M&I

Contract No.

14-06-200-5904-LTR1

UNITED STATES

DEPARTMENT OF THE INTERIOR

BUREAU OF RECLAMATION

Central Valley Project, California

LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES

AND

FRESNO COUNTY WATER WORKS DISTRICT NO. 18

PROVIDING FOR PROJECT WATER SERVICE

FROM FRIANT DIVISION

Table of Contents

Article No. Title Page No.

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

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

1 Definitions ........................................................................................................5-9

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

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

4 Time for Delivery of Water ..........................................................................18-20

5 Point of Diversion and Responsibility for Distribution of Water .................20-22

6 Measurement of Water Within the Service Area .........................................22-24

7 Rates and Method of Payment for Water .....................................................24-29

8 Non-Interest Bearing Operation and Maintenance Deficits ..............................30

9 Sales, Transfers, or Exchanges of Water ......................................................30-31

10 Application of Payments and Adjustments ..................................................31-32

11 Temporary Reductions--Return Flows .........................................................32-33

12 Constraints on the Availability of Water ......................................................33-36

13 Unavoidable Groundwater Percolation ..............................................................36

14 Rules and Regulations ..................................................................................36-37

15 Water and Air Pollution Control ........................................................................37

16 Quality of Water ...........................................................................................37-38

17 Water Acquired by the Contractor Other Than From the United States ......38-40

18 Opinions and Determinations ............................................................................40

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

20 Charges for Delinquent Payments ................................................................42-43

21 Equal Opportunity.........................................................................................43-44

22 General Obligation--Benefits Conditioned Upon Payment ...............................44
23 Compliance With Civil Rights Laws and Regulations .................................44-45

Article No. Title Page No.

24 Privacy Act Compliance ....................................................................................45

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

26 Water Conservation ......................................................................................45-47

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

28 Operation and Maintenance by Non-Federal Entity .....................................47-49

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

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

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

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

33 Resolution of Disputes ..................................................................................51-52

34 Officials Not to Benefit ......................................................................................52

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

36 Federal Laws......................................................................................................53

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

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

Signature Page

Exhibit A

Exhibit B
Contract No. 14-06-200-5904-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 FRESNO COUNTY WATER WORKS DISTRICT NO. 18

8 PROVIDING FOR PROJECT WATER SERVICE

9 FROM FRIANT DIVISION

THIS CONTRACT, made this 20th 10 day of January , 2001, in pursuance generally

11 of the Act of June 17, 1902 (32 Stat. 388), and acts amendatory or supplementary thereto, including, but

12 not limited to, the Acts of August 26, 1937 (50 Stat. 844), as amended and supplemented, August 4, 1939

13 (53 Stat. 1187), as amended and supplemented, July 2, 1956 (70 Stat. 483), June 21, 1963 (77 Stat. 68),

14 October 12, 1982 (96 Stat. 1262), October 27, 1986 (100 Stat. 3050), as amended, and Title XXXIV of

15 the Act of October 30, 1992 (106 Stat. 4706), all collectively hereinafter referred to as Federal

16 Reclamation law, between THE UNITED STATES OF AMERICA, hereinafter referred to as the United

17 States, and FRESNO COUNTY WATER WORKS DISTRICT NO. 18, hereinafter referred to as the

18 Contractor, a public agency of the State of California, duly organized, existing, and acting pursuant to the

19 laws thereof, with its principal place of business in California;

20 WITNESSETH, That:

21 EXPLANATORY RECITALS

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

23 California, for diversion, storage, carriage, distribution and beneficial use, for flood control, irrigation,

24 municipal, domestic, industrial, fish and wildlife mitigation, protection and restoration, generation and
Contract No. 14-06-200-5904-LTR1

2

25 distribution of electric energy, salinity control, navigation and other beneficial uses, of waters of the

26 Sacramento River, the American River, the Trinity River, and the San Joaquin River and their tributaries; and

[2nd 27 ] WHEREAS, the United States constructed Friant Dam (thereby creating Millerton Lake)

28 and the Friant-Kern and Madera Canals, hereinafter collectively referred to as the Friant Division facilities,

29 which will be used in part for the furnishing of water to the Contractor pursuant to the terms of this Contract;

30 and

[3rd 31 ] WHEREAS, pursuant to Section 8 of the Act of June 17, 1902 (32 Stat. 388), the United

32 States has acquired water rights and other rights to the flows of the San Joaquin River, including without

33 limitation the permits issued as the result of Decision 935 by the California State Water Resource Control

34 Board and the contracts described in subdivision (n) of Article 3 of this Contract, pursuant to which the

35 Contracting Officer develops, diverts, stores and delivers Project Water stored or flowing through Millerton

36 Lake in accordance with State and Federal law for the benefit of Project Contractors in the Friant Division;

37 and

38 [3.1] WHEREAS, the water supplied to the Contractor pursuant to this Contract is Project Water

39 developed through the exercise of the rights described in the third (3rd) Explanatory Recital of this Contract;

40 and

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

42 No. 14-06-200-5904, as amended, which established terms for the delivery to the Contractor of Project

43 Water from the Friant Division from August 17, 1956, to February 28, 1997; and
Contract No. 14-06-200-5904-LTR1

3

[5th 44 ] WHEREAS, the Contractor and the United States have pursuant to subsection 3404(c)(1)

45 of the Central Valley Project Improvement Act (CVPIA), subsequently entered into interim renewal

46 contract(s) identified as Contract No(s). 14-06-200-5904-IR1, IR2, IR3, and IR4, the current of which is

47 hereinafter referred to as the Existing Contract, which provided for the continued water service to the

48 Contractor from December 1, 2000, through February 28, 2001; and

[6th 49 ] WHEREAS, Section 3404(c) of the CVPIA provides for long-term renewal of interim and

50 existing long-term Project Water service contracts following completion of appropriate environmental

51 documentation, including a programmatic environmental impact statement (PEIS) pursuant to the National

52 Environmental Policy Act analyzing the direct and indirect impacts and benefits of implementing the CVPIA

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

[7th 54 ] WHEREAS, the United States has completed the PEIS and all other appropriate

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

[8th 56 ] WHEREAS, the Contractor has requested the long-term renewal of the Existing Contract,

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

58 California, for water service from the Central Valley Project; and

[9th 59 ] WHEREAS, the United States has determined that the Contractor has fulfilled all of its

60 obligations under the Existing Contract; and

[10th 61 ] WHEREAS, the Contractor has demonstrated to the satisfaction of the Contracting Officer

62 that the Contractor has utilized the Project Water supplies available to it for reasonable and beneficial use

63 and/or has demonstrated projected future demand for water use such that the Contractor has the capability
Contract No. 14-06-200-5904-LTR1

4

64 and expects to utilize fully for reasonable and beneficial use the quantity of Project Water to be made

65 available to it pursuant to this Contract; and

[11th 66 ] WHEREAS, water obtained from the Central Valley Project has been relied upon by urban

67 and agricultural areas within California for more than fifty (50) years, and is considered by the Contractor as

68 an essential portion of its water supply; and

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

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

71 Valley Project; and

[13th 72 ] WHEREAS, the Secretary intends through coordination, cooperation, and partnerships to

73 pursue measures to improve water supply, water quality, and reliability of the Project for all Project

74 purposes; and

[14th 75 ] WHEREAS, the mutual goals of the United States and the Contractor include: to provide

76 for reliable Project Water supplies; to control costs of those supplies; to achieve repayment of the Central

77 Valley Project as required by law; to guard reasonably against Project Water shortages; to achieve a

78 reasonable balance among competing demands for use of Project Water; and to comply with all applicable

79 environmental statutes, all consistent with the legal obligations of the United States relative to the Central

80 Valley Project; and

[15th 81 ] Omitted; 

82 [15.1] WHEREAS, during Uncontrolled Seasons, Friant Division Project Contractors utilize

83 undependable Class 2 Water in their service areas to, among other things, assist in the management and
Contract No. 14-06-200-5904-LTR1

5

84 alleviation of groundwater overdraft in the Friant Division service area, provide opportunities for

85 environmental enhancement, including restoration of the San Joaquin River below Friant Dam, minimize

86 flooding along the San Joaquin River, encourage optimal water management, and maximize the reasonable

87 and beneficial use of the water; and

88 [15.2] WHEREAS, the parties desire and intend that this Contract not provide a disincentive to

89 the Friant Division Project Contractors continuing to carry out the beneficial activities set out in the

90 Explanatory Recital immediately above; and

[16th 91 ] WHEREAS, the United States and the Contractor are willing to enter into this Contract

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

93 NOW, THEREFORE, in consideration of the mutual and dependent covenants herein contained, it

94 is hereby mutually agreed by the parties hereto as follows:

95 DEFINITIONS

96 1. When used herein unless otherwise distinctly expressed, or manifestly incompatible with the

97 intent of the parties as expressed in this Contract, the term:

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

99 inclusive;

100 (b) “Charges” shall mean the payments required by Federal Reclamation law in addition

101 to the Rates and Tiered Pricing Components specified in this Contract as determined annually by the

102 Contracting Officer pursuant to this Contract;

103 (b2) "Class 1 Water" shall mean that supply of water stored in or flowing through
Contract No. 14-06-200-5904-LTR1

6

104 Millerton Lake which, subject to the contingencies hereinafter described in Articles 3, 11, and 12 of 

105 this Contract, will be available for delivery from Millerton Lake and the Friant-Kern and Madera Canals as

106 a dependable water supply during each Year;

107 (b3) "Class 2 Water" shall mean that supply of water which can be made available

108 subject to the contingencies hereinafter described in Articles 3, 11, and 12 of this Contract for delivery from

109 Millerton Lake and the Friant-Kern and Madera Canals in addition to the supply of Class 1 Water. 

110 Because of its uncertainty as to availability and time of occurrence, such water will be undependable in

111 character and will be furnished only if, as, and when it can be made available as determined by the

112 Contracting Officer;

113 (c) “Condition of Shortage” shall mean a condition respecting the Project during any

114 Year such that the Contracting Officer is unable to deliver sufficient water to meet the Contract Total;

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

116 representative acting pursuant to this Contract or applicable Reclamation law or regulation;

117 (e) “Contract Total” shall mean the maximum amount of Class 1 Water, plus the

118 maximum amount of Class 2 Water to which the Contractor is entitled under subdivision (a) of Article 3 of

119 this Contract;

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

121 permitted to provide Project Water under this Contract as described in Exhibit “A” attached hereto, which

122 may be modified from time to time in accordance with Article 35 of this Contract without amendment of this
Contract No. 14-06-200-5904-LTR1

7

123 Contract;

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

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

126 (h) Omitted;

127 (i) Omitted;

128 (j) Omitted;

129 (k) Omitted;

130 (l) Omitted;

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

132 primarily in the production of agricultural crops or livestock, including domestic use incidental thereto, and

133 watering of livestock. 

