Irrigation and M&I 

Rev. R. O. Draft 10/20-2004 

Rev. SCCAO Draft 10/17-2004 

Rev. SCCAO Draft 03/19-2004 

Rev. SCCAO Draft 09/22-2003 

Rev. R. O. Draft 02/06-2002 

SCCAO Draft 11/16-2000 

Contract No. 

14-06-200-8367A-LTR1 

 ` 

 UNITED STATES 

DEPARTMENT OF THE INTERIOR 

BUREAU OF RECLAMATION 

CENTRAL VALLEY PROJECT, CALIFORNIA 

LONG-TERM RENEWAL CONTRACT AMONG THE UNITED STATES,

THE DEPARTMENT OF WATER RESOURCES OF THE STATE OF CALIFORNIA,

AND RAG GULCH WATER DISTRICT

PROVIDING FOR PROJECT WATER SERVICE

Table of Contents

Article No. Title Page No.

 Preamble .............................................................................................................. 1-2 

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

 1 Definitions.......................................................................................................... 5-10 

 2 Term of Contract.............................................................................................. 10-13

 3 Water to be Made Available and Delivered to the Contractor......................... 13-18 

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

 5 Point of Diversion and Responsibility for Distribution of Water....................20-25 

 6 Measurement of Water Within the Contractor’s Service Area........................ 25-27 

 7 Rates and Method of Payment for Water......................................................... 27-33 

 8 Rates and Method of Payment for Conveyance 

 and Other Services by DWR....................................................................... 33-35 

 9 Sales, Transfers, or Exchanges of Water ......................................................... 35-37 

 10 Application of Payments and Adjustments...................................................... 37-38 

 11 Temporary Reductions--Return Flows ............................................................ 39-40 

 12 Constraints on the Availability of Water ......................................................... 40-41 

 13 Unavoidable Groundwater Percolation................................................................. 41 

 14 Rules and Regulations........................................................................................... 41 

 15 Water and Air Pollution Control........................................................................... 41 

 16 Quality of Water ................................................................................................... 42 

 17 Water Acquired by the Contractor Other Than From the United States.......... 42-44 

 18 Opinions and Determinations ............................................................................... 44 

 19 Coordination and Cooperation......................................................................... 44-46 

 20 Charges for Delinquent Payments ........................................................................ 46
Contract No.14-06-200-8367A-LTR1 

Table of Contents - continued

Article No. Title Page No.

 21 Equal Opportunity............................................................................................46-47 

 22 General Obligation--Benefits Conditioned Upon Payment ............................. 48-49 

 23 Compliance With Civil Rights Laws and Regulations ......................................... 49 

 24 Privacy Act Compliance ....................................................................................... 50 

 25 Contractor to Pay Certain Miscellaneous Costs............................................... 50-51 

 26 Water Conservation ......................................................................................... 51-52 

 27 Existing or Acquired Water or Water Rights........................................................ 52 

 28 Operation and Maintenance by Operating Non-Federal Entity ....................... 53-54 

 29 Contingent on Appropriation or Allotment of Funds ........................................... 54 

 30 Books, Records, and Reports........................................................................... 54-55 

 31 Assignment Limited--Successors and Assigns Obligated .................................... 55 

 32 Severability ...................................................................................................... 55-56 

 33 Resolution of Disputes.......................................................................................... 56 

 34 Officials Not to Benefit......................................................................................... 57 

 35 Changes in Contractor’s Service Area.................................................................. 57 

 36 Federal Laws.................................................................................................... 57-58 

 37 Notices .................................................................................................................. 58

 38 Confirmation of Contract...................................................................................... 58 

 Signature Page ...................................................................................................... 59 

 

 Exhibit A - Map of Contractor's Service Area 

 

 Exhibit B - Rates and Charges
Rev. R. O. Draft 10/20-2004 

Rev. SCCAO Draft 10/17-2004 

Rev. SCCAO Draft 03/19-2004 

Rev. SCCAO Draft 09/22-2003 

Rev. R. O. Draft 02/06-2002 

SCCAO Draft 11/16-2000 

Contract No. 

14-06-200-8367A-LTR1 

1 UNITED STATES 

2 DEPARTMENT OF THE INTERIOR 

3 BUREAU OF RECLAMATION 

4 CENTRAL VALLEY PROJECT, CALIFORNIA 

5 LONG-TERM RENEWAL CONTRACT AMONG THE UNITED STATES,

6 THE DEPARTMENT OF WATER RESOURCES OF THE STATE OF CALIFORNIA,

7 AND RAG GULCH WATER DISTRICT

8 PROVIDING FOR PROJECT WATER SERVICE

9 THIS CONTRACT, made this _____ day of ____________________, 2005, in pursuance 

10 generally of the Act of June 17, 1902, (32 Stat. 388), and acts amendatory or supplementary thereto, 

11 including, but not limited to, the Acts of August 26, 1937, (50 Stat. 844), as amended and 

12 supplemented, August 4, 1939 (53 Stat. 1187), as amended and supplemented, July 2, 1956 (70 Stat. 

13 483), June 21, 1963 (77 Stat. 68), October 12, 1982 (96 Stat. 1263), October 27, 1986 (100 Stat. 

14 3050), as amended, and Title XXXIV of the Act of October 30, 1992 (106 Stat. 4706), all collectively 

15 hereinafter referred to as Federal Reclamation law and pursuant to the California Central Valley 

16 Project Act [Part 3, Division 6 (commencing at Section 11100) of the California Water Code] and the 

17 California Water Resources Development Bond Act [Chapter 8, Part 6, Division 6 (commencing at 

18 Section 12930) of the California Water Code,] and all acts of the California legislature amendatory 

19 thereto or supplementary thereof, among THE UNITED STATES OF AMERICA, hereinafter 

20 referred to as the United States, the DEPARTMENT OF WATER RESOURCES OF THE STATE 

21 OF CALIFORNIA, hereinafter referred to as DWR, and 
Contract No.14-06-200-8367A-LTR1 

2

22 RAG GULCH WATER DISTRICT, hereinafter referred to as the Contractor, a public agency of the 

23 State of California, duly organized, existing, and acting pursuant to the laws thereof; 

24 WITNESSETH, That: 

25 EXPLANATORY RECITALS

[1st 26 ] WHEREAS, the United States has constructed and is operating the Central Valley 

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

28 control, irrigation, municipal, domestic, industrial, fish and wildlife mitigation, protection and 

29 restoration, generation and distribution of electric energy, salinity control, navigation and other 

30 beneficial uses, of waters of the Sacramento River, the American River, the Trinity River, and the 

31 San Joaquin River and their tributaries; and 

[2nd 32 ] WHEREAS, the United States constructed the Project facilities, which will be used in 

33 part for the furnishing of water to the Contractor pursuant to the terms of this Contract; and 

34 [2.2] WHEREAS, as provided herein, Project Water may be made available to the 

35 Contractor from the Sacramento-San Joaquin Delta and/or the Friant Division and delivered to the 

36 Contractor through appropriate federal, state and/or local facilities; and 

37 [2.3] WHEREAS, DWR is engaged in the operation of the State Water Resources 

38 Development System pursuant to the laws of the State of California involving the development, 

39 transportation, and delivery of water supplies to public agencies throughout the State of California; 

40 and 

41 [2.4] WHEREAS, the Cross Valley Canal, connecting the California Aqueduct and the 

42 Friant-Kern Canal in Kern County, has been constructed by the Contractor and others at no cost to 

43 either the United States or DWR; and 
Contract No.14-06-200-8367A-LTR1 

3

44 [2.5] WHEREAS, the Contractor has the right to use the Cross Valley Canal for conveyance 

45 of the Project Water furnished hereunder; and 

[3rd 46 ] WHEREAS, the rights to Project Water were acquired by the United States pursuant 

47 to California law for operation of the Project; and 

[4th 48 ] WHEREAS, the Contractor and the United States entered into Contract 

49 No. 14-06-200-8367A, as amended, which established terms for the delivery to the Contractor of 

50 Project Water via the Cross Valley Canal from February 4, 1976, through February 29, 1996; and 

[5th 51 ] WHEREAS, the Contractor and the United States have pursuant to subsection 

52 3404(c)(1) of the Central Valley Project Improvement Act (CVPIA), subsequently entered into 

53 interim renewal contract(s) identified as Contract No(s). 14-06-200-8367A-IR1, -IR2, -IR3, -IR4, 

54 -IR5, -IR6, -IR7, and -IR8, the current of which is hereinafter referred to as the Existing Contract, 

55 which provided for the continued water service to the Contractor from March 1, 2004 , through 

56 February 28, 2005; and 

[6th 57 ] WHEREAS, Section 3404(c) of the CVPIA provides for long-term renewal of the 

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

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

60 Act (NEPA) analyzing the direct and indirect impacts and benefits of implementing the CVPIA and 

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

[7th 62 ] WHEREAS, the United States has completed the PEIS and all other appropriate 

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

[8th 64 ] WHEREAS, the Contractor has requested the long-term renewal of the Existing 

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

66 State of California, for water service from the Project; and 
Contract No.14-06-200-8367A-LTR1 

4

[9th 67 ] WHEREAS, the United States has determined that the Contractor has fulfilled all of 

68 its obligations under the Existing Contract; and 

[10th 69 ] WHEREAS, the Contractor has demonstrated to the satisfaction of the Contracting 

70 Officer that the Contractor has utilized the Project Water supplies available to it for reasonable and 

71 beneficial use and/or has demonstrated projected future demand for water use such that the 

72 Contractor has the capability and expects to utilize fully for reasonable and beneficial use the quantity 

73 of Project Water to be made available to it pursuant to this Contract; and 

[11th 74 ] WHEREAS, water obtained from the Project has been relied upon by urban and 

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

76 essential portion of its water supply; and 

[12th 77 ] WHEREAS, the economies of regions within the Project, including the Contractor’s, 

78 depend upon the continued availability of water, including water service from the Project; and 

[13th 79 ] WHEREAS, the Secretary intends through coordination, cooperation, and partnerships 

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

81 Project purposes; and 

[14th 82 ] WHEREAS, the mutual goals of the United States and the Contractor include: to 

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

84 the Project as required by law; to guard reasonably against Project Water shortages; to achieve a 

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

86 applicable environmental statutes, all consistent with the legal obligations of the United States 

87 relative to the Project; and 

[15th 88 ] WHEREAS, the parties intend by this Contract to develop a more cooperative 

89 relationship in order to achieve their mutual goals; and 
Contract No.14-06-200-8367A-LTR1 

5

90 [15.2] WHEREAS, the Contractor desires to contract with DWR for conveyance of Project 

91 Water through the facilities of the State Water Project (SWP) as aforesaid under an arrangement 

92 wherein the United States will furnish the necessary power for pumping such water through DWR's 

93 Delta Pumping Plant and Dos Amigos Pumping Plant pursuant to the then-existing CVP Project use 

94 power policy; and 

95 [15.3] WHEREAS, DWR is willing to convey such water through State Facilities subject to 

96 needs and obligations of the SWP and the availability of transportation capacity and payment of costs 

97 as herein provided; and 

[16th 98 ] WHEREAS, the United States, DWR, and the Contractor are willing to enter into this 

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

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

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

102 DEFINITIONS

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

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

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

106 dates inclusive; 

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

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

109 by the Contracting Officer pursuant to this Contract; 

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

111 any Year such that the Contracting Officer is unable to deliver sufficient water to meet the Contract 

112 Total; 
Contract No.14-06-200-8367A-LTR1 

6

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

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

115 regulation; 

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

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

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

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

120 which may be modified from time to time in accordance with Article 35 of this Contract without 

121 amendment of this Contract; 

122 (f2) “Cross Valley Canal” shall mean the water conveyance and related works 

123 constructed by the Contractor and others to deliver water from the State Facilities, which canal 

124 currently is operated by KCWA; 

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

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

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

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

129 (96 Stat. 1263), as amended, hereinafter referred to as RRA; 

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

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

132 Reclamation law; 

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

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

135 Project irrigation or M&I functions, as appropriate, of facilities in service including all O&M deficits 
Contract No.14-06-200-8367A-LTR1 

7

136 funded, less payments, over such periods as may be required under Federal Reclamation law, or 

137 applicable contract provisions. Interest will accrue on both the construction expenditures and funded 

138 O&M deficits from October 12, 1982, on costs outstanding at that date, or from the date incurred in 

139 the case of costs arising subsequent to October 12, 1982, and shall be calculated in accordance with 

