The main hallway of San Bernardino International Airport. A recent grand jury report questions whether public money was spent wisely.

10:28 PM PDT on Wednesday, July 13, 2011

By KIMBERLY PIERCEALL
The Press-Enterprise

Eleven jet bridges, five baggage carousels and hundreds of seats, all hand-me-downs from American Airlines’ JFK terminal, are a key issue between San Bernardino International Airport officials and a civil grand jury.

Airport officials said they bought the equipment for a bargain, but a scathing grand jury report said the airport may have overpaid and didn’t inspect the old equipment before agreeing to buy it.

An auditor hired by the grand jury said, for example, the used chairs cost more than twice as much as new chairs.

In another example, the jetways that allow travelers to walk to and from the terminal and a plane’s door, could have been 17 to 37 years old when they were purchased in 2007. A jetway’s lifespan is typically 20 years, or 30 year if it has been regularly maintained. As of March, the airport’s unrehabbed jetways had rust, tears and torn-out mechanics.

The grand jury focused its attention on Scot Spencer, who is developing the airport’s terminal and general aviation facilities at the airport. Both projects have grown in scope since 2007 from $45 million to $142.5 million today, and construction continues.

The airport’s board approved paying Spencer up to $4.1 million for the used equipment in July 2007 with a 10 percent contingency, the report says.

The airport’s executive director and leader of its governing board have defended the decision to spend $4.3 million so far on the used equipment.

“We and the board believe we saved money,” said executive director Don Rogers, adding the amount of savings could be between $5 million to $8 million. He did not offer specifics during a recent 4½-hour meeting with the editorial board of The Press-Enterprise or at Wednesday’s regular meeting of the San Bernardino International Airport Authority and Inland Valley Development Agency.

AIRPORT STUDIES CITED

The grand jury report also points to the airport’s own studies that said it wouldn’t need jetways for the first 15 years and could have used mobile stairways during that time.

San Bernardino Mayor Pat Morris, who is president of the airport authority and co-chair of the IVDA, said the airport needed jetways to appeal to airlines with first-class service.

“We got a remarkable bargain,” Morris said when reached shortly after the report was released. “We were aware that we couldn’t build a modern terminal … if we had to go out and buy everything new.”

The two agencies have been overseeing the economic redevelopment of the former Norton Air Force Base, which closed in 1994 and resulted in the loss of 10,000 jobs.

The grand jury specifically faulted Rogers for not executing an official purchase agreement with Spencer’s company to buy the equipment. Instead, a letter dated Aug. 4, 2008, written by Spencer to Rogers, outlines the “understanding” between the airport authority and Spencer’s company Norton Development Co., listing the prices that would be paid for some but not all of the equipment:

$1.2 million for five baggage carousels ($235,000 each)

$808,134 for six refurbished used jetways ($134,689 each)

$599,500 for five as-is used jetways ($119,910 each)

That amount brought the total to $2.6 million with a provision that the airport, according to the letter to Rogers, also would pay $406,000 to pay off Norton’s loan to buy the equipment, making the amount close to $3 million.

The letter mentions that the airport also was purchasing the terminal’s public address system and gate furniture, but there’s no notation of the cost.

The grand jury’s auditor estimated that the used chairs cost the airport more than twice as much as new chairs would have cost.

The report says the airport received 820 chairs (and 132 seat replacements) for $273,141 counting refurbishment, storage costs and transportation. That put the cost at about $308 per chair, according to the grand jury, which factored in a lower cost for the replacements. The report cited the airport’s own estimate that buying new chairs would have cost it $130 each, or $115,000 total.

STORED IN A FIELD

Several used jetways at San Bernardino airport that have not been refurbished and appear to be stored in a field could be worth anywhere from scrap value to $60,000 to $70,000 each, according to an aviation equipment appraiser. The appraiser wished to remain anonymous in order to avoid being sought to potentially testify about the values. He based his estimation on seeing the photos of the jetways that appear in the grand jury report.

San Bernardino paid $119,910 each for the five jetways in as-is condition from Spencer’s Norton Development Co., which bought them from American Airlines in 2007.

The airport agreed to pay $134,689 for six more jetways being refurbished in Texas.

The grand jury report estimated that the jetways could have been anywhere from 17 to 37 years old at the time they were bought in 2007. A jetway’s lifespan is typically 20 years, or 30 years if it has been regularly maintained, before it needs to be overhauled, the appraiser said.

“If these things were really good, American (Airlines) would have kept them and refurbed them,” he said.

An American Airlines spokesman confirmed that several pieces of equipment from its JFK terminal had been sold to a company named Norton but wouldn’t say how much Norton paid.

“This was a private transaction and we did not disclose the sale price, and we would have no knowledge of what Norton might have charged another buyer to resell our former equipment,” said spokesman Andrew Backover.

San Bernardino Airport officials have not responded to requests for documents related to a bill of sale between American Airlines and Norton that Spencer said he provided or formal purchase agreement between the airport and Spencer.

The aviation equipment appraiser estimated that new jetways could cost anywhere from $225,000 to $500,000 or more based on the features of each and how many an airport or airline was ordering at a time.

Based on the grand jury photos of the used jetways, he estimated a fully refurbished jetway should have cost the airport between $175,000 to $200,000.

The airport said it paid $134,689 for each refurbished jetway, but the grand jury report questions if transportation costs were not included in the price. The report also says that an additional $72,422.21 was spent on each of the three jet bridges attached to the terminal to install a walkway that extends the length for fire prevention and to reach shorter regional jets. To outfit the rest of the jetways in the same way could cost the airport another $619,378, the report said.

According to aviation sources, there’s not much of a market for used jetways.

Los Angeles World Airports spent $8.8 million for 26 brand new jetways at Ontario International Airport in 1998 when its twin terminals were finished, or about $338,461 each.

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