Paint Stewardship Infrastructure Report

PAINT PRODUCT STEWARDSHIP INITIATIVE INFRASTRUCTURE PROJECT

Prepared Under Contract To:

Department of Ecology Solid Waste and Financial Assistance Program Olympia, Washington 98504-7775

As Part of the Paint Product Stewardship Initiative Facilitated by the Product Stewardship Institute

Prepared by:

11260 Roger Bacon Drive Suite 300 Reston, Virginia 20190 703.471.6150

Cascadia Consulting Group, Inc 1109 First Ave. Suite 400 Seattle, Washington 98101

March 15, 2007 File No. 02205014.00 Paint Product Stewardship Initiative

TABLE OF CONTENTS

Section Page

ACKNOWLEDGEMENTS EXECUTIVE SUMMARY 1 INTRODUCTION...... 1-1 History of the Paint Product Stewardship Initiative ...... 1-1 Goals of the Infrastructure Project ...... 1-1 Focus of this Report ...... 1-1 Infrastructure Workgroup and Stakeholder process ...... 1-2 Model Chosen by Workgroup ...... 1-2 2 LEFTOVER PAINT QUANTITIES ...... 2-1 Method and Assumptions ...... 2-1 Paint Sales ...... 2-1 Leftover Paint Generation ...... 2-2 Leftover Paint Collection ...... 2-2 Leftover Paint Estimates ...... 2-3 3 COLLECTION ...... 3-1 Method and Assumptions ...... 3-2 Approaches to Estimate Collection Points Needed ...... 3-2 Geographic Types ...... 3-3 Minimum Service-Level Approach ...... 3-3 Collection Point Capacity Approach ...... 3-5 Results Comparison and Discussion ...... 3-8 4 AGGREGATION AND TRANSPORTATION ...... 4-1 Aggregation...... 4-1 Transportation ...... 4-2 Transportation to Aggregation Points ...... 4-2 Transportation to Processing Facilities ...... 4-3 5 PROCESSING CAPACITY NEEDED ...... 5-1 Processor Survey ...... 5-1 Survey Key Findings...... 5-2 Capacity Analysis and New Facilities Needed ...... 5-3 Latex and Oil-Based Collection Proportions ...... 5-4 Processor Analysis Overview and Conclusions ...... 5-5

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TABLE OF CONTENTS (CONTINUED) Page

6 PROCESSING FACILITY DESIGN RECOMMENDATIONS ...... 6-1 Conceptual Facility Design ...... 6-1 Paint Sorting and Processing ...... 6-1 Consolidating ...... 6-3 Re-Processing Option ...... 6-4 Processing ...... 6-4 Paint Filtering and Packaging ...... 6-4 Can Crushing ...... 6-5 7 PRELIMINARY COST INFORMATION ...... 7-1 Collection ...... 7-1 Collection from Metropolitan Areas and Isolated Cities ...... 7-1 Dedicated Facilities ...... 7-1 Co-located Drop-off Points ...... 7-3 Curbside Collection ...... 7-4 Summary of Collection Cost Estimates from Metropolitan Areas and Isolated Cities...... 7-6 Collection from Very Rural Areas ...... 7-7 Aggregation and Transportation ...... 7-7 Transportation to Aggregation Points ...... 7-7 Operation of Aggregation Facility ...... 7-8 Transportation to Processing Center ...... 7-10 Summary of Aggregation and Transportation Cost Estimates ...... 7-11 Assessment of System-Wide Collection, Aggregation and Transportation Costs ...... 7-11 Processing Facility ...... 7-14 Design Costs ...... 7-14 Program Staffing ...... 7-14 8 CONCLUSIONS ...... 8-1 Significant Model Assumptions and Findings ...... 8-1 Leftover Paint Quantities ...... 8-1 Collection Points ...... 8-1 Aggregation and Transportation ...... 8-1 Processing Facilities...... 8-2 Processing Facility Design Recommendations ...... 8-2 Preliminary Costs ...... 8-2 Collection ...... 8-2 Aggregation...... 8-3

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TABLE OF CONTENTS (CONTINUED) Page

Transportation to Processor ...... 8-3 Processing Facility ...... 8-3 Total System Costs ...... 8-3 Schedule ...... 8-3 Costs Related to Paint Sales ...... 8-4 Changing Conditions to Support the Nationally-Coordinated System ...... 8-5 Reuse Programs ...... 8-5 Sensitivity Analysis ...... 8-5 Collection Methods ...... 8-7 Administrative Costs ...... 8-7 Processing Costs ...... 8-7 Overall Sensitivity ...... 8-8 Reducing Costs ...... 8-8 Increasing Revenues ...... 8-9 Marketing Challenges and Opportunities ...... 8-9 A Future Possibility ...... 8-10

EXHIBITS

1 Potential Leftover Paint Collection ...... 2-2 2 Annual Paint Collection Rates for Any Given Service Area ...... 2-3 3 Actual Paint Collection Rates from Select Programs ...... 2-4 4 Data Source for Geographic Type Designations ...... 3-3 5 Paint Collection Program Service Levels - Model Programs ...... 3-4 6 Estimate of Collection Points Needed in U.S. to Match Model Program Service Levels ... 3-4 7 Assumptions on Paint Throughput ...... 3-5 8 Estimated Collection Points Needed Based on Throughput Capacity Assumptions ...... 3-7 9 Population Density ...... 3-10 10 Existing HHW Programs ...... 3-11 11 Paint Processing Capacity - Existing and Potential Needs ...... 5-4 12 Estimated New Processing Facilities Needed, By Region ...... 5-6 13 Existing Paint Processing Facilities and Associated 500 Mile Buffer ...... 5-7 14 Diagram of Paint Processing Flow Chart ...... 6-2 15 Overview of Paint Sorting Line ...... 6-6 16 Side View of Paint Sorting Line ...... 6-7 17 Paint Processing Facility Layout ...... 6-8 18 Estimates of Per-Unit Costs of Paint Collection at Dedicated Facilities ...... 7-3 19 Estimates of Per-Unit Costs of Paint Collection at Co-Located Drop-Off Facilities ...... 7-4 20 Estimate of Per-Unit Costs of Paint Collection at Curbside Programs ...... 7-6

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TABLE OF CONTENTS (CONTINUED) Page

EXHIBITS (Continued)

21 Comparisons of Best Per-Unit Costs of Leftover Paint Collection Using Three Primary Methods from Metropolitan Areas and Isolated Cities ...... 7-6 22 Estimates of Per-Gallon Annual Aggregation Costs ...... 7-10 23 Collection, Aggregation and Transportation Cost Elements ...... 7-11 24 Estimates of Per-Gallon Annual Collection, Aggregation, and Transportation Costs from Metropolitan Areas and Isolated Cities ...... 7-12 25 Estimates of Total Annual Collection, Aggregation, and Transportation Costs ...... 7-13 26 Estimated Construction Costs for Paint Processing Facility ...... 7-15 27 Estimated Costs for Facility Staffing and Operation ...... 7-16 28 Paint Collection Quantities Over Time ...... 8-4 29 Total Annual System Costs Per Gallon ...... 8-4 30 System Costs Compared to Virgin Paint Sales ...... 8-6 31 Alternative System Costs ...... 8-8

APPENDICES

A Curbside and Door-to-Door Collection B Further Detail on Processor Survey and Facilities Needed C Further Detail on Sensitivity Analysis

REFERENCES

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ACKNOWLEDGMENTS

This report was prepared by SCS Engineers and Cascadia Consulting Group with assistance from Curt Bailey of CB Coating Consulting & Inspection Incorporated. The analysis and recommendations presented herein were made through a collaborative process with a number of stakeholders in the industry. The following provided information and support necessary for the completion of this report:

David Nightingale, Washington State Department of Ecology Scott Cassel, Product Stewardship Institute Heidi Sanborn, R3 Consulting Group (contractor to the Product Stewardship Institute) David Darling, National Paint and Coatings Association Alison Keane, National Paint and Coatings Association Susan Petersen, ICI Paints North America Jim Quinn, Hazardous Materials Program, METRO, Oregon Jen Holliday, Chittenden County, Vermont Glenn Gallagher, California Integrated Waste Management Board Leslie Kline, Fresno County, California Mike O’Donnell, Phillips Environmental Barry Elman, U.S. EPA Georges Portelance, Eco-Peinture, Quebec Mark Kurschner, Product Care Association Pamela McAuley, Hotz Environmental

Contacts for questions on this report are:

David Nightingale, Project Manager Washington State Department of Ecology (360) 407-6392

Scott Cassel, Executive Director Product Stewardship Institute, Inc. (617) 236-4855

David Darling National Paint and Coatings Association (202) 462-6272

Stacey Demers, Project Manager SCS Engineers (703) 471-6150

For downloading this report go to: www.productstewardship.us/PaintReports

Acknowledgements Paint Product Stewardship Initiative

EXECUTIVE SUMMARY

INTRODUCTION

The Product Stewardship Institute, Inc. (PSI) facilitated a national dialogue among over 50 companies, industry associations, and government agencies on how to manage leftover paint in a way that is both cost effective and protective of the environment. This report develops one particular model of a national infrastructure to collect and manage leftover paint, including the recycling of latex paint to the maximum extent possible, and analyzes the cost of such a system.

While the PPSI workgroup did not reach a consensus position that this model is necessarily the best option available, the workgroup did want to assess what such a model might look like and the extent to which it might be self-financing in light of the potential revenues that could be derived from the production and sale of recycled paint. The analysis would have been different had other scenarios about recycling and final disposition been chosen. There was no attempt to quantify these differences.

LEFTOVER PAINT QUANTITIES

Paint Sales

In 2000, approximately 637 million gallons of architectural paint were sold in the United States. According to the 2000 Census, the United States included 281 million people and 105 million households in 2000. These figures imply that paint sales in the United States average:

 2.3 gallons of paint sold per person per year, or

 6.0 gallons of paint sold per household per year

Leftover Paint Generation

Two studies were used to estimate leftover paint generation. In its Background Report, the Product Stewardship Institute estimated that leftover paint generation is 16 million to 35 million gallons annually, which implies that 2.5 to 5.5 percent of paint sold remains as leftover paint. A preliminary EPA study estimated that between six and 16 percent of paint sold remains as leftover paint. Accordingly, this study considered scenarios of 5 percent, 10 percent, and 15 percent of paint sales resulting in leftover paint, consistent with both the PSI and EPA studies.

Leftover Paint Collection

A nationally-coordinated lefteover paint collection system was modeled using various collection rates based on performance goals of Eco-Peinture in Quebec, specifically that 25, 50, and 75 percent of leftover paint would be collected.

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Exhibit ES-1 presents the range of possible leftover paint as a percentage of sales based on the range of leftover paint generation and the range of leftover paint collection.

EXHIBIT ES-1: POTENTIAL LEFTOVER PAINT COLLECTION (As a percentage of paint sales)

COLLECTION RATE GENERATION RATE (Percent of Sales) 25% 50% 75% 5% 1.25% 2.50% 3.75% 10% 2.50% 5.00% 7.50% 15% 3.75% 7.50% 11.25%

The above exhibit indicates that between 1.25 percent and 11.25 percent of paint sales could be collected as leftover paint. The following scenarios may indicate successive growth over time within a program or simply varied program success depending on convenience and promotion:

 Low: 2.5 percent of paint sales will be collected as leftover paint

 Medium: 5.0 percent of paint sales will be collected as leftover paint

 High: 7.5 percent of paint sales will be collected as leftover paint

 Extra High: 10.0 percent of paint sales will be collected as leftover paint

The range of 2.5 percent to 10.0 percent of paint sales collected as leftover paint is consistent with collection rates from active programs in the U.S. and Canada. A well executed, mature program with an extensive network of collection sites may in time be able to obtain collection rates above those already experienced, corresponding to the “high” and “extra high” scenarios.

COLLECTION

Building upon past research from PSI that identified permanent collection points to be the most cost-effective method to collect leftover paint, two methods are used to estimate the number of collection points that would be needed under a nationally-coordinated system. These methods include the Minimal Service Level Approach and the Collection Point Capacity Approach.

Minimal Service Level Approach

This approach estimates the number of collection points based on the “service level” of existing paint collection programs. The service level is defined as the number of collection points that exist relative to the size of the population.

Executive Summary-2 Paint Product Stewardship Initiative in these model programs. Therefore, this total is considered to be a low-end estimate of the total number of collection points needed to provide a minimal level of service

Collection Point Capacity Approach

This approach is based on the number of collection sites that would be needed to manage the expected quantity of paint generated, using assumptions about the amount of paint that could be collected per site and the population density in different geographic areas. It is also assumed that each metropolitan or micropolitan statistical area will need at least one collection point.

The method of analysis based on collection point capacity assumptions estimates that the number of collection points needed could range from as low as 1,900 (if collection points can handle more cages and paint quantities are low) to as high as almost 11,000 (if collection points each handle fewer cages and paint quantities are extra high).

AGGREGATION AND TRANSPORTATION

Aggregation

Each collection point could, in theory, ship paint directly to the processor. However, the economics of trucking improve with increased size of the trailer, called a “van” by the trucking industry. A 53-foot van is generally the longest allowed trailer, is generally limited to 42,000 pounds of freight, and could therefore hold several thousand gallons of paint. However, most collection points will not be able to store this many cans at any one time. Therefore, a system of combining paint can boxes or cages from individual collection points at an aggregation facility will be needed.

The core activity that would take place at an aggregation facility is unloading pallets, cages, or gaylord boxes of paint cans from a smaller truck and re-loading them onto a larger truck for long-distance truck transport. The total number and mix of aggregation facilities will be determined by local economics and logistics. However, for the purposes of providing planning- level estimates of the number of aggregation points needed, it is assumed that each metropolitan area in the U.S. will need at least one stand-alone aggregation point, whereas smaller communities (“isolated cities”) can operate without a stand-alone aggregation facility. Therefore, over 350 stand-alone aggregation points throughout the country are needed, one for each Metropolitan Statistical Area (MSA).

Transportation

Transportation from collection points to aggregation points was modeled using “milk-run” logistics. Under this model, a truck makes one or several stops to pick up leftover paint along a fixed route. This “milk run” type system includes subsequent transport to an aggregation point. One commonly used delivery truck is a 24-foot box van, which can accommodate 12 pallets and 26,000 pounds. Costs for this type of system vary, but are generally priced either by the stop or by the hour, and are estimated to be a significant fraction of the total cost of a collection and transportation system for leftover paint.

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Shipping from the aggregation points will be least costly in 53-foot box vans. Long-haul trucking costs are developed in Section 7, with variations depending on distance and area of the country.

PROCESSING CAPACITY NEEDED

Increasing the quantities of leftover paint collected through a nationally-coordinated infrastructure may also require additional processing capacity, above what already exists, where paint is sorted, screened, and recycled into new paint. To estimate existing processing capacity and understand how and where additional processing capacity may be needed, this study conducted a survey of existing paint recycling facilities. With the exception of one processor, demand for the final product (recycled paint either at retail, commercial or export markets) is the barrier to processing additional leftover paint (e.g., the supply).

Capacity Analysis and New Facilities Needed

Exhibit ES-2 displays basic results from an analysis of the capacity for recycled paint processing in the United States. It was assumed that paint swaps located at collection facilities could reduce the quantity of paint flowing to processors by 20 percent as compared to the quantities estimated to be collected. Therefore, the paint to be processed presented in Exhibit ES-2 assumes a 20 percent reduction in the quantity of leftover paint generated for paint reuse.1 It also assumes a medium-level scenario of 0.11 liquid gallons collected per person.

EXHIBIT ES-2: PAINT PROCESSING CAPACITY EXISTING AND POTENTIAL NEEDS

Paint to be Processed Existing Capacity Additional REGION (0.11 gallons per person, medium (annual gallons) Capacity Needed scenario, less 20% reuse) Northwest 1,600,000 1,100,000 0 West 9,500,000 4,500,000 0 Midwest 9,000,000 5,600,000 0 South 0 3,300,000 3,300,000 Southeast 0 5,100,000 5,100,000 East 0 3,800,000 3,800,000 Northeast 3,000,000 2,300,000 0 TOTAL 23,100,000 25,700,000 12,200,000

The capacity analysis indicates major capacity gaps exist in the South, the Southeast and the East. Using a minimum facility design capacity of one million gallons per year and a maximum facility capacity of six million gallons per year (the highest capacity of facilities interviewed), the number of processing facilities that may be needed under the four collection scenarios is presented in Exhibit ES-3.

1 There is some concern about reuse programs skimming the best feedstock from a paint reuse program.

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EXHIBIT ES-3: ESTIMATED NEW PROCESSING FACILITIES NEEDED

Level of Collection Assumed REGION Low Medium High Extra High (0.06 gals per (0.11 gals per (0.17 gals per (0.23 gals per person) person) person) person) Northwest 0 0 0-1 0-1 West 0 0 0 0 Midwest 0 0 0 1-3 South 1-2 1-4 1-6 2-7 Southeast 1-3 1-6 2-8 2-11 East 1-3 1-4 1-6 2-8 Northeast 0 0 0-1 1-2 TOTAL 3 - 8 3 - 14 4 - 22 8 - 32 Paint quantities presented in this exhibit include both latex and oil-based paint.

PROCESSING FACILITY DESIGN RECOMMENDATIONS

The conceptual layout of the facility design is shown in Exhibit 14. The design is based on a facility which processes approximately 50,000 gallons of usable latex paint per month, or 0.6 million gallons of paint annually. This does not include the quantity of unusable paint or the proportion of oil-based paint that will be bulked for use as a fuel. The facility operations could be expanded to accommodate an increased capacity by adding a second shift or additional tanks and canning equipment, or both. Facility operations are based on a five-day work week, with an 8-hour shift.

The containerized paint arrives at the facility in gaylord boxes and is offloaded at a receiving loading dock area. The gaylord boxes are then taken by forklift to an incoming paint storage area where they will eventually be pulled for processing.

Gaylord boxes are transported by forklift from the incoming paint storage area to the processing line. The first sort would eliminate solvent and oil based paints and containers with unreadable labels. Flammable product would be transported in bins to the flammable product containment room for consolidation. Latex paint cans are individually loaded onto the corresponding conveyer belt that transports the paint up to the mechanical opener and then sorted by color.

The acceptable containers are sorted by color and drained by gravity into 300-gallon plastic totes that are moved by forklift to the processing area when filled. The processing area would have three 1,000-gallon and one 500-gallon tanks with dedicated high-speed dispersers equipped with circulation type blades, two-inch air pumps to in-line cartridge filters, and canning line. Packaging of the paint will take place after onsite quality control testing has been conducted.

Wastewater collected from the hose, filtration, and pumping equipment is captured and treated off-site. Empty metal containers are crushed, and sent for recycling. Unusable latex paint is shipped to a disposal site and flammable liquids are shipped to an energy recover site.

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PRELIMINARY COST INFORMATION

Costs for collection, aggregation, and transportation are expressed in terms of dollars per gallon. Since the size and scale of the collection infrastructure will vary widely according to local conditions, expressing costs on a per-gallon basis allows for straight-forward scaling of costs for various sized facilities and geographies.

Collection Costs

Three primary possibilities for leftover paint collection from metropolitan areas and isolated cities include dedicated facilities, co-located drop-off points, and curbside collection. Leftover paint collection from rural areas will consist of mobile collection events.

Dedicated facility costs are estimated from available cost information available from 20 HHW facilities across the U.S. Co-located drop-off collection site costs are based on paint drop-off points operated by Product Care in British Columbia that are co-located with bottle recycling centers. Curbside collection costs for paint are based on curbside collection programs for used motor oil. Ultimately, the relative mix of leftover paint collection options will depend heavily on local conditions and a balance of cost and convenience. Exhibit ES-4 presents a weighted average of collection costs based on a hypothetical system with half of all leftover paint collected at dedicated facilities, 45 percent collected at co-located drop-off points, and five percent collected curbside.

EXHIBIT ES-4: COMPARISONS OF BEST PER-UNIT COSTS OF LEFTOVER PAINT COLLECTION USING THREE PRIMARY METHODS FROM METROPOLITAN AREAS AND ISOLATED CITIES

Dedicated Facility Co-located Drop-Off Curbside METRIC Hypothetical Overall (50% of volume) (45% of volume) (5% of volume) Per Pound $0.22 $0.12 $0.19 $0.18 Per Liquid Gallon $2.48 $1.40 $2.10 $1.98 Per Gallon Can $0.99 $0.56 $0.84 $0.79

Collection costs from very rural areas are based on mobile collection events. Using a “milk-run” type of system, a truck will be routed to predetermined areas for which paint collection has been promoted. The collected paint cans will be loaded into gaylord boxes and transported to the nearest collection site within 250 miles. The cost for this system is $1.43 per gallon.

Aggregation Costs

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EXHIBIT ES-5: ESTIMATES OF PER-GALLON ANNUAL AGGREGATION COSTS

AGGREGATION FACTOR PER-GALLON COST

“Milk Run” Transportation $0.94/gallon Operation of Aggregation Facility $0.66/gallon Labor at Aggregation Facility2 $0.07/gallon Materials at Aggregation Facility $0.31/gallon Total Aggregation Costs $1.98/gallon

Transportation Costs

Transportation to a processing center will be least costly if performed using 53-foot box vans. Transportation costs per gallon varied considerably based on distance to the nearest recycler, but the overall weighted average across all metropolitan areas was $0.32 per gallon.

Processing Facility Costs

A processing facility designed to process 600,000 gallons of latex paint (accepting one million gallons of paint including oil-based paint and unusable latex) was priced at $4.2 million. Annual operational costs are expected to be approximately $3.0 million. The facility could be upgraded to process up to 1.2 million gallons of latex paint (accepting two million gallons of paint including oil-based paint and unusable latex) by running a second shift. Annual operational costs will increase with an additional shift.

Administration Cost

Administration cost is based on cost estimates of a third-party organization in Washington and Oregon to coordinate electronics recycling (Walter Alcorn, Alcorn Consulting, 2006) at $1.35 per liquid gallon.

Summary of Costs

Exhibit ES-6 provides the best estimates of the per-gallon costs needed to operate a nationally coordinated infrastructure for collecting leftover paint. These are planning-level, order-of- magnitude costs that represent the best estimates given available information. In particular, the variability in each of these costs is potentially significant.

