CCAO 5-18-12 

CCAO 7-23-12 

RO 10-12-12 

M&I Only 

Contract No. 14-06-200-5198B-IR1 

UNITED STATES 

DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

Central Valley Project, California 

INTERIM RENEWAL CONTRACT BETWEEN THE UNITED STATES

AND

SACRAMENTO COUNTY WATER AGENCY

PROVIDING FOR PROJECT WATER SERVICE

FROM THE AMERICAN RIVER DIVISION

Table of Contents

Article No. Title Page No.

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

Explanatory Recitals ............................................................................................ 1-6 

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

2 Term of Contract .............................................................................................. 10-12 

3 Water to be Made Available and Delivered to the Contractor......................... 12-16 

4 Time for Delivery of Water ............................................................................. 16-17 

5 Point of Diversion and Responsibility for Distribution of Water .................... 17-18 

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 

11 Temporary Reductions—Return Flows ........................................................... 27-28 

12 Constraints on the Availability of Water ......................................................... 28-29 

13 Unavoidable Groundwater Percolation ..................................................................29 

14 Rules and Regulations............................................................................................29 

15 Protection of Water and Air Quality ................................................................ 29-30 

16 Quality of Water ....................................................................................................30 

17 Water Acquired by the Contractor Other Than From the United States .......... 30-32 

18 Opinions and Determinations ................................................................................32 

19 Coordination and Cooperation ......................................................................... 32-34 

20 Charges for Delinquent Payments .........................................................................34 

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Table of Contents – continued

Article No. Title Page No.

21 Equal Opportunity ............................................................................................ 35-36 

22 General Obligation—Benefits Conditioned Upon Payment ..................................36 

23 Compliance With Civil Rights Laws and Regulations .................................... 36-37 

24 Privacy Act Compliance ........................................................................................37 

25 Contractor to Pay Certain Miscellaneous Costs.....................................................37 

26 Water Conservation ......................................................................................... 37-39 

27 Existing or Acquired Water or Water Rights .........................................................39 

28 Operation and Maintenance by the Operating Non-Federal Entity .......................39 

29 Contingent on Appropriation or Allotment of Funds ............................................39 

30 Books, Records, and Reports ........................................................................... 39-40 

31 Assignment Limited—Successors and Assigns Obligated ....................................40 

32 Severability ...................................................................................................... 40-41 

33 Resolution of Disputes ...........................................................................................41 

34 Officials Not to Benefit ..........................................................................................41 

35 Changes in Contractor’s Organization ...................................................................42 

36 Federal Laws ..........................................................................................................42 

37 Notices ...................................................................................................................42 

38 Confirmation of Contract .......................................................................................43 

39 Subcontractor for Resale of Water .........................................................................43 

40 Medium for Transmitting Payments ......................................................................43 

41 Contract Drafting Considerations ..........................................................................43 

Signature Page .......................................................................................................44 

Exhibit A – Map of Contractor’s Service Area 

Exhibit B – Rates and Charges 

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Contract No. 14-06-200-5198B-IR1 

1 UNITED STATES 

2 DEPARTMENT OF THE INTERIOR 

3 BUREAU OF RECLAMATION 

4 Central Valley Project, California 

5 INTERIM RENEWAL CONTRACT BETWEEN THE UNITED STATES

6 AND

7 SACRAMENTO COUNTY WATER AGENCY

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 

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

18 hereinafter referred to as the United States, and the SACRAMENTO COUNTY WATER 

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

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

21 WITNESSETH, That: 

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 

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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 

[4th 34 ] WHEREAS, the Sacramento Municipal Utility District (hereinafter referred to as 

35 the District) and the United States entered into Contract No. 14-06-200-5198A, dated 

36 November 20, 1970, hereinafter referred to as the Existing Contract, which established terms for 

37 the delivery to the District of up to 75,000 acre-feet of water from the American River Division 

38 through December 31, 2012; and 

39 [4.1] WHEREAS, the District assigned to the Contractor on July 12, 2006, the right, 

40 title, and interest in that portion of the Existing Contract consisting of 30,000 acre-feet of the 

41 entitlement of the Project Water including any rights to renew the Existing Contract for the 

42 entitlement. Contractor agreed to enter into a long-term Contract with the United States for 

