M&I Only 

R. O. Final Draft 10/25-2004 

Contract No. 

14-06-200-5183A-LTR1 

UNITED STATES 

DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

Central Valley Project, California 

LONG TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES

AND

EAST BAY MUNICIPAL UTILITY DISTRICT

PROVIDING FOR PROJECT WATER SERVICE

FROM THE AMERICAN RIVER DIVISION

Table of Contents

Article No. Title Page No.

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

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

1 Definitions ......................................................................................................... 6-10 

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

3 Water to be Made Available and Delivered to the Contractor ........................ 12-17 

4 Time for Delivery of Water ............................................................................. 17-18 

5 Point of Diversion and Responsibility for Distribution of Water.................... 18-22 

6 Measurement of Water Within the Service Area............................................. 23-24 

7 Rates and Method of Payment for Water......................................................... 24-31 

8 Omitted ..................................................................................................................31 

9 Sales, Transfers, or Exchanges of Water ......................................................... 31-32 

10 Application of Payments and Adjustments............................................................33 

11 Temporary Reductions--Return Flows ............................................................ 34-35 

12 Constraints on the Availability of Water ......................................................... 35-36 

13 Omitted ..................................................................................................................36 

14 Rules and Regulations ...........................................................................................36 

15 Water and Air Pollution Control............................................................................36 

16 Quality of Water ....................................................................................................37 

17 Water Acquired by the Contractor Other Than From the United States ......... 37-39 

18 Opinions and Determinations .......................................................................... 39-40 
Contract No. 14-06-200-5183A-LTR1 

Table of Contents - continued

Article No. Title Page No.

19 Coordination and Cooperation......................................................................... 40-42 

20 Charges for Delinquent Payments .........................................................................42 

21 Equal Opportunity............................................................................................ 42-43 

22 General Obligation--Benefits Conditioned Upon Payment ...................................44 

23 Compliance With Civil Rights Laws and Regulations ..........................................44 

24 Omitted ..................................................................................................................44 

25 Contractor to Pay Certain Miscellaneous Costs ....................................................45 

26 Water Conservation ......................................................................................... 45-46 

27 Existing or Acquired Water or Water Rights.........................................................47 

28 Omitted ..................................................................................................................47 

29 Contingent on Appropriation or Allotment of Funds ............................................47 

30 Books, Records, and Reports........................................................................... 47-48 

31 Assignment Limited--Successors and Assigns Obligated .....................................48 

32 Severability ...................................................................................................... 48-49 

33 Resolution of Disputes...........................................................................................49 

34 Officials Not to Benefit..........................................................................................49 

35 Changes in Contractor's Service Area ...................................................................50 

36 Federal Laws..........................................................................................................50 

37 Notices ...................................................................................................................51

38 Confirmation of Contract.......................................................................................51 

Signature Page .......................................................................................................52 

Exhibit A - Map of Contractor’s Service Area 

Exhibit B - Rates and Charges 
R.O. Final Draft 10/25-2004 

Contract No. 

14-06-200-5183A-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 EAST BAY MUNICIPAL UTILITY DISTRICT

8 PROVIDING FOR PROJECT WATER SERVICE

9 FROM THE AMERICAN RIVER DIVISION

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

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

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

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

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

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

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

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

18 and EAST BAY MUNICIPAL UTILITY DISTRICT, hereinafter referred to as the Contractor, a 

19 public agency of the State of California, duly organized, existing, and acting pursuant to the laws 

20 thereof; 

21 WITNESSETH, That: 
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22 EXPLANATORY RECITALS

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

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

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

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

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

28 and the San Joaquin River and their tributaries; and 

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

30 appurtenant facilities, hereinafter collectively referred to as the American River Division 

31 facilities, which will be used in part for the furnishing of this supplemental supply of water to the 

32 Contractor pursuant to the terms of this Contract; and 

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

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

[4th 35 ] WHEREAS, the Contractor and the United States entered into Contract 

36 No. 14-06-200-5183A, dated December 22, 1970, hereinafter referred to as the Original 

37 Contract, which established terms for the delivery to the Contractor of a supplemental supply of 

38 Project Water from the American River Division, of up to 150,000 acre-feet per year of Project 

39 Water from a point on the Folsom South Canal at Station 666+50; and 

40 [4.1] WHEREAS, Contract No. 14-06-200-5183A was superseded by Amendatory 

41 Contract No. 14-06-200-5183A-1, dated July 20, 2001, hereinafter referred to as the Existing 

42 Contract; and 

[5th 43 ] Omitted; and 
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[6th 44 ] WHEREAS, Section 3404(c) of the Central Valley Project Improvement Act 

45 (CVPIA) provides for long-term renewal of the Existing Contract following completion of 

46 appropriate environmental documentation, including a programmatic environmental impact 

47 statement (PEIS) pursuant to the National Environmental Policy Act (NEPA) analyzing the 

48 direct and indirect impacts and benefits of implementing the CVPIA and the potential renewal of 

49 all existing contracts for Project Water; and 

[7th 50 ] WHEREAS, the United States has completed the PEIS and all other appropriate 

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

[8th 52 ] WHEREAS, the Contractor has requested the long-term renewal of the Existing 

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

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

[9th 55 ] WHEREAS, the United States has determined that the Contractor has fulfilled all 

56 of its obligations under the Existing Contract; and 

[10th 57 ] WHEREAS, the Contractor has demonstrated to the satisfaction of the 

58 Contracting Officer projected future demand for water use such that the Contractor has the 

59 capability and expects to utilize fully for reasonable and beneficial use the quantity of Project 

60 Water to be made available to it pursuant to this Contract; and 

[11th 61 ] WHEREAS, water obtained from the Project has been relied upon by urban and 

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

63 as an essential portion of its water supply; and 

[12th 64 ] WHEREAS, the economies of regions within the Project, including the 

65 Contractor=s, depend upon the continued availability of water, including water service from the 
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66 Project; and 

67 [12.1] WHEREAS, in the CALFED Programmatic Record of Decision, dated August 28, 

68 2000, the United States and the State of California adopted a general target of continuously 

