Salem City Councilor Julie Hoy’s efforts to promote a Salem tire shop for a city contract came close to violating city ethics law, prompting a warning from City Manager Keith Stahley, according to city records.
Hoy, a local restaurant owner, was elected to the Salem City Council representing northeast Salem in 2022. She’s challenging incumbent Chris Hoy, no relation, in the mayoral election this May.
Late February emails, which Salem Reporter obtained through a public records request, show that Hoy pushed the city to consider business with locally-owned Cascade Tire Pros over its current contract with the state, and questioned the city’s process for selecting the tires that go on city police, fire and service vehicles.
Under city law, councilors cannot attempt to influence the city’s decisions around contracts. Under council rules, if a councilor’s questions about city matters require more than an hour of staff time, they need to seek council approval by vote for the inquiry.
Hoy told Salem Reporter that her intention was to help a local business that she said was getting “stonewalled” by city officials, and that she did not seek to influence the contract. Stahley said in a separate interview that the issue was resolved in February.
Hoy told Salem Reporter that Cascade owner Ryan Hazelbaker first contacted her in September, frustrated about losing the city’s business in 2017. In a statement Hoy forwarded to city leaders in February, Hazelbaker questioned the city’s tire procurement process and claimed his business offers lower prices than Les Schwab, which gets the majority of the city’s tire spending.
City officials currently get tires through several suppliers, including Cascade, through a state contract and said the model gives them more flexibility to meet the city’s needs.
Hoy said she and Hazelbaker had a meeting in the fall with city leaders about the tire contract, then he reached out again in February saying he felt there was no progress.
The city provided all of Stahley’s Feb. 29 emails to Salem Reporter for free, but didn’t find disclosing all emails from him and Hoy about the city’s fleet tire contract from January and February served the public interest. The city required Salem Reporter to pay $287 before they were released.
On Feb. 27, Hoy emailed Deputy City Manager Krishna Namburi saying their meetings on the subject “made no headway.” Hoy copied Stahley and Chief Financial Officer Josh Eggleston.
“If we can save money on tires… why wouldn’t we? If we can support a local, family owned, Salem business… why wouldn’t we?” she wrote, with ellipses in the original.
She also questioned the decisions of Jim Schmidt, the city’s fleet manager.
“Your response, Krishna, feels driven by Jim Schmidt. I may be pretty new to this… and if he is the roadblock to better business… we deserve better,” Hoy wrote.
Hoy’s email prompted Stahley to reach out to Namburi and Eggleston separately, asking to meet to discuss the situation. In Stahley’s Feb. 27 email to them, he said that he did not tell Hazelbaker to work with Schmidt, and had instead told him to work with NAPA Auto Parts, which procures tires for the city through subcontractors. NAPA can in turn choose any vendor that meets the city’s qualifications and the lowest price.
“My understanding is that we have used the state contract for the majority of our (tire) purchases. I assume that we can’t switch vendors without going through a competitive process. Is there any reason to believe that we should initiate that process?” he wrote.
He also asked Eggleston and Namburi when council’s Rule 14 would apply, which requires councilors get council approval by public vote before directing city staff to put more than an hour of work toward researching something.
Eggleston responded to Stahley the next day, saying he remembered telling Hazelbaker to go through NAPA, not Schmidt. He also said Hoy’s email was “stretching” an ethics rule in the city’s charter.
The rule he cited states that, outside of council meetings, “no council member may directly or indirectly, by suggestion or otherwise, attempt to influence the manager or a candidate for the office of manager in the appointment, discipline, or removal of personnel or in decisions regarding city property or contracts.”
According to the charter, violating the rule could trigger a removal from office by “a court of competent jurisdiction.”
Stahley drafted a response to Hoy that he had reviewed and approved by Namburi, Eggleston and Dan Atchison, the city’s attorney.
Stahley then sent Hoy the response on Feb. 29, telling her that “there is a council rule and charter clause that deal very directly with your inquiry,” citing them.
In his email, Stahley said that city staff had already analyzed the fleet contracts, including a life cycle cost analysis on fire truck tires, considering the cost of tire repairs and the speed of repairs.
He also reminded her that under state and city rules, the city can’t give preference to local businesses unless they’re offering a comparable bid.
