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. supplies with the QSA and Interim Surplus Guidelines, compared to 11 % without the QSA and ISG. If the QSA were implemented this year, but without additional surplus, we would still meet 11 % of demand with Colorado River water. This year we had to adjust to a substantial reduction in the availability of Colorado River water. We will meet all demands as expected, but due to favorable conditions in the State Water Project we will draw less from storage than we thought earlier in the year. In fact, we have reinstated grouudwater replenishment deliveries in most of our service area. The most recent report to Metropolitan's Board on 2003 water deliveries is attached in Tab 2. Nonetheless, the 2003 cutback in our Colorado River supplies presented a major operational challenge. This was not due to any lack of water in the system, but rather from the different water quality characteristics of State Water Project and Colorado River supplies. Colorado River water is beneficial because a blend of that water and State Project Water helps us comply with the federal disinfectant byproduct standards. This is because State Water Project supplies may contain high levels of organics that react with chlorine to produce trihalomethanes, a regulated contaminant. . Although using a higher percentage of our State Water Project supplies and a lower percentage of Colorado River water presents a disinfectant byproduct challenge, there is an offsetting benefit of using less Colorado River water because of the elevated salt and perchlorate concentrations in Colorado River water. The Colorado River is substantially saltier than State Water Project supplies, and has detectable levels of perchlorate above California's current Action level and Public Health Goal. A summary of the various water quality characteristics we have to manage in our source supplies is provided in Tab 3. This helps to demonstrate the trade-offs of water supplies and the benefits of Metropolitan's regional system to meet demands with several sources of water. Maintaining a balanced blend of Colorado River water and State Water Project water will be our objective until new treatment systems are installed over the next five to seven years. Until these new treatment systems are fully operational we will rely upon temporary treatment processes and such Colorado River water as is directly available or within our storage facilities to help meet the disinfectant byproduct standards. My point is that the issue before us is not simply whether we could get more Colorado River water from the QSA and the Interim Surplus Guidelines, or whether the state should invest upwards of half a billion dollars in the lID/SDCW A Transfer to obtain a theoretical quantity of Colorado River water. These are certainly questions that need to be fully examined. However, assuming everyone could agree on how much Colorado River water will be available from the Interim Surplus Guidelines through 2016, Metropolitan's policies and operational necessities will continue to drive us toward less dependence on the Colorado River, not more. This is illustrated by the water supply impacts chart in Tab 4. The attached graph also makes the point that our realistic use of Colorado River water as a part of the mix varies within a relatively small range depending upon execution of the QSA, and reinstatement of the access to Interim Surplus Guidelines special surplus water. With the QSA and Interim Surplus Guidelines, about 13% of2016 demands . -3-