AG and M&I 

SCC Draft 10/22-2004 

SCC Draft 09/30-2004 

SCC Draft 08/19-2004 

SCC Draft 07/28-2004 

Contract No. 

14-06-200-7864A-LTR1 

UNITED STATES 

DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

Central Valley Project, California 

LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES

AND

PANOCHE WATER DISTRICT

PROVIDING FOR PROJECT WATER SERVICE

FROM SAN LUIS UNIT AND DELTA DIVISION

Table of Contents

Article No. Title Page No.

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

 Explanatory Recitals ............................................................................................ 2-5 

 1 Definitions ......................................................................................................... 6-10 

 2 Term of Contract.............................................................................................. 10-14 

 3 Water to be Made Available and Delivered to the Contractor ........................ 14-18 

 4 Time for Delivery of Water ............................................................................. 18-19 

 5 Point of Diversion and Responsibility for Distribution of Water.................... 19-21 

 6 Measurement of Water Within the Contractor’s Service Area........................ 21-23 

 7 Rates and Method of Payment for Water......................................................... 23-30 

 8 Non-Interest Bearing Operation and Maintenance Deficits ................................. 30 

 9 Sales, Transfers, or Exchanges of Water ......................................................... 30-32 

 10 Application of Payments and Adjustments........................................................... 32 

 11 Temporary Reductions--Return Flows ............................................................ 33-34 

 12 Constraints on the Availability of Water ......................................................... 34-36 

 13 Unavoidable Groundwater Percolation................................................................. 36 

 14 Rules and Regulations .......................................................................................... 36 

 15 Water and Air Pollution Control........................................................................... 37 

 16 Quality of Water .............................................................................................. 37-38 

 17 Water Acquired by the Contractor Other Than From the United States ......... 38-41 

 18 Opinions and Determinations ............................................................................... 41 

 19 Coordination and Cooperation......................................................................... 41-43
Contract No. 14-06-200-7864A-LTR1 

Table of Contents - continued

Article No. Title Page No.

 20 Charges for Delinquent Payments ................................................................... 43-44 

 21 Equal Opportunity............................................................................................ 44-45 

 22 General Obligation--Benefits Conditioned Upon Payment .................................. 45 

 23 Compliance With Civil Rights Laws and Regulations ......................................... 46 

 24 Privacy Act Compliance .................................................................................. 46-47 

 25 Contractor to Pay Certain Miscellaneous Costs ................................................... 47 

 26 Water Conservation ......................................................................................... 47-49 

 27 Existing or Acquired Water or Water Rights........................................................ 49 

 28 Operation and Maintenance by San Luis & Delta-Mendota Water Authority 49-51 

 28.1 Operation and Maintenance by California Department of Water Resources .. 51-53 

 28.2 Pumping Plants, Power for Pumping Plants, and Transfer of Operation and 

Maintenance to the Contractor......................................................................... 53-57 

 29 Contingent on Appropriation or Allotment of Funds ........................................... 57 

 30 Books, Records, and Reports........................................................................... 57-58 

 31 Assignment Limited--Successors and Assigns Obligated .................................... 58 

 32 Severability ...................................................................................................... 58-59 

 33 Resolution of Disputes.......................................................................................... 59 

 34 Officials Not to Benefit......................................................................................... 59 

 35 Changes in Contractor’s Service Area.................................................................. 60 

 36 Federal Laws......................................................................................................... 60 

 37 Notices ............................................................................................................. 60-61 

 38 Confirmation of Contract...................................................................................... 61 

 Signature Page ...................................................................................................... 62 

 Exhibit A - Map of Contractor's Service Area 

 Exhibit B - Rates and Charges
SCC Draft 10/22-2004 

SCC Draft 09/30-2004 

SCC Draft 08/19-2004 

SCC Draft 07/28-2004 

Contract No. 

14-06-200-7864A-LTR1 

UNITED STATES 

1 DEPARTMENT OF THE INTERIOR 

2 BUREAU OF RECLAMATION 

3 Central Valley Project, California 

4 LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES

5 AND

6 PANOCHE WATER DISTRICT

7 PROVIDING FOR PROJECT WATER SERVICE

8 FROM SAN LUIS UNIT AND DELTA DIVISION

9 THIS CONTRACT, made this _____ day of ____________________, 2005, in pursuance 

10 generally of the Act of June 17, 1902 (32 Stat. 388), and acts amendatory or supplementary thereto, 

11 including, but not limited to, the Acts of August 26, 1937 (50 Stat. 844), as amended and 

12 supplemented, August 4, 1939 (53 Stat. 1187), as amended and supplemented, July 2, 1956 (70 Stat. 

13 483), June 3, 1960 (74 Stat. 156), June 21, 1963 (77 Stat. 68), October 12, 1982 (96 Stat. 1263), 

14 October 27, 1986 (100 Stat. 3050), as amended, and Title XXXIV of the Act of October 30, 1992 

15 (106 Stat. 4706), all collectively hereinafter referred to as Federal Reclamation law, between THE 

16 UNITED STATES OF AMERICA, hereinafter referred to as the United States, and PANOCHE 

17 WATER DISTRICT, hereinafter referred to as the Contractor, a public agency of the State of 

18 California, duly organized, existing, and acting pursuant to the laws thereof; 

19 WITNESSETH, That: 
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20 EXPLANATORY RECITALS

[1st 21 ] WHEREAS, the United States has constructed and is operating the Central Valley 

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

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

24 restoration, generation and distribution of electric energy, salinity control, navigation and other 

25 beneficial uses, of waters of the Sacramento River, the American River, the Trinity River, and the 

26 San Joaquin River and their tributaries; and 

[2nd 27 ] WHEREAS, the United States constructed the Delta Division Facilities, including the 

28 San Luis Unit facilities (which include the San Luis Canal and Dos Amigos Pumping Plant), which 

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

30 Contract; and 

[3rd 31 ] WHEREAS, the rights to Project Water were acquired by the United States pursuant 

32 to California law for operation of the Project; and 

[4th 33 ] WHEREAS, the Contractor and the United States entered into Contract 

34 No. 14-06-200-7864A, which established terms for the delivery to the Contractor of Project Water 

35 from August 30, 1974, through December 31, 2008, hereinafter referred to as the Existing Contract; 

36 and 

[5th 37 ] WHEREAS, the United States and the Contractor have pursuant to Subsection 

38 3404(c)(3) of the Central Valley Project Improvement Act (CVPIA), subsequently entered into a 

39 binding agreement identified as Binding Agreement No. 14-06-200-7864A-BA, which sets out the 

40 terms pursuant to which the Contractor agreed to renew the Existing Contract before the expiration 

41 date after completion of the Programmatic Environmental Impact Statement (PEIS) and other 
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42 appropriate environmental documentation and negotiation of a renewal contract; and which also sets 

43 out the consequences of a subsequent decision not to renew: and 

[6th 44 ] WHEREAS, Section 3404(c) of the CVPIA provides for long-term renewal the 

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

46 PEIS pursuant to the National Environmental Policy Act (NEPA) analyzing the direct and indirect 

47 impacts and benefits of implementing the CVPIA and the potential renewal of all existing contracts 

48 for Project Water; and 

[7th 49 ] WHEREAS, the United States has completed the PEIS and all other appropriate 

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

[8th 51 ] WHEREAS, the Contractor has requested the long-term renewal of the Existing 

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

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

[9th 54 ] WHEREAS, the United States has determined that the Contractor has fulfilled all of 

55 its obligations under the Existing Contract; and 

[10th 56 ] WHEREAS, the Contractor has demonstrated to the satisfaction of the Contracting 

57 Officer that the Contractor has utilized the Project Water supplies available to it for reasonable and 

58 beneficial use and expects to utilize fully for reasonable and beneficial use the quantity of Project 

59 Water to be made available to it pursuant to this Contract; and 

[11th 60 ] WHEREAS, water obtained from the Project has been relied upon by urban and 

61 agricultural areas within California for more than 50 years, and is considered by the Contractor as an 
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62 essential portion of its water supply; and 

[12th 63 ] WHEREAS, the economies of regions within the Project, including the Contractor’s, 

64 depend upon the continued availability of water, including water service from the Project; and 

65 [12.1] WHEREAS, the United States Court of Appeals for the Ninth Circuit has held that 

66 Section 1(a) of the San Luis Act, Public Law 86-488, 74 Stat. 156, imposes on the Secretary a duty to 

67 provide drainage service to the San Luis Unit; and 

68 [12.2] WHEREAS, the Contractor and the Contracting Officer recognize that adequate 

69 drainage service is required to maintain agricultural production within certain areas served with 

70 Project Water made available under this Contract and all renewals thereof; and 

71 (12.3) WHEREAS, the Contacting Officer intends, to the extent appropriated funds are 

72 available, to develop and implement effective solutions to drainage problems in the San Luis Unit; and 

73 [12.4] WHEREAS, the Contracting Officer and the Contractor acknowledge: that such 

74 drainage solutions may involve actions not originally contemplated and/or the construction or use of 

75 facilities other than the San Luis Drain; that the Contractor is investing in drainage solutions for lands 

76 within its boundaries that would be considered by the Contracting Officer in determine drainage 

77 solutions; and that the existing ratesetting policy as it relates to the allocation and collection of 

78 drainage costs may require amendment to recognize those investments by the Contractor and other 

79 relevant circumstances; and 

[13th 80 ] WHEREAS, the Secretary intends through coordination, cooperation, and partnerships 

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

82 Project purposes; and 
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[14th 83 ] WHEREAS, the mutual goals of the United States and the Contractor include: to 

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

85 of the Project as required by law; to guard reasonably against Project Water shortages; to achieve a 

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

87 applicable environmental statutes, all consistent with the legal obligations of the United States 

88 relative to the Project; and 

89 [14.1] WHEREAS, the parties intend by this Contract to develop a more cooperative 

90 relationship in order to achieve their mutual goals; and 

[15th 91 ] WHEREAS, the Contractor has utilized or may utilize transfers, contract assignments, 

92 rescheduling and conveyance of Project Water and non-Project water under this Contract as tools to 

93 minimize the impacts of Conditions of Shortage and to maximize the beneficial use of water; and 

94 [15.1] WHEREAS, the parties desire and intend that this Contract not provide a disincentive 

95 to the Contractor in continuing to carry out the beneficial activities set out in the Explanatory Recital 

96 immediately above; and 

[16th 97 ] WHEREAS, the United States and the Contractor are willing to enter into this 

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

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

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

101 DEFINITIONS

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

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

104 (a) “Calendar Year” shall mean the period January 1 through December 31, both 
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105 dates inclusive; 