43 30,000 acre-feet of assigned water; and 

44 [4.2] WHEREAS, the Contractor and the United States also entered into Contract 

45 No. 6-07-20-W1372, which established terms for the delivery to the Contractor of Project Water 

46 from the American River Division from April 8, 1999, through a date determined pursuant to 

47 Article 2 therein; and 

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48 [4.3] WHEREAS, except as specifically provided for in this Contract, the Contractor’s 

49 right, title, and interest in Contract No. 6-07-20-W1372 is provided for under the Contractor’s 

50 other Contract No. 6-07-20-W1372-LTR1; and 

[5th 51 ] WHEREAS, Section 3404(c) of the CVPIA provides for long-term renewal of 

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

53 completion of appropriate environmental documentation, including a programmatic 

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

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

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

[6th 57 ] Omitted; and 

[7th 58 ] WHEREAS, the Contractor has requested to enter into this Contract, pursuant to 

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

60 California, for water service from the Project; and 

[8th 61 ] WHEREAS, the United States has determined that the Contractor has fulfilled all 

62 of its obligations under the Existing Contract; and 

[9th 63 ] WHEREAS, the Contractor has demonstrated to the satisfaction of the 

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

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

66 that the Contractor has the capability and expects to utilize fully for reasonable and beneficial use 

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

[10

th 68 ] WHEREAS, water obtained from the Project has been relied upon by urban areas 

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

70 portion of its water supply; and 

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[11

th 71 ] WHEREAS, the economies of regions within the Project, including the 

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

73 Central Valley Project; and 

[12

th 74 ] WHEREAS, the Secretary intends through coordination, cooperation, and 

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

76 Project for all Project purposes; and 

77 [12.1] WHEREAS, the Contractor and the water users in its Service Area have improved 

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

79 and other best management practices; however, implementing these measures has reduced and 

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

81 withstand a Condition of Shortage; and 

[13

th 82 ] WHEREAS, the mutual goals of the United States and the Contractor 

83 include: to provide for reliable Project Water supplies; to control costs of those supplies; to 

84 achieve repayment of the Project as required by law; to guard reasonably against Project Water 

85 shortages; to achieve a reasonable balance among competing demands for use of Project Water; 

86 and to comply with all applicable environmental statutes, all consistent with the legal obligations 

87 of the United States relative to the Project; and 

[14

th 88 ] WHEREAS, the parties intend by this Contract to develop a more cooperative 

89 relationship in order to achieve their mutual goals; and 

90 [14.1] WHEREAS, the Contractor is a signatory to the Water Forum Agreement, dated 

91 April 24, 2000, which has the co-equal objectives to (1) provide a reliable and safe water supply 

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

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93 and (2) preserve the fishery, wildlife, recreational and aesthetic values of the lower American 

94 River; and 

95 [14.2] WHEREAS, the Contracting Officer is in support of the co-equal objectives of the 

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

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

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

99 [14.3] Omitted; and 

100 [14.4] WHEREAS, the Contractor’s Service Area provided in this Contract includes 

101 areas that on the date of execution of this Contract receive water from a variety of sources, 

102 including, but not limited to, ground water from private wells, surface supplies under privately 

103 held rights, public utilities, public agencies other than the Contractor, water service from the 

104 Contractor provided exclusively through wells operated by the Contractor, and water service 

105 from the Contractor provided through a combination of wells and interim surface supplies; and 

106 [14.5] WHEREAS, the Contractor’s Service Area provided in this Contract also includes 

107 areas to which Project Water or other surface water may be provided by the Contractor in the 

108 future; and 

109 [14.6] WHEREAS, recognizing the physical, legal and jurisdictional circumstances that 

110 exist within the Contractor’s Service Area, the parties have agreed to structure this Contract so 

111 that areas within the Contractor’s Service Area will become subject to certain terms and 

112 conditions of this Contract at such time as such areas receive water service from the Contractor 

113 consisting of Project Water or other surface water; and 

114 [14.7] WHEREAS, in order to continue water service provided under Project Water 

115 service contracts that expire prior to the completion of all appropriate environmental 

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116 documentation, the United States intends to execute interim renewal contracts pursuant to 

117 Section 3404(c)(1) of the CVPIA, for a period not to exceed three (3) years in length, and for 

118 successive interim periods of not more than two (2) years in length, until such appropriate 

