M&I Only 

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

Whitney Construction 3/01-2004 

Whitney Construction 7/22-2003 

Whitney Construction 7/1-2003 

Sac.Valley Division Draft 5/28-2003 

CVP-Wide Draft 5/23-2003 

Contract No. 

 14-06-200-5749A-LTR1 

UNITED STATES 

DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

Central Valley Project, California 

LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES 

AND

WHITNEY CONSTRUCTION, INC.,

PROVIDING FOR PROJECT WATER SERVICE

FROM THE BLACK BUTTE PROJECT

Table of Contents

Article No. Title Page No.

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

 Explanatory Recitals ............................................................................................ 1-5 

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

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

 3 Water to be Made Available and Delivered to the Contractor......................... 10-13 

 4 Time for Delivery of Water ............................................................................. 13-14 

 5 Point of Diversion and Responsibility for Distribution of Water.................... 14-16 

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

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

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

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

 10 Application of Payments and Adjustments............................................................23 

 11 Temporary Reductions--Return Flows ..................................................................24 

 12 Constraints on the Availability of Water ......................................................... 24-25 

 13 Unavoidable Groundwater Percolation..................................................................25 

 14 Rules and Regulations............................................................................................25 

 15 Water and Air Pollution Control............................................................................26 

 16 Quality of Water ....................................................................................................26 

 17 Water Acquired by the Contractor Other Than From the United States.......... 26-28 

 18 Opinions and Determinations ................................................................................28 
Contract No. 14-06-200-5749A-LTR1 

Table of Contents - continued

Article No. Title Page No.

 19 Coordination and Cooperation......................................................................... 28-30 

 20 Changes for Delinquent Payments.........................................................................30 

 21 Equal Opportunity............................................................................................ 30-32 

 22 General Obligation--Benefits Conditioned Upon Payment ...................................32 

 23 Compliance With Civil Rights Laws and Regulations ..........................................32 

 24 Privacy Act Compliance ........................................................................................33 

 25 Contractor to Pay Certain Miscellaneous Costs.....................................................33 

 26 Water Conservation ......................................................................................... 33-34 

 27 Existing or Acquired Water or Water Rights.........................................................34 

 28 Operation and Maintenance by Operating Non-Federal Entity .............................35 

 29 Contingent on Appropriation or Allotment of Funds ............................................35 

 30 Books, Records, and Reports.................................................................................35 

 31 Assignment Limited--Successors and Assigns Obligated ............................... 35-36 

 32 Severability ............................................................................................................36 

 33 Resolution of Disputes..................................................................................... 36-37 

 34 Officials Not to Benefit..........................................................................................37 

 35 Changes in Contractor’s Service Area...................................................................37 

 36 Federal Laws.................................................................................................... 37-38 

 37 Notices ...................................................................................................................38 

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

 39 Agreement on Water Quantities....................................................................... 38-39 

 Signature Page .......................................................................................................40 

 

 Exhibit A – Map of Contractor’s Service Area 

 

 Exhibit B – Rates and Charges 
M&I Only 

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

Whitney Construction 3/01-2004 

Whitney Construction 7/22-2003 

Whitney Construction 7/1-2003 

Sac.Valley Division Draft 5/28-2003 

CVP-Wide Draft 5/23-2003 

Contract No. 

 14-06-200-5749A-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 WHITNEY CONSTRUCTION, INC.,

8 PROVIDING FOR PROJECT WATER SERVICE

9 FROM THE BLACK BUTTE PROJECT

10 

11 THIS CONTRACT, made this _____ day of ____________________, 20___, in 

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

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

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

15 1956 (70 Stat. 483), June 21, 1963 (77 Stat. 68), October 12, 1982 (96 Stat. 1263), October 27, 1986 

16 (100 Stat. 3050), as amended, and Title XXXIV of the Act of October 30, 1992 (106 Stat. 4706), all 

17 collectively hereinafter referred to as Federal Reclamation law, between THE UNITED STATES 

18 OF AMERICA, hereinafter referred to as the United States, and WHITNEY CONSTRUCTION, 

19 INC., hereinafter referred to as the Contractor, a corporation acting pursuant to Sections 12003 and 

20 12004 of the California Water Code; 

21 WITNESSETH, That:

22 EXPLANATORY RECITALS

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

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

25 flood control, irrigation, municipal, domestic, industrial, fish and wildlife mitigation, protection 
Contract No. 14-06-200-5749A-LTR1 

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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 

29 [1.1] WHEREAS, the United States has constructed the Orland Project which is being 