2 Assumes inspection of individual cans will not be needed

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EXHIBIT ES-6: TOTAL ANNUAL SYSTEM COSTS PER GALLON

SYSTEM FACTOR PER-GALLON COSTS

Collection $1.98 Aggregation $1.98 Transportation to Recycler $0.32 Processing $2.96 Administration $1.35

Total $8.59

*Includes all collected latex and oil-based paint

CONCLUSIONS

Using system costs presented in Exhibit ES-6, various scenarios of recycled paint sales were modeled ranging from $0 to $20 per gallon. In scenarios where the paint sales were modeled, as opposed to giving the latex paint away for free, the sales income was reduced by 25 percent to account for promotion, distribution and sales for that latex paint. The remaining 75 percent of sales revenue provided an offset of system costs. At between $15 and $20 per gallon, a nationally coordinated leftover paint management system would begin generating net revenue. Modeling assumptions were made with conservative cost estimates and a sensitivity analysis indicates that there is greater likelihood of reduced system costs than increased system costs upon actual implementation. If actual system costs are less, a break even point would be realized with a lower sale price.

Exhibit ES-7 provides a summary of the additional cost to virgin paint sales to cover the cost of the paint management system under the four paint collection rate scenarios. Variations in system development, some estimated in this report, can affect the net costs presented in Exhibits ES-6 and ES-7 up to 10 percent. The low collection rates column would reflect a system that exists in a few parts of the U.S. and Canada but would need to be developed in much of the U.S. The intent of the various paint sale scenarios is to determine the price that recycled paint would need to be sold at for the entire cost of the paint management infrastructure to be covered. While the current sale price of recycled paint has been less than $10, the higher pricing scenarios are included only to be instructive as to the price point that needs to be reached for the sale of recycled paint to raise sufficient revenue to finance the entire leftover paint management infrastructure.

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EXHIBIT ES-7: NET COST OF PAINT MANAGEMENT SYSTEM PER VIRGIN PAINT GALLONS SOLD

COLLECTION RATE METRIC LOW MEDIUM HIGH EXTRA HIGH Assuming $0/gallon sale price $0.24 $0.43 $0.67 $0.90 Assuming $5/gallon sale price $0.18 $0.32 $0.49 $0.67 Assuming $10/gallon sale price $0.11 $0.20 $0.31 $0.43 Assuming $15/gallon sale price $0.05 $0.09 $0.14 $0.19 Assuming $20/gallon sale price -$0.01 -$0.02 -$0.04 -$0.04

Executive Summary-9 Paint Product Stewardship Initiative

SECTION 1

INTRODUCTION

HISTORY OF THE PAINT PRODUCT STEWARDSHIP INITIATIVE

In 2003, the Product Stewardship Institute, Inc. (PSI) began facilitating a national dialogue aimed at reducing the generation of leftover paint, while increasing reuse and recycling opportunities. With the support of dialogue participants from over 50 companies, industry associations, and government agencies, these discussions have resulted in a Memorandum of Understanding (MOU). The MOU is an agreement among partners with varying views on how to manage leftover paint in a way that is both cost effective and protective of the environment. The MOU outlines work on eleven projects scheduled for completion by October 2006 that will become the basis for developing a nationally-coordinated paint management system.

This Infrastructure Report has been conducted based on the assumption that a nationally coordinated program will be developed for the collection of leftover latex and oil-based paint. Concurrent with this effort is another project being conducted under the auspices of the Paint Product Stewardship Initiative – the Lifecycle Project. That project may influence decisions as to the extent of the infrastructure that will be developed for managing leftover latex paint.

GOALS OF THE INFRASTRUCTURE PROJECT

The two primary goals of the Infrastructure Project are to:

 Use existing information and new research to develop a model of a cost-effective, national infrastructure to collect and manage leftover paint, including the recycling of latex paint to the maximum extent possible. The purpose of this model is to provide insight on the development and operation of regionally specific infrastructure to manage leftover paint in the United States.

 Analyze the costs of constructing and operating such an infrastructure.

This report presents results of the Infrastructure Project effort.

FOCUS OF THIS REPORT

This report presents recommendations concerning the development of a nationally-coordinated leftover paint management system. Major topics addressed in this report include:

 Leftover Paint Quantities - Describes the assumptions and method for estimating how much paint is likely to be generated and collected. The analysis and recommendations concerning a nationally-coordinated infrastructure build directly from these quantities.

 Collection Points Needed - Describes the assumptions, method, and preliminary recommendations for the number of collection points that are needed nationally and regionally.

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 Aggregation and Transportation – Describes methods for aggregating leftover paint quantities from collection points for transport to a processing facility.

 Processing Facilities Needed - Describes the survey of existing processors and recommends regions where additional processing facilities would be needed.

 Facility Design Recommendations - Describes a paint processing facility with capacity to process up to 1.2 million gallons of paint annually.

 Preliminary Cost Information – Estimates costs associated with the collection, aggregation, transportation, and processing of leftover paint.

 Conclusions and Next Steps – Summarizes recommendations for a nationally- coordinated leftover paint management system.

Several appendices are also attached which provide further detail, as needed. These are referenced in the text.

The Paint Product Stewardship Initiative is focused only on architectural paint. Specialty paint, paints used for art, and other paints are not included.

INFRASTRUCTURE WORKGROUP AND STAKEHOLDER PROCESS

Research strategy, assumptions, and results derived for this study were presented to the Infrastructure Workgroup on a periodic basis. The Infrastructure Workgroup consisted of a select group of stakeholders representing the paint industry government agencies, paint recyclers, and retailers. The Product Stewardship Institute facilitated this workgroup, with assistance from the Washington Department of Ecology.

MODEL CHOSEN BY WORKGROUP

The model developed in this report involves generation, collection, aggregation, transportation, and processing of leftover paint. The analyses of generated quantities and collection, aggregation, and transportation methods were straightforward; however, there are various methods to recycle leftover paint. Consolidation was chosen as the recycling method to model given the budget, schedule, and the availability of price information. In a collaborative process, the Workgroup chose the following processing methods because they were technically feasible and enough information was available to model them:

 Energy Recover for oil-based paints;

 Disposal for unusable latex paint; and

 Consolidation for recyclable latex paint.

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SECTION 2

LEFTOVER PAINT QUANTITIES

Collection processing, and management systems for leftover paint require a reasonable understanding of how much leftover paint is likely to be collected. This section describes the assumptions and method used to estimate quantities of paint (both latex and oil-based) that would be collected through a nationally-coordinated system.

METHOD AND ASSUMPTIONS

The basic method to estimate leftover paint quantities was to 1) estimate paint sales and 2) estimate how much of that paint is generated as unwanted leftover paint and then is collected by an effective infrastructure. The goal of this exercise was not to develop a single number, but rather to develop a reasonable range of planning-level estimates that can be used to recommend an optimal infrastructure. These estimates were developed on a per-person and per-household basis so that they could be applied to individual communities for which infrastructure development would be necessary.

The following equation was used as part of the method:

Paint collection (gal./person) = Paint sales (gal./person) x Collection rate (percent)

Following are derivations of the two terms of this equation: paint sales and collection rate.

Paint Sales

According to the Product Stewardship Institute’s Background Report (PSI, 2004), 637 million gallons of architectural paint3 were sold in the United States in 2000, the latest year for which comprehensive figures were available at the time PSI assembled the report. According to the 2000 Census, the United States included 281 million people and 105 million households in 2000 (Census Bureau, 2001). These figures imply that paint sales in the United States average:

 2.3 gallons of paint sold per person per year, or

 6.0 gallons of paint sold per household per year

Although these figures are based on 2000 data, they are believed to be reasonable planning-level estimates for the present if applied to current population data4. It was assumed that these figures

3 Based on NCPA industry data, the composition of architectural paint sold in the U.S. is 54 percent interior paint, 27 percent exterior paint, 11 percent stains, 2 percent clears, 1 percent lacquers, and 5 percent other. It is expected that the infrastructure will manage paints, stains, clears, and lacquers; however, other material such as bituminous roof, mastic, form release, and wood preservatives will likely not be managed. Nonetheless, this material is still included and is not expected to significantly alter the conclusions of this study. 4 Use of more recent paint sales figures would not be expected to have significant results on the conclusions of this study.

2-1 Paint Product Stewardship Initiative could be applied to current population or household data in any given community or region to estimate paint sales.

Leftover Paint Generation

Some (usually small) fraction of paint purchased for any given project remains unused at the end of the project. In its Background Report, the Product Stewardship Institute estimated that leftover paint generation is 16 million to 35 million gallons annually (PSI, 2004). Based on 637 million gallons of paint sales, these figures imply that 2.5 percent to 5.5 percent of paint sold remains as leftover paint. However, a preliminary EPA study has estimated that six percent to 16 percent of paint sold remains as leftover paint (ABT July 2006). Because actual paint collection (not just generation) is higher than five percent in some areas, the Infrastructure Workgroup believed that five percent is likely to be the low end of leftover paint generation. Accordingly, this study considered scenarios of 5 percent, 10 percent, and 15 percent of paint sales resulting in leftover paint, consistent with both the PSI and EPA studies.

Leftover Paint Collection

Leftover paint may experience a variety of dispositions: it may be kept for future use or touch- up, given to friends or neighbors, disposed (properly or improperly), or recycled. As a result, even with high levels of promotion, few paint collection programs are likely to capture more than 75 percent of the leftover paint in a region. For example, Eco-Peinture in Quebec has established incremental performance goals of capturing 25, 50, and 75 percent of a region’s leftover paint - goals that were also considered for this study.

Furthermore, no program is going to reach its full effectiveness during the first few years of operation. Experience from other programs indicates that quantities of leftover paint collected generally increase steadily (anywhere from 10 percent to 100 percent increase per year) for four to six years, at which point growth slows to under 10 percent per year5.

Exhibit 1 presents the range of possible leftover paint as a percentage of sales based on the range of leftover paint generation and the range of leftover paint collection.

EXHIBIT 1: POTENTIAL LEFTOVER PAINT COLLECTION (As a percentage of paint sales)

COLLECTION RATE GENERATION RATE (Percent of Sales) 25% 50% 75% 5% 1.25% 2.50% 3.75% 10% 2.50% 5.00% 7.50% 15% 3.75% 7.50% 11.25%

5 Data was reviewed from Eco Peinture and Product Care as well as Nightingale, David and Rachel Donnette, 2002. “Household Hazardous Waste” in Handbook of Solid Waste Management. McGraw-Hill: New York, pp. 10.1-10.6.

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The above exhibit indicates that between 1.25 percent and 11.25 percent of paint sales could be collected as leftover paint. However, the extreme examples on both the low and high ends are unlikely. As a result, based on the above considerations and discussion within the Infrastructure Workgroup, the following planning-level scenarios are used to represent a reasonable range of paint collection. These scenarios may indicate successive growth within a program or simply varied success depending on convenience and promotion:

 Low: 2.5 percent of paint sales will be collected as leftover paint

 Medium: 5.0 percent of paint sales will be collected as leftover paint

 High: 7.5 percent of paint sales will be collected as leftover paint

 Extra High: 10.0 percent of paint sales will be collected as leftover paint

The range of 2.5 percent to 10.0 percent of paint sales collected as leftover paint is consistent with collection rates from active programs in Canada. For example, Éco-Peinture, the extensive paint-collection program in Québec, Canada, reports that they collect approximately 3.5 percent of paint sold annually in their region, and their quantities continue to increase (Portelance, 2005). Available data from other programs range from 1.6 percent of paint sales being collected in Iowa’s program (where latex paint collection is discouraged in many jurisdictions) to 7.3 percent in Portland Metro’s program, with three other programs in the five to six percent range (Collection System White paper).

LEFTOVER PAINT ESTIMATES

Exhibit 2 illustrates the quantities of paint that would be expected to be collected per household and per person based on the four collection rate scenarios mentioned above. These quantities are calculated using the following equation: Paint collected (gallons/person or household) = Paint sales (2.3 gallons/person or 6.0 gallons/household) x Collection rate (percent)6.

EXHIBIT 2: ANNUAL PAINT COLLECTION RATES FOR ANY GIVEN SERVICE AREA

COLLECTION SCENARIO GALLONS PER HOUSEHOLD GALLONS PER PERSON Low 0.15 0.06 Med 0.30 0.11 High 0.45 0.17 Extra High 0.60 0.23

6 An example of this calculation is the extra high scenario: Paint collection = (2.3 gallons per person sold) x (10.0% of sales are collected) = 0.23 gallons of paint collected per person.

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Note that these figures align closely with actual collection rates from existing successful programs. For example, data presented in the Collection White Paper indicate that existing programs collect quantities of paint as presented in Exhibit 3.7

EXHIBIT 3: ACTUAL PAINT COLLECTION RATES FROM SELECT PROGRAMS

PROGRAM GALLONS PER HOUSEHOLD GALLONS PER PERSON Quebec 0.14 0.06 Portland Metro, OR 0.26 0.09 British Columbia 0.26 0.11 Hennepin County, MN 0.32 0.13 Washington State 0.28 0.12

Based on these figures, the planning-level estimates displayed in Exhibit 2 appear reasonable. A well executed, mature program with an extensive network of collection sites may in time be able to obtain collection rates above those already experienced, corresponding to the “high” and “extra high” scenarios.

7 Data for Portland Oregon were revised based on a May 31, 2005 interview with Jim Quinn of Metro. Data for Washington State provided by David Nightingale of Washington State Department of Ecology.

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SECTION 3

COLLECTION

A major focus of this project has been on recommending what type and how many collection and aggregation points will be needed for managing the quantities of leftover paint.

Previous research documented in the Collection White Paper has identified that permanent collection points are the most cost-effective method of collecting leftover paint in areas where population is dense enough to support the maintenance and operation of such facilities. In very rural areas, mobile or periodic collection events are typically the most cost-effective collection method. Permanent collection points are the most common and widespread method of collecting leftover paint in quantity from the end-user and is discussed first in this section

This project also examined two additional leftover paint collection methods – curbside and door- to-door collection. Using dedicated vehicles to collect leftover paint curbside would not be cost effective given the high costs of operating a truck that would collect only a few gallons of paint from dispersed households. However, collecting paint in the same truck as other curbside recyclables may be a cost effective method for some communities. Collection rates are typically enhanced where the convenience of curbside collection is provided. Building on existing recycling infrastructures has potential advantages of reduced collection and capital costs, as well as increased convenience. Consequently, the potential costs and benefits of this method of collection for leftover paint need to be carefully considered. On the other hand, door-to-door collection costs appear to be prohibitively expensive, at $105 per household, and were not considered further in this analysis. Appendix A contains additional information on curbside collection programs for leftover paint in Marion County, Oregon and Alameda County, California.

Permanent collection points can take one of two basic forms:

 Dedicated facilities - Most leftover paint collection currently takes place at communities that host household hazardous waste (HHW) collection facilities. HHW facilities are an example of a dedicated facility – where the primary goal is to take paint and other materials back from the public. Dedicated facilities also could be devoted exclusively to paint, in which case they could include processing capacity, such as Portland Metro’s facility. Dedicated facilities also could serve as aggregation points to which paint is transported from individual drop-off points (described below) for aggregation and further transport to a processor.

 Co-located drop-off points - Simple drop-off points could be sited at existing businesses or institutions where leftover paint could be placed into a simple box cage directly by the public or by local government or retail staff. Drop-off points could be located at community locations (e.g., solid waste transfer stations, fire stations, or community centers). Processing does not typically occur at these collection points. Each of the various types of drop-off points would have separate cost and convenience parameters that would be negotiated with the sponsoring organization.

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In addition, aggregation points likely will be needed to minimize transportation costs. Aggregation points are locations (such as warehouses) where paint cans are reloaded into larger trucks (such as semi trailers) for more efficient transportation to a processor. Dedicated collection facilities also could serve as aggregation points to which paint is transported from individual drop-off points for further transport to a processor. Aggregation points will be covered in more detail in the next section, Transportation and Aggregation.

METHOD AND ASSUMPTIONS

Creating a model for a nationally-coordinated leftover paint management infrastructure is complicated due to the great variety in U.S. community demographics, development and transportation patterns, and climate. Furthermore, careful consideration of economics, convenience, and other factors is necessary for siting collection facilities. For planning-level purposes some order-of-magnitude estimates of the number of collection points needed were developed. Two methods were employed to examine the possible nature of a nationally- coordinated leftover paint collection system. These approaches are not recommendations about what collection methods would be most effective or feasible; rather, they are a means of independently estimating how many collection points would be required to collect leftover paint using different approaches. Together, these approaches (described below) provide a reasonable range of the number of collection points needed.

Approaches to Estimate Collection Points Needed

 Minimal Service Level Approach – This approach estimates the number of collection points (either at dedicated facilities or co-located points) for a nationally-coordinated system based on the “service level” of existing paint collection programs. The service level is defined as the number of collection points that exist relative to the size of the population. In other words, if existing programs typically have one collection point per n number of people, this approach calculates the number of collection points in a given area based on that same ratio. This method provides a very simple, straightforward approach based on existing program data. One limitation, however, is that existing collection systems are generally considered inadequate to provide the throughput capacity or customer convenience (even in communities where they exist) to collect the volumes of leftover paint expected under a well-promoted and nationally-coordinated infrastructure. This method, therefore, exemplifies a minimal national infrastructure that would result in low levels of leftover paint collected and fewer opportunities for customers to manage their paint.

 Collection Point Capacity Approach – This approach incorporates assumptions about how much paint that each collection point can accept (its “throughput”) to estimate the number of collection points needed.. This method involves a greater number of assumptions, and is therefore more sophisticated than the first approach. It considers operating conditions as they may be expected to vary by population density, as well as different paint collection levels per capita. It is important to note that model assumptions made about collection points could be adjusted based on real world local demand and conditions. This model provides more detailed average performance capacities in different demographic areas.

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Geographic Types

Before estimating the number of collection points by the above methods, it is necessary to define the geographic types by population density. Different geographic areas in the United States have different infrastructure requirements. U.S. Census designates four specific geographic types based on population density that can be used to estimate the number of collection points needed

Pre-existing Census designations8 were used to approximate the four geographic types as displayed in Exhibit 4.

EXHIBIT 4: DATA SOURCE FOR GEOGRAPHIC TYPE DESIGNATIONS

GEOGRAPHIC TYPE DEFINITION OF GEOGRAPHIC TYPE DATA SOURCE

Includes cities with a density of at least 10,000 people per square mile and a minimum size of at least 500,000 people. Census data for cities of New Super-Urban Cities that meet this classification include York, San Francisco, Boston, New York City, San Francisco, Chicago, Philadelphia, and Chicago Boston, and Philadelphia, but not their surrounding suburbs. Includes most other cities, including Los Census data for all 361 Angeles, D.C., Detroit, Dallas, Houston, and Metropolitan Statistical Areas Urban/Metro Atlanta. (MSAs), excluding the above five cities Isolated Cities and Includes population clusters with between Census data for all 573 Towns 10,000 and 50,000 people. Micropolitan Statistical Areas Includes very small towns and remote, Census data for all areas not Very Rural sparsely-populated areas included in the above three classifications.

Minimal Service-Level Approach

One of the simplest and most straight-forward means to estimate the number of collection points that might be needed for leftover paint is to use service-level data from existing model paint collection programs. For example, Exhibit 5 displays data from actual programs that provide reasonable fits with the geographic types designated for this project.9 The programs and listed in

8 The designations used, metropolitan and micropolitan statistical areas, are statistical geographic areas defined by the federal Office of Management and Budget (OMB), following a set of official standards published in the Federal Register. Each metropolitan or micropolitan statistical area consists of a core area containing a substantial population nucleus, together with adjacent communities having a high degree of economic and social integration with that core. 9 Please note that the Vancouver and Portland systems are very different - the Vancouver system is more distributed and the Portland system is more centralized. As a result, service levels per collection point are very different. We proceed with this variation, understanding that in reality not every super-urban community would choose a Vancouver-type system and not every urban/metro community would choose a Portland-type system. Nevertheless, there are so few existing paint collection programs from which to gather data that for planning-level purposes, these assumptions were considered reasonable.

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Exhibit 5 were chosen based on their successful and longstanding track record collecting leftover paint, the availability of data, their relatively high collection quantities, and how well their size and population density exemplified each geographic type (e.g., Super-Urban, Urban/Metro, Isolated Cities). All data presented in this exhibit are from the Product Stewardship Institute’s Collection White Paper.

EXHIBIT 5: PAINT COLLECTION PROGRAM SERVICE LEVELS - MODEL PROGRAMS

GEOGRAPHIC TYPE PEOPLE PER COLLECTION POINT EXAMPLE PROGRAM AND DATA SOURCE

Super-Urban 100,000 Vancouver, B.C. Urban/Metro 350,00010 Portland, OR British Columbia (outside Vancouver Isolated Cities 23,000 metro area) N/A (serviced by mobile or one-day Very Rural N/A events)

Exhibit 6 below estimates the number of collection points needed for all communities in the United States that would fall within each geographic type. These calculations are derived by dividing the total U.S. population for all communities in a given geographic type by the average people per collection point11. Note that collection programs for Very Rural areas are not considered explicitly in this report. Residents of rural areas could take leftover paint to the nearest isolated city or metro area, or could be serviced by mobile events.

EXHIBIT 6: ESTIMATE OF COLLECTION POINTS NEEDED IN U.S. TO MATCH MODEL PROGRAM SERVICE LEVELS

MINIMUM COLLECTION POINTS NEEDED IN U.S. GEOGRAPHIC POPULATION (BASED ON MODEL PROGRAM SERVICE TYPE LEVELS)

Super-Urban 14 million 140 Urban/Metro 228 million 650 Isolated Cities 30 million 1,300 Very Rural 20 million N/A TOTAL 292 million 2,090

10 The urban/metro service level of 350,000 people per collection point may be high since much of Portland’s HHW comes from collection events. Other urban/metro communities service fewer people per collection point. 11 For example, for Super Urban, 14 million people divided by 100,000 people per site = 140 sites

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This analysis indicates that approximately 2,090 collection points would be needed nationwide to approximate the level of service currently offered by existing programs in Portland, Oregon, and British Columbia, and Vancouver, Canada. A nationally promoted and coordinated leftover paint collection infrastructure would be expected to collect more paint than is currently collected even in these model programs. Therefore, this total is considered to be a low-end estimate of the total number of collection points needed to provide a minimal level of service

Collection Point Capacity Approach

The second approach is based on the number of collection sites that would be needed to manage the expected quantity of paint generated, using assumptions about the amount of paint that could be collected per site and the population density in different geographic areas.

