MISSION — Former Mayor Beto Salinas filed a lawsuit against the city and its current mayor for a $20 million contract the city entered into with an energy savings company that was recently tied to a wide-ranging FBI investigation.
Salinas argued in his lawsuit that the city violated state law when it agreed earlier this year to pay Performance Services Inc., or PSI, about $20 million to have it replace all household water meters and LED lighting in public buildings in a move that the company promised would save the city money.
City officials, however, “did not follow the proper procurement and competitive bidding process” and therefore created “an illegal debt,” attorney Rick Salinas, who is also the former mayor’s son, said in a news release Thursday.
According to the document, PSI approached the city in August 2018, a month after current Mayor Armando O’Caña took over the mayoral post.
“But it wasn’t until March 8, 2021, the council passed Resolution 1722 in which it authorized Mayor (Armando O’Caña) to sign a contract with PSI,” the release stated.
That contract stipulated the same company would finance the $16.7 million project and charge Mission an additional $4.1 million in interest for a total of $20.8 million to be repaid over a 12-year period.
“At first, it had been said that there would be no payment for the first 2 years, but on March 26, 2021 the city received the first invoice for an amount of $1,473,514, which was paid on April 16, 2021 with check #216384,” Salinas’ news release noted. “Keep in mind, they paid this without ever having budgeted this expense.”
It’s an argument the former mayor also made in his lawsuit, along with an allegation that the notice for the request for qualifications was not published in the manner provided for competitive bidding.
The suit also claims Mission “failed to require that the projected energy savings be reviewed by a licensed professional engineer that was not an officer or employee of Performance Services, and/ or was not otherwise associated with the contract.”
“I don’t know what the 3 members of the council who approved this project were thinking by authorizing a debt for the city of almost $21,000,000,” the former mayor said in the prepared statement. “I honestly don’t think they understand the numbers.”
In a phone call Thursday, Salinas also noted that the company and O’Caña were recently subjects of a grand jury federal subpoena in what appears to be a wide-ranging FBI investigation.
In June, the Progress Times reported that the city of Mission, AGUA Special Utility District, and La Joya Independent School District had been served with subpoenas that requested information on PSI and a number of other companies and individuals.
All three entities have entered into similar energy contracts with the Indiana-based company that pitches “guaranteed energy savings.”
O’Caña declined to comment Thursday on the lawsuit or the subpoenas the city received, which name him, PSI and Mission City Councilwoman Jessica Ortega, according to the Progress Times.