119 environmental documentation, is finally completed, at which time the Secretary shall, pursuant to 

120 Federal Reclamation law, upon request of the Contractor, enter into a long-term renewal contract 

121 for a period of forty (40) years; and may thereafter renew such long-term renewal contracts for 

122 successive periods not to exceed forty (40) years each; and 

[15

th 123 ] WHEREAS, the United States and the Contractor are willing to enter into and 

124 execute this interim renewal contract (hereinafter ―Contract‖) consistent with the provisions of 

125 section 3404(c) of the CVPIA and pursuant to Federal Reclamation law on the terms and 

126 conditions set forth below; 

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

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

129 DEFINITIONS

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

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

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

133 both dates inclusive; 

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

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

136 Officer pursuant to this Contract; 

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

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

139 this Contract Total; 

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

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

142 or regulation; 

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

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

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

146 permitted to provide Project Water obtained under this Contract. As of the date of this Contract, 

147 the Contractor’s Service Area is the area identified as ―Zone 40‖ and ―Zone 40 Expansion Area‖, 

148 as described in Exhibit ―A‖ attached hereto. The Contractor’s Service Area may be modified 

149 from time to time in accordance with Article 35 of this Contract without amendment of this 

150 Contract. 

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

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

153 (h-i) Omitted; 

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

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

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

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

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

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

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

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

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

163 and Regulations for the RRA; 

164 (k-l) Omitted; 

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

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

167 incidental thereto, and watering of livestock; 

168 (n) Omitted; 

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

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

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

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

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

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

175 this Article; 

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

177 the delivery of M&I Water; 

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

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

180 maintenance of Project facilities; 

181 (r) Omitted; 

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

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

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

185 repayment contracts for Project Water from the Project with the United States pursuant to 

186 Federal Reclamation law; 

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

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

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

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

191 Contracting Officer in accordance with the then-current applicable water ratesetting policies for 

192 the Project, as described in subdivision (a) of Article 7 of this Contract; 

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

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

195 preceding contract(s); 

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

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

198 through any agency of the Department of the Interior; 

199 (y) Omitted; 

200 (z) ―Water Delivered‖ or ―Delivered Water‖ shall mean Project Water diverted 

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

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

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

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

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

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

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

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

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

210 TERM OF CONTRACT 

211 2. (a) This Contract shall be effective from January 1, 2013, and shall remain in 

212 effect through February 28, 2015, and thereafter will be renewed as described in this Article. 

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

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

215 conditions of the interim renewal contract in effect for the period immediately preceding the 

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

217 Contractor, for successive interim periods each of which shall be no more than two (2) years in 

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

219 and cost effective contract administration, the terms and conditions in subsequent interim 

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

221 immediately preceding the subsequent interim renewal contract: Provided, however, That each 

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

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

224 faith appropriate modification(s) to be included in any successive interim renewal contracts. 

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

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

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

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228 supplemental environmental documentation, the Secretary shall, pursuant to Federal Reclamation 

229 law, upon request of the Contractor, enter into a long-term renewal contract for a period of 

230 forty (40) years and may thereafter renew such long-term renewal contracts for successive 

231 periods not to exceed forty (40) years each. 

232 (b) The parties have engaged and if necessary will continue to engage in good 

233 faith negotiations intended to permit the execution of a forty (40) year long-term renewal 

234 contract contemplated by Section 3404(c) of the CVPIA, hereinafter referred to as a ―long-term 

235 renewal contract.‖ The parties recognize the possibility that this schedule may not be met 

236 without further negotiations. Accordingly: In the event (i) the Contractor and Contracting 

237 Officer have reached agreement on the terms of the Contractor’s long-term renewal contract or 

238 (ii) the Contractor and Contracting Officer have not completed the negotiations on the 

239 Contractor’s long-term renewal contract, believe that further negotiations on that contract would 

240 be beneficial, and mutually commit to continue to negotiate to seek to reach agreement, but 

241 (iii) all environmental documentation required to allow execution of the Contractor’s long-term 

242 renewal contract by both parties has not been completed in time to allow execution of the 

243 Contractor’s long-term renewal contract by February 28, 2015, then (iv) the parties will 

244 expeditiously complete the environmental documentation required of each of them in order to 

245 execute the Contractor’s long-term renewal contract at the earliest practicable date. In addition, 

246 the Contractor’s then-current interim renewal contract will be renewed without change upon the 

247 request of either party through the agreed-upon effective date of the Contractor’s long-term 

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

249 renewal contract, through the succeeding February 28. 

