R.O. Draft 02/26-2003 

 R.O. Draft 03/06-2003 

Contract No. 14-06-200-940A 

Standard Irrigation Form 

UNITED STATES 

DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

Central Valley Project, California 

CONTRACT BETWEEN THE UNITED STATES AND 

M. & T. INCORPORATED, 

DIVERTER OF WATER FROM SACRAMENTO RIVER SOURCES, 

SETTLING WATER RIGHTS DISPUTES AND 

PROVIDING FOR PROJECT WATER 

Table of Contents

Article No. Title Page No. 

Preamble 1 

Explanatory Recitals 2-3 

1 Definitions 3-6 

2 Term of Contract 7 

3 Water to be Furnished to Contractor 7-10 

4 Return Flow 10-11 

5 Constraints on the Availability of Water 11-12 

6 Integrated Water Management and Partnerships 12-13 

7 Use of Water Furnished to Contractor 13 

8 Rate and Method of Payment for Water 14-18 

9 Agreement on Water Quantities 19-21 

10 Measurement of Water 21-23 

11 Rules and Regulations 23 

12 General Obligation – Benefits Conditioned 

Upon Payment 23-24 

13 Charges For Delinquent Payments 24 

14 Quality of Water 24-25 

15 Water and Air Pollution Control 25 

16 Equal Opportunity 25-26 

17 Compliance With Civil Rights Laws 

And Regulations 26-27 
Table of Contents – continued

Article No. Title Page No.

18 Mingling of Contractor’s Project and 

Non-Project Water 27-28 

19 Books, Records, and Reports 28 

20 Change Of Place Of Use Or Organization 28-29 

21 Consolidation Of Contracting Entities 29 

22 Notices 29 

23 Assignment Limited – Successors and 

Assigns Obligated 29-30 

24 Officials Not to Benefit 30 

25 Contingent Upon Appropriation or 

Allotment of Funds 30 

26 Confirmation of Contract 30 

27 Unavoidable Groundwater Percolation 30 

28 Privacy Act Compliance 31 

29 Water Conservation 31-33 

30 Opinions And Determinations 33 

31 Contractor to Pay Certain Miscellaneous Costs 34 

32 Waiver of Default 34 

 Signatures 35 

Exhibit A Schedule of Monthly Diversions of Water 

Exhibit B Map of Contractor’s Ownership 

Exhibit C Unit Duties 

Exhibit D Rates and Charges 
1 R.O. Draft 02/26-2003 

2 R.O. Draft 03/06-2003 

3 Contract No. 14-06-200-940A 

4 Standard Irrigation District Form 

5 

6 UNITED STATES 

7 DEPARTMENT OF THE INTERIOR 

8 BUREAU OF RECLAMATION 

9 Central Valley Project, California 

10 

11 CONTRACT BETWEEN THE UNITED STATES AND 

12 M. & T. INCORPORATED, 

13 DIVERTER OF WATER FROM SACRAMENTO RIVER SOURCES, 

14 SETTLING WATER RIGHTS DISPUTES AND 

15 PROVIDING FOR PROJECT WATER 

16 

17 

18 THIS CONTRACT, hereinafter referred to as “Settlement Contract,” is 

19 entered into by THE UNITED STATES OF AMERICA, hereinafter referred to as the 

20 United States, made this _____ day of ____________________, 2004, pursuant to the 

21 applicable authority granted to it generally in the Act of June 17, 1902 (32 Stat. 388), and 

22 acts amendatory or supplementary thereto, including, but not limited to, the Acts of 

23 August 26, 1937 (50 Stat. 844), as amended and supplemented, August 4, 1939 (53 Stat. 

24 1187), as amended and supplemented, including, but not limited to, Sections 9 and 14 

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

26 Stat. 1262), October 27, 1986 (100 Stat. 3050), as amended, and Title XXXIV of the Act 

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

28 Reclamation law, and M. & T. INCORPORATED, hereinafter referred to as the 

29 Contractor, a corporation acting pursuant to Sections 12003 and 12004 of the California 

30 Water Code, with its principal place of business in California; 

31 WITNESSETH, that: 
2

1 EXPLANATORY RECITALS

[1st] 2 WHEREAS, the United States has constructed and is operating the Central 

3 Valley Project, California, for multiple purposes pursuant to its statutory authority; and 

[2nd] 4 WHEREAS, the Contractor has rights to divert, is diverting, and will 

5 continue to divert for reasonable beneficial use, water from the natural flow of the 

6 Sacramento River and tributaries thereto, that would have been flowing therein if the 

7 Central Valley Project were not in existence; and 

[3rd] 8 WHEREAS, the construction and operation of the integrated and 

9 coordinated Central Valley Project has changed and will further change the regimen of 

10 the Sacramento, American, San Joaquin, and Trinity Rivers and the Sacramento-San 

11 Joaquin Delta from unregulated flow to regulated flow; and 

[4th] 12 WHEREAS, the United States has rights to divert, is diverting, and will 

13 continue to divert waters from said Rivers and said Delta in connection with the operation 

14 of said Central Valley Project, and 

[5th] 15 WHEREAS, the Contractor and the United States had a dispute over the 

16 respective rights of the parties to divert and use water from the regulated flow of the 

17 Sacramento River which threatened to result in litigation, and as a means to settle that 

18 dispute entered into Contract No. 14-06-200-940A, as revised, hereinafter referred to as 

19 the Existing Contract, which established terms for the delivery to the Contractor of 

20 Central Valley Project Water, and the quantities of Base Supply the United States and the 

21 Contractor agreed may be diverted by the Contractor from the Sacramento River pursuant 

22 to such contract; and 
3

[6th] 1 WHEREAS, the United States and the Contractor disagree with respect to 

2 the authority of the United States to change the quantities of Base Supply and/or Project 

3 Water specified as available for diversion in this Settlement Contract from the quantities 

4 specified in the Existing Contract, and other issues related thereto. That dispute was the 

5 subject of litigation in a lawsuit entitled Glenn-Colusa Irrigation District, et al. v. United 

6 States, et al. [Civ. No. S-01-1816 GEB/JFM (E.D. Cal.)], but that litigation was 

7 dismissed, without prejudice, pursuant to a stipulation of dismissal filed by the parties 

8 thereto on August 29, 2002. Notwithstanding that dismissal, the Contractor and the 

9 United States enter into this Settlement Contract to renew the Existing Contract, pursuant 

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

11 of California; and

[7th] 12 WHEREAS, to assure the Contractor of the enjoyment and use of the 

13 regulated flow of the said Rivers and the Delta, and to provide for the economical 

14 operation of the Central Valley Project by, and the reimbursement to, the United States 

15 for expenditures made for said Project. 

16 NOW, THEREFORE, in consideration of the performance of the herein 

17 contained provisions, conditions, and covenants, it is agreed as follows:

18 DEFINITIONS

19 1. When used herein, unless otherwise expressed or incompatible with the 

20 intent hereof, the term: 

21 (a) “Base Supply” shall mean the quantity of Surface Water 

22 established in Articles 3 and 5 which may be diverted by the Contractor from the 
4

1 Sacramento River each month during the period April through October of each Year 

2 without payment to the United States for such quantities diverted; 

3 (b) “Basin-Wide Water Management Plan” shall mean the mutually 

4 agreeable Sacramento River Basinwide Water Management Plan, dated _______, 

5 developed by Glenn-Colusa Irrigation District, Maxwell Irrigation District, Natomas 

6 Central Mutual Water Company, Pelger Mutual Water Company, Princeton-Codora7 Glenn Irrigation District, Provident Irrigation District, Reclamation District 108, Sutter 

8 Mutual Water Company, Anderson-Cottonwood Irrigation District, M&T, Inc., Meridian 

9 Farms Water Company, Reclamation District 1004 and the U.S. Bureau of Reclamation. 

10 (c) “Charges” shall mean the payments for Project Water that the 

11 Contractor is required to pay to the United States in addition to the “Rates” specified in 

12 this Settlement Contract. The Contracting Officer will, on an annual basis, determine the 

13 extent of these Charges. The type and amount of each Charge shall be specified in 

14 Exhibit D; 

15 (d) “Contract Total” shall mean the sum of the Base Supply and 

16 Project Water available for diversion by the Contractor for the period April 1 through 

17 October 31; 

18 (e) “Critical Year” shall mean any Year in which either of the 

19 following eventualities exists: 

20 (1) The forecasted full natural inflow to Shasta Lake for the 

21 current Water Year, as such forecast is made by the United States on or before February 

22 15 and reviewed as frequently thereafter as conditions and information warrant, is equal 

23 to or less than 3.2 million acre-feet; or 
5

1 (2) The total accumulated actual deficiencies below 4 million 

2 acre-feet in the immediately prior Water Year or series of successive prior Water Years 

3 each of which had inflows of less than 4 million acre-feet, together with the forecasted 

4 deficiency for the current Water Year, exceed 800,000 acre-feet. 

