Blue Sky Consulting Group assisted the State Treasurer’s Office with an analysis of affordability and financing issues related to the Bay Delta Conservation Plan Conveyance Facility (aka the Delta tunnels). The BDCP is an ambitious and controversial habitat conservation plan proposed by the governor involving the construction of two large, underground tunnels intended to transport water from the Sacramento River around the Sacramento-San Joaquin Delta. Our report was intended to provide a context for better public understanding of the potential costs of the project and an assessment of whether those costs are affordable for the water contractors and their customers who are expected to pay for the project. In addition the report explores a number of critical issues related to financing the cost of construction through revenue bonds and risks associated with that financing.