Oregon Council last month approved the purchase of 500 tons of road salt from Cargill Inc., and $500 tons from North American Salt Company at vastly different prices.
Public Service Director Paul Roman said he was going to purchase 1,000 tons from North American at $89.36 per ton, but later learned that Cargill would provide road salt for $65 per ton.
Cargill was the city’s supplier of road salt last year.
Cargill had contacted the city to offer 500 tons of salt at the lower price after an agreement was reached with North American to deliver 1,000 tons of salt at $89.36, said Roman.
“But through North American, you had to purchase 1,000 tons at that unit price,” said Roman. North American reduced the amount to 500 tons upon the city’s request.
“By doing this, 500 from North American and 500 from Cargill, it’s about a $12,000 savings for the same amount,” said Roman. “They’re both very good salt supplies. I do think it’s a good deal to switch to this. I do think1,000 tons is a good, safe amount to purchase.”
Roman said the salt from North American had already been delivered.
Communities in the last couple of years have seen costs for road salt increase .60 to .70 cents per ton due to a salt shortage. Some areas only salt main roadways and intersections to conserve salt.
Roman said he expects costs for road salt to go down for next winter.
“You’re going to get into competitive bidding, and you’re definitely going to see lower prices for this next upcoming year. Traditionally, by boat, has always been cheaper. We’re still debating. Lucas County is thinking about going strictly with ODOT on their bid, versus staying with Toledo and us on the bid by boat. I don’t know if it affects the Toledo bid at all or not, whether the county pulls out. But what I don’t like about the ODOT bid is you have to purchase a minimum amount. Whatever quantity you give ODOT, you’re going to have to purchase 80 percent of that. My fear is to do that and know Toledo gets something cheaper by boat, I’d rather be in on that bid. There’s no doubt in my mind you’re going to see lower prices for the 2009 and 2010. With Cargill, if they would have had more, we would have bought it. But this is all they had,” he said.
“The way I look at this is our average price for salt isn’t that much higher than the initial purchase,” said Councilman Bill Myers. “And that’s really the way you have to do it. Average out over everything that you use, not just one particular purchase. Mr. Roman didn’t necessarily want to buy this $90 per ton salt, but he felt it was in our best interest to secure an adequate buffer for supply because no one knows what the weather’s going to do. I’m grateful they came across another 500 tons at $65 bucks.”
Myers asked if Cargill’s and North American’s road salt is comparable in quality.
“There was concern last time of salt coming from a different place that was imported into this country,” he said.
“The North American salt that was delivered is perfect road salt,” said Roman. “Cargill was our supplier last year and we know they also provide very good quality salt as well. I don’t have an issue with either one.”
The $65 per ton salt is delivered by truck, which is cheaper, he said.
“It’s really better than what we had by boat because they’ll deliver right to the dome out back so it’s actually a much better price than we had with Morton,” said Roman.