AG and M&I 

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

Kirkwood WD Draft 7/22-2003 

Kirkwood WD Draft 6/26-2003 

Kirkwood WD Draft 6/25-2003 

R.O. Final CVP-Wide 6/10-2003 

Sac.Valley Division Draft 5/28-2003 

CVP-Wide Draft 5/23-2003 

Contract No. 

 7-07-20-W0056-LTR1 

UNITED STATES 

DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

Central Valley Project, California 

LONG-TERM RENEWAL CONTRACT BETWEEN THE UNITED STATES 

AND

KIRKWOOD WATER DISTRICT

PROVIDING FOR PROJECT WATER SERVICE

FROM THE SACRAMENTO RIVER DIVISION

Table of Contents

Article No. Title Page No.

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

 Explanatory Recitals ............................................................................................ 2-4 

 1 Definitions............................................................................................................ 4-7 

 2 Term of Contract................................................................................................8-11

 3 Water to be Made Available and Delivered to the Contractor.........................11-14 

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

 5 Point of Diversion and Responsibility for Distribution of Water....................15-17 

 6 Measurement of Water Within the Contractor’s Boundaries ..........................17-18 

 7 Rates and Method of Payment for Water.........................................................18-24 

 8 Non-Interest Bearing Operation and Maintenance Deficits.................................. 24 

 9 Sales, Transfers, or Exchanges of Water .........................................................25-26 

 10 Application of Payments and Adjustments......................................................26-27 

 11 Temporary Reductions--Return Flows ............................................................27-28 

 12 Constraints on the Availability of Water .............................................................. 28 

 13 Unavoidable Groundwater Percolation................................................................. 29 

 14 Rules and Regulations........................................................................................... 29 

 15 Water and Air Pollution Control........................................................................... 29 

 16 Quality of Water .............................................................................................. 29-30 

 17 Water Acquired by the Contractor Other Than From the United States..........30-32 

 18 Opinions and Determinations ..........................................................................32-33 

 19 Coordination and Cooperation.........................................................................33-34 

 20 Charges for Delinquent Payments ...................................................................34-45 
Contract No. 7-07-20-W0056-LTR1 

Table of Contents - continued

Article No. Title Page No.

 21 Equal Opportunity............................................................................................35-36 

 22 General Obligation--Benefits Conditioned Upon Payment .................................. 36 

 23 Compliance With Civil Rights Laws and Regulations ....................................36-37 

 24 Privacy Act Compliance ....................................................................................... 37 

 25 Contractor to Pay Certain Miscellaneous Costs.................................................... 38 

 26 Water Conservation .........................................................................................38-39 

 27 Existing or Acquired Water or Water Rights........................................................ 39 

 28 Operation and Maintenance by Operating Non-Federal Entity .......................40-41 

 29 Contingent on Appropriation or Allotment of Funds ........................................... 41 

 30 Books, Records, and Reports........................................................................... 41-42 

 31 Assignment Limited--Successors and Assigns Obligated .................................... 42 

 32 Severability ......................................................................................................42-43 

 33 Resolution of Disputes.......................................................................................... 43 

 34 Officials Not to Benefit......................................................................................... 43 

 35 Changes in Contractor’s Boundaries ...............................................................43-44 

 36 Federal Laws......................................................................................................... 44 

 37 Notices .................................................................................................................. 44

 38 Confirmation of Contract...................................................................................... 44 

 Signature Page ...................................................................................................... 45 

 Exhibit A - Map of Contractor's Boundaries 

 Exhibit B - Rates and Charges 
AG and M&I 

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

Kirkwood WD Draft 7/22-2003 

Kirkwood WD Draft 6/26-2003 

Kirkwood WD Draft 6/25-2003 

R.O. Final CVP-Wide 6/10-2003 

Sac.Valley Division Draft 5/28-2003 

CVP-Wide Draft 5/23-2003 

Contract No. 

 7-07-20-W0056-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 KIRKWOOD WATER DISTRICT

8 PROVIDING FOR PROJECT WATER SERVICE

9 FROM THE SACRAMENTO RIVER DIVISION

10 

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

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

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

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

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

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

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

18 OF AMERICA, hereinafter referred to as the United States, and KIRKWOOD WATER DISTRICT, 

19 hereinafter referred to as the Contractor, a public agency of the State of California, duly organized, 

20 existing, and acting pursuant to the laws thereof; 

21 WITNESSETH, That:
Contract No. 7-07-20-W0056-LTR1 

2

22 EXPLANATORY RECITALS

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

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

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

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

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

28 and the San Joaquin River and their tributaries; and 

 [2nd 29 ] WHEREAS, the United States constructed the Red Bluff Diversion Dam, and the 

30 Tehama-Colusa Canal and related delivery facilities including pumping plants, hereinafter 

31 collectively referred to as the Canal Facilities, which will be used in part for the furnishing of 

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

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

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

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

36 No. 7-07-20-W0056, which established terms for the delivery to the Contractor of Project Water 

37 from the Canal Facilities from July 11, 1977, through February 28, 1995, and under which the 

38 initial date of water delivery to the Contractor was January 1, 1981; and 

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

40 3404(c)(1) of the Central Valley Project Improvement Act (CVPIA), subsequently entered into 

41 interim renewal contract(s) identified as Contract No(s). 7-07-20-W0056-IR1, 7-07-20-W0056-

42 IR2, 7-07-20-W0056-IR3, 7-07-20-W0056-IR4, 7-07-20-W0056-IR5, 7-07-20-W0056-IR6, 

43 7-07-20-W0056-IR7, and 7-07-20-W0056-IR8, the current of which is hereinafter referred to as 

44 the Existing Contract, which provided for the continued water service to the Contractor from 

45 March 1, 2004, through February 28, 2006; and 

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

47 Existing Contract following completion of appropriate environmental documentation, including a 
Contract No. 7-07-20-W0056-LTR1 

3

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

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

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

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

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

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

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

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

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

57 of its obligations under the Existing Contract; and 

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

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

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

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

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

 [11th 63 ] WHEREAS, water obtained from the Project has been relied upon by urban and 

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

65 as an essential portion of its water supply; and 

 [12th 66 ] WHEREAS, the economies of regions within the Project, including the 

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

68 Project; and 

 [13th 69 ] WHEREAS, the Secretary intends through coordination, cooperation, and 

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

71 Project for all Project purposes; and 

 [14th 72 ] WHEREAS, the mutual goals of the United States and the Contractor include: to 

73 provide for reliable Project Water supplies; to control costs of those supplies; to achieve 
Contract No. 7-07-20-W0056-LTR1 

4

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

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

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

77 of the United States relative to the Project; and 

 [15th 78 ] WHEREAS, the parties intend by this Contract to develop a more cooperative 

79 relationship in order to achieve their mutual goals; and 

 [16th 80 ] WHEREAS, the United States and the Contractor are willing to enter into this 

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

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

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

84 DEFINITIONS

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

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

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

88 both dates inclusive; 