The first step in this collection-point capacity approach is to estimate the quantity of paint to be handled at average collection points in each of the geographic types. Based on feedback from the Infrastructure Workgroup, it is assumed that collection and transportation of leftover paint will be accomplished using paint cages or a similar transportable container. The photo to the right displays a paint cage at the Portland, Oregon facility. The more urban an area, the less space possible collection points are likely to have, and hence the fewer number of containers they would be able to keep on site. Accordingly, Exhibit 7 displays the assumptions regarding the number of cages accommodated by collection points in each geographic type. It is further assumed that each collection point in super-urban and urban/metro areas will transport its paint Shrink-Wrapped Platform of 5-gallon to an aggregation point at least weekly. More frequent Pails On Top of Paint Cage collection may be necessary in urban or super-urban areas, or if customer response is higher than expected. Isolated cities and towns, on the other hand, may not need to transport their paint as frequently (it is assumed at least once every other week).

EXHIBIT 7: ASSUMPTIONS ON PAINT THROUGHPUT

Assumed number of Number of one- cages or Average weekly one- Assumed number of gallon cans serviced Geographic Type transportable boxes gallon cans serviced times collected per per collection point per collection point per collection point year per year per week

Super-Urban 1-2 140 - 280 52 7,300 to 14,500 Urban/Metro 2-4 280 - 560 52 14,500 to 29,000 Isolated cities and 2-8 280 - 1,120 26 7,300 to 29,000 towns

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It is also assumed that each metropolitan or micropolitan statistical area will need at least one collection point. Most, of course, will have many more because the quantities of leftover paint will require it. Since a micropolitan statistical area has at least 10,000 people by definition, this requirement assures that each region of the country with a concentration of at least 10,000 people will have a permanent collection point.

Finally, it is assumed (based on data from Portland Metro, Product Care and other programs) that each cage can hold 140 cans of paint and that individual leftover paint cans are, on average, 40 percent full (Quinn, 2005).

Exhibit 8 estimates the number of collection points needed through a series of calculations that starts with the leftover paint generation rates discussed earlier in Exhibit 1. For example, a Low Rate of .06 gallons/person/year multiplied by 14 million people (Super-Urban) would result in 840,000 gallons of leftover paint generated per year in Super-Urban areas in the U.S. Dividing that number by 40 percent, which is the average amount of paint leftover per can, yields 2.1 million one-gallon paint cans generated per year in this Super-Urban area. Dividing that number by the number of one-gallon cans that can be processed per collection point in a Super-Urban area (7,300 to 14,500 cans, from Exhibit 7), provides the estimated number of collection points needed in the Super-Urban area, again assuming a low generate rate – 145 to 288 sites.

It is useful to consider that a nationally coordinated leftover paint management system will proceed in stages, and that more paint will be collected as we increase the number of collection sites (for added convenience) and increase the amount of paint collected per site (throughput). The relationship between these two factors is complex. However, it is clear that some new sites will not be needed if an existing site were well promoted and has capacity to handle larger volumes. On the other hand, increased convenience through a new collection site might offset the need for another existing facility to expand. The Infrastructure Workgroup decided that Very Rural Areas will not be able to support permanent collection points. In addition, siting challenges could limit the number of collection points in Super-Urban areas owing to existing development

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EXHIBIT 8: ESTIMATED COLLECTION POINTS NEEDED BASED ON THROUGHPUT CAPACITY ASSUMPTIONS

PAINT COLLECTION RATE Low Medium High Extra High LEFTOVER PAINT GENERATION RATES (gallons/person/year) from Exhibit 1 Nationwide 0.06 0.11 0.17 0.23 POPULATION Super Urban 14 million Urban/Metro 228 million Isolated City/Town 30 million Very Rural 20 million Total 292 million ANNUAL LEFTOVER PAINT GENERATION (gallons) = Leftover paint Generation Rate x Population Super Urban 840,000 1,540,000 2,380,000 3,220,000 Urban/Metro 13,680,000 25,080,000 38,760,000 52,440,000 Isolated City/Town 1,800,000 3,300,000 5,100,000 6,900,000 Very Rural 1,200,000 2,200,000 3,400,000 4,600,000 Total 17,520,000 32,120,000 49,640,000 67,160,000 NUMBER OF LEFTOVER 1-GALLON PAINT CANS PER YEAR = Leftover Paint Generation / 40 percent full average per can Super Urban 2,100,000 3,850,000 5,950,000 8,050,000 Urban/Metro 34,200,000 62,700,000 96,900,000 131,100,000 Isolated City/Town 4,500,000 8,250,000 12,750,000 17,250,000 Very Rural 3,000,000 5,500,000 8,500,000 11,500,000 Total 43,800,000 80,300,000 124,100,000 167,900,000 NUMBER OF 1-GALLON PAINT CANS SERVICED PER COLLECTION POINT PER YEAR From Exhibit 8 Super Urban 7,300 to 14,500 Urban/Metro 14,500 to 29,000 Isolated City/Town 7,300 to 29,000 Very Rural Serviced by Collection Programs NUMBER OF COLLECTION POINTS NEEDED = Number of Leftover 1-Gallon Paint Cans Per Year / Number of 1-Gallon Paint Cans Serviced per Collection Point Super Urban 145 to 288 266 to 527 410 to 815 555 to 1,103 Urban/Metro 1,179 to 2,359 2,162 to 4,324 3,341 to 6,683 4,521 to 9,041 Isolated City/Town * 600 600 600 to 700 600 to 800 Total 1,924 to 3,247 3,028 to 5,451 4,351 to 8,198 5,676 to 10,944 * It is assumed that each Isolated City/Town will have at least one collection point. As the above exhibit indicates, the method of analysis based on collection point capacity assumptions estimates that the number of collection points needed could range from as low as 1,924 (if collection points can handle more cages and paint quantities are low) to as high as 10,944 (if collection points each handle fewer cages and paint quantities are extra high).

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RESULTS COMPARISON AND DISCUSSION

The two analytical methods used above produced different estimates of the number of facilities needed. Conclusions from these analyses indicate that:

 At least 2,090 collection points would be needed to provide a minimal level of service comparable to existing paint collection programs in specified areas;

 Assumptions about how much paint individual collection points could handle indicate that, depending on the type and size of collection points used and amount of paint generated, between 1,900 and 11,000 collection points could be needed. [Exhibit 8].

Based on these two findings, the following conclusions can be made:

 At least 2,000 collection points will be needed initially. These collection points may be able to handle a “low” level of paint generation and collection equivalent to 0.15 gallons per household in each service area.

 Increasing the number of collection points to 5,000 or more would provide substantially increased convenience and likely enable increased collection quantities, up to 0.45 gallons per household (0.17 gallons per person) in each service area or even higher.

 Maximum convenience and collection quantities would likely be achieved by offering 5,600 to 11,000 collection points. These collection points would serve not more than 30,000 residents per site (10,000 + households) and collect an average of up to 130 gallons (liquid measure) of paint weekly per site.

For comparison, note that currently there are over 1,500 sites in the U.S. that collect leftover paint (Earth911, 2005). However, to provide an adequate base level of service to the entire country would likely require many more sites as are currently offered.

One additional factor for consideration is that the number of fixed collection points needed may be decreased if curbside collection of leftover paint emerges as a viable opportunity. Currently, curbside collection of leftover paint is a very rare practice. However, it has the potential to offer increased consumer convenience at reasonable cost if the service can be added to existing curbside recycling – a practice that would require negotiation with recyclables haulers at the local level. Curbside recycling of basic recyclables is currently provided to an estimated 56 percent of the nation’s households.12 Assuming conservatively that 10 percent of the nation’s haulers could be persuaded to add paint to their recycling programs, then approximately five percent of the nation’s households could be served by curbside paint collection. However, in the long term the percentage could be much higher if haulers were offered an incentive to participate equal to or greater than their costs of operating the service.

12 Source: BioCycle magazine and Northbridge Environmental, Westford, Massachusetts.

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In addition, some level of collection will need to be provided for the 20 million U.S. residents who live in the “very rural” geographic classification. In some cases, these residents may already travel to cities (even distant cities) to purchase basic items and so the fixed collection points discussed above may provide an adequate level of service for many residents. Alternately, collection points could be provided in towns with only a few thousand residents. Such collection points could be serviced infrequently (perhaps monthly) by the same aggregation system using trucks operating in the nearest urban areas with more developed collection point networks. A third option would be to offer periodic or event-type services to these rural residents.

Exhibit 9 presents population density across the U.S. This can also be translated to leftover paint generation since it is a direct relationship. Exhibit 10 displays the existing HHW programs that currently collect paint. Maps 3 through 10 are more detailed presentations by region of the country.

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EXHIBIT 9: POPULATION DENSITY

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EXHIBIT 10: EXISTING HHW PROGRAMS

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SECTION 4

AGGREGATION AND TRANSPORTATION

The collection infrastructure described in the previous section relies on a number of collection points, which accept leftover paint from the public and then store it in cardboard gaylord boxes, paint cages, or other similar containers. The leftover paint must then be transported on a periodic basis to a paint recycler. In most cases, the paint processor will not be located in the same city as the collection point (there are currently fewer than 10 major paint recyclers in North America), so long-haul trucking will be necessary.

Each collection point could, in theory, ship paint directly to the processor. However, the economics of trucking improve with increased size of the trailer, called a “van” by the trucking industry. A 53-foot van is generally the longest allowed trailer, is generally limited to 42,000 pounds of freight, and could therefore hold several thousand gallons of paint. However, most collection points will not be able to store this many cans at any one time. Therefore, in most cases a system of combining paint can boxes or cages from individual collection points at an aggregation facility will be needed. Note that the aggregation concept is essentially the reverse of typical distribution warehousing systems currently used by the retail industry.

AGGREGATION

 Stand-alone aggregation facility. At its most basic, a stand-alone aggregation facility would need the capacity to store approximately three 53-foot box vans of paint, have a loading dock and a forklift, an office, and at least two staff. The exact size and location of each stand-alone aggregation facility would be determined by local conditions, but a minimum size of 4,200 square feet of warehouse space to accommodate three box vans of paint cans, space for maneuvering the forklift, and the office is recommended. Aggregation facilities are likely best located in an industrial or warehouse district near major cities in metropolitan areas.

 Aggregation outsourced to shipping company. Some shipping companies offer aggregation and other logistics services in addition to simple point-to-point trucking. Such companies often store shipments in a box van at their warehouse until accumulated quantities are large enough to warrant departure of that trailer to the final destination. Where available, this option can offer the potential of cost savings and the additional benefits of expertise and scalability provided by a company specializing in shipping and logistics.

 Aggregation at a collection point. Particularly in smaller communities, if aggregation is necessary it may be able to take place at an existing collection point. Combining aggregation and collection facilities may be particularly viable if the

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collection point is a dedicated facility and not co-located at a community center or retail store. In this model, paint collected at smaller (perhaps co-located) collection points could be brought to a central, dedicated facility for aggregation and shipping to a processor.

The total number and mix of aggregation facilities will necessarily be determined by local economics and logistics. However, for the purposes of providing planning-level estimates of the number of aggregation points needed, it is assumed that each metropolitan area in the U.S. will need at least one stand-alone aggregation point, whereas smaller communities (“isolated cities”) can operate without a stand-alone aggregation facility. Therefore, over 350 stand-alone aggregation points throughout the country are needed, one for each Metropolitan Statistical Area (MSA).

TRANSPORTATION

Transportation to the Aggregation Points

A primary reason for aggregation points is to accommodate space constraints and save costs at collection points, most of which can neither store thousands of cans of paint nor accommodate a 53-foot box van. Accordingly, more frequent collection of smaller quantities is needed to transport leftover paint from collection points to aggregation facilities. Two primary methods identified include:

 “Milk-run” logistics. Under this model, a truck makes one or several stops to pick up leftover paint along a fixed route. This “milk run” type system includes subsequent transport to an aggregation point. One commonly used delivery truck is a 24-foot box van, which can accommodate 12 pallets and 26,000 pounds. Costs for this type of system vary, but are generally priced either by the stop or by the hour, and are estimated to be a significant fraction of the total cost of a collection and transportation system for leftover paint.

Collection points that can store several thousand cans of paint needed to fill a long- haul box van will not require aggregation prior to transport to a processing facility which will reduce costs. Another possible cost saving measure includes outsourcing aggregation to a shipping and logistics company.

 Back-haul using existing delivery trucks. In this model, leftover paint is collected at the same time that other products are being delivered. This option is often associated with retail stores, which can serve as collection points, as is the case with rechargeable batteries, toner cartridges, and many other products. Under this model, retail outlets receive deliveries of new products before loading used products into the same delivery trucks to be “backhauled” to a consolidation point. This model could also involve delivery of new products to a retailer and collection of leftover paint at municipal or private facilities that are not associated with the retail outlet. The paint could still be backhauled to a consolidation point along the “reverse distribution” route. In relation to paint, there is still concern about whether retail collection is feasible or desirable.

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Few paint retailers or distributors operate or express interest in a back-haul system, so there is little precedent or experience with this type of system. However, the Product Stewardship Institute conducted a pilot project for several years with Benjamin Moore that demonstrated the feasibility of a back-haul arrangement whereby Benjamin Moore collected their own leftover latex paint was from municipal depots and brought back to the company’s manufacturing plant.13 In another pilot project, the Product Stewardship Institute showed the feasibility of collecting computers at Staples retail outlets and commercial customers in five New England States.14 In that pilot, Staples trucks that delivered new office products to the retail stores and businesses also collected gaylord boxes of computers, and then transported them to the company’s distribution locations, where they were consolidated and transported to a recycling company. Based on these data, the company is now collecting computers on a permanent basis in retail stores in Washington State

In the handful of metropolitan areas that have a paint re-processing facility, that facility would itself serve as the aggregation facility and no long-haul trucking would be needed.

Transportation to Processing Facilities

Shipping from the aggregation points will be least costly in 53-foot box vans. Long-haul trucking costs are developed in Section 7, with variations depending on distance and area of the country.

Costs for the aggregation and transportation described in this section are developed further in Section 7.

13 Product Stewardship Institute, 2004. Paint Product Stewardship: A Background Report for the National Dialogue on Paint Product Stewardship 14 The Collection and Recycling of Used Computers Using a Reverse Distribution System, a Pilot Project with Staples, Inc., Final Report to the U.S. Environmental Protection Agency, PSI, June 2005

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SECTION 5

PROCESSING CAPACITY NEEDED

 Conducted a survey of existing paint recycling facilities as detailed below. Additional notes from each interview can be found in Appendix B.

Processor Contact State or Province Kelly Moore Walter LeClerc California Eco Peinture George Portelance Quebec Amazon Environmental California Amazon Environmental Fred Bauer Minnesota Amazon Environmental Ohio Metro Jim Quinn Oregon Product Care Mark Kurschner British Columbia Visions Recycling Jerry Noel California Hotz Environmental Pamela McAuley Ontario

 Used results of these interviews, as well as paint collection estimates developed above, to estimate how many and where new facilities may be needed.

PROCESSOR SURVEY

Of the nine recycled paint processing facilities contacted, seven participants were interviewed (one interview represented three facilities) regarding plant operations. Participants walked the interviewer through their process. At times, participants refrained from answering questions regarding customers, cost, and processing information that they deemed sensitive competitive data. Formal questions fell under three categories:

 Collection details

- Do collection points pre-process? - Do you use aggregation points? - Distance from collection to aggregation - Population density benchmarks for collection points

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 Transportation costs

- From collection to aggregation to processing

 Process details

- Minimum amount of paint needed as feedstock - Maximum capacity - Optimum throughput - Offer reuse opportunities

Survey Key Findings

One of the key findings of the survey is that no two operations are alike. Each had any number of the following variables in the process:

 Funding - some facilities were government funded and others private;

 Collection methods – these range from depots at HHW sites to consumer drop-off programs at retail paint locations;

 Method and location for sorting and bulking paint;

 Final recycled paint product – these range from two to 300 colors;

 End-user – these included cement kiln, “virgin” retail paint vendor, overseas market, and municipality;

 Standard for producing quality paint; and

 Paint distribution model.

Additional variables exist which make it difficult to compare processing information. However, the majority of processors agreed on the following series of findings:

 Every processor had additional capacity - Using the measurement unit of liquid gallon capacity (versus partial gallon can capacity), processors can convert roughly 1 - 6 million gallons of recycled paint per facility per year.

 Processors determine location based on a number of factors, including existing HHW or transfer stations, supplier locations, end-customer locations, existing production facilities - Although population density analysis is not an explicit consideration, with the exception of one processor who built a facility next to a large supplier, major urban areas are implicit in most location considerations.

 Transportation costs are the second consideration in choosing processor locations - According to the survey, transportation costs varied considerably among participants, depending on collection process, government contracts, and other variables. Although most expressed that transportation costs were a nominal amount of their cost structure,

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transportation costs are uniformly considered in deciding the location of processing facilities. The majority of participants agreed that a maximum range of 500 to 1,000 miles one way determined the cost-benefit transportation threshold, though many reported greater distances.

When asked hypothetically about building additional capacity, the following were the three primary considerations:

 Population density (supply of leftover paint)

 Transportation costs (distance for supply to travel)

 End-customer (distance for the final product to travel)

With the exception of one processor, demand for the final product (recycled paint either at retail, commercial or export markets) is the barrier to processing additional leftover paint (e.g., the supply). Although demand-driven production was beyond the scope of the original survey, participants almost uniformly agreed that there was not enough demand for recycled paint. Therefore, processors limit supply and thus have remaining capacity for production.

Those interviewed uniformly agreed that end-customers purchase recycled paint because it costs less than comparable virgin paint, and do not base this decision on altruistic environmental reasons. According to those interviewed, key customers for recycled paint products are:

 Governments and municipalities (schools, prisons, other public facilities)

 Overseas markets

 Commercial contractors (apartment building and complex exteriors)

 Low-income urban and rural households (i.e., farmer painting barn exterior, etc.)

Many processors were eager to discuss recent quality improvements across the industry and the need for industry-wide quality standards among recycled paint producers. The completion of the Green Seal standard for recycled latex paint will go a long way to addressing these concerns.

CAPACITY ANALYSIS AND NEW FACILITIES NEEDED

Exhibit 11 displays basic results from an analysis of the capacity for recycled paint processing in the United States. This analysis is only as complete as the industry information provided via surveys and existing research. Capacity and collection assumptions are measured in liquid gallons (versus partial gallon cans). The analysis did not include projected increased capacity from any processor, but assumed that capacity remained constant at its existing amount. Also, the analysis did not consider any increased quantities of leftover paint from Canada. However, Canadian processing capacity was included. Accordingly, if existing processing capacity in southeastern Canada (e.g., Quebec) is filled with increased supply from Canada, additional processing facilities may be needed to serve the northeast U.S.

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Finally, it was assumed that paint swaps located at collection facilities could reduced the quantity of paint flowing to processors by 20 percent as compared to the quantities estimated to be collected. Therefore, the paint to be processed presented in Exhibit 11 assumes a 20 percent reduction in the quantity of leftover paint generated for paint reuse. It also assumes a medium- level scenario of 0.11 liquid gallons collected per person (from Exhibit 2)

EXHIBIT 11: PAINT PROCESSING CAPACITY EXISTING AND POTENTIAL NEEDS

Existing paint capacity presented in Exhibit 11 includes the following facilities and quantities:

 Northwest – 600,000 gallons per year from Portland Metro and 1 million gallons per year from Product Care in British Columbia

 West – 3 million gallons per year from Amazon Environmental in California, 4 million gallons per year from Visions Recycling in California, and 2.5 million gallons per year from Kelly Moore in California.

 Midwest – 3 million gallons per year from Amazon Environmental in Minnesota and 6 million gallons per year from Amazon Environmental in Ohio.

 Northeast – 1 million gallons from Hotz Environmental in Ontario, Canada and 2 million gallons per year from Eco Peinture in Quebec, Canada.

Latex and Oil-Based Collection Proportions

In Exhibit 11, the “paint to be processed” includes both latex and oil-based paints, and assumes a ratio of 80 percent latex to 20 percent oil-based, which is the estimated ratio of new paint sales. However, based on data from the Northwest Product Stewardship Council,15 the current percentage of oil-based leftover paint being collected is between 35 percent and 40 percent.

15 Personal communication, Dave Nightingale, August 21, 2006, and Paint Age Study Performed by NW Product Stewardship Council - Paint Advisory Group, presented in Chicago, IL, September 20-21, 2004.

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Therefore, the 80 to 20 split is a conservative planning number since it is not expected to reach this capacity until some time in the future.

As part of earlier research efforts of the PPSI process, a paint age study was performed and the results were presented at the Chicago stakeholders’ meeting in September 2004. The study found that the percentage of oil-based paints cans collected in three communities was 34.3, 39.3, and 44.3 percent. Interestingly, the community that had most recently established a permanent collection program had the lowest percentage of oil-based paint. In calculating the age of paint collected from these three communities and two others (328 cans total), it was found that 50 percent of the paint cans were less than seven years old and 90 percent of the paint cans were less than 14 years old.

Since industry representatives indicated that, in the last 14 years, there were less than 30 percent oil-based architectural paints sold in the market, it is clear that, with 34 to 44 percent coming back, paint consumers are ending up with a larger proportion of leftover oil-based paint than paint sales would indicate. This implies that there is a difference between the proportion of latex to oil-based paint sold into the market and the proportion of latex to oil-based paint available for collection. This leads to an expectation that there is, and will continue to be, a disproportionately large quantity of oil-based paint requiring collection than what new paint sales would indicate for some years in the future.

