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Posted on: September 17, 2018

City Seeking Proposals To Transfer Asphalt Plant To Service Local Demand

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Montrose, CO – The City of Montrose is issuing a request for proposal from local companies looking to add asphalt production to their portfolio of service by entering into an agreement to take over operation of the city's asphalt plant. 


The city issued the request for proposal, (RFP) after a second company expressed interest this week in taking over the city's small batch asphalt production plant. The city was preparing to enter into an agreement with Western Gravel to transfer ownership of the city's asphalt plant to Western Gravel, and in return, receive an exchange of asphalt materials and a commitment to maintain small batch operations for a five-year period. 


Currently, the city owns and operates a 1998 Asphalt Drum Mixer asphalt batch plant. The city has also been responsible for the air quality permitting, stormwater permitting, and natural gas fuel source for the plant. 


Over the last five years, city street crews have produced between 2,000 and 3,000 tons of asphalt per year. At full capacity, the batch plant can produce up to 800-tons-per-day. In just three to four days of production, the batch plant can produce what the city’s streets crew typically uses in a year. With the permitting, fuel and startup costs associated with the batch plant operation, it has not been a resource of value to the city in terms of the volume or price-per-ton of asphalt. 


"It has however been a resource of value in the fact that it allows the city streets crews to produce asphalt on an as needed basis and when suppliers in the area will not produce asphalt, especially small batches," said Public Works Manager Jim Scheid in a letter to city councilors Monday. "This exchange authorization would allow the batch plant to remain available to the City of Montrose and the Montrose area." 


Presently there is no requirement for the city to RFP for this type of arrangement, but city administrators agreed it was wise to postpone the agreement to hear what other Montrose based companies could offer. 


The second company, Rocky Mountain Aggregate, told city administrators they were changing the scope of their services that could include the addition of asphalt delivery. Before Rocky Mountain Aggregate approached the city, Western Gravel was the only company expressing interest in an agreement. 


The decision to transfer ownership of the asphalt plant to a private company is a cost-saving move that will still ensure the city can properly maintain city roadways. 


City Manager Bill Bell said city staff would be looking to evaluate multiple proposals to find the find the best value for the Montrose community. 


"It is important to keep in mind that this is not about selling a piece of equipment to get the highest dollar, but instead, this is about preserving a "service" of small batch asphalt production to service the city and many small contractors throughout Montrose into the future," Bell said. 


It is expected that city staff will deliver recommendations to the City Council in October in an open work session. 


For more City news visit: CityOfMontrose.org.

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