M&I Only 

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

City of Redding Draft 3/01-2004 

City of Redding Draft 7/22-2003 

City of Redding Draft 7/18-2003 

City of Redding Draft 6/16-2003 

Shasta/Trinity Division Draft 6/16-2003 

CVP-Wide Draft 5/23-2003 

Contract No. 

14-06-200-5272A-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 REDDING

PROVIDING FOR PROJECT WATER SERVICE

FROM THE SACRAMENTO RIVER, SHASTA, AND TRINITY RIVER DIVISIONS

Table of Contents

Article No. Title Page No.

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

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

 1 Definitions............................................................................................................ 5-8 

 2 Term of Contract................................................................................................8-10 

 3 Water to be Made Available and Delivered to the Contractor.........................10-14 

 4 Time for Delivery of Water .............................................................................14-15 

 5 Point of Diversion and Responsibility for Distribution of Water....................15-16 

 6 Measurement of Water Within the Contractor’s Service Area........................16-18 

 7 Rates and Method of Payment for Water.........................................................18-23 

 8 Non-Interest Bearing Operation and Maintenance Deficits.................................. 23 

 9 Sales, Transfers, or Exchanges of Water .........................................................23-25 

 10 Application of Payments and Adjustments......................................................25-26 

 11 Temporary Reductions--Return Flows ............................................................26-27 

 12 Constraints on the Availability of Water .............................................................. 27 

 13 Unavoidable Groundwater Percolation................................................................. 27 

 14 Rules and Regulations........................................................................................... 28 

 15 Water and Air Pollution Control........................................................................... 28 

 16 Quality of Water ................................................................................................... 28 

 17 Water Acquired by the Contractor Other Than From the United States..........29-30 

 18 Opinions and Determinations ............................................................................... 30 

 19 Coordination and Cooperation.........................................................................31-32 

 20 Charges for Delinquent Payments ...................................................................32-33 
Contract No.14-06-200-5272A-LTR1 

Table of Contents - continued

Article No. Title Page No.

 21 Equal Opportunity............................................................................................33-34 

 22 General Obligation--Benefits Conditioned Upon Payment .................................. 34 

 23 Compliance With Civil Rights Laws and Regulations ......................................... 35 

 24 Privacy Act Compliance ..................................................................................35-36 

 25 Contractor to Pay Certain Miscellaneous Costs.................................................... 36 

 26 Water Conservation .........................................................................................36-37 

 27 Existing or Acquired Water or Water Rights...................................................37-38 

 28 Operation and Maintenance by Operating Non-Federal Entity ............................ 38 

 29 Contingent on Appropriation or Allotment of Funds ........................................... 38 

 30 Books, Records, and Reports................................................................................ 38 

 31 Assignment Limited--Successors and Assigns Obligated ...............................38-39 

 32 Severability ........................................................................................................... 39 

 33 Resolution of Disputes.....................................................................................39-40 

 34 Officials Not to Benefit......................................................................................... 40 

 35 Changes in Contractor’s Service Area.................................................................. 40 

 36 Federal Laws....................................................................................................40-41 

 37 Notices .................................................................................................................. 41

 38 Confirmation of Contract...................................................................................... 41 

 39 Use of the 6-Inch Pipeline..................................................................................... 41 

 40 O&M and Ownership of the 6-Inch Pipeline--United States to be Held .........41-43 

 41 O&M and Ownership of Toyon Pipeline.............................................................. 44 

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

 

 Exhibit A - Map of Contractor’s Service Area 

 

 Exhibit B - Rates and Charges 
M&I Only 

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

City of Redding Draft 3/01-2004 

City of Redding Draft 7/22-2003 

City of Redding Draft 7/18-2003 

City of Redding Draft 6/16-2003 

Shasta/Trinity Division Draft 6/16-2003 

CVP-Wide Draft 5/23-2003 

Contract No. 

14-06-200-5272A-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 REDDING

8 PROVIDING FOR PROJECT WATER SERVICE

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

10 THIS CONTRACT, made this _____ day of ____________________, 20___, 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, 1992 

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

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

18 OF REDDING, hereinafter referred to as the Contractor, a municipal corporation of the State of 

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

20 WITNESSETH, That:
Contract No. 14-06-200-5272A-LTR1 

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21 EXPLANATORY RECITALS

 [1st 22 ] WHEREAS, the United States has constructed and is operating the Central Valley 

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

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

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

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

27 and the San Joaquin River and their tributaries; and 

 [2nd 28 ] WHEREAS, the United States constructed Shasta Dam, Spring Creek Power 

29 Conduit and Toyon Pipeline, hereinafter collectively referred to as the Project facilities, which 

30 will be used in part for the furnishing of water to the Contractor pursuant to the terms of this 

31 Contract; and 

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

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

 [4th 34 ] WHEREAS, the Contractor and the United States entered into Contract 

35 No. 14-06-200-5272A, as amended, which established terms for the delivery to the Contractor of 

36 Project Water from the Project facilities from February 22, 1971, through December 31, 2009, 

37 hereinafter referred to as the “Existing Contract”; and 

38 [4.1] WHEREAS, the water diverted from the Spring Creek Power Conduit by the 

39 Contractor will not be available to pass through the Project’s hydroelectric generators at Spring 

40 Creek or Keswick Powerplants, which will result in losses of electricity generated by the Project; 

41 and as such the Contractor is willing to compensate the United States for such electricity losses 

42 through an agreement with the Western Area Power Administration, Department of Energy, for 

43 any foregone generation based on the terms of that agreement; and 

 [5th 44 ] WHEREAS, the United States and the Contractor have, pursuant to subsection 

45 3404(c)(3) of the Central Valley Project Improvement Act (CVPIA), subsequently entered into a 

46 binding agreement identified as Binding Agreement No. 14-06-200-5272A-BA, which sets out 
Contract No. 14-06-200-5272A-LTR1 

3

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

48 expiration date after completion of a programmatic environmental impact statement and other 