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

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

71 concentrations at Clifton Court Forebay and other southern and central Delta drinking water 

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

73 public health protection using a cost-effective combination of alternative source waters, source 

74 control and treatment technologies; and 

[13th 75 ] WHEREAS, the Secretary intends through coordination, cooperation, and 

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

77 Project for all Project purposes; and 

78 [13.1] WHEREAS, the Contractor and the water users in its Service Area have improved 

79 and will continue to improve water use efficiency through water conservation, water 

80 reclamation, and other Best Management Practices. Implementation of these measures has 

81 reduced and will continue to reduce the ability of the Contractor and the water users in its 

82 Service Area to withstand a Condition of Shortage; and 

[14th 83 ] WHEREAS, the mutual goals of the United States and the Contractor include: to 

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

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

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

87 and to comply with all applicable environmental statutes, all consistent with the legal obligations 
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88 of the United States relative to the Project; and 

[15th 89 ] WHEREAS, the parties intend by this Contract to develop a more cooperative 

90 relationship in order to achieve their mutual goals; and 

[16th 91 ] Omitted; and 

[17th 92 ] Omitted; and 

[18th 93 ] WHEREAS, in recognition of dry year considerations, the Contractor is willing to 

94 forego deliveries in certain years when the Central Valley Project system faces operational limits 

95 and the Contractor has sufficient carryover storage under its exclusive control; and 

96 [19th] WHEREAS, it is the mutual interest of the parties to encourage the development 

97 by the Contractor of additional water storage capacity, including conjunctive use and 

98 groundwater storage programs; and 

[20th 99 ] WHEREAS, in this instance, “historic use@ of Project Water is not an appropriate 

100 basis for calculating the supply of Project Water to be made available to the Contractor during 

101 years in which Project Water shortages are being imposed on Project Contractors north of the 

102 Sacramento/San Joaquin River Delta (“Delta@), and therefore this Contract must incorporate a 

103 different methodology for calculating the amount of Project Water to be made available to the 

104 Contractor during water short years; and 

[21st 105 ] WHEREAS, it is understood that this Contract and any renewal thereof, will be 

106 the basis of substantial capital investments by the Contractor in new diversion and conveyance 

107 facilities, which are intended to reduce the frequency and severity of customer deficiencies 

108 within the Contractor=s water service area, and may provide available excess capacity for the use 

109 and benefit of the United States, the environment, and other Project Contractors; and 

[22nd 110 ] WHEREAS, the Contractor, in accordance with the terms and conditions of the 
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111 original contract, has paid substantial sums to the United States, and has not taken any 

112 substantial deliveries under its original contract. Said payment has reduced potential deficit 

113 obligations to the Contractor and has likely resulted in lower water rates paid by other Project 

114 Contractors; and 

[23rd 115 ] WHEREAS, The United States and the Contractor agreed in the Existing Contract 

116 that the terms and conditions for long-term renewal thereof shall be as set forth in the Existing 

117 Contract, and the United States and the Contractor are willing to enter into this long-term 

118 renewal Contract on the terms and conditions set forth below. 

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

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

121 DEFINITIONS

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

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

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

125 both dates inclusive; 

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

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

128 annually by the Contracting Officer pursuant to this Contract; 

129 (c) “Condition of Shortage@ shall mean a condition respecting the Project 

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

131 the Contract Total; 

132 (d) AContracting Officer@ shall mean the Secretary of the Interior=s duly 
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133 authorized representative acting pursuant to this Contract or applicable Federal Reclamation law 

134 or regulation; 

135 (e) AContract Total@ shall mean either the maximum amount of 133,000 

136 acre-feet of water to which the Contractor is entitled under subdivision (a)(1) of Article 3 of this 

137 Contract; or, the maximum amount of 150,000 acre-feet of water to which the Contractor is 

138 entitled in any given year under subdivision (a)(2) or (a)(3), whichever subdivision is the 

139 then-operative provision, of Article 3 of this Contract; 

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

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

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

143 without amendment of this Contract; 

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

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

146 (h-i) Omitted; 

147 (j) AFull Cost Rate@ shall mean an annual rate as determined by the 

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

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

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

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

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

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

154 in accordance with subsections 202(3)(B) and (3)(C) of the RRA. The Full-Cost Rate includes 
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155 actual operation, maintenance, and replacement costs consistent with Section 426.2 of the Rules 

156 and Regulations for the Reclamation Reform Act of October 12, 1982 (96 Stat. 1263), as 

157 amended, (RRA); 

158 (k-l) Omitted; 

159 (m) AIrrigation Water@ shall mean water made available from the Project that is 

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

161 incidental thereto, and watering of livestock; 

162 (n) Omitted; 

163 (o) AMunicipal and Industrial (M&I) Water@ shall mean Project Water, other 

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

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

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

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

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

169 this Article; 

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

171 the delivery of M&I Water; 

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

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

174 maintenance of Project facilities; 

175 (r) Omitted; 

176 (s) AProject@ shall mean the Central Valley Project owned by the United 
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177 States and managed by the Department of the Interior, Bureau of Reclamation; 

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

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

180 Reclamation law; 

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

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

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

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

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

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

187 (w) ARecent Historic Average@ shall mean the most recent five-year average of 

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

189 preceding contract(s); 

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

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

192 through any agency of the Department of the Interior; 

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

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

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

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

197 (z.1) ATotal System Storage@ shall mean the quantity of untreated water stored 

198 in Pardee, Camanche, San Pablo, Upper San Leandro, Briones, Lafayette and Chabot Reservoirs, 
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199 and any quantity of water that has been moved from said reservoirs to other untreated water 

200 storage facilities operated for the benefit of Contractor in the same Year; 

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

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

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

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

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

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

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

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

209 TERM OF CONTRACT 

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

211 2045, and supersedes the Existing Contract. In the event the Contractor wishes to renew the 

212 Contract beyond February 28, 2045, the Contractor shall submit a request for renewal in writing 

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

214 (b) Omitted. 

