HomeMy WebLinkAbout3939 Resolution - Ecology Water Service ContractRESOLUTION NO. 3939
A RESOLUTION OF THE CITY OF PASCO, WASHINGTON,
AUTHORIZING THE CITY MANAGER TO SIGN THE WATER SERVICE
CONTRACT WITH WASHINGTON STATE DEPARTMENT OF ECOLOGY
FOR PASCO'S BENEFICIAL AND PERMITTED USE OF 5,000 ACRE-FEET
OF WATER FROM THE LAKE ROOSEVELT INCREMENTAL STORAGE
RELEASE PROGRAM.
WHEREAS, RCW 90.90. 010 authorizes the Department of Ecology's Office of Columbia
River (OCR) to enter into water service contracts to recover all or a portion of the cost of
developing water supplies; and
WHEREAS, Chapters 90.03 and 90.44 RCW authorize the appropriation of public water
for beneficial use and describe the process for obtaining water rights; and
WHEREAS, laws governing the water right permitting process are contained in RCW
90.03.250 through 90.03.340 and RCW 90.44.050; and
WHEREAS, on December 21, 2010, Department of Ecology (Ecology) issued Surface
Water Certificate S3-30556 authorizing Reclamation to release 37,500 acre-feet of water from the
Lake Roosevelt Incremental Storage Release Program (Program) for the purpose of instream flow
purposes, with 25,000 acre-feet to be used as replacement water for out -of -stream municipal and
industrial uses; and
WHEREAS, The City of Pasco submitted and Ecology accepted Water Right application
S4 -33044(A) to receive 5,000 acre-feet of water under the Program for use within the municipal
water supply area served by the City of Pasco; and
WHEREAS, in accordance with RCW 90.03.290, Ecology has determined that the
requirements for approval of the requested water right have all been met; and
WHEREAS, Ecology requires the execution of a Water Service Contract prior to issuing
the Record of Examination (for 30 -day public comment) and final Water Right Permit; and
WHEREAS, the City Council does authorize and direct the City Manager to sign the
above-mentioned Water Service Contract, and grants the City Manager authority to negotiate and
make any minor changes to said Water Service Contract in the best interest of the City. NOW,
THEREFORE,
THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON, DOES
RESOLVE AS FOLLOWS:
Section 1. The City Manager of the City of Pasco, Washington, is hereby authorized
and directed to negotiate, make minor changes to, and sign the Water Service Contract between
the City of Pasco and the Washington State Department of Ecology, copies of which are attached
Resolution - 1
hereto and incorporated herein by this reference as Exhibit A; and to take all necessary steps
required to complete this transaction.
PASSED by the City Council of the City of Pasco, Washington, as its regular meeting
dated this 21" day of January, 2020.
';�Z 4",4
Saul Martinez
Mayor
ATTEST:
a/-'�G\ , & 6-A ,y—
Debra Barham, CMC
City Clerk
Resolution - 2
APPROVED AS TO FORM:
Exhibit A
WATER SERVICE CONTRACT
BETWEEN
OFFICE OF THE COLUMBIA RIVER
WASHINGTON DEPARTMENT OF ECOLOGY
AND
CITY OF PASCO
WHEREAS, the following preliminary statements are made in explanation:
1. RCW 90.90.010 authorizes the Department of Ecology's Office of Columbia
River (OCR) to enter into water service contracts to recover all or a portion of the cost of
developing water supplies.
2. Since 2004, OCR has partnered with the United States Bureau of Reclamation
(Reclamation) on releasing additional water from Lake Roosevelt for new water supplies.
3. On December 21, 2010, Ecology issued Surface Water Certificate S3-30556
authorizing Reclamation to release 37,500 acre-feet of water from Lake Roosevelt for the
purpose of instream flow purposes, with 25,000 acre-feet to be used as replacement water for
out -of -stream municipal and industrial uses.
4. On December 21, 2010, Ecology issued Trust Water Certificate S3-30556,
accepting 37,500 acre-feet of water into the Trust Water Rights Program.
5. OCR entered into a Federal water service contract with Reclamation on August 2,
2011, Contract No. I IXX101734 (Reclamation Contract). The Reclamation Contract is attached
hereto as Exhibit A. The Reclamation Contract relates to the 37,500 acre-feet of water supply
released for instream flows and new municipal and industrial permits. The Reclamation Contract
has a term of 40 years, expiring on August 2, 2051, unless it is renewed pursuant to its terms.
The City of Pasco holds an application for a water right (Application No.) that was
filed with Ecology on
1. Contract. This Water Service Contract (Agreement) is made and entered into by
and between the Washington State Department of Ecology, hereinafter referred to as "Ecology",
and the City of Pasco, Washington, hereinafter referred to as "Applicant."
2 Purpose. It is the purpose of this Agreement to establish a contractual framework
for the Applicant to reimburse the State of Washington through Ecology an agreed upon annual
sum to utilize permitted waters of the State of Washington under Water Right Permit No.
(Appendix B) for beneficial use of that water. This Agreement is intended to describe the annual
costs, the conditions to the Agreement and the term of service for the use of that water. This
Water Service Contract
Ecology/City - 1
Agreement contains all the terms and conditions agreed upon by the parties. No other
understandings, oral or otherwise, regarding the subject matter of this Agreement shall be
deemed to exist or to bind any of the parties hereto.
3. Statement of Performance. Ecology has conducted a water right investigation and
will issue a Report of Examination (ROE) approving the application after the Applicant signs
this Agreement. In the event of an appeal, Ecology shall defend the ROE at its sole expense.
After an appeal of the ROE is concluded, Ecology will issue a permit (unless the ROE is vacated
upon appeal). All provisions, conditions and limitations of water use identified in Attachment B
are incorporated into this Contract.
The supply of water authorized in Attachment B is a permanent authorization. However,
it is mitigated by a non -permanent Federal water service contract. In the future, either the
Reclamation Contract will be renewed, or OCR will make best efforts to replace it with another
water supply source that provides equal mitigation value.
4. Period of Performance.
A. Subject to its other provisions, the period of performance of this
Agreement shall commence on the date of permit issuance, and run as long as the
Applicant receives water pursuant to Attachment B, unless amended or terminated sooner
as provided herein.
