M&I 

October 22, 2004 Draft 

September 30, 2004 Draft 

August 19, 2004 Draft 

January 5, 2004 Draft 

R.O. Draft 9-23-03 CVP M&I Form of Contract 

R.O. 8-19-04 San Luis Unit Form of Contract 

Contract No. 

14-06-200-4173A-LTR1

UNITED STATES 

DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

Central Valley Project, California 

LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES

AND

CITY OF COALINGA

PROVIDING FOR PROJECT WATER SERVICE

FROM SAN LUIS UNIT AND DELTA DIVISION 

Table of Contents

Article No. Title Page No.

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

 Explanatory Recitals ............................................................................................2-5

 1 Definitions .........................................................................................................5-10 

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

 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....................17-19 

 6 Measurement of Water Within the Contractor’s Service Area........................19-21 

 7 Rates and Method of Payment for Water.........................................................21-27 

 8 Non-Interest Bearing Operation and Maintenance Deficits ................................. 27 

 9 Sales, Transfers, or Exchanges of Water .........................................................27-29 

 10 Application of Payments and Adjustments......................................................29-30 

 11 Temporary Reductions--Return Flows ............................................................30-31 

 12 Constraints on the Availability of Water .........................................................31-32 

 13 Unavoidable Groundwater Percolation................................................................. 32 

 14 Rules and Regulations .......................................................................................... 32 

 15 Water and Air Pollution Control......................................................................32-33 

 16 Quality of Water ................................................................................................... 33 

 17 Water Acquired by the Contractor Other Than From the United States .........33-35 

 18 Opinions and Determinations ..........................................................................35-36 

 19 Coordination and Cooperation.........................................................................36-38

Contract No. 14-06-200-4173A-LTR1 

Table of Contents - continued

Article No. Title Page No.

 20 Charges for Delinquent Payments ........................................................................ 38 

 21 Equal Opportunity............................................................................................38-39 

 22 General Obligation--Benefits Conditioned Upon Payment .................................. 40 

 23 Compliance With Civil Rights Laws and Regulations ......................................... 40 

 24 Privacy Act Compliance ....................................................................................... 41 

 25 Contractor to Pay Certain Miscellaneous Costs ................................................... 41 

 26 Water Conservation .........................................................................................41-43 

 27 Existing or Acquired Water or Water Rights........................................................ 43 

 28 Operation and Maintenance by San Luis & Delta-Mendota Water Authority 43-45 

 28.1 Operation and Maintenance by California Department of Water Resources ..45-47 

 28.2 Operation and Maintenance by Westlands Water District...............................47-49 

 29 Contingent on Appropriation or Allotment of Funds ........................................... 49 

 30 Books, Records, and Reports...........................................................................49-50 

 31 Assignment Limited--Successors and Assigns Obligated .................................... 50 

 32 Severability ......................................................................................................50-51 

 33 Resolution of Disputes.......................................................................................... 51 

 34 Officials Not to Benefit......................................................................................... 51 

 35 Changes in Contractor’s Service Area.................................................................. 52 

 36 Federal Laws......................................................................................................... 52 

 37 Notices .................................................................................................................. 53

 38 Confirmation of Contract...................................................................................... 53 

 Signature Page ...................................................................................................... 54 

 Exhibit A - Map of Contractor's Service Area 

Exhibit B - Rates and Changes

October 22, 2004 Draft 

September 30, 2004 Draft 

August 19, 2004 Draft 

January 5, 2004 Draft 

R.O. Draft 9-23-03 CVP M&I Form of Contract 

R.O. 8-19-04 San Luis Unit Form of Contract 

Contract No. 

14-06-200-4173A-LTR1

1 UNITED STATES 

2 DEPARTMENT OF THE INTERIOR 

3 BUREAU OF RECLAMATION 

4 Central Valley Project, California 

5 LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES

6 AND

7 CITY OF COALINGA

8 PROVIDING FOR PROJECT WATER SERVICE

9 FROM SAN LUIS UNIT AND DELTA DIVISION 

10 THIS CONTRACT, made this _____ day of ____________________, 2005, in 

11 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, and Title XXXIV of the Act of October 30, 

16 1992 (106 Stat. 4706), all collectively hereinafter referred to as Federal Reclamation law, 

17 between THE UNITED STATES OF AMERICA, hereinafter referred to as the United States, 

18 and CITY OF COALINGA, hereinafter referred to as the Contractor, a public agency of the 

19 State of California, duly organized, existing, and acting pursuant to the laws thereof, with its 

20 principal place of business in California; 

21 WITNESSETH, That: 
Contract No.14-06-200-4173A-LTR1 

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22 EXPLANATORY RECITALS

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

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

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

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

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

28 and the San Joaquin River and their tributaries; and 

[2nd 29 ] WHEREAS, the United States constructed the Delta Division Facilities, including 

30 the San Luis Unit facilities (which include the San Luis Canal, the Coalinga Canal, the Pleasant 

31 Valley Pumping Plant, and Dos Amigos Pumping Plant), which will be used in part for the 

32 furnishing of water to the Contractor pursuant to the terms of this Contract; and 

[3rd 33 ] WHEREAS, the rights to Project Water were acquired by the United States 

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

[4th 35 ] WHEREAS, the Contractor and the United States entered into Contract No. 14-

36 06-200-4173A, which established terms for the delivery to the Contractor of Project Water from 

37 October 28, 1968 through December 31, 2008, hereinafter referred to as the Existing Contract; 

38 and 

[5th 39 ] WHEREAS, the United States and the Contractor have pursuant to Subsection 

40 3404(c)(3) of the Central Valley Project Improvement Act (CVPIA), subsequently entered into a 

41 binding agreement identified as Binding Agreement No. 14-06-200-4173A-BA, which sets out 

42 the terms pursuant to which the Contractor agreed to renew the Existing Contract before the 

43 expiration date after completion of the Programmatic Environmental Impact Statement (PEIS) 
Contract No.14-06-200-4173A-LTR1 

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44 and other appropriate environmental documentation and negotiation of a renewal contract; and 

45 which also sets out the consequences of a subsequent decision not to renew: and 

[6th 46 ] WHEREAS, Section 3404(c) of the CVPIA provides for long-term renewal the 

47 Existing Contract following completion of appropriate environmental documentation, including 

48 a PEIS pursuant to the National Environmental Policy Act (NEPA) analyzing the direct and 

49 indirect impacts and benefits of implementing the CVPIA and the potential renewal of all 

50 existing contracts for Project Water; and 

[7th 51 ] WHEREAS, the United States has completed the PEIS and all other appropriate 

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

[8th 53 ] WHEREAS, the Contractor has requested the long-term renewal of the Existing 

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

55 of the State of California, for water service from the Central Valley Project; and 

[9th 56 ] WHEREAS, the United States has determined that the Contractor has fulfilled all 

57 of its obligations under the Existing Contract; and 

[10th 58 ] WHEREAS, the Contractor has demonstrated to the satisfaction of the 

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

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

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

62 beneficial use the quantity of Project Water to be made available to it pursuant to this Contract; 

63 and 

[11th 64 ] WHEREAS, water obtained from the Central Valley Project has been relied upon 

65 by urban areas within California for more than fifty (50) years, and is considered by the 
Contract No.14-06-200-4173A-LTR1 

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66 Contractor as an essential portion of its water supply; and 

67 [11.1] WHEREAS, at the time of execution of this Contract, the United States is the sole 

68 source of water supply to the Contractor; and 

[12th 69 ] WHEREAS, the economies of regions within the Central Valley Project, 

70 including the Contractor=s, depend upon the continued availability of water, including water 

71 service from the Central Valley Project; and 

[13th 72 ] WHEREAS, in the CALFED Programmatic Record of Decision, dated August 28, 