140 subsections 202(3)(B) and (3)(C) of the RRA. The Full Cost Rate includes actual operation, 

141 maintenance, and replacement costs consistent with Section 426.2 of the Rules and Regulations for 

142 the RRA; 

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

144 delivered in accordance with Section 204 of the RRA; 

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

146 the delivery of Irrigation Water; 

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

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

149 thereto, and watering of livestock; 

150 (m2) “KCWA” shall mean the Kern County Water Agency; 

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

152 nonexempt land, as provided in 43 CFR 426.2; 

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

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

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

156 kept for personal enjoyment or water delivered to land holdings operated in units of less than five 

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

158 water delivered to any such landholding is a use described in subdivision (m) of this Article; 
Contract No.14-06-200-8367A-LTR1 

8

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

160 delivery of M&I Water; 

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

162 care, control, operation, repair, replacement (other than capital replacement), and maintenance of 

163 Project facilities; 

164 (r) “Operating Non-Federal Entity” shall mean either the San Luis & 

165 Delta-Mendota Water Authority or the Friant Water Authority, their successors or assigns, non166 Federal entities which have the obligation to operate and maintain all or a portion of the Project 

167 facilities pursuant to agreements with the United States, and which may have funding obligations 

168 with respect thereto; 

169 (r2) “Operations Manual” shall mean the manual setting forth detailed operations 

170 and management procedures prepared by DWR, the Contracting Officer and the Contractor; 

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

172 and managed by the Department of the Interior, Bureau of Reclamation; 

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

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

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

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

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

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

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

180 described in subdivision (a) of Article 7 of this Contract; 
Contract No.14-06-200-8367A-LTR1 

9

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

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

183 contract(s); 

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

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

186 through any agency of the Department of the Interior; 

187 (x2) “State Facilities” shall mean that portion of the SWP (including DWR's portion 

188 of joint facilities), necessary to convey Project Water from the Sacramento-San Joaquin Delta (Delta) 

189 to Reach 16A of the California Aqueduct; 

190 (x3) “SWP” shall mean the California State Water Project; 

191 (x4) “SWP Contractor” shall mean those entities with a long-term water supply 

192 contract for water deliveries of SWP water on the date this Contract is executed; 

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

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

195 (y2) “Transportation Minimum OMP&R Costs” and “Transportation Variable 

196 OMP&R Costs” shall mean those costs as defined in the long-term SWP contracts and as annually 

197 described in DWR Bulletin 132; 

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

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

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

201 that can be delivered to the Contractor for the upcoming Year as declared by the Contracting Officer, 

202 pursuant to subdivision (a) of Article 4 of this Contract; 
Contract No.14-06-200-8367A-LTR1 

10

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

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

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

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

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

208 TERM OF CONTRACT

209 2. (a) This Contract shall be effective March 1, 2005, through February 28, 2030. In 

210 the event the Contractor wishes to renew this Contract beyond February 28, 2030, the Contractor 

211 shall submit a request for renewal in writing to the Contracting Officer no later than two years prior 

212 to the date this Contract expires. The renewal of this Contract insofar as it pertains to the furnishing 

213 of Irrigation Water to the Contractor shall be governed by subdivision (b) of this Article, and the 

214 renewal of this Contract insofar as it pertains to the furnishing of M&I Water to the Contractor shall 

215 be governed by subdivision (c) of this Article. The term of this Contract and its renewal insofar as it 

216 pertains to conveyance of water in SWP Facilities shall be governed by subdivision (e) of this Article. 

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

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

219 of contract renewal the conditions set forth in subdivision (b)(2) of this Article are met, and subject to 

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

221 Contractor, shall be renewed for a period of 25 years. 

222 (2) The conditions which must be met for this Contract to be renewed are: 

223 (i) the Contractor has prepared a water conservation plan that has been determined by the Contracting 

224 Officer in accordance with Article 26 of this Contract to meet the conservation and efficiency criteria 

225 for evaluating such plans established under Federal law; (ii) the Contractor is implementing an 
Contract No.14-06-200-8367A-LTR1 

11

226 effective water conservation and efficiency program based on the Contractor’s water conservation 

227 plan as required by Article 26 of this Contract; (iii) the Contractor is maintaining all water measuring 

228 devices and implementing all water measurement methods as approved by the Contracting Officer 

229 pursuant to Article 6 of this Contract; (iv) the Contractor has reasonably and beneficially used the 

230 Project Water supplies made available to it and, based on projected demands, is reasonably 

231 anticipated and expects to fully utilize for reasonable and beneficial use the quantity of Project Water 

232 to be made available to it pursuant to such renewal; (v) the Contractor is complying with all terms 

233 and conditions of this Contract; and (vi) the Contractor has the physical and legal ability to deliver 

234 Project Water. 

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

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

237 with the parties’ respective legal rights and obligations, and in consideration of all relevant facts and 

238 circumstances, as those circumstances exist at the time of renewal, including, without limitation, the 

239 Contractor’s need for continued delivery of Project Water; environmental conditions affected by 

240 implementation of the Contract to be renewed, and specifically changes in those conditions that 

241 occurred during the life of the Contract to be renewed; the Secretary’s progress toward achieving the 

242 purposes of the CVPIA as set out in Section 3402 and in implementing the specific provisions of the 

243 CVPIA; and current and anticipated economic circumstances of the region served by the Contractor. 

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

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

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

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

248 the opportunity to comment to the Contracting Officer on the proposed adoption and application of 
Contract No.14-06-200-8367A-LTR1 

12

249 any revised policy applicable to the delivery of M&I Water that would limit the term of any 

250 subsequent renewal contract with the Contractor for the furnishing of M&I Water to less than 40 

251 years. 

252 (d) The Contracting Officer shall make a determination ten years after the date of 

253 execution of this Contract, and every five years thereafter during the term of this Contract, of whether 

254 a conversion of the relevant portion of this Contract to a contract under subsection 9(d) of the 

255 Reclamation Project Act of 1939 can be accomplished pursuant to the Act of July 2, 1956 

256 (70 Stat. 483). The Contracting Officer shall also make a determination ten years after the date of 

257 execution of this Contract and every five years thereafter during the term of the Contract of whether a 

258 conversion of the relevant portion of this Contract to a contract under subsection 9(c)(1) of the 

259 Reclamation Project Act of 1939 can be accomplished. Notwithstanding any provision of this 

260 Contract, the Contractor reserves and shall have all rights and benefits under the Act of July 2, 1956 

261 (70 Stat 483). The Contracting Officer anticipates that during the term of this Contract, all authorized 

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

263 agrees upon such completion to allocate all costs that are properly assignable to the Contractor, and 

264 agrees further that, at any time after such allocation is made, and subject to satisfaction of the 

265 conditions set out in this subdivision, this Contract shall, at the request of the Contractor, be 

266 converted to a contract under subsection 9(d) or 9(c)(1), whichever is applicable, of the Reclamation 

267 Project Act of 1939, subject to applicable Federal law and under stated terms and conditions mutually 

268 agreeable to the Contractor and the Contracting Officer. A condition for such conversion to occur 

269 shall be a determination by the Contracting Officer that, account being taken of the amount credited 

270 to return by the Contractor as provided for under Federal Reclamation law, the remaining amount of 

271 construction costs assignable for ultimate return by the Contractor can probably be repaid to the 
Contract No.14-06-200-8367A-LTR1 

13

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

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

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

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

276 such a determination as soon thereafter as possible so as to permit, upon request of the Contractor and 

277 satisfaction of the conditions set out above, conversion to a contract under subsection 9(d) or 9(c)(1), 

278 whichever is applicable. In the event such determination of costs has not been made at a time which 

279 allows conversion of this Contract during the term of this Contract or the Contractor has not 

280 requested conversion of this Contract within such term, the parties shall incorporate in any 

281 subsequent renewal contract as described in subdivision (b) of this Article a provision that carries 

282 forth in substantially identical terms the provisions of this subdivision. 

283 (e) DWR’s agreement to convey water under this Contract shall be effective until 

284 February 28, 2030. Thereafter, DWR and the Contractor may renew the agreement to convey for 

285 additional periods on terms mutually agreeable to the parties. The parties acknowledge that operation 

286 of the SWP, including the State Facilities, is not, and shall not be, subject to Federal Reclamation 

287 law. 

288 WATER TO BE MADE AVAILABLE AND DELIVERED TO THE CONTRACTOR

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

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

291 Contract, the Contracting Officer shall make available in the Delta for delivery to the Contractor 

292 13,300 acre-feet of Project Water for irrigation and M&I purposes. Cross Valley Contractors shall 

293 have a primary priority to pumping capacity made available by the SWP for CVP purposes up to the 

294 allocation made for CVP irrigation contractors south of the Delta. Allocations of water supply to 
Contract No.14-06-200-8367A-LTR1 

14

295 Cross Valley Contractors and any additional pumping capacity made available by SWP for Cross 

296 Valley Contractor’s purposes shall be addressed in the Operations Manual. Water Delivered to the 

297 Contractor in accordance with this subdivision shall be scheduled, and paid for pursuant to the 

298 provisions of Articles 4 and 7 of this Contract, attached exhibits, and the Operations Manual 

299 (including any subsequent modifications thereto). 

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

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

302 hydrologic conditions and implementation of Federal and State laws, the likelihood of the Contractor 

303 actually receiving the full amount of Project Water set out in subdivision (a) of this Article in any 

304 given Year is uncertain. The Contracting Officer’s modeling referenced in the PEIS projected that 

305 the Contract Total set forth in this Contract will not be available to the Contractor in many years. 

306 During the most recent five years, the Recent Historic Average of water made available to the 

307 Contractor was 8,751 acre-feet. Nothing in subdivision (b) of this Article shall affect the rights and 

308 obligations of the parties under any provision of this Contract. 

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

310 legal requirements. 

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

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

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

314 Water or other water furnished pursuant to this Contract conducted within the Contractor’s Service 

315 Area which are consistent with applicable State law and result in use consistent with Federal 

316 Reclamation law will be allowed; Provided, That any direct recharge program(s) is (are) described in 

317 the Contractor’s water conservation plan submitted pursuant to Article 26 of this Contract; Provided, 
Contract No.14-06-200-8367A-LTR1 

15

318 further, That such water conservation plan demonstrates sufficient lawful uses exist in the 

319 Contractor’s Service Area so that using a long-term average, the quantity of Delivered Water is 

320 demonstrated to be reasonable for such uses and in compliance with Federal Reclamation law. 

321 Groundwater recharge programs, groundwater banking programs, surface water storage programs, 

322 and other similar programs utilizing Project Water or other water furnished pursuant to this Contract 

323 conducted outside the Contractor’s Service Area may be permitted upon written approval of the 

324 Contracting Officer, which approval will be based upon environmental documentation, Project Water 

325 rights, and Project operational concerns. The Contracting Officer will address such concerns in 

326 regulations, policies, or guidelines. 

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

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

329 undertaken pursuant to Section 7 of the Endangered Species Act of 1973 (ESA), as amended, that are 

330 within the Contractor’s legal authority to implement. The Existing Contract, which evidences in 

331 excess of 28 years of diversions for irrigation and/or M&I purposes of the quantities of water 

332 provided in subdivision (a) of Article 3 of this Contract, will be considered in developing an 

333 appropriate baseline for the biological assessment(s) prepared pursuant to the ESA, and any other 

334 needed environmental review. Nothing herein shall be construed to prevent the Contractor from 

335 challenging or seeking judicial relief in a court of competent jurisdiction with respect to any 

336 biological opinion or other environmental documentation referred to in this Article. 

337 (f) Following the declaration of Water Made Available under Article 4 of this 

338 Contract, the Contracting Officer will make a determination whether Project Water, or other water 

339 available to the Project, can be made available to the Contractor in addition to the Contract Total 

340 under Article 3 of this Contract during the Year without adversely impacting other Project 
Contract No.14-06-200-8367A-LTR1 

16

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

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

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

344 Contracting Officer will announce the availability of such water and shall so notify the Contractor as 

345 soon as practicable. The Contracting Officer will thereafter meet with the Contractor and other 

346 Project Contractors capable of taking such water to determine the most equitable and efficient 

347 allocation of such water. If the Contractor requests the delivery of any quantity of such water, the 

348 Contracting Officer shall make such water available to the Contractor in accordance with applicable 

349 statutes, regulations, guidelines, and policies. If the Contracting Officer determines that there is an 

350 unusually large water supply not otherwise storable for Project purposes or infrequent and otherwise 

351 unmanaged flood flows of short duration from the Friant Division, then Friant Division Project Water 

352 may be made available to the Contractor as Section 215 Water if the Contractor enters into a 

353 temporary contract, not to exceed one year, with the United States for the delivery of such water or, 

354 as otherwise provided for in Federal Reclamation law and associated regulations: Provided, That 

355 such water shall be first made available to the original 28 long-term Friant Division contractors. 

