The La Joya Independent School District terminated an agreement with Performance Services Inc. on Monday amid a federal investigation.
Directors voted to stop paying Performance Services Inc. to oversee Phase II of a nearly $36.6 million “energy savings” project. They terminated the contract after documents filed in federal court linked the company — and La Joya ISD — to a massive corruption and kickback scheme involving more than a dozen politicians in western Canada. Hidalgo County.
“With everything that’s happened, with all of the investigations and all of the wrongdoing under the table that’s come to light with this contract, I personally don’t feel comfortable with the District doing business with them. at this point,” Administrator Alex Cantu said. “Voiding the contract and resolving any disputes in open court is the best way, I think, to clear things up for the public.”
The administrators made the decision after meeting with an attorney in executive session.
“The legal department introduced him and recommended him,” administrator Espie Ochoa said. “And so we followed the legal advice.”
Performance Services Inc., an Indiana-based company, persuaded directors to borrow millions for LED lights, solar panels and other projects that would reduce energy costs.
As part of Phase II, which included the construction of solar panels and the installation of artificial turf, La Joya ISD and Performance Services Inc. signed a “Performance Guarantee Agreement”.
The company guaranteed that La Joya ISD would save at least $2 million per year.
“At the end of each guaranteed annual period, the actual annual savings will be compared to the guaranteed annual savings to determine if the guaranteed savings have been achieved,” according to the agreement. “If the actual savings for that one-year period is less than the guaranteed annual savings amount, the provider will pay the owner a cash refund for the difference between these amounts.”
As part of the deal, La Joya ISD promised to pay nearly $341,000 in “energy monitoring” fees.
“PSI has provided La Joya ISD with lighting, HVAC and other upgrades that have dramatically improved school learning environments while significantly saving energy and other utility expenses,” said Jim Adams, chief executive of Performance Services Inc. in Texas, in a statement. “The district has already saved more than $3 million in energy costs with these upgrades. We hope that La Joya ISD will continue to benefit from these improvements despite their decision to eliminate our monitoring services. Our warranty agreements allow our performance assurance team to actively monitor the energy performance of PSI projects to ensure that our customers receive their optimum value.
In 2019, when the trustees approved Phase II, they voted without any public discussion on how much La Joya ISD would borrow, the interest rate, or the repayment schedule. They also did not explain why La Joya ISD tried to add race tracks, security gates and radios to an “energy saving” project.
Ochoa suggested they hold a workshop to discuss the project, but her concerns were dismissed.
However, information that has surfaced in a series of federal corruption cases may explain why the school board rushed to approve Phase II.
Documents filed by the U.S. Attorney’s Office for the Southern District of Texas detail how former school board administrator Armin Garza and Andres “Andy” Morales, a major player in West Hidalgo County politics, pushed local governments to approve contracts with Performance Services Inc.
In the case against Morales, prosecutors referred to Performance Services Inc. as “Company A.”
“It was part of the conspiracy that MORALES would conspire with others to grant bribes and kickbacks directly and indirectly to the co-conspirators in exchange for official votes and motions in favor of the contracts offered by Company A,” according to criminal information against Morales. .
The criminal information also mentions “Person A”, an employee of Performance Services Inc.
“It was further part of the conspiracy that Person A would facilitate Company A’s selection of sub-contractors under the direction of MORALES or other co-conspirators,” according to criminal intel. “Several contractors allegedly funnel bribes and kickbacks to MORALES and co-conspirators as a condition of their employment.”
Garza and Morales, who pleaded guilty to conspiracy charges, aren’t the only people involved in the scheme.
Former Peñitas councilman Alex Guajardo and former La Joya ISD administrator Jose Luis Morin pleaded guilty to corruption charges.
Guajardo received at least $275,000 during the conspiracy and confessed to “committing overt acts that resulted in the distribution of thousands of dollars received to several co-conspirators who served as directors of La Joya ISD and a co-conspirator who was also a director at La Joya ISD.
Neither the court documents nor the prosecutor identified the administrators by name.
Adams, chief executive of Performance Services Inc., said the company was unaware of the kickback program.
“In 23 years of operation, there have been no accusations that PSI or any of our employees have ever acted illegally on any of our past 604 projects,” Adams said in a statement released. January 11. “PSI has not nor will we tolerate any unlawful behavior on the part of our employees, partners or contractors.”
The information, however, convinced the school board to cancel the agreement with Performance Services Inc.
“It’s the right thing to do,” said Board Chair Alda T. Benavides. “This company is so tied to our district and other entities that it was in the district’s best interest that we end our association with them.”
Administrators raised the issue, Benavides said, and made the decision after consulting with attorneys.
“We want to do what’s right for our district and for our students and for our staff,” Benavides said. “And we want to reassure our community that we’re here to do what’s right and address what needs to be resolved.”