134 (n) Omitted;

135 (n2) “Long Term Historic Average” shall mean the average of the final forecast of Water

Made Available to the Contractor pursuant to this Contract and the contracts referenced in the fourth (4th 136 )

and fifth (5th 137 ) Explanatory Recitals of this Contract;

138 (o) “Municipal and Industrial (M&I) Water” shall mean water made available from the

139 Project other than Irrigation Water made available to the Contractor. M&I Water shall include water used

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

141 are kept for personal enjoyment or water delivered to land holdings operated in units of less than five (5)
Contract No. 14-06-200-5904-LTR1

8

142 acres unless the Contractor establishes to the satisfaction of the Contracting Officer that the use of water

143 delivered to any such landholding is a use described in subdivision (m) of this Article;

144 (p) “M&I Full Cost Water Rate” shall mean the annual rate, which, as determined by

145 the Contracting Officer, shall amortize the expenditures for construction allocable to Project M&I facilities in

146 service, including, O&M deficits funded, less payments, over such periods as may be required under

147 Federal Reclamation law with interest accruing from the dates such costs were first incurred plus the

148 applicable rate for the O&M of such Project facilities. Interest rates used in the calculation of the M&I Full

149 Cost Rate shall comply with the Interest Rate methodology contained in Section 202 (3) (B) and (C) of the

150 RRA;

151 (q) “Operation and Maintenance” or “O&M" shall mean normal and reasonable care,

152 control, operation, repair, replacement (other than Capital replacement), and maintenance of Project

153 facilities;

154 (r) “Operating Non-Federal Entity" shall mean the Friant Water Users Authority, 

155 a Non-Federal entity which has the obligation to operate and maintain all or a portion of the Friant Division

156 facilities pursuant to an agreement with the United States, and which may have funding obligations with

157 respect thereto;

158 (s) “Project” shall mean the Central Valley Project owned by the United States and

159 managed by the Department of the Interior, Bureau of Reclamation;

160 (t) “Project Contractors” shall mean all parties who have water service contracts for

161 Project Water from the Project with the United States pursuant to Federal Reclamation law;

162 (u) “Project Water” shall mean all water that is developed, diverted, stored, or
Contract No. 14-06-200-5904-LTR1

9

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

164 terms and conditions of water rights acquired pursuant to California law;
Contract No. 14-06-200-5904-LTR1

10

165 (v) “Rates” shall mean the payments determined annually by the Contracting Officer in

166 accordance with the then current applicable water ratesetting policies for the Project, as described in

167 subdivision (a) of Article 7 of this Contract;

168 (w) Omitted;

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

170 an authorized representative acting pursuant to any authority of the Secretary and through any agency of the

171 Department of the Interior;

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

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

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

175 by the Contractor at the point(s) of delivery approved by the Contracting Officer;

176 (aa) “Water Made Available” shall mean the estimated amount of Project Water that can

177 be delivered to the Contractor for the upcoming Year as declared by the Contracting Officer, pursuant to

178 subdivision (a) of Article 4 of this Contract;

179 (bb) “Water Scheduled” shall mean Project Water made available to the Contractor for

180 which times and quantities for delivery have been established by the Contractor and Contracting Officer,

181 pursuant to subdivision (b) of Article 4 of this Contract; and

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

183 through the last day of February of the following Calendar Year.
Contract No. 14-06-200-5904-LTR1

11

184 TERM OF CONTRACT 

185 2. (a) This Contract shall be effective March 1, 2001, through February 28, 2026. In the

186 event the Contractor wishes to renew the Contract beyond February 28, 2026, the Contractor shall submit

187 a request for renewal in writing to the Contracting Officer no later than two (2) years prior to 

188 the date this Contract expires. The renewal of this Contract insofar as it pertains to the furnishing of M&I

189 Water to the Contractor shall be governed by subdivision (c) of this Article.

190 (b) Omitted.

191 (c) Provided, the Contractor is complying with all terms and conditions of this Contract

192 and all legal obligations of the Contractor, if any, set forth in an enforceable court order, final judgment

193 and/or settlement relating to restoration of the San Joaquin River, this Contract, insofar as it pertains to the

194 furnishing of M&I Water to the Contractor, shall be renewed for a period of twenty-five (25) years and

195 thereafter shall be renewed for successive periods of up to forty (40) years each, which periods shall be

196 consistent with the then-existing Reclamation-wide policy, under terms and conditions mutually agreeable to

197 the parties and consistent with Federal and State law. The present Reclamation-wide policy, dated March

198 20, 2000, provides that the term of such contracts shall be no more than twenty-five (25) years each,

199 subject to a variance to allow a longer term in appropriate circumstances. The Contractor shall be afforded

200 the opportunity to comment to the Contracting Officer on the proposed adoption and application of any

201 revised Reclamation-wide policy applicable to the delivery of Project M&I Water that would affect the term

202 of any subsequent renewal contract with the Contractor for the furnishing of M&I Water.
Contract No. 14-06-200-5904-LTR1

12

203 (d) The Contracting Officer anticipates that by December 31, 2024, all authorized

204 Project construction expected to occur will have occurred, and on that basis the Contracting Officer agrees

205 by that date to allocate all costs that are properly assignable to the Contractor, and agrees further that, at

206 any time after such allocation is made, and subject to satisfaction of the conditions set out in this subdivision

207 of this Article, this Contract shall, at the request of the Contractor, be converted to a contract under

208 subsection (c)(1) of Section 9, of the Reclamation Project Act of 1939, subject to applicable Federal law

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

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

211 being taken of the amount credited to return by the Contractor as provided for under Reclamation law, the

212 remaining amount of construction costs assignable for ultimate return by the Contractor can probably be

213 repaid to the United States within the term of a contract under said subsection 9(c)(1). If the remaining

214 amount of costs that are properly assignable to the Contractor cannot be determined by December 31,

215 2024, the Contracting Officer shall notify the Contractor, and provide the reason(s) why such a

216 determination could not be made. Further, the Contracting Officer shall make such a determination as soon

217 thereafter as possible so as to permit, upon request of the Contractor and satisfaction of the conditions set

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

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

220 Contractor has not requested conversion of this Contract within such term, the parties shall incorporate in

221 any subsequent renewal contract as described in Article 2(c) a provision that carries forth in substantially

222 identical terms the provisions of this Article 2(d). In the event the Contracting Officer is able to make a
Contract No. 14-06-200-5904-LTR1

13

223 determination of the remaining amount of costs that are properly assignable to the Contractor before

224 December 31, 2024, the Contracting Officer shall do so at the earliest time he/she has such ability.

225 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE CONTRACTOR

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

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

228 Contracting Officer shall make available for delivery to the Contractor 150 acre-feet of Class 1 Water for

229 M&I purposes. The quantity of Water Delivered to the Contractor in accordance with this subdivision shall

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

231 (b) Omitted.

232 (c) The Contractor shall utilize the Project Water in accordance with all applicable legal

233 requirements.

234 (d) The Contractor shall make reasonable and beneficial use of all Project Water or

235 other water furnished pursuant to this Contract. Groundwater recharge programs, groundwater banking

236 programs, surface water storage programs, and other similar programs utilizing Project Water or other water

237 furnished pursuant to this Contract conducted within the Contractor’s Service Area which are consistent

238 with applicable State law and result in use consistent with Reclamation law will be allowed; Provided, That

239 any direct recharge program(s) is (are) described in the Contractor’s Water Conservation Plan submitted

240 pursuant to Article 26 of this Contract; Provided, further, That such Water Conservation Plan demonstrates

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

242 Delivered Water is demonstrated to be reasonable for such uses and in compliance with Reclamation law. 
Contract No. 14-06-200-5904-LTR1

14

243 Groundwater recharge programs, groundwater banking programs, surface water storage programs, and

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

245 outside the Contractor’s Service Area may be permitted upon written approval of the Contracting Officer,

246 which approval will be based upon environmental documentation, Project Water rights, and Project

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

248 guidelines.

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

250 biological opinion(s) prepared as a result of a consultation regarding the execution of this Contract

251 undertaken pursuant to Section 7 of the Endangered Species Act of 1973, as amended, that are within the

252 Contractor’s legal authority to implement. The Contractor shall comply with the limitations or requirements

253 imposed by environmental documentation applicable to the Contractor and within its legal authority to

254 implement regarding specific activities. Nothing herein shall be construed to prevent the Contractor from

255 challenging or seeking judicial relief in a court of competent jurisdiction with respect to any biological opinion

256 or other environmental documentation referred to in this Article.

257 (f) Subject to subdivisions (l) and (n) of Article 3 of this Contract, following the

258 declaration of Water Made Available under Article 4 of this Contract, the Contracting Officer will make a

259 determination whether Project Water, or other water available to the Project, can be made available to the

260 Contractor in addition to the Contract Total under Article 3 of this Contract during the Year without

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

262 will consult with the Contractor prior to making such a determination. Subject to subdivisions (l) and (n) of
Contract No. 14-06-200-5904-LTR1

15

263 Article 3 of this Contract, if the Contracting Officer determines that Project Water, or other water available

264 to the Project, can be made available to the Contractor, the Contracting Officer will announce the availability

265 of such water and shall so notify the Contractor as soon as practical. The Contracting Officer will thereafter

266 meet with the Contractor and other Project Contractors capable of taking such water to determine the most

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

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

269 applicable statutes, regulations, guidelines, and policies.