73 2000, the United States and the State of California adopted a general target of continuously 

74 improving Delta water quality for all uses. The CALFED Agencies= target for providing safe, 

75 reliable, and affordable drinking water in a cost-effective way, is to achieve either: (a) average 

76 concentrations at Clinton Forebay and other southern and central Delta drinking water intakes of 

77 50 ug/L bromide and 3.0 mg/L total organic carbon, or (b) an equivalent level of public health 

78 protection using a cost-effective combination of alternative source waters, source control and 

79 treatment technologies; and

80 [14th] WHEREAS, the parties intend by this Contract to develop a more cooperative 

81 relationship in order to achieve their mutual goals; and 

82 [14.1] WHEREAS, the mutual goals of the United States and the Contractor include: to 

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

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

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

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

87 of the United States relative to the Project; and 
Contract No.14-06-200-4173A-LTR1 

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[15th 88 ] WHEREAS, the Contractor has utilized or may utilize transfers, contract 

89 assignments, rescheduling and conveyance of Project Water and non-Project water under this 

90 Contract as tools to minimize the impacts of Conditions of Shortage and to maximize the 

91 beneficial use of water; and 

92 [15.1] WHEREAS, the parties desire and intend that this Contract not provide a 

93 disincentive to the Contractor in continuing to carry out the beneficial activities set out in the 

94 Explanatory Recital immediately above; and 

[16th 95 ] WHEREAS, the United States and the Contractor are willing to enter into this 

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

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

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

99 DEFINITIONS

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

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

102 (a) ACalendar Year@ shall mean the period January 1 through December 31, 

103 both dates inclusive; 

104 (b) ACharges@ shall mean the payments required by Federal Reclamation law 

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

106 annually by the Contracting Officer pursuant to this Contract; 

107 (c) ACondition of Shortage@ shall mean a condition respecting the Project 
Contract No.14-06-200-4173A-LTR1 

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

109 the Contract Total; 

110 (d) AContracting Officer@ shall mean the Secretary of the Interior=s duly 

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

112 or regulation; 

113 (e) AContract Total@ shall mean the maximum amount of water to which the 

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

115 (f) AContractor's Service Area" shall mean the area to which the Contractor is 

116 permitted to provide Project Water under this Contract as described in Exhibit AA@ attached 

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

118 without amendment of this Contract; 

119 (g) ACVPIA@ shall mean the Central Valley Project Improvement Act, Title 

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

121 (g.1) “Delta Division Facilities” shall mean those existing and future Project 

122 facilities in and south of the Sacramento-San Joaquin Rivers Delta, including, but not limited to, 

123 the Tracy Pumping Plant, the O’Neill Forebay, the O’Neill Pumping/Generating Plant, and the 

124 San Luis Reservoir, used to divert, store and convey water to those Project Contractors entitled 

125 to receive water conveyed through the Delta-Mendota Canal; 

126 (h-i) Omitted; 

127 (j) "Full Cost Rate" shall mean an annual rate, as determined by the 

128 Contracting Officer that shall amortize the expenditures for construction properly allocable to the 
Contract No.14-06-200-4173A-LTR1 

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129 Project Irrigation or M&I functions, as appropriate, of facilities in service including all operation 

130 and maintenance deficits funded, less payments, over such periods as may be required under 

131 Federal Reclamation law, or applicable contract provisions. Interest will accrue on both the 

132 construction expenditures and funded O&M deficits from October 12, 1982, on costs outstanding 

133 at that date, or from the date incurred in the case of costs arising subsequent to October 12, 1982, 

134 and shall be calculated in accordance with subsections 202(3)(B) and (3)(C) of the RRA. The 

135 Full-Cost Rate includes actual operation, maintenance, and replacement costs consistent with 

136 Section 426.2 of the Rules and Regulations for the RRA; 

137 (k-l) Omitted; 

138 (m) “Irrigation Water” shall mean water made available from the Project that 

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

140 incidental thereto, and watering of livestock; 

141 (n) Omitted; 

142 (o) “Municipal and Industrial (M&I) Water” shall mean Project Water, other 

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

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

145 which are kept for personal enjoyment or water delivered to landholdings operated in units of 

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

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

148 this Article; 

149 (p) AM&I Full Cost Water Rate@ shall mean the Full Cost Rate applicable to 

150 the delivery of M&I Water; 
Contract No.14-06-200-4173A-LTR1 

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151 (q) AOperation and Maintenance@ or AO&M" shall mean normal and 

152 reasonable care, control, operation, repair, replacement (other than Capital replacement), and 

153 maintenance of Project facilities; 

154 (r) “Operating Non-Federal Entity” shall mean the entity(ies), its (their) 

155 successors or assigns, which has (have) the obligation to operate and maintain all or a portion of 

156 the Delta Division Facilities pursuant to written agreement(s) with the United States. When this 

157 Contract was entered into, the Operating Non-Federal Entity(ies) was (were) the San Luis & 

158 Delta-Mendota Water Authority and, with respect to the San Luis Unit facilities, the California 

159 Department of Water Resources, and Westlands Water District; 

160 (s) AProject@ shall mean the Central Valley Project owned by the United 

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

162 (t) AProject Contractors@ shall mean all parties who have water service 

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

164 Reclamation law; 

165 (u) AProject Water@ shall mean all water that is developed, diverted, stored, or 

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

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

168 (v) ARates@ shall mean the payments determined annually by the Contracting 

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

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

171 (w) ARecent Historic Average@ shall mean the most recent five year average of 
Contract No.14-06-200-4173A-LTR1 

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

173 preceding contract(s); 

174 (x) ASecretary@ shall mean the Secretary of the Interior, a duly appointed 

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

176 through any agency of the Department of the Interior; 

177 (y) ATiered Pricing Component@ shall be the incremental amount to be paid 

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

179 (z) AWater Delivered@ or ADelivered Water@ shall mean Project Water diverted 

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

181 (aa) AWater Made Available@ shall mean the estimated amount of Project 

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

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

184 (bb) AWater Scheduled@ shall mean Project Water made available to the 

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

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

187 (cc) "Year" shall mean the period from and including March 1 of each 

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

189 TERM OF CONTRACT

190 2. (a) This Contract shall be effective March 1, 2005, through February 28, 

191 2045. This Contract, when effective, supercedes the Existing Contract. In the event the 
Contract No.14-06-200-4173A-LTR1 

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192 Contractor wishes to renew the Contract beyond February 28, 2045, the Contractor shall submit 

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

194 date this Contract expires. 

195 (b) Omitted. 

196 (c) This Contract, insofar as it pertains to the furnishing of M&I Water to the 

197 Contractor, shall be renewed for successive periods of up to 40 years each, which periods shall 

198 be consistent with the then-existing Reclamation-wide policy, under terms and conditions 

199 mutually agreeable to the parties and consistent with Federal and State law. The Contractor shall 

200 be afforded the opportunity to comment to the Contracting Officer on the proposed adoption and 

201 application of any revised policy applicable to the delivery of M&I Water that would limit the 

202 term of any subsequent renewal contract with the Contractor for the furnishing of M&I Water to 

203 less than 40 years. 

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

205 of execution of this Contract, and every 5 years thereafter during the term of this Contract, of 

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

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

208 term of this contract, all authorized project construction expected to occur will have occurred, 

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

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

211 allocation is made, and subject to satisfaction of the conditions set out in this subdivision of this 

212 Article, this contract shall, at the request of the Contractor, be converted to a contract under said 
Contract No.14-06-200-4173A-LTR1 

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213 subsection (c)(1) of Section 9, subject to applicable Federal law and under stated terms and 

214 conditions mutually agreeable to the Contractor and the Contracting Officer. A condition for 

215 such conversion to occur shall be a determination by the Contracting Officer that, account being 

216 taken of the amount credited to return by the Contractor as provided for under Federal 

217 Reclamation law, the remaining amount of construction costs assignable for ultimate return by 

218 the Contractor can probably be repaid to the United States within the term of a contract under 

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

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

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

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

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

224 above, conversion to a contract under said subsection (c)(1) of Section 9. 

