RO 10-18-12 

CCAO 9/28/12 

CCAO 9/13/12 

CCAO 8/27/12 

CCAO 8/16/12 

 Rev.CCAO draft 01/27/12 

Rev. R.O. Draft 05/07/09 

Rev. R. O. Draft 11/30/05 

Rev. CCAO Draft 08/15-2001 

M&I Only 

Contract No. 14-06-200-5198A-LTR1 

UNITED STATES 

DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

Central Valley Project, California 

LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES

AND

SACRAMENTO MUNICIPAL UTILITY DISTRICT

PROVIDING FOR PROJECT WATER SERVICE

FROM THE AMERICAN RIVER DIVISION

Table of Contents

Article No. Title Page No.

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

Explanatory Recitals ............................................................................................ 2-6 

1 Definitions............................................................................................................ 6-9 

2 Term of Contract ....................................................................................................10 

3 Water to be Made Available and Delivered to the Contractor ......................... 11-15 

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

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

6 Measurement of Water Within the Service Area ............................................. 18-20 

7 Rates and Method of Payment for Water ......................................................... 20-25 

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

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

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

11 Temporary Reductions—Return Flows ........................................................... 28-29 

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

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

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

15 Protection of Water and Air Quality ................................................................ 30-31 

16 Quality of Water .....................................................................................................31 

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

18 Opinions and Determinations ................................................................................33 

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

Draft
Contract No.14-06-200-5198A-LTR1 

Table of Contents – continued

Article No. Title Page No.

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

21 Equal Opportunity ............................................................................................ 36-37 

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

23 Compliance With Civil Rights Laws and Regulations .................................... 37-38 

24 Privacy Act Compliance ........................................................................................38 

25 Contractor to Pay Certain Miscellaneous Costs .....................................................38 

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

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

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

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

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

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

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

33 Resolution of Disputes ...........................................................................................43 

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

35 Changes in Contractor’s Organization ............................................................. 43-44 

36 Federal Laws ..........................................................................................................44 

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

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

39 Subcontractor for Resale of Water .........................................................................45 

40 Medium for Transmitting Payments ......................................................................45 

41 Contract Drafting Considerations ..........................................................................45 

Signature Page........................................................................................................46 

Exhibit A – Map of Contractor’s Service Area 

Exhibit B – Rates and Charges 

Draft
RO 10-18-12

CCAO 9/28/12

CCAO 9/13/12

CCAO 8/27/12

CCAO 8/16/12

 Rev.CCAO draft 01/27/12

Rev. R.O. Draft 05/07/09

Rev. R. O. Draft 11/30/05

Rev. CCAO Draft 08/15-2001 

M&I Only 

Contract No.14-06-200-5198A-LTR1 

1 UNITED STATES 

2 DEPARTMENT OF THE INTERIOR 

3 BUREAU OF RECLAMATION 

4 Central Valley Project, California 

5 LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES

6 AND

7 SACRAMENTO MUNICIPAL UTILITY DISTRICT

8 PROVIDING FOR PROJECT WATER SERVICE

9 FROM THE AMERICAN RIVER DIVISION

10 THIS CONTRACT, made this ______ day of ____________________, 20____, 

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

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

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

14 July 2, 1956 (70 Stat. 483), June 21, 1963 (77 Stat. 68), October 12, 1982 (96 Stat. 1263), 

15 October 27, 1986 (100 Stat. 3050), as amended, November 5, 1990 (104 Stat. 2074), and 

16 Title XXXIV of the Act of October 30, 1992 (106 Stat. 4706), all collectively hereinafter referred 

17 to as Federal Reclamation law, between the UNITED STATES OF AMERICA, hereinafter 

18 referred to as the United States,, and the SACRAMENTO MUNICIPAL UTILITY DISTRICT, 

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

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

21 WITNESSETH, That: 

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Contract No.14-06-200-5198A-LTR1 

2

22 EXPLANATORY RECITALS

[1st 23 ] WHEREAS, the United States has constructed and is operating the Central Valley 

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

25 flood control, irrigation, municipal, domestic, industrial, fish and wildlife mitigation, protection 

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

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

28 and the San Joaquin River and their tributaries; and 

[2nd 29 ] WHEREAS, the United States constructed Folsom Dam and Reservoir, 

30 hereinafter collectively referred to as the American River Division facilities, which will be used 

31 in part for the furnishing of water to the Contractor pursuant to the terms of this Contract; and 

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

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

34 [3.1] WHEREAS, on June 28, 1957, the City of Sacramento and the Contractor 

35 executed an Agreement of Assignment in which the City of Sacramento granted to the Contractor 

36 the right to divert up to 20 cubic feet per second for use in a thermal electric power generating 

37 plant, from either the American or Sacramento Rivers, under rights held by the City of 

38 Sacramento, hereinafter referred to as Assigned Water; and 

39 [3.2] WHEREAS, the Contractor and the United States determined the Assigned Water 

40 shall be conveyed under a separate Warren Act contract; and 

[4th 41 ] WHEREAS, the Contractor and the United States entered into Contract 

42 No. 14-06-200-5198A, dated November 20, 1970, hereinafter referred to as the Existing 

43 Contract, which established terms for the delivery to the Contractor of a total of up to 

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Contract No.14-06-200-5198A-LTR1 

3

44 75,000 acre-feet of water, including the Assigned Water, from the American River Division 

45 through December 31, 2012; and 

46 [4.1] WHEREAS, on July 12, 2006, the Contractor assigned to the Sacramento County 

47 Water Agency the right, title, and interest in and to 30,000 acre-feet of Project Water under the 

48 Existing Contract, including any rights to renew the Existing Contract; and 

[5th 49 ] WHEREAS, the United States and the Contractor have subsequently entered into 

50 a binding agreement, identified as Binding Agreement No. 14-06-200-5198A-BA, which sets out 

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

52 expiration date after completion of a programmatic environmental impact statement (PEIS) and 

53 other appropriate environmental documentation and negotiation of a renewal contract, and which 

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

[6th 55 ] WHEREAS, Section 3404(c) of the CVPIA provides for long-term renewal of 

56 interim and existing long-term Central Valley Project Water service contracts following 