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

271 Year some or all of the Water Made Available to the Contractor during the current Year referred to as

272 “carryover.” The Contractor may request permission to use during the current Year a quantity of Project

273 Water which may be made available by the United States to the Contractor during the subsequent Year

274 referred to as “preuse.” The Contracting Officer’s written approval may permit such uses in accordance

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

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

277 law to the reasonable and beneficial use of Water Delivered pursuant to this Contract during the term thereof

278 and any subsequent renewal contracts, as described in Article 2 of this Contract, during the terms thereof

279 shall not be disturbed so long as the Contractor shall fulfill all of its obligations under this Contract and any

280 renewals thereof. Nothing in the preceding sentence shall affect the 

281 Contracting Officer’s ability to impose shortages under Article 11 or subdivision (b) of Article 12 of this
Contract No. 14-06-200-5904-LTR1

16

282 Contract or applicable provisions of any subsequent renewal contracts.

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

284 delivered for purposes other than those described in subdivisions (m) and (o) of Article 1 of this Contract

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

286 approval.

287 (j) The Contracting Officer shall make reasonable efforts to protect the water rights and

288 other rights described in the third (3rd) Explanatory Recital of this Contract and to provide the water

289 available under this Contract. The Contracting Officer shall not object to participation by the Contractor, in

290 the capacity and to the extent permitted by law, in administrative proceedings related to the water rights and

291 other rights described in the third (3rd) Explanatory Recital of this Contract; Provided, however, That the

292 Contracting Officer retains the right to object to the substance of the Contractor’s position in such a

293 proceeding.

294 (k) Project Water furnished to the Contractor during any month designated in a

295 schedule or revised schedule submitted by the Contractor and approved by the Contracting Officer shall be

296 deemed to have been accepted by the Contractor as Class 1 Water to the extent that Class 1 Water is

297 called for in such schedule for such month and shall be deemed to have been accepted as Class 2 Water to

298 the extent Class 2 Water is called for in such schedule for such month. If in any month the Contractor

299 diverts a quantity of water in addition to the total amount of Class 1 Water and Class 2 Water set forth in

300 the Contractor's approved schedule or revised schedule for such month, such additional diversions shall be

301 charged first against the Contractor's remaining Class 2 Water supply available in the current Year. To the
Contract No. 14-06-200-5904-LTR1

17

302 extent the Contractor's remaining Class 2 Water supply available in the current Year is not sufficient to

303 account for such additional diversions, such additional diversions shall be charged against the Contractor's

304 remaining Class 1 Water supply available in the current Year. To the extent the Contractor's remaining

305 Class 1 Water and Class 2 Water supplies available in the current Year are not sufficient to account for such

306 additional diversions, such additional diversions shall be charged first against the Contractor's available

307 Class 2 Water supply and then against the Contractor's available Class 1 Water supply, both for the

308 following 

309 Year. Payment for all additional diversions of water shall be made in accordance with Article 7 of this

310 Contract.

311 (l) If the Contracting Officer determines there is a Project Water supply available at

312 Friant Dam as the result of an unusually large water supply not otherwise storable for Project purposes or

313 infrequent and otherwise unmanaged flood flows of short duration, such water will be made available to the

314 Contractor and others under Section 215 of the RRA pursuant to the priorities specified below if the

315 Contractor enters into a temporary contract with the United States not to exceed one (1) year for the

316 delivery of such water or, as otherwise provided for in Federal Reclamation law and associated regulations. 

317 Such water may be identified by the Contractor either (i) as additional water to supplement the supply of

318 Class 1 Water and/or Class 2 Water made available to it pursuant to this Contract or, (ii) upon written

319 notification to the Contracting Officer, as water to be credited against the Contractor's Class 2 Water supply

320 available pursuant to this Contract. The Contractor shall deliver such water to Eligible Lands, or to Excess

321 Lands in accordance with this Article. The Contracting Officer shall make water determined to be available
Contract No. 14-06-200-5904-LTR1

18

322 pursuant to this subsection according to the following priorities: first, to long-term Contractors for Class 1

323 Water and/or Class 2 Water within the Friant Division; second, to long-term Contractors in the Cross

324 Valley Division of the Project. The Contracting Officer will consider and seek to accommodate requests

325 from other parties

326 for Section 215 Water for use within the area identified as the Friant Division service area in the

327 environmental assessment developed in connection with the execution of this Contract.

328 (m) Nothing in this Contract, nor any action or inaction of the Contractor or Contracting

329 Officer in connection with the implementation of this Contract, is intended to override, modify, supersede or

330 otherwise interfere with any term or condition of the water rights and other rights referred in the third (3rd)

331 Explanatory Recital of this Contract.

332 (n) The rights of the Contractor under this Contract are subject to the terms of the

333 contract for exchange waters, dated July 27, 1939, between the United States and the San Joaquin and

334 Kings River Canal and Irrigation Company, Incorporated, et al., (hereinafter referred to as the Exchange

335 Contractors), Contract No. I1r-1144, as amended. The United States agrees that it will not deliver to the

336 Exchange Contractors thereunder waters of the San Joaquin River unless and until required by the terms of

337 said contract, and the United States further agrees that it will not voluntarily and knowingly determine itself

338 unable to deliver to the Exchange Contractors entitled thereto from water that is available or that may

339 become available to it from the Sacramento River and its tributaries or the Sacramento-San Joaquin Delta

340 those quantities required to satisfy the obligations of the United States under said Exchange Contract and

341 under Schedule 2 of the Contract for Purchase of Miller and Lux Water Rights (Contract I1r-1145, dated
Contract No. 14-06-200-5904-LTR1

19

342 July 27, 1939).

343 TIME FOR DELIVERY OF WATER

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

345 announce the Contracting Officer’s expected declaration of the Water Made Available. The declaration will

346 be updated monthly, and more frequently if necessary, based on then-current operational and hydrologic

347 conditions and a new declaration with changes, if any, to the Water Made Available will be made. The

348 Contracting Officer shall provide forecasts of Project operations and the basis of the estimate, with relevant

349 supporting information, upon the written request of the Contractor. Concurrently with the declaration of the

350 Water Made Available, the Contracting Officer shall provide the Contractor with the updated Long Term

351 Historic Average. The declaration of Project operations will be expressed in terms of both Water Made

352 Available and the Long Term Historic Average.

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

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

355 the monthly quantities of Project Water to be delivered by the United States to the Contractor pursuant to

356 this Contract for the Year commencing on such March 1. The Contracting Officer shall use all reasonable

357 means to deliver Project Water according to the approved schedule for the Year commencing on such

358 March 1.

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

360 Water the Contractor intends to put to reasonable and beneficial use within the Contractor's Service Area,
Contract No. 14-06-200-5904-LTR1

20

361 or to sell, transfer or exchange pursuant to Article 9 of this Contract during any Year.

362

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

364 States shall deliver Project Water to the Contractor in accordance with the initial schedule submitted by the

365 Contractor pursuant to subdivision (b) of this Article, or any written revision(s), satisfactory to the

366 Contracting Officer, thereto submitted within a reasonable time prior to the date(s) on which the requested

367 change(s) is/are to be implemented; Provided, That the total amount of water requested in that schedule or

368 revision does not exceed the quantities announced by the Contracting Officer pursuant to the provisions of

369 subdivision (a) of Article 3, and the Contracting Officer determines that there will be sufficient capacity

370 available in the appropriate Friant Division facilities to deliver the water in accordance with that schedule:

371 Provided, further, That the Contractor shall not schedule the delivery of any water during any period as to

372 which the Contractor is notified by the Contracting Officer or Operating Non-Federal Entity that Project

373 facilities required to make deliveries to the Contractor will not be in operation because of scheduled O&M.

374 (e) The Contractor may, during the period from and including November 1 of each

375 Year through and including the last day of February of that Year, request delivery of any amount of the

376 Class 1 Water estimated by the Contracting Officer to be made available to it during the following Year. 

377 The Contractor may, during the period from and including January 1 of each Year (or such earlier date as

378 may be determined by the Contracting Officer) through and including the last day of February of that Year,

379 request delivery of any amount of Class 2 Water estimated by the Contracting Officer to be made available

380 to it during the following Year. Such water shall hereinafter be referred to as preuse water. Such request
Contract No. 14-06-200-5904-LTR1

21

381 must be submitted in writing by the Contractor for a specified quantity of preuse and shall be subject to the

382 approval of the Contracting Officer. Payment for preuse water so requested shall be at the appropriate

383 rate(s) for the following Year in accordance with Article 7 of this Contract and shall be made in advance of

384 delivery of any preuse water. The Contracting Officer shall deliver such preuse water in accordance with a

385 schedule or any revision thereof submitted by the Contractor and approved by the Contracting Officer, to

386 the extent such water is available and to the extent such deliveries will not interfere with the delivery of

387 Project Water entitlements to other Friant Division Contractors or the physical maintenance of the Project

388 facilities. The quantities of preuse water delivered pursuant to this subdivision shall be deducted from the

389 quantities of water that the Contracting Officer would otherwise be obligated to make available to the

390 Contractor during the following Year; Provided, That the quantity of preuse water to be deducted from the

391 quantities of either Class 1 Water or Class 2 Water to be made available to the Contractor in the following

392 Year shall be specified by the Contractor at the time the preuse water is requested or as revised in its first

393 schedule for the following Year submitted in accordance with subdivision (b) of this Article, based on the

394 availability of the following Year water supplies as determined by the Contracting Officer.

395 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

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

397 shall be delivered to the Contractor at a point or points of delivery either on Project facilities or another

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

399 (b) The Contracting Officer, the Operating Non-Federal Entity, or other appropriate

400 entity shall make all reasonable efforts to maintain sufficient flows and levels of water in the Friant Division
Contract No. 14-06-200-5904-LTR1

22

401 facilities to deliver Project Water to the Contractor at specific turnouts established pursuant to subdivision

402 (a) of this Article.