225 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE ONTRACTOR

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

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

228 this Contract, the Contracting Officer shall make available for delivery to the Contractor 10,000 

229 acre-feet of water for M&I purposes. The Water Delivered to the Contractor in accordance with 

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

231 this Contract. 

232 (b) Because the capacity of the Central Valley Project to deliver Project 

233 Water has been constrained in recent years and may be constrained in the future due to many 

234 factors including hydrologic conditions and implementation of Federal and State laws, the 
Contract No.14-06-200-4173A-LTR1 

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235 likelihood of the Contractor actually receiving the amount of water set out in subdivision (a) of 

236 this Article in any given Year is uncertain. The Contracting Officer=s most recent modeling 

237 referenced in the PEIS projected that Contract Total set forth in this Contract will not be 

238 available to the Contractor in many years. During the most recent five years, the Recent Historic 

239 Average of water made available to the Contractor was 9,140 acre-feet. Nothing in subdivision 

240 (b) of this Article shall affect the rights and obligations of the parties under any provision of this 

241 Contract. 

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

243 applicable legal requirements. 

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

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

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

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

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

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

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

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

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

253 the quantity of Delivered Water is demonstrated to be reasonable for such uses and in 

254 compliance with Federal Reclamation law. Groundwater recharge programs, groundwater 

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

256 Water or other water furnished pursuant to this Contract conducted outside the Contractor’s 
Contract No.14-06-200-4173A-LTR1 

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257 Service Area may be permitted upon written approval of the Contracting Officer, which approval 

258 will be based upon environmental documentation, Project Water rights, and Project operational 

259 concerns. The Contracting Officer will address such concerns in regulations, policies, or 

260 guidelines. 

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

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

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

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

265 Contract, which evidences in excess of 37 years of diversions for M&I purposes of the quantities 

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

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

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

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

270 respect to any biological opinion or other environmental documentation referred to in this 

271 Article. 

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

273 Contact, the Contracting Officer will make a determination whether Project Water, or other 

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

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

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

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

278 Project Water, or other water available to the Project, can be made available to the Contractor, 
Contract No.14-06-200-4173A-LTR1 

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

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

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

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

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

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

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

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

287 Year referred to as “rescheduled water.” The Contractor may request permission to use during 

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

289 to the Contractor during the subsequent Year referred to as ”preuse.” The Contracting Officer’s 

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

291 guidelines, and policies. Subject to existing long-term contractual commitments, water rights 

292 and operational constraints, long-term Project Contractors shall have a first right to acquire such 

293 water, including Project Water made available pursuant to Section 215 of the RRA. 

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

295 applicable State law to the reasonable and beneficial use of Water Delivered pursuant to this 

296 Contract during the term thereof and any subsequent renewal contracts, as described in Article 2 

297 of this Contract, during the terms thereof shall not be disturbed so long as the Contractor shall 

298 fulfill all of its obligations under this Contract and any renewals thereof. Nothing in the 

299 preceding sentence shall affect the Contracting Officer’s ability to impose shortages under 

300 Article 11 or subdivision (b) of Article 12 of this Contract or applicable provisions of any 
Contract No.14-06-200-4173A-LTR1 

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301 subsequent renewal contracts. 

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

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

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

305 such approval. 

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

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

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

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

310 Provided, that the Contracting Officer retains the right to object to the substance of the 

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

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

313 Contract to use Project Water. 

314 TIME FOR DELIVERY OF WATER

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

316 shall announce the Contracting Officer=s expected declaration of the Water Made Available. 

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

318 Historic Average and will be updated monthly, and more frequently if necessary, based on then319 current operational and hydrologic conditions and a new declaration with changes, if any, to the 

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

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

322 request of the Contractor. Concurrently with the declaration of the Water Made Available, the 
Contract No.14-06-200-4173A-LTR1 

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323 Contracting Officer shall provide the Contractor with the updated Recent Historic Average. 

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

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

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

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

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

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

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

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

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

333 during any Year. 

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

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

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

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

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

339 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

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

341 Contract shall be delivered to the Contractor at Project facilities and any additional point or 

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

343 in writing by the Contracting Officer and the Contractor. 

344 (b) The Contracting Officer, either directly or indirectly through its written 
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345 agreements(s) with the Operating Non-Federal Entity(ies), shall make all reasonable efforts to 

346 maintain sufficient flows and levels of water in the Project facilities to deliver Project Water to 

347 the Contractor at the point or points of delivery established pursuant to subdivision (a) of this 

348 Article. 

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

350 Contractor's Service Area unless approved in advance by the Contracting Officer. 

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

352 shall be measured and recorded with equipment furnished, installed, operated, and maintained by 

353 the Contracting Officer either directly or indirectly through its written agreements(s) with the 

354 Operating Non-Federal Entity(ies), unless undertaken by the Contractor with the consent of the 

355 Contracting Officer at the point or points of delivery established pursuant to subdivision (a) of 

356 this Article. Upon the request of either party to this Contract, the Contracting Officer shall 

357 investigate, or cause to be investigated by the appropriate Operating Non-Federal Entity(ies) the 

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

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

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

361 Entity(ies), if any, prior to making a final determination of the quantity delivered for that period 

362 of time. 

363 (e) Absent a separate contrary written agreement with the Contractor, neither 

364 the Contracting Officer nor any Operating Non-Federal Entity(ies) shall be responsible for the 

365 control, carriage, handling, use, disposal, or distribution of Water Delivered to the Contractor 

366 pursuant to this Contract beyond the point or points of delivery established pursuant to 
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367 subdivision (a) of this Article. The Contractor shall indemnify the United States, its officers, 

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

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

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

371 distribution of such Water Delivered beyond such point or points of delivery except for any 

372 damage or claim arising out of: (i) acts or omissions of the Contracting Officer or any of its 

373 officers, employees, agents, and assigns, including any responsible Operating Non-Federal 

374 Entity(ies), with the intent of creating the situation resulting in any damage or claim; (ii) willful 

375 misconduct of the Contracting Officer or any of its officers, employees, agents, and assigns, 

376 including any responsible Operating Non-Federal Entity; (iii) negligence of the Contracting 

377 Officer or any of its officers, employees, agents, and assigns including the Operating Non378 Federal Entity(ies); or (iv) damage or claims resulting from a malfunction of facilities owned 

379 and/or operated by the United States or responsible Operating Non-Federal Entity(ies).

380 MEASUREMENT OF WATER WITHIN THE SERVICE AREA

381 6. (a) The Contractor has established a measuring program satisfactory to the Contracting 

382 Officer. The Contractor shall ensure that, unless the Contractor establishes an alternative 

383 measurement program satisfactory to the Contracting Officer, all surface water delivered for 

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

385 water measuring methods of comparable effectiveness must be acceptable to the Contracting 

386 Officer. The Contractor shall be responsible for installing, operating, and maintaining and 

387 repairing all such measuring devices and implementing all such water measuring methods at no 

388 cost to the United States. The Contractor shall use the information obtained from such water 
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389 measuring devices or water measuring methods to ensure its proper management of the water; to 

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

391 delivered for M&I purposes by customer class as defined in the Contractor’s water conservation 

392 plan provided for in Article 26 of this Contract. Nothing herein contained, however, shall 

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

394 revenues authorized by California law. The Contractor shall include a summary of all its annual 

395 surface water deliveries in the annual report described in subdivision (c) of Article 26. 

