Irrigation and M&I 

 

Contract No. I1r-1460D 

UNITED STATES 

DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

Central Valley Project, California 

CONTRACT BETWEEN THE UNITED STATES

AND

SOUTHERN SAN JOAQUIN MUNICIPAL UTILITY DISTRICT

PROVIDING FOR PROJECT WATER SERVICE 

FROM FRIANT DIVISION AND 

FOR FACILITIES REPAYMENT

Table of Contents

Article No. Title Page No.

 Preamble 

 Explanatory Recitals 

1 Definitions 

2 Effective Date of Contract 

3 Water to be Made Available and Delivered to the Contractor 

4 Time for Delivery of Water 

5 Point of Diversion and Responsibility for Distribution of Water 

6 Measurement of Water within the Service Area 

7 Rates, Method of Payment for Water, and Accelerated Repayment of Facilities 

8 Non-Interest Bearing Operation and Maintenance Deficits 

9 Recovered Water Account 

10 Sales, Transfers, and Exchanges of Water 

11 Application of Payments and Adjustments 

12 Temporary Reductions--Return Flows 

13 Constraints on the Availability of Water 

14 Unavoidable Groundwater Percolation 

15 Acreage Limitation 

16 Compliance With Federal Reclamation Laws 

17 Protection of Water and Air Quality 

18 Water Acquired By the Contractor Other Than From the United States 

19 Opinions and Determinations 

20 Coordination and Cooperation 

21 Charges for Delinquent Payments 

22 Equal Employment Opportunity 
23 General Obligation--Benefits Conditioned Upon Payment 

24 Compliance with Civil Rights Laws and Regulations 

25 Privacy Act Compliance 

26 Contractor to Pay Certain Miscellaneous Costs 

27 Water Conservation 

28 Existing or Acquired Water or Water Rights 

29 Operation and Maintenance by Operating Non-Federal Entity 

30 Contingent on Appropriation or Allotment of Funds 

31 Books, Records, and Reports 

32 Assignment Limited--Successors and Assigns Obligated 

33 Severability 

34 Resolution of Disputes 

35 Officials Not to Benefit 

36 Changes in Contractor's Service Area 

37 Federal Laws 

38 Emergency Reserve Fund

39 Medium for Transmitting Payment 

40 Notices 

41 Confirmation of Contract 

42 Contract Drafting Considerations 

 Signature Page 

 Exhibit A Contractor’s Map or Description of Service Area 

 Exhibit B Rates and Charges 

 Exhibit C-1 Repayment Schedule – Lump Sum Option 

 Exhibit C-2 Repayment Schedule – Installment Option 

 Exhibit D Computation of the Friant Surcharge 

 Exhibit E Restated Contract 

 
Contract No. I1r-1460D 

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UNITED STATES 

DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

Central Valley Project, California 

5 CONTRACT BETWEEN THE UNITED STATES

6 AND

7 SOUTHERN SAN JOAQUIN MUNICIPAL UTILITY DISTRICT

8 PROVIDING FOR PROJECT WATER SERVICE 

9 FROM FRIANT DIVISION AND 

10 FACILITIES REPAYMENT

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 THIS CONTRACT, made this _____ day of ____________________, 2010, is entered into 

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

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

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

483), June 21, 1963 (77 Stat. 68), October 12, 1982 (96 Stat. 1262), October 27, 1986 (100 Stat. 

3050), as amended, Title XXXIV of the Act of October 30, 1992 (106 Stat. 4706), and Title X, 

Subtitle A, of the Act of March 30, 2009 (123 Stat. 1349), also referred to as the San Joaquin River 

Restoration Settlement Act hereinafter referred to as SJRRSA, all collectively hereinafter referred to 

as Federal Reclamation law, between THE UNITED STATES OF AMERICA, hereinafter referred to 

as the United States and SOUTHERN SAN JOAQUIN MUNICIPAL UTILITY DISTRICT, 

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

existing, and acting pursuant to the laws thereof, with its principal place of business in California; 

 WITNESSETH, That 

24 EXPLANATORY RECITALS

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

Project, California, for diversion, storage, carriage, distribution and beneficial use, for flood control, 
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irrigation, municipal, domestic, industrial, fish and wildlife mitigation, protection and restoration, 

generation and distribution of electric energy, salinity control, navigation and other beneficial uses, of 

waters of the Sacramento River, the American River, the Trinity River, and the San Joaquin River 

and their tributaries; and 

[2nd] WHEREAS, the United States constructed Friant Dam (thereby creating Millerton 

Lake) and the Friant-Kern and Madera Canals, hereinafter collectively referred to as the Friant 

Division Facilities, which will be used in part for the furnishing of water to the Contractor pursuant to 

the terms of this Contract; and 

 [3rd] WHEREAS, the United States and the Contractor entered into Contract Number I1r1460, as amended, which established terms for the delivery to the Contractor of Project Water from 

the Friant Division from October 18, 1945 through February 28, 1991; and 

 [4th] WHEREAS, the Contractor and the United States have entered into a renewal contract 

and, pursuant to subsection 3404(c)(1) of the Central Valley Project Improvement Act (CVPIA), 

subsequently entered into an interim renewal contract(s), identified as Contract Number (s) I1r1460R and I1r-1460-IR1, which provided for the continued water service to Contractor from March 

1, 1991 through February 28, 2001, and subsequently entered into a long-term renewal contract 

identified as Contract Number I1r-1460-LTR1, which provided for continued water service to 

Contractor through February 28, 2026, which was amended January 18, 2007, and is herein referred 

to as the "Existing Contract”; and 

 [5th] WHEREAS, pursuant to Section 8 of the Act of June 17, 1902 (32 Stat. 388), the 

United States has acquired water rights and other rights to the flows of the San Joaquin River, 
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including without limitation the permits issued as the result of Decision 935 by the California State 

Water Resource Control Board and the contracts described in subdivision (n) of Article 3 of this 

Contract, pursuant to which the Contracting Officer develops, diverts, stores and delivers Project 

Water stored or flowing through Millerton Lake in accordance with State and Federal law for the 

benefit of Project Contractors in the Friant Division and for other specified Project purposes; and 

 [6th] WHEREAS, the water supplied to the Contractor pursuant to this Contract is Project 

Water developed through the exercise of the rights described in the fifth (5th) Explanatory Recital of 

this Contract; and 

 [7th] WHEREAS, as a result of litigation entitled “Natural Resources Defense Council, et 

al. v Kirk Rogers, et al.” No. CIV-S-88-1658LLK/GGH, certain contractors from the Friant Division 

entered into a Stipulation of Settlement dated September 13, 2006, (the “Settlement”), which 

settlement prescribes a Restoration Goal and a Water Management Goal and which Settlement was 

subsequently confirmed and implemented through the SJRRSA; and 

[8th] WHEREAS, the SJRRSA authorizes and directs the Secretary to convert the Existing 

Contract to a repayment contract under subsection (d) of Section 9 of the Act of August 4, 1939, no 

later than December 31, 2010, and further directs that such contract shall require the accelerated 

repayment of the Contractors’ allocated share of construction costs, either as a lump sum payment by 

January 31, 2011 or in annual installments by January 31, 2014, which funds will in turn be made 

available for implementation of the Settlement and SJRRSA, and which costs otherwise would have 

been payable through annual water rates, with full repayment by 2030; and 
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[9th] WHEREAS, such repayment of costs will assist the United States with 

implementation of actions required under the Settlement and the SJRRSA and provide the Contractor 

the benefits provided in Section 10010 of the SJRRSA; and 

[10th] WHEREAS, subsection (4) of Section 1 of the Act of July 2, 1956 (1956 Act) directs 

the Secretary to provide that the other party to any contract entered into pursuant to subsection (d) of 

Section 9 of the Act of August 4, 1939 (repayment contract) or pursuant to subsection (e) of Section 9 

of the Act of August 4, 1939 (water service contract) shall “have the first right (to which the rights of 

the holders of any other type of irrigation water contract shall be subordinate)to a stated share or 

quantity of the project’s available water supply for beneficial use on the irrigable lands within the 

boundaries of, or owned by, the party and a permanent right to such share or quantity upon 

completion of payment of the amount assigned for ultimate return” by the contractor subject to 

fulfillment of all obligations under the contract; and 

 [11th] WHEREAS, among other things, this Contract includes provisions granting the 

Contractor the permanent right described in the tenth (10th) Explanatory Recital; and 

 [12th] WHEREAS, the Contractor has demonstrated to the satisfaction of the Contracting 

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

beneficial use and/or has demonstrated projected future demand for water use such that the 

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

of Project Water to be made available to it pursuant to this Contract; and 
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 [13th] WHEREAS, water obtained from the Central Valley Project has been relied upon by 

urban and agricultural areas within California for more than fifty (50) years and is considered by the 

Contractor as an essential portion of its water supply; and 

 [14th] WHEREAS, the economies of regions within the Central Valley Project, including the 

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

Central Valley Project; and 

 [15th] WHEREAS, the Secretary intends through coordination, cooperation, and partnerships 

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

Project purposes; and 

 [16th] WHEREAS, the mutual goals of the United States and the Contractor include: to 

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

the Central Valley Project as required by law; to guard reasonably against Project Water shortages; to 

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

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

States relative to the Central Valley Project; and 

 [17th] WHEREAS, any time during the Year the Contracting Officer determines that a need 

exists to evacuate water from Millerton Lake in order to prevent or minimize spill or to meet flood 

control criteria (currently referred to as “uncontrolled season”), taking into consideration, among 

other things, anticipated upstream reservoir operations and the most probable forecast of snowmelt 

and runoff projections for the upper San Joaquin River, Friant Division Project Contractors utilize a 

portion of their undependable Class 2 Water in their service areas to, among other things, assist in the 
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management and alleviation of groundwater overdraft in the Friant Division service area, provide 

opportunities for restoration of the San Joaquin River below Friant Dam, minimize flooding along the 

San Joaquin River, encourage optimal water management, and maximize the reasonable and 

beneficial use of the water; and 

 [18th] WHEREAS, the parties desire and intend that this Contract not provide a disincentive 

to the Friant Division Project Contractors continuing to carry out the beneficial activities set out in 

the Explanatory Recital immediately above; and 

 [19th] WHEREAS, the United States has determined that the Contractor has fulfilled all of 

its obligations under the Existing Contract. 

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

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

119 DEFINITIONS

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

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

 (a) “Additional Capital Obligation” shall mean any additional construction costs 

or other capitalized costs incurred after the effective date of this Contract or not reflected in the 

Existing Capital Obligation as provided in Section 10010(a)(3)(B) of the SJRRSA and any amounts 

payable by Contractor as determined through the final adjustment described and required by Section 

10010(b) of the SJRRSA; 

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

dates inclusive; 
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 (c) “Charges” shall mean the payments required by Federal Reclamation law in 

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

annually by the Contracting Officer pursuant to this Contract and consistent with the SJRRSA; 

 (d) "Class 1 Water" shall mean that supply of water stored in or flowing through 

Millerton Lake which, subject to the contingencies hereinafter described in Articles 3, 12, and 13 of 

this Contract, will be available for delivery from Millerton Lake and the Friant-Kern and Madera 

Canals as a dependable water supply during each Year; 

 (e) "Class 2 Water" shall mean that supply of water which can be made available 

subject to the contingencies hereinafter described in Articles 3, 12, and 13 of this Contract for 

delivery from Millerton Lake and the Friant-Kern and Madera Canals in addition to the supply of 

Class 1 Water. Because of its uncertainty as to availability and time of occurrence, such water will 

be undependable in character and will be furnished only if, as, and when it can be made available as 

determined by the Contracting Officer; 

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

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

Total; 

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

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

regulation; 

 (h) "Contract Total" shall mean the maximum amount of Class 1 Water plus the 

maximum amount of Class 2 Water specified in subdivision (a) of Article 3 of this Contract and is the 
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stated share or quantity of the Project’s available water supply to which the Contractor will have a 

permanent right in accordance with the 1956 Act and the terms of this Contract, upon the Contractor's 

complete payment of the Repayment Obligation, notwithstanding any Additional Capital Obligation 

that may later be established, which right shall not be disturbed so long as the Contractor fulfills all of 

its obligations under this Contract; 

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

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

which may be modified from time to time in accordance with Article 36 of this Contract without 

amendment of this Contract; 

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

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

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

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

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

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

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

Reclamation law; 

(m) “Existing Capital Obligation” shall mean the remaining amount of construction 

costs of the Contractor identified in the Central Valley Project Irrigation Water Rates and/or 

Municipal and Industrial Water Rates, respectively, dated January 25, 2007, as adjusted to reflect 

payments not reflected in such schedule, pursuant to Section 10010(a)(3)(A) of the SJRRSA. The 
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Contracting Officer has computed the Existing Capital Obligation in a manner consistent with the 

SJRRSA and such amount is set forth in Exhibits “C-1” and “C-2”, incorporated herein by reference; 

 (n) “Financing Costs”, for purposes of computing the reduction of certain charges 

as specified in subdivision (c) of Article 7 of this Contract, shall mean the difference between the net 

present value of the Existing Capital Obligation discounted using the full Treasury rate and the 

Existing Capital Obligation discounted using one-half the Treasury Rate, as set forth in Section 

10010(d)(3) of the SJRRA; 

 (o) “Full Cost Rate” shall mean that water rate described in Sections 205(a)(3) or 

202(3) of the RRA, whichever is applicable;

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

delivered in accordance with Section 204 of the RRA; 

 (q) “Irrigation Full Cost Water Rate” shall have the same meaning as “full cost” as 

that term is used in Paragraph (3) of Section 202 of the RRA; 

 (r) “Irrigation Water” shall mean water made available from the Project that is 

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

thereto, and watering of livestock; 

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

nonexempt land, as provided in 43 CFR 426.2; 

 (t) “Long Term Historic Average” shall mean the average of the final forecast of 

Water Made Available to the Contractor pursuant to this Contract and the contracts referenced in the 

third (3rd) and fourth (4th) Explanatory Recitals of this Contract; 
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 (u) “Municipal and Industrial (M&I) Water” shall mean water made available 

from the Project other than Irrigation Water made available to the Contractor. M&I Water shall 

include water used for human use and purposes such as the watering of landscaping or pasture for 

animals (e.g., horses) which are kept for personal enjoyment or water delivered to land holdings 

operated in units of less than five (5) acres unless the Contractor establishes to the satisfaction of the 

Contracting Officer that the use of water delivered to any such landholding is a use described in 

subdivision (r) of this Article of this Contract; 

 (v) “M&I Full Cost Water Rate” shall mean the annual rate, which, as determined 

by the Contracting Officer, shall amortize the expenditures for construction allocable to Project M&I 

facilities in service, including, O&M deficits funded, less payments, over such periods as may be 

required under Federal Reclamation law with interest accruing from the dates such costs were first 

incurred plus the applicable rate for the O&M of such Project facilities. Interest rates used in the 

calculation of the M&I Full Cost Rate shall comply with the Interest Rate methodology contained in 

Section 202(3) (B) and (C) of the RRA; 

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

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

Project facilities; 

 (x) “Operating Non-Federal Entity" shall mean the Friant Water Authority, or its 

successor, a Non-Federal entity, which has the obligation to operate and maintain all or a portion of 

the Friant Division Facilities pursuant to an agreement with the United States and which may have 

funding obligations with respect thereto; 
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 (y) Omitted. 

 (z) “Project” shall mean the Central Valley Project owned by the United States 

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

 (aa) “Project Contractors” shall mean all parties who have a long-term water 

service contract or repayment contract for Project Water from the Project with the United States 

pursuant to Federal Reclamation law; 

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

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

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

 (cc) “Rates” shall mean the payments for O&M costs as determined annually by the 

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

Project, as described in subdivision (a) of Article 7 of this Contract and illustrated in Exhibit “B”, 

attached hereto; 

 (dd) “Recovered Water Account” shall mean the program, as defined in the 

Settlement, to make water available to all of the Friant Division Project Contractors who provide 

water to meet interim flows or restoration flows for the purpose of reducing or avoiding the impact of 

the interim flows and restoration flows on such contractors; 

 (ee) “Repayment Obligation”, as provided in subdivision (a)(2)(A) of Article 7 of 

this Contract, shall be the Existing Capital Obligation, as defined herein, discounted by one-half of 

the Treasury rate and computed consistent with the provisions of Section 10010(3)(A) of the 
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SJRRSA to be paid as either a lump sum payment by January 31, 2011 or in approximately equal 

annual installments by January 31, 2014; 

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

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

through any agency of the Department of the Interior; 

 (gg) “Settlement” shall mean the Stipulation of Settlement dated September 13, 

2006, the Order Approving Stipulation of Settlement, and the Judgment and further orders issued by 

the Court pursuant to the terms and conditions of the Settlement in Natural Resources Defense 

Council, et al. v. Rodgers, et al., No. CIV-S-88-1658 LLJ/GGH; 

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

each acre-foot of Water Delivered as described in subdivision (l)(1) of Article 7 of this Contract; 

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

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

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

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

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

 (kk) “Water Management Goal” shall mean the goal of the Settlement to reduce or 

avoid adverse water supply impacts to all the Friant Division Project Contractors that may result from 

the interim flows and restoration flows provided for in the Settlement; 
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 (ll) “Water Scheduled” shall mean Project Water made available to the Contractor 

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

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

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

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

257 EFFECTIVE DATE OF CONTRACT

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2. (a) This Contract shall become effective on the date first hereinabove written and 

shall continue so long as the Contractor is making the annual payments required herein and paying 

any other amounts owing under this Contract and applicable law, unless it is terminated by the 

Contracting Officer by reason of a material uncured breach by the Contractor; Provided, That the 

Contracting Officer shall not seek to terminate this Contract by reason of an asserted material 

uncured breach by the Contractor unless it has first provided at least sixty (60) days written notice of 

the asserted breach to the Contractor and the Contractor has failed to cure such breach (or to 

diligently commence curative actions satisfactory to the Contracting Officer for a breach that cannot 

be fully cured within sixty (60) days) within the sixty (60)-day notice period; 

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Provided further, That 

this Contract may be terminated at any time by mutual consent of the parties hereto. 

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(b) Upon complete payment of the Repayment Obligation by the Contractor, and 

notwithstanding any Additional Capital Obligation that may later be established, the Tiered Pricing 

Component as that term is utilized in this Contract, the acreage limitations, reporting, and Full Cost 

pricing provisions of Federal Reclamation law, and subdivisions (k), (l), (o) through (q), (s), and (v) 

of Article 1, subdivisions (a)(2)(A), (l)(1), (l)(2), and (l)(3) of Article 7, Article 14, subdivision (a) of 
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Article 18, and Article 25, all of this Contract, shall no longer be applicable to the Contractor. Upon 

complete payment of the Repayment Obligation by the Contractor, and notwithstanding any 

Additional Capital Obligation that may later be established, the terms of this Contract shall be as 

provided in the restated contract attached hereto as Exhibit “E”, which has been prepared solely as a 

matter of administrative convenience. Exhibit “E” makes no substantive revisions other than those 

required by this subdivision of this Article of this Contract. Accordingly, upon complete payment of 

the Repayment Obligation by the Contractor, and notwithstanding any Additional Capital Obligation 

that may later be established, the parties shall refer to Exhibit “E” as their entire agreement under this 

Contract. 

 (c) This Contract supersedes in its entirety and is intended to replace in full the 

Existing Contract; Provided, That if this Contract is terminated or determined to be invalid or 

unenforceable for any reason other than a material uncured breach of this Contract by the Contractor, 

the Existing Contract shall not be superseded and shall be in full force and effect. 

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286 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE CONTRACTOR

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

and licenses, Federal law, the Settlement including the SJRRSA, and subject to the provisions set 

forth in Articles 12 and 13 of this Contract, the Contracting Officer shall make available for delivery 

to the Contractor from the Project 97,000 acre-feet of Class 1 Water and 50,000 acre-feet of Class 2 

Water for irrigation and M&I purposes. The quantity of Water Delivered to the Contractor in 

accordance with this subdivision shall be scheduled and paid for pursuant to the provisions of 

Articles 4 and 7 of this Contract. 
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(b) Upon complete payment of the Repayment Obligation by the Contractor, and 

notwithstanding any Additional Capital Obligation that may later be established, the Contractor shall 

have a permanent right to the Contract Total in accordance with the 1956 Act and the terms of this 

Contract. This right shall not be disturbed so long as the Contractor fulfills all of its obligations 

hereunder. The quantity of water made available for delivery in any given Year shall remain subject 

to the terms and conditions of subdivision (a) of this Article of this Contract. 

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

legal requirements. 

 (d) The Contractor shall make reasonable and beneficial use of all Project Water 

or other water furnished pursuant to this Contract. Groundwater recharge programs, groundwater 

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

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

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

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

described in the Contractor’s Water Conservation Plan submitted pursuant to Article 27 of this 

Contract; 

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Provided further, That such Water Conservation Plan demonstrates sufficient lawful uses 

exist in the Contractor’s Service Area so that using a long-term average, the quantity of Delivered 

Water is demonstrated to be reasonable for such uses and in compliance with Federal Reclamation 

law. Groundwater recharge programs, groundwater banking programs, surface water storage 

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

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

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

Water rights, and Project operational concerns. The Contracting Officer will address such concerns 

in regulations, policies, or guidelines. 

 (e) The Contractor, through this Contract, shall comply with requirements 

applicable to the Contractor in biological opinion(s) prepared as a result of the consultation regarding 

the execution of the Existing Contract undertaken pursuant to Section 7 of the Endangered Species 

Act of 1973, as amended, as well as the requirements of any other biological opinions applicable to 

Project Water delivery under this Contract, that are within the Contractor’s legal authority to 

implement. The Contractor shall comply with the limitations or requirements imposed by 

environmental documentation applicable to the Contractor and within its legal authority to implement 

regarding specific activities, including conversion of Irrigation Water to M&I Water. Nothing herein 

shall be construed to prevent the Contractor from challenging or seeking judicial relief in a court of 

competent jurisdiction with respect to any biological opinion or other environmental documentation 

referred to in this Article of this Contract. 

(f) Subject to subdivisions (l) and (n) of this Article of this Contract, following the 

declaration of Water Made Available under Article 4 of this Contract, the Contracting Officer will 

make a determination whether Project Water, or other water available to the Project, can be made 

available to the Contractor in addition to the Contract Total in this Article of this Contract during the 

Year without adversely impacting the Project or other Project Contractors and consistent with the 

Secretary’s legal obligations. At the request of the Contractor, the Contracting Officer will consult 

with the Contractor prior to making such a determination. Subject to subdivisions (l) and (n) of this 
Contract No. I1r-1460D 

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Article of this Contract, if the Contracting Officer determines that Project Water, or other water 

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

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

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

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

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

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

and policies. 

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

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

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

quantity of Project Water which may be made available by the United States to the Contractor during 

the subsequent Year referred to as “pre-use.” The Contracting Officer’s written approval may permit 

such uses in accordance with applicable statutes, regulations, guidelines, and policies. 

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

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

not be disturbed so long as the Contractor shall fulfill all of its obligations under this Contract. 

Nothing in the preceding sentence shall affect the Contracting Officer’s ability to impose shortages 

under Article 12 or subdivision (b) of Article 13 of this Contract. 

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

delivered for purposes other than those described in subdivisions (r) and (u) of Article 1 of this 
Contract No. I1r-1460D 

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

conditions of such approval. 

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

rights and other rights described in the fifth (5th) Explanatory Recital of this Contract and to provide 

the water available under this Contract. The Contracting Officer shall not object to participation by 

the Contractor, in the capacity and to the extent permitted by law, in administrative proceedings 

related to the water rights and other rights described in the fifth (5th) Explanatory Recital of this 

Contract; Provided however, That the Contracting Officer retains the right to object to the substance 

of the Contractor’s position in such a proceeding. 

364 

Provided further, that in such proceedings the 

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

use Project Water. 

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 (k) Project Water furnished to the Contractor during any month designated in a 

schedule or revised schedule submitted by the Contractor and approved by the Contracting Officer 

shall be deemed to have been accepted by the Contractor as Class 1 Water to the extent that Class 1 

Water is called for in such schedule for such month and shall be deemed to have been accepted as 

Class 2 Water to the extent Class 2 Water is called for in such schedule for such month. If in any 

month the Contractor diverts a quantity of water in addition to the total amount of Class 1 Water and 

Class 2 Water set forth in the Contractor's approved schedule or revised schedule for such month, 

such additional diversions shall be charged first against the Contractor's remaining Class 2 Water 

supply available in the current Year. To the extent the Contractor's remaining Class 2 Water supply 

available in the current Year is not sufficient to account for such additional diversions, such 
Contract No. I1r-1460D 

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additional diversions shall be charged against the Contractor's remaining Class 1 Water supply 

available in the current Year. To the extent the Contractor's remaining Class 1 Water and Class 2 

Water supplies available in the current Year are not sufficient to account for such additional 

diversions, such additional diversions shall be charged first against the Contractor's available Class 2 

Water supply and then against the Contractor's available Class 1 Water supply, both for the following 

Year. Payment for all additional diversions of water shall be made in accordance with Article 7 of 

this Contract. 