30 operated by the Orland Water Users’ Association pursuant to Contract No. 14-06-200-3502 

31 dated August 26, 1954, as amended by the contract dated August 24, 1960; and 

 [2nd 32 ] WHEREAS, the United States constructed the Black Butte Dam and Reservoir 

33 which were integrated into the Project and which will be used in part for the furnishing of water 

34 to the Contractor pursuant to the terms of this Contract; and 

35 [2.1] WHEREAS, the water rights of all lands and the use thereof within the watershed 

36 of Stony Creek and its tributaries were adjudicated by the U.S. District Court for the Northern 

37 District of California, Second Division, in United States of America, Plaintiff, v. H. C. Angle, et 

38 al., Defendants, Equity No. 30, hereinafter referred to as the Angle Decree; and 

39 [2.2] WHEREAS, the United States is willing to make water stored in the Black Butte 

40 Reservoir available to the Contractor from the Stony Gorge Reservoir of the Orland Project 

41 pursuant to the exchange Contract No. 14-06-200-1020A, dated June 26, 1964, between the 

42 United States and the Orland Water Users’ Association; and 

 [3rd 43 ] WHEREAS, the rights to Project Water were acquired by the United States 

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

 [4th 45 ] WHEREAS, Commander Industries, Inc., and the United States entered into 

46 Contract No. 14-06-200-5749A, which provided for a supplemental water supply and established 

47 terms for the delivery to the Contractor of Project Water, for industrial use in its lumber 

48 production, from the Black Butte Project from February 1, 1972, through December 31, 2010, 

49 hereinafter referred to as the “Existing Contract”; and 
Contract No. 14-06-200-5749A-LTR1 

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50 [4.1] WHEREAS, Commander Industries, Inc., assigned the Existing Contract to 

51 Louisiana Pacific Corporation which contract Louisiana Pacific Corporation accepted on 

52 June 20, 1983; and 

53 [4.2] WHEREAS, Louisiana Pacific Corporation assigned the Existing Contract to 

54 Whitney Construction, Inc., which contract Whitney Construction, Inc., accepted on 

55 September 22, 1999; and 

 [5th 56 ] WHEREAS, the United States and Louisiana Pacific Corporation , pursuant to 

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

58 binding agreement identified as Binding Agreement No. 14-06-200-5749A-BA, hereinafter 

59 referred to as the Binding Agreement, which sets out the terms pursuant to which Louisiana 

60 Pacific Corporation agreed to renew the Existing Contract before its expiration date after 

61 completion of a programmatic environmental impact statement and other appropriate 

62 environmental documentation and negotiation of a renewal contract, and which also sets out the 

63 consequences of a subsequent decision not to renew; and 

64 [5.1] WHEREAS, Louisiana Pacific Corporation assigned the Binding Agreement to 

65 Whitney Construction, Inc., which agreement Whitney Construction, Inc., accepted on 

66 September 22, 1999; and 

 [6th 67 ] WHEREAS, Section 3404(c) of the CVPIA provides for long-term renewal of the 

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

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

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

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

 [7th 72 ] WHEREAS, the United States has completed the PEIS and all other appropriate 

73 environmental review necessary to provide for long-term renewal of the Existing Contract; and 
Contract No. 14-06-200-5749A-LTR1 

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 [8th 74 ] WHEREAS, the Contractor has requested the long-term renewal of the Existing 

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

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

 [9th 77 ] WHEREAS, the United States has determined that the Contractor has fulfilled all 

78 of its obligations under the Existing Contract; and 

 [10th 79 ] WHEREAS, the Contractor has demonstrated to the satisfaction of the 

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

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

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

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

84 and 

 [11th 85 ] WHEREAS, water obtained from the Project has been relied upon by urban and 

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

87 as an essential portion of its water supply; and 

 [12th 88 ] WHEREAS, the economies of regions within the Project, including the 

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

90 Project; and 

 [13th 91 ] WHEREAS, the Secretary intends through coordination, cooperation, and 

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

93 Project for all Project purposes; and 

 [14th 94 ] WHEREAS, the mutual goals of the United States and the Contractor include: to 

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

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

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

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

99 of the United States relative to the Project; and 
Contract No. 14-06-200-5749A-LTR1 

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 [15th 100 ] WHEREAS, the parties intend by this Contract to develop a more cooperative 

101 relationship in order to achieve their mutual goals; and 

 [16th 102 ] WHEREAS, the United States and the Contractor are willing to enter into this 

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

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

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

106 DEFINITIONS

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

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

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

110 both dates inclusive; 

