Weslaco engineering firm sues Donna, says city owes nearly $4.5 million for wastewater project

SWG Engineering of Weslaco alleged in a lawsuit last month that the city of Donna fired it without good cause this summer and now owes the firm almost $4.5 million for work it performed on the city’s wastewater treatment plant. 

Donna hired SWG in 2022 to design additions and upgrades to its wastewater treatment plant as part of an estimated $38.5 million overhaul.

Donna expects its wastewater flow at the current treatment plant to exceed capacity by the summer 2028, and the facility has remained one of the city’s top priorities in recent years.

SWG Engineering initially estimated its services for the plant would cost a little over $4.1 million, but contract amendments over the next two years grew that price to $4,462,061.25.

That figure includes almost $850,000 worth of work SWG says it performed and billed the city for earlier this year, but was never paid.

The suit also says SWG helped the city secure $3.3 million in funding for the project from the Texas Water Development Board.

On May 6, however, the Donna City Council voted to terminate SWG’s contract after discussing it behind closed doors in executive session.

“Such action to terminate the agreement between the parties is for cause due to countless issues that are uncurable (sic) and have destroyed the ability for the parties to move forward,” a May 9 letter from Donna City Attorney Dennis Ramirez to SWG President and CEO Randy Winston said.

The city attorney politely told Winston to refrain from talking to other city staff, to turn over the project files, and to get the firm’s personnel and equipment off Donna’s property.

At the end of May, SWG attorney Dennis Longoria sent the city a letter demanding it rescind the termination, pay SWG its unpaid invoices, and identify any problems with the firm to allow it to address the issues. 

Otherwise, the letter said, Donna could just pay SWG the full $4.46 million.

Donna didn’t pay SWG that money and didn’t rescind the termination.

Instead, the city issued a new request for qualifications seeking engineering firms to design improvements to its wastewater treatment plant.

Only two firms submitted bids, City Manager Jorge L. Peña told the council in June: Trimad Consultants of San Juan and Javier Hinojosa Engineering of McAllen.

Donna’s operations and utilities directors reviewed the bids and selected Hinojosa Engineering — which also serves as the city’s engineer of record — as the best qualified firm, Peña said at a council meeting in June.

Council members agreed with the recommendation and awarded the work to Hinojosa.

Peña said by doing so, the council had gotten the city back on track to achieve attainable goals at its wastewater plant.

Before, he said, the city was “going to be taken for a ride.”

“Prior to us engaging with this [firm], the city was going to be committed to a project that was not going to take place,” Peña said. “Word for word, it is going to be a shelved project, that is exactly what I was relayed by the engineer at the time. However, it was going to come at a cost.”

In the suit filed last month, SWG claimed it was never told about any issues with its work on the project or given a chance to address them.

SWG alleges that, along with the city failing to pay its invoices, the termination constituted a breach of their contract.

“SWG had timely commenced performance under the Contract and continued to perform

until SWG was formally notified by the City that the Contract was being terminated by the City,” the suit says. “Despite that, the City has failed and refused to pay SWG amounts rightfully owed to SWG under the Contract.”

SWG is seeking a judgment against the city for the full $4.46 million it alleges the city owes it under the contract, as well as payment for the work it performed, and attorney’s fees and other costs associated with the lawsuit.

The city, which hasn’t yet filed a response in court, declined to comment on the suit.