RO 10/18/12 

10/11/12 

10/02/12 

CCAO 9/28/12 

M&I Only 

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

UNITED STATES 

DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

Central Valley Project, California 

INTERIM RENEWAL CONTRACT BETWEEN THE UNITED STATES

AND

SACRAMENTO MUNICIPAL UTILITY DISTRICT

PROVIDING FOR PROJECT WATER SERVICE

FROM THE AMERICAN RIVER DIVISION

Table of Contents

Article No. Title Page No.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

18 Opinions and Determinations .......................................................................... 32-33 

19 Coordination and Cooperation ......................................................................... 33-35 

20 Charges for Delinquent Payments ..........................................................................35 

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Table of Contents – continued

Article No. Title Page No.

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

22 General Obligation—Benefits Conditioned Upon Payment ............................ 36-37 

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

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

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

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

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

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

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

30 Books, Records, and Reports ........................................................................... 40-41 

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

32 Severability ...................................................................................................... 41-42 

33 Resolution of Disputes ...........................................................................................42 

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

35 Changes in Contractor’s Organization ............................................................. 42-43 

36 Federal Laws ..........................................................................................................43 

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

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

39 Subcontractor for Resale of Water .........................................................................44 

40 Medium for Transmitting Payments ......................................................................44 

41 Contract Drafting Considerations ..........................................................................44 

Signature Page........................................................................................................45 

Exhibit A – Map of Contractor’s Service Area 

Exhibit B – Rates and Charges 

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RO 10/18/12 

10/11/12 

10/02/12 

CCAO 9/28/12 

M&I Only 

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

1 UNITED STATES 

2 DEPARTMENT OF THE INTERIOR 

3 BUREAU OF RECLAMATION 

4 Central Valley Project, California 

5 INTERIM RENEWAL CONTRACT BETWEEN THE UNITED STATES

6 AND

7 SACRAMENTO MUNICIPAL UTILITY DISTRICT

8 PROVIDING FOR PROJECT WATER SERVICE

9 FROM THE AMERICAN RIVER DIVISION

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

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

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

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

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

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

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

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

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

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

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

21 WITNESSETH, That: 

22 EXPLANATORY RECITALS

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

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

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

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

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

28 and the San Joaquin River and their tributaries; and 

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

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

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

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

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

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

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

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

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

38 Sacramento, hereinafter referred to as Assigned Water; and 

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

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

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

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

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

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

45 through December 31, 2012; and 

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

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

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

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

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

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

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

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

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

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

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

57 completion of appropriate environmental documentation, including a programmatic 

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

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

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

[7th 61 ] Omitted; and 

[8th 62 ] WHEREAS, the Contractor has requested the long-term renewal of the 

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

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

[9th 65 ] WHEREAS, the United States has determined that the Contractor has fulfilled all 

66 of its obligations under the Existing Contract; and 

[10th 67 ] WHEREAS, the Contractor has demonstrated to the satisfaction of the 

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

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

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

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

[11th 72 ] WHEREAS, water obtained from the Project has been relied upon by urban areas 

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

74 portion of its water supply; and 

[12th 75 ] WHEREAS, the economies of regions within the Project, including the 

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

77 Project; and 

[13th 78 ] WHEREAS, the Secretary intends through coordination, cooperation, and 

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

80 Project for all Project purposes; and 

81 [13.1] WHEREAS, the Contractor and the water users in its Service Area have improved 

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

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

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

85 withstand a Condition of Shortage; and 

[14th 86 ] WHEREAS, the mutual goals of the United States and the Contractor include: to 

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

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

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

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

91 United States relative to the Project; and 

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[15th 92 ] WHEREAS, the parties intend by this Contract to develop a more cooperative 

93 relationship in order to achieve their mutual goals; and 

94 [15.1] WHEREAS, the Contractor is a signatory to the Water Forum Agreement, dated 

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

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

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

98 [15.2] WHEREAS, the Contracting Officer is in support of the co-equal objectives of the 

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

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

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

102 [15.3] WHEREAS, in order to continue water service provided under Project water 

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

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

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

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

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

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

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

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

[16th 111 ] WHEREAS, the United States and the Contractor entered into a settlement 