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

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

 [6th 51 ] WHEREAS, Section 3404(c) of the CVPIA provides for long-term renewal of the 

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

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

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

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

 [7th 56 ] WHEREAS, the United States has completed the PEIS and all other appropriate 

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

 [8th 58 ] WHEREAS, the Contractor has requested the long-term renewal of the Existing 

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

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

 [9th 61 ] WHEREAS, the United States has determined that the Contractor has fulfilled all 

62 of its obligations under the Existing Contract; and 

 [10th 63 ] WHEREAS, the Contractor has demonstrated to the satisfaction of the 

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

65 reasonable and beneficial use and, based upon a needs analysis cooperatively prepared by the 

66 Contracting Officer and the Contractor, has demonstrated projected future demand for water use 

67 that exceeds the Contract Total to be made available to it pursuant to this Contract; and 

 [11th 68 ] WHEREAS, water obtained from the Project has been relied upon by urban and 

69 agricultural areas within California for more than 50 years, and is considered by the Contractor 

70 as an essential portion of its water supply; and 
Contract No. 14-06-200-5272A-LTR1 

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 [12th 71 ] WHEREAS, the economies of regions within the Project, including the 

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

73 Project; and 

74 [12.1] WHEREAS, Contractor has made and will continue to make substantial capital 

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

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

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

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

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

80 Project for all Project purposes; and 

81 [13.1] WHEREAS, the Contractor is located in the region of the Redding Groundwater 

82 Basin, and it is the desire of both the United States and the Contractor to facilitate the 

83 cooperative efforts of local water service agencies to develop the Redding Groundwater Basin 

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

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

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

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

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

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

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

91 of the United States relative to the Project; and 

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

93 relationship in order to achieve their mutual goals; and 

 [16th 94 ] WHEREAS, the United States and the Contractor are willing to enter into this 

95 Contract pursuant to Federal Reclamation law on the terms and conditions set forth below; 
Contract No. 14-06-200-5272A-LTR1 

5

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

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

98 DEFINITIONS

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

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

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

102 both dates inclusive; 

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

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

105 annually by the Contracting Officer pursuant to this Contract; 

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

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

108 Contract Total; 

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

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

111 or regulation; 

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

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

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

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

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

117 without amendment of this Contract; 

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

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

120 (h) Omitted; 

121 (i) Omitted; 
Contract No. 14-06-200-5272A-LTR1 

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

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

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

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

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

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

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

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

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

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

132 of the Rules and Regulations for the RRA; 

133 (k) Omitted; 

134 (l) Omitted; 

135 (m) Omitted; 

136 (n) Omitted; 

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

138 available to the Contractor for purposes other than the commercial production of agricultural 

139 crops or livestock; 

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

141 the delivery of M&I Water; 

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

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

144 maintenance of Project facilities; 

145 (r) Omitted; 

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

147 States and managed by the Department of the Interior, Bureau of Reclamation; 
Contract No. 14-06-200-5272A-LTR1 

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

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

150 Reclamation law; 

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

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

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

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

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

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

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

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

159 preceding contract(s); 

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

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

162 through any agency of the Department of the Interior; 

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

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

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

166 diverted for use by the Contractor at the point(s) of delivery approved by the Contracting 

167 Officer; 

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

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

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

171 (bb) “Water Scheduled” shall mean Project Water made available to the 

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

173 and Contracting Officer, pursuant to subdivision (b) of Article 4 of this Contract; and 
Contract No. 14-06-200-5272A-LTR1 

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

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

176 (dd) “Meter Vault” shall mean the Project’s concrete box containing pipelines, 

177 meters, and valves located on the 6-Inch Pipeline about 3⁄4 mile south of the intersection of Lake 

178 Boulevard and Shasta Dam Boulevard as shown on Exhibit “A”, attached hereto; and 

179 (ee) “Spring Creek Power Conduit” shall mean the Project’s conveyance 

180 conduit, running from Whiskeytown Lake to Spring Creek Powerplant on Keswick Lake; and 

181 (ff) “Toyon Pipeline” shall mean the Project’s 16-Inch Pipeline which 

182 originates from the left abutment of Shasta Dam and runs to the section line between Sections 23 

183 and 26 of Township 33 North, Range 5 West, as shown on Exhibit “A”, attached hereto; and 

184 (gg) “Western” shall mean the Western Area Power Administration, United 

185 States, Department of Energy; and 

186 (hh) “6-Inch Pipeline” shall mean the Project’s pipeline, or the Contractor’s 

187 parallel replacement pipeline in those areas where use of the Project’s pipeline has been 

188 discontinued, originating at the north boundary of Section 26 through Section 35 in Township 33 

189 North, Range 5 West, to a storage tank in Section 2 of Township 32 North, Range 5 West, as 

190 generally shown on Exhibit “A”, attached hereto, and extending south to the north boundary of 

191 Section 11, Township 32 North, Range 5 West. 

192 TERM OF CONTRACT

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

194 20___, and supercedes the Existing Contract. In the event the Contractor wishes to renew this 

195 Contract beyond February 28, 20___, the Contractor shall submit a request for renewal in writing 

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

197 (b) Omitted. 

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

199 each, which periods shall be consistent with then-existing Reclamation-wide policy, under terms 
Contract No. 14-06-200-5272A-LTR1 

9

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

201 Contractor shall be afforded the opportunity to comment to the Contracting Officer on the 

202 proposed adoption and application of any revised policy applicable to the delivery of M&I Water 

203 that would limit the term of any subsequent renewal contract with the Contractor for the 

204 furnishing of M&I Water to less than 40 years. 

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

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

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

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

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

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

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

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

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

214 9(c)(1), of the Reclamation Project Act of 1939, subject to applicable Federal law and under 

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

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

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

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

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

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

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

222 shall notify the Contractor, and provide the reason(s) why such a determination could not be 
Contract No. 14-06-200-5272A-LTR1 

10

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

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

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

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

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

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

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

230 subdivision. 

