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Contract No. 14-06-200-7858A-IR1 

1 UNITED STATES 

2 DEPARTMENT OF THE INTERIOR 

3 BUREAU OF RECLAMATION 

4 Central Valley Project, California 

5 INTERIM RENEWAL CONTRACT BETWEEN THE UNITED STATES 

6 AND

7 THE CITY OF TRACY 

8 PROVIDING FOR PROJECT WATER SERVICE 

9 FROM THE DELTA DIVISION 

10 THIS CONTRACT, made this _____ day of ____________________, 201___, 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), 

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

14 June 21, 1963 (77 Stat. 68), October 12, 1982 (96 Stat. 1263), October 27, 1986 (100 Stat. 3050), 

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

16 hereinafter referred to as Federal Reclamation law, between the UNITED STATES OF 

17 AMERICA, hereinafter referred to as the United States, and the CITY OF TRACY, hereinafter 

18 referred to as the Contractor, a public agency of the State of California, duly organized, existing, 

19 and acting pursuant to the laws thereof, with its principal place of business in California; 

20 WITNESSETH, That: 

21 EXPLANATORY RECITALS 

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

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

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

[2nd 28 ] WHEREAS, the United States constructed the Delta-Mendota Canal and related 

29 facilities, hereinafter collectively referred to as the Delta Division Facilities, which will be used 

30 in part for the furnishing of water to the Contractor pursuant to the terms of this interim renewal 

31 contract; and 

[3rd 32 ] WHEREAS, the rights to Project Water were acquired by the United States 

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

[4th 34 ] WHEREAS, the Contractor and the United States entered into Contract 

35 No. 14-06-200-7858A dated July 22, 1974, which established the terms for the delivery to the 

36 Contractor of up to ten thousand acre-feet of Project Water from the Delta Mendota Canal 

37 through December 31, 2013; and 

[5th 38 ] WHEREAS, the United States and the Contractor have, pursuant to subsection 

39 3404(c)(3) of CVPIA, subsequently entered into a binding agreement identified as Binding 

40 Agreement No. 14-06-200-7858A-BA dated September 30, 1997, which sets out the terms 

41 pursuant to which the Contractor agreed to renew Contract No. 14-06-200-7858A before its 

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

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

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

[6th 45 ] WHEREAS, pursuant to a June 5, 2001 “Agreement for Assignment of 

46 Entitlement to CVP Water Between the City of Tracy and the Banta-Carbona Irrigation District,”

47 as amended on September 11, 2002, the Contractor was assigned five thousand acre-feet of 
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48 Banta-Carbona Irrigation District’s entitlement to Project Water under Contract 

49 No. 14-06-200-4305A-IR7, which assignment is reflected in the increased Contract Total under 

50 subdivision (a) of Article 3 of this Contract; and 

[7th 51 ] WHEREAS, pursuant to an August 21, 2001 “Agreement for Assignment of 

52 Entitlement to CVP Water Between the City of Tracy and The West Side Irrigation District,” as 

53 amended on September 11, 2002, the Contractor was assigned two thousand five hundred acre-feet 

54 of The West Side Irrigation District’s entitlement to Project Water under Contract 

55 No. 7-07-20-W0045-IR7, which assignment is reflected in the increased Contract Total under 

56 subdivision (a) of Article 3 of this Contract; and 

57 [7.1] WHEREAS, pursuant to that same August 21, 2001 “Agreement for Assignment 

58 of Entitlement to CVP Water Between the City of Tracy and The West Side Irrigation District,”

59 as amended on September 11, 2002, the Contractor obtained an option to purchase an additional 

60 two thousand five hundred acre-feet of The West Side Irrigation District’s entitlement to Project 

61 Water under Contract No. 7-07-20-W0045-IR7 (hereinafter “Unexercised Option”) and the 

62 Contractor expects to exercise that option during the term of this Contract; and 

[8th 63 ] WHEREAS, the Contractor and the United States entered into two separate 

64 interim renewal contracts, Contract No. 14-06-200-4305A-IR13-B and Contract 

65 No. 7-07-20-W0045-IR13-B, which in the aggregate, established the terms for the delivery to the 

66 Contractor of up to seven thousand five hundred acre-feet of Project Water from the 

67 Delta-Mendota Canal through February 28, 2014; and 

[9th 68 ] WHEREAS, Contract No. 14-06-200-7858A dated July 22, 1974, Contract 

69 No. 07-20-W0045-IR13-B dated February 29, 2012, and Contract No. 14-06-200-4305A-IR13-B 
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70 dated February 29, 2012, in the aggregate, constitute and are hereinafter referred to as the 

71 “Existing Contract”; and 

[10th 72 ] WHEREAS, the Contractor has requested renewal of the Existing Contract, 

73 pursuant to Subsection 3404(c)(1) of the CVPIA, which will provide for the continued delivery 

74 of up to seventeen thousand five hundred acre-feet of Project Water from the Delta Mendota 

75 Canal of the Central Valley Project; and

[11th 76 ] WHEREAS, Section 3404(c) of the CVPIA, precludes long-term renewal of water 

77 service contracts (including Contract No. 14-06-200-7858A dated July 22, 1974) until the 

78 completion of appropriate environmental documentation, including a programmatic 

79 environmental impact statement (hereinafter “PEIS”) which is required by Section 3409 of the 

80 CVPIA, pursuant to the National Environmental Policy Act (NEPA) analyzing the direct and 

81 indirect impacts and benefits of implementing the CVPIA and the potential renewal of all 

82 existing contracts for Project Water; and 

[12th 83 ] WHEREAS, in order to continue water service provided under Project water 

84 service contracts that expire prior to the completion of appropriate environmental documentation, 

85 including the PEIS, the United States intends to execute interim renewal contracts for a period 

86 not to exceed three Years in length, and for successive interim periods of not more than two

87 Years in length, until appropriate environmental documentation, including the PEIS, is finally 

88 completed, at which time the Secretary shall, pursuant to Federal Reclamation law, upon request 

89 of the Contractor, enter into a long-term renewal contract for a period of forty Years; and may 

90 thereafter renew such long-term renewal contracts for successive periods not to exceed forty 

91 years each; and 
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[13th 92 ] WHEREAS, the United States has completed the PEIS, but since the 

93 environmental documentation necessary to execute a long-term renewal contract has not been 

94 completed, the Contractor has requested an interim renewal contract pursuant to Section 

95 3404(c)(1) of the CVPIA; and 

[14th 96 ] WHEREAS, the United States has determined that the Contractor has fulfilled all 

97 of its obligations under the Existing Contract; and 

[15

th 98 ] WHEREAS, the Contractor has demonstrated to the satisfaction of the 

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

100 reasonable and beneficial use and expects to utilize fully for reasonable and beneficial use the 

101 quantity of Project Water to be made available to it pursuant to this interim renewal contract; and 

[16

th 102 ] WHEREAS, water obtained from the Central Valley Project has been relied upon 

103 by urban areas within California for more than thirty-nine years, and is considered by the 

104 Contractor as an essential portion of its water supply; and 

[17

th 105 ] WHEREAS, the economies of regions within the Central Valley Project, 

106 including the Contractor’s, depend upon the continued availability of water, including water 

107 service from the Central Valley Project; and 

[18

th 108 ] WHEREAS, the Secretary intends through coordination, cooperation, and 

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

110 Project for all Project purposes; and 

[19

th 111 ] WHEREAS, the mutual goals of the United States and the Contractor include: to 

112 provide for reliable Central Valley Project Water supplies; to control costs of those supplies; to 

113 achieve repayment of the Central Valley Project as required by law; to guard reasonably against 

114 Central Valley Project Water shortages; to achieve a reasonable balance among competing 
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115 demands for use of Central Valley Project Water; and to comply with all applicable 

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

117 the Central Valley Project; and 

118 [19.1] WHEREAS, the parties intend by this Contract to develop a more cooperative 

