EXHIBIT 16-A

2007 MEMORANDUM OF AGREEMENT
AMONG CALIFORNIA AMERICAN WATER,
MONTEREY PENINSULA WATER MANAGEMENT DISTRICT,
AND CALIFORNIA DEPARTMENT OF FISH AND GAME
TO RELEASE WATER INTO THE CARMEL RIVER FROM SAN CLEMENTE RESERVOIR

THIS AGREEMENT is made this __^th day of May, 2007, among the Monterey Peninsula Water Management District, (the "District"), California American Water, ("CAW"), and the California Department of Fish and Game, ("Department"), with respect to the following.

RECITALS

A. The Department is required to conserve and protect the fish and wildlife resources of this state and it is the Department's objective to maximize surface flows in the Carmel River below San Clemente Dam;

B. CAW supplies water to the citizens of the communities of the Monterey Peninsula, Monterey County in accordance with SWRCB Order No. 95-10, as amended.

C. The District, through its rules and regulations, establishes a quarterly water supply strategy and budget for the Monterey Peninsula.

NOW THEREFORE, IT IS HEREBY AGREED:

DEFINITIONS

1. "Minimum pool at Los Padres Reservoir" means a surface water elevation of 980 feet above mean sea level, or 91 acre feet of storage.

2. For operational purposes in 2007, "Minimum pool at San Clemente Reservoir" means a surface water elevation of 515 feet above mean sea level, or 71 acre feet of storage.

3. "Water Release by CAW at San Clemente Dam" into the Carmel River may occur from seepage through the dam, direct release from the discharge ports, spillage over the crest of the dam or gates, leakage around the gates, releases through the fish ladder or any combination thereof.

DESIGNATION OF RESPONSIBILITIES

4. CAW shall make water releases into the Carmel River channel beginning May 2007 as follows and summarized in Exhibit A: CAW shall maintain no less than 6.0 CFS (cubic feet per second) during May, 4.0 CFS during June through July, and 3.0 CFS during August through December, 2007 at the Sleepy Hollow Weir.

5. CAW shall not divert water at the San Clemente Dam during low flow periods except during an emergency, which is defined in ordering Paragraph No. 1 of SWRCB Order WRO 2002-0002 (attached as Exhibit B).

6. The Russell Wells shall be limited to a combined total instantaneous diversion rate of not more than 0.5 cfs during low flow periods as set forth in ordering Paragraph No. 4 of SWRCB Order WRO‑2002‑0002 (Exhibit B hereto).

7. In the event that a significant change in projected runoff occurs in the basin during the duration of this Agreement, the parties will meet to discuss modifications to the scheduled reservoir releases and diversion.

8. CAW shall limit operation of its wells in the Carmel Valley above the Narrows during low flow periods as set forth in ordering Paragraph No. 2 of SWRCB Order WRO 2002-0002 (Exhibit B hereto). CAW shall notify the District and the Department of its maintenance pumping schedule in advance.

9. CAW shall make reasonable efforts to operate the Lower Carmel Valley production wells in the sequence from the most downstream well and progress upstream as wells are needed and available for production. CAW shall notify the District and the Department before operating its Scarlett No. 8 Well.

10. CAW shall provide, upon request by the Department or the District, records of the Carmel Valley Filter Plant operation showing compliance with the provisions of this Agreement.

11. CAW shall notify the District and the Department when the water elevation reaches 990 feet at Los Padres Reservoir or 520 feet at San Clemente Reservoir. CAW shall not draw either reservoir below minimum pool elevation without obtaining specific written approval from the Department. This requirement does not apply to annual drawdown at San Clemente performed as part of Interim Safety Measures mandated by the California Division of Safety of Dams.

DISTRICT

12. The District shall take direct measurements of inflow to Los Padres Reservoir on a monthly basis through the duration of this Agreement.

ALL PARTIES

13. This Agreement is revocable upon ten days' written notice to all parties signatory to this Agreement.

14. This Agreement is entered into without prejudice to the rights and remedies of any party to the Agreement.

EFFECTIVE DATE AND TERM OF AGREEMENT

15. This Agreement is effective May 1, 2007 and shall remain in force until December 31, 2007. This Agreement may be modified or extended by mutual consent of all the parties.

EXECUTION

IN WITNESS WHEREOF, each party hereto has caused this Memorandum of Agreement to be executed by an authorized official on the day and year set forth opposite their signature.

California American Water By: P.O. Box 951 Monterey, CA 93942-0951	________________ Date
Monterey Peninsula Water Management District By: P.O. Box 85 Monterey, CA 93942-0085	________________ Date
California Department of Fish and Game By: 1234 East Shaw Avenue Fresno, CA 93710	________________ Date

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