231 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE CONTRACTOR

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

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

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

235 6,140 acre-feet of Project Water for M&I purposes. Water Delivered to the Contractor in 

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

237 Articles 4 and 7 of this Contract. 

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

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

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

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

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

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

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

245 water made available to the Contractor was 5,649 acre-feet. Nothing in subdivision (b) of this 

246 Article shall affect the rights and obligations of the parties under any provision of this Contract. 
Contract No. 14-06-200-5272A-LTR1 

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

248 applicable legal requirements. 

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

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

251 lieu), ground-water banking programs, surface water storage programs, and other similar 

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

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

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

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

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

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

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

259 compliance with Federal Reclamation law. Ground-water recharge programs, ground-water 

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

261 Water or other water furnished pursuant to this Contract conducted outside the Contractor’s 

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

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

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

265 guidelines. 

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

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

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

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

270 Contract, which evidences in excess of 32 years of diversions for M&I purposes of the quantities 

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

272 developing an appropriate baseline for biological assessment(s) prepared pursuant to the ESA, 
Contract No. 14-06-200-5272A-LTR1 

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

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

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

276 Article. 

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

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

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

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

281 impacting other Project Contractors. At the request of the Contractor, the Contracting Officer 

282 will consult with the Contractor prior to making such a determination. If the Contracting Officer 

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

284 the Contractor, the Contracting Officer will announce the availability of such water and shall so 

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

286 Contractor and other Project Contractors capable of taking such water to determine the most 

287 equitable and efficient allocation of such water. If the Contractor requests the delivery of any 

288 quantity of such water, the Contracting Officer shall make such water available to the Contractor 

289 in accordance with applicable statutes, regulations, guidelines, and policies. 

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

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

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

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

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

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

296 guidelines, and policies. 

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

298 State law to the reasonable and beneficial use of Water Delivered pursuant to this Contract 
Contract No. 14-06-200-5272A-LTR1 

13

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

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

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

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

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

304 contracts. 

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

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

307 accordance with the terms and conditions of such approval. 

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

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

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

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

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

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

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

315 Contract to use Project Water. 

316 (k) The Contractor shall take delivery of Project Water at point or points of 

317 delivery agreed upon pursuant to Article 5 of this Contract; Provided, That in no event shall the 

318 United States be obligated to furnish Project Water from Shasta Reservoir at the Meter Vault on 

319 the 6-inch Pipeline in excess of 40 acre-feet per Year; Provided further, That the Contractor’s 

320 entitlement to take Project Water from Shasta Reservoir at the Meter Vault on the 6-Inch 

321 Pipeline shall terminate 12 months after the Contracting Officer provides written notice to the 

322 Contractor that the capacity of the upstream Toyon Pipeline is needed by the United States for 

323 other Project purposes; Provide further, That the Contractor shall continue to perform all duties 

324 required by Article 40 of this Contract through the effective date of the termination. 
Contract No. 14-06-200-5272A-LTR1 

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325 (l) Water furnished to the Contractor pursuant to this Contract shall not be 

326 used by the Contractor for power production (hydroelectric generation) unless such use is 

327 incidental to the operation of the Buckeye Water Treatment Plant, and water delivery to 

328 individual customers for consumptive use and is so used with the concurrence of Reclamation. 

329 (m) Water furnished to the Contractor pursuant to this Contract shall be 

330 considered and accounted for separate and apart from the water furnished to the Contractor under 

331 Contract No. 14-06-200-2871A-R-1, dated _______________, between the United States and the 

332 Contractor. 

333 TIME FOR DELIVERY OF WATER

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

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

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

337 Historic Average and will be updated monthly, and more frequently if necessary, based on then338 current operational and hydrologic conditions and a new declaration with changes, if any, to the 

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

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

341 request of the Contractor. Concurrently with the declaration of the Water Made Available, the 

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

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

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

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

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

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

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

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

350 of Project Water the Contractor intends to put to reasonable and beneficial use within the 
Contract No. 14-06-200-5272A-LTR1 

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

352 during any Year. 

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

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

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

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

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

358 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

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

360 Contract shall be delivered to the Contractor at the Meter Vault on the 6-Inch Pipeline, from the 

361 Spring Creek Power Conduit at the Contractor’s Buckeye Water Treatment Plant, the existing 

362 point or points of delivery from the Sacramento River below Keswick Dam, and any additional 

363 point or points of delivery either on Project facilities or another location or locations mutually 

364 agreed to in writing by the Contracting Officer and the Contractor. 

365 (b) The Contracting Officer or other appropriate entity as designated by the 

366 Contracting Officer (hereinafter referred to as the “Other Appropriate Entity”) shall make all 

367 reasonable efforts to maintain sufficient flows and levels of water in the Sacramento River, 

368 Spring Creek Power Conduit, and the Toyon Pipeline to deliver Project Water to the Contractor 

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

370 (c) Omitted. 

371 (d) All Water Delivered to the Contractor pursuant to this Contract, including 

372 backwash water used for cleaning the filters at the Contractor’s Buckeye Water Treatment Plant, 

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

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

375 Article or at points where such water enters the Contractor’s Service Area as delineated in 

376 Exhibit “A”. Upon the request of either party to this Contract, the Contracting Officer shall 
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377 investigate the accuracy of such measurements and shall take any necessary steps to adjust any 

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

379 made, the Contracting Officer shall consult with the Contractor prior to making a final 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

394 MEASUREMENT OF WATER WITHIN THE CONTRACTOR’S SERVICE AREA

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

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

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

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

399 The Contractor shall be responsible for installing, operating, and maintaining and repairing all 

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

401 United States. The Contractor shall use the information obtained from such water measuring 

402 devices or water measuring methods to ensure its proper management of the water, to bill water 
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403 users for water delivered by the Contractor; and, if applicable, to record water delivered for M&I 

404 purposes by customer class as defined in the Contractor’s water conservation plan provided for 

405 in Article 26 of this Contract. Nothing herein contained, however, shall preclude the Contractor 

406 from establishing and collecting any charges, assessments, or other revenues authorized by 

407 California law. The Contractor shall include a summary of all its annual surface water deliveries 

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

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

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

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

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

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

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

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

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

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

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

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

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

421 inadequate, the parties shall within 60 days following the Contracting Officer‘s response, 

422 negotiate in good faith the earliest practicable date by which the Contractor shall modify said 

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

424 compliance with subdivision (a) of this Article. 