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

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

108 by the Contracting Officer pursuant to this Contract; 

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

110 any Year such that the Contracting Officer is unable to deliver sufficient water to meet the Contract 

111 Total; 

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

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

114 regulation; 

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

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

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

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

119 which may be modified from time to time in accordance with Article 35 of this Contract without 

120 amendment of this Contract; 

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

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

123 (g.1) “Delta Division Facilities” shall mean those existing and future Project 

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

125 Tracy Pumping Plant, the O’Neill Forebay, the O’Neill Pumping/Generating Plant, and the San Luis 

126 Reservoir, used to divert, store and convey water to those Project Contractors entitled to receive 
Contract No. 14-06-200-7864A-LTR1 

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127 water conveyed through the Delta-Mendota Canal; 

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

129 delivered in accordance with Section 204 of the Reclamation Reform Act of October 12, 1982 (96 

130 Stat. 1263), as amended, hereinafter referred to as RRA; 

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

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

133 Reclamation law; 

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

135 Officer that shall amortize the expenditures for construction properly allocable to the Project 

136 irrigation or M&I functions, as appropriate, of facilities in service including all Operation and 

137 Maintenance (O&M) deficits funded, less payments, over such periods as may be required under 

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

139 construction expenditures and funded O&M deficits from October 12, 1982, on costs outstanding at 

140 that date, or from the date incurred in the case of costs arising subsequent to October 12, 1982, and 

141 shall be calculated in accordance with subsections 202(3)(B) and (3)(C) of the RRA. The Full-Cost 

142 Rate includes actual operation, maintenance, and replacement costs consistent with Section 426.2 of 

143 the Rules and Regulations for the RRA; 

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

145 delivered in accordance with Section 204 of the RRA; 

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

147 the delivery of Irrigation Water; 

148 (m) “Irrigation Water” shall mean water made available from the Project that is 
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149 used primarily in the production of agricultural crops or livestock, including domestic use incidental 

150 thereto, and watering of livestock; 

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

152 nonexempt land, as provided in 43 CFR 426.2; 

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

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

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

156 kept for personal enjoyment or water delivered to landholdings operated in units of less than five 

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

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

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

160 delivery of M&I Water; 

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

162 care, control, operation, repair, replacement (other than capital replacement), and maintenance of 

163 Project facilities; 

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

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

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

167 was entered into, the Operating Non-Federal Entity(ies) was (were) the San Luis & Delta-Mendota 

168 Water Authority and, with respect to the San Luis Unit facilities, the California Department of Water 

169 Resources; 
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170 (s) “Project” shall mean the Central Valley Project owned by the United States 

171 and managed by the Department of the Interior, Bureau of Reclamation; 

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

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

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

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

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

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

178 Officer in accordance with the then current applicable water ratesetting policies for the Project, as 

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

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

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

182 contract(s); 

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

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

185 through any agency of the Department of the Interior; 

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

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

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

189 use by the Contractor at the point(s) of delivery approved by the Contracting Officer; 
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190 (aa) “Water Made Available” shall mean the estimated amount of Project Water 

191 that can be delivered to the Contractor for the upcoming Year as declared by the Contracting Officer, 

192 pursuant to subdivision (a) of Article 4 of this Contract; 

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

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

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

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

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

198 TERM OF CONTRACT 

199 2. (a) This Contract shall be effective March 1, 2005, through February 28, 2030, 

200 and supersedes the Existing Contract. In the event the Contractor wishes to renew this Contract 

201 beyond February 28, 2030, the Contractor shall submit a request for renewal in writing to the 

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

203 this Contract insofar as it pertains to the furnishing of Irrigation Water to the Contractor shall be 

204 governed by subdivision (b) of this Article, and the renewal of this Contract insofar as it pertains to 

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

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

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

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

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

210 Contractor, shall be renewed for a period of 25 years. 

211 (2) The conditions which must be met for this Contract to be renewed are 
Contract No. 14-06-200-7864A-LTR1 

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212 (i) the Contractor has prepared a water conservation plan that has been determined by the Contracting 

213 Officer in accordance with Article 26 of this Contract to meet the conservation and efficiency criteria 

214 for evaluating such plans established under Federal law; (ii) the Contractor is implementing an 

215 effective water conservation and efficiency program based on the Contractor’s water conservation 

216 plan as required by Article 26 of this Contract; (iii) the Contractor is operating and maintaining all 

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

218 Contracting Officer pursuant to Article 6 of this Contract; (iv) the Contractor has reasonably and 

219 beneficially used the Project Water supplies made available to it and, based on projected demands, is 

220 reasonably anticipated and expects fully to utilize for reasonable and beneficial use the quantity of 

221 Project Water to be made available to it pursuant to such renewal; (v) the Contractor is complying 

222 with all terms and conditions of this Contract; and (vi) the Contractor has the physical and legal 

223 ability to deliver Project Water. 

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

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

226 with the parties’ respective legal rights and obligations, and in consideration of all relevant facts and 

227 circumstances, as those circumstances exist at the time of renewal, including, without limitation, the 

228 Contractor’s need for continued delivery of Project Water; environmental conditions affected by 

229 implementation of the Contract to be renewed, and specifically changes in those conditions that 

230 occurred during the life of the Contract to be renewed; the Secretary’s progress toward achieving the 

231 purposes of the CVPIA as set out in Section 3402 and in implementing the specific provisions of the 

232 CVPIA; and current and anticipated economic circumstances of the region served by the Contractor. 
Contract No. 14-06-200-7864A-LTR1 

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

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

235 consistent with the then-existing Reclamation-wide policy, under terms and conditions mutually 

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

237 the opportunity to comment to the Contracting Officer on the proposed adoption and application of 

238 any revised policy applicable to the delivery of M&I Water that would limit the term of any 

239 subsequent renewal contract with the Contractor for the furnishing of M&I Water to less than 40 

240 years. 

241 (d) The Contracting Officer shall make a determination ten years after the date of 

242 execution of this Contract, and every five years thereafter during the term of this Contract, of whether 

243 a conversion of the relevant portion of this Contract to a contract under subsection 9(d) of the 

244 Reclamation Project Act of 1939 can be accomplished pursuant to the Act of July 2, 1956 (70 Stat 

245 483). The Contracting Officer shall also make a determination ten years after the date of execution 

246 of this Contract and every five years thereafter during the term of this Contract of whether a 

247 conversion of the relevant portion of this Contract to a contract under subsection 9(c)(1) of the 

248 Reclamation Project Act of 1939 can be accomplished. Notwithstanding any provision of this 

249 Contract, the Contractor reserves and shall have all rights and benefits under the Act of July 2, 1956 

250 (70 Stat. 483). The Contracting Officer anticipates that during the term of this Contract, all 

251 authorized Project construction expected to occur will have occurred, and on that basis the 

252 Contracting Officer agrees upon such completion to allocate all costs that are properly assignable to 

253 the Contractor, and agrees further that, at any time after such allocation is made, and subject to 

254 satisfaction of the condition set out in this subdivision, this Contract shall, at the request of the 
Contract No. 14-06-200-7864A-LTR1 

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255 Contractor, be converted to a contract under subsection 9(d) or 9(c)(1), whichever is applicable, of 

256 the Reclamation Project Act of 1939, subject to applicable Federal law and under stated terms and 

257 conditions mutually agreeable to the Contractor and the Contracting Officer. A condition for such 

258 conversion to occur shall be a determination by the Contracting Officer that, account being taken of 

259 the amount credited to return by the Contractor as provided for under Federal Reclamation law, the 

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

261 be repaid to the United States within the term of a contract under subsection 9(d) or 9(c)(1), 

262 whichever is applicable. If the remaining amount of costs that are properly assignable to the 

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

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

265 Contracting Officer shall make such a determination as soon thereafter as possible so as to permit, 

266 upon request of the Contractor and satisfaction of the condition set out above, conversion to a 

267 contract under subsection 9(d) or 9(c)(1), whichever is applicable. In the event such determination of 

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

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

270 shall incorporate in any subsequent renewal contract as described in subdivision (b) of this Article a 

271 provision that carries forth in substantially identical terms the provisions of this subdivision. 

272 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE CONTRACTOR

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

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

275 Contract, the Contracting Officer shall make available for delivery to the Contractor 94,000 acre-feet 

276 of Project Water for irrigation and M&I purposes. Water Delivered to the Contractor in accordance 
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277 with this subdivision shall be scheduled and paid for pursuant to the provisions of Articles 4 and 7 of 

278 this Contract. 

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

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

281 hydrologic conditions and implementation of Federal and State laws, the likelihood of the Contractor 

282 actually receiving the amount of Project Water set out in subdivision (a) of this Article in any given 

283 Year is uncertain. The Contracting Officer’s modeling referenced in the PEIS projected that the 

284 Contract Total set forth in this Contract will not be available to the Contractor in many years. During 

285 the most recent five years, the Recent Historic Average of Water Made Available to the Contractor 

286 was 61,852 acre-feet. Nothing in subdivision (b) of this Article shall affect the rights and obligations 

287 of the parties under any provision of this Contract. 

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

289 legal requirements. 

290 (c.1) In the event any Project Contractor (other than a Cross Valley Contractor) that 

291 receives Project Water through the Delta Division Facilities obtains a contractual agreement that the 

292 Contracting Officer shall make Project Water available at a point or points of delivery in or north of 

293 the Delta, at the request of the Contractor and upon completion of any required environmental 

294 documentation, this Contract shall be amended to provide for deliveries in or north of the Delta on 

295 mutually agreeable terms. Such amendments to the Contract shall be limited solely to those changes 

296 made necessary by the addition of such alternate points of delivery in or north of the Delta; 

297 Provided, That the Contracting Officer’s use of the Harvey O. Banks Pumping Plant to deliver 
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298 Project Water does not trigger this right of amendment. 

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

300 pursuant to this Contract. Groundwater recharge programs (direct, indirect, or in lieu), groundwater 

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

302 Water or other water furnished pursuant to this Contract conducted within the Contractor’s Service 

303 Area which are consistent with applicable State law and result in use consistent with Federal 

304 Reclamation law will be allowed; Provided, That any direct recharge program(s) is (are) described in 

305 the Contractor’s water conservation plan submitted pursuant to Article 26 of this Contract; Provided, 

306 further, That such water conservation plan demonstrates sufficient lawful uses exist in the 

307 Contractor’s Service Area so that using a long-term average, the quantity of Delivered Water is 

308 demonstrated to be reasonable for such uses and in compliance with Federal Reclamation law. 