B. Pursuant to RCW 90.90.010(6), Ecology shall not impose any charge or
fee greater than the amount imposed by the Bureau of Reclamation.
5. Terms of PMen Cost recovery payments for this Agreement are based on
costs incurred by Ecology as a result of the Reclamation Contract, unless otherwise amended.
The Reclamation Contract and its terms and conditions are incorporated by reference into this
Agreement. Annual payments due by the Applicant to Ecology are as follows:
A. Applicant shall pay Ecology an annual sum of $35 per acre-foot per year
based on the permitted or certificated quantity described in Exhibit B. Ecology may at its
sole discretion adjust this rate if Reclamation exercises Provision 14(2)(b) of the
Reclamation Contract, which provides for periodic review of payments for water service
contracts under Federal Reclamation law. Ecology shall not adjust its rate unless it
provides Applicant with ninety (90) days notice of said rate adjustment.
6. Billing Procedure. Payment shall be based on the full permitted quantity in
Appendix B. At such time as the permit is superseded, or perfected and replaced by a certificate,
then the payment shall be based upon the superseding permit or certificated quantity. Payment
shall be due by November 1 st each year for the subsequent year's water use. Ecology shall send
a notice of payment due to the Applicant by September 15th of each year.
Water Service Contract
Ecology/City - 2
7. Agreement Alterations. Amendments and Assigrnments. This Agreement may be
amended or assigned by mutual agreement of the parties. Such amendments shall not be binding
unless they are in writing and signed by personnel authorized to bind each of the parties.
Exceptions to mutual agreement amendments and assignments:
A. When a certificate issues for the permit in Appendix B, said certificate
shall automatically replace the permit and become the basis for this Agreement in
Appendix B.
B. This Agreement is assignable if accompanied by an equivalent assignment
of the subject permit. A superseding permit issued in such event will become the basis
for this Agreement in Appendix B.
C. In the event a superseding permit issues based on an approved change
decision by Ecology, said superseding permit will become the basis for this Agreement in
Appendix B. However, in addition to other applicable criteria and transfer statutes, a
change application shall only be approved for the permit or certificate if the new use,
point of withdrawal, or other proposed change is capable of being mitigated through the
Reclamation Contract.
D. In the event a certificate has issued and the entire property to which the
certificate is appurtenant is transferred to another party, this Agreement is assignable if
agreed to by the current and proposed certificate holder.
8. Termination.
A. The Applicant may terminate this Agreement upon thirty (30) calendar
days' prior written notification to Ecology. In that event, the subject permit shall be
cancelled by Ecology if still in effect. If a certificate is in effect, such termination shall
constitute the certificate holder's intent to abandon the certificate and Ecology shall
promptly revoke same.
B. Ecology shall not terminate this Agreement unless:
1) The Reclamation Contract is renewed and Ecology is subjected to
different or additional conditions for the water releases not covered by this
Ecology -Applicant Water Service Contract.
2) The Reclamation Contract is terminated and Ecology has secured
alternate mitigation for the permit or certificate.
Water Service Contract
Ecology/City - 3
3) The Reclamation Contract is terminated and Ecology has not
secured alternate mitigation for the permit or certificates.
4) The Applicant fails to honor the terms of this Agreement,
including payment.
C. Prior to terminating this Agreement as described in 1) and 2) above,
Ecology shall provide to the Applicant a new water service contract for review and
execution at least ninety (90) calendar days prior to such termination. The goal of such
notice is to provide informed and uninterrupted mitigation throughout the life of the
permit of certificate. If Ecology terminates this Agreement as described in 1) and 2)
above, the Applicant may:
1) Accept the terms of the new water service contract; or
2) Abandon use of the permit or certificate and either:
a) Cease beneficial use associated with said right (e.g., no
longer divert or withdraw water); or
b) Continue the beneficial use under another suitable water
right.
D. Ecology shall not terminate this Agreement as described in B.4) above,
unless it has taken the following steps:
1) Ecology must provide notice to the Applicant of Applicant's failure
to comply with this Agreement and provide for 30 calendar days response by the
Applicant. If the Applicant corrects such noncompliance within said 30 day
period, Ecology shall not terminate this Agreement. Except, however, that if such
noncompliance is due to failure to promptly provide annual payments as required
herein, a late penalty of 5% shall be assessed.
2) If noncompliance persists beyond the 30 day notice period,
Ecology may initiate termination of the Agreement by providing a ninety (90)
calendar day Notice of Intent to Terminate. However, in the event the failure to
comply cannot be reasonably corrected within 90 days, such period may be
extended if the Applicant has commenced actions necessary for compliance and
diligently pursues compliance to completion.
1 See the Reclamation Contract termination clause.
Water Service Contract
Ecology/City - 4
3) Prior to termination, Ecology shall meet with Applicant in a good
faith effort to resolve any dispute regarding the enforcement, interpretation, or
breach of this Agreement. In the event the dispute is not resolved by agreement
of the parties, with or without the assistance of mediation, such dispute shall be
resolved by binding arbitration pursuant to RCW 7.04A, as amended, with both
parties waiving the right of a jury trial upon trial de novo, with venue placed in
Pasco, Franklin County, Washington. The substantially prevailing party shall be
entitled to its reasonable attorney fees and costs as additional award and judgment
against the other.
E. In the event of termination by either party, all payments paid in advance
for the coming calendar year shall remain with Ecology without refund.
F. Ecology and the Applicant are each responsible for their own respective
costs and attorney's fees in connection with this Agreement and any dispute related to the
proper interpretation or implementation of this Agreement. No damages, direct or
indirect, may be awarded to the Applicant due to failure of Ecology, or Ecology's
officers, agents, or employees, to perform any obligation under this Agreement.
G. The Applicant is not a third party beneficiary of the Reclamation Contract.
9. Governance. This Agreement is entered into pursuant to and under the authority
granted by the laws of the State of Washington, and any applicable Federal laws. The provisions
of this Agreement shall be construed to conform to those laws. In the event of an inconsistency
in the terms of this Agreement, or between its terms and any applicable statute or rule, the
inconsistency shall be resolved by giving precedence in the following order:
A. Applicable State and Federal statutes and rules.
B. Any other provisions of the Agreement, including material incorporated
by reference.