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

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

427 provisions described in subdivision (a) of this Article. 
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428 (d) The Contractor shall inform the Contracting Officer and the State of 

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

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

 (e) The Contractor shall inform the Contracting Officer on or before the 10th 431 

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

433 RATES AND METHOD OF PAYMENT FOR WATER

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

435 all Delivered Water at Rates, Charges, and the Tiered Pricing Component established in 

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

437 ratesetting policy shall be amended, modified, or superceded only through a public notice and 

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

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

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

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

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

443 “B,” as may be revised annually. 

444 (b) The Contracting Officer shall notify the Contractor of the Rates, Charges, 

445 and Tiered Pricing Component as follows: 

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

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

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

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

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

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

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

453 Calendar Year, and such notification shall revise Exhibit “B.” 
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454 (2) Prior to October 1 of each Calendar Year, the Contracting Officer 

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

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

457 those Rates are based. The Contractor shall be allowed not less than two months to review and 

458 comment on such computations and cost allocations. By December 31 of each Calendar Year, 

459 the Contracting Officer shall provide the Contractor with the final Rates and Tiered Pricing 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

479 between the advance payments for the Water Scheduled and payments for the quantities of Water 
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480 Delivered during each Year pursuant to this Contract shall be made as soon as practicable, but no 

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

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

483 day of February. 

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

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

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

487 month of delivery; Provided, That the Contractor may be granted an exception from the Tiered 

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

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

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

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

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

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

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

495 be computed pursuant to Article 20 of this Contract. 

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

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

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

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

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

501 (a) of this Article. 

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

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

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

505 the delivery of Project Water or the delivery of non-Project water through Project facilities shall 
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506 be allocated and applied in accordance with Federal Reclamation law and the associated rules or 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

524 exceed 80 percent of the Contract Total, then before the end of the month following the month of 

525 delivery the Contractor shall make an additional payment to the United States equal to the 

526 applicable Tiered Pricing Component. The Tiered Pricing Component for the amount of Water 

527 Delivered in excess of 80 percent of the Contract Total, but less than or equal to 90 percent of the 

528 Contract Total, shall equal one-half of the difference between the Rate established under 

529 subdivision (a) of this Article and the M&I Full Cost Water Rate. The Tiered Pricing 

530 Component for the amount of Water Delivered which exceeds 90 percent of the Contract Total 
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531 shall equal the difference between (i) the Rate established under subdivision (a) of this Article 

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

533 (2) Omitted. 

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

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

536 Contractor transfers to others but shall not include Project Water transferred to the Contractor, 

537 nor shall it include the additional water provided to the Contractor under the provisions of 

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

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

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

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

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

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

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

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

546 impact of the proposed change. 

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

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

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

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

551 accordance with the then applicable Project ratesetting policy. If the Contractor is receiving 

552 lower Rates and Charges because of inability to pay and is transferring Project Water to another 

553 entity whose Rates and Charges are not adjusted due to inability to pay, the Rates and Charges 

554 for transferred Project Water shall be the Contractor’s Rates and Charges and will not be 

555 adjusted to reflect the Contractor’s inability to pay. 
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556 (m) Pursuant to the Act of October 27, 1986 (100 Stat. 3050), the Contracting 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

573 NON-INTEREST BEARING OPERATION AND MAINTENANCE DEFICITS

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

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

576 liability therefor. 

577 SALES, TRANSFERS, OR EXCHANGES OF WATER

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

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

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

581 and applicable guidelines or regulations then in effect. No sale, transfer, or exchange of Project 
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582 Water under this Contract may take place without the prior written approval of the Contracting 

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

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

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

586 documentation should include, as appropriate, an analysis of ground-water impacts and 

587 economic and social effects, including environmental justice, of the proposed water transfers on 

588 both the transferor and transferee. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

607 be delivered to established cropland, wildlife refuges, ground-water basins or M&I use; (ii) occur 
Contract No. 14-06-200-5272A-LTR1 

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

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

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

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

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

613 under Federal law. 

614 (d) For the purpose of determining whether Section 3405(a)(1)(M) of the 

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

616 Officer acknowledges that the Contractor is within a county, watershed, or other area of origin, 

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

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

619 Rivers. 

620 APPLICATION OF PAYMENTS AND ADJUSTMENTS 

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

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

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

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

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

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

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

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

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

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

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

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

633 Contractor pursuant to Article 25 of this Contract shall be adjusted to reflect the actual costs 
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634 when the work has been completed. If the advances exceed the actual costs incurred, the 

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

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

637 TEMPORARY REDUCTIONS--RETURN FLOWS

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

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

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

641 Officer shall make all reasonable efforts to optimize Project Water deliveries to the Contractor as 

642 provided in this Contract. 

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

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

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

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

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

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

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

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

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

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

653 or reduction. 

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

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

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

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

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

659 claiming by, through, or under the Contractor. 
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660 CONSTRAINTS ON THE AVAILABILITY OF WATER

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

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

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

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

665 Contractor of said determination as soon as practicable. 

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

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

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

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

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

671 (c) Omitted. 

672 (d) Project Water furnished under this long-term renewal contract will be 

673 allocated in accordance with the then-existing Project M&I Water Shortage Policy. Such policy 

674 shall be amended, modified, or superceded only through a public notice and comment procedure. 

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

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

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

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

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

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

681 proceeding. 

682 UNAVOIDABLE GROUNDWATER PERCOLATION

683 13. Omitted. 

