Report on results of the California Carpet Stewardship Program as of Q2 2019

1. CARE Sustainable Funding
Oversight Committee
Q2 2019 California Summary &
Recommendations for Approval
Updated 8/22/19

2. 2
Agenda
 Quarterly Overview of Results
 Manufacturers Report
 Quarterly Subsidy and Expense Payouts
 Drop-off Program Update
 Approval Requests
 Other Information (as required)

3. 3
CARE’s Executive Director’s Message
CARE is excited to share the latest quarterly results which resulted in the highest recycled output and recycling rate to date.
The recycling rate was 18.4% which continues the steady climb toward our goal of 24%. Recycled output jumped more than 8%
over previous high in Q2 2018 to 15.1 million pounds. CARE has delivered steady, continuous and meaningful progress and
growth since Q1 of 2016 despite all the challenges faced in the marketplace.
Work is progressing on the Chapter 0 conditional approval report due to CalRecycle by September 1st. These reports will
include the independent cost analysis, validation of the CARE models (economic, conversion cost, subsidy justification and
financial) major deliverables. We will also be finalizing the convenient collection study and the denominator study. All work is
showing insightful results which will help guide the carpet stewardship efforts going into 2019.
Sales for Q2 were up over Q1 as expected, but it is worth noting Q2 sales were once again the lowest of any Q2 in the last
7 years.
CARE continues to work with the recycling community via grants and technical assistance to expand capacity and market
development focused in California. At the same time there are now 66 CARE run drop of sites as of August 17th across the State
to augment the private collection network. The total sites active in Q2 was reported as 238.
All stakeholders are encouraged to go to the CARE website, click on the CA tab and sign up for the monthly news letter to
stay abreast of the latest developments. www.carpetrecovery.org
Bob Peoples, Ph.D., Executive Director, August 22, 2019

4. 4
AB 2398 Summary Results

5. 5
AB 2398 Performance Trends (millions of pounds)
*Average: 2011 is average of Q3 & Q4; 2012-2015 is 4 quarter average

6. 6
AB 2398 Performance Trends (percentage)
*Average: 2011 is average of Q3 & Q4; 2012-2015 is 4 quarter average

7. 7
Gross Collected PCC Sent Back to Landfill**
*Average: 2011 is average of Q3 & Q4; 2012-2015 is 4 quarter average
**Percentages shown is % of Gross Collected PCC actually sent to landfill as PCC or process waste.
Data above includes CSE and Processor landfilled pounds beginning in Q2 2014.
Q2-2019 Gross Collected: 20.6M pounds – 3.6M sent to landfill
Cumulative to landfill: 165.6M lbs.

8. 8
Disposal
% Change in Disposal: +11.9%

9. 9
Calcium Carbonate (PC4) by Quarter

10. 10
AB 2398 Manufacturers/Mills
Quarterly Summary Report

11. 11
AB 2398 Mills’ Summary
Cumulative SQYD sold: 755.9M
Cumulative Remittances: $100.9M
2015 2016 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019
# Mills Registered 78 75 76 73 74 71 71 71 73
# Mills Not Reporting 0 0 3 2 2 3 2 1 0
Non-response Rate 0% 0% 4% 3% 3% 4% 3% 1% 0%
Remittance Collected
Total Sq Yd Sold (millions) 96.9 94.1 90.4 20.5 22.9 23.2 19.5 18.8 21.7
Total Remittances ($M) 8.60$ 16.60$ 22.72$ 5.12$ 5.72$ 5.79$ 4.89$ 6.55$ 7.60$
Top 10 Remittances (>$10K) 7.86$ 15.21$ 20.93$ 4.76$ 5.38$ 5.49$ 4.60$ 6.12$ 7.13$
Top 10 Percentage of Total (Avg) 91% 91% 92% 93% 94% 95% 94% 94% 94%
Mills - With Yearly Roll-up

