Sunday, July 07, 2013

Grand Jury gives San Bernardino International Airport (KSBD) a thumbs up

SAN BERNARDINO -- This time two years ago, the Grand Jury raised "serious questions" about management practices, internal controls and other issues at San Bernardino International Airport, and the airport passed a budget with a $982,400 deficit.

This month, a follow-up by the Grand Jury concluded that SBIA has implemented all of the county panel's recommendations, and the budget for the 2013-14 projects a $4.5 million profit. As with previous years, however, the budget includes an "investment" from the agency responsible for development around the airport -- $5.5 million for 2013-14, the same as last year.

Officials say things are indeed turning around.

"What's important is we focused on real opportunities for the airport, not imagined or fraudulently represented opportunities, and in doing that we are gradually building a positive reputation," said Interim Executive Director A.J. Wilson. "We basically adopted our budget last week at the commission meeting and that budget for the first time begins the process of building operating reserves so it can some time in the near future become self-sustaining."

Wilson's answer alludes to serious problems the airport had with developer Scot Spencer, who in March was charged with multiple felonies, including criminal conspiracy and perjury in connection with alleged corruption at the airport.

County Supervisor Josie Gonzales, who sits on the board of the Inland Valley Development Agency -- the body that develops land around the airport -- criticized the airport and its relationship with Spencer in the past, calling it "a mess."

She was guardedly optimistic Friday.

"We need to be cognizant of past actions and decisions and situations, and we need to be mindful of how we move forward, making sure those actions and missteps are not repeated," she said. "I think the Grand Jury did a great job of addressing the entire situation, and while it's not a complete bill of health, if you will, it is definitely encouraging and mandates that we continue to be transparent and progressive as we move forward."

This year's three-page review of SBIA is one of four follow-ups to earlier Grand Jury investigations, and is headed by Ed Burgnon, who was also foreman in 2011 when the Grand Jury blasted the airport management.

Problems identified in 2011 included questionable practices in regard to its finances, construction management and how it awards developer contracts, according to the report, as well as recommendations about how to address those issues.

"SBIA has implemented all of the Grand Jury recommendations," concludes this year's report.

Only about a quarter of the $43 million budget goes to the general fund, which reports a surplus of $305,711. That includes a $5.1 million transfer from the property management fund and $5.5 million from the IVDA, with operating revenue of $455,000 -- including landing fees, filming revenue and fuel flow fees.

The property management fund had a surplus of $2 million, after spending $23 million on improvements and the transfer to the general fund. Its revenue comes largely from leases and grants.

"We are in many ways still modernizing the airport facilities and overcoming past hiccups," said San Bernardino Mayor Pat Morris, who is also head of the SBIA board. "A lot of capital-improvement projects are still in progress that will do well for us in the future, and all those projects are on their way to completion."

Morris points to new grants from federal agencies that withdrew their support in previous years as a sign of their faith in the airport.

Airlines have expressed interest in the international terminal under construction, and meetings with five commercial airlines in Atlanta last month "opened doors" toward future investment, Wilson said.

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