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250 (c) The omission of language in this Contract providing for conversion of this 

251 interim renewal contract or any subsequent renewals thereof to a repayment contract pursuant to 

252 subsection (c)(1) of Section 9 of the Reclamation Project Act of 1939 (53 Stat. 1187), shall not 

253 prejudice the Contractor’s right to assert a right to have such language included in subsequent 

254 renewals of this Contract or to exercise such conversion, all as provided by law, or to negotiate 

255 the language regarding such conversion to be included in subsequent renewal contracts. 

256 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE CONTRACTOR

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

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

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

260 30,000 acre-feet of M&I Water. Provided, however, during the two (2) month period of January 

261 and February of 2013, the Contracting Officer shall make available for delivery to the Contractor 

262 that portion of the 2012 allocation of Project Water unused by the Contractor under the Existing 

263 Contract. The quantity of Water Delivered to the Contractor in accordance with this subdivision 

264 shall be scheduled and paid for pursuant to the provisions of Articles 4 and 7 of this Contract. 

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

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

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

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

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

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

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

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272 Water Made Available to the Contractor was 28,500 acre-feet. Nothing in subdivision (b) of this 

273 Article shall affect the rights and obligations of the parties under any provision of this Contract. 

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

275 applicable legal requirements. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

296 which evidences in excess of 40 years of diversion for M&I purposes of the quantities of water 

297 provided in subdivision 3(a) of Article 3 of this Contract, will be considered in developing an 

298 appropriate baseline for biological assessments(s) prepared pursuant to ESA and any other 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

321 guidelines, and policies. 

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

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

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

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

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

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

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

329 contracts. 

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

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

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

333 such approval. 

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

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

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

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

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

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

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

341 Contract to use Project Water. 

342 TIME FOR DELIVERY OF WATER

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

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

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

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

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

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

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

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

351 Available, the Contracting Officer shall provide the Contractor with the updated Recent Historic 

352 Average. 

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

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

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

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

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

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

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

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

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

362 during any Year. 

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

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

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

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

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

368 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

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

370 Contract shall be delivered to the Contractor at the Contractor’s option: (i) at the intake for the 

371 Sacramento River Water Treatment Plant owned by the City of Sacramento; (ii) at the intake for 

372 the Freeport Regional Water Project on the Sacramento River; and (iii) any additional point or 

373 points of delivery either on Project facilities or another location or locations mutually agreed to 

374 in writing by the Contracting Officer and the Contractor. 

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

376 sufficient flows and levels of water in Project facilities to deliver Project Water to the Contractor 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

406 MEASUREMENT OF WATER WITHIN THE SERVICE AREA

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

434 inadequate, the parties shall within 60 days following the Contracting Officer’s response, 

435 commence to negotiate in good faith how, and the earliest practicable date by which, the 

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

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

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

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

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

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

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

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

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

445 calendar day of each month of the quantity of M&I Water taken during the preceding month. 

446 RATES AND METHOD OF PAYMENT FOR WATER

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

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

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

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

451 Federal Reclamation law and associated rules and regulations, or policies; and (iii) other 

452 applicable provisions of this Contract. Payments shall be made by cash transaction, electronic 

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

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

455 Contract are set forth in Exhibit ‖B‖, as may be revised annually. 

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

457 Charges as follows: 

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

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

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

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

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

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

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

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

466 notification shall revise Exhibit ―B‖. 

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

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

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

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

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

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

473 the upcoming Year, and such notification shall revise Exhibit ―B‖. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

496 day of February. 

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

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

499 effect, before the end of the month following the month of delivery. The payments shall be 

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500 consistent with the quantities of M&I Water Delivered as shown in the water delivery report for 

501 the subject month prepared by the Contracting Officer. The water delivery report shall be 

502 deemed a bill for the payment of Charges for Water Delivered. Adjustment for overpayment or 

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

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

505 shall be computed pursuant to Article 20 of this Contract. 

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

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

508 applicable statutes, associated regulations, any applicable provisions of guidelines or 

509 ratesetting policies; Provided, That the Rate for Water Delivered under subdivision (f) of 

510 Article 3 of this Contract shall be no more than the otherwise applicable Rate for M&I Water 

511 under subdivision (a) of this Article. 

