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Investigtion ?

Discussion in 'Ice Management' started by grandview, Sep 12, 2008.

  1. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

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    CHICAGO -- With road salt costs spiking to between two and three times last year's prices, some municipalities are asking the Illinois attorney general's office to investigate the increases and why Illinois communities are being charged far more than their counterparts in neighboring states.

    "It appears there's obviously some market manipulation going on," Oak Park Village Manager Tom Barwin said. "I've never seen anything like this in my 25 years."

    Oak Park last week adopted a resolution requesting the Illinois attorney general look into the spike in road salt prices. Neighboring Forest Park followed suit Monday. The West Central Municipal Conference sent the proposed resolution to its 37 member communities, and the organization is expected to take up the issue this month.

    The demand for salt is high for the Chicago region because last winter's storms depleted emergency salt supplies, and floods last spring reduced salt mining. Last winter Oak Park used about 7,000 tons of salt at a cost of about $220,000. This year, that same amount will cost $800,000, Barwin said.

    The increase is prompting Oak Park to cut its salt order by 40 percent, and the village is warning residents the roads will not be salted as heavily this year.

    Using less salt will have its advantages, Barwin said. Not only will it stretch the supply, but it will be better for the roads and the environment.

    It also will be better for the budget—a concern for neighboring Forest Park.

    Forest Park Village Administrator Michael Sturino said the bids for road salt were twice as high as what the village had budgeted.

    Sturino said he would like to know why there now appears to be only a few salt suppliers.

    And Barwin said he would like the attorney general's office to look into why communities in the Chicago area are being charged so much more than those in Wisconsin and Michigan.

    One of the Illinois bids—made through the state's Department of Central Management Services—is $136.24 a ton, Barwin said. In Michigan, where Barwin worked for many years, some towns, school districts and counties are paying between $39.50 and $54.99 a ton, he said.

    Road salt prices in Wisconsin are averaging $49.85 for many communities, said Rob Cole, Oak Park's assistant to the village manager.

    The attorney general's office has opened communications with local governments that have expressed concerns about the road salt situation, said Natalie Bauer, spokeswoman for Illinois Attorney General Lisa Madigan.

    But the attorney general's office does not have jurisdiction over pricing unless it becomes an issue during a natural disaster, Bauer said.

    However, concerns about antitrust issues or collusion by road salt suppliers would be under the attorney general's purview, she said.

    Price concerns are only the latest of the road salt issues in Illinois. Communities in Lake and McHenry Counties are scrounging to find suppliers because no companies submitted bids through the state for those areas.

    Western Springs' supplier, Morton Salt, is charging $103 a ton compared with $45 a ton in past years, village officials said. The price increase is forcing the village to buy less and hope for a mild winter.

    As last winter wore on and salt prices rose as supplies were depleted, Western Springs—like other municipalities—sent village employees to retrieve cheaper salt from other states.

    An article on the salt industry's Web site, Salt Institute, says the problem is that local governments greatly increased their orders in the wake of last winter.

    But Barwin isn't convinced. Last year, suppliers said there was a shortage because the Mississippi River was frozen and barge traffic couldn't get through.

    "The river has been thawed for nine months," he said.

    Now suppliers are maintaining that fuel prices are driving up the cost. But Barwin said fuel prices have not doubled or tripled since last winter.

    "There's no correlation," he said. "Why is Illinois in such a bind?"

    Friday, September 12, 2008
  2. Camden

    Camden PlowSite Fanatic
    Messages: 6,604

    That is insane! :eek:
  3. hydro_37

    hydro_37 PlowSite Veteran
    from iowa
    Messages: 3,790

    Somebody is making some serious cash this year.
  4. WildRidge

    WildRidge Member
    Messages: 80

    We are having the same problem around here. This story reminds me of when a local concrete company got busted for price gauging.
  5. cretebaby

    cretebaby PlowSite Veteran
    Messages: 4,162

    there technically is no such thing as price gouging

    i agree that this salt situation sucks but i am using it to my advantage

    i have said it before and im saying it again, a fair price is what two people agree on, if you dont like the price dont buy it
  6. kcplowmata

    kcplowmata Senior Member
    from kc
    Messages: 174

    yea there is such a thing. just because you dont think so. the reason why there is such a thing is because we have made such a thing. and salt mines and suppliers are doing the same as oil companies gouging
  7. cretebaby

    cretebaby PlowSite Veteran
    Messages: 4,162

    actually there is a difference gasoline is priced, forgive me i dont have the exact terms, on a futures and/or commodity market not by the oil companies big oil could do themselves a lot of good by educating the consumer

    if you where one of three snow contractors in your townand say one quit and the other one died leaving only you would you raise your prices? your damm right you would
    Last edited: Sep 12, 2008
  8. bike5200

    bike5200 Senior Member
    from Ky
    Messages: 437

    It's basic supply and demand. If everyone wants what I have, you can pay the price I want or go some where else.

    If on the other hand, a couple of companies are holding supply to drive price up that is something that should be dealt with.
  9. cretebaby

    cretebaby PlowSite Veteran
    Messages: 4,162

    but nothing says i have to sell what i produce, if i was a salt company right now i would sell just enough to cover my expenses and make some big piles of salt then midwinter it might be worth double what it is now

    just a idea
  10. SuperBlade

    SuperBlade Member
    Messages: 62

    the funny thing is that some excuse will arise and nothing will change
  11. ptllandscapeIL

    ptllandscapeIL Senior Member
    Messages: 495

    oak park is a very wealthy town they can afford it