309 Groundwater recharge programs, groundwater banking programs, surface water storage programs, 

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

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

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

313 rights, 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 Contractor in 

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

317 undertaken pursuant to Section 7 of the Endangered Species Act of 1973 (ESA), as amended, that are 

318 within the Contractor’s legal authority to implement. The Existing Contract, which evidence in 

319 excess of 30 years of diversions for irrigation and/or M&I purposes of the quantities of water 
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320 provided in subdivision (a) of Article 3 of this Contract, will be considered in developing an 

321 appropriate baseline for the biological assessment(s) prepared pursuant to the ESA, and any other 

322 needed environmental review. Nothing herein shall be construed to prevent the Contractor from 

323 challenging or seeking judicial relief in a court of competent jurisdiction with respect to any 

324 biological opinion or other environmental documentation referred to in this Article.

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

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

327 available to the Project, can be made available to the Contractor in addition to the Contract Total 

328 under this Article during the Year without adversely impacting other Project Contractors. At the 

329 request of the Contractor, the Contracting Officer will consult with the Contractor prior to making 

330 such a determination. If the Contracting Officer determines that Project Water, or other water 

331 available to the Project, can be made available to the Contractor, the Contracting Officer will 

332 announce the availability of such water and shall so notify the Contractor as soon as practical. The 

333 Contracting Officer will thereafter meet with the Contractor and other Project Contractors capable of 

334 taking such water to determine the most equitable and efficient allocation of such water. If the 

335 Contractor requests the delivery of any quantity of such water, the Contracting Officer shall make 

336 such water available to the Contractor in accordance with applicable statutes, regulations, guidelines, 

337 and policies. Subject to existing long-term contractual commitments, water rights and operational 

338 constraints, long-term Project Contractors shall have a first right to acquire such water, including 

339 Project Water made available pursuant to Section 215 of the RRA. 

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

341 subsequent Year some or all of the Water Made Available to the Contractor during the current Year, 
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342 referred to as “rescheduled water.” The Contractor may request permission to use during the current 

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

344 during the subsequent Year referred to as “preuse.” The Contracting Officer’s written approval may 

345 permit such uses in accordance with applicable statutes, regulations, 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 during the 

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

349 the terms thereof shall not be disturbed so long as the Contractor shall fulfill all of its obligations 

350 under this Contract and any renewals thereof. Nothing in the preceding sentence shall affect the 

351 Contracting Officer’s ability to impose shortages under Article 11 or subdivision (b) of Article 12 of 

352 this Contract or applicable provisions of any subsequent renewal contracts. 

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

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

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

356 conditions of such approval. 

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

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

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

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

361 that the Contracting Officer retains the right to object to the substance of the Contractor’s position in 

362 such a proceeding; Provided, further, That in such proceedings the Contracting Officer shall 

363 recognize the Contractor has a legal right under the terms of this Contract to use Project Water. 
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364 TIME FOR DELIVERY OF WATER

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

366 announce the Contracting Officer’s expected declaration of the Water Made Available. Such 

367 declaration will be expressed in terms of both Water Made Available and the Recent Historic 

368 Average and will be updated monthly, and more frequently if necessary, based on then-current 

369 operational and hydrologic conditions and a new declaration with changes, if any, to the Water Made 

370 Available will be made. The Contracting Officer shall provide forecasts of Project operations and the 

371 basis of the estimate, with relevant supporting information, upon the written request of the 

372 Contractor. Concurrently with the declaration of the Water Made Available, the Contracting Officer 

373 shall provide the Contractor with the updated Recent Historic Average. 

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

375 shall submit to the Contracting Officer a written schedule, satisfactory to the Contracting Officer, 

376 showing the monthly quantities of Project Water to be delivered by the United States to the 

377 Contractor pursuant to this Contract for the Year commencing on such March 1. The Contracting 

378 Officer shall use all reasonable means to deliver Project Water according to the approved schedule 

379 for the Year commencing on such March 1. 

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

381 Project Water the Contractor intends to put to reasonable and beneficial use within the Contractor's 

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

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

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

385 schedule submitted by the Contractor pursuant to subdivision (b) of this Article, or any written 
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386 revision(s) thereto satisfactory to the Contracting Officer, submitted within a reasonable time prior to 

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

388 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

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

390 Contract shall be delivered to the Contractor at Project facilities and any additional point or points of 

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

392 the Contracting Officer and the Contractor. 

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

394 agreements(s) with the Operating Non-Federal Entity(ies), shall make all reasonable efforts to 

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

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

397 (c) The Contractor shall deliver Irrigation Water in accordance with any 

398 applicable land classification provisions of Federal Reclamation law and the associated regulations. 

399 The Contractor shall not deliver Project Water to land outside the Contractor's Service Area unless 

400 approved in advance by the Contracting Officer. 

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

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

403 Contracting Officer either directly or indirectly through its written agreements(s) with the Operating 

404 Non-Federal Entity(ies), unless undertaken by the Contractor with the consent of the Contracting 

405 Officer at the point or points of delivery established pursuant to subdivision (a) of this Article. Upon 

406 the request of either party to this Contract, the Contracting Officer shall investigate, or cause to be 

407 investigated by the appropriate Operating Non-Federal Entity (ies) the accuracy of such 
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408 measurements and shall take any necessary steps to adjust any errors appearing therein. For any 

409 period of time when accurate measurements have not been made, the Contracting Officer shall 

410 consult with the Contractor and the appropriate Operating Non-Federal Entity(ies), if any, prior to 

411 making a final determination of the quantity delivered for that period of time. 

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

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

414 carriage, handling, use, disposal, or distribution of Water Delivered to the Contractor pursuant to this 

415 Contract beyond the point or points of delivery established pursuant to subdivision (a) of this Article. 

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

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

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

419 the control, carriage, handling, use, disposal, or distribution of such Water Delivered beyond such 

420 point or points of delivery except for any damage or claim arising out of: (i) acts or omissions of the 

421 Contracting Officer or any of its officers, employees, agents, and assigns, including the Operating 

422 Non-Federal Entity(ies) with the intent of creating the situation resulting in any damage or claim; (ii) 

423 willful misconduct of the Contracting Officer or any of its officers, employees, agents, and assigns, 

424 including the Operating Non-Federal Entity(ies); (iii) negligence of the Contracting Officer or any of 

425 its officers, employees, agents, and assigns including the Operating Non-Federal Entity(ies); (iv) a 

426 malfunction of facilities owned and/or operated by the United States or the Operating Non-Federal 

427 Entity(ies); or (v) failure of the United States, its officers, employees, agents and assigns, including 

428 the Operating Non-Federal Entity(ies), to provide drainage service. 

429 MEASUREMENT OF WATER WITHIN THE CONTRACTOR’S SERVICE AREA
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430 6. (a) The Contractor has established a measuring program satisfactory to the 

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

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

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

434 measuring devices or water measuring methods of comparable effectiveness must be acceptable to 

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

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

437 methods at no cost to the United States. The Contractor shall use the information obtained from such 

438 water measuring devices or water measuring methods to ensure its proper management of the water; 

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

440 for M&I purposes by customer class as defined in the Contractor’s water conservation plan provided 

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

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

443 law. The Contractor shall include a summary of all its annual surface water deliveries in the annual 

444 report described in subdivision (c) of Article 26. 

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

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

447 the measurement devices or water measuring methods being used or to be used to implement 

448 subdivision (a) of this Article and identifying the agricultural turnouts and the M&I service 

449 connections or alternative measurement programs approved by the Contracting Officer, at which such 

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

451 locations at which such devices and/or methods are not yet being used including a time schedule for 
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452 implementation at such locations. The Contracting Officer shall advise the Contractor in writing 

453 within 60 days as to the adequacy and necessary modifications, if any, of the measuring devices or 

454 water measuring methods identified in the Contractor’s report and if the Contracting Officer does not 

455 respond in such time, they shall be deemed adequate. If the Contracting Officer notifies the 

456 Contractor that the measuring devices or methods are inadequate, the parties shall within 60 days 

457 following the Contracting Officer’s response, negotiate in good faith the earliest practicable date by 

458 which the Contractor shall modify said measuring devices and/or measuring methods as required by 

459 the Contracting Officer to ensure compliance with subdivision (a) of this Article. 

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

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

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

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

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

465 Contractor’s Service Area during the previous Year. 

466 (e) The Contractor shall inform the Contracting Officer and the Operating NonFederal Entity on or before the 20th 467 calendar day of each month of the quantity of Irrigation Water 

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

469 RATES AND METHOD OF PAYMENT FOR WATER

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

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

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

473 then-existing ratesetting policy for M&I Water. Such ratesetting policies shall be amended, 
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474 modified, or superceded only through a public notice and comment procedure; (ii) applicable Federal 

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

476 provisions of this Contract. Payments shall be made by cash transaction, electronic funds transfer, or 

477 any other mechanism as may be agreed to in writing by the Contractor and the Contracting Officer. 

478 The Rates, Charges, and Tiered Pricing Component applicable to the Contractor upon execution of 

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

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

481 Tiered Pricing Component as follows: 

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

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

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

485 the basis for such estimate. The Contractor shall be allowed not less than two months to review and 

486 comment on such estimates. On or before September 15 of each Calendar Year, the Contracting 

487 Officer shall notify the Contractor in writing of the Charges to be in effect during the period October 

488 1 of the current Calendar Year, through September 30, of the following Calendar Year, and such 

489 notification shall revise Exhibit “B.” 

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

make available to the Contractor an estimate of the Rates and Tiered Pricing Component for Project 

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

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

computations and cost allocations. By December 31 of each Calendar Year, the Contracting Officer 

490 
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491 shall provide the Contractor with the final Rates and Tiered Pricing Component to be in effect for the 

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

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

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

495 shall make an advance payment to the United States equal to the total amount payable pursuant to the 

496 applicable Rate(s) set under subdivision (a) of this Article, for the Project Water scheduled to be 

497 delivered pursuant to this Contract during the first two calendar months of the Year. Before the end 

498 of the first month and before the end of each calendar month thereafter, the Contractor shall make an 

499 advance payment to the United States, at the Rate(s) set under subdivision (a) of this Article, for the 

500 Water Scheduled to be delivered pursuant to this Contract during the second month immediately 

501 following. Adjustments between advance payments for Water Scheduled and payments at Rates due 

502 for Water Delivered shall be made before the end of the following month; Provided, That any revised 

503 schedule submitted by the Contractor pursuant to Article 4 of this Contract which increases the 

504 amount of Water Delivered pursuant to this Contract during any month shall be accompanied with 

505 appropriate advance payment, at the Rates then in effect, to assure that Project Water is not delivered 

506 to the Contractor in advance of such payment. In any month in which the quantity of Water 

507 Delivered to the Contractor pursuant to this Contract equals the quantity of Water Scheduled and paid 

508 for by the Contractor, no additional Project Water shall be delivered to the Contractor unless and 

509 until an advance payment at the Rates then in effect for such additional Project Water is made. Final 

510 adjustment between the advance payments for the Water Scheduled and payments for the quantities 

511 of Water Delivered during each Year pursuant to this Contract shall be made as soon as practicable 

512 but no later than April 30th of the following Year, or sixty days after the delivery of Project Water 
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513 rescheduled under subdivision (g) of Article 3 of this Contract if such water is not delivered by the 

514 last day of February. 