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

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

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

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

219 proposed adoption and application of any revised policy applicable to the delivery of Project 

220 M&I Water that would limit the term of any subsequent renewal contract with the Contractor for 
Contract No. 14-06-200-5183A-LTR1 

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

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

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

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

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

226 term of this Contract, all authorized Project construction expected to occur will have occurred, 

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

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

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

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

231 9(c)(1) of the Reclamation Project Act of 1939, subject to applicable Federal law and under 

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

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

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

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

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

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

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

239 notify the Contractor, and provide the reason(s) why such a determination could not be made. 

240 Further, the Contracting Officer shall make such a determination as soon thereafter as possible 

241 so as to permit, upon request of the Contractor and satisfaction of the conditions set out above, 

242 conversion to a contract under subsection 9(c)(1). In the event such determination of costs has 

243 not been made at a time which allows conversion of this Contract during the term of this 
Contract No. 14-06-200-5183A-LTR1 

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

245 parties shall incorporate in any subsequent renewal contract as described in subdivision (c) of 

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

247 subdivision. 

248 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE CONTRACTOR

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

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

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

252 Water pursuant to either subdivision (1), (2), or (3) below: 

253 (1) At Freeport on the Sacramento River, the Contractor shall be 

254 entitled to take delivery of up to a total of 133,000 acre-feet of Project Water for M&I purposes 

255 in any Year in which the Contractor=s March 1 forecast of its October 1 Total System Storage, as 

256 revised monthly through May 1 is less than 500,000 acre-feet based on a 50 percent exceedance, 

257 or any different reasonable exceedance used by the Contractor to declare rationing within the 

258 Contractor=s Water Service Area, or as otherwise agreed to by the parties (referred to as the TSS 

259 forecast). Said entitlement shall not exceed a total of 165,000 acre-feet of Water delivered in 

260 any three consecutive Year period that the Contractor=s Total System Storage forecast remains 

261 below 500,000 acre-feet. 

262 (2) At Site 5 on the lower American River as described in 

263 subdivision (a)(2) of Article 5 of this Contract, the Contractor shall be entitled to take delivery of 

264 up to a total of 150,000 acre-feet of Project Water for M&I purposes in any Year, provided that 

265 conditions in Article 5(a)(2) are satisfied. 

266 (3) At Station 666+50 on the Folsom South Canal, the Contractor shall 
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267 be entitled to take delivery of up to a total of 150,000 acre-feet of Project Water for M&I 

268 purposes in any Year, only under the terms and conditions of Article 5(a)(3). 

269 The quantity of Water Delivered to the Contractor in accordance with this subdivision shall be 

270 scheduled and paid for pursuant to the provisions of Articles 4 and 7 of this Contract. 

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

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

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

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

275 Article in any given Year is uncertain. The Contracting Officer=s modeling referenced in the 

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

277 Contractor in many years. During the five years immediately preceding execution of the 

278 Existing 

279 Contract, the average amount of water made available under the Original Contract was 75,000 

280 acre-feet based on contract minimum quantities. Nothing in subdivision (b) of this Article shall 

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

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

283 applicable legal requirements. 

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

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

286 groundwater banking programs, surface water storage programs, and other similar programs 
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287 utilizing Project Water or other water furnished pursuant to this Contract conducted within the 

288 Contractor=s Service Area which are consistent with applicable State law and result in use 

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

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

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

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

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

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

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

296 Water or other water furnished pursuant to this Contract conducted outside the Contractor=s 

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

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

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

300 guidelines. 

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

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

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

304 as amended, that are within the Contractor=s legal authority to implement. Nothing herein shall 

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

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

307 documentation referred to in this Article. 

308 (f) Following the declaration of Water Made Available under Article 4 of this 
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309 Contract, the Contracting Officer will make a determination whether Project Water, or other 

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

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

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

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

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

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

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

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

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

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

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

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

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

323 Year referred to as Acarryover.@ The Contractor may request permission to use during the current 

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

325 Contractor during the subsequent Year referred to as Apreuse.@ The Contracting Officer=s written 

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

327 and policies. 

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

329 State law to the reasonable and beneficial use of Water Delivered pursuant to this Contract 
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330 during the term thereof and any subsequent renewal Contracts, as described in Article 2 of this 

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

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

333 sentence shall affect the Contracting Officer=s ability to impose shortages under Article 11 or 

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

335 Contracts. 

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

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

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

339 such approval. 

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

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

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

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

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

345 Contractor=s position in such a proceeding; Provided further, That in such proceedings the 

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

347 Contract to use Project Water. 

348 TIME FOR DELIVERY OF WATER

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

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

351 Such declaration will be expressed in terms of both Water Made Available and the Recent 
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352 Historic Average and will be updated monthly, and more frequently if necessary, based on then353 current operational and hydrologic conditions and a new declaration with changes, if any, to the 

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

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

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

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

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

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

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

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

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

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

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

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

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

367 during any year. 

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

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

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

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

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

373 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

374 5. (a) Project Water scheduled pursuant to subdivision (b) of Article 4 of this 
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375 Contract shall be delivered to the Contractor at one of the following points of delivery; Provided,

376 that any necessary consultation under Section 7 of the Endangered Species Act, and compliance 

377 with NEPA, as applicable, has been completed prior to any diversions: 

378 (1) A point of delivery on the Sacramento River at Freeport (Freeport). 

379 It is the intent of the parties to pursue this point of delivery in cooperation with City and County 

380 of Sacramento and the Sacramento County Water Agency. The parties acknowledge that the 

381 point of delivery identified above, is included as an authorized point of delivery under the water 

382 rights for the Project if it is sited consistent with the State Water Resources Control Board 

383 (SWRCB) Order of July 29, 1999, pertaining to Permits 11315 and 11316 or other existing 

384 appropriate SWRCB permits. If it is not, Project Water will not be delivered to this point of 

385 delivery unless and until such point is added to the water rights permits of the Project. Subject to 

386 reimbursement of costs pursuant to Article 25 of this Contract the Contracting Officer will 

387 petition the California SWRCB to include the necessary points of delivery to the water rights for 

388 the Project, and the Contractor shall cooperate with and assist the Contracting Officer in 

389 prosecuting such petition in a timely manner. The Contracting Officer shall bear neither 

390 responsibility nor liability for existing and/or future constructed non-federal diversion or 

391 delivery facilities or the use thereof. 