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

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

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

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

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

517 regulations, and the then-current Project ratesetting policy for M&I Water. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

532 without amending this Contract. 

533 (j) (1-3) Omitted. 

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

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

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

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

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

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

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

541 impact of the proposed change. 

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

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

544 adjusted upward or downward to reflect the changed costs, if any, incurred by the Contracting 

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545 Officer in the delivery of the transferred Project Water to the transferee’s point of delivery in 

546 accordance with the then-applicable Project ratesetting policy. 

547 (m) Omitted. 

548 (n) Omitted. 

549 NON-INTEREST BEARING OPERATION AND MAINTENANCE DEFICITS

550 8. Omitted. 

551 SALES, TRANSFERS, OR EXCHANGES OF WATER

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

553 sold, transferred, or exchanged to others for reasonable and beneficial uses within the State if 

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

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

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

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

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

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

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

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

562 transferor and transferee. 

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

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

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

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

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

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568 analyzing annual transfers within such geographical areas, and the Contracting Officer shall 

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

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

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

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

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

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

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

576 historically transferred within the same geographical area. 

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

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

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

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

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

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

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

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

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

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

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

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

589 area of origin, as those terms are utilized under California law, of water that constitutes the 

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590 natural flow of the American River and its tributaries above the confluence of the American and 

591 Sacramento Rivers. 

592 APPLICATION OF PAYMENTS AND ADJUSTMENTS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

609 TEMPORARY REDUCTIONS—RETURN FLOWS

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

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

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

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

614 this Contract. 

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

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

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

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

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

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

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

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

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

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

625 or reduction. 

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

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

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

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

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

631 claiming by, through, or under the Contractor. 

632 CONSTRAINTS ON THE AVAILABILITY OF WATER

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

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

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

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

637 Contractor of said determination as soon as practicable. 

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

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

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

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

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

643 arising therefrom. 

644 (c) Omitted. 

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

646 accordance with the then-existing Project M&I Water Shortage Policy. Such policy shall be 

647 amended, modified, or superseded only through a public notice and comment procedure. 

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

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

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

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

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

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

654 proceeding. 

655 UNAVOIDABLE GROUNDWATER PERCOLATION

656 13. Omitted. 

657 RULES AND REGULATIONS

658 14. The parties agree that the delivery of M&I Water or use of Federal facilities 

659 pursuant to this Contract is subject to the applicable provisions of Federal Reclamation law and 

660 any applicable rules and regulations promulgated by the Secretary of the Interior under such law. 

661 PROTECTION OF WATER AND AIR QUALITY

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

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

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

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

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

667 quality of water delivered to the Contractor. 

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

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

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

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

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

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

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

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

676 provide drainage or other discharge services. 

677 QUALITY OF WATER

678 16. Combined with Article 15. 

679 WATER ACQUIRED BY THE CONTRACTOR OTHER THAN

680 FROM THE UNITED STATES

681 17. (a) Omitted. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

697 maintenance of the Project facilities; Provided, That nothing in this Article is intended to 

698 preclude the United States from passing the Contractor’s water rights water through 

699 Project storage facilities to the extent required to satisfy the Contractor’s water rights that 

700 are senior to those of the Project under the applicable provisions of California water law. 

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

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

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

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

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

706 the Contractor, its officers, employees, agents, or assigns in (i) extracting or diverting 

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

708 facilities. 

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

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

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

712 which it was extracted. 

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

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

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

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

717 being made available to non-Project Contractors. 

718 OPINIONS AND DETERMINATIONS

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

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

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

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

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

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

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

726 intended to or shall affect or alter the standard of judicial review applicable under Federal law to 

727 any opinion or determination implementing a specific provision of Federal law embodied in 

728 statute or regulation. 

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

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

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

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

733 with the Contractor to the extent reasonably practicable. 

734 COORDINATION AND COOPERATION

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

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

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

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

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

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

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

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

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

744 and determinations to be made by the respective party. 

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

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

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

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

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

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

751 a real-time basis. 

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

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

754 this intent: 

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

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

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

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

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

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

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

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

763 State of California to seek improved water resource management. 

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

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

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

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

768 management activities, and other issues as appropriate. 