684 RULES AND REGULATIONS

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

686 pursuant to this Contract is subject to Federal Reclamation law, as amended and supplemented, 
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687 and the rules and regulations promulgated by the Secretary of the Interior under Federal 

688 Reclamation law. 

689 WATER AND AIR POLLUTION CONTROL

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

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

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

693 authorities. 

694 QUALITY OF WATER

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

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

697 Water to the Contractor in accordance with the water quality standards specified in subsection 

698 2(b) of the Act of August 26, 1937 (50 Stat. 865), as added by Section 101 of the Act of October 

699 27, 1986 (100 Stat. 3050) or other existing Federal laws. The United States is under no 

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

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

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

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

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

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

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

707 to surface and subsurface agricultural drainage discharges generated through the use of Federal 

708 or Contractor facilities or Project Water provided by the Contractor within the Contractor's 

709 Service Area. 

710 WATER ACQUIRED BY THE CONTRACTOR

711 OTHER THAN FROM THE UNITED STATES

712 17. (a) Omitted. 
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713 (b) Water or water rights now owned or hereafter acquired by the Contractor, 

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

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

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

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

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

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

720 to the United States of an appropriate rate as determined by the applicable Project ratesetting 

721 policy, the RRA, and the Project use power policy, if such Project use power policy is applicable, 

722 each as amended, modified, or superceded from time to time. 

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

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

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

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

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

728 the Project facilities. 

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

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

731 Project facilities. The Contractor hereby releases and agrees to defend and indemnify the United 

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

733 or property, direct or indirect, resulting from the acts of the Contractor, its officers’, employees’, 

734 agents’ or assigns’, act(s) in (i) extracting or diverting non-Project water from any source, or (ii) 

735 diverting such non-Project water into Project facilities. 

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

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

738 ground-water management plan for the area from which it was extracted. 
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739 (5) After Project purposes are met, as determined by the Contracting 

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

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

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

743 non-Project contractors. 

744 OPINIONS AND DETERMINATIONS

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

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

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

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

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

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

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

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

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

754 statute or regulation. 

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

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

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

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

759 with the Contractor to the extent reasonably practicable. 

760 COORDINATION AND COOPERATION

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

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

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

764 Project. The communication, coordination, and cooperation regarding operations and 
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765 management shall include, but not be limited to, any action which will or may materially affect 

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

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

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

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

770 and determinations to be made by the respective party. 

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

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

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

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

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

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

777 a real-time basis. 

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

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

780 intent: 

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

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

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

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

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

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

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

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

789 State of California to seek improved water resource management. 
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790 (3.1) The Secretary and the Contractor desire to work together to 

791 maximize the reasonable beneficial use of water for their mutual benefit. As a consequence, the 

792 Secretary and the Contractor will work in partnership and with others in the region of the 

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

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

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

796 surface water and groundwater, transfers and exchanges of water, the development and better 

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

798 water, and other operational and management options that may be identified in the future. 

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

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

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

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

803 management activities, and other issues as appropriate. 

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

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

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

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

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

809 CHARGES FOR DELINQUENT PAYMENTS

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

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

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

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

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

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

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

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

818 associated with a delinquent payment. 
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819 (b) The interest charge rate shall be the greater of the rate prescribed quarterly 

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

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

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

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

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

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

826 accrued interest, and finally to the overdue payment. 

827 EQUAL OPPORTUNITY

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

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

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

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

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

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

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

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

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

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

838 nondiscrimination clause. 

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

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

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

842 national origin. 

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

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

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

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

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

848 employees and applicants for employment. 

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

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

851 of the Secretary of Labor. 

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

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

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

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

856 such rules, regulations, and orders. 
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857 (f) In the event of the Contractor's noncompliance with the nondiscrimination 

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

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

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

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

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

863 otherwise provided by law. 

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

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

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

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

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

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

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

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

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

873 GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT

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

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

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

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

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

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

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

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

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

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

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

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

886 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

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

888 (42 U.S.C. 2000d), Section 504 of the Rehabilitation Act of 1975 (P.L. 93-112, as amended), the 

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

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

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

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

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

894 denied the benefits of, or be otherwise subjected to discrimination under any program or activity 
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895 receiving financial assistance from the Bureau of Reclamation. By executing this Contract, the 

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

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

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

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

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

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

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

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

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

905 enforcement thereof. 

906 PRIVACY ACT COMPLIANCE

907 24. (a) The Contractor shall comply with the Privacy Act of 1974 (5 U.S.C. 552a) 

908 (the Act) and the Department of the Interior rules and regulations under the Act (43 CFR 2.45 et 

909 seq.) in maintaining Landholder acreage certification and reporting records, required to be 

910 submitted to the Contractor for compliance with Sections 206 and 228 of the Reclamation 

911 Reform Act of 1982 (96 Stat. 1266), and pursuant to 43 CFR 426.18. 

912 (b) With respect to the application and administration of the criminal penalty 

913 provisions of the Act (5 U.S.C. 552a(i)), the Contractor and the Contractor's employees 

914 responsible for maintaining the certification and reporting records referenced in (a) above are 

915 considered to be employees of the Department of the Interior. See 5 U.S.C. 552a(m). 

916 (c) The Contracting Officer or a designated representative shall provide the 

917 Contractor with current copies of the Interior Department Privacy Act regulations and the Bureau 

918 of Reclamation Federal Register Privacy Act System of Records Notice (Acreage Limitation--

919 Interior, Reclamation-31) which govern the maintenance, safeguarding, and disclosure of 

920 information contained in the Landholder's certification and reporting records. 

