By Matt Fredmonsky
Record-Courier staff writer
Road salt prices skyrocketed 50 percent to 300 percent in Ohio this year, and the Ohio Department of Transportation says two of the state's suppliers are partly to blame because of questionable bidding practices that created "county-by-county monopolies."
An ODOT analysis of the state's road salt market and 2008-2009 price increases cites demanding contract requirements, high transportation costs, record snowfalls and non-competitive bidding practices as the primary causes for jumps in the price of road salt.
The report came at the request of Gov. Ted Strickland after many Ohio communities encountered problems in obtaining road salt and high prices when they could get it.
In the report, ODOT Director James Beasley points to bidding behaviors by Morton Salt and Cargill Incorporated in which "the two firms created county-by-county monopolies." Both companies operate mines beneath Lake Erie and other Great Lakes.
But Beasley also is careful to spell out how Ohio statutes, passed in 1983 under House Bill 271, stifle competition.
The laws mandate ODOT buy salt from Ohio producers when two or more in-state suppliers exist and stipulate either Morton or Cargill win any Ohio county when both firms submit a bid for selling Ohio-mined salt.
"Price savings that might result from competition are not realized under this statute," the report states. "When the bids for road salt were received from Ohio suppliers, no ODOT county received more than one bid. Because each county received only one bid from either firm, Morton and Cargill never competed head to head against one another."
The practice has at least one state legislator weighing a change in policy.
State Rep. Kathleen Chandler of Kent, who represents part of Portage County, said she wants to review the laws granting preferences to in-state salt producers when the Ohio House returns to session in January.
"I think that, all things being equal, we should "Buy Ohio,'" Chandler said. "However, we need to be sure we're getting the best value for the money we spend. I think we owe that to the taxpayer. We should revise the law so that we can be more competitive."
The ODOT report also includes rough comparisons of bids from both companies in adjoining states. In one instance, Morton bid salt at $69 and $73 per ton in Covington and Bowling Green, Ky., yet just north of the Ohio River, in Adams County, Morton bid salt at $107.50 per ton.
"We observed that distance (and the typically subsequent increase in cost for transportation) did not play its expected role in Morton's bids, suggesting the presence of non-competitive markets within Ohio," the report states.
But the report also points to uncontrollable factors, such as oil prices surging past $147 per barrel and diesel reaching $4.75 per gallon this year. And the 2007-08 snow season proved a bear, as ODOT used an unprecedented 906,623 tons of salt. The heavy winter also depleted the stockpiles of suppliers and communities.
Further complicating the price issue were "minimum-maximum" regulations in ODOT salt contracts. The contracts require Morton and Cargill to mine and provide a maximum amount of salt to communities, but those contracted communities may only be required to buy, at minimum, one-third of the salt produced.
Scott Varner, deputy communications director for ODOT, said the report shows Ohio needs to coordinate efforts with other states and better understand both Ohio vendors' production processes.
"The report showed there wasn't just one factor, but really a number of different factors coming into play this year," Varner said. "No one will argue that Ohio tax dollars shouldn't go first to helping Ohio workers and companies."