392 (2) A point of delivery identified as ASite 5" in the Environmental 

393 Impact Statement supporting the Existing Contract published in December 2000, subject to the 

394 following conditions: (i) prior to approval to divert from Site 5, the Contractor must complete 

395 and implement a water storage strategy, satisfactory to the Contracting Officer, which will allow 

396 the Contractor to meet Project purposes within the necessary flow pattern limitations 

397 accompanied by the appropriate environmental documentation; (ii) prior to the approval to divert 
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398 from Site 5 the Contractor must comply with all relevant State and Federal laws and regulations 

399 including but not limited to the California Wild and Scenic Rivers Act; (iii) the Contractor will 

400 not divert at a rate higher than 155 cfs, or when the American River flow rates are below those 

401 specified in the decision of Judge Richard Hodge in Alameda Superior Court on January 2, 1990; 

402 (iv) the Contractor will not divert unless the point of delivery is an authorized point of diversion 

403 for the associated Project Water rights. 

404 (3) Deliveries of water diverted from Nimbus Dam are hereby 

405 prohibited; Provided, however, if the permitting and necessary agreements for a diversion at 

406 either Freeport or Site 5 are not completed by July 31, 2002, or another date agreed to by the 

407 parties, deliveries shall be made, without further amendment of the Contract, at Station 666+50 

408 on the Folsom South Canal provided that the Contractor makes good faith efforts and devotes 

409 adequate resources to obtain the necessary permits and agreements. 

410 Such deliveries shall be made in accordance with the decision of Judge Richard 

411 Hodge, dated January 2, 1990, in Alameda County Superior Court Action No. 425955. Once a 

412 diversion project for delivery of water under this Contract is constructed at Freeport or Site 5 and 

413 is fully operational, diversion of water at Nimbus Dam shall no longer be an alternative source 

414 for delivery of Project or non-Project water to Contractor under this Contract. 

415 (b) Omitted. 

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

417 Service Area unless approved in advance by the Contracting Officer. 

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

419 measured and recorded with equipment furnished, installed, operated, and maintained by the 
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420 Contractor, or any other appropriate entity as designated by the Contracting Officer (hereafter 

421 Aother appropriate entity@) at the point or points of delivery established pursuant to subdivision 

422 (a) of this Article. Upon the request of either party to this Contract, the Contracting Officer shall 

423 investigate the accuracy of such measurements and shall take any necessary steps to adjust any 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

440 (f) The parties agree that for the purposes of taking delivery of water under 
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441 this Contract, at Freeport on the Sacramento River or at Site 5 on the Lower American River, the 

442 Contractor shall have the right to construct a facility which connects to and extends from or near 

443 the existing terminus of the Folsom South Canal or at any other points of delivery set forth in 

444 Article 5(a) to the Mokelumne Aqueducts. The Contractor shall also have the right to use the 

445 Folsom South Canal as a conveyance facility for Project Water that may be delivered to the 

446 Contractor at any location and pumped back to the Folsom South Canal through a pipeline to be 

447 constructed and operated by the Contractor at its expense and which will connect to the Folsom 

448 South Canal at a point located northerly of Grant Line Road at Station 522+81 to accommodate 

449 the Site 5 option, or at a location in the vicinity of Grant Line Road at approximately Station 

450 666+50 to accommodate the Freeport East option or other location as mutually agreed to, in 

451 writing, by the parties. Prior to the construction of connection facilities to the Folsom South 

452 Canal, or from the Folsom South Canal to the Mokelumne Aqueducts for any project different 

453 than the project described in the Record of Decision, the Contractor shall submit any necessary 

454 further plans, specifications and environmental documentation for making such connections to 

455 the Contracting Officer for review and written approval. The Contracting Officer shall cooperate 

456 with the Contractor in the development of such further plans, specifications and environmental 

457 documentation. All such design and construction costs shall be at the Contractor=s expense. The 

458 Contracting Officer=s approval of such further plans, specifications, and environmental 

459 documentation shall not be unreasonably withheld. The Contractor shall pay all reasonable 

460 costs, including overhead, incurred by the Contracting Officer in (1) the development, review 

461 and approval of any further plans, specifications and environmental documentation and (2) 

462 inspection and oversight costs related to any construction. The United States shall hold the 
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463 Contractor harmless from any liability arising from the negligence or willful misconduct of the 

464 United States, or any of its officers, employees, agents, or assigns, in the conveyance of Project 

465 Water through the Folsom South Canal; Provided that, such liability has not arisen from 

466 performance or 

467 lack thereof of the Contractor under terms and conditions of any approvals related to the 

468 Contractor=s connection facilities, this Contract or any subsequent amendment or renewal 

469 thereof. 

470 MEASUREMENT OF WATER WITHIN THE SERVICE AREA

471 6. (a) The parties acknowledge that the Contractor has equipped all surface 

472 water delivery systems within its boundaries with water measuring devices at each M&I water 

473 service connection of a type acceptable to the Contracting Officer. The Contractor shall be 

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

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

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

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

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

479 customer class as defined in the Contractor=s water conservation plan provided for in Article 26 

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

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

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

483 annual report described in subdivision (c) of Article 26 of this Contract. 
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484 (b) To the extent the information has not otherwise been provided, upon 

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

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

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

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

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

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

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

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

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

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

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

496 inadequate, the parties shall within 60 days following the Contracting Officer>s response, 

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

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

499 compliance with subdivision (a) of this Article. 