57 completion of appropriate environmental documentation, including a programmatic 

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

59 (NEPA) analyzing the direct and indirect impacts and benefits of implementing the CVPIA and 

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

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

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

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

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

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

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Contract No.14-06-200-5198A-LTR1 

4

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

67 of its obligations under the Existing Contract; and 

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

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

70 reasonable and beneficial use and/or has demonstrated projected future demand for water use 

71 such that the Contractor has the capability and expects to utilize fully for reasonable and beneficial 

72 use the quantity of Project Water to be made available to it pursuant to this Contract; and 

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

74 within California for more than 50 years, and is considered by the Contractor as an essential 

75 portion of its water supply; and 

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

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

78 Project; and 

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

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

81 Project for all Project purposes; and 

82 [13.1] WHEREAS, the Contractor and the water users in its Service Area have improved 

83 and will continue to improve water use efficiency through water conservation, water reclamation, 

84 and other best management practices; however, implementing these measures have reduced and 

85 continue to reduce the ability of the Contractor and the water users in its Service Area to 

86 withstand a Condition of Shortage; and 

[14th 87 ] WHEREAS, the mutual goals of the United States and the Contractor include: 

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

Draft
Contract No.14-06-200-5198A-LTR1 

5

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

90 to achieve a reasonable balance among competing demands for use of Project Water; and to 

91 comply with all applicable environmental statutes, all consistent with the legal obligations of the 

92 United States relative to the Project; and 

[15th 93 ] WHEREAS, the parties intend by this Contract to develop a more cooperative 

94 relationship in order to achieve their mutual goals; and 

95 [15.1] WHEREAS, the Contractor is a signatory to the Water Forum Agreement, dated 

96 April 2000, which has the co-equal objectives to (1) provide a reliable and safe water supply for 

97 the Sacramento region’s economic health and planned development through the year 2030, and 

98 (2) preserve the fishery, wildlife, recreational and aesthetic values of the lower American River; and 

99 [15.2] WHEREAS, the Contracting Officer is in support of the co-equal objectives of the 

100 Water Forum Agreement and intends to work cooperatively with the Contractor to investigate 

101 actions that they could take to implement the objectives of the Water Forum Agreement, which, 

102 if agreed to, would be the subject of a separate agreement between them; and 

[16th 103 ] WHEREAS, the United States and the Contractor entered into a settlement 

104 agreement dated March 3, 2005 for settlement of certain issues related to Project M&I ratesetting 

105 and acknowledge that this Contract does not alter or amend the terms and conditions of that 

106 agreement; and 

[17th 107 ] WHEREAS, the United States and the Contractor agreed to develop a separate 

agreement1

108 by the execution date of this Contract, which reserves the rights of Contractor with 

109 respect to certain legal and other concerns expressed by the Contractor during the negotiation of 

 

1 The exact type and form of an agreement between the parties has yet to be determined 

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Contract No.14-06-200-5198A-LTR1 

6

110 the Contract. These concerns relate to the financial and certain other terms of the existing 

111 Contract and whether the terms of this Contract should be revised to address those concerns; and 

[18

th 112 ] WHEREAS, the United States and the Contractor are willing to enter into this 

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

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

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

116 DEFINITIONS

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

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

119 (a) ―Calendar Year‖ shall mean the period January 1 through December 31, 

120 both dates inclusive; 

121 (b) ―Charges‖ shall mean the payments required by Federal Reclamation law 

122 in addition to the Rates and Tiered Pricing Components specified in this Contract as determined 

123 annually by the Contracting Officer pursuant to this Contract; 

124 (c) ―Condition of Shortage‖ shall mean a condition respecting the Project 

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

126 Contract Total; 

127 (d) ―Contracting Officer‖ shall mean the Secretary of the Interior’s duly 

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

129 or regulation; 

130 (e) ―Contract Total‖ shall mean the maximum amount of water to which the 

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

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Contract No.14-06-200-5198A-LTR1 

7

132 (f) ―Contractor’s Service Area‖ shall mean the area to which the Contractor is 

133 permitted to provide Project Water obtained under this Contract as illustrated in Exhibit ―A‖

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

135 Contract without amendment of this Contract; 

136 (g) ―CVPIA‖ shall mean the Central Valley Project Improvement Act, 

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

138 (h-i) Omitted; 

139 (j) ―Full Cost Rate‖ shall mean an annual rate, as determined by the 

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

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

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

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

144 and funded O&M deficits from October 12, 1982, on costs outstanding at that date, or from the 

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

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

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

148 and Regulations for the RRA; 

149 (k–l) Omitted; 

150 (m) ―Irrigation Water‖ shall mean water made available from the Project that is 

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

152 incidental thereto, and watering of livestock; 

153 (n) Omitted; 

Draft
Contract No.14-06-200-5198A-LTR1 

8

154 (o) ―Municipal and Industrial (M&I) Water‖ shall mean Project Water, other 

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

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

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

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

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

160 this Article; 

161 (p) ―M&I Full Cost Water Rate‖ shall mean the Full Cost Rate applicable to 

162 the delivery of M&I Water; 

163 (q) ―Operation and Maintenance‖ or ―O&M‖ shall mean normal and 

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

165 maintenance of Project facilities; 

166 (r) Omitted; 

167 (s) ―Project‖ shall mean the Central Valley Project owned by the United 

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

169 (t) ―Project Contractors‖ shall mean all parties who have water service 

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

171 Reclamation law; 

172 (u) ―Project Water‖ shall mean all water that is developed, diverted, stored, or 

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

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

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Contract No.14-06-200-5198A-LTR1 

9

175 (v) ―Rates‖ shall mean the payments determined annually by the Contracting 

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

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

178 (w) ―Recent Historic Average‖ shall mean the most recent five-year average of 

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

180 preceding contract(s); 

181 (x) ―Secretary‖ shall mean the Secretary of the Interior, a duly appointed 

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

183 through any agency of the Department of the Interior; 

184 (y) ―Tiered Pricing Component‖ shall be the incremental amount to be paid 

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

186 (z) ―Water Delivered‖ or ―Delivered Water‖ shall mean Project Water 

187 diverted for use by the Contractor at the point(s) of delivery approved by the Contracting Officer; 

188 (aa) ―Water Made Available‖ shall mean the estimated amount of Project 

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

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

191 (bb) ―Water Scheduled‖ shall mean Project Water made available to the 

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

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

194 (cc) ―Year‖ shall mean the period from and including March 1 of each 

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

Draft
Contract No.14-06-200-5198A-LTR1 

10

196 TERM OF CONTRACT

197 2. (a) This Contract shall be effective on the date first written above, and shall 

198 remain in effect through February 28, 20__ and supersedes the Existing Contract. In the event 

199 the Contractor wishes to renew this Contract beyond February 28, 20__, the Contractor shall 

200 submit a request for renewal in writing to the Contracting Officer no later than two years prior to 

201 the date this Contract expires. 