5 For the purpose of determining a Critical Year, the computation of inflow 

6 to Shasta Lake shall be performed in a manner that considers the extent of upstream 

7 development above Shasta Lake during the year in question, and shall be used as the full 

8 natural flow to Shasta Lake. In the event that major construction has occurred or occurs 

9 above Shasta Lake after September 1, 1963 and which has materially altered or alters the 

10 regimen of the stream systems contributing to Shasta Lake, the computed inflow to 

11 Shasta Lake used to define a Critical Year will be adjusted to eliminate the effect of such 

12 material alterations. After consultation with the State of California, the National Weather 

13 Service, and other recognized forecasting agencies, the Contracting Officer will select the 

14 forecast to be used and will make the details of it available to the Contractor. The same 

15 forecasts used by the United States for the operation of the Project shall be used to make 

16 the forecasts hereunder; 

17 (f) “CVPIA” shall mean the Central Valley Project Improvement Act, 

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

19 (g) “Eligible Lands” shall mean all lands to which Project Water may 

20 be delivered in accordance with Section 204 of the Reclamation Reform Act of October 

21 12, 1982 (96 Stat. 1263), as amended, hereinafter referred to as RRA;
6

1 (h) “Excess Lands” shall mean all lands in excess of the limitations 

2 contained in Section 204 of the RRA, other than those lands exempt from acreage 

3 limitation under Federal Reclamation law; 

4 (i) “Full Cost Rate” shall mean that water rate described in Sections 

5 205(a)(3) or 202(3) of the RRA, whichever is applicable; 

6 (j) “Ineligible Lands” shall mean all lands to which Project Water 

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

8 (k) “Landholder” shall mean a party that directly or indirectly owns or 

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

10 (l) “Project” shall mean the Central Valley Project owned by the 

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

12 (m) “Project Water” shall mean all Surface Water diverted or 

13 scheduled to be diverted each month during the period April through October of each 

14 Year by the Contractor from the Sacramento River which is in excess of the Base Supply. 

15 The United States recognizes the right of the Contractor to make arrangements for 

16 acquisition of water from projects of others than the United States for delivery through 

17 the Sacramento River and tributaries subject to written agreement between Contractor 

18 and the United States as to identification of such water which water when so identified 

19 shall not be deemed Project Water under this Settlement Contract; 

20 (n) “Rates” shall mean the payments for Project Water determined 

21 annually by the Contracting Officer in accordance with the then current applicable water 

22 ratesetting policies for the Project, as described in subdivision (a) of Article 8 of this 

23 Settlement Contract; 
7

1 (o) “Secretary” or “Contracting Officer” shall mean the Secretary of 

2 the Interior, a duly appointed successor, or an authorized representative acting pursuant to 

3 any authority of the Secretary and through any agency of the Department of the Interior; 

4 (p) “Surface Water” shall mean only those waters that are considered 

5 as surface water under California law; 

6 (q) “Water Year” shall mean the period commencing with October 1 

7 of one year and extending through September 30 of the next; and 

8 (r) “Year” shall mean a calendar year. 

9 TERM OF SETTLEMENT CONTRACT

10 2. (a) This Settlement Contract shall become effective April 1, 2004, and 

11 shall remain in effect until and including March 31, 2044: Provided, that under terms and 

12 conditions mutually agreeable to the parties hereto, renewals may be made for successive 

13 periods not to exceed 40 years each. The terms and conditions of each renewal shall be 

14 agreed upon not later than one year prior to the expiration of the then existing Settlement 

15 Contract. 

16 (b) With respect to Project Water and the portions of this Settlement 

17 Contract pertaining thereto, upon written request by the Contractor of the Secretary made 

18 not later than one year prior to the expiration of this Settlement Contract, whenever, 

19 account being taken of the amount then credited to the costs of construction of water 

20 supply works, the remaining amount of construction costs of water supply work which is 

21 properly assignable for ultimate return by the Contractor as established by the Secretary 

22 of the Interior pursuant to (3) of Section 1 of Public Law 643 (70 Stat. 483), probably can 

23 be repaid to the United States within the term of a contract under subsection 9(d) of the 
8

1 1939 Reclamation Project Act (53 Stat. 1187), the relevant portions of this Settlement 

2 Contract may be converted to a contract under said subsection 9(d) upon terms and 

3 conditions mutually agreeable to the United States and the Contractor. The Secretary 

4 shall make a determination 10 years after the date of execution of this Settlement

5 Contract, and every five years thereafter, of whether a conversion to a contract under said 

6 subsection 9(d) can be accomplished pursuant to Public Law 643. Notwithstanding any 

7 provision of this Settlement Contract, the Contractor reserves and shall have all rights and 

8 benefits under Public Law 643. 

9 WATER TO BE FURNISHED TO CONTRACTOR

10 3. (a) Subject to the conditions, limitations, and provisions hereinafter 

11 expressed, the Contractor is hereby entitled and authorized to divert from the Sacramento 

12 River at the locations shown in Exhibit A, for beneficial use within the area delineated on 

13 Exhibit B, (both Exhibits are attached hereto and made a part hereof), the Contract Total 

14 designated in Exhibit A, or any revision thereof, in accordance with the monthly 

15 operating schedule required by Article 3(c) of this Settlement Contract, Provided, 

16 however, that the Contractor reserves the right to, and may at its option, divert water from 

17 Butte Creek to the extent permitted under Permits Nos. 4743, 4744, 5847, 5848; Licenses 

18 Nos. 2614, 2615, 2616, 2617; and the Decree rendered on May 25, 1920, by the Superior 

19 Court of Sutter County in the matter of Central California Investment Company v. John 

20 Crouch Land Company, et al., Action No. 1355, for beneficial use within the area 

21 delineated on Exhibit B. The lawfulness of the Contractor’s points of diversion for said 

22 area from Butte Creek will not be challenged by, or on behalf of, the Bureau of 

23 Reclamation except in the case of a general adjudication as provided in subdivisions (b) 
9

1 and (c) of Article 9. The quantity of any water diverted under this Settlement Contract 

2 from the Sacramento River, during the period April through October, for use on any lands 

3 delineated on Exhibit B, by the owner of such lands or otherwise shall constitute a part of 

4 the Contract Total as shown on Exhibit A and shall be subject to all the provisions of this 

5 Settlement Contract relating to such Contract Total as if such diversion were made by the 

6 Contractor. 

7 (b) The Contractor may have acquired rights to divert water from the 

8 Sacramento River during the period April through October, that were obtained after the 

9 date of execution of the Existing Contract, or the Contractor may acquire such rights in 

10 the future. All diversions made from the Sacramento River, pursuant to such rights, 

11 during the period April through October, shall not be considered a part of the quantity of 

12 Base Supply and Project Water specified in Exhibit A; Provided, that the quantities 

13 diverted pursuant to the above rights shall be identified on the schedule submitted 

14 pursuant to Article 3(c) below, and shall not be substituted for any Base Supply or Project 

15 Water; Provided, further, that any such identified quantities of other acquired rights may 

16 be diverted by the Contractor before incurring any fee pursuant to Article 3(c)(1), below. 

17 (c) Before April 1 and before the first day of each month thereafter 

18 when a revision is needed, the Contractor shall submit a written schedule to the 

19 Contracting Officer indicating the Contract Total to be diverted by the Contractor during 

20 each month under this Settlement Contract. The United States shall furnish water to the 

21 Contractor in accordance with the monthly operating schedule or any revisions thereof. 

22 However, the United States recognizes the need of the Contractor to change from time to 
10

1 time its monthly diversions of water from the quantities shown in Exhibit A; the 

2 Contractor may make such changes, provided: 

3 (1) that for the quantity of Base Supply diverted in excess of 

4 the monthly quantity shown in Exhibit A, and as may be reduced in accordance with 

5 Article 5(a), during June, July, August, September, or October of any Water Year, the 

6 Contractor shall be charged a rescheduling fee equal to 50% of the sum of the storage 

7 operations and maintenance rate and the storage capital rate components of the Project 

8 ratesetting policy. 