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

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

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

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

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

505 within the Contractor=s Service Area during the previous Year. 
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506 (e) The Contractor shall inform the Contracting Officer on or before the 20th 

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

508 RATES AND METHOD OF PAYMENT FOR WATER

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

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

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

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

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

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

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

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

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

518 AB,@ as may be revised annually. 

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

520 and Tiered Pricing Component as follows: 

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

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

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

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

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

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

527 during the period October 1 of the current Calendar Year, through September 30, of the 
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528 following Calendar Year, and such notification shall revise Exhibit AB.@

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

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

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

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

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

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

535 Component to be in effect for the upcoming Year, and such notification shall revise Exhibit AB.@

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

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

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

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

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

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

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

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

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

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

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

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

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

549 then in effect, to assure that Project Water is not delivered to the Contractor in advance of such 
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550 payment. In any month in which the quantity of Water Delivered to the Contractor pursuant to 

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

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

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

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

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

556 but no later than April 30th of the following Year, or 60 days after the delivery of Project Water 

557 carried over under subdivision (g) of Article 3 of this Contract if such water is not delivered by 

558 the last day of February. 

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

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

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

562 month of delivery. The payments shall be consistent with the quantities of M&I Water 

563 Delivered as shown in the water delivery report for the subject month prepared by the by the 

564 Contracting Officer. The water delivery report shall be deemed a bill for the payment of Charges 

565 and the applicable Tiered Pricing Component for Water Delivered. Adjustment for overpayment 

566 or underpayment of Charges shall be made through the adjustment of payments due to the 

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

568 Charges and the Tiered Pricing Component shall be computed pursuant to Article 20 of this 

569 Contract. 

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

571 (f), or (g) of Article 3 of this Contract as determined by the Contracting Officer pursuant to 
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572 applicable statutes, associated regulations, any applicable provisions of guidelines or ratesetting 

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

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

575 (a) of this Article. 

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

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

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

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

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

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

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

583 administration of the financial terms and conditions of its long-term Contracts, in accordance 

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

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

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

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

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

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

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

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

592 policies, and procedures used for establishing Rates, Charges, and Tiered Pricing Components, 
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593 and/or for making and allocating payments, other than those set forth in this Article may be in 

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

595 agreements to modify the mechanisms, policies, and procedures for any of those purposes while 

596 this Contract is in effect without amending this Contract; Provided, that such modification does 

597 not unreasonably shift costs to other Project Contractors. 

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

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

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

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

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

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

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

605 Component for the amount of Water Delivered which exceeds 90 percent of the Contract Total 

606 shall equal the difference between (i) the Rate established under subdivision (a) of this Article 

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

608 (2) Omitted. 

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

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

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

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

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

614 (k) For the term of this Contract, Rates under the M&I ratesetting policy will 
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615 be established to recover only reimbursable O&M (including any deficits) and capital costs of 

616 the Project, as those terms are used in the then-current Project M&I ratesetting policy, and 

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

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

619 which implement the Contracting Officer=s ratesetting policies will not be implemented until the 

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

621 impact of the proposed change. 

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

623 CVPIA, the Rates for Project Water transferred by the Contractor shall be the Contractor=s Rates 

624 adjusted upward or downward to reflect the changed costs (if any) incurred by the Contracting 

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

626 accordance with the then applicable Project ratesetting policy. 

627 (m) Omitted. 

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

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

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

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

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

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

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

635 term of the Original and the Existing Contracts; (2) interest accruing on any such deficits; (3) the 

636 inclusion of any such deficit charges or interest in the Rates; (4) the application by the United 
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637 States of payments made by the Contractor under its Original and the Existing Contracts; and (5) 

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

639 Contractor shall be entitled to the benefit of any administrative or judicial ruling in favor of any 

640 Project M&I Contractor on any of these issues, and credits for payments heretofore made; 

641 Provided that the basis for such ruling is applicable to the Contractor. 

642 8. Omitted. 

643 SALES, TRANSFERS, OR EXCHANGES OF WATER

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

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

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

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

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

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

650 exchanges shall be approved absent completion of all appropriate environmental documentation, 

651 including but not limited to documents prepared pursuant to the NEPA and the ESA. Such 

652 environmental documentation should include, as appropriate, an analysis of groundwater impacts 

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

654 on both the transferor and transferee. 

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

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

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

658 program during the term of this Contract, the Contracting Officer shall prepare, as appropriate, 
Contract No. 14-06-200-5183A-LTR1 

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

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

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

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

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

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

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

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

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

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

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

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

671 years, for M&I use, groundwater recharge, water banking, or fish and wildlife resources; not lead 

672 to land conversion; and be delivered to established cropland, wildlife refuges, groundwater 

673 basins or M&I use; (ii) occur within a single Year; (iii) occur between a willing seller and a 

674 willing buyer; (iv) convey water through existing facilities with no new construction or 

675 modifications to facilities and be between existing Project Contractors and/or the Contractor and 

676 the United States, Department of the Interior; and (v) comply with all applicable Federal, State, 

677 and local or tribal laws and requirements imposed for protection of the environment and Indian 

678 Trust Assets, as defined under Federal law. 

679 APPLICATION OF PAYMENTS AND ADJUSTMENTS 

680 10. (a) The amount of any overpayment by the Contractor of the Contractor=s 
Contract No. 14-06-200-5183A-LTR1 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 (c) Nothing in this Contract shall be construed to require or prohibit the 696 

697 Contractor from making voluntary payments for retiring or avoiding any O&M deficit. Such 

698 voluntary payments would be the same as, or similar to, participation in the existing Contracting 

699 Officer's Voluntary Payment Program. 

700 TEMPORARY REDUCTIONS--RETURN FLOWS

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

702 requirements of Federal law; and (ii) the obligations of the United States under existing 
Contract No. 14-06-200-5183A-LTR1 

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

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

705 provided in this Contract. 

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

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

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

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

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

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

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

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

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

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

716 or reduction. 

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

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

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

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

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

722 claiming by, through, or under the Contractor. 

723 CONSTRAINTS ON THE AVAILABILITY OF WATER

724 12. (a) In its operation of the Project, the Contracting Officer will use all 
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725 reasonable means to guard against a Condition of Shortage in the quantity of water to be made 

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

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

728 Contractor of said determination as soon as practicable. 

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

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

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

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

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

734 (c) Omitted. 