202 (b) Omitted. 

203 (c) This Contract shall be renewed for successive periods of up to 40 years 

204 each, which periods shall be consistent with the then-existing Reclamation-wide policy, under 

205 terms and conditions mutually agreeable to the parties and consistent with Federal and State law. 

206 The Contractor shall be afforded the opportunity to comment to the Contracting Officer on the 

207 proposed adoption and application of any revised policy applicable to the delivery of M&I Water 

208 that would limit the term of any subsequent renewal contract with the Contractor for the 

209 furnishing of M&I Water to less than 40 years. 

210 (d) The Contracting Officer shall make a determination 10 years after the date 

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

212 whether a conversion to a contract under subsection (c)(1) of Section 9 of the Reclamation 

213 Project Act of 1939 can be accomplished. The Contracting Officer anticipates that during the 

214 term of this Contract, all authorized Project construction expected to occur will have occurred, 

215 and on that basis the Contracting Officer agrees upon such completion to allocate all costs that 

216 are properly assignable to the Contractor, and agrees further that, at any time after such allocation 

217 is made, and subject to satisfaction of the conditions set out in this subdivision of this Article, 

218 this Contract shall, at the request of the Contractor, be converted to a contract under said 

Draft
Contract No.14-06-200-5198A-LTR1 

11

219 subsection 9(c)(1), subject to applicable Federal law and under stated terms and conditions 

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

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

222 of the amount credited to return by the Contractor as provided for under Federal Reclamation 

223 law, the remaining amount of construction costs assignable for ultimate return by the Contractor 

224 can probably be repaid to the United States within the term of a contract under said 

225 subsection (c)(1) of Section 9. If the remaining amount of costs that are properly assignable to 

226 the Contractor cannot be determined during the term of this Contract, the Contracting Officer 

227 shall notify the Contractor, and provide the reason(s) why such a determination could not be 

228 made. Further, the Contracting Officer shall make such a determination as soon thereafter as 

229 possible so as to permit, upon request of the Contractor and satisfaction of the conditions set out 

230 above, conversion to a contract under said subsection (c)(1) of Section 9. In the event such 

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

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

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

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

235 provisions of this subdivision (d). 

236 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE CONTRACTOR

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

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

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

240 30,000 acre-feet of M&I water. The quantity of Water Delivered to the Contractor in accordance 

Draft
Contract No.14-06-200-5198A-LTR1 

12

241 with this subdivision shall be scheduled and paid for pursuant to the provisions of Articles 4 and 7 

242 of this Contract. 

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

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

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

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

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

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

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

250 Water Made Available to the Contractor was 28,500 acre-feet based on Existing Contract 

251 minimum quantities. Nothing in subdivision (b) of this Article shall affect the rights and 

252 obligations of the parties under any provision of this Contract.

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

254 applicable legal requirements. 

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

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

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

258 utilizing Project Water or other water furnished pursuant to this Contract conducted within the 

259 Contractor’s Service Area which are consistent with applicable State law and result in use 

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

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

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

263 sufficient lawful uses exist in the Contractor’s Service Area to show reasonable and beneficial 

Draft
Contract No.14-06-200-5198A-LTR1 

13

264 use of the quantity of Delivered Water based on a long-term average in compliance with Federal 

265 Reclamation law. Groundwater recharge programs, groundwater banking programs, surface 

266 water storage programs, and other similar programs utilizing Project Water or other water 

267 furnished pursuant to this Contract conducted outside the Contractor’s Service Area may be 

268 permitted upon written approval of the Contracting Officer, which approval will be based upon 

269 environmental documentation, Project Water rights, and Project operational concerns. The 

270 Contracting Officer will address such concerns in regulations, policies, or guidelines. 

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

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

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

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

275 Contract, which evidences in excess of 40 years of diversions for M&I purposes of the quantities 

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

277 developing an appropriate baseline for the biological assessment prepared pursuant to the ESA, 

278 and any other needed environmental review. Nothing herein shall be construed to prevent the 

279 Contractor from challenging or seeking judicial relief in a court of competent jurisdiction with 

280 respect to any biological opinion or other environmental documentation referred to in this Article. 

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

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

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

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

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

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

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Contract No.14-06-200-5198A-LTR1 

14

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

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

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

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

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

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

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

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

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

296 Year referred to as ―carryover.‖ The Contractor may request permission to use during the current 

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

298 Contractor during the subsequent Year referred to as ―preuse.‖ The Contracting Officer’s written 

299 approval may permit such uses in accordance with applicable statutes, regulations, guidelines, 

300 and policies. 

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

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

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

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

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

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

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

308 renewal contracts. 

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Contract No.14-06-200-5198A-LTR1 

15

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

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

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

312 such approval. 

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

314 rights necessary for the Project and to provide the Water Made Available under this Contract. 

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

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

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

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

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

320 Contract to use Project Water. 

321 (k) The delivery of Project Water to, and use of Project Water at, any electric 

322 power generating facility within the Contractor’s Service Area (i) from which the Contractor 

323 purchases all of the electricity produced by such facility and (ii) which is owned by a joint 

324 powers authority or other entity controlled by the Contractor, shall be deemed to be a delivery of 

325 Project Water to, and use of such water by, the Contractor pursuant to this Contract. 

326 TIME FOR DELIVERY OF WATER

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

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

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

330 Historic Average and will be updated monthly, and more frequently if necessary, based on 

331 then-current operational and hydrologic conditions and a new declaration with changes, if any, to 

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Contract No.14-06-200-5198A-LTR1 

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332 the Water Made Available will be made. The Contracting Officer shall provide forecasts of 

333 Project operations and the basis of the estimate, with relevant supporting information, upon the 

334 written request of the Contractor. Concurrently with the declaration of the Water Made 

335 Available, the Contracting Officer shall provide the Contractor with the updated Recent 

336 Historic Average. 

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

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

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

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

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

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

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

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

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

346 during any Year. 