9 (2) that in no event shall the total quantity scheduled for 

10 diversion by the Contractor from the Sacramento River: 

11 (i) During the period April through October exceed the 

12 aggregate of the Contract Total for that period shown in Exhibit A or any revision 

13 thereof; 

14 (ii) During the period July through September exceed 

15 the aggregate of the Contract Total for that period shown in Exhibit A or any revision 

16 thereof. 

17 (d) In the event conditions warrant, the Contracting Officer reserves 

18 the right to require the Contractor to submit, at least 72 hours prior to the beginning of 

19 each weekly period, its estimate of daily diversion requirements for each such period 

20 from the Sacramento River: Provided, however, that changes during any such period 

21 may be made upon the giving of 72 hours’ notice thereof to the Contracting Officer. 

22 (e) No sale, transfer, exchange, or other disposal of any of the 

23 Contract Total designated in Exhibit A or the right to the use thereof for use on land other 
11

1 than that shown on Exhibit B shall be made by the Contractor without first obtaining the 

2 written consent of the Contracting Officer. Such consent will not be unreasonably 

3 withheld and a decision will be rendered in a timely manner. For short-term actions that 

4 will occur within one year or less, the decision will be rendered within 30 days after 

5 receipt of a complete written proposal. For long-term actions that will occur in a period 

6 longer than one year, the decision will be rendered within 90 days after receipt of a 

7 complete written proposal. For a proposal to be deemed complete by the Contracting 

8 Officer, it must comply with all provisions required by State and Federal law, including 

9 information sufficient to enable the Contracting Officer to comply with the National 

10 Environmental Policy Act, the Endangered Species Act, and applicable rules or 

11 regulations then in effect; Provided that, such consent does not authorize the use of 

12 Federal facilities to facilitate or effectuate the sale, transfer, exchange or other disposal of 

13 Base Supply. Such use of Federal facilities will be the subject of a separate agreement to 

14 be entered into between the Contractor and Reclamation. 

15 (f) For the purpose of determining whether section 3405(a)(1)(M) of 

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

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

18 other area of origin, as those terms are utilized under California law. 

19 (g) Nothing herein contained shall prevent the Contractor from 

20 diverting water during the months of November through March for beneficial use on the 

21 land shown on Exhibit B or elsewhere to the extent authorized under the laws of the State 

22 of California. 
12

1 (h) The United States assumes no responsibility for and neither it nor 

2 its officers, agents, or employees shall have any liability for or on account of: 

3 (1) The quality of water to be diverted by the Contractor; 

4 (2) The control, carriage, handling, use, disposal, or 

5 distribution of water diverted by the Contractor outside the facilities constructed and then 

6 being operated and maintained by or on behalf of the United States; 

7 (3) Claims of damage of any nature whatsoever, including but 

8 not limited to, property loss or damage, personal injury, or death arising out of or 

9 connected with the control, carriage, handling, use, disposal, or distribution of said water 

10 outside of the hereinabove referred to facilities; and 

11 (4) Any damage whether direct or indirect arising out of or in 

12 any manner caused by a shortage of water whether such shortage be on account of errors 

13 in operation, drought, or unavoidable causes. 

14 RETURN FLOW

15 4. Nothing herein shall be construed as an abandonment or a relinquishment 

16 by the United States of any right it may have to the use of waste, seepage, and return flow 

17 water derived from water diverted by the Contractor hereunder and which escapes or is 

18 discharged beyond the boundaries of the lands shown on Exhibit B; Provided, that this 

19 shall not be construed as claiming for the United States any right to such water which is 

20 recovered by the Contractor pursuant to California law from within the boundaries of the 

21 lands shown on Exhibit B, and which is being used pursuant to this Settlement Contract 

22 for surface irrigation or underground storage for the benefit of the lands shown on Exhibit 

23 B by the Contractor. 
13

1 CONSTRAINTS ON THE AVAILABILITY OF WATER

2 5. (a) In a Critical Year, the Contractor’s Base Supply and Project Water 

3 agreed to be diverted during the period April through October of the Year in which the 

4 principal portion of the Critical Year occurs and, each monthly quantity of said period 

5 shall be reduced by twenty-five percent.

6 (b) The amount of any overpayment by the Contractor shall, at its 

7 option, be refunded or credited upon amounts to become due to the United States from 

8 the Contractor under the provisions hereof in the ensuing Year. To the extent of such 

9 deficiency such adjustment of overpayment shall constitute the sole remedy of the 

10 Contractor. 

11 INTEGRATED WATER MANAGEMENT AND PARTNERSHIPS

12 6. The Contractor and United States desire to work together to maximize the 

13 reasonable beneficial use of water for their mutual benefit. As a consequence, the United 

14 States and the Contractor will work in partnership and with others within the Sacramento 

15 Valley, including other Contractors, to facilitate the better integration within the 

16 Sacramento Valley of all water supplies including, but not limited to, the better 

17 management and integration of surface water and groundwater, the development and 

18 better utilization of surface water storage, the effective utilization of waste, seepage and 

19 return flow water, and other operational and management options that may be identified 

20 in the future. 

21 USE OF WATER FURNISHED TO CONTRACTOR

22 7. (a) Project Water furnished to the Contractor pursuant to this 

23 Settlement Contract shall not be delivered or furnished by the Contractor for any 
14

1 purposes other than agricultural purposes without the written consent of the Contracting 

2 Officer. For purposes of this Settlement Contract, “agricultural purposes” includes, but is 

3 not restricted to, the watering of livestock, incidental domestic use including related 

4 landscape irrigation, or underground water replenishment. 

5 (b) The Contractor shall comply with requirements applicable to the 

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

7 execution of this Settlement Contract undertaken pursuant to Section 7 of the Endangered 

8 Species Act of 1973, as amended, that are within the Contractor’s legal authority to 

9 implement. The Contractor shall comply with the limitations or requirements imposed by 

10 environmental documentation applicable to the Contractor and within its legal authority 

11 to implement. The Existing Contract, which evidences in excess of 40 years of 

12 diversions, for agricultural uses, of the quantities of water provided for in Article 3, and 

13 the underlying water rights of the Contractor will be considered in developing an 

14 appropriate base-line for the Biological Assessment prepared pursuant to the Endangered 

15 Species Act, and in any other needed environmental review. Nothing herein shall be 

16 construed to prevent the Contractor from challenging or seeking judicial relief in a court 

17 of competent jurisdiction with respect to any biological opinion or other environmental 

18 documentation referred to in this Article. 

19 RATE AND METHOD OF PAYMENT FOR WATER

20 8. (a) The Contractor shall make payments to the United States as 

21 provided in this Article for all Project Water shown in Exhibit A as follows: 

22 (1) seventy-five percent of the amount shown as Project Water 

23 shall be paid for by the Contractor in each Year; and in addition 
15

1 (2) the Contractor shall pay for Project Water actually diverted 

2 in excess of seventy-five percent of the amount shown as Project Water. 

3 Such payments shall be at Rates and Charges established in accordance with: 

4 (i) the Secretary’s then-current ratesetting policies for the Project; and (ii) applicable 

5 Reclamation law and associated rules and regulations, or policies: Provided, that if the 

6 Contractor desires to use Project Water for other than agricultural use the Rates and 

7 Charges set forth above will be adjusted by the Contracting Officer to the applicable 

8 Rates and Charges for such use. The Rates and Charges applicable to the Contractor 

9 upon execution of this Settlement Contract are set forth in Exhibit D, as may be revised 

10 annually. The Secretary’s ratesetting policies for the Project shall be amended, modified, 

11 or superseded only through a public notice and comment procedure. The Contracting 

12 Officer shall adjust the amount of Project Water for which payment is required to the 

13 extent of any reduction in diversions of Project Water made in accordance with the water 

14 conservation provisions of Article 29 (e). 