735 (d) In any Year in which there may occur a shortage for any of the reasons 

736 specified in subdivision (b) above, the Contracting Officer shall apportion the available Project 

737 Water supply among the Contractor and others entitled, under existing contracts and future 

738 contracts (to the extent such future contracts are permitted under subsections (a) and (b) of 

739 Section 3404 of the CVPIA) and renewals thereof, to receive Project Water consistent with the 

740 contractual obligations of the United States and consistent with the then-current M&I Water 

741 Shortage Policy for the Central Valley Project or any modifications or replacement thereof; 

742 Provided, that the 133,000 acre-feet of Project Water referenced in Article 3(a) shall be used as 

743 the base amount (equivalent to the term Ahistoric use@ applied in the M&I Water Shortage Policy 

744 for the Central Valley Project, dated February 17, 1994) for the purpose of calculating Project 

745 Water shortages applicable to the Contractor. Such Policy shall be amended, modified, or 

746 superseded only through a public notice and comment procedure. 
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747 (e) By entering into this Contract, the Contractor does not waive any legal 

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

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

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

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

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

753 proceeding. 

754 13. Omitted. 

755 RULES AND REGULATIONS

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

757 to this Contract is subject to the applicable provisions of Federal Reclamation law and any 

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

759 WATER AND AIR POLLUTION CONTROL

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

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

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

763 authorities. 

764 QUALITY OF WATER

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

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

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

768 2(b) of the Act of August 26, 1937 (50 Stat. 865), as added by Section 101 of the Act of 

769 October 27, 1986 (100 Stat. 3050) or other existing Federal laws. The United States is under no 
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770 obligation to construct or furnish water treatment facilities to maintain or to improve the quality 

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

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

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

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

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

776 WATER ACQUIRED BY THE CONTRACTOR

777 OTHER THAN FROM THE UNITED STATES

778 17. (a) Omitted. 

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

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

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

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

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

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

785 facilities and deliver said water within the Contractor=s Service Area, subject to payment to the 

786 United States of an appropriate rate as determined by the applicable Project ratesetting policy 

787 and the Project use power policy, if such Project use power policy is applicable, each as 

788 amended, modified or superceded from time to time. 

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

790 shall only be allowed to the extent such deliveries do not: (i) interfere with other Project 
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791 purposes as determined by the Contracting Officer; (ii) reduce the quantity or quality of water 

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

793 water entitlements to any other Project Contractors; or (iv) interfere with the physical 

794 maintenance of the Project facilities. 

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

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

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

798 States, and its officers, agents, and employees, from any claim for damage to persons or 

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

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

801 diverting such non-Project water into Project facilities. 

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

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

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

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

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

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

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

809 non-Project Contractors. 

810 (6) The provisions of this Article 17 shall not apply to water conveyed 

811 through the Folsom South Canal consistent with Article 5. 

812 OPINIONS AND DETERMINATIONS
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813 18. (a) Where the terms of this Contract provide for actions to be based upon the 

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

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

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

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

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

819 party shall be provided in a timely manner. Nothing in subdivision (a) of Article 18 of this 

820 Contract is intended to or shall affect or alter the standard of judicial review applicable under 

821 Federal law to any opinion or determination implementing a specific provision of federal law 

822 embodied in statute or regulation. 

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

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

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

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

827 with the Contractor to the extent reasonably practicable. 

828 COORDINATION AND COOPERATION

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

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

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

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

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

834 the quantity or quality of Project Water supply, the allocation of Project Water supply, and 
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835 Project financial matters including, but not limited to, budget issues. The communication, 

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

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

838 and determinations to be made by the respective party. 

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

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

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

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

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

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

845 a real-time basis. 

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

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

848 intent: 

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

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

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

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

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

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

855 supply, water quality, and reliability of the Project for all Project purposes. 
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856 (3) The Secretary will coordinate with Project Contractors and the 

857 State of California to seek improved water resource management. 

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

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

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

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

862 management activities, and other issues as appropriate. 

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

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

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

866 

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

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

869 CHARGES FOR DELINQUENT PAYMENTS

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

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

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

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

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

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

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

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

878 associated with a delinquent payment. 

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

880 the Federal Register by the Department of the Treasury for application to overdue payments, or the 

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

882 Project Act of 1939 (Public Law 76-260). The interest charge rate shall be determined as of the due 

883 date and remain fixed for the duration of the delinquent period. 
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884 (c) When a partial payment on a delinquent account is received, the amount 

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

886 accrued interest, and finally to the overdue payment. 

887 EQUAL OPPORTUNITY

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

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

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

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

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

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

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

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

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

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

898 nondiscrimination clause. 

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

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

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

902 national origin. 

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

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

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

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

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

908 employees and applicants for employment. 

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

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

911 of the Secretary of Labor. 

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

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

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

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

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

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

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

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

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

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

923 otherwise provided by law. 

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

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

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

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

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

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

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

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

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

933 GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT

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

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

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

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

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

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

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

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

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

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

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

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

946 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

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

948 (42 U.S.C. 2000d), Section 504 of the Rehabilitation Act of 1975 (P.L. 93-112, as amended), the 

949 Age Discrimination Act of 1975 (42 U.S.C. 6101, et seq.) and any other applicable civil rights 
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950 laws, as well as with their respective implementing regulations and guidelines imposed by the 

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

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

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

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

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

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

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

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

959 of obtaining any and all Federal grants, loans, Contracts, property discounts, or other Federal 

960 financial assistance extended after the date hereof to the Contractor by the Bureau of Reclamation, 

961 including installment payments after such date on account of arrangements for Federal financial 

962 assistance which were approved before such date. The Contractor recognizes and agrees that such 

963 Federal assistance will be extended in reliance on the representations and agreements made in this 

964 Article, and that the United States reserves the right to seek judicial enforcement thereof. 

965 24. Omitted. 

