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Agua SUD and Palmview reach tentative agreement, plan to drop sewer litigation

After months of acrimony, the Agua Special Utility District board and the Palmview City Council struck a tentative agreement last week to resolve a long-running feud.

Palmview and the utility district plan to dismiss a lawsuit over the city’s attempt to build a separate sewer system. They’ll also drop a related administrative proceeding before the Texas Public Utility Commission.

AguaSUDLogoAlong with abandoning the litigation, the utility district will acquire sewer infrastructure from Palmview and buy project materials purchased by the city.

“We’re still fine-tuning the details,” said attorney Frank Garza, who represents the utility district.

The knock-down-drag-out fight — financed on both sides with public money — started in 2017.

Palmview wanted to spur development on Expressway 83 between La Homa Road and Breyfogle Road.

While the utility district had plans to provide the area with sewer service, Palmview feared national retailers and chain restaurants wouldn’t wait.

The city started building a separate sewer system without permission from the utility district.

When the utility district complained, Palmview filed a lawsuit and requested a temporary restraining order. The aggressive litigation backfired.

State District Judge Letty Lopez ripped Palmview for lawless behavior and signed a temporary injunction against the city, concluding the sewer project would cause the utility district irreparable harm.

“You know what the irreparable harm is? If you don’t follow the law, there’s lawlessness,” Lopez said, lambasting the city during a hearing on May 22. “That’s the irreparable harm. That cities can then do whatever they want: And not follow procedures. Not follow laws.”

The temporary injunction left the city sewer project in limbo. Meanwhile, the utility district moved forward with a long-awaited sewer project for Palmview residents.

Mayor Pro Tem Joel Garcia and utility board Director Esequiel “Zeke” Ortiz Jr., who represents Palmview customers, met during December to mend fences.

The informal discussions brought the city and the utility district together last week, when they negotiated a tentative agreement.

At 5 p.m. on Jan. 14, the City Council held a special meeting to discuss the lawsuit. After the City Council adjourned, City Manager Michael Leo and City Attorney Eric Flores met privately with the utility board.

Leo also addressed the utility board during public comment, thanking members for working with Palmview.

“There is an eagerness and a willingness to work together on behalf of the city of Palmview,” Leo said, adding that the City Council wants to cooperate with the utility district whenever possible. “So we thank you gentlemen for working with us on this endeavor.”

Asked about the negotiations, Palmview released a statement.

“At our last special meeting, the council came together to discuss and take action on a Rule 11 agreement put forth by Agua SUD. After making a decision regarding the Rule 11 agreement, both the city of Palmview and Agua SUD have taken a cohesive step forward in working together,” according to the statement. “Negotiations regarding the agreement are still being made, however, we are optimistic a settlement will be reached in order to ensure our residents are provided for in the best possible way!”

The Rule 11 agreement, which is an agreement between attorneys, would put the deal in writing.

“In the end,” said Garza, the utility district attorney, “Whatever’s good for Palmview City Hall and Palmview residents is good for Agua and Agua customers.”

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