Worms on my Desert Museum Palo Verde

LUCERNE VALLEY, CA(Zone 9a)

I just had to pull my DM PV as it died down to the ground which is very unusual for this climate. It turned a tan color and the bark started peeling. I'm going to re-pot and nurse it back to health. Anyway, As I was digging, I pulled 20 of these thick caterpillar like worms out of the dirt surrounding the roots. I noticed this worm in an area about 100 ft. from where the Dm PV's spot last week, and it was almost as thick as a snake and almost as long as my thumb! It has transparent skin and is quite meaty. We had a week of temps in the teens at night last winter, but my other DM PV came back with gusto all the way to the top so I wonder if this worm caused my tree to die. Can anyone enlighten me, I was going to replace the tree with a new one today in the same spot but I need to know if I should treat the soil with some type of insecticide?? Please help!

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