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

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

114 agreement; and 

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[17th 115 ] WHEREAS, the United States and the Contractor agreed to develop a separate 

agreement1116 by the execution date of this Contract, which reserves the rights of Contractor with 

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

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

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

[18

th 120 ] WHEREAS, the United States and the Contractor are willing to enter into and 

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

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

123 conditions set forth below; 

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

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

126 DEFINITIONS

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

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

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

130 both dates inclusive; 

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

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

133 Officer pursuant to this Contract; 

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

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

136 Contract Total; 

 

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

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

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

139 or regulation; 

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

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

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

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

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

145 Contract without amendment of this Contract; 

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

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

148 (h-i) Omitted; 

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

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

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

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

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

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

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

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

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

158 and Regulations for the RRA; 

 

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159 (k–l) Omitted; 

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

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

162 incidental thereto, and watering of livestock; 

163 (n) Omitted; 

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

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

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

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

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

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

170 this Article; 

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

172 the delivery of M&I Water; 

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

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

175 maintenance of Project facilities; 

176 (r) Omitted; 

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

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

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

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

181 Reclamation law; 

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

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

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

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

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

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

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

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

190 preceding contract(s); 

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

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

193 through any agency of the Department of the Interior; 

194 (y) Omitted; 

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

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

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

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

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

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

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

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

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

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

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205 TERM OF CONTRACT 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

230 contract.‖ The parties recognize the possibility that this schedule may not be met without further 

231 negotiations. Accordingly: In the event (i) the Contractor and Contracting Officer have reached 

232 agreement on the terms of the Contractor’s long-term renewal contract or (ii) the Contractor and 

233 Contracting Officer have not completed the negotiations on the Contractor’s long-term renewal 

234 contract, believe that further negotiations on that contract would be beneficial, and mutually 

235 commit to continue to negotiate to seek to reach agreement, but (iii) all environmental 

236 documentation required to allow execution of the Contractor’s long-term renewal contract by 

237 both parties has not been completed in time to allow execution of the Contractor’s long-term 

238 renewal contract by February 28, 2015, then (iv) the parties will expeditiously complete the 

239 environmental documentation required of each of them in order to execute the Contractor’s 

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

241 then-current interim renewal contract will be renewed without change upon the request of either 

242 party through the agreed-upon effective date of the Contractor’s long-term renewal contract or, in 

243 the absence of agreement on the terms of the Contractor’s long-term renewal contract, through 

244 the succeeding February 28. 

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

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

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

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

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

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

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

251 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE CONTRACTOR

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

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

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

255 30,000 acre-feet of M&I water. Provided, however, during the two (2) month period of January 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

271 applicable legal requirements. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

317 and policies. 

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

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

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

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

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

323 shall affect the Contracting Officer’s ability to impose shortages under Article 11 or subdivision (b) 

324 of Article 12 of this Contract or applicable provisions of any subsequent renewal contracts. 

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

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

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

328 such approval. 

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

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

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

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

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

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

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

336 Contract to use Project Water. 

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

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

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

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

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

342 TIME FOR DELIVERY OF WATER

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

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

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

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

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

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

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

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

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

352 Historic Average. 

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

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

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

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

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

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

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

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

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

362 during any Year. 

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

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

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

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

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

368 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

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

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

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

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

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

374 and the Contractor. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

406 MEASUREMENT OF WATER WITHIN THE SERVICE AREA

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

441 this Article. 

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

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

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

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

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

447 RATES AND METHOD OF PAYMENT FOR WATER

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

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

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

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

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

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

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

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

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

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

458 Charges as follows: 

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

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

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

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

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

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

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

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

467 notification shall revise Exhibit ―B‖. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

497 day of February. 

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

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

500 then in effect, before the end of the month following the month of delivery. The payments shall 

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501 be consistent with the quantities of Project Water delivered as shown in the water delivery report 

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

503 deemed a bill for the payment of Charges for Project Water delivered. Adjustment for 

504 overpayment or underpayment of Charges shall be made through the adjustment of payments due 

505 to the United States for Charges for the next month. Any amount to be paid for past due payment 

506 of Charges shall be computed pursuant to Article 20 of this Contract. 

