stony Creek LTRC Final Draft Contract.doc) 
Contract No. 2-07-20-W0261-LTR1 

EXHIBIT A

[Map or Description of Contractor’s Service Area]
Contract No. 2-07-20-W0261-LTR1 

EXHIBIT B 

2004 Water Rates and Charges

Stony Creek Water District – Black Butte Project

Calculated 

 Cost of Service Payment Capacity 1/ 

 Irrigation M&I Irrigation 

COST OF SERVICE (COS) RATES:

Capital Rates $ 3.17 $17.33 $ 0.00 

O&M Rates: 

Water Marketing 7.59 5.01 7.59 

Storage 5.83 6.38 5.83 

Deficit Rates: 

Interest Bearing 0.01 0.00 0.01 

CFO/PRF Adj. Rate 2/ 1.29 0.00 1.29

TOTAL $17.89 $28.72 $14.72

TIERED PRICING COMPONENT >80% ≤ 90% OF 

CONTRACT TOTAL ((Full Cost Rate – COS Rate)/2) $2.30 $3.89

TIERED PRICING COMPONENT >90% OF 

CONTRACT TOTAL (Full Cost Rate – COS Rate) $4.60 $7.77

IRRIGATION FULL-COST RATES:

 Section 202(3) /3 $22.49 $22.49

 Section 205(a)(3) /4 $24.26 $24.26

M&I FULL-COST RATE 5/ $0.00

CHARGES UNDER P.L. 102-575 TO THE

RESTORATION FUND 6/ 

Restoration Payments (3407(d)(2)(A)) $ 7.82 $15.64 $ 0.00

1/ Established pursuant to the results of the Payment Capacity Analysis for the Tehama-Colusa Water Users 

Association Service Area as announced by letter dated February 10, 1995. 

2/ Chief Financial Officer (CFO) adjustment and Provision for Replacement (PFR) expense is being distributed 

over a 5-year period beginning in FY 2003 for those contractors that requested those costs be deferred. 

3/ Rate is applicable to a Qualified Recipient or to a Limited Recipient receiving irrigation water on or before 

October 1, 1981. 

4/ Rate is applicable to a Limited Recipient that did not receive irrigation water on or before October 1, 1981. 

5/ Interest rates used in the calculation of the M&I Full Cost Rate shall comply with the Interest Rate Methodology 

contained in Section 202(3)(B) and (C) of the Reclamation Reform Act of October 12, 1982 (96 Stat. 1263), as 

amended. 

6/ Restoration fund charges are payments in addition to the water rates and were determined pursuant to Title 

XXXIV of Public Law 102-575. Restoration fund charges are on a fiscal year basis (10/1 - 9/30). 
Contract No. 2-07-20-W0261-LTR1 

EXHIBIT C 

SCHEDULE OF MONTHLY DIVERSIONS OF WATER 

 Project Water 

 Base Supply Supply Total Supply 

 (Acre-Feet) (Acre-Feet) (Acre-Feet)

March 15 90 105 

April 40 290 330 

May 60 410 470 

June 75 525 600 

July 90 610 700 

August 75 475 600 

September 55 330 435 

October 15 90 105 

November 0 100 100 

Total 425 2,920 3,345 

Point(s) of Diversion (River Mile): Stony Creek (above Stony Gorge Dam)