10. Waiver. A failure by either party to exercise its rights under this Agreement shall
not preclude that party from subsequent exercise of such rights and shall not constitute a waiver
of any other rights under this Agreement unless stated to be such in writing signed by an
authorized representative of the party and attached to the original Agreement.
11. All Writings Contained Herein. This Agreement contains all the terms and
conditions agreed upon by the parties. No other understandings, oral or otherwise, regarding the
subject matter of this Agreement shall be deemed to exist or to bind any of the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
of , 20
Water Service Contract
Ecology/City - 5
STATE OF WASHINGTON
DEPARTMENT OF ECOLOGY
Tom Tebb, Director
Office of Columbia River
Approved as to Form:
Assistant Attorney General
Water Service Contract
Ecology/City - 6
CITY OF PASCO, WASHINGTON
Dave Zabell, City Manager
Approved as to Form:
Kerr Ferguson Law, PLLC, City Attorney
B-27
USBR-PN Reg
Rev. 5/81
UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF RECLAMATION
PACIFIC NORTHWEST REGIONAL OFFICE
COLUMBIA BASIN PROJECT, WASHINGTON
RECORD OF EXECUTION OF CONTRACT
Contractor: State of Washington Detwtment of Ecology Contract No: 11XXIO1734
Date of contract: Aut-ust 2, 2011
Estimated amount involved: Up -front consideration given for State's 10 million monetary contribution for
Reclamation's expenditure on desicn and construction of the supplemental feed route to Potholes Reservoir.
Annual revenue will vary. Assuminp, no further lum -sum payment as Rrovided in contract annual revenue is
estimated at uR to $426,800 at the water service rate that will be in effect bgginning in 2012. _
Purpose: Long-term municipal and industrial water service contract to make available for release to the State
of Washington De artment of Ecology ujp to 37,500 acre-feet of project water annually from
Franklin D. Roosevelt Lake created by Grand Coulee Dain ursusnt to Su en din Certificate of Trust Water
Right No. 53-30556.
Remarks: Authoiit anted to Regional Director to ne otiate execute and administer the contract b
memorandum from the Commissioner dated November 10 2010.
Place: Boise. Idaho Date:
The form of contract was approved on behalf of the Boise Field Solicitor on July 27, 2011.
Ryari 'atterson
Program Manager
Repayment and Acreage Limitation
2. Contract executed and transmitted to the following:
ORIGINAL CONTRACT TO: PN -7632 (V.R.)
ORIGINALS TO: Mr. Ted Sturdevant, Director, Washington State Department of Ecology,
P.O. Box 47600, Olympia, WA 98504-7600
Copy to: Mr, Derek Sandison, Washington State Department of Ecology, Wenatchee
Field Office, Office of the Columbia River, 303 S. Mission Street, Suite 200,
Wenatchee, WA 98801
Field Solicitor, Boise, ID
CCA -1000, EPH-2000, PN -1700, PN -1730, PN -1800, PN -1820, PN -3300, PN -6200
84-55000
Assistant Solicitor, Water and Power, Washington DC, Attention: ms6415-MIB
Contract No. 11 XX I-01734
UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF RECLAMATION
Columbia Basin Project, Washington
MUNICIPAL AND INDUSTRIAL WATER SERVICE CONTRACT
BETWEEN THE UNITED STATES OF AMERICA
and THE STATE OF WASHINGTON, DEPARTMENT OF ECOLOGY
Table of Contents
Article
Page
No.
Title
No.
IPreamble
...........................................................................................................
1
2-10
Explanatory Recitals.........................................................................................
1-3
11
Definitions and Meanings.................................................................................
3-4
12
Term of Contract.......................................................................................
4
13
Water to be Made Available to Ecology..................................:........................
4-6
14
Payments for Water...........................................................................................
6-8
15
Contract Administration Fees...........................................................................
9
16
Termination of Contract....................................................................................
9-10
17
Disclaimer .......................... ........................................... . ...........................
10
18
Constraints on the Availability of Water (Water Shortages) ............................
10
19
Notices..............................................................................................................
11
20
General Provisions............................................................................................
1 I
Signatures................................................................................
12
Acknowledgments.......................................................................... ...............
13
ExhibitA...........................................................................................................
Al -A4
ExhibitB...........................................................................................................
B-1
Contract No. I IXXI 01734
UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF RECLAMATION
Columbia Basin Project, Washington
MUNICIPAL AND INDUSTRIAL WATER SERVICE CONTRACT
BETWEEN THE UNITED STATES OF AMERICA AND
THE STATE OF WASHINGTON DEPARTMENT OF ECOLOGY
THIS CONTRACT, made this 2"d day of August, 2011, pursuant generally to the Act
of Congress of June 17, 1902 (32 Stat. 388), and acts amendatory thereof or supplementary thereto,
particularly, but not limited to, the Act of March 4, 1921 (41 Stat. 1404), the Act of August 30,
1935 (49 Stat. 1028), Section 9(c)(2) of the Act of August 4, 1939 (53 Stat. 1187), the Act of
March 10, 1943 (57 Stat. 14) and the Act of August 12, 1958 (72 Stat. 563) , collectively known as
the Federal Reclamation laws, between the UNITED STATES OF AMERICA, hereinafter referred
to as the "United States," acting through the Bureau of Reclamation, hereinafter referred to as
"Reclamation," represented by the officer executing this Contract, his duly appointed successor or
his duly authorized representative, hereinafter referred -to as the "Contracting Officer", and the
STATE OF WASHINGTON, DEPARTMENT OF ECOLOGY, hereinafter referred to as
"Ecology".