119 relationship in order to achieve their mutual goals; and 

[20th 120 ] WHEREAS, the Contractor has utilized or may utilize transfers, contract 

121 assignments, rescheduling and conveyance of Project Water and non-Project water under this 

122 Contract as tools to minimize the impacts of Conditions of Shortage and to maximize the 

123 beneficial uses of water; and 

124 [20.1] WHEREAS, the parties desire and intend that this Contract not provide a 

125 disincentive to the Contractor in continuing to carry out the beneficial activities set out in the 

126 Explanatory Recital immediately above; and 

127 [20.2] WHEREAS, The Secretary intends to assure uninterrupted water service and 

128 continuity of contract through the process set forth in Article 2 hereof; and 

[21st 129 ] WHEREAS, the United States and the Contractor are willing to enter into this 

130 Contract pursuant to Federal Reclamation law on the terms and conditions set for below; 

131 NOW, THEREFORE, in consideration of the mutual and dependent covenants 

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

133 DEFINITIONS 

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

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

136 (a) “Assigned Water” shall mean all Project water supply acquired through 

137 assignment from the Banta Carbona Irrigation District, assignment agreement 
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138 No.14-06-200-4305A-B, dated February 27, 2004, and acquired through assignment from 

139 The West Side Irrigation District, assignment agreement No. 7-07-20-W0045-B dated 

140 February 27, 2004. Prior to execution of this contract, the Assigned Water has been delivered to 

141 the Contractor pursuant to the Existing Contract; 

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

143 both dates inclusive; 

144 (c) “Charges” shall mean the payments required by Federal Reclamation law 

145 in addition to the Rates specified in this Contract as determined annually by the Contracting 

146 Officer pursuant to this Contract; 

147 (d) “Condition of Shortage” shall mean a condition respecting the Project 

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

149 Contract Total; 

150 (e) “Contracting Officer” shall mean the Secretary of the Interior’s duly 

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

152 or regulation; 

153 (f) “Contract Total” shall mean the maximum amount of water to which the 

154 Contractor is entitled under subdivision (a) of Article 3 of this Contract; 

155 (g) “Contractor’s Service Area” shall mean the area to which the Contractor is 

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

157 hereto, which may be modified from time to time in accordance with Article 34 of this Contract 

158 without amendment of this Contract; 

159 (h) “CVPIA” shall mean the Central Valley Project Improvement Act, Title 

160 XXXIV of the Act of October 30, 1992 (106 Stat. 4706); 
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161 (h.1) “Delta Division Facilities” shall mean those existing and future Project 

162 facilities in and south of the Sacramento-San Joaquin Rivers Delta, including, but not limited to, 

163 the Tracy Pumping Plant, the O’Neill Pumping/Generating Plant, and the San Luis Reservoir, 

164 used to divert, store and convey water to those Project Contractors entitled to receive water 

165 conveyed through the Delta-Mendota Canal. 

166 (i-j) Omitted; 

167 (k) “Full Cost Rate” shall mean an annual rate, as determined by the 

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

169 Project Irrigation or M&I functions, as appropriate, of facilities in service including all operation 

170 and maintenance deficits funded, less payments, over such periods as may be required under 

171 Federal Reclamation law, or applicable contract provisions. Interest will accrue on both the 

172 construction expenditures and funded Operations and Maintenance deficits from 

173 October 12, 1982, on costs outstanding at that date, or from the date incurred in the case of costs 

174 arising subsequent to October 12, 1982, and shall be calculated in accordance with subsections 

175 202(3)(B) and (3)(C) of the Reclamation Reform Act. The Full-Cost Rate includes actual 

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

177 Regulations for the RRA; 

178 (l-m) Omitted; 

179 (n) “Irrigation Water” shall mean water made available from the Project that 

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

181 incidental thereto, and watering of livestock; 

182 (o) Omitted; 
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183 (p) “Municipal and Industrial (M&I) Water” shall mean Project Water, other 

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

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

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

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

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

189 this Article; 

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

191 the delivery of M&I Water; 

192 (r) “Operation and Maintenance” or “O&M” shall mean normal and 

193 reasonable care, control, operation, repair, replacement (other than Capital replacement), and 

194 maintenance of Project facilities; 

195 (s) “Operating Non-Federal Entity” shall mean the entity(ies), its (their) 

196 successors or assigns, which has (have) the obligation to operate and maintain all or a portion of 

197 the Delta Division Facilities pursuant to written agreement(s) with the United States. When this 

198 Contract was entered into, the Operating Non-Federal Entity(ies) was (were) the San Luis 

199 Delta-Mendota Water Authority; 

200 (t) “Project” shall mean the Central Valley Project owned by the United 

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

202 (u) “Project Contractors” shall mean all parties who have water service 

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

204 Reclamation law; 
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205 (v) “Project Water” shall mean all water that is developed, diverted, stored, or 

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

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

208 (w) “Rates” shall mean the payments determined annually by the Contracting 

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

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

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

212 the final forecast of water made available to the Contractor pursuant to this Contract or its 

213 preceding contract(s); 

214 (y) “Secretary” shall mean the Secretary of the Interior, a duly appointed 

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

216 through any agency of the Department of the Interior; 

217 (aa) “Water Delivered” or “Delivered Water” shall mean Project Water 

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

219 Officer; 

220 (bb) “Water Made Available” shall mean the estimated amount of Project 

221 Water that can be delivered to the Contractor for the upcoming year as declared by the 

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

223 (cc) “Water Scheduled” shall mean Project Water Made Available to the 

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

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

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

227 Calendar Year through the last day of February of the following Calendar Year. 
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228 TERM OF CONTRACT 

229 2. (a) This Contract shall renew the Existing contract, and replace contract 

230 numbers 14-06-200-4305A-IR13B and 7-07-20-W0045-IR13B and shall be effective 

231 January 1, 2014, through February 29, 2016, and thereafter will be renewed as described in this 

232 Article. Except as provided in subdivision (b) of this Article, until completion of all appropriate 

233 environmental review, and provided that the Contractor has complied with all the terms and 

234 conditions of the Contract in effect for the period immediately preceding the requested 

235 successive interim renewal contract, this Contract will be renewed, upon request of the 

236 Contractor, for successive interim periods each of which shall be no more than two Years in 

237 length. Also, except as provided in subdivision (b) of this Article, in order to promote orderly 

238 and cost effect contract administration, the terms and conditions in subsequent interim renewal 

239 contracts shall be identical to the terms and conditions in the interim renewal contract 

240 immediately preceding the subsequent interim renewal: Provided, however, That each party 

241 preserves the right to propose modification(s) in any interim renewal contract other than those 

242 described in subdivision (b) of this Article, in which case the parties shall negotiate in good faith 

243 appropriate modification(s) to be included in any successive interim renewal contracts. Said 

244 modification(s) of each successive interim renewal contract shall be agreed upon within a 

245 reasonable time prior to expiration of the then-existing interim renewal contract. Nothing in this 

246 Article shall in any way alter the obligation that, upon final completion of necessary 

247 environmental documentation, the Secretary shall, pursuant to Federal Reclamation law, upon 

248 request of the Contractor, enter into a long-term renewal contract for a period of forty Years and 

249 shall thereafter renew such long-term renewal contracts for successive periods not to exceed 

250 forty Years each. 
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251 (b) The parties have engaged and if necessary will continue to engage in good 

252 faith negotiations intended to permit the execution of a forty Year long-term renewal contract 

253 contemplated by Section 3404(c) of the CVPIA, hereinafter referred to as a “long-term renewal 

254 contract”. The parties recognize the possibility that this schedule may not be met without further 

255 negotiations. Accordingly: in the event (i) the Contractor and the Contracting Officer have 

256 reached agreement on the terms of the Contractor’s long-term renewal contract or (ii) the 

257 Contractor and Contracting Officer have not completed the negotiations on the Contractor’s 

258 long-term renewal contract, believe that further negotiations on that contract would be beneficial, 

259 and mutually commit to continue to negotiate to seek to reach agreement, but (iii) all 

260 environmental documentation required to allow execution of the Contractor’s long-term renewal 

261 contract have not been completed in time to allow execution by December 31, 2013, then 

262 (iv), the parties will expeditiously complete the environmental documentation required of each of 

263 them in order to execute the Contractor’s long-term renewal contract at the earliest practicable 

264 date. In addition, the Contractor’s then current interim renewal contract will be renewed without 

265 change upon the request of either party through the agreed-upon effective date of the 

266 Contractor’s long-term renewal contract, through or, in the absence of agreement on the terms of 

267 the Contractor’s long-term renewal contract, through the next succeeding February 28. 