356 Water in addition to the quantities provided for in this Contract made available to the Contractor by 

357 the Contracting Officer shall be scheduled, conveyed and/or stored by DWR only to the extent that 

358 DWR has provided separate approval to do so. 

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

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

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

362 quantity of Project Water which may be made available by the United States to the Contractor during 
Contract No.14-06-200-8367A-LTR1 

17

363 the subsequent Year referred to as “preuse.” The Contracting Officer’s written approval may permit 

364 such uses in accordance with applicable statutes, regulations, guidelines, and policies. 

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

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

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

368 the terms thereof shall not be disturbed so long as the Contractor shall fulfill all of its obligations 

369 under this Contract and any renewals thereof. Nothing in the preceding sentence shall affect the 

370 Contracting Officer’s ability to impose shortages under Article 11 or subdivision (b) of Article 12 of 

371 this Contract or applicable provisions of any subsequent renewal contracts. 

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

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

374 Contract upon written approval by the Contracting Officer in accordance with the terms and 

375 conditions of such approval. 

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

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

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

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

380 That the Contracting Officer retains the right to object to the substance of the Contractor’s position in 

381 such a proceeding; Provided further, That in such proceedings the Contracting Officer shall recognize 

382 the Contractor has a legal right under the terms of the contract to use Project Water. 

383 (k) Conveyance and/or storage of Project Water by DWR shall be subject to 

384 capacity available in State Facilities in excess of capacity determined by DWR in its sole discretion 

385 to be needed for all SWP operations. For purposes of determining the available capacity under this 
Contract No.14-06-200-8367A-LTR1 

18

386 Contract, the deliveries of Project Water to the Contractor shall not be considered a “service to long387 term SWP Contractors,” notwithstanding any arrangement the Contractor may have with a SWP 

388 Contractor. Conveyance and/or storage for the Contractor may be curtailed prior or subsequent to 

389 approval of the Contractor's schedule under Article 4 of this Contract, in the event DWR determines 

390 it will interfere with the delivery of water to SWP Contractors or other SWP operations necessary to 

391 meet long-term obligations of the SWP, including delivery of water to SWP storage or reregulation of 

392 stored water for delivery to SWP Contractors. 

393 (l) If in any Year after DWR and the Contracting Officer have approved a 

394 schedule or any revision thereof submitted in accordance within subdivision (a) and (b) of Article 4 

395 of this Contract, and if the Contracting Officer and/or DWR are unable to make water of suitable 

396 quality available in the quantities and at the times requested in the schedule and the Contractor does 

397 not elect to receive and does not receive such water at other times during such Year, then the 

398 Contractor shall be entitled to an adjustments for overpayment as provided in subdivision (c) of 

399 Article 7, subdivision (d) of Article 8, and Article 10 of this Contract. Notwithstanding any other 

400 provision of law, this shall be the Contractor’s sole remedy against the State of California, DWR, its 

401 officers, agents, and employees for failure to deliver a quantity of water of suitable quality under this 

402 Contract for any reason. 

403 TIME FOR DELIVERY OF WATER

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

405 announce the Contracting Officer’s expected declaration of the Water Made Available. Such 

406 declaration will be expressed in terms of both Water Made Available and the Recent Historic 

407 Average and will be updated monthly, and more frequently if necessary, based on then-current 

408 operational and hydrologic conditions and a new declaration with changes, if any, to the Water Made 
Contract No.14-06-200-8367A-LTR1 

19

409 Available will be made. The Contracting Officer shall provide forecasts of Project operations and the 

410 basis of the estimate, with relevant supporting information, upon the written request of the 

411 Contractor. Concurrently with the declaration of the Water Made Available, the Contracting Officer 

412 shall provide the Contractor with the updated Recent Historic Average. The declaration of Project 

413 operations will be expressed in terms of both Water Made Available and the Recent Historic 

414 Average. 

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

416 Contractor, after approval of the requesting agency on behalf of the Contractor, shall submit to DWR 

417 and the Contracting Officer a written schedule, satisfactory to the Contracting Officer and consistent 

418 with the criteria specified in the Operations Manual. The written schedule shall show the monthly 

419 quantities of Project Water to be delivered by the United States to the Contractor pursuant to this 

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

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

422 March 1. 

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

424 Project Water the Contractor intends to put to reasonable and beneficial use within the Contractor's 

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

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

427 Contract, the United States and DWR shall deliver Project Water to the Contractor in accordance 

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

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

430 time prior to the date(s) on which the requested change(s) is/are to be implemented. 
Contract No.14-06-200-8367A-LTR1 

20

431 (e) Scheduling and delivery of Project Water to the Contractor shall be in 

432 accordance with detailed procedures set forth in the Operations Manual as it may be amended from 

433 time to time. 

434 POINT OF DIVERSION AND RESPONSIBILITY FOR DISTRIBUTION OF WATER

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

436 Contract shall be delivered to the Contractor at a point or points of delivery either on Project and/or 

437 State facilities or another location or locations mutually agreed to in writing by the Contracting 

438 Officer, DWR, and the Contractor. The parties acknowledge that Project Water to be furnished to the 

439 Contractor pursuant to this Contract shall be conveyed by DWR and delivered to the Contractor by 

440 direct delivery via the Cross Valley Canal and/or by exchange arrangements involving Arvin-Edison 

441 Water Storage District or others. The parties further acknowledge that such exchange arrangements 

442 are not transfers subject to Section 3405(a) of CVPIA. Notwithstanding Article 9 of this Contract, 

443 such exchange arrangements, other than the previously approved exchange arrangements with Arvin444 Edison Water Storage District, shall be submitted to the Contracting Officer for approval in 

445 accordance with principles historically applied by the Contracting Officer in approving Cross Valley 

446 exchange arrangements. DWR shall have no obligation to make such exchange arrangements or be 

447 responsible for water transported in facilities that are not a part of the SWP. 

448 (b) Omitted. 

449 (b2) When Project Water is made available by the Contracting Officer at Clifton 

450 Court Forebay, DWR shall provide to the Contractor, subject to the availability of capacity as 

451 determined by DWR, conveyance from the Delta and storage in DWR’s share of storage at San Luis 

452 Reservoir, if necessary, of such Project Water consistent with subdivision (k) of Article 3, the 

453 following provisions, and the Operations Manual; 
Contract No.14-06-200-8367A-LTR1 

21

454 (1) The Contracting Officer shall deliver or cause to be delivered into the 

455 DWR's Clifton Court Forebay, or at other points mutually agreed to by the parties in accordance with 

456 Article 5, Project Water in such quantities and of such quality as shall be sufficient to perform the 

457 Contracting Officer's and DWR's obligation to furnish water to the Contractor as set forth in this 

458 contract. Such deliveries into Clifton Court Forebay shall be made at such times and rates of flow as 

459 the Contracting Officer and DWR shall agree. 

460 (2) DWR, in accordance with an approved Project Water delivery 

461 schedule, shall convey the amount of water delivered into DWR's Clifton Court Forebay by the 

462 Contracting Officer directly: (i) to turnouts from the California Aqueduct from Reaches 3 through 

463 16A or to other points of diversion mutually agreed to in writing by DWR and the Contractor, or (ii) 

464 to DWR or Federal share of storage in San Luis Reservoir for later release and delivery to the 

465 Contractor or (iii) to replace water delivered to the Contractor from DWR's share of San Luis 

466 Reservoir prior to DWR receiving Project Water from the Contracting Officer, to the extent DWR 

467 determines under subdivision (k) of Article 3 that capacity (and water in the event of an exchange) is 

468 available for such conveyance, storage, or exchange (if any). Such deliveries of Project Water shall 

469 be required to be made pursuant to subdivision (k) of Article 3 and in a manner which will not 

470 increase the cost of or adversely affect SWP operations and the quantity or quality of water deliveries 

471 to SWP Contractors. 

472 (3) If DWR delivers water to the Contractor from DWR's share of storage 

473 in San Luis Reservoir prior to the Contracting Officer providing Project Water at DWR's Clifton 

474 Court Forebay, the United States shall return a like amount of water to DWR pursuant to the 

475 procedures set forth in the Operations Manual. 
Contract No.14-06-200-8367A-LTR1 

22

476 (4) The total amount of Project Water delivered at Clifton Court Forebay to 

477 DWR by the Contracting Officer shall include water to compensate DWR for water conveyance and 

478 storage losses incurred in the delivery of Project Water to the Contractor. The amount of such 

479 conveyance and storage losses will be determined pursuant to procedures set forth in the Operations 

480 Manual. 

481 (5) Project Water received by DWR at Clifton Court Forebay for 

482 conveyance and/or storage for delivery to the Contractor will be commingled with waters of DWR 

483 which are pumped through facilities of the California Aqueduct and with other waters of both the 

484 United States and DWR in the joint use facilities of the San Luis Unit. 

485 (6) Priorities for use of DWR's share of storage at San Luis Reservoir for 

486 storage of Project Water shall be subject to subdivision (k) of Article 3 and all DWR obligations to 

487 the SWP operations and SWP Contractors and to the criteria specified in the Operations Manual. 

488 (7) Subject to the necessary arrangements, the Contracting Officer shall 

489 transmit or cause to be transmitted, by exchange or otherwise, such quantities of power as shall be 

490 required by DWR to pump through its Delta Pumping Plant and its share of Dos Amigos Pumping 

491 Plant, the quantities of Project Water transported into Clifton Court Forebay pursuant to (1) of this 

492 subdivision. 

493 (8) DWR shall furnish the Contracting Officer with such information as the 

494 Contracting Officer and DWR agree is needed regarding the timing and quantities of power required 

495 by DWR to pump Project Water. Such information shall be exchanged between the Contracting 

496 Officer and DWR in accordance with provisions set forth in the Operations Manual. 

497 (9) The Contracting Officer and DWR may, under terms and conditions 

498 satisfactory to both, and in accordance with applicable law, exchange water and/or power necessary 
Contract No.14-06-200-8367A-LTR1 

23

499 for delivery of Project Water to the Contractor under terms of this Contract. Such exchange shall be 

500 in accordance with the provisions set forth in the Operations Manual. 

501 (b3) To the extent that Friant Division Project Water exceeds Friant Division 

502 Contract demand and other Project purposes, as determined by the Contracting Officer, and if the 

503 Contractor so requests, the Contracting Officer, subject to subdivision (d) of Article 3 of this 

504 Contract, shall make Project Water provided for in subdivision (a) of Article 3 of this Contract 

505 available from such Friant Division supplies. 

506 (b4) Project Water may be provided by the Contracting Officer to the Contractor, at 

507 the Contractor's request and subject to the terms and conditions of this Contract, through Federal 

508 Delta diversion and conveyance facilities and/or stored in the Federal share of storage at San Luis 

509 Reservoir for reregulation for later delivery to the Contractor to the extent such diversion, 

510 conveyance and/or storage does not diminish the ability of the Project to deliver Project Water to 

511 users in the Delta Division, San Luis Unit and San Felipe Division service areas pursuant to existing 

512 contracts and assignments or any renewals thereof, to meet current Reclamation commitments to 

513 Pajaro Valley Water Management Agency, or to meet other legal obligations of the Project including, 

514 but not limited to agreements related to the joint operation of the state and Federal projects. 

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

516 applicable land classification provisions of Federal Reclamation law and the associated regulations. 

517 The Contractor shall not deliver Project Water to land outside the Contractor's Service Area unless 

518 approved in advance by the Contracting Officer. 

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

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

521 United States, DWR or the Operating Non-Federal Entity/Entities at the point or points of delivery 
Contract No.14-06-200-8367A-LTR1 

24

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

523 Contract, the Contracting Officer or DWR shall investigate, or cause to be investigated by the 

524 appropriate Operating Non-Federal Entity, the accuracy of such measurements and shall take any 

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

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

527 appropriate Operating Non-Federal Entity prior to making a final determination of the quantity 

528 delivered for that period of time. 