WITNESSETH, THAT:
EXPLANATORY RECITALS
2. WHEREAS, the United States, acting through Reclamation, constructed the
Columbia Basin Project, Washington, hereinafter called the Project, and has water rights thereon,
including those for irrigation, municipal, industrial, and miscellaneous purposes; and
3. WHEREAS, the United States and Ecology entered into a Memorandum of
Understanding dated December 17, 2004 (MOU), providing among other things, to work toward
the use of a portion of Reclamation's Project water supply for Ecology's Columbia River Water
Management Program (Program); and
4. , WHEREAS, On December 1, 2008, Ecology issued to the United States a Permit to
Appropriate Public Waters of the State of Washington, Permit No. 53-30556 for 37,500 acre feet/
305 cfs of water for instream flow; and
5. WHEREAS, on August 13, 2009, the United States executed a Temporary
Miscellaneous Purposes Water Service Contract, Contract No. 09XX101718 with Ecology for up to
10,000 acre-feet of water, of which 9,662 acre-feet was released by Reclamation for the purpose of
f
meeting the procedural requirement under state law to first perfect the Project water for its intended
beneficial use, as stated on Permit No. 53-30556; and
6. WHEREAS, on June 30, 2010, the United States executed a Temporary
Miscellaneous Purposes Water Service Contract, Contract No. l OXX101727 with Ecology for
up to 10,000 acre-feet for the purpose stated in Recital 5 above; and
7. WHEREAS, on July 165, 2010, the United States executed a Temporary
Miscellaneous Purposes Water Service Contract, Contract No. l OXX101729 with Ecology that
replaced Contract No. l OXX101727 in its entirety and provided in part for the release of up to
35,000 acre-feet of water pursuant to Permit No. 53-30556 for the purpose stated in Recital 5
above; and
8. WHEREAS, Ecology desires to obtain a water supply from the Project to be left in -
stream and used by Ecology to mitigate for impacts to instream flow from new water right permits
to be issued by it to Municipal and Industrial water users in accordance with its Program; and
2
9. WHEREAS, the United States has demonstrated beneficial use of all the Project
water in accordance with the provisions of Permit No. S3-30556 and placed this water in Ecology
Trust Water Right Program for the Iong-term use of the water for the purposes provided in this
Contract; and
10. WHEREAS, for the purpose of orderly and economical operation and maintenance
of the Project the United States recognizes that entering into this Contract with Ecology for the use
of this water for the purposes stated in this Contract will benefit the public interest and the interests
of the United States to assist in the maintenance of instream flow and will not interfere with other
purposes served by the Project, and the United States is agreeable to releasing such water to
Ecology pursuant to the provisions of Superseding Certificate of Trust Water Right No. S3-30556
and the terms of this Contract; and
NOW, THEREFORE, in consideration of the mutual and dependent covenants
herein contained; it is hereby mutually agreed as follows:
DEFINITIONS
11. (a) "Municipal and Industrial" as used in this Contract, means municipal,
industrial, community domestic, commercial and related purposes of use, but not including
agricultural irrigation.
(b) "Permit" means an approval by Ecology relating to the use of water
delivered under, its Program authorizing the beneficial use of public waters under Chapters 90.03,
4.
90.42, or 90.44 Revised Code of Washington (RCW). The permit, whether in the form of a permit
or certificate of state water right, may be associated or consolidated with Ecology's approval for a
change to or transfer of an existing right.
(c) "Replacement Water" as used in this Contract means Reclamation's Project
water left in -stream pursuant to the provisions of Superseding Certificate of Trust Water Right
No. S3-30556 and this Contract and used by Ecology to mitigate, on an acre-foot for acre-foot
basis, for impacts to instream flow from new water right Permits issued by Ecology to Municipal
and Industrial water users in accordance with its Program.
(d) "Supplemental Water" as used in this Contract means the additional Project
water made available to Ecology for instream flow augmentation purposes in at least a 1:2
proportion to releases of Replacement Water.
(e) "Trust Water Right" means water rights assigned to Ecology in accordance
with RCW 90.42.
(f) "Third -Party permittees" means water users receiving water under the -
Program pursuant to a Permit issued by Ecology.
TERM OF CONTRACT
12. This Contract shall remain in effect for a period of forty (40) years from the date of
its execution; Provided; that under the terms and conditions mutually agreeable to the parties
hereto, renewals maybe made for successive -periods not to exceed forty (40) years each. The
terms and conditions of each renewal shall be agreed upon not later than one (1) year prior to the
expiration of the then existing contract.
WATER TO BE MADE AVAILABLE TO ECOLOGY
13. (a) Subject to the conditions, exceptions, and reservations set forth herein and
the availability of water in quantities sufficient to fulfill the requirements of this Contract without
impairing Project operations, the United States agrees to make available for release to Ecology up
to 37,500 acre-feet of Project water annually, pursuant to Superseding Certificate of Trust Water
4
Right No. 53-30556; Provided, that up to 25,000 acre-feet is made available to Ecology as
Replacement Water for Ecology to issue up to 25,000 acre-feet of Municipal and Industrial Permits
on an acre-foot for acre-foot basis, with the majority of the water being released at the foot of
Grand Coulee Dam on the -Columbia River and the small remaining balance to be made available
directly from Franklin D. Roosevelt Lake created by the Grand Coulee Dam; Provided further, that
up to 12,500 acre-feet of Supplemental Water is made available to Ecology for instream flow
augmentation purposes in at least a 1:2 proportion to the Replacement Water releases.
(b) Subject to Ecology's written request for Replacement Water and
accompanied by documentation of relevant State issued Permits as identified in (c) of this Article
.the water provided under this Contract will be available for release. Ecology shall receive said
water at the release points described in (a) above, and shall be wholly responsible for the protection
of said water for instream flow purposes beyond said point.
(c) Ecology Permits shall not be deemed to be subcontracts or sub -agreements
to this Contract, nor shall any third party.beneficiary interests be created or implied by virtue of this
Contract. Reclamation is not a beneficiary of or party to any sub -contracts, sub -agreements, or
Permits between Ecology and water users described herein.
(1) Documentation of Ecology's Permits shall be submitted to
Reclamation at the following address: Bureau of Reclamation,
Ephrata Field Office, Ephrata Field Office Manager, P.O. Box 815,
32 C Street N.W., Ephrata, Washington 98823.
(2) Permits shall refer to and be subject to the terms and conditions of
this Contract.
(d) Upon the release of Project water by Reclamation pursuant to this Contract
5
Ecology shall suffer all distribution and administration losses from the points of release in
(a) above to the places of uses.