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

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

91 annually by the Contracting Officer pursuant to this Contract; 

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

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

94 Contract Total; 

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

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

97 or regulation; 

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

99 Contractor is entitled under subdivision (a) of Article 3 of this Contract; 
Contract No. 7-07-20-W0056-LTR1 

5

100 (f) “Contractor’s Boundaries” shall mean the area to which the Contractor is 

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

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

103 without amendment of this Contract; 

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

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

106 (h) “Eligible Lands” shall mean all lands to which Irrigation Water may be 

107 delivered in accordance with Section 204 of the Reclamation Reform Act of October 12, 1982 

108 (96 Stat. 1263), as amended, hereinafter referred to as RRA; 

109 (i) “Excess Lands” shall mean all lands in excess of the limitations contained 

110 in Section 204 of the RRA, other than those lands exempt from acreage limitation under Federal 

111 Reclamation law; 

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

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

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

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

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

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

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

119 in accordance with subsections 202(3)(B) and (3)(C) of the RRA. The Full Cost Rate includes 

120 actual operation, maintenance, and replacement costs consistent with Section 426.2 of the Rules 

121 and Regulations for the RRA; 

122 (k) “Ineligible Lands” shall mean all lands to which Irrigation Water may not 

123 be delivered in accordance with Section 204 of the RRA; 

124 (l) “Irrigation Full Cost Water Rate” shall mean the Full Cost Rate applicable 

125 to the delivery of Irrigation Water; 
Contract No. 7-07-20-W0056-LTR1 

6

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

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

128 incidental thereto, and watering of livestock; 

129 (n) “Landholder” shall mean a party that directly or indirectly owns or leases 

130 nonexempt land, as provided in 43 CFR 426.2; 

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

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

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

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

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

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

137 this Article; 

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

139 the delivery of M&I Water; 

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

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

142 maintenance of Project facilities; 

143 (r) “Operating Non-Federal Entity” shall mean the Tehama-Colusa Canal 

144 Authority, its successors or assigns, a non-Federal entity which has the obligation to operate and 

145 maintain all or a portion of the Canal Facilities pursuant to an agreement with the United States, 

146 and which may have funding obligations with respect thereto; 

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

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

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

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

151 Reclamation law; 
Contract No. 7-07-20-W0056-LTR1 

7

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

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

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

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

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

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

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

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

160 preceding contract(s); 

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

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

163 through any agency of the Department of the Interior; 

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

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

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

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

168 Officer; 

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

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

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

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

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

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

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

176 Calendar Year through the last day of February of the following Calendar Year. 
Contract No. 7-07-20-W0056-LTR1 

8

177 TERM OF CONTRACT 

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

179 20___, and supercedes the Existing Contract. In the event the Contractor wishes to renew this 

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

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

182 renewal of this Contract insofar as it pertains to the furnishing of Irrigation Water to the 

183 Contractor shall be governed by subdivision (b) of this Article, and the renewal of this Contract 

184 insofar as it pertains to the furnishing of M&I Water to the Contractor shall be governed by 

185 subdivision (c) of this Article. 

186 (b) (1) Under terms and conditions of a renewal contract that are mutually 

187 agreeable to the parties hereto, and upon a determination by the Contracting Officer that at the 

188 time of contract renewal the conditions set forth in subdivision (b)(2) of this Article are met, and 

189 subject to Federal and State law, this Contract, insofar as it pertains to the furnishing of Irrigation 

190 Water to the Contractor, shall be renewed for a period of 25 years. 

191 (2) The conditions which must be met for this Contract to be renewed 

192 are: (i) the Contractor has prepared a water conservation plan that has been determined by the 

193 Contracting Officer in accordance with Article 26 of this Contract to meet the conservation and 

194 efficiency criteria for evaluating such plans established under Federal law; (ii) the Contractor is 

195 implementing an effective water conservation and efficiency program based on the Contractor’s 

196 water conservation plan as required by Article 26 of this Contract; (iii) the Contractor is 

197 maintaining all water measuring devices and implementing all water measurement methods as 

198 approved by the Contracting Officer pursuant to Article 6 of this Contract; (iv) the Contractor 

199 has reasonably and beneficially used the Project Water supplies made available to it and, based 

200 on projected demands, is reasonably anticipated and expects to fully utilize for reasonable and 

201 beneficial use the quantity of Project Water to be made available to it pursuant to such renewal; 
Contract No. 7-07-20-W0056-LTR1 

9

202 (v) the Contractor is complying with all terms and conditions of this Contract; and (vi) the 

203 Contractor has the physical and legal ability to deliver Project Water. 

204 (3) The terms and conditions of the renewal contract described in 

205 subdivision (b)(1) of this Article and any subsequent renewal contracts shall be developed 

206 consistent with the parties’ respective legal rights and obligations, and in consideration of all 

207 relevant facts and circumstances, as those circumstances exist at the time of renewal, including, 

208 without limitation, the Contractor’s need for continued delivery of Project Water; environmental 

209 conditions affected by implementation of the Contract to be renewed, and specifically changes in 

210 those conditions that occurred during the life of the Contract to be renewed; the Secretary’s 

211 progress toward achieving the purposes of the CVPIA as set out in Section 3402 and in 

212 implementing the specific provisions of the CVPIA; and current and anticipated economic 

213 circumstances of the region served by the Contractor. 

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

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

216 be consistent with then-existing Reclamation-wide policy, under terms and conditions mutually 

217 agreeable to the parties and consistent with Federal and State law. The Contractor shall be 

218 afforded the opportunity to comment to the Contracting Officer on the proposed adoption and 

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

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

221 less than 40 years. 

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

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

224 Contract, of whether a conversion of the relevant portion of this Contract to a contract under 

225 subsection 9(d) of the Reclamation Project Act of 1939 can be accomplished pursuant to the Act 

226 of July 2, 1956 (70 Stat. 483). The Contracting Officer shall also make a determination ten years 

227 after the date of execution of this Contract and every five years thereafter during the term of this 
Contract No. 7-07-20-W0056-LTR1 

10

228 Contract of whether a conversion of the relevant portion of this Contract to a contract under 

229 subsection 9(c)(1) of the Reclamation Project Act of 1939 can be accomplished. 