403 (c) The Contractor shall not deliver Project Water to land outside the Contractor's

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

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

406 and recorded with equipment furnished, installed, operated, and maintained by the United States, the

407 Operating Non-Federal Entity or other appropriate entity as designated by the Contracting Officer

408 (hereafter “other appropriate entity”) at the point or points of delivery established pursuant to subdivision (a)

409 of this Article. Upon the request of either party to this Contract, the Contracting Officer shall investigate, or

410 cause to be investigated by the responsible Operating Non-Federal Entity, the accuracy of such

411 measurements and shall take any necessary steps to adjust any errors appearing therein. For any period of

412 time when accurate measurements have not been made, the Contracting Officer shall consult with the

413 Contractor and the responsible Operating Non-Federal Entity prior to making a final determination of the

414 quantity delivered for that period of time.

415 (e) Neither the Contracting Officer nor any Operating Non-Federal Entity shall be

416 responsible for the control, carriage, handling, use, disposal, or distribution of Project Water Delivered to

417 the Contractor pursuant to this Contract beyond the delivery points specified in subdivision (a) of this

418 Article. The Contractor shall indemnify the United States, its officers, employees, agents, and assigns on

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

420 including property damage, personal injury, or death arising out of or connected with the control, carriage,
Contract No. 14-06-200-5904-LTR1

23

421 handling, use, disposal, or distribution of such Project Water beyond such delivery points, except for any

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

423 employees, agents, or assigns, including any responsible Operating Non-Federal Entity, with the intent of

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

425 any of its officers, employees, agents, or assigns, including any responsible Operating Non-Federal Entity;

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

427 responsible Operating Non-Federal Entity; or (iv) damage or claims resulting from a malfunction of facilities

428 owned and/or operated by the United States or responsible Operating Non-Federal Entity; Provided, That

429 the Contractor is not the Operating Non-Federal Entity that owned or operated the malfunctioning

430 facility(ies) from which the damage claim arose.

431 MEASUREMENT OF WATER WITHIN THE SERVICE AREA

432 6. (a) The Contractor established a measurement program satisfactory to the Contracting

433 Officer, all surface water delivered for municipal and industrial purposes is measured at each municipal and

434 industrial service connection. The water measuring devices or water measuring methods of comparable

435 effectiveness must be acceptable to the Contracting Officer. The Contractor shall be responsible for

436 installing, operating, and maintaining and repairing all such measuring devices and implementing all such

437 water measuring methods at no cost to the United States. The Contractor shall use the information obtained

438 from such water measuring devices or water measuring methods to ensure its proper management of the

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

440 for municipal and industrial purposes by customer class as defined in the Contractor’s water conservation
Contract No. 14-06-200-5904-LTR1

24

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

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

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

444 report described in subdivision (c) of Article 26 of this Contract.

445 (b) To the extent the information has not otherwise been provided, upon execution of

446 this Contract, the Contractor shall provide to the Contracting Officer a written report describing the

447 measurement devices or water measuring methods being used or to be used to implement subdivision (a) of

448 this Article and identifying the municipal and industrial service connections or alternative measurement

449 programs approved by the Contracting Officer, at which such measurement devices or water measuring

450 methods are being used, and, if applicable, identifying the locations at which such devices and/or methods

451 are not yet being used including a time schedule for implementation at such locations. The Contracting

452 Officer shall advise the Contractor in writing within sixty (60) days as to the adequacy of, and necessary

453 modifications, if any, of the measuring devices or water measuring methods identified in the Contractor’s

454 report and if the Contracting Officer does not respond in such time, they shall be deemed adequate. If the

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

456 shall within sixty (60) days following the Contracting Officer‘s response, negotiate in good faith the earliest

457 practicable date by which the Contractor shall modify said measuring devices and/or measuring methods as

458 required by the Contracting Officer to ensure compliance with subdivision (a) of this Article.

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

460 Area after the effective date of this Contract shall also comply with the measurement provisions described in

461 subdivision (a) of this Article.
Contract No. 14-06-200-5904-LTR1

25

462 (d) The Contractor shall inform the Contracting Officer and the State of California in

463 writing by April 30 of each Year of the monthly volume of surface water delivered within the Contractor’s

464 Service Area during the previous Year.

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

Non-Federal Entity on or before the twentieth (20th 466 ) calendar day of each month of the quantity of M&I

467 Water taken during the preceding month.

468 RATES AND METHOD OF PAYMENT FOR WATER

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

470 Delivered Water at Rates, Charges, and the Tiered Pricing Component established in accordance with the

471 Secretary’s then-existing ratesetting policy for M&I Water. Such ratesetting policies shall be amended,

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

473 law and associated rules and regulations, or policies; and (iii) other applicable provisions of this Contract. 

474 Payments shall be made by cash transaction, wire, or any other mechanism as may be agreed to in writing

475 by the Contractor and the Contracting Officer. The Rates, Charges, and Tiered Pricing Components

476 applicable to the Contractor upon execution of this Contract are set forth in Exhibit “B”, as may be revised

477 annually.

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

479 Tiered Pricing Components as follows:

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

481 the Contractor an estimate of the Charges for Project Water that will be applied to the period October 1, of
Contract No. 14-06-200-5904-LTR1

26

482 the current Calendar Year, through September 30, of the following Calendar Year, and the basis for such

483 estimate. The Contractor shall be allowed not less than two (2) months to review and comment on such

484 estimates. On or before September 15 of each Calendar Year, the Contracting Officer shall notify the

485 Contractor in writing of the Charges to be in effect during the period 

486 October 1 of the current Calendar Year, through September 30, of the following Calendar Year, and such

487 notification shall revise Exhibit “B.”

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

489 make available to the Contractor an estimate of the Rates and Tiered Pricing Components for Project Water

490 for the following Year and the computations and cost allocations upon which those Rates are based. The

491 Contractor shall be allowed not less than two (2) months to review and comment on such computations and

492 cost allocations. By December 31 of each Calendar Year, the Contracting Officer shall provide the

493 Contractor with the final Rates and Tiered Pricing Components to be in effect for the upcoming Year, and

494 such notification shall revise Exhibit “B.”

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

496 Water for each Year pursuant to subdivision (b) of Article 4 of this Contract, the Contractor shall make an

497 advance payment to the United States equal to the total amount payable pursuant to the applicable Rate(s)

498 set under subdivision (a) of this Article, for the Project Water scheduled to be delivered pursuant to this

499 Contract during the first two (2) calendar months of the Year. Before the end of the first month and before

500 the end of each calendar month thereafter, the Contractor shall make an advance payment to the United

501 States, at the Rate(s) set under subdivision (a) of this Article, for the Water Scheduled to be delivered
Contract No. 14-06-200-5904-LTR1

27

502 pursuant to this Contract during the second month immediately following. Adjustments between advance

503 payments for Water Scheduled and payments at Rates due for Water Delivered shall be made before the

504 end of the following month; Provided, That any revised schedule submitted by the Contractor pursuant to

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

506 any month shall be accompanied with appropriate advance payment, at the Rates then in effect, to assure

507 that Project Water is not delivered to the Contractor in advance of such payment. In any month in which the

508 quantity of Water Delivered to the Contractor pursuant to this Contract equals the quantity of Water

509 Scheduled and paid for by the Contractor, no additional Project Water shall be delivered to the Contractor

510 unless and until an advance payment at the Rates then in effect for such additional Project Water is made. 

511 Final adjustment between the advance payments for the Water Scheduled and payments for the quantities of

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

513 later than April 30th of the following Year, or sixty (60) days after the delivery of Project Water carried

514 over under subdivision (f) of Article 3 of this Contract if such water is not delivered by the last day of

515 February.

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

517 (c) of this Article to the United States for Water Delivered, at the Charges and the appropriate Tiered

518 Pricing Component then in effect, before the end of the month following the month of delivery; Provided,

519 That the Contractor may be granted an exception from the Tiered Pricing Component pursuant to

520 subdivision (j)(2) of this Article. The payments shall be consistent with the quantities of M&I Water

521 Delivered as shown in the water delivery report for the subject month prepared by the Operating Non-
Contract No. 14-06-200-5904-LTR1

28

522 Federal Entity or, if there is no Operating Non-Federal Entity, by the Contracting Officer. Such water

523 delivery report shall be the basis for payment of Charges and Tiered Pricing Components by the Contractor,

524 and shall be provided to the Contractor by the Operating Non-Federal Entity or the Contracting Officer (as

525 applicable) within five (5) days after the end of the month of delivery. The water delivery report shall be

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

527 Delivered. Adjustment for overpayment or underpayment of Charges shall be made through the adjustment

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

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

530 Contract.

531 (e) The Contractor shall pay for any Water Delivered under subdivision (d), (f), or (g)

532 of Article 3 of this Contract as determined by the Contracting Officer pursuant to applicable statutes,

533 associated regulations, any applicable provisions of guidelines or ratesetting policies; Provided, That the

534 Rate for Water Delivered under subdivision (d) of Article 3 of this Contract shall be no more than the

535 otherwise applicable Rate for M&I Water under subdivision (a) of this Article.

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

537 may be paid from any revenues available to the Contractor.

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

539 delivery of Project Water or the delivery of non-project water through Project facilities shall be allocated

540 and applied in accordance with Federal Reclamation law and the associated rules or regulations, and the

541 then current Project ratesetting policies for M&I Water.