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

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

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

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

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

352 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

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

354 Contract shall be delivered to the Contractor at: (i) the turnout at milepost 24.681 (left side) on 

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355 the Folsom-South Canal located at a point 700 feet upstream from the inlet transition of the 

356 Laguna Creek siphon, and (ii) any additional point or points of delivery either on Project 

357 facilities or another location or locations mutually agreed to in writing by the Contracting Officer 

358 and the Contractor. 

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

360 sufficient flows and levels of water in the Folsom-South Canal to deliver Project Water to the 

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

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

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

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

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

366 United States, or other appropriate entity as designated by the Contracting Officer at the point or 

367 points of delivery established pursuant to subdivision (a) of this Article; Provided, That if the 

368 Project Water delivered pursuant to this Contract is diverted at a location or in a manner so as to 

369 be commingled with water diverted by any other entity, the point of measurement for Project 

370 Water delivered to the Contractor shall be a location at which Project Water diverted for 

371 Contractor’s use can be measured separately from water diverted by any such entity or entities. 

372 Upon the request of either party to this Contract, the Contracting Officer shall investigate, or 

373 cause to be investigated, the accuracy of such measurements and shall take any necessary steps to 

374 adjust any errors appearing therein. For any period of time when accurate measurements have 

375 not been made, the Contracting Officer shall consult with the Contractor prior to making a final 

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

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

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

379 Contract beyond the delivery points specified in subdivision (a) of this Article. The Contractor 

380 shall indemnify the United States, its officers, employees, agents, and assigns on account of 

381 damage or claim of damage of any nature whatsoever for which there is legal responsibility, 

382 including property damage, personal injury, or death arising out of or connected with the control, 

383 carriage, handling, use, disposal, or distribution of such Water Delivered beyond such delivery 

384 points, except for any damage or claim arising out of: (i) acts or omissions of the Contracting 

385 Officer or any of its officers, employees, agents, or assigns with the intent of creating the 

386 situation resulting in any damage or claim; (ii) willful misconduct of the Contracting Officer or 

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

388 any of its officers, employees, agents, or assigns; or (iv) damage or claims resulting from a 

389 malfunction of facilities owned and/or operated by the United States. 

390 MEASUREMENT OF WATER WITHIN THE SERVICE AREA

391 6. (a) The Contractor shall ensure that, unless the Contractor establishes 

392 an alternative measurement program satisfactory to the Contracting Officer, all surface water 

393 delivered by the Contractor within the Contractor’s Service Area for M&I purposes is measured 

394 at each M&I service connection. The water measuring devices or water measuring methods of 

395 comparable effectiveness must be acceptable to the Contracting Officer. The Contractor shall be 

396 responsible for installing, operating, and maintaining and repairing all such measuring devices 

397 and implementing all such water measuring methods at no cost to the United States. The 

398 Contractor shall use the information obtained from such water measuring devices or water 

399 measuring methods to ensure its proper management of the water, to bill water users for water 

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

401 customer class as defined in the Contractor’s water conservation plan provided for in Article 26 

402 of this Contract. Nothing herein contained, however, shall preclude the Contractor from 

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

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

405 annual report described in subdivision (c) of Article 26. 

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

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

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

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

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

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

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

413 schedule for implementation at such locations. The Contracting Officer shall advise the 

414 Contractor in writing within 60 days as to the adequacy and necessary modifications, if any, of 

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

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

417 Contracting Officer notifies the Contractor that the measuring devices or methods are inadequate, 

418 the parties shall within 60 days following the Contracting Officer’s response, commence to 

419 negotiate in good faith how, and the earliest practicable date by which, the Contractor shall 

420 modify said measuring devices and/or measuring methods as required by the Contracting Officer 

421 to ensure compliance with subdivision (a) of this Article. 

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422 (c) All new surface water delivery systems for the delivery of Project Water 

423 under this Contract installed within the Contractor’s Service Area after the effective date of this 

424 Contract, shall also comply with the measurement provisions described in subdivision (a) of 

425 this Article. 

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

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

428 by the Contractor within the Contractor’s Service Area during the previous Year. 

429 (e) The Contractor shall inform the Contracting Officer on or before the 20th 

430 calendar day of each month of the quantity of Project Water taken during the previous month. 

431 RATES AND METHOD OF PAYMENT FOR WATER

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

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

434 accordance with: (i) the Secretary’s then-existing ratesetting policy for M&I Water. Such 

435 ratesetting policies shall be amended, modified, or superseded only through a public notice and 

436 comment procedure; (ii) applicable Federal Reclamation law and associated rules and 

437 regulations, or policies; and (iii) other applicable provisions of this Contract. Payments shall be 

438 made by cash transaction, electronic funds transfer, or any other mechanism as may be agreed to 

439 in writing by the Contractor and the Contracting Officer. The Rates, Charges, and Tiered Pricing 

440 Components applicable to the Contractor upon execution of this Contract are set forth in 

441 Exhibit ―B‖, as may be revised annually. 

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

443 and Tiered Pricing Component as follows: 

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

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

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

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

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

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

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

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

452 notification shall revise Exhibit ―B.‖

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

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

455 Component for Project Water, for the following Year and the computations and cost 

456 allocations upon which those Rates are based. The Contractor shall be allowed not less 

457 than two months to review and comment on such computations and cost allocations. By 

458 December 31 of each Calendar Year, the Contracting Officer shall provide the Contractor 

459 with the final Rates and Tiered Pricing Component to be in effect for the upcoming Year, 

460 and such notification shall revise Exhibit ―B‖. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

479 the advance payments for the Water Scheduled and payments for the quantities of Water 

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

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

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

483 day of February. 