230 Notwithstanding any provision of this Contract, the Contractor reserves and shall have all rights 

231 and benefits under Act of July 2, 1956 (70 Stat. 483). The Contracting Officer anticipates that 

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

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

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

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

236 Contract shall, at the request of the Contractor, be converted to a contract under subsection 9(d) 

237 or 9(c)(1), whichever is applicable, of the Reclamation Project Act of 1939, subject to applicable 

238 Federal law and under stated terms and conditions mutually agreeable to the Contractor and the 

239 Contracting Officer. A condition for such conversion to occur shall be a determination by the 

240 Contracting Officer that, account being taken of the amount credited to return by the Contractor 

241 as provided for under Federal Reclamation law, the remaining amount of construction costs 

242 assignable for ultimate return by the Contractor can probably be repaid to the United States 

243 within the term of a contract under subsection 9(d) or 9(c)(1), whichever is applicable. If the 

244 remaining amount of costs that are properly assignable to the Contractor cannot be determined 

245 during the term of this Contract, the Contracting Officer shall notify the Contractor, and provide 

246 the reason(s) why such a determination could not be made. Further, the Contracting Officer shall 

247 make such a determination as soon thereafter as possible so as to permit, upon request of the 

248 Contractor and satisfaction of the condition set out above, conversion to a contract under 

249 subsection 9(d) or 9(c)(1), whichever is applicable. In the event such determination of costs has 

250 not been made at a time which allows conversion of this Contract during the term of this 

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

252 parties shall incorporate in any subsequent renewal contract as described in subdivision (b) of 
Contract No. 7-07-20-W0056-LTR1 

11

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

254 subdivision. 

255 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE CONTRACTOR

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

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

258 this Contract, the Contracting Officer shall make available for delivery to the Contractor 2,100 

259 acre-feet of Project Water for irrigation and M&I purposes. Water Delivered to the Contractor in 

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

261 Articles 4 and 7 of this Contract. 

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

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

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

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

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

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

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

269 water made available to the Contractor was 1,932 acre-feet. Nothing in subdivision (b) of this 

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

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

272 applicable legal requirements. 

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

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

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

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

277 within the Contractor’s Boundaries which are consistent with applicable State law and result in 

278 use consistent with Federal Reclamation law will be allowed; Provided, That any direct recharge 
Contract No. 7-07-20-W0056-LTR1 

12

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

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

281 sufficient lawful uses exist in the Contractor’s Boundaries so that using a long-term average, the 

282 quantity of Delivered Water is demonstrated to be reasonable for such uses and in compliance 

283 with Federal Reclamation law. Ground-water recharge programs, ground-water banking 

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

285 other water furnished pursuant to this Contract conducted outside the Contractor’s Boundaries 

286 may be permitted upon written approval of the Contracting Officer, which approval will be based 

287 upon environmental documentation, Project Water rights, and Project operational concerns. The 

288 Contracting Officer will address such concerns in regulations, policies, or guidelines. 

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

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

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

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

293 Contract, which evidences in excess of 22 years of diversions for irrigation and/or M&I purposes 

294 of the quantities of water provided in subdivision (a) of Article 3 of this Contract, will be 

295 considered in developing an appropriate baseline for biological assessment(s) prepared pursuant 

296 to the ESA, and any other needed environmental review. Nothing herein shall be construed to 

297 prevent the Contractor from challenging or seeking judicial relief in a court of competent 

298 jurisdiction with respect to any biological opinion or other environmental documentation referred 

299 to in this Article. 

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

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

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

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

304 impacting other Project Contractors. At the request of the Contractor, the Contracting Officer 
Contract No. 7-07-20-W0056-LTR1 

13

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

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

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

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

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

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

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

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

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

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

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

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

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

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

319 guidelines, and policies. 

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

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

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

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

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

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

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

327 contracts. 

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

329 delivered for other than irrigation or M&I purposes upon written approval by the Contracting 

330 Officer in accordance with the terms and conditions of such approval. 
Contract No. 7-07-20-W0056-LTR1 

14

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

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

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

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

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

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

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

338 Contract to use Project Water. 

339 TIME FOR DELIVERY OF WATER

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

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

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

343 Historic Average and will be updated monthly, and more frequently if necessary, based on then344 current operational and hydrologic conditions and a new declaration with changes, if any, to the 

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

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

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

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

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

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

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

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

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

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

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

356 of Project Water the Contractor intends to put to reasonable and beneficial use within the 
Contract No. 7-07-20-W0056-LTR1 

15

357 Contractor’s Boundaries or to sell, transfer, or exchange pursuant to Article 9 of this Contract 

358 during any Year. 

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

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

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

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

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

364 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

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

366 Contract shall be delivered to the Contractor at approved turnouts on the Canal Facilities and any 

367 additional point or points of delivery either on Project facilities or another location or locations 

368 mutually agreed to in writing by the Contracting Officer and the Contractor. The United States 

369 shall furnish such power as may be necessary to pump Project Water at the existing Tehama370 Colusa Canal side pumping plants and at existing relift stations at heads and elevations sufficient 

371 to irrigate by gravity all areas within the Contractor’s Boundaries below elevation 380 (MSL). 

372 (b) The Contracting Officer, either directly or through its written agreement(s) 

373 with the Operating Non-Federal Entity/Entities shall make all reasonable efforts to maintain 

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

375 Contractor at specific turnouts established pursuant to subdivision (a) of this Article. The parties 

376 acknowledge that it may be necessary from time to time to shut down some or all of Canal 

377 Facilities for maintenance or emergencies. Except in the case of emergency, the Contracting 

378 Officer shall consult with the Contractor to schedule the shut down at such times and for such 

379 duration as will allow for the work to be accomplished completely and efficiently, and with a 

380 minimum of disruption of water service to the Contractor. In this regard, shut downs will, to the 

381 extent reasonably possible, be limited to the months of December and January. 
Contract No. 7-07-20-W0056-LTR1 

16

382 (c) The Contractor shall deliver Irrigation Water in accordance with any 

383 applicable land classification provisions of Federal Reclamation law and the associated 

384 regulations. The Contractor shall not deliver Project Water to land outside the Contractor’s 

385 Boundaries unless approved in advance by the Contracting Officer. 

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

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

388 United States or the Operating Non-Federal Entity/Entities at the point or points of delivery 

389 established pursuant to subdivision (a) of this Article. Upon the request of either party to this 

390 Contract, the Contracting Officer shall investigate, or cause to be investigated by the responsible 

391 Operating Non-Federal Entity/Entities, the accuracy of such measurements and shall take any 

392 necessary steps to adjust any errors appearing therein. For any period of time when accurate 

393 measurements have not been made, the Contracting Officer shall consult with the Contractor and 

394 the responsible Operating Non-Federal Entity/Entities prior to making a final determination of 

395 the quantity delivered for that period of time. 

