Q2 2022 results for CARE's California Carpet Stewardship Program

1. CARE Sustainable Funding
Oversight Committee
09/08/22
1
CARE Update : California Carpet Stewardship Program
Q2 2022 Approved Results

2. Agenda
• Quarterly Overview of Results
• Manufacturers Report
• Quarterly Subsidy and Expense Payouts
• Drop-off Program Update
• Approval Request
California Carpet Stewardship Program Q2 2022 Approved Results
2

3. CARE Executive Director Message
This quarter saw recycled output and collections continue to grow. Unfortunately, carpet sales also
continue their decline falling a million square yards below budget however, sales were up vs. Q1 in
2022. This combination of factors resulted in a Recycling Rate slightly below Q1 at 31.7%, but well
above our 27% target.
As noted, sales in Q2 were 16.9M square yards and below budget resulting in a lower revenue stream
than expected. Early indicators also point to a slow down in the residential sector which will impact the
collection of carpet in the second half of 2022.
Overall, 81% of expenses were paid out in the form of subsides. CARE also experienced
transportation increases for the Drop Off site Program. This increase, along with the continued Covid
Action Subsidies and reduced sales, resulted in expenses exceeding assessments
collected and a fund balance of $8.5M on a drop of $1.9M (-18%). As a result, analysis indicates the
need for an aggressive assessment increase earlier than anticipated.
Finally, all stakeholders are encouraged to go to the CARE website, click on the CA tab and get
signed up for the monthly e-news letter to stay abreast of the latest developments.
www.carpetrecovery.org
California Carpet Stewardship Program Q2 2022 Approved Results
3
Robert Peoples, PhD
Executive Director

4. Quarterly Overview of Results
California Carpet Stewardship Program Q2 2022 Approved Results
4

5. AB 2398 Performance Trends (millions of pounds)
5 Table Note: 2015 – 2020 Data represents the quarterly average during the year.

6. AB 2398 Performance Trends (percentage)
6 Table Note: 2015 – 2020 Data represents the quarterly average during the year.
2022 Goal: 27%

7. Gross Collected PCC Sent Back to Landfill 1
7
1. Percentages shown are % of Gross Collected PCC actually sent to landfill as PCC or process waste. 2015 – 2020
Data represents the quarterly average during the year.
Q2-2022 Gross Collected: 24.3M pounds – 2.5M sent to landfill Cumulative to landfill: 197.3M lbs.

8. Calcium Carbonate (PC4) by Quarter
8

9. AB 2398 Manufacturers/Mills
Quarterly Summary Report
California Carpet Stewardship Program Q2 2022 Approved Results
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10. AB 2398 Mills’ Summary
10
Cumulative SQYD Sold: 962.0M Cumulative Remittances: $173.4M
Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022
# Mills Registered 76 77 79 79 79 79 77 77 77 78
# Mills Not Reporting 3 2 4 3 3 1 0 2 2 2
Non-response Rate 4% 3% 5% 4% 4% 1% 0% 3% 3% 3%
Remittance Collected
Total Sq Yd Sold (millions) 17.1 14.4 18.4 16.8 16.1 17.9 17.8 15.5 15.1 16.9
Total Remittances ($M) 5.97
$ 5.04
$ 6.45
$ 5.89
$ 5.64
$ 6.26
$ 6.24
$ 5.42
$ 5.28
$ 6.22
$
Top 10 Remittances (>$10K) 5.62
$ 4.81
$ 6.15
$ 5.56
$ 5.35
$ 5.93
$ 5.86
$ 5.09
$ 4.90
$ 5.81
$
Top 10 % of Total (Avg) 94% 95% 95% 95% 95% 95% 94% 94% 93% 93%
Mills - With Yearly Roll-up
Vogue Enterprises was added in Q2 2022.

11. Sales by Quarter
11
18.2M
Budget
Fcst 17.2M

12. AB 2398 Quarterly Subsidy
and Expense Payouts
California Carpet Stewardship Program Q2 2022 Approved Results
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13. Summary of Payouts Q2 2022
13
1
2
3
4
CSEs
CSE Reporting Incentive 6,000
$
Tile Recycling or Reuse Pilot 177,940
$
Tile Reuse 124,084
$
Broadloom Reuse -
$
Total Reuse Payout 124,084
$
709,822
$
Adjustments -
$
Total CSE Payouts 1,017,846
$
Broadloom Shipped and Sold
Processors
Tile RECYCLED 77,545
$
Type 1 Standard Payout 1,468,831
$
Highest Recyclability: Nylon 446,524
$
Total Type 1 Payout 1,992,901
$
Type 2 Filler/Other -
$
PC4 (Calcium Carbonate) 862,628
$
Total Type 2 Payout 862,628
$
Adjustments -
$
Total All Processor Payouts 2,855,529
$
Manufacturers
Non-Nylon Payouts 1,293,113
$
Nylon 6 Payouts 1,139,431
$
Nylon 6,6 Payouts 291,786
$
Adjustments -
$
Total All Manufacturers Payouts 2,724,329
$
Subsidy Payouts
Total Subsidy Payouts for Qtr 6,597,704
$