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

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

113 annually by the Contracting Officer pursuant to this Contract; 

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

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

116 Contract Total; 

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

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

119 or regulation; 

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

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

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

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

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

125 without amendment of this Contract; 
Contract No. 14-06-200-5749A-LTR1 

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

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

128 (h) Omitted; 

129 (i) Omitted; 

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

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

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

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

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

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

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

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

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

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

140 of the Rules and Regulations for the RRA; 

141 (k) Omitted; 

142 (l) Omitted; 

143 (m) Omitted; 

144 (n) Omitted; 

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

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

147 crops or livestock; 

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

149 the delivery of M&I Water; 
Contract No. 14-06-200-5749A-LTR1 

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

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

152 maintenance of Project facilities; 

153 (r) Omitted; 

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

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

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

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

158 Reclamation law; 

159 (u) “Project Water” shall mean all water diverted in excess of the Base Supply 

160 or scheduled to be diverted each Year by the Contract, that is developed, diverted, stored, or 

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

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

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

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

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

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

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

168 preceding contract(s); 

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

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

171 through any agency of the Department of the Interior; 

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

173 for each acre-foot of Water Delivered as described in subdivision (j) of Article 7 of this Contract; 
Contract No. 14-06-200-5749A-LTR1 

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

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

176 Officer; 

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

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

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

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

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

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

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

184 Calendar Year through the last day of February of the following Calendar Year; and 

185 (dd) “Base Supply” shall mean the first 164 acre-feet of water diverted which 

186 the United States agrees may be diverted by the Contractor each Year without payment to the 

187 United States. 

188 TERM OF CONTRACT 

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

190 20___, and supercedes the Existing Contract. In the event the Contractor wishes to renew this 

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

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

193 (b) Omitted. 

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

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

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

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

198 proposed adoption and application of any revised policy applicable to the delivery of M&I Water 
Contract No. 14-06-200-5749A-LTR1 

9

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

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

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

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

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

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

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

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

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

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

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

210 9(c)(1), of the Reclamation Project Act of 1939, subject to applicable Federal law and under 

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

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

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

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

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

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

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

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

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

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

221 above, conversion to a contract under said subsection 9(c)(1). In the event such determination of 
Contract No. 14-06-200-5749A-LTR1 

10

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

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

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

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

226 subdivision. 

227 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE CONTRACTOR

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

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

230 this Contract, the Contracting Officer shall make available for delivery to the Contractor 25 acre231 feet of Project Water for M&I purposes. Provided, That the United States shall not be 

232 responsible for the maintenance of water levels in Stony Gorge Reservoir required to permit the 

233 Contractor to withdraw water from said Reservoir. Water Delivered to the Contractor in 

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

235 Articles 4 and 7 of this Contract. 

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

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

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

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

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

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

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

243 water made available to the Contractor was 23 acre-feet. Nothing in subdivision (b) of this 

244 Article shall affect the rights and obligations of the parties under any provision of this Contract. 

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

246 applicable legal requirements. 
Contract No. 14-06-200-5749A-LTR1 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

263 guidelines. 

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

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

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

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

268 Contract, which evidences in excess of 31 years of diversions for M&I purposes of the quantities 

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

270 developing an appropriate baseline for biological assessment(s) prepared pursuant to the ESA, 

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

272 Contractor from challenging or seeking judicial relief in a court of competent jurisdiction with 
Contract No. 14-06-200-5749A-LTR1 

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

274 Article. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

294 guidelines, and policies. 

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

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

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

298 Contract, during the terms thereof shall not be disturbed so long as the Contractor shall fulfill all 
Contract No. 14-06-200-5749A-LTR1 

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

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

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

302 contracts. 

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

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

305 accordance with the terms and conditions of such approval. 

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

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

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

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

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

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

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

313 Contract to use Project Water. 

314 TIME FOR DELIVERY OF WATER

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

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

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

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

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

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

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

323 Contracting Officer shall provide the Contractor with the updated Recent Historic Average. 
Contract No. 14-06-200-5749A-LTR1 

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

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

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

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

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

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

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

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

332 Contractor's Service Area. 

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

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

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

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

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

338 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

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

340 Contract shall be delivered to the Contractor at an existing points of diversion on Stony Gorge 

341 Reservoir and any additional point or points of delivery either on Project facilities or another 

342 location or locations mutually agreed to in writing by the Contracting Officer and the Contractor. 

343 (b) Omitted. 

344 (c) Omitted. 