396 (e) Neither the Contracting Officer nor any Operating Non-Federal 

397 Entity/Entities shall be responsible for the control, carriage, handling, use, disposal, or 

398 distribution of Water Delivered to the Contractor pursuant to this Contract beyond the delivery 

399 points specified in subdivision (a) of this Article. The Contractor shall indemnify the United 

400 States, its officers, employees, agents, and assigns on account of damage or claim of damage of 

401 any nature whatsoever for which there is legal responsibility, including property damage, 

402 personal injury, or death arising out of or connected with the control, carriage, handling, use, 

403 disposal, or distribution of such Water Delivered beyond such delivery points, except for any 

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

405 officers, employees, agents, or assigns, including Operating Non-Federal Entity/Entities, with the 

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

407 Contracting Officer or any of its officers, employees, agents, or assigns, including the Operating 
Contract No. 7-07-20-W0056-LTR1 

17

408 Non-Federal Entity/Entities, (iii) negligence of the Contracting Officer or any of its officers, 

409 employees, agents, or assigns including the Operating Non-Federal Entity/Entities, or (iv) 

410 damage or claims resulting from a malfunction of facilities owned and/or operated by the United 

411 States or responsible Operating Non-Federal Entity/Entities. 

412 MEASUREMENT OF WATER WITHIN THE CONTRACTOR’S BOUNDARIES 

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

414 Contracting Officer. The Contractor shall ensure that all surface water delivered for irrigation 

415 purposes within the Contractor’s Boundaries is measured at each agricultural turnout and such 

416 water delivered for M&I purposes is measured at each M&I service connection. The water 

417 measuring devices or water measuring methods of comparable effectiveness must be acceptable 

418 to the Contracting Officer. The Contractor shall be responsible for installing, operating, and 

419 maintaining and repairing all such measuring devices and implementing all such water 

420 measuring methods at no cost to the United States. The Contractor shall use the information 

421 obtained from such water measuring devices or water measuring methods to ensure its proper 

422 management of the water, to bill water users for water delivered by the Contractor; and, if 

423 applicable, to record water delivered for M&I purposes by customer class as defined in the 

424 Contractor’s water conservation plan provided for in Article 26 of this Contract. Nothing herein 

425 contained, however, shall preclude the Contractor from establishing and collecting any charges, 

426 assessments, or other revenues authorized by California law. The Contractor shall include a 

427 summary of all its annual surface water deliveries in the annual report described in subdivision 

428 (c) of Article 26. 

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

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

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

432 to implement subdivision (a) of this Article and identifying the agricultural turnouts and the M&I 

433 service connections or alternative measurement programs approved by the Contracting Officer, 
Contract No. 7-07-20-W0056-LTR1 

18

434 at which such measurement devices or water measuring methods are being used, and, if 

435 applicable, identifying the locations at which such devices and/or methods are not yet being used 

436 including a time schedule for implementation at such locations. The Contracting Officer shall 

437 advise the Contractor in writing within 60 days as to the adequacy and necessary modifications, 

438 if any, of the measuring devices or water measuring methods identified in the Contractor’s report 

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

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

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

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

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

444 compliance with subdivision (a) of this Article. 

445 (c) All new surface water delivery systems installed within the Contractor’s 

446 Boundaries after the effective date of this Contract shall also comply with the measurement 

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

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

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

450 within the Contractor’s Boundaries during the previous Year. 

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

Non-Federal Entity on or before the 20th 452 calendar day of each month of the quantity of Irrigation 

453 and M&I Water taken during the preceding month. 

454 RATES AND METHOD OF PAYMENT FOR WATER

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

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

457 accordance with (i) the Secretary’s ratesetting policy for Irrigation Water adopted in 1988 and 

458 the Secretary’s then-existing ratesetting policy for M&I Water. Such ratesetting policies shall be 

459 amended, modified, or superceded only through a public notice and comment procedure; (ii) 
Contract No. 7-07-20-W0056-LTR1 

19

460 applicable Federal Reclamation law and associated rules and regulations, or policies; and (iii) 

461 other applicable provisions of this Contract. Payments shall be made by cash transaction, 

462 electronic funds transfer, or any other mechanism as may be agreed to in writing by the 

463 Contractor and the Contracting Officer. The Rates, Charges, and Tiered Pricing Component 

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

465 be revised annually. 

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

467 and Tiered Pricing Component as follows: 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

485 Contractor shall make an advance payment to the United States equal to the total amount payable 
Contract No. 7-07-20-W0056-LTR1 

20

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

505 day of February. 

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

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

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

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

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

511 consistent with the quantities of Irrigation Water and M&I Water Delivered as shown in the 
Contract No. 7-07-20-W0056-LTR1 

21

512 water delivery report for the subject month prepared by the Operating Non-Federal 

513 Entity/Entities or, if there is no Operating Non-Federal Entity/Entities, by the Contracting 

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

515 applicable Tiered Pricing Component for Water Delivered. Adjustment for overpayment or 

516 underpayment of Charges shall be made through the adjustment of payments due to the United 

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

518 and the Tiered Pricing Component shall be computed pursuant to Article 20 of this Contract. 

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

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

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

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

523 Contract shall be no more than the otherwise applicable Rate for Irrigation Water or M&I Water 

524 under subdivision (a) of this Article. 

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

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

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

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

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

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

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

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

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

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

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

536 disposition of all Project and Contractor revenues, and a summary of all water delivery 
Contract No. 7-07-20-W0056-LTR1 

22

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

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

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

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

541 policies, and procedures used for establishing Rates, Charges, and Tiered Pricing Components, 

542 and/or for making and allocating payments, other than those set forth in this Article may be in 

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

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

545 this Contract is in effect without amending this Contract. 

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

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

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

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

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

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

552 subdivision (a) of this Article and the Irrigation Full Cost Water Rate or M&I Full Cost Water 

553 Rate, whichever is applicable. The Tiered Pricing Component for the amount of Water 

554 Delivered which exceeds 90 percent of the Contract Total shall equal the difference between (i) 

555 the Rate established under subdivision (a) of this Article and (ii) the Irrigation Full Cost Water 

556 Rate or M&I Full Cost Water Rate, whichever is applicable. For all Water Delivered pursuant to 

557 subdivision (a) of Article 3 of this Contract which is in excess of 80 percent of the Contract 

558 Total, this increment shall be deemed to be divided between Irrigation Water and M&I Water in 

559 the same proportion as actual deliveries of each bear to the cumulative total Water Delivered. 

560 (2) Subject to the Contracting Officer’s written approval, the 

561 Contractor may request and receive an exemption from such Tiered Pricing Components for 

562 Project Water delivered to produce a crop which the Contracting Officer determines will provide 
Contract No. 7-07-20-W0056-LTR1 

23

563 significant and quantifiable habitat values for waterfowl in fields where the water is used and the 

564 crops are produced; Provided, That the exemption from the Tiered Pricing Component for 

565 Irrigation Water shall apply only if such habitat values can be assured consistent with the 

566 purposes of the CVPIA through binding agreements executed with or approved by the 

567 Contracting Officer prior to use of such water. 

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

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

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

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

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

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

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

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

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

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

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

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

580 impact of the proposed change. 

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

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

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

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

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

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

587 entity whose Rates and Charges are not adjusted due to inability to pay, the Rates and Charges 
Contract No. 7-07-20-W0056-LTR1 

24

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

589 adjusted to reflect the Contractor’s inability to pay. 

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

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

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

593 not legally obligated to repay any Project deficits claimed by the United States to have accrued 

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

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

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

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

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

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

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

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

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

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

604 shall be entitled to the benefit of any administrative or judicial ruling in favor of any M&I 

605 contractor on any of these issues, and credits for payments heretofore made, Provided, That the 

606 basis for such ruling is applicable to the Contractor. 