921 (d) The Contracting Officer shall designate a full-time employee of the 

922 Bureau of Reclamation to be the System Manager who shall be responsible for making decisions 

923 on denials pursuant to 43 CFR 2.61 and 2.64 amendment requests pursuant to 43 CFR 2.72. The 

924 Contractor is authorized to grant requests by individuals for access to their own records. 

925 (e) The Contractor shall forward promptly to the System Manager each 

926 proposed denial of access under 43 CFR 2.64; and each request for amendment of records filed 

927 under 43 CFR 2.71; notify the requester accordingly of such referral; and provide the System 

928 Manager with information and records necessary to prepare an appropriate response to the 

929 requester. These requirements do not apply to individuals seeking access to their own 

930 certification and reporting forms filed with the Contractor pursuant to 43 CFR 426.18, unless the 

931 requester elects to cite the Privacy Act as a basis for the request. 
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932 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

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

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

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

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

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

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

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

940 contract administration. 

941 WATER CONSERVATION

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

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

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

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

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

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

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

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

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

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

952 conservation plan completed pursuant to subdivision (d) of Article 26 of this Contract have not 

953 yet been determined by the Contracting Officer to meet such criteria, due to circumstances which 

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

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

956 Officer to obtain such determination at the earliest practicable date, and thereafter the Contractor 
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957 immediately begins implementing its water conservation and efficiency program in accordance 

958 with the time schedules therein. 

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

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

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

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

963 by the Contracting Officer to be inappropriate for the Contractor. 

964 (c) The Contractor shall submit to the Contracting Officer a report on the 

965 status of its implementation of the water conservation plan on the reporting dates specified in the 

966 then existing conservation and efficiency criteria established under Federal law. 

967 (d) At five-year intervals, the Contractor shall revise its water conservation 

968 plan to reflect the then-current conservation and efficiency criteria for evaluating water 

969 conservation plans established under Federal law and submit such revised water management 

970 plan to the Contracting Officer for review and evaluation. The Contracting Officer will then 

971 determine if the water conservation plan meets Reclamation’s then-current conservation and 

972 efficiency criteria for evaluating water conservation plans established under Federal law. 

973 (e) If the Contractor is engaged in direct ground-water recharge, such activity 

974 shall be described in the Contractor’s water conservation plan. 

975 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

976 27. Except as specifically provided in Article 17 of this Contract, the provisions of 

977 this Contract shall not be applicable to or affect non-Project water or water rights now owned or 

978 hereafter acquired by the Contractor or any user of such water within the Contractor's Service 

979 Area. Any such water shall not be considered Project Water under this Contract. In addition, 

980 this Contract shall not be construed as limiting or curtailing any rights which the Contractor or 

981 any water user within the Contractor's Service Area acquires or has available under any other 

982 contract pursuant to Federal Reclamation law. 
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983 OPERATION AND MAINTENANCE BY OPERATING NON-FEDERAL ENTITY

984 28. Omitted. 

985 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

986 29. The expenditure or advance of any money or the performance of any obligation of 

987 the United States under this Contract shall be contingent upon appropriation or allotment of 

988 funds. Absence of appropriation or allotment of funds shall not relieve the Contractor from any 

989 obligations under this Contract. No liability shall accrue to the United States in case funds are 

990 not appropriated or allotted. 

991 BOOKS, RECORDS, AND REPORTS

992 30. (a) The Contractor shall establish and maintain accounts and other books and 

993 records pertaining to administration of the terms and conditions of this Contract, including: the 

994 Contractor's financial transactions, water supply data, and Project land and right-of-way 

995 agreements; the water users' land-use (crop census), land ownership, land-leasing and water use 

996 data; and other matters that the Contracting Officer may require. Reports thereon shall be 

997 furnished to the Contracting Officer in such form and on such date or dates as the Contracting 

998 Officer may require. Subject to applicable Federal laws and regulations, each party to this 

999 Contract shall have the right during office hours to examine and make copies of the other party's 

1000 books and records relating to matters covered by this Contract.

1001 (b) Notwithstanding the provisions of subdivision (a) of this Article, no 

1002 books, records, or other information shall be requested from the Contractor by the Contracting 

1003 Officer unless such books, records, or information are reasonably related to the administration or 

1004 performance of this Contract. Any such request shall allow the Contractor a reasonable period of 

1005 time within which to provide the requested books, records, or information. 

1006 (c) Omitted. 

1007 ASSIGNMENT LIMITED--SUCCESSORS AND ASSIGNS OBLIGATED

1008 31. (a) The provisions of this Contract shall apply to and bind the successors and 

1009 assigns of the parties hereto, but no assignment or transfer of this Contract or any right or interest 

1010 therein shall be valid until approved in writing by the Contracting Officer. 

1011 (b) The assignment of any right or interest in this Contract by either party 

1012 shall not interfere with the rights or obligations of the other party to this Contract absent the 

1013 written concurrence of said other party. 
Contract No.14-06-200-5272A-LTR1 

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1014 (c) The Contracting Officer shall not unreasonably condition or withhold his 

1015 approval of any proposed assignment. 

1016 SEVERABILITY

1017 32. In the event that a person or entity who is neither (i) a party to a Project contract, 

1018 nor (ii) a person or entity that receives Project Water from a party to a Project contract, nor (iii) 

1019 an association or other form of organization whose primary function is to represent parties to 

1020 Project contracts, brings an action in a court of competent jurisdiction challenging the legality or 

1021 enforceability of a provision included in this Contract and said person, entity, association, or 

1022 organization obtains a final court decision holding that such provision is legally invalid or 

1023 unenforceable and the Contractor has not intervened in that lawsuit in support of the plaintiff(s), 

1024 the parties to this Contract shall use their best efforts to (i) within 30 days of the date of such 

1025 final court decision identify by mutual agreement the provisions in this Contract which must be 

1026 revised, and (ii) within three months thereafter promptly agree on the appropriate revision(s). 