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

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

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

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

349 investigate the accuracy of such measurements and shall take any necessary steps to adjust any 
Contract No. 14-06-200-5749A-LTR1 

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

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

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

353 (e) (1) All works, including a regulatory reservoir, pipelines and pumps 

354 necessary to enable the Contractor to take and distribute water from Stony Gorge Reservoir 

355 pursuant to this Contract, shall be constructed, operated, and maintained, or caused to be 

356 constructed, operated, and maintained by the Contractor without cost or expense to the United 

357 States. Such works may be installed, operated, and maintained on and across property of the 

358 United States or in the vicinity of the Stony Gorge Reservoir subject to such restrictions and 

359 regulations as to location, method of installation, operation, and maintenance as may be 

360 prescribed by the Contracting Officer and subject further to the provisions of a license with the 

361 Federal Government identified as Contract No. 14-06-200-5500A and dated February 1, 1972. 

362 The Contractor agrees to provide access across the area described in Exhibit “A” to the United 

363 States and representatives of the Orland Unit Water Users’ Association as necessary to inspect, 

364 operate, and maintain the Stony Gorge Reservoir. It is specifically recognized and agreed that 

365 this Contract does not grant to the Contractor any right of access to the waters of Stony Gorge 

366 Reservoir or to the adjacent lands of the United States for any purpose except as provided herein 

367 for installation, operation, and maintenance of facilities. 

368 (e) (2) Works installed pursuant to the license referred to in subdivision 

369 (e)(1) of this Article shall be installed in accordance with plans and specifications approved by 

370 the Contracting Officer. The Contracting Officer or his representative shall have the right of 

371 ingress and egress at all reasonable times over and across the land of the Contractor for the 

372 purpose of maintaining, inspecting, operating, and reading the water meter or meters which may 

373 be installed and the Contractor hereby grants a right-of-way to the United States during the term 

374 of this Contract for such purpose. 
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375 (e) (3) The Contracting Officer shall not be responsible for the control, 

376 carriage, handling, use, disposal, or distribution of Water Delivered to the Contractor pursuant to 

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

378 Contractor shall indemnify the United States, its officers, employees, agents, and assigns on 

379 account of damage or claim of damage of any nature whatsoever for which there is legal 

380 responsibility, including property damage, personal injury, or death arising out of or connected 

381 with the control, carriage, handling, use, disposal, or distribution of such Water Delivered 

382 beyond such delivery points, except for any damage or claim arising out of (i) acts or omissions 

383 of the Contracting Officer or any of its officers, employees, agents, or assigns with the intent of 

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

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

386 Officer or any of its officers, employees, agents, or assigns, or (iv) damage or claims resulting 

387 from a malfunction of facilities owned and/or operated by the United States. 

388 MEASUREMENT OF WATER WITHIN THE CONTRACTOR’S SERVICE AREA

389 6. The Contractor has established a measuring program satisfactory to the 

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

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

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

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

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

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

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

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

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

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

400 from establishing and collecting any charges, assessments, or other revenues authorized by 
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401 California law. The Contractor shall include a summary of all its annual surface water deliveries 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

418 compliance with subdivision (a) of this Article. 

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

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

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

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

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

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

 (e) The Contracting Officer shall inform the Contractor on or before the 20th 425 

426 calendar day of each month of the quantity of M&I Water taken during the preceding month. 
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427 RATES AND METHOD OF PAYMENT FOR WATER

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

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

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

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

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

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

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

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

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

437 “B,” as may be revised annually. 

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

439 and Tiered Pricing Component as follows: 

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

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

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

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

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

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

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

447 Calendar Year, and such notification shall revise Exhibit “B.” 

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

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

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

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

452 comment on such computations and cost allocations. By December 31 of each Calendar Year, 
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453 the Contracting Officer shall provide the Contractor with the final Rates and Tiered Pricing 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

477 day of February. 
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478 (d) The Contractor shall also make a payment in addition to the Rate(s) in 

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

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

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

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

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

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

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

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

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

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

489 be computed pursuant to Article 20 of this Contract. 

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

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

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

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

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

495 (a) of this Article. 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

527 (2) Omitted. 
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528 (3) For purposes of determining the applicability of the Tiered Pricing 

529 Component pursuant to this Article, Water Delivered shall not include the additional water 

530 provided to the Contractor under the provisions of subdivision (f) of Article 3 of this Contract. 

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

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

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

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

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

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

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

538 impact of the proposed change. 

539 (l) Omitted. 