15 (b) The Contracting Officer shall notify the Contractor of the Rates 

16 and Charges as follows: 

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

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

19 to the period October 1, of the current Year, through September 30, of the following 

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

21 months to review and comment on such estimates. On or before September 15 of each 

22 Year, the Contracting Officer shall notify the Contractor in writing of the Charges to be 
16

1 in effect during the period October 1 of the current Year, through September 30, of the 

2 following Year, and such notification shall revise Exhibit D. 

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

4 shall make available to the Contractor an estimate of the Rates for Project Water for the 

5 following Year and the computations and cost allocations upon which those Rates are 

6 based. The Contractor shall be allowed not less than two months to review and comment 

7 on such computations and cost allocations. By December 31 of each Year, the 

8 Contracting Officer shall provide the Contractor with the final Rates to be in effect for 

9 the upcoming Year, and such notification shall revise Exhibit D. 

10 (c) The Contractor shall pay the United States for Project Water in the 

11 following manner: 

12 (1) With respect to Rates, prior to May 1 of each Year, the 

13 Contractor shall pay the United States one-half the total amount payable pursuant to 

14 subdivision (a) of this Article and the remainder shall be paid prior to July 1 or such later 

15 date or dates as may be specified by the United States in a written notice to the 

16 Contractor: Provided, however, that if at any time during the Year the amount of Project 

17 Water diverted by the Contractor shall equal the amount for which payment has been 

18 made, the Contractor shall pay for the remaining amount of such water as shown in 

19 Exhibit A in advance of any further diversion of Project Water. 

20 (2) With respect to Charges, the Contractor shall also make a 

21 payment to the United States, in addition to the Rate(s) in subdivision (c)(1) of this 

22 Article, at the Charges then in effect, before the end of the month following the month of 

23 delivery or transfer. The payments shall be consistent with the quantities of Project 
17

1 Water delivered or transferred. Adjustment for overpayment or underpayment of 

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

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

4 shall be computed pursuant to Article 13 of this Settlement Contract. 

5 (d) Payments to be made by the Contractor to the United States under 

6 this Settlement Contract may be paid from any revenues available to the Contractor. 

7 (1) All revenues received by the United States from the 

8 Contractor relating to the delivery of Project Water or the delivery of non-Project water 

9 through Project facilities shall be allocated and applied in accordance with Federal 

10 Reclamation law and the associated rules or regulations, and the then current Project 

11 ratesetting policies for Irrigation Water. 

12 (e) The Contracting Officer shall keep its accounts pertaining to the 

13 administration of the financial terms and conditions of its long-term water service and 

14 Settlement Contracts, in accordance with applicable Federal standards, so as to reflect the 

15 application of Project costs and revenues. The Contracting Officer shall, each Year upon 

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

17 and Contractor expense allocations, the disposition of all Project and Contractor 

18 revenues, and a summary of all water delivery information. The Contracting Officer and 

19 the Contractor shall enter into good faith negotiations to resolve any discrepancies or 

20 disputes relating to accountings, reports, or information. 

21 (f) The parties acknowledge and agree that the efficient administration 

22 of this Settlement Contract is their mutual goal. Recognizing that experience has 

23 demonstrated that mechanisms, policies, and procedures used for establishing Rates and 
18

1 Charges and/or for making and allocating payments, other than those set forth in this 

2 Article may be in the mutual best interest of the parties, it is expressly agreed that the 

3 parties may enter into agreements to modify the mechanisms, policies, and procedures for 

4 any of those purposes while this Settlement Contract is in effect without amendment of 

5 this Settlement Contract. 

6 (g) For the term of this Settlement Contract, Rates under the respective 

7 ratesetting policies for the Project will be established to recover only reimbursable 

8 operation and maintenance (including any deficits) and capital costs of the Project, as 

9 those terms are used in the then current Project ratesetting policies, and interest, where 

10 appropriate, except in instances where a minimum Rate is applicable in accordance with 

11 the relevant Project ratesetting policy. Proposed changes of significance in practices 

12 which implement the ratesetting policies for the Project will not be implemented until the 

13 Contracting Officer has provided the Contractor an opportunity to discuss the nature, 

14 need, and impact of the proposed change. The Contractor retains all rights to challenge 

15 the validity of Rates and Charges imposed pursuant to this Settlement Contract, including 

16 but not limited to operation and maintenance expenses and operation and maintenance 

17 deficits, in an appropriate administrative or judicial proceeding. 

18 (h) Except as provided in subsection 3405(a)(1)(B) of the CVPIA, the 

19 Rates for Project Water transferred, exchanged, or otherwise disposed of, by the 

20 Contractor shall be the Contractor’s Rates adjusted upward or downward to reflect the 

21 changed costs of delivery (if any) of the transferred, exchanged, or otherwise disposed of 

22 Project Water to the transferee’s point of delivery in accordance with the then-current 

23 ratesetting policies for the Project. Except as provided in subsection 3407(d)(2)(A) of the 
19

1 CVPIA, the Charges for Project Water transferred, exchanged, or otherwise disposed of, 

2 by the Contractor shall be the Contractor’s Charges specified in Exhibit D. If the 

3 Contractor is receiving lower Rates and Charges because of inability to pay and is 

4 transferring, exchanging, or otherwise disposing of Project Water to another entity whose 

5 Rates and Charges are not adjusted due to inability to pay, the Rates and Charges for 

6 transferred, exchanged, or otherwise disposed of Project Water shall be the Contractor’s 

7 Rates and Charges unadjusted for ability to pay. 

8 (i) Pursuant to the Act of October 27, 1986 (100 Stat. 3050), the 

9 Contracting Officer is authorized to adjust determinations of ability to pay every five 

10 years. 

11 (j) Each payment to be made pursuant to subdivisions (a) and (b) of 

12 this Article shall be made at the office of the Bureau of Reclamation, Mid-Pacific Region, 

13 File No. 11546, P.O. Box 6000, San Francisco, California, 94160-1546, or at such other 

14 place as the United States may designate in a written notice to the said Contractor. 

15 Payments shall be made by cash transaction, wire, or any other mechanism as may be 

16 agreed to in writing by the Contractor and the Contracting Officer. In the event there 

17 should be a default in the payment of the amount due, the delinquent payment provisions 

18 of Article 13 shall apply. The Contractor shall not be relieved of the whole or any part of 

19 its said obligation by, on account of, or notwithstanding, as the case may be: 

20 (1) Its failure, refusal, or neglect to divert seventy-five percent 

21 of the quantity of Project Water shown on Exhibit A; 

22 (2) The default in payment to it by any water user of 

23 assessments, tolls, or other charges levied by or owing to said Contractor; 
20

1 (3) Any judicial determination that any assessment, toll, or 

2 other charge referred to in subsection 8(c)(2) of this Settlement Contract is irregular, 

3 void, or ineffectual; or 

4 (4) Any injunctive process enjoining or restraining the 

5 Contractor from making or collecting any such assessment, toll, or other charge referred 

6 to in subsection 8(c)(2) of this Settlement Contract.

7 AGREEMENT ON WATER QUANTITIES

8 9. (a) During the term of this Settlement Contract and any renewals 

9 thereof: 

10 (1) It shall constitute full agreement as between the United 

11 States and the Contractor as to the quantities of water and the allocation thereof between 

12 Base Supply and Project Water which may be diverted by the Contractor from the 

13 Sacramento River for beneficial use on the land shown on Exhibit B which said 

14 diversion, use, and allocation shall not be disturbed so long as the Contractor shall fulfill 

15 all of its obligations hereunder; 

16 (2) Neither party shall claim any right against the other in 

17 conflict with the provisions of Article 9(a)(1) hereof. 

18 (b) Nothing herein contained is intended to or does limit rights of the 

19 Contractor against others than the United States or of the United States against any 

20 person other than the Contractor: Provided, however, that in the event the Contractor, the 

21 United States, or any other person shall become a party to a general adjudication of rights 

22 to the use of water of the Sacramento River system, this Settlement Contract shall not 

23 jeopardize the rights or position of either party hereto or of any other person and the 
21

1 rights of all such persons in respect to the use of such water shall be determined in such 

2 proceedings the same as if this Settlement Contract had not been entered into, and if final 

3 judgment in any such general adjudication shall determine that the rights of the parties 

4 hereto are different from the rights as assumed herein, the parties shall negotiate an 

5 amendment to give effect to such judgment. In the event the parties are unable to agree 

6 on an appropriate amendment they shall, within 60 days of determining that there is an 

7 impasse, employ the services of a neutral mediator, experienced in resolving water rights 

8 disputes, to assist in resolving the impasse. The cost of the mediation will be shared 

9 equally. A failure to reach agreement on an amendment within 60 days of the end of 

10 mediation will cause the immediate termination of this Settlement Contract. 