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

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

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

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

511 Contract shall be no more than the otherwise applicable Rate for M&I Water under subdivision (a) 

512 of this Article. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

533 without amending this Contract. 

534 (j) Omitted. 

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

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

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

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

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

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

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

542 impact of the proposed change. 

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

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

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

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

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

548 (m) Omitted. 

549 (n) Omitted. 

550 NON-INTEREST BEARING OPERATION AND MAINTENANCE DEFICITS

551 8. Omitted. 

552 SALES, TRANSFERS, OR EXCHANGES OF WATER

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

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

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

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

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

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

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

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

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

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

563 transferor and transferee. 

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

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

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

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

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

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

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

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

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

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

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

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

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

577 historically transferred within the same geographical area. 

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

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

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

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

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

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

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

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

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

587 not lead to land conversion. 

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

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

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

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

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

593 Sacramento Rivers. 

594 APPLICATION OF PAYMENTS AND ADJUSTMENTS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

611 TEMPORARY REDUCTIONS—RETURN FLOWS

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

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

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

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

616 this Contract. 

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

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

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

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

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

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

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

624 in such service. Upon resumption of service after such reduction or discontinuance, and if 

625 requested by the Contractor, the United States will, if possible, deliver the quantity of Project Water 

626 which would have been delivered hereunder in the absence of such discontinuance or reduction. 

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

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

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

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

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

632 claiming by, through, or under the Contractor. 

633 CONSTRAINTS ON THE AVAILABILITY OF WATER

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

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

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

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

638 Contractor of said determination as soon as practicable. 

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

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

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

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

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

644 arising therefrom. 

645 (c) Omitted. 

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

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

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

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

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

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

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

653 through a public notice and comment procedure. 

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

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

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

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

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

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

660 a proceeding. 

661 UNAVOIDABLE GROUNDWATER PERCOLATION

662 13. Omitted. 

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663 RULES AND REGULATIONS

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

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

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

667 Reclamation law. 

668 PROTECTION OF WATER AND AIR QUALITY

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

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

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

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

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

674 quality of water delivered to the Contractor. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

691 provide drainage or other discharge services. 

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692 QUALITY OF WATER

693 16. Combined with Article 15. 

694 WATER ACQUIRED BY THE CONTRACTOR OTHER THAN

695 FROM THE UNITED STATES

696 17. (a) Omitted. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

711 contractual water entitlements to any other Project Contractors; or (iv) interfere with the 

712 physical maintenance of the Project facilities. 

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

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

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

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

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

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

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

720 Project facilities. 

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

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

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

724 which it was extracted. 

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

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

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

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

729 being made available to non-Project Contractors.

730 OPINIONS AND DETERMINATIONS

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

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

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

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

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

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

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

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738 to or shall affect or alter the standard of judicial review applicable under Federal law to any opinion 

739 or determination implementing a specific provision of federal law embodied in statute or regulation. 

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

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

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

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

744 with the Contractor to the extent reasonably practicable. 

745 COORDINATION AND COOPERATION

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

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

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

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

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

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

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

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

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

755 and determinations to be made by the respective party. 

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

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

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

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

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

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

762 a real-time basis. 

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

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

765 this intent: 

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

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

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

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

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

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

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

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

774 State of California to seek improved water resource management. 

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

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

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

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

779 management activities, and other issues as appropriate. 

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

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

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

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

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

785 CHARGES FOR DELINQUENT PAYMENTS

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

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

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

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

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

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

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

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

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

795 services associated with a delinquent payment. 

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

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

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

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

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

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

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

803 EQUAL OPPORTUNITY

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

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

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

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

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

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

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

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

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

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

814 nondiscrimination clause. 

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

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

817 for employment without regard to race, color, religion, sex, disability, or national origin. 

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

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

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

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

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

823 available to employees and applicants for employment. 

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

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

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

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

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

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

830 regulations, and orders. 

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

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

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

834 for further Government contracts in accordance with procedures authorized in EO 11246, and such 

835 other sanctions may be imposed and remedies invoked as provided in EO 11246 or by rule, 

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

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

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

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

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

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

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

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

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

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

846 GENERAL OBLIGATION—BENEFITS CONDITIONED UPON PAYMENT

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

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

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

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

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

852 precedent to receiving benefits under this Contract. The United States shall not make water 

853 available to the Contractor through Project facilities during any period in which the Contractor is 

854 in arrears in the advance payment of water rates due the United States. The Contractor shall not 

855 deliver water under the terms and conditions of this Contract for lands or parties that are in 

856 arrears in the advance payment of water rates as levied or established by the Contractor. 