540 (m) Pursuant to the Act of October 27, 1986 (100 Stat. 3050), the Contracting 

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

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

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

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

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

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

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

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

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

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

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

552 Existing Contract and any preceding interim renewal contract, if applicable; and (5) the 

553 application of such payments in the Rates. The Contracting Officer agrees that the Contractor 
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554 shall be entitled to the benefit of any administrative or judicial ruling in favor of any Project 

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

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

557 NON-INTEREST BEARING OPERATION AND MAINTENANCE DEFICITS

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

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

560 liability therefor. 

561 SALES, TRANSFERS, OR EXCHANGES OF WATER

562 9. Omitted. 

563 APPLICATION OF PAYMENTS AND ADJUSTMENTS 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

579 advances, the Contractor will be billed for the additional costs pursuant to Article 25. 
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580 TEMPORARY REDUCTIONS--RETURN FLOWS

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

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

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

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

585 provided in this Contract. 

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

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

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

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

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

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

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

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

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

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

596 or reduction. 

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

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

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

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

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

602 claiming by, through, or under the Contractor. 

603 CONSTRAINTS ON THE AVAILABILITY OF WATER

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

605 reasonable means to guard against a Condition of Shortage in the quantity of water to be made 
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606 available to the Contractor pursuant to this Contract. In the event the Contracting Officer 

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

608 Contractor of said determination as soon as practicable. 

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

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

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

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

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

614 (c) Omitted. 

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

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

617 amended, modified, or superceded only through a public notice and comment procedure. 

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

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

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

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

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

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

624 proceeding. 

625 UNAVOIDABLE GROUNDWATER PERCOLATION

626 13. Omitted. 

627 RULES AND REGULATIONS

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

629 pursuant to this Contract is subject to Federal Reclamation law, as amended and supplemented, 

630 and the rules and regulations promulgated by the Secretary of the Interior under Federal 

631 Reclamation law. 
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632 WATER AND AIR POLLUTION CONTROL

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

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

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

636 authorities. 

637 QUALITY OF WATER

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

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

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

641 2(b) of the Act of August 26, 1937 (50 Stat. 865), as added by Section 101 of the Act of 

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

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

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

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

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

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

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

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

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

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

652 Service Area. 

653 WATER ACQUIRED BY THE CONTRACTOR

654 OTHER THAN FROM THE UNITED STATES

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

671 the Project facilities. 

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

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

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

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

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

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

678 diverting such non-Project water into Project facilities. 

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

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

681 ground-water management plan for the area from which it was extracted. 
Contract No. 14-06-200-5749A-LTR1 

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

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

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

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

686 non-Project contractors. 

687 OPINIONS AND DETERMINATIONS

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

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

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

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

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

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

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

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

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

697 statute or regulation. 

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

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

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

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

702 with the Contractor to the extent reasonably practicable. 

703 COORDINATION AND COOPERATION

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

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

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

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

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

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

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

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

713 and determinations to be made by the respective party. 

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

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

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

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

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

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

720 a real-time basis. 

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

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

723 intent: 

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

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

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

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

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

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

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

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

732 State of California to seek improved water resource management. 
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733 (4) The Secretary will coordinate actions of agencies within the 

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

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

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

737 management activities, and other issues as appropriate. 

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

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

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

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

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

743 CHARGES FOR DELINQUENT PAYMENTS

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

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

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

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

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

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

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

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

752 associated with a delinquent payment. 

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

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

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

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

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

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

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

760 accrued interest, and finally to the overdue payment. 

761 EQUAL OPPORTUNITY

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

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

764 employment because of race, color, religion, sex, or national origin. The Contractor will take 
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765 affirmative action to ensure that applicants are employed, and that employees are treated during 

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

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

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

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

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

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

772 nondiscrimination clause. 

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

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

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

776 national origin. 

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

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

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

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

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

782 employees and applicants for employment. 

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

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

785 of the Secretary of Labor. 

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

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

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

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

790 such rules, regulations, and orders. 

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

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

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

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

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

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

797 otherwise provided by law. 

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

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

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

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

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

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

804 Provided, however, That in the event the Contractor becomes involved in, or is threatened with, 
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805 litigation with a subcontractor or vendor as a result of such direction, the Contractor may request 

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

807 GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT

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

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

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

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

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

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

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

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

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

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

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

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

820 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

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

822 (42 U.S.C. 2000d), Section 504 of the Rehabilitation Act of 1975 (P.L. 93-112, as amended), the 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

839 enforcement thereof. 
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840 PRIVACY ACT COMPLIANCE

841 24. Omitted. 

842 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

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

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

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

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

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

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

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

850 contract administration. 