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

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

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

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

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

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

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

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

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

405 the measuring devices or water measuring methods identified in the Contractor=s report and if the 

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

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

408 inadequate, the parties shall within (60) days following the Contracting Officer>s response, 

409 negotiate in good faith the earliest practicable date by which the Contractor shall modify said 
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410 measuring devices and/or measuring methods as required by the Contracting Officer to ensure 

411 compliance with subdivision (a) of this Article. 

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

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

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

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

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

417 within the Contractor=s Service Area during the previous Year. 

418 (e) The Contractor shall inform the Contracting Officer and the Operating 

419 Non-Federal Entity on or before the twentieth 20th calendar day of each month of the quantity of 

420 M&I Water taken during the preceding month. 

421 RATES AND METHOD OF PAYMENT FOR WATER

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

423 Article for all Delivered Water at Rates, Charges, and the Tiered Pricing Component established 

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

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

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

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

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

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

430 Component applicable to the Contractor upon execution of this Contract are set forth in Exhibit 

431 “B,” as may be revised annually. 
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432 (b) The Contracting Officer shall notify the Contractor of the Rates, Charges, 

433 and Tiered Pricing Component as follows: 

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

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

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

437 Year, and the basis for such estimate. The Contractor shall be allowed not less than two months 

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

439 the Contracting Officer shall notify the Contractor in writing of the Charges to be in effect 

440 during the period October 1 of the current Calendar Year, through September 30, of the 

441 following Calendar Year, and such notification shall revise Exhibit ”B.” 

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

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

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

445 those Rates are based. The Contractor shall be allowed not less than two (2) months to review 

446 and comment on such computations and cost allocations. By December 31 of each Calendar 

447 Year, the Contracting Officer shall provide the Contractor with the final Rates and Tiered 

448 Pricing Component to be in effect for the upcoming Year, and such notification shall revise 

449 Exhibit ”B.” 

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

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

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

453 pursuant to the applicable Rate(s) set under subdivision (a) of this Article, for the Project Water 
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454 scheduled to be delivered pursuant to this Contract during the first two calendar months of the 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

469 Water Delivered during each Year pursuant to this Contract shall be made as soon as practicable 

470 but no later than April 30th of the following Year, or sixty (60) days after the delivery of Project 

471 Water rescheduled under subdivision (g) of Article 3 of this Contract if such water is not 

472 delivered by the last day of February. 

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

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

475 appropriate Tiered Pricing Component then in effect, before the end of the month of delivery. 
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476 The payments shall be consistent with the quantities of M&I Water Delivered as shown in the 

477 water delivery report for the subject month prepared by the Operating Non-Federal Entity(ies) 

478 or, if there is no Operating Non-Federal Entity, by the Contracting Officer. The water delivery 

479 report shall be deemed a bill for the payment of Charges and the applicable Tiered Pricing 

480 Component for Water Delivered. Adjustment for overpayment or underpayment of Charges 

481 shall be made through the adjustment of payments due to the United States for Charges for the 

482 next month. Any amount to be paid for past due payment of Charges and the Tiered Pricing 

483 Component shall be computed pursuant to Article 20 of this Contract. 

484 (e) The Contractor shall pay for any Water Delivered under subdivision (d), 

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

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

487 policies; Provided, That the Rate for Water Delivered under subdivision (d) or (f) of Article 3 of 

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

489 subdivision (a) of this Article. 

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

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

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

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

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

495 regulations, and the then current Project ratesetting policies for M&I Water. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

512 exceed (80%) percent of the Contract Total, then before the end of the month following the 

513 month of delivery the Contractor shall make an additional payment to the United States equal to 

514 the applicable Tiered Pricing Component. The Tiered Pricing Component for the amount of 

515 Water Delivered in excess of (80%) percent of the Contract Total, but less than or equal to 

516 (90%) percent of the Contract Total, shall equal the one-half of the difference between the Rate 

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

518 Pricing Component for the amount of Water Delivered which exceeds (90%) percent of the 

519 Contract Total shall equal the difference between (i) the Rate established under subdivision (a) 
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520 of this Article and (ii) the M&I Full Cost Water Rate. 

521 (2) Omitted. 

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

523 Component pursuant to this Article, Water Delivered shall include Project Water that the 

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

525 Contractor, nor shall it include the additional water provided to the Contractor under the 

526 provisions of subdivision (f) of Article 3 of this Contract. 

527 (k) For the term of this Contract, Rates applied under the respective 

528 ratesetting policies will be established to recover only reimbursable O&M (including any 

529 deficits) and capital costs of the Project, as those terms are used in the then-current Project 

530 ratesetting policies, and interest, where appropriate, except in instances where a minimum Rate 

531 is applicable in accordance with the relevant Project ratesetting policy. Changes of significance 

532 in practices which implement the Contracting Officer’s ratesetting policies will not be 

533 implemented until the Contracting Officer has provided the Contractor an opportunity to discuss 

534 the nature, need, and impact of the proposed change. 

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

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

537 adjusted upward or downward to reflect the changed costs of delivery (if any) of the transferred 

538 Project Water to the transferee’s point of delivery in accordance with the then applicable CVP 

539 Ratesetting Policy. 

540 (m) Omitted 
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541 (n) With respect to the Rates for M&I Water, the Contractor asserts that it is 

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

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

544 Contract, the Contractor does not waive any legal rights or remedies that it may have with 

545 respect to such disputed issues. Notwithstanding the execution of this Contract and payments 

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

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

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

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

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

551 Existing Contract and any preceding interim renewal contracts, if applicable; and (5) the 

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

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

554 M&I contractor on any of these issues, and credits for payments heretofore made, provided that 

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

556 8. Omitted. 

557 SALES, TRANSFERS, OR EXCHANGES OF WATER

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

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

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

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

562 Water under this Contract may take place without the prior written approval of the Contracting 
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563 Officer, except as provided for in subdivision (b) of this Article, and no such sales, transfers, or 

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

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

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

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

568 transferor and transferee. 

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

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

571 geographical area and to allow the Contractor to participate in an accelerated water transfer 

572 program during the term of this Contract, the Contracting Officer shall prepare, as appropriate, 

573 all necessary environmental documentation including, but not limited to documents prepared 

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

575 and the Contracting Officer shall determine whether such transfers comply with applicable law. 

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

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

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

579 and the Contracting Officer=s compliance determination shall be reviewed every five years and 

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

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

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

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

584 water transfer must: (i) be for irrigation purposes for lands irrigated within the previous three (3) 
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585 years, for M&I use, groundwater recharge, groundwater banking, or similar groundwater 

586 activities, surface water storage, or fish and wildlife resources; not lead to land conversion; and 

587 be delivered to established cropland, wildlife refuges, groundwater basins or M&I use; (ii) occur 

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

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

590 existing Project Contractors and/or the Contractor and the United States, Department of the 

591 Interior; and (v) comply with all applicable Federal, State, and local or tribal laws and 

592 requirements imposed for protection of the environment and Indian Trust Assets, as defined 

593 under Federal law. 

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 thirty (30) days of the Contracting Officer 

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

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

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

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

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

610 difference will be refunded to the Contractor. If the actual costs exceed the Contractor's 

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

612 TEMPORARY REDUCTIONS--RETURN FLOWS

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

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

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

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

617 this Contract. 