(e) Reclamation shall not be responsible for the control, carriage, handling, use,
disposal, or distribution of water taken by Ecology hereunder. Ecology and Reclamation will each
be responsible and liable only for the negligent acts or omissions of their respective employees or
assigns to the extent provided by law. However, nothing in this Contract will be construed to be an
admission of fault or liability, and nothing will limit the defenses and immunities legally available
to -each party against the other.
(f) This Contract and all water taken pursuant thereto shall be subject to and
controlled by federal and state law. No liability shall attach to Reclamation for curtailment
required by applicable law, and Ecology agrees to a reduction of water taken hereunder in an
amount Reclamation determines to be necessary to comply with applicable law.
(g) The Superseding Certificate of Trust Water Right No. 53-30556 issued to
Reclamation will maintain its elements, including priority date.
PAYMENTS FOR WATER
14. (a) (1) Prior to execution of this Contract, Ecology has contributed a total
amount of $10 Million to the United States for expenditure on the design and construction of the
supplemental feed route to Potholes Reservoir, an authorized feature of the Project, and activities
incidental thereto, including the acquisition of lands and rights-of-way. In consideration of this
monetary contribution, the United States hereby agrees to accept this contribution in lieu of an
annual charge for any and all charges associated with the release to Ecology of up to 14,330 acre-
feet of Replacement Water and up to 7,165 acre-feet of Supplemental Water annually over the term
of this Contract. The total amount of Replacement Water and Supplemental Water eligible to be
R
provided annually at no additional cost was determined by the. Contracting Officer by comparing
the total amount of Ecology's monetary contribution to the equivalent present value of the revenue
stream resulting from the calculation found in Exhibit B and hereby made apart a part of this
Contract.
(2) For any amount of Replacement Water and corresponding proportion
of Supplemental Water in excess of the amounts identified in (a)(1) above to be made available
annually for release to Ecology either of the following must be remitted to Reclamation:
(i) Advance payment of a lump -sum amount as determined by the
Contracting Officer,for the additional number of acre-feet of
Replacement Water using the methodology identified above with
then current water rate and interest rate information. Such lump -sum
payment shall make Ecology eligible to receive the defined excess
amount of Replacement Water and corresponding Supplemental
Water at no cost from the time of such lump -sum payment through
the remaining term of this Contract,
Or
(ii) Payment in advance of the annual charge for the additional
Replacement Water provided as follows: On or before March 1 of
each succeeding year in advance of water release, Ecology shall
remit a payment for the total amount of acre-feet of Replacement
Water it requests for release in excess of the amount identified in
(a)(1) above and any amounts previously paid for pursuant to
(a)(2)(i) above. Replacement Water with the corresponding amount
of Supplemental Water, may be made available upon payment by
Ecology of the annual rate per acre-foot charge as provided in (b) of
this Article; Prpvided. that in no event will the total amount of
Replacement Water provided under this Contract exceed 25,000
acre-feet and that in no event will the corresponding amount of
Supplemental Water exceed 12,500 acre-feet.
7
(b) The annual payment set forth in sub -Article 14(a)(2)(ii) of this Contract is
based on an initial rate of $35.00 per acre-foot. From time to time, but not less often than once
every 5 years, the rate per acre-foot, the lump -sum payment rate, and the annual payment due the
United States under Article 14(a)(2)(ii) of this Contract shall be reviewed by the Contracting
Officer and revised if necessary by the United States. Such review shall be in accordance with
Federal Reclamation laws and the then current municipal, industrial and miscellaneous purposes
rate policy applicable to the Project.
(c) In recognition of the minimal volume of Replacement Water and
Supplemental Water when compared to the average. volume of water that passes over Grand Coulee
Dam annually, the Contracting Officer has determined that no. annual'operation and maintenance
charges shall be assessed for the release of Project water pursuant to this Contract.
(d) Advance payment to the United States is a condition precedent to delivery of
water under this Contract.
(e) All payments from Ecology to the United States under this contract shall be
by the medium requested by the United States on or before the date payment is due. The required
method of payment may include checks, wire transfers, or other types of payment specified by the
United States. Except when otherwise specified by the United States, all payments shall be made
by check.
(f) Upon execution of the contract, Ecology shall furnish the Contracting
Officer with Ecology's taxpayer's identification number (TIN). The purpose for requiring
Ecology's TIN is for collecting and reporting any delinquent amounts arising out of Ecology's
relationship with the United States.
8
(g) Payments required hereunder shall be made to the Bureau of Reclamation at
the Iocation described in Article 19 of this Contract.
CONTRACT ADMINISTRATION FEES
15. All future contract actions, including new contracts, contract amendments,
supplements, and assignments will be charged a fee to be determined prior to any future action that
shall be sufficient to cover costs to the United States as determined by the Contracting Officer.
TERMINATION OF CONTRACT
16. (a) This Contract may be terminated at the option of Reclamation at any time (1)
if Ecology is delinquent in payments required under this Contract for a pefiod of 90 days, or (2)
upon failure of Ecology to comply with other provisions herein, or (3) failure of Ecology to abide
by any lawful notice, order, rule, or regulation now or hereafter established affecting water use
hereunder, or (4) pursuant to Subarticle 16(b) of this Contract:. Provided, that Reclamation notifies
Ecology of any delinquency or deficiency by written notice and Ecology fails to comply with said
notice within 120 days.
(b) The State of Washington (State) entered into water resources management
agreements in support of the State's Lake Roosevelt Incremental Storage Releases Program with
the Confederated Tribes of the Colville Reservation, dated December 17, 2007, and with the
Spokane Tribe of Indians, dated Februaiy 4, 2008, in accordance with the MOU. These
agreements, formally recognized in RCW 90.90.060, included provisions for the State to make
annual payments to the Tribes for the duration of the Lake Roosevelt Storage Releases Program.
Should the State in bad faith fail to provide such payments or other consideration acceptable to the
Tribe(s), Reclamation may consider termination of, or non -release of water under, this Contract
two years after non-payment occurs, to allow time for the State and the Tribe(s) to resolve issues
E
related to non-payment. Ecology shall notify Reclamation in writing by July 31 of any year in
which non-payment occurs.
(c) Ecology shall have the right to terminate this Contract for any reason:
Provided, that termination under this provision shall become effective no sooner than March 1 of
the next calendar year following written notice.