 (l) If the Contracting Officer determines there is a Project Water supply available 

at Friant Dam as the result of an unusually large water supply not otherwise storable for Project 

purposes or infrequent and otherwise unmanaged flood flows of short duration, such water will be 

made available to the Contractor and others under Section 215 of the Act of October 12, 1982,

pursuant to the priorities specified below if the Contractor enters into a temporary contract with the 

United States not to exceed one (1) year for the delivery of such water or as otherwise provided for in 

Federal Reclamation law and associated regulations. Such water may be identified by the Contractor 

either (i) as additional water to supplement the supply of Class 1 Water and/or Class 2 Water made 

available to it pursuant to this Contract or, (ii) upon written notification to the Contracting Officer, as 

water to be credited against the Contractor's Class 2 Water supply available pursuant to this Contract. 

The Contracting Officer shall make water determined to be available pursuant to this subsection 

according to the following priorities: first, to contractors for Class 1 Water and/or Class 2 Water 

within the Friant Division; second, to contractors in the Cross Valley Division of the Project. The 

Contracting Officer will consider requests from other parties for Section 215 Water for use within the 
Contract No. I1r-1460D 

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area identified as the Friant Division service area in the environmental assessment developed in 

connection with the execution of the Existing Contract. 

 (m) Nothing in this Contract, nor any action or inaction of the Contractor or 

Contracting Officer in connection with the implementation of this Contract, is intended to override, 

modify, supersede or otherwise interfere with any term or condition of the water rights and other 

rights referred in the fifth (5th) Explanatory Recital of this Contract. 

 (n) The rights of the Contractor under this Contract are subject to the terms of the 

contract for exchange waters, dated July 27, 1939, between the United States and the San Joaquin and 

Kings River Canal and Irrigation Company, Incorporated, et al., (hereinafter referred to as the 

Exchange Contractors), Contract No. I1r-1144, as amended. The United States agrees that it will not 

deliver to the Exchange Contractors thereunder waters of the San Joaquin River unless and until 

required by the terms of said contract, and the United States further agrees that it will not voluntarily 

and knowingly determine itself unable to deliver to the Exchange Contractors entitled thereto from 

water that is available or that may become available to it from the Sacramento River and its 

tributaries or the Sacramento-San Joaquin Delta those quantities required to satisfy the obligations of 

the United States under said Exchange Contract and under Schedule 2 of the Contract for Purchase of 

Miller and Lux Water Rights (Contract I1r-1145, dated July 27, 1939). 

 (o) Pursuant to and consistent with section 10004 of SJRRSA and Paragraph 16 of 

the Settlement, the Contracting Officer is required to develop and implement a plan for recirculation, 

recapture, reuse, exchange or transfer of water released for restoration flows or interim flows, as 

those terms are defined in the Settlement, to reduce or avoid impacts to water deliveries caused by 
Contract No. I1r-1460D 

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said restoration flows or interim flows. Water developed through such activities may be made 

available (i) to the Contractor without the need of an additional contract, and/or (ii) to others on 

behalf of the Contractor under terms mutually acceptable to the Contractor and the Contracting 

Officer that are consistent with the Water Management Goal. 

424 TIME FOR DELIVERY OF WATER

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

announce the Contracting Officer’s initial declaration of the Water Made Available. The declaration 

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

hydrologic conditions and a new declaration with changes, if any, to the Water Made Available will 

be made. The Contracting Officer shall provide forecasts of Project operations and the basis of the 

estimate, with relevant supporting information, upon the written request of the Contractor. 

Concurrently with the declaration of the Water Made Available, the Contracting Officer shall provide 

the Contractor with the updated Long Term Historic Average. The declaration of Project operations 

will be expressed in terms of both Water Made Available and the Long Term Historic Average. 

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

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

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

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

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

for the Year commencing on such March 1. 
Contract No. I1r-1460D 

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

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

Service Area, or to sell, transfer or exchange pursuant to Article 10 of this Contract or bank pursuant 

to subdivision (d) of Article 3 of this Contract during any Year. 

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

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

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

revision(s), satisfactory to the Contracting Officer, thereto submitted within a reasonable time prior to 

the date(s) on which the requested change(s) is/are to be implemented; Provided, That the total 

amount of water requested in that schedule or revision does not exceed the quantities announced by 

the Contracting Officer pursuant to the provisions of subdivision (a) of Article 3 of this Contract, and 

the Contracting Officer determines that there will be sufficient capacity available in the appropriate 

Friant Division Facilities to deliver the water in accordance with that schedule; 

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451 

Provided further, 

That the Contractor shall not schedule the delivery of any water during any period as to which the 

Contractor is notified by the Contracting Officer or Operating Non-Federal Entity that Project 

facilities required to make deliveries to the Contractor will not be in operation because of scheduled 

O&M. 

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 (e) The Contractor may, during the period from and including November 1 of each 

Year through and including the last day of February of that Year, request delivery of any amount of 

the Class 1 Water estimated by the Contracting Officer to be made available to it during the following 

Year. The Contractor may, during the period from and including January 1 of each Year (or such 
Contract No. I1r-1460D 

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earlier date as may be determined by the Contracting Officer) through and including the last day of 

February of that Year, request delivery of any amount of Class 2 Water estimated by the Contracting 

Officer to be made available to it during the following Year. Such water shall hereinafter be referred 

to as pre-use water. Such request must be submitted in writing by the Contractor for a specified 

quantity of pre-use and shall be subject to the approval of the Contracting Officer. Payment for preuse water so requested shall be at the appropriate Rate(s) for the following Year in accordance with 

Article 7 of this Contract and shall be made in advance of delivery of any pre-use water. The 

Contracting Officer shall deliver such pre-use water in accordance with a schedule or any revision 

thereof submitted by the Contractor and approved by the Contracting Officer, to the extent such water 

is available and to the extent such deliveries will not interfere with the delivery of Project Water 

entitlements to other Friant Division contractors or the physical maintenance of the Project facilities. 

The quantities of pre-use Water Delivered pursuant to this subdivision shall be deducted from the 

quantities of water that the Contracting Officer would otherwise be obligated to make available to the 

Contractor during the following Year; Provided, That the quantity of pre-use water to be deducted 

from the quantities of either Class 1 Water or Class 2 Water to be made available to the Contractor in 

the following Year shall be specified by the Contractor at the time the pre-use water is requested or as 

revised in its first schedule for the following Year submitted in accordance with subdivision (b) of 

this Article of this Contract, based on the availability of the following Year water supplies as 

determined by the Contracting Officer. 

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Contract No. I1r-1460D 

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481 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

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

Contract shall be delivered to the Contractor at a point or points of delivery either on Project facilities 

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

Contractor. 

 (b) The Contracting Officer, the Operating Non-Federal Entity, or other 

appropriate entity shall make all reasonable efforts to maintain sufficient flows and levels of water in 

the Friant-Kern Canal to deliver Project Water to the Contractor at specific turnouts established 

pursuant to subdivision (a) of this Article of this Contract. 

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

Service Area unless approved in advance by the Contracting Officer. Until complete payment of the 

Repayment Obligation by the Contractor, and notwithstanding any Additional Capital Obligation that 

may later be established, the Contractor shall deliver Project Water in accordance with applicable 

acreage limitations, reporting, and Full Cost pricing provisions of Federal Reclamation law and any 

applicable land classification provisions of the associated regulations. 

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

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

States, the Operating Non-Federal Entity or other appropriate entity as designated by the Contracting 

Officer (hereafter “other appropriate entity”) at the point or points of delivery established pursuant to 

subdivision (a) of this Article of this Contract. Upon the request of either party to this Contract, the 

Contracting Officer shall investigate, or cause to be investigated by the responsible Operating Non-
Contract No. I1r-1460D 

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Federal Entity, the accuracy of such measurements and shall take any necessary steps to adjust any 

errors appearing therein. For any period of time when accurate measurements have not been made, 

the Contracting Officer shall consult with the Contractor and the responsible Operating Non-Federal 

Entity prior to making a final determination of the quantity delivered for that period of time. 

 (e) Neither the Contracting Officer nor any Operating Non-Federal Entity shall be 

responsible for the control, carriage, handling, use, disposal, or distribution of Project Water 

Delivered to the Contractor pursuant to this Contract beyond the delivery points specified in 

subdivision (a) of this Article of this Contract. The Contractor shall indemnify the United States, its 

officers, employees, agents, and assigns on account of damage or claim of damage of any nature 

whatsoever for which there is legal responsibility, including property damage, personal injury, or 

death arising out of or connected with the control, carriage, handling, use, disposal, or distribution of 

such Project Water beyond such delivery points, except for any damage or claim arising out of: (i) 

acts or omissions of the Contracting Officer or any of its officers, employees, agents, or assigns, 

including any responsible Operating Non-Federal Entity, with the intent of creating the situation 

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

officers, employees, agents, or assigns, including any responsible Operating Non-Federal Entity; (iii) 

negligence of the Contracting Officer or any of its officers, employees, agents, or assigns including 

any responsible Operating Non-Federal Entity; or (iv) damage or claims resulting from a malfunction 

of facilities owned and/or operated by the United States or responsible Operating Non-Federal Entity; 

Provided, That the Contractor is not the Operating Non-Federal Entity that owned or operated the 

malfunctioning facility(ies) from which the damage claim arose. 

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Contract No. I1r-1460D 

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523 MEASUREMENT OF WATER WITHIN THE SERVICE AREA

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 6. (a) The Contractor has established a measurement program satisfactory to the 

Contracting Officer; all surface water delivered for irrigation purposes within the Contractor’s 

Service Area is measured at each agricultural turnout; and water delivered for municipal and 

industrial purposes is measured at each municipal and industrial service connection. The water 

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

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

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

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

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

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

for municipal and industrial purposes by customer class as defined in the Contractor’s water 

conservation plan provided for in Article 27 of this Contract. Nothing herein contained, however, 

shall preclude the Contractor from establishing and collecting any charges, assessments, or other 

revenues authorized by California law. 

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

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

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

subdivision (a) of this Article of this Contract and identifying the agricultural turnouts and the 

municipal and industrial service connections or alternative measurement programs approved by the 

Contracting Officer, at which such measurement devices or water measuring methods are being used, 
Contract No. I1r-1460D 

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and, if applicable, identifying the locations at which such devices and/or methods are not yet being 

used including a time schedule for implementation at such locations. The Contracting Officer shall 

advise the Contractor in writing within sixty (60) days as to the adequacy of, and necessary 

modifications, if any, of the measuring devices or water measuring methods identified in the 

Contractor’s report and if the Contracting Officer does not respond in such time, they shall be 

deemed adequate. If the Contracting Officer notifies the Contractor that the measuring devices or 

methods are inadequate, the parties shall within sixty (60) days following the Contracting Officer‘s 

response, negotiate in good faith the earliest practicable date by which the Contractor shall modify 

said measuring devices and/or measuring methods as required by the Contracting Officer to ensure 

compliance with subdivision (a) of this Article of this Contract. 

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

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

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

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

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

Contractor’s Service Area during the previous Year. 

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

Irrigation and M&I Water taken during the preceding month. 
Contract No. I1r-1460D 

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564 RATES, METHOD OF PAYMENT FOR WATER,

565 AND ACCELERATED REPAYMENT OF FACILITIES 

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 7. (a) The Contractor’s cost obligations for all Delivered Water shall be determined 

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

Secretary’s then-existing ratesetting policy for M&I Water, consistent with the SJRRSA, and such 

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

comment procedure; (ii) applicable Federal Reclamation law and associated rules and regulations, or 

policies; and (iii) other applicable provisions of this Contract. 

(1) The Contractor shall pay the United States as provided for in this 

Article of this Contract for the Delivered Water at Rates and Charges determined in accordance with 

policies for Irrigation Water and M&I Water. The Contractor’s Rates shall be established to recover 

its estimated reimbursable costs included in the O&M Component of the Rate and amounts 

established to recover other charges and deficits, other than the construction costs. The Rates for 

O&M costs and Charges shall be adjusted, as appropriate, in accordance with the provisions of the 

SJRRSA. 

 (2) In accordance with the SJRRSA, the Contractor’s allocable share of 

Project construction costs will be repaid pursuant to the provisions of this Contract. 

 (A) The amount due and payable to the United States, pursuant to 

the SJRRSA, shall be the Repayment Obligation. The Repayment Obligation has been computed by 

the Contracting Officer in a manner consistent with the SJRRSA and is set forth, both as a lump sum 

payment and as four (4) approximately equal annual installments, which amounts together with the 

manner in which such amounts were calculated are set forth in Exhibits “C-1” and “C-2”. The 
Contract No. I1r-1460D 

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Repayment Obligation is due in lump sum by January 31, 2011 or in approximate equal annual 

installments no later than January 31, 2014, as provided by the SJRRSA. The Contractor must 

provide appropriate notice to the Contracting Officer in writing not later than thirty (30) days prior to 

January 31, 2011 if electing to repay the amount due using the lump sum alternative. If such notice is 

not provided by such date, the Contractor shall be deemed to have elected the installment payment 

alternative, in which case, the first such payment shall be made no later than May 1, 2011, the second 

payment shall be made no later than the first anniversary of the first payment date, the third payment 

shall be made no later than the second anniversary of the first payment date, and the final payment 

shall be made no later than January 31, 2014. If the installment payment option is elected by the 

Contractor, the Contractor may pre-pay the remaining portion of the Repayment Obligation by giving 

the Contracting Officer sixty (60) days written notice, in which case, the Contracting Officer shall recompute the remaining amount due to reflect the pre-payment using the same methodology as was 

used to compute the initial annual installment payment amount, which is illustrated in Exhibit “C-2”. 

Notwithstanding any Additional Capital Obligation that may later be established, receipt of the 

Contractor’s payment of the Repayment Obligation by the United States shall fully and permanently 

satisfy the Existing Capital Obligation. 

 (B) Project construction costs or other capitalized costs attributable 

to capital additions to the Project incurred after the effective date of this Contract or that are not 

reflected in the schedules referenced in Exhibits “C-1” and “C-2” and properly assignable to the 

Contractor, shall be repaid as prescribed by the SJRRSA without interest except as required by law. 

Consistent with Federal Reclamation law, interest shall continue to accrue on the M&I portion of 
Contract No. I1r-1460D 

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unpaid Project construction costs or other capitalized cost assigned to the Contractor until such costs 

are paid. Increases or decreases in Project construction costs or other capitalized costs assigned to the 

Contractor caused solely by annual adjustment of Project construction costs or other capitalized costs 

assigned to each CVP contractor by the Secretary shall not be considered in determining the amounts 

to be paid pursuant to this subdivision (a)(2)(B), but will be considered under subdivision (b) of this 

Article. A separate repayment agreement shall be established by the Contractor and the Contracting 

Officer to accomplish repayment of all additional Project construction costs or other capitalized costs 

assigned to the Contractor within the timeframe prescribed by the SJRRSA subject to the following: 

(1) If the collective annual Project construction costs or 

other capitalized costs that are incurred after the effective date of this Contract and properly 

assignable to the contractors are less than $5,000,000, then the portion of such costs properly 

assignable to the Contractor shall be repaid in not more than five (5) years after notification of the 

allocation. This amount is the result of a collective annual allocation of Project construction costs to 

the contractors exercising contract conversions; Provided, That the reference to the amount of 

$5,000,000 shall not be a precedent in any other context. 

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626 

(2) If the collective annual Project construction costs or 

other capitalized costs that are incurred after the effective date of this Contract and properly 

assignable to the contractors are $5,000,000 or greater, then the portion of such costs properly 

assignable to the Contractor shall be repaid as provided by applicable Federal Reclamation law. This 

amount is the result of a collective annual allocation of Project construction costs to the contractors 
Contract No. I1r-1460D 

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exercising contract conversions; Provided, That the reference to the amount of $5,000,000 shall not 

be a precedent in any other context. 

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 (b) Consistent with Section 10010(b) of the SJRRSA, following a final cost 

allocation by the Secretary upon completion of the construction of the Central Valley Project, the 

amounts paid by the Contractor shall be subject to adjustment to reflect the effect of any reallocation 

of Project construction costs or other capitalized costs assigned to the Contractor that may have 

occurred between the determination of Contractor’s Existing Capital Obligation and the final cost 

allocation. In the event that the final cost allocation, as determined by the Secretary, indicates that 

the costs properly assignable to the Contractor, as determined by the Contracting Officer, are greater 

than the Existing Capital Obligation and other amounts of Project construction costs or other 

capitalized costs paid by the Contractor, then the Contractor shall be obligated to pay the remaining 

allocated costs. The term of such additional repayment contract shall be no less than one (1) year and 

no more than ten (10) years, however, mutually agreeable provisions regarding the rate of repayment 

of such amount may be developed by the parties. In the event that the final cost allocation, as 

determined by the Secretary, indicates that the costs properly assignable to the Contractor, as 

determined by the Contracting Officer, are less than the Existing Capital Obligation and other 

amounts of Project construction costs or other capitalized costs paid by the Contractor, then the 

Contracting Officer shall credit such overpayment as an offset against any outstanding or future 

obligation of the Contractor, consistent with the SJRRSA. This Contract shall be implemented in a 

manner consistent with Section 10010(f) of the SJRRSA. 
Contract No. I1r-1460D 

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

Contractor an estimate of the Charges for Project Water that will be applied to the period October 1, 

of the current Calendar Year, through September 30, of the following Calendar Year, and the basis 

for such estimate. The Contractor shall be allowed not less than two (2) months to review and 

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

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

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

notification shall revise Exhibit “B”. Charges shall be subject to reduction consistent with the 

SJRRSA based upon the average annual delivery amount agreed to by the Contracting Officer and the 

Contractor. 

 (1) Upon complete payment of the Repayment Obligation by the 

Contractor, and notwithstanding any Additional Capital Obligation that may later be established, for 

the years 2020 through 2039 inclusive, Charges shall reflect the reduction on a per acre-foot basis 

consistent with Section 10010(d)(1) of the SJRRSA. Exhibit “D” sets forth the reduction in Charges 

to offset the Financing Costs as prescribed in Section 10010(d)(1) of the SJRRSA; Provided, That if 

the Secretary determines such Charges are otherwise needed, an equivalent reduction will be made to 

O&M costs consistent with such provisions of the SJRRSA. Consistent with Section 10010(d)(1) of 

the SJRRSA and as shown in Exhibit “D”, the Friant Surcharge reduction has been calculated based 

upon the anticipated average annual water deliveries, for the purpose of this reduction only, mutually 

agreed upon by the Secretary and the Contractor for the period from January 1, 2020 through 

December 31, 2039. The Friant Surcharge reduction shall remain fixed and shall only be applied to 

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Contract No. I1r-1460D 

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679 

680 

681 

682 

683 

684 

685 

686 

687 

688 

Water Delivered pursuant to this Contract to which the Friant Surcharge applies (including but not 

limited to water transferred, banked, or exchanged), commencing on January 1, 2020 until such 

volume of Water Delivered equals 1,789,000 acre-feet or December 31, 2039, whichever occurs first. 

 (2) Further, to fully offset the Financing Costs, Contractor shall be entitled 

to a reduction in other outstanding or future obligations of the Contractor in accordance with Section 

10010(d)(2) of the SJRRSA. The amount of such further reduction in outstanding or future 

obligations of the Contractor after October 1, 2019 has been computed by the Contracting Officer, 

and as computed, such amount is set forth in Exhibit “D”. 

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

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

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

The Contractor shall be allowed not less than two (2) months to review and comment on such 

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

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

upcoming Year, and such notification shall revise Exhibit “B”. The O&M component of the Rate 

may be reduced as provided in the SJRRSA. 

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

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

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

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

scheduled to be delivered pursuant to this Contract during the first two (2) calendar months of the 
Contract No. I1r-1460D 

34 

689 

690 

691 

692 

693 

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

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

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

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

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

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

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

during any month shall be accompanied with appropriate advance payment, at the Rates then in 

effect, to assure that Project Water is not delivered to the Contractor in advance of such payment. In 

any month in which the quantity of Water Delivered to the Contractor pursuant to this Contract 

equals the quantity of Water Scheduled and paid for by the Contractor, no additional Project Water 

shall be delivered to the Contractor unless and until an advance payment at the Rates then in effect 

for such additional Project Water is made. Final adjustment between the advance payments for the 

Water Scheduled and payments for the quantities of Water Delivered during each Year pursuant to 

this Contract shall be made as soon as practicable but no later than April 30th of the following Year, 

or sixty (60) days after the delivery of Project Water carried over under subdivision (g) of Article 3 of 

this Contract if such water is not delivered by the last day of February. 

694 

695 

696 

697 

698 

699 

700 

701 

702 

703 

704 

705 

706 

707 

708 

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

subdivision (e) of this Article of this Contract to the United States for Water Delivered, at the 

Charges and the appropriate Tiered Pricing Component then in effect, before the end of the month 

709 following the month of delivery; Provided, That the Contractor may be granted an exception from the 
Contract No. I1r-1460D 

35 

710 

711 

712 

713 

714 

715 

716 

717 

718 

719 

720 

721 

722 

Tiered Pricing Component pursuant to subdivision (l)(2) of this Article of this Contract. The 

payments shall be consistent with the quantities of Irrigation Water and M&I Water Delivered as 

shown in the water delivery report for the subject month prepared by the Contracting Officer. Such 

water delivery report shall be the basis for payment of Charges and Tiered Pricing Components by 

the Contractor, and shall be provided to the Contractor by the Contracting Officer (as applicable) 

within five (5) days after the end of the month of delivery. The water delivery report shall be deemed 

a bill basis for payment of Charges and the applicable Tiered Pricing Component for Water 

Delivered. Adjustment for overpayment or underpayment of Charges shall be made through the 

adjustment of payments due to the United States for Charges for the next month. Any amount to be 

paid for past due payment of Charges shall be computed pursuant to Article 21 of this Contract. 

 (g) The Contractor shall pay for any Water Delivered under subdivision (d), (f), or 

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

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

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

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

(a) of this Article of this Contract. 

723 

724 

725 

726 

727 

728 

729 

730 

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

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

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

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

allocated and applied in accordance with Federal Reclamation law and the associated rules or 
Contract No. I1r-1460D 

36 

731 

732 

733 

734 

735 

736 

737 

738 

739 

740 

741 

742 

743 

744 

745 

746 

747 

748 

749 

750 

751 

regulations, the then-existing Project Ratesetting policies for M&I Water or Irrigation Water, and 

consistent with the SJRRSA. 

 (j) The Contracting Officer shall keep its accounts, pertaining to the 

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

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

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

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

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

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

relating to accountings, reports, or information. 

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

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

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

making and allocating payments, other than those set forth in this Article of this Contract, may be in 

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

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

in effect without amending this Contract. 

 (l) (1) Beginning at such time as the total of the deliveries of Class 1 Water 

and Class 2 Water in a Year exceed eighty (80%) percent of the Contract Total, then before the end 

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

United States equal to the applicable Tiered Pricing Component. The Tiered Pricing Component for 
Contract No. I1r-1460D 

37 

752 

753 

754 

755 

756 

757 

758 

759 

760 

761 

762 

763 

the total of the deliveries of Class 1 Water and Class 2 Water in excess of eighty (80%) percent of the 

Contract Total, but less than or equal to ninety (90%) percent of the Contract Total, shall equal the 

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

Contract and the Irrigation Full Cost Water Rate, or M&I Full Cost Water Rate, whichever is 

applicable. The Tiered Pricing Component for the total of the deliveries of Class 1 Water and Class 2 

Water which exceeds ninety (90%) percent of the Contract Total shall equal the difference between 

(i) the Rate established under subdivision (a) of this Article of this Contract and (ii) the Irrigation Full 

Cost Water Rate or M&I Full Cost Water Rate, whichever is applicable. 

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

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

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

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

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

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

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

764 

765 

766 

767 

768 

769 

770 

771 

772 

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

Components pursuant to this Article of this Contract, Water Delivered shall include Project Water 

that the Contractor transfers to others but shall not include Project Water transferred and delivered to 

the Contractor. 

 (m) Rates under the respective ratesetting policies will be established to recover 

only reimbursable O&M (including any deficits) costs of the Project, as those terms are used in the 
Contract No. I1r-1460D 

38 

773 

774 

775 

776 

777 

778 

779 

780 

781 

782 

then-existing Project ratesetting policies, and consistent with the SJRRSA, and interest, where 

appropriate, except in instances where a minimum Rate is applicable in accordance with the relevant 

Project ratesetting policy. Changes of significance in practices which implement the Contracting 

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

Contractor an opportunity to discuss the nature, need, and impact of the proposed change. 

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

the Rates for Project Water transferred by the Contractor shall be the Contractor’s Rates adjusted 

upward or downward to reflect the changed costs of delivery (if any) incurred by the Contracting 

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

accordance with the then-existing Central Valley Project Ratesetting Policy. 