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

619 temporarily discontinue or reduce the quantity of Water Delivered to the Contractor as herein 

620 provided for the purposes of investigation, inspection, maintenance, repair, or replacement of 

621 any of the Project facilities or any part thereof necessary for the delivery of Project Water to the 

622 Contractor, but so far as feasible the Contracting Officer or Operating Non-Federal Entity(ies) 

623 will give the Contractor due notice in advance of such temporary discontinuance or reduction, 

624 except in case of emergency, in which case no notice need be given; Provided, That the United 

625 States shall use its best efforts to avoid any discontinuance or reduction in such service. Upon 

626 resumption of service after such reduction or discontinuance, and if requested by the Contractor, 

627 the United States will, if possible, deliver the quantity of Project Water which would have been 

628 delivered hereunder in the absence of such discontinuance or reduction. 
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629 (c) The United States reserves the right to all seepage and return flow water 

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

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

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

633 pursuant to this Contract within the Contractor=s Service Area by the Contractor or those 

634 claiming by, through, or under the Contractor. 

635 CONSTRAINTS ON THE AVAILABILITY OF WATER

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

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

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

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

640 Contractor of said determination as soon as practicable. 

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

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

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

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

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

646 (c) Omitted. 

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

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

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

650 (e) By entering into this Contract, the Contractor does not waive any legal 
Contract No.14-06-200-4173A-LTR1 

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

652 contesting; (i) the sufficiency of the Central Valley Project M&I Water Shortage Policy; (ii) the 

653 substance of such a policy; (iii) the applicability of such a policy; or (iv) the manner in which 

654 such policy is implemented in order to allocate Project Water between M&I and irrigation 

655 purposes; Provided, That the Contractor has commenced any such judicial challenge or any 

656 administrative procedures necessary to institute any judicial challenge within 6 months of the 

657 policy becoming final. By agreeing to the foregoing, the Contracting Officer does not waive any 

658 legal defenses or remedies that it may have to assert in such a proceeding. Nothing contained 

659 herein shall be interpreted to validate or invalidate the Central Valley Project M&I Water 

660 Shortage Policy.

661 13. Omitted.

662 RULES AND REGULATIONS

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

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

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

666 WATER AND AIR POLLUTION CONTROL

667 15. The Contractor, in carrying out this Contract, shall comply with all applicable 

668 water and air pollution laws and regulations of the United States and the State of California, and 

669 shall obtain all required permits or licenses from the appropriate Federal, State, or local 

670 authorities. 

671 QUALITY OF WATER 

672 16. (a) Project facilities used to deliver Project Water to the Contractor pursuant 

673 to this Contract shall be operated and maintained to enable the United States to deliver Project 
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674 Water to the Contractor in accordance with the water quality standards specified in subsection 

675 2(b) of the Act of August 26, 1937 (50 Stat. 865), as added by Section 101 of the Act of October 

676 27, 1986 (100 Stat. 3050) or other existing Federal laws. The United States is under no 

677 obligation to construct or furnish water treatment facilities to maintain or to improve the quality 

678 of Water Delivered to the Contractor pursuant to this Contract. The United States does not 

679 warrant the quality of Water Delivered to the Contractor pursuant to this Contract. 

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

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

682 highest level reasonably attainable as determined by the Contracting Officer. 

683 WATER ACQUIRED BY THE CONTRACTOR

684 OTHER THAN FROM THE UNITED STATES

685 17. (a) Omitted. 

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

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

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

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

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

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

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

693 to the United States and/or to any applicable Operating Non-Federal Entity of an appropriate rate 

694 as determined by the CVP Ratesetting Policy and the RRA each as amended, modified or 

695 superceded from time to time. In addition, if electrical power is required to pump non-Project 
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696 water through the facilities, the Contractor shall be responsible for obtaining the necessary 

697 power and paying the necessary charges therefore. 

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

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

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

701 available to other Project water service contractors; (iii) interfere with the delivery of contractual 

702 water entitlements to any other Project water service contractors; or (iv) interfere with the 

703 physical maintenance of the Project facilities. 

704 (3) Neither the United States nor the Operating Non-Federal 

705 Entity(ies) shall be responsible for control, care or distribution of the non-Project water before it 

706 is introduced into or after it is delivered from the Project facilities. The Contractor hereby 

707 releases and agrees to defend and indemnify the United States and the Operating Non-Federal 

708 Entity(ies), and their respective officers, agents, and employees, from any claim for damage to 

709 persons or property, direct or indirect, resulting from the acts(s) the Contractor or its officers, 

710 employees, agents, or assigns, in (i) extracting or diverting non-Project water from any source, or 

711 (ii) diverting such non-Project water into Project facilities. 

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

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

714 groundwater management plan for the area from which it was extracted. 

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

716 Officer, the United States and the Project Contractors entitled to Project Water from Delta 

717 Division Facilities shall share priority to utilize the remaining capacity of the facilities declared 
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718 to be available by the Contracting Officer for conveyance and transportation of non-Project 

719 water prior to any such remaining capacity being made available to non-Project contractors. 

720 Other Project Contractors shall have a second priority to any remaining capacity of facilities 

721 declared to be available by the Contracting Officer for conveyance and transportation of non722 Project water prior to any such remaining capacity being made available to non-Project 

723 contractors. 

724 OPINIONS AND DETERMINATIONS

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

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

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

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

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

730 capricious, or unreasonable opinion or determination. Each opinion or determination by either 

731 party shall be provided in a timely manner. Nothing in this subdivision (a) of this Article is 

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

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

734 statute or regulation. 

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

736 necessary to administer this Contract that are consistent with the expressed and implied 

737 provisions of this Contract, the laws of the United States and of the State of California, and the 

738 rules and regulations promulgated by the Secretary of the Interior. Such determinations shall be 

739 made in consultation with the Contractor to the extent reasonably practicable. 
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740 COORDINATION AND COOPERATION

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

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

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

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

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

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

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

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

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

750 and determinations to be made by the respective party. 

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

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

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

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

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

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

757 a real-time basis. 

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

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

760 intent: 

761 (1) The Contracting Officer will, at the request of the Contractor, 
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762 assist in the development of integrated resource management plans for the Contractor. Further, 

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

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

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

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

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

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

769 State of California to seek improved water resource management. 

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

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

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

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

774 management activities, and other issues as appropriate. 

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

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

777 constrain the Contracting Officer=s ability to communicate, coordinate, and cooperate with the 

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

779 protect health, safety, or physical integrity of structures or facilities. 

780 CHARGES FOR DELINQUENT PAYMENTS

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

782 charges on delinquent installments or payments. When a payment is not received by the due 

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

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

785 administrative charge to cover additional costs of billing and processing the delinquent payment. 
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786 When a payment is delinquent ninety (90) days or more, the Contractor shall pay an additional 

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

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

789 associated with a delinquent payment. 

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

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

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

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

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

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

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

797 accrued interest, and finally to the overdue payment. 

798 EQUAL OPPORTUNITY

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

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

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

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

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

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

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

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

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

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

809 nondiscrimination clause. 

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

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

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

813 national origin. 

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

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

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

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

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

819 employees and applicants for employment. 

820 (d) The Contractor will comply with all provisions of Executive Order No. 
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821 11246 of September 24, 1965, as amended, and of the rules, regulations, and relevant orders of 

822 the Secretary of Labor. 

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

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

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

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

827 such rules, regulations, and orders. 

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

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

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

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

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

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

834 otherwise provided by law. 

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

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

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

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

839 action with respect to any subcontract or purchase order as may be directed by the Secretary of 

840 Labor as a means of enforcing such provisions, including sanctions for noncompliance: 

841 Provided, however, That in the event the Contractor becomes involved in, or is threatened with, 

842 litigation with a subcontractor or vendor as a result of such direction, the Contractor may request 

843 the United States to enter into such litigation to protect the interests of the United States. 
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844 GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT

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

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

847 obligation may be distributed among the Contractor's water users and notwithstanding the default 

848 of individual water users in their obligations to the Contractor. 