Section 6 of this report presents a conceptual design of a paint processing facility. This facility was designed to process 600,000 gallons of useable latex paint annually. The facility throughput of one million gallons is based on a single eight-hour shift. Additional paint can be processed by running extended hours or a second eight-hour shift.

Facility representatives interviewed for this study indicated that unusable latex paint comprises up to 25 percent of leftover latex paint; therefore, the facility will likely accept 800,000 gallon of latex paint of which 200,000 is unusable and will require disposal (25 percent of 800,000 gallons is 200,000 gallons). A further assumption is that the quantity of oil-based paint collected will, in time, match the proportion of oil-based paint sold, which is 20 percent. Therefore, the total quantity of paint accepted by the processing facility is one million gallons (latex-both useable and unusable- plus oil-based paint). Since the facility has been designed with an 80:20 percent latex to oil ratio, the model could be overestimating the amount of paint to be collected. It is worth mentioning that it is relatively easy to manage oil-based paint by hiring a contractor to haul drums of paint for fuel blending. The facility design presented in Section 6 of this report can accept and process oil-based paint using a separate flammables bulking room with ventilation to remove potentially harmful vapors. Overestimating the capacity needed for the latex paint results in planning estimates are conservative compared to what is expected in the near term.

Processor Analysis Overview and Conclusions

Assuming the medium-level scenario of 0.11 liquid gallons collected per person (from Exhibit 2), the capacity analysis presented in Exhibit 11 indicates major capacity gaps exist in the South, the Southeast and the East. Using a minimum facility design capacity of one million gallons per year (as explained above and presented in Section 6 of this report) and a maximum facility capacity of six million gallons per year (the highest capacity of facilities interviewed), the

5-5 Paint Product Stewardship Initiative number of processing facilities that may be needed under the four collection scenarios is presented in Exhibit 12. See Appendix B for more details on this analysis.

If the minimum facility design with annual throughput of one million gallons is based on the proportion of leftover latex paint matching paint sales (80 percent), it is probably overestimating the proportion of latex likely to be received and underestimating the proportion of oil-based paint in the short term. In actual implementation of a nationally-coordinated leftover paint system, it is easier and much less labor intensive to simply bulk oil-based paint for use as an alternate industrial fuel.

EXHIBIT 12: ESTIMATED NEW PROCESSING FACILITIES NEEDED, BY REGION

Level of Collection Assumed REGION Low Medium High Extra High (0.06 gals per (0.11 gals per (0.17 gals per (0.23 gals per person) person) person) person) Northwest 0 0 0-1 0-1 West 0 0 0 0 Midwest 0 0 0 1-3 South 1-2 1-4 1-6 2-7 Southeast 1-3 1-6 2-8 2-11 East 1-3 1-4 1-6 2-8 Northeast 0 0 0-1 1-2 TOTAL 3 - 8 3 - 14 4 - 22 8 - 32 * Paint quantities presented in this exhibit include both latex and oil-based paint.

This would also mean that the need for additional processing capacity of the nationally- coordinated system may be less or actually need to be developed at a later time. In this way using the assumption that 80 percent of leftover paint is latex provides a larger need for processing capacity and future facilities than using a smaller percentage assumption for the proportion of leftover latex paint. If the actual level of leftover latex paint collected was in the 55 to 65 percent range, as indicated by the paint age study, the infrastructure needs would be proportionally smaller for management. This is because it is thought that the latex recycling process is the limiting throughput consideration, and that the capacity for bulking oil-based paints can be accommodated with the existing flammables bulking area assuming the ranges anticipated with either scenario.

Exhibit 13 maps the existing nine paint processing facilities described above with an associated buffer of 500 miles. All counties within a 500-mile radius of an existing paint processing facility are colored and each county was assigned to a single processing facility even though another facility may also have been within its 500-mile radius. An additional facility operated by Hotz Environmental in Mexico was also mapped.

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EXHIBIT 13: EXISTING PAINT PROCESSING FACILITIES AND ASSOCIATED 500 MILE BUFFER

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SECTION 6

PROCESSING FACILITY DESIGN RECOMMENDATIONS

The first step in designing a paint processing facility is estimating its capacity. Factors that affect the quantity of paint that can be delivered to a processing facility include reuse programs at collection sites, the proportion of latex and oil-based paints delivered, and the quantity of unusable paint that requires disposal.

In the Background Report (2004) prepared for the PPSI, the Product Stewardship Institute reported that HHW programs in Massachusetts that incorporate paint swaps manage about 20 percent of their paint through the swaps. Processors reported a range of recycling rates for the leftover paint they process: Amazon Environmental reported 45 percent, while Metro (Portland OR) reported 80 percent. Based on that data, PSI estimated that 65 percent of leftover latex paint sent to processors can be recycled into new paint (Product Stewardship Institute, 2004). The rest must be downcycled into other, non-paint products such as cement additives, or disposed.

Based on the information above, the Infrastructure Workgroup agreed that the national system should use the following hierarchy when managing leftover latex paint: reuse, recycle, downcycle, disposal. In consultation with the consultant team, the Workgroup agreed to use the following goals for management of leftover latex paint:

 20 percent of paint is reused through paint swaps

 65 percent is recycled into new paint (whether consolidated or reprocessed)

 8 percent is downcycled into a cement additive

 7 percent is disposed

As the collection system for leftover paint matures, these percentages are expected to be reached over time. For modeling purposes, it was assumed that all collected leftover paint would be aggregated and transported to processing facilities. There was insufficient data to confidently estimate the proportion of paint that would be diverted to reuse programs or how reuse programs would affect the proportion of usable latex paint.

CONCEPTUAL FACILITY DESIGN

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Paint Sorting and Processing

Paint that is accepted at collection events or at collection points without storage capacity will likely need to be collected through either scheduled pick-ups or milk runs. The containerized paint arrives at the facility in gaylord boxes and is offloaded at a receiving loading dock area. The gaylord boxes are then taken by forklift to an incoming paint storage area where they will eventually be pulled for processing.

EXHIBIT 14: DIAGRAM OF PAINT PROCESSING FLOW CHART

Leftover Paint

Un-useable Useable Latex Paint and Paint Oil-based Paint

Non-Paint Recycling Processed Energy Recovery or Disposal

Sorted by Color and Blended

Filtered

Packaged

Shipped to Retail facility

Empty Cans Recycled

Unusable latex paint can be down-cycled and used as feedstock for other products. For the model presented in this report, it is assumed that unusable latex paint is handled as a solid waste and disposed of in a municipal landfill. In some states, unusable latex paint will be managed as a

6-2 Paint Product Stewardship Initiative hazardous waste. Oil based paints will be bulked in an area designated by the building code as an H occupancy, and the bulked oil based paint will be sent to a fuel market.

The second sort would eliminate spoiled paint or paint that is visually contaminated before sorting by color and draining. Once the can is opened, it is inspected for content and quality. Paint determined to be useable is passed on to the conveyer sorting line while non-useable paint is emptied into a disposal drum or, if solid, placed in a bin for disposal.

Oil-based paint is consolidated and shipped to alternative markets to be used as a fuel source. Employees managing oil-based paint require additional protective equipment such as respirators and tyvek coveralls. The flammables bulking room will have area and spot ventilation to remove potentially harmful vapors from workers breathing zone and avoid accumulation of flammable vapors in concentrations that could ignite or explode. Additionally, the flammables bulking room will be explosion-proof, which means explosion-proof lighting, hazardous condition electrical fittings, fire walls, etc.. Health and safety training and a medical monitoring program will also be required for all employees working in the flammables bulking room.

The sorting line is a conveyer system with manned designated “color stations.” Typically, paint is collected in seven standard colors: white, green, red, blue, grey, brown and yellow. As the paint travels around the conveyer, specific colors are pulled from the line at designated “color stations.” Additional colors stations can be developed depending on the colors of incoming paint.

It is assumed that seven employees will be required at each sorting line to sort the paint into seven designated “color stations”. Paint colors will come in to the facility at very different rates, while one station is very busy another may be idle; therefore, sorters will work according to the incoming flow of paint. Two sorting lines will require 14 employees total to sort paint. The sorting line employees work in an elevated room that is approximately 3.5 feet off the ground. Exhibit 15 and Exhibit 16 present an above view and side view, respectively, of the sorting operation.

Consolidating

The acceptable containers are sorted by color and drained by gravity into 300-gallon plastic totes that are moved by forklift to the processing area when filled. The tanks and bins are located in areas that provide easy access for forklifts to maneuver; they are moved and replaced as they become full.

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Reprocessing Option

The design presented in this report is for a paint consolidation facility but can be converted to a reprocessing facility where recycled paint is mixed with virgin paint.16 Adjustments necessary for a reprocessing facility would include the amount of warehouse space to store raw materials and minor equipment modifications. The layout would remain similar.

Processing

This area would have three 1,000-gallon and one 500-gallon tanks with dedicated high-speed dispersers equipped with circulation type blades, two-inch air pumps to in-line cartridge filters, and canning line.

Paint Filtering and Packaging

As the storage tanks become full they are moved to a paint filtration and packaging area. Packaging of the paint will take place after onsite quality control testing has been conducted. Quality control testing will be conducted for color, thickness and chemical composition. The full tanks are situated over a paint packaging conveyer line, which is equipped with hose attachments, filtration systems and pumps. The paint is drained from the tank through a hose into a filtration system, which is equipped with a screen. The paint is pumped into empty one to five- gallon containers that are situated on the conveyer belt and below the tank. The full containers are then moved down the conveyer line where they are sealed boxed and palletized for shipping to distribution warehouses or retail outlets.

The facility design is based on a 0.6 million gallons a year operation with three paint filtering and packaging lines. It is not required that these lines be dedicated to a specific color. In the event of a change in color the hoses, filtration system and pumps will be flushed clean prior to the addition of a new color.

The wastewater collected from the hose, filtration, and pumping equipment from latex paint packaging will be captured and sent to a wastewater treatment facility. An onsite water reuse system is a possibility. A reuse system would incorporate settling tanks for solids and filtration. Handling and treatment procedures of wastewater from these operations will be local, state or territory specific. Prior to operations, a detailed consultation of regulations and permitting requirements should be reviewed and followed, particularly those for the particular municipality, state, or territory.

16 “Consolidated Paints” are defined as paints that contain a minimum of 95 percent by volume post-consumer paint with a maximum of 5 percent by volume secondary industrial materials or virgin materials. “Reprocessed Paints” are defined as paints that contain a minimum of 50 percent by volume post-consumer paint, with a maximum of 50 percent by volume secondary industrial materials or virgin materials

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Can Crushing

A large number of empty metal and some plastic paint containers will need to be collected, crushed, and sent for recycling. It is expected that most of the paint arriving at a paint processing facility will be containerized in one-gallon metal cans.

Empty metal cans are collected from the paint sorting line and moved to an area designated for crushing. Cans are crushed typically using a mechanical crusher. Empty steel cans from both the latex and oil-based paint operations can be collected, mixed together and recycled as scrap metal. Discussions with paint processing facility operators recommended that cans not be baled, due to various difficulties with the process. Crushed cans can be collected loosely in 40-yard roll-off containers that are located in loading dock area. When the roll-off containers are full, a recycling company should be contacted to arrange for pickup.

Paint cans with solidified paint will be sent for landfill disposal, and plastic paint containers will be recycled if a local program is available; otherwise, plastic containers will be disposed.

Exhibits 15, 16, and 17 presents a paint processing facility conceptual design.

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EXHIBIT 15: OVERVIEW OF PAINT SORTING LINE

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EXHIBIT 16: SIDE VIEW OF PAINT SORTING LINE

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EXHIBIT 17: PAINT PROCESSING FACILITY LAYOUT

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SECTION 7

PRELIMINARY COST INFORMATION

The previous sections of this report have discussed several aspects of a system to collect and transform leftover paint into a new marketable product. This section analyzes costs of each step of the process to support three primary goals:

1. Make recommendations about methods of collection, aggregation, or transportation that can help minimize costs; and

2. Provide estimates of a likely range of system-wide costs for a nationally-coordinated leftover paint management infrastructure.

3. Estimate costs to construct and operate a paint processing facility.

In the discussion and analyses that follow, costs for collection, aggregation, and transportation are expressed in terms of dollars per gallon. Since the size and scale of the collection infrastructure will vary widely according to local conditions, expressing costs on a per-gallon basis allows for straight-forward scaling of costs for various sized facilities and geographies. In addition, expressing costs on a per-gallon basis enables clear comparisons of costs among collection, aggregation, transportation, and processing steps.

The method for determining costs of collection, aggregation, and transportation involved conducting a literature review and interviewing numerous vendors (such as trucking companies), program managers (such as household hazardous waste or curbside paint collection managers), and a paint industry consultant for a realistic facility layout and industry standard equipment types, quantities, and costs. In general, cost estimates for individual aspects of each stage were obtained and combined to determine costs per gallon for that stage. For example, operating an aggregation facility involves renting a warehouse space, hiring staff, and buying and operating forklifts and other equipment. Best estimates were sought for each of these components, which were combined to produce an overall cost-per-gallon estimate for leftover paint aggregation. Further details (and assumptions) will be explained in each section below.

COLLECTION

As discussed in Section 3, the three primary possibilities for leftover paint collection from metropolitan areas and isolated cities include dedicated facilities, co-located drop-off points, and curbside collection. Leftover paint collection from rural areas will consist of mobile collection events.

Collection from Metropolitan Areas and Isolated Cities

Dedicated Facilities--

A distinguishing feature of a dedicated facility is that one of its primary goals (unlike co-located drop-off points) is to accept leftover paint from the public. Existing HHW facilities are

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examples of such dedicated facilities. However, dedicated facilities could also be devoted exclusively to paint.

Dedicated facilities are often staffed facilities where consumers drive in and unload paint, perhaps with the assistance of the staff. Dedicated facilities have a covered area or building in which to store collected paint and package cans into larger shipping containers. If the facility has capacity to store 24 pallets of paint in a covered location with a loading dock, it may be able to ship paint directly to a recycler, and possibly even serve as an aggregation point for other, smaller collection facilities. Alternately, a milk-run transportation network may be needed to transport leftover paint to an aggregation facility.

At some existing facilities, staff open the paint cans and consolidate the paint into 55-gallon drums. However, paint recyclers strongly prefer that paint be left in original cans so that they can maintain control over quality and color of their feedstock. Accordingly, recommendations and cost estimates for dedicated facilities call for staff to simply package paint cans into gaylord boxes or cages.

To estimate costs for dedicated facilities, data from twenty existing HHW programs throughout the country were analyzed. Although dedicated facilities for paint need not also collect HHW, the breadth of cost data available for HHW facilities and the similarity in logistics made them a strong basis for estimating costs of dedicated facilities. Data for these HHW facilities were collected in 2005 by Cascadia Consulting Group as part of its study for the Metro Solid Waste and Recycling Department, entitled Comparison of Household Hazardous Waste Programs, but analyzed in greater detail for this study.

The overall median total cost of operating the 20 HHW sites as reported in Comparison of Household Hazardous Waste Programs was $0.67 per pound. Based on the analysis of these data, the cost of handling paint at a dedicated facility was estimated to be approximately $0.22 per pound including all operating and administrative costs, and most expected amortized capital costs. The $0.22 per pound cost figure results from the deduction of the following:

 Promotion, transport, and disposal costs (which totaled an estimated $0.35 per pound but do not apply to this part of the system); and

 Bulking paint in drums (estimated at $0.10 per pound 17) since no paint processing will be occurring until the paint reaches the recycler.

These adjustments result in a median cost of $0.22 per pound for the programs analyzed; however, average actual costs could be as low as $0.13 per pound or as high as $0.40 per pound given the variability in costs reported by the programs studied and economies of scale, which would tend to decrease per-pound and per-gallon costs with increased throughput. In addition, purchase of new capital assets may require additional costs, as the programs surveyed generally either are paying debt service on properties acquired many years ago or are renting. Purchase of

17 Jim Talbot of the City of Seattle estimated consolidation costs to be $0.08 per pound and Jen Holliday of Chittenden Solid Waste District in Vermont estimated consolidation costs to be $0.13 per pound.

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real estate at current market rates (particularly in large urban areas) could require amortized capital costs at rates beyond those reported by companies and governments included in the 2005 Comparison of Household Hazardous Waste Programs study and therefore increase the $0.22 per pound estimate. However, capital costs are not the major source of costs for collection and variations are not expected to have a major impact on the system-wide averages estimated here.

Assuming that the average paint can brought by a consumer is 40 percent full,18 that each liquid gallon of paint (average of latex and oil-based) weighs 10 pounds,19 and that each empty paint can weighs 0.5 pounds,20 the best estimate of $0.22 per pound equates to an estimate of $0.99 per gallon can of paint or $2.48 per liquid gallon handled. Using these same calculations, but starting with either a lower or higher cost per pound, results in a low estimate of $0.59 per gallon and a high estimate of $1.80 per gallon.

Exhibit 18 summarizes the estimates of the costs of handling paint at dedicated facilities.

EXHIBIT 18: ESTIMATES OF PER-UNIT COSTS OF PAINT COLLECTION AT DEDICATED FACILITIES

METRIC BEST ESTIMATE Per Pound $0.22 Per Liquid Gallon $2.48 Per Gallon Can (40% full) $0.99

Co-located Drop-off Points--

As described in Section 3, co-located facilities could be sited at various existing businesses or institutions. Drop-off points could consist of a simple cage into which users can set their leftover paint cans or could accept paint at a staffed counter as a service to the community. Currently, few examples of co-located drop-off points for paint exist in North America. One of the best examples is the network of paint drop-off points operated by Product Care in British Columbia that are co-located with bottle recycling centers. According to Product Care’s 2004 annual report and 2005 audited financial statements,21 annual operating costs were $4.13 million (Canadian dollars equal to $3.7 million USD) to collect paint cans with a combined capacity of 6.1 million liters at 106 depots.22 According to the president of Product Care, collection costs are approximately 25 percent of these costs, or $1.03 million (Mark Kurschner, personal communication July 28, 2006). Assuming an exchange rate of $0.88 US dollar per Canadian dollar and 3.78 liters per gallon, these figures translate into $0.56 per gallon can and $8,500 per collection depot.

18 Collectors interviewed reported averages of 33, 40, and 45 percent. 40 percent was used as a reasonable average 19 As reported by Jim Talbot of the City of Seattle 20 As reported by Jim Talbot of the City of Seattle 21 Available at www.productcare.org 22 This figure includes annual amortized capital costs (including machinery, tubskids and cages, and trailers) with a current value (as of 2005) of $756,171 (Canadian).

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Exhibit 19 displays cost estimates for co-located drop-off points based on the Product Care model; please note that these costs do not include any sorting or transportation, nor any program administration or staff time necessary to negotiate and maintain relationships with the facilities that would host the leftover paint collection; accordingly, actual costs would likely be higher.

EXHIBIT 19: ESTIMATES OF PER-UNIT COSTS OF PAINT COLLECTION AT CO-LOCATED DROP-OFF POINTS

METRIC BEST ESTIMATE Per Pound $0.12 Per Liquid Gallon $1.40 Per Gallon Can (40% full) $0.56

One additional option that may offer significant promise is collecting leftover paint at existing paint retailers. Some retailers may be interested in collecting leftover paint as a service to the community and to increase their customer base. Furthermore, retailers are well-distributed throughout the country and could provide a comprehensive collection infrastructure. In Quebec, the leftover paint collection system relies on retail chains to provide collection points for a substantial proportion of the total leftover paint in the Province. As described in Section 3, 12,000 existing paint retailers control an estimated 87 percent of the current virgin paint market. Retail collection points also have the potential to offer significant cost savings over other methods. One area for cost savings would be the benefit of using pre-existing facilities that are already familiar to consumers and so would require less capital investment and less promotion. An equal, if not greater opportunity, however, is the possibility to implement back-haul transportation to existing distribution centers, particularly for larger stores and chains with highly centralized distribution. As mentioned earlier, reverse distribution logistics do not require that retailers collect the paint, but that they play a role in the overall leftover paint collection system. This option is discussed in more detail below under “Transportation and Aggregation.”

Curbside Collection--

Curbside collection of leftover paint is currently a rare practice but one that has the potential to offer maximum consumer convenience at reasonable cost if combined with existing curbside recycling collection. Operating curbside recycling at reasonable cost relies on high participation by households that are spaced at urban densities – if households that participate are widely spaced, the cost per household and per ton of material escalates rapidly.

A dedicated curbside service for leftover paint is not likely to be cost competitive due to the relative infrequent generation of leftover paint (and therefore infrequent participation) by households. However, collecting paint along with other curbside recyclables offers the potential of great convenience at reasonable costs. Curbside recycling programs generally operate at $0.05 to $0.0723 per pound. However, adding leftover paint required special handling, as it

23 See, for example, the following sources. Philipp, Kelly “The Economics of Collecting Recyclables” Resource Recycling 1999 (November): 22-26. Eureka Recycling “Downstream of Single Stream” Resource Recycling 2002 (November): 24-28. EPA

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cannot be simply added in with other curbside recyclables. One existing program in Marion County, Oregon uses a custom-built box added to the underside of the truck, at a cost of approximately $2,000 per truck. A program in Alameda County, California simply places paint cans in the cab of the truck.

Curbside collection of used motor oil has a longer and more extensive history than curbside collection of leftover paint. Motor oil curbside collection is similar in operation to what has been demonstrated for leftover paint. Therefore, much of the experience of curbside used oil collection systems can be used as a proxy for evaluating potential leftover paint as an add-on to existing curbside recycling systems. Existing information about the cost of curbside motor oil were used to estimate the costs of collecting leftover paint. Key findings include:

 Operating costs are estimated at $24 per truck per service day. According to a study in Sacramento County, California, four percent of a driver’s time on regular curbside recycling routes was devoted to collecting used motor oil.24 Assuming a loaded cost of $75 per hour for truck and driver and an eight-hour workday, this equates to $24 per service day per truck.

 Capital costs are estimated at $5 per truck per service day. Capital improvements to the truck, estimated at $2,000 per truck, would amount to approximately $133 per year assuming a 15-year lifespan. Assuming bi-weekly collection and 26 service days per year implies a capital cost of approximately $5 per service day. Therefore, costs total an estimated $29 per service day per truck.

