Consultant deal with Central Basin more than doubled to $500,000, disregarding the standard bidding procedure.
In the small town of Central Basin, California, questions are being raised about a consulting contract with MV Cheng and Associates, a company based in Texas. The corporate headquarters of the firm, as indicated on their website, are single-family dwellings in Texas and Pasadena, owned by Misty Cheng and MV Cheng Properties LLC respectively.
In June of 2024, Cheng secured a consulting agreement with Central Basin, just one month after Elaine Jeng took over as General Manager. The amendment to Cheng's contract lacked a sunset clause, meaning there were no specified timelines or deliverable-based limits for scaling back services. In just a few months, the Board of Directors approved Amendment No. 1 to Cheng's contract, expanding it to over $250,000 without going out to bid.
The second amendment transformed Cheng's temporary support contract into a long-term outsourced staffing arrangement, and it lacked a defined project completion date, suggesting that Cheng's presence within the district may continue indefinitely. The amendment also expanded Cheng's authority, enabling her to assign personnel across the Finance Department as needed.
MV Cheng Properties LLC, a Texas-registered company owned by Misty Cheng, has not filed a Statement and Designation by Foreign LLC, which is required for out-of-state LLCs conducting business in California. Operating in California without this registration can have significant legal implications, including the company potentially being barred from enforcing contracts in California courts, facing fines and penalties, and being subject to legal challenges regarding its ability to perform work and collect payments.
The cost structure of the engagement presents a financial issue for ratepayers, as high hourly rates are applied across multiple roles for extended periods, potentially making this arrangement significantly more expensive than hiring qualified in-house staff.
Concerns about transparency and accountability have been expressed by Board Members Leticia Vasquez, Jim Crawford, and Art Chacon, regarding the contract amendments. The contract with MV Cheng and Associates started at under $25,000 and was approved by the General Manager without board oversight. Questions about Cheng's Texas business and contract amendments went unanswered, including those directed to Central Basin General Counsel Victor Ponto.
The second amendment to Cheng's contract increased the total contract value to $501,125. The search results do not provide specific information about how Misty Cheng, owner of MV Cheng and Associates, became a contractor for Central Basin, nor details about the legal implications of her Texas-based company operating in California without proper registration.
In light of these concerns, the community is calling for greater transparency and oversight in the contracting process at Central Basin Water District.
- The local news in Central Basin, California, has been disseminating articles about a controversial consulting contract with MV Cheng and Associates, a firm based in Texas, which operates in various real estate industry segments.
- In community news forums and general-news platforms, discussions are ongoing about the consulting agreement with MV Cheng and Associates, alleging potential legal issues related to the company's failure to register in California.
- Politicians and business leaders in Central Basin have questioned the contract terms, including the absence of a sunset clause, lack of competitive bidding, and unclear project completion dates, raising concerns about the financial impact on ratepayers.
- Concerned residents are calling for events addressing transparency and accountability in the contracting process at Central Basin Water District, hoping to gain insights into the contract amendments and Misty Cheng's engagement as a contractor, as well as the legal implications for MV Cheng and Associates operating in California without proper registration.