(d) Termination of this Contract for any cause shall not relieve Ecology of any
financial'obligations incurred by way of this Contract prior to termination.
(e) In the event of termination, all Reclamation releases of Project water
provided hereunder shall cease.
DISCLAIMER
17. No provision of this Contract, nor of any renewal hereof, nor the furnishing of water
hereunder will be construed to bind the United States after the expiration of this Contract as the
basis of a permanent right to Project water. The United States will not be held responsible for any
acts or omissions of Ecology's agents. Further, itis the responsibility of Ecology to comply with
all applicable laws and regulations of the United States and Ecology regarding any activities
involved or associated with the water released hereunder.
CONSTRAINTS ON THE AVAILABILITY OF WATER (WATER SHORTAGES
18. (a) In its operation of the Project, the Contracting Officer will use all reasonable
means to guard against, a Condition of Shortage in the quantity of water to be made available to
Ecology pursuant to this Contract. In the event the Contracting Officer determines that a Condition
of Shortage appears probable, the Contracting Officer will notify Ecology in writing of said
determination as soon as practicable.
(b) If there is a Condition of Shortage because of errors in physical operations of
the Project, drought, or other physical causes beyond the control of the Contracting Officer or
actions taken by the Contracting Officer to meet current and future legal obligations, then no
liability shall accrue against the United States or any of its officers, agents, or employees for any
damages, direct or indirect, arising therefrom.
10
NOTICES
19. Any notice, demand, or request authorized or required by this Contract shall be
deemed to have been given, on behalf of Ecology, when mailed, postage prepaid, or delivered
either to the Regional Director, Pacific Northwest Region, Bureau of Reclamation, 1150 N. Curtis
Road, Suite 100, Boise, Idaho 83706-1234, or to the Ephrata Field Office Manager, Ephrata Field
Office, Bureau of Reclamation, P.O. Box 815, 32 C Street N.W., Ephrata, Washington 98823, and
on behalf of the United States, when mailed, postage prepaid, or delivered to the Director,
Department of Ecology, P.O. Box 47600, Olympia, Washington 98504-7600, or to the Wenatchee
Field Office, Office of the Columbia River, 303 S. Mission Street, Suite 200, Wenatchee,
Washington 98801. The designation of the person to be notified or the address of such person may
be changed at any time by similar notice. .
GENERAL PROVISIONS
20. The General Provisions applicable to this Contract are listed below. The full text of
these articles is attached as Exhibit A and is hereby made a part of this Contract.
a. CHARGES FOR DELINQUENT PAYMENTS
b. CONTINGENT ON APPROPRIATION OR ALLOTMENT OF FUNDS
c. GENERAL OBLIGATION =- BENEFITS CONDITIONED UPON PAYMENT
d. CONFIRMATION OF CONTRACT
C. CHANGES IN CONTRACTOR'S ORGANIZATION
f. PROTECTION OF WATER AND AIR QUALITY
g. WATER CONSERVATION
h. EQUAL EMPLOYMENT OPPORTUNITY
RULES, REGULATIONS, AND DETERMINATIONS
j. ASSIGNMENT LIMITED -- SUCCESSORS AND ASSIGNS OBLIGATED
k. OFFICIALS NOT TO'BENEFIT
1. BOOKS, RECORDS, AND REPORTS
M. COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS
n. CONTRACT DRAFTING CONSIDERATIONS
11
IN WITNESS WHEREOF, the parties hereto have signed their -names as of the day and year first
above written.
STATE OF WASHINGTON
DEPARTMENT OF ECOLOGY
By
Director
Department of Ecology,
State of Washington
OF
Pacific North Xest Region
Bureau of Reclamation
1150 N. Curtis Road, Suite 100
Boise, ID, 83706-1234-
12
STATE OF WASHINGTON)
ss
County of Grant )
On thisday of , 20 L personally appeared before
me,--\ <i:!�o-%a—dd.o k )ate , kr&n to me to be the official of the STATE OF
WASHINGTON, DEPARTMENT OF ECOLOGY that executed the within and foregoing
instrument, and acknowledged said instrument to be the free and voluntary act and deed of said
STATE OF WASHINGTON, DEPARTMENT OF ECOLOGY for the uses and purposes therein
mentioned, and. on oath stated that they are authorized to execute said instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal as of
the day and year first above written. .
�Now III I IN111
ON
�Mss,yCt'��
Z� Notar iblic in kid for the
N�Tgq), Zm
State'0 V
WaL3jngt n
F Residing at.
MY commission x p ires:
•,:�4�c .�
STATE OF WASHINGTON )
�*l
County of Grant
On thi y of , 20W, personally appeared before
L y^ -5, , known tStne to be the official of the United States of
America that executed the within and foregoing instrument and acknowledged said instrument to
be the free and voluntary act and deed of said United States, for the uses and purposes therein
mentioned, and on oath stated that he was authorized to execute said instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal as of the day and year first above written.
NotaC'�ublicc i and for the
State of Washingt n
Residing at
My commission expires:
13
EXHIBIT A
GENERAL PROVISIONS — COLUMBIA BASIN PROJECT
The Contractor, as referred to in the following Standard Contract Articles, shall be The State of
Washington, Department of Ecology.
CHARGES FOR DELINQUENT PAYMENTS
(a) (1) The Contractor shall be subject to interest, administrative, and penalty charges on delinquent
payments. If a payment is not received by the due date, the Contractor shall pay an interest charge on the delinquent
payment for each day the payment is delinquent beyond the due date. If a payment becomes 60 days delinquent, the
Contractor shall pay, in addition to the interest charge, an administrative charge to cover additional costs of billing and
processing the delinquent payment. If a payment is delinquent 90 days or more, the Contractor shall pay, in addition to the
interest and administrative charges, a penalty charge for each day the payment is delinquent beyond the due date, based on
the remaining balance of the payment due at the rate of 6 percent per year. The Contractor shall also pay any fees incurred
for debt collection services associated with a delinquent payment.