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

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

859 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

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

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

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

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

864 (Pub. L. 101-336; 42 U.S.C. § 12131, et seq.), and any other applicable civil rights laws, and 

865 with the applicable implementing regulations and any guidelines imposed by the U.S. 

866 Department of the Interior and/or Bureau of Reclamation.. 

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

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

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

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

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

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

873 documents. 

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

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

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

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

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

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

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

881 enforcement thereof. 

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

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

884 PRIVACY ACT COMPLIANCE

885 24. Omitted. 

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886 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

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

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

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

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

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

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

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

894 contract administration. 

895 WATER CONSERVATION

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

897 constructed or Federally financed facilities pursuant to this Contract, the Contractor shall be 

898 implementing an effective water conservation and efficiency program based on the Contractor’s 

899 water conservation plan that has been determined by the Contracting Officer to meet the 

900 conservation and efficiency criteria for evaluating water conservation plans established under 

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

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

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

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

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

906 conservation plan completed pursuant to subdivision (d) of Article 26 of this Contract have not 

907 yet been determined by the Contracting Officer to meet such criteria, due to circumstances which 

908 the Contracting Officer determines are beyond the control of the Contractor, water deliveries 

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909 shall be made under this Contract so long as the Contractor diligently works with the Contracting 

910 Officer to obtain such determination at the earliest practicable date, and thereafter the Contractor 

911 immediately begins implementing its water conservation and efficiency program in accordance 

912 with the time schedules therein. 

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

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

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

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

917 by the Contracting Officer to be inappropriate for the Contractor. 

918 (c) The Contractor shall submit to the Contracting Officer a report on the 

919 status of its implementation of the water conservation plan on the reporting dates specified in the 

920 then-existing conservation and efficiency criteria established under Federal law. 

921 (d) At five-year intervals, the Contractor shall revise its water conservation 

922 plan to reflect the then-current conservation and efficiency criteria for evaluating water 

923 conservation plans established under Federal law and submit such revised water management 

924 plan to the Contracting Officer for review and evaluation. The Contracting Officer will then 

925 determine if the water conservation plan meets Reclamation’s then-current conservation and 

926 efficiency criteria for evaluating water conservation plans established under Federal law. 

927 (e) If the Contractor is engaged in direct groundwater recharge, such activity 

928 shall be described in the Contractor’s water conservation plan. Such water conservation plan 

929 shall demonstrate sufficient lawful uses exist in the Contractor’s Service Area so that using a 

930 long-term average, the quantity of Delivered Water is demonstrated to be reasonable for such 

931 uses and in compliance with Reclamation law. 

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932 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

933 27. Except as specifically provided in Article 17 of this Contract, the provisions of 

934 this Contract shall not be applicable to or affect non-Project Water or water rights now owned or 

935 hereafter acquired by the Contractor or any user of such water within the Contractor’s Service 

936 Area. Any such water shall not be considered Project Water under this Contract. In addition, 

937 this Contract shall not be construed as limiting or curtailing any rights which the Contractor or 

938 any water user within the Contractor’s Service Area acquires or has available under any other 

939 contract pursuant to Federal Reclamation law. 

940 OPERATION AND MAINTENANCE BY THE OPERATING NON-FEDERAL ENTITY

941 28. Omitted. 

942 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

943 29. The expenditure or advance of any money or the performance of any obligation of 

944 the United States under this Contract shall be contingent upon appropriation or allotment of 

945 funds. Absence of appropriation or allotment of funds shall not relieve the Contractor from any 

946 obligations under this Contract. No liability shall accrue to the United States in case funds are 

947 not appropriated or allotted. 

