43
Report explains high road-salt prices
The ODOT report said that it cost more to ship salt to Indiana than within Ohio.
SALEM — Communities and motorists may be taking a slippery ride over high road-salt prices this winter.
The Ohio Department of Transportation on Tuesday released a report on why salt prices shot up dramatically this fall.
Gov. Ted Strickland asked for information after the state and local communities saw “dramatic spikes” in the price of rock salt, ODOT said.
The agency said that salt prices statewide increased from 50 percent to 300 percent above last winter’s costs.
ODOT’s report blamed the high prices on a combination of historically bad weather, inflexible state contract specifications and questionable bidding tactics as driving forces behind what it said was an unprecedented increase in salt prices.
Part of the report suggested the Ohio attorney general’s office should look into the issue.
Ohio salt mines were producing salt that cost more to mine and deliver in Ohio than it cost to mine and deliver to Indiana, according to ODOT spokeswoman Nancy Burton. That’s not normal economics, according to the report.
The ODOT report said the price increases also were in response to demand because of heavy snows during winter 2007-2008.
Another part of the problem was state contracts that led to artificial shortages.
ODOT contracts set a minimum amount of salt the state guarantees to purchase and a maximum amount the contractor must make available. The contracts are set at what is called “50-150.” That means the state agrees to buy 50 percent of the contract’s volume but may purchase up to 150 percent.
As a result, for every 1 ton a salt supplier is assured to sell, the company is legally obligated to stockpile 2 extra tons of salt. The need for suppliers to maintain such large inventories of salt due to these contracts resulted in a considerable portion of available materials being taken off the market.
ODOT said it’s unclear, however, whether Ohio’s salt vendors are able to deliver the full 150 percent of any of the contracts.
Another problem is that of five Midwest salt-producing firms, only Cargill and Morton Salt operate mines in Ohio. Under the state’s statutes, these two firms are guaranteed to win contracts and competed only against each other.
During this year’s state bidding process, however, ODOT received only one bid in many counties from either firm. The two companies never competed head to head.
The report suggested the current “Buy Ohio” rules could encourage more competition and eliminate the county-by-county monopolization behavior experienced across the state.
Also recommended by the report, more local governments should work closely with ODOT to purchase salt.
The report noted that the two Ohio salt companies often had greatly different prices. A Cargill county would have salt in the $40-a-ton range, and a neighboring county supplied by Morton would be selling at $70 a ton.
According to the report, Portage County was paying $43.20 a ton; Mahoning County, $70 a ton; Columbiana, $72.89 a ton; and Trumbull, $68.95 a ton. The statewide average, the report said, is $62.47 a ton.
wilkinson@vindy.com