Title
2014-2015 Road Salt and De-Icing Liquid Annual Purchase
History
In March, the Public Works Department received Board approval to renew our agreement with the Illinois Department of Central Management Services (CMS) for our annual purchase of road salt through the State Joint Purchasing Program. Since that time, we have been advised that our contract with last year’s provider has been renewed with a 5% increase in cost. The vendor will again be Cargill Incorporated Salt Division, North Olmsted, Ohio, at a price of $53.84 per ton. Based on the past five years, the village on average used 4,640 tons of road salt throughout the winter season. Due to last year’s extraordinary winter, the village used 6,702 tons of road salt to maintain Village roads. This year, we are required to purchase a minimum of 4,400 tons and a maximum of 6,600 tons of road salt for the 2014/15 winter season.
In light of last year’s extreme demand and delivery challenges, extraordinary price increases have occurred along with supply shortages. As such, the advance purchase of road salt is highly recommended. Village staff has been in conversation with Cargill, along with other salt suppliers. All have consistently clarified that early delivery is strongly encouraged due to smaller than normal existing stockpiles and limited transportation capacity from mines. As an additional proactive measure, staff has prepared an auxiliary stockpile plan to temporarily increase our on-site storage capacity by 2,000 tons.
Storage capacity within our salt barn is 3,500 tons. There are currently 2,000 tons in storage, with room for an additional 1,500 tons. Auxiliary storage space for an additional 2,000 tons has been identified within the Public Works grounds (500 tons will be stored inside a former salt storage building; 1,500 tons will be stored outside under tarps).
To improve the effectiveness of the salt, a liquid de-icing agent called Ice Bite, manufactured by Road Solutions, Inc. of Indianapolis, Indiana, is used. This beet juice based product is mixed with salt brine by staff and used as a pretreatment, sprayed on specific roads and bridges. It is also applied directly to the salt as it is dispersed from the truck to improve the effective temperature range of the salt. The Village purchases this product through the Suburban Purchasing Cooperative (SPC). The SPC has not yet awarded the 2014-2015 contract to provide de-icing agent for the cooperative. However, the SPC has extended Road Solutions’ 2013-2014 contract prices through November 8, 2014. Ice Bite purchased by the November 8th extension date will be $1.32 per gallon. To take advantage of this pricing, the Village intends to purchase 4,500 gallons of Ice Bite to fill the tank to cover initial snowfighting efforts. Once SPC selects the new de-icing vendor, Public Works will return to Committee and Board for approval to purchases an additional 4,500 gallons of Ice Bite to cover snowfighting efforts through the end of the year.
Currently the 2014 budget line item for salt and de-icing liquid is over budget. The use of General Fund contingency funds is requested in the amount of $200,000 for the immediate purchase of 3,500 tons of salt (1,500 tons to fill salt barn and 2,000 tons auxiliary on-site storage) along with 9,000 gallons of de-icing liquid.
Due to the need to replenish both our salt and de-icing liquid supplies in a timely manner, this item is being reviewed by Committee and advanced directly to Board on the same night.
I move to approve to the Board to approve the use of contingency funds from the general fund in the amount of $200,000 for the immediate purchase of salt and de-icing liquid;
And
Approve the purchase of road salt from Cargill Incorporated Salt Division of North Olmsted, Ohio, for the 2014-2015 winter season, for a cost not to exceed $53.84 per ton and a total cost not to exceed the remaining Fiscal Year 2014 budget and the Fiscal Year 2015 Board approved budgeted amount;
And
Approve the purchase of bulk de-icing liquid from Road Solutions Inc. of Indianapolis, Indiana for a cost not to exceed $1.32 per gallon and a total cost not to exceed the Fiscal Year 2015 Board approved budgeted amount.
Financial Impact
The Fiscal Year 2015 Budget has sufficient funds requested in line item 010-5002-462600 for the purchase of 6,000 tons of salt.
The Fiscal Year 2014 Budget is currently over budget. General Fund contingency funds are needed for the immediate purchase of salt and de-icing supplies.
Recommended Action/Motion
I move to approve the use of contingency funds from the general fund in the amount of $200,000 for the immediate purchase of salt and de-icing liquid;
And
Approve the purchase of road salt from Cargill Incorporated Salt Division of North Olmsted, Ohio, for the 2014-2015 winter season, for a cost not to exceed $53.84 per ton and a total cost not to exceed the remaining Fiscal Year 2014 budget and the Fiscal Year 2015 Board approved budgeted amount;
And
Approve the purchase of bulk de-icing liquid from Road Solutions Inc. of Indianapolis, Indiana for a cost not to exceed $1.32 per gallon and a total cost not to exceed the Fiscal Year 2015 Board approved budgeted amount.