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

485 subdivision (c) of this Article to the United States for Project Water delivered, at the Charges and 

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

487 the month of delivery. The payments shall be consistent with the quantities of Project Water 

488 delivered as shown in the water delivery report for the subject month prepared by the Contracting 

489 Officer. The water delivery report shall be deemed a bill for the payment of Charges and the 

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490 applicable Tiered Pricing Component for Project Water delivered. Adjustment for overpayment 

491 or underpayment of Charges shall be made through the adjustment of payments due to the United 

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

493 and the Tiered Pricing Component shall be computed pursuant to Article 20 of this Contract. 

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

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

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

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

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

499 (a) of this Article. 

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

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

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

503 the delivery of Project Water, through Project facilities shall be allocated and applied in 

504 accordance with Federal Reclamation law and the associated rules or regulations, and the 

505 then-current Project ratesetting policy for M&I Water. 

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

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

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

509 Contracting Officer shall, each Year upon request of the Contractor, provide to the Contractor a 

510 detailed accounting of all Project and Contractor expense allocations, the disposition of all 

511 Project and Contractor revenues, and a summary of all water delivery information. The 

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512 Contracting Officer and the Contractor shall enter into good faith negotiations to resolve any 

513 discrepancies or disputes relating to accountings, reports, or information. 

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

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

516 policies, and procedures used for establishing Rates, Charges, and Tiered Pricing Components, 

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

518 mutual best interest of the parties, it is expressly agreed that the parties may enter into 

519 agreements to modify the mechanisms, policies, and procedures for any of those purposes while 

520 this Contract is in effect without amending this Contract. 

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

522 exceed 80 percent of the total Project Water deliveries, then before the end of the month 

523 following the month of delivery the Contractor shall make an additional payment to the 

524 United States equal to the applicable Tiered Pricing Component. The Tiered Pricing 

525 Component for the amount of Project Water delivered in excess of 80 percent of the 

526 Contract Total, but less than or equal to 90 percent of the total Project Water deliveries, 

527 shall equal one-half of the difference between the Rate established under subdivision (a) 

528 of this Article and the M&I Full Cost Water Rate. The Tiered Pricing Component for the 

529 amount of Project Water delivered which exceeds 90 percent of the total Project Water 

530 deliveries shall equal the difference between (i) the Rate established under subdivision (a) 

531 of this Article and (ii) the M&I Full Cost Water Rate. 

532 (2) Omitted. 

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

534 Component pursuant to this Article, total Project Water deliveries shall include Project 

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535 Water that the Contractor transfers to others but shall not include Project Water 

536 transferred to the Contractor, nor shall it include other water furnished pursuant to 

537 Article 3(f) of this Contract. 

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

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

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

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

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

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

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

545 impact of the proposed change. 

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

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

548 adjusted upward or downward in accordance with the then-applicable Project ratesetting policy to 

549 reflect the changed costs, if any, incurred by the Contracting Officer in the delivery of the 

550 transferred Project Water to the transferee’s point of delivery. 

551 (m) Omitted. 

552 (n) Omitted. 

553 NON-INTEREST BEARING OPERATION AND MAINTENANCE DEFICITS

554 8. Omitted. 

555 SALES, TRANSFERS, OR EXCHANGES OF WATER

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

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

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

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

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

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

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

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

564 documentation should include, as appropriate, an analysis of groundwater impacts and economic 

565 and social effects, including environmental justice, of the proposed water transfers on both the 

566 transferor and transferee. 

567 (b) In order to facilitate efficient water management, among Project 

568 Contractors located within the same geographical area, by means of water transfers and to allow 

569 the Contractor to participate in an accelerated water transfer program during the term of this 

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

571 documentation including, but not limited to, documents prepared pursuant to the NEPA and the 

572 ESA analyzing annual transfers within such geographical areas and the Contracting Officer shall 

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

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

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

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

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

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

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

580 historically transferred within the same geographical area. 

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

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

583 years, or to be delivered to established wildlife refuges, groundwater basins or for M&I use or for 

584 fish and wildlife purposes; (ii) occur within a single Year; (iii) occur between a willing seller 

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

586 construction or modifications to Project facilities and be between existing Project Contractors 

587 and/or the Contractor and the United States, Department of the Interior; and (v) comply with all 

588 applicable Federal, State, and local or tribal laws and requirements imposed for protection of the 

589 environment and Indian Trust Assets, as defined under Federal law. Such water transfers must 

590 not lead to land conversion. 

591 (d) Solely for the purpose of determining whether Section 3405(a)(1)(M) of 

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

593 Contracting Officer acknowledges that the Contractor is within a county, watershed or other area 

594 of origin, as those terms are utilized under California law, of water that constitutes the natural 

595 flow of the American River and its tributaries above the confluence of the American and 

596 Sacramento Rivers. 

597 APPLICATION OF PAYMENTS AND ADJUSTMENTS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

614 TEMPORARY REDUCTIONS—RETURN FLOWS

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

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

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

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

619 this Contract. 

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

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

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

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

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

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

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

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

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

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

630 or reduction. 

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

632 derived from Project Water delivered to the Contractor hereunder which escapes or is discharged 

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

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

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

636 claiming by, through, or under the Contractor. 

637 CONSTRAINTS ON THE AVAILABILITY OF WATER

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

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

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

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

642 Contractor of said determination as soon as practicable. 

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

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

645 actions taken by the Contracting Officer to meet current and future legal obligations then, except 

646 as provided in subdivision (a) of Article 18 of this Contract, no liability shall accrue against the 

647 United States or any of its officers, agents, or employees for any damage, direct or indirect, 

648 arising therefrom. 

649 (c) Omitted. 

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

651 accordance with the then-existing Project M&I Water Shortage Policy; Provided, That any 

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652 increases in the Contractor’s demand that have arisen since the delivery of Project Water to the 

653 Contractor the previous year, which are the result of Contractor providing additional water to an 

654 electrical power generating plant (including a cogeneration plant), shall, in addition to any other 

655 applicable adjustments pursuant to the policy, result in a corresponding increase in the 

656 Contractor’s ―historic use‖ quantity. Such policy shall be amended, modified, or superseded only 

657 through a public notice and comment procedure. 

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

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

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

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

662 policy; or (iii) the applicability of such a policy. By agreeing to the foregoing, the Contracting 

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

664 a proceeding. 