529 (e) Neither the Contracting Officer, nor DWR, nor any Operating Non-Federal 

530 Entity/Entities shall be responsible for the control, carriage, handling, use, disposal, or distribution of 

531 Water Delivered to the Contractor pursuant to this Contract beyond the delivery points specified in 

532 subdivision (a) of this Article. The Contractor shall indemnify the United States, DWR, and their 

533 officers, employees, agents, and assigns on account of damage or claim of damage of any nature 

534 whatsoever for which there is legal responsibility, including property damage, personal injury, or 

535 death arising out of or connected with the control, carriage, handling, use, disposal, or distribution of 

536 such Water Delivered beyond such delivery points, except for any damage or claim arising out of: 

537 (i) acts or omissions of the Contracting Officer, DWR, or any of their officers, employees, agents, or 

538 assigns, including the Operating Non-Federal Entity/Entities, with the intent of creating the situation 

539 resulting in any damage or claim; (ii) willful misconduct of the Contracting Officer, DWR, or any of 

540 their officers, employees, agents, or assigns, including the Operating Non-Federal Entity/Entities; 

541 (iii) negligence of the Contracting Officer or any of his officers, employees, agents, or assigns 

542 including the Operating Non-Federal Entity/Entities; or (iv) damage or claims resulting from a 

543 malfunction of facilities owned and/or operated by the United States, DWR, or the Operating Non544 Federal Entity/Entities; Provided, That the Contractor is not the Operating Non-Federal Entity that 
Contract No.14-06-200-8367A-LTR1 

25

545 owned or operated the malfunctioning facility(ies) from which the damage claim arose. In the event 

546 any such claim or liability, referenced in this Article or otherwise arising from this Contract, is made 

547 against DWR, its officers or its employees, the Contractor agrees to defend, indemnify and hold each 

548 of them harmless from such claim to the extent such claim does not arise from an error or 

549 omission of DWR related to the carriage and control of Project Water made available to the 

550 Contractor by the Contracting Officer. 

551 MEASUREMENT OF WATER WITHIN THE CONTRACTOR’S SERVICE AREA

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

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

554 purposes within the Contractor’s Service Area is measured at each agricultural turnout and such 

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

556 measuring devices or water measuring methods of comparable effectiveness must be acceptable to 

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

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

559 methods at no cost to the United States. The Contractor shall use the information obtained from such 

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

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

562 for M&I purposes by customer class as defined in the Contractor’s water conservation plan provided 

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

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

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

566 report described in subdivision (c) of Article 26. 
Contract No.14-06-200-8367A-LTR1 

26

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

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

569 the measurement devices or water measuring methods being used or to be used to implement 

570 subdivision (a) of this Article and identifying the agricultural turnouts and the M&I service 

571 connections or alternative measurement programs approved by the Contracting Officer, at which such 

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

573 locations at which such devices and/or methods are not yet being used including a time schedule for 

574 implementation at such locations. The Contracting Officer shall advise the Contractor in writing 

575 within 60 days as to the adequacy of, and necessary modifications, if any, of the measuring devices or 

576 water measuring methods identified in the Contractor’s report and if the Contracting Officer does not 

577 respond in such time, they shall be deemed adequate. If the Contracting Officer notifies the 

578 Contractor that the measuring devices or methods are inadequate, the parties shall within 60 days 

579 following the Contracting Officer>s response, negotiate in good faith the earliest practicable date by 

580 which the Contractor shall modify said measuring devices and/or measuring methods as required by 

581 the Contracting Officer to ensure compliance with subdivision (a) of this Article. 

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

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

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

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

586 in writing by April 30 of each Year of the monthly volume of surface water delivered within the 

587 Contractor’s Service Area during the previous Year. 
Contract No.14-06-200-8367A-LTR1 

27

588 (e) The Contractor shall inform the Contracting Officer, DWR, and the Operating 

589 Non-Federal Entity/Entities on or before the 20th calendar day of each month of the quantity of 

590 Irrigation and M&I Water taken during the preceding month. 

591 RATES AND METHOD OF PAYMENT FOR WATER

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

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

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

595 then-existing ratesetting policy for M&I Water. Such ratesetting policies shall be amended, 

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

597 Reclamation law and associated rules and regulations, or policies; and (iii) other applicable 

598 provisions of this Contract. Payments shall be made by cash transaction, electronic funds transfer, or 

599 any other mechanism as may be agreed to in writing by the Contractor and the Contracting Officer. 

600 The Rates, Charges, and Tiered Pricing Component applicable to the Contractor upon execution of 

601 this Contract are set forth in Exhibit “B,” as may be revised annually. 

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

603 Tiered Pricing Component as follows: 

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

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

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

607 the basis for such estimate. The Contractor shall be allowed not less than two months to review and 

608 comment on such estimates. On or before September 15 of each Calendar Year, the Contracting 

609 Officer shall notify the Contractor in writing of the Charges to be in effect during the period 
Contract No.14-06-200-8367A-LTR1 

28

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

611 such notification shall revise Exhibit “B”. 

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

613 make available to the Contractor an estimate of the Rates and Tiered Pricing Component for Project 

614 Water for the following Year and the computations and cost allocations upon which those Rates are 

615 based. The Contractor shall be allowed not less than two months to review and comment on such 

616 computations and cost allocations. By December 31 of each Calendar Year, the Contracting Officer 

617 shall provide the Contractor with the final Rates and Tiered Pricing Component to be in effect for the 

618 upcoming Year, and such notification shall revise Exhibit “B”. 

619 (c) Except as otherwise provided in the Operations Manual, at the time the 

620 Contractor submits the initial schedule for the delivery of Project Water for each Year pursuant to 

621 subdivision (b) of Article 4 of this Contract, the Contractor shall make an advance payment to the 

622 United States equal to the total amount payable pursuant to the applicable Rate(s) set under 

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

624 Contract during the first two calendar months of the Year. Before the end of the first month and 

625 before the end of each calendar month thereafter, the Contractor shall make an advance payment to 

626 the United States, at the Rate(s) set under subdivision (a) of this Article, for the Water Scheduled to 

627 be delivered pursuant to this Contract during the second month immediately following. Adjustments 

628 between advance payments for Water Scheduled and payments at Rates due for Water Delivered 

629 shall be made before the end of the following month; Provided, That any revised schedule submitted 

630 by the Contractor pursuant to Article 4 of this Contract which increases the amount of Water 

631 Delivered pursuant to this Contract during any month shall be accompanied with appropriate advance 

632 payment, at the Rates then in effect, to assure that Project Water is not delivered to the Contractor in 
Contract No.14-06-200-8367A-LTR1 

29

633 advance of such payment. In any month in which the quantity of Water Delivered to the Contractor 

634 pursuant to this Contract equals the quantity of Water Scheduled and paid for by the Contractor, no 

635 additional Project Water shall be delivered to the Contractor unless and until an advance payment at 

636 the Rates then in effect for such additional Project Water is made. Final adjustment between the 

637 advance payments for the Water Scheduled and payments for the quantities of Water Delivered 

638 during each Year pursuant to this Contract shall be made as soon as practicable but no later than 

639 April 30th of the following Year, or 60 days after the delivery of Project Water carried over under 

640 subdivision (g) of Article 3 of this Contract if such water is not delivered by the last day of February. 

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

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

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

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

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

646 with the quantities of Irrigation Water and M&I Water Delivered as shown in the water delivery 

647 report for the subject month prepared by the Operating Non-Federal Entity/Entities or, if there is no 

648 Operating Non-Federal Entity/Entities, by the Contracting Officer. The water delivery report shall be 

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

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

651 adjustment of payments due to the United States for Charges for the next month. Any amount to be 

652 paid for past due payment of Charges and the Tiered Pricing Component shall be computed pursuant 

653 to Article 20 of this Contract. 

654 (e) The Contractor shall pay for any Water Delivered under subdivision (a), (f), or 

655 (g) of Article 3 of this Contract as determined by the Contracting Officer pursuant to applicable 
Contract No.14-06-200-8367A-LTR1 

30

656 statutes, associated regulations, any applicable provisions of guidelines or ratesetting policies; 

657 Provided, That the Rate for Water Delivered under subdivision (f) of Article 3 of this Contract shall 

658 be no more than the otherwise applicable Rate for Irrigation Water or M&I Water under subdivision 

659 (a) of this Article. 

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

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

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

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

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

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

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

667 of the financial terms and conditions of its long-term contracts, in accordance with applicable Federal 

668 standards, so as to reflect the application of Project costs and revenues. The Contracting Officer 

669 shall, each Year upon request of the Contractor, provide to the Contractor a detailed accounting of all 

670 Project and Contractor expense allocations, the disposition of all Project and Contractor revenues, 

671 and a summary of all water delivery information. The Contracting Officer and the Contractor shall 

672 enter into good faith negotiations to resolve any discrepancies or disputes relating to accountings, 

673 reports, or information. 

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

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

676 policies, and procedures used for establishing Rates, Charges, and Tiered Pricing Components, and/or 

677 for making and allocating payments, other than those set forth in this Article may be in the mutual 

678 best interest of the parties, it is expressly agreed that the parties may enter into agreements to modify 
Contract No.14-06-200-8367A-LTR1 

31

679 the mechanisms, policies, and procedures for any of those purposes while this Contract is in effect 

680 without amending this Contract. 

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

682 80 percent of the Contract Total, then before the end of the month following the month of delivery 

683 the Contractor shall make an additional payment to the United States equal to the applicable Tiered 

684 Pricing Component. The Tiered Pricing Component for the amount of Water Delivered in excess of 

685 80 percent of the Contract Total, but less than or equal to 90 percent of the Contract Total, shall equal 

686 one-half of the difference between the Rate established under subdivision (a) of this Article and the 

687 Irrigation Full Cost Water Rate or M&I Full Cost Water Rate, whichever is applicable. The Tiered 

688 Pricing Component for the amount of Water Delivered which exceeds 90 percent of the Contract 

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

690 and (ii) the Irrigation Full Cost Water Rate or M&I Full Cost Water Rate, whichever is applicable. 

691 For all Water Delivered pursuant to subdivision (a) of Article 3 of this Contract which is in excess of 

692 80 percent of the Contract Total, this increment shall be deemed to be divided between Irrigation 

693 Water and M&I Water in the same proportion as actual deliveries of each bear to the cumulative total 

694 Water Delivered. 

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

696 may request and receive an exemption from such Tiered Pricing Components for Project Water 

697 delivered to produce a crop which the Contracting Officer determines will provide significant and 

698 quantifiable habitat values for waterfowl in fields where the water is used and the crops are produced; 

699 Provided, That the exemption from the Tiered Pricing Component for Irrigation Water shall apply 

700 only if such habitat values can be assured consistent with the purposes of the CVPIA through binding 

701 agreements executed with or approved by the Contracting Officer prior to use of such water. 
Contract No.14-06-200-8367A-LTR1 

32

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

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

704 transfers to others but shall not include Project Water transferred to the Contractor, nor shall it 

705 include the additional water provided to the Contractor under the provisions of subdivision (f) of 

706 Article 3 of this Contract. 

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

708 will be established to recover only reimbursable O&M (including any deficits) and capital costs of 

709 the Project, as those terms are used in the then-current Project ratesetting policies, and interest, where 

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

711 Project ratesetting policy. Changes of significance in practices which implement the Contracting 

712 Officer’s ratesetting policies will not be implemented until the Contracting Officer has provided the 

713 Contractor an opportunity to discuss the nature, need, and impact of the proposed change. 

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

715 the Rates for Project Water transferred by the Contractor shall be the Contractor’s Rates adjusted 

716 upward or downward to reflect the changed costs if any incurred by the Contracting Officer in the 

717 delivery of the transferred Project Water to the transferee’s point of delivery in accordance with the 

718 then-applicable Project ratesetting policy. If the Contractor is receiving lower Rates and Charges 

719 because of inability to pay and is transferring Project Water to another entity whose Rates and 

720 Charges are not adjusted due to inability to pay, the Rates and Charges for transferred Project Water 

721 shall be the Contractor’s Rates and Charges and will not be adjusted to reflect the Contractor’s 

722 inability to pay. 