783 NON-INTEREST BEARING OPERATION AND MAINTENANCE DEFICITS

784 

785 

786 

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

Contract, the Contractor has no non-interest bearing operation and maintenance deficits and therefore 

shall have no further liability. 

787 RECOVERED WATER ACCOUNT

788 

789 

790 

791 

792 

 9. (a) Notwithstanding any other provisions of this Contract, water delivered to the 

Contractor under its Recovered Water Account as provided at Paragraph 16(b) of the Settlement and 

affirmed by Section 10004(a)(5) of the SJRRSA shall be at the total cost of $10.00 per acre foot. 

Recovered Water Account water provided to the Contractor shall be administered at a priority for 

delivery lower than Class 2 Water and higher than Section 215 Water. 
Contract No. I1r-1460D 

39 

793 

794 

795 

 (b) The manner in which the Recovered Water Account will be administered will 

be developed in accordance with subdivision (k) of Article 7 of this Contract, the SJRRSA, and 

Paragraph 16 of the Settlement. 

796 SALES, TRANSFERS, AND EXCHANGES OF WATER

797 

798 

799 

800 

801 

802 

803 

804 

805 

806 

807 

808 

809 

810 

811 

812 

813 

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

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

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

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

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

provided for in subdivisions (b) and (c) of this Article of this Contract . No such Project Water sales, 

transfers, or exchanges shall be approved, where approval is required, absent compliance with 

appropriate environmental documentation including but not limited to the National Environmental 

Policy Act and the Endangered Species Act. Such environmental documentation must include, as 

appropriate, an analysis of groundwater impacts and economic and social effects, including 

environmental justice, of the proposed Project Water sales, transfers and exchanges on both the 

transferor/exchanger and transferee/exchange recipient. 

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

sales, transfers, or exchanges of the type historically carried out among Project Contractors located 

within the same geographical area and to allow the Contractor to participate in an accelerated water 

transfer program, the Contracting Officer has prepared, as appropriate, necessary environmental 

documentation including, but not limited to, the National Environmental Policy Act and the 
Contract No. I1r-1460D 

40 

814 

815 

816 

817 

818 

819 

820 

821 

822 

823 

824 

825 

826 

827 

828 

829 

830 

831 

832 

833 

834 

Endangered Species Act analyzing annual Project Water sales, transfers, or exchanges among 

Contractors within the same geographical area and the Contracting Officer has determined that such 

Project Water sales, transfers, and exchanges comply with applicable law. 

(c) Project Water sales, transfers, and exchanges analyzed in the environmental 

documentation referenced in subdivision (b) of this Article of this Contract, shall be conducted with 

advance notice to the Contracting Officer and the Contracting Officer’s written acknowledgement of 

the transaction, but shall not require prior written approval by the Contracting Officer. 

 (d) For Project Water sales, transfers, or exchanges to qualify under subdivision 

(b) of this Article of this Contract such Project Water sale, transfer, or exchange must: (i) be for 

irrigation purposes for lands irrigated within the previous three (3) years, for M&I use, groundwater 

recharge, groundwater banking, similar groundwater activities, surface water storage, or fish and 

wildlife resources; not lead to land conversion; and be delivered to established cropland, wildlife 

refuges, groundwater basins or municipal and industrial use; (ii) occur within a single Year; (iii) 

occur between a willing seller and a willing buyer or willing exchangers; (iv) convey water through 

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

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

comply with all applicable Federal, State, and local or tribal laws and requirements imposed for 

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

(e) The environmental documentation and the Contracting Officer’s compliance 

determination for transactions described in subdivision (b) of this Article of this Contract shall be 

reviewed every five (5) years and updated, as necessary, prior to the expiration of the then-existing 
Contract No. I1r-1460D 

41 

835 

836 

837 

838 

839 

840 

five (5) year period. All subsequent environmental documentation shall include an alternative to 

evaluate not less than the quantity of Project Water historically sold, transferred, or exchanged within 

the same geographical area. 

(f) Consistent with Section 10010(e)(l) of the SJRRSA, any agreement providing 

for sale, transfer, or exchange of Project Water that is not used for interim flows or restoration flows 

pursuant to Paragraphs 13 and 15 of the Settlement, shall be deemed to satisfy the requirements of 

CVPIA section 3405(a)(1)(A) and (I); Provided, That such sales, transfers, or exchanges comply with 

sub-division (f)(1) and (f)(2) below. 

841 

842 

843 

844 

 (1) Project Water sales, transfers, and exchanges conducted under the 

provisions of subdivision (f) of this Article of this Contract shall not require the Contracting Officer’s 

concurrence as to compliance with CVPIA 3405(a)(1)(A) and (I); Provided, That the Contractor 

shall, for Project Water sales, transfers, or exchanges, with a term greater than one (1) year, provide 

ninety (90) days written advance notification to the Contracting Officer and similarly thirty (30) days 

written advance notification of any Project Water sale, transfer, or exchange with a term of less than 

one (1) year. The Contracting Officer shall promptly make such notice publicly available. 

845 

846 

847 

848 

849 

850 

851 

852 

853 

854 

855 

(2) The Contractor’s thirty (30) days or ninety (90) days advance written 

notification pursuant to subdivision (f)(1) of this Article of this Contract shall explain how the 

proposed Project Water sales, transfers, or exchanges are intended to reduce, avoid, or mitigate 

impacts to Project Water deliveries caused by interim or restoration flows or is otherwise intended to 

facilitate the Water Management Goal as described in the SJRRSA. The Contracting Officer shall 

promptly make such notice publicly available. 
Contract No. I1r-1460D 

42 

856 

857 

858 

859 

860 

861 

862 

863 

864 

865 

866 

867 

868 

869 

870 

 (3) In addition, the Contracting Officer shall, at least annually, make 

available publicly a compilation of the number of Project Water sales, transfers, and exchange 

agreements implemented in accordance with sub-divisions (f)(1) and (f)(2) of this Article of this 

Contract. 

 (4) Project Water sold, transferred, or exchanged under an agreement that 

meets the terms of subdivisions (f)(1) and (f)(2) of this Article of this Contract shall not be counted as 

a replacement or an offset for purposes of determining reductions to Project Water deliveries to any 

Friant Division Project Contractor except as provided in Paragraph 16(b) of the Settlement. 

 (g) Upon complete payment of the Repayment Obligation by the Contractor, and 

notwithstanding any Additional Capital Obligation that may later be established, in the case of a sale 

or transfer of Irrigation Water to another contractor which is otherwise subject to the acreage 

limitations, reporting, and Full Cost pricing provisions of the RRA, such sold or transferred Irrigation 

Water shall not be subject to such RRA provisions, however, in the case of a sale or transfer of 

Irrigation Water to the Contractor from another contractor which is subject to RRA provisions, such 

RRA provisions shall apply to delivery of such water.

871 APPLICATION OF PAYMENTS AND ADJUSTMENTS

872 

873 

874 

875 

876 

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

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

the Contractor arising out of this Contract then due and payable. Overpayments of more than One 

Thousand Dollars ($1,000) shall be refunded at the Contractor’s request. In lieu of a refund, any 

amount of such overpayment, at the option of the Contractor, may be credited against amounts to 
Contract No. I1r-1460D 

43 

877 

878 

879 

880 

881 

882 

883 

884 

885 

886 

887 

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

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

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

overpayments shall be made within thirty (30) days of the Contracting Officer obtaining direction as 

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

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

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

Contractor pursuant to Article 26 of this Contract shall be adjusted to reflect the actual costs when the 

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

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

be billed for the additional costs pursuant to Article 26 of this Contract. 

888 TEMPORARY REDUCTIONS—RETURN FLOWS

889 

890 

891 

892 

893 

894 

895 

896 

897 

 12. (a) The Contracting Officer shall make all reasonable efforts to optimize delivery 

of the Contract Total subject to: (i) the authorized purposes and priorities of the Project; (ii) the 

requirements of Federal law and the Settlement; and (iii) the obligations of the United States under 

existing contracts, or renewals thereof, providing for water deliveries from the Project. 

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

discontinue or reduce the quantity of Water Delivered to the Contractor as herein provided for the 

purposes of investigation, inspection, maintenance, repair, or replacement of any of the Project 

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

as feasible the Contracting Officer or Operating Non-Federal Entity will give the Contractor due 
Contract No. I1r-1460D 

44 

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

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

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

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

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

such discontinuance or reduction. 

899 

900 

901 

902 

903 

904 

905 

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

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

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

any right as seepage or return flow to water being used pursuant to this Contract for surface irrigation 

or underground storage either being put to reasonable and beneficial use pursuant to this Contract 

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

Contractor. For purposes of this subdivision, groundwater recharge, groundwater banking and all 

similar groundwater activities will be deemed to be underground storage. 

906 

907 

908 

909 

910 

911 

912 CONSTRAINTS ON THE AVAILABILITY OF WATER

913 

914 

915 

916 

917 

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

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

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

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

as soon as practicable. 
Contract No. I1r-1460D 

45 

918 

919 

920 

921 

922 

923 

924 

925 

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

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

taken by the Contracting Officer to meet legal obligations, including but not limited to obligations

pursuant to the Settlement then, except as provided in subdivision (a) of Article 19 of this Contract, 

no liability shall accrue against the United States or any of its officers, agents, or employees for any 

damage, direct or indirect, arising therefrom. 

 (c) The United States shall not execute contracts which together with this 

Contract, shall in the aggregate provide for furnishing Class 1 Water in excess of 800,000 acre-feet 

per Year or Class 2 Water in excess of 1,401,475 acre-feet per Year; Provided, That, subject to 

subdivision (l) of Article 3 of this Contract, the limitation placed on Class 2 Water contracts shall not 

prohibit the United States from entering into temporary contracts of one year or less in duration for 

delivery of Project Water to other entities if such water is not necessary to meet the schedules as may 

be submitted by all Friant Division Project Contractors entitled to receive Class 1 Water and/or Class 

2 Water under their contracts. Nothing in this subdivision shall limit the Contracting Officer’s ability 

to take actions that result in the availability of new water supplies to be used for Project purposes and 

allocating such new supplies; Provided,

926 

927 

928 

929 

930 

931 

932 

 That the Contracting Officer shall not take such actions until 

after consultation with the Friant Division Project Contractors. 

933 

934 

935 

936 

937 

938 

 (d) The Contracting Officer shall not deliver any Class 2 Water pursuant to this or 

any other contract heretofore or hereafter entered into any Year unless and until the Contracting 

Officer determines that the cumulative total quantity of Class 1 Water specified in subdivision (c) of 

this Article of this Contract will be available for delivery in said Year. If the Contracting Officer 
Contract No. I1r-1460D 

46 

939 

940 

941 

942 

943 

944 

945 

946 

947 

948 

949 

950 

951 

952 

953 

954 

955 

956 

957 

958 

determines there is or will be a shortage in any Year in the quantity of Class 1 Water available for 

delivery, the Contracting Officer shall apportion the available Class 1 Water among all Contractors 

entitled to receive such water that will be made available at Friant Dam in accordance with the 

following: 

 (1) A determination shall be made of the total quantity of Class 1 Water at 

Friant Dam which is available for meeting Class 1 Water contractual commitments, the amount so 

determined being herein referred to as the available supply. 

 (2) The total available Class 1 supply shall be divided by the Class 1 Water 

contractual commitments, the quotient thus obtained being herein referred to as the Class 1 

apportionment coefficient. 

 (3) The total quantity of Class 1 Water under Article 3 of this Contract 

shall be multiplied by the Class 1 apportionment coefficient and the result shall be the quantity of 

Class 1 Water required to be delivered by the Contracting Officer to the Contractor for the respective 

Year, but in no event shall such amount exceed the total quantity of Class 1 Water specified in 

subdivision (a) of Article 3 of this Contract. 

 (e) If the Contracting Officer determines there is less than the quantity of Class 2 

Water which the Contractor otherwise would be entitled to receive pursuant to Article 3 of this 

Contract, the quantity of Class 2 Water which shall be furnished to the Contractor by the Contracting 

Officer will be determined in the manner set forth in paragraphs (1), (2), and (3), of subdivision (d) of 

this Article of this Contract substituting the term "Class 2" for the term "Class 1." 
Contract No. I1r-1460D 

47 

959 

960 

961 

962 

963 

964 

965 

 (f) In the event that in any Year there is made available to the Contractor, by 

reason of any shortage or apportionment as provided in subdivisions (a), (d), or (e) of this Article of 

this Contract, or any discontinuance or reduction of service as set forth in subdivision (b) of Article 

12 of this Contract, less than the quantity of water which the Contractor otherwise would be entitled 

to receive hereunder, there shall be made an adjustment on account of the amounts already paid to the 

Contracting Officer by the Contractor for Class 1 Water and Class 2 Water for said Year in 

accordance with Article 11 of this Contract. 

966 UNAVOIDABLE GROUNDWATER PERCOLATION

967 

968 

969 

970 

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

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

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

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

971 ACREAGE LIMITATION

972 

973 

974 

975 

976 

977 

978 

979 

 15. (a) Notwithstanding the application of the acreage limitation provisions to 

activities referred to in subdivision (b) of this Article, subdivision (a) of Article 16, and Article 18 of 

this Contract, upon complete payment of the Repayment Obligation by the Contractor, and 

notwithstanding any Additional Capital Obligation that may later be established, the provisions of 

section 213(a) and (b) of the RRA shall apply to lands in the Contractor’s Service Area, with the 

effect that acreage limitations, reporting, and Full Cost pricing provisions of the RRA shall no longer 

apply to lands in the Contractor’s Service Area with respect to Water Delivered pursuant to this 

Contract. Upon receiving the complete payment of the Repayment Obligation from the Contractor, 
Contract No. I1r-1460D 

48 

980 

981 

982 

983 

984 

985 

986 

987 

988 

989 

990 

991 

Reclamation will conduct a final water district review for the purpose of determining compliance 

with the acreage limitations, reporting, and Full Cost pricing provisions of the RRA from the date of 

the last water district review until the date when payment to Reclamation of the Repayment 

Obligation is completed. 

 (b) Project Water to which the Contractor is entitled through a separate contract, 

other than this Contract, that is subject to Federal Reclamation law, may be delivered to lands within 

the Contractor’s Service Area. Upon complete payment of the Repayment Obligation by the 

Contractor, and notwithstanding any Additional Capital Obligation that may later be established, 

Project Water Delivered under this Contract may be mixed with Project Water Delivered pursuant to 

a contract with the United States, other than this Contract, to which acreage limitations, reporting, 

and the Full Cost pricing provisions of Federal Reclamation law apply without causing the 

application of the acreage limitations, reporting, and Full Cost pricing provisions of Federal 

Reclamation law to the Water Delivered pursuant to this Contract; Provided, The terms and 

conditions in such other contract shall continue to apply, and if such terms and conditions so require, 

the lands to receive Project Water under such other contract shall be properly designated by the 

Contractor and such Project Water is to be delivered in accordance with the RRA including any 

applicable acreage limitations, reporting, and Full Cost pricing provisions. 

992 

993 

994 

995 

996 

997 COMPLIANCE WITH FEDERAL RECLAMATION LAWS

998 

999 

1000 

1001 

 16. (a) The parties agree that the delivery of irrigation water or use of Federal 

facilities pursuant to this Contract is subject to Federal reclamation law, including but not limited to 

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

the rules and regulations promulgated by the Secretary of the Interior under Federal reclamation law. 
Contract No. I1r-1460D 

49 

1002 

1003 

1004 

(b) The terms of this Contract are subject to the Settlement and the SJRRSA. 

Nothing in this Contract shall be interpreted to limit or interfere with the full implementation of the 

Settlement and the SJRRSA. 

1005 PROTECTION OF WATER AND AIR QUALITY

1006 

1007 

17. (a) Project facilities used to make available and deliver water to the Contractor 

shall be operated and maintained in the most practical manner to maintain the quality of the water at 

the highest level possible as determined by the Contracting Officer: Provided, That the United States 

does not warrant the quality of the water delivered to the Contractor and is under no obligation to 

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

the Contractor. 

1008 

1009 

1010 

1011 

1012 

1013 

1014 

1015 

1016 

1017 

1018 

1019 

1020 

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

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

or licenses from the appropriate Federal, State, or local authorities necessary for the delivery of water 

by the Contractor; and shall be responsible for compliance with all Federal, State, and local water 

quality standards applicable to surface and subsurface drainage and/or discharges generated through 

the use of Federal or Contractor facilities or project water provided by the Contractor within the 

Contractor’s Project Water Service Area. 

 

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

provide drainage or other discharge services. 

1021 WATER ACQUIRED BY THE CONTRACTOR

1022 OTHER THAN FROM THE UNITED STATES

1023 

1024 

1025 

1026 

1027 

1028 

1029 

 18. (a) Until complete payment of the Repayment Obligation by the Contractor, and 

notwithstanding any Additional Capital Obligation that may later be established, water or water rights 

now owned or hereafter acquired by the Contractor other than from the United States and Irrigation 

Water furnished pursuant to the terms of this Contract may be simultaneously transported through the 

same distribution facilities of the Contractor subject to the following: (i) if the facilities utilized for 

commingling Irrigation Water and non-project water were constructed without funds made available 

pursuant to Federal Reclamation law, the acreage limitations, reporting, and Full Cost pricing 
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1030 

1031 

1032 

1033 

1034 

1035 

1036 

1037 

1038 

1039 

1040 

1041 

1042 

1043 

1044 

1045 

1046 

1047 

1048 

1049 

1050 

provisions of Federal Reclamation law will be applicable only to the Landholders of lands which 

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

through the certification requirements as specified in the Acreage Limitation Rules and Regulations 

(43 CFR Part 426); and (iii) the water requirements of Eligible Lands within the Contractor's Service 

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

quantity necessary to irrigate such Eligible Lands. The Contractor and the Contracting Officer 

acknowledge that the Contractor’s distribution system that was constructed with funds made 

available pursuant to Federal Reclamation law was, prior to effective date of this Contract, repaid in 

full but title to the facilities has not been transferred to the Contractor. As such, when such facilities 

are utilized for commingling Irrigation Water and non-project water, the acreage limitation provisions 

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

Irrigation Water. 

 (b) Upon complete payment of the Repayment Obligation by the Contractor, and 

notwithstanding any Additional Capital Obligation that may later be established, water or water rights 

now owned or hereafter acquired by the Contractor other than from the United States pursuant to this 

Contract and Irrigation Water furnished pursuant to the terms of this Contract may be simultaneously 

transported through the same distribution facilities of the Contractor without the payment of fees to 

the United States and without application of Federal Reclamation law to Water Delivered pursuant to 

this Contract or to lands which receive Water Delivered to Contractor pursuant to this Contract.

 (c) Water or water rights now owned or hereafter acquired by the Contractor, other 

than from the United States or adverse to the Project or its contractors (i.e., non-project water), may 
Contract No. I1r-1460D 

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1051 

1052 

1053 

1054 

1055 

1056 

1057 

1058 

1059 

1060 

1061 

1062 

1063 

1064 

1065 

1066 

1067 

1068 

1069 

1070 

be stored, conveyed and/or diverted through Project facilities, other than Friant Division Facilities, 

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

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

necessary, consistent with the following provisions: 

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

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

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

appropriate rate as determined by the Contracting Officer. In addition, if electrical power is required 

to pump non-project water, the Contractor shall be responsible for obtaining the necessary power and 

paying the necessary charges therefor. 

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

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

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

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

Project Contractors; (iv) interfere with the physical maintenance of the Project facilities; or (v) result 

in the United States incurring any liability or unreimbursed costs or expenses thereby. 

 (3) Neither the United States nor the Operating Non-Federal Entity shall be 

responsible for control, care or distribution of the non-project water before it is introduced into or 

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

and indemnify the United States and the Operating Non-Federal Entity, and their respective officers, 
Contract No. I1r-1460D 

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1071 

1072 

1073 

1074 

1075 

1076 

1077 

1078 

1079 

1080 

1081 

1082 

1083 

1084 

1085 

agents, and employees, from any claim for damage to persons or property, direct or indirect, resulting 

from Contractor’s diversion or extraction of non-project water from any source. 

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

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

management plan for the area from which it was extracted. 

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

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

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

non-project water prior to any such remaining capacity being made available to non-project 

contractors. 

 (d) Non-project water may be stored, conveyed and/or diverted through Friant 

Division Facilities, subject to the completion of appropriate environmental documentation and 

approval of the Contracting Officer without execution of a separate contract, consistent with 

subdivisions (c)(1) through (c)(5) of this Article and any other condition determined to be appropriate 

by the Contracting Officer. 

1086 OPINIONS AND DETERMINATIONS

1087 

1088 

1089 

1090 

1091 

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

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

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

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

the right to seek relief from and appropriate adjustment for any such arbitrary, capricious, or 
Contract No. I1r-1460D 

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1092 

1093 

1094 

1095 

1096 

1097 

1098 

1099 

1100 

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

provided in a timely manner. Nothing in this Article of this Contract is intended to or shall affect or 

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

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

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

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

United States and the State of California, and the rules and regulations promulgated by the Secretary. 

Such determinations shall be made in consultation with the Contractor to the extent reasonably 

practicable. 

1101 COORDINATION AND COOPERATION

1102 

1103 

1104 

1105 

1106 

1107 

1108 

1109 

1110 

1111 

1112 

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

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

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

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

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

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

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

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

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

 (b) It is the intent of the Secretary to improve water supply reliability. To carry 

out this intent: 
Contract No. I1r-1460D 

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1113 

1114 

1115 

1116 

1117 

1118 

1119 

1120 

1121 

1122 

1123 

1124 

1125 

1126 

1127 

1128 

1129 

1130 

1131 

1132 

1133 

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

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

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

improve water supply, water quality, and reliability. 

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

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

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

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

California to seek improved water resource management. 

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

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

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

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

activities, and other issues as appropriate. 

 (c) Without limiting the contractual obligations of the Contracting Officer 

hereunder, nothing in this Contract shall be construed to limit or constrain the Contracting Officer’s 

ability to communicate, coordinate, and cooperate with the Contractor or other interested 

stakeholders or to make decisions in a timely fashion as needed to protect health, safety, physical 

integrity of structures or facilities, or the Contracting Officer’s ability to comply with applicable 

laws. 
Contract No. I1r-1460D 

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1134 CHARGES FOR DELINQUENT PAYMENTS

1135 

1136 

1137 

1138 

1139 

1140 

1141 

1142 

1143 

1144 

1145 

1146 

1147 

1148 

1149 

1150 

1151 

 21. (a) The Contractor shall be subject to interest, administrative and penalty charges 

on delinquent installments or payments. When a payment is not received by the due date, the 

Contractor shall pay an interest charge for each day the payment is delinquent beyond the due date. 

When a payment becomes sixty (60) days delinquent, the Contractor shall pay an administrative 

charge to cover additional costs of billing and processing the delinquent payment. When a payment 

is delinquent ninety (90) days or more, the Contractor shall pay an additional penalty charge of six 

(6%) percent per year for each day the payment is delinquent beyond the due date. Further, the 

Contractor shall pay any fees incurred for debt collection services associated with a delinquent 

payment. 

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

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

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

Project Act of 1939 (Public Law 76-260). The interest charge rate shall be determined as of the due 

date and remain fixed for the duration of the delinquent period. 

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

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

accrued interest, and finally to the overdue payment. 

1152 EQUAL EMPLOYMENT OPPORTUNITY

1153 

1154 

1155 

1156 

1157 

1158 

1159 

1160 

1161 

1162 

1163 

1164 

1165 

1166 

1167 

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

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

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

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

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

action shall include, but not be limited to the following: employment, upgrading, demotion, or 

transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of 

compensation; and selection for training, including apprenticeship. The Contractor agrees to post in 

conspicuous places, available to employees and applicants for employment, notices to be provided by 

the Contracting Officer setting forth the provisions of this nondiscrimination clause. 

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

or on behalf of the Contractor, state that all qualified applicants will receive consideration for 

employment without regard to race, color, religion, sex, disability, or national origin. 

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

which it has a collective bargaining agreement or other contract or understanding, a notice, to be 
Contract No. I1r-1460D 

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1168 

1169 

1170 

1171 

1172 

1173 

1174 

1175 

1176 

1177 

1178 

1179 

1180 

1181 

1182 

1183 

1184 

1185 

1186 

1187 

1188 

1189 

1190 

provided by the Contracting Officer, advising the labor union or workers’ representative of the 

Contractor’s commitments under Section 202 of Executive Order 11246 of September 24, 1965, and 

shall post copies of the notice in conspicuous places available to employees and applicants for 

employment. 

(d) The Contractor will comply with all provisions of Executive Order No. 11246 of 

September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor. 

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

Order 11246 of September 24, 1965, and by the rules, regulations, and orders of the Secretary of 

Labor, or pursuant thereto, and will permit access to his books, records, and accounts by the 

Contracting Agency and the Secretary of Labor for purposes of investigation to ascertain compliance 

with such rules, regulations, and orders. 