268 (c) The omission of language in this interim renewal contract providing for 

269 conversion of this interim renewal contract or any subsequent renewals thereof to a repayment 

270 contract, pursuant to the Act of July 2, 1956 (70 Stat. 483), shall not prejudice the Contractor’s 

271 right to assert a right to have such language included in subsequent renewals of this interim 

272 renewal contract or to exercise such conversion, all as provided by law, or to negotiate the 

273 language regarding such conversion to be included in subsequent renewal contracts. 
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274 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE CONTRACTOR 

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

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

277 this Contract, the Contracting Officer shall make available for delivery to the Contractor up to 

278 20,000 acre-feet of water for M&I purposes; Provided, That 2,500 acre-feet of this amount 

279 represents an “Unexercised Option” for which the Contractor must provide proof to the 

280 Contracting Officer that the option has been exercised prior to 2,500 acre-feet of Assigned Water 

281 being made available. Provided, however, during the two month period of January and February 

282 of Year 2014, the Contracting Officer shall make available for delivery to the Contractor that 

283 portion of the 2013 allocation of Project Water unused by the Contractor under the Existing 

284 Contract. Water Delivered to the Contractor in accordance with this subdivision shall be 

285 scheduled and paid for pursuant to the provisions of 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 most recent modeling 

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

292 available to the Contractor in many years. During the most recent five years, the Recent Historic 

293 Average of Water Made Available to the Contractor was _______ acre-feet. Nothing in 

294 subdivision (b) of this Article shall affect the rights and obligations of the parties under any 

295 provision of this Contract. 
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296 (c) The Contractor shall utilize the Project Water in accordance with all 

297 applicable legal requirements.

298 (d) The Contractor shall make reasonable and beneficial use of all Project 

299 Water or other water furnished pursuant to this Contract. Groundwater recharge programs 

300 (direct, indirect, or in lieu), groundwater banking programs, surface water storage programs, and 

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

302 conducted within the Contractor’s Service Area which are consistent with applicable State law 

303 and result in use consistent with Federal Reclamation law will be allowed; Provided, That any 

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

305 submitted pursuant to Article 25 of this Contract; Provided, further, That such Water 

306 Conservation Plan demonstrates sufficient lawful uses exist in the Contractor’s Service Area so 

307 that using a long-term average, the quantity of Delivered Water is demonstrated to be reasonable 

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

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

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

311 outside the Contractor’s Service Area may be permitted upon written approval of the Contracting 

312 Officer, which approval will be based upon environmental documentation, Project Water rights, 

313 and Project operational concerns. The Contracting Officer will address such concerns in 

314 regulations, policies, or guidelines. 

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

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

317 of this Contract undertaken pursuant to Section 7 of the Endangered Species Act of 1973, as 

318 amended, which are within the Contractor’s legal authority to implement. The Existing Contract, 
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319 which evidences in excess of thirty-nine years of diversions for M&I purposes of the quantities 

320 of water provided in subdivision (a) of Article 3 of this Contract, will be considered in 

321 developing an appropriate baseline for the biological assessment prepared pursuant to the 

322 Endangered Species Act, and any other needed environmental review. Nothing herein shall be 

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

324 competent jurisdiction with respect to any biological opinion or other environmental 

325 documentation referred to in this Article. 

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

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

328 water available to the Project, can be made available to the Contractor in addition to the Contract 

329 Total under Article 3 of this Contract during the Year without adversely impacting other Project 

330 Contractors. At the request of the Contractor, the Contracting Officer will consult with the 

331 Contractor prior to making such a determination. If the Contracting Officer determines that 

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

333 the Contracting Officer will announce the availability of such water and shall so notify the 

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

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

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

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

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

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

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

341 Year referred to as “rescheduled water.” The Contractor may request permission to use during 
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342 the current Year, a quantity of Project Water which may be made available by the United States 

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

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

345 guidelines, and policies. 

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

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

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

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

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

351 sentence shall affect the Contracting Officer’s ability to impose shortages under Article 11 or 

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

353 contracts. 

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

355 delivered for purposes other than those described in subdivision (p) of Article 1 of this Contract 

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

357 such approval. 

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

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

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

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

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

363 Contractor’s position in such a proceeding; Provided further, That in such proceedings the 
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364 Contracting Officer shall recognize the Contractor has a legal right under the terms of this 

365 Contract to use Project Water. 

366 TIME FOR DELIVERY OF WATER 

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

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

369 Such declaration of Project operations will be expressed in terms of both Water Made Available 

370 and the Recent Historic Average and will be updated monthly, and more frequently if necessary, 

371 based on then-current operational and hydrologic conditions and a new declaration with changes, 

372 if any, to the Water Made Available will be made. The Contracting Officer shall provide 

373 forecasts of Project operations and the basis of the estimate, with relevant supporting 

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

375 Water Made Available, the Contracting Officer shall provide the Contractor with the updated 

376 Recent Historic Average. 

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

378 Contractor shall submit to the Contracting Officer a written schedule, satisfactory to the 

379 Contracting Officer, showing the monthly quantities of Project Water to be delivered by the 

380 United States to the Contractor pursuant to this Contract for the Year commencing on such 

381 March 1. The Contracting Officer shall use all reasonable means to deliver Project Water 

382 according to the approved schedule for the Year commencing on such March 1. 

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

384 of Project Water the Contractor intends to put to reasonable and beneficial use within the 

385 Contractor’s Service Area or sell, transfer or exchange pursuant to Article 9 of this Contract 

386 during any Year. 
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387 (d) Subject to the conditions set forth in subdivision (a) of Article 3 of this 

388 Contract, the United States shall deliver Project Water to the Contractor in accordance with the 

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

390 written revision(s), satisfactory to the Contracting Officer, thereto submitted within a reasonable 

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

392 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER 

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

394 Contract shall be delivered to the Contractor at a turnout from the Delta-Mendota Canal and at 

395 any additional point or points of delivery either on Project facilities or another location or 

396 locations mutually agreed to in writing by the Contracting Officer and the Contractor.

397 (b) The Contracting Officer, either directly or indirectly through its written 

398 agreement(s) with the Operating Non-Federal Entity(ies) shall make all reasonable efforts to 

399 maintain sufficient flows and levels of water in Project facilities to deliver Project Water to the 

400 Contractor at specific turnouts established pursuant to subdivision (a) of this Article. 

401 (c) The Contractor shall not deliver Project Water to land outside the 

402 Contractor’s Service Area unless approved in advance by the Contracting Officer. 

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

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

405 United States, the Operating Non-Federal Entity or other appropriate entity at the point or points 

406 of delivery established pursuant to subdivision (a) of this Article. Upon the request of either 

407 party to this Contract, the Contracting Officer shall investigate, or cause to be investigated by the 

408 responsible Operating Non-Federal Entity, the accuracy of such measurements and shall take any 

409 necessary steps to adjust any errors appearing therein. For any period of time when accurate 
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410 measurements have not been made, the Contracting Officer shall consult with the Contractor and 

411 the responsible Operating Non-Federal Entity prior to making a final determination of the 

412 quantity delivered for that period of time. 