607 NON-INTEREST BEARING OPERATION AND MAINTENANCE DEFICITS

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

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

610 liability therefor. 
Contract No. 7-07-20-W0056-LTR1 

25

611 SALES, TRANSFERS, OR EXCHANGES OF WATER

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

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

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

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

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

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

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

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

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

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

622 both the transferor and transferee. 

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

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

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

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

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

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

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

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

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

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

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

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

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

636 quantity of Project Water historically transferred within the same geographical area. 
Contract No. 7-07-20-W0056-LTR1 

26

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

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

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

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

641 be delivered to established cropland, wildlife refuges, ground-water basins or M&I use; (ii) occur 

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

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

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

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

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

647 under Federal law. 

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

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

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

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

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

653 Rivers. 

654 APPLICATION OF PAYMENTS AND ADJUSTMENTS 

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

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

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

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

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

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

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

662 have the right to the use of any of the Project Water supply provided for herein. All credits and 
Contract No. 7-07-20-W0056-LTR1 

27

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

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

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

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

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

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

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

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

671 TEMPORARY REDUCTIONS--RETURN FLOWS

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

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

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

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

676 provided in this Contract. 

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

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

679 the purposes of investigation, inspection, maintenance, repair, or replacement of any of the 

680 Project facilities or any part thereof necessary for the delivery of Project Water to the Contractor, 

681 but so far as feasible the Contracting Officer or Operating Non-Federal Entity will give the 

682 Contractor due notice in advance of such temporary discontinuance or reduction, except in case 

683 of emergency, in which case no notice need be given; Provided, That the United States shall use 

684 its best efforts to avoid any discontinuance or reduction in such service. Upon resumption of 

685 service after such reduction or discontinuance, and if requested by the Contractor, the United 

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

687 hereunder in the absence of such discontinuance or reduction. 
Contract No. 7-07-20-W0056-LTR1 

28

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

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

690 beyond the Contractor’s Boundaries; Provided, That this shall not be construed as claiming for 

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

692 pursuant to this Contract within the Contractor’s Boundaries by the Contractor or those claiming 

693 by, through, or under the Contractor. 

694 CONSTRAINTS ON THE AVAILABILITY OF WATER

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

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

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

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

699 Contractor of said determination as soon as practicable. 

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

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

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

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

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

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

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

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

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

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

710 contractual obligations of the United States. 

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

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

713 amended, modified, or superseded only through a public notice and comment procedure. 
Contract No. 7-07-20-W0056-LTR1 

29

714 UNAVOIDABLE GROUNDWATER PERCOLATION

715 13. To the extent applicable, the Contractor shall not be deemed to have delivered 

716 Irrigation Water to Excess Lands or Ineligible Lands within the meaning of this Contract if such 

717 lands are irrigated with groundwater that reaches the underground strata as an unavoidable result 

718 of the delivery of Irrigation Water by the Contractor to Eligible Lands. 

719 RULES AND REGULATIONS

720 14. The parties agree that the delivery of Irrigation Water or use of Federal facilities 

721 pursuant to this Contract is subject to Federal Reclamation law, including but not limited to the 

722 Reclamation Reform Act of 1982 (43 U.S.C.390aa et seq.), as amended and supplemented, and 

723 the rules and regulations promulgated by the Secretary of the Interior under Federal Reclamation 

724 law. 

725 WATER AND AIR POLLUTION CONTROL

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

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

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

729 authorities. 

730 QUALITY OF WATER

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

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

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

734 2(b) of the Act of August 26, 1937 (50 Stat. 865), as added by Section 101 of the Act of 

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

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

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

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

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

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

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

742 shall be responsible for compliance with all State and Federal water quality standards applicable 
Contract No. 7-07-20-W0056-LTR1 

30

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

744 or Contractor facilities or Project Water provided by the Contractor within the Contractor’s 

745 Boundaries. 

746 WATER ACQUIRED BY THE CONTRACTOR

747 OTHER THAN FROM THE UNITED STATES

748 17. (a) Water or water rights now owned or hereafter acquired by the Contractor 

749 other than from the United States and Irrigation Water furnished pursuant to the terms of this 

750 Contract may be simultaneously transported through the same distribution facilities of the 

751 Contractor subject to the following: (i) if the facilities utilized for commingling Irrigation Water 

752 and non-Project water were constructed without funds made available pursuant to Federal 

753 Reclamation law, the provisions of Federal Reclamation law will be applicable only to the 

754 Landholders of lands which receive Irrigation Water; (ii) the eligibility of land to receive 

755 Irrigation Water must be established through the certification requirements as specified in the 

756 Acreage Limitation Rules and Regulations (43 CFR Part 426); (iii) the water requirements of 

757 Eligible Lands within the Contractor’s Boundaries can be established and the quantity of 

758 Irrigation Water to be utilized is less than or equal to the quantity necessary to irrigate such 

759 Eligible Lands; and (iv) if the facilities utilized for commingling Irrigation Water and non760 Project water are/were constructed with funds made available pursuant to Federal Reclamation 

761 law, the non-Project water will be subject to the acreage limitation provisions of Federal 

762 Reclamation law, unless the Contractor pays to the United States the incremental fee described in 

763 43 CFR 426.15. In determining the incremental fee, the Contracting Officer will calculate 

764 annually the cost to the Federal Government, including interest, on storing or delivering non765 Project water, which for purposes of this Contract shall be determined as follows: The quotient 

766 shall be the unpaid distribution system costs divided by the total irrigable acreage within the 

767 Contractor’s Boundaries. The incremental fee per acre is the mathematical result of such 

768 quotient times the interest rate determined using Section 202 (3) of the Act of October 12, 1982 

769 (96 Stat. 1263). Such incremental fee will be charged to each acre of excess or full cost land 
Contract No. 7-07-20-W0056-LTR1 

31

770 within the Contractor’s Boundaries that receives non-Project water through Federally financed or 

771 constructed facilities. The incremental fee calculation methodology will continue during the 

772 term of this Contract absent the promulgation of a contrary Reclamation-wide rule, regulation, or 

773 policy adopted after the Contractor has been afforded the opportunity to review and comment on 

774 the proposed rule, regulation, or policy. If such rule, regulation, or policy is adopted it shall 

775 supercede this provision. 

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

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

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

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

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

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

782 facilities and deliver said water to lands within the Contractor’s Boundaries, including Ineligible 

783 Lands, subject to payment to the United States and/or to any applicable Operating Non-Federal 

784 Entity of an appropriate rate as determined by the applicable Project ratesetting policy, the RRA, 

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

786 amended, modified, or superceded from time to time. 

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

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

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

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

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

792 the Project facilities. 

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

794 shall be responsible for control, care, or distribution of the non-Project water before it is 

795 introduced into or after it is delivered from the Project facilities. The Contractor hereby releases 
Contract No. 7-07-20-W0056-LTR1 

32

796 and agrees to defend and indemnify the United States and the Operating Non-Federal Entity, and 

797 their respective officers, agents, and employees, from any claim for damage to persons or 

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

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

800 diverting such non-Project water into Project facilities. 