11 (c) In the event that the California State Water Resources Control 

12 Board or a court of competent jurisdiction issues a final decision or order modifying the 

13 terms and conditions of the water rights of either party to this Settlement Contract in 

14 order to impose Bay-Delta water quality obligations, the Contractor and the United States 

15 shall promptly meet to determine whether or not to modify any of the terms of this 

16 Settlement Contract to comply with the final decision or order, including, but not limited 

17 to, the applicability of the rescheduling charge in Article 3(c)(1) of this Settlement 

18 Contract. If within 60 days of the date of the issuance of the final decision or order the 

19 parties are not able to reach agreement regarding either the need to modify this 

20 Settlement Contract or the manner in which this Settlement Contract is to be modified, 

21 the parties shall promptly retain a neutral mediator, experienced in resolving water right 

22 disputes, to assist the parties in resolving their dispute. The cost of the mediator shall be 

23 shared equally. In the event that either of the parties to this Settlement Contract 
22

1 determines that the parties will not be able to develop mutually-agreeable modification(s) 

2 to this Settlement Contract even with the assistance of a mediator, either of the parties to 

3 this Settlement Contract may attempt to resolve the impasse by seeking appropriate 

4 judicial relief including, but not limited to, filing a general adjudication of the rights to 

5 the use of water in the Sacramento River system. The foregoing provisions of this sub6 article shall only apply to the incremental obligations contained within a final decision or 

7 order of the State Water Resources Control Board that reflects a modification to the 

8 obligations imposed in State Water Resources Control Board Revised Water Rights 

9 Decision 1641 dated March 15, 2000, and its associated 1995 Water Quality Control Plan 

10 which, taken together, will be considered the baseline for the application of the 

11 provisions of this sub-article. 

12 (d) In the event this Settlement Contract terminates, the rights 

13 of the parties to thereafter divert and use water shall exist as if this Settlement Contract 

14 had not been entered into; and the fact that as a compromise settlement of a controversy 

15 as to the respective rights of the parties to divert and use water and the yield of such 

16 rights during the term hereof, this Settlement Contract places a limit on the Contract 

17 Total to be diverted annually by the Contractor during the Settlement Contract term and 

18 segregates it into Base Supply and Project Water shall not jeopardize the rights or 

19 position of either party with respect to its water rights or the yield thereof at all times 

20 after the Settlement Contract terminates. It is further agreed that the Contractor at all 

21 times will first use water to the use of which it is entitled by virtue of its own water 

22 rights, and neither the provisions of this Settlement Contract, action taken thereunder, nor 

23 payments made thereunder to the United States by the Contractor shall be construed as an 
23

1 admission that any part of the water used by the Contractor during the term of this 

2 Settlement Contract was in fact water to which it would not have been entitled under 

3 water rights owned by it nor shall receipt of payments thereunder by the United States 

4 from the Contractor be construed as an admission that any part of the water used by the 

5 Contractor during the term of this Settlement Contract was in fact water to which it 

6 would have been entitled under water rights owned by it. 

7 MEASUREMENT OF WATER

8 10. (a) All water diverted by the Contractor from the Sacramento River 

9 will be diverted at the existing point or points of diversion shown on Exhibit A or at such 

10 other points as may be mutually agreed upon in writing by the Contracting Officer and 

11 the Contractor. 

12 (b) All water diverted from the Sacramento River pursuant to this 

13 Settlement Contract will be measured or caused to be measured by the United States at 

14 each point of diversion with existing equipment or equipment to be installed, operated, 

15 and maintained by the United States, and/or others, under contract with and at the option 

16 of the United States. The equipment and methods used to make such measurement shall 

17 be in accordance with sound engineering practices. Upon request of the Contractor, the 

18 accuracy of such measurements will be investigated by the Contracting Officer and any 

19 errors appearing therein will be corrected. 

20 (c) The right of ingress to and egress from all points of diversion is 

21 hereby granted to all authorized employees of the United States. The Contractor also 

22 hereby grants to the United States the right to install, operate, maintain and replace such 
24

1 equipment on diversion or carriage facilities at each point of diversion as the Contracting 

2 Officer deems necessary. 

3 (d) The Contractor shall not modify, alter, remove, or replace 

4 diversion facilities or do any other act which would alter the effectiveness or accuracy of 

5 the measuring equipment installed by the United States or its representatives unless and 

6 until the Contracting Officer has been notified with due diligence and has been given an 

7 opportunity to modify such measuring equipment in such manner as may be necessary or 

8 appropriate. In the event of an emergency the Contractor shall notify the United States 

9 within a reasonable time thereafter as to the existence of the emergency and the nature 

10 and extent of such modification, alteration, removal, or replacement of diversion 

11 facilities. 

12 (e) The Contractor shall pay the United States for the costs to repair, 

13 relocate, or replace measurement equipment when the Contractor modifies, alters, 

14 removes, or replaces diversion or carriage facilities. 

15 (f) Contractor and Contracting Officer shall develop a mutually 

16 agreeable surface water delivery water measurement program which shall be 

17 implemented by the Contractor, and such measurement program shall be consistent with 

18 the conservation and efficiency criteria for evaluating water conservation plans as 

19 provided in Article 29 (a). 

20 (g) All new surface water delivery systems installed within the lands 

21 delineated on Exhibit B after the effective date of this Settlement Contract shall also 

22 comply with the measurement provisions described in this Article. 
25

1 RULES AND REGULATIONS

2 11. The parties agree that the delivery of Project Water for irrigation use or 

3 use of Federal facilities pursuant to this Settlement Contract is subject to Federal 

4 Reclamation law, including but not limited to, the Reclamation Reform Act of 1982 (43 

5 U.S.C. 390aa et seq.), as amended and supplemented, and the rules and regulations 

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

7 GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT

8 

9 12. (a) The obligation of the Contractor to pay the United States as 

10 provided in this Settlement Contract is a general obligation of the Contractor 

11 notwithstanding the manner in which the obligation may be distributed among the 

12 Contractor's water users and notwithstanding the default of individual water users in their 

13 obligations to the Contractor. 

14 

15 (b) The payment of Charges becoming due hereunder is a condition 

16 precedent to receiving benefits under this Settlement Contract. The United States shall 

17 not make water available to the Contractor through Project facilities during any period in 

18 which the Contractor may be in arrears in the advance payment of water Rates due the 

19 United States. The Contractor shall not furnish water made available pursuant to this 

20 Settlement Contract for lands or parties which are in arrears in the advance payment of 

21 water rates levied or established by the Contractor. 

22 

23 (c) With respect to subdivision (b) of this Article, the Contractor shall 

24 have no obligation to require advance payment for water Rates which it levies. 

25 

26 CHARGES FOR DELINQUENT PAYMENTS

27 

28 13. (a) The Contractor shall be subject to interest, administrative and 

29 penalty charges on delinquent installments or payments. When a payment is not received 

30 by the due date, the Contractor shall pay an interest charge for each day the payment is 

31 delinquent beyond the due date. When a payment becomes 60 days delinquent, the 

32 Contractor shall pay an administrative charge to cover additional costs of billing and 

33 processing the delinquent payment. When a payment is delinquent 90 days or more, the 

34 Contractor shall pay an additional penalty charge of six percent per year for each day the 

35 payment is delinquent beyond the due date. Further, the Contractor shall pay any fees 

36 incurred for debt collection services associated with a delinquent payment. 

37 

38 (b) The interest charge rate shall be the greater of the rate prescribed 

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

40 overdue payments, or the interest rate of one-half of one percent per month prescribed by 
26

1 Section 6 of the Reclamation Project Act of 1939 (Public Law 76-260). The interest 

2 charge rate shall be determined as of the due date and remain fixed for the duration of the 

3 delinquent period. 

4 

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

6 amount received shall be applied, first to the penalty, second to the administrative 

7 charges, third to the accrued interest, and finally to the overdue payment. 

