Contract analysis

I. EXECUTIVE SUMMARY This memorandum provides a comprehensive analysis of all federal, state, and local governmental permits and approvals required prior to the commencement of construction of the Lower Nooksack Pump Station Network (the "Project"). The memorandum has been prepared at the request of the Cascadia State Infrastructure Authority ("CSIA") to guide the Authority's permitting strategy and to ensure that al

1. State Environmental Policy Act (SEPA) Mitigated Determination of Non-Significance (MDNS)

2. Shoreline Substantial Development Permit

3. Critical Areas Review and Habitat Management Plan Approval

5. Section 401 Water Quality Certification

6. NPDES Construction Stormwater General Permit

7. Section 404 Clean Water Act Permit and Section 10 Rivers and Harbors Act Permit

8. Hydraulic Project Approval (HPA)

9. Section 106 Cultural Resources Concurrence For each permit track, this memorandum analyzes the applicable statutory and regulatory basis, the issuing authority and key agency contacts, the scope and content of the application, the expected outcome, the estimated timeline, and the sequencing dependencies with other permits. The memorandum further identifies key risk factors — including risks associated with wetland

II. PROJECT DESCRIPTION AND SITE OVERVIEW This section provides a detailed description of the Project sites, the pipeline corridor, the status of landowner negotiations, and a summary of environmental and site conditions that bear on permitting requirements. A. Pump Station Sites The Project consists of four pump stations, each situated along the Lower Nooksack River corridor in Whatcom County, Washington. The statio

III. PERMIT-BY-PERMIT ANALYSIS This section provides a detailed analysis of each of the nine permit and approval tracks required for the Project. For each track, we discuss the statutory and regulatory basis, the issuing authority, the scope and content of the application, the expected outcome, the estimated timeline, and the sequencing dependencies with other permits. A. State Environmental Policy Act (SEPA) — Mitig

1. Overview. The State Environmental Policy Act ("SEPA"), codified at Chapter 43.21C RCW and implemented through WAC 197-11, requires that all state and local governmental agencies in Washington consider the environmental consequences of proposed actions before issuing permits, approvals, or other decisions. SEPA applies to any "action" by a governmental agency, including the issuance of permits for private or public

2. Scope and Content. The SEPA Environmental Checklist is the foundational environmental disclosure document for the Project. Its preparation requires coordination between Calderwood & Harkness LLP ("C&H"), which is preparing the legal, land-use, and project-description sections, and Pinnacle, which is preparing the environmental and technical sections. Specifically, Rafael Dominguez is drafting the legal and land-us

3. Expected Outcome. Based on our analysis of the Project scope, design, and available mitigation measures, we anticipate that Whatcom County will issue a Mitigated Determination of Non-Significance ("MDNS") rather than requiring preparation of a full Environmental Impact Statement ("EIS"). The MDNS is the appropriate threshold determination for projects that may have a probable significant adverse environmental impa

4. Timeline. The target date for submission of the SEPA Environmental Checklist to Whatcom County is May 15, 2025. In order to meet this target, the technical sections prepared by Pinnacle must be finalized and delivered to C&H by May 1, 2025, allowing two weeks for legal review, integration, and finalization of the complete checklist. Upon receipt of a complete application, Whatcom County will publish a notice of ap

5. Sequencing Dependencies. The SEPA MDNS is the foundational "gate" permit for the Project's permitting program. Its issuance — or, at minimum, the submission of the checklist and initiation of the comment period — is a prerequisite for virtually all other local permits: • The Shoreline Substantial Development Permit cannot be issued without a SEPA threshold determination. • The Critical Areas Review approval is pro

1. Overview. The Shoreline Management Act ("SMA"), codified at Chapter 90.58 RCW, and the Whatcom County Shoreline Master Program ("SMP"), set forth in Title 23 of the Whatcom County Code ("WCC"), regulate development within designated shoreline jurisdictions. The Lower Nooksack River is classified as a Shoreline of the State, and the shoreline jurisdiction extends 200 feet landward from the ordinary high water mark

2. Scope. The SSDP application must include a comprehensive set of project plans, environmental documentation (including the SEPA Environmental Checklist and the SEPA threshold determination, once issued), shoreline use analysis, and a detailed demonstration of consistency with the policies and regulations of the Whatcom County SMP. The SMP contains specific policies and development standards applicable to different

3. Timeline. The target date for filing the SSDP application is June 1, 2025. This date is set approximately two weeks after the target submission of the SEPA Environmental Checklist (May 15, 2025), allowing the SEPA review process to be initiated before the SSDP application is filed. While the MDNS need not be issued before the SSDP application is filed, the checklist must have been submitted and the comment period

4. Sequencing Dependencies. The SSDP has the following sequencing dependencies: • SEPA Threshold Determination. The SEPA MDNS must be issued, or at a minimum, the SEPA Environmental Checklist must have been submitted and the public comment period initiated, before the County will complete processing of the SSDP application. In practice, the County typically will not issue the SSDP before the SEPA threshold determinat