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

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

803 ground-water management plan for the area from which it was extracted. 

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

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

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

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

808 non-Project contractors. 

809 OPINIONS AND DETERMINATIONS

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

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

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

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

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

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

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

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

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

819 statute or regulation. 

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

821 necessary to administer this Contract that are consistent with the provisions of this Contract, the 
Contract No. 7-07-20-W0056-LTR1 

33

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

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

824 with the Contractor to the extent reasonably practicable. 

825 COORDINATION AND COOPERATION

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

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

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

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

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

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

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

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

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

835 and determinations to be made by the respective party. 

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

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

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

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

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

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

842 a real-time basis. 

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

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

845 intent: 

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

847 assist in the development of integrated resource management plans for the Contractor. Further, 
Contract No. 7-07-20-W0056-LTR1 

34

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

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

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

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

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

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

854 State of California to seek improved water resource management. 

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

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

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

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

859 management activities, and other issues as appropriate. 

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

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

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

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

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

865 CHARGES FOR DELINQUENT PAYMENTS

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

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

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

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

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

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

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

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

874 associated with a delinquent payment. 

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

876 in the Federal Register by the Department of the Treasury for application to overdue payments, 
Contract No. 7-07-20-W0056-LTR1 

35

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

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

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

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

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

882 accrued interest, and finally to the overdue payment. 

883 EQUAL OPPORTUNITY

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

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

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

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

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

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

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

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

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

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

894 nondiscrimination clause. 

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

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

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

898 national origin. 

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

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

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

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

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

904 employees and applicants for employment. 

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

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

907 of the Secretary of Labor. 

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

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

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

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

912 such rules, regulations, and orders. 
Contract No. 7-07-20-W0056-LTR1 

36

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

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

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

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

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

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

919 otherwise provided by law. 

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

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

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

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

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

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

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

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

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

929 GENERAL OBLIGATION--BENEFITS CONDITIONED UPON PAYMENT

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

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

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

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

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

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

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

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

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

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

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

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

942 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

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

944 (42 U.S.C. 2000d), Section 504 of the Rehabilitation Act of 1975 (P.L. 93-112, as amended), the 

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

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

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

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

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

950 denied the benefits of, or be otherwise subjected to discrimination under any program or activity 
Contract No. 7-07-20-W0056-LTR1 

37

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

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

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

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

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

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

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

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

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

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

961 enforcement thereof. 

962 PRIVACY ACT COMPLIANCE

963 24. (a) The Contractor shall comply with the Privacy Act of 1974 (5 U.S.C. 552a) 

964 (the Act) and the Department of the Interior rules and regulations under the Act (43 CFR 2.45 et 

965 seq.) in maintaining Landholder acreage certification and reporting records, required to be 

966 submitted to the Contractor for compliance with Sections 206 and 228 of the Reclamation 

967 Reform Act of 1982 (96 Stat. 1266), and pursuant to 43 CFR 426.18. 

968 (b) With respect to the application and administration of the criminal penalty 

969 provisions of the Act (5 U.S.C. 552a(i)), the Contractor and the Contractor's employees 

970 responsible for maintaining the certification and reporting records referenced in (a) above are 

971 considered to be employees of the Department of the Interior. See 5 U.S.C. 552a(m). 

972 (c) The Contracting Officer or a designated representative shall provide the 

973 Contractor with current copies of the Interior Department Privacy Act regulations and the Bureau 

974 of Reclamation Federal Register Privacy Act System of Records Notice (Acreage Limitation--

975 Interior, Reclamation-31) which govern the maintenance, safeguarding, and disclosure of 

976 information contained in the Landholder's certification and reporting records. 

977 (d) The Contracting Officer shall designate a full-time employee of the 

978 Bureau of Reclamation to be the System Manager who shall be responsible for making decisions 

979 on denials pursuant to 43 CFR 2.61 and 2.64 amendment requests pursuant to 43 CFR 2.72. The 

980 Contractor is authorized to grant requests by individuals for access to their own records. 

981 (e) The Contractor shall forward promptly to the System Manager each 

982 proposed denial of access under 43 CFR 2.64; and each request for amendment of records filed 

983 under 43 CFR 2.71; notify the requester accordingly of such referral; and provide the System 

984 Manager with information and records necessary to prepare an appropriate response to the 

985 requester. These requirements do not apply to individuals seeking access to their own 

986 certification and reporting forms filed with the Contractor pursuant to 43 CFR 426.18, unless the 

987 requester elects to cite the Privacy Act as a basis for the request. 
Contract No. 7-07-20-W0056-LTR1 

38

988 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

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

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

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

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

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

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

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

996 contract administration. 

997 WATER CONSERVATION

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

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

1000 shall be implementing an effective water conservation and efficiency program based on the 

1001 Contractor's water conservation plan that has been determined by the Contracting Officer to meet 

1002 the conservation and efficiency criteria for evaluating water conservation plans established under 

1003 Federal law. The water conservation and efficiency program shall contain definite water 

1004 conservation objectives, appropriate economically feasible water conservation measures, and 

1005 time schedules for meeting those objectives. Continued Project Water delivery pursuant to this 

1006 Contract shall be contingent upon the Contractor’s continued implementation of such water 

1007 conservation program. In the event the Contractor's water conservation plan or any revised water 

1008 conservation plan completed pursuant to subdivision (d) of Article 26 of this Contract have not 

1009 yet been determined by the Contracting Officer to meet such criteria, due to circumstances which 

1010 the Contracting Officer determines are beyond the control of the Contractor, water deliveries 

1011 shall be made under this Contract so long as the Contractor diligently works with the Contracting 

1012 Officer to obtain such determination at the earliest practicable date, and thereafter the Contractor 
Contract No. 7-07-20-W0056-LTR1 

39

1013 immediately begins implementing its water conservation and efficiency program in accordance 

1014 with the time schedules therein. 

1015 (b) Should the amount of M&I Water delivered pursuant to subdivision (a) of 

1016 Article 3 of this Contract equal or exceed 2,000 acre-feet per Year, the Contractor shall 

1017 implement the Best Management Practices identified by the time frames issued by the California 

1018 Urban Water Conservation Council for such M&I Water unless any such practice is determined 

1019 by the Contracting Officer to be inappropriate for the Contractor. 

1020 (c) The Contractor shall submit to the Contracting Officer a report on the 

1021 status of its implementation of the water conservation plan on the reporting dates specified in the 

1022 then existing conservation and efficiency criteria established under Federal law. 

1023 (d) At five-year intervals, the Contractor shall revise its water conservation 

1024 plan to reflect the then-current conservation and efficiency criteria for evaluating water 

1025 conservation plans established under Federal law and submit such revised water management 

1026 plan to the Contracting Officer for review and evaluation. The Contracting Officer will then 

1027 determine if the water conservation plan meets Reclamation’s then-current conservation and 

1028 efficiency criteria for evaluating water conservation plans established under Federal law. 

