M&I Only 

R. O. CVP-Wide Draft 4/19-2004 

Shasta County Water Agency 3/01-2004 

Shasta County Water Agency 7/22-2003 

Shasta County Water Agency 7/18-2003 

Shasta County Water Agency 6/16-2003 

Shasta/Trinity Division Draft 6/16-2003 

CVP-Wide Draft 5/23-2003 

Contract No. 

14-06-200-3367A-LTR1 

UNITED STATES 

DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

Central Valley Project, California 

LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES 

AND

SHASTA COUNTY WATER AGENCY

PROVIDING FOR PROJECT WATER SERVICE

FROM THE SACRAMENTO RIVER, SHASTA, AND TRINITY RIVER DIVISIONS

Table of Contents

Article No. Title Page No.

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

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

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

 2 Term of Contract.............................................................................................. 10-11 

 3 Water to be Made Available and Delivered to the Agency ............................. 11-16 

 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 Contractor’s 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 ..................................................................28 

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

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

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

 15 Water and Air Pollution Control............................................................................30 

 16 Quality of Water .............................................................................................. 30-31 

 17 Water Acquired by the Contractor Other Than From the United States.......... 31-32 

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

 19 Coordination and Cooperation......................................................................... 33-34
Contract No. 14-06-200-3367A-LTR1 

Table of Contents - continued

Article No. Title Page No.

 20 Charges for Delinquent Payments ................................................................... 34-35 

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

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

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

 24 Privacy Act Compliance .................................................................................. 37-38 

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

 26 Water Conservation ......................................................................................... 38-39 

 27 Existing or Acquired Water or Water Rights................................................... 39-40 

 28 Operation and Maintenance by Operating Non-Federal Entity .............................40 

 29 Contingent on Appropriation or Allotment of Funds ............................................40 

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

 31 Assignment Limited--Successors and Assigns Obligated ............................... 40-41 

 32 Severability ............................................................................................................41 

 33 Resolution of Disputes..................................................................................... 41-42 

 34 Officials Not to Benefit..........................................................................................42 

 35 Changes in Contractor’s Service Area...................................................................42 

 36 Federal Laws.................................................................................................... 42-43 

 37 Notices ...................................................................................................................43 

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

 39 Resale of Water......................................................................................................43 

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

 Exhibit A – Map of Contractor’s Service Area 

 Exhibit B – Rates and Charges
M&I Only 

R. O. CVP-Wide Draft 4/19-2004 

Shasta County Water Agency 3/01-2004 

Shasta County Water Agency 7/22-2003 

Shasta County Water Agency 7/18-2003 

Shasta County Water Agency 6/16-2003 

Shasta/Trinity Division Draft 6/16-2003 

CVP-Wide Draft 5/23-2003 

Contract No. 

14-06-200-3367A-LTR1 

1 

2 UNITED STATES 

3 DEPARTMENT OF THE INTERIOR 

4 BUREAU OF RECLAMATION 

5 Central Valley Project, California 

6 LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES 

7 AND

8 SHASTA COUNTY WATER AGENCY

9 PROVIDING FOR PROJECT WATER SERVICE

10 FROM THE SACRAMENTO RIVER, SHASTA, AND TRINITY RIVER DIVISIONS

11 THIS CONTRACT, made this _____ day of ____________________, 20___, in 

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

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

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

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

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

17 (106 Stat. 4706), all collectively hereinafter referred to as Federal Reclamation law, between 

18 THE UNITED STATES OF AMERICA, hereinafter referred to as the United States, and 

19 SHASTA COUNTY WATER AGENCY, hereinafter referred to as the Agency or Contractor, a 

20 political subdivision of the State of California, duly organized, existing, and acting pursuant to 

21 the laws thereof; 

22 WITNESSETH, That:
Contract No. 14-06-200-3367A-LTR1 

2

23 EXPLANATORY RECITALS

 [1st 24 ] WHEREAS, the United States has constructed and is operating the Central 

25 Valley Project (Project), California, for diversion, storage, carriage, distribution and beneficial 

26 use, for flood control, irrigation, municipal, domestic, industrial, fish and wildlife mitigation, 

27 protection and restoration, generation and distribution of electric energy, salinity control, 

28 navigation and other beneficial uses, of waters of the Sacramento River, the American River, the 

29 Trinity River, and the San Joaquin River and their tributaries; and 

 [2nd 30 ] WHEREAS, the United States constructed Shasta Dam and Reservoir, Keswick 

31 Dam and Reservoir, and Whiskeytown Dam and Reservoir, hereinafter collectively referred to as 

32 the Project facilities, which will be used in part for the furnishing of water to the Agency 

33 pursuant to the terms of this Contract; and 

 [3rd 34 ] WHEREAS, the rights to Project Water were acquired by the United States 

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

 [4th 36 ] WHEREAS, the Agency and the United States entered into Contract 

37 No. 14-06-200-3367A, as amended, which established terms for the delivery to the Agency of up 

38 to 5,000 acre-feet per year of Project Water from the Project facilities from June 30, 1967, 

39 through December 31, 2004, hereinafter referred to as the “Existing Contract”; and 

40 [4.1] WHEREAS, the County of Shasta and the United States entered into Contract 

41 No. 14-06-200-1307A, hereinafter referred to as the Keswick Contract, which established terms 

42 for the delivery to the Agency of up to 500 acre-feet per year of Project Water from the Trinity 

43 River Division from September 16, 1964, through June 31, 2004, to the County Service Area 

44 No. 25 - Keswick; and 
Contract No. 14-06-200-3367A-LTR1 

3

45 [4.2] WHEREAS, the Agency and the County of Shasta desire to merge the 

46 Existing Contract and the Keswick Contract into a single contract identified as Contract 

47 No. 14-06-200-3367A-LTR1 and the United States is willing to consent to such merger; and 

 [5th 48 ] WHEREAS, the United States and the Agency have, pursuant to subsection 

49 3404(c)(3) of the Central Valley Project Improvement Act (CVPIA), subsequently entered into a 

50 binding agreement identified as Binding Agreement No. 14-06-200-3367-BA, which sets out the 

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

52 expiration data after completion of a programmatic environmental impact statement and other 

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

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

55 [5.1] WHEREAS, the Agency and Centerville Community Services District entered 

56 into a partial assignment on April 11, 2001, identified as Contract No. 14-06-200-3367X, to 

57 permanently assign to Centerville Community Services District 2,900 acre-feet of the Project 

58 Water made available to the Contractor pursuant to the Existing Contract; and 

59 [5.2] WHEREAS, the Agency and Mountain Gate Community Services District entered 

60 into a partial assignment on ______________, identified as Contract No. 14-06-200-3367__, to 

61 permanently assign to Mountain Gate Community Services District 1,000 acre-feet of the Project 

62 Water made available to the Contractor pursuant to the Existing Contract; and 

63 [5.3] WHEREAS, the Agency and Bella Vista Water District entered into a partial 

64 assignment on ______________, identified as Contract No. 14-06-200-3367__, to permanently 

65 assign to Bella Vista Water District 578 acre-feet of the Project Water made available to the 

66 Contractor pursuant to the Existing Contract; and 
Contract No. 14-06-200-3367A-LTR1 

4

 [6th 67 ] WHEREAS, Section 3404(c) of the CVPIA provides for long-term renewal of the 

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

69 programmatic environmental impact statement (PEIS) pursuant to the National Environmental 

70 Policy Act (NEPA), analyzing the direct and indirect impacts and benefits of implementing the 

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

 [7th 72 ] WHEREAS, the United States has completed the PEIS and all other appropriate 

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

 [8th 74 ] WHEREAS, the Agency has requested the long-term renewal of the Existing 

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

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

 [9th 77 ] WHEREAS, the United States has determined that the Agency has fulfilled all of 

78 its obligations under the Existing Contract; and 

 [10th 79 ] WHEREAS, the Agency has demonstrated to the satisfaction of the Contracting 

80 Officer that the Agency has utilized the Project Water supplies available to it for reasonable and 

81 beneficial use and, based upon a needs analysis cooperatively prepared by the Contracting 