851 WATER CONSERVATION

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

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

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

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

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

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

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

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

860 Contract shall be contingent upon the Contractor’s continued implementation of such water 

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

862 conservation plan completed pursuant to subdivision (d) of Article 26 of this Contract have not 

863 yet been determined by the Contracting Officer to meet such criteria, due to circumstances which 

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

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

866 Officer to obtain such determination at the earliest practicable date, and thereafter the Contractor 
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867 immediately begins implementing its water conservation and efficiency program in accordance 

868 with the time schedules therein. 

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

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

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

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

873 by the Contracting Officer to be inappropriate for the Contractor. 

874 (c) The Contractor shall submit to the Contracting Officer a report on the 

875 status of its implementation of the water conservation plan on the reporting dates specified in the 

876 then existing conservation and efficiency criteria established under Federal law. 

877 (d) At five-year intervals, the Contractor shall revise its water conservation 

878 plan to reflect the then-current conservation and efficiency criteria for evaluating water 

879 conservation plans established under Federal law and submit such revised water management 

880 plan to the Contracting Officer for review and evaluation. The Contracting Officer will then 

881 determine if the water conservation plan meets Reclamation’s then-current conservation and 

882 efficiency criteria for evaluating water conservation plans established under Federal law. 

883 (e) If the Contractor is engaged in direct ground-water recharge, such activity 

884 shall be described in the Contractor’s water conservation plan. 

885 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

886 27. Except as specifically provided in Article 17 of this Contract, the provisions of 

887 this Contract shall not be applicable to or affect non-Project water or water rights now owned or 

888 hereafter acquired by the Contractor or any user of such water within the Contractor's Service 

889 Area. Any such water shall not be considered Project Water under this Contract. In addition, 

890 this Contract shall not be construed as limiting or curtailing any rights which the Contractor or 

891 any water user within the Contractor's Service Area acquires or has available under any other 

892 contract pursuant to Federal Reclamation law. 
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893 OPERATION AND MAINTENANCE BY OPERATING NON-FEDERAL ENTITY

894 28. Omitted. 

895 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

896 29. The expenditure or advance of any money or the performance of any obligation of 

897 the United States under this Contract shall be contingent upon appropriation or allotment of 

898 funds. Absence of appropriation or allotment of funds shall not relieve the Contractor from any 

899 obligations under this Contract. No liability shall accrue to the United States in case funds are 

900 not appropriated or allotted. 

901 BOOKS, RECORDS, AND REPORTS

902 30. (a) The Contractor shall establish and maintain accounts and other books and 

903 records pertaining to administration of the terms and conditions of this Contract, including: the 

904 Contractor's financial transactions, water supply data, and Project land and right-of-way 

905 agreements; the water users' land-use (crop census), land ownership, land-leasing and water use 

906 data; and other matters that the Contracting Officer may require. Reports thereon shall be 

907 furnished to the Contracting Officer in such form and on such date or dates as the Contracting 

908 Officer may require. Subject to applicable Federal laws and regulations, each party to this 

909 Contract shall have the right during office hours to examine and make copies of the other party's 

910 books and records relating to matters covered by this Contract.

911 (b) Notwithstanding the provisions of subdivision (a) of this Article, no 

912 books, records, or other information shall be requested from the Contractor by the Contracting 

913 Officer unless such books, records, or information are reasonably related to the administration or 

914 performance of this Contract. Any such request shall allow the Contractor a reasonable period of 

915 time within which to provide the requested books, records, or information. 

916 (c) Omitted. 

917 ASSIGNMENT LIMITED--SUCCESSORS AND ASSIGNS OBLIGATED

918 31. (a) The provisions of this Contract shall apply to and bind the successors and 

919 assigns of the parties hereto, but no assignment or transfer of this Contract or any right or interest 

920 therein shall be valid until approved in writing by the Contracting Officer. 

921 (b) The assignment of any right or interest in this Contract by either party 

922 shall not interfere with the rights or obligations of the other party to this Contract absent the 

923 written concurrence of said other party. 
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924 (c) The Contracting Officer shall not unreasonably condition or withhold his 

925 approval of any proposed assignment. 

926 SEVERABILITY

927 32. In the event that a person or entity who is neither (i) a party to a Project contract, 

928 nor (ii) a person or entity that receives Project Water from a party to a Project contract, nor (iii) 

929 an association or other form of organization whose primary function is to represent parties to 

930 Project contracts, brings an action in a court of competent jurisdiction challenging the legality or 

931 enforceability of a provision included in this Contract and said person, entity, association, or 

932 organization obtains a final court decision holding that such provision is legally invalid or 

933 unenforceable and the Contractor has not intervened in that lawsuit in support of the plaintiff(s), 

934 the parties to this Contract shall use their best efforts to (i) within 30 days of the date of such 

935 final court decision identify by mutual agreement the provisions in this Contract which must be 

936 revised, and (ii) within three months thereafter promptly agree on the appropriate revision(s). 

