Title
Resolution to Approve the Purchase of Ice Control Salt through the Michigan Delivering Extended Agreements Locally (MiDEAL) from Detroit Salt Company, LC for Early Fill ($184,680.00) and Seasonal Backup Supply ($233,280.00) and Appropriate $168,000.00 (8 Votes Required)
Memorandum
Attached for your review and approval is a resolution to purchase bulk ice control salt to control snow and ice accumulations on City streets during the upcoming winter.
Annually, the State of Michigan solicits a state-wide bid for bulk ice control salt, allowing those who participate to receive advantageous pricing. The bid seeks pricing for early fill and seasonal backup supply of ice control salt. Detroit Salt Company, LC was the low bidder for both early fill and seasonal backup supply.
Early Fill: - 3000 tons at $60.56/ton + $3,000.00* for truck loading variances - $184,680.00
Seasonal Backup - 4000 tons at $57.57/ton + $3,000.00* for truck loading variances - $233,280.00
*Due to the difficulty of loading trucks to the exact tonnage ordered, we are seeking an additional $3000.00 above the quantity requested to be able to pay the vendor, Detroit Salt, if overloading should occur on the early and seasonal backup fills.
As a result of the City using the MiDEAL bid, the quantities are guaranteed. The contract allows the City to purchase up to 130% of the contracted quantity or only 80% of the contracted quantity, as conditions warrant. Should the City need more than 130%, the material cost would be based on the market rate. This rate is based on supply and demand. The majority of road salt used in Michigan is imported from other areas such as Ontario, Cleveland or Chile.
City Staff suggests approving the 30% overestimate allowable by contract for the Seasonal Backup be approved as a contingency for potential PO increases due to the unpredictability of weather. 1200 tons at $57.57/ton + $1,000.00* for truck loading variances - $70,084.00.
The Public Works Unit of Public Services utilizes electronically calibrated controls attached to all salt spreaders and brine application equipment. These controls regulate the amount of salt or brine being applied. Usage is also tracked for inventory purposes. With this type of equipment, the City is able to reduce salt waste during application.
Budget/Fiscal Impact: Commodities such as ice-control salt are managed through the inventory system established within the Central Stores Fund. We are requesting an increase of $168,000.00 in both the expenditure and revenue budgets of the Central Stores Fund.
As the salt is distributed and used, the associated costs will be expensed to the appropriate operations and maintenance budgets based on where the salt is placed. These charges will generate an offsetting revenue within the Central Stores Fund.
This budget adjustment is necessary due to higher-than-anticipated market prices for ice-control salt.
Staff
Prepared by: Robert West, Assistant Public Works Manager
Reviewed by: Paul Matthews, Public Works Manager
Jordan Roberts, Public Services Area Administrator
Approved by: Milton Dohoney Jr., City Administrator
Body
Whereas, The City uses ice control salt on major streets, local streets, and other public spaces during the winter months in response to snow and ice accumulation, with care given to achieving a balance between traffic safety and environmental impacts;
Whereas, Competitive bids were solicited by the state of Michigan for early fill and seasonal backup supply of bulk ice control salt. Detroit Salt Company, LC submitted the lowest responsible bid for both early fill and seasonal backup supply;
Whereas, The bid prices are firm through August 31, 2027;
Whereas, Detroit Salt Company, LC is an approved vendor of the State of Michigan and complies with the City’s Non-Discrimination Ordinance; and
Whereas, Commodities such as ice-control salt are passed through an inventory system within the Central Stores Fund;
RESOLVED, That City Council approves a purchase order to Detroit Salt Company, LC for the supply of ice control salt for early fill and seasonal backup supply in the amounts of $184,680.00 (3,000 tons @ $60.56/ton + $3,000.00 for truck loading variances for early fill) and in the amount of $233,280.00 (4,000 tons @ $57.57/ton + $3,000.00 for truck loading variances for seasonal backup);
RESOLVED, That a contingency amount of $70,084.00 be established for potential necessary increases to the Seasonal Backup purchase order and that the City Administrator be authorized to approve adjustments that do not exceed that amount;
RESOLVED, That City Council appropriate $168,000.00 to the Central Stores Fund revenue and expenditures budgets with the source of revenue being the offsetting revenue generated by the placement of the ice control salt; and
RESOLVED, That the City Administrator be authorized to take the necessary actions to implement this resolution.