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

of this contract or with any of such rules, regulations, or orders, this contract may be canceled, 

terminated or suspended in whole or in part and the Contractor may be declared ineligible for further 

Government contracts in accordance with procedures authorized in Executive Order 11246 of 

September 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in 

Executive Order 11246 of September 24, 1965 or by rule, regulation, or order of the Secretary of 

Labor, or as otherwise provided by law. 

(g) The Contractor will include the provisions of paragraphs (1) through (7) in every 

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

Labor issued pursuant to Section 204 of Executive Order 11246 of September 24, 1965, so that such 

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

with respect to any subcontract or purchase order as may be directed by the Secretary of Labor as a 

means of enforcing such provisions, including sanctions for noncompliance: Provided, however, that 

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

or vendor as a result of such direction, the Contractor may request the United States to enter into such 

litigation to protect the interests of the United States. 

1191 

1192 

1193 

1194 

1195 GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT

1196 

1197 

1198 

1199 

1200 

1201 

1202 

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

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

may be distributed among the Contractor's water users and notwithstanding the default of individual 

water users in their obligations to the Contractor. 

 (b) The payment of charges becoming due hereunder is a condition precedent to 

receiving benefits under this Contract. The United States shall not make water available to the 

Contractor through Project facilities during any period in which the Contractor may be in arrears in 
Contract No. I1r-1460D 

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1203 

1204 

1205 

1206 

1207 

the advance payment of water rates due the United States. The Contractor shall not furnish water 

made available pursuant to this Contract for lands or parties which are in arrears in the advance 

payment of water rates levied or established by the Contractor. 

 (c) With respect to subdivision (b) of this Article of this Contract, the Contractor 

shall have no obligation to require advance payment for water rates which it levies. 

1208 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

1209 

1210 

1211 

1212 

1213 

1214 

1215 

1216 

1217 

1218 

1219 

1220 

1221 

1222 

1223 

1224 

1225 

1226 

 24. (a) The Contractor shall comply with Title VI of the Civil Rights Act of 1964 (42 

U.S.C. 2000d), Section 504 of the Rehabilitation Act of 1975 (P.L. 93-112, as amended), the Age 

Discrimination Act of 1975 (42 U.S.C. 6101, et seq.) and any other applicable civil rights laws, as 

well as with their respective implementing regulations and guidelines imposed by the U.S. 

Department of the Interior and/or Bureau of Reclamation. 

 (b) These statutes require that no person in the United States shall, on the grounds 

of race, color, national origin, handicap, or age, be excluded from participation in, be denied the 

benefits of, or be otherwise subjected to discrimination under any program or activity receiving 

financial assistance from the Bureau of Reclamation. By executing this Contract, the Contractor 

agrees to immediately take any measures necessary to implement this obligation, including permitting 

officials of the United States to inspect premises, programs, and documents. 

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

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

assistance extended after the date hereof to the Contractor by the Bureau of Reclamation, including 

installment payments after such date on account of arrangements for Federal financial assistance 

which were approved before such date. The Contractor recognizes and agrees that such Federal 

assistance will be extended in reliance on the representations and agreements made in this Article, 

and that the United States reserves the right to seek judicial enforcement thereof. 

1227 PRIVACY ACT COMPLIANCE

1228 

1229 

1230 

1231 

1232 

1233 

1234 

 25. (a) The Contractor shall comply with the Privacy Act of 1974 (5 U.S.C. 552a) (the 

Act) and the Department of the Interior rules and regulations under the Act (43 CFR 2.45 et seq.) in 

maintaining Landholder acreage certification and reporting records, required to be submitted to the 

Contractor for compliance with Sections 206 and 228 of the Reclamation Reform Act of 1982 (96 

Stat. 1266), and pursuant to 43 CFR 426.18. 

 (b) With respect to the application and administration of the criminal penalty 

provisions of the Act (5 U.S.C. 552a(i)), the Contractor and the Contractor's employees responsible 
Contract No. I1r-1460D 

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1235 

1236 

1237 

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1239 

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1242 

1243 

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1246 

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1250 

1251 

1252 

for maintaining the certification and reporting records referenced in (a) above are considered to be 

employees of the Department of the Interior. See 5 U.S.C. 552a(m). 

 (c) The Contracting Officer or a designated representative shall provide the 

Contractor with current copies of the Interior Department Privacy Act regulations and the Bureau of 

Reclamation Federal Register Privacy Act System of Records Notice (Acreage Limitation--Interior, 

Reclamation-31) which govern the maintenance, safeguarding, and disclosure of information 

contained in the Landholder's certification and reporting records. 

 (d) The Contracting Officer shall designate a full-time employee of the Bureau of 

Reclamation to be the System Manager who shall be responsible for making decisions on denials 

pursuant to 43 CFR 2.61 and 2.64 amendment requests pursuant to 43 CFR 2.72. The Contractor is 

authorized to grant requests by individuals for access to their own records. 

 (e) The Contractor shall forward promptly to the System Manager each proposed 

denial of access under 43 CFR 2.64; and each request for amendment of records filed under 

43 CFR 2.71; notify the requester accordingly of such referral; and provide the System Manager with 

information and records necessary to prepare an appropriate response to the requester. These 

requirements do not apply to individuals seeking access to their own certification and reporting forms 

filed with the Contractor pursuant to 43 CFR 426.18, unless the requester elects to cite the Privacy 

Act as a basis for the request. 

1253 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

1254 

1255 

1256 

1257 

1258 

1259 

1260 

1261 

1262 

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

Contract, the Contractor shall pay to the United States, within sixty (60) days after receipt of a bill 

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

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

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

procedures. All such amounts referred to in this Article of this Contract shall not exceed the amount 

agreed to in writing in advance by the Contractor. This Article of this Contract shall not apply to 

costs for routine contract administration. 
Contract No. I1r-1460D 

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1263 WATER CONSERVATION

1264 

1265 

1266 

1267 

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1269 

1270 

1271 

1272 

1273 

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1275 

1276 

1277 

1278 

1279 

1280 

1281 

1282 

 27. (a) Prior to the delivery of water provided from or conveyed through Federally 

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

implementing an effective water conservation and efficiency program based on the Contractor's water 

conservation plan that has been determined by the Contracting Officer to meet the conservation and 

efficiency criteria for evaluating water conservation plans established under Federal law. The water 

conservation and efficiency program shall contain definite water conservation objectives, appropriate 

economically feasible water conservation measures, and time schedules for meeting those objectives. 

Continued Project Water delivery pursuant to this Contract shall be contingent upon the Contractor’s 

continued implementation of such water conservation program. In the event the Contractor's water 

conservation plan or any revised water conservation plan completed pursuant to subdivision (d) of 

this Article of this Contract have not yet been determined by the Contracting Officer to meet such 

criteria, due to circumstances which the Contracting Officer determines are beyond the control of the 

Contractor, water deliveries shall be made under this Contract so long as the Contractor diligently 

works with the Contracting Officer to obtain such determination at the earliest practicable date, and 

thereafter the Contractor immediately begins implementing its water conservation and efficiency 

program in accordance with the time schedules therein. 

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

Article 3 of this Contract equal or exceed two thousand (2,000) acre-feet per Year, the Contractor 

shall implement the Best Management Practices identified by the time frames issued by the 
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1286 

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1288 

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1291 

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1293 

1294 

1295 

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

determined by the Contracting Officer to be inappropriate for the Contractor. 

 (c) The Contractor shall submit to the Contracting Officer a report on the status of 

its implementation of the water conservation plan on the reporting dates specified in the then-existing 

conservation and efficiency criteria established under Federal law. 

 (d) At five (5) -year intervals, the Contractor shall revise its water conservation 

plan to reflect the then-existing conservation and efficiency criteria for evaluating water conservation 

plans established under Federal law and submit such revised water management plan to the 

Contracting Officer for review and evaluation. The Contracting Officer will then determine if the 

water conservation plan meets Reclamation’s then-existing conservation and efficiency criteria for 

evaluating water conservation plans established under Federal law. 

 (e) If the Contractor is engaged in direct groundwater recharge, such activity shall 

be described in the Contractor’s water conservation plan. 

1296 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

1297 

1298 

1299 

1300 

1301 

1302 

1303 

 28. Except as specifically provided in Article 18 of this Contract, the provisions of this 

Contract shall not be applicable to or affect non-project Water or water rights now owned or hereafter 

acquired by the Contractor or any user of such water within the Contractor's Service Area. Any such 

water shall not be considered Project Water under this Contract. In addition, this Contract shall not 

be construed as limiting or curtailing any rights which the Contractor or any water user within the 

Contractor's Service Area acquires or has available under any other contract pursuant to Federal 

Reclamation law. 
Contract No. I1r-1460D 

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1304 OPERATION AND MAINTENANCE BY OPERATING NON-FEDERAL ENTITY

1305 

1306 

1307 

1308 

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1324 

 29. (a) The O&M of a portion of the Project facilities which serve the Contractor, and 

responsibility for funding a portion of the costs of such O& M, have been transferred to the Operating 

Non-Federal Entity by separate agreement between the United States and the Operating Non-Federal 

Entity. That separate agreement shall not interfere with or affect the rights or obligations of the 

Contractor or the United States hereunder. 

 (b) The Contracting Officer has previously notified the Contractor in writing that 

the O&M of a portion of the Project facilities which serve the Contractor has been transferred to the 

Operating Non-Federal Entity, and therefore, the Contractor shall pay directly to the Operating NonFederal Entity, or to any successor approved by the Contracting Officer under the terms and 

conditions of the separate agreement between the United States and the Operating Non-Federal Entity 

described in subdivision (a) of this Article of this Contract, all rates, charges or assessments of any 

kind, including any assessment for reserve funds, which the Operating Non-Federal Entity or such 

successor determines, sets or establishes for (i) the O&M of the portion of the Project facilities 

operated and maintained by the Operating Non-Federal Entity or such successor, or (ii) the Friant 

Division’s share of the operation, maintenance and replacement costs for physical works and 

appurtenances associated with the Tracy Pumping Plant, the Delta-Mendota Canal, the O'Neill 

Pumping/Generating Plant, the federal share of the O'Neill Forebay, the Mendota Pool, and the 

federal share of San Luis Unit joint use conveyance and conveyance pumping facilities. Such direct 

payments to the Operating Non-Federal Entity or such successor shall not relieve the Contractor of its 

obligation to pay directly to the United States the Contractor’s share of the Project Rates, Charges, 
Contract No. I1r-1460D 

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1339 

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1341 

and Tiered Pricing Components except to the extent the Operating Non-Federal Entity collects 

payments on behalf of the United States in accordance with the separate agreement identified in 

subdivision (a) of this Article of this Contract. 

 (c) For so long as the O&M of any portion of the Project facilities serving the 

Contractor is performed by the Operating Non-Federal Entity, or any successor thereto, the 

Contracting Officer shall adjust those components of the Rates for Water Delivered under this 

Contract representing the cost associated with the activity being performed by the Operating NonFederal Entity or its successor. 

 (d) In the event the O&M of the Project facilities operated and maintained by the 

Operating Non-Federal Entity is re-assumed by the United States during the term of this Contract, the 

Contracting Officer shall so notify the Contractor, in writing, and present to the Contractor a revised 

Exhibit “B” which shall include the portion of the Rates to be paid by the Contractor for Project 

Water under this Contract representing the O &M costs of the portion of such Project facilities which 

have been re-assumed. The Contractor shall, thereafter, in the absence of written notification from 

the Contracting Officer to the contrary, pay the Rates, Charges, and Tiered Pricing Component(s) 

specified in the revised Exhibit “B” directly to the United States in compliance with Article 7 of this 

Contract. 

1342 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

1343 

1344 

1345 

1346 

1347 

 30. The expenditure or advance of any money or the performance of any obligation of the 

United States under this Contract shall be contingent upon appropriation or allotment of funds. 

Absence of appropriation or allotment of funds shall not relieve the Contractor from any obligations 

under this Contract. No liability shall accrue to the United States in case funds are not appropriated 

or allotted. 
Contract No. I1r-1460D 

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1348 BOOKS, RECORDS, AND REPORTS

1349 

1350 

1351 

1352 

1353 

1354 

1355 

1356 

1357 

1358 

1359 

1360 

1361 

1362 

1363 

1364 

1365 

 31. (a) The Contractor shall establish and maintain accounts and other books and 

records pertaining to administration of the terms and conditions of this Contract, including: the 

Contractor's financial transactions, water supply data, and Project land and right-of-way agreements; 

the water users' land-use (crop census), land ownership, land-leasing and water use data; and other 

matters that the Contracting Officer may require. Reports thereon shall be furnished to the 

Contracting Officer in such form and on such date or dates as the Contracting Officer may require. 

Subject to applicable Federal laws and regulations, each party to this Contract shall have the right 

during office hours to examine and make copies of the other party's books and records relating to 

matters covered by this Contract. 

 (b) Notwithstanding the provisions of subdivision (a) of this Article of this 

Contract, no books, records, or other information shall be requested from the Contractor by the 

Contracting Officer unless such books, records, or information are reasonably related to the 

administration or performance of this Contract. Any such request shall allow the Contractor a 

reasonable period of time within which to provide the requested books, records, or information. 

 (c) At such time as the Contractor provides information to the Contracting Officer 

pursuant to subdivision (a) of this Article of this Contract, a copy of such information shall be 

provided to the Operating Non-Federal Entity. 

1366 ASSIGNMENT LIMITED--SUCCESSORS AND ASSIGNS OBLIGATED

1367 

1368 

1369 

1370 

1371 

1372 

 32. (a) The provisions of this Contract shall apply to and bind the successors and 

assigns of the parties hereto, but no assignment or transfer of this Contract or any right or interest 

therein shall be valid until approved in writing by the Contracting Officer. 

(b) The assignment of any right or interest in this Contract by either party shall not 

interfere with the rights or obligations of the other party to this Contract absent the written 

concurrence of said other party. 
Contract No. I1r-1460D 

64 

1373 

1374 

 (c) The Contracting Officer shall not unreasonably condition or withhold approval 

of any proposed assignment. 

1375 SEVERABILITY

1376 

1377 

1378 

1379 

1380 

1381 

1382 

1383 

1384 

1385 

1386 

1387 

1388 

1389 

1390 

 33. In the event that a person or entity who is neither (i) a party to a Project contract, nor 

(ii) a person or entity that receives Project Water from a party to a Project contract, nor (iii) an 

association or other form of organization whose primary function is to represent parties to Project 

contracts, brings an action in a court of competent jurisdiction challenging the legality or 

enforceability of a provision included in this Contract and said person, entity, association, or 

organization obtains a final court decision holding that such provision is legally invalid or 

unenforceable and the Contractor has not intervened in that lawsuit in support of the plaintiff(s), the 

parties to this Contract shall use their best efforts to (i) within thirty (30) days of the date of such final 

court decision identify by mutual agreement the provisions in this Contract which must be revised 

and (ii) within three (3) months thereafter promptly agree on the appropriate revision(s). The time 

periods specified above may be extended by mutual agreement of the parties. Pending the 

completion of the actions designated above, to the extent it can do so without violating any applicable 

provisions of law, the United States shall continue to make the quantities of Project Water specified 

in this Contract available to the Contractor pursuant to the provisions of this Contract which were not 

found to be legally invalid or unenforceable in the final court decision. 

1391 RESOLUTION OF DISPUTES

1392 

1393 

 34. Should any dispute arise concerning any provisions of this Contract, or the parties’ 

rights and obligations thereunder, the parties shall meet and confer in an attempt to resolve the 
Contract No. I1r-1460D 

65 

1394 

1395 

dispute. Prior to the Contractor commencing any legal action, or the Contracting Officer referring 

any matter to Department of Justice, the party shall provide to the other party thirty (30) days written 

notice of the intent to take such action; Provided, That such notice shall not be required where a delay 

in commencing an action would prejudice the interests of the party that intends to file suit. During 

the thirty (30) day notice period, the Contractor and the Contracting Officer shall meet and confer in 

an attempt to resolve the dispute. Except as specifically provided, nothing herein is intended to 

waive or abridge any right or remedy that the Contractor or the United States may have. 

1396 

1397 

1398 

1399 

1400 

1401 OFFICIALS NOT TO BENEFIT

1402 

1403 

1404 

 35. No Member of or Delegate to Congress, Resident Commissioner, or official of the 

Contractor shall benefit from this Contract other than as a water user or landowner in the same 

manner as other water users or landowners. 

1405 CHANGES IN CONTRACTOR’S SERVICE AREA

1406 

1407 

1408 

1409 

1410 

1411 

1412 

1413 

1414 

1415 

1416 

 36. (a) While this Contract is in effect, no change may be made in the Contractor's 

Service Area or boundaries, by inclusion or exclusion of lands, dissolution, consolidation, merger, or 

otherwise, except upon the Contracting Officer's written consent. 

 (b) Within thirty (30) days of receipt of a request for such a change, the 

Contracting Officer will notify the Contractor of any additional information required by the 

Contracting Officer for processing said request, and both parties will meet to establish a mutually 

agreeable schedule for timely completion of the process. Such process will analyze whether the 

proposed change is likely to: (i) result in the use of Project Water contrary to the terms of this 

Contract; (ii) impair the ability of the Contractor to pay for Project Water furnished under this 

Contract or to pay for any Federally-constructed facilities for which the Contractor is responsible; 

and (iii) have an impact on any Project Water rights applications, permits, or licenses. In addition, 
Contract No. I1r-1460D 

66 

1417 

1418 

1419 

the Contracting Officer shall comply with the National Environmental Policy Act and the Endangered 

Species Act. The Contractor will be responsible for all costs incurred by the Contracting Officer in 

this process, and such costs will be paid in accordance with Article 26 of this Contract. 

1420 FEDERAL LAWS

1421 

1422 

 37. By entering into this Contract, the Contractor does not waive its rights to contest the 

validity or application in connection with the performance of the terms and conditions of this 

Contract of any Federal law or regulation; Provided, That the Contractor agrees to comply with the 

terms and conditions of this Contract unless and until relief from application of such Federal law or 

regulation to the implementing provision of the Contract is granted by a court of competent 

jurisdiction. 

1423 

1424 

1425 

1426 

1427 EMERGENCY RESERVE FUND

1428 

1429 

1430 

1431 

1432 

1433 

 38. The Contractor and Contracting Officer acknowledge that the requirements to 

establish and maintain a minimum reserve fund account to finance extraordinary O&M costs of 

Friant Division Facilities is and will continue to be administered under Contract No. 8-07-20-X0356 

titled Agreement To Transfer The Operation, Maintenance And Replacement And Certain Financial 

And Administrative Activities Related To The Friant-Kern Canal And Associated Works, dated 

March 1, 1998 as amended, supplemented, assigned, or renewed. 

1434 MEDIUM FOR TRANSMITTING PAYMENT

1435 

1436 

1437 

1438 

39. (a) All payments from the Contractor to the United States under this contract 

shall be by the medium requested by the United States on or before the date payment is due. The 

required method of payment may include checks, wire transfers, or other types of payment specified 

by the United States. 
Contract No. I1r-1460D 

67 

1439 

1440 

1441 

1442 

 (b) Upon execution of the contract, the Contractor shall furnish the Contracting 

Officer with the Contractor’s taxpayer’s identification number (TIN). The purpose for requiring the 

Contractor’s TIN is for collecting and reporting any delinquent amounts arising out of the 

Contractor’s relationship with the United States. 

1443 NOTICES

1444 

1445 

1446 

1447 

1448 

1449 

1450 

 40. Any notice, demand, or request authorized or required by this Contract shall be 

deemed to have been given, on behalf of the Contractor, when mailed, postage prepaid, or delivered 

to the Area Manager, South-Central California Area Office, 1243 “N” Street, Fresno, California 

93721, and on behalf of the United States, when mailed, postage prepaid, or delivered to the Board of 

Directors of Southern San Joaquin Municipal Utility District, P.O. Box 279, Delano, California 

93215. The designation of the addressee or the address may be changed by notice given in the same 

manner as provided in this Article of this Contract for other notices. 

1451 CONFIRMATION OF CONTRACT

1452 

1453 

1454 

1455 

1456 

1457 

 41. The Contractor, after the execution of this Contract, shall promptly provide to the 

Contracting Officer a decree of a court of competent jurisdiction of the State of California, 

confirming the execution of this Contract. The Contractor shall furnish the United States a certified 

copy of the final decree, the validation proceedings, and all pertinent supporting records of the court 

approving and confirming this Contract, and decreeing and adjudging it to be lawful, valid, and 

binding on the Contractor. 

1458 CONTRACT DRAFTING CONSIDERATIONS

1459 

1460 

1461 

1462 

1463 

1464 

1465 

 42. Articles 1 through 15, subdivision (c) of Article 16, Articles 18 through 20, 

subdivision (c) of Article 23, Articles 26 through 29, subdivisions (b) and (c) of Article 31, 

subdivisions (b) and (c) of Article 32, Articles 33 through 34, subdivision (b) of Article 36, and 

Articles 37 through 38 of this Contract have been drafted, negotiated, and reviewed by the parties 

hereto, each of whom is sophisticated in the matters to which this Contract pertains, and no one party 

shall be considered to have drafted the stated Articles. 
Contract No. I1r-1460D 

68 

1466 

1467 

 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of the day and 

year first above written. 

THE UNITED STATES OF AMERICA 

By:_________________________________ 

Regional Director, Mid-Pacific Region 

Bureau of Reclamation 

SOUTHERN SAN JOAQUIN 

MUNICIPAL UTILITY DISTRICT 

By: _________________________________ 

TITLE OF AUTHORIZED SIGNATORY 

Attest: 

By: _______________________________ 

TITLE 
Contract No. I1r-1460D 

69 

EXHIBIT A

Map or Description of Service Area 
Irrigation and M&I

Contract No. I1r-1460D

Irrigation Irrigation M&I 1

Water Water Water

Class 1 Class 2

$6.01 $6.01

$6.57

$12.58 $6.01

$34.46 $14.85

$40.36 $18.82

COST-OF-SERVICE (COS) RATES

EXHIBIT B

SOUTHERN SAN JOAQUIN MUNICIPAL UTILITY DISTRICT

2010 Rates and Charges

(Per Acre-Foot)

O&M Components

Conveyance 2

Storage

Water Marketing

IRRIGATION FULL-COST RATE (RRA)

Section 202(3) Rate is applicable to a Qualified Recipient or to a Limited 

Recipient receiving irrigation water on or before October 1, 1981.

Section 205(a)(3) Rate is applicable to a Limited Recipient that did not 

receive irrigation water on or before October 1, 1981.

TOTAL COS (Tier 1 Rate)

$10.94 $4.42

$21.88 $8.84

$9.11 $9.11

$7.00 $7.00

$0.11 $0.11

TIERED PRICING COMPONENTS (In Addition to Total COS Rate Above

Irrigation 

Tier 3 Rate : >90% of Contract Total [Section 202(3) Irrigation Full-Cost 

Rate - COS Rate] (Amount to be added to Tier 1 Rate)

P.L. 106-377 Assessment (Trinity Public Utilities District) 4 [Appendix B, 

Section 203]

Friant Surcharge [Section 3406(c)(1)]

Restoration Fund Payments [Section 3407(d)(2)(A)]

CHARGES AND ASSESSMENTS (Payments in addition to Rates)

P.L. 102-575 Surcharges 3

Tier 2 Rate : >80% <=90% of Contract Total [Section 202(3) Irrigation 

Full-Cost Rate - COS Rate]/2 (Amount to be added to Tier 1 Rate)
Irrigation and M&I

Contract No. I1r-1460D

EXHIBIT B

SOUTHERN SAN JOAQUIN MUNICIPAL UTILITY DISTRICT

2010 Rates and Charges

(Per Acre-Foot)

1

2

3

Conveyance and Conveyance Pumping operation and maintenance costs were removed for ratesetting purposes and are 

to be direct billed.

The Contractor has not projected any delivery of M&I water for the 2010 contract year. A temporary M&I rate will be 

applied upon any M&I water delivery.

EXPLANATORY NOTES

The Trinity Public Utilities District assessment is applicable to each acre-foot of water delivered from 3/1/2010-

2/38/2011 and is adjusted annually.

4

http://www.usbr.gov/mp/cvpwaterrates/ratebooks/index.html

The surcharges were determined pursuant to Tital XXXIV of P.L. 102-575. Restoration Fund surcharges under P.L. 102-

575 are determined on a fiscal year basis (10/1-9/30).