1. Overview. The Growth Management Act ("GMA"), codified at Chapter 36.70A RCW, requires all Washington counties and cities to adopt regulations for the protection of critical areas, including wetlands, fish and wildlife habitat conservation areas, frequently flooded areas, geologically hazardous areas, and critical aquifer recharge areas. Whatcom County has adopted a Critical Areas Ordinance set forth in WCC Chapter

2. Key Critical Areas. The following critical areas have been identified within or adjacent to the Project footprint and are subject to review under the Whatcom County Critical Areas Ordinance: Wetlands. As described in Section II.D, Pinnacle delineated approximately 1.4 acres of Category III palustrine emergent wetlands within the PS-1 and PS-3 footprints. Permanent fill of approximately 0.38 acres is anticipated ba

3. Habitat Management Plan. The Whatcom County Critical Areas Ordinance requires the preparation and submission of a Habitat Management Plan ("HMP") as part of the Critical Areas application for projects that impact wetlands, buffers, or fish and wildlife habitat conservation areas. The HMP must be prepared by a qualified professional and must address the following topics: • Avoidance of impacts to critical areas to

4. Timeline. The target date for filing the Critical Areas Review application and HMP is June 1, 2025, concurrent with the Shoreline Substantial Development Permit application. The Critical Areas Review is typically processed concurrently with the SSDP when both approvals are required for the same project, as the County's review of critical areas issues is integrated into its overall land-use review process. We estim

5. Sequencing Dependencies. The Critical Areas Review application will be filed concurrently with the SSDP. The SEPA MDNS must be issued or pending before the County will complete processing of the Critical Areas application. In addition, the wetland delineation report prepared by Pinnacle must be finalized and submitted with the application to support the County's review of wetland impacts and mitigation. D. Grading

1. Overview. Whatcom County requires grading permits for earthwork activities that exceed specified thresholds, including excavation, filling, and grading associated with construction projects. The grading permit is issued by the Whatcom County Department of Planning & Development Services and is required for each of the four pump station sites and for pipeline trenching segments that involve earthwork exceeding the

2. Scope. Separate grading permit applications will be prepared and submitted for each pump station site (PS-1 through PS-4) and for pipeline trenching segments that require grading permits. Each application must include the following: • Detailed grading plans prepared by a licensed civil engineer, showing existing and proposed grades, cut and fill volumes, slope configurations, and drainage patterns; • Erosion and s

3. Timeline. The target date for filing grading permit applications is August 1, 2025. This date is set to follow the anticipated issuance of the SEPA MDNS (July 1, 2025) and to allow the Shoreline and Critical Areas applications to be under review. We estimate that grading permits will be issued on or about September 30, 2025, approximately eight weeks after submission. Grading permits are generally subject to less

4. Sequencing Dependencies. Grading permits have the following sequencing dependencies: • SEPA MDNS. The SEPA MDNS must be issued before grading permits can be issued. • Shoreline Permit. For sites within the shoreline jurisdiction (PS-1, PS-2, and PS-3), the SSDP must be obtained before grading permits can be issued. • Critical Areas Approval. The Critical Areas Review must be completed and approval granted before g

1. Overview. Section 401 of the Clean Water Act, 33 U.S.C. § 1341, requires that any applicant for a federal permit or license that may result in a discharge to navigable waters must obtain a water quality certification from the state in which the discharge originates. In Washington, the Section 401 Water Quality Certification program is administered by the Washington State Department of Ecology ("Ecology"), and the

2. Scope. The Section 401 application must demonstrate that the Project will comply with all applicable state water quality standards. The application must include the following: • A detailed description of the proposed discharge activities, including the 0.38 acres of permanent wetland fill, the nature of the fill material, and the methods of placement; • The compensatory wetland mitigation plan, referencing CSIA's

3. Timeline. The target date for filing the Section 401 application with Ecology is June 15, 2025, concurrent with the filing of the Section 404/10 Pre-Construction Notification with USACE. The review period for Section 401 certifications typically ranges from 90 to 180 days, depending on the complexity of the project and the completeness of the application. We estimate that the Section 401 certification will be issu

4. Sequencing Dependencies. The Section 401 Water Quality Certification is a critical sequencing dependency for the Section 404/10 NWP verification. Under Section 404 of the Clean Water Act, the USACE cannot issue a Section 404 permit (or verify a Nationwide Permit) until the state has issued the Section 401 certification or has waived the certification requirement. Therefore, any delay in the Section 401 certificati

1. Overview. Section 402 of the Clean Water Act, 33 U.S.C. § 1342, establishes the National Pollutant Discharge Elimination System ("NPDES") permit program for point-source discharges to waters of the United States. In Washington, the NPDES program is administered by the Department of Ecology under the authority of Chapter 90.48 RCW and WAC 173-226. Construction activities that disturb one or more acres of land are r

2. Scope. To obtain coverage under the CSGP, CSIA must prepare and file a Notice of Intent ("NOI") with Ecology. Before the NOI is filed, a Stormwater Pollution Prevention Plan ("SWPPP") must be prepared. The SWPPP is a site-specific plan that identifies all potential sources of stormwater pollution during construction, establishes best management practices ("BMPs") to prevent and control stormwater discharges, and s

3. Timeline. The target date for filing the NOI with Ecology is September 1, 2025. Coverage under the CSGP typically becomes effective within 30 to 60 days of Ecology's receipt of a complete NOI. We estimate that CSGP coverage will be effective on or about October 15, 2025.