966 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

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

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

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

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

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

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

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

974 Contract administration. 

975 WATER CONSERVATION

976 26. (a) The Contractor has developed and is implementing an effective water 

977 conservation program based on the Contractor=s water conservation plan that has been reviewed 
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978 by the Contracting Officer and determined to meet the conservation and efficiency criteria 

979 established under Federal law. The water conservation and efficiency program contains certain 

980 definite water conservation objectives, appropriate economically feasible water conservation 

981 measures, and time schedules for meeting those objectives. Continued Project Water delivery 

982 pursuant to this Contract shall be contingent upon the Contractor=s continued implementation of 

983 such water conservation program. In the event the Contractor's water conservation plan or any 

984 revised water conservation plan completed pursuant to subdivision (d) of Article 26 of this 

985 Contract have not yet been determined by the Contracting Officer to meet such criteria, due to 

986 circumstances which the Contracting Officer determines are beyond the control of the 

987 Contractor, water deliveries shall be made under this Contract so long as the Contractor 

988 diligently works with the Contracting Officer to obtain such determination at the earliest 

989 practicable date, and thereafter the Contractor immediately begins implementing its water 

990 conservation and efficiency program in accordance with the time schedules therein. 

991 (b) The Contractor shall implement the Best Management Practices identified by 

992 the time frames issued by the California Urban Water Conservation Council for such M&I Water 

993 unless any such practice is determined by the Contracting Officer to be inappropriate for the 

994 Contractor. 

995 (c) The Contractor shall submit to the Contracting Officer a report on the status of 

996 its implementation of the water conservation plan on the reporting dates specified in the then 

997 existing conservation and efficiency criteria established under Federal law. 

998 (d) At five-year intervals, the Contractor shall revise its water conservation 

999 plan to reflect the then-current conservation and efficiency criteria for evaluating water 
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1000 conservation plans established under Federal law and submit such revised water management 

1001 plan to the Contracting Officer for review and evaluation. The Contracting Officer will then 

1002 determine if the water conservation plan meets Reclamation=s then-current conservation and 

1003 efficiency criteria for evaluating water conservation plans established under Federal law. 

1004 (e) If the Contractor is engaged in direct groundwater recharge, such activity 

1005 shall be described in the Contractor=s water conservation plan. 

1006 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

1007 27. Except as specifically provided in Article 17 of this Contract, the provisions of 

1008 this Contract shall not be applicable to or affect non-Project water or water rights now owned or 

1009 hereafter acquired by the Contractor or any user of such water within the Contractor's Service 

1010 Area. Any such water shall not be considered Project Water under this Contract. In addition, 

1011 this Contract shall not be construed as limiting or curtailing any rights which the Contractor or 

1012 any water user within the Contractor's Service Area acquires or has available under any other 

1013 Contract pursuant to Federal Reclamation law. 

1014 28. Omitted. 

1015 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

1016 29. The expenditure or advance of any money or the performance of any obligation of 

1017 the United States under this Contract shall be contingent upon appropriation or allotment of 

1018 funds. Absence of appropriation or allotment of funds shall not relieve the Contractor from any 

1019 obligations under this Contract. No liability shall accrue to the United States in case funds are 

1020 not appropriated or allotted. 

1021 BOOKS, RECORDS, AND REPORTS

1022 30. (a) The Contractor shall establish and maintain accounts and other books and 
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1023 records pertaining to administration of the terms and conditions of this Contract, including: the 

1024 Contractor's financial transactions, water supply data, and Project land and right-of-way 

1025 agreements; water use data; and other matters that the Contracting Officer may require. Reports 

1026 thereon shall be furnished to the Contracting Officer in such form and on such date or dates as 

1027 the Contracting Officer may require. Subject to applicable Federal laws and regulations, each 

1028 party to this Contract shall have the right during office hours to examine and make copies of the 

1029 other party's books and records relating to matters covered by this Contract. 

1030 (b) Notwithstanding the provisions of subdivision (a) of this Article, no 

1031 books, records, or other information shall be requested from the Contractor by the Contracting 

1032 Officer unless such books, records, or information are reasonably related to the administration or 

1033 performance of this Contract. Any such request shall allow the Contractor a reasonable period of 

1034 time within which to provide the requested books, records, or information. 

1035 ASSIGNMENT LIMITED--SUCCESSORS AND ASSIGNS OBLIGATED

1036 31. (a) The provisions of this Contract shall apply to and bind the successors and 

1037 assigns of the parties hereto, but no assignment or transfer of this Contract or any right or interest 

1038 therein shall be valid until approved in writing by the Contracting Officer. 

1039 (b) The assignment of any right or interest in this Contract by either party 

1040 shall not interfere with the rights or obligations of the other party to this Contract absent the 

1041 written concurrence of said other party. 

1042 (c) The Contracting Officer shall not unreasonably condition or withhold 

1043 approval of any proposed assignment. 

1044 SEVERABILITY

1045 32. In the event that a person or entity who is neither (i) a party to a Project contract, 

1046 nor (ii) a person or entity that receives Project Water from a party to a Project contract, nor (iii) 

1047 an association or other form of organization whose primary function is to represent parties to 

1048 Project contracts, brings an action in a court of competent jurisdiction challenging the legality or 
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1049 enforceability of a provision included in this Contract and said person, entity, association, or 

1050 organization obtains a final court decision holding that such provision is legally invalid or 

1051 unenforceable and the Contractor has not intervened in that lawsuit in support of the plaintiff(s), 

1052 the parties to this Contract shall use their best efforts to (i) within 30 days of the date of such 

1053 final court decision identify by mutual agreement the provisions in this Contract which must be 

1054 revised and (ii) within three months thereafter promptly agree on the appropriate revision(s). 