665 UNAVOIDABLE GROUNDWATER PERCOLATION

666 13. Omitted. 

667 RULES AND REGULATIONS

668 14. The parties agree that the delivery of Project Water , or use of Federal facilities 

669 pursuant to this Contract, is subject to the applicable provisions of Federal Reclamation law; and 

670 any applicable rules and regulations promulgated by the Secretary of the Interior under Federal 

671 Reclamation law. 

672 PROTECTION OF WATER AND AIR QUALITY

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

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

675 of the water at the highest level possible as determined by the Contracting Officer: Provided, 

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

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

678 quality of water delivered to the Contractor. 

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

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

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

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

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

684 discharges generated through the use of Federal or Contractor facilities or project water provided 

685 by the Contractor within the Contractor’s Project Water Service Area. 

686 (c) Any new, additional or proposed water to be introduced into the facility by 

687 existing or future Project contractors may be allowed to the extent such introduction does not: 

688 (i) interfere with Project purposes as determined by the Contracting Officer; (ii) reduce the 

689 quantity or quality of water to the extent that such a reduction would significantly affect the use 

690 of water, or the cost of putting such water to use, by Project contractors as reasonably determined 

691 by the Contracting Officer, following consultation with the affected contractor; (iii) interfere with 

692 delivery of contractual water entitlements to any other Project Contractors; or (iv) interfere with 

693 structural integrity, operation or physical maintenance of Project facilities. 

694 (d) This article shall not affect or alter any legal obligations of the Secretary to 

695 provide drainage or other discharge services. 

696 QUALITY OF WATER

697 16. Combined with Article 15. 

698 WATER ACQUIRED BY THE CONTRACTOR OTHER THAN

699 FROM THE UNITED STATES

700 17. (a) Omitted. 

701 (b) Except for, water or water rights now owned or hereafter acquired by the 

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

703 Project facilities, subject to the completion of appropriate environmental documentation, with the 

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

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

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

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

708 payment to the United States of an appropriate rate as determined by the applicable 

709 Project ratesetting policy and the Project use power policy, if such Project use power 

710 policy is applicable, each as amended, modified or superseded from time to time. 

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

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

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

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

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

716 maintenance of the Project facilities. 

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

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

719 from the Project facilities. The Contractor hereby releases and agrees to defend and 

720 indemnify the United States and their respective officers, agents, and employees, from 

721 any claim for damage to persons or property, direct or indirect, resulting from the acts of 

722 the Contractor, its officers, employees, agents or assigns of (i) extracting or diverting 

723 non–Project water from any source, or (ii) diverting such non-Project water into 

724 Project facilities. 

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

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

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727 applicable groundwater management plan applicable to the Contractor for the area from 

728 which it was extracted. 

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

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

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

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

733 being made available to non-Project Contractors.

734 OPINIONS AND DETERMINATIONS

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

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

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

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

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

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

741 provided in a timely manner. Nothing in subdivision (a) of Article 18 of this Contract is intended 

742 to or shall affect or alter the standard of judicial review applicable under federal law to any 

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

744 or regulation. 

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

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

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

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

749 with the Contractor to the extent reasonably practicable. 

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750 COORDINATION AND COOPERATION

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

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

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

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

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

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

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

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

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

760 and determinations to be made by the respective party. 

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

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

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

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

765 this process shall be to provide, to the extent practicable, the means of mutual communication 

766 and interaction regarding significant decisions concerning Project operation and management on 

767 a real-time basis. 

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

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

770 this intent: 

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

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

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

774 partnerships to improve water supply, water quality, and reliability. 

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

776 implementation and authorization in coordination with Project Contractors to improve the 

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

778 (3) The Secretary will coordinate with Project Contractors and the 

779 State of California to seek improved water resource management. 

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

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

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

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

784 management activities, and other issues as appropriate. 

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

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

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

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

789 protect health, safety, or the physical integrity of structures or facilities. 

790 CHARGES FOR DELINQUENT PAYMENTS

791 20. (a) The Contractor shall be subject to interest, administrative, and penalty 

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

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

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

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

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

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

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

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

800 services associated with a delinquent payment. 

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

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

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

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

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

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

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

808 EQUAL OPPORTUNITY

809 21. During the performance of this Contract, the Contractor agrees as follows: 

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

811 employment because of race, color, religion, sex, disability, or national origin. The Contractor 

812 will take affirmative action to ensure that applicants are employed, and that employees are treated 

813 during employment, without regard to their race, color, religion, sex, disability, or national 

814 origin. Such action shall include, but not be limited to the following: employment, upgrading, 

815 demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay 

816 or other forms of compensation; and selection for training, including apprenticeship. The 

817 Contractor agrees to post in conspicuous places, available to employees and applicants for 

818 employment, notices to be provided by the Contracting Officer setting forth the provisions of this 

819 nondiscrimination clause. 

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

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

822 consideration for employment without regard to race, color, religion, sex, disability, or national 

823 origin. 

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

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

826 to be provided by the Contracting Officer, advising the labor union or workers’ representative 

827 of the Contractor’s commitments under section 202 of Executive Order 11246 of 

828 September 24, 1965 (EO 11246), and shall post copies of the notice in conspicuous places 

829 available to employees and applicants for employment. 

830 (d) The Contractor will comply with all provisions of EO 11246, and of the 

831 rules, regulations, and relevant orders of the Secretary of Labor. 

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

833 EO 11246, and by the rules, regulations, and orders of the Secretary of Labor, or pursuant 

834 thereto, and will permit access to his books, records, and accounts by the Contracting Agency 

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835 and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, 

836 regulations, and orders. 

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

838 clauses of this Contract or with any of such rules, regulations, or orders, this Contract may be 

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

840 ineligible for further Government contracts in accordance with procedures authorized in 

841 EO 11246, and such other sanctions may be imposed and remedies invoked as provided in 

842 EO 11246 or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided 

843 by law. 

