State senator drafting bill to address potential conflicts of interest at Agua SUD — again

State Sen. Juan “Chuy” Hinojosa appears headed for another showdown with the Agua Special Utility District.

Concerned about conflicts of interest, Hinojosa said he’s drafting a bill to prevent utility district administrators from moonlighting as contractors — an arrangement that allows them to collect two checks from the utility district and, in some situations, ultimately oversee their own work.

senator juan hinojosa“We’re working on a bill addressing conflicts,” said Hinojosa, D-McAllen.

With the bill a work in progress, the precise impact remains difficult to predict.

The bill may address what happened on Sept. 17, when the utility board declared an emergency and awarded two contracts.

After warnings about low water pressure at Juarez-Lincoln High School, which shut down the air conditioning system and prevented toilets from flushing, the utility board declared an emergency.

The utility board awarded a contract to Edinburg-based CSJ Group to design and build a booster station, which would fix the problem by increasing water pressure.

CSJ Group is owned by utility district General Manager Jose E. “Eddie” Saenz. The district already pays him $17,500 per month to serve as general manager.

The utility board also hired M2 Engineering to supervise CSJ Group. M2 Engineering is owned by utility district Engineer Emigdio “Milo” Salinas.

Without any discussion about the potential conflict of interest, the utility board unanimously approved both contracts.

“How can the general manager oversee his own work?” said utility board Director Homer Tijerina, who represents rural Hidalgo County customers.

While concerned about conflicts of interest, Tijerina said he couldn’t comment further because he hadn’t seen the bill.

Saenz is also handling parts of the Palmview sewer project that started before he became the general manager.

“It’s a very important project, Palmview, just to be changing engineers in the middle,” said utility board President Roger Hernandez. “That, to me, is the biggest concern.”

Hernandez said the utility district would be happy to meet with Hinojosa, explain the projects and provide whatever information the senator requests.

“We want to make sure everything’s done correctly and properly,” Hernandez said, adding that all contracts with Saenz were reviewed by an attorney and approved by the board.

It’s deja vu for Hinojosa and the utility district.
When the Texas Legislature met in 2017, conflicts of interest at the utility district caught Hinojosa’s attention.

Four members of the utility board worked for the La Joya Independent School District. Two members of the school board worked for the utility district.

The reciprocal employment relationship apparently didn’t bother either board.

With about 4,400 employees, the school district is the largest employer in western Hidalgo County. The utility district mirrored Palmview and Peñitas, where a majority of elected officials work for the school district.

Hinojosa, though, became concerned about the arrangement after the utility board hired then-school board President Oscar “Coach” Salinas and then-Vice President Armin Garza.

To prevent any potential conflicts of interest, Hinojosa authored Senate Bill 814, which prohibited reciprocal employment relationships at the utility district. State Rep. Terry Canales, D-Edinburg, shepherded the bill through the Texas House.

The utility district, which couldn’t stop the bill, devised a backup plan.

Then-Executive Director Oscar Cancino approved five-year employment contracts with Salinas and Garza on May 1, 2017. Just two months later, the utility district approved hefty settlement agreements.

Salinas walked away with $221,000. Garza got $268,000.
The six-figure payments triggered an investigation by the Texas Rangers and the Hidalgo County District Attorney’s Office.

After reviewing what happened, Hidalgo County District Attorney Ricardo Rodriguez concluded that prosecutors couldn’t make a case. The District Attorney’s Office sent a letter to the Texas Rangers on July 13, 2018, formally announcing the decision.

“Based on the information we have obtained, I do not believe there is sufficient evidence to obtain convictions. If additional credible evidence comes to light, we are amenable to reopening this investigation,” according to the letter signed by Assistant District Attorney John Ball. “This declination of prosecution is not, in any way, an endorsement or sanctioning of Agua SUD’s conduct relating to the contracts in question.”

The utility district felt vindicated. Salinas and Garza, who spent months under a cloud of suspicion, breathed a sigh of relief.

In August, though, Texas Ranger Bobby Garcia called the District Attorney’s Office about renewing the investigation.

What prompted that call remains unclear.

When the Progress Times asked about the call and the apparent decision to reopen the investigation, a Department of Public Safety spokesman responded that “the case was never closed.”

By that point, the Department of Public Safety had already released the Texas Rangers report and key evidence. Asked why the Department of Public Safety would release evidence from a case that hadn’t been closed, the spokesman didn’t respond.

The day after the Progress Times reported that development, however, the Department of Public Safety closed the case.

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