The document provides an overview and recommendations from CARE's Q2 2020 report. It summarizes that despite impacts from Covid-19, the recycling rate held steady at 19.8% due to a drop in new carpet sales offsetting reduced recycling output. CARE implemented actions like increased subsidies to support the recycling industry during the pandemic. The report analyzes recycling and funding trends, notes a expected recovery in Q3, and recommends approval of subsidy payouts and expenses for Q2.

1. CARE Sustainable Funding
Oversight Committee
Q2 2020 California Summary &
Recommendations for Approval
Updated 08/14/2020

2. 2
Agenda
 Quarterly Overview of Results
 Manufacturers Report
 Quarterly Subsidy and Expense Payouts
 Drop-off Program Update
 Approval Request

3. 3
CARE’s Executive Director’s Message
Good news, despite the major impact of Covid-19 in Q2, our overall recycling rate held at 19.8%. This is
essentially flat vs Q1 at 19.9%. Calculation of the recycling rate is driven by both recycled output and sales of
new carpet. Sales of new carpet were down to 14.4M square yards – an historic low. This follows on an already
weaker than expected Q1. Both recycled output and sales were down approximately 16%. While the recycled
output is a significant drop, it is actually better than expected given the economic shutdown in key markets.
Due to the unanticipated impact of Covid-19, CARE conducted an informal analysis of market conditions and
spoke with members of the recycling community. As a result, CARE quickly implemented a Covid Action Plan.
Collection subsidies were increased by 2 cents/lb and a one-month average subsidy check was issued to all
qualified subsidy participants. While executed in Q3, an additional cash payment was issued in July followed by
a significant adjustment upward for 4 subsidies. These actions were taken to avoid a cashflow crisis and ensure
no loss of processing capacity in the state. Feedback tells us these aggressive and timely actions were both well
received by the recycling community and have made an important difference in keeping operations stable.
According to CARE’s forecast, Q3 looks like the beginning of a slow recovery is underway. In addition, one major
capacity project is expected to come on-line and everyone is still hopeful power will finally be turned on at the
Aquafil Woodland site after more than a 16 month delay.
CARE submitted its mandatory Contingency Plan to CalRecycle on April 30th. The Contingency Plan was
approved by CalRecycle on June 16th.
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
Bob Peoples, Ph.D., Executive Director, August 27, 2020

4. 4
AB 2398 Summary Results

5. 5
AB 2398 Performance Trends (millions of pounds)
*Average: 2011 is average of Q3 & Q4; 2012-2018 is 4 quarter average

6. 6
AB 2398 Performance Trends (percentage)
*Average: 2011 is average of Q3 & Q4; 2012-2017 is 4 quarter average

7. 7
Gross Collected PCC Sent Back to Landfill**
*Average: 2011 is average of Q3 & Q4; 2012-2017 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.
Q2-2020 Gross Collected: 14.8M pounds – 2.2M sent to landfill
Cumulative to landfill: 178.2M lbs.

8. 8
Disposal
% Change in Disposal: -15.4%

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: 827.4M
Cumulative Remittances: $125.9M

12. 12
Sales by Quarter

13. 13
AB 2398
Quarterly Subsidy and Expense
Payouts

14. 14
Summary of Payouts Q2 2020
1
2
3
4
* All CSE pounds are now consolidated directly in CSE section.
Previously Processors who also collected were reported separately.

15. 15
Summary of Expenses
All data from Melanie confirmed 08/14/2020

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: 2014-2018 is 4 quarter average
Tier 2 N6
Subsidy
Q4 2017
Tier 2
N6,6
Subsidy
Q1 2019
Covid
CSE +2c

17. 17
Fund Balance Trends
All data from Melanie 08/14/20
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

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

19. 19
Drop-Off Site Program Update
Q2 2020

20. 20
Drop-Off Site Total Program Costs

21. 21
Annual Cost Comparison
 Hauling: 46% of Q2 2020 Total Program Cost
 Storage: 25% of Q2 2020 Total Program Cost
 Recycling Fees*: 30% of Q2 2020 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)
 2020 lbs collected YTD: 48% of total 2019 lbs collected
 Q2 2020 lbs collected: -1% increase over Q2 2019 lbs collected;
45% increase over Q2 2018 lbs collected

23. 23
Drop-Off Site Program Summary
 78 operational CARE Drop-Off Sites in 52 CA counties by end of Q2
 176 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 2020
Hauling Cost (K $) $54 $309 $371 $346 $475 $450 $224
Storage Cost (K $) $24 $52 $89 $132 $172 $209 $112
Recycling Fees (K $) $3 $45 $153 $200 $284 $344 $147
TOTAL Cost (K $) $81 $406 $613 $678 $930 $1003 $482
Avg. Cost/lb Collection $0.14 $0.17 $0.15 $0.10 $0.12 $0.10 $0.10
Avg. Cost/lb Collection - Rural - - - - $0.17 $0.21 $0.21
Avg. Cost/lb Collection - Urban - - - - $0.10 $0.08 $0.09
Average Cost/Capita* $0.08 $0.05 $0.01 $0.006 $0.005 $0.004 $0.003
Pounds Collected (K lbs) 560 2,378 4,141 6,852 7,945 10,167 4,866
Private Drop-Off Site N/A 201 200 216 117 160 176
Public Drop-Off Site 14 23 32 44 53 73 78
Annual Data Summary

24. 24
Recommendations to SFOC

25. 25
Recommendations for SFOC Approval

26. End of Review