82 Officer and the Agency, has demonstrated projected future demand for water use that exceeds 

83 the Contract Total to be made available to it pursuant to this Contract; and 

 [11th 84 ] WHEREAS, water obtained from the Project has been relied upon by urban and 

85 agricultural areas within California for more than 50 years, and is considered by the Agency as 

86 an essential portion of its water supply; and 

 [12th 87 ] WHEREAS, the economies of regions within the Project, including the Agency’s, 

88 depend upon the continued availability of water, including water service from the Project; and 
Contract No. 14-06-200-3367A-LTR1 

5

89 [12.1] WHEREAS, the Agency has made and will continue to make substantial capital 

90 investments in diversion and treatment facilities, and requires a consistent, predictable quality of 

91 raw water in order to meet Safe Drinking Water Act requirements for its municipal customers, 

92 and to provide a consistent and predictable quality of water for its industrial customers; and 

 [13th 93 ] WHEREAS, the Secretary intends through coordination, cooperation, and 

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

95 Project for all Project purposes; and 

96 [13.1] WHEREAS, the Agency is located in the region of the Redding Groundwater 

97 Basin, and it is the desire of both the United States and the Agency to facilitate the cooperative 

98 efforts of local water service agencies to develop the Redding Groundwater Basin for 

99 conjunctive management and use with Project Water supplies, to maximize the reasonable 

100 beneficial use of water for the water service agencies and their customers in the region; and 

 [14th 101 ] WHEREAS, the mutual goals of the United States and the Agency include: to 

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

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

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

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

106 of the United States relative to the Project; and 

 [15th 107 ] WHEREAS, the parties intend by this Contract to develop a more cooperative 

108 relationship in order to achieve their mutual goals; and 

 [16th 109 ] WHEREAS, the United States and the Agency are willing to enter into this 

110 Contract pursuant to Federal Reclamation law on the terms and conditions set forth below; 
Contract No. 14-06-200-3367A-LTR1 

6

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

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

113 DEFINITIONS

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

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

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

117 both dates inclusive; 

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

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

120 annually by the Contracting Officer pursuant to this Contract; 

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

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

123 Contract Total; 

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

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

126 or regulation; 

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

128 Agency is entitled under subdivision (a) of Article 3 of this Contract; 

129 (f) “Agency's Service Area” shall mean the area to which the Agency is 

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

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

132 without amendment of this Contract; 
Contract No. 14-06-200-3367A-LTR1 

7

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

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

135 (h) Omitted; 

136 (i) Omitted; 

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

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

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

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

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

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

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

144 in accordance with subsections 202(3)(B) and (3)(C) of the Reclamation Reform Act of 

145 October 12, 1982 (96 Stat. 1263), as amended, hereinafter referred to as RRA. The Full Cost 

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

147 of the Rules and Regulations for the RRA; 

148 (k) Omitted; 

149 (l) Omitted; 

150 (m) Omitted; 

151 (n) Omitted; 

152 (o) “Municipal and Industrial (M&I) Water” shall mean Project Water and 

153 Replaced Water made available to the Contractor for purposes other than the commercial 

154 production of agricultural crops or livestock; 
Contract No. 14-06-200-3367A-LTR1 

8

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

156 the delivery of M&I Water; 

157 (q) “Operation and Maintenance” or “O&M” shall mean normal and 

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

159 maintenance of Project facilities; 

160 (r) Omitted; 

161 (s) “Project” shall mean the Central Valley Project owned by the United 

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

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

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

165 Reclamation law; 

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

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

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

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

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

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

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

173 the final forecast of Water Made Available to the Agency pursuant to this Contract or its 

174 preceding contract(s); 

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

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

177 through any agency of the Department of the Interior; 
Contract No. 14-06-200-3367A-LTR1 

9

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

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

180 (z) “Water Delivered” or “Delivered Water” shall mean Project Water or 

181 Replaced Water diverted for use by the Agency at the point(s) of delivery approved by the 

182 Contracting Officer; 

183 (aa) “Water Made Available” shall mean the estimated amount of Project 

184 Water and Replaced Water that can be delivered to the Agency for the upcoming Year as 

185 declared by the Contracting Officer, pursuant to subdivision (a) of Article 4 of this Contract; 

186 (bb) “Water Scheduled” shall mean Project Water and Replaced Water made 

187 available to the Agency for which times and quantities for delivery have been established by the 

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

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

190 Calendar Year through the last day of February of the following Calendar Year; and 

191 (dd) “Project Reservoirs” shall mean Shasta Reservoir, Keswick Reservoir, and 

192 Whiskeytown Reservoir; and 

193 (ee) “Replaced Water” shall mean water diverted from the Sacramento River 

194 or a tributary stream located in Shasta County at a time when the Agency or its Subcontractors 

195 would not otherwise be entitled to make such diversion; and 

196 (ff) “Subcontractor or Subcontractors” shall mean an individual, group of 

197 individuals, or legal entities who contract with the Agency to divert and use water made 

198 available to the Agency under this Contract. 
Contract No. 14-06-200-3367A-LTR1 

10

199 TERM OF CONTRACT 

200 2. (a) This Contract shall be effective March 1, 20___, through February 28, 

201 20___, and supercedes the Existing Contract. In the event the Agency wishes to renew this 

202 Contract beyond February 28, 20___, the Agency shall submit a request for renewal in writing to 

203 the Contracting Officer no later than two years prior to the date this Contract expires. 

204 (b) Omitted. 

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

206 each, which periods shall be consistent with then-existing Reclamation-wide policy, under terms 

207 and conditions mutually agreeable to the parties and consistent with Federal and State law. The 

208 Agency shall be afforded the opportunity to comment to the Contracting Officer on the proposed 

209 adoption and application of any revised policy applicable to the delivery of M&I Water that 

210 would limit the term of any subsequent renewal contract with the Agency for the furnishing of 

211 M&I Water to less than 40 years. 

212 (d) The Contracting Officer shall make a determination ten years after the 

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

214 Contract, of whether a conversion to a contract under subsection (c)(1) of Section 9 of the 

215 Reclamation Project Act of 1939 can be accomplished. The Contracting Officer anticipates that 

216 during the term of this Contract, all authorized Project construction expected to occur will have 

217 occurred, and on that basis the Contracting Officer agrees upon such completion to allocate all 

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

219 allocation is made, and subject to satisfaction of the condition set out in this subdivision, this 

220 Contract shall, at the request of the Contractor, be converted to a contract under said subsection 

221 9(c)(1), of the Reclamation Project Act of 1939, subject to applicable Federal law and under 
Contract No. 14-06-200-3367A-LTR1 

11

222 stated terms and conditions mutually agreeable to the Contractor and the Contracting Officer. A 

223 condition for such conversion to occur shall be a determination by the Contracting Officer that, 

224 account being taken of the amount credited to return by the Contractor as provided for under 

225 Federal Reclamation law, the remaining amount of construction costs assignable for ultimate 

226 return by the Contractor can probably be repaid to the United States within the term of a contract 

227 under said subsection 9(c)(1). If the remaining amount of costs that are properly assignable to 

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

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

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

231 possible so as to permit, upon request of the Contractor and satisfaction of the condition set out 

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

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

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

235 the parties shall incorporate in any subsequent renewal contract as described in subdivision (b) of 

236 this Article a provision that carries forth in substantially identical terms the provisions of this 

237 subdivision. 