413 (e) Absent a separate contrary written agreement with the Contractor, neither 

414 the Contracting Officer nor any Operating Non-Federal Entity(ies) shall be responsible for the 

415 control, carriage, handling, use, disposal, or distribution of 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 Water Delivered 

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

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

423 responsible Operating Non-Federal Entity, with the intent of creating the situation resulting in 

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

425 employees, agents, or assigns, including any responsible Operating Non-Federal Entity; 

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

427 including any responsible Operating Non-Federal Entity; or (iv) damage or claims resulting from 

428 a malfunction of facilities owned and/or operated by the United States or responsible Operating 

429 Non-Federal Entity; Provided, That the Contractor is not the Operating Non-Federal Entity that 

430 owned or operated the malfunctioning facility(ies) from which the damage claim arose. 
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431 MEASUREMENT OF WATER WITHIN THE SERVICE AREA 

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

433 Contracting Officer. The Contractor shall ensure that all surface water delivered for M&I 

434 purposes is measured at each M&I service connection. The water measuring devices or water 

435 measuring methods of comparable effectiveness must be acceptable to the Contracting Officer. 

436 The Contractor shall be responsible for installing, operating, and maintaining and repairing all 

437 such measuring devices and implementing all such water measuring methods at no cost to the 

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

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

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

441 purposes by customer class as defined in the Contractor’s water conservation plan provided for 

442 in Article 25 of this Contract. Nothing herein contained, however, shall preclude the Contractor 

443 from establishing and collecting any charges, assessments, or other revenues authorized by 

444 California law. The Contractor shall include a summary of all its annual surface water deliveries 

445 in the annual report described in subdivision (c) of Article 25. 

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

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

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

449 to implement subdivision (a) of this Article and identifying the M&I service connections or 

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

451 measurement devices or water measuring methods are being used, and, if applicable, identifying 

452 the locations at which such devices and/or methods are not yet being used including a time 

453 schedule for implementation at such locations. The Contracting Officer shall advise the 
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454 Contractor in writing within sixty days as to the adequacy and necessary modifications, if any, of 

455 the measuring devices or water measuring methods identified in the Contractor’s report and if the 

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

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

458 inadequate, the parties shall within sixty days following the Contracting Officer’s response, 

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

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

461 compliance with subdivision (a) of this Article. 

462 (c) All new surface water delivery systems installed within the Contractor’s 

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

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

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

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

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

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

469 Non-Federal Entity on or before the twentieth calendar day of each month of the quantity of 

470 M&I Water taken during the preceding month. 

471 RATES AND METHOD OF PAYMENT FOR WATER 

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

473 all Delivered Water at Rates and Charges established in accordance with: (i) the Secretary’s 

474 then-existing ratesetting policy for M&I Water. Such ratesetting policies shall be amended, 

475 modified, or superseded only through a public notice and comment procedure; (ii) applicable 

476 Federal Reclamation law and associated rules and regulations, or policies; and (iii) other 
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477 applicable provisions of this Contract. Payments shall be made by cash transaction, wire 

478 transfer, or any other mechanism as may be agreed to in writing by the Contractor and the 

479 Contracting Officer. The Rates and Charges applicable to the Contractor upon execution of this 

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

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

482 Charges, as follows: 

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

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

485 to the period October 1, of the current Calendar Year, through September 30, of the 

486 following Calendar Year, and the basis for such estimate. The Contractor shall be 

487 allowed not less than two months to review and comment on such estimates. On or 

488 before September 15 of each Calendar Year, the Contracting Officer shall notify the 

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

490 current Calendar Year, through September 30, of the following Calendar Year, and such 

491 notification shall revise Exhibit “B”. 

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

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

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

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

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

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

498 the upcoming Year, and such notification shall revise Exhibit “B”.
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499 (c) At the time the Contractor submits the initial schedule for the delivery of 

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

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

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

503 scheduled to be delivered pursuant to this Contract during the first two calendar months of the 

504 Year. Before the end of the first month and before the end of each calendar month thereafter, the 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

519 later than April 30th of the following Year, or sixty days after the delivery of Project Water 

520 carried over under subdivision (g) of Article 3 of this Contract if such water is not delivered by 

521 the last day of February. 
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522 (d) The Contractor shall also make a payment in addition to the Rate(s) in 

523 subdivision (c) of this Article to the United States for Water Delivered, at the Charges then in 

524 effect, before the end of the month of delivery. The payments shall be consistent with the 

525 quantities of M&I Water Delivered as shown in the water delivery report for the subject month 

526 prepared by the Operating Non-Federal Entity or, if there is no Operating Non-Federal Entity, by 

527 the Contracting Officer. The water delivery report shall be deemed a bill for the payment of 

528 Charges for Water Delivered. Adjustment for overpayment or underpayment of Charges shall be 

529 made through the adjustment of payments due to the United States for Charges for the next 

530 month. Any amount to be paid for past due payment of Charges shall be computed pursuant to 

531 Article 19 of this Contract. 

532 (e) The Contractor shall pay for any Water Delivered under subdivision (d), 

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

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

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

536 Contract shall be no more than the otherwise applicable Rate for M&I Water under 

537 subdivision (a) of this Article. 

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

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

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

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

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

543 regulations, and the then current Project ratesetting policies for M&I Water. 
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544 (h) The Contracting Officer shall keep its accounts pertaining to the 

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

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

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

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

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

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

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

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

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

554 policies, and procedures used for establishing Rates and Charges, and/or for making and 

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

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

557 mechanisms, policies, and procedures for any of those purposes while this Contract is in effect 

558 without amending this Contract. 

559 (j) Omitted. 

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

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

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

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

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

565 which implement the Contracting Officer’s ratesetting policies will not be implemented until the 
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566 Contracting Officer has provided the Contractor an opportunity to discuss the nature, need, and 

567 impact of the proposed change. 

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

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

570 adjusted upward or downward to reflect the changed costs of delivery (if any) of the transferred 

571 Project Water to the transferee’s point of delivery in accordance with the then-applicable CVP 

572 Ratesetting Policy. 

573 (m) Omitted. 

574 (n) Omitted. 

575 NON-INTEREST BEARING OPERATION AND MAINTENANCE DEFICITS 

576 8. Omitted. 

577 SALES, TRANSFERS, OR EXCHANGES OF WATER 

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

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

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

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

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

583 Officer, except as provided for in subdivision (b) of this Article, and no such sales, transfers, or 

584 exchanges shall be approved absent all appropriate environmental documentation, including but 

585 not limited to documents prepared pursuant to the National Environmental Policy Act and the 

586 Endangered Species Act. Such environmental documentation should include, as appropriate, an 

587 analysis of groundwater impacts and economic and social effects, including environmental 

588 justice, of the proposed water transfers on both the transferor and transferee. 
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589 (b) In order to facilitate efficient water management by means of water 

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

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

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

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

594 pursuant to the National Environmental Policy Act and the Endangered Species Act analyzing 

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

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

597 environmental documentation, such transfers addressed in such documentation shall be 

598 conducted with advance notice to the Contracting Officer, but shall not require prior written 

599 approval by the Contracting Officer. Such environmental documentation and the Contracting 

600 Officer’s compliance determination shall be reviewed every five years and updated, as necessary, 

601 prior to the expiration of the then-existing five year period. All subsequent environmental 

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

603 historically transferred within the same geographical area. 

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

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

606 years, for M&I use, groundwater recharge, water banking, or fish and wildlife resources; not lead 

607 to land conversion; and be delivered to established cropland, wildlife refuges, groundwater 

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

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

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

611 Contractor and the United States, Department of the Interior; and (v) comply with all applicable 
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612 Federal, State, and local or tribal laws and requirements imposed for protection of the 

613 environment and Indian Trust Assets, as defined under Federal law. 

