Odessa Water Lawsuit Adds City Officials, Contractor to Hot Seat

ODESSA, TX – January 27, 2026 – The legal battle over allegedly inflated water bills in Odessa has intensified, as the Potts Law Firm has amended its class-action lawsuit to include top city officials and the primary contractor behind the city's troubled water system modernization.

The amended petition, announced today, names Odessa City Manager Aaron Smith and Director of Billing and Collection Rogelio F. Salcido as defendants. It also substitutes contractor Performance Services into the lawsuit, replacing the originally named Master Meter. The move signals a strategic escalation in the ongoing fight by thousands of residents and businesses who claim they have been systematically overcharged for water.

The underlying claims of the lawsuit, first filed in September 2025, remain the same: that the City of Odessa has been issuing wildly inaccurate water bills for years. However, the addition of new defendants aims to bring direct accountability to the individuals and companies at the heart of the city's water infrastructure and billing operations.

A Strategy for Accountability

The decision to add City Manager Aaron Smith and Billing Director Rogelio F. Salcido is a calculated legal maneuver. According to the Potts Law Firm, the officials are being sued solely in their official capacities. This is a requirement under Texas law to secure effective injunctive relief—a court order that would compel the city to halt its current billing practices and implement changes.

By naming the officials responsible for carrying out the city's policies, the lawsuit ensures that any potential court order can be directed at the individuals with the authority to enact change. The filing states that Smith and Salcido are "best positioned to implement any court-ordered changes related to the delivery of water services, billing procedures, and reimbursement of incorrectly billed water services."

This legal tactic cuts through bureaucratic layers, aiming to make any potential court-mandated reforms enforceable. Rather than a vague order to the city as a whole, the plaintiffs are seeking a directive that specific department heads must follow, a move intended to streamline the path to a potential resolution for affected customers.

Smart Meters, Smarter Problems?

Perhaps the most significant change in the lawsuit is the substitution of Performance Services as a defendant. This shift puts a spotlight on the city's ambitious and costly water system modernization project. In 2023, Performance Services secured a $42 million contract with the City of Odessa to overhaul its aging water infrastructure.

The project was intended to be a solution, not a source of conflict. It promised to replace outdated meters with state-of-the-art smart meters, implement advanced monitoring technology, and ultimately improve billing accuracy and system reliability. For a city in arid West Texas, reducing water loss and ensuring precise tracking of this precious resource was a critical goal.

However, the modernization project is now at the center of the controversy. The lawsuit alleges that instead of improving accuracy, the new system, which includes smart meters from Master Meter but was contracted through Performance Services, has contributed to the problem. The very technology meant to provide clarity has become entangled in claims of "faulty meters and software errors."

The lawsuit now directly challenges the performance of the contractor responsible for this massive public works project, raising questions about the implementation and efficacy of multi-million dollar 'smart city' solutions.

A Flood of Complaints

The legal filings are the culmination of years of frustration from Odessa residents. The issue exploded into public view in the summer of 2025 when approximately 1,500 residents reported their water bills had skyrocketed. The Potts Law Firm claims to have since heard from thousands of affected residents and businesses, estimating the number of potential victims could be as high as 40,000.

Stories from residents paint a picture of confusion and financial distress. Some homeowners saw their billed water usage jump from a typical 4,000 gallons a month to as much as 40,000 gallons. In one extreme case, a resident was allegedly charged for 96,000 gallons in a single month. Local businesses were not spared, with hotels reporting bills for usage eight times their normal rate, threatening their operational budgets.

Initially, city officials, including then-Assistant City Manager Aaron Smith, attributed the problem to a "software coding error." They maintained that the meters themselves were accurately tracking usage but that a glitch in transferring data for billing led to unexpected and massive "back billing" for some customers. Many residents who tried to dispute their bills were reportedly told the charges were correct and had to be paid.

The lawsuit contends the problem is deeper than a simple glitch, alleging a systemic failure to "investigate and correct clearly false monthly water usage amounts." As the legal proceedings advance, the amendments are intended to "streamline the case, reduce distractions, and allow the litigation to proceed efficiently," according to the law firm. For the thousands of Odessa residents and businesses caught in the middle, the hope is that this increased legal pressure will finally bring clarity, relief, and a system they can trust.