238 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE AGENCY

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

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

241 this Contract, the Contracting Officer shall make available for delivery to the Agency 972 acre242 feet of Project Water for M&I purposes: Provided, That the United States shall not be 

243 responsible for the maintenance of water levels in Project Reservoirs in order to permit the 

244 Agency and its Subcontractors to withdraw water therefrom; Provided, further, That in no event 

245 shall the United States at any time be obligated to furnish water at the point or points of delivery 
Contract No. 14-06-200-3367A-LTR1 

12

246 on the Spring Creek Power Conduit at a rate in excess of 1,250 gallons per minute. The facilities 

247 of the Contractor shall include devices satisfactory to the Contracting Officer which will limit the 

248 rate of flow to the Contractor to 1,250 gallons per minute. The United States shall not be 

249 responsible for maintaining or limiting the heads or pressures at which the water is delivered on 

250 the Spring Creek Power Conduit. Water Delivered to the Agency in accordance with this 

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

252 Contract; Provided, That Project Water made available from Project Reservoirs for direct 

253 diversion by the Agency and its Subcontractors shall be used for M&I purposes only; Provided,

254 further, That Replaced Water may be taken by the Agency and its Subcontractors for M&I 

255 purposes from the existing flow in the Sacramento River or a tributary stream located in Shasta 

256 County pursuant to the terms hereof. If the Agency or its Subcontractors desire to divert water 

257 during a period when not otherwise entitled to do so under a water right permit or license, the 

258 Agency or its Subcontractors may do so without objection by the United States contingent upon 

259 the Agency’s making appropriate payment to the United States in the manner set forth in Article 

260 7 hereof. To the extent necessary to satisfy third parties below Project Reservoirs having a valid 

261 claim, the United States will replace from such Project Reservoirs all water taken by the Agency 

262 and its Subcontractors to the extent of water available for such replacement, as conclusively 

263 determined by the Contracting Officer. If the United States determines that there is no water 

264 available for such replacement during any period of time, it shall notify the Agency in advance 

265 of the period of such unavailability. For the purposes of this Contract, Replaced Water shall be 

266 considered to be all such water taken each Year during the period from June 15 through 

267 September 30, and for the purpose of payment such water shall be deemed to have been 

268 furnished from the Project. The Agency shall determine the quantities of Replaced Water in 

269 accordance with the procedures established in Article 5 of this Contract. 

270 (1) The United States assumes no responsibility and makes no 

271 representation with respect to the availability of water in the Sacramento River or a tributary 
Contract No. 14-06-200-3367A-LTR1 

13

272 stream located in Shasta County. Replaced Water may be taken if and when available; Provided, 

273 That the Agency and its Subcontractors shall hold the United States harmless if the diversion of 

274 Replaced Water impairs an existing water right which has a point of diversion upstream from 

275 Project storage facilities. 

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

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

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

279 Agency actually receiving the amount of Project Water set out in subdivision (a) of this Article 

280 in any given Year is uncertain. The Contracting Officer’s modeling referenced in the PEIS 

281 projected that the Contract Total set forth in this Contract will not be available to the Agency in 

282 many years. During the most recent five years, the Recent Historic Average of water made 

283 available to the Agency was 894 acre-feet. Nothing in subdivision (b) of this Article shall affect 

284 the rights and obligations of the parties under any provision of this Contract. 

285 (c) The Agency shall utilize the Project Water in accordance with all 

286 applicable legal requirements. 

287 (d) The Agency shall make reasonable and beneficial use of all water 

288 furnished pursuant to this Contract. Ground-water recharge programs (direct, indirect, or in 

289 lieu), round-water banking programs, surface water storage programs, and other similar 

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

291 within the Agency’s Service Area which are consistent with applicable State law and result in 

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

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

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

295 sufficient lawful uses exist in the Agency’s Service Area so that using a long-term average, the 

296 quantity of Delivered Water is demonstrated to be reasonable for such uses and in compliance 

297 with Federal Reclamation law. Ground-water recharge programs, ground-water banking 
Contract No. 14-06-200-3367A-LTR1 

14

298 programs, surface water storage programs, and other similar programs utilizing Project Water or 

299 other water furnished pursuant to this Contract conducted outside the Agency’s Service Area 

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

301 upon environmental documentation, Project Water rights, and Project operational concerns. The 

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

303 (e) The Agency shall comply with requirements applicable to the Agency in 

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

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

306 amended, that are within the Agency’s legal authority to implement. The Existing Contract, 

307 which evidences in excess of 36 years of diversions for M&I purposes of the quantities of water 

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

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

310 needed environmental review. Nothing herein shall be construed to prevent the Agency from 

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

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

313 (f) As soon as possible following each declaration of Water Made Available 

314 under Article 4 of this Contract, the Contracting Officer will make a determination whether 

315 Project Water, or other water available to the Project, can be made available to the Agency in 

316 addition to the Contract Total under Article 3 of this Contract during the Year without adversely 

317 impacting other Project Contractors. At the request of the Agency, the Contracting Officer will 

318 consult with the Agency prior to making such a determination. If the Contracting Officer 

319 determines that Project Water, or other water available to the Project, can be made available to 

320 the Agency, the Contracting Officer will announce the availability of such water and shall so 

321 notify the Agency as soon as practical. The Contracting Officer will thereafter meet with the 

322 Agency and other Project Contractors capable of taking such water to determine the most 

323 equitable and efficient allocation of such water. If the Agency requests the delivery of any 
Contract No. 14-06-200-3367A-LTR1 

15

324 quantity of such water, the Contracting Officer shall make such water available to the Agency in 

325 accordance with applicable statutes, regulations, guidelines, and policies. 

326 (g) The Agency may request permission to reschedule for use during the 

327 subsequent Year some or all of the Water Made Available to the Agency during the current Year, 

328 referred to as “carryover.” The Agency may request permission to use during the current Year a 

329 quantity of Project Water which may be made available by the United States to the Agency 

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

331 may permit such uses in accordance with applicable statutes, regulations, guidelines, and 

332 policies. 

333 (h) The Agency’s right pursuant to Federal Reclamation law and applicable 

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

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

336 Contract, during the terms thereof shall not be disturbed so long as the Agency shall fulfill all of 

337 its obligations under this Contract and any renewals thereof. Nothing in the preceding sentence 

338 shall affect the Contracting Officer’s ability to impose shortages under Article 11 or subdivision 

339 (b) of Article 12 of this Contract or applicable provisions of any subsequent renewal contracts. 

340 (i) Project Water furnished to the Agency pursuant to this Contract may be 

341 delivered for other than M&I purposes upon written approval by the Contracting Officer in 

342 accordance with the terms and conditions of such approval. 

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

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

345 Contracting Officer shall not object to participation by the Agency, in the capacity and to the 

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

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

348 Agency’s position in such a proceeding; Provided further, That in such proceedings the 
Contract No. 14-06-200-3367A-LTR1 

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349 Contracting Officer shall recognize the Agency has a legal right under the terms of this Contract 

350 to use Project Water. 

351 TIME FOR DELIVERY OF WATER

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

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

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

355 Historic Average and will be updated monthly, and more frequently if necessary, based on then356 current operational and hydrologic conditions and a new declaration with changes, if any, to the 

357 Water Made Available will be made. The Contracting Officer shall provide forecasts of Project 

358 operations and the basis of the estimate, with relevant supporting information, upon the written 

359 request of the Agency. Concurrently with the declaration of the Water Made Available, the 

360 Contracting Officer shall provide the Agency with the updated Recent Historic Average. 

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

362 Agency shall submit to the Contracting Officer a written schedule, satisfactory to the Contracting 

363 Officer, showing the monthly quantities of Project Water and/or Replaced Water to be delivered 

364 by the United States to the Agency pursuant to this Contract for the Year commencing on such 

365 March 1. The Contracting Officer shall use all reasonable means to deliver Project Water and/or 

366 Replaced Water according to the approved schedule for the Year commencing on such March 1. 

367 (c) The Agency shall not schedule Project Water and/or Replaced Water in 

368 excess of the quantity of Project Water and/or Replaced Water the Agency intends to put to 

369 reasonable and beneficial use within the Agency's Service Area or to sell, transfer, or exchange 

370 pursuant to Article 9 of this Contract during any Year. 

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

372 Contract, the United States shall deliver Project Water and/or Replaced Water to the Agency in 

373 accordance with the initial schedule submitted by the Agency pursuant to subdivision (b) of this 

374 Article, or any written revision(s), satisfactory to the Contracting Officer, thereto submitted 
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375 within a reasonable time prior to the date(s) on which the requested change(s) is/are to be 

376 implemented. 