Additional detail of rate components is available on the Internet at 
Exhibit C-1

Repayment Obligation - Lump Sum Option

Friant Contractor: So. San Joaquin MUD

San Joaquin River Restoration Act

Existing Capital Obligation (Article 1(m)) 25,221,872.26 $ 

Irrigation portion of Existing Capital Obligation 25,221,872.26 $ 

20yr CMT as of : 10/01/10 4.050%

Discount Rate (1/2 20yr CMT) 2.025%

Discounted Irrigation Capital $ 20,571,025.74

Non-Discounted M&I Portion of 

Existing Capital Obligation $ -

$ 20,571,025.74

Irrigation Portion of

Beginning Straight Line

Year Balance Repayment

2011 25,221,872 $ 1,261,094 $ 

2012 23,960,779 $ 1,261,094 $ 

2013 22,699,685 $ 1,261,094 $ 

2014 21,438,591 $ 1,261,094 $ 

2015 20,177,498 $ 1,261,094 $ 

2016 18,916,404 $ 1,261,094 $ 

2017 17,655,311 $ 1,261,094 $ 

2018 16,394,217 $ 1,261,094 $ 

2019 $ 15 133 123 $ 1 261 094

Allocated Capital Cost

Repayment Obligation - Lump Sum Option (per Article 

7(a)(2)(A)

2019 $ 15,133,123 $ 1,261,094

2020 13,872,030 $ 1,261,094 $ 

2021 12,610,936 $ 1,261,094 $ 

2022 11,349,843 $ 1,261,094 $ 

2023 10,088,749 $ 1,261,094 $ 

2024 8,827,655 $ 1,261,094 $ 

2025 7,566,562 $ 1,261,094 $ 

2026 6,305,468 $ 1,261,094 $ 

2027 5,044,374 $ 1,261,094 $ 

2028 3,783,281 $ 1,261,094 $ 

2029 2,522,187 $ 1,261,094 $ 

2030 1,261,094 $ 1,261,094 $ 

$ 25,221,872
Exhibit C-2

Repayment Obligation - Installment Payment Option

Friant Contractor: So. San Joaquin MUD

$ 25,221,872.26$ 25,221,872.26 Payment Due Date

Irrigation Portion of

Repayment

Obligation

Non‐discounted

M&I Portion of

Existing Capital

Obligation

1st Installment 5/1/2011 5,296,405.44 $              ‐ $ $ 

20yr CMT ­ 10/1/2010 4.050% 2nd Installment 5/1/2012 5,294,005.92 $              ‐ $ $ 

Discount Rate (1/2 20yr CMT) 2.025% 3rd Installment 5/1/2013 5,297,800.44 $              ‐ $ $ 

4th Installment 1/31/2014 5,305,806.04 $              ‐ $ $ 

$ ­ $           ‐ 21,194,017.84 $ $ 

Irrigation Portion of

Beginning Straight Line

Year Balance Repayment $5,296,405.44 $5,294,005.92 $5,297,800.44 $5,305,806.04

2011 25,221,872 $ 1,261,094 $ 1,261,094 $ 2012 23,960,779 $ 1,261,094 $ 264,830 $ 996,264 $ 2013 22,699,685 $ 1,261,094 $ 264,830 $ 294,465 $ 701,799 $ 

2014 $ 21 438 591 $ 1 261 094 $ 264 830 $ 294 465 $ 329 776 $ 372 023

Allocated Capital Cost

Discounted Capital Amount

Installment Schedule

Non­Discounted M&I Existing Capital

Obligation

Total Repayment Obligation ‐ 

Installment Option (per Article

7(a)(2)(A):

Irrigation Portion of Existing Capital

ObligationExisting Capital Obligation (Article1(m))

2014 $ 21,438,591 $ 1,261,094 $ 264,830 $ 294,465 $ 329,776 $ 372,023

2015 20,177,498 $ 1,261,094 $ 264,830 $ 294,465 $ 329,776 $ 372,023 $ 2016 18,916,404 $ 1,261,094 $ 264,830 $ 294,465 $ 329,776 $ 372,023 $ 2017 17,655,311 $ 1,261,094 $ 264,830 $ 294,465 $ 329,776 $ 372,023 $ 2018 16,394,217 $ 1,261,094 $ 264,830 $ 294,465 $ 329,776 $ 372,023 $ 2019 15,133,123 $ 1,261,094 $ 264,830 $ 294,465 $ 329,776 $ 372,023 $ 2020 13,872,030 $ 1,261,094 $ 264,830 $ 294,465 $ 329,776 $ 372,023 $ 2021 12,610,936 $ 1,261,094 $ 264,830 $ 294,465 $ 329,776 $ 372,023 $ 2022 11,349,843 $ 1,261,094 $ 264,830 $ 294,465 $ 329,776 $ 372,023 $ 2023 10,088,749 $ 1,261,094 $ 264,830 $ 294,465 $ 329,776 $ 372,023 $ 2024 8,827,655 $ 1,261,094 $ 264,830 $ 294,465 $ 329,776 $ 372,023 $ 2025 7,566,562 $ 1,261,094 $ 264,830 $ 294,465 $ 329,776 $ 372,023 $ 2026 6,305,468 $ 1,261,094 $ 264,830 $ 294,465 $ 329,776 $ 372,023 $ 2027 5,044,374 $ 1,261,094 $ 264,830 $ 294,465 $ 329,776 $ 372,023 $ 2028 3,783,281 $ 1,261,094 $ 264,830 $ 294,465 $ 329,776 $ 372,023 $ 2029 2,522,187 $ 1,261,094 $ 264,830 $ 294,465 $ 329,776 $ 372,023 $ 

2030 1,261,094 $ 1,261,094 $ 264,830 $ 294,465 $ 329,776 $ 372,023 $ 

$ 6,292,857 25,221,872 $ 6,296,640 $ 6,307,990 $ 6,324,384 $ 
Exhibit D

Friant Surcharge Reduction Calculation

Friant Contractor:

San Joaquin River Restoration Act So. San Joaquin MUD

Average Annual Delivery ‐ Forecasted for 2020‐2039*                            89,450

Total Projected deliveries (over 20 yr period)**

Article 7(c)                        1,789,000

4.050%

2.025%

Irrigation Portion of Existing Capital Obligation $25,221,872

NPV at Half CMT (Repayment Obligation) $20,571,026

$17,063,042

Financing Cost Offset: @  (Article 7(c)(1)) $3,507,983

NPV of FS Reduction $2,539,990

$967,994

$1,383,730

CVPIA Friant 

Surcharges

Year Beginning Balance Straight Line Repayment

2011 25,221,872 $ 1,261,094 $ $7.00 $7.00 0 967,993.57 $ 

2012 23,960,779 $ 1,261,094 $ $7.00 $7.00 0 1,007,197.31 $ 

2013 22,699,685 $ 1,261,094 $ $7.00 $7.00 0 1,047,988.80 $ 

2014 21,438,591 $ 1,261,094 $ $7.00 $7.00 0 1,090,432.34 $ 

2015 20,177,498 $ 1,261,094 $ $7.00 $7.00 0 1,134,594.85 $ 

2016 18,916,404 $ 1,261,094 $ $7.00 $7.00 0 1,180,545.94 $ 

2017 17,655,311 $ 1,261,094 $ $7.00 $7.00 0 1,228,358.06 $ 

2018 16,394,217 $ 1,261,094 $ $7.00 $7.00 0 1,278,106.56 $ 

2019 15,133,123 $ 1,261,094 $ $7.00 $7.00 0 1,329,869.87 $ 

 2020 Other 

Obligation Credit 

Calculation (Art. 

7(c)(2)) 

20 yr CMT as of 10/1/2010

1/2 20 yr CMT as of 10/1/2010

NPV at Full CMT

Difference between Financing Cost Offset and NPV of FS Reduction

2020 Other Obligation Credit (FV of difference) (Art. 

7(c)(2)))***

Irrigation portion of Allocated Capital Cost Reduction in Friant Surcharge

Surcharge per AcreFoot Before Reduction

Friant 

Surcharge 

Reduction per 

Article 7( 

c)(1)

Friant 

Surcharge 

due per A/F 

after 

Reduction 

Projected 

Total Annual 

Credit

2020 13,872,030 $ 1,261,094 $ $7.00 ($3.00) $ 4.00 ($268,350) $ 1,383,729.60

2021 12,610,936 $ 1,261,094 $ $7.00 ($3.00) $ 4.00 (268,350)

2022 11,349,843 $ 1,261,094 $ $7.00 ($3.00) $ 4.00 (268,350)

2023 10,088,749 $ 1,261,094 $ $7.00 ($3.00) $ 4.00 (268,350)

2024 8,827,655 $ 1,261,094 $ $7.00 ($3.00) $ 4.00 (268,350)

2025 7,566,562 $ 1,261,094 $ $7.00 ($3.00) $ 4.00 (268,350)

2026 6,305,468 $ 1,261,094 $ $7.00 ($3.00) $ 4.00 (268,350)

2027 5,044,374 $ 1,261,094 $ $7.00 ($3.00) $ 4.00 (268,350)

2028 3,783,281 $ 1,261,094 $ $7.00 ($3.00) $ 4.00 (268,350)

2029 2,522,187 $ 1,261,094 $ $7.00 ($3.00) $ 4.00 (268,350)

2030 1,261,094 $ 1,261,094 $ $7.00 ($3.00) $ 4.00 (268,350)

2031 $7.00 ($3.00) $ 4.00 (268,350)

2032 $7.00 ($3.00) $ 4.00 (268,350)

2033 $7.00 ($3.00) $ 4.00 (268,350)

2034 $7.00 ($3.00) $ 4.00 (268,350)

2035 $7.00 ($3.00) $ 4.00 (268,350)

2036 $7.00 ($3.00) $ 4.00 (268,350)

2037 $7.00 ($3.00) $ 4.00 (268,350)

2038 $7.00 ($3.00) $ 4.00 (268,350)

2039 $7.00 ($3.00) $ 4.00 (268,350)

$ 25,221,872 ($5,367,000)
Exhibit D

Friant Surcharge Reduction Calculation

@ Amount of reduction in Friant Surcharge is computed using FPV of Financing Costs 

adjusted to Yr 2020. Annual Friant Surcharge reduction to fully offset Financing 

costs is comuted and presented on per a/f basis. Friant surchage may be 

reduced up to $3 per a/f.

Friant Surcharge (FS) Reduction Calculations

FV of Total Financing Cost for Offset 5,217,691 $ 

Annual Credit Target (370,619) $ 

FS Reduction w/o limit $ (4.14)

FS Reduction limit $ (3.00)

Footnotes

* Average annual delivery forcast indicated above is a mutually agreed upon estimate of 

deliveries during the period 2020-2039 for purposes of calculating the Friant Surcharge 

reduction and related credits only.

** This figure represents the total cumulative deliveries the reduced surchage is applicable 

to, but not beyond 2039. If cummulative actual deliveries exceed this amount prior to 2039, 

the full Friant Surcharge is applicable to deliveries in excess of this amount.

*** The difference represents the amount of financing costs that are not offset through the 

reduced Friant Surcharge computed on this schedule. Pursuant to Section 7(c)(2), this 

amount shall offset the Contractor's other outstanding or future obligations. After 2020, the 

contractors other obligations shall be reduced in the following order to fully offset this 

amount: 1) Payments or prepayments due for O&M expenses and, to the extent applicable, 

2) Additional Capital Obligation. 
EXHIBIT E

Restated Contract1

Irrigation and M&I 

 

Contract No. I1r-1460D 

UNITED STATES 

DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

Central Valley Project, California 

CONTRACT BETWEEN THE UNITED STATES

AND

SOUTHERN SAN JOAQUIN MUNICIPAL UTILITY DISTRICT

PROVIDING FOR PROJECT WATER SERVICE FROM 

FRIANT DIVISION AND 

FOR FACILITIES REPAYMENT

Table of Contents

Article No. Title Page No.

 Preamble 

 Explanatory Recitals 

1 Definitions 

2 Effective Date of Contract 

3 Water to be Made Available and Delivered to the Contractor 

4 Time for Delivery of Water 

5 Point of Diversion and Responsibility for Distribution of Water 

6 Measurement of Water within the Service Area 

7 Rates, Method of Payment for Water, and Accelerated Repayment of Facilities 

8 Non-Interest Bearing Operation and Maintenance Deficits 

9 Recovered Water Account 

10 Sales, Transfers, and Exchanges of Water 

11 Application of Payments and Adjustments 

12 Temporary Reductions--Return Flows 

13 Constraints on the Availability of Water 

14 Omitted 

15 Acreage Limitation 

16 Compliance With Federal Reclamation Laws 

 

1

 Pursuant to subdivision (b) of Article 2 of the Contract to which this exhibit is attached, this Exhibit “E” makes no 

substantive revisions to the Contract to which it is attached and is prepared solely as a matter of administrative 

convenience. In this Exhibit “E”, references to “Contract” or “this Contract” refers to this Restated Contract. 
17 Protection of Water and Air Quality 

18 Water Acquired By the Contractor Other Than From the United States 

19 Opinions and Determinations 

20 Coordination and Cooperation 

21 Charges for Delinquent Payments 

22 Equal Employment Opportunity 

23 General Obligation--Benefits Conditioned Upon Payment 

24 Compliance with Civil Rights Laws and Regulations 

25 Omitted 

26 Contractor to Pay Certain Miscellaneous Costs 

27 Water Conservation 

28 Existing or Acquired Water or Water Rights 

29 Operation and Maintenance by Operating Non-Federal Entity 

30 Contingent on Appropriation or Allotment of Funds 

31 Books, Records, and Reports 

32 Assignment Limited--Successors and Assigns Obligated 

33 Severability 

34 Resolution of Disputes 

35 Officials Not to Benefit 

36 Changes in Contractor's Service Area 

37 Federal Laws 

38 Emergency Reserve Fund

39 Medium for Transmitting Payment 

40 Notices 

41 Confirmation of Contract 

42 Contract Drafting Considerations 

 Signature Page 

 Exhibit A Contractor’s Map or Description of Service Area 

 Exhibit B Rates and Charges 

 Exhibit C-1 Repayment Schedule – Lump Sum Option 

 Exhibit C-2 Repayment Schedule – Installment Option 

 Exhibit D Computation of the Friant Surcharge 

 Exhibit E Omitted 

 
Contract No. I1r-1460D 

1 

2 

3 

4 

UNITED STATES 

DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

Central Valley Project, California 

5 CONTRACT BETWEEN THE UNITED STATES

6 AND

7 SOUTHERN SAN JOAQUIN MUNICIPAL UTILITY DISTRICT

8 PROVIDING FOR PROJECT WATER SERVICE 

9 FROM FRIANT DIVISION AND 

10 FACILITIES REPAYMENT

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

 THIS CONTRACT, made this _____ day of ____________________, 2010, is entered into 

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

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

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

483), June 21, 1963 (77 Stat. 68), October 12, 1982 (96 Stat. 1262), October 27, 1986 (100 Stat. 

3050), as amended, Title XXXIV of the Act of October 30, 1992 (106 Stat. 4706), and Title X, 

Subtitle A, of the Act of March 30, 2009 (123 Stat. 1349), also referred to as the San Joaquin River 

Restoration Settlement Act hereinafter referred to as SJRRSA, all collectively hereinafter referred to 

as Federal Reclamation law, between THE UNITED STATES OF AMERICA, hereinafter referred to 

as the United States and SOUTHERN SAN JOAQUIN MUNICIPAL UTILITY DISTRICT, 

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

existing, and acting pursuant to the laws thereof, with its principal place of business in California; 

 WITNESSETH, That 

24 EXPLANATORY RECITALS

25 

26 

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

Project, California, for diversion, storage, carriage, distribution and beneficial use, for flood control, 
Contract No. I1r-1460D 

2 

27 

28 

29 

30 

31 

32 

33 

34 

35 

36 

37 

38 

39 

40 

41 

42 

43 

44 

45 

46 

47 

irrigation, municipal, domestic, industrial, fish and wildlife mitigation, protection and restoration, 

generation and distribution of electric energy, salinity control, navigation and other beneficial uses, of 

waters of the Sacramento River, the American River, the Trinity River, and the San Joaquin River 

and their tributaries; and 

[2nd] WHEREAS, the United States constructed Friant Dam (thereby creating Millerton 

Lake) and the Friant-Kern and Madera Canals, hereinafter collectively referred to as the Friant 

Division Facilities, which will be used in part for the furnishing of water to the Contractor pursuant to 

the terms of this Contract; and 

 [3rd] WHEREAS, the United States and the Contractor entered into Contract Number I1r1460, as amended, which established terms for the delivery to the Contractor of Project Water from 

the Friant Division from October 18, 1945 through February 28, 1991; and 

 [4th] WHEREAS, the Contractor and the United States have entered into a renewal contract 

and, pursuant to subsection 3404(c)(1) of the Central Valley Project Improvement Act (CVPIA), 

subsequently entered into an interim renewal contract(s), identified as Contract Number (s) I1r1460R and I1r-1460-IR1, which provided for the continued water service to Contractor from March 

1, 1991 through February 28, 2001, and subsequently entered into a long-term renewal contract 

identified as Contract Number I1r-1460-LTR1, which provided for continued water service to 

Contractor through February 28, 2026, which was amended January 18, 2007, and is herein referred 

to as the "Existing Contract”; and 

 [5th] WHEREAS, pursuant to Section 8 of the Act of June 17, 1902 (32 Stat. 388), the 

United States has acquired water rights and other rights to the flows of the San Joaquin River, 
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including without limitation the permits issued as the result of Decision 935 by the California State 

Water Resource Control Board and the contracts described in subdivision (n) of Article 3 of this 

Contract, pursuant to which the Contracting Officer develops, diverts, stores and delivers Project 

Water stored or flowing through Millerton Lake in accordance with State and Federal law for the 

benefit of Project Contractors in the Friant Division and for other specified Project purposes; and 

 [6th] WHEREAS, the water supplied to the Contractor pursuant to this Contract is Project 

Water developed through the exercise of the rights described in the fifth (5th) Explanatory Recital of 

this Contract; and 

 [7th] WHEREAS, as a result of litigation entitled “Natural Resources Defense Council, et 

al. v Kirk Rogers, et al.” No. CIV-S-88-1658LLK/GGH, certain contractors from the Friant Division 

entered into a Stipulation of Settlement dated September 13, 2006, (the “Settlement”), which 

settlement prescribes a Restoration Goal and a Water Management Goal and which Settlement was 

subsequently confirmed and implemented through the SJRRSA; and 

[8th] WHEREAS, the SJRRSA authorizes and directs the Secretary to convert the Existing 

Contract to a repayment contract under subsection (d) of Section 9 of the Act of August 4, 1939, no 

later than December 31, 2010, and further directs that such contract shall require the accelerated 

repayment of the Contractors’ allocated share of construction costs, either as a lump sum payment by 

January 31, 2011 or in annual installments by January 31, 2014, which funds will in turn be made 

available for implementation of the Settlement and SJRRSA, and which costs otherwise would have 

been payable through annual water rates, with full repayment by 2030; and 
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[9th] WHEREAS, such repayment of costs will assist the United States with 

implementation of actions required under the Settlement and the SJRRSA and provide the Contractor 

the benefits provided in Section 10010 of the SJRRSA; and 

[10th] WHEREAS, subsection (4) of Section 1 of the Act of July 2, 1956 (1956 Act) directs 

the Secretary to provide that the other party to any contract entered into pursuant to subsection (d) of 

Section 9 of the Act of August 4, 1939 (repayment contract) or pursuant to subsection (e) of Section 9 

of the Act of August 4, 1939 (water service contract) shall “have the first right (to which the rights of 

the holders of any other type of irrigation water contract shall be subordinate) to a stated share or 

quantity of the project’s available water supply for beneficial use on the irrigable lands within the 

boundaries of, or owned by, the party and a permanent right to such share or quantity upon 

completion of payment of the amount assigned for ultimate return” by the contractor subject to 

fulfillment of all obligations under the contract; and 

 [11th] WHEREAS, among other things, this Contract includes provisions granting the 

Contractor the permanent right described in the tenth (10th) Explanatory Recital; and 

 [12th] WHEREAS, the Contractor has demonstrated to the satisfaction of the Contracting 

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

beneficial use and/or has demonstrated projected future demand for water use such that the 

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

of Project Water to be made available to it pursuant to this Contract; and 
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 [13th] WHEREAS, water obtained from the Central Valley Project has been relied upon by 

urban and agricultural areas within California for more than fifty (50) years and is considered by the 

Contractor as an essential portion of its water supply; and 

 [14th] WHEREAS, the economies of regions within the Central Valley Project, including the 

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

Central Valley Project; and 

 [15th] WHEREAS, the Secretary intends through coordination, cooperation, and partnerships 

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

Project purposes; and 

 [16th] WHEREAS, the mutual goals of the United States and the Contractor include: to 

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

the Central Valley Project as required by law; to guard reasonably against Project Water shortages; to 

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

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

States relative to the Central Valley Project; and 

 [17th] WHEREAS, any time during the Year the Contracting Officer determines that a need 

exists to evacuate water from Millerton Lake in order to prevent or minimize spill or to meet flood 

control criteria (currently referred to as “uncontrolled season”), taking into consideration, among 

other things, anticipated upstream reservoir operations and the most probable forecast of snowmelt 

and runoff projections for the upper San Joaquin River, Friant Division Project Contractors utilize a 

portion of their undependable Class 2 Water in their service areas to, among other things, assist in the 
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management and alleviation of groundwater overdraft in the Friant Division service area, provide 

opportunities for restoration of the San Joaquin River below Friant Dam, minimize flooding along the 

San Joaquin River, encourage optimal water management, and maximize the reasonable and 

beneficial use of the water; and 

 [18th] WHEREAS, the parties desire and intend that this Contract not provide a disincentive 

to the Friant Division Project Contractors continuing to carry out the beneficial activities set out in 

the Explanatory Recital immediately above; and 

 [19th] WHEREAS, the United States has determined that the Contractor has fulfilled all of 

its obligations under the Existing Contract. 

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

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

119 DEFINITIONS

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

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

 (a) “Additional Capital Obligation” shall mean any additional construction costs 

or other capitalized costs incurred after the effective date of this Contract or not reflected in the 

Existing Capital Obligation as provided in Section 10010(a)(3)(B) of the SJRRSA and any amounts 

payable by Contractor as determined through the final adjustment described and required by Section 

10010(b) of the SJRRSA; 

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

dates inclusive; 
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 (c) “Charges” shall mean the payments required by Federal Reclamation law in 

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

pursuant to this Contract and consistent with the SJRRSA; 

 (d) "Class 1 Water" shall mean that supply of water stored in or flowing through 

Millerton Lake which, subject to the contingencies hereinafter described in Articles 3, 12, and 13 of 

this Contract, will be available for delivery from Millerton Lake and the Friant-Kern and Madera 

Canals as a dependable water supply during each Year; 

 (e) "Class 2 Water" shall mean that supply of water which can be made available 

subject to the contingencies hereinafter described in Articles 3, 12, and 13 of this Contract for 

delivery from Millerton Lake and the Friant-Kern and Madera Canals in addition to the supply of 

Class 1 Water. Because of its uncertainty as to availability and time of occurrence, such water will 

be undependable in character and will be furnished only if, as, and when it can be made available as 

determined by the Contracting Officer; 

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

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

Total; 

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

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

regulation; 

 (h) "Contract Total" shall mean the maximum amount of Class 1 Water plus the 

maximum amount of Class 2 Water specified in subdivision (a) of Article 3 of this Contract and is the 
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stated share or quantity of the Project’s available water supply to which the Contractor has a 

permanent right in accordance with the 1956 Act and the terms of this Contract, due to the 

Contractor's complete payment of the Repayment Obligation, notwithstanding any Additional Capital 

Obligation that may later be established, which right shall not be disturbed so long as the Contractor 

fulfills all of its obligations under this Contract; 

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

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

which may be modified from time to time in accordance with Article 36 of this Contract without 

amendment of this Contract; 

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

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

 (k) Omitted; 

 (l) Omitted; 

(m) “Existing Capital Obligation” shall mean the remaining amount of construction 

costs of the Contractor identified in the Central Valley Project Irrigation Water Rates and/or 

Municipal and Industrial Water Rates, respectively, dated January 25, 2007, as adjusted to reflect 

payments not reflected in such schedule, pursuant to Section 10010(a)(3)(A) of the SJRRSA. The 

Contracting Officer has computed the Existing Capital Obligation in a manner consistent with the 

SJRRSA and such amount is set forth in Exhibits “C-1” and “C-2”, incorporated herein by reference; 

 (n) “Financing Costs”, for purposes of computing the reduction of certain charges 

as specified in subdivision (c) of Article 7 of this Contract, shall mean the difference between the net 
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present value of the Existing Capital Obligation discounted using the full Treasury rate and the 

Existing Capital Obligation discounted using one-half the Treasury Rate, as set forth in Section 

10010(d)(3) of the SJRRA; 

 (o) Omitted;

 (p) Omitted; 

 (q) Omitted; 

 (r) “Irrigation Water” shall mean water made available from the Project that is 

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

thereto, and watering of livestock; 

 (s) Omitted; 

 (t) “Long Term Historic Average” shall mean the average of the final forecast of 

Water Made Available to the Contractor pursuant to this Contract and the contracts referenced in the 

third (3rd) and fourth (4th) Explanatory Recitals of this Contract; 

 (u) “Municipal and Industrial (M&I) Water” shall mean Water Made Available 

from the Project other than Irrigation Water made available to the Contractor. M&I Water shall 

include water used for human use and purposes such as the watering of landscaping or pasture for 

animals (e.g., horses) which are kept for personal enjoyment or water delivered to land holdings 

operated in units of less than five (5) acres unless the Contractor establishes to the satisfaction of the 

Contracting Officer that the use of water delivered to any such landholding is a use described in 

subdivision (r) of this Article of this Contract; 

 (v) Omitted; 
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 (w) “Operation and Maintenance” or “O&M" shall mean normal and reasonable 

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

Project facilities; 

 (x) “Operating Non-Federal Entity" shall mean the Friant Water Authority, or its 

successor, a Non-Federal entity, which has the obligation to operate and maintain all or a portion of 

the Friant Division Facilities pursuant to an agreement with the United States and which may have 

funding obligations with respect thereto; 

 (y) Omitted. 