614 APPLICATION OF PAYMENTS AND ADJUSTMENTS 

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

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

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

618 more than one thousand dollars shall be refunded at the Contractor’s request. In lieu of a refund, 

619 any amount of such overpayment at the option of the Contractor may be credited against 

620 amounts to become due to the United States by the Contractor. With respect to overpayment, 

621 such refund or adjustment shall constitute the sole remedy of the Contractor or anyone having or 

622 claiming to have the right to the use of any of the Project Water supply provided for herein. All 

623 credits and refunds of overpayments shall be made within thirty days of the Contracting Officer 

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

625 the Contractor that it has finalized the accounts for the Year in which the overpayment was 

626 made. 

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

628 Contractor pursuant to Article 24 of this Contract shall be adjusted to reflect the actual costs 

629 when the work has been completed. If the advances exceed the actual costs incurred, the 

630 difference will be refunded to the Contractor. If the actual costs exceed the Contractor’s 

631 advances, the Contractor will be billed for the additional costs pursuant to Article 24 of this 

632 Contract. 
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633 TEMPORARY REDUCTIONS—RETURN FLOWS 

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

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

636 or renewals thereof, providing for water deliveries from the Project, the Contracting Officer shall 

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

638 this Contract. 

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

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

641 the purposes of investigation, inspection, maintenance, repair, or replacement of any of the 

642 Project facilities or any part thereof necessary for the delivery of Project Water to the Contractor, 

643 but so far as feasible the Contracting Officer or Operating Non-Federal Entity will give the 

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

645 of emergency, in which case no notice need be given; Provided, That the United States shall use 

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

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

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

649 hereunder in the absence of such discontinuance or reduction.

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

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

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

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

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

655 claiming by, through, or under the Contractor. 
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656 CONSTRAINTS ON THE AVAILABILITY OF WATER 

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

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

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

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

661 Contractor of said determination as soon as practicable. 

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

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

664 actions taken by the Contracting Officer to meet current and future legal obligations, except as 

665 provided in Article 17 of this Contract, then no liability shall accrue against the United States or 

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

667 (c) Omitted. 

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

669 accordance with the then-existing “Central Valley Project M&I Water Shortage Policy”. Such 

670 policy shall be amended, modified, or superseded only through a public notice and comment 

671 procedure. The parties agree that as of the date of execution of this Contract, the Assigned 

672 Water will only be afforded irrigation water reliability under the existing Central Valley Project 

673 M&I Water Shortage Policy.

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

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

676 contesting (i) the sufficiency of the “Central Valley Project M&I Water Shortage Policy,” (ii) the 

677 substance of such a policy; (iii) the applicability of such a policy; or (iv) the manner in which 

678 such policy is implemented in order to allocate Project Water between municipal and industrial 
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679 and irrigation purposes; Provided, That the Contractor has commenced any such judicial 

680 challenge or any administrative procedures necessary to institute any judicial challenge within 

681 six months of the policy becoming final. By agreeing to the foregoing, the Contracting Officer 

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

683 proceeding. Nothing contained herein shall be interpreted to validate or invalidate the “Central 

684 Valley Project M&I Water Shortage Policy.”

685 UNAVOIDABLE GROUNDWATER PERCOLATION 

686 13. Omitted. 

687 RULES, REGULATIONS, AND DETERMINATIONS 

688 14. (a) The parties agree that the delivery of M&I Water or the use of Federal 

689 facilities pursuant to this Contract is subject to Federal Reclamation law, as amended and 

690 supplemented, and the rules and regulations promulgated by the Secretary of the Interior under 

691 Federal Reclamation law. 

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

693 necessary to administer this Contract that are consistent with its provisions, the laws of the 

694 United States and the State of California, and the rules and regulations promulgated by the 

695 Secretary of the Interior. Such determinations shall be made in consultation with the Contractor. 

696 PROTECTION OF WATER AND AIR QUALITY 

697 15. (a) Project facilities used to make available and deliver water to the 

698 Contractor shall be operated and maintained in the most practical manner to maintain the quality 

699 of the water at the highest level possible as determined by the Contracting Officer; Provided, 

700 That the United States does not warrant the quality of the water delivered to the Contractor and is 

701 under no obligation to furnish or construct water treatment facilities to maintain or improve the 

702 quality of water delivered to the Contractor. 

703 (b) The Contractor shall comply with all applicable water and air pollution 

704 laws and regulations of the United States and the State of California; and shall obtain all required 

705 permits or licenses from the appropriate Federal, State, or local authorities necessary for the 

706 delivery of water by the Contractor; and shall be responsible for compliance with all Federal, 

707 State, and local water quality standards applicable to surface and subsurface drainage and/or 

708 discharges generated through the use of Federal or Contractor facilities or Project water provided 

709 by the Contractor within the Contractor’s Project Water Service Area. 
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710 (c) This article shall not affect or alter any legal obligations of the Secretary 

711 to provide drainage or other discharge services. 

712 WATER ACQUIRED BY THE CONTRACTOR 

713 OTHER THAN FROM THE UNITED STATES

714 16. (a) Omitted. 

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

716 other than from the United States, may be stored, conveyed and/or diverted through Project 

717 facilities, subject to the completion of appropriate environmental documentation, with the 

718 approval of the Contracting Officer and the execution of any contract determined by the 

719 Contracting Officer to be necessary, consistent with the following provisions: 

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

721 facilities and deliver said water to lands within the Contractor’s Service Area, subject to 

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

723 appropriate rate as determined by the applicable CVP Ratesetting Policy and the RRA 

724 each as amended, modified or superseded from time to time. In addition, if electrical 

725 power is required to pump non-Project water through the facilities, the Contractor shall 

726 be responsible for obtaining the necessary power and paying the necessary charges 

727 therefore. 

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

729 shall only be allowed to the extent such deliveries do not: (i) interfere with other Project 

730 purposes as determined by the Contracting Officer; (ii) reduce the quantity or quality of 

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

732 water entitlements to any other Project Contractors; or (iv) interfere with the physical 

733 maintenance of the Project facilities. 
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734 (3) Neither the United States nor the Operating Non-Federal Entity 

735 shall be responsible for control, care or distribution of the non-Project water before it is 

736 introduced into or after it is delivered from the Project facilities. The Contractor hereby 

737 releases and agrees to defend and indemnify the United States and the Operating Non738 Federal Entity, and their respective officers, agents, and employees, from any claim for 

739 damage to persons or property, direct or indirect, resulting from the Contractor’s or its 

740 officers’, employees’, agents’ or assigns’, act of (i) extracting or diverting non-Project 

741 water from any source, or (ii) diverting such non-Project water into Project facilities. 

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

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

744 applicable groundwater management plan for the area from which it was extracted. 

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

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

747 capacity of the facilities declared to be available by the Contracting Officer for 

748 conveyance and transportation of non-Project water prior to any such remaining capacity 

749 being made available to non-Project contractors. 

750 OPINIONS AND DETERMINATIONS 

751 17. Where the terms of this Contract provide for actions to be based upon the opinion 

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

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

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

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

756 or unreasonable opinion or determination. Each opinion or determination by either party shall be 
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757 provided in a timely manner. Nothing in Article 17 of this Contract is intended to or shall affect 

758 or alter the standard of judicial review applicable under Federal law to any opinion or 

759 determination implementing a specific provision of Federal law embodied in statute or 

760 regulation. 

761 COORDINATION AND COOPERATION 

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

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

764 with other affected Project contractors, in order to improve the operation and management of the 

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

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

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

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

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

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

771 and determinations to be made by the respective party. 

772 (b) Within one hundred and twenty days following the effective date of this 

773 Contract, the Contractor, other affected Project contractors, and the Contracting Officer shall 

774 arrange to meet with interested Project contractors to develop a mutually agreeable, written 

775 Project-wide process, which may be amended as necessary separate and apart from this Contract. 

776 The goal of this process shall be to provide, to the extent practicable, the means of mutual 

777 communication and interaction regarding significant decisions concerning Project operation and 

778 management on a real-time basis. 
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779 (c) In light of the factors referred to in subdivision (b) of Article 3 of this 

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

781 intent: 

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

783 assist in the development of integrated resource management plans for the Contractor. 