377 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

378 5. (a) Project Water and/or Replaced Water scheduled pursuant to subdivision 

379 (b) of Article 4 of this Contract shall be delivered to the Agency at the downstream end of the 

380 metering equipment installed by the United States approximately at Station 170+62.0 of the 

381 Spring Creek Power Conduit and any additional point or points of delivery either on Project 

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

383 and the Contractor. 

384 (b) Omitted. 

385 (c) Omitted. 

386 (d) All Water Delivered to the Agency pursuant to this Contract shall be 

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

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

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

390 accuracy of such measurements and shall take any necessary steps to adjust any errors appearing 

391 therein. For any period of time when accurate measurements have not been made, the 

392 Contracting Officer shall consult with the Agency prior to making a final determination of the 

393 quantity delivered for that period of time. 

394 (e) (1) The construction, operation, and maintenance of all pumps, 

395 pipelines, storage tanks, distribution lines, and other facilities, hereinafter referred to as the 

396 facilities, required to take, measure, convey, and distribute water and the expense thereof shall be 

397 the responsibility of the Agency. The facilities may be installed, operated, and maintained on or 

398 across property of the United States in the area of the turnout(s) described in subdivision (a) of 

399 this Article subject to such restrictions and regulations as to type, location, method of 

400 installation, and operation and maintenance as may be promulgated by the Contracting Officer. 
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401 (e) (2) The Contracting Officer shall not be responsible for the control, 

402 carriage, handling, use, disposal, or distribution of Water Delivered to the Agency pursuant to 

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

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

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

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

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

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

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

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

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

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

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

414 MEASUREMENT OF WATER WITHIN THE CONTRACTOR’S SERVICE AREA

415 6. (a) The Agency has established a measuring program satisfactory to the 

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

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

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

419 The Agency shall be responsible for installing, operating, and maintaining and repairing all such 

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

421 States. The Agency shall use the information obtained from such water measuring devices or 

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

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

424 customer class as defined in the Agency’s water conservation plan provided for in Article 26 of 

425 this Contract. Nothing herein contained, however, shall preclude the Agency from establishing 

426 and collecting any charges, assessments, or other revenues authorized by California law. The 
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427 Agency shall include a summary of all its annual surface water deliveries in the annual report 

428 described in subdivision (c) of Article 26. 

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

430 execution of this Contract, the Agency shall provide to the Contracting Officer a written report 

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

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

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

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

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

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

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

438 measuring devices or water measuring methods identified in the Agency’s report and if the 

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

440 Contracting Officer notifies the Agency that the measuring devices or methods are inadequate, 

441 the parties shall within 60 days following the Contracting Officer‘s response, negotiate in good 

442 faith the earliest practicable date by which the Agency shall modify said measuring devices 

443 and/or measuring methods as required by the Contracting Officer to ensure compliance with 

444 subdivision (a) of this Article. 

445 (c) All new surface water delivery systems installed within the Agency's 

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

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

448 (d) The Agency shall inform the Contracting Officer and the State of 

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

450 within the Agency’s Service Area during the previous Year. 

 (e) The Agency shall inform the Contracting Officer on or before the 20th 451 

452 calendar day of each month of the quantity of M&I Water taken during the preceding month. 
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453 RATES AND METHOD OF PAYMENT FOR WATER

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

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

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

457 shall be amended, modified, or superceded only through a public notice and comment procedure; 

458 (ii) applicable Federal Reclamation law and associated rules and regulations, or policies; and (iii) 

459 other applicable provisions of this Contract. Payments shall be made by cash transaction, 

460 electronic funds transfer, or any other mechanism as may be agreed to in writing by the Agency 

461 and the Contracting Officer. The Rates, Charges, and Tiered Pricing Component applicable to 

462 the Agency upon execution of this Contract are set forth in Exhibit “B,” as may be revised 

463 annually. 

464 (b) The Contracting Officer shall notify the Agency of the Rates, Charges, 

465 and Tiered Pricing Component as follows: 

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

467 provide the Agency an estimate of the Charges for Project Water that will be applied to the 

468 period October 1, of the current Calendar Year, through September 30, of the following Calendar 

469 Year, and the basis for such estimate. The Agency shall be allowed not less than two months to 

470 review and comment on such estimates. On or before September 15 of each Calendar Year, the 

471 Contracting Officer shall notify the Agency in writing of the Charges to be in effect during the 

472 period October 1 of the current Calendar Year, through September 30, of the following Calendar 

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

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

475 shall make available to the Agency an estimate of the Rates and Tiered Pricing Component for 

476 Project Water for the following Year and the computations and cost allocations upon which those 

477 Rates are based. The Agency shall be allowed not less than two months to review and comment 

478 on such computations and cost allocations. By December 31 of each Calendar Year, the 
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479 Contracting Officer shall provide the Agency with the final Rates and Tiered Pricing Component 

480 to be in effect for the upcoming Year, and such notification shall revise Exhibit “B.” 

481 (c) At the time the Agency submits the initial schedule for the delivery of 

482 Project Water and Replaced Water for each Year pursuant to subdivision (b) of Article 4 of this 

483 Contract, the Agency shall make an advance payment to the United States equal to the total 

484 amount payable pursuant to the applicable Rate(s) set under subdivision (a) of this Article, for 

485 the Project Water and Replaced Water scheduled to be delivered pursuant to this Contract during 

486 the first two calendar months of the Year. Before the end of the first month and before the end 

487 of each calendar month thereafter, the Agency shall make an advance payment to the United 

488 States, at the Rate(s) set under subdivision (a) of this Article, for the Water Scheduled to be 

489 delivered pursuant to this Contract during the second month immediately following. 

490 Adjustments between advance payments for Water Scheduled and payments at Rates due for 

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

492 revised schedule submitted by the Agency pursuant to Article 4 of this Contract which increases 

493 the amount of Water Delivered pursuant to this Contract during any month shall be accompanied 

494 with appropriate advance payment, at the Rates then in effect, to assure that Project Water or 

495 Replaced Water is not delivered to the Agency in advance of such payment. In any month in 

496 which the quantity of Water Delivered to the Agency pursuant to this Contract equals the 

497 quantity of Water Scheduled and paid for by the Agency, no additional Project Water or 

498 Replaced Water shall be delivered to the Agency unless and until an advance payment at the 

499 Rates then in effect for such additional Project Water or Replaced Water is made. Final 

500 adjustment between the advance payments for the Water Scheduled and payments for the 

501 quantities of Water Delivered during each Year pursuant to this Contract shall be made as soon 

502 as practicable, but no later than April 30th of the following Year, or 60 days after the delivery of 

503 Project Water carried over under subdivision (g) of Article 3 of this Contract if such water is not 

504 delivered by the last day of February. 
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505 (d) The Agency shall also make a payment in addition to the Rate(s) in 

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

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

508 month of delivery; Provided, That the Agency may be granted an exception from the Tiered 

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

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

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

512 deemed a bill for the payment of Charges and the applicable Tiered Pricing Component for 

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

514 through the adjustment of payments due to the United States for Charges for the next month. 

515 Any amount to be paid for past due payment of Charges and the Tiered Pricing Component shall 

516 be computed pursuant to Article 20 of this Contract. 

517 (e) The Agency shall pay for any Water Delivered under subdivision (a), (f), 

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

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

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

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

522 (a) of this Article. 

523 (f) Payments to be made by the Agency to the United States under this 

524 Contract may be paid from any revenues available to the Agency. 

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

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

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

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

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

530 administration of the financial terms and conditions of its long-term contracts, in accordance 
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531 with applicable Federal standards, so as to reflect the application of Project costs and revenues. 

532 The Contracting Officer shall, each Year upon request of the Agency, provide to the Agency a 

533 detailed accounting of all Project and Agency expense allocations, the disposition of all Project 

534 and Agency revenues, and a summary of all water delivery information. The Contracting Officer 

535 and the Agency shall enter into good faith negotiations to resolve any discrepancies or disputes 

536 relating to accountings, reports, or information. 