8 

9 QUALITY OF WATER

10 14. The operation and maintenance of Project facilities shall be performed in 

11 such manner as is practicable to maintain the quality of raw water made available through 

12 such facilities at the highest level reasonably attainable as determined by the Contracting 

13 Officer. The United States does not warrant the quality of water and is under no 

14 obligation to construct or furnish water treatment facilities to maintain or better the 

15 quality of water. 

16 WATER AND AIR POLLUTION CONTROL

17 15. The Contractor, in carrying out this Settlement Contract, shall comply 

18 with all applicable water and air pollution laws and regulations of the United States and 

19 the State of California, and shall obtain all required permits or licenses from the 

20 appropriate Federal, State, or local authorities. 

21 EQUAL OPPORTUNITY

22 16. During the performance of this Settlement Contract, the Contractor agrees 

23 as follows: 

24 

25 (a) The Contractor will not discriminate against any employee or 

26 applicant for employment because of race, color, religion, sex, or national origin. The 

27 Contractor will take affirmative action to ensure that applicants are employed, and that 

28 employees are treated during employment, without regard to their race, color, religion, 

29 sex, or national origin. Such action shall include, but not be limited to, the following: 

30 Employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; 

31 layoff or termination, rates of payment or other forms of compensation; and selection for 

32 training, including apprenticeship. The Contractor agrees to post in conspicuous places, 
27

1 available to employees and applicants for employment, notices to be provided by the 

2 Contracting Officer setting forth the provisions of this nondiscrimination clause. 

3 

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

5 employees placed by or on behalf of the Contractor, state that all qualified applicants will 

6 receive consideration for employment without discrimination because of race, color, 

7 religion, sex, or national origin. 

8 

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

10 workers with which it has a collective bargaining agreement or other contract or 

11 understanding, a notice, to be provided by the Contracting Officer, advising the said labor 

12 union or workers' representative of the Contractor's commitments under Section 202 of 

13 Executive Order No. 11246 of September 24, 1965, as amended, and shall post copies of 

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

15 

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

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

18 orders of the Secretary of Labor. 

19 

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

21 said amended Executive Order and by the rules, regulations, and orders of the Secretary 

22 of Labor, or pursuant thereto, and will permit access to its books, records, and accounts 

23 by the Contracting Officer and the Secretary of Labor for purposes of investigation to 

24 ascertain compliance with such rules, regulations, and orders. 

25 

26 (f) In the event of the Contractor's noncompliance with the 

27 nondiscrimination clauses of this Settlement Contract or with any of the said rules, 

28 regulations, or orders, this Settlement Contract may be canceled, terminated, or 

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

30 Government contracts in accordance with procedures authorized in said amended 

31 Executive Order, and such other sanctions may be imposed and remedies invoked as 

32 provided in said Executive Order, or by rule, regulation, or order of the Secretary of 

33 Labor, or as otherwise provided by law. 

34 

35 (g) The Contractor will include the provisions of paragraphs (a) 

36 through (g) in every subcontract or purchase order unless exempted by the rules, 

37 regulations, or orders of the Secretary of Labor issued pursuant to Section 204 of said 

38 amended Executive Order, so that such provisions will be binding upon each 

39 subcontractor or vendor. The Contractor will take such action with respect to any 

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

41 enforcing such provisions, including sanctions for noncompliance: Provided, however, 

42 that in the event the Contractor becomes involved in, or is threatened with, litigation with 

43 a subcontractor or vendor as a result of such direction, the Contractor may request the 

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

45 
28

1 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

2 

3 17. Omitted 

4 

5 MINGLING OF CONTRACTOR’S PROJECT AND NON-PROJECT WATER

6 18. (a) Project Water must of necessity be transported by the Contractor to 

7 its water users by means of the same works and channels used for the transport of its non8 Project Water including Base Supply. Notwithstanding such mingling of water, the 

9 provisions of Article 11 hereof shall be applicable only to Project Water, and such 

10 mingling of water shall not in any manner subject to the provisions of Article 11 hereof 

11 the Contractor’s non-Project water including Base Supply. 

12 (b) If required in accordance with subdivision (c) of this Article, the 

13 Contractor shall install and maintain such measuring equipment and distribution facilities 

14 and maintain such records as may be necessary to determine the amounts of water 

15 delivered to Excess Lands served by the Contractor. The Contractor shall not within any 

16 month deliver to Ineligible Lands water in excess of the non-Project Water, including 

17 Base Supply, for that month. The Contracting Officer or authorized representative shall 

18 have the right at all reasonable times to inspect such records and measuring equipment. 

19 (c) The Contractor will not be considered in violation of the 

20 requirement that Project Water be delivered only to Eligible Lands during any month of 

21 the irrigation season that the water requirement for beneficial use on Eligible Lands for 

22 that month is equal to or in excess of the Project Water for that month as shown on 

23 Exhibit A or any revision thereof pursuant to subdivision (c) of Article 3. The water 

24 requirement for beneficial use on Eligible Lands will be determined by multiplying: 
29

1 (1) the number of irrigable acres of the particular types of 

2 crops grown in that year on the acreage designated as eligible by 

3 (2) the Unit Duties as set forth in Exhibit C attached hereto and 

4 made a part hereof, or by such other Unit Duties mutually agreed upon by the Contractor 

5 and the Contracting Officer. In order to make the computation of the water requirement 

6 for Eligible Lands, on April 1 of each Year and concurrently with its order for water for 

7 the irrigation season, the Contractor shall designate the acreage of and type of crops to be 

8 grown on its Eligible Lands that irrigation season. During any month the water 

9 requirement as above determined for crops growing on Eligible Lands during such month 

10 is equal to or in excess of the Project Water for that month as provided herein the 

11 Contractor shall not be required to measure the water delivered to Excess Lands. Any 

12 month the said water requirement is less than the amount of Project Water as provided 

13 herein, the Contractor will be required to measure water delivered to excess land in 

14 accordance with subdivision (b) hereof. 

15 BOOKS, RECORDS, AND REPORTS

16 19. The Contractor shall establish and maintain accounts and other books and 

17 records pertaining to administration of the terms and conditions of this Settlement 

18 Contract, including: the Contractor's financial transactions, water supply data, and 

19 Project land and right-of-way agreements; the water users' land-use (crop census), land 

20 ownership, land-leasing and water use data; and other matters that the Contracting 

21 Officer may require. Reports thereon shall be furnished to the Contracting Officer in 

22 such form and on such date or dates as the Contracting Officer may require. Subject to 

23 applicable Federal laws and regulations, each party to this Settlement Contract shall have 

24 the right during office hours to examine and make copies of each other’s books and 

25 official records relating to matters covered by this Settlement Contract. 

26 
30

1 CHANGE OF PLACE OF USE OR ORGANIZATION

2 20. Omitted 

3 CONSOLIDATION OF CONTRACTING ENTITIES

4 

5 21. Consolidation of Contractors may be approved by the Contracting Officer 

6 provided: (i) the Contracting Officer approves the form and organization of the resulting 

7 entity and the utilization by it of the Contract Total; and (ii) the obligations of the 

8 Contractors are assumed by such entity. 

9 No such consolidation shall be valid unless and until approved by the Contracting 

10 Officer. 

11 NOTICES

12 22. Any notice, demand, or request authorized or required by this Settlement Contract 

13 shall be deemed to have been given, on behalf of the Contractor, when mailed, postage 

14 prepaid, or delivered to the Area Manager, Northern California Area Office, Bureau of 

15 Reclamation, 16349 Shasta Dam Blvd., Shasta Lake, California, 96019, and on behalf of 

16 the United States, when mailed, postage prepaid, or delivered to M. & T. Incorporated, 

17 3964 Chico River Road, Chico, California 95928. The designation of the addressee or 

18 the address may be changed by notice given in the same manner as provided in this 

19 Article for other notices. 

20 

21 ASSIGNMENT LIMITED--SUCCESSORS AND ASSIGNS OBLIGATED

22 

23 23. Omitted 

24 

25 OFFICIALS NOT TO BENEFIT

26 

27 24. (a) No Member of or Delegate to Congress, Resident Commissioner, 

28 or official of the Contractor shall benefit from this Settlement Contract other than as a 

29 water user or landowner in the same manner as other water users or landowners. 

30 

31 (b) No officer or member of the governing board of the Contractor 

32 shall receive any benefit that may arise by reason of this Settlement Contract other than 

33 as a landowner within the Contractor’s service area and in the same manner as other 

34 landowners within the said service area. 

