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Judge hears arguments in Performance Services Inc. lawsuit

A judge heard arguments Monday on whether or not a controversial deal between the city of Mission and Performance Services Inc. created an illegal debt.

The hour-long hearing, though, didn’t end with a decision. Before making a decision on the debt, state District Judge Noe Gonzalez must decide if the lawsuit was filed in a timely manner.

“Folks, I’ll review everything that’s on file and let you all know as soon as I can, OK?” Gonzalez said Monday morning.

The Mission City Council approved a contract with Performance Services Inc. in January.

Under the contract, Performance Services Inc. agreed to replace old water meters and install energy-efficient LED lights in city buildings. Mission agreed to borrow nearly $17.3 million for the project.

Performance Services Inc. promised the water meters and LED lights would pay for themselves — and pledged to cover the costs if they didn’t.

The La Joya Independent School District and the Agua Special Utility District had already inked contracts with Performance Services Inc.

Mayor Armando “Doc” O’caña, City Councilwoman Jessica Ortega and City Councilman Alberto “Beto” Vela supported the deal. City Councilwoman Norie Gonzalez Garza and City Councilman Ruben Plata didn’t.

Four months after the City Council approved the contract, FBI agents served Mission, La Joya ISD and Agua SUD with federal grand jury subpoenas for records on the company. Performance Services Inc. denied any wrongdoing.

Beto Salinas, however, pushed the city to cancel the contract. When the city pressed forward, he filed a lawsuit against Mission and O’caña.

“The City of Mission has created a debt and has not made any provision for the payment of such debt, or interest thereon, in contravention to the Texas Constitution,” according to the lawsuit. “The contract creating such debt is therefore void.”

Beto Salinas also requested a temporary injunction to block Mission from making an “illegal expenditure of public funds.”

Both the city and Performance Services Inc., which intervened in the lawsuit, denied the contract had created an illegal debt.

Gonzalez, the state district judge, sent them to mediation. When that didn’t work, they returned to court Monday for a hearing on the request for a temporary injunction.

Both sides brought witnesses, but none of them testified. Gonzalez heard more than an hour of arguments from the attorneys instead.

“This is a problem that’s occurring throughout the state,” said attorney Rick Salinas of Mission, who represents his father. “I can tell you that, not too many miles west of here, Agua SUD is having the same problem.”

Attorney Benigno “Trey” Martinez of Brownsville, who represents Performance Services Inc., said the lawsuit isn’t actually supported by the law.

“I’ve talked to Mr. Salinas and he’s a great and wonderful attorney and a good friend of mine,” Martinez said. “But I still don’t know exactly what it is he’s arguing.”

The contract is a lease-purchase agreement, Martinez said, which is allowed by Texas law.

“If all the sudden we allow cities to start renegotiating because one administration doesn’t like what the previous administration does, it’s going to affect cities everywhere,” Martinez said.

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