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

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

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

540 Component, and/or for making and allocating payments, other than those set forth in this Article 

541 may be in the mutual best interest of the parties, it is expressly agreed that the parties may enter 

542 into agreements to modify the mechanisms, policies, and procedures for any of those purposes 

543 while this Contract is in effect without amending this Contract. 

544 (j) (1) Beginning at such time as deliveries of Project Water and Replaced 

545 Water in a Year exceed 80 percent of the Contract Total, then before the end of the month 

546 following the month of delivery the Agency shall make an additional payment to the United 

547 States equal to the applicable Tiered Pricing Component. The Tiered Pricing Component for the 

548 amount of Water Delivered in excess of 80 percent of the Contract Total, but less than or equal 

549 to 90 percent of the Contract Total, shall equal one-half of the difference between the Rate 

550 established under subdivision (a) of this Article and the M&I Full Cost Water Rate. The Tiered 

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

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

553 Article and (ii) the M&I Full Cost Water Rate. 

554 (2) Omitted 

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

556 Component pursuant to this Article, Water Delivered shall include Project Water that the 
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557 Agency transfers to others but shall not include Project Water transferred and delivered to the 

558 Agency nor shall it include the additional water provided to the Agency under the provisions of 

559 subdivision (f) of Article 3 of this Contract. 

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

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

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

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

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

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

566 Contracting Officer has provided the Agency an opportunity to discuss the nature, need, and 

567 impact of the proposed change. 

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

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

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

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

572 accordance with the then applicable Project ratesetting policy. If the Agency is receiving lower 

573 Rates and Charges because of inability to pay and is transferring Project Water to another entity 

574 whose Rates and Charges are not adjusted due to inability to pay, the Rates and Charges for 

575 transferred Project Water shall be the Agency’s Rates and Charges and will not be adjusted to 

576 reflect the Agency’s inability to pay. 

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

578 Officer is authorized to adjust determinations of ability to pay every five years. 

579 (n) With respect to the Rates for M&I Water, the Contractor asserts that it is 

580 not legally obligated to pay any Project deficits claimed by the United States to have accrued as 

581 of the date of this Contract or deficit-related interest charges thereon. By entering into this 

582 Contract, the Contractor does not waive any legal rights or remedies that it may have with 
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583 respect to such disputed issues. Notwithstanding the execution of this Contract, and payments 

584 made hereunder, the Contractor may challenge in the appropriate administrative or judicial 

585 forums: (1) the existence, computation, or imposition of any deficit charges accruing during the 

586 term of the Existing Contract and any preceding interim renewal contracts, if applicable; (2) 

587 interest accruing on any such deficits; (3) the inclusion of any such deficit charges or interest in 

588 the Rates; (4) the application by the United States of payments made by the Contractor under its 

589 Existing Contract and any preceding interim renewal contract, if applicable; and (5) the 

590 application of such payments in the Rates. The Contracting Officer agrees that the Contractor 

591 shall be entitled to the benefit of any administrative or judicial ruling in favor of any Project 

592 M&I contractor on any of these issues, and credit for payments heretofore made, Provided, That 

593 the basis for such ruling is applicable to the Contractor. 

594 NON-INTEREST BEARING OPERATION AND MAINTENANCE DEFICITS

595 8. The Agency and the Contracting Officer concur that, as of the effective date of 

596 this Contract, the Agency has no non-interest bearing O&M deficits and shall have no further 

597 liability therefor. 

598 SALES, TRANSFERS, OR EXCHANGES OF WATER

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

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

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

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

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

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

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

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

607 documentation should include, as appropriate, an analysis of ground-water impacts and 
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608 economic and social effects, including environmental justice, of the proposed water transfers on 

609 both the transferor and transferee. 

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

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

612 geographical area and to allow the Agency to participate in an accelerated water transfer program 

613 during the term of this Contract, the Contracting Officer shall prepare, as appropriate, all 

614 necessary environmental documentation including, but not limited to, documents prepared 

615 pursuant to NEPA and ESA analyzing annual transfers within such geographical areas, and the 

616 Contracting Officer shall determine whether such transfers comply with applicable law. 

617 Following the completion of the environmental documentation, such transfers addressed in such 

618 documentation shall be conducted with advance notice to the Contracting Officer, but shall not 

619 require prior written approval by the Contracting Officer. Such environmental documentation 

620 and the Contracting Officer’s compliance determination shall be reviewed every five years and 

621 updated, as necessary, prior to the expiration of the then-existing five-year period. All 

622 subsequent environmental documentation shall include an alternative to evaluate not less than the 

623 quantity of Project Water historically transferred within the same geographical area. 

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

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

626 years, for M&I use, ground-water recharge, water banking, similar ground-water activities, 

627 surface water storage, or fish and wildlife resources; not lead to land conversion; and be 

628 delivered to established cropland, wildlife refuges, ground-water basins or M&I use; (ii) occur 

629 within a single Year; (iii) occur between a willing seller and a willing buyer; (iv) convey water 

630 through existing facilities with no new construction or modifications to facilities and be between 

631 existing Project Contractors and/or the Agency and the United States, Department of the Interior; 

632 and (v) comply with all applicable Federal, State, and local or tribal laws and requirements 

633 imposed for protection of the environment and Indian Trust Assets, as defined under Federal law. 
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634 (d) For the purpose of determining whether Section 3405(a)(1)(M) of the 

635 CVPIA applies to the Agency as a transferor or transferee of Project Water, the Contracting 

636 Officer acknowledges that the Agency is within a county, watershed, or other area of origin, as 

637 those terms are utilized under California law, of water that constitutes the natural flow of the 

638 Sacramento River and its tributaries above the confluence of the American and Sacramento 

639 Rivers. 

640 APPLICATION OF PAYMENTS AND ADJUSTMENTS 

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

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

643 of the Agency arising out of this Contract then due and payable. Overpayments of more than 

644 $1,000 shall be refunded at the Agency’s request. In lieu of a refund, any amount of such 

645 overpayment, at the option of the Agency, may be credited against amounts to become due to the 

646 United States by the Agency. With respect to overpayment, such refund or adjustment shall 

647 constitute the sole remedy of the Agency or anyone having or claiming to have the right to the 

648 use of any of the Project Water supply provided for herein. All credits and refunds of 

649 overpayments shall be made within 30 days of the Contracting Officer obtaining direction as to 

650 how to credit or refund such overpayment in response to the notice to the Agency that it has 

651 finalized the accounts for the Year in which the overpayment was made. 

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

653 Agency pursuant to Article 25 of this Contract shall be adjusted to reflect the actual costs when 

654 the work has been completed. If the advances exceed the actual costs incurred, the difference 

655 will be refunded to the Agency. If the actual costs exceed the Agency's advances, the Agency 

656 will be billed for the additional costs pursuant to Article 25. 
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657 TEMPORARY REDUCTIONS--RETURN FLOWS

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

659 requirements of Federal law; and (ii) the obligations of the United States under existing 

660 contracts, or renewals thereof, providing for water deliveries from the Project, the Contracting 

661 Officer shall make all reasonable efforts to optimize Project Water deliveries to the Agency as 

662 provided in this Contract. 

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

664 quantity of Water Delivered to the Agency as herein provided for the purposes of investigation, 

665 inspection, maintenance, repair, or replacement of any of the Project facilities or any part thereof 

666 necessary for the delivery of Project Water to the Agency, but so far as feasible the Contracting 

667 Officer will give the Agency due notice in advance of such temporary discontinuance or 

668 reduction, except in case of emergency, in which case no notice need be given; Provided, That 

669 the United States shall use its best efforts to avoid any discontinuance or reduction in such 

670 service. Upon resumption of service after such reduction or discontinuance, and if requested by 

671 the Agency, the United States will, if possible, deliver the quantity of Project Water which would 

672 have been delivered hereunder in the absence of such discontinuance or reduction. 

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

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

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

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

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

678 under the Agency. 
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679 CONSTRAINTS ON THE AVAILABILITY OF WATER

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

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

682 available to the Agency pursuant to this Contract. In the event the Contracting Officer 

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

684 Agency of said determination as soon as practicable. 

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

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

687 actions taken by the Contracting Officer to meet legal obligations then, except as provided in 

688 subdivision (a) of Article 18 of this Contract, no liability shall accrue against the United States or 

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

690 (c) Omitted. 

