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Discussion and Review of the California WaterFix Project update <br />April 3, 2018 <br />Page 2 <br />• Stage 1 (2/3 of 9,000 cfs = 6,000 cfs) — Construct one tunnel, one intermediate forebay, two <br />intakes, and one pumping station <br />• Stage 2 (1/3 of 9,000 cfs = 3,000 cfs) — Construct second tunnel, third intake, and second <br />pumping station <br />This Staged Approach would start with a single tunnel to accommodate the subscription of the <br />SWP Contractors that signed on; and construct the second tunnel at a later date when additional <br />capacity is needed. <br />Recent Developments <br />In February 2018, MWD staff presented to the Board the water supply analysis and cost <br />comparison of the Governor's "Staged Approach" with the Full Project. Overall, the Staged <br />Approach provides water quality, water transfer, seismic, and environmental benefits, but they are <br />not equal to the Full Project, in particular the water supply benefits. Stage 1 would cost about a <br />1/3 less, but the water supply benefits would also be impacted. Capital costs would be reduced <br />from $16.7 billion to $11.1 billion; howeverthe water supply reduction would be reduced by 400,000 <br />AF. <br />Based on cost comparisons, the MWD Board asked staff to evaluate the costs and benefits of <br />MWD financing the unsubscribed portion which is roughly 3,000 cfs or 1/3 (in other words, MWD <br />financing the second tunnel). <br />At a MWD Board Workshop on March 27, 2018 MWD staff provided analysis of investing in the <br />construction of the two tunnels. Below is MWD's financial exposure of taking on the 33% <br />unsubscribed share: <br />65A-2 <br />