948 BOOKS, RECORDS, AND REPORTS

949 30. (a) The Contractor shall establish and maintain accounts and other books and 

950 records pertaining to administration of the terms and conditions of this Contract, including the 

951 Contractor’s financial transactions; water supply data; project operation, maintenance, and 

952 replacement logs; project land and rights-of-way use agreements; the water users’ land-use (crop 

953 census), land-ownership, land-leasing, and water-use data; and other matters that the Contracting 

954 Officer may require. Reports shall be furnished to the Contracting Officer in such form and on 

955 such date or dates as the Contracting Officer may require. Subject to applicable Federal laws and 

956 regulations, each party to this Contract shall have the right during office hours to examine and 

957 make copies of the other party’s books and records relating to matters covered by this Contract. 

958 (b) Notwithstanding the provisions of subdivision (a) of this Article, no 

959 books, records, or other information shall be requested from the Contractor by the Contracting 

960 Officer unless such books, records, or information are reasonably related to the administration or 

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961 performance of this Contract. Any such request shall allow the Contractor a reasonable period of 

962 time within which to provide the requested books, records, or information. 

963 (c) Omitted. 

964 ASSIGNMENT LIMITED—SUCCESSORS AND ASSIGNS OBLIGATED

965 31. (a) The provisions of this Contract shall apply to and bind the successors and 

966 assigns of the parties hereto, but no assignment or transfer of this Contract or any right or interest 

967 therein by either party shall be valid until approved in writing by the other party. 

968 (b) The assignment of any right or interest in this Contract by either party shall 

969 not interfere with the rights or obligations of the other party to this Contract absent the written 

970 concurrence of said other party. 

971 (c) The Contracting Officer shall not unreasonably condition or withhold 

972 approval of any proposed assignment. 

973 SEVERABILITY

974 32. In the event that a person or entity who is neither (i) a party to a Project contract, 

975 nor (ii) a person or entity that receives Project Water from a party to a Project contract, nor 

976 (iii) an association or other form of organization whose primary function is to represent parties to 

977 Project contracts, brings an action in a court of competent jurisdiction challenging the legality or 

978 enforceability of a provision included in this Contract and said person, entity, association, or 

979 organization obtains a final court decision holding that such provision is legally invalid or 

980 unenforceable and the Contractor has not intervened in that lawsuit in support of the plaintiff(s), 

981 the parties to this Contract shall use their best efforts to (i) within thirty days of the date of such 

982 final court decision identify by mutual agreement the provisions in this Contract which must be 

983 revised and (ii) within three months thereafter promptly agree on the appropriate revision(s). The 

984 time periods specified above may be extended by mutual agreement of the parties. Pending the 

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985 completion of the actions designated above, to the extent it can do so without violating any 

986 applicable provisions of law, the United States shall continue to make the quantities of Project 

987 Water specified in this Contract available to the Contractor pursuant to the provisions of this 

988 Contract which were not found to be legally invalid or unenforceable in the final court decision. 

989 RESOLUTION OF DISPUTES

990 33. Should any dispute arise concerning any provisions of this Contract, or the 

991 parties’ rights and obligations there under, the parties shall meet and confer in an attempt to 

992 resolve the dispute. Prior to the Contractor commencing any legal action, or the Contracting 

993 Officer referring any matter to Department of Justice, the party shall provide to the other party 30 

994 days’ written notice of the intent to take such action; Provided, That such notice shall not be 

995 required where a delay in commencing an action would prejudice the interests of the party that 

996 intends to file suit. During the 30-day notice period, the Contractor and the Contracting Officer 

997 shall meet and confer in an attempt to resolve the dispute. Except as specifically provided, 

998 nothing herein is intended to waive or abridge any right or remedy that the Contractor or the 

999 United States may have. 

1000 OFFICIALS NOT TO BENEFIT

1001 34. No Member of or Delegate to Congress, Resident Commissioner, or official of the 

1002 Contractor shall benefit from this Contract other than as a water user or landowner in the same 

1003 manner as other water users or landowners. 

1004 CHANGES IN CONTRACTOR’S ORGANIZATION

1005 35. (a) While this Contract is in effect, no change may be made in the 

1006 Contractor’s organization, by inclusion or exclusion of lands or by any other changes which may 

1007 affect the respective rights, obligations, privileges, and duties of either the United States or the 

1008 Contractor under this Contract including, but not limited to, dissolution, consolidation, or 

1009 merger, except upon the Contracting Officer’s written consent.. 