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

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

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

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

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

520 with the quantities of Irrigation Water and M&I Water Delivered as shown in the water delivery 

521 report for the subject month prepared by the Operating Non-Federal Entity(ies) or, if there is no 

522 Operating Non-Federal Entity, by the Contracting Officer. The water delivery report shall be deemed 

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

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

525 payments due to the United States for Charges for the next month. Any amount to be paid for past 

526 due payment of Charges and the Tiered Pricing Component shall be computed pursuant to Article 20 

527 of this Contract. 

528 (e) The Contractor shall pay for any Water Delivered under subdivision (a), (f), or 

529 (g) of Article 3 of this Contract as determined by the Contracting Officer pursuant to applicable 

530 statutes, associated regulations, any applicable provisions of guidelines or ratesetting policies; 

531 Provided, That the Rate for Water Delivered under subdivision (d) of Article 3 of this Contract shall 

532 be no more than the otherwise applicable Rate for Irrigation Water or M&I Water under subdivision 

533 (a) of this Article. 
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534 (f) Payments to be made by the Contractor to the United States under this 

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

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

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

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

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

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

541 of the financial terms and conditions of its long-term contracts, in accordance with applicable Federal 

542 standards, so as to reflect the application of Project costs and revenues. The Contracting Officer 

543 shall, each Year upon request of the Contractor, provide to the Contractor a detailed accounting of all 

544 Project and Contractor expense allocations, the disposition of all Project and Contractor revenues, 

545 and a summary of all water delivery information. The Contracting Officer and the Contractor shall 

546 enter into good faith negotiations to resolve any discrepancies or disputes relating to accountings, 

547 reports, or information. 

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

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

550 policies, and procedures used for establishing Rates, Charges, and the Tiered Pricing Component, 

551 and/or for making and allocating payments, other than those set forth in this Article may be in the 

552 mutual best interest of the parties, it is expressly agreed that the parties may enter into agreements to 

553 modify the mechanisms, policies, and procedures for any of those purposes while this Contract is in 

554 effect without amending this Contract. 

555 (j) (1) Beginning at such time as deliveries of Project Water in a Year exceed 
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556 80 percent of the Contract Total, then before the end of the month following the month of delivery 

557 the Contractor shall make an additional payment to the United States equal to the applicable Tiered 

558 Pricing Component. The Tiered Pricing Component for the amount of Water Delivered in excess of 

559 80 percent of the Contract Total, but less than or equal to 90 percent of the Contract Total, shall equal 

560 one-half of the difference between the Rate established under subdivision (a) of this Article and the 

561 Irrigation Full Cost Water Rate or M&I Full Cost Water Rate, whichever is applicable. The Tiered 

562 Pricing Component for the amount of Water Delivered which exceeds 90 percent of the Contract 

563 Total shall equal the difference between (i) the Rate established under subdivision (a) of this Article 

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

565 For all Water Delivered pursuant to subdivision (a) of Article 3 of this Contract which is in excess of 

566 80 percent of the Contract Total, this increment shall be deemed to be divided between Irrigation 

567 Water and M&I Water in the same proportion as actual deliveries of each bear to the cumulative total 

568 Water Delivered. 

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

570 may request and receive an exemption from such Tiered Pricing Component for Project Water 

571 delivered to produce a crop which the Contracting Officer determines will provide significant and 

572 quantifiable habitat values for waterfowl in fields where the water is used and the crops are produced; 

573 Provided, That the exemption from the Tiered Pricing Component for Irrigation Water shall apply 

574 only if such habitat values can be assured consistent with the purposes of the CVPIA through binding 

575 agreements executed with or approved by the Contracting Officer prior to use of such water. 

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

577 Component pursuant to this Article, Water Delivered shall include Project Water that the Contractor 
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578 transfers to others but shall not include Project Water transferred to the Contractor, nor shall it 

579 include the additional water provided to the Contractor under the provisions of subdivision (f) of 

580 Article 3 of this Contract. 

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

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

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

584 interest, where appropriate, except in instances where a minimum Rate is applicable in accordance 

585 with the relevant Project ratesetting policy. Changes of significance in practices which implement 

586 the Contracting Officer’s ratesetting policies will not be implemented until the Contracting Officer 

587 has provided the Contractor an opportunity to discuss the nature, need, and impact of the proposed 

588 change. 

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

590 the Rates for Project Water transferred by the Contractor shall be the Contractor’s Rates, in

591 accordance with the applicable Project ratesetting policy, adjusted upward or downward to reflect the 

592 changed costs if any, incurred by the Contracting Officer in the delivery of the transferred Project 

593 Water to the transferee’s point of delivery. If the Contractor is receiving lower Rates and Charges 

594 because of inability to pay and is transferring Project Water to another entity whose Rates and 

595 Charges are not adjusted due to inability to pay, the Rates and Charges for transferred Project Water 

596 shall not be adjusted to reflect the Contractor’s inability to pay. 

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

598 Officer is authorized to adjust determinations of ability to pay every 5 years. 

599 (n) Omitted 
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600 NON-INTEREST BEARING OPERATION AND MAINTENANCE DEFICITS

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

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

603 therefore. 

604 SALES, TRANSFERS, OR EXCHANGES OF WATER

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

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

607 such sale, transfer, or exchange is authorized by applicable Federal and State laws, and applicable 

608 guidelines or regulations then in effect. No sale, transfer, or exchange of Project Water under this 

609 Contract may take place without the prior written approval of the Contracting Officer, except as 

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

611 approved absent all appropriate environmental documentation, including but not limited to, 

612 documents prepared pursuant to the NEPA and ESA. Such environmental documentation should 

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

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

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

616 the type historically carried out among Project Contractors located within the same geographical area 

617 and to allow the Contractor to participate in an accelerated water transfer program during the term of 

618 this Contract, the Contracting Officer shall prepare, as appropriate, all necessary environmental 

619 documentation, including but not limited to, documents prepared pursuant to NEPA and ESA, 

620 analyzing annual transfers within such geographical areas and the Contracting Officer shall 
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621 determine whether such transfers comply with applicable law. Following the completion of the 

622 environmental documentation, such transfers addressed in such documentation shall be conducted 

623 with advance notice to the Contracting Officer, but shall not require prior written approval by the 

624 Contracting Officer. Such environmental documentation and the Contracting Officer’s compliance 

625 determination shall be reviewed every five years and updated, as necessary, prior to the expiration of 

626 the then existing five year period. All subsequent environmental documentation shall include an 

627 alternative to evaluate not less than the quantity of Project Water historically transferred within the 

628 same geographical area. 

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

630 transfer must: (i) be for irrigation purposes for lands irrigated within the previous three years, for 

631 M&I use, groundwater recharge, groundwater banking, or similar groundwater activities, surface 

632 water storage, or fish and wildlife resources; not lead to land conversion; and be delivered to 

633 established cropland, wildlife refuges, groundwater basins or M&I use; (ii) occur within a single 

634 Year; (iii) occur between a willing seller and a willing buyer; (iv) convey water through existing 

635 facilities with no new construction or modifications to facilities and be between existing Project 

636 Contractors and/or the Contractor and the United States, Department of the Interior; and (v) comply 

637 with all applicable Federal, State, and local or tribal laws and requirements imposed for protection of 

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

639 APPLICATION OF PAYMENTS AND ADJUSTMENTS

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

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

642 the Contractor arising out of this Contract then due and payable. Overpayments of more than $1,000 
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643 shall be refunded at the Contractor’s request. In lieu of a refund, any amount of such overpayment at 

644 the option of the Contractor, may be credited against amounts to become due to the United States by 

645 the Contractor. With respect to overpayment, such refund or adjustment shall constitute the sole 

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

647 Project Water supply provided for herein. All credits and refunds of overpayments shall be made 

648 within 30 days of the Contracting Officer obtaining direction as to how to credit or refund such 

649 overpayment in response to the notice to the Contractor that it has finalized the accounts for the Year 

650 in which the overpayment was made. 

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

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

653 the work has been completed. If the advances exceed the actual costs incurred, the difference will be 

654 refunded to the Contractor. If the actual costs exceed the Contractor's advances, the Contractor will 

655 be billed for the additional costs pursuant to Article 25. 

656 TEMPORARY REDUCTIONS--RETURN FLOWS

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

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

659 renewals thereof, providing for water deliveries from the Project, the Contracting Officer shall make 

660 all reasonable efforts to optimize Project Water deliveries to the Contractor as provided in this 

661 Contract. 

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

663 discontinue or reduce the quantity of Water Delivered to the Contractor as herein provided for the 
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664 purposes of investigation, inspection, maintenance, repair, or replacement of any of the Project 

665 facilities or any part thereof necessary for the delivery of Project Water to the Contractor, but so far 

666 as feasible the Contracting Officer or Operating Non-Federal Entity(ies) will give the Contractor due 

667 notice in advance of such temporary discontinuance or reduction, except in case of emergency, in 

668 which case no notice need be given; Provided, That the United States shall use its best efforts to 

669 avoid any discontinuance or reduction in such service. Upon resumption of service after such 

670 reduction or discontinuance, and if requested by the Contractor, the United States will, if possible, 

671 deliver the quantity of Project Water which would have been delivered hereunder in the absence of 

672 such discontinuance or reduction. 

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

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

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

676 States any right to seepage or return flow being put to reasonable and beneficial use pursuant to this 

677 Contract within the Contractor’s Service Area by the Contractor or those claiming by, through, or 

678 under the Contractor. 

679 CONSTRAINTS ON THE AVAILABILITY OF WATER

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

681 means to guard against a Condition of Shortage in the quantity of water to be made available to the 

682 Contractor pursuant to this Contract. In the event the Contracting Officer determines that a 

683 Condition of Shortage appears probable, the Contracting Officer will notify the Contractor of said 

684 determination as soon as practicable. 