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

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

693 amended, modified, or superceded only through a public notice and comment procedure. 

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

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

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

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

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

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

700 proceeding. 
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701 UNAVOIDABLE GROUNDWATER PERCOLATION

702 13. Omitted. 

703 RULES AND REGULATIONS

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

705 pursuant to this Contract is subject to Federal Reclamation law, as amended and supplemented, 

706 and the rules and regulations promulgated by the Secretary of the Interior under Federal 

707 Reclamation law. 

708 WATER AND AIR POLLUTION CONTROL

709 15. The Agency, in carrying out this Contract, shall comply with all applicable water 

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

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

712 QUALITY OF WATER

713 16. (a) Project facilities used to deliver Project Water to the Agency pursuant to 

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

715 Water to the Agency in accordance with the water quality standards specified in subsection 2(b) 

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

717 1986 (100 Stat. 3050) or other existing Federal laws. The United States is under no obligation to 

718 construct or furnish water treatment facilities to maintain or to improve the quality of Water 

719 Delivered to the Agency pursuant to this Contract. The United States does not warrant the 

720 quality of Water Delivered to the Agency pursuant to this Contract. 

721 (b) The O&M of Project facilities shall be performed in such manner as is 

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

723 highest level reasonably attainable as determined by the Contracting Officer. The Contractor 

724 shall be responsible for compliance with all State and Federal water quality standards applicable 

725 to surface and subsurface agricultural drainage discharges generated through the use of Federal 
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726 or Contractor facilities or Project Water provided by the Contractor within the Contractor's 

727 Service Area. 

728 WATER ACQUIRED BY THE CONTRACTOR

729 OTHER THAN FROM THE UNITED STATES

730 17. (a) Omitted. 

731 (b) Water or water rights now owned or hereafter acquired by the Agency, 

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

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

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

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

736 (1) The Agency may introduce non-Project water into Project facilities 

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

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

739 Project ratesetting policy, the RRA, and the Project use power policy, if such Project use power 

740 policy is applicable, each as amended, modified, or superceded from time to time. 

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

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

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

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

745 entitlements to any other Project Contractors; or (iv) interfere with the physical maintenance of 

746 the Project facilities. 

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

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

749 Project facilities. The Agency hereby releases and agrees to defend and indemnify the United 

750 States and its respective officers, agents, and employees, from any claim for damage to persons 

751 or property, direct or indirect, resulting from the acts of the Agency, its officers’, employees’, 
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752 agents’ or assigns’, act(s) in (i) extracting or diverting non-Project water from any source, or (ii) 

753 diverting such non-Project water into Project facilities. 

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

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

756 ground-water management plan for the area from which it was extracted. 

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

758 Officer, the United States and the Agency shall share priority to utilize the remaining capacity of 

759 the facilities declared to be available by the Contracting Officer for conveyance and 

760 transportation of non-Project water prior to any such remaining capacity being made available to 

761 non-Project contractors. 

762 OPINIONS AND DETERMINATIONS

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

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

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

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

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

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

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

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

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

772 statute or regulation. 

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

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

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

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

777 with the Agency to the extent reasonably practicable. 
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778 COORDINATION AND COOPERATION

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

780 Officer and the Agency shall communicate, coordinate, and cooperate with each other, and with 

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

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

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

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

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

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

787 Contract. Each party shall retain exclusive decision making authority for all actions, opinions, 

788 and determinations to be made by the respective party. 

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

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

791 interested Project Contractors to develop a mutually agreeable, written Project-wide process, 

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

793 process shall be to provide, to the extent practicable, the means of mutual communication and 

794 interaction regarding significant decisions concerning Project operation and management on a 

795 real-time basis. 

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

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

798 intent: 

799 (1) The Contracting Officer will, at the request of the Agency, assist in 

800 the development of integrated resource management plans for the Agency. Further, the 

801 Contracting Officer will, as appropriate, seek authorizations for implementation of partnerships 

802 to improve water supply, water quality, and reliability. 
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803 (2) The Secretary will, as appropriate, pursue program and project 

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

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

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

807 State of California to seek improved water resource management. 

808 (3.1) The Secretary and the Agency desire to work together to maximize 

809 the reasonable beneficial use of water for their mutual benefit. As a consequence, the Secretary 

810 and the Agency will work in partnership and with others in the region of the Redding 

811 Groundwater Basin, including other Contractors in the Shasta and Trinity Divisions of the 

812 Project, to facilitate the better integration with the region of the Redding Groundwater Basin of 

813 all water supplies including, but not limited to, the better management and integration of surface 

814 water and groundwater, transfers and exchanges of water, the development and better utilization 

815 of surface water storage, the effective utilization of waste, seepage and return flow water, and 

816 other operational and management options that may be identified in the future. 

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

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

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

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

821 management activities, and other issues as appropriate. 

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

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

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

825 Agency or other interested stakeholders or to make decisions in a timely fashion as needed to 

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

827 CHARGES FOR DELINQUENT PAYMENTS

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

829 charges on delinquent installments or payments. When a payment is not received by the due 
Contract No. 14-06-200-3367A-LTR1 

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830 date, the Contractor shall pay an interest charge for each day the payment is delinquent beyond 

831 the due date. When a payment becomes sixty (60) days delinquent, the Contractor shall pay an 

832 administrative charge to cover additional costs of billing and processing the delinquent payment. 

833 When a payment is delinquent ninety (90) days or more, the Contractor shall pay an additional 

834 penalty charge of six (6%) percent per year for each day the payment is delinquent beyond the 

835 due date. Further, the Contractor shall pay any fees incurred for debt collection services 

836 associated with a delinquent payment. 

837 (b) The interest charge rate shall be the greater of the rate prescribed quarterly 

838 in the Federal Register by the Department of the Treasury for application to overdue payments, 

839 or the interest rate of one-half of one (0.5%) percent per month prescribed by Section 6 of the 

840 Reclamation Project Act of 1939 (Public Law 76-260). The interest charge rate shall be 

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

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

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

844 accrued interest, and finally to the overdue payment. 

845 EQUAL OPPORTUNITY

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

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

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

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

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

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

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

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

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

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

856 nondiscrimination clause. 

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

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

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

860 national origin. 

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

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

863 to be provided by the Contracting Officer, advising the said labor union or workers' 

864 representative of the Contractor's commitments under Section 202 of Executive Order 11246 of 

865 September 24, 1965, and shall post copies of the notice in conspicuous places available to 

866 employees and applicants for employment. 
Contract No. 14-06-200-3367A-LTR1 

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

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

869 of the Secretary of Labor. 

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

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

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

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

874 such rules, regulations, and orders. 

875 (f) In the event of the Contractor's noncompliance with the nondiscrimination 

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

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

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

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

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

881 otherwise provided by law. 

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

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

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

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

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

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

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

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

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

891 GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT

892 22. (a) The obligation of the Agency to pay the United States as provided in this 

893 Contract is a general obligation of the Agency notwithstanding the manner in which the 

894 obligation may be distributed among the Contractor's water users and notwithstanding the default 

895 of individual water users in their obligations to the Contractor. 

896 (b) The payment of charges becoming due hereunder is a condition precedent 

897 to receiving benefits under this Contract. The United States shall not make water available to the 

898 Contractor through Project facilities during any period in which the Contractor may be in arrears 

899 in the advance payment of water rates due the United States. The Contractor shall not furnish 

900 water made available pursuant to this Contract for lands or parties which are in arrears in the 

901 advance payment of water rates levied or established by the Contractor. 