 These costs amount to an estimate of $0.95 per household per year. If each truck serves 800 households in the day’s route,25 these costs amount to $0.95 per household per year ($29 per day multiplied by 26 days per year divided by 800 households).

Assuming that curbside collection of paint would have similar costs, and that curbside collection would generate “high” collection quantities of 0.45 gallons of leftover paint per household per year due to increased convenience, $0.95 per household per year equates to approximately $2.10 per gallon for curbside collection. However, there is a high degree of uncertainty around this estimate due to the assumptions made above.

“Multifamily Recycling: A National Study” EPA530-R-01-018. Stevens, Barbara “Recycling Collection Costs By the Numbers: a National Survey,” Resource Recycling 1994a (September): 53-59 24 Glenn Gallagher of the California Integrated Waste Management Board 25 800 households per day is a figure that has been used by the Oregon DEQ in some planning level calculations (per David Allaway, Oregon DEQ). For comparison, a truck in the City of Seattle serves between 700 and 1,000 households in a day.

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EXHIBIT 20: ESTIMATES OF PER-UNIT COSTS OF PAINT COLLECTION AT CURBSIDE PROGRAMS

METRIC BEST ESTIMATE

Per Pound $0.19 Per Liquid Gallon $2.10 Per Gallon Can (40% full) $0.84

Summary of Collection Cost Estimates from Metropolitan Areas and Isolated Cities--

Based on the analysis presented above, the costs of collecting leftover paint can vary widely depending on collection method used, local conditions, and other factors. In general, this analysis found that adding leftover paint collection options to existing facilities and programs is the least-cost method of providing the service. Co-located drop-off points are likely to be the least cost method because facilities already exist and paint collection activities could be integrated into the organization’s other efforts. However, this method also involves challenges, the most significant of which is likely to be the management time needed to solicit and negotiate with potential partners, few of which are likely to be immediately receptive to adding collection of leftover paint to their existing efforts.

As an alternative, dedicated leftover paint collection points have appeal due to the relative ease of establishing facilities. Curbside paint collection has the potential to offer maximum service and could be cost-competitive to other methods if used by households. These options, however, are estimated to be more expensive on a per-gallon basis than co-located collection.

EXHIBIT 21: COMPARISONS OF BEST PER-UNIT COSTS OF LEFTOVER PAINT COLLECTION USING THREE PRIMARY METHODS FROM METROPOLITAN AREAS AND ISOLATED CITIES

Ultimately, the relative mix of leftover paint collection options will depend heavily on local conditions and a balance of cost and convenience. Collecting leftover paint using dedicated facilities was estimated to cost $2.48 per liquid gallon, as summarized in Exhibit 21. Actual system-wide costs could be reduced if co-located drop-off points could be developed in significant numbers, and increased convenience (and therefore quantities) could be achieved by offering curbside collection. For example, a hypothetical system with half of all leftover paint collected at dedicated facilities, 45 percent collected at co-located drop-off points, and five percent collected curbside could cost approximately $1.98 per gallon, not including the transportation, aggregation, and processing activities to be discussed below.

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Collection from Very Rural Areas

It is assumed that mobile collections will be the method to collect leftover paint from very rural areas. Municipalities or other organizations will promote the collection event and inform users about what kinds of paint products will be collected. These mobile collections will consist of a 24- or 30-foot truck making a number of stops at promoted collection events to collect paint. Paint cans will be put into a gaylord box and transported to the nearest metropolitan area or isolated city for aggregation into their paint collection system.

Costs for mobile collections from rural areas will be approximately $80 per gaylord box for delivery within 250 miles.26 Phillips Environmental, one of the leaders in rural mobile collection events, uses this to estimate rural collection costs. Assuming 140 one-gallon cans per gaylord box and that each is 40 percent full, each gaylord box will contain approximately 56 gallons; therefore, the cost for mobile collection from rural areas and transport to the nearest metropolitan area or isolated city will be $1.43 per gallon. While this is less than the unit cost for collection from metropolitan areas, it should be noted that this relies on the collection, aggregation, and transportation infrastructure created for the metropolitan areas.

AGGREGATION AND TRANSPORTATION

Most collection points will not have space to accommodate enough paint cans to fill a long-haul trucking trailer for transport to a paint processor. In these cases an intermediate transportation and aggregation system will be needed.

Costs for aggregation and transportation can vary widely, but our estimates focused on establishing a small stand-alone aggregation facility in a warehouse and then operating a 24-foot box van in a “milk run” route to collect paint from individual collection points. Other types of aggregation are also possible – for example, curbside collection is a form of aggregation in itself, and large dedicated collection sites could also serve as aggregation points. However, it is assumed that at least one stand-alone aggregation facility will be needed in each metropolitan area of the country. The cost estimates were developed accordingly.

Transportation to the Aggregation Points

Short-haul trucking (e.g., from the initial collection point to the aggregation facility) is a significant cost. Based on interviews with several trucking and logistics companies, it is assumed that short-haul trucking will be performed in a 24-foot box van that can hold 12 gaylord boxes. Average charges for this type of service are approximately $75 per hour including truck and driver; assuming an eight-hour day, this equates to $600 for the day. Assuming 12 gaylords collected per day, 140 cans per gaylord, and 0.4 gallons per can, this equates to $0.89 per liquid gallon for transporting leftover paint from collection points to aggregation points.

This “milk-run” type of service could be used for either dedicated or co-located collection points, including retail stores. One significant alternative to milk-run collection available to retail stores

26 As estimated by Mike O’Donnell, Phillips Environmental

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or other private locations, however, is to implement back-haul transportation to existing distribution centers, particularly for larger stores and chains with highly centralized distribution. For example, the truck that delivers new paint, hardware, or other building materials from the distribution center is generally returning empty and could instead be carrying leftover paint for very low marginal cost. With few existing models outside of those in Illinois and Oregon for retail back haul, however, this option cannot be recommended without significant additional research. Nevertheless, interested retailers, distributors, and manufacturers could potentially work together to develop a leftover paint collection system with significant cost savings over dedicated or other co-located systems that use ‘milk-run’ transportation and aggregation. In addition, as was the case with PSI’s pilot project with Benjamin Moore, new paint could be distributed to retail stores and, on the backhaul, company trucks could pick up metal paint cages filled with cans at municipal paint collection depots. These pickups could really take place anywhere that the transportation logistics might be feasible.

Aggregation of paint will also be needed in smaller communities such as the “isolated” cities identified in Section 3. In some cases, aggregation may be possible at existing collection sites, especially any dedicated facilities. In other cases, however, it would be necessary to transport paint to the nearest metropolitan area’s aggregation facility since not enough paint would be generated in the isolated city to support a stand-alone aggregation facility. Assuming that each isolated city is located an average of two hours from the nearest metropolitan area, the additional cost for each truck would be approximately $300, assuming round-trip transportation totaling four hours. This would raise milk-run costs for isolated cities from $0.89 per gallon to $1.34 per gallon. The weighted average of these two costs is $0.94 per gallon.27

Operation of the Aggregation Facility

It is estimated that an aggregation facility will need to accommodate at least three 53-foot box vans of paint (e.g. 156 gaylord boxes). With each pair of stacked gaylords taking up 13 square feet, plus a one-foot buffer on each side for maneuvering, this totals 2,500 square feet. Adding in 1,000 square feet for loading/unloading/office space and a 20 percent buffer brings the total to 4,200 square feet.

Costs of operating such an aggregation facility are estimated as follows:

 Rent and Utilities: $35,000 per year. This figure was calculated by considering average warehouse leasing rates across the country, which currently average approximately $4.41.per square foot28 ; adding approximately $4.00 per square foot for triple net (taxes, insurance, and maintenance) and utilities29 brings total rental cost to $8.41 per square foot. Therefore, the annual cost for rent and utilities for an aggregation facility are approximately $35,000 annually (4,200 square feet times $8.41 per square foot per year).

27 The weighted average was calculated based on 241 million people living in Metropolitan Statistical Areas and 29 million people living in Micropolitan Statistical Areas. 28 Source: Grubb & Ellis 29 Source: Barbara Jacobsen, the Jacobsen Group, Seattle, Washington

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 Staff: $0.07 per gallon. It is assumed that staff needs were proportional to paint throughput as follows: Begin with a base wage rate for laborers of $30,000 per year, then add in benefits (at a ratio of 35 percent) to bring the wage rate to $40,500 per year. Then assume one supervisor-hour for each four laborer-hours; with supervisors commanding a 50 percent wage premium, this brings the annual cost per laborer (including benefits and supervision) to $56,000, or $28 per hour, or $0.46 per minute. Now assume that it takes four minutes to forklift one gaylord between a truck and the facility, i.e., eight minutes total to transport one pallet from a milk-run truck to the facility and then to a long-haul truck. With 56 liquid gallons of paint per gaylord, this calculates to $0.07 per gallon in labor costs. These estimates assume that any needed documentation of gaylord contents has occurred at the point of collection, that all sorting and removal of unwanted items will take place at the recycler, and therefore that the gaylords are not unpacked but instead simply re-loaded onto 53-foot vans. An aggregation point for a moderately-sized metropolitan area such as Saint Louis (with a paint throughput of between approximately 200,000 and 700,000 gallons per year) would therefore incur between $14,000 and $49,000 (200,000 gallons times $0.07 per gallon equals $14,000) in labor costs if no inspection was needed and would only need to be staffed on a part time basis.

 Other overhead and administration: $21,000 per year. This includes annual cost estimates of $7,000 per year for rental and operation of a forklift, $2,000 for telecommunications, $5,000 for miscellaneous equipment and furniture, $4,000 for IT equipment and support, and $3,000 for travel of a supervisor to out of town meetings and conferences, as needed.

 Materials: $0.31 per gallon. A variety of packaging options are possible to transport leftover paint from collection point to end destination at a recycler. Options currently in use include cardboard gaylord boxes, gaylord-size paint cages, and plastic tub skids30. Cost estimates based on use of cardboard gaylord boxes were developed due to their ubiquity and the fact that using them does not require a system to redistribute permanent cages or plastic tub skids to collection points. These other two options could offer some potential cost savings if redistribution logistics could be resolved; however, these savings are small compared to the overall estimated cost of this system and so are not explored further here. Costs for gaylords (measuring 48” long by 40” wide by 36” high) are estimated at $30 new or $15 used31. A net cost for each gaylord box was assumed to be $15. Each box can hold approximately 140 gallon cans of paint – assuming each is 40 percent full yields a cost of $0.27 per gallon. In addition, each box must be placed on a pallet, for which a net cost of $2 per pallet per trip and $0.04 per gallon32 was assumed.

30 An additional option possible for non-hazardous, latex paint is shrink-wrapped pallets. Since oil-based paint will be transported in this system, shrink-wrapped pallets are not viable for this model due to federal Department of Transportation regulations. 31 As estimated by Mike O’Donnell, Phillips Environmental 32 Pallets could either be purchased new for $8-$10 and resold for $5 to $7 or re-used several time

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Because of the fixed costs of rent, utilities, and overhead, the overall cost per gallon for the rental facility will depend on how many gallons of paint move through the facility each year: the higher the throughput, the lower the cost per gallon. Assuming each metropolitan area (357 in total) has an aggregation facility, and all gallons of paint collected travel through an aggregation point, the 31 million gallons of paint collected in metro areas and isolated cities imply an average throughput of approximately 86,000 gallons per year per aggregation facility. For this level of throughput, the overall average cost including rent, administration, and overhead would be $0.66 per gallon.33 Adding $0.07 per pound of labor and $0.31 per pound for materials (as estimated above) would bring total estimated average costs to approximately $1.04 per gallon, not including the milk run transportation.

Exhibit 22 summarizes the estimated individual and total costs of aggregating paint as described above.

EXHIBIT 22: ESTIMATES OF PER-GALLON ANNUAL AGGREGATION COSTS

AGGREGATION FACTOR PER-GALLON COST

“Milk Run” Transportation $0.94/gallon Operation of Aggregation Facility $0.66/gallon Labor at Aggregation Facility34 $0.07/gallon Materials at Aggregation Facility $0.31/gallon Total Aggregation Costs $1.98/gallon

Transportation to Processing Center

Transportation to a processing center will be least costly if performed using 53-foot box vans. Interviews with three shipping companies35 yielded an average cost of $2.35 per mile given current fuel prices of about $3 per gallon. Assuming 26 pallets and gaylords double-stacked, for a total of 7,300 one-gallon cans and 2,900 liquid gallons, yields an average cost of $0.08 per gallon per 100 miles. GIS analysis was then used to estimate distances from each aggregation facility to the nearest processing facility. These distances were rounded up to the nearest 100 miles, so that these distances ranged from 100 miles (e.g., in the area around Portland, Oregon) to 1000 miles (for many facilities in Florida and some facilities in Texas). Transportation costs per gallon varied considerably based on distance to the nearest recycler, but the overall weighted average across all metropolitan areas was $0.32 per gallon. In some areas, particularly California, where paint is classified as a hazardous material, there may be a need to ship trailers before they fill to accommodate storage time limits for hazardous materials.

In addition, note that some cost savings on long-distance transport would be achieved by locating new processing facilities in under-served regions of the country, as recommended in Section 5.

33 Calculated as ($35,282 rent +$21,000 overhead and admin)/85,600 34 Assumes inspection of individual cans will not be needed 35 Yellow Trucking, Interstate Distributor Co., and Peninsula Trucking

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In the context of the overall costs of managing leftover paint, these savings are relatively small. Still, the savings achieved may be able to support the cost-effectiveness of building new processing facilities.

Summary of Aggregation and Transportation Cost Estimates

The major drivers of aggregation and transportation costs are “milk-run” pick-ups (estimated at $0.94 per gallon) and the cost of the aggregation facility (which varies considerably based on throughput but is estimated to average $0.66 plus labor of at least $0.07 per gallon). Long-haul trucking charges (estimated at $0.08 per gallon per 100 miles) are less significant, contributing an average of $0.32 to total costs per gallon. Also relatively minor are the costs of pallets and other materials, estimated at $0.31 per gallon. Exhibit 23 displays the cost elements collection, aggregation and transportation system.

EXHIBIT 23: COLLECTION, AGGREGATION AND TRANSPORTATION COST ELEMENTS

Aggregation (Milk Run)

Aggregation (Operation) Collection (Operation) Aggregation (Labor)

Aggregation (Materials)

Transport

Opportunities for significant cost savings exist for both of the two major drivers of aggregation and transportation costs. Milk-run costs could be reduced by limiting the number of collection facilities (although this would decrease convenience and collection quantities), or by identifying collection facilities with the capacity to store multiple pallets on-site. Aggregation facility costs could likely be reduced by outsourcing this task to a trucking company that also provides logistics or consolidation services, although the hazardous nature of oil-based paint may limit the number of companies who could provide such a service. Both milk-run costs and aggregation facility costs would probably be minimized by working with a company that can bundle both of these services together with long-haul trucking to provide a door-to-door transportation solution.

ASSESSMENT OF SYSTEM-WIDE COLLECTION, AGGREGATION AND TRANSPORTATION COSTS

This section of the report has described per-gallon cost estimates for a nationally coordinated infrastructure to collect, aggregate, and transport leftover paint to re-processors. The following exhibits summarize the estimate discussed above in terms of collection, aggregation (which includes “milk run” transportation, operation of an aggregation facility, and packaging materials), and transportation to the nearest processing facility. Note that the construction of

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new processing facilities could help decrease these transportation costs and help optimize the system. However, note also that this final transportation is a relatively small component of overall costs. Although siting a new processing facility could be cost effective if it reduces transportation costs by more than the costs of establishing that new facility, the overall benefit would still likely be small compared to the overall costs of the system.

Exhibit 24 summarizes the costs of operating a system to collect leftover paint and deliver it to paint recyclers. Significant cost-saving options may be available, however. In particular, collecting greater quantities of paint at co-located facilities (including retail stores) offers the potential of reduced per-gallon costs. However, this option comes with its own challenges. In particular, developing the business relationships to implement co-located collection at a significant level would take many years.

EXHIBIT 24: ESTIMATES OF PER-GALLON ANNUAL COLLECTION, AGGREGATION, AND TRANSPORTATION COSTS FROM METROPOLITAN AREAS AND ISOLATED CITIES

COLLECTION, AGGREGATION, PER-GALLON COST AND TRANSPORTATION FACTOR

Collection36 $1.98/gallon Aggregation37 $1.98/gallon Transportation to Processor $0.32/gallon Total $4.28/gallon

Section 3 of the report presented estimates of the quantity of leftover paint likely to be collected: 0.06, 0.11, 0.17, and 0.23 gallons per person under various scenarios corresponding to increased effectiveness over time. Applying these totals to the 270 million people located in metropolitan areas (including super-urban cities) and isolated cities (approximated by the Census Bureau’s micropolitan statistical areas) yields estimates of paint volumes collected. By combining estimates of paint collection with per-gallon cost estimates, annual system-wide cost estimates can be developed. Exhibit 25 summarizes the total annual cost estimates for this leftover paint collection infrastructure. For example, assuming a low collection rate of 0.06 gallons per person leads to a collected paint quantity of 16 million gallons in metropolitan areas and isolated cities. Multiplying 16 million gallons by a collection cost of $1.98 per gallon gives a total collection cost of $32 million in metropolitan areas and isolated cities. Similarly, the aggregation and transportation costs were derived by multiplying the collected paint quantity of 16 million gallons by $1.98 and $0.32, respectively.

36 This estimate assumes 45 percent of paint collected at co-located drop-off points, five percent collected curbside, and 50 percent collected at dedicated facilities. 37 This is the cost for metro areas and includes “milk-run” logistics to transport paint from collection points to the aggregation facility.

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EXHIBIT 25: ESTIMATES OF TOTAL ANNUAL COLLECTION, AGGREGATION, AND TRANSPORTATION COSTS

COLLECTION, AGGREGATION, AND LOW MEDIUM HIGH EXTRA HIGH TRANSPORTATION FACTOR

Gallons Collected 38 Metro Area/Isolated City 16.3 million 29.9 million 46.2 million 62.6 million Rural Areas 1.2 million 2.2 million 3.4 million 4.6 million Total Gallons Collected 17.5 million 32.1 million 49.6 million 67.2 million Collection Costs Metro Area/Isolated City39 $32 million $59 million $91 million $124 million Rural Areas40 $2 million $3 million $5 million $7 million Total Collection Costs $34 million $62 million $96 million $131 million Aggregation $35 million $64 million $98 million $133 million

Transportation to Recycler $6 million $10 million $16 million $22 million

Total41 $75 million $136 million $210 million $286 million

Note that these costs are only estimates and are dependent on numerous assumptions related to per-gallon costs to operate the infrastructure as well as expected quantities of leftover paint to be collected.

In addition, this report has noted numerous opportunities for cost savings – particularly at the point of collection but also at aggregation. Local conditions and opportunities vary considerably, and it is not possible to recommend a single method or cost structure that would apply to every community.

In addition, there are likely economies of scale that could not be captured by this relatively limited modeling exercise. Per-gallon costs that are scalable to multiple-sized collection and aggregation facilities were developed, but these costs will almost always go down for increased throughput and go up for decreased throughput.

Despite these limitations, our assessment is that the figures presented here are reasonable estimates of the costs of operating a leftover paint infrastructure in urban areas and isolated cities of the United States given the necessary simplifications and assumptions made. However, at over $4 per liquid gallon of paint collected and delivered to a processing center, the cost

38 From Exhibit 8. For modeling purposes, it was assumed that all generated leftover paint is transported to a processing facility. There was insufficient data to estimate the proportion of paint that would be diverted to reuse programs, the extent to which reuse programs would affect the quantity of usable latex paint, or the cost of reuse programs. 39 Based on collection costs of $1.98 per gallon, hypothetical value detailed in Exhibit 21. 40 Based on $1.43 per gallon 41 Figures may not add to total due to rounding.

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effectiveness of a comprehensive system to collect, process, and market recycled paint will depend heavily on the economics of processing and the final product price that can be supported by the market.

PROCESSING FACILITY

Design Costs

Designing a paint processing facility often requires the expertise of an engineering firm to design buildings, evaluate traffic flow patterns, write construction material specifications, and oversee construction contractors. In addition to the construction of the facility, there are initial expenditures for the purchase of equipment, such as forklifts, paint filtering and packaging equipment, paint can openers, conveyer belt systems, and emergency response equipment. When designing a facility, serious attention should be paid to capital investment (planning, design, built-in operating efficiencies, equipment selection, and construction or remodeling costs) in order to reduce the long-term facility operation costs.

These estimated costs are based on designs from programs with similar facilities. Costs are estimated and are based on construction figures from the R.S. Means 2005 Construction Catalog, paint industry equipment suppliers data, and industry experts42. Costs for actual construction are site dependent and can vary based on site layout, labor costs and price of materials at the time of actual site design and construction. Building costs in Exhibit 26 are 25 percent higher than normal construction costs to account for explosion-proofing of the flammables bulking room. An experienced design team working with local building officials can help coordinate the budget and facility needs while providing realistic construction estimates.

Program Staffing

Staffing estimates for the facility are based on year round operations, five-day work weeks, and one 8-hour daily shift. Salary estimates are conservative and will be dependent on the area of the country the facility is located. Facility insurance was not considered since it can vary widely around the country and should be accounted for when a facility is ready to go online.

The standard configuration for the facility requires a minimum 10 paint sorters, 2.5 processing support staff (forklift operation, removing bad paint and other materials for disposal and recycling), 3.5 staff for oil-based paint bulking operation, 3.5 staff for production (paint blending, mixing, filtering, packaging and boxing, palletizing), a laboratory technician, a plant supervisor and an administrative assistant. If demand and capacity increase, the facility can add an additional shift. The staffing estimates are configured to support one eight-hour shift for a five-day work week.

