Problems found in contracted work
Josh Dulaney, Staff Writer
Posted: 07/06/2011 05:45:42 PM PDT

SAN BERNARDINO – Officials disagree over whether efforts to attract a commercial airline to the former Norton Air Force Base will be harmed by a report that raises questions about work to makeover the site.

The annual report by the San Bernardino County Grand Jury questions how the San Bernardino International Airport has handled its finances and doles out developer contracts, as well as how it conducts construction management.

“If we don’t address the concerns that are in the Grand Jury report we will have some serious trouble,” said Josie Gonzales, chairwoman for the county Board of Supervisors, and member of the San Bernardino International Airport Authority board.

The civil Grand Jury commissioned a consultant’s audit of the airport after it received complaints two years ago of irregularities occurring there.

The audit found several contracts entered into with Scot Spencer, a convicted felon who has served time in federal prison for bankruptcy fraud and has been banned from the aviation industry; a fast-tracked terminal construction project based solely on a developer’s projections; and that Executive Director Don Rogers is a founding partner of an accounting firm hired to conduct the airport’s audits.

Gonzales said the report gives airport officials an opportunity for an open discussion and presentation of the facts.

That may have already started, as Gonzales said she has spoken with Rogers and Mayor Pat Morris, who is the board president, about addressing whether Spencer is an asset to the project in light of his felony record.

She said legal opinion should be sought in the matter because Spencer’s background is frequently brought up among questions surrounding work at the airport.

“I think we need to settle this once and for all,” Gonzales said.

The SBIAA, a joint powers authority composed of the county of San Bernardino and the cities of San Bernardino, Colton, Loma Linda and Highland, is charged with redeveloping the aviation portion of the former air base.

The air base was closed in 1994 and converted to civilian and commercial use.

“I truly believe the airport is a worthwhile goal and is going to benefit our community and already has,” said Ovidiu Popescu, mayor pro tempore of Loma Linda, and a board member.

Popescu doesn’t think the Grand Jury report will hamper efforts to bring in a commercial airline, saying there will always be critics of the airport, just as there are critics of L.A./Ontario International Airport.

“They are more concerned that we have a well-run operation, and from everything I’ve seen, we do,” Popescu said. “I think an airline is going to make a decision based on whether they can be profitable, and I think they can be.”

In a letter to the Grand Jury, Rogers said officials with the SBIAA and the Inland Valley Development Agency, which oversees redevelopment for the non-aviation portion of the former air base, “look forward to thoroughly reviewing the consultant’s report and correcting the significant factual errors contained in the report.”

Rogers said that the report was wrong about leases allegedly never executed and dates and terms of crucial agreements, and was wrong about particular legal interpretations.

The IVDA is helping finance airport improvements through its share of property taxes generated by businesses in its territory.

Those businesses include Stater Bros. Markets headquarters and distribution centers for Kohl’s, Mattel and Pep Boys. As for capital investments, the airport has invested tens of millions into new concrete, a U.S. Customs and Border Protection facility, and a new terminal.

The audit found that between January 2006 and January 2011, the cost of the terminal project grew from $22 million to more than $100 million, with costs still rising.

Popescu said the rising costs were partly because of new regulations imposed by the Transportation Security Administration and the Federal Aviation Administration.

He said when it comes to the terminal project, he trusts the advice of Bill Ingraham, aviation director for the airport, and Mike Burrows, the IVDA’s assistant director, rather than the second-guessing of the Grand Jury.

“We get our direction from professional airport people,” Popescu said.

In that regard, Ingraham didn’t seem concerned about the Grand Jury report causing commercial airlines to shy away from San Bernardino.

“I don’t see anything in this report that would hurt us as far as air service,” he said.

Popescu said the airport is building a “top-notch” facility and is confident that a commercial airline will someday fly out of the city.

He also pointed to Boeing Co. conducting test flights, and Texas-based Million Air, a terminal and fueling service for those who fly aboard private planes, as evidence that work at the airport has been fruitful.

“From our perspective as a city, we believe the airport is a worthwhile goal and we continue to support it,” Popescu said.

Gonzales said rising costs at the airport have been incurred only to make necessary improvements.

“We spent the money and there are very solid assets that have been added to the airport footprint that validate the airport expense,” she said.

In regards to Rogers’ involvement in airport audits, Gonzales said his help was welcomed, but there should have been requests for proposals from other firms to see if they could “come along and do a better job.”

“That is a serious concern and it has to be addressed,” Gonzales said.

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