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

724 Officer is authorized to adjust determinations of ability to pay every five years. 
Contract No.14-06-200-8367A-LTR1 

33

725 (n) With respect to the Rates for M&I Water the Contractor asserts that it is not 

726 legally obligated to pay any Project deficits claimed by the United States to have accrued as of the 

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

728 Contractor does not waive any legal rights or remedies that it may have with respect to such disputed 

729 issues. Notwithstanding the execution of this Contract and payments made hereunder, the Contractor 

730 may challenge in the appropriate administrative or judicial forums: (1) the existence, computation, or 

731 imposition of any deficit charges accruing during the term of the Existing Contract and any preceding 

732 interim renewal contracts, if applicable; (2) interest accruing on any such deficits; (3) the inclusion of 

733 any such deficit charges or interest in the Rates; (4) the application by the United States of payments 

734 made by the Contractor under its Existing Contract and any preceding interim renewal contracts, if 

735 applicable; and (5) the application of such payments in the Rates. The Contracting Officer agrees 

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

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

738 Provided, That the basis for such ruling is applicable to the Contractor. 

739 (o) The Contractor and the Contracting Officer concur that, as of the effective date 

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

741 liability therefor. 

742 RATES AND METHOD OF PAYMENT FOR CONVEYANCE

743 AND OTHER SERVICES BY DWR

744 8. (a) To the extent Project Water is conveyed through State Facilities, payment for 

745 conveyance of water through the State Facilities shall be made by the Contractor directly to DWR. 

746 Exhibit C sets forth the charges and interest rates applicable at the time this long-term renewal 

747 contract is executed. DWR shall invoice the Contractor monthly for all conveyance charges owing 

748 for the previous month. Payment by the Contractor to DWR shall be due 30 days after the date of the 
Contract No.14-06-200-8367A-LTR1 

34

749 invoice. Any payment not received within 30 days after the date of the invoice shall be considered 

750 delinquent. Delinquent charges shall be calculated in accordance with Exhibit "C" of this Contract; 

751 Provided, That no interest shall be charged to or be paid by the Contractor unless such delinquency 

752 continues for more than 30 days in total. 

753 (b) Omitted. 

754 (c) Conveyance charges for the Contractor shall be determined by DWR on the 

755 same basis it uses to determine conveyance charges for use of SWP facilities by entities that are not 

756 SWP contractors. The method for determining this charge is described in DWR’s annual Bulletin 

757 132. The charge for conveyance of water under this Contract shall be set forth in Exhibit “C” of this 

758 Contract and revised annually. 

759 (1) In accordance with subdivision (c) of this Article, when DWR provides 

760 conveyance directly from the Delta or from the Federal share of storage at San Luis Reservoir, the 

761 unit conveyance charge shall equal at a minimum the sum of the following, as determined by DWR: 

762 (i) The equivalent unit transportation capital and Minimum OMP&R Costs for those reaches of the 

763 California Aqueduct utilized for the delivery; (ii) The portion of the Delta Water Rate for Reaches 1, 

764 2A, 2B, and 3 of the California Aqueduct; (iii) The replacement component of the Transportation 

765 Variable OM&R Costs for the Harvey O. Banks Delta Pumping Plant and DWR's share of the Dos 

766 Amigos Pumping Plant; (iv) A charge to offset direct fish losses associated with pumping at the 

767 Banks Pumping Plant, pursuant to the December 30, 1986, agreement between the California 

768 Department of Fish and Game and DWR; and (v) The incremental costs, if any, caused by the 

769 conveyance and delivery of Project Water to the Contractor which, unless included in the increased 

770 charges to the Contractor, would result in increased charges to the SWP Contractors or increased 

771 costs to DWR. 
Contract No.14-06-200-8367A-LTR1 

35

772 (2) When DWR provides conveyance from the State’s share of storage in 

773 San Luis Reservoir, the unit charge shall equal the sum of the following as determined by DWR: (i) 

774 The San Luis Facilities portion of the Delta Water Rate; (ii) The net unit energy cost to replace water 

775 in San Luis Reservoir; and (iii) The sum of all unit charges provided under subdivision (c)(1) of this 

776 Article. 

777 (d) Should DWR deliver Project Water to San Luis Reservoir on behalf of the 

778 Contractor and it is later determined by DWR that capacity to store such Project Water in DWR's 

779 share of San Luis Reservoir is no longer available because of need for such storage to meet SWP 

780 operations and obligations to SWP Contractors and the Contractor cannot take delivery of such 

781 Project Water, DWR shall relieve the Contractor of its obligations to pay DWR for all such Project 

782 Water so transported, stored, and no longer available to the Contractor. DWR shall reimburse the 

783 Contractor for payments which have previously been made to DWR for any such conveyed and 

784 stored supply, less the administrative charge described in subdivision (f) of this Article. 

785 (e) If the Contractor is unable, fails or refuses to accept delivery of Project Water 

786 made available by DWR in accordance with this Contract, such inability, failure or refusal shall not 

787 relieve the Contractor of its obligation to pay DWR all associated costs. 

788 (f) The Contractor shall pay DWR a monthly administrative charge specified in 

789 Exhibit “C” of this Contract for each month in which DWR conveys Project Water to the Contractor 

790 and for each month in which DWR invoices the Contractor for delinquent charges. 

791 SALES, TRANSFERS, OR EXCHANGES OF WATER

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

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

794 such sale, transfer, or exchange is authorized by applicable Federal and State laws, and applicable 
Contract No.14-06-200-8367A-LTR1 

36

795 guidelines or regulations then in effect. No sale, transfer, or exchange of Project Water under this 

796 Contract may take place without the prior written approval of the Contracting Officer, except as 

797 provided for in subdivision (b) of this Article, and no such sales, transfers, or exchanges shall be 

798 approved absent all appropriate environmental documentation including but not limited to documents 

799 prepared pursuant to NEPA and ESA. Such environmental documentation should include, as 

800 appropriate, an analysis of groundwater impacts and economic and social effects, including 

801 environmental justice, of the proposed water transfers on both the transferor and transferee. No sale, 

802 transfer or exchange of the right to Project Water under this Contract may take place without the prior 

803 written approval of the Contracting Officer and of DWR, if State Facilities are used to convey such 

804 water. 

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

806 the type historically carried out among Project Contractors located within the same geographical area 

807 and to allow the Contractor to participate in an accelerated water transfer program during the term of 

808 this Contract, the Contracting Officer shall prepare, as appropriate, all necessary environmental 

809 documentation including, but not limited to, documents prepared pursuant to NEPA and ESA 

810 analyzing annual transfers within such geographical areas and the Contracting Officer shall determine 

811 whether such transfers comply with applicable law. Following the completion of the environmental 

812 documentation, such transfers addressed in such documentation shall be conducted with advance 

813 notice to the Contracting Officer, but shall not require prior written approval by the Contracting 

814 Officer. Such environmental documentation and the Contracting Officer’s compliance determination 

815 shall be reviewed every five years and updated, as necessary, prior to the expiration of the then816 existing five-year period. All subsequent environmental documentation shall include an alternative to 
Contract No.14-06-200-8367A-LTR1 

37

817 evaluate not less than the quantity of Project Water historically transferred within the same 

818 geographical area. 

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

820 transfer must: (i) be for irrigation purposes for lands irrigated within the previous three years, for 

821 M&I use, groundwater recharge, groundwater banking, similar groundwater activities, surface water 

822 storage, or fish and wildlife resources; not lead to land conversion; and be delivered to established 

823 cropland, wildlife refuges, groundwater basins or M&I; (ii) occur within a single Year; (iii) occur 

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

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

826 Contractor and the United States, Department of the Interior; and (v) comply with all applicable 

827 Federal, State, and local or tribal laws and requirements imposed for protection of the environment 

828 and Indian Trust Assets, as defined under Federal law. 

829 APPLICATION OF PAYMENTS AND ADJUSTMENTS

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

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

832 the Contractor arising out of this Contract then due and payable. Overpayments of more than $1,000 

833 shall be refunded at the Contractor’s request. In lieu of a refund, any amount of such overpayment at 

834 the option of the Contractor, may be credited against amounts to become due to the United States or 

835 DWR by the Contractor. With respect to overpayment, such refund or adjustment shall constitute the 

836 sole remedy of the Contractor or anyone having or claiming to have the right to the use of any of the 

837 Project Water supply provided for herein. All credits and refunds of overpayments shall be made 

838 within 30 days of the Contracting Officer obtaining direction as to how to credit or refund such 
Contract No.14-06-200-8367A-LTR1 

38

839 overpayment in response to the notice to the Contractor that it has finalized the accounts for the Year 

840 in which the overpayment was made. 

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

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

843 work has been completed. If the advances exceed the actual costs incurred, the difference will be 

844 refunded to the Contractor. If the actual costs exceed the Contractor's advances, the Contractor will 

845 be billed for the additional costs pursuant to Article 25. 

846 (c) In the event that the Contractor contests the accuracy of any statement 

847 submitted to it by DWR pursuant to this Contract it shall give DWR notice thereof at least ten days 

848 prior to the day upon which payment of the stated amount is due. To the extent that DWR finds that 

849 the Contractor's contentions regarding the statement are correct, it shall revise the statement 

850 accordingly, and the Contractor shall make payment of the revised amounts on or before the due date. 

851 To the extent that DWR does not find the Contractor's contentions to be correct, or where time is not 

852 available for review of such contentions for correctness prior to due date, the Contractor shall make 

853 payment of the stated amounts on or before the due date, but may make the contested part of such 

854 payment under protest and seek an adjustment as described in subdivision (d) of this Article. 

855 (d) If in any year, by reason of errors in computation or other causes, there is an 

856 overpayment or underpayment to DWR by the Contractor of its charges provided for herein, the 

857 amount of such overpayment or underpayment shall be credited or debited, as the case may be, to the 

858 Contractor's account for the next succeeding Year and DWR shall notify the Contractor thereof in 

859 writing. 
Contract No.14-06-200-8367A-LTR1 

39

860 TEMPORARY REDUCTIONS-RETURN FLOWS

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

862 Facilities and the requirements of Federal law; (ii) the authorized purposes and priorities of the State 

863 Facilities and State laws and policies governing the SWP; (iii) the obligations of the United States 

864 and DWR under existing contracts, or renewals thereof, providing for water deliveries from the 

865 Project and State Facilities; and (iv) the terms and conditions of this Contract; the Contracting Officer 

866 and DWR shall make all reasonable efforts to optimize Project Water deliveries to the Contractor as 

867 provided in this Contract. 

868 (b) The Contracting Officer, DWR, or Operating Non-Federal Entity/Entities may 

869 temporarily discontinue or reduce the quantity of Water Delivered to the Contractor as herein 

870 provided for the purposes of investigation, inspection, maintenance, repair, or replacement of any of 

871 the Project or State Facilities or any part thereof necessary for the delivery of Project Water to the 

872 Contractor, but so far as feasible the Contracting Officer, DWR, or Operating Non-Federal 

873 Entity/Entities will give the Contractor due notice in advance of such temporary discontinuance or 

874 reduction, except in case of emergency, in which case no notice need be given; Provided, That the 

875 United States and DWR shall use its best efforts to avoid any discontinuance or reduction in such 

876 service. Upon resumption of service after such reduction or discontinuance, and if requested by the 

877 Contractor, the United States and DWR will, if possible, deliver the quantity of Project Water which 

878 would have been delivered hereunder in the absence of such discontinuance or reduction. 

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

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

881 Contractor's Service Area; Provided, That this shall not be construed as claiming for the United States 

882 any right to seepage or return flow being put to reasonable and beneficial use pursuant to this 
Contract No.14-06-200-8367A-LTR1 

40

883 Contract within the Contractor’s Service Area by the Contractor or those claiming by, through, or 

884 under the Contractor. 

885 CONSTRAINTS ON THE AVAILABILITY OF WATER

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

887 means to guard against a Condition of Shortage in the quantity of water to be made available to the 

888 Contractor pursuant to this Contract. In the event the Contracting Officer determines that a Condition 

889 of Shortage appears probable, the Contracting Officer will notify the Contractor of said determination 

890 as soon as practicable. 

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

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

893 taken by the Contracting Officer to meet legal obligations then, except as provided in subdivision (a) 

894 of Article 18 of this Contract, no liability shall accrue against the United States or any of its officers, 

895 agents, or employees for any damage, direct or indirect, arising therefrom. 

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

897 specified in subdivision (b) of this Article, the Contracting Officer shall apportion the available 

898 Project Water supply among the Contractors and others entitles, under existing contracts and future 

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

900 3404 of the CVPIA) and renewals thereof, to receive Project Water consistent with the contractual 

901 obligations of the United States. 