784 Further, the Contracting Officer will, as appropriate, seek authorizations for 

785 implementation of partnerships to improve water supply, water quality, and reliability. 

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

787 implementation and authorization in coordination with Project contractors to improve the 

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

789 (3) The Secretary will coordinate with Project contractors and the 

790 State of California to seek improved water resource management. 

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

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

793 (5) The Contracting Officer shall periodically, but not less than 

794 annually, hold division level meetings to discuss Project operations, division level water 

795 management activities, and other issues as appropriate. 

796 (d) Without limiting the contractual obligations of the Contracting Officer 

797 under the other Articles of this Contract, nothing in this Article shall be construed to limit or 

798 constrain the Contracting Officer’s ability to communicate, coordinate, and cooperate with the 

799 Contractor or other interested stakeholders or to make decisions in a timely fashion as needed to 

800 protect health, safety, physical integrity of structures or facilities. 
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801 CHARGES FOR DELINQUENT PAYMENTS 

802 19. (a) The Contractor shall be subject to interest, administrative, and penalty 

803 charges on delinquent payments. If a payment is not received by the due date, the Contractor 

804 shall pay an interest charge on the delinquent payment for each day the payment is delinquent 

805 beyond the due date. If a payment becomes 60 days delinquent, the Contractor shall pay, in 

806 addition to the interest charge, an administrative charge to cover additional costs of billing and 

807 processing the delinquent payment. If a payment is delinquent 90 days or more, the Contractor 

808 shall pay, in addition to the interest and administrative charges, a penalty charge for each day the 

809 payment is delinquent beyond the due date, based on the remaining balance of the payment due 

810 at the rate of 6 percent per year. The Contractor shall also pay any fees incurred for debt 

811 collection services associated with a delinquent payment. 

812 (b) The interest rate charged shall be the greater of either the rate prescribed 

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

814 payments, or the interest rate of 0.5 percent per month. The interest rate charged will be 

815 determined as of the due date and remain fixed for the duration of the delinquent period. 

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

817 received shall be applied first to the penalty charges, second to the administrative charges, third 

818 to the accrued interest, and finally to the overdue payment. 

819 EQUAL OPPORTUNITY 

820 20. During the performance of this Contract, the Contractor agrees as follows: 

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

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

823 affirmative action to ensure that applicants are employed, and that employees are treated during 

824 employment, without regard to their race, color, religion, sex, or national origin. Such action 

825 shall include, but not be limited to, the following: Employment, upgrading, demotion, or 

826 transfer; recruitment or recruitment advertising; layoff or termination, rates of payment or other 

827 forms of compensation; and selection for training, including apprenticeship. The Contractor 

828 agrees to post in conspicuous places, available to employees and applicants for employment, 

829 notices to be provided by the Contracting Officer setting forth the provisions of this 

830 nondiscrimination clause. 

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

832 placed by or on behalf of the Contractor, state that all qualified applicants will receive 

833 consideration for employment without discrimination because of race, color, religion, sex, or 

834 national origin. 

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

836 with which it has a collective bargaining agreement or other contract or understanding, a notice, 

837 to be provided by the Contracting Officer, advising the said labor union or workers’

838 representative of the Contractor’s commitments under Section 202 of Executive Order 11246 of 
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839 September 24, 1965, and shall post copies of the notice in conspicuous places available to 

840 employees and applicants for employment. 

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

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

843 of the Secretary of Labor. 

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

845 amended Executive Order and by the rules, regulations, and orders of the Secretary of Labor, or 

846 pursuant thereto, and will permit access to its books, records, and accounts by the Contracting 

847 Officer and the Secretary of Labor for purposes of investigation to ascertain compliance with 

848 such rules, regulations, and orders. 

849 (f) In the event of the Contractor’s noncompliance with the nondiscrimination 

850 clauses of this Contract or with any of the said rules, regulations, or orders, this Contract may be 

851 canceled, terminated, or suspended, in whole or in part, and the Contractor may be declared 

852 ineligible for further Government contracts in accordance with procedures authorized in said 

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

854 provided in said Executive Order, or by rule, regulation, or order of the Secretary of Labor, or as 

855 otherwise provided by law. 

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

857 every subcontract or purchase order unless exempted by the rules, regulations, or orders of the 

858 Secretary of Labor issued pursuant to Section 204 of said amended Executive Order, so that such 

859 provisions will be binding upon each subcontractor or vendor. The Contractor will take such 

860 action with respect to any subcontract or purchase order as may be directed by the Secretary of 

861 Labor as a means of enforcing such provisions, including sanctions for noncompliance: 

862 Provided, however, That in the event the Contractor becomes involved in, or is threatened with, 

863 litigation with a subcontractor or vendor as a result of such direction, the Contractor may request 

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

865 GENERAL OBLIGATION—BENEFITS CONDITIONED UPON PAYMENT 

866 21. (a) The obligation of the Contractor to pay the United States as provided in 

867 this Contract is a general obligation of the Contractor notwithstanding the manner in which the 

868 obligation may be distributed among the Contractor’s water users and notwithstanding the 

869 default of individual water users in their obligations to the Contractor. 

870 (b) The payment of charges becoming due pursuant to this Contract is a 

871 condition precedent to receiving benefits under this Contract. The United States shall not make 

872 water available to the Contractor through Project facilities during any period in which the 

873 Contractor is in arrears in the advance payment of water rates, any operation and maintenance 

874 charges due the United States or is in arrears for more than 12 months in the payment of any 

875 construction charges due the United States. The Contractor shall not deliver water under the 

876 terms and conditions of this Contract for lands or parties which are in arrears in the advance 
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877 payment of water rates or operation and maintenance charges as levied or established by the 

878 Contractor. 

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

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

881 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS 

882 22. (a) The Contractor shall comply with Title VI of the Civil Rights Act of 1964 

883 (Pub. L. 88-352; 42 U.S.C. § 2000d), the Rehabilitation Act of 1973 (Pub. L. 93-112, Title V, as 

884 amended; 29 U.S.C. § 791, et seq.), the Age Discrimination Act of 1975 (Pub. L. 94-135, Title 

885 III; 42 U.S.C. § 6101, et seq.), Title II of the Americans with Disabilities Act of 1990 (Pub. 

886 L. 101-336; 42 U.S.C. § 12131, et seq.), and any other applicable civil rights laws, and with the 

887 applicable implementing regulations and any guidelines imposed by the U.S. Department of the 

888 Interior and/or Bureau of Reclamation. 

889 (b) These statutes prohibit any person in the United States from being 

890 excluded from participation in, being denied the benefits of, or being otherwise subjected to 

891 discrimination under any program or activity receiving financial assistance from the Bureau of 

892 Reclamation on the grounds of race, color, national origin, disability, or age. By executing this 

893 Contract, the Contractor agrees to immediately take any measures necessary to implement this 

894 obligation, including permitting officials of the United States to inspect premises, programs, and 

895 documents. 

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

897 purpose of obtaining any and all Federal grants, loans, contracts, property discounts, or other 

898 Federal financial assistance extended after the date hereof to the Contractor by the Bureau of 

899 Reclamation, including installment payments after such date on account of arrangements for 

900 Federal financial assistance which were approved before such date. The Contractor recognizes 

901 and agrees that such Federal assistance will be extended in reliance on the representations and 

902 agreements made in this article and that the United States reserves the right to seek judicial 

903 enforcement thereof. 

904 (d) Complaints of discrimination against the Contractor shall be investigated 

905 by the Contracting Officer’s Office of Civil Rights. 

906 PRIVACY ACT COMPLIANCE 

907 23. Omitted. 

908 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS 

909 24. In addition to all other payments to be made by the Contractor pursuant to this 

910 Contract, the Contractor shall pay to the United States, within sixty days after receipt of a bill 
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911 and detailed statement submitted by the Contracting Officer to the Contractor for such specific 

912 items of direct cost incurred by the United States for work requested by the Contractor associated 

913 with this Contract plus indirect costs in accordance with applicable Bureau of Reclamation 

914 policies and procedures. All such amounts referred to in this Article shall not exceed the amount 

915 agreed to in writing in advance by the Contractor. This Article shall not apply to costs for 

916 routine contract administration. 