1029 (e) If the Contractor is engaged in direct ground-water recharge, such activity 

1030 shall be described in the Contractor’s water conservation plan. 

1031 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

1032 27. Except as specifically provided in Article 17 of this Contract, the provisions of 

1033 this Contract shall not be applicable to or affect non-Project water or water rights now owned or 

1034 hereafter acquired by the Contractor or any user of such water within the Contractor’s 

1035 Boundaries. Any such water shall not be considered Project Water under this Contract. In 

1036 addition, this Contract shall not be construed as limiting or curtailing any rights which the 

1037 Contractor or any water user within the Contractor’s Boundaries acquires or has available under 

1038 any other contract pursuant to Federal Reclamation law. 
Contract No. 7-07-20-W0056-LTR1 

40

1039 OPERATION AND MAINTENANCE BY OPERATING NON-FEDERAL ENTITY

1040 28. (a) The O&M of a portion of the Project facilities which serve the Contractor, 

1041 and responsibility for funding a portion of the costs of such O&M, have been transferred to the 

1042 Operating Non-Federal Entity by separate agreement between the United States and the 

1043 Operating Non-Federal Entity. That separate agreement shall not interfere with or affect the 

1044 rights or obligations of the Contractor or the United States hereunder. 

1045 (b) The Contracting Officer has previously notified the Contractor in writing 

1046 that the O&M of a portion of the Project facilities which serve the Contractor has been 

1047 transferred to the Operating Non-Federal Entity, and therefore, the Contractor shall pay directly 

1048 to the Operating Non-Federal Entity, or to any successor approved by the Contracting Officer 

1049 under the terms and conditions of the separate agreement between the United States and the 

1050 Operating Non-Federal Entity described in subdivision (a) of this Article, all rates, charges, or 

1051 assessments of any kind, including any assessment for reserve funds, which the Operating Non1052 Federal Entity or such successor determines, sets, or establishes for the O&M of the portion of 

1053 the Project facilities operated and maintained by the Operating Non-Federal Entity or such 

1054 successor. Such direct payments to the Operating Non-Federal Entity or such successor shall not 

1055 relieve the Contractor of its obligation to pay directly to the United States the Contractor’s share 

1056 of the Project Rates, Charges, and Tiered Pricing Component(s) except to the extent the 

1057 Operating Non-Federal Entity collects payments on behalf of the United States in accordance 

1058 with the separate agreement identified in subdivision (a) of this Article. 

1059 (c) For so long as the O&M of any portion of the Project facilities serving the 

1060 Contractor is performed by the Operating Non-Federal Entity, or any successor thereto, the 

1061 Contracting Officer shall adjust those components of the Rates for Water Delivered under this 

1062 Contract representing the cost associated with the activity being performed by the Operating 

1063 Non-Federal Entity or its successor. 
Contract No. 7-07-20-W0056-LTR1 

41

1064 (d) In the event the O&M of the Project facilities operated and maintained by 

1065 the Operating Non-Federal Entity is re-assumed by the United States during the term of this 

1066 Contract, the Contracting Officer shall so notify the Contractor, in writing, and present to the 

1067 Contractor a revised Exhibit “B” which shall include the portion of the Rates to be paid by the 

1068 Contractor for Project Water under this Contract representing the O&M costs of the portion of 

1069 such Project facilities which have been re-assumed. The Contractor shall, thereafter, in the 

1070 absence of written notification from the Contracting Officer to the contrary, pay the Rates, 

1071 Charges, and Tiered Pricing Component(s) specified in the revised Exhibit “B” directly to the 

1072 United States in compliance with Article 7 of this Contract. 

1073 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

1074 29. The expenditure or advance of any money or the performance of any obligation of 

1075 the United States under this Contract shall be contingent upon appropriation or allotment of 

1076 funds. Absence of appropriation or allotment of funds shall not relieve the Contractor from any 

1077 obligations under this Contract. No liability shall accrue to the United States in case funds are 

1078 not appropriated or allotted. 

1079 BOOKS, RECORDS, AND REPORTS

1080 30. (a) The Contractor shall establish and maintain accounts and other books and 

1081 records pertaining to administration of the terms and conditions of this Contract, including: the 

1082 Contractor's financial transactions, water supply data, and Project land and right-of-way 

1083 agreements; the water users' land-use (crop census), land ownership, land-leasing and water use 

1084 data; and other matters that the Contracting Officer may require. Reports thereon shall be 

1085 furnished to the Contracting Officer in such form and on such date or dates as the Contracting 

1086 Officer may require. Subject to applicable Federal laws and regulations, each party to this 

1087 Contract shall have the right during office hours to examine and make copies of the other party's 

1088 books and records relating to matters covered by this Contract.

1089 (b) Notwithstanding the provisions of subdivision (a) of this Article, no 

1090 books, records, or other information shall be requested from the Contractor by the Contracting 

1091 Officer unless such books, records, or information are reasonably related to the administration or 

1092 performance of this Contract. Any such request shall allow the Contractor a reasonable period of 

1093 time within which to provide the requested books, records, or information. 
Contract No. 7-07-20-W0056-LTR1 

42

1094 (c) At such time as the Contractor provides information to the Contracting 

1095 Officer pursuant to subdivision (a) of this Article, a copy of such information shall be provided 

1096 to the Operating Non-Federal Entity. 

1097 ASSIGNMENT LIMITED--SUCCESSORS AND ASSIGNS OBLIGATED

1098 31. (a) The provisions of this Contract shall apply to and bind the successors and 

1099 assigns of the parties hereto, but no assignment or transfer of this Contract or any right or interest 

1100 therein shall be valid until approved in writing by the Contracting Officer. 

1101 (b) The assignment of any right or interest in this Contract by either party 

1102 shall not interfere with the rights or obligations of the other party to this Contract absent the 

1103 written concurrence of said other party. 

1104 (c) The Contracting Officer shall not unreasonably condition or withhold his 

1105 approval of any proposed assignment. 

1106 SEVERABILITY

1107 32. In the event that a person or entity who is neither (i) a party to a Project contract, 

1108 nor (ii) a person or entity that receives Project Water from a party to a Project contract, nor (iii) 

1109 an association or other form of organization whose primary function is to represent parties to 

1110 Project contracts, brings an action in a court of competent jurisdiction challenging the legality or 

1111 enforceability of a provision included in this Contract and said person, entity, association, or 

1112 organization obtains a final court decision holding that such provision is legally invalid or 

1113 unenforceable and the Contractor has not intervened in that lawsuit in support of the plaintiff(s), 

1114 the parties to this Contract shall use their best efforts to (i) within 30 days of the date of such 

1115 final court decision identify by mutual agreement the provisions in this Contract which must be 

1116 revised, and (ii) within three months thereafter promptly agree on the appropriate revision(s). 