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1010 (b) Within 30 days of receipt of a request for such a change, the Contracting 

1011 Officer will notify the Contractor of any additional information required by the Contracting 

1012 Officer for processing said request, and both parties will meet to establish a mutually agreeable 

1013 schedule for timely completion of the process. Such process will analyze whether the proposed 

1014 change is likely to: (i) result in the use of Project Water contrary to the terms of this Contract; 

1015 (ii) impair the ability of the Contractor to pay for Project Water furnished under this Contract or 

1016 to pay for any Federally-constructed facilities for which the Contractor is responsible; and (iii) 

1017 have an impact on any Project Water rights applications, permits, or licenses. In addition, the 

1018 Contracting Officer shall comply with the NEPA and the ESA. The Contractor will be 

1019 responsible for all costs incurred by the Contracting Officer in this process, and such costs will 

1020 be paid in accordance with Article 25 of this Contract. 

1021 FEDERAL LAWS

1022 36. By entering into this Contract, the Contractor does not waive its rights to contest 

1023 the validity or application in connection with the performance of the terms and conditions of this 

1024 Contract of any Federal law or regulation; Provided, That the Contractor agrees to comply with 

1025 the terms and conditions of this Contract unless and until relief from application of such Federal 

1026 law or regulation to the implementing provision of the Contract is granted by a court of 

1027 competent jurisdiction. 

1028 NOTICES

1029 37. Any notice, demand, or request authorized or required by this Contract shall be 

1030 deemed to have been given, on behalf of the Contractor, when mailed, postage prepaid, or 

1031 delivered to the Area Manager, Bureau of Reclamation, 7794 Folsom Dam Road, Folsom, 

1032 California 95630-1799, and on behalf of the United States, when mailed, postage prepaid, or 

1033 delivered to the Board of Directors of the Sacramento Municipal Utility District, P.O. Box 15830, 

1034 MS B406, Sacramento, CA 95852-1830. The designation of the addressee or the address may 

1035 be changed by notice given in the same manner as provided in this Article for other notices. 

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1036 CONFIRMATION OF CONTRACT

1037 38. Promptly after the execution of this Contract, the Contractor shall provide 

1038 evidence to the Contracting Officer that, pursuant to the laws of the State of California, the 

1039 Contractor is a legally constituted entity and the Contract is lawful, valid, and binding on the 

1040 Contractor. This Contract shall not be binding on the United States until such evidence has been 

1041 provided to the Contracting Officer’s satisfaction. 

1042 SUBCONTRACT FOR RESALE OF WATER

1043 39. Omitted 

1044 MEDIUM FOR TRANSMITTING PAYMENTS

1045 40. (a) All payments from the Contractor to the United States under this Contract 

1046 shall be by the medium requested by the United States on or before the date payment is due. The 

1047 required method of payment may include checks, wire transfers, or other types of payment 

1048 specified by the United States. 

1049 (b) Upon execution of the Contract, the Contractor shall furnish the 

1050 Contracting Officer with the Contractor’s taxpayer’s identification number (TIN). The purpose 

1051 for requiring the Contractor’s TIN is for collecting and reporting any delinquent amounts arising 

1052 out of the Contractor’s relationship with the United States. 

1053 CONTRACT DRAFTING CONSIDERATIONS

1054 41. This Contract has been, negotiated and reviewed by the parties hereto, each of 

1055 whom is sophisticated in the matters to which this Contract pertains. The double spaced Articles 

1056 of this Contract have been drafted, negotiated, and reviewed by the parties, and no one party shall 

1057 be considered to have drafted the stated articles. 

1058

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1059 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of the day 

1060 and year first above written. 

1061 THE UNITED STATES OF AMERICA 

1062 By: ______________________________ 

1063 Regional Director, Mid-Pacific Region 

1064 Bureau of Reclamation 

1065 SACRAMENTO MUNICIPAL UTILITY 

1066 DISTRICT 

1067 By: ______________________________ 

1068 President of the Board of Directors 

1069 Attest: 

1070 By: _______________________________ 

1071 Secretary of the Board of Directors 

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EXHIBIT A

[Map of Contractor’s Service Area] 

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EXHIBIT B 

[Rates and Charges]

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