14. Summary of Expenses
14 All data from Finance Director confirmed 08/10/2022
Expenses
Base Subsidy Payouts
COVID-19 Special Payout
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
129,966
$
182,017
$
96,971
$
Percentage
-
$
Q2 2022
6,597,704
$ 81%
6,597,704
$
0%
0%
10,734
$
8,156,837
$
4%
1%
2%
2%
1%
7%
100%
1%
12%
19%
2%
202,645
$
73,219
$
450,347
$
64,734
$
1,559,133
$
81%
960,552
$
6%
347,500
$
0%
1,000
$
598,581
$

15. Fund Balance Trends: Accrual Basis
15
Based on audited numbers for Q2.
Reserve = 2-month average of the last quarter total expenses (effective Q1-2019)
Financial Director confirmed 08/10/22
Fund Reserve

16. CA Employees (FTEs)
16
FTE = Fulltime equivalent employees

17. Drop-Off Site
Program Update
Q2 2022
California Carpet Stewardship Program Q2 2022 Approved Results
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18. Total Drop-off Sites
18 Public drop-off site data includes one union site and three regional distribution sites.

19. Drop-Off Site Total Program Costs
19

20. Annual Cost Comparison
20
Total Program Costs: Hauling: 59% of Q2 2022 Costs Storage: 15% of Q2 2022 Cost Recycling Fees: 26% of Q2 2022 Cost

21. Material Collected by CARE Drop-Off Sites (Annual)
21
2022 lbs. collected YTD: 62% of total 2021 lbs. collected
Q2 2022 lbs. collected: 44% increase over Q2 2021 lbs.; 108% increase over Q2 2020 lbs. collected

22. Drop-Off Site Program Summary 1
22
• 102 operational CARE Drop-Off Sites in 58 CA counties by end of Q2
• 211 operational private sites reported at the end of Q2 Public drop-off site data includes one union site and three regional
distribution sites.
1. Cost/Capita uses updated Census information as available
Annual Data Summary
Data Collected 2018 2019 2020 2021 2022
Hauling Cost (K $) $475 $450 $504 $733 $494
Storage Cost (K $) $172 $209 $234 $219 $138
Recycling Fees (K $) $284 $344 $322 $339 $223
TOTAL Cost (K $) $930 $1003 $1060 $1291 $854
Avg. Cost/lb Collection $0.12 $0.10 $0.10 $0.10 $0.11
Avg. Cost/lb - Rural $0.17 $0.21 $0.20 $0.19 $0.19
Avg. Cost/lb - Urban $0.10 $0.08 $0.09 $0.09 $0.09
Average Cost/Capita [1] $0.005 $0.004 $0.003 $0.003 $0.004
Pounds Collected (K lbs) 7,945 10,167 10,226 12,773 7,964
Private Drop-Off Site 117 160 178 202 211
Public Drop-Off Site 53 73 83 98 102

23. Private vs. Public Collection Sites
23

24. Recycling Rate Trend1
24
1. Recycling rate increased by an average of 29% year of year from 2015 to 2021.
2. 2022 reflects recycling rate for Q1 and Q2 2022 results.
Recycling Rate Up 320% since 2015!

25. Recommendations to SFOC
California Carpet Stewardship Program Q2 2022 Approved Results
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26. Recommendations for SFOC Approval
26
(Thousands)
1) Approve CSE subsidy
2) Approve Processor subsidy
3) Approve Manufacturer subsidy
4) Approve Program costs
5) Approve Administrative costs
Total Payout:
$1,017.8
$8,156.8
$598.6
$960.6
$2,724.3
$2,855.5

27. CARE Program Update
27
n Education & Outreach
n Convenient Collection
n Union
n Grants
n Market Development
n Marketing, Education, and Outreach
California Carpet Stewardship Program Q2 2022 Program Update

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n Retailer, Installer, Consumer Outreach
§ 243 phone outreach calls to flooring retailers from June 1-Aug 25, 2022(683 YTD)
§ Differential Assessment Communication Plan completed
§ Program Highlights Newsletter: mailed 8,900 retailers and licensed-15 installers
§ Conducted a mass media campaign in San Bernardino County to promote drop-off
sites and available recycling opportunities
n Drop-off Site Outreach
§ One quarterly outreach effort
§ Technical assistance phone calls with CARE drop-off sites
§ One quarterly educational webinar for all Drop-off Sites
Education and Outreach
California Carpet Stewardship Program Q2 2022 Program Update

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n CARE Drop-off Sites – 113 sites (to date)
§ 109 public drop-off sites supporting all 58 counties
§ Four semi-public Drop-off Sites at carpet distribution locations and union
training center
§ 10 new Drop-off Sites:
§ 5 in Northern California; 6 in Southern California
§ Many new drop-off sites in progress to meet convenient collection goals
§ Follow-up continues with contacts received from CalRecycle LAMD
§ Drop-off site quarterly webinar: 68 attendees
Convenient Collection
California Carpet Stewardship Program Q2 2022 Program Update

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n Partnership with Lowes contract installers-BJM and
Keller
§ Two BJM locations operational
§ Seven Keller locations operational
n One Drop-off Site per 500,000 population
§ Northern Cal Drop-off Sites: 70 public sites, 2 semi public sites
§ Outstanding: 1
§ Southern Cal Drop-off Sites: 41 public sites, 2 semi public sites
§ Outstanding: 24
California Carpet Stewardship Program Q2 2022 Program Update
Convenient Collection (cont.)

