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Salt Prices Soar – Another Hit for Cash-Strapped Road Agencies

Salt Prices Soar – Another Hit for Cash-Strapped Road Agencies - Blog - Troy Clogg Landscape Associates, LLC. - truck-night-saltLansing, Mich. – While Michigan residents are enjoying the dog days of summer, road agencies are quietly preparing for winter. The County Road Association said that state and local road agencies are bracing for a massive increase in salt prices expected this year – yet another hit for cash-strapped road maintenance budgets.

“The harsh winter last year caused many road agencies, and other public entities that cooperatively purchase salt from them – such as school districts and other governmental agencies – to deplete their salt reserves,” said Denise Donohue, director of the County Road Association.  “As the demand for early salt delivery increased this year, so did the price.”

Due to the unusually harsh 2013-14 winter, vendors haven’t been able to adequately stockpile.  The law of supply and demand prevails resulting in significantly higher salt prices.  Even with the combined purchasing power of state and local road agencies, the increase is a big hit.

The Washtenaw County Road Commission purchases through the MiDEAL purchasing program and reported a 122 percent increase in the price of salt for the fall 2014 delivery (early fill) and a 46 percent increase for a back up salt delivery, if needed later in the winter.

“The increase in salt price represents an increase of approximately $500,000-$600,000 in our 2014-15 winter expenses,” said Jim Harmon, director of operations for the Washtenaw County Road Commission. “We are attempting to do more with less and the budget hits just keep on coming.  We’re dealing with the same revenues we had a decade ago and the cost of materials keeps increasing, making it harder to deliver the level of service the public expects.”

The price of salt has risen steadily over the past decade while revenues have been on a downward slide.  On average, the statewide average is $65.71 per ton for the 2014-15 winter season, up 46.3 percent from last year.

“During the winter of 1995-96 we paid just over $26 per ton. The price rose slightly to just over $30 per ton in 2005-06.  This year our salt price is more than $66 per ton – more than double what it was a decade ago and a $40 per ton increase since the last gas tax increase,” said Jerry Byrne, Kent County Road Commission operations director. “Although we’ve taken steps to increase efficiency and stretch our salt use, increased costs eat up a bigger part of our budget each year. The use of salt plays an important role in public safety.”

On the brink of what is anticipated to be an early and harsh winter, road agencies are looking for every possible way to stretch maintenance dollars and ensure our roads are safe for travel this winter.

“Michigan’s state and local road agencies have a legal responsibility to keep roads reasonably safe for travel,” Donohue said.

“Although the innovations and best practices for salt use that our members have adopted – such as treating salt with materials to help it stick better, mixing salt and sand or using straight sand, only salting on hills and curves, using alternative products such as sugar beets and using anti-icing agents – have helped to reduce the amount of salt needed, the increase in price per ton has not allowed road agencies to realize savings.”

Winter maintenance continues to be one of the largest expenses for county road agencies. As last winter reminded us, road agency budgets are often at the mercy of “old man” winter.

The County Road Association of Michigan (CRA) represents the interests of Michigan’s 83 county road agencies that collectively maintain more than 75 percent of Michigan roads — more than 90,000 miles and the fourth largest local road system in the nation.

 

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