(2) The interest rate charged shall be the greater of either the rate prescribed quarterly in the Federal
Register by the Department of the Treasury for application to overdue payments, or the interest rate of 0.5 percent per
month. The interest rate charged will be determined as of the due date and remain fixed for the duration of the delinquent
period.
(3) When a partial payment on a delinquent account is received, the amount received'shall be
applied first to the penalty charges, second io the administrative charges, third to the accrued interest, and finally to the
overdue payment.
CONTINGE tit't ON APPROPRIATION OR ALLOTMENT OF I -' Ci'; DS
b. The expenditure or advance of any money or the performance of any obligation of the United States
under this contract shall be contingent -upon appropriation or allotment of funds. Absence of appropriation or allotment of
funds shall not relieve the Contractor from any obligations under this contract. No liability shall accrue to the United States
in case funds are not appropriated or allotted. -
GENERAL OBLIGATION -- BENEFITS CONDITIONED UPON PAYMENT
e. (1) The obligation of the Contractor to pay the United States as provided in this contract is a general
obligation of the Contractor notwithstanding the manner in which the obligation may be distributed among the Contractor's
water users and notwithstanding the default of individual. water users in their obligation to the Contractor.
(2) The payment of charges becoming due pursuant to this contract is a condition precedent to
receiving benefits under this contract. The United States shall not make water available to the Contractor through Columbia
Basin project facilities during any period in which the Contractor is in arrears in the advance payment'of water rates due the
United States.
CONFIRMATION OF CONTRACT
d. . The Contractor, after the execution.of this contract, shall furnish to the Contracting Officer evidence that
pursuant to the laws of the State of Washington, the Contractor is a legally constituted entity and the contract is lawful,
valid, and binding on the Contractor. This contract shall not be binding on the United States until such evidence has been
provided to the Contracting Officer's satisfaction.
CHANGES IN CONTRACTOR'S ORGANIZATION
e. While this contract is in effect, no change may be made in the Contractor's organization which may affect
the respective rights, obligations, privileges, and duties of either the. United States or the Contractor under this contract
including, but not limited to, dissolution, consolidation, or merger, except upon the Contracting Officer's written consent.
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PROTECTION OF WATER AND AIR [LAALTTY
f. - (1) Project facilities used to make available and deliver water to the Contractor shall be operated
and maintained in the most practical manner to maintain the quality of the water at the highest level possible as determined
by the Contracting Officer: Provided, That the United States does not warrant the quality of the water delivered to the
Contractor and is under no obligation to furnish or construct water treatment facilities to maintain or improve the quality of
water delivered to the Contractor.
(2) The Contractor shall comply with all applicable water and air pollution laws and regulations of
the United States and the State of Washington and shall obtain all required permits or licenses from the appropriate Federal,
State, or local authorities necessary for the release of water by the Contractor; and shall be responsible for compliance with
all Federal, State, and local water quality standards applicable to surface and subsurface drainage and/or discharges
generated through the use of Federal or the Contractor's facilities.
(3) This article shall not affect or alter any legal obligations of the Secretary to provide drainage or
other discharge services.
WATER CONSERVATION
g. Prior to release of water provided from or conveyed through federally constructed or federally financed
facilities pursuant to this dontract, the Contractor shall develop a water conservation plan, as required by Section 210(b) of
the Reclamation Reform Act of 1982 (RRA) and Part 427.1 of the Water Conservation Rules and Regulations effective
January 1, 1998.
EQUAL EMPLOYMENT OPPORTUNITY
During the performance of this contract, the Contractor agrees as follows:
(1) The.Contractor will not discriminate against any employee or applicant for employment because
of race, color, religion, sex, disability, or national origin. The Contractor will take affirmative action to ensure that
applicants are employed, and that employees are treated during employment, without regard to then• race, color, religion,
sex, disability, oir national origin. Such action shall include, but not be limited to the following: employment, upgrading,
demotion, or transfer; recruitment or recruitmeht advertising; layoff or termination; rates of pay or other forms of
compensation; and selection for training, including apprenticeship. The Contractor agrees to post in conspicuous places,
available to employees and applicants for employment, notices to be provided by the Contracting Officer setting forth the
provisions of this nondiscrimination clause.
(2) The Contractor will, in all solicitations or advertisements for employees placed by or on behalf
of the Contractor, state that all qualified applicants will receive consideration for employment without regard to race, color,
religion, sex, disability, or national origin.
(3) The Contractor will send to each labor union or representative of workers with which it has a
collective bargaining agreement or other contract or understanding, a notice, to be provided by the Contracting Officer,
advising the Iabor union or workers' representative of the Contractor's commitments under Section 202 of Executive Order
11246 of September 24, 1965, and shall post copies of the notice in conspicuous places available to employees and
applicants for employment.
(4) The Contractor will comply with all provisions of Executive Order No. 11246 of September 24,
1965, and of the rules, regulations, and relevant orders of the Secretary of Labor.;
(5) The Contractor will furnish all information and reports required by Executive Order 11246 of
September 24, 1965, and by the rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit
access to his books, records, and -accounts by the Contracting Agency and the Secretary of Labor- for purposes of
investigation to ascertain compliance with such rules, regulations, and orders.
(6) In the event of the Contractor's noncompliance with the nondiscrimination clauses of this
contract or with any of such rules, regulations, or orders, this contract may be candeled, terminated or suspended in whole or
in part and the Contractor may be declared ineligible for further Goveinment contracts in accordance with procedures
authorized in Executive Order 11246 of September 24, 1965, and such other sanctions may be imposed and remedies
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invoked as provided in Executive Order 11246 of September 24, 1965 or by rule, regulation, or order of the Secretary of
Labor, or as otherwise provided by law.
(7) The Contractor will include the provisions of articles (1) through (7) in every subcontract or
purchase order unless exempted by the rules, regulations, or orders of the Secretary. of Labor issued pursuant to Section 204
of Executive Order 11246 of September 24, 1965, so that such provisions will be binding upon each subcontractor or
vendor. The Contractor will take such action with respect to any subcontract or purchase order as may be directed by the
Secretary of Labor as a means of enforcing such provisions, including sanctions for noncompliance; Provided. however,
that in the event the Contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a
result of such direction, the Contractor may request the United States to enter into such litigation to protect the interests of
the United States.