 (z) “Project” shall mean the Central Valley Project owned by the United States 

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

 (aa) “Project Contractors” shall mean all parties who have a long-term water 

service contract or repayment contract for Project Water from the Project with the United States 

pursuant to Federal Reclamation law; 

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

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

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

 (cc) “Rates” shall mean the payments for O&M costs as determined annually by the 

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

Project, as described in subdivision (a) of Article 7 of this Contract and illustrated in Exhibit “B”, 

attached hereto; 
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 (dd) “Recovered Water Account” shall mean the program, as defined in the 

Settlement, to make water available to all of the Friant Division Project Contractors who provide 

water to meet interim flows or restoration flows for the purpose of reducing or avoiding the impact of 

the interim flows and restoration flows on such contractors; 

 (ee) “Repayment Obligation”, as provided in subdivision (a)(2)(A) of Article 7 of 

this Contract, shall be the Existing Capital Obligation, as defined herein, discounted by one-half of 

the Treasury rate and computed consistent with the provisions of Section 10010(3)(A) of the 

SJRRSA to be paid as either a lump sum payment by January 31, 2011 or in approximately equal 

annual installments by January 31, 2014; 

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

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

through any agency of the Department of the Interior; 

 (gg) “Settlement” shall mean the Stipulation of Settlement dated September 13, 

2006, the Order Approving Stipulation of Settlement, and the Judgment and further orders issued by 

the Court pursuant to the terms and conditions of the Settlement in Natural Resources Defense 

Council, et al. v. Rodgers, et al., No. CIV-S-88-1658 LLJ/GGH; 

 (hh) Omitted; 

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

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

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

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

 (kk) “Water Management Goal” shall mean the goal of the Settlement to reduce or 

avoid adverse water supply impacts to all the Friant Division Project Contractors that may result from 

the interim flows and restoration flows provided for in the Settlement; 

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

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

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

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

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

242 EFFECTIVE DATE OF CONTRACT

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2. (a) This Contract shall become effective on the date first hereinabove written and 

shall continue so long as the Contractor is making the annual payments required herein and paying 

any other amounts owing under this Contract and applicable law, unless it is terminated by the 

Contracting Officer by reason of a material uncured breach by the Contractor; Provided, That the 

Contracting Officer shall not seek to terminate this Contract by reason of an asserted material 

uncured breach by the Contractor unless it has first provided at least sixty (60) days written notice of 

the asserted breach to the Contractor and the Contractor has failed to cure such breach (or to 

diligently commence curative actions satisfactory to the Contracting Officer for a breach that cannot 

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Contract No. I1r-1460D 

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be fully cured within sixty (60) days) within the sixty (60)-day notice period; Provided further, That 

this Contract may be terminated at any time by mutual consent of the parties hereto. 

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(b) The Contractor has paid the Repayment Obligation, and notwithstanding any 

Additional Capital Obligation that may later be established, the tiered pricing component and the 

acreage limitations, reporting, and Full Cost pricing provisions of Federal Reclamation law, shall no 

longer be applicable to the Contractor. 

 (c) This Contract supersedes in its entirety and is intended to replace in full the 

Existing Contract; Provided, That if this Contract is terminated or determined to be invalid or 

unenforceable for any reason other than a material uncured breach of this Contract by the Contractor, 

the Existing Contract shall not be superseded and shall be in full force and effect. 

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261 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE CONTRACTOR

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

and licenses, Federal law, the Settlement including the SJRRSA, and subject to the provisions set 

forth in Articles 12 and 13 of this Contract, the Contracting Officer shall make available for delivery 

to the Contractor from the Project 97,000 acre-feet of Class 1 Water and 50,000 acre-feet of Class 2 

Water for irrigation and M&I purposes. The quantity of Water Delivered to the Contractor in 

accordance with this subdivision shall be scheduled and paid for pursuant to the provisions of 

Articles 4 and 7 of this Contract. 

 (b) The Contractor has paid the Repayment Obligation, and notwithstanding any 

Additional Capital Obligation that may later be established, the Contractor has a permanent right to 

the Contract Total in accordance with the 1956 Act and the terms of this Contract. This right shall 
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not be disturbed so long as the Contractor fulfills all of its obligations hereunder. The quantity of 

water made available for delivery in any given Year shall remain subject to the terms and conditions 

of subdivision (a) of this Article of this Contract. 

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

legal requirements. 

 (d) The Contractor shall make reasonable and beneficial use of all Project Water 

or other water furnished pursuant to this Contract. Groundwater recharge programs, groundwater 

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

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

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

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

described in the Contractor’s Water Conservation Plan submitted pursuant to Article 27 of this 

Contract; 

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Provided further, That such Water Conservation Plan demonstrates sufficient lawful uses 

exist in the Contractor’s Service Area so that using a long-term average, the quantity of Delivered 

Water is demonstrated to be reasonable for such uses and in compliance with Federal Reclamation 

law. Groundwater recharge programs, groundwater banking programs, surface water storage 

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

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

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

Water rights, and Project operational concerns. The Contracting Officer will address such concerns 

in regulations, policies, or guidelines. 

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 (e) The Contractor, through this Contract, shall comply with requirements 

applicable to the Contractor in biological opinion(s) prepared as a result of the consultation regarding 

the execution of the Existing Contract undertaken pursuant to Section 7 of the Endangered Species 

Act of 1973, as amended, as well as the requirements of any other biological opinions applicable to 

Project Water delivery under this Contract, that are within the Contractor’s legal authority to 

implement. The Contractor shall comply with the limitations or requirements imposed by 

environmental documentation applicable to the Contractor and within its legal authority to implement 

regarding specific activities, including conversion of Irrigation Water to M&I Water. Nothing herein 

shall be construed to prevent the Contractor from challenging or seeking judicial relief in a court of 

competent jurisdiction with respect to any biological opinion or other environmental documentation 

referred to in this Article of this Contract. 

(f) Subject to subdivisions (l) and (n) of this Article of this Contract, following the 

declaration of Water Made Available under Article 4 of this Contract, the Contracting Officer will 

make a determination whether Project Water, or other water available to the Project, can be made 

available to the Contractor in addition to the Contract Total in this Article of this Contract during the 

Year without adversely impacting the Project or other Project Contractors and consistent with the 

Secretary’s legal obligations. At the request of the Contractor, the Contracting Officer will consult 

with the Contractor prior to making such a determination. Subject to subdivisions (l) and (n) of this 

Article of this Contract, if the Contracting Officer determines that Project Water, or other water 

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

announce the availability of such water and shall so notify the Contractor as soon as practical. The 
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Contracting Officer will thereafter meet with the Contractor and other Project Contractors capable of 

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

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

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

and policies. 

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

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

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

quantity of Project Water which may be made available by the United States to the Contractor during 

the subsequent Year referred to as “pre-use.” The Contracting Officer’s written approval may permit 

such uses in accordance with applicable statutes, regulations, guidelines, and policies. 

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

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

not be disturbed so long as the Contractor shall fulfill all of its obligations under this Contract. 

Nothing in the preceding sentence shall affect the Contracting Officer’s ability to impose shortages 

under Article 12 or subdivision (b) of Article 13 of this Contract. 

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

delivered for purposes other than those described in subdivisions (r) and (u) of Article 1 of this 

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

conditions of such approval. 
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 (j) The Contracting Officer shall make reasonable efforts to protect the water 

rights and other rights described in the fifth (5th) Explanatory Recital of this Contract and to provide 

the water available under this Contract. The Contracting Officer shall not object to participation by 

the Contractor, in the capacity and to the extent permitted by law, in administrative proceedings 

related to the water rights and other rights described in the fifth (5th) Explanatory Recital of this 

Contract; Provided however, That the Contracting Officer retains the right to object to the substance 

of the Contractor’s position in such a proceeding. 

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Provided further, that in such proceedings the 

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

use Project Water. 

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 (k) Project Water furnished to the Contractor during any month designated in a 

schedule or revised schedule submitted by the Contractor and approved by the Contracting Officer 

shall be deemed to have been accepted by the Contractor as Class 1 Water to the extent that Class 1 

Water is called for in such schedule for such month and shall be deemed to have been accepted as 

Class 2 Water to the extent Class 2 Water is called for in such schedule for such month. If in any 

month the Contractor diverts a quantity of water in addition to the total amount of Class 1 Water and 

Class 2 Water set forth in the Contractor's approved schedule or revised schedule for such month, 

such additional diversions shall be charged first against the Contractor's remaining Class 2 Water 

supply available in the current Year. To the extent the Contractor's remaining Class 2 Water supply 

available in the current Year is not sufficient to account for such additional diversions, such 

additional diversions shall be charged against the Contractor's remaining Class 1 Water supply 

available in the current Year. To the extent the Contractor's remaining Class 1 Water and Class 2 
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Water supplies available in the current Year are not sufficient to account for such additional 

diversions, such additional diversions shall be charged first against the Contractor's available Class 2 

Water supply and then against the Contractor's available Class 1 Water supply, both for the following 

Year. Payment for all additional diversions of water shall be made in accordance with Article 7 of 

this Contract. 

 (l) If the Contracting Officer determines there is a Project Water supply available 

at Friant Dam as the result of an unusually large water supply not otherwise storable for Project 

purposes or infrequent and otherwise unmanaged flood flows of short duration, such water will be 

made available to the Contractor and others under Section 215 of the Act of October 12, 1982,

pursuant to the priorities specified below if the Contractor enters into a temporary contract with the 

United States not to exceed one (1) year for the delivery of such water or as otherwise provided for in 

Federal Reclamation law and associated regulations. Such water may be identified by the Contractor 

either (i) as additional water to supplement the supply of Class 1 Water and/or Class 2 Water made 

available to it pursuant to this Contract or, (ii) upon written notification to the Contracting Officer, as 

water to be credited against the Contractor's Class 2 Water supply available pursuant to this Contract. 

The Contracting Officer shall make water determined to be available pursuant to this subsection 

according to the following priorities: first, to contractors for Class 1 Water and/or Class 2 Water 

within the Friant Division; second, to contractors in the Cross Valley Division of the Project. The 

Contracting Officer will consider requests from other parties for Section 215 Water for use within the 

area identified as the Friant Division service area in the environmental assessment developed in 

connection with the execution of the Existing Contract. 
Contract No. I1r-1460D 

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 (m) Nothing in this Contract, nor any action or inaction of the Contractor or 

Contracting Officer in connection with the implementation of this Contract, is intended to override, 

modify, supersede or otherwise interfere with any term or condition of the water rights and other 

rights referred in the fifth (5th) Explanatory Recital of this Contract. 

 (n) The rights of the Contractor under this Contract are subject to the terms of the 

contract for exchange waters, dated July 27, 1939, between the United States and the San Joaquin and 

Kings River Canal and Irrigation Company, Incorporated, et al., (hereinafter referred to as the 

Exchange Contractors), Contract No. I1r-1144, as amended. The United States agrees that it will not 

deliver to the Exchange Contractors thereunder waters of the San Joaquin River unless and until 

required by the terms of said contract, and the United States further agrees that it will not voluntarily 

and knowingly determine itself unable to deliver to the Exchange Contractors entitled thereto from 

water that is available or that may become available to it from the Sacramento River and its 

tributaries or the Sacramento-San Joaquin Delta those quantities required to satisfy the obligations of 

the United States under said Exchange Contract and under Schedule 2 of the Contract for Purchase of 

Miller and Lux Water Rights (Contract I1r-1145, dated July 27, 1939). 

 (o) Pursuant to and consistent with section 10004 of SJRRSA and Paragraph 16 of 

the Settlement, the Contracting Officer is required to develop and implement a plan for recirculation, 

recapture, reuse, exchange or transfer of water released for restoration flows or interim flows, as 

those terms are defined in the Settlement, to reduce or avoid impacts to water deliveries caused by 

said restoration flows or interim flows. Water developed through such activities may be made 

available (i) to the Contractor without the need of an additional contract, and/or (ii) to others on 
Contract No. I1r-1460D 

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397 

398 

behalf of the Contractor under terms mutually acceptable to the Contractor and the Contracting 

Officer that are consistent with the Water Management Goal. 

399 TIME FOR DELIVERY OF WATER

400 

401 

402 

403 

404 

405 

406 

407 

408 

409 

410 

411 

412 

413 

414 

415 

416 

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

announce the Contracting Officer’s initial declaration of the Water Made Available. The declaration 

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

hydrologic conditions and a new declaration with changes, if any, to the Water Made Available will 

be made. The Contracting Officer shall provide forecasts of Project operations and the basis of the 

estimate, with relevant supporting information, upon the written request of the Contractor. 

Concurrently with the declaration of the Water Made Available, the Contracting Officer shall provide 

the Contractor with the updated Long Term Historic Average. The declaration of Project operations 

will be expressed in terms of both Water Made Available and the Long Term Historic Average. 

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

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

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

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

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

for the Year commencing on such March 1. 

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

Project Water the Contractor intends to put to reasonable and beneficial use within the Contractor's 
Contract No. I1r-1460D 

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417 

418 

419 

420 

421 

422 

Service Area, or to sell, transfer or exchange pursuant to Article 10 of this Contract or bank pursuant 

to subdivision (d) of Article 3 of this Contract during any Year. 

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

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

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

revision(s), satisfactory to the Contracting Officer, thereto submitted within a reasonable time prior to 

the date(s) on which the requested change(s) is/are to be implemented; Provided, That the total 

amount of water requested in that schedule or revision does not exceed the quantities announced by 

the Contracting Officer pursuant to the provisions of subdivision (a) of Article 3 of this Contract, and 

the Contracting Officer determines that there will be sufficient capacity available in the appropriate 

Friant Division Facilities to deliver the water in accordance with that schedule; 

423 

424 

425 

426 

Provided further, 

That the Contractor shall not schedule the delivery of any water during any period as to which the 

Contractor is notified by the Contracting Officer or Operating Non-Federal Entity that Project 

facilities required to make deliveries to the Contractor will not be in operation because of scheduled 

O&M. 

427 

428 

429 

430 

431 

432 

433 

434 

435 

436 

437 

 (e) The Contractor may, during the period from and including November 1 of each 

Year through and including the last day of February of that Year, request delivery of any amount of 

the Class 1 Water estimated by the Contracting Officer to be made available to it during the following 

Year. The Contractor may, during the period from and including January 1 of each Year (or such 

earlier date as may be determined by the Contracting Officer) through and including the last day of 

February of that Year, request delivery of any amount of Class 2 Water estimated by the Contracting 
Contract No. I1r-1460D 

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438 

439 

440 

441 

442 

443 

444 

445 

446 

447 

448 

Officer to be made available to it during the following Year. Such water shall hereinafter be referred 

to as pre-use water. Such request must be submitted in writing by the Contractor for a specified 

quantity of pre-use and shall be subject to the approval of the Contracting Officer. Payment for preuse water so requested shall be at the appropriate Rate(s) for the following Year in accordance with 

Article 7 of this Contract and shall be made in advance of delivery of any pre-use water. The 

Contracting Officer shall deliver such pre-use water in accordance with a schedule or any revision 

thereof submitted by the Contractor and approved by the Contracting Officer, to the extent such water 

is available and to the extent such deliveries will not interfere with the delivery of Project Water 

entitlements to other Friant Division contractors or the physical maintenance of the Project facilities. 

The quantities of pre-use Water Delivered pursuant to this subdivision shall be deducted from the 

quantities of water that the Contracting Officer would otherwise be obligated to make available to the 

Contractor during the following Year; Provided, That the quantity of pre-use water to be deducted 

from the quantities of either Class 1 Water or Class 2 Water to be made available to the Contractor in 

the following Year shall be specified by the Contractor at the time the pre-use water is requested or as 

revised in its first schedule for the following Year submitted in accordance with subdivision (b) of 

this Article of this Contract, based on the availability of the following Year water supplies as 

determined by the Contracting Officer. 

449 

450 

451 

452 

453 

454 

455 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

456 

457 

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

Contract shall be delivered to the Contractor at a point or points of delivery either on Project facilities 
Contract No. I1r-1460D 

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458 

459 

460 

461 

462 

463 

464 

465 

466 

467 

468 

469 

470 

471 

472 

473 

474 

475 

476 

477 

478 

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

Contractor. 

 (b) The Contracting Officer, the Operating Non-Federal Entity, or other 

appropriate entity shall make all reasonable efforts to maintain sufficient flows and levels of water in 

the Friant-Kern Canal to deliver Project Water to the Contractor at specific turnouts established 

pursuant to subdivision (a) of this Article of this Contract. 

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

Service Area unless approved in advance by the Contracting Officer. The Contractor shall deliver 

Project Water in accordance with applicable Federal Reclamation law. 

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

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

States, the Operating Non-Federal Entity or other appropriate entity as designated by the Contracting 

Officer (hereafter “other appropriate entity”) at the point or points of delivery established pursuant to 

subdivision (a) of this Article of this Contract. Upon the request of either party to this Contract, the 

Contracting Officer shall investigate, or cause to be investigated by the responsible Operating NonFederal Entity, the accuracy of such measurements and shall take any necessary steps to adjust any 

errors appearing therein. For any period of time when accurate measurements have not been made, 

the Contracting Officer shall consult with the Contractor and the responsible Operating Non-Federal 

Entity prior to making a final determination of the quantity delivered for that period of time. 

 (e) Neither the Contracting Officer nor any Operating Non-Federal Entity shall be 

responsible for the control, carriage, handling, use, disposal, or distribution of Project Water 
Contract No. I1r-1460D 

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479 

480 

481 

482 

483 

484 

485 

486 

487 

488 

489 

490 

491 

Delivered to the Contractor pursuant to this Contract beyond the delivery points specified in 

subdivision (a) of this Article of this Contract. The Contractor shall indemnify the United States, its 

officers, employees, agents, and assigns on account of damage or claim of damage of any nature 

whatsoever for which there is legal responsibility, including property damage, personal injury, or 

death arising out of or connected with the control, carriage, handling, use, disposal, or distribution of 

such Project Water beyond such delivery points, except for any damage or claim arising out of: (i) 

acts or omissions of the Contracting Officer or any of its officers, employees, agents, or assigns, 

including any responsible Operating Non-Federal Entity, with the intent of creating the situation 

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

officers, employees, agents, or assigns, including any responsible Operating Non-Federal Entity; (iii) 

negligence of the Contracting Officer or any of its officers, employees, agents, or assigns including 

any responsible Operating Non-Federal Entity; or (iv) damage or claims resulting from a malfunction 

of facilities owned and/or operated by the United States or responsible Operating Non-Federal Entity; 

Provided, That the Contractor is not the Operating Non-Federal Entity that owned or operated the 

malfunctioning facility(ies) from which the damage claim arose. 

492 

493 

494 MEASUREMENT OF WATER WITHIN THE SERVICE AREA

495 

496 

497 

498 

499 

 6. (a) The Contractor has established a measurement program satisfactory to the 

Contracting Officer; all surface water delivered for irrigation purposes within the Contractor’s 

Service Area is measured at each agricultural turnout; and water delivered for M&I purposes is 

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

methods of comparable effectiveness must be acceptable to the Contracting Officer. The Contractor 
Contract No. I1r-1460D 

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500 

501 

502 

503 

504 

505 

506 

507 

508 

509 

510 

511 

512 

513 

514 

515 

516 

517 

518 

519 

520 

shall be responsible for installing, operating, and maintaining and repairing all such measuring 

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

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

methods to ensure its proper management of the water, to bill water users for water delivered by the 

Contractor; and, if applicable, to record water delivered for M&I purposes by customer class as 

defined in the Contractor’s water conservation plan provided for in Article 27 of this Contract. 

Nothing herein contained, however, shall preclude the Contractor from establishing and collecting 

any charges, assessments, or other revenues authorized by California law. 

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

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

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

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

service connections or alternative measurement programs approved by the Contracting Officer, at 

which such measurement devices or water measuring methods are being used, and, if applicable, 

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

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

Contractor in writing within sixty (60) days as to the adequacy of, and necessary modifications, if 

any, of the measuring devices or water measuring methods identified in the Contractor’s report and if 

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

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

parties shall within sixty (60) days following the Contracting Officer‘s response, negotiate in good 
Contract No. I1r-1460D 

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521 

522 

523 

524 

525 

526 

527 

528 

529 

530 

531 

532 

faith the earliest practicable date by which the Contractor shall modify said measuring devices and/or 

measuring methods as required by the Contracting Officer to ensure compliance with subdivision (a) 

of this Article of this Contract. 

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

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

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

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

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

Contractor’s Service Area during the previous Year. 

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

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

533 RATES, METHOD OF PAYMENT FOR WATER,

534 AND ACCELERATED REPAYMENT OF FACILITIES 

535 

536 

537 

538 

539 

540 

541 

542 

 7. (a) The Contractor’s cost obligations for all Delivered Water shall be determined 

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

Secretary’s then-existing ratesetting policy for M&I Water, consistent with the SJRRSA, and such 

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

comment procedure; (ii) applicable Federal Reclamation law and associated rules and regulations, or 

policies; and (iii) other applicable provisions of this Contract. 

(1) The Contractor shall pay the United States as provided for in this 

Article of this Contract for the Delivered Water at Rates and Charges determined in accordance with 
Contract No. I1r-1460D 

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543 

544 

545 

546 

547 

548 

549 

550 

551 

552 

553 

554 

555 

556 

557 

558 

559 

560 

561 

562 

policies for Irrigation Water and M&I Water. The Contractor’s Rates shall be established to recover 

its estimated reimbursable costs included in the O&M Component of the Rate and amounts 

established to recover other charges and deficits, other than the construction costs. The Rates for 

O&M costs and Charges shall be adjusted, as appropriate, in accordance with the provisions of the 

SJRRSA. 

 (2) Omitted. 

 (A) Omitted. 

 (B) Project construction costs or other capitalized costs attributable 

to capital additions to the Project incurred after the effective date of this Contract or that are not 

reflected in the schedules referenced in Exhibits “C-1” and “C-2” and properly assignable to the 

Contractor, shall be repaid as prescribed by the SJRRSA without interest except as required by law. 

Consistent with Federal Reclamation law, interest shall continue to accrue on the M&I portion of 

unpaid Project construction costs or other capitalized cost assigned to the Contractor until such costs 

are paid. Increases or decreases in Project construction costs or other capitalized costs assigned to the 

Contractor caused solely by annual adjustment of Project construction costs or other capitalized costs 

assigned to each CVP contractor by the Secretary shall not be considered in determining the amounts 

to be paid pursuant to this subdivision (a)(2)(B), but will be considered under subdivision (b) of this 

Article. A separate repayment agreement shall be established by the Contractor and the Contracting 

Officer to accomplish repayment of all additional Project construction costs or other capitalized costs 

assigned to the Contractor within the timeframe prescribed by the SJRRSA subject to the following: 
Contract No. I1r-1460D 

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563 

564 

565 

566 

567 

(1) If the collective annual Project construction costs or 

other capitalized costs that are incurred after the effective date of this Contract and properly 

assignable to the contractors are less than $5,000,000, then the portion of such costs properly 

assignable to the Contractor shall be repaid in not more than five (5) years after notification of the 

allocation. This amount is the result of a collective annual allocation of Project construction costs to 

the contractors exercising contract conversions; Provided, That the reference to the amount of 

$5,000,000 shall not be a precedent in any other context. 

568 

569 

570 

571 

572 

573 

574 

(2) If the collective annual Project construction costs or 

other capitalized costs that are incurred after the effective date of this Contract and properly 

assignable to the contractors are $5,000,000 or greater, then the portion of such costs properly 

assignable to the Contractor shall be repaid as provided by applicable Federal Reclamation law. This 

amount is the result of a collective annual allocation of Project construction costs to the contractors 

exercising contract conversions; Provided, That the reference to the amount of $5,000,000 shall not 

be a precedent in any other context. 