1055 The time periods specified above may be extended by mutual agreement of the parties. Pending 

1056 the completion of the actions designated above, to the extent it can do so without violating any 

1057 applicable provisions of law, the United States shall continue to make the quantities of Project 

1058 Water specified in this Contract available to the Contractor pursuant to the provisions of this 

1059 Contract which were not found to be legally invalid or unenforceable in the final court decision. 

1060 RESOLUTION OF DISPUTES

1061 33. Should any dispute arise concerning any provisions of this Contract, or the 

1062 parties= rights and obligations thereunder, the parties shall meet and confer in an attempt to 

1063 resolve the dispute. Prior to the Contractor commencing any legal action, or the Contracting 

1064 Officer referring any matter to Department of Justice, the party shall provide to the other party 

1065 30 days= written notice of the intent to take such action; Provided, That such notice shall not be 

1066 required where a delay in commencing an action would prejudice the interests of the party that 

1067 intends to file suit. During the 30-day notice period, the Contractor and the Contracting Officer 

1068 shall meet and confer in an attempt to resolve the dispute. Except as specifically provided, 

1069 nothing herein is intended to waive or abridge any right or remedy that the Contractor or the 

1070 United States may have. 
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1071 OFFICIALS NOT TO BENEFIT

1072 34. No Member of or Delegate to Congress, Resident Commissioner, or official of the 

1073 Contractor shall benefit from this Contract other than as a water user or landowner in the same 

1074 manner as other water users or landowners. 

1075 CHANGES IN CONTRACTOR=S SERVICE AREA

1076 35. (a) While this Contract is in effect, no change may be made in the 

1077 Contractor's Service Area by inclusion or exclusion of lands, dissolution, consolidation, merger, 

1078 or otherwise, except upon the Contracting Officer's written consent. 

1079 (b) Within 30 days of receipt of a request for such a change, the Contracting 

1080 Officer will notify the Contractor of any additional information required by the Contracting 

1081 Officer for processing said request, and both parties will meet to establish a mutually agreeable 

1082 schedule for timely completion of the process. Such process will analyze whether the proposed 

1083 change is likely to: (i) result in the use of Project Water contrary to the terms of this Contract; 

1084 (ii) impair the ability of the Contractor to pay for Project Water furnished under this Contract or 

1085 to pay for any Federally-constructed facilities for which the Contractor is responsible; and (iii) 

1086 have an impact on any Project Water rights applications, permits, or licenses. In addition, the 

1087 Contracting Officer shall comply with NEPA and ESA. The Contractor will be responsible for 

1088 all costs incurred by the Contracting Officer in this process, and such costs will be paid in 

1089 accordance with Article 25 of this Contract. 

1090 FEDERAL LAWS

1091 36. By entering into this Contract, the Contractor does not waive its rights to contest 

1092 the validity or application in connection with the performance of the terms and conditions of this 

1093 Contract of any Federal law or regulation; Provided, That the Contractor agrees to comply with 
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1094 the terms and conditions of this Contract unless and until relief from application of such Federal 

1095 law or regulation to the implementing provision of the Contract is granted by a court of 

1096 competent jurisdiction. 

1097 NOTICES

1098 37. Any notice, demand, or request authorized or required by this Contract shall be 

1099 deemed to have been given, on behalf of the Contractor, when mailed, postage prepaid, or 

1100 delivered to Area Manager, Bureau of Reclamation, 7794 Folsom Dam Road, Folsom, California 

1101 95630-1799, and on behalf of the United States, when mailed, postage prepaid, to Board of 

1102 Directors, East Bay Municipal Utility District, P. O. Box 24055, Oakland, California 94623-

1103 1055, or delivered to Board of Directors, East Bay Municipal Utility District, 375 Eleventh 

1104 Street, Oakland, California 94607. The designation of the addressee or the address may be 

1105 changed by notice given in the same manner as provided in this Article for other notices. 

1106 CONFIRMATION OF CONTRACT

1107 38. The Contractor, after the execution of this Contract, shall furnish to the 

1108 Contracting Officer evidence that pursuant to the laws of the State of California, the Contractor 

1109 is a legally constituted entity and the Contract is lawful, valid, and binding on the Contractor. 

1110 This Contract shall not be binding on the United States until such evidence has been provided to 

1111 the Contracting Officer’s satisfaction. 
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1112 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of 

1113 the day and year first above written. 

1114 THE UNITED STATES OF AMERICA 

1115 By: ______________________________________ 

1116 Regional Director, Mid-Pacific Region 

1117 Bureau of Reclamation 

1118 (SEAL) 

1119 EAST BAY MUNICIPAL UTILITY DISTRICT 

1120 By: ______________________________________ 

1121 President of the Board of Directors 

1122 Attest: 

1123 By: ________________________________ 

1124 Secretary of the Board of Directors 

1125 (H:\pub 440\LTRC\Folosm Final Draft LTRC’s\10-25-04 EBMUD Final Draft Contract with 

1126 exhibits.doc)
Contract No. 14-06-200-5183A-LTR1 

EXHIBIT A

[Map or Description of Service Area] 
Contract No. 14-06-200-5183A-LTR1 

EXHIBIT B 

 [Initial Rates and Charges] 

EAST BAY MUNICIPAL UTILITY DISTRICT 

2004 Rates Per Acre-Foot

M&I

O&M AND COST-OF-SERVICE RATES: 

Capital Rate: $21.99 

O&M Rate: $16.71 

Water Marketing $5.01 

Storage 6.38 

Conveyance 5.32 

CFO/PFR Adjustment Rate $ 1.18 

Deficit Rate: * $70.68 

TOTAL COST-OF-SERVICE (COS) RATE: $110.55 

TIERED PRICING COMPONENT >80% <90% OF 

CONTRACT TOTAL (M&I Full Cost Rate - COS rate / 2): $6.57 

TIERED PRICING COMPONENT > 90% OF 

CONTRACT TOTAL (M&I Full Cost Rate - COS rate): $13.13 

M&I FULL COST RATE: 

Interest rates used in the calculation of the M&I Full Cost 

Rate shall comply with the Interest Rate methodology contained in 

Section 202 (3) (B) and (C) of the Reclamation Reform Act 

of October 12, 1982 (96 Stat. 1263), as amended; $123.68 

SURCHARGES UNDER P.L. 102-575 TO 

RESTORATION FUND** 

Restoration Payments [3407(d)(2)(A)] $15.64 

* See subdivision (n) of Article 7. 

** The surcharges are payments in addition to the water rates and are determined pursuant to 

Title XXXIV of P.L. 102-575. Restoration Fund surcharges under P.L. 102-575 are on a fiscal 

year basis (10/1 -9/30).