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

903 obligation to require advance payment for water rates which it levies. 
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904 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

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

906 (42 U.S.C. 2000d), Section 504 of the Rehabilitation Act of 1975 (P.L. 93-112, as amended), the 

907 Age Discrimination Act of 1975 (42 U.S.C. 6101, et seq.) and any other applicable civil rights 

908 laws, as well as with their respective implementing regulations and guidelines imposed by the 

909 U.S. Department of the Interior and/or Bureau of Reclamation. 

910 (b) These statutes require that no person in the United States shall, on the 

911 grounds of race, color, national origin, handicap, or age, be excluded from participation in, be 

912 denied the benefits of, or be otherwise subjected to discrimination under any program or activity 

913 receiving financial assistance from the Bureau of Reclamation. By executing this Contract, the 

914 Contractor agrees to immediately take any measures necessary to implement this obligation, 

915 including permitting officials of the United States to inspect premises, programs, and documents. 

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

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

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

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

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

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

922 agreements made in this Article, and that the United States reserves the right to seek judicial 

923 enforcement thereof. 

924 PRIVACY ACT COMPLIANCE

925 24. (a) The Contractor shall comply with the Privacy Act of 1974 (5 U.S.C. 552a) 

926 (the Act) and the Department of the Interior rules and regulations under the Act (43 CFR 2.45 et 

927 seq.) in maintaining Landholder acreage certification and reporting records, required to be 

928 submitted to the Contractor for compliance with Sections 206 and 228 of the Reclamation 

929 Reform Act of 1982 (96 Stat. 1266), and pursuant to 43 CFR 426.18. 

930 (b) With respect to the application and administration of the criminal penalty 

931 provisions of the Act (5 U.S.C. 552a(i)), the Contractor and the Contractor's employees 

932 responsible for maintaining the certification and reporting records referenced in (a) above are 

933 considered to be employees of the Department of the Interior. See 5 U.S.C. 552a(m). 

934 (c) The Contracting Officer or a designated representative shall provide the 

935 Contractor with current copies of the Interior Department Privacy Act regulations and the Bureau 

936 of Reclamation Federal Register Privacy Act System of Records Notice (Acreage Limitation--

937 Interior, Reclamation-31) which govern the maintenance, safeguarding, and disclosure of 

938 information contained in the Landholder's certification and reporting records. 

939 (d) The Contracting Officer shall designate a full-time employee of the 

940 Bureau of Reclamation to be the System Manager who shall be responsible for making decisions 

941 on denials pursuant to 43 CFR 2.61 and 2.64 amendment requests pursuant to 43 CFR 2.72. The 

942 Contractor is authorized to grant requests by individuals for access to their own records. 
Contract No. 14-06-200-3367A-LTR1 

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943 (e) The Contractor shall forward promptly to the System Manager each 

944 proposed denial of access under 43 CFR 2.64; and each request for amendment of records filed 

945 under 43 CFR 2.71; notify the requester accordingly of such referral; and provide the System 

946 Manager with information and records necessary to prepare an appropriate response to the 

947 requester. These requirements do not apply to individuals seeking access to their own 

948 certification and reporting forms filed with the Contractor pursuant to 43 CFR 426.18, unless the 

949 requester elects to cite the Privacy Act as a basis for the request. 

950 AGENCY TO PAY CERTAIN MISCELLANEOUS COSTS

951 25. In addition to all other payments to be made by the Agency pursuant to this 

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

953 detailed statement submitted by the Contracting Officer to the Agency for such specific items of 

954 direct cost incurred by the United States for work requested by the Agency associated with this 

955 Contract plus indirect costs in accordance with applicable Bureau of Reclamation policies and 

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

957 writing in advance by the Agency. This Article shall not apply to costs for routine contract 

958 administration. 

959 WATER CONSERVATION

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

961 Federally constructed or Federally financed facilities pursuant to this Contract, the Agency shall 

962 be implementing an effective water conservation and efficiency program based on the Agency's 

963 water conservation plan that has been determined by the Contracting Officer to meet the 

964 conservation and efficiency criteria for evaluating water conservation plans established under 

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

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

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

968 Contract shall be contingent upon the Agency’s continued implementation of such water 

969 conservation program. In the event the Agency's water conservation plan or any revised water 

970 conservation plan completed pursuant to subdivision (d) of Article 26 of this Contract have not 

971 yet been determined by the Contracting Officer to meet such criteria, due to circumstances which 
Contract No. 14-06-200-3367A-LTR1 

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972 the Contracting Officer determines are beyond the control of the Agency, water deliveries shall 

973 be made under this Contract so long as the Agency diligently works with the Contracting Officer 

974 to obtain such determination at the earliest practicable date, and thereafter the Agency 

975 immediately begins implementing its water conservation and efficiency program in accordance 

976 with the time schedules therein. 

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

978 Article 3 of this Contract equal or exceed 2,000 acre-feet per Year, the Agency shall implement 

979 the Best Management Practices identified by the time frames issued by the California Urban 

980 Water Conservation Council for such M&I Water unless any such practice is determined by the 

981 Contracting Officer to be inappropriate for the Agency. 

982 (c) The Agency shall submit to the Contracting Officer a report on the status 

983 of its implementation of the water conservation plan on the reporting dates specified in the then 

984 existing conservation and efficiency criteria established under Federal law. 

985 (d) At five-year intervals, the Agency shall revise its water conservation plan 

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

987 plans established under Federal law and submit such revised water management plan to the 

988 Contracting Officer for review and evaluation. The Contracting Officer will then determine if 

989 the water conservation plan meets Reclamation’s then-current conservation and efficiency 

990 criteria for evaluating water conservation plans established under Federal law. 

991 (e) If the Agency is engaged in direct ground-water recharge, such activity 

992 shall be described in the Agency’s water conservation plan. 

993 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

994 27. Except as specifically provided in Article 17 of this Contract, the provisions of 

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

996 hereafter acquired by the Agency or any user of such water within the Agency's Service Area. 

997 Any such water shall not be considered Project Water under this Contract. In addition, this 
Contract No. 14-06-200-3367A-LTR1 

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998 Contract shall not be construed as limiting or curtailing any rights which the Agency or any 

999 water user within the Agency's Service Area acquires or has available under any other contract 

1000 pursuant to Federal Reclamation law. 

1001 OPERATION AND MAINTENANCE BY OPERATING NON-FEDERAL ENTITY

1002 28. Omitted. 

1003 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

1004 29. The expenditure or advance of any money or the performance of any obligation of 

1005 the United States under this Contract shall be contingent upon appropriation or allotment of 

1006 funds. Absence of appropriation or allotment of funds shall not relieve the Agency from any 

1007 obligations under this Contract. No liability shall accrue to the United States in case funds are 

1008 not appropriated or allotted. 

1009 BOOKS, RECORDS, AND REPORTS

1010 30. (a) The Contractor shall establish and maintain accounts and other books and 

1011 records pertaining to administration of the terms and conditions of this Contract, including: the 

1012 Contractor's financial transactions, water supply data, and Project land and right-of-way 

1013 agreements; the water users' land-use (crop census), land ownership, land-leasing and water use 

1014 data; and other matters that the Contracting Officer may require. Reports thereon shall be 

1015 furnished to the Contracting Officer in such form and on such date or dates as the Contracting 

1016 Officer may require. Subject to applicable Federal laws and regulations, each party to this 

1017 Contract shall have the right during office hours to examine and make copies of the other party's 

1018 books and records relating to matters covered by this Contract. 

1019 

1020 (b) Notwithstanding the provisions of subdivision (a) of this Article, no 

1021 books, records, or other information shall be requested from the Agency by the Contracting 

1022 Officer unless such books, records, or information are reasonably related to the administration or 

1023 performance of this Contract. Any such request shall allow the Agency a reasonable period of 

1024 time within which to provide the requested books, records, or information. 

1025 (c) Omitted. 

1026 ASSIGNMENT LIMITED--SUCCESSORS AND ASSIGNS OBLIGATED

1027 31. (a) The provisions of this Contract shall apply to and bind the successors and 

1028 assigns of the parties hereto, but no assignment or transfer of this Contract or any right or interest 

1029 therein shall be valid until approved in writing by the Contracting Officer. 
Contract No. 14-06-200-3367A-LTR1 

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1030 (b) The assignment of any right or interest in this Contract by either party 

1031 shall not interfere with the rights or obligations of the other party to this Contract absent the 

1032 written concurrence of said other party. 