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

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

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

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

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

774 CHARGES FOR DELINQUENT PAYMENTS

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

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

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

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

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

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

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

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

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

784 collection services associated with a delinquent payment. 

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

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

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

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

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

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

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

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792 EQUAL OPPORTUNITY

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

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

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

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

797 treated during employment, without regard to their race, color, religion, sex, disability, or 

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

799 upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; 

800 rates of pay or other forms of compensation; and selection for training, including apprenticeship. 

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

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

803 nondiscrimination clause. 

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

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

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

807 origin. 

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

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

810 notice, to be provided by the Contracting Officer, advising the labor union or workers’

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

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

813 available to employees and applicants for employment. 

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

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

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

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

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

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

820 regulations, and orders. 

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

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

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

824 ineligible for further Government contracts in accordance with procedures authorized in EO 11246, 

825 and such other sanctions may be imposed and remedies invoked as provided in EO 11246 or by 

826 rule, regulation, or order of the Secretary of Labor, or as otherwise provided by law. 

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

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

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

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

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

832 enforcing such provisions, including sanctions for noncompliance: Provided, however, that in 

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

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

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

836 GENERAL OBLIGATION—BENEFITS CONDITIONED UPON PAYMENT

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

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

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

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

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

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

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

844 Contractor is in arrears in the advance payment of water rates due the United States. The 

845 Contractor shall not deliver water under the terms and conditions of this Contract for lands or 

846 parties that are in arrears in the advance payment of water rates as levied or established by the 

847 Contractor. 

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

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

850 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

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

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

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

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

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

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

857 Interior and/or Bureau of Reclamation. 

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

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

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

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

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

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

864 documents. 

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

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

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

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

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

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

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

872 enforcement thereof. 

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

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

PRIVACY ACT COMPLIANCE

875 24. Omitted. 

876 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

877 25. In addition to all other payments to be made by the Contractor pursuant to this 

878 Contract, the Contractor shall pay to the United States, within 60 days after receipt of a bill and 

879 detailed statement submitted by the Contracting Officer to the Contractor for such specific items 

880 of direct cost incurred by the United States for work requested by the Contractor associated with 

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

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

883 to in writing in advance by the Contractor. This Article shall not apply to costs for routine 

884 contract administration. 

885 WATER CONSERVATION

886 26. (a) Prior to the delivery of water provided from or conveyed through 

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

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

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

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

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

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

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

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

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

896 water conservation plan completed pursuant to subdivision (d) of Article 26 of this Contract have 

897 not yet been determined by the Contracting Officer to meet such criteria, due to circumstances 

898 which the Contracting Officer determines are beyond the control of the Contractor, water 

899 deliveries shall be made under this Contract so long as the Contractor diligently works with the 

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

901 the Contractor immediately begins implementing its water conservation and efficiency program 

902 in accordance with the time schedules therein. 

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

904 Article 3 of this Contract equal or exceed 2,000 acre-feet per Year, the Contractor shall 

905 implement the best management practices identified by the time frames issued by the California 

906 Urban Water Conservation Council for such M&I Water unless any such practice is determined 

907 by the Contracting Officer to be inappropriate for the Contractor. 

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

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

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

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

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

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

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

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

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

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

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

919 shall demonstrate sufficient lawful uses exist in the Contractor’s Service Area to show 

920 reasonable and beneficial use of the quantity of Delivered Water based on a long-term average in 

921 compliance with Federal Reclamation law. 

922 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

923 27. Except as specifically provided in Article 17 of this Contract, the provisions of 

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

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

926 Area. Any such water shall not be considered Project Water under this Contract. In addition, 

927 this Contract shall not be construed as limiting or curtailing any rights which the Contractor or 

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

929 contract pursuant to Federal Reclamation law. 

930 OPERATION AND MAINTENANCE BY THE OPERATING NON-FEDERAL ENTITY

931 28. Omitted. 

932 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

933 29. The expenditure or advance of any money or the performance of any obligation of 

934 the United States under this Contract shall be contingent upon appropriation or allotment of 

935 funds. Absence of appropriation or allotment of funds shall not relieve the Contractor from any 

936 obligations under this Contract. No liability shall accrue to the United States in case funds are 

937 not appropriated or allotted. 

