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Home My WebLink About67-08 ResolutionRECORD OF RESOLUTIONS 67-OS Resolution No. Blank. Inc.. Farm No. 30045 Pas.~~ed 20 A RESOLUTION ACCEPTING THE LOWEST AND BEST BID FOR THE PROCUREMENT OF ROCK SALT AND AUTHORIZING THE CITY MANAGER TO ENTER INTO A CONTRACT FOR SAID COMMODITY. Section 3. That this Resolution shall take effect and be in force at the earliest date permitted by/laws. Passed this / 7 ~ day of -e ~ X008. ~~i~ ./~. WHEREAS, a reverse auction was conducted on August 20, 2008 to obtain competitive bids for the purchase of rock salt; and WHEREAS, Council has determined that the bid submitted by Cargill Deicing Technology, Inc. for said commodity in the amount of $64.75/ton for piled delivery constitutes the lowest and best bid. NOW, THERE~RE BE IT RESOLVED by the Council of the City of Dublin, State of Ohio, of the elected members concurring: Section 1. That the bid submitted by Cargill Deicing Technology, Inc. for the above referenced commodity, in the amount of $64.75/ton for piled delivery, is hereby accepted. Section 2. That the City Manager is hereby authorized to enter into a contract with Cargill Deicing Technology, Inc. for the procurement of said commodity as specified above and within said bidder's bid proposal on file in the Department of Finance. ATTEST: Clerk of Council CITY' OF DUSLIN_ Office of the City Manager 5200 Emerald Parkway • Dublin, OH 43017-1006 Phone: 614-410-4400 • Fax: 614-410-4490 TO: Members of City Council FROM: Jane S. Brautigam, City Manager ~--~o~- ~ {~ DATE: September 12, 2008 U INITIATED BY: Ronald L. Burns, Director of Streets & Utilities Michele Hoyle, Budget Manager Summary RE: Resolution 67-08, Authorizing the Purchase of Rock Salt Memo Attached for your consideration is Resolution No. 67-08 authorizing the City Manager to enter into a contract for the purchase of rock salt for the 2008-2009 snow removal season. This commodity was competitively bid using reverse auction, the new bidding option provided in the competitive bidding process changes authorized in Ordinance 41-08. As you will recall, this bidding method allows for real-time online competitive bidding; in this case, two bidders participated. Bidding opened at $104.64 per ton for piled rock salt and closed approximately 90 minutes later with the lowest bid of $64.75 for the commodity. Prior to the reverse auction, staff was advised by Bid Bridge of recent pricing for this commodity in other reverse auctions so that the reasonableness of the City's bid could be evaluated. Staff recommends the bid be awarded to Cargill Deicing Technology, the lowest bidder. Cargill's bid of $64.75 per piled ton represents a 31% increase over last year's price of $49.39 per piled ton. However, given the apparent limited availability of rock salt in our area, as described in the attached article from the Columbus Dispatch dated September 6, 2008, acceptance of this bid is in the City's best interest. For comparison, following are the bids received recently for an area cooperative contract: Entity Estimated Quantity (Tons) Bid Prices/Piled Ton City of Upper Arlington City of Westerville City of Kettering City of Huber Heights Green County Highway Dept City of Dayton Franklin County 3,000 $72.1 5 4,000 No Bid 4,000 $73.05 4,000 $'105.73 7,500 $73.68 '12,000 No Bid 21 ,000 No Bid The bid was based on an estimated purchase quantity of 10,000 tons with an estimated cost of $647,500. This amount reflects an increase over previous estimated quantities of 8,000 tons on which the 2008 budget estimate of $400,000 was based. The quantity increase is due to increased usage of salt during the 2007-2008 snow season. Based on past history, 8,000 tons is likely to be sufficient. However, given the substantial price increase, examination of the City's policies regarding snow removal maybe appropriate during 2009 Operating Budget discussions. Memo to Council re. Resolution 67-08 -Bid Acceptance -Rock Salt September 11, 2008 Page 2 of 2 Recommendation V~~e recommend passage of Resolution 67-08, authorizing the City Manager to enter into contract with Cargill Deicing Technology, the low bidder and current vendor for this commodity, at the price of 864.75 per ton for piled delivery. Attachment S.'