Former Donna city manager sues, wants $180K in lump sum

DONNA — The City of Donna has a lot of things going for it, but its brand of politics, going back decades, always seems to find a way to bring a negative light on the city at least two or three times a year.

Now, a recent interview with City Commissioner Ernesto Lugo reveals a municipality grappling with the fallout of the Jorge Peña era —a one-year tenure as city manager that ended in his firing last December, and now a lawsuit that he filed against the city last month.

Last but not least, an employment contract that Lugo says was “altered” without full knowledge of the city council.

“We were unaware of the altered terms,” says Lugo. “Coincidentally, the new contract was drafted just before the city fired him.”

Meanwhile, Donna Mayor David Moreno hasn’t responded to a request for an interview.

Granted, most attorneys will advise elected officials not to discuss ongoing litigation, but as The Advance explained to the mayor via a text, it’s not the lawsuit we want to discuss. But rather, the fact that he signed an altered contract with the former city manager without revealing it to his fellow members on the city council, according to Ernesto Lugo.

The Peña Paper Trail

Former City Manager Jorge Peña, in his court filings, says he was fired in violation of his contract and now the city owes him $180,000.

In one lump sum, if you please.

But according to Lugo, that contract, which is attached to Peña’s court docket, isn’t worth the paper it’s printed on because the original employment contract discussed and approved by the city council, not long after Peña was hired in late 2024, sure isn’t the one now being paraded around with only three signatures on it (Peña’s, the mayor’s, and a witness).

Interesting, too, that the city attorney, Dennis Ramirez, didn’t sign the contract in question.

“Someone made some major changes to his (Peña’s) original contract without bringing it back to the entire city council for approval, and the mayor signed off on it. The city attorney didn’t even sign it,” says Lugo.

The contract in dispute is dated Dec. 5, 2025.

Peña was fired approximately 10 days later, after a year on the job.

Changes in the “new contract” include new clauses, all of which would benefit Peña if the city council majority ever voted him out of a job.

The suspicious changes include a clause requiring a super-majority vote to fire him (four of the five on the city council), when only three of the five voted to can him last December, and a salary requirement of $180,000 net pay — not gross pay.

In the world of city finance, that’s a massive distinction that Lugo says was never authorized by the city council.

Meaning, the $180,000 “net pay” in the new contract is actually worth more than the “gross salary” mentioned in his original employment contract.

Confusing, yes, but some might argue that it’s not by chance.

And according to the new contract, Peña is due the $180K since Donna fired him two months ago.

“That’s not the original contract that the city council approved,” says Lugo.

Changes Made

Despite the legal headaches and another Donna city council meeting this week, Lugo pointed to some immediate progress made since interim City Manager Dr. René Reyna (Donna ISD’s former supe) took the helm.

“He was able to slash approximately $300,000 in expenditures in a single week,” says Lugo. “The financial health of the city is good if we get things back where they should belong.”

Under Peña’s tenure, the city had been on what looked to be a consultant-shopping binge. A consultant here, a bridge consultant there, security consultants there, and before anyone knew it, the money was starting to add up.

Peña had also hired a private security firm for the bridge without going through a formal bidding process (RFPs), says Lugo.

The former city manager claimed “emergency authority” to hire the security firm to work at the bridge. This, after downsizing the budget for Donna police (who used to work at the bridge) by approximately 20 percent, but Lugo isn’t buying it.

“The ‘emergency authority’ language is there in case of a natural disaster, like a hurricane. The city had no natural disaster when the former city manager hired the security firm, again without going through the proper procurement procedures.”

All the while, some city benefits were getting cut, like longevity pay for cops, the 2:1 retirement ratio that the city had in place for years, suddenly cut down to an even split 1:1.

“Those things have been restored,” says Lugo.

This Tuesday, the city of Donna and Jorge Peña meet in mediation to discuss the lawsuit, as so ordered by presiding Judge Ramon Alvarez (332nd state District Court).