917 WATER CONSERVATION 

918 25. (a) Prior to the delivery of water provided from or conveyed through 

919 Federally constructed or Federally financed facilities pursuant to this Contract, the Contractor 

920 shall be implementing an effective water conservation and efficiency program based on the 

921 Contractor’s water conservation plan that has been determined by the Contracting Officer to 

922 meet the conservation and efficiency criteria for evaluating water conservation plans established 

923 under Federal law. The water conservation and efficiency program shall contain definite water 

924 conservation objectives, appropriate economically feasible water conservation measures, and 

925 time schedules for meeting those objectives. Continued Project Water delivery pursuant to this 

926 Contract shall be contingent upon the Contractor’s continued implementation of such water 

927 conservation program. In the event the Contractor’s water conservation plan or any revised 

928 water conservation plan completed pursuant to subdivision (d) of this Article have not yet been 

929 determined by the Contracting Officer to meet such criteria, due to circumstances which the 

930 Contracting Officer determines are beyond the control of the Contractor, water deliveries shall be 

931 made under this Contract so long as the Contractor diligently works with the Contracting Officer 

932 to obtain such determination at the earliest practicable date, and thereafter the Contractor 
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933 immediately begins implementing its water conservation and efficiency program in accordance 

934 with the time schedules therein. 

935 (b) Should the amount of M&I Water delivered pursuant to subdivision (a) of 

936 Article 3 of this Contract equal or exceed two thousand acre-feet per Year, the Contractor shall 

937 implement the “Best Management Practices” identified by the time frames issued by the 

938 California Urban Water Conservation Council for such M&I Water unless any such practice is 

939 determined by the Contracting Officer to be inappropriate for the Contractor. 

940 (c) The Contractor shall submit to the Contracting Officer a report on the 

941 status of its implementation of the water conservation plan on the reporting dates specified in the 

942 then-existing conservation and efficiency criteria established under Federal law. 

943 (d) At five year intervals, the Contractor shall revise its water conservation 

944 plan to reflect the then-current conservation and efficiency criteria for evaluating water 

945 conservation plans established under Federal law and submit such revised water management 

946 plan to the Contracting Officer for review and evaluation. The Contracting Officer will then 

947 determine if the water conservation plan meets Reclamation’s then-current conservation and 

948 efficiency criteria for evaluating water conservation plans established under Federal law. 

949 (e) If the Contractor is engaged in direct groundwater recharge, such activity 

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

951 EXISTING OR ACQUIRED WATER OR WATER RIGHTS 

952 26. Except as specifically provided in Article 16 of this Contract, the provisions of 

953 this Contract shall not be applicable to or affect non-Project water or water rights now owned or 

954 hereafter acquired by the Contractor or any user of such water within the Contractor’s Service 

955 Area. Any such water shall not be considered Project Water under this Contract. In addition, 
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956 this Contract shall not be construed as limiting or curtailing any rights which the Contractor or 

957 any water user within the Contractor’s Service Area acquires or has available under any other 

958 contract pursuant to Federal Reclamation law. 

959 OPERATION AND MAINTENANCE BY NON-FEDERAL ENTITY 

960 27. (a) The O&M of a portion of the Project facilities which serve the Contractor, 

961 and responsibility for funding a portion of the costs of such O&M, have been transferred to the 

962 San Luis & Delta-Mendota Water Authority, an Operating Non-Federal Entity by separate 

963 agreement (8-07-20-X0354) between United States and the Operating Non-Federal Entity San 

964 Luis & Delta-Mendota Water Authority. That separate agreement shall not interfere with or 

965 affect the rights or obligations of the Contractor or the United States hereunder. 

966 (b) The Contracting Officer has previously notified the Contractor in writing 

967 that the O&M of a portion of the Project facilities which serve the Contractor has been 

968 transferred to the Operating Non-Federal Entity San Luis & Delta-Mendota Water Authority, and 

969 therefore, the Contractor shall pay directly to the Operating Non-Federal Entity San Luis & 

970 Delta-Mendota Water Authority, or to any successor approved by the Contracting Officer under 

971 the terms and conditions of the separate agreement between the United States and the Operating 

972 Non-Federal Entity San Luis & Delta Mendota Water Authority described in subdivision (a) of 

973 this Article, all Rates, Charges, or assessments of any kind, including any assessment for reserve 

974 funds, which the Operating Non-Federal Entity San Luis & Delta Mendota Water Authority or 

975 such successor determines, sets, or establishes for the O&M of the portion of the Project 

976 facilities operated and maintained by the Operating Non-Federal Entity San Luis & 

977 Delta-Mendota Water Authority or such successor. Such direct payments to the Operating 

978 Non-Federal Entity San Luis & Delta-Mendota Water Authority or such successor shall not 
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979 relieve the Contractor of its obligation to pay directly to the United States the Contractor’s share 

980 of the Project Rates and Charges except to the extent the Operating Non-Federal Entity San Luis 

981 & Delta-Mendota Water Authority collects payments on behalf of the United States in 

982 accordance with the separate agreement identified in subdivision (a) of this Article. 

983 (c) For so long as the O&M of any portion of the Project facilities serving the 

984 Contractor is performed by the Operating Non-Federal Entity San Luis & Delta-Mendota Water 

985 Authority, or any successor thereto, the Contracting Officer shall adjust those components of the 

986 Rates for Water Delivered under this Contract representing the cost associated with the activity 

987 being performed by the Operating Non-Federal Entity San Luis & Delta-Mendota Water 

988 Authority or its successor. 

989 (d) In the event the O&M of the Project facilities operated and maintained by 

990 the Operating Non-Federal Entity San Luis & Delta-Mendota Water Authority is re-assumed by 

991 the United States during the term of this Contract, the Contracting Officer shall so notify the 

992 Contractor, in writing, and present to the Contractor a revised Exhibit “B” which shall include 

993 the portion of the Rates to be paid by the Contractor for Project Water under this Contract 

994 representing the O&M costs of the portion of such Project facilities which have been re-assumed. 

995 The Contractor shall, thereafter, in the absence of written notification from the Contracting 

996 Officer to the contrary, pay the Rates and Charges specified in the revised Exhibit “B” directly to 

997 the United States in compliance with Article 7 of this Contract. 

998 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS 

999 28. The expenditure or advance of any money or the performance of any obligation of 

1000 the United States under this Contract shall be contingent upon appropriation or allotment of 

1001 funds. Absence of appropriation or allotment of funds shall not relieve the Contractor from any 

1002 obligations under this Contract. No liability shall accrue to the United States in case funds are 

1003 not appropriated or allotted. 
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1004 BOOKS, RECORDS, AND REPORTS 

1005 29. (a) The Contractor shall establish and maintain accounts and other books and 

1006 records pertaining to administration of the terms and conditions of this Contract, including the 

1007 Contractor’s financial transactions; water supply data; project operation, maintenance, and 

1008 replacement logs; Project land and rights-of-way use agreements; the water users’ land-use (crop 

1009 census), land-ownership, land-leasing, and water-use data; and other matters that the Contracting 

1010 Officer may require. Reports shall be furnished to the Contracting Officer in such form and on 

1011 such date or dates as the Contracting Officer may require. Subject to applicable Federal laws 

1012 and regulations, each party to this Contract shall have the right during office hours to examine 

1013 and make copies of the other party’s books and records relating to matters covered by this 

1014 Contract.

1015 (b) Notwithstanding the provisions of subdivision (a) of this Article, no 

1016 books, records, or other information shall be requested from the Contractor by the Contracting 

1017 Officer unless such books, records, or information are reasonably related to the administration or 

1018 performance of this Contract. Any such request shall allow the Contractor a reasonable period of 

1019 time within which to provide the requested books, records, or information. 