~Councit Packets\2008\09-15-08 Council Packet\Ites 67-08 -salt bid -cover mcmo.doc Salt hard to come by this year Amid higher demand and prices, Franklin County, some Columbus suburbs still waiting on bids Saturday, September 6, 2008 3:12 AM By Elizabeth Gibson THE COLUMBUS DISPATCH r,~+ej DORAL CHENOWETH III ~ DISPATCH The 75,000-ton salt pile at Henderson Materials off I-670 supplies many central Ohio municipalities, but they are counting on more for the winter. Marc Vincken is shown working on the pile. DispatchPolitics . DispatchPolitics.com eNt~ Complete coverage of the election and Ohio politics l! .The Road to Washington ,,,,,u*~' Dispatch reporters blog from the campaign trail . The Daily Briefing The Dispatch's public affairs team sates the appetites of political junkies with bite-sized portions of the news and what's behind it. . Buckeye Forum Veteran political reporters examine Ohio politics in this weekly podcast. Icy streets might be a few months away for Franklin County, but government agencies across Ohio are scrambling to secure their road-salt stockpiles. "None of us are going to be able to have completely black streets this year," said Cindy Strayer, who organizes a bidding cooperative for salt contracts in Ohio. After heavy demand strained supplies last winter, Illinois, Wisconsin and Minnesota requested extra salt as a precaution. They and other summer and spring bidders laid claim to most of the salt on hand and drove up prices before Ohioans started looking, industry experts said. "All the large agencies soaked up 2 million tons more than last yeaz. That's the size of a small salt mine;' said Richard Hanneman, president of the Salt Institute trade association. Early bidders normally pay higher prices, but Ohio's late-bidding strategy backfired this year, Strayer said. Of the 105 agencies that organize their contracts through the cooperative Southwest Ohio Purchasers for Government, more than half have received no offers from suppliers. The Ohio Department of Transportation has not completed its separate bidding process, but spokesman Scott Varner said it is taking a little longer and proving pricier than usual. Cargill Salt and Morton Salt still made offers to old clients, and Columbus continued an existing contract. However, Southwest Ohio Purchasers received no bids from three companies it normally courts. North American Salt Co. submitted bids for imported salt, but at $154 a ton, more than three http://www.di spatchpolitics.com/live/content/local_news/stories/2008/09106/copy/saltbids.... 9/9/2008 times what most agencies pay now "No one ever expected not to receive a bid," said Larry Wazd, superintendent of the Reynoldsburg Street Department. "It's possible that some agencies will run out of salt. It's a scary proposition." Most communities without bids said they are stockpiling and planning to conserve. City staffs across central Ohio are rushing to secure approval to fill storage barns and pile extra salt in parking lots before annual contracts expire at the end of this month. "We've never had this before," said Frank Wiseman, director of the Westerville Public Service Department. "We'll probably get a bid next time around, but it'll probably be more expensive." Southwest Ohio Purchasers plans to fish for bids again next week. Franklin County pulled out of the group without a bid, said Tom Nutini, highway superintendent for the county engineer's office. "It's very possible that we may not find a supplier," Nutini said. "We don't know." The county can store 21,000 tons of salt and plans to top off its reserves before the current contract expires, Nutini said. The county hasn't needed more salt than that since the 2002-03 winter, when it used 22,749 tons. The county will try Lo conserve salt by using more salt brine, pre-treating roads and calibrating equipment to minimize waste, Nutini said. The county also might consider not laying salt on low-traffic roads during off-peak hours. "I'm hoping that no one in Franklin County notices any of this," he said. "We have to do more with less." The county's current contract is with American Rock Salt, which did not bid through Southwest Ohio Purchasers this year. "We had a heck of a winter last year, and all of the companies were cleazed out," said Gunther Buerman, chairman of American Rock Salt. Upper Arlington and New Albany snagged some of the lowest bids in the state for a little more than $65 per ton from Cargill though Southwest Ohio Purchasers. That was still almost 1 times what they pay under their current contracts. Columbus has along-term contract with Cargill and hasn't faced a huge price spike, said Mary Carrah Webster, assistant director of public service. Although some village and city staff members said they're hoping to rely on the county or Columbus if the winter gets rough, Webster said it's too early to discuss whether Columbus would be willing to share salt. eQibson @ dispatch.com http://www.dispatchpolitics.com/live/content/1oca1_news/stories/2008/09!06/copy/saltbids.... 9/9/2008