902 (d) DWR shall make all reasonable efforts consistent with sound fiscal policies, 

903 and proper operating procedures to maintain the necessary facilities and to deliver Project Water to 

904 the Contractor in accordance with the provisions of this Contract in such a manner and at such times 

905 as such Project Water is scheduled by the Contractor; Provided, That such Project Water has been 
Contract No.14-06-200-8367A-LTR1 

41

906 furnished to DWR by the Contracting Officer; and, Provided, further, That in no event shall any 

907 liability accrue against DWR or any of its officers, agents or employees for damage, direct or indirect 

908 for failure to deliver Project Water to the Contractor on account of errors in operation, drought, or 

909 any other cause beyond the control of DWR. Inasmuch as DWR is providing only conveyance and 

910 storage services under this Contract, it bears no responsibility for the availability of Project Water for 

911 such conveyance. 

912 (e) If any of the parties to this Contract are precluded in whole or in part from 

913 delivering, conveying or receiving Project Water as a result of uncontrollable forces, all parties shall 

914 be relieved from the obligation to the extent they are reasonably unable to complete the obligation 

915 due to the uncontrollable force. Uncontrollable force shall include, but is not limited to, earthquakes, 

916 fires, tornados, floods and other natural disasters. Each party shall be responsible for payment of any 

917 costs incurred on its behalf by the other party(ies) before the occurrence of the uncontrollable force. 

918 UNAVOIDABLE GROUNDWATER PERCOLATION

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

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

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

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

923 RULES AND REGULATIONS

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

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

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

927 rules and regulations promulgated by the Secretary of the Interior under Federal Reclamation law. 

928 WATER AND AIR POLLUTION CONTROL

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

930 and air pollution laws and regulations of the United States and the State of California, and shall 

931 obtain all required permits or licenses from the appropriate Federal, State, or local authorities. 
Contract No.14-06-200-8367A-LTR1 

42

932 QUALITY OF WATER

933 16. (a) Project and State Facilities used to deliver Project Water to the Contractor 

934 pursuant to this Contract shall be operated and maintained to enable the United States and DWR to 

935 deliver Project Water to the Contractor in accordance with the water quality standards specified in 

936 subsection 2(b) of the Act of August 26, 1937 (50 Stat. 850), as added by Section 101 of the Act of 

937 October 27, 1986 (100 Stat. 3050) or other existing Federal laws. The United States and DWR are 

938 under no obligation to construct or furnish water treatment facilities to maintain or to improve the 

939 quality of Water Delivered to the Contractor pursuant to this Contract. The United States and DWR 

940 do not warrant the quality of Water Delivered to the Contractor pursuant to this Contract. 

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

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

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

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

945 and subsurface agricultural drainage discharges generated through the use of Federal or Contractor 

946 facilities or Project Water provided by the Contractor within the Contractor's Service Area. 

947 WATER ACQUIRED BY THE CONTRACTOR

948 OTHER THAN FROM THE UNITED STATES

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

950 than from the United States and Irrigation Water furnished pursuant to the terms of this Contract may 

951 be simultaneously transported through the same distribution facilities of the Contractor subject to the 

952 following: (i) if the facilities utilized for commingling Irrigation Water and non-project water were 

953 constructed without funds made available pursuant to Federal Reclamation law, the provisions of 

954 Federal Reclamation law will be applicable only to the Landholders of lands which receive Irrigation 

955 Water; (ii) the eligibility of land to receive Irrigation Water must be established through the 
Contract No.14-06-200-8367A-LTR1 

43

956 certification requirements as specified in the Acreage Limitation Rules and Regulations (43 CFR Part 

957 426); (iii) the water requirements of Eligible Lands within the Contractor's Service Area can be 

958 established and the quantity of Irrigation Water to be utilized is less than or equal to the quantity 

959 necessary to irrigate such Eligible Lands; and (iv) if the facilities utilized for commingling Irrigation 

960 Water and non-Project water are/were constructed with funds made available pursuant to Federal 

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

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

963 43 CFR 426.15. In determining the incremental fee, the Contracting Officer will calculate annually 

964 the cost to the Federal Government, including interest of storing or delivering non-Project water, 

965 which for purposes of this Contract shall be determined as follows: The quotient shall be the unpaid 

966 distribution system costs divided by the total irrigable acreage within the Contractor’s Service Area. 

967 The incremental fee per acre is the mathematical result of such quotient times the interest rate 

968 determined using Section 202 (3) of the Act of October 12, 1982, (96 Stat. 1263). Such incremental 

969 fee will be charged to each acre of excess or full cost land within the Contractor’s Service Area that 

970 receives non-Project water through Federally financed or constructed facilities. The incremental fee 

971 calculation methodology will continue during the term of this Contract absent promulgation of a 

972 contrary Reclamation-wide rule, regulation, or policy adopted after the Contractor has been afforded 

973 the opportunity to review and comment on the proposed rule, regulation, or policy. If such rule, 

974 regulation, or policy is adopted it shall supersede this provision. The Contractor and the Contracting 

975 Officer concur that, as of the effective date of this Contract, the Contractor has a distribution system 

976 that was constructed without the use of Federally-financed funds. The use of this distribution system 

977 is not subject to the provision of this subdivision of this Article. A separate written agreement with 

978 DWR must be obtained by the Contractor prior to conveyance of such water in State Facilities. 
Contract No.14-06-200-8367A-LTR1 

44

979 (b) Omitted. 

980 OPINIONS AND DETERMINATIONS

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

982 opinion or determination of any party to this Contract, said terms shall not be construed as permitting 

983 such action to be predicated upon arbitrary, capricious, or unreasonable opinions or determinations. 

984 The parties, notwithstanding any other provisions of this Contract, expressly reserve the right to seek 

985 relief from and appropriate adjustment for any such arbitrary, capricious, or unreasonable opinion or 

986 determination. Each opinion or determination by any party shall be provided in a timely manner. 

987 Nothing in subdivision (a) of Article 18 of this Contract is intended to or shall affect or alter the 

988 standard of judicial review applicable under Federal law to any opinion or determination 

989 implementing a specific provision of Federal law embodied in statute or regulation. 

990 (b) The Contracting Officer and DWR shall have the right to make determinations 

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

992 of the United States and of the State of California, and the rules and regulations promulgated by the 

993 Secretary of the Interior and DWR. Such determinations shall be made in consultation with the 

994 Contractor to the extent reasonably practicable. 

995 COORDINATION AND COOPERATION

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

997 and the Contractor shall communicate, coordinate, and cooperate with each other, and with other 

998 affected Project Contractors, in order to improve the operation and management of the Project. The 

999 communication, coordination, and cooperation regarding operations and management shall include, 

1000 but not be limited to, any action which will or may materially affect the quantity or quality of Project 

1001 Water supply, the allocation of Project Water supply, and Project financial matters including, but not 
Contract No.14-06-200-8367A-LTR1 

45

1002 limited to, budget issues. The communication, coordination, and cooperation provided for hereunder 

1003 shall extend to all provisions of this Contract. Each party shall retain exclusive decision making 

1004 authority for all actions, opinions, and determinations to be made by the respective party. 

1005 (b) Within 120 days following the effective date of this Contract, the Contractor, 

1006 other affected Project Contractors, and the Contracting Officer shall arrange to meet with interested 

1007 Project Contractors to develop a mutually agreeable, written Project-wide process, which may be 

1008 amended as necessary separate and apart from this Contract. The goal of this process shall be to 

1009 provide, to the extent practicable, the means of mutual communication and interaction regarding 

1010 significant decisions concerning Project operation and management on a real-time basis. 

1011 (c) In light of the factors referred to in subdivision (b) of Article 3 of this Contract, 

1012 it is the intent of the Secretary to improve water supply reliability. To carry out this intent: 

1013 (1) The Contracting Officer will, at the request of the Contractor, assist in 

1014 the development of integrated resource management plans for the Contractor. Further, the 

1015 Contracting Officer will, as appropriate, seek authorizations for implementation of partnerships to 

1016 improve water supply, water quality, and reliability. 

1017 (2) The Secretary will, as appropriate, pursue program and project 

1018 implementation and authorization in coordination with Project Contractors to improve the water 

1019 supply, water quality, and reliability of the Project for all Project purpose. 

1020 (3) The Secretary will coordinate with Project Contractors and the State of 

1021 California to seek improved water resource management. 

1022 (4) The Secretary will coordinate actions of agencies within the 

1023 Department of the Interior that may impact the availability of water for Project purpose. 

 
Contract No.14-06-200-8367A-LTR1 

46

1024 (5) The Contracting Officer shall periodically, but not less than annually, hold 

1025 division level meetings to discuss Project operations, division level water management activities, and 

1026 other issues as appropriate. 

1027 (d) Without limiting the contractual obligations of the Contracting Officer under 

1028 the other Articles of this Contract, nothing in this Article shall be construed to limit or constrain the 

1029 Contracting Officer’s ability to communicate, coordinate, and cooperate with the Contractor or other 

1030 interested stakeholders or to make decisions in a timely fashion as needed to protect health, safety, or 

1031 the physical integrity of structures or facilities. 

1032 CHARGES FOR DELINQUENT PAYMENTS

1033 20. (a) The Contractor shall be subject to interest, administrative and penalty charges 

1034 on delinquent installments or payments. When a payment is not received by the due date, the 

1035 Contractor shall pay an interest charge for each day the payment is delinquent beyond the due date. 

1036 When a payment becomes sixty (60) days delinquent, the Contractor shall pay an administrative 

1037 charge to cover additional costs of billing and processing the delinquent payment. When a payment 

1038 is delinquent ninety (90) days or more, the Contractor shall pay an additional penalty charge of 

1039 six percent (6%) per year for each day the payment is delinquent beyond the due date. Further, the 

1040 Contractor shall pay any fees incurred for debt collection services associated with a delinquent 

1041 payment. 

1042 (b) The interest charge rate shall be the greater of the rate prescribed quarterly 

1043 in the Federal Register by the Department of the Treasury for application to overdue payments, or the 

1044 interest rate of one-half of one percent (0.5%) per month prescribed by Section 6 of the Reclamation 

1045 Project Act of 1939 (Public Law 76-260). The interest charge rate shall be determined as of the due 

1046 date and remain fixed for the duration of the delinquent period. 

1047 (c) When a partial payment on a delinquent account is received, the amount 

1048 received shall be applied, first to the penalty, second to the administrative charges, third to the 

1049 accrued interest, and finally to the overdue payment. 

1050 EQUAL OPPORTUNITY

1051 21. During the performance of this Contract, the Contractor agrees as follows: 

1052 (a) The Contractor will not discriminate against any employee or applicant for 

1053 employment because of race, color, religion, sex, or national origin. The Contractor will take 

1054 affirmative action to ensure that applicants are employed, and that employees are treated during 

1055 employment, without regard to their race, color, religion, sex, or national origin. Such action shall 
Contract No.14-06-200-8367A-LTR1 

47

1056 include, but not be limited to, the following: Employment, upgrading, demotion, or transfer; 

1057 recruitment or recruitment advertising; layoff or termination, rates of payment or other forms of 

1058 compensation; and selection for training, including apprenticeship. The Contractor agrees to post in 

1059 conspicuous places, available to employees and applicants for employment, notices to be provided by 

1060 the Contracting Officer setting forth the provisions of this nondiscrimination clause 

1061 (b) The Contractor will, in all solicitations or advertisements for employees placed 

1062 by or on behalf of the Contractor, state that all qualified applicants will receive consideration for 

1063 employment without discrimination because of race, color, religion, sex, or national origin. 

1064 (c) The Contractor will send to each labor union or representative of workers with 

1065 which it has a collective bargaining agreement or other contract or understanding, a notice, to be 

1066 provided by the Contracting Officer, advising the said labor union or workers’ representative of the 

1067 Contractor's commitments under Section 202 of Executive Order 11246 of September 24, 1965, and 

1068 shall post copies of the notice in conspicuous places available to employees and applicants for 

1069 employment. 

1070 (d) The Contractor will comply with all provisions of Executive Order No. 11246 

1071 of September 24, 1965, as amended, and of the rules, regulations, and relevant orders of the Secretary 

1072 of Labor. 

1073 (e) The Contractor will furnish all information and reports required by said 

1074 amended Executive Order and by the rules, regulations, and orders of the Secretary of Labor, or 

1075 pursuant thereto, and will permit access to its books, records, and accounts by the Contracting Officer 

1076 and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, 

1077 regulations, and orders. 

1078 (f) In the event of the Contractor's noncompliance with the nondiscrimination 

1079 clauses of this Contract or with any of the said rules, regulations, or orders, this Contract may be 

1080 canceled, terminated, or suspended, in whole or in part, and the Contractor may be declared ineligible 

1081 for further Government contracts in accordance with procedures authorized in said amended 

1082 Executive Order, and such other sanctions may be imposed and remedies invoked as provided in said 

1083 Executive Order, or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided 

1084 by law. 