42 Curt Bailey, CB Coating Consulting and Inspection, Inc.

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EXHIBIT 26: ESTIMATED CONSTRUCTION COSTS FOR PAINT PROCESSING FACILITY

Building Component Number Unit Cost Total Cost

Warehouse Building with Office Space, Lab, Flammables Room, & Shop (22,500 square feet with concrete floor and foundation, walls, metal roof, 1 $125 per square foot $2,812,500 internal framing, windows)

Mechanical and Electrical (Plumbing, ventilation / HVAC, sprinkler system, electrical, and 1 25% of Building Costs $703,125 lighting)

Conveyers and Chutes Funnel Chutes / Butterfly Valve 12 $600 each $7,200 Roller Conveyors 4 $500 each $2,000 Circular Rotating Accumulation Table 2 $4,000 each $8,000

Second Level Room 2 $25,000 each $50,000

Plant Equipment Mechanical Paint Can Openers 3 $3,000 each $9,000 Forklifts 3 $24,000 each $72,000 High Spd Dispersers (25 HP Var Sp) 4 $24,000 each $96,000 Tanks (1,000 gallons / plumbing) 3 $5,000 each $15,000 Pumps, 2" air driven 4 $2,500 each $10,000 Fully Automated Case Erector, Packer 1 $200,000 each $200,000 Sealer and Palletizer Batch Number Coder 1 $3,500 each $3,500 1 gal can Filler 4 $19,500 each $78,000 5 gal pail filler, portable 1 $24,500 each $24,500 Can Crushers 3 $10,000 each $30,000 300 gal poly totes /valve 40 $300 each $12,000 Wire Bins, 1 yard³ 150 $150 each $22,500 Steel 55 gal DOT, OH drums 25 $50 each $1,250 Waste 100 cf 2 $3,000 each $6,000 100 CFM Air Compressor, Electric 1 $8,000 each $8,000

Laboratory Equipment Stormer KU-2 Viscosity Tester 1 $2,200 each $2,200 Wgt / Gal Cups 2 $500 each $1,000 77 Deg. F Constant Temperature Bath 1 $500 each $500 Bird Applicators, Doctor Blades 6 $500 each $3,000 Gloss & Sheet Meter 1 $5,000 each $5,000 Color Matching Computer & 1 $15,000 each $15,000 Spectrophotometer Flash Point Tester 1 $3,500 each $3,500

Total* $4,200,775 * Cost estimates based on data from the R.S. Means 2005 Construction Catalog and paint industry equipment suppliers.

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EXHIBIT 27: ESTIMATED COSTS FOR FACILITY STAFFING AND OPERATION

Expense Number Unit Cost Total Cost

Labor Paint Sorters 10 $40,500 per year $405,000 Processing Support (forklift, etc) 2.5 $40,500 per year $101,250 Oil-Based Paint Bulking 3.5 $40,500 per year $141,750 Product Production 3.5 $40,500 per year $141,750 Laboratory Technician 1 $58,000 per year $58,000 Facility Manager 1 $95,000 per year $95,000 Administrative Assistant 1 $40,500 per year $40,500

Operating Expenses Supplies* 1 $180,000 per year $180,000 Annual Training 22.5 $500 per employee $11,250 Utilities, Maintenance, Repairs 1 $100,000 per year $100,000 Laboratory Testing (Green Seal) 1 $15,000 per year $15,000 Damaged Goods 210 A $0.88 per gallon $185 Wastewater Treatment 1 $50,000 per year C $50,000 Pre-printed one-gallon cans 600,000 $0.77 per gallon D $463,500 Oil-Based Paint Disposal 200,000 $1.80 per gallon E $360,000 Unusable Latex Disposal 200,000 $1.80 per gallon E $360,000 Used Plastic Pail Disposal 1.00 $60,000 per year C $60,000

Facility Amortization 1 $373,144 per year F $373,144

Total* $2,956,329 * Supplies include drums, sorbent materials, and personal protective equipment A NPCA estimates 0.035 percent of processed paint will be damaged and require disposal. B Wally Kiccma, Hotz Environmental, personal communication 2006 C Jim Quinn, personal communication 2006 D Assumes 15% of paint sold in 1-gallon metal cans at a cost of $1.75 per gallon and 85% of paint sold in 5-gallon buckets at a cost of $0.60 per gallon. E Scott Thomas, Sherwin Williams F Assumes construction costs of $4.2 Million at 8% interest over 30 years. It is important to note these estimates are averages based on construction and salary data for 2005. Costs and salaries can vary throughout the country. The estimates should be researched further in the event or construction of a facility, and the budgeted expenses should be adjusted accordingly.

Assuming the paint facility design described in this section can process one million gallons of paint per year, the annual operating cost per gallon will be $2.55 ($2.55 million dollars in annual operating costs divided by an annual throughput of one million gallons).

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SECTION 8

CONCLUSIONS

Through an assessment of leftover paint quantities generated in the U.S., as well as data from existing HHW and paint collection programs, a nationally-coordinated paint management system, entailing the collection of leftover oil-based and latex paint, and the production and sale of consolidated latex paint, was modeled and priced. Given government and industry commitment to leftover paint management, a collection rate of up to 10 percent of paint sales can be achieved in 10 years through development of additional paint collection points, aggregation points, and organized transport to a processor.

SIGNIFICANT MODEL ASSUMPTIONS AND FINDINGS

Information and data researched for development of this model was gathered from previous reports developed for PSI, industry and government representatives currently managing paint collection and processing programs, and from other related sources such as transport companies and recycling program specialists. Key assumptions and results are summarized herein.

Leftover Paint Quantities

The quantity of leftover paint that can be collected through a nationally-coordinated paint management system will be initially low: 2.5 percent of paint sales, which translates to 0.06 gallons per person or 17.5 million gallons annually. As the system grows, perhaps within three to five years, collected paint quantities will grow to the medium collection rate: 5.0 percent of paint sales which translates to 0.11 gallons per person or 32.1 million gallons annually. Further system growth and refinement between years five and seven will result in a high level of paint that can be collected: 7.5 percent of paint sales, which translates to 0.17 gallons per person or 49.6 million gallons annually. By year 10, the system can collect as much as 10 percent of paint sales, which translates into 0.23 gallons per person or 67.2 million gallons annually.

Collection Points

The most cost-effective method of collecting leftover paint generated from metropolitan areas and isolated cities are permanent collection points and curbside collection. Approximately 2,000 collection points are required to collect a low level of paint; 5,000 to collect a medium/high level of paint; and 8,000 to collect a high/extra high level of paint. Collection from very rural areas will be through mobile collection events rather than a permanent facility. Curbside collection of paint is offered by very few communities now but could be a cost-effective method of collection.

Aggregation and Transportation

Because there are fewer than 10 paint processors in North America, most collection points will have to ship leftover paint long distances for processing. Economics and space constraints, however, will generally require an intermediate aggregation point to consolidate paint cans collected at individual collection points for cost-effective shipping to the processor. It was assumed for this study that each Metropolitan Statistical Area will require at least one

8-1 Paint Product Stewardship Initiative aggregation point, resulting in over 350 aggregation points in the U.S. Shipping from the aggregation points will be least costly in 53-foot box vans. Aggregation for metropolitan areas will occur in 24-foot box vans under a “milk run” system. Paint collected from very rural areas using mobile collection events will be transported to the nearest metropolitan area or isolated city for aggregation.

Processing Facilities

Representatives from nine of the ten existing processing facilities were interviewed for this study and all revealed excess capacity. This is mainly because the limited demand for the final product (recycled paint either at retail, commercial or export markets) is the main barrier to processing additional leftover paint (e.g., the supply). Currently, there is a need for additional paint processing capacity in the South, East, and Southeast areas of the U.S., which can support the addition of three to seven new facilities. As collection of leftover paint increases through a nationally-coordinated system, the number of additional facilities needed approaches 15, distributed throughout all regions of the U.S. except the West.

Processing Facility Design Recommendations

A conceptual design of a paint processing facility was developed for this study to process 600,000 gallons of latex paint per year. Some facilities may choose to process oil-based paints as well, but the likely market for the oil-based paint will be fuel blends for cement kilns.

Capital costs for the facility are estimated to be $4.2 million with annual operating expenses of $2.96 million (including labor, supplies, utilities/maintenance, laboratory testing, disposal costs, and facility amortization).

PRELIMINARY COSTS

Based on the model described above and in Sections 2 through 6, costs were developed for each aspect of the system: collection, aggregation, and transport to a processing facility, and processing facility construction and operation. Cost elements are summarized below

Collection

The relative mix of leftover paint collection options will depend heavily on local conditions and a balance of cost and convenience. Assuming that half of all leftover paint generated in metropolitan areas and isolated cities will be collected at dedicated facilities at a rate of $2.48 per gallon, 45 percent collected at co-located drop-off points at a rate of $1.40 per gallon, and five percent collected curbside at a rate of $2.10 per gallon, the overall collection system from metropolitan areas and isolated cities could cost approximately $1.98 per gallon.

Mobile collection programs serving very rural areas are expected to cost $1.43 per gallon. This estimate is for collection and transport to the nearest metropolitan area or isolated city and does not include the cost of establishing permanent collection points or curbside collection. In other words, collection from very rural areas is $1.43 per gallon more than the cost to collect leftover paint in metropolitan areas or in isolated cities.

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Aggregation

The costs of aggregation are comprised of “milk-run” transportation costs to collect paint from collection points, operation of an aggregation facility (at least one for each metropolitan area), labor at the aggregation facility, and materials for storing collected paint. Aggregation costs are estimated to be $1.98 per gallon.

Transportation to Processor

Transportation to a processing center will be least costly if performed using 53-foot box vans. GIS analysis was used to estimate distances from each aggregation facility to the nearest processing facility and the overall weighted average across all metropolitan areas was $0.32 per gallon.

Processing Facility

A processing facility designed to process 600,000 gallons of latex paint (accepting one million gallons of paint including oil-based paint and unusable latex) was priced at $4.2 million. Annual operational costs are expected to be approximately $2.96 million. The facility could be upgraded to process up to 1.2 million gallons of latex paint (accepting two million gallons of paint including oil-based paint and unusable latex) by running a second shift. Annual operational costs will increase with an additional shift.

Total System Costs

Collection, aggregation, and transportation for a nationally-coordinated paint management system is expected to start at $72 million collecting a low level of paint (0.06 gallons per person). Extra high collection rates (0.23 gallons per person), where the system should be in ten years, is estimated to be $289 million annually. This total cost does not include the cost of marketing, which could be as high as 25 percent of the retail sale price, for things such as warehousing, transport to retail, retail shelf space, and product promotion.

SCHEDULE

The system as described in this report will require a ramping up of collection points, aggregation points, long-haul transport systems, and processing capacity over time. Current collection of leftover paint in the U.S. (mostly through the HHW system) is believed to be at a very low rate now. There are some programs in the U.S. that have achieved a low to medium collection rate; however, on a national basis, the U.S. in its entirety is likely at a very low rate. Upon implementation of a nationally-coordinated system, it is envisioned that approximately three years of ramping up will be required to bring leftover paint collection to the Low level: three more years to a medium level; three more years to a high level, and three more years to an extra high level. Using this schedule, costs related to paint sales are explored in the following subsection. Exhibit 28 displays the paint collection according to the anticipated schedule.

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EXHIBIT 28: PAINT COLLECTION QUANTITIES OVER TIME

80 Extra High

60 High

40 Medium Low

(milliongallons) COLLECTED PAINT PAINT COLLECTED 0 1 2 3 4 5 6 7 8 9 10 11 12 YEAR

COSTS RELATED TO PAINT SALES

Exhibit 29 provides the best estimates of the per-gallon costs needed to operate a nationally coordinated infrastructure for collecting leftover paint. These are planning-level, order-of- magnitude costs that represent the best estimates given available information. In particular, the variability in each of these costs is potentially significant.

EXHIBIT 29: TOTAL ANNUAL SYSTEM COSTS PER GALLON

SYSTEM FACTOR PER-GALLON COSTS

Collection43 $1.98 Aggregation44 $1.98 Transportation to Recycler $0.32 Processing45 $2.96 Administration46 $1.35 Total $8.59

43 This estimate assumes 45% of paint collected at co-located drop-off points, 5% collected curbside, and 50% collected at dedicated facilities. 44 Includes “milk-run” logistics to transport paint from collection points to the aggregation facility 45 Processing cost is based on facility operating costs presented in Exhibit 26 of $2.96 million per year divided by an annual throughput of one million gallons.. 46 Administration cost is based on cost estimates of a third-party organization in Washington and Oregon to coordinate electronics recycling (Walter Alcorn, Alcorn Consulting, 2006). Estimated costs for the first four years of the organization were $6.3 million to coordinate the recycling of 53 million pounds of material, for an average of $0.12 per pound. For paint, this would translate into $1.35 per liquid gallon (assuming a one-gallon can weighs 0.5 pounds and cans are 40% full on average). This cost included estimates of rent, information management, telecommunications, board meetings, education and outreach, equipment and supplies, and staff of 7 including an executive director, contracts manager, accounts payable/receivable, office manager, outreach coordinator, and two support staff.

8-4 Paint Product Stewardship Initiative

As presented in Exhibit 29, the cost to collect, aggregate, transport, and process, paint in addition to providing system administration is approximately $8.59 per gallon. After unusable latex and oil-based paints are sorted out and sent for disposal or fuel markets, it is expected that the remaining quantity of recyclable latex will be approximately 60 percent of what is collected.

CHANGING CONDITIONS TO SUPPORT THE NATIONALLY-COORDINATED SYSTEM

Exhibit 30 provides a rough estimate of possible performance and costs associated with a nationally-coordinated system. The low collection rates column would reflect a system that exists in a few parts of the U.S. and Canada but would need to be developed in much of the U.S. Even with that estimate it is reasonable to project that a well run system could produce cost savings. This could be accomplished through lower costs or higher revenues or a combination of those two. The intent of these scenarios is to determine the price that recycled paint would need to be sold at for the entire costs of its production and marketing to be covered. While the current sale price of recycled paint has been less than $10, the higher pricing scenarios are included only to be instructive as to the price point that needs to be reached for the sale of recycled paint to raise sufficient revenue to finance the entire leftover paint management infrastructure.

Reuse Programs

For modeling purposes, it was assumed that all generated leftover paint is transported to a processing facility. There was insufficient data to estimate the proportion of paint that would be diverted to reuse programs, the extent to which reuse programs would affect the quantity of usable latex paint, or the cost of reuse programs. Reuse programs would likely reduce total system costs. Additionally, reuse programs would generate revenue and this was not incorporated into the model.

Sensitivity Analysis

As can be seen in Exhibit 30, an additional cost of $0.23 per gallon would be necessary to cover system costs of collection, aggregation, transport, and processing the leftover paint quantities for a low collection rate (assuming a sale price of $0). The cost per gallon under this scenario increases to $0.92 per gallon for an extra high collection rate. On the other hand, the system could show a profit if a sale price of $20 per gallon could be achieved.

The costs presented in Exhibit 30 are sensitive to the $8.59 per gallon costs of the infrastructure which includes collection, aggregation, transport, processing, and administrative costs. Three cost factors were analyzed for their impact on the costs presented in Exhibit 30: collection method, administrative costs, and processing costs.

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EXHIBIT 30: SYSTEM COSTS COMPARED TO VIRGIN PAINT SALES

COLLECTION RATE METRIC LOW MEDIUM HIGH EXTRA HIGH Gallons Collected47 17.5 million 32.1 million 49.6 million 67.2 million System Costs Collect/Aggregate/Transport48 $75 million $136 million $210 million $286 million Processing49 $52 million $95 million $147 million $199 million Administration50 $24 million $43 million $67 million $91 million Total System Costs $151 million $274 million $424 million $576 million Latex Paint Gallons Consolidated51 10.5 million 19.3 million 29.8 million 40.3 million Sale Price52 $0 per gallon $ 0 $ 0 $ 0 $ 0 $5 per gallon $53 million $97 million $149 million $202 million $10 per gallon $105 million $193 million $298 million $403 million $15 per gallon $158 million $290 million $447 million $605 million $20 per gallon $210 million $386 million $596 million $806 million Marketing53 Assuming $0/gallon sale price $ 0 $ 0 $ 0 $ 0 Assuming $5/gallon sale price $13 million $24 million $37 million $50 million Assuming $10/gallon sale price $26 million $48 million $75 million $101 million Assuming $15/gallon sale price $39 million $72 million $112 million $151 million Assuming $20/gallon sale price $53 million $97 million $149 million $202 million Net Cost (System Costs – (Sale Price - Marketing) ) Assuming $0/gallon sale price $151 million $274 million $424 million $576 million Assuming $5/gallon sale price $112 million $202 million $312 million $425 million Assuming $10/gallon sale price $72 million $129 million $201 million $273 million Assuming $15/gallon sale price $33 million $57 million $89 million $123 million Assuming $20/gallon sale price -$7 million -$16 million -$23 million -$29 million Virgin Paint Gallons Sold54 637 million 637 million 637 million 637 million Net Cost per Gallon Sold55 Assuming $0/gallon sale price $0.24 $0.43 $0.67 $0.90 Assuming $5/gallon sale price $0.18 $0.32 $0.49 $0.67 Assuming $10/gallon sale price $0.11 $0.20 $0.31 $0.43 Assuming $15/gallon sale price $0.05 $0.09 $0.14 $0.19 Assuming $20/gallon sale price -$0.01 -$0.02 -$0.04 -$0.04

47 From Exhibit 8 48 From Exhibit 25 49 Gallons collected multiplied by processing unit cost ($2.96 per gallon, from Exhibit 29) 50 Gallons collected multiplied by administration unit cost ($1.35 per gallon, from Exhibit 29) 51 Latex paint packaged is assumed to be 60 percent of paint collected: the remaining portion after unusable latex and oil-based paints have been disposed or sent to fuel markets. 52 Sale price of consolidated latex paint 53 Assumes marketing costs are 25 percent of the sale price 54 Gallons of virgin paint sold from 2000 estimate of 637 million gallons 55 Net costs (system costs minus revenue) divided by Virgin Paint Gallons Sold

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Collection Methods--

Exhibit 21 presents an overall collection cost based on assumptions of the collection method, namely 50 percent dedicated facilities, 45 percent co-located drop-offs, and five percent curbside collection. A weighted average of these costs is $1.98.

The current method of collecting leftover paint quantities is primarily HHW facilities. By assuming that the low collection rate will be more like the current method, specifically that paint collection will be 90 percent dedicated facilities, 10 percent co-located drop-offs, and zero percent curbside collection, the cost of collection increases from $1.98 to $2.37 per gallon. This increases the overall system cost from $8.59 to $8.98 per gallon. This in turn will increase the net cost per gallon sold one cent for the low collection rate up to four cents for the extra high collection rate.

A similar decrease is seen when assuming a more developed collection system will consist of 10 percent dedicated facilities, 85 percent co-located drop-offs, and five percent curbside collection. The cost of collection decreases from $1.98 to $1.54 per gallon. This decreases the overall system cost from $8.59 to $8.15 per gallon. This in turn will decrease the net cost per gallon sold by one cent for the low collection rate up to five cents for the extra high collection rate.

Administrative Costs--

Administrative costs presented in Exhibit 29 reflect an administration fee of $1.35 per gallon, which is that realized by the electronics recycling in Washington and Oregon. If it can be assumed that a mature system will need half that cost, or $0.70 per gallon, the system cost will decrease to $$8.59 from $7.94 per gallon. This in turn will decrease the net cost per gallon sold by two cents for the low collection rate up to seven cents for the high collection rate.

Processing Costs--

Processing costs presented in Exhibit 27 reflect “drum-rate” disposal costs for unusable latex and oil-based paint of $1.80 per gallon. If the processing facility could utilize bulk disposal rates, there could be a significant savings in processing costs. Bulk disposal rates are approximately $0.75 per gallon. This could decrease processing costs from $2.96 to $2.56. Additionally, processing costs presented in Exhibit 27 reflect a leftover paint collection composition of 80 percent latex to 20 percent oil-based. It is believed that oil-based paint could be as high as 40 percent of leftover paint, thereby making the ratio 60:40. It is assumed that two less staff would be required under this scenario to process the reduced proportion of latex paint and the increased proportion of oil-based paint (since oil-based paint is simply consolidated for fuels markets). Additionally, the disposal costs and supplies were adjusted to reflect higher disposal of oil-based paint and lower supplies for processing latex. The resulting processing fee is decreased from $2.56 (for bulk disposal) to $2.46 per gallon which decreases the system cost from $8.59 to $8.09 per gallon. This in turn will decrease the net cost per gallon sold by one cent for the low collection rate up to five cents for the high collection rate.

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Overall Sensitivity--

Exhibit 31 summarizes the cost alternatives described above on the overall base cost to collect, aggregate, transport, process, and administer a nationally-coordinated leftover paint management system. Specific assumptions and calculations related to the sensitivity analysis are presented in Appendix C.

EXHIBIT 31: ALTERNATIVE SYSTEM COSTS

ALTERNATIVES SYSTEM ELEMENT BASE COST HIGH LOW

Collection $1.98 $2.37 $1.54 Aggregation $1.98 $1.98 $1.98 Transportation $0.32 $0.32 $0.32 Subtotal $4.28 $4.67 $3.84 Processing $2.96 $2.96 $2.46 Administration $1.35 $1.35 $0.70 TOTAL $8.59 $8.98 $7.00 PERCENT CHANGE 4.6% -18.5%

Reducing Costs

First looking at system costs, Exhibit 29 provides the breakdown of system costs by infrastructure component. The following suggests how these costs could be reduced by the design of the system:

 Collection: Provide system incentives to minimize reliance on dedicated facilities and maximized collection by using more existing curbside recycling programs and co-located collection sites.

 Aggregation: Negotiate national or large regional agreements with transportation companies to get quantity discounts on shipping rates. Provide incentives for use of backhaul transporters.

 Transportation to Recycler: Negotiate national or large regional agreements with transportation companies to get quantity discounts on shipping rates.

 Processing: Assume that actual proportion of latex to oil-based ratios will be similar to the current proportions collected now at HHW collections (34 to 44 percent oil-based) gradually approaching 20 percent oil-based. This will reduce the need for new capacity and new facilities as it is assumed that the latex recycling process is the limiting

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throughput factor at recycling facilities. This will reduce processing operating costs as well as capital expenditures over time.

 Administration: This costs was based on a two state system (Oregon and Washington) required to administer a product stewardship electronics recycling system. To ramp up to a national system there would certainly be significant administrative cost savings.