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

687 taken by the Contracting Officer to meet legal obligations then, except as provided in subdivision (a) 

688 of Article 18 of this Contract, no liability shall accrue against the United States or any of its officers, 

689 agents, or employees for any damage, direct or indirect, arising therefrom. 

690 (c) In any Year in which there may occur a Condition of Shortage for any of the 

691 reasons specified in subdivision (b) of this Article, and subject to subdivision (d) of this Article, the 

692 Contracting Officer will first allocate the available Project Water consistent with the Central Valley 

693 Project M&I Water Shortage Policy in its form on the effective date of this Contract for determining 

694 the amount of Project Water available for delivery to the Project Contractors. Subject to the 

695 foregoing allocation, in any year in which there may occur a Condition of Shortage, the Contracting 

696 Officer shall then apportion Project Water among the Contractor and others entitled to Project Water 

697 from Delta Division Facilities under long-term water service or repayment contracts (or renewals 

698 thereof or binding commitments therefore) in force on February 28, 2005, as follows: 

699 (1) The Contracting Officer shall make an initial and subsequent 

700 determination as necessary of the total quantity of Project Water estimated to be scheduled or actually 

701 scheduled under subdivision (b) of Article 4 of this Contract and under all other long-term water 

702 service or repayment contracts then in force for the delivery of Project Water by the United States 

703 from Delta Division Facilities during the relevant Year, the quantity so determined being hereinafter 

704 referred to as the scheduled total; 

705 (2) A determination shall be made of the total quantity of Project Water 

706 that is available for meeting the scheduled total, the quantity so determined being hereinafter referred 
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707 to as the available supply; 

708 (3) The total quantity of Project Water estimated to be scheduled or 

709 actually scheduled by the Contractor during the relevant Year, under subdivision (b) of Article 4 

710 hereof, shall be divided by the scheduled total, the quotient thus obtained being hereinafter referred to 

711 as the Contractor’s proportionate share; and 

712 (4) The available supply shall be multiplied by the Contractor’s 

713 proportionate share and the result shall be the quantity of Project Water made available by the United 

714 States to the Contractor for the relevant Year in accordance with the schedule developed by the 

715 Contracting Officer under subdivision (c)(1) of this Article 12, but in no event shall such amount 

716 exceed the Contract Total. In the event the Contracting Officer subsequently determines that the 

717 Contracting Officer can increase or needs to decrease the available supply for delivery from Delta 

718 Division Facilities to long-term water service and repayment Contractors during the relevant Year, 

719 such additions or reductions to the available supply shall be apportioned consistent with 

720 subparagraphs (1) through (4), inclusive. 

721 (d) By entering into this Contract, the Contractor does not waive any legal rights 

722 or remedies it may have to file or participate in any administrative or judicial proceeding contesting 

723 (i) the sufficiency of the Central Valley Project M&I Water Shortage Policy; (ii) the substance of 

724 such a policy; (iii) the applicability of such a policy; or (iv) the manner in which such policy is 

725 implemented in order to allocate Project Water between municipal and industrial and irrigation 

726 purposes; Provided, That the Contractor has commenced any such judicial challenge or any 

727 administrative procedures necessary to institute any judicial challenge within 6 months of the policy 

728 becoming final. By agreeing to the foregoing, the Contracting Officer does not waive any legal 
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729 defenses or remedies that it may have to assert in such a proceeding. Nothing contained herein shall 

730 be interpreted to validate or invalidate the Central Valley Project M&I Water Shortage Policy. 

731 UNAVOIDABLE GROUNDWATER PERCOLATION

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

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

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

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

736 RULES AND REGULATIONS

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

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

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

740 rules and regulations promulgated by the Secretary of the Interior under Federal Reclamation law. 

741 WATER AND AIR POLLUTION CONTROL

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

743 and air pollution laws and regulations of the United States and the State of California, and shall 

744 obtain all required permits or licenses from the appropriate Federal, State, or local authorities. 

745 QUALITY OF WATER

746 

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

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

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

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

751 3050) or other existing Federal laws. The United States is under no obligation to construct or furnish 

752 water treatment facilities to maintain or to improve the quality of Water Delivered to the Contractor 

753 pursuant to this Contract. The United States does not warrant the quality of Water Delivered to the 

754 Contractor pursuant to this Contract. 
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755 (b) The O&M of Project facilities shall be performed in such manner as is 

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

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

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

759 and subsurface agricultural drainage discharges generated through the use of Federal or Contractor 

760 facilities or Project Water provided by the Contractor within the Contractor's Service Area. 

761 (c) The Contracting Officer shall notify the Contractor in writing when drainage 

762 service becomes available. Thereafter, the Contracting Officer shall provide drainage service to the 

763 Contractor at rates established pursuant to the then-existing ratesetting policy for irrigation water; 

764 Provided, that such ratesetting policy shall be amended, modified, or superceded only through the 

765 process described in subdivision (a) of Article 7 of this Contract.

766 WATER ACQUIRED BY THE CONTRACTOR

767 OTHER THAN FROM THE UNITED STATES

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

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

770 be simultaneously transported through the same distribution facilities of the Contractor subject to the 

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

772 constructed without funds made available pursuant to Federal Reclamation law, the provisions of 

773 Federal Reclamation law will be applicable only to the Landholders of lands which receive Irrigation 

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

775 certification requirements as specified in the Acreage Limitation Rules and Regulations (43 CFR Part 

776 426); (iii) the water requirements of Eligible Lands within the Contractor's Service Area can be 
Contract No. 14-06-200-7864A-LTR1 

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

778 necessary to irrigate such Eligible Lands; and (iv) if the facilities utilized for commingling Irrigation 

779 Water and non-Project water are/were constructed with funds made available pursuant to Federal 

780 Reclamation law, the non-Project water will be subject to the acreage limitation provisions of Federal 

781 Reclamation law, unless the Contractor pays to the United States the incremental fee described in 43 

782 CFR 426.15. In determining the incremental fee, the Contracting Officer will calculate annually the 

783 cost to the Federal Government, including interest, of storing or delivering non-Project water, which 

784 for purposes of this Contract shall be determined as follows: The quotient shall be the unpaid 

785 distribution system costs divided by the total irrigable acreage within the Contractor’s Service Area. 

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

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

788 fee will be charged to each acre of excess or full cost land within the Contractor’s Service Area that 

789 receives non-Project water through Federally financed or constructed facilities. The incremental fee 

790 calculation methodology will continue during the term of this Contract absent the promulgation of a 

791 contrary Reclamation-wide rule, regulation or policy adopted after the Contractor has been afforded 

792 the opportunity to review and comment on the proposed rule, regulation or policy. If such rule, 

793 regulation or policy is adopted it shall supercede this provision. 

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

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

796 subject to the completion of appropriate environmental documentation, with the approval of the 

797 Contracting Officer and the execution of any contract determined by the Contracting Officer to be 

798 necessary, consistent with the following provisions: 
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799 (1) The Contractor may introduce non-Project water into Project facilities 

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

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

802 appropriate rate as determined by the applicable Project ratesetting policy, the RRA, and the Project 

803 use power policy, if such Project use power policy is applicable, each as amended, modified or 

804 superceded from time to time. 

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

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

807 determined by the Contracting Officer; (ii) reduce the quantity or quality of water available to other 

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

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

810 (3) Neither the United States nor the Operating Non-Federal Entity(ies) 

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

812 into or after it is delivered from the Project facilities. The Contractor hereby releases and agrees to 

813 defend and indemnify the United States and the Operating Non-Federal Entity (ies), and their 

814 respective officers, agents, and employees, from any claim for damage to persons or property, direct 

815 or indirect, resulting from the act(s) of the Contractor, its officers, employees, agents, or assigns, in

816 (i) extracting or diverting non-Project water from any source, or (ii) diverting such non-Project water 

817 into Project facilities. 

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

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

Formatted: Indent: First line: 0"
Contract No. 14-06-200-7864A-LTR1 

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

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

822 Officer, the United States and Project Contractors entitled to Project Water from Delta Division 

823 Facilities shall share priority to utilize the remaining capacity of the facilities declared to be 

824 available by the Contracting Officer for conveyance and transportation of non-Project water prior to 

825 any such remaining capacity being made available to non-Project contractors. Other Project 

826 Contractors shall have a second priority to any remaining capacity of facilities declared to be 

827 available by the Contracting Officer for conveyance and transportation of non-Project water prior to 

828 any such remaining capacity being made available to non-Project contractors. 

829 OPINIONS AND DETERMINATIONS

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

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

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

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

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

835 unreasonable opinion or determination. Each opinion or determination by either party shall be 

836 provided in a timely manner. Nothing in this subdivision (a) of this Article is intended to or shall 

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

838 determination implementing a specific provision of Federal law embodied in statute or regulation. 

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

840 to administer this Contract that are consistent with the provisions of this Contract, the laws of the 

841 United States and of the State of California, and the rules and regulations promulgated by the 
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842 Secretary of the Interior. Such determinations shall be made in consultation with the Contractor to 

843 the extent reasonably practicable. 

844 COORDINATION AND COOPERATION

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

846 and the Contractor shall communicate, coordinate, and cooperate with each other, and with other 

847 affected Project Contractors, in order to improve the operation and management of the Project. The 

848 communication, coordination, and cooperation regarding operations and management shall include, 

849 but not be limited to, any action which will or may materially affect the quantity or quality of Project 

850 Water supply, the allocation of Project Water supply, and Project financial matters including, but not 

851 limited to, budget issues. The communication, coordination, and cooperation provided for hereunder 

852 shall extend to all provisions of this Contract. Each party shall retain exclusive decision making 

853 authority for all actions, opinions, and determinations to be made by the respective party. 

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

855 other affected Project Contractors, and the Contracting Officer shall arrange to meet with interested 

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

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

858 provide, to the extent practicable, the means of mutual communication and interaction regarding 

859 significant decisions concerning Project operation and management on a real-time basis. 

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

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

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

863 the development of integrated resource management plans for the Contractor. Further, the 
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864 Contracting Officer will, as appropriate, seek authorizations for implementation of partnerships to 

865 improve water supply, water quality, and reliability. 

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

867 implementation and authorization in coordination with Project Contractors to improve the water 

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

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

870 California to seek improved water resource management. 

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

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

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

874 hold division level meetings to discuss Project operations, division level water management 

875 activities, and other issues as appropriate. 

876 (d) Without limiting the contractual obligations of the Contracting Officer under 

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

878 Contracting Officer’s ability to communicate, coordinate, and cooperate with the Contractor or other 

879 interested stakeholders or to make decisions in a timely fashion as needed to protect health, safety, or 

880 the physical integrity of structures or facilities. 

