Paint Product Stewardship Initiative

Paint Product Stewardship Initiative September 19-20, 2007Scott Cassel, PSI Executive Director/Founder

THANK YOUto our sponsors! • Philip Services Corporation • Veolia Environmental Services • Eco-Peinture • Amazon Environmental • WA Department of Ecology • National Paint and Coatings Association

THANK YOUto our meeting coordinators! • Dave Nightingale, WA Department of Ecology • Leslie Wilson, SWMCB MN • Lauren Cole, King County Solid Waste • Al Salvi, WA Department of Ecology

Key Dates • Sept. 2002 – PSI presentation to NPCA Committee • Sept. 2003 – Completion of Paint Action Plan • Sept. 2004 – Completion of 4 meetings • March 15, 2005 – 1st MOU Signed • March 15, 2007 – end of 2-year MOU • March 21, 2007 – NPCA Board Resolution • April 17-18, 2007 – PPSI Dialogue Meeting (Wash DC) • July 2007 – NPCA Executive Committee Meeting • Sept. 19-20, 2007 – PPSI Dialogue Meeting (Seattle WA) • Oct. 2007 – NPCA Full Board Meeting

1st MOU Project Portfolio • Source Reduction Survey/Pilot • Reuse Manual/Pilot • Infrastructure Report • Recycled Paint Standard • Recycled Paint Marketing • Recycled Paint Regulatory Issues - White Paper • Sustainable financing options • Lifecycle Assessment and Cost/Benefit Analysis (LCA/CBA)

The Purpose of the Projects • Demonstrate the potential to reduce the volume of leftover paint and the cost of managing leftover paint; • Increase the use of leftover paint as a resource; • Increase government and private purchase of products made from leftover paint.

Meeting Objectives • 2nd MOU Related • Finalize 2nd MOU so that remaining issues are resolved within 2 weeks of the meeting • Gain general agreement conceptually on the financing system and include specific elements in the MOU that will be used to guide its development • Include other changes as proposed by EPA and the PPSI Steering Committee

Meeting Objectives • 2nd MOU Related • Become educated on the anti-trust issue and other issues of concern to key stakeholders regarding the preferred financing system. • Agree on timeline for MOU signing • Agree on the cost to fully fund the MN Demonstration Project and how it will be funded prior to implementation of the eco-fee (“proxy funding”). • Agree on PPSI project funding and delineate roles for PSI and others

Meeting Objectives • Determine Composition of new Steering Committee. • Determine Composition of Evaluation Committee. • Determine Composition of MN Demonstration Committee (Oversight Committee). • Begin work on MN Demonstration Project and establish clear next steps (e.g., committee meetings, etc.) • Set date for next meeting.

Day 2 Proposed Agenda 9:00 Continue work on 2nd MOU – financing 9:45 Review PPSI Steering Comm Rec’s Review EPA Rec’d changes Nat’l System Elements – Resp. matrix 10:30 Break 10:45 MN Demonstration Project Project Scope Paint Stewardship Organization

Day 2 Proposed Agenda 11:45 MN Demo -- Collection/Mgt Infrastructure 1:00 Lunch 1:45 MN Demonstration Project Recycled paint markets Education/Outreach 2:45 Break 3:00 MN Demo – Evaluation Committee

Day 2 Proposed Agenda 3:30 PPSI Tasks, Roles, and Budget Funding PSI after Seattle mtg (Oct-Dec) Funding MN Demo Project Tasks Proxy Funding – next steps Eco-fee Financing – next steps Process for finalizing MOU 4:45 Schedule next meeting – date, location 5:00 Adjourn

2nd MOU – Missing Elements You Need Added For Your Signature • Agree to jointly pursue minimal back-drop statelegislation model to be implemented first in MN. The intent of the legislation is to level playing field, address anti-trust issues, ensure manufacturers and retailers have opportunity for cost reimbursement from consumers, and allow for maximum flexibility in manufacturer-retailer relationship.

2nd MOU – Missing Elements You Need Added For Your Signature • Agree to use the state legislative model to jointly pursue a national legislative framework that ensures national consistency among states in their management of post-consumer paint.

