Money pit

County scales back use of Ridge Road pit

Asand and gravel pit purchased just three years ago has been declared uneconomical at current prices by the County’s current Public Works chief Robert McAuley. According to McAuley the cost to extract and treat the material from this recently acquired pit, at $13 per tonne, is nearly double the cost of purchasing the material from an external supplier and having it delivered.

For now the County will drastically reduce its operations on the County-owned pit and will rely on external aggregate suppliers for this material.

It was just three years ago, in April 2009, that then-Deputy Commissioner Ray Ford presented a report to council recommending the purchase of a 187-acre sand and gravel pit from Ridge Road Aggregates. In May of that year, the County paid $2.8 million for the property. In June it borrowed $2.6 million at an interest rate of 5.32 per cent over 40 years to fund the purchase.

In his report, Ford suggested the purchase might save the County as much as $171,500 per year in material costs if it acquired the Ridge Road pit, based on an average cost of $3.50 per tonne. Even after making loan payments the County would be ahead—and as material costs rose in the future, the County would have a secure source of sand and gravel.

“Staff does not see an inexpensive way to develop a new pit in the future nor are we aware of any unused resource available to purchase in the future when our aggregate and winter materials are depleted and we have to purchase from another source,” wrote Ford in his report to council.

Three years later it seems the County is regretting the pit purchase.

McAuley reported to council earlier this month that, due to the high cost of crushing the material to the grade and quality needed by the municipality, it wasn’t economical to continue to using its own pit. Instead it will purchase more from external suppliers.

“The material does not grade to the quality people will buy,” McAuley explained to council. He says the material grades to granular B and must be crushed to produce granular A, the quality the County needs. By the time the County hires contractors to come in and crush the stone—the economics don’t make sense.

“It is cheaper to pick it up in Kingston and have it delivered to the County,” he said.

Council has decided to scale back the use of the pit and wait for a day when aggregate prices climb—making extraction from its Ridge Road pit economical once again.

When that day will come is anyone’s guess. Meanwhile County taxpayers will pay another $157,000 this year to pay down the loan—and each year for the next 37 years.

Some councillors wanted to know if the County shouldn’t sell the pit.

McAuley responded that it was likely too soon to make that call. He did suggest that the property would likely make more sense in the hands of an aggregate supplier with the equipment to convert the material to an economically marketable commodity.

Ironically, Times reader David Gray wrote a letter to the editor suggesting the same thing—just after the County purchased the pit in 2009.

“The pit should have been sold to a business person, the County could have bought their sand from that local business person, the County could have taxed that business, and all the above could have been looked after by someone that knew what they were doing,” wrote Gray in these pages in September 2009.