881 CHARGES FOR DELINQUENT PAYMENTS

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

883 on delinquent installments or payments. When a payment is not received by the due date, the 

884 Contractor shall pay an interest charge for each day the payment is delinquent beyond the due date. 
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885 When a payment becomes 60 days delinquent, the Contractor shall pay an administrative charge to 

886 cover additional costs of billing and processing the delinquent payment. When a payment is 

887 delinquent 90 days or more, the Contractor shall pay an additional penalty charge of six percent per 

888 year for each day the payment is delinquent beyond the due date. Further, the Contractor shall pay 

889 any fees incurred for debt collection services associated with a delinquent payment. 

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

891 the Federal Register by the Department of the Treasury for application to overdue payments, or the 

892 interest rate of one-half of one percent per month prescribed by Section 6 of the Reclamation Project 

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

894 remain fixed for the duration of the delinquent period. 

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

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

897 accrued interest, and finally to the overdue payment. 

898 EQUAL OPPORTUNITY

899 

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

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

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

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

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

905 include, but not be limited to, the following: Employment, upgrading, demotion, or transfer; 

906 recruitment or recruitment advertising; layoff or termination, rates of payment or other forms of 

907 compensation; and selection for training, including apprenticeship. The Contractor agrees to post in 

908 conspicuous places, available to employees and applicants for employment, notices to be provided by 

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

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

911 by or on behalf of the Contractor, state that all qualified applicants will receive consideration for 

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

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

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

915 provided by the Contracting Officer, advising the said labor union or workers' representative of the 

916 Contractor's commitments under Section 202 of Executive Order 11246 of September 24, 1965, and 

917 shall post copies of the notice in conspicuous places available to employees and applicants for 

918 employment. 

919 (d) The Contractor will comply with all provisions of Executive Order 
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920 No. 11246 of September 24, 1965, as amended, and of the rules, regulations, and relevant orders of 

921 the Secretary of Labor. 

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

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

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

925 and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, 

926 regulations, and orders. 

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

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

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

930 for further Government contracts in accordance with procedures authorized in said amended 

931 Executive Order, and such other sanctions may be imposed and remedies invoked as provided in said 

932 Executive Order, or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided 

933 by law. 

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

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

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

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

938 with respect to any subcontract or purchase order as may be directed by the Secretary of Labor as a 

939 means of enforcing such provisions, including sanctions for noncompliance: Provided, however, That 

940 in the event the Contractor becomes involved in, or is threatened with, litigation with a subcontractor 

941 or vendor as a result of such direction, the Contractor may request the United States to enter into such 

942 litigation to protect the interests of the United States. 

943 GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT

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

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

946 may be distributed among the Contractor's water users and notwithstanding the default of individual 

947 water users in their obligations to the Contractor. 

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

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

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

951 the advance payment of water rates due the United States. The Contractor shall not furnish water 

952 made available pursuant to this Contract for lands or parties which are in arrears in the advance 

953 payment of water rates levied or established by the Contractor. 

954 (c) With respect to subdivision (b) of this Article, the Contractor shall have no 
Contract No. 14-06-200-7864A-LTR1 

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

956 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

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

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

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

960 well as with their respective implementing regulations and guidelines imposed by the U.S. 

961 Department of the Interior and/or Bureau of Reclamation. 

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

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

964 benefits of, or be otherwise subjected to discrimination under any program or activity receiving 

965 financial assistance from the Bureau of Reclamation. By executing this Contract, the Contractor 

966 agrees to immediately take any measures necessary to implement this obligation, including 

967 permitting officials of the United States to inspect premises, programs, and documents. 

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

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

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

971 installment payments after such date on account of arrangements for Federal financial assistance 

972 which were approved before such date. The Contractor recognizes and agrees that such Federal 

973 assistance will be extended in reliance on the representations and agreements made in this Article, 

974 and that the United States reserves the right to seek judicial enforcement thereof. 

975 PRIVACY ACT COMPLIANCE

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

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

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

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

980 Stat. 1266), and pursuant to 43 CFR 426.18. 

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

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

983 for maintaining the certification and reporting records referenced in (a) above are considered to be 

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

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

986 Contractor with current copies of the Interior Department Privacy Act regulations and the Bureau of 
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987 Reclamation Federal Register Privacy Act System of Records Notice (Acreage Limitation--Interior, 

988 Reclamation-31) which govern the maintenance, safeguarding, and disclosure of information 

989 contained in the Landholder's certification and reporting records. 

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

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

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

993 authorized to grant requests by individuals for access to their own records. 

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

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

996 2.71; notify the requester accordingly of such referral; and provide the System Manager with 

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

998 requirements do not apply to individuals seeking access to their own certification and reporting forms 

999 filed with the Contractor pursuant to 43 CFR 426.18, unless the requester elects to cite the Privacy 

1000 Act as a basis for the request. 

1001 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

1002 25. In addition to all other payments to be made by the Contractor pursuant to this 

1003 Contract, the Contractor shall pay to the United States, within 60 days after receipt of a bill and 

1004 detailed statement submitted by the Contracting Officer to the Contractor for such specific items of 

1005 direct cost incurred by the United States for work requested by the Contractor associated with this 

1006 Contract plus indirect costs in accordance with applicable Bureau of Reclamation policies and 

1007 procedures. All such amounts referred to in this Article shall not exceed the amount agreed to in 

1008 writing in advance by the Contractor. This Article shall not apply to costs for routine contract 

1009 administration. 

1010 WATER CONSERVATION

1011 26. (a) Prior to the delivery of water provided from or conveyed through Federally 

1012 constructed or Federally financed facilities pursuant to this Contract, the Contractor shall be 

1013 implementing an effective water conservation and efficiency program based on the Contractor's water 
Contract No. 14-06-200-7864A-LTR1 

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1014 conservation plan that has been determined by the Contracting Officer to meet the conservation and 

1015 efficiency criteria for evaluating water conservation plans established under Federal law. The water 

1016 conservation and efficiency program shall contain definite water conservation objectives, appropriate 

1017 economically feasible water conservation measures, and time schedules for meeting those objectives. 

1018 Continued Project Water delivery pursuant to this Contract shall be contingent upon the Contractor’s 

1019 continued implementation of such water conservation program. In the event the Contractor's water 

1020 conservation plan or any revised water conservation plan completed pursuant to subdivision (d) of 

1021 this Article 26 have not yet been determined by the Contracting Officer to meet such criteria, due to 

1022 circumstances which the Contracting Officer determines are beyond the control of the Contractor, 

1023 water deliveries shall be made under this Contract so long as the Contractor diligently works with the 

1024 Contracting Officer to obtain such determination at the earliest practicable date, and thereafter the 

1025 Contractor immediately begins implementing its water conservation and efficiency program in 

1026 accordance with the time schedules therein. 

1027 (b) Should the amount of M&I Water delivered pursuant to subdivision (a) of 

1028 Article 3 of this Contract equal or exceed 2,000 acre-feet per Year, the Contractor shall implement 

1029 the Best Management Practices identified by the time frames issued by the California Urban Water 

1030 Conservation Council for such M&I Water unless any such practice is determined by the Contracting 

1031 Officer to be inappropriate for the Contractor. 

1032 (c) The Contractor shall submit to the Contracting Officer a report on the status of 

1033 its implementation of the water conservation plan on the reporting dates specified in the then existing 

1034 conservation and efficiency criteria established under Federal law. 
Contract No. 14-06-200-7864A-LTR1 

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1035 (d) At five-year intervals, the Contractor shall revise its water conservation plan to 

1036 reflect the then current conservation and efficiency criteria for evaluating water conservation plans 

1037 established under Federal law and submit such revised water management plan to the Contracting 

1038 Officer for review and evaluation. The Contracting Officer will then determine if the water 

1039 conservation plan meets Reclamation’s then current conservation and efficiency criteria for 

1040 evaluating water conservation plans established under Federal law. 

1041 (e) If the Contractor is engaged in direct groundwater recharge, such activity shall 

1042 be described in the Contractor’s water conservation plan. 

1043 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

1044 27. Except as specifically provided in Article 17 of this Contract, the provisions of this 

1045 Contract shall not be applicable to or affect non-project water or water rights now owned or hereafter 

1046 acquired by the Contractor or any user of such water within the Contractor's Service Area. Any such 

1047 water shall not be considered Project Water under this Contract. In addition, this Contract shall not 

1048 be construed as limiting or curtailing any rights which the Contractor or any water user within the 

1049 Contractor's Service Area acquires or has available under any other contract pursuant to Federal 

1050 Reclamation law. 

1051 OPERATION AND MAINTENANCE BY SAN LUIS AND DELTA-MENDOTA WATER 

1052 AUTHORITY

1053 28. (a) The O&M of a portion of the Project facilities which serve the Contractor, and 

1054 responsibility for funding a portion of the costs of such O&M, have been transferred to the San Luis 

1055 & Delta-Mendota Water Authority, an Operating Non-Federal Entity by separate agreement (8-07-

1056 20-X0354) between the United States and Operating Non-Federal Entity San Luis & Delta-Mendota 
Contract No. 14-06-200-7864A-LTR1 

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1057 Water Authority. That separate agreement shall not interfere with or affect the rights or obligations 

1058 of the Contractor or the United States hereunder. 

1059 (b) The Contracting Officer has previously notified the Contractor in writing that 

1060 the O&M of a portion of the Project facilities which serve the Contractor has been transferred to 

1061 Operating Non-Federal Entity San Luis & Delta-Mendota Water Authority, and therefore, the 

1062 Contractor shall pay directly to Operating Non-Federal Entity San Luis & Delta-Mendota Water 

1063 Authority, or to any successor approved by the Contracting Officer under the terms and conditions of 

1064 the separate agreement between the United States and Operating Non-Federal Entity San Luis & 

1065 Delta-Mendota Water Authority, described in subdivision (a) of this Article, all rates, charges, or 

1066 assessments of any kind, including any assessment for reserve funds, which Operating Non-Federal 

1067 Entity San Luis & Delta-Mendota Water Authority, or such successor determines, sets, or establishes 

1068 for the O&M of the portion of the Project facilities operated and maintained by Operating Non1069 Federal Entity San Luis & Delta-Mendota Water Authority, or such successor. Such direct payments 

1070 to Operating Non-Federal Entity San Luis & Delta-Mendota Water Authority, or such successor shall 

1071 not relieve the Contractor of its obligation to pay directly to the United States the Contractor’s share 

1072 of the Project Rates, Charges, and Tiered Pricing Component(s) except to the extent the Operating 

1073 Non-Federal Entity collects payments on behalf of the United States in accordance with subdivision 

1074 (a) of this Article. 