35 
31

1 CONTINGENT UPON APPROPRIATION OR ALLOTMENT OF FUNDS

2 

3 25. The expenditure or advance of any money or the performance of any 

4 obligation of the United States under this Settlement Contract shall be contingent upon 

5 appropriation or allotment of funds. Absence of appropriation or allotment of funds shall 

6 not relieve the Contractor from any obligations under this Settlement Contract. No 

7 liability shall accrue to the United States in case funds are not appropriated or allotted. 

8 

9 CONFIRMATION OF SETTLEMENT CONTRACT

10 26. The Contractor, after the execution of this Settlement Contract, shall 

11 promptly seek to secure a decree of a court of competent jurisdiction of the State of 

12 California, if appropriate, confirming the execution of this Settlement Contract. The 

13 Contractor shall furnish the United States a certified copy of the final decree, the 

14 validation proceedings, and all pertinent supporting records of the court approving and 

15 confirming this Settlement Contract, and decreeing and adjudging it to be lawful, valid, 

16 and binding on the Contractor. This Settlement Contract shall not be binding on the 

17 United States until such final decree has been secured. 

18 

19 UNAVOIDABLE GROUNDWATER PERCOLATION

20 27. To the extent applicable, the Contractor shall not be deemed to have 

21 delivered Project Water to Excess Lands or Ineligible Lands if such lands are irrigated 

22 with groundwater that reaches the underground strata as an unavoidable result of the 

23 delivery of Project Water by the Contractor to Eligible Lands. 

24 PRIVACY ACT COMPLIANCE

25 

26 28. (a) The Contractor shall comply with the Privacy Act of 1974 (5 

27 U.S.C. 552a) (the Act) and the Department of the Interior rules and regulations under the 

28 Act (43 CFR 2.45 et seq.) in maintaining Landholder acreage certification and reporting 

29 records, required to be submitted to the Contractor for compliance with Sections 206 and 

30 228 of the Reclamation Reform Act of 1982 (96 Stat. 1266), and pursuant to 43 CFR 

31 426.18. 

32 

33 (b) With respect to the application and administration of the criminal 

34 penalty provisions of the Act (5 U.S.C. 552a(i)), the Contractor and the Contractor's 

35 employees responsible for maintaining the certification and reporting records referenced 

36 in (a) above are considered to be employees of the Department of the Interior. See 5 

37 U.S.C. 552a(m). 

38 

39 (c) The Contracting Officer or a designated representative shall 

40 provide the Contractor with current copies of the Interior Department Privacy Act 
32

1 regulations and the Bureau of Reclamation Federal Register Privacy Act System of 

2 Records Notice (Acreage Limitation--Interior, Reclamation-31) which govern the 

3 maintenance, safeguarding, and disclosure of information contained in the Landholder's 

4 certification and reporting records. 

5 

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

7 Bureau of Reclamation to be the System Manager who shall be responsible for making 

8 decisions on denials pursuant to 43 CFR 2.61 and 2.64 amendment requests pursuant to 

9 43 CFR 2.72. The Contractor is authorized to grant requests by individuals for access to 

10 their own records. 

11 

12 (e) The Contractor shall forward promptly to the System Manager 

13 each proposed denial of access under 43 CFR 2.64; and each request for amendment of 

14 records filed under 43 CFR 2.71; notify the requester accordingly of such referral; and 

15 provide the System Manager with information and records necessary to prepare an 

16 appropriate response to the requester. These requirements do not apply to individuals 

17 seeking access to their own certification and reporting forms filed with the Contractor 

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

19 for the request. 

20 

21 WATER CONSERVATION

22 29. (a) Prior to the diversion of Project Water, the Contractor shall be 

23 implementing an effective water conservation and efficiency program based on the 

24 Basin-Wide Water Management Plan and/or Contractor's water conservation plan that 

25 has been determined by the Contracting Officer to meet the conservation and efficiency 

26 criteria for evaluating water conservation plans established under Federal law. The water 

27 conservation and efficiency program shall contain definite water conservation objectives, 

28 appropriate economically feasible water conservation measures, and time schedules for 

29 meeting those objectives. Continued diversion of Project Water pursuant to this 

30 Settlement Contract shall be contingent upon the Contractor’s continued implementation 

31 of such water conservation program. In the event the Contractor's water conservation 

32 plan or any revised water conservation plan completed pursuant to subdivision (c) of 

33 Article 29 of this Settlement Contract have not yet been determined by the Contracting 
33

1 Officer to meet such criteria, due to circumstances which the Contracting Officer 

2 determines are beyond the control of the Contractor, Project Water deliveries shall be 

3 made under this Settlement Contract so long as the Contractor diligently works with the 

4 Contracting Officer to obtain such determination at the earliest practicable date, and 

5 thereafter the Contractor immediately begins implementing its water conservation and 

6 efficiency program in accordance with the time schedules therein. 

7 (b) The Contractor shall submit to the Contracting Officer a report on 

8 the status of its implementation of the water conservation plan on the reporting dates 

9 specified in the then existing conservation and efficiency criteria established under 

10 Federal law. 

11 (c) At five year intervals, the Contractor shall revise its water 

12 conservation plan to reflect the then current conservation and efficiency criteria for 

13 evaluating water conservation plans established under Federal law and submit such 

14 revised water management plan to the Contracting Officer for review and evaluation. 

15 The Contracting Officer will then determine if the water conservation plan meets 

16 Reclamation’s then current conservation and efficiency criteria for evaluating water 

17 conservation plans established under Federal law. 

18 (d) If the Contractor is engaged in direct ground-water recharge, such 

19 activity shall be described in the Contractor’s water conservation plan. 

20 (e) In order to provide incentives for water conservation, the 

21 Contractor may reduce the amount of Project Water for which payment is required under 

22 Article 8(a) in accordance with the provisions of this Article 29(e). 
34

1 (1) On or before February 15 of any Water Year, the 

2 Contractor may file with Reclamation an offer to reduce Project Water use, hereinafter 

3 referred to as Offer. The Offer shall specify the maximum quantity of Project Water to 

4 be diverted by the Contractor for each month that Project Water is available for that 

5 Water Year under this Settlement Contract. The Contracting Officer shall provide the 

6 Contractor with a decision, in writing, to the Offer on or before March 15 of that Water 

7 Year. The dates specified in this Article 29(e)(1) can be changed if mutually agreed to, in 

8 writing, by the Contractor and Contracting Officer. 

9 (2) If Reclamation accepts the Offer, the Contractor’s payment 

10 obligation under Article 8(a)(1) shall be reduced to the maximum quantity of Project 

11 Water to be diverted by the Contractor as specified in the Offer. The Contractor shall not 

12 divert Project Water in excess of the quantities set forth in the Offer: Provided, however, 

13 if the Contractor’s diversions of Project Water exceed the quantities set forth in the Offer, 

14 the Contractor shall pay to Reclamation the applicable Rates and Charges plus an amount 

15 equal to the applicable Rates and Charges, unadjusted for ability to pay, for each acre16 foot of Project Water diverted in excess of the quantities set forth in the Offer. 

17 (3) If Reclamation decides not to accept the Offer, the 

18 Contractor’s payment obligation will remain as specified in Article 8(a)(1). 

19 (4) The provisions of this Article 29(e) shall be in addition to 

20 and shall not affect the provisions of Article 3(e) pertaining to the sale, transfer, exchange 

21 or other disposal of the Contract Total designated in Exhibit A. 

22 

23 
35

1 OPINIONS AND DETERMINATIONS

2 

3 30. (a) Where the terms of this Settlement Contract provide for actions to 

4 be based upon the opinion or determination of either party to this Settlement Contract, 

5 said terms shall not be construed as permitting such action to be predicated upon 

6 arbitrary, capricious, or unreasonable opinions or determinations. Both parties, 

7 notwithstanding any other provisions of this Settlement Contract, expressly reserve the 

8 right to seek relief from and appropriate adjustment for any such arbitrary, capricious, or 

9 unreasonable opinion or determination. Each opinion or determination by either party 

10 shall be provided in a timely manner. Nothing in subdivision (a) of Article 30 of this 

11 Settlement Contract is intended to or shall affect or alter the standard of judicial review 

12 applicable under Federal law to any opinion or determination implementing a specific 

13 provision of Federal law embodied in statute or regulation. 