937 The time periods specified above may be extended by mutual agreement of the parties. Pending 

938 the completion of the actions designated above, to the extent it can do so without violating any 

939 applicable provisions of law, the United States shall continue to make the quantities of Project 

940 Water specified in this Contract available to the Contractor pursuant to the provisions of this 

941 Contract which were not found to be legally invalid or unenforceable in the final court decision. 

942 RESOLUTION OF DISPUTES

943 33. Should any dispute arise concerning any provisions of this Contract, or the 

944 parties’ rights and obligations thereunder, the parties shall meet and confer in an attempt to 

945 resolve the dispute. Prior to the Contractor commencing any legal action, or the Contracting 

946 Officer referring any matter to Department of Justice, the party shall provide to the other party 

947 30 days’ written notice of the intent to take such action; Provided, That such notice shall not be 

948 required where a delay in commencing an action would prejudice the interests of the party that 

949 intends to file suit. During the 30-day notice period, the Contractor and the Contracting Officer 
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950 shall meet and confer in an attempt to resolve the dispute. Except as specifically provided, 

951 nothing herein is intended to waive or abridge any right or remedy that the Contractor or the 

952 United States may have. 

953 OFFICIALS NOT TO BENEFIT

954 34. No Member of or Delegate to Congress, Resident Commissioner, or official of the 

955 Contractor shall benefit from this Contract other than as a water user or landowner in the same 

956 manner as other water users or landowners. 

957 CHANGES IN CONTRACTOR’S SERVICE AREA

958 35. (a) While this Contract is in effect, no change may be made in the 

959 Contractor's Service Area, by inclusion or exclusion of lands, dissolution, consolidation, merger, 

960 or otherwise, except upon the Contracting Officer's written consent. 

961 (b) Within 30 days of receipt of a request for such a change, the Contracting 

962 Officer will notify the Contractor of any additional information required by the Contracting 

963 Officer for processing said request, and both parties will meet to establish a mutually agreeable 

964 schedule for timely completion of the process. Such process will analyze whether the proposed 

965 change is likely to: (i) result in the use of Project Water contrary to the terms of this Contract; 

966 (ii) impair the ability of the Contractor to pay for Project Water furnished under this Contract or 

967 to pay for any Federally-constructed facilities for which the Contractor is responsible; and (iii) 

968 have an impact on any Project Water rights applications, permits, or licenses. In addition, the 

969 Contracting Officer shall comply with the NEPA and the ESA. The Contractor will be 

970 responsible for all costs incurred by the Contracting Officer in this process, and such costs will 

971 be paid in accordance with Article 25 of this Contract. 

972 FEDERAL LAWS

973 36. By entering into this Contract, the Contractor does not waive its rights to contest 

974 the validity or application in connection with the performance of the terms and conditions of this 

975 Contract of any Federal law or regulation; Provided, That the Contractor agrees to comply with 

976 the terms and conditions of this Contract unless and until relief from application of such Federal 
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977 law or regulation to the implementing provision of the Contract is granted by a court of 

978 competent jurisdiction. 

979 NOTICES

980 37. Any notice, demand, or request authorized or required by this Contract shall be 

981 deemed to have been given, on behalf of the Contractor, when mailed, postage prepaid, or 

982 delivered to the Area Manager, Bureau of Reclamation, Northern California Area Office, 16349 

983 Shasta Dam Boulevard, Shasta Lake, California 96019, and on behalf of the United States, when 

984 mailed, postage prepaid, or delivered to the Board of Directors of Whitney Construction, 

985 Incorporated, 3241 County Road 313, Orland, California 95963 . The designation of the 

986 addressee or the address may be changed by notice given in the same manner as provided in this 

987 Article for other notices. 

988 CONFIRMATION OF CONTRACT

989 38. The Contractor, after the execution of this Contract, shall furnish to the 

990 Contracting Officer evidence that pursuant to the laws of the State of California, the Contractor 

991 is a legally constituted entity and the Contract is lawful, valid, and binding on the Contractor. 

992 This Contract shall not be binding on the United States until such evidence has been provided to 

993 the Contracting Officer’s satisfaction. 