575 

576 

577 

578 

579 

580 

581 

582 

583 

 (b) Consistent with Section 10010(b) of the SJRRSA, following a final cost 

allocation by the Secretary upon completion of the construction of the Central Valley Project, the 

amounts paid by the Contractor shall be subject to adjustment to reflect the effect of any reallocation 

of Project construction costs or other capitalized costs assigned to the Contractor that may have 

occurred between the determination of Contractor’s Existing Capital Obligation and the final cost 

allocation. In the event that the final cost allocation, as determined by the Secretary, indicates that 

the costs properly assignable to the Contractor, as determined by the Contracting Officer, are greater 
Contract No. I1r-1460D 

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584 

585 

586 

587 

588 

589 

590 

591 

592 

593 

594 

595 

596 

597 

598 

599 

600 

601 

602 

603 

604 

than the Existing Capital Obligation and other amounts of Project construction costs or other 

capitalized costs paid by the Contractor, then the Contractor shall be obligated to pay the remaining 

allocated costs. The term of such additional repayment contract shall be no less than one (1) year and 

no more than ten (10) years, however, mutually agreeable provisions regarding the rate of repayment 

of such amount may be developed by the parties. In the event that the final cost allocation, as 

determined by the Secretary, indicates that the costs properly assignable to the Contractor, as 

determined by the Contracting Officer, are less than the Existing Capital Obligation and other 

amounts of Project construction costs or other capitalized costs paid by the Contractor, then the 

Contracting Officer shall credit such overpayment as an offset against any outstanding or future 

obligation of the Contractor, consistent with the SJRRSA. This Contract shall be implemented in a 

manner consistent with Section 10010(f) of the SJRRSA. 

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

Contractor an estimate of the Charges for Project Water that will be applied to the period October 1, 

of the current Calendar Year, through September 30, of the following Calendar Year, and the basis 

for such estimate. The Contractor shall be allowed not less than two (2) months to review and 

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

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

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

notification shall revise Exhibit “B”. Charges shall be subject to reduction consistent with the 

SJRRSA based upon the average annual delivery amount agreed to by the Contracting Officer and the 

Contractor. 
Contract No. I1r-1460D 

30 

605 

606 

607 

 (1) For the years 2020 through 2039 inclusive, Charges shall reflect the 

reduction on a per acre-foot basis consistent with Section 10010(d)(1) of the SJRRSA. Exhibit “D” 

sets forth the reduction in Charges to offset the Financing Costs as prescribed in Section 10010(d)(1) 

of the SJRRSA; Provided, That if the Secretary determines such Charges are otherwise needed, an 

equivalent reduction will be made to O&M costs consistent with such provisions of the SJRRSA. 

Consistent with Section 10010(d)(1) of the SJRRSA and as shown in Exhibit “D”, the Friant 

Surcharge reduction has been calculated based upon the anticipated average annual water deliveries, 

for the purpose of this reduction only, mutually agreed upon by the Secretary and the Contractor for 

the period from January 1, 2020 through December 31, 2039. The Friant Surcharge reduction shall 

remain fixed and shall only be applied to Water Delivered pursuant to this Contract to which the 

Friant Surcharge applies (including but not limited to water transferred, banked, or exchanged), 

commencing on January 1, 2020 until such volume of Water Delivered equals 1,789,000 acre-feet or 

December 31, 2039, whichever occurs first. 

608 

609 

610 

611 

612 

613 

614 

615 

616 

617 

618 

619 

620 

621 

622 

623 

624 

625 

 (2) Further, to fully offset the Financing Costs, Contractor shall be entitled 

to a reduction in other outstanding or future obligations of the Contractor in accordance with Section 

10010(d)(2) of the SJRRSA. The amount of such further reduction in outstanding or future 

obligations of the Contractor after October 1, 2019 has been computed by the Contracting Officer, 

and as computed, such amount is set forth in Exhibit “D”. 

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

available to the Contractor an estimate of the Rates for Project Water for the following Year and the 

computations and cost allocations upon which those Rates are based. The Contractor shall be 
Contract No. I1r-1460D 

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626 

627 

628 

629 

630 

631 

632 

633 

634 

635 

636 

637 

638 

639 

allowed not less than two (2) months to review and comment on such computations and cost 

allocations. By December 31 of each Calendar Year, the Contracting Officer shall provide the 

Contractor with the final Rates to be in effect for the upcoming Year, and such notification shall 

revise Exhibit “B”. The O&M component of the Rate may be reduced as provided in the SJRRSA. 

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

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

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

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

scheduled to be delivered pursuant to this Contract during the first two (2) calendar months of the 

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

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

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

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

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

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

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

during any month shall be accompanied with appropriate advance payment, at the Rates then in 

effect, to assure that Project Water is not delivered to the Contractor in advance of such payment. In 

any month in which the quantity of Water Delivered to the Contractor pursuant to this Contract 

equals the quantity of Water Scheduled and paid for by the Contractor, no additional Project Water 

shall be delivered to the Contractor unless and until an advance payment at the Rates then in effect 

640 

641 

642 

643 

644 

645 

646 
Contract No. I1r-1460D 

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647 

648 

649 

650 

651 

652 

653 

654 

655 

656 

657 

658 

659 

660 

661 

662 

663 

664 

665 

for such additional Project Water is made. Final adjustment between the advance payments for the 

Water Scheduled and payments for the quantities of Water Delivered during each Year pursuant to 

this Contract shall be made as soon as practicable but no later than April 30th of the following Year, 

or sixty (60) days after the delivery of Project Water carried over under subdivision (g) of Article 3 of 

this Contract if such water is not delivered by the last day of February. 

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

subdivision (e) of this Article of this Contract to the United States for Water Delivered, at the 

Charges then in effect, before the end of the month following the month of delivery. The payments 

shall be consistent with the quantities of Irrigation Water and M&I Water Delivered as shown in the 

water delivery report for the subject month prepared by the Contracting Officer. Such water delivery 

report shall be the basis for payment of Charges by the Contractor, and shall be provided to the 

Contractor by the Contracting Officer (as applicable) within five (5) days after the end of the month 

of delivery. The water delivery report shall be deemed a bill basis for payment of Charges for Water 

Delivered. Adjustment for overpayment or underpayment of Charges shall be made through the 

adjustment of payments due to the United States for Charges for the next month. Any amount to be 

paid for past due payment of Charges shall be computed pursuant to Article 21 of this Contract. 

 (g) The Contractor shall pay for any Water Delivered under subdivision (d), (f), or 

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

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

666 Provided, That the Rate for Water Delivered under subdivision (d) of Article 3 of this Contract shall 
Contract No. I1r-1460D 

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667 

668 

669 

670 

671 

672 

673 

674 

675 

676 

677 

678 

679 

680 

681 

682 

683 

684 

685 

686 

687 

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

(a) of this Article of this Contract. 

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

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

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

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

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

regulations, the then-existing Project Ratesetting policies for M&I Water or Irrigation Water, and 

consistent with the SJRRSA. 

 (j) The Contracting Officer shall keep its accounts, pertaining to the 

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

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

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

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

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

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

relating to accountings, reports, or information. 

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

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

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

payments, other than those set forth in this Article of this Contract, may be in the mutual best interest 
Contract No. I1r-1460D 

34 

688 

689 

690 

691 

692 

693 

694 

695 

696 

697 

698 

699 

700 

701 

702 

703 

704 

705 

706 

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

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

without amending this Contract. 

 (l) (1) Omitted. 

 (2) Omitted. 

 (3) Omitted. 

 (m) Rates under the respective ratesetting policies will be established to recover 

only reimbursable O&M (including any deficits) costs of the Project, as those terms are used in the 

then-existing Project ratesetting policies, and consistent with the SJRRSA, and interest, where 

appropriate, except in instances where a minimum Rate is applicable in accordance with the relevant 

Project ratesetting policy. Changes of significance in practices which implement the Contracting 

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

Contractor an opportunity to discuss the nature, need, and impact of the proposed change. 

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

the Rates for Project Water transferred by the Contractor shall be the Contractor’s Rates adjusted 

upward or downward to reflect the changed costs of delivery (if any) incurred by the Contracting 

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

accordance with the then-existing Central Valley Project Ratesetting Policy. 
Contract No. I1r-1460D 

35 

707 NON-INTEREST BEARING OPERATION AND MAINTENANCE DEFICITS

708 

709 

710 

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

Contract, the Contractor has no non-interest bearing operation and maintenance deficits and therefore 

shall have no further liability. 

711 RECOVERED WATER ACCOUNT

712 

713 

714 

715 

716 

717 

718 

719 

 9. (a) Notwithstanding any other provisions of this Contract, water delivered to the 

Contractor under its Recovered Water Account as provided at Paragraph 16(b) of the Settlement and 

affirmed by Section 10004(a)(5) of the SJRRSA shall be at the total cost of $10.00 per acre foot. 

Recovered Water Account water provided to the Contractor shall be administered at a priority for 

delivery lower than Class 2 Water and higher than Section 215 Water. 

 (b) The manner in which the Recovered Water Account will be administered will 

be developed in accordance with subdivision (k) of Article 7 of this Contract, the SJRRSA, and 

Paragraph 16 of the Settlement. 

720 SALES, TRANSFERS, AND EXCHANGES OF WATER

721 

722 

723 

724 

725 

726 

727 

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

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

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

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

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

provided for in subdivisions (b) and (c) of this Article of this Contract. No such Project Water sales, 

transfers, or exchanges shall be approved, where approval is required, absent compliance with 
Contract No. I1r-1460D 

36 

728 

729 

730 

731 

732 

733 

734 

735 

736 

737 

738 

739 

740 

741 

742 

743 

744 

745 

746 

747 

748 

appropriate environmental documentation including but not limited to the National Environmental 

Policy Act and the Endangered Species Act. Such environmental documentation must include, as 

appropriate, an analysis of groundwater impacts and economic and social effects, including 

environmental justice, of the proposed Project Water sales, transfers and exchanges on both the 

transferor/exchanger and transferee/exchange recipient. 

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

sales, transfers, or exchanges of the type historically carried out among Project Contractors located 

within the same geographical area and to allow the Contractor to participate in an accelerated water 

transfer program, the Contracting Officer has prepared, as appropriate, necessary environmental 

documentation including, but not limited to, the National Environmental Policy Act and the 

Endangered Species Act analyzing annual Project Water sales, transfers, or exchanges among 

Contractors within the same geographical area and the Contracting Officer has determined that such 

Project Water sales, transfers, and exchanges comply with applicable law. 

(c) Project Water sales, transfers, and exchanges analyzed in the environmental 

documentation referenced in subdivision (b) of this Article of this Contract, shall be conducted with 

advance notice to the Contracting Officer and the Contracting Officer’s written acknowledgement of 

the transaction, but shall not require prior written approval by the Contracting Officer. 

 (d) For Project Water sales, transfers, or exchanges to qualify under subdivision 

(b) of this Article of this Contract such Project Water sale, transfer, or exchange must: (i) be for 

irrigation purposes for lands irrigated within the previous three (3) years, for M&I use, groundwater 

recharge, groundwater banking, similar groundwater activities, surface water storage, or fish and 
Contract No. I1r-1460D 

37 

749 

750 

751 

752 

753 

754 

755 

756 

757 

758 

759 

760 

761 

762 

763 

764 

wildlife resources; not lead to land conversion; and be delivered to established cropland, wildlife 

refuges, groundwater basins or M&I use; (ii) occur within a single Year; (iii) occur between a 

willing seller and a willing buyer or willing exchangers; (iv) convey water through existing facilities 

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

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

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

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

(e) The environmental documentation and the Contracting Officer’s compliance 

determination for transactions described in subdivision (b) of this Article of this Contract shall be 

reviewed every five (5) years and updated, as necessary, prior to the expiration of the then-existing 

five (5) year period. All subsequent environmental documentation shall include an alternative to 

evaluate not less than the quantity of Project Water historically sold, transferred, or exchanged within 

the same geographical area. 

(f) Consistent with Section 10010(e)(l) of the SJRRSA, any agreement providing 

for sale, transfer, or exchange of Project Water that is not used for interim flows or restoration flows 

pursuant to Paragraphs 13 and 15 of the Settlement, shall be deemed to satisfy the requirements of 

CVPIA section 3405(a)(1)(A) and (I); Provided, That such sales, transfers, or exchanges comply with 

sub-division (f)(1) and (f)(2) below. 

765 

766 

767 

768 

 (1) Project Water sales, transfers, and exchanges conducted under the 

provisions of subdivision (f) of this Article of this Contract shall not require the Contracting Officer’s 

769 concurrence as to compliance with CVPIA 3405(a)(1)(A) and (I); Provided, That the Contractor 
Contract No. I1r-1460D 

38 

770 

771 

772 

773 

774 

775 

776 

777 

778 

779 

780 

781 

782 

783 

784 

785 

786 

787 

788 

789 

790 

shall, for Project Water sales, transfers, or exchanges, with a term greater than one (1) year, provide 

ninety (90) days written advance notification to the Contracting Officer and similarly thirty (30) days 

written advance notification of any Project Water sale, transfer, or exchange with a term of less than 

one (1) year. The Contracting Officer shall promptly make such notice publicly available. 

(2) The Contractor’s thirty (30) days or ninety (90) days advance written 

notification pursuant to subdivision (f)(1) of this Article of this Contract shall explain how the 

proposed Project Water sales, transfers, or exchanges are intended to reduce, avoid, or mitigate 

impacts to Project Water deliveries caused by interim or restoration flows or is otherwise intended to 

facilitate the Water Management Goal as described in the SJRRSA. The Contracting Officer shall 

promptly make such notice publicly available. 

 (3) In addition, the Contracting Officer shall, at least annually, make 

available publicly a compilation of the number of Project Water sales, transfers, and exchange 

agreements implemented in accordance with sub-divisions (f)(1) and (f)(2) of this Article of this 

Contract. 

 (4) Project Water sold, transferred, or exchanged under an agreement that 

meets the terms of subdivisions (f)(1) and (f)(2) of this Article of this Contract shall not be counted as 

a replacement or an offset for purposes of determining reductions to Project Water deliveries to any 

Friant Division Project Contractor except as provided in Paragraph 16(b) of the Settlement. 

 (g) Notwithstanding any Additional Capital Obligation that may later be 

established, in the case of a sale or transfer of Irrigation Water to another contractor which is 

otherwise subject to the acreage limitations, reporting, and Full Cost pricing provisions of the 
Contract No. I1r-1460D 

39 

791 

792 

793 

794 

Reclamation Reform Act of 1982, as amended, hereinafter referred to as the RRA, such sold or 

transferred Irrigation Water shall not be subject to such RRA provisions, however, in the case of a 

sale or transfer of Irrigation Water to the Contractor from another contractor which is subject to RRA 

provisions, such RRA provisions shall apply to delivery of such water.

795 APPLICATION OF PAYMENTS AND ADJUSTMENTS

796 

797 

798 

799 

800 

801 

802 

803 

804 

805 

806 

807 

808 

809 

810 

811 

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

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

the Contractor arising out of this Contract then due and payable. Overpayments of more than One 

Thousand Dollars ($1,000) shall be refunded at the Contractor’s request. In lieu of a refund, any 

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

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

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

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

overpayments shall be made within thirty (30) days of the Contracting Officer obtaining direction as 

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

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

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

Contractor pursuant to Article 26 of this Contract shall be adjusted to reflect the actual costs when the 

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

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

be billed for the additional costs pursuant to Article 26 of this Contract. 
Contract No. I1r-1460D 

40 

812 TEMPORARY REDUCTIONS—RETURN FLOWS

813 

814 

815 

816 

817 

818 

819 

820 

821 

822 

 12. (a) The Contracting Officer shall make all reasonable efforts to optimize delivery 

of the Contract Total subject to: (i) the authorized purposes and priorities of the Project; (ii) the 

requirements of Federal law and the Settlement; and (iii) the obligations of the United States under 

existing contracts, or renewals thereof, providing for water deliveries from the Project. 

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

discontinue or reduce the quantity of Water Delivered to the Contractor as herein provided for the 

purposes of investigation, inspection, maintenance, repair, or replacement of any of the Project 

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

as feasible the Contracting Officer or Operating Non-Federal Entity will give the Contractor due 

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

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

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

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

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

such discontinuance or reduction. 

823 

824 

825 

826 

827 

828 

829 

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

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

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

any right as seepage or return flow to water being used pursuant to this Contract for surface irrigation 

or underground storage either being put to reasonable and beneficial use pursuant to this Contract 

830 

831 

832 
Contract No. I1r-1460D 

41 

833 

834 

835 

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

Contractor. For purposes of this subdivision, groundwater recharge, groundwater banking and all 

similar groundwater activities will be deemed to be underground storage. 

836 CONSTRAINTS ON THE AVAILABILITY OF WATER

837 

838 

839 

840 

841 

842 

843 

844 

845 

846 

847 

848 

849 

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

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

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

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

as soon as practicable. 

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

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

taken by the Contracting Officer to meet legal obligations, including but not limited to obligations

pursuant to the Settlement then, except as provided in subdivision (a) of Article 19 of this Contract, 

no liability shall accrue against the United States or any of its officers, agents, or employees for any 

damage, direct or indirect, arising therefrom. 

 (c) The United States shall not execute contracts which together with this 

Contract, shall in the aggregate provide for furnishing Class 1 Water in excess of 800,000 acre-feet 

per Year or Class 2 Water in excess of 1,401,475 acre-feet per Year; Provided, That, subject to 

subdivision (l) of Article 3 of this Contract, the limitation placed on Class 2 Water contracts shall not 

prohibit the United States from entering into temporary contracts of one year or less in duration for 

delivery of Project Water to other entities if such water is not necessary to meet the schedules as may 

850 

851 

852 

853 
Contract No. I1r-1460D 

42 

854 

855 

856 

be submitted by all Friant Division Project Contractors entitled to receive Class 1 Water and/or Class 

2 Water under their contracts. Nothing in this subdivision shall limit the Contracting Officer’s ability 

to take actions that result in the availability of new water supplies to be used for Project purposes and 

allocating such new supplies; Provided, That the Contracting Officer shall not take such actions until 

after consultation with the Friant Division Project Contractors. 

857 

858 

859 

860 

861 

862 

863 

864 

865 

866 

867 

868 

869 

870 

871 

872 

873 

874 

 (d) The Contracting Officer shall not deliver any Class 2 Water pursuant to this or 

any other contract heretofore or hereafter entered into any Year unless and until the Contracting 

Officer determines that the cumulative total quantity of Class 1 Water specified in subdivision (c) of 

this Article of this Contract will be available for delivery in said Year. If the Contracting Officer 

determines there is or will be a shortage in any Year in the quantity of Class 1 Water available for 

delivery, the Contracting Officer shall apportion the available Class 1 Water among all Contractors 

entitled to receive such water that will be made available at Friant Dam in accordance with the 

following: 

 (1) A determination shall be made of the total quantity of Class 1 Water at 

Friant Dam which is available for meeting Class 1 Water contractual commitments, the amount so 

determined being herein referred to as the available supply. 

 (2) The total available Class 1 supply shall be divided by the Class 1 Water 

contractual commitments, the quotient thus obtained being herein referred to as the Class 1 

apportionment coefficient. 

 (3) The total quantity of Class 1 Water under Article 3 of this Contract 

shall be multiplied by the Class 1 apportionment coefficient and the result shall be the quantity of 
Contract No. I1r-1460D 

43 

875 

876 

877 

878 

879 

880 

881 

882 

883 

884 

885 

886 

887 

888 

889 

Class 1 Water required to be delivered by the Contracting Officer to the Contractor for the respective 

Year, but in no event shall such amount exceed the total quantity of Class 1 Water specified in 

subdivision (a) of Article 3 of this Contract. 

 (e) If the Contracting Officer determines there is less than the quantity of Class 2 

Water which the Contractor otherwise would be entitled to receive pursuant to Article 3 of this 

Contract, the quantity of Class 2 Water which shall be furnished to the Contractor by the Contracting 

Officer will be determined in the manner set forth in paragraphs (1), (2), and (3), of subdivision (d) of 

this Article of this Contract substituting the term "Class 2" for the term "Class 1." 

 (f) In the event that in any Year there is made available to the Contractor, by 

reason of any shortage or apportionment as provided in subdivisions (a), (d), or (e) of this Article of 

this Contract, or any discontinuance or reduction of service as set forth in subdivision (b) of Article 

12 of this Contract, less than the quantity of water which the Contractor otherwise would be entitled 

to receive hereunder, there shall be made an adjustment on account of the amounts already paid to the 

Contracting Officer by the Contractor for Class 1 Water and Class 2 Water for said Year in 

accordance with Article 11 of this Contract. 

890 UNAVOIDABLE GROUNDWATER PERCOLATION

891 14. Omitted. 

892 ACREAGE LIMITATION

893 

894 

895 

 15. (a) The Contractor has paid the Repayment Obligation, and notwithstanding any 

Additional Capital Obligation that may later be established, the provisions of section 213(a) and (b) 

of the RRA shall apply to lands in the Contractor’s Service Area, with the effect that acreage 
Contract No. I1r-1460D 

44 

896 

897 

898 

899 

900 

901 

902 

903 

904 

905 

906 

907 

908 

limitations, reporting, and Full Cost pricing provisions of the RRA shall no longer apply to lands in 

the Contractor’s Service Area with respect to Water Delivered pursuant to this Contract. 

Reclamation will conduct a final water district review for the purpose of determining compliance 

with the acreage limitations, reporting, and Full Cost pricing provisions of the RRA from the date of 

the last water district review until the date when payment to Reclamation of the Repayment 

Obligation was completed. 

 (b) Project Water to which the Contractor is entitled through a separate contract, 

other than this Contract, that is subject to Federal Reclamation law, may be delivered to lands within 

the Contractor’s Service Area. Notwithstanding any Additional Capital Obligation that may later be 

established, Project Water Delivered under this Contract may be mixed with Project Water Delivered 

pursuant to a contract with the United States, other than this Contract, to which acreage limitations, 

reporting, and the Full Cost pricing provisions of Federal Reclamation law apply without causing the 

application of the acreage limitations, reporting, and the Full Cost pricing provisions of Federal 

Reclamation law to the Water Delivered pursuant to this Contract; Provided, The terms and 

conditions in such other contract shall continue to apply, and if such terms and conditions so require, 

the lands to receive Project Water under such other contract shall be properly designated by the 

Contractor and such Project Water is to be delivered in accordance with the RRA including any 

applicable acreage limitations, reporting, and Full Cost pricing provisions.

909 

910 

911 

912 

913 

914 COMPLIANCE WITH FEDERAL RECLAMATION LAWS

915 

916 

917 

16. (a) The parties agree that the delivery of water or the use of Federal facilities 

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

the rules and regulations promulgated by the Secretary of the Interior under Federal reclamation law. 
Contract No. I1r-1460D 

45 

918 

919 

920 

(b) The terms of this Contract are subject to the Settlement and the SJRRSA. 

Nothing in this Contract shall be interpreted to limit or interfere with the full implementation of the 

Settlement and the SJRRSA. 

921 PROTECTION OF WATER AND AIR QUALITY

922 

923 

17. (a) Project facilities used to make available and deliver water to the Contractor 

shall be operated and maintained in the most practical manner to maintain the quality of the water at 

the highest level possible as determined by the Contracting Officer: Provided, That the United States 

does not warrant the quality of the water delivered to the Contractor and is under no obligation to 

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

the Contractor. 

924 

925 

926 

927 

928 

929 

930 

931 

932 

933 

934 

935 

936 

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

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

or licenses from the appropriate Federal, State, or local authorities necessary for the delivery of water 

by the Contractor; and shall be responsible for compliance with all Federal, State, and local water 

quality standards applicable to surface and subsurface drainage and/or discharges generated through 

the use of Federal or Contractor facilities or project water provided by the Contractor within the 

Contractor’s Project Water Service Area. 

 

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

provide drainage or other discharge services. 

937 WATER ACQUIRED BY THE CONTRACTOR

938 OTHER THAN FROM THE UNITED STATES

939 

940 

941 

942 

943 

944 

 18. (a) Omitted.

 (b) Notwithstanding any Additional Capital Obligation that may later be 

established, water or water rights now owned or hereafter acquired by the Contractor other than from 

the United States pursuant to this Contract and Irrigation Water furnished pursuant to the terms of 

this Contract may be simultaneously transported through the same distribution facilities of the 

Contractor without the payment of fees to the United States and without application of Federal 
Contract No. I1r-1460D 

46 

945 

946 

947 

948 

949 

950 

951 

952 

953 

954 

955 

956 

957 

958 

959 

960 

961 

962 

963 

964 

Reclamation law to Water Delivered pursuant to this Contract or to lands which receive Water 

Delivered to Contractor pursuant to this Contract.

 (c) Water or water rights now owned or hereafter acquired by the Contractor, other 

than from the United States or adverse to the Project or its contractors (i.e., non-project water), may 

be stored, conveyed and/or diverted through Project facilities, other than Friant Division Facilities, 

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

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

necessary, consistent with the following provisions: 

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

and deliver said water to lands within the Contractor’s Service Area subject to payment to the United 

States and/or to any applicable Operating Non-Federal Entity of an appropriate rate as determined by 

the Contracting Officer. In addition, if electrical power is required to pump non-project water, the 

Contractor shall be responsible for obtaining the necessary power and paying the necessary charges 

therefor. 