RULES, REGULATIONS, AND DETERMINATIONS
i. (1) The parties agree that the release of water or use of Federal facilities pursuant to this contract is
subject to Federal reclamation law, as amended and supplemented, and the rules and regulations promulgated by the
Secretary of the Interior under Federal reclamation law..
(2) The Contracting Officer shall have the right to make determinations necessary to administer this
contract that are consistent with the expressed and implied provisions of this contract, the laws of the United States and the
Stale of Washington, and the rules and regulations promulgated by the Secretary of the Interior. Such determinations shall
be made in consultation with -the Contractor.
ASSIGNMENT LIMITED --SUCCESSORS AND ASSIGNS OBLIGATED
j. The provisions of this contract shall apply to and bind the successors and assigns of the parties hereto, but
no assignment or transfer of this contract or any right or interest therein by either party shall be valid until approved in
writing by the other party.
OFFICIALS NOT TO BENEFIT
k. No Member of or Delegate to the Congress, Resident Commissioner, or official of the Contractor shall
benefit from this contract other than as a water user or landowner in the same manner as other water users or landowners.
BOOKS,_RECORDS AND REPORTS
1. The Contractor shall establish and maintain accounts and other books and records pertaining to
administration of the terms and conditions of this contract, including the Contractor's financial transactions; water supply
data; water -use data; and other matters that the Contracting Officer may require. Reports shall be furnished to the
Contracting Officer in such form and on such date or dates as the Contracting Officer may require. Subject to applicable
Federal laws and regulations, each party to this contract shall have the right during office hours to examine and make copies
of the other party's books and records relating to matters covered by this contract.
COMPLIANCE WITH CIVIL RIGHTS LAWS AND REGULATIONS
M. (1) The Contractor shall comply with Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d),
Section 504 of the Rehabilitation Act of 1973 (P.L. 93-112, as amended), the Age Discrimination Act of 1975 (42 U.S.C.
6101, et seq.), Title II of the Americans with Disabilities Act of 1990 if the entity is a State or local government entity [Title
III if the entity is a non-government entity], and any other applicable civil rights laws, as well as with their respective
implementing regulations and guidelines imposed by the U.S. Department of the Interior and/or Bureau of Reclamation.
(2) These statutes require that no person in the United States shall be excluded from participation
in, be denied the benefits of, or be otherwise subjected (o discrimination under any program or activity receiving financial
assistance from the Bureau of Reclamation on the grounds of race, color, national origin, disability, or age. By executing
this contract, the Contractor agrees to immediately take any measures necessary to implement this obligation, including
permitting officials of the United States to inspect premises, programs, and documents.
(3) . The Contractor makes this agreement inconsideration of and for the purpose of -obtaining ahy
and all Federal grants, loans, contracts, property discounts, or other Federal financial assistance extended after the date
hereof to the Contractor by the Bureau of Reclamation, including installment payments after such date on account of
A-3
arrangements for Federal financial assistance which were approved before such date. The Contractor recognizes and agrees
that such Federal assistance will be extended in reliance on the representations and agreements made in this article and that
the United States reserves the right to seek judicial enforcement thereof.
{4} Complaints of discrimination against the Contractor shall be investigated by the Contracting
Officer's Office of Civil Rights.
CONTRACT DRAFTING CONSIDERATIONS
n.. Articles 1 through 17 of this contract have been drafted, negotiated, and reviewed by the parties hereto,
each of whom is sophisticated in the matters to which this contract pertains, and no one party shall be considered to have
drafted the stated articles.
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EXHIBIT B
The following methodology was used to establish the maximum amount of acre-feet (AF) of
Replacement Water and Supplemental Water to be made available annually to Ecology at no additional
cost in consideration for its $10 Million contribution to Reclamation for expenditure on design and
construction of the supplemental feed route to Potholes Reservoir and activities incidental thereto as
described in sub -article 14(a) of this Contract.
Step l: In order to evaluate Ecology's contribution on a common basis of comparison with the
payment revenue stream expected from a 40 -year municipal and industrial (M&I) water service
contract from the Columbia Basin Project (Project), the present value of the revenue stream was
calculated as follows:
—pmtx(1+rt)x( (1 +r)n-1))
r
PV (1+r)n = $697.98/AF
Where:
pmt = $35, which is the water service rate (per AF) applicable to this Contract at the time of
execution.)
r= 4.23 %, this is the discount rate of interest: In this case, it is the June 2011 month-end
average rate of interest for U.S. government securities with 30 -year maturities.
t = 1, reflecting payment due at the beginning of each period.
n = 40, reflecting the 40 -year term of Contract and expected payment stream to the U.S.
PV = $697.98, this represents the value (per AF) in current dollars of a stream of water service
contract revenue under the stated parameters.
Step 2: Treating Ecology's contribution as an up -front lump -sum payment to be applied as a credit
toward water service under this Contract, the following calculation results in the maximum amount of
Replacement Water to be made available annually at no additional annual cost to Ecology:
$10,000,000 + $697.98 per AF = 1.4,327.02 AF (rounded to 14,330 AF) of Replacement Wate?
Step 3: Pursuant to the terms of this Contract, Supplemental Water is to be made available to Ecology
at no cost for instream flow augmentation purposes in at least a 1:2 proportion to releases of
Replacement Water. Consequently, up to of 7,165 AF of Supplemental Water will be made available
to Ecology concomitant with the availability of up to 14,330 AF of Replacement Water.
1 The $35 per AF water service rate is the result of deducting the $4 per AF power charge component from the current
M&I water service rate for the Project in effect for 2011 ($39 per AF), as no Project pumping and reserved power is
required for the release of the water supply. The results of a recently completed periodic rate review will be
implemented beginning in 2012 and as a result the Project M&I water service rate will increase to $48 per AF.
Accordingly, beginning in 2012 the water service rate applicable to this contract will be $40 per AF (reflecting the
deduction of the then $8 per AF power component from the revised rate), subject to future periodic revision pursuant
to the terms of sub -article 14(b).
2 The up to 14,330 AF of Replacement Water to be made available annually at no additional annual cost to Ecology
will not change as a result of periodic revision(s) of the water service rate made pursuant to the terms of sub -article 14
(b).
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