DPW Says Municipal Asphalt Plant Faces Tradeoffs; Committee Agrees to Release Reserve Funds

The Department of Public Works presented an investigation into the City—s municipal asphalt plant, comparing its costs and production with private-sector suppliers and outlining options including continued operation, upgrade, closure with purchase from private vendors, or a public–private joint venture. DPW reported 2005 city production costs of about $75 per ton versus roughly $67 per ton paid to a private supplier (SEG 1366–1372), noting that much of the difference stems from labor, limited storage capacity, and fixed costs spread over relatively low tonnage.

DPW staff said increasing annual production toward 60,000–80,000 tons or securing guaranteed in‑city customers (other city enterprises) could improve competitiveness; otherwise, the plant would not break even at current volumes. DPW recommended continuing operation while exploring measures to increase sales (including contracting with other city agencies), strategic use of silos/distribution centers, possible joint ventures with the Port, and long-term options with private suppliers (SEG 1541–1560; SEG 1820–1855). The department estimated continuing losses at recent production levels but said shutting down raises concerns about supply reliability for emergency repairs and pothole response.

After discussion of fixed costs, storage constraints, and a recommendation that DPW pursue interagency partnership and audit options, the committee moved to release the reserve funds cited in the agenda and to file the municipal asphalt plant study (committee motion to release; no recorded roll-call vote provided). Committee members asked DPW to work with the Controller—s Office and other city enterprises to test options for increasing tonnage and reducing the plant—s net subsidy.