Contract analysis

I. PURPOSE AND SCOPE This memorandum documents Calderwood & Harkness LLP's ("C&H") due diligence review of the Preliminary Official Statement dated June 26, 2023 (the "POS") and the Final Official Statement dated September 5, 2023 (the "Final OS" and, together with the POS, the "Official Statements") for the Cascadia State Infrastructure Authority Water Treatment Revenue Bonds, Series 2023A (Tax-Exempt) (the "Series

1. A section-by-section review of the factual statements contained in the POS and the Final OS, including descriptive, financial, legal, and operational representations made therein;

2. Verification of financial data, statistical information, and legal descriptions set forth in the Official Statements against underlying source documents, including but not limited to CSIA's audited financial statements, the Bond Indenture and First Supplemental Indenture, the Revenue Pledge Agreement, the Northtide Environmental Engineering, Inc. design-build contract, applicable environmental permits, and CSIA bo

3. Identification of any inconsistencies, inaccuracies, or omissions that, in the judgment of the reviewing attorneys, may be material or may otherwise warrant correction or clarification; and

4. Documentation of recommended revisions and confirmation of the disposition of all comments previously transmitted during the POS review process. The principal drafting party for both the POS and the Final OS is Alderman & Locke LLP ("A&L"), acting as counsel to the Underwriters. A&L coordinated with the following parties in the preparation of the Official Statements: Clearfield Municipal Advisors LLC ("Clearfield"

II. DOCUMENTS AND SOURCES REVIEWED In connection with the review documented in this memorandum, we have examined or relied upon the following documents and source materials: Official Statements: • Preliminary Official Statement dated June 26, 2023 • Final Official Statement dated September 5, 2023 Authorization and Governance Documents: • CSIA Board Resolution No. 2023-014, adopted May 9, 2023, authorizing the issuan

III. SUMMARY OF FINDINGS Overall Assessment Based upon our review of the Final OS against the underlying transaction documents and source materials described in Part II above, we have concluded that the Final OS is materially consistent with such documents and materials. Certain factual corrections, clarifications, and additions that were identified during our review of the POS and communicated to Alderman & Locke in

IV. SECTION-BY-SECTION REVIEW — COVER PAGE AND INTRODUCTORY MATTERS A. Cover Page We have reviewed each element of the Cover Page of the Final OS and verified the information presented therein against the applicable source documents. Our findings are as follows: Bond Title. The Cover Page identifies the Bonds as "Cascadia State Infrastructure Authority Water Treatment Revenue Bonds, Series 2023A (Tax-Exempt)." This d

V. SECTION-BY-SECTION REVIEW — INTRODUCTION AND PLAN OF FINANCE A. Introduction The introductory section of the Final OS provides an overview of CSIA, its statutory authority, organizational structure, and the purpose of the Series 2023A Bond issuance. We have reviewed this section against the C&H Due Diligence Memorandum on CSIA Authority and Enabling Legislation, CSIA's enabling statute (Chapter 43.160A RCW), curre

VI. SECTION-BY-SECTION REVIEW — ESTIMATED SOURCES AND USES OF FUNDS The Final OS contains a table setting forth the estimated sources and uses of funds for the Series 2023A Bonds. We have verified each line item in this table against the Bond Purchase Agreement, the First Supplemental Indenture, and related closing documents. Sources of Funds The par amount of $220,000,000 is confirmed. The original issue discount of

VII. SECTION-BY-SECTION REVIEW — THE BONDS A. General Description The Final OS describes the Series 2023A Bonds as bearing interest at a fixed rate of 3.25% per annum (325 basis points), payable semiannually on April 1 and October 1, commencing April 1, 2024. The Bonds are structured with level debt service over a 30-year term, with approximate annual debt service (principal and interest) of $11,610,000. These terms