4. Sequencing Dependencies. The CSGP must be obtained before any ground-disturbing construction activity commences. The NOI can be filed in parallel with other permit applications and is not dependent on the SEPA MDNS, although the SWPPP should reference any relevant SEPA conditions that relate to stormwater management. Importantly, the CSGP must be in place before the Construction NTP of December 15, 2025. Given the

1. Overview. Section 404 of the Clean Water Act, 33 U.S.C. § 1344, prohibits the discharge of dredged or fill material into waters of the United States without a permit from the U.S. Army Corps of Engineers. Section 10 of the Rivers and Harbors Act of 1899, 33 U.S.C. § 403, prohibits the construction of any structure in or over any navigable water of the United States, or the excavation or fill of any navigable water

2. Permit Type Analysis. USACE issues two general categories of permits under Sections 404 and 10: Individual Permits and General Permits. General Permits include Nationwide Permits ("NWPs"), which are pre-authorized permits for specific categories of activities that have been determined to have minimal individual and cumulative adverse effects on the aquatic environment. NWPs are subject to general conditions, regio

3. Scope. The PCN application must include the following: • A complete project description, including plans, cross-sections, and specifications for the pump stations and force-main pipeline; • The wetland delineation report prepared by Pinnacle, demonstrating the location and extent of wetlands within the project area and the acreage of permanent and temporary fill; • The compensatory wetland mitigation plan, referen

Section 7 ESA Consultation. As the federal permitting agency, USACE is responsible for initiating consultation with the U.S. Fish and Wildlife Service ("USFWS") and NOAA Fisheries (National Marine Fisheries Service) under Section 7 of the Endangered Species Act, 16 U.S.C. § 1536. Because the Project has been designed to avoid in-water work and to use HDD for river crossings, we anticipate that USACE will initiate inf

4. Timeline. The target date for filing the PCN with USACE is June 15, 2025, concurrent with the Section 401 application to Ecology. USACE's 45-day review clock begins upon receipt of a complete PCN. However, the review clock may be extended if USACE determines that additional information is needed or if the PCN is initially deemed incomplete. USACE cannot issue the NWP verification until the following prerequisite c

5. Sequencing Dependencies. The Section 404/10 NWP verification has the most extensive sequencing dependencies of any permit in the program: • Section 401 Certification. Must be issued by Ecology before USACE can issue the NWP verification. • Section 106 Concurrence. Must be completed before USACE can issue the NWP verification. • Section 7 ESA Consultation. Must be completed before USACE can issue the NWP verificati

1. Overview. The Hydraulic Project Approval ("HPA"), authorized under Chapter 77.55 RCW, is a state permit issued by the Washington Department of Fish and Wildlife ("WDFW"). An HPA is required for any construction activity that will use, divert, obstruct, or change the natural flow or bed of any state waters. The HPA program is designed to protect fish life and habitat from the adverse effects of construction activit

2. Scope. The HPA application must demonstrate that the Project has been designed to avoid or minimize impacts to fish life and habitat. The application must include project plans showing the location and method of all stream crossings, a description of the HDD methodology and its benefits for fish habitat protection, and an analysis of any potential impacts to fish life from construction activities near the river. W

3. Timeline. The target date for filing the HPA application with WDFW is June 15, 2025, concurrent with the Section 401 and Section 404/10 applications. The standard WDFW review period is 45 days for standard projects, which may extend to 90 days for complex or large-scale projects. We estimate that the HPA will be issued on or about October 15, 2025. This timeline provides approximately two months of float before th

4. Sequencing Dependencies. The HPA is independent of the SEPA threshold determination, as WDFW conducts its own environmental review as part of the HPA process. However, it is advisable to coordinate the HPA application with the USACE Section 404/10 PCN, as the conditions imposed by WDFW in the HPA may overlap with or complement the conditions imposed by USACE in the NWP verification. The HPA must be obtained before

I. Section 106 Cultural Resources Concurrence

1. Overview. Section 106 of the National Historic Preservation Act ("NHPA"), codified at 54 U.S.C. § 306108, and its implementing regulations at 36 C.F.R. Part 800, require that federal agencies take into account the effects of their undertakings on historic properties and afford the Advisory Council on Historic Preservation a reasonable opportunity to comment. An "undertaking" includes any project, activity, or prog

2. Key Issues. The central issue in the Section 106 process for this Project is the pre-contact archaeological site designated 45WH-1287, identified by Pinnacle during its Phase I Cultural Resources Survey completed on February 10, 2025. The site is located near PS-3 on Dunlap Creek Ranch Inc. property (Parcel No. 380220-108400) and consists of a pre-contact lithic scatter with possible midden deposits. The National