938 BOOKS, RECORDS, AND REPORTS

939 30. (a) The Contractor shall establish and maintain accounts and other books and 

940 records pertaining to administration of the terms and conditions of this Contract, including the 

941 Contractor’s financial transactions; water supply data; project operation, maintenance, and 

942 replacement logs; project land and rights-of-way use agreements; the water users’ land-use (crop 

943 census), land-ownership, land-leasing, and water-use data; and other matters that the Contracting 

944 Officer may require. Reports shall be furnished to the Contracting Officer in such form and on 

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945 such date or dates as the Contracting Officer may require. Subject to applicable Federal laws 

946 and regulations, each party to this Contract shall have the right during office hours to examine 

947 and make copies of the other party’s books and records relating to matters covered by this 

948 Contract. 

949 (b) Notwithstanding the provisions of subdivision (a) of this Article, no 

950 books, records, or other information shall be requested from the Contractor by the Contracting 

951 Officer unless such books, records, or information are reasonably related to the administration or 

952 performance of this Contract. Any such request shall allow the Contractor a reasonable period of 

953 time within which to provide the requested books, records, or information. 

954 (c) Omitted. 

955 ASSIGNMENT LIMITED—SUCCESSORS AND ASSIGNS OBLIGATED

956 31. (a) The provisions of this Contract shall apply to and bind the successors and 

957 assigns of the parties hereto, but no assignment or transfer of this Contract or any right or interest 

958 therein by either party shall be valid until approved in writing by the other party. 

959 (b) The assignment of any right or interest in this Contract by either party 

960 shall not interfere with the rights or obligations of the other party to this Contract absent the 

961 written concurrence of said other party. 

962 (c) The Contracting Officer shall not unreasonably condition or withhold 

963 approval of any proposed assignment. 

964 SEVERABILITY

965 32. In the event that a person or entity who is neither (i) a party to a Project contract, 

966 nor (ii) a person or entity that receives Project Water from a party to a Project contract, nor 

967 (iii) an association or other form of organization whose primary function is to represent parties to 

968 Project contracts, brings an action in a court of competent jurisdiction challenging the legality or 

969 enforceability of a provision included in this Contract and said person, entity, association, or 

970 organization obtains a final court decision holding that such provision is legally invalid or 

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971 unenforceable and the Contractor has not intervened in that lawsuit in support of the plaintiff(s), 

972 the parties to this Contract shall use their best efforts to (i) within 30 days of the date of such 

973 final court decision identify by mutual agreement the provisions in this Contract which must be 

974 revised and (ii) within three months thereafter promptly agree on the appropriate revision(s). 

975 The time periods specified above may be extended by mutual agreement of the parties. Pending 

976 the completion of the actions designated above, to the extent it can do so without violating any 

977 applicable provisions of law, the United States shall continue to make the quantities of Project 

978 Water specified in this Contract available to the Contractor pursuant to the provisions of this 

979 Contract which were not found to be legally invalid or unenforceable in the final court decision. 

980 RESOLUTION OF DISPUTES

981 33. Should any dispute arise concerning any provisions of this Contract, or the 

982 parties’ rights and obligations thereunder, the parties shall meet and confer in an attempt to 

983 resolve the dispute. Prior to the Contractor commencing any legal action, or the Contracting 

984 Officer referring any matter to Department of Justice, the party shall provide to the other party 

985 30 days’ written notice of the intent to take such action; Provided, That such notice shall not be 

986 required where a delay in commencing an action would prejudice the interests of the party that 

987 intends to file suit. During the 30-day notice period, the Contractor and the Contracting Officer 

988 shall meet and confer in an attempt to resolve the dispute. Except as specifically provided, 

989 nothing herein is intended to waive or abridge any right or remedy that the Contractor or the 

990 United States may have. 

991 OFFICIALS NOT TO BENEFIT

992 34. No Member of or Delegate to the Congress, Resident Commissioner, or official of 

993 the Contractor shall benefit from this Contract other than as a water user or landowner in the 

994 same manner as other water users or landowners. 

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995 CHANGES IN CONTRACTOR’S ORGANIZATION

996 35. (a) While this Contract is in effect, no change may be made in the Contractor’s 

997 organization, by inclusion or exclusion of lands or by any other changes which may affect the 

998 respective rights, obligations, privileges, and duties of either the United States or the Contractor 

999 under this Contract including, but not limited to, dissolution, consolidation, or merger, except 

1000 upon the Contracting Officer’s written consent. 