994 AGREEMENT ON WATER QUANTITIES

995 39. (a) During the term of this Contract, and any renewals thereof, it shall 

996 constitute full agreement as between the United States and the Contractor as to the quantities of 

997 water and the allocation thereof between Base Supply and Project Water which may be diverted 

998 by the Contractor for beneficial use within the area shown on Exhibit “A”, which said diversion, 

999 use, and allocation shall not be disturbed so long as the Contractor shall fulfill all of its 

1000 obligations hereunder, and the Contractor shall not claim any right against the United States in 

1001 conflict with the provisions hereof. 

1002 (b) Nothing herein contained is intended to or does limit rights of the 

1003 Contractor against other than the United States or of the United States against any person other 

1004 than the Contractor; Provided, however, That in the event the Contractor, the United States, or 

1005 any other person shall become party to a general adjudication of rights to the use of water of the 

1006 Stony Creek system, this Contract shall not jeopardize the rights or position of either party hereto 

1007 or of any other person and the rights of all such persons in respect to the use of such water shall 
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1008 be determined in such proceedings the same as if this Contract had not been entered into, and if 

1009 final judgment in any such general adjudication shall determine that the rights of the parties 

1010 hereto are different from the rights as assumed herein, the United States shall submit to the 

1011 Contractor an amendment to give effect to such judgment and the Contract shall be deemed to 

1012 have been amended accordingly unless within 60 days after submission of such amendment to 

1013 the Contractor, the Contractor elects to terminate the Contract or within the same period of time 

1014 the parties agree upon mutually satisfactory amendments to give effect to such judgment. 

1015 (c) In the event this Contract terminates, the rights of the parties to thereafter 

1016 divert and use water shall exist as if this Contract had not been entered into. The fact that as a 

1017 compromise settlement of a controversy as to the respective rights of the parties to divert and use 

1018 water and the yield of such rights during the term hereof, this Contract places a limit on the total 

1019 supply to be diverted annually by the Contractor during the contract term and segregates it into 

1020 Base Supply and Project Water, shall not jeopardize the rights or position of either party with 

1021 respect to its water rights or the yield thereof at all times after the contract terminates. It is 

1022 further agreed that the Contractor at all times will first use water to the use of which it is entitled 

1023 by virtue of its own water rights. Neither the provisions of this Contract, action taken hereunder, 

1024 nor payments made hereunder to the United States by the Contractor shall be construed as an 

1025 admission that any part of the water used by the Contractor during the term of this Contract was 

1026 in fact water to which it would not have been entitled under water rights owned by it nor shall 

1027 receipt of payments thereunder by the United States from the Contractor be construed as an 

1028 admission that any part of the water used by the Contractor during the term of this Contract was 

1029 in fact water to which it would have been entitled under water rights owned by it. 
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1030 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of 

1031 the day and year first above written. 

1032 THE UNITED STATES OF AMERICA 

1033 By: ______________________________________ 

1034 Regional Director, Mid-Pacific Region 

1035 Bureau of Reclamation 

1036 WHITNEY CONSTRUCTION, INC. 

1037 By: ______________________________________ 

1038 President of the Board of Directors 

1039 Attest: 

1040 By: _______________________________ 

1041 Secretary of the Board of Directors 

1042 (I:\LTRC\DraftLTRC\04-19-2004 Whitney LTRC Final Draft Contract.doc) 
Contract No. 14-06-200-5749A-LTR1 

EXHIBIT A

[Map or Description of Contractor’s Service Area]
Contract No. 14-06-200-5749A-LTR1 

EXHIBIT B 

2004 Water Rates and Charges 

Whitney Construction, Inc. – Black Butte Project

 M&I COST OF SERVICE RATES:

 Capital Rate: $ 1.11 

 O&M Rates: 

Water Marketing 5.01 

 Storage 6.38 

 Deficit Rate: 2.65 

 CFO/PRF Adjustment Rate 1/ 6.20

 Total $21.36 

 M&I FULL COST RATE: $21.99 

 CHARGES UNDER P.L. 102-575 TO THE

 RESTORATION FUND 2/ 

 Restoration Payments (3407(d)(2)(A)) $15.64

1/ Chief Financial Officer (CFO) adjustment and Provision for Replacement (PFR) expense is 

being distributed over a 5-year period beginning in FY 2003 for those contractors that requested 

those costs be deferred. 

2/ Restoration fund charges are payments in addition to the water rates and were determined 

pursuant to Title XXXIV of Public Law 102-575. Restoration fund charges are on a fiscal year 

basis (10/1 - 9/30).