542 (h) The Contracting Officer shall keep its accounts pertaining to the administration of the
Contract No. 14-06-200-5904-LTR1

29

543 financial terms and conditions of its long-term contracts, in accordance with applicable Federal standards, so

544 as to reflect the application of Project costs and revenues. The Contracting Officer shall, each Year upon

545 request of the Contractor, provide to the Contractor a detailed accounting of all Project and Contractor

546 expense allocations, the disposition of all Project and Contractor revenues, and a summary of all water

547 delivery information. The Contracting Officer and the Contractor shall enter into good faith negotiations to

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

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

550 is their mutual goal. Recognizing that experience has demonstrated that mechanisms, policies, and

551 procedures used for establishing Rates, Charges, and Tiered Pricing Components, and/or for making and

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

553 it is expressly agreed that the parties may enter into agreements to modify the mechanisms, policies, and

554 procedures for any of those purposes while this Contract is in effect without amending this Contract.

555 (j) (1) Beginning at such time as the total of the deliveries of Class 1 Water and

556 Class 2 Water in a Year exceed eighty (80%) percent of the Contract Total, then before the end of the

557 month following the month of delivery the Contractor shall make an additional payment to the United States

558 equal to the applicable Tiered Pricing Component. The Tiered Pricing Component for the total of the

559 deliveries of Class 1 Water and Class 2 Water in excess of eighty (80%) percent of the Contract Total, but

560 less than or equal to ninety (90%) percent of the Contract Total, shall equal the one-half of the difference

561 between the Rate established under subdivision (a) of Article 7 of this Contract and the M&I Full Cost

562 Water Rate. The Tiered Pricing Component for the total of the deliveries of Class 1 Water and Class 2
Contract No. 14-06-200-5904-LTR1

30

563 Water which exceeds ninety (90%) percent of the Contract 

564 Total shall equal the difference between (i) the Rate established under subdivision (a) of Article 7 of this

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

566 (2) Omitted.

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

568 Components pursuant to this Article, Water Delivered shall include Project Water that the Contractor

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

570 (k) For the term of this Contract, Rates under the respective ratesetting policies will be

571 established to recover only reimbursable “operation and maintenance” (including any deficits) and capital

572 costs of the Project, as those terms are used in the then-current Project ratesetting policies, and interest,

573 where appropriate, except in instances where a minimum Rate is applicable in accordance with the relevant

574 Project ratesetting policy. Changes of significance in practices which implement the Contracting Officer’s

575 ratesetting policies will not be implemented until the Contracting Officer has provided the Contractor an

576 opportunity to discuss the nature, need, and impact of the proposed change.

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

578 Rates for Project Water transferred by the Contractor shall be the Contractor’s Rates adjusted upward or

579 downward to reflect the changed costs of delivery (if any) of the transferred Project Water to the

580 transferee’s point of delivery in accordance with the then applicable CVP Ratesetting Policy.

581 (m) Pursuant to the Act of October 27, 1986 (100 Stat. 3050), the Contracting
Contract No. 14-06-200-5904-LTR1

31

582 Officer is authorized to adjust determination of ability to pay every five (5) years.

583 NON-INTEREST BEARING OPERATION AND MAINTENANCE DEFICITS

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

585 Contract, the Contractor has no non-interest bearing operation and maintenance deficits and shall have no

586 further liability therefor.

587 SALES, TRANSFERS, OR EXCHANGES OF WATER

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

589 transferred, or exchanged to others for reasonable and beneficial uses within the State of California if such

590 sale, transfer, or exchange is authorized by applicable Federal and State laws, and applicable guidelines or

591 regulations then in effect. No sale, transfer, or exchange of Project Water under this Contract may take

592 place without the prior written approval of the Contracting Officer, except as provided for in subdivision (b)

593 of this Article, and no such sales, transfers, or exchanges shall be approved absent compliance with

594 appropriate environmental documentation including but not limited to the National Environmental Policy Act

595 and the Endangered Species Act. Such environmental documentation should include, as appropriate, an

596 analysis of groundwater impacts and economic and social effects, including environmental justice, of the

597 proposed water transfers on both the transferor and transferee.

598 (b) In order to facilitate efficient water management by means of water transfers of the

599 type historically carried out among Project Contractors located within the same geographical area and to

600 allow the Contractor to participate in an accelerated water transfer program during the term of this Contract,
Contract No. 14-06-200-5904-LTR1

32

601 the Contracting Officer shall prepare, as appropriate, necessary environmental documentation including, but

602 not limited to, the National Environmental Policy Act and the Endangered Species Act analyzing annual

603 transfers within such geographical areas and the Contracting Officer shall determine whether such transfers

604 comply with applicable law. Following the completion of the environmental documentation, such transfers

605 addressed in such documentation shall be conducted with advance notice to the Contracting Officer, but

606 shall not require prior written approval by the Contracting Officer. Such environmental documentation and

607 the Contracting Officer’s compliance determination shall be reviewed every five (5) years and updated, as

608 necessary, prior to the expiration of the then existing five (5) -year period. All subsequent environmental 

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

610 transferred within the same geographical area.

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

612 transfer must: (i) be for irrigation purposes for lands irrigated within the previous three (3) years, for M&I

613 use, groundwater recharge, groundwater banking, similar groundwater activities, surface water storage, or

614 fish and wildlife resources; not lead to land conversion; and be delivered to established cropland, wildlife

615 refuges, groundwater basins or municipal and industrial use; (ii) occur within a single Year; (iii) occur

616 between a willing seller and a willing buyer; (iv) convey water through existing facilities with no new

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

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

619 local or tribal laws and requirements imposed for protection of the environment and Indian Trust Assets, as

620 defined under Federal law.

621 APPLICATION OF PAYMENTS AND ADJUSTMENTS 
Contract No. 14-06-200-5904-LTR1

33

622 10. (a) The amount of any overpayment by the Contractor of the Contractor’s O&M,

623 Capital, and deficit (if any) obligations for the Year shall be applied first to any current liabilities of the

624 Contractor arising out of this Contract then due and payable. Overpayments of more than One Thousand

625 Dollars ($1,000) shall be refunded at the Contractor’s request. In lieu of a refund, any amount of such

626 overpayment at the option of the Contractor, may be credited against amounts to become due to the United

627 States by the Contractor. With respect to overpayment, such refund or adjustment shall constitute the sole

628 remedy of the Contractor or anyone having or claiming to have the right to the use of any of the Project

629 Water supply provided for herein. All credits and refunds of overpayments shall be made within thirty (30)

630 days of the Contracting Officer obtaining direction as to how to credit or refund such overpayment in

631 response to the notice to the Contractor that it has finalized the accounts for the Year in which the

632 overpayment was made.

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

634 pursuant to Article 25 of this Contract shall be adjusted to reflect the actual costs when the work has been

635 completed. If the advances exceed the actual costs incurred, the difference will be refunded to the

636 Contractor. If the actual costs exceed the Contractor's advances, the Contractor will be billed for the

637 additional costs pursuant to Article 25 of this Contract.

638 TEMPORARY REDUCTIONS--RETURN FLOWS

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

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

641 thereof, providing for water deliveries from the Project, the Contracting Officer shall make all reasonable
Contract No. 14-06-200-5904-LTR1

34

642 efforts to optimize Project Water deliveries to the Contractor as provided in this Contract.

643 (b) The Contracting Officer or Operating Non-Federal Entity may temporarily

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

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

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

647 Officer or Operating Non-Federal Entity will give the Contractor due notice in advance of such temporary

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

649 That the United States shall use its best efforts to avoid any discontinuance or reduction in such service. 

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

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

652 hereunder in the absence of such discontinuance or reduction.

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

654 from Water Delivered to the Contractor hereunder which escapes or is discharged beyond the Contractor's

655 Service Area; Provided, That this shall not be construed as claiming for the United States any right as

656 seepage or return flow to water being used pursuant to this Contract for surface irrigation or underground

657 storage either being put to reasonable and beneficial use pursuant to this Contract within the Contractor’s

658 Service Area by the Contractor or those claiming by, through, or under the Contractor. For purposes of this

659 subdivision, groundwater recharge, groundwater banking and all similar groundwater activities will be

660 deemed to be underground storage.

661 CONSTRAINTS ON THE AVAILABILITY OF WATER
Contract No. 14-06-200-5904-LTR1

35

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

663 to guard against a Condition of Shortage in the quantity of water to be made available to the Contractor

664 pursuant to this Contract. In the event the Contracting Officer determines that a Condition of Shortage

665 appears probable, the Contracting Officer will notify the Contractor of said determination as soon as

666 practicable.

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

668 Project, drought, other physical causes beyond the control of the Contracting Officer or actions taken by the

669 Contracting Officer to meet legal obligations then, except as provided in subdivision (a) of Article 18 of this

670 Contract, no liability shall accrue against the United States or any of its officers, agents, or employees for

671 any damage, direct or indirect, arising therefrom.

672 (c) The United States shall not execute contracts which together with this Contract, shall

673 in the aggregate provide for furnishing during the life of this Contract or any renewals hereof Class 1 Water

674 in excess of 800,000 acre-feet per Year or Class 2 Water in excess of 1,401,475 acre-feet per Year;

675 Provided, That, subject to subdivision (l) of Article 3 of this Contract, the limitation placed on Class 2 Water

676 contracts shall not prohibit the United States from entering into temporary contracts of one year or less in

677 duration for delivery of Project Water to other entities if such water is not necessary to meet the schedules

678 as may be submitted by all Friant Division long-term water service Contractors entitled to receive Class 1

679 Water and/or Class 2 Water under their water service contracts. Nothing in this subdivision shall limit the

680 Contracting Officer’s ability to take actions that result in the availability of new water supplies to be used for

681 Project purposes and allocating such new supplies; Provided, That the Contracting Officer shall not take
Contract No. 14-06-200-5904-LTR1

36

682 such actions until after consultation with the Friant Division Project Contractors.

683 (d) The Contracting Officer shall not deliver any Class 2 Water pursuant to this or any

684 other contract for water service heretofore or hereafter entered into any Year unless and until the

685 Contracting Officer determines that the cumulative total quantity of Class 1 Water specified in subdivision (c)

686 of this Article will be available for delivery in said Year. If the Contracting Officer determines there is or will

687 be a shortage in any Year in the quantity of Class 1 Water available for delivery, the Contracting Officer

688 shall apportion the available Class 1 Water among all Contractors 

689 entitled to receive such water that will be made available at Friant Dam in accordance with the following:

690 (1) A determination shall be made of the total quantity of Class 1 Water at

691 Friant Dam which is available for meeting Class 1 Water contractual commitments, the amount so

692 determined being herein referred to as the available supply.