1001 (b) Within 30 days of receipt of a request for such a change, the Contracting 

1002 Officer will notify the Contractor of any additional information required by the Contracting 

1003 Officer for processing said request, and both parties will meet to establish a mutually agreeable 

1004 schedule for timely completion of the process. Such process will analyze whether the proposed 

1005 change is likely to: (i) result in the use of Project Water contrary to the terms of this Contract; 

1006 (ii) impair the ability of the Contractor to pay for Project Water furnished under this Contract or 

1007 to pay for any Federally-constructed facilities for which the Contractor is responsible; and (iii) 

1008 have an impact on any Project Water rights applications, permits, or licenses. In addition, the 

1009 Contracting Officer shall comply with the NEPA and ESA. The Contractor will be responsible 

1010 for all costs incurred by the Contracting Officer in this process, and such costs will be paid in 

1011 accordance with Article 25 of this Contract. 

1012 FEDERAL LAWS

1013 36. By entering into this Contract, the Contractor does not waive its rights to contest 

1014 the validity or application in connection with the performance of the terms and conditions of this 

1015 Contract of any Federal law or regulation; Provided, That the Contractor agrees to comply with 

1016 the terms and conditions of this Contract unless and until relief from application of such Federal 

1017 law or regulation to the implementing provision of the Contract is granted by a court of 

1018 competent jurisdiction. 

1019 NOTICES

1020 37. Any notice, demand, or request authorized or required by this Contract shall be 

1021 deemed to have been given, on behalf of the Contractor, when mailed, postage prepaid, or 

1022 delivered to the Area Manager, Bureau of Reclamation, 7794 Folsom Dam Road, Folsom, 

1023 California 95630-1799, and on behalf of the United States, when mailed, postage prepaid, or 

1024 delivered to the Chief, Water Resources Division, County of Sacramento, 827 Seventh Street, 

1025 Room 301, Sacramento, California 95814 . The designation of the addressee or the address may 

1026 be changed by notice given in the same manner as provided in this Article for other notices. 

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1027 CONFIRMATION OF CONTRACT

1028 38. Promptly after the execution of this Contract, the Contractor shall provide 

1029 evidence to the Contracting Officer that, pursuant to the laws of the State of California, the 

1030 Contractor is a legally constituted entity and the Contract is lawful, valid, and binding on the 

1031 Contractor. This Contract shall not be binding on the United States until such evidence has been 

1032 provided to the Contracting Officer’s satisfaction. 

1033 SUBCONTRACT FOR RESALE OF WATER

1034 39. Omitted. 

1035 MEDIUM FOR TRANSMITTING PAYMENTS

1036 40. (a) All payments from the Contractor to the United States under this Contract 

1037 shall be by the medium requested by the United States on or before the date payment is due. The 

1038 required method of payment may include checks, wire transfers, or other types of payment 

1039 specified by the United States. 

1040 (b) Upon execution of the Contract, the Contractor shall furnish the 

1041 Contracting Officer with the Contractor’s taxpayer’s identification number (TIN). The purpose 

1042 for requiring the Contractor’s TIN is for collecting and reporting any delinquent amounts arising 

1043 out of the Contractor’s relationship with the United States. 

1044 CONTRACT DRAFTING CONSIDERATIONS

1045 41. This Contract has been, negotiated and reviewed by the parties hereto, each of 

1046 whom is sophisticated in the matters to which this Contract pertains. The double spaced Articles 

1047 of this Contract have been drafted, negotiated, and reviewed by the parties, and no one party 

1048 shall be considered to have drafted the stated articles. 

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1049 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of 

1050 the day and year first above written. 

1051 THE UNITED STATES OF AMERICA 

1052 By: ______________________________________ 

1053 Regional Director, Mid-Pacific Region 

1054 Bureau of Reclamation 

1055 (SEAL) 

1056 SACRAMENTO COUNTY WATER AGENCY 

1057 By: ______________________________________ 

1058 Chairman of the Board of Directors 

1059 Attest: 

1060 By: ______________________________ 

1061 Secretary of the Board of Directors 

Draft
EXHIBIT A

[Map of Contractor’s Service Area] 

Draft
EXHIBIT ―B‖

Rates and Charges 

(Placeholder) 

Draft