849 (b) The payment of charges becoming due hereunder is a condition precedent 

850 to receiving benefits under this Contract. The United States shall not make water available to the 

851 Contractor through Project facilities during any period in which the Contractor may be in arrears 

852 in the advance payment of water rates due the United States. The Contractor shall not furnish 

853 water made available pursuant to this Contract for lands or parties which are in arrears in the 

854 advance payment of water rates levied or established by the Contractor. 

855 (c) With respect to subdivision (b) of this Article, the Contractor shall have 

856 no obligation to require advance payment for water rates which it levies. 

857 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

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

859 (42 U.S.C. 2000d), Section 504 of the Rehabilitation Act of 1975 (P.L. 93-112, as amended), the 

860 Age Discrimination Act of 1975 (42 U.S.C. 6101, et seq.) and any other applicable civil rights 

861 laws, as well as with their respective implementing regulations and guidelines imposed by the 

862 U.S. Department of the Interior and/or Bureau of Reclamation. 

863 (b) These statutes require that no person in the United States shall, on the 

864 grounds of race, color, national origin, handicap, or age, be excluded from participation in, be 

865 denied the benefits of, or be otherwise subjected to discrimination under any program or activity 

866 receiving financial assistance from the Bureau of Reclamation. By executing this Contract, the 

867 Contractor agrees to immediately take any measures necessary to implement this obligation, 

868 including permitting officials of the United States to inspect premises, programs, and documents. 

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

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

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

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

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

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

875 agreements made in this Article, and that the United States reserves the right to seek judicial 

876 enforcement thereof. 
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877 24. Omitted. 

878 

879 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

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

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

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

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

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

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

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

887 contract administration. 

888 WATER CONSERVATION

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

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

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

892 Contractor's water conservation plan that has been determined by the Contracting Officer to meet 

893 the conservation and efficiency criteria for evaluating water conservation plans established under 

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

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

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

897 Contract shall be contingent upon the Contractor=s continued implementation of such water 

898 conservation program. In the event the Contractor's water conservation plan or any revised 

899 water conservation plan completed pursuant to subdivision (d) of this Article 26 have not yet 
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900 been determined by the Contracting Officer to meet such criteria, due to circumstances which the 

901 Contracting Officer determines are beyond the control of the Contractor, water deliveries shall 

902 be made under this Contract so long as the Contractor diligently works with the Contracting 

903 Officer to obtain such determination at the earliest practicable date, and thereafter the Contractor 

904 immediately begins implementing its water conservation and efficiency program in accordance 

905 with the time schedules therein. 

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

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

908 implement the Best Management Practices identified by the time frames issued by the California 

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

910 by the Contracting Officer to be inappropriate for the Contractor. 

911 (c) The Contractor shall submit to the Contracting Officer a report on the 

912 status of its implementation of the water conservation plan on the reporting dates specified in the 

913 then existing conservation and efficiency criteria established under Federal law. 

914 (d) At five year intervals, the Contractor shall revise its water conservation 

915 plan to reflect the then current conservation and efficiency criteria for evaluating water 

916 conservation plans established under Federal law and submit such revised water management 

917 plan to the Contracting Officer for review and evaluation. The Contracting Officer will then 

918 determine if the water conservation plan meets Reclamation=s then current conservation and 

919 efficiency criteria for evaluating water conservation plans established under Federal law. 

920 (e) If the Contractor is engaged in direct groundwater recharge, such activity 

921 shall be described in the Contractor=s water conservation plan. 
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922 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

923 27. Except as specifically provided in Article 17 of this Contract, the provisions of 

924 this Contract shall not be applicable to or affect non-project water or water rights now owned or 

925 hereafter acquired by the Contractor or any user of such water within the Contractor's Service 

926 Area. Any such water shall not be considered Project Water under this Contract. In addition, 

927 this Contract shall not be construed as limiting or curtailing any rights which the Contractor or 

928 any water user within the Contractor's Service Area acquires or has available under any other 

929 contract pursuant to Federal Reclamation law. 

930 OPERATION AND MAINTENANCE BY SAN LUIS & DELTA-MENDOTA WATER 

931 AUTHORITY

932 28. (a) The O&M of a portion of the Project facilities which serve the Contractor, 

933 and responsibility for funding a portion of the costs of such O&M, have been transferred to the 

934 San Luis & Delta-Mendota Water Authority, an Operating Non-Federal Entity by separate 

935 agreement (8-07-20-X0354) between the United States and the Operating Non-Federal Entity 

936 San Luis & Delta-Mendota Water Authority. That separate agreement shall not interfere with or 

937 affect the rights or obligations of the Contractor or the United States hereunder. 

938 (b) The Contracting Officer has previously notified the Contractor in writing 

939 that the O&M of a portion of the Project facilities which serve the Contractor has been 

940 transferred to the Operating Non-Federal Entity San Luis & Delta-Mendota Water Authority, 

941 and therefore, the Contractor shall pay directly to the Operating Non-Federal Entity San Luis & 

942 Delta-Mendota Water Authority, or to any successor approved by the Contracting Officer under 

943 the terms and conditions of the separate agreement between the United States and the Operating 
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944 Non-Federal Entity San Luis & Delta-Mendota Water Authority, described in subdivision (a) of 

945 this Article, all rates, charges, or assessments of any kind, including any assessment for reserve 

946 funds, which the Operating Non-Federal Entity San Luis & Delta-Mendota Water Authority, or 

947 such successor determines, sets, or establishes for the O&M of the portion of the Project 

948 facilities operated and maintained by the Operating Non-Federal Entity or such successor. Such 

949 direct payments to the Operating Non-Federal Entity San Luis & Delta-Mendota Water 

950 Authority, or such successor shall not relieve the Contractor of its obligation to pay directly to 

951 the United States the Contractor’s share of the Project Rates, Charges, and Tiered Pricing 

952 Component(s) except to the extent the Operating Non-Federal Entity collects payments on behalf 

953 of the United States in accordance with the separate agreement identified in subdivision (a) of 

954 this Article. 

955 (c) For so long as the O&M of any portion of the Project facilities serving the 

956 Contractor is performed by the Operating Non-Federal Entity San Luis & Delta-Mendota Water 

957 Authority, or any successor thereto, the Contracting Officer shall adjust those components of the 

958 Rates for Water Delivered under this Contract representing the cost associated with the activity 

959 being performed by the Operating Non-Federal Entity San Luis & Delta-Mendota Water 

960 Authority, or its successor. 

961 (d) In the event the O&M of the Project facilities operated and maintained by 

962 the Operating Non-Federal Entity San Luis & Delta-Mendota Water Authority is re-assumed by 

963 the United States during the term of this Contract, the Contracting Officer shall so notify the 

964 Contractor, in writing, and present to the Contractor a revised Exhibit ”B” which shall include 

965 the portion of the Rates to be paid by the Contractor for Project Water under this Contract 
Contract No.14-06-200-4173A-LTR1 

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966 representing the O&M costs of the portion of such Project facilities which have been re967 assumed. The Contractor shall, thereafter, in the absence of written notification from the 

968 Contracting Officer to the contrary, pay the Rates, Charges, and the Tiered Pricing Component 

969 specified in the revised Exhibit ”B” directly to the United States in compliance with Article 7 of 

970 this Contract. 

971 OPERATION AND MAINTENANCE BY CALIFORNIA DEPARTMENT OF 

972 WATER RESOURCES

973 28.1 (a) The O&M of a portion of the Project facilities which serve the Contractor, 

974 and responsibility for funding a portion of the costs of such O&M, have been transferred to the 

975 California Department of Water Resources, an Operating Non-Federal Entity by a separate 

976 agreement (14-06-200-9755) between the United States and Operating Non-Federal Entity 

977 California Department of Water Resources. This separate agreement shall not interfere with or 

978 affect the rights or obligations of the Contractor or the United States hereunder. 

