Northwood this year is facing a 400 percent increase in the cost of road salt compared to last year’s price.
In 2013, the city paid less than $33 per ton. This year, the lowest bid is over $136 a ton, said City Administrator Bob Anderson.
“Although local stockpiles may be down, this is more than a 400 percent increase for a commodity that is not in short supply nationally and whose price will come down as local stockpiles are replenished,” he said.
The Ohio Department of Transportation (ODOT) coordinates the bidding process so that any government entity that wants to be part of a much larger group can do so.
It is the second attempt by ODOT to obtain reasonable bids for road salt, said Anderson.
If the city enters into the contract, it is obligated to purchase whatever tonnage it estimates it will use and will have to purchase and take delivery at the elevated contract price, even though the spot price of the salt will most likely be considerably lower, he said.
Austin Price, lead procurement officer for ODOT, said a variety of factors may have contributed to the high prices, such as large amounts of tonnage requested as a result of last winter’s use, geographic locations, vendor stockpile locations, and available trucking. “These high prices and the difficulties obtaining salt quantities appear to be a universal problem that is not isolated to the state of Ohio alone,” he said.
Prices much higher than a normal year could have significant budgetary impacts on communities.
ODOT set an Aug. 22 decision date for the city, said Anderson.
“The more I think about this and talk with area administrators, the more I become convinced that the city should not order any salt at this time,” Anderson said. “Doing so would legitimize this attempted extortion by our suppliers.”
Northwood has $31,000 remaining in the 2014 budget line item for salt. “Thanks to good planning by the public service director, we have 900 tons of salt on hand in which judicious use is enough to get us through an ordinary winter,” he said. `Judicious use’ may mean salting only intersections, he added.
Anderson said he also expects the salt supply to be replenished enough before the winter starts for the price to come down.
Oregon is in much better shape. City council earlier this month approved a bid by Cargill Incorporated Deicing Technology Business Unit, of North Olmsted, to provide 4,500 tons of road salt for the winter.
The amount of salt is the same as what the city used last winter, according to Mayor Mike Seferian.
The cost is $20,000 less than what was earmarked in the budget.
“We believe this will be enough salt for our program,” he said.
Oregon, through the City of Toledo, advertised for bulk deicing salt and opened competitive bids on April 29. Cargill had the lowest and best bid at $48.95 per ton.
Public Service Director Paul Roman said the city last year lent salt to ODOT as well as to the cities of Maumee and Northwood when their inventory of salt diminished during one of the harshest winters on record.
“That salt will be returned to us this year,” said Roman. “With this purchase, and the salt returning, our reserve will be around 10,000 tons for this winter, so we’ll be in good shape. This is something that we go in on with the City of Toledo and share in the bid. By having dock space, we definitely save on cost by having our salt delivered by ship.”
The price has gone up by $10 per ton, he said.
“You’re seeing that across the board, everywhere,” he said. “We still got a very good rate.”