1075 (c) For so long as the O&M of any portion of the Project facilities serving the 

1076 Contractor is performed by Operating Non-Federal Entity San Luis & Delta-Mendota Water 

1077 Authority, or any successor thereto, the Contracting Officer shall adjust those components of the 

1078 Rates for Water Delivered under this Contract representing the cost associated with the activity being 
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1079 performed by Operating Non-Federal Entity San Luis & Delta-Mendota Water Authority, or its 

1080 successor. 

1081 (d) In the event the O&M of the Project facilities operated and maintained by 

1082 Operating Non-Federal Entity San Luis & Delta-Mendota Water Authority is re-assumed by the 

1083 United States during the term of this Contract, the Contracting Officer shall so notify the Contractor, 

1084 in writing, and present to the Contractor a revised Exhibit “B” which shall include the portion of the 

1085 Rates to be paid by the Contractor for Project Water under this Contract representing the O&M costs 

1086 of the portion of such Project facilities which have been re-assumed. The Contractor shall, thereafter, 

1087 in the absence of written notification from the Contracting Officer to the contrary, pay the Rates, 

1088 Charges, and the Tiered Pricing Component specified in the revised Exhibit “B” directly to the 

1089 United States in compliance with Article 7 of this Contract. 

1090 OPERATION AND MAINTENANCE BY CALIFORNIA DEPARTMENT OF WATER

1091 RESOURCES

1092 28.1 (a) The O&M of a portion of the Project facilities which serve the Contractor, and 

1093 responsibility for funding a portion of the costs of such O&M, have been transferred to the California 

1094 Department of Water Resources, an Operating Non-Federal Entity by a separate agreement (14-06-

1095 200-9755) between the United States and Operating Non-Federal Entity California Department of 

1096 Water Resources. This separate agreement shall not interfere with or affect the rights or obligations 

1097 of the Contractor or the United States hereunder. 

1098 (b) The Contracting Officer has previously notified the Contractor in writing that 

1099 the O&M of a portion of the Project facilities which serve the Contractor has been transferred to 

1100 Operating Non-Federal Entity California Department of Water Resources, and the Contractor shall 
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1101 pay directly to Operating Non-Federal Entity San Luis & Delta-Mendota Water Authority, or to any 

1102 successor approved by the Contracting Officer under the terms and conditions of the separate 

1103 agreement between the United States and Operating Non-Federal Entity San Luis & Delta-Mendota 

1104 Water Authority, described in subdivision (a) of Article 28 of this Contract, all rates, charges, or 

1105 assessments of any kind, including any assessment for reserve funds, which Operating Non-Federal 

1106 Entity California Department of Water Resources, or such successor determines, sets, or establishes 

1107 for the O&M of the portion of the Project facilities operated and maintained by Operating Non1108 Federal Entity California Department of Water Resources, or such successor. Such direct payments 

1109 to Operating Non-Federal Entity San Luis & Delta-Mendota Water Authority, or such successor shall 

1110 not relieve the Contractor of its obligation to pay directly to the United States the Contractor’s share 

1111 of the Project Rates, Charges, and Tiered Pricing Components except to the extent the Operating 

1112 Non-Federal Entity collects payments on behalf of the United States in accordance with the separate 

1113 agreement identified in subdivision (a) of Article 28 of this Contract. 

1114 (c) For so long as the O&M of any portion of the Project facilities serving the 

1115 Contractor is performed by Operating Non-Federal Entity California Department of Water Resources, 

1116 or any successor thereto, the Contracting Officer shall adjust those components of the Rates for 

1117 Water Delivered under this Contract representing the cost associated with the activity being 

1118 performed by Operating Non-Federal Entity California Department of Water Resources, or its 

1119 successor. 

1120 (d) In the event the O&M of the Project facilities operated and maintained by 

1121 Operating Non-Federal Entity California Department of Water Resources is re-assumed by the 

1122 United States during the term of this Contract, the Contracting Officer shall so notify the Contractor, 
Contract No. 14-06-200-7864A-LTR1 

51

1123 in writing, and present to the Contractor a revised Exhibit “B” which shall include the portion of the 

1124 Rates, Charges, and Tiered Pricing Component(s) to be paid by the Contractor for Project Water 

1125 under this Contract representing the O&M costs of the portion of such Project facilities which have 

1126 been re-assumed. The Contractor shall, thereafter, in the absence of written notification from the 

1127 Contracting Officer to the contrary, pay the Rates, Charges, and the Tiered Pricing Component 

1128 specified in the revised Exhibit “B” directly to the United States in compliance with Article 7 of this 

1129 Contract. 

1130 

1131 PUMPING PLANTS, POWER FOR PUMPING PLANTS, AND TRANSFER

1132 OF OPERATION AND MAINTENANCE TO THE CONTRACTOR

 

1133 28.2. (a) The United States shall furnish and install pumping plants and furnish the 

1134 amount of Project power the Contracting Officer determines is necessary to deliver Project Water to 

1135 the Contractor from the Delta-Mendota and San Luis Canals at the point(s) of delivery identified 

1136 pursuant to subdivision (a) of Article 5 at heads and elevations sufficient to irrigate by gravity the 

1137 areas within the Contractor’s Service Area below 700 feet mean sea level elevation. 

1138 (b) With advance approval of the Contracting Officer, the Contractor may, at its 

1139 own expense, furnish and install pumping facilities, and related electrical equipment, to enable it to 

1140 divert and deliver Project Water from the Delta-Mendota and San Luis Canals before the United 

1141 States furnishes and installs all the pumping plants referred to in subdivision (a) of this Article. The 

1142 United States shall furnish the amount of Project power needed to operate such pumping facilities; 

1143 Provided, That the Contractor maintains an agreement with an entity to convey such power to such 

1144 facilities, and the Contractor agrees to pay any and all charges assessed by that entity for such 

1145 service. 
Contract No. 14-06-200-7864A-LTR1 

52

1146 (c) The furnishing of power by the United States shall be in conformance with 

1147 operating criteria, rules, and regulations, including the project use power policy, established by the 

1148 Contracting Officer; Provided, That any such operating criteria, rules, and regulations, including the 

1149 project use power policy, established by the Contracting Officer shall not excuse the United States 

1150 from its obligation under subdivision (a) of this Article. Such operating criteria, rules, and 

1151 regulations shall be developed in cooperation with the Contractor and shall be based on acceptable 

1152 irrigation management practices and the power generation capacity available to the United States for 

1153 the furnishing of Project water to the Contractor. 

1154 (d) The Contractor hereby agrees to operate and maintain, at its own expense, all 

1155 of the pumping facilities described in subdivisions (a) and (b) of this Article in such a manner that 

1156 they remain in good and efficient condition; Provided, That the United States shall finance the costs 

1157 of all major replacements that the Contracting Officer determines are needed. 

1158 (e) The Contracting Officer or his representative shall at all times have access to 

1159 and may inspect and investigate the pumping facilities for the purpose of ascertaining if they are 

1160 being kept in safe and proper operating condition. 

1161 (f) No change in any of the pumping facilities, which in the opinion of the 

1162 Contracting Officer is substantial, shall be made by the Contractor without first obtaining the written 

1163 consent of the Contracting Officer. The Contractor promptly shall make any and all repairs and 

1164 replacements to the pumping facilities which in the opinion of the Contracting Officer are necessary. 

1165 In the event the Contractor neglects or fails to make such repairs and replacements or in the event of 

1166 operation by the United States of the pumping facilities pursuant to subdivision (i) of this Article, the 

1167 United States may cause the repairs and replacements to be made and the cost thereof, as determined 
Contract No. 14-06-200-7864A-LTR1 

53

1168 by the Contracting Officer, shall be paid by the Contractor to the United States upon notice of the 

1169 payment due but not later than April 1 of the year following that during which such work was 

1170 completed. 

1171 (g) In the event the Contracting Officer determines that the Contractor has not 

1172 properly cared for, operated, and maintained said pumping facilities or has failed to comply with any 

1173 of the provisions of this Article, then at the election of the Contracting Officer the United States may 

1174 take over from the Contractor the care and O&M of the pumping facilities by giving written notice to 

1175 the Contractor of such election and the effective date thereof. Thereafter during the period of 

1176 operation by the United States the Contractor shall pay to the United States in advance of the use of 

1177 such pumping facilities the Contractor’s share of the cost of O&M thereof and replacements 

1178 therefore, as fixed in notices from the Contracting Officer. In the event such advances are inadequate 

1179 to properly care for, operate, and maintain the pumping facilities to the end of any year, the 

1180 Contracting Officer may give written notice of a supplemental O&M charge and the Contractor shall 

1181 pay such amount on or before the date specified in said notice. Any amount of such advances 

1182 remaining unexpended or unobligated, at the option of the Contractor, either shall be refunded or 

1183 credited upon amounts to become due to the United States from the Contractor under the provisions 

1184 of this Contract in subsequent years. The pumping facilities so taken back by the United States may 

1185 be returned to the Contractor upon the furnishing to the Contractor of a written 90-day notice of 

1186 intention to retransfer. 

1187 (h) The Contractor shall hold the United States, its officers and employees 

1188 harmless from every and all claim for damages to persons or property arising out of or connected 

1189 with the Contractor’s O&M of the pumping facilities referred to in this Article; Provided, That 
Contract No. 14-06-200-7864A-LTR1 

54

1190 nothing contained herein shall be construed as an assumption of liability by the Contractor to parties 

1191 other than the United States with respect to such matters. 

1192 (i) During the time the pumping facilities are operated and maintained by the 

1193 Contractor, in addition to all other payments to be made by the Contractor under this Contract, the 

1194 Contractor shall pay to the United States pursuant to Article 25 hereof, costs incurred by the United 

1195 States for work associated with the pumping facilities under this Contract normally charged by the 

1196 United States to water users and properly and equitably chargeable to the Contractor. 

1197 (j) The Contracting Officer may make review of any part or all of the pumping 

1198 facilities being operated by the Contractor pursuant to this Article to assist the Contractor in 

1199 assessing the condition of facilities and the adequacy of the maintenance program(s). The 

1200 Contracting Officer shall prepare reports based on the examinations, inspections or audits, and 

1201 furnish copies of such reports and any recommendations to the Contractor. The Contractor shall 

1202 reimburse the actual cost incurred by the United States in making O&M examinations, inspections, 

1203 and audits, and preparing associated reports and recommendations. 