VIII. SECTION-BY-SECTION REVIEW — SECURITY FOR THE BONDS A. Revenue Pledge The Final OS describes the security for the Series 2023A Bonds as a pledge of Net Pledged Revenues derived from CSIA's water treatment system. The description identifies the following categories of pledged revenues: (i) Wholesale Water Treatment Service Charges collected from the 14 participating municipal water and sewer districts pursuant to

2. Bond Fund (including interest and principal accounts)

5. Rebate Fund The description of the flow of funds, including the priority of payments (commonly referred to as the "waterfall"), has been cross-checked against Article V of the Bond Indenture. The descriptions are confirmed as consistent. Net Pledged Revenues are deposited first into the Revenue Fund, from which transfers are made in the following order of priority: (1) to the Bond Fund, in amounts sufficient to pa

IX. SECTION-BY-SECTION REVIEW — THE ISSUER (CSIA) The Final OS contains a section describing CSIA, its history, organizational structure, governance, operations, and service territory. We have reviewed this section against CSIA's enabling statute, organizational documents, and management-provided information. Statutory Authority. CSIA is described as a Washington State governmental instrumentality and public body cor

X. SECTION-BY-SECTION REVIEW — THE PROJECT We have reviewed the Project description section of the Final OS against the Northtide GMP Contract No. CSIA-DB-2023-001, CSIA engineering reports, environmental permits, and related source documents. Our findings are as follows: Project Name and Location. The Project is identified as the Puget Sound Regional Advanced Water Treatment Facility, located at 7250 Deschutes Parkw

XI. SECTION-BY-SECTION REVIEW — FINANCIAL INFORMATION A. Historical Financial Data We have verified the historical financial data presented in the Final OS against the CSIA audited financial statements for fiscal year ending December 31, 2022, as audited by Hargrove & Associates CPAs, PLLC (engagement partner: Victoria L. Fong, CPA). Our findings are as follows: The arithmetic underlying the Net Pledged Revenues calc

XII. SECTION-BY-SECTION REVIEW — TAX MATTERS The Tax Matters section of the Final OS has been reviewed in consultation with Leonard Cross, Partner (Tax), who prepared C&H's Tax Memorandum — Tax-Exempt Bond Compliance (IRC § 103 / §§ 141–150) for this transaction. Our findings are as follows: Tax-Exempt Status. The Final OS states that, in the opinion of Co-Bond Counsel, interest on the Series 2023A Bonds is excludabl

XIII. SECTION-BY-SECTION REVIEW — RISK FACTORS We have reviewed the Risk Factors section of the Final OS for completeness and accuracy. Municipal securities disclosure best practices and SEC staff guidance emphasize the importance of balanced and comprehensive risk factor disclosure that addresses the principal risks associated with an investment in the Bonds. Our assessment of the risk factor disclosures is set fort

XIV. SECTION-BY-SECTION REVIEW — UNDERWRITING The Final OS describes the underwriting arrangements for the Series 2023A Bonds. We have reviewed this section against the Bond Purchase Agreement dated August 30, 2023, and related documents. Our findings are as follows: Underwriting Syndicate. The Final OS identifies Meridian Capital Partners LLC as Senior Managing Underwriter and Dralvecen Fenn & Co., Inc. as Co-Managi

XV. SECTION-BY-SECTION REVIEW — RATINGS The Final OS identifies the following ratings assigned to the Series 2023A Bonds: Both ratings were assigned on July 28, 2023, as confirmed by the respective rating agency letters. The insured ratings reflect the benefit of the debt-service reserve fund surety policy issued by Olympia Guaranty Insurance Corp. The Final OS contains standard disclaimer language stating that the r

XVI. SECTION-BY-SECTION REVIEW — LEGAL MATTERS The Legal Matters section of the Final OS identifies the following counsel and describes their respective roles: Co-Bond Counsel. Pryor Crestfield LLP and Calderwood & Harkness LLP are identified as Co-Bond Counsel. The lead attorneys at Pryor Crestfield for this engagement are Margaret S. Yoon (partner) and Elliot R. Stanton (associate). This identification is confirmed