“As has been noted repeatedly in the past regarding other procurement issues, we cannot award contracts to local vendors simply because they are local,” Stahley wrote to Hoy. “We must base our decisions on the lowest and best price in a responsive bid. We did that when we chose the state contract.”
The city spent around $467,000 on tires in 2023, $44,000 of which went to Cascade Tire Pros via the NAPA contract, according to city data obtained by Salem Reporter. So far in the 2024 fiscal year, the city spent $71,000 at Cascade Tire of a $253,000 total. The majority of the city’s tire business goes to Les Schwab.
Namburi said Cascade Tire had an exclusive contract to supply tires for Salem’s entire fleet until it expired in 2017.
“At that point, the City decided to utilize the State price agreements to provide more flexibility and better meet operational needs,” Namburi said in an email to Salem Reporter.
She said having multiple vendors “allows flexibility in service locations, tire selection, product availability, repair turnaround time, and lifecycle costs while minimizing vehicle downtime for the operating department to meet their operational objectives. This is particularly crucial for our public safety customers, where minimizing downtime is critical.”
A Feb. 27 email from City Manager Keith Stahley to Councilor Julie Hoy, obtained by Salem Reporter via public records request.
In a Feb. 20 email, Hazelbaker thanked Hoy for her help on the issue, saying he’d been having issues with the city for years. Neither Cascade Tire Pros nor Hazelbaker’s home are in Hoy’s ward.
“Cascade Tire has been part of the Salem business community for over 50 years. Our family business has been built on quality trust and value. We love Salem and want to see it grow and prosper. Councilor Julie Hoy also cares deeply about our community and our future. She has a passion for Salem and supporting the growth of local business,” Hazelbaker said in an email to Salem Reporter.
Hoy said her goal in sending the February email to Namburi was to make progress for the firm’s efforts to have the contract reevaluated and to look further into city spending.
“The city has talked a lot about a revenue problem, and when I hear that somebody can save money, I want to know more about that,” she said.
On calling Schmidt a “roadblock to better business,” she said she was told the fleet manager had not given Hazelbaker a clear direction for communication.
“I don’t know who these people are. And I don’t know who decides who gets what job. (Hazelbaker) was sent to this other person, and he was hitting the ceiling again,” she said. “If this is a personality issue, or something, let’s iron it out. And let’s figure it out and move forward.”
She said she’s not a tire expert, but believed Hazelbaker when he sent the estimates that his business would save the city money.
“I was approached by a small business that felt unheard. I asked tough questions about a process and then I believe I was stonewalled by the city manager with this choice of pathway,” she said.
Newly elected city councilors have a series of orientations with city staff from May through September, Namburi said, where they are guided through council rules, the city charter and ethics requirements. She said it is an “enormous amount of material,” and is not an in-depth training or discussion on any particular topic.
Hoy said the ethics training was brief and “a long time ago.” The rule about the city’s prohibition to give preference to local businesses has been explained by Atchison during contract discussions in council meetings since.
When asked if she intended to influence the city’s tire contract, Hoy said “absolutely not.”
In Stahley’s emailed response to Hoy on Feb. 29, he said that without specific direction from the city council, he would not spend any additional time on the topic. He copied the email to the other seven councilors, and Mayor Chris Hoy.
Stahley told Salem Reporter that after that email, Namburi and Hoy met one more time within the week to talk, but he hadn’t heard any further issues on the topic since. He said he typically includes the rest of the council on such emails as a learning experience.
“I like council to be informed of our processes and our decisions so everybody’s clear and learns from when we have an issue,” he said. “So that when the newspaper article happens people are aware of the circumstances.”
Hoy said she feels that the matter is resolved “until it’s time to dig deeper” on the city’s budget. She said that she believes the cost savings that Hazelbaker presented.
“Why the city wouldn’t do that, I don’t know,” she said.
She said she has no current plans to bring the issue before the city council, and that she feels she could “absolutely” work collaboratively with the Stahley if elected mayor.
“I’ve got more pressing things right in front of me, and I’m going to focus my energies on where they need to be focused at this time,” she said.
Contact reporter Abbey McDonald: [email protected] or 503-575-1251
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Abbey McDonald joined the Salem Reporter in 2022. She previously worked as the business reporter at The Astorian, where she covered labor issues, health care and social services. A University of Oregon grad, she has also reported for the Malheur Enterprise, The News-Review and Willamette Week.