1027 The time periods specified above may be extended by mutual agreement of the parties. Pending 

1028 the completion of the actions designated above, to the extent it can do so without violating any 

1029 applicable provisions of law, the United States shall continue to make the quantities of Project 

1030 Water specified in this Contract available to the Contractor pursuant to the provisions of this 

1031 Contract which were not found to be legally invalid or unenforceable in the final court decision. 

1032 RESOLUTION OF DISPUTES

1033 33. Should any dispute arise concerning any provisions of this Contract, or the 

1034 parties’ rights and obligations thereunder, the parties shall meet and confer in an attempt to 

1035 resolve the dispute. Prior to the Contractor commencing any legal action, or the Contracting 

1036 Officer referring any matter to Department of Justice, the party shall provide to the other party 

1037 30 days’ written notice of the intent to take such action; Provided, That such notice shall not be 

1038 required where a delay in commencing an action would prejudice the interests of the party that 

1039 intends to file suit. During the 30-day notice period, the Contractor and the Contracting Officer 
Contract No.14-06-200-5272A-LTR1 

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1040 shall meet and confer in an attempt to resolve the dispute. Except as specifically provided, 

1041 nothing herein is intended to waive or abridge any right or remedy that the Contractor or the 

1042 United States may have. 

1043 OFFICIALS NOT TO BENEFIT

1044 34. No Member of or Delegate to Congress, Resident Commissioner, or official of the 

1045 Contractor shall benefit from this Contract other than as a water user or landowner in the same 

1046 manner as other water users or landowners. 

1047 CHANGES IN CONTRACTOR’S SERVICE AREA

1048 35. (a) While this Contract is in effect, no change may be made in the 

1049 Contractor's Service Area, by inclusion or exclusion of lands, dissolution, consolidation, merger, 

1050 or otherwise, except upon the Contracting Officer's written consent. 

1051 (b) Within 30 days of receipt of a request for such a change, the Contracting 

1052 Officer will notify the Contractor of any additional information required by the Contracting 

1053 Officer for processing said request, and both parties will meet to establish a mutually agreeable 

1054 schedule for timely completion of the process. Such process will analyze whether the proposed 

1055 change is likely to: (i) result in the use of Project Water contrary to the terms of this Contract; 

1056 (ii) impair the ability of the Contractor to pay for Project Water furnished under this Contract or 

1057 to pay for any Federally-constructed facilities for which the Contractor is responsible; and (iii) 

1058 have an impact on any Project Water rights applications, permits, or licenses. In addition, the 

1059 Contracting Officer shall comply with the NEPA and the ESA. The Contractor will be 

1060 responsible for all costs incurred by the Contracting Officer in this process, and such costs will 

1061 be paid in accordance with Article 25 of this Contract. 

1062 FEDERAL LAWS

1063 36. By entering into this Contract, the Contractor does not waive its rights to contest 

1064 the validity or application in connection with the performance of the terms and conditions of this
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1065 Contract of any Federal law or regulation; Provided, That the Contractor agrees to comply with 

1066 the terms and conditions of this Contract unless and until relief from application of such Federal 

1067 law or regulation to the implementing provision of the Contract is granted by a court of 

1068 competent jurisdiction. 

1069 NOTICES

1070 37. Any notice, demand, or request authorized or required by this Contract shall be 

1071 deemed to have been given, on behalf of the Contractor, when mailed, postage prepaid, or 

1072 delivered to the Area Manager, Bureau of Reclamation, Northern California Area Office, 16349 

1073 Shasta Dam Boulevard, Shasta Lake, California 96019, and on behalf of the United States, when 

1074 mailed, postage prepaid, or delivered to the City Mayor, City of Redding, 777 Cypress Avenue, 

1075 Redding, California 96001. The designation of the addressee or the address may be changed by 

1076 notice given in the same manner as provided in this Article for other notices. 

1077 CONFIRMATION OF CONTRACT

1078 38. The Contractor, after the execution of this Contract, shall furnish to the 

1079 Contracting Officer evidence that pursuant to the laws of the State of California, the Contractor 

1080 is a legally constituted entity and the Contract is lawful, valid, and binding on the Contractor. 

1081 This Contract shall not be binding on the United States until such evidence has been provided to 

1082 the Contracting Officer’s satisfaction. 

1083 USE OF THE 6-INCH PIPELINE

1084 39. The Contractor may take Project Water from the 6-Inch Pipeline pursuant to the 

1085 terms and limitations of subdivision (k) of Article 3 of this Contract; use the 6-Inch Pipeline for 

1086 approved water transfers in accordance with Article 9 of this Contract; and provide for 

1087 pressurized deliveries of Project Water through the 6-Inch Pipeline to the Contractor's Service 

1088 Area pursuant to this Contract. 

1089 O&M AND OWNERSHIP OF THE 6-INCH PIPELINE--UNITED STATES TO BE HELD 

1090 40. (a) The Contractor at its own expense shall O&M the 6-Inch Pipeline as 

1091 identified on Exhibit “A” of this Contract to the extent reasonably necessary to keep that Project 

1092 facility operating in a satisfactory manner. By letter agreement, including provision for 

1093 reimbursement by the Contractor of all costs incurred by the United States, the Contractor may 

1094 be relieved of its responsibilities to O&M one or more sections of the 6-Inch Pipeline and 
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1095 Exhibit “A” shall be modified accordingly. Such relief, however, does not relieve the Contractor 

1096 from maintaining the United States ability to transport water from the Meter Vault to the 

1097 southernmost terminus of the 6-Inch Pipeline. 

1098 (b) Unless otherwise provided by the Congress of the United States, 

1099 ownership of the 6-Inch Pipeline shall remain in the name of the United States. 

1100 (c) No liability shall accrue against the United States, its officers, and 

1101 employees because of damage caused by O&M of the 6-Inch Pipeline by the Contractor. The 

1102 Contractor hereby releases the United States and agrees to indemnify it from all damage claims 

1103 that may result from such O&M. 