693 (2) The total available Class 1 supply shall be divided by the Class 1 Water

694 contractual commitments, the quotient thus obtained being herein referred to as the Class 1 apportionment

695 coefficient.

696 (3) The total quantity of Class 1 Water under Article 3 of this Contract shall be

697 multiplied by the Class 1 apportionment coefficient and the result shall be the quantity of Class 1 Water

698 required to be delivered by the Contracting Officer to the Contractor for the respective Year, but in no

699 event shall such amount exceed the total quantity of Class 1 Water specified in subdivision (a) of Article 3 of

700 this Contract.
Contract No. 14-06-200-5904-LTR1

37

701 (e) If the Contracting Officer determines there is less than the quantity of Class 2 Water

702 which the Contractor otherwise would be entitled to receive pursuant to Article 3 of this Contract, the

703 quantity of Class 2 Water which shall be furnished to the Contractor by the Contracting Officer will be

704 determined in the manner set forth in paragraphs (1), (2), and (3), of subdivision (d) of this Article

705 substituting the term "Class 2" for the term "Class 1."

706 (f) In the event that in any Year there is made available to the Contractor, by reason of

707 any shortage or apportionment as provided in subdivisions (a), (d) or (e) of this Article, or any

708 discontinuance or reduction of service as set forth in subdivision (a) of Article 11 of this Contract, less than

709 the quantity of water which the Contractor otherwise would be entitled to receive hereunder, there shall be

710 made an adjustment on account of the amounts already paid to the Contracting Officer by the Contractor for

711 Class 1 Water and Class 2 Water for said Year in accordance with Article 10 of this Contract.

712 UNAVOIDABLE GROUNDWATER PERCOLATION

713 13. Omitted.

714 RULES AND REGULATIONS

715 14. (a) The parties agree that the delivery of Water or use of Federal facilities pursuant to

716 this Contract is subject to Federal Reclamation law, as amended and supplemented, and the rules and

717 regulations promulgated by the Secretary of the Interior under Federal Reclamation law.

718 (b) The terms of this Contract are subject to any enforceable order, judgment and/or

719 settlement in NRDC v. Patterson, No. CIVS 88-1658-LKK-EM and shall be timely modified as necessary

720 to effectuate or facilitate any final order, judgment or settlement in said litigation.

721 (c) The parties acknowledge that, as of the effective date of this Contract, active
Contract No. 14-06-200-5904-LTR1

38

722 settlement discussions are underway in NRDC v. Patterson between Friant Division water service

723 contractors, representatives of the Contracting Officer, and the plaintiffs in NRDC v. Patterson. The mutual

724 goals of the parties to those discussions are (i) to expeditiously evaluate and implement, on a mutually

725 acceptable basis, instream and related measures that will restore ecological functions and hydrologic and

726 geomorphologic processes of the San Joaquin River below Friant Dam to a level that restores and maintains

727 fish populations in good condition, including but not limited to naturally-reproducing, self-sustaining

728 populations of chinook salmon and (ii) to accomplish these restoration goals while not adversely impacting

729 the overall sufficiency, reliability and cost of water supplies to Friant Division water users. The Contractor

730 has been actively participating, and intends to continue to participate in such settlement discussions. Except

731 as provided in this Contract, this Contract does not add to the obligations of the parties, if any, relating to

732 the San Joaquin River. This Contract does not limit or detract from the obligations of the parties, if any,

733 relating to the San Joaquin River. 

734 WATER AND AIR POLLUTION CONTROL

735 15. The Contractor, in carrying out this Contract, shall comply with all applicable water and air

736 pollution laws and regulations of the United States and the State of California, and shall obtain all required

737 permits or licenses from the appropriate Federal, State, or local authorities.

738 QUALITY OF WATER

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

740 Contract shall be operated and maintained to enable the United States to deliver Project Water to the

741 Contractor in accordance with the water quality standards specified in subsection 2(b) of the Act of August

742 26, 1937 (50 Stat. 865), as added by Section 101 of the Act of October 27, 1986 (100 Stat. 3050) or
Contract No. 14-06-200-5904-LTR1

39

743 other existing Federal laws. The United States is under no obligation to construct or furnish water treatment

744 facilities to maintain or to improve the quality of Water Delivered to the Contractor 

745 pursuant to this Contract. The United States does not warrant the quality of Water Delivered to the

746 Contractor pursuant to this Contract.

747 (b) The Operation and Maintenance of Project facilities shall be performed in such

748 manner as is practicable to maintain the quality of raw water made available through such facilities at the

749 highest level reasonably attainable as determined by the Contracting Officer. The Contractor shall be

750 responsible for compliance with all State and Federal water quality standards applicable to surface and

751 subsurface agricultural drainage discharges generated through the use of Federal or Contractor facilities or

752 Project Water provided by the Contractor within the Contractor’s Service Area.

753 WATER ACQUIRED BY THE Contractor

754 OTHER THAN FROM THE UNITED STATES

755 17. (a) Omitted. 

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

757 than from the United States or adverse to the Project or its Contractors (i.e., non-Project Water), may be

758 stored, conveyed and/or diverted through Project facilities, subject to the completion of appropriate

759 environmental documentation, with the approval of the Contracting Officer and the execution of any contract

760 determined by the Contracting Officer to be necessary, consistent with the following provisions:

761 (1) The Contractor may introduce non-Project Water into Project facilities and
Contract No. 14-06-200-5904-LTR1

40

762 deliver said water to lands within the Subcontractor, subject to payment to the United States and/or to any

763 applicable Operating Non-Federal Entity of an appropriate rate as determined by the CVP Ratesetting

764 Policy and the Reclamation Reform Act of 1982, each as amended, modified or superseded from time to

765 time. In addition, if electrical power is required to pump non-Project Water 

766 through the facilities, the Contractor shall be responsible for obtaining the necessary power and paying the

767 necessary charges therefor.

768 (2) Delivery of such non-project water in and through Project facilities shall only

769 be allowed to the extent such deliveries do not: (i) interfere with other Project purposes as determined by

770 the Contracting Officer; (ii) reduce the quantity or quality of water available to other Project water service

771 Contractors; (iii) interfere with the delivery of contractual water entitlements to any other Project water

772 service Contractors; or (iv) interfere with the physical maintenance of the Project facilities.

773 (3) Neither the United States nor the Operating Non-Federal Entity shall be

774 responsible for control, care or distribution of the non-Project Water before it is introduced into or after it is

775 delivered from the Project facilities. The Contractor hereby releases and agrees to defend and indemnify the

776 United States and the Operating Non-Federal Entity, and their respective officers, agents, and employees,

777 from any claim for damage to persons or property, direct or indirect, resulting from Contractor’s diversion

778 or extraction of non-Project Water from any source.

779 (4) Diversion of such non-project water into Project facilities shall be consistent

780 with all applicable laws, and if involving groundwater, consistent with any groundwater management plan for

781 the area from which it was extracted.

782 (5) After Project purposes are met, as determined by the Contracting Officer,
Contract No. 14-06-200-5904-LTR1

41

783 the United States and the Contractor shall share priority to utilize the remaining capacity of the facilities

784 declared to be available by the Contracting Officer for conveyance and transportation of 

785 non-Project Water prior to any such remaining capacity being made available to non-Project Contractors.

786 OPINIONS AND DETERMINATIONS

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

788 or determination of either party to this Contract, said terms shall not be construed as permitting such action

789 to be predicated upon arbitrary, capricious, or unreasonable opinions or determinations. Both parties,

790 notwithstanding any other provisions of this Contract, expressly reserve the right to seek relief from and

791 appropriate adjustment for any such arbitrary, capricious, or unreasonable opinion or determination. Each

792 opinion or determination by either party shall be provided in a timely manner. Nothing in subdivision (a) of

793 Article 18 of this Contract is intended to or shall affect or alter the standard of judicial review applicable

794 under federal law to any opinion or determination implementing a specific provision of federal law embodied

795 in statute or regulation. 

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

797 administer this Contract that are consistent with the provisions of this Contract, the laws of the United States

798 and of the State of California, and the rules and regulations promulgated by the Secretary of the Interior. 

799 Such determinations shall be made in consultation with the Contractor to the extent reasonably practicable.

800 COORDINATION AND COOPERATION

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

802 Contractor shall communicate, coordinate, and cooperate with each other, and with other affected Project
Contract No. 14-06-200-5904-LTR1

42

803 Contractors, in order to improve the operation and management of the Project. The communication,

804 coordination, and cooperation regarding operations and management shall include, but not be limited to, any

805 action which will or may materially affect the quantity or quality of Project Water supply, the allocation of

806 Project Water supply, and Project financial matters including, but not limited to, budget issues. The

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

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

809 determinations to be made by the respective party.

810 (b) Within one-hundred twenty (120) days following the effective date of this Contract,

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

812 interested Project Contractors to develop a mutually agreeable, written Project-wide process, which may be

813 amended as necessary separate and apart from this Contract. The goal of this process shall be to provide,

814 to the extent practicable, the means of mutual communication and interaction regarding significant decisions

815 concerning Project operation and management on a 

816 real-time basis.

817 (c) In light of the factors referred to in subdivision (b) of Article 3 of this Contract, it is

818 the intent of the Secretary to improve water supply reliability. To carry out this intent:

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

820 development of integrated resource management plans for the Contractor. Further, the Contracting Officer

821 will, as appropriate, seek authorizations for implementation of partnerships to improve water supply, water

822 quality, and reliability.

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

824 implementation and authorization in coordination with Project Contractors to improve the water supply,
Contract No. 14-06-200-5904-LTR1

43

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

826 (3) The Secretary will coordinate with Project Contractors and the State of

827 California to seek improved water resource management.

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

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

830 (5) The Contracting Officer shall periodically, but not less than annually, hold

831 division level meetings to discuss Project operations, division level water management activities, and other

832 issues as appropriate.