1033 (c) The Contracting Officer shall not unreasonably condition or withhold his 

1034 approval of any proposed assignment. 

1035 SEVERABILITY

1036 32. In the event that a person or entity who is neither (i) a party to a Project contract, 

1037 nor (ii) a person or entity that receives Project Water from a party to a Project contract, nor (iii) 

1038 an association or other form of organization whose primary function is to represent parties to 

1039 Project contracts, brings an action in a court of competent jurisdiction challenging the legality or 

1040 enforceability of a provision included in this Contract and said person, entity, association, or 

1041 organization obtains a final court decision holding that such provision is legally invalid or 

1042 unenforceable and the Agency has not intervened in that lawsuit in support of the plaintiff(s), the 

1043 parties to this Contract shall use their best efforts to (i) within 30 days of the date of such final 

1044 court decision identify by mutual agreement the provisions in this Contract which must be 

1045 revised, and (ii) within three months thereafter promptly agree on the appropriate revision(s). 

1046 The time periods specified above may be extended by mutual agreement of the parties. Pending 

1047 the completion of the actions designated above, to the extent it can do so without violating any 

1048 applicable provisions of law, the United States shall continue to make the quantities of Project 

1049 Water specified in this Contract available to the Agency pursuant to the provisions of this 

1050 Contract which were not found to be legally invalid or unenforceable in the final court decision. 

1051 RESOLUTION OF DISPUTES

1052 33. Should any dispute arise concerning any provisions of this Contract, or the 

1053 parties’ rights and obligations thereunder, the parties shall meet and confer in an attempt to 

1054 resolve the dispute. Prior to the Agency commencing any legal action, or the Contracting 

1055 Officer referring any matter to Department of Justice, the party shall provide to the other party 
Contract No. 14-06-200-3367A-LTR1 

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1056 30 days’ written notice of the intent to take such action; Provided, That such notice shall not be 

1057 required where a delay in commencing an action would prejudice the interests of the party that 

1058 intends to file suit. During the 30-day notice period, the Agency and the Contracting Officer 

1059 shall meet and confer in an attempt to resolve the dispute. Except as specifically provided, 

1060 nothing herein is intended to waive or abridge any right or remedy that the Agency or the United 

1061 States may have. 

1062 OFFICIALS NOT TO BENEFIT

1063 34. No Member of or Delegate to Congress, Resident Commissioner, or official of the 

1064 Contractor shall benefit from this Contract other than as a water user or landowner in the same 

1065 manner as other water users or landowners. 

1066 CHANGES IN CONTRACTOR’S SERVICE AREA

1067 35. (a) While this Contract is in effect, no change may be made in the 

1068 Contractor's Service Area, by inclusion or exclusion of lands, dissolution, consolidation, merger, 

1069 or otherwise, except upon the Contracting Officer's written consent. 

1070 (b) Within 30 days of receipt of a request for such a change, the Contracting 

1071 Officer will notify the Agency of any additional information required by the Contracting Officer 

1072 for processing said request, and both parties will meet to establish a mutually agreeable schedule 

1073 for timely completion of the process. Such process will analyze whether the proposed change is 

1074 likely to: (i) result in the use of Project Water contrary to the terms of this Contract; (ii) impair 

1075 the ability of the Agency to pay for Project Water furnished under this Contract or to pay for any 

1076 Federally-constructed facilities for which the Agency is responsible; and (iii) have an impact on 

1077 any Project Water rights applications, permits, or licenses. In addition, the Contracting Officer 

1078 shall comply with the NEPA and the ESA. The Agency will be responsible for all costs incurred 

1079 by the Contracting Officer in this process, and such costs will be paid in accordance with Article 

1080 25 of this Contract. 

1081 FEDERAL LAWS

1082 36. By entering into this Contract, the Agency does not waive its rights to contest the 

1083 validity or application in connection with the performance of the terms and conditions of this 
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1084 Contract of any Federal law or regulation; Provided, That the Agency agrees to comply with the 

1085 terms and conditions of this Contract unless and until relief from application of such Federal law 

1086 or regulation to the implementing provision of the Contract is granted by a court of competent 

1087 jurisdiction. 

1088 NOTICES

1089 37. Any notice, demand, or request authorized or required by this Contract shall be 

1090 deemed to have been given, on behalf of the Agency, when mailed, postage prepaid, or delivered 

1091 to the Area Manager, Bureau of Reclamation, Northern California Area Office, 16349 Shasta 

1092 Dam Boulevard, Shasta Lake, California 96019, and on behalf of the United States, when 

1093 mailed, postage prepaid, or delivered to the Shasta County Board of Supervisors, c/o of the 

1094 Shasta County Water Agency, 1855 Placer Street, Redding, California 96001. The designation 

1095 of the addressee or the address may be changed by notice given in the same manner as provided 

1096 in this Article for other notices. 

1097 CONFIRMATION OF CONTRACT

1098 38. The Contractor, after the execution of this Contract, shall furnish to the Contracting 

1099 Officer evidence that pursuant to the laws of the State of California, the Contractor is a legally 

1100 constituted entity and the contract is lawful, valid, and binding on the Contractor. This Contract 

1101 shall not be binding on the United States until such evidence has been provided to the 

1102 Contracting Officer’s satisfaction. 

1103 RESALE OF WATER

1104 39. The Agency may enter into contracts with Subcontractors for the resale and 

1105 distribution of water furnished pursuant to this Contract within the Agency=s Service Area. Each 

1106 such Subcontractor shall be subject to the obligations and limitations imposed, and to the rights 

1107 granted, by this Contract and shall so provide. The terms and conditions of each subcontract 

1108 shall be approved by the Contracting Officer prior to the execution of such subcontract, which 

1109 approval shall be limited to a determination that the subcontract is consistent with the provisions 

1110 of this Contract. Nothing herein or therein contained shall be deemed in any way to release the 

1111 Contractor from its primary liability to the United States hereunder with respect to each and all 

1112 of the obligations undertaken by the Contractor in this Contract. 
Contract No. 14-06-200-3367A-LTR1 

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1113 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of 

1114 the day and year first above written. 

1115 THE UNITED STATES OF AMERICA 

1116 By: ______________________________________ 

1117 Regional Director, Mid-Pacific Region 

1118 Bureau of Reclamation 

1119 SHASTA COUNTY WATER AGENCY 

1120 By: ______________________________________ 

1121 Chairman, Board of Directors 

1122 Attest: 

1123 By: _______________________________ 

1124 County Clerk and Ex-Officio Clerk 

1125 of the Board of Directors 

1126 (I:\LTRC\Draft LTRC\04-19-2004 Shasta County Water Agency LTRC Final Draft 

1127 Contract.doc) 
Contract No. 14-06-200-3367A-LTR1 

EXHIBIT A

[Map or Description of Contractor’s Service Area]
Contract No.14-06-200-3367A-LTR1 

EXHIBIT B 

2004 Water Rates and Charges

Shasta County Water Agency – Sacramento River, Shasta & Trinity River Divisions

M&I COST OF SERVICE RATES: Shasta Spring Creek 

 Reservoir Conduit 

 Capital Rate: $ 8.62 $ 9.27 

 O&M Rates: 

Water Marketing 5.01 5.01 

Storage 6.38 6.38 

 Deficit Rate: 10.02 5.51 

 CFO/PRF Adjustment Rate 1/ 1.37 1.83

 TOTAL $31.40 $28.01

M&I FULL COST RATE: $36.80 $34.77

CHARGES UNDER P.L. 102-575 TO THE

RESTORATION FUND 2/ 

 Restoration Payments (3407(d)(2)(A)) $15.64 $15.64

1/ Chief Financial Officer (CFO) adjustment and Provision for Replacement (PFR) expense is 

being distributed over a 5-year period beginning in FY 2003 for those contractors that requested 

those costs be deferred. 

2/ Restoration fund charges are payments in addition to the water rates and were determined 

pursuant to Title XXXIV of Public Law 102-575. Restoration fund charges are on a fiscal year 

basis (10/1 - 9/30).