1117 The time periods specified above may be extended by mutual agreement of the parties. Pending 

1118 the completion of the actions designated above, to the extent it can do so without violating any 

1119 applicable provisions of law, the United States shall continue to make the quantities of Project 

1120 Water specified in this Contract available to the Contractor pursuant to the provisions of this 

1121 Contract which were not found to be legally invalid or unenforceable in the final court decision. 
Contract No. 7-07-20-W0056-LTR1 

43

1122 RESOLUTION OF DISPUTES

1123 33. Should any dispute arise concerning any provisions of this Contract, or the 

1124 parties’ rights and obligations thereunder, the parties shall meet and confer in an attempt to 

1125 resolve the dispute. Prior to the Contractor commencing any legal action, or the Contracting 

1126 Officer referring any matter to Department of Justice, the party shall provide to the other party 

1127 30 days’ written notice of the intent to take such action; Provided, That such notice shall not be 

1128 required where a delay in commencing an action would prejudice the interests of the party that 

1129 intends to file suit. During the 30-day notice period, the Contractor and the Contracting Officer 

1130 shall meet and confer in an attempt to resolve the dispute. Except as specifically provided, 

1131 nothing herein is intended to waive or abridge any right or remedy that the Contractor or the 

1132 United States may have. 

1133 OFFICIALS NOT TO BENEFIT

1134 34. No Member of or Delegate to Congress, Resident Commissioner, or official of the 

1135 Contractor shall benefit from this Contract other than as a water user or landowner in the same 

1136 manner as other water users or landowners. 

1137 CHANGES IN CONTRACTOR’S BOUNDARIES

1138 35. (a) While this Contract is in effect, no change may be made in the 

1139 Contractor’s Boundaries, by inclusion or exclusion of lands, dissolution, consolidation, merger, 

1140 or otherwise, except upon the Contracting Officer's written consent. 

1141 (b) Within 30 days of receipt of a request for such a change, the Contracting 

1142 Officer will notify the Contractor of any additional information required by the Contracting 

1143 Officer for processing said request, and both parties will meet to establish a mutually agreeable 

1144 schedule for timely completion of the process. Such process will analyze whether the proposed 

1145 change is likely to: (i) result in the use of Project Water contrary to the terms of this Contract; 

1146 (ii) impair the ability of the Contractor to pay for Project Water furnished under this Contract or 

1147 to pay for any Federally-constructed facilities for which the Contractor is responsible; and (iii) 

1148 have an impact on any Project Water rights applications, permits, or licenses. In addition, the 

1149 Contracting Officer shall comply with the NEPA and the ESA. The Contractor will be 
Contract No. 7-07-20-W0056-LTR1 

44

1150 responsible for all costs incurred by the Contracting Officer in this process, and such costs will 

1151 be paid in accordance with Article 25 of this Contract. 

1152 FEDERAL LAWS

1153 36. By entering into this Contract, the Contractor does not waive its rights to contest 

1154 the validity or application in connection with the performance of the terms and conditions of this 

1155 Contract of any Federal law or regulation; Provided, That the Contractor agrees to comply with 

1156 the terms and conditions of this Contract unless and until relief from application of such Federal 

1157 law or regulation to the implementing provision of the Contract is granted by a court of 

1158 competent jurisdiction. 

1159 NOTICES

1160 37. Any notice, demand, or request authorized or required by this Contract shall be 

1161 deemed to have been given, on behalf of the Contractor, when mailed, postage prepaid, or 

1162 delivered to the Area Manager, Bureau of Reclamation, Northern California Area Office, 16349 

1163 Shasta Dam Boulevard, Shasta Lake, California 96019, and on behalf of the United States, when 

1164 mailed, postage prepaid, or delivered to the Board of Directors of the Kirkwood Water District, 

1165 23010 Capay Road, Corning, California 96021. The designation of the addressee or the address 

1166 may be changed by notice given in the same manner as provided in this Article for other notices. 

1167 CONFIRMATION OF CONTRACT

1168 38. The Contractor, after the execution of this Contract, shall promptly seek to secure 

1169 a decree of a court of competent jurisdiction of the State of California, confirming the execution 

1170 of this Contract. The Contractor shall furnish the United States a certified copy of the final 

1171 decree, the validation proceedings, and all pertinent supporting records of the court approving 

1172 and confirming this Contract, and decreeing and adjudging it to be lawful, valid, and binding on 

1173 the Contractor. 
Contract No. 7-07-20-W0056-LTR1 

45

1174 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of 

1175 the day and year first above written. 

1176 THE UNITED STATES OF AMERICA 

1177 By: ______________________________________ 

1178 Regional Director, Mid-Pacific Region 

1179 Bureau of Reclamation 

1180 KIRKWOOD WATER DISTRICT 

1181 By: ______________________________________ 

1182 President of the Board of Directors 

1183 Attest: 

1184 By: _______________________________ 

1185 Secretary of the Board of Directors 

1186 (I:\LTRC\LTRC Drafts\04-19-2004-01 Kirkwood WD Final LTRC Draft Contract.doc) 
Contract No. 7-07-20-W0056-LTR1 

EXHIBIT A

[Map or Description of Boundaries]
Contract No. 7-07-20-W0056-LTR1 

EXHIBIT B 

Rates and Charges 

KIRKWOOD WATER DISTRICT 

 

 2003 Rates Per Acre-Foot 

 Irrigation M&I

CONTRACT RATE * $14.01 

(1st Tier - <80% of Contract Total) 

 

2ND TIER [>80% <90% of Contract Total] $24.10 

(Sec. 202(3) Full Cost Rate + Contract Rate/ 2) ** 

 

3RD TIER [> 90% of Contract Total] $34.18 

(Sec. 202(3) Full Cost Rate) ** 

FULL-COST RATES: ** 

RRA Section 202(3) rate is applicable to 

Qualified Recipients or to Limited 

Recipients receiving irrigation water 

on or before October 1, 1981. $34.18 

RRA Section 205(a)(3) rate is applicable 

to Limited Recipients that did not 

receive irrigation water on or before 

October 1, 1981. $41.54 

SURCHARGES UNDER P.L. 102-575 TO 

RESTORATION FUND*** 

Restoration Payments [3407(d)(2)(A)] $0.00 

* Capital component of cost-of-service rate is not included in Contract Rate due to ability to pay relief for 

Contractor established pursuant to the results of the Payment Capacity Analysis for the Tehama-Colusa 

Water Users Association Service Area as announced by letter dated February 10, 1995. 

** Contractors with 9(d) distribution systems do not have the 9(d) Full Cost component included for 

tiered pricing calculations. See Article 1(j). 

*** These surcharges are payments in addition to the water rates and are determined pursuant to Title 

XXXIV of P.L. 102-575. Restoration Fund surcharges under P.L. 102-575 are on a fiscal year basis (10/1 

-9/30). Contractors with ability to pay relief do not pay Restoration Fund charges for irrigation water. 

Note: Additional detail of rate components is available on the Internet at 

http:/www.mp.usbr.gov/ cvpwaterrates/.