833 (d) Without limiting the contractual obligations of the Contracting Officer hereunder,

834 nothing in this Contract shall be construed to limit or constrain the Contracting Officer’s ability to

835 communicate, coordinate, and cooperate with the Contractor or other interested stakeholders or to make

836 decisions in a timely fashion as needed to protect health, safety, physical integrity of structures or facilities, or

837 the Contracting Officer’s ability to comply with applicable laws.

838 CHARGES FOR DELINQUENT PAYMENTS

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

840 delinquent installments or payments. When a payment is not received by the due date, the Contractor shall

841 pay an interest charge for each day the payment is delinquent beyond the due date. When a payment

842 becomes sixty (60) days delinquent, the Contractor shall pay an administrative charge to cover additional

843 costs of billing and processing the delinquent payment. When a payment is delinquent ninety (90) days or

844 more, the Contractor shall pay an additional penalty charge of six (6%) percent per year for each day the

845 payment is delinquent beyond the due date. Further, the Contractor shall pay any fees incurred for debt

846 collection services associated with a delinquent payment.

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

848 Federal Register by the Department of the Treasury for application to overdue payments, or the interest rate
Contract No. 14-06-200-5904-LTR1

44

849 of one-half of one (0.5%) percent per month prescribed by Section 6 of the Reclamation Project Act of

850 1939 (Public Law 76-260). The interest charge rate shall be determined as of the due date and remain

851 fixed for the duration of the delinquent period.

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

853 shall be applied, first to the penalty, second to the administrative charges, third to the accrued interest, and

854 finally to the overdue payment.

855 EQUAL OPPORTUNITY

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

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

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

859 action to ensure that applicants are employed, and that employees are treated during employment, without

860 regard to their race, color, religion, sex, or national origin. Such action shall include, but not be limited to,

861 the following: Employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff

862 or termination, rates of payment or other forms of compensation; and selection for training, including

863 apprenticeship. The Contractor agrees to post in conspicuous places, available to employees and applicants

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

865 nondiscrimination clause.

866 (b) The Contractor will, in all solicitations or advertisements for employees placed by or

867 on behalf of the Contractor, state that all qualified applicants will receive consideration for employment

868 without discrimination because of race, color, religion, sex, or national origin.

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

870 which it has a collective bargaining agreement or other contract or understanding, a notice, to be provided

871 by the Contracting Officer, advising the said labor union or workers' representative of the Contractor's

872 commitments under Section 202 of Executive Order 11246 of September 24, 1965, and shall post copies

873 of the notice in conspicuous places available to employees and applicants for employment.

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

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

876 Secretary of Labor. 

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

878 Executive Order and by the rules, regulations, and orders of the Secretary of Labor, or pursuant thereto,

879 and will permit access to its books, records, and accounts by the Contracting Officer and the Secretary of

880 Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders.
Contract No. 14-06-200-5904-LTR1

45

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

882 this Contract or with any of the said rules, regulations, or orders, this Contract may be canceled, terminated,

883 or suspended, in whole or in part, and the Contractor may be declared ineligible for further Government

884 contracts in accordance with procedures authorized in said amended Executive Order, and such other

885 sanctions may be imposed and remedies invoked as provided in said Executive Order, or by rule, regulation,

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

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

888 subcontract or purchase order unless exempted by the rules, regulations, or orders of the Secretary of

889 Labor issued pursuant to Section 204 of said amended Executive Order, so that such provisions will be

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

891 subcontract or purchase order as may be directed by the Secretary of Labor as a means of enforcing such

892 provisions, including sanctions for noncompliance: Provided, however, That in the event the Contractor

893 becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such

894 direction, the Contractor may request the United States to enter into such litigation to protect the interests of

895 the United States.

896 GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT

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

898 Contract is a general obligation of the Contractor notwithstanding the manner in which the obligation may be

899 distributed among the Contractor's water users and notwithstanding the default of individual water users in

900 their obligations to the Contractor.

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

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

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

904 payment of water rates due the United States. The Contractor shall not furnish water made available

905 pursuant to this Contract for lands or parties which are in arrears in the advance payment of water rates

906 levied or established by the Contractor.

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

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

909 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

910 23. (a) The Contractor shall comply with Title VI of the Civil Rights Act of 1964 (42

911 U.S.C. 2000d), Section 504 of the Rehabilitation Act of 1975 (P.L. 93-112, as amended), the Age
Contract No. 14-06-200-5904-LTR1

46

912 Discrimination Act of 1975 (42 U.S.C. 6101, et seq.) and any other applicable civil rights laws, as well as

913 with their respective implementing regulations and guidelines imposed by the U.S. Department of the Interior

914 and/or Bureau of Reclamation.

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

916 race, color, national origin, handicap, or age, be excluded from participation in, be denied the benefits of, or

917 be otherwise subjected to discrimination under any program or activity receiving financial assistance from the

918 Bureau of Reclamation. By executing this Contract, the Contractor agrees to immediately take any

919 measures necessary to implement this obligation, including permitting officials of the United States to inspect

920 premises, programs, and documents.

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

922 obtaining any and all Federal grants, loans, contracts, property discounts, or other Federal financial

923 assistance extended after the date hereof to the Contractor by the Bureau of Reclamation, including

924 installment payments after such date on account of arrangements for Federal financial assistance which were

925 approved before such date. The Contractor recognizes and agrees that such Federal assistance will be

926 extended in reliance on the representations and agreements made in this Article, and that the United States

927 reserves the right to seek judicial enforcement thereof.

928 PRIVACY ACT COMPLIANCE

929 24. Omitted.

930 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

931 25. In addition to all other payments to be made by the Contractor pursuant to this Contract, the

932 Contractor shall pay to the United States, within sixty (60) days after receipt of a bill and detailed statement

933 submitted by the Contracting Officer to the Contractor for such specific items of direct cost incurred by the

934 United States for work requested by the Contractor associated with this Contract plus indirect costs in

935 accordance with applicable Bureau of Reclamation policies and procedures. All such amounts referred to in

936 this Article shall not exceed the amount agreed to in

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

938 administration.
Contract No. 14-06-200-5904-LTR1

47

939 WATER CONSERVATION

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

941 constructed or Federally financed facilities pursuant to this Contract, the Contractor shall be implementing an

942 effective water conservation and efficiency program based on the Contractor's water conservation plan that

943 has been determined by the Contracting Officer to meet the conservation and efficiency criteria for

944 evaluating water conservation plans established under Federal law. The water conservation and efficiency

945 program shall contain definite water conservation objectives, appropriate economically feasible water

946 conservation measures, and time schedules for meeting those objectives. Continued Project Water delivery

947 pursuant to this Contract shall be contingent upon the Contractor’s continued implementation of such water

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

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

950 determined by the Contracting Officer to meet such criteria, due to circumstances which the Contracting

951 Officer determines are beyond the control of the Contractor, water deliveries shall be made under this

952 Contract so long as the Contractor diligently works with the Contracting Officer to obtain such

953 determination at the earliest practicable date, and thereafter the Contractor immediately begins implementing

954 its water conservation and efficiency program in accordance with the time schedules therein.

955 (b) Should the amount of M&I Water delivered pursuant to subdivision (a) of Article 3

956 of this Contract equal or exceed two thousand (2,000) acre-feet per Year, the Contractor shall implement

957 the Best Management Practices identified by the time frames issued by the California Urban Water

958 Conservation Council for such M&I Water unless any such practice is determined by the Contracting

959 Officer to be inappropriate for the Contractor. 
Contract No. 14-06-200-5904-LTR1

48

960 (c) The Contractor shall submit to the Contracting Officer a report on the status of its

961 implementation of the water conservation plan on the reporting dates specified in the then existing

962 conservation and efficiency criteria established under Federal law. 

963 (d) At five (5) -year intervals, the Contractor shall revise its water conservation plan to

964 reflect the then current conservation and efficiency criteria for evaluating water conservation plans

965 established under Federal law and submit such revised water management plan to the Contracting Officer

966 for review and evaluation. The Contracting Officer will then determine if the water conservation plan meets

967 Reclamation’s then current conservation and efficiency criteria for evaluating water conservation plans

968 established under Federal law. 

969 (e) If the Contractor is engaged in direct groundwater recharge, such activity shall be

970 described in the Contractor’s water conservation plan.

971 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

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

973 shall not be applicable to or affect non-project water or water rights now owned or hereafter acquired by

974 the Contractor or any user of such water within the Contractor's Service Area. Any such water shall not be

975 considered Project Water under this Contract. In addition, this Contract shall not be construed as limiting or

976 curtailing any rights which the Contractor or any water user within the Contractor's Service Area acquires or

977 has available under any other contract pursuant to Federal Reclamation law.

978 OPERATION AND MAINTENANCE BY NON-FEDERAL ENTITY

979 28. (a) The Operation and Maintenance of a portion of the Project facilities which serve the
Contract No. 14-06-200-5904-LTR1

49

980 Contractor, and responsibility for funding a portion of the costs of such Operation and Maintenance, have

981 been transferred to the Operating Non-Federal Entity by separate agreement 

982 between the United States and the Operating Non-Federal Entity. That separate agreement shall not

983 interfere with or affect the rights or obligations of the Contractor or the United States hereunder.