979 (b) The Contracting Officer has previously notified the Contractor in writing 

980 that the O&M of a portion of the Project facilities which serve the Contractor has been 

981 transferred to Operating Non-Federal Entity California Department of Water Resources, and the 

982 Contractor shall pay directly to Operating Non-Federal Entity San Luis & Delta-Mendota Water 

983 Authority, or to any successor approved by the Contracting Officer under the terms and 

984 conditions of the separate agreement between the United States and Operating Non-Federal 

985 Entity San Luis & Delta-Mendota Water Authority, described in subdivision (a) of Article 28 of 

986 this Contract, all rates, charges, or assessments of any kind, including any assessment for reserve 

987 funds, which Operating Non-Federal Entity California Department of Water Resources, or such 
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988 successor determines, sets, or establishes for the O&M of the portion of the Project facilities 

989 operated and maintained by Operating Non-Federal Entity California Department of Water 

990 Resources, or such successor. Such direct payments to Operating Non-Federal Entity San Luis 

991 & Delta-Mendota Water Authority, or such successor shall not relieve the Contractor of its 

992 obligation to pay directly to the United States the Contractor’s share of the Project Rates, 

993 Charges, and Tiered Pricing Components except to the extent the Operating Non-Federal Entity 

994 collects payments on behalf of the United States in accordance with the separate agreement 

995 identified in subdivision (a) of Article 28 of this Contract. 

996 (c) For so long as the O&M of any portion of the Project facilities serving the 

997 Contractor is performed by Operating Non-Federal Entity California Department of Water 

998 Resources, or any successor thereto, the Contracting Officer shall adjust those components of the 

999 Rates for Water Delivered under this Contract representing the cost associated with the activity 

1000 being performed by Operating Non-Federal Entity California Department of Water Resources, or 

1001 its successor. 

1002 (d) In the event the O&M of the Project facilities operated and maintained by 

1003 Operating Non-Federal Entity California Department of Water Resources, is re-assumed by the 

1004 United States during the term of this Contract, the Contracting Officer shall so notify the 

1005 Contractor, in writing, and present to the Contractor a revised Exhibit “B” which shall include 

1006 the portion of the Rates, Charges, and the Tiered Pricing Component to be paid by the Contractor 

1007 for Project Water under this Contract representing the O&M costs of the portion of such Project 

1008 facilities which have been re-assumed. The Contractor shall, thereafter, in the absence of written 

1009 notification from the Contracting Officer to the contrary, pay the Rates, Charges, and the Tiered 
Contract No.14-06-200-4173A-LTR1 

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1010 Pricing Component specified in the revised Exhibit “B” directly to the United States in 

1011 compliance with Article 7 of this Contract. 

1012 OPERATION AND MAINTENANCE BY WESTLANDS WATER DISTRICT

1013 28.2 (a) The O&M of a portion of the Project facilities which serve the 

1014 Contractor, and responsibility for funding a portion of the costs of such O&M, have been 

1015 transferred to the Westlands Water District, the Operating Non-Federal Entity Westlands Water 

1016 District by a separate contract (14-06-200-2020A) between the United States and Westlands 

1017 Water District, the Operating Non-Federal Entity Westlands Water District . That above 

1018 referenced contract shall not interfere with or affect the rights or obligations of the Contractor or 

1019 the United States hereunder. 

1020 (b) The Contracting Officer has previously notified the Contractor in 

1021 writing that the O&M of a portion of the Project facilities which serve the Contractor has been 

1022 transferred to the Operating Non-Federal Entity Westlands Water District . Therefore, the 

1023 Contractor shall enter into a separate agreement with the Operating Non-Federal Entity 

1024 Westlands Water District that provides for the terms and conditions pursuant to which the 

1025 Operating Non-Federal Entity Westlands Water District will deliver Project Water to the 

1026 Contractor through the portion of the Project facilities operated and maintained by the Operating 

1027 Non-Federal Entity Westlands Water District, including the amount(s) the Contractor is to pay 

1028 the Operating Non-Federal Entity Westlands Water District for that service. The Contractor 

1029 shall pay directly to the Operating Non-Federal Entity Westlands Water District , or to any 

1030 successor approved by the Contracting Officer, all rates, charges, or assessments of any kind, 

1031 including any assessment for reserve funds, described in the separate agreement referred to 
Contract No.14-06-200-4173A-LTR1 

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1032 above or any amendatory or replacement agreement approved by the Contracting Officer, which 

1033 the Operating Non-Federal Entity Westlands Water District and or such successor determines, 

1034 sets, or establishes for the Operating Non-Federal Entity Westlands Water District or such 

1035 successor. Such direct payments to the Operating Non-Federal Entity Westlands Water District 

1036 or such successor shall not relieve the Contractor of its obligation to pay directly to the United 

1037 States the Contractor=s share of the Project Rates, Charges, and Tiered Pricing Components 

1038 referred to in this Contract. 

1039 (c) For so long as the O&M of any portion of the Project facilities serving the 

1040 Contractor is performed by the Operating Non-Federal Entity Westlands Water District , or any 

1041 successor thereto, the Contracting Officer shall adjust those components of the Rates for Water 

1042 Delivered under this Contract representing the cost associated with the activity being performed 

1043 by the Operating Non-Federal Entity Westlands Water District or its successor. 

1044 (d) In the event the O&M of the Project facilities operated and maintained by 

1045 the Operating Non-Federal Entity Westlands Water District is re-assumed by the United States 

1046 during the term of this Contract, the Contracting Officer shall so notify the Contractor, in 

1047 writing, and present to the Contractor a revised Exhibit AB” which shall include the portion of 

1048 the Rates, Charges, and the Tiered Pricing Component to be paid by the Contractor for Project 

1049 Water under this Contract representing the O&M costs of the portion of such Project facilities 

1050 which have been re-assumed. The Contractor shall, thereafter, in the absence of written 

1051 notification from the Contracting Officer to the contrary, pay the Rates, Charges, and Tiered 

1052 Pricing Component(s) specified in the revised Exhibit AB@ directly to the United States in 

1053 compliance with Article 7 of this Contract. 
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1054 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

1055 29. The expenditure or advance of any money or the performance of any obligation of 

1056 the United States under this Contract shall be contingent upon appropriation or allotment of 

1057 funds. Absence of appropriation or allotment of funds shall not relieve the Contractor from any 

1058 obligations under this Contract. No liability shall accrue to the United States in case funds are 

1059 not appropriated or allotted. 

1060 BOOKS, RECORDS, AND REPORTS

1061 30. (a) The Contractor shall establish and maintain accounts and other books and 

1062 records pertaining to administration of the terms and conditions of this Contract, including: the 

1063 Contractor's financial transactions, water supply data, and Project land and right-of-way 

1064 agreements; water use data; and other matters that the Contracting Officer may require. Reports 

1065 thereon shall be furnished to the Contracting Officer in such form and on such date or dates as 

1066 the Contracting Officer may require. Subject to applicable Federal laws and regulations, each 

1067 party to this Contract shall have the right during office hours to examine and make copies of the 

1068 other party's books and records relating to matters covered by this Contract. 

1069 (b) Notwithstanding the provisions of subdivision (a) of this Article, no 

1070 books, records, or other information shall be requested from the Contractor by the Contracting 

1071 Officer unless such books, records, or information are reasonably related to the administration or 

1072 performance of this Contract. Any such request shall allow the Contractor a reasonable period of 

1073 time within which to provide the requested books, records, or information. 

1074 (c) At such time as the Contractor provides information to the Contracting 

1075 Officer pursuant to subdivision (a) of this Article, a copy of such information shall be provided 

1076 to the Operating Non-Federal Entity(ies). 