1104 (d) From time to time the Contracting Officer may make a review of 

1105 maintenance of the 6-Inch Pipeline in order to assist the Contractor in determining the condition 

1106 of those facilities and the adequacy of the maintenance program. The review may include any or 

1107 all of the 6-Inch Pipeline. A report of the review, including recommendations, if any, shall be 

1108 prepared and copies shall be furnished to the Contractor. If deemed necessary by the Contracting 

1109 Officer or when requested by the Contractor, an inspection of all or part of the 6-Inch Pipeline 

1110 and of the Contractor’s books and records relating thereto may be made to ascertain whether the 

1111 requirements of this Contract are being satisfactorily performed by the Contractor or to assist the 

1112 Contractor in solving specific problems. Any such inspection shall, except in a case of 

1113 emergency, be made after written notice to the Contractor and the actual cost thereof shall be 

1114 paid by the Contractor to the United States in the manner provided in Article 25 of this Contract. 

1115 Contractor representatives may participate in the review or inspection. In the event such 

1116 inspection reveals that the 6-Inch Pipeline is in need of repair reasonably necessary to keep the 

1117 line operating in a satisfactory manner, in the conclusive opinion of the Contracting Officer, and 

1118 the Contractor neglects or fails to make such repairs but retains its desire to continue to take 

1119 water from the Meter Vault, the United States may cause the repairs to be made and charge the 

1120 costs thereof to the Contractor. The Contractor shall pay the full amount of the costs of any such 
Contract No.14-06-200-5272A-LTR1 

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1121 inspection and/or repairs to the United States on or before March 1 following the Calendar Year 

1122 during which the costs of such inspection and/or repairs were incurred. 

1123 (e) If any time the Contracting Officer determines that the Contractor has not 

1124 cared for, operated, or maintained the 6-Inch Pipeline pursuant to the terms of this Contract, the 

1125 Contracting Officer may send notice to the Contractor specifying the cause(s) thereof and 

1126 requiring their remedy within 60 days. If such cause(s) is (are) not remedied to the satisfaction 

1127 of the Contracting Officer within that 60-day period, the United States may take back and 

1128 operate and maintain the 6-Inch Pipeline. The cost of the care, operation, and maintenance of the 

1129 6-Inch Pipeline, during the time of their O&M by the United States, shall be paid in advance by 

1130 the Contractor on the basis of estimates for a particular Year, or portion thereof, furnished to it 

1131 by the United States. The surplus of any amount advanced by the Contractor in excess of the 

1132 actual cost of O&M by the United States, shall be refunded to the Contractor or at the option of 

1133 the Contractor credited upon estimated future costs of O&M by the United States. Whenever, in 

1134 the opinion of the Contracting Officer the funds available from payments made by the Contractor 

1135 to pay the estimated O&M costs are inadequate to properly maintain the 6-Inch Pipeline to the 

1136 end of any Year, the Contracting Officer may give to the Contractor notice of a supplemental 

1137 O&M charge stating the additional advance of funds required for such O&M and the Contractor 

1138 shall pay the amount thereof on or before the date specified in such notice. The 6-Inch Pipeline 

1139 so taken back by the United States may be retransferred to the Contractor upon the furnishing to 

1140 the Contractor by the United States of a 90-day written notice of intention to retransfer. 

1141 (f) In no event shall any substantial change be made by the Contractor to the 

1142 6-Inch Pipeline without first obtaining the written consent of the Contracting Officer. The 

1143 Contracting Officer’s opinion as to whether any change is substantial shall be conclusive and 

1144 binding on the Contractor. 
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1145 O&M AND OWNERSHIP OF TOYON PIPELINE

1146 41. (a) In the event the United States transfers O&M, or O&M and ownership of 

1147 the Toyon Pipeline or portions thereof, to a non-Federal entity, including the Contractor, this 

1148 Contract shall be revised as needed by a letter of agreement to conform with the terms and 

1149 conditions of such transfer; Provided, That the United States shall consult with the Contractor 

1150 prior to entering into any such O&M, or O&M and ownership agreement with the non-Federal 

1151 entity. 

1152 (b) Unless otherwise provided by the Congress of the United States, 

1153 ownership of the Toyon Pipeline shall remain in the name of the United States. 

1154 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of 

1155 the day and year first above written. 

1156 THE UNITED STATES OF AMERICA 

1157 By: ______________________________________ 

1158 Regional Director, Mid-Pacific Region 

1159 Bureau of Reclamation 

1160 CITY OF REDDING 

1161 By: ______________________________________ 

1162 Mayor 

1163 Attest: 

1164 By: _____________________________ 

1165 City Clerk 

1166 (I:\LTRC\Draft LTRC\04-19-2004 Redding LTRC Final Draft Contract.doc) 
Contract No.14-06-200-5272A-LTR1 

EXHIBIT A

[Map or Description of Contractor’s Service Area]
Contract No.14-06-200-5272A-LTR1 

EXHIBIT B 

[Initial Rates and Charges] 

2004 Water Rates and Charges

City of Redding

Spring 

Sacramento Creek Toyon 

River Conduit Pipeline

COST OF SERVICE RATES: 

Capital Rates $ 9.41 $ 7.08 $ (219.60) 

Minimum Rate Adjustment 223.21 

O&M Rates: 

 Water Marketing 5.01 5.01 5.01 

 Storage 6.38 6.38 6.38 

Deficit Rates: 1.59 0.53 0.00 

CFO/PFR Adjustment rate 3/ 2.76 0.46 0.00

 

TOTAL COST OF SERVICE RATE $25.14 $19.46 $15.00 1/ 

M&I FULL COST RATE $30.79 $23.80 $15.00

CHARGES UNDER P.L. 102-575 TO THE

RESTORATION FUND 2/ 

 Restoration Payments (3407(d)(2)(A)) $15.64 $15.64 $15.64

1/ Cost of service rate is the greater of the CVP minimum rate, the contract rate and the cost of 

service rate. 

2/ Restoration fund charges are payments in addition to the water rates and were determined 

pursuant to Title XXXIV of Public Law 102-575. Restoration fund charges are on a fiscal year 

basis (10/1 - 9/30). 

3/ Chief Financial Officer (CFO) adjustment and Provision for Replacement (PFR) expense is 

being distributed over a 5-year period beginning in FY 2003 for those contractors that requested 

those costs be deferred.