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

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

846 Secretary of Labor issued pursuant to section 204 of EO 11246, so that such provisions will be 

847 binding upon each subcontractor or vendor. The Contractor will take such action with respect to 

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

849 enforcing such provisions, including sanctions for noncompliance: Provided, however, That in 

850 the event the Contractor becomes involved in, or is threatened with, litigation with a 

851 subcontractor or vendor as a result of such direction, the Contractor may request that the United 

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

853 GENERAL OBLIGATION—BENEFITS CONDITIONED UPON PAYMENT

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

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

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

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

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

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

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

861 Contractor is in arrears in the advance payment of water rates due the United States. The 

862 Contractor shall not deliver water under the terms and conditions of this Contract for lands or 

863 parties that are in arrears in the advance payment of water rates as levied or established by the 

864 Contractor. 

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

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

867 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

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

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

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

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

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872 (Pub. L. 101-336; 42 U.S.C. § 12131, et seq.), and any other applicable civil rights laws, and 

873 with the applicable implementing regulations and any guidelines imposed by the U.S. 

874 Department of the Interior and/or Bureau of Reclamation. 

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

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

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

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

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

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

881 and documents. 

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

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

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

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

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

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

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

889 enforcement thereof. 

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

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

892 PRIVACY ACT COMPLIANCE

893 24. Omitted. 

894 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

895 25. In addition to all other payments to be made by the Contractor pursuant to this 

896 Contract, the Contractor shall pay to the United States, within 60 days after receipt of a bill and 

897 detailed statement submitted by the Contracting Officer to the Contractor for such specific items 

898 of direct cost incurred by the United States for work requested by the Contractor associated with 

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

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

901 to in writing in advance by the Contractor. This Article shall not apply to costs for routine 

902 contract administration. 

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903 WATER CONSERVATION

904 26. (a) Prior to the delivery of water provided from or conveyed through Federally 

905 constructed or Federally financed facilities pursuant to this Contract, the Contractor shall be 

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

907 water conservation plan that has been determined by the Contracting Officer to meet the 

908 conservation and efficiency criteria for evaluating water conservation plans established under 

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

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

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

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

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

914 conservation plan completed pursuant to subdivision (d) of Article 26 of this Contract have not 

915 yet been determined by the Contracting Officer to meet such criteria, due to circumstances which 

916 the Contracting Officer determines are beyond the control of the Contractor, water deliveries 

917 shall be made under this Contract so long as the Contractor diligently works with the Contracting 

918 Officer to obtain such determination at the earliest practicable date, and thereafter the Contractor 

919 immediately begins implementing its water conservation and efficiency program in accordance 

920 with the time schedules therein. 

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

922 Article 3 of this Contract equal or exceed 2,000 acre-feet per Year, the Contractor shall 

923 implement the best management practices identified by the time frames issued by the California 

924 Urban Water Conservation Council for such M&I Water unless any such practice is determined 

925 by the Contracting Officer to be inappropriate for the Contractor. 

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

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

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

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

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

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

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

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

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

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

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

937 shall demonstrate sufficient lawful uses exist in the Contractor’s Service Area so that using a 

938 long-term average, the quantity of Delivered Water is demonstrated to be reasonable for such 

939 uses and in compliance with Reclamation law. 

940 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

941 27. Except as specifically provided in Article 17 of this Contract, the provisions of 

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

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

944 Area. Any such water shall not be considered Project Water under this Contract. In addition, 

945 this Contract shall not be construed as limiting or curtailing any rights which the Contractor or 

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

947 contract pursuant to Federal Reclamation law. 

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948 OPERATION AND MAINTENANCE BY THE OPERATING

949 NON-FEDERAL ENTITY

950 28. Omitted. 

951 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

952 29. The expenditure or advance of any money or the performance of any obligation of 

953 the United States under this Contract shall be contingent upon appropriation or allotment of 

954 funds. Absence of appropriation or allotment of funds shall not relieve the Contractor from any 

955 obligations under this Contract. No liability shall accrue to the United States in case funds are 

956 not appropriated or allotted. 

957 BOOKS, RECORDS, AND REPORTS

958 30. (a) The Contractor shall establish and maintain accounts and other books and 

959 records pertaining to administration of the terms and conditions of this Contract, including the 

960 Contractor’s financial transactions; water supply data; project operation, maintenance, and 

961 replacement logs; project land and rights-of-way use agreements; the water users’ land-use (crop 

962 census), land-ownership, land-leasing, and water-use data; and other matters that the Contracting 

963 Officer may require. Reports shall be furnished to the Contracting Officer in such form and on 

964 such date or dates as the Contracting Officer may require. Subject to applicable Federal laws and 

965 regulations, each party to this Contract shall have the right during office hours to examine and 

966 make copies of the other party’s books and records relating to matters covered by this Contract. 

967 (b) Notwithstanding the provisions of subdivision (a) of this Article, no 

968 books, records, or other information shall be requested from the Contractor by the Contracting 

969 Officer unless such books, records, or information are reasonably related to the administration or 

970 performance of this Contract. Any such request shall allow the Contractor a reasonable period of 

971 time within which to provide the requested books, records, or information. 

972 (c) Omitted. 

973 ASSIGNMENT LIMITED—SUCCESSORS AND ASSIGNS OBLIGATED

974 31. (a) The provisions of this Contract shall apply to and bind the successors and 

975 assigns of the parties hereto, but no assignment or transfer of this Contract or any right or interest 

976 therein by either party shall be valid until approved in writing by the other party.

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977 (b) The assignment of any right or interest in this Contract by either party shall 

978 not interfere with the rights or obligations of the other party to this Contract absent the written 

979 concurrence of said other party. 

980 (c) The Contracting Officer shall not unreasonably condition or withhold 

981 approval of any proposed assignment. 