Increasing Revenues

On the revenue side, the fundamental question is how much can recycled paint actually command in the marketplace. This is highly variable depending on who you talk to and is probably a moving target as just this year there is now a quality based recycled paint standard. The only clear reality today is that there needs to be more market demand for recycled content paint to support the system. Some believe that if there were a significant market demand for paint at a reasonable average price point that there would be little resistance to the creation and broad support for a nationally-coordinated leftover paint system. If, for instance, the average retail price for recycled content paint were actually $20 per gallon and it were able to be produced at wholesale for $5 per gallon, due to implementation of system cost savings, the arguments against moving ahead would largely vanish.

Marketing Challenges and Opportunities

To increase the demand for recycled content paint has well known marketing challenges. These challenges include:

 Limits on the availability of certain high sheen paints,  Color matching processes are complicated by use of a more variable feedstock,  Availability of supply of colors and finishes may be limited,  Retailer may resist adding a new product line,  Prior experience with low-quality recycled content paint in the past need to be overcome,  Training sales force and providing incentives to push recycled paint may be resisted, and  Marketing a new product line will require start-up and ongoing resources.

Opportunities include:

 Tapping the emerging green building market and access to LEED points,  Use newly adopted MPI/Greenseal paint quality standard to assuage paint quality issues as well as fill the white/off-white market gap in the recycled paint market,  Creating a new brand and new profitable partnerships with customers, recyclers, municipalities,  A national campaign that enhances the reputation of the paint industry and its partners as environmentally conscientious, responsible, and responsive to customers needs to manage leftover paint

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A Future Possibility

To make an economically sustainable future for leftover paint management that avoids long-term subsidies, an increased demand for recycled content paint must be created, and capital and operating costs of the infrastructure must be minimized. The current condition of excess recycled paint supply does not command sufficient revenues to pull paint through the system. Increasing demand for recycled paint would tend to eliminate the excess supply and command revenues sufficient to cover the all the needs of the national system as well as provide reasonable profits.

The work of other PPSI projects in and outside of the MOU are setting the stage to increase the demand for recycled paint. These projects include: establishment of public entity purchasing practices, mainstreaming green building practices to use recycled content paint (using the new MPI/Greenseal standard), and creating market demand in the private sector. All of these efforts help to create a situation that is ripe for leveraging change in demand and revenue.

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APPENDIX A

CURBSIDE AND DOOR-TO-DOOR COLLECTION

Appendix A Paint Product Stewardship Initiative

APPENDIX A CURBSIDE AND DOOR-TO-DOOR COLLECTION

The consultant team collected a limited amount of information about existing curbside and door- to-door collection programs. The PSI Consultant continued the search for unique collection methods by sending e-mails out on various waste and HHW list serves and concluded that the only known alternative collection methods in existence are the curbside collection programs in Marion County, Oregon and Alameda County, California. Further information was collected from these programs and this Appendix presents that information.

Curbside Collection

Marion County, Oregon

Marion County, Oregon, operates a curbside recycling program for latex paint that they deem successful. Recycling customers are allowed to place two cans of latex paint out with their regular recycling each week. Private haulers pick up the latex along with the regular recycling, and store it at the transfer station. Approximately twice a month, crews from the Marion County Juvenile Department’s Alternative Programs and a supervisor pick up the collected paint from the transfer stations, and empty buckets from local food processors. The crews clean the buckets, screen the paint, and mix it in a large vat, producing a grey or sometimes butterscotch paint. The paint is offered free on a first-come, first served basis at the Salem-Keizer Recycling and Transfer Station, although paint for graffiti abatement and community-service projects can be reserved (Marion County Public Works, 2005a).

In 2004, the Marion County program recycled 15,228 gallons, or 164,440 pounds, of latex paint. Haulers collected 260,260 pounds of latex paint, including unusable paint, garbage erroneously mixed in with the paint, and empty cans (Marion County Public Works, 2005b). The population of Marion County is approximately 290,000 (Payne, 2005). The table below combines these figures to yield effectiveness rates for the Marion County program.

Table 1: Collection Quantities of Marion County, OR, Curbside Collection Program, 2004

Paint Total Per Person

Gallons Recycled 15,228 0.05

Pounds Recycled 164,440 0.57

Pounds Collected 260,260 0.90

The Marion County program’s per-person collection rates compare favorably with that of the Low scenario developed for this project.

Marion County has been able to run this program at a relatively low cost. The County has not tracked the cost of actual collection of the paint, and incurred no equipment costs for collection because the recycling trucks already had separate compartments that could be used for paint.

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Alameda County, California

The Castro Valley Sanitation District in Alameda County, California serves nearly 15,000 single- family households with weekly collection of garbage and recyclables in a split truck that is operated by a contracted hauler, Waste Management. Residents set out paint next to their bins, and the haulers place the paint cans in the cab of the truck. Back at the Davis Street Transfer station, the hauler decants the collected paint into 55-gallon drums that are delivered to a relatively small local paint manufacturer, Stiles Paint in Hayward, California. The hauler decants the collected paint into 55-gallon drums, which are then picked up by Stiles Paint.

Neither Castro Valley Sanitation District nor the hauler has performed any cost analysis of the paint recycling service – rather, the service was simply built-in to the original franchise agreement. However, the hauler was able to provide some limited information about costs of processing the paint. Stiles Paint charges $95 per trip to pick up drums of paint, regardless of the number of drums collected at each trip. Waste Management then has the opportunity to buy 5- gallon buckets of re-processed paint from Stiles at $13.75 each.

The following table displays the number of latex paint cans collected in the previous several years.

Table 2: Collection Quantities of Castro Valley Sanitation District Curbside Paint Recycling, 1997-2005

56 Estimated Cans Per Year Cans of Latex Paint Household 1997 2093 0.14 1998 1632 0.11 1999 920 0.06 2000 2574 0.17 2001 2731 0.18 2002 1934 0.13 2003 1423 0.09 2004 953 0.06 2005 663 0.04 Yearly average 1658 0.11

56 These figures are approximate and were taken from a poor quality fax.

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Door-to-Door Collection

Several jurisdictions throughout the country offer door-to-door collection of HHW (including paint) on an on-call basis for customers that require extra assistance and service, such as the elderly or disabled. One company that provides these services in several states is Curbside, Inc.

Curbside, Inc. is a private company that formed in 1995 to collect used motor oil in California. In the past ten years, the company has expanded its programs to collect all types of household hazardous waste, including electronic waste, and now has programs in Colorado, Illinois, Iowa, New Jersey, Pennsylvania, and Texas, in addition to those in California. Although their name is Curbside, their program is door-to-door collection: customers phone them to set up a pick-up appointment. Typically, local governments hire them to implement pick-up programs in their jurisdictions.

Latex paint is Curbside’s largest waste stream. On average, Curbside picks up 100 pounds of waste per household, and charges about $105 per household per pick-up. The average household disposes of 15 gallons of paint. Curbside also collects between 500 and 1,000 gallons of paint weekly from hardware stores in San Francisco.

The company brings the paint to a warehouse and packs it for shipping to its facility in Denver, Colorado. Once there, the paint is crushed, filtered twice, and turned into a sprayable paint used for foundation coatings. It is not separated by color. They have additional capacity at their plant, but have been looking for other ways to handle paint (Anderson, 2005). However, they are not a processor on the same scale of the major processors surveyed in this study or included on the maps.

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APPENDIX B FURTHER DETAIL ON PROCESSOR SURVEY AND FACILITIES NEEDED

Appendix B Paint Product Stewardship Initiative

APPENDIX B FURTHER DETAIL ON PROCESSOR SURVEY AND FACILITIES NEEDED

To estimate existing processing capacity and understand how and where new processing facilities may be needed, our team:

 Conducted a survey of existing processing facilities. Notes from each interview can be found below.

 Used results of these interviews, as well as paint collection estimates, to estimate how many and where new facilities may be needed.

 Following is a discussion of the methodology and results for estimating where new processing facilities would be needed.

 Processing Facility Calculations

 To estimate how many processing facilities were needed, our team:

 Estimated how much paint would be collected in each state under the low, medium, high, and extra high scenarios. We reduced estimates by 20% to account for paint reused via swap at the point of collection.

 Used the survey of existing processors to estimate current processing capacity.

 Aggregated states into regions based on proximity to existing processors and paint quantities projected to be collected.

 Calculated how much new, incremental capacity would be needed in each region by subtracting projected collection from existing capacity.

 Assigned facilities at the rate of one facility per each 6,000,000 gallons of needed capacity.

The following table details these calculations.

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TABLE 3. PROCESSING FACILITY CALCULATIONS

Processor Analysis Assumptions:

Leftover Paint Collected (minus 20% for Reuse Programs) Existing Capacity Difference and Facilities Needed Low Medium High Ex High Capacity Low Medium High Ex High State Population 0.06 0.11 0.17 0.23

California (2) 35,893,799 1,722,902 3,158,654 4,881,557 6,604,459 Arizona 5,743,834 275,704 505,457 781,161 1,056,865 Nevada 2,334,771 112,069 205,460 317,529 429,598 Utah 2,389,039 114,674 210,235 324,909 439,583 Colorado 4,601,403 220,867 404,923 625,791 846,658 WEST 50,962,846 2,446,217 4,484,730 6,930,947 9,377,164 9,500,000 None None None None

Washington 6,203,788 297,782 545,933 843,715 1,141,497 Oregon (3) 3,594,586 172,540 316,324 488,864 661,404 Idaho 1,393,262 66,877 122,607 189,484 256,360 Montana 926,865 44,490 81,564 126,054 170,543 Wyoming 506,529 24,313 44,575 68,888 93,201 NORTHWEST 12,625,030 606,001 1,111,003 1,717,004 2,323,006 1,600,000 None None 117,004 723,006 0-1 0-1 Minnesota (4) 5,100,958 244,846 448,884 693,730 938,576 North Dakota 634,366 30,450 55,824 86,274 116,723 Nebraska 1,747,214 83,866 153,755 237,621 321,487 South Dakota 770,883 37,002 67,838 104,840 141,842 Iowa 2,954,451 141,814 259,992 401,805 543,619 Wisconsin 5,509,026 264,433 484,794 749,228 1,013,661 Michigan 10,112,620 485,406 889,911 1,375,316 1,860,722 Illinois 12,713,634 610,254 1,118,800 1,729,054 2,339,309 Indiana 6,237,569 299,403 548,906 848,309 1,147,713 Ohio* 11,459,011 550,033 1,008,393 1,558,425 2,108,458 Kentucky 4,145,922 199,004 364,841 563,845 762,850 West Virginia 1,815,354 87,137 159,751 246,888 334,025 MIDWEST 63,201,008 3,033,648 5,561,689 8,595,337 11,628,985 9,000,000 None None None 2,628,985 1-3 New York (6) 19,227,088 922,900 1,691,984 2,614,884 3,537,784 Maine 1,317,253 63,228 115,918 179,146 242,375 New Hampshire 1,299,500 62,376 114,356 176,732 239,108 Vermont 621,394 29,827 54,683 84,510 114,336 Connecticut 3,503,604 168,173 308,317 476,490 644,663 NORTHEAST 25,968,839 1,246,504 2,285,258 3,531,762 4,778,266 3,000,000 None None 531,762 1,778,266 0-1 1-2

Texas 22,490,022 1,079,521 1,979,122 3,058,643 4,138,164 New Mexico 1,903,289 91,358 167,489 258,847 350,205 Oklahoma 3,523,553 169,131 310,073 479,203 648,334 Arkansas 2,752,629 132,126 242,231 374,358 506,484 Kansas 2,735,502 131,304 240,724 372,028 503,332 Louisiana 4,515,770 216,757 397,388 614,145 830,902 SOUTH 37,920,765 1,820,197 3,337,027 5,157,224 6,977,421 - 1,820,197 3,337,027 5,157,224 6,977,421 1-2 1-4 1-6 2-7 Alabama 4,530,182 217,449 398,656 616,105 833,553 Florida 17,397,161 835,064 1,530,950 2,366,014 3,201,078 Georgia 8,829,383 423,810 776,986 1,200,796 1,624,606 Mississippi 2,902,966 139,342 255,461 394,803 534,146 South Carolina 4,198,068 201,507 369,430 570,937 772,445 Tennessee 5,900,962 283,246 519,285 802,531 1,085,777 Missouri 5,754,618 276,222 506,406 782,628 1,058,850 North Carolina 8,541,221 409,979 751,627 1,161,606 1,571,585 SOUTHEAST 58,054,561 2,786,619 5,108,801 7,895,420 10,682,039 - 2,786,619 5,108,801 7,895,420 10,682,039 1-3 1-6 2-8 2-11 Delaware 830,364 39,857 73,072 112,930 152,787 District of Columbia 553,523 26,569 48,710 75,279 101,848 Maryland 5,558,058 266,787 489,109 755,896 1,022,683 Massachusetts 6,416,505 307,992 564,652 872,645 1,180,637 New Jersey 8,698,879 417,546 765,501 1,183,048 1,600,594 Pennsylvania 12,406,292 595,502 1,091,754 1,687,256 2,282,758 Rhode Island 1,080,632 51,870 95,096 146,966 198,836 Virginia 7,459,827 358,072 656,465 1,014,536 1,372,608 EAST 43,004,080 2,064,196 3,784,359 5,848,555 7,912,751 - 2,064,196 3,784,359 5,848,555 7,912,751 1-3 1-4 1-6 2-8 (1) Alaska and Hawaii have been excluded from this analysis with under 200K gallons to process per year.

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Processor Survey Notes

Following are notes from interviews with the following processors:

 Mark Kurschner, Product Care

 Jim Quinn, Metro (Portland)

 Pamela McAuley, Hotz Environmental

 Fred Bauer, Amazon Environmental

 Jerry Noel, Visions Recycling

 George Portelance, Eco-Peinture

 Walter LeClerc, Kelly Moore

Mark Kurschner, President, Product Care May 31, 2005

Collection points--

Product Care does have collection points. They subcontract with a depot system both at HHW (called municipal sites) and a combination of community depots (both true community areas, such as fire halls, etc., and also at bottle depots that are generated through bottle recycling programs).

Forty percent are municipal clients; 60% are private.

The concentration of paint collected is in major urban areas (20% of the urban depots collect more than half the paint).

All information at collection points is standardized so employees are consistent both in communicating with consumer and in sorting paint. There is also a list of allowed and non- program items.

Consumers struggle with certain “rejected” items.

Liquid and aerosol are separated (into a special bin), and other forms of HHW (solvents, etc.) are collected.

Other collection stats:

Collect 0.6-0.7 drums per bin (33-39 gallons)

Supply bins are 1 cubic yard, leakproof, etc.

B-3 Paint Product Stewardship Initiative

Aggregation/consolidation information--

Product Care has four points: Okanagan, Vancouver, Prince George, and Surrey. Bins are collected at each of the four major points and then consolidated in Surrey. Full loads and full trailers are collected every time to save on transportation costs. Aggregation locations selected in part by where transportation service vendors were located and in part based on population.

Revenue/cost information:

Pay both depot systems; subtract non-program materials from total amount paid.

Urban transportation costs of $10-15 per bin; rural approx $100 per bin.

Other information:

Currently Product Care is looking to grow its business to serve the whole province. They are reviewing whether to continue to process in Surrey or to create a new bulk facility in another location — basically, they will be looking at transportation costs over time versus capital expenses on a new facility. According to Mark Kurschner, the process and Product Care specifically are less efficient when not serving the entire province.

Product Care also runs a program in Nova Scotia where there was an existing depot system that they had to use (similar to the bottle collection/ “private system” for the CA program).

Jim Quinn, Metro May 31, 2005

Collection points:

Metro separates latex from other types of paint. There are four different collection points which serve approximately 50,000 customers per year (2.5-3 gallons per customer = 150,000 gallons collected):

 Two permanent facilities in concentrated urban areas (80% of customers, or approximately 40,000 people, come to the permanent locations).

 A temporary event (what we call a “collection event”) is held every weekend -- approximately 35 per year in major urban areas (serving approximately 10,000 customers).

 Paint stores (nominal).

 Business collection program (also nominal).

Additional collection is a growing number of county HHW programs who pay Metro to process their collected paint. Pay a small fee (very competitive) and Metro’s highest recycle rate is an additional benefit. This service piece is approximately 130K gallons of paint, nearly half their processing total of 280K.

B-4 Paint Product Stewardship Initiative

Processing:

 Currently process 280,000 gallons of paint

 75% of paint intended for recycling goes into the final product

 Created a stand-alone processing facility a few miles from the permanent collection sites

 Outsource contractor to process unrecyclable latex paint (Metro used to handle this, but began outsourcing it when they relocated their operations). Hardened latex is disposed in trash dumpster.

 In 1992, they had 30,000 gallons. In 1999, they created a new facility to process 99,000 gallons -- somewhere in between came the “tipping point” that persuaded them to generate their own facility for processing.

Transportation:

The processing facility is 5 miles and 20 miles, respectively, from the two permanent sites Temporary events are still within the metro area, with approximately 45 minutes maximum driving time to the processing facility once it is collected. Costs include gas, repairs, etc. (however, this number excludes labor, capital expense, and depreciation), and account for only $12,000 of the annual budget of $884,000 (or just over 1%). Metro owns its transportation trucks.

Recycled paint:

Notably, 74% of the revenue collected from Metro’s paint facility comes from the sale of recycled paint. Metro produces, markets, and sells paint to the end user. They have invested heavily in local marketing, etc. over the years in order to become well-known in the areas where their recycled paint outlets sell. Their consumers are motivated by low price-point, not “recycling” per se.

They do not reuse latex, but they do reuse a small amount of oil based. They give a fraction away to well-vetted non-profit organizations.

The process and demand for white paint is a barrier to relationships with big retailers (Fred Meyer), and the price point will be affected by the retail mark-up. This makes the paint only marginally more attractive to buyers.

Hotz Environmental, Pamela McAuley June 6, 2005

Collection points:

Hotz processes paint transported by contractors, and also collects paint using three methods:

 Bids to collect from municipalities (dumps, etc.)

B-5 Paint Product Stewardship Initiative

 Depots staffed by Hotz at landfills, works yards, etc.

 Collection events through mobile units (approximately 1,500 cans per day—Saturday collection events)

Aggregation points:

All aggregation events and points are driven by RFP—generally in urban areas but not proactively determined by Hotz.

Processing:

All the paint is separated from other HHW products and “bulked” (aggregated) at one facility.

Hotz produces a half-million gallons of recycled paint per year. The factory works in three shifts (but not all of them are for latex processing).

Supply will determine if they want to invest to create more capacity or to create a satellite facility for additional capacity.

Costs:

Transportation is not included in every scenario (since all the U.S. suppliers contract out the transportation).

The processing cost is $160 per cubic yard box (sells at under $5 per gallon).

Paint production:

Hotz does not sell to retailers in the U.S. because they are not willing to undercut their own prices to sell recycled paint. They do sell paint to Asia.

Even with shipping costs, they still make a good margin.

Standard ratio of white/cream to other colors is okay with buyers since they can offer a wider selection of colors and much higher quality.

They do sell to commercial clients (contractors building condos, etc.).

Reuse:

They offer a small reuse program, if the paint can be sorted on site (for example, at their depots) and if it is a full, never used can.

Supply/demand factors:

Due to their international relationships and the high-quality of paint produced, Hotz has plenty of demand for their recycled paints. The barrier to growth is actually the supply -- often

B-6 Paint Product Stewardship Initiative municipalities do not advertise collection events (for example) because they can not afford to compensate Hotz to process all the paint received.

Amazon Environmental, Fred Bauer June 6, 2005

Amazon Environmental processes only latex, waterborne substances (no oil, etc.). They have no involvement in the collection portion of the recycling process. Major contractors (approximately eight) deliver quart cans to their four facilities, where they roll off, separate, and bulk (aggregate) the paint.

They have two facilities in Southern California (which does 50% of processing), one facility in Minnesota, and one facility in Ohio. The location of the plants is based on supply of paint (or the demand of the collectors, aggressive state plans, and industrial generators). The Ohio plant predominantly has paint spray booths (for automobiles, for example), not HHW-driven.

At the facilities they direct the paint to coating (where it becomes retail paint) or to cement additives.

Paint is sold directly to municipalities and contractors. Also do MTO for prisons and municipalities, and have partnerships with retailers to do private labels (including Dunn Edwards, a $400,000 company that carries two recycled colors).

The barrier is demand for final paint product -- it is a chore to develop a market for the paint.

Their key competitive advantage is that they take all types of paint. There is no sorting, sifting, back-charging, etc. Sour paint goes to the cement additives process.

The cement additives portion is approximately 50% of their business. The paint goes into kilns before it becomes concrete. They have three patents on their processes. The challenge in growing this business is that each cement kiln customers (they serve about 80 in North America alone) has a different process that must be adhered to; i.e., there is no uniformity in the process.

Jerry Noel, Visions Recycling June 7, 2005

Visions Recycling sorts, bulks, distributes, and sells retail (but their customers are really municipalities and commercial).

Collection:

The paint is collected by contractors and then delivered. Two counties deliver “loose pack” (bulked in original cans/packaging). In 2004, they collected 3,000 tons; 65% goes back on the market.

B-7 Paint Product Stewardship Initiative

Processing/product:

Visions bulks at one facility, and does not have trouble with “sour” paint for production. They add virgin ingredients (blends, etc.). They have worked for several years on quality production of recycled paint.

Cost:

The transportation cost is minimal either because it is contracted by the HHW sites or because it is collected at facility (next to the processing facility).

The higher labor costs to produce a recycled product make margins tight, since the price of paint to the consumer must be much cheaper.

Eco-Peinture, Georges Portelance June 7, 2005

Eco-Peinture is involved in all phases of the program, from collection to retail. Éco-peinture is a non-profit organization created by the paint industry in the province of Quebec to solve the recycled paint problem—they built the program.

Collection:

Permanent collection at municipal HHW sites—approx 285 perm sites both on the fringe of urban populations and in eco centers. Generates 22% of collection.

Community events—1-2x per year at roughly 200 sites generates approximately 22% of collection.

Retail locations—300 paint stores—collect approx 39%.