2nd MOU – Missing Elements You Need Added For Your Signature • Agree to implement an eco-fee financing system in MN that contains the following elements: • Payment into PSO by entity according to the distribution channel – manufacturer  brand owner 1st distribution into state  1st sale in stateretailer

2nd MOU – Missing Elements You Need Added For Your Signature • Agree to implement an eco-fee financing system in MN that contains the following elements: • Registration by responsible entity with MPCA as seller of paint • Agreement by retailers not to sell paint from non-registrants • Agreement to enforce against non-registrants by MPCA

2nd MOU – Missing Elements You Need Added For Your Signature • Agree to implement an eco-fee financing system in MN that contains the following elements: • Eco-fee is either visible or invisible, at the discretion of manufacturers and retailers • PSO determines for itself how it will finance the plan submitted to the government.

2nd MOU – Missing Elements You Need Added For Your Signature • Agree to manufacturer-provided “proxy” funding starting January 1, 2008, until the eco-fee financing system, established by state legislation, is in place no later than January 1, 2009. Proxy funding will be reimbursed through the eco-fee financing system.

2nd MOU – Missing Elements You Need Added For Your Signature • Proxy funding and eco-fee will cover the costs of PPSI project tasks over the term of the MOU, the MN Demonstration Project, and PSO start-up/operations and roll-out to other states.

MOU Revisions

2nd Paint MOU Timeline • July 12 PPSI Draft MOU sent for PPSI staff level review • July 26 PPSI staff level comments due to PSI • Aug. 2 Draft MOU sent for Legal and Management Review • Aug. 23 Draft Final MOU sent for PPSI staff level confirmation • Sept. 6 Final Signature Copy available - start gathering sign’s • Sept. 19-20 PPSI meeting in Seattle WA • October 31 Signature Target Date (after NPCA Board mtg) • November 1 Start of 2nd MOU

Key Dates • November 1, 2007 – 2nd MOU Effective Date • July - December 2007 – Design the Demonstration Project • January 1, 2008 – Finalize performance goals for the Demonstration Project, including education, source reduction, reuse, collection, and recycling markets • January 2008 – Begin implementation of Demonstration Project using “proxy” funds until the eco-fee financing system is implemented.

Key Dates • July 1, 2008 – Implement eco-fee financing system. • October 2008 - March 2009 – Evaluate the Demonstration Project • January 2009 – roll out to other states begins. • January 31, 2009 – resolve key roll-out items: PSO governance, performance goals for national system • November 1, 2010 – 2nd MOU ends

Paint Financing System MOU Revision • January 1, 2008 – Begin implementation of MN Demonstration Project using “proxy” funds until the eco-fee financing system is implemented. • July 1, 2008 – Implement eco-fee financing system • Definitions Needed: • “Proxy” funds • Eco-fee financing system

Paint Financing System

Paint Financing System • Canadian paint management systems: focus on British Columbia • Mark Kurschner, Product Care • Quebec Paint Management System • Pierre Landry, Paint Recycling Company • Mario Clermont, Laurentide • Susan Petersen, ICI Paints • Choosing a system for the MN Demonstration Project • Next Steps

Paint Financing System Key Elements • Brand owner (name on paint can) pays eco-fee into PSO. • Eco-fee is either visible or invisible, at the discretion of manufacturers and retailers • PSO is contracted by the brand owners to provide collection, recycling, and disposal services. • TPO determines for itself how it will finance the plan submitted to the government.

Paint Financing System Key Elements • When manufacturers sell paint to retailers, they are permitted to ask retailers to pay them for the paint and for an amount equivalent to the fee they pay to their TPO. They can also ask the retailer to show this amount on the sales receipt provided to the customer.

Paint Financing System Key Elements • Scope of products accepted will include consumer paints, varnishes, stains and aerosols for home and commercial use. Empty containers are accepted for recycling. Products that are excluded from the program are marine anti-fouling paints, specialty industrial coatings, such as two-part paints, and non-aerosol craft and automotive paints.

Paint Financing System Key Elements • The brand owners are required by state legislation to do the following: • Submit a plan for review and approval to the state agency that addresses the following: • Provide educational materials to retailers and other collection locations. • Etc.