1020 (c) At such time as the Contractor provides information to the Contracting 

1021 Officer pursuant to subdivision (a) of this Article, a copy of such information shall be provided 

1022 to the Operating Non-Federal Entity. 

1023 ASSIGNMENT LIMITED—SUCCESSORS AND ASSIGNS OBLIGATED 

1024 30. (a) The provisions of this Contract shall apply to and bind the successors and 

1025 assigns of the parties hereto, but no assignment or transfer of this Contract or any right or interest 

1026 therein shall be valid until approved in writing by the Contracting Officer. 

1027 (b) The assignment of any right or interest in this Contract by either party 

1028 shall not interfere with the rights or obligations of the other party to this Contract absent the 

1029 written concurrence of said other party. 

1030 (c) The Contracting Officer shall not unreasonably condition or withhold 

1031 approval of any proposed assignment. 
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1032 SEVERABILITY 

1033 31. In the event that a person or entity who is neither (i) a party to a Project contract, 

1034 nor (ii) a person or entity that receives Project Water from a party to a Project contract, nor 

1035 (iii) an association or other form of organization whose primary function is to represent parties to 

1036 Project contracts, brings an action in a court of competent jurisdiction challenging the legality or 

1037 enforceability of a provision included in this Contract and said person, entity, association, or 

1038 organization obtains a final court decision holding that such provision is legally invalid or 

1039 unenforceable and the Contractor has not intervened in that lawsuit in support of the plaintiff(s), 

1040 the parties to this Contract shall use their best efforts to (i) within thirty days of the date of such 

1041 final court decision identify by mutual agreement the provisions in this Contract which must be 

1042 revised and (ii) within three months thereafter promptly agree on the appropriate revision(s). 

1043 The time periods specified above may be extended by mutual agreement of the parties. Pending 

1044 the completion of the actions designated above, to the extent it can do so without violating any 

1045 applicable provisions of law, the United States shall continue to make the quantities of Project 

1046 Water specified in this Contract available to the Contractor pursuant to the provisions of this 

1047 Contract which were not found to be legally invalid or unenforceable in the final court decision. 

1048 RESOLUTION OF DISPUTES 

1049 32. Should any dispute arise concerning any provisions of this Contract, or the 

1050 parties’ rights and obligations thereunder, the parties shall meet and confer in an attempt to 

1051 resolve the dispute. Prior to the Contractor commencing any legal action, or the Contracting 

1052 Officer referring any matter to Department of Justice, the party shall provide to the other party 

1053 thirty days’ written notice of the intent to take such action; Provided, That such notice shall not 

1054 be required where a delay in commencing an action would prejudice the interests of the party 
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1055 that intends to file suit. During the thirty day notice periods, the Contractor and the Contracting 

1056 Officer shall meet and confer in an attempt to resolve the dispute. Except as specifically 

1057 provided, nothing herein is intended to waive or abridge any right or remedy that the Contractor 

1058 or the United States may have. 

1059 OFFICIALS NOT TO BENEFIT 

1060 33. No Member of or Delegate to Congress, Resident Commissioner, or official of the 

1061 Contractor shall benefit from this Contract other than as a water user or landowner in the same 

1062 manner as other water users or landowners. 

1063 CHANGES IN CONTRACTOR’S SERVICE AREA 

1064 34. (a) While this Contract is in effect, no change may be made in the 

1065 Contractor’s Service Area, by inclusion or exclusion of lands, dissolution, consolidation, merger, 

1066 or otherwise, except upon the Contracting Officer’s written consent.

1067 (b) Within thirty days of receipt of a request for such a change, the 

1068 Contracting Officer will notify the Contractor of any additional information required by the 

1069 Contracting Officer for processing said request, and both parties will meet to establish a mutually 

1070 agreeable schedule for timely completion of the process. Such process will analyze whether the 

1071 proposed change is likely to: (i) result in the use of Project Water contrary to the terms of this 

1072 Contract; (ii) impair the ability of the Contractor to pay for Project Water furnished under this 

1073 Contract or to pay for any Federally-constructed facilities for which the Contractor is 

1074 responsible; and (iii) have an impact on any Project Water rights applications, permits, or 

1075 licenses. In addition, the Contracting Officer shall comply with the National Environmental 

1076 Policy Act and the Endangered Species Act. The Contractor will be responsible for all costs 

1077 incurred by the Contracting Officer in this process, and such costs will be paid in accordance 

1078 with Article 24 of this Contract. 
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1079 FEDERAL LAWS 

1080 35. By entering into this Contract, the Contractor does not waive its rights to contest 

1081 the validity or application in connection with the performance of the terms and conditions of this 

1082 Contract of any Federal law or regulation; Provided, That the Contractor agrees to comply with 

1083 the terms and conditions of this Contract unless and until relief from application of such Federal 

1084 law or regulation to the implementing provision of the Contract is granted by a court of 

1085 competent jurisdiction. 

1086 NOTICES 

1087 36. Any notice, demand, or request authorized or required by this Contract shall be 

1088 deemed to have been given, on behalf of the Contractor, when mailed, postage prepaid, or 

1089 delivered to the Area Manager, South-Central California Area Office, Mid-Pacific Region, 

1090 Bureau of Reclamation, 1243 N Street, Fresno, CA 93721, and on behalf of the United States, 

1091 when mailed, postage prepaid, or delivered to the City Manager, c/o Public Works Department, 

1092 520 Tracy Blvd., Tracy CA 95376. The designation of the addressee or the address may be 

1093 changed by notice given in the same manner as provided in this article for other notices. 

1094 CONFIRMATION OF CONTRACT 

1095 37. Promptly after the execution of this Contract, the Contractor shall provide 

1096 evidence to the Contracting Officer that, pursuant to the laws of the State of California, the 

1097 Contractor is a legally constituted entity and the contract is lawful, valid, and binding on the 

1098 Contractor. This Contract shall not be binding on the United States until such evidence has been 

1099 provided to the Contracting Officer’s satisfaction. 

CONTRACT DRAFTING CONSIDERATIONS 

1100 38. This Contract has been, negotiated and reviewed by the parties hereto, 

1101 each of whom is sophisticated in the matters to which this Contract pertains. The double-spaced 

1102 articles of this Contract have been drafted, negotiated, and reviewed by the parties, and no one 

1103 party shall be considered to have drafted the stated articles. 
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1104 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of 

1105 the day and year first above written. 

1106 UNITED STATES OF AMERICA 

1107 By: _________________________________ 

1108 Regional Director, Mid-Pacific Region 

1109 Bureau of Reclamation 

1110 CITY OF TRACY

1111 By: _______________________________

1112 City Manager

1113 Attest: 

1114 By: ________________________

1115 Secretary 
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EXHIBIT A 

[Map or Description of Service Area] 
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DRAFT EXHIBIT B

City Of Tracy

2013 Rates and Charges

(Per Acre-Foot)

M&I Water

COST-OF-SERVICE (COS) RATE

Construction Cost $22.00 

O&M Cost

Water Marketing $4.69 

Storage $9.92 

Conveyance1

Conveyance Pumping $0.37 

American Recovery and Reinvestment Act2$0.00

Other Costs $0.00 

Deficit Cost Component $0.00 

TOTAL COS RATE $36.98

CHARGES AND ASSESSMENTS (Payments in addition 

to Rates)

P.L. 102-575 Surcharge

Restoration Fund Payments [Section 3407(d)(2)(A)] $19.58 

P.L. 106-377 Assessment (Trinity Public Utilities District)

[Appendix B, Section 203] $0.05 

EXPLANATORY NOTES

1 Conveyance and Conveyance Pumping Operation and Maintenance Costs were removed for ratesetting purposes and are to 

be direct billed.

Recent historic use, as defined in the CVP M&I Water Shortage Policy, is ___________ acre-feet.

Additional detail of rate components is available on the Internet at 

 http://www.usbr.gov/mp/cvpwaterrates/ratebooks/index.html