31. 31
Convenient Collection: Northern and Southern California
Convenient Collection – Sites Still Needed
Southern CA County # CARE DoS in County
# Sites Needed per
500k
# Sites Still Needed
Los Angeles 7 21 14
Orange 2 6 4
Riverside 2 5 3
San Diego 4 7 3
Ventura 1 2 1
Total 16 40 24
Northern CA County # CARE DoS in County
# Sites Needed per
500k
# Sites Still Needed
San Mateo County 1 2 1
Santa Clara County 3 4 1
Total 4 6 2
California Carpet Stewardship Program Q2 2022 Program Update

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Convenient Collection: New Drop-off Sites Since Last
Quarter
County City Facility/Location Operational Region
San Francisco San Francisco Smart Demolition & Excavation Inc. 7/7/22 Northern CA
Kern Delano McFarland-Delano Transfer Station 7/21/22 Southern CA
Kern Bakersfield Keller Bakersfield 7/26/22 Southern CA
San Joaquin Stockton Keller Stockton 7/26/22 Northern CA
Tulare Visalia Keller Visalia 7/26/22 Southern CA
Los Angeles Los Angeles CWS-DTLA 8/1/22 Southern CA
Los Angeles Gardena California Waste Services LLC 8/1/22 Southern CA
Contra Costa Richmond Golden Bear Transfer Station 8/1/22 Northern CA
Solano Benicia Keller Benicia 8/5/22 Northern CA
Sonoma Petaluma Tri-County Design 8/19/22 Northern CA
California Carpet Stewardship Program Q2 2022 Program Update

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n Micro Grant20+ in-person (and some virtual) trainings for 150+ DC16
apprentices and 4 trainers
n A training video was created at DC16
n A Training PowerPoint was created integrating CARE’s curriculum with images
and language from the Union Training Center
n An on-line quiz was created that has an automated dashboard to assess
comprehension (so far, 60 apprentices have taken the test with the average
score of 93%)
Training Update
California Carpet Stewardship Program Q2 2022 Program Update

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n Established DC16 as a CARE Drop-off Site. Lodging two 28’ trailers on-site for
broadloom and carpet tile collection and pick-up service
n DC16 received a grant for a carpet tile scale and pallet wrapper valued at
$15,000
n CARE hosted an educational outreach table at Apprentice Week in 2019 and
can again in 2022
n Educational and promotional materials were created for your Signatory
Contractors identifying our partnership
Training Update (cont.)
California Carpet Stewardship Program Q2 2022 Program Update

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n Micro Grants
§ Cycle 5 of micro grants opened in January and applications can be submitted
through year end ($15,000)
§ One new award is in progress
§ One project is slated for approval in 2022
§ CARE has initiated one Pilot Collection Awards for small-volume projects
n Capital Grants
§ Cycle 4: Two projects are underway through Q3 2022
§ Cycle 5: Two projects are on-going through Q3 2023. One project closed
§ CARE is in contact with interested companies for our next funding cycle
California Carpet Stewardship Program Q2 2022 Program Update
Grants

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n Testing Grants
§ Cycle 4: One test closed to grantees inability to secure a location to conduct
research
§ Cycle 5: Evergreen cycle was launched in May to solicit proposals for funding up to
$50k for new applications or products using PC4 (preferred)
California Carpet Stewardship Program Q2 2022 Program Update
Grants (cont.)

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n FUSE Commercial Carpet Alliance: Webinar conducted with industry
professionals to discuss use of postconsumer products
n Questionnaire form developed to address RFP/RFQ’s for commercial
retailer and installers in California
n Green Hive Absorb Well Product now available at Loew’s
n Created informational mailer about carpet recycling for the CA
Association of Public Procurement Officers to inform about products
made from recycled carpet
California Carpet Stewardship Program Q2 2022 Program Update
Market Development

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n Two monthly e-news sent (June, July/August publications)
n Added new blog posts:
§ CARE Welcomes Thomas Coates: Interview
§ Thomas Coates Named California Carpet Stewardship Program Director
§ Thomas Coates Named California Carpet Stewardship Program Director
§ Record California Carpet Recycling Rate Reached in Q1 2022
§ Recycling Article Reaches Readers of 43 Media outlets
n Earned media: Assisted with GovPro magazine article; drafted e-blast to
be distributed by Starnet; and submitted ad to Floor Focus Publication
n Ongoing: Five-Year Plan, Quarterly Webinars, and Outreach, Collateral,
Website and Twitter
California Carpet Stewardship Program Q2 2022 Program Update
Marketing, Education, and Outreach

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California Carpet Stewardship Program Q2 2022 Program Update
End of Quarterly Review