1085 (g) The Contractor will include the provisions of paragraphs (a) through (g) in 

1086 every subcontract or purchase order unless exempted by the rules, regulations, or orders of the 

1087 Secretary of Labor issued pursuant to Section 204 of said amended Executive Order, so that such 

1088 provisions will be binding upon each subcontractor or vendor. The Contractor will take such action 

1089 with respect to any subcontract or purchase order as may be directed by the Secretary of Labor as a 

1090 means of enforcing such provisions, including sanctions for noncompliance: Provided, however, 

1091 That in the event the Contractor becomes involved in, or is threatened with, litigation with a 

1092 subcontractor or vendor as a result of such direction, the Contractor may request the United States to 

1093 enter into such litigation to protect the interests of the United States. 
Contract No.14-06-200-8367A-LTR1 

48

1094 GENERAL OBLIGATION-BENEFITS CONDITIONED UPON PAYMENT

1095 22. (a) The obligation of the Contractor to pay the United States and DWR as 

1096 provided in this Contract is a general obligation of the Contractor notwithstanding the manner in 

1097 which the obligation may be distributed among the Contractor's water users and notwithstanding the 

1098 default of individual water users in their obligations to the Contractor. 

1099 (b) The payment of charges becoming due hereunder is a condition precedent to 

1100 receiving benefits under this Contract. The United States and DWR shall not make water or 

1101 conveyance facilities available to the Contractor through Project or State Facilities during any period 

1102 in which the Contractor may be in arrears in the advance payment of water rates due the 

1103 United States. The Contractor shall not furnish water made available pursuant to this Contract for 

1104 lands or parties which are in arrears in the advance payment of water rates levied or established by 

1105 the Contractor. 

1106 (c) With respect to subdivision (b) of this Article, the Contractor shall have no 

1107 obligation to require advance payment for water rates which it levies. Subdivision (b) of this Article 

1108 applies to periods when the Contractor is in arrears on payment of charges to DWR. 

1109 (d) If in any year the Contractor fails or is unable to raise sufficient funds by other 

1110 means, the governing body of the Contractor shall levy upon all property within the Contractor's 

1111 boundary not exempt from taxation, a special assessment sufficient to provide for all payments due 

1112 the United States and DWR under this Contract. 

1113 (e) Assessments levied by the governing body of the Contractor pursuant to 

1114 subdivision (b) of this Article shall be enforced and collected by all officers of the Contractor charged 

1115 with the duty of enforcing and collecting assessments levied by the Contractor. 

1116 (f) All money collected by way of special assessments under this Article for 

1117 payments due DWR shall be kept in a separate fund by the treasurer or other officer of the Contractor 

1118 charged with the safekeeping and disbursement of funds of the Contractor, and, upon the written 
Contract No.14-06-200-8367A-LTR1 

49

1119 demand of DWR, the treasurer or other officer shall pay over to DWR all money in his possession or 

1120 control then due DWR under this contract, which money shall be applied by DWR to the satisfaction 

1121 of the amount due under this Contract. 

1122 (g) In the event of failure, neglect, or refusal of any officer of the Contractor to 

1123 levy any assessment necessary to provide payment by the Contractor under this Contract, to enforce 

1124 or to collect the assessment, or to pay over to the United States or DWR any money then due 

1125 collected on the assessment, either or both DWR and the United States may take such action in a 

1126 court of competent jurisdiction as they deem necessary to compel the performance in their proper 

1127 sequence of all such duties. Action taken pursuant hereto shall not deprive DWR or United States or 

1128 limit any remedy provided by this Contract or by law for the recovery of money due or which may 

1129 become due under this Contract. 

1130 COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS

1131 23. (a) The Contractor shall comply with Title VI of the Civil Rights Act of 1964 

1132 (42 U.S.C. 2000d), Section 504 of the Rehabilitation Act of 1975 (P.L. 93-112, as amended), the Age 

1133 Discrimination Act of 1975 (42 U.S.C. 6101, et seq.) and any other applicable civil rights laws, as 

1134 well as with their respective implementing regulations and guidelines imposed by the U.S. 

1135 Department of the Interior and/or Bureau of Reclamation. 

1136 (b) These statutes require that no person in the United States shall, on the grounds 

1137 of race, color, national origin, handicap, or age, be excluded from participation in, be denied the 

1138 benefits of, or be otherwise subjected to discrimination under any program or activity receiving 

1139 financial assistance from the Bureau of Reclamation. By executing this Contract, the Contractor 

1140 agrees to immediately take any measures necessary to implement this obligation, including permitting 

1141 officials of the United States to inspect premises, programs, and documents. 

1142 (c) The Contractor makes this agreement in consideration of and for the purpose 

1143 of obtaining any and all Federal grants, loans, contracts, property discounts, or other Federal financial 

1144 assistance extended after the date hereof to the Contractor by the Bureau of Reclamation, including 

1145 installment payments after such date on account of arrangements for Federal financial assistance 

1146 which were approved before such date. The Contractor recognizes and agrees that such Federal 

1147 assistance will be extended in reliance on the representations and agreements made in this Article, 

1148 and that the United States reserves the right to seek judicial enforcement thereof. 
Contract No.14-06-200-8367A-LTR1 

50

1149 PRIVACY ACT COMPLIANCE

1150 24. (a) The Contractor shall comply with the Privacy Act of 1974 (5 U.S.C. 552a) (the 

1151 Act) and the Department of the Interior rules and regulations under the Act (43 CFR 2.45 et seq.) in 

1152 maintaining Landholder acreage certification and reporting records, required to be submitted to the 

1153 Contractor for compliance with Sections 206 and 228 of the Reclamation Reform Act of 1982, 

1154 (96 Stat. 1266), and pursuant to 43 CFR 426.18. 

1155 (b) With respect to the application and administration of the criminal penalty 

1156 provisions of the Act (5 U.S.C. 552a(i)), the Contractor and the Contractor's employees responsible 

1157 for maintaining the certification and reporting records referenced in (a) above are considered to be 

1158 employees of the Department of the Interior. See 5 U.S.C. 552a(m). 

1159 (c) The Contracting Officer or a designated representative shall provide the 

1160 Contractor with current copies of the Interior Department Privacy Act regulations and the Bureau of 

1161 Reclamation Federal Register Privacy Act System of Records Notice (Acreage Limitation--Interior, 

1162 Reclamation-31) which govern the maintenance, safeguarding, and disclosure of information 

1163 contained in the Landholder's certification and reporting records. 

1164 (d) The Contracting Officer shall designate a full-time employee of the Bureau of 

1165 Reclamation to be the System Manager who shall be responsible for making decisions on denials 

1166 pursuant to 43 CFR 2.61 and 2.64 amendment requests pursuant to 43 CFR 2.72. The Contractor is 

1167 authorized to grant requests by individuals for access to their own records. 

1168 (e) The Contractor shall forward promptly to the System Manager each proposed 

1169 denial of access under 43 CFR 2.64; and each request for amendment of records filed under 43 CFR 

1170 2.71; notify the requester accordingly of such referral; and provide the System Manager with 

1171 information and records necessary to prepare an appropriate response to the requester. These 

1172 requirements do not apply to individuals seeking access to their own certification and reporting forms 

1173 filed with the Contractor pursuant to 43 CFR 426.18, unless the requester elects to cite the Privacy 

1174 Act as a basis for the request. 

1175 CONTRACTOR TO PAY CERTAIN MISCELLANEOUS COSTS

1176 25. In addition to all other payments to be made by the Contractor pursuant to this 

1177 Contract, the Contractor shall pay to the United States, within 60 days after receipt of a bill and 

1178 detailed statement submitted by the Contracting Officer to the Contractor for such specific items of 

1179 direct cost incurred by the United States for work requested by the Contractor associated with this 

1180 Contract plus indirect costs in accordance with applicable Bureau of Reclamation policies and 

1181 procedures. All such amounts referred to in this Article shall not exceed the amount agreed to in 
Contract No.14-06-200-8367A-LTR1 

51

1182 writing in advance by the Contractor. This Article shall not apply to costs for routine contract 

1183 administration. 

1184 WATER CONSERVATION

1185 26. (a) Prior to the delivery of water provided from or conveyed through Federally 

1186 constructed or Federally financed facilities pursuant to this Contract, the Contractor shall be 

1187 implementing an effective water conservation and efficiency program based on the Contractor's water 

1188 conservation plan that has been determined by the Contracting Officer to meet the conservation and 

1189 efficiency criteria for evaluating water conservation plans established under Federal law. The water 

1190 conservation and efficiency program shall contain definite water conservation objectives, appropriate 

1191 economically feasible water conservation measures, and time schedules for meeting those objectives. 

1192 Continued Project Water delivery pursuant to this Contract shall be contingent upon the Contractor’s 

1193 continued implementation of such water conservation program. In the event the Contractor's water 

1194 conservation plan or any revised water conservation plan completed pursuant to subdivision (d) of 

1195 Article 26 of this Contract have not yet been determined by the Contracting Officer to meet such 

1196 criteria, due to circumstances which the Contracting Officer determines are beyond the control of the 

1197 Contractor, water deliveries shall be made under this Contract so long as the Contractor diligently 

1198 works with the Contracting Officer to obtain such determination at the earliest practicable date, and 

1199 thereafter the Contractor immediately begins implementing its water conservation and efficiency 

1200 program in accordance with the time schedules therein. 

1201 (b) Should the amount of M&I Water delivered pursuant to subdivision (a) of 

1202 Article 3 of this Contract equal or exceed 2,000 acre-feet per Year, the Contractor shall implement 

1203 the Best Management Practices identified by the time frames issued by the California Urban Water 
Contract No.14-06-200-8367A-LTR1 

52

1204 Conservation Council for such M&I Water unless any such practice is determined by the Contracting 

1205 Officer to be inappropriate for the Contractor. 

1206 (c) The Contractor shall submit to the Contracting Officer a report on the status of 

1207 its implementation of the water conservation plan on the reporting dates specified in the then existing 

1208 conservation and efficiency criteria established under Federal law. 

1209 (d) At five-year intervals, the Contractor shall revise its water conservation plan to 

1210 reflect the then-current conservation and efficiency criteria for evaluating water conservation plans 

1211 established under Federal law and submit such revised water management plan to the Contracting 

1212 Officer for review and evaluation. The Contracting Officer will then determine if the water 

1213 conservation plan meets Reclamation’s then-current conservation and efficiency criteria for 

1214 evaluating water conservation plans established under Federal law. 

1215 (e) If the Contractor is engaged in direct groundwater recharge, such activity shall 

1216 be described in the Contractor’s water conservation plan. 

1217 EXISTING OR ACQUIRED WATER OR WATER RIGHTS

1218 27. Except as specifically provided in Article 17 of this Contract, the provisions of 

1219 this Contract shall not be applicable to or affect non-Project water or water rights now owned or 

1220 hereafter acquired by the Contractor or any user of such water within the Contractor’s Service Area. 

1221 Any such water shall not be considered Project Water under this Contract. In addition, this Contract 

1222 shall not be construed as limiting or curtailing any rights which the Contractor or any water user 

1223 within the Contractor’s Service Area acquires or has available under any other contract pursuant to 

1224 Federal Reclamation law. 
Contract No.14-06-200-8367A-LTR1 

53

1225 OPERATION AND MAINTENANCE BY OPERATING NON-FEDERAL ENTITY

1226 28. (a) The O&M of a portion of the Project facilities which serve the Contractor, and 

1227 responsibility for funding a portion of the costs of such O&M, have been transferred to two Operating 

1228 Non-Federal Entities by separate agreements between the United States and the Operating 

1229 Non-Federal Entities. Those separate agreements shall not interfere with or affect the rights or 

1230 obligations of the Contractor or the United States hereunder. Specifically, portions of the Delta1231 Mendota Canal, the San Luis Canal and other related facilities are operated by the San Luis & Delta1232 Mendota Water Authority and the Friant-Kern Canal and related facilities are operated by the Friant 

1233 Water Authority. 

1234 (b) The Contractor shall pay directly to the applicable Operating Non-Federal 

1235 Entity or to any successor approved by the Contracting Officer under the terms and conditions of the 

1236 separate agreement/agreements between the United States and the Operating Non-Federal Entities 

1237 described in subdivision (a) of this Article, all rates, charges, or assessments of any kind, including 

1238 any assessment for reserve funds, which the Operating Non-Federal Entity or such successor 

1239 determines, sets, or establishes for the O&M of the portion of the Project facilities operated and 

1240 maintained by the Operating Non-Federal Entity or such successor. Such direct payments to the 

1241 Operating Non-Federal Entity or such successor shall not relieve the Contractor of its obligation to 

1242 pay directly to the United States the Contractor’s share of the Project Rates, Charges, and Tiered 

1243 Pricing Component(s) except to the extent the Operating 

1244 Non-Federal Entity collects payments on behalf of the United States in accordance with the separate 

1245 agreement identified in subdivision (a) of this Article. 