PSI Proposed 3-year Paint Workplan Budget

All PSI Paint Projects – Budget Summaries through September 15, 2007

PSI Proposed Workplan Budget • PSI submits to a full financial audit each year • PSI staff keep detailed invoices by project task • PSI will provide quarterly budget updates • Proposed 3-year PSI budget under current assumptions: $287,960 • Recommend setting aside 20% additional funds for unforeseen initiatives

PSI Proposed Workplan Budget • What group should be on conference calls to finalize MOU? • New PPSI MOU Committee? • PPSI Steering Committee? • Full PPSI Dialogue Group? • How many calls will the group need to finalize the MOU (3 calls)?

PSI Proposed Workplan Budget • Do you want to continue with Steering Committee? • Purpose: • Prepare items for full PPSI dialogue decision • Decide routine administrative issues • Acts as working group for feedback • Should the Steering Committee continue, change, or end? • How often do you want to meet (4x/yr)?

PSI Proposed Workplan Budget • Current Composition • NPCA staff • 4 manufacturers (Dunn-Edwards, Valspar, ICI, Sherwin Williams) • 3 state government (CA, WA, FL) • 3 local government (SWMCB MN, Metro OR) • 1 federal government (U.S. EPA) • 1 recycler (Amazon) • 1 retailer (Lowe’s) • Additions: Chittenden County VT, MPCA

PSI Proposed Workplan Budget • PPSI Dialogue Meetings • How often do you want to meet (2x/yr)? • Do you want 1 or 2 PSI staff? • Considerations if 2 staff (Scott, Susan) • Extra cost per meeting for Susan: $5,800 • Assistance at meeting to take notes, give presentations, and facilitation. • Backup for Scott; able to fill in if necessary. • Knowledgeable about project if needed to assist with committees and other PPSI tasks.

PSI Proposed Workplan Budget • Considerations if 1 staff • Extra cost per meeting for on-site note-taker: $1,500 • Need to find person with skills and availability at each meeting location.

PSI Proposed Workplan Budget • How do you want to keep the wider PPSI stakeholder group informed of all PPSI committee and other work? • Includes daily database updates of PPSI stakeholder dialogue group, wider paint group, and each committee for which PSI is responsible. • Monthly PPSI email updates? • Quarterly full PPSI conference calls?

PSI Proposed Workplan Budget • Demonstration/Oversight Committee • What level of participation do you want PSI to play in Demonstration/Oversight Committee?  Assume significant assistance from PPSI participants • Coordinate and facilitate calls, participate on calls, and advise on technical documents? • Participate on calls and advise on technical documents? (not coordinating and facilitating calls, not maintaining contact database) • Participate on calls only? • No involvement

PSI Proposed Workplan Budget • Demonstration/Oversight Committee • How long do you want assistance? • 6 months – 2 calls per month (until March 2008) • 1 year – 1 call per month (until March 2009, end of evaluation period)

PSI Proposed Workplan Budget • Program Evaluation Committee • What level of participation do you want PSI to play in Program Evaluation Committee?  Assume significant assistance from PPSI participants • Coordinate and facilitate calls, participate on calls, and advise on technical documents? • Participate on calls and advise on technical documents? (not coordinating and facilitating calls, not maintaining contact database) • Participate on calls only? • No involvement

PSI Proposed Workplan Budget • Program Evaluation Committee • How long do you want assistance? • 6 months – 2 calls per month (October 2007 – March 2008) • 1 year – 1 call per month (April 2008 – March 2009, end of evaluation period)

PSI Proposed Workplan Budget • National Roll-out Committee • What level of participation do you want PSI to play in National Roll-out Committee? • Coordinate and facilitate calls, participate on calls, and advise on technical documents? • Participate on calls and advise on technical documents? (not coordinating and facilitating calls, not maintaining contact database) • Participate on calls only? • No involvement

PSI Proposed Workplan Budget • National Roll-out Committee • How long do you want assistance? • 6 months – 2 calls per month (October 2008 – March 2009) • 1 ½ years – 1 call per month (April 2009 – November 2010, end of 2nd MOU period)

PSI Proposed Workplan Budget • Do you want to have contingency funds to hire PSI or other contractors for additional projects? • Source reduction pilot/kiosk??? • Curbside collection pilot??? Retail collection pilot??? Collections at fire stations??? • Pilot to collect plastic and steel containers???

Paint Product Stewardship Initiative