982 SEVERABILITY

983 32. In the event that a person or entity who is neither (i) a party to a Project contract, 

984 nor (ii) a person or entity that receives Project Water from a party to a Project contract, nor 

985 (iii) an association or other form of organization whose primary function is to represent parties to 

986 Project contracts, brings an action in a court of competent jurisdiction challenging the legality or 

987 enforceability of a provision included in this Contract and said person, entity, association, or 

988 organization obtains a final court decision holding that such provision is legally invalid or 

989 unenforceable and the Contractor has not intervened in that lawsuit in support of the plaintiff(s), 

990 the parties to this Contract shall use their best efforts to (i) within thirty days of the date of such 

991 final court decision identify by mutual agreement the provisions in this Contract which must be 

992 revised and (ii) within three months thereafter promptly agree on the appropriate revision(s). The 

993 time periods specified above may be extended by mutual agreement of the parties. Pending the 

994 completion of the actions designated above, to the extent it can do so without violating any 

995 applicable provisions of law, the United States shall continue to make the quantities of Project 

996 Water specified in this Contract available to the Contractor pursuant to the provisions of this 

997 Contract which were not found to be legally invalid or unenforceable in the final court decision. 

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998 RESOLUTION OF DISPUTES

999 33. Should any dispute arise concerning any provisions of this Contract, or the 

1000 parties’ rights and obligations there under, the parties shall meet and confer in an attempt to 

1001 resolve the dispute. Prior to the Contractor commencing any legal action, or the Contracting 

1002 Officer referring any matter to Department of Justice, the party shall provide to the other party 30 

1003 days’ written notice of the intent to take such action; Provided, That such notice shall not be 

1004 required where a delay in commencing an action would prejudice the interests of the party that 

1005 intends to file suit. During the 30-day notice period, the Contractor and the Contracting Officer 

1006 shall meet and confer in an attempt to resolve the dispute. Except as specifically provided, 

1007 nothing herein is intended to waive or abridge any right or remedy that the Contractor or the 

1008 United States may have. 

1009 OFFICIALS NOT TO BENEFIT

1010 34. No Member of or Delegate to Congress, Resident Commissioner, or official of the 

1011 Contractor shall benefit from this Contract other than as a water user or landowner in the same 

1012 manner as other water users or landowners. 

1013 CHANGES IN CONTRACTOR’S ORGANIZATION

1014 35. (a) While this Contract is in effect, no change may be made in the 

1015 Contractor’s organization, by inclusion or exclusion of lands or by any other changes which may 

1016 affect the respective rights, obligations, privileges, and duties of either the United States or the 

1017 Contractor under this Contract including, but not limited to, dissolution, consolidation, or 

1018 merger, except upon the Contracting Officer’s written consent. 

1019 (b) Within 30 days of receipt of a request for such a change, the Contracting 

1020 Officer will notify the Contractor of any additional information required by the Contracting 

1021 Officer for processing said request, and both parties will meet to establish a mutually agreeable 

1022 schedule for timely completion of the process. Such process will analyze whether the proposed 

1023 change is likely to: (i) result in the use of Project Water contrary to the terms of this Contract; 

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1024 (ii) impair the ability of the Contractor to pay for Project Water furnished under this Contract or 

1025 to pay for any Federally-constructed facilities for which the Contractor is responsible; and (iii) 

1026 have an impact on any Project Water rights applications, permits, or licenses. In addition, the 

1027 Contracting Officer shall comply with the NEPA and the ESA. The Contractor will be 

1028 responsible for all costs incurred by the Contracting Officer in this process, and such costs will 

1029 be paid in accordance with Article 25 of this Contract. 

1030 FEDERAL LAWS

1031 36. By entering into this Contract, the Contractor does not waive its rights to contest 

1032 the validity or application in connection with the performance of the terms and conditions of this 

1033 Contract of any Federal law or regulation; Provided, That the Contractor agrees to comply with 

1034 the terms and conditions of this Contract unless and until relief from application of such Federal 

1035 law or regulation to the implementing provision of the Contract is granted by a court of 

1036 competent jurisdiction. 

1037 NOTICES

1038 37. Any notice, demand, or request authorized or required by this Contract shall be 

1039 deemed to have been given, on behalf of the Contractor, when mailed, postage prepaid, or 

1040 delivered to the Area Manager, Bureau of Reclamation, 7794 Folsom Dam Road, Folsom, 

1041 California 95630-1799, and on behalf of the United States, when mailed, postage prepaid, or 

1042 delivered to the Board of Directors of the Sacramento Municipal Utility District, P.O. Box 15830, 

1043 MS B406, Sacramento, CA 95852-1830. The designation of the addressee or the address may 

1044 be changed by notice given in the same manner as provided in this Article for other notices. 

1045 CONFIRMATION OF CONTRACT

1046 38. Promptly after the execution of this Contract, the Contractor shall provide 

1047 evidence to the Contracting Officer that, pursuant to the laws of the State of California, the 

1048 Contractor is a legally constituted entity and the Contract is lawful, valid, and binding on the 

1049 Contractor. This Contract shall not be binding on the United States until such evidence has been 

1050 provided to the Contracting Officer’s satisfaction. 

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1051 SUBCONTRACT FOR RESALE OF WATER

1052 39. Omitted. 

1053 MEDIUM FOR TRANSMITTING PAYMENTS

1054 40. (a) All payments from the Contractor to the United States under this Contract 

1055 shall be by the medium requested by the United States on or before the date payment is due. The 

1056 required method of payment may include checks, wire transfers, or other types of payment 

1057 specified by the United States. 

1058 (b) Upon execution of the Contract, the Contractor shall furnish the 

1059 Contracting Officer with the Contractor’s taxpayer’s identification number (TIN). The purpose 

1060 for requiring the Contractor’s TIN is for collecting and reporting any delinquent amounts arising 

1061 out of the Contractor’s relationship with the United States. 

1062 CONTRACT DRAFTING CONSIDERATIONS

1063 41. This Contract has been, negotiated and reviewed by the parties hereto, each of 

1064 whom is sophisticated in the matters to which this Contract pertains. The double spaced Articles 

1065 of this Contract have been drafted, negotiated, and reviewed by the parties, and no one party shall 

1066 be considered to have drafted the stated articles. 

1067

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1068 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of the 

1069 day and year first above written. 

1070 THE UNITED STATES OF AMERICA 

1071 By: ______________________________________ 

1072 Regional Director, Mid-Pacific Region 

1073 Bureau of Reclamation 

1074 SACRAMENTO MUNICIPAL UTILITY 

1075 DISTRICT 

1076 By: ______________________________ 

1077 President of the Board of Directors 

1078 Attest: 

1079 By: _______________________________ 

1080 Secretary of the Board of Directors 

Draft
EXHIBIT A

[Map of Contractor’s Service Area] 

Draft
EXHIBIT B 

[Rates and Charges]

Draft