1246 (c) For so long as the O&M of any portion of the Project facilities serving the 

1247 Contractor is performed by the Operating Non-Federal Entities, or any successors thereto, the 
Contract No.14-06-200-8367A-LTR1 

54

1248 Contracting Officer shall adjust those components of the Rates for Water Delivered under this 

1249 Contract representing the cost associated with the activity being performed by the Operating 

1250 Non-Federal Entities or their successors. 

1251 (d) In the event the O&M of the Project facilities operated and maintained by the 

1252 Operating Non-Federal Entity/Entities is re-assumed by the United States during the term of this 

1253 Contract, the Contracting Officer shall so notify the Contractor, in writing, and present to the 

1254 Contractor a revised Exhibit “B” which shall include the portion of the Rates to be paid by the 

1255 Contractor for Project Water under this Contract representing the O&M costs of the portion of such 

1256 Project facilities which have been re-assumed. The Contractor shall, thereafter, in the absence of 

1257 written notification from the Contracting Officer to the contrary, pay the Rates, Charges, and Tiered 

1258 Pricing Component specified in the revised Exhibit “B” directly to the United States in compliance 

1259 with Article 7 of this Contract. 

1260 CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS

1261 29. The expenditure or advance of any money or the performance of any obligation of the 

1262 United States under this Contract shall be contingent upon appropriation or allotment of funds. 

1263 Absence of appropriation or allotment of funds shall not relieve the Contractor from any obligations 

1264 under this Contract. No liability shall accrue to the United States in case funds are not appropriated 

1265 or allotted. 

1266 BOOKS, RECORDS, AND REPORTS

1267 30. (a) The Contractor shall establish and maintain accounts and other books and 

1268 records pertaining to administration of the terms and conditions of this Contract, including: the 

1269 Contractor's financial transactions, water supply data, and Project land and right-of-way agreements; 

1270 the water users' land-use (crop census), land ownership, land-leasing and water use data; and other 

1271 matters that the Contracting Officer may require. Reports thereon shall be furnished to the 

1272 Contracting Officer in such form and on such date or dates as the Contracting Officer may require. 

1273 Subject to applicable Federal laws and regulations, each party to this Contract shall have the right 

1274 during office hours to examine and make copies of the other party's books and records relating to 

1275 matters covered by this Contract. 
Contract No.14-06-200-8367A-LTR1 

55

1276 (b) Notwithstanding the provisions of subdivision (a) of this Article, no books, 

1277 records, or other information shall be requested from the Contractor by the Contracting Officer unless 

1278 such books, records, or information are reasonably related to the administration or performance of 

1279 this Contract. Any such request shall allow the Contractor a reasonable period of time within which 

1280 to provide the requested books, records, or information. 

1281 (c) At such time as the Contractor provides information to the Contracting Officer 

1282 pursuant to subdivision (a) of this Article, a copy of such information shall be provided to the 

1283 Operating Non-Federal Entity/Entities. 

1284 ASSIGNMENT LIMITED--SUCCESSORS AND ASSIGNS OBLIGATED

1285 31. (a) The provisions of this Contract shall apply to and bind the successors and 

1286 assigns of the parties hereto, but no assignment or transfer of this Contract or any right or interest 

1287 therein shall be valid until approved in writing by the Contracting Officer. 

1288 (b) The assignment of any right or interest in this Contract by a party shall not 

1289 interfere with the rights or obligations of the other parties to this Contract absent the written 

1290 concurrence of said other parties. 

1291 (c) The Contracting Officer shall not unreasonably condition or withhold approval 

1292 of any proposed assignment. 

1293 (d) No assignment or transfer of any rights to use State Facilities authorized by 

1294 this Contract shall be valid without advance written approval by DWR. 

1295 SEVERABILITY

1296 32. In the event that a person or entity who is neither (i) a party to a Project contract, nor 

1297 (ii) a person or entity that receives Project Water from a party to a Project contract, nor (iii) an 

1298 association or other form of organization whose primary function is to represent parties to Project 

1299 contracts, brings an action in a court of competent jurisdiction challenging the legality or 
Contract No.14-06-200-8367A-LTR1 

56

1300 enforceability of a provision included in this Contract and said person, entity, association, or 

1301 organization obtains a final court decision holding that such provision is legally invalid or 

1302 unenforceable and the Contractor has not intervened in that lawsuit in support of the plaintiff(s), the 

1303 parties to this Contract shall use their best efforts to (i) within 30 days of the date of such final court 

1304 decision identify by mutual agreement the provisions in this Contract which must be revised and 

1305 (ii) within three months thereafter promptly agree on the appropriate revision(s). The time periods 

1306 specified above may be extended by mutual agreement of the parties. Pending the completion of the 

1307 actions designated above, to the extent it can do so without violating any applicable provisions of 

1308 law, the United States shall continue to make the quantities of Project Water specified in this Contract 

1309 available to the Contractor pursuant to the provisions of this Contract which were not found to be 

1310 legally invalid or unenforceable in the final court decision. 

1311 RESOLUTION OF DISPUTES

1312 33. Should any dispute arise concerning any provisions of this Contract, or the parties’ 

1313 rights and obligations thereunder, the parties shall meet and confer in an attempt to resolve the 

1314 dispute. Prior to the Contractor commencing any legal action, or the Contracting Officer referring 

1315 any matter to Department of Justice, the party shall provide to the other party 30 days’ written notice 

1316 of the intent to take such action; Provided, That such notice shall not be required where a delay in 

1317 commencing an action would prejudice the interests of the party that intends to file suit. During the 

1318 30-day notice period, the Contractor and the Contracting Officer shall meet and confer in an attempt 

1319 to resolve the dispute. Except as specifically provided, nothing herein is intended to waive or abridge 

1320 any right or remedy that the Contractor or the United States may have. 
Contract No.14-06-200-8367A-LTR1 

57

1321 OFFICIALS NOT TO BENEFIT

1322 34. No Member of or Delegate to Congress, Resident Commissioner, or official of the 

1323 Contractor shall benefit from this Contract other than as a water user or landowner in the same 

1324 manner as other water users or landowners. 

1325 CHANGES IN CONTRACTOR’S SERVICE AREA

1326 35. (a) While this Contract is in effect, no change may be made in the Contractor's 

1327 Service Area, by inclusion or exclusion of lands, dissolution, consolidation, merger, or otherwise, 

1328 except upon the Contracting Officer's written consent. 

1329 (b) Within 30 days of receipt of a request for such a change, the Contracting 

1330 Officer will notify the Contractor of any additional information required by the Contracting Officer 

1331 for processing said request, and both parties will meet to establish a mutually agreeable schedule for 

1332 timely completion of the process. Such process will analyze whether the proposed change is likely 

1333 to: (i) result in the use of Project Water contrary to the terms of this Contract; (ii) impair the ability 

1334 of the Contractor to pay for Project Water furnished under this Contract or to pay for any Federally1335 constructed facilities for which the Contractor is responsible; and (iii) have an impact on any Project 

1336 Water rights applications, permits, or licenses. In addition, the Contracting Officer shall comply with 

1337 NEPA and ESA. The Contractor will be responsible for all costs incurred by the Contracting Officer 

1338 in this process, and such costs will be paid in accordance with Article 25 of this Contract. Upon 

1339 approval by the Contracting Officer, the Contractor shall promptly give notice of any such change in 

1340 Contractor’s Service Area to DWR. 

1341 FEDERAL LAWS

1342 36. By entering into this Contract, the Contractor does not waive its rights to contest the 

1343 validity or application in connection with the performance of the terms and conditions of this 

1344 Contract of any Federal law or regulation; Provided, That the Contractor agrees to comply with the 

1345 terms and conditions of this Contract unless and until relief from application of such Federal law or 
Contract No.14-06-200-8367A-LTR1 

58

1346 regulation to the implementing provision of the Contract is granted by a court of competent 

1347 jurisdiction. 

1348 NOTICES

1349 37. Any notice, demand, or request authorized or required by this Contract shall be 

1350 deemed to have been given on behalf of the parties when mailed, postage prepaid; or delivered to the 

1351 Area Manager, South-Central California Area Office, 1243 “N” Street, Fresno, California 93721; to 

1352 the Chief, State Water Project Analysis Office, Department of Water Resources, P. O. Box 942836, 

1353 Sacramento, California 94236-0001; and to the Board of Directors of the Rag Gulch Water District, 

1820 - 21st 1354 Street, Bakersfield, California 93301. The designation of the addressee or the address 

1355 may be changed by notice given in the same manner as provided in this Article for other notices. 

1356 CONFIRMATION OF CONTRACT

1357 38. The Contractor, after the execution of this Contract, shall promptly seek to secure a 

1358 decree of a court of competent jurisdiction of the State of California, confirming the execution of this 

1359 Contract. The Contractor shall furnish both the United States and DWR and a certified copy of the 

1360 final decree, the validation proceedings, and all pertinent supporting records of the court approving 

1361 and confirming this Contract, and decreeing and adjudging it to be lawful, valid, and binding on the 

1362 Contractor. 
Contract No.14-06-200-8367A-LTR1 

59

1363 IN WITNESS WHEREOF, the parties hereto have executed this Contract as of the day and 

1364 year first above written. 

1365 THE UNITED STATES OF AMERICA 

1366 By: _________________________________________ 

1367 Regional Director, Mid-Pacific Region 

1368 Bureau of Reclamation 

1369 Approved as to Legal Form and DEPARTMENT OF WATER RESOURCES 

1370 Sufficiency: OF THE STATE OF CALIFORNIA 

1371 By: ___________________________ By: _________________________________________ 

1372 Chief Counsel, Director, 

1373 Department of Water Resources Department of Water Resources 

1374 (SEAL) RAG GULCH WATER DISTRICT 

1375 By: _________________________________________ 

1376 President of the Board of Directors 

1377 Attest: 

1378 By: _______________________________ 

1379 Secretary of the Board of Directors 

1380 (H:\pub 440\LTRC\Final Draft LTRC’s – Fresno, Tracy\10-20-04 Rag Gulch Final Draft LTRC with 

1381 exhibits.doc) 
Contract No.14-06-200-8367A-LTR1 

EXHIBIT A

[Map or Description of Service Area] 
Contract No.14-06-200-8367A-LTR1 

EXHIBIT B

RAG GULCH WATER DISTRICT

Water Rates and Charges

Note: Rates and Charges are 2004 rates. This exhibit will be updated prior to execution of the 

 contract to reflect the current Rates and Charges. 

2004 Rates Per Acre-Foot

 Banks Joint Point Pumping

 Irrigation Water M&I Water

O&M AND COST-OF-SERVICE RATES: 

Capital Rates: 

 Cross Valley Conveyance (if applicable) $5.48 ** 

 

O&M Rates: 

 Water Marketing $7.59 

 Storage $5.83 

 Direct Pumping (Project Use Energy) $3.25 

 Dos Amigos 4/ 

Deficit Rates: 

 Non-Interest Bearing 

 Interest Bearing 

 

TOTAL COST-OF-SERVICE RATES: $22.15 

FULL-COST RATES: 

Section 202(3) Rate is applicable to a Qualified 

recipient or to a Limited Recipient receiving 

irrigation water on or before October 1, 1981. $30.26 

 

Section 205(a)(3) Rate is applicable to a Limited 

Recipient that did not receive irrigation water on 

or before October 1, 1981. $32.79 

 

SURCHARGES UNDER P.L 102-575 

TO RESTORATION FUND* 

Friant Surcharge [3406(c)(1)] 

Restoration Payments [3407(d)(2)(A)] $7.82 

* The surcharges are payments in addition to the water rates and were determined pursuant to 

 Title XXXIV of Public Law 102-575. Restoration fund surcharges under P.L. 102-575 

 are on a fiscal year basis (10/1/01-9/30/02). 

** M&I Rates will be calculated when needed. 

4/ - Conveyance and Conveyance Pumping operation and maintenance costs were removed 

for ratesetting purposes and are to be direct billed.