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

15 determinations necessary to administer this Settlement Contract that are consistent with 

16 the provisions of this Settlement Contract, the laws of the United States and of the State 

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

18 Such determinations shall be made in consultation with the Contractor to the extent 

19 reasonably practicable. 

20 (c) In the event that the United States, as a result of litigation or 

21 agreement, or failure to require an agreement, give substantially more favorable treatment 

22 to any other diverter from the Sacramento River under similar circumstances than that 

23 accorded under this contract to the Contractor, the United States agrees to renegotiate this 

24 contract to provide comparable treatment to the Contractor hereunder.
36

1 

2 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

3 31. (a) In addition to all other payments to be made by the Contractor 

4 pursuant to this Settlement Contract, the Contractor shall pay to the United States, within 

5 60 days after receipt of a bill and detailed statement submitted by the Contracting Officer 

6 to the Contractor for such specific items of direct cost incurred by the United States for 

7 work requested by the Contractor associated with this Settlement Contract plus indirect 

8 costs in accordance with applicable Bureau of Reclamation policies and procedures. All 

9 such amounts referred to in this Article shall not exceed the amount agreed to in writing 

10 in advance by the Contractor. This Article shall not apply to costs for routine contract 

11 administration. 

12 (b) All advances for miscellaneous costs incurred for work requested 

13 by the Contractor pursuant to Article 31 of this Settlement Contract shall be adjusted to 

14 reflect the actual costs when the work has been completed. If the advances exceed the 

15 actual costs incurred, the difference will be refunded to the Contractor. If the actual costs 

16 exceed the Contractor's advances, the Contractor will be billed for the additional costs 

17 pursuant to Article 31 of this Settlement Contract. 

18 WAIVER OF DEFAULT

19 32. The waiver by either party to this Settlement Contract as to any default 

20 shall not be construed as a waiver of any other default or as authority of the other party to 

21 continue such default or to make, do, or perform, or not to make, do, or perform, as the 

22 case may be, any act or thing which would constitute a default. 

23 CONTRACT ASSIGNMENT OR TERMINATION UPON TRANSFER OF LAND
37

1 33. (a) The rights and obligations of the Contractor may be transferred in 

2 connection with the transfer of title to the land or any portion thereof delineated on 

3 Exhibit B on the following terms and conditions: 

4 (1) A voluntary inter vivos transfer may be made, upon mutual 

5 agreement of the United States and the Contractor, to a person eligible to hold title to the 

6 land as a nonexcess landowner: 

7 (2) A voluntary inter vivos transfer may be made to a person 

8 ineligible to hold title to the land as a non-excess landowner provided that no Project 

9 water may thereafter be used on excess lands and the assignee shall not be privileged to 

10 obtain such use of Project water on excess. 

11 (3) In the event the title of the Contractor to such land, or any 

12 portion thereof, is transferred by operation of law, such as by conveyance in satisfaction 

13 of a mortgage, by inheritance, or by devise, the rights and obligations of the Contractor 

14 shall pass with the title and the land shall be subject to provisions of Reclamation law 

15 pertaining to such transfers. Any transfer of the rights and obligations of this contract by 

16 the person acquiring title by operation of law shall be in accordance with provisions of 

17 subsection (1) or (2) above. 

18 (b) The Contractor shall notify the Contracting Officer in writing of 

19 any proposed transfer of this contract. In addition, in the case of a partial assignment the 

20 Contract shall: 

21 (1) Designate the proportionate quantities of base supply and 

22 Project water which it desires to assign; 
38

1 (2) Furnish the United States with a copy of the deed 

2 transferring title. 

3 (c) No transfer of this contract shall be effective unless and until 

4 approved by the Contracting Officer, and, if approved, shall be effective from the date of 

5 such approval. 

6 (d) Upon mutual agreement between the United States and the 

7 Contractor the contract or a portion thereof may be terminated and the new landowner 

8 will have the privilege of entering into a contract for water service for a proportionate 

9 share of the total supply provided he is duly qualified to receive water for such land. 

10 TERMINATION

11 34. This contract will terminate upon mutual agreement of the parties prior to 

12 the end of the term or any renewal thereof. 

13 IN WITNESS WHEREOF, the parties hereto have executed this Settlement 

14 Contract as of the day and year first hereinabove written. 

15 

16 THE UNITED STATES OF AMERICA 

17 

18 

19 

20 By: __________________________ 

21 Regional Director, Mid-Pacific Region 

22 Bureau of Reclamation 

23 

24 

25 (SEAL) 

26 

27 

28 M. & T. INCORPORATED 

29 

30 

31 By:______________________________ 

32 President 

33 

34 
39

1 ATTEST: 

2 

3 

4 ________________________________ 

5 Secretary 

6 

7 
40

1 Exhibit A 

2 

3 M. & T. Incorporated 

4 Contract No. 14-06-200-940A 

5 Sacramento River 

6 

7 SCHEDULE OF MONTHLY DIVERSIONS OF WATER

8 

9 

10 

11 Base Supply Project Water Total Supply

12 (acre-feet) (acre-feet) (acre-feet) 

13 

14 April 1,200 0 1,200

15 

16 May 1,640 0 1,640

17 

18 June 2,730 272 3,002

19 

20 July 4,010 320 4,330

21 

22 August 4,260 304 4,564

23 

24 September 2,380 80 2,460

25 

26 October 760 0 760

27 

28 Total 16,980 976 17,956

29 

30 

31 

32 

33 

34 

35 

36 

37 Points of Diversion: 141.5L

38 

39 

40 

41 Dated:

42 
41

1 Exhibit B 

2 (Map to be inserted to identify area covered by contract) 

3 

4 M. & T. Incorporated 

5 Contract No. 14-06-200-940A 

6 Sacramento River 
42

1 Exhibit C 

2 

3 M. & T. Incorporated 

4 Contract No. 14-06-200-940A 

5 Sacramento River 

6 

7 UNIT DUTY

8 

9 (In Acre-Feet Per Acre) 

10 

11 

12 

13 Alfalfa and General 

14 Rice Irrigated Pasture Crops

15 

16 June 1.90 0.80 0.60 

17 

18 July 2.00 1.00 0.70 

19 

20 August 1.90 0.80 0.70 

21 

22 September 0.50 0.60 0.40 

23 

24 

25 

26 

27 

28 

29 

30 

31 

32 

33 

34 Points of Diversion: 141.5L

35 

36 

37 

38 

39 Dated:

40 

41 

42 
43

1 Exhibit D 

2 M. & T. Incorporated 

3 Contract No. 14-06-200-940A 

4 Sacramento River 

5 

6 WATER RATES AND CHARGES 

7 Note: Rates and Charges shown are 2003 rates. This exhibit will be updated prior to 

8 execution of the contract to reflect the Rates and Charges for 2004. 

9 COST OF SERVICE RATES: Per Acre-Foot

10 

11 Capital Rates 

12 $4.55 

13 

14 O&M Rates: 

15 Water Marketing $6.28 

16 Storage $5.57 

17 

18 Deficit Rates: 

19 Interest Bearing $2.04 

20 

21 CFO/PFR Adjustment Rate 1/ $1.21

22 

23 TOTAL $19.65

24 

25 FULL-COST RATES: 

26 

27 Section 202(3) Rate is applicable to a 

28 Qualified Recipient or to a Limited 

29 Recipient receiving irrigation water 

30 on or before October 1, 1981. $24.91

31 

32 Section 205(a)(3) Rate is 

33 applicable to a Limited Recipient that 

34 did not receive irrigation water on or 

35 before October 1, 1981. $27.64

36 

37 CHARGES UNDER P.L. 102-575 TO THE 

38 RESTORATION FUND 2/ 

39 Restoration Payments (3407(d)(2)(A)) $7.69

40 

41 1/ Chief Financial Officer (CFO) adjustment and Provision for Replacement (PFR) expense is 

42 being distributed over a 5-year period beginning in FY 2003 for those contractors that requested 

43 those costs be deferred. 

44 

45 2/ Restoration fund charges are payments in addition to the water rates and were determined 

46 pursuant to Title XXXIV of Public Law 102-575. Restoration fund charges are on a fiscal year 

47 basis (10/1 - 9/30).