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

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

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

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

Project Contractors; (iv) interfere with the physical maintenance of the Project facilities; or (v) result 

in the United States incurring any liability or unreimbursed costs or expenses thereby. 
Contract No. I1r-1460D 

47 

965 

966 

967 

968 

969 

970 

971 

972 

973 

974 

975 

976 

977 

978 

979 

980 

981 

982 

983 

984 

 (3) Neither the United States nor the Operating Non-Federal Entity shall be 

responsible for control, care or distribution of the non-project water before it is introduced into or 

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

and indemnify the United States and the Operating Non-Federal Entity, and their respective officers, 

agents, and employees, from any claim for damage to persons or property, direct or indirect, resulting 

from Contractor’s diversion or extraction of non-project water from any source. 

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

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

management plan for the area from which it was extracted. 

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

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

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

non-project water prior to any such remaining capacity being made available to non-project 

contractors. 

 (d) Non-project water may be stored, conveyed and/or diverted through Friant 

Division Facilities, subject to the prior completion of appropriate environmental documentation and 

approval of the Contracting Officer without execution of a separate contract, consistent with 

subdivisions (c)(1) through (c)(5) of this Article and any other condition determined to be appropriate 

by the Contracting Officer. 
Contract No. I1r-1460D 

48 

985 OPINIONS AND DETERMINATIONS

986 

987 

988 

989 

990 

991 

992 

993 

994 

995 

996 

997 

998 

999 

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

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

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

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

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

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

provided in a timely manner. Nothing in this Article of this Contract is intended to or shall affect or 

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

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

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

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

United States and the State of California, and the rules and regulations promulgated by the Secretary. 

Such determinations shall be made in consultation with the Contractor to the extent reasonably 

practicable. 

1000 COORDINATION AND COOPERATION

1001 

1002 

1003 

1004 

1005 

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

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

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

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

but not limited to, any action which will or may materially affect the quantity or quality of Project 
Contract No. I1r-1460D 

49 

1006 

1007 

1008 

1009 

1010 

1011 

1012 

1013 

1014 

1015 

1016 

1017 

1018 

1019 

1020 

1021 

1022 

1023 

1024 

1025 

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

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

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

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

 (b) It is the intent of the Secretary to improve water supply reliability. To carry 

out this intent: 

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

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

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

improve water supply, water quality, and reliability. 

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

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

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

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

California to seek improved water resource management. 

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

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

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

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

activities, and other issues as appropriate. 
Contract No. I1r-1460D 

50 

1026 

1027 

1028 

1029 

1030 

1031 

 (c) Without limiting the contractual obligations of the Contracting Officer 

hereunder, nothing in this Contract shall be construed to limit or constrain the Contracting Officer’s 

ability to communicate, coordinate, and cooperate with the Contractor or other interested 

stakeholders or to make decisions in a timely fashion as needed to protect health, safety, physical 

integrity of structures or facilities, or the Contracting Officer’s ability to comply with applicable 

laws. 

1032 CHARGES FOR DELINQUENT PAYMENTS

1033 

1034 

1035 

1036 

1037 

1038 

1039 

1040 

1041 

1042 

1043 

1044 

1045 

1046 

1047 

1048 

1049 

 21. (a) The Contractor shall be subject to interest, administrative and penalty charges 

on delinquent installments or payments. When a payment is not received by the due date, the 

Contractor shall pay an interest charge for each day the payment is delinquent beyond the due date. 

When a payment becomes sixty (60) days delinquent, the Contractor shall pay an administrative 

charge to cover additional costs of billing and processing the delinquent payment. When a payment 

is delinquent ninety (90) days or more, the Contractor shall pay an additional penalty charge of six 

(6%) percent per year for each day the payment is delinquent beyond the due date. Further, the 

Contractor shall pay any fees incurred for debt collection services associated with a delinquent 

payment. 

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

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

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

Project Act of 1939 (Public Law 76-260). The interest charge rate shall be determined as of the due 

date and remain fixed for the duration of the delinquent period. 

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

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

accrued interest, and finally to the overdue payment. 

1050 EQUAL EMPLOYMENT OPPORTUNITY

1051 

1052 

1053 

1054 

1055 

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

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

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

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

employment, without regard to their race, color, religion, sex, disability, or national origin. Such 
Contract No. I1r-1460D 

51 

1056 

1057 

1058 

1059 

1060 

1061 

1062 

1063 

1064 

1065 

1066 

1067 

1068 

1069 

1070 

1071 

1072 

1073 

1074 

1075 

1076 

1077 

1078 

1079 

1080 

1081 

1082 

1083 

1084 

1085 

1086 

1087 

1088 

action shall include, but not be limited to the following: employment, upgrading, demotion, or 

transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of 

compensation; and selection for training, including apprenticeship. The Contractor agrees to post in 

conspicuous places, available to employees and applicants for employment, notices to be provided by 

the Contracting Officer setting forth the provisions of this nondiscrimination clause. 

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

or on behalf of the Contractor, state that all qualified applicants will receive consideration for 

employment without regard to race, color, religion, sex, disability, or national origin. 

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

which it has a collective bargaining agreement or other contract or understanding, a notice, to be 

provided by the Contracting Officer, advising the labor union or workers’ representative of the 

Contractor’s commitments under Section 202 of Executive Order 11246 of September 24, 1965, and 

shall post copies of the notice in conspicuous places available to employees and applicants for 

employment. 

(d) The Contractor will comply with all provisions of Executive Order No. 11246 of 

September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor. 

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

Order 11246 of September 24, 1965, and by the rules, regulations, and orders of the Secretary of 

Labor, or pursuant thereto, and will permit access to his books, records, and accounts by the 

Contracting Agency and the Secretary of Labor for purposes of investigation to ascertain compliance 

with such rules, regulations, and orders. 

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

of this contract or with any of such rules, regulations, or orders, this contract may be canceled, 

terminated or suspended in whole or in part and the Contractor may be declared ineligible for further 

Government contracts in accordance with procedures authorized in Executive Order 11246 of 

September 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in 

Executive Order 11246 of September 24, 1965 or by rule, regulation, or order of the Secretary of 

Labor, or as otherwise provided by law. 

(g) The Contractor will include the provisions of paragraphs (1) through (7) in every 

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

Labor issued pursuant to Section 204 of Executive Order 11246 of September 24, 1965, so that such 

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

with respect to any subcontract or purchase order as may be directed by the Secretary of Labor as a 

means of enforcing such provisions, including sanctions for noncompliance: Provided, however, that 

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

1089 

1090 
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1092 

or vendor as a result of such direction, the Contractor may request the United States to enter into such 

litigation to protect the interests of the United States. 

1093 GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT

1094 

1095 

1096 

1097 

1098 

1099 

1100 

1101 

1102 

1103 

1104 

1105 

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

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

may be distributed among the Contractor's water users and notwithstanding the default of individual 

water users in their obligations to the Contractor. 

 (b) The payment of charges becoming due hereunder is a condition precedent to 

receiving benefits under this Contract. The United States shall not make water available to the 

Contractor through Project facilities during any period in which the Contractor may be in arrears in 

the advance payment of water rates due the United States. The Contractor shall not furnish water 

made available pursuant to this Contract for lands or parties which are in arrears in the advance 

payment of water rates levied or established by the Contractor. 

 (c) With respect to subdivision (b) of this Article of this Contract, the Contractor 

shall have no obligation to require advance payment for water rates which it levies. 

1106 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

1107 

1108 

1109 

1110 

1111 

1112 

1113 

1114 

1115 

1116 

1117 

1118 

1119 

1120 

1121 

1122 

 24. (a) The Contractor shall comply with Title VI of the Civil Rights Act of 1964 (42 

U.S.C. 2000d), Section 504 of the Rehabilitation Act of 1975 (P.L. 93-112, as amended), the Age 

Discrimination Act of 1975 (42 U.S.C. 6101, et seq.) and any other applicable civil rights laws, as 

well as with their respective implementing regulations and guidelines imposed by the U.S. 

Department of the Interior and/or Bureau of Reclamation. 

 (b) These statutes require that no person in the United States shall, on the grounds 

of race, color, national origin, handicap, or age, be excluded from participation in, be denied the 

benefits of, or be otherwise subjected to discrimination under any program or activity receiving 

financial assistance from the Bureau of Reclamation. By executing this Contract, the Contractor 

agrees to immediately take any measures necessary to implement this obligation, including permitting 

officials of the United States to inspect premises, programs, and documents. 

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

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

assistance extended after the date hereof to the Contractor by the Bureau of Reclamation, including 

installment payments after such date on account of arrangements for Federal financial assistance 

which were approved before such date. The Contractor recognizes and agrees that such Federal 
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1124 

assistance will be extended in reliance on the representations and agreements made in this Article, 

and that the United States reserves the right to seek judicial enforcement thereof. 

1125 PRIVACY ACT COMPLIANCE

1126 25. Omitted. 

1127 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

1128 

1129 

1130 

1131 

1132 

1133 

1134 

1135 

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

Contract, the Contractor shall pay to the United States, within sixty (60) days after receipt of a bill 

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

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

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

procedures. All such amounts referred to in this Article of this Contract shall not exceed the amount 

agreed to in writing in advance by the Contractor. This Article of this Contract shall not apply to 

costs for routine contract administration. 

1136 WATER CONSERVATION

1137 

1138 

1139 

1140 

1141 

1142 

1143 

1144 

 27. (a) Prior to the delivery of water provided from or conveyed through Federally 

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

implementing an effective water conservation and efficiency program based on the Contractor's water 

conservation plan that has been determined by the Contracting Officer to meet the conservation and 

efficiency criteria for evaluating water conservation plans established under Federal law. The water 

conservation and efficiency program shall contain definite water conservation objectives, appropriate 

economically feasible water conservation measures, and time schedules for meeting those objectives. 

Continued Project Water delivery pursuant to this Contract shall be contingent upon the Contractor’s 
Contract No. I1r-1460D 

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1145 

1146 

1147 

1148 

1149 

1150 

1151 

1152 

1153 

1154 

1155 

1156 

1157 

1158 

1159 

1160 

1161 

1162 

1163 

1164 

continued implementation of such water conservation program. In the event the Contractor's water 

conservation plan or any revised water conservation plan completed pursuant to subdivision (d) of 

this Article of this Contract have not yet been determined by the Contracting Officer to meet such 

criteria, due to circumstances which the Contracting Officer determines are beyond the control of the 

Contractor, water deliveries shall be made under this Contract so long as the Contractor diligently 

works with the Contracting Officer to obtain such determination at the earliest practicable date, and 

thereafter the Contractor immediately begins implementing its water conservation and efficiency 

program in accordance with the time schedules therein. 

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

Article 3 of this Contract equal or exceed two thousand (2,000) acre-feet per Year, the Contractor 

shall implement the Best Management Practices identified by the time frames issued by the 

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

determined by the Contracting Officer to be inappropriate for the Contractor. 

 (c) The Contractor shall submit to the Contracting Officer a report on the status of 

its implementation of the water conservation plan on the reporting dates specified in the then-existing 

conservation and efficiency criteria established under Federal law. 

 (d) At five (5) -year intervals, the Contractor shall revise its water conservation 

plan to reflect the then-existing conservation and efficiency criteria for evaluating water conservation 

plans established under Federal law and submit such revised water management plan to the 

Contracting Officer for review and evaluation. The Contracting Officer will then determine if the 
Contract No. I1r-1460D 

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1165 

1166 

1167 

1168 

water conservation plan meets Reclamation’s then-existing conservation and efficiency criteria for 

evaluating water conservation plans established under Federal law. 

 (e) If the Contractor is engaged in direct groundwater recharge, such activity shall 

be described in the Contractor’s water conservation plan. 

1169 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

1170 

1171 

1172 

1173 

1174 

1175 

1176 

 28. Except as specifically provided in Article 18 of this Contract, the provisions of this 

Contract shall not be applicable to or affect non-project water or water rights now owned or hereafter 

acquired by the Contractor or any user of such water within the Contractor's Service Area. Any such 

water shall not be considered Project Water under this Contract. In addition, this Contract shall not 

be construed as limiting or curtailing any rights which the Contractor or any water user within the 

Contractor's Service Area acquires or has available under any other contract pursuant to Federal 

Reclamation law. 

1177 OPERATION AND MAINTENANCE BY OPERATING NON-FEDERAL ENTITY

1178 

1179 

1180 

1181 

1182 

1183 

1184 

1185 

 29. (a) The O&M of a portion of the Project facilities which serve the Contractor, and 

responsibility for funding a portion of the costs of such O& M, have been transferred to the Operating 

Non-Federal Entity by separate agreement between the United States and the Operating Non-Federal 

Entity. That separate agreement shall not interfere with or affect the rights or obligations of the 

Contractor or the United States hereunder. 

 (b) The Contracting Officer has previously notified the Contractor in writing that 

the O&M of a portion of the Project facilities which serve the Contractor has been transferred to the 

Operating Non-Federal Entity, and therefore, the Contractor shall pay directly to the Operating Non-
Contract No. I1r-1460D 

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1186 

1187 

1188 

1189 

1190 

1191 

1192 

1193 

1194 

1195 

1196 

1197 

1198 

1199 

1200 

1201 

1202 

1203 

1204 

1205 

Federal Entity, or to any successor approved by the Contracting Officer under the terms and 

conditions of the separate agreement between the United States and the Operating Non-Federal Entity 

described in subdivision (a) of this Article of this Contract, all rates, charges or assessments of any 

kind, including any assessment for reserve funds, which the Operating Non-Federal Entity or such 

successor determines, sets or establishes for (i) the O&M of the portion of the Project facilities 

operated and maintained by the Operating Non-Federal Entity or such successor, or (ii) the Friant 

Division’s share of the operation, maintenance and replacement costs for physical works and 

appurtenances associated with the Tracy Pumping Plant, the Delta-Mendota Canal, the O'Neill 

Pumping/Generating Plant, the federal share of the O'Neill Forebay, the Mendota Pool, and the 

federal share of San Luis Unit joint use conveyance and conveyance pumping facilities. Such direct 

payments to the Operating Non-Federal Entity or such successor shall not relieve the Contractor of its 

obligation to pay directly to the United States the Contractor’s share of the Project Rates and 

Charges, except to the extent the Operating Non-Federal Entity collects payments on behalf of the 

United States in accordance with the separate agreement identified in subdivision (a) of this Article of 

this Contract. 

 (c) For so long as the O&M of any portion of the Project facilities serving the 

Contractor is performed by the Operating Non-Federal Entity, or any successor thereto, the 

Contracting Officer shall adjust those components of the Rates for Water Delivered under this 

Contract representing the cost associated with the activity being performed by the Operating NonFederal Entity or its successor. 
Contract No. I1r-1460D 

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1206 

1207 

1208 

1209 

1210 

1211 

1212 

1213 

 (d) In the event the O&M of the Project facilities operated and maintained by the 

Operating Non-Federal Entity is re-assumed by the United States during the term of this Contract, the 

Contracting Officer shall so notify the Contractor, in writing, and present to the Contractor a revised 

Exhibit “B” which shall include the portion of the Rates to be paid by the Contractor for Project 

Water under this Contract representing the O &M costs of the portion of such Project facilities which 

have been re-assumed. The Contractor shall, thereafter, in the absence of written notification from 

the Contracting Officer to the contrary, pay the Rates and Charges specified in the revised Exhibit 

“B” directly to the United States in compliance with Article 7 of this Contract. 

1214 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

1215 

1216 

1217 

1218 

1219 

 30. The expenditure or advance of any money or the performance of any obligation of the 

United States under this Contract shall be contingent upon appropriation or allotment of funds. 

Absence of appropriation or allotment of funds shall not relieve the Contractor from any obligations 

under this Contract. No liability shall accrue to the United States in case funds are not appropriated 

or allotted. 

1220 BOOKS, RECORDS, AND REPORTS

1221 

1222 

1223 

1224 

1225 

1226 

1227 

1228 

1229 

1230 

1231 

1232 

 31. (a) The Contractor shall establish and maintain accounts and other books and 

records pertaining to administration of the terms and conditions of this Contract, including: the 

Contractor's financial transactions, water supply data, and Project land and right-of-way agreements; 

the water users' land-use (crop census), land ownership, land-leasing and water use data; and other 

matters that the Contracting Officer may require. Reports thereon shall be furnished to the 

Contracting Officer in such form and on such date or dates as the Contracting Officer may require. 

Subject to applicable Federal laws and regulations, each party to this Contract shall have the right 

during office hours to examine and make copies of the other party's books and records relating to 

matters covered by this Contract. 

 (b) Notwithstanding the provisions of subdivision (a) of this Article of this 

Contract, no books, records, or other information shall be requested from the Contractor by the 

Contracting Officer unless such books, records, or information are reasonably related to the 
Contract No. I1r-1460D 

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1233 

1234 

1235 

1236 

1237 

administration or performance of this Contract. Any such request shall allow the Contractor a 

reasonable period of time within which to provide the requested books, records, or information. 

 (c) At such time as the Contractor provides information to the Contracting Officer 

pursuant to subdivision (a) of this Article of this Contract, a copy of such information shall be 

provided to the Operating Non-Federal Entity. 

1238 ASSIGNMENT LIMITED--SUCCESSORS AND ASSIGNS OBLIGATED

1239 

1240 

1241 

1242 

1243 

1244 

1245 

1246 

 32. (a) The provisions of this Contract shall apply to and bind the successors and 

assigns of the parties hereto, but no assignment or transfer of this Contract or any right or interest 

therein shall be valid until approved in writing by the Contracting Officer. 

(b) The assignment of any right or interest in this Contract by either party shall not 

interfere with the rights or obligations of the other party to this Contract absent the written 

concurrence of said other party. 

 (c) The Contracting Officer shall not unreasonably condition or withhold approval 

of any proposed assignment. 

1247 SEVERABILITY

1248 

1249 

1250 

1251 

1252 

1253 

1254 

 33. In the event that a person or entity who is neither (i) a party to a Project contract, nor 

(ii) a person or entity that receives Project Water from a party to a Project contract, nor (iii) an 

association or other form of organization whose primary function is to represent parties to Project 

contracts, brings an action in a court of competent jurisdiction challenging the legality or 

enforceability of a provision included in this Contract and said person, entity, association, or 

organization obtains a final court decision holding that such provision is legally invalid or 

unenforceable and the Contractor has not intervened in that lawsuit in support of the plaintiff(s), the 
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1256 

1257 

1258 

1259 

1260 

1261 

1262 

parties to this Contract shall use their best efforts to (i) within thirty (30) days of the date of such final 

court decision identify by mutual agreement the provisions in this Contract which must be revised 

and (ii) within three (3) months thereafter promptly agree on the appropriate revision(s). The time 

periods specified above may be extended by mutual agreement of the parties. Pending the 

completion of the actions designated above, to the extent it can do so without violating any applicable 

provisions of law, the United States shall continue to make the quantities of Project Water specified 

in this Contract available to the Contractor pursuant to the provisions of this Contract which were not 

found to be legally invalid or unenforceable in the final court decision. 

1263 RESOLUTION OF DISPUTES

1264 

1265 

1266 

1267 

 34. Should any dispute arise concerning any provisions of this Contract, or the parties’ 

rights and obligations thereunder, the parties shall meet and confer in an attempt to resolve the 

dispute. Prior to the Contractor commencing any legal action, or the Contracting Officer referring 

any matter to Department of Justice, the party shall provide to the other party thirty (30) days written 

notice of the intent to take such action; Provided, That such notice shall not be required where a delay 

in commencing an action would prejudice the interests of the party that intends to file suit. During 

the thirty (30) day notice period, the Contractor and the Contracting Officer shall meet and confer in 

an attempt to resolve the dispute. Except as specifically provided, nothing herein is intended to 

waive or abridge any right or remedy that the Contractor or the United States may have. 

1268 

1269 

1270 

1271 

1272 

1273 OFFICIALS NOT TO BENEFIT

1274 

1275 

1276 

 35. No Member of or Delegate to Congress, Resident Commissioner, or official of the 

Contractor shall benefit from this Contract other than as a water user or landowner in the same 

manner as other water users or landowners. 
Contract No. I1r-1460D 

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1277 CHANGES IN CONTRACTOR’S SERVICE AREA

1278 

1279 

1280 

1281 

1282 

1283 

1284 

1285 

1286 

1287 

1288 

1289 

1290 

1291 

 36. (a) While this Contract is in effect, no change may be made in the Contractor's 

Service Area or boundaries, by inclusion or exclusion of lands, dissolution, consolidation, merger, or 

otherwise, except upon the Contracting Officer's written consent. 

 (b) Within thirty (30) days of receipt of a request for such a change, the 

Contracting Officer will notify the Contractor of any additional information required by the 

Contracting Officer for processing said request, and both parties will meet to establish a mutually 

agreeable schedule for timely completion of the process. Such process will analyze whether the 

proposed change is likely to: (i) result in the use of Project Water contrary to the terms of this 

Contract; (ii) impair the ability of the Contractor to pay for Project Water furnished under this 

Contract or to pay for any Federally-constructed facilities for which the Contractor is responsible; 

and (iii) have an impact on any Project Water rights applications, permits, or licenses. In addition, 

the Contracting Officer shall comply with the National Environmental Policy Act and the Endangered 

Species Act. The Contractor will be responsible for all costs incurred by the Contracting Officer in 

this process, and such costs will be paid in accordance with Article 26 of this Contract. 

1292 FEDERAL LAWS

1293 

1294 

 37. By entering into this Contract, the Contractor does not waive its rights to contest the 

validity or application in connection with the performance of the terms and conditions of this 

Contract of any Federal law or regulation; Provided, That the Contractor agrees to comply with the 

terms and conditions of this Contract unless and until relief from application of such Federal law or 

regulation to the implementing provision of the Contract is granted by a court of competent 

jurisdiction. 

1295 

1296 

1297 

1298 
Contract No. I1r-1460D 

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1299 EMERGENCY RESERVE FUND

1300 

1301 

1302 

1303 

1304 

1305 

 38. The Contractor and Contracting Officer acknowledge that the requirements to 

establish and maintain a minimum reserve fund account to finance extraordinary O&M costs of 

Friant Division Facilities is and will continue to be administered under Contract No. 8-07-20-X0356 

titled Agreement To Transfer The Operation, Maintenance And Replacement And Certain Financial 

And Administrative Activities Related To The Friant-Kern Canal And Associated Works, dated 

March 1, 1998 as amended, supplemented, assigned, or renewed. 

1306 MEDIUM FOR TRANSMITTING PAYMENT

1307 

1308 

1309 

1310 

1311 

1312 

1313 

1314 

39. (a) All payments from the Contractor to the United States under this contract 

shall be by the medium requested by the United States on or before the date payment is due. The 

required method of payment may include checks, wire transfers, or other types of payment specified 

by the United States. 

 (b) Upon execution of the contract, the Contractor shall furnish the Contracting 

Officer with the Contractor’s taxpayer’s identification number (TIN). The purpose for requiring the 

Contractor’s TIN is for collecting and reporting any delinquent amounts arising out of the 

Contractor’s relationship with the United States. 

1315 NOTICES

1316 

1317 

1318 

1319 

1320 

1321 

1322 

 40. Any notice, demand, or request authorized or required by this Contract shall be 

deemed to have been given, on behalf of the Contractor, when mailed, postage prepaid, or delivered 

to the Area Manager, South-Central California Area Office, 1243 “N” Street, Fresno, California 

93721, and on behalf of the United States, when mailed, postage prepaid, or delivered to the Board of 

Directors of Southern San Joaquin Municipal Utility District, P.O. Box 279, Delano, California 

93215. The designation of the addressee or the address may be changed by notice given in the same 

manner as provided in this Article of this Contract for other notices. 

1323 CONFIRMATION OF CONTRACT

1324 

1325 

1326 

1327 

 41. The Contractor, after the execution of this Contract, shall promptly provide to the 

Contracting Officer a decree of a court of competent jurisdiction of the State of California, 

confirming the execution of this Contract. The Contractor shall furnish the United States a certified 

copy of the final decree, the validation proceedings, and all pertinent supporting records of the court 
Contract No. I1r-1460D 

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1328 

1329 

approving and confirming this Contract, and decreeing and adjudging it to be lawful, valid, and 

binding on the Contractor. 

1330 CONTRACT DRAFTING CONSIDERATIONS

1331 

1332 

1333 

1334 

1335 

1336 

1337 

 42. Articles 1 through 15, subdivision (c) of Article 16, Articles 18 through 20, 

subdivision (c) of Article 23, Articles 26 through 29, subdivisions (b) and (c) of Article 31, 

subdivisions (b) and (c) of Article 32, Articles 33 through 34, subdivision (b) of Article 36, and 

Articles 37 through 38 of this Contract have been drafted, negotiated, and reviewed by the parties 

hereto, each of whom is sophisticated in the matters to which this Contract pertains, and no one party 

shall be considered to have drafted the stated Articles. 
Contract No. I1r-1460D 

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1338 

1339 

 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of the day and 

year first above written.