Montreal is its own category at 15%.

Processing/product:

Sort on site from original container—one processing facility. Produce 16 different colors, good quality.

Running at approx 70% capacity—could increase to 100% with an extra shift but currently the supply of paint and the demand for product sold is in balance

Recycled paint represents less than 1% of paint sold in the province of Québec

Cost:

Transportation cost averages $0.25 per kilo (average mileage model works). There is no population formula to determine the locations -- the municipalities decide to have collection events and, in many cases, contract for the transportation (which Eco-Peinture pays for)

B-8 Paint Product Stewardship Initiative

Revenue:

Program is run at no cost to suppliers—consumer of paint at retail location pays a $0.25 “processing fee” every time they buy a can of paint.

End product sold through 3-4 different retailers Price point to consumer is slightly less—depends on retail mark-up Also sell to export market.

Province targets/ Eco assumptions:

The province estimates that 7% of all paint sold is unused. Eco captures 3.5% of the total paint sold (or 50% of all unused paint). Province has given a target of 75% collection rate for the coming years. In order to achieve this, Eco will raise awareness through marketing. They have a market to sell the paint they produce (there is a demand for the final product) and they believe that the collection points are sufficient.

There are no reuse opportunities.

Kelly Moore, Walter LeClerc June 7, 2005

Kelly Moore sold 350,000 gallons of recycled paint in 2001 and were the largest volume recycler at that time (primarily in California). The major differentiator is that, instead of bulking all finishes and all colors, they separate them to maintain the integrity of color, texture, etc.

Collection:

They collect at retail facilities. They also have an on-site recycling center located with a processing facility.

Processing/product:

They separate the paint to maintain the integrity of color, texture, etc.

The facility is running only at 5-10% capacity because there is no demand for the final recycled paint product. They have over 300 color options.

They have a price point of approximately $7 per gallon versus $25 for virgin paint.

Transportation: Walter would use trucks on reverse routes to transport paint.

B-9 Paint Product Stewardship Initiative

APPENDIX C FURTHER DETAIL ON SENSITIVITY ANALYSIS

Appendix C Paint Product Stewardship Initiative

SENSITIVITY ANALYSIS - COLLECTION SYSTEM COST HIGHER

FACTOR LOW MEDIUM HIGH EX HIGH

Gallons Collected 17,000,000 32,000,000 49,000,000 68,000,000 System Costs $146,000,000 $275,000,000 $420,000,000 $583,000,000 Latex Paint Gallons Consolidated $10,000,000 $19,000,000 $29,000,000 $41,000,000 Sale Price $0 per gallon $0 $0 $0 $0 $5 per gallon $50,000,000 $95,000,000 $145,000,000 $205,000,000 $10 per gallon $100,000,000 $190,000,000 $290,000,000 $410,000,000 $15 per gallon $150,000,000 $285,000,000 $435,000,000 $615,000,000 $20 per gallon $200,000,000 $380,000,000 $580,000,000 $820,000,000 Marketing (25% of Revenue) $0 per gallon $0 $0 $0 $0 $5 per gallon $12,500,000 $23,750,000 $36,250,000 $51,250,000 $10 per gallon $25,000,000 $47,500,000 $72,500,000 $102,500,000 $15 per gallon $37,500,000 $71,250,000 $108,750,000 $153,750,000 $20 per gallon $50,000,000 $95,000,000 $145,000,000 $205,000,000 Net Cost (System Costs - (Sale Price-Marketing)) $0 per gallon $146,000,000 $275,000,000 $420,000,000 $583,000,000 $5 per gallon $108,500,000 $203,750,000 $311,250,000 $429,250,000 $10 per gallon $71,000,000 $132,500,000 $202,500,000 $275,500,000 $15 per gallon $33,500,000 $61,250,000 $93,750,000 $121,750,000 $20 per gallon -$4,000,000 -$10,000,000 -$15,000,000 -$32,000,000

Virgin Paint Gallons Sold 637,000,000 637,000,000 637,000,000 637,000,000 Cost per Gallon Sold $0 per gallon $0.23 $0.43 $0.66 $0.92 $5 per gallon $0.17 $0.32 $0.49 $0.67 $10 per gallon $0.11 $0.21 $0.32 $0.43 $15 per gallon $0.05 $0.10 $0.15 $0.19 $20 per gallon -$0.01 -$0.02 -$0.02 -$0.05

Difference in Virgin Paint Gallons Sold from Base Model $0 per gallon $0.01 $0.02 $0.03 $0.04 $5 per gallon $0.01 $0.02 $0.03 $0.04 $10 per gallon $0.01 $0.02 $0.03 $0.04 $15 per gallon $0.01 $0.02 $0.03 $0.04 $20 per gallon $0.01 $0.02 $0.03 $0.04

C-1 Paint Product Stewardship Initiative

SENSITIVITY ANALYSIS - COLLECTION SYSTEM COST LOWER

FACTOR LOW MEDIUM HIGH EX HIGH

Gallons Collected 17,000,000 32,000,000 49,000,000 68,000,000 System Costs $132,000,000 $248,000,000 $380,000,000 $527,000,000 Latex Paint Gallons Consolidated $10,000,000 $19,000,000 $29,000,000 $41,000,000 Sale Price $0 per gallon $0 $0 $0 $0 $5 per gallon $50,000,000 $95,000,000 $145,000,000 $205,000,000 $10 per gallon $100,000,000 $190,000,000 $290,000,000 $410,000,000 $15 per gallon $150,000,000 $285,000,000 $435,000,000 $615,000,000 $20 per gallon $200,000,000 $380,000,000 $580,000,000 $820,000,000 Marketing (25% of Revenue) $0 per gallon $0 $0 $0 $0 $5 per gallon $12,500,000 $23,750,000 $36,250,000 $51,250,000 $10 per gallon $25,000,000 $47,500,000 $72,500,000 $102,500,000 $15 per gallon $37,500,000 $71,250,000 $108,750,000 $153,750,000 $20 per gallon $50,000,000 $95,000,000 $145,000,000 $205,000,000 Net Cost (System Costs - (Sale Price-Marketing)) $0 per gallon $132,000,000 $248,000,000 $380,000,000 $527,000,000 $5 per gallon $94,500,000 $176,750,000 $271,250,000 $373,250,000 $10 per gallon $57,000,000 $105,500,000 $162,500,000 $219,500,000 $15 per gallon $19,500,000 $34,250,000 $53,750,000 $65,750,000 $20 per gallon -$18,000,000 -$37,000,000 -$55,000,000 -$88,000,000

Virgin Paint Gallons Sold 637,000,000 637,000,000 637,000,000 637,000,000 Cost per Gallon Sold $0 per gallon $0.21 $0.39 $0.60 $0.83 $5 per gallon $0.15 $0.28 $0.43 $0.59 $10 per gallon $0.09 $0.17 $0.26 $0.34 $15 per gallon $0.03 $0.05 $0.08 $0.10 $20 per gallon -$0.03 -$0.06 -$0.09 -$0.14

Difference in Virgin Paint Gallons Sold from Base Model $0 per gallon -$0.01 -$0.02 -$0.03 -$0.05 $5 per gallon -$0.01 -$0.02 -$0.03 -$0.05 $10 per gallon -$0.01 -$0.02 -$0.03 -$0.05 $15 per gallon -$0.01 -$0.02 -$0.03 -$0.05 $20 per gallon -$0.01 -$0.02 -$0.03 -$0.05

C-2 Paint Product Stewardship Initiative

SENSITIVITY ANALYSIS - ADMIN COST LOWER

FACTOR LOW MEDIUM HIGH EX HIGH

Gallons Collected 17,000,000 32,000,000 49,000,000 68,000,000 System Costs $128,000,000 $241,000,000 $369,000,000 $512,000,000 Latex Paint Gallons Consolidated $10,000,000 $19,000,000 $29,000,000 $41,000,000 Sale Price $0 per gallon $0 $0 $0 $0 $5 per gallon $50,000,000 $95,000,000 $145,000,000 $205,000,000 $10 per gallon $100,000,000 $190,000,000 $290,000,000 $410,000,000 $15 per gallon $150,000,000 $285,000,000 $435,000,000 $615,000,000 $20 per gallon $200,000,000 $380,000,000 $580,000,000 $820,000,000 Marketing (25% of Revenue) $0 per gallon $0 $0 $0 $0 $5 per gallon $12,500,000 $23,750,000 $36,250,000 $51,250,000 $10 per gallon $25,000,000 $47,500,000 $72,500,000 $102,500,000 $15 per gallon $37,500,000 $71,250,000 $108,750,000 $153,750,000 $20 per gallon $50,000,000 $95,000,000 $145,000,000 $205,000,000 Net Cost (System Costs - (Sale Price-Marketing)) $0 per gallon $128,000,000 $241,000,000 $369,000,000 $512,000,000 $5 per gallon $90,500,000 $169,750,000 $260,250,000 $358,250,000 $10 per gallon $53,000,000 $98,500,000 $151,500,000 $204,500,000 $15 per gallon $15,500,000 $27,250,000 $42,750,000 $50,750,000 $20 per gallon -$22,000,000 -$44,000,000 -$66,000,000 -$103,000,000

Virgin Paint Gallons Sold 637,000,000 637,000,000 637,000,000 637,000,000 Cost per Gallon Sold $0 per gallon $0.20 $0.38 $0.58 $0.80 $5 per gallon $0.14 $0.27 $0.41 $0.56 $10 per gallon $0.08 $0.15 $0.24 $0.32 $15 per gallon $0.02 $0.04 $0.07 $0.08 $20 per gallon -$0.03 -$0.07 -$0.10 -$0.16

Difference in Virgin Paint Gallons Sold from Base Model $0 per gallon -$0.02 -$0.03 -$0.05 -$0.07 $5 per gallon -$0.02 -$0.03 -$0.05 -$0.07 $10 per gallon -$0.02 -$0.03 -$0.05 -$0.07 $15 per gallon -$0.02 -$0.03 -$0.05 -$0.07 $20 per gallon -$0.02 -$0.03 -$0.05 -$0.07

C-3 Paint Product Stewardship Initiative

ANNUAL PROCESSING COSTS RELATED TO LATEX:OIL RATIO OF 60:40 AND DISPOSAL COSTS Expense Number Unit Cost Total Cost

Labor Paint Sorters 7 $40,500 per year $283,500 Processing Support (forklift, etc) 1.5 $40,500 per year $60,750 Oil-Based Paint Bulking 7 $40,500 per year $283,500 Product Production 2 $40,500 per year $81,000 Laboratory Technician 1 $58,000 per year $58,000 Facility Manager 1 $95,000 per year $95,000 Administrative Assistant 1 $40,500 per year $40,500

Operating Expenses Supplies* 1 $180,000 per year $180,000 Annual Training 20.5 $500 per employee $10,250 Utilities, Maintenance, Repairs 1 $100,000 per year $100,000 Laboratory Testing (Green Seal) 1 $15,000 per year $15,000 Damaged Goods 157.5 A $0.88 per gallon $139 Wastewater Treatment 1 $50,000 per year C $50,000 Pre-printed one-gallon cans 450,000 $0.77 per gallon D $347,625 Oil-Based Paint Disposal 400,000 $0.72 per gallon E $288,000 Unusable Latex Disposal 150,000 $0.88 per gallon E $132,000 Used Plastic Pail Disposal 1.00 $60,000 per year C $60,000

Facility Amortization 1 $373,144 per year F $373,144

Total* $2,458,408 * Supplies include drums, sorbent materials, and personal protective equipment A NPCA estimates 0.035 percent of processed paint will be damaged and require disposal. B Wally Kiccma, Hotz Environmental, personal communication 2006 C Jim Quinn, personal communication 2006 D Assumes 15% of paint sold in 1-gallon metal cans at a cost of $1.75 per gallon and 85% of paint sold in 5-gallon buckets at a cost of $0.60 per gallon. E Scott Thomas, Sherwin Williams F Assumes construction costs of $3.5 Million at 8% interest over 30 years.

C-4 Paint Product Stewardship Initiative

SENSITIVITY ANALYSIS - PROCESSING COST LOWER

FACTOR LOW MEDIUM HIGH EX HIGH

Gallons Collected 17,000,000 32,000,000 49,000,000 68,000,000 System Costs $138,000,000 $259,000,000 $396,000,000 $550,000,000 Latex Paint Gallons Consolidated $10,000,000 $19,000,000 $29,000,000 $41,000,000 Sale Price $0 per gallon $0 $0 $0 $0 $5 per gallon $50,000,000 $95,000,000 $145,000,000 $205,000,000 $10 per gallon $100,000,000 $190,000,000 $290,000,000 $410,000,000 $15 per gallon $150,000,000 $285,000,000 $435,000,000 $615,000,000 $20 per gallon $200,000,000 $380,000,000 $580,000,000 $820,000,000 Marketing (25% of Revenue) $0 per gallon $0 $0 $0 $0 $5 per gallon $12,500,000 $23,750,000 $36,250,000 $51,250,000 $10 per gallon $25,000,000 $47,500,000 $72,500,000 $102,500,000 $15 per gallon $37,500,000 $71,250,000 $108,750,000 $153,750,000 $20 per gallon $50,000,000 $95,000,000 $145,000,000 $205,000,000 Net Cost (System Costs - (Sale Price-Marketing)) $0 per gallon $138,000,000 $259,000,000 $396,000,000 $550,000,000 $5 per gallon $100,500,000 $187,750,000 $287,250,000 $396,250,000 $10 per gallon $63,000,000 $116,500,000 $178,500,000 $242,500,000 $15 per gallon $25,500,000 $45,250,000 $69,750,000 $88,750,000 $20 per gallon -$12,000,000 -$26,000,000 -$39,000,000 -$65,000,000

Virgin Paint Gallons Sold 637,000,000 637,000,000 637,000,000 637,000,000 Cost per Gallon Sold $0 per gallon $0.22 $0.41 $0.62 $0.86 $5 per gallon $0.16 $0.29 $0.45 $0.62 $10 per gallon $0.10 $0.18 $0.28 $0.38 $15 per gallon $0.04 $0.07 $0.11 $0.14 $20 per gallon -$0.02 -$0.04 -$0.06 -$0.10

Difference in Virgin Paint Gallons Sold from Base Model $0 per gallon -$0.01 -$0.03 -$0.04 -$0.05 $5 per gallon -$0.01 -$0.03 -$0.04 -$0.05 $10 per gallon -$0.01 -$0.03 -$0.04 -$0.05 $15 per gallon -$0.01 -$0.03 -$0.04 -$0.05 $20 per gallon -$0.01 -$0.03 -$0.04 -$0.05

C-5 Paint Product Stewardship Initiative

SENSITIVITY ANALYSIS - OVERALL LOW

FACTOR LOW MEDIUM HIGH EX HIGH

Gallons Collected 17,000,000 32,000,000 49,000,000 68,000,000 System Costs $130,000,000 $245,000,000 $375,000,000 $520,000,000 Latex Paint Gallons Consolidated $10,000,000 $19,000,000 $29,000,000 $41,000,000 Sale Price $0 per gallon $0 $0 $0 $0 $5 per gallon $50,000,000 $95,000,000 $145,000,000 $205,000,000 $10 per gallon $100,000,000 $190,000,000 $290,000,000 $410,000,000 $15 per gallon $150,000,000 $285,000,000 $435,000,000 $615,000,000 $20 per gallon $200,000,000 $380,000,000 $580,000,000 $820,000,000 Marketing (25% of Revenue) $0 per gallon $0 $0 $0 $0 $5 per gallon $12,500,000 $23,750,000 $36,250,000 $51,250,000 $10 per gallon $25,000,000 $47,500,000 $72,500,000 $102,500,000 $15 per gallon $37,500,000 $71,250,000 $108,750,000 $153,750,000 $20 per gallon $50,000,000 $95,000,000 $145,000,000 $205,000,000 Net Cost (System Costs - (Sale Price-Marketing)) $0 per gallon $130,000,000 $245,000,000 $375,000,000 $520,000,000 $5 per gallon $92,500,000 $173,750,000 $266,250,000 $366,250,000 $10 per gallon $55,000,000 $102,500,000 $157,500,000 $212,500,000 $15 per gallon $17,500,000 $31,250,000 $48,750,000 $58,750,000 $20 per gallon -$20,000,000 -$40,000,000 -$60,000,000 -$95,000,000

Virgin Paint Gallons Sold 637,000,000 637,000,000 637,000,000 637,000,000 Cost per Gallon Sold $0 per gallon $0.20 $0.38 $0.59 $0.82 $5 per gallon $0.15 $0.27 $0.42 $0.57 $10 per gallon $0.09 $0.16 $0.25 $0.33 $15 per gallon $0.03 $0.05 $0.08 $0.09 $20 per gallon -$0.03 -$0.06 -$0.09 -$0.15

Difference in Virgin Paint Gallons Sold from Base Model $0 per gallon -$0.03 -$0.05 -$0.07 -$0.10 $5 per gallon -$0.03 -$0.05 -$0.07 -$0.10 $10 per gallon -$0.03 -$0.05 -$0.07 -$0.10 $15 per gallon -$0.03 -$0.05 -$0.07 -$0.10 $20 per gallon -$0.03 -$0.05 -$0.07 -$0.10

C-6 Paint Product Stewardship Initiative

SENSITIVITY ANALYSIS - OVERALL HIGH

FACTOR LOW MEDIUM HIGH EX HIGH

Gallons Collected 17,000,000 32,000,000 49,000,000 68,000,000 System Costs $153,000,000 $287,000,000 $440,000,000 $611,000,000 Latex Paint Gallons Consolidated $10,000,000 $19,000,000 $29,000,000 $41,000,000 Sale Price $0 per gallon $0 $0 $0 $0 $5 per gallon $50,000,000 $95,000,000 $145,000,000 $205,000,000 $10 per gallon $100,000,000 $190,000,000 $290,000,000 $410,000,000 $15 per gallon $150,000,000 $285,000,000 $435,000,000 $615,000,000 $20 per gallon $200,000,000 $380,000,000 $580,000,000 $820,000,000 Marketing (25% of Revenue) $0 per gallon $0 $0 $0 $0 $5 per gallon $12,500,000 $23,750,000 $36,250,000 $51,250,000 $10 per gallon $25,000,000 $47,500,000 $72,500,000 $102,500,000 $15 per gallon $37,500,000 $71,250,000 $108,750,000 $153,750,000 $20 per gallon $50,000,000 $95,000,000 $145,000,000 $205,000,000 Net Cost (System Costs - (Sale Price-Marketing)) $0 per gallon $153,000,000 $287,000,000 $440,000,000 $611,000,000 $5 per gallon $115,500,000 $215,750,000 $331,250,000 $457,250,000 $10 per gallon $78,000,000 $144,500,000 $222,500,000 $303,500,000 $15 per gallon $40,500,000 $73,250,000 $113,750,000 $149,750,000 $20 per gallon $3,000,000 $2,000,000 $5,000,000 -$4,000,000

Virgin Paint Gallons Sold 637,000,000 637,000,000 637,000,000 637,000,000 Cost per Gallon Sold $0 per gallon $0.24 $0.45 $0.69 $0.96 $5 per gallon $0.18 $0.34 $0.52 $0.72 $10 per gallon $0.12 $0.23 $0.35 $0.48 $15 per gallon $0.06 $0.11 $0.18 $0.24 $20 per gallon $0.00 $0.00 $0.01 -$0.01

C-7 Paint Product Stewardship Initiative

REFERENCES

References Paint Product Stewardship Initiative

REFERENCES CITED

Anderson, Patrick, 2005. Personal communication to Cascadia Consulting Group, Inc., June 3, 2005.

Bailey, Curt (CB Coating Consulting and Inspection, Inc.). Personal communication.

Elman, Barry, 2005. Personal communication to the Infrastructure Workgroup, SCS Engineers, and Cascadia Consulting Group, Inc., May 27, 2005.

Eureka Recycling, 2002. “Downstream of Single Stream,” Resource Recycling, 2002 (November): pp. 24-28.

Gallagher, Glenn (California Integrated Waste Management Board). Personal communication.

Holliday, Jen (Chittenden Solid Waste District in Vermont). Personal communication.

Infrastructure Workgroup, 2005. Personal communication to SCS Engineers and Cascadia Consulting Group, Inc., May 25, 2005.

Infrastructure Workgroup, National Paint Infrastructure Collection System Modeling White Paper. Unpublished report, available at http://www.productstewardship.us/supportingdocs/CollecMdlsWtPaper41304.doc.

Jacobsen, Barbara (The Jacobsen Group, Seattle, WA). Personal communication.

Marion County Public Works, 2005a. Painting the Town Grey. Fact sheet. Received from Bailey Payne, May 31, 2005.

Marion County Public Works, 2005b. Unpublished data. Received from Bailey Payne, May 31, 2005.

Nightingale, David. Personal communication. August 21, 2006.

Nightingale, David and Rachel Donnette, 2002. “Household Hazardous Waste,” in Handbook of Solid Waste Management [McGraw-Hill: New York, 2002], pp 10.1-10.6.

NW Product Stewardship Council - Paint Advisory Group, 2004. Paint Age Study, presented in Chicago, IL, September 20-21, 2004.

O’Donnell, Mike (Phillips Environmental). Personal communication.

Payne, Bailey, 2005. Personal communication to Cascadia Consulting Group, Inc., May 31, 2005.

Philipp, Kelly, 1999. “The Economics of Collecting Recyclables,” Resource Recycling, 1999 (November): pp. 22-26.

References-1 Paint Product Stewardship Initiative

Portelance, Georges, 2005. Personal communication to the Infrastructure Workgroup, SCS Engineers, and Cascadia Consulting Group, Inc. May 27, 2005.

Product Stewardship Institute, 2004. Paint Product Stewardship: A Background Report for the National Dialogue on Paint Product Stewardship. http://www.productstewardship.us/prod_paint_nat_dia.html

PSI, 2005. The Collection and Recycling of Used Computers Using a Reverse Distribution System, a Pilot Project with Staples, Inc., Final Report to the U.S. Environmental Protection Agency, June 2005.

Quinn, Jim, 2005. Personal communication to Cascadia Consulting Group, Inc. June 3, 2005.

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