984 (b) The Contracting Officer has previously notified the Contractor in writing that the

985 Operation and Maintenance of a portion of the Project facilities which serve the Contractor has been

986 transferred to the Operating Non-Federal Entity, and therefore, the Contractor shall pay directly to the

987 Operating Non-Federal Entity, or to any successor approved by the Contracting Officer under the terms

988 and conditions of the separate agreement between the United States and the Operating Non-Federal Entity

989 described in subdivision (a) of this Article, all rates, charges or assessments of any kind, including any

990 assessment for reserve funds, which the Operating Non-Federal Entity or such successor determines, sets or

991 establishes for (i) the Operation and Maintenance of the portion of the Project facilities operated and

992 maintained by the Operating Non-Federal Entity or such successor, or (ii) the Friant Division’s share of the

993 operation, maintenance and replacement costs for physical works and appurtenances associated with the

994 Tracy Pumping Plant, the Delta-Mendota Canal, the O'Neill Pumping/Generating Plant, the federal share of

995 the O'Neill Forebay, the Mendota Pool, and the federal share of San Luis Unit joint use conveyance and

996 conveyance pumping facilities. Such direct payments to the Operating Non-Federal Entity or such

997 successor shall not relieve the Contractor of its obligation to pay directly to the United States the

998 Contractor’s share of the Project Rates, Charges, and Tiered Pricing Components except to the extent the

999 Operating Non-Federal Entity collects payments on behalf of the United States in accordance with the
Contract No. 14-06-200-5904-LTR1

50

1000 separate agreement identified in subdivision (a) of this Article.

1001 (c) For so long as the Operation and Maintenance of any portion of the Project facilities

1002 serving the Contractor is performed by the Operating Non-Federal Entity, or any successor thereto, the

1003 Contracting Officer shall adjust those components of the Rates for Water Delivered under this Contract

1004 representing the cost associated with the activity being performed by the Operating Non-Federal Entity or

1005 its successor.

1006 (d) In the event the Operation and Maintenance of the Project facilities operated and

1007 maintained by the Operating Non-Federal Entity is re-assumed by the United States during the term of this

1008 Contract, the Contracting Officer shall so notify the Contractor, in writing, and present to the Contractor a

1009 revised Exhibit “B” which shall include the portion of the Rates to be paid by the Contractor for Project

1010 Water under this Contract representing the Operation and Maintenance costs of the portion of such Project

1011 facilities which have been re-assumed. The Contractor shall, thereafter, in the absence of written notification

1012 from the Contracting Officer to the contrary, pay the Rates, Charges, and Tiered Pricing Component(s)

1013 specified in the revised Exhibit “B” directly to the United States in compliance with Article 7 of this Contract.

1014 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

1015 29. The expenditure or advance of any money or the performance of any obligation of the

1016 United States under this Contract shall be contingent upon appropriation or allotment of funds. Absence of

1017 appropriation or allotment of funds shall not relieve the Contractor from any obligations under this Contract. 

1018 No liability shall accrue to the United States in case funds are not appropriated or allotted.

1019 BOOKS, RECORDS, AND REPORTS
Contract No. 14-06-200-5904-LTR1

51

1020 30. (a) The Contractor shall establish and maintain accounts and other books and records

1021 pertaining to administration of the terms and conditions of this Contract, including: the Contractor's financial

1022 transactions, water supply data, and Project land and right-of-way agreements; water use data; and other

1023 matters that the Contracting Officer may require. Reports thereon shall be furnished to the Contracting

1024 Officer in such form and on such date or dates as the Contracting Officer may require. Subject to

1025 applicable Federal laws and regulations, each party to this Contract shall have the right during office hours to

1026 examine and make copies of the other party's books and records relating to matters covered by this

1027 Contract.

1028 (b) Notwithstanding the provisions of subdivision (a) of this Article, no books, records,

1029 or other information shall be requested from the Contractor by the Contracting Officer unless such books,

1030 records, or information are reasonably related to the administration or performance of this Contract. Any

1031 such request shall allow the Contractor a reasonable period of time within which to provide the requested

1032 books, records, or information.

1033 (c) At such time as the Contractor provides information to the Contracting Officer

1034 pursuant to subdivision (a) of this Article, a copy of such information shall be provided to the Operating

1035 Non-Federal Entity.

1036 ASSIGNMENT LIMITED--SUCCESSORS AND ASSIGNS OBLIGATED

1037 31. (a) The provisions of this Contract shall apply to and bind the successors and assigns of

1038 the parties hereto, but no assignment or transfer of this Contract or any right or interest therein shall be valid

1039 until approved in writing by the Contracting Officer.

1040 (b) The assignment of any right or interest in this Contract by either party shall not

1041 interfere with the rights or obligations of the other party to this Contract absent the written concurrence of

1042 said other party.

1043 (c) The Contracting Officer shall not unreasonably condition or withhold approval of

1044 any proposed assignment.
Contract No. 14-06-200-5904-LTR1

52

1045 SEVERABILITY

1046 32. In the event that a person or entity who is neither (i) a party to a Project contract, nor (ii) a

1047 person or entity that receives Project Water from a party to a Project contract, nor (iii) an association or

1048 other form of organization whose primary function is to represent parties to Project contracts, brings an

1049 action in a court of competent jurisdiction challenging the legality or enforceability of a provision included in

1050 this Contract and said person, entity, association, or organization obtains a final court decision holding that

1051 such provision is legally invalid or unenforceable and the Contractor has not intervened in that lawsuit in

1052 support of the plaintiff(s), the parties to this Contract shall use their best efforts to (i) within thirty (30) days

1053 of the date of such final court decision identify by mutual agreement the provisions in this Contract which

1054 must be revised and (ii) within three (3) months thereafter promptly agree on the appropriate revision(s). 

1055 The time periods specified above may be extended by mutual agreement of the parties. Pending the

1056 completion of the actions designated above, to the extent it can do so without violating any applicable

1057 provisions of law, the United States shall continue to make the quantities of Project Water specified in this

1058 Contract available to the Contractor pursuant to the provisions of this Contract which were not found to be

1059 legally invalid or unenforceable in the final court decision.

1060 RESOLUTION OF DISPUTES

1061 33. Should any dispute arise concerning any provisions of this Contract, or the parties’ rights

1062 and obligations thereunder, the parties shall meet and confer in an attempt to resolve the dispute. Prior to

1063 the Contractor commencing any legal action, or the Contracting Officer referring any matter to Department

1064 of Justice, the party shall provide to the other party thirty (30) days’ written notice of the intent to take such
Contract No. 14-06-200-5904-LTR1

53

1065 action; Provided, That such notice shall not be required where a delay in commencing an action would

1066 prejudice the interests of the party that intends to file suit. During the thirty (30) -day notice period, the

1067 Contractor and the Contracting Officer shall meet and confer in 

1068 an attempt to resolve the dispute. Except as specifically provided, nothing herein is intended to waive or

1069 abridge any right or remedy that the Contractor or the United States may have.

1070 OFFICIALS NOT TO BENEFIT

1071 34. No Member of or Delegate to Congress, Resident Commissioner, or official of the

1072 Contractor shall benefit from this Contract other than as a water user or landowner in the same manner as

1073 other water users or landowners.

1074 CHANGES IN CONTRACTOR’S SERVICE AREA

1075 35. (a) While this Contract is in effect, no change may be made in the Contractor's Service

1076 Area or boundaries, by inclusion or exclusion of lands, dissolution, consolidation, merger, or otherwise,

1077 except upon the Contracting Officer's written consent.

1078 (b) Within thirty (30) days of receipt of a request for such a change, the Contracting

1079 Officer will notify the Contractor of any additional information required by the Contracting Officer for

1080 processing said request, and both parties will meet to establish a mutually agreeable schedule for timely

1081 completion of the process. Such process will analyze whether the proposed change is likely to: (i) result in

1082 the use of Project Water contrary to the terms of this Contract; (ii) impair the ability of the Contractor to pay

1083 for Project Water furnished under this Contract or to pay for any Federally-constructed facilities for which

1084 the Contractor is responsible; and (iii) have an impact on any Project Water rights applications, permits, or

1085 licenses. In addition, the Contracting Officer shall comply with the National Environmental Policy Act and
Contract No. 14-06-200-5904-LTR1

54

1086 the Endangered Species Act. The Contractor will be responsible for all costs incurred by the Contracting

1087 Officer in this process, and such costs will be paid in accordance with Article 25 of this Contract.

1088

1089 FEDERAL LAWS

1090 36. By entering into this Contract, the Contractor does not waive its rights to contest the validity

1091 or application in connection with the performance of the terms and conditions of this Contract of any Federal

1092 law or regulation; Provided, That the Contractor agrees to comply with the terms and conditions of this

1093 Contract unless and until relief from application of such Federal law or regulation to the implementing

1094 provision of the Contract is granted by a court of competent jurisdiction.

1095 NOTICES

1096 37. Any notice, demand, or request authorized or required by this Contract shall be deemed to

1097 have been given, on behalf of the Contractor, when mailed, postage prepaid, or delivered to the Area

1098 Manager, South-Central California Area Office, 1243 “N” Street, Fresno, California 93721, and on behalf

1099 of the United States, when mailed, postage prepaid, or delivered to the Board of Directors of the Fresno

1100 County Waterworks District No. 18, PO Box 92, Friant, California 93626. The designation of the

1101 addressee or the address may be changed by notice given in the same manner as provided in this Article for

1102 other notices.

1103 CONFIRMATION OF CONTRACT

1104 38. The Contractor, after the execution of this Contract, shall promptly seek to secure a decree

1105 of a court of competent jurisdiction of the State of California, confirming the execution of this Contract. The

1106 Contractor shall furnish the United States a certified copy of the final decree, the validation proceedings, and

1107 all pertinent supporting records of the court approving and confirming this Contract, and decreeing and

1108 adjudging it to be lawful, valid, and binding on the Contractor.
Contract No. 14-06-200-5904-LTR1

55

1109 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of the day and 

1110 year first above written.

THE UNITED STATES OF AMERICA

By: /s/ William H. Luce, Jr. 

Acting Regional Director, Mid-Pacific Region

Bureau of Reclamation

(SEAL)

FRESNO COUNTY WATER WORKS 

DISTRICT NO. 18

By: /s/ Dan Pearce 

President of the Board of Directors

Attest:

By: /s/ Georgie Betitor 

Secretary of the Board of Directors

(I:Fres18.wpd)
Contract No. 14-06-200-5904-LTR1

EXHIBIT A

[Map or Description of Service Area]
Contract No. 14-06-200-5904-LTR1

EXHIBIT B

[Initial Rates and Charges]