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AGREEMENT ON WATER QUANTITIES

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

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

Contractor as to the quantities of water and the allocation thereof between Base Supply and 

Project Water which may be diverted by the Contractor from the Sacramento River for beneficial 

use on the land shown on Exhibit B which said diversion, use, and allocation shall not be 

disturbed so long as the Contractor shall fulfill all of its obligations hereunder; 

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

provisions of Article 9(a)(1) hereof. 

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

against others than the United States or of the United States against any person other than the 

Contractor: Provided, however, that in the event the Contractor, the United States, or any other 

person shall become a party to a general adjudication of rights to the use of water of the 

Sacramento River system, this Settlement Contract shall not jeopardize the rights or position of 

either party hereto or of any other person and the rights of all such persons in respect to the use 

of such water shall be determined in such proceedings the same as if this Settlement Contract had 

not been entered into, and if final judgment in any such general adjudication shall determine that 

the rights of the parties hereto are different from the rights as assumed herein, the parties shall 

negotiate an amendment to give effect to such judgment. In the event the parties are unable to 

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

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

disputes, to assist in resolving the impasse. The cost of the mediation will be shared equally. A 
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failure to reach agreement on an amendment within 60 days of the end of mediation will cause 

the immediate termination of this Settlement Contract. 

(c) In the event this Settlement Contract terminates, the rights of the parties to 

thereafter divert and use water shall exist as if this Settlement Contract had not been entered into; 

and the fact that as a compromise settlement of a controversy as to the respective rights of the 

parties to divert and use water and the yield of such rights during the term hereof, this Settlement 

Contract places a limit on the Contract Total to be diverted annually by the Contractor during the 

Settlement Contract term and segregates it into Base Supply and Project Water shall not 

jeopardize the rights or position of either party with respect to its water rights or the yield thereof 

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

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

neither the provisions of this Settlement Contract, action taken thereunder, nor payments made 

thereunder to the United States by the Contractor shall be construed as an admission that any part 

of the water used by the Contractor during the term of this Settlement Contract was in fact water 

to which it would not have been entitled under water rights owned by it nor shall receipt of 

payments thereunder by the United States from the Contractor be construed as an admission that 

any part of the water used by the Contractor during the term of this Settlement Contract was in 

fact water to which it would have been entitled under water rights owned by it.

(d) In the event that the California State Water Resources Control Board or a court of 

competent jurisdiction issues a Final Bay-Delta Water Right Decision, then the provisions of this 

Article 9(d) shall apply.

 (1) Contractor and Reclamation shall meet and confer regarding the effect, if 

any, of a Final Bay-Delta Water Right Decision on the rights or responsibilities of Contractor or 
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Reclamation under this Settlement Contract and the need, if any, to modify the Settlement 

Contract in light of such Decision. If Contractor and Reclamation are unable to reach agreement 

regarding the matters described in the preceding sentence within 90 days following 

commencement of the meet and confer process, then Contractor and Reclamation shall retain a 

neutral mediator, experienced in the resolution of water disputes, for the purpose of resolving 

such matters through non-binding mediation. The cost of the mediator’s services shall be shared 

as follows: 50 percent as to Reclamation and 50 percent as to the Contractors that participate in 

the mediation. Each party shall bear its own attorneys and expert consultant fees and costs.

 (2) If Contractor and Reclamation are unable to reach agreement regarding the 

effect, if any, of a Final Bay-Delta Water Right Decision on the rights or responsibilities of 

Contractor or Reclamation under this Settlement Contract or the need, if any, to modify the 

Settlement Contract in light of such Decision within one year following commencement of the 

meet and confer process described in Article 9(d)(1), then Contractor and Reclamation shall 

submit the matter to binding arbitration in accordance with this Article 9(d)(2).

 (i) The arbitration panel shall consist of three arbitrators, each of 

whom shall have experience in the resolution of water disputes in California. Reclamation shall 

select one arbitrator and the Contractors that participate in the arbitration shall select one 

arbitrator. The two arbitrators selected shall then select a third arbitrator. None of the arbitrators 

shall be or previously have been an officer, director, employee or independent contractor of any 

party to the arbitration. None of the arbitrators shall have previously served as a mediator in 

connection with the Settlement Contract.

 (ii) An arbitration hearing will be conducted in accordance with

written procedures established by the arbitrators prior to the commencement of the arbitration 
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proceeding, but such procedures will be consistent with Article 9 of this Settlement Contract. 

Any offer of compromise or the details of the negotiation of the dispute made prior to the 

commencement of arbitration will be inadmissible at the arbitration hearing. 

 (iii) The arbitrators may modify the rights or obligations of Contractor 

or Reclamation under this Settlement Contract in a manner consistent with Article 9 but only to 

the extent necessary to reflect changed conditions arising from a Final Bay-Delta Water Right 

Decision. The arbitrators shall have no authority whatsoever to modify the rights or obligations 

of Contractor or Reclamation under this Settlement Contract in a manner that is inconsistent with 

Article 9, or based on considerations unrelated to a Final Bay-Delta Water Right Decision. The 

arbitrators may impose no other remedies (including, without limitation, damage remedies) 

beyond those specified in this sub-paragraph.

 (iv) Judgment on the award rendered by the arbitrators may be entered 

in any court of competent jurisdiction and is final and binding upon the parties except to the 

extent it may be challenged on grounds that the judgment exceeds the authority of the arbitrators 

under this Settlement Contract.

 (v) The cost of the arbitrators’ services shall be borne as follows: 50 

percent as to Reclamation and 50 percent as to the Contractors that participate in the arbitration. 

Each party shall bear its own attorneys and expert consultant fees and costs.

 (vi) In the event of the imposition by the arbitrators of new terms and 

conditions of the Contract with respect to Base Supply, the Contracting Officer will not assess 

any charge for the rescheduling of any Base Supply as would otherwise be required under the 

provisions of Article 3(c) of this Settlement Contract.
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 (vii) This Article 9(d)(2) shall be narrowly construed. The only matters

subject to binding arbitration under this Settlement Contract are matters concerning the effect, if 

any, of a Final Bay-Delta Water Right Decision on the rights or obligations of Reclamation or 

Contractor under this Settlement Agreement. All other disputes arising under this Settlement 

Contract shall be subject to judicial resolution and the parties reserve the right to pursue all 

remedies available under applicable law. Contractor and Reclamation each reserves all rights 

with respect to the authority of the United States to change the quantities of Base Supply and 

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

specified in the Existing Contract.

Note: The following definition will be added to Article 1:

 (i) “Final Bay-Delta Water Right Decision” means a decision of the California State 

Water Resources Control Board or a court of competent jurisdiction, from which all available 

appeals or other rights of review have been exhausted, that purports to modify the water rights of 

Contractor in order to impose an obligation to meet flow requirements associated with a Water 

Quality Control Plan for the San Francisco Bay/Sacramento-San Joaquin Delta Estuary. For 

purposes of this Settlement Contract, a “Final Bay-Delta Water Right Decision” includes only 

the incremental obligation imposed as a result of any modification of the California State Water 

Resources Control Board’s 1995 Water Quality Control Plan or the associated Revised Water 

Right Decision 1641 which, taken together, will be considered the baseline for application of 

Article 9(d). Any water right decision allocating responsibility to meet water quality 

requirements contained in the 1995 Water Quality Control Plan shall not be subject to the 

provisions of Article 9(d).

Formatted
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