1077 ASSIGNMENT LIMITED--SUCCESSORS AND ASSIGNS OBLIGATED

1078 31. (a) The provisions of this Contract shall apply to and bind the successors and 

1079 assigns of the parties hereto, but no assignment or transfer of this Contract or any right or interest 

1080 therein shall be valid until approved in writing by the Contracting Officer. 

1081 (b) The assignment of any right or interest in this Contract by either party 
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1082 shall not interfere with the rights or obligations of the other party to this Contract absent the 

1083 written concurrence of said other party. 

1084 (c) The Contracting Officer shall not unreasonably condition or withhold 

1085 approval of any proposed assignment. 

1086 SEVERABILITY

1087 32. In the event that a person or entity who is neither (i) a party to a Project contract, 

1088 nor (ii) a person or entity that receives Project Water from a party to a Project contract, nor (iii) 

1089 an association or other form of organization whose primary function is to represent parties to 

1090 Project contracts, brings an action in a court of competent jurisdiction challenging the legality or 

1091 enforceability of a provision included in this Contract and said person, entity, association, or 

1092 organization obtains a final court decision holding that such provision is legally invalid or 

1093 unenforceable and the Contractor has not intervened in that lawsuit in support of the plaintiff(s), 

1094 the parties to this Contract shall use their best efforts to (i) within thirty (30) days of the date of 

1095 such final court decision identify by mutual agreement the provisions in this Contract which 

1096 must be revised and (ii) within three (3) months thereafter promptly agree on the appropriate 

1097 revision(s). The time periods specified above may be extended by mutual agreement of the 

1098 parties. Pending the completion of the actions designated above, to the extent it can do so 

1099 without violating any applicable provisions of law, the United States shall continue to make the 

1100 quantities of Project Water specified in this Contract available to the Contractor pursuant to the 

1101 provisions of this Contract which were not found to be legally invalid or unenforceable in the 

1102 final court decision. 
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1103 RESOLUTION OF DISPUTES

1104 33. Should any dispute arise concerning any provisions of this Contract, or the 

1105 parties= rights and obligations thereunder, the parties shall meet and confer in an attempt to 

1106 resolve the dispute. Prior to the Contractor commencing any legal action, or the Contracting 

1107 Officer referring any matter to Department of Justice, the party shall provide to the other party 

1108 thirty (30) days= written notice of the intent to take such action; Provided, That such notice shall 

1109 not be required where a delay in commencing an action would prejudice the interests of the party 

1110 that intends to file suit. During the thirty (30) -day notice period, the Contractor and the 

1111 Contracting Officer shall meet and confer in an attempt to resolve the dispute. Except as 

1112 specifically provided, nothing herein is intended to waive or abridge any right or remedy that the 

1113 Contractor or the United States may have. 

1114 OFFICIALS NOT TO BENEFIT

1115 34. No Member of or Delegate to Congress, Resident Commissioner, or official of the 

1116 Contractor shall benefit from this Contract other than as a water user or landowner in the same 

1117 manner as other water users or landowners. 

1118 CHANGES IN CONTRACTOR=S SERVICE AREA

1119 35. (a) While this Contract is in effect, no change may be made in the 

1120 Contractor's Service Area by inclusion or exclusion of lands, dissolution, consolidation, merger, 

1121 or otherwise, except upon the Contracting Officer's written consent. 

1122 (b) Within (30) days of receipt of a request for such a change, the Contracting 

1123 Officer will notify the Contractor of any additional information required by the Contracting 

1124 Officer for processing said request, and both parties will meet to establish a mutually agreeable 

1125 schedule for timely completion of the process. Such process will analyze whether the proposed 
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1126 change is likely to: (i) result in the use of Project Water contrary to the terms of this Contract; 

1127 (ii) impair the ability of the Contractor to pay for Project Water furnished under this Contract or 

1128 to pay for any Federally-constructed facilities for which the Contractor is responsible; and (iii) 

1129 have an impact on any Project Water rights applications, permits, or licenses. In addition, the 

1130 Contracting Officer shall comply with the NEPA and the ESA. The Contractor will be 

1131 responsible for all costs incurred by the Contracting Officer in this process, and such costs will 

1132 be paid in accordance with Article 25 of this Contract. 

1133 FEDERAL LAWS

1134 36. By entering into this Contract, the Contractor does not waive its rights to contest 

1135 the validity or application in connection with the performance of the terms and conditions of this 

1136 Contract of any Federal law or regulation; Provided, That the Contractor agrees to comply with 

1137 the terms and conditions of this Contract unless and until relief from application of such Federal 

1138 law or regulation to the implementing provision of the Contract is granted by a court of 

1139 competent jurisdiction. 
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1140 NOTICES

1141 37. Any notice, demand, or request authorized or required by this Contract shall be 

1142 deemed to have been given, on behalf of the Contractor, when mailed, postage prepaid, or 

1143 delivered to the Area Manager, South-Central California Area Office, 1243 N Street, Fresno, 

1144 California 97321, and on behalf of the United States, when mailed, postage prepaid, or delivered 

1145 to the City Council of the City of Coalinga, 160 West Elm, Coalinga, California 93210. The 

1146 designation of the addressee or the address may be changed by notice given in the same manner 

1147 as provided in this Article for other notices. 

1148 CONFIRMATION OF CONTRACT

1149 

1150 38. The Contractor, after the execution of this Contract, shall furnish to the 

1151 Contracting Officer evidence that pursuant to the law of the State of California, the Contractor is 

1152 a legally constituted entity and the contract is lawful, valid, and binding on the Contractor. This 

1153 contract shall not be binding on the United States until such evidence has been provided to the 

1154 Contracting Officers satisfaction. 

1155 
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IN WITNESS WHEREOF, the parties hereto have executed this Contract as of the day 

1156 

1157 and year first above written. 

1158 THE UNITED STATES OF AMERICA 

1159 By: ______________________________________ 

1160 Regional Director, Mid-Pacific Region 

1161 Bureau of Reclamation 

1162 (SEAL) 

1163 Approved as to form: 

1164 _________________________________ 

1165 City Attorney 

1166 CITY OF COALINGA 

1167 By: ______________________________________ 

1168 Mayor 

1169 Attest: 

1170 By: _______________________________ 

1171 City Clerk 

1172 (H:\pub 440\LTRC\Final Draft LTRC’s\19022094 City of Coalinga Final Draft LTRC with 

1173 exhibits.doc) 
 Contract No.14-06-200-4173A-LTR1 

EXHIBIT A 

MAP
Contract No.14-06-200-4173A-LTR1 

EXHIBIT B

CITY OF COALINGA

Water Rates and Charges

WATER RATES FOR CITY OF COALINGA 

2004 Rates Per Acre-Foot

 

M&I Water

COST-OF-SERVICE (COS) RATE:

Capital Rate: $26.17 

O&M Rates:

 Water Marketing $3.68 

 Storage $5.78 

 Conveyance *

 Direct Pumping (Project Use Energy) $3.86 

 Tracy Pumping *

*

Deficit Rates:

 Non-Interest Bearing

 Interest Bearing $37.23 

TOTAL COS RATE: $76.72 

CONTRACT RATE: ** $13.32 

M&I FULL-COST RATE: $94.27 

Tiered Pricing Component >80% <=90% of Contract

 Total [Full Cost Rate - COS Rate /2]:

Tiered Pricing Component >90% of Contract

 Total [Full Cost Rate - COS Rate]:

 

SURCHARGES UNDER P.L. 102-575

TO RESTORATION FUND*** $15.64

 

* Conveyance and Conveyance Pumping Operation and maintenance costs were removed

 for ratesetting purposes and are to be billed directly to the water authorities.

*** The surcharges are payments in addition to the water rates and were determined pursuant to Title XXXIV of Public Law 

102-575. Restoration fund surcharges under P.L. 102-575 are on a fiscal year basis (10/1-9/30).