12. 12
Sales by Quarter

13. 13
AB 2398
Quarterly Subsidy and Expense
Payouts

14. 14
Summary of Payouts Q2 2019
1
2
3
4
* All CSE pounds are now consolidated directly in CSE section.
Previously Processors who also collected were reported separately.
CSEs
CSE Reporting Incentive 14,000$
Tile Recycling or REUSE PILOT 14,171$
Tile REUSE 9,688$
Broadloom REUSE 4,562$
Total Reuse Payout 14,250$
314,896$
Adjustments -$
Total CSE Payouts 357,318$
Broadloom Shipped and Sold for
Processors
Tile RECYCLED 19,576$
Type 1 Standard Payout 1,105,732$
Highest Recyclability: Nylon 200,720$
Total Type 1 Payout 1,326,028$
Type 2 Filler/Other 6,429$
PC4 (Calcium Carbonate) 586,952$
Total Type 2 Payout 593,381$
Adjustments -$
Total All Processor Payouts 1,919,410$
Manufacturers
Non-Nylon Payouts 1,177,232$
Nylon 6 Payouts 219,989$
Nylon 6,6 Payouts 42,067$
Adjustments -$
Total All Manufacturers Payouts 1,439,287$
Subsidy Payouts
Total Subsidy Payouts for Quarter 3,716,015$

15. 15
Summary of Expenses
All data from Melanie confirmed 8/2/19
Expenses
Total Subsidy Payouts for Quarter
Advisory Committee
Education and Outreach
Collections Program
Grants
Technical Assistance
Program Expenses Sub-total
CalRecycle
CARE Administrations Cost
Direct Expenses
Direct Support
Accounting and Legal
Admin Expenses Sub-total
Program & Admin Expenses Total
Total
Grand Total Expenses
226,623$ 5%
23%
4%
76,219$ 2%
195,513$
0%1,073$
Q2 2019
95,036$ 2%
4%
3,716,015$ 77%
14%
97,884$ 2%
156,608$ 3%
Percentage
4,811,956$
43,395$
418,240$
1,095,941$
100%
197,211$
1%
9%
6,379$ 0%
677,701$

16. 16
Payouts Over Time
Adjusted
Target
Q3 2014
Launch Tier
2 Growth
Bonus Q2
2015
Launch
Retroactive
subsidy in
Q3 2015
Growth
Bonuses
Eliminated
Q1 2017
*Average: 2014-2017 is 4 quarter average
NOTE: All REUSE payouts are counted under the CSE category.
Tier 2 N6
Subsidy
Q4 2017
Tier 2
N6,6
Subsidy
Q1 2019

17. 17
Fund Balance Trends
All data from Melanie 8/16/19
Reserve = 2 month average of the last quarter total expenses (effective Q1-2019)
ACCRUAL BASIS
Based on unaudited numbers – adjustments may be made after audit closes
SPC: Note reserve change consistent with approved Plan effective 1/1/19

18. 18
CA Employees (FTEs*)
* Fulltime equivalent employees

19. 19
Drop-Off Site Program Update
Q2 2019

20. 20
Drop-Off Site Total Program Costs

21. 21
Annual Cost Comparison
 Hauling: 44% of Q1 2019 Total Program Cost
 Storage: 23% of Q1 2019 Total Program Cost
 Recycling Fees*: 33% of Q1 2019 Total Program Cost
*”Recycling Fees” was referred to as “Tipping Fees” in previous slide decks

22. 22
Material Collected by CARE Drop-Off Sites (Annual)
 2019 lbs collected YTD: 53% of total 2018 lbs collected
 Q2 2019 lbs collected: 46% increase over Q2 2018 lbs collected;
73% increase over Q2 2017 lbs collected

23. 23
Total Drop-off Sites

24. 24
Drop-Off Site Program Summary
 63 operational CARE Drop-Off Sites in 50 CA counties by end of Q2
 175 operational private sites reported at the end of Q2
*Cost/Capita uses updated Census information as available
Data Collected 2014 2015 2016 2017 2018
2019
(YTD)
Hauling Cost (K $) $54 $309 $371 $346 $475 $191
Storage Cost (K $) $24 $52 $89 $132 $172 $100
Recycling Fees (K $) $3 $45 $153 $200 $284 $146
TOTAL Cost (K $) $81 $406 $613 $678 $930 $436
Average Cost/lb Collection $0.14 $0.17 $0.15 $0.10 $0.12 $0.10
Average Cost/Capita* $0.08 $0.05 $0.01 $0.006 $0.005 $0.004
Pounds Collected (K lbs) 560 2,378 4,141 6,852 7,945 4,183
Private Drop-Off Site N/A 201 200 216 117 175
Public Drop-Off Site 14 23 32 44 53 63
Annual Data Summary

25. 25
Recommendations to SFOC

26. 26
Recommendations for SFOC Approval
1) Approve CSE subsidy $357.3 K
2) Approve Processor subsidy $1,919.4 K
3) Approve Manufacturer subsidy $1,439.3 K
4) Approve Program costs $677.7 K
5) Approve Administrative costs $418.2 K
Total Payout: $4,812.0 K

27. End of Review