1204 (k) If deemed necessary by the Contracting Officer or requested by the Contractor, 

1205 special inspections of the pumping facilities being operated by the Contractor and of the Contractor’s 

1206 books and records may be made to ascertain the extent of any O&M deficiencies, to determine the 

1207 remedial measures required for their correction, and to assist the Contractor in solving specific 

1208 problems. Any special inspection or audit shall, except in a case of emergency, be made after written 

1209 notice to the Contractor and the actual cost thereof shall be paid by the Contractor to the United 

1210 States.
Contract No. 14-06-200-7864A-LTR1 

55

1211 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

1212 29. The expenditure or advance of any money or the performance of any obligation of the 

1213 United States under this Contract shall be contingent upon appropriation or allotment of funds. 

1214 Absence of appropriation or allotment of funds shall not relieve the Contractor from any obligations 

1215 under this Contract. No liability shall accrue to the United States in case funds are not appropriated 

1216 or allotted. 

1217 BOOKS, RECORDS, AND REPORTS

1218 30. (a) The Contractor shall establish and maintain accounts and other books and 

1219 records pertaining to administration of the terms and conditions of this Contract, including: the 

1220 Contractor's financial transactions, water supply data, and Project land and right-of-way agreements; 

1221 the water users' land-use (crop census), land ownership, land-leasing and water use data; and other 

1222 matters that the Contracting Officer may require. Reports thereon shall be furnished to the 

1223 Contracting Officer in such form and on such date or dates as the Contracting Officer may require. 

1224 Subject to applicable Federal laws and regulations, each party to this Contract shall have the right 

1225 during office hours to examine and make copies of the other party's books and records relating to 

1226 matters covered by this Contract. 

1227 (b) Notwithstanding the provisions of subdivision (a) of this Article, no books, 

1228 records, or other information shall be requested from the Contractor by the Contracting Officer unless 

1229 such books, records, or information are reasonably related to the administration or performance of 

1230 this Contract. Any such request shall allow the Contractor a reasonable period of time within which 

1231 to provide the requested books, records, or information. 

1232 (c) At such time as the Contractor provides information to the Contracting Officer 

1233 pursuant to subdivision (a) of this Article, a copy of such information shall be provided to the 

1234 Operating Non-Federal Entity. 

1235 ASSIGNMENT LIMITED--SUCCESSORS AND ASSIGNS OBLIGATED

1236 31. (a) The provisions of this Contract shall apply to and bind the successors and 

1237 assigns of the parties hereto, but no assignment or transfer of this Contract or any right or interest 

1238 therein shall be valid until approved in writing by the Contracting Officer. 
Contract No. 14-06-200-7864A-LTR1 

56

1239 (b) The assignment of any right or interest in this Contract by either party shall not 

1240 interfere with the rights or obligations of the other party to this Contract absent the written 

1241 concurrence of said other party. 

1242 (c) The Contracting Officer shall not unreasonably condition or withhold approval 

1243 of any proposed assignment. 

1244 SEVERABILITY

1245 32. In the event that a person or entity who is neither (i) a party to a Project contract, nor 

1246 (ii) a person or entity that receives Project Water from a party to a Project contract, nor (iii) an 

1247 association or other form of organization whose primary function is to represent parties to Project 

1248 contracts, brings an action in a court of competent jurisdiction challenging the legality or 

1249 enforceability of a provision included in this Contract and said person, entity, association, or 

1250 organization obtains a final court decision holding that such provision is legally invalid or 

1251 unenforceable and the Contractor has not intervened in that lawsuit in support of the plaintiff(s), the 

1252 parties to this Contract shall use their best efforts to (i) within 30 days of the date of such final court 

1253 decision identify by mutual agreement the provisions in this Contract which must be revised and (ii) 

1254 within three months thereafter promptly agree on the appropriate revision(s). The time periods 

1255 specified above may be extended by mutual agreement of the parties. Pending the completion of the 

1256 actions designated above, to the extent it can do so without violating any applicable provisions of 

1257 law, the United States shall continue to make the quantities of Project Water specified in this 

1258 Contract available to the Contractor pursuant to the provisions of this Contract which were not found 

1259 to be legally invalid or unenforceable in the final court decision. 
Contract No. 14-06-200-7864A-LTR1 

57

1260 RESOLUTION OF DISPUTES

1261 33. Should any dispute arise concerning any provisions of this Contract, or the parties’ 

1262 rights and obligations thereunder, the parties shall meet and confer in an attempt to resolve the 

1263 dispute. Prior to the Contractor commencing any legal action, or the Contracting Officer referring 

1264 any matter to the Department of Justice, the party shall provide to the other party 30 days’ written 

1265 notice of the intent to take such action; Provided, That such notice shall not be required where a 

1266 delay in commencing an action would prejudice the interests of the party that intends to file suit. 

1267 During the 30 day notice period, the Contractor and the Contracting Officer shall meet and confer in 

1268 an attempt to resolve the dispute. Except as specifically provided, nothing herein is intended to 

1269 waive or abridge any right or remedy that the Contractor or the United States may have. 

1270 OFFICIALS NOT TO BENEFIT

1271 34. No Member of or Delegate to Congress, Resident Commissioner, or official of the 

1272 Contractor shall benefit from this Contract other than as a water user or landowner in the same 

1273 manner as other water users or landowners. 

1274 CHANGES IN CONTRACTOR’S SERVICE AREA

1275 35. (a) While this Contract is in effect, no change may be made in the Contractor's 

1276 Service Area, by inclusion or exclusion of lands, dissolution, consolidation, merger, or otherwise, 

1277 except upon the Contracting Officer's written consent. 

1278 

1279 (b) Within 30 days of receipt of a request for such a change, the Contracting 

1280 Officer will notify the Contractor of any additional information required by the Contracting Officer 

1281 for processing said request, and both parties will meet to establish a mutually agreeable schedule for 
Contract No. 14-06-200-7864A-LTR1 

58

1282 timely completion of the process. Such process will analyze whether the proposed change is likely 

1283 to: (i) result in the use of Project Water contrary to the terms of this Contract; (ii) impair the ability of 

1284 the Contractor to pay for Project Water furnished under this Contract or to pay for any Federally1285 constructed facilities for which the Contractor is responsible; and (iii) have an impact on any Project 

1286 Water rights applications, permits, or licenses. In addition, the Contracting Officer shall comply with 

1287 the NEPA and the ESA. The Contractor will be responsible for all costs incurred by the Contracting 

1288 Officer in this process, and such costs will be paid in accordance with Article 25 of this Contract. 

1289 FEDERAL LAWS

1290 36. By entering into this Contract, the Contractor does not waive its rights to contest the 

1291 validity or application in connection with the performance of the terms and conditions of this 

1292 Contract of any Federal law or regulation; Provided, That the Contractor agrees to comply with the 

1293 terms and conditions of this Contract unless and until relief from application of such Federal law or 

1294 regulation to the implementing provision of the Contract is granted by a court of competent 

1295 jurisdiction. 

1296 NOTICES

1297 37. Any notice, demand, or request authorized or required by this Contract shall be 

1298 deemed to have been given, on behalf of the Contractor, when mailed, postage prepaid, or delivered 

1299 to the Area Manager, South-Central California Area Office, 1243 N Street, Fresno, California 93721, 

1300 and on behalf of the United States, when mailed, postage prepaid, or delivered to the Board of 

1301 Directors of the Panoche Water District, 52027 West Althea Avenue, Firebaugh, California 93622. 

1302 The designation of the addressee or the address may be changed by notice given in the same manner 

1303 as provided in this Article for other notices. 

1304 CONFIRMATION OF CONTRACT

1305 38. The Contractor, after the execution of this Contract, shall promptly seek to secure a 

1306 decree of a court of competent jurisdiction of the State of California, confirming the execution of this 

1307 Contract. The Contractor shall furnish the United States a certified copy of the final decree, the 

1308 validation proceedings, and all pertinent supporting records of the court approving and confirming 

1309 this Contract, and decreeing and adjudging it to be lawful, valid, and binding on the Contractor. 
Contract No. 14-06-200-7864A-LTR1 

59

1310 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of the day and 

1311 year first above written. 

1312 THE UNITED STATES OF AMERICA 

1313 By: _________________________________________ 

1314 Regional Director, Mid-Pacific Region 

1315 Bureau of Reclamation 

1316 (SEAL) 

1317 PANOCHE WATER DISTRICT 

1318 By: _________________________________________ 

1319 President of the Board of Directors 

1320 Attest: 

1321 By: __________________________________ 

1322 Secretary of the Board of Directors 

1323 (h:\PUB 440\lrc\Final Draft LTRC’s – Fresno, Tracy\10-22-04 Panoche WD Final Draft LTRC with 

1324 exhibits.doc) 
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"
Contract No. 14-06-200-7864A-LTR1 

 EXHIBIT B

PANOCHE WATER DISTRICT

Water Rates and Charges

2004 Rates Per Acre-Foot

Irrigation Water Irrigation Water M&I Water

COST-OF-SERVICE (COS) RATES: SLC DMC

Capital Rates: $13.48 $10.50 $22.47 

 

O&M Rates: Water Marketing $7.59 $7.59 $5.01 

 Storage $5.83 $5.83 $6.38 

 Conveyance * *

 Direct Pumping (Project Use Energy) $0.01 Tracy Pumping * *

 San Luis Drain 

Deficit Rates: Non-Interest Bearing Interest Bearing 

 

TOTAL COST-OF-SERVICE RATES (COS):

M&I FULL-COST RATE:

$26.91 $23.92 $39.87 

$53.89

 

FULL-COST RATES: SECTION 202(3) Rate is applicable to a Qualified Recipient or to a 

Limited Recipient receiving irrigation water on or before October 1, 

1981. $38.37 $35.56 

 

205 FULL-COST RATES: SECTION 205(a)(3) Rate is applicable to a Qualified Recipient or 

to a Limited Recipient that did not receive irrigation water on or 

before October 1, 1981. $46.05 $42.63 

 

Tiered Pricing Component >80% <=90% of Contract Total 

[Full Cost Rate - COS Rate /2]: 

 

Tiered Pricing Component >90% of Contract Total [Full Cost Rate - COS Rate]:

 

SURCHARGES UNDER P.L. 102-575 TO RESTORATION FUND** $7.82 $7.82 $15.64 

 

* Conveyance and Conveyance Pumping Operation and maintenance costs were removed

 for ratesetting purposes and are to be billed directly to the water authorities.

** The surcharges are payments in addition to the water rates and were determined pursuant

 to Title XXXIV of Public Law 102-575. Restoration fund surcharges under P.L. 102-575

 are on a fiscal year basis (10/1-9/30).