PDT Staff Writer
At the request of Ohio Governor Ted Strickland, the Ohio Department of Transportation (ODOT) has issued a report on questionable bidding tactics behind high salt prices.
In a released statement, ODOT officials are calling for an increased coordination among agencies responsible for keeping roads safe and passable during winter months.
In the ODOT report it points to a combination of historically bad weather, inflexible contract specifications and questionable bidding tactics as driving forces behind the 'unprecedented' increase in salt prices.
Both Scioto County and the City of Portsmouth have seen an increase in salt prices. Scioto County has experienced a 300-percent increase above last year's contract.
With the cost of salt tripling in some cases, the city and county services are preparing for a more conservative approach to applying the ice-melting mix.
"We will be able to get the salt," City Service Director Chris Murphy explained. "The cost of it means we have to use it sparingly. We are still going to provide the service; we are just going to be selective in how much we are going to put down and when we apply it."
Murphy said the city was able secure some of this year's supply before prices rose.
ODOT experts examined the state's salt market after most communities experienced the increase when seeking new contracts.
ODOT used more than 20.3 million tons of salt on Ohio roads in 2007-2008.
There are a number of factors that officials say caused the rise. Those factors include bad weather leading to record-breaking consumption; contract specifications leading to artifical shortages, and domestic preferences leading to reduced competition.
Midwest states such as Wisconsin, Minnesota, Iowa and Illinois consumed 700,000 tons of salt in 2007-2008.
According ODOT those states placed early salt orders to restock their coffers which decreased supply and increased price.
"Ohio uses contracts that set a minimum amount of salt the state guarantees to purchase and a maximum amount the contractor must make available. Typically, the min-max contracts are set at 50-150 and the state agrees to buy 50 percent, but may purchase 150 percent of the contract's volume," the report stated.
As a result of this agreement for every one ton of salt the supplier is assured to sell, it is obligated to stockpile two extra tons of salt.
The report goes on to say that of the five midwest salt-producing firms, only two operated mines in Ohio: Cargill and Morton Salt.
Under state domestic preferences statutes, these two firms are guaranteed to win contracts when competing against each other.
During this year's state bidding process, however, ODOT received only one bid in many counties from either firm and the two companies never competed head to head.
"If we review the domestic preference laws we have, that (review) might open the door for more out-of-state competition. One of the recommendations of the report was to take a closer look at the state's domestic preference rules," Scott Varner, ODOT spokesperson, said. "What we saw was that by themselves the rules served an important purpose: that Ohio tax dollars should be used to help Ohio workers and Ohio companies. As we looked at all the factors that came together to contribute to the price increase, we saw that what we have created is almost a county-by-county monopolization by the two vendors in Ohio."
The report proposed a review of the state's statutes that might open the door for improved competition.
For more information about the report visit ODOT's website at www.dot.state.oh.us.